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 third is below. Previous posts are listed at the end of the post.
This idea came out of a conversation with my wife. We were talking about my series on quantum economics when she asked whether equilibrium was really ever possible in life. The more I thought about it, the more I realised she was right: equilibrium may only be possible in death.
Physics helps explain why. All systems are subject to entropy, which is the tendency for disorder to increase over time. In a closed system — one sealed off from external sources of energy — entropy always wins. Energy dissipates, order dissolves, and the system runs down. Eventually, it reaches a state where nothing more can happen, no new work can be done, and no new order can be created. That is equilibrium. But it is also death.
Life tells a different story. Living systems survive precisely because they are not closed. They are open. They constantly import energy and resources from outside themselves. They reorganise matter, build structure, and create enough order to resist the disorder that entropy would otherwise impose. In doing so they hold off death, at least for a time. But the struggle never ends. Survival depends on continually reducing disorder to a level that allows growth and renewal. Without this effort, life collapses back into equilibrium — which is another way of saying, into death.
What does this mean for economics? Economists borrowed the concept of equilibrium from physics, but they misapplied it. In the neoclassical tradition, markets are said to tend naturally toward balance. Supply and demand meet. Prices clear. The economy, like a machine, settles into rest. But this is a fantasy based on the assumption that economies are closed systems.
Real economies are not closed. They are living, open systems. They survive only because they bring in energy from outside. Human labour is one source of this energy: the application of time, effort, and creativity to transform the world. Natural resources and ecological flows are another. Ideas, relationships, and cooperation all feed into the same process. It is this continual input of new energy and new order that makes economic life possible.
The reality, then, is that economies can never be in equilibrium. They are always in motion, always in flux, always engaged in the same struggle with entropy that life itself faces. They are sustained by imbalance and by the constant management of disorder. And when they stop moving — when the flows dry up, or when the openness is shut down — they collapse.
Quantum physics sharpens this point. At the smallest scale, what looks stable is never still. A so-called stable atom is a dance of shifting probabilities. A supposedly solid state is a pulsing of energy fields. Stability in this world does not mean stillness. It means dynamic balance, sustained only through continuous change. That is why quantum theory is such a useful metaphor for economics. From a distance, the economy may look stable, but up close it is always a swirl of transactions, exchanges, conflicts, and innovations.
The neoclassical dream of equilibrium, then, is not the dream of a healthy economy. It is the dream of a dead one. Equilibrium means the absence of flows, the cessation of work, the collapse of openness. It is not a goal to be pursued but a condition to be feared.
Yet our economic policy is too often built on the false assumption that equilibrium should be the objective. Think of the constant political demand for “balanced budgets” or “fiscal rules” that tie government hands. These are attempts to impose closure on an open system. They imagine that the economy should be like a household, keeping its books tidy, rather than like a living organism that must remain open in order to survive. By suppressing flows of energy, cutting back spending, and reducing investment, such policies do not create health: they accelerate the move toward the stillness of death.
My wife's question was right, then. Equilibrium is not a state that can ever be achieved in life. The struggle with entropy is perpetual. Our task is not to eliminate disorder but to keep it manageable — to import enough new energy, to remain open enough, to reduce disorder enough that life and growth can continue.
For economies, this means valuing disequilibrium rather than fearing it. Disequilibrium is the condition of creativity, of adaptation, of survival. It is the sign that the system is alive. Our real challenge is to manage it well: to channel energy into useful work, to sustain openness, and to prevent entropy from overwhelming us.
Equilibrium, finally, belongs only to death. Life — and economics — depend on our refusal ever to reach it.
Previous posts
- The Quantum Economics series (this link opens a tab with them all in it
- The Quantum Essays: Observing and Engaging
- The Quantum Essays: Quantum MMT: The wave function of sovereign spending
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I’ve been finding dementia economics interesting as it invariably ends in death. So sometimes societies crash and burn, they don’t all go down together as it’s an individual progression, there isn’t a global government. By way of history, most of the population of the world in 2007-08 live in countries that didn’t have a technical recession. So it’s not global. But the reasons why individual countries crash has comparators in how humans with dementia crash and ultimately die as will happen to us all. The reasons are never clear and the causes can be from within due to corruption or bad policy or from outside such as invasion.
Recessions can be characterised by many initiators, a banking crash, a debt crisis, a currency crash, a rampant black market leading to a tax revenue crash and inflationary spiral, even a straightforward bubble in anything from tulips to property. And they can be made worse by the wrong intervention or a la Warren Harding dealt with quickly by the right kind of action.
Similarly with dementia we don’t really know the precise causes, genetics, lifestyle factors, prions, a virus whatever. We do know some things that can work against it, fish in the diet, exercise, moderate alcohol consumption and luck, but it’s not a predictive game at the individual or micro level. There is just so much uncertainty and all you can do is care and love the one so afflicted.
The analogies go on and on.
If you want to call Dementia Economics your own, you’re welcome to the label. There’s no IP around it.
We know much more about dementia than is acknowledged.
For example, it is linked to excess sugar and so ultra processed food and a carbohydrate based diet. It is also potentially linked to excess blue light. The commonality is insulin resistance in both cases. Some of these links have been known for a long time, as they have also been known with cancer, but there is no money for the medical pharmaceutical sector in them so they are not pursued. After all, what is the benefit of finding answers to those who live as consequence of the questions supposedly being unsolved? .
Any tendency towards equilibrium will indeed be constrained by real world entropy and chaos. Something related that often comes up in ideological economics is equality. That is certainly utterly unattainable due to the dynamic nature of human activity you have discussed here. Much better to make the rhetoric about fairness than equality.
I would add to this by saying that many fail to recognise that survival depends upon us taking responsibility for each other yet this is built into nature. Here’s but two examples:-
https://pmc.ncbi.nlm.nih.gov/articles/PMC6363370/pdf/rmmj-10-1-e0005.pdf
https://www.researchgate.net/publication/247759661_Evolution_of_Parental_Caregiving
That failure to recognise our interdependency results in many pretending that market capitalism takes full responsibility for others when it clearly doesn’t and only works because at the best of times democratically elected governments correct its irresponsibility. I say “best of times” because rich capitalists aided by politician gofers/grifters try to subvert governments acting responsibly. For example, currently in the UK we have political churn amongst voters. So much so it’s almost become humorous and who shall we vote has become should it be ConTrick (we’re only in it for the money), LieAlot (we’re only in it for the money two), Conform (or else), Liberation (for what), Green (behind the ears), Your Party (or mine), and on and on.
James K Galbraith and Jing Chen published a book at the beginning of this year entitled “Entropy Economics: The Living Basis of Value and Production.” It adds to your argument although their conclusion is somewhat pessimistic.
I am reading it, and will then comment. But, their field is too limited. They needed to consider social entropy too.
Your analysis and comparisons seem to me to be broader in scope and I suggest is more useful than Galbraith’s, particularly in developing an understanding that has the look and feel that there are firm foundations to economics. But whichever approach you take, it’s better to have knowledge of physics and to be able to apply it.
I just wonder, ‘do any commentators have the knowledge and skills to use these ideas effectively?’
Thanks for developing these ideas.
Let’s be clear, if I can move away from the physics that will not be a problem. All of this is just a thought experiment. That is how change happens. And that is why, if I sound annoyed with those who say I should not be doing this, I am. First, I am old enough to be bored with being patronised. Second, I will not be told I cannot think ‘outside the box’. Third, I know I can.
That’s another “WOW!” post absolutely validating your risky “quantum economics” venture.
KUTGW!
Thanks
This sort of post really isn’t doing your credibility any favours. It is painfully obvious that you have no understanding of the basic principles of physics and ChatGPT appears to be encouraging you to make a fool of yourself.
Please return to what you do best, which is offering clear explanations of complex economic theory that are understandable by those with no prior expertise in the field.
Don’t bother replying to this post, I won’t be opening any more of these quantum nonsense threads.
Very politely, stop showing yourself up as someone unable to explore ideas.
If you don’t like what I am doing in developing new narratives (and re quantum, I am amongst everyone else in not fully understanding it, whilst the Newtonian logic here is, I think perfectly ok) then you clearly don’t understand that existing economic theory has no explanation – which is why I am having to look elsewhere, just as quantum physicists are having to do so on locality, time and gravity.
An apology will be accepted, or I suggest you don’t try again, but this irritating and time wasting crap is stuff I don’t need to deal with. I have better things to think about than your incomprehension of narrative development and thought exercises.
Isn’t there a point with humans animals, in fact for all living things, where there is life, but the process of dieing is too advanced for recovery to be possible? So it is with the economy, I suggest. As our economy changes, some avenues for advancement will close. If we are lucky (or have the right plans), new and better options will appear, perhaps too many, so choices have to be made that will delineate our possible futures.
I believe we are in that phase with the Starmer/Reeves rampage. I clearly have a very different world view from that of the government, and probably that would apply to large parts of the current opposition. Can the changes being wrought now be undone? I pray they can be, but fear it will be impossible as capacity and capability will be too limited.
I am persuaded to disagree by my wife, a GP who retired because of cancer and the disastrous treatment she had (which she has now survived for 12 years) that a great deal conventionally accepted wisdom on many end of life issues is just wrong. She has been looking at stage 4 cancer – the supposed ‘no hope’ stage. The evidence is if nothing is changed by those with this description then the diagnosis runs its course. But if they do change – tackling the conditions that created cancer (excess sugar, ultra processed food, lack of natural light and more, all creating conditions that permit the growth of cancer) then many live a long time. The focus then is on change. Economies can also only survive if they change. Nothing else will do.
Well physicists borrowed the idea of equilibrium from philosophy. Physicists don’t own the definition or prevent us from exploring ideas with it as a metaphor. An equilibrium is a state of rest which all matter moves towards. Death is that. In the long run we are dead. We enter a state that is unmoved and timeless. This is a deeply Aristotelian thought.
But it is not our chosen destination then, surely?
I hope that in expressing myself on this topic, I make myself understood.
My understanding is that it is the death of money through its destruction by taxation, saving etc., that enables us to control the economy (stuff like inflation).. We must destroy what has been made in a continuous flow process.
But also, control is not a final process – it too is a continuous process. Neo-liberalism’s idea of a perfect state is a load of bollocks. Their version is static – as Steve Keen has pointed out – the fact that it is so static betrays why they like it as so because it works for them really well. Trying to intervene alters the prejudicial flows they already enjoy.
The only Equilibrium is control through adjustment. The word ‘Equilibrium’ in actual fact is completely the wrong word to use when controlling something so dynamic. That cannot be achieved. It is not a realistic goal at all.
‘Control’ does not have to mean absolute control BTW – just being there and reacting, adjusting and helping the system deliver and receive life giving energy through flows through its networks – rich and poor people, say.
Nature seems to be about fission – expending energy – to make the universe work. Creating and dissipating energy. Human beings are subject to the same cycle of creation / use / depletion, destruction (death). Deal with it. People like Hobbes and Beckett have plenty to say on that.
Neo-liberal thinking about taxation which destroys money and their pleonexious attitude to hoarding money (disrupting flows of money energy) is literally unnatural and against the law of nature. This attitude that the rules of nature do not apply to man-made stuff is man assuming the status of a God.
That is a huge mistake. Not only is it hubris, it is exceptional thinking and not aligned with the universe. It is the Neo-liberals that ignore reality and will not learn from nature. Neo-liberalism is the science of the un-natural.
I think that you and your wife got very close to something fundamental in that discussion. This is my reaction to it, for good or bad. It made me think as you can see.
Thanks PSR
I wanted to learn about the National and international economies but was taught neoliberal economics at Wolverhampton Polytechnic in 1970-1973.
I still remember our economics lecturer who was unable to even discuss Keynesian ideas in the early 1970s. I didn’t have any previous understanding or knowledge of economics but I came across Keynes through another lecturer. Keynes’ ideas were regarded as radical economics. So the compromise was that neoliberalism was the correct narrative but “externalities” like the environment and poverty could be considered by means of some type of Keynesian values.
I remember one of the guys working for a major, national and international company tried to discuss “realities of working life” with the neoliberal lecturer but got so frustrated that he left the course in the first year. It was a five year part-time degree for mature students.
Thanks
Sorry – some thoughts about death (I ran out of words on the previous post).
To me, the perfect contemporary state in human terms is death. Why? Because nothing is happening. There is nothing going wrong in order to contrast with anything going right, to know that something is wrong or right. So, there being no determination being able to be made, that can count as some form of perfection or ‘Equilibrium’.
Death is a form of stasis in nature – but we know from physics that the universe is certainly not static and economics is the same.
Neo-liberalism is a bit like some of the religions in that it is a bit of death cult but pretends instead that perfection exists in the here and now, not in some afterlife (Equilibrium).
As we so often hear, life is messy. The universe is also messy. All life on this planet emerged from some sort of messy primordial soup. Whether or not God made that soup is not the question here really. It’s the soup that matters.
Sod ‘ Equilibrium ‘ or death as perfection. We need to revise our standards and definitions. ‘Perfection’ is messy; perfection is embracing the reality of the dynamics of life; perfection is giving a shit; perfection is having a go and intervening; perfection is in the moment of many continuous moments just as much as death is but a moment that will also need to be managed like all other moments; perfection is energy as a moment of many moments. I think Jesus showed us a more perfect way living in the acknowledgment of others and contexts that he advocated. Our lives are a collection of moments, colliding with the other lives of moments and co-existing fairly. That is what a really perfect life should be about.
Maybe death is a fault within human consciousness because we only know one way to interpret the world – as a ‘human being’. We have no idea what an ant or stone thinks. Or a photon for that matter.
Yes perfection is ‘being there’, the here and now, not dreaming of death (which is just moment of many moments) and being involved in the mess and trying to manage it decently. Neo-liberalism/rampant individualism simply launders the messiness of life to protect greed. Nothing more.
Thanks
To anyone with an open mind, once contemplated for a few moments the concept of equilibrium is ridiculous
To swallow a convenient 2 line intersection as ‘the answer’ when contrasted with other area of human interrogation (physics, chemistry etc) is ludicrous. And to then suggest that somehow this fiction is ‘necessarily’ the optimum outcome is arrogant in the extreme
Putting that aside, might supporters of equilibrium respond that the market is constant shifting (see the splendour of UHF trading) and therefore equilibrium exists but at different price/volume points and then a new equilibrium exists in the next split second and so on?
Asking in the spirit of understanding
Equilibrium is supposedly stable – so what you are describing is anything but that. But thwe problem is not with what you are describing: the problem is with the idea of equilibrium.
I went to a morning of Buddhist meditation this weekend. According to Buddhist philosophy the key conceptual error humans have is the delusion that we are permanent. That we have a permanent self we must maintain
The teacher explained that according to this tradition that the people at the start the class were not the same people at then end in the sense that our minds and bodies are changing moment to moment and that we are in a state of constant change – of instantaneous death and creation . This struck me as similar to the adage that you can’t step into the same river twice.
Many of our mental ’delusions’ as she labelled them arise due to the faulty belief in permanence of the self. Anger, guilt, shame, attachment etc
This got me musing on the concept of economic equilibrium which holds exactly that. A a permanence, a ‘correctness’, a resting, enduring natural state
This doesn’t exist in life and leads to all sorts of economic delusions
Just like the foundational delusion of the permanence of the self it strikes me that the belief in equilibrium is the foundational delusion of mainstream economics
I always thought economics was infinitely more complex than economists would ever concede. The ‘ceteris paribus'(all other things remaining the same) analysis of dependent variables was invalid simply because it isn’t true. Everything is in a constant state of flux and we can never be really sure why, for instance, exchange rates move in a particular direction on any given day or hour.
I’ve been reading the quantum economics posts, without really grasping most of it, but I’m sure you are in the right area of study.
It comes down to degrees of probability as to what might happen to various indicators economists use to describe events and make predictions. Nothing is certain except death and taxes, as someone once said, Only with death, will there be certainty(or equilibrium).
Thanks
“Non-equilibrium” is a case where govt economics and household economics have a lot in common. A stereotypical household –2 adults, children — is constantly changing within the space defined by its constraints — money being one but not the only constraint. There must be change from the pre-child period, through babies, children, school, teenage, children moving out — and success here depends on constant re-balancing. The constraints also change with time. So with government — here the constraints don’t include money as such, but various forms of resources. And there can’t be a static state of equilibrium — resources are constantly, and unpredictably, changing, and the challenge for a govt is to keep a precarious balance according to their principles. One would hope their principles are moral ones with regard to people and the environment, as Richard has often expressed here. But govts should dance, not lumber.
Great last line. I like it.
One interesting question to tackle is does the human use of money negate the possibility of equilibrium. Here’s the Google AI argument for this:-
“Some MMT proponents say taxation creates unemployment by forcing people to seek work to earn the government’s currency for tax obligations, which can lead to unemployment if the government doesn’t spend enough to absorb those seeking work after taxation has withdrawn spending power from the economy. In this view, taxation’s primary role is not revenue generation but rather to create demand for the currency and manage aggregate demand to prevent inflation, by acting as a “tax credit” that the government uses to bring people into the workforce and facilitate its spending.”
Clearly declaring a black hole in the government finances does lead to a reduction in government spending on goods and services what we now call an austerity policy.
I be never bought that argument though. It is utterly illogical.
It’s essentially a Goldilocks argument is it not? Too little taxation drainage suggests the government isn’t investing sufficiently to optimise demand and too much taxation drainage that it’s killing demand.
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