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The emotions of your dog are not laws of nature. The "true market" is like "no true Scotsman" or "a closed system" or "a spherical cow on a frictionless plane"

The emotions of your dog are not laws of nature. The "true market" is like "no true Scotsman" or "a closed system" or "a spherical cow on a frictionless plane". It assumes something that doesn't exist. In economics the influence of the things it assumes wrongly can be very significant. In physics wrong assumptions can also make the results wrong and a lot of work (or rather most work) is done on checking if all the assumptions are sound and ensuring that the influence of the remaining gaps are negligible. That is something that is hard to do in economics when it involves interactions with the global market. Yes, special theories can be precursors for more general theories.

whatshisface 7y ago
>The "true market" is like "no true Scotsman" or "a closed system" or "a spherical cow on a frictionless plane". Come on, what is physics about then? ;) Even today, systems like my dog are computationally infeasible to predict from the fundamentals, even though everything my dog does is a logical consequence of QED. That's why it is impossible to make progress without assuming a spherical cow and then traveling to every dairy farm in the world in search of the roundest heifer available. In 400 years economists might still be unable to predict recessions, but I think by then the specific and very true theories of today will have had enough time to evolve into general laws that could predict recessions in principle.
- std_throwaway 7y ago
  With regards to your dog, you should look into chaotic systems and the butterfly effect. Chaos here doesn't mean that anything is possible or that each outcome is equally likely. It refers to that the outcome changes greatly for even minimal changes of the inputs. Since we don't know everything at one point in time, we can only make limited predictions about a future state. No matter how precise we measure the system it will still behave chaotically. To some extent this is also true for the economy which contains many feedback loops and meta-stable states. Even if we have the perfect theory it might still behave chaotically and might be as unpredictable as the weather.

whatshisface 7y ago

>The "true market" is like "no true Scotsman" or "a closed system" or "a spherical cow on a frictionless plane". Come on, what is physics about then? ;) Even today, systems like my dog are computationally infeasible to predict from the fundamentals, even though everything my dog does is a logical consequence of QED. That's why it is impossible to make progress without assuming a spherical cow and then traveling to every dairy farm in the world in search of the roundest heifer available. In 400 years economists might still be unable to predict recessions, but I think by then the specific and very true theories of today will have had enough time to evolve into general laws that could predict recessions in principle.

std_throwaway 7y ago
With regards to your dog, you should look into chaotic systems and the butterfly effect. Chaos here doesn't mean that anything is possible or that each outcome is equally likely. It refers to that the outcome changes greatly for even minimal changes of the inputs. Since we don't know everything at one point in time, we can only make limited predictions about a future state. No matter how precise we measure the system it will still behave chaotically. To some extent this is also true for the economy which contains many feedback loops and meta-stable states. Even if we have the perfect theory it might still behave chaotically and might be as unpredictable as the weather.