Unholy Trinity: Labor, Capital, and Land in the New Economy

My theme in these lectures is the capacity of the methods of the Classical political economists, Adam Smith, Thomas Malthus, David Ricardo, and their critic, Karl Marx, to reveal the self-organizing character of the capitalist economy regarded as a complex, adaptive, non-equilibrium system. From one point of view this is an exercise in anachronism, since the language of complex systems theory and its application to economic problems is only about forty years old, and it is implausible to claim that Smith or Ricardo or Marx thought about the problems of the economy using the conceptual tools of complexity science. On the other hand, I will argue that the language and vision of the Classical political economists incorporates many insights of contemporary complex systems theory. There are also indirect but important intellectual pathways that connect the Classical political economists of the eighteenth and nineteenth centuries to the twentieth century emergence of complexity science. I also will argue that complexity theory sheds some light on the extraordinary effectiveness of the Classical political economists' methods and the depth of their analytical results. I believe that contemporary economists still have much to learn from these methods and results about the capitalist economy and its evolution. Complexity theory represents an ambitious effort to analyze the functioning highly organized but decentralized systems composed of very large numbers 1 2 CONTENTS of individual components. The basic processes of life, involving the chemical interaction of thousands of proteins, the living cell, which localizes and organizes these processes, the human brain in which thousands of cells interact to maintain consciousness, ecological systems arising from the interaction of thousands of species, the process of biological evolution from which new species emerges, and the capitalist economy, which arises from the interaction of millions of human individuals, each of them already a complex entity, are leading examples. Complexity science starts from the bold and controversial conjecture that these diverse systems have important features in common that transcend their apparent differences in scale, material components, and organizing laws of motion. What these systems share are a potential to configure their component parts in an astronomically large number of ways (they are complex), constant change in response to environmental stimulus and their own development (they are adaptive), a strong tendency to achieve recognizable, stable patterns in their configuration (they are self-organizing), and an avoidance of stable, self-reproducing states (they are non-equilibrium systems). The task …