Schroedinger’s Economics

The tangle of quantum physics is a pattern of thought which includes observation as a defining variable in the outcome.  In 1935 physicist Erwin Schroedinger posed a thought experiment in which he brought the quantum principle of entanglement into the macro world.  Schroedinger started with a cat was put in a sealed box with a radioactive particle and a bottle of poisonous gas.  If the particle decays, the poison is released.  If not, the poison is not released.

Here’s the weird part.  To the universe outside the box the cat is either dead or alive because we don’t know.  And because he is either dead or alive, he is both dead and alive at the same time until someone opens the box and observes the state of the cat.  Among other things, this experiment makes us think about the divergence of timelines.  The life of the cat and, I suppose, the cat owner, are traveling along in nice straight parallel lines.  Suddenly the cat is scooped up by a crazed physicist and shoved in a box.  The cat owner is insanely angry and beating on the old professor, crying and yelling about how she wants her cat back.  Schroedinger holds her by the shoulders and says, “We must wait a few days”.

So the two timelines are still parallel, owner’s outside the box, cat’s inside the box.  Finally Schroedinger goes to the box.

The owner asks, “Is my cat dead?”

Schroedinger answers, “Yes.”

The owner says, “Are you sure?”

Schroedinger says, “No.”

She gives him the stink eye.  “What are you talking about you crazy, catnapping maniac?”

Schroedinger says to her, “Your cat is dead.  Your cat is alive.  Your cat is both until I open that box.  Once observed, the probabilities collapse.  Then your cat is either dead or alive.”

The cat owner shoots Schroedinger and opens the box.

This is where those timelines diverge.  If the cat is alive, their timelines continue on in tandem until the cat wanders off or its owner is struck by lightning.  If the cat is dead, only one timeline continues on, the owner, without the cat.  So the owner’s timeline, when she opens the box, splits into two possibilites: dead cat, live cat.

How does this appy to economics, you ask?  Well here it is.  There are two different views of investments.  There is the classical investor’s physics paradigm where when the stock market falls, he loses money and it if rises he makes money.  This is a short term view and for long term investment, not really indicative of what the outcome will be.

On the other hand, the quantum view of investments is that when the market goes down, she has not lost money.  When the market goes up, she has not gained money.  In the quantum field of thought, only when it is observed, or in this case withdrawn, can the value be assessed.  So in the quantum view of economics, money can go through twists, turns and permutations, but is not measured until it is called back to it’s point of origin.   Assesment is what makes assests have value.

So, if you are like me this is completely confusing, but I’ve tried to muddle through it.  The main points have to do with observation causing collapse of alternative outcomes and divergent timelines that exist immediately prior to that collapse.  And, of course, how to use these insights to observe investments, especially in the stock market.

And finally, keep your cat at home.

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About Perry Tenitiss

I write on all sorts of subjects at various sites. Check the list below and enjoy!

Posted on August 21, 2011, in banking, economics, economics, economy, magical thinking, politics and tagged , , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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