EconBabe

On the philosophical point, I agree that reason constitutes much of what we have to use as a basis of discussion, but I also attach considerable importance to unreasonable things like judgment, manners, openness, etc. I cannot consider reason absolute because it is never complete. I appreciate your concern that economics must be a subset of politics, but I do not start with that premise. It seems to me that we can observe economic principles at work in the animal kingdom, where the economic actors have no politics, and no ability to apply science toward re-creating the boundary conditions that determine their economic lives. Maybe economics is not very interesting at that level, but there is still an implacable argument to had here about whether or not economic principles resolve to a determinant system even when the characteristically human element is provisionally removed. I find it interesting that a lot of people just know, based on their politics, that the math will never fit together. If we can agree as to what is and is not naturally determined, then I think we humans go on to a reasonable discussion about what is to be done given a discreet range of options. The questions ‘who decides’ what individuals do with their economic options does frame the issue properly. The antagonistic answer is that, from a certain distance of analysis, economic principles decide. Let me illustrate with a parallel question: If you accept that you are witnessing mathematically describable order in the swirling pattern of a flock of birds, then which bird decides on the pattern? The answer is of course that all the individual birds want to do is 1) get to the center of the flock and 2) not bump into another bird. The overall pattern created by the group is a spontaneously generated consequence of the naive intentions of its members. Interestingly enough, this sort of ‘complexity thinking’ might be said to have originated in Hayek’s efforts to understand the ‘spontaneous ordering’ of markets. SFEcon is a demonstration that the familiar patterns of overall economic adjustment can be attributed to individuals maximizing their own interests, as far as these might be defined in economic terms. The demonstration is fascinating in that it works for any number of individuals and comprehends every intersection of their interests. Your apparent fear of what the ‘economic command’ mentality might do with this tool is probably well-placed. But refusing to accept the math, or asserting that it is subservient to politics, is only going to discredit your position. I suggest it would be wiser to let algebra be algebra, and assume that people of good judgment will arrive at a proper scope for its application.

Wow, You guys are keeping me busy! For Roland: Yes, SFEcon is my basis for presuming the Vienna Problem is solved. How did you find them? I do not understand why (if?) you did not find an acceptable solution there. What are your thoughts?

I suppose I owe David a separate reply. With respect, no econometric model presumes to address the Vienna Problem. Now that I have stated the problem more formally, I hope that is clear. I had hoped to avoid a deep philosophical discussion, but lets get some things out of the way. I think mankind would be foolish to abandon the free market; but this is not because free-market economics cannot be described. My problem is with people who think the free market is necessary because ignorance as to its workings is necessary. There is no Randian nobility in brute necessity. Unlike Rand, I cannot agree that reason is absolute. In fact, I am trying to discuss a matter in which (what I am pleased to call) mere human reason has manifestly disallowed an objective algebraic fact. I am sure the economic planners at COMECOM were exceedingly rational beings. I see no REASON for the objective universe to exhibit the laws that it does. I consider ‘valuation’ to be a natural process, like ‘gravitation’ because we can witness it at work in natural systems, e.g. ant colonies. In having this debate elsewhere, I find the objection to a determined theory of materialism based on its presumed affront to human will and dignity. I ask you, is not economics a statement on how inputs might be combined with one another? Is not the Periodic Chart of chemical elements another such statement? Are you affronted by the limits imposed on your being by the Periodic Chart?

Thanks for the pointers. If you think I should post under politics, I will give it a try. But, while I am here, lets try this: If the Vienna Problem is solved, then economics moves from being a matter of political contention over to being a science. It seems to me much more likely that a quantitative generalist will be persuaded by the evidence than an economist. By ‘Vienna Problem’, I mean a mathematically determined economic state that is steady because it is 1) balanced with regard to its inputs and outputs, and 2) optimal in that all sectors perceive themselves as operating where marginal revenues equal marginal costs. It seems that people constitutionally devoted to reason have a priori reasons for concluding that there can be no general and dynamic descriptions of such states. A formal statement of the problem involves so many degrees of curvature that the problem can never ‘be factored’ so as to yield a solution. The point I wish to contend is that there exists exactly one exception to this otherwise perfectly reasonable conclusion.

Hi, Am I correct in that the Libertarian Right is metaphysically dependent on the impossibility of solving certain classic problems in economic science, e.g. the Vienna Problem? Or: could the Libertarian outlook on social organization be sustained if a solution were ever accepted? I ask these questions because I have become directly acquainted with a unique and general solution to the Vienna Problem, and have observed Libertarian economists responding to it like 15th Century Cardinals confronted with the Copernican System. Given that Libertarian thought has quite a grip on economics (e.g. the Hoover Institution’s control of National Science Foundation funding) I find this situation to be a barrier in pursuing my academic career. As people who believe utterly in the arrival at truth through the free exchange of ideas, I am sure this circumstance – if you could conceive it to be true – would be something you would be anxious to address. So, if you have a mathematically competent champion of the Vienna Problem’s indissolubility, please step forward and lets have at it. If this board is not the place to complete the argument, I can arrange for us to move elsewhere.