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

[Sampo A Syreeni]

On Sat, 14 Oct 2000, James A.. Donald wrote:

> > On a similar vein, just about every somehow understandable version
> > of free arket theory is based on the assumption of a steady state
> > market. The theory does not include a temporal element.
>
>Your ignorance of economics is as breathtaking as your ignorance of African 
>famines.

I freely admit that I have absolutely no authority over things economic. But
I do think you too have an overly simplified view of the theory - you do not
seem to distinquish between the derivation of some of the parameters 
(e.g. price) of a dynamic system which is assumed to be in equilibrium based
on known ones (e.g. measures of/related to demand, availability etc.) from
actually working with the time evolution of the system (none of the
variables are known a priori and the solution consists of complete time
functions).

For instance, in the basic example given above - price formation of a single
good in an ideal closed market (i.e. given the normal assumptions of
independence of participants, continuity of variables, perfect knowledge and
so on) - can you cite a single understandable source with the rigorous
derivation of bounds for over/undershoot in price upon rapid fluctuation in
supply? Indeed, even if we assume no stochastic element is present, I think
this is a scenario in which solutions can be found which are far from
optimal in the sense of stable state theory.

When you refer to my ignorance, you perhaps mean that the above situation
has in fact been rigorously analyzed. I've never claimed otherwise. The
point is, such analysis is usually tricky enough to be incomprehensible to
your average math graduate and it produces results which have little to do
with the optimal-allocation-of-resources mantra of true free market
believers.

>How old are you?

I can't think of a single reason why a person interested in civilized
discussion would want to ask that. But 22 is the number.

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