It’s important for exchanging information, it’s important for human bonding and culture, but another important role that communication has is in coordinating actions. An example of coordinating actions is protests.

Look, sometimes you have to make quick decisions. You can’t just have humans make them; you have to combine human and machine methods.”

One is the neoclassical rational-choice-equilibrium argument that markets automatically come to the Pareto optimal equilibrium for society. This was Ken Arrow and Debreu’s great work. The second is more out of the Hayekian tradition, that markets are efficient at processing distributed information to help coordinate activity in the economy. But bot

A few examples include: Greed is good. Maximizing pleasure from consumption is the goal. A billion acts of selfishness will lead to a prosperous society. The social duty of business is just to maximize its profits. There’s no such thing as society, only individuals—that was Margaret Thatcher’s famous quote. Markets are efficient; other institutions

These are all highly contestable statements.

Second is an aggregation mechanism, a way to bring that information into one place. Double-auction markets, where buyers bid a price and sellers offer a price, are extraordinarily good at this function. The final condition is properly functioning incentives—rewards for being right and penalties for being wrong. For the stock market, this is measure

The economy is not a closed static equilibrium system; it is a system perpetually open to novel behavior, and complexity economics forces us to keep this in mind.

that, contrary to standard belief, the market shares of many technology companies could be predicted with great accuracy, even if the underlying changes in technology changed frequently.

But overall the profession does not excel at seeing trouble ahead and unlike engineering disciplines it doesn’t have a branch of forward-looking failure-mode analysis or of post-crash forensic analysis.