Science reinvents the economy: An economy in a computer

Magazine issue 2711. New Scientist

More: Can science reinvent the economy?

Can we pack an entire economy, with all its complex human and political interactions, into a computer? Physicist Dirk Helbing of ETH thinks so – as long as we’re bold enough in going about it.

He points out that financial systems aren’t the only monsters we’ve let out of the box. How traffic flows in and around huge cities simply cannot be grasped by mathematical analysis, but computer models let millions of virtual vehicles interact on realistic road patterns – and often discover potential problems before they occur in reality.

The complexity of today’s economy, Helbing suggests, demands a similar approach. “We’re not currently using the best capabilities of science,” he says. “We need to bring together scientists from different fields and put together tools that can be used as a kind of wind tunnel for testing out social and economic policies.”

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Mike Davis interview

Against the grain

Will the current economic meltdown, and worker reaction to it, be a reenactment of the Great Depression? Could the politics of racist resentment on the US-Mexico border explode into (more) violence? Are global elites truly motivated to combat climate change? Mike Davis, author of In Praise of Barbarians, tackles these and other issues.

Mike Davis, “Can Obama See the Grand Canyon? On Presidential Blindness and Economic Catastrophe” TomDispatch

Mike Davis, “Living On the Ice Shelf: Humanity’s Meltdown” TomDispatch

Marx on financial crisis

In a system of production, where the entire continuity of the reproduction process rests upon credit, a crisis must obviously occur — a tremendous rush for means of payment — when credit suddenly ceases and only cash payments have validity. At first glance, therefore, the whole crisis seems to be merely a credit and money crisis. And in fact it is only a question of the convertibility of bills of exchange into money. But the majority of these bills represent actual sales and purchases, whose extension far beyond the needs of society is, after all, the basis of the whole crisis. At the same time, an enormous quantity of these bills of exchange represents plain swindle, which now reaches the light of day and collapses; furthermore, unsuccessful speculation with the capital of other people; finally, commodity-capital which has depreciated or is completely unsaleable, or returns that can never more be realised again. The entire artificial system of forced expansion of the reproduction process cannot, of course, be remedied by having some bank, like the Bank of England, give to all the swindlers the deficient capital by means of its paper and having it buy up all the depreciated commodities at their old nominal values. Incidentally, everything here appears distorted, since in this paper world, the real price and its real basis appear nowhere, but only bullion, metal coin, notes, bills of exchange, securities. Particularly in centres where the entire money business of the country is concentrated, like London, does this distortion become apparent; the entire process becomes incomprehensible; it is less so in centres of production.

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20 million euros, Barcelo painting

Spanish painter Miquel Barcelo used over 100 tons of pigments from all over the world to make a 16,000-square-foot brightly-colored abstract painting for the United Nations offices in Geneva. “On a day of immense heat in the middle of the Sahel desert, I recall with vivacity the mirage of an image of the world dripping toward the sky,” Barcelo said. “Trees, dunes, donkeys, multi-colored beings flowing drop by drop.” As the work was unveiled, UN Secretary-General Ban Ki-moon thanked Barcelo for putting his “unique talents to work in service of the world”. He added: “The artwork you have created for this room is innovative and radiant. I have no doubt that people will come to see it whether they have business here or not.” The painting, on the ceiling of the Human Rights and Alliance of Civilizations Room, has been criticized for it’s $23 million price tag. (via BBC News)