Applied Complexity: Finance and Economics in a New Light

Abstract

The Scientific and the Industrial Revolutions have changed the face of the Earth forever. Today, we enjoy the unparalleled rewards of technological and economic prosperity. The world has merged into one single global network of human activity, creating a complex super-system. Specifically, the cross-fertilization of three spheres of influence has created this successful world order: science and technology, industry and economics, and military interests. The current paradigm is called the doctrine of neoliberalism, justified by neoclassical economics and quantitative finance. However, there is a dark side to all this progress. It takes a heavy toll on the individual human psyche and the global ecosystem. Short-term personal self-realization is pitted against evolutionary cooperation and collective intelligence. The distribution of resources is heavily skewed, giving rise to a culture of inequality. Finally, some crucial questions need to be answered. Is humanity happier today than in the past? Can we actually control the economic and financial systems we have created? Do we need a new paradigm coming from complexity science? Level of mathematical formality: low.