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Showing posts from March, 2016

The Margin for Error

Obviously utility is ordinal, not cardinal. Of all those links below the WikiHow one is best at making that clear by avoiding utils and just using prices. After all utility is just one less word and one more syllable for use value, which was a concept that, even before the Marginal Revolution, was in circulation used by folks like Bastiat and Marx.

Marx, for example, thought that use value was a prerequisite for labour-produced stuff to become commodities, as mud pies are not valued prior to being offered by their producer for exchange. Even Menger employed the term use value in his formulation of radical subjectivism.

The use value that Marx talked about was objective. As for Menger? Well, it's actually debatable.

But anyway, onto the porn.

Economics Concepts offer a utils-heavy explication of marginal utility theory. [1] The Khan Academy has fantastic videos. The one linked is great at explicating total and marginal utility and substitution. But, yet again, it uses utils. Utili…

How to Test Labour Time?

What follows is a brain fart I had this evening...
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How will anyone ever test labour time to see whether or not there is a robust relationship between labour time invested in a good and the sale price of that good? Obviously no labour theory advocate is going to point to one good, on one day, and say that the one price on that day maps to the labour time that went into it. Let's not let our urge to straw man people we disagree with overtake us entirely.

No. What they will say is that changes in prices will map to changes in labour time. Those changes over longer timeframes will be used to estimate with whatever level of precision the relationship between the socially necessary abstract labour time and the market price.

Folks who advocate labour theories don't consider them to operate in a vacuum anymore. If any Neo Ricardian sees this they will probably wonder why I'm saying "anymore" as they know better than me what Smith and Ricardo were into. But obj…

RIP Macroeconomics

This post has no intellectual rigour, but I'm posting it anyway, because neither does macroeconomics.

Most economists love spending all day doing macro, preferring it to the prosaic small-scale world of microeconomics.

This is where the brazen hypocrisy of many heterodox folks will make itself known, as they decry the fallacies of composition rife within neoclassical economics and then go away and commit the same daft mistakes themselves (sometimes quite well disguised) using aggregates of demand, supply, and labour time.

Further friction for modern economists can be had when contending with the tripartite division of economics into land, labour, capital, and the action of classes (the 'class' praxis) of the owners of those three economic resources.

So, to all of macroecon... you're drunk. Go home and rethink your life.*

* Yes I know I just committed a fallacy of reification.

Salon is Not Your Friend, Herr Caplan!

Salon demonstrate their balance and good sense in trying to rubbish Bryan Caplan. Specifically Michael Lind spends paragraph after paragraph lobbing invective like highly acidic candy. Enjoy! And read the first comment below the article!

Or, just in case, I'll supply the full text of said comment below.

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E_Yusupoff May 31, 2014

I normally avoid commenting on Salon articles, due to the extremely poor quality and almost erotic obsession with sadistic ad hominems. (Incidentally, I don't have this opinion about 90% of the leftish leaning media - Salon alone stands out as a deeply unpleasant publication, particularly when it comes to swivel eyed attacks on libertarians).

But this article is so utterly intellectually bankrupt that it requires a response. I am also aware (and this is the kind of the thing that makes me hate Salon) that the author knows better. You have entirely purposefully constructed a straw man account despite the fact that you could easily have properly …

A Conclave of Super Smart People All Missing the Point Entirely...

Somehow even super-intelligent people who like to think at great length can't get their heads around the difference between "go elsewhere" with regard to private suppliers versus "go elsewhere" with regard to the state. The context is usually related to payment for services rendered.

With regard to private suppliers your loss will be that they stop doing business with you. The end.

With regard to the state your loss will be that they will kidnap you and throw you in a cage for a very long time, and that everybody paying tax other than yourself will share the bill.

Spot the difference. Really try.

The Marginal Revolution

Some folks have spoken on the Marginal Revolution, which was probably the best thing to ever happen to economics. For all that there are problems with the first of the two presentations (explored in the comments beneath it) I still consider it worth a watch if you can get over the poor audio quality.


from The Independent Institute

heck, there's even a blog named after it

Humans Are Neither Bears Nor Tigers

To keep the full value that you produce you must produce only for your own consumption. That's about as absurdly anti-social as you can get without being outright hostile toward others.

Such a level of primitivism would render humans unable to clothe themselves, learn how to read the land and sky to predict animal movements and weather, or anything else much beyond scratching sticks and stones together to make them pointy.

Hunting would be out of the question, so only gathering would take place, and death due to predation by other species or more pro-active labour-value-keepers would keep the global population likely in the high hundreds of thousands or low millions.

In other words, the solution advocated by anarchists according to their own religious metaphysics will leave humans living like tigers or bears.

No thanks. I'll keep muh division of labur.

Common Sense in 324 Words

First people want to live peacefully because this minimises risk and uncertainty as much as possible. A society based on agreements is the result. People will agree that whoever gets real property (land and buildings) with the agreement of the prior owner is now the owner.

The alternatives are absurdities. The only protest at this is original appropriation, but since the appropriator is agreeing with nobody about the land (nobody owns it before the appropriator appropriates it) there is nobody to steal it from. Using 'society' as a plaintiff is reification, so no dice.

The access right of way over somebody else's land is a common-sense presumption uness they put a fence in the way, at which point the common-sense presumption is to leave well alone. Likely this will be the courts' approach as a person cannot know innately what land belongs to whom, what they're doing with that land, or what their position is on using paths on that land.

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Contracts are the…

The Labour Theory of Value FAQ

March Against Marx - Part ?
An FAQ for the labour theory of value, separate from normative judgments about whether it should be used in economics, actually exists, and I didn't even know until today. Whoops. I will have to read this whole thing, and you should too! [1]

It hits off with a basic factual description and then launches into labour value's relationship to use value and exchange value. Before long we get measurement, exploitation, the transformation problem and suggested further reading.

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Economic Freedom and Economic Growth - Hypothesis

Let's have a lazy experiment.

Hypothesis 1: The greater the share of the economy that allocates resources based on trade versus planning the faster the economy will grow.

Hypothesis 2: The less the government regulates the society it claims to rule the faster the economy will grow.

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Definitions: Trade means resource allocation according to the movement of supply and demand. Planning means resource allocation according to a government plan. Economic growth means increasing access over time to goods and services. Regulation means government rules restricting economic activity.

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First metric: Planning versus Trade (PT) to summarise economic activities for production and distribution of goods and services. P & T are inversely proportional, with seven different results showing the share of total economic activity consisting of P versus that consisting of T.

PP / T
P / T
P | T
P \ T
P \ TT

Second metric: Freedom (F) to summarise the freedom of people to set u…

A Striking Turn of Events

So a bunch of people think they deserve more than they get for what they give. Sound familiar? It's the universal human emotional response to pretty much every employment situation ever. Everybody gripes about what they have to do and what they get in return for it.

Lately there's been a big old strike by NHS junior doctors . [1]

Real anarchists favour the NHS... maybe because they realise that moneyless and profitless communes can't provide modern healthcare on a large scale.

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Meanwhile that other exemplar of the virtues of single-payer centrally-planned healthcare, Canada, was witness to the death of a young woman while she waited for treatment. [2]

See, the thing is, healthcare interventions are only available in limited quantities, and central planning can't change that. Unavailability resulting from scarcity will still deprive you of things you'd like, it's just the reason is a queue rather than a money price.

From the perspective of the person …

Guns and Self-Defence

Turns out people defending themselves with firearms can be useful. Who knew, eh?

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Can you see the sources at the bottom of the infographic? If not;

Kleck & Gertz;

Southwick Jr.;
No link found... :(

Tark & Kleck;

Bureau of Justice Statistics;

National Vital Statistics Reports;

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Youtube vlogger Lengthyounarther speaks at some LENGTH about a common sense approach to thinking about guns. It makes for a good educational listen.

Marginal Utility Is Your Friend

A page at Amos deals very well with diminishing marginal utility. They even have interactive tables!

Chapter 4 of Price Theory by David Friedman deals with much the same thing.

I recommend reading both closely and taking notes of the key points.

Obviously 'utils' are a learning convention. Nobody believes utils are an effective measure of marginal utility in the wild! There are no units in economics. That's why it's not a hard science.

Kapitalism 101's Case(s)

I will post all of Kapitalism 101's major videos here. There are two important playlists from this guy, one explaining the Law of Value and a second taking issue with the so-called Transformation Problem. [1][2]

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This one is a long playlist all nicely presented and waiting for you to enjoy, so just clicking the video above or the cite link under it will be sufficient.

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However, the Transformation Problem Trilogy isn't collected into a playlist by Mr Cooney so I've put all three videos here. Enjoy!

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[1] Law of Value article at Wikipedia

[2] Transformation Problem article "

[3] The Law of Value playlist on Brendan M Cooney's Youtube channel

Start From Zero? Or From One?

March Against Marx - Part 2
I have no intention of committing silly straw man attacks when I dispute the claims of the Big Man, so I'm going to link to eight important Marxist sources that will inform my understanding of Marxian economics. The ninth and tenth sources are where I'll be getting several of my criticisms from.

Karl Marx was better read as a teenager than I am now, and by the time he'd finished Capital Volume III was an intellectual force of nature. This means my critique must build on the work of economists past and present to have any hope of making a persuasive case.

Also, one vital point. I am not going to debunk Karl Marx's economics. To truly debunk it I would have to demonstrate its total wrongness or non-even-wrongness and either of those ends is beyond my abilities, and probably anybody's. Rather my contention will be that Marxian economics is less good as a way to analyse consumption, distribution and production than Austrian, New Classical &…

Field and Substance in the Search for the Origins of Value in Economics

March Against Marx - Part 1
David Ricardo gave us the labour theory of value we all know and hate. Marx actually deviated from it and took up some more complex thing of his own. What kind of thing is what we'll be getting at in future. For now let's just sum up the two possible ontological approaches to objective value. They are not epistemologically distinct because both are ideas that value is objected and gives rise to (and/or is measured using) prices.
We all know what prices are, right? Well, they're just exchange rates/ratios. On to the porn!

Substance theory is thee ontological position that substances are separate from their components. For enquiry into economics this means that labour-induced value resides in things. This literal interpretation underlies the labour theory of value as posited by Ricardo. [1]

Field theories of value hold that value is not a literal quantity out there in the world but that its presence can…

Commentaryism - Again? Sorry!

I was childish and posted again on that Matt Bruenig comment thread. I couldn't help myself. This time I only posted it today, so expect me to be eviscerated by some semi-decent arguments in future. [1]

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Every time you post one of these blogs it quickly turns into crazy talk from propertarians who come and make the same circumlocutory arguments they always make! Anyway, I still like them. Here's what I'm reading in sum:

"danfromct" is trotting out his standards: "rivalrous goods" somehow equals "individualist propertarianism," "dibs," and, of course, a fallback to the very issue in question, "anything other than propertarianism is violence even though you just proved it isn't!!!"

dan, please:

1. The fact that some objects are only consumable by a single individual (and thus rivalrous) does not mean that all objects must become "property" devolving onto some single individual. The reason…

Fully-Formed Galaxies Over 13 Billion Light Years Away...

Bryan Caplan Has High IQ Commenters... and IP Law Hates You

Seems Caplan is in favour of copyright law. I don't know how this can reasonably be enforced. Ironically the one form of IP I am OK with is trademarks - and a weak interpretation at that. For example in Matt Land the following image could never be construed as a copyright violation.

But back to Caplan; do please read his post, but also please read of the comments below. Some smart creative mofos down there. For example, one comment is left by Patri Friedman, scion of Milton & Rose via David, who takes issue with Caplan's position for effectively permitting unsigned contracts, that is un-agreed agreements. Naughty Caplan!

Speciation Before Your Eyes?

Fish in a lake in Switzerland have almost certainly speciated in the 150 years since they were introduced to the setting. Cool, huh?

In other news, Trump continues to be truly terrifying, defending his penis size in response to Republican winging at his success. Honestly, I thought we all knew democracies were self-destructive. Salon are all fire and brimstone. But at least this debate is honest, says The Verge, possibly in despair. Clearly these people don't understand that the key is to ignore him.

Seattle allows folks working as Uber and Lyft contractors to unionise. Sensible people have nothing against the act of unionisation because it's voluntary. There are reasons I have a small problem with this, but whatevs.

And if you own Grand Theft Auto Five then you should try the Pedestrian Riot Mod that shows what human nature would have to be like for stateless societies to decisively not work.

A Robot Ate My Job!

The World Economic Forum recently over Davos for its annual pow wow. On the agenda were all kinds of delights, including some discussion of technological unemployment down to software and robots displacing human labour due to their increasing cheapness relative to human labour.

Should we all be worried? Well, it depends what line of work you're in. According to a piece on the WEF website those folks doing low-skilled jobs are at greater risk than those doing more-skilled work. Basically it breaks down to; how easily can a machine undertake a task to a customer's satisfaction?

That will be easier with lower-skilled work because it's relative repetitive and usually the boundaries of the work tasks are narrow. That means there is a process with set steps and a very simple workflow for dealing with different possibilities, and that the number of those possibilities is fairly limited. The narrower those bounds, the more easily the task can be automated.

This isn't a discus…

1318 - The Evil Capitalists Own Your Mom!

The New Scientist ran a piece on the economic relationships between the 43,060 transnational corporations in the world as of 2007. It turns out that 147 of 'em are thick as thieves, which each of those 147 entirely owned by one or more of the others within that clique.

Naturally some anti-capitalists have decided that this proliferation of tight interconnections constitutes the proof that not buying what someone's selling will fail to put that seller out of business.
Takes all sorts to make a world, brah. Is concentration scary in itself? No;

John Driffill of the University of London, a macroeconomics expert, says the value of the analysis is not just to see if a small number of people controls the global economy, but rather its insights into economic stability.

Concentration of power is not good or bad in itself, says the Zurich team, but the core’s tight interconnections could be. As the world learned in 2008, such networks are unstable. “If one [company] suffers distress,” sa…