RSS

Econophysics first step towards Psychohistory?

Via Dissecting Leftism I came across this article called 'Econophysics' points way to fair salaries in free market':

A Purdue University researcher has used "econophysics" to show that under ideal circumstances free markets promote fair salaries for workers and do not support CEO compensation practices common today.
"It is generally believed that the free market cares only about efficiency and not fairness. However, my theory shows that even though companies focus primarily on making profits and individuals are only looking out for themselves, the collective self-organizing free market dynamics, under ideal conditions, leads to fairness as an emergent property," said Venkat Venkatasubramanian, a professor of chemical engineering. "In reality, the self-correcting free market mechanisms have broken down for CEOs and other top executives in the market, but they seem to be working fine for the remaining 95 percent of employees."
In the new work, the researcher has determined that fairness is integral to a normally functioning free market economy. Findings are detailed in a research paper that appeared in June in the online journal Entropy and is available at http://www.mdpi.com/1099-4300/12/6/1514/
This is pretty interesting, and provides hope that our society will finally begin making progress on psychohistory. Pshychohistory, invented by science fiction author Isaac Asimov and a key point to The Foundation Series, is a concept of mathematical sociology analogous to mathematical physics that uses the law of mass action so that it can predict the future, but only on a large scale; it is error-prone on a small scale. It works on the principle that the behaviour of a mass of people is predictable if the quantity of this mass is very large (equal to the population of the galaxy, which has a population of quadrillions of humans, inhabiting millions of star systems). The larger the number, the more predictable is the future. Using pshychohistory, you can predict the future.

This scientist who is working on econophysics could be an early Hari Seldon.

UPDATE: To elaborate on my thoughts on the fictional theory of pshychohistory, I do think there is a plan out there- God's plan- and I do think that some of God's plan is revealed to us through the Bible and his unseen hand (the free market). I think that the field of economics is probably the closest to guessing at some of it, and thus I find it kind of cool whenever anyone works on this.

Too many people are focusing on the 'fairness for CEO's' aspect of this guy's equation, but the more important point is that the free market is working. Probably the failures with fairness with CEO compensation are the result of government policies.

  • Digg
  • Del.icio.us
  • StumbleUpon
  • Reddit
  • RSS

0 komentar:

Posting Komentar