Max Planck - Planck's principle - Science progresses one funeral at a time

Science progresses one funeral at a time.

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Our take on this quote:

💡 Challenging old beliefs: Progress through generational change in economic thought

In economics, like science, innovation often emerges as outdated paradigms and entrenched ideologies are replaced - not through persuasion, but as new thinkers bring fresh perspectives.

Planck's principle - relevance in economic science

1. Resistance to new ideas
   Planck’s observation about science is profoundly relevant to economic theory. Established economists, institutions, and policymakers often cling to traditional frameworks and resist disruptive ideas. Just as physics didn’t quickly embrace quantum mechanics, economics sees slow progress as entrenched beliefs fade over time.

   • Example: Keynesian economics, which revolutionized economic thought in the 20th century, initially faced strong opposition from proponents of classical economics. Today, debates around Bitcoin and decentralized finance mirror that same resistance to innovation.
      

2. Generational shifts
   Economic progress often requires generational change. Younger economists and thinkers, unburdened by the biases of previous paradigms, are more willing to question long-held assumptions and explore new models.

   • Historical example
     • In the 20th century, Friedrich Hayek and Milton Friedman introduced ideas about free markets and monetary policy that challenged post-war Keynesian orthodoxy. Their ideas gained traction as the failures of stagflation (1970s) highlighted the limits of Keynesian tools.
     • Today, advocates for cryptocurrencies, decentralized governance and environmental economics are challenging traditional systems, waiting for their ideas to fully take root as institutional resistance wanes.
        

3. The pace of change in economics

   • Unlike physical sciences, where experimentation often leads to clear, measurable results, economics grapples with complex, human-driven systems. This makes proving or disproving theories slower, further compounded by the entrenched power of political and financial systems that may resist change.
   • Progress is less about convincing current practitioners and more about replacing them. New approaches, like behavioral economics, took decades to be widely accepted despite offering more accurate models of human decision-making.
      

Lessons for modern economists and policymakers

1. Be open to new ideas
   Planck’s principle reminds economists not to dismiss radical ideas outright. Paradigm shifts - like those proposed by blockchain technology or universal basic income - might seem implausible today but could define the future economy.

2. Question institutional inertia
   Many traditional economic policies and institutions operate on assumptions formed decades ago, like the central role of fiat currencies or the need for centralized monetary control. Progress demands challenging these outdated frameworks and considering emerging alternatives.
    

3. Foster generational collaboration
   Bridging the gap between older, experienced economists and younger, innovative thinkers could accelerate progress. Fresh perspectives combined with the wisdom of experience can lead to balanced, practical solutions.
    

Applications to economic thought in modern times

1. Bitcoin and decentralized finance
   Cryptocurrencies like Bitcoin face immense skepticism from traditional economists, central banks, and governments. However, the generational divide is clear - young investors and thinkers see digital currencies as the future, while older institutions cling to fiat-based systems. Planck’s principle suggests that Bitcoin’s widespread acceptance might depend on the gradual replacement of older paradigms. Read a free bitcoin course.
    

2. Environmental economics
   Climate change and resource sustainability have forced the rise of ecological economics, challenging the growth-at-all-costs model of classical economics. The shift toward valuing natural resources and sustainability often faces resistance from traditional economists and industries, proving Planck’s point about the slow acceptance of new ideas.
    

3. The role of technology in economics
   Innovations like AI, automation, and decentralized systems are reshaping how economies function. Resistance to these changes stems from entrenched interests, but as a new generation of economists grows up alongside these technologies, they will likely become central to economic thought.
    

Criticism of economic science’s slow progress

1. Human biases
   Economic paradigms are often intertwined with political ideologies and power structures, making change slower than in the natural sciences. Established systems are designed to benefit those in power, and new ideas often threaten these systems.
    

2. Overreliance on tradition
   Many economic models and policies rely on assumptions that no longer reflect modern realities, like the effects of globalization or the digitization of money. Planck’s insight suggests that progress will require generational turnover in leadership.
    

3. Dogma in academia
   Economics, like science, is prone to academic gatekeeping. Peer-reviewed journals, tenure systems, and established schools of thought can suppress radical ideas, delaying progress until a new generation challenges the status quo.
    

The human side of Planck’s quote in economics

Planck’s quote also reflects the emotional side of change - economics isn’t just about numbers; it’s about human lives. Policies, theories, and systems often persist because they benefit those in power, even when they harm the majority. Change isn’t just a theoretical process - it’s a struggle against deeply entrenched beliefs and interests.

Max Planck’s insight into scientific progress is a sobering reminder that economics, like any discipline, evolves slowly. Paradigm shifts - whether driven by Bitcoin, environmental sustainability, or behavioral insights  - require generational change and the courage to challenge orthodoxy. As we navigate the complexities of the modern economy, Planck’s words inspire us to remain open-minded and patient, knowing that today’s radical ideas might become tomorrow’s foundational principles. 🌍📈✨

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