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Radical uncertainty — a question of economic methodology

from Lars Syll

Between 1920 and 1950, a debate took place which defined the future of economics in the second half of the 20th century. On one side were John Maynard Keynes and Frank Knight; on the other, Frank Ramsey and Jimmie Savage.

UnknownKnight and Keynes believed in the ubiquity of “radical uncertainty”. Not only did we not know what was going to happen, we had a very limited ability to even describe the things that might happen. They distinguished risk, which could be described with the aid of probabilities, from real uncertainty—which could not. In Knight’s world, such uncertainties gave rise to the profit opportunities which were the dynamic of a capitalist economy. Keynes saw these uncertainties as at the root of the inevitable instability in such economies.

Their opponents insisted instead that all uncertainties could be described probabilistically. And their opponents won, not least because their probabilistic world was convenient: it could be described axiomatically and mathematically.

It is difficult to exaggerate the practical consequence of the outcome of that technical argument. To acknowledge the role of radical uncertainty is to knock away the foundations of finance theory and much modern macroeconomics. But the reigning consensus is beset with glaring weaknesses. Keynes and Knight were right, and their opponents wrong. And recognition of that is a necessary preliminary to the rebuilding of a more relevant economic theory.

John Kay

Many economists have over time tried to diagnose what’s the problem behind the ‘intellectual poverty’ that characterizes modern mainstream economics. Kay points to the questionable reduction of uncertainty into probabilistic risk. Rationality postulates, rational expectations, market fundamentalism, general equilibrium, atomism, and over-mathematisation, are some other things one have been pointing at. But although these assumptions/axioms/practices are deeply problematic, they are mainly reflections of a deeper and more fundamental problem.

c9dd533b1cb4e7a2e1d6569481907beeThe main problem with mainstream economics is its methodology.

The fixation on constructing models showing the certainty of logical entailment has been detrimental to the development of a relevant and realist economics. Insisting on formalistic (mathematical) modelling forces the economist to give upon on realism and substitute axiomatics for real-world relevance. The price for rigour and precision is far too high for anyone who is ultimately interested in using economics to pose and (hopefully) answer real-world questions and problems.

This deductivist orientation is the main reason behind the difficulty that mainstream economics has in terms of understanding, explaining and predicting what takes place in our societies. But it has also given mainstream economics much of its discursive power – at least as long as no one starts asking tough questions on the veracity of – and justification for – the assumptions on which the deductivist foundation is erected. Asking these questions is an important ingredient in a sustained critical effort at showing how nonsensical is the embellishing of a smorgasbord of models founded on wanting (often hidden) methodological foundations.

The mathematical-deductivist straitjacket used in mainstream economics presupposes atomistic closed-systems – i.e., something that we find very little of in the real world, a world significantly at odds with an (implicitly) assumed logic world where deductive entailment rules the roost. Ultimately then, the failings of modern mainstream economics have its root in a deficient ontology. The kind of formal-analytical and axiomatic-deductive mathematical modelling that makes up the core of mainstream economics is hard to make compatible with a real-world ontology. It is also the reason why so many critics find mainstream economic analysis patently and utterly unrealistic and irrelevant.

Continue Reading Radical uncertainty — a question of economic methodology…

  1. April 13, 2019 at 8:10 pm

    Don’t have a problem with most of your diagnosis but question whether Keynes’ comparative static answers are fitting to the problems of a dynamic economy. Excerpted paragraph of something I wrote (edited) recently: http://www.vcn.bc.ca/~vertegaa/ontology.pdf

    … Hence, although the uncertainty of a free market system may indeed be ontological, as for instance the Post-Keynesian posited “open economy” would have it, but about which nothing logical is conveyable and thus its followers are lacking the means to convince an opposition in debate; it can instead be said to logically follow from the apparent fact that economic agents are free to either determine the value of previously made investments, or keep a disequilibrium condition (i.e. a growth attempt through more investing) going for yet another round. Nothing is ambiguous or inscrutable at the level of to be resolved accounts. Concepts like multipliers, accelerators, or geometric progression inherently lack material identities there. So unless something crucial is missing, the only pertinent reality left is that once the investment jump is made, investors themselves are powerless to affect their outcomes and ultimately depend on non-investors behaving contrary-wise for their monetary returns. Rationality axioms of orthodoxy as determinate answers to facing risk thereby become internally self-contradictory. For, under the considerations as sketched out above, investing and its antonym consumption cannot both be rational endogenous determinants of utility. Not only that but Y=C+I is demonstrably false too, and with it all derivative Keynesian “rational” thought. This is a (theoretical time invoking) logical refutation of those axioms, and as such is subject to empirical confirmation later. The economy’s statically projected causal structure therefore becomes invalid in an essentially dynamic environment, and with it the crucial notion that investment is the indisputable cause of economic advancement. It still may be, at least until a more fundamental cause of economic growth becomes identifiable, but it isn’t necessarily so. Instead, all that can be said for the moment is that the achievement of a forward motion towards economic betterment, by its instigator, is undecided when its inauguration occurs; and any act of investment is thus a disequilibrium impulse, whose result is still of indeterminate value. How many burst bubbles with equity losses in the billions does it take anyway, for economists to realize that equilibrium modeling of the economy is nonsensical?

  2. Rhonda Kovac
    April 13, 2019 at 9:59 pm

    Thank you for the link to the extended discussion on your page.

  3. April 13, 2019 at 10:38 pm

    Why does Kay think that Ramsey denied radical uncertainty?

    I have some extracts from him at https://djmarsay.wordpress.com/decisions/rationality-and-uncertainty/probability/probability-classics/ramseys-probability/ ,

    I also wonder about Savage. What we can take from him is that as long as economies are driven by expectation, they can be analysed conventionally. But if neglected factors (such as money, derivatives, high frequency trading … ) should happen to intrude then ‘all bets are off’.

  4. Paul Davidson
    April 14, 2019 at 8:41 pm

    Knight and Keynes have very different concepts of uncertainty. Knight believes that uncertainty is epistemological problem where humans do not have the mental ability to see the future even if it actually knowable currently. Keynes argued the future can not be derived from analyzing the past and current relationships.

    On page 210 of his book Knight writes that the future “universe may not be knowable ,,,[but] objective phenomenon… is certainly knowable to a degree so far beyond our actual powers….[and therefore] any limitation of knowledge due to a lack of real consistency [i.e., what I would call this lack a nonergodic system] in the cosmos may be ignored.”

    In other words, Knight’s view of uncertainty is a failure of human capability –and not a lack of consistent probabilistic relationships over time.

    Keynes, on the other hand in his paper on Mr. Tinbergen’s methodology stress his belief that past probabilities of relationships will not be unchanging in the future– and so there is no evidence available today that can be reliably used to predict the future

    • April 15, 2019 at 5:00 pm

      I haven’t paid much attention to Knight, but Paul highlights an important issue. To say that economies conform to some unknown probabilistic model acknowledges some additional uncertainty over the view that we can (and should) model economic uncertainty probabilistically, but Keynes was much more radical than that. Moreover, it seems to me that even if Knight’s view (as described by Paul) is in some sense ‘technically correct’ it is at best completely misleading, as we must be very far from having identified the relevant factors.

  5. Frank Salter
    April 15, 2019 at 8:13 am

    This blog reveals the confusions of economic theorising. However, the clue is in the title —methodology. Academic economists deliberately obfuscate. Scientific methodology calls for the application of the quantity calculus. To do this is sufficient to eliminate all but a handful of
    putative quantitative mathematical papers. At a stroke the “Gordian Knot” would be undone. I have said this on a number of occasions, quoting significant references. Why is this ignored? It is a critical question. I address it to all who contribute to these blogs. There is a simple method of clearing a prodigious quantity of invalid analysis by applying a single process. Can anyone answer this question. Why do you fail to apply rigorous analysis? I would appreciate any answer to this question.

    • April 15, 2019 at 5:09 pm

      Frank, I agree with you (who wouldn’t) that many ‘putative quantative’ papers can easily be seen to be in error from a quantity calculus perspective, but to fix them you would seem to need a quantitative theory of uncertainty. This seems to me very much an open issue.

      I, for one, would attempt to engage constructively with a quantity calculus view of financial crises. Can you suggest anything?

      • Frank Salter
        April 15, 2019 at 6:37 pm

        My understanding of the quantity calculus is this — it specifies what mathematical operations are allowable for theoretically valid quantitative equations — they are multiplication and division of all quantities and addition only of those which are measured in one specific unit of measurement. I am not well versed in financial crises. I therefore need to pass on that. I will reiterate that the quantity calculus disqualifies virtually all of conventional quantitative analysis. This should clear the decks for serious discussion of what remains. This is very little — only a handful of papers will remain. I am unable to understand why Lars Syll has not leapt upon this and lead discussion on what remains.

    • April 17, 2019 at 9:08 pm

      The underlying problem, I understand, really is an ontological one: what’s the fabric of our object of investigation like? Could we possibly describe it with ‘quantitative calculus’ at all? I doubt it because humans create the object economists investigate. If it was possible to find a mathematical description of this creation (ex-ante) what would be the point of being human? A computer would be just as ‘human’.

      • Paul Davidson
        April 18, 2019 at 12:37 am

        As I emphasize, uncertainty, in the Keynes sense, involves NONERGODIC STOCHASTIC PROCESS. This is the athematics that specifies that past evidence is not sufficient to make a relisble prediction regarding the future

      • Paul Davidson
        April 18, 2019 at 12:53 am

        The mathematical description of Keynes’ concept of uncertain is, as I continually have stated, –uncertainty is when there is a nonergodic stochastic process. Is this mathematical statistical description sufficient for you?

      • April 18, 2019 at 6:14 am

        Paul, agreed, non-ergodicity is key. What is difficult to argue though is that there is a stochastic process underlying economic activity. Of course, looking at events ex-post always allows us to cook up a stochastic process that captures all main features that we observe. But ergodic or not , if we suppose that these features could be described statistically we would accept that humans are machines that generate stochastic outcomes implying that there are objective laws according to which we operate. Upon accepting that we accept that we could in principle replicate ourselves and then we are exactly where mainstream economics already is (non-ergodically , of course ).
        Sorry to be so unsophisticated with this: consider reading my book on the issue “Uncertainty and Economics : a paradigmatic perspective ” (Routledge, 2019).

      • April 23, 2019 at 9:10 am

        Christian, you raise an important technical point. The term ‘stochastic process’ is properly applied to a conception of a putative real process, not to any real process as such. There are similar (but less clear) distinctions to be made about different usages of the terms ‘random’ and ‘probability’. If Paul is saying that economic processes ‘as such’ correspond to some (albeit unknown, complicated) statistical model then he is clearly going well beyond anything that can be justified, but I fear he would not be alone in this. He might be thought to be pointing out that (conventional) theories are expressed in terms of (conventional) random processes, as if this were somehow inevitable. But maybe he is, like Keynes, trying to express the limitations of the conventional theories without getting too bogged down in a mess of misunderstandings (and maybe obsfucation).

        I’m trying to clarify things at my https://djmarsay.wordpress.com/ blog, but it isn’t easy! If anyone is aware of anything that seems to them to present a clear or ‘authoritative’ view of ‘radical uncertainty’, I’d be glad to learn of it, here or on my blog.

      • April 25, 2019 at 10:52 pm

        Dave, thanks for your comment.

        When I started to seriously think about writing it all up I immediately noticed that a canonical definition of uncertainty in technical terms was missing (or I am too ignorant). Keynes wasn’t really mathematically rigorous neither Knight nor anybody from the now mainstream branch (the latter often simply equate probability distributions with uncertainty). Therefore, the first thing I did in my book, was to provide concise and formal mathematical definitions for the various degrees of uncertainty. I cannot claim them to be “authoritative” but they offer a handy taxonomy and I can develop arguments in a consistent and exact way.

        Thanks also for pointing out your blog. I’ll have a look at it.

      • April 26, 2019 at 5:42 pm

        Christian, as a pedantic mathematician I am intrigued by the notion of “concise and formal mathematical definitions for the various degrees of uncertainty.” My reading of Keynes’ Treatise on probability is that you can only mean ‘degrees of subjective uncertainty’, which inevitably are misleading: possibly significantly so. But actually I would appreciate a link to your taxonomy as it has to be an improvement on the mainstream view.

        A part of my problem in blogging is that the gulf between mainstream perceptions and Keynes’ view is so huge that it seem impossible to bridge in any accessible way. Maybe you could provide some intermediate ground? (And maybe that would be ‘good enough’?)

      • May 24, 2019 at 3:26 pm

        Dear Dave, agreed, Keynes talks about degrees of subjective uncertainties. I am not. Unfortunately, I don’t have a link to the definitions except for the book itself: https://books.google.ch/books/about/Uncertainty_and_Economics.html?id=azeDDwAAQBAJ&redir_esc=y . There is an online version without formulae that indicates the direction, however: http://www.s-e-i.ch/archive/Masteridea.pdf

      • May 26, 2019 at 7:35 pm

        Thanks for the link. No time to read for the next few weeks, so please nag me if I don’t give a substantive response. Meanwhile I note you don’t refer to Keynes mathematical Treatise.

        My own work on the subject is rather hard to find, but here’s a sample: https://www.econstor.eu/bitstream/10419/125926/1/84573833X.pdf . It includes a link to an on-line version of Keynes’ Treatise, which still works for me. On brief glance, yours seems less turgid than mine, so I would like to do a comparision. I have a blog at djmarsay.wordpress.com where I usually make such comments. My own view is that Keynes’ understanding was far in excess of what is commonplace today, but he wasn’t much better than me at communicating!

        Power to all our elbows.

  6. Paul Davidson
    April 15, 2019 at 5:30 pm

    Please read chapter 7 of my booik WHO’S AFRAID OF JOHN MAYNARD KEYNES?. This chapter is entitled “The Role of Financial Markets and Liquidity” and it notes that for financial markets to provide liquidity there must always be an “orderly” movement in the market price of each financial asset. In order to maintain this orderliness , a “market maker” is required! When banks created mortgage backed derivatives , the market they created for these derivatives had no market maker! Thus when fear of default of mortgages took hold these derivative markets lost their liquidity. The result was to dramatically reduce the value of the asset side of the balance sheet of holders of these derivatives globally! See my chapter!!

    • April 15, 2019 at 6:39 pm

      I’m afraid your argument wouldn’t even hold any water if financial assets were real. Microsoft-Amazon-Google-Etc. are undoubtedly “market makers” in the real-goods economy. But there is nothing orderly about their sucking out money from the latter, never to be seen again and thereby suffocating the retail sector with its employment opportunities in general.

      As I understand it your reasoning fully depends on the assumption that financial assets represent wealth in addition to what can be bought with it. But for that they’d need to be able to self-mortgage and as such provide an elevated standard of living. Instead they are totally dependent on the real-goods economy for the latter, let alone the cannibalizing of it carried out under their auspices.

    • Rob
      April 16, 2019 at 1:15 am

      [F]or financial markets to provide liquidity there must always be an “orderly” movement in the market price of each financial asset. In order to maintain this orderliness , a “market maker” is required! When banks created mortgage backed derivatives , the market they created for these derivatives had no market maker! ~ Paul Davidson

      Will read your chapter. When you say, “mortgage backed derivatives,” could you be more specific? Are you talking about CDOs and CDOs2 and CDOs3, and such exotic financial instruments?

      Goldman Sachs was one of the so-called “market makers” were they not?

      [F]or financial markets to provide liquidity there must always be an “orderly” movement in the market price of each financial asset. In order to maintain this orderliness, a “market maker” is required! When banks created mortgage backed derivatives, the market they created for these derivatives had no market maker! ~ Paul Davidson [emphasis added]

      The Chairman and CEO of Goldman Sachs Lloyd Blankfein made the following claims in his Congressional testimony:

      We are one of the largest client franchises in market making in these kinds of activities we’re talking about now and our client base is a pretty critical client base for us and they know our activities and they understand what market making is. (13:55_14:14)” (Listen Here)

      (….)

      We are principles. The act of selling something is what gives us the opposite position of what the client has. If the client asks us for a bid and we buy it from them, the next minute we own it, they don’t. If they ask to buy it from us, the next minute they own it and we don’t. We could cover that risk, but the nature of the principle business and market making is that we are the other side of what our clients want to do. [14:54_15:27]” (Listen Here)

    • Rob
      April 16, 2019 at 4:30 am

      “As more and more first-time investors turn to the markets to help secure their futures, pay for homes, and send children to college, our investor protection mission is more compelling than ever”. Given the current experience of contagious failed and failing public financial markets, it would appear that the SEC has been lax in pursuing its stated mission of investor protection. (Davidson 2017, 91)

      This statement is misleading in that it fails to account for the manner in which the role and institution of the SEC has been undermined by the political agenda of the so-called “conservative” GOP and its repeated attacks and interventions and even outright [under]defunding leading to understaffing of the SEC which undermined its ability to perform the regulatory role expected of it, all under the sick and twisted ideology of mainstream capitalism that the “free market” will always yield the best outcome and therefore less regulation the better. And we are not even discussing regulatory capture that ensues when the fox is made guard over the henhouse, such as the case of Enron and the aiding and abetting by ilk like Newt Gingrich et. al. that willfully undermined the SEC and FASB to allow the Big Five accounting firms to continue in their cozy conflict of interest relationships with predatory firms like Enron. No, you miss the mark blaming the SEC and not looking deeper in my view.

    • Rob
      April 16, 2019 at 9:39 am

      [T]he market they created for these derivatives had no market maker! ~ Paul Davidson

      There was a “market maker,” and as the words of Lloyd Blankfein make clear, Goldman Sachs and predatory banks like them were “market making.” The shifting of blame to the SEC is an empty rhetorical evasion of the real underlying causes for the GFC.

      The SEC, like all institutions created to provide oversight over capitalism, can only be as effective as current culture — its ethics, its morals, its values — allows within the constraints of interest group politics and its consequences for “free market” capitalism. The overriding trend was deregulation under the ideology of mainstream economics despite the many past warnings from history:

      Arrangers as Market Makers

      It is easy to view investment banks and other arrangers as mechanics who simply operated the machinery that linked lenders to capital markets. In reality, arrangers orchestrated subprime lending behind the scenes. Drawing on his experience as a former derivatives trader, Frank Partnoy wrote, “The driving force behind the explosion of subprime mortgage lending in the U.S. was neither lenders nor borrowers. It was the arrangers of CDOs. They were the ones supplying the cocaine. The lenders and borrowers were just mice pushing the button.”

      Behind the scenes, arrangers were the real ones pulling the strings of subprime lending, but their role received scant attention. One explanation for this omission is that the relationships between arrangers and lenders were opaque and difficult to dissect. Furthermore, many of the lenders who could have “talked” went out of business. On the investment banking side, the threat of personal liability may well have discouraged people from coming forward with information.

      The evidence that does exist comes from public documents and the few people who chose to spill the beans. One of these is William Dallas, the founder and former chief executive officer of a lender, Ownit. According to the New York Times, Dallas said that investment banks pressured his firm to make questionable loans for packaging into securities. Merrill Lynch explicitly told Dallas to increase the number of stated-income loans Ownit was producing. The message, Dallas said, was obvious: “You are leaving money on the table—do more [low-doc loans].”

      Publicly available documents echo this depiction. An annual report from Fremont General portrayed how Fremont changed its mix of loan products to satisfy demand from Wall Street:

      The company [sought] to maximize the premiums on whole loan sales and securitizations by closely monitoring the requirements of the various institutional purchasers, investors and rating agencies, and focusing on originating the types of loans that met their criteria and for which higher premiums were more likely to be realized.

      (The Subprime Virus: Reckless Credit, Regulatory Failure, and Next Steps by Kathleen C. Engel, Patricia A. McCoy, http://a.co/3OgD9AX)

      There was not only a “market maker” but the so-called “market maker” helped perpetrate the fraud upon the entire world economy and anyone who bought into the ponzi scheme they were running.

      • Paul Davidson
        April 16, 2019 at 4:41 pm

        Goldman Sachs created a market for their securitized derivatives but they did not function as a market maker is required — namely to assure market price of the security changes in an ORDERLY manner. Goldman can claim it was a market maker but it did not maintain orderliness which is a required property of a market maker!

      • Rob
        April 17, 2019 at 4:00 am

        Reality bites and trumps theory in the end. Your idealized version of a market maker has never existed, at least not in todays form of predatory finance as exemplfied by Goldman Sachs and its role in not only making the market but engaging in fraud, deception, and manipulation of the very market it made along with the collusion of the ratings agencies, mortagage brokers, and a host of other players right on up to Greenspan and the Fed.

        The way markets are made doesn’t evidently match the way they are theorized about in your theorizing Paul. And no amount of exclamation points makes the idealization any more real.

        Before the subprime driven GFC my wife and I were daily barraged with mortgage brokers seeking to move us from a 30 year fixed into one of Wall Streets new subprime adjustible rate loans that Greenspan crowed so glowingly about. I knew this was a shell game and ponzi scheme even then. We finally invited one of the poor ignorant salespersons into our home so we could witness their BS selling points for ourselves (never once intending to fall for this short-sighted ponzi scheme being waged against middle class Americans with little financial education). She sat there flipping pretty pie and bar charts reciting her sales mantra (“You will save $600 a month on payments”) never once discussing the downside — when interest rates change so does your payment, or interest only payments don’t decrease the principle, or when balloon payments kick and you can’t refinance as promissed was so easy, you are essentially screwed. She even thought it important to tell us she herself had one of these exotic little financial monstrosities birthed on Wall Street. I bet she lost her home (and skirt) with the rest of the fools who bought into this Ponzi scheme.

        Without a major social and political revolution in thinking about economics and business the few worthwhile remedies you suggest in your Chapter 7 will never happen (in fact the regulations are being loosened to allow another GFC to happen) because they require Congress to act and given the current state that is a pipe dream.

        Ismael Hossein-zedah in his book Beyond Mainstream Explanations of the Financial Crisis: Parasitic Finance Capital exposes the fallacy at the core of the idea that QE is good when all it does is reward the predatory banks and reinflate the bubble or that we should bail out the predatory banks, like you suggest in Chapter 7. In fact, he notes another alternative, the case of Iceland, where they told the predatory banks and shareholders to take a hike as they were “too big to be rescued” whereas you (wrongly I believe) argue the “to big to be jailed” should be bailed out, which is little more than predatory capitalisms socializing the losses while privatizing the gains. Nothing like socialism for the rich and predatory capitalism and austerity and stagnation for eveyone else, eh?

  7. Paul Davidson
    April 15, 2019 at 7:51 pm

    NO! Amazon, Microsoft, etc are NOT market makers in the sense they maintain orderliness in the market price so that a buyer of a “real” asset [your term] can know he/she can immediately resell it at any time at a price not very different from the last market transaction price!
    liquidity means the asset i sreadily RESALABLE– BECAUSE IF NOT ONE FROM THE PUBLIC IS READY TO STEP UP AND BUY AT AN ORDERLY CHANGE FROM THE LAST PRICE — THE MARKET MAKER WILL PROVIDE THE RESaLE OPPORTUNITY. tHIS IS WHAT GIVES MOST FINANCIAL ASSETS THE PROPERTY OF LIQUIDITY — WHICH REAL ASSETS DO NOT HAVE.

    I BUY SHARES OF STOCK ON THE STOCK MARKET BECAUSE ALL TRADED SHARES HAVE A MARKET MAKER TO ASSURE ORDERLY PRICE MOVEMENTS. i AM USING THESE SHARES AS A LIQUIDITY BASIN — TO BE ABLE TO HAVE MONEY VIA RESALE WHEN i WANT MONEY.

    If I buy a book from Amazon, Amazon does not assure me that I can resell it in their market place at a price that is orderly moving from market transaction to market transaction

    • April 15, 2019 at 9:12 pm

      You’re right, they’re not market makers in that sense. But by setting a take-it or leave-it price, and while depending on their monopoly power, they make the market that way. My point was, relevant or not, that the results are far from beneficial.

      I question whether a market-restricted analysis of liquidity is at all helpful in getting to the bottom of how an uncertain economy works. An analysis of the coming into existence of production, exchange, distribution, and why adequate consumption is lacking requires the understanding of credit and its redemption possibilities. As indicated before, relying on an ephemeral liquidity only gets one into the black hole of non-wealth.

      • Paul Davidson
        April 15, 2019 at 9:48 pm

        No. Even the wealthy require liquidity from much of their wealth held as assets.

        Liquidity is necessary in a world of uncertainty when one can never be sure when cash inflows or outflows in the future may go berserk! In a Walrasian General Equilibrium framework, at the initial instant, each decision maker knows exactly what he/she will need in the future and what income will becoming in , in each future period. Therefore they can enter into forward contracts for every date in the future without having to worry about meeting a future contractual obligation! With uncertainty, liquidity is necessary if a contractual obligation comes p which cannot be met out of current income,.

      • April 16, 2019 at 3:08 am

        It seems to me you’re answering a macroeconomic problem with a micro answer. What is your analysis as to how (aggregate) liquidity comes about? Are liquid assets determinable in a quantity over and above contractual obligations and current income? Cash supposedly is the most liquid asset around. How did it escape the waxing and waning of the money supply allegedly conforming with the taking up and repaying of loans?

        Don’t think Keynes has answers to these questions, but I’m always ready to learn and revise my own theory; which in a nutshell, regarding the query at hand, is: all _net_ wealth exists outside the economy in the form of non-monetary use-values, and when it enters or returns (in the form of monetary exchange-values) becomes a to be resolved debt.

  8. Paul Davidson
    April 16, 2019 at 4:45 pm

    Don’t you believe that nacroeconomic theory must be based on some microeconomic assumptions regarding the behavior of decision makers in the market place? Or is macroeconomics determined by the action of the Gods?

    • April 16, 2019 at 6:30 pm

      Given that the economy is essentially a dynamic structure that is fully human-made for a purpose, meaning the latter by necessity is located outside of its make up, its set of first principles must reflect that reality’s determination. Gods or my belief don’t enter into it; but neither do microeconomic “decision makers”, nor does the static identity Y=C+I. A deduction from those macroeconomic premises will still be an incomplete reality, in that the premises themselves are induced. Hence the opening line. There are no absolutes for us mortals. The closest we can come, having to deal with “radical uncertainty”, is by implementing dialectical reasoning. See my paper.

  9. April 19, 2019 at 6:19 pm

    I am not exactly encouraged by my hospitalisation raising the rate of new bloggers here substantially: as I’ve long suspected, no-one here wants to learn, only to teach or undermine. That of course includes myself, so the issue is whether what is being taught is justifiable and whether to undermine or openly challenge self-justifying vanity and malicious or hear-say opinion. Not getting a hearing certainly does not breed vanity, leaving me sympathetically challenging rather than dismissive of those who have been misled.

    One of those is Lars, bewailing “deductivist orientation” rather than the taking of generalisations rather than word definitions as axiomatic. Another is Rob, bewailing consequences but not the causes which need to be addressed. Before this, Paul misrepresents both macroeconomics and the ‘God’ argument, and John – from his paper, familiar with Marx’s but not John Ruskin’s economics, nor with C S Pierce’s logical process of retroduction – gets as close as anyone has to the cybernetic logic of steering a course “by implementing dialectical reasoning”. Navigation is however more complex than mere steering, and being a human process, involves communication not only of force but of information, which gives rise to radical uncertainty by becoming distorted, or taking time during which relationships change.

    So today is Good Friday, when such evidence as there is testifies to Christ, a man described in the preface to St John’s good news (i.e. Gospel) as the Word of God, re-enacting in his life and death the message that God his Father (creator of the universe) loves us so much that he was prepared to die that we might live. How the Word could be God can be likened to water, where energy can transform ice into running water and powerful steam. Anyone who understands the Big Bang theory can understand a living God blowing himself up that we might (after a due evolutionary gestation period) live.

    Anyone who understands words realises that the same meaning can be conveyed in different languages, so love can be expressed in that of God, Man or Economics as feeding each other, as John Vertegaal put it “fully humanly made”, yet to fulfil that God-intended instrumental purpose. A father’s actual purpose is not that he should “steer” his children but that they should become independent, able to love freely and steer themselves; likewise macroeconomics is not a tool to enable governments to steer us, it is a method – taking account of the past and the future as well as the present – which applies as much to paddling one’s own canoe as to steering a ship of state. Hence the principle of subsidiarity.

    Anyone who has been a father knows of the high hopes one has for one’s children, how much one has to put oneself out to feed them and the “radical uncertainty” as to how they will turn out. How often, sadly, they are ungrateful for the love and care they have received. Future generations may include bastards, who by denying their protogeny see no reason to be grateful and to give others cause in turn to be grateful. So began anti-Catholic capitalism [to usurp James II] justified by a Humean democracy representative of the powerful, which agreed on enslavement and self-love rather than the love of all.

    So, it is not scientific in the Humean sense to believe in a Creator one cannot recreate; but nor is it scientific to discount the only historic evidence available because it is inconvenient to a contrary belief. In the end one has, as John puts it somewhat obscurely, to choose “a set of first principles [which] reflect reality’s determination. And given the testimony to Christ’s resurrection, to live in hope that that the Big Bang was not the end of the God story.

    Kant’s answer to Hume was the need to make a “synthetic a priori judgement”, for one must have the concept of a cause as the measure of one. The “a priori” phrase is however misleading: one abstracts to what was there “before the beginning” using Pierce’s logic of retroduction rather than inductive generalisation. As a scientist I have chosen the God theory because it explains the Big Bang. Given the resultant energy, one’s God concept need not enter into economic determination, yet it defines its ethics.

    G K Chesterton captured the three-dimensional rather than “either-or” nature of the problem when he visualised what I call Carpenter’s Truth: an upright post at right angles to a plane. “It is always simple to fall; there are an infinity of angles at which one fall, only one at which one stands”. So yes, John; dialectical reasoning is an important first approximation to keeping the post upright. However, in addition to correcting for leaning right or left one must correct for after and before: the past and the approaching future. I can only repeat again: get one’s head round PID logic by seeing what happens in the navigational paradigm, then consider how problem-avoidance in financial investment causes chaos if pushed too far.

    During the Hitler war, a priest volunteered to take the place of a family man condemned to death by torture. His death was grotesque but his kindness and courage admirable. The death of Christ was likewise grotesque, but Good Friday is all about his dying for us.

    • April 20, 2019 at 6:18 pm

      Sorry Dave, while wishing you a speedy recovery, your pseudo-sophisticated and religious-laden drivel about the mechanics of the journey sorely misses the aptness of producing determinants of the destination’s overall purpose. Steering, navigation, PID, what-have-you, are distinctions without a difference from the perspective of purpose. From the former you can’t get to the latter, as they’re all unconnected (indeterminate) values. We’ve had this discussion before and more than once too. You’re just as loath to let go of your hobby horse as economists are of their math and related false micro determinants. My paper is about showing why those determinants are erroneous and the economic structure as a whole is ongoingly indeterminate, right until its purpose gets achieved bit by bit at the time. Sure, its all inherent in the premises. But until a contradiction or _irrelevance_ to the real world can be pointed out, it seems to me doing a hell of a lot better in its explanatory power than followers of Keynes can manage with theirs.

      • April 20, 2019 at 10:19 pm

        John, Keynes was theorising about thirty years prior to the articulation of PID control theory, but what he was saying can be interpreted as anticipating it, i.e. as taking account not only of prices but of the long-term effect on unemployment of the systematic shortfall necessary to generate enough error to drive the system. Your dialectic is likewise interpretable as correcting a course, but doing no better than steering a ship.

        The nonsense you talk about economics having one purpose is evident when one sees an economy not as one ship but an ocean full of them all serving their own particular purpose, even though in language their function can be generalised as the distribution of goods. The nonsense is not evident when you don’t see that the meaning of the word ‘economy’ has been deliberately changed (financialised), so that it now referred to what Aristotle called chrematism, which has the one purpose and therefore function of making money. Your paper is flogging the already dead horse of micro determination of the macro, but what I’ve not found you doing is recognising that economic structure is made up of communications channels, including language, technological design and tooling.

        Be an idiot, then, John. Look a gift horse in the mouth. Confirm what “I’ve long suspected, no-one here wants to learn, only to teach or undermine”.

        Or open your eyes. See what I’ve seen today: a kindly neighbour buying fish and chips for a young family just evicted from its home. News about social self-destruction and fire-sales of firms made bankrupt by financial speculators and the ongoing destruction of the planet for lack of politicians willing to rewrite the rules of the present economic game and create the communications channels necessary to lead a war on global deforestation and irresponsibly fraudulent finance. Why? Because Hume’s morality is what politicians agree on, and what they agree on is that they want nothing to change. Do you really want to play the fiddle while Titanic sinks? Better to man the lifeboats of “Small is Beautiful”, guided by Subsidiarity and “Women and children first”.

      • April 21, 2019 at 6:11 pm

        You’re hopefully confused Dave. An “ocean full of [ships] all serving their own particular purpose” is a micro-aggregated “macro economy”. You’re the one who’s “flogging the already dead horse of micro determination of the macro”. In my paper reciprocity of the aggregate means, gathered on the journey, determines the single purpose of living standard at its destination . You either didn’t read it, or you couldn’t escape from your own ideas occupying every corner of your mind. A reminder of Keynes who died 73 years ago on Easter Sunday. Time for some new ideas, no?

      • April 21, 2019 at 10:42 pm

        John, the “ocean full of ships” is “micro” but not aggregated. What true of each (the method of navigation) is true of all, but for you to suppose they are all aiming for the same destination means that you are not talking about economics but – as I asserted – chrematism. That’s the way it is. The navigational method is being used to control the diversity of the economy in an attempt to “make money”. Let me add that the confusion is not mine even if I cannot express in a few words a complex picture you haven’t seen, hence my use of analogies I had hoped you could understand, like navigation.

        As for your paper, I was worn out by the time I had read a third of it, so I skipped to your conclusions, but found nothing to alter the judgement I had been forming.

      • April 21, 2019 at 11:30 pm

        Your habit of constructing straw-men in order to knock them down is most tiresome, Dave. Chrematism, or the love of money, functions as a faux determinant of an economic structure. My paradigm, if anything, is its very opposite. You don’t know what you’re talking about. Over and out.

  10. April 21, 2019 at 6:16 pm

    Sorry, that should be hopelessly. I must be getting dotty I think…

    • September 22, 2019 at 1:22 pm

      Looking back through all this, John, I don’t think you are dotty, but I do think that we are at cross purposes. These are explored in e.g. Isobel Myers-Briggs’ “Gifts Differing”.

      In Jungian personality terms I suspect you are what most people are and are now trained to be: a sensory rather than an intuitive thinker, meaning in practice one who thinks efficiently by manipulating words without wasting time worrying about their meaning. An intuitive thinker by contrast seeks words to express the patterns he is seeing, the richness of a picture meaning it takes longer to decode than familiar words. Before printing was invented people were taught concepts through the likes of stained glass and stories, exercising their intuition. Scientists too, where their work has not been so broken down as to leave them mere laboratory assistants, tend to be or become intuitive by applying theories and experimenting with examples of concepts, much as their forefathers thought about the significance of what we call stories, parables and myths. As it happens I am an intuitive thinker, brought up on Catholic parables and employed in a centre of electronic science: forever “the apprentice” intuitively trying to make sense of and ensure the reliability of rapidly changing information technology, so it is not really surprising that I tend to illustrate in diverse ways (hoping to chance on one at least part of my audience is familiar with) what cannot be quickly proven.

      • September 23, 2019 at 2:59 pm

        Dave T, A slight digression. You note “I suspect you are what most people are and are now trained to be: a sensory rather than an intuitive thinker, meaning in practice one who thinks efficiently by manipulating words without wasting time worrying about their meaning.”

        In terms of Shannon’s mathematical theory of communication we should all worry about interpretation unless we are sure that we have a shared context. (Ken would say ‘shared culture’.) My beef about many economists (mis)use of mathematics is that they take it out of context (i.e., do not respect the appropriate ‘mathematical culture’). Who should worry about bridging the contexts/cultures? I think we should all try harder! But the start is to note that there is a gap to be bridged, and to take it more seriously.

  11. Ken Zimmerman
    April 22, 2019 at 9:17 am

    Excellent work, Lars. You get the struggle for economics’ soul correct. “In Knight’s world, such uncertainties gave rise to the profit opportunities which were the dynamic of a capitalist economy. Keynes saw these uncertainties as at the root of the inevitable instability in such economies.” So, the choice is clear. An economics designed for and serving the interests of gamblers, who know and recognize radical uncertainty. Gamblers working to keep others from recognizing it so they can use that advantage to accumulate wealth. Sophisticated theft. On the other hand, an economics designed for and serving the interests of all of society by helping societies prepare for and minimize the negative impacts of the social crises that result from radical uncertainty. We need to make a judgement and then a choice.

    Regarding certain aspects of this argument, we shouldn’t push our attack too far. “As if” modeling is not incorrect unless it goes too far. Physical scientists use such modeling frequently. It’s what comes next that makes it acceptable or not. Models in physics, for example are merely a beginning point. Then observation and data take over, leading scientists to support, change, or reject the beginning model. Economists take the opposite route. Idolizing the model and subjugating observations and data to it. Physical phenomenon is from all appearances notably less uncertain than social phenomenon. But physical scientists never assume this in their work.

    Now, let’s talk about this “real-world.” Use of this term is not only misleading but confusing for anyone attempting to create a scientific economics. If we want a scientific economics, then we must base it on observations and comparison of observations. Observations that seem to show similar results should be tested again and then used to create new observations to extend our understanding. Eventually, seeking to find patterns in the observations and from the patterns to create theories to guide further observations. The term “real-world” is superfluous. It may be a great rhetorical device to make a point. But that value is negated by the confusion it creates.

  12. April 23, 2019 at 8:49 am

    To pick up on Ken’s point but using Savage’s terms, (almost) all our theories and models are in terms of ‘small worlds’. We know that ‘reality’ as a whole can not be a small world, so our (small world) theories and models cannot actually ‘correspond to reality’. But small world models can nethertheless be very useful (e.g. in the hard sciences), just so long as we dont forget they are only small world models.
    Actually, in many domains it seems okay if most practictioners most of the time proceed ‘as if’ they were dealing with a small world. Even with social processes, which are manifestly not ‘small’, western civilization seems to have got by in its own terms without seeming to face up to the limitations of its own world-view. But we may need to take a larger view of contemporary economics if we are to make substantive progress.

    In Keynes’ terms, in most domains most practictioners most of the time seem to get by in their own terms without comprehending his distinction between what he called pseudomathematics and ‘the real deal’. This seems to me still an important technical distrinction, but maybe Savage’s (or Ken’s) way of putting it is more accessible. I attempt my own way of putting it in my blog at https://djmarsay.wordpress.com/2019/04/16/the-limits-of-pragmatism/.

    • Ken Zimmerman
      April 23, 2019 at 9:48 am

      Dave, “…western civilization seems to have got by in its own terms without seeming to face up to the limitations of its own world-view. But we may need to take a larger view of contemporary economics if we are to make substantive progress.” A physics friend tried to explain to me how physicists do their work. He began the explanation with this, “Assume a universe with uni-directional scalars.” That’s about as big as you can get. And uni-directional scalars match up to no known observations of the universe. He then explained what I’ve put in my posts about physical science. I’ve confirmed this understanding many times over the years. As Richard Feynman said, science can begin anywhere. Just so, we don’t get hung up in either no observations or no theorizing. As to the social sciences, they’re incomplete and not fully scientific but they do reveal that for the last 5,000 years Sapiens has not gotten by on its own terms. The tribalism of Sapiens, something it invented over 30,000 years ago is now near to extinguishing our species. Economists are prime mover in our extinctions. And that’s just one tribe helping us to the end.

      • May 26, 2019 at 7:41 pm

        My latest professional journal has an article which seeks to update Bacon’s ‘idols of the tribe’. I hope to review it over the next few weeks. Feel free to nag me at djmarsay.wordpress.com if I dont.

  13. Craig
    April 23, 2019 at 7:34 pm

    99.99% of the uncertainty of economics could be eliminated if we realized that private for profit finance was not a legitimate business model and that the new monetary and financial paradigm was Direct and Reciprocal Monetary Gifting. That would leave just enough uncertainty to enable the graceful interactive and integrative flow of the economy instead of static delusion.

  14. September 10, 2019 at 6:16 am

    Scientists have dealt with very complex systems for decades now without throwing up their hands in despair.

    What we do is develop model systems that have containable levels of variability and then study these in great detail to elucidate the fundamental principles of operation. We start with hypotheses, and test these with data until we have generally accepted theories.

    When we are done with this, we then extrapolate to the more complex and useful generalized systems, using the knowledge gleaned from the model studies to formulate (usually numerically) simulations of the complex systems.

    I am thinking that maybe there is no such thing as radical uncertainty, just limited patience and discipline in the face of serious complexity.

    What makes economics so difficult to model, especially in time, is the number of variables that are both hard to measure and define, the large number of higher order effects (events whose outcomes depend on many things) and the amount of stiffly coupled outcomes (feedback loops, if you like).

    • Ken Zimmerman
      September 10, 2019 at 2:36 pm

      Mxx1, how do you model non-linearity? It makes predicting which events will occur next and when they might occur impossible.

      • September 10, 2019 at 9:46 pm

        Depending on what you mean by non linearity, one just uses differential equations. A set of these defining a modelled reality can be solved either analytically or numerically. These days the latter is more common and insight is lost

      • September 11, 2019 at 1:32 am

        A follow up comment Ken.

        Firstly, it critical to separate thermodynamic effects (driving forces and entropy) from kinetic effects (things that change in time). One can then use partial differential equations to model the time rate of change of any variable of interest. A good example would be the Fokker-Plank equation as used in physical chemistry.

        By the way, the model systems that I referred to usually contain many less variables and often exist in a limiting case where, for example, thermodynamic considerations are constant and can be ignored when solving the equations (for example, the problem may be purely kinetic in nature and much easier to solve).

      • Ken Zimmerman
        September 11, 2019 at 2:12 am

        Mxx1, for chaotic physical systems the systems’ actions can be predicted, but only as to pattern not values at any moment in time. So direction can be determined, but not end point. Social and behavioral systems are more difficult. They tend to fluctuate between no pattern and repeatable pattern cycles of varying lengths. When it comes to predicting what a system will do next, data on the recent state of the system often provide more information than data on some long past state of the system. Or, some mathematical model (e.g., differential equations) that supposedly “perfectly” represents the system.

      • September 11, 2019 at 2:28 am

        Agreed. However sometimes people confuse complex with chaotic. Some claim to have a maths based approach to determine which; see http://www.maths.usyd.edu.au › ch…PDF
        Web results
        Application of the 0-1 Test for Chaos to Experimental Data

      • Ken Zimmerman
        September 11, 2019 at 3:54 am

        Can you direct me to the items on the web site you want me to consider? Also, by 0-1 I assume a binary choice. Correct?

      • September 11, 2019 at 5:32 pm

        Mmx1, did you ever consider the possibility that your assumptions of determinate physical entities, subject to differential equations within an economy, aren’t fitting the problem at hand and you could be embarking on an entirely fruitless quest? What if the economy isn’t made up from material things that are moving about non-linearly? Given its exogenous natural resources, a human-made economy exists, thrives, or succumbs, by the status of its accounts. At any particular present these accounts involve physical activity of the past, the future, and mental developments of a future still further ahead. Money is no veil but an essentiality for an economy, as without it the above expressed reality isn’t conveyable.

        Every economic activity is a booked entry, either on the debit or credit side of a ledger, in terms of its unit of account. To the extent an activity isn’t booked, like e.g. home gardening for food or pleasure, it isn’t part of the formal economic system that’s being investigated. So for your assumptions to be appropriate you’d be needing a theory linking the nature of money, economic in- and output determination, contemplated future production improvement, and higher math. Until then, aside from basic arithmetic, math is useless in an imperative cost accounting of an economy’s dynamics; since, as far as concerning any booked debit side consisting of to be resolved negatives, its determination as having been effective is radically uncertain and doesn’t occur at all unless unrelated (non-linear) returns come in and thereby provide the starting conditions for a continuity, again to be determined non-linearly later. A dynamic economy is chronically indeterminate; neither kinetics, thermodynamics, (higher) math, nor static points of departure are applicable.

      • September 12, 2019 at 1:01 am

        The gap between science and economics is such that I am not even sure I understand your point. That’s not a criticism in any way, just an observation.

        My original point was historical. In physical chemistry, way back when, when the systems of interest looked too complex to be resolved, the scientists synthesized simplified model systems.

        After decades of understanding these, which included the development of all the underlying fundamental principles as well as the maths, this knowledge was then used to tackle (simulate and forecast) the more complex systems of (generally commercial) interest.

        I wonder if the same is not possible for economics? The claim that economic systems are “chronically indeterminate” doesn’t ring true since they exist within a (very) closed system (the earth and its resources). It might just be a matter of abstracting one’s view to the appropriate level – start with the classical macro view and do not try and solve the quantum level view on day one (which I am guessing might allow the very compelling prediction of specific financial outcomes).

        It took almost three centuries for physical and theoretical chemists to link the macro classical view, through to statistical mechanics and eventually to the quantum view (which by the way, has indeterminate uncertainty built into it, but is still useful when abstracted to the macro).

        I don’t have any specific insights, but spending time with a world class physical chemist that has (1) an appreciation all the levels of modelling in chemistry, and (2) an appreciation of the history of physical chemistry, might just be a handy conversation to have.

      • September 12, 2019 at 8:00 am

        No need to be defensive, mxx1. I’m quite sure that most economists on this blog and even more so those “out there” who are not, are quite comfortable sharing your position, considering the alternative, about not understanding me. Paraphrasing Mencken, their jobs depend on it. I do agree though with your sense of a gap existing between science and economics. For at least in my way of thinking, economics isn’t “a study of the physical and natural world using theoretical models and data from experiments or observation”. While that definition fits science to a T, an economy is created instead by fallible human beings. Nothing “natural” carries over in the process of implementing (natural) resources in terms of human-made units of account, and especially not when its purpose is manipulated by institutional sideshows like the “world of finance”.

        Now it may very well be that something essential is missing from my axiomatic position that our economy is an intermediary non-physical system of accounts*; put in place to resolve and thereby transpose determinate physical values for use into the exogeneity wherein we live. But I would sure like to know what economic materialism, in an all encompassing world wherein we both live and make a living, can explain that my interpretation cannot. As you probably figured out by now, I’m no economist. Your perception of a single gap was actually a double one. But since economists here as a rule do seem to consider their discipline a science, perhaps there are commonalities worth discussing. We, unfortunately, are miles apart. Good luck

        *)Its chronic indeterminateness is deductive, not just an assertive claim.

      • September 12, 2019 at 11:52 am

        The key difference between economics and science is and has always been an ontological one. Most mainstream economists just don’t get that and young economists are trained not to understand it though the issue is very simple: are humans complex, chaotic, nonlinear machines or do creativity, phantasy, imagination, feelings etc. matter?
        It’s science in the first and economics in the latter instance.

      • Ken Zimmerman
        September 12, 2019 at 3:32 pm

        Christian, if one wants to study humans scientifically, one must accept that humans are both complex, chaotic, nonlinear cultural devices and also creative, imagining, and sometimes delusional beings who create and live through culture. Each has been and is today considered through science, and other approaches.

      • September 12, 2019 at 3:57 pm

        Agreed, science contributes within its ontological bounds. Though my point is this: beyond those boundaries economics starts becoming interesting as a research field in its own right. I happily leave it to mathematicians and physicists to explore the machine parts of humans and human behaviour.

      • September 12, 2019 at 5:21 pm

        Christian, you say “I happily leave it to mathematicians and physicists to explore the machine parts of humans and human behaviour”. It seems to me that these parts are not very much. As a mathematician, I quite get that ‘mainstream’ economists confine their attention to those parts of mathematics that are appropriate to idealised machines, and hence (in my view) inappropriate to actual economies. But might not other mathematics be of relevance, even if ‘just’ contributing to the debate?

      • September 12, 2019 at 5:43 pm

        Yes, I do hope that mathematicians can contribute a lot more than what mainstream economists are focusing on. What I’d really like to know is what they can say about Keynesian uncertainty. Some have claimed that they cope but I am not sure. If you want I’d be happy to send you a reference with this claim and loved to get your view. Being not a mathematician I cannot verify or deny their claims but am suspicious because of the ontological issue (I’ve got this “proof” by contradiction that sums up my concern: http://s-e-i.ch/archive/AI.htm ).

        Meanwhile, my catch is this. Math “resolves” the problem of not being able to know (in Keynes’ sense) by proximity. We know that we cannot know but we still have to decide somehow. Math offers a way to pretend knowing and thus a rational for our choices although we know that it cannot be an efficient choice.
        (Have I already recommended my book😉? It’s all in there plus a lot more and I’d be happy to present and discuss it at your convenience 😊. )

      • Paul
        September 12, 2019 at 5:57 pm

        The mathematics of stochastic processes can be relevant. If the path of the economy is described as a NONERRGODIC stochastic process then no information exists currently that can provide reliable information about the future –that is radical uncertainty. See my book WHO’S AFRAID OF JOHN MAYNARD KEYNES?

      • September 12, 2019 at 6:17 pm

        Dear Paul, thanks for the reference! I’ll check it out 😊.
        May I also voice a reservation? With non-ergodic stochastic processes you still can calculate an expected value (which is of little use, of course, due to exploding higher order moments, I know) but anyway, that already seems to me too far away from what Keynes referred to.😉

      • Ken Zimmerman
        September 12, 2019 at 11:44 pm

        Christian, I agree that science is only one way to study economic actions and artifacts. Economics can also be examined historically and through literature and arts reviews. I’ve even attended a ballet about economic life. And then there are the musicals, from Les Miserables to Oliver. And of course probably the most well know novel about economic life, A Christmas Carol. I will not leave it to mathematicians and physicists to explore the machine parts of humans and human behavior. I suggest if you’re interested in understanding human judgments and actions that you not leave it to them either. One of the more interesting research topics for social scientists and historians today is humans with parts taken away and added. From artificial knees and hips to machine and organic replacement heart parts, from prosthetic legs, arms, hands, etc. to artificial blood, ribs, spine, etc. One of those life imitates the movies things. Understanding the changes in culture leading to these changes in humans’ body makeup, chemistry, and everyday life must be important changes to reveal.

      • September 11, 2019 at 5:10 pm

        A more fundamental question, is how do you ‘prove’ that a given real system is deterministic? If it isn’t, how do you prove that it is stochastic? If you can’t, then you have a kind of radical uncertainty. (And in particular, the quoted test can at best give a conditional result and so needs to be heavily caveated.)

        If anyone has any papers that purport to give positive answers to my questions, I’d be happy to review them on djmarsay.wordpress.com. ;-)

      • September 13, 2019 at 12:48 pm

        I notice that this blog keeps putting my comments out of order of everyone else, which confuses me, let alone any readers.

        Christian, you say “What I’d really like to know is what they [mathematicians] can say about Keynesian uncertainty. Some have claimed that they cope but I am not sure. If you want I’d be happy to send you a reference with this claim and loved to get your view.”

        I’d welcome a comment on my blog at https://djmarsay.wordpress.com/ , e.g. on https://djmarsay.wordpress.com/2014/01/16/who-thinks-probability-is-just-a-number-a-plea/ unless you can find somewhere more suitable.

        Also, you cite concerns about AI in a link. I have some partly-baked thoughts at https://djmarsay.wordpress.com/tech/4141-2/ , on which I would also welcome comments.

        Perhaps the first thing to note is that Keynes’ Treatise on Probability is a mathematical treatment. It gives some well-developed theories (albeit in obscure language) of some types of Keynesian uncertainty, and I think it reasonable to say that Keynes managed to ‘cope’ with much economic uncertainty while recognizing that economies aren’t stochastic in the mathematical sense. But that leaves us with the problem of deciding what kind of uncertainty we are faced with today, for which there may be no off-the-shelf mathematical model. Indeed, Turing, in developing Keynes’ ideas, shows that there can be no universal definite method for solving this problem: the solution is modelling, not the uncritical adoption of some particular model.

        As suggested by your link, this issue is of much wider significance than ‘just’ economics.

      • Yoshinori Shiozawa
        September 13, 2019 at 7:42 pm

        Christian Mueller on September 12, 2019 at 5:43 pm
        >> I do hope that mathematicians can contribute a lot more than what mainstream economists are focusing on. What I’d really like to know is what they can say about Keynesian uncertainty.

        Dave Marsey on September 13, 2019 at 12:48 pm
        >> Perhaps the first thing to note is that Keynes’ Treatise on Probability is a mathematical treatment. It gives some well-developed theories (albeit in obscure language) of some types of Keynesian uncertainty, and I think it reasonable to say that Keynes managed to ‘cope’ with much economic uncertainty while recognizing that economies aren’t stochastic in the mathematical sense.

        I would like to emphasize what Dave put in the parenthesis. Keynes’s Treatise on Probability is quite obscure. Helped by this obscurity, it escaped from being detected an internal contradiction of Keynes’s arguments. In some parts of Treatise, Keynes admits distributive law among propositions. As this is a quite strong axiom (almost equivalent to assume Boolean algebra), it is doubtful if we can construct (or prove the existence of) a logical system that Keynes imagined to have constructed. It would be better to interpret Treatise as a book of philosophy and not of mathematics.

      • September 14, 2019 at 12:16 pm

        Yoshinori, I think your comment “In some parts of Treatise, Keynes admits distributive law among propositions. As this is a quite strong axiom (almost equivalent to assume Boolean algebra), it is doubtful if we can construct (or prove the existence of) a logical system that Keynes imagined to have constructed.” very important, and would appreciate a more precise reference.

        My own view is not that Keynes is entirely correct or adequate, but that it is the best I have so far come across. All works on the subject seem to me to require a generosity of interpretation if we are to make positive use of them. My current view that this probably inevitable.

        We can identify in the Treatise a claim ‘these plausible assumptions would provide something like “microfoundations” for the mainstream view”. I think we could construct a sound version of this. However my (limited) understanding of Keynes’ Treatise is that he originally (and possibly still in 1910) was attempting to justify his “microfoundations” as being “pragmatic” and thought his Treatise provided some mathematical shoring up of the mainstream view, while acknowledging the somewhat obscure and pedantic concerns of his reviewers. He seems to have changed his mind about the wisdom of the mainstream view (and hence his proposed foundations) by the time of Versaille, and re-wrote his thesis accordingly. I would have preferred it if he had been more thorough, but even so we could extract the logic of it and leave aside his views to form our own opinion. (Based on his later writings, this seems to be how he interpreted his Treatise, looking back. But, again, I’m not a historian.)

        I reserve the right to change my opinions when I’ve considered your more precise reference. ;-)

      • Yoshinori Shiozawa
        September 17, 2019 at 6:39 am

        This is the fourth time that I try to reply Dave Marsey. My post has been rejected and I came to think that this webpage reject all posts which contain font that is not English.

        ************************

        Dave,
        If you demand an English paper, there is none. I have written a paper in Japanese in 1985, the title of which can be translated as

        “Keynes’s theory of probability on quantum logic”

        of which I have no copy.

        If you read Japanese, you may find the paper at some University Libraries:

        Economic Journal (Osaka City University) Volume 85, Number 5. 1985.
        (In the previous post, this part was in Japanese characters.)

        If we admit the distributive law, it cannot be very different from Boolean logic. The idea of our paper is that we may obtain a model of Keynes’s theory of probability when we adopt the quantum logic. The most “familiar” logic that does not admit distributive law is quantum logic. But I am not sure if our paper is really successful.

      • September 17, 2019 at 7:07 pm

        Keynes discusses Boole’s theory, in which probabilities are bounded. Upper and lower measures aren’t distributive. What are normally called ‘Boolean logic’ and ‘probability’ are special cases.

        A link to ‘quantum logic’ is of interest, not least because of its uncertainty principle. Specific quantum logics seem too specialised, but if we ever get useful quantum computers we may come to appreciate the limitations of conventional thinking. What we need is some kind of ‘social logic’, which may not be at all precise.

    • Yoshinori Shiozawa
      September 14, 2019 at 12:14 pm

      Robert > The point is that at the turn of the millennium, there was a power movement in management studies centered on the development of entrepreneurialism, principally in Silicon Valley; people, however, who had tried to develop management into a nomothethic science after the war had nothing to do with it; on the contrary they opposed establishing entrepreneurial studies in business schools because entrepreneurship could not be studied “scientifically.”

      This is really astonishing. I have introduced entrepreneurship education (a course of two years for part-time students) in a new graduate school that was founded in Osaka City University in 2004. Of course, it is difficult to study the entrepreneurship scientifically. But, for the Business School, I thought professors and students think that does not matter. What is more important is to change their attitude.

      • Yoshinori Shiozawa
        September 14, 2019 at 12:16 pm

        Sorry. I made a mistake. This should be posted at different place.

  15. September 12, 2019 at 1:05 am

    “Adequate determinism is the idea that quantum indeterminacy can be ignored for most macroscopic events. This is because of quantum decoherence. Random quantum events “average out” in the limit of large numbers of particles (where the laws of quantum mechanics asymptotically approach the laws of classical mechanics).”

    • Ken Zimmerman
      September 12, 2019 at 12:19 pm

      Mxx1, indeterminacy may be quantum and perhaps we can ignore such indeterminacy “for most macroscopic events.” But most indeterminacy is part of the events of everyday life. On the physical human such “simple” events as weather forecasting, water pressure in the shower, the force needed to drive a nail, etc. are all indeterminate. Every mathematics algorithm is or can be made indeterminate. All human judgments are indeterminate. The results of every human plan or forecast are indeterminate. Amidst all this indeterminacy how do you conclude that indeterminate events “average out?” That’s an empirical question which obviously humans cannot answer. No theory can answer it, apart from any empirical basis for the theory.

      • Robert Locke
        September 13, 2019 at 10:02 am

        Ken, here is the problem. Some years ago I observed the top 20 US firms of 2012 in the United States
        1.Exxon 2. Wal-Mart 3. Chevron 4. Conoco-Philips 5. General Motors 6. General Electric 7. Berkshire-Hathaway 8. Fannie Mae 9. Ford 10. Hewlett-Packard 11. AT&T 12. Valero Energy 13. Bank of America Corp 14. McKesson 15. Verizon Communications 16. JP Morgan Chase & Co 17. Apple 18. CUS Caremark 19. IBM 20. Citi Group (Source: C. Stahl (2013). “Corporate Social Responsibility in U.S. and German Firms.” Master’s thesis. Graduate School of Business, University of Grenoble, 59)

        Some years before I had had observed that in the 1980s, there had been a “collapse” of a whole range of US corporations. The 2012 list showed that among the top 20 firms were many new ones in finance and banking and IPO stock market creations. So I asked myself where did this new US big firm prowess come from. I wrote a book about it with Katja Schoene (2004) The Entrepreneurial Shift: Americanization in European High-Technology Management Education. Cambridge University Press.

        Initial reading pointed me in the direction of regional studies. e. g. Lee, C.M. et al. (2000) The Silicon Valley Edge: A Habitat for Innovation and Entrpreneurship, Stanford University Press, A Saxenian (1989) Regional Advantage, Culture and Competition in Silicon Valley and Route 128. Harvard University Press.

        Nothing in my reading was useful in a predictive sense, that is, if we could fill in the matrix of a innovative region in fairly good detail, we could not create the conditions that would automatically develop into an innovative region. I learn nothing from reading this bloc entry to suggest that this sort of mathematical modeling could succeed predicatively. So we just proceed as historians.

      • Ken Zimmerman
        September 13, 2019 at 11:55 am

        Robert, what can I say? You reached a good conclusion. And made the right choice.

      • September 13, 2019 at 1:05 pm

        Robert, You say “I learn nothing from reading this bloc entry to suggest that this sort of mathematical modeling could succeed predicatively.” I’m guessing you meant ‘predictively’. But, mathematically, all predictions must be conditioned by predicates, and in this sense it seems to me that (with a suitable choice of predicates) modelling can succeed ‘predicatively’. For example, following Whitehead and Keynes, one can define an economic ‘epoch’, apply stochastic methods ‘as if’ the epoch were stochastic and then make the result a ‘prediction’ conditioned on the predicate ‘as long as the epoch is sustained’. It seems to me that with a bit of tidying up you could reconstruct most of mainstream economics like this. This would leave out mainstream claims that imply that the current epoch will last forever. This seems to me an improvement: as Keynes noted, they never have and probably never will. It also creates an agenda for a methodology to study epochal change, for which an appreciation of history would seem essential. (My view is that the attempt to model epochal change mathematically could be useful, as long as we didn’t take any resultant model too seriously: it would be ‘just’ a model. But my predicate here may be serious!)

      • Yoshinori Shiozawa
        September 13, 2019 at 6:36 pm

        Robert, I appreciate your effort. But, you are too hasty in your conclusion.

        What you have done must be a kind of experiment design to single out factors that will lead to regional success. It is only a method of experiments and not a very mathematical analysis.
        It may be supported by probability theory. This kind of experiment design must suppose many assumptions like independence of various factors (or variables), which does not well hold in general. So all our guessing is incomplete.

        We need a variety. It is good that you chose to proceed as historian. As you know well, mathematics is an endeavor which is very different from experiment design. It is an effort that is quite powerless to discover a new fact. But it helps to understand some secret relations among what we suppose to know. It is a power of logic.

      • Robert Locke
        September 14, 2019 at 10:08 am

        Ken<Yoshinori, and Dave,

        The point is that at the turn of the millennium, there was a power movement in management studies centered on the development of entrepreneurialism, principally in Silicon Valley; people, however, who had tried to develop management into a nomothethic science after the war had nothing to do with it; on the contrary they opposed establishing entrepreneurial studies in business schools because entrepreneurship could not be studied "scientifically."

        The US led in the development of these entrepreneurial study programmes, which became vehicles for the expansion of regional high tech start ups. And the flourishing of a us high tech culture.

        . The scientific management and neoclassical economics ensconced in universities and business schools did not further this development. Had people been waiting on them to act, nothing would have happened and still hasn't. Hope might spring eternal, but we can't wait much longer. Like the second coming of Christ; Christians expected the return soon after the Crucifixion, then great hope for return in 1000, then other moments of optimism. Oh yee men of great faith Yorshinori.

      • September 14, 2019 at 12:53 pm

        Robert, I have a jaundiced attitude to management fads but am not in a position to support any particular proposed remedy. But I note and approve of your use of ‘scare-quotes’ around “scientifically”. Much of my objections to rwer posts could be avoided if they referred to ‘mathematics’ in scare-quotes, leaving open the possibility that the problems are due to pseudo-science and pseudo-mathematics, not the real deals.

      • Robert Locke
        September 15, 2019 at 1:22 pm

        Dave, enptrepreneurial studiees is not a fad to be “jaundiced” about. I published my book at Cambridge UP in 2004, It is based on an extensive examination, through the literature and interviews, of those involved in or opposed to the entrepreneurial studies movement in management study program in the US. Germany, France, and the Czech Republic. I spent months in Silicon Valley talking to people and my co-author Katja Schoene, did the same in the three European countries involved. I note in the chapter on the expansion of entrepreneurial studies in the US ,”In the future the presence of enterpreneurial study program in American schools and their interaction with the high-tech community may be important for sustaining entrepreneurialism.” p. 80. People outside the US interested in the development of high tech start ups take these study programs seriously in, for example, the Fraunhofer Institutes in Germany that bring firms and people in praxis together. People everywhere are worried about falling behind.

      • Ken Zimmerman
        September 16, 2019 at 12:44 pm

        Robert, I’m not “jaundicing” entrepreneurial studies at all. I’m rejecting that they’re even possible. MBA schools declared they would train business managers, including CEOs better than any seen previously. That project has failed, with disastrous consequences. It’s my view any program that claims to turn out entrepreneurs will likewise fail, with even more drastic consequences. The cultural and historical circumstances that lead to entrepreneurial activities successful only some of the time cannot be reproduced in a classroom. Even an “in the field” classroom. The people thinking up these “grand” ideas and those who fund them need to stop pretending they can control and direct events around them with precision and certainty. We can certainly expand and liberalize education from primary to college to improve the chances of developing the creativity and observational acuity that spark both entrepreneurship and concern for the rights and needs of all humans and of the planet which is Sapiens’ home. There are likely other steps we can take in this direction. But training entrepreneurs is a forlorn and foolish desire.

      • Robert Locke
        September 16, 2019 at 1:15 pm

        Ken, I doubt if you have read my book, The Entrepreneurial Shift, Americanization in European High-Technology Management Education, Cambridge University, 2004. All of the doubt you raise, I raise there, and I am not naive about what can be learned and taught about entrepreneurism. You are, because you haven’t done the research on the subject. Nobody is saying that enterpreneurism is predictable, but a lot can be learned about how to go about it, especially in high – tech. That is what the Fraunhofer Institut is trying to do in its Berlin unit (SAF for Startups

        (Start your Prototyping Experience!
        Welcome Startups!
        You are the heart of Start-A-Factory. Together, we will develop your hardware idea into a tangible prototype.

        Start-A-Factory opened its doors in 2017. Since then, we work hard on optimizing the SAF space so startups find everything they need: we keep improving the working containers, IT infrastructure and also extended our tool & equipment portfolio.

        We have currently three startups that work on their hardware projects with us and helped us immensely to push Start-A-Factory from a great idea to a working concept.)

        The same goes on in the Fraunhofer unit in Stuttgart, a magnificent instalation that I visited long ago. The scienists working with firms there were mostly engineers; very few business school economists, but lots of people who studied economics=engineering. The German engineers have a long tradition working with firm in metallalurgy (ALLOYS), Chemical engineering, and Pharmaceuticals. Very close, and very success collaboraion. There is no reason for so much doubt, when the track record is there to examination. It is not there in economics and finance as you so well know, and as I pointed out in my articles in the rwer on finance market modeling (also oin Confronting Managerialism, 2011, which I wrote with JC Spender.

      • Ken Zimmerman
        September 16, 2019 at 2:36 pm

        Robert, correct, I have not read the book in question. I hope you do keep the complexity in mind. In fact, more than in mind. Make it a central part of the dialogue that goes into Start-A-Factory and other projects. Social entrepreneurism is the name I’d give the projects you describe. And Germany is a great environment for just such new versions of entrepreneurism. Because this is certainly not the American version of entrepreneurism. Just make certain it continues as a collaborative, where scientists-engineers follow as much or more than lead. Scientists tend to lose touch at times, with all those big words and bigger theories running through their minds and bodies. Good luck.

      • Robert Locke
        September 17, 2019 at 9:34 am

        Ken, in 1900 Britain was the biggest manufacturer of cotton cloth in the world and a major producer of woolens. Germany was by far the major producer of color dyes. One would have thought, since Cloth was britain’s forte, it would excel in color dye production. We know the great German firms of the time, Hoechst, BASF, Bayer, Casella, etcc.who produced these anilin dyes. Why the Germans gained such an advantage, has a lot to do with the entrepreneurial environment, the connection between research and firm development in German, so many, for example, came out of Liebig’s seminars. These environments, research cultures, are a key to understanding regional research prowess. One cannot predict who will be a entrepreneur, but it is no accident that the Rhine River environment fostered German predominance. There is a very good “old” book on the subject (1907) Sydney H. Higgins, Dyeing in Germany and America; with a chapter on Colour Production. Manchester UP.

      • Ken Zimmerman
        September 17, 2019 at 1:39 pm

        Robert, perhaps the British cotton manufacturers simply saw no need to color cotton fabric. Or, they preferred to leave it to their inferior, Germany. The British are an interesting society. I’ll take your word that the connection between research and firm development (German firms) and Liebig’s seminars explains the connections. The Rhine River environment sounds like a German Silicon Valley. Putting all those brainy and ambitious people together has got to create lots of fights and lots of ideas, and a great push to create. Or maybe it was just the older Prussian discipline.

      • Robert Locke
        September 18, 2019 at 10:52 am

        One thing the color dye firms in Germany did was send out their salesmen, recruited from university trained in organic chemistry, to work up the dyes for British textile producers, which, not surpringly were the dyes manufacturered by their color dye firms. Free dye provision, but with the dyes of their firms. Welll….Its in Higgin’s book..

      • Ken Zimmerman
        September 18, 2019 at 12:08 pm

        Got it, Robert. The Germans had well educated salespersons who worked up dyes to the specifications of the British yarn companies. In other words, the Germans took the lead in the dying of cotton by “taking the lead” in marketing dying of cotton. Smart move.

      • Robert Locke
        September 19, 2019 at 12:17 pm

        Similar advantages occurred in networking in manyy other branches of industry, in aluminium, for example, where the French hydroelectric based firms developed the industry in the Alpine region, but they recruited their workers from German universities where the appropriate study programs existed.

    • Yoshinori Shiozawa
      September 14, 2019 at 12:20 pm

      Robert > The point is that at the turn of the millennium, there was a power movement in management studies centered on the development of entrepreneurialism, principally in Silicon Valley; people, however, who had tried to develop management into a nomothethic science after the war had nothing to do with it; on the contrary they opposed establishing entrepreneurial studies in business schools because entrepreneurship could not be studied “scientifically.”

      This is really astonishing. I have introduced entrepreneurship education (a course of two years for part-time students) in a new graduate school that was founded in Osaka City University in 2004. Of course, it is difficult to study the entrepreneurship scientifically. But, for the Business School, I thought professors and students think that does not matter. What is more important is to change their attitude.

      (Forgive me for double posting.)

      • September 15, 2019 at 5:44 am

        My view, technology start-up success is an environment subject to radical uncertainty. This can be “proven” since there is less money returned to investors in the global VC sector than goes in from this same cohort of investors; that is, it is a gambling environment, an environment where you need luck to either pick or be a winner.

        So why do some VC’s and some entrepreneurs seem to have systematic success? Well, they solve their problems and create their opportunities by having access to unusually high levels of capital.

        That is, they throw money at their problems. If all access to capital was equal there would be very, very few recurring winners.

        So why bother seeking the habits or traits of successful entrepreneurs? There is a point and that is that the right basic personality and skills are a necessary (but NOT sufficient) trait for success. So even if you have the right personality and right skill set, you may still fail as an entrepreneur. In fact you are more than likely to fail, time and time again.

        There’s a bias in the social media environment that we live in that makes people think they can “cargo cult” their way to success. For example, adopt the 7 habits of highly successful people and you will be one. Or, eat fruit, be an arrogant dickhead and wear all black, and you will end up as CEO of Apple. This is not the case; these are correlations and not causations.

        So, a final word, any measure of your “entrepreneurshipness” (or whatever) should be treated with the disrespect it deserves. By all means, find out if you have the necessary traits and skills. Note well though, even if you do, you need access to bucket loads of luck, or access to enormous amounts of risk capital (which also requires bucket loads of luck). Whichever way you look at it, luck is needed. And you can’t cargo cult yourself into being lucky. The visitation of luck is a random thing. Some get it first time, and forever after think they are geniuses. Some never get it. Some give up before they get it. Only the mildly insane keep going once they realize luck is needed, so mild insanity is a trait that is also needed on most cases. And luck is random by the way. You can’t influence it. People aren’t lucky; lucky is people. The only way you can influence luck is by stacking the game using capital. Rigging, in other words. If you could just follow a formula to success, then the owner of the formula wouldn’t be spending their time teaching it for pittance money, they’d be flogging it to highly successful entrepreneurs for an equity slice of the guaranteed outcome.

        A final point: I do think that heuristics are best learned from one’s mistakes, especially in complicated areas of human activity like start-up businesses that involve radical uncertainty.

        Which in turn explains why apprenticeships are more useful than degrees in training people in these areas. So, no, we don’t need degrees for startup executives or VC’s.

        Why are heuristics are best learned from mistakes? I think mistakes and the associated pain hard-wires into us an inability to override the heuristics.

        Which is another way of saying that it’s very common to use rational thinking to override heuristics. That’s because humans underestimate the reach of radical uncertainty.

      • Ken Zimmerman
        September 15, 2019 at 12:49 pm

        Mxx1, I agree with your comment. But let’s go further. In the financial realm, your conclusion applies broadly. Today the number of “financial advisors” grows each day. Small investors sometimes pay large fees to these advisors for the “best” strategy to follow in investing. But all the formal data, and the everyday experiences of investors shows that stock and bond prices are a “random walk.” There is no advice to give because there is no pattern for stock and bond prices apart from a few basic emotional findings. Stock prices go down when investors are frightened, while bond prices go up. Stock investors tend to jump on during an upward run in prices, while bond prices decline with each jump. Trust and gut feelings are a big reason that investors choose this stock or bond over another. But your remarks also apply outside financial investing. For example, Edison was an inventor first. He only became what’s today called an entrepreneur after several of his inventions were successful. Tesla became a showman in demonstrating his flashy inventions because he had the huge wealth of Westinghouse underwriting his work. Elon Musk parlayed money from several service businesses he created with virtually no capital investment into the creation of Tesla, a solar energy company. But what made the company a success, like Amazon purchasers of its stock overvalued its stock price by 500% or more. Which gave Musk huge amounts of money to build one of the largest technology companies in the world. It also gave Musk the freedom to make many mistakes, which he has, and, more importantly to learn from them. No doubt Musk is a smart person (degrees in economics, physics, and applied mathematics) but on several occasions he’s taken a path that numerous reporters and investors did not consider rational. He has good feel for what works and what does not. All chance and luck. There is no “formula for success” here that one can find or follow. Another good example is the “Robber Barons” of the 19th century. Rockefeller, J. P. Morgan, Cornelius Vanderbilt, Andrew Carnegie, E. H. Harriman, Jay Gould, Henry Clay Frick, etc. All were immigrants or the children of immigrants, all were brutal in their personal lives, all would commit any act, up to and including murder to be rich, and all knew the importance of political alliances for their goals. But many in the second half of the 19th century showed these same traits, yet they did not become either rich or famous. The Robber Barons became both. Why? The expanding America of the post–Civil War era was the paradise of freebooting capitalists, such as the Barons, untrammeled and untaxed. They demanded always a free hand in the market, promising that in enriching themselves they would “build up the country” for the benefit of all the people. Perhaps it was their talent for lying and chicanery that cemented their success, or simply their capacity for sheer bullying? But with the same leanings and talent, others were imprisoned, tarred and feathered, or lynched. So, what kept the Barons out of the tar and feathers, and off the scaffold? No one can say for sure! Right place, right time. Or, more likely they often avoided by chance the wrong time and wrong place.

      • September 15, 2019 at 5:50 pm

        Ken, the crux of the matter is that neither society as a whole not any specific human beings within it can create depletable, or to be worn out, positive material entities as a dynamic continuity, in terms of its unit of account; regardless of all appearances to the contrary. Marx tried to prove the opposite in chapter 3 sect. 10 of his ToSV and, while certainly no dummy, ended up babbling like an idiot. Read it for yourself http://ciml.250x.com/archive/marx_engels/english/tpv.pdf, my critique of it http://www.vcn.bc.ca/~vertegaa/Marx_Debunked.pdf, or even just an extended abstract of the latter http://www.vcn.bc.ca/~vertegaa/Marx_Debunked_abstractx.pdf.

        A unit of account is created as debt. This is known by CBs since the 30s. And capital never leaves the debit side of a ledger. Materialism, either expressed in math, or in a historical/anthropological manner is incompatible with a system of accounts. If the reality of the latter is important, there is no choice but to drop the former.

      • Ken Zimmerman
        September 17, 2019 at 1:02 pm

        John, much too limited a view. You miss much more than you encompass. Mauss and Polanyi shared a concern with how societies utilize a combination of economic principles that are distributed widely in geography and history, but may be variably combined to give a new impetus and direction to our common affairs. Both of them took a close interest in contemporary social experiments carried out in the name of Marxism, which they felt distorted that tradition’s promise of a fully emancipated human economy. Like Marx, they rejected the utopian project of reducing society to capitalist markets. They saw the economy as being pulled in ​two directions at once: inwards to secure local guarantees of a community’s rights and interests, and outwards to make goods deficiencies of local supply by engaging more inclusively with others through the medium of money and markets. Mauss and Polanyi each developed principles of great generality which throw much light on everyday life, without ever taking up ethnography as a personal vocation; in doing so they made intellectual bridges between history, ethnography and critique. Both reached out to the great political questions of their day, questions that have not gone away and need to be reviewed from the perspective of our own moment in history, again and again. Just a suggestion, mind you.

      • September 18, 2019 at 8:41 am

        Let’s put Mauss’ and Polanyi’s views on hold for a moment Ken, and go back to how an economy got its start.

        The ancient Sumerians already knew better. How do you think they would have reacted to the proverbial visiting anthropologist, telling them that the monumental change in their society they had just wrought wasn’t the tool set used in organizing their means of food production and distribution; but the fact that from that point on forward, they were no longer living on the land naturally, but inside those cuneiform scribed tablets instead? And because of that fact, according to anthropology’s first principle of culture, they could no longer step outside of that world back into their former existence and look at their human invention objectively? Spurious interpretation of your position, irrelevant, or perhaps not a fair comparison regarding the economy of ours? Why?

        My vision is indeed limited. It limits itself to what is inferential to a set first principles, taken from outside the to be deduced economic structure, in its terms, but from within the umbrella-like domain of Justice. And accordingly, it can deal objectively with the injustice of cutting short the innate drive of human beings to better themselves through the tool of their invention, aka an economy, by a clique of robber barons and their self-serving institutions. Of course you could argue, along with Lars Syll and confrère inductivists, that such analysis doesn’t add anything to what is already inherent in those first principles. But that logic pertains to “axioms” obtained within any field of study. In this particular case though, it would also dismiss that part of the domain of Justice, as the jurisprudence of the body of law dealing with the consequential meaning of those premises within a deduced economy, right along with it. A pretty weighty position for inductivists to take, considering the consequences, don’t you think? And to what end? Since no proof is possible, arguing till the cows come home? Now I suppose if your “wide” approach could be indicated to have the ability of showing a tangible effect that would better mine, then all the more power to you with my deference. But your admission of lacking a real solution of your own shows otherwise, no? How then can you conclude that my reality is missing too much, when your far more encompassing one fails where mine succeeds?
        Perhaps all you perceive to be missing from my approach, concerning an economy’s reality, is extraneous and/or misleading piffle?

        I take it you mean Karl Polanyi and not his brother Michael? I would consider myself as following in the footsteps of the former; since, at least remembering reading somewhere, he too held onto the view of the economy being a subset of human existence and thus finding its determination outside the bounded economic structure. This would be in sharp contrast to, and incompatible with, your all encompassing intranscendable* “culture”. I don’t now anything about Mauss. But regardless, my reality of an economy stands until shown to be either incoherent, critically incomplete, or irrelevant due to overriding other concerns.

        *) Sorry for using a non-word. But it should be one, no? (Thanks Dave, for the inspiration)

      • Ken Zimmerman
        September 21, 2019 at 12:53 pm

        John, for most of its 200,000 years, Homo sapiens lived nomadically. Hunter-Gatherers they’re called today. We don’t know the name they gave themselves. About 10-12 thousand years ago Sapiens invented agriculture, fixed location living, and domesticated plants and animals. The Sumerians were among the first groups to travel this path. After these inventions, humans continued inventing. They invented a stronger emphasis on group/community cohesion (which I call sociality), politics and government, economy, markets, religion, warfare, writing, mathematics, etc. All to support humans’ new form of life. After these changes, it would have been impossible for humans (as human groups) to return to a hunter-gatherer way of life. As more time passed, the more taken-for-granted became the domestic way of life based on the rules of government, economy, farming, and religion. In this situation, what does it even mean to look at the situation “objectively?” Except for a few religious scholars and philosophers, research seems to indicate such questions never even entered the consideration of everyday Sumerians, even monarchs.

        Most of the parts of the Sumerian economy exist today. Workers, bosses, pay, loans, markets, etc. A comparative study would be interesting.

        The only “first principle” recognized by Anthropologists is culture. The first invention of Homo Sapiens. You write of justice. Important in almost all cultures. But which version of it are you referring to here? The justice of trial by combat, the justice of waiting for God to act, the justice of argument and persuasion, the justice of law codes (such as the first from Hammurabi), the justice of fate, the justice of community judgment, etc? There’s an old joke among environmental activists. When someone says, “throw it away,” the response is “to where?” Humans existence is finite, as is the physical universe of which humans are aware. So, I ask you, where is this “outside” from which “first principles” arise? As to transcendence, it is certainly something that’s a part of many human cultures. But in dealing with it, I prefer to stick to the cultures themselves and the work they do. I can, within the limits of my birth and upbringing picture a transcendent transcendence. But this always reminds me of “contemplating one’s navel.” Perhaps a dalliance worth considering. So long as it does not interfere with the purposes for which it seems humans invented culture. “Just as a human cannot survive without a sense of their own self, so they and those with whom they share a society cannot survive without culture, a sense of shared self. Humans are humans only via culture. Every culture organizes life around a few simple principles, activities, and beliefs. The other institutions and activities of the society hang from that core like branches from a tree trunk.”

        As to the relationship between culture and economy, check here for my views, https://rwer.wordpress.com/2019/07/10/there-is-no-separation-between-culture-and-economy/

      • September 23, 2019 at 6:49 am

        Sorry Ken, I meant to have said the Sumerian first estate, its policymakers of the epoch. This would have been the clergy at the palaces/temples instructing overseers in the fields, likely with feedback.

        Looking objectively at an economy’s workings would mean having the ability of perceiving, from within the confines and perspective of the set in accordance with to be purposeful axiomatic prescripts of the subset, the extent of that subset (an economy) ongoingly returning a 1 (purposeful) or a 0 (waste) to the set. The consequent either-or is binary and not integrative within the same thesis or epistemology. The only way to reach a “higher stage of truth” integratively, is by means of applying dialectics. Non-utopian human beings, in their search of betterment, either follow the path as laid out by society’s “golden rule” which is meta-axiomatically underlying the thesis, or the one of unfettered liberty by egocentric utility maximizers laid out as meta-axiomatic to the antithesis. Either faction cannot do without a judiciary to uphold their point of view as true. Anterior to any argumentation while both are equally valid initially, from the a-priori perspective of a synthesis, they’re also equally incomplete. This would mean that the antithesis cannot be true all by itself; as neoclassicism would like it be, and indeed depends on that being the case. For more see my ontology paper referred to earlier.

        I’d say that the seeking of betterment, whatever form this may take including altruistically, is a fair-enough assumption as to the motive involved for anyone to get out of bed in the morning to become economically active; and hence its fulfillment can be held to be an economy’s purpose. Only creatable purposeless structures can exists without there being an “outside” involved; since the information necessary to gather a purpose isn’t available from within the workings of any human-made structure. If this basically inductive assertion is false however, I’d sure like to know about it. This ought to make clear the parameters of potential further debate as far as I’m concerned.

        You don’t seem to be putting any stock in my backed-up claim that Marx, while setting out to prove the opposite, unwittingly proved a material economy, that’s also accounted for in terms of a unit of account, _cannot_ exist as ongoingly replacing its own materiality. The solution to the enigma, as the system manages to exist just fine, is to stick solely to a non-material system of accounts in its explanation; in the form of a matrix of inputs and outputs, indeterminately valued micro-economically in time but yet determinable as _having been_ of a certain value over time. The problem lies in overcoming the extreme counterintuitiveness of capital’s nature as a to be resolved negative, instead of the depletable positively valued entity that from all (cultural) appearances seems so obvious. The human mind abhors not being able to analyze from a static and determinate point of departure. So an out-of-the-box type of reasoning is required, that drops the materialism inherent in fixed econometric coefficients, differential equations, and algebraic expressions in math, as well as materialistic historical-anthropological narrative explanations of an economy’s workings; in the full recognition that radically uncertain to be dynamically materialized expectations, and not statically already existing material entities, are the economy’s building blocks.

      • Ken Zimmerman
        September 23, 2019 at 12:15 pm

        John, I find some of your comments hard to follow. But I think I disagree with most of your comments.

        First, the Sumerian “first estate” also included the monarchy.

        Second, no economy is entirely purposeful or entirely wasteful. Most fall somewhere in between when compared with other existing or historical economies. As they say, even a broken clock (analog) is correct twice a day.

        Thirdly, integration via dialectics is only one possible way to achieve an alternative, not necessarily higher set of facts. Could not be truth, since truth only exists in relation to some set of rules that define it. For example, evolution at times destroys entire evolutionary paths, to replace them with others. Sapiens continued but Neanderthals did not. To be fair, some of the genetic elements of Neanderthals are present in Sapiens today. In that sense, Neanderthals were not completely wiped out. The same applies to Sapiens’ societies. No member of a Sapiens society can reject every element of that society, since that would leave that person with no identity. But a member can defy certain parts of a society, while adhering to others. The issue is how far defiance can go before the other members destroy the rebellious member as a threat to the society. In this situation the notions of liberty and freedom are at best always changing, being re-negotiated. There is no synthesis in human societies, only struggle and re-negotiation. This isn’t ontology. It’s humans “working things out,” including killing as a final act of settlement.

        The following have been offered as the reasons humans get out of bed in the morning, or as archaeologists say, “leave the cave.” Fear, greed, hunger, lust, conquest, love, and just simply not dying from starvation or exposure. No one knows exactly how they fit together to motivate humans. As to the outside, people invent it as means to serve the above motivators. In other words, humans have a stream of experiences which they divide up (place into buckets). Over the history of humans this stream has been divided into buckets thousands of ways, no two the same. Human imagination makes the world in which humans live. If there is anything apart from that, humans can’t glimpse it. As to parameters, you’ll need to check with the people doing the work. They know the aims of their actions.

        Systems of accounts are systems to codify the economy invented by people. It not only reduces confusion and gives a sense of certainty and thus security, but also solidifies power, prestige, and class divisions in a society. If the materiality is a milk-producing cow, the codification might be livestock for milking valued at xxxx. The two are certainly not the same, but the latter can be used quite effectively to sell or purchase a milk-producing cow. As is well known, trouble arises on both parts. When the codification is unclear, intentionally or not or when the cow is sold but the books of code don’t include the change. Yes, some human societies socialize their members that analysis can go forward only from a static and determinate point of departure. Other societies do not. No matter the society, however, each analysis is necessarily ad hoc, since in each case the meaning of analysis must be interpreted. Most, but not all follow past experiences.

      • September 26, 2019 at 6:46 am

        That’s alright Ken, in spite of our political views probably being pretty close, I find myself disagreeing with most of your comments too. Don’t know whether in anthropology textbooks your definition of dialectic reasoning holds, but to the best of my knowledge in philosophy a dialectic is a back-and-forth _between_ alternative (opposite) points of view; not to _reach_ an alternative one. As held to be true, these alternatives exist already; but with both parties agreeing that their truths could be approved upon or possibly merge through dialogue. Hence, a higher stage of truth… Come to think of it, we’re involved in a dialectic form of truth finding right now. At this more fundamental level, a fact and a truth is a distinction without a difference. The distinction you’re making at the level of culture is plagued by the problem of infinite regress.

        Conflating human-made realities with natural realities doesn’t get us any closer to an understanding of what is going on, and hopefully convince others so that a change may be effected. Culture, evolution, power struggles, psychological proclivities, etc., which society finds itself having to deal with, cannot be numerated. An economy on the other hand can only exist thanks to a unit of account, and a balancing out of positive and negative accounting entries; or, for as long as the appearance can be upheld, that a balance is indeed achievable. Does this affect the materiality of produced “stuff” and thus its reality in the natural world? No. But it doesn’t make commodity production, distribution, and its underlying actuators subject to effective explanations in terms of math either. In the former sense, an economy may well collapse; but, with the necessary adjustments in accounts made electronically overnight whereby hitting the underlying cause of the disruption, be up and running again by morning. Can we trust authoritative power to deal with such an eventuality in the right way? Not if Pelosi’s response to the ’08 crisis and the subsequent implementation of Q.E. is any indication. Having surrendered the charge of the henhouse to the fox is proof enough of that. Has this hurt society? Possibly still not seriously enough for its majority, but ask any of those whose aspirations to better themselves had been cut short, and the inborn drive to yet do so found its outlet for them in opioid use and addiction; or, those barely surviving in the ever growing miserable tent cities in the US. These are real-life consequences of a misdirected policy. Ignorance is no excuse for authority to wreak havoc the way they did, and, unless educated, doubtlessly will do so again; either by taking the wrong action, or by taking no action at all. The consensus seems to be that another crisis, worse than the last one, is likely to happen and rather sooner than later.

        How is your conceptual codification going to help in the education of those authorities, in either preventing or mitigating the effects of an economic collapse? As far as I understand you, codification is changing one set of positive values for another set of positive values. How then could this possibly apply to a system of accounts, that, so as to work, universally balances negative with positive values and nets out to zero? Unless you can come up with some logical explanation, as to how your world of depletable positive values can replace itself and continue existing in terms of solely positive values, your perspective from culture as first principle isn’t coherent enough to educate anyone; especially since you don’t seem to want to let go of accounting. History and anthropology do indeed provide interesting narratives about economies. But everything you’ve said so far indicates to me these aren’t the right tools, both for explaining an economy’s fundamental properties and in providing workable solutions to arising problems.

      • Ken Zimmerman
        September 26, 2019 at 2:40 pm

        Yes, John we seem to have quite different views. Dialectically so. That, by the way is how anthropologist usually use the term dialectic. To note two opposing or opposite portions of a culture. For example, “Hellenic” culture. Greek culture is structured in terms of a dialectic between that more public, other-directed, idealized and classically European self-representation and a demotic, insider’s model that Herzfeld terms “Romeic” (a version of the gendered “appearance”/“reality” distinction drawn by Ernestine Friedl (1967). Associated (partially) with private social identities, the Romeic model also acknowledges to more recent, non-European (e.g., Turkish) entanglements. Herzfeld emphasizes the relativity of the distinction, their ability to trade valences, and their resonance across Greek discursive domains: within households, between nations.

        If, as anthropologists believe facts, whether identified as “truth” or not are culturally based (entangled, if you prefer) then neither facts nor truth from one culture would even exist in many other cultures. For example, psychological facts and truths are believed in and taken seriously in the west. But don’t exist in much of Asia.

        John, before there can a ‘unit of account,” there must be something to count. Humans about 25,000 years ago (we estimate) began creating domesticated animals and domesticated plants. Did these exist before humans created them? I say no. Plants and animals not so categorized were categorized as non-domesticated, wild, non-harvestable. Your argument seems to be that the ‘materiality’ of these animals and plants existed before they were categorized. That’s impossible to say, since they were embedded in a stream of experiences into which humans had not yet drawn these particular dividing lines. Lines to say this is domesticated corn and this is maze. Reality is what humans pay attention to from the ongoing stream of experiences that is human existence. Until humans pay attention to it, corn does not exist, wheat does not exist, money to purchase/sell either does not exist. Remember the only viewpoint we have for these things is human. More particularly human shared reality, culture. As you point out after humans invented domesticated animals and plants, then invented money and economy to spread them around human communities. Later they invented other ways to move them around, such as financial and commodity markets. Governments and armies were invented to protect all this stuff humans considered necessary and sometimes essential. And then came the in inevitable disputes over the distribution of both products and services, and the money they generate. How is all this going to help prevent or mitigate the attacks of authoritarians and oppressors? Or in improving the situation of ordinary citizens? In my view, it helps these citizens recognize that all the commodities, markets, and pricing that keep them down are human created, and thus can be changed by humans, including themselves. This is about as clear as I can make it.

      • September 26, 2019 at 7:59 pm

        As a mathematician, I agree with John that accounting is important, while agreeing with Ken in so far as the practice of accounting is unavoidably pervaded by (and perhaps corrupted by) cultures. Thus while it may be an improvement to replace GDP by something that better reflects the long-term interests of humanity, it may also be necessary to improve our cross-cultural (or maybe trans-) understanding of the nature of accountacy.

        For example, Wittgenstein’s notion that conventional probabilities correspond to measures of uncertainty can be used to argue that accountancy practicies can never escape radical uncertainty, but this doesn’t mean that they might not be ‘useful’: so long as we understand their limitations and contextualise them appropriately. (Which we don’t. Some improved economic methodolgy is required, with ‘logical’ and ‘cultural’ implications. Suggestions?)

      • Ken Zimmerman
        September 27, 2019 at 11:26 am

        Dave, bravo, I’ve never heard it put like that. That accounting is “corrupted” by cultures. This is how I see it. Mathematics, let along accounting are not the foundation of anything. They are just tools that some cultures invent to be practically useful. And no two cultures invent the same mathematics. Western mathematics is mostly the result of inventions from other cultures (Islamic, Indian, China). Descartes and Leibniz did create Calculus, sort of. Calculus had already been invented in the Islamic regions when they published. Mathematics and accounting are cultural artifacts. Apparently, in Europe from 1400-1700 most mathematics was borrowed. And it appears Newton, Galileo, and other early scientists didn’t even notice. This would be a great area of research for someone unlike me. Someone who’s a committed academic.

        But you are correct that it’s the usefulness of the tools cultures create that determines their fate. Unfortunately, today it’s sometimes difficult to determine if any specific tool (mathematics included) is useful. It depends on our understanding of useful, which is also entangled in culture. Since it seems the push toward a multicultural world is now dead or dying, agreement on this aspect of culture as well as many others is breaking down.

        Accounting is related to but not the same as mathematics. So why does accounting employ the numerical metaphor. It does so because money, numbers and accounting are interrelated and, perhaps, inseparable in their origins: generally they are all thought to have emerged in the context of controlling goods, stocks and transactions in the temple economy of Mesopotamia. Accounting is about control. Mathematics overall is about control as well. The control of assigning numbers to things in our cultural universe either directly or via equations. Such numbers, it is believed allow comparison and study, and more precise decision making. Assuming, of course the objects being counted can be culturally distinguished and are manipulable.

      • September 28, 2019 at 7:40 am

        Ken: I don’t know if you’re aware of it, but this has been my argument, from a diametrical perspective, all along. Accounting is a tool, and a system of accounts is human-made for a purpose. If the tool can be made to ‘game’ the system by individuals for nefarious purposes it wasn’t designed to do, i.e. by unbalancing supposed to be balancing accounts with resulting personal (real or perceived) benefits accruing to the gamers/derangers to the detriment of the rest, then _redesign the system_. We still haven’t been able to construct a system that redesigns itself, without there being an “outside” setting its purpose; and that includes an economic system. So I’m puzzled by your insistence that we yet live inside an economy and are unable to look at it objectively and determine what changes will need to be made, so that the system no longer _can_ be gamed. Gaming the economic system basically happens as a result of not only condoning but even rewarding _net_ saving, in the mistaken belief that surplus capital then becomes available as an impetus to growth and better living. Having a coherent theory of capital isn’t deemed to be important, because what capital ‘is’ is obvious enough. That such “capital” could be created freely out of thin air and without encumbering the existing structure, never enters the consciousness of most economic “thinkers” either. Never mind that we’re long since passed the point where growth is neither necessary nor, as far as this concerns limited resources, a sustainable possibility. Basically this would leave growth in the domain of learning-by-doing with a concomitant reduction in person-hour input.

        While applauding MMT’s effort to wrest economic control away from reigning neoliberal clutches, it yet condones the desire of the “public” to net save. Its well-known response therefore is a treating of the symptoms rather than an attempt to effect a cure. The only conclusion I can come to is that either its proponents didn’t consider _net_ saving of the public as a whole closely reducing to the savings of the proverbial 1%, or they don’t care.

      • Ken Zimmerman
        October 1, 2019 at 12:57 pm

        John, first you must consider what you intend by objective. Is that without preconceptions? Viewing all aspects? Seeing the “truth” of the economy? One of the things that happens as cultures are constructed is that after the work is done, even those who did the work lose touch with what they did, why, and the specific results. All they see is the finished culture, including the economy. The burden is greater for those who are born into an existing culture. They are socialized from birth to accept what is as unchangeable, in most respects. Take Trump for example. It was widely known and reported that he was a conman, a fraud, a criminal, and a business failure. Yet, our culture’s focus on money, admiring people with money, and the desperation involved in dealing with a largely fixed capitalist economy, led to enough votes for him so he became president. Now his actions are those of a conman, fraud, business failure, and criminal – and many Americans act surprised. Of course, changes in the economy are possible by several routes, some more violent than others. But we can never be certain these are the changes we want to move the economy in the direction we prefer. Even if all, or even a sizable minority of the population believe that direction is correct. There are many ordinary citizens who would agree with the changes you propose, and even some economists. But what about the others? What’s your plan for them? Even your final conclusion has no guarantees. “The only conclusion I can come to is that either its proponents didn’t consider _net_ saving of the public as a whole closely reducing to the savings of the proverbial 1%, or they don’t care.” Plus, just how do we determine whether the error you perceive was from a lack of concern or lack of caring? All this, and more is why I use only one, provisional definition of objectivity – examining an object of study from as many perspectives as possible with as many tools as possible. And hoping we find some pattern here to which we can attach a line.

      • October 6, 2019 at 2:26 pm

        I don’t think your questions about feasible objectivity are relevant Ken, at least not for an economy where any present consists of creating its future while foisting a to be resolved debt upon it, with its agents concurrently living off past accomplishments through a resolution of debt incurred in the past; and as such determining the process, begetting a continuity. Given that such an economy exists for a purpose, it strictly becomes a matter of whether that purpose is being fulfilled (or not) by individual actions toward that goal. If an economy’s goal is sustainable betterment without detriment, logic will override any successive preconceptions as well as possible further aspects of the process. So the only preconception needed in this case is that an economy has to be purposeful. Regardless of culture, while the path to get there may well be unclear and subject to a misinterpretation of possibilities, no one who is economically active does so purposelessly, nor forgets the reason for doing so. If logic furthermore shows that all capital-investment expenditures will entail the imposition of a to be resolved debt upon society as contemporaneously being inflationary(1) (i.e. lacking concomitant net betterment, accruing to any reigning standard of living), then it becomes a matter of discovering how that debt becomes resolved in the process of goal achievement. Lacking resolution, such debt will logically(2) turn from asset into an unrepayable debt, as solely ongoing capitalist returns on investment comprise the required means to avoid the latter without detriment; either as spent directly, or by hiring the unemployed.

        What “others” do you have in mind? Anyway, I have no “plans” for anybody. The task at hand is educating policymakers to rid them of a neoliberal mindset. If MMT can do that and engender a “green” new deal, great. It looks like no one else around is in a better position. A mondragonization of our economy and the implementation of a CB cryptocurrency(3), if a deemed to be necessary means to deter and/or eliminate system “gaming”, can wait.

        IMHO pattern-seeking in a radically-uncertain economy, belies radical uncertainty and is a contradiction in terms. The radical-uncertainty problem, because of the existing option that’s open to the public to either C or I(4) their income, can only be solved by transcending the physical reality of static algebraic expressions, that are inherently determinate, into a world of statically indeterminate and dynamically to be resolved accounts. Unless there is a form of math dealing with indeterminate identities, math has no role to play in elucidating an economy’s workings(5).
        1) Minsky (’78, p. 858) https://www.jec.senate.gov/reports/95th Congress/Special Study on Economic Change Part III (915).pdf
        2) from the perspective of debts and assets being opposite sides of the same coin, and having a coherent theory of money.
        3) with block-chain technology; so that the source of all obtained income becomes discoverable, though not necessarily an open book.
        4) in the above sense as being indeterminate until a dynamic resolution through Y; not the Keynesian axiomatic statically-determinate I. Keynes was, again IMHO, hopelessly confused and incoherent by holding on to a couple of contradictory first principles. (i.e.) There is nothing radically uncertain about Y=C+I as a determinate all-encompassing point of departure to derive a theory from, while yet at the same time incorporating an axiomatic radical uncertainty, that governs the theory composed of the same algebraic expressions, as well.
        5) first posed well over 200 years ago now for Pete’s sake. Sismondi, 1803. De la Richesse commerciale. Vol. I, p. 104. https://ia601404.us.archive.org/6/items/delarichessecomm01sismuoft/delarichessecomm01sismuoft.pdf “Those who are not familiar with the language of algebra, pay no attention to calculations set out in this form; those on the contrary, who, by once having formed the habit of looking at ideas and figures in an abstract manner, dislike seeing numerical assumptions made, as these always appear contrived or inaccurate to them. To satisfy both groups, I shall generalize in this footnote what I have said in the text and thus for once apply this language of the exact sciences. But I repeat, I shall do this only once, for to apply this language to a science which is not exact is to expose oneself to continuous error. Economics does not rest solely on calculation, the facts are constantly altered by a host of observations of an [intellectual] order which are not subject to calculation. If permanent abstractions are to be made of the latter, it would be just as if a mathematician were to chance that suppressing some essential terms in each of his equations [would not make a substantial difference in the outcome].” (my translation)

      • October 6, 2019 at 9:21 pm

        John,

        “Unless there is a form of math dealing with indeterminate identities, math has no role to play in elucidating an economy’s workings”

        Didn’t Keynes say much the same ( https://djmarsay.wordpress.com/economics/keynes-essays-in-biography/ )? Doesn’t what he calls ‘modern mathematics’ fill some of this need? (E.g., https://djmarsay.wordpress.com/logic/booles-laws-of-thought/ https://djmarsay.wordpress.com/decisions/rationality-and-uncertainty/broader-uncertainty/keynes-treatise-on-probability/ ). What else is required? (Honest questions from a confused mathematician!)

      • Ken Zimmerman
        October 7, 2019 at 12:14 pm

        John, just like for any group of observations there are many, a great many possible theories, so for any group of purposes or goals there are many cultures that can be constructed to pursue these goals. Generally, the evidence indicates humans first created culture to protect the species and provide it room to develop. The economic parts of culture, based on the available evidence were intended to provide the physical means necessary for species survival – food, water, shelter, clothing, etc. But there is it seems no one form for culture to serve its goal, so there is no one form for economies to serve these goals. So, if Sapiens is generally not near extinction, and the physical needs of most members of the species are being met, then we can conclude culture and economies are performing as needed. Objectivity in studying cultures and economies is only important if one is seeking it. Then one should consider the questions I suggest. Otherwise, choose whichever path pleases you.

        Pink Floyd asks in their song, “Wish You Were Here,” “So, so you think you can tell, Heaven from hell, Blue skies from pain, Can you tell a green field, From a cold steel rail? A smile from a veil? Do you think you can tell? Humans simply are not able to figure out that the actions they take will lead to the results they anticipate. MMT could lead to blue skies and new freedom for Sapiens. Or, it could lead to anarchy and civil war. Which depends in large part on the actions taken and events that occur during the attempted move to MMT. Or, MMT could change nothing. “Gaming” of economic arrangements is often the result of disparate cultures in conflict. In this case, we’re facing a struggle much like that at the beginning of the US. Between Federalists, who want a centralized and government regulated economy, and Jeffersonians, who want a decentralized, libertarian economy of small businesses and farms. It’s difficult to imagine two more disparate cultures. Neither got what they wanted. Neoliberalism combined the two, a libertarian economy with a strong and proactive central government to protect those with the largest corporations and personal wealth.

        John, there are often patterns in observations, but reflecting radical uncertainty (complexity) they often are non-recurring, or shift from one pattern to another, often with no consistency. They can be useful, nonetheless. If for no other reason than to help us see complexity more clearly. But humans must be able to integrate uncertainty into their cultures, else all human life would be chaotic and would soon collapse under its own failures.

        As for indeterminate expressions, they can be considered using limits math, fractal math, or one of several forms of chaotic math. None is anywhere near complete at this time, but they can help us deal with radical uncertainty.

      • October 7, 2019 at 2:42 pm

        I agree with Ken.

      • September 30, 2019 at 5:45 pm

        Ken, I quite appreciate that from your view “it seems the push toward a multicultural world is now dead or dying”. Mathematics, as I see it, aims to be culturally independent in its actual content. The presentation (and particular the selection and interpretation) are necessarily culturally shaped, but mathematics ‘as a whole’ is bigger than that.

        You say “Mathematics overall is about control as well. The control of assigning numbers to things in our cultural universe either directly or via equations. Such numbers, it is believed allow comparison and study, and more precise decision making. Assuming, of course the objects being counted can be culturally distinguished and are manipulable.”

        NO! Cultures that are about control select and present the mathemnatics that they (mis)use as being about control. But – as I see it – any actual mathematics as such is also about the limits of and alternatives to control. For example, if one tries to follow Wittgenstein to underpin probability theory (as used by mainstream economists) by mathematical measure theory the whole thing is exposed as what Keynes called ‘pseudo-mathematics’. I’ve mentioned category theory before. This also raises series questions about the common-sense notion of ‘an object’. More obviously, counting (as commonly practised) is a physical process, not a mathematical operation. (E.g. for heaps, 1+1=1.)

        I’m in the process of reading Keynes’ biography of A. Marshall, which deserves careful consideration. He moves on from calling the practices that you deplore ‘pseudo-mathematics’ to calling the real stuff ‘modern mathematics’. It seems to me that economic methodology needs to take such modern mathematics seriously, particularly ‘radical uncertainty’. (But I guess its not much good if we can’t explain what it is!)

      • Ken Zimmerman
        October 1, 2019 at 11:21 am

        Dave, based on 10,000 years of human cultures, there is no evidence that mathematics ever was or could be “culturally independent.” It is certainly correct to say that the mathematics of each “culturally identifiable group” takes its character from that culture. So, Chinese mathematics is different from the mathematics of ancient Greece, and Islamic mathematics is different from the mathematics of the 19th century British Empire. At the same time these mathematics share similarities since they’ve borrowed and influenced one another for over 2000 years. I have no idea what you mean by “mathematics ‘as a whole’ is bigger than that.” Mathematics cannot be bigger than the culture and society which gives it birth. In the words of Ruth Benedict, “…fundamental and distinctive cultural configurations that pattern existence and condition the thoughts and emotions of the individuals who participate in those cultures.” Mathematics included. But like every other aspect of any culture, not everything is controlled, and upheavals do happen. Cultural configurations are as compelling and as significant in the highest and most complex societies of which we have knowledge as they are in “primitive” societies. But the material is too intricate and too close to our eyes for us to cope with it successfully. So, we learn about how it all fits together in modern societies by studying primitive societies, hoping they share enough commonality for study of the latter to help us better understand the former. Certainly, mathematics can be and is abused. But I remain unclear about this notion of pseudo-mathematics. Pseudo referring to false, I assume it is mathematics that is false. To answer this question, you’d need to know the “true” mathematics to make a comparison. This is a directly cultural question, as only a society’s culture provides the fundamental and distinctive cultural configurations that pattern its mathematics.

      • October 3, 2019 at 8:01 pm

        Ken, we seem compelled by our different cultures. Maybe, as you seem to think, there is no hope of communication except over issues where our cultures overlap. In which case there seems little hope for an economic methodology that I would think fit for purpose. But we can but try.

        Keynes’ concept of pseudo-mathematics is not about ‘false’ mathematics as such but about non-mathematical statements masquerading as mathematics. For example, he has a right go at https://en.wikipedia.org/wiki/Principle_of_indifference . He also notes how confusion around the notion of https://en.wikipedia.org/wiki/Randomness can lead to error.

        Maybe what he is complaining about would be best described as ‘cultural appropriation’ masquerading as the real deal?

      • Ken Zimmerman
        October 4, 2019 at 1:15 pm

        Dave, cultures can be made to overlap over time. Many of the first traders who went to China from Europe were executed, or just murdered on the roadside. After all they didn’t speak Chinese, neither knew or adhered to any version of Chinese customs, and they smelled funny, to the Chinese. But the little conversation there was before death, and the remains of the Europeans, bodily, equipment, clothing, etc. aroused the curiosity of some Chinese. They explored all of this. Some of it they found useful, other parts convinced them these were people interested in commerce. Gradually over hundreds of years, the Chinese came to accept the European traders. On the European side, the failures prompted changes, as well. European traders learned to speak Chinese, hired Chinese guides and interpreters, took gifts to gain the friendship of local Chinese leaders, etc. After a time, a thriving trade developed. Europeans began to marry into Chinese families, Europeans took up Chinese customs of dress and food, and religion. This is just one way cultures coalesce. Of course, one culture can conquer another, but that often leads to more barriers than coalescences.

        Mathematics is like everything else, assessed in terms of its home culture. Only within that context can any part of a mathematics be designated false. Or, as masquerading as genuine mathematics.

      • October 5, 2019 at 1:18 pm

        Ken,

        I quite accept that as a body of work mathematics is a human product that needs to understood in its proper context, including culture. But:
        1. Is there not ‘in effect’ and in some obscure sense a possible reality behind the various versions of mathematics that might be thought of, at least as a working hypothesis, as ‘real mathematics’ in much the same way that some people think that there is some reality that has some influence on physics beyond the thoughts of physicists?
        2. Based on my own experience, it seems to me that that the ‘cultural distance’ between British, European, American, Chinese and Russian mathematicians, when talking about mathematics, is insignificant compared with that between mathematicians and social scientists. Do you have any views on this?

      • Ken Zimmerman
        October 6, 2019 at 1:30 pm

        Dave, the debate about absolutist vs. fallible mathematics now covers most of the world. The absolutist view has spread over most of the world since the end of WWII. It went along with the political, economic, and technological dominance of the US, UK, and the other allies after WWII. Although the fallibilistic view of mathematics was actually common in Russia before and after the War. Now the absolutist view has been dominant for over 50 years in most of the west. This debate seems silly to me since it’s my view that mathematics can never be anything but fallible, and thus uncertain. Other views of mathematics are fantasy or delusion, depending on how fixed such views are. This certainly fits with what Lars has said about radical uncertainty. Are we foolish enough to believe that for some reason only mathematics conquers radical uncertainty?

      • October 6, 2019 at 6:06 pm

        Ken, I am no historian, but it seems to me that during WW2 Churchill and Mao had sensible views about mathematics, but for the Americans and Russians I’ve not thought about how far ‘up’ such insights reached. By Vietnam things seemed to go horribly wrong, with echoes today. (I’d love to see Kissinger and Ellsberg debate radical uncertainty!)

        You say “Are we foolish enough to believe that for some reason only mathematics conquers radical uncertainty?” Mathematically, nothing can conquer radical uncertainty, except possibly in the very short term. Much of the world’s problems, are exacerbated because many of us have been socialized to demand that our leaders eradicate such uncertainty. At least, I would say the socialization is more the problem than the actual mathematics as I understand it: Thus problem is mainly in your domain, not mine, but I’m happy to comment from the side-lines, or even collaborate. ;-).

      • Ken Zimmerman
        October 7, 2019 at 2:23 am

        Dave, British mathematics is difficult for Americans to comprehend. It is not deliberately utilitarian, but during WWII British mathematicians (and physicists too) were often the most practical and use-oriented of all the allied scientists involved. British schools up till the 1980s, and even in some schools today provide what’s often termed a “classical” education. Ancient Greek, Latin, literature from A to Z, lots of history (particularly of Britain), and formal scientific and mathematical training. This is the education I received. It’s my view that how this formal education is applied is the result of British culture in general rather than the contents of British education. Britain has been a far flung empire for over 700 years. It has dealt with, encompassed, and integrated into daily life cultures not not only from Britain, but also Europe, India, Pakistan, China, etc. In managing such an empire the British learned to be both practical about mathematics, science, history, and warfare, and use rather than status or class oriented in handling governance, commerce, and foreign relations. Another time we can talk about the Russians, if you want.

        You’re correct about the Vietnam War, the RAND corporation, operations research, operant conditioning, and mathematics. These pushed that war in directions no other war had ever gone, killed lots of people doing it, and unfortunately set standards that Russia tried to apply in Afghanistan in the 1980s and every war Russia has created since then. It’s now guiding most of the wars in the world, including the actions of organizations like Hamas and ISIS.

        When I became a Congressional page in 1961 the legislative process was still mostly direct negotiations, meetings with constituents (and not just the corporations and rich ones), and a rather absence of mathematics from most bills. There was the normal agricultural production and new manufacturing plants data, funding for public education, support for hospitals and such, but little mention of financial trading, let alone the mathematics of financial markets. Thirty years later this had been turned topsy turvy. And by the early 2000s the best mathematics and engineering students were recruited to write financial equations for markets rather than building useful things for people and their communities.

      • October 7, 2019 at 2:40 pm

        Ken, I see we were similarly socialized at an early age, which may explain why I find it relatively easy to make sense of what you say, despite our later ‘education’. The down-side is, that we haven’t been crossing as huge a large a cultural divide as I thought. No-one is contradicting us, though. ;-)

      • Ken Zimmerman
        October 8, 2019 at 2:24 am

        Dave, I agree. But our education is a two edged sword. I finished public school just as the “new math” was beginning. I’ve never gone back in the effort to “get it.” Which has an up and down side talking with people who went through public school after me. Still prefer the path I was given.

      • October 8, 2019 at 10:16 am

        Ken, I make a hugely important (to me) distinction between what Keynes called ‘modern maths’ and what we in the UK used to call ‘new maths’. I don’t think you really need to study ‘modern maths’, but you could get really confused if you think that I’m a ‘new math’ person or that Keynes, Whitehead, Russell, Turing and Good were. (Not that new maths is ‘wrong’, its just that many seem to misinterpret it.)

      • Ken Zimmerman
        October 8, 2019 at 11:37 am

        Dave, historians who study the “New Math” movement (really a cult) tell me “New Math” took aim at the mindless rigidity of traditional mathematics. It argued that math could be exciting if it showed children the whys of problem solving rather than just the hows. Memorization and rote were wrong. Discovery, deduction, and limited drill were the best routes to arithmetical mastery. In practice, this meant learning how different number systems worked, that the number 9 in the decimal, or base ten, system would be the number 100 in base three. It meant learning about the set, a grouping of things: a beach as a “set” of grains of sand, for example. It meant learning the difference between a number like 7 and its representation the numeral, which could be expressed many different ways—21 minus 14, 7 times 1. It meant learning to draw ruler like number lines and divide them into sections to discover fractional multiplication. It meant learning about frames—boxlike symbols used as substitutes for the x, y, z ’s of algebra. It meant learning a new language with terms like open sentence, complementation , and truth set . It meant, in essence, learning to discover the hidden patterns in mathematics before knowing what they were called and reasoning out solutions before knowing rules—all at an earlier age than had ever been attempted before.

        For about 10 years in the 1960s “New Math” divided parents and teachers, school administrators and teachers, and the press and government officials. After 10 years or so, “New Math” evaporated.

      • October 8, 2019 at 3:51 pm

        Quite. But the problems remain, and possibly need to be considered as part of a review of economic methodology? One view I’ve heard that it doesn’t really matter which side you take on some of these ‘foundational’ issues, as long as you are consistent. But let’s not be inconsistent, anyhow.

        (Maybe we just need to be aware of the debate and work around these issues. My ‘beef’ is that many economists seem to have blindly blundered right into them, creating confusion and error, and (in some cases) seeming to tar all mathematicians with the same brush.)

      • Yoshinori Shiozawa
        September 17, 2019 at 5:33 am

        mxx1
        you are taking the question in a too narrow way. Question of entrepreneurship can be asked as the economic and social problems.

        Assume the rate of success of new venturing is quite small, say 1 over 20. Even in such a case, if the introduction of new products, or new business, even a new industry is necessary for the economic growth, we can argue the question on how to raise the rate of venturing in a new business. In the first half decade of 2000’s, it was said that Americans starts new business seven times as high as Japanese did. If we count that USA counts about 3 times as big population as Japan, it means Americans starts their business at a rate two times higher than Japanese. This may be one of reason why Japanese economy stagnated for long time after Japan has caught up the USA around 1980’s.

        Another question we have to ask is this: If the new venturing is important to the vitality of a nation’s economy, we can stipulate a suitable regime of re-compensation to those who have succeeded and those who have failed. If the success or failure depends much on the luck, a kind of transfer tax can be considered. In a simple framework, successful entrepreneurs pay a decent rate of tax from their capital gains as startup entrepreneurs and distribute them to entrepreneurs who have failed.

        N.B. I have never stated that it is necessary to “measure entrepreneurshipness”. It is your idea which may indicate the narrowness of your concept of sciences. Also, you should remind that I am admitting that “t is difficult to study the entrepreneurship scientifically.”

      • Robert Locke
        September 22, 2019 at 10:55 am

        I went to Silicon Valley to “investigate” high tech entrepreneurism right after the dot.com bubble burst, and people lost a lot of money. I concentrated on interviewing people from outside the US who were attracted to Silicon Valley during the gold rush of start-ups. What I found is that those involved were not MBAs in finance, (most angel investors were successful entrepreneurs who grabbed on to an idea coming from engineer-scientists whose work they understood, in the unique networking that characterized the entrepreneurialism. There was an excitement in the air breathed in this environment, that did not exist, for example, on Route 128 outside Cambridge, Mass. I noticed that when “traditional” venture capitalists became involved in Silicon Valley, the networking lost its flair; and when the IPO promoters moved in, in order to make billions for start-ups that went public, the socially detrimental aspect of US financial capitalism moved in with them. The system absorbed the innovativeness of the original regional networks.

      • Yoshinori Shiozawa
        September 22, 2019 at 2:50 pm

        The role of education is not only to give knowledge (scientific or else) but also to build within students a necessary set of attitudes that will open the future for students

        As I have wrote in my comment on September 14, 2019 at 12:14 pm, what is more important is to change their attitude. mxx1 does not understand this.

        Robert, your book Management and Higher Education since 1940 has arrived, but I have not yet time to read it.

  16. Ken Zimmerman
    September 14, 2019 at 12:14 pm

    Robert, Yoshinori, and Dave, have you seen Ridley Scott’s “Alien” movie series? If not, you should. One of the points it tries to make, perhaps with too much subtlety for some to take notice is that intelligence, human or otherwise is accidental. Isaac Asimov, Ray Bradbury, Robert A. Heinlein, Douglas Adams, etc. make the same point. There is no way to plan for or predict intelligence. Even when humans set out to build “thinking” machines, for example, the machines never turn out as expected or predicted. That’s the way for life in our universe, perhaps others are different. Even the opposite of intelligence, stupidity is not plannable or predictable. Social scientists, philosophers, etc. do all of us a disservice when they reject this context for human existence.

    • September 14, 2019 at 12:43 pm

      Ken, I’m not a great fan of horror movies. Reality seems awe-full enough.

      From the perspective of mathematical logic one might interpret your remarks as ‘category theory is correct’. I shall now attempt to be less obscure.

      If we think of intelligence as a mesh of processes, then it can never be in anything like equilibrium: it is always liable to challenges that it cannot meet except by changing. If there is more than one intelligence, with no over-arching co-ordinating process, then challenges are inevitable. Such challenges require extensions ‘outward’. This may be via collaboration with other existing processes, or extensions ‘up’ or ‘down’.

      As Turing argued, any definite intelligence process will treat some level of detail as stochastic. It can extend down-wards by paying more attention to ‘reality’ and improving its understanding (e.g. via modelling) and thus identifying new ‘factors’ that may be becoming significant.

      Another possible change is to decide that the current collaborative processes are inadequate, and to develop (or replace) them, thus sometimes extending ‘up’.

      From an observer’s point of view, these changes give rise to what are sometimes called ’emergent properties’. You say “There is no way to plan for or predict intelligence.” There is clearly a lot of truth in this, but if taken too far it seems to me to become nihilistic. While one cannot ‘plan’ in the conventional sense, one may be able to strategise, and while one may not be able to predict one may be able to anticipate. My (amateur) reading of history that this is what Keynes was attempting, and that it was useful. If we are to follow Keynes, then I think we would do better to follow his approach, critiqueing and developing his ‘intelligence’, not just ‘applying’ it. (Others may be yet more radical.)

      • Ken Zimmerman
        September 14, 2019 at 2:32 pm

        Dave, as with all science fiction, good and bad, this series is about how the world is and how it works. As for what intelligence is, we simply don’t know what it is. In terms of it uses, we consider it a way to obtain what humans need to survive, from food and shelter, mates, defense, and the foundations of “place,” home. We call the results of this work culture and its organization into living arrangements society. Intelligence, the human version is collective. It functions only within human groups. There is no “individual” human till culture creates it. When you say, “from an observer’s point of view,” I assume you mean humans, since humans are the only observers of which we are aware. The term emergent has often been used to describe both human intelligence and human cultures. If you consider these views nihilistic, then they can be, since nihilism is one option included within most western cultures, but not in eastern ones. Yes, indeed one may strategize, and one may anticipate, but there’s nothing to suggest that either of these must lead to intelligence, particularly in terms of a species. Some Anthropologists argue that science originated with tracking of animals by humans 20,000 years ago, or so. The tracking involved strategies and anticipations, but if you believe, as I do, tracking’s creation is a result of intelligence then intelligence existed in human groups before either took place. As I said earlier, humans now build “intelligent” machines, but so far none has turned out as anticipated or strategized. I argue that Keynes is incorrect. The origins of human intelligence remain unknown. Perhaps one day humans’ understanding of biology, brain structure and chemistry, synaptic operations, neurology, etc. will be such that our species can create a fully functional intelligent species, whose intelligence is wholly defined by humans. I don’t believe it’s possible. But as humans see it, the universe is a complex place.

      • September 16, 2019 at 3:46 pm

        Ken, that all seems very reasonable. Going a bit further, I see how some humans might be able to construct machines that display whatever they think intelligence is, but not how anyone could logically rely on any ‘definition’ of intelligence.

        (In category-theoretic terms, one could ‘probably’ construct a machine with some given definite sufficiently well-understood category of intelligence. Some folk seem to think one might be able to construct some kind of generalised intelligence, but – logically – how would you know for sure that you had succeeded?)

  17. Yoshinori Shiozawa
    September 14, 2019 at 12:59 pm

    Robert, Ken, and Dave,

    I have a bit different opinion. Experimental design is a kind of para-mathematics like Operations Research, Game theory (when applied to real life), Cybernetics, Linear Engineering, Catastrophe theory (when used as natural philosophy), and Financial Engineering. They contain mathematics, but they are not mathematics as a whole.

    We may call them applied mathematics but they may not be a good name. When we say applied mathematics, mathematics is really applied to a well established science (i.e. physics or more rarely chemistry). The problem is well defined and mathematicians’ duty is to solve the problem. On the other hand, in the case of para-mathematics, they have at the same time a part of an objective science (in the sense that it is a science of certain class of objects) and a part of mathematics.

    Robert is quite skeptical on these “sciences” or “disciplines” and he has reasons to think so. If we think them an engineering discipline, truthfulness is not the crucial point of judgment. For example, think the case of Financial Engineering. If a financial firm wants to invest its fund, it does not matter if the theory that supports their decision is true or not. What matters is whether the solution that the theory gives is better than other solutions that are traditionally used or competitors are using. Para-mathematics is judged not by the logical validity or truthfulness of the theory but by the usefulness of the theory.

    In face of complex system (either physical, biological or human system), it is plausible that para-mathematics does not give exactness that we normally expect form mathematics. As I have pointed in my post on September 13, 2019 at 6:36 pm, mathematics and para-mathematics are categorically different entities.

    • September 16, 2019 at 3:32 pm

      Yoshinori, I like your notion of ‘para-mathematics’: unlike Keynes’ similar ‘pseudo-mathematics’, one can acknowledge that while para-mathematics may not be ‘properly logical’, it may nevertheless be useful. Thus, while we might be suspicious of all para-mathematics, it is not all bad. (E.g., Euclidean Geometry can be useful.)

      Where I quibble slightly is with your ‘Para-mathematics is judged not by the logical validity or truthfulness of the theory but by the usefulness of the theory.’ Actually, as a mathematician I do judge almost everything by its logical credibility, and always aim to be more credible. So it seems to me that we might judge any para-mathematics by logical standards (perhaps ‘to be determined’), and aim – in the long run – to identify and at least ameliorate its inconsistencies. Meanwhile, if we have to act then logic isn’t everything, and we often act on heuristics.

      A common problem, as I see it, is that we sometimes treat para-mathematics ‘as if’ it were more worthy of reliance than it actually is. In economics, this seems to be a real problem. So I commend your distinction. The solution, I think, is to acknowledge the distinction and seek to develop genuine relevant mathematics.

      We might also generalise your concept to talk about para-logics, which might lead us on to https://en.wikipedia.org/wiki/Paraconsistent_logic and the issue of what type of logic is appropriate for economics, even when we aren’t talking about mathematical concepts. (As you might realise, I would prefer it if economics were logical in some sense that would enable me to contribute more.)

      • Ken Zimmerman
        September 17, 2019 at 4:12 am

        Dave, and a bit further. One can’t “logically” rely on anything. One can culturally rely on lots of things. And you ask, how would you know for sure that you had succeeded? You wouldn’t. But then, how do you know humans are intelligent? By the definition of intelligence that humans invent. No other way.

      • September 17, 2019 at 6:53 pm

        Ken, can one transcend culture?

      • Ken Zimmerman
        September 18, 2019 at 10:55 am

        Dave, the simple answer is no. Just as a human cannot survive without a sense of their own self, so they and those with whom they share a society cannot survive without culture, a sense of shared self. Humans are humans only via culture. Every culture organizes life around a few simple principles, activities, and beliefs. The other institutions and activities of the society hang from that core like branches from a tree trunk. These central acts, institutions, and values form what Ruth Benedict—arguably the most perceptive American anthropologist of the 20th century—called a “cultural configuration.” When a hanging institution or activity fails, others are created to replace it. When the “cultural configuration” fails then society dies. But culture is not a strait jacket or iron cage, as some sociologists portray it. As one reviewer of Benedict’s book, “Patterns of Culture,” writes, “On this basis she developed her own special contribution, her view of human cultures as ‘personality writ large,’ her view that it was possible to see each culture, no matter how small and primitive or how large and complex, as having selected from the great arc of human potentialities certain characteristics and then having elaborated them with greater strength and intensity than any single individual could ever do in one lifetime. She named the emphases in the cultures she described Apollonian, Dionysian and Paranoid, drawing on descriptions of individual personality to give point to her argument. But she was building no typology; she held no belief that Nietzschean or psychiatric labels were suitable for all societies. Nor did she believe that any closed system could be constructed into which all human societies, past, present and future, would fit. Rather, she was committed to a picture of developing human cultures for which no limit could be set because the possible combinations were so many and so varied as to be inexhaustible. But, as her knowledge of different cultures grew, so her initial sense that the individual was the creature of culture and so was in no way responsible for the discomfort of his position if he was born or accidentally bred to deviance, changed to a detailed consideration of where and in what ways men could shape their culture closer to their highest vision. The belief that this was possible was to grow.”

      • September 19, 2019 at 11:06 am

        Ken, It seems to me that there is a lot of descriptive and ‘pragmatic’ truth in what you say. Maybe the problem is people (like me) from a very different culture to you misinterpreting what you say, with potential dire social (and economic) consequences. Maybe globalisation requires a global monoculture. But my own sense of self compells me to resist.

        Viewed through my lens, Ruth Benedict seemed to be promoting a narrative of some sort of transcendental culture at https://en.wikipedia.org/wiki/Ruth_Benedict#%22The_Races_of_Mankind%22 . She seems associated with https://en.wikipedia.org/wiki/American_anthropology , which “most commonly refers to the universal human capacity to classify and encode human experiences symbolically, and to communicate symbolically encoded experiences socially.”

        I appreciate that many different varieties of social / human scientists have views on the nature of this capacity that seem to be incompatible with mine. Maybe the capacity is not universal? Maybe, as in process logic, it is evolving, as you seem to hint at? But even if it is merely common, isn’t communication a social activity, and hence mustn’t the capacity have linked to it something very like a ‘culture’ that transcends specific cultures?

        My main point, though, is that shouldn’t those who claim to have this capacity attempt to link it to some logic, hopefully one that I could comprehend? (This would seem to be a huge methodological advance, of potential benefit to both economics and economies.)

      • Ken Zimmerman
        September 19, 2019 at 1:11 pm

        Dave, one of the subjects of great concern to both historians and anthropologists in the 20th and 21st centuries is multiculturalism. With the advent of communications means that can link cultures that just 100 years ago were separated by geography, languages, and ethnocentrism, the questions about these cultures sharing a common place, space, and time increase in both number and importance. For example, and only because it’s so obviously “out there” China is presenting itself to the world as a technological, monetary, civil, and military power, in the sense those terms have been used over the 20th century. But if you observe you’ll see there are still substantial, though often hidden and subtle differences between that presentation and the cultural configuration that’s China center. If China does become the next dominant power in the world, the world it constructs will be very different from the world baby boomers like me grew up in. We also see “cultural wars” happening in every corner of the world, both between and within existing nations and nation-states. We don’t know how all this will work out. A single world culture (not likely anytime soon), regional cultures (more likely), agreements to live and let live (still not popular after over 40 years of cultural warfare).

        As to the “Races of Mankind” this was a pamphlet Benedict wrote to show that all races are the same, that there should be racial peace. In other words, to address a specific problem of the 1950s. Not an unusual action for anthropologists. Not all anthropologists focus on the use of symbols, but all recognize it as a basic human skill invented about 25,000 years ago. This was a focus for Benedict since she was a cultural or socio-cultural anthropologist. Other anthropologists focus on human physical development and evolution, artifacts (e.g., money). and forensics. Can humans change from membership in one culture to membership in another? Yes. It’s difficult, since the socialization and enculturation actions can be difficult or even violent. This happens to anthropologists sometimes in ethnographic study. In the 19th century it was called, “going native.”

        Dave, you continually miss the point. “My main point, though, is that shouldn’t those who claim to have this capacity attempt to link it to some logic, hopefully one that I could comprehend? (This would seem to be a huge methodological advance, of potential benefit to both economics and economies.)” The issue your statement raises is the link must be based on a logic created in a particular culture. Which culture’s logic is the one we should choose? First, the cultures must be integrated so a single useful logic for this task is created. And we’re back to our original issue. How to perform the integration.

      • September 19, 2019 at 5:02 pm

        Ken, What do you mean by ‘integrated’ in this context? (It seems to me that its meaning is very culturally dependent, and I don’t presume to ‘get it’.)

        According to https://en.wikipedia.org/wiki/Cultural_pluralism “Pluralistic societies place strong expectations of integration on members” i.e. “minorities are incorporated into the social structure of the host society.” But this implies that there is a ‘host society’, which presumably has a ‘host culture’. Lacking a meaningful global culture how might we collabrate across cultures. It seems to me that we would want some sort of critical debate, which would seem to me to imply some sort of common ‘logic’. If not, how might we proceeed? Or do we need some kind of global culture, and if so how might we characterise it? And achieve it?

      • Ken Zimmerman
        September 20, 2019 at 1:39 pm

        Dave, I don’t have a meaning for integrate, since it is as you note, culturally dependent. My question is the same; which culture will integrate all or most other cultures and how will that be performed? As to collaborating across cultures (and societies, which are constructed around the “cultural configuration,”) I believe the United Nations is one such effort. But there have been others, from the current capitalist globalization, to the great empires of the 16th – 19th centuries, to the globalization provided through science. But none is complete, and many are now declining, or have already declined. None of these involve a “critical’ debate. The beginnings of these and other efforts at cross-cultural collaboration usually are not based on a “logic” at all, but rather feelings of fear, greed, knowledge creation, love, hatred, etc. The “logic” of these efforts is created during the creation process itself, based on the feelings of the cultures involved and the obstacles that worry them. And is changed over the history of the efforts. The UN, for example has a clear logic created via interactions over 75 years, which is in large part out of sync with the logics of American cultures. A problem neither the UN nor the US seems able to resolve.

      • September 23, 2019 at 2:51 pm

        Ken, My own reading of history is that those behind the League and the UN were at least informed by some of the lessons coming out of the World Wars, which were at the time associated with the then emerging insights into logic such as those of Whitehead.

        Of course, many were cynical about these ‘insights’, but it does seem to me that they had some influence. I wonder what influence classical and the then new logics had on the warring and peace-building cultures, and if a greater appreciation of suitable logics might facilitate some improvements to our cultures? Or can logic play no role in cultural developments?

      • Ken Zimmerman
        September 23, 2019 at 11:52 pm

        Dave, when World War I began, Ludwig Wittgenstein signed up with enthusiasm, even though a double hernia entitled him to a medical exemption. But he did not give up philosophy. It was while en route to the front in 1914 as part of an Austrian artillery regiment that he began the writing Tractatus Logico Philosophicus. This book set out Wittgenstein’s revolutionary ideas, and was the only one of his philosophical works that would be published during his lifetime. He completed the book while a prisoner of the Italian army in 1918. There is little doubt that his military service and the war influenced Wittgenstein’s writing. His ideas are considered revolutionary by many. Two, in particular. First, he asserted that many of life’s most puzzling questions were mistaken, and could be dissolved away if language was used more precisely. Thus, wrote Wittgenstein, problems about free-will, ethics, even what exists, were nonsensical, and arose only because we conceive the world in a certain way. This is the central message of the Tractatus. This, I believe came from his war experiences, of people fighting and killing, literally over different concepts of free-will and respect. An insight shared by historians and anthropologists. How using language more precisely could solve this is unclear, since to use language more precisely, one has to know what “more precisely” is. And that, of course is different from one culture to another. Second, after another 10 years of contemplation, Wittgenstein came to the conclusion that language was more complex than anyone, including himself, had previously realized. Not an uncommon conclusion for the ordinary person-on-the-street, as well as historians and anthropologists. Wittgenstein certainly influenced events and people, but with all that influence could still not stop World War II.

      • September 24, 2019 at 2:24 pm

        In his Tractatus, Wittgenstein put forward an argument in favour of a view of radical uncertainty that is still common among human scientists (e.g, Kahneman and Tversky). Keynes was instrumental in the Tractatus’ publication, despite having a very different view. Both of them seemed to think that a more ‘precise’ debate on the issue worthwhile. We can all be negative about mainstream economists’ view of ‘precision’, but is there no possibility of some less culturally-dependent (possibly even ‘logical’) concept that might help move things forward? (E.g., Whitehead?)

      • Ken Zimmerman
        September 25, 2019 at 1:47 am

        But not a view common among economists, Dave. Economists draw their inspiration elsewhere. Perhaps Newton or von Newman.

        Wittgenstein spent the last twenty-two years of his life disputing the conclusions he wrote in Tractatus. “I have been forced to recognize the grave mistakes in what I wrote in that first book.” He started over but his life was cut short before he could publish his new conclusions.

        After his death these works were assembled in a book titled Philosophical Investigations, which many people consider one of the most important books of the 20th century. “Wittgenstein came to believe,” writes Robert Hagstrom in The Last Liberal Art, “that the meaning of words is constituted by the very function they perform within any language-game. Instead of believing there was some kind of omnipotent and separate logic to the world independent of what we observe, Wittgenstein took a step back and argued instead that the world we see is defined and given meaning by the words we choose. In short, the world is what we make of it.”

        To help us understand, Wittgenstein drew a very simple three-sided figure.

        Wittgenstein then writes:
        Take as an example the aspects of a triangle. This triangle can be seen as a triangular hole, as a solid, as a geometrical drawing, as standing on its base, as hanging from its apex; as a mountain, as a wedge, as an arrow or pointer, as an overturned object, which is meant to stand on the shorter side of the right angle, as a half parallelogram, and as various other things … You can think now of this now of this as you look at it, can regard it now as this now as this, and then you will see it now this way, now this.

        In essence, reality is shaped by the words we use. Note, Wittgenstein says reality, not our understanding of reality.

      • September 25, 2019 at 9:59 pm

        Ken, Maybe you need to find some words to shape social reality?

        I’m more inclined to think that there was some kind of triangle that existed before words did, while admitting that I lack the words to describe it to you. The best I could do is some kind of pointing, in the hope that we reach an adequate mutual understanding for some purpose. But even if we did ‘really’ share a sufficiently common culture, I could never be certain that we did. I think the mistake is to simply assume that we know for sure what anyone else ‘really’ means..

      • Ken Zimmerman
        September 26, 2019 at 8:33 am

        Dave, I have words that create reality. From 5000 years of human writing and more of human language. I can always invent new words. If they remain idiosyncratic to me, then they’re useless in that history. The words must be shared and used to make reality.

        Dave, why would you believe there was some kind of triangle before language existed? I can’t say or write what I don’t know. Language stores this knowledge. And even today, with all our history of language, we still often can’t agree that this is or is not a triangle. Plus, this is not a question that can be “reasoned out.” We reason together to create this word for this purpose. With only a few exceptions this is not even the case for scientists. And certainly not the case for philosophers.

      • September 26, 2019 at 12:53 pm

        Ken, I ‘believe’ that whatever words create will tend to be different for each of us, and that no matter how hard we try we are never justified in supposing that any two people ever completely and unconditionally agree. (That is, any belief that there is an agreement must be based on judgment, not logic.)

        When I said that I am ‘inclined to think’ I was simply expressing an attitude, less than a ‘belief’. I don’t mind if you think that there is no reality apart from that which we create, as long as you don’t think me as acting ‘in bad faith’ if I fail to agree with some conclusion that you may draw from this which contradicts those which I draw from my own working hypotheses.

        In everyday life, I suspect we would get along ‘pragmatically’ without worrying about such metaphysical issues. But it seems to me that some people try to use views similar to yours to try to argue against those who take radical uncertainty seriously. So I argue that what I think is your inclination, like mine, is something that we should be uncertain about, in which case radical uncertainty may be ‘real’ even if many don’t get it. (And I wouldn’t claim to understand it enough to be dogmatic about it.)

        Thus whatever reform we have to methodology, we must at least try to guard against misinterpretation. Here we need insight into culture, psychology, anthropolgy, … . All I can say on the topic is, why not at least try to be more logical, not less? Hence my question ‘which logic’, which may or may not come down to ‘which universal culture’. (But I hope not!)

      • Ken Zimmerman
        September 26, 2019 at 3:01 pm

        Dave, within the limits of how thoroughly members of a culture are socialized and the contents of that socialization, there can be and usually are differences in the extent of cultural entanglement for these members. For example, the elites in most cultures are given more leeway to violate major cultural norms than ordinary citizens, since these elites, supposedly lead the culture.

        When you attribute your actions to ‘attitudes’ or the desire to convey an attitude, you are following an accepted cultural norm in many parts of the west. Thailanders have no attitudes, per their cultural norms. Although the notion may have filtered into Thailand from more than a century of contact with the west. ‘Working hypotheses,’ another cultural norm of the west, especially America. One effective approach to experience radical uncertainty in action is to visit another culture. For example, the story used as a teaching aid by sociologists and anthropologists is titled, “What Line?” In every railway station in India there are numerous signs that instruct passengers to wait in the proper line for the next train. Americans find these signs incomprehensible. The Americans can find no lines in which to wait. The Indians don’t seem to be waiting in what Americans would identify as lines. Though this presented no difficulty for the Indians. A good ground for misinterpretations, perhaps even conflict.

      • September 26, 2019 at 8:18 pm

        Ken, Not for the first time a social scientist associates some baggage with my words that I hadn’t intended. I suspect if we were face-to-face in a mutually acceptable setting (Canada?) we might, after a day or two, come to some sort of mutual understanding, and maybe even agree on some form of words. But it might be hard work. How can we improve things? Could we work towards some reasonable words to express a reasonable methodology? If not us, who, where, how?

      • Ken Zimmerman
        September 27, 2019 at 11:35 am

        Dave, I believe it has something to do with the place mathematics supposedly holds in our lives. Many believe that mathematics flows from some universal source that transcends ordinary human existence. As an anthropologist I can make no sense out of such notions. And I continue to reveal and study the cultural origins of mathematics. Is there a way to bridge this difficulty, do you think?

      • September 30, 2019 at 6:04 pm

        Ken, We might distinguish between mathematics as an ideal and what is written down and the use that is made of it. If you deny the ideal then all that remains is a human construct. But we can still ask how reliable this construct is, and if it might be tending to become more reliable, and hence how deserving of our trust it is. If we have a positive view we might think it tending to converge on something, and whatever it is might -practically – take the place of an ideal. Alternatively we might think that mathematics is inevitably undeserving of our trust and think of ‘the ideal’ as simply a human idealisation, and hence we might still call it an ideal.

        So, whatever we think of it, how trustworthy is this ideal, and how close are we to it?

        Many people think it pragmatic to talk in terms of ‘probability’. You seem okay with the notion of ‘objects’. It seems to me that these are ideals in some sense, and that (‘modern’) mathematics viewed as an ideal is more trustworthy than these, and less culturally dependent.

        Maybe you could translate the above sympathetically? Alternatively, it seems to me that you have some valid criticisms of pseudo-mathematics (much like Keynes’) but that something survives, and whatever it is at least a candidate to be considered as more plausibly culturally-independent mathematics.

        Maybe a pseudo-formula such as ‘pseudo-mathematics = culture(mathematics)’ would help. You seem sceptical of ever solving this for the one true mathematics, as am I. But can’t we get closer?

      • Yoshinori Shiozawa
        September 17, 2019 at 6:54 am

        Dave and Robert,
        I am happy to know that Dave liked the concept of para-mathematics.

        Any para-mathematical discipline contains mathematical part and applied science part. It seems that people who engage in a para-mathematics has a strong orientation to work in mathematical parts and are not very eager to challenge applied science part. This may be a reason why para-mathematical sciences do not develop as such. It is true, as Robert Locke pointed it, that many para-mathematical textbooks contain pure imaginary examples and we rarely encounter an example which are really used for a problem in real life.

      • Craig
        September 19, 2019 at 4:40 pm

        @ Ken,

        “The issue your statement raises is the link must be based on a logic created in a particular culture. Which culture’s logic is the one we should choose? First, the cultures must be integrated so a single useful logic for this task is created. And we’re back to our original issue. How to perform the integration.”

        I couldn’t have said it better. Integration is the very process of wisdom. It’s time for mankind to mature into a culture of wisdom whose pinnacle concept is grace, i.e. love in individual action, bulwark-ed and encouraged by systems whose policies are logically aligned and based on that same concept. For instance monetary grace as in direct and reciprocal gifting at the point of retail sale.

        A Wisdomics-Gracenomics, the first mega-universal-paradigm change since that from hunting and gathering to agriculture, homesteading and urbanization.

        The way to know that personally is to contemplate grace. The way to acculturate it is to implement policies aligned with it. And the way to miss having its “road to Damascus” type cognition is to abstract and talk around and about it forever instead of coming into present time and knowing its human and temporal universe reality.

      • Ken Zimmerman
        September 20, 2019 at 12:46 pm

        Craig, it’s uncertain whether humans will “mature into a culture of wisdom.” But one issue facing humans today and into the future is multiculturalism. There was a time when humans (at least some) had a choice to deal with or not multiple cultures in close proximity. That choice no longer exists for any human society, baring societies isolated in thick jungles or on the highest mountain tops. Will humans choose perpetual warfare to pick the “winning” culture(s) or can humans finds ways to “integrate” cultures peacefully? Those are questions compelling an answer right now. Thus far, warfare has too often been the option favored.

      • Craig
        September 19, 2019 at 6:14 pm

        @Dave at 5:02 pm,

        The only way to transcend culture is to build/self actualize consciousness/self awareness. Then you become free to live in any culture as you choose to. It’s why the zen Buddhists say: “Before one becomes a novitiate they see that mountains are mountains and streams are streams, and after they have attained enlightenment they still see mountains are mountains and streams are streams they just see them wisely.”

        That is fully consciously….not just abstractly/intellectually.

    • Calgacus
      September 17, 2019 at 5:29 am

      An older name for “applied mathematics” (roughly) is “mixed mathematics”, which is closer to Yoshinori’s viewpoint, to his para-mathematics, I think.

      IMHO, such distinctions are provisional: an object of mathematics is to show they are merely provisional. Pure, mixed, applied. They’re all the same. There is no pure math that is not applicable (and pretty much applied, these days). There is no applied mathematics that does not contain beautiful pure mathematics and that does not shed light on the edifice of “pure math”. And dig deep down enough into how people are really thinking about their pure math – it’s mixed with ideas coming from experience and applications, no matter how they try to hide it even from themselves, often enough.

    • Craig
      September 18, 2019 at 6:38 pm

      @Ken,

      Benedict’s study is interesting both in that she came around to seeing growth as possible and in her use of the concept of the triad/trinity which is present in every area of human endeavor and as aspects of the physical/temporal universe as well. However, growth is a scientific euphemism for wisdom and self actualization/ascension. Man is accurately described by the ancients as homo sapiens, wise and discerning man, and he/she is devolving into homo economicus within the culture of homo scientificus ONLY (sp)

      Building a culture on doubt is mistaken. Building one on knowingness/wisdom that of course includes unknowingness as an integral part of being able to actually realize knowingness instead of settling for mere data and computation is what we need to work toward.

      • September 19, 2019 at 11:21 am

        Craig, In so far as I understand what you are saying, I agree. Ken seems to think that people need a culture (such as that of mainstream economics) to give them mythical beliefs to questions that are unanswerable. I think that we need something like Keat’s ‘negative capability’ developing into a kind of transcendent culture that allows people of different cultures to collaborate effectively, as the basis for sustainable societies, with their economics and economies. Such a culture would wish to quibble with https://en.wikipedia.org/wiki/Methodology , for example.

      • Ken Zimmerman
        September 19, 2019 at 12:28 pm

        Craig, Benedict is considered one of the greatest anthropologists of the 20th century because she, like Margaret Mead, Louis Leaky, Clifford Geertz, etc. opened new cultural institutions and artifacts to study, some very controversial. Such as sexual rituals, race, gender, etc. None invented what they wrote. They reported what they were taught through dialogue and observation by the societies they examined. As for cultures built on mistakes, just about every culture ever recorded is founded on one or more mistakes, viewed from the perspective of other cultures. So, if there are things about cultures that you dislike or disturb you, don’t blame the anthropologists. Blame the peoples who invented each culture. But you can only do that from the perspective of the culture in which your life is situated.

      • Craig
        September 19, 2019 at 5:02 pm

        Wisdom/the highest form and method of self knowledge strips away culture and enables and builds consciousness/self awareness. That’s why zen buddhists say you have to remove even the “breath on the mirror” before you are enlightened and why Vedanta declares “Tat Tvam Asi, thou art that, you are it….and I would simply add that it is also you.

      • Ken Zimmerman
        September 20, 2019 at 1:08 pm

        “Wisdom/the highest form and method of self knowledge strips away culture and enables and builds consciousness/self awareness.”

        Craig, as to the highness or lowness of Wisdom, or Buddhism, I cannot speak. Having no access to such knowledge. But the remainder of this sentence is wrong. From all we know of human history and anthropology going back 200,000 years, humans invented culture as a way to live together, build communities, and give stability and purpose to their lives. No human community, no matter how small since the invention of writing by humans lacked a culture. And archaeologists have shown evidence that human communities going back at least 20,000 years before the invention of writing created cultures. Humans simply can’t survive without culture. So, my interpretation of your remarks is that you prefer the culture Wisdom replace all exiting cultures. High ambition. As, I said in another comment, multiculturalism is the biggest problem facing humans today. Your position is multiculturalism’s issues should be settled by having just one culture for all humans, Wisdom. But this doesn’t transcend culture but ends with all humans as members of only one culture. One culture or a thousand, culture remains the central element for organizing human societies.

      • Craig
        September 20, 2019 at 5:12 pm

        Ken, My post to Dave at September 19, 2019 at 6:14 pm answers your question.

      • Ken Zimmerman
        September 21, 2019 at 11:51 am

        Very nice, Craig. But just does one “build/self actualize consciousness/self awareness” since what these are and how we get to them are culturally entangled. In the end, each question and answer comes back to culture. Creating a world culture is certainly possible. But it’s mostly hard work and careful listening, and above all respect for the cultures that might be supplanted. This talk of actualization of self-awareness and consciousness is bunk, in my humble view.

      • Craig
        September 21, 2019 at 5:14 pm

        “Creating a world culture is certainly possible. But it’s mostly hard work and careful listening, and above all respect for the cultures that might be supplanted. This talk of actualization of self-awareness and consciousness is bunk, in my humble view.”

        Every culture already has a concept of grace as in love in ACTION, so as I said there’s no need to supplant any of them, simply contemplate, deepen/self actualize and ACT on that concept. When the devastating human effects of non-functioning economies and climate change begin to become more and more apparent it won’t be those who contemplated and ACTED with aligned systemic policy that will be blamed but rather those who opposed it or merely engaged in endless intellectual chatter round and about it as the catastrophe loomed. That is the real bunk.

      • Ken Zimmerman
        September 22, 2019 at 9:30 am

        Craig, having been involved in hundreds of policy struggles let me say that in each case there were hundreds of dots that had to be connected, negotiations that required patience and listening skills, and more than a few threats. The only contemplation involved was about the law, what was fair for all stakeholders, and dealing with greed and envy. And the actions involved were measured, stop-and-go, and tentative till a final resolution. And even final resolutions are never final, really. And we engaged in little “endless intellectual chatter,” except at times by the judges and other decision makers (elected and appointed). These actions and institutions are what Trump and his minions call the “deep state.” It is they that daily protect American rights and defend American freedoms. Trump’s attacks on these actions and institutions is a direct attack on these rights and freedoms. Craig, I don’t see how what you offer helps achieve any of this. Especially in these times of great threat.

      • September 23, 2019 at 7:52 pm

        Ken, Please could you tell us more about the culture of the American ‘deep state’? It seems like something that could be thought to be seeking to supplant the established cultures, in which case the rise of populism would seem quite reasonable, if it weren’t that it may be leading to the dominance of a culture of Triump-ism (as presented by its critics).

        It seems to me that the British equivalent to the ‘deep state’ has always sought to pretend, even to itself, that it transcended individual cultures. One problem that I see with this approach is that for its policies to be effective they needed to grapple with radical uncertainty, yet they also needed the support of a population that has – in recent decades – largely been indoctrinated in the view that there is no such thing as radical uncertainty. With the end of the old common enemy this became untenable, with a resultant loss of trust and a transfer of power to ‘British Trump’. (I have no inside knowledge here: I may be being deeply unfair.)

        Cybernetic theory points to the desirability of the electorate appreciating radical uncertainty and its implications, or at least in trusting the judgement of their representatives. This implies a shift in culture. But it may need underpinning by a new or renewed ‘logic’. (Or maybe the old ‘deep states’ explaining themselves better?)

      • Ken Zimmerman
        September 24, 2019 at 1:07 am

        Dave, the deep state has been part of the fascist and even some parts of the non-fascist American right since the 1950s. You can learn about it by reading rightist books on the subject, and currently it’s a central focus on rightist social media, podcasts, and even meetings at the White House. It’s defined here as the “unelected” bureaucrats that are stealing America from Americans (right-wing Americans). This is no more than 3-5% of the American population. I don’t know how large a segment it is of the UK population. But it’s near the same in most of the other European nations. There’s little doubt the US, like most post-WWII nations has become an administrative democracy. The actions taken after the end of WWII (Marshall Plan, UN, de-Nazification, etc.) would have been impossible otherwise. As many students of US politics point out, the administrative state, along with increasing power taken by executive leaders (presidents, prime ministers, etc.) is central since WWII. The history in Europe, Russia, Asia, and South America is similar. With, of course periodic push back efforts to reduce that power and foster more direct democracy. Since the right-wing critics of the “deep administrative state” support extreme authoritarian ideologies, it’s unlikely their criticisms of that state are an effort to increase democracy. It appears it’s merely one more tool in their arsenal to frighten voters in the effort to put their authoritarian ideas into practice. Brexit was another such tool in the UK.

        Ruth Benedict wrote of culture as personality writ large. She was simply trying to help her readers understand culture. A person has a personality, involved in and developed from the personality each person shares with others, their culture. In this sense, and only in this sense to individual cultures exist. Even extreme individualistic societies, such as the US share a common personality, and thus a culture. In other words, American culture socializes every American to and expects every American “to be an individual.” Populism in America is a movement arising usually to “fix” aspects of American culture that are failing. In simple terms, it says what American culture preaches, “be an individual.” Populism is a viral and often violent expression of the American cultural configuration.

        As to the UK “deep state,” I don’t know much about it. But I believe there as in the US, the bottom 90% of the population, economically and in status understand “radical uncertainty” well, in this age of expanding neoliberalism. They are forced to live it every day.

        Now trust in one’s government representatives is a subject that went out of vogue in the 1980s in America. Trust by the constituency of their representatives depends on honesty and transparency on both sides. That didn’t exist in the US for its first 150 years. Got better after WWII, with the rise of the administrative (deep) state and declined precipitously beginning in the 1970s. In the 1980s representatives lost interest in informing their constituents and constituents lost interest in governing. After all, Reagan (a man widely trusted for his acting, not his governing abilities) told us government is the problem. So, no one need worry about making it work. We could leave the political, legal, and economic affairs of the country to the markets. This is not a new culture, a “new logic” as you say. It was the culture of the first 150 years of American history, no matter what you may read in most of the history texts.

      • September 24, 2019 at 2:30 pm

        Ken, Differences do indeed matter. I don’t doubt much of your view. But I quibble with this:
        “As to the UK “deep state,” I don’t know much about it. But I believe there as in the US, the bottom 90% of the population, economically and in status understand “radical uncertainty” well, in this age of expanding neoliberalism. They are forced to live it every day.”

        I think we agree that the lives of the 90% can only be understood by considering radical uncertainty. But I think their lives could be improved if they understood radical uncertainty better. (Or even if well-meaning ‘intellectuals’ did.)

      • Ken Zimmerman
        September 25, 2019 at 1:55 am

        Dave, can’t argue with that conclusion.

      • Craig
        September 22, 2019 at 5:49 pm

        Well Ken you have the disadvantage of having negotiated within the current paradigm of Debt Only for the sole form and vehicle for the distribution of credit/money….which contradictorily assumes monetary scarcity and price and asset inflation are immutable realities.

        Fortunately Abundantly Direct and Reciprocal Monetary Gifting at the point of retail sale mathematically, empirically, immediately, stably, individually and commercially de-bunks those orthodoxies.

        When you can offer real and permanently progressive solutions for all stakeholders in a negotiation (except perhaps for one illegitimate business model who everyone already loves to hate because they know in their heart of hearts that it “owns the joint”, read dominates and manipulates with the current paradigm) it makes those negotiations and policy choices a helluva a lot easier.

        But then, what are mega paradigm changes for except to change entire cultures/patterns?

      • Ken Zimmerman
        September 23, 2019 at 1:54 am

        Craig, I’ve helped to negotiate many win-win-win settlements. So your paradigm change isn’t essential, in my view. But things would be much easier, fairer, and beneficial for all involved if all parties in negotiations knew and followed the rules, negotiated in good faith, and if not in good faith were held to account by elected members of government and ultimately each ordinary person. Since I have no idea of how your direct and reciprocal monetary gifting at the point of retail sale will work out in practice, I can’t say if it will improve this situation. The result depends a lot on how the changes are made and through what institutions. As things stand now neither major political party could champion such changes. Neither could any institution of existing governments. Religious institutions are out. As is the judiciary. Your proposed changes may be stymied by the existing cultural wars, and the coming intensification of those wars. So, sit tight, This is not a good time to be a reformer in America.

      • September 23, 2019 at 8:02 pm

        Ken, you have referred to ‘fairness’, ‘following the rules’ and ‘good faith’. These seem to me to be culturally-dependent concepts, so I’m not sure how these would apply outside of a monoculture. My own view is that if we are to have a healthy globalised economy (or even healthy interacting economies) we would need to think through some sounder base. Your culture may believe this to be impossible. My experience and logic do not.

      • Ken Zimmerman
        September 24, 2019 at 1:28 am

        Dave, of course these notions and actions are culturally entangled. But people re-negotiate cultures all the time, including building bridges from one culture to another. Not always the best bridges or what everybody involved wants, but bridges nonetheless. But this is hard and sometime dangerous work. And it often fails. Think of the bridges between American and Vietnamese cultures that could have stopped war, but were never even attempted by those in charge of such policies. Or, the 50 years of cold war that could have been prevented by such bridges between Russian and American cultures. Which even today remain incomplete. Current neoliberal globalization is based on one cultural bridge, the dollar. As one member of Hamas pointed out, “the dollar takes me anywhere I need to go.” Such incomplete cultural negotiations are already failing, as now China sees its currency displacing the dollar. The dollar culture can create cheap consumer products, fund wars of any size, and make large international corporations even richer. But it cannot solve problems like equal access to basics (food, water, health care), the consequences of war, racism and bigotry, and preventing nuclear proliferation. A lot more work is necessary.

      • September 24, 2019 at 2:36 pm

        Ken, I’m not entirely disagreeing. Its just that I see ‘cultures’ as more points of reference to aid effective collaboration rather than something that we have to choose and comply with. I accept that your descriptions are nearer to the current reality, but what you advocate seems to me to call for some ‘loosening up’, away from ‘cutural fundamentalism’. What do you suggest?

      • Ken Zimmerman
        September 25, 2019 at 2:17 am

        Essentially culture can be defined as sets of human ways of life (institutions) that are passed down from one generation to the next. This includes social structure, language, law, politics, religion, magic, art, and technology, and many institutions that don’t fit neatly into any of these categories, or cross from one part of life to another and sometimes back again. The important point is that culture is to humans like water is to the fish. It is everything humans take for granted, seldom examine, and use in every part of human existence. Mostly culture is purposeful. It is a necessity for human survival. And for human identity. I agree this is a heavy load to drop on someone. Of late, I’ve tried to use words that better describe this process of involvement. Such as entangle. Maybe this will help you out.

      • September 25, 2019 at 10:41 pm

        Ken, I hope we can do more to improve our environment than fish can. But I get the feeling our views aren’t ‘really’ so very different: we mostly need more bridges.

      • Ken Zimmerman
        September 26, 2019 at 10:30 am

        Dave, humans have the same difficulty with culture that fish have with water. Neither pays much attention to it till it becomes a problem. E.g., polluted water, crashing culture. Empirically speaking, I can’t say humans are showing any signs in their history of doing better with their problems of culture than fish are with their problems of water. More awareness and insightfulness on the part of humans would help. If Gerta manages to change the minds of hardcore Republicans on climate change, I’ll certainly be more hopeful.

      • September 26, 2019 at 1:03 pm

        Ken, I agree with you apart from on climate change, where I quibble. It seems to me that on climate change, as on much else, the standard of science and the public debate hasn’t always been what we might have wished for, and that some denialists have some good reasons not to trust ‘the deep state’ aka ‘the elites’. At least in the UK, some ‘warmists’ have behaved atrociously, muddying the waters considerably. Hopefully, rwer is fostering a higher standard! But it seems to me that ‘progress’ (whatever that is) will depend on some sort of understanding of others, and – as a general rule of thumb – the onus is on those with ‘better’ understanding (even Craig’s ‘wisdom’) to build bridges, as those who are deluded can’t possibly do so. All this, I think, needs to be relflected in a new improved methodology. (But how?)

      • Ken Zimmerman
        September 26, 2019 at 3:19 pm

        “…on climate change, as on much else, the standard of science and the public debate hasn’t always been what we might have wished for….” Humans have been dealing with weather and climate for over 5,000 years for which we have written records, and much longer before writing was invented. Debates on such topics become heated since weather and climate influence so much of human culture and societies. As for “muddying the waters,” I’d contend the whole of science is about muddying the waters, in the effort to later see what’s necessary to know to fix problems humans have identified. But these are not “natural” problems. After all, if climate change might destroy humans, it might also destroy other animals on the planet. But these other animals do not have a “problem” with climate change. Fire, cold, floods may force them to move, but these are not problems. They’re just movements. On your general “rule of thumb,” you’ll need to clearly define “better understanding” and then embed that definition into the culture of the US, UK, etc. if you expect performances that build such bridges. And even then, you may not be successful. Remember, cultures require a lot of time to build and even more time to enculturate members. And sometimes enculturation’s success is not 100%. Even a 5% group of rebels can create many problems for a culture’s survival.

      • September 26, 2019 at 8:37 pm

        Ken, I did put ‘better’ in ‘scare quotes’. (There may be some cultural norms at play here.)

        Like most, I’m inclined to think that my own understanding is at least as good as anyone else in the room (or why was I invited?). But as a suppose expert in ‘radical uncertainty’ I have to at least pretend uncertainty, and I generally find that does well enough in lieu of actual humility.

        I’m not one of those who could claim with a straight face that any particular model (mathematical or otherwise) was culturally neutral or transcended cultures, it is my overwhelming experience that thorough and honest attempts at modelling – in contrast to much mainstream ‘mathematical modelling’ – tend to lead to some sort of resolution of the ‘issues’ at hand and the stakeholders losing interest in the mathematics. I count this as success of a kind. (N.B. My experience is unusual, and may simply reflect the cultures of those who engage me.) So for now I am happy to express the opinion that wherever there are seemingly intractable problems and deep misunderstandings, it would be good to get serious about logic. Worth a try?

        P.S. IF https://www.economist.com/science-and-technology/2019/09/26/proof-emerges-that-a-quantum-computer-can-outperform-a-classical-one is ‘confirmed’ then I may become even more forceful in expressing my views. It seems to me like the sort of thing that economic methodologies would want to take into account. (But mathematics alone is clearly pointless.)

      • Ken Zimmerman
        September 27, 2019 at 11:52 am

        Dave, mathematics is one of the great cultural achievements of humankind. Every schooled person understands the rudiments of number and measures and sees the world through this quantifying conceptual framework. By these means mathematics provides the language of the socially all-important practices of work, commerce, and economics. In addition, digital computers and the full range of information technology applications are all regulated by and speak to each other exclusively in the language of mathematics, and they would not be possible without it. Also, some of the deepest and most abstract speculations of the human mind concern the nature and relations of objects found only in the virtual reality of mathematics. Infinities, paradoxes, logical deduction, perfect harmonies, structures and symmetries, and many other concepts are all analyzed and explored in great detail in mathematics. Thus, mathematics provides the language of daring abstract thought. And, mathematics is the language of certainty. Despite being in parts familiar to all, because of these contradictory aspects, mathematics remains an enigma and a mystery at the heart of human culture. It is both the language of the everyday world of commercial life and that of an unseen and perfect virtual reality. It includes both free-ranging ethereal speculation and rock-hard certainty. Or, does it? These are the issues that any social scientist wanting to use mathematics for their science must address. Unfortunately, at this juncture economists address none of these issues.

      • September 30, 2019 at 6:22 pm

        Ken, “Every schooled person understands the rudiments of number and measures and sees the world through this quantifying conceptual framework.”

        In 1918 Wittgenstein did not understand mathematical measure theory, or else he wouldn’t have written what he did about probability. As far as I know neither number theory or measure theory are on any UK school syllabus, being rather counter-intuitive.

        “By these means mathematics provides the language of the socially all-important practices of work, commerce, and economics.” Well, kind of. But sadly, mathematics only influences these things through the lens of some culture. And these often filter and distort hugely. (Hence Keynes’ ‘pseudo-mathematics’.)

        “In addition, digital computers and the full range of information technology applications are all regulated by and speak to each other exclusively in the language of mathematics, and they would not be possible without it.” Again, kind of. Mostly, though, they use something that is more like Orwell’s ‘newspeak’, and are unaffected by what Keynes called ‘modern mathematics’.

        “mathematics is the language of certainty.” Hardly. (I thought we agreed on that!) Mathematics is typically used to express certainty, but that’s not an inherent limitation of the subject.

        “mathematics remains an enigma and a mystery at the heart of human culture” Agreed. One which we need to understand better, lest we go astray.

        “It is both the language of the everyday world of commercial life and that of an unseen and perfect virtual reality. It includes both free-ranging ethereal speculation and rock-hard certainty. Or, does it?” In my view it also has a potential to be much more enlightening.

        “These are the issues that any social scientist wanting to use mathematics for their science must address. Unfortunately, at this juncture economists address none of these issues.” Right on! Wouldn’t want to quibble with that.

      • Ken Zimmerman
        October 1, 2019 at 11:51 am

        Dave, you continue to reverse mathematics and culture in a society. Mathematics only exists in and through culture, each particular culture. Without culture mathematics cannot exist. But culture exists whether it includes a mathematics or not. So, what you call “filter and distort” is simply a culture’s version of mathematics, which you may attack, so long as it’s not your society’s mathematics. This generally becomes taken-for-granted by societal members, who after a time no longer notice their actions and thoughts (remember the fish and water). Yes, digital mathematics is the basis of one version of computing. But did you know that up till the late 19th century the abacus was the most sophisticated mathematical computing device on Earth. As to certainty, mathematics is the only language there is for it. A cultural examination is needed to determine just what certainty is intended to be. For example, among Christians is there a way to express the certainty of God’s existence? Particularly, since Christians reject mathematics to express this. So, Christians are left with faith as the only means.

      • October 3, 2019 at 8:07 pm

        Ken, I’m appreciating your comments as of real importance to any development to a credible methodology, and also (in my view) potentially contributing to the content of a methodology. But …

        I’ve just noted elsewhere my thoughts on the topic of radical uncertainty and think it best not to comment too much on your ‘patch’.

      • Craig
        September 23, 2019 at 8:37 am

        The present institutions cannot be relied upon to see the new paradigm. I recognize that, although it is so obviously beneficial for both the individual, students and the small to medium sized business community that those are the equally obvious very large constituencies that we need to communicate it to. In other words it’s fruitless to try to create change preaching to academia or large elite controlled organizations. What is required is a bottom up individual consumer/worker/student/business community mass movement not unlike Gandhi’s and MLK’s….because it is so beneficial for all of those.

      • Ken Zimmerman
        September 23, 2019 at 10:54 am

        Craig, I wish it were that simple. Good luck, in any event.

      • Craig
        September 23, 2019 at 10:03 pm

        Thus it communicates.

  18. Craig
    September 16, 2019 at 8:20 pm

    All of this discussion is well and good, however, none of it focuses on and penetrates to the heart of the economic problem which is indeed the monetary paradigm.

    There is no end to history so yes uncertainty is radical, but true and enduring progress does occur with paradigm changes….and history and the eventual new zeitgeist….that the concept behind the new monetary paradigm and behind ALL historic paradigm changes, will eventually make our times seem as primitive and un-evolved….as they actually are.

    • September 22, 2019 at 12:03 pm

      So, Craig, as you have not contributed to the discussion on “Necessary Inventions”, what do you think of what I’ve been saying there? Our aims are clearly similar, but to leave room for discussion, can you translate the specific outcome you advocate (discount at the point of sale) into a more general concept?

  19. Yoshinori Shiozawa
    September 17, 2019 at 7:10 am

    Please read my comment on September 9, 2019 at 8:30 pm to Asad Zaman”s article
    Game theory for humans with hearts
    https://rwer.wordpress.com/2019/09/07/game-theory-for-humans-with-hearts/

    which is in fact a copy of my comment Lars Syll’s article
    Game theorists — people carried away by fictions July 7, 2019
    https://rwer.wordpress.com/2019/07/07/game-theorists-people-carried-away-by-fictions/#comments

  20. Craig
    September 17, 2019 at 7:12 pm

    Epicycles, perturbations of the orbit of mars, ad nauseam already established valid theoretics, i.e. intellectual masturbation.

    “It’s the monetary paradigm, stupid.”

  21. Yoshinori Shiozawa
    September 22, 2019 at 3:37 am

    Economy is not so simple entity that a monetary reform idea of a dreamer can solve 99.99% of problems of the economy. We must study the economy with much humbler mind. Learn first from history of the economy and then form history of economics as one of sciences.

    • Ken Zimmerman
      September 22, 2019 at 9:39 am

      Good thoughts, Yoshinori. Before I agree with you fully, I need to hear once again your notion of what is and is not a behavioral and social science. Thanks.

    • Craig
      September 30, 2019 at 10:14 pm

      @Yoshinori

      Genuine paradigms are single concepts that create an entirely new pluralism, that is a new pattern. A paradigm is hence the second most integrative human concept, second only to the NATURAL (got that?) philosophical concept of grace which is the ultimate integrative and unitary concept of wisdom itself. Considering that the defining characteristics of every historical paradigm change has been an aspect or aspects of the concept of grace…this is entirely logical, that is, unless you ascribe to the religion of scientism.

      Paradigms are not reforms. They are pattern changes. Reforms exist only WITHIN the old paradigm and hence must conform to it and consider its complexities. They are “epicycles and perturbations of Mars”.

      A new paradigm fits into any of the legitimate and aligned existing structures and complexities in the body of knowledge/area of human endeavor, but its concept being integrative, unitary and transformational is still a new pattern altogether.

      • Craig
        September 30, 2019 at 11:55 pm

        Political analogy:

        The Mueller Investigation was reform-like in that it was emasculated by complexity and got easily nulled by an operative.

        Trump’s soliciting of a foreign government to benefit him in his coming political campaign by smearing his likely opponent is a singularly defining and impeachable act that lies and bold obs-curation cannot undo.

  22. Rob
    September 23, 2019 at 1:12 am

    When in spring 2011 the Shibusawa Eiichi Memorial Foundation in Tokyo asked three Western historians – from the London School of Economics, the Harvard Business School, and the École des hautes études en sciences sociales, respectively – to join its new research project on gapponshugi, we accepted for three more reasons.
    .
    One was the importance of the core topic of the project: building a historical perspective on morality and ethics in world business, themes that had been relatively neglected by the social sciences, including history. (Patrick Fridenson and Kikkawa Takeo. Ethical Capitalism: Shibusawa Eiichi and Business Leadership in Global Perspective (Japan and Global Society) . University of Toronto Press, Scholarly Publishing Division. Kindle Edition.)

    .
    A fascinating read …

  23. September 27, 2019 at 8:44 am

    Dave Marsay on September 26 at 8.37 pm: “For now I am happy to express the opinion that wherever there are seemingly intractable problems and deep misunderstandings, it would be good to get serious about logic. Worth a try?”

    Dave, may I draw your attention to my comments (which do just this) at https://rwer.wordpress.com/2019/09/24/why-policy-design-without-theory-is-useless/#comment-159166.

    Your comments as an obviously well-informed mathematician would be greatly appreciated.
    Even significant thought gets nowhere without communication, appreciation and corrective or clarifying feedback.

    • September 30, 2019 at 5:21 pm

      Dave T, I’m in the middle of Keynes’ biography of A. Marshall. It seems shockingly relevant today, so I need to digest it before making substantive comments. But meaningwhile, could you clarify what you mean by ‘the law of least action’? I quite get that there’s something crucial to say on the topic, but haven’t got my own ideas straight enough.

    • October 1, 2019 at 8:55 am

      Dave M, I take it you are referring to this paragraph:

      “Logical representation of evolution starts from nothing, and the addition of three axioms: something, how to symbolise it, and how to change it (the law of least action). If the something is energy, matter can be derived from it, but not vice versa. Two lines of science have evolved, to represent both the something and the representations, i.e. physical and information science. Mathematics (as an information science) has learned how to distinguish variables from values, and how to physically control them.”

      Logic is about words, or rather, relationships between them. Words represent either reality or other words, and the appearance of reality is representative of the reality itself, i.e. functions as an iconic form of word. The meaning of words can thus be about relationships in reality. The problem arises with actions and forces, which we can’t see (though we can see the effects of them). So scientists measure the effect of actions by observing their effects on instruments, expressing the effects in graphs, and translating the graphs into words: in common language representing them by their appearance or in an algebraic language which can be used to regenerate the graph. How, though, are they to calibrate the instruments?

      ‘The Law of Least Action’ I understand to be an idiomatic phrase capturing the conditions Newton found needed to be taken as axiomatic (as Law) if the translation process was to work out reliably.

      1. Every action has an equal and opposite reaction.

      2. Motion proceeds in a straight line unless something changes it.

      Thinking, the relationships found in empty space will apply generally if Galilean friction is minimised. My argument uses these in inverted form: to generate change, cause a reaction.
      ‘Free will’ operates by NOT reacting, ‘self-control’ leaving others free to act.

      Based on the Maas book I have quoted, the significance of this in mathematical economics comes from Jevons seeing the point of least action in balanced weighing scales or equilibrium in a barometric U-tube, his generalising the mathematical representation of these to graphical inflexions determinable with Newton’s differential calculus. Not unreasonable, but it has left entirely out of account the differing uses of language in what it is doing (e.g. ‘law’ being a noun, ‘least’ an adverb and ‘action’ de-referencing its verb). More seriously, it has left out the differing functions in the economy of children, men, women and old folk (representing those with time to think): roughly consumers, re-producers, distributors and developers, hence the corresponding processes.

      • October 3, 2019 at 7:48 pm

        Dave T, Thanks. Much of what you say seems broadly significant for methodolgy. It may be broadly logically equivalent to my own way of looking at things, but your notes on ‘least action’ have given me an insight of relevance to radical uncertainty. (So excuse us for hijacking the topic!)

        One problem I have with even ‘proper’ mathematical probability theory is that the notation seems to invite misunderstanding. Your notion of least action seems to me in many common cases to be logically equivalent to a principle of conservation, and hence they might be regarded as different representations of the same theory. Yet the practical implications of the two different formulations are different. This is because scientists tend to apply logic to identify a range of credible explanations for some results and then choose the simplest one, where what is ‘simplest’ depends on the representation.

        Economists tend to use a simple representation of uncertainty that denies radical uncertainty. They seem to regard the mathematics of uncertainty as impractical because there is no agreement on a common representation for radical uncertainty, and hence no agreed mathematical method for dealing with it. Which representation is best depends on the issues to be addressed. Maybe if we drew a parrallel with science we could make this seem reasonable, and think of economic methodologies as being underpinned by multiple methods for dealing with uncertainty, rather than just one.

        This seems impractical, so maybe we need some leading economists who grapple with these issues and recommend methods for routine use to tackle particular kinds of issues appropriate to the economic circumstances of the time. For example, it seems to me that mainstream approaches are fine most of the time, as long as you dont try to extrapolate beyond ‘critical instabilities’ such as crashes. So perhaps, as in the sciences, we need to distinguish between those who applying the accepted paradigms and those who are critiquing them.

        But we also need to understand ‘where people are coming from’ if we are to anticipate how they may interpret our representations (the culture problem). Coincidentally, I am currently trying to make sense of Jevons. It seems to me that whatever methodolgy is adopted, it will need to be situated by thoughtful comparison with other theories/representations/interpretations. (Not easy!)

      • October 4, 2019 at 10:36 am

        “Economists tend to use a simple representation of uncertainty that denies radical uncertainty”.

        That’s certainly part of what I intended, though no way would I consult “leading economists who grapple with these issues and recommend methods for routine use to tackle particular kinds of issues appropriate to the economic circumstances of the time.”

        It is not radically uncertain that the radically uncertain happens (indeed what it refers to become certain when it has happened); nor that the bulk of potential mortgagees, who understand simple arithmetic, won’t understand exponentials and the logarithmic way of dealing with them. Hence those who devised the routine methods of handling mortgages transformed the interest claimed into a single total divided up across the term, and added to (or occasionally subtracted from) when that becomes possible (or necessary). When the radically uncertain happens (or is not radically uncertain because it is engineered), the money lender lays claim (made determinate by money-lender-sponsored law) not to the fictitious money lent (which of course is not there) but to the real collateral. So yes, the representation denies the radical uncertainty, its statistics disguising occasional vile certainty.

      • Ken Zimmerman
        October 4, 2019 at 12:51 pm

        Dave, if economists deny radical uncertainty, mystifying it in their representations of uncertainty, mathematicians reject it as an axiom. In the text of their papers and books, mathematicians continually speak in terms of P follows from O, O follows from N, etc. With the exception of residuals and error terms, mathematicians present their results as certain. This is a particularly difficult problem for mathematics in social scientific investigations.

      • October 5, 2019 at 1:06 pm

        Ken, What do you mean by radical uncertainty?

        I tend to think of ‘uncertainty’ as lack of uncertainty but people mean different things by ‘radical uncertainty’: E.g. ‘Uncertainty that is not capable of being modelled by probability theory’, ‘uncertainty for which there is not currently a mathematical model’ or ‘uncertainty for which there is no possible mathematical model’. Confusion can arise if people think that probability theory is the only current or even the only possible mathematical model (as some economists seem to).

        Clearly, you can’t have as an axiom something which you do not understand, so the most radical kind of uncertainty must be rejected as an axiom. But Keynes, Whitehead, Turing, Good all have axioms for uncertainty that would fit the most inclusive notion of ‘radical’. In between, if you can explain your notion of radical uncertainty, maybe a mathematician could model it? ;-)

        In my view, the problem not necessarily that mathematicians ‘present their results as certain’ but that for some reason I don’t understand people interpret them as doing so. On my blog (djmarsay.wordpress.com) I am collecting references to statements by mathematicians that some have interpreted as ‘denying radical uncertainty’ and putting them in a ‘proper’ context. I would appreciate any contributions to my (long) list.

        Thanks for engaging with me. Radical uncertainty (whatever it is) does need to be understood better by economists. I think both our insights and viewpoints useful, but it would be better if we could reconcile them.

      • Ken Zimmerman
        October 6, 2019 at 12:18 pm

        Dave, I agree with the parameters of “radical uncertainty” pointed out by Lars. “Knight and Keynes believed in the ubiquity of ‘radical uncertainty’. Not only did we not know what was going to happen, we had a very limited ability to even describe the things that might happen. They distinguished risk, which could be described with the aid of probabilities, from real uncertainty—which could not. In Knight’s world, such uncertainties gave rise to the profit opportunities which were the dynamic of a capitalist economy. Keynes saw these uncertainties as at the root of the inevitable instability in such economies.” It’s my view that both Knight and Keynes are correct. Moreover, as happens in capitalist economies, uncertainties lead to both, chances for profit which are uncertain and thus unsteady, and instability which often gains epidemic status.

        Uncertainty theory and mathematics can by definition only deal with that of which humans have knowledge that may not be fixed but is not uncertain. Otherwise we’re dropping into a bottomless pool with models and mathematics that are worse than useless. They can become anchors that drag us down. But mathematicians can legitimately argue, I believe that 400 years of socialization in the west about the infallibility of mathematics and mathematical knowledge have made this delusion an accepted part of life in most of the western world.

        Dave, I believe your assessment of the relationship between mathematics and certainty is on target. Mathematicians do present the results of their work as certain and revelatory of relationships that explain “reality.” Physicists have the same tendency. Just about every other scientist rejects such delusions.

        This is a debate that has gone on hundreds of years in mathematics. Frege argued that mathematical knowledge consists of truths known a priori, and that reason alone, in the form of logical proof, provides certain and absolute foundations for it. Consequently, until recently, 20th century philosophy of mathematics has been dominated by the quest for absolute foundations for mathematical truth. My aim is to question this dominant view, for which I shall adopt the term absolutist, that mathematical truth is absolutely valid and thus infallible, and that mathematics (with logic) is the one and perhaps the only realm of incorrigible, indubitable, and objective knowledge. I will contrast this with the opposing view, for which I shall adopt the term fallibilist, that mathematical truth is fallible and corrigible and should never be regarded as being above revision and correction. The debate is well underway.

      • October 6, 2019 at 5:51 pm

        Ken, To start with your end, I agree that “[human claims of] mathematical truth are fallible and corrigible and should never be regarded as being above revision and correction.” But maybe less so than some other claims? If not, how may we improve them? (E.g. Keynes identifies ‘psuedo-mathematics’ as particulalry fallible, particularly calculus and probability theory as previously understood. He commended ‘modern mathematics’. Isn’t this an advance? Can you suggest any other areas that are particularly dodgy? (I can!)

        I like your “But mathematicians can legitimately argue, I believe that 400 years of socialization in the west about the infallibility of mathematics and mathematical knowledge have made this delusion an accepted part of life in most of the western world.” Any suggestions as how we can resist this dismal socialization, keep our integrity, and contribute to ‘social progress’ (whatever that means) would be much appreciated.;-)

        “This is a debate that has gone on hundreds of years in mathematics. ” And in economics, e.g. https://djmarsay.wordpress.com/economics/keynes-essays-in-biography/ . I have to see this as essential to economic methodolgy, even now. But how could we progress it?

      • Ken Zimmerman
        October 7, 2019 at 1:24 am

        Dave, “But maybe less so than some other claims? If not, how may we improve them?” In other words, can mathematics be improperly used or the subject of deliberate lies? Yes. For mathematicians, the problem is best handled through stricter peer review and ethics education. For business and corporations, where the greatest abuses occur, I must go with Joan Robinson’s suggestion – better educated public to hold them accountable. For the worst offenders, revocation of charter and jail time.

        We don’t resist socialization, we change it. And we do it early, beginning even before formal education by placing mathematics in the category of a useful but limited tool. That can continue in formal education, and hopefully in education for jobs and for operating businesses and corporations. Changing the positions in laws and government is more difficult, since we’ll be opposing the great bastion of absolutist mathematics, physicists. It’s my view physicists are the embodiment of that 20th century axiom, the dumbest smart people we ever met.

        Economists are riding the absolutist ship in mathematics, and have been since WWII. Although my experiences with other social scientists (sociologists, psychologists) leads me to believe they’re not even aware there is a debate. And, if there was a clear case of the abuse of mathematics it is with social scientists. Particularly statistics. But since the 1980s social scientists have begun to ask questions, at least. So some small hope is possible.

      • October 7, 2019 at 2:32 pm

        Ken, From a very early age I have been socialized by people like Joan, some of whom I suppose would have engaged and agreed with her. Certainly, they were following her advice. So what happened?

        As a mathematician, it seems to me that currently many social scientists have a misguided view of mathematics. Some of them seem to give too much weight to inappropriate mathematics. Others seem to think they can get by without any mathematics. Maybe they can, but it seems to me that ‘the real deal’ would be helpful to them, if only to counter-act the misuse of mathematics.

        I think that while we express ourselves very differently, we have compatible diagnoses. In particular, I think that we are both doubtful about the prospects for reforming economics without first reforming .social sciences and [their understanding of] mathematics. Radical uncertainty is just the start, but it can be a good test case, I think.

      • Ken Zimmerman
        October 8, 2019 at 2:12 am

        Dave, I heard Dr. Robinson speak several times. A good economist and social scientist, but more importantly a good person. Her insights always fascinated me.

        The history of social science and mathematics is not a short study topic. Suffice it to say that to catch the eye of policy makers and universities, economists wanted something that added a scientific luster (not necessarily science itself) and sounded important in terms of its work. Mathematics satisfied those wishes of economists. That said, it’s also important to note economics has always utilized some mathematics, such as descriptive and even some inferential statistics along with simple citations and graphs of production, consumption, spending, etc.

        It’s important at this juncture that both social scientists and non-social scientists enter a dialogue about what is a social science and what purposes ought it to serve. Those questions today are mostly answered by “experts” who long ago lost touch with the purposes for social science debated by early founders such as Comte, Durkheim, Tarde, Weber, etc.

      • October 8, 2019 at 10:09 am

        Agreed.

  24. Gerald Holtham
    October 7, 2019 at 7:42 pm

    Mathematics only ensures that the implications of a set or premises and a set of relationships in a model or theory can be correctly worked out without logical error. And oh yes it does in practice. Don’t start talking about Frege or quantum mechanics. Let’s stick to point and to the practical domain. But mathematics cannot protect against adopting wrong or inappropriate premises or against mis-specifying the relations in the model. Couching them in mathematical terms is necessary to derive and if possible test implications but cannot prevent GIGO. Economics is difficult and its problems is have sociological roots. They are not caused by a misunderstanding of mathematics.

    • October 7, 2019 at 9:58 pm

      CPlese could you suggest a mathematical account of uncertainty, fit for the purposes of economics?

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