John Brockman, literary agent extraordinaire and editor/publisher of Edge introduced me to Seth Lloyd via good old fashioned email. I had lunch with Seth today.
Seth is known for his seminal works in the area of quantum computing and is visiting Japan for a year. We talked a bit about Japan, but I jumped at the opportunity to talk to him about some of the loftier things that are puzzling me these days. My first love was physics, but I dropped out when college physics turned out to be more about math than the art of physics. I'm now a repressed physics lover who can't keep up with the math. Therefore, I always jump at the opportunity to have someone explain physics to me in an intuitive way.
Seth explained that historically, physicists have always talked a lot about energy and the conservation of energy. Energy changed form, but there was always the same amount. They later found that you would lose a bit of energy over time and they attributed this to entropy. Recently, people have realized that entropy is sort of randomized molecules and looks a lot like information. Seth explained that the whole universe could be viewed as a big huge computer and you could apply information theory on physics and vice versa.
At this point I tossed out some of the questions I've been asking all of the smart people I've been meeting these days. What is money? Is economics really the way we should be analyzing and managing the exchange of value in society? How are non-financial assets such as trust, beliefs and culture created and transmitted? Does more money beyond a certain point really make you happier and if not, what is happiness?
Seth talked about how money was similar to energy in that it was conserved, at least on paper. Seth pointed out that most things that make you happy require money and energy, but that money and energy in themselves do not usually make you happy. In a sense, they are a necessary part of the process, but not the end. You do get an endorphin rush from the process of scoring more points in a game, gambling, or making more money, but the happiness you get from chasing these obsessions is not the same happiness you get when you finish a great meal or finish a session of meditation.
Seth pointed out that if you are struggling to survive in a tough environment, eating fatty and sweet foods and conserving your energy are probably good things. When you have enough food, sitting around eating sweets on the couch suddenly becomes detrimental. Is there an equivalent to this with money? I believe that free markets and democracy are great things and are the foundation of civilization and progress. I believe that efficiency and greed play a big role in creating healthy economies. Having said that, I do not believe that just because we have free markets and democracies, that people will be happy or that we will have peace. My question is, at what point, if any, do you have too much money? At what point is greed pointless and destructive? Can countries and economies become addicted to economic growth or become financially obese?
Neoclassical economists tend to model human behavior with a simple formula where more money makes you happier and people will do everything they can to earn more. This is like saying that the more calories you take in the healthier you will be and that eating more makes the world a better place. It's obvious to most real people that we decide what to spend our time and money on based on a variety of psychological, cultural and societal influences. Very few of us only spend money to make more money. The question I posed to Seth was whether there were models from the study of energy and entropy or from quantum computing that could be applied to try to understand some of the issues at the edges of economics? Are there ways of measuring and analyzing non-financial, non-conservative value such as culture, love and trust? Were there non-economics models for modeling some of these things? Was there a way to determine whether certain types of pursuits of happiness tended to help the human condition more than others? Was there something in information theory that could help us understand the value of social networks or ties?
Seth said he would ponder some of this stuff and get back to me. I promised to try to render some of my thoughts into a more focused question or problem.