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In Fisher Investments Press author Michael Hanson’s opinion, what links all these views about capitalism, and the reason markets and economies are vastly more efficient than any government, individual, or central command system of any kind, is that they are Complex, Emergent, Adaptive Systems. We’ll call them CEASs for short.
Theories of complexity and emergence are relatively new and find their origins in social science and physics. They are only just now being thought of for systems like economies and markets. Some of the leading studies in this subject are being conducted at the Santa Fe Institute, and Hanson highly recommends Michael J. Mauboussin’s book, More Than You Know: Finding Financial Wisdom in Unconventional Places, or Eric Beinhocker's, Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics, if you wish to delve further into these subjects. Today, CEASs are being used to understand everything from how a simple DNA strand can create a vastly more complex human organism to how the weather works, how cities develop, how the universe and its matter behave, how ant farms work, how the ecosystem and natural selection work, and yes, even how stock markets work.*
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* Technically, these are examples of complex, adaptive systems that display emergent behavior, but for the sake of clarity Michael Hanson has wrapped into one more useful acronym to describe markets and economies.
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