Chaos Patch (#16)

Yes, the new regime of managed disorder is already shredding its deadlines, but chaotic scheduling adds to the recursive dynamism.

Some semi-random words and terms:
Agorism, Asabiyyah, Caliphate, Communism, GDP, Liberation, Risk, Poe’s Law (+, ++, +++), Value, World War (G).

June 30, 2014admin 9 Comments »
FILED UNDER :Chaos

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9 Responses to this entry

  • Alrenous Says:

    The importance of objective measures is they cannot be gamed. Indeed it’s perhaps better to say that the measures that cannot be gamed are called ‘objective.’ Non-objective measures are only useful between political allies, and even then only if they have no temporary conflicts.

    Did you know there’s no objective way to measure GDP growth? I should have known that, Reality has hinted it at me repeatedly, but only figured it out yesterday. The problem is price is the only objective way we know to measure value, but price year/year is meaningless.

    Three ways to screw up GDP growth measurements:

    Imagine GDP is $1000. Now imagine next year, the labour force grows by 50%. (They’re all picking wild berries or something, so no capital investment is necessary to deploy them.) So 50% more raw stuff is made and bought. But firms still only have a budget for $1000, so wages are lower, so the stuff is cheaper, so GDP is still $1000. The wealth increase went entirely to deflation. (Put another way, supply of berries went up so the market price went down.)

    Imagine the same thing again, except this time we get implicit inflation through velocity. The extra ~$10 a week of berries is sold in time to make payroll, so nobody’s wage goes down. Now we get the proper 50% GDP increase to $1500. (But hopefully you can see the math would never work out.)

    Without inflation, GDP in prices cannot grow. (Global GDP; obviously you can take money from one country and give it to another.) GDP ‘corrected for inflation’ is meaningless. It’s like an electron corrected for electric charge. It’s a neutrino corrected for mass.

    What if we measure raw output instead? It’s easy to count the berries and see there’s 50% more of them. If we try, we imagine communism. Instead of 50% more labour spent on delicious berries, they’re spent piling boring rocks. Or perhaps $1000 of berries makes everyone stuffed and 50% more can only be used to make your fridge smell. GDP goes up, but wealth has fallen, counting leisure. All we’ve done is make a bunch of worthless crud.

    With real inflation by fractional reserve and money printing? And industry specific deflation e.g. Moore’s Law and velocity? You have two equations and at least three unknowns. It’s mathematically unsolvable. { GDP 2004 = f(x, y, z) and GDP 2005 = g(x, y, z) }

    (Debt/GDP is still useful, because it’s not year/year we can hold x, y, and z constant.)

    We can solve the problem if we apply judgment. We have then committed matholatry, in the immortal words of Moldbug. We have used the rectal extraction method and cloaked it in the seeming solidity of Number.

    It should not be this easy for one person to sink the battleships of entire fields of inquiry. Unless, that is, entire fields of inquiry are fundamentally invalid. As it happens, any good Ancap will tell you that since taxes are evil, they corrupt the taxer, and thus anyone being paid out of taxes will likewise be corrupt.

    So instead, sinking entire fields of inquiry is a fun, rewarding hobby. I highly recommend it.

    [Reply]

    Orthodox Reply:

    There is a good argument for banning the collection of economic data. Without data, the planners would be unable to plan. Government revenues and Treasury yields are more than enough for the clowns in DC.

    [Reply]

    Steve Johnson Reply:

    I think it’s more an argument that you can’t ever base policy on a metric because then manipulating the metric is a way to set or justify policy and you just wind up with a corrupted metric.

    Something as simple as temperature has gotten this treatment because it’s an input to policy.

    [Reply]

    Henry Dampier Reply:

    If corporations wanted to publish statistics and sell stock to anyone who showed up, they wouldn’t need to be forced to through various securities laws. The publishing of statistics is entirely a tool used by sovereigns to help them collect taxes and ‘read’ what’s going on within their domains.

    Alrenous Reply:

    I’m amused that this means year/year temperature data isn’t objective either, according to my definition.

    Steve Johnson Reply:

    Yep.

    There’s room for judgment in year / year temperature data – correcting for the urban heat island effect, how to weight the data from various stations and how to extrapolate overall temperatures from the spots where you have data, etc.

    Since it requires judgment it’s non-objective and since it’s a policy input it’s corrupted.

    Contemplationist Reply:

    Infact Milton Friedman was probably in favor of this as he was narrating the remarkable economic performance of Hong Kong, which seemed to have followed this policy. Sir Cowperthwaite called it ‘positive non-intervention’ I think.

    [Reply]

    Posted on June 30th, 2014 at 3:58 pm Reply | Quote
  • Chaos Patch (#16) | Reaction Times Says:

    […] Source: Outside In […]

    Posted on June 30th, 2014 at 5:03 pm Reply | Quote
  • Erik Says:

    Poe’s Law ++++

    I swear it’s a coincidence.

    [Reply]

    Posted on June 30th, 2014 at 10:35 pm Reply | Quote

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