M. Shermer on ‘Evolutionary Economics’
Posted: 25 July 2007 02:31 PM   [ Ignore ]
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I was watching a lecture made by M. Shermer on ‘Evolutionary Economics’. Have you seen it?, what do you think?.

After watching this, I got a couple of comments.

Shermer talks about the ‘evolutionary economics’. Well, in this video, previsible from its title, Shermer talk about why it’s ok to be a libertarian ( a kind of Milton Friedman: socially liberal and economically conservative). Well, I’d say that it’s ok to be a libertarian, after all, it’s ok being anything except you want to fisically eliminate another persons.

But Shermer, imho, makes a couple of fallacies. He makes a paralelism between evolution and Smith’s ‘invisible hand’. I think it’s a intelectual swindle: while the evolution is a fact, the ‘insible hand’ is a theorical model, whose existence in the real world is, at least, doubtful.

The ‘invisble hand’ has a couple of premises:
1. There is perfect information: every buyer and every seller know the last transaction price
2. There is no a single buyer o seller who, by his or her own, could influence in the market
3. There is no diference in the quality of the products
4. Every buyer and every seller is rational (in the von Neuman meaning: a rational player is the player who, if he had knew the evolution in the future, he could have choosen a behaviour with no doubt, and in the sense that every player seeks to raise his profits)
5. Every product is sold
6. There is liberty: every buyer and every seller could enter or exit the market when he or she desires.

It seems to me that condition 2 is key: does Shermer really think that there is no buyers or seller with the power to change the market by their own? (I think in a lot of examples: to have a buyer like WalMart, or a seller like Exxon clearly violates this rule ). Also 6 is problematic: could you exit the food market? really?. So, I tend to think that the invisible hand idea is more a model to think in what could happen in this ideal conditions than a real phenomena.

I guess the ‘invisible hand’, even if it exists, miss the long term. Ok, in the long term we are all deads, as Keynes said, but I guess we could go further because we have an obligation with our descendants.

I think liberal capitalism is the best system of all that have been tried, especially if we finally avoid environment threats, but I don’t see means (material means) to leverage the living standard of the poor to a manhattan consumer’s life standard.

I understood what he claims about the ‘moral of reciprocal altruism’ and the fact that this feelings sometimes prevents us to colaborate even when is our better tactic. But I don’t think this moral feeling is the base of the need for the state involvement in economics. I think that because reallity is more complex than accounting and the stock holders, at the end, just care about the stock price in the current excersice we need someone who look into the long term.

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Posted: 25 July 2007 02:45 PM   [ Ignore ]   [ # 1 ]
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define and give examples of what you refer to as “liberal capitalism.”

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Posted: 25 July 2007 04:49 PM   [ Ignore ]   [ # 2 ]
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Haven’t seen the lecture Barto. Is it available on the web? (Not that I have time now to see it ...)

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Posted: 26 July 2007 10:29 AM   [ Ignore ]   [ # 3 ]
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Yes - please define “liberal capitalism” a little better, and perhaps give some examples of where it has been tried.

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Posted: 26 July 2007 10:39 AM   [ Ignore ]   [ # 4 ]
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Doug, the lecture is available on youtube. Is it ok to copy/paste the url here?.

TA, I don’t think the society freedom is the issue, so I will concentrate on economics: I mean a society in which you decide what and how much you produce, how much you spend and on what, you decide if you want to employ someone or be an employee, and where you have the right to your own property ( property which could be sold, bought, or anything you decide). Also I mean a society in which there are laws about employment, bank regulation, taxes, social security to help the weakest part of the society: things that make the diference between the current capitalism and the ‘savage capitalism’ in the begining of the industrial revolution (which was fertile ground to the comunism ideas, by the way).

With diferents degrees of regulation, I think this is the economic organization used, at least, in the majority of western countries: higher taxes and higher regulation in continental Europe and higher liberty in USA and UK. A similar structure is used on latam (with Cuba exception, and who knows about Venezuela in the future), with less wealth, of course. (This leads to higher social secutiry needs, but less money to make the social system works )

Also, in this economies, there is a variable degree of state involvement on economy: use the bond tax, raise or drop the monetary base, raise or drop the ‘encajes’ (sorry I don’t know the english word. I can give you the meaning: it’s the percentage of the current deposit a bank must hold in order to face the withdraws. It’s ussually defined by the authority, in US, the federal reserve ).

__
Edited to add a couple of samples

[ Edited: 26 July 2007 10:48 AM by Barto ]
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Posted: 26 July 2007 11:14 AM   [ Ignore ]   [ # 5 ]
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URLs are fine here. Either embedded or not. (So long as they don’t point to spam! wink ).

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Posted: 26 July 2007 11:33 AM   [ Ignore ]   [ # 6 ]
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Isn’t everyone aware of Google?

In four parts on YouTube

http://www.youtube.com/watch?v=-KVJZJ4MSic
http://www.youtube.com/watch?v=BWni57mPxes
http://www.youtube.com/watch?v=nMP3KDgSbbY
http://www.youtube.com/watch?v=IrmQMZG6f3U

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Posted: 26 July 2007 11:52 AM   [ Ignore ]   [ # 7 ]
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google? never heard of it….  downer

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Posted: 26 July 2007 12:58 PM   [ Ignore ]   [ # 8 ]
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dougsmith - 26 July 2007 11:14 AM

URLs are fine here. Either embedded or not. (So long as they don’t point to spam! wink ).

I asked because I don’t know the copyright status of this lecture on youtube. Of course, it didn’t prevent me for watching, but linking copyrighted material on the forum would be unpolite… hyprocresy… wink

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Posted: 26 July 2007 01:58 PM   [ Ignore ]   [ # 9 ]
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barto,

i think as long as you are not selling the lecture and that the purpose can be demonstrated for educational purposes you are alright

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Posted: 26 July 2007 02:41 PM   [ Ignore ]   [ # 10 ]
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I guess copyright is a complicate issue… (maybe a good discusion from a rational perspective: what is ‘fair’ and ‘unfair’ with copyright? )

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