Mark Buchanan's Blog

I haven't posted here for quite some time now and I presume everyone has gone away to browse in more frequently updated pastures. But I wanted to alert everyone to a new blog I've just started: The Physics of Finance. I touched on the self-organizing dynamics of financial markets a little in The Social Atom -- and had an Op-Ed on the topic in the New York Times a couple years ago -- but this is a enormous topic deserving a large space of its own. The new blog explores a growing revolution in the science of markets based on ideas and concepts from physics. This kind of work has really been exploding in the past few years. If traditional economics has emphasized self-regulating processes and the concept of market equilibrium, the new perspective emphasizes the myriad positive feed backs which often drive markets away from equilibrium and cause tumultuous crashes and other crises.

 If anyone comes back to this blog or still gets updates from it, I hope you'll visit me at The Physics of Finance. I'm only just getting this going so the blog is a little sparse now. But I'll be working on it regularly from now on. Economics is too important to be left to the economists!

An article in the NYT describes the growing concern over economic conditions, and all of the candidates' immediate desire to assign blame on you-know-who and to proclaim how they'd do better. It's obviously an irresistible way, I suppose, to score points. Much as I think the Bush administration has acted childishly and incompetently in almost every area, however, I find it awfully hard to give them any responsibility for the property market, or the irresponsible lending practices that pumped the

It's pretty clear that convinced belief in the self-serving and greedy nature of humanity can induce that very behavior, not only in those who believe it, but in others as well. I've written before about the rather alarming study that looked at how graduate students in various disciplines play cooperative games, such as the Ultimatum game, in which participants do better in so far as they manage to temper narrow self-interest and cooperate. Except for graduate students in economics, students in

Stanley Fish has written an interesting essay in today's New York Times. As he points out, alongside a spate of recent books attacking religion and its growing influence, publishing houses seem to be issuing defenses of liberal political organization, such as Paul Starr's Freedom's Power: The True Force of Liberalism. I think I could count my Social Atom as taking a similar position, arguing for government based on the maximum use of science, knowledge and open discussion based on real understan

I'm totally bogged down in an article in quantum non-locality, which is one of my most long-standing pet interests. I'll say more next week, after finishing the article, but I'm beginning to believe that social dynamics have actually had quite a lot to do with this area of physics over the past 50 years. For many years, in effect, people were unable to get jobs at good institutions if they wished to work in unorthodox areas, especially if they questioned the prevailing orthodoxy on the interpret

In an Op-Ed last weekend, the New York Times' Thomas Friedman asked some curious questions, questions with answers that I think ought to be all-too-obvious. He wrote:

One thing that has always baffled me about the Bush team’s war effort in Iraq and against Al Qaeda is this: How could an administration that was so good at Swift-boating its political opponents at home be so inept at Swift-boating its geopolitical opponents abroad?

How could the Bush team Swift-boat John Kerry and Max Cleland — authe

Apparently some people, even many people, really believe this. Indeed, a friend of mine said as much to me a couple years ago. "House prices always goes up." He meant even more than that, believing that house prices always rise faster than inflation. Which may be true if you take only the past ten years as evidence. Go a little further back, of course, and you see that house prices flop up and down just like anything else, sometimes very rapidly, often driven by collective waves of behavior that

I still haven't yet finished that old paper by Gary Becker, but I hope to get back to it soon, and see whether or not I treated his ideas fairly in The Social Atom. In the paper, he's trying to argue that economists can make much weaker assumptions about the rationality of people, and still derive some of the key theorems of economic theory. I have my doubts, but I'm not quite ready yet to lay out why in detail.

One of the problems, I suspect, may hinge on the notion of fixed preferences. Economi

The ever-active Glenn Greenwald cites yet another example of the sad failing of our media's "finest" to render poltical events in anything like a "fair and balanced" manner. As I tentatively suggested last week, our media figures could do a great service to our democracy -- not to mention to the standing of journalism itself --if they tried a bit harder to act as intelligent and independent minds in their own right, and to peer behind the themes and images given them by political figures and ope

A few weeks ago, Dr James B. Burnham of the Donahue Graduate School of Business at Duquesne University sent me a polite email chiding me for my discussion, in The Social Atom, of the work of economist Gary Becker. Becker is famous for his association with the so-called Rational Choice school of economic thinking, which tries to model a great deal of human behaviour -- including things like crime, individuals' choices to have children and so on -- in terms of people making fully rational choices.