The Fundamental Law of Economics FLoE: A finitely (not infinitely) converging algorithm addressing simultaneously the dual variables price and quantity represents the mathematical formulation for the Economic Globalization of the Planet. The FLoE has been derived from the Constructal Law and is a complement to this law. Constructal Law: For a finite economic system to persist in time it must evolve with freedom such as to increase access to what flows. The problem with economic systems is that they are not evolving with freedom. There is always a resistance to flow. Therefore, we need a Corollary to the Constructal Law: For a finite economic system to evolve with freedom the resistance to flow must be contained. What is this resistance? Is this resistance significant? Can this resistance be contained? What is this resistance: resistance in economic systems comes from the uninspired involvement of the human factor. Humans are acting on one of the dual variables price or quantity allowing the free variance of the dual variable to create unintended consequences. A businessman is putting his product out on the global market differentiating the prices such as to extract all the value. Market agents are buying this product on low priced markets and are selling it on high priced markets, underselling the producer and taking away some of the producer's revenue; sometimes as much as 50%. This is arbitrage capital and is exploiting price differentials but not creating value. The market arbitrage capital is a nonproductive capital and therefore resistance to flow. Is the resistance to flow significant: economist Nomi Prins estimates global market distortions mainly due to all sorts of market arbitrage to $150 trillions a year. Elon Musk is going after this $150 trillion market. He recently developed a Sofware which is supposed to bring in more revenue than all of his other businesses combined. Can this resistance to flow be contained: Could be contained if we somehow could control both dual variables - price and quantity. Entanglement is the solution. Entanglement is a fundamental property of matter that defines the universe binary and gives rise to time and space. In quantum entangled particles assume instantaneously (zero time, zero space) complementary statuses. You impose a horizontal resonance on one of the particles, the other is assuming instantaneously a vertical resonance. The entangled particles are in equilibrium. My assumption and Niels Bohr assumption in the Correspondence Principle is that entangled dual variables in classical physics behave identical to the entangled particles in quantum. Price and quantity assume complementary statuses only in measurable time and space. Entanglement gives rise to time and space. From zero in quantum to infinity for infinite complex systems. Price goes up, the entangled variable quantity goes down. Quantity goes up, the entangled variable price goes down. We have proven my assumption and Bohr's Correspondence Principle on a market model in geometric programming. Some postulates: 1. Timespace expands directly proportional to the complexity of the system. 2. Timespace expands inversely proportional to advancements in science / technology. 3. Timespace expands to infinity for infinite systems. In an example we reviewed the findings from a study on five medicines commercialized in Europe. We have reported and actual measured parallel trade. Reported parallel trade is always less than actual parallel trade. Reasons could be two - faulty market statistics, more likely intentionally under reporting parallel trade to justify the legality of parallel trade. We resolve the economic equilibrium problem and find parallel trade returned to the producers of the medicines and consumers in percentages and dollar values. $2 billion are returned to the five producers and $800 million to the consumers. This is an important finding. Parallel trade become legal under the claim that it benefits consumers. From our study it turns out that parallel trade is hurting consumers by $800 millions. Has parallel trade been legalized under a false pretense? Conclusions and comments: the finitely converging algorithm we derived from the equilibrium of electrical circuits. The laws that govern the equilibrium of electrical circuits are therefore also governing the economic equilibrium problem. Therefore, ECONIMCS IS PHYSICS. Historically it has been proven that democracy and capitalism are the most effective ways to produce the energy supporting life as we know it. However, capitalism is coming with a problem - polarization of wealth. The buying power is migrating up to the 5% - 10% of rich people who cannot possibly absorb any more the entire aggregate supply and we run into the painful recessions and depressions. The natural function of recessions and depressions is to redistribute wealth restoring the balance of buying power between the rich and the many. Democratic governments are currently attempting to redistribute wealth by fiscal and / or monetary policies with at best questionable results. Redistribution of wealth historically has been also done by violent means - revolutions and Socialism. Socialism is the least effective way to redistribute wealth as it ends up redistributing poverty. The most effective way of redistributing wealth is by the laws of physics. And here comes into play the FLoE. As in the example above the resistance to flow is redistributed to the five producers - $2 billion, and to the consumer $800 million. The balance of buying power is preserved. The economic wave is not cresting anymore and al also not crashing any more - no more recessions and depressions. Economics is an elastic medium that can be studied with the laws of elasticity from physics. ECONOMICS IS PHYSICS.
Choices:
Economics is not physics. Counter argument? Arguments in the 'More information for the question need to be expanded FLoE will not holding true in all instanced. Give examples. Democracy and Capitalism are not the most efficient way to produce the energy sustaining life. Which one is? Economics is not an elastic environment and cannot be studied with the laws of elasticity in physics. Why not? Economic wave will crest and crash even under the operation of the FLoE. Explain.
