Why quantum economics is the future of business and finance

In 2008, the global financial system buckled under the weight of its own flawed assumptions. Complex financial instruments, built on models of ‘perfect rationality,’ imploded. The failure wasn’t just a market crash; it was a crisis of imagination. The economic theories that powered our boardrooms and business schools had failed to describe the world as it truly was: interconnected, unpredictable, and deeply human.

We were, and in many ways, still are, running a 21st-century global economy on 19th-century intellectual software.

The dominant paradigm, neoclassical economics, treats the economy like a predictable machine. It assumes rational actors who single-mindedly maximise their own self-interest. In this world, money is a neutral tool, simply facilitating transactions. But if that were true, why do markets panic? Why do bubbles form? And where do ethics and responsibility fit into all the elegant equations?

The simple answer is: they don’t. And for today’s business managers and finance professionals, clinging to this outdated model is no longer just an academic error; it's a professional liability. We need a new lens. That lens is Quantum Economics (QE).

Money has a dual nature

Quantum physics revealed that the world at its most fundamental level is not a collection of solid, independent objects. It’s a world of probabilities, relationships, and interconnectedness. Quantum Economics applies these insights to our social and financial systems. This isn’t a metaphor; it’s a more accurate description of how modern money behaves.

For a manager, this shift in thinking provides three game-changing concepts:

The duality of money: In quantum physics, a particle is also a wave, possessing a dual nature. So does money. Money is not just the number you see in your bank account (an abstract concept). It’s also the tangible asset you use to pay salaries or buy equipment (a concrete thing). Neoclassical economics only sees the number. But as any business leader knows, a dollar earmarked for payroll is fundamentally different from a dollar slated for R&D. Its context and purpose define its value.

A key takeaway then is that value is not a fixed number to be discovered; it is contextual and is shaped by your decisions. How you frame and use capital changes its very nature.

Two, financial superposition: Your choices create reality: In the quantum world, a particle exists in a cloud of possibilities, a ‘superposition’, until it is measured. Only then does it "collapse" into a definite state.

A company's capital exists in a similar state of superposition. The cash in your account is pure potential. It could become an investment in a new factory, a dividend for shareholders, or a cushion against a downturn. It is the act of decision, the ‘measurement’, that collapses this potential into a single, concrete outcome.

Thus, we are not passive observers of economic forces. Our choices actively create economic reality. Every strategic decision we make shapes the future state of our organisations and their resources.

Three, entanglement: The invisible web connecting your portfolio

Einstein famously called quantum entanglement ‘spooky action at a distance’. It describes how two particles can become linked in such a way that the state of one instantly affects the other, no matter how far apart they are. This is the single most important quantum concept for finance today.

Neoclassical models treat every actor as an independent agent. Quantum Economics, on the other hand, recognises that financial instruments create deep, instantaneous entanglement. When a bank issues a loan, it becomes entangled with the borrower. The bank's asset (the loan) and the borrower's liability (the debt) are two sides of the same coin. They are a single, entangled system. If the borrower defaults, the bank's balance sheet is instantly impaired; the ‘spooky action’ travels across the financial system.

This is precisely what the models missed in 2008. They failed to see the vast, invisible web of entanglement created by mortgages and credit default swaps. They saw a collection of individual bets, not a single, fragile system waiting for one thread to snap.

A key takeaway then is that no financial decision is made in a vacuum. Your organisation is entangled with your customers, your suppliers, your lenders, and your employees. Their fate is linked to yours in ways your balance sheet cannot show.

Re-embedding ethics into the system

This brings us to the most profound difference between the old and new economic paradigms: ethics.

Neoclassical economics is famously value-neutral. By modelling the economy as a self-regulating machine, it creates a moral vacuum where a lender has no special responsibility to a borrower beyond the terms of the contract. The pursuit of self-interest is all that is required. This worldview is what allows for predatory lending, reckless speculation, and the prioritisation of short-term profit over long-term stability and human well-being.

Quantum economics, by its very nature, re-embeds ethics into the system. The concept of entanglement makes responsibility unavoidable. If you are financially entangled with someone, their well-being directly impacts yours. A loan is not just a credit and a debit on a spreadsheet; it is an entangled relationship that creates a shared fate.

This perspective forces managers and finance professionals to ask different questions:

• • Instead of ‘How can we maximise shareholder value?’ we ask, ‘How does this decision affect the entire web of stakeholders we are entangled with?’
• • Instead of ‘What is the maximum risk we can legally take?’ we ask, ‘How will this risk impact the stability of the system upon which we all depend?’

The old machine model of economics is broken. It gave us efficiency without resilience and profit without responsibility. The future belongs to leaders who can see the world as it is: a living, entangled system. By understanding that our decisions create reality and that we are inextricably linked to the fate of others, we can build a more stable, equitable, and ultimately more prosperous economy for all.

No Techcircle journalist was involved in the creation/production of this content.

Tulsi J & Ayush C & Ankit R

---

Tulsi J is Professor of Economics & Policy, Executive Director of the Centre for Family Business & Entrepreneurship & Chairperson of the PGP in Family Managed Business at the SPJIMR. Ayush C & Ankit R are students of the PGPM 25–26 batch at SPJIMR.