[From Rick Marken (2009.08.31.1240)]
On Mon, Aug 31, 2009 at 11:28 AM, Martin Lewitt mlewitt@comcast.net wrote:
Rick Marken
. Could you give me just a quick review of how you got to PCT when you get back. Thanks!
i reviewed a presentation by Ted Cloak applying PCT to the transmission of memes, if I recall correctly.
Thanks.
Best
Rick
–
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com
[From Bill Powers (2009./08.31.1734 MDT)]
At 05:45 PM 8/31/2009 +0000, Martin Lewitt wrote:
> From: "Bill Powers" <powers_w@FRONTIER.NET>
> Sent: Saturday, August 29, 2009 9:00:31 AM GMT -07:00 US/Canada Mountain> Homo Economicus is different under PCT than under most economists' theories. How do the human control systems involved show up in the model? Should that not make a difference?
The original microeconomic models assumed that each economic decision maker was acting in his own self interest to maximize his subjective values. As they came to explicitly deal with the fact that humans may not always be rational, or perform the maximization calculations properly they found it didn't make much difference in their models, since they also didn't have knowledge of their subjective values, but could only infer them from the exchanges and other decisions they made. What is it about PCT that would mean that the same microeconomic models would not also be robust to whatever difference PCT would make?
You tell me. Does PCT say that human beings maximize anything? Do economic theories generally include the concept of "enough" of some good?
Best,
Bill P.
[Martin Taylor 2009.08.31.22:00]
[From Bill Powers (2009./08.31.1734 MDT)]
> From: "Bill Powers" <powers_w@FRONTIER.NET>
> Sent: Saturday, August 29, 2009 9:00:31 AM GMT -07:00 US/Canada Mountain> Homo Economicus is different under PCT than under most economists' theories. How do the human control systems involved show up in the model? Should that not make a difference?
The original microeconomic models assumed that each economic decision maker was acting in his own self interest to maximize his subjective values. As they came to explicitly deal with the fact that humans may not always be rational, or perform the maximization calculations properly they found it didn't make much difference in their models, since they also didn't have knowledge of their subjective values, but could only infer them from the exchanges and other decisions they made. What is it about PCT that would mean that the same microeconomic models would not also be robust to whatever difference PCT would make?
You tell me. Does PCT say that human beings maximize anything? Do economic theories generally include the concept of "enough" of some good?
I know this isn't what you are getting at, but wouldn't it be fair to say that minimizing the error in a controlled variable, bringing its quantity closer to its reference quantity, is maximizing its subjective value? One could say that PCT is all about maximizing subjective value. As for whether economic theories generally include the concept of "enough" of some good, that's a different kettle of fish, and one I won't attempt to fry.
Martin
At 05:45 PM 8/31/2009 +0000, Martin Lewitt wrote:
[From Rick Marken (2009.08.31.2020)]
Martin Taylor (2009.08.31.22:00) –
I know this isn’t what you are getting at, but wouldn’t it be fair to say that minimizing the error in a controlled variable, bringing its quantity closer to its reference quantity, is maximizing its subjective value? One could say that PCT is all about maximizing subjective value.
That really makes no sense to me; it seems to completely miss the idea of what control is about: controlled variables. Control is not about maximizing subjective value (whatever that is); it’s about controlling perceptual variables.
As for whether economic theories generally include the concept of “enough” of some good, that’s a different kettle of fish, and one I won’t attempt to fry.
They don’t. When you maximize you never get enough; when you control “enough” is defined by the setting of the reference signal.
But let’s not get too far off the track on my thread here. I’m not interested in trying to salvage economic theories or psychological theories. Please start your own thread for that (new subject line). What I want to find out from Martin Lewitt (he volunteered) is what he wants, in term of the kind of society he wants to live in. He’s already volunteered that he wants universal heathcare but since that would hurt other countries he doesn’t. So I’m going with the idea that he doesn’t actually want universal healthcare in the US. I think he also wants to preserve his autonomy; so I’m waiting to find out what he thinks autonomy is. Is it something that only governments can take away, for example?
Best
Rick
–
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com
]
You tell me. Does PCT say that human beings maximize anything?
The maximizing assumption isn’t explicit in the economic models. The assumption is that the parties to a voluntary exchange, make the exchange because they each prefer the state that they think will result after the exchange to the state they were currently in, or to the state that would result from other possible exchanges available to them. Lower information and transaction costs allow more efficient markets.
Do economic theories generally include the concept of “enough” of some good?
Yes, I wish I had my Alchien and Allen available, but I think it was called something like “decreasing marginal utility”, e.g., the subsequent apples may not be as much value to you as the first few were. Individual producers and consumers can be represented by their own curves.
– Martin
----- Original Message -----
From: “Bill Powers” powers_w@FRONTIER.NET
Sent: Monday, August 31, 2009 5:35:53 PM GMT -07:00 US/Canada Mountain
[Martin Taylor 2009.09.01.00.14]
[From Rick Marken (2009.08.31.2020)]
Martin
Taylor (2009.08.31.22:00) –
I know this isn’t what you are getting at, but wouldn’t it be fair to
say that minimizing the error in a controlled variable, bringing its
quantity closer to its reference quantity, is maximizing its subjective
value? One could say that PCT is all about maximizing subjective value.That really makes no sense to me; it seems to completely miss the idea
of what control is about: controlled variables. Control is not about
maximizing subjective value (whatever that is); it’s about controlling
perceptual variables.
I’m so sorry. Forgive my naivete. I had been for many years under the
impression that to control a perceptual variable was to minimize the
difference between its actual value and its reference value. Apparently
I must have been wrong, if it makes no sense to you.
Martin
[From Rick Marken (2009.08.31.0940)]
Martin Taylor (2009.09.01.00.14)–
I’m so sorry. Forgive my naivete. I had been for many years under the
impression that to control a perceptual variable was to minimize the
difference between its actual value and its reference value. Apparently
I must have been wrong, if it makes no sense to you.
Oh, Martin, your’re just being snippy because you’re probably waiting in one of those long lines for health care up there. Come on down here; there’s no lines at all because no one can afford it. Actually, there are lines here but those are just for the poor people who haven’t earned the right to get treatment anyway. It’s amazing how many deadbeat children there are down here.
Anyway, what didn’t make sense to me was referring to minimizing error as maximizing subjective experience.
Best
Rick
I've been resisting the temptation to reply to this and the "Got Data?"
thread, because like Shannon, I simply don't have the time right now.
But suffice it to say that Bill's idea of creating a model of the
economy populated by PCT-based agents is exactly what I hope to do for
my dissertation. How successful I will be remains an open question. But
Martin's post below raises an important issue that is also narrow enough
that I thought I could prepare a reply that was both quick and cogent.
On the one hand, Martin is right - maximizing subjective value can be
thought of as simply another way of saying we have things that are
important to us, we have purposes that are known only to us and that we
are constantly trying to achieve. Then trying to achieve them in the
face of environmental disturbances and constraints is eerily close to
maximizing subjective value subject to a budget constraint, which is the
heart of microeconomics, as long as you conceive of reference levels as
being set at values that are somehow optimal for the organism.
On the other hand (and now you can tell for sure I'm an economist),
economics treats these critically important values we are trying to
maximize as not only subjective but unexplainable. The values are
assumed to be given from outside the economic system. As economists, we
are not allowed to ask where they came from or what makes them change.
PCT, it seems to me, opens the values door to analysis. If values
define what we think is important, then they are the dual to purposes
since purposes essentially define the same thing. PCT identifies
purposes with reference signals - the things we are trying to come close
to. Some values may then indeed be given and fixed as economics wants
to assume, such as those associated with the reference signals linked to
intrinsic errors. But others are learned, both from experience and from
others, and form some of our higher-level reference signals. Which
reference signals/values we learn, how we learn them and what causes us
to change them are at least legitimate avenues of study under a
PCT-based approach, whereas they are not typically the concern of
economists. And yet it is these reference signals economics is all about
maximizing our proximity to. To me, this is an untenable myopia. Others
may disagree.
In some sense, the economy itself is simply a set of behaviors that we
undertake to control the amount of food in our bellies. Will a model
composed of PCT-based agents yield different results than traditional
economic models? Perhaps not. It is a hypothesis worth testing. But my
gut tells me it a significant difference is likely.
In part this is because I believe (but expect that Bill may disagree)
that PCT creates agents that are inherently social, because we learn
from others at least some reference signals and even which perceptual
signals are important to pay attention to. Standard economic models
treat individuals as isolated - assuming as the foundation of homo
economicus a Robinson Crusoe-like "state of nature" where, to quote
Hobbes, life is "nasty, brutish and short." But as we evolved from apes,
and lone apes don't appear to survive very long, we are much more likely
to be inherently social animals. There is much research in behavioral
economics that says people are at least as motivated by reciprocity and
fairness as profit and "utility." This is how Adam Smith modeled us, as
inherently Sympathetic to each other, in his Theory of Moral Sentiments,
a book he thought more important than Wealth of Nations as shown by the
fact that he worked on it both before and after WON's publication in
1776. It is this Sympathy that is the Invisible Hand that guides
markets to social optima, not simply free market competition on its own.
By allowing agents who use others for references, (especially, it seems,
the wealthy or powerful - something also identified by Adam Smith in
Theory of Moral Sentiments as well as others such as Thorstein Veblen in
his Theory of the Leisure Class) PCT has the potential of the modeling
of agents who act more like real humans.
At least, that's my hope.
Sorry for the length of the reply - it turned out not to be quick, and
probably not completely cogent either.
Frank
Frank Lenk
Director of Research Services
Mid-America Regional Council
600 Broadway, Suite 200
Kansas City, MO 64105
www.marc.org
816.474.4240
flenk@marc.org
816.701.8237
-----Original Message-----
From: Control Systems Group Network (CSGnet)
[mailto:CSGNET@LISTSERV.ILLINOIS.EDU] On Behalf Of Martin Taylor
Sent: Monday, August 31, 2009 9:07 PM
To: CSGNET@LISTSERV.ILLINOIS.EDU
Subject: Re: [CSGNET] Conservative Controlled Variables
[Martin Taylor 2009.08.31.22:00]
[From Bill Powers (2009./08.31.1734 MDT)]
At 05:45 PM 8/31/2009 +0000, Martin Lewitt wrote:
> From: "Bill Powers" <powers_w@FRONTIER.NET>
> Sent: Saturday, August 29, 2009 9:00:31 AM GMT -07:00 US/Canada
Mountain> Homo Economicus is different under PCT than under most economists'
theories. How do the human control systems involved show up in the
model? Should that not make a difference?The original microeconomic models assumed that each economic decision
maker was acting in his own self interest to maximize his subjective
values. As they came to explicitly deal with the fact that humans
may not always be rational, or perform the maximization calculations
properly they found it didn't make much difference in their models,
since they also didn't have knowledge of their subjective values, but
could only infer them from the exchanges and other decisions they
made. What is it about PCT that would mean that the same
microeconomic models would not also be robust to whatever difference
PCT would make?You tell me. Does PCT say that human beings maximize anything? Do
economic theories generally include the concept of "enough" of some
good?
I know this isn't what you are getting at, but wouldn't it be fair to
say that minimizing the error in a controlled variable, bringing its
quantity closer to its reference quantity, is maximizing its subjective
value? One could say that PCT is all about maximizing subjective value.
As for whether economic theories generally include the concept of
"enough" of some good, that's a different kettle of fish, and one I
won't attempt to fry.
Martin
From: “Richard Marken” rsmarken@GMAIL.COM
Sent: Friday, August 28, 2009 11:10:27 AM GMT -07:00 US/Canada Mountain
[From Rick Marken (2009.08.28.1010)]
I might be your huckleberry. I’ve been a teabagger a couple times and attended a townhall in opposition to the public or single payer options.
Hi Martin
Yes, you certainly qualify. When you reply (if you reply) I wonder if you could say a bit about who you are and when/why you became interested in PCT. And could you put a header on your posts (like mine above); it’s a CSG convention and it helps me, at least, see who’s doing the posting and when.
I’ve been distracted for awhile, so I’m not quite sure what this “MOL” is.
It’s a therapy techniques based on the hierarchical perceptual control theory model of behavior, with a dollop of consciousness and reorganization theory thrown in (well, maybe more than a dollop). What I wanted to do was to use it to find out what your references are for various social variables. The thing about MOL is that it is non judgemental; I’m not interested in evaluating your social references; I just want to try to figure out what they are. I see from glancing over your post that a lot of what you say describes your theories about how best to achieve those goals. I’ll try to read those without evaluating those policy recommendations but with the aim of trying to figure out what they suggest about the kind of society you want to live in.
I’m not sure how MOL would translate into therapy or map into the wetware we got from evolution. Modern humans don’t appear well adapted to mass society. Most recent evolutionary pressure seems to have involved the immune system and adaptation to new food sources. I take it you want to focus on social references, and not what happens when I get too near a chocolate milk shake.
Perhaps your right wing friend doesn’t think you really mean “universal” healthcare.
I’m going to read this as reflecting your views, rather than as your interpretation of my friend’s. If that’s wrong let me know. I’d rather find out what my friend’s views are directly from him, to the extent that he’s willing to share.
I think that the conservative program is a better way of achieving the values and benefits explicity sought by secular humanists and international socialists. I don’t claim humanitarian values for my own, although I am pleased that the emergent market phenomenon is also the best way to achieve those values. I would like the whole world to be much more prosperous, because I enjoy the benefits that the surpluses of a wealthy mass society make possible, such as scientific and medical research, medical care, space travel, television, music, movies, fertile and attractive mates, spectator and participatory sports, etc.
He may think that a society where 1/5th the population has no health insurance is in a better position to serve as the economic engine of the world, lifting huge middle classes in China and India out of poverty, and sending money back to Mexico that keeps its economy afloat.
What I get from this is that you do not long for (have a reference for) a society in which everyone is insured for some minimal level of health care. A society where healthcare is accessible only to those who can afford it is OK with you. Is that right?
I think there are far more serious problems in the world than uninsured Americans. Food, shelter, basic public sanitation, communicable diseases and oppressive governments are still problems in much of the world. While, it is OK with me that healthcare is accessible to only those who can afford it, it is not OK with me that healthcare is not more affordable. The society should be producing more and cheaper providers. Having your healthcare managed by someone with a $150,000 education is an wasteful and obscene luxury. Anyone that educated should be a specialist. Any motivated scientifically literature person can manage blood pressure, cholesterol, test for strep and review basic screening results. I’m currently unemployed and could use the income, but the government is preventing me from hanging up a shingle and practicing medicine, and even prevents me from providing myself with medical care. The monopoly profits the government grants to MDs is part of the reason healthcare is not more affordable.
He may see the US income disparity as a consequence of a huge new supply of labor on the market in China and India and he can’t begrudge them their chance at a piece of the American dream, nor can he begrudge business owners for seeing that Americans usually can’t outproduce the 3 to 5 workers in china or india that could be employed for the same money.
It sounds like you might not care for living in a society with a large wealth disparity but you are willing to accept it. Is that right?
More wealth is more important to me than who has it. I’m not particularly concerned with the disparty, although I could wish that everybody had more.
Perhaps he takes the long term view, that despite the current period of instability and readjustment, the world must ultimately be wealthier with hundreds of millions more educated and productive people in it.
So your social goals embrace the whole world. Is that right?
I think it is fair to say my goals are not nationalistic. I don’t see myself as having social goals other than what would benefit me and my family, although I do like to help other people and prefer employment that provides an economic benefit to society. I think most private employment does.
Perhaps your right wing friend is humble in the face of the worlds complexity, and chooses to approach it conservatively guided by a few principles that seem to work. For instance, people seem to be more productive in their own self interest and when incentivised and when they have personal autonomy.
So personal autonomy is also a goal. You want all people to have personal autonomy. Is that right? If so, could you explain what you mean by “personal autonomy” and, perhaps, give some examples of social situations where people do not have personal autonomy.
Sure, I’m trying to get access to the neuroprotective drug rasagiline and am willing to pay for it. But the government is preventing pharacists and pharmaceutical companies from selling it to me without a prescription. The government has granted a monopoly on the prescription pad to doctors. So far I’ve been through a GP, a neurologist, an MRI, eeg and various other tests, and have been referred to another neurologist. They refuse to prescribe the drug off label due to fears of malpractice suits. They won’t even accept a waiver of liability because malpractice attorney’s have shown they can pierce those. I also tried to get thalidomide and matrix-mateloprotease inhibitors when my father was dying of colon cancer. I couldn’t find a doctor willing to go through the investigational new drug (IND) paperwork required by the FDA. Of course I also chafe at the paperwork required by the IRS, speed traps, checkpoints and the requirement for concealed weapon permits. I also have unschooled my children, and resent the government regulations in that area.
Despite the huge labor supply overhangs on the market from globalization, I am saddened by some of the increase in wealth disparity, because some of it seems to have been increased by mismanagement of the economy.
Ok, this seems to agree with my interpretation of your statement above: you don’t like wealth disparity, at least some degree of it. Is that right?
I don’t like waste and mismanagement and a government that screws up economic growth, and counter productive things done in the name of “good intentions”. Better to do nothing.
Is this what csgnet reallly wants to be doing?
Why not?
It might help the illustrate what is really needed if we coud also go through and MOL on you.
I doubt I will be embarrassed, I hope to come to terms with how best to adapt society to serve the needs and aspirations of human nature. Societies that work with our evolved human nature instead of trying to shoe horn it into an idealistic vision of what it should be, would seem to have a better chance to satisfice the greatest number.
That’s why I think this is a good topic for CSGNet. I, too, want to figure out how best to adapt society to best fit human naturel. I believe that PCT is the best model of human nature that we have. So I have been thinking about how best to organize a society based on PCT principles since I got involved in PCT science. But what I’ve realized is that apply PCT requires giving up one’s existing ideas about how to improve society (free market economics, socialism, marxism, etc), ideas that were developed without any understanding of how people actually work (and often without reference to data, but that’s another problem), and start form scratch (for example, in one of your comments above you mention “incentives”, which don’t really exist, according to PCT). Of course, it also requires some idea about what people think of as a “best” solution. That’s where this little exercise comes in. I can’t see how we can discuss ideas about how best to organize a society based on PCT principles without knowing what we mean by “best”.
Economic incentives do exist. There are people who perform jobs they don’t like for the money. Perhaps PCT implies there are not incentives in the brain? The brain seems to reward certain behaviors such as sex and drinking chocolate shakes. People seem to recognized and respond to economic incentives. They also seem to be more productive, when they can see how they will benefit.
Your post suggests, to me, that your idea of a “best” society is somewhat similar to mine. For example, you don’t seem to like the existence of a large wealth discrepancy; you also seem to like a wealthy society, which I take to mean that you, like me, do not like the existence of poverty. Along the same lines you seem to want a society where people have autonomy, and I do too, if what you mean by “autonomy” is a society in which everyone is able to be in control of their lives. Apparently, your idea of autonomy does not include making it possible for everyone to have access to healthcare. So that aspect of your vision of the society you want to live in is somewhat different than mine. Maybe that’s because we have different ideas about what autonomy is. If you are willing to continue this, perhaps you could explain what you think of as “autonomy”,
I think I’ve covered autonomy above. My idea of a best society would have far more educated and productive people, far more wealth and far more freedom. But I don’t require others to agree with me about any of this except the freedom. Not everyone has material goals. Yes there are people who are perfectly happy doing blue collar work, married to a cheerleader with five children, and who enjoy beer watching football with their buddies. This person may well have made a greater contribution to society if he had gone into supply chain management and had only 1.7 children and married a working professional. Do I have any concern about the income disparity between this person and the one who went into supply chain management? No, they made their own decisions. In fact the blue collar worker may be achieving more evolutionary fitness. I don’t accept materialism as the univeral standard. Heck, bonobos may be happier than we are. Hopefully, no one is going to ruin it for them by letting them know they don’t have healthcare! 
Humans are like fish out of water in mass society, 10,000 years wasn’t long enough to turn them into social insects, or alternatively to breed out levels of indiscriminate altruism which may decrease their evolutionary fitness. Yet what is it about humans that make the market phenomon spontaneously appear even in the face of coercive suppression? It is a most fortuitious and productive organizing principle, perhaps arguably a characteristic of human nature.
Best regards
Rick
Likewise,
.
Martin L
----- Original Message -----
On Fri, Aug 28, 2009 at 7:34 AM, Martin Lewitt mlewitt@comcast.net wrote:
[From Bill Powers (2009.09.01.0828 MDT)]
BP earlier: You tell me. Does PCT say that human beings maximize anything?
The maximizing assumption isn't explicit in the economic models. The assumption is that the parties to a voluntary exchange, make the exchange because they each prefer the state that they think will result after the exchange to the state they were currently in, or to the state that would result from other possible exchanges available to them. Lower information and transaction costs allow more efficient markets.
So what is this "state" and how would you compute it in a working model? Would it be something like value = (utility per unit) x (number of units)?
> Do economic theories generally include the concept of "enough" of some good?
Yes, I wish I had my Alchien and Allen available, but I think it was called something like "decreasing marginal utility", e.g., the subsequent apples may not be as much value to you as the first few were. Individual producers and consumers can be represented by their own curves.
How abruptly does this curve decline, and what determines the number of apples at which it begins to decline? Would those parameters become part of the model, with some range and distribution of values for a population?
I have my own ideas about how to use PCT in an economic model, but the point here is for you guys out there to do it. If I make proposals they will have much less reality than if you economists do it.
Best,
Bill P.
At 03:26 AM 9/1/2009 +0000, Martin Lewitt wrote:
[From Bill Powers (2009.09.01.0838 MDT)]
FL: I've been resisting the temptation to reply to this and the "Got Data?"
thread, because like Shannon, I simply don't have the time right now.
But suffice it to say that Bill's idea of creating a model of the
economy populated by PCT-based agents is exactly what I hope to do for
my dissertation.
BP: I hope you clear this with your advisor and potential committee members, who may be skeptical about PCT.
PCT, it seems to me, opens the values door to analysis.
...
Which reference signals/values we learn, how we learn them and what causes us
to change them are at least legitimate avenues of study under a
PCT-based approach, whereas they are not typically the concern of
economists. And yet it is these reference signals economics is all about
maximizing our proximity to. To me, this is an untenable myopia. Others
may disagree.
BP: I think I can relax. You will do just fine.
The values door is the right one to open. It gives control of the economy to the agents in it instead of to disembodied principles.
A hint: Budgetary constraints are reference signals, too. The effect of buying things is to decrease consumer cash reserves; the effect of working or receiving capital income is to increase them. If your credit is good you can let cash reserves go negative. People have different reference levels for cash reserves. A person with an assortment of control systems relating to money and goods will come to some equilibrium determined by relative loop gains in the control systems, and by the natural interactions that can't be avoided (if you increase your stock of goods, your stock of money decreases).
FL: ... I believe (but expect that Bill may disagree)
that PCT creates agents that are inherently social, because we learn
from others at least some reference signals and even which perceptual
signals are important to pay attention to.
BP: Don't overcomplicate this. Each agent is autonomous. Each agent interacts with other agents and has fundamental needs that have to be met to go on living, as well as learned needs (wants). The "social" part will emerge from the interactions (even sociologists, many of whom have become contaminated by PCT, are starting to agree with this). My strong bias is to work from the particular to the general rather than introducing the generalizations right away. There are no social entities that float in the air between people. There is no law of supply and demand, except in the sense that there is a relationship between supply and demand that emerges from the way individuals interact in an economy.
FL: ... This is how Adam Smith modeled us ... It is this Sympathy that is the Invisible Hand that guides markets to social optima, not simply free market competition on its own.
...
Sorry for the length of the reply - it turned out not to be quick, and
probably not completely cogent either.
Be as lengthy as you like, as long as you go on talking like that.
Best,
Bill P.
At 08:53 AM 9/1/2009 -0500, Frank Lenk wrote:
[Martin Taylor 2009.09.01.08.09]
[From Rick Marken (2009.08.31.0940)]
Martin Taylor
(2009.09.01.00.14)–
I’m so sorry. Forgive my naivete. I had been for many years under the
impression that to control a perceptual variable was to minimize the
difference between its actual value and its reference value. Apparently
I must have been wrong, if it makes no sense to you.
…
Anyway, what didn’t make sense to me was referring to minimizing error
as maximizing subjective experience.
I don’t think “experience” is the same as “value”. You can have
experiences that you don’t value at all highly. I’m currently engaged
in trying to sort out the effects of a 98-year-old cousin who dies
recently. To me, there would be more value in having her present, but
it’s certainly an experience trying to make sense of everything. The
subjective value of this experience is decidedly negative, meaning that
I would find more value in simply doing nothing.
`
However, after posting my comment that minimizing error was equivalent
to maximizing the subjective value. it occurred to me that subjective
value also has some element of gain about it. One doesn’t perceive much
subjective value in something about which one does not care much, even
if it is vry close to its reference value. So the perception of
subjective value is presumably a function not only of an error value
but also of the gain associated with controlling that perception. And
that opens up a whole extra can of worms, since it implies that the
parameters of a perceptual control unit are themselves perceptible,
which would in turn imply perceptual control outside the structure of
the normal hierarchy.
Do you have any less heretical interpretation of the perception of
“subjective value”, a perception which clearly exists as am adjunct of
many other perceptions, not all of which are controllable (which
renders my own interpretation a bit dubious :-)? The beauty of a
sunset, for example, is to me of high subjective value, but totally
uncontrollable. Also of high subjective value (to me) is the fact of
having brought some perception near to its reference value, when to do
so has been quite difficult, no matter what that controlled perception
might have been.
To get back to the thread subject heading, isn’t the subjective value
to you of having more people able to lead a good life greater than the
subjective value to you of perceiving yourself to be very wealthy in
cash (as opposed to wealthy in social relations and good health)? Do
you not think that the conservatives you demonize would reverse the
order of these subjective values? If that’s true, what might it suggest
about the control systems controlling lower-level perceptions that
might be serving as actuators in controlling those high-level variables?
Martin (T to distinguish from the other Martin in this thread)
From: “Bill Powers” powers_w@FRONTIER.NET
Sent: Tuesday, September 1, 2009 8:38:01 AM GMT -07:00 US/Canada Mountain
[From Bill Powers (2009.09.01.0828 MDT)]
BP earlier: You tell me. Does PCT say that human beings maximize anything?
The maximizing assumption isn’t explicit in the economic
models. The assumption is that the parties to a voluntary exchange,
make the exchange because they each prefer the state that they think
will result after the exchange to the state they were currently in,
or to the state that would result from other possible exchanges
available to them. Lower information and transaction costs allow
more efficient markets.
So what is this “state” and how would you compute it in a working
model? Would it be something like value = (utility per unit) x
(number of units)?
The state may not be expressable in material units. Someone who exchanges dollars for the viewing of a movie, expects to value the experience of viewing the movie more than the money, and more than the alternative uses of his time and money. He may be wrong and wish he had his money back afterwards, or he may wish to see the movie again.
Do economic theories generally include the concept of “enough” of some good?
Yes, I wish I had my Alchien and Allen available, but I think it was
called something like “decreasing marginal utility”, e.g., the
subsequent apples may not be as much value to you as the first few
were. Individual producers and consumers can be represented by
their own curves.
How abruptly does this curve decline, and what determines the number
of apples at which it begins to decline? Would those parameters
become part of the model, with some range and distribution of values
for a population?
The curves and how rapidly they drop off vary by individual. I don’t value apples much at all, not enough to purchase them, not even enough to cut them for myself, but if offered a piece or two already cut I might consume them. But goods not only have their own supply and demand curve, but their curves are often related to other goods that can be substituted for them. Chicken might be substituted for beef when the price differential gets higher. Debt financing gets substituted for equity financing when equity financing gets more expensive due to being double taxed. I doubt attempts to model the economy are often done at the level of the individual actor, since individual data is cumbersome or not available. Substitution of chicken for beef can be seen in aggregate historical data and can be modeled in the aggregate based upon the assumption that the future will be like the past. But even the aggregate curves change over different time scales. Demand for energy was inelastic over short time scales during past energy crises, but the energy density of the gross domestic product decreased dramatically over decadal time scales, in response to increasing energy prices.
Individual curves can change over time, just as aggregate curves do. Presumably the unseen PCT data, even if it were available for individuals, can also vary over time. I don’t see what is qualitatively different about unknown individual PCT data and unknown individual subjective values, that will add to the ability to predict economic activity.
– Martin L
----- Original Message -----
At 03:26 AM 9/1/2009 +0000, Martin Lewitt wrote:
I have my own ideas about how to use PCT in an economic model, but
the point here is for you guys out there to do it. If I make
proposals they will have much less reality than if you economists do it.
Best,
Bill P.
[From Bill Powers (2009.09.01.1635 MDT)]
>BP earlier: So what is this "state" and how would you compute it in a working
> model? Would it be something like value = (utility per unit) x
> (number of units)?ML: The state may not be expressable in material units. Someone who exchanges dollars for the viewing of a movie, expects to value the experience of viewing the movie more than the money, and more than the alternative uses of his time and money. He may be wrong and wish he had his money back afterwards, or he may wish to see the movie again.
This is relatively easy to model if you start down a level or two.
You set up two control systems, one concerned with money and the other concerned with movies. Suppose we say the person has a reference level for seeing M* movies per 4-week month (the actual number seen in 4 weeks is M) Movies cost Pm dollars to attend, so each movie seen subtracts Pm dollars from the person's cash reserve (a law of nature).
The person also has a reference level for maintaining R* dollars in a cash reserve (R, unstarred, is the actual amount present). The person works for H hours per day at a wage of W dollars per hour, and has an income of Y = H*W dollars per day, so every day or every week the cash reserve R is increased Y dollars by the deposit of the paycheck.
The cash reserve decreases by Pm dollars for each movie seen. The number of movies seen over the past four weeks, M, is recalculated after after each movie is seen. Just to make things more interesting, we might say that the movie changes every three days, and the person doesn't like to see movies more than once.
You can easily put these statements into a runnable model. You set the daily wage, the number of movies per week desired, the cost per movie, and the cash reserve desired. You can initialize the cash reserve to some reasonable number, and set the model going. The cash reserves will either start decreasing every week, or increasing; it's unlikely that they will remain constant. So the cash reserve error will be increasing or decreasing.
Now you have to decide what will happen when the actual number of movies seen per week doesn't match the number desired, and the cash reserve is not the amount desired. In other words, you have to close those two loops, completing the design of these two control systems. And you have to start thinking about a higher level of control. Why is the cash reserve reference level set to where it is, at R* dollars? Why is the reference for movies set to M* movies per four weeks? What might happen that would cause M* to increase and R* to decrease, or vice versa, the starred values being the reference level of the unstarred variable?
This suggests a higher control system that adjusts the reference levels for cash reserves and for number of movies seen per month, so as to achieve some particular relationship between them. Or perhaps the higher system could adjust the output gains of the two lower control systems, changing the amount of effort that will be expended to correct a given amount of error (a variable I have nicknamed "importance"). We haven't done much with control by changing parameters, but that's no reason not to try it.
These are just suggestions about how to get started. The important thing is to cobble together a model and make it run, not just sit and think about it. When you run the model you'll see what is wrong with it and at least a few things you can correct. So correct them and look for what's wrong NOW. Every time you run it you'll see the relationships in the model differently and understand them better. If you get the above model to run, you almost certainly will start to wonder what will happen if the person wants more than just going to movies -- what about food, for example? What happens if both are wanted?
You'll notice that I haven't said anything about value or utility, or for that matter, realism. The first stage in modeling is to get a model that is self-consistent and understandable. You need to see the implications of the assumptions you've put into the model. Almost always, you'll find that your initial idea of what the model will do was wrong, and that some of what it does was not anticipated. The basic operations are the simplest ones you can think of; you can derive abstract generalizations later, after you start to see how the model is actually behaving. After the model is running with reasonable realism, you can start asking, if you're interested, which aspects of it might correspond to the notion of "value" or "utility" or "marginal utility" and so on. Deciding on those correspondences won't change the way the model runs. But the way the model runs might change your mind about what those terms mean.
I wouldn't be surprised if Rick Marken were to come up with a spreadsheet model of all this, or Bruce Abbot or Martin Taylor a Delphi model or
C model. But let's give our economist friends first whack at this, if they want to and know how. It would help to know what kinds of programming skills are out there.
Best,
Bill P.
At 04:52 PM 9/1/2009 +0000, Martin Lewitt wrote:
[From Rick Marken (2009.09.02.0930)]
This thread has moved to economic theory, away from conservative controlled variables, and I can’t really get it back on track. And I’m really no longer interested in what conservative controlled variables are; I’m pretty sure I know what they are and there’s not much I can do about it. But I’ll try a quick reply to Martin Lewitt since he was nice enough to reply.
Modern humans don’t appear well adapted to mass society.
I guess that depends on what you mean by “well”. I think humans have proven to be amazingly well adapted to mass society. The fact that NY City works as well as it does is very impressive to me.
I would like the whole world to be much more prosperous, because I enjoy the benefits that the surpluses of a wealthy mass society make possible
Interesting. So you are controlling for the wealth of the whole world.
I think there are far more serious problems in the world than uninsured Americans.
Again, this sounds like universal healthcare here in the US is not a goal. But you won’t let the implication go that you do care about it; you just add caveats (like “there are far more serious problems”) to make it clear that you really don’t care about it. Why won’t conservative just be up front about these things; could it be that you are ashamed of your goals, or lack thereof?
While, it is OK with me that healthcare is accessible to only those who can afford it, it is not OK with me that healthcare is not more affordable.
Ah, that’s about as explicit as you can get. Thanks. You you are controlling for having heathcare accessible only to those who can afford it. I hope the “people” screaming at the town halls know that that’s what they are fighting for.
More wealth is more important to me than who has it. I’m not particularly concerned with the disparty, although I could wish that everybody had more.
Again, thanks. That would explain why increases in child poverty and stagnant wages are not a problem for your economic preferences.
I don’t see myself as having social goals other than what would benefit me and my family, although I do like to help other people and prefer employment that provides an economic benefit to society.
Well, that’s good. So you like to help people you just don’t want the government to do it, is that right. Wasn’t the government in the US formed, in part, to provide for the general welfare?
I think most private employment does [benefit society].
Public employment too, no. There’s a bunch of socialist operatives (firemen) running around the San Gabrials here in LA doing a pretty heroic job of benefiting society by saving lives and property (while risking their own lives). Of course, they are paid by tax dollars and so are to be loathed as socialist tools. But I can’t help admiring and being thankful for the work done by the comrades;-)
So personal autonomy is also a goal. ?
Sure, I’m trying to get access to the neuroprotective drug rasagiline and am willing to pay for it. But the government is preventing pharacists and pharmaceutical companies from selling it to me without a prescription.
I agree that government often unnecessarily prevents one from getting what one wants and should be able to have. I think the government should not limit your access to the drugs you want, if you make the informed choice to risk it. That means all drugs, including heroin, marijuana, and alcohol. Same with abortion, marriage contracts, suicide, etc. Any action that doesn’t hurt another autonomous system should, at most, be regulated but not prevented by government. But the fact that government has done things to limit people’s ability to achieve goals that hurt no one except, possibly, themselves, just means (to me) that we have to work to improve government rather than do away with it. Government used to prevent people of different races from marrying and protected the right of people to own other people as property. Government has made some really bad mistakes because governments are just people and people have their predjudices. But government has also done some great stuff by helping to coordinate the actions of many autonomous individuals, allowing them to achieve ends – such as the interstate highway system, the moon landing, etc etc-- that would have been impossible to achieve without this kind of coordinated action.
Of course I also chafe at the paperwork required by the IRS, speed traps, checkpoints and the requirement for concealed weapon permits. I also have unschooled my children, and resent the government regulations in that area.
I also chafe at IRS paperwork. But speed traps seem like a very small price to pay (in inconvenience) for highway safety for the collective; I don’t run into many checkpoints but those certainly would be annoying, unless they are aimed at catching a fugitive who is a threat to society; again, from my perspective a small individual inconvenience for the collective good. Why you would chafe at the requirement to have a concealed weapons permit is mind boggling. Would you like to know that anyone can carry a concealed weapon? Even the nutcases like those going to town halls and calling Obama a Nazi? And I don’t uderstand your problems with government regulations about schooling. Again, there may be ways to improve them. It seems to me that I gladly make many compromises of my “autonomy” (my ability to select whatever goal I want) every day because the inconvenience is so small relative to what I see as the obvious benefit to society. There are certain “rules” that government enforces that I do chafe under; but they don’t incline me toward eliminating government; they incline me toward trying to improve government.
I think I see that one of the main differences between us is in what we see as legitimate governmental intrusions on our autonomy. I see the intrusions as laws against abortion (which no longer are legal but we could go there again), against drugs (particularly narcotics), against any voluntary marriage contract and such. That is, I’m against laws that prevent behaviors that are, at worst, self destructive.
I don’t like waste and mismanagement and a government that screws up economic growth, and counter productive things done in the name of “good intentions”. Better to do nothing.
Well if you don’t like a government that screws up economic growth then the governments you should not like, based on the data, are Republican led governments.
It might help the illustrate what is really needed if we coud also go through and MOL on you.
Bill doesn’t seem to want to do it with me and no one else does. I can understand why; I’m a bit of an asshole;-)
Economic incentives do exist. There are people who perform jobs they don’t like for the money.
The cause (incentive) is in the people, not in the money;-)
Perhaps PCT implies there are not incentives in the brain?
The incentives that don’t exist are environmental events that cause behavior. Money is considered an incentive by economists (and psychologists) but it’s not.
The brain seems to reward certain behaviors such as sex and drinking chocolate shakes.
It seems to but it doesn’t. Sex and chocolate shakes are not rewarding unless people want them. And some people (to my dismay) don’t ever want them and no one wants them all the time.
People seem to recognized and respond to economic incentives. They also seem to be more productive, when they can see how they will benefit.
Yes, it all seems that way. PCT shows that things are often not the way they seem!
That’s enough for now. I think I see the basic difference between us. We find different governmental laws (enforced coercively) to be “chafing”. You solution to the chafe is to do away with government; mine is to work to improve it.
Best
Rick
On Tue, Sep 1, 2009 at 7:03 AM, Martin Lewitt mlewitt@comcast.net wrote:
–
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com
From: “Richard Marken” rsmarken@GMAIL.COM
Sent: Wednesday, September 2, 2009 10:29:03 AM GMT -07:00 US/Canada Mountain
[From Rick Marken (2009.09.02.0930)]
This thread has moved to economic theory, away from conservative controlled variables, and I can’t really get it back on track. And I’m really no longer interested in what conservative controlled variables are; I’m pretty sure I know what they are and there’s not much I can do about it. But I’ll try a quick reply to Martin Lewitt since he was nice enough to reply.
Modern humans don’t appear well adapted to mass society.
I guess that depends on what you mean by “well”. I think humans have proven to be amazingly well adapted to mass society. The fact that NY City works as well as it does is very impressive to me.
What I had in mind is well illustrated by the human carnage of the last couple centuries. The human vulnerability to collective identitities, the rise of nation states and conscript militaries, national, racial, class and other collective identities, and religious extremism. Look at the ease with which we can mock, demonize and dehumanize each other. Human social makeup also includes the valuing of altruism, self-sacrifice, heroism and teamwork, but lets not overlook the vulnerabilities to the irrational mass identities that we were left with when our “success” perhaps prematurely aborted our evolution. Perhaps these vulnerabilities help us be the ones that survived at the tribal level. Perhaps modern humans overwelmed homo neaderthalis and homo erectus with fanaticism rather than skill or eloquence.
Perhaps another legacy of the tribe phase of evolution is the vulnerability to faith in simple unitary command and control solutions . Consider the unitary god, unitary king, single payer, central planning, etc.
US conservatives seem to have a more ingrained awareness of these human vulnerabilities and the checks and balances needed to prevent a concentration of power that can be exploited by demagogues and fanatics. The US was founded upon this awareness.
I would like the whole world to be much more prosperous, because I enjoy the benefits that the surpluses of a wealthy mass society make possible
Interesting. So you are controlling for the wealth of the whole world.
I think there are far more serious problems in the world than uninsured Americans.
Again, this sounds like universal healthcare here in the US is not a goal. But you won’t let the implication go that you do care about it; you just add caveats (like “there are far more serious problems”) to make it clear that you really don’t care about it. Why won’t conservative just be up front about these things; could it be that you are ashamed of your goals, or lack thereof?
Obviously, I’m brutally honest with myself. Why won’t liberals be more up front and honest with us and themselves. They claim that universal healthcare is a priority and even a right, but only if someone else, especially the wealthy pay for it. At the same time they insist on leaving tremendous oil wealth in the ground in Anwar and off shore. At least I want more people to be able to afford healthcare, both by producing more wealth and eliminating government restrictions on the supply. The liberals don’t care whether the nation can afford it, or for how long will be able to afford it. They obviously have other priorities. If everything is a priority, then nothing really is.
While, it is OK with me that healthcare is accessible to only those who can afford it, it is not OK with me that healthcare is not more affordable.
Ah, that’s about as explicit as you can get. Thanks. You you are controlling for having heathcare accessible only to those who can afford it. I hope the “people” screaming at the town halls know that that’s what they are fighting for.
I think they are probably more aware of what they are fighting against than what they are fighting for.
More wealth is more important to me than who has it. I’m not particularly concerned with the disparty, although I could wish that everybody had more.
Again, thanks. That would explain why increases in child poverty and stagnant wages are not a problem for your economic preferences.
Wages weren’t stagnant globally, and if you read my discussion of the federal reserve, you know I disagreed with policies that favored allocation of the returns from increased productivity to capital rather than labor. Poor children in the US are well off by world, historical, and pan-specific standards. Their problems are certainly no excuse to take the unnatural action of forcing some mammals to invest in the offspring of others rather than their own. Why aren’t you singling out the irresponsible parents instead, aren’t they the real problem?
I don’t see myself as having social goals other than what would benefit me and my family, although I do like to help other people and prefer employment that provides an economic benefit to society.
Well, that’s good. So you like to help people you just don’t want the government to do it, is that right. Wasn’t the government in the US formed, in part, to provide for the general welfare?
I think it was to “promote” not “provide for”.
I think most private employment does [benefit society].
Public employment too, no. There’s a bunch of socialist operatives (firemen) running around the San Gabrials here in LA doing a pretty heroic job of benefiting society by saving lives and property (while risking their own lives). Of course, they are paid by tax dollars and so are to be loathed as socialist tools. But I can’t help admiring and being thankful for the work done by the comrades;-)
A lot of the beaurocracy is parasitic, and even those in necessary functions such as police, and disaster response extract monopoly profits from the taxpayers with higher wages and overly generous pensions. If you look at the statistics, truckers actually have more dangerous jobs and are arguably more productive, yet we don’t have elaborate ceremonies honoring them.
So personal autonomy is also a goal. ?
Sure, I’m trying to get access to the neuroprotective drug rasagiline and am willing to pay for it. But the government is preventing pharacists and pharmaceutical companies from selling it to me without a prescription.
I agree that government often unnecessarily prevents one from getting what one wants and should be able to have. I think the government should not limit your access to the drugs you want, if you make the informed choice to risk it. That means all drugs, including heroin, marijuana, and alcohol. Same with abortion, marriage contracts, suicide, etc. Any action that doesn’t hurt another autonomous system should, at most, be regulated but not prevented by government. But the fact that government has done things to limit people’s ability to achieve goals that hurt no one except, possibly, themselves, just means (to me) that we have to work to improve government rather than do away with it. Government used to prevent people of different races from marrying and protected the right of people to own other people as property. Government has made some really bad mistakes because governments are just people and people have their predjudices. But government has also done some great stuff by helping to coordinate the actions of many autonomous individuals, allowing them to achieve ends – such as the interstate highway system, the moon landing, etc etc-- that would have been impossible to achieve without this kind of coordinated action.
I pretty much agree with this. In terms of priority, I would like the more important prescription medicines addressed first. If compromises are necessary on recreational drugs, I favor legalization of pot and cocaine, and might abandon hope for the opiates, although perhaps they can at least be decriminalized and maintenance programs setup. Meth appears so addictive and dangerous that it might have to be last on the list. Government should never have been in the marriage licensing business.
Of course I also chafe at the paperwork required by the IRS, speed traps, checkpoints and the requirement for concealed weapon permits. I also have unschooled my children, and resent the government regulations in that area.
I also chafe at IRS paperwork. But speed traps seem like a very small price to pay (in inconvenience) for highway safety for the collective; I don’t run into many checkpoints but those certainly would be annoying, unless they are aimed at catching a fugitive who is a threat to society; again, from my perspective a small individual inconvenience for the collective good. Why you would chafe at the requirement to have a concealed weapons permit is mind boggling. Would you like to know that anyone can carry a concealed weapon? Even the nutcases like those going to town halls and calling Obama a Nazi? And I don’t uderstand your problems with government regulations about schooling. Again, there may be ways to improve them. It seems to me that I gladly make many compromises of my “autonomy” (my ability to select whatever goal I want) every day because the inconvenience is so small relative to what I see as the obvious benefit to society. There are certain “rules” that government enforces that I do chafe under; but they don’t incline me toward eliminating government; they incline me toward trying to improve government.
I see it as a self-serving conflict of interest to have government employees leading children in the “Pledge of Allegiance” mantra, a pledge that even adults argue about the meaning of. Since humans are so vulnerable to indoctrination, collective identities and fanaticism, it is dangerous to have centralized government control of the schools. The conservatives fortunately have always preferred local control and resisted national involvement, that is, until the democrats exploited the issue to make it seem like Republicans didn’t care about the education of children, so Bush had to run as “the education president”. and gave us “No Child Left Behind”. Democrats have such faith in central command and control solutions that they seem to forget that they might lose an election and that power will be in hands they don’t agree with. I guess they want a single party system.
I think I see that one of the main differences between us is in what we see as legitimate governmental intrusions on our autonomy. I see the intrusions as laws against abortion (which no longer are legal but we could go there again), against drugs (particularly narcotics), against any voluntary marriage contract and such. That is, I’m against laws that prevent behaviors that are, at worst, self destructive.
I too am pro-choice. However, that doesn’t justify bad legal decisions. Either constitution should have been amended or the matter left to the states. Roe v. Wade was incorrectly decided.
I don’t like waste and mismanagement and a government that screws up economic growth, and counter productive things done in the name of “good intentions”. Better to do nothing.
Well if you don’t like a government that screws up economic growth then the governments you should not like, based on the data, are Republican led governments.
I don’t think the Republican governments have been particularly insightful, but most of the blame for imbalances leading to speculative bubbles and the “business cycle” lies with the democrats. In particular they have prevented reform of a tax system that favors debt financing over equity financing, by single taxing interest while double taxing dividends and profit. GW Bush and previous republican administrations have favored eliminating the double tax on dividends and reducing the taxes on capital gains. By having a tax system that favors leverage, no wonder we get speculative bubbles and unstable levels of debt.
Conservatives have also favored a sound money system rather than a fiat money system. Unfortunately, this particular fiat money system compounds the problem by “printing” money through fractional reserve lending, i.e. more debt!
It might help the illustrate what is really needed if we coud also go through and MOL on you.
Bill doesn’t seem to want to do it with me and no one else does. I can understand why; I’m a bit of an asshole;-)
Too bad, it would help me understand this a little better if I had a working example. Especially, this stuff about “incentive”, which seems like mere semantics or perspective.
Economic incentives do exist. There are people who perform jobs they don’t like for the money.
The cause (incentive) is in the people, not in the money;-)
Perhaps PCT implies there are not incentives in the brain?
The incentives that don’t exist are environmental events that cause behavior. Money is considered an incentive by economists (and psychologists) but it’s not.
The brain seems to reward certain behaviors such as sex and drinking chocolate shakes.
It seems to but it doesn’t. Sex and chocolate shakes are not rewarding unless people want them. And some people (to my dismay) don’t ever want them and no one wants them all the time.
Yes.
People seem to recognized and respond to economic incentives. They also seem to be more productive, when they can see how they will benefit.
Yes, it all seems that way. PCT shows that things are often not the way they seem!
I don’t see how PCT would alter that result, but I’m curious.
That’s enough for now. I think I see the basic difference between us. We find different governmental laws (enforced coercively) to be “chafing”. You solution to the chafe is to do away with government; mine is to work to improve it.
I appreciate the benefits of mass society enough to accept limited government.
Best
Rick
Apologies for the formatting. I am using a dumb web mail window and need to install a better mail program.
regards,
Martin
----- Original Message -----
On Tue, Sep 1, 2009 at 7:03 AM, Martin Lewitt mlewitt@comcast.net wrote: