Social reorganization

[Martin_Lewitt]

[Martin Lewitt Jan 3, 2011 2323 MST]

[From Rick Marken (2011.01.03.1820)]

               Fred Nickols (2011.01.03.1310

MST)–

              Aha! 

I see. And what I see is that you and I have very
different definitions of zero-sum. And what I
described is non-zero-sum.

      I agree. But I think it's not so much that we have different

definitions of “zero sum” as we have different concepts of
where the “sum” – GNP or the “pie” that is the $ value of the
goods/services produced by the economy in some time period –
comes from.

I doubt we really have different definitions.

      Let's think of GNP as a pie (apple, if you please) of a

particular size (let’s start with 10 oz). I see that pie as
the collective result of the efforts of the people who make up
the economy (let’s say there are just two people in the
economy, A and B).

Are you over simplifying a bit?  As cumulative statistic is the

collective resultS of multiple collective and individual efforts or
people that make up the economy, who made varying contributions and
many of whose efforts were actually counter productive.

      So lets say that a 10 oz pie is available to be split by

the two people who made it. Let’s say A (because he is a
competent CEO type who knows how to order people around) gets
9oz and B (who actually knows how to bake pies) gets 1oz.
Obviously at this point this is a zero sum game; if B demands
a larger piece, say 2 oz, then A gets a smaller piece, 8oz.

Obviously not, the pie is a lot more valuable than the ingredients

that he started with unless B is a very poor cook, the sum has
increased.

      Now suppose, after practice, A and B manage to bake a 20 oz

pie. If they split it as they did the 10 oz pie then A gets
18oz and B gets 2 oz. B has gotten twice as much as the 1 oz
he got with the 10 oz pie but I see the situation as still
being zero sum. If B demands more than 2 oz then A will get
less (and vice versa). But you would see this as being a
non-zero sum situation because both A and B get an increase in
the absolute amount of pie. I would agree that this is a
non-zero sum increase if the increase B gets was all B’s doing
and the increase A gets is all As doing. In this case, B could
increase his portion independent of what A does; so the
increase that B gets does not depend on what A gets. This is
like the situation in the example you gave in your earlier
post:

        FN: Let A = 90 and B = 10.  GDP equals

100

        If A increases to 95 and B decreases to 5, GDP still equals

100. Ergo: zero

       sum.
     

You forget that GDP stands for Gross Domestic PRODUCT, i.e., income

or production and not the pre-existing wealth, so it already
represents a nonzero sum game, there is MORE.

        However, if A increases to 100 and B increases to 15, GDP

now equals 115.

        No zero sum.

      Note that this assumes that A and B produce their increases

independently. The sum increases as a side effect of the
increase in the size of the portion produced by A or B or
both. If an economy worked this way then I would agree that it
is a non-zero sum situation. But I don’t think economies do
work this way. I think the size of the pie (GNP) that is to
be divided at any instant by the population that makes up the
economy depends on the joint efforts of everyone in the
economy. So at any instant, the economic pie is like the
“reward” that is to be divided by players A and B in a zero
sum game. What A gets of this pie diminishes what B can get
and vice versa. At any instant the division of the economic
pie – GNP – is zero sum game.

      I think conservatives like the non-zero sum notion of an

economy because they think that individuals are independently
responsible for how much of the pie they produce and, thus,
get. So if the pie is 100 units and A gets 90 and B gets 10
they believe that B could get a larger postion if B just
worked harder and produced more. So if B stopped being so lazy
and started really pushing, Bs share of the pie could go from
10 to 20 units and the GNP would grow from 100 to 110
(assuming A keeps working just as hard as before and gets 90
units again). I think this view of the economy – this
non-zero sum view – is completely wrong. In a highly
specialized economy where many people contribute to the
production of every good and service that makes up GNP, size
of the “pie” depends on everyone working together. So how much
anyone gets of the pie depends not on just their own efforts
but also on the common effort that determined how much total
pie there is. So how much each person gets of that jointly
produced pie is a zero sum game.

      At least, that's how I would incorporate distribution of GNP

into my model economy. I haven’t included that yet but it’s
the next step, if I ever decide to work on it again.

I know you are enjoying this.

regards,

     Martin L

···

On 1/3/2011 7:17 PM, Richard Marken wrote:

      Best regards



      Rick

              I did a little research and my

definition matches what I find “out there.” I don’t
know where you got your definition but it doesn’t fit
with what I know to be zero-sum.

              I guess we’ll just to agree to

disagree.

Regards,

Fred Nickols

fred@nickols.us

From: Control Systems Group
Network (CSGnet) [mailto:CSGNET@LISTSERV.ILLINOIS.EDU ]
On Behalf Of Richard Marken
Sent: Monday, January 03, 2011 11:30 AM

                  **To:** CSGNET@LISTSERV.ILLINOIS.EDU

Subject: Re: Social reorganization

                [From

Rick Marken (2011.01.03.1030)]

                > Fred Nickols (2011.01.03.0710 MST)--

                >>Rick Marken (2011.01.02.2110)--
                >
                >> It's all mathematical,
                >> and very simple math at that: GNP = A + B.

If A increases, B must
>> decrease in order to preserve the sum
(GNP). Zero sum. And that is
>> true even if GNP is a variable.
>
> Let A = 90 and B = 10. GDP equals 100
>
> If A increases to 95 and B decreases to 5, GDP
still equals 100. Ergo: zero
> sum.
>
> However, if A increases to 100 and B increases
to 15, GDP now equals 115.
> No zero sum.

                No, it's still zero sum with a new sum (115). If A's

share increases then B’s must decrease in order to
maintain the sum.

                > The zero sum view of GDP seems applicable only

in terms of viewing GDP as a
> percentage so that A + B must equal 100. In
that case, GDP is not a
> variable; it is a constant of 100%.

                No, it's zero sum whether GDP is represented as an

absolute number or a percentage.

                > What I'm getting at, of course, is the notion

of building a bigger pie, not
> simply cutting up an existing pie.

                As I said in an earlier post, it's zero sum (by

definition; an increase in the proportion of the sum
going to one “player” means a decrease in the
proportion going to another) whether the sum is
constant or variable. By increasing the sum (and
maintaining the relative portions of the sum going
to each “player”) you will increase the absolute
size of the portions of the sum going to each
player. This is what you did in your example. When
the sum was 100, 90 went to A and 10 went to B. When
the sum went to 115, 100 went to A and 15 went to B.
So both player A and B saw increases in the absolute
size of their share of the sum. But this has nothing
to do with the fact that, at any instant, the “game”
is zero sum.

                Of course, in an economy the sum (GNP) is variable;

it goes up and down. As Bill Powers
(2011.01.01.1025 MDT) noted, this fact is pointed
to by conservatives as evidence that the economy is
not zero sum. But this is just redefining the
meaning of “zero sum”. The fact is that, at any
point in time, an increase in the amount of GNP
going to one “player” means a decrease in the amount
going to the other. If the proportion of GNP going
to each player remains constant, then an increasing
GNP (sum) will, indeed, increase the absolute amount
of GNP going to each player. This is the “rising
tide lifts all boats” idea. (This “rising tide”
concept is true, by the way, only if both players
get more than 0% of the sum (GNP); if one player
gets 100% and the other gets 0% then a rising tide
lifts only the boats of the player who has boats,
the one with 100% of GNP. ). But this “rising tide
lifts all boats” notion is completely unrelated to
the fact that the economy at any instant is of
finite size (GNP) and that the more one player has
of GNP at any instant the less the other must
have. That’s zero sum.

                Independent of whether the economy is zero sum

(which is it) Bill Powers (2010.01.03.0742 MDT) has
pointed out how inequitable is the idea that a
“rising tide lifts all boats”:

                BP: Yes,  this is what I was

saying. However, because the pie is divided 9:1, an
increase of 10% overall would, roughly speaking,
come out to a 1% improvement divided among 99% of
the population, or about 0.01% each, and 9% divided
among the remaining 1%, or 9% each. At the
individual level, the ratio is 900 to 1. So every
improvement simply widens the gap in absolute terms.
Did I do that arithmetic right?

                  A rising tide does lift all boats (as long as you

have a boat) but when the relative share of GNP
going to different portions of the population are
quite different, the size of the gain for each
portion is quite different as well.

                Best

                Rick
                --
                Richard S. Marken PhD
                rsmarken@gmail.com
                [www.mindreadings.com](http://www.mindreadings.com)

  --

  Richard S. Marken PhD

  rsmarken@gmail.com

  [www.mindreadings.com](http://www.mindreadings.com)

[rsmarken]

[From Rick Marken (2011.01.04.1000)]

Martin Lewitt (Jan 3, 2011 2323 MST)–

      RM: I agree. But I think it's not so much that we have different

definitions of “zero sum” as we have different concepts of
where the “sum” – GNP or the “pie” that is the $ value of the
goods/services produced by the economy in some time period –
comes from.

ML: I doubt we really have different definitions.

That’s what I said, but to Fred, not you. What I would like from you is your answer to my question about whether you would be willing to experiment with a complete policy change (to a more progressive income tax, a new WPA to improve infrastructure, an increased minimum wage, increased financial regulation, like re-instituting Glass-Steagall) as part of a reorganization process. You seemed very enthusiastic about experimentation but I suspect that your libertarian ideology would limit the kinds of experiments you would be willing to try, making reorganization proceed with one (if not two) hands tied behind its back.

      RM: Let's think of GNP as a pie (apple, if you please) of a

particular size (let’s start with 10 oz). I see that pie as
the collective result of the efforts of the people who make up
the economy (let’s say there are just two people in the
economy, A and B).

ML: Are you over simplifying a bit?

I am simplifying but I don’t think I’m oversimplifying.

ML: As cumulative statistic is the

collective resultS of multiple collective and individual efforts or
people that make up the economy, who made varying contributions and
many of whose efforts were actually counter productive.

You are repeating what I said. Why is what I said “oversimplifying” and yours not? Is it just the part about counter productive people? GNP will be smaller to the extent that there are counter productive people. That doesn’t seem like an added “complexity” that changes anything. GNP is still the result of collective effort, some of it counter productive.

      RM:Obviously at this point this is a zero sum game; if B demands

a larger piece, say 2 oz, then A gets a smaller piece, 8oz.

ML: Obviously not, the pie is a lot more valuable than the ingredients

that he started with unless B is a very poor cook, the sum has
increased.

I don’t see the relevance of this to my point. The pie (actually, its $ value, as per GNP) IS the sum. Of course that sum is greater than the cost of the ingredients. The dollar value fo the pie (the sum) reflects the cost of ingredients (raw materials), equipment (capital) and labor. Same for GNP.

      RM: This is

like the situation in the example you gave in your earlier
post:

        FN: Let A = 90 and B = 10.  GDP equals

100

        If A increases to 95 and B decreases to 5, GDP still equals

100. Ergo: zero

       sum.
     

ML: You forget that GDP stands for Gross Domestic PRODUCT, i.e., income

or production and not the pre-existing wealth, so it already
represents a nonzero sum game, there is MORE.

I know that GDP is the dollar value of what is produced. It also represents income to the aggregate producer. But I don’t see how this means that GDP represents a non-zero sum game. Just saying “MORE” doesn’t really help me understand. Could you explain this in a bit more depth, please.

      At least, that's how I would incorporate distribution of GNP

into my model economy. I haven’t included that yet but it’s
the next step, if I ever decide to work on it again.

I know you are enjoying this.

No I don’t feel so good to see the heartaches you embrace. If I were a master thief perhaps I’d rob them.

Best

Rick

···

–
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[rsmarken]

[From Rick Marken (2011.01.04.1040)]

Rick Marken (2011.01.04.1000)–

RM: I know that GDP is the dollar value of what is produced. It also represents income to the aggregate producer. But I don’t see how this means that GDP represents a non-zero sum game.

Oops. I should have said that GDP (or GNP) is income to the aggregate consumer, which is made up of the “players” in the zero sum game of the economy.

Best

Rick

···

–
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[Martin_Lewitt]

[Martin Lewitt Jan 4, 2011 2327 MST]

[From Rick Marken (2011.01.04.1000)]

        Martin Lewitt (Jan 3,

2011 2323 MST)–

                RM: I agree. But I think it's not so much that

we have different definitions of “zero sum” as we
have different concepts of where the “sum” – GNP or
the “pie” that is the $ value of the goods/services
produced by the economy in some time period – comes
from.

ML: I doubt we really have different definitions.

      That's what I said, but to Fred, not you. What I would like

from you is your answer to my question about whether you would
be willing to experiment with a complete policy change (to a
more progressive income tax, a new WPA to improve
infrastructure, an increased minimum wage, increased financial
regulation, like re-instituting Glass-Steagall) as part of a
reorganization process. You seemed very enthusiastic about
experimentation but I suspect that your libertarian ideology
would limit the kinds of experiments you would be willing to
try, making reorganization proceed with one (if not two) hands
tied behind its back.

                RM: Let's think of GNP as a pie (apple, if you

please) of a particular size (let’s start with 10
oz). I see that pie as the collective result of the
efforts of the people who make up the economy (let’s
say there are just two people in the economy, A and
B).

ML: Are you over simplifying a bit?

      I am simplifying but I don't think I'm oversimplifying.

        ML: As cumulative

statistic is the collective resultS of multiple collective
and individual efforts or people that make up the economy,
who made varying contributions and many of whose efforts
were actually counter productive.

      You are repeating what I said. Why is what I said

“oversimplifying” and yours not? Is it just the part about
counter productive people?

No, it isn't just counter productive people, it was the "collective

result", so I emphasized the plural “resultS”, to make the point
that it wasn’t a collective effort, although there were many
collective as well as individual efforts. That fact that this
statistic was summed over a geographical region we call a nation
doesn’t make it a collective result or effort.

      GNP will be smaller to the extent that there are counter

productive people. That doesn’t seem like an added
“complexity” that changes anything. GNP is still the result of
collective effort, some of it counter productive.

                RM:Obviously at this point this is a zero sum

game; if B demands a larger piece, say 2 oz, then A
gets a smaller piece, 8oz.

        ML: Obviously not, the pie is a lot more valuable than the

ingredients that he started with unless B is a very poor
cook, the sum has increased.

      I don't see the relevance of this to my point. The pie

(actually, its $ value, as per GNP) IS the sum. Of course that
sum is greater than the cost of the ingredients. The dollar
value fo the pie (the sum) reflects the cost of ingredients
(raw materials), equipment (capital) and labor. Same for GNP.

Actually the dollar value represents the market price of the pie,

the costs would have been the same with those same inputs even if
the pie had been ruined and the market price much less.

            RM: This is like the situation in the example you

gave in your earlier post:

              FN: Let A = 90

and B = 10. GDP equals 100

              If A increases to 95 and B decreases to 5, GDP still

equals 100. Ergo: zero

              sum.

        ML: You forget that GDP

stands for Gross Domestic PRODUCT, i.e., income or
production and not the pre-existing wealth, so it already
represents a nonzero sum game, there is MORE.

      I know that GDP is the dollar value of what is produced. It

also represents income to the aggregate producer. But I don’t
see how this means that GDP represents a non-zero sum game.
Just saying “MORE” doesn’t really help me understand. Could
you explain this in a bit more depth, please.

When wealth was considered static, except for perishable things like

crops, then one could only get more wealth by taking it from
another, as in land or gold. Wealth was never completely static,
but the idea is that one could not get more wealth without another
losing wealth. That would be a zero sum game. By my emphasis on
the fact that GDP represents production, that is more wealth than
there was before. It is quite possible for many to get more wealth
without having taken it from others. Some of the economy is a zero
sum game, the lottery for example, or simple transfers of wealth.
But if you have two components of the economy, the poor and the rich
say, and both components are sharing in the increased wealth
(receiving income), then it is not a zero sum game even if you
think the increase in wealth is being shared unequally. Even if the
poor had no share in the increase in wealth at all, as long as there
wasn’t a transfer of wealth from them it is not a zero sum game.

                At least, that's how I would incorporate

distribution of GNP into my model economy. I haven’t
included that yet but it’s the next step, if I ever
decide to work on it again.

I know you are enjoying this.

      No I don't feel so good to see the heartaches you embrace. If

I were a master thief perhaps I’d rob them.

What heartaches do I embrace?  I'm just a glass half full kind of

guy. Just about everybody living outside a war zone today is better
off than their ancestors a few generations and certainly centuries
ago. I already had considerable perspective from history, but what
I’ve learned from genealogical research makes that perspective seem
even more real. Having some children fail to survive to adulthood
was the norm just a couple generations before mine. Even as
murderous and destructive as the 20th century was, hunter gatherer
societies have been found to have a higher overall risk of violent
death. They are hardly the idyllic villages that some idealize.

I'm embracing not the heartaches, but the overall increase in wealth

that have hundreds of millions of people better off than they were
just a couple of decades ago, lifted out of hard life of real
poverty and oppression. I’m not willing to sabotage that to
assuage the consciences of a few that are obsessed with a parochial
relative disparity of little real poverty or import. In that regard
I share the broader perspective of the international socialists.

regards,

    Martin L

···

On 1/4/2011 11:00 AM, Richard Marken wrote:

      Best



      Rick

–

  Richard S. Marken PhD

  rsmarken@gmail.com

  [www.mindreadings.com](http://www.mindreadings.com)

[Martin_Lewitt]

[Martin Lewitt Jan 5, 2011 0258 MST]

Whoops I missed your question in my second reading for my response.

[Martin Lewitt Jan 4, 2011 2327 MST]

[From Rick Marken (2011.01.04.1000)]

          Martin Lewitt (Jan 3,

2011 2323 MST)–

                  RM: I agree. But I think it's not so much that

we have different definitions of “zero sum” as we
have different concepts of where the “sum” – GNP
or the “pie” that is the $ value of the
goods/services produced by the economy in some
time period – comes from.

ML: I doubt we really have different definitions.

        That's what I said, but to Fred, not you. What I would like

from you is your answer to my question about whether you
would be willing to experiment with a complete policy change
(to a more progressive income tax, a new WPA to improve
infrastructure, an increased minimum wage, increased
financial regulation, like re-instituting Glass-Steagall) as
part of a reorganization process. You seemed very
enthusiastic about experimentation but I suspect that your
libertarian ideology would limit the kinds of experiments
you would be willing to try, making reorganization proceed
with one (if not two) hands tied behind its back.

Yes, I'd be willing to do Glass-Steagall,  I'm pretty much resigned

to the banks being regulated utilities, but I would also want to
diminish the level of risk they pose for the economy by
significantly increasing their reserve requirements, and
eliminating the double taxation of equity financing which Democrats
have instituted for their banking and bond trading friends.

I certainly wouldn't consider an increase in progressive taxation,

it is not my right to consider it. I have been willing to consider
a progressive system that offered the protection that at least a
majority and preferably a supermajority of the voters must be at the
top marginal rate. A society where people think they can get
something for nothing and the other guy is who will have to pay is
unsustainable structurally. I assume you mean a WPA with real
shovel ready projects? Wasn’t that what the stimulus was supposed
to be? I’d be willing to consider one paid for by use taxes such as
tolls or gasoline or airline taxes. However, the trust funds from
gasoline and airports landing fees have not been protected from
diversion into the general fund. Too many people have the keys to
the lock box.

I don't think the government is good at experimentation, centrally

planned economies have much bigger problems with “too big to fail”
than we do. Every five year plan, governement department or program
is too big to fail. They develop their own constituencies that
insist that the only problem is they weren’t given enough money.
The US already has too much of that. Freedom is the best platform
for experimentation, and only excludes the coercive part of the
solution space. The coercive possibilities I was willing to
consider are compromises to optimize a system that already has too
much coercion.

-- Martin L

···

On 1/5/2011 12:14 AM, Martin Lewitt wrote:

  On 1/4/2011 11:00 AM, Richard Marken wrote:

                  RM: Let's think of GNP as a pie (apple, if you

please) of a particular size (let’s start with 10
oz). I see that pie as the collective result of
the efforts of the people who make up the economy
(let’s say there are just two people in the
economy, A and B).

ML: Are you over simplifying a bit?

        I am simplifying but I don't think I'm oversimplifying.

          ML: As cumulative

statistic is the collective resultS of multiple collective
and individual efforts or people that make up the economy,
who made varying contributions and many of whose efforts
were actually counter productive.

        You are repeating what I said. Why is what I said

“oversimplifying” and yours not? Is it just the part about
counter productive people?

  No, it isn't just counter productive people, it was the

“collective result”, so I emphasized the plural “resultS”, to make
the point that it wasn’t a collective effort, although there were
many collective as well as individual efforts. That fact that
this statistic was summed over a geographical region we call a
nation doesn’t make it a collective result or effort.

        GNP will be smaller to the extent that there are counter

productive people. That doesn’t seem like an added
“complexity” that changes anything. GNP is still the result
of collective effort, some of it counter productive.

                  RM:Obviously at this point this is a zero sum

game; if B demands a larger piece, say 2 oz, then
A gets a smaller piece, 8oz.

          ML: Obviously not, the pie is a lot more valuable than the

ingredients that he started with unless B is a very poor
cook, the sum has increased.

        I don't see the relevance of this to my point. The pie

(actually, its $ value, as per GNP) IS the sum. Of course
that sum is greater than the cost of the ingredients. The
dollar value fo the pie (the sum) reflects the cost of
ingredients (raw materials), equipment (capital) and labor.
Same for GNP.

  Actually the dollar value represents the market price of the pie,

the costs would have been the same with those same inputs even if
the pie had been ruined and the market price much less.

              RM: This is like the situation in the example you

gave in your earlier post:

                FN: Let A =

90 and B = 10. GDP equals 100

                If A increases to 95 and B decreases to 5, GDP still

equals 100. Ergo: zero

                sum.

          ML: You forget that

GDP stands for Gross Domestic PRODUCT, i.e., income or
production and not the pre-existing wealth, so it already
represents a nonzero sum game, there is MORE.

        I know that GDP is the dollar value of what is produced. It

also represents income to the aggregate producer. But I
don’t see how this means that GDP represents a non-zero sum
game. Just saying “MORE” doesn’t really help me understand.
Could you explain this in a bit more depth, please.

  When wealth was considered static, except for perishable things

like crops, then one could only get more wealth by taking it from
another, as in land or gold. Wealth was never completely static,
but the idea is that one could not get more wealth without another
losing wealth. That would be a zero sum game. By my emphasis
on the fact that GDP represents production, that is more wealth
than there was before. It is quite possible for many to get more
wealth without having taken it from others. Some of the economy
is a zero sum game, the lottery for example, or simple transfers
of wealth. But if you have two components of the economy, the
poor and the rich say, and both components are sharing in the
increased wealth (receiving income), then it is not a zero sum
game even if you think the increase in wealth is being shared
unequally. Even if the poor had no share in the increase in
wealth at all, as long as there wasn’t a transfer of wealth from
them it is not a zero sum game.

                  At least, that's how I would incorporate

distribution of GNP into my model economy. I
haven’t included that yet but it’s the next step,
if I ever decide to work on it again.

I know you are enjoying this.

        No I don't feel so good to see the heartaches you embrace.

If I were a master thief perhaps I’d rob them.

  What heartaches do I embrace?  I'm just a glass half full kind of

guy. Just about everybody living outside a war zone today is
better off than their ancestors a few generations and certainly
centuries ago. I already had considerable perspective from
history, but what I’ve learned from genealogical research makes
that perspective seem even more real. Having some children fail
to survive to adulthood was the norm just a couple generations
before mine. Even as murderous and destructive as the 20th
century was, hunter gatherer societies have been found to have a
higher overall risk of violent death. They are hardly the idyllic
villages that some idealize.

  I'm embracing not the heartaches, but the overall increase in

wealth that have hundreds of millions of people better off than
they were just a couple of decades ago, lifted out of hard life of
real poverty and oppression. I’m not willing to sabotage that to
assuage the consciences of a few that are obsessed with a
parochial relative disparity of little real poverty or import. In
that regard I share the broader perspective of the international
socialists.

  regards,

      Martin L

        Best



        Rick

–

    Richard S. Marken PhD

    rsmarken@gmail.com

    [www.mindreadings.com](http://www.mindreadings.com)

[rsmarken]

[From Rick Marken (2011.01.05.0925)]

Martin Lewitt (Jan 4, 2011 2327 MST)

Rick Marken (2011.01.04.1000)–

      RM: You are repeating what I said. Why is what I said

“oversimplifying” and yours not? Is it just the part about
counter productive people?

ML: No, it isn't just counter productive people, it was the "collective

result", so I emphasized the plural “resultS”, to make the point
that it wasn’t a collective effort, although there were many
collective as well as individual efforts. That fact that this
statistic was summed over a geographical region we call a nation
doesn’t make it a collective result or effort.

I consider GNP (o GDP) to be a collective result because every item that makes up GNP is the joint result of the coordinated activities of many individuals. The stuff in my room here is a tiny subset of GNP: the computer, printer, lamp, clock, books, window shades, the room itself, etc. all exist as a result of the collective/ coordinated activities of many people. So it is impossible to say that X amount of GNP was produced by person 1, Y proportion by person 2, etc.

        >>>ML: Obviously not, the pie is a lot more valuable than the

ingredients that he
>>> started with unless B is a very poor
cook, the sum has increased.

      >>RM: I don't see the relevance of this to my point. The pie

(actually, its $ value,
>> as per GNP) IS the sum. Of course that
sum is greater than the cost of the
>> ingredients. The dollar
value fo the pie (the sum) reflects the cost of ingredients

(raw materials), equipment (capital) and labor. Same for GNP.

> ML: Actually the dollar value represents the market price of the pie,

the costs
> would have been the same with those same inputs even if
the pie had been

ruined and the market price much less.

This is still irrelevant. Of course the market determines the dollar value of GNP (the pie). That same market is determining the costs of the ingredients (raw materials, capital equipment, labor (including profit)) as well. Indeed, the dollar value of GNP reflects what producers must be reimbursed (by themselves as the composite consumer) for the cost of production. Income distribution is about how this GNP income is distributed to producer/consumers. It’s the distribution of GNP across producer/consumers that is zero sum.

        ML: You forget that GDP

stands for Gross Domestic PRODUCT, i.e., income or
production and not the pre-existing wealth, so it already
represents a nonzero sum game, there is MORE.

      RM: I know that GDP is the dollar value of what is produced. It

also represents income to the aggregate producer. But I don’t
see how this means that GDP represents a non-zero sum game.
Just saying “MORE” doesn’t really help me understand. Could
you explain this in a bit more depth, please.

ML: When wealth was considered static, except for perishable things like

crops, then one could only get more wealth by taking it from
another, as in land or gold. Wealth was never completely static,
but the idea is that one could not get more wealth without another
losing wealth. That would be a zero sum game. By my emphasis on
the fact that GDP represents production, that is more wealth than
there was before. It is quite possible for many to get more wealth
without having taken it from others.

But this is just the “lift all boats” idea that Fred was arguing for. I don’t accept the idea that an expanding economy makes distribution of GNP non-zero sum because, at any instant, GNP is a result of the collective effort of everyone in the economy. So it is impossible for any one person in this economy to increase his or her wealth independent of the efforts of nearly everyone else that makes up the economy.

      RM: No I don't feel so good to see the heartaches you embrace. If

I were a master thief perhaps I’d rob them.

What heartaches do I embrace?

Not your own, of course. But those of others. Embracing the increase in childhood poverty rates is what I consider an embrace of heartache. Indeed, your whole “social Darwinist” approach to society is a huge bear hug of misery for others.

I'm embracing not the heartaches, but the overall increase in wealth

that have hundreds of millions of people better off than they were
just a couple of decades ago, lifted out of hard life of real
poverty and oppression.

Nice of you to say so. But it was not conservatism or libertarianism that has lifted people out of poverty and oppression. It is and has always been progressivism that has done it, with conservatives like you fighting progressive policies tooth and nail all the way, as they are today.

I'm not willing to sabotage that to

assuage the consciences of a few that are obsessed with a parochial
relative disparity of little real poverty or import. In that regard
I share the broader perspective of the international socialists.

I’ve never met a socialist of any kind who celebrated the increase in child poverty, let alone an increase in wealth disparity. You know a very interesting group of socialists.

Best

Rick

···

–
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[rsmarken]

[From Rick Marken (2011.01.05.0950)]

Martin Lewitt (Jan 5, 2011 0258 MST)–

        RM: What I would like

from you is your answer to my question about whether you
would be willing to experiment with a complete policy change
(to a more progressive income tax, a new WPA to improve
infrastructure, an increased minimum wage, increased
financial regulation, like re-instituting Glass-Steagall) as
part of a reorganization process. You seemed very
enthusiastic about experimentation but I suspect that your
libertarian ideology would limit the kinds of experiments
you would be willing to try, making reorganization proceed
with one (if not two) hands tied behind its back.

ML: Yes, I’d be willing to do Glass-Steagall

Well, that’s good.

I'm pretty much resigned

to the banks being regulated utilities,

Remember, we’re only experimenting. If the variables that we are controlling for by doing these experiments (variables like the occurrence of speculative bubbles) start getting worse then we can try something different. But I guess you know that reinstating Glass-Seagall would make things better and that’s why you are resigned to it being permanent. Ain’t it a pain when liberal policies work so well;-)

but I would also want to

diminish the level of risk they pose for the economy by
significantly increasing their reserve requirements, and
eliminating the double taxation of equity financing which Democrats
have instituted for their banking and bond trading friends.

A good experimenter manipulates one variable at a time while holding others constant.

I certainly wouldn't consider an increase in progressive taxation,

it is not my right to consider it.

This combined with you interest in making confounding manipulations shows that you are really not that into experimentation at all. And this reluctance to experiment is clearly a result of your ideology.

I have been willing to consider

a progressive system that offered the protection that at least a
majority and preferably a supermajority of the voters must be at the
top marginal rate.

Ideology is biasing your selection of policies again. But I agree that this taxation system should be on the table as an option. It’s not that different from what we have now, though.

A society where people think they can get

something for nothing and the other guy is who will have to pay is
unsustainable structurally.

Again, you are assuming that you know more about how an economy works that you actually know.

I assume you mean a WPA with real

shovel ready projects? Wasn’t that what the stimulus was supposed
to be?

Only partly. It was something like 40% tax breaks, which are useless for job creation. And the projects were not run by the government itself. And it was surely way too small. But it still saved millions of jobs.

I'd be willing to consider one paid for by use taxes such as

tolls or gasoline or airline taxes.

Well, that’s something.

Best

Rick

···

–
Richard S. Marken PhD
rsmarken@gmail.com

www.mindreadings.com

[Martin_Lewitt]

[Martin Lewitt Jan 5, 2011 1100 MST]

···

On 1/5/2011 10:50 AM, Richard Marken wrote:

Remember, we're only experimenting.

But we're experimenting with human subjects. Shouldn't we insist that the experiment only apply to those who have given informed consent for anything coercive?

regards,
     Martin L

[rsmarken]

[From Rick Marken (2011.01.05.1020)]

Martin Lewitt (Jan 5, 2011 1100 MST)–

Remember, we’re only experimenting.

But we’re experimenting with human subjects. Shouldn’t we insist that the experiment only apply to those who have given informed consent for anything coercive?

Yes, but that’s what representative democracy is supposed to be about, isn’t it? Of course, ours is now a plutocracy so the “informed consent” comes mainly from the rich and powerful and those who listen only to their propaganda (“money doesn’t talk, it swears”). But in principle we are a democracy, which means a government based on informed consent. Unfortunately, because of the propaganda, people will only consent to maintain the policies that are making their lives worse (witness the results of the last election). So reorganization has been effectively stopped by propaganda. Here’s a pretty howdydoo.

Best

Rick

···

On 1/5/2011 10:50 AM, Richard Marken wrote:
–
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[Bill_Powers1]

[From Bill Powers (2010.12.30.0945 MDT)]
Hello, all. The appended stuff is part of a reply to a libertarian of the
Mises (Austrian) persuasion. It has some ideas in it that I haven’t had
before, so here they are in case anyone’s interested.
Best,
Bill P.

···

===========================================================================
In my design for a social system, I wouldn’t try to make rules that
everyone has to follow; I’d let the people affected by them make the
rules. I would focus on encouraging reorganization – that is, assessing
whether any policy made things better or worse, and instituting changes,
even random changes, if things are getting worse. And continuing to make
changes until things start improving again. I’d start from where we are
now and try to improve the mechanisms by which we make things better for
ourselves --by which I mean for everybody, including me, not just for
those with the most money and power, which doesn’t include me. This is my
idea of a truly free market.
All of which, more or less, is already happening without any conscious
intent, just because that is how people work anyway. The best we can do
is to make it conscious, and thus organize it a lot better.
The libertarian and anarchist propositions are often sensible and it’s
good to look at them from time to time, and even to adopt some of them to
see what happens. These proposals are, I think, simply evidence of the
reorganizing process as it is done by human beings and other organisms.
When hard times come, change direction! If times don’t start getter
easier, change direction again! When times start to improve, stick with
the new direction as long as the improvement continues. Don’t make the
changes too big or too fast, because it takes time to assess the results.
But there’s no reason to let things get worse too long before changing
again.
Do it this way, and it won’t matter too much whether the changes are good
or bad in unforseen ways (as they always are). Perfection is not a
prerequisite for reorganization. Only a reasonable willingness to change
is required. This is why progress is faster in a free society, even an
imperfect one. The changes are not always for the best, but with
willingness to change, the bad changes needn’t be fatal.
I think this is a constructive, optimistic idea of how we can improve our
society. The main requirement is a willingness to assess dispassionately
whether the state of affairs is improving or getting worse. And close
behind is a requirement that we not perseverate in trying to follow a
particular policy just because it makes theoretical sense, but be ready
to try something else before disaster actually threatens.
The whole point of reorganization is to make natural selection
unneccesary. You don’t need to die to correct a bad choice. Neither do
you need to assess the situation correctly and rationally and predict
exactly what the consequences of any choice will be. Reorganization works
even when nobody understands why things are as they are, as long as we
can tell whether life is getting easier or harder.
Reorganization will continue to be our best bet until the day that we
have a good systematic model from which to predict what will happen if we
choose various directions of change. A systematic model would work much
more efficiently, but until we have one we can use reorganization, which
is messy but reliable – and familiar, since we use it all the
time.
If change is what we need, then we have to give up all our -isms in cases
where we try them and find that the direction is still not what we want.
The one thing that can stall reorganization is clinging to a remedy that
has stopped working, which is likely to happen when one group is
stubbornly fighting against the remedy while another just as stubbornly
is fighting to retain it. Then attention goes to the remedy, just when it
should be going to the consequences of continuing in the same direction.
If life is getting better, does it matter whether we call the system
communism or capitalism, anarchy or dictatorship? It never has mattered
much before. Of course it helps if we consider all the factors
that add up to quality of life, as the members of the Soviet Russian
empire, almost all of them, finally did.

I think that all this is really happening already. It’s just that we need
to remove the obstacles that keep it from working better. Don’t get too
fond of a solution that worked before; be sensitive to the quality of
life in all its aspects, and be ready to try something new if the quality
is headed downward.

==============================================================================

[Dick_Robertson]

[From Dick Robertson,2010,12,30.1148CST]

Beautifully and succinctly put.

Trying to share the same basic ideas I sent Nancy Pelosi a letter while the new tax law was being debated, suggesting she could help the Republicans put their money where their mouth is – about the job-promoting benefits of reducing taxes on the rich (who ostensibly are the only ones who really can create jobs) – by writing into the law a stipulation that, should the claimed drop in unemployment to (say under 6%) not occur by the end of 2012, the old tax rate would be re-imposed for those under the 200k limit.

I didn’t get an acknowledgment.

Best,

Dick R.

···

----- Original Message -----
From: Bill Powers powers_w@FRONTIER.NET
Date: Thursday, December 30, 2010 11:12 am
Subject: Social reorganization

[rsmarken]

[From Rick Marken (2010.12.30.1130)]

Bill Powers (2010.12.30.0945 MDT)--

Hello, all. The appended stuff is part of a reply to a libertarian of the
Mises (Austrian) persuasion. It has some ideas in it that I haven't had
before, so here they are in case anyone's interested.

One of my New Year's resolutions is to use PCT to deal with these
impossibly unpleasant (to me; they probably like each other) people.
And the part of PCT I will use is the imagination connection; I will
simply imagine that they don't exist. I will imagine that the world
is just made up of the people I admire; people who actually want
things to get better for _everyone_, not just for those with money and
power (and that includes many people with money and power). Ah, the
world seems better already.

Your suggestion about focusing on "reorganization" is what I have been
advocating in all my discussions of economics. Since we don't really
understand how the economy works, I think we should be willing to
change policy when things are getting worse. Here's what you say about
it:

> I would focus on encouraging reorganization -- that is, assessing

whether any policy made things better or worse, and instituting
changes, even random changes, if things are getting worse.
And continuing to make changes until things start improving again.
I'd start from where we are now and try to improve the mechanisms
by which we make things better for ourselves --by which I
mean for everybody, including me, not just for those with the
most money and power, which doesn't include me. This is my
idea of a truly free market.

I agree with this completely. The only problem is that this doesn't
really work that well because people have very different ideas about
whether things are getting better or worse. We can see this most
clearly in the discussion of wealth disparity that we had on the net.
Some people (I'll call them the "George Baileys") see the increase in
wealth disparity in the US that started in the 1980s as a clear
example of "things getting worse" because they have a reference for
perceiving a strong middle class. Others (I'll call them them the "Mr
Potters") see the increase in wealth disparity as an example of
"things getting better" because they have a reference for perceiving a
few "competent people" running things for the rest of the rubes.

So we have the George Bailey's calling for a change in policy
direction (a return to more progressive taxation, policies that
discourage moving jobs overseas, strengthen unions, provide a living
wage, policies that regulate financial speculation, etc) and the Mr.
Potters calling for policies that continue in the same direction, only
more so (non-progressive, non-existant taxation, moving more jobs
overseas , even less financial -- and other -- gov't regulation, etc).
So there is a conflict between the Baileys and Potters and that
conflict is clearly being won by the Mr. Potters, who have a much
stronger voice (they own all the media and can now legally buy
elections) and they have been able to convince the Uncle Billys in the
middle to rise up against the George Baileys by convincing them that
the George Baileys are opposed to freedom (after all, George asked
these rubes to leave their money in the bank rather than exerting
their freedom to withdraw it; a bank run is a good example of the
triumph of libertarian "freedom" over liberal cooperation).

So I am not optimistic that things will get better in this country (in
the George Bailey sense of "better") unless we can get rid of the Mr.
Potters. And since I am opposed to violence, I'm getting rid of the
Mr. Potters in my mind.

Have a very Happy New Year. And here's to my imagination becoming
reality (perception;-) in 2011.

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[Martin_Lewitt]

[Martin Lewitt Dec 30, 2010 1711 MST]

[From Rick Marken (2010.12.30.1130)]

Bill Powers (2010.12.30.0945 MDT)--

Hello, all. The appended stuff is part of a reply to a libertarian of the
Mises (Austrian) persuasion. It has some ideas in it that I haven't had
before, so here they are in case anyone's interested.

One of my New Year's resolutions is to use PCT to deal with these
impossibly unpleasant (to me; they probably like each other) people.
And the part of PCT I will use is the imagination connection; I will
simply imagine that they don't exist. I will imagine that the world
is just made up of the people I admire; people who actually want
things to get better for _everyone_, not just for those with money and
power (and that includes many people with money and power). Ah, the
world seems better already.

Your suggestion about focusing on "reorganization" is what I have been
advocating in all my discussions of economics. Since we don't really
understand how the economy works, I think we should be willing to
change policy when things are getting worse. Here's what you say about
it:

  > I would focus on encouraging reorganization -- that is, assessing

whether any policy made things better or worse, and instituting
changes, even random changes, if things are getting worse.
And continuing to make changes until things start improving again.
  I'd start from where we are now and try to improve the mechanisms
by which we make things better for ourselves --by which I
mean for everybody, including me, not just for those with the
most money and power, which doesn't include me. This is my
  idea of a truly free market.

I agree with this completely.

No you don't, Bill is talking about experimentation. That doesn't assume the correct answer. You assume that the European solution is already the correct one.

The only problem is that this doesn't
really work that well because people have very different ideas about
whether things are getting better or worse. We can see this most
clearly in the discussion of wealth disparity that we had on the net.
Some people (I'll call them the "George Baileys") see the increase in
wealth disparity in the US that started in the 1980s as a clear
example of "things getting worse" because they have a reference for
perceiving a strong middle class.

You are taking a nationalistic perspective. Given the size of the United States, there is no reason to take the risk of doing experimentation at this level, a level that is comparable to all of western Europe combined. You ignore the opportunity provided by the states to explore the solution space in many different directions in parallel. You would be able to see that as the preferable choice if you hadn't already decided which is the preferable direction.

Others (I'll call them them the "Mr
Potters") see the increase in wealth disparity as an example of
"things getting better" because they have a reference for perceiving a
few "competent people" running things for the rest of the rubes.

You are the one that presumes to know apriori which direction is best and that the optimization by your norms should be done at the national rather than state, county, city or individual level. Who really has the hubris to assume that the others are "rubes"?

So we have the George Bailey's calling for a change in policy
direction (a return to more progressive taxation, policies that
discourage moving jobs overseas, strengthen unions, provide a living
wage, policies that regulate financial speculation, etc) and the Mr.
Potters calling for policies that continue in the same direction, only
more so (non-progressive, non-existant taxation, moving more jobs
overseas , even less financial -- and other -- gov't regulation, etc).

Excuse me, but the US already has progressive taxation, even a less progressive flat tax is progressive since the wealthy pay more, without necessarily receiving correspondingly more services.

So there is a conflict between the Baileys and Potters and that
conflict is clearly being won by the Mr. Potters, who have a much
stronger voice (they own all the media and can now legally buy
elections) and they have been able to convince the Uncle Billys in the
middle to rise up against the George Baileys by convincing them that
the George Baileys are opposed to freedom (after all, George asked
these rubes to leave their money in the bank rather than exerting
their freedom to withdraw it; a bank run is a good example of the
triumph of libertarian "freedom" over liberal cooperation).

Actually, cooperation was demonstrated without coercion in the Bailey case. One demonstration of the superiority of libertarianism by the standard of tolerance, is that people are free to choose for themselves, whether to live communally or not, whereas, communist governments had little tolerance for capitalists within their midst. Libertarianism is neutral on the individualistic vs communal social organizational choices, the perfect overlying structure for Bill's experimental reorganization paradigm, unless he wants to engage in an extensive exploration of coercive organizational regimes. But certainly he would agree that much of that space has already been well explored and doesn't need to be tried, and that we shouldn't assume that the optimum lies in the European direction.

So I am not optimistic that things will get better in this country (in
the George Bailey sense of "better") unless we can get rid of the Mr.
Potters. And since I am opposed to violence, I'm getting rid of the
Mr. Potters in my mind.

You aren't the first to think that improvements require getting rid of others, the weather undergound in the 60s calculated that there would be a few 10s of millions of diehard capitalists that would have to go before achievement of nirvana.

I'm a little more conservative that Bill, in that, I wouldn't change a working system as lightly, or assume that we know nothing. It would be irresponsibly risky to allow the search to be a random walk, and it would be wasteful to explore solution space that has already been tried. The standards applied should be intellectually honest enough to acknowledge that there have been improvements in middle and lower class life in the US, even in the direction it has been going, consider what life would be like without 24 hour cable or sattelite or internet entertainment or cell phones, or advances in medical knowledge and technology or energy efficiency.

Have a very Happy New Year. And here's to my imagination becoming
reality (perception;-) in 2011.

And to you as well.
    regards,
        Martin L

···

On 12/30/2010 12:31 PM, Richard Marken wrote:

Best

Rick

[Frank_Lenk]

[From Frank Lenk (2010.12.30.12.34)]

Bill – I really liked this. Something to move us beyond competing passionate, logical arguments into more dispassionate experiment and evaluation.

···

Frank

From: Control Systems Group Network (CSGnet) [mailto:CSGNET@LISTSERV.ILLINOIS.EDU]
On Behalf Of Bill Powers
Sent: Thursday, December 30, 2010 10:58 AM
To: CSGNET@LISTSERV.ILLINOIS.EDU
Subject: [CSGNET] Social reorganization

[From Bill Powers (2010.12.30.0945 MDT)]
Hello, all. The appended stuff is part of a reply to a libertarian of the Mises (Austrian) persuasion. It has some ideas in it that I haven’t had before, so here they are in case anyone’s interested.
Best,
Bill P.

In my design for a social system, I wouldn’t try to make rules that everyone has to follow; I’d let the people affected by them make the rules. I would focus on encouraging reorganization – that is, assessing whether any policy made things better or worse,
and instituting changes, even random changes, if things are getting worse. And continuing to make changes until things start improving again. I’d start from where we are now and try to improve the mechanisms by which we make things better for ourselves --by
which I mean for everybody, including me, not just for those with the most money and power, which doesn’t include me. This is my idea of a truly free market.
All of which, more or less, is already happening without any conscious intent, just because that is how people work anyway. The best we can do is to make it conscious, and thus organize it a lot better.
The libertarian and anarchist propositions are often sensible and it’s good to look at them from time to time, and even to adopt some of them to see what happens. These proposals are, I think, simply evidence of the reorganizing process as it is done by human
beings and other organisms. When hard times come, change direction! If times don’t start getter easier, change direction again! When times start to improve, stick with the new direction as long as the improvement continues. Don’t make the changes too big or
too fast, because it takes time to assess the results. But there’s no reason to let things get worse too long before changing again.
Do it this way, and it won’t matter too much whether the changes are good or bad in unforseen ways (as they always are). Perfection is not a prerequisite for reorganization. Only a reasonable willingness to change is required. This is why progress is faster
in a free society, even an imperfect one. The changes are not always for the best, but with willingness to change, the bad changes needn’t be fatal.
I think this is a constructive, optimistic idea of how we can improve our society. The main requirement is a willingness to assess dispassionately whether the state of affairs is improving or getting worse. And close behind is a requirement that we not perseverate
in trying to follow a particular policy just because it makes theoretical sense, but be ready to try something else before disaster actually threatens.
The whole point of reorganization is to make natural selection unneccesary. You don’t need to die to correct a bad choice. Neither do you need to assess the situation correctly and rationally and predict exactly what the consequences of any choice will be.
Reorganization works even when nobody understands why things are as they are, as long as we can tell whether life is getting easier or harder.
Reorganization will continue to be our best bet until the day that we have a good systematic model from which to predict what will happen if we choose various directions of change. A systematic model would work much more efficiently, but until we have one we
can use reorganization, which is messy but reliable – and familiar, since we use it all the time.
If change is what we need, then we have to give up all our -isms in cases where we try them and find that the direction is still not what we want. The one thing that can stall reorganization is clinging to a remedy that has stopped working, which is likely
to happen when one group is stubbornly fighting against the remedy while another just as stubbornly is fighting to retain it. Then attention goes to the remedy, just when it should be going to the consequences of continuing in the same direction. If life is
getting better, does it matter whether we call the system communism or capitalism, anarchy or dictatorship? It never has mattered much before. Of course it helps if we consider
all the factors that add up to quality of life, as the members of the Soviet Russian empire, almost all of them, finally did.

I think that all this is really happening already. It’s just that we need to remove the obstacles that keep it from working better. Don’t get too fond of a solution that worked before; be sensitive to the quality of life in all its aspects, and be ready to
try something new if the quality is headed downward.

==============================================================================

[rsmarken]

[From Rick Marken (2010.12.31.1045)]

Martin Lewitt (Dec 30, 2010 1711 MST) --

  Rick Marken (2010.12.30.1130)

Bill Powers (2010.12.30.0945 MDT)--

BP: whether any policy made things better or worse, and instituting
changes, even random changes, �if things are getting worse.
And continuing to make changes until things start improving again.

RM: I agree with this completely.

ML: No you don't, Bill is talking about experimentation.

OK, I'll pretend you exist long enough to answer some of your
misconceptions about reorganization;-)

Bill is talking about changing policy based on _error_ (a discrepancy
between the way things are and the way things one thinks things should
be). "Experimentation" isn't even a consideration until there is
_error_. And error assumes a reference for the way things should be.
Since I was using the example of wealth discrepancy, reorganization
(in terms of varying policy options; what you call "experimentation")
wouldn't occur unless the existing (perceived) level of wealth
discrepancy differed from one's reference for wealth discrepancy.
Since you seem to have no problem with the existing level of wealth
discrepancy, there is no error for you in terms of this perception and
so there would be no need for you to "experiment".

So what is essential to reorganization is "error" -- a difference
between perception and reference -- as in all control processes (not
"experimentation") . The difference between reorganization and
"ordinary" control is that, in the former, there is no fixed
connection between error and output that reduces error (by the way,
you can see -- and experience -- how this works by doing my demo at
Selection of Consequences). In "ordinary"
control there is such a connection -- such as the "opposing"
connection between error and mouse movement in a tracking task (o =
-e, where e = target-cursor).

So the reorganization Bill was talking about involved making policy
_changes_ when error starts to increase and staying pat with policies
while error is constant or decreasing. The changes that are made to
policy (what you call "experimentation") when error is increasing
could be selected randomly. But this is not essential to the
reorganization process, as Bill indicated when he said that these
policy changes could "even" be random. What is essential is that the
policies selected must _differ_ from the current policies. If you keep
doing the same thing over and over again after an increase in error
then error will never be reduced.

In reorganization, error drives random changes in output only when
there is no basis for biasing the change in output in a particular
direction. This is certainly not the case with economic policy. For
example, if the reorganization process is driven by a discrepancy
(error) between perceived and desired levels of wealth discrepancy,
then we have a pretty good idea of what kinds of policies will reduce
this error ; these are policies that were associated with a reduction
in wealth discrepancy in the past (or in other countries). So we can
bias our initial selection of policies to those that have apparently
worked in the past (or in other countries). Still, if wealth
discrepancy continues to increase after those policies are implemented
then you would change policies again. What's important about
reorganization is that it's a control process; you act to reduce
error. It's not "experimentation" that matters; it's the willingness
to change what you are doing (randomly or systematically) when error
is increasing and stay with what you are doing when error is
decreasing.

By the way, this would suggest that Republicans (and conservatives in
general) are extremely poor at reorganizing in order to reduce error
because their policy option is always the same: reduce taxes. If there
is a surplus then reduce taxes; if there is deficit, reduce taxes; if
there is growth, reduce taxes; if there is a recession, reduce taxes,
etc. One might think that Republicans are not just poor reorganizers
(controllers) but just plain crazy. But I think this is a
misconception based on the assumption that Republicans are controlling
for the kinds of things most decent people are controlling for, like a
better life for everyone in the society. In fact, Republican actions
are perfectly understandable if you assume that they are controlling
for one thing only: making the rich richer. Since the rich continue to
get richer when taxes are maintained at a low rate or reduced, there
is no reason to change this policy; there is no error to drive
reorganization.

So what is essential to understanding reorganization is what is
essential to understanding any control process: the _controlled
variable_. One of my controlled variables is wealth discrepancy; my
reference for it is apparently much lower than yours (if you are
controlling for it at all); indeed, if you are controlling for wealth
discrepancy it seems like your reference for it is much higher than
mine; if you are experiencing any error it's probably because wealth
discrepancy is too low for you. There is no way that reorganization --
no matter how much experimentation is involved -- can lead to a change
in wealth discrepancy that will reduce error for both of us. Since
there seems to be more people like you than me, it looks like the US
will continue on it's course toward becoming the richest banana
republic on the planet.

ML: That doesn't assume the correct answer. �You assume that the
European solution is already the correct one.

As I said above, you don't have to make random changes in order for
reorganization to work; you just have to be willing to change when
error is increasing. If you can bias what would otherwise be random
changes then the reorganization process can be much more efficient. I
do assume that making policy changes in the direction of those used in
Europe are likely to be policies that reduce wealth discrepancy (and,
thus error) because wealth discrepancy in Europe is not nearly as bad
as it is in the US. But, again, of we implement those policies and
they don't reduce wealth discrepancy in the US -- or if they lead to
an increase in error in other variables -- such as the proportion of
children living in poverty-- then we would have to change the policies
again. We must remember that social reorganization is happening in a
multidimensional space. The dimensions of this space (for me) are
wealth discrepancy, childhood poverty, overall poverty, quality of
public education, access to quality health care, general quality of
life, quality of infrastructure, population growth (keeping it a
zero), environmental quality (reduce dependence on fossil fuels), etc.
By the way, don't you notice how hypocritical it is for you to
criticize me for assuming that I know the correct answer when that
criticism implies that you know that it's not. But I've noticed that
conservatives are not particularly skilled at perceiving hypocrisy.

ML: Excuse me, but the US already has progressive taxation, even a less
progressive flat tax is progressive since the wealthy pay more, without
necessarily receiving correspondingly more services.

You're excused (until tomorrow, when no excuse will be necessary since
you won't exist for me). I mean progressive in the old Eisenhower way,
when the top marginal tax rate was over 90%.

ML: Libertarianism is neutral on the
individualistic vs communal social organizational choices, the perfect
overlying structure for Bill's experimental reorganization paradigm, unless
he wants to engage in an extensive exploration of coercive organizational
regimes. � But certainly he would agree that much of that space has already
been well explored and doesn't need to be tried, and that we shouldn't
assume that the optimum lies in the European direction.

Again you are talking about the "means" as though experimenting with
different means is what is important to reorganization. In fact, the
means are important only to the extent that they reduce error. What is
important in reorganization is the existence of error, and error can
exist only when there is a reference for the state of some perceptual
variable. So it's useless to talk about "means" without knowing what
errors we hope to reduce with those means. I think our problem (the
conflict between us) is intractable, not because we have different
ideas about the best means to reduce error (make things better) but
because we have different ideas about what constitutes an error.. And
this is because we are either controlling for different social
variables or controlling for the same variables at very different
levels.

Have a very Happy New Year. And here's to my imagination becoming
reality (perception;-) in 2011.

And to you as well.

Sounds fair. I'll keep you out of my dreams if you'll keep me out of yours;-)

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[Martin_Lewitt]

[Martin Lewitt Dec 31, 2010 1202 MST]

Thanx, the explanation of implications of a singular focus on wealth disparity error aids my understanding. Given that explanation I am extremely happy that you don't have such a singular focus and like myself, you also have control variables in the area of means (your rejection of violence at least personally if not by proxy). I can confirm your speculation that I don't control for wealth disparity, and it would be an error for you to jump to the conclusion that I control for the rich getting richer, although I think it would be wasteful if they didn't employ their wealth, but that is their business, my focus is on the means. I don't approve of the way the Castro or Chavez got wealthy for instance, but it is not the wealth but the means that I find in error. I also disapprove of the way certain politicians and corporations in the US get wealthy, but that is also due to error in means. I also am not purely materialistic in my perception of wealth, there is social wealth, lifestyle wealth, and mental wealth such as you hope to achieve with your New Year's resolution. I don't assume that the one with the most nominal dollars is the wealthiest. Part of my mental wealth, is I don't lose a lot of sleep because someone else has "more". I do have a control variable for those who have less wealth than they might like to have, but I consider producing more wealth and sharing knowledge to be less erroneous means than any coercive transfer of that wealth, and I don't control more for Americans with lesser wealth relative to the more serious poverty in the rest of the world, and I try to have a historical as well as an international perspective on the matter.

best wishes,
    Martin L

···

On 12/31/2010 11:44 AM, Richard Marken wrote:

[From Rick Marken (2010.12.31.1045)]

Martin Lewitt (Dec 30, 2010 1711 MST) --

   Rick Marken (2010.12.30.1130)

Bill Powers (2010.12.30.0945 MDT)--
BP: whether any policy made things better or worse, and instituting
changes, even random changes, if things are getting worse.
And continuing to make changes until things start improving again.

RM: I agree with this completely.

ML: No you don't, Bill is talking about experimentation.

OK, I'll pretend you exist long enough to answer some of your
misconceptions about reorganization;-)

Bill is talking about changing policy based on _error_ (a discrepancy
between the way things are and the way things one thinks things should
be). "Experimentation" isn't even a consideration until there is
_error_. And error assumes a reference for the way things should be.
Since I was using the example of wealth discrepancy, reorganization
(in terms of varying policy options; what you call "experimentation")
wouldn't occur unless the existing (perceived) level of wealth
discrepancy differed from one's reference for wealth discrepancy.
Since you seem to have no problem with the existing level of wealth
discrepancy, there is no error for you in terms of this perception and
so there would be no need for you to "experiment".

So what is essential to reorganization is "error" -- a difference
between perception and reference -- as in all control processes (not
"experimentation") . The difference between reorganization and
"ordinary" control is that, in the former, there is no fixed
connection between error and output that reduces error (by the way,
you can see -- and experience -- how this works by doing my demo at
Selection of Consequences). In "ordinary"
control there is such a connection -- such as the "opposing"
connection between error and mouse movement in a tracking task (o =
-e, where e = target-cursor).

So the reorganization Bill was talking about involved making policy
_changes_ when error starts to increase and staying pat with policies
while error is constant or decreasing. The changes that are made to
policy (what you call "experimentation") when error is increasing
could be selected randomly. But this is not essential to the
reorganization process, as Bill indicated when he said that these
policy changes could "even" be random. What is essential is that the
policies selected must _differ_ from the current policies. If you keep
doing the same thing over and over again after an increase in error
then error will never be reduced.

In reorganization, error drives random changes in output only when
there is no basis for biasing the change in output in a particular
direction. This is certainly not the case with economic policy. For
example, if the reorganization process is driven by a discrepancy
(error) between perceived and desired levels of wealth discrepancy,
then we have a pretty good idea of what kinds of policies will reduce
this error ; these are policies that were associated with a reduction
in wealth discrepancy in the past (or in other countries). So we can
bias our initial selection of policies to those that have apparently
worked in the past (or in other countries). Still, if wealth
discrepancy continues to increase after those policies are implemented
then you would change policies again. What's important about
reorganization is that it's a control process; you act to reduce
error. It's not "experimentation" that matters; it's the willingness
to change what you are doing (randomly or systematically) when error
is increasing and stay with what you are doing when error is
decreasing.

By the way, this would suggest that Republicans (and conservatives in
general) are extremely poor at reorganizing in order to reduce error
because their policy option is always the same: reduce taxes. If there
is a surplus then reduce taxes; if there is deficit, reduce taxes; if
there is growth, reduce taxes; if there is a recession, reduce taxes,
etc. One might think that Republicans are not just poor reorganizers
(controllers) but just plain crazy. But I think this is a
misconception based on the assumption that Republicans are controlling
for the kinds of things most decent people are controlling for, like a
better life for everyone in the society. In fact, Republican actions
are perfectly understandable if you assume that they are controlling
for one thing only: making the rich richer. Since the rich continue to
get richer when taxes are maintained at a low rate or reduced, there
is no reason to change this policy; there is no error to drive
reorganization.

So what is essential to understanding reorganization is what is
essential to understanding any control process: the _controlled
variable_. One of my controlled variables is wealth discrepancy; my
reference for it is apparently much lower than yours (if you are
controlling for it at all); indeed, if you are controlling for wealth
discrepancy it seems like your reference for it is much higher than
mine; if you are experiencing any error it's probably because wealth
discrepancy is too low for you. There is no way that reorganization --
no matter how much experimentation is involved -- can lead to a change
in wealth discrepancy that will reduce error for both of us. Since
there seems to be more people like you than me, it looks like the US
will continue on it's course toward becoming the richest banana
republic on the planet.

ML: That doesn't assume the correct answer. You assume that the
  European solution is already the correct one.

As I said above, you don't have to make random changes in order for
reorganization to work; you just have to be willing to change when
error is increasing. If you can bias what would otherwise be random
changes then the reorganization process can be much more efficient. I
do assume that making policy changes in the direction of those used in
Europe are likely to be policies that reduce wealth discrepancy (and,
thus error) because wealth discrepancy in Europe is not nearly as bad
as it is in the US. But, again, of we implement those policies and
they don't reduce wealth discrepancy in the US -- or if they lead to
an increase in error in other variables -- such as the proportion of
children living in poverty-- then we would have to change the policies
again. We must remember that social reorganization is happening in a
multidimensional space. The dimensions of this space (for me) are
wealth discrepancy, childhood poverty, overall poverty, quality of
public education, access to quality health care, general quality of
life, quality of infrastructure, population growth (keeping it a
zero), environmental quality (reduce dependence on fossil fuels), etc.
By the way, don't you notice how hypocritical it is for you to
criticize me for assuming that I know the correct answer when that
criticism implies that you know that it's not. But I've noticed that
conservatives are not particularly skilled at perceiving hypocrisy.

ML: Excuse me, but the US already has progressive taxation, even a less
progressive flat tax is progressive since the wealthy pay more, without
necessarily receiving correspondingly more services.

You're excused (until tomorrow, when no excuse will be necessary since
you won't exist for me). I mean progressive in the old Eisenhower way,
when the top marginal tax rate was over 90%.

ML: Libertarianism is neutral on the
individualistic vs communal social organizational choices, the perfect
overlying structure for Bill's experimental reorganization paradigm, unless
he wants to engage in an extensive exploration of coercive organizational
regimes. But certainly he would agree that much of that space has already
been well explored and doesn't need to be tried, and that we shouldn't
assume that the optimum lies in the European direction.

Again you are talking about the "means" as though experimenting with
different means is what is important to reorganization. In fact, the
means are important only to the extent that they reduce error. What is
important in reorganization is the existence of error, and error can
exist only when there is a reference for the state of some perceptual
variable. So it's useless to talk about "means" without knowing what
errors we hope to reduce with those means. I think our problem (the
conflict between us) is intractable, not because we have different
ideas about the best means to reduce error (make things better) but
because we have different ideas about what constitutes an error.. And
this is because we are either controlling for different social
variables or controlling for the same variables at very different
levels.

Have a very Happy New Year. And here's to my imagination becoming
reality (perception;-) in 2011.

And to you as well.

Sounds fair. I'll keep you out of my dreams if you'll keep me out of yours;-)

Best

Rick

[rsmarken]

[From Rick Marken (2010.12.31.1745)]

Martin Lewitt (Dec 31, 2010 1202 MST)--

Thanx, the explanation of implications of a singular focus on wealth
disparity error aids my understanding.

Actually I was explaining how reorganization works, using control of
the perception of wealth disparity as an example of the kind of
socio-economic variable that one might want to control by varying
(randomly or systematically) policy options.

�Given that explanation I am
extremely happy that you don't have such a singular focus and like myself,
you also have control variables in the area of means (your rejection of
violence at least personally if not by proxy).

Of course some means (policies) go against my values. My problem with
your approach is that you seem only to control for the means, and the
consequences of implementing those means be damned. At least, the
consequences I care about be damned. For example, besides the fact
that you don't seem to have any problem with the increasing wealth
disparity in the US you also don't seem to care much about the state
of many other socio-economic variables that I think define a civilized
society. You don't seem to care that child poverty has been increasing
again in the US (after decreasing under Clinton), that wages have been
stagnant since 2001, that the health care system in the US is the
worst among the industrial democracies, etc.

�I can confirm your speculation that I don't control for wealth disparity

Both you and Kenny confirmed that wealth disparity is of no concern to you.

my focus is on the means.

I know. To me, this is like focusing only on where the mouse should be
in a tracking task, with no regard to the fact that if you arbitrarily
control the position of the mouse the cursor-target relationship will
not be under control. Controlling the mouse by keeping it in some
arbitrary position is equivalent to your interest in controlling for
taxes being low. The fact that when you achieve this goal other
variables go uncontrolled (like the deficit, wealth disparity,
poverty, etc) seems to be of no concern to you; as long as the means
are at your reference then you're cool with any consequences that may
result.

�Part of my mental wealth, is I don't lose a lot of sleep because someone
else has "more".

Nor do I. I have nothing against wealthy people; some of my best
friends are worth much more than I am. I am happy for them. My problem
with wealth disparity has nothing to do with envy. It has to do with
the fact that the economy is basically a zero sum game. If 90% of GNP
goes to the top 1% then only 10% of GNP can go to the bottom 99%. That
causes unnecessary hardship for people (see The Spirit Level: Why
Greater Equality Makes Societies Stronger, Richard Wilkinson, Kate
Picket). It also removes demand from the circular flow (see Leakage,
T. C. Powers) and it's unnecessary to boot (see The Winner-Take-All
Society: Why the Few at the Top Get So Much More Than the Rest of Us,
Robert Frank, Philip J. Cook).

�I do have a control variable for those who have less wealth than
they might like to have

It's CONTROLLED VARIABLE, not control variable. And what you describe
is not a variable but the state of a variable. The variable is:
desired -actual wealth. You say you are controlling for keeping this
variable near zero (desired wealth is equal to actual wealth). I would
control for this variable as well except that I know that there are
some people who want (and get) so much wealth that it prevents others
from getting anything near the wealth they want. So I'm just
interested in controlling for a more equitable distribution of wealth,
and I'm willing to vary the means (policies) that are used to try to
achieve this goal. That is, I'm willing to experiment. But I think
that conservatives have already demonstrated the means that _don't_
work to achieve this goal: tax cuts and de-regulation. So I can
eliminate those from my experiment.

but I consider producing more wealth and sharing
knowledge to be less erroneous means than any coercive transfer of that
wealth

Producing more wealth and sharing knowledge seem more like
consequences of policy rather than policies. But for the sake of
getting this over with let's say that those are policies. If you
really agree with Bill proposals about reorganization then you should
be willing to change those "policies" and try something new if the
variable you are controlling (desired -actual wealth) keeps moving
away from 0. It looks to me like desired -actual wealth is moving
considerably away from zero for most of the population (foreclosures,
unemployment, low wages, etc) while GNP has been growing (we have been
producing more wealth) and we've been sharing knowledge (whatever that
means) at about the same level as we always have (given the patent
laws). So are you willing to change these policies? If not, then I
would conclude that you don't really believe in the experimentation
that you so enthusiastically endorsed.

Best

Rick

···

---
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[BUSINESS_GAVIN_HERMA]

(gavin Ritz 2011.01.01.15.30NZT)

[From Rick Marken (2010.12.31.1745)]

Martin Lewitt (Dec 31, 2010 1202 MST)--

.

RM says: It has to do with
the fact that the economy is basically a zero sum game.

Show me the inference rules (that trueify this statement) that prove this declarative statement to be true.

If 90% of GNP
goes to the top 1% then only 10% of GNP can go to the bottom 99%. That
causes unnecessary hardship for people (see The Spirit Level: Why
Greater Equality Makes Societies Stronger, Richard Wilkinson, Kate
Picket). It also removes demand from the circular flow (see Leakage,
T. C. Powers) and it's unnecessary to boot (see The Winner-Take-All
Society: Why the Few at the Top Get So Much More Than the Rest of Us,
Robert Frank, Philip J. Cook).

Ive read most of these books and can't find any statement that can be tested to show your above statement is true.

Regards and best wishes for the new year.
Gavin