Plancks Radiation Law Re-derived For the More General Case

8 7 6

Linear law y = hx + c

Mount Profit
Power-law y = mxn

Profits, y

5 4 3 2 1 0 0 5 10 15 20 25

Power-exponential law y= mxnexp(-ax) Maximum point

30 35

Revenues, x
Figure 1: Simple illustration of the nature of the power-exponential law along with two special cases: linear law (a = b = 0, n = 1) and power law (b = c = 0, n < 1). We can think of money in economics as being just like energy in physics. The power-exponential law, see equation 1 below, with x being revenues and y being profits, may thus be thought of as a generalization of Plancks blackbody radiation law and can be extended from physics to economics with a reinterpretation of the meaning of the various mathematical symbols. y = mxn [ e-ax/(1 + be-ax) ] + c (1)
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The existence of a maximum point on the profits-revenue graph of a company was therefore predicted, theoretically, in some articles by the author, after the analysis of the most recent (post 2000) financial data for several companies, see Ref. [1], which were shown to agree with many other predictions made on the basis of equation 1; see the links given below for further details. Furthermore, the actual existence of this maximum point has now been confirmed by the graph of the profits-revenues data for Ford Motor Company, for the years 1990-2011, see Figure 2 below taken from Ref. [2]. The raw data used to prepare this plot may be found in Glenn Mercers analysis of Fords performance, see reference cited. Hence, the main purpose here is to provide some theoretical justification for the power-exponential law, going beyond physics where it was first conceived.
10 8

Profits, y [$, billions]

6 4 2 0 -2 -4 -6 -8 -10

20

40

60

80

100

120

140

160

180

200

Revenues, x [$, billions]

Figure 2: Mount Profit revealed by the graph of profits-revenues data for Ford Motor Company for the years 1990-2011. The diamonds are the actual data points and the dashed curve has been superimposed to reveal the trend. The data has been compiled by Glenn Mercer in Ford, 1993-2007, Losing its way? See http://www.glennmercer.com/MercerFordChapter.pdf Table 10.1 in the Appendix.
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Table 1: Profits-Revenues data for Ford (1990-2011)

Revenues, x Profits, y Profit Margin, y/x $, billions $, billions 98 0.9 0.0092 1990 89 -2.2 -0.0247 1991 101 -0.1 -0.0010 1992 109 2.5 0.0229 1993 129 5.3 0.0411 1994 138 4.1 0.0297 1995 148 4.4 0.0297 1996 155 6.9 0.0445 1997 146 6 0.0411 1998 162 6.5 0.0401 1999 172 5.4 0.0314 2000 163 -5.4 -0.0331 2001 163 0.3 0.0018 2002 165 0.9 0.0055 2003 172 3.6 0.0209 2004 178 2.2 0.0124 2005 -0.0778 2006 162 -12.6 172.5 -2.7 -0.0157 2007 -0.1005 2008 146.3 -14.7 116.28 2.72 0.0234 2009 128.95 6.56 0.0509 2010 0.1483 2011 136.26 20.21 See also http://www.glennmercer.com/Ford2007to2012Draft.pdf Ford 2007-2012 Ford 2007-2012 Finding its way? The data for years 1990-2006 were obtained from Mercers compilation and for subsequent years from Fords website. 1. http://www.scribd.com/doc/94647467/Three-Types-of-Companies-FromQuantum-Physics-to-Economics Speculations on Types of Companies: From Quantum Physics to Economics, published on May 24, 2012. 2. http://www.scribd.com/doc/95140101/Ford-Motor-Company-DataReveals-Mount-Profit, Published on May 29, 2012. 3. http://www.scribd.com/doc/94325593/The-Future-of-Facebook-I The Future of Facebook: From Theoretical Speculations to Better Year

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Understanding Based on Simple Mathematical Laws, published on May 21, 2012. 4. http://www.scribd.com/doc/94103265/The-FaceBook-Future The FaceBook Future, Revenues-Profits Analysis, published May 19, 2012.

A Brief Discussion
The maximum point on the profits-revenues data for Ford Motor Company, as revealed here, was suspected based on the discussion of the Ford Motor Company profits-revenues data in Ref. [1]. This is a stunning confirmation of the predictions based on the significance of the power-exponential law. If we consider the special case of b = 0 and c = 0, the power-exponential law takes the simpler form y = mxne-ax. The expression for the derivative dy/dx which yields the changing slope of the curve is readily deduced, dy/dx = (n ax)(y/x). It is clear that there is a maximum point on this curve, at x = n/a, since dy/dx = 0 at this point. The derivative has a positive sign (rising portion of the curve) for x < n/a and a negative sign (falling portion of the curve) for x > n/a. The expression for dy/dx for the entire function, for nonzero b, can also be deduced and is left as an academic exercise. The position of the maximum point is shifted for nonzero b. The scatter that we see in the profits-revenue data is due to what we may call the temperature of the system. Carefully controlled experiments with a blackbody were performed in the second half of the 19th century by many researchers, with the body radiating heat being held at different temperatures. A maximum point was found at each temperature, with the position of the maximum point shifting as the temperature increases. Thus, even in blackbody radiation theory, we have to deal with a family of curves, not a single curve. Each curve, called the radiation spectrum, applies for a single temperature. For example, all of the data points (more than 80) for the Cosmic Microwave Background (CMB) radiation spectrum fall nicely on a single curve corresponding to a temperature of T 2.725 Kelvins. (Recall that 0 K = - 273 C.) http://en.wikipedia.org/wiki/Cosmic_microwave_background_radiation
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Fig. 2. Graph of black-body radiation for a range of temperatures. Wavelength is plotted on the horizontal axis, and radiation intensity on the vertical. The data are those of Lummer and Pringsheim from November 1899, which were the first to suggest a possible deviation from Wiens law, Courtesy http://employees.csbsju.edu/cgearhart/Planck/PQH.pdf

It appears that the same may be going on here. We may indeed be dealing with a profits and revenues spectrum for a company operating at different temperatures. Perhaps, this is the meaning of the various eras that Ford Motor Company has gone through, as discussed in Mercers analysis of Fords performance.

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The dashed curve (added schematically, not on the basis of any calculations) joins data for a single temperature. The other data points can be envisioned as falling on a different curve(s) that applies (apply) for a different temperature (s). This actually supports what was mentioned in the references cited earlier. We can systematically extend every single idea, like energy, entropy, and temperature from physics to economics. First, let us discuss briefly the meaning of temperature T in quantum physics. Actually, it is very different from what we assume. It has nothing to do with the familiar thermometer but is related to two basic concepts called energy U and entropy S. The temperature T of a blackbody is given by the relation T = dU/dS .(2)

This is the definition of temperature used by Planck to develop quantum physics in his famous December 1900 paper. The above is a consequence of the combined statement of the first and the second laws of thermodynamics. The first law is the energy conservation law and is similar to Profits = (Revenues Costs) in the business world or in economics. The second law leads to a mathematical definition of entropy S. The entropy increases by a small amount dS = dQ/T where dQ is the small amount of heat added to the system at the temperature T. If we assume that all of dQ increases the energy of the system, i.e., dQ = dU, then dS = dU/T or rewriting we get T = dU/dS. Planck therefore defines temperature T as the rate of change of energy with entropy. (In general, dQ = dU + work done, since some work is always done by the system with the addition of heat.) The heat added dQ is like a stimulus and the increase in energy dU is the response of the thermodynamic system (in the world of physics). We can thus generalize these notions of heat added and energy increase and apply them outside physics, as proposed by considering other stimulus-response type relations. Second, the notion of entropy has already been applied to describe situations well beyond physics. Entropy is often described as a measure of the extent of chaos, or randomness in a system. According to Planck, it is related to the number of ways W in which a fixed total amount of energy can be distributed between N elements. The higher the number W, the higher the entropy. Hence, even this notion of entropy too, and thus also the idea of a temperature T, can be extended
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beyond physics to economics. (Further details may be found in Ref. [1].) The total entropy SN of N elements with total energy UN is given by: SN = k ln W + arbitrary constant (3)

Here ln W is the natural logarithm of W. Planck then applies well-known statistical arguments to determine W, the number of ways of distributing the total energy UN among the N energy elements. Instead of energy distribution, we can envision the distribution of money, which is measured in terms of some elementary monetary unit . Following Planck, we can write P = NU to be the total money that must be distributed and continue to use the symbol U now to denote money instead of energy. The expression for W is: W = (N + P 1)! / (N 1)! P ! (4)

Here P! means the factorial of P and so on. Both N and P are very large integers. The reader is also referred to the discussion of this result by Ehrenfest and Onnes at http://www.dwc.knaw.nl/DL/publications/PU00012735.pdf and by Gearhart in his historical review at http://employees.csbsju.edu/cgearhart/Planck/PQH.pdf With this transition from the terminology of physics to economics and finance, it is now easy to follow the subsequent steps taken by Planck. Firstly, factorials are eliminated by invoking the well-known Stirling approximation, ln P! PP , and so on. From logarithms we arrive at exponentials (upon reversing the process). These ideas were already presented in Ref. [2]. In this article, we will develop these essentially theoretical ideas a bit further and show how to make the transition from physics to economics and beyond. The key points to remember are: 1. Planck invoking the formula for W, the number of complexes, using classical ideas from the theory of permutations and combinations. There are N elements and there is a property U associated with each. If the total UN = NU = P can be expressed in two different ways: as a product of N and U and also as a product of P and and some . In how many different ways can this distribution be accomplished? W = (N + P -1)!/(N 1)!P! . This notion can obviously be readily extended well beyond physics. Note also that the ratio P/N = U/ and N and P are both considered to be very large integers.

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2. Invoking the expression for the total entropy SN = NS = k ln W then yields SN = k = Nk { [1 + (P/N)] ln [1 + (P/N)] (P/N) ln (P/N) }. Setting P/N = U/, this yields the desired relation between U and S. This only includes the two constants k and . 3. Invoking T = dU/dS then yields the expression for U. It turns out that U equals modified by the exponential factor. U = [e-/kT /(1 e-/kT)]. 4. These steps lead us to the power-exponential law. Essentially, if we reflect on these steps it is obvious that the elementary epsilon () becomes U modified by the exponential factor which then manifests itself in the form of the nonlinear power-exponential law. In most cases, however, we see a linear law with the constant h taking on the properties of associated with . The expression for entropy, deduced from permutations and combinations, yields the exponential factor in the power-exponential law.

http://employees.csbsju.edu/cgearhart/Planck/PQH.pdf Fig. 1. Max Planck (18581947), as he appeared around 1900. Credit: American Institute of Physics, Emilio Segre` Visual Archives, W. F. Meggers Collection.
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Appendix 1 From the Linear Law to the Nonlinear law

It has already been shown, see Ref. [1] and Ref. [3] in the list above, that the linear law y = hx + c relating revenues x and profits y is a consequence of the classical breakeven analysis for the profitability of a company. Imagine a company producing and selling N units of some product. The total cost C equals the fixed cost a plus the variable cost bN which depends on the exact value of N. Thus, C = a + bN. If p is the unit price, the revenues R generated by the sale of the N units is R = pN. Hence, we can write the profits P = R C = pN a - bN = (p b)N a. Eliminating N, using N = R/p, we get the simple linear relation between profits and revenues: P = [(p b)/p] R a. This can be rewritten as y = hx + c where the constant h = (p b)/p and the constant c = - a are both related to the basic financial concepts associated with the production and sale of the N units. This linear law was deduced by considering the simplest of all possible cases a single product with a single triplet of (a, b, p) values associated with that product which determines the profits and revenues. In the real world, companies offer many kinds of products with many different triplets (a, b, p) associated with each product. An automotive company like Ford Motor Company has many different car and truck lines as well as other non-automotive revenue streams. It is indeed remarkable that the simple linear y = hx + c often seems to provide an accurate description of the profits and revenues data for many economies. This has already been discussed in Refs. [1-4]. How does the nonlinearity arise? Quite simply, it is the result of what we call entropy in physics, in addition to the fact that we are dealing with many different types of products. Having 2, 3, 10, or 20 product lines each with its own (a, b, p) triplet is not, by itself, sufficient to induce nonlinearity. One can still have perfectly linear behavior, with a superposition of many different linear behaviors.
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Nonlinearity is due to something else, more fundamental notion of entropy and the many possible ways of doing something. This is discussed in Appendix 2. In order to appreciate this subtle point consider the following from the notion of an expanding universe that we is now generally accepted, following Hubbles observation (published in 1929) that the higher the distance D of a galaxy the higher the speed V with which it seems to be moving away. A simple linear law relates V and D. This law, now called Hubbles law is written as V = H0D. The constant H0 relating V and D is called the Hubble constant. http://en.wikipedia.org/wiki/Hubble%27s_law Hubble deduced the idea of the galaxies moving away on the basis of what is known as the redshift. When a light source, such as a distant star or a galaxy, is moving away from the observer, the spectral lines are shifted towards the red end. http://en.wikipedia.org/wiki/Redshift What is the cause of this red shift? Is it what we call the Doppler Effect, something we can experience here on earth? Or, is it something else at a cosmic scale? Objects on the earth move relative to each other (example a source of sound from a siren, or a locomotive whistle), when we experience the Doppler effect in terrestrial situations. But, the earth itself is not expanding to cause us to experience this Doppler effect. Now, think of the galaxies. Is the universe itself expanding into something outside of it? Or, are the galaxies just moving apart from each other into a vast space called the Universe? The example used is that of small balls placed on a rubber sheet. The balls move on the sheet without any stretching of the sheet. Or the balls could be fixed to the sheet and the sheet itself is stretching. The terms Doppler redshift and Expansion redshift are used to describe these two situations. Nonlinearity arises in the same way. It arises due to a very subtle notion called entropy. The term entropy was first coined by Rudolf Clausius, in 1865, whose theoretical speculations (about the working of a heat engine, which led him to entropy) laid the foundations for what is now known as the second law of thermodynamics. According to the second law, entropy is always increasing. (It is impossible to decrease the entropy!)

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Since then entropy has been explained in many other (simpler) ways using what is known as statistical mechanics. http://en.wikipedia.org/wiki/Entropy . This point is discussed next. The latter statistical mechanical viewpoint, due to Boltzmann, also allows us to appreciate how a correction factor to the linear law would leads us to the power-exponential law which can then be linked to Planck idea of an elementary epsilon . We will use epsilon in what follows rather than Plancks energy quantum which is, mathematically speaking, the same quantity. It is the idea of an epsilon () that permits the extension of Plancks ideas from physics to economics and, perhaps, even beyond economics to many other systems with which we can associate the notion of entropy (and by extension temperature, as discussed in what follows in Appendix 2 here).

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Appendix 2: The Expression for Entropy

The following expression for the entropy S can be derived, based purely on mathematical arguments, without any reference to quantum physics or any other theory. We will follow exactly the steps taken by Max Planck in his famous 1900 paper but avoid any reference to physics or blackbody radiation theory. An English translation of Plancks original paper is available for study, see Great Experiments in Physics, Dover Publications, NY, 1959, Edited by Morris H. Shamos, pp. 301-314 and also the discussion by P. Ehrenfest and K. Onnes http://www.dwc.knaw.nl/DL/publications/PU00012735.pdf Consider first the following simple problem as done by Planck. There are N = 10 entities (could be people, particles, companies, countries, schools, teams, etc.) and we have to distribute P = 100 of some quantity (could be energy, could be money, anything of interest) between these N entities. One possible way of doing this is given below. The elementary unit to be distributed will be called (epsilon) where is taken to denote some fixed amount which is then replicated over and over. In the problem considered here the total amount to be distributed P = 100. Example of one complex for N = 10 and P = 100 Entity No. Amount of quantity 1 2 3 4 5 6 7 8 9 10

38

11

20

The numbers in the bottom row add up to 100. Entity 1 has 7 of these 100, entity 4 has 0, entities 8 and 9 have 4 each and so on. There are obviously many different ways W in which this distribution of 100 can take place. The higher the number of ways W, the greater the extent of chaos in the system, or the greater the entropy S. The following expression for W, also given earlier, is obtained from elementary statistics studies (see also the article by Gearhart cited later here in Appendix 3). W = (N + P 1)! / (N 1)! P! (4)
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Here P! means the factorial of P and so on. As an example, 3! = 3 2 1 = 6 and 5! = 5 4 3! = 120. We can eliminate the factorials by invoking Stirlings approximation. Thus, P! PP and so on. This is applicable only if the factorial is for a large number. With this approximation, the expression for W becomes W (N + P)N+P /NN PP (5)

The total entropy SN of these N entities (with the W complexes associated with them and the distribution of the P as described between them) is given by the following expression, originally due to Boltzmann. In the physical sciences (physics and chemistry) the constant k is called the Boltzmann constant. SN = NS = k ln W + arbitrary constant (6)

Equation 6 is sometimes referred to as the fundamental postulate of statistical mechanics. The constant k is called the Boltzmann constant. Here SN is the total entropy and S = SN/N is the average entropy per entity. Each entity is associated some multiple of epsilon (), as described earlier. This gives us the expression for entropy, after some simple mathematical manipulations, mainly recognizing that the logarithm of an exponent like ln NN = N ln N and some other basic rules about logarithms, like ln (xy) = lnx + ln y and ln (x/y) = ln x ln y. SN = k[ (N + P) ln (N + P) N ln N - P ln P ] + const SN = k = Nk { [1 + (P/N)] ln [1 + (P/N)] (P/N) ln (P/N) } (7) (8)

Equation 8 involves the ratio (P/N) with N appearing outside the curly brackets {}. The algebraic manipulations needed to go from equation 7 to equation 8 are quite straightforward and were skipped by Planck in his 1900 paper. With N outside of the curly {} brackets in equation 8, one can now deduce the expression for the average entropy S per entity, see equations 9 and 10 below. SN = NS = Nk{ [1 + (P/N)] ln [1 + (P/N)] (P/N) ln (P/N) } S = k{ [1 + (P/N)] ln [1 + (P/N)] (P/N) ln (P/N) } (9) (10)

The expression for the average entropy S in equation 10 only involves the constant k introduced in the definition of entropy (equation 6) and ratio P/N. Both P and N are unknown integers and both assumed to be very large numbers.
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Let us also emphasize that the above expression for average entropy S has been obtained without appealing to any concepts from physics or blackbody radiation theory and so can be applied very generally speaking to any problem of interest. Equation 10 is entirely the product of straightforward algebraic manipulations using rules of logarithms and the definition of entropy as outlined by equation 6 and the method of determining W, as outlined in equation 5. Now, we are ready to take the final and most important step and eliminate also the ratio P/N which involves two very large unknown integers. This is what Planck did in his 1900 paper, see Plancks equation 6 at the bottom of page 309 in the book by Shamos, reference cited above. Let us say we have some property U of interest that we associate with the N entities. The same symbol U is used but it no longer means energy that was of interest to Planck in 1900. We use U to denote the average value of any property, or quantity, or characteristic, that we associate with N entities, whose average entropy S has been determined. Using the rule UN = P = NU, the total amount that needs to be distributed is P times the elementary epsilon and this is also the same as the product N times U where U is the average value we associate with each of the N entities. This means the ratio P/N = U/.

P/N = U/
This is the key step and an amazing one that is also used by Planck. But, we do NOT need quantum physics (QP) any more. We only need the symbols of QP and we can give them new meaning. S = k { [1 + (U/)] ln [1 + (U/)] (U/) ln (U/) } (11)

Now we have an expression relating the average U and S (energy and entropy in the case of physics, or some quantity and entropy we associate with system in other extensions of Plancks ideas). We also know that the temperature of this system is given by T = dU/dS or 1/T = dS/dU. It is now a simple matter to use the rules of calculus to find the derivative dS/dU using equation 11 above. All we need to do is the use the rule for the derivative of a product d(uv) = udv + vdu and use d (lnx) = dx /x. Hence,
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1/T = dS/dU = (k/) ln [1 + (/U) ]

(12)

Now taking reciprocal and after solving for U we get the following U = /( e/kT 1) = [ e-/kT /(1 - e-/kT ) ] (13)

This is an interesting result. We see that the elementary epsilon () must be multiplied by the exponential factor within the square bracket [ ] of equation 13 to arrive at U, the average value of the property of interest. Equation 13 gives the famous correction factor that Planck deduced in 1900 by determining the average U. Some of the steps taken after this by Planck are of no interest to us. Our only interest lies in the expression for U, the average value of property that has been distributed between N entities, using some elementary epsilon as the basic unit. There are many different ways W of accomplishing this distribution of the total of P (or NU) but magically both N and P disappear and we are left with the expression for U along with the notion of some temperature T associated with this process and the elementary . We can now appreciate why the power-exponential law is the correct mathematical law (which can be justified using simple statistical arguments as just shown) when we are dealing a complex system of N entities each associated with many different units of our elementary ; recall our discussion of the meaning of one complex. The elementary epsilon () takes the place of hx or mx, in the linear law. The latter implies that for any fixed change (or stimulus) x there is a corresponding fixed change (or a response) y = hx. More generally, we must use U with the exponential correction factor associated with , or hx, or mx. We also recognize that nonlinearity is inherent in this conception and that we cannot overlook the fixed costs. Thus, we get most general version of the law, the power-exponential law y = hxnU + c = hxn [e-ax /(1 + be-ax) ] + c = mxn [e-ax /(1 + be-ax) ] + c
Completed on 30MAY12, 3:54 AM Revised 8:33 AM.
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(14)

Appendix 3: Example of complexions due to Boltzmann From historical review paper by Gearhart
http://employees.csbsju.edu/cgearhart/Planck/PQH.pdf
*

Table 1. Boltzmanns example from 1877 showing how discrete energies are distributed among molecules to form equally probable complexions. Here seven molecules share, in all possible ways, a total energy of 7. Typically, many complexions are consistent with a single macroscopic state. Boltzmann equated the most probable state that is, the state with the largest number of complexions (here complexion 10) with the state corresponding to thermal equilibrium. Molecule Complexion Total ways

1 0 0 0 0 0 0 7 7 2 0 0 0 0 0 1 6 42 3 0 0 0 0 0 2 5 42 4 0 0 0 0 0 3 4 42 5 0 0 0 0 1 1 5 105 6 0 0 0 0 1 2 4 210 7 0 0 0 0 1 3 3 105 8 0 0 0 0 2 2 3 105 9 0 0 0 1 1 1 4 140 10 0 0 0 1 1 2 3 420 11 0 0 0 1 2 2 2 140 12 0 0 1 1 1 1 3 105 13 0 0 1 1 1 2 2 210 14 0 1 1 1 1 1 2 42 15 1 1 1 1 1 1 1 1 There are 7 molecules, numbered 1 to 7, going across from left to right in the top row. Together have a total energy of 7. Complexion no. 1, given in the first row, the first six have 0 energy units and the 7th has 7. There are 7 different ways to accomplish since any one of the 7 molecules could have the 7. Complexion no. 15 in last row, each molecule has energy 1. There is only one way to accomplish this. Complexion no. 2, 6th molecule has 1 and 7th molecule has 6. There are 42 ways to accomplish this. And, so on. Complexion no. 10 has the highest number of ways (420) and so it may be called the most probable states, see also P. Ehrenfest and K. Onnes http://www.dwc.knaw.nl/DL/publications/PU00012735.pdf
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Fig. 5. Ludwig Boltzmanns memorial grave in the Vienna Central Cemetery. The tombstone, dedicated in 1933, carries the famous relationship between entropy and probability developed by Boltzmann in 1877 and first written down in this form by Planck in 1901.

http://employees.csbsju.edu/cgearhart/Planck/PQH.pdf

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Einsteins 1905 photoelectric effect paper: On a Heuristic Point of View About the Creation and Conversion of Light 1. Stachel, John, et al., Einstein's Miraculous Year. Princeton University Press, 1998. ISBN 0-691-05938-1 2. http://users.physik.fu-berlin.de/~kleinert/files/eins_lq.pdf 3. http://en.wikisource.org/wiki/On_a_Heuristic_Point_of_View_about_the_Cr eation_and_Conversion_of_Light

Elementary References on Permutations and Combinations

http://www.themathpage.com/aprecalc/permutations-combinations.htm http://www.mathsisfun.com/combinatorics/combinations-permutations.html http://betterexplained.com/articles/easy-permutations-and-combinations/ http://www.omegamath.com/Data/d2.2.html http://en.wikipedia.org/wiki/Permutation

Two Important Quantum Physics Papers for review

http://www.dwc.knaw.nl/DL/publications/PU00012735.pdf Paper by P. Ehrenfest and K. Onnes, Communicated on October 31, 1914, to Proceedings of the Royal Netherlands Academy of Arts and Sciences (KNAW), pp. 870-873. "Simplified deduction of the fonnula from theory of combinations which PLANCK uses as tlte basis of his radiation theory." By Prof. P. EHRENFEST and Prof. H. KAMERLINGH ONNES. (Communicated in themeeting of Oct. 3J, 1914). http://employees.csbsju.edu/cgearhart/Planck/PQH.pdf Phys. perspect. 4 (2002) 170215 Birkhauser Verlag, Basel, 2002 14226944/02/04017046 $ 1.50+0.20/0 Planck, the Quantum, and the Historians Clayton A. Gearhart* Theoretical Concepts in Physics, by M. S. Longair, Cambridge Univ. Press, http://www.imamu.edu.sa/Scientific_selections/abstracts/Physics/Theoretical%20c oncepts%20in%20physics.pdf
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Permutations versus combinations: The difference between permutations and combinations discussed in elementary texts (see the example of how gold, silver, and bronze medals can be distributed among 8 contestants in the above links) could also be understood by referring to the Boltzmann complexions as follows. A section of the previous table is extracted below. Consider the complexions where we have distribute 7 between only two entities numbered 6 and 7 in our table. They were called molecules by Boltzmann, but apply, more generally, to many situations outside physics. The 7 could be distributed as follows between the two if we consider all possibilities (0, 7), (1, 6), (2,5), (3,4) which represent the first four complexion in the earlier table. We can continue with (4,3), (5,2), (6,1), as with the complexions labeled 4*, 3*, and 2* but we do NOT do this. Including them would be what is called a permutation. Excluding them reduces the number of complexions and we are dealing with combinations, not permutations. Molecule Complexion 1 2 3 4 4* 3* 2* Total ways 7 42 42 42 42 42 42

1 0 0 0 0 0 0 0

2 0 0 0 0 0 0 0

3 0 0 0 0 0 0 0

4 0 0 0 0 0 0 0

5 0 0 0 0 0 0 0

6 0 1 2 3 4 5 6

7 7 6 5 4 3 2 1

We can continue discussion with the 3 out of 7 entities receive some of the total of 7, and so on. This difference between permutations and combinations becomes important when we consider different product lines of a company. If each entity (or molecule in Boltzmanns scheme) represents a brand, the sales revenues from 100 units of brand A and 50 units of brand B is not the same as revenues from 50 units of brand A and 100 units of brand B even if total revenues is the same.

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Appendix 4 Summary of Plancks key equations from the December 1900 paper (From Great Experiments in Physics, Edited by Morris H. Shamos) The equation numbers are the same as those in Plancks paper as given by Shamos in the reference cited here. UN = NU SN = NS SN = k ln W + constant UN = P SN = k [(N + P) ln (N + P) N ln N P ln P ] Then, after some straightforward algebraic manipulations, SN = kN { [1 + (P/N)] ln[1 + (P/N)] (P/N) ln (P/N) } ............(5a) (1) (2) (3) (4) (5)

where P/N = U/ due equations (1) and (4). Equation (5a) is left un-numbered. This gives the entropy per entity S = SN /N and so the S and U relation. S = k { [1 + (U/)] ln[1 + (U/)] (U/) ln (U/) } .(6)

Equations (7) and (8) deal with the relation between the energy density u and the average energy U per resonator. This is the Rayleigh-Jeans law, or in our case the power law, y = Axn. For convenience, we reproduce u = (82/c3)U which means that for the power law in physics, x = the frequency, index n = 2, and A = 8/c3 1/T = dS/dU ............(9)

After performing the differentiation dS/dU using equation 6 above, Planck gets U = / ( e/kT 1) (11)

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Planck has already introduced = h where is the frequency and h is a constant (now called the Planck constant) into equation 6 before performing the differentiation. In our case, it is sufficient to leave the relation for U with at this stage. The result for U is used to modify the power-law, as already discussed, and as also used by Planck. The extension from quantum physics to economics and beyond is thus envisioned to proceed as follows. At the macro level, in the simplest case, we see the linear relation y = hx + c which implies a fixed increase in x by x always yields the same fixed increase in y given by y = h x. This y or hx is like a quantum or the epsilon in the more general case where we do not associate the meaning energy with the epsilon. This must be modified by introducing both the power-law exponent and the correction factor U since we must consider a situation where there many possible microstates or complexes as Planck puts it, or complexions as Boltzmann puts it. Each yields the same macrostate. Thus, we go first from the linear law y = hx + c to the power law y = hxn + c and then to the power-exponential law after introducing the correction factor U. y = hxnU + c = hxn [ / ( e/kT 1) ] + c = hxn [ e-/kT / ( 1 e-/kT) ] + c = mxn [ e-ax / ( 1 +be-ax) ] + c A brief summary of the classical and quantum physics equations is given below for completeness to illustrate the differences between the power-law (Rayleigh-Jean law) and the power-exponential law (Plancks law).

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About the author V. Laxmanan, Sc. D.

The author obtained his Bachelors degree (B. E.) in Mechanical Engineering from the University of Poona and his Masters degree (M. E.), also in Mechanical Engineering, from the Indian Institute of Science, Bangalore, followed by a Masters (S. M.) and Doctoral (Sc. D.) degrees in Materials Engineering from the Massachusetts Institute of Technology, Cambridge, MA, USA. He then spent his entire professional career at leading US research institutions (MIT, Allied Chemical Corporate R & D, now part of Honeywell, NASA, Case Western Reserve University (CWRU), and General Motors Research and Development Center in Warren, MI). He holds four patents in materials processing, has co-authored two books and published several scientific papers in leading peer-reviewed international journals. His expertise includes developing simple mathematical models to explain the behavior of complex systems. While at NASA and CWRU, he was responsible for developing material processing experiments to be performed aboard the space shuttle and developed a simple mathematical model to explain the growth Christmas-tree, or snowflake, like structures (called dendrites) widely observed in many types of liquid-to-solid phase transformations (e.g., freezing of all commercial metals and alloys, freezing of water, and, yes, production of snowflakes!). This led to a simple model to explain the growth of dendritic structures in both the ground-based experiments and in the space shuttle experiments. More recently, he has been interested in the analysis of the large volumes of data from financial and economic systems and has developed what may be called the Quantum Business Model (QBM). This extends (to financial and economic systems) the mathematical arguments used by Max Planck to develop quantum physics using the analogy Energy = Money, i.e., energy in physics is like money in economics. Einstein applied Plancks ideas to describe the photoelectric effect (by treating light as being composed of particles called photons, each with the fixed quantum of energy conceived by Planck). The mathematical law deduced by
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Planck, referred to here as the generalized power-exponential law, might actually have many applications far beyond blackbody radiation studies where it was first conceived. Einsteins photoelectric law is a simple linear law, as we see here, and was deduced from Plancks non-linear law for describing blackbody radiation. It appears that financial and economic systems can be modeled using a similar approach. Finance, business, economics and management sciences now essentially seem to operate like astronomy and physics before the advent of Kepler and Newton.

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http://hyperphysics.phy-astr.gsu.edu/hbase/mod6.html

Blackbody Intensity as a Function of Frequency

The Rayleigh-Jeans curve agrees with the Planck radiation formula for long wavelengths, low frequencies.

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Rayleigh-Jeans vs Planck
Comparison of the classical Rayleigh-Jeans Law and the quantum Planck radiation formula. Experiment confirms the Planck relationship.

Blackbody Radiation
"Blackbody radiation" or "cavity radiation" refers to an object or system which absorbs all radiation incident upon it and re-radiates energy which is characteristic of this radiating system only, not dependent upon the type of radiation which is incident upon it. The radiated energy can be considered to be produced by standing wave or resonant modes of the cavity which is radiating.

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The amount of radiation emitted in a given frequency range should be proportional to the number of modes in that range. The best of classical physics suggested that all modes had an equal chance of being produced, and that the number of modes went up proportional to the square of the frequency.

But the predicted continual increase in radiated energy with frequency (dubbed the "ultraviolet catastrophe") did not happen. Nature knew better.

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