Economics, like physics before Einstein, has long believed the world behaves according to simple, linear rules. It assumes equilibrium, perfect information, and frictionless exchange.
For economics assumes none of those three things.
There are models where one, two or even all three are assumed in order to be able to look at some other influence, sure.
But, say, frictionless exchange. This was 50% of a Nobel:
The theorem states that if the provision of a good or service results in an externality and trade in that good or service is possible, then bargaining will lead to a Pareto efficient outcome regardless of the initial allocation of property. A key condition for this outcome is that there are sufficiently low transaction costs in the bargaining and exchange process. This ‘theorem’ is commonly attributed to Nobel Prize laureate Ronald Coase.
In practice, numerous complications, including imperfect information and poorly defined property rights, can prevent this optimal Coasean bargaining solution. In his 1960 paper,[1] Coase specified the ideal conditions under which the theorem could hold and then also argued that real-world transaction costs are rarely low enough to allow for efficient bargaining. Hence, the theorem is almost always inapplicable to economic reality but is a useful tool in predicting possible economic outcomes.
A Nobel awarded for pointing out that frictions exist in exchange means that the subject assumes frictionless exchange.
Ho Well.
He’s comparing himself to Einstein now
If only he spent more time reading and less time jabbing at a keyboard. Or any time reading, come to that.
He’s not really a Spud, is he? He’s a beautiful narcissus.
God he’s back on physics. I might not get through this, running low on whisky. He does know that Newton jointly invented calculus right? Or what “linear” means?
I must admit the physics analogies he is doing grate on me too. I technically have a lowly bachelor in physics, I went the engineering path for my career so I’m completely out of date, but even I can tell it’s just buzzword bingo to impress people. I can’t face looking at his actual posts, I just go by what I see here, but at least it looks like quantum isn’t involved this time.
Newton got things fundamentally right. Einstein wasn’t a fundamental rewriting, it was at the edges. It took us decades to check Einstein was right. It needed high speed, long-range aircraft and atomic clocks to prove the time effects of relativity.
This is his delusion, that he’s got some new economics. But the truth is, we pretty much got the rump of useful economics over 50 years ago. Adam Smith, Bastiat, it’s all broadly right. Then someone makes an observation where things don’t quite work and you get Pigou and Veblen. The Nobel prizes are doing this sort of work. And it’s the same with physics nobel prizes. They’re not changing the life of the average cab driver much.
Same with math. I think it’s pretty cool that Andrew Wiles solved Fermat’s Last Theorem. But it is really not much more use to the world than Tonya Harding figuring out how to do a triple axel. But, it adds to human knowledge and it might one day change the world.
Idk if I’d say special relativity was “at the edges”, it fundamentally changed our understanding of reality itself.
It only changed our understanding of reality for the very small number of people who understand relativity.
For practical purposes of anything observable without specialist equipment, Newtonian physics is sufficient.
Knowing that space and time are part of the same thing is philosophically quite profound, no? Newton’s work implies a Clockwork Universe, one as finely ordered as a master craftsman’s grandfather clock. Very neat and intellectually satisfying. Einstein started to lift the veil on how weird and wonderful this thing we call the universe actually is…
Tbf I used to think the Theory of Relativity was an explanation for Norfolk.
I get that. What I’m saying is that as a way to explain how the universe worked to people getting around by train or horse and carriage, it’s right enough. It’s not total bollocks like 14th century medicine or communism.
It needed a single astronomical observation of Mercury, performed in 1919. Newtonian physics could not accurately predict the position of Mercury, Einsteinian did.
Further experiments have confirmed Relativity to a greater precision – and falsified it in other areas (hence why we have Quantum Mechanics, which also fails predicting observations in other areas).
No, he got things almost close enough for government work, like slotting a NASA probe into Jupiter orbit. The orbit of Mercury, however, could prove problematic for long term space planning. The Newtonian problem with Mercury’s orbit was known since 1859, and decades of searching for a closer in planet followed (we can’t see it but we know it’s there due its gravity*). As well as his description having insufficient accuracy, Newton offered no explanation as to the cause of gravity.
Einstein provided both more accuracy and an explanation of cause. His ideas have held up well but there are enough questions to doubt that he was “fundamentally” right.
* See also “dark matter”.
He does realize that without those three assumptions central planning becomes even less workable than it is with them?
In other words, he’s arguing against his central thesis.
Of course he doesn’t, because he’s incapable of actually reasoning.
Hm. Is it possible he’s been replaced by an LLM trained on the Marxist catalogue?
I have wondered about that. Some of his recent postings seem more doctrinaire Marx than 21st century economist.
Off topic but FFS. Speaking to the Covid enquiry, former Education Secretaery Gavin Williamson admits mistakes were made “including the delay to school closures”.
I doubt a single life was saved by closing the schools, hundreds of thousands of kids had their education fucked and the only ‘mistake’ was not closing them sooner.
Lives were certainly lost (in all sorts of ways) as a consequence of the school closures.
I was in A&E yesterday getting an infected finger lanced (don’t ask) and a doctor came round offering flu jabs to the nurses (don’t get ’em). The nurse sorting me out also wanted a Covid jab. The doctor replied that they’re now only available to the over-75s, those in care homes, and the immunocompromised. About fucking time. Vaccination against respiratory viruses can’t work.
Tetanus jab? Scratch my finger on a rose thorn and I’m first in the queue, thanks.
Gavin Williamson not decorating a gibbet is a failure.
I can only presume he is still in possession of a great deal of compromising information on various senior Conservatives, possibly relating to activity of a dubious nature involving children, as I cannot see any other way by which he reached the prominence he did.
I dunno. I agree he’s useless, but have you looked at the competition?
I would agree he is far from alone in his ineptitude but the combination of extreme incompetence and preternatural thin-skinnedness was particularly striking – but I take your point, as with the current regime it’s a ministry of ‘none of the talents’
The only point of this covid inquiry is to channel hundreds of millions of quid to the lawyer scum.
Anyone of us here could have written the findings before the inquiry started: it will say that we should have locked down sooner, harder and for longer and the experimental mystery gene therapy jabs should have been mandatory for all.
I would agree – it will make Roland Freisler look objective, and the people involved in the entire COVID scam are more evil than he ever could have imagined anyone being. The likes of Whitty and Vallance and Ferguson need to be gibbet decoration as well (To quote the great Marius)
Have you seen what Jenrick is up to though?
I don’t trust him as far as I could spit a rat, but he’s got his finger on the pulse of public mood atm, better than any other politician including Nigel. He’s not a stupid man, while Williamson is a Nice-but-dim Tory Boy type
Looking back on Brexit, you had a party of MPs who just didn’t want it. They did the obligatory thing of getting it over the line, but they weren’t Brexit in spirit, which means that you get it over the line and then dump the grandfathered legislation, take advantages of new freedoms.
That’s going to be the same thing with the backbenches under Jenrick. They still want to be part of the bullshit like ECHR, the refugee convention, find the idea of telling non-citizens to fuck off home offensive because they’ve lived here a few years. They’ll barely do a thing. And if Jenrick pushes hard, they’ll boot him out and put some pissweak tory boy into the leadership. And it’s not like if McDonalds started serving Kale, where you can start going to Burger King instead. You’ll be stuck with it for 5 years.
You’ve actually made my mind up about joining and supporting Reform, because this is the FINISH HIM! moment from Mortal Kombat. It’s Frodo in the fires of mount doom holding The One Ring. Luke Skywalker needing to hit a target the size of a womp rat. If we don’t end the Conservative Party now, it’ll be another decade before we get a chance. They might be able to foist a load of bollocks on people. I’ve also just realised that I’m very close to a Reform MP. The local shop and chippy are in Danny Kruger’s constituency.
Economics this; economics that.
Thomas Sowell says a generally-accepted definition of economics is the study of the allocation of scarce resources that have alternative uses. That’s a definition of an empirical process.
Yes, as with physics it may become possible to study the behaviour of smaller and smaller particles, and they may behave differently to larger ones (of course they do: individuals behave differently to groups and usually have radically different incentives and constraints) but this remains an empirical study.
In Knowledge and Decisions (which I’m re-reading) Sowell addresses the decision-making processes behind the allocation of resources: who makes the decisions, on the basis of what information and knowledge, and to what end. His obvious and inarguable conclusions permanently shoot centralising cunts like Murphy to pieces but they never give up, even after being dismembered like Cleese’s Black Knight.
Oh, come on Tim, it was only a counterfeit Nobel.
“simple, linear rules”: the fucker hasn’t the least idea what “linear”means.
Oh god, he’s gone quantum again. i thought we’d be spared that.
What is interesting is the response from Sonja (Maybe Brigitte Neilsen) which deservces sharing because he looks a complete arse:
8 Spelling errors in two posts and complete failure to address the issues raised beyond reduction to insults. Par for the course naturally but goes to show just how thin-skinned he is
As are we all.
Bloody Hell, then A-level standards must be appalling.
Newton invents calculus to model non-linear phenomena, the Tater believes Einsteinian physics built on that Newtonian base is ‘linear’.
I wonder how much longer it’ll be before the Green party podcast comes out…seems like there is an awful lot of post production involved/ required.
“Welcome to the Green Party podcast. You are feeling sleepy …”
I can feel my boobs getting bigger as I type!
Sadly, middle age can affect men that way….
“like physics before Einstein, has long believed the world behaves according to simple, linear rules.”
Physicists were well aware of a fundamental problem with ‘the metric’. Such questions as ‘what would happen in a lab travelling quickly through space, indeed can we even talk of travelling quickly through space’
I mostly ignore anything to do with Spud because it’s not a good start to the day, but I thought I’d risk it today. I didn’t realise he’s started typing with his nose and his eyes shut. He must think the same way…