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What We Read Today 18 August 2015

Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.

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There are several articles today about Albert Einstein and the legacy of his theories of relativity.

Articles about events, conflicts and disease around the world









  • Brazil’s Political Crisis Puts the Entire Economy on Hold (Bloomberg)  In Brazil, General Motors Co. has been halting factories and laying off thousands. Latam Airlines, the region’s biggest, is cutting flights. And the world’s third-largest planemaker, Embraer SA, is delaying its biggest new aircraft.  In the midst of its deepest economic and political crisis in a generation, Brazil is contending with a business climate so punishing that major projects across numerous sectors are being frozen or shrunk, while small businesses slash prices and shift focus.

The Euro will Kill Italy (Holger Zschaepitz, Twitter)  Wow!  a 30% devaluation needed via internal restructuring rather than currency devaluation.  Worse problem than Greece.

Other Economics and Business Items of Note and Miscellanea

  • 10 Scary Retirement Stats (ThinkAdvisor)  The financial difficulty for retirees in the coming decade will be greater than at any time since The Great Depression eight decades ago.
  • How Einstein Changed the World (Scientific American)  The fruits of one mind shaped civilization more than seems possible.  But he felt that his mind had a low barrier to success:  He once said that there are only two things that might be infinite: the universe and human stupidity. And, he confessed, he wasn't sure about the universe.

The general theory of relativity began with a sudden thought. It was late 1907, two years after the “miracle year” in which Albert Einstein had produced his special theory of relativity and his theory of light quanta, but he was still an examiner in the Swiss patent office. The physics world had not yet caught up with his genius. While sitting in his office in Bern, a thought “startled” him, he recalled: “If a person falls freely, he will not feel his own weight.” He would later call it “the happiest thought in my life.”

  • What Einstein Got Wrong (Focus Science and Technology)  Everyone makes mistakes. But those of the legendary physicist are particularly illuminating.  He fought tooth and nail against the idea of a big bang theory of creation.  But eventually that was shown to be compatible with his Theory of General Relativity.

Einstein thought his biggest mistake was refusing to believe his own equations that predicted the expansion of the Universe. Yet we now know he actually missed out on predicting something even bigger: Dark Energy.

The trouble began when he first applied General Relativity, to the entire Universe. Like everyone else, Einstein believed the Universe was static and unchanging, and was horrified when his mathematically beautiful equations predicted a dynamic Universe. So he forced himself to introduce an ugly fiddle-factor to force his equations into line with the ‘facts’. Yet at that same moment, astronomers were discovering that the facts were wrong – and that distant galaxies are racing away from each other in an expanding Universe. Once Einstein had got over the shock of failing to make the most amazing scientific prediction of all time, he declared that refusing to keep faith in his beautiful equations was “the biggest blunder of my career”.

But it didn’t stop there. In the mid 1990s, 40 years after his death, astronomers showed that his faith in his beautiful equations had been misplaced. Studies of exploding stars in distant galaxies had revealed that the Universe isn’t just expanding, it’s expanding at an ever-faster rate. The cause: a force even stronger than gravity, but acting in the opposite direction – and with no obvious source. This is the now-notorious Dark Energy, and Einstein’s theory can accommodate it. But at the price of reintroducing the same kind of ugly fiddle-factor Einstein loathed.

Faced with evidence that the universe was growing, Einstein apparently wanted to figure out why it wasn't filling up with empty space. His proposed solution is in this newly discovered paper. As the universe expanded, he suggested, new matter showed up to fill the gaps. New stars and galaxies would just pop up, according to Einstein's model, so that even as the universe grew, it would look the same.

Just to be clear, this theory is totally wrong. But for a little while Einstein thought it was right. The numbers made sense, because he had made a mathematical mistake. In the middle of a complicated calculation, he wrote a minus sign where he should have written a plus.

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