What is wealth?  How is it created?  How can we create more of it for the benefit of individuals, businesses, and society?  These are the fundamental questions that McKinsey Global Institute Senior Fellow Eric Beinhocker asks in his groundbreaking book, The Origin of Wealth (Harvard Business School Press; Publication: June 1, 2006).

According to Beinhocker, economics is in the midst of a revolution – its biggest in over a century – and recent work by economists and other scientists provides us with a radically new perspective on the workings of the economy.  “Complexity Economics,” as Beinhocker calls the new paradigm, views the economy as a highly dynamic, constantly evolving system, more akin to the brain, the Internet, or an ecosystem than to the static, equilibrium picture presented by traditional theory.

Beinhocker uses the ideas of Complexity Economics to reveal a provocative answer to the origin of wealth question – evolution.  Modern science views evolution as not just a biological phenomenon, but as a general purpose algorithm for innovation. The author argues that it is the evolutionary processes of variation, selection, and amplification, acting on designs for technologies, social institutions, and businesses that drive growth in the economy over time.  It is economic evolution that has taken us from making stone tools in caves to the enormously complex $36.5 trillion global economy of today.

If we can understand how evolution creates wealth, then we can better understand how businesses and governments can create more of it. Beinhocker shows how Complexity Economics turns conventional wisdom on its head in areas such as business strategy, the design of organizations, the workings of stock markets, and public policy. The key message for business leaders is that they must "bring evolution inside" and get the evolutionary processes of wealth creation working as well within their organizations as those processes work in the broader marketplace. For policymakers, the critical question is how governments can encourage and accelerate economic evolution, but without attempting to overly direct it.

Written in an accessible and entertaining style, The Origin of Wealth is a landmark book that shatters orthodox economic theory, and will rewire our thinking about how we came to be here – and where we are going.

Back to Index »                                                                                            Read Example Insights »