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Complexity Economics Shows Us Why Laissez-Faire Economics Always Fails

• Mirioron 8y ago
  >The story Beinhocker tells is simple, and not unlike the story Darwin tells. In an economy, as in any ecosystem, innovation is the result of evolutionary and competitive pressures. /.../ >And like an untended garden, an economy left entirely to itself tends toward unhealthy imbalances. That's a pretty bad analogy, isn't it? Humanity is the result of evolution in an untended garden. Once humanity stepped up and started meddling with the environment things have rather rapidly deteriorated. I would argue that the way the author got this analogy wrong is also the way they get markets wrong. Markets are efficient in a long term perspective. A free market won't give you as much efficiency as a managed market would give you at a single point in time, but in the long run a free market is going to be more efficient. The management of a market eventually becomes too cumbersome and innovation takes a backseat to keeping the existing actors happy.