This Element develops an innovative combinatorial model of technological change and tests it with 2,000 years of data from global GDP data and US patents, thus generating the observed historical pattern of technological change. This Element models the Industrial Revolution as a combinatorial...

Using the theory of the adjacent possible (TAP), we describe a recombination process, agent epistemology, and the contours of rationality under creative evolution. In so doing, we rederive Hayek's results about local knowledge, reinforce the salience of heuristics over traditional rational...