Eric Beinhocker
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Eric D. Beinhocker is the author of The Origin of Wealth, and a senior advisor to McKinsey & Company, Inc., where he conducts research on economics, management, and public policy issues. He was previously a partner at McKinsey and a coleader of its global strategy practice. His career has bridged both the business and academic worlds. He has been a software CEO, a venture capitalist, and an Executive Director of the Corporate Executive Board. He has also held research appointments at the Harvard Business School and the MIT Sloan School of Management, and has been a visiting scholar at the Santa Fe Institute. He is a graduate of Dartmouth College and the MIT Sloan School of Management where he was a Henry Ford II Scholar. Fortune magazine has named Beinhocker a "Business Leader of the Next Century," and his writings on business and economics have appeared in a variety of publications, including the Financial Times. Originally from Boston, Massachusetts, he lives in London with his wife Tilly and their daughter Anna.
His book The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics (Harvard Business School Press, 2006) describes how advances in fields ranging from evolutionary theory, to physics, biology, computer science, and cognitive science are fundamentally changing the way economists view the workings of the economy. For the past century, economists have viewed the economy as an equilibrium system made up of perfectly rational agents with access to full information, who produce and consume goods and services in economies with optimally efficient markets and institutions. This theory, known as neoclassical economics has dominated mainstream theory, particularly in the US and UK, since the late 19th century when it was developed by figures such as Leon Walras, William Stanley Jevons, and Vilfredo Pareto.
Beinhocker argues that neoclassical economics is fundamentally flawed, has a poor record of empirical validation, and that the strong assumptions the theory requires serve to make economics of less relevance to real world issues than the field otherwise might be. Beinhocker claims that neoclassical theory is in the process of being supplanted by what he calls complexity economics - the view that the economy is a complex adaptive system made up of realistically rational agents who dynamically interact with each other in an evolutionary system. Complexity economics is in turn built on foundations of a long-standing tradition of heterodox economics that includes areas such as behavioral economics, institutional economics, Austrian economics, and evolutionary economics.
In the Origin of Wealth Beinhocker reviews the work of researchers such as Brian Arthur, J. Doyne Farmer, Samuel Bowles, and a number of others, many of whom are affiliated with the Santa Fe Institute, who are pioneering work in this emerging field. He also discusses what the practical implications of these new ideas are for the fields of business strategy, organization, finance theory, as well as its impact on long-standing debates between the left and right in the political sphere, such as the role of states versus markets, and whether humans are inherently altruistic or self-regarding.
