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George Soros Turns (Semi) Austrian: "Why I Agree With (Some Of) Hayek"
Why I agree with (some of) Hayek, by George Soros
From Politico
Friedrich Hayek is generally regarded as the apostle of a brand of economics which
holds that the market will assure the optimal allocation of resources —
as long as the government doesn’t interfere. It is a formalized and
mathematical theory, whose two main pillars are the efficient market
hypothesis and the theory of rational expectations.
This is usually called the Chicago School, and it dominates the teaching
of economics in the United States. I call it market fundamentalism.
I have an alternative interpretation
— diametrically opposed to the efficient market hypothesis and rational
expectations. It is built on the twin pillars of fallibility and
reflexivity.
I firmly believe these principles are in accordance with Hayek’s ideas.
But we can’t both be right. If I am right, market fundamentalism is
wrong. That means I must be able to show some inconsistency in Hayek’s
ideas, which is what I propose to do.
Let’s start with Hayek’s influence on the twin pillars of my
interpretation. I was a student at the London School of Economics in the
late 1940s and read the great methodological controversy between Karl
Popper and Hayek in Economica, the school’s periodical.
I considered myself a disciple of Popper. But here I was on Hayek’s
side. He inveighed against what he called “scientism” — meaning the
slavish imitation of Newtonian physics. Popper took the opposite
position. He argued in favor of what he called the doctrine of the unity
of science — that the same methods and criteria apply to all scientific
disciplines.
I was drawn to this controversy by my interest in Popper. I had read his
book, “Open Society and its Enemies,” in which he argued that the
inconvertible truth is beyond the reach of the human intellect, and
ideologies that claim to hold this truth are bound to be false.
Therefore, he argued, they can be imposed on society only by repressive
methods.
This helped me see the similarity between the Nazi and communist
regimes. Having lived through both in Hungary, it made a great
impression.
This led me to Popper’s theory of scientific method. Popper claimed that
scientific theories can never be verified — they can only be falsified.
So their validity is provisional — they must forever remain open to
falsification by testing. This avoids all the problems of needing to
prove scientific theories beyond any doubt and establishes the
importance of testing. Only theories that can be falsified qualify as
scientific.
While I was admiring the elegance of Popper’s theory, I was also
studying elementary economics. I was struck by a contradiction between
the theory of perfect competition, which postulated perfect knowledge,
with Popper’s theory, which asserted that perfect knowledge was
unattainable. The contradiction could be resolved by recognizing that
economic theory cannot meet the standards of Newtonian physics.
That is why I sided with Hayek — who warned against the slavish
imitation of natural science and took issue with Popper — who asserted
the doctrine of unity of method.
Hayek argued that economic agents base their decisions on their
interpretation of reality, not on reality — and the two are never the
same.
That is what I call fallibility. Hayek also recognized that decisions
based on an imperfect understanding of reality are bound to have
unintended consequences. But Hayek and I drew diametrically opposed
inferences from this insight.
Hayek used it to extol the virtues of the invisible hand of the
marketplace, which was the unintended consequence of economic agents
pursuing their self-interest. I used it to demonstrate the inherent
instability of financial markets.
In my theory of reflexivity I assert that
the thinking of economic agents serves two functions. On the one hand,
they try to understand reality; that is the cognitive function. On the
other, they try to make an impact on the situation. That is the
participating, or manipulative, function.
The two functions connect reality and the participants’ perception of
reality in opposite directions. As long as the two functions work
independently of each other they produce determinate results. When they
operate simultaneously they interfere with each other. That is the case
not only in the financial markets but also in many other social
situations.
I call the interference reflexivity. Reflexivity introduces an element
of unquantifiable uncertainty into both the participants’ understanding
and the actual course of events.
This two-way connection works as a feedback loop. The feedback is either
positive or negative. Positive feedback reinforces both the prevailing
trend and the prevailing bias — and leads to a mispricing of financial
assets. Negative feedback corrects the bias. At one extreme lies
equilibrium, at the other are the financial “bubbles.” These occur when
the mispricing goes too far and becomes unsustainable — boom is then
followed by bust.
In the real world, positive and negative feedback are intermingled and
the two extremes are rarely, if ever, reached. Thus the equilibrium
postulated by the efficient market hypothesis turns out to be an extreme
— with little relevance to reality.
Frank Knight was the first to identify the unquantifiable uncertainty
inherent in financial markets. John Maynard Keynes and his followers
elaborated his insight.
Classical economists, by contrast, sought to eliminate the uncertainty
connected with reflexivity from their subject matter. Hayek was one of
them.
The methodological debate in Economica took place in the context of the
larger political controversy over the role of the state in the economy.
Hayek was on one side, Keynes and socialist planners on the other.
But Hayek subordinated his methodological arguments to his political
bias. That is the source of his inconsistency. In the Economica, he
attacked scientism. But after World War II, when the communist threat
became more acute, he overcame his methodological qualms and became the
apostle of market fundamentalism — with only a mild rebuke for the
excessive use of quantitative methods in his Nobel Prize acceptance
speech.
Because he was fighting communism, a scientific theory that proved that
market participants pursuing their self-interest assure the optimum
allocation of resources was too convenient for him to reject. But it was
also too good to be true.
Human beings act on
the basis of their imperfect understanding — and their decisions have
unintended consequences. That makes human affairs less predictable than
natural phenomenon. So Hayek was right in originally opposing scientism.
At the time of the Economica articles, Popper was between Hayek and the
socialist planners. He was just as opposed as Hayek to communism’s
threat to individual liberty, but he advocated what he called piecemeal
social engineering rather than laissez-faire.
Here I sided with Popper. But Popper and Hayek were not that far apart. I
was influenced by both — and I also found fault with both.
By identifying Hayek’s inconsistency and political bias, I do not mean
to demean him — but to improve our understanding of financial markets
and other social phenomena. We are all biased in one way or another and,
with the help of reflexivity, our misconceptions play a major role in
shaping the course of history.
Because perfection is unattainable, it makes all the difference how
close we come to understanding reality. Recognizing that the efficient
market hypothesis and the theory of rational expectations are both a
dead end would be a major step forward.
As in that earlier time, the political controversy on the role of the
state in the economy is raging today. But the standards of political
discourse have greatly deteriorated. The two sides used to engage in
illuminating arguments; now they hardly talk. That is why I was so
pleased to accept this invitation to the Cato Institute.
As I see it, the two sides in the current dispute have each got hold of
one half of the truth. which they proclaim to be the whole truth. It was
the hard right that took the initiative by arguing that the government
is the cause of all our difficulties; and the so-called left, in so far
as it exists, has been forced to defend the need for regulating the
private sector and providing government services.
Though I am often painted as the representative of the far left — and I
am certainly not free of political bias — I recognize that the other
side is half right in claiming that the government is wasteful and
inefficient and ought to function better.
But I also continue to cling to the other half of the truth — namely
that financial markets are inherently unstable and need to be regulated.
Above all, I am profoundly worried that those who proclaim half truths
as the whole truth, whether they are from the left or the right, are
endangering our open society.
Both Hayek and Popper, I believe, would share that concern. Those of us
concerned with the protection of individual liberty ought to work
together to restore the standards of political discourse that used to
enable our democracy to function better.
»
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Soros last words, “politics has become the most important factor”.
http://ineteconomics.org/video/bretton-woods/what-lies-ahead-panel-bretton-woods-conference-fitoussi-james-rogoff-soros-4-5
He is on target. This crisis has shown that. US citizens got it easy and their economists with them to pretend that politics did not matter as they were the political giant rising up over the crowd but now they are once again involved in power struggles in an obvious manner, denying the prevailing part of politics has grown much more difficult. Even though it wont prevent US citizens from doing it.
Data always exists when looking backwards, in any study. I do not think the supply and demand curves are whims -- they are non normative empirical statements of cause and effect. The "market" is screwed because it manipulates the relationship.
This nugget particularly caught my eye: "But I also continue to cling to the other half of the truth — namely that financial markets are inherently unstable and need to be regulated."
Regulated by whom, George? Is there a mundane, singular power greater than the market itself?
It doesn't matter to George whether he is right or wrong in the eyes of others. He is right to himself, as it aligns with his supreme "vision"...perhaps culminating in the role of enlightened despot?
"gold." that's all he's said here. "buy gold." next question....
And that, my friend, would be a market-participant decision. No need for regulation.
outlaw fractional reserve lending... its theft.
I have studied it carefully, it takes as much faith to believe in evolution as it does in a prime mover - the fossils are there, but the conclusions drawn are probable at best. The "hard facts" are never really all that hard when closely scrutinized.
He's the major donor to the Center for American Progress, which in turn runs the blog Think Progress.
Think Progress has been smearing the Koch Brothers all year. The Koch Brothers founded Cato.
So, Soros has been funding a blog that's been dedicated to smearing the Koch's, and then the Koch funded Cato invites Soros to speak about Hayek.
While Soros and the Kochs agree on civil liberties (they both want the Patriot Act repealed, want drugs legalized, etc.), they are ideological opposites when it comes to economic liberty. I don't understand why they'd invite a guy who has been funding attacks on them to speak at an event about economics. Doesn't make sense.
The intent of establishing an open dialog/debate between very different points of views is to discover logical inconsistencies and contradictions in either argument.
This enhances critical thinking skills, and tolerance for differing viewpoints.
The ability to speak-up and express yourself, without arrogance or anger, when your views/opinions are challenged is a skill our society is sorely lacking.
+10 It's nice to see a reasonable, intellectual economic analysis without diatribes and doctrine.
there is a diatribe and there is doctrine in what soros says. He says there needs to be a group of people called the guardians who control and regulate the people because they are smarter and more virtuous than the people.
Dollar over supplied, price goes down, hardly whimsicle. Sure, the economic date the gubermint gives out is just plain false. Inflation almost nil, maybe 2-3% - give me a break.
All these perfect market wankers don't understand basic human psychology since the Greek days. Amen to theoretical visions of puritanical economics...The USA oligarchs never believed in it..."You can buy any Ford car you like provided its black"!
this post is such a rorschach test.
and I don't see any fuckin butterflies.
Above all, I am profoundly worried that those who proclaim half truths as the whole truth, whether they are from the left or the right, are endangering our open society.
Which is why it is better to err on the side of placing the fate of the economy in the hands of many individual market actors and not on the side of centralized control.
Let see and the current "many individual market actors" would be Goldman, JP Morgan, IMF, the World Bank and the Federal Reserve???
Hmmmm and the other choice is "centralized control"?
Can we find a third one? I don't like the first two!
you would have made Hayek proud
In the last paragraph he claims to be concerned for personal liberty but earlier he said, "financial markets are inherently unstable and need to be regulated."
Who does the regulation? The collective. Who does the regulation benefit? The collective. Where is individual liberty in that?
Who is John Galt?
Maybe by personal liberty he means the right to be cavity searched by fat stupid perverted TSA workers?
Indeed. A regulator is just another market participant -- a very powerful one -- prone to corruption, incompetence, ideological bias and unintended consequences.
Adding a regulator therefore does nothing to "stabilse" a market ... and the empirical evidence of the past 100 years shows that booms, busts and inefficiencies have indeed been just as bad (or worse) than what came before all the Keynesian socialist market rigging.
Hmm, it all seems a bit holier than thou. Like someone clearing a guilty conscience.
+++
I have not read the writings or theories of these people, but I infer a mistake in their interpretation of what things like "efficient market" should mean.
If anyone here understands servo systems they know that it is only "errors" (analogous to "inefficiencies") that drive the active elements in servo systems (usually motors). Thus a servo system (like a market) is forever searching for "no error" AKA "efficient", but given the [typically] chaotic environment they operate in, they only achieve "no error" or "efficient" momentarily now and then.
The article assumes the meaning of "efficient market" the way most people seem to take it... as if the market is always efficient AKA always has zero error. But even simple thought about the nature and dynamics of these systems reveals that to be completely incorrect. An "error" AKA "inefficiency" is required to activate these systems. In markets, somebody must judge "asset x is now cheaper [or more expensive] than its value" to give them an excuse to buy or sell that asset. In servo systems, the sensors must judge "position or velocity [or some other property] is now too low [or too high] to send power to the robotics (motors) to attempt to correct the error.
Of course markets are inherently less stable than most electro-mechanical servo systems due to variability in the sensor systems. For example, it is a simple and obvious fact that "one ounce of silver" has different values to different people. For example, one manufacturer might be able to substitute another material when the price of silver exceeds a certain level, and another manufacturer might have no such luxury. Thus the "sensory inputs" to the market servo-system is inherently a highly complex pseudo-sum [of sorts] of all the valuations and feedbacks of all individuals in the world [who have any relationship whatsoever to the asset in question].
Therefore, from what I can infer from this article and others, the argument between these sides is mostly caused by their failure to clearly identify and understand the basic concepts their logic is based upon.
I see this same failure in endless fields and situations. It is analogous to the absurdity of the endless fights about the notion "greed is good"... without anyone saying whether their concept of "greed" means "I want lots of goodies so I must produce lots of goods to trade for them"... OR... "I want lots of goodies so I will lie, cheat, steal, defraud, enslave, murder, lobby and bribe people in congress and government to realize unearned gains to trade for what I want". I've seen endless arguments of these kinds, most of which spring from a complete failure (on both/all sides) to "state your premises" and "clearly reveal your meanings".
In this particular debate, one principle must be clearly identified... that any claims that "theory x" or "theory y" or "theory z" is "more efficient" is of no practical consequence (cannot be applied in the real world) --- if that theory involves violating the rights of any individual. Yet so often the premise of these fights is "we will force one of these theories down the throat of everyone in the country [or world] once one of us wins the debate". Anyone who makes such a claim should be immediately executed for treason and crimes against humanity, which renders the whole debate rather "academic" in any honest, ethical world.
People like Soros are all about forcing everyone on earth to comply with his authoritarian wet dreams. Therefore, anything he says needs to be understood as a scam intended to defraud and enslave. And the notion that somebody is "wrong" because they are "pre-disposed to honesty or liberty" is also a massive sham, and identifies the accuser of being an agent of elitist authoritarianism. The fact is, the only legitimate debate is "which of the systems that do not violate honesty, ethics, justice and individualism is the most efficient, secure, stable, pick-your-attributes".
Sorry, but Soros is the biggest fucking fascist crony asshole on the planet. He's just talking Hayek as a trial balloon to get the 70% of the non-ecobots and non-NWObots onto the IMF plantation.
He is fresh off his week of NWO interstellar totalitarian banking conference. That was Phase II of the takeover of our planet. He has to talk fiscal responsibility and Hayek, but it is absolutely the last thing he/they want which is a world fiat.
If Soros prefers a gold standard and personal use of gold as a currency so the little people can protect themselves from people like him he should say so on the record, otherwise...... no tears for the old man's last nap.
System.out.println(george_soros.is_liar() || george_soros.is_moron())
>true
Soros's writing couldn't be more confused. Hayek was of the Austrian School, not the Chicago School.
If you want a clear understanding, read this: The Ultimate Foundations of Economic Science by Ludwig von Mises: http://mises.org/books/ultimate.pdf
Warning: this is an extremely difficult read, but worth it in the end.
First off, could the palindrome please explain how a small bunch of bureaucrats will be able to see the "real reality" while millions of market participants around the world will be just seeing their "fake reality"? Second, the "fundamentalists" at the Chicago school don't teach that markets are instantly efficient in the short run, but rather dynamically efficient over the long run. That is to say, when new information becomes available, allocations change. Who is to say that people who chased the housing bubble were't rational, where else could you make money post Nasdaq bubble? If and when people do dumb things, they fail and their assets are reallocated via bankruptcy.
+++
Very good!
Markets are always approaching efficiency, based on available information. they never full reach efficiency, and of course available information changes.
Blah blah blah...if I have access to a printing press, in a fiat system, I can print whatever short term prices I want. Thanks Soros. Now shut the fuck up.
From the Sceptical Market Observer: Keynes vs. Hayek Round Two.
People like Soros control Bernanke
King Bernanke says there is no inflation :) In Syria Assad claims everyone loves him. Dictators say what they feel like because they can get away with it.
The dictatorship of FED/Bernanke is printing money and giving it to the select few Banks, who are making a killing gambling in stocks and commodities, like Soros. They are now selling to the masses (someone is selling, guess who?)
In return, the FED/Bernanke dictatorship is being kept in power, by those who are getting rich. As for poor US Citizens, they are being fornicated by inflation in food and fuel. As the dollar dives, this inflation will accelerate. US Citizens will be hit extra hard. The poorer you are the worse the Bernanke-Tax hits you. If food and fuel are all you can afford, then the Bernanke-Tax is much higher for you.
King Bernanke and his FED will be in power long after Obama is gone. Isn't it embarrassing for Congress or Obama that no one really cares what they say or do? Congress looks impotent while King Bernanke holds court and decides who gets his largess.
But don't expect King Bernanke to give you a loan, -he only prints money for the Banks. Like Hayek and Rothbard point out... those who get the money first get the full benefit and purchasing power. Eventually is trickles down, but then is only worth pennies on the original value.
rant off/
here is some FED humor featuring Steve Carell and the cast of the OFFICE:
http://www.youtube.com/watch?v=kbPjNLWMjZ8
The efficient market hypothesis is obviously suspect.There is absolutely no a priori reason to believe that with private information or superior intelligence one couldn't outperform the market. If the efficient market hypothesis were really true then all speculation would be in vain.
Also, the Chicago school is a joke. It's steeped in illogical monetarism in which the markets are said to be efficient at managing economic goods, like potatoes, but for some reason only the government can step in and manage other economic goods, such as tokens of exchange.
Soros is confused because he's fallen prey to a bunch of nonsense.
"Popper took the opposite position. He argued in favor of what he called the doctrine of the unity of science — that the same methods and criteria apply to all scientific disciplines."
The problem is that rocks travel down a hill because gravity affects them. People travel down a hill because they want to get a pail of water. The first behavior is causal (past-caused); the second behavior is teleological (future/goal-oriented). Though both rocks and human brains are elements of the natural science, there is no unified science that explains both the action of rocks (pyhsics) and human action (economics).
" Though both rocks and human brains are elements of the natural science, there is no unified science that explains both the action of rocks (pyhsics) and human action (economics). "
Reminds me of the ongoing attempts to reconcile quantum mechanics and general relativity!
The solution is too obvious and too simple for smart folks to understand. Multiple eigenstates, poly-cosmos, etc.
As applied to finance, obviously the gold price went up and went down today, it's just a question of which historical track you ended up in.
People travel down a hill because gravity affects them.
People travel down a hill because gravity affects them.
People travel down a hill because they decide to, then move their muscles in the manner necessary to propel them down the hill.
People travel up a hill because they decide to, then move their muscles in the manner necessary to propel them up the hill.
I supposed you believe people cannot travel up hills, because gravity prevents it? Wow! Is it not amazing how people purposely blind themselves to reality to support obviously defective theories. Freaking wow!
>People travel down a hill because they decide to, then move their muscles in the manner necessary to propel them down the hill.
Sigh... You completely missed the point.
The question is, why did they decide to walk down the hill?
Why did they decide to shop at store A and not store B?
Why did the people arrange for construction of a new factory?
Since the people are composed of cells, which are composed of proteins, which are composed of molecules, which are composed of atoms, which are composed of nucleons, which are composed of quarks, an answer using quantum chromodynamics should be possible. How will you answer?
I suspect your argument, much like a neutrino, is highly likely to sail right through him having had no discernible impact or effect.
Oh, so that was supposed to be the classic question of "hard-core determinism" versus "regular-old determinism" versus "self-determinism"?
Or, as sometimes formulated, do certain configurations of components have properties that other configurations do not? Or do certain configurations of components have properties that the components do not.
The answer to that is yes. Human beings have properties that atoms do not. Those properties do not contradict the properties of the components, but they are sometimes quantitatively, qualitatively and completely different.
One trivial example: hydrogen and oxygen at room temperature are gases (behave like gases; for example "are easily compressible", etc). But combine hydrogen and oxygen and the result (either water or hydrogen peroxide) is liquid (not easily compressible, etc).
Complex machines (including humans) have many "emergent properties" that are not properties of their components.
Is that really the question being debated? If not, you'll need to explain further. Clearly I am not privvy to the decisions made by those people who chose store A over store B or vice versa. I was simply responding to a statement that appeared to say "gravity" is why humans walk down hill, implying gravity prevents people from walking up hill, and also implying people do not have volition (which I prefer to call "self-determinism").
Please look at the threads above. I suspect you do not realize that I was not answering or contradicting you. I was answering and contradicting someone who contradicted you. To understand my reaction to this article, look elsewhere in this thread for my more detailed answer to it. My response is different from yours (from a different angle), but does not contradict yours.
>"hard-core determinism" versus "regular-old determinism" versus "self-determinism"?...Is that really the question being debated? If not, you'll need to explain further.
No, that question involves metaphysical dogma, not science.
The question being discussed is whether the epistemology of "hard" sciences (e.g. physics, chemistry, etc.) is appropriate or suitable for sciences studying human action (e.g. economics, warfare, etc.), or whether other methods are required. Are causality, mathematics, and experimental methods appropriate and suitable tools to understand why a person builds a factory? Or should one use other epistemological approaches like an assumption of teleology (the person acts to achieve some future goal) and use of deductive logic?
Is there really a unified science describing both physics and economics?
You appear to think you're asking the same question in multiple ways, but you're not.
Q1: Is the epistemology of "hard science" appropriate or suitable for studying human action, or are other methods appropriate and suitable. Are causality, mathematics and experimental methods appropriate and suitable tools to understand why a person builds a factory.
Q2: Is there really a unified science describing both physics and economics.
These are not easy questions to answer briefly, and almost impossible to defend without dozens or hundreds of pages. So here are quick attempts.
I have one epistemology, and no need for multiple epistemologies to understand every existent and every process. So I'm guessing you don't literally mean epistemology, but the different techniques commonly applied in "simple physical processes" versus "human behavior".
So even though my knee-jerk reaction is to answer "not unified", after deeper thought "unified" is more accurate, even though any specific analysis does indeed emphasize different conscious processes.
To be sure, we typically adopt different techniques (conscious processes and/or computer programs) to understand or predict different physical processes. To put a satellite into orbit involves basic physics, but also is inherently teleological since the design and construction of the rocket and satellite was to achieve a future result. Of course we can say "forget how this rocket and satellite came to exist" and ask the question this way "what will happen when we push the launch button?" as a simple matter of physics.
Hmmm. That's not every satisfying. Let me try another angle from the perspective of an expertise of mine, namely inorganic consciousness (consciousness implemented with exclusively with inorganic sensors, computer, software, robotics).
I can tell you with certainty that choices and decisions are causal processes in both organic and inorganic consciousness, and this does not invalidate so-called "volition", which is better understood as "self-determinism"). Sure, decisions can be influenced by cosmic rays smacking into human-neurons or transistors in ICs, but let's omit these processes for the moment and only consider the nominal non-random function of consciousness in the absense of random glitches and accidents.
And yes, some simple mathematics is involved in choices and decisions, though math tends not to be very central to those processes.
As for "experimental methods", I don't immediately see how they are involved in making choices, though they certainly could be used to figure out how a specific being made a specific choice after the fact.
When you ask Q2 I'm not sure how to respond, and it makes me wonder whether I'm missing some premise in your question. I must say, I do consider designing and implementing a human-level+ inorganic consciousness to be "science". No aspect of the architecture, design or processes is mystical or supernatural in any way. It might take you a few million years, but you could single-step through the entire process of "choice", observe every machine instruction execute, and "understand" why that conscious entity made its choice... including a great many considerations of values, goals and other teleological aspects.
So where am I? I guess "simple" hard-science problems tend to be very simplified and/or idealized and not contain much or any teleology... though every servo system is teleological in a sense, and even relatively simple physical systems contain servos. But still, they sure as hell aren't as complex or all-encompassing as "choices" made by conscious beings.
Which brings me to one important observation about consciousness that relates to the issue of "volition" or "self-determinism". A conscious being observes and experiences an enormous quantity of "frames of awareness" after several 100,000 hours of consciousness or more. If they happen to be a scientist, this includes thousands of galaxies (which they are seeing as they were millions to billions of years ago due to the speed of light), a wealth of organic and inorganic macroscopic objects and processes, and untold entities and processes on microscopic scales via optical and electron microscopes, etc.
ALL of this experience is available to them every time they make a decision. Furthermore, whether you believe their "volition" is real or illusion, they believe they can make an unlimited number of decisions (take an unlimited number of actions).
This is an interesting process, no? In principle (and in practice only limited by the finite experiences any mortal being has), the input to the "decision process" is every entity, event and process in the universe for at least the past 10 billion of years. Also in principle (and in practice only limited by the finite lifetime of a human being and the physical limitations of his body and the machines he can operate), the output of the "decision process" is an unlimited number of actions by that being directly (and unlimited other beings who consider his actions) with ramifications unlimited in time, space, scope and significance.
So consider this process we call "choice"? The input is "potentially everything in the universe for the eternity of the past". The output is "potentially anything in the universe for the eternity of the future". And the choice itself is what?
The "choice" is like a singularity. Not in its operation, for each choice refers to many if not zillions of considerations... not only of the past, but of consequences of possible responses to each possible action taken in response throughout the eternity of the future".
So in principle, each "choice" by a conceptual-level being is a "functional singularity" between the entire universe and entire past... and the entire universe and entire future. This "choice process" is a certain type of "cause". It is most certainly a "causal process".
Anyway, I still feel like I'm dancing around the question, because I still don't understand the ROOT premise of the question.
In some ways the "science" and "epistemology" of physics and economics are the same. In other ways they are different. Thus I'm not sure what's the point of the question.
However, I must make one very important point about the formulation of your final sentence and question. We can describe both physics and economics with the same processes of consciousness, and many of the same intellectual tools. However, I must state the following two points in parallel, and I hope you see why.
#1: It is utterly and totally unethical and unacceptable to force any conscious being to obey just because you understand or can formulate principles or equations to describe physical processes.
#2: it is utterly and totally unethical and unacceptable to force any conscious being to obey just because you understand or can formulate principles or equations to describe economic processes.
My point is, if you want to apply your knowledge of the principles and equations of physics to building something for yourself, and you do not harm others, you are completely within your rights to do so. But you are never within your rights to force others to do so.
Likewise, if you want to apply your knowledge of the principles and equations of economics to investment or some other project that only impacts you personally, you are completely within your rights to do so. But you are never within your rights to force others to do so.
I make a big deal of this because almost ALL debates and discussions about economics presume it is perfectly okay to FORCE others to obey orders, adopt practices, and comply with some universal, imposed "economics system"... as if the winner of an argument about economics can be dictator of the universe, while the winner of a physics debate just gets applause.
That assumption is pure predatory propaganda.
This observation is not tangential, either. It means that a great many "theories" about the behavior of fully free markets are perfectly legitimate and appropriate. But it also means EVERY theory about EVERY form of "economics" that requires authoritarianism of any kind is bogus (unless clearly labeled "this economics would be utterly unethical to implement and therefore this is simply a useless academic thought experiment"). But that's not what the war between these economists is about. One is advocates statism and authoritarianism and the other attempts to observe and identify the actions of people in a world of liberty and justice.
One is an apology and justification for predators. The other is a theory about the behavior of free people. These are NOT commensurate, and must not be treated as such by any ethical being.
You infer too much. People travel down a hill because gravity affects them. Your answer (with your muscle story) hints at you not understanding what it meant.
Because I have free will, ye shall get no deterministic answer from me.
So THAT'S why I can't seem to ever find my way out of Death Valley!
Hahahaha. Good one! :-)
you don't understand his unity of science definition.
Popper believed in a logical positivism in that if it was not subject to falsification it was not science. since we cannot prove anything to be true, but we can falsify it, then this unity of science is applicable everywhere.
I can never prove that all swans are white just because all that I see are white swans.
However I can prove that not all swans are white just by seeing one black swan.
certain statements are falsifiable, hence scientific. any statement that is not falsifiable is not scientific. That is the unity of science.
Popper's vision had to be overcome due to various limitations. The world did not end with Popper's thesis.
I would suggest "Captain Obvious" catering to a select group. It is a certitude if you stand in the middle position it arranges itself as a perfectly aimed dart called pandering. Logic suggest his bent of mind he chooses to forward to your "basis of their imperfect understanding" Sorry your legion of lost Ideologue's will be deconstructed here.
he clearly makes a mistake mixing up hayek with Chicago school.
However, I believe Soros stands for 'passive' regulation: higher capital requirements, margin requirements...
In that sense the regulation is quite fair since it is simple and we don't need a big SEC,...
=> in contrast with the messup regulation we have now. I believe lobbyists made the rules mmore complex on purpose what they're saying is: 'we need better (read more complex regulation'
That last sentence is the root of all evil.
the problem is the selective bailouts... higher margins just limits the players, but if they get bailed out they can recycle over and over smaller bets instead of a few massive bets
Saruman...speak... pretty... Here, take my ring...
The market is a force of nature like the ocean- it cannot be regulated, it can only be navigated.
Soros would have all be on the same ship to share his fate should it capsize.
Soros has the gift of talking out of both sides of his mouth...now he wants us to shut off the mechanisms that keep us alive; shut off reason and ignore the fact that we can see the wolf's tail peeking through the sheepskin.
What the hell? Did Soros just say that Hayek was from the Chicago School? This is news to me, I never read anything of Hayek to hint that he was a Monetarist. Sure, Hayek was a socialist during his younger years, but then he met and worked with Ludwig von Mises. After that, he became an Austrian. Sure, he wasn't as steadfast in disavowing the interventions of the State at Mises was (and, nowhere near as Anti-State as Rothbard), but his methodology was pure Austrian.
Soros is definitely up to something here, and it stinks. He is trying to initiate a new monetary standard, so I imagine that this is nothing more than an appeal to the hard-money side. The problem with this particular strategy of his is that almost all Austrians and hard money proponents know of his past, and think that he is absolute evil.
All regulation is imposed by the powerful and influential for the benefit of the powerful and influential.
Our founders knew this and wrote about it. They gave us the constitution we no longer heed as the best antidot against the oppressive regulation of "Kings". It has taken just over 200 years but now the Kings are once again acendant and planning to control our every thought and action with their regulations.
Who is John Galt.
If the intent of our founding fathers was "so noble", could you please explain why "Shays Rebellion" occurred?
Oh, wait. I forgot that the modern captains of finance no longer go down with the ship, in fact they make sure they're first ones into the life raft.
I wonder how far I can stretch this analogy.
Maybe I can be a pirate somehow...
There is nothing mathematical about the rational approach to human action of the Austrian school. Nor do Austrians believe in efficient markets.
Soros' view of the open society is merely double speak much like his equation of Hayek with Chicago school. Soros is very smart, his use of Popper's reflexivity theory is spot on, smart he may be but at the same time he is a very evil authoritarian fuck.
>Nor do Austrians believe in efficient markets.
Correct. And per the Austrian School, people are rational, but in a very strict sense: they act within their capabilities so as to most efficaciously remove their felt uneasiness. If your favorite hobby is snorting coke, then snorting coke is indeed the rational thing to do. If you want to save for retirement, but think hoarding yellow rocks is absurd, then hoarding green confetti may be the rational choice even if it turns out to poorly serve your goals in the end.
correct.
I don't get it... I just don't ger it.... Of course, I must add, that I don't ever get the math problem on these threads on the first try.... It must be the ganja.....
see what I mean....
maybe 50 years ago one could say that there are missing links in the fossil record. This is no longer the case. You can easily follow lineage. With all the paleontologists at work on different continents we can now correlate fossils and stratigraphy. Throw in lab work done on DNA / mitochondria and you can easily nail lineage. We do it with humans, where you can follow migrations of peoples out of Africa, even at different time, follow them out through Kamchatka, and down througgh the Americas. The only thing that stops this are extinction events.
Supply and demand are subject to whims of people and if you wish to extrapolate out, ultimately greed, a whimsical human trait. Today we will not buy gasoline because it is too expensive, the greedy oil companies; gold was up today because of speculators so I'll wait for another day even though the dollar is getting crushed. We won't pump any more oil today, the Americans are pissing us off...data or whims ????
Wow, you are so incredibly wrong in just about every regard it's funny. The only people who say this kind of stuff are mixes between Richard Dawkins and Noam Chomsky.
"This led me to Popper’s theory of scientific method. Popper claimed that scientific theories can never be verified — they can only be falsified. So their validity is provisional — they must forever remain open to falsification by testing. This avoids all the problems of needing to prove scientific theories beyond any doubt and establishes the importance of testing. Only theories that can be falsified qualify as scientific."
Just because something is open to attempts at falsification does not make it false. This is like saying everything is provisional. What good can one do in a World where the sum of all knowledge is unknowable in the span of a human life without reliance on theories? Assuming snowballing fallibility and the invalidity of all theories is the weirdest type of trader's rationalization I have ever seen. Amoral speculation goes down better with some bullshit smeared on top.
Being bitch slapped in bondage by the invisible hand is better with relativistic accompaniment.
Reflexivity means that things overshoot. Wow. Rational expectations and efficient markets theory are false. Everyone with three experiences knows that. People become honorary geniuses when they get a billion dollars.
That was pretty dopey of soros.
He is saying that he doesn't understand the scientific method, or that he wants to wish it away.
Bottom line you can never prove a scientific theory true. Unless you can posit a falsifiable hypothesis you are not working with science. You are in the realm of faith based beliefs instead.
Hayek- Neither a Chicago School Economist or an adherent of EMH
http://www.tomwoods.com/blog/george-soros-not-just-sinister-also-stupid/
yep this monkey should stick to what he's best at: 1) dumping illegal cash money into leftwing causes and 2) collaborating with the Nazis in WW2
He supported fascism? No wonder he liked Keynes.
Fredrich refused to become a Keynesian wampire like me and live forever
Phaderus are you off the cuff denying things like DNA work, radiometric age dating, the fosil record, stratigraphy ?? Flat earther, scientific cynic ???
You humans operate on the basis of imperfect understanding.
Abandon all hope. Leave the speculation to us.
Let me break it down:
Cognitive and manipulative functions of participant's thinking connect “reality and the participants’ perception of reality in opposite directions. As long as the two functions work independently of each other they produce determinate results.” Soros is saying as long as people don't understand their mistakes, we make money. When the brain meets the hand things go wrong, way wrong. People make mistakes because they are stupid and these mistakes snowball into unintended consequences traders eat called feedback loops.
I just think behavioral finance explains it in a more elegant and sophisticated way. Also easier to understand.
this goes to show that even a mental midget monkey can make 30% a year if you give him enough handouts and inside info.
Soros is one of the greatest traitors to mankind. he learned well from the Nazis as he helped them round up his neighbors
Agreed.
if there is such a thing as an anti-christ, he is that very thing
I am not really sure what the point of this essay is and I am not an economist but even I know that although Hayek taught at chicago he as a rationalist not an empiricist like Friedman. To say that the Austrian and Chicago schools are the same is like to say an audi and benz are the same.
Anyway, all economic schools are psuedo science
hayek recognized that it was all pseudo science. That was why it was best left alone.
Read his 1974 nobel prize acceptance speech. The Pretense of Knowledge.
Thanks for the link to his speech. I found myself remembering a conversation I had with the dean of my business school and the lecturer for the course in macro everyone had to take. Coming from a hard science background I questioned the validity of holding all variables constant in order to play with the interaction of only a few, because in the real world those other variables are confounding. I said that a neural network would be a much better predictor than regression analysis and that an r^2 of 0.3 did not explain very much. Obviously I was not his favorite student. But when I read Hayek’s speech I feel somewhat redeemed and happy to read what Hayek could express so much better than me but what I always believed all along.
I can't believe i wasted my time reading this, but now I understand the hogwash that he calls reflexivity.
Hayek never thought to "eliminate the uncertainty of reflexivity." Hayek perfectly understood that markets and their participants were inherently unquantifiable on a macro leve. He never thought that the markets were "perfect" merely that with the available information millions of individuals making their own decisions would best optimize the outcome.
Hayek was never a determinist. His view was that millions of individuals agents acting to optimize their own utilities created a more efficient and healthier economic system that could grow more robustly. He never thought these millions of interacting individuals agents influencing various complex systems was in any way determinate or predictable.
The above is why Hayek was so against central planning and communism. It was wasteful and inefficient to think that complex economic phenomena could be reduced to a few simple rules so that an enlightened group could command the economy to do what it wished.
Soros has it assbackwards. Keynes was the central planning determinist who felt that systems followed simplistic rules. Hayek was the opposite. However Soros did get one thing right. Keynes believed in central planning and Hayek didn't. Keynes was also an admirer of fascism.
Hayek was the person who believed in irreducible complexity. There were too many interacting variables to ever be able to understand the system well enough to make it more efficient. Hence it was better left alone.
A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society. Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings.
And what do we see?
Gold is right.
You need to get back on those medications your doctor said you needed to take.
I'll let him answer you, but I think you read his post wrongly ... he was essentially agreeing with you (unless he confused himself in his expression!).
I read him to be saying: "Socialism is an alternative to any system [including capitalism] under which men can live as human beings". It is obvious---from the examples of USSR, Mao's China, North Korea [and now the USA and Europe]---that men cannot live for long as human beings under socialism ... because they eventually run out of other people's money!
Socialism works fine so long as your "tribe" is small. Once your "tribe" grows beyond a certain size, the limits of Socialism begin to manifest themselves. In Engineering terms: Socialism does NOT scale upwards very well, if at all.
Quit picking on George! Buy him a plutonium tipped ball point pen!!
Soros Open Source signals SOS "save our society"
Dave signals back SOS "save our souls"
http://tradewithdave.com/?p=6164
Dave Harrison
www.tradewithdave.com
Hopeful words for society to work together depsite differing views. In lue of what one hopes, the problem is aptly put in that you have selfish actors in a system with their own agenda's... or as you so aptly put it Mr. Soros, the Left and the Right just an't talking to each other.
Not that they run up the debt, (fraudulent debt remember), now they want to turn austrian....to pay it off (the fraudulent debt).
Hello...who didn't see this coming?
Indebt us with fraud until we can be filled with fraud no more.
Then pull the string, and pay off the fraud through austerity.
TPTB, The Queen, etc couldn't of said it any better.
Remember, austrians are the pied-piper of the fraudulent debt based monetary system...whether they know it or not...that IS the reason of the 'austrian' school's existance. What you didn't know? To pay off already created debt.
In our case, it's wholly fraudulent, and it's why the austerity idiots are just that, fucking dogshit for brains.
You don't cut needed services/projects for fradulent debt, in an anti-american monetary system (a fraudulent debt based monetary system). Fucking corporate tea party and Ron/Rand Paul. That's why these guys are just as much fucking idiots as Obama.
You don't need to print until hyperinflation for fraudulent debt. Stupid fucking Obama, Bush, and Keynesians.
No you identify that the debt is crap, was foisted on us fraudulently, and you CANCEL it. GONE. Why print or cut if your balance is 0? Well it wouldn't be 0, but it wouldn't be far off if you compare it with 14 trillion total number we see now.
American Credit System (Hamiltonian)
Fuck the austrians and keynesians monetary fucktards. Monetarism is the fucking problem, and both austrians and keynesians are fucking clueless.
Cancel the fraud
Laugh at the frauds (Obama, tea party, republicans...all are frauds)
Glass-Steagall