Symmetry and the Economy
The ferocity of the credit crisis has surprised everyone. Even the most pessimistic observers are a bit punch drunk that their dire prognostications are coming true. How did it happen so fast? When will the sheer speed and force of this unwinding begin to subside?
Maybe there is an analogue in physics. In the
Wall Street Journal today, it was announced that three men have won the 2008 Nobel Prize in subatomic physics (they split a 1.4 prize by the way). Their accomplishments were in the prediction and discovery of something called "spontaneous broken symmetry."
It seems that in any background field (magnetic, gravitational or fluid, for example), things might appear stable or symmetrical. Suddenly, with respect to the field, the symmetry is broken and things rapidly change. As folks peered deeper into the subatomic level of thing, these spontaneous breaks in symmetry were a complete surprise and revealed a great deal about the particles behind the particles.
A simple example of this symmetrical state devolving is often described as a ball sitting on the top of a hill. There is symmetry of the forces acting upon it, holding it there or not pulling it or pushing it in any direction. But it is not a stable position. Once the ball moves to roll down the hill, the symmetry of forces is broken. The ball chooses one path over all of the others, and the moment changes in a swift and dramatic fashion.
The economy has existed in a symmetrical state since the Great Depression. The ball has wobbled, of course. It has been bumped and pushed and pulled by war, by the decoupling of the gold standard, by terrorism, by the technological revolution and even by changes in healthcare. But seething and boiling and rolling beneath the apparent stasis of this symmetry were the dramatic and powerful movements of the credit and banking system.
While charitable organizations told our corporations about their moral obligation to give, the corporations were in a position to give because the machinery of credit was working. While corporations bragged of their successes, the banking system was malleable enough and strong enough to provide a base on which to build. Marketers taught us about being sticky and finding our blue ocean ideas, while they feasted at the table of business profits.
Politicians waxed philosophical and moralizing about our need to commit resources to social programs, all funded by the humming economic machine beneath their feat. The military paychecks we have written, the foreign aide checks we have written, the infrastructure improvement checks for highways and bridges we have written - all were cashed by the vast pool of economic prosperity managed and maintained by a functioning system of currency and credit.
And then there was a spontaneous breaking of symmetry. The forces acting, or not acting, on the ball perched at the top of the hill changed. The ball wobbled and then chose a course. We all stand surprised that we cannot stop it, that we have not been able to place it on its perch again.
But apparently, something fascinating happens at that spontaneous symmetry breaking. The researchers observed things about matter they had never seen. They identified at least three new families of quarks - building blocks of all things. In fact, the Royal Swedish Academy of Sciences said in their citation for the award: ”Spontaneous broken symmetry conceals nature’s order under an apparently jumbled surface.”
And so it is that we have a moment to observe. To learn. To see beneath the things that our nation has taken for granted for decades.
Symmetry will return of course. The ball will find a new spot atop some other hill. The US economic model will follow the same fundamentals but in an entirely different way. For a moment, inside the perilous movements of this credit crisis, the clever and resourceful will observe and learn a bit more about the concealed nature of order under the apparently jumbled surface that has been our economy for years.