Science and economics need a reset and new conversations

Rethinking Science: The speed of light is the only constant in Einstein’s general theory of relativity. The measure of everything else is relative. They depend on the relationship between observers and the events they observe. Furthermore, nothing can travel faster than the speed of light. Since two particles in the dreaded phenomenon of “quantum entanglement” are so far apart that even a light signal from one cannot reach the other, the changes in them cannot be simultaneously explained in Einstein’s model. The change in the two particles appears to be “mutually generated” without any physical or digital communication between them. Einstein’s elegant mathematics of general relativity could not explain quantum entanglement. Furthermore, his own description of reality disregarded common sense. According to the mathematics of general relativity, space is curved, and time can travel backwards.

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The Nobel Prize Committee says that quantum theory has opened doors to other worlds, and it has also shaken the groundwork for how we interpret measurements. Bohr said, “Anyone who didn’t think quantum mechanics was outrageous didn’t understand what was being said.” What quantum physicists discovered was that some aspects of reality cannot be explained by ‘rational’ science. They seem to have a need for the mysterious or the mysterious. spiritual explanation. Einstein could not accept such ‘irrational’ theories. “God doesn’t play dice,” he said: there must be a mathematical explanation for everything.

Kurt Gödel’s ‘incompleteness theorem’ proved that no purely mathematical model can explain how the world outside it actually works. Gödel, perhaps the greatest mathematician of the 20th century, explained that all mathematical systems are based on basic axioms and some accepted rules of computation. Axioms are statements or propositions that are assumed to be established or self-evidently true. The model itself cannot prove these axioms. Gödel revealed how, in his attempt to achieve internal consistency, mathematical models become detached from external reality, and therefore externally invalid. They become false abstractions, more and more, being able to explain only parts of complex reality, not the whole. Thus, they are always inherently ‘imperfect’.

Incompleteness of Economics: Macro-economic modelers treat the economy as a closed system, always leading to some general equilibrium. Like Newtonian physicists, they imagine the world as a machine whose design can be changed by an external controller (an engineer or economist). Mathematical models force economists to leave unquestioned social and political forces outside their models. Therefore, their models are inherently inaccurate representations of reality.

Scientists want to understand the causal relationships between events. A world in which events are somehow related to each other, the causal relationship between them, incomprehensible to them. ‘Big data’ and regression analysis can only reveal correlations between variables, not causal relationships. Randomized control tests in microeconomics also attempt to reveal causal relationships between variables in complex systems. They are also incomplete instruments of epistemology.

Since the 20th century, economics has become the dominant ‘science’ for guiding public policy. The debate continues between ‘Keynesian economists’ and ‘Friedman economists’ – between welfareists who see the need for a “government hand” in the economy, and monetarists, who want the government to let private entrepreneurs loose and leave it all at once. To give good results for “Invisible Hand”. Both agree that an increase in GDP (GDP or the size of the economy as measured in money terms and the value of transactions in money) is essential.

The debate between welfareists and monetarists is a debate within the current paradigm of economics. His model of economy is based on the misconception that humans are ‘rational’ decision makers and are self-interested in the decisions they make. This makes mathematical modeling easier, but, as Gödel has proved, predictions from his calculations will not map to reality.

Technology and ethics in economics: Science sits between philosophy and technology. On the one hand, it would have to grapple with philosophical questions, as quantum physicists were compelled to. To that side there are also ethical questions about the purpose of his science. On the other hand is the translation of science into technology designed to make a physical impact on the world. Thus, scientists were trapped in creating the atomic bomb, which Einstein, then at Princeton University, regretted.

All powerful technologies are ‘dual use’. They can be used for human welfare, and can also be used to increase the power of their owners by preventing others from using them. Some countries control the development and use of nuclear technology. The inventor of the Internet, Vincent Cerf, laments how it has become the private property of wealthy corporations and how social media is harming human welfare while making their corporate owners very wealthy.

Change in norms cannot happen from within the establishment. It will protect its power and ideas. Who controls the ‘laws of the economic game’ determines how economies develop. The aim of economics science should be to improve the well-being of all people in all countries, not to make powerful people and powerful nations more powerful.

A new economics requires a new conversation about the purpose of economic development. Also, new ideas about how development can be more equitable and sustainable. ‘Out of the box’ thinking is essential. Scientists must step out of their models and listen to each other in order to understand complex realities together. Man has become a number in the model of economists. Economists should come out and listen to common people for whom economies have to be changed. And those who understand, practically, the realities that economists try to model.

Arun Maira is a former member of the Planning Commission.

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