Economies and Electronics

Electrical engineering has many analogs to economics. Often when creating an electrical system, an engineer will seek to create a certain type of signal (pattern of changing energy over time) at a specified place in the system, where the “signal” is analogous to a product or service in economics.

This effort typically involves the generation of charged particles (the generator performing a function analogous to the extraction of natural resources), the manipulation of the path those particles take (using resistors, which are analogous to “distribution”), and the creation of signals (using various components such as inductors and capacitors, which are like factories or service providers that merge resources into various configurations). Signals are passed from one major part of the system to another (producer to customer) through “matching networks” (combinations of resistors, capacitors, and inductors that preferably do not appreciably change the signal, but just compensate for differences between the parts of the system; these are analogous to marketing organizations, including retail stores). Inevitably there are costs, in energy (particles) and quality of signal (each “component” acts as a “customer” to some extent), which must be offset for the desired signal to appear at the right place at the right time.

An ideal capitalist economy can therefore be modeled as system of components that is evolving to optimize the efficiency of signal transmission and modification throughout the system, with each component having maximum influence over the characteristics of the signal at its location.