Complexity science is a young science and this is evident in the application of complex systems thinking in economic research. An interesting article in the McKinsey Quarterly discusses the power law phenomenon, and demonstrates how complexity thinking is growing in influence through the public and private sectors. One of the most interesting aspects will be how complex systems thinking will reshape traditional economic theory. The short essay points to the parallels between man-made disasters and natural disasters, and how this is “bringing new ideas to economic forecasting, strategic planning, and risk management,” something which would be of particular use in the study of climate change and its impact upon the whole ethos of national security.

CNAS, the Centre for a New American Security recently published the findings of a report in which they conducted a war game exercise to explore the national security implications of global climate change, and was also recently featured in a documentary.

This is given further resonance as Nouriel Roubini economist cause celebre gave a talk at the Perimeter Institute on the economic crisis and the implications for the field of economic science. Nouriel is known for having predicted the economic crisis and inevitably states that this was not a ‘Black Swan Event’ but rather a ‘White Swan Event’:

There were a small but significant number of economists, thinkers and analysts who – early on – predicted many of the risks and vulnerabilities that eventually led to this crisis. In many ways I simply connected the dot in these different strands of thinking and warnings.

The challenge that faces us is not only our ability to predict crises but create systems that are stable, and this is where hard science will increasingly begin to influence economic theory.