The Buck Rolls On, We Hope

<knock, knock> “Door’s open. Come in but maintain social distance.”

“Hiya, Sy. Here’s your pizza, still hot and everything but no pineapple.”

“Thanks, Eddie. Just put it on the credenza. There’s a twenty there waiting for you. Put the balance on my tab.”

“Whoa, I recognize this bill. It’s the one that Vinnie won off me at the after‑hours dice game last month before all this started. See, I initialed it down here on the corner ’cause Vinnie usually don’t do that well. How’d you get it from him?”

“I didn’t get it from Vinnie, I got it from Al when I sold him a batch of old astronomy magazines. Vinnie must have finally paid off his tab at Al’s coffee shop.”

“Funny how that one bill just went in a circle. Financed some risky business, paid off a loan, bought stuff, and here I get it again so I can buy stuff to make more pizza. That’s a lotta work for one piece of paper.”

“Mm-hm. Everyone’s $20 better off now, all because the bill kept moving. Chalk it off to ‘the velocity of money.‘ If Vinnie didn’t spend that money the velocity’d be zero and none of the rest would have happened.”

“That sounds suspiciously like Physics, Sy.”

“Guilty as charged, Eddie. Just following along with what Isaac Newton started back when he was staying at his mother’s place, hiding out from the bubonic plague.”

Newton, after a day at the beach
while wearing an anti-viral mask

“What’s that got to do with money? Was Newton a banker?”

“Not quite, although the last 30 years of his life he headed up England’s Royal Mint. The core of his work during his Science years was all about change and rate of change. His Laws of Motion quantified what it takes to cause change. He developed his version of calculus to bridge between how fast change happens and how much change has happened.”

“Hey, that’s those graphs you showed me, with the wave on the top line and the slope underneath.”

“Bingo. Pandemics are a long way from the simple systems that Newton studied, but the important point is that to study his planets and pendulums he developed general strategies for tackling complex situations. He started with just a few basic concepts, like position and speed, and expanded on them.”

“Speed’s speed, what’s to expand?”

“Newton expanded the notion of speed to velocity, which also includes direction. From Newton’s point of view, the velocity of a planet in orbit is continuously changing even if its miles per hour is as steady as … a planet.”

“Who cares?”

“Newton did, because he wanted to know what makes the change happen. His starting point was if there’s any motion, it’s got to be at constant speed and in a straight line unless some force causes a velocity change. That’s where his notion of gravity came from — he invented the idea of ‘the force of gravity‘ to account for us not flying off the rotating Earth and the Earth not zooming away from the Sun. His methods set the model that physicists have followed ever since — if we see motion, we measure how fast it’s happening and then we look for the force or forces that can explain that.”

“Now I see where you’re going. That ‘velocity of money‘ thing is about how fast the paper changes hands, isn’t it? Wait, if Vinnie had put that twenty up on his wall as a trophy, then the chain would’ve been broken.”

“Right, or if Al had diverted it to buy, say, coffee beans. That’s why we say velocity of money and not speed, because the direction of flow counts.”

“Smelling more and more like Physics, Sy. Like, there’s astrophysics and biophysics and you’re coming up with econophysics.”

“Well, yeah, but I didn’t invent the term. It’s already out there, with textbooks and academic study groups and everything. It’s just interesting to use economics as a metaphor for physics and vice-versa. The fun is in seeing where the metaphors break down.”

“I see one already, Sy. Those forces — we all had different reasons to kick the bill along.”

“Good point. Now we figure out those forces.”

~~ Rich Olcott

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.