Re: How wonderful greed is

2012-11-12 Thread Russell Standish
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


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Re: How wonderful greed is

2012-11-12 Thread Stephen P. King

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


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