Like I said: It's like my wife's investment in with Citibank. REH -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Sandwichman Sent: Monday, July 12, 2010 3:13 AM To: Keith Hudson; RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION Subject: Re: [Futurework] Keynes the convert
O.K., so you ARE saying that "efficient" is perfectly consistent with erratic, unstable and socially irrational and thus implies no normative value. It's just whatever happens. We call that a tautology. As for a double dip "bringing government to its senses" that's wishful thinking. -- Sandwichman On 7/11/10, Keith Hudson <[email protected]> wrote: > 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 All that is now out-of-date.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 > > _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework
