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

[Sampo A Syreeni]

On Sun, 15 Oct 2000, James A.. Donald wrote:

>Economists do that all the time.  It is called modeling.  Lucas and 
>Lawrence Klein won nobel prizes for doing it.  I expect that other 
>economists that I am not familiar with have also won Nobels in it.

Of course. I'm just saying that most people, including many with extensive
training in economic theory, simply do not have the level of mathematical
sophistication to say *anything* about the long term dynamic behavior of
economic systems even when the human and stochastic elements are abstracted
away completely. So, there are few absolutes in economics.

>You are asking for a prediction of the behavior of human actors, predicting 
>what people will do.  One can only derive "rigorous" results if one makes 
>assumptions about how people think and what they want.  The most rigorous 
>attempt at that is known as "rational expectations theory".

You do not understand my point. Human factors are something which,
naturally, cannot be predicted. But even if we model humans as, basically,
automata, and impose severe conditions on their behavior, we are *still*
left with a system which is exceedingly difficult to analyze globally. Hence
the scarcity of stability and optimality proofs and even reasonable bounds
on the expected behavior of global variables.

The fact is that people on this list often use aggressive market economic
arguments while discussing proposed social reforms. Now, if there is any
inherent unstability to pure free market economy such arguments should
perhaps be taken with a grain of salt.

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