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The Origin of Wealth: Evolution, Complexity, And the Radical Remaking of Economics

4.27  ·  Rating details ·  1,437 ratings  ·  111 reviews
Over 6.4 billion people participate in a $36.5 trillion global economy, designed and overseen by no one. How did this marvel of self-organized complexity evolve? How is wealth created within this system? And how can wealth be increased for the benefit of individuals, businesses, and society? In The Origin of Wealth, Eric D. Beinhocker argues that modern science provides a ...more
Hardcover, 527 pages
Published June 1st 2006 by Harvard Business Review Press (first published 2006)
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Kristin
Feb 24, 2010 rated it it was amazing  ·  review of another edition
About 5 years after finishing college, I started to feel that there was a major, glaring deficiency in my liberal arts education. As a young, naive, and somewhat annoying undergraduate, I had a deep and mostly indefensible aversion to the idea of taking an economics class. It's all a bunch of B.S., I thought--and whatever isn't B.S. would certainly offend my pale pink sensibilities at the time. I managed to get by without having to take one. However, as I got to be a little older, I starting to ...more
S.P.
Jan 21, 2009 rated it it was amazing  ·  review of another edition
When I was studying engineering at University one of the subjects we had to have an overview of was economics. I wanted the read this book because to me at the time the traditional macro economics theory just didn’t make sense – too many assumptions that were self evidently wrong, and I wanted a more up to date perspective. This book, I was pleased to discover, not only explained traditional economic theories in detail but also agreed that there are basic flaws in this traditional macro economic ...more
Katia N
Jan 29, 2018 rated it really liked it
This is entertaining, intellectually stimulating and well researched book about complexity economics. If you are interested in the alternative views on economic theory, you would find it worth paying attention to. It is written in 2007, but still stands alone as a popular introduction into this field. I am surprised it has not been updated and there is nothing more recent on the topic.

The book is more than 500 pages, but I never felt bored. There is a part where Mr Beinhocker is trying to formul
...more
Jonas
May 10, 2011 rated it liked it  ·  review of another edition
Part I starts out with a nice overview of the development of "traditional economics" since Adam Smith. The characterization of the work of Walras as a "false turn", importing physics metaphors into economics, is particularly striking. The physics framework was maintained until well after WWII with the neoclassical synthesis, while 20th century physics had already moved away from its deterministic 19th century predecessor. Chapter 3 talks about the work at the Santa Fe Institute (SFI), where comp ...more
Otto Lehto
Mar 07, 2019 rated it it was amazing
Beinhocker's monumental book is an undeniable achievement. It popularizes cutting-edge economic ideas in an exceptionally gripping, awe-inspiring, and palatable way. It thereby reaches the apex of the very best books in popular economics. Whether you primarily want to learn about business, economics, sociology, politics, or evolutionary theory, this book has it all covered.

As opposed to many other books in the category, Beinhocker treats his reader with level-headed respect. Without dumbing dow
...more
dh
Aug 14, 2011 rated it really liked it
Another eye-opening book.

I've read circa one fifth of the book and the stuff in the part was enough to break down all the stereotypes and misconceptions that I had, partly due to the conventional education of economics- I am an economics major.

Still yet, of the things argued by the author there are some that I cannot fully understand or know whether the argument is true or not. One of them is this ;

Economics activity is firmly rooted in the real, physical world, and thus economics theory cann
...more
Daniel
Dec 05, 2020 rated it it was amazing
The origin of wealth is knowledge. But this book is about complexity economics. The first part of the book explained how traditional economics misses the mark. Equilibrium is never reached, and if you see money on the pavement, just grab it.

The second part explained evolution and how evolutionary models better explain what happens in real life better. Many Business plans are tried but only a few become successful and grow. I think this part is too long. Physical technology and social technology
...more
Don
Sep 18, 2011 rated it liked it  ·  review of another edition
Shelves: modern-society
Beinhocker tells us that there is a revolution in the making in the world of economics. The orthodoxies of the equilibrium models have long since ceased to tell the truth about the way markets work. Not only are they not able to render a proper account of the reasons why they periodically fail, but also what is positive about them in the sense of what they do well.

The book tells a good story of what economics attempts to be as a science and the tools it has developed to fulfil its mission. Right
...more
Дмитрий Филоненко
Before reading this book I had almost no idea about economics. In university I studied computer science, and we had a half-year course of economics which was meant to be one of a few ‘humanitarian’ courses, just in order to avoid making from us, students, finished computer nerds. All I remember was two intersecting curves for supply and demand, and a boring lecturer talking not that much about economics as about the Dulles' Plan aimed to undermine the Soviet Union. It was in 2001 when the Soviet ...more
Juan Pablo
I've been meaning to thoroughly destroy economics for some time now and after finishing this book, I'm saying to myself "Heck, maybe I will if only for its necessary rebirth."

I studied econ back in college and the more I learned, the more painfully I experienced the disparity between reality and the "science" most powerfully endowed to observe and prescribe the measures for our understanding of human and societal interaction. Let me clear up the "": economics became over a hundred years a powerf
...more
Lee Robinson
Aug 01, 2018 rated it it was amazing
As an economist who has grown very disillusioned with mainstream economics (or was never illusioned to begin with), I am so happy this book exists.

It is a brilliant outline of how the newly emerging field of complexity economics can help to reform economics from its reliance on static, equilibrium concepts that have hampered the discipline and held it back for over a century. And although this book is subversive, it is not one of the run of the mill straw man range of books having a pop at econo
...more
Tyler
Oct 31, 2008 rated it really liked it  ·  review of another edition
The first 85% of this book was worthy of a 5 star rating and one of the most interesting books I've ever read. His analysis and linkage between Evolutionary Theory and the Economy was compelling. It provides us with a whole new lens to see the economy through and Benhocker's ideas of complex adaptive and open systems, I believe, to be extremely relevant. The case he makes against Neo-classical economic theory is long overdue. As Beinhocker makes clear at the opening of the book "Origin of Wealth ...more
Tadas Talaikis
Dec 25, 2016 rated it it was amazing
Shelves: economics
I just saw some seminar notes about it. Finally, that book I had heard few years ago, about the end of left and right nonsense, - complex rational realism. ...more
Erika RS
Nov 13, 2020 rated it it was amazing  ·  review of another edition
I consider The Origin of Wealth by Eric D. Beinhocker to be the most important book I've read this year. It brings together insights from psychology, network theory, complexity studies and more into a incomplete-but-illuminating view of how societies have created wealth over time. Wealth, in this case, is about so much more than financial value. It's the sum total of non-relational things that humans find valuable.

The perspective of complexity economics shows the shallowness of our common politi
...more
Jerry Ward
Apr 01, 2013 rated it really liked it
Recommends it for: the seriously interested in economics
I can’t recall having ever read an author with the clarity of exposition and the depth and breadth of erudition that is demonstrated by Dr. Beinhocker in this book. It is an impressive work.

The opening sentence of the book asserts that “the field of economics is going through its most profound change in more than a hundred years.” Since much of the book directly addresses and analyzes that change and its implications, I think the book could have more accurately been entitled The Evolution of Ec
...more
Jackson Barkstrom
Feb 16, 2021 rated it it was amazing
Solid book. Showed more clearly than anything I've previously read that a small amount of irrationality in markets can cause large deviations from the efficient market hypothesis. Adding a few technical traders to an otherwise-rational stock market can lead to some crazy price action, and adding time delays in a supply chain's response to demand leads to crazy swings in production. I liked Beinhocker's use of the concept of attractors instead of the concept of equilibrium (equilibriums don't usu ...more
Eric van der Toorn
Dec 26, 2020 rated it really liked it
I received this book from my father for my 15th birthday because he `could not read the small letters'.
Now, 6 years later, I can consider myself part of a set of readers extraordinary in their due diligence and dedication for having finished this book.
While written as a popular introduction on the book, this 500-page literary work engulves one in stats surrounding economic theory, both the incumbent current champion of the day, `Traditional Market Theory', as has been developed from Adam Smith o
...more
Ronald Diehl
Aug 17, 2020 rated it really liked it
Warning: I have too much free time and I’m going to use this review as a venue to express some of my own thinking on economic evolution.

Strange Inversions of Reasoning

The essential point to grasp is that in dealing with capitalism we are dealing with an evolutionary process.

-Joseph Schumpeter


This is a heady book, and an ambitious one, but fourteen years after its publication, I feel the field it speaks for still hasn’t lived up to its level of ambition. Evolutionary economics remains a niche fi
...more
Oneeb
Apr 04, 2021 rated it it was amazing
Topic:

The economy is a complex, adaptive system that evolves in ways similar to how biological organism evolve in nature. This means that we have to reconceptualize economics.

Key Themes:

Traditional economics assumes that the economy is a closed-stable system. Because of this assumption, economist cannot answer the most basic question: where did the economy come from?

The actual economy is an open, unstable system.

Wealth creation is the product of a simple, but profoundly powerful, three-step form
...more
Sergey Bir
Feb 21, 2020 rated it it was amazing
Recommends it for: Everyone
This book is packed with ideas and anecdotes circling around the topics of evolution without an end state and bottom-up modeling. It felt like an economic theory book, a history book, a management book, a politics book, a biology book, even a self-help and relationship advice book. While the diversity of applications for the core ideas is plentiful the author manages to keep statements grounded in research and is wary of slippery paths leading to hot air speculation. It was a delight to see how ...more
Jonathan Jeckell
I went through a ridiculous number of highlighters and tape flags marking this book. It provided a fascinating look at how theorists are bringing economics into the 20th Century. Existing economics models borrowed from physics, and thermodynamics in particular, most notably with the concept of equilibrium. This book shows how the economy (and much else) are not so simple, but follow rules found in complex adaptive systems and evolution. Moreover, it provided some fascinating insights into organi ...more
Saku Mantere
Jul 04, 2013 rated it liked it
I am deeply ambivalent about this book. On the one hand, it is a splendidly written introduction to the limitations in classical economics. It is also a great intro to complexity theory. Yet, in its insistence that complexity is a theory for everything (from doing firm strategy to transcending the left-right dichotomy in politics), the book's main argument is trivialized and becomes almost ridiculous. ...more
Zoltan Pogatsa
Feb 24, 2019 rated it really liked it  ·  review of another edition
A fairly good introduction into behavioural economics. Good read.
Shame about the last, political chapter though. The entire book is full of very strong points about how the political Right and Neoclassical economics are wrong. Then in the last chalter sets up the strawman of Stalinist central planning as the Left, and states the obvious, i.e. that it is wrong. Was he to use Social Democracy as the definition of the Left, his economics would agree with it .
Anup Gampa
Dec 25, 2012 rated it did not like it
I didn't have the advantage of Marx's theory when I read this book, but I enjoyed it. I might like it a lot more now! ...more
Dan Drake
Sep 07, 2019 rated it it was amazing
So many amazing ideas. Beinhocker presents an alternative model for economics: instead of "Traditional Economics" which uses classical mathematical models with perfectly rational actors -- and which fails to explain many things we find in the real world -- he proposes a computational, model-based, evolutionary model.

Perhaps I'm giving it away, but the origin of wealth ultimately, for Beinhocker, is the same as the origin of the complexity of modern organisms: evolution.

The author also discusses
...more
Ganesh Poomal
Feb 01, 2019 rated it really liked it
In Origin of wealth, Beinhocker attempts to answer what went wrong in the traditional view of economics where participants are characterized as infinitely self interested and infinitely far sighted. Author explains drawbacks of this view and how new complexity view of economics differs from this view. Author mentions that this new complexity view does not help us predict economic outcomes in future but explains the several observations we see in economy for example, boom and bust cycle in econom ...more
Mbogo J
Dec 13, 2018 rated it it was amazing
The book gets all the stars mostly for the breadth of knowledge covered and it picks an additional star for the rendition.The book was written more than a decade ago but its ideas are still fresh and have even spawned new books specializing in individual fields examined here. It is also a good thing this book was written before the 07 financial crisis. It ensured it was not held captive by it or get caught up in the never ending battle of why Economics did not predict it.

The central idea of the
...more
Jan Poruba
Apr 12, 2018 rated it it was amazing
One of the most stimulating books I have ever read. The answer to the question on the origin of wealth is very simple. Wealth creation is the product of the evolution – basically the same processes that have driven the growing order and complexity of the biosphere. Don´t worry, it is not another attempt to renew Social Darwinism. Rather author sees evolution as something more general, an algorithm for innovation. Put it really simple, the evolution of the economic system from making stone tools ...more
Fahasa
Nov 12, 2019 rated it really liked it
Over 6.4 billion people participate in a $36.5 trillion global economy, designed and overseen by no one. How did this marvel of self-organized complexity evolve? How is wealth created within this system? And how can wealth be increased for the benefit of individuals, businesses, and society? In The Origin of Wealth, Eric D. Beinhocker argues that modern science provides a radical perspective on these age-old questions, with far-reaching implications. According to Beinhocker, wealth creation is t ...more
Samuel Peck
May 07, 2020 rated it it was amazing  ·  review of another edition
A tremendously fascinating book - multidisciplinary, insightful and lucidly written.

Not the first time reading a book about complexity economics and emergence, but this is one that illustrates the concept in such a clear, logical, bootstrapping manner, and also elucidates the practical implications of the concept.

To borrow the author's metaphor, the concept of economics as still currently taught in schools - with all of its ivorytowerist, unrealistic assumptions - is the equivalent of Cuba wit
...more
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“Complexity catastrophes help explain why bureaucracy seems to grow with the tenacity of weeds. Many companies go through bureaucracy-clearing exercises only to find it has sprung back a few years later. No one ever sits down to deliberately design a bureaucratic muddle. Instead, bureaucracy springs up as people just try to optimize their local patch of the network: finance is just trying to ensure that the numbers add up, legal wants to keep us out of jail, and marketing is trying to promote the brand. The problem isn't dumb people or evil intentions. Rather, network growth creates interdependencies, interdependencies create conflicting constraints, and conflicting constraints create slow decision making and, ultimately, bureaucratic gridlock.” 1 likes
“This tension between interdependencies and adaptability is a deep feature of networks and profoundly affects many types of systems. Software designers see it when a program becomes so complex that any enhancement or bug fix introduces five new bugs. Architects see it when a client asks them to move a wall just one foot, and it has knock-on effects that send the project's cost sky-high. Some biologists, such as Stuart Kauffman, believe that this tension creates upper limits on the complexity of organisms. In economic organizations, there is a clear trade-off between the benefits of scale and the coordination costs and constraints created by complexity.” 0 likes
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