Lost Opportunities Due To Competition Are Taxes We Pay For the Information Provided by failure or success, that tells us we have or have not made good use of the world’s resources for the satisfaction of others first, in order to satisfy ourselves second.
Source date (UTC): 2015-06-05 07:05:00 UTC
The (High) Cost of Eliminating Pseudoscience in Economics. http://www.propertarianism.com/2015/06/04/the-cost-of-eliminating-pseudoscience-in-economics #mathiness @paulromer
Source date (UTC): 2015-06-04 10:24:55 UTC
Original post: https://twitter.com/i/web/status/606406267041640448
(Please tolerate the long post. Some ideas are not reducible to pithy wit.) (1000 words) (important piece)
RE: https://growthecon.wordpress.com/2015/05/29/more-on-mathiness/
[I]f a statement in economics cannot be reduced to a sequence of subjectively testable rational operations, then it cannot be true – it is not existentially possible. If a statement in economics can be reduce to a sequence of subjectively testable rational operations, then whether it is true or not is still open to question. The philosophical problem (epistemic truth) of correcting pseudoscience (of which mathiness is a subset) in the field of economics is not something that is going to easily be solved by economists, who tend to be good at neither advanced mathematics, nor the ethics of science, nor at the principle problem of truth. And this is a serious problem. Because, of all the disciplines save psychology, economics is the **most subject** to pseudoscience: the failure to eliminate imagination, bias, error and deceit. And we have the greatest incentive to insert imagination, error, bias, and deceit. And among all the scientific disciplines, the social sciences have been the most subject to pseudoscience other than perhaps philosophy itself (which in truth is objectively a social science). We have not yet developed the warranty that the hard sciences have developed, or that psychologists have developed. And this is in no small part because in economics, the warranty that we must give is much broader, and places a much higher burden on authors, because the scope of our statements is much broader in influence than that of our peers in other fields. [D]ue Diligence Necessary For the Warranty of Truthfulness: 1) Have we achieved identity? Is it categorically consistent? 2) Is it internally consistent? Is it logical? Can we construct a proof(test) of internal consistency? 3) Is it externally correspondent, and sufficiently parsimonious? Can we construct a proof (test) of external correspondence. 4) Is it existentially possible? Is it operationally articulated? Can we construct a proof (test) of existential possibility? 5) Is it fully accounted? Do we account for all costs to all capital in all temporal and inter-temporal dimensions? (Have we avoided selection bias?) Can we construct a proof (test) of full accounting? 6) Is it morally constrained? Does it violate the incentive to cooperate? (Meaning, are all operations productive, fully informed, warrantied, voluntary transfers, free of negative externality of the same criterion?) If you cannot answer these questions or do not understand them you cannot know if you speak the truth, or if you are polluting the commons with fantasy, bias, error, or deception. Why is it that the informational commons, and by consequence the political and normative commons, are not – in an age of information – as subject to warranty and liability as pollution (“Abusus”) to physical commons, life, body, and private property? Truthfulness – testimony that has been subject to due diligence – is a non trivial cost. And economists are too happy (as it appears all social scientists have been) to produce defective products for personal gains, without the warranty that all other products have been subject to. Why is it that free speech is not limited to free truthful speech? After all, the cost of producing truthful scientific testimony under due diligence and warranty is much higher than the cost of producing untruthful pseudoscientific testimony without due diligence or warranty. Doesn’t mere free speech without warranty of due diligence of truthfulness construct an impossibility under which the production of high cost truth and the production of low cost fantasy, bias, error and deceit must eventually win? There is a great difference between the terms “empirical” (observable and measurable) and “scientific” of which empirical criticism is but a minor subset of the criterion necessary for the production of warranty of due diligence against fantasy,bias, error, and deceit. We have had a century of economists running with intellectual scissors, causing inter-temporal externalities of profound consequence. And the Cosmopolitan (freshwater) rationalist’s justification of priors is only more visible than the mainstream Anglo empirical (Saltwater), justification of priors under the pseudoscience of Rawlsian justificationism – itself a fascinating example of the logically impossible, yet pervasively persuasive. So just as all enlightenment adaptations were plagued with errors – anglo, french, german and jewish – both freshwater and saltwater economics are plagued with pseudoscience. The freshwater try to justify objective morality, by argumentative construction (pseudoscience), and the saltwater try to justify immorality by intentionally failing to account for profound normative, institutional, civilizational, and genetic consequences (pseudoscience). So it’s one thing for all of us to point the finger of the accusation of pseudoscience one place or another. But it is quite another to realize that the minute you draw the lens of truth upon either freshwater or saltwater economics, you will discover that both are pseudosciences that merely confirm ideological priors. This is probably the most important remaining problem in the philosophy of science. I set out to debunk the pseudoscience of libertarianism (cosmopolitan libertarianism, not anglo libertarianism) and to refute the postmoderns as masters of pseudoscience. And I did. But I did not set out to reform economics. And in truth, I have less interest in reforming economics and social science than I do in reforming law and politics – the sciences will merely follow incentives. But Paul Romer lit the kindling, and perhaps this is the time to solve the remaining problem of science. If we do it will be the most important reformation of thought since the enlightenment. Because our errors – our priors – are all errors of the enlightenment. And that is because the enlightenment was incomplete. We can complete it. But only if the utility of truth is more valuable than the utility of pseudoscience. And I am suspicious of that assumption. Curt Doolittle The Propertarian Institute Kiev, Ukraine. @paulromer #mathiness
(Please tolerate the long post. Some ideas are not reducible to pithy wit.) (1000 words) (important piece)
RE: https://growthecon.wordpress.com/2015/05/29/more-on-mathiness/
[I]f a statement in economics cannot be reduced to a sequence of subjectively testable rational operations, then it cannot be true – it is not existentially possible. If a statement in economics can be reduce to a sequence of subjectively testable rational operations, then whether it is true or not is still open to question. The philosophical problem (epistemic truth) of correcting pseudoscience (of which mathiness is a subset) in the field of economics is not something that is going to easily be solved by economists, who tend to be good at neither advanced mathematics, nor the ethics of science, nor at the principle problem of truth. And this is a serious problem. Because, of all the disciplines save psychology, economics is the **most subject** to pseudoscience: the failure to eliminate imagination, bias, error and deceit. And we have the greatest incentive to insert imagination, error, bias, and deceit. And among all the scientific disciplines, the social sciences have been the most subject to pseudoscience other than perhaps philosophy itself (which in truth is objectively a social science). We have not yet developed the warranty that the hard sciences have developed, or that psychologists have developed. And this is in no small part because in economics, the warranty that we must give is much broader, and places a much higher burden on authors, because the scope of our statements is much broader in influence than that of our peers in other fields. [D]ue Diligence Necessary For the Warranty of Truthfulness: 1) Have we achieved identity? Is it categorically consistent? 2) Is it internally consistent? Is it logical? Can we construct a proof(test) of internal consistency? 3) Is it externally correspondent, and sufficiently parsimonious? Can we construct a proof (test) of external correspondence. 4) Is it existentially possible? Is it operationally articulated? Can we construct a proof (test) of existential possibility? 5) Is it fully accounted? Do we account for all costs to all capital in all temporal and inter-temporal dimensions? (Have we avoided selection bias?) Can we construct a proof (test) of full accounting? 6) Is it morally constrained? Does it violate the incentive to cooperate? (Meaning, are all operations productive, fully informed, warrantied, voluntary transfers, free of negative externality of the same criterion?) If you cannot answer these questions or do not understand them you cannot know if you speak the truth, or if you are polluting the commons with fantasy, bias, error, or deception. Why is it that the informational commons, and by consequence the political and normative commons, are not – in an age of information – as subject to warranty and liability as pollution (“Abusus”) to physical commons, life, body, and private property? Truthfulness – testimony that has been subject to due diligence – is a non trivial cost. And economists are too happy (as it appears all social scientists have been) to produce defective products for personal gains, without the warranty that all other products have been subject to. Why is it that free speech is not limited to free truthful speech? After all, the cost of producing truthful scientific testimony under due diligence and warranty is much higher than the cost of producing untruthful pseudoscientific testimony without due diligence or warranty. Doesn’t mere free speech without warranty of due diligence of truthfulness construct an impossibility under which the production of high cost truth and the production of low cost fantasy, bias, error and deceit must eventually win? There is a great difference between the terms “empirical” (observable and measurable) and “scientific” of which empirical criticism is but a minor subset of the criterion necessary for the production of warranty of due diligence against fantasy,bias, error, and deceit. We have had a century of economists running with intellectual scissors, causing inter-temporal externalities of profound consequence. And the Cosmopolitan (freshwater) rationalist’s justification of priors is only more visible than the mainstream Anglo empirical (Saltwater), justification of priors under the pseudoscience of Rawlsian justificationism – itself a fascinating example of the logically impossible, yet pervasively persuasive. So just as all enlightenment adaptations were plagued with errors – anglo, french, german and jewish – both freshwater and saltwater economics are plagued with pseudoscience. The freshwater try to justify objective morality, by argumentative construction (pseudoscience), and the saltwater try to justify immorality by intentionally failing to account for profound normative, institutional, civilizational, and genetic consequences (pseudoscience). So it’s one thing for all of us to point the finger of the accusation of pseudoscience one place or another. But it is quite another to realize that the minute you draw the lens of truth upon either freshwater or saltwater economics, you will discover that both are pseudosciences that merely confirm ideological priors. This is probably the most important remaining problem in the philosophy of science. I set out to debunk the pseudoscience of libertarianism (cosmopolitan libertarianism, not anglo libertarianism) and to refute the postmoderns as masters of pseudoscience. And I did. But I did not set out to reform economics. And in truth, I have less interest in reforming economics and social science than I do in reforming law and politics – the sciences will merely follow incentives. But Paul Romer lit the kindling, and perhaps this is the time to solve the remaining problem of science. If we do it will be the most important reformation of thought since the enlightenment. Because our errors – our priors – are all errors of the enlightenment. And that is because the enlightenment was incomplete. We can complete it. But only if the utility of truth is more valuable than the utility of pseudoscience. And I am suspicious of that assumption. Curt Doolittle The Propertarian Institute Kiev, Ukraine. @paulromer #mathiness
https://growthecon.wordpress.com/2015/05/29/more-on-mathiness/THE COST OF ELIMINATING PSEUDOSCIENCE IN ECONOMICS
(profound)(read this)
https://growthecon.wordpress.com/2015/05/29/more-on-mathiness/
(Please tolerate the long post. Some ideas are not reducible to pithy wit.)
[I]f a statement in economics cannot be reduced to a sequence of subjectively testable rational operations, then it cannot be true – it is not existentially possible. If a statement in economics can be reduce to a sequence of subjectively testable rational operations, then whether it is true or not is still open to question.
The philosophical problem (epistemic truth) of correcting pseudoscience (of which mathiness is a subset) in the field of economics is not something that is going to easily be solved by economists, who tend to be good at neither advanced mathematics, nor the ethics of science, nor at the principle problem of truth.
And this is a serious problem. Because, of all the disciplines save psychology, economics is the **most subject** to pseudoscience: the failure to eliminate imagination, bias, error and deceit. And we have the greatest incentive to insert imagination, error, bias, and deceit.
And among all the scientific disciplines, the social sciences have been the most subject to pseudoscience other than perhaps philosophy itself (which in truth is objectively a social science).
We have not yet developed the warranty that the hard sciences have developed, or that psychologists have developed. And this is in no small part because in economics, the warranty that we must give is much broader, and places a much higher burden on authors, because the scope of our statements is much broader in influence than that of our peers in other fields.
[D]ue Diligence Necessary For the Warranty of Truthfulness:
1) Have we achieved identity? Is it categorically consistent?
2) Is it internally consistent? Is it logical? Can we construct a proof(test) of internal consistency?
3) Is it externally correspondent, and sufficiently parsimonious? Can we construct a proof (test) of external correspondence.
4) Is it existentially possible? Is it operationally articulated? Can we construct a proof (test) of existential possibility?
5) Is it fully accounted? Do we account for all costs to all capital in all temporal and inter-temporal dimensions? (Have we avoided selection bias?) Can we construct a proof (test) of full accounting?
6) Is it morally constrained? Does it violate the incentive to cooperate? (Meaning, are all operations productive, fully informed, warrantied, voluntary transfers, free of negative externality of the same criterion?)
If you cannot answer these questions or do not understand them you cannot know if you speak the truth, or if you are polluting the commons with fantasy, bias, error, or deception.
Why is it that the informational commons, and by consequence the political and normative commons, are not – in an age of information – as subject to warranty and liability as pollution (“Abusus”) to physical commons, life, body, and private property?
Truthfulness – testimony that has been subject to due diligence – is a non trivial cost. And economists are too happy (as it appears all social scientists have been) to produce defective products for personal gains, without the warranty that all other products have been subject to.
<strong><em>Why is it that free speech is not limited to free truthful speech? After all, the cost of producing truthful scientific testimony under due diligence and warranty is much higher than the cost of producing untruthful pseudoscientific testimony without due diligence or warranty. Doesn’t mere free speech without warranty of due diligence of truthfulness construct an impossibility under which the production of high cost truth and the production of low cost fantasy, bias, error and deceit must eventually win?</em></strong>
There is a great difference between the terms “empirical” (observable and measurable) and “scientific” of which empirical criticism is but a minor subset of the criterion necessary for the production of warranty of due diligence against fantasy,bias, error, and deceit.
We have had a century of economists running with intellectual scissors, causing inter-temporal externalities of profound consequence. And the Cosmopolitan (freshwater) rationalist’s justification of priors is only more visible than the mainstream Anglo empirical (Saltwater), justification of priors under the pseudoscience of Rawlsian justificationism – itself a fascinating example of the logically impossible, yet pervasively persuasive.
So just as all enlightenment adaptations were plagued with errors – anglo, french, german and jewish – both freshwater and saltwater economics are plagued with pseudoscience. The freshwater try to justify objective morality, by argumentative construction (pseudoscience), and the saltwater try to justify immorality by intentionally failing to account for profound normative, institutional, civilizational, and genetic consequences (pseudoscience).
So it’s one thing for all of us to point the finger of the accusation of pseudoscience one place or another. But it is quite another to realize that the minute you draw the lens of truth upon either freshwater or saltwater economics, you will discover that both are pseudosciences that merely confirm ideological priors.
This is probably the most important remaining problem in the philosophy of science.
I set out to debunk the pseudoscience of libertarianism (cosmopolitan libertarianism, not anglo libertarianism) and to refute the postmoderns as masters of pseudoscience. And I did. But I did not set out to reform economics. And in truth, I have less interest in reforming economics and social science than I do in reforming law and politics – the sciences will merely follow incentives.
But Paul Romer lit the kindling, and perhaps this is the time to solve the remaining problem of science. If we do it will be the most important reformation of thought since the enlightenment. Because our errors – our priors – are all errors of the enlightenment. And that is because the enlightenment was incomplete.
We can complete it.
But only if the utility of truth is more valuable than the utility of pseudoscience. And I am suspicious of that assumption.
Curt Doolittle
The Propertarian Institute
Kiev, Ukraine.
@paulromer #mathiness
Source date (UTC): 2015-06-04 06:11:00 UTC
Note to self: Intertemporal asymmetry of consumer knowledge
Source date (UTC): 2015-06-03 07:13:00 UTC
http://marginalrevolution.com/marginalrevolution/2015/05/urban-average-is-over.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+marginalrevolution%2Ffeed+%28Marginal+Revolution%29#sthash.SAqbQxyu.dpuf—“Nearly half of the biggest US metropolitan areas have yet to recoup all the lost jobs from the Great Recession and almost a third have failed to return to previous levels of output, according to analysis that underscores the fragmenting urban fortunes beneath the surface of America’s recovery.
Research on 100 urban areas from the Brookings think-tank, reveals an economic patchwork in which the legacy of boom and bust hangs heavily over cities in Florida and inland California, while at the other end of the spectrum, technology and bioscience-focused cities such as Austin, Texas, San Francisco, and Raleigh, North Carolina have comfortably surpassed their previous peaks.
“This may be the norm now — extreme variation,” said Mark Muro, policy director for the Metropolitan Policy Program at Washington-based Brookings.”—
What Florida and California have in common is average: they attract a large number of people with average education and skills, income, etc. What Austin, San Francisco, and Raleigh (and Charlottesville et al.) have in common is above average: they attract a large number of people with above average education and skills, income, etc
I think the point is that economic returns are being disproportionately returned to the above average categories – whether by people or city.
– See more at: http://marginalrevolution.com/marginalrevolution/2015/05/urban-average-is-over.html
Source date (UTC): 2015-05-30 15:09:00 UTC
PRIVILEGE (DISCOUNTS ON OPPORTUNITY COSTS) AS INFORMATION
—Hayek’s point about distributed knowledge applies to more than just economic issues. It also applies to social issues.—-
RE: http://ow.ly/Ln3uF
[W]hile, as I’ve written before, I agree with the general argument that women sense some things and men others (and progressives, libertarians and conservatives different things as well) I have a more complete theory of the inter-temporal division of perception, cognition, knowledge and labor (and one that eliminates equality, and monopoly decision making), there is a minor error in the logic of the first paragraph, and that is that it is irrelevant that we understand others – it is only relevant that we conduct exchanges with them.
Because their reaction to their senses are not accurate or ‘true’ in any meaningful sense other than as a reflection of the individual’s reproductive strategy – any more than any of the rest of our senses are all that accurate – they themselves are fragments.
This single insight is the principle cause of why democracy does not work, and the market does. The market allows us to cooperate on multitudinous means even if on disparate ends, with our successes and failures informing both us and others.
Whereas a monopoly government prevents us from learning anything of value, and the institutionalization of foolish policy by unexpriable law, and the accretion of bureaucratic self interests, prevents adaptation outside of catastrophic chains of failure.
In fact, monopoly government (monopoly production of commons by majority rule) promotes failure because it is precisely failed policy that permits the greatest rent seeking for all involved.
It is not that we should prohibit government (as Hayek warns) but that we should prohibit monopoly government. It is not that we should prevent taxation, it is that we should allocate our dividends from the commons we live in to the production of commons we prefer, and not to commons we do not.
As, furthermore, so called ‘privilege’ is precious information. It is information that informs you whose behavior you should imitate in order to gain discounts on opportunity costs. Privilege is as necessary to the human information system as is status, property rights, rule of law, money and interest.
Privilege, if it exists, is an inter-temporal store of value that informs others as to the behaviors that they should imitate in order to obtain a discount on opportunities. Manners and language are advertisements for one’s worthiness to engage in increasingly complex inter-temporal risks and returns.
Those who accumulate such behaviors obtain opportunity at the lowest discounts. Those that fail to adapt, and ask others to ’empathize’ with them, are seeking discounts without bearing the cost of adaptation.
In other words, they’re free riders participating in an act of fraud.
–“I don’t see how we can maximize our own exchanges in a given society if we don’t understand anyone in said society.”–
Of course.
I think you are caught up on a bit of language, and overlooking the epistemological argument I am making about the difference between seeking to impose a monopoly by law and justifying it, and seeking to develop many voluntary contracts while preventing theft.
We only learn the truth of anyone’s opinions by what they are willing to exchange. In other words, demonstrated preferences are truthful but articulated preferences are merely negotiating positions.
Understanding is a means of negotiating, not a means of establishing a monopoly definition of ‘good’ or ‘right’.
Source: Skye Stewart – “Hayek’s point about distributed knowledge applies…
PRIVILEGE (DISCOUNTS ON OPPORTUNITY COSTS) AS INFORMATION
—Hayek’s point about distributed knowledge applies to more than just economic issues. It also applies to social issues.—-
RE: http://ow.ly/Ln3uF
[W]hile, as I’ve written before, I agree with the general argument that women sense some things and men others (and progressives, libertarians and conservatives different things as well) I have a more complete theory of the inter-temporal division of perception, cognition, knowledge and labor (and one that eliminates equality, and monopoly decision making), there is a minor error in the logic of the first paragraph, and that is that it is irrelevant that we understand others – it is only relevant that we conduct exchanges with them.
Because their reaction to their senses are not accurate or ‘true’ in any meaningful sense other than as a reflection of the individual’s reproductive strategy – any more than any of the rest of our senses are all that accurate – they themselves are fragments.
This single insight is the principle cause of why democracy does not work, and the market does. The market allows us to cooperate on multitudinous means even if on disparate ends, with our successes and failures informing both us and others.
Whereas a monopoly government prevents us from learning anything of value, and the institutionalization of foolish policy by unexpriable law, and the accretion of bureaucratic self interests, prevents adaptation outside of catastrophic chains of failure.
In fact, monopoly government (monopoly production of commons by majority rule) promotes failure because it is precisely failed policy that permits the greatest rent seeking for all involved.
It is not that we should prohibit government (as Hayek warns) but that we should prohibit monopoly government. It is not that we should prevent taxation, it is that we should allocate our dividends from the commons we live in to the production of commons we prefer, and not to commons we do not.
As, furthermore, so called ‘privilege’ is precious information. It is information that informs you whose behavior you should imitate in order to gain discounts on opportunity costs. Privilege is as necessary to the human information system as is status, property rights, rule of law, money and interest.
Privilege, if it exists, is an inter-temporal store of value that informs others as to the behaviors that they should imitate in order to obtain a discount on opportunities. Manners and language are advertisements for one’s worthiness to engage in increasingly complex inter-temporal risks and returns.
Those who accumulate such behaviors obtain opportunity at the lowest discounts. Those that fail to adapt, and ask others to ’empathize’ with them, are seeking discounts without bearing the cost of adaptation.
In other words, they’re free riders participating in an act of fraud.
–“I don’t see how we can maximize our own exchanges in a given society if we don’t understand anyone in said society.”–
Of course.
I think you are caught up on a bit of language, and overlooking the epistemological argument I am making about the difference between seeking to impose a monopoly by law and justifying it, and seeking to develop many voluntary contracts while preventing theft.
We only learn the truth of anyone’s opinions by what they are willing to exchange. In other words, demonstrated preferences are truthful but articulated preferences are merely negotiating positions.
Understanding is a means of negotiating, not a means of establishing a monopoly definition of ‘good’ or ‘right’.
Source: Skye Stewart – “Hayek’s point about distributed knowledge applies…
http://blogs.wsj.com/economics/2015/05/27/u-s-pay-inequality-is-growing-more-between-firms-than-within-them-paper-says/?mod=blogmodWHY ARE SOME FIRMS PAYING EVERYONE MORE AND OTHERS NOT?
(it’s not complicated)
Source date (UTC): 2015-05-28 17:52:00 UTC