I wrote this infographic yesterday. It grew out of one of the recurring conversations Jacqueline and I have about the relationship between quantum thinking, uncertainty, measurement, relationships, economics, and, in her case, biology.
I am working on another, maybe today, on the idea of accounting and entanglement, which is also a quantum idea.
Why do this? It is to explore the idea that the supposed certainty that many neoliberal thinkers have about matters to do with economics is entirely misplaced. The idea that anything in economic data has an objective reality is just wrong.
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I’m not sure about this uncertainty thing… 😉
Moving away from flippancy, David Olusoga’s “A house through time” illustrates some of this very nicely (currently on Calton Hill, Edinburgh) – one plot of land, ĺots of changes, and uncertainty, and fluctuations in value. (Olusoga is to History, what Attenborough is to Natural History.)
https://www.bbc.co.uk/programmes/b09l64y9
Thank you
I like the point that “Accounts cannot reveal one objective truth”. It would be an interesting exercise to give a young accountant a set of a company’s figures, and ask him to produce various “final accounts” leading to one of several conclusions. Assumptions should be made explicit. 50 years or so ago I read a book showing how oil companies’ accounts were manipulated, but I can’t remember title or author.
I spent a career doing that.
QM & the measurement problem. The physicists make a dogs dish of explaining. but its easy enough. Electrons are small beasties. In theory with the right electro-magnetic radiation (EMR) you could locate one – but because electrons emit EMR, the incident EMR can/will impact on its position.Even the location of moving electrons is difficult as the twin slit experiment shows.
As for accounts, how does one account for the value of e.g. shares or bonds that form part of the “worth” of a company? Do you value them at cost or current market value? (ditto land, buildings etc). I seem to recall the asset-strippers making a “business” out of this in the 1960s (the value of the company not reflecting the value of its assets).
You are right – asset stripping created a business out of accounting misvaluation. But is mark to market any better? .
A pedant writes: it’s not just accountancy – there is a similarity between economics in general and QM. Unlike most physics theories, there are wildly different competing interpretations of QM – and I do mean wildly different. For example, it may come as a surprise to some that there is no agreement on exactly how measuring particles affects them – or even what constitutes a measurement at all. One particular interpretation is held by a majority of physicists, but without any real critical scrutiny (remind you of anything?). Yes, groupthink exists even among hard-nosed quantum physicists. The main uncertainty in QM is best summed up by ‘what the !*@! is going on?’ End of diversion. Pedant over and out.
I have made the economics point before – there was a whole series here about a year ago. See here https://www.taxresearch.org.uk/Blog/category/quantum-economics/. We should probably revisit it…
Your mention of the inherent propensity to regard numbers as absolute struck a cord with me. Teaching in secondary schools I often mentioned this. My example was that digital watches are now incredibly accurate but for the user a watch showing hours and minutes is only accurate to the nearest minute. I found this a difficult idea for people to accept.
It is very diffulct to persuade peoplle that nany numbvers are only apprximations to the truth.
I used to write 2 + 2 on the board and ask for the answer
I was invariably told it was 4
Then I pointed out that each 2 was the number 2.49 rounded to the nearest whole number
The correct answer then was 5
That is right, but it is very annoying. But it shows we cannot and must not take numbers at face value.
I was asking second year undergrads.
Heisenberg’s uncertainty is physics, not a licence to excuse guesswork with a fancy name. And ‘no objective truth’ is a cop-out—standards like IFRS exist precisely to pin down judgement, not celebrate wiggle room. Comparing an asset write-down to quantum mechanics doesn’t make accounting deeper. It just you desperately trying to be clever.Â
You think IFRS is objective truth?
Without being facile, I think you might need some serious help with your understanding. You have to be seriously deluded to believe that. It was designed to provide wiggle room.
Agree, IFRS is a methodology for standardising observation, based upon agreed principles that are shared so everyone understands what the observer observed. We have similar methodologies in science, but they are equally abstractions of reality that could be overturned from a different perpectives.
Knock on a door – are you touching the door or are the atoms in your skin repelling the atoms in the wood? Both are true, from a certain of view.
But IFRS does not standardise observation – it very deliberately gives the appearance of doing so, but does not.
How many Treasury budget economic forecasts have been correct over the last twenty years?
How many Chancellors have managed to keep to their fiscal rules since such Treasury novelties became fashionable?
If economics is such an exact science, then there should be evidence showing how the economic laws can be relied on. That’s the way science works. But economics is not a science, neither Newtonian, nor quantum, and neither the Treaury, nor the OBR, seem to be able to reliably predict very much at all.
I predict that John Healey’s and the OBR’s budget predictions will certainly be inaccurate. I find the Heisenberg METAPHOR very helpful in understanding why economists make such a poor fist of prediction.
Much to agree with
Sheesh – I need a coffee after that!
So did I!
It was created over coffee with Jacqueline.
WE have light-hearted conversations in coffee shops.
My understanding is that Hayek believed uncertainty is caused by diffusion of information across society. Bits of society know different information. What this shows is that information itself is uncertain. That the entrepreneur does not have special privilege of removing uncertainty. Isaiah Berlin also says something similar, that throughout history, history repeatedly reminds us that there is never a moment when uncertainty stops and things become known. Believing in certainty is a dangerous idea. Hayek is much too optimistic.
Agreed
Although it is certainly true that measurement disturbs the observed particle the uncertainty is deeper than that. Position and momentum (not “movement”) are conjugate variables — for the wavefunction describing the particle, position and momentum are Fourier transforms of each other. A non-zero function and it’s Fourier transform cannot both be sharply defined at the same time.
As an aside, it might be better to use the energy/time uncertainty for your application. That seems more appropriate for a description of economics 🙂
Noted