Curt Doolittle

Theme: Measurement

  • Why Doesn’t Philosophy Get Respect?

    Science consists of a network of externally testable hypotheses.Scientific statements are testable because the physical universe is internally consistent, and because of that consistency, subject to fixed categories that are reducible to numbers which can be manipulated by the process of ratios we call mathematics.

    As such, the physical universe is extremely simple compared to the conceptual universe. In the conceptual universe, the entire purpose of philosophy is to construct, reconstruct, and deconstruct plastic categories for the purpose of determining actions, so that we may establish cooperative norms, for human beings existing within that material universe consisting of pervasive but reducible material scarcity caused by the permanent scarcity of time. The purpose of thought its action, and the purpose of action is to outwit and therefore alter, the current course of events so that we may consume the difference within the time frames necessary to perpetuate our survival.

    Philosophy consists of a series of traditions which attempt to solve the conflict of our desire for perpetuating our norms — no matter how ludicrous they may be — while allowing us to adapt to changes in our material world. It took until Aristototle to develop reason as we understand it. We were infected by Persian and Abrahamic Mysticism, and only began to crawl out of it during the reformation and enlightenment. Philosophy undermined theology as the middle class undermined the landed aristocracy. Darwin cut both the magian tradition as well as the rules that our norms were based upon. Most philosophy is not testable. Much of it is terribly bad. Too much of it ignores the data from the physical sciences. Most remains introspective as a means of avoiding the data from the physical sciences. Although, the analytic program has in some reductio way, attempted to solve the problem of making testable statements, and incorporating data from the physical sciences, the discipilne was infected by pervasive religious derivatives and attempted to solve the metaphyisical problem as a way of regaining its prestige lost to the hard sciences. Philosophy struggled to remain relevant. The post analytics finally abandoned mysticism altogether. Some post analytical philosophers call their discipline “Post Philosophy” to openly and finally fully abandon philosophy’s magian ancestry. Meanwhile the sociologists and the economists tried to solve most of the problems of the social sciences through positivism but failed. And both the philosophers and the mystics have continued to fail — because we still hold our desperately to our agrarian norms and categories.

    Philosophy today is a form of fitness that allows one to not fall prey to the limited methodology of another technical discipline. As a discipline itself it has failed to solve the material problems of creating an internally consistent set of categories and relations that will assist us in the development of new norms without at the same time perishing because of our hubris. One cannot study economics, history, sociology, politics and philosophy as an integrated program. One must either choose an empirical course of study, or choose a narrative course of study. Until philosophy unites these fields, it will remain irrelevant. And synthesis is what we need of it.

    There is still room for philosophy precisely because all the disciplines have failed to produce a conceptual framework for adapting to modernity. But philosophy is as much a prisoner of its traditions as it benefits from them. And academic philosophy, mired in the error of the analytic program’s pursuit of the metaphysical problem has been, and simply perpetuates an error that renders the discipline ineffective and deprives society of answers to pressing problems of anonymity and insensitivity created by a division of knowledge and labor that yields an inverse relationship between material comforts and psychological comforts.

    Mankind suffers for their folly.

  • Why Doesn’t Philosophy Get Respect?

    Science consists of a network of externally testable hypotheses.Scientific statements are testable because the physical universe is internally consistent, and because of that consistency, subject to fixed categories that are reducible to numbers which can be manipulated by the process of ratios we call mathematics.

    As such, the physical universe is extremely simple compared to the conceptual universe. In the conceptual universe, the entire purpose of philosophy is to construct, reconstruct, and deconstruct plastic categories for the purpose of determining actions, so that we may establish cooperative norms, for human beings existing within that material universe consisting of pervasive but reducible material scarcity caused by the permanent scarcity of time. The purpose of thought its action, and the purpose of action is to outwit and therefore alter, the current course of events so that we may consume the difference within the time frames necessary to perpetuate our survival.

    Philosophy consists of a series of traditions which attempt to solve the conflict of our desire for perpetuating our norms — no matter how ludicrous they may be — while allowing us to adapt to changes in our material world. It took until Aristototle to develop reason as we understand it. We were infected by Persian and Abrahamic Mysticism, and only began to crawl out of it during the reformation and enlightenment. Philosophy undermined theology as the middle class undermined the landed aristocracy. Darwin cut both the magian tradition as well as the rules that our norms were based upon. Most philosophy is not testable. Much of it is terribly bad. Too much of it ignores the data from the physical sciences. Most remains introspective as a means of avoiding the data from the physical sciences. Although, the analytic program has in some reductio way, attempted to solve the problem of making testable statements, and incorporating data from the physical sciences, the discipilne was infected by pervasive religious derivatives and attempted to solve the metaphyisical problem as a way of regaining its prestige lost to the hard sciences. Philosophy struggled to remain relevant. The post analytics finally abandoned mysticism altogether. Some post analytical philosophers call their discipline “Post Philosophy” to openly and finally fully abandon philosophy’s magian ancestry. Meanwhile the sociologists and the economists tried to solve most of the problems of the social sciences through positivism but failed. And both the philosophers and the mystics have continued to fail — because we still hold our desperately to our agrarian norms and categories.

    Philosophy today is a form of fitness that allows one to not fall prey to the limited methodology of another technical discipline. As a discipline itself it has failed to solve the material problems of creating an internally consistent set of categories and relations that will assist us in the development of new norms without at the same time perishing because of our hubris. One cannot study economics, history, sociology, politics and philosophy as an integrated program. One must either choose an empirical course of study, or choose a narrative course of study. Until philosophy unites these fields, it will remain irrelevant. And synthesis is what we need of it.

    There is still room for philosophy precisely because all the disciplines have failed to produce a conceptual framework for adapting to modernity. But philosophy is as much a prisoner of its traditions as it benefits from them. And academic philosophy, mired in the error of the analytic program’s pursuit of the metaphysical problem has been, and simply perpetuates an error that renders the discipline ineffective and deprives society of answers to pressing problems of anonymity and insensitivity created by a division of knowledge and labor that yields an inverse relationship between material comforts and psychological comforts.

    Mankind suffers for their folly.

  • Why Can’t Progressives Learn? They Don’t Learn From “Fables”. And They Think Numbers Convey Objective Meaning.

    via This is Really Why the Economy Is Looking Up(Snarky) « Modeled Behavior.

    I remember some folks telling me that the Lehman bankruptcy would be no biggie. [Whaaaat? “That’s how capitalism works!”], they said.

    Seems they are right. You declare bankruptcy and badabing-badaboom a little over three years later everything is cleared up. Easy peasy.

    From CNBC

    One-time financial powerhouse Lehman Brothers emerged from bankruptcy on Tuesday and is now a liquidating company whose main business in the coming years will be paying back its creditors and investors.

    Lehman, whose September 2008 collapse is often regarded as the height of the financial crisis, will start distributing what it expects to be a total of about $65 billion to creditors on April 17, it said in a statement.

    That first group of payments to creditors, many of whom lost money in its collapse 3-1/2 years ago, will be at least $10 billion, Lehman has said previously.

    The move is a legal milestone, but does not indicate the immediate end of Lehman Brothers.

    We always said that after the storm had passed the seas would be calm, and here you go.

    [callout]A CONCEPTUAL GEM: …the knowledge necessary to estimate the risk in any investment is not reducible to numbers that are semantically portable between individuals and therefore not convertible to commodities.[/callout]

    But this *IS* how capitalism works. That organization will be gutted and torn apart and investors who supported their behavior will be punished. That we have created an institutional framework for the distribution of liquidity that cannot tolerate human failure is a comment about our foolhardiness in governance. The solution to banking is the Swiss method: if you invest in it you own it, since the knowledge necessary to estimate the risk in any investment is not reducible to numbers that are semantically portable between individuals and therefore not convertible to commodities. That strategy would lead to lower interests rates and near zero consumer interest rates. Of course, this would throw havoc into your innovations on the ISMP curve, but it would require we spend and provide liquidity differently than we recommend now. It’s the answer you know. Not MMT. Numbers are a knowledge problem. And yes, the purpose of the system is to teach us fables. You’re just a prisoner of your method, and the inherent assumption that smart people can solve complex problems. And that’s a convenient illusion. (This last bit is a reflection of one of his earlier posts that openly states that economic failure is not informative nor do we learn from it. Really. That’s his position. Really. I know. It’s crazy.)

  • Why Can’t Progressives Learn? They Don’t Learn From “Fables”. And They Think Numbers Convey Objective Meaning.

    via This is Really Why the Economy Is Looking Up(Snarky) « Modeled Behavior.

    I remember some folks telling me that the Lehman bankruptcy would be no biggie. [Whaaaat? “That’s how capitalism works!”], they said.

    Seems they are right. You declare bankruptcy and badabing-badaboom a little over three years later everything is cleared up. Easy peasy.

    From CNBC

    One-time financial powerhouse Lehman Brothers emerged from bankruptcy on Tuesday and is now a liquidating company whose main business in the coming years will be paying back its creditors and investors.

    Lehman, whose September 2008 collapse is often regarded as the height of the financial crisis, will start distributing what it expects to be a total of about $65 billion to creditors on April 17, it said in a statement.

    That first group of payments to creditors, many of whom lost money in its collapse 3-1/2 years ago, will be at least $10 billion, Lehman has said previously.

    The move is a legal milestone, but does not indicate the immediate end of Lehman Brothers.

    We always said that after the storm had passed the seas would be calm, and here you go.

    [callout]A CONCEPTUAL GEM: …the knowledge necessary to estimate the risk in any investment is not reducible to numbers that are semantically portable between individuals and therefore not convertible to commodities.[/callout]

    But this *IS* how capitalism works. That organization will be gutted and torn apart and investors who supported their behavior will be punished. That we have created an institutional framework for the distribution of liquidity that cannot tolerate human failure is a comment about our foolhardiness in governance. The solution to banking is the Swiss method: if you invest in it you own it, since the knowledge necessary to estimate the risk in any investment is not reducible to numbers that are semantically portable between individuals and therefore not convertible to commodities. That strategy would lead to lower interests rates and near zero consumer interest rates. Of course, this would throw havoc into your innovations on the ISMP curve, but it would require we spend and provide liquidity differently than we recommend now. It’s the answer you know. Not MMT. Numbers are a knowledge problem. And yes, the purpose of the system is to teach us fables. You’re just a prisoner of your method, and the inherent assumption that smart people can solve complex problems. And that’s a convenient illusion. (This last bit is a reflection of one of his earlier posts that openly states that economic failure is not informative nor do we learn from it. Really. That’s his position. Really. I know. It’s crazy.)

  • Fables convey meaning, and numbers don’t. Prices reflect only moments. And progr

    http://www.capitalismv3.com/2012/03/07/this-is-really-why-the-economy-is-looking-upsnarky-modeled-behavior/Um. Fables convey meaning, and numbers don’t. Prices reflect only moments. And progressives don’t learn from history, nor do they understand the sterility of numbers. Why? FALSE CONSENSUS BIAS.

    Source date (UTC): 2012-03-07 10:54:00 UTC

  • DANGER OF EXCLUSIVITY IN ECONOMETRICS Economists, like all methodologists, extra

    http://economistsview.typepad.com/economistsview/2012/01/how-to-save-economics.htmlTHE DANGER OF EXCLUSIVITY IN ECONOMETRICS

    Economists, like all methodologists, extrapolate the conclusions they draw from their methods beyond the scope of their methods. (See Kahneman.)

    Psychologists place extraordinary emphasis on the meaning of emotional stimuli, rather than the outcomes that would be achieved by training emotions to favor more beneficial outcomes in the material world. Cognitive psychologists reverse this preference.

    Liberals extrapolate their bias for nesting and care-taking, and their preference for consensus, to the ability of humans to plan, and cooperate on the scale of a state or economy.

    We are all prisoners of our methods and biases, and our only the mastery of the methods of multiple fields of inquiry makes us critical enough of our abilities.

    The Austrians are largely correct in their analysis of micro, as well as the impact of modern macro. We do not really know if the various permutations of MMT will work or not. But it is abundantly clear that modern macro applies only to small homogenous societies. And in diverse heterogeneous societies, micro and social behaviors are more influential than the power of monetary and fiscal policy to compete with.

    Humans act consistently over time. Humas vary greatly. And the less on of the greeks, and the mandate in western aristocratic tradition, is the ever present and inescapable frailty of human reasoning, and the consequential warning against human hubris, the only solution to which is competition and the balance of power demonstrated by commercial and military success.

    In other words – actions are scientific and theories are not.

    Source date (UTC): 2012-01-25 11:48:00 UTC

  • WORTH READING: DEFINE ‘RICH’. What is rich? Is ‘Rich’ something we can define or

    WORTH READING: DEFINE ‘RICH’.

    What is rich? Is ‘Rich’ something we can define or calculate? And how much can we tax them?

    It is certainly possible to calculate who is ‘rich’. The goal of every individual is to exit the market. Whether that individual studies hard to get a good (protected) job in big company, or works for the government which by definition is extra-market (and protected), or seeks a (protected) union job, or whether that person does none of that rent-seeking, and instead, exits the market through saving or investment.

    “Rich” means ‘exiting the market’. To exit the market one needs roughly on hundred times the median income, or about 4.5-5M today. It used to be that a million dollars meant something meaningful, but it doesn’t. You can easily burn through it if you’re the kind of person that can make it in the first place.

    Rich is a balance sheet calculation, not an income calculation. If a person’s balance sheet exceeds about one hundred times the median income (which is by definition, the 1%) then realistically, it doesn’t matter how much of their income you tax.

    I suspect that the various means of calculating maximum utility taxation is closer to 60 or 65% based upon what I can find.

    But if you tax the income of a small business person who is trying to exit the market, then we certainly have the right to wipe out social security, wipe out pension programs, fire federal workers and wipe out their savings. Because unless those assets are counted, the definition of ‘rich’ is asymmetrically used to punish people who participate in the market.

    Source date (UTC): 2011-12-13 20:38:00 UTC

  • Can We Predict Bubbles? And Don’t We Really Want Them?

    Predicting Bubbles on Modeled Behavior: I think we can see and measure booms and bubbles. I just think we’re lying to ourselves when we say we want to stop them. We WANT people to live beyond their equilibrial (‘natural’) value to the world market. Bubbles and credit help us do that. If predicting bubbles meant that the class structure would become even more rigid (it would) then would you want to eliminate bubbles? Or would you simply try to allow them to pop earlier? We can predict bubbles. Because they’re easy to predict. A bubble occurs whenever people seek to sieze opportunities in a domain in which they have no expertise. ie: when they are gambling on momentum – swarming. You cannot necessarily deduce a bubble from the trading data as other than some vague heuristic driven by price volatility. But if you survey consumers you can deduce bubbles all the time. If members of the lower middle class, and upper proletariat are speculating then it’s a bubble. If people outside a field are rallying to create speculative gains rather than PRODUCTIVE gains, then it’s a bubble. (PRODUCTIVE meaning that they applied additional capital to the thing that they purchased, prior to reselling it.) There is always value created by speculators who identify asymmetry of information and profit from informing others of that asymmetry. There is no value created by speculators who are swarming information that they do not understand, and where capital is not applied to transform the asset they wish to resell — in effect, where speculators are distorting information in the pricing system. (Ethically, this means liquidity encourages fraud.) If we are borrowing to create productive increases so that people can live a higher standard of living now than they could in the future if they had the ability to use current knowledge to create current production, then it’s good spending. If we are providing liquidity because of a shortage of ‘money’ (money in the broader sense) then we are helping people to create the highest level of productivity possible. If we are borrowing to to increase consumption without increasing relative production (exports) somewhere else in the economy, then we are not creating productivity and spreading it around, we are just going into debt by consuming now despite not increasing productivity — i.e. the ability to pay it back. A bubble is a knowledge problem caused by the failure of the pricing system to convey accurate information to participants in the economy. Cheap GENERAL credit allows average consumers to swarm opportunities. Productivity matters. The inter-temporality of consumption vs production matters. And disconnecting consumption from productivity causes booms and busts. So, again, maybe we (you) actually want our booms and busts if it gives people the ability to consume during booms that would never be able to consume goods above their economic class otherwise? But targeting inflation or nominal GDP is too loose a tool for accomplishing policy goals unless the country is small and relatively homogenous.

  • Karl Smith says that a government with it’s own currency can never be insolvent.

    Karl Smith says that a government with it’s own currency can never be insolvent. But this is not true. There is a very practical point whereupon the rate of inflation makes planning and coordinating production impossible because prices along the production cycle are no longer calculable. At that point production rapidly crashes, consumption rapidly crashes, people ‘forget’ skills and relationships that make businesses cooperate. They abandon social conventions and mores. They develop black markets for goods and social status. The tax base crashes. And public order fails. To the modern macro economists this is an absurd and impossible probability. To Austrians it is a deterministic and logical consequence of monetary policy.

    Source date (UTC): 2011-11-05 07:02:00 UTC

  • Numbers in financial statements are a record of your decisions, not a predictor

    Numbers in financial statements are a record of your decisions, not a predictor of the future. They don’t predict your business. They predict your behavior. They are predictive to the extent that the quality of your decisions tends to decline if your business changes, tends to remain constant if your business remains constant, and tends to improve if your decisions improve. And the only way to demonstrate that your decision have improved is if your goods and services remain competitive in the market, and profit results from their sale. So, the numbers are a record of decisions. Look to your decisions for insight, not the numbers.

    Why it is that numbers are so addictive to so many people that they inverse the causal relations, and seek insight in the numbers rather than the market is beyond me. I suspect it’s because it’s easier to rely on the false promise of certainty in those numbers, for some, and for others, that their reliance on those numbers allows us to evade the political confrontation that comes from the conflict between the battle for ideas and the organization necessary to execute them, and the constraint on collective resources where everyone in the organization seeks to use them for their own ambitions or fulfillment.

    This is why organizations decline over time: In the organizational battle, the number-certainty-addicts, and rent-seekers win over the customer and market reflectors because of the difference in effort and risk between the two factions.

    The CEO’s problem is to choose whether he will be part of the false-number coalition – a rent-seeker, part of the customer and market coalition – an innovator, or an arbiter between the two – an administrator. And from that decision all other decisions follow.

    Source date (UTC): 2011-10-05 09:02:00 UTC