CDR: Re: Re: A famine averted...

[Sampo A Syreeni]

On Fri, 13 Oct 2000, Jim Choate wrote:

>No stupid, there are lot's of persons called the 'market'. There is no
>'market' without those individuals. When the market goes out of
>equilibrium then free market mechanisms are not enough to correct.

On a similar vein, just about every somehow understandable version of free
market theory is based on the assumption of a steady state market. The
theory does not include a temporal element. If you want to study those,
you're bound for such a quagmire of stochastic nonlinear differential
equations that you would not believe. Hence, the global stability of any
reasonably realistic model of markets is practically impossible to
guarantee with current mathematical tools. It is quite possible for such
systems to behave badly enough to kill most of the participants in the
market, for instance. Besides, the basic continuity assumptions behind
mathematical economics practically guarantee that the theory does not take
such possibilities seriously - I know of no models which take into account
the discrete, limited number of people participating in the market.

Free market theory, though interesting, useful and absolutely much better
than most available alternatives simply does not cover it all. It is an
abstraction which probably should not be attained any more than the
socialist one.

Sampo Syreeni <decoy at iki.fi>, aka decoy, student/math/Helsinki university