An Essay in Synergetic Economics

Abstract

When Roy Harrod (1948) said that, since investment raised demand and higher demand led to more investment, (a) he completed the Keynesian system; (b) he demonstrated the instability of capitalism; and (c) he contradicted a basic tenet of traditional economic analysis. When a firm or an individual makes an investment, any influence on its or his demand is negligible. This apparent contradiction between micro and macro has to be resolved and its resolution should be illuminating. The physicist faces a somewhat similar problem to that of the economist: he has a very large number of variables, the individual behavior of which he cannot hope to predict. The German physicist Haken (1983) has proposed a suggestive approach called ‘synergetics’. One or a few parameters may act in such a way as to produce uniform changes in the behavior of very large numbers of independent entities; he calls this ‘self-organization’.

I offer this brief essay as a tribute to the memory of one of the more remarkable persons I have ever known. Joan Robinson was an embodiment of ‘the desire and pursuit of the whole’ and her passing is a great loss to her friends, and, though often unacknowledged, to the profession as a whole. She had an uncanny and rare ability to unravel the daunting complexities of economic life by the exercise of logic alone. To this austere activity she dedicated unselfishly the bulk of her adult life. For the many of us who stood in awe and admiration of the purity and power of her devotion to the understanding of our world, a light has been extinguished.