Stacks and styles, poles and piles.
Continuing yesterday's discussion
of potential differences in electronics and economics. Thinking again of these alternate ways to describe a system.
You can start from two TYPES of force or source, two separate poles or centerpoints.... or you can treat local pieces of the system locally, dealing only with the observed gradients. Neither style is universally better. Yesterday I maintained that the internal-difference style works best for practical electronics. Now I'm thinking that the two-poles style works best for economics.
Techy types often say that the door to modern life was opened by the switch from Roman to Arabic numbers, and by later inventions like negative numbers and complex numbers. I'll go along with part of the argument: Roman numeration was horribly complex and inflexible. Place-notation, whether Chinese or Arabic, is tremendously better. No contest there.
But place-notation didn't bring negative numbers with it. Those were a recent invention, and commercial arithmetic got along without negative numbers until digital computers took over from mechanical adding machines.
When I was a bookkeeper in the '70s, none of my ledgers or adding machines used negative numbers. The columnar approach kept income and expenses as separate positive totals until it was time to reconcile. At reconciliation (whether daily, weekly or monthly) the total of income was compared with the total of expenses. If the difference favored income, you had a black-ink profit. If the difference favored expenses, you had a red-ink loss. Those numbers remained distinct in position and color, which gave
them a distinct 'personality' or 'feel'.
I wouldn't suggest eliminating negatives; they're extremely handy in algebra. But I do wonder if we've become too comfortable
with the idea of sliding back and forth on an endless linear axis.
= = = = =
Economics has to start with a clear understanding of human perception. Our perception has three salient qualities:
(1) Nearly all measurements are logarithmic, based on percentages. With the possible exception of touch and pressure, we don't do linear. In vision, both intensity and color are log. In hearing, both intensity and frequency are log.
Our sense of number, though not well understood, also seems to be log. When we feel an increment of income or price, we feel it in percentage terms, not linearly. "Rich enough" is my current income TIMES 2, not my current income PLUS $13000.
(2) Static states are nearly irrelevant to perception at all levels. We quickly adapt to current conditions of light, sound, heat, and wealth. We notice a change in any of these, and then we re-adapt to the new condition. In some cases (eg pitch of sound) we even adapt to the current rate of change. When decrease starts to happen faster, we notice it. When increase flattens, we notice it.
(3) We don't have a smoothly sliding axis from positive through zero to negative. In every type of sensation we have distinct words and feelings for positive and negative DELTAS from the current adapted condition. Cold and hot, light and dark, noisy and quiet, rich and poor. We think of these poles as perfectly distinct entities, even though a strict numerical measurement doesn't agree. When we're adapted to a temperature of 70 degrees, 60 is Cold and 90 is Hot. When we're adapted to 50 degrees, 40 is Cold and 70 is Hot. Describing this situation with algebra leaves out the static/delta, leaves out the logness, and leaves out the poles with personalities. It's just (0 + x), (-10 + x) and (+20 + x).
= = = = =
The algebraic method makes it WAY too easy to treat borrowing as just another part of the line. Krugman/MMT
starts from this inappropriate comfort, then revises history and nature to make borrowing the default condition. Purely wrong. Suicidally wrong. STORING AND SAVING
are the default condition of every living thing, whether storing food internally as fat or storing aphids or nuts or grain or beer or dollars against future deficiencies. When you keep two piles in mind, you can't make the Krugmanite error. Saving is MY pile. Borrowing is GOLDMAN's pile. Every time I save, I'm increasing my own future safety and nutrition, or the safety of my descendants. Every time I borrow, I'm increasing Goldman's abundance, which is already a trillion times larger than mine.
Labels: Experiential education, Grand Blueprint, the broken circle