Book 27. Why does the field known as scholarship exist in this world, and why has scholarship been able to exist as scholarship?

Hello. I'm Watanabe Ten. Nice to meet you. Today's topic is pricing. When you hear the word pricing, some of you might think of Say's Law. Say's Law is what is called an excess demand economy in economics, and it refers to an economy where people's desire to buy is greater than the desire to supply.

In this excess demand economy, we encounter a phenomenon called Say's Law. Say's Law states that in an economy, the more you supply, that is, the more you sell, the more you can sell. Let's say you are a factory producer with a certain quota to meet. You are required to produce this many products by this deadline.

In our typical economy, unsold goods would end up as inventory, sitting idle in warehouses. However, in Say's Law, there are no unsold goods; every product produced is sold.

In the real world and the theoretical world, we encounter a phenomenon called a divergence. Divergence is a phenomenon in which the difference gradually widens, and by the time a large gap has formed, a considerable amount of time has passed. In the academic world as well, we sometimes encounter a phenomenon in which the initial theory diverges significantly from the real world. Initially, assumptions such as the egoism of classical theory can be considered premises, but as the theory is built up, it gradually diverges from reality.

When we encounter the world of science and academia, we need to thoroughly understand why a particular theory is the way it is. If the initial premise is unrealistic, the subsequent arguments will gradually become increasingly unrealistic.

The initial process was probably driven by a desire to theorize about reality. However, through trial and error, that desire gradually turned into brute force. The theories became complex and sophisticated, becoming incomprehensible to ordinary people.

Let's look at quantum mechanics. Initially, it was probably just a desire to mathematically represent the gradation of light, that is, the shades of light and shadow. I think they tackled this difficult problem of light gradation by adding quadratic equations with variables to avoid making the formulas too complicated.

However, as time progressed, we began to realize that the foundations of our understanding were already shaky, starting with the first observational experiments, such as the observation of light, or the probabilistic theory known as Schrödinger's cat, including differential equations and the famous Schrödinger equation.

Quantum mechanics is a probability theory because velocity and position cannot be determined simultaneously, and light itself does not travel at an observable speed, so the theory is developed within the realm of imagination.

The person who created the famous theory of relativity also worked on analyzing light through thought experiments in his mind. This person is also one of the founders of quantum mechanics, but I believe that even the price formula and this observable economic phenomenon remained in the realm of thought experiments for a long time.

Just as economics theorized its price formula based on the utility of demand or the desire for something, science, for a long time, has also tried to mathematically represent reality through brute force. By manipulating these mathematical formulas, it was possible to apply them to various things, in this case, through induction and deduction.

In this context, induction and deduction refer to the process of formulating laws through induction—that is, expressing reality simply through mathematical formulas—and then finding value in applying those formulas to various economic phenomena and other areas, in other words, in deduction.

I would simply say: Why is this world so strange? Why does a field called scholarship exist in this world, and why has scholarship been able to be scholarship? Scholarship also starts with a simple structure, but why do we still spend so much time merely mimicking reality?

Let's return to the original topic. In the world of Say's Law, the pricing formula, prices would probably be very low. This is because if there is no inventory and no waste, there is no need to pass on the cost to the customer. However, the real world is different from Say's Law; at least in modern times, many products are discarded without ever being purchased.

In this miserable world, one glimmer of hope lies in eliminating waste and approaching Say's Law. If Say's Law includes a certain level of demand, then it could be considered a utopia. In that sense, the idea that everything you make will sell might embody one fundamental principle of the world. That's all. Thank you. This is Watanabe Ten.