The premise of this chapter is that it is useful to know why problems arise in everyday life before trying to understand how people set about trying to solve problems and thereby gain control and make their lives more predictable. We examine first how finite information processing and imaginative capacities limit how well existing problems can be analyzed, leading to further surprises for decision-makers. Next, we explore problems of obtaining knowledge about the behavior of others (that results in coordination failures) and of limited time to search and the problems posed by experience goods and credence goods. We then take a complex systems view of why some kinds of environments and products are prone to generate problems. This analysis emphasizes the significance of the connective structural architecture of systems, how linkages can cause problems to compound, the advantages of modular systems and the problems caused by absent prerequisites or corequisite elements for system functioning (in contrast to the presumption of substitution in orthodox economics). In light of this, there is a consideration of what it means to “get one’s priorities wrong” and the cognitive and systems challenges of poverty.

Continental East Asia during the first millennium bce transitioned from a redistributive “gift-giving economy” (or “prestige-good economy”) to a thriving market economy that was at least partly monetized. This transformation – gradual but all-encompassing and irreversible – led to a veritable “economic miracle” during the Warring States period (c. 450–221 bce), which brought unprecedented prosperity to large portions of the population. It will here be discussed through its reflections in the material record, spanning the eight centuries from c. 1000 bce down to approximately the time of the Qin unification in 221 bce.1 During this period, the Zhou kingdom and its constituent polities formed a relatively homogeneous culture area encompassing the middle and lower Yellow River basin and the middle Yangzi basin. Archaeological discoveries attest that, over time, many of the surrounding smaller and sociopolitically less complex regional cultures – defined by archaeologists on the basis of their material remains – were increasingly drawn into the Zhou orbit.