Say you are at the base of two mountains whose peaks are above the clouds. You want to climb to the higher peak which means that you must choose one of the two. You do; you choose Mountain A- the Walrasian mountain; you start working your way up the slopes further and further, until finally you get above the clouds. When you do, you see that Mountain B- let’s call it a Post Walrasian mountain- is the far higher one. That’s what we believe happened in macroeconomics. (David Colander, “Beyond Microfoundations: Post Walrasian Economics”)
The Post Walrasian Economics David Colander refers to is an effort that started largely at the Santa Fe Institute in 1987, when a now-famous conference of scientists and economists convened by physicist Philip Anderson and economist Kenneth Arrow met to discuss the economy as an evolving complex system(1). With this analogy Colander wanted to explain in 1996 why such a dramatic new approach was needed to further our understanding of macro issues and why a discussion of that new approach involved the foundations of economic analysis, not extensions of existing work. Brian Arthur coined the term Complexity Economics in 1999(2):
It views the economy not as machine-like, perfectly rational, and essentially static, but as organic, always exploring, and always evolving – always constructing itself. (Brian Arthur, “Economic complexity: A different way to look at the economy”)
(1) Anderson, Philip W., and Kenneth Arrow. The Economy As An Evolving Complex System. Edited by David Pines. Redwood City, Calif.: Westview Press, 1988.
(2) Arthur, W. Brian. “Complexity and the Economy.” Science 284, no. 5411 (April 2, 1999): 107–9. doi:10.1126/science.284.5411.107.