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What Computer Science Can Teach Economics
eldavojohn writes "A new award-winning thesis from an MIT computer science assistant professor showed that the Nash equilibrium of complex games (like the economy or poker) belong to problems with non-deterministic polynomial (NP) complexity (more specifically PPAD complexity, a subset of TFNP problems which is a subset of FNP problems which is a subset of NP problems). More importantly there should be a single solution for one problem that can be adapted to fit all the other problems. Meaning if you can generalize the solution to poker, you have the ability to discover the Nash equilibrium of the economy. Some computer scientists are calling this the biggest development in game theory in a decade."
Biggest development in a decade! We haven't figured out how yet though!
Shocker economics problems are beyond the relatively simple equations that were being used to model entire markets.
NO SHIT
Polynomial time approximate, probabilistic or special case solutions to NP problems are wide spread. The problem is that real human being in economics can not be easily described by an equation - and when they can be, they quickly change their behavior based on that knowledge. What both computer scientists and economists need to learn is stop being geeks addicted to a single theory and start dealing with people.
*fail*
By showing that some common game-theoretical problems are so hard that they'd take the lifetime of the universe to solve, Daskalakis is suggesting that they can't accurately represent what happens in the real world.
Hayek showed that about 50 years ago:
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." (The Fatal Conceit, p. 76)
Unfortunately, there is a lot of designing going on right now.
NP is O( (n^2) * log(n) )
Here's a proof that detecting "toxic assets" is impossible (or at least NP)
Did you mount a military-grade, variable-focus MASER on an unlicensed artificial intelligence?
Meaning if you can generalize the solution to poker, you have the ability to discover the Nash equilibrium of the economy
The general solution to poker is to end the game with everyone elses money to make yourself richer. Some people have already applied this strategy to the economy.
How does the Federal Reserve fit into that equation?
Economics involves people. So...
"To summarize the summary of the summary: people are a problem." - Douglas Adams
is P = NP ?
Yours In Novosibirsk,
Kilgore Trout
Daskalakis, working with Christos Papadimitriou of the University of California, Berkeley, and the University of Liverpool’s Paul Goldberg, has shown that for some games, the Nash equilibrium is so hard to calculate that all the computers in the world couldn’t find it in the lifetime of the universe.
It sounds all Greek to me.
It's NOT me! It's the meds! I'm on 1000mg of Fukitol.
I take it that computer science would be the most common major among those in slashdot? This explains the libertarians commenting on health care reform.
From the article: "By showing that some common game-theoretical problems are so hard that they’d take the lifetime of the universe to solve, Daskalakis is suggesting that they can’t accurately represent what happens in the real world." But he didn't actually show this. He showed (again from TFA): "Daskalakis proved that the Nash equilibrium belongs to a subset of NP consisting of hard problems with the property that a solution to one can be adapted to solve all the others." I.e. computing the Nash equilibrium is NP-complete. These problems have no efficient solution if (and only if) P != NP. That is if there is a polynomial (efficient) solution for any of these, then there is a polynomial time solution for all. We don't know WHETHER THAT'S TRUE. Computer scientists suspect very strongly that there is no polynomial time solution for these problems, but it isn't known for sure.
http://yetanotherpoliticalrant.blogspot.com
"More importantly there should be a single solution for one problem that can be adapted to fit all the other problems."
Not so. There is a reason this class of problems is called "non-deterministic". That is because there is no way to determine, ahead of time, whether a finite solution for this problem exists!
This discovery means that * IF * there is a solution to one problem belonging to the class, then that solution should be applicable to things like the economy or poker. But it does not, in any way, imply that there "should" be, or "is", a solution. That remains to be seen.
No, I'd say that we're dealing here with two facets of the same problem: the unreality of Homo economicus. The classic objection to economic theory is that people don't act "rationally" in the sense that economic theory requires them to do; even when given all the information that should be necessary to make a decision, they often make an "irrational" one. The objection this sort of applied CS research brings to reinforce that is that economics not only assumes perfect rationality, but also, that "perfect information" requires that arbitrarily complex computations be performed in arbitrarily short times. This is because to have "perfect information," you must compute all of the consequences of all of the information you've explicitly seen.
In fact, I'd say that the irrationality and the computational complexity objections overlap. There's bound to be a lot of cases where the "irrational" decisions come from a failure to compute the consequences of the information that's explicitly given. (There are certainly other cases where it's not, like on the experiments where somebody is asked to split $100 between themselves and another participant, on the condition that if the other party doesn't agree with the split, neither one gets anything.)
Are you adequate?
There was a short article in t'Economist recently. The difference is that in poker, there's a finite set of outcomes - you can't have a hand that has both the pi of jodhpurs and the duke of pretzels in it. In economics, unforeseen and even unforeseeable situations can and do occur.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Bloatware = Current Government
Time to re-install windows on a freshly formatted hard drive, ala. Revolution.....
Tsukasa: All I really want, is to be left alone...
Now would be a GREAT time to go alter the wikipedia articles on NP completeness and such, then watch the aftermath on slashdot as the n00bs go do their research and learn what it is for the first time!
Once you factor debt and fractional reserves into the picture, the game changes quite a bit. The current crisis is that the players bet WAY more than they had, and they are all afraid to call, since they secretly know that EVERYBODY is bluffing. So the game (and the stock market) keeps going up as the players trying to outbluff each other with "I'll see your billion and raise you three more". And it will keep going up until somebody has to actually put something of value in the pot.
Right. A true believer must take it on faith.
Are you adequate?
My equation P = NP in Yadda-Yadda-Yadda above.
Yours In Novosibirsk,
K. Trout
You want to learn economics? Figure out how to afford the textbooks and supplementary math software you need to take the course. Done.
It's always easy to learn how to spread out a dollar when you're broke. I can see how the MIT guys might have trouble with it though.
What can CS teach ECON?
How to crash routinely and have people shrug it off as normal.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
Apply to finger and then apply to your butt.
Why? Because all your money disappears like so many hemorrhoids. It gets itchy and needs to be gotten rid of. Spending your money makes the itch go away, just like Prep-H.
Harrison's Postulate - "For every action there is an equal and opposite criticism"
or monkey, whichever.
So, this economist and a computer scientist are sitting at a bar.... and these 5 girls walk in....
The only thing you need to know about game theory is how to cheat and tell credible lies - game over. Where's my stinking award?
Hope is the currency of fools
The problem with economics is the act of constructing a model changes reality. As soon as you take action based on your model, your model (and your actions) now become inputs to the system. You're doomed to forever chase a moving target, the more perfect the model the faster it becomes irrelevant. At best you can take some low hanging fruit with statistics preying on the ignorance of those less sophisticated. Goldman Sachs and the other HFT banks have this approach down to a science with the day trading crowd. GS's models are sufficient to trade in the noise of day traders and take them to the cleaners, that's why there's the saying "the fastest way to make a small fortune day trading is to start with a large forture". Modeling economics on a large scale though is a fool's errand.
I came to the datacenter drunk with a fake ID, don't you want to be just like me?
Poker is a game?
If all this should have a reason, we would be the last to know.
Some computer scientists are calling this the biggest development in game theory in a decade."
Computer scientists and economists? What about the actual mathematicians?
I am with Linus on this one
Linus is right
The man makes sense
He is absolutely correct on this one
What you are really saying is, in other words, is that money can never be really accurate, and it follows that the trend towards globalization and consolidation of currencies is a mistake. This makes some intuitive sense. If Japanese cars are better than American cars, then why do they cost more in America?
This is my sig.
I am pleased to see this result. It agrees with some of my own suspicions. Let me describe a simple three person game (players A, B, and C). Here is the rule for each player when it is their turn.
A player must take $1.00 away from one opponent and give at least half of it to the other opponent. Whatever is not given to the other opponent can be kept by the acting player.
Each player in turn gets to choose which player to steal a $1.00 from and how much of it they will keep (they can keep at most half) and how much to give to the other opponent. Assume you do 50 rounds of this game (each player is visited 50 times).
Here is the problem: construct an optimal strategy for each player.
What makes this problem so difficult is the issue of collusion. If two players decide to gang up on another player, they can both profit at that other player's expense. But if you assume that none of the players have friendships or other factors that might induce collusion, then the only way to get collusion is to offer "bribes". A bribe can be both an offer to not take away a $1.00 and it can be an offer to give more than the standard half of the $1.00 to the other opponent. An optimal strategy is based on deciding who is likely to be giving you better bribes in the future and how do you induce such behavior with your own bribes.
Now, here is the part I consider exciting. The claim is that calculating the Nash Equilibrium is hard (in a computer calculating sense) for three person games, this one being an example. The claim is actually stronger than that. Getting even somewhat close to a Nash Equilibrium is hard (if it were not, then you would evolve slowly towards the Nash equilibrium by slowly refining "good" solutions into "better" ones -- that would be most likely doable in polynomial time). In other words, not only is it hard to calculate the perfect strategy, it is hard to even calculate a good one.
To see why that might be the case, let us assume that the three players have chosen a strategy which causes player A to think "it really does not matter if I choose to steal $1.00 from one opponent or another -- my expected outcome is the same." Then player B could offer just 0.01 more of a bribe to induce player A to favor B over C consistently. In other words, a very small adjustment in strategy by one player can have a huge potential impact on their future expected out come. It is this instability of outcome which is the mark of an NP computational problem. A small wiggle in inputs creates huge "chaotic" changes in outputs.
Side note: This "large change" in outcome based on small change in input is at the heart of what makes factoring large numbers hard. If you multiply two large numbers together, and change just one digit in one number, it will have a large and somewhat unpredictable (until you actually calculate it -- but then that means you are still having to try out all different products to factor a number) outcome.
Is that you can think of a non-deterministic machine as the inverse of a deterministic machine. For my own education into the problem, I wrote a program that simulated an instruction set running backwards, but in the complete set sense.
So, if I put in a program to multiply, I could feed it two inputs A and B and get the multiplied value C. If I supplied C, the machine would be crunched "backwards" to get the various possibilities of A and B. Of course, in order for this to work without an explosion of possibilities, you would need a "magic" engine that knows the exact choice needed to arrive at a correct answer A and B at each step of the machine.
The next plan would have been to see if it were possible, given the bits of the solution set of C, and the engine, and the known symbols, to construct an uber table that can look up each of the steps of the engine... Now, how does one build that magic engine? That was what seemed to me the crux of the whole problem and unfortunately I got frustrated with it and walked away about a year. The whole mess is in source forge...
http://sourceforge.net/projects/bicomp/
I feel a round 2, coming on.
This is my sig.
It was the MIT and Ivy League mathematicians who got the economy into its current troubles. This sounds like nothing more than a new set of 'quants.' But, then again, there will always be the next big thing.
The implications of such a result are overstated:
* It's easy to construct markets in which finding the optimal solution is NP-hard, and many real-world problems are already of that form--for example, any economic decision that involves an NP-hard optimization problem.
* Participants already don't find optimal solutions even given infinite computational resources simply because people lack the necessary information to find optimal solutions to begin with.
* NP-hardness is nearly useless in characterizing the difficulty of real-world problems anyway. Being NP-hard doesn't mean that problems of interest are necessarily hard. And many problems in P don't have practical algorithms for large problem instances.
It's interesting that simple 2 person games can be hard as well, but that doesn't fundamentally change what was already known: markets often don't function optimally because of computational limitations.
I can't remember the name of the author, but inside it's deranged drug-trip of a storyline the author hypothesized basically this exact type of formula, eventually resulting in one of the characters almost getting killed after making a killing on dealer-slanted cardgames based on results of the formula, mentally calculated I believe.
So, does anyone remember the Foundation series? Basicly a all-knowing and wise person comes up with the "key" to prodicting the economic and social progression of society. All is well, until a random factor shows up, and crashes the whole party, and causing the system to collaspe. Do not trust in your math to lead humans...
The biggest problem we face is post-scarcity technologies of abundance wielded by scarcity-obsessed people, because things like biotech, robotech, infotech, nanotech, nucleartech, and so on make terrible, if ironic, weapons. It is ironic to use military robots to fight over economic issues the robots make obsolete. It is ironic to use nuclear missiles built with advanced materials to fight over oil supplies that nuclear power or solar energy make unimportant. It even takes more electricity to produce a gallon of gasoline than an electric car takes to go the same distance, if you really want some deep irony -- we'd use less electricity if we switched to electric cars. So, as an example of post-scarcity thinking, considering that and safety issues, our society would save money and have lower taxes if everyone got a free-to-the user safe luxury electric car.
http://groups.google.com/group/openmanufacturing/msg/09eb7f4c973349f2?hl=en
From Post-scarcity Princeton:
http://www.pdfernhout.net/post-scarcity-princeton.html
"""
* Some comments on the PU Economics department and related research directions from a post-scarcity perspective
The PU economics department, of course, should be abolished as part of this transition. :-)
OK, that will never happen, so it should be at least "strongly admonished" for past misbehavior. :-(
What misbehavior? Essentially, the PU Economics department has taken part in a global effort to build an economic "psychofrakulator". How does a psychofrakulator work? Consider a paraphrase of something Doc Heller says in the movie Mystery Men:
http://www.imdb.com/title/tt0132347/quotes
Dr. Heller: It's a psychofrakulator. They used to say it couldn't be built. The equations were so complex that most of the scientists that worked on it wound up in the insane asylum [in Chicago]. ... It creates a cloud of [dollar denomiated] radically-fluctuating free-deviant chaotrons which penetrate the synaptic relays [via television]. It's concatenated with a synchronous transport switch [of values from long term seven generation life-affirming love of caring to short-term immediate profit and immediate gratification suicidal death-affirming love of money] that creates a virtual tributary [back to large corporations]. It's focused onto a biobolic reflector [of the elite controlled mass media] and what happens is that [economic] hallucinations become reality and the [global] brain [and global ecosystem] is literally fried from within.
Or in other words:
"Screwed: What 30 Years of Conservative Economics Feels Like"
http://granby01033.blogspot.com/2008/04/screwed-what-30-years-of-conservative.html
Or:
http://en.wikipedia.org/wiki/Post-autistic_economics
And:
"Obituary: Conservative Economic Policy"
http://tpmcafe.talkingpointsmemo.com/2007/10/19/obituary_conservative_economic/
Conservative economic policy is dead. It committed suicide. Its allegiance to market solutions, tax cuts and spending cuts, supply-side nonsense, manipulative and corrosive ties to industry and the rich, have left it wholly unable to cope with the challenges we face. Its terribly limited toolbox simply cannot address the economic insecurities and opportunities generated by today's global, interconnected, polluted, insecure, dyna
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
You can't eat what you don't grow. The rest follows.
I want to delete my account but Slashdot doesn't allow it.
This argument echoes the exact same stupidity of the "perpetual growth" nuts that got us into this economic mess in the first place. You believe that infinite trades are possible, and that resource limitations don't apply. But even in your own example, you're talking about trading one limited resource (labor) for another (money). And yes, money is a limited resource - you can print all the money you want, but since doing so doesn't increase the amount of actual value that that money represents, all you're really doing is devaluing the existing money supply in order to redistribute the underlying value (i.e., stealing a little bit of value from everybody who's currently holding any of the existing bills, and giving the loot to someone else - usually a central bank).
Perpetual growth is nothing more than an illusion shared amongst fools. Value doesn't magically spring into existence by the mere act of trading something back and forth. Value can only be created by consuming resources. Whether that resource is energy, or some natural resource such as coal or iron, or human labor, etc, there is only a finite amount of that resource. Furthermore, many of these resource limits are things we are either already bumping into, or things that we will bump into in the foreseeable future, such as in the case of the various natural resources we've come to rely on.
In additional to Daskalakis' thesis that finding the Nash equilibrium for an economic system is a PPAD-complete problem, neoclassical economists have yet to acknowledge the other elephant in the room: the fact that economic systems are chaotic, which makes it impossible to build long-term models that in any way correspond to reality.
In fact, we can trivially prove that economic systems are chaotic, because weather greater affects economic systems (e.g., a drought that affects farmland productivity), and weather systems are famously chaotic.
There is an object lesson here. In 1948, U.S. secretary of state George C. Marshall infamously summarized the attitudes of scientists and other learned men when he asserted:
If there ever was a statement that scientists wished they could take back, it would probably be Marshall's. Because microbes have spent the last 60 years humiliating us for our hubris.
Unfortunately, only the Austrian economists have figured out that this statement is every bit as laughable and contemptible as Marshall's:
Somewhere, Ludwig von Mises is still hoping that the rest of us will get it, too...
Your bank is insolvent.
Taking Money Back
I have graduate degrees in both Computer Science and Economics and this commonality was so obvious to me over a decade ago that it wouldn't have seemed worth writing about. Hell, you even study Von Neumann in both of these fields at the undergraduate level.
Run and catch, run and catch, the lamb is caught in the blackberry patch.
Someone, somewhere, is going to use this to fuck us all in the financial sector. And not in the good way. And by "financial sector" I mean unlubed arsehole with a cactus.
All the complex work that these economists have done seems impressive, yet it will crumble because they built it upon delusion.
We have come to the end game of the infinite growth charade. The simple truth is that calling the valueless valuable does not really make it valuable, and nothing can change that.
Do what thou wilt shall be the whole of the Law
Economists and Complexity Theorists work very closely together nowdays, especially around the area of algorithmic game theory. In fact there have been much more recent results in this area, for example I just read an interesting paper on the price of anarchy in network routing. http://www.eecs.berkeley.edu/~gvaliant/papers/SR_sub2.pdf Many of the most popular complexity theory blogs often urge their readers to visit relevant economist conferences. Personally, I love this area, right at the intersection of algorithms, complexity theory, discrete mathematics, graph theory, operations research, optimization and game theory. Every single one of those fields is awesome by themselves imo, so algorithmic game theory is right up there for me.
I know that stuff is a standard economics axiom, but this is one of the canards that people trot out to defend the unthinking application of free-market policies: that whatever trades "free" people do are necessarily good and beneficial, because otherwise they would not have chosen to make those trades. That, of course, can be stretched to justify any outcome the market produces whatsoever. People drink toxic sludge? Well, we know that they chose it in order to maximize their utility, because, um, everything people choose maximizes their utility, because otherwise they wouldn't choose it.
Not to mention that this sort of thinking dismisses offhand the whole problem of weakness of will. The psychological drug addict who keeps doing drugs despite judging that it's destroying his life clearly is lying to himself about the latter. He is truly better off losing his job because of his crack addiction, because otherwise he wouldn't have chosen to buy crack.
Are you adequate?
Seriously, before they start trying to solve complex games like poker, why don't they focus on something simpler? I've yet to figure out a way to consistently win in scissors, paper, stone...
No. This is really much simpler than you're thinking. "Growth" really just means that people, in the aggregate, obtain more or better real goods and services. Or to put it in crude terms, economic growth = people obtain more and better stuff than they used to be able to.
All the stuff about markets, currencies, banking and investment is just a set of schemes to make it possible for more stuff to be built. For example, using money instead of barter to trade makes it possible to have extremely specialized label. How many CT scans does the radiologist have to trade to the car mechanic to get the latter to fix his transmission?
You're missing the part where A and B work and produce valuable stuff that didn't exist before, get paid for it, use the money to pay the bank for the loan, and the bank's shareholders are now able to buy the stuff that A and B produced. Basically, credit is a mechanism for paying for stuff today with tomorrow's stuff. It does fall apart if there isn't enough stuff tomorrow, true.
Are you adequate?
Don't put into kernel, what can be done in user space.
In Soviet Washington the swamp drains you.
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Economics has nothing to do with math, nothing to do with games, nothing to do with money. Economics is the study of the choices that people make.
Don't piss off The Angry Economist
This is a cool result, but it's not game changing until we gain a little more intuition about the PPAD complexity class.
Sure PPAD is above P and below NP, but by how much? We know that if P=NP it all collapses, and from that we know that PPAD could be only P hard. My hunch is that PPAD is only a little more difficult than P.
Sidenote: what's the article saying that since Nash Equilibria always exist it can't be NP complete? Aren't we guaranteed a solution to non-trivial TSP problems?
here's a fun one i ponder every once in a while:
http://en.wikipedia.org/wiki/Pirate_game
and basically asserts that everyone but the senior officer gets screwed in the end.
the problem that seems missed is the continued motivation of all involved to the status quo; and a great many of them carry swords.
YADA (Yet Another Dumb Analogy): The power of all the computers in the world in the lifetime of the universe would not be able to calculate the outcome of this game.
And wrong. Let's try this out:
1. Enumerate all planets in the visible universe. (maybe 10^23) The entire universe may have 10^43 planets, but a sample space of 10^23 must be more than enough.
2. Each planet is a computer. set up the game on planet 1, and let it play out.
3. repeat for all planets.
This should be very simple as you have a few billion years to set the game up on each planet, and the Stelliferous Era will last for 100 trillion years. If the proton decay theory is correct, you will have to finish your analysis within 10^38 years or so.
That should be easy too, as it should give you time to solve the quantum mechanical equation for the entire planet just by using a 4.77MHz 8086 PC, even if it takes a billion years to make the floppy disks you need to store all the data.
don't cut it off www.mgmbill.org
Economics has nothing to do with math, nothing to do with games, nothing to do with money. Economics is the study of the choices that people make.
Spoken like someone without a degree in economics. Hell, most of my studies involved assumptions of "rational players."
Economics studies allocation of finite resources. That means game theory, a lot of math, and money is one of the resources. The choices people make do factor into it, but there are other fields that concentrate on that far more than economics (for example, sociology).
In economics, the real world is ALWAYS a special case!
The way to describe equilibrium in the macro-economic environment was done just over 100 years with the Pareto principle.
Does it go on forever?
For those that know their Bible, did you happen to read that as NP begat FNP who begat TFNP , and TFNP begat PPAD ...
But economics is not a zero-sum game. I give you $150 and you give me an hour of labor. We've both benefited by the trade.
In all but the world's oldest profession, I'm inclined to disagree.
Here's one:
Person A runs a tavern. Person B (after a few beers) drives his car into that of Person A. Person B pays $150 to Person C to fix the scratches on Person A's car. Person C uses his $150 income at Person A's tavern.
Who profited by the exchange of $150? Are all three people better off?
Here's another: Person B drinks at Person A's bar. Person A runs a farm to grow barley. The farm uses water that slightly increases (~1%) water prices for 100k other persons. Are person A and B both economically better off for their trade? (Yes). Are persons A,B, and the 100k others all better off? (They might or might not all agree, but what if their generation's children do not!). Even more interestingly, the 1% cost will manifest as slight increases in other goods. Eventually someone will be holding the hot potato...
In examples with larger populations, the zero-sum exists but is more blurry. Fundamentally, most economists seem to think that the optimal solution for a 2-person economy is optimal for an n-person economy. Well, logical induction doesn't work way! (The implication from "n" to "n+1" doesn't exist!) It is well known in Mathematics that optimizing a function with multiple variables not the same as finding the set of variables where each individually optimize the function.
I'm not saying that there isn't value to distributing tasks across people that are specialized at them. I just don't buy the argument that economics is never a zero-sum game. I think in all but the most ideal circumstances, it is indeed zero-sum game. Often the case, the true cost is hidden in the form of time. If the costs do not happen at the same time as the benefits, people only see the benefits for a long time and then lament the cost later.
I realize I may sound like the reincarnation of Marx. Well, I don't like Communism either.
Everyone needs to realize that the important point to make is that this is find is based on a non-deterministic principle.
The idea of this simply assumes if a computer can make every possible guess simultaneously until it arrives at an accepted solution.
Proving that this economics theory is related to this idea means that the day we are able to invent a non-deterministic machine(quantum computers) the day this problem will be able to be solved with polynomial time complexity.
The polynomial time complexity generally comes from the verification procedure that is inherent in all non-deterministic algorithms.
So in the grand scheme of things, this is an amazing find for two reasons.
1. It means that when we can make a non-deterministic machine that this problem can be solved efficiently.
2. This is an amazing find because this lies in the domain of economics, the fact that a computer science person was able to relate this problem to an NP problem through transformation is amazing in itself.
I remember a few years back some economists doing a study where they gave one person $10 and they could any amount to another person and if they accepted it they both got to keep the cash.
I seem to recall all the game theorists being shocked that their predicted ideal result(guy 1 gives $1 to guy 2 who accepts the $1 because $1 is better than nothing) didn't happen.
People are not rational, at least not for any value of rational that any economist has ever managed to define.
Well, one thing they could learn from open source is that it can be rewarding to forgo profits altogether. Now that WOULD be a revolution.
Ok so first you fail at reading for comprehension, then you admit you did it on purpose, then you pretend that admitting a failure of reading comprehension is the correct thing to do in this case by flaunting the failure three times.
Then at least four people mod you up!
Don't ever use the word "stupid" again, you have no idea what it means.
Obviously you didn't get very far in your studies of economics. I guess calculus and multivariate linear regression isn't math?
I tried to solve this problem using approximation techniques and found it failed to converge and instead showed chaotic dynamics. Genetic algorithm techniques did converge, but not to a global solution. The paper was published about 15 years ago in a collection of social systems modelling studies.
Nasty problem...
Value can only be created by consuming resources. Whether that resource is energy, or some natural resource such as coal or iron, or human labor, etc, there is only a finite amount of that resource.
Wrong.
Simplified example: Let us assume you require 2 tons of rock to build a home. Then somebody teach you to build a better home from 1 ton of rock.
Now you have 1 spare ton of rock and a better home. Obviously, we have created value.
Economics is not about measuring the total amount of resources on earth. In the end, it is about efficiency, trading work and resources to always make more efficient use of resources.
Improved efficiency = Satisfying needs of more people with the same amount of resources = value.
I lost my sig.
Economists and Mathematicians have always ignored Social Mobility and Unintended Consequences in their theorems.
I'd like to buy homeland for our 10 million people. http://twitter.com/mahadiga
The biggest problem we face is post-scarcity technologies of abundance wielded by scarcity-obsessed people
I disagree. I think a bigger problem are abundance obsessed people who choose to remain ignorant of the obstacles to actually implementing theoretically possible technologies: cost, time, and social/political inertia. Just because we know how to replace unskilled labor with machines and oil with nukes doesn't mean we can retool the infrastructure overnight nor convince investors to fund a rapid cutover.
Even though futurists like you dislike thinking about nitty-gritty details, especially economics and politics, that doesn't change the fact that they are real constraints on the feasibility of your plans, and if you ignore them your plans are just as sure to fail as if you were to ignore friction or entropy.
Don't get me wrong, I'm no luddite. I'm in the same singularity fan club as you are. I'm just frustrated that so many of us waste time on mental masturbation of "what if people were rational and had the same techie goals I do" instead of working on the hard problem of how to insure that our future doesn't get cut short by some stupid mundane problem like petroleum depletion pushing us back into the 1800's.
Hi,
I am a professionnal poker player, and the first thing I learned was you had to adapt to your opponents game.
Most poker situations depend on who is facing you, sometimes raising with 72 or folding Kings is a good idea.
Now there are a lot of technical skills involved in poker, but like in economics, when you find a model that works, it gets obselete pretty fast.
For example if I see my opponent is weak and raise him with 72, I will do this with pretty much any hand. But unless he is a total moron, he will start changing his game and play his hands stronger, and the speed at which he adapats depends on the player he is.
In chess, for example, you can usually evaluate a move in terms of position gain and this move will ALWAYS have the same evaluation regardless of which evaluation you use. In poker or economics, there is no certainty.
I really do not consider this "discovery" to be one.
Computer science often proves what we already know but just haven't proven yet, and it will be centuries before we build a computer better than the human mind.
I would love to see how this might be able to harness me some more gold while farming on WoW!
While I think your post was quite interesting (great references, they were interesting to read), I think you are missing a key concept of economics... All resources are scarce, therefore there is no such thing as "post scarcity." I also think you have missed the point that economics is not as much about predicting a market as it is about predicting human behavior in a market. While people are very unpredicible, often making poor decisions, most economists would blame this on an imbalance of information in the system. I had a very hard time understing how economists believe that people make rational decisions when there is so much evidence to the contrary, but in general they do make the best decisions they can with the information at hand, their individual level of understanding, and their own self interests at heart. Yes, many resources have become cheap and abundant but even the air we rely on to sustain us is scarce. The EPA was formed in part to help protect our air and water resources by adding regulations and creating penalties for non-compliance thus adding a "cost" to the air we breathe. In the digital age we tend to forget that we must give up something in order to take advantage of something else, we must pay to have Internet access (instead of buying a few extra six-packs of beer), we must take our limited time in order to surf the Internet and post on Slashdot. Name a resource and I can demonstrate its scarcity. There will never be such a thing as a "post scarcity" world, even hydrogen is scarce as there is only so much of it in the universe. I would go as far as to believe that as time goes on resources will become even more scarce (in general). Technology allows us to make some resources obsolete but generally puts an emphasis on new resources. I think humans will forever be chasing the ball of unlimited resources. The theory that fusion has the potential to provide free unlimited power is faulty, containing such a powerful source of energy will definately cost more than just the "free" energy of the system, someone will have to monitor the system to ensure it is safe, if that entity monitoring the system is a robot, it will have taken up other resources which could have been used elsewhere. There will be a cost, albeit lower than current costs. I think we would both agree that traditional economic models do not predict human behavior all that well, but they do have some value when applied in context.
There is no doubt some truth to what you say, but why make this personal? Can you talk about ideas without attacking a person and making lots of assumptions about them (which may well be wrong)? We might see a lot more progress if people could talk about ideas more.
Please plot the current exponential growth of renewable energy for wind and solar and you will see that, just following current exponential trends, in twenty to thirty years, almost all our energy will come from renewables like wind and solar. Peak Oil, in that sense, is a non-issue. It may be true we are going through a peak for ground-extracted oil, but we did that for whale-extracted oil, too. The stone age did not end because we ran out of stones, and the oil age will not end because we run out of oil.
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
The long history of failure in econometrics is because it is predicated on a bad axiom that of continuous functions. Human desire and human action vary in all human beings all the time which cannot be quantified. A better approach is to use graph theory, lattice theory, and functional integration to find bounds on inequalitites from which trends can be observed. The future is always opaque! Economics is the 'science' with the worst results, it really should not be called a hard science but a social science. No other discipline fails as often, or has as many bad results as economics/econometrics. This result is from an arrogant post doc who has yet to learn how little he knows. "An educated man knows how little he knows." ~Marquis De Laplace
Oh golly, new math making me a derivatives trading expert!
What could possibly go wrong?
Well, if something does go wrong I'll be too big to fail.
No brain, no pain.
That is what the World of Warcraft should do:
A) Allow players to go into debt
B) Allow players to have credit
C) Create things like derivatives that players can trade around.
Would be interesting to see what happens and how they manage it. They could also try to have one AH across all the servers (likely technically problematic). They all ready have the numbers for a pretty grand experimental in virtual economics, the closer they model reality, the more interesting it would be to see how things react.
Is cross-over between computer science and anything really surprising. Remember that computer science is math, albeit usually with a heavy bent towards practical application. If you study pure theoretical computer science, you are studying pure theoretical mathematics. Is it surprising when physicists use math in a new way? So, why be surprised if computer science is used in a new way?
I'm sure a lot of economists would agree with you. And, like you try to do, one may paint some extreme picture (like running out of hydrogen in the universe). But, compared to that happening to a universe-spanning species in some far distant future, the human race has no real resource limits of any significance. Hovewer, there are many *artificial* scarcities that have been created, from a shortage of doctors (carefully controlled med school cartels), to a shortage of copyrights (law), to a shortage of renewable energy (subsidies to nuclear energy and fossil fuels instead), to a shortage of creative people (compulsory schools dumbing people down, like John Taylor Gatto says).
But healthy human beings have limited demands for things, because the best things in life are free or cheap. If you accept that premise, economics begins to fall apart. What you describe, with humans forever chasing unlimited resources, and essentially willing to sacrifice happiness for unlimited material wants, will someday be seen as mental illness, even if it is celebrated in current US culture as "rationality".
Julian Simon shows how prices go down over time for most things, especially in a well functioning market. Aluminum used to cost more than platinum hundreds of years ago; now we throw it away. If you accept that premise, along with the idea that realistic demand grows more slowly than exponential technological capacity, then economics also begins to fall apart.
The FSF site has writings by Alfie Kohn that "reward is no motivator". Even if you assume a need to ration, the economic idea of linking rationing to individual productivity also falls apart.
This shows a robot with high speed hand-eye coordination. This means most human labor will soon be worth very little:
http://www.hizook.com/blog/2009/08/03/high-speed-robot-hand-demonstrates-dexterity-and-skillful-manipulation
If you accept what that video is telling you, economics begins to fall apart.
On a practical basis, once we have a lot of abundance, the need to ration any of the basics people now argue over (food, shelter, health care, information, energy) on a personal basis goes away. It would be like charging for sunlight on a sunny day. That does happen in a sense in city apartments. But there are other dynamics that affect that as well. Like, if people had a basic income, they could afford to live in the country and have more say over their lives. Or if laws were different about land ownership, cities might be build differently, perhaps more lowrise like Philadelphia and older cities in Europe.
Now, you raise a good point on selling back to people clean air and clean water after others have polluted it. But, that is an issue of managing anti-social behavior IMHO.
Besides, what do we really know about the nature of the universe and what is possible in a million years? What we do know is that we live in a solar system with enough material to make the surface area of millions of Earths. And that is just one solar system of millions in our galaxy.
So, energy is getting less scarce. Go show me how energy is getting scarce, if you want an example to talk about. The Earth receives thousands of times more solar energy that our civilization uses, to begin with. The Sun itself puts out millions of times more than that. Readily available oil may be getting scarce, but, as a consequence, prices rise and people adapt and create new energy sources.
But, that bet has already been done. The economist taking the side you suggest you want to be on lost:
http://en.wikipedia.org/wiki/Simon-Ehrlich_wager
Sure, in theory, in thousands of years, and exponentially expanding civilization might encounter resource limits, but we are nowhere near that. In fact, within all industrialized countries, birthrates of established families are falli
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
You're right, my tone was too strident. Just heard this post-scarcity sillyness too often. I actually agree with you about solar and wind except I insert "I really really hope" before "almost all our energy will come from renewables".
To prove to yourself that technological adaptations don't always come fast enough to bail us out, imagine that for some reason oil jumps to $500/barrel tomorrow (terrorist attacks on refineries, all-out nuclear war in the Middle East, etc). Will there be enough time for everyone to switch over from gasoline fuel and feedstocks? Hell no. There is some irreducible period of time needed to upgrade the electric grid, build wind/solar/nuke installations, and reorganize our entire manufacturing and goods distribution network. During that period we will have riots, blackouts, unemployment, and food shortages. If the crisis lasts long enough, the infrastructure (what's left of it) will eventually be almost entirely independent of oil, partly because we have retooled to renewable energy and partly because we have retooled to the now cheap and abundant human/animal labor, giving up on energy-intensive technologies (automation and mass production in general, including the manufacture of wind turbines and especially solar panels). I don't know how to predict the percentage contribution of these two causes of reduced demand for oil, but I want to know, because that is the difference between a technotopia and a dark age.
Trends are funny things-- they find unexpected ways to develop. Especially if we mechanically follow them without understanding why they appear exponential. If past performance was a guaranteed predictor of future outcomes, nobody would ever lose money on the stock market.
I guess I'm just not content to sit back and let The Market and R&D work their magic. I need to understand what the actual likelihood is that we will win our race against Malthus yet again. Until I do, I must put some of my effort into preparing for and mitigating the effects of the most likely civilizational risks (and thus making a small contribution to that very race).
PS: In the long run, things don't look good for exponential growth of any sort. You might want to read this post by Robin Hanson: http://www.overcomingbias.com/2009/09/limits-to-growth.html. He is the last guy you'd expect to take Malthus seriously, but apparently Robin's intellectual integrity and ability to do the math has dragged him kicking and screaming to this repugnant conclusion. Not that I'm saying technotopia is not a worthy goal-- it's the only worthy goal, but we should go into it with our eyes open to the fact that the odds are stacked against us and we don't necesserily have a lot of time.
In this case, "solve poker --> solve the economy" also implies "solve the economy --> solve poker".
Every time this sort of thing pops up in mathematics, computer science, or economics, people look at it exactly the wrong way.
The situation reminds me of AI and all that work done on chess -- in the end, chess turns out to be much harder than anyone previously thought.
This news isn't telling us that the analyzing the economy is any easier. It is telling us that poker is a heck of a lot tougher to analyze than anyone thought. Well, that is anyone who hasn't had the joy of losing 5 grand in 3 hours to a bunch of cigar smoking, misogynistic neo-neanderthals all because he thought he had an unbeatable system...
I was with you till you started to ramble about the "death of conservative economics". What you fail to realize is that we don't live in a post-scarcity world. We live in a dual economy. We have parts of the economy that are post-scarcity and parts that are very scarce. Energy, technology, bits, are all post-scarcity. Water, food, land, Megan Fox are all scarce resources. The problem is that people are so used to the scarce economy that they don't know how to deal with the new post-scarce resources. They treat the post-scarce resources just like the scarce one and try to limit the distribution of those resources. To say that conservative economics is dead is a gross overstatement.
Sorry, but economists have been using game theory for years and years. Don't try to make it seem like they are ignorant of these techniques or can't understand the ramifications of these discoveries.
Oh, and incidentally, it's the free market economists (except Robin Hanson apparently) that believe infinite growth is sustainable.
There are two underlying principles to economic theory (in their simplest forms): 1) All resources are scarce. 2) People are greedy.
One could argue about the merits of these three underlying principles but I have yet to ever see an example of a human society where these principles break down.
I would agree that with almost any given resource technological advances have led to a decline in real costs for such resources. There are examples to the contrary such as our recent facination with protecting the environment (While not really a tree hugger I am an avid backpacker and fisherman and em enthusiastic about protecting the enviroment). Now the environment costs us much more than it did 100 years ago. Just because the cost goes down, or there is an overabundance does not make a resource free. The perfect example is with energy. The sun does provide Earth with more power than humans really ever anticipate using as we would probably run out of food production capacity before power if we covered the earth with PV cells. With that said there is a cost to harness that energy. If there is a cost the resource is scarce.
Again with the air we breathe there is a cost. Yes, if we didn't tamper with the environment we would have an overabundance of clean air. But not tampering with the enviorment is the cost of clean air. That means giving something up. When economists speak about scarcity it is in this context. One must give something up in order to get something else.
Scaricity in itself doesn't prop up the elite, that is what every human culture has done since the advent of civilization. Look at communist sociecieties, they have an eleite class jsut like a capitalist society.
Services are just as much a resource as a tangible item. People place a value on any given service. Don't most slashdot readers value their internet connection which relies on a vast array of service technicians which produce no tangible product but provide us with something we want?
I have never indicated that I actually agree with how society is organized, but it seems that human nature has set us on this path. It may not be the best theoretical way but economics is not an attempt to recreate society based on rules that defy our nature... Economics is about predict human behavior based on emperical evidence.
You could also say LTCM blew up because some guys from Goldman downloaded their tradebook, called their buddies, and everybody traded against it until the fund imploded. See this book.
Or you could say that by using Black-Scholes on historical data that one is incorporating the possibility of a given position being attacked. You'd be wrong if you did, though, because Black-Scholes assumes a Wiener process, which is in turn based on the normal distribution. This means it ab-initio excludes runaway processes like the market turning on you.
The problem is that most models extrapolate future price as a function of current price and history, when in reality prices are a function of current price and expected future price in the market. Expected future price is difficult for academics to get a handle on, so instead they make models on tractable subjects that have nothing to do with reality... then everybody acts surprised when reality doesn't behave according to the model.
When you take economics classes, you hear that if you behave well, in the next life you'll become a physicist, but if you behave badly, you'll be reborn a sociologist. Problem is, markets _are_ a sociological construct. But I guess I should be a little more to the point: All of this game theory crap, along with CAPM, APT, GARCH, DDM, etc is just a bunch of ivory tower bullshit.
The USA has centuries worth of coal. Nazi Germany almost took over the world using coal to make liquid synthetic fuels using 1940s technology. The US population is 300 million about. There are tens of millions of people unemployed and underemployed. We could switch entirely to coal in a year or two if we really wanted too. That would be terrible for the environment, and public health (mercury pollution etc.) but we surely could do this.
As for the long term, we could probably even evacuate the entire planet in a couple decades or so if as as species we were willing to accept about 10% of the population dying from rocket explosions and stuff. Some rough ideas on how to do that, basically by launching seeds for self-replicating habitats and then using rocket with fuel produced by coal: ... :-) So, a total evacuation of the Earth for space could be plausibly done within the lifetime of probably anybody on this list (even though you might have to go on a starvation diet for many months, and you'd need to leave everything behind except your underwear to cut launch costs. :-)
http://listcultures.org/pipermail/p2presearch_listcultures.org/2009-August/004029.html
http://listcultures.org/pipermail/p2presearch_listcultures.org/2009-August/004037.html
"""
So, seven billion people soon, minus a few doomsters, times US$100K per person, is US$700 trillion. The world GDP is about US$60 trillion, so, in round numbers, this is about ten years of world economic output to put everyone into space.
Now, would I suggest we do this? No. Would there be obstacles and so on? Yes. Would most of humanity go along with this? Probably not, as many people have an attachment to the land of their birth. Would lots of people die of heart attacks on the way up? Probably. Would plenty of stuff go wrong and hundreds of millions of people die (10%? 20%? 90%? 99%?) if this sort of thing got rushed, like entire habitats and space ships blowing up for stupid reasons, or there being unforeseen cancer hazards, or there being malicious computer viruses destroying life support systems, and so on? Almost certainly.
Would the money be better spent fixing up the Earth first, just from an ethical perspective? Surely -- maybe the last thing we want is a solar system filled up with the same kind of people who could not make a good thing work out on Earth when they had it easily within their technical grasp. As I say, the best reason to go into space is because we are happy down on Earth and think it might be fun to have cities in space too. And as above, I am guessing we could support more than ten times our current population in urbanized seasteads.
My point is not that we *should* do any of this evacuation into space, but that we *could*. It is to suggest that, with a little imagination based on existing research studies done by NASA (and then buried), the numbers
actually work out (with some handwaving.
So, the implication, if such a thing is within our plausible grasp, is that there is cause for hope. It is to suggest that everything people are going on about in current politics, how we need to spend all that money for our "protection", or how we are running out of oil or iron or whatever (anything except helium that nobody talks about), it's all just all scaremongering from a technical perspective (even if the social issues of inequity or change are real, and I'm all for addressing them).
So, with that as a background possibility, that within thirty years almost every middle-aged or younger human being alive today could be living in space in relative luxury, I just don't see the point for the gloom and doom about running out of oil, global climate change, etc..
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
You're right, it is a good idea to separate those things, digital from physical right now.
I'd go a step further and suggest a big problem these days is that people lump under "capital" both imaginary fiat dollars (ration units) and physical things like cement plants. As suggested by another poster, if we want a new cement plant, it takes time to build one. But an endless supply of fiat dollars can be created by the stroke of a pen in Congress. Digitally, there is so much capacity now relative to basic needs like surfing the web that, compared to when one hand to spend a lot of money to buy a few IBM mainframe computing cycles, most computer and network access costs now are too cheap to matter much.
But, still, for a post-scarcity future, consider the resources you mentioned.
* Water. We have oceans full of it. With enough energy (like from wind and solar), it is easy to desalinate it. There are desalinization breakthroughs mentioned on slashdot quite frequently.
* Food. The USA alone can produce enough food to feed something like three billion people. Unfortunately, much of it goes to animal feed:
"The Truth About Land Use in the United States"
http://www.westernwatersheds.org/watmess/watmess_2002/2002html_summer/article6.htm
We've plenty of food for a mostly vegetarian diet for a much bigger population than we have now. And that's even without effectively farming the oceans or people moving off-planet to space habitats.
* Land. See the above link on how much land there is in the USA. We can also build seasteads. And eventually we'll be building space habitats. We can build thousands, even millions, of Earths worth of surface area for materials in the solar system, like Princeton Physicist Gerard K. O'Neill showed how to do.
* Megan Fox. Sure, human relationships will always have a scarcity aspect. Still, digitally there is a vast quantity of Megan Fox around:
http://images.google.com/images?hl=en&q=Megan+Fox&btnG=Search+images
We'll no doubt see virtual actors soon -- there are already all sorts of interactive games with virtual people. And look where this sort of robotic technology is going:
http://www.technovelgy.com/ct/Science-Fiction-News.asp?NewsNum=2188
http://www.guardian.co.uk/technology/blog/2008/dec/14/aiko-fembot-robot
Also, no doubt there are millions of women who look a lot like Megan Fox, or act like her. So, I question just how scarce Megan Fox as a concept is. But yes, sure, if you want to point to specific people or rocks in the world, yes, there is a scarcity there of that one person or thing. But, then think how scarce and precious everyone on the planet is. Maybe they all deserve a basic income as a human right, to have some claim on the fruits of an abundant industrial commons? Even Megan Fox? Maybe if she had had a guaranteed basic income every year to meet her living expenses for life, she might have had a happier life? And maybe all the people around her would not have been so eager to exploit her, and she could have had a more authentic life?
http://en.wikipedia.org/wiki/Basic_income
Even millionaires like (likely) Megan Fox may be better off with a universal basic income:
"[p2p-research] Basic income from a millionaire's perspective?"
http://listcultures.org/pipermail/p2presearch_listcultures.org/2009-August/003949.html
Consider:
"Megan Fox Opens Up About Weight Loss, Depression: "Transformers"
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
For a society where different rules apply, see:
"The Original Affluent Society" by Marshall Sahlins
http://www.primitivism.com/original-affluent.htm
"""
Above all. what about the world today? One-third to one-half of humanity are said to go to bed hungry every night. In the Old Stone Age the fraction must have been much smaller. This is the era of hunger unprecedented. Now, in the time of the greatest technical power, is starvation an in. situation. Reverse another venerable formula: the amount of hunger in. creases relatively and absolutely with the evolution of culture. This paradox is my whole point. Hunters and gatherers have by force of circumstances an objectively low standard of living. But taken as their objective, and given their adequate means of production. all the people's material wants usually can be easily satisfied.
The world's most primitive people have few possessions. but they are not poor. Poverty is not a certain small amount of goods, nor is it just a relation between means and ends; above all it is a relation between people. Poverty is a social status. As such it is the invention of civilisation. It has grown with civilisation, at once as an invidious distinction between classes and more importantly as a tributary relation that can render agrarian peasants more susceptible to natural catastrophes than any winter camp of Alaskan Eskimo.
"""
Economics does not say everything is scarce. It says it is a discipline about decision making about scarcity. And it is woefully incomplete because it does not really concern itself with creating abundance. Most economics textbooks probably don't even mention abundance. Or fun. Or community. It's a woefully inadequate way to look at the world if what you want to do is build abundant fun communities.
How do you get from "if there is a cost" to "the resource is scarce". Things can be really cheap.
Also, consider what Marshall Brain says here:
http://www.marshallbrain.com/manna5.htm
"""
"It works like this. Let's say that you own a large piece of land. Say something the size of your state of California. This land contains natural resources. There is the sand on the beaches, from which you can make glass and silicon chips. There are iron, gold and aluminum ores in the soil, which you can mine, refine and form into any shape. There are oil and coal deposits under the ground. There is carbon, nitrogen, hydrogen and oxygen in the air and in the water. If you were to own California, all of these resources are 'free.' That is, since you own them, you don't have to pay anyone for them and they are there for the taking."
"If you have a source of energy and if you also own smart robots, the robots can turn these resources into anything you want for free. Robots can grow free food for you in the soil. Robots can manufacture things like steel, glass, fiberglass insulation and so on to create free buildings. Robots can weave fabric from cotton or synthetics and make free clothing. In the case of this catalog you are holding, nanoscale robots chain together glucose molecules to form laminar carbohydrates. As long as you have smart robots, along with energy and free resources, everything is free."
"""
Again, if you look at how people lived for tens of thousands of years in pre-scarcity times (before agriculture was needed), then you will see people can live without elites of the nature we have now. Daniel Quinn talks about this too.
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
It reminds of the fact that you cannot have 3 planets circling each other in a stable pattern.
In the market, having more people changes the solution. Individuals are not trying to make the market equal, they are trying to make their own position equal in reference to the other people, but
1) they deal with a lot more people than the kicker-goalie situation and
2) they do not have knowledge of the entire market
I do not belive that more "goods and services" are always better for us, but societies, even in pre civilitation times, have shown that humans have a tendancy to have a desire to accumulate wealth, whether it be in the moden ages monetary terms, or in pre cilviliation terms it would be more sexual partners or more land to hunt from. Even in hunter gatherer societies their are "elites" (leaders) who get preferential treatment. Scarcity, in my economics studies, does not mean that there are extreem limits and required rationing, only that in order to have one thing one must give up something else.
Just for me to sit here and enjoy a healty debate means that I am sacrificing one scarce resource for another. I am giving up my time (definately a scare resource being a business owner), which could be used chasing women, working on bettering my business, watching TV, reading a novel, or just about anything else, in order to express my thoughts. In my mind this is a rational decision (which I call greed) because I see more benefit in doing this right now as it is too early to go out, I am tired of work after a hard day, and don't really feel like killing brain cells in front of the TV.
While pre-agricultural societies may not have had the rich and famous type of elites we have today, they did have an elite class, usually called tribal leaders or chiefs. As agriculture caught on and more people were able to be fed the chiefs became kings controlling more land giving rise to the need for another class of elites called the aristocricy (yes, I really moved through time fast). In the modern era we have even more classes, regardless of the society we live in (capitalist democracies or commuunist dictatorships, it really doesn't matter).
The real world is not as the novels you point me to describe. Even if you owned all of California, accessing its resources is NOT FREE. Someone must gather the sand, mine the gold, and harvest food. All of these have a cost in economic terms.
Economic theory doesn't only describe what happens in a caplitalistic society, and can even describe, relatively accuratly, what happens in a communist country with price controls. Price controls ultimately lead to more scarcity as their is less supply as people find more valuable things to do with their time when they don't get enough gain from producing a product any more. Then you end up with either a total lack of resources or huge jumps in prices. Look at cold war era Moscow for a prime example, people had to wait in lines for bread for longer than it takes to make a loaf of bread.
In my view of the world, any resource has a cost, even if it seems free. If I want clean air then I need to reduce polution, this means I must reduce my use of fossil fuels or develop a new technology to clean the pollution out of them. If I want more free time then I work less and give up money which means that I have less money to spend on hobbies I enjoy meaning that my free time becomes less valuable.
The traditional view that economics is about money, is wrong, it is about supply and demand in a world with scarce resources, NOT always rare resources. Yes, things can be cheap, wheat today costs much less today than back in the 1600's before any industrial equipment was used in agriculture. As you mentioned earlier, only 2% of the American workforce is employed producing food, this is because technology has allowed us to streamline production of this resource. The cost, in terms of man hours, has significantly decreased. The introduction of industrial methods created the need for other resources such as steel and energy in the form of fossil fuels. We started with steam power, moved on to internal combustion engines and electric power. Electricty allowed us to develop new tools to help maximize efficiency such as computers and robotics. All of these new resources have a cost in terms of polution, or even just the oppportunity cost of all of those worked puting their time into engineering, manufacturing, and marketing a new product. All of t
societies, even in pre civilitation times, have shown that humans have a tendancy to have a desire to accumulate wealth, whether it be in the moden ages monetary terms, or in pre cilviliation terms it would be more sexual partners or more land to hunt from. Even in hunter gatherer societies their are "elites" (leaders) who get preferential treatment. Scarcity, in my economics studies, does not mean that there are extreem limits and required rationing, only that in order to have one thing one must give up something else.
It's called hoarding. And it always was either a reaction to a real life-threatening scarcity (that modern society does not have to deal with) or a part of sadistic desire for power (that society can easily suppress by keeping psychopaths away from power). Things will get much less complicated when economists will abandon the idea that extraordinary greedy people "deserve" extraordinary income by the virtue of their extraordinary feeling of self-importance.
Contrary to the popular belief, there indeed is no God.
As another reply, by "Alex Belits" points out, aspects of what you outline, like hoarding, would be considered dysfunctional in other paradigms. A study of other cultures, like some Native American tribes, shows that a "Tribal Chief" was selected and replaced at will by the people. They were picked from their lifelong behavior in the tribe, often to serve as more a spiritual leader than a dictator. Example from recent Iroquois history:
http://www.peace4turtleisland.org/pages/tributetoshenandoah.htm
"This article was written by Kanatiiosh as a tribute to Chief Leon Shenandoah who held the Onondaga title of Tadodaho and was truly a good man who lived his life according to the original instructions given by the Creator."
A book of his wisdom that I have enjoyed reading:
http://www.amazon.com/Become-Human-Being-Tadodaho-Shenandoah/dp/1571743413
What you write towards the end reminds me of this:
"No contest: the case against competition"
http://www.share-international.org/archives/cooperation/co_nocontest.htm
"""
We need competition in order to survive."
"Life is boring without competition."
"It is competition that gives us meaning in life."
These words written by American college students capture a sentiment that runs through the heart of the USA and appears to be spreading throughout the world. To these students, competition is not simply something one does, it is the very essence of existence. When asked to imagine a world without competition, they can foresee only rising prices, declining productivity and a general collapse of the moral order. Some truly believe we would cease to exist were it not for competition.
Alfie Kohn, author of No contest: the case against competition, disagrees completely. He argues that competition is essentially detrimental to every important aspect of human experience; our relationships, self-esteem, enjoyment of leisure, and even productivity would all be improved if we were to break out of the pattern of relentless competition. Far from being idealistic speculation, his position is anchored in hundreds of research studies and careful analysis of the primary domains of competitive interaction. For those who see themselves assisting in a transition to a less competitive world, Kohn's book will be an invaluable resource.
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Part of this issue is what we mean by "health", whether for an individual, a family, a community, a society, a biosphere, or a noosphere.
Again, from Alfie Kohn's work: ... Each culture provides its own mechanisms for dealing with self-doubt. ... Low self-esteem, then, i
"No Contest: The Case Against Competition" By Alfie Kohn
http://books.google.com/books?id=bLudHIk3gsMC
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If competitiveness is inherently compensatory, if it is an effort to prove oneself and stave off feelings of worthlessness, it follows that the healthier the individual (in the sense of having a more solid, unconditional sense of self-esteem), the less need there is to compete. The implication, we might say, is that the real alternative to being number one is not being number two but being psychologically free enough to dispense with rankings altogether. Interestingly, two sports psychologists have found a number of excellent athletes with "immense character strengths who don't make it in sports. They seem to be so well put together emotionally that there is no neurotic tie to sport." Since recreation almost always involves competition in our culture, those who are healthy enough not to need to compete may simply end up turning down those activities.
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
Can computer scientists teach economists how to apply patches without rebooting the system?
Fine. Given that I cannot change public opinion or government policy, what can I do as an ordinary individual to avoid civilizational risks and get us out into space.
As one possibility, you can contribute to the growing open manufacturing and maker communities that are creating a free commons of knowledge of how to make things. For example, you could help with RepRap somehow. Or you could improve Blender or other 3D modeling software. Or you could build better communications tools about manufacturing knowledge (maybe based on Google Wave?) Eventually, all that will lead to a new paradigm for manufacturing, allowing us to build better systems, including better spacecraft and habitats. Just make sure you get enough supplemental Vitamin D3 if you stay indoors a lot doing that. :-)
http://www.vitamindcouncil.org/
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
Your points are all quite interesting, but I still think you miss the point of what I have been trying to say. I agree that there is great potential for a futre where "things" cost less. The issue I have with many of your arguements is that it just doesn't seem to go along with what has been observed throughout human history, and that even in what you define as pre and post scaricty times that economic theory can still be usefull.
The law of diminishing returns you speak of is at the heart of economic theory, although it seems that many ignore this fact when making decisions they claim are absed on economic theory. I really doubt that the head of any Wall Street hedge fund really ever thinks to himself "I really don't need any more money." I will completely agree that there are many who seem quite ignorant and use econics as a reasoning for their greed when economics places no value on money itself or on having massive amounts of money at hand. Basic econmic theory is about humans making decisions based on what is available and which "options" they would prefer. Nothing you have cited contradicts with this fundamental basis, only your interpretation of the basis conradicts. Economics is not itself about consumerism, as some poeple have very few things they actually value (i.e. the nomadic hinter who sees a burden in moving items).
I have always been a fairly competitive person, even as I have aged a bit. I no longer play sports and rarely compete directly against someone else (except in the occasional poker night). I do compete against myself more than anything; seeing how far I can backpack in a day, how many different species of fish I can catch, or even something as mundane as how much better of a job I can do on my next home improvement task than I did last time. Competition is part of what set humans apart from other species, it is the internal drive which makes us better ourselves. Heck, it was competition which drove us to the moon resulting in much of the technology you are praising as the "savior" of mankind.
Just take this example, an please don't take it out of context: War is probably the ultimate form of competition. While I do not promote war there are a number of postives which have come out of war(surely not enought to justify them). The mass organization of people around a common goal in order to "win" produces huge leaps in technological advancement. The fear of loosing also helps contribute to the rally of people and resources. WWII led to the invention of computers and nuclear power(which I believe is the best current form of energy we have even though it has some MAJOR problems), the cold war produced effective rockets, the rapid advancement of computers, the Internet, and advanced materials. The point of this is that competition drives advancement. The current state of the world, in my opinion, in not so much of a competition against other humans (although it still occurs it shouldn't be the focus of society) as it is a competition against our history of destroying ourselves and our longest term needs of a livible planet. The competitive nature of humans is just part of what makes us who we are. If we didn't compete agaisnt something humans would have been wiped off the planet well before we ever existed. The pre-homo sapians which didn't did have a sens of competition would have erradicated us well before we left Africa.
I hadn't read the article, in full, which you posted: "The Original Affluent Society" by Marshall Sahlins, before my post yesterday but even it reinforces economic theory. In my understanding of economics not all objects are resources, and not all resources would be considered a resource to all people. If I have no use for an object or service it has no value to me and is either just there or it is waste, if something holds me back from doing what I want to do I would put a negative value on it (waste). I do not promote "hording," but when I like something I am usually willing to give up something else, which is exactly what I see in economic theory. Eco
Those are worthy projects. I'm probably going to continue in my own line of academic research, but I'll keep that in mind.
But it's also important to be as prepared as possible for the future getting derailed. I've actually heard people say they would rather die than live through a dark age. Their optimism is a fragile and brittle thing, apparently.
As for me, at the same time as I work to bring on the future, I will continue thinking up and implementing ways to come out on top even if the shit does hit the fan... so that I'll be in as good a position to get my local corner of civilization get back on track as I can manage.
Thinking that the future will play in the high-tech post-scarcity way I want it to would make me complacent. It's far more useful to think of risks that stand in my way and how they can be neutralized.
Sometimes you just have to make a choice between helping the larger society prosper versus turning inward and perhaps, by inaction, helping bring about the very catastrophe you are worried about.
But, from a "preparedness" perspective, working from pessimism, interesting reading:
http://www.fromthewilderness.com/free/ww3/110706_mcr_evolution.shtml
http://www.alpharubicon.com/prepinfo/themainmessage.htm
Ideally, one can do both -- build strong local communities that are more self-reliant while at the same time developing ideas that help everyone. One issue with the Alpha Rubicon people is that they choose to keep most of what they learn to themselves, presumably to give themselves and edge in a catastrophe? Maybe there is a different reason? Ultimately, a competitive mindset may be what dooms us unless we can move beyond it:
"No contest: the case against competition"
http://www.share-international.org/archives/cooperation/co_nocontest.htm
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
Well, sometimes some discretion is necessary. Better the seeds of high-tech society survive in a few tightly-organized pockets than spend themselves bailing out the masses who never bothered to make their own preparations. Still, general information should be shared, that's definitely a positive sum game. Specific preparedness measures taken by individuals not so much.
Interesting links, thanks for them.