Tuesday, August 27, 2013

Five universal laws for economics

Physicists believe that social sciences can only be described as true sciences if on can figure out some laws that always apply, without exceptions, and if there some invariant constants that would be good, too. Social scientists do not believe this is the right approach, foremost as one has to deal with individuals and societies that make choices.

James Wayne realizes that Physics lacks one ingredient that is essential in social sciences: choice. Fundamentally, I am not convinced that we actually choose, but that it only looks like it at the level of abstraction that we can master at this point and for the foreseeable future. Indeed, our decisions are the results of complex chemical reactions in our brains under the influence of complex environments and likely some randomness. But we have found a simpler abstraction with the framework of choices under constraints, and that is certainly missing in Physics.

Now Wayne adds the concept of choice to Physics, and then determines five new Physics laws: 1) the outcome of any future event is indeterministic; 2) there is a joint probability of future events that helps predicting them; 3) actions can be taken at any time to change this distribution; 4) we cannot retain complete information about past histories; 5) eventually, some equilibrium is reached. He can then use these new laws to re-understand natural and social sciences under a unified framework. All this in only 8 pages of text and not a single equation. True science at work.


Anonymous said...

Seems like Mr. Wayne has added what the Global Warming crowd discovered years ago.
Don't like the data, then add choice to the data. Now the data is choice. We used choice data, sounds good doesn't it?
Or, when convenient or necessary, just choose the data needed to support your claim.
Then call the NSA and have them scrubbed your historic predictions that failed to materialize. That way, no one will know you are, or once were, an idiot.

Anonymous said...

In the global warming modeling, there should be no doubt that policy choices made by China,India, US, and others will have a profound impact on the state of the earth atmosphere hundreds of years from now. Humanity is burning through the free energy savings made over hundreds of million years by the earth in just a short few hundred years. Adding indeterministic human choices into cold physical modeling is very interesting. Maybe Wayne's 5 laws could help!