Title: Forecast: What Physics, Meteorology, and the Natural Sciences Can Teach Us About Economics Author: Mark Buchanan
Publisher: Bloomsbury Publishing, 2013. Pages: 272
Time to grapple with the stormy realities of an unbalanced marketplace, argues this scathing critique of economics-as-usual. Physicist and journalist Mark Buchanan attacks what he thinks are the unrealistic assumptions of modern economics: that financial markets efficiently process all information; that humans make perfectly rational decisions; that market economies reliably find a placid equilibrium when freed from regulation. To understand the real economy of irrational mortgage bubbles, prolonged recessions and split-second stock-market crashes, he contends, we must look to other sciences — meteorology, physics, cognitive psychology — for insights into the intrinsic instabilities of complex systems like the market. He does a good job explaining some conceptual underpinnings of the science of complexity, but since that approach relies on modelling chaotic markets with mysterious black-box computer simulations, it lacks the analytical clarity and catchiness of neoclassical economics simplistic theories. Still, Buchanan offers a compelling outsider take on the hubris and failures of reigning economic orthodoxies.