4 ms·

That theory falls under the Econ 101 fallacy -- assuming perfect information dispersal, instant job-switching, instant production ramping.. "First, let's assum

by jbooth 9y ago

That theory falls under the Econ 101 fallacy -- assuming perfect information dispersal, instant job-switching, instant production ramping.. "First, let's assume the cow is a sphere".

arcanus 9y ago
> "First, let's assume the cow is a sphere". It is worse than that, because at least physics is validated by experimental data. Much of (macro in particular) Economics is a set of axioms that are seldom predictive.
- pm90 9y ago
  And yet, people swear by them as though they have the same validity as physics. I never really understood that mentality.
  - sfifs 9y ago
    That's because they're what people _believe_ - their politics - an act of faith not dissimilar from religion. The set of econ axioms people espouse demonstrates their own world view - what they stand for. In a previous age, these would be moral principles and social norms - now it's political beliefs.
    - pm90 9y ago
      This is an interesting point, and I've been giving this a great deal of thought. The United States is surprisingly religious for a developed Western Nation, and my theory is that if people can be brainwashed into accepting things "on faith", then that can be extended to other things as well, such as facts. Maybe that can explain the huge numbers of climate change deniers, anti-abortionists and other anti-intellectuals in the US?
    - specialist 9y ago
      Beliefs ~= identity. Cite "Democracy for Realists".
  - sadfjhsdf66 9y ago
    Because the monopolies have exerted pressure on public education, including universities, to churn out advocates for the corporations bottom line. With no basis in reality, we've brainwashed people to believe the bottom lines of the elite are to be protected. That's the outcome sought of our educational system. It fascinates me how, on the one hand, we complain about how lazy people are. How much inducement the proles need. "Oh they're just lazy. Push em harder." If we need to push people that hard, perhaps "economy of effort" is built into the species. It's a weird cognitive dissonance. "They want something for nothing! But I want to maintain my elite status built upon your efforts!" But that challenges the basis of elite power. If we all quit producing for them, they lose. So we're "induced to produce" under the constraints they define: no food, shelter, healthcare.
    - pm90 9y ago
      This is unfortunately too close to the truth. One thing I would like to add though is that despite the fruits of labor accruing disproportionately to the elite, the system has managed to lift up everyone else as well, right? So the system does work, and I wonder what would happen if it was changed to be more egalitarian....
      - dragonwriter 9y ago
        > the system has managed to lift up everyone else as well, right? By some measures, all of which fail to account for the fact that relative deprivation is a substantial source of experienced disutility.
        pm90 9y ago
        Its true, but I'm not sure whether I would choose to be born in a Cholera ridden mid 1850's London or the Ghettos of Inner-City Houston today. We've solved some problems and now face others of course, but my question is whether the earlier problems were of a different kind...
      - danbruc 9y ago
        One thing I would like to add though is that despite the fruits of labor accruing disproportionately to the elite, the system has managed to lift up everyone else as well, right? So the system does work [...] That really depends on the definition of »works«. If one is satisfied with the people doing the heavy lifting being a bit better off while a few overseeing everything are extremely better off, yes, then it works.
  - rtx 9y ago
    Because roots of these theories are in Physics. Psychology > Biology > Chemistry > Physics.
- theseatoms 9y ago
  Yes. Macroeconomics is secular theology. The global economy is so vast and interconnected that basically none of the theory can be scientifically tested.
  - HarryHirsch 9y ago
    Apparently at Renaissance Technologies they love hiring astronomers because as an astronomer you are used to modelling systems that are completely beyond human scale based on data from observations that cannot be repeated. No one would argue that astronomy isn't a science. Traditional university macroeconomics is a different beast. Comparison with astrology is apt.
    - candiodari 9y ago
      It might have something to do with that the education for being an astronomer starts with years of postgraduate pure mathematics ...
pdkl95 9y ago
> "First, let's assume the cow is a sphere". "There is a story that has been going around about a physicist, a chemist, and an economist who were stranded on a desert island with no implements and a can of food. The physicist and the chemist each devised an ingenious mechanism for getting the can open; the economist merely said, 'Assume we have a can opener'!"[1] Yanis Varoufakis, after the drama surrounding his (very) brief term as Greek's Minister of Finance describes[2] the problem simply and plainly: "Understanding economics well impedes an understanding the economy." His continued explanation why [ibid] might be the ultimate example of how easy it is to sell bullshit as long as you dress it up properly with the trappings of math/stat/logic. [1] https://en.wikipedia.org/wiki/Assume_a_can_opener https://en.wikipedia.org/wiki/Assume_a_can_opener [2] https://www.youtube.com/watch?v=L5AUAIzciLE#t=1355 https://www.youtube.com/watch?v=L5AUAIzciLE#t=1355

by jbooth 9y ago

That theory falls under the Econ 101 fallacy -- assuming perfect information dispersal, instant job-switching, instant production ramping.. "First, let's assume the cow is a sphere".

arcanus 9y ago

> "First, let's assume the cow is a sphere". It is worse than that, because at least physics is validated by experimental data. Much of (macro in particular) Economics is a set of axioms that are seldom predictive.

pm90 9y ago
And yet, people swear by them as though they have the same validity as physics. I never really understood that mentality.
- sfifs 9y ago
  That's because they're what people _believe_ - their politics - an act of faith not dissimilar from religion. The set of econ axioms people espouse demonstrates their own world view - what they stand for. In a previous age, these would be moral principles and social norms - now it's political beliefs.
  - pm90 9y ago
    This is an interesting point, and I've been giving this a great deal of thought. The United States is surprisingly religious for a developed Western Nation, and my theory is that if people can be brainwashed into accepting things "on faith", then that can be extended to other things as well, such as facts. Maybe that can explain the huge numbers of climate change deniers, anti-abortionists and other anti-intellectuals in the US?
  - specialist 9y ago
    Beliefs ~= identity. Cite "Democracy for Realists".
- sadfjhsdf66 9y ago
  Because the monopolies have exerted pressure on public education, including universities, to churn out advocates for the corporations bottom line. With no basis in reality, we've brainwashed people to believe the bottom lines of the elite are to be protected. That's the outcome sought of our educational system. It fascinates me how, on the one hand, we complain about how lazy people are. How much inducement the proles need. "Oh they're just lazy. Push em harder." If we need to push people that hard, perhaps "economy of effort" is built into the species. It's a weird cognitive dissonance. "They want something for nothing! But I want to maintain my elite status built upon your efforts!" But that challenges the basis of elite power. If we all quit producing for them, they lose. So we're "induced to produce" under the constraints they define: no food, shelter, healthcare.
  - pm90 9y ago
    This is unfortunately too close to the truth. One thing I would like to add though is that despite the fruits of labor accruing disproportionately to the elite, the system has managed to lift up everyone else as well, right? So the system does work, and I wonder what would happen if it was changed to be more egalitarian....
    - dragonwriter 9y ago
      > the system has managed to lift up everyone else as well, right? By some measures, all of which fail to account for the fact that relative deprivation is a substantial source of experienced disutility.
      - pm90 9y ago
        Its true, but I'm not sure whether I would choose to be born in a Cholera ridden mid 1850's London or the Ghettos of Inner-City Houston today. We've solved some problems and now face others of course, but my question is whether the earlier problems were of a different kind...
    - danbruc 9y ago
      One thing I would like to add though is that despite the fruits of labor accruing disproportionately to the elite, the system has managed to lift up everyone else as well, right? So the system does work [...] That really depends on the definition of »works«. If one is satisfied with the people doing the heavy lifting being a bit better off while a few overseeing everything are extremely better off, yes, then it works.
- rtx 9y ago
  Because roots of these theories are in Physics. Psychology > Biology > Chemistry > Physics.
theseatoms 9y ago
Yes. Macroeconomics is secular theology. The global economy is so vast and interconnected that basically none of the theory can be scientifically tested.
- HarryHirsch 9y ago
  Apparently at Renaissance Technologies they love hiring astronomers because as an astronomer you are used to modelling systems that are completely beyond human scale based on data from observations that cannot be repeated. No one would argue that astronomy isn't a science. Traditional university macroeconomics is a different beast. Comparison with astrology is apt.
  - candiodari 9y ago
    It might have something to do with that the education for being an astronomer starts with years of postgraduate pure mathematics ...

pdkl95 9y ago

> "First, let's assume the cow is a sphere". "There is a story that has been going around about a physicist, a chemist, and an economist who were stranded on a desert island with no implements and a can of food. The physicist and the chemist each devised an ingenious mechanism for getting the can open; the economist merely said, 'Assume we have a can opener'!"[1] Yanis Varoufakis, after the drama surrounding his (very) brief term as Greek's Minister of Finance describes[2] the problem simply and plainly: "Understanding economics well impedes an understanding the economy." His continued explanation why [ibid] might be the ultimate example of how easy it is to sell bullshit as long as you dress it up properly with the trappings of math/stat/logic. [1] https://en.wikipedia.org/wiki/Assume_a_can_opener https://en.wikipedia.org/wiki/Assume_a_can_opener [2] https://www.youtube.com/watch?v=L5AUAIzciLE#t=1355 https://www.youtube.com/watch?v=L5AUAIzciLE#t=1355