Many social scientists and some humanities scholars suffer from a condition that I like to refer to as ‘physics envy’.
The term resonates with Freud’s theory of ‘penis envy’, as he applied it to girls and sometimes even to women. The use of the phrase ‘physics envy’ is appropriate whenever scholars presume that the closer their research is in its ontology, epistemology and methodology to physics the better it will be.
The idea, however, that the approaches adopted by physicists are well suited to any and all topics, including those in the humanities and social sciences, is hopelessly naïve. As a scholar whose first degree was in physics, followed by three post-graduate degrees in philosophy, and who now works in the political sociology of science and technology, you can take my word for it.
Economics and equilibrium: a serious case of ‘thermodynamics envy’?
In the case of orthodox neo-classical economics, however, the theoretical edifice derives from a particular sub-genre of the condition which, could be characterised as ‘envy of thermodynamics’. That branch of physics is crucial because it was in thermodynamics that the idea of ‘equilibrium’ first emerged as a pivotal analytical and explanatory concept.
Thermodynamics was constructed as an attempt to understand and then maximise the performance of steam engines. In Carnot’s day this was often estimated in terms of the quantity of water that could be pumped up a given height in return for a sack of coal that fuelled the machines.
Carnot tried to find a way to maximise the work done by a piston in a cylinder. He conceptualised the problem in terms of maximising the work that could be derived from a flow of heat from a boiler that supplied the steam into a condenser that was kept at a sufficiently low temperature to ensure that the water vapour returned to the liquid state. The act of condensing the steam creates a partial vacuum, allowing work to be derived from the resulting difference in pressure on alternate sides of a piston. Carnot saw heat as flowing because there was an initial condition of disequilibrium of temperature and pressure, which was transformed to a condition of equilibrium in which temperatures and pressures were equalised within a particular confined space.
But the laws of physics rarely transfer to the complex world of economics, politics and development.
Greece and China
Neo-classical models portrays prices, in ‘free markets’, as fluctuating up and down until ‘supply’ and ‘demand’ are precisely matched when a state of balanced or ‘equilibrium’ is attained and prices stabilise. In a week when the political news is dominated by the disorder over Greece and stunning price volatilities in Chinese stock markets, the concept of equilibrium seems singularly irrelevant.
The way the Greek debt crisis has unfolded demonstrates that none of the main protagonists fully understand what is happening, and none of them are really in control.
So far, actions and judgements have not been as foolish or as catastrophic as those in 1914 that led to the outbreak of what the British grotesquely referred to as The Great War, at least until 1939, but they have been frighteningly inept and unwise. All the main protagonists have been revealed as having muddled strategic goals, and tactical ineptitude has been, and remains, rife on all sides. No-one can reliably predict how their counterparts or protagonists will behave in the short-term or the long-term; to characterise the predicament as a ‘breakdown of trust’ has been little more than attempts at ‘blame avoidance’.
In relation to Chinese stock markets, in the context of an economy ‘managed’ by a regime that is desperate to remain in full control of events, and be seen to be in full control, stock market price instability, and consequent losses for large numbers of ‘aspirational’ citizens, are simply terrifying.
Authoritarian technocrats, struggling to reconcile the economic theories of Karl Marx with the political aspirations of the party leadership, cannot understand the dynamics of bubbles and crashes, and so risk looking foolish at home and abroad. In this example too, the main protagonists have muddled strategies and are tactically inept. No-one can reliably predict how key protagonists will behave. It would be surprising if Chinese commentators were not using phrases corresponding to the English expression ‘a breakdown of trust’.
Moving beyond equilibrium
In the face of such disorder in markets and politics, notions of equilibrium have little relevance or explanatory power.
They may perhaps contribute to an understanding of social, economic and ecological sustainability as a goal to which policy-makers and all humanity may strive, but to describe or explain the present or the past their relevance is at best homeopathic.
In the face of these and other crises, we need to look to the ideas about complexity and non-linearity that have informed the STEPS pathways approach, and ditch a reliance on ‘equilibrium’ to make sense of these events.
Erik Millstone is a Professor of Science Policy at SPRU and a member of the STEPS Centre.
Image: Papa Freud, conflicted, with cigar by Carla216 on Flickr (cc-by-nd)