From Detroit Industry, North Wall, 1932-33, fresco by Diego Rivera. Detroit Institute of Arts.

The Santa Fe Institute has received funding for a new five-year research theme on emergent political economies. The theme, funded by a $6.5 million grant from the Omidyar Network, will take up the ethical imperative to develop better theoretical frameworks and methods to understand the social, ecological, and material inequalities at the core of the modern economy, as well as imagine the role that innovation will play in emergent political economies of the future – both for good and ill.

In the eighteenth century, Adam Smith conceived of capitalism in response to poverty. “Free market theory was an ethical matter, and Smith theorized that the free market would help solve the social ills that mercantilism generated,” explains SFI President David Krakauer. “What he did not anticipate, however — what he could not have anticipated given his toolkit — was that capitalism plus technology, under many conditions, can generate externalities that exceed the political-economic damage of mercantilism — from unemployment to climate change. Adam Smith needs to meet Complexity Economics.”

If the contemporary global economy has made anything clear, it is that the political and theoretical methods and tools that researchers have inherited are insufficient to deal with the emergent patterns, systems, and phenomena that shape global economic life. 

SFI’s Omidyar-funded research network will be one of five research centers, each focused on the renewal of political and economic thinking in theory and policy. The four fellow centers, all supported by the William and Flora Hewlett Foundation, are housed at Harvard’s Kennedy School, Howard University, the Massachusetts Institute of Technology, and Johns Hopkins University. The total funding for the network of institutions is $41 million. 

In the SFI network, research will be conducted through a series of working groups and workshops and will home in on different emergent properties of economic complexity. One of the first workshops, led by SFI External Professor Ricardo Hausmann, is called “The Study of Technology.” The group will theorize the structure of technology and develop better mathematical frameworks that capture how technology — in all of its diversity — evolves. 

Hausmann explains the challenge this way: “Formalizing ideas about technology has always been made difficult by the challenges of defining technology, and by the immense diversity of the things we call technologies. What mathematics would be as suited for bicycles as for horticultural grafting, DNA sequencing and HTML, water wheels and Gore-Tex, the Bessemer process and Agile project management?”  

The SFI network will also present generative exchanges between SFI scientists and thinkers who are exploring new conceptions of the economic landscape and recovering ideas that help us understand our inherited systems. In the coming year, SFI’s Complexity podcast will offer a series of episodes that pair innovative thinkers — political theorists, fiction writers, futurists, and economic historians — with SFI scientists and the show’s host, Michael Garfield. 

“We’re going to be creating a trialogue,” says Garfield, “that gives us a more stereoscopic view on topics in emergent political economy that range from urbanization, to banking credit cycles, to immigration, to the ways that speculative fiction might help us imagine possible economic futures.” 

In order to bring complexity economics to a broader global context, SFI is hiring a new Diversity and Complexity fellow who will lead SFI’s diversity research and outreach initiative. The fellow will be charged with developing quantitative techniques to identify scholars and communities engaging with complexity-oriented thinking in under-represented communities and institutions, and will work to introduce complexity science to historically underrepresented scholarly communities. 

On a cross-institutional scale, Krakauer hopes that SFI’s network will inspire researchers across institutions to collaborate and engage with complexity economics. “It’s much like the early days of the human genome project,” Krakauer says, “the spirit of competition and cooperation between institutions will help us illuminate the elements of a complex system that is far greater than the sum of its parts.” 

Ultimately, SFI’s research network and the significant network of fellow institutions together are poised to generate the kind of thinking and theory that will capture the emergent dynamics of a global economic system that we are only beginning to understand.

Read the article in the New York Times (Feb. 16, 2022) 

Read the article in Forbes (Feb. 16, 2022) 

Read the article in The Chronicle of Philanthropy (Feb. 16, 2022)