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Should we make world economy more like a hologram or a fractal?

24th March 2020

The recent coronavirus brought a lot of turmoil to economy. We are well aware that the economy is endangered with a total collapse. Apart from the extreme lack of clarity of the contemporary economic financial system the main reason is the danger that the supply chains will be broken – which can be compared with a heart attack or brain stroke. Supply of goods from China, supply of raw materials from Africa etc. Some of these supply chains cannot be easily changed e.g. concerning most specialized goods or rare materials. But many of them can. We just overlooked it outsourcing everything to cheaper places. Maybe we should make our economy more like a hologram? Like a holographic picture which contains the image even if you have a small piece of it? So that when a county is isolated most of its goods can still be produced in it? That is how it was in the past. There was a blacksmith in each large village, who could make an axe. Most homesteads produced their own food. Only very few materials were imported such as metals or salt.

It is however difficult to decide how such holographic properties of economy should be achieved. Probably the only way would be more frequent incidents of pandemics…

Applying holograms to security means in an ideal situation it would be good to have a second home in case (unaffordable for some, but see Scandinavian countries where it is often a norm to live in a city and have a second summer home), also some shelter in the woods and basic staff packed in a suitcase in case you have to suddenly escape somewhere far.

Apart from holograms I want you to look at fractals which actually have the features of holograms, they are self-similar. Fractal is (following Wikipedia): “a curve or geometrical figure, each part of which has the same statistical character as the whole. They are useful in modeling structures (such as snowflakes) in which similar patterns recur at progressively smaller scales, and in describing partly random or chaotic phenomena such as crystal growth and galaxy formation”. Nature likes fractals and many elements of nature have fractal structure, e.g. snowflakes, fern leaves, root systems. Now imagine that economy is a fractal. Any features in economy which are highly centralized, dominated by large corporations are not fractals. But now image the world in which there are large shops, medium shops, small shops and individual sellers selling a product. This is like a fractal. In this case if you shut a large shop to avoid the epidemic you can still go shopping to a small place. If you created monopolies or destroy small commerce and firms such a system is not resilient in times of crisis.

The pictures below show the most well-known example of a fractal, so called Sierpiński carpet (https://en.wikipedia.org/wiki/Sierpinski_carpet) and Sierpiński triangle (https://en.wikipedia.org/wiki/Sierpi%C5%84ski_triangle), invented by Polish mathematician, Wacław Sierpiński, a from the University of Warsaw.


from wikipedia.org by Karocks Orkay – one of the steps of Sierpinski carpet, CC BY-SA 3.0

From Wikipedia.org, by Beojan Stanislaus, CC BY-SA 3.0

Actually you should model your life like a fractal. You should have one or two main sources of income but also other minor possible ways of surviving. Main hobbies and secondary hobbies which can be taken up e.g. when you go to prison (learning Chinese characters is useful then as it will take you a few years). I am always amused by people asking me if I have a few good friends and loads of acquaintances. I say both as I try to apply fractal geometry to all aspects of my life.

This could also apply to medical systems. In order to survive in times of epidemics we need large hospitals but also a diversified care system. Small hospitals may be more resilient in times of epidemic – in case one is shut sue to infection, another nearby can still work. And that is why we need single medical practitioner in the countryside (I saw it in China where they would have a nurse or a doctor living in a really remote place) as well as good knowledge of medicinal herbs, most importantly those which are local and can be sourced from your garden or meadow. The population who have a sauna in each homestead and can produce home-made moonshine is also more resilient as strong spirits and heat can also be important in medicine.

By the way there are still very few applications of fractals in economy. But see this interesting article from Scientific American by Benoit Mandelbrot “How Fractals Can Explain What’s Wrong with Wall Street”:

https://www.scientificamerican.com/article/multifractals-explain-wall-street/

And see this paper:

Takayasu M, Takayasu H. Fractals and economics. Complex Systems in Finance and Econometrics. 2011:444-63.

https://www.researchgate.net/profile/Misako_Takayasu2/publication/227183242_Fractals_and_Economics/links/0c96052e8613f124c7000000.pdf

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