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The wilfully ignorant?

from Robert Locke and David Taylor

Robert Locke

People who cling to the idea that the world is flat, that it was created in 2004BC, that the sun revolves around the earth or that neoclassical economics is true are the wilfully ignorant.  Among them, the last are of particular interest to the bloggers here. The argument the neoclassical economists use to justify remaining in business (that their critics have not come up with a replacement to their science) is spurious but also curious.  It is curious because neoclassical economists wilfully ignore those who have tried to do something about it.  I offer as proof the curious case of the overlooked Swedish economists.

I ran across them in the 1990s when considering the revolution in Information Technology (IT).  The IT revolution in a few decades transformed every aspect of our economic and business – indeed every aspect of our daily life.

Gunnar Eliasson , one of the Swedish economists who sought to make economics relevant as a discipline to the new world, noted in a comment about the transformation the IR had on organizational life, that he had conducted a series of interviews of managers carried out in 50 firms between 1965 and 1975, wherein the predominant characteristics of management behaviour  for them “were short-term and long-range planning and a strong belief in repetitive environments, forecasting and centralized leadership of standardized production.”  But when he interviewed managers in 50 firms between 1985 and 1995, 15 of them being in Information Technology, he noted that “out had gone reliance on detached analytical thinking in executive quarters, in had come experimental behaviour…the distinction between uncertainty and risk.”

He called the second environment, “the Experimentally Organized Economy.”  It is experimental because entrepreneurs with several possible options “never know them all; even though they have stumbled upon the absolute best solution, they will never know it because the knowledge base is always insufficient.  The business manager will never feel safe, and will always have to recognize the possibility of coming out a loser.”  In this EOE failure need not be attributed to managerial ineptitude, as it would in a “full information economy,” but can come from unavoidable risk of the situation changing.  Failure and correction to avoid it consequently have to be considered to be a normal business experience – one from which entrepreneurs learn, as in any experiment.

In an EOE, management behavior has changed from that encountered by Eliasson in firms during the first interview period.  Managers not only moved from a “full information economy” to one of “information uncertainty,” but the kinds of knowledge used in entrepreneurial decisions is obtained differently.  In the “full information economy” it is gained formally.   In the EOE, it is more tacitly acquired skills and innate ability that count.  Understanding, observation and judgement replace knowledge. (These quotes taken from Eliasson’s work are given pp. 2-3 in RR Locke & K. Schoene (2004) The Entrepreneurial Shift. CambridgeUniversity Press.

Many people have developed ideas that economists should have found useful to a reassessment of economic thought – Dominique Turcq’s group at the Boostzone Institute in Paris, for an instance, and Dave Taylor’s information system interpretations of the economy offered here.

Neoeconomists might (although they shouldn’t) feel justified in overlooking these “noneconomists”.   The Swedish group behind the development of the idea about EOE, however, are economists.  Moreover, they have specifically addressed economists because of what they perceive to be the urgent need for neoclassical economics to adapt its thinking to economic reality.

Specifically in 1998 the Swedish group made a determined effort to convince economists to adapt.  They invited scores of economists all expenses paid to a three day conference in Stockholm to examine the state of economics.  Lots of Americans came, the food was excellent, conference organizers leased a special train in which special tables for meeting were set-up, for a trip of all participants to visit, the oldest joint-stock company in the world, and the event closed with a gala dinner-dance in the beautiful museum that housed the “Vasa,” the 17th century ship reclaimed from the deep (like the Mary Rose).

The hosts, I suspect, did not get much of a return from the economists for their investment.  The American economists I spoke with there, acknowledged, almost without exception, that neoclassical economic analysis could not deal with the new realities of the EOE. But they equally did not suggest how economics could be reformed for it to be relevant.  Nothing, moreover, is heard about Eliasson and his colleagues in this blog concerning their suggestions.  People I ask have never heard of them.

Why?  This seems to be a case for neuroscientists or for the psychiatrists’ couch.  Or do bloggers think otherwise?  I asked analyst blogger Dave Taylor for his reactions.

David Taylor

My reaction is that neoclassical economics is not about the economy but about finance: costs or prices linking supply and demand.  The experimental skills discussed by Eliasson are simply assumed to exist to be bought by investors or chief executives, leaving economists seeing CEO’s as the managers and skills in matching “just in time” physical supply and demand as irrelevant.  We linguistically ignorant Anglophones, of course, are also notorious for thinking we know better than “foreigners”.

Eliasson’s position is somewhat closer to my cybernetic (navigational) model.  His entrepreneur is sailing in a sea where he can only imagine the port, can only see what’s coming a short way ahead and can only determine errors in his expected position retrospectively (after drift has had time to happen).  This wasn’t obvious in the earlier period.  Neoclassical economists who have never been to sea in a small boat still think owners decide the captain’s schedule and all the captain has to do is plot the course accurately. Their model makes no provision for going off course.  What we are seeing now are Titanic corporations going full steam ahead for golden ports, oblivious to the effect of this on the crew, the fuel supply and small boats in the same seas, and to drifting into dangerous waters where there is a good chance of being sunk by an iceberg.

Read Eliasson’s paper at Industrial Dynamics and Endogenous Growth to see what he meant by experimentally organized economy and competence blocs.   A few sentences linking this perspective with Smith’s specialisation, Marshall’s industrialisation, the early Schumpeter’s creative destruction and their exclusion by the “closure” of Walras’s model increased my insight more quickly than anything for years.  In terms of my steering model I have to agree with him: the place to find competent captains. steersmen, navigators and lookouts is not in the colleges but among the sailors of small boats.

For reasons too deep to go into here, I don’t agree with Elaisson’s theoretical starting point of “state spaces”:  the economy is about flows, not states, and it is the legal shapes of its spaces rather than the size of them which influence behaviour.   Law is information, and information science is not about the meaning of words but about reliable ways of looking up meaning in a dictionary, or locating a book in a library.  Traditional library classifications based on subdivisions of content tend to be ambiguous, but Ranganathan’s classification based on abstracting whole dimensions of content enables meanings to be uniquely encoded as positions in space-time (much as a three-dimensional house can be detailed on three two-dimensional drawings).  The point of this is that economic theory doesn’t have to look like neo-Classical equations; it can be encoded as iconic images in diagrams and as Eliasson is rightly implying, encoded as skills and capabilities in the structure of brains and technology.  Nor need the economy look like it does now.

My term ‘iconic’ incidentally came from K E Boulding’s The Image, he being the economist who brought the concept “Spaceship Earth” into economics, though I gather he didn’t invent that.  My point about diagrams (making the structure iconic rather than inferred) is that one can hang analogous interpretations (theories) on it and learn from them all, much like perfecting and adding harmonic content to a musical melody.  I must point out, though, that Eliasson himself hasn’t made structure iconic, obscuring any reference he may have made to the purpose of the economy from the point of view of its different participants.  But good stuff; he has made explicit his own purpose of accounting for growth in a phase of the economic process distinct from the neoclassical fixation on production and sales.

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  1. August 6, 2013 at 11:51 am | #1

    No sorry, the key point is: neoclassical economics is not about humans, but about robots.

    • Paul Schächterle
      August 6, 2013 at 12:36 pm | #2

      I would say it isn’t even about robots. It isn’t about anything real, it is just false.

      • August 7, 2013 at 5:34 am | #3

        In 1988, Robert Lucas wrote in a paper on the dynamics of development:

        “This is what I mean by the ‘mechanics’ of economic development – the construction of a mechanical, artificial world, populated by the interacting robots that economics typically studies…”

        Economic forecasts are possible only when human can be modeled as robots. All forecasters, neoclassical, post-Keynesians, etc. all have to make the “humans as robots” assumption, with robots being “rational” of course.

  2. Hawkeye
    August 6, 2013 at 2:27 pm | #4

    The only true scientist to have studied economics was Nobel Chemist Frederick Soddy, yet his views were met with silence or contempt:

    “It was indeed a revelation to the author, accustomed to think of the battle for liberty of thought in scientific matters as having been fought and won centuries ago at the time of Galileo and the Inquisition, to find that in economics, as distinct from physics, it has not yet been won at all… If economics were really a science, it would not need to protect itself from criticism by a conspiracy of silence. A responsible criticism would in any scientific subject be met with instant response, and not by the ostrich policy of burying the head in the sand in the hope that that will thereby choke the ears and throw dust in the eyes of the pursuer also.” F. Soddy: ‘Wealth, Virtual Wealth and Debt’ (1926) p292

    Soddy rightly argued that the study of economics had been reduced to little more than the subject of trading, hence he frequently described it as Chrematistics (see http://en.wikipedia.org/wiki/Chrematistics ), rather than flatter it with the term Economics. This was because neoclassical economists had avoided and obfuscated the main responsibilities of economics; which was to explain the origins of absolute wealth, and to debate the fair distribution of it. Topics which once were the focus of classical economics (or political economy as it was known back then), but which were waylaid, even before his time.

    To Soddy, real wealth has to obey the laws of physics whereas money and debts are merely important social constructs. Paradoxically, neoclassical economics seems to inhabit a parallel universe where wealth can be created at will, money is irrelevant, yet debts are a tangible reality!


  3. August 6, 2013 at 2:40 pm | #5

    For atmost 50 year4s I abd Si8dney Weintraub have been putting forward the Post Keynesian alternative to neoclassical economics — based on Keynes’s argument that the fundamentsal axioms of neoclassical economics were not applicable to the world of experience.

    despite thefact5 that Nobel Prize winners Robert Solow, and James Tobin, and Franco Modigliani all told me verbally they agreed with me — none were willing in public or print to speak out for my alternative.
    When Nobel Prize winner John Hicks endorsed in writing my alternative nonergodic approach — and said it should have been his as well — these same “Keynesians” economists said Hicks was in his dotage and did not know what he was saying.

    Strange !

    I gave a talk a little over a year ago to the Economics department of the University of Chiciago . Jim Heckman, also a Nobel Prize winner –but the person who invited me to give the talk– told me that his rational expectation colleagues were planning to rip me apart at the talk. Instead not one of these efficient market people showed up for my talk.

    I guess they could not find anythingt to debate me on — and rather admit it, they simply ignored me. Which suggests the state3gy of the mainstream establishment. Ignore alternatives–it is safer than an open debate.

  4. Paul Schächterle
    August 7, 2013 at 10:35 am | #6

    lyonwiss :
    […] Economic forecasts are possible only when human can be modeled as robots. All forecasters, neoclassical, post-Keynesians, etc. all have to make the “humans as robots” assumption, with robots being “rational” of course.

    My point is that neoclassical theory is not a good object of general epistemological discussions. It is such a bad theory that it can not forecast even if it is the case that all humans act in a predictable way (or even if all humans acted “like robots”).
    If there is a theory full of severe errors it just does not matter whether it may or may not generally be possible to predict economic movements. In any case such a faulty theory can neither predict ex ante nor explain ex post, because it is false.

    • August 7, 2013 at 11:58 am | #7

      All theories are in some sense false. Truth or falseness of a theory is only relative to what the theory attempts to explain. Being false is not what is wrong with neoclassical economics. You have to specify what is deficient in the neoclassical framework. Falseness is not an absolute idea, because it can only be relative to theoretical objectives. In the world of ideas, nothing is “just false”, unless it is self-contradictory.

      You said, “…such a bad theory that it can not forecast..”. No economic theory, I know, can forecast in any meaningful sense. So all economic theories are bad, according that logic, because none can forecast. In that case, I would have to agree with you. But then it doesn’t single out neoclassical economics as specially bad.

      • Paul Schächterle
        August 7, 2013 at 2:19 pm | #8

        Well then we may disagree on that point. I will try to explain my point of view further:

        Firstly, I think that a theory can be correct. To be correct a theory has to be based on correct assumptions and it must not contain logical errors. An assumptions is correct if it is intuitively true or has been tested and has not been falsified.
        So not all theories are “in some sense false”. Or at least we can say that some theories are “false” to a very little degree while others are false to a very high degree. Otherwise one could not separate true from false theories.

        Secondly, I did not say that a theory is false if it can not forecast. I said a false theory can not be used for forecasting, no matter if it is possible to do forecasting with a correct theory.

        Thirdly, and that is my main point, neoclassical theory is singled out and differs from other theories because we know for sure it is false. It is based on ridiculous assumptions and it contains logical errors.
        Other theories may be disputed and may have to be tested further. Neoclassical theory is just flat out wrong. That such a theory is taught at universities as if it were correct is a shame and a disgrace for academia.

    • Robert Locke
      August 7, 2013 at 3:27 pm | #9

      Clarification: reactions to comments by Paul & Lyonwise, Threads 1,2,6,7,8

      The issue is not so much whether neoclassical economics has models that predict successfully in the real-economy. Everybody, including the neoclassical economists, know that they do not. So what do the neoclassical economists do; they keep producing questionable models, and fall back on the old argument that nobody has a better science to replace theirs. So, what do their critics, in this blog do, keep questioning their model, but do not offer anything to replace it.
      The point of The Wilfully Ignorant blog is that there are people out there who are economists and live in the real-economy and need to cope with it. But the people who participate in this blog do not seem to know much about them.

      I offered the Swedish economists, in particular Gunnar Eliasson, as examples. Eliasson is an economist who wanted to use economics to explain what was going on out there in what has become a dynamic and uncertain world. He finds much to admire in Smith, Marshall, and the early Schumpeter (1911) but finds the Walras-Arrow-Debreu model reigning in neoclassical economics to be of little use in his attempt to cope with dynamic uncertainty and incomplete knowledge of today’s economy.
      Eliassson and his colleagues do not build a better model; rather they state that the way to cope is to enhance competence blocs – the human agency that can cope with the unpredictable.
      In “Reassessing the basis of economics: From Adam Smith to Carl von Clausewitz,” RWER (Issue 61), I note that Clausewitz was all for planning and that the Prussian General Staff, which he inspired, through their studies tried to take the surprise out of war. But Clausewitz knew that was not entirely possible, so he had staffs engage in contingency planning (even that did not work).
      Eliasson is trying to do something similar. He wants the entrepreneur to exists in an environment of competencies in his staffs that allow him to react skillfully and successfully to challenges that are unpredictable.
      Is this economics? I think it is, because the sort of economic modeling neoclassical economists engage in is unable to cope with the real-world with which Eliasson is dealing. He turns to human agency rather than mathematical model building.

      Dave thinks such a model is possible, but it is not to be found in neoclassical economics.

      • davetaylor1
        August 7, 2013 at 4:24 pm | #10

        I’ll just in effect add a word to what Robert has said, the meaning of which can be seen in the boat analogy. Elaisson wants staff able to react skillfully and successfully to challeneges that are QUANTITATIVELY unpredictable. The TYPE of errors which will occur CAN be predicted with almost absolute certainty, despite the unpredictability of the weather. The boat can become misaligned due to the waves hitting it, drift sideways as a result of winds and currents, and sail into dangerous waters due to not checking position, or taking short cuts without checking them out on reliable charts.

      • August 8, 2013 at 10:42 am | #11

        You said, “The point of The Wilfully Ignorant blog is that there are people out there who are economists and live in the real-economy and need to cope with it. But the people who participate in this blog do not seem to know much about them.”

        Precisely, if you have lived in the real-economy, you would understand that it has nothing to do with willful ignorance. It is mainly a sort of perverted “pragmatism” for why neoclassical economics is the accepted economics paradigm:


        It is actually not what YOU or anyone else think is knowledge or ignorance that matters. It is more complicated than that. In the real world, statement such as, “Neoclassical theory is just flat out wrong.” has very little meaning. Gunnar Eliasson and many others, have absolutely no impact, because they don’t understand how the real-world works or how it is influenced.

        We all know neoclassical economics is wrong. But so is any other economics theory. Even if neoclassical economics is more wrong and more stupid than all other theories, according to whatever criteria you want to use, it is not the main issue.

        The main issue is: nothing which has been proven wrong in any area of economics has ever been discarded, banished, discredited or corrected. Invested interests (governments and power brokers) simply “forum shop” whatever economic theory is convenient to their political or business bias.

        It is neoclassical, then Keynesian, then neoclassical, then Keynesian… round and round we go in ever repetitious cycles of shorter and shorter periodicity, going nowhere but creating greater and greater catastrophes.

  5. August 8, 2013 at 11:30 am | #12

    Mainstream economics is nothing short of “illogical economics”:


    Its fundamental flaws can be summed up in one sentence:

    “Real wealth has to obey the laws of physics, whilst money and debts are merely important social constructs, whereas paradoxically, neoclassical economics seems to inhabit a parallel universe where wealth can be created at will, money is irrelevant, yet debts are a tangible reality!”

    “It is in fact an illogical and deeply immoral cult acting as a propaganda machine for certain (already) wealthy interests. The fact that it preys on our inbuilt desires and weaknesses to sneak these insidious theories past us, suggests an even greater deviance. We have trusted them with managing vitally important aspects of our society, and they have wholeheartedly abused that trust.”

  6. Robert Locke
    August 8, 2013 at 12:19 pm | #13

    “Gunnar Eliasson and many others, have absolutely no impact, because they don’t understand how the real-world works or how it is influenced.”

    Do not want to give up but might have to because lyonwiss I don’t think you know a thing about Gunnar Eliasson or his group, or wish to, which proves my point about being Wilfully Ignorant. First, he is in an Engineering school, which should set you to thinking about what economics can learn from engineering about the real-world. Google the Journal of Evolutionary Economics, which focuses on “economic growth, wealth creation, and technological change,” and you’ll expand economics beyond the confines of the neoclassical economics debates found in this blog, with its usual cast of characters.

    • August 9, 2013 at 4:03 am | #14

      You don’t seem to understand that neoclassical economics attempts to model itself on physics, engineering and the hard sciences. The fact that neoclassical economics failed has been diagnosed by many scientific types (you included perhaps) as low levels of mathematical sophistication, ignorance of complexity etc.

      My view of Gunnar Eliasson is based on what you said and the reference. I agree that we can learn a lot from engineering, from physics, from, psychology, from sociology etc. But my view is that more mathematics, more arbitrary constructs, more of the same pseudo-science is never going to solve the problems of economics. Too many are offering solutions when they don’t really understand the central problem. They solve irrelevant or peripheral problems, which they created in their own minds.

      For years, we have had chaos theory, complexity theory, nonlinear dynamics, stochastic equilibrium theory etc all created to choke the journals with publications for career advancement. Very little of it has had any impact on public policy or our lives. What you think is the real-world is not the real-world at all, because it is only your imagination. The real-world does what the real-world does, in willful ignorance, which is part of the real-world.

      • Robert Locke
        August 9, 2013 at 5:44 am | #15

        “They solve irrelevant or peripheral problems, which they created in their own minds.” Eliasson in the Technical University of Stockholm was not creating problems in his own mind. He carefully noted from interviews of executive managers that the problems they encountered could not be solved with the tools of neoclassical economics. So he agreed with you. But, unlike you, he sought to devise methods that would help managers cope with uncertainty. That is the only issue here, people on this blog actually trying to investigate people like Eliasson who like most engineers have to pay attention to reality.

      • August 9, 2013 at 11:48 am | #16

        We will have to wait to see whether Gunnar Eliasson helps at all. I doubt it. I said, “Too many are offering solutions when they don’t really understand the central problem.” What is “uncertainty”? Engineers do not understand “uncertainty”, in the sense of Knight, Keynes etc. Don’t confuse uncertainty with risk. The “reality” of engineers are qualitatively different from the reality of economics. It will take too long to explain, if you don’t understand what I’m saying immediately.

      • August 9, 2013 at 12:22 pm | #17

        I have been arguing for more than 3 decades that uncertainty means rejecting the ergodic axiom and therefore the future is not predetermined –and governed by any probability distribution calculated from past data

        Despite having an article of mine on this ergodic vs nonergodic stochastic systems published in the 1990s in the Journal of Economic Literature, and despite having people like Sir John Hicks and Robert Solow agreeing with my argument, I have not convinced any significant number of mainstream economists of the importance of uncertainty in this technical sense of overthrowing the ergodic axiom. [ The ordering axiom plays the same role in deterministic models as the ergodic axiom does in stochastic models].Until we do, mainstream economics is dealing with a fictional world!!

      • August 10, 2013 at 12:08 am | #18

        Paul, in that, I agree. But without the ergodic axiom, economic forecasts are impossible. This conclusion is unacceptable to all the charlatans of the world, whose livelihoods depend on them foretelling the future. The fortune tellers, include Treasury economists, markets economist, investment managers, nearly everyone in the financial services sector, nearly all economists, all management consultants etc.

        Most people don’t understand or rather don’t want to understand uncertainty, because their pay depends on that ignorance. They pretend uncertainty doesn’t exist or that they have a solution for it. They prefer to deal with your “fictional world”!

  7. Robert Locke
    August 9, 2013 at 12:50 pm | #19

    Lyonwiss. I’m not advocating anything specifically but just saying that we need to open our minds. In Thread #16 you write “Don’t confuse uncertainty with risk.” In the body of this post I wrote: “But when he interviewed managers in 50 firms between 1985 and 1995, 15 of them being in Information Technology, he noted that ‘out had gone reliance on detached analytical thinking in executive quarters, in had come experimental behaviour…the distinction between uncertainty and risk.’” Seems neither Eliasson nor the executives he interviewed in the Experimentally Organized Economy in their daily reality were confusing uncertainty with risk.

  8. Robert Locke
    August 9, 2013 at 5:47 pm | #20

    Ref. Thread 17 & 18. For Gunnar Eliasson’s view on separation of uncertainty and risk see

    1998-05-05 Gunnar Eliasson KTH, Stockholm THE NATURE OF …
    5 May 1998 … Gunnar Eliasson. KTH, Stockholm ….. uncertainty and apply very high risk premia in their evaluations (Eliasson 1997). Several conclusions …

    • August 10, 2013 at 12:34 am | #21

      Sorry mentioning that there is a distinction between uncertainty and risk does not imply the writer understands uncertainty at all. You said, “…uncertainty and apply very high risk premia in their evaluations (Eliasson 1997)” seems to suggest a lack of understanding of uncertainty. With uncertainty, there is no rational basis for applying risk premia at all, because you are assuming you know something about which you know nothing. The moment you can assign a risk premium in any rational sense, you are dealing with risk, not uncertainty.

  9. August 10, 2013 at 1:48 am | #22

    Having participated substantially in this discussion, I conclude finally that the concept of “wilful ignorance” quite absurd as a general idea of criticism. The fundamental assumption of the concept is that if someone doesn’t know about an idea or piece of knowledge which the proponent find valuable, then that person is being “wilfully ignorant” in a derogatory sense.

    The second assumption which is very common among commenters on blogs is that if you have no detail knowledge of the writings of an author, then you cannot dismiss that author. Another absurdity. Has anyone read everything about any author? So how could you dismiss all neoclassical economists? Of course, quick dismissal is not only easy, but necessary.

    In fact, I have found more time to think clearly and creatively about economics, because I have found a reliable way of dismissing a large part of the voluminous economic literature, with a very low probability of missing anything important. (Of course, academics who need to publish have to kowtow to all sorts of nonsense.)

    There is quite a lot which is not worth knowing. If I had not found a way of being “wilfully ignorant”, I would be spending all my time getting out of cul-de-sacs created by others. Of course, I must make sure that I’m not being accidentally “wilfully ignorant” of new and important ideas. If someone says a paper is a “must read”, I’m usually disappointed very quickly from reading the abstract or sometimes from reading just how the first sentence is expressed. In a world of finite resources (your time), “wilful ignorance” is an extremely important method for managing your time.

    • Robert Locke
      August 10, 2013 at 5:00 am | #23

      Thread # 22.

      You haven’t participated at all in any discussion. Just google “Gunnar Eliasson on risk and uncertainty,” find the article and read it. And then you will have an idea what Eliasson says on risk and uncertainty. Why you choose to avoid enlightenment is a mystery to me. But it is the path to ruin that people follow nowadays. I came on this blog because I wanted to learn from others. And I have. Why are you here?

      • August 10, 2013 at 8:28 am | #24

        Whether Gunnar Eliasson (GE) really knows uncertainty or is not the main concern. From just browsing his paper, I see that he says the economic world is fundamentally unpredictable, good, agreeing with me, and with what many others have said long ago. While I agree with what he said, I have learnt nothing new that I didn’t know before: most people ignore uncertainty, but why? .

        GE has not advanced beyond saying management keep making the same error over and over, whereas I have provided an explanation in the reasons stated in response to Paul Davidson in #18. I’m talking about the real-world with economic incentives of human behavior, not just about apparently inexplicable stupidity.

        You think someone has got a mouse trap, whereas there is an elephant in the room.

  10. davetaylor1
    August 10, 2013 at 11:11 am | #25

    As co-author of this thread I of course want to support Robert. In my opening paragraph I made a comment to the effect that if people already believe lies they are not interested in the truth: a bit of bait I didn’t see Lyonwiss rising to. From what he’s saying above, he probably didn’t bother to read me, never mind Eliasson.

    In light of MG elsewhere persistently drowning my scientific argument for an error-correcting solution to the economic crisis with his mainstream denial there is a problem that needs resolving, let me first say our persistent and therefore predictable behaviour patterns are not ergodic, and secondly, that we were exhibiting a personality clash I am all too familiar with. My wife of well over fifty years is charming, articulate and skilful, but because she lacks visual imagination she could not imagine herself becoming able to understand me and made a “wilful” decision she wasn’t going to try. Seemingly like MG, she denies problems exist – they become for her just facts we have to live with – not because any pay depends on it but because subconsciously she’s afraid she won’t be able to resolve the problems. I’m the other way round, with my feelings bypassed by logical and imaginative thinking but poorly controlled if that is frustrated. This is why we need to get away from competitive bickering. Because we’re none of us perfect, we need to accept the need to learn to cooperate and timeshare.

    What helped my wife and I to was getting to know ourselves better through Myers-Briggs personality type testing. (See http://www.myersbriggs.org/my-mbti-personality-type/mbti-basics/).

    The relative statistics of this matter. There are about 13 people like my wife for every 1 like me. The overall statistics are of great significance for the “winner-take-all” forms of democratic government and academic economics. 76% sensory types like her, living in the here and now, are likely to dominate the 24% intuitive types, most of who are seeking patterns in the here and now, leaving only a few reflecting on the broad sweep of history or their own accumulating experience.

    So let’s get back to Lyonwiss at #14 dismissing chaos theory thru stochastic equilibrium theory as career advancement of little consequence. Agreed, but Keynes was historically NOT of little consequence, and only is now because of the wilful ignorance of others seeking to advance their own careers. What we have now is a consequence of that.

    Paul Davidson is right that Keynes rejected the ergodic axiom as an explanation of how economics WORKS, but he’s (wilfully?) ignored my point that in the information science I say was anticipated by Keynes it is an explanation of how communication FAILS to work.

    Uncertain information (noise) is one cause of risk of failure in practice. That’s why it is so irritating on this site when those who instinctively oppose what they don’t understand muddy the waters for those trying to discuss possible solutions.

    As I go to post this I see Lyonwiss reacting to Robert again at #24. Walk away from us, Lyonwiss. Be brave. Learn to recognise your good points as well as your weaknesses at a Myers-Briggs personality type workshop.

    • August 10, 2013 at 2:47 pm | #26

      “Walk away from us”? Sure, I will, as you are starting to be abusive because of your ego. You need to be resisted, when I think your are proposing solutions when you don’t even understand the problem. You presumption is that everyone is wrong or stupid when they disagree with your “new” ideas.

      I have already done the sorts of things you are trying to do, when I spent more than ten years each in finance and investment and also government, to “show” what more advanced science and sophisticated mathematics can do to solve the problems of economics. I can assure you the approach is a cul-de-sac. I’m trying to save you the trouble and direct your energy elsewhere.


      • davetaylor1
        August 10, 2013 at 11:39 pm | #27

        And there was I believing on logical grounds that Lyonwiss needed to be resisted! Just for the record, I’ve NOT being proposing “advanced science and sophisticated mathematics” as a solution to the problems of economics. Rather, I’m trying to show people the opposite: that life will be a lot simpler if we get rid of basic neglect of what can’t be seen and mistakes like thinking the earth goes round the sun or the earth is flat. The correct interpetations are always a bit more complex than the naive ones, but they work better, and getting them right can make the application of science and maths easier and often unnecessary.

  11. Robert Locke
    August 10, 2013 at 11:15 am | #28

    Lyonwiiss #24. What I find interesting about GE is not that he echoes the view of those economists who say that the economic world is fundamentally unpredictable. If that is all he said, then he would be just repeating them (Keynes, Paul Davidson, etc.). What GE does is extend the consequences of this unpredictability into the behavior of the firm; he goes where few economists tread and, consequently, was helpful when I thought about writing a book about The Entrepreneuial Shift: Americanization in High Technology Management Education. (Cambridge UP, 2004).

  12. davetaylor1
    August 12, 2013 at 1:10 pm | #29

    Not being wilfully ignorant myself (ignorant, maybe, but not for want of trying), I was stung by Lyonwiss’s insinuation it was I who was arrogant and didn’t understand the problem. Suppose he was right? Among the 3000 or so books which help make good my poor verbal memory, I found myself drawn not to the hifalutin maths and science but to a little row of six adjacent books reminding me of where I have come from: Teach Yourself New Mathematics, Teach Yourself Cybernetics, primers on Semantics, Adults Learning and Systems Thinking, and a 1972 book by Gordon Rattray Taylor called “Rethink” already confronting RWER’s problems with “technomania”. The last two indicate very clearly the “wilful ignorance” we are having to contend with.

    Opening the book of systems theory, the contents list a 1941 book under “Precedents to Systems Theory”. A note on the first page says “Throughout the volume we have kept to the strand of thought that runs from theorising about biological systems in general to social systems. We have practically ignored the strand that arises from the design of complex engineering systems”.

    So where did economists learn about systems theory? It turns out it was from a 1950′s mathematician, von Bertalanffy, whose interest was biology and who does a Lyonwiss on C E Shannon, inventor of switching circuit and error correcting logics, writing him off unread as being of merely technical importance – despite Warren Weaver, in his 1949 introduction to Shannon, having already warned this would be a mistake. Shannon’s semantic theory, that words do not have meaning in themselves but narrow down where to look for meaning in a dictionary, library or memory, is as simple and fundamental for the understanding of social communication and Newton’s language as Newton’s theory of gravitational forces was for mechanics; in both cases it is the mathematical justification of the theories which is difficult. So I turned to Leech’s 1974 book on semantics. It doesn’t even mention Shannon, and at p.88 completely misses his point. One doesn’t need to characterise the elephant in the room either completely or partially to identify it: one can simply point it out.

    The book on Adults Learning was very relevant on why students “drop out” (thus wilfully remaining ignorant). Top of the list was other priorities, which is fair enough. Not liking the teacher or other students came next. More left because the subject was too easy than because it was too hard – but “they may try to conceal the real reason behind some more emotionally neutral one”.

    Rattray Taylor’s “Rethink” turns out to have been a sequel to one published in 1949. As he explained, “Nobody wanted to organise Western society at that time: they just wanted to get rid of food and fuel rationing and pick up where they left off … So, though ‘Conditions of Happiness’ received glowingly favourable notices and evoked letters from some prominent and perceptive people it made singularly little impact”. I am sad that the same has been true of “Rethink”, because it’s a splendid book, setting the looming inevitability of some sort of “para-primitive society” against the inevitable outcomes of “technomania”.

    But doesn’t this mean Lyonwiss is right, that I’m wasting my time? I don’t know, and nor does he: he’s making a prediction. Were I “looking after Number One” I probably would be. As it is, I’m “planting pears for my heirs”, and though the seeds may not come up, “he who never made any mistakes never made anything”.

    (Please excuse the clichés: other people say these things so much better than I).

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