Which school of economic thought do you prefer?

[© tweed]

Message from the moderator (ag):


Dear Libertas: my most profound apology: I accidentally deleted your post (pressed modify instead of quote: idiot me, the danger of being the moderator). I don't have the original text: if you still have it somewhere, please put it back. Otherwise, once again, my most sincere apology for being such an idiot.

isn't it against the rules to post private messages?

[Gustaf]

Message from the moderator (ag):


Dear Libertas: my most profound apology: I accidentally deleted your post (pressed modify instead of quote: idiot me, the danger of being the moderator). I don't have the original text: if you still have it somewhere, please put it back. Otherwise, once again, my most sincere apology for being such an idiot.

isn't it against the rules to post private messages?

Not your own, I don't think. Regardless, this doesn't seem to have started out as a PM anyway.

On a side note, this discussion seems to have died out the moment facts got introduced to it. How typical. 

[Tetro Kornbluth]

Message from the moderator (ag):


Dear Libertas: my most profound apology: I accidentally deleted your post (pressed modify instead of quote: idiot me, the danger of being the moderator). I don't have the original text: if you still have it somewhere, please put it back. Otherwise, once again, my most sincere apology for being such an idiot.

isn't it against the rules to post private messages?

Not your own, I don't think. Regardless, this doesn't seem to have started out as a PM anyway.

On a side note, this discussion seems to have died out the moment facts got introduced to it. How typical. 

Sorry, if you haven't noticed I've been busy the last few days...

So, anyway.

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Mind giving us a few examples to my sceptical self...

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So if rationality is not implying anything at all, why use it? And mind telling me what exactly makes up the consumption space - an attempt to create a quasi-scientific model to contextualize human actions and behaviour seems to me as a Sisphysian task (and how are they 'testable' precisely?).

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I never claimed that I thought economics is a perspective science - at least in the sense that it pretends to judge the morality of actions (though "the man in the economics textbook" always did strike me as rather psychotic).

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I'm not thinking here of actual individual choices, I am thinking here of what you suppose is the reasoning behind these choices - which is, I suppose, what economics aims at and tries to understand. After all, you are the one who suggested that human behaviour was very predictable earlier in this thread - either you are contradicting yourself (by arguing that in fact human behaviour is in fact different within groups) or you are doubting your own model (by arguing that in fact humans are different within different social groups and thus can't be studied by a priori economic models).

I will also add here that it is interesting that you would call upon biologists (why?) in your hypothetical above scenario.

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As I don't know much about the nature of the empirical research involve I won't comment much here but I will only add that it strikes me that given any set of data there are simply an infinite amount of models which could adequately describe it depending on which point of view you look at it from. I mean, why rational choice over some other form of psychologism - the former strikes me as a relic of 18th Century British philosophy (which is where modern economics originally derives from o/c).

[Gustaf]

Mathematical truths don't imply anything about human behaviour either. Should we therefore not use math?

It seems odd to claim that only concepts that pre-suppose a certain behaviour should be used in analyzing behaviour. It certainly doesn't seem like a very scientific approach.

And asking for examples here is like asking us to give examples of, I don't know, French people who can speak English. You really think we're making this stuff up?

When ag says human behaviour is predictable I would guess that he means that aggregate behaviour, ceteri paribus, is predictable. Not individual behaviour and obviously not if you change important parameters (such as culture, perhaps).

[Tetro Kornbluth]

Mathematical truths don't imply anything about human behaviour either. Should we therefore not use math?

No. But for what purpose is one using maths? How can one show that it accurately models what it attempts to do? And if it does, is it even desirable to do so?

Remember one of my gripes against economics is that it is very influential in policy.

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Huh? When I was pre-supposing that? 

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'Aggregate' behaviour - WTH is that? Is there an 'aggregate' human being who acts in an 'aggregate' way?

[Filuwaúrdjan]

I presume that he means in the sense that you can look at collective behavior, social behavior, whatever you want to call it; the actions of a large group of people. Which is perfectly legitimate, though the dangers of determinism and essentialisation are always something to be wary of.

[Tetro Kornbluth]

I presume that he means in the sense that you can look at collective behavior, social behavior, whatever you want to call it; the actions of a large group of people. Which is perfectly legitimate, though the dangers of determinism and essentialisation are always something to be wary of.

Oh I knew what he meant - my point was what you just expressed in the second sentence.

[phk]

Btw.

Rationality is simply defined as:

1.) a > b > c

and

2.)

a > b
b > c
a > c

Perhaps consistency may be a better word.

[ag]

You raise many issues, let me touch on just some of them.

1. There are zillions of papers on things other than rationality. For recent examples scholar google, say, the rational shortlist (recently discussed by Manzini and Mariotti). Or anything on choice w/ frames or from lists (see Rubinstein). Or, say, on sequential rationalizability, or on choice with status quo. Or, in general, on bounded rationality (I could give many other buzzwords, but these should be enough). If you can't find a 100 papers that appeared in the last few years, I'd conclude that you can't use scholar google.

2. Good economics is not about moral judgements at all, not about human actions, not about anything else.  I make many moral judgements in my life, and not one of them is based on anything I ever learned in economics. In my view, anyone, who tries to make one's morals based on economics, is an idiot.

3. Math is used for simplicity sake, as a language. It is forcing us to state assumptions and make clear logical steps involved in getting to the conclusions. It is true, it is possible to do this without math - it's just much harder and very few people are capable of it. The shoddy logic and poorly defined assumptions of those members of the modern Austrian cult, who claim to reject math, provide ample (though, by no means exclusive) evidence for that

4. Defining consumption space forces me to take a stand on what I think is relevant for individual choice in a particular setting. It's just another clear assumption I have to state explicitly every time I start working out a model. It is specific to the model I am considering - no universal claims are made. I am quite aware, that I might be wrong in my definition in the sense that individual choices I am studying were made w/ a different consumption space in mind.  If the choices studied don't satisfy, say, the above-mentioned Strong Axiom of Revealed preference given the consumption space I can conclude that something in the model was wrong: either the consumption space, or the rational model of decisions out of it.  Frankly, I'd be quite happy about it: falsifying (proving wrong) theories is bread and butter of every researcher. What to relax (rationality or the consumption space) would depend on the particulars of the problem at hand.

5. Rationality itself is used as a sort of a professional Occam's razor: again, it makes reasoning simple and clear and assumptions easy to state and understand. As it is nearly impossible to falsify on most sets of data economists deal with, there is no advantage of using other models of decision-making in those cases, but there would be a great disadvantage: one would have to define zillions of things clearly and make sure readers understand them. Using rationality in an "as if" sense is, mostly, fairly harmless. When need arises, other models are, in fact, used.

6. I am, actually, fairly agnostic on the reasoning that people use to make their choices. So, no, I don't make a claim you imply I make.  No, I don't think Macheguengas make decision same way I do. Nor do I really take a stand that you make decisions same way I do either.

7. Obviously, behavior is fairly predictable only in a statistical sense. I can fairly well predict distributions in many cases - based on empirical observations. I don't claim to be able to predict behavior of any one person in the room, unless I really know that person well (and, in that case, I am likely to be doing this not as an economist but, say, as a spouse ) )

Did I skip anything else of importance?

[ag]

Btw.

Rationality is simply defined as:

1.) a > b > c

and

2.)

a > b
b > c
a > c

Perhaps consistency may be a better word.

Not quite. It is

1) either a is subjectively at least as good as b for individual i or b is subjectively at least as good as a for individual i (or both)

and

2) a is subjectively at least as good as b for individual i  and b is subjectively at least as good as c for individual i implies a is subjectively at least as good as c for individual i

It is usually followed by an assumption that an individual w/ such rational preferences always chooses the best alternative according to them. It's a neat model and a great disciplining device, but it ain't worth dying for BTW, Austrians, to the best of my knowledge, have exactly no problem w/ this assumption )) (except for some ridiculously irrelevant mumbo-jumbo about the nature of indifference to which any sane economist is entirely indifferent ) )

PS: BTW, notice, I deliberately avoided using math notation. If they insist, I am willing to abjure it completely. Of course, translating a 10-page notation-dense article into notationless English might make it into a 200-page volume, but it's doable )

[ag]

I presume that he means in the sense that you can look at collective behavior, social behavior, whatever you want to call it; the actions of a large group of people. Which is perfectly legitimate, though the dangers of determinism and essentialisation are always something to be wary of.

Oh I knew what he meant - my point was what you just expressed in the second sentence.

That's because you a) never read any empirical research in economics (or, for that matter, any theoretical research either, I am afraid) and b) maintain an utterly ridiculous assumption that economics has anything to say about morals )

[ag]

Ah, as for the biologists. As the natives in the jungle face very different cultural norms and values, life experiences, etc., etc., then, assuming they behave the same way as my undergraduates in a culturally very sensitive environment of auctions, I'd be prone to conjecturing that there is something in our brains that's hardwired. As I am no brain scientist, I would conclude it is completely outside of the area of my competence and ask for help from those who actually study those things.

[Gustaf]

I presume that he means in the sense that you can look at collective behavior, social behavior, whatever you want to call it; the actions of a large group of people. Which is perfectly legitimate, though the dangers of determinism and essentialisation are always something to be wary of.

Oh I knew what he meant - my point was what you just expressed in the second sentence.

What I meant was simply aggregated actions. I may be able to predict how large a percentage of a group will make choice X.

For instance, I'm ready to predict that the Swedish right will win a majority of the vote from the upper class in the election on Sunday. I wouldn't say that I can predict the vote of a single person though. While I can't predict how an individual voter will vote I can still, in theory, predict the aggregate outcome of the election.

[opebo]

...b) maintain an utterly ridiculous assumption that economics has anything to say about morals )

Would you say that your capitalist economics takes preferences (morals) as assumed, and only studies behaviors related to the pursuit of same?

[ag]

...b) maintain an utterly ridiculous assumption that economics has anything to say about morals )

Would you say that your capitalist economics takes preferences (morals) as assumed, and only studies behaviors related to the pursuit of same?

No, I wouldn't ) Preferences (which could include morals, though not necessarily) are not assumed: we may make inferences about them from empirically observed choices. What I can say, for instance, is how a certain set of policies would perform w/ respect to some set of objectives, which might be moral-based. In particular, I could argue that if an individual, though proclaiming a certain objective, advocates policies at odds with the same, that individual is lying about his/her objectives (this is why I don't believe in your leftism: you habitually advocate policies that would entrench the aristocratic wealth and screw the poor).

I also object to the word capitalist in this context: I simply don't know what it means. You could argue that capitalism refers to a certain set of institutions, such as markets. But the techniques of analysis we employ are not institution-specific.  In my published work I am one degree of separation (by co-authorship) from one of the leading contemporary Marxists (i.e., we co-authored published papers with the same guy). While it is true, that the questions he asks are very different from the ones that interest me, I have no difficulty understanding the points he makes. Methodologically, there is no barrier, though, of course, there is a very severe ideological disagreement and, consequently, a major difference in taste for what constitutes an interesting problem. Naturally, ideologies are very important in characterizing us as citizens. Less so, in characterizing us as economists. And, to repeat, though ideologies do affect what we consider important questions to be resolved, they don't matter, once a precise question is asked.

[opebo]

...In particular, I could argue that if an individual, though proclaiming a certain objective, advocates policies at odds with the same, that individual is lying about his/her objectives (this is why I don't believe in your leftism: you habitually advocate policies that would entrench the aristocratic wealth and screw the poor).

We've all read this propaganda before, ag.  Don't you think this line is getting a bit tired after being asserted strenuously by academia and media for generations, considering the actual condition of the populace?

[ag]

...In particular, I could argue that if an individual, though proclaiming a certain objective, advocates policies at odds with the same, that individual is lying about his/her objectives (this is why I don't believe in your leftism: you habitually advocate policies that would entrench the aristocratic wealth and screw the poor).

We've all read this propaganda before, ag.  Don't you think this line is getting a bit tired after being asserted strenuously by academia and media for generations, considering the actual condition of the populace?

I don't see what does the condition of the populace have to do w/ anything I've said )

What I do see is that you consistently advocate policies carefully designed to maximize monopoly rents extracted by the rich from the poor.

[opebo]

We've all read this propaganda before, ag.  Don't you think this line is getting a bit tired after being asserted strenuously by academia and media for generations, considering the actual condition of the populace?

I don't see what does the condition of the populace have to do w/ anything I've said )

I only mention the condition of the populace as you suggest that their condition would be better under some other policies than those which I have advocated:

...you habitually advocate policies that would entrench the aristocratic wealth and screw the poor.

We've all read this propaganda before, ag.  Don't you think this line is getting a bit tired after being asserted strenuously by academia and media for generations, considering the actual condition of the populace?

What I do see is that you consistently advocate policies carefully designed to maximize monopoly rents extracted by the rich from the poor.

I do see your point, however as I'm sure you realize not everyone agrees that those policies accomplish what you believe they accomplish.  Besides, while I mostly advocate a kind of Fabianism, I have also stated that the course of slaughtering their oppressors is a reasonable one for the poor (certainly the most satisfying and 'just'), and that certainly wouldn't maximize anything for the rich as they'd be dead. 

[ag]

We've all read this propaganda before, ag.  Don't you think this line is getting a bit tired after being asserted strenuously by academia and media for generations, considering the actual condition of the populace?

I don't see what does the condition of the populace have to do w/ anything I've said )

I only mention the condition of the populace as you suggest that their condition would be better under some other policies than those which I have advocated:

...you habitually advocate policies that would entrench the aristocratic wealth and screw the poor.

We've all read this propaganda before, ag.  Don't you think this line is getting a bit tired after being asserted strenuously by academia and media for generations, considering the actual condition of the populace?

What I do see is that you consistently advocate policies carefully designed to maximize monopoly rents extracted by the rich from the poor.

I do see your point, however as I'm sure you realize not everyone agrees that those policies accomplish what you believe they accomplish. 

I know ) But here I do believe myself to be on solid ground And, as I do not believe that stupidity and evil (according to my own subjective definition of it) are empirically distinguishable, I tend to assume evil as an explanation ))

[Storebought]

The above posts happens to stand as one of the most thorough destructions of an "intellectual" position I've ever seen here on AF.

I have nothing to add to that, but I will comment that opebo's desire to see the poor violently "rise up" against their masters, strikes me as yet another manifestation of his to see poor people, the rest of humanity, really, to destroy themselves en masse for the sake of his own amusement.

[ag]

The above posts happens to stand as one of the most thorough destructions of an "intellectual" position I've ever seen here on AF.

I have nothing to add to that, but I will comment that opebo's desire to see the poor violently "rise up" against their masters, strikes me as yet another manifestation of his to see poor people, the rest of humanity, really, to destroy themselves en masse for the sake of his own amusement.

Alas, it's not that simple ) Firstly, there were two very distinct "intellectual" positions involved (apart from mine, of course ) ). And, secondly, it wasn't very thorough - to do it thorougly, I'd need more time than I actually have. Finally, it's not fair - I am an econ prof. Though I haven't said anything that I believe to be wrong, I did leave gaps in arguments, through which any well-trained colleague (including myself) could easily drive a tank.

[Storebought]

The above posts happens to stand as one of the most thorough destructions of an "intellectual" position I've ever seen here on AF.

I have nothing to add to that, but I will comment that opebo's desire to see the poor violently "rise up" against their masters, strikes me as yet another manifestation of his to see poor people, the rest of humanity, really, to destroy themselves en masse for the sake of his own amusement.

Alas, it's not that simple ) Firstly, there were two very distinct "intellectual" positions involved (apart from mine, of course ) ). And, secondly, it wasn't very thorough - to do it thorougly, I'd need more time than I actually have. Finally, it's not fair - I am an econ prof. Though I haven't said anything that I believe to be wrong, I did leave gaps in arguments, through which any well-trained colleague (including myself) could easily drive a tank.

But that's the issue: To him, it's all an amusement. It's just a way to pass the time, and not to be taken at all seriously, except by the ones who do.

[Beet]

The above posts happens to stand as one of the most thorough destructions of an "intellectual" position I've ever seen here on AF.

I have nothing to add to that, but I will comment that opebo's desire to see the poor violently "rise up" against their masters, strikes me as yet another manifestation of his to see poor people, the rest of humanity, really, to destroy themselves en masse for the sake of his own amusement.

Here ag is in his own domain. Well, not quite, but close enough to it. As for opebo, for anyone who has been on the forum as long as any those that participated in this thread, should have learned not to take opebo seriously a long, long time ago.

[Storebought]

The above posts happens to stand as one of the most thorough destructions of an "intellectual" position I've ever seen here on AF.

I have nothing to add to that, but I will comment that opebo's desire to see the poor violently "rise up" against their masters, strikes me as yet another manifestation of his to see poor people, the rest of humanity, really, to destroy themselves en masse for the sake of his own amusement.

Here ag is in his own domain. Well, not quite, but close enough to it. As for opebo, for anyone who has been on the forum as long as any those that participated in this thread, should have learned not to take opebo seriously a long, long time ago.

His politics are caricatures, but his economics are taken quite seriously here. If it takes a professional to point out the Unsinn of his arguments, even if just casually, then more power to the professor.

[Gustaf]

The above posts happens to stand as one of the most thorough destructions of an "intellectual" position I've ever seen here on AF.

I have nothing to add to that, but I will comment that opebo's desire to see the poor violently "rise up" against their masters, strikes me as yet another manifestation of his to see poor people, the rest of humanity, really, to destroy themselves en masse for the sake of his own amusement.

Here ag is in his own domain. Well, not quite, but close enough to it. As for opebo, for anyone who has been on the forum as long as any those that participated in this thread, should have learned not to take opebo seriously a long, long time ago.

His politics are caricatures **, but his economics are taken quite seriously here. If it takes a professional to point out the Unsinn of his arguments, even if just casually, then more power to the professor.

**of an indwelling inhumanity, imho

If everyone agreed to ignore him, I'd be fine with it. What bothers me is the fan-base. They're ironically doing just what Opebo usually derides the poors for doing - worshiping their enemy.