Economics Questions

Re: "Mainstream" Economics.

Coase — Thu, 26 Aug 2010 22:21:24 GMT

To save me the trouble, if you really want the answer go read this.

Re: "Mainstream" Economics.

EconomistInTraining — Thu, 26 Aug 2010 17:47:17 GMT

That's what they all say. Based on your name alone your posts are 100% predictable, always trying spin your own act like a vacuum cleaner salesman. I've heard it all before. The guy who claimed he had discovered time travel fed the same lines. I'm a man of results, not promises.

Clearly my posts are so predictable you don't bother reading before you answer. Look, I think it would be minimally respectful if you could answer my posts or just admit that you're not in the mood to debate this. To make it personal as an answer its really quite intellectually dishonest.

Markets do provide research. The positive externalities of reasearch cannot be captured without hiring scientists to do research. If you invent a better airplane, I certainly can't copy you. I don't know nearly enough physics to even try. I need to hire scientists to capture those benefits, and in order to keep them happy and their skills sharp, I need to pay for them to do research (and I certainly won't complain about anything nice they invent for me).

To the extent that private actors can capture the returns from private investment they largely do so by using intellectual property rights, which are provided by governments. You're right, however, that certain fields might be able to finance research privately, but the question is do they do the optimal amount of research and what areas is it focused it? I'd say the answer to the first one is and the answer to the second question is that it would be centred around practical research to the detriment of more theoretical research.

Re: "Mainstream" Economics.

Coase — Thu, 26 Aug 2010 04:11:36 GMT

EconomistInTraining,

Markets do provide research. The positive externalities of reasearch cannot be captured without hiring scientists to do research. If you invent a better airplane, I certainly can't copy you. I don't know nearly enough physics to even try. I need to hire scientists to capture those benefits, and in order to keep them happy and their skills sharp, I need to pay for them to do research (and I certainly won't complain about anything nice they invent for me).

Re: "Mainstream" Economics.

Laotzu del Zinn — Thu, 26 Aug 2010 04:03:55 GMT

you're a weird guy, Ace, a weird guy

Re: "Mainstream" Economics.

Caley McKibbin — Thu, 26 Aug 2010 03:32:32 GMT

That's what they all say. Based on your name alone your posts are 100% predictable, always trying spin your own act like a vacuum cleaner salesman. I've heard it all before. The guy who claimed he had discovered time travel fed the same lines. I'm a man of results, not promises.

Re: "Mainstream" Economics.

EconomistInTraining — Thu, 26 Aug 2010 01:09:35 GMT

Smart people don't dream of being teachers. It's the people who are left after the talented and competent do else that go into teaching. Subjects like economics don't even have any application outside of teaching. It's just a chain of propaganda. A bunch of people get paid (on someone else's back) to sit around and conjure any figment of the imagination that pleases them. 99% of people in every "discipline", to use an inaccurate word, are like the styrafoam filler in a box of wine glasses. It's the 1% that make all of progress. This is hyperbole, but you get the gist.

For better or for worse, the vast majority of professors at universities will not care about teaching. The majority of economists are universities are pursuing selfish goals of research. This isn't to say there aren't exceptions, and it's somewhat wrongheaded for you to imply that only idiots go into teaching. Plenty of exceedingly intelligent individuals go into teaching with the best of intentions, the opportunity cost being their research career.

Of course the market doesn't provide research, it couldn't. Asymmetric information, increasing marginal returns and positive externalities would all result in a severe suboptimality of results, this isn't to say that the current incentive system is perfect, just that we don't live in a first best world.

As for the disconnect between research and the real world, it's there and it'd be naive to deny it. But just like any other field, the more abstract theoretical work usually ends up being used in more practical applications which makes it more accurate and precise. And practical work has all sorts of policy implications.

Re: "Mainstream" Economics.

I. Ryan — Thu, 26 Aug 2010 00:16:45 GMT

I. Ryan:

I will try to explain what the foundation of studying markets is in tradition of Ludwig von Mises, and then try to show why we should also use that same foundation to study languages.

Here is a concise post about the analogy.

Re: "Mainstream" Economics.

I. Ryan — Wed, 25 Aug 2010 20:00:41 GMT

I. Ryan:

(I will try to give an example in a bit.)

Okay, here is an example where I define the distinction between nouns and adjectives.

Re: "Mainstream" Economics.

I. Ryan — Wed, 25 Aug 2010 18:20:31 GMT

I. Ryan:

Well, I have to leave for now; I will get back to this tomorrow.

We start out in economics with the idea of volition. We observe our own private worlds, come up with that idea, and then try to unpack it into its components. We need the idea of cause and effect for the idea of volition, because we can't try to achieve anything unless we have an idea of what to do to bring that about. We need the idea of beliefs, because it isn't just that causes and effects exist in the world; it is that we have a belief of the causes and effects that exist in the world. We need the idea of desire, because that is what drives our volition. We get the idea of means and ends from adding the ideas of cause and effect, beliefs, and desires together. And so on.

I didn't try to make that very exact; I just wanted to give you an idea of what is going on. I call that "pure praxeology". It is just the logic or mathematics of volition. We start out with the idea of volition, which we find in our own private worlds, unpack it into its components, and build a vocabulary that we will have to use to make sense of things in the public world. The fact that I can form of the idea of volition in my own private world is a matter of fact, to use the vocabulary of David Hume; whether it exists or not is a matter of fact, and it wouldn't be absurd to say from a third person, god-like point of view that it just isn't there. But what makes it "a priori" is that, if I am talking to you, you can't deny that you have volition, because you will be using your volition to deny that you have volition, and would be caught up in the absurdity of trying to deny trying. So, though that just comes into play in arguments and communication, it is pretty useful, because you can show anyone reasonable that it is a permissable starting point.

We start out with the idea of volition and break it into its components. We get causes and effects, beliefs, knowledge, means and ends, desires, wants, preferences, opportunity costs, pyschic losses, psychic profits, value scales, exchange, choice, satisfaction, gratification, and so on. A lot of those things overlap, and some of them are pretty ambiguous, but it is up to us to unpack the idea of volition into its components in a useful, efficient, unambiguous, and correct way, so we can have a good vocabulary to use for talking about market conditions. We need a good vocabulary before we can talk about market conditions in an effective way.

The mainstream economists of his time used categories like causes and effects, means and ends, desires, choice, and so on, but they just didn't make their investigations explicit. Ludwig von Mises knew that you had to start out by examining your own private world to come up with a good vocabulary to talk about market conditions, and knew that you got that from your idea of your own volition, so he was in a position to try to make the vocabulary that he used systematic, but the mainstream economists of his time didn't know that, and weren't in that position, so what they did was, though they used the same sort of vocabulary, they didn't get it from systematic investigation into the nature of their private world; they just got it from their "commonsense". They didn't not use his method; they just replaced what could be systematic and scientific investigation with unsystematic and unscientific intuitions about things.

I think that we should start out in the same sort of way to study language. I think that we have to start out by observing our own private worlds to create the vocabulary that we need to talk about languages. And I think that most of the terms that linguists use, such as nouns, adjectives, tense, grammatical voice, prepositions, and so on are just unsystematic and confused ways of referring to things, because they are just using their commonsense intuition to come up with the terms.

(I will try to give an example in a bit.)

Re: "Mainstream" Economics.

I. Ryan — Wed, 25 Aug 2010 16:50:23 GMT

John Ess:

I only mean that I think it is irrelevant that people follow Misesian orthodoxy in order to be correct in methodology.

I didn't mean that we should follow the "Misesian orthodoxy". I just meant that he built the foundation that we should use not only for studying markets, but also for studying languages. I don't think that he saw that his work could be applied to studying languages, but who knows. Either way, he knew that his work could be applied to other things, and I think that one of those things could be language, and I don't think that anyone has figured that out yet.

John Ess:

I am also not an economist or an expert on Mises, even if I know some of the basics of his works and agree with some of it. I would in no way challenge Mises on his own thinking. And I'm not about to. But it seems you are taking a bit of a overzealous position on Mises and one I don't suspect is exactly correct[...]

Let's see why you think that.

John Ess:

Namely that Mises didn't factor in his experience or the history of phenomenon when formulating theories[...]

He didn't look at the history of the public world to build the foundation, which I call "pure praxelogy", but he looked at the history of the public world to build the rest of his system, which I call a kind of "applied praxeology", which in his case was applying praxeology to studying markets, but could also be applying praxeology to studying languages, studying friendship relationships, and so on.

I will explain what the distinction between pure and applied praxeology is a bit later, but that distinction is important, especially because you missing it made my arguments sound a lot more extreme than they really are. I don't have a problem with looking at the history of the public world in terms of what people have said, written, and so on, and explaining what is going on; I just have a problem with the fact that I don't think that linguists have a good vocabulary to even talk about what people have said, written or whatever, simply because they have come up with the distinctions, such as those into nouns and adjectives, into subjects and objects, and so on, in an ad hoc, disjointed way, because they are trying to come up with those distinctions in a similar way to how they are trying to come up with speech patterns and whatever, by looking at people speaking languages, and trying to find regularities. Well, those regularities won't even be there unless you already have a theory; you won't be able to even see anything if you don't already have a theory; so it isn't that they find the regularities and make the distinctions just based on looking at text or speech; what they do is look at the text and speech, and use their unsystematic, commonsense, subconscious theories to find the regularities, but that just results in a bunch of ad hoc, disjointed, and disintegrated distinctions. So I'm not saying that they don't already have theories before they start looking at text and speech, but that their theories are unsystematic, because they haven't managed to make them conscious.

John Ess:

[...]that he created his own methodology[...]

Well, I didn't say that.

John Ess:

[...]he thought other types of economics were irrelevant[...]

Well, I also didn't say that.

John Ess:

Or even that if you believe in Misesian economics that you must believe other types of economics are useless.

Well, that is true, but it isn't as extreme as you probably think that it is. Remember, the Austrian School economists often talk about the fact that the mainstream economists might act like Misesian economics is just mysticism, but often follow his methodology anyway. He even said that he wasn't creating a new methodology, but just making explicit what people always thought was what economists were doing. So, yes, if you "believe in" Misesian economics, you have to believe that "other types of economics are useless" at this point, but you don't have to believe that even the majority of mainstream economists operate in one of those "other types of economics".

John Ess:

You seem to be saying that "it", linguistics, relies only on the history of utterances or on existing languages. When that is false. Though, maybe in some ways it does, but only in the same way 'law of demand' relies on the fact that people demand things or else it would never have been formulated.

Well, see the last section. I don't even think that it would be possible that linguistics would rely only on "the history of utterances or on existing languages". I just think that it is a confused mess of psuedo-empiricism, like what Ludwig von Mises thought of the mainstream economists. They use a lot of "a priori" stuff, but they use it in a confused way, because they don't understand where it comes from. Maybe linguists don't make the same claims about their methodology that the mainstream economists of his time did, but I still think that they are making the same mistakes. It doesn't refute what I am saying for instance to quote a high profile, mainstream linguist talking about using "a priori" things or anything like that. I am talking about what they do, not what they say that they do.

John Ess:

You seemed to be saying that linguistics should tell people how to use language. Well, second-language acquisition linguistics advises people on how to acquire a new language and how to use to effectively.

No, I was just saying that, if they were to not see natural languages as the ultimate givens, they might try to figure out how to improve our languages, like an engineer would try to improve the design of bridge, because it should be clear that our natural languages are just overcomplicated messes. Their overcomplicated surface hides a magnificant design and regularity that linguists don't ever seem to notice.

John Ess:

New things = utterances that have never been heard before. You can arrange the finite symbols in a language in order to make an infinite number of expressions. Such as "the cat ran over the dog", "the cat ran over the dog towards the food", "the cat ran over the dog towards the food, in order to get it" and so on possibly to make an infinitely long sentence. But at the same time, it seems to be a fact at any given moment, that languages don't allow certain utterances to make sense. It is a fact that this is a feature of language. A sentence which doesn't fit into one language, either is a nonsense sentence or it must be a sentence in another language. Hence, 'the bite dog man the' is one in the current English vernacular. That this be the case in the future is irrelevant, because the future will have an infinite number of similar sentences that will not work in the English language. The mental rules are the ones that we form in our head to make sense of what things work and what don't. For instance, that subjects go before verbs and objects in most of our sentences, regardless of the words we plug in. In syntax literature, usually this is shown by tree diagrams that show hierarchical relations of various words in different types of phrases. We know something about the brain from this: that humans have the capacity for this type of mental calculation and arrangement of symbols; something unique to humanity.

Okay, well, that is fine, but I don't know where that fits into your response to me.

John Ess:

Yes, since you seem to believe that linguistics is simply documenting experience of languages. I say to the contrary, it is not about individual languages but Language itself.

Why are those two things mutually exclusive?

John Ess:

Well, implicit in the knowledge that something is a language is also knowledge of what a language is and is not. Namely that meaning emerges from meaningless symbols. That strings of sounds or symbols can be turned into a word or a sentence. And since no one teaches anyone these things, something has to account for how people understand that symbols stand for something. And part of that is tuning out some strings of sound/symbols as noise. And tuning into others as possibly meaningful. Without having seen a language, we can tell that certain symbols probably mean nothing. When we are native speakers of a language, we can hear completely new sentences and understand it perfectly. And also hear other completely new sentences and know that it is ungrammatical. Language may require experience of language itself and to have a working language, but one does not need experience of any and all strings to know which ones are going to be probably meaningful and which not. We make these judgments all the time.

We learn the formation rules of a language from our experience of people speaking or writing it. The formation rules of a language are finite, but what those formation rules can form are infinite. We don't need somebody to explicitly "teach" us those formation rules, but we can't know them without learning them from somebody using them. I'm not talking about the strings, but the formation rules. We need to experience people using the formation rules to know what strings will or won't be meaningful. Saying that we could just know out of nowhere is just mysticism. Again, if we hadn't had any experience of the formation rules unique to English, why couldn't "suif9fdsuafuds" mean something? What would be wrong with something like that?

John Ess:

The actual utterances are not important. What is important is the fact that in all languages there are some strings that work and others that don't. This is not refutable. Or else there could be no different languages and indeed no possibility for meaning within a language. Again, this is implicit in understanding what language is and in using it.

Wait, what? What people say is unimportant?

John Ess:

You're confusing the written rules, explicit rules that are taught, with implicit rules which are too numerous to teach. Most people don't have a list of rules, but still use the language. It is not a static thing but each person's mental conception of how their native tongue works. Again, in English -- as in all languages -- the rules can be deduced from the knowledge that some utterances can work at a given period and others cannot. For instance, those that would be semantically nonsensical or when it becomes a totally different language. Something has account for why 'the bite dog man the' doesn't work at this very moment. And why 'como estas?' is Spanish sounding instead of English. If you go to a foreign country and someone is speaking a language you've never heard of, you don't wait around to figure out if they speak your language. You know right away that isn't just an English sentence you've not heard before. That it has other rules, another lexicon, a different syntax, and many things besides.

I can assure you that I'm not. The "rules of English" are what set English apart from the other languages. There might be a lot of things about using English that aren't history, but what sets it apart from the other languages is just history.

Re: "Mainstream" Economics.

I. Ryan — Wed, 25 Aug 2010 16:26:35 GMT

John Ess:

What I mean to say is that I don't know what you're getting at by making the analogy. Because I don't know if you even understand Mises or this issue.

[...]Nor can I be sure if I know what you're getting at[...]

Okay, well, in my next few posts, I will try to explain what the foundation of studying markets is in tradition of Ludwig von Mises, and then try to show why we should also use that same foundation to study languages. I didn't ever try to explain the foundation in this thread; I just acted like you should know what it is. But I will now try to make what I am talking about explicit.

John Ess:

[...]it seems there is some carry over of some 'axiomatic' truth from Mises which privileges a priori over empiricism. My personal interpretation of Mises seems to find this a misunderstanding of him.

For instance, I don't think he observed things about money by observing merely himself. What would be the difference between this and observing others, except it is more myopic to do the former? If I come up with a moral law based on my own personal preferences, it doesn't make it anymore arbitrary than counting the opinions of the majority of people.

Okay, money wasn't a good example. But you didn't understand what I meant anyway. I will explain a bit about what I meant in the next section.

John Ess:

Would Chomsky be able to come up with better theories by observing only the way he himself talks/writes?

I didn't mean that we should observe us using language in the public world. I didn't even mean that we should observe us using language at all. I meant that to start out and get the vocabulary that we need to talk about this, we need to first observe our private world, just like in economics. We don't find choice, opportunity cost, preference, desire, or anything like those just in the public world; we don't find them just observing other people doing things. We find them in our own private world, and then assume that the movements of other people are caused by a similar private world that they have. But to assume that they have a similar private world means that we first need to know what a private world is, and we can't find that in the public world, where we only find physical movements.

Re: "Mainstream" Economics.

Caley McKibbin — Wed, 25 Aug 2010 16:02:16 GMT

The admins reserve the right to monopolize cheekyness. So, you'll have to guess.

Re: "Mainstream" Economics.

Lagrange multiplier — Wed, 25 Aug 2010 14:39:59 GMT

Do they dream of working at a patent office?

Re: "Mainstream" Economics.

Caley McKibbin — Wed, 25 Aug 2010 13:38:47 GMT

All academia is seriously flawed.

Get over it.

Academics don't get money back on their ideas the way businessmen do. This is just as much true whether the academic is Lew Rockwell or Paul Krugman.

This.

Smart people don't dream of being teachers. It's the people who are left after the talented and competent do else that go into teaching. Subjects like economics don't even have any application outside of teaching. It's just a chain of propaganda. A bunch of people get paid (on someone else's back) to sit around and conjure any figment of the imagination that pleases them. 99% of people in every "discipline", to use an inaccurate word, are like the styrafoam filler in a box of wine glasses. It's the 1% that make all of progress. This is hyperbole, but you get the gist.

Re: "Mainstream" Economics.

Azure — Wed, 25 Aug 2010 04:47:32 GMT

Then why can some nerds communicate in machine language?

Because "speaking in binary" is only a cipher. It's still English (or whatever language they're encoding) underneath.