François-René Rideau (fare) wrote,
François-René Rideau
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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.

Tags: a posteriori, determinism, economics, en, libertarian, misesian, models, quantum
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