Financial momentum

The following is derived from watching some Khan Academy videos on macroeconomics and reading Piketty's book.

From the discussion, the financial health of a country is significantly impacted by the 'velocity' of money within its economy. The videos indicate that the quantity moving is important as well as the speed. This is, of course, basic economic theory arising from Keynes and others.

I am not an economist although I have been trying to build up some knowledge of the principles. However, I am a physicist (or was) and the key factor in the study of motion is 'momentum' or mass times velocity. Which raises the question about the equivalent metric in economics - what does it mean to refer to financial momentum.

This does not mean to say that the analogy is valid but it does prompt the thought experiment to see how far it can be pushed. For instance: is there a economic equivalent of conservation of momentum? Is the net flow of money (wealth?) within a system is constant?

First: the more common important quantity in the physics of motion is the rate of change of momentum or force: F = ma according to Newton. Economics, as with natural language, usually less precise terminology, but forces could be interpreted as changes in the flow of money.

But perhaps 'money' is not the correct entity to use as a measure of an amount of substance in economics. It is representative of a deeper underlying concept - wealth perhaps? "Capital", especially in Piketty's case, refers to something more specific, but it may be meaningful to refer to the flow of wealth or value, with money being the unit of measure. The concept of what exactly is flowing may require more thought.

More basic is that the distinction *must* be made between velocity and speed. The two are NOT the same and the distinction is critical in understanding movement. Speed is a single value and can be added and subtracted simply as a number. Velocity, on the other hand, depends on direction and changes when the direction changes even if the measured speed is the same. And a force is required to change the direction even if the quantity doesn't change. Velocities (or momenta) add as vector quantities and only cancel out if they are in opposite directions. 

The economic equivalent would be the exchange of items of equal value between two entities which would lead to a zero net flow of wealth. Also the net force driving further motion, after the exchange is complete, would be zero so the impact on the larger system can be disregarded. I don't think this is the same in economics - but it should be a point of further investigation. [As a side-note, there is some relativistic influence here since the value of the items will differ for each entity else they would not be exchanging them; another break-down of the analogy or can it be extended into electromagnetism?]

But when there are more than two bodies the direction of flow is not directly opposing and so the net forces do not necessarily cancel out. In physics, the mathematics for a multi-body system can be *very* complicated and there is no general solution to the equations; they must be calculated on a case by case basis and the computation may be difficult.

Hence it is not the flow of wealth that matters, but the circulation which requires a sort of centripetal (or centifugal?) force to maintain. Which is another interesting concept: what does the push of wealth away from the centre, as would happen with high velocities, mean for an economy?

One other point on this collection of ideas before I take it away for more incubation. Wealth at rest, like mass at rest, has inertia holding it in place. It is ballast which requires larger forces to move. According to Piketty it also accumulates (at least within our economic model) which gives it gravitational attributes - the larger the body the faster is gathers more substance to itself and the greater the influence on (particularly moving) entities around itself.

Maybe the analogy is not entirely far-fetched?

Jobs and Growth

I've been reading a bit about economics recently and one clear point seems to be that no qualified economist believes that trickle-down a.k.a supply side a.k.a. neoliberalism a.k.a reagonomics/thatcherism actually works. It does not lead to significant growth, tending instead toward depressing economies and, in general, no new jobs are created.
From a logical point of view it seems to me that this has a lot to do with how well established a business is. New industries create new jobs - entirely new, things that people have not done in the past and are not yet understood well enough to automate. Old, large, established industries have defined processes, tools, targets etc. and tend toward getting more efficiency out of their existing resources. Hence automating, tuning and generally reducing costs - including labour. People may move from one company to another but there are rarely new roles created within the industry as a whole.
In other words, from the government point of view, creating jobs is more likely to arise from supporting small and emerging businesses - especially new industries. In other other words - renewable energy, new technologies, start-ups. Science and other research lead to new ideas and new approaches, especially in the things like uses for big industry waste products, and hence to new industries, growth and jobs.

Security in Office Buildings

I have had occasion lately to enter a number of office buildings for various reasons and the security measures vary enormously. This led me to wonder both how effective and how costly they are.
On entry some corporates have a reception and some do not - depending on whether the general public is likely to appear. Most office buildings these days have some sort of card access in the lifts, commonly with an additional point (using the same card) on the floor as well. I am including the independent barriers before the lifts in this as well. One place even had reception on the first floor - which is only accessible via a secure elevator!
I can see the reason for these - barriers ensure that security officers (if they exist) can see people, unlike security in the lift itself. With multiple people in each elevator it makes sense to have separate access to the floor - it is a challenge point for humans if you do not recognise the person trailing you. Depending on the corporate culture, challenging does actually happen although it is rare if the person looks like they know where they are going (whether or not they actually do).
As a  side-note: there is an increasing trend for new building to have lift buttons outside the actual boxes. I have heard that this is to increase security but I really can't see any obvious way this would be true. More likely it arises from centralising the control software to more efficiently allocate the lifts. Nevertheless I think it is a major backward step in usability. The design really doesn't take human foibles into account and I can see multiple ways the theory could break in practice.
Then of course there are the security guards and pass-cards for temporary access - some of which require a driver's license before being provided. All to ensure that no authorised people are allowed access.
And what are they protecting? An office building - that is - levels and levels of desks with some computers on them. Valuable equipment yes, but rarely critical. Who are they protecting them from? I don't know. I am not sure what the expected attack is supposed to come from or what benefit the attacker is supposed to gain.
Simple thievery could be deterred by much simpler and cost effective means - how much does it cost to have 3 full time security guards + reception staff and how often are they actually required to do anything. The alternative is prevention of attacks on staff, either personal or corporate motivated. However, there are surely simpler and more unobtrusive mechanisms for detecting unauthorised entry. If the police force, surely one of the most targeted groups does not require the same level of control then I can't imagine that the department of Economic Development is in great danger.
All security is a cost-risk comparison and I really can't see the benefit in those terms. So perhaps the reasoning is more about presenting a sense of importance to any visitors.