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Guest Post: The Ridiculousness Of Economics?

Tyler Durden's picture




 

Submitted by Per Bylund via The Circle Bastiat Mises Economic blog,

People have a strange habit of ridiculing economics for its assumptions and [benchmark] models of optimality. While modern mathematical economics (i.e., professional mathturbation) admittedly rely on sometimes outrageous assumptions that make most of the resulting predictions irrelevant, there is nothing ridiculous or unscientific about economic reasoning. In order to study the social world we need to consider and analyze what’s observed empirically from the point of view of the theory-derived counterfactual. Economic science necessarily begins with theory.

As Mises noted, in the social world there are no constant relations. Consequently, inductive number crunching based on (the seemingly irrefutable phenomenon) data cannot tell us much about the world. So we must rely on what we logically find to be necessarily true, and from it derive specific truths that help us understand observed phenomena in the real world. We thus create counterfactuals that help us assess and perceive what is actually going on, rather than blindly observe.

Interestingly, while economic reasoning is laughed at and ridiculed, people tend to place great faith in applied fields such as medicine as though it were a real science. So perhaps if economics were more like medicine, it would earn the respect as a science (side-effects aside)?

While simplified, what is considered “normal” in medicine are simple averages or mode values arrived at by inductive (though sometimes voluminous) data sifting. Recommendations are hence based on what is rather than what should be (should, by the way, is considered unscientific). Granted, present average values may eventually be balanced (perhaps even corrected) by what has been learned about the functions of specific organs and the body as a whole, and about the impact of disease, malfunctions, etc. Yet these pieces of knowledge are also ultimately arrived at inductively, which means medicine suffers from a fundamental inability to identify e.g. harmful imbalances throughout populations (such that are due to long-lasting suboptimal cultural or eating habits, for instance).

The present revolution in how we view carbohydrates and fats is a case in point: medicine is of course able to measure the improved health values due to e.g. a “primal” diet (as one example), but is utterly unable to envision this result and, even less, make such predictions before the empirical observation has already been made. Instead, and based on the “normal” (average/mode) values of the population, we’ve been recommended to indulge in harmful sugars and grains and stay away from healthy fats. This is the problem of relying on induction, and while it might work well in the natural sciences, and is less reliable but likely more beneficial than not in applied natural science (such as medicine), it is impossible in the social sciences.

Imagine an economics relying on this type of approach. This field would have recognized poverty, starvation, and perhaps even slavery as the average state or mode of people in society, both at the inception of economic analysis and throughout history. We would then call this miserable state “equilibrium,” and base our explanations and policy recommendations on this empirically sound identification. Strange, uncommon, and “disequilibrating” phenomena such as prosperity, health, etc. would be statistical anomalies that could ultimately cause disruption of the established equilibrium; we might even choose to exclude them from our statistical analyses.

Economic models would show how societies successfully maximizing such misery (the mode, remember?) have little entrepreneurship, no property rights, and a despotic monarch (among other things). We would therefore conclude that a despot appears necessary to ensure the optimal state of misery, since the lack of a misery-enabling monarch would set radical processes of entrepreneurship, decentralization, and order in motion. These processes could undermine the state of misery and create pockets of prosperity, and perhaps – if no countermeasure is taken – overtake society and subject everyone to this disease.

Our policy recommendations would then be for a society to grant a single monarch absolute power, with the task and duty to stifle entrepreneurship and undermine property rights.

Had economics relied on similar methods as those employed in medicine, it would have been a worthless and dismal science indeed. Fortunately, economics is nothing of the kind. Instead, based on the undeniable truth that people want what they value and that getting more of it therefore makes them better off, we can construct theoretical counterfactuals to serve as “optimal” benchmarks when analyzing society. This is why economists can say that “yes, we are well of – but could be better off if…” This is also why economists can identify where and how suggested policies can or will go wrong. We can identify that waste, destruction, and suboptimalities will ensue, but not exactly when or exactly how much.

This is hardly ridiculous.

 

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Tue, 01/28/2014 - 14:53 | 4376184 goldmemento
goldmemento's picture

Sorry to repost this question:

Can you guys please help me with my math?

If the US wanted to return to a Gold Standard, it would need to reset the price of gold to cover it's debt, correct?

$17,000,000,000,000 debt

8,000,000 kg of gold in reserve (alleged)

= $2,125,000 dollars per Kg

= $67,000 per troy ounce

This can't be right. What have I done wrong?

Tue, 01/28/2014 - 14:58 | 4376225 dirtscratcher
dirtscratcher's picture

 

Q:  "........What have I done wrong?"------goldmemento

A: Considered that the US would ever want to return to a gold standard.

Tue, 01/28/2014 - 15:09 | 4376276 negative rates
negative rates's picture

We call it wreconomics, part 2.

Tue, 01/28/2014 - 15:54 | 4376488 zaphod
zaphod's picture

It's called what the market will look like after the dollar finally breaks.

There are 3 things wrong with the original calculation:

1) The amount of debt, by the time the dollar breaks we will have a few more digits (at least) behind the total debt number. 

2) The amount of gold, the FED does not have that much.

3) Off balance sheet debts, you have to add in all the paper promises and all the institutions that will be bailed out, that all adds to the debt number. 

Basically goldmemento's calculation is the conservative estimate, mine is there will be no gold price because no one will trade physical for paper notes. 

Tue, 01/28/2014 - 16:38 | 4376638 Quisat_Sadarak
Quisat_Sadarak's picture

Step 1 - repudiate the odious debt, wipe the slate clean.  Default if you will.

Step 2 - institute a gold standard.

 

If you do not reject the odious debt foisted on us by the banking masters, then when you return to the gold standard you lock in fake FRNs debt payable in real gold.  Don't make that mistake!!!!!

 

 

 

Tue, 01/28/2014 - 14:58 | 4376228 El Vaquero
El Vaquero's picture

 

This can't be right. What have I done wrong?

Ignored the "innovations" that modern bankers will bring to bear and sinned by not allowing for merely a fraction of the $17,000,000,000,000 to be held at the banks.

Tue, 01/28/2014 - 15:00 | 4376235 James_Cole
James_Cole's picture

How you think the world works:

https://cdn1.iconfinder.com/data/icons/ios7-active-2/512/Payment.png

How the world actually works:

http://images.tutorvista.com/cms/images/38/atomic-bomb.gif

'tis where you went wrong. 

Tue, 01/28/2014 - 15:02 | 4376241 Skateboarder
Skateboarder's picture

You forgot to rehypothecate.

Tue, 01/28/2014 - 15:04 | 4376256 notadouche
notadouche's picture

Not to be rude but what you have done wrong is waste your time trying to figure out an outcome that will never be. The US would never return to the gold standard as it would not serve the political class.  Politicians don't generally willingly apply handcuffs to themselves and the gold standard would prove to be the ultimate pair of handcuffs.  Sorry.  The US, Fed and the establishment elite haven't exactly hidden their views on gold.  

Tue, 01/28/2014 - 19:50 | 4377421 goldmemento
goldmemento's picture

Good points but the US may not have any choice when China and the East all return to the gold standard and Saudi Arabia starts selling their Oil for gold.

I think the elite will all then open their dusty old vaults full of that worthless gold they've been holding on to or cheaply buying over the last decade.

Tue, 01/28/2014 - 22:31 | 4378081 MeelionDollerBogus
MeelionDollerBogus's picture

It's not a choice: other nations will not accept USD for currency so the US will choose GOLD or RUBLES (or yuan, etc.) as their own currency.
They'll be forced into gold.

Tue, 01/28/2014 - 15:06 | 4376275 Hacked Economy
Hacked Economy's picture

Much of the current debt is unserviceable.  Before a realistic gold standard-based value (of gold, per oz) can be determined, the toxic debts would need to be disregarded and cleared out of the system (perhaps defaults would take care of some of this?).  When the "stable" and serviceable debts remain on the ledger, then you can re-calculate.

Oh wait...the toxic debts will not be removed by TPTB?  Nevermind, then.  Place whatever value you want on gold and cross your fingers.

Tue, 01/28/2014 - 15:44 | 4376285 negative rates
negative rates's picture

Lost track of the possession of gold perhaps? So sorry charlie.

Tue, 01/28/2014 - 15:10 | 4376288 Bioscale
Bioscale's picture

Once gold comes into political discussions about global monetary system, USA will be past the big thing that everyone has been talking about for years. As US gov has no gold, it will have very little to say about its price.

Tue, 01/28/2014 - 15:16 | 4376328 ebworthen
ebworthen's picture

You have done nothing wrong.

When the reset comes and the World searches for tangible value $67K/troy ounce is about right.

Tue, 01/28/2014 - 22:05 | 4377940 centipede
centipede's picture

Actually that is not right. His theory has a problem. You both are forgetting that the fractional reserve system would stay even within the gold standard and gold would replace only the monetary base M0 not the higher debt multipliers. So you should compare only M0 with the amount of available gold and that would yield a more realistic price 4 or 5 times lower.

Tue, 01/28/2014 - 15:32 | 4376400 withglee
withglee's picture

When you back a Medium of Exchange (MOE) with gold you are saying that the paper that circulates is actually redeemable in gold. That means not only the paper in circulation but the accounting records representing people's savings (including pensions) and people's commitment to trades. All those savings and in-process trades must also be redeemable in gold. And for a world reserve currency like the dollar, that means the whole world's savings and in-process trades. Thus your number of dollars per troy ounce doesn't come from the $17T US government debt. It comes from the entire world's GDP and savings. You're off by a few orders of magnitude. Try $6,000,000 per ounce. But then remember, right now people are willing to grind computers or dig in the dirt for gold at the rate of a little less than an ounce invested for each ounce created (or reclaimed). Right now, that's less than $2,000. As soon as you say that ounce they create is worth $6M, invest in shovels and grinders. Everyone will be in the mining and grinding business.

Tue, 01/28/2014 - 17:54 | 4376967 Hedgetard55
Hedgetard55's picture

Yes, and that $6 million will buy you a nice, not great suit, or a couple tanks of gas.

Tue, 01/28/2014 - 18:39 | 4377131 withglee
withglee's picture

An ounce of gold today is worth about 400 gallons of gas. If they claim an ounce is worth $6,000,000, a gallon of gas (1/400th of an ounce of gold) would cost $15,000. Pretty simple math.

Tue, 01/28/2014 - 16:50 | 4376737 Spankrupt
Spankrupt's picture

My Public Library Late fee college education ($150 and counting) tells me I could take the hitorically conservative route and use a 40% currency backing. But, fractional lending distorts this mathturbation. The U.S. debt figure might be the wrong nominal #. m1 + m2 + m3 (m3 no longer is tracked by Sam). Given bank reserve requirements are roughly 10%, the reset could be m3 X 1.9 / 8m kg AU79.

Tue, 01/28/2014 - 18:29 | 4377102 all-priced-in
all-priced-in's picture

What makes you think you can just "reset" the price of gold?

 

 

 

 

 

Tue, 01/28/2014 - 18:44 | 4377157 lordylord
lordylord's picture

FDR did it after he stole it all.

Tue, 01/28/2014 - 22:26 | 4378050 MeelionDollerBogus
MeelionDollerBogus's picture

That's what gold does, pretty much that's the primary monetary purpose of gold. Not just to be money but to be reset-restart money in disaster.

Tue, 01/28/2014 - 19:39 | 4377366 Vint Slugs
Vint Slugs's picture

@goldmemento,

What have I done wrong?

I haven't recalculated since 2012 but hopefully the below will answer your question:

The methodology below is copyrighted.  VS (c)2012

 

Reisman – Capitalism, pp 958 - 959

 

Determining the purchasing power of  one ounce of gold if changing to a 100% gold reserve standard today (January 2012)

 

Calculate total currency and checking deposits (M1):  ~2.2 trn

Calculate total US gold reserves:  260M oz

Assume 1 oz gold = 15 oz silver for part B

 

A.  If use all gold money and no silver =>

 

            M1 ÷ 260M oz = 2200000000000 ÷ 260000000 = $8461/oz

                                                2.2x10[11]      ÷    2.6x10[7] 

 

B.  If use 2/3 gold and 1/3 silver =>

 

1)      .66(M1) ÷ 260M oz = 1450000000000 ÷ 260000000 = $5576/oz

2)      Gold/silver ratio = 15.  Therefore $5576 ÷ 15 = $371/oz silver

 

 

 

 

 

NOTE 1:  Consider Reisman’s comments about silver (his example B uses $3000 as the gold price):

 

On these assumptions, a silver coin the size of the pre–1965 dime, which

contained about .07 ounces of silver, would have a buying power of about $14, while the larger silver coins had proportionately greater buying power.

 

Therefore at 2012 levels, .07ounces of silver would have a buying power of $25.27.  That is sufficiently high to be prohibitive in small transactions.

 

HOWEVER:  If one assumes digital money for small denomination currency instead of silver, then there is no need for a dual metallic standard.  Silver would be omitted and it would become a non-monetary commodity whose value would be determined by supply/demand forces in the marketplace.

 

NOTE 2:  In B above, Reisman is fixing the price of silver (one-fifteenth that of gold).  That is fraud.  It is also prohibiting the market from determining at what silver should be priced.

VS (c)2012


 

 

Tue, 01/28/2014 - 19:46 | 4377405 goldmemento
goldmemento's picture

But at the prices you calculate... the government would still be way way in default, not having enough gold holdings to cover their debt.

I don't get this calculation logic.

Tue, 01/28/2014 - 22:25 | 4378048 MeelionDollerBogus
MeelionDollerBogus's picture

Government will default no matter what happens with gold. If anything a collapse of government(s) may influence WHEN price changes, perhaps a multiplier factor of how much, but that's about it.

Tue, 01/28/2014 - 22:25 | 4378053 MeelionDollerBogus
MeelionDollerBogus's picture

Not correct.
Debt is not the only thing being traded.
Gold's unit of trade by weight would need to be a lesser weight (troy oz) to match the units moving of everything that isn't gold that someone would give for gold.
Fiat price may or may not exist at all but if it did the fiat price would then largely reflect total currency being used as trade units, not debts since we don't all trade debts like bonds for food at a store or gasoline. Credit issued privately as loans or for credit card balances also count as currency.

Tue, 01/28/2014 - 14:57 | 4376215 Ignatius
Ignatius's picture

"What have I done wrong?"

Dreaming that it will ever happen.

Tue, 01/28/2014 - 14:57 | 4376219 TeamDepends
TeamDepends's picture

Is that LeGarde making a frenchie funny face?

Tue, 01/28/2014 - 15:00 | 4376237 Spungo
Spungo's picture

I think you would only use the M2 supply to set the price of gold. It would be 10.5 trillion instead of 17 trillion.

Tue, 01/28/2014 - 15:07 | 4376270 Bastiat
Bastiat's picture

"outrageous assumptions that make most of the resulting predictions irrelevant,"

See Long Term Capital Management, for instance. 

 

Tue, 01/28/2014 - 16:53 | 4376735 Rakshas
Rakshas's picture

Hmmmmm I gave it a go, but I have resigned myself to never comprehending economics in any meaninful way...... maybe it's the math, maybe its the abstract assumptions that appear from the ether I don't know but I suffer a real mental block when I try to get my head around some of the chaos theory  - for example if cocaine ladden C130 lands at Stewart AFB does a civil war erupt in Syria?  Those fucking butterfly wings in the amazon ............

 

 

Tue, 01/28/2014 - 22:26 | 4378057 MeelionDollerBogus
MeelionDollerBogus's picture

Economics is easy to comprehend.
#1 someone must buy things
#2 someone must sell things
#3 someone must be middle-men, with warehouses and/or transport and definitely influence with buyers and/or sellers
#4 fraud. Theft, fraud & confusion from marketing. This is critical to economics. Without this there'd be no economics, there'd only be listings of what's where & for how much with really not many problems
#5 catastrophe. Could be war, could be giant fire storms or ice storms or earth quakes, they happen & people are drastically affected. This requires re-location and/or re-building which spurs a huge amount of economic activity, not all of it good but it is attempted regardless.
#6 emotions and/or stupid people and/or being overly stubborn, conservative or explorative/experimental with technologies. It happens, be ready for it.

Tue, 01/28/2014 - 15:09 | 4376284 crunchyfrog
crunchyfrog's picture

If you don't use induction, what is your feedback mechanism? 

Given that anarchocapitalism has never been tried, how do you demonstrate that Austrian Economics is not a castle in the air to match Marxism?

Hey Greenspan really believed in the self regulating efficient market. He has since caved in the face of actual experience. 

Tue, 01/28/2014 - 15:29 | 4376365 adr
adr's picture

They said deregulating utilities would cause prices to go down because there would be more competition. What they forgot to do was increase the competition in delivering utilities.

All they did was increase competition for contracts, which caused the price of those contracts to go through the roof. My gas is stored by Dominion, transferred by Dominion, and the lines are serviced by Dominion, but I can buy gas from hundreds of suppliers. The thing is that those suppliers don't store any gas, never take delivery of gas, or even have an office is most cases. They buy a contract for gas and sell a contract for gas. Since Dominion doesn't make the money on the gas they increased delivery charges, use charges, and base charges. The end result of deregulating the utility business was a three fold increase in the cost of natural gas service to my home.

Self regulating free markets haven't been tried. The Austrian model would allow other competing corporations to build and maintain gas lines that the consumer could choose from. There also wouldn't be generous subsidies and a bullshit "market" where speculators could get rich off aligning themselves with politicians.

Tue, 01/28/2014 - 16:05 | 4376534 sasebo
sasebo's picture

"we can construct theoretical counterfactuals to serve as “optimal” benchmarks when analyzing society."

Why does one need a feed back loop when the author clearly explains why inductive reasoning does not work in economics. You seemed to have skipped his comments on counterfactuals.

Tue, 01/28/2014 - 16:59 | 4376768 crunchyfrog
crunchyfrog's picture

No, I saw it, but I think he's reasoning from his conclusion.

I'm sticking by my "factual" of Alan Greenspan sincerely believing that massive ongoing fraud in the financial markets could not/would not happen, because people wouldn't put up with it. That's standard Libertarian theory. He has admitted since that it is wrong, as demonstrated in the 2008 blow up.

I see no way for an Austrian to actually test his theories. Fine go ahead with the spiffy deductions, but tell me how to test them. Strawmen do not count.

Tue, 01/28/2014 - 23:59 | 4377547 sasebo
sasebo's picture

The problem is not that the "people" wouldn't put up with it but that the "state" is putting up with it. Test theories? How many keynesians predicted the subprime crash? How many austrians? 

"To want to test the pure theory of economics by experience in its full reality is a process analogous to that of the mathematician who wants to correct the principles of geometry by measuring real objects." Carl Menger 1889. 

Wed, 01/29/2014 - 05:44 | 4378962 crunchyfrog
crunchyfrog's picture

Quod erat demonstrandum.

There are actually three perfectly plausible versions of geometry: Euclidean, Lobachevkyan, and Reimanian. They are all equivalent for normal cases, as are Newtonian and Einsteinian physics --orbit of Mercury, anyone?

What you have is a bunch of well off clowns coming up with reasons why they deserve to be well off, and then explaining why nobody gets to say "WTF?". Garbage.

Tue, 01/28/2014 - 22:27 | 4378060 MeelionDollerBogus
MeelionDollerBogus's picture

Induction is unrelated to feedback.
Induction requires initial conditions & recursive steps. None of that is feedback.
Feedback is what you put into neural networks, not induction.
Anarchocapitalism has existed every time tribes encountered each other.
Our current world is one that executes all small tribes which greatly hinders this activity.

Tue, 01/28/2014 - 15:12 | 4376301 NotApplicable
NotApplicable's picture

I'd say the machinations of "the government" have done well to "ensure the optimal state of misery."

Tue, 01/28/2014 - 15:15 | 4376315 farmboy
farmboy's picture

Tell that to the Ph d Physics that makes 500.000 $ a year in a financial firm or 50.000 $ in a science lab.

Tue, 01/28/2014 - 15:16 | 4376319 ebworthen
ebworthen's picture

Economics is the new Alchemy.

Tue, 01/28/2014 - 15:19 | 4376337 adr
adr's picture

Economics is the science of con men trying to figure out how to make money without earning it.

Tue, 01/28/2014 - 15:19 | 4376340 Frank N. Beans
Frank N. Beans's picture

Is that a Smiley Miley ?

 

Tue, 01/28/2014 - 15:22 | 4376349 highwaytoserfdom
highwaytoserfdom's picture

mathturbation  exactly the right term..  "on the one hand and on the other"   ambidextrous jerk offs.  

Tue, 01/28/2014 - 15:31 | 4376406 deerhunter
deerhunter's picture

I don't always think banking but when I do I think fractional reserve!!!!!!!!!  Hang em high.   If people truly understood that the only real money trading hands in a bank is the stuff coming in,  they would quit paying their mortgages tomorrow.  OK<  maybe that was being a bit hopeful,  I'm done for now..............

Tue, 01/28/2014 - 15:37 | 4376433 MeBizarro
MeBizarro's picture

Written by a person who knows nothing apparently about methdological design of studies, what types of studies are available, and their various strengths/weaknesses.

If this guy thinks medicine and differential diagnosis is anything like an observed law/constant in physics, he doesn't know much about that either. 

Tue, 01/28/2014 - 18:04 | 4376547 GooseShtepping Moron
GooseShtepping Moron's picture

I agree. The OP is a word salad without philosophical underpinnings. Induction does not equal nominalism, as the author would have it; rather, sense-data allows for the intellectual apperception of the substantial form. The truth-attaining rational faculty of prudence (phronesis) teaches us what is good for human beings, not theoria.

Tue, 01/28/2014 - 15:41 | 4376445 Quinvarius
Quinvarius's picture

I am pretty sure economics all boils down to marketing on one level or another.  Some people will buy snake oil from the right person with the right pitch.  Some people will never trade their gold for snake oil.  Human choice is malleable depending the strength of the mind and will.

Tue, 01/28/2014 - 16:07 | 4376546 RaceToTheBottom
RaceToTheBottom's picture

OK, if Economics wants to compare itself to Medical industry lets do so:

1)  Lets say the average heart beats 20 times a minute (probably while reading my post)

2)  Lets say it takes a second to complete a beat.  I may be 100% off here but bear with me.

3)  The rest of the time the heart is doing nothing.

Now treat Medical like Economics.

1)  All that time doing nothing would result in the Heart being loaned out to other people who need a beat that second.  Therefore Economics is telling the medical world that One heart should be shared over 3 or so people. 

This is exactly what Economics does when it says that the banks can share your deposit money over 60 to 100 other customers.

This becomes even larger when you consider what it does with Money and then Gold and then Money again.

Economics is as ludicrous as Heart sharing among people

Tue, 01/28/2014 - 16:19 | 4376600 hapless
hapless's picture

Economists assume that everyone either wants to or must take life up the ass.  Their assumption falls down when enough suppliers of capital take their chips elsewhere.

Tue, 01/28/2014 - 16:53 | 4376747 MedicalQuack
MedicalQuack's picture

You have to love Paul Wilmott #1 Quant in the world "economists don't have laws, they think they do"...and besides they are using software tools and analytic created by software developers and quants anyway so go to the source of who created their tools:)  Wilmott said they just a lot of guessing:)  Quants of Wall Street is where he does his little chat...very good if you have never watched it...

http://ducknetweb.blogspot.hk/2012/09/quants-alchemists-of-wall-street-v...

I put a few more such videos over at the Algo Duping page and I'll tell you when you watch "The Promise" and "Inside Job' you cant help but appreciate the salemanship of Bob Rubin who drug Greenspan and Summers around by the nose...in retrospect in knowing what we do now the videos even have more meanting as we got smarter.  Rubin was the math guy and saleman for sure.

http://www.ducknet.net/attack-of-the-killer-algorithms/

Wilmott is so entertaining to listen to as well, he gets it down to levels to where the average consumer can get "something" out of it. 

Tue, 01/28/2014 - 17:29 | 4376880 Johnny Cocknballs
Johnny Cocknballs's picture

I stopped reading at the insanely idiotic suggestion that economic theorizing is more of a "science" than medicine.

And what do you think epidemiologists do, you ignorant twat.

And physicians and neuroscientists and physicists don't go around whining that they deserved to be treated as real scientists.

Those who do, aren't.

Tue, 01/28/2014 - 18:32 | 4377092 daemon
daemon's picture

" Instead, based on the undeniable truth that people want what they value and that getting more of it therefore makes them better off ... "

And what do people value ?

Very often, but not always of course (after all, we have naturally physiological appetites), what they value is ...  what their "neighbours" value .

And that's when you realize that, even without being clones, people tend to follow one another, very often without being able to appreciate and even choose it .

That's also when you realize that austrian economics as interesting as it is, may possibly lack some fundamental postulate .

Tue, 01/28/2014 - 22:06 | 4377944 MeelionDollerBogus
MeelionDollerBogus's picture

Maybe I've just been around strange people but I've never seen this & certainly never felt it.

Wed, 01/29/2014 - 06:22 | 4378960 daemon
daemon's picture

" Maybe I've just been around strange people but I've never seen this & certainly never felt it. "

 

Not even once or twice ?

That's interesting because, after all, advertising relies apparently often on the fact that we tend to desire what others seem to value.

Never heard or read  something like this :  " the grass is always greener on the other side of the fence."  ?

Never heard or read  something like that :  “ You shall not desire your neighbor's house; you shall not covet your neighbor's wife,or his male servant, or his female servant, or his ox, or his donkey, or anything that is your neighbor's.”  ?

And also, interestingly, it seems that, to some point at least, we are wired to act like this, thanks to what neurologists call mirror neurons .

Thu, 01/30/2014 - 01:02 | 4383226 MeelionDollerBogus
MeelionDollerBogus's picture

not even once.
Also I ignore almost all advertising. I make an exception for Google ads that precisely match my searches.
Doesn't mean I click on them but I am not annoyed by them.
I don't watch TV so I see no ads there.
I don't listen to radio so I hear no ads there.
I use adblock + noscript so I see no ads on almost any page I open.
Mozilla Thunderbird filters external pictures sent in email so no ads get through that way.
I see what other people buy & hear what they say they bought or want to buy but it seems more like a personal desire for an aspect of a thing. I never hear a person say they want a thing just because someone else has it.
I rarely see women doing this over purses or clothes either, probably because they want to appear unique to each other, not copycats.
"the grass is always greener on the other side of the fence"
I've heard it but I've never felt it. To me it's just a saying, not something which matches my life experience.
"You shall not desire your neighbor's house; you shall not covet your neighbor's wife,or his male servant, or his female servant, or his ox, or his donkey, or anything that is your neighbor's"
Never.
I'm going to guess it's biblical. I'm atheist, never have had a religion forced on me growing up & it has no relevance to my adult life so the only exposure I get is from quotes sent in blogs like that one.
Mirror neurons: too basic, it's not a macro-behaviour so much as individual constructed actions as simple as how fast you might breathe or changing your heart rate, or being able to make your left-hand mirror-move like your right-hand even if you're right-handed.

Thu, 01/30/2014 - 16:30 | 4383448 daemon
daemon's picture

" Mirror neurons: too basic, ... "

As of today, it seems that the real capabilities/implications of the mirror neurons are subject to much debate .

 

" I'm atheist, never have had a religion forced on me growing up ..."

I, too, can say that.

But, I don't need to be a believer, to understand that the guys who wrote the 10 commandments were probably as much sociologists/anthropologists/psychologists/lawyers/ ...  (don't know what words to choose here) as they were theologists.

 

" I never hear a person say they want a thing just because someone else has it. "

Well, I almost never hear a grown person say they want a thing just because someone else has it. The children, though, easily tend to say it openly, ...      until life in society has taught them to avoid expressing what they really feel .

 

" I rarely see women doing this over purses or clothes either, probably because they want to appear unique to each other, not copycats. "

Yes, to some point. Though, I would tend to add that they often want to appear unique .... but without appearing out of fashion.

Very interestingly, it seems that an awful lot of people want to appear unique to each other ... maybe to belong to that group of "classy" people that are said to be "different" (who are perceived as "fashion initiators" rather than fashion followers, maybe) .

Fri, 01/31/2014 - 07:01 | 4387141 MeelionDollerBogus
MeelionDollerBogus's picture

about children: good point. I don't have those either, I never even thought of that.
I guess that's what I get for just living an adult life with adult situations.

about the rest: dunno. Perhaps rather than being specific to copy fashions by exact appearance it's enough to go with a designer, a brand, a price-range, and then the differences offer the illusion of being "unique" when the truth is all she cared about was the designer or selling price of the skirt, yoga pants, purse, etc. Given the #1 yoga pants brand right now that seems hardly unique. Given the desire men have for how women look IN them, though, I'm not sure if copying other women or merely brand-seeking is the cause because no matter what women say annoys them, they want us looking at their asses.

 

Fri, 01/31/2014 - 07:54 | 4387196 daemon
daemon's picture

OK.

Thanks for the answer.

Sat, 02/01/2014 - 21:16 | 4392367 MeelionDollerBogus
MeelionDollerBogus's picture

Thank you for yours.
Aren't we all supposed to fight or something here at Fight Club?
hmmm
abortions.
No, wait, too simple.
Occupy Abortions to Prevent Global Warming.
There.

Tue, 01/28/2014 - 22:01 | 4377864 MeelionDollerBogus
MeelionDollerBogus's picture

This article is absurd.

Medicine uses real science because there are hypotheses which are tested, experiments, results, peer review.
Economics has none of this.
Broad macro-economics across history has at least data to prove that activity did happen, the biggest mistakes in economics being to DENY what actually happens.

But wait, it gets better.
Induction is NOT how science or economics proceeds, it's iterative, grinding through situations, data, testing, comparing & posing new questions until no more are needed for a given person/situation.
Logic, for those of us who truly understand it & math, is NOT SEPARATE FROM MATH. Logic has equations & they are the same as those used for other numeric systems.

"Fortunately, economics is nothing of the kind. Instead, based on the undeniable truth that people want what they value and that getting more of it therefore makes them better off"
This part is the worst & should be followed by /sarc.
People have NO IDEA what they value long-term & there's 2 SOLID good reasons for that.
Reason #1: people need to adapt to a changing world to survive, and given survival, to be happy. That means no economic model can predict the VALUE of any given person's wants or needs without predicting the entire future of every atom on Earth.
Reason #2: people are both picky & stupid. Even with an accurate model predicting every atom of everything, even human bodies but outside the brain, you couldn't be sure when a person would decide to want something BAD for them & to do so in a manner that pushes the economy in an entirely opposite direction some of the time than what is GOOD to value.
Who cares if smoking gives you cancer? There's a demand for it & that's something this economic premise put forth has NO way to handle.
It's expensive, it's bad for you, it's a waste of land resources to be used for food or anything else other than giving you cancer, and yet a market for smoking continues, new smokers & those who continue to do so. It's not just about addiction.
Smoking is a comfort, a stress reliever, and some tobacco actually smells really good, be it pipe tobacco or cigars.
This absurd proposition of what economics actually is or tries to accomplish is so filled with Fail(tm) it couldn't begin to tell you how many people want to eat food that kills them, smoke, pay giant amounts of money to go sky-diving & potentially be killed, etc.

I would start right off by telling this author to look up properly what is INDUCTION not DEDUCTION, not ITERATION, not exploration.
INDUCTION requires RECURSION in logic, in math, and does NOT apply to medicine, to natural sciences, NOR TO ECONOMICS.
Induction applies to pure math, to computer science, to solving or partially solving chaotic problems, and I mean "chaos" as in how MATH refers to chaos.

Wed, 01/29/2014 - 08:32 | 4379143 esum
esum's picture

THE DOLLA IS BACKED BY THE DRONE..... got a problem with that

The ussa has already "defaulted" "repudiated" abandoned the requirement to maintain a sound currency... and the world knows it .. today's dollar has $0.03 worth of purchasing power as compared to a 1913 dollar... so who is shitting who..

Its not inflation or government that has improved man's lot... it's capitalism, science and technology. KNOWLEDGE  And this positive result is despite all the obstacles put in place by politicians and the social engineers... who have failed miserably in their goal to defeat poverty. Poverty is a mental condition, not an economic condition. You have to understand the cause before you administer the cure.

far as the dolla, when the pols quit fucking around and lower the tax rates overall to a resonable level, capital and jobs will return to the ussa and it can become the USA again.... flush the political toilet and put the libtards in the septic tank.. courtesy flush...

Wed, 01/29/2014 - 13:15 | 4380268 Demdere
Demdere's picture

Completely ridiculous thinking.

Economics deals with an open, evolving, very large and very complex system.  We have exactly one example of the functioning economy system, everything else is historical data.  In fact, economic's data is a subset of historical data, it only allows correlations between historical events.

Medicine is based on all of science, which produces cause-and-effect relationships.  Medicine has 100s of millions of medical records on 7B examples of the open, evolving very complex system that is human physiology to tease out possible relationships which can then be tested with animal models.

In fact, when it comes to producing hypotheses, economics is far inferior to economics because history has so many different sources and kinds of information, including sciences such as anthropology.  Economists should read David Hackett Fisher's "Historian's Fallacies" for pointers on how to interpret their historical data.

In any complex system, there are many causes for each effect and many measurements possible in many different dimensions.  In large complex systems, there is potentially a large set of values for each measurement.  In open complex systems,
neither new causes nor new effects may be obvious.  In evolving complex systems, the causes of effects and relative weightings of causes will change with time due to feedback.

There are therefore an effectively infinite number of correlations to be had from economic data, and very little information from outside of economics as to what is fundamental and can be used to interpret those correlations.  The uses of prices, for example, is a hypothesis about what correlations is important.  Of course, prices are a reflection of information flow and information processing and have a complex relationship to the rest of human behavior, so there are reasons to think prices aren't particularly fundamental.

Economics is without mooring to other areas of study, it is an isolated set of interpretations of historical data.  Of course it can't make predictions, it isn't an experimental science nor based on one.  As for being used to interpret event, it is on a par with a witch doctor's understanding.   Thus the many completely opposite recommendations for economic policy from reputable economists, all derived from their profound understandings of economics.

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