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eyes black and white

Quantum Economics

In elementary physics, scientists know they cannot pretend they have certainty anymore; actually, uncertainty about which events happen to a particle is deeply rooted in the laws of quantum physics. The best way to express knowledge about a particle is through wave functions that describe the probability of its possible states, depending on the infinitely many sequences of interactions in which it may or may not participate. Of course, when it appears that a particle effectively interacted with other particles in an observable way, then this new knowledge corresponds to an update in the wave function that describes the particle (or set of particles); the technical term is that the wave packet collapses. In quantum physics, information has a cost, because you may only extract useful information through interaction, which not only costs you energy, but also modifies the system in ways that void other information.

Interestingly, at the same times that quantum physics revolutioned physics, thinkers of the Austrian school also revolutioned economics, by expliciting the notions of uncertainty, information costs, potential interactions, knowledge and use of knowledge, etc. Yet most economists are blissfully unaware of it — and make strenuous efforts to remain ignorant, because they invest their life in supporting and being supported by political intervention in the economy, which is systematically based upon the premise that the right information is magically available at no cost to the political planners.

All the neo-classical, keynesian and marxist models of the macroeconomy neglect the intrinsic role of information in the nature of human action. The models that try to predict the future with nice simple numbers, aggregates. These aggregates, that are claimed to synthetize information about some economic activity, are static projections that by their very scalar nature cannot express the wide variety of possible outcomes depending on a growing series of interactions that are not known. Those who claim there is a determinism that makes for only one possible outcome neglect the relevance of future events; they deny not just the costs of acquiring information about relevant possible events, they also deny the very value of information. Those who don't claim determinism but still claim they know enough to define policies that must be enforced are dishonest or delusioned with visions of grandeur, thinking they are outside and above the crowd they claim to rule. Actually they are inside of it and at the bottom of it.

If economics has to have any future as a science, it will probably be as Quantum Economics: a science describing human interrelations in terms of uncertain discrete transactions, where information matters, where it has a value and a cost; where it is acquired by interaction, and used by interaction; where it is unknown until the interaction happens, and where it is uncertain when the interaction will happen and what it will be, but where it is certain that the interaction will eventually happen, leading to an inevitable according reduction of the packet wave.

Comments

(Anonymous)

Quantum Economics

Fare,

I enjoyed your piece on Quantum Economics. I have been looking int this are myself now. This “transactional view” can be expressed simply in trading terms. We can say we know the value of an asset only at the time it is quoted, and the quote itself is a function of expected future valuations, which is dependent, in part, if the transaction is executed (or not) at that price. George Soros has commented on this as well...“The prevailing wisdom holds that markets tend toward equilibrium--i.e., a price at which willing buyers and sellers balance each other out. That may be true of the market in widgets, but it is emphatically not true of financial markets. In financial markets a balance is difficult to reach because financial markets do not deal with known quantities; they try to discount a future that is contingent on how they discount it at present.” . This is certainly something worthy of more research.
Regards - Martin

(Anonymous)

Re: Quantum Economics

One of the most amazing characteristics of our ilussion for continuity, from which we can rarely escape, is that our possibility to visualize life as non continuously isolated events always contains an ego-quantification element which agregates information being registered in real time to the information already been storaged or accumulated. So, ¿Is it possible to be free of it in order to participate in the interaction without being distorted by the accumulative aparatous?

(Anonymous)

Quantum Economics Description

The best description of QE I have seen yet.

(Anonymous)

Quantum Economics and why it is so difficult for Governments to accept it?


Joshua Konov at joshua.mcng@yahoo.com
The "Uncertainty" of the Quantum Economics over all seems much more "Certain" then currently used system by the US and other Governments who are pouring money into their Monetary systems and playing with their Fiscal policies: the "trickle down" approach of self-adjusting economics very well explained by Karl Marks is so deeply engraved in their philosophies thus even when billions are poured in Ethanol subsidies, Farming subsidies and through tax brakes and direct subsidies they the Governments call all of this approach anything but not with the real name: "Re-distribution of Wealth"; the taboo of Capitalistic philosophy does not allow their real actions to be called with real names and that as a consequence of the inadequate distribution of wealth by the so called Capitalism and its cyclical dialectical self-adjusting powers are the reasons for their interference into markets' balance of Demand to Supply. The Governments from one side are proclaiming their oath to Capitalism and at the same time braking all the rules of the "trickle down" approach of it. By quietly socializing their economies the Governments are doing what they only know: manipulating public opinion by posing as ideologically correct when trying to handle a very difficult economic situation of dis-balanced Demand to Supply Markets of a Globalizing Market. Just you can drive through rural Wisconsin and observe the obvious prosperity of once in the past struggling farmers all but some as a result of ethanol subsidies, then you can swing to Detroit and see GM buildings who are still called so because of US Government's subsidies. From there if you cross the oceans in any direction East or West even in the birthplace of the Capitalism England you will be very surprised how subsidized are all industries, farmers, madicare, unemployed and many others.
Quietly all of Developed Economies Governments are doing what they only can do for preventing "Trickle down Capitalism" from totally destroying their economies: socializing them.

So how it happened the greatest Capitalism who built the USA, Japan, Western Europe and new China has become an obstacle and Socialism who have destroyed USSR and Eastern Block Countries has become a system of Economics so prosperous and functional, thus when the entire World is in recession China reported substantial growth by combining Capitalism with Socialism?!?

Is it the way to the Future or may be some other ways out there that can empower the vivid powers of individual entrepreneurship of Capitalism to bring prosperity?

I believe that Trickle Down Capitalistic Economics that support deregulated market and shady business' practices, where Governments mostly serve Big Businesses and Big Investors, and thus provoke market insecurity and volatility, and the accounting balances are founded on industrial production and farming could be upgraded into an Market Economics that support regulated just like our common laws and with enhanced liabilities business practices, financial system, commodities and other exchanges, where Governments support Medium to Small Businesses and Investors, and thus promote market security and less volatility. Also the ideological Capitalistic Economics of social distribution could be replaced by a Market driven distribution in which because of the enhanced security of assets and because of the Globalization of business and investment may pour more Monetary assets into the system without provoking high Inflation and well improve its Fiscal policies.
So the freedom of entrepreneurship and its powers will not disappear into run by the Governments economies of a modern World nightmare bureaucratization.

Quantum Economics differs from Cyclical Dialectical Capitalism by first recognizing the "uncertainty" of Economic developments instead of cyclical self-adjusting and and second by accepting different tools of economics as "parameters" for dispersing "build ups" that could bring recessions instead of politically and ideologically motivated Fiscal and Monetary policies of current Capitalism.

Re; Govt and economics

Dude it has nothing with socialism-socialism is about providing for people-usually poor people. Inefficient businesses milking off government money is called "corruption" and "feudalism" when the powerful and the government have a cozy relationship under the pretence of the "too-big-to-fail" policy and succumbing to various group pressures e.g. farmers who are also voters. The small and medium businesses are either too weak as unions and in many countries too few to count enough votes but yes growth and innovation usually takes place in smaller companies until they are poached by big companies hence small and medium businesses fight for themselves and constitute genuine capitalism.
eyes black and white

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