Thanks.

Your comment reduces my confidence that I understand the term "externality". Until I read it, I tentatively believed that "X has positive externalities" means that X is an action taken voluntarily by a person (or firm) and has positive expected global utility. Most economic discourse assumes that all voluntary actions taken by a person (firm) have positive expected personal (organizational) utility. But in the present environment, counterfeiting money has according to my models negative global expected utility by reducing (by a small amount) the value of every asset denominated in the currency being counterfeited (e.g., cash and loans). (Counterfeiting is a member of the class or set of a diffuse harms, which by the way do not seem to get the attention they deserve here on Less Wrong.)

(Buying junk I do not want has negative global expected utility, too, under my models.)

Depends.

If the potential perfidy of humans is not counted for in your solution, then it's a fail.

Humans lie, cheat, and steal. Especially when the system is policy is designed to encourage that behavior.

Don't hate the playa, hate the game

-- Ice-T

Or, as the Urban Dictionary puts it:

Do not fault the successful participant in a flawed system; try instead to discern and rebuke that aspect of its organization which allows or encourages the behavior that has provoked your displeasure.

A meta-comment: It's always good to have an arsenal of mainstream-accessible quotes to use for those times when explaining game theory is just loo much of an inferential leap. I'd like to find more of these.

James,

Nice of you to drop by and comment -- I still remember that really interesting discussion about price indexes we had a few months ago!

One thing I find curious in economics is that basically anything studied under that moniker is considered to belong to a single discipline, and economists of all sorts apparently recognize each other as professional colleagues (even when they bitterly attack each other in ideological disputes). This despite the fact that the intellectual standards in various subfields of economics are of enormously different quality, ranging from very solid to downright pseudoscientific. And while I occasionally see economists questioning the soundness of their discipline, it's always formulated as questioning the soundness of economics in general, instead of a more specific and realistic observation that micro is pretty solid as long as one knows and respects the limitations of one's models, whereas macro is basically just pseudoscience.

Is the tendency for professional solidarity really that strong, or am I perhaps misperceiving this situation as an outsider?

As an economist myself (though a microeconomist) I share some of your concerns about macroeconomics. The way support and opposition for the US's recent stimulus broke down along ideological lines was wholly depressing.

I think the problem for macro is that they have almost no data to work with. You can't run a controlled experiment on a whole country and countries tend to be very different from each other which means there are a lot of confounding factors to deal with. And without much evidence, how could they hope to generate accurate beliefs?

Add to that the raw complexity of what economists study. The human brain the most complex object known to exist and the the global economy is about 7 billion of them interacting with each other.

None of this is meant to absolve macroeconomics, it may just be that meaningful study in this area just isn't possible. Macro has made some gains, there's a list of things that don't work in development economics and stabilisation policy is better than it was in the 1970s. But apart from that? Not much.

Left vs. Right still tends to take two tries.

It's not climate science, it's mathematics. The probability of a specific number being the highest in a sequence goes down rapidly as the number of items increases. And it's not like the temperature is doubling every year, either.

I believe Harry considers some punishments completely out of bounds, too severe for anyone. Certainly I do. The following may have no connection to the real reasons for this; but even without Many-Worlds you have a non-zero probability of personally suffering any possible punishment. Legally allowing a given punishment for anyone seems to produce a non-zero increase in this probability (even in a world without Polyjuice). Some possible punishments may have such negative utility for you that a course of action which avoids such increases, but which almost certainly leads to your death, would still have positive utility. Azkaban seems like a good candidate for such a punishment.

I've found that theft, when it comes to worldbuilding, is cheaper and more effective than making things up wholesale. Or at least less prone to producing apostrophe stew.