Thursday, January 14, 2016

Janteloven modifisert, fornyet, omdannet og prosessert.

1. "Du skal ikke tro at du er noe" omformulert: "Du bør tro du er noe, fordi alle mennesker er noe og ifølge den store idealistiske philosophen Emmanuel Kant så har menneskene en helt spesiell plass i skaperverket".

2. "Du skal ikke tro at du er like så meget som oss" omformulert: "Du bør tro at du er like egalitær som oss, medmindre spesielle faktorer tilsier at du ikke er like eqalitær som oss".

3. "Du skal ikke tro du er klokere enn oss" omformulert: "Du kan tro at du er like klok som oss, medmindre vi befinner oss i en situasjon der du har en oppnådd betydelig mindre grad av akademiske meritter enn oss, og hvis du har langt færre siteringer enn oss". 

4. "Du skal ikke innbille deg du er bedre enn oss" omformulert: "Du bør sannsynligvis ta forbehold om hvorvidt du er signifikant mer egalitær enn oss, medmindre du har en lang liste over meritter som de færreste vil greie å oppnå".

5. "Du skal ikke tro du vet mere enn oss" omformulert: "Du kan tro at du vet like meget som oss, medmindre vi befinner oss i en situasjon der du har publisert langt færre vitenskapelige artikler (og bøker) enn oss, faglig kompetanse og akademiske credentials bør ikke undervurderes".

6. "Du skal ikke tro du er mere enn oss" omformulert: "Du kan tro du er mer egalitær enn oss hvis du kan dokumentere dette ved hjelp av empiriske data, eller hvis du besitter vesentlig og i meget betydelig grad mer finanscapital enn oss".
Eventuelt: "Du kan tro du er mere enn oss hvis du nesten garantert får begravelse på statens regning".  

7. "Du skal ikke tro at du duger til noe" omformulert: "Du bør tro at du duger til noe, hvis ikke kan du jo like gjerne begynne å "nave", men også trygdemottakerne i dette landet duger jo til noe, de kjøper varer&tjenester og forbruker trygden de mottar, dermed bidrar trygdemottakere til økonomien i sin helhet, fordi etterspørsel konstituerer tilbud!".

8. "Du skal ikke le av oss" omformulert: "Hvis vi kan le av Gud og Satan, da kan vi også le av mennesker, dessuten så vil dette punktet kunne inngå som et uformell aspekt i forbindelse med artikkel 10 i ECHR (Den europeiske menneskerettskonvensjon), aka "ytringsfrihets-aspektet". 

9. "Du skal ikke tro at noen bryr seg om deg" omformulert: "Du bør presumptivt anta at noen bryr seg om deg, og spesielt hvis du har stemmerett da er det garantert iallefall minst en politiker, tenketank eller spindoktor som bryr seg om deg, og hva du mener!".

10. "Du skal ikke tro at du kan lære oss noe" omformulert: "Du kan tro at du kan lære oss noe, selv om du ikke har en (M.Sc) mastergrad. Såsant du avstår fra trolling og hensynsløse generaliseringer og extrapoleringer og hvis du ikke er en epistemologisk anarkist, og i mellomtiden så kan du jo lære å bli like egalitær som oss". 

Sunday, July 26, 2015

A reply to many comments by John Michael Greer 

John M. Greer: "The gross primary product or GPP might be the value of all unprocessed natural products at the moment they enter the economy – oil as it reaches the wellhead, coal as it leaves the mine, grain as it tumbles into the silo, and so on – minus all the costs incurred in drilling, mining, growing, and so on. (Those belong to the secondary economy.)

The gross secondary product or GSP might be the value of all goods and services in the economy, except for raw materials from nature and financial goods and services.

The gross tertiary product or GTP might be the value of all financial goods and services, and all money or money equivalents, produced by the economy."
This resembles my own thoughts on linking and connecting EROEI to the economy theories that we use.

John Michael Greer: "It remains true, though, that all the many methods of reality testing we’ve evolved down through the millennia, from the most basic integration of sense inputs hardwired into the human brain right on up to the subtleties of propositional logic and the experimental method, share one central flaw. None of them will work if their messages are ignored—and that’s what’s going on right now, as a vast majority of people across the modern industrial world scramble to find reasons to cling to a range of popular but failed predictions about the future, and do their level best to ignore the evidence that a rather more unpopular set of predictions about the future is coming true around them".

--- This is very true. and also, the reason why such matters are still a problem is that humans are not Bayesian...! Not on a macro level. If we were, the world would look vastly different.

John Michael Greer: "A modern American climbing into the driver’s seat of a large SUV has more sheer physical energy under his direct control than your average Southern plantation owner had before the Civil War. Talk of "energy slaves" isn’t simply a metaphor; the one difference between power exerted by dominating machines and power exerted by dominating human slaves is again that the machines don’t have an inner life; they won’t slack off when the overseer isn’t looking, head north on the Underground Railroad, or join Nat Turner’s rebellion and cut your throat some fine Virginia night".
How many see the conceptual similarity? But the food stamp program is still going strong and that makes a case for no violent uprising, as long as the neo feudal plutocrats keep the EBT going.

John Michael Greer's lack of simple arithmetic accounting. why is it that John Michael Greer, who is a knowledgeable blogger/author, who actually mentions the concept of thermodynamic economics, can not grasp even the simple accounting identities that decides what would cause a default, what could cause a default, and not the least, the difference between statistical economy and political economy. That  John Michael Greer mention spending in the same manner as running a deficit and/or increasing the balance sheets is evidence of extreme erroneous reasoning.

John Michael Greer: "If you, dear reader, earned US$50,000 a year and spent US$100,000 a year, and made up the difference by taking out loans and running up your credit cards, you could count on a few years of very comfortable living, followed by bankruptcy and a sharply reduced standard of living; the same rule applies on the level of nations".
No, absolutely not. In this matter,John Michael Greer  is really extremely categorically wrong. If John Michael Greer, earned 50,000 a year in a currency that  John Michael Greer owns, and increased his balance sheet by 100,000 in the same currency that John Michael Greer himself owns and prints, and made up the difference by taking loans to/from himself, and running up his credit cards which are denominated in the same currency that  John Michael Greer owns, would  John Michael Greer face bankruptcy and a sharped reduced living standard, when the real economy, that is the thermodynamic economy + the financial parts dear readers, is mostly unaffected by this sophisticated monetary instrumental increase in the balance sheets?

John Michael Greer: "These days the US government spends about twice as much each year as it takes in from taxes, user fees, and all other revenue sources, and makes up the difference by borrowing money".
Well, the US government transfers money that the US itself prints, and borrows money from itself...!!! lolz. :-] And to confuse and/or to conflate spending with an increase in the balance sheets is utterly ridiculous. That is obviously a detachment from the thermodynamic economy.

John Michael Greer: "A variety of gimmicks, culminating in the current frenzy of “quantitative easing”—that is to say, printing money at a frantic pace—has forced interest rates down to historically low levels, in order to keep the federal government’s debt payments down to an annual sum that we can pretend to afford."
No, not even slightly close. The US' "money printing" scheme does not force interest rates down. And the federal government's debt payment is an annual sum that it can afford, because, again and again and again...: the US prints its own money, its own currency and has debt to itself.

John Michael Greer: "Even a fairly modest increase in interest rates would be enough to push the US government into crisis; an increase on the same scale as those that have clobbered debt-burdened European countries in recent years would force an inevitable default."
Excessive error in a repeated pattern here. Several European countries have debt denominated in another currency and they also have a currency which is priced to high in relevance to the real economy. 

John Michael Greer: "To understand how this works, it’s going to be necessary to spend a little time talking about catabolic collapse, the theory referenced earlier. The basis of that theory is the uncontroversial fact that human societies routinely build more infrastructure than they can afford to maintain. During periods of prosperity, societies invest available resources in major projects—temples, fortifications, canal or road systems, space programs, or whatever else happens to appeal to the collective imagination of the age. As infrastructure increases in scale and complexity, the costs of maintenance rise to equal and exceed the available economic surplus; the period of prosperity ends in political and economic failure, and infrastructure falls into ruin as its maintenance costs are no longer paid".
"that human societies build more infrastructure than they can afford to maintain". This varies. When a period of prosperity ends in economic failure, it is always because of the political economy, at least from 1800 and until today. The ultimate reason when infrastructure falls into ruin is the political economy. The US has the resources, it has the technology, and it has industrial knowledge. but it does not have the knowledge or culture of a high minimum welfare level, and it does not have the culture of what it takes to achieve a high societal economic EROEI, like the social capitalistic countries.

If it is unpleasant to live somewhere caused by cubic issues it is both an absolute advantage and a comparative advantage to know if the rectangle is too small/big or if it is the height that is too low or too high. Lest we think it is opaque when it is not, or we conflate the height with the rectangle, and continue to reason within the obscurantism of holistic and the parts in the system.

During the later centuries leading to the fall of the Roman Empire, there was a significant and essential reduction of EROEI. to some extent could this be compensated by societal improvements, a reduction in the class divisions would help the societal EROEI which would help the economy.
But not much. Marginal improvements could be made, but this would hardly have any effect that could be measured by economists. There were other organizational factors that could have been improved upon and rationalized, if they could somewhat adapt into modern ideas that flourishes inside the HR departments in big companies. This would not have made a big difference anyhow.
Asymmetrical economic and cultural issues was not an important drag on the economy, as it was not an important drag/disadvantage on the Egyptian economy during the reign of the Pharaoh's. But from late in the 1700's, it was mostly and increasingly more the political economy which was at play. An agricultural economy is not mostly a political economy, an industrial or even semi-industrial economy is highly political.

John Michael Greer: "One of the core reasons for the failure of climate activism in the US is that a great many Americans know that an expert opinion from a distinguished researcher can be bought for the price of a research grant, and have seen scare tactics used to push political agendas so many times that another round of dire warnings from experts doesn’t impress them any more".
Maybe we should consider to make a contribution to the critique on political "scientific" research of AGW, but more than that, is this also a general problem?
A contribution to the critique on political research by pharmaceutical firms on pharmaceutical drugs? Can we combine this with a contribution to the critique on political psychiatry? I think we can, but what do we get then?

John Michael Greer: " It might seem odd to portray humanity as the Chosen Species while denying that there’s anybody to do the choosing, but such is the nature of the return of the repressed."
One can always put in "destiny" instead of "god" or "deity", but it is still teleological reasoning.
And instead of this kind of thinking, we should listen to Jared Diamond, humans choose. We humans choose.
On a binary level we choose to collapse or to survive. On a quantitative level, we choose between different empirical-economy and political-economy scenarios and destiny's. Our
Choices will decide the future paths that we will be walking on. 

John Michael Greer: "Meanwhile there are at least half a dozen contenders for the role of abstract representation of the human race, and none of them is a clear favorite. It may be a long time before all the consequences are sorted out.”
My suggestions are: Homo egalitarian or homo socialis capitalsmus.

John Michael Greer: "Even a fairly modest increase in interest rates would be enough to push the US government into crisis; an increase on the same scale as those that have clobbered debt-burdened European countries in recent years would force an inevitable default".
A country that has debt denominated in its own currency cannot default unless it chooses deliberately to do so. It is also very easy to make payments in full, according to past inflation rates. All this is at least 97% political economic issues and mechanisms.

And no, absolutely not, the US government cannot be forced into a default or a crisis by outside forces! The FED/authorities "prints" money because they will not use fiscal methods. The interest would be even lower if it were not for the QE projects. and most of the debt is money that the government owes to itself!!

John Michael Greer: "At some point in the years ahead, equally, the US government is going to have to default on its $8 trillion dollars of unpayable debt, plus however much more gets added as we proceed".
--- Absolutely nonsense!! What is it with political economy and statistical economy that you do not understand?? if we have an issue/question of cubic/m3 at hand, can you differentiate and manage to see the difference between the rectangle and the height???

John Michael Greer: "If you actually value the information, then you can go to the very minor trouble and the very modest expense of buying the book. If you don't value the information enough to do that, I question whether you value the information."
We can never know whether we value information until after we get to know what it is. Besides,
information should be free of charge because it has been so for hundreds of thousands of years.

John Michael Greer: "What isn’t speculative is that all the trends that have been driving the industrial world down the arc of the Long Descent are still in play, and so are all the parallel trends that are pushing America’s global empire along its own trajectory toward history’s dustbin  Those things haven’t changed; even if anything could be done about them, which is far from certain, nothing is being done about them; indeed, outside of a handful of us on the fringes of contemporary culture, nobody is even talking about the possibility that something might need to be done about them".

Again, John Michael Greer shows he is an epistemological anarchist, on a creationist level. What John Michael Greer sees is the effect of the current political economy in the US, including the rust belt. "even if anything could be done about them". What is it that John Michael Greer does not grasp when it comes to understanding the difference between the political economy and the statistical economy??
Is John Michael Greer blind to anthropogenic factors?

John Michael Greer: "As Joseph Tainter pointed out in The Collapse of Complex Societies, social complexity correlates precisely with social hierarchy; one of the functions of complexity, in the workplace as elsewhere, is thus to maintain existing social pecking orders".
What if in a country, the pecking level&intensity are significantly comparatively less than in other countries? Or between non-sovereign states?

John Michael Greer: "Industrial civilization is a complicated thing, and its decline and fall bids fair to be more complicated still, but both rest on the refreshingly simple foundations of physical law. That’s crucial to keep in mind, because the raw emotional impact of the unwelcome future breathing down our necks just now can make it far too easy to retreat into one form or another of self-deception."

Everything rests on physical law. :-}
Any perception/notion/opinion that the 90%-95% of the economic issues in the US is not the political economy, is on par with creationism. John Michael Greer or any reader of his blog should not need any physicist or chemist or biologist to tell them what is natural law, and what is anthropogenic, including the political economy. Everything is the thermodynamic economy, but the thermodynamic economy is both how we lived 13.000 years ago and how we will live however far into the future. The political economy can be explained as whatever distribution and allocation properties and tendencies an economy have after the agricultural revolution and especially after 1800 AD and into the foreseeable future.

Both the US, Norway, Nigeria, Lichtenstein and Afghanistan and China and Monaco is mostly the political economy, because it is anthropogenic mechanisms why and how people are rich or poor or in the middle, or working as doctors or mechanics or politicians or drug salesmen, or bus drivers, or prostitutes or stock brokers or... etc. etc. etc. you get the picture if you want to. And do you believe in Say's law mr. Greer?

To speak of the thermodynamic economy as the main dimension in industrial economies, is like speaking of the biological economy, because we are biological beings, right? But biologists cannot tell us the important issues on agricultural economics during old China or the Roman Empire, or the slave economy in the US, or whether Marx was mostly wrong, or if Keynesian economics are sound and/or valid without diving into accounting identities and the financial numbers therein.
But to analyze the difference between Nigeria and Norway and the US and Saudi-Arabia and Switzerland, one has to look at the political and cultural sides of things. The proximate cultural variables, and the political economy + accounting that is practiced in different countries. 

John Michael Greer: "this isn’t because the subject is overly complicated. The reason why perpetual motion won’t work is breathtakingly simple; the problem is that the way most people nowadays think about energy makes it almost impossible to grasp the logic involved."
--- The political economy is also breathtakingly simple, the way many people think about the "debt ceiling" has extremely little connection to the thermodynamic economy and the statistical economy outside the political realm of economics. The debt ceiling is an accounting identity that makes the private sector owe less to the public sector, than if it were not for the debt ceiling. Or the US could tax the wealthy and give to the poor and the poor would spend it and voila
we have economic dynamics and spending, production and transactions would increased etc. But that is not to be with the current political economy profile in the Congress.

A free advice to you J.M. Greer. although he's too rightist for my political economy, Cullen Roche will probably be patient enough to explain the basics to you if you ask him some questions on his blog or you send an email to him on his web page: He is a true (albeit rightist) pragmatic capitalist. and by the way, did you read Thomas Piketty's "Capital in the 21st century" yet? The book is filled with empirical data, but it is not physics, and it doesn't even mention the laws of the thermodynamics so John Michael Greer will not even try to read it... says a lot about John Michael Greer. And by the way, Thomas Piketty actually has a future prediction or assumption wrong because he couldn't couple the laws of thermodynamics to his economic theorizing...! 

John Michael Greer: "Most people nowadays think that since energy can be defined as the capacity to do work, if you have a certain amount of energy, you can do a certain amount of work with it. That seems very logical; the problem is that the real world doesn’t work that way."

--- I'd never thought of energy like that, it is because that would be like thinking/believing that the map is the terrain. And I have never made that conflation. And it would be extremely non logical and counter intuitive. I never thought that humans would have a Dyson sphere anytime soon, or in 1400 years, I didn't have to read the essay by Assistant professor Tom Murphy on galactic scale energy.

John Michael Greer: " The amount of work you get out of a given energy source depends, not on the amount of energy, but on the difference in energy concentration between the energy source and the environment."
--- If this is the case, then this theory should apply also for economic efficiency. IF so, this means that social democracy will win the race between different economic models in the foreseeable future. This is quite a higher abstraction level (theory) than the energy density equation in different environments, and so there is uncertainties in this theory.

John Michael Greer: "what you have is a shortage of the difference between energy concentrations that will allow the energy to do useful work. (The technical term for this is exergy)".

--- Then perhaps we could coin a new term, namely "exonomy", it is the economic (productive) concentration that will allow the economy to do useful work, aka utility. And social democratic countries have a lot more exonomy that the US, I would say it is mostly a mismatch.

John Michael Greer: "No nation has been able to run a nuclear power industry without huge government subsidies, and that suggests to me that the net energy from nuclear power is very low, quite possibly negative.",
John Michael Greer: "no nation on earth has been able to run a nuclear power program without vast government subsidies. No matter how much electricity costs, nuclear power still fails to break even. This suggests to me -- and to a lot of other people in the peak oil scene -- that nuclear power produces very little net energy, and may well be a net energy sink rather than a source. "

--- No nation has been able to run the police, the law system, the prison system, the school system, the military, the roads&bridges, etc, on other finance than huge government subsidies, and that suggests to me that the net energy (or net utility?) from the police, law, prison, school, military, and roads&bridges -systems is very low, quite possibly negative. If we exempt the US and non western countries we can add the health care system to that list. All western nations except the US has poured vast amounts of government subsidies into universal healthcare and the healthcare system in general. Should we abandon all this because the net energy is suggested to be less than zero??
John Michael Greer, you are really a epistemological anarchist, aren't you?

John Michael Greer: "Every group of social primates has an inner core of members who have more access to the resources controlled by the group, and more influence over the decisions made by the group, than other members".
--- Entirely wrong! Humans on a tribal level/in-group level are in equilibrium, and there is no member of such a group who would bother to make a contribution to the critique of political economy, or asymmetric power relations because in the in-group social-environment, there is also a horizontal hierarchy.

John Michael Greer: "Arnold Toynbee, whose magisterial writings on history have been a recurring source of inspiration for this blog, has pointed out an intriguing difference between the way civilizations rise and the way they fall. On the way up, he noted, each civilization tends to diverge not merely from its neighbors but from all other civilizations throughout history.  Its political and religious institutions, its arts and architecture, and all the other details of its daily life take on distinctive forms, so that as it nears maturity, even the briefest glance at one of its creations is often enough to identify its source.
Once the peak is past and the long road down begins, though, that pattern of divergence shifts into reverse, slowly at first, and then with increasing speed. A curious sort of homogenization takes place: distinctive features are lost, and common patterns emerge in their place.  That doesn’t happen all at once, and different cultural forms lose their distinctive outlines at different rates, but the further down the trajectory of decline and fall a civilization proceeds, the more it resembles every other civilization in decline."

--- That is because the people or the leaders/power elite chose to do so in the past...! But from the 1900s (20th century), most countries have general suffrage and most citizens can read and write. And the EROEI that can be sustained is substantially higher than any pre-industrial economies, even without hydrocarbons. It is no longer just the power elite who are to blame. It is not even mostly the power elite which is to blame. It is the people, the voters, they choose to do this against themselves. They choose to indulge themselves to a catabolic(?) collapse. They choose to walk down a trajectory of decline. By their voting ballots they are committing econocide.

John Michael Greer: "The part of history that can be guessed in advance is a matter of broad trends and overall patterns, not the sort of specific incidents that make up so much of history as it happens.  Exactly how the pressures bearing down on late industrial America will work out in the day-by-day realities of politics, economics, and society will be determined by the usual interplay of individual choices and pure dumb luck."
--- No more pure dumb luck than what made the Icelandic population choose to survive and the inhabitants on the Eastern Island chose to collapse.
No more pure dumb luck than that the Nordic nations choose to adapt within the limits of semi-equality, and Greece choose to descent, to walk down a trajectory of decline. But Greece isn't done yet...! They make it excessively harder for themselves when they keep the Euro, but for the time being, it seems that their decline is coming to a halt, though Greece is predicted to have some  negative economic growth in the years ahead mostly because of sticky prices + excessive high unemployment rates. 

John Michael Greer: "I’ve discussed in previous posts how people in today’s America have taken to using thought-stoppers such as "but it’s different this time!" to protect themselves from learning anything from history"
--- Most of all, it's industry and technology this time...! And literacy this time, and democracy this time...! We can have a decent EROEI level in general, and a good societal and economic EROEI (Finance capital-ish Economic Return On Economic Input) level if we decide to.

John Michael Greer: "That said, the broad trends and overall patterns are worth tracking in their own right, and some things that look as though they ought to belong to the realm of the unpredictable—for example, the political and military dynamics of border regions, or the relations among the imperial society’s political class, its increasingly disenfranchised lower classes, and the peoples outside its borders—follow predictable patterns in case after case in history, and show every sign of doing the same thing this time around too."

--- The broad trends are the result of choices of citizens and politicians, the overall patterns are the result of the political culture that exists in times and places, both this phenomenons are decided upon and decided by the people, indirectly by the ballots. The societal downward trajectories that often follow from falling EROEI levels is not mostly caused by the falling EROEI levels, it is mostly caused by the political economy...!!! Lest we should bother natural scientists of their time and ask them if efficient economies are an anthropogenic factor or not...?
"show every sign of doing the same thing this time around too", maybe so, but it is extensively more of a choice this time around then in the pre industrial times.

John Michael Greer: "The economic sphere of a society in decline undergoes a parallel fragmentation for different reasons. In ages of economic expansion, the labor of the working classes yields enough profit to cover the costs of a more or less complex superstructure, whether that superstructure consists of the pharaohs and priesthoods of ancient Egypt or the bureaucrats and investment bankers of late industrial America."
--- To which extent could the peoples of Egypt use the ballots to re-allocate the economy, and which total/average economic EROEI level was Egypt at during the pharaohs? And compared to contemporary US economy? And the literacy rates etc. are not relevant??

John Michael Greer: "As expansion gives way to contraction, the production of goods and services no longer yields the profit it once did, but the members of the political class, whose power and wealth depend on the superstructure, are predictably unwilling to lose their privileged status and have the power to keep themselves fed at everyone else’s expense. The reliable result is a squeeze on productive economic activity that drives a declining civilization into one convulsive financial crisis after another, and ends by shredding its capacity to produce even the most necessary goods and services."
--- The only reason that the political class have the power is because the American voters let them keep their schemes and the asymmetric power&economic distribution policies. 

John Michael Greer: "In response, people begin dropping out of the economic mainstream altogether, because scrabbling for subsistence on the economic fringes is less futile than trying to get by in a system increasingly rigged against them. Rising taxes, declining government services, and systematic privatization of public goods by the rich compete to alienate more and more people from the established order, and the debasement of the money system in an attempt to make up for faltering tax revenues drives more and more economic activity into forms of exchange that don’t involve money at all.  As the monetary system fails, in turn, economies of scale become impossible to exploit; the economy fragments and simplifies until bare economic subsistence on local resources, occasionally supplemented by plunder, becomes the sole surviving form of economic activity"

--- Which is by deliberate cultural, proximate and political choice. The people, the voters, the citizens etc, choose to decline by their voting ballots instead of reaching for the level of the best countries in the world.

John Michael Greer: "I’ve come to think that’s what lies behind the steady drumbeat of emails and comments I field week after week insisting that it’s different this time, that it has to be different this time, and clutching at the most remarkable assortment of straws in an attempt to get me to agree with them that it’s different this time. That increasingly frantic chorus has many sources, but much of it is, I believe, a response to a simple fact:  most of the promises made by authoritative voices in contemporary industrial society about the future we’re supposed to get have turned out to be dead wrong."
--- What is different this time is that the consciousness and the general conditions for people and the economic statistical facts are so that it is extremely more of a political choice if, or that the US and/or other countries choose to decline now, compared to pre-industrial times and economies. 

John Michael Greer: "And with that, I’ll set aside my archdruid’s hat again and return to the ordinary business of chronicling the decline and fall of industrial civilization."
--- Which John Michael Greer think is caused by the thermodynamic laws, and not by the Congress or other national political power assemblies, and is not a political economy?? 

John Michael Greer: "It’s dangerous enough for elites to lose track of the contextual and contingent nature of their power when the mechanisms through which power is enforced can be expected to remain in place—as it was in the American colonies in 1776, France in 1789, and Russia in 1917. It’s far more dangerous if the mechanisms of power themselves are in flux. That can happen for any number of reasons, but the one that’s of central importance to the theme of this series of posts is the catabolic collapse of a declining civilization, in which the existing mechanisms of power come apart because their maintenance costs can no longer be met."

--- The maintenance costs of current income per capita can not not only be kept, but can increase if it is done efficiently. And it is not the power mechanisms (or power mechanism costs) in the bureaucracy per se that is the problem, but the causes and the result of current political economy in the US. 

John Michael Greer: "An astonishing number of people these days seem unable to imagine the possibility that such wholly impersonal factors as the laws of economics, geology, and thermodynamics could make things happen all by themselves."

---  John Michael Greer seem unable to imagine and grasp the fact that such factors as the amounts and numbers in the accounting identities makes things happen, and they are proximately decided by the very anthropogenic economy, the political economy which is wielded by the members of the Congress and the presidential administration.  John Michael Greer is truly extremely categorically wrong by detaching the obvious anthropogenic factors from the economy.

John Michael Greer: "That latter point, I think, sums up the tragedy of William Catton’s career. He knew, and could explain with great clarity, why industrialism would bring about its own downfall."
Industrial-ism cannot bring its own downfall, as much as alcohol-ism cannot be dangerous/unhealthy, only over-consumption of alcohol can be unhealthy, as alcoholism and "addiction" is a tautology and not explanatory and not a function term. Industrial-ISM or even capital-ISM will never bring its own downfall, only the political economy can bring down industry or industrial economic environments.  And the political economy is decided if not by the 99% per se, it is decided by the 51% per se... both in theory and as it is applied!

Friday, April 17, 2015

A contribution to the critique of Krugman's Ricardo paper 

Krugman: "The idea of comparative advantage -- with its implication that trade between two nations normally raises the real incomes of both -- is, like evolution via natural selection, a concept that seems simple and compelling to those who understand it".

--- Sorry but almost all aspects/concepts in economics is on a extremely higher abstraction level than molecular or cell-level biology, and biology is void of a conflation between statistical and political "biology" which is not even biology, but political philosophy.

Krugman:  I am not talking here about the problem of communicating the case for free trade to crudely anti-intellectual opponents, people who simply dislike the idea of ideas".

--- Geez, we do not have free trade in any Geo-economic jurisdictions that is even partly industrialized, what we have is politicized- regulated/legislated/managed/administered/governed trade. Same goes for the expression: "free market(s)".

Krugman: "At the shallowest level, some intellectuals reject comparative advantage simply out of a desire to be intellectually fashionable. Free trade, they are aware, has some sort of iconic status among economists; so, in a culture that always prizes the avant-garde, attacking that icon is seen as a way to seem daring and unconventional."

--- We do not have "free trade", not for several hundred years. And not even in the days and place of the Roman Empire was it totally laissez fair. You couldn't take a "noble man" or patrician as your slave, and not even a plebeian, if he/she was a roman citizen.  Everywhere there was dense populations, there were power asymmetry. An emperor or his bureaucrat, or a feudal lord, if you had substantially more than other citizens (economic agents), you were prone to be "assessed" by the anthropogenic powers that were. And you had to bring tribute to the power in charge, or move elsewhere.

Krugman: "After all, economists are familiar with a number of reasons why the gains from free trade may not work out quite as easily as in the simplest Ricardian model."
 --- We do not have free trade, not even a slight resemblance of free trade.

Krugman: "Or consider the recent anti-free-trade writings of James Fallows,".
--- Are you not anti-free-trade professor Krugman? What is your views on the minimum wage?

Krugman: "Free trade is a sacred cow of economists, who are well-known to be boring, stuffy types; what could be a better way to reinforce one's credentials as a radical, innovative thinker than to skewer their most beloved doctrine?"
--- Doctor Krugman, you do not believe in free trade, and you don't want to open that door. Don't go there Mr. Krugman. I'm warning you...! 

Krugman: "free trade is old hat".
--- How much free trade was there in old China 3000 years ago, and in the Roman Empire 2000 years ago? How much free trade was there 100 years ago in the USA and in Europe? How much free trade will there be in the future? The answers depends, among other things on what level of judicial and legal institutions there will be in the future, and on the power range of the national assemblies.

Krugman: "Two goods, two countries, one productive factor, perfect competition."
--- Which is never the case in the real world, aka the economic terrain where agents do business.
Does Krugman really believes this conceptualization has any relevance to the real world?? 
Dr. Krugman, have you heard of "state of affairs"? How bout' economic/financial state of affairs?

Krugman: "that in the long run the economy has a natural self-correcting tendency to return to full employment."
--- And what is the long run? 100 years? 200 years, 500 years or more? A "natural" tendency, does this involves elections, politicians and national assemblies??

 Krugman: "evolutionary theory -- the real thing -- is based on mathematical models; indeed, increasingly it is based on computer simulation."
--- Nonsense! Biological evolution is observable, and falsiefieable. It is not at all based on mathematical models more than the laws of thermodynamics and the gravitational theories is based on mathematical models. It is based on observable falsiefieable facts!! And empirical data which for the natural sciences is both observable and falsifiable. Not so with most economic theories.
We have experimental physics, and we also have some experimental biology in laboratories. Don't confuse mathematics with science.  A great economist would never make imbecile statements about elementary epistemological methods.
Almost all science in natural science is based on full empiricism, except theoretical physics, which is mostly based on experimental physics, which is laws of the universe, by the way and quite different from statistical correlations in the realm of economics.

 Krugman: "justify modeling: Do not presume, as I did, that people accept and understand the idea that models facilitate understanding. Most intellectuals don't accept that idea, and must be persuaded or at least put on notice that it is an issue. It is particularly useful to have some clear examples of how "common sense" can be misleading."
--- What facilitate science way more than understanding, is empirical data based on observable findings with small confidence intervals.

 Krugman: "a simple model can clarify matters immensely".
--- Empirical data thoroughly examined and cross-checked can clarify matters. Does Krugman adhere and follow the rationalistic method rather than the scientific method used by physicists, biologists and chemists? Does Krugman think that he can think and reason himself to clarity without empirical observations?? Does not Krugman pertain to be Teh Empiricist-economist?

 Krugman: "Ricardo's idea is truly, madly, deeply difficult. But it is also utterly true, immensely sophisticated -- and extremely relevant to the modern world".
--- What is extremely more important than Ricardo's idea of comparative advantage in relation to managed, legislated, administered trade, is comparative advantage in relation to political economy in general, and especially the distribution profiles on a macro level.  Which countries had most financial/economic comparative advantage in the context of payoff-probability for
Geo-econ-jurisdictions from 1950 until today, or even from 2007 and until today? Was it not the social capitalistic countries that applies the Nordic model, aka Rhine Capitalism??

We humans are not first and foremost economic agents or trade/trading agents, not anywhere near the way economists perceive people. We are individuals, family members, group members, society members, workers, retirees, students etc. I will remind the naivist's that it didn't take a long time from literacy was invented until societies became so culturally complex that any economic activity had to comply with local law or common law or formal law. You can't trade what you want to trade, unless you comply with the people's cultural construction and social construction in whatever society and economic sphere that we want to roam. Basciat's negative railroad is a good example of this. And of course, the falling profit rates between countries is the most important aspect in this.

Some last words on David Ricardo and free trade; One way of interpreting this concept is that we assume that there would be as much free trade between two or more countries that it is inside a country...!!! lolz. Was it this plan that Marx and/or Ricardo had in mind? Because then it makes sense at least in theoretical logic...! And then there would be no worry about "socialism/communism in one country". There would then be whatever capitalism or (free trade) socialism in a big country that earlier existed as several smaller countries...!
And there would be equilibrium...! Hallelujah and amen :-] :-}

Friday, April 10, 2015

Kommentarer om Rødt's partiprogram 

 Fra Rødt's partiprogram: "Arbeiderklassen kan ikke styre samfunnet etter sine egne interesser innafor rammene av kapitalismen og den private eiendomsretten. Derfor må det skje en revolusjon der arbeiderklassen gjør staten til sitt redskap for grunnleggende systemendringer, og tar styringa over bankene, de store selskapene og de sentrale institusjonene i samfunnet. Historisk har makthaverne brukt alle tilgjengelige midler for å holde på sine privilegier. En sosialistisk revolusjon vil ikke kunne seire uten at borgerskapet avvæpnes og folket tar kontroll over militærmakten. Rødt vil arbeide for at maktovertakelsen skal skje fredelig, og med demokratiske midler."
Min versjon: "Arbeiderklassen og flertallet i befolkningen kan bare delvis styre samfunnet etter sine egne interesser innenfor rammene av asymmetrisk capitalisme og den corporative eiendomsretten. Derfor må det skje en reform der arbeiderklassen og samfunns-borgerne gjør staten til sitt redskap for betydelige modellendringer, og tar enda mer demokratisk styring over bankene, de store selskapene og de sentrale institusjonene i samfunnet.
Historisk har makthaverne brukt alle tilgjengelige midler for å holde på sine privilegier. En sosialistisk demokratisk reform vil muligens ikke kunne seire uten at makt-eliten blir utfordret mht. demokratiske maktfordelings-prinsipper, inkludert fortsatt demokratisk konstitusjonell kontroll over militærmakten og politiet.
Rødt vil arbeide for at maktovertakelsen skal skje fredelig, og med demokratiske midler, fortrinnsvis direkte demokrati".

(på flyer: Vi bringer Joseph Schumpeter's creative destruksjon et par steg videre. vil du delta i den fremtidige økonomiske egalitære evolusjon?).

Merk: Begrepet "evolusjon" har en affinitiv connotasjon som gjør at "evolusjon" minner litt om "revolusjon", men ikke for mye... :-}

Fra Rødt's partiprogram: "For Rødt er kapitalismen bare en bestemt epoke i menneskehetens historie. Da kapitalismen feide føydalsamfunnet til side, representerte den en progressiv kraft som har brakt menneskesamfunnet et langt skritt framover. Den har ført til en enorm utvikling av menneskehetens produktive evner, og den har, spesielt i enkelte deler av verden, medført store materielle og sosiale framskritt. Men nå blir det stadig tydeligere at kapitalismen som system er blitt en trussel mot menneskene og naturen.
Vi kan ikke lenger leve med at et lite mindretall eier produksjonsmidlene, utbytter de som skaper verdiene og ødelegger livsgrunnlaget for framtidige generasjoner for å bygge opp sin egen rikdom og makt. Det er en skjærende kontrast mellom den kolossale produksjonsevnen og det faktum at forskjellen mellom fattige og rike i verden er større enn noen gang. Kapitalismen har overlevd seg selv. Nå haster det å bli kvitt den. Det tjener interessene til et stort flertall av verdens befolkning.
Arbeiderklassen,- kvinner og menn - som gjennom sitt arbeid skaper de verdiene som kapitalen utnytter, må være den drivende og avgjørende kraften i det opprøret som skal føre menneskeheten ut av kapitalismen og inn i det nye samfunnet: sosialismen. Den må stå i spissen for organiseringen og styringen av dette nye samfunnet.
Vi lever i en tid der mye forandrer seg fort og overraskende. Vi ønsker å bidra til at de store omveltningene går i riktig retning: At de leder til likeverd, frigjøring av menneskene og bevaring av naturgrunnlaget for menneskeheten, slik at våre etterkommere kan oppleve et samfunn uten nød og fattigdom".
Min version: "For Rødt er de fleste av dagens økonomiske modeller bare en tidsbegrenset variabel  epoke i menneskehetens historie. Da kapitalismen feide føydalsamfunnet til side, representerte den en progressiv kraft som har brakt menneskesamfunnet et langt skritt framover. Den har ført til en enorm utvikling av menneskehetens produktive evner, og den har, spesielt i enkelte deler av verden, medført store materielle og sosiale framskritt. Men nå blir det stadig tydeligere at de fleste av dagens økonomiske modeller er blitt en trussel mot menneskenes generelle velstand og naturen. Vi kan ikke lenger leve med at et for asymmetrisk mindretall eier en for stor andel av  produksjonsmidlene, ekstraherer/høster de som er ansatte og reduserer finansøkonomiske muligheter for framtidige generasjoner for å akkumulere sin egen økende rikdom og makt. Det er en skjærende kontrast mellom den kolossale produksjonsevnen og det faktum at forskjellen mellom fattige og rike i verden er større enn noen gang. Kapitalismen har overlevd seg selv ved å være veldig tilpasningsdyktig og fleksibel. Nå haster det å få reformert og demokratisert dagens kapitalisme ytterligere. Det tjener interessene til et stort flertall av verdens befolkning.
Arbeiderklassen,- kvinner og menn - som gjennom sitt arbeid skaper mesteparten av de verdiene som kapitaleiere høster/ekstraherer, må være den drivende og avgjørende kraften i det opprøret som skal føre menneskeheten ut av dagens asymmetriske kapitalistiske modeller og inn i det nye samfunnet: demokratisk sosialisme, fortrinnsvis direkte-demokratisk sosialisme, en meget egalitær og horizontal form for capitalisme. Den må stå i spissen for organiseringen og styringen av dette nye samfunnet.
Vi lever i en tid der mye forandrer seg fort og overraskende, hovedsaklig pga. exponentiell vekst. Vi ønsker å bidra til at de store omveltningene går i riktig retning: At de leder til likeverd, frigjøring av menneskene og bevaring av naturgrunnlaget for menneskeheten, slik at våre etterkommere kan oppleve et samfunn uten nød og fattigdom, og et mer egalitært og symmetrisk samfunn som incrementalt nærmer seg equilibrium".

Thursday, April 9, 2015

A reply to Taleb's comments on Piketty and C21C and political economy. 

Taleb: "Within population wealth creation is a series of small probability bets. So it is natural that the pool of wealth (measured in years of spending, as Piketty does) increases with wealth".
--- No Mr. Taleb, it is not natural, it is a cultural proximate variable, and politically decided. Within population, wealth creation is a series of anthropogenic decisions.

Taleb: "Inequality of outcome is not the problem, inequality of opportunity is". --- Taleb hinting that some type of economic inequality is a problem, which is a surprise. 

Taleb: "A wealth tax meaning to punish the wealth generator is absurd: since the payoff is severely clipped on the upside, it would be a lunacy to be a risk taker with small probability bets, with wins of 20 (after tax) rather than 100, then disburse all savings progressively in wealth tax."
--- It would be productive&constructive for the >90%'s if the risk was smaller because of higher minimum level and higher general equality of outcome.
What is a wealth generator apart from being a tautology and/or circular reasoning, or is a "wealth generator" just a finance capital extractor as in a "finance capital anthropogenic harvester"?

Taleb: "Compare someone with lumpy payoffs say an entrepreneur who makes $4.5 million every 20 years to a professor like Krugman who earns the same total over the period ($225K in taxpayer-funded income)."
--- Anecdotal examples, how many professors are there in the US and how many entrepreneurs makes >$4 million every 20 year? 0,1%, 0,01% or 0,001%?

Taleb: "The entrepreneur over the VERY SAME income ends up paying 75% in taxes, plus wealth tax on the rest while the rent-seeking tenured academic who doesn't contribute to wealth formation pays, say 30%.)".
--- What kind of wealth formation theory (WFT) would Taleb suggest?
What is Taleb's theory on wealth formation? And what is Taleb's definition/theory of a wealth generator?
Taleb: "Sorry, if you don't like it but that is purely mathematical". --- Sorry if you don't get it, but it is (almost) purely [anthropogenic] political economy...! Mr. Taleb, do you need to read a wikipedia entry on what a political assembly as the US Congress does and what it does not decide?? And state governments, what is their range of power compared to the federal government/congress entity in the system? Or are you an epistemological anarchist??

Taleb: "Worry about skin in the game, not inequality." --- With what payoff probability? Do you see the mismatch between the Nordic countries vs the US in payoff probability per capita?
Taleb: "Worry about equality in opportunity not outcome". ---  Did you know that there is a strong statistical correlation and causality relation between opportunity equality and equality of outcome??

Taleb: "Worry about the powerful corporations taking over the system via lobbyists and blocking artisans. Worry about the class of privileged mandarins-WNSITG (with no skin in the game) taking over the system via "grandes ecoles"..."
--- In other words, worry about the current plutocratic neo-feudalism that rules the US for some years now? Did you know Taleb, that if the US had equality of outcome levels close to current Germany or France, we would perhaps not be having this debate?? And especially not if the distribution statistics were closer to the Nordic countries?

Taleb: "The top in the US is not the same in 2014 as it was in 1984, and it is a healthy system. In places with cronyism (Europe), the top is sticky."
--- Compared to the Nordic countries + Switzerland, Lichtenstein and Luxembourg? Shall we call the Nordic countries for utopian or semi-utopian countries if you define current US percentage(share) asymmetrical payoff as healthy? And how bout the bottom 10% or bottom 20% in the US vs Europe, is it sticky or is it elastic?

Taleb: " And this is largely the aim and result of low-interest rate policies by central banks since 1987, in the aftermath of Black Monday." --- If the US had only slightly higher interest rate from FED this would do very little, substantial higher FED rate would curb and slow the GDP growth, would that be a good thing mr. Taleb?

Taleb: "the ratio Kapital/NonKapital exploded right there... And had Piketty looked at his "inequality" and Debt-to-GDP he would have perhaps seen the real evil: asset inflation with-stop-from-Central-banks"
--- And 46 million food stampers is not the real evil? Unemployment rates in the US from 2010 is not a real evil? Accumulation of finance capital and real economy assets which buys political power is not the evil? Not taxing the 1%'s substantially more than current level is a real evil, yes?

Taleb: "Rethinking about Piketty's book, and his "data", one wonders whether pages and pages of correlation-implies-causation can sway economists when the message fits their agenda (dispossess the risk-taking money by nonrisktakers is something that dissgusts me) but more rigorous work can leave them indifferent".
--- The correlation data does not imply causality, rather, it tells a story of political economy through decades and generations. Mr. Taleb, do you doubt that the data that Piketty has published is caused by the anthropogenic economy?

Taleb: "One reason I left data out of The Black Swan (except for illustrative purposes) is that it seems to me that people flood their story with data in the absence of logical argument."
--- The empirical data in Piketty's book is what caused it's success, apart from that the empirical data is a result of the politically wielded economy. And there is no absence of logical argument in Piketty's book, nor is there any absence of political argument. Mr. Taleb, would you say that the empirical data in "Capital..." is too close for comfort? Or too asymmetrical for comfort?

Question to Taleb: If you lost everything tomorrow, what would you do?

"This is the ethos of Antifragile: thinking about such an event every day so you reduce fragility to adverse events. I've lived in preparation for that possibility. Plan B is to move to college dorms. But nothing would be more devastating than reduced access to a technical library".

---This answer by Taleb is clearly showing the profitability of a high level of the welfare state. The answer is implicitly implying a social democracy where you can and should make bold attempts for success, if you fail, then the Nordic model, the Rhineland capitalism will pick you up so you have a decent level of material living standards. And then you can make another try to climb up the ladders again, if that is your game. There is also much more social mobility in the Nordic countries, which means that the meritocracy is on a much higher level than in the US. This is adaptive for more than the 51%'s. You could take a look at the Norwegian payoff probability statistics and see for yourself Mr. Taleb. But that would render useless most of what you have said earlier about the macro economic policies that you would support. If you like statistics and comparative advantages, then compare your "healthy" US system against Norway, especially the last 20 years...!

Taleb's theorizing on the airplane industry vs the finance industry; Taleb implies here that he is an epistemological anarchist. Taleb: "Failure saves lives. In the airline industry, every time a plane crashes the probability of the next crash is lowered by that. The Titanic saved lives because we're building bigger and bigger ships. So these people died, but we have effectively improved the safety of the system, and nothing failed in vain." 
--- Mr. Taleb, did you know that it is in the interest of all parties that it is safe to fly? Whether it is the flight attendant, or me, or you, or the pilot, completely regardless of what amount of income or wealth we happen to experience? We have a common and genuine, bona fide self-serving interest that it shall be safe to fly..!!! 
When this is the case, or rather, *that* this is the case to a large extent in the airplane business, the fact that some pilots make more money, that some passengers are poor, has no effect because of the power mechanisms (feedback mechanisms) that is the deciding essential factor in this.
If a business executive sits beside an employee, and the executive is en-route to a meeting to get rid of a lot of employees, this doesn't alter the fact that both the employee and the executive has a genuine common interest that the plane lands safely on the ground, even if it is the exact employee that is sitting beside the very executive, that will be fired in the name of cost cutting. 
They are in the same "boat" or "ship", or even better, as the prospect of a rich peoples 
life-boat-project happened on Titanic is impossible on an airplane. 
Parachutes for business class seats, but not for the rest, is not a probable scenario. But what would happen if it was profitable that airplanes crashed much more prevalent than is the case today? And that this practice is well within the law? What would happen to safety and security in the aviation industry?
Perhaps a morbid thought experiment, but you get the picture.
But on a macro level, there is a struggle of resources, no? We're competing over money, Mr. Taleb, did you know that? Have you taken financial/economic positions earlier in your life, in the hope of, and within the mechanism of, that you would profit more than your opponents, Mr. Taleb? That kind of "games" is a competitive conflict of interest game.
You shouted "fraud" or rather "moral hazard" Mr. Taleb, but you did not address the cause of the moral hazard, and that is power asymmetry. you did not shout "fallacious democracy", or "political power asymmetrical imbalance", nor did you criticize the 51% democracy in the US that is caused by
mathematical dysfunctional election laws, first-past-the-post electoral laws.
Mr. Taleb, you are guilty in severe sins of omission.  

Friday, April 3, 2015

Some comments on the theories of Steve Keen 

Steve Keen: "Having failed to understand the mechanism of money creation in a credit money world, and failed to understand how that mechanism goes into reverse during a financial crisis, neoclassical economics may end up doing what by accident what Marx failed to achieve by deliberate action, and bring capitalism to its knees."
--- The main reason why this happens, is power over the money machine, and the asymmetrical distribution economy. These mechanisms are self reinforcing.
Current capitalism will fail, capitalism in it's current model, but it will fail by Schumpeter, not by Marx.

Steve Keen: "Notably the “labor theory of value”, which argues erroneously that all profit comes from labor, the notion that the rate of profit has a tendency to fall, and the alleged inevitability of the demise of capitalism".
---Since not all profit comes from labor, then are there synergy effects that causes more profits from other sources. The main issue, and the deciding factor when it comes to the LTV by marx, is that he quantified it on a binary level. When marx said that everything except 50-50 is explotation and deviation from this is destined to fail, then he himself dig his own grave, that he constructed by arbitrary and binary slippery-slope thinking fallacy. But still, the profit rate will fall regardless of a labor theory of value or no labor theory of value, or even no value theory at all.

Because we will never be able to avoid the thermodynamical theory (not a value theory). It says that whatever is of value, it cannot be decoupled from the laws of thermodynamics.

 Steve Keen: "At this point, Marx is triumphant. He has established the source of surplus value, and has done so without any initial presumption that labour was the only source of value, an achievement which had eluded his classical antecedents. But at this stage, all he had established was that labour was a source of value. To prove that it is the only source of value, he had to apply the same conceptual framework to the means of production, and find that the presumption of the strict labour theory of value, that the means of production only transfer their value to the product, is confirmed. In this second endeavor, he failed".
-- In this statement, I agree with Steve Keen.

Steve Keen: "therefore there is no a priori reason why issues pertaining exclusively to production itself - such as the ratio of capital to labor - should cause a divergence between rates of surplus value and rates of profit. there is thus no reason why a higher capital/labour ratio than average should be associated with a lower rate of surplus value than average, no technical problem in converting values into prices of production, and no reason why prices should systematically diverge from values (or rates of surplus value from rates of profit) solely on the basis of differences in capital intensity".

---For the first sentence, this is mostly psychology that is the reason why there is divergence between surplus value and rates of profit. and a high rate of arbitrage does not necessarily lead to a lower rate of surplus value ratio. On converting values into prices of production; agree, except this has an
expiry date when interpreting "values" as resources, leading to the tendency of the profit rate to fall as resources are effectively extracted.

Steve Keen: "the tendency of the profit rate to fall suffers a similar fate. this "tendency", like the transformation problem itself, was founded on the proposition that labor was the only source of value, and that there was a tendency over time for the ratio of capital to labor (measured in value terms) to rise. Since surplus can be garnered from all inputs to production, there is no reason why an increase in the ratio of commodity to labor inputs should lead to a decline in the overall rate of surplus".
---Except that this trend can not go on for very long, it has to stop, because the ratio of commodity to labour inputs cannot reach a percentage share in which commodity is 100% and labour is 0%. Then there is no human economy, not even a Robinson Crusoe economy.
The tendency of the profit rate to fall globally is a certain fact within the laws of thermodynamics + human psychology. Lest we try to decouple from the physical world by attempts at "decoupling" or "detachment" that was tried during the Weimar republic and Zimbabwe some years ago.

The tendency of the profit rate to fall will be "re-discovered" before or during the downward slope of the global Hubbert peak oil scenario which perhaps will start sometime around the year 2030. I can promise you that the rate of profit will fall many places quite often. But most of all it will fall when we reach the global thermodynamic limits around hundred years from now.

Steve Keen: "since Marx 's theory of value in fact provides the philosophical foundation for an absolute theory of value, consonant with Sfraffian analysis, in which commodities in general in a system of commodity production are regarded as the source of surplus value. Further development of the method discussed in this paper provide many worthwile additions to the intellectual weaponry of Marxian analysis. In this new tradition, which can exist cooperatively with Sraffian and Kaleckian economics while containing the superior concepts of dialectics and value, it should be to Marx's credit that he provided the analysis by which the labour theory of value could be transcended, and labour and commodities together regarded as the joint  sources of value".
I agree with the last sentence, humans create more labor and more value by using technology and by doing business transactions that involves commodities, that is according to thermodynamic economics.

I totally disagree with dialectics, since it is not a half decent way of doing science with. Empirical data, empirical observations, conventional epistemology and conventional philosophy of science is what I adhere to. It is the same method as in natural science.
For me it is obvious that there is a reflexivity between prices, labor, energy and commodities, and these connections can never break entirely, there can only be grades of plasticity/elasticity.

Labor has inherent genuine value, a value that can not be decoupled from economics, and if so, then that economy/economics is itself decoupled from the laws of thermodynamics. 

Steve Keen do not address the power issue. One cannot have a thoroughly assessment
of macro economic causes and correlations, or a serious attempt at social science unless the power questions are examined. and this goes far beyond the simple notion of the grand qualitative assertions of the asymmetric power distribution, as a generalized percentage equation. but this last point, can be a good place to start.

Steve Keen's emphasis on (Marx's) LTV instead of asymmetric power relations, and the lack of semi meritocratic feedback mechanisms when he gives a lot of blame on the LTV for the comparative disadvantage of the former soviet autocracy. He is certainly correct in a isolated point of view, but when we look at the causes and the effects of the failed experiment, it is obvious by conventional  historical and epistemological standard, that it was the autocratic central planning part that caused more than 80% of the aggregate problems that ended in the demise of the soviet empire. 

And finally, the steady state model (macro economics) by Steve keen. If it does not address the power issues, it is no good for a debate on any economy, regardless if the economies are exponentially growing or in a stable state.

Monday, March 30, 2015

A reply to Cullen Roche's arguments against a wealth tax 

and his comments on Piketty's C21C

Cullen Roche: "But what I am saying is that rising unrealized asset prices don’t necessarily make other people worse off. For instance, if my neighbor sells his home for $100K more than he bought it for then an appraiser will probably trot in and tell me my house is also $100K more valuable. So my net worth rises through no action of my own and through no negative effect on anyone else. My wealth has become more “unequal” relative to people who don’t own an equivalent house, but I haven’t extracted anything from the economy or caused some great harm to society or caused growth in the future to be lower or anything like that".

--- Sorry Mr. Cullen Roche, what you are implying would in effect be a decoupling/detachment from the real economy, and also from the thermodynamic economy. Trying to argue in favor of exempt will not do it. It would also mean that your capital object is void and exempt of aggregate or general taxation on financial capital objects. And that would not be Bayesian, nor frequentist.
There can never be decoupling in finance from real economy, and never any decoupling in the real economy (regardless of transactions or no transactions) from the thermodynamic economy. All this three things are coupled and attached, even if there is a huuge elasticity/plasticity from the thermodynamic economy through the real economy up to finance economy, and this is also the most scientifically correct abstraction hirearchy.
That if there is no transactions to your specific capital object is totally unrelated and irrelevant to what we are debating here, and Mr. Cullen Roche, you should not let yourself be confused in this way, regardless of right or left leaning political economy. 

Ref. the question of Piketty's definition of "inequality", since he assigns a numerical perspective and definition he does not let his enemies get even a slight chance to group/categorize him with Marx as in "semi-Marxist" or "partly Marxist". Thomas Piketty has no such nonsense, and this is not just very important, it is essentially decidingly important. This is the main part of the reason (maybe the #1 reason) that luminaries like Krugman and Solow are mostly in agreement with piketty.

My interpretation of Piketty's concept and notion of economic inequality, can be described as "economic asymmetry". He combines/aggregates income with wealth which could be dubious/uncertain, but most people who are interested in economics, knows the difference between income and wealth including income or wealth inequality.

Cullen Roche: "The second major issue I had with the book was that it’s very gloomy about the future.  Now, I am a relatively optimistic person so I will try not to view this through rose colored glasses, but man has been making incredible progress for tens of thousands of years.  We have grown by leaps and bounds.  In the post-industrial revolution era global economic growth has averaged about 2.1%.  Since 1913 it has been even higher. Piketty thinks this could drop close to 1% by the end of the century".
--- Mr. Cullen Roche you should accept that the profit rate will fall, globally speaking, in about 150 years it is the final thermodynamic limit. Nor you or any other human will ever innovate yourself away from the laws of the thermodynamics, and that means that economic growth will end in about 150 years. Lest you think that we can decouple/detach the economy from the thermodynamics?

How much do you think the US economy will grow in 100 years? And are you aware of that it can only do so by harvesting/extracting resources or capital objects from other nations?

It is an inverse asymmetrical mistake by Cullen Roche when he criticizes Thomas Piketty and
the "99% vs the 1%" payoff-aspect, and say it's about the 0.1% instead,
because of distribution-comparative-numbers in Norway (or Switzerland) vs the US by aggregate/general distribution percentage statistics. If Cullen Roche had a Norwegian p.o.v., the critique from Cullen Roche would have some weight, albeit I would still disagree. And Thomas Piketty is to the right of the political-economic center of Norway. In the US we would enter the 9%-10%'s as statistical broad representative agents, while in Norway or Switzerland it would be the 2-3%'s, by equivalent finance capital segment. 

Mr. Cullen Roche; you're mostly a good capitalist, I don't think you're 70% good :-} (lolz), but at least 60% good for Americans. But you're not pragmatic enough, not when "push comes to show"... hindsight is so easy, and now it is the easiest part to say that Obama should definitively have tried all he could to MINT THAT COIN! What we know for sure is that he didn't try hard. Simple as that. And he definitively should have.
His New Year’s Eve fiscal cliff deal extended 3/4ths of the temporary Bush tax cuts permanently. When that is the case, it is a 99% surrender before the match even has started. The republicans won by walk over or surrender...! :-[ :-{
Barack Obama would do not only well, but also great to demand from the republicans that the whole debt ceiling be eliminated. And he should anyhow not under any circumstance give more than 1% of the Bush tax cuts to the dark side of American politics. And in this you are very wrong Mr. Roche.

Saturday, March 28, 2015

Comments on James Galbraith's comments on Thomas Piketty's C21C 


James K. Galbraith: "Piketty wants to provide a theory relevant to growth, which requires physical capital as its input. And yet he deploys an empirical measure that is unrelated to productive physical capital and whose dollar value depends, in part, on the return on capital. Where does the rate of return come from? Piketty never says. He merely asserts that the return on capital has usually averaged a certain value, say 5 percent on land in the nineteenth century, and higher in the twentieth".
I can tell where the rate of return comes from. It comes from the energy and resources which is transformed and processed and made into entities/stocks/commodities etc, and then we assign the social construction money into this chain of events. The rest is history and economy, we then have these transactions which economists like Piketty (and yourself) can theorize about. This is where the return of capital comes from. It is not at all unrelated to the "productive physical capital".

James K. Galbraith: "But the effort to build a theory of physical capital with a technological rate-of-return collapsed long ago, under a withering challenge from critics based in Cambridge, England in the 1950s and 1960s, notably Joan Robinson, Piero Sraffa, and Luigi Pasinetti".
--- Maybe so, but I Am actually doing some thinking/theorizing on that exact question, how to build a scientific theory of return on capital at a low abstraction level and from a low abstraction level. From the thermodynamic economy up until the political economy on the proximate and cultural levels. What is true for now, is that no economic school of thought has formally coupled/attached thermodynamics into economics.

Anyways, this is unrelated to Thomas Piketty's definition of Capital. And I agree with Seth Ackerman's interpretation of the Cambridge Capital Controversy, that Piero Sraffa had the most logic and obvious epistemologically correct conclusion some years after the happening.

James K. Galbraith: "But the argument of the critics was not about Keynes, or fluctuations. It was about the concept of physical capital and whether profit can be derived from a production function. In desperate summary, the case was three-fold. First: one cannot add up the values of capital objects to get a common quantity without a prior rate of interest, which (since it is prior) must come from the financial and not the physical world".
--- One cannot decouple/detach finance from the real economy and/or the production economy. It was still a real economy in the Weimar republic and in Zimbabwe during and after the hyperinflation
(It cannot come from the financial world as a starting point).

We don't need to nor should we criticize historians for not explicitly connecting the theory of gravitation to the catapults that were used in medieval times, or attaching classical mechanics to the castle's that were attacked and sometimes a prince or king lost his castle because the walls went down, describing such incidents can very well be done and still be (social) scientifically correct. And we don't need to criticize historians for not explicitly coupling the theory of evolution to the cultural, social and economic upheaval and turmoil or peaceful events that occurred since 6000 years ago.

Comments on "Finance as Wealth Transfer Mechanism"

"Finance as Wealth Transfer Mechanism: An Interview with James Galbraith". --- Or the Political Economy as Wealth Transfer Mechanism.

Philip Pilkington: "If I understand correctly you also found that nations have very little control over their own levels of inequality. How did you come to this conclusion?".

--- One can also say that nations are at the mercy of the invisible or insidious hand which according to James Galbraith controls the levels of inequality. How did James Galbraith
come to this conclusion?

James Galbraith: "A nation’s level of inequality has a lot to do with its underlying economic structure and level of development: agrarian, industrial, or high-technology. But we also found, in examining the movement of inequality in the world economy over 40 years, that there was a very strong common pattern.
This suggests that *changes* in inequality have a common source."

--- But that *changes* in inequality does not stem from the political economy, decided upon by politicians? No common source of political economy is detected by James Galbraith?  Is national assemblies detected by James Galbraith?

James Galbrath: "Looking at the major turning points, which were in 1971-3, 1981 and 2000, a leading candidate for that source emerges: the changes in the world financial system.

Until 1971, the world’s economies were largely stabilized under the Bretton Woods system. After 1973, there was a widespread commodities-and-debt boom that tended to reduce inequality in developing countries. After 1980, high interest rates and the debt crisis raised inequality almost everywhere. And finally in 2000 there was a peak; after that interest rates fell, commodity prices recovered, and inequalities around the world tended to ease.

In the face of these global pressures, it’s possible for some countries with very stable policies and strong institutions to resist for a time: for example Denmark does not show rising inequality in our data. Or a country may be insulated from global shocks, as China and India were from the debt crisis in the 1980s (but not in the 1990s). But these cases are very few. In most cases the global forces dominate the picture."

--- "the changes in the world financial system" is not the politically wielded economy?? The insulation of Denmark is not wielded politically by the anthropogenic visible hands of the politicians in Denmark who decides the political economy in Denmark, by the signals from the voters?

This abstract term of "The global forces" is void of politicians who decides and causes the political economy??

"After 1980, high interest rates and the debt crisis raised inequality almost everywhere", and this is not the political distributed debt-economy decided by the Congress, the parliaments and national assembly's around the world?? Or was it the insidious Hand that wrote the laws and crafted the legislation's and so induced the World Financial System?? 

James Galbraith: "But one can also say that the reverse is true: the income distribution is driven by macroeconomic forces." --- But not the political economy, or by the political economic forces?

James Galbraith: "one of things Inequality and Instability shows is that there is a common pattern in the movement of inequality around the world. A very clear pattern. It isn’t just an American phenomenon. That suggests that there must be a common global force behind it. And that would have to be a macroeconomic force, by definition."

--- But still no force of political economy by definition, or by observed causality patterns? Is this "common global force" invisible like the invisible hand??

James Galbraith: "The grip of see-no-evil economics has been broken in many parts of the world, and especially in South America. But in the US and in Europe, especially in Northern Europe and in the UK, it remains very strong. This means that our two continents have actually less open debate, and so fewer political options, than is now the case in many other places."

--- How 'bout the grip of see-no-evil political economics or the grip of see-no-evil political economy, is that not relevant for political economy options?
And the grip of see-no-evil invisible hand or the grip of see-no-evil insidious hand, are you not part of that in relevance to the US, professor Galbraith?
How bout' the "grip of see-no-evil world financial system", or "see-no-evil global forces", what's your opinion on these issues professor Galbraith?

James Galbraith: "We have seen, though, that severe events do have a way of opening up peoples’ eyes and minds, and so there is always hope. I don’t rely on hope, though. My friend William K. Black, the criminologist, likes to quote William of Orange: it is not necessary to hope in order to persevere."

--- And so is there always hopium? Or do you not rely on hopium? And is it necessary to hopium in order to changium??

Thursday, March 26, 2015

Comments on Brad Delong's comments on Piketty and C21C. 

Brad Delong: "Now everybody has their complaints.

Everybody has 10-20% of the argument that they disagree with, and perhaps another 10 to 20% that they are unsure about. But it is a different 30% for everybody. There is not consensus but majority agreement that each piece of the book is roughly correct. And so there is rough near-consensus that the argument of the book is, broadly, right."

--- Brad Delong is here implying that he is at least 60% on-board with what Piketty writes in "C21C", and up to 90% agreement in some passages. That's pretty good, e.g. Chairman Mao said that Stalin was 70% good, so if Piketty is from 60% to 90% good, and "C21C" is on average 60+90 /2 = 75% good, according to the self proclaimed neo-liberal Brad Delong, then Piketty's work is laudable and commendable.

Brad DeLong: "what are the serious complaints":

Brad Delong: "That Piketty has no real theory of what determines the rate of profit, and so doesn't have a real theory of wages either."

--- What makes politicians decide the distribution schemes and legislation's that they do? What makes voters vote for different politicians? We're not there yet, although a few biologist, a few more neurologists and even more psychologists think they have some decent broad theories of what makes people induce the economic distribution percentage-properties that the economy has.

Brad Delong: "That Piketty tacks back-and-forth between a market value--the capitalized current value of all claims on income that are not brow-sweat-- and a physical quantity conception of capital in a way that is not legitimate. That leads his argument astray in places, particularly in that it hides the fact that the capital accumulation that makes the rich so much richer also strengthens, or ought to strengthen, the bargaining power in the labor market of the not-so-rich, and so increased relative immiserization of the masses goes along (or ought to go along) with increased absolute prosperity."

--- Mr. Delong, the agents in the labor market of the not-so-rich are not Bayesian agents. What you are speaking of happened in the Nordic countries, and to a smaller degree some other places, but not in the US, as we can observe...! And it is not a logical sequitur what you assume.

Brad Delong: "That Piketty's framework conceptualizes the issues in an unclear and counterproductive way by speaking of "tendencies" that can be counteracted, rather than doing the normal MIT economics thing--calculating a steady-state equilibrium growth path to which the economy converges over time, and then calculating how that equilibrium steady-state growth path can and does jump in a comparative-statics should the background economic conditions that determine where it is located shift."

--- There is no equilibrium on a macro level, has not been for very long time. And what you are talking about is way too useless, futuristic and philosophical a task, we might have a, (conceptually speaking), an "equilibrium" or a macro economic balance in 200 years. Then most of the world or the US should have, approximately the political economy that Norway has today...! :-} 

Brad Delong: "That Piketty wants to assume that the rate of profit has a floor below which it will not fall--and so increased capital accumulation certainly reduce the labor share of income and may lead to little or no trickle-down to real wages from the increased productivity that ought to flow from increased wealth accumulation--but this argument needs to be spelled out."

--- But we don't know what that is, or Piketty does not know what it is, and it will fall in the future. It is certainly above 0%.

Brad Delong: "That the true historical drivers of the process are not the rate of profit r and the growth rate of the economy g that Piketty speaks of, but rather (1) the economic destruction of the relative wealth of the old European aristocracy as its landed rents collapsed under the impact of competition from the new regions of European agricultural settlement in the New World; and then (2) the rise of urban landed wealth in the form of location as population growth and economic density have outran transportation technologies, and congestion has become a first-order economic cost."

--- The true historical drivers of any process that is related directly or indirectly to the economy the last 13000 years, is the anthropogenic causes.

Brad Delong: "the nonserious complaints":

"That Piketty's argument that the rate of profit has a floor needs to be spelled out. this is essentially (3) in a different form: the argument that accumulation might lead to more wealth equality but less income inequality and much higher real wages is a serious and important one. Piketty does not believe it. But what I see as his failure to deal with it head-on and convincingly is the biggest hole in the book."

 --- If that happens, or if any scenario happens in the future, it will be an anthropogenic economic scenario, the (political) (macro) economy is not just decisions made by the board members of corporations&firms, and the labor agents, but mostly by the politicians in the national assemblies around the world.
How probable is it that most Geo-economic-jurisidictions will become social capitalistic in the future? Brad Delong, do you foresee the Scandinavian Model of Capitalism in the near or far future??

Tuesday, March 24, 2015

Comments on Debraj Raj's comments on "Capital in the 

21st century". 

Debraj Raj: "Saying that r > g implies that capital income will grow faster than labor income is a bit like comparing apples and oranges.
To make the point clear, I’m going to expand upon this argument in two ways. First, let us look at a situation in which the argument apparently holds.
Suppose that capital holders save all their income. Then r not only tracks the level of capital income, it truly tracks the rate of growth of that income as well, and then it is indeed the case that capital income will come to dominate overall income, whenever r > g.
But the source of that domination isn’t r > g. It is the assumption that capital income owners save a higher fraction of their income!". 

--- It is not just an assumption, it is a statistical fact.  

But if the statistical properties of the interaction between apples and oranges are so that we get an asymmetric tendency that makes the apple&orange entity dysfunctional, then we should compare apples and oranges, and analyze the interaction and the properties that it causes.
To which extent wealth inequality has varied, is observable by looking at statistical data in industrialized countries, especially from post WW2. And when capital income owners have a higher income than labor income earners, which obviously is (one of the central tenets of) the 1% vs the 99% issue,  then capital owners only need to save so much that their accumulation is bigger than labor income. What conditions must be met if two different agents/entities are in an economy, and agent B accumulates more than agent A?

Debraj Raj: "Here is what Piketty concludes from this Law, as do several approving reviewers of his book:
that because the rate of return on capital is higher than the rate of growth overall, the income of capital owners must come to dominate as a share of overall income. Once again, we are left with a slightly empty feeling, that we are explaining one endogenous variable by other endogenous variables, but I don’t want to flog this moribund horse again. Rather, I want to make two related points: (a) the above assertion is simply not true, or to be more precise, it may well be true but has little or nothing to do with whether or not r > g, and (b) the law itself is a simple consequence of a mild efficiency criterion that has been known for many decades in economics.
Indeed, most economists know (a) and (b), or will see these on a little reflection." 

--- Is it true or is it not true?

Or is it some doublethink aspect in this, a doublethink that most economists will see on with little reflection??
The law that r>g is not a simple consequence of a mild efficiency criterion, it is the political economy! It is the distribution economy, and the redistribution economy, and the re-redistribution economy.. and the re-re-redistribution economy as we reach infinite re-re-regress...!

On the diminishing return aspect in this; I predict that capital owners will not be happy with falling profit rates, their capital assets and production factors will rather move, and extract profits where they can find them. There will be increased tax competition, income competition, profit rate competition and payoff structure competition in the future as the tendency of the falling rates of profit will be observed more and more on larger areas.

Debraj Raj: "Piketty’s Third Law has been known to economic theorists for at least 50 years, and no economic theorist has ever suggested that it “explains” rising inequality.
Because it doesn’t. It can’t, because the models that generate this finding are fully compatible with stable inequalities of income and wealth. (More on this in the Appendix.)
You need something else to get at rising inequality."

--- As a proximate cause it is the political economy, too few voters vote for equality in general. It is not an ultimate explanation as such, but it is a statistical descriptive. A cause for this is the density of the solidarity sphere. In the Scandinavian countries people vote more pro equality both in absolute distribution-numbers and for relative distribution amounts, and even more so in Norway than Sweden and Denmark. But what causes the political economy/distribution economy to have the percentage properties that it has?? We can speculate or guesstimate on the cultural variables, but we can not build a scientific valid bridge with empirical evidence, yet. We don't have scientific theory of cultural evolution yet, even if I may be so bold to inform you that I am working on it as I write this.

Debraj Raj: "to avoid the ever widening capital-labor inequality as we lurch towards an automated world, all its inhabitants must ultimately own shares of physical capital.
Whether this can successfully happen or not is an open question. I am pessimistic, but the deepest of all long-run policy implications lies in pondering this question. "

--- No, all inhabitants will not own shares of physical capital, and not even in the social democratic consensus democracy of Norway, with the highest income pr.capita in the world for all countries bigger than 5mio citizens, and the most equal by equality of outcome, not all inhabitants own shares of physical capital. But the state does this on the behalf of the citizens!!! A grandeur national public majority utility...economy...!  How 'bout that Mr. professor in economics Debraj Raj...? :-}

And it is rather so that as we lurch towards an automated world, the creative destruction of Schumpeter will be more and more economic necessary, including the political economy that
Schumpeter predicted would prevail more and more.

 Debraj Raj: "But the fact that r exceeds g explains nothing about the rise in inequality."

--- A bad straw man argument Mr. PhD. economist Debra Raj. Piketty did not try to explain the anthropogenic economy by writing "Capital in 21st..", but he did describe it with amounts of
empirical data.
How to explain the effects of political economy by using "my" conceptualization of the density of the solidarity sphere inside an economy is not easy... :-]
Mostly because the density of the solidarity sphere is a sociocultural&socioeconomic descriptive, not explanatory, even if it is on a lower abstraction level than some factors that are of interest for the Nordic model aka Rhine Capitalism:cultural homogeneity including the uniformity school, explains some of it. Relatively equal set of skills&ability explains some of it. Intensity of reflexive feedback mechanism explains a lot.
City state coordinated model of capitalism explains a lot.
Small-medium scale economy with own currency etc explains a lot. Labor movement syndicalism explains a lot. The time factor explains a lot, these mechanisms have been working in the Nordic countries for several generations, and are still going strong. That these factors are self-reinforcing explains a lot.

Or, we could just arrive at the most important qualitative conclusion, when r>g then taxes will have to do most of the job, or else the asymmetric tendencies will increase until the creative destruction of Schumpeter in the distribution economic dimension is let loose; people vote for social democratic parties. Taxation and money printing factors of the political economy explains why inequality is increasing or will be decreasing in the future.
How to get there, well, how did social democracies emerge in the first place??
If some biologists or empirical minded research-psychologist or even empirical minded research economists with their mind set on a-posterior aspects, could find out more about why the social democracies in Scandinavia is not in dire need of the medicine that Piketty would induce, that scientific finding would be of grand imperative importance to the whole planet. :-}

If we find out much more about the causes of equality (of outcome and opportunity) we would find out much more of what causes inequality, and maybe we will find the economic-"medical" recipe and antidote to the economic sickness that torments the world, (which is not an armed revolution that could remove up to 30% of the upper populace strata) and that Piketty describes so eloquently and empirically. 
But as a social-capitalist, I would sincerely welcome a combined wealth&income tax at 80% on all capital that exceeds $1.000.000,- even if that would be perceived as too radical, even in Norway...! ;-} lolz.

My comment on Debraj Raj's respond to Branco Milanovic.

Imagine that there's a *research* officer in NATO that has been in Afghanistan and reports that NATO soldiers has kevlar vests which is solid to the extent that the Taliban soldiers who have AK-47's, and the 7,62x39 caliber of the AK-47 bullets cannot penetrate the kevlar of the NATO soldiers unless they stand within 50 meters away... and the Taliban got no kevlar vests. 
Someone can give this situation a mathematical formula.

The research officer reports with a mathematical formula that NATO soldiers is superior to Taliban soldiers...! And you, Mr. Debraj Raj, says that the formula does not explain the asymmetric tendencies...! The bullets from the inferior weapons of the Taliban can hit the NATO soldiers in their legs and arms, where they are not covered by kevlar, so they can bleed to death. And Taliban soldiers can sometimes come closer than 50 meters if they hide behind mountainous terrain etc? And sometimes there are IED's which sometimes kills NATO soldiers. 
So what's this about asymmetric warfare to the advantage of the NATO soldiers???
But there's more..., and in the cities/towns sometimes Taliban soldiers dress as civilians and blow themselves and some unlucky NATO soldier(s) to smithereens from time to time...! What's all this non-logic talk about the asymmetric *non-explaining* formula from the research officer??? 

Mr. PhD. economist Debraj Raj, you should know better than this, and this is nowhere close to infinite regress. Unless you think we can decouple economic growth from the laws of the thermodynamics? You might imply that the exponential growth pattern equation does not conclude that we cannot have a Dyson sphere in 1400 years? And a galactic scaled economy in 2500 years?

Would you like galactic scaled energy and economies? If so Mr. professor in economics Debraj Raj, the assistant professor Tom Murphy has done the most important math already :-] :-}

Aaand, there is a logistic shoe added for your reading pleasure Dr. Debraj Raj.

And don't flog this cute pony of assistant physics prof. Tom Murphy more than necessary... remember the diminishing return :~} 

And also this:

 Or, r>g means bunkty to Professor in economics Debraj Raj.

If two competing and interaction forces/properties/entities etc. are in the same sphere, and they grow exponentially but they don't grow at the same pace then what? Well that depends. If the two growth trajectories grows exponentially, and by more than 2% every year...!  :-}   Do you know what that means professor Raj?
It means that we can conclude that if this continues there will not just be contradictions, because we already have that. We will observe patterns in the future that can be described as incompatible with each other or as a majority incompatibility in general.
The end result is that something will happen that changes one or several courses that we call trajectories, but sometimes when the trajectories are exponential and they will collide/implode in the future, then this means that there will be another future than most people would believe.

We can induce policies ourselves within the limits of democracy etc. or we can just wait and see...!

Some examples of interaction and competing entities in the same economic sphere is foxes and rabbits, or lions and buffaloes. What happens to the other specie if the predatory specie outgrows the herbivore, in an exponential growth pattern?  

Remember the diminishing return, Mr. professor in economics Debraj Raj. And the r>g is not even close to being a red herring, but in your pdf the issue you make of r>g is much more similar to a red herring. If the world had the political economy/distribution economy of Norway, we would not be having the discussions on "Capital in the 21st century".
But unfortunately Norway is a red herring in political economy, at least globally speaking.

I will also use an analogy from the digital world of software. "x is not a valid integer!"
With the current properties in economies around the world, r>g will not be a valid  integer in the future!
At least not if the different numbers of r and g as percents/percentages will be substantially different. And with exponential growth patterns, there's not much leeway, not in the long run. And we can observe the structural problems already, excessive asymmetrical distribution properties is a drag on the economy, on the economic agents and to the future prospect of exceptionalism and greatness, which the US had in the 50's, and as a diminishing trend in the 60's. The longer the asymmetrical trends continue, the more radical means will be economic necessary to implement to induce the equality-medicine which will be necessary if growth shall continue as long as we can harvest more energy.