The title to this post is my phrasing of an idea from Austrian economics that I think is incorrectly ignored in standard macroeconomic theory. I don’t have much insight to add, but this Arnold Kling post had two statements in it that I find very important. The first is Arnold quoting John Quiggin:
… we must accept, in the language of systems theory that macroeconomic phenomena are emergent, arising from complex interactions of behaviors we do not fully understand, …
Arnold’s observation on his claim gets at the overlooked role of foresight and adaptation in macro phenomena:
I would add that it is also a distraction to insist on closed-form mathematical solutions. Macro problems occur because the economy faces recalculation problems that are too complex for markets to solve. They are too complex for us to solve, also.