Physical Economics: A Unified Complex Dynamical System Framework Based on Consciousness Capital

This paper proposes a unified theoretical framework for economics based on complex open dynamical systems in 3+1 dimensional spacetime. We establish a fundamental ontological distinction between two irreducible subsystems: the formalization entropy-increasing subsystem—closed systems of finite symbols, axioms, and rules—and the consciousness entropy-decreasing subsystem—an irreducible non-formalizable domain transcending all finite rules. Core Insight: All formalized systems (institutions, technologies, capital, algorithms) are inherently incomplete and entropy-increasing. They cannot self-sustain indefinitely due to internal logical limits (Gödelian incompleteness, self-reference paradoxes) and external physical disturbances. Human consciousness is the only known autonomous force capable of reducing entropy, maintaining formalized systems, and creating real value. We revise the value conservation law: while consciousness is the sole original value source, formalized systems act as powerful value multipliers when guided by consciousness, but generate only entropy in isolation (formalization idling). Framework: We develop a five-layer unified framework: (1) Microfoundations: Quantum-like uncertainty and innovation dynamics; (2) Mesoeconomics: Classical dynamics of mature markets and institutional evolution; (3) Macroeconomics: Spacetime curvature, global imbalances, and income inequality; (4) Field Theory: Value flow and economic interactions; (5) Evolutionary theory: Long-term civilization dynamics and paradigm shifts. Contribution: This framework provides first-principles explanations for core digital economy paradoxes, including the productivity paradox (caused by exponential formalization outpacing linear consciousness capital growth), financial crises, platform monopolies, and AI’s impact. We show current AI systems, trapped in the "formalization cage," cannot generate genuine consciousness or value. This framework offers a coherent foundation for understanding value creation, inequality, institutional change, and human civilization’s future.