Thursday, October 24, 2013
  Perpetual economics

In econblog circles there's a productive dialog on the basic question: Is economics a science? Krugman has a surprisingly sensible answer. He says econ is a science, but many economists are priests, not scientists.

Mote and beam, of course. Krugman himself is The High Priest of Infinite Stimulus. More more more more more more more more more more spending is The Holy Answer To All Questions. (I suspect he knows this about himself at some level; he has more insight than most Experts.)

I've hit this question many times, with a solidly negative answer. Let's look at it again from the Grand Blueprint perspective, from the distinction between living purpose and non-living predictability.

Economics is an attempt to measure and describe a uniquely live activity: Creating value.

Non-living things move back and forth and exchange places under the influence of wind and gravity. That's not economic activity.

All living things know what value is. Bacteria move toward good 'smells' and away from bad 'smells'. They place high value on edible material and low value on inedible material. I'd call that a prerequisite for economic activity.

Real economic activity begins with bugs and birds selecting pretty or tasty objects as courtship tokens. That's the first instance of exchanging things based on value, with a living purpose or goal in mind.

Humans take this to the next level in trading and barter. A trader selects and presents things to maximize their attractiveness, in order to exchange them for things that he considers superior. In selecting and presenting, he is increasing extrinsic (perceived) value but not intrinsic value.

Real intrinsic value gets created when the farmer applies labor and care to seeds and soil and eggs. Living purpose takes care of the rest, giving us edible fruits and leaves and meat.

Finally, the most advanced form of human purpose starts with raw stuff and carves it or bakes it or melts it or ties it together to make new intrinsic value, objects that didn't exist in Nature and weren't created by natural growth.

Value can be recalibrated via feedback loops, increasing and decreasing with perceived supply and perceived demand; but value can only be created by selection, natural growth, or manufacture.

Up to here we're looking at concrete and observable processes. Living purpose is not part of most scientific discussions because most "scientists" don't know what life is. Still, it's perfectly observable. An economist who stayed within these bounds could be doing something like science. Problem is, modern economists don't stop there.

Modern economists talk about Efficient Markets and recommend things like stimulus and options and derivatives and QE. Those activities do not belong to the realm of concrete and observable processes. They are pure numerical manipulation.

QE doesn't add value through any of those stages of human or animal purpose. It just moves numbers around in order to STOP normal economic activity that would be expressed in varying interest rates. It breaks the loop. It's not only fake, it PREVENTS the creation and exchange of real value.

Quite simply, QE is perpetual motion. Real science showed long ago that perpetual motion is just a waste of time and activity.



Economists can't see this, which means they are quacks.

Labels: , ,

 


<< Home

blogger hit counter
My Photo
Name:
Location: Spokane

Polistra was named after the original townsite of Manhattan (the one in Kansas). When I was growing up in Manhattan, I spent a lot of time exploring by foot, bike, and car. I discovered the ruins of an old mill along Wildcat Creek, and decided (inaccurately) that it was the remains of the original site of Polistra. Accurate or not, I've always liked the name, with its echoes of Poland (an under-appreciated friend of freedom) and stars. ==== The title icon is explained here. ==== Switchover: This 2007 entry marks a sharp change in worldview from neocon to pure populist. ===== The long illustrated story of Polistra's Dream is a time-travel fable, attempting to answer the dangerous revision of New Deal history propagated by Amity Shlaes. The Dream has 8 episodes, linked in a chain from the first. This entry explains the Shlaes connection.

My graphics products:

Free stuff at ShareCG

And some leftovers here.

ARCHIVES
March 2005 / April 2005 / May 2005 / June 2005 / July 2005 / August 2005 / September 2005 / October 2005 / November 2005 / December 2005 / January 2006 / February 2006 / March 2006 / April 2006 / May 2006 / June 2006 / July 2006 / August 2006 / September 2006 / October 2006 / November 2006 / December 2006 / January 2007 / February 2007 / March 2007 / April 2007 / May 2007 / June 2007 / July 2007 / August 2007 / September 2007 / October 2007 / November 2007 / December 2007 / January 2008 / February 2008 / March 2008 / April 2008 / May 2008 / June 2008 / July 2008 / August 2008 / September 2008 / October 2008 / November 2008 / December 2008 / January 2009 / February 2009 / March 2009 / April 2009 / May 2009 / June 2009 / July 2009 / August 2009 / September 2009 / October 2009 / November 2009 / December 2009 / January 2010 / February 2010 / March 2010 / April 2010 / May 2010 / June 2010 / July 2010 / August 2010 / September 2010 / October 2010 / November 2010 / December 2010 / January 2011 / February 2011 / March 2011 / April 2011 / May 2011 / June 2011 / July 2011 / August 2011 / September 2011 / October 2011 / November 2011 / December 2011 / January 2012 / February 2012 / March 2012 / April 2012 / May 2012 / June 2012 / July 2012 / August 2012 / September 2012 / October 2012 / November 2012 / December 2012 / January 2013 / February 2013 / March 2013 / April 2013 / May 2013 / June 2013 / July 2013 / August 2013 / September 2013 / October 2013 / November 2013 / December 2013 / January 2014 / February 2014 / March 2014 / April 2014 / May 2014 / June 2014 / July 2014 / August 2014 / September 2014 / October 2014 / November 2014 / December 2014 / January 2015 / February 2015 / March 2015 / April 2015 / May 2015 / June 2015 / July 2015 / August 2015 / September 2015 / October 2015 / November 2015 / December 2015 / January 2016 / February 2016 / March 2016 / April 2016 / May 2016 / June 2016 / July 2016 / August 2016 / September 2016 / October 2016 / November 2016 / December 2016 / January 2017 / February 2017 / March 2017 / April 2017 / May 2017 / June 2017 / July 2017 / August 2017 / September 2017 /


Major tags or subjects:

Aberree
Carbon Cult
Defensible spaces
Experiential education
Grand Blueprint
Гром победы
Heimatkunde
Language updates
Metrology
Natural law = Sharia law
Patient things
Skill-estate
Switchover

Powered by Blogger