Turbulent Economy Hypothesis


In the study of fluids, propagation of energy from large scales to small scales occurs when the diffusion of momentum is small.

Can we extend this to economics? Might the propagation of wealth from large scales (the rich) to small scales (the poor) occur when the diffusion of economic momentum is small?

In the current system, economic momentum diffuses very quickly. If a good investment is discovered (e.g. a promising stock), many large scale players will chase after it together.

A small-diffusion system, then, would be a system where economic individuals (people, companies, industries) find their economic motivations independently, not through the study of other people’s economic actions. Is this not innovation?

In other words, might an economy that stimulates innovation intrinsically lead to an equitable distribution of wealth?


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