Nobel Physics Laureate questions the foundation of economics

“All of these questions have something to do with randomness, and the way to deal with them in the 17th century was to imagine parallel worlds representing everything that could happen,” Gell-Mann said. “To assess the value of some uncertain venture, an average is taken across those parallel worlds.”

This concept was only challenged in the mid-19th century when randomness was used formally in a different context—physics. “Here, the following perspective arose: to assess some uncertain venture, ask yourself how it will affect you in one world only—namely the one in which you live—across time,” Gell-Mann continued.

“The first perspective—considering all parallel worlds—is the one adopted by mainstream economics,” explained Gell-Mann. “The second perspective—what happens in our world across time—is the one we explore and that hasn’t been fully appreciated in economics so far.”
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