tag:blogger.com,1999:blog-4413935813892441553.post8314450754501122343..comments2024-03-29T00:30:39.262-05:00Comments on real economics: The failure of economicsJonathan Larsonhttp://www.blogger.com/profile/05217670446743983955noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-4413935813892441553.post-703198895013316212012-06-11T15:29:34.901-05:002012-06-11T15:29:34.901-05:00I just read the essay of the disappointment folks ...I just read the essay of the disappointment folks seem to feel because the flying cars never showed up. I once actually met Molt Taylor at an EAA convention—the guy who actually held a USA patent on a flying car. This was in the mid 70s and he was an odd duck who somehow believed that there was some sort of conspiracy to defeat his flying car. The fact that no one in their right mind wanted to go out on a highway in something light enough to fly powered by a spinning propellor seemed just a minor detail to old Molt.<br /><br />That was the problem with science fiction—we were supposed to just ignore the real problems. Star Trek was about sitting on the bridge in futuristic outfits. I probably could have watched that show if just once, someone had to fix a broken toilet—without the right parts. And of course, the energy just came from nowhere. As I once told a friend, if I could have believed the bullshit of Star Trek, I could have believed the miracles in the Bible which would have saved me a host of arguments with my old man.<br /><br />Of course, my "bad" attitude about sticking to the realm of the possible has gotten me lectures over the years. "How do you KNOW something is impossible?" I would be asked by folks who thought I should be ashamed for my desire to squelch "creativity." And so I have watched people claim that 200 mpg would be possible if only we reformed our patent laws or that the moon or asteroids should be available to mine scarce minerals. And while the idiots babbled, we lost our chance to solve real problems with known methods. I remember once screaming at one of the fools, "Why do you want to believe the unbelievable when there are almost limitless possibilities within the realm of the doable?"<br /><br />I want you to know that "2001" is one of only two movies I actually walked out of. ("Caligula" was the other and there was a woman involved.) I am sorry, Kubrick wasn't a genius and his movies predicted absolutely NOTHING!Jonathan Larsonhttps://www.blogger.com/profile/05217670446743983955noreply@blogger.comtag:blogger.com,1999:blog-4413935813892441553.post-69550470046567659452012-06-11T14:47:35.432-05:002012-06-11T14:47:35.432-05:00Agreed on Keen--though it's a start, and being...Agreed on Keen--though it's a start, and being able to explain how the monetary portion of the economy functions is a valuable addition. For new products/technologies, I agree with you that math really can't model them that well--or, if it can, you can't use it to predict the future. Initial conditions of highly nonlinear systems, massive data requirements, and so on make it appear impossible. The best we can do is understand the conditions that foster new products/new innovations and make sure those conditions prevail.<br /><br />Oh, and another piece of reading that you might find interesting: "Of Flying Cars and the Declining Rate of Profit" by David Graeber http://www.thebaffler.com/past/of_flying_carsRJMeyershttps://www.blogger.com/profile/10148496665487999948noreply@blogger.comtag:blogger.com,1999:blog-4413935813892441553.post-78621350723300459082012-06-11T13:59:58.098-05:002012-06-11T13:59:58.098-05:00Thanks guys.
As for the Steve Keene model, it see...Thanks guys.<br /><br />As for the Steve Keene model, it seems like another instance that tracks money. Yes, math can do this. What I would like to see is a math model that could have predicted what happened to Solyndra. VERY hard to model something that involves a product that isn't on the market yet. Which is mainly my point. Easy stuff—math. Hard stuff in the real economy...I go with IA.Jonathan Larsonhttps://www.blogger.com/profile/05217670446743983955noreply@blogger.comtag:blogger.com,1999:blog-4413935813892441553.post-18263803638868042812012-06-11T11:05:22.275-05:002012-06-11T11:05:22.275-05:00Am I reading this wrong? Soros appears to be sayi...Am I reading this wrong? Soros appears to be saying "I call this X..." and "I developed a model for X...", and all these X things were done by other people. For example, a boom-bust model using dynamical system modeling based on Minksy was developed by Steve Keen (and probably some others before him). The term "reflexivity" has been in use in academic sustainability circles for well over a decade and describes exactly what he outlines above. At least he references Popper, but Popper was hardly the first person to comment on how our mental model of the world diverges from reality. Basically, did anyone else read this and get the impression that Soros was trying to pass off others' ideas as his own? Is he just that intellectually dishonest, or am I being unfair and reading too much into his choice of words?<br /><br />Jonathan: If you want to see an economist developing a mathematical model that actually seems to work (at least, for tracking money/debt dynamics), Steve Keen is the guy to look for. He's developed a simulation that uses double-entry bookkeeping (backed by differential equations) to represent monetary flows in an economy. http://www.debtdeflation.com/blogs/qed/. This post is a little old, as he's updated things a bit since then.RJMeyershttps://www.blogger.com/profile/10148496665487999948noreply@blogger.comtag:blogger.com,1999:blog-4413935813892441553.post-52449186819421975542012-06-11T10:46:28.666-05:002012-06-11T10:46:28.666-05:00Interesting speech, especially this part--
"A...Interesting speech, especially this part--<br />"Among other things, I developed a model of a boom-bust process or bubble which is endogenous to financial markets, not the result of external shocks. According to my theory, financial bubbles are not a purely psychological phenomenon. They have two components: a trend that prevails in reality and a misinterpretation of that trend. A bubble can develop when the feedback is initially positive in the sense that both the trend and its biased interpretation are mutually reinforced. Eventually the gap between the trend and its biased interpretation grows so wide that it becomes unsustainable."<br /><br />Because what happens in the financial market casino is firms manipulate the market to both create these gaps and then implode them when their financial schemes are in position to profit. And of course, it is much easier to destroy something than create something of value, so the entire financial market now is based on destroying investments instead of investing in producers. Just look to the multi-trillion dollar derivative market...is there even one dollar invested in there that is based on positive production?<br /><br />The entire financial industry not only needs to be divided from the true banking industry, it needs to be dismantled and eliminated as being an anti-social activity. It not only does not create jobs or add value to society, it destroys it...always has and always will, but when it was smaller 25 years ago it was hidden in the fog of real investment.<br /><br />The veil should now be lifted, investment banking has become anti-social, far more destructive than guns and drugs...but there are none so blind as those whose jobs (and political careers) are now dependent on the ill-gotten monetary gains of this industry...and none so blind as those who will not see.Mikehttps://www.blogger.com/profile/05252804186064393926noreply@blogger.comtag:blogger.com,1999:blog-4413935813892441553.post-38911469656803632402012-06-11T08:18:29.795-05:002012-06-11T08:18:29.795-05:00Did not know how Soros made all that money until n...Did not know how Soros made all that money until now. Thanks for the info.someofpartshttps://www.blogger.com/profile/09072141973865448445noreply@blogger.com