To establish the truth, there are 3 essential steps. First- is the argument logically valid? This can be broken down into the questions of- Are the premises required contradictory?
(note that a contradictory statement is not invalid- it is meaningless. If (contradiction) then Y is ALWAYS true. It is, as such, incapable of providing input. IE, a test that always comes up positive is no better than simply declaring the statement true without any measurement. IE in any designation of C->Y is equivalent to 0=0. This principle ignores scale- it's like multiplying a final product by 0, all information is lost if any link is invalid. It should be noted, that autorepair routines are a valuable asset, in that YOU can yourself, fix a target argument such that it becomes a valid argument. Even the best scientists often make mistakes especially in long and convoluted math. Sometimes these mistakes are easily fixed, and the argument does not need to be sent back to its source for maintenance.)
Are all statement transformations done such that they lead to equivalent results?
(IE, take the statements of X->Y and ~X (not X)->~Y. These are NOT equivalent. IE, assume X is true if the tested variable is a hawk, and Y is true if the variable is a bird. In all cases wherein X is true, so is Y. However, a dove is not a hawk, but it is a bird. Any argument wherein we start with the premise of X->Y and derive a statement such as ~X->~Y is logically invalid. This is, once again, due to the fact that given any derivative from which the original truth table is changed, I can obtain any result from any premise. As such, the truth of the premises has no relation to the truth of the final statement.)
Once these routines are complete the second step is- Is the statement mathematically valid?
This is when outside information is first factored into the issue. Each premise is measured against additional known information. The validity of the premises is based on how much outside information would have to be rendered false for the the premise to be declared true, vs how much outside information would have to be rendered false for the premise to be declared false. A strength level is assigned to each premise. Note the difference between a premise and a variable. IE "If cattle exist the so does the sun god." is a premise. The existence of cattle and the existence of the sun god are both variables. The RELATION is the premise. Since there are many scenarios that include cattle but not a sun god, I can call this premise into question. It should be noted, that it is impossible to render such a premise impossible (any such design would already be logically invalid.) but it is possible to assign probabilities to each premise. As some premises drop below a certain threshold I can furthermore declare the effort involved with further exploration to be not worth the benefits derived thereof, thus setting a virtual 0 to the premises strength.
Finally, the issue turns to the variables themselves. It should be noted that in many arguments, rendering one or more variables false will not destroy the argument. For instance- X or Y->Z. Even if Y is false Z (the variable I care most about) is still true, given that X is true. That said, it becomes necessary to, with a similar approach as before, judge the strength of each variable. It can be stated that the probability that Z is proven (be careful not to dismiss Z just because a false proof is given. IE "given that oil continues to be used to generate electricity, then we will be nuked. Oil will continue to be used to generate electricity, so we must prepare for a nuclear attack with a nuclear defense shield." Note that the starting premise is weak (that using oil will necessarily lead to getting nuked) but the conclusion is not necessarily a bad idea. At least, many better arguments could be given for that same conclusion.) , given a statement such as X or Y->Z is equal to- The probability of the premises being accurate multiplied by the probability that any set of variables that leads to Z is accurate.
So, this leads to the issue, of what tools to use to asses the probability of the premises and variables. The first, and most obvious is direct input. For instance, one does not need expert advice to know that the sky often displays a blue color. Any variable that requires the sky to lack its color in order to function requires the complete dismissal of all input throughout your entire life, and thus becomes abstractly improbable. This method is, however, limited. Especially when dealing with variables. Oftentimes, events can avoid contradicting personal experience even if you know a good deal about a subject. IE, say there was a statistic that said 2% of females aged 16-28 in town X get raped every year. As a resident female who lived her entire life in town X and hasn't been raped, you must realize that according to the statistic provided, this scenario has a nearly 77% chance to occur. As such, the personal experience of living in town X and not getting raped is nearly worthless in terms of judging the issue.
This is when you turn to aggregate data. So long as the collection method is valid and the source is trustworthy, statistics are the best and only way to answer questions upon which you lack data. Any amount of individual data points can be averted by declaring them a coincidence. However, by aggregating them, they become much stronger- facts are like sticks. Breaking one is always easy, but breaking them all at once is astronomically harder.
Sometimes, though, you will inevitably run across issues which fall into one of two categories- the statistics behind the premises are so astronomically convoluted that you can't understand what they mean or the data is so lacking that it's impossible to use a amalgamated mass. This is when the opinions of outside analysts become important. IE, a biologist can declare that his data indicates a coming epidemic, that requires immediate action to avert. The reasons for his declaration can easily be absurdly arcane, but if the other biologists around him agree that his data means what he thinks it means, and if he is a person who has successfully predicted 3 similar events, his data is probably valid. Alternatively, say a murder occurred and the murderer is confirmed to have destroyed all video evidence and left no dna evidence. However, he didn't know that his target's child was hiding in the closet and saw the entire thing, leaving a good enough testimony to identify him from amongst all the people who could physically have achieved the act. One must judge if the source would want to mislead you, or have some sort of vendetta against the presumed murderer, or if it is more like that the child is simply telling the truth. Oftentimes, these questions are actually very easy to make, but sometimes a very confusing situation arises- one in which 2 valid sources come to opposite conclusions. Since this method is a step within the process of judging argument validity, presuming that any given argument has not already been judged true or false, it WILL inevitably be reached. (assuming data exists. Even so, when faced with a unsolvable problem, people tend to pull in their friends, coworkers, etc. to help them come to a conclusion.) As such all problems are supported by one group and opposed by another, and the constituent strength of the groups supporting and opposing the argument must also be factored in. Note that group size is of minimal importance compared to other factors. IE, 10 doctors telling me that my symptoms are caused by disease X is more meaningful than 10000 non-doctors saying the same thing. Although popular opinion can be used as an indicator, it is often caused by such things as "going with the flow" or by the conclusion simply being the most obvious, even though anyone who really knows what he's talking about knows 10 proofs that make the conclusion false. (Often, 1 way hash arguments, wherein the true argument is thoroughly proven, but the proof is so long/difficult, that the average person cannot follow it, either due to willpower+available time or simple intellect failure. Note that lack of will to follow an argument is not necessarily a bad thing, and is in fact a mathematical necessity. By definition, listening to one argument requires that you are not listening to another. If you just start listening to every available argument, you will soon find that there are STILL far more that you haven't listened to.)
Sunday, November 29, 2009
Wednesday, November 11, 2009
If, Then, Else
So, we've decided that an ailing economy is solved by producing jobs, and demand. This is achieved via government spending. So, given that this procedure works, what else must be true?
Firstly, that people in their latent state are not productive. IE, that rich people will not use their wealth in a progressive manner, and that poor people will become more productive once given a job. (The issue of poor people facing starvation or simple deprivation could easily be solved by immigration control and charity. It is assumed that we cannot afford charity for the entire world, so there must be limits to who can get this charity.) The jobs given to the poor are NOT currently productive. Producing a single job is far more expensive than giving a single person enough money to sustain a middle class living. IE, any job given to the poor must be judged as an investment, not a product.
So, this splits current economics into two questions- is 'idle' spending more effective than forced spending and does a person, after working for a certain period become an effective member of the economy? Current assumptions say that upon such a time as a person runs out of obvious beneficial activities to achieve he will enter into an idle state and cease partaking in useful activities. The answer to this syndrome is thence to force economic advantage gain for less useful activities visible to the government but not the economy. In theory these activities can be intuitively seen easily, but due to the lack of financing for those who would benefit, they are invisible to the economy. So, we must look then at the nature of the economy's vision- IE what makes an activity visible to the economy vs what hides such an activity. Simply, an economy repeatedly distributes money back to those who produce the greatest amounts of wealth. A miner gathers ore. The ore is sent to a refinery and eventually becomes steel. The steel is sent to a car factory. The Car worker trades his money for a house, that was built from wood gathered by a lumberjack supporting all the people up the line. Presumably the workers demand as much as they can get and thus each receives the maximum amount that a company can pay them and still make a profit (IE the wealth they produce is directly returned to the worker. Note that this doesn't really happen, because some people are better at fraud than others, so some workers make way more than they're worth through clever trickery, most of it legal. Of course the reverse is also true, and plenty of workers are screwed by clever companies. Such activity should however, be viewed merely as corruption, and should be stomped out where plausible.) Some people are not in the direct line of work, for instance, venture capitalists. However, they are in the same positions as the workers, in that the only way to start a car factory is for someone to judge that a car factory needs to be opened even though there is no proof, and for him to provide the capital. This is a very difficult job that only a few people can do, and those who do it well are provided large amounts of wealth due to their importance to the economy. From an economic perspective there is little difference between company/customer and employee/company. When A provides a service B responds by returning wealth.
So, what's curious is this- what happens when the worker at the car factory is replaced by a computer, and where thousands of factory workers used to be paid, instead a couple hundred engineers handle everything. The factory worker can no longer produce a surplus of wealth, and thus becomes invisible to the economy-(note also a equivalent scenario: that a lot of people move to cities creating a large demand for houses. For a period, any uneducated bum can be a valuable economic resource due to the necessity of houses and lack of alternatives. However, as the demand decreases the incentive to employ the bums disperses until such a time as it is no longer profitable.) IE the natural response of the economy is to kill him off. (remember that our objective is to improve the economy. Such issues as starving unemployed persons can be handled by charity instead of by handing out jobs.) It can be argued that the worker will simply learn a new skill and do something useful elsewhere, but this merely delays the issue. IE Given that the variables necessary for production change, the persona of the worker base must also change. Given that said variables shrink to a smaller field (for instance, those with a higher IQ, or greater amount of experience) people who were previously productive members of the economy will be dismissed from the economy.
By current economic standards, this method of dismissal is a disastrous inevitability of any unplanned market. This process creates depressions. What must be asked then, is what is a depression? As part of a natural business cycle, it is formed when people finish getting what they want. Once people can drive around for free, and everyone has a house the workers get fired and the companies go out of business. IE a depression does not involve the disappearance of wealth. Indeed, wealth is freed up during a depression. (note that yes investors will be screwed by a depression, but that's because they're not doing their job right. Investors are paid to tell us if a economic activity will be useful in the future, and if their predictions are wrong they will be fired.) So where does the money go?
Here is where the very rich come in. The money ceases to be in an active state and enters an idle state. Note that money, if not spent translates into deflated prices. IE no matter how rich you are, to be noted by the economy you must partake in economic activities. IE idle money is not money that is not spent. It is money that is translated into activities that produce no direct economic benefits. This can be classified into two fields- investments and luxuries. Investments are to be defined as anything that may, in the future give a profitable return. Luxuries are activities that in all probability will not return a profit. As such, the entirety of modern Keynesian economics henges on whether the money will be placed in investments superior to employing workers or if the money will be wasted on luxuries during a depression.
Or, another way of putting it is this- do the very rich become richer or poorer at the end of a business cycle? IE after the economy recovers, do the very rich also recover? If the very rich are reduced in wealth every cycle then it can be assumed that they spent their assets on luxuries or poor investments during the depression. If however, the rich become richer, then it can be assumed that they merely turned to more far sighted programs.
However, the business cycle has, throughout history, been increasing the economy. The nobility was in the 1500s-1700s extremely productive. They set up the industrial revolution. Simply put, business cycles are too frequent for a upper class to remain on top indefinitely without responding profitably too them. Upper class individuals with way more wealth than they need do not tend to fritter it away in parties. They either hold onto it (thus not getting in the way of the rest of the economy) or take extremely far sighted actions to increase their wealth. This is why they are so rich. IE, the problem addressed by current economics (a loss of demand, and thus no way to find useful ways to spend money.) is incorrect. What needs to be addressed is this- that the economy will not always find everyone in it useful, not even everyone who has been useful in the past. Rather than giving these people jobs, which provide the people only a small amount of money compared to how much is spent to produce the jobs, they should be given their wages without the work involved. Then the saved money can be turned to farsighted goals. (such as scientific research, or power plants that can produce cheaper electricity (note that demand for electricity can be fully met, but if the electricity can be produced cheaper, then people who could not previously afford any electricity will start buying whilst those who could afford what they really wanted can buy even more, even if all they do with it is leave the lights on while they're out. IE demand will scale to supply.)
One should ask, what makes these far sighted goals so bright that they outshine nearsighted goals? The answer is simply that they are more economically viable. There's no reason to continue turning trees into houses when no one will trade any resources for the house. However lesser demands, such as my demand for a quantum computer can still be addressed. It's not that these people stop providing products- it's that they start providing products that can't be immediately delivered. These include everything from free food and electricity to spaceflights. A depression starts when my demand for a quantum computer outstrips your demand for a bigger house. It's that simple. Competition for limited resources.
So we ask, do I have a right to a quantum computer when you still want a house? The answer there is this- that we are only different than other species because of our scientific progress. We are the only species that demands things that we can't get. A wolf never demands a gun, and thus is still stuck hunting with fangs. Sure, if a wolf pack hunkered down and started producing more advanced weapons, many wolves would suffer or even starve while the pack worked out its more effective weapon. However, do we really wish we had acted like the wolves way back when, or do we thank the sacrifices of our ancestors? That said, are we really so selfish, that we wish to stop here, reap the rewards and fuck the rest? Given, we shouldn't have to give everything to those in the future (if everyone did that, no-one would EVER actually get to enjoy their wealth.) but a few depressions here and there aren't so bad if it helps those who come later.
Firstly, that people in their latent state are not productive. IE, that rich people will not use their wealth in a progressive manner, and that poor people will become more productive once given a job. (The issue of poor people facing starvation or simple deprivation could easily be solved by immigration control and charity. It is assumed that we cannot afford charity for the entire world, so there must be limits to who can get this charity.) The jobs given to the poor are NOT currently productive. Producing a single job is far more expensive than giving a single person enough money to sustain a middle class living. IE, any job given to the poor must be judged as an investment, not a product.
So, this splits current economics into two questions- is 'idle' spending more effective than forced spending and does a person, after working for a certain period become an effective member of the economy? Current assumptions say that upon such a time as a person runs out of obvious beneficial activities to achieve he will enter into an idle state and cease partaking in useful activities. The answer to this syndrome is thence to force economic advantage gain for less useful activities visible to the government but not the economy. In theory these activities can be intuitively seen easily, but due to the lack of financing for those who would benefit, they are invisible to the economy. So, we must look then at the nature of the economy's vision- IE what makes an activity visible to the economy vs what hides such an activity. Simply, an economy repeatedly distributes money back to those who produce the greatest amounts of wealth. A miner gathers ore. The ore is sent to a refinery and eventually becomes steel. The steel is sent to a car factory. The Car worker trades his money for a house, that was built from wood gathered by a lumberjack supporting all the people up the line. Presumably the workers demand as much as they can get and thus each receives the maximum amount that a company can pay them and still make a profit (IE the wealth they produce is directly returned to the worker. Note that this doesn't really happen, because some people are better at fraud than others, so some workers make way more than they're worth through clever trickery, most of it legal. Of course the reverse is also true, and plenty of workers are screwed by clever companies. Such activity should however, be viewed merely as corruption, and should be stomped out where plausible.) Some people are not in the direct line of work, for instance, venture capitalists. However, they are in the same positions as the workers, in that the only way to start a car factory is for someone to judge that a car factory needs to be opened even though there is no proof, and for him to provide the capital. This is a very difficult job that only a few people can do, and those who do it well are provided large amounts of wealth due to their importance to the economy. From an economic perspective there is little difference between company/customer and employee/company. When A provides a service B responds by returning wealth.
So, what's curious is this- what happens when the worker at the car factory is replaced by a computer, and where thousands of factory workers used to be paid, instead a couple hundred engineers handle everything. The factory worker can no longer produce a surplus of wealth, and thus becomes invisible to the economy-(note also a equivalent scenario: that a lot of people move to cities creating a large demand for houses. For a period, any uneducated bum can be a valuable economic resource due to the necessity of houses and lack of alternatives. However, as the demand decreases the incentive to employ the bums disperses until such a time as it is no longer profitable.) IE the natural response of the economy is to kill him off. (remember that our objective is to improve the economy. Such issues as starving unemployed persons can be handled by charity instead of by handing out jobs.) It can be argued that the worker will simply learn a new skill and do something useful elsewhere, but this merely delays the issue. IE Given that the variables necessary for production change, the persona of the worker base must also change. Given that said variables shrink to a smaller field (for instance, those with a higher IQ, or greater amount of experience) people who were previously productive members of the economy will be dismissed from the economy.
By current economic standards, this method of dismissal is a disastrous inevitability of any unplanned market. This process creates depressions. What must be asked then, is what is a depression? As part of a natural business cycle, it is formed when people finish getting what they want. Once people can drive around for free, and everyone has a house the workers get fired and the companies go out of business. IE a depression does not involve the disappearance of wealth. Indeed, wealth is freed up during a depression. (note that yes investors will be screwed by a depression, but that's because they're not doing their job right. Investors are paid to tell us if a economic activity will be useful in the future, and if their predictions are wrong they will be fired.) So where does the money go?
Here is where the very rich come in. The money ceases to be in an active state and enters an idle state. Note that money, if not spent translates into deflated prices. IE no matter how rich you are, to be noted by the economy you must partake in economic activities. IE idle money is not money that is not spent. It is money that is translated into activities that produce no direct economic benefits. This can be classified into two fields- investments and luxuries. Investments are to be defined as anything that may, in the future give a profitable return. Luxuries are activities that in all probability will not return a profit. As such, the entirety of modern Keynesian economics henges on whether the money will be placed in investments superior to employing workers or if the money will be wasted on luxuries during a depression.
Or, another way of putting it is this- do the very rich become richer or poorer at the end of a business cycle? IE after the economy recovers, do the very rich also recover? If the very rich are reduced in wealth every cycle then it can be assumed that they spent their assets on luxuries or poor investments during the depression. If however, the rich become richer, then it can be assumed that they merely turned to more far sighted programs.
However, the business cycle has, throughout history, been increasing the economy. The nobility was in the 1500s-1700s extremely productive. They set up the industrial revolution. Simply put, business cycles are too frequent for a upper class to remain on top indefinitely without responding profitably too them. Upper class individuals with way more wealth than they need do not tend to fritter it away in parties. They either hold onto it (thus not getting in the way of the rest of the economy) or take extremely far sighted actions to increase their wealth. This is why they are so rich. IE, the problem addressed by current economics (a loss of demand, and thus no way to find useful ways to spend money.) is incorrect. What needs to be addressed is this- that the economy will not always find everyone in it useful, not even everyone who has been useful in the past. Rather than giving these people jobs, which provide the people only a small amount of money compared to how much is spent to produce the jobs, they should be given their wages without the work involved. Then the saved money can be turned to farsighted goals. (such as scientific research, or power plants that can produce cheaper electricity (note that demand for electricity can be fully met, but if the electricity can be produced cheaper, then people who could not previously afford any electricity will start buying whilst those who could afford what they really wanted can buy even more, even if all they do with it is leave the lights on while they're out. IE demand will scale to supply.)
One should ask, what makes these far sighted goals so bright that they outshine nearsighted goals? The answer is simply that they are more economically viable. There's no reason to continue turning trees into houses when no one will trade any resources for the house. However lesser demands, such as my demand for a quantum computer can still be addressed. It's not that these people stop providing products- it's that they start providing products that can't be immediately delivered. These include everything from free food and electricity to spaceflights. A depression starts when my demand for a quantum computer outstrips your demand for a bigger house. It's that simple. Competition for limited resources.
So we ask, do I have a right to a quantum computer when you still want a house? The answer there is this- that we are only different than other species because of our scientific progress. We are the only species that demands things that we can't get. A wolf never demands a gun, and thus is still stuck hunting with fangs. Sure, if a wolf pack hunkered down and started producing more advanced weapons, many wolves would suffer or even starve while the pack worked out its more effective weapon. However, do we really wish we had acted like the wolves way back when, or do we thank the sacrifices of our ancestors? That said, are we really so selfish, that we wish to stop here, reap the rewards and fuck the rest? Given, we shouldn't have to give everything to those in the future (if everyone did that, no-one would EVER actually get to enjoy their wealth.) but a few depressions here and there aren't so bad if it helps those who come later.
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