The anatomy of emergence, with a focus upon capital formation
AbstractEmergence is a unifying theme of both evolutionary economics and complex systems theory. In spite of this centrality, emergence in economics has not been subject to an extensive critical analysis. This paper remedies this deficit. We identify several conditions that economic patterns (i.e. rule-systems, structures) must satisfy to qualify as emergent: (1) material realization (emergent patterns are realized in physical structures and processes); (2) coherence (pattern is not a mere aggregate but a systemic whole); (3) non-distributivity (pattern possesses global properties absent from its parts); (4) structure dependence (systemic properties depend upon connective structure). These four core features are common to all forms of emergence in economics. Evolutionary economic systems also exhibit extra-strength versions of emergence, which require that patterns possess one or more additional features: (5) genuine novelty; (6) unpredictability in principle; and (7) irreducibility. We introduce three basic forms of emergence that occur in economic systems—minimal, diachronic and synchronic emergence—and apply these ideas to capital formation at all levels of economic order. The economy-wide capital structure exhibits strongly emergent properties (both diachronic and synchronic) that depend on its structural and functional organization; it is not a mere aggregate of capital goods. Within the realm of capital phenomena, we also compare the distinguishing characteristics of emergent and spontaneous (self-organizing) orders. We provide a case study of the iPhone as an emergent capital pattern to illustrate conditions (1)–(7) above and the different types of emergence.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 82 (2012)
Issue (Month): 2 ()
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Web page: http://www.elsevier.com/locate/jebo
Emergence; Evolutionary dynamics; Complexity; Capital; Production; Innovation; Spontaneous order;
Find related papers by JEL classification:
- B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Institutional; Evolutionary
- B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
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