Quantum Economics: The New Science of Money

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quantropy
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Quantum Economics: The New Science of Money

Postby quantropy » Sun Jul 08, 2018 5:52 am

Why I looked at this book
A long time ago I did a doctorate in Quantum Theory. I've also written a book on economics. So I thought I should read this book. In particular I think that there's an important link between economics as the study of many interacting individuals, and thermodynamics as the stuy of many interacting particles, and that quantum theory has it's roots in thermodynamics. There's the worry that sometimes the word 'quantum' is used without much meaning, but given Orrell's background in complex systems theory I expect that this won't be like that. I hope that it will be an interesting read.

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quantropy
Posts: 131
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Re: Quantum Economics: The New Science of Money

Postby quantropy » Mon Jul 09, 2018 8:59 am

First Impressions
After reading the sample I have some doubts about this book. I'm a bit worried about making money the centre of economics. My feeling is that it's possible to make enough stuff for everyone in the world to have a decent standard of living, but it's the inequalities of money that mean that so many are struggling to get the basic necessities. Then again, if this book can explain why economies tend towards disequilibrium and asymmetry as well as telling how mainstream economics has got it's ideas of risk wrong, then it will be a very valuable contribution.

There are mixed messages throughout what I've read. Orrell has a background in the mathematics of complex systems, but seems to want to avoid formulae and argues against overly mathematical economics. He also joins the 'economics shouldn't try to ape physics' bandwagon, which is ironic in a book called Quantum Economics. I think he has some work to do to set this book apart from those with a similar title. (I must say Thog's Guide looks interesting)

In Economyths I felt that Orrell spent too much time on strawman arguments against 'Mainstream Economics' and never really delivered the new ideas which were promised. I'll have to see whether this book does any better.

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quantropy
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Re: Quantum Economics: The New Science of Money

Postby quantropy » Thu Jul 19, 2018 12:40 pm

After reading Orrell's earlier book Economyths I felt it had several problems. It had too many strawman arguments, and didn't deliver on the promise of something new. So I thought I'd use that as a baseline and look for places where this book did better. Since I was been somewhat negative about Economyths, I decided to try to be more positive with this book. I didn't quite succeed.

One positive thing was that Orrell did demonstrate that mainstream economics really is a monoculture and that some people really do equate pluralist approaches to economics with young-Earth creationism. Another thing was that even in some places where I didn't agree with what Orrell said, I felt that it made me think about how I would do things. What would I quantize in economics? How is the prisoner's dilemma related to quantum nonlocality? If a book is thought-provoking in this way, then that's a positive in my opinion.

Unfortunately there were serious problems with the book. One is that Orrell kept repeating how private banks can create money from nothing. Is it fair that they can do this when you can't print your own money? The answer is: you can print your own money. Here's how:

How to print your own money
Print some slips with the text "I promise to pay the bearer on demand the sum of $10". Sign one of these. (It's called an IOU). Promising to pay yourself $10 isn't very interesting, so get a friend to sign one, and then swap them. Anyone who trusts that you will pay what you say (and that the IOU is genuine) will be willing to accept one as being worth $10. Congratulations, you've just expanded the money supply by $20.

But have a care. Suppose your friend buys something with your IOU, so it gets into circulation, but you hang on to his. What if he then says that he can't repay it? You are still responsible for repaying yours if requested, so far from having gained any wealth you've lost $10. It's the same for banks, which are responsible for the debt if a debtor can't repay. That is one reason they charge a higher interest rate on loans than they give on deposits. Talk of private banks getting "seigniorage", that is the profit made by a state which really can create fiat money, is nonsense.

But the worst problem is the misuse of quantum ideas. Orrell constantly uses the word entangled. Yes the two halves of a tally stick can be thought of as entangled, but it isn't quantum entanglement. It is the entanglement of Bertlemann's Socks, which is something different. And the last chapter we-conomics, claims that quantum theory implies that we should abandon the selfishness of mainstream economics. Getting away from selfishness is all very well, indeed the book puts forward arguments that have been made many times before. It's trying to tie it in with quantum theory that is the worst kind of scientism. If you bought that then you should also accept that if the microphysics of the world were mechanistic rather than quantum then selfishness would be justified.

Suppose the world was based on Gaussian Quantum mechanics. Such a world would be indistinguishable from the world we live in except that a few experiments by Alain Aspect and Anton Zeilinger would have turned out differently. But Gaussian Quantum mechanics can be grounded in a mechanistic theory. So in this indistinguishable world would selfishness be OK? And if those experiments had turned out differently would you have heard the likes of Ayn Rand crowing that they were right all along, and would the rest of us have gone along with this? The whole idea is total nonsense.


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