By Mark Buchanan – The principles of economics form the intellectual atmosphere in which most political discussion takes place. Its prevailing ideas are often invoked to justify the organization of modern society, and the positions enjoyed by the most wealthy and powerful. Any threat to these ideas could also be an implicit threat to that power – and to the people who possess it. Their response might be brutal.
In the real world, through the pages of scientific journals, in blog posts and in spirited Twitter exchanges, the set of ideas now called ‘Ergodicity Economics’ is overturning a fundamental concept at the heart of economics, with radical implications for the way we approach uncertainty and cooperation. The economics group at LML is attempting to redevelop economic theory from scratch, starting with the axiom that individuals optimize what happens to them over time, not what happens to them on average in a collection of parallel worlds.
The new concept is a key theme of research initiated by Peters about a decade ago, and developed with the collaboration of Gell-Mann and the late Ken Arrow at SFI, and of Alex Adamou, Yonatan Berman and many others at the LML. Much of this view rests on a careful critique of a model of human decisionmaking known as expected utility theory.
But there is one odd feature in this framework of expectations – it essentially eliminates time. Yet anyone who faces risky situations over time needs to handle those risks well, on average, over time, with one thing happening after the next. The seductive genius of the concept of probability is that it removes this historical aspect by imagining the world splitting with specific probabilities into parallel universes, one thing happening in each.
The expected value doesn’t come from an average calculated over time, but from one calculated over the different possible outcomes considered outside of time. In doing so, it simplifies the problem – but actually solves a problem that is fundamentally different from the real problem of acting wisely through time in an uncertain world. more>
By Eloise Touni – Nigerian law prohibits burning plastic cables, as well as acid leaching and other common methods used by John and his fellow pickers to reclaim valuable metals from discarded electronics. But minimal enforcement and a low awareness of the risks they are running means most pickers continue to regularly expose themselves to toxins that cause respiratory and dermatological problems, eye infections, 
By Dwyer Gunn – The assumption that investors hold rational expectations of market returns is central to many asset pricing models. However, in recent years, surveys of investors have revealed that market participants’ reported expectations often deviate from the objective predictions of financial models working with large pools of data. One theory is that these deviations are the result of persistent pessimism on the part of investors: survey respondents, according to this hypothesis, are discounting the rationally expected rate of return to reflect the risk of investing in stocks.
By Elizabeth Taylor – The phrase “fail to prepare or prepare to fail” comes to mind as we enter an era in which governments and communities must band together to mitigate climate change. Part of what makes our next steps so uncertain is knowing we must work together in ways that we have – so far – failed to do. We either stall, or offer up “too little, too late” strategies.
By Jenny Carless – “My aim is to empower my audience as active storytellers,” Maria Brzozowska says. “It’s very valuable for me when my audiences are able to relate to my illustrations and create or find pieces of their own stories. It’s like an invisible connection between us.”
By Milton Friedman – Do free markets make free men, or do free men make the free markets?
