Book Review: David Simpson, The Rediscovery of Classical Economics

David Simpson, The Rediscovery of Classical Economics: Adaption, Complexity and Growth (Cheltenham, UK and Northampton, Mass.: Edward Elgar , 2013), 215

pp. +vi.

In Simpson’s view, twentieth-century equilibrium economics has distorted the main mission of the profession—to understand the processes of change and complexity in economic life.  Contemporary economic theory, Simpson contends, models the economy as a system tending toward equilibrium, a model borrowed from classical (pre-relativity and pre-quantum) physics. Instead, Simpson shows, the economy is dynamic, complex, and never in equilibrium.

The heart of Simpson’s analysis is his engagement with complexity theory. Briefly put, complexity theory posits that the actions of multiple actors give rise to emergent, large-scale structures and processes. Complex systems have five major attributes. They are dynamic and nonlinear; individual agents within such systems learn adaptively over time; agents interact with each other explicitly and directly; macro patterns emerge from a multitude of micro interactions between many agents; and, complex systems evolve through processes of differentiation, selection, and amplification. Thus, in Simpson’s view, the economy has more in common with biological systems than classical physics.

While others, like Brian Arthur, view the economy in much the same way, Simpson makes two important and novel contributions. First, as his title suggests, complexity economics is not new. It was how 19th century economists (at least up to Marshall) thought the economy worked. And the insights of complexity economics bear a striking resemblance to some of the work of the Austrian school. Second, Simpson argues for a renewed embrace of history and context over mathematical formalism. Simpson takes as a telling example the 2008 financial crisis and subsequent near-depression that occurred, despite that most equilibrium economists thought that panics and depressions were things of the past, having been mastered by Keynesianism and the Efficient Market Hypothesis in turn.

This book distills Simpson’s career in economics spanning nearly 40 years. Simpson has served in academia, industry, and government, giving him a unique and broad perspective on the theory and practice of economics. It is perceptive, thought-provoking, and engagingly written. It will be a welcome addition to the libraries of anyone interested in the history of economic thought as well as the roots of our current economic crisis.

David Hochfelder

History Department

University at Albany, SUNY

Albany, NY, USA

Feminist Economists in the Greek Parliament, Part 1: Political Origins

In this blog series, Yuan Yang writes about her encounters with the Greek Parliament’s feminist economists. This week, she describes the political and academic origins of Antigone Lyberaki and Rania Antonopoulos.

When there are so few critical economists in politics–and so few women–it is emboldening to meet two feminist economists in one place: the Greek Parliament. Antigone Lyberaki is from the centrist party To Potami (The River), and Rania Antonopoulos is from the left coalition SYRIZA. Both were recently elected in the stunning January 2015 elections, which saw SYRIZA  claim 149 seats (one short of an absolute majority), and brought several smaller parties, such as To Potami, into Parliament.

Antigone Lyberaki is a feminist economist who has written extensively on economic policy, and used to lecture at the University of Panteion in Athens. She offered to meet me at the door of the Airbnb apartment I was staying at in the university district of Panepistimou. As I emerged, she smiled at me and looked at the front door curiously.

“How did you find this place?” she asks, and I explain that it was via a website. “When I was a student – forty years ago – I used to come here several times a week, every week, for meetings of the pro-European Communist Party of Greece.” “This very door?” “Yes, this very door, on the first floor. We had a party magazine, we had debates, we had meetings."

The rooms on the first floor are now padlocked and barricaded with chains.

Mural in central Athens (April 2015)

“Have your political views changed since university?” I ask Antigone. “I no longer believe in the abolition of private property,” she replies, “But I do believe in the overall goal: of a free and equal society.” Her methods have changed; not her objectives. She is attempting to achieve such egalitarian objectives through her position as To Potami’s parliamentary representative. Being a parliamentary representative means that Antigone has more opportunities to take the floor when she wants to intervene in parliamentary debate, that she gets a longer time limit, and that she can raise any political issue in parliament - regardless of the topic set for that day’s discussion. As a member of a small party, Antigone is kept on her feet.

Rania Antonopoulos, now SYRIZA’s Alternate Minister for Labour, also became awake to politics as a student activist in the pro-European Greek Communist Party. “In 1974, when the Greek dictatorship ended, there was a moment of mass mobilisation,” Rania recalls. “The student movement rose up, particularly in the polytechnic universities. It was impossible not to be politicised. Like many fellow students, I joined the Youth Branch of the Communist Party of the Interior. Because of that, I started reading books about economics, such as Marx's Das Kapital. I felt Marx explained so much about my life; I became determined to understand the economy."

Both Rania and Antigone were surprised by their election to the Greek Parliament, and both had to put down their textbooks to take up their posts. “I had no expectation that I would be elected,” said Antigone. “This was my first election, and my first experience of parliamentary politics; I stood for a very wide constituency, which meant I had to win over 10,000 votes; I don’t live in my constituency (of outer Athens), and so, all my friends are from outside the constituency. I didn’t think I’d win by a margin of 2,500!”

Rania, too, describes the moment she realised she was almost certainly going to have a seat in Parliament, since she was placed second on the party list of MPs who would be automatically elected if SYRIZA won. “I suddenly thought to myself, I’ll need to book a flight,” she says, describing leaving her home in New York, where she has lived her whole adult life, to return to Athens. She had studied at the New School for Social Research, and before her return to Athens, was director of the Levy Institute’s research program on Gender Equality and the Economy.

How, then, do they explain their unexpected elections? “It was the television interviews that did it for me,” says Antigone. “I reached many people, and I spoke clearly and frankly.” Has she had any training? “No training, not at all,” she says. “I’m used to giving lectures and classes, of course. I’m used to having a person in front of you, and you learn how to react to their facial expressions, when they’re getting bored or confused, when you need to slow down, speed up.” I think to myself of all the economics lecturers I’ve had who never seemed to realise they had a living audience. “After my first few interviews, my friends in the media would call me up and say, Antigone, you need to talk more slowly, you need to drop these words, you need to stop wearing that shirt with the stripes. I learned!"

From remarkably similar backgrounds – left-wing student politics leading them into careers as academic economists – both Rania and Antigone have been drawn back into politics in a professional capacity. What happens when feminist economists stop writing about gender equality in labour markets and the financial crisis in academic journals, and starting writing policy? What does feminist economic policy look like, and do feminist economists always agree? Part 2 will follow on Sunday 31st May.