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700 sats \ 7 replies \ @SimpleStacker 6 Oct \ parent \ on: The State is Entrepreneurial: It Matches Nature with Entrepreneurs! Politics_And_Law econ BooksAndArticles

Do you believe that math is useful for econ now, and that not using math makes your brain wander off into fanciful territory? It's super easy to understand the role of nature in the economy if you use a model.

Here's a simple model with nature:

Consumers choose $x$ to maximize their utility, subject to the conditions imposed by nature, $z$ :

x max u (x, z)

Producers choose $y$ to maximize their profit, subject to the conditions imposed by nature, $z$ :

y max v (y, z)

Nature may impose some required relationship between $x$ and $y$ :

g (x, y, z) = 0

Ok, we're done. Nature's role in the economy is now understood.

111 sats \ 6 replies \ @denlillaapan OP 6 Oct

Nope.

What about this modelling exercise is some sort of relevant revelation?

I understand that algebra is clarifying to some people, but what exactly do you think this example illustrates that words about dynamics/market pricing/subjective value/optimization don't?

127 sats \ 5 replies \ @SimpleStacker 6 Oct

It's not about what it can illustrate that words can't. it's about what it can't illustrate that words can (wrongly)

47 sats \ 4 replies \ @denlillaapan OP 6 Oct

Not following. Maybe try a graph to get your point across?

(See what I did there!)

220 sats \ 3 replies \ @SimpleStacker 6 Oct

Forcing people who think about economics to formalize their thoughts catches bad logic and sneaky assumptions. It eliminates arguments that might sound reasonable when using words, but becomes untenable when you try to formalize it. You accused the authors of this book of faulty logic, well the purpose of formalization is to gatekeep the faulty thinking.

From the snippets you've posted about The Natural Dividend, the thing I'd ask them to formalize is their definition of value in this system of decision-makers, where nature is a force that imposes conditions, but isn't an acting agent. Value can only be defined with respect to the acting agents.

49 sats \ 2 replies \ @denlillaapan OP 6 Oct

I don't suppose they'll see that any more clearly with a mathematical formula.

Put differently: you can always make a formula/arrange the algebra so your favoured idea comes out, no?

10 sats \ 1 reply \ @SimpleStacker 6 Oct

I don't suppose they'll see that any more clearly with a mathematical formula.

Perhaps they don't want to see clearly and would give up if asked to formalize their arguments ^_^

Put differently: you can always make a formula/arrange the algebra so your favoured idea comes out, no?

Sort of but not really. You can get a model to say whatever you want, but it may also require transparently dumb assumptions, and you'd get called out for it.

50 sats \ 0 replies \ @denlillaapan OP 6 Oct

but it may also require transparently dumb assumptions, and you'd get called out for it.

That's true, and useful... but I can also just call them out for "transparently dumb assumptions" in plain text

slavery w extra steps, etc