MBogdos96 I think the point of the analogy is that it's an interesting analogy that works, rather than an analogy for the purpose of helping you understand
MBogdos96 if u understand physics, then u dont need an analogy :D i guess its for those people who are interested in physics world but perhaps dont have time or means to study it. idk :D
Maru, I hope you are joking. Else, how can you expect to learn physics before you understand the idea of the reverse gear on a vehicle. Sometimes vehicles back up. That what the reverse gear is for. Now back to physics.
it's cold outside. I'm under my large blanket. Got my laptop on my chest. Got my lights dimmed. Got my cookie, half an apple, and some milk. Time for some physics videos.
Am I the only one who finds analogies to be detrimental to my understanding? I just understand things better if you explain the physical process in relation the the physical process just above it and just bellow it (what makes it up and what it makes up).
8:40 this kind of system in game theory is sometimes called a "Money pump" game designers have to take into account the possible series of events that could lead to these, when they make mistakes, an exploit is found
at 10:00 you can make money through exchange rates not exactly like in first example without gold. You still have to carry gold from UK or Japan to US, then exchange back
There is another symmetry here: in physics, the concept of "contact" is defined as the state in which all forces are equal. So there is no movement. This is analogous to the concept of "equilibrium" in economics, in which quantity supplied equals quantity demanded. So there is no incentive for any agents to change their plans.
I think this is one of those cases where the metaphor serves the explanation poorly because it actually complicates the issue by bringing in a bunch of unhelpful preconceived notions (about economics) that don't serve the physics.
bibbly bobbly Maybe - speaking only for myself, though, I found myself distracted by the metaphor, by what I bring to the table with my own understanding of economics.
delusionnnnn I'm interested in what way you are finding it distracting, given that it's not supposed to explain physics directly. Legitimately looking for an explanation.
Andrew Clarry Mostly, toward the end, I felt like I had been listening to a discussion as to how economics doesn't work, rather than how physics does. I could probably give you a better explanation of why I felt that way if I had more background on Higgs.
***** I think we may be having a language problem. What I'm saying is that the video becomes an example how economics doesn't work - it doesn't work the way this video describes, not that it doesn't work at all. That's a different discussion altogether.
Loved the fact he wrote ESP for Spain and he put "Banco" for the Spanish one! Thank you for the awesome knowledge you're sharing, I am a big fan! I'm spaniard by the way :)
For anyone who is interested/wants elaboration on the analogy of banks, have a look at arbitrage opportunity in finance. That will expand on the analogy of speculators making money from a finance perspective.
Wow, this was really inspiring to me. I have so many questions. Can you explain different aspects of our universe with this economic model, like the Big Bang, entropy and heat death? What is photons and is there even as deep as to explain different wavelengths? What about fusion, fission, strong interaction and weak interaction? This analogy really blew my mind, and it has really expanded my view of existence.
You should check out Mirowski's book More Heat than Light, it's a history of how physics has drawn inspiration from economics and how economics has sought to emulate physics, especially with regard to the theory of value. He traces the development of the energy concept in Western physics and its subsequent effect on the invention and promulgation of neoclassical economics, the modern orthodox theory. I think it's an important book and would love to hear what you guys think about it.
Quite a lot of issues are still not clear to me about the analogy. First - what is the loss (objective) function of banks? Second - how does the equilibrium arises in bank politics? Is it static Nash solution?
This video should be longer and with more numerical examples. I found it hard to follow and still don't fully understand some stuff. Also, maybe the camera should focus more on the diagram instead of Dr. Padilla's face.
If what is traditionally is referred to as the "Spiritual Dimension" is the Symmetry State before it is broken, and the introduction of mass creates what is referred to as "Physical Dimension" along with the symmetry breaking. Wouldn't that solve the whole science against spirituality discussion? Is that too WOOOOFFF for this channel?!!!
I don't know whether this is in the original paper, but you could use people going cross the bridges who are not speculators to represent the idea that the electric field actually affects the drift velocity. So, what does Philip "analogies are unhelpful" Moriarty think about this paper?
I'm trying to decide on which topic to major in college, I love both chemistry and physics but I can't really decide what to choose. What do you guys think?
Adding the gold in that analogy is weird if it is not put down on paper. I suggest you add a 4th country (let's call it Higg'sLand) that has the currency gold just like the other 3 have euros,dollars and punds; the 4th country is connected to the 3 other countries with different exchange rates just like USA is connected to Spain and has an exchange from dollar to euro with it, Higg'sLand has an exchange from gold to dollar with USA, from gold to euro with Span and so on. This would fix the problem of having two types of currency in one country and would also make the introduction of silver in the mix more intuitive when thinking about the interaction rules.
I guess I don't understand how the forces arise from the redundancy of currency change, it seems forces arise from exchange rates. Could the banks not change the exchange rates without this redundancy and forces would still exist right?
Is adding the gold equivalent to adding a fourth country ("Goldlandia") and turning the picture into a tetrahedron? The price of gold in each country would be the banks on bridges to Goldlandia.
Brady, where do you get ideas for your videos ? Do you get like emails with questions, or how this process of making a video like this works at all ? do you have any rehearsals with profesors ? :D
It's so frustrating to see him say the flow of electrons (literally called "CURRENT" in physics) are the speculators as opposed to the CURRENCY, though I do see this is implied in the paper as well. Current = currency, charge carriers = commodities, voltage sources or wave propagation = speculators, current sources = banks, right? Or, am I so wrong? I feel like this f**ked up an extremely advantageous opportunity, something which is extremely basic and the entire beauty of the potential linguistic symmetry. There is no language which can express these tragic feelings. Imagine the movie Gravity except Sandra Bullock ends up drowning, or the fact that you just read these spoilers without a warning - but, no, this spoiler is not even within 4 light-years of this feeling.
Economics can be used to (not only explain physics) explain any field if you truly understand it. Understanding economics (at advanced level) is much harder than understanding physics, chemistry, or any other field. For those who have trouble understanding the analogy, or feel the analogy is incorrect, it is due to the complexity of economic variables, agents and preferences. Hence many assumptions had to be made (3 countries, banks = nonprofit org, no cost of changing er etc.). If real world economics is used, it will be "infinitely" more complex than the standard model and defeat the purpose of the paper (using economics to explain physics). All in all, economics is science of human decision making and preferences. If all individuals are totally rational, economics will be exactly like physics, theoretically and empirically.
phulbr Depend on individual preference but since everyone agrees economy is infinitely more complex than physics, for most people, economics is much harder to understand properly, especially in advance level.
ru40342 The reason why physics models cannot predict chaotic behavior is because there is alot we have not understood yet. If you have a fully accurate model that can describe our universe, then you would have no problem understanding modeling how an economy works because it is a system within a system. _common myth the fields of pure science are more difficult to understand than social science._ You just contradicted your own statement. Social science is a field of SCIENCE.
it would be nice to explain abit more maxwell's equations you were mentioning so it can fit better into this analogy, while i was listening, it seamed to me that i'm missing some kind of last piece to the puzzle, i just did not understand where is the money making, you said its gain in energy, but i thought everything in nature wants to go from high energy to low
Does that mean that in a declining or rising economy, only the biggest & fastest speculators will always boom or bust? Aren't the algorithms that are fed into these super computers for nano second trades governed more by game theory & probability rather than the metaphor used in the Prof's argument? It sounds like the math is as indeterminate in the quantum world as it is in economic theory. However, I don't have any proficiency in maths.
I think the analogy makes perfect sense if your familiar with speculating. If your not, using an example from the analogy, imagine if gold actually was going to go to a million dollars a pound. You would buy some since its far less then that now, once it gets to a million you would sell. If the price goes down again you'd buy again, if it went up again you'd sell again. The market forces would force you to keep doing transactions so long as you can keep making profit you would keep moving in the direction that you had to go.
Quote from the paper:"So far, we have assumed that you can only carry money between countries. Now, let us assume that you are also allowed to carry gold. So the new rule is that you are allowed to carry gold and/or money between different countries.Gold has a price in each country, which is set by the inhabitants of each country *independently* of the others. A savvy speculator realizes that a new opportunity opens up. You can now buy gold in one country, take it to the next, sell it, and bring back the money to the first country"
as someone who studies Economics and I'm on my third year I can understand everything you said thanks !! there a lot of shit in Economics that are mind blowing and confusing.
To anyone that thinks this means gold is bad, the same analogy could have been made by replacing gold with a fourth country. It goes from three nodes with three vectors to four nodes with six vectors.
For someone who is in economics, and has no idea about physics, the analogy is hilariously accurate. Its 100% old economic theory, nothing about it is made up.
CraftyF0X I kinda wonder why he uses an analogy based on a system that we prove over and over again we don't understand (economics) to explain a system we understand fairly well and are making progress in. (physics)
Realistically the ratio of produced works of physics to working models and even published works is probably no better than the ratio for economics haha
Actually there are models from chaos theory, simarly to brownian motion, which are used to describe 'fluctuations' in financial markets. There are many physicists who work in economy in this field :)
I had to pause around 1:55. Somehow, the idea that the banks are not in it to make money is more abstract to me than the Multiverse.
This was before the fall of the Higgs.
'These banks are not in it to make money'- analogy immediately unrealistic
But then Higgs offered a golden apple to one of them and the symmetry of this Garden of Eden was broken, and thus the fall.
He never said that.
Anybody else watching Brady's reflection all the way through?
YES - AND I AM STIFFENING UP AS I DO SO.
Albert Neville Go away
Lock Ray "Go away" I know what you're REALLY saying
You're really saying "G*a**y"
Aren't you?
I only noticed it half way in.
yessss
Brady actually makes very good questions. Good job!
This analogy really isn't working for me, I don't know why. Just for some reason it's harder to understand than the actual physics.
MBogdos96 I think the point of the analogy is that it's an interesting analogy that works, rather than an analogy for the purpose of helping you understand
MBogdos96 if u understand physics, then u dont need an analogy :D i guess its for those people who are interested in physics world but perhaps dont have time or means to study it. idk :D
ProfAwesomeO That's usually the point of analogies at least when I use them. Well, you might be right, I can't really argue with you on that.
Ergo Proxy I guess it helps people who have a problem with higher mathematics?
Using economics to explain ANYTHING has gotta be a backward leap !!
It would be more fun to use physics to explain economics! :D
Already been done, quantum tunneling has been used to explain stock movements if I am not mistaken.
It would probably result in less tortured analogies, too. I expect better from this channel. :/
The rich get richer -> Money attracts money -> Gravity
You mean you expected more of Maldacena. Complaints can be registered at the IAS.
ExaltedDuck The analogy's fine. The point was the same equation describes both behaviors.
Fake! this video is clearly backwards, look at the window @ 7:04
Maru, I hope you are joking. Else, how can you expect to learn physics before you understand the idea of the reverse gear on a vehicle. Sometimes vehicles back up. That what the reverse gear is for. Now back to physics.
D Judson This is such an obvious joke, come on, at least give him the benefit of the doubt if you're uncertain as to whether it is or not.
@@donjud1 r/whoooosh
it's cold outside. I'm under my large blanket. Got my laptop on my chest. Got my lights dimmed. Got my cookie, half an apple, and some milk. Time for some physics videos.
I learned about this in my international finance course. Great to hear that I was also learning physics.
One of the very few times you can actually see Brady filming in a video! 4:32
Love how he wrote Esp for Espana and not Sp for Spain! XD
Am I the only one who finds analogies to be detrimental to my understanding? I just understand things better if you explain the physical process in relation the the physical process just above it and just bellow it (what makes it up and what it makes up).
I was watching Brady's reflection the whole time.
8:40 this kind of system in game theory is sometimes called a "Money pump"
game designers have to take into account the possible series of events that could lead to these, when they make mistakes, an exploit is found
at 10:00 you can make money through exchange rates not exactly like in first example without gold. You still have to carry gold from UK or Japan to US, then exchange back
There is another symmetry here: in physics, the concept of "contact" is defined as the state in which all forces are equal. So there is no movement. This is analogous to the concept of "equilibrium" in economics, in which quantity supplied equals quantity demanded. So there is no incentive for any agents to change their plans.
I like seeing Brady's reflection in the window, nodding every few seconds like "Yep, yeah, I totally understand what he's saying"
I think this is one of those cases where the metaphor serves the explanation poorly because it actually complicates the issue by bringing in a bunch of unhelpful preconceived notions (about economics) that don't serve the physics.
bibbly bobbly Maybe - speaking only for myself, though, I found myself distracted by the metaphor, by what I bring to the table with my own understanding of economics.
delusionnnnn I'm interested in what way you are finding it distracting, given that it's not supposed to explain physics directly. Legitimately looking for an explanation.
Andrew Clarry Mostly, toward the end, I felt like I had been listening to a discussion as to how economics doesn't work, rather than how physics does. I could probably give you a better explanation of why I felt that way if I had more background on Higgs.
delusionnnnn
I don't understand. What part of that analogy gave you an idea that economy does not work?
***** I think we may be having a language problem. What I'm saying is that the video becomes an example how economics doesn't work - it doesn't work the way this video describes, not that it doesn't work at all. That's a different discussion altogether.
Loved the fact he wrote ESP for Spain and he put "Banco" for the Spanish one! Thank you for the awesome knowledge you're sharing, I am a big fan! I'm spaniard by the way :)
So is space discrete or are countries continuous in this analogy?
For anyone who is interested/wants elaboration on the analogy of banks, have a look at arbitrage opportunity in finance. That will expand on the analogy of speculators making money from a finance perspective.
Wow, this was really inspiring to me. I have so many questions. Can you explain different aspects of our universe with this economic model, like the Big Bang, entropy and heat death? What is photons and is there even as deep as to explain different wavelengths? What about fusion, fission, strong interaction and weak interaction?
This analogy really blew my mind, and it has really expanded my view of existence.
You should check out Mirowski's book More Heat than Light, it's a history of how physics has drawn inspiration from economics and how economics has sought to emulate physics, especially with regard to the theory of value. He traces the development of the energy concept in Western physics and its subsequent effect on the invention and promulgation of neoclassical economics, the modern orthodox theory. I think it's an important book and would love to hear what you guys think about it.
Thank you for sharing
I found myself more interested in the Economics of this video than the Physics.
Get on it Brady, do what you do best!
Sneaky FedEx ad at 7:04
cheeky bastards!
Finally a practical application for my double major
Kinda cool to see Brady in the background filming away while asking questions :)
So I've finished QFT2 last year, and understand the Higgs mechanism, but this help understand economics a bit better.
Quite a lot of issues are still not clear to me about the analogy. First - what is the loss (objective) function of banks? Second - how does the equilibrium arises in bank politics? Is it static Nash solution?
9:20
Why do the other countries half their exchanges rates with the new dollar exactly ?
Because the US halved the price of gold
So where can I buy gold and sell it to a different market in different country?
13:19 "If you like". Yeah, we all like to think that we are a wart on natures back.
This video should be longer and with more numerical examples. I found it hard to follow and still don't fully understand some stuff. Also, maybe the camera should focus more on the diagram instead of Dr. Padilla's face.
If what is traditionally is referred to as the "Spiritual Dimension" is the Symmetry State before it is broken, and the introduction of mass creates what is referred to as "Physical Dimension" along with the symmetry breaking. Wouldn't that solve the whole science against spirituality discussion? Is that too WOOOOFFF for this channel?!!!
I don't know whether this is in the original paper, but you could use people going cross the bridges who are not speculators to represent the idea that the electric field actually affects the drift velocity.
So, what does Philip "analogies are unhelpful" Moriarty think about this paper?
I'd rather hear an physics used to explain economics.
Me too. I can see astrophysics gravity fields and supernovae lag being particularly analogous to aspects of the economy.
'an physics'
@@Triantalex Yeah, I reorganized my sentence, and left a stray word in there.
Brady, I think there is something wrong with the brightness correction.
Beautiful exposition!
I'm trying to decide on which topic to major in college, I love both chemistry and physics but I can't really decide what to choose. What do you guys think?
Great video, very interesting! (Also, if you look, you can see Brady's reflection in the window).
So in this analogy if money is energy then what are the different types of currencies? Different types of energy? And how does it just get converted?
Adding the gold in that analogy is weird if it is not put down on paper. I suggest you add a 4th country (let's call it Higg'sLand) that has the currency gold just like the other 3 have euros,dollars and punds; the 4th country is connected to the 3 other countries with different exchange rates just like USA is connected to Spain and has an exchange from dollar to euro with it, Higg'sLand has an exchange from gold to dollar with USA, from gold to euro with Span and so on. This would fix the problem of having two types of currency in one country and would also make the introduction of silver in the mix more intuitive when thinking about the interaction rules.
Yeap. 4th country was the first thing which occurred in my mind when he started to talk about gold
I am pretty new to physics, but would this be related to entropy? Is entropy really just mass taking form?
No. Entropy is related to the number of states that have the same thermodynamic measurements.
4:20 Brady's on fire! Great questions.
So does this mean that the banks can never change how much gold they buy with their currency? (This analogy holds true when converting it to physics?)
I guess I don't understand how the forces arise from the redundancy of currency change, it seems forces arise from exchange rates. Could the banks not change the exchange rates without this redundancy and forces would still exist right?
The glare! The reflection! The horror!!
Is adding the gold equivalent to adding a fourth country ("Goldlandia") and turning the picture into a tetrahedron? The price of gold in each country would be the banks on bridges to Goldlandia.
Brady, where do you get ideas for your videos ? Do you get like emails with questions, or how this process of making a video like this works at all ? do you have any rehearsals with profesors ? :D
It's so frustrating to see him say the flow of electrons (literally called "CURRENT" in physics) are the speculators as opposed to the CURRENCY, though I do see this is implied in the paper as well. Current = currency, charge carriers = commodities, voltage sources or wave propagation = speculators, current sources = banks, right? Or, am I so wrong? I feel like this f**ked up an extremely advantageous opportunity, something which is extremely basic and the entire beauty of the potential linguistic symmetry. There is no language which can express these tragic feelings. Imagine the movie Gravity except Sandra Bullock ends up drowning, or the fact that you just read these spoilers without a warning - but, no, this spoiler is not even within 4 light-years of this feeling.
Sixty Symbols Great video!
But...Brady's reflection on the window is visible throughout the video.
Best FedEx ad ever! 7:04
Economics can be used to (not only explain physics) explain any field if you truly understand it. Understanding economics (at advanced level) is much harder than understanding physics, chemistry, or any other field.
For those who have trouble understanding the analogy, or feel the analogy is incorrect, it is due to the complexity of economic variables, agents and preferences. Hence many assumptions had to be made (3 countries, banks = nonprofit org, no cost of changing er etc.). If real world economics is used, it will be "infinitely" more complex than the standard model and defeat the purpose of the paper (using economics to explain physics).
All in all, economics is science of human decision making and preferences. If all individuals are totally rational, economics will be exactly like physics, theoretically and empirically.
You cannot understand economics without understanding physics
phulbr Depend on individual preference but since everyone agrees economy is infinitely more complex than physics, for most people, economics is much harder to understand properly, especially in advance level.
ru40342 Economics is based on physics.
Best wrong quote of 2015.
ru40342 The reason why physics models cannot predict chaotic behavior is because there is alot we have not understood yet. If you have a fully accurate model that can describe our universe, then you would have no problem understanding modeling how an economy works because it is a system within a system.
_common myth the fields of pure science are more difficult to understand than social science._
You just contradicted your own statement. Social science is a field of SCIENCE.
didn't Henry fro MinutePhysics do something similar?
it would be nice to explain abit more maxwell's equations you were mentioning so it can fit better into this analogy, while i was listening, it seamed to me that i'm missing some kind of last piece to the puzzle, i just did not understand where is the money making, you said its gain in energy, but i thought everything in nature wants to go from high energy to low
Didn't MinutePhysics do something a lot like this? Were you guys using the same paper?
0:58 ...and why not Australia???
this video made me realise the reason why you use brown paper most of the times.
Rafael Cardozo why?
Wow!!! And awesome comments to boot!!
that's freaking confusing.
Does that mean that in a declining or rising economy, only the biggest & fastest speculators will always boom or bust? Aren't the algorithms that are fed into these super computers for nano second trades governed more by game theory & probability rather than the metaphor used in the Prof's argument? It sounds like the math is as indeterminate in the quantum world as it is in economic theory. However, I don't have any proficiency in maths.
Yes, I think I get it now. Thanks.
7:04 That FedEx van is going backwards! Straight out from Tenet.
What is a gauge field?
Amazing video.
This guy looks like the alien from *Mac and Me* (1988).
Great video - the analogy is a great one and it's amazing it matches Maxwell's equations!
I think the analogy makes perfect sense if your familiar with speculating. If your not, using an example from the analogy, imagine if gold actually was going to go to a million dollars a pound. You would buy some since its far less then that now, once it gets to a million you would sell. If the price goes down again you'd buy again, if it went up again you'd sell again.
The market forces would force you to keep doing transactions so long as you can keep making profit you would keep moving in the direction that you had to go.
This example should really be used to demonstrate a circuit. For an electromagnetic field, a million countries may be more appropriate.
This is super helpful for me a lay person 👍🏻👍🏻👍🏻
Quote from the paper:"So far, we have assumed that you can only carry money between
countries. Now, let us assume that you are also allowed to carry gold. So the new rule
is that you are allowed to carry gold and/or money between different countries.Gold has
a price in each country, which is set by the inhabitants of each country *independently* of
the others. A savvy speculator realizes that a new opportunity opens up. You can now
buy gold in one country, take it to the next, sell it, and bring back the money to the first
country"
Funny thing is, physics makes sense; economics does not ;D.
human emotions are in :(
this is a very interesting analogy
Gotta love the reflection in the window :)
Actually, it should be the other way around.
This is a really great analogy. Explaining it in these less abstract terms makes it a lot easier to understand.
Arbitrage, not speculation.
Awesome video :)
Brady, you're reflected in the window! We can see you and your plaid shirt. :)
love you guys. great video!!
And somehow, someone gets a Ferrari.
Sponsored by FedEx
as someone who studies Economics and I'm on my third year I can understand everything you said thanks !!
there a lot of shit in Economics that are mind blowing and confusing.
The end about Nature wishing that mass doesn't exist was great.
"So physics would be easier if physicists didn't physically exist."
I couldn't have said it any better, myself.
where's the brown paper??
To anyone that thinks this means gold is bad, the same analogy could have been made by replacing gold with a fourth country. It goes from three nodes with three vectors to four nodes with six vectors.
This helped me better understand the physical properties of the Higgs AND the reason for international exchange rates.
I'm sure it helped you understand the Higgs, but that's not how international exchange rates work =)
RulerEntertainment
Well it should, since this system actually makes sense.
can you guys make a video that doesn't use this weird analogy and just explains it in physics terms please
Hi can anyone make a video about turbulence in your chanel. thanks Brad
Spain as no gold, so true :)
Why is one of the banks name "bench"?
If you look at 4:20 you can see the reflection of a ghost in the window!
this was perfect.
Honestly, I think I understood the standard model better before this...
Isn't it more accurate to just say that highly simplified economics explains highly simplified physics? The real illumination in the simplification.
For someone who is in economics, and has no idea about physics, the analogy is hilariously accurate. Its 100% old economic theory, nothing about it is made up.
A bank that isn't in it for the money? Come on!
Jim Fortune At that point the analogy already broken down for me :D
CraftyF0X I kinda wonder why he uses an analogy based on a system that we prove over and over again we don't understand (economics) to explain a system we understand fairly well and are making progress in. (physics)
Jim Fortune We don't understand physics. If we did, we wouldn't even bother with it.
Realistically the ratio of produced works of physics to working models and even published works is probably no better than the ratio for economics haha
morgengabe1 Division by zero is undefined, so there is no ratio of produced works to working models in economics.
The struggle of having a tough time understanding economics...
Try to explain economics with physics and I'll get back to you.
Buttercak3
Sociophysics. It’s not new. :)))
Or Econophysics.
Actually there are models from chaos theory, simarly to brownian motion, which are used to describe 'fluctuations' in financial markets. There are many physicists who work in economy in this field :)
Banks are kinda like EM fields 🤔
Karl Marx- 1867
7:04 Fed Ex rides backwards and we can see Brady