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There’s a chance I’m doing this a great disservice, but this whole site and subject seems to scream pseudoscience. It seems largely pushed by one guy - Ole Pet
by jl6 3y ago
There’s a chance I’m doing this a great disservice, but this whole site and subject seems to scream pseudoscience.
It seems largely pushed by one guy - Ole Peters. It seems he created the Wikipedia page on this subject. His research is done under the umbrella of the authoritative sounding “London Mathematical Laboratory”, which he founded.
It makes giant claims, like the headline here which seems intended to be read as “mathematics proves collectivism is best” - and yet offers little empirical evidence beyond saying that an abstract mathematical model can tell us something about the real world. Spherical horses and all that.
It even pulls the classic pseudoscience manoeuvre of positioning itself against “mainstream economics”.
Crank until proven otherwise IMHO.
Edit: looks like it’s not just me: https://arxiv.org/pdf/2306.03275.pdf https://arxiv.org/pdf/2306.03275.pdf
Edit 2: he has a Twitter account where he rails against mainstream economics. He’s a physicist.
- NeverFade 3y agoSeems like the good old false Marxist argument, in a sexy new "mathematical" package to appeal to a geeky crowd. I predict it will do extremely well here.
- throwawayqqq11 3y agoYou mean the utterly wrong marxist "accumulation of capital" claim? So ridiculous! There is no $problem in our civilization and it certainly isnt made by our economy or ignorance.
- Kratacoa 3y agohttps://en.wikipedia.org/wiki/Labor_theory_of_value#Criticism https://en.wikipedia.org/wiki/Labor_theory_of_value#Criticis...
- throwawayqqq11 3y agoCould you instead show me some value which was not produced by labour please?
- amanaplanacanal 3y agoAren’t there always three pieces though? There is 1. Coming up with an idea, 2. Organizing the capital and labor to realize the idea, and 3. The labor to build the thing. Sometimes, that is all one person, but all three pieces are necessary.
- Kratacoa 3y agoThis question seems to misunderstand the topic. The assumption here is not that there is no labor involves, but rather that it its amount is not what determines the value of something it's been put towards.
- throwawayqqq11 3y agoYou misunderstood my answer. I wanted to show that labour is the foundation of all value. Weather this labour gets payed equally to the trade value is a follow up question, not tackled by your wikipedia link either but very important to discuss accumulation of capital. And i was really interested in finding some value independent from labour. Let me try again: Accumulation of capital?
- consilient 3y agoIt has nothing to do with Marxism, it's just hyped-up mutual insurance.
- littlestymaar 3y ago> and yet offers little empirical evidence Well, it's not like mainstream econ cares about empirical evidences either… Also the track record of Welfare state vs “supply side economics ” is a good one here.
- Kratacoa 3y ago> Well, it's not like mainstream econ cares about empirical evidences either... Mainstream economics is tested against the real world, both through policies that assume certain models and against historical data.
- generic92034 3y agoAnd how well does that work, unless you are picking the winning economist opinion in hindsight? For any currently open economical topic you will find diverging or even contradictory opinions by well-established economists. Some of them are bound to have been right, after the fact.
- littlestymaar 3y agoI wish it did. If it did, we would have finally gotten rid of most of the monetarist bullshit after it was steadily proven wrong by 2 decades of QE and zero interest rates in Japan and one decade in the western world… But it doesn't and now the theories that have been empirically wrong for two decades are still in used to explain the current inflation rate… That's the biggest issue with how mainstream economics works: it mostly stands on two legs (classical and Keynesian, roughly) which are both proven wrong by the real world on a regular basis but come back in flavor when the other one fails (and the Neoclassical synthesis is the wrong approach to this problem, and is in fact wrong twice as often).
- Kratacoa 3y agoTo me it seems that it's an issue with the political class rather than with economical theory; at the very least, I've seen these policies denounced from the outset by the economists I follow.
- anothernewdude 3y ago> It makes giant claims, like the headline here which seems intended to be read as “mathematics proves collectivism is best” - and yet offers little empirical evidence beyond saying that an abstract mathematical model can tell us something about the real world. Spherical horses and all that. True. And I agree it seems like bullshit. Now consider the entirety of economics.
- Kratacoa 3y ago> True. And I agree it seems like bullshit. Now consider the entirety of economics Have you studied economics?
- Draiken 3y agoNot OP but I have not. As an ignorant, I have a burning question (for real, not being facetious): isn't it bullshit? Judging by the outcomes of the field and the absurd world we live in today with insane boom/bust cycles every few years, sky-high levels of wealth accumulation, inflation out of control world-wide, one cannot wonder how nobody seems to understand it. From the outside, it looks like either they are producing incorrect/incomplete theories that simply don't work in the real world, or it's all so theoretical that it never really translates into people's lives. Or, alternatively, the system is working exactly as intended and the goal was always to maximize for a few individuals and not society in the first place.
- playday 3y agoThere’s two main approaches to economics that aren’t bullshit: empiricism and praxeology. With empiricism, you conduct some sort of experiment (or identify a natural experiment) than can verify falsifiable predictions. With praxeology, you work from first principles regarding rational agents. Both mechanisms result in insights that “work” meaning institutions can use these insights to modify their policies. An easy to understand example is the application of the economics to MMORPG game currencies. But these more generally are applied by finance and government departments everywhere. There is a degree of bullshit that enters when there’s a political dynamic, such as with unemployment rate stats or gdp growth stats.
- gmerc 3y agoSo … just normal economics. If that school of “science” was more than retconning and trying to see ideologically aligned patterns in the irrational noise and result of complex interwoven incentive systems that would make the complexity of the three body problem look tame, we probably wouldnt have a financial crisis every few years :/
- RandomLensman 3y agoI don't think economics as such has really any trouble explaining and even seeing potential financial crises. I would even go so far as to say economics also explains quite well why usually nothing substantial is done to prevent them.
- andy_ppp 3y agoIf economists knew what was going to happen they'd all be extremely wealthy. They are all academics or work for banks making someone else wealthy. More information: https://www.youtube.com/watch?v=EwB5ihGu4Jw https://www.youtube.com/watch?v=EwB5ihGu4Jw
- RandomLensman 3y agoPlacing bets successfully needs way more than a general understanding of what might happen (and, of course, capital). Also, you conveniently ignore all the economists that got rich in financial markets over the years.
- andy_ppp 3y agoName them. Which economists are rich from their theories or is Warren Buffet right about them, because that's who I'm paraphrasing from... Here's the quote: https://www.cnbc.com/2018/05/18/warren-buffett-explains-why-he-never-listens-to-economists.html https://www.cnbc.com/2018/05/18/warren-buffett-explains-why-...
- 3y ago
- stagas 3y agoThe article seems pretty reasonable to me, the theory seems to work. Can you clarify which part of it you find problematic because I don't see it in the article? Edit: here is also the source code for the cooperative coin, if it helps the discussion https://github.com/lmlhub/ee_web_apps/blob/main/cooperating_coin_online.py https://github.com/lmlhub/ee_web_apps/blob/main/cooperating_...
- notahacker 3y agoBecause for all his grandiose claims to novelty, he's basically created a completely abstract game theoretical model of the concept of insurance, which suffice to say is not something "mainstream economists" are unaware of.
- stagas 3y agoOk, I had never seen it simplified like that though, and definitely wasn't aware that from a random coin you can be net positive if you cooperate, that's a surprise to my knowledge and I find that idea very valuable. Edit: also I don't see it very similar to insurance, since insurance is withholding wealth in order to distribute it occasionally when needed because it's zero-sum. But if distributing it all the time everywhere is a net positive gain, that's entirely different than the insurance game.
- consilient 3y ago> also I don't see it very similar to insurance, since insurance is withholding wealth in order to distribute it occasionally when needed because it's zero-sum. But if distributing it all the time everywhere is a net positive gain, that's entirely different than the insurance game. Insurance is zero-sum (negative-sum, actually) when it comes to money. It is not zero-sum overall, because reducing risk is valuable. A 50/50 shot at either 10 million dollars or nothing is significantly less valuable (to anyone who isn't already very rich) than a guaranteed 5 million.
- wenebego 3y ago
- saiya-jin 3y agoYou dont need abstract math to research collectivism, in fact you shouldnt since you will consistently fail to factor properly the most important part - human nature. Just look at communism and its utter failures in ie eastern europe when it was enslaved by soviet russia union during cold war. Nobody wanted willingly to give up their fields and farms, so fathers we re forced to sign contracts at gunpoint. Stories like these are not that rare, I knoe personally few whose granddads lost it all to aparatchiks. Anyway, it was an utter failure, as communism is. Central planning doesnt work, farmers with intimate knowledge of their fields and crops were much more effective and motivated than then some random workers who tought mainly about themselves and stealing common property rather some common good. Corruption, selfishness, laziness are things that collapse any similar pipe dream society, or make it at least very ineffective.
- RandomLensman 3y agoNot disagreeing with the historic view, but oddly enough, when it comes to corporations we see collective pooling and central planning as totally normal (kind of the last bastion of communism).
- saiya-jin 3y agoI am not advocating for anarchy in any way, somebody has to steer the wheel of any big enough corporation, or company is bust within few very bad moves. The problem comes when power resides in hands which are incompetent (frequent communism issue, people get power for rectal speology and not proven hard skills). Or even worse they are competent, but incentives are completely misaligned - ceos having tens of millions as yearly base salary, golden parachutes regardless of fubar they create, then they look for additional means of their own profit, regardless of harm to company. Those highly functioning sociopaths would grok say government-mandated jail terms for really bad stuff (TM) very quickly if it would be on the table, but its not and everybody up there knows it.
- sureglymop 3y agoCapitalism is objectively a failure too (in certain countries, e.g. the US). And arguably that is also due to human nature. In Europe there are thriving social democracies in some states. No one is being held at gunpoint because that is one extreme. These are still capitalist nations, just not across the board.
- Cushman 3y agoSo, first, you're right to be skeptical. The basic claim is this: "Expected value (a mathematical object belonging to the very rigorous field of probability theory) is often used by economists in a non-rigorous way." The covert implication is something along the lines of, economists do this deliberately to gain the benefit of rigor that the empirical performance of economic theory hasn't earned. You should definitely interpret that first as a political argument, motivated by a metaphysical argument, motivated by a mathematical argument. And you're right to hear some alarm bells, because that's certainly a controversial claim. But it's not an outlandish claim. The field of psycho-economics is basically the study of the many ways that people observably, empirically don't make economic decisions on the basis of EV maximization, so what more need be said? And there are plenty of other metaphysical arguments that you probably accept in principle. Pascal's Wager, and the converse Pascal's Mugging, clearly show that EV maximization at least has to "break down at high energy levels", to borrow a metaphor. So, this thought experiment is one of those, but it's actually a pretty elegant one: In a series of two coin flips you have four outcomes, so your expected value is a quarter of (0.6 x 0.6) + (0.6 x 1.5) + (1.5 x 0.6) + (1.5 x 1.5) = about 4.4 over four = about 110% of your stake. So this is a winning gamble, so EV maximization predicts you will take it. However: more than half of that EV, (1.5 x 1.5)/4 = 56% out of that 110%, comes from the relatively rare event in which you win two coin flips in a row. The other three outcomes have to share the remaining 54% EV between them. It should make sense by now that if you lose, and play again, you can expect to lose again, despite still having a positive EV on the toss. So the essential question the author is asking, the thing that makes this metaphysically controversial but not mathematically so, is this: Assuming there's no mechanism to actually share the EV, how much should those three out of four parallel-universe versions of you who individually lose, and collectively have to come up with the cash to pay out 2x winnings, care about the one out of four of you who's taking those 2x winnings home? And the political question is: Does more than 1/4 of you still think EV is a good basis for decision making absent a mechanism to actually share the EV?
- Cushman 3y ago> It should make sense by now that if you lose, and play again, you can expect to lose again, despite still having a positive EV on the toss. Too late to edit but I feel like I should highlight this more, because it looks like the place something would be swept under the rug: Yes, the individual who wins two flips in a row is still ahead even if they lose the next two flips. If they win the first four, they can afford to lose three more. And if they win the first five, they can afford to lose… still only three. Five to four no longer breaks even. That’s the thing that, if it doesn’t seem intuitive, is a meaningful insight. “This +EV dynamics is not ergodic” means: In the limit, a) the individual who wins every single coin flip can afford to pay the losses of everyone else and profit, and b) no other individual breaks even.
- tremon 3y agoOk, let's try it with an analogy: "Pooling and sharing of computer source code makes everyone's products better" Is there enough empirical evidence to support that analogy? Why shouldn't the same apply to wealth in a broader sense?
- boppo1 3y agoWealth is reduced by consumption. It cannot be endlessly copied at negligible cost. A closer (but not perfect) analogy is more like "pooling and sharing the computational time of the university's lone supercomputer makes everyone's projects better".
- deleted 3y ago[deleted]
- littlestymaar 3y ago> Edit: looks like it’s not just me: https://arxiv.org/pdf/2306.03275.pdf https://arxiv.org/pdf/2306.03275.pdf Well, a lone author publishing a 4 page essay on arXiv isn't particularly compelling to say the least. I could take two hours of my afternoon and write “«‘Ergodicity Economics’ is Pseudoscience» is Pseudoscience” and publish it there. In fact, the author of the said PDF[1] explicitly write down that he doesn't really attempted to understand the point of the guy he's criticizing: From the second paragraph: > it is not easy to define what EE is because I am not an expert on this field > It is not clear what kind of economic questions the author is trying to address > I interpret that EE prescribes Dude this isn't how science works, you don't just publish papers to shit on someone else's research without even having attempted to understand what it is about. WTF Edit: oh I was missing that little gem: “Until EE provides testable implications, we should stay away from it as pseudoscience.” Coming from an economist, this is peek irony (or peek hypocrisy, you decide) [1]: https://xkcd.com/2304/ https://xkcd.com/2304/