Haha. I just wanted u guys to follow the link to the poop art. Someone asked what if, i supplied an answer.
In States a fresh law is looked upon as a remedy for evil. Instead of themselves altering what is bad, people begin by demanding a law to alter it. ... In short, a law everywhere and for everything!
~Peter Kropotkin
<<< I doubt they think about it this way but, if I understand the LTV'ers correctly, prices of goods should always be just slightly higher than the cost of employing someone to make it. Therefore prices cannot fall unless wages fall as well. Easily falsifiable and is dead wrong. >>>
And as statistics can explain you, you can still drown in a river that is on average only 50 cm deep.
I won't dare follow that link! lolol
Any how Rob, answer my questions. What determines use-value? And if I am producing a good, and I spend more labor hours into producing is it magically now worth more in the eyes of consumers?
<<<
I will start with the assumptions made in the article: 1. Humans are all the same and under the same stimulations will act in exactly the same manner. 2. Humans can be given exactly the same stimulations that mimic reality. 3. The sum of the parts, individual experiments, is equal to the whole. Neither of 1 or 2 are true. It is silly to think that two individuals much less millions would behave the same in the same situation like particles do. Then you have to also assume that you can break reality down into experiments that can be given to prove humans are the same when humans have wildly varying experiences. Then you have to prove 3 and that is not even true for physics itself. Organization matters especially in a living system. In my opinion without these assumptions the whole logic applied to economics breaks down. >>>
Doesn't make sense, we are not concerned here with individual behaviour, but with aggregates.
Rob, try addressing my post. Spend 10 minutes on it. Can you do that?
Rob:Doesn't make sense, we are not concerned here with individual behaviour, but with aggregates.
To the contrary Rob. We, at least here, are not concerned with aggregates, but with individuals. Economics is not the study of fictitious aggregates, but of human action.
<<< Sieben, I saw the same thing. That's an interesting paradox you pointed out. One other thing though. My question is, what determines the actual value, not the price, but value of goods. If it's labor then what, about labor, explains why I like the color blue more than pink? >>>
Why would the LTV be concerned with that? Why would your psycholigical preferences have anything to do with it?
I mean my original post. The long one with all the arguments.
<<< To the contrary Rob. We, at least here, are not concerned with aggregates, but with individuals. Economics is not the study of fictitious aggregates, but of human action. >>>
Macro economics definately is, your statement is non-sensical.
The study of human actions is studied by psychology and perhaps sociology, but definately not with macro-economics.
<<< Rob, try addressing my post. Spend 10 minutes on it. Can you do that? >>>
Hee, isn't that just a confirmation of the LTV, which you tried to deny, that just because you spent 10 minutes of your time in it, it must have value?
LOL
If you can type up a lengthy response in a nanosecond go for it.
Rob Heusdens:LOL
<<< Any how Rob, answer my questions. What determines use-value? And if I am producing a good, and I spend more labor hours into producing is it magically now worth more in the eyes of consumers? >>>
Use value: See http://en.wikipedia.org/wiki/Use_value
And if I am producing a good, and I spend more labor hours into producing is it magically now worth more in the eyes of consumers?
It not magic, and it depend wether or not also the use value increased. Just by being more lazy and taking more hours to produce something, obviously does not increase the value of a product. As you could figure out yourself.
Sieben wrote:
<<< Labor content...? I mean, we would expect that all goods that use unskilled labor would cost about the same in labor hours... If it takes a highschool dropout 1 hour to make a sandwich, but 2 hours to make a steak, ceteris parabis the steak will probably cost twice as much. We can make this prediction by assuming that labor is homogenous. But its heterogenous. And is not even the primary input in many goods. See diamonds... >>>
See my comment about value of land.
Rob Heusdens:If you look this up, you will find that Marx did discuss this issue of natural given commities, like land. Although land itself, at first, doesn't require labor (but in many cases this is not true, because mane parts of land have been cultivated throughout history, take for example Netherlands, most part of this land would have been sea if we did not convert it to land) there is still a price attached to it due to the fact that also land itself produces value, because you can grow crops on them.
You can address the rest of my post too instead of just picking out one paragraph.
<<< Ha ha. No. The entropy model of the universe begins by assuming quantum states are random. Even if people went around shaking magic 8 balls to make their decisions, their decisions are still purposeful. Only a truly illiterate economist would look at people walking through the streets as "random gas molecules". >>>
This comparison is ridiculous of course, and is not implied in the article. It does not equate human behaviour with that of molecules. It only tries to say something significant about macro-economic behaviour.
Rob Heusdens:It does not equate human behaviour with that of molecules. It only tries to say something significant about macro-economic behaviour.
<<< You can do cardinal math with like, positions... you can't do it when your parameters are subjective. There is no average level of how much everyone likes ice cream. >>>
Why do you think that is an issue here? We are not concernced with how much each person likes or dislikes a certain commodity, but only with observable objective behaviour, like ice cream production and consumption.
Rob:Use value: See http://en.wikipedia.org/wiki/Use_value And if I am producing a good, and I spend more labor hours into producing is it magically now worth more in the eyes of consumers? It not magic, and it depend wether or not also the use value increased. Just by being more lazy and taking more hours to produce something, obviously does not increase the value of a product. As you could figure out yourself.
Ahh so essentially it's just Subjective value theory, re-named and re-packaged to fit the Marxist ideology.
Rob:Hee, isn't that just a confirmation of the LTV, which you tried to deny, that just because you spent 10 minutes of your time in it, it must have value?
Um.. isn't he asking you to spend 10 minutes on it?
Rob:Macro economics definately is, your statement is non-sensical. The study of human actions is studied by psychology and perhaps sociology, but definately not with macro-economics.
My statement is nonesensical? Your telling me "economics", even "Macro" economics has nothing to do with individuals? Whats the point then?
Think about what your saying before you type and press post...
Rob, compile all of your responses in a single post. Stop spamming the boards and our email-inboxes.
Rob Heusdens:but only with observable objective behaviour, like ice cream production and consumption.
filc wrote:
<<< My statement is nonesensical? Your telling me "economics", even "Macro" economics has nothing to do with individuals? Whats the point then? >>>
That's right. Macro economics doesn't deal with individual behaviour. That is why it is called macro-economics.
Rob:That's right. Macro economics doesn't deal with individual behaviour. That is why it is called macro-economics.
Priceless.
Rob, macroeconomics needs to be consistent with microeconomic foundations. Most economists will tell you this.
<<< Which arises from individual preferences. You can't aggregate preferences. >>>
We don't aggregate preferences, just the objective observables.
<<< The overall market price is the result of supply and demand, not the summing up of everyone's ordinal utility. >>>
Correct.
<<< I don't believe that marx secretly knew about entropy. There doesn't even appear to be a link between the LTV and entropy. Entropy = random zomg so maybe the data doesn't fit but we fit the data and its a pretty good fit! >>>
It is not stated that Marx somehow knew about entropy, it is just stated that with the known laws of entropy applied to economy, Marx's LTV can be confirmed.
<<< Did you ever consider that only a few people are intelligent? >>>
Why would that be a consideration? I'm sure the distribution of intelligence also follows some statistical pattern. But again, what has this to do with the stamement, that - whetever the distribution of intelligence is - there is no connection between intelligence and wealth.
<<< Or that there might be MORE THAN ONE INPUT for once? >>>
More then one input for WHAT?
Rob:We don't aggregate preferences, just the objective observables.
Objective observables are preferences placed into action. And you still cannot place them in an aggregate and have anything coherent come out of it. You cannot place millions of objective observables into an easy to distinguish aggregate and still have any real representation of reality.
Rob:<<< The overall market price is the result of supply and demand, not the summing up of everyone's ordinal utility. >>> Correct.
Which effectively dissmiss's your notion about economics being disconnected from individual human action.
Rob, can you compile your responses into single posts instead of into 3-8 consecutive posts?
Rob Heusdens:whetever the distribution of intelligence is - there is no connection between intelligence and wealth.
Rob Heusdens:More then one input for WHAT?
Rob Heusdens: <<< 3. Of course, the assumption that the economic universe is like the atomic universe is a big mistake, as pointed out very often on this site. As an example: If we assume people in cars drive by the laws of statistical mechanics, then they will wind up evenly [or at least randomly] distributed along the face of the globe. And yet, on a day when there is a football game, there seems to be a big clustering of cars near the stadium. And on days when the stadium is closed, the cluster of cars disappears. Why is that? >>> So, you assume because the physics laws of thermodynamics require that the molecules of a gas get evenly distributed, right? Absent an outside force, yes. Then explain to me, why does the wind blow if that were the case? from Wikpedia: Wind is caused by differences in pressure. When a difference in pressure exists, the air is accelerated from higher to lower pressure. On a rotating planet the air will be deflected by the Coriolis effect, except exactly on the equator. Globally, the two major driving factors of large scale winds (the atmospheric circulation) are the differential heating between the equator and the poles (difference in absorption of solar energy leading to buoyancy forces) and the rotation of the planet. Outside the tropics and aloft from frictional effects of the surface, the large-scale winds tend to approach geostrophic balance. Near the Earth's surface, friction causes the wind to be slower than it would be otherwise. Surface friction also causes winds to blow more inward into low pressure areas.[1] So, the fact that the wind blows means that thermodynamic behaviour of gas in the atmosphere is not even correct? As wikipedia so eloquently explains, there are differences in pressure acting on the air molecules which makes them blow. But absent that, the molecules will randomly bang into each other, attracting and repelling [depending on their distance from one another], until they are evenly distributed. Now we can consider the desire of some people to go to the football game [as well as all the complicated reasons they have for doing what they do] as an "outside" force. This would mean that every single person is acted upon by a different outside force, which we cannot even discern, because we cannot read minds. Certainly thermodynamics and statistical mechanics do not dream of tackling such a problem. Or we can say [what amounts to the same thing] that the many "molecules" of people are all different from one another, each one unique. Here too, thermo and stat mechanics make no claim they can handle such a situation.
<<< 3. Of course, the assumption that the economic universe is like the atomic universe is a big mistake, as pointed out very often on this site. As an example: If we assume people in cars drive by the laws of statistical mechanics, then they will wind up evenly [or at least randomly] distributed along the face of the globe. And yet, on a day when there is a football game, there seems to be a big clustering of cars near the stadium. And on days when the stadium is closed, the cluster of cars disappears. Why is that? >>>
So, you assume because the physics laws of thermodynamics require that the molecules of a gas get evenly distributed, right?
Absent an outside force, yes.
Then explain to me, why does the wind blow if that were the case?
from Wikpedia: Wind is caused by differences in pressure. When a difference in pressure exists, the air is accelerated from higher to lower pressure. On a rotating planet the air will be deflected by the Coriolis effect, except exactly on the equator. Globally, the two major driving factors of large scale winds (the atmospheric circulation) are the differential heating between the equator and the poles (difference in absorption of solar energy leading to buoyancy forces) and the rotation of the planet. Outside the tropics and aloft from frictional effects of the surface, the large-scale winds tend to approach geostrophic balance. Near the Earth's surface, friction causes the wind to be slower than it would be otherwise. Surface friction also causes winds to blow more inward into low pressure areas.[1]
So, the fact that the wind blows means that thermodynamic behaviour of gas in the atmosphere is not even correct?
As wikipedia so eloquently explains, there are differences in pressure acting on the air molecules which makes them blow. But absent that, the molecules will randomly bang into each other, attracting and repelling [depending on their distance from one another], until they are evenly distributed.
Now we can consider the desire of some people to go to the football game [as well as all the complicated reasons they have for doing what they do] as an "outside" force. This would mean that every single person is acted upon by a different outside force, which we cannot even discern, because we cannot read minds. Certainly thermodynamics and statistical mechanics do not dream of tackling such a problem.
Or we can say [what amounts to the same thing] that the many "molecules" of people are all different from one another, each one unique. Here too, thermo and stat mechanics make no claim they can handle such a situation.
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It's easy to refute an argument if you first misrepresent it. William Keizer
@Smiling Dave
Yeah, so to be short, as in the thermodynamic cases of gas molecules in the atmosphere and in the case of people's behaviour, there are (outside) forces at work that determine the outcome.
Nothing new, I would say.
But then in neither cases this dismisses the thermodunamic behaviour of the system.
Given Robert's claims about the Labour markets having rates of profit Boltzmann distributions, I decided to have a gander at Laws of Chaos. My skepticism was punctuated by the fact that I already know from what little reading I have done of information theory that the data of distributions concerning phenomena resutant from human action, e.g. likelihood of letters appearing in written english tend not to be equiprobabilistic, and thereby not resulting in producing binomial distributions, or Gaussian distributions in the case of continuous data sets(never mind having miraculously found Boltzmann distributions in economic data) .
For critical analysis of these claims, I recommend other posters on this thread to view Chapter 8, as there the authors outline the empirical justifications to the claims they've made. The authors make a very neat, and of course inevitable dodge on pg 173:
It can be seen that the various rates of profit achieved by different firms are quite widely dispersed over a range from no profit (0%) to around 40% and beyond. We have ignored the small amount of capital that made losses before tax and interest.
This is a deliciously mendacious and myopic way to ignore the rate of loss and business failure, which is certainly statistically significant, even if one does ignore startup failure. The latter is of course due to the fact that most startups fail precisely due to their inabillity to properly cater for consumer demand both on the sales and costs angle(thereby preventing too many resources being diverted from productive employment as ascertained through the purchasing decisions of other producers in the economy). The same could be said of failing big business.
From reading the above sentence however, and the data that follows in the sections that follow (Which I'm assuming good faith in), one could be tempted into adopting the incorrect hypothesis that failure rates for big business, leaving aside government intervention, would be quite low. However, since capital is conceived as what Austrians perceive as "financial capital" one can immediately reveal the circularity implied in this reasoning. The market value, or capital contained in them is precisely determined by both their present and anticipated rate of return. Hence even large failures would get neatly and obliquely eliminated from their statistical analysis. This is of course also important for considering the significance for the economy of startup business losses. No doubt if the authors learned of the extent of such horrors and ineffciencies it would be enough to convert them from marxists to extreme left wing social democrats.
Somewhat related to this, the data significantly lacks a time element, as for instance with the charts of rate of profit for British non-oil manufacturing industry in 1972 and 1981. Although it would probably break their holier than thou only analyse macro procedure, if they actually began with the data at 1972 and at least matched specific firms to specific profits(perhaps with different colured stripes), they would be able to observe the changing composition of the "capital" in the economy as a necessary consequence of the profit-loss system and their ability to satisfy subjective value. I won't take a gulp, but it might even allow them to see how subjectivism could be stretched beyond "use value", to actually explaining and determining imputation of capital goods, land and labour.
Other than that, I welcome others to continue along these lines analysing the book and this chapter. A fair portion of the rest of it probably has some use in providing a pedantic and somewhat dry way to teach Sophomore Statistical Physics, though the appendix on Probability theory is appreciable, if a little thin.
P.S. In some fairness to the authors of Laws of Chaos, they don't make the crankish claim of the OP to have discovered Boltzmann distributions in any of this data. They assert a Gamma distribution with regard to rate of profit, and a Gaussian with regard to specific price. Needless to say, just looking at the graphs on pg 175, even ignoring the problems I've pointed out regarding the composition of the data they rely on, the former claim is ludicrous. That is the worst Gaussian fit I've ever seen(admittedly this does possibly reveal my lack of reading in quantitative "empirical" economics).
"When the King is far the people are happy." Chinese proverb
For Alexander Zinoviev and the free market there is a shared delight:
"Where there are problems there is life."
filc:
<<< Which effectively dissmiss's your notion about economics being disconnected from individual human action. >>>
It does not disconnect economics from indivual behaviour as neither the thermodynamic behaviour of a gas is disconnected from the behaviour of individual molecules.
Why is this thread still alive??!?? It's pure gobbledy-gook, it doesn't deserve any more airtime than any of the other Venus Project-esque nonsense!
</thread> </thread> </thread>
Clayton -
Perhaps I'm masochistic, but I've enjoyed it.
Rob Heusdens: <<< The laws of thermodynamics assume the molecules do not have free will. The laws do not apply to humans. I mean, really. >>> But as physics and confirmed by neuro-psychology, will explain to you, there isn't something like free-will. I mean, really.
<<< The laws of thermodynamics assume the molecules do not have free will. The laws do not apply to humans. I mean, really. >>>
But as physics and confirmed by neuro-psychology, will explain to you, there isn't something like free-will. I mean, really.
So the whole history of mankind is predetermined to the end of time. No point in arguingabout anything then, hey?
Smiling Dave wrote:
<<< So the whole history of mankind is predetermined to the end of time. No point in arguingabout anything then, hey? >>>
That's your conclusion, not mine.
As long as we can by no means determine the outcomes of things with sufficient accuracy, there isn't any real difference either.
Rob Heusdens: @Smiling Dave Yeah, so to be short, as in the thermodynamic cases of gas molecules in the atmosphere and in the case of people's behaviour, there are (outside) forces at work that determine the outcome. Nothing new, I would say. But then in neither cases this dismisses the thermodunamic behaviour of the system.
From Wikipedia:
In science, thermodynamics (from the Greek θέρμη therme, meaning "heat"[2] and δύναμις, dynamis, meaning force) is the study of energy conversion between heat and mechanical work, and subsequently the macroscopic variables such as temperature, volume and pressure. The first to give a concise definition of the subject was Scottish physicist William Thomson who in 1854 stated that:[3]
Two derivatives of thermodynamics to emerge in the decades to follow include: statistical thermodynamics (or statistical mechanics) (1860), a subject concerned with statistical predictions of the collective motion of particles from their microscopic behavior, and chemical thermodynamics (1873), a subject concerned with the nature of the role of entropy in the process of chemical reaction.[4][5][6] Historically, thermodynamics developed out of a need to increase the efficiency of early steam engines, particularly through the work of French physicist Nicolas Léonard Sadi Carnot (1824) who believed that engine efficiency was the key that could help France win the Napoleonic Wars.[7]
So that thermodynamics is totally irrelevant. We are not studying heat and mechanical energy.
As for statistical mechanics, here's a line from Wikipedia: The essential problem in statistical thermodynamics is to determine the distribution of a given amount of energy E over N identical systems.[3]
The key word here is IDENTICAL. You will never see any discussion in statistical mechanics which subjects every single little particle to a different outside force. It approacheth the absurd to even try to make such a claim. Read up on this if you will. Become enlightened, my son.
So there is a third possibility I am unaware of. I thought the only two are:
1. We have some degree of free will.
2. We don't.
And a consequence of assuming 2 is that something else makes us do what we do, other than our free will. Meaning what we do is predetermined. Please open my eyes about this.
Your last sentence seems to be saying "We don't really know what will happen. Of course nothing on Heaven and Earth can possibly change what will happen, including our own feeble attempts, which are predetermined anyway. We are but flailing blindly trying to change the unchangeable, And yet there is is no "real difference" between what we are doing and someone who has actual control over the situation who does something about it.
To bring this point out fully, imagine 2 cars zooming down the road. One has a working steering wheel, with a driver with open eyes. One has a broken steering wheel, and a driver with open eyes who cannot change the movement of the car, since the wheel is broken. So you suggest the driver put on a blindfold, so that he won't know where the car is headed, and now the steering wheel will work. I dunno. Seems flawed to me somehow.
But even if we accept such a mad proposition, you have painted thyself into a corner. Because you admit we that we can assume we humnas have free will, and those little molecules don't. So that thermo and stat mech cannot possibly be applied to us.
onebornfree:In short, the laws of physics and physical sciences are simply not appropriate, nor applicable, for analyzing human actions- useless, in fact.
Correction: what I should have said is :"in short, the analytical methods used in the fields of physics and physical sciences are simply not appropriate, nor applicable, for analyzing human actions- useless, in fact."
Apologies.
Regards, onebornfree
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