A new sandpit for long side discussions, conspiracy theories, idees fixes and so on.
To be clear, the sandpit is for regular commenters to pursue points that distract from regular discussion, including conspiracy-theoretic takes on the issues at hand. It’s not meant as a forum for visiting conspiracy theorists, or trolls posing as such.
John Quiggin 
Moz in Oz says “Thought for the day: John Quiggin is busy working to present economics as a discipline not entirely populated by soul-less abominations,”
Agreed. Thanks JQ and Moz for pointing it out.
…” but over on Club Troppo Paul Fritjers takes the contrary position on that as well.”
Reword ” but over on Club Troppo Nick Gruen takes – on – the contrary position on that as well.”
Thanks Nick G.
If I was out host, anything further on CT re PF needs a big sand pit.
So. Here.
Message for Ikonoclast.
Ikon, you often use terminology from philosophy and I recall you asked some questions involving ‘rationality’, including in relation to economics and political economy.
Recently I have come across some work by a Professor of Philosophy by the name of Julian Nida-Rümelin, University of Munich, who published a book in 2006, titled “Demokratie und Wahrheit” (Truth). This topic has become very topical as the so-called populists gained attention.
I learned he also studied mathematics and physics, leading me to assume he would read math economics. From the Wiki entry I discovered his interpretation of some math econ concepts, such as expected utility theory, and his notion of ‘coherence’ (in math econ people talk about ‘logical consistency’ – same basic idea). It all makes sense to me.
I don’t know whether you are aware of his writings. Here is the wiki link, in case you are interested: https://en.wikipedia.org/wiki/Julian_Nida-R%C3%BCmelin (if this link doesn’t work, put the name into the search bar).
Ernestine Gross,
Thank you for the heads-up. From the Wikipedia entry, what Julian Nida-Rümelin writes about sounds very interesting. Alas, the Wikipedia entry is a thumbnail sketch of what is clearly a very complex approach. Also, I cannot read German so I cannot read his works unless they are translated into English somewhere. I will keep looking.
I see he is a “member of board of the Parmenides Foundation that is dedicated to fostering multi-disciplinary research on thinking at the interface of the natural sciences and humanities.” The “interface” reference is specific, crucial and hopeful, I believe. Interfaces are boundaries between systems in complex systems philosophy. Matter, energy and information sometimes cross boundaries between systems. Information can cross disciplinary boundaries as we know.
I cannot write much more now. Maybe I can find a few translations of his work. I can’t know whether I would agree or disagree with aspects of his work based on the Wikipedia entry alone. If I were to find he followed Cartesian dualism for example, and not strict priority monism, I would know straight away our approaches had parted company. If I were to find he was a priority monist, I would become much more interested.
“Neither existence monism nor priority monism are accorded much respect in contemporary metaphysics, nor are they always properly distinguished. Indeed, the tradition associated with these doctrines has long been dismissed as being somewhere between obscure and ridiculous. But there are serious arguments for monism. Priority monism may especially deserve serious reconsideration, of a kind that it is only now beginning to receive.” – Stanford Encyclopedia of Philosophy (Revised 2014.)
Modern science is now heavily implying the validity of priority monism: the entire cosmos as one system with the whole being prior to the parts (parts being sub-systems) and the parts developing by emergence and evolution. Hofstadter expressed the dilemma of modern metaphysics as follows. “The problem is to state a provisional conception of reality which is as far as possible continuous with the goal of traditional metaphysics and which nevertheless is of empirical import.”
With the benefit of accumulated scientific knowledge acting as philosophical hindsight, we can see now that we need to redevelop metaphysics so it is, as far as possible, contiguous with hard science. A philosophical method must be developed which generates inductions from hard science, carries them back into metaphysics and thence helps to connect metaphysics to physics. The basic building blocks of this connection will be matter, energy and information; their transfers between systems and their transformations in systems.
First however, a resolution must be found for the philosophical difficulties involved in examining the interactions of real systems and formal systems. The seeming ontological dilemmas presented by real system / formal system interactions become manifest in science and the humanities at the boundaries where investigations cross from the hard sciences (physics, chemistry, biology) into the soft or social sciences like economics. An analysis of what happens at system boundaries, including discipline boundaries, will be of vital importance to the investigations of such work. It is at the boundaries of systems that mass, energy and information are transferred; depending among other matters on the issue of systems being open or closed systems in thermodynamic terms.
That sums up part of what I am looking at. I will look for any English translations of essays by Nida-Rümelin and see if I can get a better handle on his thinking. When I have more time, I must write again about Laws and Rules (where “Laws” are Fundamental Laws discovered by science like the Laws of Thermodynamics and “Rules” are legal laws, regulations, customs, practices and etiquettes. Humans are partly programmable by such “Rules” and also partly autonomously “emergent” in their behaviors by “gaming” or avoiding rules. This is so despite their being made of atoms and physical physiological systems which obey the Laws of Thermodynamics, for example. Thus we dealing with “downward causation” as well as “upward causation” and apparent autonomy and “free will” as novel emergence.
This is complex stuff and I believe that conventional economics is misconstruing some aspects of ontological reality in this arena, particularly in relation to the difference between finding regularities in Law-bound behaviors and finding regularities in Rule-bound behavior AND then in inferring cause speciously (by inferring Law-bound behavior in cases where what is really occurring is rule-determined or rule-influenced behavior. This may come back to axioms versus “practical coherence”. “For example, the postulates of the von Neumann/Morgenstern utility theorem are now interpreted as rules of practical coherence and not as axioms of consequentialist optimization.” – Wikipedia.
As per Wikipedia, Nida-Rümelin is defintely thinking in this arena. I do see a danger of “extantist conservatism” in this thinking. That is to say a danger of being an adroit apologist, rationalising after the fact for the current system (capitalism as I call it). I might be wrong. Whether Nida-Rümelin is conservative or radical in this space I cannot know yet. Of course, I have a bias to radicalism precisely because I believe (nay I know to a high degree of scientific certainty now) that the current system is unsustainable and leading to catastrophic collapse.
As I say, I will have to come back to write about “Laws” and “Rules” and conventional economics’ flawed ontology as I see it.
https://www.pundit.co.nz/content/kindness-and-samfundssind
Brian Easton discussing the people-first compared to money-first approaches to covid, and how there’s a direct link between today’s mammonite cultists and the privatisation fan who believe everything is or can be made into a profit-oriented business.
George Monbiot alerts us to the fact that neoliberalism plus covid-19 equals total disaster.
https://www.theguardian.com/commentisfree/2020/oct/21/government-covid-contracts-britain-nhs-corporate-executives-test-and-trace
I will go so far as to predict a serious collapse of UK economy and society in the next 5 years. I think they are well and truly fooked as an Oirishman might say.
Re the not so great barrington paragraphs.
Is Tyler Cowan ok? Tyler Cowan and an exlibertarian on the “freelance musings of three dissident medical researchers” – the not so great barrington paragraphs.
“The Useful Libertarian Idiocy of The Great Barrington Declaration
…
“The dominant expert take on the Great Barrington proposal is that it blithely disregards the atrocious death toll that “herd immunity” strategies, such as the Declaration’s “focused protection” approach, are likely to produce. At the same time, the statement egregiously misrepresents the long-term damage the virus might inflict upon those it infects but doesn’t kill. And it seriously understates the danger of the virus to working-age adults.
“At this point, it’s not exactly surprising that the freelance musings of three dissident medical researchers would finda receptive audience in the White House. The Declaration is useful as agitprop for the Trump administration. It helps Trump’s proxies and media allies obscure the administration’s catastrophic failure by pretending that its combination of incompetence, neglect, and active interference with state and local disease control efforts was always part of an intentional, coherent strategy recommended by maverick epidemiologists who have broken from the narrow-minded herd.
“It’s interesting that the Declaration is the product of the American Institute for Economic Research (AIER), a dogmatically ideological libertarian organization with no real experience or expertise in epidemiology and public health policy. Though it is presented as an ideologically neutral public health proposal of infectious disease specialists with “grave concerns about the damaging physical and mental health impacts of the prevailing COVID-19 policies,” the Declaration would not have been sponsored and promoted by AIER if it did not serve its libertarian ideological agenda. What this ex-libertarian finds interesting–and damning–isn’t just that the Great Barrington Declaration was deemed useful as propaganda by the most illiberal, authoritarian government in living memory, but that it was embraced precisely because it thoroughly embodies some of libertarianism’s worst intellectual and moral tendencies.
“Tyler Cowen has written a persuasive and quietly devastating analysis of the Declaration’s many non-medical shortcomings at Bloomberg Opinion.”…
https://www.niskanencenter.org/the-useful-libertarian-idiocy-of-the-great-barrington-declaration/
What Tyler Cowan said;
“A Dangerous Libertarian Strategy for Herd Immunity
“The Great Barrington Declaration strikes the wrong tone and stresses the wrong points.
By Tyler Cowen
October 15, 2020
…
“To allow large numbers of people today to die of Covid, in wealthy countries, is akin to charging the hill and taking casualties two days before the end of World War I.
“Not only does the declaration fail to make that point, but if anything the rhetoric conveys a sense of “letting things take their course” — after the most vulnerable are segregated from society, of course. It strikes exactly the wrong tone and stresses exactly the wrong points.”…
https://www.bloomberg.com/opinion/articles/2020-10-15/great-barrington-declaration-is-wrong-about-herd-immunity
In case we dont know Will Wilkinson
…” I’ve been a United States politics correspondent for The Economist, a research fellow at the Cato Institute, …”
“I’m Will Wilkinson, Vice President for research at the Niskanen Center and a contributing opinion writer for The New York Times.”
https://willwilkinson.net/about-2/
“”
WHY BANKING IS AN OBVIOUS SCAM IMHO
When you pay a loan back to a bank either the monthly payment is fixed and the amount applied towards to principle starts off small and gets larger over time, or the amount of the principle is fixed in which the payments should become less over time, thought i am not a banker so do not quote me on that.
But if you pay back a loan to a brother or sister the entire amount of the payment is applied to the principle and when the princple is paid back then you worry about a fair return on the loan would be .
IS THIS WHY ISLAMIC BANKS FORBID INTEREST??
If so it seems that MUSLIMS are much more truthful about honest banking than Capitalist nations are.
We have accepted this Banking Bullshit for so long that it has gone unquestioned for centuries, except among Muslim fundamentalists.
I have never seen this issue addressed by Buddhists. Mohammad should be given a Nobel Prize for Economics.
The scam is not in the interest rates so much. It is in how the banks artificially spread out the amount of time that they claim that it took a person to repay their loan.
Their is nothing at all “natural” obout eiither common system. It is as Ikonclast says all only convention, or does he say convection? It sure as hell is not conviction, well considering the different meanings of that word it might acutally be appropraite.
But look the defenders say, no one forced you to go to the bank and ask for a loan. What a crock of shit lame excuse. Or, well because banking is more profitable than it would be under a family or Islamic type of system credit is easier to obtain. Is that a vaild excuse with currency bound by a gold or silver standard? Maybe, but certianly not in a fiat currency system.
The purpose of the American Experiment was to eliminate economic expoitation. Current banking methods are clearly a source of such expoitation. Wii YOU be better off if banking customs are changed? Not neccissarily. It depends on how much you currently behifit over all from the expoitation embedded in the overall system.
Honesty, it is really not all that hard. A person borrows 240,000 to buy a house at 2.4% interest. They pay back 1,000 a month. That means at the end of the year they owe 228,000 on the principle and 5760 in interest which should not be allowed to be added back in to the amount owed to the bank or else the bank is collecting interest on its interest. So at the end of the second year 216,000 in principle would be owed along with 5472 in interest. Then 204,000 along with 5184……………..
240,000 – 5760
228,000 – 5472
216,000 – 5184
204,000 – 4896
192,000 – 4608
180,000 – 4320
168,000 – 4032
156,000 – 3744
144,000 – 3456
132,000 – 3168
120,000 – 2880
108,000 – 2592
96,000 – 2304
84,000 – 2016
72,000 – 1728
60,000 – 1440
48,000 – 1152
36,000 – 864
24,000 – 576
12,000 – 288
So with banking done properly and honestly a person who borrows 240.000 and pays 1,000 a month will have the principle paid off in exacly 20 years. Then they have to pay the interest. That is the total of the 20 numbers which is the amount of interest due on the loan for that year. In this case it would be 60,480. Which means that payments would have to continue for 5 years and with a partial payment of 480 at the end of 5 years the loan would be paid off.
I plugged this data in to a loan calculator and first of all the monthly payment was 1,064 per month over 25 years. That is 19,200 more that one needs to pay a dishonest banker. That is almost 1000 dollars per year. For most of my adult life interest rates have been much higher meaning that the banks have raked in big money by collecting interest on top of interest.
Furthermore my example is very simple it simply charges interest on the principle owed at the beginning of each calander year based upon the principle that the money has not been paid back yet. But if the money owed is calcultated on the beginning of the each month the interest paid to an honest banker would be even less than in this example.
I owe a bit to Ikonclast to be able to reach this PROPER understanding of how banking should work if it were run for the benifit of society not the benifit of the bankers. It was his stress on there are no natural rules we make the rules and we call them conventions. OK a truely refined understanding is that method that I outlined really is the natural way to do it because that is how you would do it if it were your brother or even your cousin that your were dealing with.
Doesn’t anyone want to raise counterpoints about this? Such as, OK interest is collected on the interest. But, if interest was not collected on the interest the interest rates would just be raised a bit because banks need to make money to pay their expenses and if money is cut one way it will have to be made up another way.
Or look there has to be a penalty for burrowing money, that penalty could be a high enough interest rate or it could be a high enough tax becuase if people could burrow all the money they wanted and pay it back as slow as they wanted consumer demand would outstrip supply.
Or, Ok some of the business practices might be somewhat deceptive but as long as the same rules apply to everyone it is all going to work out the same in the end. If you want to live without banks then society is going to have to be run much more like a military unit. You will not be able to buy the house or the car (bicycle) that you want you are going to have to accept the one that the government gives you. But the government will have little incentive to take it away once it does give it to you.
Ok then what about government run banks. Government run because private banks do not risk their own money anyways when they make a loan. They risk other people’s money. And the loans are backed by collatoral from the borrower as well. Finally if a bank is run so incompetently that it fails it will get bailed out by the government anyways.
The largest skyscrappers in many cities are built to house the offices of financial institutions. Finance always wins in the end. More specifically the people who work in finance always win. Is their reward commenserate with the work that they do? IMHO, for the bank teller the answer is probably yes. For the bank board of directors the answer is probably no.
Back a bit to Islamic Financing. Early Muslims probably had little expirience with inflation of a currency.
Therefore a natural rate of inflation to them was probably 0. Therefore, it seems natural to me that it would seem natural to them that an honest interest rate on a loan would be 0%. If I recollect correctly for a Muslim a loan was more akin to stock purchase in an enterprise. A money lender became a partner in project. it the project was successful the lender was entitled to a share of the winnings.
It does not look like the weather is going to change much over the next 2 months in the Hymnaleahs.
Curt Kastens says NOVEMBER 11, 2020 AT 10:40 AM: “(1)IS THIS WHY ISLAMIC BANKS FORBID INTEREST?? …(2)Mohammad should be given a Nobel Prize for Economics.”
(1) Nope. It’s bigger than that, society wide, and rips off things much older. See:
Historical, Religious and Scholastic Prohibition of
Usury: The Common Origins of Western and
Islamic Financial Practices
https :// scholarship.shu.edu/cgi/viewcontent.cgi?article=1600&context=student_scholarship
“The legal origins on the prohibition of usury can be traced back to the Code of Hammurabi in 1760 BC. It is also frowned upon in Hindu law which predates 400 BC, even Plato spoke out against usury. This tradition carried into the J udeo-Christian-Islamic prohibition.”
(2) It would seem superfluous, but a Nobel Prize for Economics is as illusury as the supposed anti-usury fellow you mentioned.
Nobel was more grounded than that other identity, but he left economics for others to later ponder on too.
https://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economic_Sciences
“…While it is not one of the original Nobel Prizes established by Alfred Nobel’s will in 1895, it is generally regarded and often referred to as the Nobel award for Economics.[5] The prize was established in 1968 by a donation from Sweden’s central bank Sveriges Riksbank to the Nobel Foundation to commemorate the bank’s 300th anniversary.[6][7][8][9] It is administered and referred to along with the Nobel Prizes by the Nobel Foundation.[10] Laureates are announced with the Nobel Prize laureates, and receive the award at the same ceremony.[6]”
Curt Kastens says, NOVEMBER 12, 2020 AT 11:02 AM:
(1) “…if people could burrow all the money they wanted and pay it back as slow as they wanted consumer demand would outstrip supply”
(2) “…Ok then what about government run banks. Government run because private banks do not risk their own money anyways when they make a loan. They risk other people’s money. And the loans are backed by collatoral from the borrower as well. Finally if a bank is run so incompetently that it fails it will get bailed out by the government anyways.””
(1) It hasn’t outstripped demand as yet as many Earth’s worth of debt pile up. It’s paid back slowly by ever expanding debt.
(2) Fiat money. Government banks, private banks, both create new money from nowhere whenever they make loans. oodles of freshly created money for oodles of new debt. They need a fraction on deposit with the central bank to pay accounts with each other, but they can borrow fresh fiat money for that… Iceland didn’t bail the banks, the bankers, nor the responsible pollies – they all went down – but the depositors got their old balance placed in new bank accounts in brand new banks! Way to go Iceland! A rather proper democracy!
Svante,
Reference (1) from comment at 2:27,I think what is missing is that the debt does not trickle down which is why we do not see demand outstripping supply. But in the Real Estate Market we do see that in many urban areas the only people that can afford housing are the super rich. The so called wealth being created by expanding debt is only being enjoyed by a small percent of the population.
I will check out your link from (1) at 2:07 if I can. It looks like it might be the first really interesting thing that I have had to sink my teeth in to for a long time.
Curt Kastens says: NOVEMBER 12, 2020 AT 10:03 AM
Kurt,
Are interest payments made to cover opportunity costs of the lender? Do imposed interest charges make up for imposed lost opportunities?
See Cardinal Hostiensis treatment of usury/interest as being ok in 13 situations. The most important of those he found was that it can be seen as lucrum cessans, ie., as a PAYMENT FOR an OPPORTUNITY COST:
https://en.wikipedia.org/wiki/Usury#Medieval_theology
Prof JQ’s latest published book is about opportunity cost:
https://books.google.com.au/books?id=Ofx0DwAAQBAJ&lr=&source=gbs_navlinks_s