Anti-Capitalist Sentiment (with some morality)

[MadMojoMonkey]

Yep. If the theory on this is wrong, the stock market crashes in five, four, three, two, one...

That's not the question. You're saying that not only is this theory true within its tested domain, but therefore true beyond its tested domain, and if you don't agree, then you're a fool, a liar or both.

Its still just bro-talk and echo chamber logic.

It's equivalent to me saying, "This is physics on my side of the event horizon, so it must be the physics on the other side of the event horizon." It may be true. It may not. Until and unless it can be tested it's just speculation.

I don't understand the question.

How can any postulate in economics have "all else being equal" when economic systems are well described as complex feedback loops?
I.e. any change to a large/developed/complex economic system can have repercussions throughout the system.

How can part of your assertion be that there will be no repercussions to the system aside from this one thing?

If I have observed the law of demand not holding up, then the food industry fails in five, four, three, two, one...

These flip answers just shred your credibility, btw.

You can't make specific predictions with this law, so you wouldn't know if you did or did not observe it. You can always apply the law after the fact and say it was there, even when you learn new information which changes your perception of the demands at play which led to the same historical outcome. When a theory describes a thing and its opposite without nuance, then it may be a fun game to play, but it might as well be astrology.

You keep dodging the topic of minimum wage and how you can possibly apply this method of assigning a metric to human emotions, or make any specific prediction about the results of anything related to minimum wage.

I think there is a misunderstanding on the things I'm saying. I'm not a big fan of econometrics. However my opinion on it is forming as I learn more about it.

I do not know much about how the law of demand and the not-exactly-a-law of supply have been created, but you're free to research it. You'd probably understand that stuff better than me, since its mathy. What I do know is that my "if such n such, then failure in five four three two one..." comments are not meant to be snide. If supply and demand are wrong, the economy would not function the way it does now, big league, bigly. Most economic principles (at least as far as I can tell) are derived from supply and demand. When we do comparative statics by applying minimum wage to the model, we get decreased quantity demanded for labor.* The law of demand and not-exactly-a-law of supply have been verified scientifically so thoroughly that they're called laws (except supply, which has one small caveat in some hypothetical situation that I don't think has been conclusively observed in the real world, but that can exist theoretically).

*Previously I said "demand" instead of "quantity demanded." The comparative statics with ceteris paribus shows decrease in quantity demanded (movement along the curve). However I think it is correct to say that the eventual effect is a decrease in demand (shift of the curve itself).

OK, so if you admit you don't understand it, then stop saying barely understood words as though you have real understanding about these True Facts.

If (IF) supply and demand are wrong (on that scale), then the big bigly economy is still what it is, just poorly described, you doof.

I'm saying this thing you hold so highly, as these ideas of supply and demand are fine and work in retrospect on large scales. I'm also saying that those large scales are not the only scales and other things go on in the smallest scales, like households, which are in a very real way affecting the largest scales.

Is it remotely appropriate to assign notions of supply and demand to a family raising a newborn baby? They aren't motivated by economic factors and their values are nowhere treating each other as capitalist resources... well, maybe in the stressful moments, a bit... but that's not their true feelings or best responses. It's not about getting their economic return when they teach the child to read. Your law of supply and demand does not describe these interactions, which are clearly an exchange of value between humans.

Furthermore, if I may bring it back on to minimum wage. Vis a vis the human emotional need to help other people in altruistic ways, is minimum wage a way that society decides to bargain on behalf of those who lack the means, capability or know-how to bargain for themselves? Is it a means whereby society decides that we hold ourselves to a standard where just because someone isn't begging for enough money to live in our society, but are working within the system to try to do so, that doesn't mean that they deserve to starve or die of a curable illness?

Does supply and demand describe this, too?

[wufwugy]

That's not the question. You're saying that not only is this theory true within its tested domain, but therefore true beyond its tested domain, and if you don't agree, then you're a fool, a liar or both.

It's equivalent to me saying, "This is physics on my side of the event horizon, so it must be the physics on the other side of the event horizon." It may be true. It may not. Until and unless it can be tested it's just speculation.

The basketball bouncing on Mars is a fitting analogy. Physicists have great reason to believe that what they know about science is different past the event horizon, but they do not have reason to believe that what they know about gravity on Mars is different than current theory (at least not by more than very tiny differences).

How can any postulate in economics have "all else being equal" when economic systems are well described as complex feedback loops?

It's essential to determining causality. Physicists deal with the same thing. When experimenting, all else must be unchanged even though the physical world is complex. If this isn't the case, confounding variables arise.

I.e. any change to a large/developed/complex economic system can have repercussions throughout the system.

This is a reason why econometric tools are pretty bad at finding effects of minimum wages in the real world.

How can part of your assertion be that there will be no repercussions to the system aside from this one thing?

I don't assert that. In the real world we could see quantity demanded of labor increase after a minimum wage is instituted even while increasing the price of labor decreases the quantity demanded of labor, but it would be because of other variables that changed with the minimum wage.

These flip answers just shred your credibility, btw.

I'll admit the style probably is not persuasive (I was drinking some whiskey), but the statements are correct.

You can't make specific predictions with this law, so you wouldn't know if you did or did not observe it.

We can and have. The law is empirical.

You keep dodging the topic of minimum wage and how you can possibly apply this method of assigning a metric to human emotions, or make any specific prediction about the results of anything related to minimum wage.

I'm answering the question, just apparently not well.

OK, so if you admit you don't understand it, then stop saying barely understood words as though you have real understanding about these True Facts.

My understanding of how scientists came to determine the law has no bearing on whether or not I am allowed to explain what it means.

If (IF) supply and demand are wrong (on that scale), then the big bigly economy is still what it is, just poorly described, you doof.

The laws are probably wrong in very small ways. If they're wrong enough that price of labor increases, when all else is held constant, would increase the quantity demanded of labor, then things would look very different than they currently do. Nonsensically different and there would be no economy. It would be as nonsensical as if physicists were wrong enough about gravity that mass actually repels.

Is it remotely appropriate to assign notions of supply and demand to a family raising a newborn baby?

Yes they apply to everything that involves a decision. As the cost of doing something regarding your baby increases, the desired amount that you want to do that things decreases, on average and all else kept equal.

They aren't motivated by economic factors and their values are nowhere treating each other as capitalist resources... well, maybe in the stressful moments, a bit... but that's not their true feelings or best responses. It's not about getting their economic return when they teach the child to read. Your law of supply and demand does not describe these interactions, which are clearly an exchange of value between humans.

http://www.econlib.org/library/Topic...economics.html

Furthermore, if I may bring it back on to minimum wage. Vis a vis the human emotional need to help other people in altruistic ways, is minimum wage a way that society decides to bargain on behalf of those who lack the means, capability or know-how to bargain for themselves? Is it a means whereby society decides that we hold ourselves to a standard where just because someone isn't begging for enough money to live in our society, but are working within the system to try to do so, that doesn't mean that they deserve to starve or die of a curable illness?

It certainly is society bargaining on the behalf of others. Bargaining badly.

[Poopadoop]

The problems I see with economics as a discipline are threefold (and bear in mind I'm no expert, so take this with a grain of salt):

First, it seems to have at its core the idea that humans are rational creatures who optimize their choices when it comes to money, and thus will behave in predictable ways. In contrast, there's ample evidence that people are irrational in many situations. It's a very shaky foundation.

Second, it's trying to explain a chaotic system. The number of variables and their interactions are so complicated as to be nearly impossible to model, especially when no-one understands the nature of the variables or their interactions in detail.

Third, the sum of the first two problems is that you end up with a discipline where opposing models can have equal theoretical merit, and can be argued for equally convincingly. That makes it interesting and frustrating at the same time, and the overall impression is that neither side really understands things as well as they claim to.

[wufwugy]

First, it seems to have at its core the idea that humans are rational creatures who optimize their choices when it comes to money, and thus will behave in predictable ways. In contrast, there's ample evidence that people are irrational in many situations. It's a very shaky foundation.

Economists are the worst messengers I've come across. "Rational" means something different to them than its usage anywhere else. I recommend not getting hung up on the word. Economists account for every kind of behavior they can.

Second, it's trying to explain a chaotic system. The number of variables and their interactions are so complicated as to be nearly impossible to model, especially when no-one understands the nature of the variables or their interactions in detail.

The supply and demand model has been wildly successful. But yeah, more complex things are very hard to model.

Third, the sum of the first two problems is that you end up with a discipline where opposing models can have equal theoretical merit, and can be argued for equally convincingly. That makes it interesting and frustrating at the same time, and the overall impression is that neither side really understands things as well as they claim to.

At least at the supply and demand level, I don't know of any models that perform nearly as robustly.

[Poopadoop]

Economists are the worst messengers I've come across. "Rational" means something different to them than its usage anywhere else. I recommend not getting hung up on the word. Economists account for every kind of behavior they can.

This doesn't seem wildly different to what I would expect, it only makes it more encompassing than just being about money:

A rational behavior decision-making process is based on making choices that result in the most optimal level of benefit or utility for the individual. Most conventional economic theories are created and used under the assumption all individuals taking part in an action/activity are behaving rationally. Rational behavior does not necessarily always involve receiving the most monetary or material benefit because the satisfaction received could be purely emotional.

Read more: Rational Behavior Definition | Investopedia http://www.investopedia.com/terms/r/...#ixzz4MRh1z5m0
Follow us: Investopedia on Facebook

People make bad decisions all the time, economically and otherwise. Look at all the things where people don't even understand what rational behavior is, like the Gambler's Fallacy.

So it's clearly a very caveat-ridden assumption that doesn't belong at the core of a serious theory. No economist has ever come up with a good explanation for these irrational behaviors afaik.

[wufwugy]

This doesn't seem wildly different to what I would expect, it only makes it more encompassing than just being about money:



People make bad decisions all the time, economically and otherwise. Look at all the things where people don't even understand what rational behavior is, like the Gambler's Fallacy.

So it's clearly a very caveat-ridden assumption that doesn't belong at the core of a serious theory. No economist has ever come up with a good explanation for these irrational behaviors afaik.

Investopedia can be confusing regarding economics at times. Economists use very confusing language that is different outside of economics. That link does not give the right impression of what rationality in economics is. If it is confusing, don't worry, economists are major dummies at naming things.

In economics, rationality is merely an assumption that people want what they want and that they want more of what they want as opposed to less of what they want. All the examples one can think of "irrational behavior" still fall under this assumption. Economists used a very misleading word to describe this assumption. This is the profession that put the output on the x axis. Believe me, they are the absolute worst messengers.

Do you have any questions on this?

[Poopadoop]

In economics, rationality is merely an assumption that people want what they want and that they want more of what they want as opposed to less of what they want.

How does your definition differ from the one I quoted? 'People want what they want and want more of it' is just a colloquial way of saying they try to maximize their benefit/utility.

[MadMojoMonkey]

The basketball bouncing on Mars is a fitting analogy. Physicists have great reason to believe that what they know about science is different past the event horizon, but they do not have reason to believe that what they know about gravity on Mars is different than current theory (at least not by more than very tiny differences).

No. Physicists have no reason whatsoever to think physics is different on the other side of an event horizon. We have no evidence or data on those locations. Every other place we have gathered data, though, physics is the same. So there's an established pattern of same-ness in physics which is independent of location. So, according to your reasoning w.r.t. minimum wage, we have reason to believe physics should be the same. We can guess, but we can't - in good faith - assert those guesses as physical laws.

It's essential to determining causality. Physicists deal with the same thing. When experimenting, all else must be unchanged even though the physical world is complex. If this isn't the case, confounding variables arise.

In physics, we have the luxury of "perfect" control groups in our experiments. When we say, "all else is unchanged" we mean, "look right there where we have the identical setup as here, but over there we do NOT do the thing we do over here. Observe the difference? It does that every time, in a rigorously predictable way." Sometimes that rigorous predictability involves probability distributions, and that's a bit odd to say it was a rigorous prediction, but it truly is. When we define the probability distribution we expect, then show it resolve after many repeated, identical experiments, that's a rigorous prediction.

You cannot do that in economics, and therefore your propensity to compare economic laws to physical laws is, again, false equivalence. The nature of physical law is not the same as the nature of economic law.

... and what bothers me is that it doesn't bother you that you see an equivalence between these very different things.

This is a reason why econometric tools are pretty bad at finding effects of minimum wages in the real world.

If you think they're bad, then why do you cite them as a reason to believe what you believe about minimum wage?

I don't assert that. In the real world we could see quantity demanded of labor increase after a minimum wage is instituted even while increasing the price of labor decreases the quantity demanded of labor, but it would be because of other variables that changed with the minimum wage.

You just said, "if what I said will happen doesn't happen, I'm still right about what I said, but the thing I stipulated wouldn't change - which is the foundation of my argument - wasn't controlled." Which is fine, but you cannot possibly expect to control that OR expect it to hold on its own without an active control. These together strip any meaning from your arguement.

I'll admit the style probably is not persuasive (I was drinking some whiskey), but the statements are correct.

I thought something was up.


... and no, they're not, as I have illustrated.

That's like me saying, "If QM is wrong then atoms don't exist." It's nonsense. The atoms in the periodic table exist regardless of any ideas in humans' heads. Just as economies will exist even if it is shown that the current understanding is garbage.

We can and have. The law is empirical.

No, you can't. No, you haven't. Show me your metric for human emotions and I'll show you a sheet of culturally biased assertions that only apply in microcosms.

That's not what "specific prediction" means.

That's not what "law" means in physics, but maybe what law means in a legal sense.

The economic rules are soft, the predictions vague. Calling them laws is a bastardized use of the word, even in the legal sense.

My understanding of how scientists came to determine the law has no bearing on whether or not I am allowed to explain what it means.

WTF? Pull your head into this space, man. I'd never, ever, in a bazillionplex years assert what you're allowed to do.
JKDS can do that. He enjoys thinking about morals and civil codes.

I'm not telling you you shouldn't say the things. I'm saying that claiming to someone else's expertise without your own observations and research to back it up is the opposite of science.

The laws are probably wrong in very small ways. If they're wrong enough that price of labor increases, when all else is held constant, would increase the quantity demanded of labor, then things would look very different than they currently do. Nonsensically different and there would be no economy. It would be as nonsensical as if physicists were wrong enough about gravity that mass actually repels.

This paragraph is designed to convince me to agree with you, but not compel me to agree with you.

The goal of science is to not let any arguments like this sway what you understand.

The fact that you put these ideas out in the same thought as your reference to physics seems to indicate that you conflate the soft guides in your field which are glorified by calling them "laws" with other ideas which are called "laws." The specificity of predictions that can be achieved in other scientific fields is far and away more precise than any of the soft sciences.

Conflating the weight of various scientific laws as identical is the real nonsense, here.

Yes they apply to everything that involves a decision. As the cost of doing something regarding your baby increases, the desired amount that you want to do that things decreases, on average and all else kept equal.

I can't wait until you have kids.

The point is... there are exceptions to what you just said, but you said it as thought its unequivocal, and that's why your credibility is pretty low on economics. I'm meeting more economists at work and the conversations are very different. They are ready to identify the complications with the rigid assertions you use.

http://www.econlib.org/library/Topic...economics.html

That page contradicts itself a dozen times, but is more of a history of defining economics. Is your point to show me that even the definition of economics is not a rigidly true statement?

'Cause that's what I took away from that link.

It certainly is society bargaining on the behalf of others. Bargaining badly.

More echo-chamber talk.

You have yet to convince me that you have an informed position on this topic.
I still do not agree with your assertion that having a minimum wage has a negative affect on productivity.


***
whew... there went an hour of my time...

I can't keep this up.

[wufwugy]

Hey MMM I'll do you a solid and leave it there. I think we're mostly talking about different things anyways.