Re: How wonderful greed is
On 11/12/2012 6:55 PM, Russell Standish wrote: On Mon, Nov 12, 2012 at 07:11:40AM -0500, Roger Clough wrote: Hi Russell Standish Below you infer that economics is a rational activity. It isn't. it's close to a branch of psychology. You misconstrue me if you think this. Firstly, I'm not an economist, so my opinions on the subject don't count, but more importantly my opininion is that neo-classical economics is built as a house of cards on mathematical fallacies. See my friend Steve Keen's book "Debunking Economics" for a much better explanation. He is an economist, and was talking about the GFC several years before before it happened, and as a result is now being listened to! As far as the concept of perfect rational agent is concerned, it is a fiction - but worse than that - it is an inconsistent fiction, as my comments try to draw out. Of course people do not act as rational agents, my point is that they cannot even act approximately like rational agents either. But neo-classical economics is founded on the concept of rational agent as a corner stone, and as Steve points out, this one of many fallacies gracing the theories used by our national treasuries. As far as your last sentence goes (economics is close to a branch of psychology), yes of course. The problem is that psychology is a long way from being a hard, mathematical science. Hari Seldon is a long distant fantasy :). But economists have "physics envy", so they'd like to roll up their psychology problems into neat mathematical boxes like spherical cows, which they label rational. Trouble is, it doesn't work the way they've done it. Cheers Hear Hear! -- Onward! Stephen -- You received this message because you are subscribed to the Google Groups "Everything List" group. To post to this group, send email to everything-list@googlegroups.com. To unsubscribe from this group, send email to everything-list+unsubscr...@googlegroups.com. For more options, visit this group at http://groups.google.com/group/everything-list?hl=en.
Re: How wonderful greed is
On Mon, Nov 12, 2012 at 07:11:40AM -0500, Roger Clough wrote: > Hi Russell Standish > > Below you infer that economics is a rational activity. > It isn't. it's close to a branch of psychology. You misconstrue me if you think this. Firstly, I'm not an economist, so my opinions on the subject don't count, but more importantly my opininion is that neo-classical economics is built as a house of cards on mathematical fallacies. See my friend Steve Keen's book "Debunking Economics" for a much better explanation. He is an economist, and was talking about the GFC several years before before it happened, and as a result is now being listened to! As far as the concept of perfect rational agent is concerned, it is a fiction - but worse than that - it is an inconsistent fiction, as my comments try to draw out. Of course people do not act as rational agents, my point is that they cannot even act approximately like rational agents either. But neo-classical economics is founded on the concept of rational agent as a corner stone, and as Steve points out, this one of many fallacies gracing the theories used by our national treasuries. As far as your last sentence goes (economics is close to a branch of psychology), yes of course. The problem is that psychology is a long way from being a hard, mathematical science. Hari Seldon is a long distant fantasy :). But economists have "physics envy", so they'd like to roll up their psychology problems into neat mathematical boxes like spherical cows, which they label rational. Trouble is, it doesn't work the way they've done it. Cheers -- Prof Russell Standish Phone 0425 253119 (mobile) Principal, High Performance Coders Visiting Professor of Mathematics hpco...@hpcoders.com.au University of New South Wales http://www.hpcoders.com.au -- You received this message because you are subscribed to the Google Groups "Everything List" group. To post to this group, send email to everything-list@googlegroups.com. To unsubscribe from this group, send email to everything-list+unsubscr...@googlegroups.com. For more options, visit this group at http://groups.google.com/group/everything-list?hl=en.
How wonderful greed is
Hi Russell Standish Below you infer that economics is a rational activity. It isn't. it's close to a branch of psychology. Buying stocks, as Gordon Gekko said in "Wall Street", is usually based not merely on desire, but desire in the face of risk. Then Greed seems to be the best word in that case. Wall Street is not a welfare program, IT IS DRIVEN BY GREED. And conversely, selling stocks is based on fear that the stock is going to go down. So no rational or logical program will ever be a good stock customer. Roger Clough, rclo...@verizon.net 11/12/2012 "Forever is a long time, especially near the end." -Woody Allen - Receiving the following content - From: Russell Standish Receiver: everything-list Time: 2012-11-10, 18:56:41 Subject: Re: Where's the fixed identity in turing machines and comp ? On Sat, Nov 10, 2012 at 03:27:47PM -0800, meekerdb wrote: > > But the definition [of rationality] > seems overly restrictive. It's well known that > in competitive games the best strategy may random in some way. So I > don't see how you can arbitrarily rule out random choices as > 'irrational' when they are shown to be optimal by rational analysis. > > Brent Its not me doing the ruling out. Its the way the term is used in philosophy and economics. There are plenty of examples (such as the ones your refer to) where making random choices is optimal (according to a given utility). But here you have to go to meta-level to say its the choice to play randomly that is rational, not the choices themselves being rational. One can see there are situations where it is rational to be irrational. I sent you a reference to a paper of mine describing just such a sitation in the classic theory of the firm (``Emergent Effective Collusion in an Economy of Perfectly Rational Competitors''). A classic example where it is rational to be irrational is in chess where sometimes one might sacifice a queen in order to gain a competitive advantage. But if it is rational to be irrational, is it possible to be rational any more? -- Prof Russell Standish Phone 0425 253119 (mobile) Principal, High Performance Coders Visiting Professor of Mathematics hpco...@hpcoders.com.au University of New South Wales http://www.hpcoders.com.au -- You received this message because you are subscribed to the Google Groups "Everything List" group. To post to this group, send email to everything-list@googlegroups.com. To unsubscribe from this group, send email to everything-list+unsubscr...@googlegroups.com. For more options, visit this group at http://groups.google.com/group/everything-list?hl=en. -- You received this message because you are subscribed to the Google Groups "Everything List" group. To post to this group, send email to everything-list@googlegroups.com. To unsubscribe from this group, send email to everything-list+unsubscr...@googlegroups.com. For more options, visit this group at http://groups.google.com/group/everything-list?hl=en.
