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Blog

Can science help solve the economic crisis?

By Hamish Johnston

I was trained as a physicist, many of my friends are scientists and I believe that science has made the world a much better place.

But, would I trust my economic well being to “a group of good scientists…some who know a lot about economics and finance, and others, who have proved themselves in other areas of science..”

Probably not…

I suppose I’m old fashioned in the sense that if water is pouring from my ceiling, I would call a plumber, not a physicist — even though the physicist would probably have a better understanding of how gravity and fluid dynamics had conspired to ruin my day.

The above quotation comes from the introduction of an article called Can science help solve the economic crisis? that has been published on a website called Edge, where clever people expound on various topics of general interest to society.

The article is written by four intellectuals — including the physicist Lee Smolin of the Perimeter Institute — who argue that scientists should be given chance at “developing a scientific conceptualization of economic theory and modeling that is reliable enough to be called a science”.

The article goes on to identify several failures of neoclassical economics, which has been the guiding philosophy for markets and economies worldwide. Many of these criticisms seem to deal with how principles of science — such as the concept of equilibrium — have been naively applied to economics with dire consequences.

Then, it suggests a way forward — applying the concept of self-organized critical systems to economics.

Hmm, better call for that plumber!

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2 comments

  1. A rather extended discussion of this article and proposition can be found at another physics-related blog, BackReaction (see also a previous discussion of the same topic in John Horgan blog post). While the discussion itself may be not without interest, the emerging (my) conclusion is close to the above: those clumsy economic “plumbers” are still better than those swift-handed “physicists”. I can only add that exactly the same idea was behind the famous and super-ambitious Santa-Fe Institute initiative started more than two decades ago. While the result of those “best possible” efforts of official “interdisciplinary” science is well-known (no result at all, at least for economics), two major Santa-Fe activity participants (Kauffman and Smolin) try to promote exactly the same fruitless “interdisciplinarity” again (as if the current crisis makes things easier). Well, at least it’s a good illustration of modern (official) science operation and moral values… Economic crisis and underlying corruption may seem relatively childish sports, with respect to record-breaking “efficiency” and “honesty” in science… [The characteristically closed and rich club of “intellectuals” at Edge.org publishing those “advanced” ideas (closed even to external comments in today's “open-web” epoch) is itself a good illustration of the whole official science establishment, where only formal, useless “comments” are permitted, while everything is determined within “self-organised” inner circles of omnipotent “high priests” and the entrance to creative, knowledge-progress facilities is closed it seems practically to everybody.]
    However, everything shows that a much better understanding of “what’s really going on” in economics and society as a whole would indeed be necessary, as the liberated power of intense global interactions in a world without any realistically conceivable general order cannot be efficiently governed any more by the notorious “invisible hand” of market interactions or even hypothetical, “hidden” or open, “government”. But it’s equally evident that such essentially better understanding of ever more complicated economic and social system, optimal civilisation development itself needs also a qualitatively different kind of knowledge, far from official science “models” failing already at the level of a single elementary particle.

  2. great blog it’s good to see someone using a blog for what it is actually meant for look forward to seeing further comments.

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