Globalization and the IT-revolution have changed our world a lot over the last decades.
But as the saying goes: history repeats itself. Although the means with which
humans interact with each other have changed maybe more significantly than ever before,
the idiosyncratic dynamics of interests, capital, and other socio-economic aspects, remain the same.
However, where the socio-economic forces have kept each other in oscillating balances since
the beginning, maybe this time things are different: as technological changes accelerate and
society has trouble keeping up, and the increasing amount of capital allocation that is dissociating
from the real economies, it looks like the dog is no longer wagging its tail, but the tail is
starting to wag the dog. Proportions matter.
Socio-economic domains (including financial markets) behave like all other non-linear dynamic systems,
such as natural ecosystems and thermodynamic systems (like the weather). EntropoMetrics is trying to apply
the technical disciplines of these non-linear dynamics, such as bifurcation theory, catastrophy-theory, and
other chaos/complexity theories, to these socio-economic domains, from a macro-perspective.
EntropoMetrics provides consulting and research services in these areas, with its metholodogy of so-called entropology.
It's the entropy, stupid!
One of the current internal projects at EntropoMetrics is trying to determine if the structural
changes in financial markets (in transactional cheapness via IT-systems) has resulted in a persistent qualitative change in the dynamics of capital allocation.
In financial markets the dissociation from the real economy is currently getting out of proportion, illustrated
by progressive trends like HFT/algo-trading, passive investing, and central bank interventions.
There are numerous quantitative metrics that show this, but a thesis of EntropoMetrics is that the dissapearing of 'natural' boundaries in financial transactions (by the IT-revolution) has established a structural overhaul for capital allocation that still has not yet been fully absorbed, systemically, into all socio-economic domains. This process may seriously pollute the actual socio-economic oscillating trends, making it difficult to make sense of geopolitical and socio-economic events and developments.
Understanding these macro-trends might assist in trying to make sense of the unprecedented developments of this era.
For inquiries send an email to Martijn Veening at