Quantum physics may not seem much to have to do with risk and investing, but with subjects like psychophysics explaining the statistical behavior in psychological behavior, it’s just a matter of time that science could explain more of markets. John Gribbin’s biographic work on Schrödinger has a lot of jargon relevant for understanding universal behavior. Apart from wave nature, the book talks about a multiplicity of waves, symmetry of ‘time’, statistical laws, natural behavior, entanglement, natural events and how everything depends on probability. Uncertainty and chance are a part of science. Laws can co-exist with uncertainty and error. This is what makes quantum physics a bit incomprehensible. As according to behavioral finance, the majority can’t calculate and comprehend probability (uncertainty).

“Though the second law of thermodynamics is a statistical rule that applies to a very large number of molecules and atoms, but individual atoms and molecules are unaware of it.”

“Chance (probability) is a common root of all rigid conformity to Law that has been observed, at least in the overwhelming majority of natural processes, the regularity and invariability of which have led to the establishment of the postulate of universal causality.”

Putting simply, the frequency and regularity of chance (randomness) gives an illusion of causality.

“All natural events are an accumulation of chance occurrences, and at that level of individual atoms there are no ‘laws of nature’.”

On one side this is hard to believe, but on the other side, only a framework that explains inefficiency with efficiency, determinism with indeterminism, order with chaos, waves with particles can be above the law (laws) of nature.

“A gradual disappearance of the thermodynamic arrow the closer we get to the initial state of the universe. In other words, there was no time in Big Bang”

This partially proves Saint Augustine correct when he said “There was no Time before the Universe”, but on the other challenges, confirms, reconciles Boltzmann’s brain, life is an error (fluctuation) and order could exist in chaos. Whereas Time existing before and after the universe is a question that comes later after we reach the respective framework that is above the natural laws and can explain natural events and can unify science.

“Everything depends on probability"

Schrödinger’s wave equation is a probability wave.”

“The most important thing to take away from Multiverse, the only satisfactory way to explain why quantum computer’s work is Schrödinger’s idea that the wave function never collapses.”

Non-collapsing of waves is a way to explain that the framework is robust and can hold on and explain both classical and quantum situations.

“It is not possible to send any messages or useful information faster than light.”

Information is natural, so light being a relevant invariant for a natural transmission of information seems valid.

“Indeterministic determination could be transformed into a deterministic one.”

Efficiency transforming into inefficiency, momentum transforming into reversion, phase changes etc.

“Copenhagen interpretation was rotten. Schrödinger’s ‘all is waves’ view that life feeds on negative entropy. Thermodynamics suggests that though entropy increases in a closed system – that ordered systems become disordered. Life is clearly working in the other way; it seems to create order out of disorder; evades the decay to equilibrium. Living things take in negative entropy from their surroundings in the form of food, which is in an ordered state. The essential thing in metabolism is that the organism succeeds in freeing itself from all entropy it cannot help producing while alive.”

This again is an illustration of a balance; how disorder feeds on order; how bubbles emerge from crisis lows, which sets new economic order.

“The gene is like an aperiodic crystal. In an ordinary (periodic) crystal of a substance such as common salt there is an endless repetition of the same basic unit in a perfectly regular pattern that conveys very little information and contrast this with ‘say’, a Raphael tapestry, which shows no dull repetition, but an elaborate, coherent, meaningful design, even though it’s made up of a few simple identical units.”

This seems to connect to Herbert Simon’s work which explains how complexity is built from simple but hierarchal structures (units). This also echoes fractal structures, so similar, but still so different and original.

“Particles which have neither well-defined trajectories nor well-defined individuality simply is not particles. It is better to regard a particle not as a permanent entity but as an instantaneous event, sometimes these events give the illusion of permanent beings. Instead of thinking of two separate particles, with two separate but entangled wave functions that interact with one another in some spooky fashion, we should think of a single wave function which describes the whole system.”

This again suggests the wave framework, a robust cohesive explanation.

“Many worlds' interpretation.”

There is no case outside the confluence of waves, the multiplicity of interaction, all possible alternative histories. ‘Pasts’ at the quantum level being probabilistic in nature.

“The world is governed by statistical laws. Schrödinger’s wave equation had a similar structure to the equation used to describe diffusion process, such as the way molecules from an open perfume bottle spread through the air. According to statistical mechanics, a diffusion equation can also run in reverse. To find the distribution of intermediate times is to combine the solution for the equation for going forward in time with the one going backward in time.”

Here it’s about geometry. If time is symmetrical (also mentioned in the book) then arrow of time is more human than something relevant for “time” itself. The framework should work both to recreate the past or the future.

“Although a localized group of waves (a wave packet) can indeed behave in some waves like a particle, this can only be achieved if the packet contains many waves with different wavelengths.”

This is what hit me as Schumpeter talked about the multiplicity of waves prior to Schrödinger. A similar structure for Benner, or the wave nature of Elliott or Dow. Strange isn’t it? If you thought technicians were pattern blind looking at waves in waves, we have the creators of quantum physics doing the same “mistake” of talking about the multiplicity of waves.

“As the statistical character of quantum theory is so closely linked to inexactness of all perceptions, one might be led to the presumption that behind the perceived statistical world there still hides a ‘real’ world in which causality holds. But such speculations seem to us, to say it explicitly, fruitless and senseless.”

Causality is an illusion, the probability is the only reality.

“The statistical process is important even in most fundamental situations of physics.”

Statisticians should take note.

“Invariants establish the true structure of an object.”

Universality is about invariants.

“Beautiful interior and wealth of mathematical structures nature had so generously spread in front of me.”

Schrödinger was studying patterns.

“Boltzmann’s statistical interpretation applied not just to electromagnetic oscillators but to energy, to the electromagnetic radiation itself.”

If physics relies and relied so much on statistics how can economics or psychology be any different?