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 have changed significantly, the 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 for centuries, maybe this time really is different:
as technological changes accelerate and society has trouble keeping up, it looks like the dog is no longer wagging its tail, but the tail is starting to wag the dog.
With the increasing amount of capital allocation that is dissociating from the real economies, proportions matter.
Socio-economic domains (including financial markets) behave like 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 consultancy-services in these areas.
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 disappearing 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 undercurrents from a macro-perspective, might assist in trying to make sense of the unprecedented developments of this era.