The Science Beneath Spirituality and Finance

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Salt are pleased to introduce the latest piece from its spirituality and finance columnist ‘Just In Time Guru’. JIT Guru is the alter ego of “Raj”, a thirty-something, London-based city professional with over a decade’s experience working at some of the world’s pre-eminent investment firms. 

“What I see in Nature is a magnificent structure that we can comprehend only very imperfectly, and that must fill a thinking person with a feeling of humility. This is a genuinely religious feeling that has nothing to do with mysticism.” Albert Einstein

I find it interesting that some of the greatest scientists also had a more philosophical side. Perhaps they used their scientific genius to find evidence for or against the “truth”.

Albert Einstein, Isaac Newton and Charles Darwin all wrote about matters of a more spiritual nature. During their time, it was considered occult, alchemy or superstition. Newton, for example, wrote over 300 unpublished manuscripts on the subject.

A real shame, I wonder what they’d have discovered then. And what we’d be discovering now.

At a cosmic level, science itself shows just how unlikely it is for the universe to have formed as it has. It really is remarkable, given that even a tiny change in any of the universal constants and quantities would mean the universe would have grown too fast or too slow for life and planets to exist. Was this achieved by luck or design?

At an individual level, exploration of the brain is building evidence that meditation can actually change the brain for the better. We now know the brain is not fixed, it can heal itself and make new connections depending on the input we choose to provide.

Also, the concept of a “multiverse” is growing within the scientific community. The idea that many, if not an infinite number of, universes can exist simultaneously. That all of time and space exist at every given moment. It will be interesting to see how this develops, particularly if we can prove that “cosmic inflation” is real and underlies the nature of the universe.

There’s an insightful book – “The Celestine Prophecy” – which lays claim that science split away from spirituality but sought the same goal. Perhaps technological advances mean that today the two fields are moving back closer rather than further apart.

Science may never find the answers to prove God exists. Perhaps it’s not meant to, so some mystery can continue to exist and humans will always ask the bigger questions – Why are we here? Do I have a purpose?

Are we humans? Or are we dancers? Maybe, we’re both – humans dancing. If so, to whose tune do you dance, and do you prefer to dance on your own or in synch?

Ultimately, for matters of a spiritual nature, we should not wait for scientific proof. The evidence comes from the experience, and that’s a very personal thing. And we may never know the truth until after our last breath.

The Science Beneath Finance

Economics and quantitative models can be regarded as the science underlying finance.

This science seems to be crumbling.

Old theories of how the economy and finance work are being re-thought. People do not operate as linearly or rationally as academic theories like to make out. Former Bank of England Governor and Chief Economist, who has just published “The End of Alchemy”, told The Telegraph:

The crisis was not a failure of individual policymakers or bankers but of a system, and the ideas that underpinned it… There was a general misunderstanding of how the world economy worked.”

He believes another crisis will arrive sooner rather than later, pointing to a “disequilibrium” in the financial forces between saving and spending, exporting and importing. This disequilibrium requires a fundamental rethink of the system to bring it into equilibrium.

Why might this disequilibrium have occurred?

“Optimisation” is the holy grail for economists and finance, yet the models simply cannot cope with the unknown. You can’t put a value on and assign a probablility to intuition or irrational decisions. So they largely get ignored, included as a “random error” or factored in as “noise”.

Economics and finance need us to be rational economic agents, else the models will always miss something so cannot be used to accurately predict the future. This means policymakers cannot set policy and guarantee it will deliver as planned.

Humans change and we often make decisions (rational or irrational) from an emotional state (positive or negative). Plug that into financial models and the computer says “No”.

John Mauldin, a financial guru, brought up the idea of “the religion of economics”. He writes, “Economics and religion are actually quite similar. They are belief systems that try to optimize outcomes. For the religious that outcome is getting to heaven, and for economists it is achieving robust economic growth – heaven on earth.”

One thing I do find amusing amongst the financial gloom is that John Maynard Keynes, the founding father of modern economics, ended up buying many of Newton’s unpublished alchemical works. How’s that for spirituality and finance (as well as science) coming together.

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