“This book will argue that wealth creation is the product of a simple, but profoundly powerful, three-step formula – differentiate, select, and amplify – the formula of evolution. The same process that has driven the growing order and complexity of the biosphere has driven the growing order and complexity of the ‘econosphere’.”

I can’t quite decide what I think of The Origin of Wealth. The book has considerable strengths: it contains one of the better histories of economic thought I’ve read, and its rich discussions of various economic studies and experiments are wonderful. I also found its thesis both interesting and compelling. Parts of the book, however, also feel like retreads of old ideas, with little particularly new to recommend them. I suppose what I can say is that it is excellent, but were it half as long, it would have been even better.

Focus on the good. Beinhocker is worried economics has got it wrong. When economics began, it emulated the ideas of physics, particularly equilibrium. Shortly after, however, physics abandoned the idea, and the real model for economics, Beinhocker argues, should be biology. He points to a meeting between physicists and economists in the 90s, when the physicists remarked that the economics reminded them of Cuban cars. The ingenuity of the Cubans keeping their cars running with salvaged parts was phenomenal, but they were still old cars.

The real economy, Beinhocker suggests, is determined by evolution and non-equilibrium physics. The supply of things is determined by the process of locally reducing entropy: we humans impose order on our world to create things we want. Our demand for things, in turn, is controlled by our preferences, which are determined by evolution. When you buy a shirt, it wasn’t designed: it evolved, in response to the demand of the market.