Introduction

Why should a physicist such as the present author write about economics? Indeed, at first sight, there seem to be fundamental differences between physics and economics. Let us briefly discuss some typical differences. Physics deals with comparatively simple objects, which are studied under well-controlled conditions so that the experiments can be repeated again and again under the same conditions. The change of one or a few parameters allows the experimenter to study their influence on the experimental outcome in detail. In physics, it is rather generally believed that its laws are eternally valid and applicable to the whole universe. One of the outstanding features of the physical laws seems to be their capability to predict the future. This is clearly demonstrated, for instance, when a rocket is sent to the moon. Below we shall see that some of these statements are no longer valid, as has been shown by more recent developments.

Let us now turn to economics. It deals with systems that are far more complex than any physical system. In it, psychological aspects play an important role, and a number of important economic processes are governed by expectations about future events, hopes and fears. On the other hand, scientific prediction of the future of any economic system seems to be extremely difficult. In addition, practically no experiments under well-defined circumstances are possible. In other words, economics is characterized by its historicity.