In this podcast, physicist César Hidalgo from the Massachusetts Institute of Technology explains why he thinks physics could help us to understand economics – and in particular why some nations are financially stronger than others. Speaking to Matin Durrani – editor of Physics World – Hidalgo explains how concepts such as information, order and organization are key to that understanding. To him, economies are networks of individuals and people – and what is important is how know-how spreads from one place to another and also why that knowledge sometimes fails to spread
It is a novel approach and one that has led to some interesting ideas, including Hidalgo’s notion of the “personbyte”, which is the total amount of information that any one individual can hold. He also extends that idea to businesses, leading him to introduce the concept of a “firmbyte”. Economies, in Hidalgo’s vision, are essentially networks of interacting people and firms – and what those systems can do depends on the skill people have and how those skills fit together.
Now, if you think it is unusual that a physicist should be straying into such territory, you are not wrong. But then César Hidalgo is no ordinary physicist. As he explains in the podcast, “I’m not very comfortable with labels. I try to borrow knowledge from whatever discipline is available to get the best possible answer. So sometimes physics inspires me. Sometimes economic sociology inspires. Sometimes I draw inspiration from design. I’m not picky. As long as it gets the job done, I’m up for it.”
If you want to find out more about Hidalgo’s new book Why Information Grows, check out the October 2015 issue of Physics World magazine, which contains a review of the book by the science journalist Mark Buchanan. The review can be read online at physicsworld.com or through our digital magazine by downloading the Physics World app to your smartphone or tablet.