Overhauling economics

From Aeon: a proposal to rethink economics in the same way as quantum physics. Seems wonky and only merely intentionally provocative at first glance but the idea has some merit. It has to do with the nature of transactions, i.e., the exchange of money, being closer to quantum interactions.

The most basic insight of quantum physics was that matter or energy does not move continuously, but is transmitted in discrete, sudden jumps. Money, of course, is the same – there isn’t a little needle showing the money draining out of your account when you make a payment, it just goes in a single step. And as a Bank of England paper noted in 2015, one reason the money-creation process is hard to accommodate in traditional models is that it works ‘instantaneously and discontinuously’ (their emphasis) rather like the creation of quantum particles out of the void.

The most interesting takeaway, however: on current models, economists don’t think about money!

Economists, it seems, think about money less than most people do: as Mervyn King, the former governor of the Bank of England, observed in 2001: ‘Most economists hold conversations in which the word “money” hardly appears at all.’

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