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Brian_Macker comments on Worse Than Random - Less Wrong

25 Post author: Eliezer_Yudkowsky 11 November 2008 07:01PM

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Comment author: Brian_Macker 13 November 2008 01:54:47AM 3 points [-]

"'Emergence';, in this instance, is an empty buzzword.

Buzzword in this instance is a buzzword. This sentence is merely an assertion. I read that article before I wrote my argument. The phrase, "emergent behavior" and the word "emergence" have a specific meaning and it isn't about giving a "mysterious answer to a mysterious queston".

For example, Mises can and does give a complete and non-mysterious explaination of how the business cycle is a result of fractional reserve banking. Likewise, he can explain how market prices arise, and why markets clear at the market price. All in a very reductionist fashion.

"Imagination" also seems likely to be an empty buzzword, ..."

No, it's has the same exact meaning as in "Creationist lack the imagination to understand how evolution works." or "Behe, lacking the imagination to understand how eyes arose proposes the concept of irreducible complexity".

"Markets do *not* allocate resources anywhere near optimally, and sometimes they do even worse than committees of bureaucrats; the bureaucrats, for instance, may increase utility by allocating more resources to poor people on grounds of higher marginal utility per dollar per person."

I didn't use the word "optimally" anywhere in my comment. I said it "solved the problem of resource allocation."

The rest of you statement is just a bald assertion. In fact, "allocating resources optimally", is an ill defined concept. Allocated optimally in reference to what value system? The very concept of thinking you can make a utility function in the way you construct it is absurd, and ignores factors of that wealth redistribution that would harm the very poor it was suppose to help. Actual real world experimentation with redistributive systems like communism have shown it to be a bust.

Your statement is true in the same sense that it is possible by brownian motion for an elephant to fly. Markets are analogous to distributed supercomputers where each individual participates as a processor and prices are the signaling mechanisms between the processors. If you mess with those signals you get predictable results, depending on what you do and what kind of price you mess with.

"If you think you know more than Bernanke, then why haven't you become rich by making better-than-expected bets?"

Wow, you assume a lot. Firstly, my mother was a sharecropper, and my father a poorly paid college professor. I paid my own way through college. So it's not like I had a big nest egg to invest.

I did however predict the surge in sliver prices. I did converted my IRA to bullion. I did quadruple my investment in four years.

Besides, it's not the position of my theory that you get rich by understanding economics. That's your ridiculous claim. Did you apply that theory to Greenspan or Bernanke? Why in the world aren't all these economists retired rich? I mean that's your theory, right?