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 Post subject: The Chicago Vs. Austrian School plus
PostPosted: Fri Jun 23, 2017 10:13 pm 
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 Post subject: Re: The Chicago Vs. Austrian School plus
PostPosted: Fri Jun 30, 2017 11:47 pm 
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Not sure if it's Chicago or Austrian.

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 Post subject: Re: The Chicago Vs. Austrian School plus
PostPosted: Sat Jul 01, 2017 11:49 am 
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The difference between those sections of market believers is negligent. Both support the outdated idea of power of the market, invisible hand and perfect information.

All of that is found obsolete and untrue.

So it goes. ;)

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 Post subject: Re: The Chicago Vs. Austrian School plus
PostPosted: Sat Jul 01, 2017 4:26 pm 
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Of course markets have power, there are processes that can seem like an "invisible hand" and there is information. The power is not all powerful, the "hand" is just a analogy and the information is never perfect. But apart from those caveats, how could one even conceive of "economics" without concepts such as these?

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 Post subject: Re: The Chicago Vs. Austrian School plus
PostPosted: Sat Jul 01, 2017 6:30 pm 
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nero wrote:
The difference between those sections of market believers is negligent. Both support the outdated idea of power of the market, invisible hand and perfect information.

All of that is found obsolete and untrue.

So it goes. ;)
Hmmmm, as usual you've made a statement claiming something is a fact without proving it.

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 Post subject: Re: The Chicago Vs. Austrian School plus
PostPosted: Sat Jul 01, 2017 7:07 pm 
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Socialism vs Capitalism?

There is a third way:
Quote:
What is Distributism?
Joseph Pearce

Distributism is the name given to a socio-economic and political creed originally associated with G. K. Chesterton and Hilaire Belloc. Chesterton bowed to Belloc’s preeminence as a disseminator of the ideas of distributism, declaring Belloc the master in relation to whom he was merely a disciple. “You were the founder and father of this mission,’”Chesterton wrote. “We were the converts but you were the missionary…. You first revealed the truth both to its greater and its lesser servants…. Great will be your glory if England breathes again.”[1] In fact, pace Chesterton, Belloc was merely the propagator and the populariser of the Church’s social doctrine of subsidiarity as expounded by Pope Leo XIII in Rerum novarum (1891), a doctrine that would be re-stated, re-confirmed and reinforced by Pope Pius XI in Quadragesimo anno (1931) and by Pope John Paul II in Centesimus annus (1991). As such, it is important, first and foremost to see distributism as a derivative of the principle of subsidiarity.

Continued
http://www.theimaginativeconservative.o ... utism.html

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 Post subject: Re: The Chicago Vs. Austrian School plus
PostPosted: Sun Jul 02, 2017 1:36 pm 
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nero wrote:
The difference between those sections of market believers is negligent. Both support the outdated idea of power of the market, invisible hand and perfect information.

All of that is found obsolete and untrue.

So it goes. ;)


Not quite sure what you are saying here. They don't assume perfect information at all, though some economic models may use perfect information as an approximation.

As for invisible hands, it's emergent behaviour. Individual ants aren't smart, but they follow a few simple rules, which make it look like a collective of ants is smart, when really it isn't.

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 Post subject: Re: The Chicago Vs. Austrian School plus
PostPosted: Mon Jul 03, 2017 3:00 pm 
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EUBanana wrote:
nero wrote:
The difference between those sections of market believers is negligent. Both support the outdated idea of power of the market, invisible hand and perfect information.

All of that is found obsolete and untrue.

So it goes. ;)


Not quite sure what you are saying here. They don't assume perfect information at all, though some economic models may use perfect information as an approximation.

As for invisible hands, it's emergent behaviour. Individual ants aren't smart, but they follow a few simple rules, which make it look like a collective of ants is smart, when really it isn't.

This old school economics is based as strong idealism as communism, but we not living in a perfect world. :(

The Austrian school is based on kind of crowd intelligence, way before the idea of crowd intelligence was established. Mainly for the reason of the insufficient mathematical skills of the practitioners.

So everything is as Deus Vult, man should not regulate the economy in any way. During the downturn, burn down everything, people have sinned. And no government intervention just makes things worse.

And then Keynes came with the idea that it would be a good idea to moderate the amplitude of the business cycle. During high-turn moderate the overheated economy with taxation to fill the coffers for the next downturn. Which will eventually come, and help with public money the people unemployed from the bankrupted businesses. Mathematically it a sound idea. But politically impossible idea in current democracy, just because no government will spoil the party with extra taxation to cool down a over heated economy. So a debt screw is applied, with no buffer resources during the downturn government has to borrow the money for stimulus. Joseph in Egypt story is just a story. Or does it imply that a sensible economic policy can not work in democracy.

More about this crowd intelligence is the optimization method simulated annealing. I studied the method some 30 years ago, but there is no guarantees to find the global optimum, rather the process stucks to a local optimum.

Another thing that is different with crowd intelligence and market economy is that the first is based on independent actors, whole the latter is based on interconnected agents. Which sometimes leads to lemming intelligence.

Image

So it goes.

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 Post subject: Re: The Chicago Vs. Austrian School plus
PostPosted: Mon Jul 03, 2017 3:14 pm 
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nero wrote:
And then Keynes came with the idea that it would be a good idea to moderate the amplitude of the business cycle. During high-turn moderate the overheated economy with taxation to fill the coffers for the next downturn. Which will eventually come, and help with public money the people unemployed from the bankrupted businesses. Mathematically it a sound idea. But politically impossible idea in current democracy, just because no government will spoil the party with extra taxation to cool down a over heated economy. So a debt screw is applied, with no buffer resources during the downturn government has to borrow the money for stimulus. Joseph in Egypt story is just a story. Or does it imply that a sensible economic policy can not work in democracy.


Keynesian economics sounds like a good idea in theory but in practice it's fatally flawed. it's just yet another bit of planned economics which falls flat on its ass because it assumes perfect information and perfect rationality for the planners. And this is simply not the case.

For starters nobody can even agree when there's a boom or a bust about to happen, or even one ongoing half the time. And if there is, how much intervention would be required? A lot? A little? And then we have politicians.

In practice Keynesianism almost inevitably turns into all boom all the time, all spending all the time, for these reasons. Nobody wants to take the punch bowl away.

Quote:
More about this crowd intelligence is the optimization method simulated annealing. I studied the method some 30 years ago, but there is no guarantees to find the global optimum, rather the process stucks to a local optimum.


Yeah, I did some stuff on nature inspired computing.

However an economy is a lot more complicated. You don't worry about crowd psychology when traversing a problem space for example.

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 Post subject: Re: The Chicago Vs. Austrian School plus
PostPosted: Wed Jul 05, 2017 2:56 pm 
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EUBanana wrote:
nero wrote:
And then Keynes came with the idea that it would be a good idea to moderate the amplitude of the business cycle. During high-turn moderate the overheated economy with taxation to fill the coffers for the next downturn. Which will eventually come, and help with public money the people unemployed from the bankrupted businesses. Mathematically it a sound idea. But politically impossible idea in current democracy, just because no government will spoil the party with extra taxation to cool down a over heated economy. So a debt screw is applied, with no buffer resources during the downturn government has to borrow the money for stimulus. Joseph in Egypt story is just a story. Or does it imply that a sensible economic policy can not work in democracy.


Keynesian economics sounds like a good idea in theory but in practice it's fatally flawed. it's just yet another bit of planned economics which falls flat on its ass because it assumes perfect information and perfect rationality for the planners. And this is simply not the case.

For starters nobody can even agree when there's a boom or a bust about to happen, or even one ongoing half the time. And if there is, how much intervention would be required? A lot? A little? And then we have politicians.

In practice Keynesianism almost inevitably turns into all boom all the time, all spending all the time, for these reasons. Nobody wants to take the punch bowl away.
...

Keynesian economics is not planned economy. Planned economy in practice needs state owned production means, like in the late USSR. The Soviet system failed gloriously, the Gosplan did not have enough computing power to solve all the optimization problems. And the more importantly people did their own private micro-optimasation, the middle level management likewise. Usually in form of stealing.

But Keynesian economics is not about micro, but macro. And both monetary and financial tools are available. The Chicago school monetarist accept only the first.

So the monetarist method to help economy out of recession is to lower the interest rate. But when interest rate is reaching zero, just raise hands and accept that all is doomed. ;)

But the Keynesian approach is to put money in the system, borrowed, or preferably from previously accumulated the buffers (Joseph in Egypt). And keep people working, if the private economy is dead, by state financed programs doing something useful for the future, like infrastructure.

And there is no rocket science involved, better too much too early than too little too late.

Compare the US with stimulus vs. Europe with austerity. ;)

EUBanana wrote:
...
nero wrote:
More about this crowd intelligence is the optimization method simulated annealing. I studied the method some 30 years ago, but there is no guarantees to find the global optimum, rather the process stucks to a local optimum.


Yeah, I did some stuff on nature inspired computing.

However an economy is a lot more complicated. You don't worry about crowd psychology when traversing a problem space for example.

In macro there is no details, and in macro you can involve stupidity. Just raise the interest rate enough, the most stupid lemming ideas just die. If not, put a tax on them. :twisted:

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