Sophistry prefers broad and colorful generalizations. Rationally practical speech and patterns of thought build on reliable facts about nature, including human nature, without ignoring (i.e., “compartmentalizing” away) contradictions that appear as the logical inferences are constructed upward from the non-changing reliable facts at the bottom. Plato loved those generalized theories about perfect goals. Socrates could not stop asking questions about nature, especially when analogous to previously known ideas within nature. Aristotle says Socrates invented “inductive reasoning” by means of all his inquiries about cobblers, and builders, and metal workers and such. Those analogies kind of add up over time. It takes quite a lot of logical refinement to get past that simple “induction by simple enumeration” stuff to achieve real “objective” scientific judgment.
Plato had a simpler approach to becoming “scientific.” Precise and logically consistent (subjective) theorizing built upon Good or Just assumptions (and deductive tautologies) simply passed for Plato’s version of “science.” The more complicated the theoretical descriptions, the more scientific it seemed.
Sorry for all the fancy talk if it bores you. It is only an “aside” to the topic of MacroEconomics and Peer Review, Part 2.
Not being an asshole like Plato, neither Socrates nor I would attempt to discuss any “economic” topic without first agreeing on what rudimentary “Economics” actually is. As I said last time, I had an exceptionally superior Economics 101 professor in the mid-1960s, several years before the invention of the “Oscar” Award for Economic Showmen (i.e., the Nobel Prize for Economic Science) beginning in 1969.
The primary of two natural laws of Economics, the Law of Supply and Demand, was simply illustrated on the blackboard by means of a simple two-dimensional graphing of two “curves.” (The human mind can only really conceptualize any idea by means of picture images – whether a simple observation or a complex graph.
By the time I was in the 5th grade I had been required to purchase graph paper at the stationery store so as to perform the required, and submitted for review, homework assignments using Cartesian coordinates.
I have no idea of and no positive expectations for contemporary over-priced public education when it comes to the teaching of Cartesian coordinates with graph paper. For a rational understanding of nature, it is almost as mandatory to understand as are memorizing those mathematical tables. (Those are the tables that the Best and Brightest among the Experts and Authorities of American Public Education consider to be antithetical to contemporary “educational” requirements.)
Obviously “Education” is a bullshit word now whenever the assholes of the Education Industry’s Social Oligarchy decide to impose or alter the Social Protocols of “education” for the common people majority.
Even if you have never learned Cartesian coordinates in school, it is not difficult to visualize a vertical line close to the left border of a large square and a horizontal line close to the bottom border of that same square. The spot in the lower left corner where the two lines intersect is given the mutual value of zero along each axis. He said the y-axis (the vertical line) would measure the “price” of the product or service in the market (or Agora in Athens). And he said the horizontal line (called x-axis) would measure the “quantity.” Then he drew the first of two crossing diagonal lines to represent the Free Will aggregates of first Demand and later Supply, each separately as a separate reflection of aggregate Free Will human nature choices.
The Demand curve starts at the upper-left (because, when the price is high, the Demand is minimal). It then descends (however regularly or irregularly which only testing can clarify) to the lower-right (because, when the price is low, more people will buy). If this does not seem like common-sense to you, it will not get any simpler!
Next he drew the Supply curve which starts at the lower-left (because a low price offers little incentive to anyone in business going to the trouble to supply the market). The curve diagonally climbs to the upper-right (where a maximum price inspires the maximum effort from the maximum number of potential producers).
[If you know as much human history as I have learned over 70 years, it is amazing how many Social Justice Idealists running governments (not exclusively left-wing governments) there have been that always have preferred (criminal) coercion (of force and fraud) to paying a higher price so as to get the “people” to conform to the desired Idealistic system and its goals. I would not accuse Quartermaster General Erich Ludendorff of the Imperial German Army of World War I of Marxism. But he was a Social Justice Idealist when he modernized the political organization of a state-run Socialist War Economy in WWI Imperial Germany. He would be in the top 10 Hall of Fame of history’s most effective and significant Socialist Economic Dictators.
[How few people know that, before the Korean War (1950-53) established the borders and populations of Socialist Idealism in the north, most of the population and industry of the Korean Peninsular were always in the north. While the population of South Korea rose to a fundamentally modern science and technology way of life – it is as if the North Korean people only saw their standard of living for the common citizen rise from the 1950’s level to the 1970’s level during the last 60 to 65 years.
[Before Castro subjugated Cuba, it had the 3rd or 4th highest standard of living in all of Latin America. I’ll bet no one has taken the little boat trip from Haiti to Cuba in over 65 years – since the great Social Justice Revolution (during which time tens of thousands of Haitians drowned trying to get to the far more distant Florida in private property ownership USA.]
At any moment in time, the location where the two diagonals crossed represented “balance” between Supply and Demand, where Price vs. Quantity are at what in a typical “natural law” explanation would be called the “equilibrium.” You run into that word (“equilibrium”) quite a lot in natural science because real scientists really studying nature are always looking for stability (“equilibrium”) rather than accepting incomprehensible “chaos.”
[Physics and Chemistry often start out using the word “entropy” to label the “randomness” of nature. Ersatz Sciences pretend they have mostly figured out all that confusion. There is an awful lot of Sophistry (and an awful lot of simpler forms of bullshit) in the prestigious (ersatz) sciences as taught in the prestigious institutions of Higher Education (by the most prestigious of University Sophists).]
The whole point of the (Supply and Demand) exercise could be seen as a verification that everybody in Human Nature has Free Will.
[Even the second natural law in economics is also largely based on the fact that everybody in Human Nature had Free Will. This second law is called the Law of Diminishing Returns. If you live long enough, you will find all kinds of analogies and illustrations in nature. In Economics it means that, if an activity called A causes a consequence B, as time goes by the effect B tends to be less pronounced than when first discovered. Other possible choices enter the world of human nature and thereby mitigate the aggregate number of A leads to B choices. Human nature is just too complicated for simplistic assumptions of what seems to influence human behavior to be able to assume it would universally influence all of Human Nature identically forever.]
I wish I could remember the professor’s name. He was one of only 3 exceptional “teachers” I encountered in college. He actually taught Economics rationally, which even back then was not all that easy to do. The course, Economics 101, required purchase of the latest version of arguably the most widely purchased college textbook of the late 20th century. For decades (during which minor updates led to “outdated” prior editions in the used-book Agora) Paul Samuelson’s textbook on “MacroEconomics” was the standard textbook for Economics 101.
[Think of the copyright royalties! In my college days a $10 textbook cost twice as much as a NY Times top-ten Best Seller novel (and 20 times as much as a bleacher seat at Yankee Stadium, or 10 times the cost of a local movie theater ticket, or 1/10th the cost of a 10-inch black and white portable TV – prices vary a lot over time no matter what Economists think sensible!) At least the real science and real mathematics and real history and real literature textbooks back then were useful and honest and worth saving.]
Without even looking at it, I consider Samuelson’s textbook a compendium of Politically Correct Sophistry, less whatever mention is actually made of the Law of Supply and Demand and the Law of Diminishing Returns. Paul Samuelson was the 3rd or 4th annual winner of the Oscar Award for Economic Showman, several years after I graduated CCNY. As best I understand history, in the period of 1989-91 when the Gorbachev-led Soviet Union gave up the Marxist Social Justice Revolution Ideal and its totalitarian structure of imposition (and the Cold War, at least for a time, came to an end), “MacroEconomics” by Paul Samuelson was still the standard Economics 101 textbook in Americian Higher Education.
It was also exhibiting the irrational nature of the ersatz science of MacroEconomics by affirming the successful economic development of the Official Soviet Economics statistics. Those Official Soviet Economic statistics were Platonic and theoretical numbers based on Idealistic politics – and refuted by practical reality.
I have no idea how many years it took to remove the pro-Soviet bullshit, or even if it ever was removed. Furthermore, I have never heard of Paul Samuelson’s returning of the Nobel Prize or the no-doubt tens of millions of dollars of copyright royalties of his apparently bogus textbook. The way one to two generations of college students are taught the mythological virtues of the Socialist Delusion, they may still be using the old editions. (I’m sure the price is astronomically higher than $10. And I’ll bet it no longer comes in high-quality sewn-binding long-living hardcover editions.)
Econometrics is a fancy way of saying engineering-like numbers are reliably discovered or accumulated. It is that requirement of reliability that real science and real engineering provide so that which is constructed does not collapse due to internal stresses that are not understood and rationally provided for.
Let me explain with two civil engineering examples from history.
Roman legions marched in step all around the Mediterranean-centered Roman world for many centuries. A funny thing happened once in a while. Occasionally, while marching across one of a thousand bridges, the bridge would collapse. Legionnaires were injured and died. Not very efficient!
It was discovered that, if the legions were out-of-step, the collapse could not occur. Marching temporarily out-of-step over bridges was a useful (if not yet scientifically understood) military standard for centuries.
Close to a thousand years ago, the construction of gigantic Gothic-style Cathedrals in a few separate historical Northern European locations each took place over multiple generations. The competition to build an ever-higher nave to allow more light into the interior led, at a place called Beauvais in France, to the highest ceiling height of the era. Something close to 147 feet from the ground was the design.
Unfortunately the weight of the roof could not be supported by the strength of the supporting walls. No one knew enough about civil engineering and internal stresses in materials and architectural constructions in a scientific way to overcome the failure.
At least the Social Oligarchy in charge of Gothic Cathedral construction back then had the humble good sense to not tempt nature in an unreliable, unscientific way again. No one ever again tried to raise a roof that high, until natural scientific understanding of materials and civil engineering made it reliable to do so many centuries later.
As far as I know it is perfectly legal for Investment Banks and other heavily-regulated financial institutions to still sell Credit Default Swaps for high cash fees. The Social Oligarchy of today must have lots of “Peer Reviewed” MacroEconomic Scientific Research to affirm the supposedly rational nature of such an approval. That would all consist of the ersatz engineering field they call Econometrics. It was for selling the idea that Econometrics was reliable that its most forceful promoter received the very first Nobel Prize for Economic Science in 1969.
Way back in the 18th century in France, an honest scholar studying economic activity (whose name escapes me right now) pointed out a critical error that a number of his colleagues were making. By adding up all the financial transactions they arrived at ever-growing aggregate economic numbers. They were supposed to show how wealthy France was becoming. He pointed out the distinction between creating wealth by production of useful and fungible goods and services vs. the destruction of wealth by (purchased) consumption.
His little anecdote is ironically called “the broken window theory of economic development.” He said, if you just go around breaking windows that have to be replaced, you do not create wealth by the added production and installation of windows – you destroy wealth by spending it to return to where you started before you “progressively” broke the windows in the first place.
Spending wealth on consumption might spread the money around, but it does not make the whole society richer – it makes it poorer instead. I do not think we have had a politician since Ronald Reagan and Margaret Thatcher who was rationally wise enough to realize increasing aggregate “consumption” is closer to being the opposite of the great post-modern cliche called “growing the economy.”
That fatuity of spending your way to wealth is a consequence of the irrational ersatz science of “Peer Reviewed” MacroEconomics and its bullshit ersatz engineering ancillary “Peer Reviewed” Econometrics. It is no accident one of the earliest Nobel Prizes went to another fool for aggregating (often contradictory) numbers in financial activity into the so-called Gross Nation Product. Some of those numbers are “productive.” Some of those numbers are “consumptive” (or even destructive). And others are simply meaningless. Contradictions do not slow down the production of ever-greater volumes of Peer Reviewed MacroEconomic (ersatz) Scientific Research. It makes me wonder how much money from what sources pays for all that Sophistry. Am I the only skeptic left now that Ronald Reagan and Margaret Thatcher are gone?
That brings me back to that wonderful professor whose name I forgot who pretty much ignored the regular bullshit, and explained the Law of Supply and Demand and the Law of Diminishing Returns.
I took this course during a summer session in either 1964 or 1965. The year is important.
In 1964, somehow, a libertarian and conservative candidate from Arizona, Senator Barry Goldwater, with a very grass-roots non-intellectual common-citizen campaign managed to secure the presidential nomination of the Republican party.
Either my economics professor was the only political conservative among the faculty of CCNY or, alternatively, he was completely (and non-politically) immersed in rational Economics. (Probably the latter.) He mentioned the name Milton Friedman, who he described as Goldwater’s economics advisor. Naturally pretty much the whole class laughed at the idea of such a backward moron (the universally implied nature of Goldwater’s intellect in the schools, the university and the NYC and national media of the day) seriously requiring an economics advisor.
The professor ignored the extraneous social opprobrium and proceeded to explain the scientific research that Milton Friedman had already published for “Peer Review.” (In 1976 or 1977, Milton Friedman finally won a Nobel Prize for Economic Science which unlike the regular MacroEconomic bullshit was quite scientifically based on the natural Law of Supply and Demand.
Milton Friedman’s Economic research, as best I as an amateur understand it, is based on a study of all the reliable data in human history studying the interaction between two variables. They are the “prices” of the basics of human life vs. the “Aggregate Money Supply” (meaning that which can be used to purchase the basics of human life in a civilized society).
It seems kind of counter-intuitive that virtually all the prices (of even food and drink) rose in Spain when the Monarchy regularly brought back so much gold and silver from the Spanish colonies of the New World. But it happened. Put a lot of rich foreigners in UN agencies in Swiss cities and you can be sure the price of purchased or rented housing at a very minimum is going up. Not a problem for the affluent – only the common middle-class types have to make rational (or otherwise) choices.
By 1965 or 1966, almost all national governments had been pressured (by the worldwide Social Oligarchies) to give up the gold standard for money. (Politicians using trickery instead of honest Accounting and Supply and Demands Economics are always eager to spend more than that which can rationally be afforded – an understandably temporary policy during Civil or World Wars for real survival.
In those days, Central Banks were printing money all over the world. In 1970 the United States joined the great march into unconstrained financial irrationality by finally going off the gold standard too.
(Kind of makes you wonder why those Central Banker geniuses still retain Central Bank ownership of all that gold bullion they only sometimes rent out for speculators to trade on the regulated commodity exchanges. Maybe they ought to switch to “Bitcoins” on the internet?)
My economics professor drew his basic Supply and Demand curves on the blackboard as he explained (a la Milton Friedman’s research) that countries will have to trade their currencies to be able to trade goods and services without a gold standard. If there are too many French Francs relative to British Pounds, the value of the French Franc will decline or the value of the British Pound would rise or both.
Nature is what Nature is. And Sophistry is just bullshit no matter how sophisticated the fancy rhetoric.
By the way, the strangest anomaly to me is the fact that back in the 1960’s, a man named Alan Greenspan was the leading economic advisor to Ayn Rand and her following in what she called (Libertarian) “Objectivism.” (She was reputed to call him “the undertaker” because of his drab business wardrobe even back then – apparently she had a sense of humor.)
Sometime in the 1980’s, in paperback form, I read quite a lot of Ayn Rand’s essays from the 1960’s. (Some of it made sense to me and some did not. Everybody has his own version of “rational” opinion.) A few of the essays were authored by (and attributed to) one of her acolytes. In July 1966 (about 3 years before the invention of the Oscar Award for MacroEconomic Showman), the essay titled “Gold and Economic Freedom” (by Alan Greenspan) begins with this sentence: “An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions.” It is quite an interesting little six pages, especially the latter portion where, like a then rational Economist, the author traces both the corruption of the international gold standards by politicians of the then world-wide Social Oligarchy, coupled with the largely co-terminus in time negative propaganda campaign (blaming all economic dislocations on the gold standard) carried on by the “progressive” political activists of the then Social Oligarchy (even reversing cause and effect as they so often do in their irrational Idealistic speculations).
Yes, it was that Alan Greenspan – the famous retired Central Banker. Remember when he was called the Zen Meister? Remember those occasions when he reassured the ignoramuses of Congressional Committees with those memorable words, “The Economy is only going over a soft patch.”
A couple of decades later he was succeeded by a much younger fatuous MacroEconomic Scientific Researcher (and Sophist) whose world famous expertise was reputed to be his re-interpretation of Central Banker mistakes as easily correctable way back during the 1930’s worldwide Great Depression. Does anyone remember how many years passed while he annually reassured a new complement of the ignoramuses of Congressional Committees that he kept seeing those hypothetical “green shoots” of economic recovery. That rhetoric was thankfully but belatedly dropped into the “memory hole” of Economic history some years ago – kind of like the temporarily worshiped “Portfolio Insurance” prior to 1987.
I’m hoping the assholes of the MacroEconomic-advised Social Oligarchy have the minimal level of common sense necessary to make Credit Default Swaps illegal (since there can never be an adequate amount of “seller” capital to quantify and contain the risks).
After all these years, I guess I am hoping against hope – since like the Socrates of my book, I feel like the last rational man in a world gone crazy.
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