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I looked him up after reading this post, his blog seems to have a few interesting things but nothing epic. Could someone link me to things they find particularly impressive/interesting?
(For the record I have no memory of him being mentioned before,)
On economics, these two essays are very impressive (& useful - in the sense of map matching territory):
The entire Economics sub-section at http://moldbuggery.blogspot.sg/2009/03/collected-writings-of-mencius-moldbug.html?m=1 is worth reading.
Am making my way though his non-Economics writings now. These two are impressive:
P.S. I have been reading LW for years and signed up due to this discussion. Hello from Singapore.
I am also a long-time LW lurker, and this thread finally made me open an account. I've read most of the main Moldbug sequences (Cathedral/neocameralism/economics) over the past few months.
I was very pleased to find that this thread existed, particularly in the context of the phenomenon identified in that essay which coined the term 'insight porn'. I had previously expended many brain-hours pondering the nature of this set of closely affiliated ideas, and I still don't think I have entirely satisfactory answers.
http://theviewfromhell.blogspot.co.nz/2012/09/trying-to-see-through-unified-theory-of.html
Upvoted for practicing what you preach.
(None of the linked articles are among what I'd recommend, however. I can't say if that's because I can't understand them and am biased, or because they are mostly hot air and rhetoric.
I cannot comment on Austrian economics as I don't know what to believe about any economic theory at all, but here, in 1998, Krugman criticises it as a morality fable that doesn't, in Bayesian terms, pay rent in anticipated experience - and in modern times, he sustains his criticism of its descriptive and predictive worth. Here is some other economist's brief slam of Austrian epistemology.
Generally the Less Wrong 'mainstream' seems to dismiss it out of hand for its non-empiricism and incompartibility with Traditional Rationality.)
Very enjoyable, but not particularly rigorous compare and contrast of Keynesian and Austrian economics here and sequel.
My favorite quote (put in the mouth of Hayek in the second video around 3:40): "If every worker was staffed in the Army and Fleet, we'd have full employment - and nothing to eat." (This is aimed at the Keynesian argument that WWII ended the Great Depression.)
Personally, I'm doubtful either theory is better - they both run on fundamental assumptions about what is happening in the market. But if the actual market resembles neither assumption, both predictions will be very misleading.
When it comes to monetary theory, there are no controlled experiments possible. So, one has to use deduction. Moldbug's article above on 'Crash Course in Sound Economics' is a masterpiece on the topic and thus an excellent starting point. When I introduce the topic of questioning the quality of mainstream economics to friends, I put it this way: "All the various mainstream economic theories cannot be simultaneously right. So, given the number of mutually exclusive theories and the fact that controlled experiments are not possible, one has to deduce from first principles. So, let's do that."
When one deduces from first principles, one just so happens to end up with Austrian (Misesian) Economics. The deduction is not complicated. For LessWrong members, it will be easy, I think.
Misesian Economics does make predictions (i.e., pays rent) but the predictions are about whether a certain economic policy is good or bad for the economy and whether the policy is sustainable. It does not claim to precisely predict either magnitude or timing of economic disruptions caused by bad policies, because the disruptions are dependent on economic actors reacting to both new economic information & to other peoples' reactions to the same information. Given the economic policies we are currently being subjected to, the rent, that a study of Misesian ideas will pay down the road, will likely be substantial.
For those who prefer books, I suggest reading both 'Paper Money Collapse' and 'Currency Wars', in that order. If anyone here is also studying economics (given the economic developments in the last 5 years, I imagine some might be), I would enjoy a discussion.
P.S. With all due respect to Prof Krugman, he is not only wrong about Misesian Economics, he does not even properly understand what he is criticizing. His advice about how to end the current economic malaise is incorrect and thus harmful (though well-intentioned). Those who follow the financial news would have noticed a Prof Sumner being hailed as having "saved the US economy" because his idea of NGDP-targeting has in effect been adopted by the Federal Reserve. Prof Sumner does not seem to understand Misesian Economics either and his advice is also incorrect and thus harmful (and again, I am sure, well-intentioned).
Here is a quick test one can do: Read what Prof Sumner says about Prof Krugman's theories and vice versa. So, who does one follow: The Nobel Laureate or the man the Federal Reserve seems to be following? Perhaps neither? We certainly cannot follow both, if we have any interest in even superficial coherence. And, given the importance of the topic (the wealth of billions), I think we should aim for the highest level of coherence that is humanly possible.
The leap from "controlled experiments are not possible" to "one has to deduce from first principles" is huge and unsupported. The results of controlled experiments do not exhaust the available empirical evidence by a long shot. We have a lot of data about the effects of monetary policy from around the world. True, inferring causality from this data is not nearly as straightforward as inferring causality from a randomized controlled trial, but it's still a lot more reliable than deduction from first principles, I would think.
Think about how your argument sounds when applied to cosmological theories about the very early universe. We have a number of different theories that cannot be simultaneously right, and we cannot conduct controlled experiments. Would you endorse deduction from first principles in this instance as well?
Yes, whenever people try to make this sort of argument I have to wonder how they think we should do astronomy.
Please see my reply above to pragmatist.
To add a bit, the rigor in monetary economics today is so far behind physics, it is not fair to compare the two subjects. It is an insult to Physics.
...it's still a lot more reliable than deduction from first principles...
I know it's been a while since this comment, but I wanted to comment that sound deduction (ie, logical reasoning) on top of correct premises trumps other forms of evidence, even well-controlled, large-sample experiments. Or put another way, the former renders the latter superfluous. We should not simply take anyone's word for the deduction of course - we have to double-check the premises and understand the deduction step by excruciating step. But once one is satisfied that the premises are correct and the deduction is bullet-proof, one can sleep soundly :)
Nothing trumps sound reasoning. The scientific method itself is a result of reasoning, a point well made by Moldbug here: http://unqualified-reservations.blogspot.sg/2010/06/three-homeworks-for-professor-hanson.html
As an analogy, I find fascinating the MWI vs Collapse debate at LW - Eliezer has concluded MWI wins as an outcome of pure reasoning. No empirical evidence required. It will be (is?) wonderful if (when?) we factorize large numbers quickly and that is evidence of MWI, but as above, it would be (is?) superfluous. If the reasoning offered by Eliezer is coherent (I don't know enough to judge), case closed. Please correct me if I have misunderstood. Thanks
Edit: MWI paragraph added.
Inferring causality from a time-series of various economic variables is incoherent. There first needs to be a deductive understanding of what the causal relationships are between economic variables. That is what is meant by "first principles" here - perhaps the disagreement is semantic.
Data about effects of economic policy tells us nothing if one has not already pre-supposed causal relationships between certain variables (ie, which variable is affecting which). If one had not done so, how does one know which variables to link with which other one? The causality which is being claimed to be derived is actually assumed or it is a result of the data-mining effect.
More importantly though, I suggest (for what it is worth) that you ignore my comments which are replies to others' comments and try the original article. It repays inspection.
I have no expertise in cosmology. So I have no opinion on that which is worth stating. The only comment I have is that Physics has causal relationships clearly defined and known. The different theories thus could make different testable predictions about what we should expect to see in the here and now.
In economics, the different schools (more accurate to call them ideologies) do not agree on basic causal relationships between variables. In more than one case, one of the main tenets (of a popular ideology) is plain, flat-out incorrect, and sometimes definitionally misunderstood. I know it may be hard to believe that monetary economics is that shaky a subject, but it is. The last hundred years have been a regression when it comes to monetary economics. Thus, the first principles analysis: What is an economy?
I will read the Moldbug article, although I have to say I'm not optimistic, given my past experience with his writing. But I do want to disagree on this:
I think you are either underestimating the tools at our disposal for causal discovery, or you have an evidential standard for causality that is way too high. Are you familiar with Judea Pearl's work on inferring causation from probabilities? Check out this sweet post by Eliezer if you're not.
ETA: I'm only a few paragraphs into the Moldbug piece and my hackles are already rising. He has already declared that a conscious being must be rational "by definition" and that other peoples' desires are unknowable, also "by definition". I don't think either of these claims are true (assuming the words have their usual meanings), let alone true by definition. This doesn't bode well, but I'll keep reading.
Thanks. I have read that post by Eliezer before. The issue with monetary economics is the number of variables. Money is one half of every single transaction, in a sophisticated economy. A sound economist's standards for evidence are not any higher than anyone else's, or should not be. It is just that the array of variables is huge and gathering enough data for inferring causality, in the way the post shows, is a pipe dream. Solution: deduction from first principles.
Economists assume certain causal relationships and just screen off everything else. This is so wrong, it is tragic. And its results will be tragic too. The last 5 years were a warm-up act.
Re definitions, the meaning of rational there is that the person acts based on his internal map of the world (this is how Mises used the word way back when and it is part of parlance in Misesian economics). It does not mean what LW thinks it means.
Re unknowable desires, it is a way of saying that economically relevant desires are revealed by economic actions. Demand means being willing and able to pay.
Semantic issue in both cases :)
Economies that have multiple currencies are unsophisticated...?
I mean that in a monetary economy, one always buys goods and services with money. One side of the transaction is money, whatever it is. Sophisticated here means an economy that has progressed beyond barter and developed a medium of exchange and a store of value, ie, Money.
Important to note separately that multiple currencies are results of legal tender laws. In the absence of such interference, the market would choose one commodity as Money (refer the linked article) and it would not be paper with ink on it. Yes, what could happen is that the chosen commodity is then represented by pieces of paper, but they are simply a more convenient token for the commodity, which is kept in store. And there could be multiple different papers with different names, but they all refer to the stored commodity and are thus economically equivalent and with fixed ratios among them. This economically sound system used to exist - close enough - in the 19th century.
Even now, the various currencies are not different in any meaningful economic sense. Non-US countries use the USD as the reserve for their own currencies. Some also use the Euro, Yen etc. But analyze the Euro and one sees tender laws and gold standing behind it. What stands behind the USD? Laws and legitimacy of the govt enforcing those laws. There is gold, which would be called upon if peple reject the currency as it is. We need to separate the surface phenomena from the economic relationships underlying them.
If I replace "economic variables" with "astronomy" what part of this sentence changes in implication? Why is this incoherent for some fields? The level of rigor cannot be the only difference: Physics and astronomy have become more rigorous over time, not by discussing first principles, even when moving from Aristotle to Medieval physics to Newtonian physics, but rather by adopting principles based on the empirical data. The same goes for the switch from Ptolemaic systems to Copernicus and then Kepler. It is the empirical data that matters, the apparent time-series of planetary and stellar motion.
Does arguing over this definition pay any rent?
One can do controlled experiments in physics here on Earth and apply the results to astronomy.
So that's true, but until the late 1700s (essentially post Newton) no one had any capacity to do so (because no ideas anyone had connected the two at all in a useful way). Would this sort of claim then been valid in 1650?
Re the Q about rent-paying: Yes. You should rightly be skeptical now, but please read the Economics sub-section at Moldbuggery with an open mind. Or if you prefer, start with Rothbard's 'Man Economy and State'.
The reason I linked to Moldbug's articles in this thread (indeed, this thread being only reason I signed up instead of lurking) is cos I have seen it said in LW that Misesian economics is incoherent, anti-empirical etc. With respect, people who say that are making a mistake. But what is germane is not the mistake, but the financial effect it can have.
Economics - of all subjects - pays rent. Maybe not in the short term, but eventually and especially when the central banks of the major economies are doing effectively insane things.
This doesn't answer the question. Note that no one is arguing that economics doesn't pay rent. The question was whether arguing over '"what is an economy" pays rent or not.
I misunderstood the Q. In my opinion, yes. There is no other way to get a sound (ie, based on sheer deductive coherence) grasp of the subject. So, attack the issue for yourself:
http://unqualified-reservations.blogspot.sg/2009/07/urs-crash-course-in-sound-economics.html
http://unqualified-reservations.blogspot.sg/2011/04/on-monetary-restandardization.html
The first one has a very minor error btw - prob a typo. Good exercise to find it. A friend of mine just pointed it out to me.
Re Physics, please correct me as required but in the way I use the phrase "first principles" here, Physics does not have any first principles. Physics is observation, hypothesis, experimentation and repeat. After a certain hypothesis has sufficient amount of experimental proof behind it, it becomes a theory and thus the foundation for further work. And occasionally, we find that there is a variable missing in the theory as the experiments did not test the situations that that variable speaks to. Then we test to tease out the nuances of that aspect of reality. And so on.
Economics has first principles, in the sense I use the phrase. Thus the Q: What is an economy? It leads to those first principles and then deduction covers the rest. But one can of course get the first principles wrong and the deduction is then useless.
Yes it does. They're just so implicit in our intuition about how the world works that we don't notice them. For example, consider all the implicit assumptions necessary for statements like "these two sticks have the same length" to be meaningful.
So, why does physics have no such first principles but economics does?
If you didn't accept the wisdom of the Federal Reserve before in its policies and theoretical choices, why would you accept the wisdom of the Federal Reserve after they have supposedly begun listening to Sumner? Why, indeed, does their choice matter at all to someone considering whether to believe Krugman, Sumner, or neither?
You are right - the Fed's choice does not matter if one treats economics as a subject to be mastered.
Let me clarify. This test is not for anyone studying the topic from first principles. It is for anyone who places trust in a prominent economist simply because the economist is prominent. Nobel Memorial winners and Central Bank members are the most prominent economists there are. The new Fed policy has thus caused mainstream media to focus on (read: hype) Sumner's ideas. This is unfortunate because people with a casual but growing interest in economics tend to start by reading (& believing) the writings of whichever prominent economist they come across first - remember the theories are unfalsifiable by experiment and are essentially just-so narratives - and from there, the "politics kills mind" effect may take over. Thus, this test, which pits prominent economist against prominent economist and aims to remove the halo caused by the path-dependence of which economist a person read first.
It does not always work, but if a person is genuinely curious about Economics, this test might help them wipe the slate clean and start over from first principles. My recommendation: http://unqualified-reservations.blogspot.sg/2009/07/urs-crash-course-in-sound-economics.html
From the article:
This statement is misleading economics - markets work because individuals preferences do not match the general consensus. Because of comparative advantage, there's no particular reason to expect individual valuations to ever exactly match the market rates.
Later, Moldbug notes people want accumulate money, but rejects the explanation that it is valued because it is the medium of exchange. It is confusing when the monetary object is actually of some value (i.e. gold or silver), but no one uses the gold standard any more. There's really no reason to treat fiat money as a good. And all of the discussion assumes that treating money as a good makes sense.
Finally, Moldbug's discussion of the transition from gold-standard to fiat money without discussing private currency at all seems like more selective history. All selective history is worthless - it's like throwing out all the data from an experiment that does not agree with your hypothesis.
My responses, based on my current understanding, such as it is.
Note the qualifier "marketplace clears". In the process of clearing, a market undergoes price-discovery and any arbitrage opportunities are taken and thus removed.
In a pre-monetary, fledgling economy, there could be two or more commodities which simultaneously serve as mediums of exchange. What makes one of them the choice as Money is that the economy grows to a point where there is significant surplus wealth to be stored and one of the commodities wins that competition. The win may have nothing to do with any unique attribute - randomness could easily tilt the competition a certain way. In an economy where people have generated and thus wish to save their surplus wealth, one dominant money will arise (because of the winner take all effects described). And it will be one of the mediums of exchange from amongst which the store of surplus value will be chosen. Fiat money is a good, in economic terms. It exchanges for other goods. It is currently Money cos it is used by people to store their surplus.
The purpose of the article is not a detailed historical account. It is an explanation of sound monetary economics. It's purpose and its value is in the deduction. The full history of monetary evolution is not germane to the deduction.
"Marketplace clears" doesn't imply that everyone agrees that the price = the value. McDonald's has cheeseburgers on sale for ~$1. That's probably the market clearing price. I still don't think a cheeseburger creates $1 of value for me.
If Moldbug makes a basic econ error (by conflating value and price), then there's no reason to trust any other part of his "return to first principles of economics."
"exchanges for other goods" is a bizarre definition of good. The hoarding-of-physical-objects metaphor is misleading.