Thermodynamics, Emergence, Scale Effects
thermodynamics, emergence, scale effects, microeconomics, macroeconomics, individual debt, government debt, individual budget, government budget, economies of scale, top-down effect, irreducibility, Noether's theorem
From the wikipedia article on Emergence:
the laws of thermodynamics are remarkably simple, even if the laws which govern the interactions between component particles are complex. The term emergence in physics is thus used not to signify complexity, but rather to distinguish which laws and concepts apply to macroscopic scales, and which ones apply to microscopic scales.
Thus the laws of thermodynamics violate their own assumptions, which presume no scale effects.
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Emergence is further delineated:
An emergent behavior or emergent property can appear when a number of simple entities (agents) operate in an environment, forming more complex behaviors as a collective. If emergence happens over disparate size scales, then the reason is usually a causal relation across different scales. In other words there is often a form of top-down feedback in systems with emergent properties.
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Thermodynamics does not allow emergence. But emergence is everywhere we look. Therefore, thermodynamics is very limited in its scope and expressivity. Thermodynamics does not adequately describe most of what we see around us everyday. It works for steam engines. Maybe.
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I think the confusion between individual and government accounts is due to thermodynamics's denial of scale effects. Most politicians make an analogy between a family's budget and the national government's budget. But such an analogy is challenged by many economists.
One can view the national budget as emergent. It is something more than the sum of individual budgets, and the taxes they pay. We can create money to fund the national government's fiscal policies. One can make an analogy between the created money and an emergent property in nature. Thermodynamics, limited in scope though it is, does not permit such an analogy, because thermodynamics denies emergence.
The private sector understands emergence and creates money virtually at will. The government can and should fund its fiscal policy at zero cost through the Fed. Index everything to inflation, as a hedge.
