Albert Einstein, nuclear bombs and economic growth

Albert Einstein won a Nobel Prize in physics in 1921. Interestingly, other scientists won more Nobel Prizes than him but are less famous. Marie Curie won two, one in chemistry and the other in physics. Linus Pauling won one in chemistry and peace. John Bardeen won two in physics, while Frederick Sanger won two in Chemistry.  Einstein’s key focus was theoretical physics, particularly relativity. 

His lasting legacy is an equation, E=mc^2.  E is energy, m is mass, and c is the speed of light (300,000 km/hour). Simply put, matter and energy are interconvertible.  From that simple equation, we developed nuclear reactors but also nuclear bombs.

One could ask why we are worried about oil when there is so much matter convertible to energy. True, but converting that matter to energy is the tricky part and taxed Einstein's genius.

Converting matter into energy was achieved through nuclear reactors to produce heat that generates steam to power generators. The other use is nuclear bombs. One good use, the other destructive.

It’s paradoxical that an atomic bomb, the precursor of the nuclear bomb, ended World War Two (WW II but left the world in fear.  After WWII, more countries developed the bomb. It became a status symbol among nations. Currently, the United States (US), Russia, China, the UK, France, North Korea, India, Pakistan and Israel (ambiguous) are nuclear powers.

South Africa was a nuclear power but voluntarily ended that status just before apartheid ended in 1994. Don't ask me why.

Iran harbours the dream of joining that class. But the US and her allies are determined to stop her. Iran's ownership of a nuclear bomb would tilt the balance of power in the Middle East and beyond.

Curiously, Kenya wants to go nuclear by generating power from reactors. Why go nuclear with so much renewable energy? Why go nuclear when other countries are abandoning nuclear reactors?

Nuclear weapons have not been used since WWII. They are deterrents; who wants to fight a nuclear-powered country?

The ownership has had unintended consequences; other countries want to be “safe” by being nuclear-powered. North Korea seems to have used that strategy. Some argue Russia could not have invaded Ukraine if she was nuclear powered.

Enough on nuclear weapons. Do not question my obsession with “hard stuff.” I was a physicist before converting into economics. The two subjects are not that different; they both look for trends and patterns, one in human behaviour, the other in nature.

What equation in economics rivals Einstein’s? I would suggest GDP = MV by Irvin Fisher.  GDP is the gross domestic product, the size of a country's economy or the value of all goods and services plus net exports. The equation refers to a period like a year.

M is the money in circulation, while V is the velocity of money in circulation: how fast does money change hands in transactions? The big question is how we would make the economy expand or explode like a nuclear bomb by increasing both the money supply (m) and the velocity (v). The money in circulation must be backed by goods and services, or else inflation rises.

To increase m, increase productivity through innovations. Put money where it matters, e.g agriculture or manufacturing. A bigger market, e.g exports, also increases money supply.  Increase v by making it easier to do business. Think of M-Pesa: fewer licenses, lower tariffs, paying debts, making it easier to get credit, buy and sell property, hire and fire or start a business, among other strategies. Reducing the informal sector could increase both m and v.

Every country, through its institutions, better laws and regulations, should increase money supply and its velocity till it becomes an economy superpowers like nuclear powers. That is what political leaders promise in every election. That was the content of Vision 2030 and the soon-to-be-unveiled roadmap to a developed country status.

Making nuclear bombs is not easy. One secret is refining the uranium, the key raw material in making such bombs. If you have followed the US-Iran war, that is not news; enriched uranium is one of the thorny issues. What of delivery systems like intercontinental ballistic missiles and guidance systems? You need lots of brains to design a nuclear bomb.

 But in economic growth, nothing is secret. Why then is economic growth so elusive? Culture and history often stop countries from developing. Daron Acemoglu, Simon Johnson and James Robinson won an economics Nobel Prize in 2024 by demonstrating the importance of societal institutions for a country’s prosperity.

Simply put, for a country to grow, reform institutions, from government to schools and even religions. Why else are some resource-rich countries wallowing in poverty?

 While only a few countries can acquire nuclear weapons, any country, no matter the size, can grow into an economic power. Singapore is an example. Why can’t we grow our GDP and join the club of rich nations just like nuclear powers?