Re: Google Groups becomes even less useful.

Seth

unread,

Jun 29, 2012, 8:59:08 PM6/29/12

to

In article <5f3a4f38-9f75-4b5c...@m8g2000yqo.googlegroups.com>,
RobertVienneau <rv...@dreamscape.com> wrote:
>On Jun 25, 12:29 pm, Gutless Umbrella Carrying Sissy
><tausti...@gmail.com> wrote:
>> Jared <jared4...@gmail.com> wrote innews:js8bjt$lg$1...@speranza.aioe.org:
>> > "Hidden Order: The Economics of Everyday Life" is a good book,
>> > and worth reading.
>>
>> Is it a comedy?
>
>I read Friedman to laugh at him.
>
>Here Friedman tries to promote ignorance:
>
>"Suppose the number of carpenters suddenly increases, due to the
>immigration of thousands of new carpenters from Mexico. Both before
>and after the change, carpenters receive their marginal revenue
>product... But the wage after the migration is lower than the wage
>before. Since the supply of carpenters is higher than before, the
>equilibrium wage is lower.
>
>...an increase in the supply of an input I own drives down its price
>(and marginal revenue product) and so decreases my income. The same
>is true for an increase in the supply of an input that is a close
>substitute for an input I own. If I happen to own an oil well, I will
>regard someone else's discovery of a new field of natural gas--or a
>process for producing power by thermonuclear fusion--as bad news."
>-- David D. Friedman (1990). _Price Theory: An Intermediate
>Text_, Second Edition.

That certainly makes sense.

>Here Friedman is directly contradicted in the literature:

Oh, wow, two economists disagree. That must be a really rare
occurrence. It probably never happened before; at least, not until
there were two economists.

Seth

RobertVienneau

unread,

Jul 2, 2012, 2:50:16 PM7/2/12

to

On Jun 29, 8:59 pm, se...@panix.com (Seth) wrote:
> In article <5f3a4f38-9f75-4b5c-86b0-aa794387e...@m8g2000yqo.googlegroups.com>,

>
> RobertVienneau <rv...@dreamscape.com> wrote:
> >I read Friedman to laugh at him.

I might mention I had no problem with the one fantasy
novel of his that I have read.

> >Here Friedman tries to promote ignorance:
>
> >"Suppose the number of carpenters suddenly increases, due to the

> >immigration of thousands of new carpenters from Mexico...."

> >-- David D. Friedman (1990). _Price Theory: An Intermediate
> >Text_, Second Edition.
>
> That certainly makes sense.
>

Studies show naive physics resembles late medieval impetus
theory. Teachers of physical science do not try to
reinforce common-sense misconceptions.

Friedman tries to pass his story off as the logical
consequence of more rigorous formal economic theory.
Yet it has been widely known for decades among
economists that his story cannot be so derived:

"Even people who have made no study of economic
theory are familiar with the idea that when something
is more plentiful its price will be lower, and
introductory courses on economic theory reinforce
this common presumption with various examples. However,
there is no support from the theory of general
equilibrium for the proposition that an input to
production will be cheaper in an economy where more
of it is available." -- Christopher Bliss (1975).

------------------------
Robert Vienneau
http://robertvienneau.blogspot.com/

David Friedman

unread,

Jul 2, 2012, 3:03:39 PM7/2/12

to

In article
<20b07ce7-c532-4ff3...@d6g2000vbe.googlegroups.com>,

RobertVienneau <rv...@dreamscape.com> wrote:

> On Jun 29, 8:59 pm, se...@panix.com (Seth) wrote:
> > In article
> > <5f3a4f38-9f75-4b5c-86b0-aa794387e...@m8g2000yqo.googlegroups.com>,
> >
> > RobertVienneau <rv...@dreamscape.com> wrote:
> > >I read Friedman to laugh at him.
>
> I might mention I had no problem with the one fantasy
> novel of his that I have read.

Which one? _Harald_ was marketed as a fantasy, but is really a
historical novel with made up history and geography. I don't think the
category has a name--my favorite example is Cherryh's _Paladin_.

_Salamander_, on the other hand, really is a fantasy. Both books have
some economics in them, although it isn't central.

--
http://www.daviddfriedman.com/
http://daviddfriedman.blogspot.com/
_Salamander_: http://tinyurl.com/6957y7e
_How to Milk an Almond,..._ http://tinyurl.com/63xg8gx

Kurt Busiek

unread,

Jul 2, 2012, 4:27:19 PM7/2/12

to

On 2012-07-02 19:03:39 +0000, David Friedman

<dd...@daviddfriedman.nopsam.com> said:

> In article
> <20b07ce7-c532-4ff3...@d6g2000vbe.googlegroups.com>,
> RobertVienneau <rv...@dreamscape.com> wrote:
>
>> On Jun 29, 8:59 pm, se...@panix.com (Seth) wrote:
>>> In article
>>> <5f3a4f38-9f75-4b5c-86b0-aa794387e...@m8g2000yqo.googlegroups.com>,
>>>
>>> RobertVienneau <rv...@dreamscape.com> wrote:
>>>> I read Friedman to laugh at him.
>>
>> I might mention I had no problem with the one fantasy
>> novel of his that I have read.
>
> Which one? _Harald_ was marketed as a fantasy, but is really a
> historical novel with made up history and geography.

My first thought was to say I'd count that as fantasy, on the grounds
of the made-up history and geography. But then I thought about, say,
THE MOUSE THAT ROARED, Ruritania and other such examples.

> I don't think the
> category has a name--my favorite example is Cherryh's _Paladin_.

Would the "Ruritanian romance" genre extend to fit that far, since it
does by now include historical settings?

kdb
--
Visit http://www.busiek.com -- for all your Busiek needs!

David DeLaney

unread,

Jul 2, 2012, 7:18:13 PM7/2/12

to

Kurt Busiek <ku...@busiek.com> wrote:

>David Friedman <dd...@daviddfriedman.nopsam.com> said:
>> Which one? _Harald_ was marketed as a fantasy, but is really a
>> historical novel with made up history and geography.
>
>My first thought was to say I'd count that as fantasy, on the grounds
>of the made-up history and geography. But then I thought about, say,
>THE MOUSE THAT ROARED, Ruritania and other such examples.
>
>> I don't think the
>> category has a name--my favorite example is Cherryh's _Paladin_.
>
>Would the "Ruritanian romance" genre extend to fit that far, since it
>does by now include historical settings?

And does Simon Hawke's TIME WARS series (which, full disclosure, I am currently
rereading) fit under that, given that it's full of time travel back _to_
fictional-settings-made-real, and has "following the original plot to make
things come out right" as one of the usual prime motivations of the time
travelers?

Dave, just finished The Zenda Vendetta
--
\/David DeLaney posting from d...@vic.com "It's not the pot that grows the flower
It's not the clock that slows the hour The definition's plain for anyone to see
Love is all it takes to make a family" - R&P. VISUALIZE HAPPYNET VRbeable<BLINK>
http://www.vic.com/~dbd/ - net.legends FAQ & Magic / I WUV you in all CAPS! --K.

Kurt Busiek

unread,

Jul 2, 2012, 7:04:32 PM7/2/12

to

On 2012-07-02 23:18:13 +0000, d...@gatekeeper.vic.com (David DeLaney) said:

> Kurt Busiek <ku...@busiek.com> wrote:
>> David Friedman <dd...@daviddfriedman.nopsam.com> said:
>>> Which one? _Harald_ was marketed as a fantasy, but is really a
>>> historical novel with made up history and geography.
>>
>> My first thought was to say I'd count that as fantasy, on the grounds
>> of the made-up history and geography. But then I thought about, say,
>> THE MOUSE THAT ROARED, Ruritania and other such examples.
>>
>>> I don't think the
>>> category has a name--my favorite example is Cherryh's _Paladin_.
>>
>> Would the "Ruritanian romance" genre extend to fit that far, since it
>> does by now include historical settings?
>
> And does Simon Hawke's TIME WARS series (which, full disclosure, I am currently
> rereading) fit under that, given that it's full of time travel back _to_
> fictional-settings-made-real, and has "following the original plot to make
> things come out right" as one of the usual prime motivations of the time
> travelers?

I'd figure that's either SF or fantasy, given the time-travel. David's
postulating a genre that consists of a made-up setting, but non
paranormal elements, either magic or super-scientific, I think.

The distinction may be that Ruritanians are set in fictional countires
that are nonetheless posited to exist in our world -- they're like the
fictional cities, streets, buildings and events of otherwise-realistic
fiction, writ a bit larger, but HARALD may not have any truck with our
world as a context at all.

David Friedman

unread,

Jul 3, 2012, 4:56:27 AM7/3/12

to

In article <jst077$kkj$1...@dont-email.me>, Kurt Busiek <ku...@busiek.com>
wrote:

I believe that in that genre, the broad historical and geographical
background is real, the local background the story is set in is
fictional. Almost all fiction has that characteristic to some
extent--the protagonist's house isn't a real house at a real address.

I was thinking of the more extreme version, where the societies are
loosely based on historical societies (China and Japan in Cherryh's
case, saga period Iceland, Anglo-Saxon and early Norman England, the
Roman and Abbasid empires in mine), but there is no suggestion that if
you got past their borders you would be in real history and geography.

David Friedman

unread,

Jul 3, 2012, 4:58:59 AM7/3/12

to

In article <jst9e0$9nh$1...@dont-email.me>, Kurt Busiek <ku...@busiek.com>
wrote:

> I'd figure that's either SF or fantasy, given the time-travel. David's
> postulating a genre that consists of a made-up setting, but non
> paranormal elements, either magic or super-scientific, I think.

Yes.

> The distinction may be that Ruritanians are set in fictional countires
> that are nonetheless posited to exist in our world -- they're like the
> fictional cities, streets, buildings and events of otherwise-realistic
> fiction, writ a bit larger, but HARALD may not have any truck with our
> world as a context at all.

The point I just made in a post I wrote before reading this.

_Harald_ is our world in a physical sense--same plants and animals and
such, presumably the same laws of physics. But there is no link to real
world history or geography.

_Salamander_, my other novel, is set in a world where the laws of
physics are clearly different--it's strongly suggested that the sun
somehow works via fire magic, for instance.

Kurt Busiek

unread,

Jul 3, 2012, 12:02:40 PM7/3/12

to

On 2012-07-03 08:58:59 +0000, David Friedman

<dd...@daviddfriedman.nopsam.com> said:

> In article <jst9e0$9nh$1...@dont-email.me>, Kurt Busiek <ku...@busiek.com>
> wrote:
>
>> I'd figure that's either SF or fantasy, given the time-travel. David's
>> postulating a genre that consists of a made-up setting, but non
>> paranormal elements, either magic or super-scientific, I think.
>
> Yes.
>
>> The distinction may be that Ruritanians are set in fictional countires
>> that are nonetheless posited to exist in our world -- they're like the
>> fictional cities, streets, buildings and events of otherwise-realistic
>> fiction, writ a bit larger, but HARALD may not have any truck with our
>> world as a context at all.
>
> The point I just made in a post I wrote before reading this.
>
> _Harald_ is our world in a physical sense--same plants and animals and
> such, presumably the same laws of physics. But there is no link to real
> world history or geography.

Perhaps it's an "invented-world historical."

Although I think the tagline you've used for the book, "fantasy without
magic," while not as academic-sounding as a lot of genre labels, is
nicely clear.

David Friedman

unread,

Jul 3, 2012, 1:46:17 PM7/3/12

to

In article <jsv530$o8n$1...@dont-email.me>, Kurt Busiek <ku...@busiek.com>
wrote:

> > _Harald_ is our world in a physical sense--same plants and animals and
> > such, presumably the same laws of physics. But there is no link to real
> > world history or geography.
>
> Perhaps it's an "invented-world historical."

That might work. My one reservation is that that doesn't imply "invented
world that is very much like our world."

> Although I think the tagline you've used for the book, "fantasy without
> magic," while not as academic-sounding as a lot of genre labels, is
> nicely clear.

The best I could think of--but it has the same problem I just mentioned
for your suggestion.

One might also think of it as "alternate history with alternate
geography." Alternate history normally has a well defined one point
change, but one might think of such a story as set in the world as
history could have developed with a change too far back to identify.

In fact, my mental back-history for _Harald_ is an alternate history
with a fork in classical antiquity, set in a world whose geography is
similar to ours but not identical. The empire is what developed when the
Greek colonies in Italy prospered and ended up building an empire with
Rome as the junior partner. More of that shows up in the sequel, which I
wrote part of before switching to the other book; I don't know if I will
ever finish it.

Kurt Busiek

unread,

Jul 3, 2012, 2:16:51 PM7/3/12

to

On 2012-07-03 17:46:17 +0000, David Friedman

<dd...@daviddfriedman.nopsam.com> said:

> In article <jsv530$o8n$1...@dont-email.me>, Kurt Busiek <ku...@busiek.com>
> wrote:
>
>>> _Harald_ is our world in a physical sense--same plants and animals and
>>> such, presumably the same laws of physics. But there is no link to real
>>> world history or geography.
>>
>> Perhaps it's an "invented-world historical."
>
> That might work. My one reservation is that that doesn't imply "invented
> world that is very much like our world."

To be fair, neither does "invented-world fantasy," and that encompasses
both worlds that resemble ours and worlds that don't.

Perhaps you need enough works that need distinguishing between on that
score before you need a handy label.

> One might also think of it as "alternate history with alternate
> geography." Alternate history normally has a well defined one point
> change, but one might think of such a story as set in the world as
> history could have developed with a change too far back to identify.

I think that would be a bad choice on the ground that genre labels are,
at heart, marketing, and alternate history in which the divergent point
is so far back is not likely to be of particular interest to
alt-history fans, while it might well be of interest to fans who don't
much care for alt-hist. The label becomes academically accurate but
functionally problematic.

What it is, really, is other-history more than alternate-history,
because the change and its effects aren't the focus of the story, just
the excuse for the setting. It's closer to a parallel world than a
divergent one -- but again, the fact that it's parallel is presumably
irrelevant to the story being told, so it's not something to emphasize.

Cryptoengineer

unread,

Jul 3, 2012, 7:51:39 PM7/3/12

to

On Jun 29, 8:59 pm, se...@panix.com (Seth) wrote:

> In article <5f3a4f38-9f75-4b5c-86b0-aa794387e...@m8g2000yqo.googlegroups.com>,

This is actually the thing that bothers me about calling economics a
'science'. Real sciences have a commonly held core of fundamental
theories that virtually all researchers agree on - e.g. DNA as the
basis of most heredity, or the existence of atoms. New research mostly
accretes new details to that core. Very occasionally, a new way of
interpreting the old data comes along (quantum mechanics and
relativity, for example), which revolutionizes researcher's way of
seeing their field. But virtually every researcher agrees that the
evidence forces a change on them.

Economics doesn't have that. There are no basic principles that all,
or even most, agree on. It's more like watching adherents of different
schools of astrology bicker over which one is right.

But I'd put economics a step up from astrology. It's like alchemy. One
day it may turn into a science, but its not even close yet.

pt

RobertVienneau

unread,

Jul 3, 2012, 8:46:15 PM7/3/12

to

On Jul 2, 3:03 pm, David Friedman <d...@daviddfriedman.nopsam.com>
wrote:
> In article
> <20b07ce7-c532-4ff3-b064-e37a90363...@d6g2000vbe.googlegroups.com>,

>
> RobertVienneau <rv...@dreamscape.com> wrote:

> > I might mention I had no problem with the one fantasy
> > novel of his that I have read.
>

> Which one? ...

Salamander.

> _Salamander_, on the other hand, really is a fantasy.

I believe that I had a copy in PDF before my hard
drive crashed a year and a half ago.

------
Robert Vienneau
http://robertvienneau.blogspot.com/

Shawn Wilson

unread,

Jul 3, 2012, 9:14:32 PM7/3/12

to

On Jul 3, 4:51 pm, Cryptoengineer <petert...@gmail.com> wrote:

> This is actually the thing that bothers me about calling economics a
> 'science'.

Oh, I know where this is going...

> Real sciences have a commonly held core of fundamental
> theories that virtually all researchers agree on - e.g. DNA as the
> basis of most heredity, or the existence of atoms. New research mostly
> accretes new details to that core. Very occasionally, a new way of
> interpreting the old data comes along (quantum mechanics and
> relativity, for example), which revolutionizes researcher's way of
> seeing their field. But virtually every researcher agrees that the
> evidence forces a change on them.
>
> Economics doesn't have that.

Uh, actually we do. You just don't hear about it. If you had ever
sat in an economics classroom you would know this.

David Friedman

unread,

Jul 3, 2012, 11:41:52 PM7/3/12

to

In article
<5adb4cf5-2a31-4184...@x39g2000yqx.googlegroups.com>,

RobertVienneau <rv...@dreamscape.com> wrote:

> On Jul 2, 3:03 pm, David Friedman <d...@daviddfriedman.nopsam.com>
> wrote:
> > In article
> > <20b07ce7-c532-4ff3-b064-e37a90363...@d6g2000vbe.googlegroups.com>,
> >
> > RobertVienneau <rv...@dreamscape.com> wrote:
>
> > > I might mention I had no problem with the one fantasy
> > > novel of his that I have read.
> >
> > Which one? ...
>
> Salamander.
>
> > _Salamander_, on the other hand, really is a fantasy.
>
> I believe that I had a copy in PDF before my hard
> drive crashed a year and a half ago.

I'm curious--did it occur to you that the Cascade was inspired by what I
think of as the central planning fallacy--the persuasive but mistaken
idea that if only all of those resources were in the hands of some
sensible person, wonderful things could be done with them?

Currently it's available as a Kindle file from Amazon.

David Friedman

unread,

Jul 3, 2012, 11:48:51 PM7/3/12

to

In article
<16cfe326-1482-4e77...@f16g2000yqg.googlegroups.com>,

Cryptoengineer <pete...@gmail.com> wrote:

> This is actually the thing that bothers me about calling economics a
> 'science'. Real sciences have a commonly held core of fundamental
> theories that virtually all researchers agree on - e.g. DNA as the
> basis of most heredity, or the existence of atoms. New research mostly
> accretes new details to that core. Very occasionally, a new way of
> interpreting the old data comes along (quantum mechanics and
> relativity, for example), which revolutionizes researcher's way of
> seeing their field. But virtually every researcher agrees that the
> evidence forces a change on them.
>
> Economics doesn't have that. There are no basic principles that all,
> or even most, agree on.

I think you are mistaken.

Let me offer one scrap of evidence. Paul Douglas was a Democratic
senator who had been a prominent academic economist. By my father's
account, when my father testified before the joint economic committee it
tended to become an argument with him and Douglas on one side, the rest
of the committee on the other. The two economists were more or less on
opposite sides politically, but had much more in common intellectually
with each other than with the Republicans and Democrats on the
committee. I observed a similar pattern on a much smaller scale when I
was the economic expert witness for one side of a law suit, helping my
side question the other side's economic expert witness.

A long time ago, the AER had an article reporting on a large scale poll
of economists, academic, business, and in government. On a fair number
of issues, agreement was 90%+. The ones where that was not the case
tended to be either ones where the real issue depended on something
other than economics, such as "should the U.S. income distribution be
made more equal," or ones in areas where there was still a lot of
academic uncertainty, mostly notably macro.

To take one simple example, most economists are basically free
traders--because there are good arguments for free trade that almost no
non-economist understands and that anyone who is a competent economist
must understand. That's a case where the popular arguments, for and
against, are based on an analysis that economics rejected two hundred
years ago.

David Harmon

unread,

Jul 4, 2012, 1:07:15 AM7/4/12

to

On Tue, 03 Jul 2012 01:58:59 -0700 in rec.arts.sf.fandom, David Friedman
<dd...@daviddfriedman.nopsam.com> wrote,

>_Harald_ is our world in a physical sense--same plants and animals and
>such, presumably the same laws of physics. But there is no link to real
>world history or geography.

How is it distinguished from "general fiction"?

David Friedman

unread,

Jul 4, 2012, 2:37:13 AM7/4/12

to

In article <y4WdnSo-pYYZUm7S...@earthlink.com>,

Most fiction is set at some time and place in the actual world.

RobertVienneau

unread,

Jul 4, 2012, 5:03:22 AM7/4/12

to

On Jul 3, 7:51 pm, Cryptoengineer <petert...@gmail.com> wrote:
> But I'd put economics a step up from astrology. It's like alchemy. One
> day it may turn into a science, but its not even close yet.

I like this blog post (not from me) on the peculiar state of
economics:
http://tinyurl.com/6pbgavr
Conclusion:

"...something weird is going on in the economics profession
and has been going on for over 30 years; something that I
strongly believe it would be in the educated public’s interest
to scrutinise closely. Perhaps this wouldn’t be so important
if economic discourse were not today the language of power
in much of the world. But it is. And for these reasons, the
conduct of the economics profession should be subject to
some sort of serious outside scrutiny whether informal or –
preferably, in my opinion – formal."

About 10 years ago or so, a committee of the American
Economics Association reported on why graduate
study at the "leading" schools produces idiot savants.

As for Friedman's implicit reference to the theory
of comparative advantage - I see him, and raise
him the Leontief paradox.

David Friedman

unread,

Jul 4, 2012, 1:56:02 PM7/4/12

to

In article
<2a0f9782-b127-4fbe...@h20g2000yqe.googlegroups.com>,

RobertVienneau <rv...@dreamscape.com> wrote:

> About 10 years ago or so, a committee of the American
> Economics Association reported on why graduate
> study at the "leading" schools produces idiot savants.
>

Do you have URL for it? This might possibly be an area where we agree.

My daughter transferred to Chicago after two years at Oberlin, and was
considering majoring in economics. After one econ course at Chicago, she
concluded that the content was more math than economics, and is now
majoring in Italian, her other interest. I've corresponded with one
professor at Chicago I think highly of, and he agrees with her criticism
of the undergraduate teaching. The introductory course seems to be
pretty good from my point of view--i.e. substantial emphasis on
intuition and understanding over formalism--but not the later courses.

Cryptoengineer

unread,

Jul 5, 2012, 12:34:00 AM7/5/12

to

On Jul 3, 11:48 pm, David Friedman <d...@daviddfriedman.nopsam.com>
wrote:
> In article
> <16cfe326-1482-4e77-a15a-29c04e7bc...@f16g2000yqg.googlegroups.com>,

Thanks for the response - it's a little weird to see you and Shawn in
agreement. Unlike him, you give some argument and reasons.

Most people outside the field don't encounter microeconomics much;
they (and I) more often encounter macroeconomic discussion on news
programs.

It's possible that economics is reasonably scientific at the micro
level; However, at the macro level (where most people run into it as a
subject), I think my assertion remains correct; while the Keynsian,
Monetarist, Austrian, and Marxist schools of macroeconomics are all
treated as meriting serious concern and there is no eperiment or
evidence that will cause some to be universally rejected,
macroeconomics isn't a science. Its a bit as if medicine considered
the 'bad air', and 'evil spirit' theories of disease as valid as germ
theory, and was unable to determine which one was correct.

I sometimes wonder if macroeconomics is an inherently insolvable
problem. It tries to model human behaviour, but the humans involved
become aware of the models and change their behaviour to game the
system, thus quickly invalidating the model.

pt

David Friedman

unread,

Jul 5, 2012, 2:36:38 AM7/5/12

to

In article
<32ae2625-ff09-4b19...@x39g2000yqx.googlegroups.com>,

Cryptoengineer <pete...@gmail.com> wrote:

> It's possible that economics is reasonably scientific at the micro
> level; However, at the macro level (where most people run into it as a
> subject), I think my assertion remains correct; while the Keynsian,
> Monetarist, Austrian, and Marxist schools of macroeconomics are all
> treated as meriting serious concern and there is no eperiment or
> evidence that will cause some to be universally rejected,
> macroeconomics isn't a science.

I would have said that monetarist and Keynesian are treated by most
professional economists as meriting serious concern, Austrian somewhat
less so, and Marxist still less so.

> Its a bit as if medicine considered
> the 'bad air', and 'evil spirit' theories of disease as valid as germ
> theory, and was unable to determine which one was correct.

Consider current disagreements in nutrition, which is ultimately tied to
medicine and biology. Various authorities claim that we eat too much
salt, while others offer evidence in the other direction--conclude that
reducing our salt consumption to the recommended level might well be bad
for us. Some authorities recommend a low fat diet, others low
carbohydrate, or at least limiting consumption to complicated
carbohydrates (probably the wrong technical term--fruits and vegetables
but not flour and sugar).

I don't think it is unusual for a science to have some questions that
are open--where reasonable scholars reach different conclusions. But to
a considerable extent, Keynesians and monetarists agree on what
empirical evidence is relevant to their disagreement. During the period
of stagflation there was a substantial shift away from the then orthodox
version of Keynesianism, according to which what was happening shouldn't
have been. And the failure of the stimulus to produce the effects it was
predicted to have is, I think, having some similar effect.

Getting rigorous conclusions about a complicated interacting system is
hard. Even if the predictions of one theory turn out to be strikingly
false, as happened with Keynesianism at least twice--the post-war
period, when government expenditure dropped sharply and the predicted
depression didn't happen, and the stagflation episode--it's still
possible for modified versions of the theory that explain the anomaly to
return to the field.

> I sometimes wonder if macroeconomics is an inherently insolvable
> problem. It tries to model human behaviour, but the humans involved
> become aware of the models and change their behaviour to game the
> system, thus quickly invalidating the model.

That's true of some parts of economics. I like to say that one virtue of
economics is that it has an answer to the question "if you're so smart,
why aren't you rich?" If it's possible to predict shifts in (say) the
stock market, people acting on those predictions will eliminate the
opportunity to profit from them.

Walter Bushell

unread,

Jul 5, 2012, 12:52:36 PM7/5/12

to

In article <ddfr-15CAA6.2...@news.giganews.com>,

David Friedman <dd...@daviddfriedman.nopsam.com> wrote:

> That's true of some parts of economics. I like to say that one virtue of
> economics is that it has an answer to the question "if you're so smart,
> why aren't you rich?" If it's possible to predict shifts in (say) the
> stock market, people acting on those predictions will eliminate the
> opportunity to profit from them.

"The market can remain irrational longer than you can remain solvent."

--
This space unintentionally left blank.

Shawn Wilson

unread,

Jul 5, 2012, 2:32:49 PM7/5/12

to

On Jul 4, 10:56 am, David Friedman <d...@daviddfriedman.nopsam.com>
wrote:

> My daughter transferred to Chicago after two years at Oberlin, and was
> considering majoring in economics. After one econ course at Chicago, she
> concluded that the content was more math than economics, and is now
> majoring in Italian, her other interest. I've corresponded with one
> professor at Chicago I think highly of, and he agrees with her criticism
> of the undergraduate teaching. The introductory course seems to be
> pretty good from my point of view--i.e. substantial emphasis on
> intuition and understanding over formalism--but not the later courses.

Ah, sour grapes. To ME, economics IS applied math, so math intensive
is the way to go. Mere "intiuition and understanding" is only fine
for amateurs.

Shawn Wilson

unread,

Jul 5, 2012, 2:48:07 PM7/5/12

to

On Jul 4, 9:34 pm, Cryptoengineer <petert...@gmail.com> wrote:

> It's possible that economics is reasonably scientific at the micro
> level; However, at the macro level (where most people run into it as a
> subject), I think my assertion remains correct;

No, it is not.

while the Keynsian,
> Monetarist, Austrian, and Marxist schools of macroeconomics are all
> treated as meriting serious concern

Marxists are fringe loons. They are to mainstream economics what
magic crystal chiropractors (as opposed to the rerasonably legitimate
other kind) are to physicians. Monetarists are crypto-Keynesians
which is to say quasi-Marxists, or at least socialists, trying to go
legit.

The vast majority of the economics profession is in general agreement,
and are like David and myself.

> and there is no eperiment or
> evidence that will cause some to be universally rejected,
> macroeconomics isn't a science.

You can't convince a fanatic. The rest of us weighed the evidence and
came to the appropriate conclusions. Marxism is a joke, and Keynes is
ridiculous. Ramsey-Solow-Tobin-Sidrowski (different but related
models) all work well, have no unreasonable assumptions or operations,
and their conclusions work in the real world. So, that's what reality
looks like. Politicians like Keynes and dislike RSTS because Keynes
lets them call for more spending/power control, while the others say
'sorry, we'd be better off with less government'.

Specifically Keynes predicts that the US economy would not be
stagnating now given previous policies. RSTS predicts that given
previous policies, the US economy WOULD be stagnating right now.

Which one is correct?

> I sometimes wonder if macroeconomics is an inherently insolvable
> problem. It tries to model human behaviour, but the humans involved
> become aware of the models and change their behaviour to game the
> system, thus quickly invalidating the model.

A legitimate issue... Solved some decades ago. The solution is
called 'rational expectations'. Previous models would ass-ume people
would respond mechanically in sub-optimal way X to whatever stimulous
while the model would predict different behavior would actually be
optimal. Didn't work.

What does work? Assume people are smart enough to figure out their
own welfare, and that they would respond optimally. That does work.

David Friedman

unread,

Jul 5, 2012, 3:07:49 PM7/5/12

to

In article
<bc8d28c0-6a8e-4745...@n9g2000pbi.googlegroups.com>,

I like to say that the one advantage I got from getting a PhD in
theoretical physics before switching to economics is that I can do
non-mathematical work without having people accuse me of being afraid of
mathematics.

Doing the math without any understanding of what it actually means has
unfortunate results--I've refereed papers like that.

Are you familiar with Marshall's comment on the subject? You might also
consider Ricardo's _Principles_. He managed to do general equilibrium
theory, I believe for the first time ever, with no mathematics beyond
arithmetic.

I note, by the way, that by conventional definitions you are the amateur
(as is Robert, to whom I was responding) and I am the
professional--doing economics is how I made my living for a very long
time. Which does not, of course, mean that I am right and you or he
wrong when we disagree--professionals can be wrong too.

Shawn Wilson

unread,

Jul 5, 2012, 4:07:24 PM7/5/12

to

On Jul 5, 12:07 pm, David Friedman <d...@daviddfriedman.nopsam.com>
wrote:

> Are you familiar with Marshall's comment on the subject? You might also
> consider Ricardo's _Principles_. He managed to do general equilibrium
> theory, I believe for the first time ever, with no mathematics beyond
> arithmetic.

David, *I* have an actual education in this field... I don't need
your uninformed comments on something I have a great deal of formal
training in.

Pay close attention- I have intuition and understanding AND
mathematical rigor in my bag of tricks. In fact, smart money says my
intuition and understanding are superior to yours- I have the tools to
logically analyze the details of assumptions and reasoning which you
lack.

Case in point- the error you made in blythely ass-uming not only that
a descriptive statistic was an innate property of a thing, but that
scaling would not change it (cf minimum wage effects and
'elasticity').

You are enacting a very good version of sour grapes- deriding the
value of something you do not possess. You aren't as good an
economist as you seem to think you are.

Greg Goss

unread,

Jul 5, 2012, 7:27:45 PM7/5/12

to

Shawn Wilson <ikono...@gmail.com> wrote:

>You are enacting a very good version of sour grapes- deriding the
>value of something you do not possess.

Proof by pointing to your credentials only works if you HAVE the
credentials. So far as the rest of the world can see, you do NOT have
the education.

And David is better at explaining the points without yelling at
people.
--
I used to own a mind like a steel trap.
Perhaps if I'd specified a brass one, it
wouldn't have rusted like this.

Jay E. Morris

unread,

Jul 5, 2012, 7:58:06 PM7/5/12

to

unread,

Jul 6, 2012, 12:49:13 AM7/6/12

to

In article <jt5h0o$fk9$4...@reader1.panix.com>,

"Keith F. Lynch" <k...@KeithLynch.net> wrote:

> > I like to say that one virtue of economics is that it has an answer
> > to the question "if you're so smart, why aren't you rich?" If it's
> > possible to predict shifts in (say) the stock market, people acting
> > on those predictions will eliminate the opportunity to profit from
> > them.
>
> Why, then, are some people rich?

Because they were lucky, or have scarce and valuable talents, or have a
way of predicting the market that isn't deducible from the sort of
economic analysis available to lots of other people.

Seth

unread,

Jul 18, 2012, 10:09:21 AM7/18/12

to

In article <ddfr-15CAA6.2...@news.giganews.com>,
David Friedman <dd...@daviddfriedman.nopsam.com> wrote:

>That's true of some parts of economics. I like to say that one virtue of
>economics is that it has an answer to the question "if you're so smart,
>why aren't you rich?" If it's possible to predict shifts in (say) the
>stock market, people acting on those predictions will eliminate the
>opportunity to profit from them.

Only if those predictions are sufficiently widely believed. That's
why simple arbs (e.g. S&P futures vs. cash) tend to disappear, while
more complex or less-believed ones can persist for years or decades
and remain quite profitable.

I could provide some (expired, for obvious reasons) examples.

Seth

Seth

unread,

Jul 18, 2012, 10:15:13 AM7/18/12

to

In article <6c27aa2a-8b19-4a29...@qq9g2000pbb.googlegroups.com>,

Shawn Wilson <ikono...@gmail.com> wrote:

>What does work? Assume people are smart enough to figure out their
>own welfare, and that they would respond optimally. That does work.

Research in game theory / psychology has found that humans do not act
optimally. For instance: ask people (prior to a lottery for tickets)
how much they'd pay for a ticket (assuming they didn't win the
lottery). You might get answers like $200.

Then ask the winners (including some of the same people) how much
they'd sell their tickets (which they bought for $50 after winning the
lottery) for, and get answers like $1000.

Seth

Shawn Wilson

unread,

Jul 18, 2012, 2:19:36 PM7/18/12

to

On Jul 18, 7:15 am, se...@panix.com (Seth) wrote:
> In article <6c27aa2a-8b19-4a29-b32c-383fff0e5...@qq9g2000pbb.googlegroups.com>,

> Shawn Wilson <ikonoql...@gmail.com> wrote:
>
> >What does work? Assume people are smart enough to figure out their
> >own welfare, and that they would respond optimally. That does work.
>
> Research in game theory / psychology has found that humans do not act
> optimally. For instance: ask people (prior to a lottery for tickets)
> how much they'd pay for a ticket (assuming they didn't win the
> lottery). You might get answers like $200.

That only tells you what people *say*. Economists know damn well that
people will say any damn fool thing, but they don't act that way.

Cryptoengineer

unread,

Jul 18, 2012, 3:01:54 PM7/18/12

to

Yes, their actual actions are even more irrational.

pt

Shawn Wilson

unread,

Jul 18, 2012, 4:07:24 PM7/18/12

to

On Jul 18, 12:01 pm, Cryptoengineer <petert...@gmail.com> wrote:

> > > Research in game theory / psychology has found that humans do not act
> > > optimally. For instance: ask people (prior to a lottery for tickets)
> > > how much they'd pay for a ticket (assuming they didn't win the
> > > lottery). You might get answers like $200.
>
> > That only tells you what people *say*. Economists know damn well that
> > people will say any damn fool thing, but they don't act that way.
>
> Yes, their actual actions are even more irrational.

Actually, they aren't.

Wayne Throop

unread,

Jul 18, 2012, 5:00:43 PM7/18/12

to

::: That only tells you what people *say*. Economists know damn well

::: that people will say any damn fool thing, but they don't act that
::: way.

:: Yes, their actual actions are even more irrational.

You don't understand. People's economic actions are *by* *definition*
rational. What they got by their actions is, by definition, what they
wanted to get. People always accurately predict exactly all the effects
(and side effects) of their choices, or if they didn't, what they *wanted*
was pot-luck. By definition.

Definitions are wonderful things.

The fly in the ointment, of course, is that you can never tell what people
*will* do, because you don't know what they *want* until they actually
*do* something. You can only make heuristic, statistical guesses, which
by their very nature can't take account of fads, transient memes,
and any of the myriad things that can cause statistical heuristics
to gang aft aglay.

But boy howdy, *after* the fact, economics is pretty amazing, since
it predicts that people did exactly what they did. It's always right.
Well... Shawn's version of economics that is.

Cryptoengineer

unread,

Jul 18, 2012, 5:31:27 PM7/18/12

to

On Jul 18, 5:00 pm, thro...@sheol.org (Wayne Throop) wrote:
> ::: That only tells you what people *say*. Economists know damn well
> ::: that people will say any damn fool thing, but they don't act that
> ::: way.
>
> :: Yes, their actual actions are even more irrational.
>
> You don't understand. People's economic actions are *by* *definition*
> rational. What they got by their actions is, by definition, what they
> wanted to get. People always accurately predict exactly all the effects
> (and side effects) of their choices, or if they didn't, what they *wanted*
> was pot-luck. By definition.

By what definition is what someone gets as a result of their actions,
what they wanted to get? If I buy a house, and its value tanks, is
that what I wanted to happen?

> Definitions are wonderful things.
>
> The fly in the ointment, of course, is that you can never tell what people
> *will* do, because you don't know what they *want* until they actually
> *do* something. You can only make heuristic, statistical guesses, which
> by their very nature can't take account of fads, transient memes,
> and any of the myriad things that can cause statistical heuristics
> to gang aft aglay.
>
> But boy howdy, *after* the fact, economics is pretty amazing, since
> it predicts that people did exactly what they did. It's always right.
> Well... Shawn's version of economics that is.

Yes, that's a way its like astrology. Astrologers can always show how
peoples actions are predestined in their stars, if the subjects are
safely dead.

I refer Shawn to Kahneman and Tversky's experiments in Prospect Theory
if he thinks people make rational choices.

pt

Shawn Wilson

unread,

Jul 18, 2012, 5:29:49 PM7/18/12

to

On Jul 18, 2:00 pm, thro...@sheol.org (Wayne Throop) wrote:

> :: Yes, their actual actions are even more irrational.
>
> You don't understand. People's economic actions are *by* *definition*
> rational. What they got by their actions is, by definition, what they
> wanted to get. People always accurately predict exactly all the effects
> (and side effects) of their choices, or if they didn't, what they *wanted*
> was pot-luck. By definition.

Tell me, dumbass, how could you ever conclude that someone's actions
are irrational? You can't see their desires. How do you know their
actions don't, won't, or aren't intended to satisfy them?

Be specific.

Oh, right, it's you. You will deal out a plethora of bullshit and
attacks before running away screaming that you someone 'won'.

Here's an opportiunity to demonstrate your quality. And I *know* you
will...

Shawn Wilson

unread,

Jul 18, 2012, 5:42:02 PM7/18/12

to

On Jul 18, 2:31 pm, Cryptoengineer <petert...@gmail.com> wrote:

> By what definition is what someone gets as a result of their actions,
> what they wanted to get? If I buy a house, and its value tanks, is
> that what I wanted to happen?

I am curious. Why are you asking a manifest moron about technical
economic minutia when you have an actual economist availble? Are you
stupid?

> I refer Shawn to Kahneman and Tversky's experiments in Prospect Theory
> if he thinks people make rational choices.

I *know* people make rational choices. Tversky doesn't refute that.
At best he demonstrates the usual misunderstanding of rationality by
non-economists.

Bill Snyder

unread,

Jul 18, 2012, 5:49:11 PM7/18/12

to

Whereas yours has been demonstrated _ad nauseam_.

--
Bill Snyder [This space unintentionally left blank]

Wayne Throop

unread,

Jul 18, 2012, 5:51:30 PM7/18/12

to

:: You don't understand. =A0People's economic actions are *by*
:: *definition* rational. =A0What they got by their actions is, by

:: definition, what they wanted to get.

: Cryptoengineer <pete...@gmail.com>
: By what definition is what someone gets as a result of their actions,

: what they wanted to get?

Well... economic definitions, of course.
It makes the math ever so much cleaner.

: If I buy a house, and its value tanks, is that what I wanted to
: happen?

Well... sure. You researched the real estate market and projected what
must happen to prices with rigid mathematical precision... which is
clearly possible, what with economics being a precise, mathematical,
hard science and all, or if you didn't, you wanted pot luck.

They laughed at me and made jokes but I proved beyond the shadow of a
doubt and with geometric logic that a duplicate key to the wardroom
icebox DID exist, and I'd have produced that key if they hadn't of
pulled the Caine out of action.
--- Captain Queeg

Wayne Throop

unread,

Jul 18, 2012, 6:02:31 PM7/18/12

to

: Shawn Wilson <ikono...@gmail.com>
: Tell me, dumbass, how could you ever conclude that someone's actions
: are irrational?

You first. *Is* there a way to tell if an action is irrational,
according to your definitions? Be specific.

: You can't see their desires.

You can, of course, infer them by many means, especially observing
whether they are dissatisified with what they got by their action.
Which is also after-the-fact, but at least it's not *assuming* that
what they got is what they wanted, and hence was rational.
*That* is a pretty strong brand of silly.

: How do you know their actions don't, won't, or aren't intended to
: satisfy them?
:
: Be specific.

Hey, I have no problem with one's actions, by definition, being *intended*
to reach some goal, or satisfy some desire. However, that doesn't
allow you to deduce desire from action.

For example, somebody gambles away their money, becomes destitute and
homeless. Was that their desire? Very likely not. Likely they had
some pie-in-the-sky-by-and-by notion of becoming rich by gambling.

Now, is it *rational* to intend to become rich, and gamble to do so?
I don't mean semi-skilled games like blackjack or poker or whatnot.
I mean, say, roulette or the slots, where you can't apply skill to
the ball, wheel, or lever. Is it rational? No.

Now, how can you tell what they intended? One way, if after the fact,
they tend to say "dangit, I didn't *intend* to become a homess and
destitute person". I rather expect that they are pretty honest about
that.

So basically, an action is irrational if you use methods that
are reliably known not to get what you intended going in.

And no, I don't find the "yes he *did* want to become homeless and
destitute" to be very persuasive at all. Unintended consequences
happen daily, to everybody, and to pretend they don't, or to pretend
that all consequences are intended, is silly. I mean *really* silly.
Really *massively* silly.

Now, if you want to make economic predictions based on what people have
done in the past when faced with certain situations, that's all well
and good. But it's no reason to corrupt the language by pretending
that what people do is always rational. Again, really, massively, silly.
And unnecessary.

Shawn Wilson

unread,

Jul 18, 2012, 6:27:21 PM7/18/12

to

On Jul 18, 3:02 pm, thro...@sheol.org (Wayne Throop) wrote:

> : Tell me, dumbass, how could you ever conclude that someone's actions
> : are irrational?
>
> You first. *Is* there a way to tell if an action is irrational,
> according to your definitions? Be specific.

You are proclaiming that people are irrational. *I* don't have to
prove anything. You have asserted that people act irrationallly, I
insist that you prove that you could come to that conclusion.

> : You can't see their desires.
>
> You can, of course, infer them by many means,

Uh, only if you assume people are rational...

If you don't you can't infer anything.

> especially observing
> whether they are dissatisified with what they got by their action.

Nope, because their actions could be predicated on a probability
distribution of outcomes, and nothing says every possibile outcome
must be desirable.

Cryptoengineer

unread,

Jul 18, 2012, 7:37:59 PM7/18/12

to

On Jul 18, 5:42 pm, Shawn Wilson <ikonoql...@gmail.com> wrote:
> On Jul 18, 2:31 pm, Cryptoengineer <petert...@gmail.com> wrote:
>
> > By what definition is what someone gets as a result of their actions,
> > what they wanted to get? If I buy a house, and its value tanks, is
> > that what I wanted to happen?
>
> I am curious. Why are you asking a manifest moron about technical
> economic minutia when you have an actual economist availble? Are you
> stupid?

I'd ask, but David Friedman hasn't posted to this thread in nearly two
weeks. i don't think he's reading it any more.

> > I refer Shawn to Kahneman and Tversky's experiments in Prospect Theory
> > if he thinks people make rational choices.
>
> I *know* people make rational choices. Tversky doesn't refute that.
> At best he demonstrates the usual misunderstanding of rationality by
> non-economists.

You claim to 'just know'. So this is a matter of faith, not knowledge.
Certainly not experimental evidence, such as K & T present.

pt

Wayne Throop

unread,

Jul 18, 2012, 8:40:39 PM7/18/12

to

: Shawn Wilson <ikono...@gmail.com>
: You are proclaiming that people are irrational.

No, I'm not. I'm proclaiming that the notion that all economic
choices are rational, because what they got was w hat they wanted,
is useless and an impediment to understanding.

::: You can't see their desires.

:: You can, of course, infer them by many means,

: Uh, only if you assume people are rational...

Wrong. Just because you are inferring something doesn't mean that
the something is rational. If you can show that a given irrational
action is statistically probable, you can use that to infer the
corresponding goal.

I mean yeesh. Who would suppose people have to be rational
in order to model their behavior? That's really an elementary mistake.

: Nope, because their actions could be predicated on a probability
: distribution of outcomes

whether they are rational or not. Gosh. You may catch up to
the rest of the class someday.

Shawn Wilson

unread,

Jul 18, 2012, 9:04:10 PM7/18/12

to

On Jul 18, 5:40 pm, thro...@sheol.org (Wayne Throop) wrote:

> : You are proclaiming that people are irrational.
>
> No, I'm not. I'm proclaiming that the notion that all economic
> choices are rational, because what they got was w hat they wanted,
> is useless and an impediment to understanding.

Yawn. A ususual you try to put the burden of proof off onto someone
else.

Either they are all rational or you can prove it's possible to
determine that some are irrational. If you can't do the latter, then
you theory of 'irrationality' is menaingless and useless. It's just
invisible demons making things happen.

So...

Put up or shut up.

> ::: You can't see their desires.
> :: You can, of course, infer them by many means,
>
> : Uh, only if you assume people are rational...
>
> Wrong.

Well, since you don't have a Nobel prize...

Really, learn something about economics before spouting nonsense. You
would quite literally win a Nobel Prize if that were true.

> Just because you are inferring something doesn't mean that
> the something is rational.

Actually, here it does.

> If you can show that a given irrational
> action is statistically probable, you can use that to infer the
> corresponding goal.

No. The link between desire and action ***IS*** rationality to
economists. You are operating (again) under an incorrect
understanding of the term 'rational' to economists. You built a straw
man and you successfully slew it.

> I mean yeesh. Who would suppose people have to be rational
> in order to model their behavior? That's really an elementary mistake.

I don't seem to see your name on any list of Nobel Prize winners...

David DeLaney

unread,

Jul 19, 2012, 1:54:45 AM7/19/12

to

Shawn Wilson <ikono...@gmail.com> wrote:
>On Jul 18, 3:02�pm, thro...@sheol.org (Wayne Throop) wrote:
>> : Tell me, dumbass, how could you ever conclude that someone's actions
>> : are irrational?
>>
>> You first. �*Is* there a way to tell if an action is irrational,
>> according to your definitions? �Be specific.
>
>You are proclaiming that people are irrational. *I* don't have to
>prove anything. You have asserted that people act irrationallly, I
>insist that you prove that you could come to that conclusion.

Reductio ad absurdum. If people are rational, then Wayne is rational. If
both of these are true, Wayne cannot argue that people are irrational, as
that does not follow from "people are rational" using rational methods,
and Wayne is rational.

Wayne is arguing that people are irrational. Therefore one of the two premises
is false; either people are NOT all rational, or Wayne specifically is
irrational. Either way, the point that was to be proven is shown. Q.E.D.

>> : You can't see their desires.
>>
>> You can, of course, infer them by many means,
>
>Uh, only if you assume people are rational...
>
>If you don't you can't infer anything.

Exactly. You're the one assuming people are rational; one consequence of that
is that Wayne CANNOT argue that people are irrational. Not 'does not' or
'will not' or 'doesn't want to'; CANNOT. But he is doing so.

>> especially observing
>> whether they are dissatisified with what they got by their action.
>
>Nope, because their actions could be predicated on a probability
>distribution of outcomes, and nothing says every possibile outcome
>must be desirable.

But then restricting some outcomes or choices could make the person better
off, and you've also said that can't happen! Ever!

Dave

Howard Brazee

unread,

Jul 19, 2012, 9:33:31 AM7/19/12

to

On Thu, 19 Jul 2012 01:54:45 -0400, d...@gatekeeper.vic.com (David
DeLaney) wrote:

>Reductio ad absurdum. If people are rational, then Wayne is rational. If
>both of these are true, Wayne cannot argue that people are irrational, as
>that does not follow from "people are rational" using rational methods,
>and Wayne is rational.
>
>Wayne is arguing that people are irrational. Therefore one of the two premises
>is false; either people are NOT all rational, or Wayne specifically is
>irrational. Either way, the point that was to be proven is shown. Q.E.D.

Moving to SF, what can be more irrational than Mr. Spock being
surprised every time humans act like humans?

--
"In no part of the constitution is more wisdom to be found,
than in the clause which confides the question of war or peace
to the legislature, and not to the executive department."

- James Madison

Lowell Gilbert

unread,

Jul 19, 2012, 1:48:16 PM7/19/12

to

Cryptoengineer <pete...@gmail.com> writes:

> I'd ask, but David Friedman hasn't posted to this thread in nearly two
> weeks. i don't think he's reading it any more.

Pennsic is in a week or so; I suspect he's on vacation, and will be
around less for the next several weeks.

David V. Loewe, Jr

unread,

Jul 19, 2012, 2:39:41 PM7/19/12

to

On Thu, 19 July 2012 13:48:16, Lowell Gilbert <lgus...@be-well.ilk.org>
wrote:

He posted to this thread in a rassf only post just yesterday and I see
responses in rasfw from the 16th.
--
"Define 'irony' - Bunch of idiots dancing on a plane to a song
made famous by a band that died in a plane crash."
Garland Greene (Steve Buscemi) - Con Air

David Friedman

unread,

Jul 19, 2012, 12:04:59 PM7/19/12

to

In article <ju6gdh$g19$2...@reader1.panix.com>, se...@panix.com (Seth)
wrote:

This sounds like the Cornell coffee cup experiment. I think the ratio
was about two to one.

For an (evolutionary psychology) explanation, see my:

http://www.daviddfriedman.com/Academic/econ_and_evol_psych/economics_and_
evol_psych.html

--
http://www.daviddfriedman.com/
http://daviddfriedman.blogspot.com/

Author of _Future Imperfect: Technology and Freedom in an Uncertain World_

unread,

Jul 19, 2012, 12:53:06 PM7/19/12

to

In article <ju6g2h$g19$1...@reader1.panix.com>, se...@panix.com (Seth)
wrote:

> In article <ddfr-15CAA6.2...@news.giganews.com>,
> David Friedman <dd...@daviddfriedman.nopsam.com> wrote:
>
> >That's true of some parts of economics. I like to say that one virtue of
> >economics is that it has an answer to the question "if you're so smart,
> >why aren't you rich?" If it's possible to predict shifts in (say) the
> >stock market, people acting on those predictions will eliminate the
> >opportunity to profit from them.
>
> Only if those predictions are sufficiently widely believed.

Yes. But "sufficiently" only requires enough people with enough money to
eliminate the pattern, which is still a tiny fraction of the market.

> That's
> why simple arbs (e.g. S&P futures vs. cash) tend to disappear, while
> more complex or less-believed ones can persist for years or decades
> and remain quite profitable.

But generally those aren't opportunities that can be predicted by
straightforward economic reasoning, since that's a tool that quite a lot
of people have access to.

Hence being a smart economist isn't enough to make you rich.

David Friedman

unread,

Jul 19, 2012, 1:42:00 PM7/19/12

to

In article <ddfr-78AF81.1...@news.giganews.com>,

David Friedman <dd...@daviddfriedman.nopsam.com> wrote:

> We just left for Pennsic this morning. It's about a five day drive, not
> spending a few days visiting en route, and I have an internet connection
> in the car via my cell phone.
>

That should have been "not counting spending a few days" ... .

But I was somewhat busier than usual for the past few weeks, what with
preparations for Pennsic. A big new cook tent. A child's longbow. A
bunch of lapis pendants with the encampment badge engraved in them and
gilded. ...

Juho Julkunen

unread,

Jul 19, 2012, 5:05:53 PM7/19/12

to

In article <ddfr-876FA6.1...@news.giganews.com>,
dd...@daviddfriedman.nopsam.com says...

>
> In article <e43g08p0o5n2a1q4g...@4ax.com>,
> Howard Brazee <how...@brazee.net> wrote:
>
> > Moving to SF, what can be more irrational than Mr. Spock being
> > surprised every time humans act like humans?
> >
>
> Does Spock act as if he doesn't expect humans to act that way--or does
> he only comment on their doing so? The former would be irrational, the
> latter not necessarily.
>
> But I didn't find the Star Trek presentation of rationality a la Spock
> very plausible. In one scene, he chooses an action with a low
> probability of saving his life over an alternative of certain death a
> few hours later--and is accused of being irrational for doing so, since
> the probability of success is low.

Accusation of irrationality was fine by me; they like needling Spock.
It was Spock agreeing that it was an irrational thing to do I had a
problem with.

That same episode (if it is indeed _The Galileo Seven_) does feature
Spock not expecting irrational behaviour from their antagonists. I
think they lose a redshirt as a consquence.

One instance of Spock's illogic that stuck in my memory was him
complaining that Kirk's winning move in chess was illogical.

--
Juho Julkunen

Cryptoengineer

unread,

Jul 19, 2012, 5:17:11 PM7/19/12

to

On Jul 19, 12:48 pm, David Friedman <d...@daviddfriedman.nopsam.com>
wrote:
> In article <e43g08p0o5n2a1q4g3vdqsdgkm8ifhs...@4ax.com>,

> Howard Brazee <how...@brazee.net> wrote:
>
> > Moving to SF, what can be more irrational than Mr. Spock being
> > surprised every time humans act like humans?
>
> Does Spock act as if he doesn't expect humans to act that way--or does
> he only comment on their doing so? The former would be irrational, the
> latter not necessarily.
>
> But I didn't find the Star Trek presentation of rationality a la Spock
> very plausible. In one scene, he chooses an action with a low
> probability of saving his life over an alternative of certain death a
> few hours later--and is accused of being irrational for doing so, since
> the probability of success is low.

If you read the background material, the writers actually had
something a little more subtle going on. Spock's only half-Vulcan, but
he was brought up there, admires his father's culture, and aspires to
'be Vulcan'. But he fails; his illogical human side shines through in
his actions, He frequently tries to spin his decisions (to both
himself and others) as being logical, when in fact they aren't.

pt

Ted Nolan <tednolan>

unread,

Jul 19, 2012, 5:27:28 PM7/19/12

to

In article <ae6273e1-2db9-4357...@i11g2000yqo.googlegroups.com>,

I liked the Dianne Duanne ST book where she claimed that "logic" was
really a bad translation of the Vulcan term and that "reality acceptance"
would be closer, and that "Stoicism" would not be out of the ballpark.
--
------
columbiaclosings.com
What's not in Columbia anymore..

Jerry Brown

unread,

Jul 19, 2012, 6:08:39 PM7/19/12

to

My take on it was that Spock was overcompensating for his half-human
side by trying to act hyper-Vulcan. And then getting irritated at
failing. And then getting irritated at succumbing to the emotion of
irritation in the first place. Certainly the other Vulcans we meet in
the original series didn't seem to be particularly dedicated to a
fully logical and emotionless way of life: e.g. Sarek's pettiness in
not talking to Spock in Journey to Babel, and T'Pring and Stonn
plotting to break up Spock's arranged marriage like a couple of soap
opera characters.

--
Jerry Brown

A cat may look at a king
(but probably won't bother)

Shawn Wilson

unread,

Jul 19, 2012, 6:15:37 PM7/19/12

to

On Jul 18, 10:54 pm, d...@gatekeeper.vic.com (David DeLaney) wrote:

> >> You first. *Is* there a way to tell if an action is irrational,
> >> according to your definitions? Be specific.
>
> >You are proclaiming that people are irrational. *I* don't have to
> >prove anything. You have asserted that people act irrationallly, I
> >insist that you prove that you could come to that conclusion.
>
> Reductio ad absurdum. If people are rational, then Wayne is rational. If
> both of these are true, Wayne cannot argue that people are irrational, as
> that does not follow from "people are rational" using rational methods,
> and Wayne is rational.

Or, not. 'Rational;' to an economist does not mean infallble. Just
because he is rational (in the economic sense) does not mean he is
correct about all, or even any of his beliefs.

You are trying to make the economists assumption of rationality into
something it is not. All it is to an economist is that people make
choices predicated on their preferences.

Note especially, hyper complex mathematical calculations are how we
solve mathematical simulations. They aren't how the real world works
itself out. The most powerful supercomputer in the world could not
solve all the complex quantum interactions involved in a mathematical
model of a coin flip, but the coin will tell you the aqnswer every
time. No one is claiming the coin is doing high level math.

> Wayne is arguing that people are irrational. Therefore one of the two premises
> is false; either people are NOT all rational, or Wayne specifically is
> irrational. Either way, the point that was to be proven is shown. Q.E.D.

Or 'rational' does not mean what you are trying to make it mean.

> >> : You can't see their desires.
>
> >> You can, of course, infer them by many means,
>
> >Uh, only if you assume people are rational...
>
> >If you don't you can't infer anything.
>
> Exactly. You're the one assuming people are rational; one consequence of that
> is that Wayne CANNOT argue that people are irrational. Not 'does not' or
> 'will not' or 'doesn't want to'; CANNOT. But he is doing so.

Since I can *never* point my finger at something and say "that was
irrational", what other assumption can I make? 'Irrationality'
functionally does not exist. Irrationality is just another word for
invisible demons.

> >> especially observing
> >> whether they are dissatisified with what they got by their action.
>
> >Nope, because their actions could be predicated on a probability
> >distribution of outcomes, and nothing says every possibile outcome
> >must be desirable.
>
> But then restricting some outcomes or choices could make the person better
> off

Nope. It's set theory 101.

David DeLaney

unread,

Jul 19, 2012, 6:43:20 PM7/19/12

to

David Friedman <dd...@daviddfriedman.nopsam.com> wrote:
> d...@gatekeeper.vic.com (David DeLaney) wrote:
>> Reductio ad absurdum. If people are rational, then Wayne is rational. If
>> both of these are true, Wayne cannot argue that people are irrational, as
>> that does not follow from "people are rational" using rational methods,
>> and Wayne is rational.
>
>Shawn is missing a reductio, but that isn't it. Wayne might have all
>sorts of rational reasons for arguing for something that he doesn't
>believe is true.

Shawn also isn't skilled enough to find that nitpick, plus which if Wayne
is using arguments that end up proving things he doesn't think are true,
then somewhere in his -axioms- he's got something wrong, and again he's
not being rational, though this time it's in his choice of starting points
rather than his choice of methods. And then we get the same result.

Shawn Wilson

unread,

Jul 19, 2012, 6:37:09 PM7/19/12

to

On Jul 19, 9:43 am, David Friedman <d...@daviddfriedman.nopsam.com>

wrote:

> > > You can, of course, infer them by many means,
>
> > Uh, only if you assume people are rational...
>
> And if, by doing so, you infer objectives which turn out not to be what
> they could have expected to achieve by their actions, you have evidence
> that the assumption is false. It's a form of reasoning called "reductio
> ad absurdum"--make an assumption and show that it leads to a
> contradiction.

How could you do that? Especially since we cannot assume perfect, or
even correct, information in the actor to begin with? The assumption
of rationality does not rule out false beliefs.

Shawn Wilson

unread,

Jul 19, 2012, 6:34:31 PM7/19/12

to

On Jul 19, 9:08 am, David Friedman <d...@daviddfriedman.nopsam.com>
wrote:

> I think a better response to Seth is that the economist's assumption of
> rationality, although not perfectly accurate, may still be the best tool
> available for predicting the behavior of strangers.

Sigh... Once again David your lack of an economics education has
bitten you in the ass. 'Rationality' as an economic assumption does
not mean what you think it does. It is not knowledge, it is not
intelligence. Insects are rational. The most depraved and insane
serial killer you can imagine is, to an economist, still perfectly
rational. That mother who drowned her children in a state of
craziness, and is now committed to a mental hospital and periodically
suicidal when her treatment makes her sane enough to realize the
enormity of what she has done is perfectly rational now and was also
perfectly rational then.

"I desire X over Y so I will choose X over Y" is what rational means
to an economist.

> And there is an interesting sense in which the observed patterns of
> "irrationality" may be themselves rational. Given limited mental
> resources, it may be rational to allocate the high quality decision
> making process ("slow mind") to the more important issues and the low
> quality one (fast mind) to most others. The mistakes then come from
> rules of thumb that have to be used in order to process a very large
> amount of information very fast.

Eh. Information Economics 101. Most times all but utterly irrelevant
(you already know what to expect re Coke v Pepsi) , other times of
devastating importance.

David Friedman

unread,

Jul 19, 2012, 6:55:08 PM7/19/12

to

In article <slrnk0h1u...@gatekeeper.vic.com>,

d...@gatekeeper.vic.com (David DeLaney) wrote:

> David Friedman <dd...@daviddfriedman.nopsam.com> wrote:
> > d...@gatekeeper.vic.com (David DeLaney) wrote:
> >> Reductio ad absurdum. If people are rational, then Wayne is rational. If
> >> both of these are true, Wayne cannot argue that people are irrational, as
> >> that does not follow from "people are rational" using rational methods,
> >> and Wayne is rational.
> >
> >Shawn is missing a reductio, but that isn't it. Wayne might have all
> >sorts of rational reasons for arguing for something that he doesn't
> >believe is true.
>
> Shawn also isn't skilled enough to find that nitpick, plus which if Wayne
> is using arguments that end up proving things he doesn't think are true,
> then somewhere in his -axioms- he's got something wrong, and again he's
> not being rational, though this time it's in his choice of starting points
> rather than his choice of methods. And then we get the same result.

The fact that he uses arguments doesn't imply that he believes in them.

David Friedman

unread,

Jul 19, 2012, 6:56:18 PM7/19/12

to

In article
<78e17259-5b3e-499f...@la19g2000pbb.googlegroups.com>,

I was explaining why your "only if you assume people are rational"
wasn't a rebuttal to his argument. I'll leave you and him to argue about
whether you have a different rebuttal.

David Friedman

unread,

Jul 19, 2012, 6:58:29 PM7/19/12

to

In article
<60ae8999-a169-4e83...@s6g2000pbi.googlegroups.com>,

Shawn Wilson <ikono...@gmail.com> wrote:

> On Jul 19, 9:08�am, David Friedman <d...@daviddfriedman.nopsam.com>
> wrote:
>
> > I think a better response to Seth is that the economist's assumption of
> > rationality, although not perfectly accurate, may still be the best tool
> > available for predicting the behavior of strangers.
>
>
> Sigh... Once again David your lack of an economics education has
> bitten you in the ass. 'Rationality' as an economic assumption does
> not mean what you think it does. It is not knowledge, it is not
> intelligence. Insects are rational.

You will find a discussion of rational genes in my _Price Theory_--I
don't know if it was a text in any of the courses you took.

...

> "I desire X over Y so I will choose X over Y" is what rational means
> to an economist.

No. What rationality means to an economists is that individuals tend to
choose those actions that best achieve their objectives.

The problem with the line of argument you have been using here is that
it makes rationality an entirely empty assumption--one with no
predictive power at all.

...

David Friedman

unread,

Jul 19, 2012, 6:59:46 PM7/19/12

to

In article
<b3bc884b-4f87-4d10...@n9g2000pbi.googlegroups.com>,

Shawn Wilson <ikono...@gmail.com> wrote:

> Since I can *never* point my finger at something and say "that was
> irrational", what other assumption can I make?

In other words, you regard rationality as an untestable assumption.

Keith F. Lynch

unread,

Jul 19, 2012, 7:25:26 PM7/19/12

to

Shawn Wilson <ikono...@gmail.com> wrote:
> Since I can *never* point my finger at something and say "that was
> irrational", what other assumption can I make? 'Irrationality'
> functionally does not exist. Irrationality is just another word
> for invisible demons.

Your theory of rationality is unfalsifiable hence unscientific and
meaningless. For a theory to be meaningful there has to be an
imaginable set of observations which would prove it wrong.
--
Keith F. Lynch - http://keithlynch.net/
Please see http://keithlynch.net/email.html before emailing me.

Keith F. Lynch

unread,

Jul 19, 2012, 7:33:29 PM7/19/12

to

Juho Julkunen <giao...@hotmail.com> wrote:
> Accusation of irrationality was fine by me; they like needling
> Spock. It was Spock agreeing that it was an irrational thing
> to do I had a problem with.

Likewise. The "flare" decision was perfectly rational.

(It's also based on a bit of real history.)

Keith F. Lynch

unread,

Jul 19, 2012, 7:51:49 PM7/19/12

to

David Friedman <dd...@daviddfriedman.nopsam.com> wrote:
> Lowell Gilbert <lgus...@be-well.ilk.org> wrote:
>> Cryptoengineer <pete...@gmail.com> writes:
>>> I'd ask, but David Friedman hasn't posted to this thread in nearly
>>> two weeks. i don't think he's reading it any more.

Huh? He's the single most prolific poster in this thread, and I don't
think he has missed a single day.

>> Pennsic is in a week or so; I suspect he's on vacation, and will be
>> around less for the next several weeks.

> We just left for Pennsic this morning. It's about a five day drive,
> not spending a few days visiting en route, and I have an internet
> connection in the car via my cell phone.

I hope you aren't typing while driving.

Keith F. Lynch

unread,

Jul 19, 2012, 7:55:48 PM7/19/12

to

David Friedman <dd...@daviddfriedman.nopsam.com> wrote:
> se...@panix.com (Seth) wrote:
>> Then ask the winners (including some of the same people) how much
>> they'd sell their tickets (which they bought for $50 after winning
>> the lottery) for, and get answers like $1000.

> This sounds like the Cornell coffee cup experiment. I think the
> ratio was about two to one.

More likely, if someone appeared eager to buy a lottery ticket, that
may have led the ticket owner to believe that the would-be buyer knew
something about the value of the ticket that the owner did not.

Keith F. Lynch

unread,

Jul 19, 2012, 8:16:58 PM7/19/12

to

David DeLaney <d...@vic.com> wrote:
> Reductio ad absurdum. If people are rational, then Wayne is
> rational. If both of these are true, Wayne cannot argue that people
> are irrational, as that does not follow from "people are rational"
> using rational methods, and Wayne is rational.

> Wayne is arguing that people are irrational. Therefore one of the
> two premises is false; either people are NOT all rational, or Wayne
> specifically is irrational. Either way, the point that was to be
> proven is shown. Q.E.D.

Wayne could be rational but mistaken. Or it could be that some but
not all people are rational.

More often I see claims that every person is irrational. This claim
is self-negating when spoken by a person.

Shawn Wilson

unread,

Jul 19, 2012, 8:31:49 PM7/19/12

to

On Jul 19, 3:58 pm, David Friedman <d...@daviddfriedman.nopsam.com>

wrote:

> > > I think a better response to Seth is that the economist's assumption of
> > > rationality, although not perfectly accurate, may still be the best tool
> > > available for predicting the behavior of strangers.
>
> > Sigh... Once again David your lack of an economics education has
> > bitten you in the ass. 'Rationality' as an economic assumption does
> > not mean what you think it does. It is not knowledge, it is not
> > intelligence. Insects are rational.
>
> You will find a discussion of rational genes in my _Price Theory_--I
> don't know if it was a text in any of the courses you took.

Judging by what you write here, you don't understand the concept.

> > "I desire X over Y so I will choose X over Y" is what rational means
> > to an economist.
>
> No. What rationality means to an economists is that individuals tend to
> choose those actions that best achieve their objectives.

No. People don't necesarily know how to best achieve their
objectives. Among their perceived options they will choose the one
they think is best. This is *different* than "individuals tend to

choose those actions that best achieve their objectives".

> The problem with the line of argument you have been using here is that
> it makes rationality an entirely empty assumption--one with no
> predictive power at all.

David, no one said this particular assumption HAD predictive power.
That isn't what it exists for. It exists because it is a necessary
link in the chain of utility theory. Utility theory is predictive.

Shawn Wilson

unread,

Jul 19, 2012, 8:33:17 PM7/19/12

to

On Jul 19, 3:59 pm, David Friedman <d...@daviddfriedman.nopsam.com>

wrote:

> > Since I can *never* point my finger at something and say "that was
> > irrational", what other assumption can I make?
>
> In other words, you regard rationality as an untestable assumption.

Right. Me and every other economist. If you ever had taken Micro1
(not principles) you would know this.

David Friedman

unread,

Jul 19, 2012, 8:40:24 PM7/19/12

to

In article <jua6il$mt8$1...@reader1.panix.com>,

"Keith F. Lynch" <k...@KeithLynch.net> wrote:

> > We just left for Pennsic this morning. It's about a five day drive,
> > not spending a few days visiting en route, and I have an internet
> > connection in the car via my cell phone.
>
> I hope you aren't typing while driving.

My wife does most of the driving.

unread,

Jul 20, 2012, 12:23:23 AM7/20/12

to

In article
<5f0c848b-6980-45a7...@wt8g2000pbb.googlegroups.com>,

Which of them? VPI? UCLA? Tulane? Chicago? Santa Clara?

I've taught some version of price theory at all of those schools.

My textbook wasn't a great success, but it did go through two editions.

Wayne Throop

unread,

Jul 20, 2012, 1:39:58 AM7/20/12

to

Sea Wasp (Ryk E. Spoor)

unread,

Jul 20, 2012, 11:19:13 AM7/20/12

to

On 7/20/12 6:00 AM, Philip Chee wrote:
> On Thu, 19 Jul 2012 23:49:22 -0700, David Friedman wrote:
>> In article <13427...@sheol.org>, thr...@sheol.org (Wayne Throop)
>> wrote:
>>
>>> :: Shawn Wilson <ikono...@gmail.com>
>>> :: People don't necesarily know how to best achieve their objectives.
>>> :: Among their perceived options they will choose the one they think is
>>> :: best. This is *different* than "individuals tend to choose those
>>> :: actions that best achieve their objectives".
>>>
>>> And often, their thinking is irrational. Based on heuristics,
>>> or bizarre "magical" thinking, or any number of irrational
>>> and largely unexamined strategies.
>>>
>>> : David Friedman <dd...@daviddfriedman.nopsam.com>
>>> : Unless you have a theory about what determines what they think, that
>>> : version has no predictive power--indeed is useless.
>>>
>>> Yes. Exactly so. The claim that people always act rationally,
>>> as an axiom, gets you nowhere.
>>
>> Shawn's version gets you nowhere. My version helps predict behavior.
>
> But those predictions only work for perfectly spherical people.
>

Not quite. I think they work for perfectly KNOWN people. That is, you
could predict what people would do as rational actors if you knew
EVERYTHING about what they wanted. But people (A) don't always want ONE
thing, and (B) have conflicting wants that they often can't even
verbalize and which affect their behavior in ways that will look
completely irrational if you don't know what's going on in their
subconscious.

So in the ultimate sense, yes, people are completely rational if
"rational" simply means "act to get what they want". The problem is
determining what people want, and the mental processes they go through
to determine which "want" is getting priority.

The general use of the word "rational" means "sensible", and usually
implies careful, measured thought. The version implied here would
include a man who stabs his wife in a fit of anger as "rational" because
at that precise moment he wanted to shut her up/strike against the thing
making him angry, even if there is no SENSIBLE reason for him to do so
(he's now killed someone he loves, he's destroyed his life, he's going
to prison which was not, one presumes, what he really wanted).

Most of us use "rational decision" to mean "thought out, well
understood, sensible", but apparently that's not what it means in this
context.

--
Sea Wasp
/^\
;;;
Website: http://www.grandcentralarena.com Blog:
http://seawasp.livejournal.com

Juho Julkunen

unread,

Jul 20, 2012, 11:46:00 AM7/20/12

to

In article <jubsti$r2c$1...@dont-email.me>, sea...@sgeinc.invalid.com
says...

> The general use of the word "rational" means "sensible",

> Most of us use "rational decision" to mean "thought out, well
> understood, sensible", but apparently that's not what it means in this
> context.

'Rational' does have a specific technical meaning in fields like AI and
economics.

--
Juho Julkunen

David DeLaney

unread,

Jul 20, 2012, 1:06:57 PM7/20/12

to

Philip Chee <phi...@aleytys.pc.my> wrote:
>David Friedman wrote:

>> thr...@sheol.org (Wayne Throop) wrote:
>>> Yes. Exactly so. The claim that people always act rationally,
>>> as an axiom, gets you nowhere.
>>
>> Shawn's version gets you nowhere. My version helps predict behavior.
>
>But those predictions only work for perfectly spherical people.
>
>Phil (is in shape, round is a shape isn't it?)

We're talkin' bout my g-g-generation of Americans here, so it all works out,
right?

Dave "rollin' rollin' rollin'" DeLaney
--
\/David DeLaney posting from d...@vic.com "It's not the pot that grows the flower
It's not the clock that slows the hour The definition's plain for anyone to see
Love is all it takes to make a family" - R&P. VISUALIZE HAPPYNET VRbeable<BLINK>
http://www.vic.com/~dbd/ - net.legends FAQ & Magic / I WUV you in all CAPS! --K.