Wednesday, September 30, 2020

Money and more is different

Phil Anderson's classic article, "More is different" from 1972 has a somewhat humorous and enigmatic ending.

In closing, I offer two examples from economics of what I hope to have said. Marx said that quantitative differences become qualitative ones, but a dialogue in Paris in the 1920's sums it up even more clearly: 

FITZGERALD: The rich are different  from us. 

HEMINGWAY: Yes, they have more money. 

So, what is this all about? What is the background? 

According to an article in the Financial Times

There is an apocryphal tale about an exchange between two of America’s most famous novelists on the nature of wealthy individuals. F Scott Fitzgerald, author of The Great Gatsby, is reputed to have said: “The rich are different from you and me.” In reply, Ernest Hemingway is quoted as saying: “Yes, they have more money.” 

 As it happens, the quote attributed to Fitzgerald seems to be a corruption of a line in The Rich Boy, his 1926 short story: “Let me tell you about the very rich. They are different from you and me.”

With regard to Marx, as far as I can tell, the idea that "quantitative differences become qualitative differences" was discussed by Friedrich Engels in his unfinished 1883 work, Dialectics of Nature. The manuscript, drew on three "laws of dialectics" proposed by Hegel. The first law is

1. The law of the transformation of quantity into quality and vice versa. For our purpose, we could express this by saying that in nature, in a manner exactly fixed for each individual case, qualitative changes can only occur by the quantitative addition or subtraction of matter or motion (so-called energy).

An entry from the Great Soviet Encyclopedia illustrates the central role this "law" played in Soviet ideology, particularly in giving a "scientific" basis for the dialectical materialism at the centre of Marxist-Leninist philosophy.

A paper in PNAS in 2000 comments

Marx himself seems to have made only limited use of the explanatory power of the transition from quantity to quality. For example, in Capital, he noted “the correctness of the law discovered by Hegel … that merely quantitative differences beyond a certain point pass into qualitative changes,” and illustrated this process in the economic sphere by speaking of “the minimum of the sum of value that the individual possessor of money … must command to metamorphose himself into a capitalist …” (2).

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