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You could at least tell the truth about what your "opponent" actually said; after all, it's now a matter of public record, right here in this thread.
He said "people behave as rational decision makers." You then repeatedly misrepresented this by trying to turn it into a play on modern jargon, which uses the expression "rational expectations." This literal expression, being modern jargon, is absent from classical economics. But of course the essential idea (although not the jargon) is commonplace throughout classical economics, as exemplified by Adam Smith's famous notion "It is not from the benevolence of the butcher . . . but from their own self interest."
So the "opponent" said to himself, "Self, please tell me why this poster gwynedd persists in doing this kind of thing, only to dig himself deeper and deeper into a conversational hole?"
After some thought, Self then replied: "It may be a matter of simple cognitive dissonance. Perhaps he is struggling to hold on to two sets of contradictory ideas, the ideas behavioral psychology, and the ideas of classical economics. After all, he has claimed expertise in both of these, and they are like oil and water."
After further thought, Self said "I think that gwynedd would do much better in advancing his ideas if only he would spend less of his effort trying to spit contemptuously on everybody else. You know, threatening to 'just out them as a fraud,' calling them 'ignorant,' and so forth."
Perhaps its a matter of your psychogenic fugue. Where do you even get the idea that rational expectations is self interest? People irrationally smoke cigarettes in pursuit of an addiction which is their want. If I establish they have this irrational want, then their behavior will be more predictable. They also act "rationally" in this context trying to find the best price, all things being equal. They also act "rationally" in crossing the street carefully enough to buy them. Its irrational to be obese and not exercise is it not? Are not people disinterested in acting rational?
And speaking of the quote, like the butcher you are, you took it out of context.
Whoever offers to
another a bargain of any kind, proposes to do this. Give me that which I
want, and you shall have this which you want, is the meaning of every such
offer; and it is in this manner that we obtain from one another the far
greater part of those good offices which we stand in need of. It is not from
the benevolence of the butcher the brewer, or the baker that we expect our
dinner, but from their regard to their own interest.
Since when were wants implied to be rational? Since when is being interested in meth rational?
So where does this fit in with Smith's theories again? How in the world does "own interest", which you reworded to "self interest" to imply one's welfare, then become synoymous with "rational expectations"? Stick with copy editing. Conflating classical and neoclassical again and again gets pretty boring.
Smith's theories centered around perceived self interest and its conflicts with the common interest.
The interest of this third order, therefore, has not the same connection with the general interest of the society as that of the other two. Merchants and master manufacturers are, in this order, the two classes of people who commonly employ the largest capitals, and who by their wealth draw to themselves the greatest share of the public consideration. As during their whole lives they are engaged in plans and projects, they have frequently more acuteness of understanding than the greater part of country gentlemen. As their thoughts, however, are commonly exercised rather about the interest of their own particular branch of business, than about that of the society, their judgment, even when given with the greatest candour (which it has not been upon every occasion) is much more to be depended upon with regard to the former of those two objects, than with regard to the latter.
Wealth of Nations ,Book I, Chapter XI
His writings are full of observing irrational absurdities in policy like taxes on salt in France. What "rational expectations" does he talk about? Where does he say interests = rational? Please cite the source.
Hmmmm, you miss my point. I am not really into what you do as I have long since learned the following:
You can lead a horse to water but you can't make him drink
That doesn't mean you have to assume the mentality of the horse and go thirsty yourself.
You obviously have a different financial strategy and are drinking from a different pond and that is how America works. Halliburton was a good investment in the post 9/11/
Afghan/Iraq war period, however for many ideology made them go elsewhere. Gun manufacturers have been on a role lately and have bolstered the return of several public pension funds. Again what is the person of pension fund investment? ROI to meet contracted payout obligations or ideology as guns are legal. You are talking about supply side economics and I talking about expanding personal wealth by getting in on investments early in the game and hopefully riding the big money up. What strategies are you using to secure your present and most importantly retirement well being. I am sure with your background you are doing things that others could learn from. Pension? Investments? The traditional three legged stool etc etc. Per the OP payroll taxes have not been extended is that something of immediate impact to you or are you either retired or comfortable enough that it isn't that impactful? Being retired it isn't the biggie for me at all in terms of paying them but in terms of market reaction I had considerable PERSONAL interest.
I am not talking about financial strategies at all. Stealing stuff would certainly help my financial position. Unfortunately this would result in much less buying power for all our finances. A heavily finacialized economy tends to kill it because its nothing but economic system of owners divorced from operations.
However you do make a good point. You have to play the game you are dealt. I certainly would not want to live in a world of rents with nothing but income from labour. Though its a little late in the cycle. The last thing I bought was VLO. @29.75. I also thought quality junk bonds were best in what I figured to be a grind like this. It was my not going to have hyperinflation investment. I expected yield chasing and I got lots of it since I was in at about 8% yields and now hover around 5%. I was going to exit until I realized they did not do the full QE. I would be more concerned if 10 year yields went under 1%. I don't want bonds of any kind in a bond crisis.
Don't like intellectual properties much because if it booms the West is doing fine. If the BRIC countries do well they don't care about that at all; black market losses.
So where does this fit in with Smith's theories again? How in the world does "own interest", which you reworded to "self interest" to imply one's welfare, then become synoymous with "rational expectations"? Stick with copy editing. Conflating classical and neoclassical again and again gets pretty boring.
You tell me. The record here clearly shows that you brought the modern-jargon term "rational expectations" into the discussion, not me. Rather, I mentioned "rational decision makers." So, is Adam Smith trying to say that the butcher, et al, are irrational decision makers? Or not rational? Which do you think is his point, if not that they're indeed rational?
Moreover, why has the world (at least almost everyone) moved on from classical economics? One answer: because it's a branch of philosophy that has little or nothing to do with today's world. Another answer: because it's more or less wrong to the extent that it says anything, since it is deduced from untested premises. Yet another answer: because it's not meaningfully quantitative, and can't make any useful projections that can be verified or refuted.
Adam Smith, for example, would be read by a student of the history of ideas, not a student of economics. Someone might gravitate from economics to the history of economics, I suppose, if he or she couldn't learn enough math to work with modern ideas. By contrast, today's graduate student in economics would be busy learning about eigenvectors, econometric methods, and the like.
About copyediting, which you have mentioned yet again: you interchange the British spelling "behavioural" with the American spelling "behavioral," which again suggests that you may not be as comfortable with the subject as you would seem to wish. It seems to me that anybody competent in the subject would pick one or the other, and stay with it.
Last edited by Hamish Forbes; 01-08-2013 at 01:22 PM..
You tell me. The record here clearly shows that you brought the modern-jargon term "rational expectations" into the discussion, not me. Rather, I mentioned "rational decision makers." So, is Adam Smith trying to say that the butcher, et al, are irrational decision makers? Or not rational? Which do you think is his point, if not that they're indeed rational?
It does not surprise me that you paraphrased it having heard it "somewhere". To be fair, its not a unique experience. Most people who have opinions on Smith, Marx or Keynes never even read their works. Its usually a catch phrase they heard and continue to propagate.
No there is no indication at all that Smith endorsed that 20th century idea. His main idea was the conflict of the collective interest with personal interest and that government policy needed prevent lobbying efforts of these special interests.
Quote:
Moreover, why has the world (at least almost everyone) moved on from classical economics? One answer: because it's a branch of moral philosophy that has little or nothing to do with today's world. Another answer: because it's more or less wrong to the extent that it says anything, being deduced from untested premises. Yet another answer: because it's not meaningfully quantitative, and can't make any useful projections that can be verified or refuted.
Yes I am sure that must be it. Classical economics, a political doctrine as you say, has been refuted? Suddenly you have abandoned this idea that economics is mostly about what is unfalsifiable.
Well lets see, in Rome Christianity usurped paganism. I guess that means it was correct. We also were supposed to drink 8 glasses of water a day, fat was bad, but now certain ones are good like olive oil. Oh wait, now some people say olive oil is bad.
Are you really going to go with the known logical fallacy of majority opinion?
The so called marginal revolution contains its own paradox. First they say "value" is based upon utility and not labor and then they say there is no free lunch. Well what exactly is not working and selling something for more ? Classical economics has been refuted by this paradox? It really gets ugly when they try to refute my eyeballs.
Now here is a rational thought. Perhaps a special interest felt exposed by the concept of unearned income and funded and promoted a theory that protected them. It is not even remotely unprecedented. Speaking of classical economics, the one criticism of it I share is that which Ricardo promoted with his barter models, taking finance out of account as if banking had no impact. Is it suspicious that he was a bank lobbyist? And yet he did such fine work against the landed gentry and their beloved corn laws adding support to my theory that the truth comes from the descriptions of one's enemies, and lies abound on self descriptions. Now that banking absorbs huge amounts of revenue, its the eyeballs that refute Ricardian barter.
Quote:
Adam Smith, for example, would be read by a student of the history of ideas, not a student of economics. Someone might gravitate from economics to the history of economics, I suppose, if he or she can't learn enough math to work with modern ideas. By contrast, today's graduate student in economics would be busy learning about eigenvectors, econometric methods, and the like.
Yes, they would learn flawed mathematical models that could not tell the difference between parasitism and symbiosis. The velocity of money theory was ripped right from physics. Slave economies show their own equilibriums that would fit right in. And if you know behavioral psychology as you claim, then you know statistics are as good as your model and data collection. Good math maps reality and observation. Bad math ignores reality and keeps creating its own ever so fictitious derivatives.
As Michael Hudson says, the Babylonians were better at math than we are. They would laugh at compounded interest.
A year ago, it was hardly unthinkable that a math wizard like David X. Li might someday earn a Nobel Prize. After all, financial economists—even Wall Street quants—have received the Nobel in economics before, and Li's work on measuring risk has had more impact, more quickly, than previous Nobel Prize-winning contributions to the field. Today, though, as dazed bankers, politicians, regulators, and investors survey the wreckage of the biggest financial meltdown since the Great Depression, Li is probably thankful he still has a job in finance at all. Not that his achievement should be dismissed. He took a notoriously tough nut—determining correlation, or how seemingly disparate events are related—and cracked it wide open with a simple and elegant mathematical formula, one that would become ubiquitous
Or Henry George?
Clearly, the trouble is that production and con- sumption cannot meet and satisfy each other. This, it is commonly agreed, arises from speculation. But speculation in the products of labor simply tends to equalize supply and demand. It steadies the interplay of production and consumption, much like a flywheel in a machine. This has been well shown, and spares me the need to illustrate it.
Therefore, the problem must be speculation in things that are not the product of labor. Yet it must be things needed for production. And finally, it must be things of fixed quantity.
The cause of recurring recessions must be speculation in land.
Quote:
About copyediting, which you have mentioned yet again: you interchange the British spelling "behavioural" with the American spelling "behavioral," which again suggests that you may not be as comfortable with the subject as you would seem to think. It seems to me that anybody competent in the subject would pick one or the other, and stay with it.
I'll leave the one thing you do better than I to you, copy editing.
^^ Well hello again. Is this a religion with you, or what? We seem to have a deity (Adam Smith) and a plurality of Satans (those dratted rentiers). All we lack is a song book. So, the first question would logically be: how many angels can dance on the head of a pin owned by rent takers who have a monopoly conveyed by the Sovereign? Please limit your answer to 500 word or less. Thanks!
Edit - I just thought of an appropriate entry for the song book: "Love song of the Luddites." And a very old parable for the mathematically inclined: "The Jacobians and their struggle for independence."
Last edited by Hamish Forbes; 01-08-2013 at 02:07 PM..
What we need is for people to stop living beyond their means -- and SAVE more for their OWN dang retirement.
(which, I know, I know, some might argue would slow the economy through less spending. But I think SAVING spurs investment....so that would be my position)
AND I'd get rid of -- I don't know how many exactly, but -- a WHOLE LOT of government jobs. Education Dept. -- bye-bye, Interior -- bye-bye...Housing...bye-bye.....at least in their present form. Census and Nat. Wx Service see-ya....Library of Congress,,,bye...National Endowments for Arts and Humanities....gone.
I want al that done...then we can talk about raising my taxes.
+1........Few seem to remember that SS was a supplement to retirement though for many it is their sole source of income in retirement.
Rent seeking is job killing. That is what the rich do in spades. How does investing in the ground and waiting for people who want to use it to pay more going to trickle down? Where is the supply putting up toll booths?
Rising ground rents doesn't supply more ground. Its just makes it costly.
Zero Sum Game idealogy? Money changes hands but no good or service was provided.
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Is this a religion with you, or what? We seem to have a deity (Adam Smith) and a plurality of Satans (those dratted rentiers). All we lack is a song book. So, the first question would logically be: how many angels can dance on the head of a pin owned by rent takers who have a monopoly conveyed by the Sovereign? Please limit your answer to 500 word or less. Thanks!
