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Controversial, but eye-opening and very informative. Recommend for anyone with a brain.

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Eye opening and extensive, but not rigorous. The title is a play of words on Charles Darwin's 'Origin of Species', possibly combined with Adam Smith's 'Wealth of Nations'.
This book argues that we
should be thinking about economic theory from an evolutionary perspective, and presents evidence of why it can explain and somewhat reconcile both macroeconomic and microeconomic phenomena. Most of the book is about economic theory (though by no means requires an economics background to be understandable or interesting), but the last of four parts moves on to discuss how the perspective can be applied to achieve improvements in business, finance and policy.
I had previously read the odd article on 'evolutionary economics', but this book has given me a significantly better understanding of the field. It is very well researched, and provides strong credibility to the evolutionary perspective. I am an economic and financial policy analyst, and having read this gives me an additional perspective to view problems from.
That leads to the first of my two criticisms of this book. Most economists (at least where I'm from) approach policy with knowledge of numerous different economic perspectives, utilising the most applicable where appropriate. This book picks 'traditional economics' as the mainstream economic view, and criticises it based on the assumption that it is heralded as the answer to how economic systems work. Which it is not (and hasn't been for a while), making it a somewhat a straw-man argument. Like other perspectives, it can be useful in certain applications.
This then allows the author to argue that evolutionary economics should take the podium as the answer to economic theory, due to its superiority over traditional economics. Moreover, rather than 'evolutionary economics', he uses the term 'complexity economics', allowing him to combine evolutionary economics with any other piece of theory that is not traditional economics. For this he presents little theoretical cohesiveness other than showing that the views are not at odds with each other. In a sense, 'complexity economics', being a portfolio of several different theories, is already the current mainstream view, just without so much focus on evolution. Still, you can't blame him; it makes for a more epic argument, and he has books to sell.
My second criticism is that he frequently uses metaphors to present arguments, although often fails to sufficiently link them back to the real world before drawing a conclusion. From memory it occurs most in the chapter applying network theory to internal business organisation. If his arguments hold water, it should not be difficult to include this link.
Overall, however, I found this book quite enlightening. It is a bit unnecessarily long and took me a while to get through, although in the end was well worth it. I recommend it.
 

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daviding says: Eric Beinhocker provides a concise description of The Entropy Law and the Economic Process by Nicholas Georgescu-Roegen, and adds a small extension. Beinhocker writes ...
A Proposal
: Three Conditions for Value Creation
Georgescu-Roegen made three important observations that fundamentally connect the idea of the economy as an evolving, complex system with our question of the origin of wealth.
First, he noted that processes that create economic value are inherently irreversible. Time in economic systems has a one-way arrow -- or as he put it, you cannot burn the same lump of coal to power a locomotive twice.
Second, as he wrote, "Casual observation suffices now to prove that our whole economic life feeds on low entropy, to wit, cloth, lumber, china, copper, etc. ... all of which are highly ordered structures." As noted before, economic processes are all about using energy to turn relatively low-ordered raw materials and information into more highly ordered products and services.
And third, while creating products and services is an inherently order-creating activity, not all order has economic value. As Georgescu-Roegen coyly noted, "No man can use the low entropy of poisonous mushrooms and not all men struggle for that contained in seaweed or beetles." [p. 302]
I will go a step beyond Georgescu-Roegen's claims now and propose that taken together, these three observations rell us exactly what conditions have to be met for economic value to be created, which leads us to a new definition of wealth itself. To add more precision to Georgescu-Roegen's observations, I will restate them in more formal terms and refer to them collectively as the G-R Conditions. [pp. 302-303]
A pattern of matter, energy, and or information has economic value if the following three conditions are jointly met:
1. IRREVERSIBILITY. All value-creating economic transformations and transactions are thermodynamically irreversible.
2. ENTROPY. All value-creating economic transformations and transactions reduce entropy locally within the economic system, while increasing entropy globally.
3. FITNESS. All value-creating economic transformations and transactions produce artifacts and or actions that are fit for human purposes.
We will discuss each condition in turn. [p. 303]
 

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