Quote
May 18, 2012
"Unfortunately, we can seldom test particular predictions in the social sciences by experiments explicitly designed to eliminate what are judged to be the most important disturbing influences. Generally, we must rely on evidence cast up by the “experiments” that happen to occur. The inability to conduct so-called “controlled experiments” does not, in my view, reflect a basic difference between the social and physical sciences both because it is not peculiar to the social sciences - witness astronomy - and because the distinction between a controlled experiment and uncontrolled experience is at best one of degree. No experiment can be completely controlled, and every experience is partly controlled, in the sense that some disturbing influences are relatively constant in the course of it."

— Milton Friedman in Essays in Positive Economics, addressing a common fallacy made by Austrians on methodology (although it wasn’t directed at Austrians).

(Source: econ.umn.edu)

Quote
May 17, 2012
47 notes
"In the ideal socialist state, power will not attract power freaks. People who make decisions will show no slightest bias toward their own interests. There will be no way for a clever man to bend the institutions to serve his own ends. And the rivers will run uphill."

— David Friedman, The Machinery of Freedom (1969)

(Source: libertarians-and-stoya, via whakatikatika)

Quote
May 10, 2012
1,110 notes
"While you are celebrating Obama publicly making comments supporting gay marriage, his actual policies are putting queer and transgender people at risk. While you are signing Think Progress forms thanking Obama for making comments an interview, transgender women in immigration detention centers face extraordinarily high risks of rape because of Obama’s stances on deportation and PREA. While you are saying Obama has your vote because he said something sensible, B Manning, a member of the LGBTQ community, faces the death penalty for blowing the whistle on war crimes."

— Nathan Goodman (via socraticapology)

Text
May 06, 2012

Recessions are a monetary phenomenon?

This is a great extract from a blog post I found at “Worthwhile Canadian Initiative” by Nick Rowe. I’ll probably use this in my next YT video on recessions.

Robinson Crusoe doesn’t use money. If Robinson Crusoe has a bad harvest, his GDP will drop. It’s conceivable he might even work less, if there is less to harvest. But is that a recession?

Well, you could call that a recession if you like. But it is missing one very distinctive feature that we normally associate with recessions.

In a recession, it gets harder to sell stuff, and easier to buy stuff. It takes more effort to find a buyer, if you want to sell goods or labour; and it takes less effort to find a seller, if you want to buy goods or labour. Most economists look at an economy like that and say that goods and labour are in excess supply. In the olden days, we would say there’s a “general glut”.

It’s the excess supply of goods and labour that makes it a recession. The fall in output and employment is merely a typical symptom of that excess supply. Less stuff usually gets sold when there’s less demand than supply.

In fact, I can imagine an economy having a recession even while output was rising, even rising faster than normal. An economy could experience a general glut, and at the same time have a massive oil discovery that causes its output to rise. Unlikely maybe, but I can’t see why it couldn’t happen. Just have the central bank halve the money supply at the same time as oil production skyrockets. That should do it. If the discovery is big enough, the increased oil production and oil exports could be quite enough to offset the decline in the rest of GDP.

Inflation is a rising price of goods in terms of money. Because money, understood as the medium of account, is what we price goods in. I don’t see how anyone could sensibly talk about inflation without mentioning money.

A recession is an excess supply of goods in terms of money. Because money, understood as the medium of exchange, is what we buy goods with. I don’t see how anyone could sensibly talk about recessions without mentioning money.

We live in a monetary exchange economy. Sure, some parts of the economy are handled by barter, like production within the household, and exchanges with close neighbours. But the barter parts of the economy seem to do OK during a recession. Maybe even expand when the monetary economy falls, so people are forced to rely on their own production of vegetables, or that of their family, friends, and neighbours.

It’s the monetary exchange economy that suffers during a recession. It gets harder to sell stuff for money. It gets easier to buy stuff with money. There’s an excess supply of other (non-money) goods, and there’s its flip-side: there’s an excess demand for money.

I don’t see how anyone could sensibly talk about inflation without mentioning money. I don’t see how anyone could sensibly talk about recessions without mentioning money.

Photo
April 28, 2012
204 notes

(Source: whakahekeheke)

Text
April 28, 2012

Why I don’t believe in the non-aggression principle.

I used to be one of those “aggression/threats are inherently immoral” type of libertarian, but I’ve come to think that the argument is unpersuasive and fallacious, and that consequentialist arguments are the only valid ones. Here’s a few reasons why.

In a talk titled Libertarianism and Humility, Milton Friedman gave the following example. Suppose there is a man about to jump off a bridge in order to commit suicide. Of course, you try your hardest to persuade him not to, but suppose you couldn’t. Are you justified in using coercion to stop him?

Whether aggression feels justified often depends on how serious the consequences are/how extreme the circumstance is. Suppose market anarchism was unworkable and everyone knew this (I don’t believe this, but just suppose), and there was no state. I would feel justified in going from house to house, taking payment by force to fund a legal and defence monopoly - if that was the price for avoiding chaos and societal collapse. In short, the argument from the NAP doesn’t work against minarchists.

It might be a moral wrong to use force in one circumstance, but it doesn’t follow that this standard can be applied to all others. See Stefan Molyneux’s Against me argument in which he makes this fallacy of removing context from an act of aggression. I see similar decontextualisation (not a real word, but it should be) in Hans Hermann Hoppe’s Argumentation Ethics - the idea that by engaging in debate you are conceding certain libertarian ethical prescriptions. The fallacy is the same: just because you hold this value in the context of a debate, it doesn’t make you inconsistent for holding a different value in a different context. (It’s also an appeal to hypocrisy, which is an ad hominem fallacy)

I think this extends to the broader point that deontology matches our intuitive morality better for small scale situations and consequentialism for larger scale ones. When there is little to be lost, we prefer principles, but when a policy can affect society’s aggregate utility, you can’t apply that same deontological morality.

Another fallacy in the Against me argument is saying that, “if you wouldn’t coerce me, you’re a hypocrite to think anyone else should”. This is another fallacy of decontextualisation. For example, I wouldn’t like to become a builder, it’s a line of work that I wouldn’t enjoy, but it doesn’t make me hypocritical if I hire builders. I support the idea of a legal system based on private defence agencies and private arbitrators, but does it make me a hypocrite if I would personally not want to work for a private court or defence firm? In the same way, if someone is uncomfortable with personally coercing you, it doesn’t make them a hypocrite if they advocate you being taxed.

NAP-based arguments against taxation, for example, rely on thought experiments which rely on how “moral” things seem on the surface.The problem is that there are many things that seem wrong on the surface, that end up being morally justified. Is it morally justified to ether a person, knock them out, cut open their body, let their blood spurt out and cut out a body part? Almost everyone would intuitively say no. But what if the body part was diseased and this person had consented to the operation? Thought experiments are often intuition pumps, and don’t help in deciding whether something is desirable or not.

Someone might say, “people need to be free to choose, otherwise there’s no virtue in people doing the right things.” But that doesn’t apply to the potential coercer. Coercion doesn’t destroy choice, it just shifts it from the coerced to the coercer - so “free choice” justifications (also known as “virtue ethics”) for the non-aggression principle fall short. I may be taking away any possible “virtue” from the person’s choice if I coerce the person not to commit suicide, but isn’t there “vice” in me choosing not to prevent something considered highly undesirable from happening?

In Friedman’s example of the man trying to commit suicide, the consequences are extreme, which is why most people don’t feel their moral intuitions strongly points towards leaving the person alone (even if that is the conclusion you come to) - and which is why we can’t use the NAP per se as an argument against statist economic policies, because the consequences are huge, affecting hundreds of millions of people.

Slogans like “taxation is theft” are also contextual. “Theft” relies on an idea of who the legitimate owner is. In a communist society, everything produced is common property, so hoarding stuff for yourself is theft, relative to communist property norms. The fruits of your labour being commonly owned is theft, relative to libertarian property norms. When you say “taxation is theft” you are assuming libertarian property norms. In the same way a private defence agency might enforce libertarian property norms, agents of the state that enforce taxation are just enforcing a certain set or property norms, and so can’t be said to be objectively committing theft.

I agree with Friedman that the belief that complex societal problems can be solved with simple, sweeping moral principles is believing that difficult problems have easy answers.

If you’re still not convinced, David Friedman (son of Milton and a market anarchist economist) has also written an excellent addition to his book The Machinery of Freedom arguing against deontological libertarian arguments.

Quote
April 05, 2012
3 notes
"Perhaps the best illustration of the current misconceptions of the individualism of Adam Smith and his group is the common belief that they have invented the bogey of the “economic man” and that their conclusions are vitiated by their assumption of a strictly rational behavior or generally by a false rationalistic psychology. They were, of course, very far from assuming anything of the kind. It would be nearer the truth to say that in their view man was by nature lazy and indolent, improvident and wasteful, and that it was only by the force of circumstances that he could be made to behave economically or carefully to adjust his means to his ends. But even this would be unjust to the very complex and realistic view which these men took of human nature. Since it has become fashionable to deride Smith and his contemporaries for their supposedly erroneous psychology, I may perhaps venture the opinion that for all practical purposes we can still learn more about the behavior of men from the Wealth of Nations than from most of the more pretentious modern treatises on “social psychology."

— Hayek in Individualism and Economic Order (via abstractminutiae)

Text
April 03, 2012

A Keynesian fallacy on interest rates.

This is an addendum to my recent video which can be found here.

A Keynesian might call foul to the argument by saying the interest rate equilibrates the demand for money and the real money supply - the money supply divided by the price level. However, this doesn’t solve the problem.

Expanding the money supply has the long-run effect of increasing the price level by the same proportion, so has no effect on the real money supply (if we hold output constant for simplicity).

Yet inflation due to an expanding money supply does affect the nominal interest rate due to the Fisher effect* (it increases). So the interest rate increases without any change in liquidity preferences (the demand for money) or the real money supply, in the long-run.

However, if we view the interest rate as equilibrating the market for loanable funds, then the Fisher effect makes sense. Inflation imposes a cost on lenders and an equal benefit on borrowers, shifting the demand and supply curves up by the same amount - increasing the nominal interest rate and leaving the quantity of loanable funds consumed unchanged.

The Keynesian money market

The Keynesian money market

The price of money according to Monetary Disequilibrium Theory (in my opinion the correct view):

Disequilbrium in the money market

The above shows the result of disequilbrium following an expansion of the money supply. (Note how the price of money is represented as the inverse of the price level, something that I argued for in the video).

*The reasoning behind the Fisher effect goes something like this:

  • The real interest rate is what lenders and borrowers consider in transactions, so lenders will change the nominal interest rate based on expected inflation to achieve the real interest rate wanted for any given transaction.
  • Real interest rate = Nominal interest rate - Inflation
  • If we hold the real interest rate constant, then a rise in inflation must involve an equal rise in nominal interest rates.
Photo
February 16, 2012
109 notes
whakahekeheke: Wittgenstein on Logic and Contradiction  If you’ve had to study analytic philosophy, you’re probably aware of the special status “contradiction” has in the academic field of logic.  Classical logicians treated contradictions with the principle of explosion: from a contradiction, anything and/or everything follows: If a contradiction is true, then you can say anything is true. And that would ruin everything. Human society would fall into chaos. The philosophers had to do something! To this end, philosophers in a mysterious capacity called “logician” spent many hours laboring over supposedly difficult contradictions to resolve like the Liar Paradox (is “this sentence is a lie” a true statement????). They found this task hard and and thus constructed elaborate systems of mathematical-looking symbols in attempts to get around the problem. Some decided they had succeeded. Woo. Others knew they had failed and embraced a “truth” in pure, actual contradictions and they thus fell into trivialism (‘all propositions of all kinds are true!’), strong paraconsistency (‘contradictions may be true!’), dialetheism (‘some contradictions are true!’), polylogism (‘truth is relative to race, culture, nationality, or class!’) and similarly silly ideas that still amazingly persist in current academic philosophy. Wittgenstein answers this supposedly difficult “Liar Paradox” and at the same time shows the pointless nature of classical logician’s projects, their obsession with contradictions, and their failed principle of explosion. I’ll let him speak for himself: Think of the case of the Liar. It is very queer in a way that this should have puzzled anyone — much more extraordinary than you might think… Because the thing works like this: if a man says ‘I am lying’ we say that it follows that he is not lying, from which it follows that he is lying and so on. Well, so what? You can go on like that until you are black in the face. Why not? It doesn’t matter. It is just a useless language-game, and why should anyone be excited? … Suppose I convince Rhees of the paradox of the Liar, and he says, ‘I lie, therefore I do not lie, therefore I lie and I do not lie, therefore we have a contradiction, therefore 2 x 2 = 369.’ Well, we should not call this ‘multiplication,’ that is all. LFM 21-22 We exclude contradictions from language; we have no clear-cut use for them, and we don’t want to use them. RPP II §290 To understand how Wittgenstein can see clearly to dismiss these supposed problems, we must recall the central theme of almost all Wittgenstein’s work - natural language and its relation to human thought. In order to be able to draw a limit to thought, we should have to find both sides of the limit thinkable (i.e. we should have to be able to think what cannot be thought). It will therefore only be in language that the limit can be drawn, and what lies on the other side of the limit will simply be nonsense. TLP Pref. Thought can never be of anything illogical, since, if it were, we should have to think illogically. … It used to be said that God could create anything except what would be contrary to the laws of logic. – The truth is that we could not say what an ‘illogical’ world would look like. … It is as impossible to represent in language anything that ‘contradicts logic’ as it is in geometry to represent by its coordinates a figure that contradicts the laws of space or to give the coordinates of a point that does not exist. TLP 3.03-3.032 The limits of my language mean the limits of my world. … Logic pervades the world: the limits of the world are also its limits. So we cannot say in logic, ‘The world has this in it, and this, but not that.’ For that would appear to presuppose that we were excluding certain possibilities, and this cannot be the case, since it would require that logic should go beyond the limits of the world; for only in that way could it view those limits from the other side as well. We cannot think what we cannot think; so what we cannot think we cannot say either. TLP 5.6-5.61 In giving explanations I have already to use language full-blown … but then how can these explanations satisfy us? - Well, your very questions were framed in this language; they had to be expressed in this language, if there was anything to ask! One might think: if philosophy speaks of the use of the word “philosophy” there must be a second-order philosophy. But it is not so: it is, rather, like the case of orthography, which deals with the word “orthography” among others without then being second-order. PI I 120-121 It is the use outside mathematics, and so the meaning of the signs, that makes the sign-game into mathematics. RFM 5.2 As the Wittgensteinian linguist Noam Chomsky put it: Factual beliefs and common-sense expectations also play a role in determining that a thing is categorizable and hence namable. Consider Wittgenstein’s disappearing chair. In his terms, we have no “rules saying whether one may use the word ‘chair’ to include this kind of thing” (PI, p.38). Or to put it differently, we keep certain factual assumptions about the behavior of objects fixed when we categorize them and thus take them as eligible for naming or description. Chomsky. Reflections on Language (1975) An actual, literal contradiction as such violates the presuppositions - the factual assumptions about the behavior of objects - of any language meant to be taken literally. If a language game does not presuppose non-contradiction, it is useless if meant to be taken literally. That is all one really needs to say. The claim that “some pure contradictions are literally true” is nonsense. It is itself a performative contradiction. It is nonsense. One does not need to construct elaborate systems of mathematical symbols to figure this out (and doing so doesn’t help).  Of course, contradictions can be useful in poetry, as literary devices, in mysticism, in religion or what have you. Furthermore, in programming and mathematics, the principle of explosion is often an impractical way to deal with contradictions (thus weak paraconsistency is sometimes useful). But this is not the issue at hand.

whakahekeheke:

Wittgenstein on Logic and Contradiction 

If you’ve had to study analytic philosophy, you’re probably aware of the special status “contradiction” has in the academic field of logic. 

Classical logicians treated contradictions with the principle of explosion: from a contradiction, anything and/or everything follows: If a contradiction is true, then you can say anything is true. And that would ruin everything. Human society would fall into chaos. The philosophers had to do something!

To this end, philosophers in a mysterious capacity called “logician” spent many hours laboring over supposedly difficult contradictions to resolve like the Liar Paradox (is “this sentence is a lie” a true statement????). They found this task hard and and thus constructed elaborate systems of mathematical-looking symbols in attempts to get around the problem.

Some decided they had succeeded. Woo. Others knew they had failed and embraced a “truth” in pure, actual contradictions and they thus fell into trivialism (‘all propositions of all kinds are true!’), strong paraconsistency (‘contradictions may be true!’), dialetheism (‘some contradictions are true!’), polylogism (‘truth is relative to race, culture, nationality, or class!’) and similarly silly ideas that still amazingly persist in current academic philosophy.

Wittgenstein answers this supposedly difficult “Liar Paradox” and at the same time shows the pointless nature of classical logician’s projects, their obsession with contradictions, and their failed principle of explosion. I’ll let him speak for himself:

Think of the case of the Liar. It is very queer in a way that this should have puzzled anyone — much more extraordinary than you might think… Because the thing works like this: if a man says ‘I am lying’ we say that it follows that he is not lying, from which it follows that he is lying and so on. Well, so what? You can go on like that until you are black in the face. Why not? It doesn’t matter. It is just a useless language-game, and why should anyone be excited? … Suppose I convince Rhees of the paradox of the Liar, and he says, ‘I lie, therefore I do not lie, therefore I lie and I do not lie, therefore we have a contradiction, therefore 2 x 2 = 369.’ Well, we should not call this ‘multiplication,’ that is all.

LFM 21-22

We exclude contradictions from language; we have no clear-cut use for them, and we don’t want to use them.

RPP II §290

To understand how Wittgenstein can see clearly to dismiss these supposed problems, we must recall the central theme of almost all Wittgenstein’s work - natural language and its relation to human thought.

In order to be able to draw a limit to thought, we should have to find both sides of the limit thinkable (i.e. we should have to be able to think what cannot be thought). It will therefore only be in language that the limit can be drawn, and what lies on the other side of the limit will simply be nonsense.

TLP Pref.

Thought can never be of anything illogical, since, if it were, we should have to think illogically. … It used to be said that God could create anything except what would be contrary to the laws of logic. – The truth is that we could not say what an ‘illogical’ world would look like. … It is as impossible to represent in language anything that ‘contradicts logic’ as it is in geometry to represent by its coordinates a figure that contradicts the laws of space or to give the coordinates of a point that does not exist.

TLP 3.03-3.032

The limits of my language mean the limits of my world. … Logic pervades the world: the limits of the world are also its limits. So we cannot say in logic, ‘The world has this in it, and this, but not that.’ For that would appear to presuppose that we were excluding certain possibilities, and this cannot be the case, since it would require that logic should go beyond the limits of the world; for only in that way could it view those limits from the other side as well. We cannot think what we cannot think; so what we cannot think we cannot say either.

TLP 5.6-5.61

In giving explanations I have already to use language full-blown … but then how can these explanations satisfy us? - Well, your very questions were framed in this language; they had to be expressed in this language, if there was anything to ask! One might think: if philosophy speaks of the use of the word “philosophy” there must be a second-order philosophy. But it is not so: it is, rather, like the case of orthography, which deals with the word “orthography” among others without then being second-order.

PI I 120-121

It is the use outside mathematics, and so the meaning of the signs, that makes the sign-game into mathematics.

RFM 5.2

As the Wittgensteinian linguist Noam Chomsky put it:

Factual beliefs and common-sense expectations also play a role in determining that a thing is categorizable and hence namable. Consider Wittgenstein’s disappearing chair. In his terms, we have no “rules saying whether one may use the word ‘chair’ to include this kind of thing” (PI, p.38). Or to put it differently, we keep certain factual assumptions about the behavior of objects fixed when we categorize them and thus take them as eligible for naming or description.

Chomsky. Reflections on Language (1975)

An actual, literal contradiction as such violates the presuppositions - the factual assumptions about the behavior of objects - of any language meant to be taken literally. If a language game does not presuppose non-contradiction, it is useless if meant to be taken literally. That is all one really needs to say. The claim that “some pure contradictions are literally true” is nonsense. It is itself a performative contradiction. It is nonsense. One does not need to construct elaborate systems of mathematical symbols to figure this out (and doing so doesn’t help). 

Of course, contradictions can be useful in poetry, as literary devices, in mysticism, in religion or what have you. Furthermore, in programming and mathematics, the principle of explosion is often an impractical way to deal with contradictions (thus weak paraconsistency is sometimes useful). But this is not the issue at hand.

Photo
January 15, 2012
95,507 notes
panasonicyouth: thegoddamazon: I cannot get over Achilles’ face in this painting. Holy shit.  He’s totally like: “Oh god, mom, put a fucking shirt on, I mean, what are you even doing? Can’t you see I’m busy lamenting the death of my boyfriend? Like I really need to see your tits at a time like this— YOU’RE SO EMBARRASSING MOM GAWD.” And the rest of the Greeks are jazz-handsing in the background. They’re all ‘WOAH LOOK AT THAT TOTALLY WICKED SET OF TITS— I MEAN ARMOUR. WOAH’ Let me just say that this is the best interpretation of a painting I have ever seen ^^^^ no mom mom no NO Reblogging this every time I see it. LMFAOOOOOO AHAHAHAHSDFJKHASDFAHADF

panasonicyouth:

thegoddamazon:

I cannot get over Achilles’ face in this painting. Holy shit.

 He’s totally like: “Oh god, mom, put a fucking shirt on, I mean, what are you even doing? Can’t you see I’m busy lamenting the death of my boyfriend? Like I really need to see your tits at a time like this— YOU’RE SO EMBARRASSING MOM GAWD.”

And the rest of the Greeks are jazz-handsing in the background. They’re all ‘WOAH LOOK AT THAT TOTALLY WICKED SET OF TITS— I MEAN ARMOUR. WOAH’

Let me just say that this is the best interpretation of a painting I have ever seen

^^^^

no mom

mom no

NO

Reblogging this every time I see it. LMFAOOOOOO

AHAHAHAHSDFJKHASDFAHADF

(Source: lemon-sprinkles, via kaleidoscopicmind)