We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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Samizdata quote of the day – The numbers don’t add up The economist who says a policy will probably raise employment, other things being equal, is telling the truth as far as it goes. The one who says employment will rise by exactly 2.3% has mistaken a guess for a measurement, and dressed the guess up in a suit it did not earn.
Markets do not work because they are mathematically optimal but because they let millions of separate judgments, made by people with knowledge no central model could ever gather, correct each other in real time. That is not a formula. It is closer to a conversation, conducted in prices instead of words, and no economist has yet written an equation that listens as well as a market does.
– Madsen Pirie
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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Theoretical perfect markets are mathematically optimal, and can be matched, but not bettered, by socialist economies made perfect by literal divine intervention. Actual real-world markets are imperfect, but degrade much much MUCH more gracefully than actual real-world socialist economies. As in the difference between Hong Kong under the UK and Cambodia under Pol Pot more gracefully.
It is not all that complicated.
* Micro economics is as reliable as the laws of physics. Drop a ball and it falls down, increase the price and demand falls. It is a useful tool for businesses and families to plan.
* Macro economics is as reliable as the laws of homeopathy. They are based on complete bullshit and are a tool to allow the powerful to manipulate the markets (which is another way of saying “manipulate the people”) into profiting for themselves and their friends.
The mathematics, the complex spreadsheets and gigantic computer models, they are all just a pantomime to disguise their malicious intent. Do we hold economists to their predictions? Of course not. “Why did unemployment go up rather than down after enacting this policy you recommended?” “Well” the economist tells us, “the economy is a complex thing with many variables that we need to take account.” Is that true? Yes it is, so “Why then did you predict that unemployment would go down 2.375%” and more importantly “when it went up 3.85% instead, why did you not slink off into a hole in shame and embarrassment rather than going on Jim Cramer the next day and predicting that GDP will grow by 3.442% in the final quarter?”
Economist. One of a small category of job along with meteorologists, “end of the world” prophets and global warming predictors, where you can be wrong every single time and still continue to draw a paycheck.
The economy does not need macro-economic control. It needs to be left the hell alone. And in doing so will make us, including all the Machiavellian manipulators, richer than our wildest dreams.
Economics, it is not all that complicated. It is chimera of two completely different things:
* Micro economics is as reliable as the laws of physics. Drop a ball and it falls down, increase the price and demand falls. It is a useful tool for businesses and families to plan.
* Macro economics is as reliable as the laws of homeopathy. They are based on complete bullshit and are a tool to allow the powerful to manipulate the markets (which is another way of saying “manipulate the people”) into profiting for themselves and their friends.
The mathematics, the complex spreadsheets and gigantic computer models, they are all just a pantomime to disguise their actual ignorance and malicious intent. Do we hold economists to their predictions? Of course not. “Why did unemployment go up rather than down after enacting this policy you recommended?” “Well” the economist tells us, “the economy is a complex thing with many variables that we need to take account.” Is that true? Yes it is, so “Why then did you predict that unemployment would go down 2.375%” and more importantly “when it went up 3.85% instead, why did you not slink off into a hole in shame and embarrassment rather than going on Jim Cramer the next day and predicting that GDP will grow by 3.442% in the final quarter?”
Economist. One of a small category of job along with meteorologists, “end of the world” prophets and global warming predictors, where you can be wrong every single time and still continue to draw a paycheck.
The economy does not need macro-economic control. It needs to be left the hell alone. And in doing so will make us, including all the Machiavellian manipulators, richer than our wildest dreams.
If a million different people flip a coin one time each, you’ll get a rather predictable result.
I’m still of a mind to think that econ analysis and prediction simply suffers from being too early – we don’t know what factors we’re ignoring, we’re still weighting things incorrectly . . .
It’s like meteorology 100 years ago. You walked outside to see the weather, as opposed to today with sophisticated complex models that let me see a rather accurate forecast of rain in five days.
We’re just too early.
(ETA: I’m curious to see what AI systems can add to this area.)
Economics is very much a real discipline and those who claim it is not are just wrong – HOWEVER it is indeed not a mathamatical discipline, the methods used in physics are not correct for economics.
Ludwig Von Mises explained these methological matters in several works – and he was correct. Both the mistake of thinking economics is not a serious discipline and the mistake of thinking it is a mathematical discipline, must be avoided.
Dr Madsen Pirie gives a good example – an economist who says that government intervention (say governmnet backing of “Collective Bargaining” by allowing obstruction, “picketing”, of the enterances of business enterprises) to increase wages and conditions more than the supply-and-demand (the market) would lead to, will create Unemployment (Institutional Unemployment) over time – is correct, but an econoimist who says “I can tell you exactly how much unemploymnet will be created by this measure – via mathematical modeling” is NOT correct – that level of exactness should NOT be claimed. Yes unemployment will go up over time if the government intervenes to improve wages and conditions more than supply and demand (the market) would lead to – but we do not know, can-not know, exactly how much unemployment will go up (because there are so many other factors involved in this).
Logic, including economic logic, is not always mathematical – it is wrong to hold that logical reasoning in economics (or other matters) can be reduced to mathematical equations and presented as a computer model.
This is why economic principles (and there are economic principles – again people who deny this are wrong) must be expressed in general terms – for example “rent control will, over time, lead to a shortage of rental accomodation” NOT “the exact decline of available rental accommodation will be X per cent”.
By the way – but related.
There is now a disturbing tendancy among some (some) people on the right to deny general principles, in economics – and in other matters (including basic morality).
Claims, for example, that the American Bill of Rights does not represent Natural Law (Natural Justice) thinking that examined over thousands of years – but, rather, was the specific product of a particular historical and racial (yes racial) group – and does not apply to other groups (black people should not have Freedom of Speech? hispanics should not have the right to Keep and Bare Arms?).
This is similar to the claim made by late 19th century and early 20th century German (and other) thinkers that the position that there are universal laws of economics is “Jewish” (even though most of the economists who first explained these principles were NOT Jewish), and that, rather, different economic principles apply in different “historical periods” and different racial groups.
This view is mistaken – things like Minimum Wage regulations or Rent Control regulations do not care about the “historical period” or about the ethncity of a particular nation.
They have negative impact – whatever the “historical period” is, and whatever the ethnicity of the nation is.
None of the above should be taken to mean that the Jacob Rees-Mogg thesis that ethnicities, peoples, do not exist – or are just Social Constructs, is correct. They do exist – but the laws of economics, and the laws of ethics, apply to all of them (whether they like it or not) – these are real priniples, but they are not matters of mathematics.