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From: mmt@dciem.UUCP (Martin Taylor)
Newsgroups: net.politics.theory
Subject: Re: Economic Issues -- Reply to Sevener
Message-ID: <1483@dciem.UUCP>
Date: Tue, 26-Mar-85 18:32:47 EST
Article-I.D.: dciem.1483
Posted: Tue Mar 26 18:32:47 1985
Date-Received: Tue, 26-Mar-85 20:11:06 EST
References: <ratex.997>
Reply-To: mmt@dciem.UUCP (Martin Taylor)
Organization: D.C.I.E.M., Toronto, Canada
Lines: 37
Summary: 


> . . . (I would note that
>NONE of the supply-and-demand analysis that I have engaged in depends on an
>assumption of smooth curves!)
>
>                                        Back later,
>                                        DKMcK

Perhaps not, but the analyses do require equilibrium conditions, and
therefore do not apply to the real world or any possible world.
For example, the (repeated) theorem on full employment ignores the
fact that there must be some unemployment in order to allow people
to shift jobs.  Full employment is thermodynamically analogous to
absolute zero, or to the band-level population of electrons in a
perfect insulator.  You can't get there from here.

Other analyses ignore the effects of phase-shifted feedback, which
can lead to oscillations (and even chaotic behaviour) under conditions
in which the equilibrium solutions are stable.  Time matters.  Information
matters, and most of the analyses require the underlying assumption that
the individual performers (workers, capitalists, unemployed ...) have
full knowledge of what might happen as a consequence of their individual
decisions.  When someone suggested that each individual farmer might
not be totally aware of the effect of price changes (in reference to
the cobweb effect), this suggestion was roundly denounced as slighting
the intelligence of farmers.  But it was really an assertion that
it takes an infinite amount of time to gather all information, and
by the time you have gathered it, the situation is different anyway.

The analyses put forward by DKMcK are fun to read, but I seldom feel
they have much to do with the real world, or even with a contrived
world that contains real people and real information systems.
-- 

Martin Taylor
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