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Daniel Sanderson makes his return to the show this week to promote his new book and talk about Adam Smith being a Platonist! So is Daniel saying Adam Smith was a hardened fan of the Greek philosopher Plato???
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Steve Keen considers the following as important:
This could be interesting, too:
Daniel Sanderson makes his return to the show this week to promote his new book and talk about Adam Smith being a Platonist! So is Daniel saying Adam Smith was a hardened fan of the Greek philosopher Plato???
Topics:
Steve Keen considers the following as important:
This could be interesting, too:
Editor writes CEO-to-worker compensation ratio, 1965-2023
New Economics Foundation writes 100 days of Labour: great success or bit of a mess?
Merijn T. Knibbe writes The European Central Bank and the return of history
John Quiggin writes Monday Message Board
| Daniel Sanderson makes his return to the show this week to promote his new book and talk about Adam Smith being a Platonist! So is Daniel saying Adam Smith was a hardened fan of the Greek philosopher Plato??? |
BELOW IS A COPY MY COMMENT FROM LAST WEEK
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OK – Keens Laws of Economics and the Meier-Wilson function.
Apologies to all for the length, but this is how an engineer thinks because we get trained in reality. After all engineering if fundamentally the application of math to real world situations. We design (or select & buy) a bolt to hold things together. Economists make us buy a cheaper bolt or get someone to change the bolt to a cheaper bolt or wont let us maintain or replace the bolt when it needs replacing. It breaks they blame us for their decision.
FIRST everyone should go and watch the Lex Clip on Lex Clips "What Karl Marx got wrong | Steve Keen and Lex Fridman" because that's where he explains the terms subjective and objective in the economic context.
Keen's 1st Law: All economic activities require energy irrespective if the value outcomes are objective or subjective.
Keen's 2nd Law: All economic activities are functions of time and are therefore dynamic.
Keen's 3rd Law: All economic activities operate on finite resources and the work performed driven by the energy consumed change the value of the resources irrespective if those resources are consumed or maintained.
(and yes I came up with that one as I was writing this out)
What that basically means is that
1) If you aren't using energy then there's no economic activity and therefor NO change in value (subjective or objective).
2) When we consider an economic activity we must start with a term of the form dV/dt because that is what is happening – there's an activity that is using energy TO CHANGE THE VALUE of the resources used and that those resources are finite and that some resources are consumed while others are maintained (as in the still exist at the end of the time period being considered).
This is what I have been working on for some time now
I call it the Meier-Wilson function dV/dt = f(En, Mr, Cr)
The Meier is Sid Meier who's Civilisation games have inspired this (notable Civ 6), because they are both dynamic (as in functions of time) and include BOTH subjective and objective changes in value from activities performed.
Special plug to Mike R. on this because without him pointing out the economics in video games I would not have realised how I played some of the games I play and come up with this.
In Meier-Wilson function dV/dt = f(En, Mr, Cr)
V is a vector of objective and/or subjective values which changes over time due to the work function f(En, Mr, Cr) where:
En is energy,
Mr is maintainable resources (which can change in value due to this activity), and
Cr are consumable resources which are consumed by the work during the time period being considered. Note that a maintainable resource can become a consumable resource in a subsequent time iteration because at the end of that iteration it has been consumed which might also mean "the end of its useful life."
NOTE the function f(En, Mr, Cr) is multi dimensional in nature. Just like the Navier-Stokes equation starts as a simple relationship and then gets expanded into 3D space. I see f(En, Mr, Cr) as a matrix and vector function with a stack of equations in a matrix pulling values out of resource vectors. There's not just 1 kind of energy. There's the sun, petroleum based, nuclear, wind,…… There's not one kind of resource either.
BUT at the UNEXPANDED LEVEL – IF the Meier-Wilson function is valid then it should be able to rationally explain any economic activity and how that activity works because things like Cobb-Douglas can only explain activities involving labor and it can't explain the use of energy in the activity being considered.
For example a paddock left fallow has sunlight (as the energy), the actual paddock (including flora & fauna) as the maintainable resource and rain as the consumable resource. Ask any farmer if leaving a paddock fallow has an economic outcome? So leaving a paddock fallow is an economic activity devoid of labour but the value of the paddock changes over a given time span, which the Cobb-Douglas function CANNOT EXPLAIN.
This same concept can also be used on the ocean and rivers and lakes.
If the same paddock is in Ancient Egypt and plowed and sowed with a crop of wheat then the work function changes because there are different consumable resources (seed, fertiliser, pest control sprays, irrigation,….). Things like the plow used to sow the crop, the ox used to pull the plow and and the scythe used to reap the crop are maintainable resources (tractors, plows, headers,….etc). The energy sources are the fodder the Ox eats to power itself and pull the plow, the sun for the wheat to grow and the food consumed by the farmer to power himself to swing the scythe to reap the wheat.
In the modern context the Ox and scythe are replaced with tractors, plows, seed drills and headers. So the nature of the work function would be similar to the ox & scythe but the size of the value changes would be larger.
So growing a wheat crop is an economic activity the Meier-Wilson function can explain because it can explain there's relationships between the energy use, maintainable assets and consumable assets. Neoclassical economics, the labor theory of value and Cobb-Douglas cannot explain how the wheat grows because there's no labour while it grows. The Physiocrats have trouble because how do they explain the change in value of the Ox, Scythe, tractor, seed drill or header.
I can also use the Meier-Wilson function to explain how value is derived from the ocean or a river. When the fishermen leave parts of the ocean or river alone then, then there's ZERO human involvement and during that time the fish can breed and grow in number and grow in size. There's a change in economic value. How do the Physiocrats, Neoclassicals or anyone else explain the change in value to a patch of the ocean when NO HUMAN is there and yet logic tells you that as the fish stocks rise then value is changing. When the fishermen come and fish then there's more changes in value.
Also if a tribe (from times past) or a town/city now is located next to a river or fresh body of water how does any economist from any era explain human activities on the value of that water, which can be negative through pollution. How does Cobb-Douglas or any other economic model or concept explain NEGATIVE value return on an economic activity because creating pollution and dumping it in a river or lake IS AN ECONOMIC ACTIVITY its just that it has a NEGATIVE change in value.
Before you ask about factories and mines. I used to build factories and parts of factories as well as build an help operate mines and I know this method can explain those economic activities.
I also know it works for White collar service industry types in an office.
The energy is in the food they consume.
They themselves, their skills, knowledge,….. are the maintainable resource.
The data they use as well as the paper and ink they write their report on are both consumable resources.
FINALLY there's education.
Both my parents were high school teacher (dad – math science and mum – home economics and history). I doubt that any economists and especially a neoliberal can explain the value of an education system because the only thing they seem to want is to exploit it down to monetary income of the school with claims to the eventual monetary income of the students. Both those things are objective when in fact education is ALSO subjective because there's also things learnt like social skills, reading stories for pleasure, appreciating music, learning history so you can put things in context, other languages,…..etc. Importantly there's also learning how to learn new skills and my favorite UNDERSTANDING the world and how it works (if you have good teachers).
Education is a combination of subjective and objective changes in value to both the teachers and students. Neither the Marxians, Capitalists, Neoliberals or physiocrats can explain that because they either see value subjectively or objectively but NOT both (go watch Steve's explanation of why Marx was wrong). As a concept the Meier-Wilson function says there's a change in values (plural) that comes from an activity that uses energy and has resources (maintainable and consumable)
The energy is in the food the teachers and students consume as well as the energy used to power the buildings and facilities.
The maintainable resources are the teachers themselves as well as the buildings and facilities including sports facilities and equipment. How about the value of a library?
The consumable resources are the paper, ink, water, stuff in science labs, ingredients & supplies in a home economics cooking class (my mum taught that).
The CHANGE IN VALUES (plural) includes the experience gained by the teachers from the practice of teaching and the skills and knowledge gain of the students which includes the skill of being able to learn new skills.
I'd like to see if ANY economist can use any of their theories to PROPERLY explain value of an education system. They all claim there is a value in education otherwise their own words and claims are meaningless. yet how do they explain the combination of CHANGES in both objective and subjective value when they DON'T even believe the system is dynamic and changes over time.
Maybe they should not have interfered in the engineering space.
I work in an industry that seeks the truth in Sound as we sell home listening systems. We take a recorded medium and then find the best path of playing it back. The playback process can take many forms. So, with that being said, here are my all time favorite economists. A couple of obscure PHD Federal reserve blokes who flat up and quit and sought truth in sound. In the mid-1970s, two economists—friends and serious audiophiles—Dr. William Conrad and Dr. Lewis Johnson—were highly dissatisfied with the commercially available equipment of the time and were also perplexed and challenged by the readily apparent sonic differences among components in their own systems
Conrad – Johnson
yeah the notion that we look into Hume as well
Adam Smith was hired by the zio'nist oligarchy to make the case for their drug trade and slave empire.
We await the comprehensive review of WYSIWYG QM-TIME Completeness Holographic Principle Act-uality by the Early Childhood Development Psychologists to relate the "Objectives permanence" logarithmic permutations and combinations of Newtonian relative-timing Fluxion-Integral differentiates to magical-functional word definition judgements to the Singularity-point reciprocation-recirculation coherence-cohesion sync-duration resonance quantization in shell-horizons of transverse trancendental e-Pi bubble-modes condensation In-form-ation in the context of Periodic Table rhythmic log-antilog interference positioning-location systems of identification.., aka democracy education in the global ecosystem spin-off called Economy.