Ayn Rand Philosophy, Objectivism, Science, Self-interest

[a500lbgorilla]

Economics may model reality but you've got to admit it doesn't do it flawlessly. It can't be the only thing that informs your expectations. It's silly to suggest outloud "what if we were just all perfectly rational?" like this guy is.

The virgin world point is this idea about free markets being the absolute best solution. They are when the situation warrants them, but they can't always be created and they'll never last. My analogy was following the evolution of life - the free market of single celled organisms have become the mega-firms of flora and fauna. In the same way, markets will evolve into mega firms that can't really be honestly competed against.

Plus, a free market still has to exist in the greater world of nation-states.

Yes, but reality is not tied to what you are. The Aristotelian premise Gizmo discusses can exist regardless of ones perception. This looks to me to be why one can posit primacy (or even just relevance) of reason.

Oh absolutely. But you will never be anything other than yourself. You're enabled and limited by what you are. You can never interact or understand nature in any context other than as yourself.

Which is why its important to understand how the truth of the world changes as it's translated into your human understanding. This process is the precise reason why a primacy of reason will never exist. We just don't do that.

The only thing that understands nature in perfect terms is the reality of nature itself and your brain ain't the universe.

The evidence is overwhelming and the theory is rock solid and taught worldwide.

Just go ahead and share it then.

[NightGizmo]

Economics may model reality but you've got to admit it doesn't do it flawlessly. It can't be the only thing that informs your expectations. It's silly to suggest outloud "what if we were just all perfectly rational?" like this guy is.

I agree with you on this point, which is why I've diverged from Ayn Rand's ideas on economics and government.

I think we're pretty much in full agreement on the actual ideas, but we disagree on some definitions.

Objectivist metaphysics: basically, "reality exists independent of your perception and wishes". This is the bedrock of all the rest of her philosophy system. If you don't agree with this, the rest of the discussion isn't worth having.

Objectivist epistemology: Building on her metaphysical premises, this defines how people sense, perceive, and interact with reality and thought. There is an entire book on this topic, Introduction to Objectivist Epistemology, (it's dense but really interesting). The point of the book is that by perceiving reality and using our minds (especially logic and concepts), we can get to know reality. And knowing reality gives you control, as long as you follow the rules of reality ("nature, to be commanded, must be obeyed").

Objectivist morality: Building on the metaphysics and epistemology, she then defines the ideals that people should strive for. Which is summed up by "rational self-interest".

Her moral philosophy is stated as ideals, a personal code that you should try to live up to. But humans aren't perfect, so you also have to recognize that you're going to make mistakes, you're going to act irrationally sometimes, and sometimes even your concept of reality is wrong.

In our discussion, you're talking more about the study of human behavior/nature (and I agree with your observations). But just because people can act irrationally doesn't mean that they can't have goals to be less irrational.

[a500lbgorilla]

I agree with you on this point, which is why I've diverged from Ayn Rand's ideas on economics and government.

I think we're pretty much in full agreement on the actual ideas, but we disagree on some definitions.

Objectivist metaphysics: basically, "reality exists independent of your perception and wishes". This is the bedrock of all the rest of her philosophy system. If you don't agree with this, the rest of the discussion isn't worth having.

Objectivist epistemology: Building on her metaphysical premises, this defines how people sense, perceive, and interact with reality and thought. There is an entire book on this topic, Introduction to Objectivist Epistemology, (it's dense but really interesting). The point of the book is that by perceiving reality and using our minds (especially logic and concepts), we can get to know reality. And knowing reality gives you control, as long as you follow the rules of reality ("nature, to be commanded, must be obeyed").

Objectivist morality: Building on the metaphysics and epistemology, she then defines the ideals that people should strive for. Which is summed up by "rational self-interest".

Her moral philosophy is stated as ideals, a personal code that you should try to live up to. But humans aren't perfect, so you also have to recognize that you're going to make mistakes, you're going to act irrationally sometimes, and sometimes even your concept of reality is wrong.

In our discussion, you're talking more about the study of human behavior/nature (and I agree with your observations). But just because people can act irrationally doesn't mean that they can't have goals to be less irrational.

Yeah, I agree.

[a500lbgorilla]

Yeah, I agree.

So what is won for arguing so well? What is won for finding the perfect ideals?

[NightGizmo]

So what is won for arguing so well? What is won for finding the perfect ideals?

If you want to try to continually improve yourself, it's best to know the direction you want to move towards.

[a500lbgorilla]

If you want to try to continually improve yourself, it's best to know the direction you want to move towards.

gay

[wufwugy]

Economics may model reality but you've got to admit it doesn't do it flawlessly. It can't be the only thing that informs your expectations. It's silly to suggest outloud "what if we were just all perfectly rational?" like this guy is.

It models the reality you say it doesn't model as well. All the stuff you're talking about is markets. Whenever there is a price and a quantity, there is a market. Whenever we talk about things that are markets, it is the best idea to use the best models we have that deal with markets.

The virgin world point is this idea about free markets being the absolute best solution. They are when the situation warrants them, but they can't always be created and they'll never last.

Regardless, free markets are better at producing preferred results of abundance and dynamism than less free markets.

My analogy was following the evolution of life - the free market of single celled organisms have become the mega-firms of flora and fauna. In the same way, markets will evolve into mega firms that can't really be honestly competed against.

You can't compete against a market. Competition only happens within markets. Firms compete against firms. The market for coal doesn't compete against the market for natural gas. A lot of stuff that you're saying is not in a market actually is. As long as we're talking about prices and quantities (trade), we're talking economics and should use economics.

Just go ahead and share it then.

The China "miracle," many other emerging economies -- often initialized into BRICS, MINT, PIIGS (you may have seen those before), Hong Kong vs China, and many others. Every economist (except one or two kooks; there are always kooks) claims the growth of prosperity and empowerment of these poor come from neoliberal reforms made by their governments. There are multitudes of "natural experiments" on this that are running now and have been for a while. The Hong Kong vs China one is particularly interesting to some economists because the two territories are as close to the same as we're gonna get with one difference being in their degree of neoliberal reforms. The results are consistent with everywhere else and with the theory.

As for the theory part of your comment, it mostly has to do with how regulations change prices, costs, and quantities in supply and demand models. It's been a while since I've constructed the models themselves, so I don't remember exactly how to show it, but I can give examples. When you introduce a regulation to a market that reduces profits, you reduce its dynamism by reducing entry from new firms and increasing exit of existing firms. The counter is when you eliminate a regulation; entry is increased and exit is decreased. Entry and exit always happens on the margins, so regulations negatively affect the "more able than the rest" the least and affect the "least able than the rest" the most.

It's not a coincidence that the China miracle, where the people "least able" have risen faster and in greater quantities than pretty much ever seen before has come on the backs of the Chinese government's near complete deregulation of street enterprise.

[wufwugy]

It's silly to suggest outloud "what if we were just all perfectly rational?" like this guy is.

I forgot to add that rational behavior in economics is different than the reason the interviewee discusses. Rational behavior in economics is an assumption that people try to maximize their utility. Utility has a different meaning in economics; it's along the lines of "happiness," but it's best to not think of it in the colloquial terms we do. Rational behavior in economics has nothing to do with thoughtfulness. The reason the interviewee discusses is all about thoughtfulness.

[a500lbgorilla]

I forgot to add that rational behavior in economics is different than the reason the interviewee discusses. Rational behavior in economics is an assumption that people try to maximize their utility. Utility has a different meaning in economics; it's along the lines of "happiness," but it's best to not think of it in the colloquial terms we do. Rational behavior in economics has nothing to do with thoughtfulness. The reason the interviewee discusses is all about thoughtfulness.

I know this. I also know the idea of utility is nonsense for one simple reason - if ever any rational agent made a choice that didn't maximize his utility, you'd never know. And there's no reason to believe that people must always maximize utility.

[wufwugy]

I know this. I also know the idea of utility is nonsense for one simple reason - if ever any rational agent made a choice that didn't maximize his utility, you'd never know. And there's no reason to believe that people must always maximize utility.

If this is nonsense, then all science is nonsense. Everything uses fundamental assumptions that are not testable.

Example: fundamental assumption of science: repeatability of phenomena. Nobody can prove this assumption. Every experiment anybody does, its relevance can to other experiments and to descriptions of nature can only be assumed. Nobody actually knows. Rational behavior theory is on par with this; economists assume what appears to be a fundamental "truth" so they can move forward just like chemists and physicists do in their respective sciences.

If we assume that people don't maximize their utility, then, well, I don't know what happens to economics. The field probably becomes nonsensical.

[MadMojoMonkey]

If we assume that people don't maximize their utility, then, well, I don't know what happens to economics. The field probably becomes nonsensical.

Wow. This might actually be the fundamental reason that economics seems so unrefined to me.

I can think of dozens of examples of people NOT acting to maximize their utility right off the top of my head. (Or maybe I still don't understand your notion of utility.)

In science, if even 1 counter-example can be shown, then the assertion is false. It is discarded and sometimes replaced with a new idea.

OK.

So explain suicide to me. How is this a maximization of utility?

[wufwugy]

So explain suicide to me. How is this a maximization of utility?

Easy: the person feels it's better to be dead than to be alive. Utility maximized.

Rational behavior has nothing to do with facts or wisdom. It has only to do with perceptions.

[MadMojoMonkey]

Easy: the person feels it's better to be dead than to be alive. Utility maximized.

Rational behavior has nothing to do with facts or wisdom. It has only to do with perceptions.

This seems like a naive interpretation of my question, presupposing that everyone who commits suicide thinks it's for the best.
Or at best, it strips the definition of utility down to a wholly subjective meaning, which cannot be objectively evaluated to predict behavior.

The point of economics is still to make predictions, yeah?
How does this definition of utility support your ability to make predictions?

How do you explain self-destructive behavior? People do things which are actively done because of the anti-utility, right?

[NightGizmo]

If we assume that people don't maximize their utility, then, well, I don't know what happens to economics. The field probably becomes nonsensical.

Have you read Thinking, Fast and Slow by Daniel Kahneman? He won a Nobel prize in economics for basically proving that people are not rational agents that always try to maximize their utility.

[wufwugy]

Have you read Thinking, Fast and Slow by Daniel Kahneman? He won a Nobel prize in economics for basically proving that people are not rational agents that always try to maximize their utility.

As far as I can tell, what he did was help change modelling for how utility is maximized. For example he showed holes in the expected utility hypothesis, which says that the value of a choice is the statistical expectation of the valuations of the outcome of the relevant choices. This doesn't suggest utility isn't maximized, but that valuation is assessed differently than earlier models suggest.

There are versions of rational choice theory that are testable, and they're all flawed. I don't know much about the specific models, and have instead been discussing the assumption behind the theory behind the models. Kahneman didn't "disprove" rational choice theory, but gave more insight into it. Rational choice theory has been used increasingly over the years, presumably because the models "work" even though they don't work perfectly.

[MadMojoMonkey]

If we assume that people don't maximize their utility, then, well, I don't know what happens to economics. The field probably becomes nonsensical.

Well, I assume you don't believe that economics is nonsensical, so..

How can you resolve that "maximize their utility" essentially means "do whatever they feel like doing?"


Or if it doesn't need resolving... can you elaborate (like... a bit... not an essay)?