Yes it is isn’t it. It is also widely criticized. What Nash explains is that Keynesianism is simply an advance opaque form of bolshevik communism. It’s an excuse to sell the public bad money under the label “good” money”. Nash explains that we can view it as it has a missing axiom:
I think there is a good analogy to mathematical theories like, for example, “class field theory”. In mathematics a set of axioms can be taken as a foundation and then an area for theoretical study is brought into being. For example, if one set of axioms is specified and accepted we have the theory of rings while if another set of axioms is the foundation we have the theory of Moufang loops.
So, from a critical point of view, the theory of macro-economics of the Keynesians is like the theory of plane geometry without the axiom of Euclid that was classically called the “parallel postulate”. (It is an interesting fact in the history of science that there was a time, before the nineteenth century, when mathematicians were speculating that this axiom or postulate was not necessary, that it should be derivable from the others.
So I feel that the macroeconomics of the Keynesians is comparable to a scientific study of a mathematical area which is carried out with an insufficient set of axioms. And the result is analogous to the situation in plane geometry, the plane does not need to be really flat and the area within a circle can expand hyperbolically as a function of the radius rather than merely with the square of the radius. (This picture suggests the pattern of inflation that can result in a country, over extended time periods, when there is continually a certain amount of gradual inflation.)
The axiom is effectively that our currency system should be arranged for a different result:
The missing axiom is simply an accepted axiom that the money being put into circulation by the central authorities should be so handled as to maintain, over long terms of time, a stable value.
People (these days) are trying to postulate and theorize about how we can idealize our money, or in other words, how can we design the perfect money. Nash (and Hayek) points out that perfect money is FREE from such design, and so its actually an logical absurd pursuit.
This is what Keynesians are doing with the argument “There is no better way but clear and admitted sanity”.
Nash proposes a money: ” …intrinsically free of “inflationary decadence”..a true “gold standard”, but the proposed basis for that was not the proposal of a linkage to gold”
But it is not by design per se.
He says everyone is Keynesians even post-Keynesians, can we understand that?
Also James Miller. I got in trouble from the community for saying that its silly that a game theory professor could never have heard of 20 years of Nash’s works, especially his lifes passion, that is wholly and perfectly related to game theory. Do you think thats wrong of me to suggest?
I was unfamiliar with Nash’s theory of ideal money until I looked it up on Wikipedia in response to your comments on LW. It’s possible I heard about it before but forgot it since I don’t study macroeconomics or monetary policy. Based on this reading, I don’t understand why ideal money is important to the art of rationality.
Maybe I’ve missed something, but why should we all agree that stability of value is a the most important feature of money? I could imagine a number of different views (for example, deflationary money is useful if you want to incentivize savings, and inflationary money is useful to incentivize spending).
Yes, this is the standard economic approach..
Yes it is isn’t it. It is also widely criticized. What Nash explains is that Keynesianism is simply an advance opaque form of bolshevik communism. It’s an excuse to sell the public bad money under the label “good” money”. Nash explains that we can view it as it has a missing axiom:
The axiom is effectively that our currency system should be arranged for a different result:
People (these days) are trying to postulate and theorize about how we can idealize our money, or in other words, how can we design the perfect money. Nash (and Hayek) points out that perfect money is FREE from such design, and so its actually an logical absurd pursuit.
This is what Keynesians are doing with the argument “There is no better way but clear and admitted sanity”.
Nash proposes a money: ” …intrinsically free of “inflationary decadence”..a true “gold standard”, but the proposed basis for that was not the proposal of a linkage to gold”
But it is not by design per se.
He says everyone is Keynesians even post-Keynesians, can we understand that?
Also James Miller. I got in trouble from the community for saying that its silly that a game theory professor could never have heard of 20 years of Nash’s works, especially his lifes passion, that is wholly and perfectly related to game theory. Do you think thats wrong of me to suggest?
I was unfamiliar with Nash’s theory of ideal money until I looked it up on Wikipedia in response to your comments on LW. It’s possible I heard about it before but forgot it since I don’t study macroeconomics or monetary policy. Based on this reading, I don’t understand why ideal money is important to the art of rationality.
Maybe I’ve missed something, but why should we all agree that stability of value is a the most important feature of money? I could imagine a number of different views (for example, deflationary money is useful if you want to incentivize savings, and inflationary money is useful to incentivize spending).