Forthcoming in Advances in Austrian Economics
34 Pages Posted: 28 Mar 2017
Date Written: March 26, 2017
This paper uses the theory of complex systems as a conceptual lens through which to compare the work of Friedrich Hayek and Vincent and Elinor Ostrom. It is well known that, from the 1950s onwards, Hayek conceptualised the market as a complex adaptive system. It is argued in this paper that, while the Ostroms began explicitly to describe polycentric systems as a class of complex adaptive system from the mid-tolate 1990s onwards, they had in fact developed an account of polycentricity as displaying most if not all of the hallmarks of organised complexity long before that time. The Ostromian and Hayekian approaches can thus be seen to share a good deal in common, with both portraying important aspects of society — the market economy in the case of Hayek, and public economies, legal and political systems, and environment resources, in the case of the Ostroms — as complex rather than simple systems. Aside from helping to bring out this aspect of the Ostroms’ work, using the theory of complex systems as a framework for comparing the Hayekian and Ostromian approaches will be shown to serve two other purposes. First, it can be used to show how one widely-criticised aspect of Hayek’s theory of society as a complex system, namely his account of cultural evolution via group selection, can be strengthened by an appeal to the work of Elinor Ostrom. Second, it also helps to show how to resolve a tension — ultimately acknowledged by the Ostroms themselves — between some of their explicit methodological pronouncements and the actual, substantive approach they adopted in their analysis of polycentric systems.
Keywords: Elinor Ostrom, Vincent Ostrom, Bloomington School, Hayek, Austrian Economics, Complexity Theory
JEL Classification: B2, B3, B4, B5, B25M B31, B41
Suggested Citation: Suggested Citation
Lewis, Paul A., The Ostroms and Hayek as Theorists of Complex Adaptive Systems: Commonality and Complementarity (March 26, 2017). Forthcoming in Advances in Austrian Economics. Available at SSRN: https://ssrn.com/abstract=2940972 or http://dx.doi.org/10.2139/ssrn.2940972