Economics- a discussion through Johari Windows

[Peter_Small]

From[Peter Small 12 March 2004]

It is interesting that Bill Williams is still insisting that I
misread Keynes on the basis that I used the word "profits", which he
insists has a value of zero.

Even conceding (as he does) that economists use profit in different
ways, his main argument is that Keynes meant "expectation of profit"
rather than "profit"

Lets look at the phrase under dispute:

···

------
All the employers will compete with each other to get as many
employees as possible by offering higher wages than each other. This
they will do until it is no longer profitable to employ any more.
(i.e. Employers will keep competing with each other to employ more
people until they have driven up the amount they are offering in
wages to the point where their total profits start to fall). There
comes a point when it does not pay to hire any more workers and at
this point wages will be at their highest.
------

Not being an economist, it wouldn't occur to me that this was meaning
the entrepreneur is making decisions after events. A commonsense
interpretation would automatically assume this meant "anticipated
profits" and to insist that "expectation" should be explicit rather
than implicit is just plain nit picking.

Bill accuses me of saying that Keynesian economics is simple. In
fact, this is not what I said at all. I said the complex language he
uses to describe his theories are based upon simple conceptual
models. This is what Keynes told us himself in his book and I
provided an exact quotation (and my interpretation of it).

The point is that if you confine yourself to the details of
explanations and don't try to appreciate the underlying conceptual
models, you often miss the big picture, i.e., not see the wood for
the trees.

As I explained in another post, the conceptual models Keynes provides
allow us to combine his theories with other theories (such as Game
Theory). If you are hung up on the details, you are trapped in a
single concept.

Observing the discussions about PCT in this forum, I see this
happening here. People are drilling down into the minutiae of detail
and losing track of the main concept. PCT is is useful as a concept,
but it has very limited value as a stand alone. It has to be combined
with other models for its full value to be realized.

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

--

[Bill_Williams1]

From[Bill Williams 12 March 2004 8:00 AM CST]

From[Peter Small 12 March 2004]

It is interesting that Bill Williams is still insisting that I
misread Keynes on the basis that I used the word "profits", which he
insists has a value of zero.

Peter is fun. But, he is also a bit hopeless. And, he seems to be getting
more confused as the discussion progresses.

He says he finds it "interesting" that I am still insisting the he "misread
Keynes." I don't see what there is that he should find "interesting." I
was
right the first time and I am still right. Peter hasn't shown otherwise.

And, in case there are any doubtsI am still insisting that Peter misread
and then mistranslated Keynes.

Peter in his intrepretation of Keynes' passage in the Gen Th p. 25. in
which
Keynes describes the decisions governing employment in terms of
"expectations."
Peter would give the reader the impression that decisions are being made
based
upon profits. But, this isn't what Keynes wrote. Keynes' clearly stated
that the
employment decision was based upon expectations.

If you leave this out it changes the meaning of the passage, and it changes
the meaning of Keynes' entire position. To leave out "expectations" in
translating the passage from Keynes requires ignoring that Keynes used
the term "expectations half a dozen times on pages 24 and 25. And, it
requires
ignoring the basis upon which the basis his argument thoughout the book.

Even conceding (as he does) that economists use profit in different
ways,

Of course, economists use the term "profit" in various ways. Peter's use of
the description that I "concede" this is misingenous. To say that I am
familiar with several uses and misuses of the term "profit "is a
"concession"
is nonsense.

his main argument is that Keynes meant "expectation of profit"

rather than "profit"

Actually, rather than my argument being a question of "what Keynes meant."
my argument is first of all an argument about what Keynes actually wrote.
But, you have to watch Peter, Peter is good, maybe too good, at equvocation.

And, what Keynes said. _Gen Th_ p. 25 is that entrepreneurs do what they
do based upon their "expectations."

Peter took me to task in a previous post for making an issue of "sematics"
or
what Keynes meant. Since Keynes' uses the term "expectations" it seems
entirely safe to infer, and following that go on to argue that Keynes
meant
"expectations."

Lets look at the phrase under dispute:

Remember this is Peter's mis-translation which leaves out a crucial term,
and
there fore a crucial concept.

------
All the employers will compete with each other to get as many
employees as possible by offering higher wages than each other. This
they will do until it is no longer profitable to employ any more.
(i.e. Employers will keep competing with each other to employ more
people until they have driven up the amount they are offering in
wages to the point where their total profits start to fall). There
comes a point when it does not pay to hire any more workers and at
this point wages will be at their highest.
------

Not being an economist, it wouldn't occur to me that this was meaning
the entrepreneur is making decisions after events.

But, why not?

Entreprenurs _are_ in fact "making decisions after events." One of
Keynes's points was that the economic process takes place "in time" or
you could say in a historical circumstance. Obvious as this may seem it
is an issue that got left out of the neo-classical system. The expectations
are based upon something, but they, and this a point that Keynes returns to
time and again, are making choices about an uncertain future. And, their
decisions
are as Keynes describes the situation based upon their immagination. There
is no
reason to think that these decisions are necceasrily actually going to
result in any
profit. Not in the agreegate in the sense of income less expenses.

A commonsense interpretation

Peter is far from home, if he thinks that "A commonsense interpretation..."
has any meaning at all in economic discussion. The whole point of having
economists is to get away from "commonsense interpretations" that have and
still are failing so badly that it was considered neccesary to have people
around who
think about these things full time.

Peter's is an astonishling naive approach to matters. I am shock, just
throughally
shocked that anyone would propose a resort to "common sense" in regard to
economic issues.

How, completely abusrd.

When things are arlready so very complicated this can only make matters much
worse.

would automatically assume this meant "anticipated
profits" and to insist that "expectation" should be explicit rather
than implicit is just plain nit picking.

I think Peter misses the point about "nit picking." It is like saying, "It
was a fine
airplane-- except for that one bolt."

Peter always wants thing to be "plain and simple." Economics thus isn't
really
suited for Peter. What Peter has done is to convert the Keynesian system
which is based upon expectations back to the orthodox pre-keyensian
system in which economic decisions are based upon maximization. Keynes,
at least in private, was contemptuous of orthodoxy's neo-classical system
based
upon maximization.

Bill accuses me of saying that Keynesian economics is simple. In
fact, this is not what I said at all. I said the complex language he
uses to describe his theories are based upon simple conceptual
models.

However, simple Peter wants to make it, he is missing the distinction
between a system based upon maximization and a system based upon
expectations. Ordinarily when we say something is simple, it is, often
mistakenly, assumed that we understand what we are talking about. This
isn't true in Peter's case when he uses the term "simple."

This is what Keynes told us himself in his book and I

provided an exact quotation (and my interpretation of it).

You provided the "exact quotation" and then you mistranslated the
passage. And, you mistranslated the passagae in a way that
fundamentally distorted the meaing of what Keynes wrote.

The point is that if you confine yourself to the details of
explanations

This is a good argument to use when you ahve demonstrated that you
don't understand the crucial details.

and don't try to appreciate the underlying conceptual

models,

But, the argument only really works if you can demonstrate that you
actually under stand what Peter describes as the "underlying conceptual
models." Peter doesn't appear to understand why Keynes rejected the
othodoxy's principle of maximization as a basis for economic theory.

you often miss the big picture, i.e., not see the wood for

the trees.

Peter and Rick might get along quite well-- both of them being "big picture"
guys.

As I explained

Lets say, you "attempted" to explain.

in another post, the conceptual models Keynes provides

However, the conceptual model you presented as being a Keynesian
model doesn't have anything at all to do with Keynes system.

allow us to combine his theories with other theories (such as Game
Theory). If you are hung up on the details, you are trapped in a
single concept.

The real trap is to get hung up on a point you've gotten wrong. This can
really slow things down. And, it can be tiresome for people who really
do understand. CSGnet people can speak to this based upon
their experience with Bill Powers' dad's _Leakages_ thesis.

Observing the discussions about PCT in this forum, I see this
happening here.

Unfortunately some of us are so deluded that we think control theory
has a lot to offer.

People are drilling down into the minutiae of detail
and losing track of the main concept.

"Losing track of the main concept" is certainly something to be avoided.
Unfortunately Peter was never on track to begin with regard to either the
Keynesian system or apparently control theory either for that matter.

Peter evidently doesn't understand the main conception of the Keynesian
system or he wouldn't have made the mistake he did in his mis-translation
of Keynes. And, I have doubts concerning his understanding of control
theory.

He says,

PCT is is useful as a concept, but it has very limited value as a stand

alone.

Among the "very limited merits" of control theory is the capablity it
provides
for designing some really capable weapons. This can be really handy in
a "stand alone" take on all comers sort of shoot out.

> It has to be combined with other models for its full value to be
realized.

Tell you what Peter, if you can convince Rick Marken, of this, you might get
my
full attention. Convince Rick that is that control theory has as you say,
"a very limited value."

Bill Willians

[Bill_Powers]

[From Bill Powers (2004.03.12.1342 MST)]

Mike Acree (2004.03.11.1400 PST) --

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.

Let's say that I am trying on different attitudes to see how they can help
me cope with the hostilility, bluster, irrationality, and empty faith that
seem to be the primary ingredients of arguments about economics.

So far the interchanges between Bill Williams and Peter Small seem to
consist entirely of assertions about how much one party knows, compared to
how little the other party knows; how right one party is, and how wrong the
other party is, with neither facts nor reason to support any of these
assertions.

Why not get down to the actual dispute and present the facts and the
reasoning so that we all can follow and check for mistakes? Instead of just
alluding to Keynes' theory, why not come right out and say what it is? If
it is correct, why not produce the facts and the reasoning that show it is
correct? Does the correctness of the theory depend on the fact that Keynes
thought it up? Why does it even matter whose theory it is? Is it impossible
to lay out the theory in a clear, orderly, logical, and factual manner so
it can be judged on its own merits rather than by the supposed merits of
its interpreters? Is there any substance here at all, or is economics
entirely a matter of cleverly phrased opinions from self-accredited (or
mutually-accredited) Authorities?

I would like to see CSG discussions conducted on a level that appeals to
human adults. Calling people "puerile" or "extreme left-wingers" or "fools"
or "idiots" disqualifies the one doing the name-calling from grown-up
conversations. I am trying to live up to the kind of standards I can
admire. That is easier in the company of others with similar aspirations.
If I shut off some lines of communication, it is because they call forth
the worst in me rather than the best. The worst in me is all too ready to
express itself. I'd rather not give it the chance.

Best.

Bill P.

[Bill_Williams1]

From[Bill Williams 12 March 2004 4:10 PM CST]

[From Bill Powers (2004.03.12.1342 MST)]

Mike Acree (2004.03.11.1400 PST) --

>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.

Let's say that I am trying on different attitudes to see how they can help

me cope with the hostilility, bluster, irrationality, and empty faith that

seem to be the primary ingredients of arguments about economics.

By any chance are you finding Professor Bruun difficult to deal with?

Bill Powers it seems is coming to grips with the reality of how economic

ideas are hammered out. HIs categories of " hostilility, bluster,

irrationality, and empty faith..." pretty well covers it. And, as opposed

to alll this insanity is, I suppose, the quite different realm-- the world

initiated by Bill's dad, the _Leakages_ thesis. And, the continuation of the

tradition by the collaboration of Bill Powers and Rick Marken.

However, as I think we all know now, the product of this quite different

worlds, is based upon, what else but, " hostilility, bluster, irrationality,

and empty faith ..." only this time the animus is directed, however

implausibly it might seem, toward any and all schools of economic thought.

The main product of the "Leakages" linage so far has been Rick Marken's

H. Economucus which as Bill Powers' very though critique has indicated,

has been a sequence of "Giant leaps in the wrong direction.."

So far the interchanges between Bill Williams and Peter Small seem to

consist entirely of assertions about how much one party knows, compared to

how little the other party knows; how right one party is, and how wrong

the other party is, with neither facts nor reason to support any of these

assertions.

Bill Powers still hasn't managed to come to a position from which he can

make critical judgments in regard to economic issues. Ordinarily people

who conduct arguments about economic issues are capable, sometimes,

at anyrate of putting two and two together and getting four. Perhaps one of

the things that irritates Powers about the discussion we are conducting is

that Peter and I both are assuming that the main issue is how to read

Keynes. Until Bill Powers post, I'd forgotten that on the CSGnet Keynes' has

Been the subject of abuse for about every sin that could be thought of
except

For his having been a homosexual. Actually, to be fair Bill Powers hasn't

charged Keynes with every sin possible, not yet, but give Powers a few years

And he may get around to it.

It may have occurred to Bill Powers that Peter has never so much as heard

of TCP and the _Leakages_ book. And, Bill Powers may not be up to beginning

from square one and explaining to Peter how much more sense his dad's

economics makes than the system that has attained worldwide recognition as

the "Keynesian

revolution."

� Why not get down to the actual dispute

Why indeed. But, Peter and I are not interested in the only issue that you

Seem to think is important-that is how important your dad's rather thinly

borrowed crankish nonsense.

Thank you very much Bill, but Peter and I seem to be having lots of fun

disputing about Keyens. And, it seems that we are getting along without

having to ask you how we want to do this. Both Peter and I seem to think

that Keynes provides a context for further discussion. I don't see that

we need you to tell us how it ought to be done. Why don't you concentrate

on Getting Rick to understand, why his H. Economicus isn't a working model.

and present the facts and the

reasoning so that we all can follow and check for mistakes?

As, if this has been how the discussion about _Leakages_ was conducted?

But, here we get to the element that annoys Bill Powers.

instead of just alluding to Keynes' theory,

But, Peter and I both seem to think that the Keynesian theory is important.

why not come right out and say what it is?

I suppose you "came right out" and told us where the money went when it

leaked?

If it is correct, why not produce the facts and the reasoning that show

it is correct? Does the correctness of the theory depend on the fact that
Keynes

thought it up?

Well, I think I'd rather argue with Peter about Keynes, than argued with you

about your dad.

Why does it even matter whose theory it is?

Sure it does. Keynes really _is_ somebody in economics. Nobody, much has

ever heard of your dad. Peter and I come from a wider world. Both of us have

had some exposure to economic ideas. I can't speak for Peter, but I never

found your dad's stuff presented any difficulty aside from keeping a smirk

off my face. But, go ahead, explain to Peter why the whole world is too

shockingly stupid to recognize how brilliant your dad's Leakages thesis

really is.

Is it impossible

to lay out the theory in a clear, orderly, logical, and factual manner so

it can be judged on its own merits rather than by the supposed merits of

its interpreters?

You really should ask yourself "Why is it that no one with training in
economics

Has found your dad's economics sufficiently interesting to have taken it up
and

worked with it?" Rick we know hasn't yet managed to generate a working
model

starting with your dad's work, and no one else seems at all interested.

Is there any substance here at all, or is economics

entirely a matter of cleverly phrased opinions from self-accredited (or

mutually-accredited) Authorities?

As opposed to the opinions of a guy sitting on a hill in western Colorado

Who thinks it isn't going to cost a damn thing to go to Mars? We might
spend

trillions and trillions on this piece of show bidness, but it won't cost

anything. Is that the Bill Powers' alternative?

I would like to see CSG discussions conducted on a level that appeals to

human adults.

Adults usually don't expect other people to bow down and worship their dad's

Crackpot ideas.

Calling people "puerile" or "extreme left-wingers" or "fools"

or "idiots" disqualifies the one doing the name-calling from grown-up

conversations.

Don't look at me. I haven't been under the illusion that what goes on, on

The CSGnet consists of "grown-up conversation. Ancestor worship maybe.

Although I must admit I thought it was sort of neat when you were calling

me the "Almighty."

I am trying to live up to the kind of standards I can admire.

Why not just accept the person you really are and relax.

I think trying to live up to an external standard may be a profound source

of trouble. Attempting to be somebody you aren't has the very real

potential for setting up internal conflicts, and then you seem to react

by exporting this fight with yourself. You are exporting this conflict by

blaming other people for your distress. At one time I took this

self-indulgence seriously, but I have seeen you do this so many times

that I eventually caught on.

That is easier in the company of others with similar aspirations

Here you go again. Lofty standards and aspirations and those of us who

don't worship your dad are nasty boogers. I am so pleased that you have

Rick around to share your aspirations.

If I shut off some lines of communication, it is because they call forth

the worst in me rather than the best.

I wonder how could one say this in PC speak? Or, can one say this in PC

speak? It sounds like Bill Powers' "they" has been assigned the role of a

stimulus that is "calling forth" the bad side of Bill Powers. What Bill

Powers seems to be describing is an internal conflict that he blames on

outsiders to what seems to have been a really nasty family argument.

The worst in me is all too ready to express itself. I'd rather not give

it the chance.

As I said in a previous post today, I don't see that there is necessarily

any reason why Bill Powers should feel any obligation to participate in

CSGnet discussions concerning economics. What Bill Powers has contributed

to the economics threads has involved so heavy a dose of " hostilility,
bluster,

irrationality, and empty faith..." that it is difficult to see what Bill
Powers'

constructive contribution might be. It is always, I suppose a possibility
that

Bill Powers might eventually make a contribution, but then I wonder, if he

manages to actually make such a contribution, how is he going to communicate
it

To a world that is characterized by "shocking stupidity?"

Devoted followers of the economics threads may remember months ago when the

Caption was Mike's "Ayn Rand and the Elephants." Back then when Rick Marken

was in favor of killing elephants to save them, that I pointed out that in

economics

     ... any drawing of conclusions, or arguing by the

     law of logical contradiction, is absolutely futile

     in the realm of belief, belief savage or civilized.

     Two beliefs, quite contradictory to each other on

     logical grounds may coexist, while a perfectly

     obvious inference from a very firm tenent may be

     simply ignored. p. 220

Magic, Science and Religion and other essays

Bronislaw Malinowski 1948 Free Press

Since then we on CSGnet have been told some marvelous stories such as that
going

to Mars won't cost anything. And, I am still at work extending my fable
"Running

Naked in the Forest. And, when it is finished it will probably be more fun
than we

can stand-maybe more fun even than Mel Gibson's Passion. More fun than
caring

for the world's sick and starving children anyway. Rick, in the meantime
has

attempted to portray himself as the equal to, I forget, was it Issac Newton
or

was it Abert Einsestein. As a self-disclosure I found this revelation
fascinating.

And, in the midst of all this Bill Powers was at one point going to
straighten

out the good but not too savvy professor Bruun. (After lots of practice I
finally

seem to have learned how to spell her name right.)

By-the-way, have you persuaded Professor Bruun that Keynes made a lot of
silly

mistakes and that your dad had everything all figured out?

Maybe while you are attempting to figure a way to cope with the situation
that

you have in part created, you might consider discarding the irrational
hostility

with which you approach economic issues.

Bill Williams

[Bill_Powers]

[From Bill Powers (2004.03.12.1839 MST)]

Bill Williams 12 March 2004 4:10 PM CST --

My, my, I opened the gate for one day, and just look at the garbage that
blew in. My mistake.

[Bill_Williams1]

From[Bill Williams 12 March 2004 9:30 PM CST]

[From Bill Powers (2004.03.12.1839 MST)]

Bill Williams 12 March 2004 4:10 PM CST --

My, my, I opened the gate for one day, and just look at the garbage that
blew in. My mistake.

Don't worry about it. I don't think anyone is going to judged you by the
garbage
that blows in. Rather people are more likely to judge you by what you turn
out.
And, in particular by what you turn out that moves beyond what is already
known.
Unfortunately, when you adopted your dad's combination of hatred and
incomprehension of Keynes ( I don't know which came first. ) it is far more
likely
than not that you have doomed your effort to apply control theory to
economics.

I will recomend to you Charles Peirce's methodological advice, in which he
says,

    "That systems ought to be constructed architechonically has
    been preached since Kant, but I do not think the full impact

    of the maxim has by any means been appreciated. What I would

    recommend that every person who wishes to form an opinion

    concerning fundamental problems should first of all make

    a complete survey of human knowledge, should take note of all

    the valuable ideas in each branch of science, should observe

    in just what respect each has been successful and where it

    has failed, in order that, in the light of the through

    acquaintance so attained of the available materials for

    a philosophical theory and the nature and strength of each,

    he may proceed to the study of what the problems of

    philosophy consists in, and of the proper way of studying

    it."

  Murphey, Murray G. 1961 _The Development of Peirce's Philosophy_

         Cambridge, Massachusetts: Harvard University Press p. 319.

Peirce is basically saying, that it is easier borrow or buy a wheel rather

than trying to invent one. And, there is no prize for re-inventing the

wheel. What in effect you are attempting to do is to repeat what it

took Keynes a lifetime to do. And, it took the best minds at Cambridge

at the time to work out the details. In following your dad's mistake

you've dug your self into a hole. To understand how a contemporary

money economy works, you will have to repudiate some of the indignant

complaints that you have made about Keynes' blunders.

By-the-way speaking of blunders, have you gotten up to page 87. in the Bruun

dissertation yet? Has anybody out there been reading ? If you were willing
learn,

you could learn a lot from Bruun. She could straighten out the persistent

misunderstandings you have, if you were willing to listen. So, far what
you've

demonstrated is an in ability to listen. So, last I heard you were
gearing up to

explain to Bruun where she has it all wrong. The sad thing is the Keynesian

system really is, as I am beginning to appreciate seeing you fumble about,
quite

an accomplishment.

You ought to think about this, "Who were the members of the second team that

made it to the top of Mount Everest?"

Bill Williams

[Martin_Taylor2]

[Martin Taylor 2004.03.13.10.50]

From[Bill Williams 12 March 2004 9:30 PM CST]
Peirce is basically saying, that it is easier borrow or buy a wheel rather

than trying to invent one. And, there is no prize for re-inventing the

wheel.

Without intending to contradict Peirce, I would disagree with this
interpretation. It is indeed easier to borrow or buy a wheel.
However, by reinventing it, one does get a prize. One understands how
the wheel works. Not only that, but one might come up with a much
better wheel, for example one made with tensioned spokes instead of a
solid wood disk.

Martin

[Bill_Williams1]

From[Bill Williams 13 March 2004 12:20 PM CST]

[Martin Taylor 2004.03.13.10.50]

>From[Bill Williams 12 March 2004 9:30 PM CST]
>Peirce is basically saying, that it is easier borrow or buy a wheel

rather

>
>than trying to invent one. And, there is no prize for re-inventing the
>
>wheel.

Without intending to contradict Peirce, I would disagree with this
interpretation. It is indeed easier to borrow or buy a wheel.
However, by reinventing it, one does get a prize. One understands how
the wheel works. Not only that, but one might come up with a much
better wheel, for example one made with tensioned spokes instead of a
solid wood disk.

Martin has a point. And, I wouldn't describe the current Keynesian system
in terms of a mag alloy wheel. Peirce's point which my re-inventing analogy
may not have conveyed is that someone who wishes to be a conceptual
innovator would be wise to take advantage of and use what other people have
accomplished rather than adopt an attitude of contempt for civilization.

Bill Powers was fortunate in respect to control theory in having been taught
the principles of control theory. As a naval recruit Bill had a powerful
incentive
to learn control theory principles, doing electronomics was more appealing
than doing KP. The situation he faces in attempting to do economics is far
more complex. And, finding the situation perplexing Bill Powers has come to
the conclusion that because the results of economic inquiry looks
meaningless
to him, it is in fact meaningless. I faced a similar situation myself when I
set
out looking for a psychology that was genuinely a science. I had the idea
that
if you had an adequate psychology you could create an alternative to
economic orthodoxy-- and you can. There are within the many strands of
heterodox economics a few areas in which control theory can be applied
making use of what people have already, more or less, figured out. But,
from Bill Powers viewpoint the world, at least the economic aspects of the
world, looks as if it is entirely insane. And, I suppose in fact there is
sufficient
justification for thinking economically speaking the world system is insane
that he
genuinely thinks he has to start from bare ground. This might be an
interesting
exercise, and interesting to watch. Unfortunately from my standpoint, in
his
frustration Powers has decided to attack Keynes as a spokesman for a
predatory capitalist class. At least in part Powers seems to have gotten
this
from his dad. However, the real source of Powers' frustration, as I see at
least it, the lack of recognition and support that his genuine achievement
in
psychological theory has failed to attain. Not that Powers failed. Powers
delivered the goods. But, the establishment of psychological theorists
does
amount to a closed shop. Not too surprising that Bill Powers would suspect
that the same would be true of economics. And, in large part it is,
perhaps
even more so than psychology. But, adopting a paranoid viewpoint that
every last economist with a Ph.D is corrupt doesn't really help matters.

Bill Williams

[Bill_Williams1]

From Bill Williams 14 March 2004 7:20 AM CST]

Some time ago Bill Powers was defending his dad's thesis

that there was a remarkable constancy between income and

investment. This was supposed to, as I understand it

prove something or other. I was never all that interested

because I knew it wasn't true.

A controversy arose concerning why Bill's dad left out the

years of the Great Depression and World War II when he

attempted to support his argument with data. It did look

rather peculiar the way Bill�s dad selected his data. There

was this big hole in the middle of the data set right where

things get really interesting-like when we had a Great

Depression and then World War Two. And, for some reason

which has never been explained, Bill�s dad left out these

years. Could it be because these years don�t support Bill�s

dad�s thesis? Since Bill Powers has made some unfortunate

statements such as poor old Ludwig being an ashole, and

Keynes, and me for that matter. Bill Powers thinks that

Bill Williams is in need of reform. I have to say that

I hadn�t noticed this. It seems to me that it is Bill Powers�

Program that is in difficulty.

Let us consider a posting from

[ Bill Powers (2004.01.26.1627 MST)] where he said,

You're assuming that the 44 years shown are the only

Ones that fit the formula. If that were true, I would

dismiss the data,...

Bill Powers is arguing with me that his dad wasn�t being

Dishonest when he left out a big chunk of data from his

Argument that investment can�t contribute to economic growth.

Actually I wasn't assuming anything. I could remember seeing

The plots of income and approximate numbers, and it was clear

that what Bill�s dad was claiming was not true. Not if the

years of the Great Depression and World War II years were

included. As I understand it Bill Powers in the statement

above is saying that if the data from the missing years

contradicts the claims that he would retract the claims that

have been made.

So, Consider

http://www.bea.doc.gov/bea Commerce Department

Table 1.1.5 GDP

                            1929 1932 1943

                      GNP 103.6 58.7 198.6 Billions

                      GPI 16.5 1.3 6.1

                      Gov 9.4 8.7 94.8

               GPI/GDP 16 % 2 % 3 %

         (GPI + Gov)/GDP 25 % 17 % 51 %

None of these numbers should be considered investment in

The sense of adding to capital, that is of plant and

Equipment. I would suspect that in 1932 net investment

may actually have been negative.

Still,

neither Gross Private Investment, nor GPI plus

Government expenditure, nor even the combination of

The two are even approximately constant in ratio to GNP

For the years 1929, 1932 and 1943.

What ever Bill Powers dad intended to do, what he

actually did was to selectively include years for

which a relationship held, and exclude years for which the

relationship didn't hold.

Then the argument was presented as if the relationship

held without exception-- which clearly is not the case.

Bill Powers says,

It would seem rather stupid for him [TCP] to think he

could get away with selecting only the years that fit

the formula..."

I am not the one that said it first, but I would have to agree.

Was it in fact �rather stupid for [TCP] to think he could get

Away with selecting only the years that fit [his] formula. ?�

There isn�t any way now of knowing precisely what happened.

However.

It seems to me clear that it is known that Bill's dad got

started writing a volunteer column for a suburban bi-weekly

paper. No one, as far as I know, ever checked to see if the

arguments matched the numbers. Then this stuff got published

as a book in a vanity press arrangement. And, no one, at that

time checked to see if the numbers matched the arguments. To

do so, I suppose, would have been considered impolite.

Then the book got reviewed, and, you guessed it, the reviewer

was too polite to say anything critical.

And, eventually Rick Marken got up in Boston and a gave what he

Described as an extension of Bill's dad's Leakages thesis. It

Was nonsense. But, don't take my word for it, rely upon Bill Powers'

Assessment that it was "a giant leap in the wrong direction." And,

The economic question has been pursued under various threads ever

Since.

Veblen (1900)in writing of a similar episode said,

"[The thesis] was tried on its merits, as an alleged account of

the facts; and the weight of evidence went against it." "P. 159)

The Place of Science Preconceptions of Economic Science III

But, that doesn�t mean that anything has changed, or will change.

Now, Bill Powers in the midst of the recent dispute says among other

Things,

"I have no reason to assume [TCP] would fudge the data -- do you?

If you do have suspicions, they would be easy to check, ..."

I have and the data from the �black hole� that was missing from

Bill�s dad�s work don�t fit the formula.

But, Bill Powers has never bothered to check whether his dad's

claim were true or not. After all, he had "no reason to assume

[that TCP] would fudge the data..." But, How, about perhaps

Bill Power�s dad started with an idea and wanted to prove that

The idea was true? Do you suppose that this has from time to time

motivated people to do things they might not otherwise have done?

More recently in commenting on a dispute between Peter and myself,

(Powers may have been irked because both Peter and I considered

Keynes� work to be the logical place to argue about macro-economic

Theory.) It seems unlikely that Peter would know what the Leakages

Business is about.

[From Bill Powers (2004.03.12.1342 MST)] with some extensive comments

to make.

Why not get down to the actual dispute and present the facts and the

reasoning so that we all can follow and check for mistakes?

How about when you argued that your dad had made a remarkable discovery

that what he called investment was a remarkable constant fraction of

aggregate income? As it turns out it isn�t true, if you include the

that he left out of his data. I�ve pointed this out to you. And, I am

pointing it out to you again.

Instead of just alluding to Keynes' theory, why not come right out and say

what > is? If it is correct, why not produce the facts and the reasoning
that show it > is correct?

OK. I am presenting some "facts." Is it this to make any difference?

Does the correctness of the theory depend on the fact that Keynes

thought it up? Why does it even matter whose theory it is?

Of, course it matters. You are such a ninny. Even if Keynes happens to be

Wrong, it really doesn�t matter. The argument is still going to be about

Keynes.

Oh, but if it is your stuff or your dad's stuff, that is a very different

matter isn't it? Your dad can leave out data that doesn�t fit, and I guess

because he was your dad that makes it perfectly OK.

Is it impossible

to lay out the theory in a clear, orderly, logical, and factual manner so

it can be judged on its own merits rather than by the supposed merits of

its interpreters?

You still haven�t caught on have you? When economics becomes the topic then

Clarity, orderliness, logic, and especially the facts all go in the ditch.

Is there any substance here at all,�

I think so. You are going on a bit of a rant. You really ought to have know
better than to make the economics thread into a family drama. Your dad didn�
t

really have any idea what he was doing, and neither do you. Control theory

loops, well yes. Economics, not by a long shot, or in your case a bite.

at all, or is economics

entirely a matter of cleverly phrased opinions from self-accredited (or

mutually-accredited) Authorities?

Well, I guess it depends. If its Bill Powers� say so, or Bill's dad's say
so,

then that is the only authority required. Consider for example Bill's

belief that the old man wouldn't �fudge the data.�

And, speaking of belief, it is time to repeat once again Bronislaw
Malinowski's 1948 observation that,

     ... any drawing of conclusions, or arguing by the

     law of logical contradiction, is absolutely futile

     in the realm of belief, belief savage or civilized.

     Two beliefs, quite contradictory to each other on

     logical grounds may coexist, while a perfectly

     obvious inference from a very firm tenant may be

     simply ignored. p. 220

Magic, Science and Religion and other essays

Sometimes I think my fable �Running Naked in the Forest� is funny. But the

�Running Naked in Forest� saga can not begin to match the real thing.

Bill Williams