Editore"s Note
Tilting at Windmills

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March 10, 2005
By: Kevin Drum

WE ARE ALL JUST ATOMS IN A GAS....My thermodynamics professor at Caltech who has gone on to bigger and better things since awarding me a C+ in his class 28 years ago once regaled us with the following example of nerd humor:

The fundamental unit of study in electrodynamics is the photON, and the fundamental unit of study in atomic physics is the electrON. So I guess that means the fundamental unit of study in the social sciences is the persON.

That's some big yucks there, folks. I bring this up because, against all odds, it turns out that Prof. Goodstein may have been more insightful than he imagined. Apparently a breed of researchers who call themselves "econophysicists" have been studying income inequality and have come to the following conclusion:

They found that while the income distribution among the super-wealthy about 3 per cent of the population does follow Pareto's law, incomes for the remaining 97 per cent fitted a different curve one that also describes the spread of energies of atoms in a gas.

....While economists' models traditionally regard humans as rational beings who always make intelligent decisions, econophysicists argue that in large systems the behaviour of each individual is influenced by so many factors that the net result is random, so it makes sense to treat people like atoms in a gas.

Indeed, treating 97% of the population like atoms in a gas bears a disturbing resemblance to orthodox Republican economics, doesn't it? (Admit it. You were waiting for the political spin on this, weren't you?) In fact, as macroeconomist Makoto Nirei puts it, the gas model "seems to me not like an economic exchange process, but more like a burglar process. People randomly meet and one just beats up the other and takes their money."

Nirei seems to think this is a defect of the model, but I'm not so sure. After watching the bankruptcy bill wend its way through Congress, I suspect this might actually be the reason the model seems to describe reality so well.

POSTSCRIPT FOR THE HUMOR IMPAIRED: I'm kidding. Sort of.

Kevin Drum 10:37 PM Permalink | Trackbacks

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