Why Most Things Fail – Evolution, Extinction and Economics (book review)

Title :- Why Most Things Fail – Evolution, Extinction and Economics.
By :- Paul Ormerod
Published :- Faber and Faber (2006) Hard back (240 pages)
Outline;- Draws ingenious parallels between how companies and species develop, grow and die, sometimes in mass extinctions, just like the economic crashes and why some survive. He compares the different styles of market economies and state controlled economies, why people tend to migrate from an integrated community to a segregated community and so on.
Interesting extracts:
• “ Joseph Schumpeter, a Harvard professor…emphasized that the key features of actually existing western economies were change and discontinuity, not equilibrium”.
• “Raup showed that the frequency with which we see extinctions of any given scale falls away with the square of the size.”
• “Power-law behavior at the level of the system as a whole arises from the ways in which the component parts are connected.”…”Not surprisingly, we can go on to reveal very similar power-law behavior in the extinction pattern of firms as is found in biological species.”
• “An environment which stresses the need to innovate and to keep pace with the way the world is changing leads to a higher fitness level for the system than one in which an easy life can be had and inefficiency is not punished so ruthlessly.”