Chapter 4 epiphany by the sea

epiphany by the sea Everyone has their own way of doing research, Arthur said.If you think of the problem you're studying as a medieval castle with walls around it, then many people approach it like a ram fighting straight for the castle.They would rush frantically at the gates, destroying the fortifications with all their knowledge, strength and ingenuity. But Arthur never felt that fighting rams was his forte.He said: "I like to meditate for a long time first. I just camped outside the city, waiting and thinking, until one day-maybe when I turned to study a completely different problem-the drawbridge of the city gate suddenly let go. When you get down, the guards say: 'We surrender.' The answer to the problem is immediately presented to you."

This is exactly the case with his research on the economics of increasing returns. "Increasing returns," he later called this thinking about economics.At that time he had been stationed outside the city for quite some time.His McKinsey, Bangladesh trip, his general disillusionment with conventional economics, and his discovery of idiosyncratic forms were all about thinking and waiting, not definitive answers.He still remembers the moment when the drawbridge of the city gate was lowered towards him. It was April 1979, and his wife, Susan, had just finished her Ph.D. dissertation in statistics and was exhausted, so Arthur arranged for himself an eight-week annual sabbatical from university so he could leave the International Institute for Applied Systems Analysis , went to Hawaii with my wife to take a good rest.For him, the trip to Hawaii was a vacation that was part work, part rest.He worked on his research paper at the East-West Population Institute from nine to three every day, while Susan continued to sleep at home—she slept fifteen hours a day.When it was close to evening, they would drive to Huolu Beach on the north side of Lake Ou, which was a small deserted beach.They surf there, or lie on the beach drinking beer, eating cheese, and reading.On a lazy afternoon not long after they arrived in Hawaii, on the beach, Arthur opened a book that he brought with him and was going to read on the beach, Horace Freeland. The Eighth Day of Creation by Horace Freeland Judson.This is a 600-page tome of the history of molecular biology.

"I was mesmerized by the book," he recalls.He read about how James Watson and Francis Crick discovered the double helix structure of DNA in 1952, and about how the genetic code was unraveled in the 1950s and 1960s. , Read how scientists deciphered the complex helical structures of proteins and enzymes step by step.Arthur, a constant loser in the laboratory ("I was in the dark in all the laboratories," he said), also read about the desperate efforts of molecular biologists to establish the science of molecular biology. Numerous experiments and arduous labor: They had to do various experiments to answer questions, and it took months and months to arrange each experiment and purchase equipment. Bring the taste of victory and frustration. "Gardson can bring the drama of science to life."

But what really inspired him was that the book made him realize that the whole of molecular biology The physical realm is a chaotic world—the inner world of a living cell is at least as complex as the chaotic human society.But that's science.He said: "I found that my previous understanding of biology was very naive. When you have been trained like I have, you have been trained in mathematics, engineering and economics, you also tend to see science as a kind of science that has to be able. Things expressed in theorems and mathematics. But as soon as I move my eyes to life outside the window, to organisms and nature, I somehow feel that science has become powerless. How do you write for a tree or a paramecium Mathematical equations? You can't write. To my vague conception, biochemistry and molecular biology are just classifications of this type of molecule and that type of molecule. These classifications don't help you understand anything. "

This is a wrong understanding.Gardson uses every page of his book to prove to Arthur that biology is as much a science as physics.This chaotic, organic, non-mechanical biological world actually operates according to certain laws.These laws are as profound and as profound as Newton's laws of motion.Inside every living cell is a long, helical string of DNA molecules, a series of chemically deciphered instructions and genes.Together they make up the genetic blueprint for the cell.The genetic blueprint of one organism may be completely different from another, but the genetic code used by both organisms is essentially the same.And the genetic code in both organisms would be deciphered by the same molecular decoding mechanism.Genetic blueprints become proteins, mucous membranes, and other cellular structures in the same molecular atelier.

The association of all life forms on this earth brought new inspiration to Arthur.At the molecular level, all living cells are strikingly similar, and their basic mechanisms have universal implications.But even a tiny change in the overall genetic blueprint can bring about huge changes in an entire organism.The movement of a few molecules here and there may be enough to make the difference between brown eyes and blue eyes, between a gymnast and a sumo wrestler, between a healthy body and sickle cell anemia.Yet more molecular movements, accumulated over millions of years of natural selection, may produce the differences between humans and chimpanzees, between figs and cacti, between amoebas and whales.Arthur recognized that in the biological world, small opportunities can be expanded, exploited and accumulated.A small accident can change the outcome of the whole thing.Life is evolving, and life has its history.Perhaps, he thought, that was why the living world seemed so spontaneous and organic.By the way, this world is alive.

And it made him think that maybe that was why the perfectly balanced world that economists imagined always struck him as rigid, mechanical, and lifeless.In the world of economists, few surprises happen.Moreover, small changes in the market will disappear quickly if they appear.Arthur could not conceive of a theory less in line with real economic conditions.In real economic life, new products, new technologies, and new markets will continue to emerge, while old products, old technologies, and old markets will continue to disappear.Real economic life is not a machine, but a living system as spontaneous and complex as the world of molecular biology that Gardson showed him.

He read on, and there was more to come.Arthur said: "Among all the dramatic plots in this book, what attracted me the most was the research of Francois Jacob and Jacques Monod." While working at the Institut Pasteur in Paris, Jacob and Jacques Monard discovered that small clusters of genes of a few thousand genes arranged along a DNA molecule can act as small switches.Flipping one of these switches, such as exposing a cell to a particular hormone, triggers a gene that becomes active to send a chemical signal to its companion gene.The signal then travels back and forth in the DNA molecule, which triggers switches in other genes, so that some of these genes turn on the switch and others turn off the switch.These newly switched genes then signal (or stop signaling) on ​​their own.As a result, more gene switches are driven to act on or off, thus converging into a small cascade, until the cell body to which these genes belong reaches a new, stable and characteristic form, the changing movement of these genes will stop.

For biologists, this discovery has extremely significant implications. (Jacob and Monard both won the Nobel Prize for this seminal discovery.) This means that the DNA in the nucleus does more than just draw the blueprint for the cell, designing how to make this or that protein. Class work, it is actually the foreman responsible for the entire cell construction.Roughly speaking, it is a computer at the molecular level.This computer tells the cell how to build itself, repair itself, and how to interact with the outside world.Jacob and Monard's discovery also solved a long-standing mystery: how a fertilized egg divides itself and turns itself into muscle cells, brain cells, liver cells and other different cells, so that He turned into a newborn chick.Different patterns of genes that are activated give rise to different types of cells.

When Arthur read "The Eighth Day of Creation," he was completely overwhelmed by a mixture of reminiscence hallucinations and agitation.Here again idiosyncratic forms appear: a whole sprawling set of idiosyncratic forms capable of self-formation, self-evolution, self-adjustment to external conditions, self-continuity.Nothing could remind him of Wanhuajian more than this.In a kaleidoscope, a small number of beads held in place create a pattern of shapes that remain in that pattern until you slowly turn the kaleidoscope so that the beads inside suddenly cascade and form a new configuration. pattern.That's just a handful of beads, yet the patterns they can create are endless.Somehow, Arthur's inability to articulate his thoughts seemed to be the nature of life.

After reading Gardson's book, Arthur scoured the University of Hawaii bookstore, scoured all the books on molecular biology he came across, and returned to the beach to devour them. "I was drawn to the books, mesmerized by them," he said.Upon his return to IIAA in June, he turned to purely intellectual pursuits.But at this time, he didn't know how to apply his new findings to economic research.But he could feel that he already had the most basic clues.He has been reading biology books all summer.In September, at the suggestion of a physics colleague at the International Institute for Applied Systems Analysis, he began to delve into the contemporary theory of condensed-matter physics: the inner mechanisms of liquids and solids. He was as shocked as he had been at Holo Beach. It had never occurred to him that physics and biology were similar, and physics was indeed different from biology.The atoms and molecules that physicists usually study are much simpler than the proteins and DNA that biologists usually study.However, when you look at how large numbers of simple atoms and molecules interact, you find something akin to biology: small initial changes can lead to radically different outcomes, and simple dynamics can produce astonishingly complex behavior.The number of specific patterns that can be produced with a small amount of matter is almost endless.Arthur did not know how to define the similarity between the two on a deep level, physics and biology have the same phenomenon. But on the other hand, there is actually a very important difference between the two.Physicists study much simpler systems that can be analyzed using rigorous mathematical formulas.Suddenly, Arthur began to feel at home.If he still had doubts in his heart before, he now understands that what he is facing is a scientific problem. "These are no longer just vague concepts," he said. He was deeply impressed by the work of the Belgian physicist Ilya Prigogine.He later discovered that many physicists considered Prigogine to be a man who sold himself to an unbearable degree.He often likes to exaggerate the significance of his achievements.But in any case, he is undoubtedly an author who can arouse the interest of readers. It is no accident that in 1977, his outstanding work in the field of "non-equilibrium dynamics" led the Royal Swedish Academy to award him the Nobel Prize. Basically, the question Prigogine asks is: why is there always structure and order in the world?Where do structure and order come from? This question is much harder to answer than it sounds, especially when you consider that the general tendency of the world is to decay.Iron rusts, fallen trees rot, and hot water in a bath gradually cools down to the same temperature as the things around it.Nature seems to be more interested in dismantling structures, and blending things into some average, than in establishing structure and order. Indeed, the process toward disorder and decay seems never-ending.Nineteenth-century physicists summarized this phenomenon as the second law of thermodynamics.This law can be paraphrased as: "You can't recover a broken egg." According to this law, if things are left to their own devices, atoms will mix as randomly as possible.This is why iron rusts: Iron atoms are constantly trying to bond with oxygen atoms in the air, forming iron oxide.That's why the water in your bath gets cooler: the fast-moving water molecules on the surface gradually transfer their energy as they slam into the slower-moving molecules in the air. However, despite these phenomena, we can still see that there is indeed order and structure around us.Fallen trees will rot, but new trees will continue to grow.So how can the formation of structures be explained by the second law of thermodynamics? As Prigogine and others realized in the sixties, the solution lies in the innocuous-sounding phrase: "Let it be..." In the real world, however, atoms and molecules are almost never It is impossible to let it develop, at least it is impossible to completely let it develop.They almost always expose themselves to some kind of energy and matter flowing in from the outside.If this influx of energy and matter from the outside is sufficient, the steady degradation described by the second law can be partially reversed.In fact, in a certain limited area, a system can spontaneously form a complete and continuous complex structure.Perhaps the most familiar example is a pot of soup sitting on the stove.If we don't light the gas, nothing will happen. The temperature of the soup on the stove remains the same as the room temperature, that is, the soup is in equilibrium with the objects around it.If we light the gas and turn the heat down very low, not much will change.But the structure on the field is no longer in equilibrium.The heat energy rises through the bottom of the pot, but the difference is not large enough to cause turbulence.But when we adjust the fire a little bigger, the structure of the soup will be more out of equilibrium.The increased heat flow suddenly made the soup unstable.The tiny, random movements of the soup molecules can no longer bring the cold outside to zero equilibrium with the fire.Movement in one part of the soup began to intensify.One part of the liquid starts to rise and the other part starts to fall.Soon, the pot of soup developed a large area of ​​motion: the hexagonal features of convective bodies could be seen from the surface of the soup: liquid rose from the middle of each body and fell along the edges.The soup begins to develop order and structure.In a word, the whole pot of soup began to be heated slowly. Such self-organizing structures are ubiquitous in nature, Prigogine said.Lasers are a self-organizing system.Particles of light, known as photons, can spontaneously string themselves together to form a beam of light.All the photons of this beam move in unison, in close succession.A hurricane is a self-organizing system propelled by a steady stream of energy from the sun.This solar energy whips up strong winds and sucks water from the ocean, turning it into rain.A living cell, although too complex to express mathematically, is also a self-organizing system.The cellular system survives by absorbing energy from food and expelling energy in the form of radiated heat and excretions. Prigogine wrote in one of his articles that it is also possible to think of the economy as a self-organizing system.In this system, the market structure is organized and operated spontaneously through the demand for labor, goods and services. Arthur sat up as soon as he read the words. "The economy is a self-organizing system!" That's exactly what he meant, and that's what he's been thinking about since he read "The Eighth Day of Creation," though he didn't know how to say it before.But what he wanted to express was Prigogine's law of self-organization and spontaneous dynamics of living systems.Now Arthur finally knew how to apply these laws to the economic system. These realizations seem so obvious in hindsight.Expressed in mathematical terms, Prigogine's central idea is that self-organization depends on self-reinforcement: when conditions are right, tiny events expand and develop rather than tend to disappear.This is exactly what Jacob and Monard discovered in their DNA studies.Arthur says it dawned on him: "The engineering world calls this phenomenon positive feedback." Weak molecular motions can become convective motions in cells, gentle tropical winds can converge into hurricanes, seeds and embryos can grow into full-fledged hurricanes. Mature living organisms.Positive feedback appears to be an essential condition for producing change, unexpected events, and even life itself. Positive feedback, however, is precisely what is absent from conventional economics.On the contrary, neoclassical economics assumes that the economy operates exclusively under negative feedback: that is, by the tendency of small events to disappear.He remembers being a little confused hearing the economics professor repeat the point at Berkeley.Of course, they didn't call this negative feedback.In economic dogma, the vanishing tendency is articulated in the concept of "diminishing returns": that is, the second candy is not as tasty as the first.In other words, applying fertilizer twice will not get double the harvest.It can also be said that the more times you do anything, the more ineffective, unprofitable, and boring it becomes.Arthur saw that the end result of both negative feedback and diminishing returns is the same: Negative feedback prevents small destabilizing factors from getting out of control and disintegrating the physical system of objects, while diminishing returns ensures that any company, any product Neither will be powerful enough to control the entire market.When people get tired of sugar cubes, they turn to apples or something else; when all the best hydroelectric dam sites have been developed, utilities start building thermal power plants; when fertilizer is no longer needed When it is applied, farmers will give up using chemical fertilizers.Indeed, the concept of negative feedback, or diminishing returns, underscores the idea that the economy is harmonious, stable, and in equilibrium as described throughout neoclassical economics. But already as an engineering student at Berkeley, Arthur couldn't help but be puzzled: What would happen if positive feedback happened in economics?Or in economic terms: what if the phenomenon of increasing returns occurs? "Don't worry about it. Increasing returns happen very rarely. And when they do, they don't last long," his teachers assured him.Since Arthur couldn't think of any special case to prove it, he stopped asking and turned to other things. But when he was reading Prigogine, all these memories came flooding back.Positive feedback, increasing rate of return, maybe this phenomenon really happens in economic life.Perhaps positive feedback and increasing returns could explain the exuberance, complexity, and abundance of the real economic life around him. Perhaps that is the case.The more Arthur thought about it, the more he felt that the concept of increasing returns would bring about enormous changes in economics.Take efficiency as an example. Neoclassical economics leads people to believe that the free market will always select the best and most efficient technology.And the free market does a good job of that.But Arthur thought, why do we use the QWERTY keyboard design?In the western world, the QWERTY keyboard design is used in almost all typewriters and computer keyboards. (QWERTY is the spelling of the first six letters of the design's name.) Is this the most efficient arrangement for a typewriter keyboard?This is not the case.In fact, QWERTY was designed by an engineer named Christopher Scholes in 1873.He deliberately designed it like this to slow down the typist's typing speed.Because at that time, if the typing speed of the typist was too fast, the typewriter would easily jam.At that time, the Remington Sewing Machine Company (the Remington Sewing Machine Company) mass-produced a typewriter with a keyboard made of this design.This means that many people who type have started to learn to type on this keyboard.This in turn meant that other typewriter companies began to produce and sell typewriters designed with QWERTY keyboards.That means more people who type can learn to type on a typewriter with that keyboard, and so on.This, Arthur thought, is what the owner gets, and this is the rate of increasing returns.Now, the QWERTY keyboard design has become the standard keyboard used by thousands of people, and keyboards of this design have basically occupied the market forever. Look again at the rivalry between Beta and VHS in the mid-seventies.By 1979, it was clear that the VHS format was monopolizing the market, although experts believed it was slightly inferior to Beta in terms of technology.What's going on here?Because the VHS product was lucky to have a slightly larger market than the Beta product at the beginning.Although the two are different in terms of technical level, this extra market share has brought great benefits to VHS products: stores selling video tapes do not like two formats of video tapes with the same content, and consumers do not like it. Don't like having so many discarded VCR format tapes at home.So everyone wants to buy the mainstream product in the market, which makes the VHS product occupy a larger market.In this way, the initially small differences were rapidly enlarged.This is another example of increasing returns. The examples are endless.Let's look again at the captivating idiosyncratic form.Neoclassical economics tells us that the development of high-tech companies is always evenly distributed, because there is no reason why these companies should be established in one place and not another.In real life, however, new high-tech companies will of course concentrate in California's Silicon Valley, Boston's Highway 128, and other high-tech industrial areas in order to be close to other high-tech companies.The owner gets, the world has structure.Arthur suddenly realized that this is actually why structure occurs everywhere: intricately intertwined positive and negative feedbacks cannot keep things from forming systems.Imagine, he says, water being spilled on a tray that has been wiped down perfectly.Drops of water sprinkled on the tray create an intricate pattern.The droplets form this pattern because of two opposing forces at play.One is the gravitational force of the earth, which tries its best to pull the falling water droplets and cover the entire tray, so that the water forms a very thin and flat water film on the surface of the tray, which is negative feedback.At the same time, however, there is also surface tension, the force that attracts water molecules to each other.This force causes the water molecules to coagulate with each other to form compact droplets, which is positive feedback.It is the intertwining of these two opposing forces that creates the complex pattern of water droplets on the surface of the tray.Moreover, this pattern is unique.If you did this experiment again, you'd get a completely different drop pattern.The accidents of history—like microscopic specks of dust and invisible unevennesses on the tray surface—are amplified by positive feedback, and it's these that make the big difference in the outcome. Indeed, Arthur thought, this might explain history.To paraphrase Winston Churchill, history is made up of one hell of an event after another.Positive feedback builds up a chain of innocuous incidents—who bumps into whom in the lobby aisle, which van happens to stop where overnight, the Italian shoemaker happens to immigrate—and these small incidents magnify into History is no longer irreversible.Is it possible for a young actress to become a superstar solely on her own talent?It's hard.She was lucky enough to land a role in the only movie that caused a stir, and she made a name for it.Just because of her fame, she has been on the rise ever since.The actors who entered the industry at the same time as her and had the same talent as her failed to achieve anything.Did British colonists gather on the cold, rocky Massachusetts Bay because New England was the best land for farms?No.They arrived and gathered there only because Massachusetts Bay was the place where these British Puritans who immigrated to America disembarked and landed, and they disembarked there because they could not find Virginia on the "Mayflower" ship. direction.Owners Gain - Once a colony is established, there is no going back.No one wants to choose Boston and move elsewhere. Increasing returns, lock-in, unpredictability, and the little things that lead to big historical endings – said Arthur: “I was initially struck by these properties of increasing returns. But when I was reading about nonlinear physics , I was thrilled to discover that every property of the rate of increasing returns corresponds to a non-linear phenomenon. Instead of being shocked, I was fascinated by this phenomenon.” He knew that, in fact, several generations of economics Scientists have been discussing and studying these phenomena, but their efforts have always been lonely and scattered.He felt as if he was realizing for the first time that these problems were all one and the same.He said: "I felt like I walked into the Aladdin cave and found one treasure after another." By the fall of that year, the concepts had become crystal clear in his mind. On November 5, 1979, he poured out all these concepts. He wrote the words "Old and New Economics" at the top of his one-page notebook. Below this, he listed these two columns: In this way he wrote three pages.It was his manifesto for a new kind of economics.“Through these years of thinking, I have finally formed a point of view, an insight, an answer,” he said. This insight is very similar to that of the Greek philosopher Heraclitus.Heraclitus discovered that you can never ford the same river twice.In Arthur's New Economics, the economy is part of the human world.It's always the same, but it can never be exactly the same.It is fluid, ever-changing, and alive.