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Secretary of Polk County Iowa Libertarians here. It's an information theory issue. Information travels at the speed of light or less. Hayek married his cousin

by crb002 8y ago

Secretary of Polk County Iowa Libertarians here. It's an information theory issue. Information travels at the speed of light or less. Hayek married his cousin, but he was right that information transfer over large distances creates huge latencies in CAP theorem analysis of Markets. To me, Austrian just means don't pretend information latency is zero or bandwidth is infinite.

crb002 8y ago
I've been meaning to write an essay on Modern Austrian economics that takes into account results after 1930 from Kolmogorov, Shannon, and CAP theorem. Policies that work at a local level don't scale to a Frederal level. Even with the internet we have meatspace high latency constraints.
- throwawayjava 8y ago
  "...statements made in technical jargon often sound absurd if you forget the underlying definitions." - the article
  - crb002 8y ago
    Kolmogorov had deep insight into bandwidth needed to send information, i.e. the limits of compression. Shannon showed the limits of communication over a noisy channel. CAP teased out constraints on distributed information processing systems over large distances.
    - throwawayjava 8y ago
      Sure. But from none of this does it follow that "Policies that work at a local level don't scale to a Frederal level". Or to put it another way, to the extent that we interpret local and federal and so on formally enough that they retain any connection to information theory, we're no longer talking about politics. The words either have their political meaning or their formal meaning, but pseudomathematical sophistry that conflates formal and informal statements in the same breath leads to quackery and nonsense, which is exactly one of the article's critiques of libertarianism as a framework. The CAP theorem occupies a similar place in pseudomathematics as Goedels theorems. An important result, but almost never for the reasons that someone attempting to use it to make a non-rigorous mathematical argument thinks it is...
f00_ 8y ago
The author (rightly in my view) doesn't group Hayek under Austrian. What you're talking about sounds like transaction costs and information asymmetry, which are interesting. Hayek's work is interesting to me, even as someone who would self describe as a socialist. His decentralized market solution to the economic calculation problem, the information from prices (price signals) tell producers and consumers to increase/decrease supply and demand. But markets aren't perfectly competitive, there are monopolies. Markets are embedded in societies, they don't exist outside of them. Markets don't guarantee an optimal equilibrium. 50% of R&D spending is by the government. He also did early work on neural networks, published The Sensory Order in 1952, 3 years after Hebb's The Organization of Behavior
- crb002 8y ago
  It's deeper than transaction costs. CAP theorem, C being consistency, has many information processing frameworks as "not efficient" in that there is information asymmetry. Add on top this that market information is many times communicated over noisy channels, and that many channels don't have the bandwidth to communicate more than approximations.

by crb002 8y ago

crb002 8y ago

I've been meaning to write an essay on Modern Austrian economics that takes into account results after 1930 from Kolmogorov, Shannon, and CAP theorem. Policies that work at a local level don't scale to a Frederal level. Even with the internet we have meatspace high latency constraints.

throwawayjava 8y ago
"...statements made in technical jargon often sound absurd if you forget the underlying definitions." - the article
- crb002 8y ago
  Kolmogorov had deep insight into bandwidth needed to send information, i.e. the limits of compression. Shannon showed the limits of communication over a noisy channel. CAP teased out constraints on distributed information processing systems over large distances.
  - throwawayjava 8y ago
    Sure. But from none of this does it follow that "Policies that work at a local level don't scale to a Frederal level". Or to put it another way, to the extent that we interpret local and federal and so on formally enough that they retain any connection to information theory, we're no longer talking about politics. The words either have their political meaning or their formal meaning, but pseudomathematical sophistry that conflates formal and informal statements in the same breath leads to quackery and nonsense, which is exactly one of the article's critiques of libertarianism as a framework. The CAP theorem occupies a similar place in pseudomathematics as Goedels theorems. An important result, but almost never for the reasons that someone attempting to use it to make a non-rigorous mathematical argument thinks it is...

f00_ 8y ago

The author (rightly in my view) doesn't group Hayek under Austrian. What you're talking about sounds like transaction costs and information asymmetry, which are interesting. Hayek's work is interesting to me, even as someone who would self describe as a socialist. His decentralized market solution to the economic calculation problem, the information from prices (price signals) tell producers and consumers to increase/decrease supply and demand. But markets aren't perfectly competitive, there are monopolies. Markets are embedded in societies, they don't exist outside of them. Markets don't guarantee an optimal equilibrium. 50% of R&D spending is by the government. He also did early work on neural networks, published The Sensory Order in 1952, 3 years after Hebb's The Organization of Behavior

crb002 8y ago
It's deeper than transaction costs. CAP theorem, C being consistency, has many information processing frameworks as "not efficient" in that there is information asymmetry. Add on top this that market information is many times communicated over noisy channels, and that many channels don't have the bandwidth to communicate more than approximations.