Capital and Water: Recognizing Flows And Their Properties

Flow and Turbulence: its actually everywhere

Related to my previous post, Brad DeLong’s take, reading several comments there, and just our listening to our society in general… We talk a lot about the failure of US students in science and math. That matters because it makes us a poor electorate if we have large disparities between what we each could know and what we actually do know. At the same time, the amount of real knowledge in the world is probably increasing exponentially, leading to greater and greater specialization – greater differences between what a physicist knows and what a banker knows, for instance.

In 1900, 1800, or 1700, it wouldn’t be unreasonable for specialization to be unimportant in predicting what a person knew – Isaac Newton was also something like a Treasury Secretary. Antoine Lavoisier (“father of modern chemistry”) was a tax official, beheaded in the French Revolution. Benjamin Franklin was also one of the more important physicists of his day. To see how vivid specialization has changed our culture, imagine how absurd it would seem if Ben Bernanke were also a leading physicist? Or if Stephen Pinker was also a leading diplomat? Or Eric Schmidt just happened to dabble in so much chemistry that he authors one of the most widely-cited papers? Ask any of them where they might find the time to develop the skills and they would probably laugh.

Specialization isn’t bad, per se. But it does mean that we need to be more selective about what we try to teach every student so that we waste less of a very precious commodity – the attention of youth. I believe we would be wise to trade a little more statistics and complex patterns (like “flows”) for a little less math – at least, in the time we spend on the more esoteric math. Of course, I think it would serve us to emphasize math, science, statistics, and patterns at the expense of some of the history of literature, too – but we could also just toss out the idea of “summer vacations,” too. What’s the point of that in a non-agrarian, air conditioned society?

We need more people grasping proper statistics to understand more of the psychology of politics and economics. And all of that leads to complexity, patterns, and types of flows – because people influence – and are influenced by – other people that are more or less adjacent in some sense – just like atoms. That is essentially what a “flow” is – though flows can be very abstract, too. Right now we have stagnated US government and a stagnated global economy due to too many people apparently not understanding that these are all types of the same thing: flows. – whether it is government regulations, legislative obfuscation and inaction, or the critical relationship of capital flows to the value of the Euro and the level of European unemployment – or, as it happens, aquifer depletion and climate change – and the solutions we have to choose from.

Water in the Ogallala aquifer either flows to the ocean, eventually, or evaporates, or is pumped up through a well where it then goes through the same process. Eventually, all the water molecules that were once in the aquifer will evaporate and/or flow into the ocean. Ocean water evaporates (a natural desalination process) and then precipitates somewhere. If it rains or snows on land, it eventually becomes river runoff, evaporates, or rejoins the aquifer. This is the water cycle – and it is just one big circular flow (ignoring astronomical inputs and outputs!).

The altitude of the oceans, the measure of humidity and water droplets (clouds) in the air, and the level (altitude) of the water in the aquifer are all measures of temporary “balances” in this flow – and they all change a lot over time and space, but measuring the balances – even if they are distributed in a complex way (ie, clouds and humidity have a very complex structure) – tells us crucial rates about the flow – whether we have a deficit or surplus, and which way is it changing? Where? (Why?)

The balance of something like the Ogallala aquifer – the net deficit we are running – drives increased costs and creates problems we will solve one way or another. Many people want to see this as a “merely political” issue to bargain over – but they don’t see that small-scale bargaining like this is just another type of flow – one that increases the balance of the ‘winners’ over those of the ‘losers’ – but its all just a “rat race.” There are no real winners or losers in the long run – just a flow – one that can either be turbulent or efficient – by a number of measures – over short timescales or long.

What we’ve learned about flows in physics – like the amazing relationship of the Reynolds Number in flow turbulence – applies to capital flows in economics, and economic and political ideas apply to problems in physics – like aquifer depletion, possible solutions, and how to think clearly about them.

This post is already too long so I’m going to just wrap it up and do an abbreviated “part 2″…


About stormculture

In pursuit of reality.
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One Response to Capital and Water: Recognizing Flows And Their Properties

  1. Pingback: Seeing Flows: Free-Markets, Parasitic Growth, Aquifer Depletion, and Income Inequality | Stormculture’s Weblog

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