ABSTRACT
Classical economics was founded by Adam Smith with the Smith theorem that the division of labor was limited by the market extent. Malthus realized the competition between resources and population. This issue inspired the works of Darwin and Marx. Neoclassical economics led by Marshall shifted economic focus to short-term price fluctuations. Marginal revolution replaced objective resource constraints with subjective psychological rationality. Evolutionary economics introduced a historical perspective on long-term economic development with little help in math. Keynesian economics made a significant contribution in dealing with wars and financial crises in medium terms from the disequilibrium approach. Non-equilibrium physics developed a new science of complexity and a new understanding of living order. The discovery of economic color chaos provided strong support to Schumpeter's business cycle theory as heartbeats and Hayek's view of endogenous money. The nonlinear dynamics of the division of labor and the theory of metabolic growth revealed life cycles (or more exactly, wavelets) in the co-evolution of ecology-technology-culture. The TRUE face of Adam Smith was rediscovered. The trade-off between stability and complexity was revealed by the GENERAL Smith Theorem of complex ecological systems. The general equilibrium framework broke down under increasing returns to scale. Co-ordination of nations is a more critical issue of the global division of labor than competing for power and wealth of nations. Popper's theory on science philosophy should be upgraded to new heights in complexity economics.
