After reading John's arguments that strongly imply the best possible state is the natural market, I thought a bit about what we do know about the economy and complex systems. For example, we know that the economy has had boom/bust cycles. We know that players in the market are not purely rational creatures; they are emotional/rational beings. We know that the financial system is a network. We also know that there are financial products, such as credit default swaps, that match the size of the world's GDP in size.
I wrote this two days ago, but it didn't get through. We also know that complex systems can have subsets that have rules that are too hard to deduce from first principals, but are nonetheless apply. For example, even though chemistry is extremely complicated electroweak theory, and we haven't done first principals calculations on any but the simplest chemistry; chemistry is still a science. With biology, we have very complex chemistry, yet biology is a science. If we don't know anything once things are complex, then biology and chemistry would be impossible. We also know that there are interesting patterns that crop up in complex systems. For example, there can be tipping points, where they go from one meta-stable position to another. We know that, while we cannot see trends as absolute rules when dealing with complex systems, the most persimmons model consistent within the data has the best chance of being a reasonable approximation of what we will understand as we gain a better, more detailed understanding of the system. In addition, it has the best change of future predictions. Note, I didn't say that it would always be right; there are many times that extrapolations beyond data are wrong. But, if one were to consider all possible theories available at the time,, one's best chance of being close is choosing that theory. Relating this to a short thread on "first do no harm" deciding not to decide is also an action. One cannot wash ones hands of the repercussions of doing nothing, while criticizing those who strive and fail. One can argue that doing nothing (e.g. surgery) is the best option, accepting that there will be instances where that fails and doing the surgery would have been successful. The only argument one would need to make was, given the information available at the time, the inaction was the best choice...given the range of possibilities for intervening or not intervening. Dan M. _______________________________________________ http://mccmedia.com/mailman/listinfo/brin-l_mccmedia.com
