economists-from-northern-ireland

"South Africa has witnessed the replacement of racial apartheid for what can be accurately described as 'class apartheid.'"

"The average black household earned one-sixth as much as the average white household in 2000, down from one-quarter in 1995."

"A technology that by chance gains an early lead in adoption may eventually 'corner the market' of potential adopters, with the other technologies becoming locked out."

"This paper has attempted to go beyond the usual static analysis of increasing-returns problems by examining the dynamical process that 'selects' an equilibrium from multiple candidates, by the interaction of economic forces and random 'historical events'. It shows how dynamically, increasing returns can cause the economy gradually to lock itself in to an outcome not necessarily superior to alternatives, not easily altered, and not entirely predictable in advance."

"The type of rationality we assume in economics — perfect, logical, deductive rationality — is extremely useful in generating solutions to theoretical problems. But it demands much of human behavior — much more in fact than it can usually deliver. If we were to imagine the vast collection of decision problems economic agents might conceivably deal with as a sea or an ocean, with the easier problems on top and more complicated ones at increasing depth, then deductive rationality would describe human behavior accurately only within a few feet of the surface. For example, the game Tic-Tac-Toe is simple, and we can readily find a perfectly rational, minimax solution to it. But we do not find rational “solutions” at the depth of Checkers; and certainly not at the still modest depths of Chess and Go."

"The inductive-reasoning system I have described above consists of a multitude of “elements” in the form of belief-models or hypotheses that adapt to the aggregate environment they jointly create. Thus it qualifies as an adaptive complex system. After some initial learning time, the hypotheses or mental models in use are mutually co-adapted. Thus we can think of a consistent set of mental models as a set of hypotheses that work well with each other under some criterion—that have a high degree of mutual adaptedness. Sometimes there is a unique such set, it corresponds to a standard rational expectations equilibrium, and beliefs gravitate into it. More often there is a high, possibly very high, multiplicity of such sets. In this case we might expect inductive reasoning systems in the economy—whether in stock-market speculating, in negotiating, in poker games, in oligopoly pricing, in positioning products in the market—to cycle through or temporarily lock into psychological patterns that may be non-recurrent, path-dependent, and increasingly complicated. The possibilities are rich."

"Conventional economic theory is built is built on the assumption of diminishing returns. Economic actions engender a negative feedback that leads to a predictable equilibrium for prices and market shares. Such feedback tends to stabilize the economy because any major changes will be offset by the very reactions they generate. The high oil prices of the 1970s encouraged energy conservation and increased oil exploration, precipitating a predictable drop in prices by the early 1980s. According to conventional theory, the equilibrium marks the “best” outcome possible under the circumstances: the most efficient use and allocation of resources."

"In many parts of the economy, stabilizing forces appear not to operate. Instead, positive feedback magnifies the effects of small economic shifts; the economic models that describe such effects differ vastly from the conventional ones. Diminishing returns imply a single equilibrium point for the economy, but positive feedback – increasing returns – makes for many possible equilibrium points. There is no guarantee that the particular economic outcome selected from among the many alternatives will be the “best” one."

"Increasing-returns economics has roots that go back 70 years or more, but its application to the economy as a whole is largely new."

"More than anything else technology creates our world. It creates our wealth, our economy, our very way of being."

"Our deepest hope as humans lies in technology; but our deepest trust lies in nature. These forces are like tectonic plates grinding inexorably into each other in one, long, slow collision. This collision is not new, but more than anything else it is defining our era. Technology is steadily creating the dominant issues and upheavals of our time."

"Paul Krugman's attack on Brian Arthur ("The Legend of Arthur") requires a correction of its misrepresentations of fact. Arthur is a reputable and significant scholar whose work is indeed having influence in the field of industrial organization and in particular public policy toward antitrust policy in hightech industries. Krugman admits that he wrote the article because he was "just pissed off," not a very good state for a judicious statement of facts, as his column shows."

"The Economist Brian Arthur (1994) noted that it is impossible for people to reason deductively in complex situations; there are just too many linkages of facts for anyone to keep them straight."

"Right after we published our first findings, we started getting letters from all over the country saying, "You know, all you guys have done is rediscover Austrian economics"… I admit I wasn't familiar with Hayek and von Mises at the time. But now that I've read them, I can see that this is essentially true."

"Our understanding of how markets and businesses operate was passed down to us more than a century ago by a handful of European economists — Alfred Marshall in England and a few of his contemporaries on the continent. It is an understanding based squarely upon the assumption of diminishing returns: products or companies that get ahead in a market eventually run into limitations, so that a predictable equilibrium of prices and market shares is reached. The theory was roughly valid for the bulk-processing, smokestack economy of Marshall’s day. And it still thrives in today’s economics textbooks. But steadily and continuously in this century, Western economies have undergone a transformation from bulk - material manufacturing to design and use of technology — from processing of resources to processing of information, from application of raw energy to application of ideas. As this shift has occurred, the underlying mechanisms that determine economic behavior have shifted from ones of diminishing to ones of increasing returns."

"Complexity theory is really a movement of the sciences. Standard sciences tend to see the world as mechanistic. That sort of science puts things under a finer and finer microscope. In biology the investigations go from classifying organisms to functions of organisms, then organs themselves, then cells, and then organelles, right down to protein and enzymes, metabolic pathways, and DNA. This is finer and finer reductionist thinking. The movement that started complexity looks in the other direction. It’s asking, how do things assemble themselves? How do patterns emerge from these interacting elements? Complexity is looking at interacting elements and asking how they form patterns and how the patterns unfold. It’s important to point out that the patterns may never be finished. They’re open-ended. In standard science this hit some things that most scientists have a negative reaction to. Science doesn’t like perpetual novelty."

"As we begin to understand , we begin to understand that we’re part of an ever-changing, interlocking, non-linear, kaleidoscopic world."

"[Market outcomes] depends on the cumulation of random events."

"Where we observe the predominance of one technology or one economic outcome over its competitors we should thus be cautious of any exercise that seeks the means by which the winner's innate 'superiority' came to be translated into adoption."

"Another valuable purpose of ridicule is with relation to smaller vices, which are often more effectually corrected by ridicule, than by grave admonition. Men have been laughed out of faults which a sermon could not reform; nay, there are many little indecencies which are improper to be mentioned in such solemn discourses. Now ridicule with contempt or ill-nature, is indeed always irritating and offensive; but we may, by testifying a just esteem for the good qualities of the person ridiculed, and our concern for his interests, let him see that our ridicule of his weakness flows from love to him, and then we may hope for a good effect. This then is another necessary rule, "That along with our ridicule of smaller faults we should always join evidences of good nature and esteem." As to jests upon imperfections, which one cannot amend, I cannot fee of what use they can be: men of sense cannot relish such jests; foolish trifling minds may by them be led to despise the truest merit, which is not exempted from the casual misfortunes of our mortal state."

"All our Ideas, or the materials of our reasoning or judging, are received by some immediate Powers of Perception internal or external, which we may call Senses … Reasoning or Intellect seems to raise no new Species of Ideas, but to discover or discern the Relations of those received."

"A good man deliberating which of several actions proposed he shall choose, regards and compares the material goodness of them, and then is determined by his moral sense invariably preferring that which appears most conducive to the happiness and virtue of mankind."

"The ultimate notion of right is that which tends to the universal good; and when one's acting in a certain manner has this tendency, he has a right thus to act."

"Whoever voluntarily undertakes the necessary office of rearing and educating, obtains the parental power without generation."

"Francis Hutcheson and David Hume were the two most prominent Scottish contributors to moral philosophy before Smith. They had criticized the view of rationalist philosophers, such as Samuel Clarke and William Wollaston, that the judgement and the motive of moral action are functions of reason, an understanding of necessary truth analogous to mathematical thinking. Hutcheson and Hume, in contrast, took the view that moral judgement is affective, rests on feeling, and that the motive for acting upon that judgement must likewise be affective, since reason alone does not have the power to stir bodily behaviour."

"Kant in fact seems to have begun his reflections on moral theory as an adherent of Francis Hutcheson’s moral sense theory. Even after abandoning it, he persists in maintaining the importance of “moral feeling” and tries consistently to make a place for it within his moral psychology."

"Whence this secret Chain between each Person and Mankind? How is my Interest connected with the most distant Parts of it?"

"Wisdom denotes the pursuing of the best Ends by the best Means."

"That Action is best, which procures the greatest Happiness for the greatest Numbers; and that worst, which, in like manner, occasions Misery."