“This paper has attempted to go beyond the usual static analysis of increasing-returns problems by examining the dynamical process that 'selects' an equilibrium from multiple candidates, by the interaction of economic forces and random 'historical events'. It shows how dynamically, increasing returns can cause the economy gradually to lock itself in to an outcome not necessarily superior to alternatives, not easily altered, and not entirely predictable in advance.”

— W. Brian Arthur

p, 128
Competing Technologies, Increasing Returns and Lock-in by Historical Events, (1989)

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W. Brian Arthur 16

American economist 1946

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“In many parts of the economy, stabilizing forces appear not to operate. Instead, positive feedback magniﬁes the effects of small economic shifts; the economic models that describe such effects differ vastly from the conventional ones. Diminishing returns imply a single equilibrium point for the economy, but positive feedback – increasing returns – makes for many possible equilibrium points. There is no guarantee that the particular economic outcome selected from among the many alternatives will be the “best” one.”

W. Brian Arthur (1946) American economist

Source: Increasing Returns and Path Dependence in the Economy, (1994), p. 1: Chapter 1. Positive feedback in economics

“Increasing-returns economics has roots that go back 70 years or more, but its application to the economy as a whole is largely new.”

W. Brian Arthur (1946) American economist

Source: Increasing Returns and Path Dependence in the Economy, (1994), p. 1: Chapter 1. Positive feedback in economics

“Conventional economic theory is built is built on the assumption of diminishing returns. Economic actions engender a negative feedback that leads to a predictable equilibrium for prices and market shares. Such feedback tends to stabilize the economy because any major changes will be offset by the very reactions they generate. The high oil prices of the 1970s encouraged energy conservation and increased oil exploration, precipitating a predictable drop in prices by the early 1980s. According to conventional theory, the equilibrium marks the “best” outcome possible under the circumstances: the most efﬁcient use and allocation of resources.”

W. Brian Arthur (1946) American economist

Source: Increasing Returns and Path Dependence in the Economy, (1994), p. 1: Chapter 1. Positive feedback in economics

“Our understanding of how markets and businesses operate was passed down to us more than a century ago by a handful of European economists — Alfred Marshall in England and a few of his contemporaries on the continent. It is an understanding based squarely upon the assumption of diminishing returns: products or companies that get ahead in a market eventually run into limitations, so that a predictable equilibrium of prices and market shares is reached. The theory was roughly valid for the bulk-processing, smokestack economy of Marshall’s day. And it still thrives in today’s economics textbooks. But steadily and continuously in this century, Western economies have undergone a transformation from bulk - material manufacturing to design and use of technology — from processing of resources to processing of information, from application of raw energy to application of ideas. As this shift has occurred, the underlying mechanisms that determine economic behavior have shifted from ones of diminishing to ones of increasing returns.”

W. Brian Arthur (1946) American economist

Arthur, W. Brian. "Increasing Returns and the New World of Business." Harvard business review 74.4 (1996): p. 100

“That which is static and repetitive is boring. That which is dynamic and random is confusing. In between lies art.”

John Locke (1632–1704) English philosopher and physician

This statement has been attributed to John A. Locke, but John Locke did not have a middle name. The words "dynamic," "boring" and "repetitive," found in this quote, were not yet in use in Locke's time. (See The Online Etymology Dictionary http://www.etymonline.com/abbr.php.) John A. Locke is listed on one site as having lived from 1899 to 1961; no more information about him was available.
Misattributed

“Economic theory deals with two concepts, Value and Economy. Abstract reasoning regarding these concepts rests ultimately on mathematical concepts of quantity, time and energy. The three are inseparable, for quantity and time are dimensions of energy. The quantity relationships of energy, usually termed "statics," turn on the problem of the relation of the parts to the whole, while the time relationships, usually termed "dynamics," are the relations of a process that connects past, present and future.”

John R. Commons (1862–1945) United States institutional economist and labor historian

Source: Legal foundations of capitalism. 1924, p. 1; Lead paragraph first chapter on Mechanism, Scarcity, Working Rules

“Biological systems are dynamical, not easily predicted, and are creative in many ways… In the old equilibrium worldview, ideas about change were dominated by the action-reaction formula. It was a clockwork world, ultimately predictable in boring ways.”

Christopher Langton (1949) American computer scientist

Christopher Langton in: Roger Lewin (1990) Complexity: Life at the Edge of Chaos New York, Macmillan. p. 190 as cited in: Sohail Inayatullah (1994) " Evolution and Complexity http://www.metafuture.org/Articles/evolution-complexity.htm#_edn1"

“Fear of death increases in exact proportion to increase in wealth: Hemingstein's Law on the Dynamics of Dying.”

Ernest Hemingway (1899–1961) American author and journalist

Pt. 2, Ch. 7
Papa Hemingway (1966)

“Managers are not confronted with problems that are independent of each other, but with dynamic situations that consist of complex systems of changing problems that interact with each other. I call such situations messes. Problems are extracted from messes by analysis. Managers do not solve problems, they manage messes.”

Russell L. Ackoff (1919–2009) Scientist

Cited in Donella Meadows (2008) Thinking in Systems: a Primer. p. 1.
1970s, The future of operational research is past, 1979

“To build a genuinely sustainable economy, we need to recognize and embrace the dynamic nature of the world, and free ourselves from the dead holds of static dogma.”

David Orrell (1962) Canadian mathematician

Source: The Other Side Of The Coin (2008), Chapter 6, At Rest Versus In Motion, p. 200

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