Must-read.
Congrats to Paul Romer.
Lars P. Syll's Blog
Paul Romer gets the 2012 Nobel Prize in economics
Lars Syll | Professor, Malmo University
The most important understanding here is the difference between diminishing returns in deploying physical resources and increasing returns in deploying knowledge resources with respect to scalability. Ray Kurzweil develops this in his concept of <a href="http://www.kurzweilai.net/the-law-of-accelerating-returns">accelerating returns</a>
Also, that which is physically limited and particular is rival, whereas what is not limited physically and is universal is non-rival — unless legislated as rival through intellectual property rights, the current push being toward privatizing new knowledge that can be monetized. This is evoking huge push-back globally and is unlikely to be successful without an extension of imperialism.
This similar to what I have alluded to previously, e.g., Bucky Fuller's distinction between physical and metaphysical resource, the physical being limited and particular, and the second virtually unlimited and universal. The physical is scalable only with significant expenditure of physical energy and transaction cost, whereas the metaphysical is easily scale with low energy requirements and transaction cost.
Even though rationality is bounded, the boundaries are unknown and, given the present state of human knowledge, unknowable. As Aquinas observed, knowledge is in terms of the mode of knowing of the knower.
Thus, the question becomes whether it is possible to expand the container of knowledge in addition to the contents. There is reason to believe there is.
6 comments:
Another Aquinas observation:
"It is impossible for an effect to be stronger than its cause" - (Aquinas, 1274)
Little bit of entropy in there somewhere…
Nice paper.
http://www.nber.org/papers/w3210.pdf
And says it all in the first few sentences why Social Security is not going broke:
"Output per hour worked in the United States today is ten times as valuable as
output per hour worked 100 years ago. (Maddison, 1982). Since the 1950s, economists
have attributed much of the change in output per hour worked either directly or indirectly
to technological change. (Abromowitz, 1956, Kendrick, 1956, Solow, 1957."
and,
"The argument presented in this paper is based on three premises. The first is that
technological change—improvement in the instructions for mixing together raw materials—
lies at the heart of economic growth. As a result, the model presented here resembles the
Solow (1956) model with technological change. Technological change provides the
incentive for continued capital accumulation, and together, capital accumulation and
technological change account for much of the increase in output per hour worked."
Which means that even though there are fewer workers per Soc. Sec. recipient, the productivity changes more than make up for change in workers ratio. And current tech changes will likely accelerate the potential output.
The 2012 Nobel Prize in Economic Sciences will be announced on Monday 15 October
"The 2012 Nobel Prize in Economic Sciences will be announced on Monday 15 October"
This prize is not an actual Nobel, it is an adjunct supported by banking interests.
I suppose it's OK to take the recipients argument seriously but not without skepticism.
Once again, we must think for ourselves. Credentialism is a trap for the lazy-minded.
This is one of the reasons I admire your work JKH, even though I often don't see where it is going.
"The 2012 Nobel Prize in Economic Sciences will be announced on Monday 15 October"
The economic Nobel is not a true Nobel Prize, it is an adjunct supported by banking interests, which leads one to be skeptical of it's recipients ideas, and with good reason.
Credentialism at it's finest (or worst, depending on how one sees it).
There is no Nobel Prize in economics:
http://exiledonline.com/the-nobel-prize-in-economics-there-is-no-nobel-prize-in-economics/
It's just another credential ism scam.
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