Complexity science—made possible by modern analytical and computational advances—is changing the way we think about social systems and social theory. Unfortunately, economists’ policy models have not kept up and are stuck in either a market fundamentalist or government control narrative. While these standard narratives are useful in some cases, they are damaging in others, directing thinking away from creative, innovative policy solutions. This book outlines a new, more flexible policy narrative, which envisions society as a complex evolving system that is uncontrollable but can be influenced. The book describes how economists and society became locked into the current policy framework, and lay out fresh alternatives for framing policy questions. Offering original solutions to stubborn problems, the complexity narrative builds on broader philosophical traditions, such as those in the work of John Stuart Mill, to suggest initiatives that the authors call “activist laissez-faire” policies. The book develops innovative bottom-up solutions that, through new institutional structures such as for-benefit corporations, channel individuals’ social instincts into solving societal problems, making profits a tool for change rather than a goal. It argues that a central role for government in this complexity framework is to foster an ecostructure within which diverse forms of social entrepreneurship can emerge and blossom.
Labor Adjustment Under Different Institutional Structures