Good work Keith, followed you all the way to the end but then you seemed to opt for the Mao solution. Revolution anyone? How about when your life is over, strapping on a suicide belt and walking into the company that stripped you of your funds? Orgasm anyone? Isn't this all about sex after all?
One point I would mention as one of those small folks is that we were encouraged to invest our funds with larger folks who were supposed to be the professionals but who in reality actually took our money and bet against us for their private stocks. So I would call that a draw between the two of you. My wife's small stocks invested with these folks has gone up one or two percent before dropping to the negative. Of course they locked her in so she can't bolt without pretty well losing everything. I call that the BP solution. That's what a business degree gets you these days. She went back to school and paid for that at a down time in the theater and now she had, what did you call it Keith, a "double-dip." Is this the reason England has gun laws? How much did you make on Handlo? $50,000-$100,000 a year? :>)) REH From: [email protected] [mailto:[email protected]] On Behalf Of Keith Hudson Sent: Monday, July 12, 2010 2:53 AM To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION Subject: Re: [Futurework] Keynes the convert At 23:01 11/07/2010 -0700, Sandwichman wrote: Seriously though, Keith, are you calling the French intersubjectivist economists "naive"? Are you calling the recognition of uncertainty "naive"? I have no idea who these "French intersubjectivist economists" are or what they say so I'll pass on this one. Here's a very brief summary. People confronted with radical uncertainty (say about the direction of the market) can fall back on social convention or mimesis. It is individually rational for someone to copy the behavior of someone they believe to be better informed than they are. All that is now out-of-date. The stock markets have gone up repeatedly (despite underlying conditions) since about 2000 because small investors (in individual stocks) have been dropping away fast to be replaced by big institutions (unit trusts, insurance companies, pensions funds) which have simply got to invest their money somewhere. Collectively, such mimetic behavior can become a self-fulfilling prophecy regardless of fundamentals -- the market goes up because a consensus is buying that stock. Yes, but it's now desperation by the major investors rather than mimesis because there's hardly any other place to park their money, other than governments bonds (poor returns) or corporate bonds (risky). The only "information" anyone needs is that everyone else is doing it. "Everyone" now being mostly large investing institutions, not individuals. Such a market is "efficient" in the sense that it is performing on the basis of a minimum of information. But the allocation of resources that results from such efficiency is not itself "efficient" in any meaningfully human terms. Cosmologically, a market that misallocates resources could be considered perfectly efficient. It is only from the very subjective perspective of individual's hopes, dreams, morals and fears that an erratic market would be deemed to be "inefficient". Similarly a car crash would be "efficient" from a particle physics standpoint. The forces would all be deployed nicely according to the principle of least effort. Too bad that the passenger whose head is efficiently sailing through the windshield, efficiently distributing bone and flesh and blood over the car's hood and the pavement according to the law's of physics doesn't have the composure to contemplate the mechanical efficiency of the events that are unfolding. It would be naive to think of a car crash as anything other than a manifestation of the principle of least effort! And that's the way it will happen when the double-dip actually occurs -- this being the most efficient way of bringing governments to their senses. Keith On 7/11/10, Sandwichman <[email protected]> wrote: > "one would have to be naive to believe that stock markets are anything > other than approximate manifestations [of the principal of least > effort]." > > Oh, Dr. Pangloss! Surely that must be a quote from Voltaire's Candide. > May I paraphrase? > > "One would have to be naive to believe that stock markets are anything > other than all for the best in the best of all possible worlds." > - Show quoted text - > -- > Sandwichman > > On 7/11/10, Sandwichman <[email protected]> wrote: >> "one would have to be naive to believe that stock markets are anything >> other than approximate manifestations [of the principal of least >> effort]." >> >> Oh, Dr. Pangloss! Surely that must be a quote from Voltaire's Candide. >> May I paraphrase? >> >> "One would have to be naive to believe that stock markets are anything >> other than all for the best in the best of all possible worlds." >> >> >> >> >> On 7/11/10, Keith Hudson <[email protected]> wrote: >>> We'll obviously have to agree to differ over the interpretation of what >>> Keynes said about Hayek's ideas and what Hayek thought about Keynes's. >>> >>> As to the "Efficient Market Hypothesis", it's a straw man as far as I'm >>> concerned. All the necessary information that would be necessary to >>> test >>> it -- in economics -- can never be fully known. The principle of least >>> effort (maximum efficiency) is something that runs through all physics >>> from >>> fundamental particles through to cosmological events but one would have >>> to >>> be naive to believe that stock markets are anything other than >>> approximate >>> manifestations of it. >>> >>> Keith >>> >>> >>> At 11:34 11/07/2010 -0700, you wrote: >>>>It's news to me that Schumpeter's creative destruction has been >>>>"largely ignored". Paragraph five contains a remarkable instance of >>>>argument by elision and insinuation. The only reference to Keynes in >>>>"The Road to Serfdom" is a warmly approving citation of his 1915 >>>>critique of the militarization of industrial life in Germany. To say >>>>that Hayek argued that Keynes's ideas would lead to Soviet-style >>>>totalitarianism is a slander against Hayek. To then say that Keynes >>>>acknowledged an argument that Hayek didn't make is then fatuous. But >>>>let's get down to brass tacks. The idea that Hayek is criticizing, and >>>>praising Keynes for criticizing, is summed up in the following: >>>> >>>>"Individualism must come to an end absolutely. A system of regulation >>>>must be set up, the object of which is not the greater happiness of >>>>the individual... but the strengthening of the organized unity of the >>>>state for the object of attaining the maximum degree of efficiency, >>>>the influence of which on individual advantage is only indirect. -- >>>>This hideous doctrine is enshrined in a sort of idealism." >>>> >>>>May I remind Keith that "the object of attaining the maximum degree of >>>>efficiency" is the single overarching rationale for the market >>>>fundamentalism of the last 30 years that has adopted Hayek as its >>>>patron saint? Anyone heard of the Efficient Market Hypothesis? The >>>>stuff is steeped in two things: the worship of "efficiency" and the >>>>dogmatic certainty that the market and only the market is the >>>>guarantor of "the maximum degree of efficiency." >>>> >>>> >>>> >>>> >>>>On 7/11/10, Keith Hudson <[email protected]> wrote: >>>> > John Maynard Keynes was one of the most humane and brilliant minds of >>>> > the >>>> > last century. At the Versailles Conference after the First World War >>>> > and >>>> > Germany's defeat, President Clemenceau of France was adamant that >>>> > millions >>>> > of German civilians should be allowed to starve to death. It was >>>> > Keynes >>>> > (then a Treasury official) who persuaded Prime Minister Lloyd George >>>> > to >>>> > oppose Clemenceau's plans and make sure that emergency food was sent. >>>> > >>>> > Unfortunately Keynes was less successful when trying to persuade >>>> > Lloyd >>>> > George and Clemcnceau not to punish Germany's economy too fiercely. >>>> > It >>>> > was >>>> > then that he wrote one of his most famous books, "The Economic >>>> > Consequences >>>> > of the Peace" (1919) when he forecast the German instability that >>>> > would >>>> > follow France's vengeance. Thus the subsequent Weimar hyperinflation >>>> > of >>>> > the >>>> > 1920s, the Great Depression which followed and the subsequent >>>> > outbreak >>>> > of >>>> > the Second World War did not surprise him. >>>> > >>>> > Brilliant though Keynes was, he was also someone who could never >>>> > quite >>>> > make >>>> > up his mind on other issues for most of his life. For some years he >>>> > had >>>> > a >>>> > homosexual relationship with a young man, Sebastian Sprott at the >>>> > same >>>> > time >>>> > as one with Lydia Lopokova, a leading ballerina of the 1920s. It >>>> > became >>>> > an >>>> > effort of will to finally plump for Lydia, whom he married in 1925 >>>> > (and >>>> > a >>>> > happy marriage ensued). >>>> > >>>> > He was equally vacillating about his economic ideas and the book for >>>> > which >>>> > he is best known, his "General Theory", is self-contradictory in >>>> > places >>>> > -- >>>> > which he acknowledged himself later. His main fault is that he said >>>> > (most >>>> > of the time anyway) that money was the prime motivator of consumer >>>> > goods >>>> > consumption and that if governments showered money on people in bad >>>> > times >>>> > then they would start buying goods and the economy would recover. But >>>> > money >>>> > is only a transient intermediary. It's the attractiveness of the >>>> > goods >>>> > themselves which causes people to work hard, save money and buy them. >>>> > >>>> > In fact, when Friedrich Hayek opposed Keynes' ideas in his book, "The >>>> > Road >>>> > to Serfdom" (1944) -- as leading to Soviet-style totalitarianism -- >>>> > Keynes >>>> > finally acknowledge that his own main idea had been wrong. He wrote >>>> > to >>>> > Hayek: "In my opinion it is a grand book ... Morally and >>>> > philosophically >>>> > I >>>> > find myself in agreement with virtually the whole of it: and not only >>>> > in >>>> > agreement with it, but in deeply moved agreement." >>>> > >>>> > Furthermore, only ten days before he died of a heart attack in 1946 >>>> > he >>>> > told >>>> > Henry Clay at a Bank of England lunch that he was finally a convert >>>> > to >>>> > Adam >>>> > Smith's primary idea of the invisible hand. He said: "I find myself >>>> > more >>>> > and more relying for a solution of our problems on the invisible hand >>>> > which >>>> > I tried to eject from economic thinking twenty years ago." >>>> > >>>> > Keynes was brilliant enough to be able to change his mind -- and not >>>> > to >>>> > be >>>> > ashamed when he did so. Unfortunately, that cannot be said of some >>>> > public >>>> > economists who are certainly clever but nowhere near as brilliant as >>>> > Keynes >>>> > or -- dare I say it? -- Hayek. >>>> > >>>> > Incidentally, the other great economist of the last century who also >>>> > argued >>>> > forcefully against Keynes' earlier ideas was Joseph Schumpeter, >>>> > someone >>>> > whose ideas of "creative destruction" are largely ignored because >>>> > they're >>>> > uncomfortable. But as we're living in uncomfortable times perhaps >>>> > some >>>> > of >>>> > our public economists ought to do some reading of him also. >>>> > >>>> > Keith >>>> > >>>> > Keith Hudson, Saltford, England >>>> >>>> >>>>-- >>>>Sandwichman >>> >>> Keith Hudson, Saltford, England >> >> >> -- >> Sandwichman >> > > > -- > Sandwichman > -- Sandwichman _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework Keith Hudson, Saltford, England
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