The problem with productivity.
The problem of productivity is the problem of value accounting.
Output is measured by total market value of output, adjusted by a GDP deflator.
However, the market is an arbitrary determiner of value. Eg, an Apple Ipod with less features and lower audio quality than a Sony Mp3 player.
The premise of market efficiency may not hold, such that a unit of spending on an equivalent product might produce different welfare benefits due to a) different product quality due to imperfect markets eg. watermelon juice in Vietnam vs watermelon juice in Singapore b) differing choice sets.
Producer value cannot be measured simply in monetary terms either. Eg, the ATM, which does not show up in GDP.
Social value in exchange cannot be commoditized either.
The presence of externalities, etc.
Friday, October 23, 2015
Note 44
Speech is an act. Political and psychological; and an idea is a process in it's development. An identification expresses a motivation to transcend the categories which have given rise to the identification.
The context in which words are embedded transcends the words themselves. Development is the unfolding of context, not of words. Words are the residuals, not the ideas. Identifications are steps in the trajectory of the transcendence of the categories which give rise to those identities.
For instance, at the mention of the concept of God, (as a representative for the politicization of the relation between subject and object) one has already laid the framework for the possibility of the transcendence of this category of relation, and for radical freedom, and so on. Hence it is a negation, and a temporary absence of another set of principles. But in doing so, one recognised the fundamental bottleneck - the schism between subject and object, or better, freedom and truth. The point is that these underlying dualities remain insofar as the conditions that give rise to the contradiction, or tradeoffs, of the prescriptions of the two remain. The advent of the reconciliation is the advent of a new set of problems with their own tradeoffs, and so on.
One understands the problem by understanding the context which gave rise to this problem. To say that something is true is to adopt a representational approach. It expresses the possibility not only of the truth being untrue, but of the epistemic conditions of truth telling being variable (but also the absence of an alternative). Freedom, then, is but the context which forms an assumption of the context in which the problem is expressed. In doing so, it is playing it's part in a language game. Freedom<>structure of representation<>truth.
The space of conceptual possibility is continually expanding, due to the development of mental and material possibilities, and a society and it's institutions and structures will attempt to incorporate effectively the ideas available for use according to it's internally defined mandates, ie, its values.
But note that this is an explanation of things as they are, not things as they could possibly be. That is, a thing which cannot be thought is, while a thing which can be thought, cannot be, for it lies within its possibilities (which is self-negating, and seeks self-transcendence), not within itself.
The context in which words are embedded transcends the words themselves. Development is the unfolding of context, not of words. Words are the residuals, not the ideas. Identifications are steps in the trajectory of the transcendence of the categories which give rise to those identities.
For instance, at the mention of the concept of God, (as a representative for the politicization of the relation between subject and object) one has already laid the framework for the possibility of the transcendence of this category of relation, and for radical freedom, and so on. Hence it is a negation, and a temporary absence of another set of principles. But in doing so, one recognised the fundamental bottleneck - the schism between subject and object, or better, freedom and truth. The point is that these underlying dualities remain insofar as the conditions that give rise to the contradiction, or tradeoffs, of the prescriptions of the two remain. The advent of the reconciliation is the advent of a new set of problems with their own tradeoffs, and so on.
One understands the problem by understanding the context which gave rise to this problem. To say that something is true is to adopt a representational approach. It expresses the possibility not only of the truth being untrue, but of the epistemic conditions of truth telling being variable (but also the absence of an alternative). Freedom, then, is but the context which forms an assumption of the context in which the problem is expressed. In doing so, it is playing it's part in a language game. Freedom<>structure of representation<>truth.
The space of conceptual possibility is continually expanding, due to the development of mental and material possibilities, and a society and it's institutions and structures will attempt to incorporate effectively the ideas available for use according to it's internally defined mandates, ie, its values.
But note that this is an explanation of things as they are, not things as they could possibly be. That is, a thing which cannot be thought is, while a thing which can be thought, cannot be, for it lies within its possibilities (which is self-negating, and seeks self-transcendence), not within itself.
Note 43
"Capitalists earn what they spend; workers spend what they earn."
Kaldor
The value of money is the value of consumption through time. The nominal value of money is the rate of exchange of total money supply with that value. If the value of consumption through time decreases, the nominal value of money increases (inflation). This is because there is more money supply per value.
Now the nominal value of money in the asset markets have been increasing. This is an inflation valve. By increasing asset consumption, the fed can keep interest rates low without risking baseline inflation, at the cost of increased financial volatility. Doing so also increases baseline nominal growth as a function of asset transaction volumes. The economy essentially profits from churning. Asset churning prevents deflation in a low growth economy.
Scarcity-adjusted marginal utility of consumption goods converge to unity, while prices and marginal utility adjusts, according to relative scarcity and hence elasticities (given elasticity of substitutions from consumption patterns).
***
The problem is to take the human out of the equation.
Asset values are claims to future consumption.
If a person saves more than he consumes now, he must consume more than he saves later. The economy must balance. Asset Ownership is trade of future consumption.
Hoarding occurs when the claims to future consumption increase. But the rate of future consumption, or the rate of consumption, remains constant. Total real value of future consumption increases, relative to present, and the real interest rate falls. When the real rate falls below zero, a depression sets in.
A depression is unavoidable when the real yield on assets fall below zero; when all the possibilities of filling up future consumption for the purpose of maximising present income has been exhausted, for a given rate of demographic growth. In such a case, present and future consumption is satiated, and Japanese style deflation sets in.
There are two ways to correct the imbalance: war or tax. War is destruction of assets and productive capacity. It solves the deflationary tendency caused by tendency to excess savings in a growing economy.(think china) It also solves the problem of excess labour and capital, when the habits of labour would be to create excess savings in an economy.
Tax forces asset prices down, allowing consumption to be forwarded to the present. It offsets the tendency of the economy to produce more than it can consume, thereby smoothing the business cycle. A tax on asset values also forces a consumption to income ratio that sustains healthy and correct growth rates.
***
An excess of savings causes a similar fall in prices and a fall in interest rates. The price of money rises in relation to the price of goods.
So the correct adjustment only happens if the combination of falling prices and falling rates offsets the tendency to hoard, and to save. If the natural rate is below zero, the adverse money effects kick in, so the natural rate falls even further.
Marginal efficiency of investment = Marginal efficiency of consumption => Natural rate of interest (given by this equilibrium relation)
What about money? Dynamic, income effects and price effects
Kaldor
The value of money is the value of consumption through time. The nominal value of money is the rate of exchange of total money supply with that value. If the value of consumption through time decreases, the nominal value of money increases (inflation). This is because there is more money supply per value.
Now the nominal value of money in the asset markets have been increasing. This is an inflation valve. By increasing asset consumption, the fed can keep interest rates low without risking baseline inflation, at the cost of increased financial volatility. Doing so also increases baseline nominal growth as a function of asset transaction volumes. The economy essentially profits from churning. Asset churning prevents deflation in a low growth economy.
Scarcity-adjusted marginal utility of consumption goods converge to unity, while prices and marginal utility adjusts, according to relative scarcity and hence elasticities (given elasticity of substitutions from consumption patterns).
***
The problem is to take the human out of the equation.
Asset values are claims to future consumption.
If a person saves more than he consumes now, he must consume more than he saves later. The economy must balance. Asset Ownership is trade of future consumption.
Hoarding occurs when the claims to future consumption increase. But the rate of future consumption, or the rate of consumption, remains constant. Total real value of future consumption increases, relative to present, and the real interest rate falls. When the real rate falls below zero, a depression sets in.
A depression is unavoidable when the real yield on assets fall below zero; when all the possibilities of filling up future consumption for the purpose of maximising present income has been exhausted, for a given rate of demographic growth. In such a case, present and future consumption is satiated, and Japanese style deflation sets in.
There are two ways to correct the imbalance: war or tax. War is destruction of assets and productive capacity. It solves the deflationary tendency caused by tendency to excess savings in a growing economy.(think china) It also solves the problem of excess labour and capital, when the habits of labour would be to create excess savings in an economy.
Tax forces asset prices down, allowing consumption to be forwarded to the present. It offsets the tendency of the economy to produce more than it can consume, thereby smoothing the business cycle. A tax on asset values also forces a consumption to income ratio that sustains healthy and correct growth rates.
***
An excess of savings causes a similar fall in prices and a fall in interest rates. The price of money rises in relation to the price of goods.
So the correct adjustment only happens if the combination of falling prices and falling rates offsets the tendency to hoard, and to save. If the natural rate is below zero, the adverse money effects kick in, so the natural rate falls even further.
Marginal efficiency of investment = Marginal efficiency of consumption => Natural rate of interest (given by this equilibrium relation)
What about money? Dynamic, income effects and price effects
Friday, October 16, 2015
Note 42
The root of all psychological dysfunction is the mistaking of models with reality.
That is, the inability to retain the level of judgement required to distinguish models from the case remains the crucial blind spot of applied decision making. It also creates openings for collective fantasies, herd behaviors etc. so the problem is not necessarily bad information, or bad models, but bad information processing at a subjective level. Society as a whole will attempt to circumvent this subjective problem with more accurate models, especially through data processing, moving forward. Therefore the act of judgement is increasingly outsourced towards common knowledge use of better models. This will create the conformist trend towards specific data processing solutions. While creating greater opportunities for profit for people who retain the ability to spot the differences between models and reality.
But that is the paradox of the realist: the real is a principle - of which the case is an instantiation - which itself cannot be parsed or verified and which is set against other instantiations of the principle.
That is, at the same time as one posits the real as the foundation of applicable truth to non self evident statements one denies the possibility of going beyond the real to epistemologize it's application, or to ontologize it's properties.
So, as Lao Tzu might have said, once thinking occurs, the possibility of real thinking ends, ergo, one thinks by not thinking, and ceases to think as one thinks.
That is, the inability to retain the level of judgement required to distinguish models from the case remains the crucial blind spot of applied decision making. It also creates openings for collective fantasies, herd behaviors etc. so the problem is not necessarily bad information, or bad models, but bad information processing at a subjective level. Society as a whole will attempt to circumvent this subjective problem with more accurate models, especially through data processing, moving forward. Therefore the act of judgement is increasingly outsourced towards common knowledge use of better models. This will create the conformist trend towards specific data processing solutions. While creating greater opportunities for profit for people who retain the ability to spot the differences between models and reality.
But that is the paradox of the realist: the real is a principle - of which the case is an instantiation - which itself cannot be parsed or verified and which is set against other instantiations of the principle.
That is, at the same time as one posits the real as the foundation of applicable truth to non self evident statements one denies the possibility of going beyond the real to epistemologize it's application, or to ontologize it's properties.
So, as Lao Tzu might have said, once thinking occurs, the possibility of real thinking ends, ergo, one thinks by not thinking, and ceases to think as one thinks.
Note 41
To identify an object in a graph, we define the dimensions of the object, then we define the coordinate system used, then we identify the object along the coordinates of the system.
Similarly, in the use of language, we have to define the sources of all possible meaningful utterances, then to define the language game used, and then to identify the contextual application through referring to a specific situation.
There is no given that these steps can be explained by a single theory.
These steps may or may not be sequential, or one of narrowing, and may feed into each other. The same act might require the use of several steps.
But they are philosophically separable, in that they have to be explained differently, because they refer to different things.
***
Meaning-making is refracted contextually, and the understanding of the steps are necessarily refracted; but the concepts which are investigated must be defined in terms of its possibility (in relation to its negation), not its representation (in relation to conditions of its application). While the latter is necessary for the former to be meaningful, true philosophy is the former in the context of the latter.
Similarly, in the use of language, we have to define the sources of all possible meaningful utterances, then to define the language game used, and then to identify the contextual application through referring to a specific situation.
There is no given that these steps can be explained by a single theory.
These steps may or may not be sequential, or one of narrowing, and may feed into each other. The same act might require the use of several steps.
But they are philosophically separable, in that they have to be explained differently, because they refer to different things.
***
Meaning-making is refracted contextually, and the understanding of the steps are necessarily refracted; but the concepts which are investigated must be defined in terms of its possibility (in relation to its negation), not its representation (in relation to conditions of its application). While the latter is necessary for the former to be meaningful, true philosophy is the former in the context of the latter.
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