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The anatomy of emergence, with a focus upon capital formation

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  • Harper, David A.
  • Endres, Anthony M.

Abstract

Emergence 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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  • Harper, David A. & Endres, Anthony M., 2012. "The anatomy of emergence, with a focus upon capital formation," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 352-367.
    • Handle: RePEc:eee:jeborg:v:82:y:2012:i:2:p:352-367
    DOI: 10.1016/j.jebo.2011.03.013
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    4. Burmaoglu, Serhat & Sartenaer, Olivier & Porter, Alan, 2019. "Conceptual definition of technology emergence: A long journey from philosophy of science to science policy," Technology in Society, Elsevier, vol. 59(C).
    5. J. Barkley Rosser, 2020. "Austrian themes and the Cambridge capital theory controversies," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(4), pages 415-431, December.
    6. Muñoz, Félix & Encinar, María Isabel & Fernández-de-Pinedo, Nadia, 2014. "Intentionality and technological and institutional change: Implications for economic development," Working Papers in Economic Theory 2014/04, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
    7. John E King, 2015. "Microfoundations and Marxism," The Economic and Labour Relations Review, , vol. 26(4), pages 652-659, December.
    8. Paige Clayton & Maryann Feldman & Benjamin Montmartin, 2019. "Funding Emerging Ecosystems," GREDEG Working Papers 2019-25, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    9. Dai, Shuanping, 2012. "The Emergence of Efficient Institutions and Social Interactions," MPRA Paper 47011, University Library of Munich, Germany.
    10. Félix-Fernando Muñoz & María-Isabel Encinar, 2015. "Intentionality and the Emergence of Complexity: An Analytical Approach," Economic Complexity and Evolution, in: Andreas Pyka & John Foster (ed.), The Evolution of Economic and Innovation Systems, edition 127, pages 171-190, Springer.
    11. Martin, Ron & Sunley, Peter, 2012. "Forms of emergence and the evolution of economic landscapes," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 338-351.
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    15. J. Barkley Rosser, 2014. "Natural Selection versus Emergent Self-Organization in Evolutionary Political Economy," Advances in Austrian Economics, in: Entangled Political Economy, volume 18, pages 67-91, Emerald Group Publishing Limited.
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    More about this item

    Keywords

    Emergence; Evolutionary dynamics; Complexity; Capital; Production; Innovation; Spontaneous order;
    All these keywords.

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • 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 - - - Investment; Capital; Intangible Capital; Capacity
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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