Economics and time
from David Ruccio
Time poses a real problem in economics, both mainstream and heterodox. Mainstream economists tend to eliminate time entirely from their models, while heterodox economists often invoke time as a continuum, with an uncertain future and a stable, known present and past.
However, recent discoveries in physics require us to rethink our understanding of time. In particular, according to Robert Lanza, “whether events happened in the past may not be determined until sometime in your future—and may even depend on actions that you haven’t taken yet.”
In 2002, scientists carried out an amazing experiment, which showed that particles of light “photons” knew — in advance −- what their distant twins would do in the future. They tested the communication between pairs of photons — whether to be either a wave or a particle. Researchers stretched the distance one of the photons had to take to reach its detector, so that the other photon would hit its own detector first. The photons taking this path already finished their journeys -− they either collapse into a particle or don’t before their twin encounters a scrambling device. Somehow, the particles acted on this information before it happened, and across distances instantaneously as if there was no space or time between them. They decided not to become particles before their twin ever encounterd the scrambler. It doesn’t matter how we set up the experiment. Our mind and its knowledge is the only thing that determines how they behave. Experiments consistently confirm these observer-dependent effects.
According to Lanza, what this means is that “choices you haven’t made yet might determine which of your childhood friends are still alive, or whether your dog got hit by a car yesterday.”
In terms of economics, what it means is that future economic events—policies, strategies, and theories—may determine which of the many economic possibilities in the past actually occurs. Right now, of course, we just don’t know. But we can certainly imagine a future when, under radically different economic and social conditions, the present common sense will have been changed to recognize capitalism as a long-past nightmare. Or maybe it’s already happening. . .