Re: In defense of Paul D [reply to]

["John Gelles" <jjgelles@xxxxxxxx>]

            "... the nonergodicity 'axiom' [allows proof] that we
            can expect no single formula to describe what goes
            on in any particular economic system.  ...[Professor
            Paul Davidson's fight, with the defenders of classical
            and neo-classical economic doctrines,  is the good
            fight against all]  who believe in substantive, universal,
            invariant algorithms for prediction and explanation
            [of economic history].

            " [Paul Davidson] is trying to justify a more ad hoc
            approach ... [to economic policy], using the theorists'
            language, that gains their respect with its technical
            proficiency.  So, it serves a purpose as a rhetorical
            strategy directed at methodological ends [not unlike
            others who write to PKT, including Gelles] ...
            (at least compared to most neoclassicals)."

                   -- Approximate comment today on PKT by
                       Jonathan Halvorson, Dept. of Philosophy,
                       Columbia University

            Johnathan's position, above, occurred to me many
            times. And, last night, before receiving his words,
            I had a reasonable reply to it:

                The idea of nonergodicity is nowhere expressed
                in common discussion of political economy. Nor
                is "ergodic". What Paul describes as nonergodic,
                is described (better, in my opinion,) in the MIT
                Dictionary of Economics, as:

                      UNCERTAINTY.  A situation in which the
                      likliehood of an event occurring is NOT known
                      at all.   That is, no PROBABILITY distribution
                      can be attached to the outcomes.

                      If the event in question is an investment in a
                      project, uncertain returns would mean that the
                      conceivable returns will be known but their
                      probability of occurrence will not be known.

                      In such circumstances it is necessary to resort
                      to some rule based on the investor's attitude to
                      the balance of gains and losses in the event that
                      a particular choice is taken and a particular set
                      of circumstances occur.

                          (See DECISION THEORY,  RISK.)  See
                       McKenna, C.J., "The Economics of Uncertainty",
                       Harvester  Wheatsheaf, London (1986).

                       --------------- end MIT Dictionary -----------

                Note, MIT, above, talks of "situations",  "events",
                "circunstamces" and "choices"  as the THINGS that
                are uncertain, or  POSSIBLE  (yet incapable of
                good measure in terms of  their odds or probability).

                MIT does not talk of an axiom that would deny
                validity to all deduction in the social sciences.

                True enough, induced hypotheses, useful in the
                exact sciences, persist over a longer measured time
                than in the social sciences.  But social science offers
                induced hypotheses that we use with good effect.

                What is wrong with conservative economics is
                not its methods -- but its present day values. Its
                values need modernizing in terms of what is
                possible if we want to reduce poverty, pollution
                and rage.

                There can be no technical proficiency in a
                philosophical oxymoron -- which is what the
                ergodicity argument brings to social science.

                It says that because "the more we learn the
                more we know how much remains unknown",
                we must fear to use hypotheses that may
                be replaced.  If this were true, we would be
                afraid generalize the nonergodicity axiom.

                In short, nonergodic is self-contradictory.
                If it's true it's false. And if it's false, it's false.
                And if its neither, it's no more than another
                line in an Escher drawing, no more than a
                self-referential paradox.

                Now in the exact sciences, (from which it was
                stolen,) the reverse is true.  Here, the persistent
                life of some principles, such as Newton's laws,
                opens up the possibility of ergodic systems.
                These being common, caution must be
                exercised when they overlap uncertainty --
                as in the construction of bridges.
                        Bridges are built to survive possible
                storms, quakes and terrorist attack, whose
                probabilities of ocurrence is not measurable.

                Economics and the social sciences have no
                ergodic systems.  All their knowledge has a
                short half-life.
                        Yet progress in medicine (the original
                mixture of art, science and social science),
                and the business and social sciences, has
                been significant.
                        It was all made by an avoiding an
                axiomatic view of what could be done.
                I am content to bury this matter as
                unresolvable.


                Paul and I have a duty to consider tax,
                monetary and fiscal policy in our political
                approach to prosperity and reform.

                It is conceivable that Keynesian reform
                will have to rescue America from the next
                recession.  If our goal remains to reduce
                (and eventually end) forced unemployment
                and poverty, we should be prepared on
                these concrete issues.

                Can we really expect to win votes from
                businessmen, workers, rich. or poor, by
                reducing economic advice to philosophical
                conundrums?

                Let us start at the more concrete level of tax
                effects. Current tax structures hit the middle
                class. The rich have paid Congress, lawyers and
                accountants to make it that way. Do we not
                owe the middle class Lerner's thought -- that
                government can afford social security and
                national defense without tax revenues --
                PROVIDED THAT:
                        the anti-inflationary effect of middle
                        class taxation can be found in a more
                        middle-class friendly system?  (Such
                        as indexed wealth saving accounts.)

                If we do, let Paul and Professor James
                Galbraith speak to that issue. These two
                scholars speak to the great issues of
                unemployment and disparity. But their
                voices are not heard above the news and
                noise of higher capital asset and share prices.

                The "wealth effect" of initial public offerings
                has temporarily created a "new economy".
                We must get prepared today for a return to
                the "old economy" and its potential for a really
                ugly "misery index".

                Can we not do this on this forum?  Disparity,
                as strange as it is, may give us the free internet
                university.  Are we prepared to take full
                advantage of such new opportunities?

                John Gelles
                 email    1944@xxxxxxxx
                     url    http://1944.org

                    thoughts on a first free internet university:
                     url    http://1944.org/iu-home.htm