Re: Piorot on Madrick - Winslow's blast

["John M. Legge" <jlegge@xxxxxxxxxxxxxx>]

Paul, Ted:

1.  There is no need to invoke any mystical source of uncertainty for a
process to be non-ergodic.  Ergodicity is the special case, with
independent, replicable trials: all processes where history counts are
non-ergodic.

2.  IF you concede the existence of God, and attribute to Her the powers of
omnipotence and omniscience then She must be perfectly aware of the future
as well as the past.  This is the issue that so bedevilled the Calvinists
and triggered the philosophical arguments that Ted thinks that I should be
convinced by.

3.  I have no reason to believe that the future is indeterminate, even if I
know that I lack the power to predict it.  I know that I have free will, but
as far as I can tell the rest of you are :-) fictitious inventions of the
CSF computer and all your responses are wholly pre-programmed.  (I also know
that serious advocates of the preceding proposition are generally considered
incapable of looking after themselves and I shall not attempt to maintain it
except polemically.)

4.  Among my conscious motivations is that my actions should take into
account the future of mankind and that discussion with people on the CSF
list may contribute to this.  I know that I participate on the list and in
doing so assume a similar motivation among the list members, but I don't
know and cannot know whether my participation in general or in particular is
an act of free will or the consequence of the inexorable working of physical
and chemical laws.  I prefer the former but I cannot exclude the latter, and
so I am not prepared to go beyond it in developing my arguments.

5.  I am aware of Paul's concern that conceding the validity of complexity
theory would open the door to the Austrian argument that the market is a
better God than any individual and so we should trust the market to lead us
into the promised land.  To this I offer two counter arguments:
(a)  The theory of complex evolutionary landscapes as developed by Kauffman
building on prior work on the physics of spin glasses shows that there is a
quasi-infinity of possible states for an economy to naturally evolve into
and consequently a near-infinitesimal possibility that the result will be a
global optimum or anything like it.  This is consistent with Keynes's
assertion that an economy could be at an equilibrium state with unemployed
resources.
(b)  The assertion that evolution is benevolent was dealt with so thoroughly
by Monod (Monod, Jacques, "Hasard et la nécessité"; English Title "Chance
and necessity: an essay on the natural philosophy of modern biology"/
Translated from the French by Austryn Wainhouse, New York: Knopf, 1971) that
it would be impudent of me to enlarge upon it.  Plague and cholera are as
much evolutionary outcomes as was Ludwig von Mises.  Those who discuss
evolutionary outcomes before reading Chance and Necessity are boastfully
ignorant.
    Paul should not be concerned with that particular busted flush.

JML


> -----Original Message-----
> From: pkt-owner@xxxxxxxxxxxxxxxx [mailto:pkt-owner@xxxxxxxxxxxxxxxx]On
> Behalf Of Ted Winslow
> Sent: Tuesday, 17 September 2002 7:02 AM
> To: Paul Davidson; John M. Legge
> Cc: pkt@xxxxxxxxxxxxxxxx
> Subject: Re: Piorot on Madrick - Winslow's blast
>
>
> Paul wrote:
>
> > All of this implies both Ted and John are talking about
> ergodic stochastic
> > processes where even the probability of changes in the
> universe barrel are
> > already predetermined .
> >
> > both appear to be talking about epistimological
> uncertainty-- the kind of
> > uncertainty that the Austrians talk about-- and thus
> believe that the market
> > place can predict the outcome, where the limitations of
> each human's "data
> > collection ability and ...computing resources" [to use
> John's phrase] are
> > limited. [Thr kind of uncertainty that  Knight , Simon or
> Sargent talks
> > about.]
> >
> > When one speaks of  fundamental uncertainty (or nonergodic
> uncertainty) one is
> > talking about ontological uncertainty where the future is
> not predetermined
> > (or preprogrammed) by that great computer programmer in the
> sky named God.
>
> Not me Paul.  I've been trying unsuccessfully to persuade
> John that his
> account of determinism is self-contradictory because it
> assumes both that
> things are fully "predetermined" - both the future winning
> lottery number
> and the future holder of the ticket with that number are, on his
> assumptions, predetermined - and that they are not fully
> predetermined so
> that a contemporary agent, e.g. "God", can _choose_ to buy the winning
> ticket and make herself the future winner.  When I point this
> out, however,
> his only response is to repeat the self-contradictory claim:
>
> > God, or an economically rational man, knowing how the balls
> were stacked in
> > the barrel and the exact operation of the selector lever,
> could predict the
> > numbers before the draw and be able to buy the winning
> numbers, guaranteeing a
> > win.
>
> The ontology I'm elaborating (Whitehead's - I think there are
> good reasons
> for believing it's also the one Keynes adopted after
> abandoning the one
> underpinning the argument in A Treatise on Probability)
> produces meanings
> for "cause" and "determine" very different from those produced by the
> ontology underpinning complexity theory.
>
> Moreover, as conceived by Whitehead, this idea leaves room for both
> self-determination ("free will") and an irreducible element
> of indeterminism
> (this provides the ultimate ontological foundation for Whitehead's
> "frequency theory" of probability - a theory in which the
> probabilities
> constantly change because of "internal relations").  Both
> these aspects mean
> that the future is not fully predetermined.  This is helpful
> since at the
> very least it makes the idea consistent with the obvious fact
> that human
> actions are to some degree self-determined and do affect what
> occurs (even
> to deny this is to affirm it i.e. denial necessarily implies
> an agent - the
> one doing the denying - who is to some degree self-determined).
>
> (By the way, even if, as Ian suggests, you conceive
> complexity theory so as
> to allow for an irreducible aspect of indeterminism you don't
> get rid of the
> logical difficulty to which I'm pointing.  Self-determined
> behaviour - e.g.
> choosing to buy a particular lottery ticket - isn't
> undetermined behaviour.)
>
> So on these premises even a Laplacean demon couldn't know for
> certain what
> was going to happen in the future.
>
> It's true that, on these premises, the origin of uncertainty
> in the sense of
> "we simply do not know" is the limitations this ontology creates for a
> finite mind.  Internal relations mean that to fully know any
> particular
> thing you would have to know everything because through
> internal relations
> the "whole" is embodied in the "part" i.e. the part is, in
> this sense, the
> whole. Such knowledge is beyond the capacity of finite minds
> whether taken
> individually or collectively (as in "the market place" - in
> fact "the market
> place" makes finite collective understanding more limited
> than it need be
> for, omong other reasons, those pointed to be Keynes in "The End of
> Laissez-Faire" e.g. "it may even be to the advantage of individuals to
> aggravate the disease ['uncertainty and ignorance']").
>
> This is not, however, inconsistent with knowing something.
> One reason for
> this is that internal relations have differing degrees of
> stability so that
> for some purposes some of them can be "abstracted" from.  However, the
> farther into the future are the events we wish to know
> something about the
> fewer will be the relations we can reasonably treat as
> "given" in this sense
> and the more it will be necessary for us to know everything
> before we can
> know something. Some of these unknowable things follow from
> the current
> limitations of our finite knowledge.  We can't, for instance,
> know how our
> understanding of things we'll change in the future because if
> we knew this
> we would have already incorporated the changes into our present
> understanding.
>
> The stability of internal relations varies with the particular subject
> matter that is the object of study.  The phenomena of social life, for
> instance, issue from a much less stable set of internal
> relations than the
> phenomena which constitute the subject matter of astronomy.
> This is why, if
> this ontology is realistic, methods - e.g. the mathematics of
> complexity
> theory - that depend on a high degree of stability in these
> relations (so as
> to preserve the degree of identity in the "variables" that the valid
> application of the method requires) will have a much more
> limited range of
> valid application in economics than they do in astronomy.
>
> Uncertainty in this sense has implications for rational
> action.  These are
> set out by Keynes in a number of texts e.g. A Treatise on
> Probability p. 32,
> the correspondence with Townsend (XXIX, p. 224 ), Essays in
> Persuasion, p.
> xviii, and the passage I recently quoted from the end of "The
> Balance of
> Payments of the US."  Rational action in the face of such
> uncertainty is,
> within the limits set by the rational "optimistic
> hypothesis," "to allow
> caprice to determine us. (VIII, p. 32)"
>
>     "No one can be certain of anything in this age of flux and change.
> Decaying standards of life at a time when our command over
> the production of
> material satisfactions is the greatest ever, and a
> diminishing scope for
> individual decision and choice at a time when more than
> before we should be
> able to afford these satisfactions, are sufficient to
> indicate an underlying
> contradiction in every department of our economy.  No plans
> will work for
> certain in such an epoch.  But if they palpably fail, then,
> of course, we
> and everyone else will try something different.
>     "Meanwhile for us the best policy is to act on the
> optimistic hypothesis
> until it has been proved wrong.  We shall do well not to fear
> the future too
> much.  Preserving all due caution in our own activities, the
> job for us is
> to get through the next five years in conditions which are
> favourable and
> not unfavourable to the restoration of our full productive
> efficiency and
> strength of purpose, of our prestige with others and of our
> confidence in
> ourselves.  We shall run more risk of jeopardising the future
> if we are
> influenced by indefinite fears based on trying to look ahead
> further than
> any one can." (XXVII, pp. 445-6)
>
> Notice the explicit association here of "uncertainty" with "flux and
> change."  This is consistent with the explanation of
> uncertainty in terms of
> the ontological hypothesis of "organic unity" - "internal relations."
>
> So the problem comes not from the "uncertainty" itself but from the
> irrational psychological reaction to it.  Irrationally influenced by
> unconscious phantasy, individuals "try to look ahead further
> than any one
> can" and fall victim, under the same influence, to irrational
> "indefinite
> fears."  If they can't succeed in "hiding from themselves how
> little they
> foresee," they become irrationally pessimistic and "fear the
> future too
> much." "Animal spirits" dim, "enterprise" falters and, for a
> reason - an
> irrational "instinctive or conventional" "feeling about
> money" - itself
> rooted in unconscious phantasy, the "propensity to hoard" intensifies.
>
> >> Keynes cheerfully described people whose actions were not
> in accordance
> >> with his view of the world as acting irrationally, but
> that is what comes of
> >> having an Eton education.
> >
> >
> > No it comes of having a clear logical mind -- and trying to draw a
> > taxonomic distinction against the orthodox notion of
> rationality in his
> > time-- where rationality meant knowing the frequency distribution of
> > possible future events.
>
> You're continuing, I see, to attribute "scholasticism" in
> both Keynes's
> senses to Keynes.
>
> What John says ignores, among other things, the definition of
> irrationality
> I attributed to Keynes, the definition I've just used to
> elaborate Keynes's
> treatment of the irrational psychological reaction to
> uncertainty.  For
> Keynes, the irrational isn't even necessarily the mistaken, let alone
> whatever is "not in accordance with his [Keynes's] view of
> the world". It's
> beliefs and actions rooted in unconscious phantasy which are, for this
> reason, immune to rational critique.
>
> In your response to John, however, you still seem to be insisting that
> Keynes, in his conception of agents, only abandoned a
> particular mistaken
> notion of "rationality," namely, one that ignores the fact of
> "fundamental
> uncertainty" so that "rationality meant knowing the frequency
> distribution
> of possible future events," and that he continued to assume
> that agents were
> "rational" but in the sense that includes the assumption that
> agents can't
> know the frequency distribution of possible future events and
> know they
> can't know this (my understanding is that you substitute the
> word "sensible"
> for the word "rational" to make clear this difference between Keynes's
> axioms and the axioms underpinning "the orthodox notion of
> rationality").
>
> You seem, in other words, to be continuing to deny that
> Keynes assumes the
> "vast majority" of agents are to some significant degree
> irrational, in
> particular that they are irrational in the sense of
> "irrational" that I'm
> attributing to him. In the Guardian article you recently
> posted, however,
> you do use the word "irrational" to characterize the problem
> causing kind of
> liquidity preference.
>
> "Keynes saw that any [an?] irrational demand for liquidity as
> [was?] the
> cause of unemployment and depression in our otherwise wealth-producing
> enterprise economy."
>
> Do you now agree that Keynes treats the "vast majority" of agents as
> "irrational" either in the sense I've specified or in some
> other sense?
>
> If this strikes you as a "beating your wife" question, could
> you at least,
> as seems required by your views on Keynes, "axioms" and
> "taxonomy," spell
> out precisely what are the axioms about agents that you are
> attributing to
> Keynes?  Are they consistent with describing a "demand for
> liquidity"  as
> "irrational"?
>
> Ted
>