ergoproxy

12 lat temudiscuss

> you acknowledge that it is the individual behaviors that are necessary for the complex structures to exist.

Monopoly pricing and price fixing are not any of the individual behaviors necessary to get a market price, and that's all I was arguing.

In the absence of monopolies and cartels, market prices will emerge from individual behaviors, without any one individual having the power to set the price.

> a competitive market is a meaningless phantasy that cannot possibly exist.

If competitive markets don't exist empirically, that's not a flaw in the theory of Classical economics, it is merely a symptom of corrupt culture and politics. It means we don't really have a free-market system---

What we have today is more akin to Mercantilism. And with income inequality increasing at an accelerating rate, our society will soon devolve back into Feudalism.

> Your attempted counter-argument...

My argument isn't with you. My argument is strictly anti-monopoly and pro-competition.

ergoproxy

12 lat temudiscuss

> That makes no sense. If all participants cannot influence the price, then where does the price come from?

You are assuming that the dynamics of an economic system is nothing but a summation of the individual dynamics. This assumption excludes the possibility of the emergence of complex structures from simple individual behaviors.

I strongly suggest you take a look at the subjects of Complex Systems[1] theory, Nonlinear dynamics[2], Catastrophe theory[3], and Chaos theory[4]---all consistent, mathematically well grounded theories which allow for the emergence[5] of aggregate behavior that cannot be explained simply in terms of individual behaviors. There is also the emerging field of Complex economics[6]. Donald Saari wrote an introductory paper called the Mathematical Complexity of Simple Economics[7].

[1] http://en.wikipedia.org/wiki/Complex_systems [2] http://en.wikipedia.org/wiki/Dynamical_system [3] http://en.wikipedia.org/wiki/Catastrophe_theory [4] http://en.wikipedia.org/wiki/Chaos_theory [5] http://en.wikipedia.org/wiki/Emergence [6] http://en.wikipedia.org/wiki/Complexity_economics [7] http://www.ams.org/notices/199502/saari.pdf

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12 lat temudiscuss

I was speaking specifically of monopoly power, i.e., the power to raise or lower prices in the market. And no, neither government nor private firms should have this power. Monopoly power is an example of market failure. In a competitive market, all participants are price takers, i.e., passive agents incapable of changing the market price. In perfect competition, in every transaction, at least one party is better off, and nobody is worse off. That all changes when somebody gets the power to set prices; then transactions leave some people worse off.

There are kinds of power besides monopoly power, such as coercive power. WRT coercive power, that's best monopolized by a democratic government accountable to its people. And government can and should use it's monopoly on coercive power to promote competitive markets. Instead, its been empowering monopolies.

But people today aren't well informed enough to make demands on government to promote competition or hold politicians accountable. They're given bogus ideologies (neoclassicism, Keynesianism, etc.). And they're given the false choice between Left and Right.

The terms "Left" and "Right" are not merely overly simplistic. They're total falsehoods, fabricated by self-interested parties to delude people into thinking they either need to give government more monopoly power or else give private firms more monopoly power. There is a third choice that's left unmentioned: Government can promote competition.

ergoproxy

12 lat temudiscuss

I have a different take on this article than most. I'm a proponent of Classical economics, and I reject all modern schools of economics--neoclassical, Austrian, Keynesian, etc.

Classical thinkers like Adam Smith expounded how rational self-interest and competition together lead to economic prosperity. There's a balancing act going on between self-interest and competition--competition is the economic faculty that restrains self-interest.

Only in perfect competition do we get Pareto efficiency--the state in which it is impossible to make any one individual better off without making at least one individual worse off.

Unfortunately, modern schools of economics have diminished the role of competition. Keynesianism lauds government monopoly power; while neoclassicism and Austrianism foster private monopoly power. Both are evil. The result has been a state of affairs wherein the vast majority of people are getting worse off.

WRT government intervention in the markets, Adam Smith would not oppose intervention that fosters competition and stifles monopoly. The goal of the 1890 Sherman Anti-Trust Act was to foster competition, not to diminish "economic freedom."

"Economic freedom" is a mostly meaningless buzzword that's thrown around by both libertarians and socialists. Indices of "economic freedom" as compiled by the Heritage Foundation and the Wall Street Journal serve no other purpose than propaganda.

It's impossible to divorce politics from economics in the real world. Adam Smith understood this. The subject used to be called "politico-economics."

Today, the Left favors reforms to give government more monopoly power. While the Right favors reforms that give firms more monopoly power. Until people start to wake up and realize all monopoly power is evil and what we need instead is more competition, things will continue to decline.

ergoproxy

12 lat temudiscuss

My Erdős Number is 4:

  Me->Mukkai S. Krishnamoorthy->Joseph E. Flaherty->David C. Arney->Paul Erdős

For a time, it appeared to be 2, but Paul Erdős and the Erdős-1 mathematician with whom I collaborated ultimately withdrew their paper, because they found their results were similar to a previously published paper.

I've also appeared on a local Philadelphia PA TV show with newscasters who interviewed Kevin Bacon. Not sure if this gives me a finite Bacon Number, since it was TV (not a movie) and it was non-fiction. If so, then I have the finite Erdős–Bacon Number of 6.

ergoproxy

12 lat temudiscuss

If you sent a Wuphf (pronounced "woof") to someone, the message went to the recipients' home phone, cell phone, email, fax, pager, Facebook, twitter, and AIM.

The original WUPHF.com beta page is archived at: https://web.archive.org/web/20101122015439/http://www.wuphf....

And WUPH.com's business plan is archived at: https://web.archive.org/web/20101122022512/http://www.wuphf....

On the one hand, WUPH.com was a satire of Silicon Valley in a comedy sketch on an episode of "The Office" called "The Whistleblower" that aired in May 2010. So HootSuite, IFTTT, &c, &c, are all great examples of life imitating art (anti-mimesis).

On the other hand, the WUPH.com beta site mentioned above actually worked, at least for a while, until NBC shut it down. There are a couple of write-ups about this on Forbes:

http://www.forbes.com/sites/oliverchiang/2010/11/19/the-offi...

http://www.forbes.com/sites/oliverchiang/2010/11/19/the-next...

ergoproxy

12 lat temudiscuss

Gary Gygax was a Christian. In February 1969, he wrote an article in IFW Monthly explicitly stating he was a Christian and making an argument why Christians shouldn't celebrate Christmas; he justified his argument with Biblical sources. See http://boingboing.net/2012/12/24/gary-gygax-explains-why-chr...

Original D&D included Christian symbolism: Clerics used holy water and a cross. Gygax's 1975's D&D Supplement I: GREYHAWK (page 34) states:

"All Vampires are affected by the cross, despite any former religious background, as it is sovereign against them."

Furthermore, the demons and devils in early D&D were presented as adversaries, not as role models.

I started playing D&D in the early 80s. I went to Catholic grammar school. We were taught by priests and nuns. We played D&D in the schoolyard. Nobody discouraged us from playing.

I was also bullied quite a bit in grammar school and high school, and I think I would have gone nuts if I didn't have D&D as an outlet. D&D also got me interested in reading books and studying probability. D&D helped improve my grades from Cs and Ds to straight As. I eventually got a B.S. in math with a 4.0 GPA.

As a grown up, I played in a group DM'd by a fundamentalist Christian, who didn't see any conflict between his religious beliefs and fantasy role playing games.

ergoproxy

12 lat temudiscuss

Apparently, Harvard's copy of Practicarum quaestionum circa leges regias is actually bound in sheep skin, not human flesh, at least according to this article: "Harvard Law School's 'Human Skin' Book Isn't Really Made of People" published on 03-Apr-2014 at http://gawker.com/harvard-law-schools-human-skin-book-isnt-r...

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12 lat temudiscuss

Letting the banks fail doesn't entail doing nothing and letting people suffer. Hank Paulson's bank bailout proposal got rammed through Congress by the Bush Administration without much consideration of any alternatives. Paulson's plan helped banks and bankers at the expense of everybody else. There were lots of other proposals that got ignored by the press. Here's three different approaches. While I personally favor the third approach, I think its very important to dispel the idea that we didn't have any choice but to bailout the banks, so I want to illustrate a variety of approaches:

(1) Steve Keen suggested a debt Jubilee: "monetary injections by the Federal Reserve not into the reserve accounts of banks, but into the bank accounts of the public--but on condition that its first function must be to pay debts down. This would reduce debt directly, but not advantage debtors over savers, and would reduce the profitability of the financial sector while not affecting its solvency" quoted from http://www.debtdeflation.com/blogs/2012/07/22/the-crisis-in-...

(2) Mortgage assistance: put a moratorium on foreclosures; freeze rate hikes in adjustable rate mortgages; help homeowners refinance their mortgages; or replace home borrowing with renting.

(3) Ron Paul proposed we abolish the Fed. While the Fed's profits belong to the federal government, the Fed itself is owned by the nationally chartered banks. Therefore, it's power to create money is used to benefit the banks, not the government or "we the people." Take that power away from the banks and put it back in the federal government, where the US Constitution says it belongs. This has many immediate advantages. Here three: (i) The federal government can tear-up the $1.6T of debt on the books of the Fed. (ii) The federal government no longer needs to borrow money. (iii) Eliminate the asset bubbles created by the Fed's artificially low interest rates and quantitative easing. See http://theeconomiccollapseblog.com/archives/14-reasons-why-w...

ergoproxy

12 lat temudiscuss

> Would humanity never ever have invented these technologies without war ?

Not all economic growth is good growth. There's bad growth too. Like anything else, war has costs:

(1) Price tag. For example, "The U.S. wars in Afghanistan and Iraq will cost taxpayers $4 trillion to $6 trillion, taking into account the medical care of wounded veterans and expensive repairs to a force depleted by more than a decade of fighting," quoted from The Washington Post (March 28, 2013): http://www.washingtonpost.com/world/national-security/study-...

(2) Harms/damages. For example, in the Afghan and Iraq wars, we have 6,600 dead Americans. Of the 1.6M veterans of these wars, 670,000 have been awarded disability, and another 100,000 are pending. Source: McClatchy DC (March 14, 2013): http://www.mcclatchydc.com/2013/03/14/185880/millions-went-t...

Harms inflicted on US troops include: amputations, traumatic brain injuries, mental illness, suicide, rape, sexual assault, and sexual harassment.

Harms inflicted on Iraq include: 150,000 to 400,000 dead, 600,000 orphans living in the streets, 1.3 million internally displaced, 1 million displaced to Syria, 100,000 imprisoned and tortured with no due process, 25% without clean water, 30% unemployment, etc., etc.

(3) Opportunity costs: I think President Dwight D. Eisenhower said it best in 1953--

"Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone.

"It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children.

"The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities.

"It is two electric power plants, each serving a town of 60,000 population.

"It is two fine, fully equipped hospitals. It is some 50 miles of concrete highway.

"We pay for a single fighter plane with a half million bushels of wheat.

"We pay for a single destroyer with new homes that could have housed more than 8,000 people.

"This, I repeat, is the best way of life to be found on the road the world has been taking.

"This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron."

ergoproxy

12 lat temudiscuss

The article doesn't address the question: Why has the GDP share of the FIRE sector recently grown so much so fast?

If its growth were the result of increasing authentic demand for financial services, or increasing efficiency in the supply of financial services, then that would be OK. However, I see three main bad reasons for the recent explosive growth in the FIRE sector:

1. Their cost of borrowing is artificially low. They don't need depositors anymore. They can borrow limitless funds from the Federal Reserve now at 0.25%. Their real borrowing rate is actually negative if we're honest about inflation, rather than relying on fabricated government numbers that leave out housing, healthcare, food, fuel and education.

2. The Fed is creating artificial demand for financial products. After the 2008-9 crisis, the Fed has created $3T out of thin air and used half of it to buy mortgage backed securities.

3. Over the last 30 years, the federal government has shown its willingness to bailout failed financial institutions that took on too much risk-- We saw it with the S&L crisis of the 1980s and 1990s; we saw it with the 1998 bailout of LTCM; and we saw it again with the $700B TARP in 2008.

If we would simply allow the free market (rather than The Fed and federal government) to determine interest rates, and the demand for securities, and the appropriate level of risk appetite, then we'd see the FIRE sector shrink back to its historically low share of GDP. Page 37 of this paper by Thomas Philippon charts the growth of the US Financial Industry as a share of GDP from 1860 to 2007: http://pages.stern.nyu.edu/~tphilipp/papers/finsize_old.pdf

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12 lat temudiscuss

I'd hardly call the Fed's response to the current crisis a success-- The U6 unemployment rate for the US is currently 12.6%; when we add back housing, healthcare, food, fuel, and education into the inflation statistics, its been running at 8-9%; and the Income Gini coefficient in the US is about 0.477. Meanwhile, the TBTF banks are even bigger, and the Fed's own balance sheet is a disaster waiting to happen.

ergoproxy

12 lat temudiscuss

It's debatable how much of this we can honestly attribute to the military--

Leó Szilárd and Enrico Fermi patented the idea of a nuclear reactor in 1933. The military didn't invent it.

Christian Hülsmeyer was a German inventor and entrepreneur. He was the first to use radio waves to detect "the presence of distant metallic objects"; he got a patent for his "Telemobiloscope" in 1904. The military didn't invent it.

The first patent for using a gas turbine to power an aircraft was filed in 1921 by Frenchman Maxime Guillaume. This predates the RAF's patent by 11 years.

Richard Drew invented Scotch tape and masking tape in the 1920s. In 1927, J&J invented cloth tape for medical uses. So far no military involvement. Then in 1943, Vesta Stoudt, an ordnance factory worker, thought to add waterproof plastic to J&J's cloth tape, making the first duct tape, and that's the extent of the military involvement. Duct tape was later improved in 1960 by an HVAC engineer by making it flame resistant. Seems that the military role in developing duct tape was rather minimal, and would have been made eventually by the free market.

There are serious issues trying to pin down who invented the first gunpowder rockets and for what purpose. Seems likely gunpowder was invented by Taoist alchemists seeking an elixir for immortality, and that the very first application of gunpowder rockets was fireworks for entertainment.

Writing for the WSJ in July 2012, Gordon Crovitz questioned "Who Really Invented the Internet?" at http://online.wsj.com/news/articles/SB1000087239639044446430...

ergoproxy

12 lat temudiscuss

Smoke and mirrors aside, the taxpayers have actually taken a huge loss on these bailouts. The official figures say: $608.9B out; $621.4B in. Looks like a $12.5B profit. But looks can be deceiving. First, it neglects the fact that we had to borrow that $608.9B and pay it back with interest. Second, and more importantly, it ignores inflation-- If we computed inflation the way we used to, before Greenspan took the helm of the Fed, we've been running 8-9% inflation per year recently. So the money we taxpayers got paid back isn't worth as much as the money we paid out. This devaluation of currency is especially evident when you consider that Ben Bernake printed up $3T out of thin air, and used half of it to buy up worthless mortgage backed securities.

But there's an even bigger issue at stake: While the US pays a lot of lip service to capitalism, this is not the way capitalism is supposed to work. AIG, Goldman Sachs, Fannie/Freddie,... they should have all been allowed to go out of business in a real capitalist economy. And that $608.9B should have been put to more productive purposes.

ergoproxy

12 lat temudiscuss

> Banks bear risk.

TBTF banks don't bear any risk. In 2008-9, they socialized their risk, forcing US taxpayers to bail them out, after making too many bad bets.

ergoproxy

12 lat temudiscuss

This recently posted YouTube video by UNSW Professor Norman J. Wildberger discusses the discovery of the quaternions by Hamilton and the subsequent discovery of the octonians. It's 59 minutes, 30 seconds long, and it was published on March 5, 2014:

MathHistory18: Hypercomplex numbers https://www.youtube.com/watch?v=uw6bpPldp2A [video]

ergoproxy

12 lat temudiscuss

In the second half of the Keiser Report: New Crypto Phenomenon Ethereum (E569) (published Mar 1, 2014), Max interviews Charles Hoskinson, a cryptographer and one of the people behind Ethereum: http://www.youtube.com/watch?v=hdAnyC45ZbU&t=724 [video]

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12 lat temudiscuss

Can't say I was disappointed by this article, because I've grown to expect so little from the press: Unfortunately, media coverage tends to be sensational and topical. Here we see an example of a sensational headline followed by a topical article.

For a couple of years in college, I worked as a senior reporter at a newspaper, wrote hundreds of published articles, and never wrote a headline: Copy editors write headlines. Besides writing the headline and correcting spelling and grammar, editors also rearrange paragraphs, delete stuff, re-write whatever suits them, decide what page the article will appear on (front page...buried on the fiftieth page) and decide whether or not to print the story at all. Headlines themselves are written in a domain-specific language called "Headlinese." The American Copy Editors Society has an annual "Headline Contest": http://www.copydesk.org/programs/contests/headlines/

WRT the headline's boast of using math as a "secret weapon against wall st," the article said "Frenkel blames the global economic crisis of 2008-09 on inadequate mathematical models used by bankers and traders to predict the financial markets..." My reading of this is that if people weren't so math illiterate, they could have seen the crash coming and perhaps taken steps to protect themselves.

Hmm. As both a mathematician and a former vp at a wall st bank, I have a different POV on the 2008 financial crash: Massive premeditated fraud on savers and retirees perpetrated by a handful of TBTF banks, enabled by lax government regulation and an "easy money" policy by the Fed. I didn't need my math skills to see this crash coming four years in advance, and my math skills didn't give me any "secret weapons" to stop it or defend myself--it was kinda like being caught in a tidal wave, except this was a tidal wave of greed and corruption.

Journalists say, "A picture is worth a thousand words." William Schiesser said: "An equation is worth a thousand pictures." I wish there were more equations and more coverage of STEM in the popular press. It would be great if journalists proved their conclusions logically, step by step, from their premises.

But the sad truth is that journalism is nothing but a form of entertainment. And there are so few of us who find math entertaining that journalism (other than niche journalism) will never cater to us.

ergoproxy

12 lat temudiscuss

While the author is correct to admonish the news media for its incorrect use of words like 'speed', 'throughput', 'bandwidth', etc., the author has much to learn about the economics and law at play here.

He says, "While I don’t know the price Comcast is charging Netflix, I can guarantee you it’s at the fair market price for transit in the market today and Comcast is not overcharging Netflix like some have implied."

Well, there is no "fair market price" in the absence of perfect competition. Where I live, Comcast is the only game in town. Verizon won't compete. So, Comcast is a monopoly. There's a monopoly price, and that price is significantly higher than what the price would be if we had a competitive market. In places where consumers have a 'choice' between Verizon and Comcast, there's a duopoly, with duopoly prices. Duopoly prices aren't much different from monopoly prices as far as consumers are concerned. The difference here is that Comcast/Verizon are making somewhat smaller duopoly profits, rather than higher monopoly profits.

Monopoly/duopoly, either way, consumers are getting screwed, whether that consumer is a household like me or a business like Netflix.

The author emphatically insists these deals have "NOTHING TO DO WITH NET NEUTRALITY." As a reminder, Net Neutrality was struck down by the Federal Courts on Tue 14-Jan-2014. So its funny we're seeing a tidal wave of deals between Netflix and the big three ISPs (Comcast, Verizon, and AT&T) just 6 weeks later, after numerous accusations of throttling. I know Comcast 'promised' to respect Net Neutrality until 2018. But Comcast has made me many promises they've broken, e.g., quoting me one set of prices, then charging me much higher rates when I get my bill. So why should I believe them now?

For a detailed economic analysis, I highly recommend looking at the 2010 paper "The Economics of Network Neutrality" by Nicholas Economides and Benjamin E. Hermalin. The paper finds that "network neutrality is welfare superior to bandwidth subdivision (granting or selling priority service)." See http://faculty.haas.berkeley.edu/hermalin/net_neutrality_v17...

I also recommend reading the 2006 testimony of Lawrence Lessig at the Senate hearing on Net Neutrality. He concludes that the loss of Net Neutrality will stifle innovation, damage the economy, and take away our freedom. See http://www.commerce.senate.gov/pdf/lessig-020706.pdf

I wish Lessig had expanded on his comments on freedom. We've seen illiberal countries like Iran, Libya, etc. block their citizens' access to internet sites that officials disapprove of. People think it can't happen in the US. But we see Arizona in the news today considering a law that allows firms to discriminate against gays. What if a major ISP's conservative CEO decides he doesn't want his customers accessing websites with content about gays, abortion, porn, gambling, alcohol, the big bang, evolution, islam, and so forth? Does his freedom of religion take precedence over my freedom of speech? It would be one thing if I could switch to a competing ISP, but as I've stressed, there's a real lack of competition. So, this scary scenario is becoming a real possibility now in the US.

ergoproxy

12 lat temudiscuss

The topic of dilapidated mansions on "Billionaire's Row" in London was also discussed on the Keiser Report, episode 558, Feb 4, 2014: http://www.youtube.com/watch?v=ni9AfsK5EdY&t=437

The housing bubble is fueled by central bank money printing. This is a good reminder of the problems caused by speculating with bank created debt: "Speculation, therefore, is to be condemned on two grounds: First, because it is a non-productive business; and, secondly, because it diverts wealth from productive business, thereby disturbing prices and adding to the burdens of society." Quoted from "The Bank as a Promoter of Speculation", p. 658, March 1872, http://books.google.com/books?id=QuMzAQAAMAAJ

"non-productive": Speculation on these homes not only fails to create new wealth, it also destroys existing wealth--these homes are falling into disrepair because the owners don't want or need to maintain them. Their prices will rise, even if they fall apart.

"diverts wealth from productive business": If I own a factory that actually creates wealth, even if it is profitable, unless it is as profitable as real estate speculation, then market forces are going to lead me to (1) raise my prices as much as I can get away with and demand my workers accept cuts to pay and benefits; or, if that's not enough, (2) liquidate my factory, fire my entire work force, and bet my capital on real estate. In this respect, central bank money-printing and the speculative bubbles it creates can be seen to be both deflationary (i.e., creates unemployment and puts downward pressure on wages) and inflationary (i.e., creates shortages and higher prices for consumer goods as well as higher prices for speculative assets) at the same time.

Submissions

Exotic Probabilities

A story of mathematics, witchcraft and Walpurgis Night,

D&D Meets the Electronic Age

Dominic Frisby crowdfunding his new book "Bitcoin – The Future Of Money?"

Max Keiser interviews Bitcoin entrepreneur Andreas Antonopoulos [video]

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