Making Sense of Chaos - Doyne Farmer *****

This is a remarkable book, pulling together two key threads - chaos theory and economics. Doyne Farmer has a reputation as someone who breaks the mould: famously, he dropped out of studying physics at graduate level, working with a handful of others to put together a wearable computer (back in the 70s, when such a thing would have seemed pretty much impossible) to enable them to successfully beat the odds at casinos, picking up on the slight biases in roulette wheels.

Now, he presents a powerful case for applying chaos theory to economics, modelling economies in a totally different, agent-driven way rather than the traditional approach taken by economists. This combines for me the impact of two books I've read and greatly admired, but in both cases had felt that there needed to be a next step. The first of these was Chaos by James Gleick, which got me all fired up about chaos theory, but proved a bit of a let down as it was great to explain why, for example, it's difficult to predict the weather, but didn't give much of an idea of how to practically apply chaos theory.

Then there was Economyths by David Orrell, which demonstrates powerfully why traditional economics is so inconsistent from expert to expert and non-scientific - how, after all could a true science keep giving Nobel-ish prizes to totally incompatible theories? Economists seemed to be using the methods and mathematics of science rather in the fashion of a cargo cult, and Orrell exposes this beautifully... but doesn't give too much help on how to fix things. Farmer sets out to do just that with a ground-level reform.

I'm not qualified to say whether or not Farmer's ideas will truly deliver - but surely it is time for such a total overhaul of economics, and this could be the starting point. As a result this is an important, and fascinating book. It is, to be honest, quite heavy going - except when telling stories like the casino attempts, Farmer isn't great at making his topic accessible to a non-technical audience. Yet despite this, it is hard not to be impressed by the totally different take on economics, and the already demonstrated success with some limited modelling already.

Almost without doubt, most economists are going to hate this book - but history may well show that Farmer was on the side of the angels.

Hardback:

Kindle:
Using these links earns us commission at no cost to you
Review by Brian Clegg - See all Brian's online articles or subscribe to a weekly email free here

Comments

Rakhat-Bi Abdyssagin Five Way Interview

Rakhat-Bi Abdyssagin (born in 1999) is a distinguished composer, concert pianist, music theorist and researcher. Three of his piano CDs have been released in Germany. He started his undergraduate degree at the age of 13 in Kazakhstan, and having completed three musical doctorates in prominent Italian music institutions at the age of 20, he has mastered advanced composition techniques. In 2024 he completed a PhD in music at the University of St Andrews / Royal Conservatoire of Scotland (researching timbre-texture co-ordinate in avant- garde music), and was awarded The Silver Medal of The Worshipful Company of Musicians, London. He has held visiting affiliations at the Universities of Oxford, Cambridge and UCL, and has been lecturing and giving talks internationally since the age of 13. His latest book is Quantum Mechanics and Avant Garde Music . What links quantum physics and avant-garde music? The entire book is devoted to this question. To put it briefly, there are many different link...

Should we question science?

I was surprised recently by something Simon Singh put on X about Sabine Hossenfelder. I have huge admiration for Simon, but I also have a lot of respect for Sabine. She has written two excellent books and has been helpful to me with a number of physics queries - she also had a really interesting blog, and has now become particularly successful with her science videos. This is where I'm afraid she lost me as audience, as I find video a very unsatisfactory medium to take in information - but I know it has mass appeal. This meant I was concerned by Simon's tweet (or whatever we are supposed to call posts on X) saying 'The Problem With Sabine Hossenfelder: if you are a fan of SH... then this is worth watching.' He was referencing a video from 'Professor Dave Explains' - I'm not familiar with Professor Dave (aka Dave Farina, who apparently isn't a professor, which is perhaps a bit unfortunate for someone calling out fakes), but his videos are popular and he...

Everything is Predictable - Tom Chivers *****

There's a stereotype of computer users: Mac users are creative and cool, while PC users are businesslike and unimaginative. Less well-known is that the world of statistics has an equivalent division. Bayesians are the Mac users of the stats world, where frequentists are the PC people. This book sets out to show why Bayesians are not just cool, but also mostly right. Tom Chivers does an excellent job of giving us some historical background, then dives into two key aspects of the use of statistics. These are in science, where the standard approach is frequentist and Bayes only creeps into a few specific applications, such as the accuracy of medical tests, and in decision theory where Bayes is dominant. If this all sounds very dry and unexciting, it's quite the reverse. I admit, I love probability and statistics, and I am something of a closet Bayesian*), but Chivers' light and entertaining style means that what could have been the mathematical equivalent of debating angels on...

Search This Blog