Steve Keen's Debtwatch

Discussion (51) ¬

1. 
   Christopher Dobbie

   June 11, 2009 at 1:38 am | #

   Philip,

   Why does Cladogenesis happen in the first place?

   I’d hazard that most of large evolution adaptations occur after exogenous shocks to the system creating and destroying niches in the process.

   The phyletic gradualism that Stephen and Eldredge criticise would be the arms race that we see evident in species like the cheetah and its prey the antelope, both have a need for speed. If one becomes too successful then the other would die out.

   But that doesn’t seem to happen, it’s not until a large environmental change takes place that things get interesting.

   So for as much as its worth, I don’t think the present economic class really need to know how the system works as long as it does. They could all make a pilgrimage to the pythoness and get the good news for us rather then have some abstract economic model predicting the show (strangely they don’t anyway). It just doesn’t matter, as long as the we continue to eat our fill change isn’t nessarsary.

   The danger is having the fiduciary system controlled by the banks, with their ability to create credit, forcing excessive inflation on the population and the subsequent need to expand and exploit resources to counter this, an exogenous shock will occur when the carrying capacity is exceeded.

   Steve’s right, this present GFC will pass and we’ll get back to the main show of exploiting. Its when those limits that allow this are breached will Cladogenesis occur. Not some abstract theory being disseminated through the population.

   The peahen doesn’t care.
2. 
   Tel

   June 11, 2009 at 9:53 am | #

   A case in point in the animal kingdom is the peacocks tail, not regarded as a utilitarian piece of evolution but without it you’re toast in the peacock world.

   It is utilitarian. It gives peahens a ready gauge to the health of her prospective partners, and it gives the peacock a better chance of mating. The species as a whole benefits from the healthiest males being chosen for future generations.

   It is no different to human males buying a very expensive suit, and a fast car, in order to give the impression of success and wealth (although human females are more easily fooled than peahens, technology moves faster than brain adaptation).

   This is explained in a book called “the Red Queen”.
3. 
   Christopher Dobbie

   June 11, 2009 at 11:15 am | #

   Tel,

   It’s a flamboyant means to ascertain genetic health, it can’t possibly be described as utilitarian. You’d be turning the whole meaning on its head to make it fit that assertion.

   What I’m trying to highlight is the the driving force behind the tail. Its not the peacock, its the peahen.

   So if you consider the neo-classical economist as the ‘peacock’ the you can understand that it doesn’t matter what the plumage is as long as its what the ‘peahen’ wants that does.

   This tail creates a higher level of predation but on the converse results in selective advantage to the peacock.

   With the advent of the central nervous system a new level of evolution commenced: Memes.

   This needs to be considered when economic theories are proposed. As much as they can describe a system they are still only an abstraction of reality.
4. 
   height

   June 11, 2009 at 12:01 pm | #

   Tel,

   You seem to be arguing an evolutionary psychology perspective. There is considerable debate within psychology and evolution of the merits of this research program.

   One interesting point I’d like to make is that there appears to be a divergence between biological rationality and instrumental rationality. What that means is that the goal of genes (to reproduce) has diverged, through the course of evolution, and we are a vehicle of our genes have our own goals and desires which are separate from that of our genes.
   A good analogy to consider this point is of a human and his dog. The human represents the genes, whilst the dog the vehicle for the genes. When a dog is taken out on a walk they are restricted on how far they may go by a leash. The length of the leash will determine how ‘free’ or how much the two diverge. When the dog is taken off the leash its ‘rationality’ has almost completely diverged from that of its masters. Similar the same could be said in regards to humans. Whilst we are vehicles for our genes we have been let of the leash.

   The usual counter to this by this is that we have a brain that has evolved tools from our early evolution. The debate then begins on defining what our brain is, is it a Swiss army knife or is it a General purpose problem solver. The former is obviously supported by evolutionary psychology explains why we behave certain ways, as you suggest. The latter is not compatible with the claims of evolutionary psychology. It suggests that we have not evolved tools from our early evolutionary history. Rather we adapt and modify our surrounding environment to suit our needs.

   Just some food for thought. I am in no way an expert on the topic. I’ve only done some cursory reading of the topic.

   Some books that I have read that are particularly interesting are:

   Buss D.M. 1994. The Evolution of Desire: strategies of Human Mating. New York: Basic Books

   Over, D. 2003. Evolution and the psychology of thinking the debate. New York: Psychology Press inc,

   Richardson, R., 2007. Evolutionary Pschology as Maladapted Pschology. MIT Press.

   You could also watch the movie Gattaca. It makes the argument that we are ‘more than the sum of our genes’.
5. 
   Ernest

   June 11, 2009 at 12:26 pm | #

   Anarcho,

   What is the address to your website again?
6. 
   tommyt

   June 11, 2009 at 12:38 pm | #

   Can someone please BEGIN the “counter revolution…” quickly? ABS announces that “employment decreases by 1700 in Australia….” !! We’re in the money..!! We’re in the Money…!! (goes an old song folks!!)

   ‘THEY’ have no SHAME!!
7. 
   Philip

   June 11, 2009 at 12:44 pm | #

   Ernest,

   Home page: http://anarchism.pageabode.com

   Anarchist FAQ: http://anarchism.pageabode.com/afaq/index.html

   I’m currently up to Section C of the AFAQ, its tough but very interesting reading.
8. 
   ak

   June 11, 2009 at 1:14 pm | #

   There is a Polish proverb “it is better to catch big fish in murky water”.

   I wouldn’t be surprised if big fat corporations, banks, rich individuals and secret services of big powers invest money and resources in anarchism, technocracy, Austrian school of economics and green socialism.

   The more confusion the better.

   I know that this will offend many people who sincerely believe in these great things but these universal solutions to all the human problems look all too familiar to me.

   Please bear in mind that most of the leading bolsheviks were former agents of Okchrana (sorry for possibly incorrect spelling).

   Who suffered were real people.

   Maybe we should just start solving our problems? So get rid of negative gearing and software patents rather than start another revolution, please.
9. 
   MACCA

   June 11, 2009 at 2:49 pm | #

   “There has been enormous stockpiling of all commodities” by China, and this cannot continue indefinitely, said Tim Huxley, the chief executive of Wah Kwong Maritime Transport Holdings, a big shipping line based here.

   Those extra purchases beyond China’s daily needs have helped reverse the price collapse in commodities that followed the economic downturn last fall, but could also limit the scale of the rebound.

   Moody’s Investors Service announced on Wednesday that it was putting a negative outlook on the base metals, mining and steel industries in Asia and the Pacific, having previously done so for these sectors elsewhere.”

   http://www.nytimes.com/2009/06/11/business/economy/11commodity.html?_r=2&hp

   tommyt,
   I agree. So, like (no shit) Sherlock Holmes says; when you have eliminated the all the improbabilities, you have left the probabilities.

   We are *probably* being mislead. I know, this probably comes as a surprise but it is probable.
10. 
    MACCA

    June 11, 2009 at 3:18 pm | #

    http://2.bp.blogspot.com/_9ZzZquaXrR8/SjA6iAOXvuI/AAAAAAAAD7A/shTc0Yzb0ms/s1600-h/TheNextGreatCrisis.gif

    This is a very scary graph. Much discussion here is about debt, Govt deficits, QE and taxes. Look at this graph from the US CBO. Look at the debt ratios , to GDP and in $’s.

    Note the graph MAGICALLY shows a trimming down in outlays after the mythical US recovery begins. It also shows a MAGICAL recovery in US tax revenues after said mythical recovery begins. And what if it does not happen that way? What if this depression lasts longer and is deeper than forcasted? What if Obama chooses to keep bailing?(a no brainer!)Ho do you think that graph might look then?This could easily become a map showing a nation’s financial implosion.

    All sorts of wonderful theories abound but this we do know- the bond markets are watching this graph very very closely and they don’t like what they see if yields are a measure. And, if the bond markets are marking down US debt, they are marking down Australian debt (Govt and private)right along with it.

    Excessive indebtedness is madness. Gov’t deficit spending to 20%+ of GDP is lunacy. And anyone espousing it’s benefits is clearly delusional.
11. 
    al49er

    June 11, 2009 at 4:47 pm | #

    Thought the following on “OUR” banks (hypocracy) was a good read.

    http://www.moneymorning.com.au/
12. 
    al49er

    June 11, 2009 at 4:49 pm | #

    Thought the following on OUR banks hypocricy was a good read. ( sorry if it comes up twice in the posting !)

    http://www.moneymorning.com.au/
13. 
    mahaish

    June 11, 2009 at 8:12 pm | #

    for those interested in peacocks tails and cheetahs and other such evolutionary wonders, and how they relate to the human condition,

    i highly recommend a book by gerard diamond

    “sex is fun”

    and no i’m not peddling porn
14. 
    mahaish

    June 11, 2009 at 10:31 pm | #

    hi height,

    i’m not sure if you’ve owned any dogs,

    but i can tell you that my rationality and the rationality of my red healers are intimately connected. you’ll see what i mean if you’ve gone for a walk with a pair of red healers, leash or no leash.

    heaven help anyone that enters their masters space.

    i’m not sure if the dog leash analogy is a good one.

    personally i think ,when you scratch a little bit, there’s not much difference between the behavior of most humans and what you see on david attonborough doco on a pride of baboons in the serengety.

    quite a lot of us havnt been able to escape our evolutionary past and we are reaping the consequences now.

    we’ve gotton rid of slavery for the time being, but we still have genocide and murder and greed and selfishness to deal with , all in a world full of nuclear weapons.
15. 
    height

    June 11, 2009 at 10:49 pm | #

    Mahaish,

    I own three.

    The analogy I gave was a rough rehash of the one I read in ‘Evolution and the psychology of thinking the debate’. It’s been a few months since I read it but essentially I still think it’s captured in the analogy I gave. I am fairly certain it was given my Dawkins when he was describe the rationality of the vehicle for genes and the rationality of genes.

    I believe the divergence between the two rationalities is accepted by evolutionary psychologists. But they state that the brain is a Swiss army knife of various evolved tools, which are ‘activated’ depending on the situation in which the vehicle finds itself e.g. fear of spiders, snakes etc. By invoking this concept of the brain they can overcome the divergence and still hold that to a large extent our behaviour is biologically determined.

    I’m actually a fan of David Attenborough, I’ve watched quite a bit of his work. I agree that there does appear to be similarities between our behaviour and animals (this is not to suggest we are not animals ourselves)but I cannot accept that there are genes and other biological factors which predetermine a persons behaviour. My brief reading into the topic revealed that evolutionary psychology and socio-biology lacks empirical evidence to support its claims.

    ——–

    FWIW it most likely wasn’t dogs. Now that I think about it he could have been to do with satelites or something. I’ve read too much this semester to recall it in any further detail. lol. If you want I’ll borrow the book my uni and get the correct analogy.
16. 
    Christopher Dobbie

    June 11, 2009 at 11:29 pm | #

    height,

    I don’t think they predetermine someones behaviour but they certainly do influence our behaviour.

    Reading Steven Pinker’s, the blank slate, I came across this.

    The three laws of behavioural genetics:

    1. All human behavioral traits are heritable.

    2. The effect of being raised in the same family is smaller than the effect of the genes.

    3. A substantial portion of the variation in complex human behavioural traits is not accounted for by the effects of genes or families.

    Summarised as Genes: 40-50%, Shared environment 0-10%, 50% Unique environment.

    I also recommend googling Dan Ariely and Derek Denton for further information on actually what we are.
17. 
    MACCA

    June 12, 2009 at 10:19 am | #

    Hi Steve,

    Any response on Henderson’s comments on GDP calculation?

    Thanks.
18. 
    W800I

    June 12, 2009 at 10:23 am | #

    Hi all,
    please keep in mind that I am fairly new here. I am posting a link to a opinion piece from Terry Ryder. He has had a fair old go at the prof.

    Everyone’s thoughts re this piece would be appreciated please

    http://www.jenman.com.au/news_subscribers_item.php?id=23&Section=Reports

    Scroll down to the section titled
    “Feature topic:
    We need a new breed of economist – or maybe no economists at all”

    Thanks
    W800I
19. 
    DrBob127

    June 12, 2009 at 11:53 am | #

    W800I,

    Thank you for the link to the Terry Ryder article. In the past I have purchased one of his reports (late 2007) and for all of his sledging of economists, I recall that his report started off with the economic analysis that everything was on the up and up (i.e. no signh of clouds on the horizon).

    I am very interested in the outcomes of this economic crisis as it relates directly to my desires to purchase a home for me and my young family.

    As such I am very interested to hear feedback from other blog contributors far more knowledgable than I.
20. 
    ueberbaer

    June 12, 2009 at 1:10 pm | #

    Once in a while I stumble over a post on the web which I find so exceedingly interesting and valuable I want to share it with as many as possible:

    From The Oil Drum: “Profiting from Scarcity”
    http://www.theoildrum.com/node/5478
21. 
    Philip

    June 12, 2009 at 4:50 pm | #

    ueberbaer,

    That was an interesting article. The problem with convention economic theory is that it postulates infinite substitution of commodities and technological advancement so resources will not be depleted and the environment will not be harmed.

    This is, of course, utter rubbish. It also assumes that commodities will be priced at its full social cost. Take petrol for instance. In the US, a gallon currently costs ~$2. However, if its negative externalities were factored into the price, a gallon should cost between $7 – $20. The same in Australia as well. As markets misprice commodities to an extraordinary extent, it results in mass over-consumption, thus depleting resources and harming the environment.

    We constantly hear the statement that oil (and its derivatives) is expensive. Unfortunately, it is the exact opposite, by a considerable factor.
22. 
    Robert

    June 12, 2009 at 5:13 pm | #

    Any of you perma bears need a pessimism maintenance dose in these times of continued strength in equities and consumer confidence? You could read the baseline scenario and the article in the May Atlantic magazine at http://baselinescenario.com/. It is by the former chief economist of the IMF in 2007 and 2008.
    The US unlike all the basket cases the IMF has to bail has not yet made the big decisions that will inevitably confront their powerful (and corrupt/ conflicted – note the Washington-Wall Street jobs for the boys with Rubin, Snow, Paulson, Kashkari etc) elite interests (in this case their financial oligarchy) by properly cleaning up murky finance industry balance sheets. They are still not yet united politically that this level of purging is needed with many still ideologically biased against government intervention given the cult of finance that has imbued the entire culture (surely changing!). Also they have the reserve currency which they can print as needed. So they aren’t at the desperate stage with no other options but hard and decisive ones. Instead of a quick nationalisation, restructure (into smaller not too big to fail units hence breaking the oligopoly) and resale we are seeing a continued non-transparent piecemeal approach ala Japan in the 90s to now. This will result in zombie banks that need continued taxpayer funds while continuing to be unwilling to adequately lend. This extends the recession in a best case scenario and if we see a return to global crisis triggered say via an Eastern European government debt default will set the US up for depression… I know you’ve read it before but it’s nice coming from the IMF guy.

    Not miserable enough people could also check Paul Kedrosky’s site for the T2 Partners (US) Mortgage report posted 8 June. See this on p64 – ‘Our data shows that the mid-to-upper end housing market is on the precipice of the exact cliff that the market fell off of in 2007, led by new loan defaults. What happens to the economy when you hit the mid- to-upper end earners the same way the low-to-mid end was hit with the subprime implosion? We will find out soon enough. When we look back on (US) housing at the end of 2009, anyone that made positive housing predictions this year will not believe how far off they were’.
23. 
    mahaish

    June 12, 2009 at 6:52 pm | #

    hi height,

    as jarod diamond would say , there are 3 types of chimpanse,

    bonobos, chimpanse’s and us.

    our brains have given us all this technology and engineering including financial engineering, but we are still trying to shake off all this bad behavior and the inner chimpanse within us.

    given whats been going on in recent times, i’m actually thinking of getting our benobo cousins to write a book on ethical behavior and better manners to help us humans.
24. 
    DrewRiskManager

    June 12, 2009 at 7:49 pm | #

    Great articles from “New Scientist”.

    http://www.newscientist.com/special/can-science-reinvent-economy
25. 
    DrewRiskManager

    June 12, 2009 at 9:20 pm | #

    Readers may also find this web site of interest.

    Entrepreneurial Risks – Financial Crisis Observatory

    http://www.er.ethz.ch/fco/index