Background 

Having 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 moving on to further ideas. The result is a new series, called The Quantum Essays, of which the first is below. 

This first essay grew out of a suggestion with my wife, but other essays to come have also been written in reaction to comments made on this blog. I hope they are helpful.

Observing and Engaging

One of the most well-known observations drawn from quantum physics is that every action has a reaction. To put this another way, the simple act of observing something changes it, inevitably, and because this is a quantum idea where matrix, and not standard, algebra applies, that change is always irreversible. Observation has serious consequences, in itself, in that case. That insight should be at the heart of economics, too, but it isn't.

This thought came out of another discussion on quantum-related issues with my wife, who set me off down this trail in the first place. What we began talking about was the difference between the so-called observer in society and the person who acknowledges that they are, inevitably, engaged with it, and what the consequence of these supposedly different mindsets might be.

For decades, economics has told itself a comforting story. Most economists (and, come to that, most accountants in their role as applied narrators of stories within the economy) like to claim that they stand outside the system they observe. They suggest that they can measure, model, and forecast without interfering in or with what they describe. They can, in other words, observe the economy without changing it.

This is a myth. And like all myths, it serves a purpose: it hides the fact that economics is always political, always engaged, and always participatory, whether economists like it or not.

When economists “observe” the economy, they pretend to collapse a world of possibilities into a single measurable state. Statistics, forecasts, and models all do this. They narrow the frame. They strip out uncertainty. They pretend to reveal a fixed reality. But they do so by excluding the very things that make the economy what it really is: human choice, expectation, imagination, and power.

Engagement is something else altogether. Governments do not simply observe. A Budget reshapes reality. The moment a Chancellor stands up and announces tax rises or spending cuts, expectations shift, confidence rises or falls, and investment decisions are made or unmade. The future bends under the weight of the announcement.

Central banks do the same: raising interest rates does not neutrally “record” a reaction to inflation, either real or imagined; it redistributes wealth, it changes mortgage costs, and it tilts the balance between creditors and debtors.

In both cases, the reactions are also in the form quantum mechanics would predict: as matrix algebra would suggest, the responses to these announcements are themselves irreversible.

Even economists themselves cannot escape this. A forecast does not just describe. It tells a story about the future that people act upon. A gloomy prediction can deepen a recession. A rosy one can inflate a bubble. The very act of producing the numbers changes what those numbers mean.

This is a suggestion at the very heart of my perception of quantum economics. The economy is not a machine of fixed gears and levers. It is a living, dynamic system where observation is never neutral, and engagement is inescapable. Every statistic, every model, every policy announcement feeds back into the system and alters the probabilities of what comes next.

And here is the political sting: neoliberalism depends on denying this. It depends on presenting economics as a neutral science, detached and objective, and always above the fray of politics. But neutrality in economics is a lie. To claim to be a mere observer is to pretend innocence while exercising enormous influence. To engage while denying engagement is the oldest trick of power.

The truth is that economics cannot be about observation alone. It must be about engagement, and mostly especially about conscious, accountable, and deliberate engagement. That is how we shape the economy, whether we admit it or not. The only choice is whether we do so openly and for the common good, or secretly and for the benefit of the few.

This is the challenge quantum economics faces the neoliberal with: will they acknowledge that their supposed “neutral” observations are anything but that, and their supposed “objectivity” is a complete pretence, and will they instead admit that all that they do is part of a political agenda of oppression?

That is the quantum truth of political economy that is revealed by revealing the truth that the neutral observer does not exist, and it is time that economics (and accounting) faced that fact.

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