Mathematical Metaphors, Statistical Physics, and the Rise of Complexity Economics, 1986–2006

In the 1980s, the laws of solid-state physics became the laws of the economy. At least, that was what the “complexity economists,” a group led by Kenneth Arrow, Nobel Laureate in economics, and Philip Anderson, Nobel Laureate in physics, began to argue. These natural and social scientists declared a revolution, challenging what they perceived as an overemphasis on “equilibrium” in traditional economic theory. Instead, they pulled on new mathematical methods from the physical sciences to model the economy “far-from-equilibrium,” always changing and rarely stable. In the decades since their self-proclaimed revolt, mathematical methods pioneered by complexity economists have spread across the social sciences, influencing public figures from Paul Krugman, to Larry Summers, to Al Gore. This talk returns to the foundational years of the discipline to show that, in using these new mathematical techniques, complexity economists also redefined what “the economy” was. The laws of physics did not only provide new mathematics—they also provided new metaphors. Complexity economists collapsed a distinction between natural and social systems, modeling the economy as if it behaved like physical flows of energy. The first part of the talk discusses how the laws of physics lent authority to complexity economists amid global financial uncertainty in the 1980s. The second part ties the rapid popularization of these ideas in the 1990s to their role in naturalizing the political rhetoric of the Clinton administration. Throughout, I argue that complexity economists gained authority by deploying “mathematical metaphors,” a rhetorical technique whereby economists and physicists made dissimilar objects of study, like crystal lattices and economic behavior, alike by arguing for their formal, mathematical similarity. Such work positioned complexity economists as the only authorities capable of managing the social and natural world simultaneously.