|A depiction the two main founders and current head of the Indian school of econophysics, namely Indians astrophysicist Meghnad Saha and physicist Prasanta Mahalanobis, who initiated the Indian econophysics movement, in the 1930s, and physicist Bikas Chakrabart, who in the mid 1990s initiated the Kolkata Econophysics conferences, the banner showing the 2012 7th Kolkata Econophysics Conference, this event specifically themed on the econophysics of agent-based models, e.g. Vilfredo Pareto's 1896 homo economicus. |
In 1931, Indian astrophysicist Meghnad Saha (1893-1956), an atheist, in his Treatise on Heat (see also: thermodynamics textbooks that include human thermodynamics), co-authored with B.N. Srivastava, explained the Maxwell-Boltzmann distribution of molecular velocities according to kinetic theory in terms of the wealth distributions in society: 
In 1931, Indian physicist Prasanta Mahalanobis (1893-1972), interested in Karl Pearson stylized biometrics, founded the Indian Statistical Institute (Ѻ) for developing physical and statistical models for social dynamics. 
In 1938, Saha began to form the Saha Institute of Nuclear Physics in Kolkata, India.
In 1994, the first econophysics conference—though it did not at this point go by this name—was held in Kolkata, which was initiated (revived) by Indian physicist Bikas Chakrabarti, along with his students, with a National Grant for Econophysics Research. Chakrabarti explains this more fully, in his 2005 chapter “Econophys-Kolkata: a Short Story”:
“Following the early studies of the Traveling Salesman and other multivariate optimization problems, employing classical statistical and quantum mechanical tricks, during 1985–1990, the Kolkata group made some of the earliest modelling investigations regarding the nature of wealth and income distribution in societies and its comparison with the energy distribution in some (quantum) gases.
In the 1994 Kolkata Conference, many Indian economists (mainly from Indian Statistical Institute campuses) and physicists discussed about the possible formulations of some of the economic problems and their solutions using tricks from physics. In fact, in one of these papers in the proceedings, possibly the first published joint paper involving both physicist and economist (Sugata Marjit) Indian co-authors, the possibility of ideal-gas like model of trading market was discussed. Among other things, it tried to identify, from the known effects of various fiscal policies, the equivalence of the kinetic energy of the gas molecules with the money of the agents in the market and of temperature with the average money in the market. Such a ‘finite temperature’ gas model of the market was first noted by Dietrich Stauffer (Cologne). With the possibility of putting more than one agent in the same microstate, identified by the price or money income of the agent in the market, the likely distribution was concluded there to be Bose-Einstein like, rather than Gibbs like.”
Individuals now associated with the Kolkata school include: Anirban Chakraborti, Arnab Chatterjee, Sitabra Sinha, and Kishore Dash, Subhrangshu Manna, and Parongama Sen, among others.
Physicist + Economist | First joint paper
Chakrabarti, above, asserts that 1994 Kolkata conference yielded, possibly, the first joint publication between a physicist and an economist.
The assertion seems to be the product of a lack of historical understanding of the field of "physics based economics"; specifically, the first joint papers involving both a physicist and economist certainly did not occur these Kolkata proceedings, the subject as a long two cultures synergy history, going back through the Princeton department of social physics (1945-1955), and before that the Lausanne school of physical economics (1890-1923), to name two examples, among other associations of human physicist pioneers.
Italian theoretical physicist Ettore Majorana, though he did not jointly publish, in his circa 1933 article “The Value of Statistical Laws in Physics and Social Sciences”, in fact, was the first to suggest the application of quantum statistical physics to social sciences (see: human quantum mechanics).
Financial physics or physics based economics
There is a certain amount of blurriness surrounding the use of the term "econophysics" in respect to the influence of the Eugene Stanley centric American school of econophysics in the formation of the Indian school of econophysics, in respect to if the subject is the study of the physics of humans from an economic point of view or if the subject is the use of physics equations employed to study financial markets (e.g. stock prices), the latter of which is not necessarily a branch of physics, the former of which is.
During this first Kolkata conference, American physicist Eugene Stanley assigned the name “econophysics” to the general subject, described above, of "physics tricks", as Chakrabarti calls them, employed in the study of finance. There have been at least two more Kolkata econophysics conferences since and citations of this 1994 Stanley so-called neologism portmanteau “coining” are frequently regurgitated by rote in nearly every so-called “econophysics” paper since, as though a new subject had been born in 1994.
This, however, is hardly the case, as the following two cultures namesakes evidence, to name a few:
Social mechanics (Francis Edgeworth, 1881)
Mathematical psychics (Francis Edgeworth, 1881)
Mathematical economics (Vilfredo Pareto, c.1892)
Pure political economics and social mechanics (Leon Winiarski, 1894)
Economic dynamics (Maffeo Pantaleoni, c.1908)
Human energetics (Wilhelm Ostwald, 1909)
Cartesian economics (Frederick Soddy, 1921)
Biophysical economics (Alfred Lotka, 1924)
Socio-economic thermodynamics (Person, 1962 (link))
Economic thermodynamics (Person, 1962 (link))
Some of this Stanley-themed association of the term "econophysics" as the use of physics "tricks" to study financial markets has resulted an an almost abuse of the word "physics", in the same way that American electrical engineer Claude Shannon's 1948 borrowing use of the probability logarithm of the the Boltzmann entropy for use in the analysis and modeling of the transmission of information in binary form has misled many information theorists to falsely believe that what they are doing is "thermodynamical", which is not the case. The same is the case here for many, who, such as American physicist Joseph McCauley, head of the University of Houston so-called "econophysics" department, falsely believe that use of physics equations and models to study and analyze financial patters is actually "physical", which is not the case. Romanian econophysicist Gheorghe Savoiu and American atmospheric physicist Constantin Andronache clarify that: 
“The field of research known as econophysics has alternative names such as financial physics and statistical finance.”
In this light, many who presently call themselves "econophysicists" are but using the term "physics" under false pretenses, the subject of many of these papers in no way at all related to Greek philosopher Aristotle's original Physics: Book One, definition of a physicist as one, such as Empedocles, who studies the principles behind the motion of bodies, which in this case would be the movements of the physical bodies of humans and the movements of the physical bodies comprising their transactions, described according to the standard model of physics.  Someone, such as English physicist and chemist Frederick Soddy and his 1921 Cartesian economics lectures, who applies actual physical laws to people in economic terms, is what would be called a "real" econophysicist or physical economist depending on usage.
● American school of econophysics
● Chinese social physics school
● Harvard Pareto circle
● Lausanne school of physical economics
● Mechanistic school | Mechanistic school of social thermodynamics | Pitirim Sorokin (1928)
● Princeton school of social physics
● Roegen-Daly school
● Romanian school of physical socioeconomics
1. Yakovenko, Victor. (2009). “Article”, in: Encyclopedia of Complexity and Systems Science, Volumes 1-10 (editor: Robert A. Meyers) (§V3, pgs. 2803-08). Springer.
2. (a) Saha, Meghnad and Srivastava, B.N. (1931). Treatise on Heat (pg. 105). The Indian Press, Itd.
(b) Saha, Meghnad and Srivastava, B.N. (1935). Treatise on Heat, Second Revised Edition (pg. 124). The Indian Press, Itd.
(c) Dash, Kishore. (2014). “Indian School of Econophysics”, work draft (Hmolpedia article) (pdf), Jan 30.
3. Econophys-Kolkata VII: Econophysics of Agent-based Models (8-12 Nov 2012) – Saha.acin.
4. Savoiu, Gheorghe and Andronache, Constantin. (2012). “The Potential of Econophysics for the Study of Economic Processes”, in: Econophysics: Background and Applications in Economics, Finance, and Sociophysics (§10, pgs. 91-113). Academic Press.
5. Aristotle. (322BC). The Complete Works of Aristotle, Volume One (editor: Jonathan Barnes) (pg. 319). Princeton University Press, 1995.
6. Email communication from Bikas Chakrabarti to Libb Thims (1 Feb 2014).
● Econophysics of Income & Wealth Distributions, B. K. Chakrabarti, A. Chakraborti, S. R. Chakravarty and A. Chatterjee, Cambridge Univ. Press, Cambridge (2013)
● Sociophysics: An Introduction, P. Sen and B. K. Chakrabarti, Oxford Univ. Press, Oxford (2013)
● Econophysics of Agent Based Models, Eds. F. Abergel, H. Aoyama, B.K. Chakrabarti, A. Chakraborti, A. Ghosh, New Economic Windows, Springer Int. Publ., Switzerland, 2013.
● Econophysics of Systemic Risk and Network Dynamics, Eds. F. Abergel, B.K. Chakrabarti, A. Chakraborti, A. Ghosh, New Economic Windows, Springer-Verlag, Milan, 2012.
● Econophysics of Order-driven Markets, Eds. F. Abergel, B.K. Chakrabarti, A. Chakraborti, M. Mitra, New Economic Windows, Springer-Verlag, Milan, 2011.
● Econophysics & Economics of Games, Social Choices and Quantitative Techniques, Eds. B. Basu, B. K. Chakrabarti, S. R. Chakravarty, K. Gangopadhyay, New Economic Windows, Springer-Verlag, Milan, 2010.
● Econophysics of Markets and Business Networks, Eds. A. Chatterjee, B.K. Chakrabarti, New Economic Windows, Springer-Verlag, Milan, 2007.
● Econophysics of Stock and other Markets, Eds. A. Chatterjee, B.K. Chakrabarti, New Economic Windows, Springer-Verlag, Milan, 2006.
● Econophysics of Wealth Distributions, Eds. A. Chatterjee, S. Yarlagadda, B.K. Chakrabarti, New Economic Windows, Springer-Verlag, Milan, 2005.
● Dash, Kishore and Thims, Libb. (2014-15). Evolution of Econophysics: a History of Physics Based Economics. Springer/Cambridge University Press.