Jag Bhalla is a very clear writer. This is an excellent albeit summary smackdown of the assumptions that underlie conventional economic discourse that have shaped the debate even among non-economists. In Steven Colbert's epic takedown, "truthiness." Short and worth a read.
Evonomics
The Epic Ptolemy-Sized Epicycling Errors of Free Market FansJag Bhalla
Gold standard thinking from Dawkins:
ReplyDelete" A forest canopy is like “an aerial meadow…raised on stilts…gathering solar energy.” Yet much of that “energy is ‘wasted’ by being fed straight into the stilts” which only raise “the ‘meadow’ high in the air” gathering “the same harvest…as it would—at far lower cost—if it were” on the ground. No tree can afford to ignore the height competition. But if somehow the trees could agree to limit their heights, each could save energy and the forest as a whole would be more efficient."
why would the trees ever think that sunlight was scarce?
alternative reveal:
"There is unrest in the forest
There is trouble with the trees
For the maples want more sunlight
And the oaks ignore their pleas
The trouble with the maples
(And they're quite convinced they're right)
They say the oaks are just too lofty
And they grab up all the light
But the oaks can't help their feelings
If they like the way they're made
And they wonder why the maples
Can't be happy in their shade
There is trouble in the forest
And the creatures all have fled
As the maples scream 'Oppression!'
And the oaks just shake their heads
So the maples formed a union
And demanded equal rights
'The oaks are just too greedy
We will make them give us light'
Now there's no more oak oppression
For they passed a noble law
And the trees are all kept equal
By hatchet, axe and saw"
https://www.youtube.com/watch?v=8_D0wkLyCXE
Ptolemy's model was actually far more accurate than those of modern mainstream economist. It made predictions that were reliable to the limitations of the data of the time and over considerable periods of time. Ptolemy's model (while wrong)at least made reliable predictions.
ReplyDeleteWould that today's mainstream economists had a model as good as Ptolemy!
Ed seems like it may come back to being able to analyze via DERIVATIVE action as far as our ability to PREDICT:
ReplyDeletehttp://www.csimn.com/CSI_pages/PIDforDummies.html
"Derivative Action – predicting the future
If you think about it, Derivative action improves the controller action because it predicts what is yet to happen by projecting the current rate of change into the future. This means that it is not using the current measured value, but a future measured value."
Seems like the economists are using a stochastic paradigm and relying on Integral Action (ie ex post) which cannot be used to predict...