FW: REPLY PCT and an economic emergency (SD7276)

[From Fred Nickols (2008.12.12.0735 MST)]

Here's another post from the SD list. I'm forwarding it because of the link Jack Harich provides. Don't recall if that already made its way to CSGNet or not but it seems to be at least one avenue for getting to the top.

···

--
Regards,

Fred Nickols
Managing Partner
Distance Consulting, LLC
nickols@att.net
www.nickols.us

"Assistance at A Distance"

-------------- Forwarded Message: --------------
From: "SDMAIL Jack Harich" <register@thwink.org>
To: System Dynamics Mailing List <sdmail@lists.systemdynamics.org>
Cc: System Dynamics Mailing List <sdmail@lists.systemdynamics.org>
Subject: REPLY PCT and an economic emergency (SD7276)
Date: Fri, 12 Dec 2008 12:46:40 +0000

Posted by Jack Harich <register@thwink.org>

SDMAIL Bill Harris wrote:

> Which begs the question: are there ways we could talk in ways that
> are more likely to be heard? Would such /talking/ involve a lot of
> listening and asking in the right places to the right groups of
> people?

There's a golden opportunity to be "more likely to be heard" at:
http://change.gov/open_government/yourseatatthetable

Only a little over 70 submissions have been made since November 5, when this
window of opportunity started. Thus anything members of the SD community submit
is highly likely to be read closely, and perhaps passed up the food chain if it
holds merit, because that's what this new administration is looking for.

Can we "talk in ways that are more likely to be heard?" I submitted a document
December 10 and played the strategy of showing how Obama himself is a natural
systems thinker. He senses much of what I've found in the structure of the
Dueling Loops of the Political Powerplace. The submission uses a number of his
quotes to show this. I'm hoping that will draw whoever reads this into the
realization that hey, the guy at the top is thinking this way. I'd better look
into this.

For example, the submission says: "Obama correctly concludes that 'It's not
enough to just change the players. We have to change the game.' In other words,
it’s not enough to treat the symptoms. We have to change the system."

The Thwink.org submission has not yet appeared on the above link. You can get a
sneak preview at www.thwink.org.

> Al Gore made a similar point in a video I pointed to at

Exactly. "We don't just have a crisis of the climate; we have a crisis of
democracy." That is the bigger problem to solve, which is what the submission
says. We have a broken political system. That's why I wrote: "Don’t just fix the
defects. Fix their root cause, or you will forever be bailing out the boat.
Corrupt politicians, inept political appointees, insufficient regulation, and
chronically unsolved public problems are political system defects."

Jack
Posted by Jack Harich <register@thwink.org>
posting date Thu, 11 Dec 2008 12:08:09 -0500

_______________________________________________

[From Rick Marken (2008.12.12.0930)]

Fred Nickols (2008.12.12.0735 MST)–

Here’s another post from the SD list.

OK. Two little peeves here. First,

SDMAIL Bill Harris wrote:

Which begs the question: are there ways we could talk in ways that

are more likely to be heard?

As soon as someone uses “begs the question” to mean “demands that the question be asked” rather than “implicitly assuming the proposition to be proved” I find it very difficult to take them seriously about anything else. This happened while I was reading a really great book – The Ghost Map by Steven Johnson, which is actually the story of an early use of group level statistics to solve a public heath problem, cholera epidemics. Johnson used “beg the question” in the wrong way and I had to put the book down for a couple of hours before I could proceed;-)

Can we “talk in ways that are more likely to be heard?” I submitted a document

December 10 and played the strategy of showing how Obama himself is a natural

systems thinker.

This is another thing I can’t stand. Not Obama, of course. He’s amazing. I don’t like the idea that there is something special about “systems thinking”. It’s not understanding the fact that one is dealing with a system that it is important; it’s understand what kind of system one is dealing with that matters. For example, understanding that the economy is a system is not particularly important. What is important, it seems to me, is understanding that the economy is a closed-loop system where the aggregate consumer and producer are the same people functioning as an aggregate controller; the aggregate producer acts to produce what it, as the aggregate consumer, wants. The economy is not an open-loop system, where investment causes production that causes consumption. It’s that open loop system concept, that views investment as the ultimate cause of consumption, that has gotten us into the mess we’re in.

Best

Rick

···


Richard S. Marken PhD
rsmarken@gmail.com

[From Bill Powers (2008.12.12.1240 MST)]

[From Fred Nickols (2008.12.12.0735 MST)]

Here's another post from the SD list. I'm forwarding it because of the link Jack Harich provides. Don't recall if that already made its way to CSGNet or not but it seems to be at least one avenue for getting to the top.

I'm holding off because I have to check out the SD models, and so far the bandwagon itself seems to consist of me. It hard to get something organized, and if I'm the only one pulling it won't go very fast. Right now I'm just waiting for the book to appear (some color printing problems this week, so another delay).

Best,

Bill P.

[From Bill Powers (2008.12.12.1049 MST)]

Rick Marken (2008.12.12.0930) –

OK. Two little peeves here.
First,

SDMAIL Bill Harris wrote:

Which begs the question: are there ways we could talk
in ways that

are more likely to be heard?

Johnson used “beg the question” in the wrong way and I had to
put the book down for a couple of hours before I could
proceed;-)

Sounds like an allergic reaction to me – anaphilolic shock,
maybe?

This is another thing I can’t
stand. Not Obama, of course. He’s amazing. I don’t like the idea that
there is something special about “systems thinking”. It’s not
understanding the fact that one is dealing with a system that it is
important; it’s understand what kind of system one is dealing with that
matters.

I think there’s a step before that. A system is an organization of
interrelated components, all or most of which are active at the same
time. So there’s no way to understand a system by looking at the effect
of one component on an adjacent one, or by tracing a causal chain
sequentially through the network of components. While you’re tracking one
chain, other chains are also active, and are contributing to the state of
the very components you’re reaching via the chain you started with. You
have to study all the input-output relationships, and then solve the
simultaneous equations either analytically or by simulation, to see what
the whole system will really do.

In chapter 3 of the new book, which is about that “live block
diagram,” I walk the reader through a sequential analysis of the
feedback loop and show that the result is a TOTALLY wrong picture of what
even this single “chain” of relationships does.

Consider a system made of just two objects, Earth and Moon. The Earth
pulls on the Moon, causing its path to deflect toward the Earth and
bringing it closer to the Earth. The Moon then pulls on the Earth,
deflecting it by a smaller amount and accelerating it toward the Moon.
Then the Earth pulls on the Moon again, and since the two bodies are now
closer together, the pull is larger and the deflection of the Moon’s path
is greater, so the Moon then pulls the Earth harder, which deflects the
moon more, and so on to the inevitable collision. While you’re working
this out, of course, the Moon and the Earth sail on sedately in their
nice stable orbits.

It takes system thinking to figure out what will really happen.

Best,

Bill

[From Bill Powers (2008.12.12.1315 MST)]

Martin Taylor 2008.12.12.13.55]

But the economy IS an open-loop system. You are talking only about one kind of loop within a larger flow of energy and entropy. Everything we have or use is (low-entropy) structure derived from the flow of energy from (usually) the sun through the Earth and the living systems on the Earth and out again to space. If you start with the idea that there is a possible steady-state loop somewhere, without taking into account that it is maintained by this open-loop energy flow (even if there are some multi-hundred-million year lags in places), then you will always come up with dubious answers.

Seems to me that this is a considerable overgeneralization. By this way of thinking, there are no closed-loop systems at all, since every system requires an energy input, and degrades the energy as it does whatever it does.

Living control systems steal energy from other sources and reject the final products to their environments, so they aren't really closed-loop systems either -- is that your argument?

I think there is a confusion here that can be traced back to Bertalanffy. He spoke of closed systems and open systems, based on the difference between an energetically isolated system (closed) and one that interacts with a larger environment (open). Somewhere along the line, somebody got open and closed thermodynamic systems mixed up with the terms open-loop and closed-loop from control engineering. A closed-loop system is not energetically closed; it is energetically open under Bertalanffy's definitions. It is causally isolated from the environment in the sense that the variable it controls is shielded from the normal effects of external variables -- disturbances. But it depends on an external power source to accomplish that shielding. If it decreases its own entropy, it does so at the cost of increasing entropy in other places.

If you concentrate on money flows, you will be even more wrong (not that I'm saying you-Marken is doing that, but a lot of economic theory seems to).

I don't agree with this, either. Money flows are of paramount importance in the American economy and apparently many others, which is obvious from the current difficulties. People messing around with the money flows have brought the whole economic system to the brink of destruction, in spite of the fact that all the machinery for buying and selling, producing and consuming, and developing new ideas is still in perfect working order and could restart at any time -- if the money situation could be straightened out.

It's as if the accountant had taken over the company -- or perhaps even more realistically, as if the accountant had run off with all the company's money, leaving it broke and in debt and unable to pay its workers or its suppliers. The workers could still come in and work the machines as usual making the product, the suppliers could deliver the raw materials, the CEO could make policy decisions, the product could be delivered to retailers, the customers could -- woops, they can't buy the product because they don't have enough M - O - N - E - Y.

And the company can't pay the workers (who are also the customers) because it isn't selling any products and therefore doesn't have enough M - O - N - E - Y. Neither the consumers nor the producers can even borrow M - O - N - E - Y, though that wouldn't fix anything for longer than the first repayment on the debt. Stopping the money flow is just like setting off a huge bomb in the middle of the factory. Except that the factory is still there, unharmed. Turning off the money is just like turning off the lights and locking the doors.

The way most economic systems are set up nowadays is that you pay for a product and receive the product: both, not just one of those actions. No product delivered, no payment for it. No payment for the product, no product obtained. No wages, no work; no work, no wages. Under those rules, the physical economy becomes scarcely distinguishable from the money economy, except that you can't drive or eat money.

This economic system wasn't designed, it just grew. And as it grew, certain people noticed that it was set up so they could get a lot more money out of it than other people got, and without working at all -- just betting and conniving and scheming, which is the sort of thing they liked doing anyway and didn't consider the same as (yuk) work. Those are the people who screwed up the money system; they were the ones who put the sugar in the gas tank and the sand in the gear box, and charged us for doing so.

But those people did us one favor: they showed more clearly than we could have wished exactly what is wrong with a money econonomy and a free market. A free market is like an unlocked car: an invitation to thieves. Either we figure out how to eliminate the thieves, or we lock the car. Or we sit here and argue about economic theory and starve.

Best,

Bill P.

···

Martin

No virus found in this incoming message.
Checked by AVG - http://www.avg.com
Version: 8.0.176 / Virus Database: 270.9.17/1844 - Release Date: 12/11/2008 8:58 PM

[From Rick Marken (2008.12.12.1400)]

Bill Powers (2008.12.12.1315 MST)

Great post!! But I do disagree with this:

This economic system wasn’t designed, it just grew. And as it grew, certain people noticed that it was set up so they could get a lot more money out of it than other people got, and without working at all – just betting and conniving and scheming, which is the sort of thing they liked doing anyway and didn’t consider the same as (yuk) work.

Who says that betting and conniving and scheming aren’t work? Some of the hardest working people I know are scam artists who put a huge amount of effort (work) into betting and conniving and scheming, often with very little payoff. It’s not so much that these people don’t like work. They just don’t like the kind of work that actually produces good and services, which is what money was designed to represent. Money makes it easier to distribute goods and services but it also makes it easier to to steal them (like your financial non-workers) and horde them (like the very rich).

Best

Rick

···


Richard S. Marken PhD
rsmarken@gmail.com

[Martin Taylor 2008.12.13.11.02]

I certainly didn't expect my statement of the obvious to elicit such a strong response!

[From Bill Powers (2008.12.12.1315 MST)]

Martin Taylor 2008.12.12.13.55]

But the economy IS an open-loop system. You are talking only about one kind of loop within a larger flow of energy and entropy. Everything we have or use is (low-entropy) structure derived from the flow of energy from (usually) the sun through the Earth and the living systems on the Earth and out again to space. If you start with the idea that there is a possible steady-state loop somewhere, without taking into account that it is maintained by this open-loop energy flow (even if there are some multi-hundred-million year lags in places), then you will always come up with dubious answers.

Seems to me that this is a considerable overgeneralization. By this way of thinking, there are no closed-loop systems at all, since every system requires an energy input, and degrades the energy as it does whatever it does.

Living control systems steal energy from other sources and reject the final products to their environments, so they aren't really closed-loop systems either -- is that your argument?

Not at all. What I am saying is that you can't always ignore the energy source, at least not for control systems that have to act in a physical world, as opposed to the simulation world. Energy limitations ensure nonlinearity in the control system's response, and it is nonlinearities that allow for, and usually ensure, chaotic behaviour in interacting systems. If you are dealing only with a single control loop working well within its energetic limits, you can safely ignore the fact that it has to be a thermodynamically open system.

However, in the physical world if you don't control your perceptions in such a way that you eat, you don't control anything at all after a short while. All control systems in the physical world are refrigerators, in that the degree(s) of freedom they control are of lower entropy than they would be in the absence of control. That's not a mathematical quibble. It's a statement of fact. That reduction of entropy in the controlled variables is paid for by an increase of entropy in the world connected to the control system. By controlling, you create structure, both in your perceptions of the world and in the external variables that contribute to your perceptions.

Even if your control system is working to counter heavyweight disturbances, you can fake out the requirement for an energy input and waste output in a simulation by asserting limits on its available output, and that works fine. The simulated control loop is isolated from the outer world, but has a parameter controlled by the programmer. In the physical world, that parameter is an input to the mechanism of the control system.

I think there is a confusion here that can be traced back to Bertalanffy. He spoke of closed systems and open systems, based on the difference between an energetically isolated system (closed) and one that interacts with a larger environment (open). Somewhere along the line, somebody got open and closed thermodynamic systems mixed up with the terms open-loop and closed-loop from control engineering. A closed-loop system is not energetically closed; it is energetically open under Bertalanffy's definitions. It is causally isolated from the environment in the sense that the variable it controls is shielded from the normal effects of external variables -- disturbances. But it depends on an external power source to accomplish that shielding. If it decreases its own entropy, it does so at the cost of increasing entropy in other places.

Exactly, and that has to be considered among the interaction effects (side-effects, usually but not always), when dealing with systems of many interacting control systems. There's a difference between dealing with one control loop and many. If I eat all your food, you don't control very well for very long subsisting on my waste products.

If you concentrate on money flows, you will be even more wrong (not that I'm saying you-Marken is doing that, but a lot of economic theory seems to).

I don't agree with this, either. Money flows are of paramount importance in the American economy and apparently many others, which is obvious from the current difficulties.

Of course they are. They are, in exactly the same way as the degrees of freedom (bandwidth) constraints on the links in a control loop are of paramount importance. But you don't concentrate on those when analysing a control system, unless it turns out that those constraints are important in a particular case. It's very probably true that in our current economic situation the money flow is the critical constraint, but that doesn't mean its the only aspect that should enter into a theory.

People messing around with the money flows have brought the whole economic system to the brink of destruction, in spite of the fact that all the machinery for buying and selling, producing and consuming, and developing new ideas is still in perfect working order and could restart at any time -- if the money situation could be straightened out.

Yes, indeed. Have you actually read the paper by Bagno that I have on occasion recommended here, and that has been dismissed because it didn't include a PCT description of the behaviour of people? One of the key ideas is that of trust in the money supply, measured as uncertainty as to the future value of money measured against the structure a money unit can buy you. Fundamentally, money is a communication medium. It allows one person to tell another how valuable some structure is. "Structure" can be embodied in an object or an idea, but it is something created by a living organism, controlling its perceptions. The value isn't the same to a producer as to a buyer, and if the value (translated into the perceived value of money units in both minds separately) is lower for the seller than for the buyer, a free transaction is possible.

When money becomes a commodity, to be bought and sold with other money, then it's almost guaranteed that there are nonlinearities and increasing uncertainty about the value of money. With that uncertainty and the added nonlinearity comes the likelihood of booms and busts (chaotic dynamics).

None of which alters the fact that the essential need of every living being is to control perceptions in such a way as to allow the acquisition of food (and water). Controlling any perception is creating structure (low-entropy parts of the Universe). We humans have found that an efficient way to do this in such a way as to allow us to eat is to make structure that someone else wants, in return for something that allows us to acquire structure useful to our own perceptual control. That something is money, whether it be the imagined money we have in the stock market, or the almost immobile huge stone disks that are money to some Pacific islanders. Money is what you believe to be money; it lets one person know how valuable some structure is to another person.

It's as if the accountant had taken over the company -- or perhaps even more realistically, as if the accountant had run off with all the company's money, leaving it broke and in debt and unable to pay its workers or its suppliers. The workers could still come in and work the machines as usual making the product, the suppliers could deliver the raw materials, the CEO could make policy decisions, the product could be delivered to retailers, the customers could -- woops, they can't buy the product because they don't have enough M - O - N - E - Y.

But they could get it if the people who had control of the product wanted to let them have it, which they might do if the people who wanted it were prepared to offer something of comparable value to the owners. The problem is one of how to effect that transfer, when what the owners would want might be very different from one worker to the next, and the distribution from the value of one squeaky toy had to go to thousands of workers who were involved in it. Money is a much easier way to effect the transfer of value, provided that both sides have a reasonably clear idea of how much value one dollar has to them at that moment.

Turning off the money is just like turning off the lights and locking the doors.

Indeed so. It's what Jeffrey Sachs did to Russia under Yeltsin.

The way most economic systems are set up nowadays is that you pay for a product and receive the product: both, not just one of those actions. No product delivered, no payment for it. No payment for the product, no product obtained. No wages, no work; no work, no wages. Under those rules, the physical economy becomes scarcely distinguishable from the money economy, except that you can't drive or eat money.

The physical economy is far from indistinguishable from its communication channels (money). People DO control their perceptions, and when money gets worthless or unobtainable, people barter for what they need.

...
But those people did us one favor: they showed more clearly than we could have wished exactly what is wrong with a money econonomy and a free market. A free market is like an unlocked car: an invitation to thieves. Either we figure out how to eliminate the thieves, or we lock the car. Or we sit here and argue about economic theory and starve.

Thieves aren't the only ones who introduce uncertainty into the value of money, though that's one thing they do do (doo-doo?). It's the uncertainty that matters, more than the moral iniquity of the thief. In fact, that is a good reason why theft should be considered immoral.

Do read Bagno carefully, or perhaps my own take on his work as of 1955, at <http://www.mmtaylor.net/Economics/index.html>, and don't dismiss it out of hand because it doesn't involve PCT-based behavioural analysis. Even control systems have to obey mathematical and physical laws.

Martin

[From Bill Powers (2008.12.13.1546 MST)]

Martin Taylor 2008.12.13.11.02 --

Living control systems steal energy from other sources and reject the final products to their environments, so they aren't really closed-loop systems either -- is that your argument?

Not at all. What I am saying is that you can't always ignore the energy source, at least not for control systems that have to act in a physical world, as opposed to the simulation world.

True. It would be fairly easy to add the energy requirement, if you want to do so, and make provision in the model for both using energy to control things and acquiring more energy when a local store of it is depleted.

This, inevitably, would lead into a model of economics. One form of symbolic energy is money because money, for large numbers of consumers, represents physical work done or at least time spent away from other possible activities in order to manage the expenditure of physical energy to produce things. Note that this also covers barter. To make money, you have to take time off from doing the pleasurable or vital things that involve spending money.

There's a difference between dealing with one control loop and many. If I eat all your food, you don't control very well for very long subsisting on my waste products.

That concept would make a nice basis for an economic model. It introduces the idea of interpersonal competition and conflict, and scarcity as well. This is not hard to bring into a model.

Yes, indeed. Have you actually read the paper by Bagno that I have on occasion recommended here, and that has been dismissed because it didn't include a PCT description of the behaviour of people?

I tried to read it, but was unable to get far with it. Information theory doesn't impress me as useful for making models, though I can't give you enough rational basis for that to make any difference in what you think about it.

One of the key ideas is that of trust in the money supply, measured as uncertainty as to the future value of money measured against the structure a money unit can buy you.

I would say that trust and faith are exactly what you need when you're uncertain about the future but are required to act anyway. If you had a good model, on the other hand, you wouldn't need trust or faith because you would know that the model will provide the best basis for action you can find, so there's no need to go into conflict about the future. When you give up on modeling and succumb to uncertainty, you need trust just to keep trying.

Fundamentally, money is a communication medium. It allows one person to tell another how valuable some structure is.

I doubt that. It tells another person what its value to you is, but it says nothing about the objective value of a structure. I suspect that this is what you meant. Is there any such thing as objective value?

"Structure" can be embodied in an object or an idea, but it is something created by a living organism, controlling its perceptions. The value isn't the same to a producer as to a buyer, and if the value (translated into the perceived value of money units in both minds separately) is lower for the seller than for the buyer, a free transaction is possible.

I don't think the seller needs to know anything about the buyer's values or vice versa. You don't need to know the cause of a disturbance to counteract its effects. If I want to buy something from you and you ask too high a price, all I know is that I don't want to pay that much. I don't know what value you actually place on it; I find out by raising my bid a little until I exceed my limit, or until you surprise me by saying "OK." If I hit my limit I never do find out what value you placed on the item -- I get only a lower limit for that transaction on that day.

Of course having gone through that bargaining process, I can tell you afterward approximately what value you placed on the item. That's no help in future transactions, though it might give me a statistical idea about what sort of opening bid to make for the same item in the near future. Even that idea's iffy -- if you sold me the next to last one, your price for the last one imnmediately after the first sale might be a lot higher.

This reminds me of my general objection to generalizations. After you know what happened, you can come up with lots of valid generalizations. But usually you can't then go the other way and use the generalization to predict what's going to happen next. If you start giving me pairs of numbers, I might realize that there's always a difference of +2 between the pairs, second minus first. But given that generalization, I can't possibly guess which two numbers you will give me next.

I might know that energy is conserved, and that in a given situation the sum of potential and kinetic energy is constant. But you have to tell me how the objects involved are going to move next; I can only predict that however they move, the sum will be constant.

Generalization is an operation that generally has no inverse. That's muy generalization about generalization.

Best,

Bill P.

[Martin Taylor 2008.12.14.11.31]

[From Bill Powers (2008.12.13.1546 MST)]

Martin Taylor 2008.12.13.11.02 --

Living control systems steal energy from other sources and reject the final products to their environments, so they aren't really closed-loop systems either -- is that your argument?

Not at all. What I am saying is that you can't always ignore the energy source, at least not for control systems that have to act in a physical world, as opposed to the simulation world.

True. It would be fairly easy to add the energy requirement, if you want to do so, and make provision in the model for both using energy to control things and acquiring more energy when a local store of it is depleted.

You miss the key point, that even with a single simple control loop, the requirement for energy to drive the forces that counter the disturbance ensures that the system is non-linear unless the energy source is infinite. Why this matters is that when the simple control loop exists in an environment that contains other such loops whose actions affect either the environmental feedback function or the disturbance, non-linearity is almost sure to make the dynamics of the system become chaotic.

This, inevitably, would lead into a model of economics. One form of symbolic energy is money because money, for large numbers of consumers, represents physical work done or at least time spent away from other possible activities in order to manage the expenditure of physical energy to produce things. Note that this also covers barter. To make money, you have to take time off from doing the pleasurable or vital things that involve spending money.

I don't think you can properly substitute money for energy. The conflicts you mention are real, and to a large extent all our control activities are in support of what must be an intrinsic variable, a sufficient energy flow. It is also true that localised entropy changes are associated with energy flow. That association implies that if Bagno is right (as I believe he must be almost as strongly as I believe PCT must be correct, and for the same reasons), then the use of money as a medium for communication about structure means that it will also be associated with the deployment of energetic resources. In simpler language, if you use money to acquire structure in the form of something someone else built, you both reduce the energy you would have otherwise had to use to build the structure, and import the structure itself. The two go together qualitatively, but quantitatively they only correlate. You can sort-of substitute money for energy if money is actually an information transmission medium, as bagno argues it must be.

There's a difference between dealing with one control loop and many. If I eat all your food, you don't control very well for very long subsisting on my waste products.

That concept would make a nice basis for an economic model. It introduces the idea of interpersonal competition and conflict, and scarcity as well. This is not hard to bring into a model.

Yes, indeed. Have you actually read the paper by Bagno that I have on occasion recommended here, and that has been dismissed because it didn't include a PCT description of the behaviour of people?

I tried to read it, but was unable to get far with it. Information theory doesn't impress me as useful for making models, though I can't give you enough rational basis for that to make any difference in what you think about it.

Perhaps you would find my own take on Bagno, at the same URL, a bit easier to read. Having re-read it last night, I find gaping holes in my 20-year-old logic in some places -- notably the final conclusion -- and the language is rather naive, but nevertheless I think much of it still holds up moderately well.

You say: "Information theory doesn't impress me as useful for making models, though I can't give you enough rational basis for that to make any difference in what you think about it." I tend to agree with the first part of the comment. It's closely analogous to saying "Thermodynamics doesn't impress me as useful for making models", which I also think is true. What Information Theory and Thermodynamics both do is to constrain the possibilities for models, and to provide one of many possible ways of analysing the performance of a particular model, often in comparison to some idealized optimum model.

What Bagno does is not to model the economy, except in the most gross macro scale (the kind that Rick likes to use). Rather, he shows that no matter what the model, certain effects will happen. The thermodynamic equivalent would be to say that if you try to drive an engine by connecting it between a block of hot metal and a block of cold, the engine will run for a while, but will eventually run down. It doesn't matter what kind of engine it is (the model); it will run down and eventually stop unless something external continues to heat the hot block and to cool the cold one.

One of the key ideas is that of trust in the money supply, measured as uncertainty as to the future value of money measured against the structure a money unit can buy you.

I would say that trust and faith are exactly what you need when you're uncertain about the future but are required to act anyway. If you had a good model, on the other hand, you wouldn't need trust or faith because you would know that the model will provide the best basis for action you can find, so there's no need to go into conflict about the future. When you give up on modeling and succumb to uncertainty, you need trust just to keep trying.

If you have a chaotic system to model, then even if your model is exactly perfect in every detail, you still won't be free of uncertainty about the future unless your knowledge of the present is also infinitely precise. Your perfect model might well give wildly divergent results for the future for two very close approximations to the present conditions. Uncertainty as to what will happen is inherent in the perfect model.

That's not really the point, however. Reduction of uncertainty always means work, no matter what the domain. How much work for how much uncertainty reduction is the question that applies in every transaction.

Almost nobody has very much information about the current state of influences that will affect economic variables, whether they have a good model or not, and for most people involved in everyday transactions the uncertainty has more to do with lack of knowledge of present conditions than poverty of model. Usually, it's not a bad bet that inflation will continue to be near what it has been in the last little while, and as variable as it has been in the last little while. Without investing a lot of effort (and expense) into getting better information about current conditions, it's hardly worth much to work on getting a better model. That's for academics, not for me wondering whether to shell out on a new car now rather than next year.

Fundamentally, money is a communication medium. It allows one person to tell another how valuable some structure is.

I doubt that. It tells another person what its value to you is, but it says nothing about the objective value of a structure. I suspect that this is what you meant. Is there any such thing as objective value?

No. Why would you think there might be, or that I might suggest such a thing? Money allows one person to tell another how valuable some structure is to them, in linguistic terms that mean something to both parties. That "something" means "value to me" for both parties. As noted in the next paragraph you quoted.

"Structure" can be embodied in an object or an idea, but it is something created by a living organism, controlling its perceptions. The value isn't the same to a producer as to a buyer, and if the value (translated into the perceived value of money units in both minds separately) is lower for the seller than for the buyer, a free transaction is possible.

I don't think the seller needs to know anything about the buyer's values or vice versa.

Of course not. And I explicitly said not. All the seller needs to know is that what the buyer is offering is more valuable to the seller than the thing being sold. The seller may guess that to the buyer the thing being sold is more valuable than the compensation being offered, but for the transaction to take place that's not required. For the buyer, the thing being sold must have more value than the compensation she is offering. Clearly, if there was an "objective value" for both the thing being sold and the compensation, a pair of values agreed by both parties, no transaction would ever take place.

You don't need to know the cause of a disturbance to counteract its effects. If I want to buy something from you and you ask too high a price, all I know is that I don't want to pay that much. I don't know what value you actually place on it; I find out by raising my bid a little until I exceed my limit, or until you surprise me by saying "OK." If I hit my limit I never do find out what value you placed on the item -- I get only a lower limit for that transaction on that day.

You describe part of the conflict that usually exists in any transaction, between the control systems in the buyer for quantity of "thing being sold" and for quantity of "compensation" (e.g. money). "Value" is defined by where the conflict is balanced.

Of course having gone through that bargaining process, I can tell you afterward approximately what value you placed on the item. That's no help in future transactions, though it might give me a statistical idea about what sort of opening bid to make for the same item in the near future. Even that idea's iffy -- if you sold me the next to last one, your price for the last one imnmediately after the first sale might be a lot higher.

To which I can only repeat "Of course". And if in the interim I won a lottery jackpot, the value of a dollar to me has declined dramatically, though the value of the item in question may not have changed at all, so I might charge a considerably higher price than last time. Or, my new bank balance may be higher than my reference level for it, making my value for an extra dollar go negative, so I might give you the item along with some money to take it. Values do change over time.

I might know that energy is conserved, and that in a given situation the sum of potential and kinetic energy is constant. But you have to tell me how the objects involved are going to move next; I can only predict that however they move, the sum will be constant.

Which tells you that if you create a model that produces a different result, that model won't work in the physical world. Build a model that says cars get 60 mpg by burning water into H2O2, and you have a model that doesn't work thermodynamically. And that's the kind of thing Bagno is telling us about the economic world. If (in a closed economy) you don't have either inflation or a continual (and therefore eventually unsustainable) increase in volunteer work, you will have an economy that runs down in the same way that the engine running between a hot and cold block of metal runs down. Since money is created by debt, either personal, corporate, or government debt must persist to support the required inflation. Nothing is said about how these requirements are met, and though the extension seems to follow naturally, Bagno doesn't deal with open economies that can import structure (as Germany did for a couple of decades during the Wirtschaftwunder period) while exporting entropy to their trading partners (the excessive inflation of the rest of the West during the same period).

Bagno isn't model building, in your sense. He's giving you constraints that tell you whether your model might behave as you hope if it was actually put into effect in the real world. A model that says inflation must be kept too low is one that, if put into effect, would lead to depression. A model that says inflation should be kept at some too-high level is one that would fail because it would lead to runaway inflation through positive feedback of the perception of uncertainty. And so forth. It's up to you to make your model. Having done so, you may be able to determine whether it is viable within the inviolable constraints.

Generalization is an operation that generally has no inverse. That's my generalization about generalization.

That is a Major conclusion with a Colonel of truth.

Martin

[From Bill Powers (2008.12.14.1220 MST)]

Martin Taylor 2008.12.14.11.31] –

You miss the key point, that
even with a single simple control loop, the requirement for energy to
drive the forces that counter the disturbance ensures that the system is
non-linear unless the energy source is infinite. Why this matters is that
when the simple control loop exists in an environment that contains other
such loops whose actions affect either the environmental feedback
function or the disturbance, non-linearity is almost sure to make the
dynamics of the system become chaotic.

I don’t believe that’s correct. It’s nonlinear oscillators that
tend reliably toward chaos, probably because the nonlinearities introduce
incommensurate harmonics (i.e. multimodal oscillations which introduce
incommensurate fundamentals). Nonlinear control systems exist which are
perfectly stable and non-chaotic – in fact, I’ve never seen a chaotic
control system. Of course I haven’t tried to model any. I have modeled a
lot of nonlinear control systems, and built a number of them, and they
worked just fine.

I got this far through a re-reading of pages of my replies to various
points in your post, and realized that there is hardly a single thing in
this post that we agree about. That is upsetting. Am I just in a
hypercritical mood today, or is there a real gulf between us? I wish I
could boil the problem down to some underlying issue, so at least the
number of things I disagree about wouldn’t be so large. I think I’m just
going to give up and wait for some intelligent idea to occur to me, if it
ever does. We’re not on the same page here at all.

Best,

Bill P.

[Martin Taylor 2008.12.14.16.12]

[From Bill Powers (2008.12.14.1220 MST)]

Martin Taylor 2008.12.14.11.31] –

You miss the key point,
that
even with a single simple control loop, the requirement for energy to
drive the forces that counter the disturbance ensures that the system
is
non-linear unless the energy source is infinite. Why this matters is
that
when the simple control loop exists in an environment that contains
other
such loops whose actions affect either the environmental feedback
function or the disturbance, non-linearity is almost sure to make the
dynamics of the system become chaotic.

I don’t believe that’s correct. It’s nonlinear oscillators that
tend reliably toward chaos, probably because the nonlinearities
introduce
incommensurate harmonics (i.e. multimodal oscillations which introduce
incommensurate fundamentals).

To be more precise, I think the correct statement is that the iteration
(feedback loop gain allowing for loop delay) includes a nonlinearity
greater than a square law, then the loop is likely to go chaotic.
Loops that pass through several non-linear control systems are
increasingly likely to include a nonlinearity greater than a square
law, the larger the number of non-linear control systems are
interconnected.

Nonlinear control systems exist which are
perfectly stable and non-chaotic – in fact, I’ve never seen a chaotic
control system. Of course I haven’t tried to model any. I have modeled
a
lot of nonlinear control systems, and built a number of them, and they
worked just fine.

Sure, and why not? You just make sure that the interactions among them
don’t include a square or greater when you take account of the loop
delay, and you are likely to be fine.

Just as a side point that has nothing to do with control, we have found
that very simple networks, consisting of as few as 8 logistic summation
nodes, can have multiple kinds of dynamics without changing either the
interconnections or the interconnection parameters. One and the same
network can have point attractors, simple oscillator attractors, and
chaotic attractors, depending on initial conditions. So one can’t even
tell by simulation whether a particular network has chaotic dynamics.
You might have started it off within a non-chaotic attractor basin.

The foregoing being true of a network of simply interconnected nodes
that have only a logistic nonlinearity (which is not unlike the kind of
nonlinearity likely to be in the gain function of a real-life control
system), how much more likely is it that systems of dozens or hundreds
of non-linear control systems may have chaotic regimes, and that not
all of those regimes will be uncovered by simulations that are started
with random initial conditions? Even structures that work fine under
one set of initial conditions might not when tested with another set.
There may be criteria that allow one to determine which kinds of
interconnections will give consistent results independent of initial
conditions, but if there are, I don’t know of them. Maybe a hierarchic
structure is one, maybe not.

I got this far through a re-reading of pages of my replies to various
points in your post, and realized that there is hardly a single thing
in
this post that we agree about.

I’m surprised at that, since much of my post consisted of agreeing with
you. I wonder which of my several agreements or other statements you
disagree with. Is it
that neither thermodynamics nor information theory lead directly to the
creation of models? Or that control systems and systems of control
systems must obey natural laws, and that those laws can be used to
constrain what is possible for an unspecified system to do?

That is upsetting.

Yes.

Am I just in a
hypercritical mood today, or is there a real gulf between us? I wish I
could boil the problem down to some underlying issue, so at least the
number of things I disagree about wouldn’t be so large. I think I’m
just
going to give up and wait for some intelligent idea to occur to me, if
it
ever does. We’re not on the same page here at all.

A mystery, indeed. It seems to happen almost every time “information”
or “uncertainty” gets into the conversation, doesn’t it! Maybe there’s
something you don’t like about the idea that uncertainty is inherent in
any observation, and that this uncertainty can sometimes be quantified.
Is that it?

Martin

[From Bill Powers (2008.12.14.1626 MST)]

Martin Taylor 2008.12.14.16.12 --

A mystery, indeed. It seems to happen almost every time "information" or "uncertainty" gets into the conversation, doesn't it! Maybe there's something you don't like about the idea that uncertainty is inherent in any observation, and that this uncertainty can sometimes be quantified. Is that it?

Yes, I think that's close to the problem, though not the root yet. I see so little uncertainty in normal behavior -- and normal perception -- that your emphasis on it seems misplaced. It takes a real effort to come up with examples of uncertainty, and they are vastly outnumbered by the examples of perception, hence behavior, in which the experiences are clear, sharp-edged, repeatable, and apparently free of random variation. There is, of course, always some degree of noise under the signal, but it's a small fraction of the signal under normal circumstances.

Of course you can always set up situations where the noise level is deliberately increased to be a significant fraction of the signal, and then the statistical properties of perception and control will become visible. There is a place for studying those phenomena. But they don't much interest me now because we're still at the stage of developing PCT where demonstration of ordinary phenomena is the most important task. I think we're a long way from needing high-level generalizations and are very short of concrete and indisputable evidence that will convince people that PCT is here to stay.

I'm not a fan of high-level generalizations anyway, as you know. I think they beg a lot of questions, since they are drawn from specific phenomena and processes which can't be explained by using the very principles that are drawn from them. Energy and entropy are not fundamental concepts; they are general concepts drawn from the way objects are observed to behave. The observed relationships among temperatures and properties such as thermal conductivity and heat capacity are what they are; they are not produced by thermodyamic principles or the concept of information or any of those abstract ideas. It's the other way around; information, entropy, and energy are a sort of conceptual averaging of the specific phenomena we observe. We lose information in going from observational data to the generalizations, which is why we can't get back from the generalizations to predictions of observations.

It seems to me that generalizing and modeling work in exactly opposite directions. When we generalize, we're looking for concisely-stateable principles or categories which are deriveable from specific observations. When we model, we're looking for entities from which we could derive the specific phenomena we actually observe. That's probably the main reason I see concepts like information and entropy as the wrong way to achieve what I want to achieve. I want to go in the direction from measurements of temperatures and masses to a kinetic theory of heat, and not in the direction from measurements of temperatures and masses to thermodynamics. The former direction leads to explanatory and predictive theory; the latter leads only to after-the-fact descriptions and explanations.

That's getting pretty close to what I see as the problem here.

Best,

Bill P.

[Martin Taylor 2008.12.15.14.27]

On first reading, I found your message to be very strange, and I still see it as rather strange. You seem to argue against the applicability of natural law to observed phenomena, or perhaps even to the notion of the "laws of nature" in principle.

[From Bill Powers (2008.12.14.1626 MST)]

Martin Taylor 2008.12.14.16.12 --

A mystery, indeed. It seems to happen almost every time "information" or "uncertainty" gets into the conversation, doesn't it! Maybe there's something you don't like about the idea that uncertainty is inherent in any observation, and that this uncertainty can sometimes be quantified. Is that it?

Yes, I think that's close to the problem, though not the root yet. I see so little uncertainty in normal behavior -- and normal perception -- that your emphasis on it seems misplaced.

I would look at the observation "I see so little uncertainty in normal behaviour" and ask why subjective perception has this characteristic when moment-by-moment signal values in any physiologically measirable channel are so very noisy. It's an odd phenomenon, though one I verify from personal experience, that the world does seem precise in the face of all the underlying noise. I find your emphasis on avoiding consideration of uncertainty to be just as much a personal preference as is my interest in examining its consequences. De gustibus non est disputandum, or something like that.

It takes a real effort to come up with examples of uncertainty, and they are vastly outnumbered by the examples of perception, hence behavior, in which the experiences are clear, sharp-edged, repeatable, and apparently free of random variation.

The key word there is "apparently". All communication channels are subject to the laws of nature, and so far as anyone has been able to determine, if something can be described mathematically well enough, then mathematically derived conclusions will be applicable. One of those is that precision of measurement depends on bandwidth and time. If an observation seems to be precise, of what is it a precise observation? If it is an apparently precise observation of something in a presumed real-world, then its real (as opposed to apparent) precision is limited by those criteria.

There is, of course, always some degree of noise under the signal, but it's a small fraction of the signal under normal circumstances.

Really? At what rate do you make this kind of statement? That "normal circumstances" involve an observation time sufficient to allow a reasonably precise observation? Then it's a tautology, not a useful statement.

Of course you can always set up situations where the noise level is deliberately increased to be a significant fraction of the signal, and then the statistical properties of perception and control will become visible. There is a place for studying those phenomena. But they don't much interest me now because we're still at the stage of developing PCT where demonstration of ordinary phenomena is the most important task.

"They don't interest me now" is quite legitimate. They do interest me, and I think that is also quite legitimate.

I think we're a long way from needing high-level generalizations and are very short of concrete and indisputable evidence that will convince people that PCT is here to stay.

I take it that you are using "high-level generalizations" in a pejorative sense, because what you call "high-level generalizations" are what I call "laws of nature" that so far as we know account for phenomena observed universally in all aspects of the world. If one can apply the laws of nature so as to offer an envelope of possible behaviours of things being modelled, or to provide idealized limits on possible performance, that seems to me to be useful.

I'm not a fan of high-level generalizations anyway, as you know. I think they beg a lot of questions, since they are drawn from specific phenomena and processes which can't be explained by using the very principles that are drawn from them.

Now you are going overboard.

Energy and entropy are not fundamental concepts; they are general concepts drawn from the way objects are observed to behave.

Energy, perhaps. Although an awful lot of very subtle predictions (such as the existence of neutrinos) have been derived from the principle of the conservation of energy (mass-energy, for the last 100 years; perhaps something more refined 100 years from now). However, the shift from quasi-observed conservation of energy to conservation of mass-energy was not derived from observation but from mathematized thought, and was used to predict the possibility of atomic power. Not bad for a "high-level generalization", I think.

The observed relationships among temperatures and properties such as thermal conductivity and heat capacity are what they are; they are not produced by thermodyamic principles or the concept of information or any of those abstract ideas. It's the other way around; information, entropy, and energy are a sort of conceptual averaging of the specific phenomena we observe.

Entropy isn't. A concise statement of the idea is that in the absence of external influences, a system is more likely to evolve from an improbable state to a probable one than the reverse. It's a mathematical statement that happens to provide predictions that agree with observation. Of course, the original idea came basically from observation, but then so did almost everything we understand about anything. The generalizations allow us to apply the concepts to novel situations, given the appropriate parameter values for the new situation.

We lose information in going from observational data to the generalizations, which is why we can't get back from the generalizations to predictions of observations.

However, an appropriate parameterization does allow us to go from "generalization" to predictions of observations, which is how Newton managed to provide more accurate predictions of planetary motions than was possible for Ptolemy. If you tell me how high an object is from the ground, I can tell you how long it will take to hit the ground if I drop it in a vacuum, using Newton's "generalization". But you have to provide the appropriate parameter values. Tell an aerodynamicist its shape and weight, and he probably will be able to tell you how quickly it will hit the ground when dropped through air.

I assume, however, that what you want to say is that only observations of specific real or simulated entities should be mentioned, and that any attempt to use those observations to understand some other related entity is invalid. That being the case, I wonder why we have had all those discussions about the "high-level generalization" of the effects of loop gain and loop delay on the "high-level generalization" called control stability.

I know I'm being excessive, here, but I think you are way beyond the bounds in the same direction.

It seems to me that generalizing and modeling work in exactly opposite directions. When we generalize, we're looking for concisely-stateable principles or categories which are deriveable from specific observations. When we model, we're looking for entities from which we could derive the specific phenomena we actually observe.

When we model, we are doing two things (or I would be), in different balance on different occasions. We may be wanting to test out a generalization we have made from observations of other models or other parameter values, to see how well it works in new circumstances. Or we may be wanting to see how a real system built according to the model will work before it is constructed (as in designing a new airliner). In this latter case, we use the "high-level generalizations" from, say, aerodynamics and thermodynamics to ensure that the model really will be emulated by the real aircraft when it is built.

That's probably the main reason I see concepts like information and entropy as the wrong way to achieve what I want to achieve.

If you had said "for me to achieve", I would have no quibble. But you put it that it is the wrong way for anybody to go, and that I cannot accept. No such direction of science by fiat should be acceptable. If I can act as a mirror, it's the wrong way to encourage the development of the science.

I want to go in the direction from measurements of temperatures and masses to a kinetic theory of heat, and not in the direction from measurements of temperatures and masses to thermodynamics. The former direction leads to explanatory and predictive theory; the latter leads only to after-the-fact descriptions and explanations.

I don't understand the difference. It seems to me you said the same thing twice. Or are you thinking that thermodynamics is unrelated to a kinetic theory of heat?

That's getting pretty close to what I see as the problem here.

If I can paraphrase: "I don't understand how information theory and entropy analysis can help me do what I want to do, and therefore nobody should investigate how it might."

I hope this message is no more outrageous than yours. And that it will help to clear up the mystery as to why my message that consisted so largely of agreement with you led you to say you disagreed with almost everything in it.

Martin

[From Bill Powers (2008.12.15.1324 MST)]

Martin Taylor 2008.12.15.14.27 –

On first reading, I found your
message to be very strange, and I still see it as rather strange. You
seem to argue against the applicability of natural law to observed
phenomena, or perhaps even to the notion of the “laws of
nature” in principle.

If you mean that I argue against, for the example, Newton’s law of
gravitation, the answer for that is no – that is modeling, and obviously
I accept that as a way of explaining and predicting natural phenomena.
Newton proposed that there is an unseen force accelerating every bit of
matter toward every other bit of matter according to a specific and quite
simple law, the inverse square law. We can adjust the parameters of this
model until the model behaves as nearly like real pieces of matter as
possible, and the fit is very good for velocities well below the velocity
of light. The inverse square model came out of Newton’s imagination, and
it works so well that there must be some regular relationship between
that law and reality. Of course we don’t know what that relationship
is.

There is no need to invent a abstract “field” called
“gravity.” In its basic meaning, a gravitational field is
simply a map of vector forces that would be measured at various places in
space by moving a very small bit of matter around. It isn’t literally
there in the space between objects. A gravitational field is a prediction
from Newton’s model of gravity. The idea of a field is an abstraction
which, however convenient, is unnecessary for computing orbits or
predicting the flight of cannonballs. In fact, it doesn’t appear in any
calculations of such things. The gravitational field is entirely
contained in the inverse-square law.

There are different levels of “laws of nature” (which are, of
course, all human-made). Consider the kinetic theory of heat, observed
heat phenomena, and thermodynamics. The first and third are invented
theories; the middle one is the phenomenon they purportedly explain.
Kinetic theory is a model; thermodynamics is an abstraction – a useful
one in certain applications, of course, in the same way that matrix
algebra is useful as a way of handling vectors and simultaneous
equations. But thermodynamics does not propose anything that actually is
supposed to exist in nature that causes the phenomena we observe. The
second law of thermodynamics is a summary of observations, not a proposed
mechanism. Nobody has ever, to my knowledge, proposed a model to explain
why entropy increases. When you look at heat phenomena through entropy
glasses, you discover that this function of observable variables
increases. It’s not an observable variable itself and has no causal role.
It describes, but it explains nothing.

I think that energy and information and entropy are abstractions that
have their uses but are not useful for explaining or predicting
phenomena. If they are used for prediction, that’s only because the
process of prediction uses the empirical laws found at the level of
phenomena. They do not propose any underlying mechanisms which, if they
really existed, would make the phenomenal world necessary.

Yes, I think that’s close to the
problem, though not the root yet. I see so little uncertainty in normal
behavior – and normal perception – that your emphasis on it seems
misplaced.

I would look at the observation “I see so little uncertainty in
normal behaviour” and ask why subjective perception has this
characteristic when moment-by-moment signal values in any physiologically
measirable channel are so very noisy.

Yes, that’s what I was referring to. That is the level of direct
experience to which all theories must be subservient: any theory that
contradicts direct experience – that says you can’t be experiencing what
you’re experiencing – is wrong.
Perceptions appear noise-free in the middle and upper ranges of their
variations. They begin to become noisy when the intensity of the
underlying stimuli is reduced enough, which tells us that there is indeed
noise, but that over most of the range of intensities it is too small to
make any difference. This in turn tells us that if we seem to find a lot
of noise in neural signals, we aren’t measuring them the right way, or
else we are failing to see the regularities in them. When we observe
neural signals the right way – using our own awareness to examine the
signals in our own brains – we see the regularities and practically
nothing random.
On my desk there are four new cordless telephones charging up, a base
system and three remote units. As I understand it, they communicate in a
strange way, using a subcarrier that varies in a complex pattern over the
entire alloted radio frequency band for this kind of service. This is a
“spread-spectrum” system. Via WIKI we have:
"Frequency-hopping spread spectrum (FHSS) is a method
of transmitting radio signals by rapidly switching a
carrier among
many frequency

channels
, using a
pseudorandom
sequence known to both
transmitter and
receiver.
"

The result is that each station picks out its own channel and detects a
perfectly regular signal, even though a broadband spectrum analyzer would
see nothing but random noise. That’s analogous to I what I think must be
going on in the brain: we don’t know the brain’s scheme for transmitting
and receiving signals, so what we measure with oscilloscopes and EEGs
looks random but is clearly – from the standpoint of awareness – not
random. What appears to be noise is not noise. As soon as we understand
the organizing principle, the apparent noise will disappear.

I hope that makes my position a little clearer, though I wish it were
clearer than it actually is.

Best,

Bill P.

[From Bill Powers (2008.12.16.1455 MST)]

Martin Taylor 2008.12.15.13.39] –

[From Bill Powers
(2008.12.15.1324 MST)]

There are different levels of “laws of nature” (which are, of
course, all human-made). … The second law of thermodynamics is a
summary of observations, not a proposed mechanism. Nobody has ever, to my
knowledge, proposed a model to explain why entropy increases.

The name “Boltzmann” springs to mind. After Boltzmann, the
question goes the other way. It becomes one that applies to pretty well
all phenomena that Kelvin would have agreed to belong to
“Science”. Why is it that the laws of mathematics so
phenomenally well apply to observations of the natural world? To take an
extreme example, how was it possible to predict and observe a few flashes
deep underground, more or less coincidentally with the observation of a
new star in the sky?

Our model tells us that supernovas emit gamma rays and high-energy
particles as well as light. Those things (including the events and
processes we think of as a supernova as opposed to a dot in the sky that
gets brighter) are part of a big model. It is the model that tells us to
expect certain particles emitted by a supernova to penetrate the ground
and produce flashes that we can detect. We could make that prediction
without doing any mathematical analysis.
We’ve been working on this model a long time and continually adjusting
and readjusting its properties to make the model behave more and more
like the world we experience at those few points where we can make
observations. It’s no accident that it predicts so well. Also, when we
measure things, we use the model to interpret the raw data, so the model
is also part of the data we’re checking against the model. I wouldn’t be
surprised if some of the startlingly good predictions of the model aren’t
simply the result of proving A = A by a long roundabout route that we
haven’t noticed.
But I’m not trying to downgrade science or the uses of mathematics. My
concept of mathematics is not mystical; I think of it far more as
descriptive than as having some magical relationship to reality. Maybe
there’s more than meets my eye here, but I don’t see how a product of a
brain could somehow have anything fundamental and a priori to do
with things outside the brain. Other than that, I don’t have any
surprising insights about the subject.

I think the real meat of our discussion here is the other point, the one
to which you didn’t reply in this post. The perceptions we experience are
mostly noise-free and thus not, in themselves, very uncertain just as
signals. We may be uncertain about their meanings, but that’s a different
matter as I’m sure you would agree. I think this means that the apparent
noise levels measured in neural signals using EEGs and other electronic
means are illusions or artifacts of the way we make the measurements. If
you’re looking at a pulse-frequency-coded signal representing a varying
environmental phenomenon, it may well look pretty random since you don’t
know what it represents.

Best,

Bill P.

[From Kenny Kitzke (2008.12.12)]

Below is what I gleaned from the “seat at the table” site regarding what President Elect Obama should do about the struggling US Economy. Here we have apparently the only eight recommendations made so far. Look carefully at their thrust on what should be changed to strengthen the US economy. I classify them as follows:

4 Improve Energy Supply with Environmentally Sound Sources

3 Reduce Carbon Fuels and Global Warming

1 Use Renewable Energy Sources

2 Improve the Infrastructure

Invest in rail transportation (that’s the first one without the blue link)

Invest in fresh water supplies

1 Reform our High Schools

1 Trade Policy

I guess the last sounds like a change in the economic system. But, where are the truly economic system recommendations? Is there anyone with ideas about how to change the federal reserve system, government taxation, government deficit spending, government regulation, government anti-trust law, government labor laws, government subsidies, government foreign aid, reducing the size of government, etc., that might have big impacts on economic performance? Is more of what hasn’t worked the answer?

Bill Power’s had a pure economic system play: develop a model of the economy based on human behavior that is reliable to test what works. Wow! Will it make the transition team’s list? Fat chance, I suppose.

···

+++++++++++++++++

Eight Economy Recommendations:

Rail

“A common theme running through all these challenges is the vital need to reinvest in America to ensure the future health of our economy, our people, and our planet.�

An American Voice for the Clean Energy Century: The Innovation Agenda
“Retooling the global economy for a low-carbon and environmentally responsible future must begin immediately.�

Composites for Renewable Energy
“In today’s global economy, the United States can boast about our high productivity rates (needed to offset high labor costs) and world-leading innovation.�

University of California
“We are living in a time of vibrant debate about the high school—debate about its purpose and structure, its curriculum, its pplace in the early Twenty-First Century’s economy and social structure.â€?

PI Recommendations for the next president
“Safe and adequate fresh water resources are central to the economy, foreign policy, and security of the United States.�

ITI Trade Policy Priorities
“US information-technology workers and companies now compete in a globally integrated economy where the majority of our customers, fastest growing markets and fiercest competitors are overseas.�

1Sky Letter to President-Elect Obama
“You were elected, in part, because you advocated for bold and immediate action to fight climate change and transform our carbon-based economy into a 21st century sustainable green economy.�

Recommended Climate and Energy Priorities for the Obama Administration
“To revitalize our faltering economy and meet the immense challenges of global warming, we must transform the ways America and the rest of the world produce and use energy.�

In a message dated 12/12/2008 9:37:59 A.M. Eastern Standard Time, nickols@ATT.NET writes:

http://change.gov/open_government/yourseatatthetable


Make your life easier with all your friends, email, and favorite sites in one place. Try it now.

[Martin Taylor 2008.12.12.13.55]

[From Rick Marken (2008.12.12.0930)]

The economy is not an open-loop system, where investment causes production that causes consumption. It's that open loop system concept, that views investment as the ultimate cause of consumption, that has gotten us into the mess we're in.

But the economy IS an open-loop system. You are talking only about one kind of loop within a larger flow of energy and entropy. Everything we have or use is (low-entropy) structure derived from the flow of energy from (usually) the sun through the Earth and the living systems on the Earth and out again to space. If you start with the idea that there is a possible steady-state loop somewhere, without taking into account that it is maintained by this open-loop energy flow (even if there are some multi-hundred-million year lags in places), then you will always come up with dubious answers. If you concentrate on money flows, you will be even more wrong (not that I'm saying you-Marken is doing that, but a lot of economic theory seems to).

Martin

[From Rick Marken (2008.12.12.1120)]

[Martin Taylor 2008.12.12.13.55)

Rick Marken (2008.12.12.0930)

The economy is not an open-loop system, where investment causes production that causes consumption. It’s that open loop system concept, that views investment as the ultimate cause of consumption, that has gotten us into the mess we’re in.

But the economy IS an open-loop system. You are talking only about one kind of loop within a larger flow of energy and entropy.

Right, the closed one;-)

Best

Rick

···

Richard S. Marken PhD
rsmarken@gmail.com

[From Rick Marken (2008.12.12.1130)]

Kenny Kitzke (2008.12.12)

But, where are the truly economic system recommendations? Is there anyone with ideas about how to change the federal reserve system, government taxation, government deficit spending, government regulation, government anti-trust law, government labor laws, government subsidies, government foreign aid, reducing the size of government, etc., that might have big impacts on economic performance? Is more of what hasn’t worked the answer?

No, I think more of what HAS worked is the answer. What has worked is government infrastructure investment (which Obama plans to do so I don’t have to suggest it) and highly progressive taxation to pay for it (which Obama might be afraid to try given that all his economic advisers will probably tell him that he shouldn’t increase taxes, even on just the higher brackets, during an economic downturn). Of course, sensible regulation of financial industries should return. The deficit should be reduced but that’s not a priority now; it will go down as tax revenue increases from increased emplyment and, hopefully, sharply nicreased tax rates for the upper brackets. Free trade has to be changed back into fair trade. And foreign aid should be substantially increased (this could be done by cuting defense spending proportionately). Oh, and both the war on drugs and the war on terror should be called off mimediately.

Maybe I’ll go to that site and suggest some of these thnigs to him.

Best

Rick

···


Richard S. Marken PhD
rsmarken@gmail.com

[From Martin Lewitt (2008.12.16.0326 MST)]

[Martin Taylor 2008.12.14.11.31]
> [From Bill Powers (2008.12.13.1546 MST)]

*** snip ***

You miss the key point, that even with a single simple control loop, the
requirement for energy to drive the forces that counter the disturbance
ensures that the system is non-linear unless the energy source is
infinite. Why this matters is that when the simple control loop exists
in an environment that contains other such loops whose actions affect
either the environmental feedback function or the disturbance,
non-linearity is almost sure to make the dynamics of the system become
chaotic.

*** snip ***

Any why isn't the energy source infinite? Isn't "indefinitely extensible" close
enough? The federal reserve's current method of creating money is
through credit in the fractional reserve system, or though buying assets.
But they have been falling behind the deflation, as getting banks to lend
and consumers to borrow into an expectation of recession is "like
pushing on a string". If the all Americans had debit accounts that the
federal reserve could put money into (out of thin air) until inflation to
counter the deflation HAD to happen, wouldn't that be your "infinite" energy
source? I'm not sure the federal reserves task of control contracts to
linearity however.

The consumers would be deciding winners and losers in the economy,
the amount of credit needed to sustain growth would be reduced, the
reserve requirements of banks could be raised, and fractional reserve
banking could even be outlawed. The Fed could raise interest rates,
and as long as runaway inflation could be avoided, returns might be
high enough to get Americans to start saving again. The recovery
would be uneven, while the economy adjusts, housing and asset
prices would start to recover as defaults decreased and some of
the money was invested rather than just spent. The only downside
I can see is the learning curve for the fed, but having an economy
running on savings and equity rather than leverage and credit would
seem to be worth the risk.

-- MartinL

···

-------------- Original message ----------------------
From: Martin Taylor <mmt-csg@MMTAYLOR.NET>