Note 45

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.

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.

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

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.

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.

Note 40 (Thoughts on Hegel Intro)

The concept of an "I" is the failure of self-referentiality; it is the (non)-thing that cannot be identified.

The subject is an object which does not exist.

This is the starting point of freedom, which is the non-identification of a (non)-thing, as well as of desire, which is the process of identification.

The pathway of self-identification, as well as the philosophy of history, relates to the interaction of four key groups of parameters, that which can and cannot be known, and that which can and cannot be made conscious.

Social acts are essentially the interplay of values; values are the modality of identification of the self and the collective. Social forms, such as discourse, norms, and institutions, are channels for this interplay, which may be dialectical, evolutionary or otherwise.

Note 39

All relationships among elements of different language games are metaphorical. Hence the application of truths to a contextualized model of reality, composing of elements of different dimensions, each governed through its own language games, is metaphorical, although the logic of the categories underlying the language games, and the ways they are applied (though not understood) are not, if such a description is to be possible.

Quotes 10

The game played between the state and the market economy takes place on a field on which two systems for organizing power to allocate resources and to distribute the costs and benefits of their production and consumption coexist and coevolve. A rough historical rhythm is discernible as the losers from one dispensation appeal to - or invent - the other in search of redress [See also M Ramesh on pragmatic evolution, or problem solving of issues raised by overdominance of one pole, for another driver of the process]...deepening globalization of markets intensifies the conflict to the point of calling into question the simultaneous maintenance of both democracy and the autonomous nation-state [given global markets].

- William Janaway

Quote 9

"Nietzsche’s work relentlessly undermines the elevation of ‘literal’ over ‘metaphorical’ truth. He argues that we cannot privilege literal or ‘pure’ truth over metaphor because truth is itself a metaphor that has been invented to lend authority to particular forms of thought and styles of living. He argues repeatedly, for example, that the ‘truths’ of religious teaching are really dominant perspectives upon the meaning of human experience employed to establish the prestige of a community’s way of life (Spinks, 2003)." - Ruwan Jayatunge on The Nation

Context is truth in relation to itself, that is, meaning.

Truth is the duality of category and context, in which each can be defined through the other, ie. ontological duality as per Lao Tzu.

Existence

Existence is that which closes off possibilities. It exists because existence is itself.

But the existence of an existence cannot be given within existence itself: it must be given through a set of criteria which defines the terms of existence, and the conditions of existence.

The terms of existence define that which may be said to exist, while the conditions of existence defines that which exists.

Existence is the concretization of the conditions of existence in relation to the terms of existence.

In being that concretization, it identifies (or gives content to) the conditions of existence.

But in order to do so, existence is necessarily in the state of existing to which the concretization refers.

But, in being both the concretized condition of existence, as well as the state of existing, existence relates itself to itself.

Therefore existence is paradox and duality: condition and existence. It is infinite duality.

In other words, when we speak of existence, we refer to the possibility of the conceptualization of the actuality, as well as the actuality through which the possibility of the conceptualization is made meaningful. We have no other examples. But even if we had, we would not call it existence.

So an applied conception of existence creates dualities, depending on the role which the concept performs.

Hence we get absurdities: idealism and materialism are both sides of the same coin, so to speak.

This is the problem engendered in Hegel's quote: All identification is self-identity.

More: all manifested ideas are identified, hence all manifested ideas are self-identifying.

In this sense, duality comes about through the identification process of a concept.

***

We could have many universes. Each universe would be a fact referring itself to itself, as a minimum condition.

The world is fundamentally unity, as a necessary condition of its existence, its referring of itself to itself.

Existence is relative when applied, but absolute in conception.

A possible solution to the brain in a vat.

Facts are referred to other facts. A universe of facts is the world of inter-referring facts.

Existence is the act of something referring itself to itself.

It refers the terms of its own existence to the state of its being.

The state of its being is constitutively self-referring.

downward elasticity of prices on consumption > downward elasticity of interest rates on investment => deflation + zero lower bound

Assuming a cointegrating relationship in interest rates and prices

Repeat

To repeat oneself:

Existence is self-definition. Hence, to exist, one must define oneself in relation to oneself.

Spirit 1

Spirit is by nature self-interpretation in its own process of unfolding.

Existence is the act of something referring itself to itself.

Because it embodies itself through its interpretation of itself, it becomes inevitable through that unfolding, because the idea itself, in embodying itself, is conditioned by that interpretation.

An important post

On value investing:

A stock tends towards it's attractor state, which is it's intrinsic value. Price is an illusion.

So likewise life tends towards it's attractor state, which are the ideas contained in it's being. The march of events, or history, is an illusion.

On governance:

Governance is a kind of model to deal with the problem of the orderly and stable distribution of authority over a territory, within a system of States, and wider economic systems. Things like social compacts and forms of contracting are endogenized within the model of governance. These models are very unique to each country.

The change of models happen once in a very long time, and real revolutions are very rare. Most so called revolutions preserve the same model of governance within new institutions.

Every state, through it's existing model of governance, implies the form of violence it can accommodate, before the coordinates of society itself breaks down. Failed states, perhaps, are the only seeds of new models of governance.

On jobs:

What is your ideal job? Its the job which has you as you are as it's ideal.

On art:

Art without spirituality is like science without mathematics. Hence modern art is a waste of time. In music, modern refers to anything after the Baroque era.

Fate

1) Irony

The knowledge of fate allows you to take responsibility in actualizing it.

My lack of freedom to determine my destiny gives rise to the responsibility to bring it about. The freedom to self-determine the specifics of the destiny gives rise to the responsibility.

Freedom is exercised through choice, and choice is the result of the interactions of the conditions which limit our freedom with those that allow it.

2) Persons

Persons are the unfolding of ideas in the world. People are just embodiments of ideas that are unfolding in the world of ideas.

The world is just the artifact of ideas, interacting with the progression of ideas.

The world of things are just historical artefacts of the things that are thought and brought into existence by persons, who become themselves as ideas through the chanelling process.

It is the receptacle of the potentiality of ideas, as the residual of that process of incorporation.

Becoming what one is = Embodying the idea that one is

The world supports this process of embodiment because it is itself idea; and the process of that embodiment is itself idea.

The phenomenology of idea-unfolding is just the historical world itself, that is, agency is the relation of the active idea to the systemic totality of ideas.

Problem: Defoundationalization of the systemic totality. How do we reconceptualize it, and therefore our relations to it?

Eg. I will not be an asset manager because I do not embody the idea of one. But I will be a philosopher because I am the idea of philosophy in person; I am philosophy itself.

The primary function of man is to embody the idea that they are in the world.

In so doing, they create their own religion.

In this sense, there are two types of persons: those who create their own religion, and those who follow the creations of others. Other distinctions are irrelevant.

Self-Advice 1

1) The optimal strategy to deal with the factor of randomness in life:

Curb your greed and learn to be opportunistic.

Greed is the desire and action to grab that which is not given to you by the universe.

Opportunism is the ability to seize the windows of opportunity for gain that are periodically handed to you.

One must learn to tell the difference between an act of opportunity and an act of greed or folly.

To do that, one must know enough (ie, know what you are doing), and be enough (ie, to know oneself).

2) On asymmetric volatility:

In a bull market, greed is more reliable than fear: buy calls.

In a bear market, fear is more reliable than greed: buy puts.

Pragmatic Thought (Chain 1)

Evolution of Forms vs Development of Forms.

The mutually conditioning nature is exemplified by ideal science (empirics and ideas).

Use is itself an evolved use of prior use.
+
Successive evolution of 'terms of use'.

These parameterize the conditions in which future things are made useful.

A dynamic process, whereby the conditions in which knowledge is developed and applied is 'brought along' in the specific terms in which it has been developed (to the exclusion of other possible paths) through successive 'use of use' (recursivity).

(Statements about things, identified in a verbal way follows this general pattern).

The parameters are useful because they are useful, but they are useful because they have created the conditions in which the things which are useful are useful (within those parameters), have themselves created/affected the conditions in which the usefulness of the parameters are made useful. (retroactivity)

This retroactive mutual conditioning of usefulness is the starting point of dynamic stability, which is necessary for the reproduction of things in time.

Of course, there is necessarily (at least) a third criterion, to which the usefulness of the parameter is referenced.

But the the forward movement of time itself, ie, forward movement itself, is the product of usefulness. The retroactivity of certain underlying conditions gave rise to the usefulness of this forward movement.

What are these conditions? (and what are their use?)

Quotes 9

"The argument, in short, is that in a world of uncertainty, where probabilistic calculus is ruled out, rules, norms and institutions play a functional role in providing a basis for decision-making, expectation, and belief. Without these 'rigidities', without social routine and habit to reproduce them, and without institutionally conditioned conceptual frameworks, an uncertain world would present a chaos of sense data in which it would be impossible for the agent to make sensible decisions and act". Hodgson (1988:205)

Hello World 1

To be the world, to which the subject, which is now the object, is being put.

To be is subjective, not objective.

Paradoxically, only by subjectivising being in the world can the subject be objectivised.