Future of economics

My Opinion of Noahpinion: A Response to Noah Smith’s Critique About the Future of Economics
Debating the future of economics

Having read both this, and Noah’s work and Noah’s response, I can see aspects of real concern in both, and neither seems to me to go deep enough.

If one looks at the evolution of understanding, there has been something of a duality present, with an evolving relationship between the notion of truth, and some sort of practical acceptance of the many aspects of reality that seem to be fundamentally unpredictable in various ways, leading to many different traditions.

If one looks from a systems perspective, one can interpret such an evolutionary sequence as an exploration of sets of possibility spaces starting from the simplest binary distinction sets (like true/false, right/wrong, hot/cold, light/dark, etc) and moving out to what appear to be useful approximations to infinite sets of often Bayesian distributions. A journey from simple Truth to profoundly complex uncertainty that also retains some aspects that display very high probabilities within certain domains, that allow us to make things like computers, atomic clocks, jet engines etc.

The journey from the notion of eternal Truth, to the acceptance of notions like Wolfram’s maximal computational complexity, chaos theory, complexity theory, general computational theory, and quantum uncertainty has been in parallel with the development of an understanding of evolution.

When one come to grips with the depths of the halting problem, then one can start to appreciate the way in which evolution has incorporated heuristics that have worked in practice into every different level of the systems that make us what we are (which included all of our culture and science).

And when one looks at those systems of complexity, and the recursive nature of the expansion into new levels of complexity that new levels of cooperation have made possible over the last 4 billion years of life on this planet, and one looks at the exponential nature of such systems, the view is something very different from anything in traditional economics, though it does show the usefulness of such approximations within certain constraints – just as Euclidian geometry can be seen as one case of the more general space of all possible geometries, and Newtonian mechanics is a special case of general relativity, and Boolean logic is a special case of probability theory, all of those special cases can be useful to certain levels of accuracy in certain classes of situations.

Once individuals accept that their personal self interest can extend out thousands of years.
Once individuals accept that exponential technologies can deliver exponentially expanding benefits in the future that swamp any discount rate one cares to apply to future benefits.
Once individuals see the power of cooperation, provided that effective classes of tools are present to give a reasonable probability of detecting cheating strategies, and provided also that the sanction sets applied to cheats are such that it is always in the interests of the cheats to rejoin the cooperative (thank you Elinor Ostrom for providing a dataset that proves that particular point), then there is an entirely new level of organisation possible, beyond anything in classical economics.

An understanding of the evolution of understanding is essential.
An understanding of the nature of complexity space and computational/algorithm space is essential.
And understanding of the profound influence of, and the necessity of, and the dangers of, the many levels of heuristic hacks that evolution has encoded within us is essential (and Eleizer Yudkowski’s Rationality A-Z is a reasonable catalogue of many of those hacks).

Automation of computation, leading to fully automated systems, really does change everything.
It really does change the fundamental nature of the incentive sets that made money and markets such a useful set of tools.

Having near instantaneous, reliable information shared across real-time networks, with effective modern tools for making reliable assessments of the probabilities involved, and sharing updated priors within trust networks, really does offer a profoundly different approach to human relationship that offers benefits far beyond anything any scarcity based values system (money and markets) can deliver.

About Ted Howard NZ

Seems like I might be a cancer survivor. Thinking about the systemic incentives within the world we find ourselves in, and how we might adjust them to provide an environment that supports everyone (no exceptions) - see www.tedhowardnz.com/money
This entry was posted in economics and tagged , , , . Bookmark the permalink.

Comment and critique welcome

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s