Further Economy Stability

Evolutionary economics in general and technology studies in particular have tended to focus too much on supply-side considerations and competitive selection arguments. The consequence of this lopsided view is a poorly developed sense of the role of network and complexity analysis in understanding the process of economic transformation.

We argued here that consumption is about individual meso-rules and their interactive structure between agents. We have also argued that demand is about the relative size of meso populations and their effect on the evolution of the macroeconomy.

Aggregate flows of expenditure or demand will follow paths shaped by meso trajectories that were initially forged by micro agents making new connections.

Consumption, like production, is a complex system. Transformation means making new connections not just between production technologies and supply lines, but also between consumer aspirations and patterns of consumption.

Theoretical developments such as these, and others that may follow, will all help us better understand the evolutionary nature of aggregate demand. It is our view that the demand side of the economic value equation is more than just a passive absorbing medium, as often implicitly assumed and portrayed, but is instead a functionally significant and scientifically interesting part of the open-system dynamical process of economic evolution.

Surprisingly, perhaps, given the hoary arch-veracity of modern economic analysis, much empirical and theoretical work yet remains to be done at the interface of demand and supply. And particularly so in the dimensions of micro evolutionary consumer theory and macro evolutionary network or ‘aggregate’ demand theory.