Can We Ever Model an Economy?

In "The Sensory Order," F. A. Hayek observes that "any coherent structure" such as the brain "which within itself contians a model guiding its actions, must be of a degree of complexity greater than that of any model that it can contain, and therefore than that of any object it can reproduce" (5.91).

This raises some interesting questions. From a purely human perspective, if the economy is less complex than the mind, then it can be fully comprehended. However, if the economy is either as complex or more complex than the human mind, then it can never be fully comprehended -- we will only ever be able to comprehend its various parts and some of the relations among those parts. At best, we will be able to create some abstract models that will be more or less accurate to the actual economy, though it will always be hard to tell if it actually is. It is therefore very important to know if the economy is more or less complex than the human mind.

Interestingly, a complex systems-theoretic approach seems to argue that the economy is more complex than the human mind, while a complex process-theoretic approach seems to suggest(at least, according to Sabelli) that the human mind is more complex than the economy. Of course, Sabelli may be wrong, and the process-theoretic approach may argue that it is either at the same level of complexity, or more. The co-evolution of psychological complexity with social complexity may suggest an equivalence in complexity. More, it may suggest that more complex psychologies may be able to understand less complex social systems, but not equally or more complex social systems.

Many questions.