Economics- a discussion through Johari Windows

[From Peter Small (2004.03.04)]

[From Fred Nickols (2004.03.03.1005 EST)] -

It occurred to me that the Johari Window might be a useful framework
for thinking about reference conditions. The Johari Window is
essentially a 2x2 matrix in which the four cells represent matters
known and unknown to self and others.

Known to Self and to Others = Public
Known to Self but not Others = Private
Known to Others but not Self = Blind
Unknown to Others and Self = Hidden

Having followed up on Fred's suggestion, I checked out Johari Windows
on this site:

http://www.noogenesis.com/game_theory/johari/johari_window.html

And, like Bill Williams, I see this as possibly a useful framework
for discussion. This would take a lot of animosity out of discussions
because we can talk about each others "blind" window panes, rather
than attacking their knowledge in a general way.

Let me start with Bill Williams, who wondered "What do others know
about me that I don't know?"

The first thing I'd point out in Bill's 'blind" window pane would be
his self-confessed unfamiliarity with "Complexity theory". This is a
fine example of the blind men and the elephant. It is inconceivable
to me that anyone can claim to understand economics without having an
appreciation of the wider picture - which can only be understood
completely in terms of complexity theory.

To disdainfully dismiss it as irrelevant is the height of folly.

Secondly, I would point to Bill's insistence, that profit has a value
of zero in a transaction. This seems to expose a serious flaw in his
thinking - unless he is using it as a deliberate red herring.

I think Bill must be confused by the fact that, in a transaction,
both sides must view the transaction as beneficial. A twisted logic
might argue that, as neither side lose anything, neither could be
gaining (i.e., nobody making a profit).

But, a familiarity with Game Theory sees transactions in terms of
zero sum and non-zero sum games. In zero sum games, one side can only
profit if the other side loses (gains and losses add up to zero - as
in most gambling games). However, practically all transactions come
under the category of non-zero sum games, where both parties gain
from the transaction. To suggest that neither side can gain (make a
profit) out of non zero sum transactions is clearly ludicrous.

It is only extreme, left wing circles that sees business activity in
terms of zero sum games - where it is common to think that an
employer's profit must be at the expense of the employees.

A few years ago I wrote a dialogue to explain how non zero games
allow both side to benefit:

···

----
What are you thinking about?
I am not thinking.
I am reprogramming my brain.
Reprogramming your brain?
Yes I have just learned that money can be equated with energy.
Why do you need to reprogram your brain?
Because all my previous associations with money had not registered
that connection.
Without the connection between money and energy my thinking will be
sloppy when I am making financial judgements.
How do you reprogram your brain to equate money with energy?
Well you have to rethink everything you have learned about money and
substitute energy for money or value.
Give me an example.
Okay this is the way my reprogramming thinking goes.
In a commercial situation most of the people involved appear to be
gaining energy that is money or value.
Successful businesses make money and that is energy... so business
can be considered as a game to win energy.
If the game is a "non zero sum" type game a game where everybody can
win there must be energy being introduced into the system somehow.
Energy being put into the system?
Yes if all the players are winning energy it has to come from somewhere.
Where from?
  Oil is being pumped out of the ground at an energy cost far less
than the energy in the oil.
This will introduce energy into the system.
Similarly with gas coal hydro and nuclear power.
This is one of the reasons why economic activity can be a "non zero
sum" game with more winners than losers.
Wait a minute.
This does not fully explain money making.
People were making money long before these energy sources came into being.
And money can be made when a prime energy source is not involved: the
service industries for example.
You are quite right.
Introducing energy into a system is not the only way to create "non
zero sum" games.
  People can also benefit from most commercial situations through
energy being saved.
Most business profits arise through the sharing of energy which has
been gained through doing or making things more efficiently.
I don't quite understand?
I'll give you an example
Is it necessary for you to go to farms all over the country to get your food?
No. I get my food from the stores.
This must mean that your local grocery store together with other
middlemen collect all the food for you, arranging for everything you
need to be brought to one single convenient place for you to collect.
This saves you a lot of time and a lot of money.
  And, not only do they do this for you but they also do it for
everyone else in the area.
I see, because they do everything in bulk they can do it more efficiently?
That's right If you can imagine all the energy saved by you and all
the other shoppers not having to traipse about all over the country
to get your food you can see that the energy saving is enormous - far
larger than the energy required by the store keeper and the middlemen
to organize everything.
And the Profit?
You and the other shoppers do not mind giving up a little of your
saved energy to pay for this benefit so the store keeper and the
middlemen can cover their costs and make a profit.
Now can you see how everyone can benefit from saved energy?
I must admit that it is an interesting way to look at things.
The value to me is that it gives me a way of looking at how to make money.
Money does not have to be made through taking it away from somebody
else as in "zero sum" games.
Money making does not have to be a cut and thrust game between
antagonists who try to take from each other.
It is a "non zero sum" game where everybody can win and nobody need lose.
The way to play the game of making money is not about taking other
people's money it is a game of trying to be more efficient - and
profiting by saving energy for people.
The emphasis is not on beating other people, but benefiting and
helping them satisfying their needs.
So, making a profit need not be a battle of wits. It can be a thinking game.

Peter Small

Author of: Lingo Sorcery, Magical A-Life
Avatars, The Entrepreneurial Web, The
Ultimate Game of Strategy and Web
Presence
http://www.stigmergicsystems.com

--

[Martin Taylor 2004.03.04.0953]

[From Peter Small (2004.03.04)]
...Secondly, I would point to Bill's insistence, that profit has a value
of zero in a transaction. This seems to expose a serious flaw in his
thinking - unless he is using it as a deliberate red herring.

I think Bill must be confused by the fact that, in a transaction,
both sides must view the transaction as beneficial. A twisted logic
might argue that, as neither side lose anything, neither could be
gaining (i.e., nobody making a profit).

But, a familiarity with Game Theory sees transactions in terms of
zero sum and non-zero sum games. In zero sum games, one side can only
profit if the other side loses (gains and losses add up to zero - as
in most gambling games). However, practically all transactions come
under the category of non-zero sum games, where both parties gain
from the transaction. To suggest that neither side can gain (make a
profit) out of non zero sum transactions is clearly ludicrous.

There is a distinct possibility here of launching into another
fruitless argument based on the use of the same word to mean two
quite different things.

"Profit"

Bill Williams talks ONLY about money, and in the aggregate. If (and
only if) there is no creation or loss of money in a closed economy,
then it is a logical necessity that the overall net profit from all
transactions is zero.

Peter Small talks about profit in a wider sense. In a buy-sell
transaction, money flows only one way. Something else goes the othe
way. Both sides "profit" in the sense that for each participant some
controlled perception is closer to its reference value after the
transaction than before. The global total error of the participants
has been reduced (though the transaction may well have increased the
global total error of people not directly involved). In the
aggregate, there is no law of conservation of perceptual error, and
with that measure of profit, the economy is not a zero-sum game.

Please, let's not get into a another pointless kerfuffle based on
failure to notice that the words "profit" (like most words in any
natural language) has more than one meaning.

Martin

[From Kenny Kitzke (2004.03.04)]

<Peter Small (2004.03.04)>

<Secondly, I would point to Bill’s insistence, that profit has a value
of zero in a transaction. This seems to expose a serious flaw in his
thinking - unless he is using it as a deliberate red herring.

I think Bill must be confused by the fact that, in a transaction,
both sides must view the transaction as beneficial. A twisted logic
might argue that, as neither side lose anything, neither could be
gaining (i.e., nobody making a profit).>

I will let Bill speak for himself but I think you will find that in accounting and double entry bookkeeping for the economy as a whole, profits do not exist.

<It is a “non zero sum” game where everybody can win and nobody need lose.>

You are absolutely right. Transactions, Businesses and Economies are not zero-sum (closed loop systems). They are open systems that can create profit and value and GDP essentially without limit given unlimited resourses.

Your analogy to energy is good. But, I think the idea of “time and energy” would be even better. Time is money as the saying goes. And time is valuable because it is limited for each human being.

I have a hunch you would like working for Value Creation Systems, for it is value that individuals and organizations need to create. And, if you want to make profits in a free-market, capitalistic economy, creating greater value for customers than your competitors can is the sure fire method. And, that has very little to do with the cost of production.

Perhaps when Bill Powers and Rick Marken come to understand such principles, they will give up trying to model complex dynamic open system economies and draw conclusion about them with simple closed loop models running monetary data through over-simplified and unrealistic equations?

But, who is to say what people should waste their time doing? Surely not me.

[From Rick Marken (2004.03.04.0850)]

Martin Taylor (2004.03.04.0953) -

There is a distinct possibility here of launching into another
fruitless argument based on the use of the same word to mean two
quite different things.

"Profit"

From my perspective, profit (P) is just a wage that is paid to the owners of

the means of production. It is the payment for the owner's services (as
manager, innovator and risk taker). Profit is what I described earlier: the
difference between income (I) and expenses (E), P = I - E. Income is what
the owner is paid for his goods and services. Expenses are what the owner
pays to produce those goods and services, in the form of wages, capital
costs, taxes, insurance, etc.

At the aggregate level, profit is just one component of the income returned
to the composite producer (this income is called P'Q' in H. Economicus), the
other components being wages (since workers are also part of the aggregate
producer). Since the owners of much of the means of production are
shareholders, profit at the aggregate level is typically referred to as
capital income (C). So composite producer income (P'Q') is made up of two
components: wage (W) and capital (C) income: P'Q' = W + C.

Composite producer income itself (P'Q') is not called "profit" because there
is no excess of income over expenses. Composite producer income represents
the entire cost of producing GNP. Individual business expenses (E) are, at
the aggregate level, part of W: they were ultimately paid as wages either
directly (to workers) or indirectly (to workers producing the capital
equipment, working for insurance companies, contracting to the government,
etc.).

If you think of profit as a wage at the individual level (sometimes a very
good wage, like the $30,000,000 or so Eisner makes yearly) then it's easier
to understand that there is no profit in this sense at the aggregate level.
At the aggregate level, producer income represents everything the composite
producer paid (in wages and profits) to produce the goods and services that
are GDP (Q) and this is all the income that is available to the composite
producer, in the role of composite consumer, to purchase what has been
produced.

Best regards

Rick

···

--
Richard S. Marken
MindReadings.com
Home: 310 474 0313
Cell: 310 729 1400

From[Bill Williams 4 March 2004 8:40 AM CST]

[From Peter Small (2004.03.04)]

Peter and I see some merit in Fred's suggestion that the concept
of Johari Windows can be useful device. Peter sees it as valuable
because it might provide a way of taking "a lot of animosity out of
discussion." I am not sure why Peter sees this as something that
is worth doing. I can't see that there would be any point to having
a de-animated , or un-animated discussion. Why would anyone
chose to engage in a discussion that in effect is dead. From the
standpoint of control theory-- which is a theory of living systems, I
think it makes sense rather to have _very_ animated discussions.
And, the description " _very_ animated discussion" would seem
to be nearly identical to "potentially valuable" discussions-- that is
discussions in which crucial ideas are being examined in ways
that may have fundamental consequences. Unavoidably such
discussions are likely to involve the possibility that either or both of
the parties is going to be revealed to be mistaken or in some way
confused. And, in a context in which the discussion is perceived in
terms of a dominance contest (or game) neither party is going to be
eager to concede to having made a mistake or to having been
ignorant, or to having been confused. Doing so would involve, in
terms of how the context is being defined, an admission of inferiority.

Peter sees in the construct of Johari Windows a way to soften the
character of discussion by modifying the context of discussion from
one of "attacking [the opposition's] knowledge in a general way" to
a more limited discussion. And, potentially I think I agree with Peter
that this is one of the ways that the Windows conception could be
used. However, I think that if a move in this direction is going to be
made in this direction what is required is a slight modification in the
categories involved. Instead of the matrix being known/un-known the
segmentation could be respect/dis-respect, or agreement/
dis-agreement. Then a harmonious discussion might be conducted
concerning a limited area of dis-agreement within a larger context of
dis-agreement. And, if this is what Peter has in mind, I would agree
that conducting discussions about limited issues concerning which
there are dis-agreement in a wider context of mutual respect is one
way that that the character of a discussion can be controlled. When
the threat that the discussion poses is reduced from a "winner takes
all" to a more limited issue of a minor point of dis-agreement with a
much more significant context of agreement such a change will, of
course, change the character of the discussion.

Quite often the issue of the "character" of discussion is framed in
terms of a distinction between the constructive and destructive
aspects of discussion. The constructive aspects ordinarily being
defined in terms of coming to agreement and an increase in mutual
respect, and the destructive aspects being an increase in
dis-agreement and/or a decrease in mutual respect. However, I am
not sure that this familiar way of thinking about the values involved
in a discussion is necessarily useful. And, it may be fundamentally
misleading. Bjorn has, in recent posts, insisted upon the importance
of an attitude or cognitive orientation for which he uses the term
respect. And, I have pointed out, in the not too distant past that sanity
is at least in part a matter of being able to see an opponent in terms
both of strengths and weaknesses. In my own lexicon, seeing an
opponent this way is a matter of treating an opponent with respect.
So, I would hope that Bjorn would continue his discussion of what he
means by his use of the term "respect."

Recent discussions on the CSGnet, however, have not been carried
on in terms that are either constructive nor respectful-- in the sense of
mutual positive regard. Bill Powers, in his recent claim that
I had never made a single substantive contribution in terms of the
application of control theory, Rick Marken, in his claim that I didn't
understand anything, and David Goldstein, in his claim that my facts
were all wrong, illustrate what can happen when a
discussion develops in a way such that both dis-agreements increase
and mutual respect decays. In street argot, they lost their "cool" and
made fools of themselves. Each of them has stated, in various ways,
that they were unable to control their own behavior in ways consistent
with their larger or higher level goals. In a physical fight the loss of
your
"cool" involves a loss of technique and almost always a defeat-- a
defeat in which there is no ambiguity concerning who won and who lost.
In an intellectual contest, the question is not so clear cut, and the loser
almost always has the option of claiming a victory of some sort and
ignoring the humiliation of having experienced a loss of control in public.

But, this recent history of discussions on the CSGnet while connected
to the potential understandings that the windows concept might provide
is a matter that is not directly connected to the issues that Peter is now
raising. Despite his reference to the Windows approach as a way of
decreasing the animosity of a discussion, and avoiding an all out
"general" attack upon an opponent in discussion, it appears to me that
Peter's argument does amount to a "Williams has his facts, or whatever,
all wrong." But, I will reserve judgment on this for the moment."

So, to return to the a more direct consideration of the issues that Peter
raises...... he says,

Let me start with Bill Williams, who wondered "What do others know
about me that I don't know?"

The first thing I'd point out in Bill's 'blind" window pane would be
his self-confessed unfamiliarity with "Complexity theory".

I was being polite and avoiding making an immediate attack upon a
tradition that Peter is asserting has a fundamental contribution to make
in understanding economic phenomena. Being dis-ingenious in this
way should have allowed Peter to present the contribution which
complexity theory makes to an understanding of behavior-- economic
behavior included. Instead, Peter seems more interested in exposing
my supposed "ignorance." If Peter finds my "ignorance" more interesting
than the positive merits of complexity theory this may say something
either about Peter or complexity theory.

This is a

fine example of the blind men and the elephant. It is inconceivable
to me that anyone can claim to understand economics without having an
appreciation of the wider picture - which can only be understood
completely in terms of complexity theory.

OK. I would be interested in precisely what it is about economic phenomena
that can only be understood in terms _only_ of complexity theory. Is there
some anomalous phenomena that complexity theory explains?

To disdainfully dismiss it as irrelevant is the height of folly.

So, I am a fool. I've been called other names. The one I like best was
when Powers referred to me as the "Almightily."

Note that in attacking me for my skepticism regarding complexity
theory Peter is also calling Bill Powers a fool as well. Powers
animosity in regard to complexity theory far exceeds my own rather
mild skepticism. If Peter can show me something useful that complexity
theory can do in regard to economic theory-- well then more power to him.
It should be noted that one of Powers' recent criticisms of me involves
his confusion that I am an _advocate_ of complexity theory.

Secondly, I would point to Bill's insistence, that profit has a value
of zero in a transaction. This seems to expose a serious flaw in his
thinking - unless he is using it as a deliberate red herring.

I stand by my assertion. profit defined as accountants, and Rick Marken
too, define the term is the difference between sales and costs is in the
aggregate equal to zero.

I think Bill must be confused by the fact that, in a transaction,
both sides must view the transaction as beneficial.

Whatever my confusions, this has nothing at all to do with the argument
about monetary profit.

A twisted logic

might argue that, as neither side lose anything, neither could be
gaining (i.e., nobody making a profit).

This comment doesn't have anything to do with the accounting.

But, a familiarity with Game Theory sees transactions in terms of
zero sum and non-zero sum games. In zero sum games, one side can only
profit if the other side loses (gains and losses add up to zero - as
in most gambling games). However, practically all transactions come
under the category of non-zero sum games, where both parties gain
from the transaction.

This is not true of the account of monetary flows-- see the extensive
consideration of this issue by Morris Copeland almost fifty years ago.

To suggest that neither side can gain (make a

profit) out of non zero sum transactions is clearly ludicrous.

It is clear to Peter, but then Peter doesn't know what he is talking about.

It is only extreme, left wing circles that sees business activity in
terms of zero sum games - where it is common to think that an
employer's profit must be at the expense of the employees.

Peter seems to be of the opinion that raising the issue of "extreme,
left wing circles" is an argument. But, I will agree everyone that wishes
to avoid an extreme left-wing economics can agree with Peter and the
issues involved can be regarded as conclusively settled. But, then
Peter should explain to Bill Powers how Powers got it wrong when he
briefly confused me with Joe McCarthy.

Marx in the first volume of his _Capital_ makes an argument that over
time PROFITS WILL FALL TO ZERO, and then capitalism will collapse.
My argument is, more extreme-- I am proudly far to the left of the
Marxists, what I quite seriously assert is that profits in the aggregate
have, and can never be, anything else than zero. If you understand
accounting this relationship should be obvious.

Peter, when he is being practical understands this-- as his comments
on Keynesian policy indicate.

Peter should explain where he thinks a capitalist's profits come
from. In expounding his explanation it would be helpful if he would
avoid equivocation.

A few years ago I wrote a dialogue to explain how non zero games
allow both side to benefit:

I have looked at the dialog, but I don't see how Peter's dialog explains
the supposed existence of aggregate monetary profits. Money is one
thing BTU are quite another thing. Peter's dialog is a massive exercise
in equivocation. For a very similar exercise that was carried on between
Joan Robinson and allies against orthodox economic theory see
Geoff Harcourt's book _Capital Controversies_.

Toward the end of Peter's dialog he says, that capitalism isn't about
a struggle for existence between employers and employees instead it
is about businessmen

benefiting and helping [consumers and employees] satisfying their needs.

I would advise people to read Adam Smith's statement that we ought not
to look to the altruistic motives of the "baker, the butcher or the
candlestick maker" to obtain what we need. Smith's whole system was based upon explaining how self-interest provided the motive, a dependable motive, for commerce. When I try to think about Bill Gates in terms of "benefiting" me
I gag.

And, Peter says that I am the one with the ludicrous ideas!

Still, as Bjorn would say,

p = (ke* ko *r + kd * d )/ (1 + ko* ke)

Bill Williams

From[Bill Williams 4 March 2004 11:30 AM CST]

[From Rick Marken (2004.03.04.0850)]

Rick's in his discussion says two things that contradict each other.
At one place he says, that,

Profit is what I described earlier: the difference between income (I) and
expenses.

However, at another point he describes profits as a wage. And, wages are an expense.

From my perspective, profit (P) is just a wage

We need to pay special attention to the phrase "my perspective." Rick's perspective is as Bill Powers so aptly pointed out in his critique of Ricks H. Econoimus (no I an not going to call it a model) -- a leap in the wrong direction-- a giant leap ...

Legally, an employ can sue an employer to recover wages. Profits are not, in fact, treated as wages. You can not go to court and sue, not succesfully at least in front of a sober judge, for payment of profits. It confuses matters when an attempts are made to treat profits as an expense.

However, Rick also says that,

Composite producer income itself (P'Q') is not called "profit" because there
is no excess of income over expenses.

Rick, not being familiar withe basic principles an nominclature of a capitalist market society is inventing his own lexicon as he goes along. The result is a long term very inefficient exercise in inventing the wheel, if the fumbling process in fact ever gets around to re-inventing the wheel.

Rick is like a visitor to Paris who insists upon making up his own language. And, were Rick to actually visit Paris and do so, I am sure that the Parisians would find his naivite fancinating.

As Bjorn would say,

p = (ke* ko *r + kd * d )/ (1 + ko* ke)

Bill Williams

From[Bill Williams 4 March 2004 3:40 PM CST]

[Martin Taylor 2004.03.04.0953] in commenting upon

remarks by Peter Small that,

>[From Peter Small (2004.03.04)]

who argues that,

To suggest that neither side can gain (make a
>profit) out of non zero sum transactions is clearly >ludicrous.

However, _in the aggreegate_ and this is what Keynes is talking about,
profit defined as monetary income minus monetary expense is necceesarily
zero. And, when banks create money, they also create debt-- so the net
effect, again in the aggegate is zero. When the government prints money
some people argue that the net effect upon real wealth is zero. And, it
is also argued that it makes sense to treat currency as being simultaneously
an assest and a liability. If this is true the net effect of printing money
is zero.

But, there is a massive habituation to transfer what has been experienced in
micro terms into a macro context. Thus it becomes very difficult to accept
that in Macro accountting of the economy income is equal to expenses. And,
the denial that in a macro context that profit defined as income minus
expenses can be anything other than zero often is experienced as a denial of
the entire basis of a capitalist market economy. And, this is a massive
disturbance. The argument that "God is dead." is now old hat. But, the
argument that following Keynes it is possible to see that in a Macro context
profits are always zero is one that is so novel that you can expect to be
charged with all sorts of things-- including being an extreme left-wing,
academic. Maybe before my time is up, the understanding of this
relationship will become more widely understood, widely understood so that I
will experience a disapointment at no longer being able to generate the sort
of disbelief that Peter expressses. Far from being a "conventional
economist" as Rick Marken has frequently charged, I am proud to be way to
left of good old Karl.

Martin, I think makes good sense when he says,

There is a distinct possibility here of launching into
another
fruitless argument based on the use of the same word > to mean two
quite different things.

And, I endorse what he says,

Bill Williams talks ONLY about money, and in the aggregate. If (and
only if) there is no creation or loss of money in a closed economy,
then it is a logical necessity that the overall net profit from all
transactions is zero.

And, his point is well taken, when he says,

Please, let's not get into a another pointless kerfuffle based on
failure to notice that the words "profit" (like most words in any
natural language) has more than one meaning.

As Bjorn would say,

p = (ke* ko *r + kd * d )/ (1 + ko* ke)

Bill Williams

[From Bill Powers (2004.03.041552 MST)]

Martin Taylor 2004.03.04.0953 --
Rick Marken (2004.03.04.0850) --

[Martin] Please, let's not get into a another pointless kerfuffle based on
failure to notice that the words "profit" (like most words in any
natural language) has more than one meaning.

Excellent suggestion. In Econ004 there is no variable called "profit," but
there are two classes of consumers: one works for a wage, the other
receives capital distributions without working (for a wage). In the latter
class, we have people like shareholders who receive dividends, pensioners,
renters of equipment and other property, recipients of royalties, and
owners of enterprises, the last receiving a part of the income of the
aggregate producers just because they are the owners. That last quantity
is, I think, what is normally thought of as profit.

The money that goes into capital distributions comes from sales of whatever
the product is, goods or services. Some of this gross income is spent on
upkeep/expansion of the plant and purchase of raw materials, which means
only that it goes to wages for those consumers who do that kind of work.
The rest of the money is divided among the other wage-earners and the
receivers of capital income, among whom are the owners whose share is
called profit.

Clearly, it is necessary to set the average price of the plant's output so
that while it is being sold, there is enough money coming in to meet all
the expenses outlined above. We could include a certain level of continued
borrowing (excess over repayments, that is) in the aggregate plant's
income, which somewhat reduces the price that must be set.

All the money that is paid out becomes buying power in the hands of
consumers, giving them a claim on the output. It is necessary that the
productivity of the workers be such that all consumers can receive their
respective shares of the total cost of production and spend it on the
product, while only a fraction of the consumers work to create the products
that are bought and sold. This shows up very clearly in Econ004 -- if
anyone demands too large a share of the product, the money accumulates
uselessly in one part or another of the system, and some sector finds its
consumption declining inexorably to zero. At that point the model should
stop, because a good part of the agents in it are dead. There is, however,
a considerable region over which the system will work, although there are
limits.

In this model, there is no need to give profit any special status. It is
simply capital income diverted to owners, supplied out of total producer
income. Econ004 does not yet contain any mechanism for negotiating how the
income of the producers is to be apportioned, so the capital income sector
simply receives whatever is left over after the plants' and the
wage-consumers' requirements are met. In effect,the plant managers decide
what fraction of the total will be paid out as capital distributions, and
by that means they keep the plant financially afloat. In a more realistic
form of the model, those who determine or strongly influence that fraction
would probably be among the recipients of capital income, some of whom (the
owners, certainly, but also investors) have a strong say in how the plant's
income is to be distributed. They give the managers the relevant reference
levels, and do so, presumably, in a way that furthers their own interests.
I think it will become possible to see just what policies would in fact
further their interests. Clearly, if they diverted all of the plant's
income to their own share of the total, the system would fail and they
would end up with nothing. So they have a tricky problem of extracting as
much as they can, but not so much as to kill the goose.

There are many interlocking causal pathways in this model, and about the
only way to predict what the final result will be is to run the model. A
lot of work remains to be done before we can be sure we have it all right.
Profit is just one variable among many that have to be considered.

Best,

Bill P.

From[Bill Williams 4 March 2004 5:50 PM CST]

[From Bill Powers (2004.03.041552 MST)]

Martin Taylor 2004.03.04.0953 --
Rick Marken (2004.03.04.0850) --

>[Martin] Please, let's not get into a another pointless kerfuffle based

on

>failure to notice that the words "profit" (like most words in any
>natural language) has more than one meaning.

While Powers approves of Martin's request, he goes on to say that there
are two income categories in in his model, workers income, and capital
income. Then he says,

Clearly, it is necessary to set the average price of the plant's output so
that while it is being sold, there is enough money coming in to meet all
the expenses outlined above.>

I would agree that "clearly" if workers do not receive wages that it is
reasonable
to assume that the work they do won't get done. And, it can therefore be
said
that prices must cover the wage bill.

However, it is not nearly so clear that "it is necessary" that payments to
capital
income are "necessary" in the same sense. If the plant does not create an
income flow for the owners of capital, would this in any way what so ever
change
the nature of the physical capital, or hinder the output of a plant in any
physically
causal sense ? Unless you believe in magic the answer is no. So, it is not
at
all "clear" as Bill Says that prices must be set to "cover" capital costs
inorder
for production to be carried on.

Some unexamined assumptions apparently are being built into the Test Bed
model.
And, this is what you would expect when Bill Powers set out to revolutionize
a
field in a self-imposed intellectual isolation. This doesn't mean that the
absurdities
such as charging Keynes with an intellectual blunder in regard to the
accounting
identities of investment and savings might not get sorted out, but the
p;rocesses is
terribly inefficient-- even if it eventually generates a useful product--
which is at this
point is doubtful.

The main product of this effort, the only really visible product, has been
an ignorant
attack upon Keynes. An attack any modestly informed student of economics can
easily recognize as being absurd.

Bill Williams

[From Peter Small (2004.03.05)]

Bill Williams, Bill Powers and Rick Marken, it seems to me that all
three of you are working with cognitive models that do not accurately
represent what goes on in the real world.

It is a common mistake of left wing thinkers to focus on working,
profitable situations. They then view the wealth created in terms of
the "tragedy of the commons". What is missing from your models is the
element of risk.

Not all businesses are profitable all the time. Some never become
profitable. Somebody has to bear the cost of these losses. Where do
you think the money will come from if the risk takers are not
compensated for this risk?

One of the cornerstones of finance is the concept of discounting for
risk. Wages don't have to be discounted for risk because they are
paid on the basis that they are independent of the profitability of
the business. But, somebody has to cover that risk and they will not
unless it is profitable to do so. In other words, investors are very
similar to insurers: they remove the element of risk. But, would you
expect an insurance company to cover risks without making a profit?

(And please don't tell me there is no such thing as profit. This is
not a group discussing balance sheets. You all know that what I'm
talking about is a surplus of wealth that can be created in a
business situation).

It is here where the concept of complexity becomes useful because it
enables you to see business in terms of a dynamic environment, where
profit and stability are neither guaranteed nor permanent.

Complexity is the name given to dynamic situations where the
variables are mutually dependent, i.e., where if one changes it has a
knock on effect on all the others. Here there are non-linear
relationships. By definition, a dynamic complex situation is too
complex to be amenable to logical analysis. It is therefore
unpredictable.

The paradox of complexity theory is that, unlike most other theories
that allow you to make predictions, complexity theory tells you
specifically that *you cannot make predictions*. This is anathema to
control theorists.

The value though, is that complexity theory enables you to
concentrate upon strategies and solutions that allow for
unpredictability. In other words, it throws the emphasis onto
probability and risk.

The great insights that Keynes brought to economic thinking was his
appreciation of the instabilities inherent in economies. He had an
appreciation of complexity theory before it was even named.

The breakthrough that came out of complexity theory was the idea that
a dynamic, complex system does not last for very long in a state of
instability, it quickly settles down into a steady state (something
to do with a system always finding a level where a minimum of energy
is lost).

However, dynamic complex systems have many possible different steady
states they can settle into. A change in some crucial variable can
cause a dynamic complex system to become unstable (act chaotically),
then quickly settle down again - but into a new steady state, which
can cause the system to act quite differently.

Often this change of state is called a 'phase transition'. It is
impossible to explain exactly how they take place, but often causal
factors can be identified. Keynes identified one of these causal
factors in the economy that he called "an accelerator". This can
occur when money is put into the economy by the Government to provide
employment. The wages spent by these newly employed workers provides
the cash flow to give others work. Their wages give even more people
work and so on, so that there is a domino effect in the form of an
exponential change that causes the economy to flip over into a new
steady state where there is full employment.

Of course, when there is full employment, there is always the danger
that this domino effect can act in reverse and cause the economy to
go into a new steady state where there is excessive unemployment. The
government's strategy has to be to keep the system in the fully
employed state, but, as this is potentially unstable, some level of
unemployment is tolerated to allow some scope for making corrections.

Complexity theory is also a help in creating strategies to cope with
continuous instability - such as in the information technology
sector. This area is in a continuous state of change because of the
inherent exponentials (computer memory, storage and speeds are rising
exponentially, the number of people using the Internet is rising
exponentially, Web sites are rising exponentially, information is
rising exponentially).. This calls for investment strategies that are
quite different from those used in more stable industries (see
http://www.stigmergicsystems.com/stig_v1/stigrefs/stigfinance/index.html?
)

As you might realize, controlled systems may be useful in stable,
local environments, but they must be viewed as temporary solutions
that are subject to uncontrollable and unpredictable changes to the
total environment. They should always be designed with flexibility
and redundancy in mind.

Without having a cognitive framework that includes the concept of
dynamic complexity and chaos, controlled systems are very hit or miss
affairs.

Peter Small

Author of: Lingo Sorcery, Magical A-Life
Avatars, The Entrepreneurial Web, The
Ultimate Game of Strategy and Web
Presence
http://www.stigmergicsystems.com

···

--

[Martin Taylor 2004.03.05.10.00]

[From Peter Small (2004.03.05)]

Bill Williams, Bill Powers and Rick Marken, it seems to me that all
three of you are working with cognitive models that do not accurately
represent what goes on in the real world.

I can hardly think of a more inflammatory comment that could be made
on this mailing list, which is predicated on the concept that
perceptual control is the only effective model of what really goes on
in the real world!

It is a common mistake of left wing thinkers to focus on working,
profitable situations. They then view the wealth created in terms of
the "tragedy of the commons". What is missing from your models is the
element of risk.

When I hear the term "left-wing" or "right-wing" introduced into a
discussion, I also envisage blinkers being put on. It suggests an
ideological commitment inappropriate to a scientific discussion,
whether or not that commitment is made manifest overtly.

Not all businesses are profitable all the time. Some never become
profitable. Somebody has to bear the cost of these losses. Where do
you think the money will come from if the risk takers are not
compensated for this risk?

The perception of risk is among those that can be controlled at some
desired level.

One of the cornerstones of finance is the concept of discounting for
risk.

That seems to arise naturally out of the interactions among control
systems, at least one of which is controlling the perception of risk.
Perceptions of future costs, possibilities, worst-case scenarios...
are all controllable perceptions.

(And please don't tell me there is no such thing as profit. This is
not a group discussing balance sheets. You all know that what I'm
talking about is a surplus of wealth that can be created in a
business situation).

One of the problems with this discussion is that "profit" is usually
thought of as taking in more MONEY for something than the money it
cost to acquire it in the first place. I think you are putting the
profit in the other side of the counter-flow -- in the increased
perceived VALUE of the state of the world to the participants after
the transaction as compared to before it.

To argue the merits of either use of the term is a mug's game, but to
refute an argument based on one usage because you prefer another
usage is worse than comparing apples and oranges. They, at least, are
both fruit.

The paradox of complexity theory is that, unlike most other theories
that allow you to make predictions, complexity theory tells you
specifically that *you cannot make predictions*. This is anathema to
control theorists.

No it isn't. It's what arises naturally when many control systems interact.

The breakthrough that came out of complexity theory was the idea that
a dynamic, complex system does not last for very long in a state of
instability, it quickly settles down into a steady state (something
to do with a system always finding a level where a minimum of energy
is lost).

That really does depend on the attractor systems inherent in the
complex dynamic. It is my belief that such systems in nature usually
evolve to lie on the edge of a chaotic regime, and that includes
evolving systems of interacting control systems. The sand-pile is a
great metaphor. I invoked it about 10 years ago to describe how the
control hierarchy described as "HPCT" would evolve, and mapped the
stages of the sandpile avalanche onto the psychological stages often
associated with catastrophe (which, technically, the avalanche can
be).

There was a note in either Sceince or Nature in the last few weeks
that argued that the edge of chaos was where systems display both the
greatest robustness and the greatest fragility. I don't have the
reference on hand, but I might be able to dig it up if people want.

If it interests you, I've just recently put on my Web site one
presentation I made in 1993 that incorporates this discussion. This
page covers the avalanche idea, which I called "The Bomb in the
Hierarchy": <http://www.mmtaylor.net/PCT/DFS93/DFS93_8.html>

However, dynamic complex systems have many possible different steady
states they can settle into. A change in some crucial variable can
cause a dynamic complex system to become unstable (act chaotically),
then quickly settle down again - but into a new steady state, which
can cause the system to act quite differently.

Yes, I've mentioned on CSGnet in the past some of our old experiments
with very small randomly connected neural nets. We found that with a
net of only 8 nodes, without changing any of the physical parameters,
the net might have as many as five completely different behavioural
modes ranging from a point attractor through two quite different
periodic orbits to two different chaotic modes, and the behaviour
might sometimes be switched from one mode to another by the inut of a
single impulse.

Often this change of state is called a 'phase transition'.

I think that's a somewhat different phenomenon. Changes in coupling
constants can cause phase transitions, but that's not quite the same
as the behaviour of an unchanged system shifting into a new stable
state because the new stable state where the dynamic of the system
leads its orbit.

As you might realize, controlled systems may be useful in stable,
local environments, but they must be viewed as temporary solutions
that are subject to uncontrollable and unpredictable changes to the
total environment. They should always be designed with flexibility
and redundancy in mind.

I don't think "designed" is the right word to apply to evolving
systems. Bill Powers has always asserted that the alteration of
control structures to accommodate the real world usually cannot be
designed. The effects of structural changes has to be explored by the
system as a whole. The colloquial term often used to describe this
process is "e-coli learning".

Without having a cognitive framework that includes the concept of
dynamic complexity and chaos, controlled systems are very hit or miss
affairs.

An insight that has not been lacking in the PCT world, though it is
often ignored because much of the simulation and experiment is done
on much simpler systems.

Martin

[From Rick Marken (2004.03.05.0750)]

Peter Small (2004.03.05)

It is a common mistake of left wing thinkers to focus on working,
profitable situations.

I like to think of myself as a control theory thinker.

They then view the wealth created in terms of the "tragedy of
the commons". What is missing from your models is the
element of risk....

You had said [Peter Small (2004.03.04)] that it's a mistake to "think that
an employer's profit must be at the expense of the employees." I gave a
quantitative explanation of why I thought this was _not_ a mistake (Rick
Marken (2004.03.04.1630). You apparently think it still is a mistake but you
don't tell me what's wrong with my analysis. All you say is that complexity
theory is great. I'd rather hear what's wrong with my analysis. If there is
a finite amount of income at any instant, how can increasing someone's share
of that income not decrease someone else's share?

Oh, and please don't think that Bill Powers, Rick Marken and Bill Williams,
are in any way the same on any dimensions relevant to this discussion group.
One of these three is so flagrantly deviant from the other two that it's
like taking about the similarity between Isaac Newton, Albert Einstein and
Brittney Spears.

Best regards

Rick

···

--
Richard S. Marken
MindReadings.com
Home: 310 474 0313
Cell: 310 729 1400

[From Peter Small (2004.03.05)]

[From Rick Marken (2004.03.05.0750)]

You had said [Peter Small (2004.03.04)] that it's a mistake to "think that
an employer's profit must be at the expense of the employees." I gave a
quantitative explanation of why I thought this was _not_ a mistake (Rick
Marken (2004.03.04.1630). You apparently think it still is a mistake but you
don't tell me what's wrong with my analysis. All you say is that complexity
theory is great. I'd rather hear what's wrong with my analysis. If there is
a finite amount of income at any instant, how can increasing someone's share
of that income not decrease someone else's share?

Sorry Rick, I though my previous post had given you this answer.

From a balance sheet point of view, you are correct, whatever is
taken by the employer leaves less for the employees. But, this is not
the mistake I meant. The mistake is thinking about it in this way.
Employers are not taking money that belongs to the workers, they are
just taking their share of the wealth that is created by their joint
activity.

This is best explained by the concept of *inclusive fitness*.
Evolutionary biologists assign two values of fitness to individuals
within a group. One is the individual fitness that is normally
associated with a person in isolation. The second is called
*inclusive fitness*, which is a measure of how much value an
individual boosts the value of everyone else when working in a group
situation.

Clearly, the total benefit value of working together as a group is
the sum total of all the inclusive fitness values. The question is,
"How should this be shared out?"

Now look at everybody's expectations in terms of PCT. If the
expectations of the workers was such that they acted to reduce the
amount that went to the employer/investor, the share to the
employer/investor might fall below the employer/investor's
expectation. This expectation wouldn't be based upon a particular
share of the pot, but would be based upon what their contributions
(organization and capital) might return by working with a different
group.

This is no different for the workers. They will not be thinking about
what share of the pot they will get, they will be comparing what
wages they get from this group with what wages they might be getting
by working with another group.

See if you can put your formulae to work on this conceptualization.

Peter Small

Author of: Lingo Sorcery, Magical A-Life
Avatars, The Entrepreneurial Web, The
Ultimate Game of Strategy and Web
Presence
http://www.stigmergicsystems.com

···

--

[From Bill Powers (2004.03.05.1210 MST)]

Peter Small (2004.03.05)--

It is a common mistake of left wing thinkers to focus on working,
profitable situations. They then view the wealth created in terms of
the "tragedy of the commons". What is missing from your models is the
element of risk.

It is amazing how quickly some organized systems of thought can reveal
themselves to be uninteresting, just through casual comments dropped by
their proponents. I appreciate the early opportunity to absent myself from
this particular ad-hominem "discussion."

Best,

Bill P.

From[Bill Williams 5 March 2004 3:20 PM CST]

[From Rick Marken (2004.03.05.0750)]

Peter Small (2004.03.05)

> It is a common mistake of left wing thinkers to focus on working,
> profitable situations.

I like to think of myself as a control theory thinker.

////////// Bill Powers likes to think of Rick as a guy who makes giant
///////// leaps in the wrong direction. Pay special attention to Bill's
//////// critique of Rick's assertions regarding a PCT correct analysis
//////// in a post later today.

> They then view the wealth created in terms of the "tragedy of
> the commons". What is missing from your models is the
> element of risk....

You had said [Peter Small (2004.03.04)] that it's a mistake to "think that
an employer's profit must be at the expense of the employees." I gave a
quantitative explanation of why I thought this was _not_ a mistake (Rick
Marken (2004.03.04.1630). You apparently think it still is a mistake but

you

don't tell me what's wrong with my analysis.

////////// Peter don't be tempted to fall for this. Rick really isn't
interested in
//////// in what is wrong with his analysis. Rick doesn't even listen to
Billl
//////// Powers' explainations of Rick's mistakes. So, I wouldn't spend
any
////// time on Rick's stuff. He can generate nonsense much faster than
it
//// can be figured out.

Oh, and please don't think that Bill Powers, Rick Marken and Bill

Williams,

are in any way the same on any dimensions relevant to this discussion

group.

One of these three is so flagrantly deviant from the other two that it's
like taking about the similarity between Isaac Newton, Albert Einstein and
Brittney Spears.

/////// Yes, Rick in this assertion is entirely correct. There is a real
difference
/////// between two of the group and the third member. Now, Bill Powers
///// describes Rick's work in terms of "Giant leaps in the wrong
direction."
///// Sadly I have to agree. No one I think would compare Rick to
either
////// Albert Einstein or Isac Newton, but then would anyone compare him
to
////// Britiany Spears? I don't think so.

Bill Williams

I thought Rick was under the mistaken impression that he was some soft core
slut.

Bill Williams

···

----- Original Message -----
From: "Richard Marken" <marken@MINDREADINGS.COM>
To: <CSGNET@listserv.uiuc.edu>
Sent: Friday, March 05, 2004 9:51 AM
Subject: Re: Economics- a discussion through Johari Windows

[From Rick Marken (2004.03.05.0750)]

Peter Small (2004.03.05)

> It is a common mistake of left wing thinkers to focus on working,
> profitable situations.

I like to think of myself as a control theory thinker.

[Peter Small 2004.03.06]

[Martin Taylor 2004.03.05.10.00] wrote:

I can hardly think of a more inflammatory comment that could be made
on this mailing list, which is predicated on the concept that
perceptual control is the only effective model of what really goes on
in the real world!

Perceptual control is fine in two-person situations but becomes
vulnerable to chaotic instability if more than two people are
included in the same model. You can soon see this effect if you try
to use the elastic band example with three or more people each trying
to control the movements of the others.

The current thread "Zero Sum Economics" is evidence enough that
perceptual control is not a suitable model to represent real world
situations. There are dynamic effects that completely override
perceptual control. Bill Powers intimated this when he wrote:

[From Bill Powers (2004.03.05.2115 MST)]
It's very hard to do justice to all these relationships using words.

Increasing profit will leave less to pay to workers, with a finite amount
of money available. That is quite correct. But lowering the pay of workers
will reduce their ability to satisfy their needs by buying goods and
services, which will reduce the income of the producer and increase errors
in both consumer and manager control systems. If the profits were adjusted
by changing the fraction of total income devoted to profit distributions,
the reduction of producer income will reduce the profits during the
following iterations of the simulation. It will also cause further
reductions in the wage payments. What the ultimate effect will be is not,
to say the least, self-evident.

[Martin Taylor 2004.03.05.10.00] wrote:

The perception of risk is among those that can be controlled at some
desired level

That seems to arise naturally out of the interactions among control
systems, at least one of which is controlling the perception of risk.
Perceptions of future costs, possibilities, worst-case scenarios...
are all controllable perceptions.

Risk is an assessment of probability. Probability is determined by
the uncontrollable and unpredictable disturbances of the system (from
internal and external sources). So, I don't see how perception of
risk can be considered controllable. Perhaps you could enlighten me
here?

[Martin Taylor 2004.03.05.10.00] wrote:

I don't think "designed" is the right word to apply to evolving
systems. Bill Powers has always asserted that the alteration of
control structures to accommodate the real world usually cannot be
designed. The effects of structural changes has to be explored by the
system as a whole. The colloquial term often used to describe this
process is "e-coli learning".

"Designed" is a good a word as any, although "Strategy" might be more
appropriate. However, Bill Powers was talking about the PCT control
structures when he says they cannot be altered to accommodate the
real world. He is right. But, I'm not referring to the PCT control
structures; I'm referring to the design of the complete system.

It may seem paradoxical, but although you cannot predict how a
dynamic complex system will behave, you can control it to behave in
the way you want it to behave. The basis of this control is to
"design" a system that lives on the edge of chaos and "design" ways
in which it can be disturbed. The "design" should be such that it
includes a mechanism to ensure that disturbances only take effect if
they result in the system performing more efficiently. This is the
basis of biological evolutionary progress - and is the kind of design
strategy that I'm advocating on my Web site.

I think you must be aware of this distinction, because of how you
responded to the last paragraph of my post:

[Peter Small 2004.03.05.10.00] wrote:

Without having a cognitive framework that includes the concept of
dynamic complexity and chaos, controlled systems are very hit or miss
affairs.

[Martin Taylor 2004.03.05.10.00] responded:

An insight that has not been lacking in the PCT world, though it is
often ignored because much of the simulation and experiment is done
on much simpler systems.

In view of the many misunderstandings, perhaps my inclusion in this
discussion group is not appropriate. The control systems I am
considering are using concepts that are quite different from those
used in designing PCT control structures.

Peter Small

Author of: Lingo Sorcery, Magical A-Life
Avatars, The Entrepreneurial Web, The
Ultimate Game of Strategy and Web
Presence
http://www.stigmergicsystems.com

···

--

From[Bill Williams 6 March 2004 12:10 PM CST]

[Peter Small 2004.03.06]

>[Martin Taylor 2004.03.05.10.00] wrote:
>
>I can hardly think of a more inflammatory comment that could be made
>on this mailing list, which is predicated on the concept that
>perceptual control is the only effective model of what really goes on
>in the real world!

Perceptual control is fine in two-person situations but becomes
vulnerable to chaotic instability if more than two people are
included in the same model. You can soon see this effect if you try
to use the elastic band example with three or more people each trying
to control the movements of the others.

The question of instablity depends upon the characteristics of the people
involved. And, the two person case is also subject to instablity.

The current thread "Zero Sum Economics" is evidence enough that
perceptual control is not a suitable model to represent real world
situations.

What ever is Peter talking about-- "real world situations." Ordinarily
evidence and argument are presented before conclusions, but Peter's
logic presents continual surprizes.

There are dynamic effects that completely override perceptual control.

One can see why Powers quickly came to the conlusion that Peter wasn't
worth talking to. Given the value that I think Bill Powers ought to place
on
his time I think his judgement was the correct one for him to make.

Bill Powers intimated this when he wrote:

>[From Bill Powers (2004.03.05.2115 MST)]
>It's very hard to do justice to all these relationships using words.

I am sure Bill Powers never intended this to be read as "intimating"
anything
of the sort.

Peter goes on th say,

[Martin Taylor 2004.03.05.10.00] wrote:

>The perception of risk is among those that can be controlled at some
>desired level
>
>That seems to arise naturally out of the interactions among control
>systems, at least one of which is controlling the perception of risk.
>Perceptions of future costs, possibilities, worst-case scenarios...
>are all controllable perceptions.

Risk is an assessment of probability. Probability is determined by
the uncontrollable and unpredictable disturbances of the system (from
internal and external sources). So, I don't see how perception of
risk can be considered controllable. Perhaps you could enlighten me
here?

[Martin Taylor 2004.03.05.10.00] wrote:
>
>I don't think "designed" is the right word to apply to evolving
>systems. Bill Powers has always asserted that the alteration of
>control structures to accommodate the real world usually cannot be
>designed. The effects of structural changes has to be explored by the
>system as a whole. The colloquial term often used to describe this
>process is "e-coli learning".

"Designed" is a good a word as any, although "Strategy" might be more
appropriate. However, Bill Powers was talking about the PCT control
structures when he says they cannot be altered to accommodate the
real world. He is right. But, I'm not referring to the PCT control
structures; I'm referring to the design of the complete system.

It may seem paradoxical, but although you cannot predict how a
dynamic complex system will behave, you can control it to behave in
the way you want it to behave. The basis of this control is to
"design" a system that lives on the edge of chaos and "design" ways
in which it can be disturbed. The "design" should be such that it
includes a mechanism to ensure that disturbances only take effect if
they result in the system performing more efficiently. This is the
basis of biological evolutionary progress - and is the kind of design
strategy that I'm advocating on my Web site.

I think you must be aware of this distinction, because of how you
responded to the last paragraph of my post:

[Peter Small 2004.03.05.10.00] wrote:

>>Without having a cognitive framework that includes the concept of
>>dynamic complexity and chaos, controlled systems are very hit or miss
>>affairs.

Peter has yet to present a definition of what all this stuff means.

[Martin Taylor 2004.03.05.10.00] responded:

>An insight that has not been lacking in the PCT world, though it is
>often ignored because much of the simulation and experiment is done
>on much simpler systems.

In view of the many misunderstandings, perhaps my inclusion in this
discussion group is not appropriate.

Perhaps, perhaps not. So far you have made some claims, some of which
were mistaken, but so far you haven't shown us a "mousetrap."

The control systems I am

considering are using concepts that are quite different from those
used in designing PCT control structures.

If you have a working example of such a system describing what it does
this might be of interest-- particularly if it did something a PCT system
can
not do.

Bill Williams

[From Mike Acree (2004.03.11.1400 PST)]

Bill Powers (2004.03.05.1210 MST)--

Peter Small (2004.03.05)--

It is a common mistake of left wing thinkers to focus on working,
profitable situations. They then view the wealth created in terms of
the "tragedy of the commons". What is missing from your models is the
element of risk.

It is amazing how quickly some organized systems of thought can reveal
themselves to be uninteresting, just through casual comments dropped by
their proponents. I appreciate the early opportunity to absent myself from
this particular ad-hominem "discussion."

I'm inclined to a slight reframing: "It is amazing how quickly conclusions can be reached that some organized systems of thought are uninteresting, just through casual comments dropped by their proponents." Goodness knows, casual comments have been dropped often enough by proponents of PCT that would discourage interest in that system (maybe even the remark I'm responding to). I know there's an unwritten rule on the CSGNet calling for rather severe hostility toward newcomers, but you haven't usually taken on that role yourself. Peter obviously struck a nerve, but I, for one, can't tell which variable was being controlled with such high gain. Bill Williams, perhaps more psychologically astute than I, thought it was the label "left wing," but it's hard for me to imagine your taking that as a term of abuse. I'm in no position to defend either Peter or his "system of thought," not knowing either one; but I see no evidence here that he was doing anything other than calling !
attention to an oversight that I've also observed to be common among left-liberal intellectuals, and that appeared to be a feature of your work thus far on economics as well. If anything, I would have taken Peter's reference to left-wing thinkers (he did say "thinkers") as intended to _soften_ the criticism by implying that it was common to a whole group rather than a blunder only you were stupid enough to have made. I think it would be helpful as well as interesting to know what the conspicuously high-gain variable was in this case.

Mike

From[Bill Williams 11 March 2004 5:10 PM CST]

[From Mike Acree (2004.03.11.1400 PST)]

While you comment on Powers' decision to "absent himself
from this particular ad-hominem" discussion generated by
Peter wasn't addressed to me, I like to say that in my view
the adoption of a control theory conception of human behavior
pretty much wipes out what has in the past been the basis for
the Left<>Right categorization in social and economic theory.

Traditional left-wingers usually have neglected the element in
human behavior -- genuine "individual" agency and emphasized
the significance of culture or community. Traditional right-wingers
have, more often than not, emphasized the role of an individualism
that is defined in opposition to culture and community.

From the standpoint of control theory neither of these historical

conceptions is defensible. The traditional left-wing conception of
human behavior depends upon a conception of culture defined in
terms of either behaviorism or some implicit conception that is very
close to behaviorism. The historical right-wing conception of human
behavior might seem closer to a control theory conception, however,
I would think that the capacity of control theory conception includes
the possibility of human beings having a more inclusive scheme of
values than an autistic self-regard as defined by J. Bentham.

I don't object to discussing economics with Peter, and I don't regard
my postings as hostile. Peter claimed that Keynes' position was
"simple" which is a rather novel claim.

That he mis-read what Keynes said, and mis-read Keynes in a way
that is fundamental would appear to contradict his initial claim. Peter's
reading would convert Keynes into a neo-classical economist, which
would a rather radical conversion. Now, Peter says he is disappointed
in my for converting the discussion into a "semantic" quibble. But,
then "semantics" or the meaning of textual passages in this case, is
what translations are largely about. But, Peter is an interesting fellow.

I'm not sure that I would want to make a claim to "psychological
astuteness." My own objection to being categorized as "left-wing
is more a matter of, at least in my own view, my having never been
sympathetic to Marxism, or the conventional notions of collectivism,
or even traditional notions of cultural solidarity.

I won't attempt to categorize here some of the native notions that I
think have characterized traditional right-wing thought that, at least
in my view, might just as well be discarded. Aside that is, from a
frequent assertion that right-winger's seem often to hold--- that
really economic issues are "simple."

I don't myself see anything wrong with pursuing economic issues in
a "high-gain" mode. As long, that is, that the "high-gain mode" is
free from a tendency to abandon critical thinking.

Bill Williams