Jank
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- Re Physics, please correct me as required but in the way I use the phrase “first principles” here, Physics does not have any first principles.
- I know it’s been a while since this comment, but I wanted to comment that sound deduction (ie, logical reasoning) on top of correct premises trumps other forms of evidence, even well-controlled, large-sample experiments. As an analogy, I find fascinating the MWI vs Collapse debate at LW—Eliezer has concluded MWI wins as an outcome of pure reasoning. No empirical evidence required. It will be (is?) wonderful if (when?) we factorize large numbers quickly and that is evidence of MWI, but as above, it would be (is?) superfluous. If the reasoning offered by Eliezer is coherent (I don’t know enough to judge), case closed. Please correct me if I have misunderstood. Thanks Edit: MWI paragraph added.
- I misunderstood the Q. In my opinion, yes. It is, I think, the intuitive way to get a sound (ie, based on sheer deductive coherence) grasp of the subject.
- Thanks, Multiheaded. Wonder what a FAI would know about human motivations, dynamics and joys that we don’t and thus it chooses differently from the scenario above.
- I mean that in a monetary economy, one always buys goods and services with money. One side of the transaction is money, whatever it is. Sophisticated here means an economy that has progressed beyond barter and developed a medium of exchange and a store of value, ie, Money.
- I recently read his Fnargl series of posts and the posts on his political journey from Mises to Carlyle and why he is no longer a Libertarian. I have also read and tried to understand (I probably misunderstand) Eliezer’s posts & debates on FOOM, CEV etc. So, here is a (mostly tongue-in-cheek) scenario combining both Eliezer and Moldbug’s ideas. The FAI (obviously having the powers of the Fnargl-Alien and more) functions as the ideal global Sovereign/Govt—ie, it perfectly enforces all rights of all sentient creatures, functions with an infinite time horizon and protects the planet and all future abodes from other-worldly threats (asteroids and so on). Whether CEV leads the FAI to the same conclusion, I cannot know. But I sure hope so.
- Thanks. I have read that post by Eliezer before. The issue with monetary economics is the number of variables. Money is one half of every single transaction, in a sophisticated economy. Re definitions, the meaning of rational there is that the person acts based on his internal map of the world (this is how Mises used the word way back when and it is part of parlance in Misesian economics). It does not mean what LW thinks it means. Re unknowable desires, it is a way of saying that economically relevant desires are revealed by economic actions. Demand means being willing and able to pay. Semantic issue in both cases :)
- Re the Q about rent-paying: Yes. You should rightly be skeptical now, but please read the Economics sub-section at Moldbuggery with an open mind. Or if you prefer, start with Rothbard’s ‘Man Economy and State’. Economics—of all subjects—pays rent.
- Please see my reply above to pragmatist. To add a bit, the rigor in monetary economics today is so far behind physics, it is not fair to compare the two subjects.
- Inferring causality from a time-series of various economic variables is incoherent. There first needs to be a deductive understanding of what the causal relationships are between economic variables. That is what is meant by “first principles” here—perhaps the disagreement is semantic. Data about effects of economic policy tells us nothing if one has not already pre-supposed causal relationships between certain variables (ie, which variable is affecting which). If one had not done so, how does one know which variables to link with which other one? The causality which is being claimed to be derived is actually assumed or it is a result of the data-mining effect. Thus, the first principles analysis: What is an economy?
- My response, based on my current understanding, such as it is. Note the qualifier “marketplace clears”. In the process of clearing, a market undergoes price-discovery and any arbitrage opportunities are taken and thus removed. Fiat money is a good, in economic terms. It exchanges for other goods.
- What the first part of the quoted line means—I think—is that economies today (ie, “real economies”) are monetarily mismanaged.
- You are right—the Fed’s choice does not matter if one treats economics as a subject to be understood.
- When it comes to monetary theory, there are no controlled experiments possible. So, one has to deduce from first principles.
- Lurker here. The economics sub-section at http://moldbuggery.blogspot.sg/2009/03/collected-writings-of-mencius-moldbug.html?m=1 is interesting. Hello from Singapore.