Re:Understanding the Historic Divergence Between Productivit...
by TheOtherHobbes on Thursday September 03, 2015 @06:43PM
(#10167928)
That's unlikely, because the current model of money is basically reified politically power. And there is no theory of economics which starts from that POV - not even Marxism.
In fact money isn't reified political power - we simply treat it as if it is, unconsciously, because we've never considered the alternatives.
The real drivers of economic activity are collective intelligence and organisational ability. Politics is a subset of organisational talent, but it's typically a toxic instantiation of a principle that has many other possible expressions.
I think useful models are going to have to work back from that. By the time they're done, contemporary models of economics will have gone the way of phlogiston and epicycles.
Indeed, and I now think that intellectual progress in the 21st century must be done with Permanent Disequilibrium models. Equilibrium models have taken us as far as they can. Equilibrium models emerged in the 1600s and they gave us the Industrial Revolution and 300 years of economic progress. But we've gone as far as we can with them.
For educated Western policy-making elites, the world view of the last 300 years were shaped by equilibrium models. Among some of the most important:
1.) the Law of Supply and Demand
2.) Darwin's Theory Of Natural Selection
3.) Newton's Laws Of Thermodynamics
The whole idea that you can take a piece of graph paper and trace some functions on it (functions which have a cross over point) is an idea with vast power, and it created the world we know today. But I suspect that we've also mined that particular style of intellectual research for as much as we can.
The argument against Permanent Disequilibrium models used to be that the math was too hard for humans to handle conveniently. Certainly, that is true. For a point of comparison, I can easily imagine how the Law Of Supply and Demand effects the price of bread. And yet, I am utterly unable to imagine the price of bread in a Permanent Disequilibrium model, for that involves how each persons response to any change in Supply or Demand sets off a new ripple in the Supply or Demand that propagates across the graph.
But now we have computers. And, better yet, we have a paradigm that allows us to make use of those computers: agent based simulations. And agent based simulations gives us an easy way to see the outcome of Permanent Disequilibrium models.
More so, we are lucky enough to have a generation growing up that has grown up playing video games. And the better video games (massive online multi player etc) are agent based simulations. So we have a whole generation coming along that has an intuitive feel for the advantages offered by agent based simulations.
The future of economics will be created by those who grew up playing World Or Warcraft and Starcraft and so many other games. And this generation will free us from the tyranny of idiotic equilibrium models, such as the one posted by WalterBright.