Although I’m reasonably smart, I don’t have a high enough IQ to understand things like quantum mechanics. At least I didn’t until I came across David Deutsch’s explanation; it’s all about fungibility. Being an economist, fungible is a concept that I do understand:
It is a rather counter-intuitive fact that if objects are merely identical (in the sense of being exact copies), and obey deterministic laws that make no distinction between them, then they can never become different; but fungible objects, which on the face of it are even more alike, can. This is the first of those weird properties of fungibility that Leibniz never thought of, and which I consider to be at the heart of the phenomena of quantum physics.
Here is another. Suppose that your bank account contains a hundred dollars and you have instructed your bank to transfer one dollar from this account to the tax authority on a specified date in the future. So the bank’s computer now contains a deterministic rule to that effect. Suppose that you have done this because the dollar already belongs to the tax authority. . . . Since the dollars in the account are fungible, there is no such thing as which one belongs to the tax authority and which one belongs to you. So we now have a situation in which a collection of objects, though fungible, do not all have the same owner! Everyday language struggles to describe this situation: each dollar in the account shares literally all its attributes with the others, yet it is not the case that all of them have the same owner.
. . .
The term ‘uncertainty principle’ is misleading. Let me stress that it has nothing to do with uncertainty or any other distressing psychological sensations that the pioneers of quantum physics might have felt. When an electron has more than one speed or more than one position, that has nothing to do with anyone being uncertain what the speed is, any more than anyone is ‘uncertain’ which dollar in their bank account belongs to the tax authority. The diversity of attributes in both cases is a physical fact, independent of what anyone knows or feels.
Nor by the way, is the uncertainty principle a ‘principle’, for that suggests an independent postulate that could logically be dropped or replaced to obtain a different theory. In fact one could no more drop it from quantum theory than one could omit eclipses from astronomy. (From the multiverse chapter in “The Beginning of Infinity.)
This blew my mind, and so I decided to check with Eliezer Yudkowsky, who most definitely does have a high enough IQ to understand QM:
So let me state then, very clearly, on behalf of any and all physicists out there who dare not say it themselves: Many-worlds wins outright given our current state of evidence. There is no more reason to postulate a single Earth, than there is to postulate that two colliding top quarks would decay in a way that violates conservation of energy. It takes more than an unknown fundamental law; it takes magic.
The debate should already be over. It should have been over fifty years ago. The state of evidence is too lopsided to justify further argument. There is no balance in this issue. There is no rational controversy to teach. The laws of probability theory are laws, not suggestions; there is no flexibility in the best guess given this evidence. Our children will look back at the fact that we were STILL ARGUING about this in the early 21st-century, and correctly deduce that we were nuts.
We have embarrassed our Earth long enough by failing to see the obvious. So for the honor of my Earth, I write as if the existence of many-worlds were an established fact, because it is. The only question now is how long it will take for the people of this world to update.
Ha! So most of those arrogant physical scientists who make fun of how “unscientific” we social scientists are, don’t even follow the scientific method in the supposed “queen of the sciences”—physics. Modern physicists are no better than the Pope who insisted that Galileo could use his heliocentric theory, but only if he admitted it was merely for prediction, not as a description of “reality.” “Hey Galileo; shut up and calculate.” Pathetic.
And it’s not just the physicists; how often have you heard some younger New Keynesian, or New Monetarist, or New Classical-type prattle on about how “real economists” use mathematical models (preferably DSGE), and that we followers of the old Chicago School (i.e. Milton Friedman) weren’t “serious scientists.” I can’t wait to tell them what “serious science” says about reality. Here’s Deutsch:
All fiction that does not violate the laws of physics is fact.
So there are universes where Market Monetarism is true. Take that you science fascists!
(Unfortunately that also means there are universes where MMT is true. However I’d wager they are of googleplex orders of magnitude smaller “measure.”)
It’s also good to find out that the multiverse is deterministic. When I was young I argued with the first guy who told me that QM implied a random universe. It made no sense to me. OK, our universe is random, but the multiverse isn’t. That’s what I meant.
Now let’s try to relate this stuff to NGDP. Here’s my analogy. If there is a negative NGDP shock then employment falls in the short run. But if the NGDP shock is quickly reversed then our universe joins up again with the universe that did not have the negative NGDP shock. (Imagine the negative shock only occurs in one of the two universes, because Ben Bernanke’s mind is put into a Schrodinger cat-type experiment, where a particle’s behavior determines whether his mind will lose all memory of the need for Rooseveltian Resolve.)
Unfortunately, the NGDP shock may become “entangled” with the other parts of the economy, which could lead to “decoherence.” I can think of two types of entanglement:
1. The negative NGDP shock leads to lower nominal wages before NGDP is restored to the old path. In that case restoring NGDP pushes employment above the natural rate.
2. More likely the negative NGDP shock leads to bad supply-side policies, such as extended UI benefits. When NGDP returns to normal, employment remains below the natural rate.
Any other applications of QM to macro?
PS. If our students can’t understand that money is fungible, how the hell are they going to understand that they themselves are fungible!
PPS. If you think I’m being modest about not having a high IQ, then consider that even after reading Deutsch and Yudkowsky, I still find it hard to believe there is enough room for all these universes.
PPPS. My rant against economists’ obsession with models reminds me of this recent Nick Rowe post:
If the real world really were as simple as my simple model, then price controls really would be a good thing, in both the short and long run. But the real world is much more complicated than my ability to model it, so I think that price controls will be a bad thing, at least eventually. But I can’t model it, because it’s too complicated for me to model.
I think that it is thoughts like this that drive Austrian economists to distraction. I sympathise. I think they are right. The, um, medium of modelling biases the message.
Love that last sentence.
PPPPS. Don’t believe anything is possible? Read this.