The Relativistic Economics started on 1980-1981, when I was working
in the Italian Aerospace Industry and I was also attending in my free time the
University for a graduation in Economics. Up to that time I was basically an
expert in electro-engineering, but having relevant problems of Logistics and
organization thereof in the activities I was performing. I begun to face those
questions (basically thus questions of industrial production and of concerned
academic analyses) by using a methodology of analysis, which joined higher mathematical
calculation used in electro-technique, i.e. methods of physics, to the theories
of economics learned up to that time at university, i.e. something fully new
for the "Economic” Sciences (some concept of Relativistic Economics elsewhere
seems to have appeared only later on end 90’s, but being based on very theoretical
and transcendental approaches rather than on the ones originated from an industrial
practice).
Anyway, the first result of my analyses led to the definition of
the “LOGISTIC LAWS”, an argument that, under suggestion of kind professors (who
saw in the matter an unpublished novelty and an uncommon methodology), was sent
and registered in USA at the Copyright Office. The same will happen later on
for the Relativistic Economics and its first case.
RELATIVISTIC ECONOMICS came out therefore
as a consequence of the defined “LOGISTIC LAWS”, i.e. they came out just accidentally,
when the “LOGISTIC LAWS” had to be generalized for a more general understanding
of the macro-economics linked to the micro-economic problems of an industrial
production. That analysis produced furthermore a link between the macro- and
the micro-economic models, what the economists were researching since centuries.
Relativistic Economics are thus very pragmatic economic sciences
(or financial too, by the extensions that it may derive), although they may
involve an intellectual use of elements of physics-mathematics to come to the
definition of complex models of interactions macro-micro (and vice versa) for
a whole economic system. Hence, the development of new consistent theories and the innovation of coming to the definition of physical laws
that are and must also exist in the economic systems and in economics, although this might appear like a blasphemy for the traditional
discipline, which actually is mostly based on the consumer’s sentiment at micro-levels
and on Keynes global behavioral “inclinations” at macro-levels.
As well, the traditional studies of the economic cycles, which
become the starting focus of our relativistic analyses: the main exponents of
this century, e.g. J.A. Schumpeter, W.C. Mitchell etc., also come to their conclusions
by a series of assumptions and conjectures, which are mainly based on human
behavioral considerations. Lastly, even the more modern “econometrics”, defined
as “the study of the economic theories with statistics and mathematics” seems
to omit to consider that the economic system is a system of complicate “interactive physical forces”, “visible and invisible” (what I am sustaining since twenty years), which definitions and
effects can be only exactly ascertained and fixed (regretfully for traditional
economists, who seem to harbor a dislike for other mathematics but statistics
and probabilities), by using a very advanced precise methodology that actually
can be only borrowed from the physics.
Now, since many people may be like Saint Thomas, who may be only
interested in touching the material site of the question (what I cannot demonstrate
in few words hereby considering that the theoretical questions of ECONOMICS
all to be rendered material are rather complicate and that actually I cannot
dedicate the necessary time to these issues), what can we (I) shortly anticipate
at this point, but just to give a rough idea to such kind of a reader on the
Relativistic Economics?
Shortly, we can advance:
The Relativistic Economics mathematically foresee an inflationary
situation, under form of global losses of system, for each economic system,
in which the natural points of its natural economic growth are shifted for whatever
reason outside of its expected natural limits (whereas “expected” means “relativistic
calculated” and “natural” has to do with a concept of an initial economic cycle
under consideration, taken as "inertial" or invariant of system, what
it can be afterwards gradually “relativized” on the basis of the real dynamics
of the forces of the system).
Conversely there will be always a deflationary situation, under
form of global earnings of system, for each economic system, in which the natural
points of its natural growth are shifted for whatever reason inside of its expected
natural limits.
When will those situations take place? That is only a question
of time, a time which can be also “relativistically” calculated or better evaluated
at macro-economic level by knowing the natural limits of the system and by knowing
and setting in good order the hundreds of its interfering micro-parameters (evaluation
that today may be only done very partially and by using conjectures, i.e. an
estimation).
RELATIVISTIC ECONOMICS, and theories thereof, have therefore nothing
to do with the best guess in economics, with an astrology or with the divination
of the economies, i.e. with a pure speculation of the time and of the percentage
of growth of an economic system (just to promote on the other hand only the
interests of the speculations and of the speculators of the finance, who bias
on the end the feelings of the people by diffusing panic or prospecting exaggerated
expectations against a not better identifiable factual situation).
RELATIVISTIC ECONOMICS have instead to do with the objective well
calculable facts of the interwoven economic systems, of their physical forces and of their realistic relativistic developments, by leaving
fully out, but only on first instance “as an invariant of the system”, the sentimental behavior and
the psychological trends of the micro factors of the economics, contrarily to
what it may happen now.
Naturally, this science, as a young one, may also come initially
to approximations, before of coming to the full understanding and collection
of all relevant physical forces, which cause on the end the well calculable facts and which,
on turn, provoke the cyclic motion of the global economic system. But, the methodology
involved, i.e. a methodology of physics, i.e. a methodology having as target
the physical understanding of all the participant economic forces in a macro-economy,
visible and invisible, guarantees that a certain point the cycles and trends
of the macro-economies can be, no more estimated or hypothesized, but can be
correctly evaluated and on end even calculated.
I understand thus that this "heretical" method might
kick up a raw in the actual way of thinking of the economics, which may only
be based on the sentiment, on the statistic trends, econometric models and on
the calculus of probability. But that is a matter of facts, just deriving from
the very first accomplishments by the already performed (very few indeed) relativistic
analyses.
This situation may be better understood by resuming thus the first
results and the first prospected goals of the RELATIVISTIC ECONOMICS.
The following list has been drawn up only on the basis of what
effectively and really made up to this moment:
1. Practical analysis of a real cycle of growth (at micro level);
2. Use of vector mathematics (it seems for the first time in economic
analysis and for the definition of economic theories);
3. The vectors are however for us only the starting point to enter
(regretfully) tensors and matrix, due to prospected new relativistic situations
of study;
4. Economic cycles are taken at least on beginning as invariant of
system, what can be gradually “relativized” in the dynamics of the forces
of system;
5. The “physical phase displacement” of economic cycles becomes the
very relevant instrument for an understanding of the macro-economic
trends;
6. Hidden and invisible effects in the economic system are materialized
and rendered calculable;
7. The cycles of an economic system can never be sinusoidal, as mostly
pictured by actual economics: they are instead always highly deformed,
what, according to the Relativistic Economics, requires a necessary analysis
of their inferior harmonic series, for a more precise
evaluation of the evolution of macro-systems;
8. Consequently, the research of practical scientific remedies, which
are universally accepted, as physical elements of the economics, for smoothening
or rendering sinusoidal the cycles of the system, that is, to find measures
to affect also sudden and dramatic oscillations that may
happen on occasion;
9. To make of the economics more precise sciences, as it may be in
the physics, so to come to a reasonable kind of“engineering” of the
economic
systems.
Please remark that the "invisible
effects", we talk about, have absolutely
nothing to do with something unnatural or "spirits" in economics,
but simply to do with the very rational concept of initial "not apparent"
originators of the turbulences of an economic system, i.e. of original causes
of an inflationary or of a deflationary situation that unfortunately cannot
be realized conventionally by actual methodologies of economics.
The author understands very well that innovative
ideas, especially if coming from a very modest origin, may provoke strong objection
only on principle and a wide skepticism in common readers, in already affirmed,
high ranked economists and even in famous scientists, like astronomers and physicists,
who know very few of the economic specialization.
For that reason, let us go into few practical
considerations.
A layperson of the economics shall know that it is a scientific
established fact, since centuries, that any economic system is subject in the
course of periods to alternative cycles (e.g. of growth), as well as the electrical
current, that flows in our home appliances, mainly is.
Differently from the electric current however, which alternative
cycles are normally always sinusoidal, because of mechanical origin, the economic
cycles do not depend at all on fixed calculated generators and on engineered
concerned systems, but they pivot on a series of factors, which in their total
and in their complicate physical inter-functional mechanisms are still fully
unknown.
This is also why a dynamic of the economic cycles can be actually
more easily attributed (essentially and in general) only to sentimental expectations
and to human behaviors, what fact makes the economies completely unforeseeable
and makes of the economics rather capricious sciences, despite of the thousands
of forecasting institutes. The proof of this fact is that there are actually,
in general, as many estimations of an economy as many offices thereof may exist.
Hence, conjectures and speculations for the estimation of the economic
trends, what must be afterwards constantly subject to reviews and to several
adjustments. In fact, there is actually no universal accepted scientific validated
methodology to determine what are “fixed physical causes” clearly affecting
the precise direction of an economic cycle of a system. Consequently, there
is also no objective action aimed to scientific and universally acknowledged
remedies (which cannot be simple stopgap measures, mostly “a posteriori”, e.g.
the intervention of the central banks on the first rates) to try to correct
the imbalances of an economic macro-system.
In reality and according to the first Relativistic Economics analyses,
the economic cycles are all the result of factors, which can be understood and
collected like in physics. In that, also the hidden and invisible effects of
system, coming out from the so many interlaced interactions of its behaving
agents, can be identified, materialized and finally calculated for a kind of
engineering in the economics. The economies therefore can be seen, by a relativistic
point of view, no more with a transcendental spirit, but just founded on more
precise physical laws of system that go and condition on the end their unavoidable
trends.
It is however understandable that the layperson can see in a buck
a better materialization of the economics, rather than of personally thinking
about of its physical laws, of entering complicate relativistic analyses, of
using difficult vector calculations, of trying an understanding of the economic
cycles and of trying the identification of all factors, affecting a macro-system.
However, that will not solve her/his problem of getting a different value of
the same buck after a certain time (e.g. by the usual called “depreciation”
or “devaluation” deriving from very strange reactions of system also named "inflation"),
of getting a different bank-compensation for her/his dollar savings or of getting
higher oscillating rate of exchange of a currency when traveling abroad. That
will not solve, as well, the problems of the governors of a macro-economic system,
when they must implement appropriate, scientifically universally accepted measures,
for reacting “just in time”, or if possible correctly in advance, then not at
all sluggish, to the distortions or to the sudden unexpected higher oscillations
of the cycles of the system.
A
PRACTICAL EXAMPLE
Actually, we are living by May 2003 (in Europe and in USA) a rather
deflationary situation, if not really a deflation, which derives from an excessive
pumping up of the economic growth of the system between the 1998- early 2000
and by a concurrent attempt to block worldwide the entire economic systems by
the terrorist attacks of 11 Sept. 2001 and by some more recent act of terrorism
(apart of the short Iraq war).
That means that the macroeconomic problems, we will have in the
next run, especially in the industrialized countries, will be more and more
problems of an economic growth pumped again upward to compensate these slack
periods, rather than of the actual stagnation or deflationary situation.
While this fact may be already slightly
conceivable by actual economic way of thinking, if one only pictures in her/his
mind conventional historical cycles, it is fundamentally new by the Relativistic
Economics that the economic cycles, especially the recent and the actual ones,
cannot be absolutely pictured, compared and traceable in a conventional analogy,
i.e. as being mathematically averaged and assumed almost sinusoidal, but they
must be seen necessarily in their sure happened enormous deformations. They
must be seen, in other words, in their instantaneous values of period, because
of the sure abnormal phase displacements of the interlaced growths of the micro-factors
reacting in a “relativistic economics” system. Only in such a way, we can also
come to a correct calculation of the dynamics of the factors of system and consequently
to a sure more realistic evaluation of the trends of the growth of the system
itself.
Shortly and according to the Relativistic Economics, the economic
cycles must be understood and analyzed in their whole components of their whole
inferior harmonic series, then not at all by averaged series and rectified trends,
as it mainly can happen in the today’s economics.
Because of sure abnormal phase displacements
at micro-levels happened in the past years, the Relativistic Economics can geometrically
and physically see, predicting by fact since now, a consistent deformation of
the global (macro) economic cycle of growth in the next years, which starts
just on the short run apparently very sluggish, but in a contrary sense to the
deformation happened up to these years.
That is, sooner or later, we must necessarily see in an economic
system a certain compensation of the areas of the cycle of growth of period
of these years, although the future conformation, i.e. the trend of the same
cycle for its remaining part, will be surely different in amplitude and phase
with respect to the growth already experienced.
More practically, if we all can assume that the world and its economies
do not have an end in the next years or in the next generations, we can also
purport, according to the Relativistic Economics, that there shall be actually,
in our rather deflationary situation, higher oscillations in the natural cycles
of the macro-economic systems with respect to the ones, which might have been
observed historically for past equivalent periods: These oscillations cannot
die down in a natural way in the next expected rebound of the economy, unless
of other extraordinary historical events or of an artificial manipulation of
the cycle, what must be unfortunately still fully understood. Moreover, the
higher oscillations, which must exist in the actual macro-economic systems,
are incompatible with the natural rates of growth of the economies, which might
be calculable by the Relativistic Economics for those systems and in these years.
That means that the actual American and European macro-economies,
which are under control of their respective Central Banks by their politics
of the prime rates, might go fully out of control (an example thereof seems
already existing, but we actually do not have the instruments and time for a
scientific verification), if no harmonization of financial and political nature
in their complex will be taken, aimed purposely to try to smoothen the economic
cycles and to dim the consequences of the shock waves of the beginning of this
century. Shortly, actual higher imbalances of system need and shall be necessarily
corrected, if we do not want to see, sooner or later in the future, higher imbalances
in a contrary sense or to come, in much longer run, even to a kind of “resonance”
of systems. In
fact, with a no intervention and a no correction, also according to a doctrine
of full liberalism in the economy, the system will aim surely during the
time to correct itself and to balance. But how? Simply by producing somewhen
in next years exceptional peaks (surely of different amplitude and phase) to
compensate the exceptional peaks we experienced in last period, i.e. the balance
shall take place surely by undesirable imbalances.
Mathematically, the action of harmonization can be understood just
as a harmonization to be produced at micro-economic levels among the factors,
which give origin to the inferior harmonic series of the distorted macro-economic
cycle. But, how can this happen? Who can do? What are the main factors originating
or affecting the inferior harmonic series of the macro-economic cycle, which,
according to the initial theories of Relativistic Economics, must necessarily
exist on the ground of the system and must follow a rather exact law? Is there
only one common law or more relativistic laws, which flow in the dynamic of
the system? If many, how those laws may be represented and calculated in their
whole, to evaluate the function of the global evolution of the system? How the
governors of an economy can influence more optimal values as inputs in the parameters
of the exposed laws for the maximum efficiency of the system? What are the correct
instruments to avoid that an action for trying to balance the cycle of growth
of a system may not provoke imbalances in the interlaced cycle of growth of
other systems with even worsen consequences for the global economies on longer
run?
There are many, many questions!
Actually however nobody seems to know, with the exception of the
tested-by-practice system of the central banks of acting on the first rates
(but, it seems out of“just in time” more
precise instruments), how an economic cycle can be manipulated. Nobody surely
knows how the economic cycle can be optimally balanced and managed in all its
parameters for its most effective conformation and for an almost regular growth
of the system, moreover also by occasionally absorbing in the most effective
way the possible shocks of system.
For trying to give answers and for knowing we must deepen the knowledge
of the economic cycles, make a relativistic analysis of the systems, we must
know where the inferior harmonic series of a macro-economic cycles exactly come
from, what are the main physical factors of their divergence (although there
could be already an idea, but fully undemonstrable at this stage), how many
they are or they can be, how they physically evolve or can evolve, what kind
of inter-actions macro-micro and vice versa exist, which may affect or may not
affect on the end a whole trend of system…
The scope of the development of Relativistic Economics in the future,
whoever it can better make, shall be thus just to try to give precise answers
to these initial questions…
Relativistic Economics and concerned pages are published hereby
for the first time on June 1, 2003. This, under full responsibility of the author, Francesco Palma,
who also guarantees that the ideas and concepts thereof are completely new and
original. The author has no pretence of the absolute for all what he is now
alleging in full modesty and good faith, since everything may be understood
as relative and because of the very scarce analysis and the very few demonstration
he could make up today for this discipline. He reserves therefore the right
on occasion to make extensions, amendments, integrations, produce new developments
etc.
Moreover, although an official copyright already exists for the
“background” works and the “Relativistic Economics” name in itself,
THESE PAGES BECOME AN OPEN SOURCE OF PUBLIC DOMAIN AND CAN BE FREELY
COPIED AND DISTRIBUTED, PROVIDED THAT CREDIT IS GIVEN TO THE NAME OF THE AUTHOR.
AS WELL, ANYBODY CAN USE THE INFORMATION PRESENTED HEREBY, TO COME
TO NEW IDEAS, TO DEVELOP FURTHER ANALYSES, TO WIDEN ARGUMENTS, TO IMPROVE CONCERNED
METHODOLOGIES, TO MAKE APPLICATIONS, NEW CONSEQUENT RESEARCH, TO TEACH ETC.,
BUT PROVIDED THAT:
-ALWAYS A MODEST CREDIT (OF PATERNITY OF THE STARTING ANALYSES)
IS GIVEN TO THE AUTHOR
(Please, kindly understand, essentially for the many personal sacrifices
and the human drama, that these scientific activities since ever enclose)
-THE NEW DEVELOPMENTS SHALL BE MADE OF PUBLIC DOMAIN, BY ANNOUNCING
THEM SOMEHOW (ALSO BY INTERNET, WHERE ANYBODY, ME TOO, MAY ENJOY OF THE PROGRESS
OF THIS RESEARCH).
