4 ms·

Markets are by in large not NEARLY as rational as conservative economists make them out to be. Your point about the political biases informing the positions th

by modarts 14y ago

Markets are by in large not NEARLY as rational as conservative economists make them out to be. Your point about the political biases informing the positions that traders were taking further supports that.

deleted 14y ago
[deleted]
001sky 14y ago
Your use of the word 'conservative' is ill-advised, both technically and rhetorically. Free-market Economics is rooted in [l]iberal traditions in the first instance, not conservative (see: repeal of the corn laws)[1]; and in the second: Modern [L]iberals (ie, interventionists) require near-perfect rationality as an operating behavioural assumption, ex-ante. Not to be pedantic, but this is an important point. [L]iberal economists are part of the Orthodoxy. Non-orthodox behavioural assumptions[1] are (arguably) quite problematic to an Orthodox interventionist. This is glossed over because it threatens the 'myth of expertise' that is required to politically implement a such an ideology. This is not a partisian point, but one of history and terminology. ______________ [1] http://en.wikipedia.org/wiki/Corn_Laws http://en.wikipedia.org/wiki/Corn_Laws. [2] In particular, bounded rationality and opportunism. edits: clarity
- lmm 14y ago
  For rhetorical/conversational purposes current usage is more important than historical derivation, and the current political reality is that the "market liberal" position is espoused almost exclusively by those in the "conservative" (i.e. social conservative) camp - blame the two-party US system. Surely the liberal interventionist position requires an assumption of irrational behaviour from market participants - that's the only way e.g. regulation to prevent bubbles would make sense.
- gjm11 14y ago
  You appear to be arguing that because (1) the historical foundations of free-market economics come from a group different from the one now called "conservative", and (2) the people now called "liberal" also make overoptimistic assumptions about people's rationality, it's wrong to say that (3) the people boosting markets like Intrade as reliable information sources tend to be the ones now called "conservative". But there is no contradiction of any sort between (1,2) and (3). Which is maybe just as well, because in fact (3) is true. (It seems to me that (1) is an interesting but irrelevant historical point, and (2) is merely irrelevant smoke-blowing, whose best explanation is that you're more partisan than you let on here. But I could be wrong.)
  - 001sky 14y ago
    If you throw out strong-form rationality, why would you believe someone has (a) a perfect model; (b) knows when the 'perfect' is missing; and (c) can fix it back to perfect? Empirical evidence of 'imperfection' should not lead you to conclude 'this is stupid, i am smart'. In this regard, and others, there are pretty big differences in worldview between the Nobel prize winners of 2008 and 2009. [1] And what happened in-between? The financial crisis. Is that a co-incidence? Probably not. The main point of this thread -- about the price of X being one thing or another -- does not (appear to) need a critique of rationality to explain, however. In that regards, it is superflous. Whether this price is 'belief' or 'manipulation' (ie, strategy), the market would be needing to evidence preferences <accurately> for the prefernces to be revealed. Manipulation in this sense is a variation of strategic preferencing.[2] Again, this is a notion more consistent with <hyper rationality> than its opposite. Whether or not Market A and Market B have the same price is also simply explained by lack of common market participants. A textbook 'inefficiency' may result, but again this is not anywhere near a critique of rationality, proper. Lastly, thinking orthogonally to the orthodoxy is not 'conservative' its actually 'liberal' but this requires omission of capital letters [3] and some sense of history to understand. Which is the larger point about rhetoric. And closer to my personal worldview. _________ [1] ie, Krugman vs http://www.nytimes.com/2009/10/13/business/economy/13nobel.html http://www.nytimes.com/2009/10/13/business/economy/13nobel.h... [2] preferences are </meta> to orthdox economics, as its practised by keynesian-style interventionists and neo-liberals (er, Conservatives) alike. [3] Liberal is now a modern brand, not a reference point of clear thinking.

by modarts 14y ago

deleted 14y ago

[deleted]

001sky 14y ago

Your use of the word 'conservative' is ill-advised, both technically and rhetorically. Free-market Economics is rooted in [l]iberal traditions in the first instance, not conservative (see: repeal of the corn laws)[1]; and in the second: Modern [L]iberals (ie, interventionists) require near-perfect rationality as an operating behavioural assumption, ex-ante. Not to be pedantic, but this is an important point. [L]iberal economists are part of the Orthodoxy. Non-orthodox behavioural assumptions[1] are (arguably) quite problematic to an Orthodox interventionist. This is glossed over because it threatens the 'myth of expertise' that is required to politically implement a such an ideology. This is not a partisian point, but one of history and terminology. ______________ [1] http://en.wikipedia.org/wiki/Corn_Laws http://en.wikipedia.org/wiki/Corn_Laws. [2] In particular, bounded rationality and opportunism. edits: clarity

lmm 14y ago
For rhetorical/conversational purposes current usage is more important than historical derivation, and the current political reality is that the "market liberal" position is espoused almost exclusively by those in the "conservative" (i.e. social conservative) camp - blame the two-party US system. Surely the liberal interventionist position requires an assumption of irrational behaviour from market participants - that's the only way e.g. regulation to prevent bubbles would make sense.
gjm11 14y ago
You appear to be arguing that because (1) the historical foundations of free-market economics come from a group different from the one now called "conservative", and (2) the people now called "liberal" also make overoptimistic assumptions about people's rationality, it's wrong to say that (3) the people boosting markets like Intrade as reliable information sources tend to be the ones now called "conservative". But there is no contradiction of any sort between (1,2) and (3). Which is maybe just as well, because in fact (3) is true. (It seems to me that (1) is an interesting but irrelevant historical point, and (2) is merely irrelevant smoke-blowing, whose best explanation is that you're more partisan than you let on here. But I could be wrong.)
- 001sky 14y ago
  If you throw out strong-form rationality, why would you believe someone has (a) a perfect model; (b) knows when the 'perfect' is missing; and (c) can fix it back to perfect? Empirical evidence of 'imperfection' should not lead you to conclude 'this is stupid, i am smart'. In this regard, and others, there are pretty big differences in worldview between the Nobel prize winners of 2008 and 2009. [1] And what happened in-between? The financial crisis. Is that a co-incidence? Probably not. The main point of this thread -- about the price of X being one thing or another -- does not (appear to) need a critique of rationality to explain, however. In that regards, it is superflous. Whether this price is 'belief' or 'manipulation' (ie, strategy), the market would be needing to evidence preferences <accurately> for the prefernces to be revealed. Manipulation in this sense is a variation of strategic preferencing.[2] Again, this is a notion more consistent with <hyper rationality> than its opposite. Whether or not Market A and Market B have the same price is also simply explained by lack of common market participants. A textbook 'inefficiency' may result, but again this is not anywhere near a critique of rationality, proper. Lastly, thinking orthogonally to the orthodoxy is not 'conservative' its actually 'liberal' but this requires omission of capital letters [3] and some sense of history to understand. Which is the larger point about rhetoric. And closer to my personal worldview. _________ [1] ie, Krugman vs http://www.nytimes.com/2009/10/13/business/economy/13nobel.html http://www.nytimes.com/2009/10/13/business/economy/13nobel.h... [2] preferences are </meta> to orthdox economics, as its practised by keynesian-style interventionists and neo-liberals (er, Conservatives) alike. [3] Liberal is now a modern brand, not a reference point of clear thinking.