This post continues the story of quantum economics, which began here. There is a summary of posts to date at the end of this post.
Can you please note when reading this post and others in the series that I am not suggesting that quantum physics and economics are akin to each other. Instead, I am exploring how quantum thinking might help build new economic narratives, which is quite a different goal.
A Call for a New Economics
“It is not the strongest of the species that survives, nor the most intelligent. It is the one that is most adaptable to change.” – Charles Darwin
Economics, as it stands, has failed.
It failed to predict the 2008 crash.
It failed to prevent austerity's harm.
It fails today to confront inequality, climate change, and the democratic crisis.
At its heart, it fails because it clings to a Newtonian worldview: economies as machines tending toward equilibrium, governed by abstract laws that deny uncertainty and power.
This series has argued for a different approach: a quantum political economy. It is not physics applied literally, but a set of metaphors and insights that illuminate reality better than a model of economics based on equilibrium does.
Money is potential energy, labour the quantum of value, land the finite field, double-entry entanglement the fabric of relationships, uncertainty the truth of the future.
This final part sets out the call: what a new economics must stand for, how it differs from the old, and why it matters now.
First: naming the failures of old economics
Before building the new, we must name what is broken.
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The obsession with equilibrium. The idea that markets self-correct blinds us to potential crises. Stability is assumed, so the risk of collapse is systemically ignored.
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The myth of rational agents. People are not calculators who maximise utility. They are social beings shaped by norms, power, and limits.
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Money is treated as a neutral economic force. Money is treated as a veil, not a force, and yet it is its potential energy that shapes real outcomes.
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The denial of the significance of labour. Work is treated as a cost, not the foundation of value. Unemployment is tolerated as if idle labour were harmless.
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Land is ignored. Land is collapsed into capital. Rents and natural limits are hidden. The housing and ecological crises follow.
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Speculation is indulged. Finance is celebrated for efficiency, while, in fact, it traps energy in sterile loops, destabilising the system.
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The forecasting fetish. False precision in GDP and inflation targets creates bad policy based on impossible certainty.
These are not small errors. They are systematic flaws that discredit economics as a discipline and impoverish politics as practice.
Second: principles of a new economics
A quantum political economy begins with different principles:
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Uncertainty is real. The future cannot be predicted precisely. Policy must build resilience, not pretend to know.
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Money is potential. It is infinite in issue but limited in use by real capacity. It must be directed toward production, not speculation.
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Labour is quantum. Human effort is indivisible and fundamental. Full employment is a right and a necessity.
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Land is finite. Natural resources are fixed and must be shared and stewarded. Rent must be taxed, and ecological limits respected.
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Entanglement matters. One person's income is another person's cost. Every loan is matched by an asset. The economy is a web, not isolated atoms.
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Collapse happens. Crises are inevitable. Policy must dampen, not deny, systemic instability.
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Distribution is central. Inequality is not a side issue. It is a drag on flows, a trap of energy, and a cause of fragility.
Third: policy architecture
From these principles flows a different policy agenda:
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Fiscal activism. Reject austerity. Use sovereign money power to fund investment in health, education, housing, and green transition.
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Full employment. Work should be guaranteed through direct public job creation, if necessary. Idle labour should be treated as a waste of value, not a price worth paying for balanced budgets.
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Tax rents. Shift taxes from labour and production onto economic rents. End speculation, return value to the community.
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Regulating finance. Impose capital controls, financial transaction taxes, and strong regulation to suppress speculation and stabilise flows.
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Wealth taxation. Use a range of taxes to redistribute idle accumulations to fund productive use. Recognise that hoarded wealth is trapped energy.
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Green transition. Mobilise money to expand renewable capacity, retrofit homes, and transform transport. Match infinite money to finite energy wisely.
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Automatic stabilisers. Build in resilience: progressive taxes, strong welfare, counter-cyclical investment.
This is not radical in principle. It is common sense once myths are stripped away.
Fourth: a politics of care
Economics cannot be separated from politics. Choices about money, labour, and land are choices about who matters.
A new economics must be a politics of care:
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Care for people by ensuring the dignity of work, fair distribution, and security of life.
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Care for the planet by respecting ecological limits and planning land use sustainably.
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Care for democracy by making elections fair, ownership transparent, decision-making accountable, and wealth answerable to society.
The politics of austerity was a politics of neglect. The politics of markets-as-gods was a politics of abdication. The politics we need is care.
Fifth: answering the critics
Of course, there will be objections.
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“Unlimited money means hyperinflation.” But that is only true if capacity is exceeded. If investment expands capacity, money mobilises and does not destroy value.
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“Labour is obsolete in an automated age.” However, machines need labour to build, maintain, and guide them. Labour's quantum shifts, but does not vanish.
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“Taxing economic rents is impractical.” The Taxing Wealth Report proves otherwise. It is a question of will, not means.
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“Markets are efficient.” This is not true: markets disguise gambling as speculation, misprice, and crash. Regulation is not distortion, but is essential if fair markets are to exist.
Critics defend old myths because those myths serve the powerful. But myths cannot solve crises.
Sixth: why now?
This is not academic indulgence. The call for a new economics is urgent.
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There is a climate emergency. We cannot pretend infinite resources exist. Land is finite, and ecological collapse is real.
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We face serious inequality. Wealth is hoarded at the top, trapping energy and stifling essential flows.
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We have to tackle political instability. Populism feeds on economic failure. Neglect of care breeds authoritarianism.
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There are global crises. Pandemics, wars, and financial shocks reveal fragility. Old economics has no answers for them.
The future cannot be funded with myths. It requires truth.
Conclusion: funding the future
We stand at a threshold. Old economics is exhausted. Its metaphors mislead, its policies harm. A new economics is possible.
A quantum political economy offers a path:
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Money as potential energy.
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Labour as the quantum of value.
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Land as a finite field.
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Entanglement as reality.
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Uncertainty as truth.
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Collapse as inevitability.
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Distribution as a foundation.
This is not just an analysis. It is a call. We need economists willing to break with equilibrium. We need politicians willing to confront rentiers. We need citizens willing to demand care over neglect.
Economics must change. Politics must change. Both must align with reality if humanity is to endure.
We cannot fund the future with myths of scarcity and equilibrium. But we can fund it with truth: infinite money aligned with finite energy, mobilised through labour, shared across land, distributed with justice.
That is the call for a new economics.
Previous posts in this series
- Discussing quantum economics, accounting, money and more
- Quantum economics, part 1: Why Quantum Thinking Matters for Economics
- Quantum economics, part 2: Money as Particle and Flow
- Quantum economics, part 3: Entanglement and Double-Entry Bookkeeping
- Quantum economics, part 4: Quantum Uncertainty and Economic Forecasts
- Quantum economics, part 5: Speculation, Potential, and Energy
- Quantum economics, part 6: Infinite Promises, Finite Energy (MMT and constraint)
- Quantum economics, part 7: The Photon Question — labour as the Quantum of Value
- Quantum economics, part 7A: The Ergon or Praxeon
- Quantum economics, part 8: Land as the Field
- Quantum economics, part 9: Towards a Quantum Political Economy
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Next stage is Quantum MMT: The Wavefunction of Sovereign Spending
Classical MMT rightly notes that a currency issuer can’t “run out of money,” but it treats spending and taxation as if they commute — spend first, tax later, no matter the sequence. It also handwaves away inflation as if it’s always a policy knob, when in reality path-dependence and feedback loops matter. Quantum MMT fixes this by admitting non-commuting operations and interference effects: the order of fiscal moves changes outcomes, and policies can amplify or cancel depending on context.
I will play with that. An article may follow. It is quite logical.
I’d prefer the phrase “it is common sense” at the foot of Third: policy architecture” to be replaced by “it makes logical sense”
Here’s why.
Many years ago, the majority of people in Britain lived their lives within a radius of 50 miles, commonsense was a useful concept – if you lived where the local crop was beans and you didn’t know when to plant beans, you could reasonably be described as lacking commonsense.
Now communities are much more diverse, comprising people with different belief systems, types and levels of education, experiences, areas of expertise etc.
Now, common sense means what is obvious to me and should be to everyone else. “Use your common sense” means “Think as I do”, “Where’s your common sense?” means Why can’t you think like me”, “but that’s just common sense means “ “I and everyone else understood that ages ago; how have you only grasped it now?”.
Then there’s the boss who says “I’d like a brief report on this situation -I’m looking for a commonsense solution” and who, when provided with your report says “Oh no, that won’t do, that’s not what I was looking for”. That means “I’m much to important and busy to do my own thinking but, when someone else is thinking for me, I expect them to think like me.
Common sense then is often used as a put down but, what is worse, the concept of common sense can act as a barrier to open -mindedness and new thinking.
About fifty years ago when a colleague of mine told me what his wife was learning about quantum theory as part of her PhD, my reaction was “surely that can’t be right” – commonsense says that our experience of the macro world tells us all there is to know about the universe.
When I try to explain that all our money comes from government spending and bank lending, a frequent reaction is a confident “No, that’s nonsense!” One chap recently said “Oh, the old magic money tree eh? Well we all know that magic is just sleight of hand.” Their experience of money like most people’s is limited to family or small business finance and their commonsense is firmly grounded in that experience.
Noted
Life in the universe is never in equilibrium the existence of consciousness should tell us this. With consciousness a life form can make choices for both survival and well-being. Can even an inanimate universe exist without consciouness? Hard to imagine how it can. See the following synopsis:-
https://sobrief.com/books/the-goldilocks-enigma
This is the idea for the likely fourth idea in the series of quantum essays, that equilibrium only exists at death.
Here’s a Google AI quote:-
“There’s more matter than antimatter because of a phenomenon called baryogenesis in the early universe, which created a slight asymmetry, favoring matter. While matter and antimatter annihilate each other, this small imbalance of roughly one extra matter particle for every billion matter-antimatter pairs resulted in the matter-dominated universe we observe today, preventing a complete annihilation. This asymmetry is a significant mystery in physics …”
Three thoughts arise from this. Who or what made this conscious choice? There always needs to be more money creation than drainage going on as both population grows and new goods and services become available otherwise deflation would happen as the same amount of money has to cover these events. Both the existence of the universe and money rely on flow so is it actually possible not to use the concept of flow or indeed something or somebody invent it?
https://neweconomicperspectives.org/2013/02/real-dollars-and-funny-money.html
Thanks.
And back to J D Alt!
Three small points i one comment.
First, 3 cheers Richard. Stimulating, open-ended, original, to the point in the whole series.
Second; the principles are a guide to action in a given situation, just as 10 commandments guided Jews when they were written. And changing a mindset isn’t easy; one needs to practice new version. Could someone maybe come up with exercises in applying these new metaphors? I’m not asking Richard here; he is doing/has done such a good foundation, and has many other fish to fry.
Third: look at the old-school statement that “labour is obsolete in an automated age”. Just as food is obsolete in an industrial age.
I am now working (literally now) on a series of essays exploring consequences of these ideas. Three are in progress, two suggested by commentators here. Other suggestions are welcome.
Richard
The Policy Architecture section repeats what you have been saying for a long time.
How, if at all, has the Quantum thought experiment actually changed your practical recommendations?
They change the framing; that was always the purpose.
On framing I wonder whether you could riff on Time.
It seems to me that monetary economics ,for example, ignores time by bundling everything up into aggregates that become meaningless.
Money is spent on things that have different use spans over time. Like education , health and sewers.
Accountants can depreciate assets overtime but in fact benefits can last much longer.
Quantum Mechanics fixes time whereas Relativity bends it.
What is required is a new economics and accounting that recognizes that in looking at whether spending today is a good thing the rules that are constructed to constrain and ration spending are
self defeating as it can cut spending on things that would yield infinite benefits.
When seen in the light of infinite benefits investment today is trivial.
There is not enough post hoc analysis of yesterdays spending.
For example investment in trains, Electricity grids and telephone networks , sewers and education surely have reaped rewards over generations not recognized by the short term thinking of most economists.
In that light we need more prisms capable of bending the time frames of decision makers.
This might well be be the subject of a bog. Thanks, and appreciated. But give it a day or two: I have already written five essays this morning for a new series called ‘The quantum essays’ based on reactions to this series.
Not sure we need the quantum paradigm to acknowledge feedback loops, but this is a really good summary.
There a good few others who are developing and/or understanding some or all of this alternative to the ‘no money’ ‘balancing the books’ austerity model .
You are not alone – neither are we.
Just wish there was a widely recognised group which the BBC would find it difficult to ignore when they call up the IFS or similar to provide ‘balance’.
Thanks
I’ve been following this series with great interest. I remember discovering Quantum Theory when I was about 12 or 13, and it blew my mind. So I go along with this analogy.
However, I’m not sure about treating money as potential energy. I always try to keep sight of the fact that money is only a measure, whose unit is, in the UK, the pound. Money measures economic activity (the use and exchange of real resources). Similarly, photons of light are measured in joules.
So maybe the potential energy is stored money, and the trouble is that too much is stored up by too few people.
I suggest you are being too rigid.
No one really thinks money is just a measure: it clearly is very much more than that, in any economic thinking.
@ Nigel
Physics teaches us to think about light as waves and particles. But not strictly at the same time. We ask a wave question to get a wavy answer, and vice versa.
Analogously, money could be considered at the same time to be a tally system (particle-esque) and potential (wave-esque). The power is, that you could ask a particle/tally question to try to understand large-scale behaviours, but a potential/wave question might elicit more clarity.
Additionally, if you see money as potential, it peels back a layer of abstraction that perhaps surrounds very wealthy individuals. Rather than their wealth being simply a large tally (“well done you for collecting so many shinies”) it changes the story to “these individuals have large potentials to do whatever they wish with”. Of course, they may choose to be benign, but they may also choose to be nefarious.
I’m not at all suggesting that I know where a person’s maximum potential should be set, or even if there should be a set-point, but merely offering up a different viewpoint/narrative which is clarified by the non-tally framing.
As others have pointed out, I think the fundamental point of this blog series is that we need to move beyond Newtonian economics. As with physics, Newtonian economics provides useful approximations, which can take us so far, but without Quantum or Relativistic Economics, we are limited, and we are seeing the fallout of these limitations.
I like and agree with your argument.
Time is not part of quantum mechanics, it appears in the equations as a totally external parameter. Some modern proposals suggest it is a product of entanglement and that time is an illusion, lunchtime doubly so.
A concept our minds have evolved to enable us to make sense of interconnected events
You know more about this, but I find your suggestion hard to understand based on what I think I have learned so far. Why do I think time is relevant? Are you exploring differences between Einstein and later thinkers in making your claim I.e, it is in relativity but not quantum?
In classical mechanics, time is an external parameter: you describe how a system evolves in time.
In relativity, time is a coordinate, not an external universal parameter.
In quantum mechanics, time is absolute and external.
Reconciling these two views leads to the problem of time in quantum gravity which raises deep questions; is time fundamental, or emergent from correlations between subsystems?
In standard quantum mechanics, time enters the Schrödinger equation as a parameter that drives the evolution of the wavefunction.
So, time has a role.
It’s complicated and very much up in the air, our notion of events is so linked to the concept of time that it’s near impossible to put them in any other context even for those working on it. With the exception of what the nearest clock measures (whatever that is), time is a very shaky and ephemeral concept in modern physics but for all practical purposes we just go with what the nearest clock measures.
A simple discussion of the time problem
https://www.npr.org/2022/12/16/1139780043/what-is-time-physics-atomic-clocks-society
Incidentally, all the visual descriptions we use for quantum mechanics are metaphors created for those of us who need a visual image and can’t simply look at the maths and say “oh that’s how it works”.
Here’s Richard Feynman on that topic
https://youtu.be/nYg6jzotiAc?t=3728
It’s absolutely fine to take the metaphors and try and use them to help describe something else to see if that’s useful, but in physics they are just metaphors for reality, some better than others.
It’s also open in physics that it may all be fundamentally wrong in that our notion of space/time is wrong, there is at least one viable alternative that can’t be dismissed, the maths of quantum mechanics & relativity would still be correct, perhaps with some additions, but the visual metaphors for both would have to go in the bin.
Thanks.
I spent much of my evening reading this and trying to get my head round it.
Entropy seems to be my entry point via the second law of thermodynamics (and I know that’s not quantum) but is it that time does not work at very large and small scales alone? I know – much too simplistic – but I see why this is hard. This world is weirder than I ever imagined.
is it that time does not work at very large and small scales alone?
Really It’s just if you mix anything other than simple time measurements with QM then you’d be going where physicists fear to tread, for doing anything complex with time then it comes from relativity which is mainly incompatible with Quantum mechanics but entropy should be safe enough, it’s been done before.
https://press.uchicago.edu/ucp/books/book/chicago/E/bo239242610.html
I am reading that – and am having probloems with some of it
But I agree, entropy may be a better route into time
Steve Keen’s analysis is that GDP/economic activity is very strongly correlated with energy consumption
I’m wondering if economic activity/GDP might be incorporated into the quantum
framing? Maybe it’s related to productive capital creation and maintenance? I’m wondering how financial speculation consumes energy without productive growth and how to frame that? How to classify energy consumption as helpful/unhelpful?
Let me think about that – although by implication of the need to accept the land constraint I have already done that – because land in this sense means sustainable use of all natural resources.
[…] finished the first series that I plan to publish on quantum economics (others are planned), it became clear that explaining the use of this thinking was important before […]
Exciting! Clear, comprehensive and with rebuttals for critics wanting status quo. MMT as you say, explains how things work (or can work). Now you’re into new territory building and testing an architecture which will house all the good principles for a sustainable and just economy.
A quantum leap!
[…] finished the first series that I plan to publish on quantum economics (others are planned), it became clear that explaining the use of this thinking was important before […]
[…] finished the first series that I plan to publish on quantum economics (others are planned), it became clear that explaining the use of this thinking was important before […]
[…] finished the first series that I plan to publish on quantum economics (others are planned), it became clear that explaining the use of this thinking was important before […]