Evonomics – Economists Should Stop Defending Milton Friedman’s Pseudo-science

Economists Should Stop Defending Milton Friedman’s Pseudo-science

On the pseudo-scientific nature of Friedman’s “as if” methodology

Agree with Ohminus – and it is also a bit deeper.

Milton was a very smart guy.
It took him all of about 30 seconds to get that fully automated production of goods and services completely changes the game – his response to a question I posed him was “that would be Nirvana wouldn’t it” – that was on 15th March 2003 – unfortunately he died 3 years later.

Yes there were paradigm changes from Aristotle to Galileo to Newton to Einstein and since.

Quantum Mechanics gave us the notion that the idea of causality might be just a useful approximation to something.
Wolfram’s investigations support that notion from a different paradigm again.

It is now clear, in both logic and experimental data, that this universe we find ourselves in is fundamentally unknowable and unpredictable in some very profound ways, and at the same time it is sufficiently close to causal at the scale of normal human perceptions that the difference is usually within the measurement error limits of our tools (and therefore itself uncertain).

It is now also clear that all human perception is of a subconsciously created, and slightly predictive, model of reality, created by the subconscious processes of our brains. The inputs from our senses usually keep this model entrained to reality quite closely, and the nature of the model is strongly influenced by our cultural and paradigmatic background. A lot of philosophers have a lot of work to do, both in epistemology and ontology, reworking their understandings to match this reality.

In the sense of managing our household, the household of humanity, and all the other life forms we share this third rock from the sun with, then yes, economics has a future, and it must be a future where markets and any value measure derived from them are bit players in a much broader set of values – prime amongst them individual life and individual freedom (in a responsible social and ecological context).

The age of money must end.

It was a valuable tool in our past, and the context has changed fundamentally, and the utility of money is now overshadowed by its dangers.

Money is a scarcity based measure of value.

Money cannot give a positive value to any universal abundance – no matter how important it is. Like the air we breath, arguably the most important thing to any human being, yet of zero market value wherever it is abundant.

Automation has the potential to deliver any definable good or service (or something sufficiently similar that no unaided human senses could distinguish the difference) in universal abundance.

Climate change, ecological destruction, poverty, etc are all true enough, real enough, in a very real sense, and at the same time each are trivial problems to solve with fully automated systems.

We are not short of energy, or matter, or ways of organising either.

What is currently limiting humanity is the ways of thinking about things and valuing things and interpreting things, that biology and culture have handed to us through their respective evolutionary processes.

We have some very complex social systems that are optimised for scarcity, and cannot deal usefully with universal abundance.

We can go beyond such things, into an age of security and abundance for all, and only if it empowers all and accepts the diversity that must result.

If we hold onto the idea of markets, then there will be poverty for the masses.

Poverty for the masses means injustice for the masses.

It is not safe being the target of someone with justice on their side.

The only stable way out of that, is to deliver justice to all.
That is incompatible with any market based system.

Markets always give a greater value to things that are scarce over things that are abundant (all other things being equal).
Markets (and exchange based thinking more generally) will always tend to destroy any universal abundance.

If we really value life and liberty, then the only stable option is universal cooperation (in a context of valuing individual life and individual liberty for all sapient entities, human and non human, biological and non-biological).
And we all know that raw cooperation is unstable, so we require sets of stabilising strategies (recurs to infinity). Hence the ancient maxim – the price of liberty is eternal vigilance.

In times of real abundance, cooperation always out performs competition, in all meaningful metrics.

We can deliver abundance to all.
We have the technology.

We just need to escape the dogma of our culture, and our blind reliance on the past as a guide to the future. In times of exponential change, such a strategy is far from optimal.

 
[followed by]

 

Hi Sally,

Depends a lot on how one defines such terms.

I say we do, right now, have the technology to fully automate the production and delivery of a large, and exponentially growing class of goods and services.

I have owned and operated a software company for 30 years.
16 years ago I was leading a largish team of developers on a largish project, when it became clear that there were constraints in the project that were not spoken of directly by any of the upper management parties. I was offered an ongoing job at $1600 / day plus expenses (working for a much larger company). It was very clear that I could make this money by putting about 100 people per year out of work.

Like many others I know, I chose a much lower income rather than pursue that path.
I devoted my systems skills to other levels of possibility space.

The technology has existed for many years.

The technology is not the issue. (And we can always develop better technology.) Sure, we don’t yet have Drexler’s atomic level precision ready for mass production, and we don’t need it, and it will be great when it gets here.

The issues are complex, and mostly have to do with the ways in which we think about things, the ways we value things.

All people use heuristic “hacks” when making value judgments.
Some people use money.
Some use “triple bottom line”.
Both have deep issues.
There are an infinite class of possibilities available.

For me, my choice is first and foremost the life of sapient individuals (all of them), and their liberty (in both social and ecological contexts). All other values being subservient to these.
And the journey of exploration of the space of the possible is an infinite one.
It seems likely that it will always be true that there are more efficient ways of doing things in the spaces yet to be explored.

And it is now true that we could fully automate production of key goods and services with existing technology.

Sure, it is a significant engineering challenge to assemble and debug the systems – that is definitely true. In this engineering sense, the technology doesn’t yet exist, and there is work to be done. And there isn’t anything fundamental that needs to be discovered to make it possible. And there are an infinite class of things that are yet to be discovered that could make it smaller and more efficient – that seems likely to always be true.

Lots of intersecting curves in lots of different dimensions – and many of them are exponential – heading for or having just crossed axes of interest.

Change, really fundamental change, even for the most conservative in society, is now unavoidable. The probabilities are now moving very much into a realm where we either all win, or we all lose. I don’t see many high probability areas in between.

Universal cooperation is definitely the low risk high reward option – for everyone.
We now have a very large set of classes of well documented stabilising strategies available to ensure the cooperative is not invaded by cheating strategies.

In times of exponential change, the past is not a good predictor of the future. That can be very difficult to come to terms with.

The most powerful long term outcomes are (beyond any shadow of reasonable doubt) in the “all win” class of possibilities.
And nothing is certain.

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Evonomics – Why Behavioral Economics Is Really Marketing Science

Why Behavioral Economics Is Really Marketing Science

Ironically, the discipline of marketing was started by economists!

Again, all this is true enough in a sense, and it misses completely something much deeper, much more important, and something fundamental to evolution.

Evolution doesn’t care how. All that matters is survival.
Any “hack”, that works in practice, survives (with some significant probability).

Games theory gives us a theoretical framework for interpreting why it works in practice, but doesn’t necessarily drive anything (reality only needs to be a sufficiently close approximation).

One fundamental thing to get about evolution, is that it operates on all aspects simultaneously.

If evolution stumbles upon a “hack” (a heuristic, some simple algorithm, or reaction, or molecule, or idea, etc) that works in practice to deliver an outcome that is near enough to some ideal, and uses a lot less energy than calculating, then it will be selected for.

Every aspect of our biology and our culture is like that.

Applying games theory is great, and necessary, if we are to go beyond our evolutionary past (genetic and cultural and experiential), and in order to put games theory into context, one has to get a real handle on the complexity that is present in biology, and the degrees of pure randomness that can at times and places completely overwhelm any sort of order.

To the degree that we can identify these “hacks” both in our biology and our culture, then to that degree we can develop higher order systems to mitigate any risks we identify from such hacks in our exponentially changing present and future.

In this sense, and this requires at least three levels of abstraction, our current conceptual systems of economics and marketing are becoming the single greatest threat to our survival, as they are tuned to contexts that are becoming exponentially less relevant.

How many people worry about the cost of air?

We are very close to delivering technologies that allow us to produce any defined good or service in similar abundance to air.

What use economics in such a context?

What point markets?

What strength is the sense of injustice against those who consciously work to prevent such a context from emerging?

If we don’t start thinking about and planning for existence beyond scarcity, then the scarcity based hacks of our neural and cultural systems will overwhelm any technical abundance that does exist and lead us into destruction on a scale that delivers significant risk to everyone, even those in the deepest of nuclear powered underground bunkers.

We have the ability to deliver security and freedom to every person on the planet.

We need to action a plan to deliver that outcome, and soon, or the hacks in our brains that make us fight against injustice will take someone, somewhere, in a position to do something real about it, over the edge of a precipice (in some dimension of strategy space) from which there is no return.

Even a very small probability in respect of any individual, in a large enough population, over a long enough period, delivers an outcome probability that approaches unity.

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Curiosity

August 24-26,’16 ~QofDay~ Curiosity

Where would/does your curiosity bring you?

My curiosity keeps dragging me out of my comfort zone, out of the realm of the known, and into the realms of the unknown and unknowable.

My curiosity has taken me through and beyond many different sets of cultures and paradigms.

My curiosity has led me to solutions to many of humanity’s oldest problems, and exposed whole new sets of problems, and the likelihood of an infinite set of problems into the future.

My curiosity has led me to the conclusion that there are many aspects to reality that are of sets of complexity that are not even theoretically predictable, which leads further to the conclusion that there will always be “magic” – things we didn’t and couldn’t know were possible, that happen.

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Dreams

August 17-19,’16 ~QofDay~ Dreams

Dream until your dreams come true.
Voice your Dream(s)…

My dream is one of removing age related loss of function, of indefinite life extension, of every person having all the resources they need to do whatever they responsibly choose.

This possibility became real to me in 1974.

It is not yet a reality, and I am still committed to making it a reality.

Some things take a while.

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Post to a private Act Party Network

Post to a private Act Party Network

It’s hard for me.
I remain committed to the classical liberal ideas that bought me to Act and had me stand as a candidate in 3 elections – the idea that individual lives and individual freedom matter, and that any attempt to force those to be subjugated to any form of central control is to be avoided.

However, where I seem to have parted from the majority is how I view markets in that deeper context.

Certainly over most of the last few hundred years markets have been strongly associated with freedom, and the current trends of exponential expansion of computation and automation are breaking that association (I have run a software company for 30 years – so have some practical experience in these matters – not all theory).

We now have the practical ability to fully automate the production and distribution of a large and exponentially expanding set of goods and services.
If we were really committed to a universal respect for life and liberty, that would be great news, yet our existing systemic response has been to shore up and expand a set of Intellectual Property laws that are there purely to prevent the sort of universal abundance that is possible, and to maintain a system of profitable, marketable scarcity.

So in this age of exponential growth of computation (doubling in under a year now), I now see markets and the default value sets and incentive structures that evolve from them, as the single greatest existential risk to us all.

So I am all in favour of minimal government, and I am also in favour of universal cooperation (empowered by distributed networks and distributed automated production systems) and the freedom such cooperation would deliver.

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Cyberblitzkrieg

Clear and present danger to your life as of now from cyberblitzkrieg

All of the risks mentioned here are real.

At a deeper level, the choice of competitive rather than cooperative system contexts brings an exponentially expanding set of risks.

And there are clear lessons in biology.

The incentives within competitive systems towards central control and economic efficiency are at variance with what biology teaches us about risk management, which is massive redundancy at every level.

There is sufficient energy and material resources present to deliver security through radical abundance to everyone, yet the resistance of many old paradigms to even the possibility of such change has been significant.

Yes – all the EMP class of risks are very real, I was thinking about them as I walked the dogs last night, and stared into the clear night sky (one advantage of living in a small country village, a long way from anywhere, we don’t have significant light or atmospheric pollution, and can still see hundreds of thousands of stars).

And we have the tools to mitigate all of those risks, but only if we adopt a universally cooperative strategic set. If anyone is left out, they may just get sufficiently upset by that injustice to crash the entire system. Even small probabilities, in sufficiently large populations, become close approximations to unity over time (which seems to be how a fundamentally chaotic subatomic reality can deliver the near perfect causality of our experience).

The risks are very real.

The deep strategic sets that can actually work in practice to mitigate those risks do not exist in the set of competitive strategies.

Is dogma more important than survival?

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Postcapitalism and a World Without Work

Inventing the Future: Postcapitalism and a World Without Work

David Wood’s Reply to the comment “Is this a proposal of a new word order where a group of people work hard to provide lifelong leisure time for another group of people who will never work?
Is this a plan to create a new type of slavery?”
was
“The positive vision is that (1) no one will need to work, unless they want to, (2) people will find tasks to spend time on, that help them to develop and grow in all kinds of ways, (3) this society will be paid for by the fruits of automation and abundance. So no slavery involved!”

Spot on David.

As someone who has run a software company for 30+ years, I see the potential in the very near future to fully automate all systems required to deliver all the goods and services people need to do whatever they responsibly choose. Technically it is a relatively trivial exercise to deliver those goods and services to every person on the planet.

Breaking through the dogma of unexamined assumptions present in economic thought is a much more difficult exercise.

[followed by
in response to: “The idea of not working is excellent but how does the automation bring abundance and free people from work? Can machines come up with creative solutions to our problems?”]

We don’t need machines to come up with creative solutions, we are not at all short of those. We just need them to implement them. There is a vast difference between coming up with a great idea, and doing the hard yards turning it into reality. Not so many people willing to do the last bit – machines doing that is all we really need.

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