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Economics is mathematically mired by a lack of conserved quantities. Those are global invariants that (particularly in physics) that allow to desume facts about
by qubex 8y ago
Economics is mathematically mired by a lack of conserved quantities. Those are global invariants that (particularly in physics) that allow to desume facts about the final configuration of a system based only on the initial configuration (conservation of mass, of energy, of linear or angular momentum... each of which is a handy approximation to solve various problems and that surprisingly depend on the theories one is applying).
In economics even something as fundamental as wealth is not conserved (that's the whole wonderment of nonzero-sum games and interactions in general). That means that predictions are very sensitive to the dynamics one presumes to apply, and the practitioner has no amazing bookkeeping sleights-of-hand to resort to to verify that which one is predicting is defensible.
- Nasrudith 8y agoNot conserving wealth is fundamentally correct in my opinion but you need to keep in mind forms of wealth - it is utility not just raw goods. It also fundamentally isn't universal. As long as there is more useful work to do we can create more wealth. We are thousands of times wealthier than ancient goat herders and yet do we have ten thousand goats each? No. Wealth has many forms. A full course of antibiotics to treat Hansen's disease would be incredibly valueable miracle cure in medieval times and anyone capable of producing them effectively a miracle worker. A smartphone's in the 1940s is effectively alien nanotech to them.
- qubex 8y agoI agree absolutely. However, utility is typically expressed as a nonlinear function of wealth, and therefore aggregate utility is even less constrained (further from being even approximately conserved) than wealth itself.