Many important economic outcomes can also be understood as emergent results of competitive interactions and structural interdependencies, and irreducible to the details of the intentions, knowledge, and actions of any individual. That account motivates the benefits of trade on the basis of a thought exercise where Portugal has a given comparative advantage in the production of wine-a good whose production is most strongly influenced by inherent climatological characteristics of a region-while England has a comparative advantage in the production of cloth-a good reflecting a history of industrialization that paves the way for subsequent gains in labor productivity. This practice has a long pedigree in economic analysis, going back at least as far as David Ricardo’s discussion of comparative advantage. Individualist parametrizations also have a conservative thrust, in the sense that they focus analytical attention on the consequences of given differences in economic characteristics across individuals, regions, or economies, with less emphasis on what are often the most interesting and pressing questions of economic inquiry: the social and historical processes giving rise to those present differences. Arbitrary because there should be no a priori reason to expect regularities or equilibria allowing us to characterize the functioning of such economies to be defined by stability in micro-level details of individual characteristics. It is an arbitrary parametrization of the complex, dynamic functioning of a competitive, decentralized market economy. If the characteristics of economic individuals evolve as part of competitive market interactions, taking them as an analytical starting point is not just impractical. They offer innovative bases for observational inquiry into complex economic systems. The concepts of entropy and mutual information offer very general, non-parametric, informational measures of those associations: How much of our ignorance or lack of knowledge about individual values of a given variable is removed once we observe individual values of other variables. The paper looks to information theory to develop observational tools enabling characterizations of those systemic regularities and of the reduced-form associations they define between observable individual characteristics. This alternative is based on the recognition that the observable empirical regularities upon which we may ground our understanding of the functioning of economic systems are generally systemic and independent of much of the fine-grained detail of individual behavior, knowledge, and interactions. The paper discusses how a wide and plural range of contributions to economic thought have effectively advanced an alternative methodological foundation for economic analysis.
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