During the inflationary epoch (10^-36 to 10^-32 seconds) of the Big Bang, the separation of the strong nuclear force triggered a rapid cosmic inflation (yeah, not the economic kind). During a tiny fraction of a second the universe expanded (by a factor of 10^26) to the size of a grapefruit–a traditional breakfast meal.
Many economists have drawn useful parallels between their field and the physical sciences. The comparison is illustrative, especially considering that many of the ‘social sciences’ find their origins in the Enlightenment and subsequent development of the ‘hard sciences.’
Irving Fisher had this to say about the connection:
Rational and empirical laws in economics are thus analogous to rational and empirical laws of physics or astronomy. Just as we may consider the actual behavior of the tides as a composite result of the rational Newtonian law of attraction of the moon and the empirical disturbances of continents, islands, inlets, and so forth, so we may consider the actual behavior of the rates of interest in New York City as a composite of the rational laws of our second approximation and the empirical disturbances of Federal Reserve policy together with numberless other institutional, historical, legal, and practical factors.
—The Theory of Interest, 1930
Yes, Fisher can be…wordy. But, when you break down the analogy, he is practically writing poetry. The moon shapes the tides, and the tides shape the land.
Erosion. Change over time. Beautiful imagery.
Fisher then uses this imagery to communicate how interest rates are similarly shaped by factors such as Federal Reserve policy, institutions, historical influences, legal systems, and “practical factors” (such as: “Do I want to buy a home in this economic climate?”). Like I said, poetry.
However, some caution here, the comparison has its limitations. Hard sciences, such as physics, involve relatively constant forces, like gravity. Economics has to contend with human behavior, which is not always as “rational” as Fisher seems to think.
Why am I discussing grapefruit? Well, I love breakfast foods; especially fruit.
But, more to the point: just as the universe exploded from the size of a grapefruit and into its sprawling infinite grandeur, the same may be said about human knowledge. Each day, we are learning more about the physical laws that guide us, and the social laws.
However, in order to gain new knowledge, we must first destroy–or explode–old systems of thought. I first came across the phrase “exploded systems” in Mary Shelley’s Frankenstein (in reference to alchemy), and the phrase has stuck with me ever since.
I like to contemplate the dynamics of knowledge, and I am hoping that you do too. Therefore, I am beginning a series that explores the explosion of the grapefruit universe and the dynamic change in our understanding of the economy.
Here are some trigger words for possible topics that are floating around in my head (in no particular order):
- alchemy and fiat money
- Malthusian theory of population growth
- Ricardian and Marxian labor theory of value
- the water-diamond paradox,
- utopian societies (such as New Harmony)
- Schumpeter and creative destruction (of course)
Etcetera. If you have any suggestions or thoughts, feel free to contact me (contact form on the ‘About’ menu page). I look forward to expanding upon any of these topics. I will have to track down plenty of gorgeous grapefruit photos.
- The Theory of Interest by Irving Fisher. Provided by: The Library of Economics and Liberty
- Frankenstein by Mary Shelley, a Librivox recording, or a free Project Gutenberg text
- PBS, NOVA has a text timeline of the Big Bang
- Interactive Evolution Timeline, beginning with the Big Bang: I have to warn you, this timeline has A LOT going on, plenty of animation. Still, pretty cool and worth sharing.