Entrepreneurs Observe, Therefore Markets Exist

The world is made up of chaos and order. Like the Earth, which is no more than a speck of dust in the vast universe, it consists of 99.9...9% chaos and 0.0...1% order. Chaos does not mean the absence of order. It simply means that we cannot know its regularity. If the universe is the macrocosm and the human being the microcosm, then our minds too are composed largely of chaos and only a tiny fraction of order. And just as the universe does not perish amid that chaos, human beings too have continued to live without perishing. Human beings are fragile creatures, like grass that bends when the wind blows, so how were we able to build civilization in the midst of such chaos? The answer can be found by looking at the universe within man: the market.

To explain chaos and order, it is necessary to have at least a brief understanding of quantum mechanics. Quantum mechanics is famous for being difficult to understand, and the following experiment shows why. The most famous experiment in quantum mechanics is the double-slit experiment, which is used to determine whether “something” is a particle or a wave. If two holes are made in a square panel and something is sent through them, then if the traces left behind follow the shape of the holes in two distinct patterns, it is judged to be a particle; if they appear in various patterns, it is judged to be a wave. This is because when a particle moves, like a ball, a single object goes to only one place, whereas a wave, like ripples in water, spreads across the whole range at once the moment it touches the water.

The problem is that there are cases in which something has both properties, and the electron is one such case. To explain: when electrons were fired through a double slit with an electron gun in large quantities, a wave phenomenon appeared. But when they were fired one at a time, a particle phenomenon appeared. To determine clearly whether this was a particle or a wave, the electron gun was then fired continuously, one electron at a time. Once again, a wave phenomenon appeared. To observe what on earth was happening as the electrons passed through the double slit, measuring equipment was placed there—and, strangely enough, a particle phenomenon appeared again. Someone had merely looked, and yet the result changed completely. The very act of observation affected the outcome. And it did so decisively enough to turn a wave into a particle.

The human mind is also made up of such waves and particles. The desires and interests we feel are all waves. They arise within my own mind, yet I cannot know whether they are truly my desires, whether they are desires shaped by others, or how they may affect other people. Such desires simply arise in the mind. But when I look closely at that desire, those infinite waves become, at some point, a single reality. Then it becomes clear whether I should choose it or give it up. Through that process of choice, the desires in my mind gradually become clearer, and the world onto which my desires are projected becomes clearer as well.

The market, too, which is made up of people’s interests, is like this. The market leaves traces as a wide variety of interests from a great variety of people come together, collide, and interfere with one another. Yet no matter how many people participate, there is no tangible substance there. Because it is nothing more than people’s desires, they collide here and there, shatter, and then disappear at some point. But there are times when these waves of desire take on a clear substance. When the observer called the entrepreneur looks closely and distinctly at those waves, that desire becomes a concrete reality. The countless waves that could not previously be distinguished become distinguishable, and those many waves gather as particles in their respective places.

No matter how much demand arises in the market, transactions do not occur by themselves. For a transaction to take place, there must necessarily be a supplier corresponding to that demand. At that point, the supplier must continue observing the countless waves sent out by the market. Then, at some moment, the waves become particles, and that becomes a concrete transaction. All firms can exist only because they observe such waves, and if they fail in that observation, they too are swept away by those waves.

Just as truth is the light of this world and creates order, the entrepreneur’s observation is the light and order of the market. The chaos produced by human desires becomes a concrete reality through the entrepreneur’s observation, and those realities in turn become order. We may never know the secret of waves, but entrepreneurs will create the market through inexpressible knowledge. As long as entrepreneurs continue to observe the market, the market will not perish.

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Original title: 기업가는 관찰한다. 그러므로 시장은 존재한다.

Author: Kyeong-mo Son

Date: 2019-12-04

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&pn=16&idx=22127