A World Of Free Movement Would Be $78 Trillion Richer

[Queequeg]

Analysis and experimentation of what? Is a bottle of water worth the same to you as to someone else? Is it worth the same to you in your house as it is in the desert when you are dying of thirst? If value is not subjective, and everyone values everything to the same level, why would anyone ever trade?

I was using the term "subjective" as you gave it before and not your latest definition:

One of the biggest problems is that, since value is subjective, you cannot quantify it.

Of course everyone has a different value for each product but these personal values are very much quantifiable. Most commonly through market price testing, the aggregate demand is determined for any given price. This is how the Demand Curve is calculated, plotting price on the y axis vs quantity on the x. In the case of water, the relatively few thirsty desert hikers would show up on the far left of the curve where they would pay just about any price for a drink. The curve would then continually drop down to the right showing that more and more people will buy a glass of water as the price decreases. I am pretty sure that even the Austrians understand the elasticity of demand and are not afraid to quantify it.

 

[AJC]

Then why has it been happening steadily in one direction for over 10 millennia?

As a society's power increases, inequality must grow. We just happen to live in a time where the absolute wealth is high enough that the inequality doesn't translate to a huge gulf in living standards, but inequality is still higher today than 1000 years ago.

I disagree with this--although this disagreement likely comes about because I am looking at this from a different angle than you. Allow me to explain.

You refer to "society's power" as if that power is separated from all individuals and we cannot partake of it. Well--not only is it not separate from us but we do partake of it. To me this reference is akin to a collectivist philosophy where the State is separate from and above all individuals. This is usually used by intellectuals who want to denigrate individuals (the place of real power and choice) at the hands of the State (or Church, of Family, or Whatever). Although this may have been the status quo for most of human history, it no longer holds, at least in the West.

Now, given that in our society "power" is not abstracted away from the individual and into the hands of a pope or monarch or president, but is instead seated firmly in the grip of the individual, then it certainly does not follow that "inequality must grow". I see no reason at all why this should be so. Does the CEO have more freedom than any man or woman on the street? Sure they have more resources, but there's no law that gives them greater freedom of choice than any one else, no law that says they can make 25 free will decisions today while I can only make 10. So I'd say we all have equality on the deepest and most important level possible: the level of our human freedom. This is actually a miracle if we look back at the history of humanity.

But when you say "inequality" I'm assuming you're referring to possessions, but even with this I'm not sure it must be true. Pretty much the entire world is richer now than ever before so I don't know how we can explain that away to "inequality" or slavery or anything of the sort.

Hope I didn't misinterpret your words, just wanted to differentiate that key concept: "inequality" can refer to different things--possessions or human value/autonomy, and if there isn't a difference in autonomy between individuals then what can we say about the relevance of "inequality of possesions"?

 

[kyle]

Peat talked about how NAFTA dislodged so many in Mexico which created the border issue. That is not the whole story. The Mexican identity was built on the Catholic faith, in other words they were in possession of an 'ethnos' based on shared beliefs.

What NAFTA did was two-fold. It did wipe out that class of farmers so they could be remolded into a roving, "free-moving" workforce for pop-up factories.

The other aspect is destroying the Mexican ethnic identity and its "folk" practices.

Would a people with strongly held faith and kinship ties work tolerate such conditions or would they be able to band together and fight back?

When people talk about immigrants coming here for a better life, it should raise the question why life in places like Mexico have become so bad. Well, it's the other side of a coin of our own economic exploitation. It's not that they want to be here - it's that certain interests have socially engineered conditions to make it impossible to live there.

So rather than pointing the finger at the real culprits, the socially conservatives take the blame as being bigoted when in fact they are fighting against the same deracination Mexico has undergone on our own land - maybe not in these exact terms because people lack the consciousness to articulate it.

Libertarians tend not to perceive such things - I think because of a sort of narrow psychology that relies on deductive thinking which makes the handful of precepts it's based on an easy way of viewing the world.

 

[lvysaur]

Now, given that in our society "power" is not abstracted away from the individual and into the hands of a pope or monarch or president, but is instead seated firmly in the grip of the individual, then it certainly does not follow that "inequality must grow".

Power has its greatest results when it is unidirectional. A 20-man team trying to build a robot will be more successful in a hierarchical pattern than in an egalitarian one. A few guys make the biggest decisions, a few guys under them think about how to achieve those, under them comes the mental dirty work.

This pattern necessitates inequality. And yes, CEOs etc. have more freedom, since money influences law. Since financial inequality scales with civilizational complexity, it follows that we are legally more unequal than before as well. This may not translate into absolute terms (rulers won't send in explicit brownshirt goons), but in relative terms (elites are more untouchable now than 500 years ago).

 

[AJC]

Power has its greatest results when it is unidirectional. A 20-man team trying to build a robot will be more successful in a hierarchical pattern than in an egalitarian one. A few guys make the biggest decisions, a few guys under them think about how to achieve those, under them comes the mental dirty work.

This pattern necessitates inequality. And yes, CEOs etc. have more freedom, since money influences law. Since financial inequality scales with civilizational complexity, it follows that we are legally more unequal than before as well. This may not translate into absolute terms (rulers won't send in explicit brownshirt goons), but in relative terms (elites are more untouchable now than 500 years ago).

How are we possibly more legally unequal now than were the Russian serfs or the slaves of hundreds of generations which could not own property and were in fact legally considered as property?

The example you gave refers to a micro situation and doesn't take into account the fact that the man on the bottom can one day become the man on the top. The hierarchical "framework" may stay the same, but the people who fill those roles will not. This is completely different than previous societies were there was a noble class and a peasant class and no way of bridging the gap between the two.

 

[Kyle M]

I was using the term "subjective" as you gave it before and not your latest definition:

Subjective is a very objectively defined term, what was my definition before? Objective would be, say, to quantify the number of apples in front of you. No one can dispute that 3 discreet apples are 3. The value of those apples, traded in dollars, or oranges, or pencils, however, cannot be quantified objectively between people. it's a very simple concept, universally true, and forms the basis for modern economics. Even Keynesians and MMT people will, if pressed, admit value is subjective, but then when they use their models they quantify all in objective value and put tangents where no true curve exists etc. etc..

Of course everyone has a different value for each product but these personal values are very much quantifiable. Most commonly through market price testing, the aggregate demand is determined for any given price. This is how the Demand Curve is calculated, plotting price on the y axis vs quantity on the x. In the case of water, the relatively few thirsty desert hikers would show up on the far left of the curve where they would pay just about any price for a drink. The curve would then continually drop down to the right showing that more and more people will buy a glass of water as the price decreases. I am pretty sure that even the Austrians understand the elasticity of demand and are not afraid to quantify it.

That is a business application, not for science. A businessman acts in a given time and place, where apples have a relatively stable value, for example. You cannot take that value, in an open air market in Philadelaphia, Pennsylvania, and apply that to the "value of apples" in a scientific sense. If you think that business calculations having to do with profit and loss are similar to economic science, well that's a very incorrect thing to think. Finance is also different than economics, but slightly closer because it deals so much with currency to currency transactions which are much closer to objective than currency to goods/services.

 

[Kyle M]

The Austrian School starts from the axiom that human acts, and believes economics is the study of human action not anything specifically to do with money or nation states etc.

Economics starts with the individual actor, for example why do you use a fork to eat instead of a bottle of water? What if the fork is more expensive? Well, you made an economic calculation and you acted on that the fork is so much more effective as an eating utensil than the bottle of water that the price differential is not even close to worth considering. This is what you do all day long. Why walk straight to your car, instead of in an "s" pattern towards it? Economics. Why use a computer and the internet to talk about nutrition rather than smoke signals or buying roadside billboards and putting messages on them that people can then respond to with another billboard? Economics. The discreet actions you take in the world, from walking to investing in stocks and bonds, are all actions that can be analyzed. They cannot, however, be analyzed in some of the ways that some of the other schools of economic thought do. That is why, since governments and central banks are stacked with Keynesians and MMT guys, they consistently make retarded predictions or don't even realize (Ben Bernanke famously) that there is a recession coming when they are right in the middle of one.

The premises of a science are more important than its techniques, that is something I can personally attest to in biomedical, and if you believe at all in guys like Ray Peat you would have to agree. Economics is no different, in fact it's very much more to that point since it is not an hypothesis driven science with replicable experimentation but an inductive one. You cannot possibly have a controlled economic experiment dealing with human action, and any attempt to do so and quantify the results with complex math exists for the justification of academic positions and funding and not at all for it's truth-telling merits.

 

[Queequeg]

Subjective is a very objectively defined term, what was my definition before? Objective would be, say, to quantify the number of apples in front of you. No one can dispute that 3 discreet apples are 3. The value of those apples, traded in dollars, or oranges, or pencils, however, cannot be quantified objectively between people. it's a very simple concept, universally true, and forms the basis for modern economics. Even Keynesians and MMT people will, if pressed, admit value is subjective, but then when they use their models they quantify all in objective value and put tangents where no true curve exists etc. etc..

The word subjective has several different meanings. You first used it to mean unquantifiable, then switched to it meaning personal and now it seems that you are back to unquantifiable. Value is personal but it is not unquantifiable.

That is a business application, not for science. A businessman acts in a given time and place, where apples have a relatively stable value, for example. You cannot take that value, in an open air market in Philadelaphia, Pennsylvania, and apply that to the "value of apples" in a scientific sense. If you think that business calculations having to do with profit and loss are similar to economic science, well that's a very incorrect thing to think. Finance is also different than economics, but slightly closer because it deals so much with currency to currency transactions which are much closer to objective than currency to goods/services.

Yes there is a lot of incorrect thinking going on.

 

[Queequeg]

The premises of a science are more important than its techniques, that is something I can personally attest to in biomedical, and if you believe at all in guys like Ray Peat you would have to agree.

This could not be more untrue. It clearly shows that you are more concerned with ideology i.e. premise than evidence i.e. techniques. Both physical and social science are based on the idea that theories are subservient to empirical evidence and not the other way around. I highly doubt that Ray sees the world like you do as he is the least ideological person I have ever come across.

 

[Kyle M]

The word subjective has several different meanings. You first used it to mean unquantifiable, then switched to it meaning personal and now it seems that you are back to unquantifiable. Value is personal but it is not unquantifiable.

Unquantifiable = personal. You cannot quantify the value of any good or service intra-individual, which is what economic modeling does. Value is a subjective calculation made by the acting human, all you can say is that if someone voluntarily trades X for Y (buying, selling, barter) than they value Y higher than X. You cannot say they value Y 2x X, or 1.5X. There is only an ordinal scale where Y > X in value to *that person* at *that time*

 

[Kyle M]

This could not be more untrue. This clearly shows that you are more concerned with ideology i.e. premise than evidence i.e. techniques. Both physical and social science are based on the idea that theories are subservient to empirical evidence and not the other way around. I highly doubt that Ray sees the world like you do as he is the least ideological person I have ever come across.

The example I would give to better explain is receptor and ATPase science. There are thousands of research groups using millions of dollars of equipment that are generating useless results that will not stand the test of time because they assume that there is a sodium potassium pump that maintains the cell's electrical gradient, or that receptors are specific to ligands and that they must bind lock and key and initiate a downstream cascade of phosphorylation events or other covalent modifications to produce a cellular response.

A guy in his basement working with cheap, three generation old technology could produce more valuable results if he didn't have those incorrect premises than the tens of millions of dollars spent by all of these groups.

Same with economics.

 

[Queequeg]

Unquantifiable = personal. You cannot quantify the value of any good or service intra-individual, which is what economic modeling does. Value is a subjective calculation made by the acting human, all you can say is that if someone voluntarily trades X for Y (buying, selling, barter) than they value Y higher than X. You cannot say they value Y 2x X, or 1.5X. There is only an ordinal scale where Y > X in value to *that person* at *that time*

What dictionary are you using btw. Unquantifiable is not the same as personal. In economic terms, the value any person places on an object is determined by the maximum amount he is willing to pay for it. Why you think this cant be determined is baffling. As just one example, have you ever been to an auction? You can easily see what the maximum value any one person places on a item by when they drop out of the auction.

 

[Queequeg]

The example I would give to better explain is receptor and ATPase science. There are thousands of research groups using millions of dollars of equipment that are generating useless results that will not stand the test of time because they assume that there is a sodium potassium pump that maintains the cell's electrical gradient, or that receptors are specific to ligands and that they must bind lock and key and initiate a downstream cascade of phosphorylation events or other covalent modifications to produce a cellular response.

A guy in his basement working with cheap, three generation old technology could produce more valuable results if he didn't have those incorrect premises than the tens of millions of dollars spent by all of these groups.

Same with economics.

The incorrect interpretation of the evidence doesn't negate the value of the evidence. Assuming you are correct, eventually someone besides Gilbert Ling will put it all together and show that the prevailing evidence points to a different conclusion that that of a membrane pump. However they will still have to account for all the existing evidence if their theory is to hold.

 

[Kyle M]

What dictionary are you using btw. Unquantifiable is not the same as personal. In economic terms, the value any person places on an object is determined by the maximum amount he is willing to pay for it. Why you think this cant be determined is baffling. As just one example, have you ever been to an auction? You can easily see what the maximum value any one person places on a item by when they drop out of the auction.

How is that value, which only exists for that person at that moment, usable in economic modeling? If Steve buys a painting for $20,000 on Dec. 6th 2007, what is it's "value" to Charley or Bryan or even to Steve himself on January 23rd 2014?

The only meaningful piece of information you can make from a transaction is that in that moment the buyer valued the good/service more than the cost, and vice versa for the seller.

P.S. - when I said unquantifiable = personal I meant for purposes of economic analysis. If value is personal, then it can't be quantified inter-personally.

 

[Kyle M]

The incorrect interpretation of the evidence doesn't negate the value of the evidence. Assuming you are correct, eventually someone besides Gilbert Ling will put it all together and show that the prevailing evidence points to a different conclusion that that of a membrane pump. However they will still have to account for all the existing evidence if their theory is to hold.

I didn't say incorrect interpretation of evidence, I said premise. Premises exist before evidence is gathered. For example, the entire scientific method rests on an untestable premise that the phenomena we can observe in our reality/universe or whatever you want to call it is understandable and replicable.

 

[Queequeg]

How is that value, which only exists for that person at that moment, usable in economic modeling? If Steve buys a painting for $20,000 on Dec. 6th 2007, what is it's "value" to Charley or Bryan or even to Steve himself on January 23rd 2014?

The only meaningful piece of information you can make from a transaction is that in that moment the buyer valued the good/service more than the cost, and vice versa for the seller.

P.S. - when I said unquantifiable = personal I meant for purposes of economic analysis. If value is personal, then it can't be quantified inter-personally.

I never said that individual values of products are static but that doesn't mean that they cant be quantified. For the most part they don't change that much, all things being equal, and someones valuation today will be very similar to their valuation tomorrow. Also since the demand curve is the combination of many individual demand curves, the relevance of individual fickleness is greatly reduced when you are looking at the market as a whole. Demand curves are calculated and quantified all the time.

I think we are getting further and further afield from the original discussion. My original point was that economics is a quantifiable science and economic models are useful in contrast to what the Austrian School would have you believe. Economic models are used all the time in the real world to make billion dollar business decisions not because they are fashionable but because they are useful and have predictive powers.

 

[Queequeg]

I didn't say incorrect interpretation of evidence, I said premise. Premises exist before evidence is gathered. For example, the entire scientific method rests on an untestable premise that the phenomena we can observe in our reality/universe or whatever you want to call it is understandable and replicable.

The membrane ion pump is more of a hypothesis than a premise. Some believe that the available evidence says its true, while others do not. Eventually the data will decide which is correct. Either way premise or hypothesis, it still doesn't change the value of the data, just the interpretation.

 

[Kyle M]

The membrane ion pump is more of a hypothesis than a premise. Some believe that the available evidence says its true, while others do not. Eventually the data will decide which is correct. Either way premise or hypothesis, it still doesn't change the value of the data, just the interpretation.

This is incorrect. I have had conversations with people where they take their electrophysiology data and just apply a calculated number to it to account for the pump. There is no more testing to figure out whether the pump is there or not, everyone just normalizes their data with it when they are testing the effect of an "ion channel blocker" or other chemical on the gradient.

Also the way assays are created and work has a lot to do with the believed model of the cell. This is really somewhere where you have no idea what you're talking about, there's really no polite way to say it. Have you ever used a molecular biology assay, read the instructions, how the assay works, how the computer crunches the numbers? It's full of unexamined premises throughout.

 

[Kyle M]

I never said that individual values of products are static but that doesn't mean that they cant be quantified. For the most part they don't change that much, all things being equal, and someones valuation today will be very similar to their valuation tomorrow. Also since the demand curve is the combination of many individual demand curves, the relevance of individual fickleness is greatly reduced when you are looking at the market as a whole. Demand curves are calculated and quantified all the time.

I think we are getting further and further afield from the original discussion. My original point was that economics is a quantifiable science and economic models are useful in contrast to what the Austrian School would have you believe. Economic models are used all the time in the real world to make billion dollar business decisions not because they are fashionable but because they are useful and have predictive powers.

Kind of like Long Term Capital Management, the central banks, etc.? Really useful modeling right?

There's another reason large companies hire economists and do econometrics. They can write it off. Government hires economists for another reason as well, they specifically hire Keysnians because that school of thought says that government intervention is helpful. If you were a corrupt government that wanted to give their friends stuff, and economist A says "the best thing is for you to take a hands off approach" and economist B says "the best thing is for you to exert regulatory control and monetary control over the economy" which school of thought would you hire economists from?

If they were really so concerned with accurate modeling, wouldn't every FED chairman who said "no recession on the horizon" DURING a recession immediately resign and fire everyone that created that conclusion with their modeling? What's a better hypothesis, those people maintain their positions because the central bank wants to get the best models, or because they have no concern for that and they are just there to propagandize the public about the economy? Which one of those explanations better explains why no one is ever fired or forced from their jobs when their models predict a situation in diametric opposition to the situation that happens IRL?

 

[Queequeg]

This is incorrect. I have had conversations with people where they take their electrophysiology data and just apply a calculated number to it to account for the pump. There is no more testing to figure out whether the pump is there or not, everyone just normalizes their data with it when they are testing the effect of an "ion channel blocker" or other chemical on the gradient.

Also the way assays are created and work has a lot to do with the believed model of the cell. This is really somewhere where you have no idea what you're talking about, there's really no polite way to say it. Have you ever used a molecular biology assay, read the instructions, how the assay works, how the computer crunches the numbers? It's full of unexamined premises throughout.

Here come the insults again. What a surprise. However there is nothing incorrect with what I said. What you are describing may or may not be bad science and the incorrect manipulation of raw data. But given your penchant for making obviously incorrect statements about economics, I have no reason to think that your opinions in biochemistry are any more valid.