Hi Bee, “And it's our job as scientists, and I would say as responsible citizens, to understand the deep points and therefore help to rectify the discrepancy and keep ourselves away from trouble.”
That was certainly great stuff, so good I will have to find out better as to how Jeffrey D. Sachs thinks by reading more of what he’s written. His insight given here serves for me to strengthen the contention that in all things that require understanding, whether it be economics, sociology, the natural world or anything for that matter to simply ask how is not enough, since the why must be also understood. That is further to say that although induction does lend us some powers of prediction, it often renders little as a means of control.
I would be interested to hear your thoughts on the "More Really is Different" paper at http://arxiv.org/abs/0809.0151. The abstract for this paper is:
In 1972, P.W.Anderson suggested that `More is Different', meaning that complex physical systems may exhibit behavior that cannot be understood only in terms of the laws governing their microscopic constituents. We strengthen this claim by proving that many macroscopic observable properties of a simple class of physical systems (the infinite periodic Ising lattice) cannot in general be derived from a microscopic description. This provides evidence that emergent behavior occurs in such systems, and indicates that even if a 'theory of everything' governing all microscopic interactions were discovered, the understanding of macroscopic order is likely to require additional insights.
"" is what you see on the surface can completely hide and obscure what's happening below.
And it's our job as scientists, and I would say as responsible citizens, to understand the deep points and therefore help to rectify the discrepancy and keep ourselves away from trouble.” ""
Um, one doesn't need such (or any!) moral inclination to be inherently curious, let alone realise the efficacy of such curiosity.
Hi Bee, a lot of that 'shut-up and calculate' attitude can be traced to physics envy among economists (most notably spearheaded, i think, by Paul Samuelson) so i think it's good to have a physicist such a you weighing-in for the opposite view (as expressed by Sachs).
1:15 AM, October 29, 2008
Kaleberg said...
"you have to look at the prices you see on the surface and infer the deep picture from that"
That sounds an awful lot like Dirac's approach to quantum mechanics.
Actually, it makes some sense. You can actually measure prices and quantities, but you can't measure an awful lot else. Sure, people try to estimate value, demand, supply and the like, but those are just estimates.
Price and quantity can be measured, at least when the market is operating. If no one is buying or selling, then there are no prices. That's why so much money is spent on the various stock exchanges, they are sort of an LHC for measuring prices. It is also one of the amazing things about eBay, it can produce prices for the most peculiar and amazing items.
Of course, the big problem is figuring out what is actually happening. Astronomers could measure stellar and planetary positions in the sky for millenia before they got a real clue. This is where ideology creeps in. If you think the planets are actually intelligent entities, your astronomy will be a bit different than if you think they are rocks.
Right now, I'd say economists think that the elements of our economy are rocks, when they are more likely intelligent entities.
10:29 PM, November 01, 2008
Philip Meguire said...
"Monetarism" died while Reagan was President, and remains dead and buried. "Neoliberalism" flourished during the 30 years preceding the current crisis. One prominent neoliberal recently published a book about the crisis that breaks rank with the neoliberal consensus: Judge Richard Posner.
The way I would describe the state of affairs Sachs deprecated is "prices are sufficient statistics" (a notion covered in any undergrad math stats text). This assertion reminds me of the Heisenberg approach to QM: model observables and only observables. Prices are eminently observable. A deep insight of Hayek's is that market prices are a form of human communication, and as such akin to natural language, mathematics, and perhaps even music.
Warnell summarized Philip Anderson as saying that "complex physical systems may exhibit behavior that cannot be understood only in terms of the laws governing their microscopic constituents." There are economists who think about the rapport between individual households and firms, on one hand, and the national and world economies, on the other, in analogous ways.
Economic agents are more than intelligent; they are guileful. If this is granted, the possibility of strategic interactions, the formalization of which is non-cooperative game theory, arises. You physicists are understandably drawn to those parts of economic theory formalized using real analysis and point set topology; both disciplines talk of Lagrangian and Hamiltonians. You seem less aware of those parts formalized by that curious bit of discrete math called game theory.
“Now what I know about our training since the early 1980s [...] the way we train people to think [...] in mainstream economics and in mainstream politics, has left them almost unable anymore to distinguish the surface from the underlying reality. Not only was it the age of Reagan and the beginning of market fundamentalism that came in the early 80s, and the rational expectations revolution and all the rest, but a fundamental break in how we actually train our students to think [...] the way we see it in our universities.
Because the new kind of economic modeling for 25 years, the one that won all the Nobel Prizes said: you don't have to understand the deep picture, you have to look at the prices you see on the surface and infer the deep picture from that. In other words, the surface tells you the depths in fact because the surface and the depths couldn't be two different things. You don't really have to know underlying mechanisms in the economy because the prices reflect the underlying mechanism. In fact you fit the deep model, if there is one, by looking at the surface and then inferring what the deep model must be, that's literally how students are trained. They're not trained to be skeptical, they're trained to fill in parameters of a system which assumes from the start that what you see on the surface is what you really have. Whereas what fundamental proper skepticism of the Popperian sort [...] and also what the logic of economic bubbles shows, and what the logic of biophysical bubbles show, is what you see on the surface can completely hide and obscure what's happening below.
And it's our job as scientists, and I would say as responsible citizens, to understand the deep points and therefore help to rectify the discrepancy and keep ourselves away from trouble.”
~ Jeffrey Sachs, October 20, 2008 “Can We Save the World Economy? A Conversation with Geroge Soros, Nouriel Roubini, and Jeffrey Sachs”, Recording here
posted by Sabine Hossenfelder at 3:27 PM on Oct 24, 2008
"Shut up and Calculate"
9 Comments -
"...you don't have to understand the deep picture, you have to look at the prices ..."
Right, 'monetarism' I think was claled in the '80's; Neoliberalism really (which has its theoretical roots in the economic analyses of M. Friedmann).
3:55 PM, October 24, 2008
Thanks, Bee, that is a mind-feeding quote :)
(My mind is ever hungry :) )
5:39 PM, October 24, 2008
Hi Bee,
“And it's our job as scientists, and I would say as responsible citizens, to understand the deep points and therefore help to rectify the discrepancy and keep ourselves away from trouble.”
That was certainly great stuff, so good I will have to find out better as to how Jeffrey D. Sachs thinks by reading more of what he’s written. His insight given here serves for me to strengthen the contention that in all things that require understanding, whether it be economics, sociology, the natural world or anything for that matter to simply ask how is not enough, since the why must be also understood. That is further to say that although induction does lend us some powers of prediction, it often renders little as a means of control.
Best,
Phil
10:49 PM, October 24, 2008
I would be interested to hear your thoughts on the "More Really is Different" paper at http://arxiv.org/abs/0809.0151. The abstract for this paper is:
In 1972, P.W.Anderson suggested that `More is Different', meaning that complex physical systems may exhibit behavior that cannot be understood only in terms of the laws governing their microscopic constituents. We strengthen this claim by proving that many macroscopic observable properties of a simple class of physical systems (the infinite periodic Ising lattice) cannot in general be derived from a microscopic description. This provides evidence that emergent behavior occurs in such systems, and indicates that even if a 'theory of everything' governing all microscopic interactions were discovered, the understanding of macroscopic order is likely to require additional insights.
12:19 PM, October 25, 2008
Hi Stephen,
I saw the paper, I printed it, it's on my desk, but I haven't yet come around to read more than the first page. Maybe ask Michael. Best,
B.
12:37 PM, October 25, 2008
"" is what you see on the surface can completely hide and obscure what's happening below.
And it's our job as scientists, and I would say as responsible citizens, to understand the deep points and therefore help to rectify the discrepancy and keep ourselves away from trouble.” ""
Um, one doesn't need such (or any!) moral inclination to be inherently curious, let alone realise the efficacy of such curiosity.
6:58 PM, October 25, 2008
Hi Bee, a lot of that 'shut-up and calculate' attitude can be traced to physics envy among economists (most notably spearheaded, i think, by Paul Samuelson) so i think it's good to have a physicist such a you weighing-in for the opposite view (as expressed by Sachs).
1:15 AM, October 29, 2008
"you have to look at the prices you see on the surface and infer the deep picture from that"
That sounds an awful lot like Dirac's approach to quantum mechanics.
Actually, it makes some sense. You can actually measure prices and quantities, but you can't measure an awful lot else. Sure, people try to estimate value, demand, supply and the like, but those are just estimates.
Price and quantity can be measured, at least when the market is operating. If no one is buying or selling, then there are no prices. That's why so much money is spent on the various stock exchanges, they are sort of an LHC for measuring prices. It is also one of the amazing things about eBay, it can produce prices for the most peculiar and amazing items.
Of course, the big problem is figuring out what is actually happening. Astronomers could measure stellar and planetary positions in the sky for millenia before they got a real clue. This is where ideology creeps in. If you think the planets are actually intelligent entities, your astronomy will be a bit different than if you think they are rocks.
Right now, I'd say economists think that the elements of our economy are rocks, when they are more likely intelligent entities.
10:29 PM, November 01, 2008
"Monetarism" died while Reagan was President, and remains dead and buried. "Neoliberalism" flourished during the 30 years preceding the current crisis. One prominent neoliberal recently published a book about the crisis that breaks rank with the neoliberal consensus: Judge Richard Posner.
The way I would describe the state of affairs Sachs deprecated is "prices are sufficient statistics" (a notion covered in any undergrad math stats text). This assertion reminds me of the Heisenberg approach to QM: model observables and only observables. Prices are eminently observable. A deep insight of Hayek's is that market prices are a form of human communication, and as such akin to natural language, mathematics, and perhaps even music.
Warnell summarized Philip Anderson as saying that "complex physical systems may exhibit behavior that cannot be understood only in terms of the laws governing their microscopic constituents." There are economists who think about the rapport between individual households and firms, on one hand, and the national and world economies, on the other, in analogous ways.
Economic agents are more than intelligent; they are guileful. If this is granted, the possibility of strategic interactions, the formalization of which is non-cooperative game theory, arises. You physicists are understandably drawn to those parts of economic theory formalized using real analysis and point set topology; both disciplines talk of Lagrangian and Hamiltonians. You seem less aware of those parts formalized by that curious bit of discrete math called game theory.
12:47 AM, August 21, 2009