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The Self-Organizing Economy Paperback

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Product Details

  • Paperback: 122 pages
  • Publisher: Blackwell Publishers (December 1995)
  • Language: English
  • ISBN-10: 1557866996
  • ISBN-13: 978-1557866998
  • Product Dimensions: 8.9 x 6 x 0.3 inches
  • Shipping Weight: 6.4 ounces
  • Average Customer Review: 3.0 out of 5 stars  See all reviews (4 customer reviews)
  • Amazon Best Sellers Rank: #1,809,398 in Books (See Top 100 in Books)

Editorial Reviews Review

The book . . . is . . . a piece of serious popular science writing; the author tries to be engaging and clear but is not afraid to use a little mathematics. Krugman's exuberance in describing his work helps get the reader over the rough spots. As a set of lectures aimed at people with backgrounds in economics, it also includes some technical sections that would be hard going for the uninitiated. Fortunately, these can be skipped with little loss of meaning.

. . . Krugman's general approach seems . . . plausible . . . for developing a general understanding of self-organization and complexity, for two reasons. First, he is willing to suppose that there is more than one process going on in the world, as shown by his instability and growth models. It really does seem absurd to suppose that the power law for word-use frequencies in English is generated by the same kind of process that determines earthquakes. SOC, order from instability, and Simon-style growth models appear to be independent explanations for power-law regularities. Second, Krugman starts with a more grounded understanding of the phenomena he studies, so that he knows better what features of reality are lost when he simplifies things in his models.

From the Back Cover

In the last few years the concept of self-organizing systems - of complex systems in which ramdomness and chaos seem spontaneously to evolve into unexpected order - has become an increasingly influential idea that links together researchers in many fields, from artificial intelligence to chemistry, from evolution to geology. For whatever reason, however, this movement has so far largely passed economic theory by. It is time to see how the new ideas can usefully be applied to that immensely complex, but indisputably self-organizing system we call the economy.

This short book, written in an informal and controversial style, shows how models of self-organization can be applied to many economic phenomena - how the principles of "order from instability" which explain the growth of hurricanes and embryos, can also explain the formation of cities and business cycles; how the principles of "order from random growth" can explain the strangely simple rules that describe the sizes of earthquakes, meteorites, and metropolitan areas. Without discarding the powerful insights of conventional economic analysis, Krugman weaves together strands from many different disciplines, from location theory to biology, to create a surprising new view of how the economy forms structures in space and time. --This text refers to the Hardcover edition.

More About the Author

Paul Krugman is the recipient of the 2008 Nobel Prize in Economics. He writes a twice-weekly op-ed column for the New York Times and a blog named for his 2007 book "The Conscience of a Liberal." He teaches economics at Princeton University. His books include "The Accidental Theorist," "The Conscience of a Liberal," "Fuzzy Math," "The Great Unraveling," "Peddling Prosperity," and two editions of "The Return of Depression Economics," both national bestsellers.

Customer Reviews

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Most Helpful Customer Reviews

6 of 7 people found the following review helpful By Stephen R. Laniel on October 25, 2007
Format: Hardcover
This is a delightful little read, bringing bits of complex-systems analysis to economics. It requires little in the way of mathematics. Because it's Paul Krugman, it's effortlessly charming, self-deprecating, and eloquent.

Those who are only familiar with Krugman's excellent New York Times op-ed pieces may not know that he was (and still is?) a world-renowed economist whose work centered on "economic geography" -- i.e., understanding why it is that economic activity on so many scales is localized rather than dispersed. Why do cities exist? Why do they exist where they do? Why is economic activity so concentrated in the West? Why does Africa have such a hard time becoming part of the "developed world"? Clearly there are connections between economic geography and international development. A complete theory of economic geography would explain not only why activity concentrates where it does, but what policymakers can do to bring activity to inactive areas.

The Self-Organizing Economy starts with some simple models of geographic concentration. Suppose that there's a certain benefit to moving your business near an economic center like a city; the benefit may be something as clear-cut as reduced transportation costs. But being further away from a city has its benefits as well, in decreased rent. Tune your parameters accordingly, to qualitatively match observed behavior. Start with a hypothetical land area where businesses are located at random, then use a computer to simulate how the distribution of businesses will change over time. You'll find -- Krugman did -- that concentration is inevitable over a wide range of parameters.

He starts with the segregation model from Thomas Schelling's Micromotives and Macrobehavior.
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6 of 9 people found the following review helpful By A Customer on May 2, 2000
Format: Paperback
Paul Krugman stands out again from the poseurs, charlatans and know-it-alls who think they are the first people to have really understood economics. This book has the quality of an occasional piece, of reflections on the subject rather than an in-depth research monograph, but still the insights just keep on coming.
Maybe reviewers who tack on economics and finance at the end of their list of research "specialties" -- "nonlinear dynamics (especially classical mechanics), statistical mechanics, cosmology, superfluids, hydrodynamics and turbulence, porous media, economics and finance" -- understood all the applications of non-linear dynamics and complexity theory to economies, but for the rest of us this little book is a delight.
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14 of 29 people found the following review helpful By A Customer on November 20, 1998
Format: Paperback
Self-Organising is a well-developped concept in physics and Krugman tries to apply that concept to economics. Despite its interesting title, knowledgable readers will find that there is no real insight offered, other than some common sense discussions. Krugman in the book claimed that before "the visionaries of Santa Fe" economists have tried long ago using "nonlinearity" in modelling economics. Of course nonlinear functions have been used since day one in economics, the question is how to use it CORRECTLY. Krugman's book is just one more example how nonlinearity can be misused.
I still recommend reading this book, at least to understand why the current economics is so boring. Best read together with the two volumes of Santa Fe proceedings (Anderson and Arrow 1987; and B. Arthur et al 1996).
A recent article is revealing on why economics is becoming more and more dismal despite the attempts of putting a new face (like this book): John Cassidy "The decline of economics", The New Yorker Dec.2 1996.
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8 of 27 people found the following review helpful By Professor Joseph L. McCauley on January 8, 2000
Format: Paperback
'Self-Organized' is a widely-used but not precisely defined term. Krugman was inspired by the idea of self-organized criticality made popular by a certain school of physics, but there is nothing original in his book. He has merely lifted notions from another field that he did not invent and, far worse, doesn't understand. For something much better, and which is at least explanatory and seems to make some sense, try his book 'The Return of Depression Economics'. 'The Self-Organizing Economy' is best tossed in the trash can. I confess that the title of my review is not original, but I refuse to divulge the author in order to protect his privacy.
For critical analyses by economists of what is wrong with the basic theory believed by Krugman (and the entire MIT and Chicago schools, the IMF, The World Bank, all so-called neo-classical economics), see Paul Ormerod's 'The Death of Economics'. Like all neo-classical economists, is a utility maximizer, a believer in stable equilibria, but real data (which are always far from equilibrium) show utility maximization to make terribly wrong predictions, not even close to the mark, completely useless except as a way to mislead lawyers and politicians who understand too little to question the results. Also, do not miss reading Mirowski's Machine Dreams-fantastic book!
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