I recently discovered an old article by Michael Polanyi, "Life's Irreducible Structure" in the 21 June 1968 Science in which he discusses complexity and emergence in relation to biology. It is amazing how far ahead of his time Polanyi was -- it took almost 30 years for Polanyi's ideas (which are further developments of Bertalanffy's ideas from before WWII on complex systems) to become fairly well-established facts and to increasingly become mainstream ideas, at least in the sciences. They ought to be mainstream ideas in the human sciences, including economics, but alas they are mainstream only among the Austrian economists.
Consider Polanyi's observation that a complex system with emergent properties "is subject to dual control: (i) control in accordance with the laws that apply to its elements in themselves, and (ii) control in accordance with the powers that control the comprehensive entity formed by these elements" (1311).
In biological terms, the biochemical cycles give rise to the cell, which in turn determines what biochemistry can and will take place. You need to understand both to understand biochemistry and cell biology. But let us consider this too from the standpoint of economics. You need to understand human action to understand how an economy can emerge out of those interactions. In turn, the economy that emerges affects the kinds of actions people will engage in. That economy is going to have strctures and patterns that cannot be reduced to the interactions of acting humans, yet necessarily emerge from those interactions. Or, as Polanyi observes, "the operations of a higher level cannot be accounted for by the laws governing its particulars on the next-lower level" (1311).
But there is more to it than this. As I observed, the higher level sets a boundary to what the lower level actions can be within that higher level system. "Each level relies for its operations on all the levels below it. Each reduces the scope of the one immediately below it by imposing on it a boundary that harnesses it to the service of the next-higher level, and this control is transmitted stage by stage, down to the basic inanimate level" (1311). To put it concretely: the kind of economy we act within will affect our mental state, which will affect our biological state, which will affect our biochemical state, which will affect our atomic state. At the same time, atomic behavior affects chemical behavior affects biological behavior affects mental behavior affects the economy. How this latter works, according to Polanyi, is that each lower level "evokes the ontogenesis of higher levels, rather than determining these levels" (1311). In other words, new levels of complexity are evoked, while those higher levels encourage the behaviors of the lower levels. There may be a kind of determinism within a level -- but it is a determinism appropriate only to that level. The determinism of physics is thus appropriate to that level and only to that level.
One of the consequences of this is that emergence reverses the drive toward nihilism inherent in the deterministic, entropic world view. As Polanyi observes, "a boundary condition which harnesses the principles of a lower level in the services of a new, higher level establishes a semantic relation between the two levels. The higher comprehends the workings of the lower and thus forms the meaning of the lower" (1311). One gets more and more meaning the higher the level. Those who recognize the economy as a spontaneous order emerging from the interactions of individual human beings thus recognize the meaningfulness of that system; nihilism vanishes with each emerging level of complexity. But those who seek to reduce the economy to a lower level -- who think of it as deterministic, able to be controlled or even nudged in the "right" direction -- seek to reduce meaning in the world, are seeking to reduce the economy to less than it really is; nihilism emerges with such attempts to eliminate its complexity. Such people are no different from anyone who would seek to "improve" a living organism by reducing its complexity -- turning it into a pile of chemicals and, thus, killing it.
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