[Martin Lewitt Dec 12, 2010 1356 MST]
[From Bill Powers (2010.12.12.1120 M<DT)]
Martin Lewitt Dec 12, 2010 0939 MST --
The market is an
emergent
self-organizing system.
That doesn't say much -- all systems with an organization that
changes
over time without external direction are self-organizing. An
abandoned
car in a junkyard is gradually organizing itself into a useful
pile of
iron oxide, in case anyone like a paint manufacturer needs some.
I agree, too much
attempts at
reorganizing has been done, by people who obviously don’t
understand what
they are doing to the system.
Is that a way of saying that you obviously do?
No, it isn't saying that, and I also would not make a blanket
statement that all reorganizing has been without understanding.
Whatever is wrong
with being
“too wealthy”? Perhaps it is a non-problem, like being
too productive, too good at managing resources, too good at
meeting the
demands and needs of others.
If you have to say "perhaps" then you don't know, either. I
didn’t say there is anything wrong with being too wealthy. I just
said
that a person who can’t stop trying to get more wealthy is
obviously not
being satisfied by the results he is getting; otherwise he could
stop
trying so hard.
It is possible to control for a process rather than just results,
some reference values may not be static end points. Or there may be
values higher than retirement and just becoming a consumer. If I
had accumulated wealth, well, I just wouldn’t accumulate it, I would
expect it to be actively employed in the economy and not just
sitting in a vault. Perhaps, it is a reference value from western
Judeo/Christian culture, a responsibility to be a good steward of
the resources under one’s control. In my case, there isn’t enough
wealth in the world to satisfy me yet, we haven’t eliminated the
scourges of cancer, atherosclerosis or aging yet. There are still
near earth objects to be found that may pose an existential threat,
and there is still a lot I don’t know that I am curious about.
A goal of "more" is pathological. We won't know
if there is anything wrong in general with too many people being
too
wealthy until we have a working model that doesn’t depend only on
interesting-sounding words. I was thinking that the presence of
people so
wealthy that they control, for their personal use, tens or
hundreds of
times more buying power than most other individuals control is a
symptom
of something. It’s OK for someone with the required training to
manage
large amounts of money to accomplish large projects that are
needed or
wanted, but that doesn’t explain why individuals seek amounts of
personal wealth that are grossly disproportionate to their
knowlege and skill.
Why do surgeons, for example, demand many thousands of dollars for
putting in an occasional eight-hour day of doing what they were
taught to
do? Is it just the highwayman’s way of persuasion (your money or
your
life)?
Being a surgeon must have some rewards, after all being a forest
service lookout is a much more enjoyable profession. Doctors don’t
all have the same surgical skill, and there is high demand for
surgeons with the highest surgical skill. Government also has
restricted access to the practice of the surgical profession,
decreasing supply. Ask yourself, why would you be willing to pay
more for a better surgeon? Perhaps you wouldn’t for a routine
procedure. The government may have prevented or discouraged many
from becoming surgeons with its restrictions that would have been up
to the task of meeting most surgical needs.
I remind you that a subcontractor who produces twice as many
hubcaps as
needed is being too productive. You can have too much of almost
anything.
That subcontractor would find that such a practice would be
unsustainable unless it was externally subsidized.
Hopefully PCT can
contribute
something, presumably from the bottom up at the micro-economics
level. Surely an attack on economics should succeed
academically
before one proceeds to an attack on the economy itself.
Couldn't agree more. It's simply irresponsible to fiddle with the
economy
without a model to help arrive at a correct understanding of what
is
going on. That’s been my beef for a long time. All this empty
posturing
and pronouncing is sound and fury signifying nothing. And it’s not
so
much PCT that is needed as a simple understanding of how one goes
about
understanding a complex system like a color television set. That’s
the
kind of understanding that led to PCT.
Current theory
about
leverage risk, information and transaction costs indicate that
past and
continuing attacks on the economy have been counter
productive.
No, they don't. They're interpreted that way by people in whose
interest
it is to conclude that they have been counterproductive and should
be
stopped. Even if they’re right, that’s no basis for drawing
serious
conclusions, and is not very likely to be right anyway. It’s too
obviously biased.
I don't see how you justify total denial of economic knowledge.
Denial of the relationships between debt and bankruptcy, between
leverage and financial risk, the greater inflexibility of debt
financing, the greater pricing power associated with monopolies,
banks with greater reserves are less likely to fail, people with
more assets are less likely to default on loans and margin accounts,
people with money are better sales prospects for your goods and
services that people without money, would all be disingenuous of
you.
I doubt PCT will
reverse the
time won understanding the leverage, speculation, and barriers
to
cooperation like protectionism are ultimately
counterproductive.
That is not understanding, it's propaganda -- until you have a way
independent of anyone’s private interest to show why it’s
counterproductive. Understandings based on nothing more than the
time
they have existed are no more useful than random guesses.
There are price differentials between the global price and the price
of goods protected by tariffs, in the past for textiles and current
for ethanol. Some would suggest that this is of public interest
although private interests may vary. If you want to purchase
ethanol or or wanted to purchase clothing it is not a random guess.
I'm working up gradually (very) to proposing that all the people
griping
about the economy make use of Google Docs to construct the design
of a
working model of the economy. Once we have the design the
programming
will be easy. Google Docs offers an interesting change from the
way
arguments are conducted on CSGnet. Everybody gets to edit
everything
until the document satisfies everyone. It sounds like chaos, but
if there
is a committment to a final useful document, it’s interesting how
the
egos calm down and mutual respect and support grow. I believe it
is
actually possible to arrive at a model that is reasonably
satisfactory to
everyone, if that is the intent. When I can find the time, I’ll
get it
started. Or someone else could.
It sounds to much like wikipedia, which has real problems on
controversial topics and on non-controversial topics produces
valuable labors of love. I think the model would have to come first
and prove itself before there would be agreement on a controversial
topic. Witness your own insistence on total denial of economic
knowledge, that would seem to doom the project from the start.
regards,
Martin L
···
On 12/12/2010 12:00 PM, Bill Powers wrote:
Best,
Bill P.
