Hi Harry, I must be brief. I spent too long on my bioeconomy posting this morning and dogwalk looms. Besides, the Sunday papers have arrived and I'll have something to read (if the rain holds back).
Yes, many things can be predicted according to known human needs and present-day notions of economics. But many other things can't be predicted. For example, no economist can predict when and if the American consumer will carry on spending at the present rate. Yet this is probably the most important factor that needs to be known at the present time. What the average customer spends in the next few weeks will probably determine whether America has a long, but gentle, take-off from the present recession, or whether America will decline swiftly into a Japanese-type deflation from which the only way out will be a resumption of inflation and competitive protectionism which could land us all in deep trouble for a long time to come. Keith At 15:11 01/08/02 -0700, you wrote: >Keith, > >Of course we can predict how humans will behave. > >They have unlimited desires, which they seek to satisfy with the least >exertion, and they are subject to unrewarded curiosity. > >Cute things. > >Actually, "people prediction" takes place constantly and is usually pretty >correct. > >Stores have to predict what people want or they wouldn't know what to put >on their shelves. Economists couple their techniques to knowledge and >experience in order to tell the production staff how many widgets will be >needed next month. > >I would say that is where economists and economic skills are useful - >handling widgets, or tomatoes, or cars. It's when they try to bring >everything into the calculations that they run into trouble. > >I'm referring of course to GNP, GDP, CPI, and all the other acronyms with >which we are saddled. I doubt these figures are of any use to the people >who are the economy. They are produced by governments for governments. >Also, I suppose, for politicians so they can appear to understand what is >going on. > >However, all this busy-work serves only to complicate the simple. The >economy consists of people exchanging goods and services. Indeed, that is >all that matters. > >All these goods are produced by combining the three factors of production - >Land Labor and Capital. We should understand the relationships between >these three factors if we want to understand economics. > >Why should we worry about "variables" when we have solid invariables. Where >we need to predict, prediction is possible and indeed essential if commerce >is properly to proceed. > >I know Jim across the road will go to the supermarket. I haven't a clue >what he will buy. I also know that the supermarket will have the things >that Jim wants to buy. > >The question is do I need to know what Jim is going to buy? If you say yes, >then economics can't predict. However, you should have said no. I don't >need to know what Jim is going to buy. Just, that he will be buying. >Indeed, you know that too - and you don't know Jim. > >Does the Supermarket need to know what Jim is going to buy. Of course not. >But because there is a demand for these things, they will stock them. Is >this prediction? > >This happens all over the economy in tens - maybe hundreds - of thousands >of stores. And there are millions of Jims buying in these places. > >Math doesn't come in to it - until someone decides it's important to find >how much ketchup is sold in these hundreds of thousands of stores? How much >ketchup is being produced? How much is imported at what prices? > >And so on - also perhaps how viscous of the ketchup. I just simply can't >resist this, Keith. There is a man in Washington whose job is to test the >viscosity of ketchup. > >He has a little gadget which turns over the ketchup bottle so it drips on >to an inclined board. He then times how long it takes to ooze down the >board. It costs the American tax payer a paltry $84,000 a year. I've seen >the apparatus - and the man. I have a feeling he gets home early each night. > >Heck, maybe we should also determine the viscosity most liked by all the >Jims. (No doubt in the EEC they would then standardize ketchup at the >preferred viscosity.) > >Anyway, we finish up with masses of data to help us conclude the economy is >complicated. > >Freewill and perversity are part of the makeup of people. As such it will >affect their exertion in which we are theoretically interested. >Practically, as exertion is a manifest characteristic, we could see their >effect. > >I suppose that the neo-Classicists would have trouble introducing equations >to cover freewill and perversity - but that's their problem, not mine. > >Harry ---------------------------------------------------------------------------- ------------ Keith Hudson, General Editor, Handlo Music, http://www.handlo.com 6 Upper Camden Place, Bath BA1 5HX, England Tel: +44 1225 312622; Fax: +44 1225 447727; mailto:[EMAIL PROTECTED] ________________________________________________________________________
