The Boy who warned of the Beasts of Capitalism

There was once a young leftist Boy who also was a Democratic Socialist, who tended his proles at the foot of a mountain near a dark forest.
It was rather lonely for him all day, so he thought upon a plan by which he could get a little company and some intellectual excitement.
He rushed down towards the village calling out, "beasts, beasts", "the predatory beasts of capitalism is here to devour us all", and the villagers came out to meet him, and some of them stopped with him for a considerable time, debating the future if the current diverging growth patterns for different segments of the population would continue for a long time.

This pleased the boy so much that a few days afterwards he tried the same trick, because he was a real intellectual this philosopher and leftist boy, and again the villagers came to his help.
But this time the leftist boy could bring amounts of evidence and empirical data to his worry, and the villagers began to reflect intellectually, and the boy of course cried out: "the beasts of capitalism are here, they are extracting us", "let us not succumb to the reign of the beasts of rentier capitalism", still louder than before.
And this time the villagers, who had been alarmed just once before, thought the boy was speaking the truth, and they started to come to his help.
So the villagers made a good financial meal off the beasts of capitalism's wealth by taxing them, in the name of the majority probability payoff structure, and when the crowd cheered, the wise man of the village said: a man who walks his scientific paths paved with empirical data will most probably speaketh the truth of empirical economy and the wisdom of political economy.

--- --- ---

Concluding abstract conclusion: Happy economic equilibrium ending, as per Schumpeter's prediction. 

Goldilocs and the three Social Democratic Bears

How Goldilocks Learned to Stop Worrying and love 

the Nordic Model

 

Once there were three bears, and they thought that they ought to go to the market. "We hope the market will be good", said papa bear, "lest there would appear a tiger to upset the market, and so disrupt the equilibrium that is assumed to be inherent in markets".

Once upon a time also and aligned in time and space, was a girl named Goldilocks. She was a bourgeois beast, a pig of capitalism.

She went for a walk in the forest. Pretty soon, she came upon a house. It didn't have any price tag, so she knocked and, when no one answered, she walked right in.
She thought: "No price tags anywhere, I hereby make my a priori assumption that everything in this house is free for all".

At the table in the kitchen, there were three bowls of porridge. Goldilocks was hungry. She tasted the porridge from the first bowl.

"This porridge is too hot!" she exclaimed.

So, she tasted the porridge from the second bowl.

"This porridge is too cold", she said, "whoever made this, their comparative advantage does not lie in cooking, because this is not according to my consumer preferences".

So, she tasted the last bowl of porridge.

"Ahhh, this porridge is just right," she said happily and she ate it all up. "I certainly have this propensity to consume".

After she'd eaten the three bears' breakfasts she decided she was feeling a little tired. So, she walked into the living room where she saw three chairs. Goldilocks sat in the first chair to rest her feet. 

"This chair is too big!" she exclaimed.

So she sat in the second chair.

"This chair is too big, too!", she whined. "This is not according to my preferences, whoever made this furniture they have no comparative advantage, they will go bust pretty soon if they would try to sell their items in the market. That is my deduction, maybe I could even write a paper on this".

So she tried the last and smallest chair.

"Ahhh, this chair is just right", she sighed. But just as she settled down into the chair to rest, it broke into pieces! "Oh well, now I have at least caused some demand. Someone will have to fix this chair, and so the economy will have more turnover". "This compensates my earlier behavior when I consumed the porridge and assumed it would be OK by deferred payment".

Goldilocks was very tired by this time, so she went upstairs to the bedroom. "Now it's time for retirement, it is my rightful entitlement".

She lay down in the first bed, but it was too hard.

Then she lay in the second bed, but it was too soft. "Oh no, there seems to be this recurring pattern that so many goods are not according to my preferences. That's why I have to go shopping so much, and try things before I buy them".

Then she lay down in the third bed and it was just right. Goldilocks fell asleep.

As she was sleeping, the three bears came home.

"Someone's been redistributing my porridge," growled the Papa bear.

"Someone's been redistributing my porridge," said the Mama bear.

"Someone's been redistributing my porridge and they redistributed it all away! What propensity to consume is that, this gluttony of the rich we here have evidence of", cried the Baby bear.

"Someone's been using my chair," growled the Papa bear.

"Someone's been using my chair," said the Mama bear.

"Someone's been using my chair and they've broken it all to pieces, what a waste, and what kind of moral hazard is that", cried the Baby bear.

They decided to look around some more, to make an inquiry into the nature and the causes of their findings, and when they got upstairs to the bedroom, Papa bear growled, "Someone's been sleeping in my bed," "Someone's been sleeping in my bed, too" said the Mama bear.

"Someone's been sleeping in my bed and she's still there!", exclaimed Baby bear.

Just then, Goldilocks woke up and saw the three bears. She screamed, and her economic mindset suddenly went into disequilibrium and confusion.

Goldilocks and the three social-democratic bears looked at each other and then, the speech of papa-bear: "Now what do we have here? The bitch of capitalism. Are you "harvesting" without contributing? This is unacceptable, either you join us and then we expect you to study, to work, to participate, to comply, to be equal, to be profitable and to pay taxes of what you harvest.
This is what we demand from you, and it is a rather semi-egalitarian expectation, and they are a bit more Bayesian then your expectations. This things are duties, but there are also rights to claim".

Papa bear: "We write some (political-economic) notes, and we write some (political-economic) words". "We are dancing social-democratic bears alright, but we sometimes change the tunes, the notes and the parameters etc. so we are not completely at the mercy of the pigs of capitalism as the marxists claim. But make no mistake...!
Either we have some free-riding issues, which I tend not to call "sick-riding incentives" but rather the welfare state, or we have huuge guard costs like excessive large prison populations + large police force expenditures, and increasing inequality and asymmetric political and economic struggle in our Geo-economic jurisdiction, which we usually call society."

"You have to decide if you wanna join us or leave? You can decide now or think about our offer for a while, but first I'm gonna be honest about what I think about you, you are a pig of (predatory) capitalism. But you can if you want to be, if not a queen, then a little princess of social capitalism, or social democracy as we usually prefer to call our economic model.

We can offer reasonable flat hierarchical working structures, a welfare state and a pretty good aggregate probability-profitability payoff structure, caused partly by syndicalism + high tariffs and partly by after tax distribution. What do you say? Wanna be a social democratista, and a cute little social-capitalista perhaps?"

Goldilocks then imagines collectivization and authoritarian central planning etc. and screams out loud and runs out of the house, but she soon stops and then thinks for a while, like Kahnemans system 2 slow thinking concept. Then the little bear walks out to speak with her in a Socratic dialogue, and then Goldilocks comes back into the into house, and papa bear proclaims: "We're glad you want to become a social democrat, thou art hereby included...!".

The social capitalistic consensus democracy was then restored, and Goldilocks and the three dancing social democratic bears lived in an economic equilibrium the rest of their lives.

Happy Ending as pr. Joseph Schumpeter's prediction.

Copyrighteous: @equalitus.

A tale of the three economists quest for theories

Three economists make a rational (Bayesian) agent (by extrinsic teleology), then an invisible hand (extrinsic teleology), and per finality, (intrinsic teleology) an equilibrium model. 

Stage 1.

(Three economists conceive an invisible hand).

An economist (the first economist) enter a state that has an economy, but in which condition is the economy? What kind and type of economy is it?
A philosopher of science (and epistemology) asked the economist if he would believe in a persons report that an invisible hand was roaming and guiding the market, to which the economist replied no. The philosopher asked what the economist thought if two people reported the same thing, and the economist said he would begin to wonder. The philosopher then asked, "what if three people all claimed to have seen an invisible hand?" The economist replied that he would believe in it. The philosopher reminded the economist that the notion of an invisible hand guiding the economic agents in a crowded market was absurd, a ridiculous mythological narrative, yet when repeated by numerous people, it seemed real.

Stage 2.

(Three economists make a Bayesian agent).

The second economist enter a state that has an economy, but in which condition is the economy? what kind and what type of economy is it?
A philosopher of science asked the economist if he would believe in a persons report that Bayesian agents was roaming the market, to which the economist replied no. The philosopher asked what the economist thought if two people reported the same thing, and the economist said he would begin to wonder. The philosopher then asked, "what if three people all claimed to have seen Bayesian agents?" The economist replied that he would believe in it.
The philosopher reminded the economist that the notion of human agents reasoning and acting in accordance to the equations of Reverend Thomas Bayes, in a crowded market with so many inputs and variables was absurd, and especially when considering the evidence published by Daniel Kahneman, yet when repeated by numerous people it seemed real.

Stage 3.

(Three economists make an equilibrium model, third part of a circular tautology).

The third economist enter a state that has an economy, but in which condition is the economy? what kind and what type of economy is it?
A philosopher of science asked the economist if he would believe in a persons report that the market was in a state of equilibrium, to which the economist replied no. The philosopher asked what the economist thought if two people reported the same thing, and the economist said he would begin to wonder. The philosopher then asked, "what if three people all claimed to have seen the market in a state of equilibrium?" The economist replied that he would believe in it.

The philosopher reminded the economist that the notion of an equilibrium is both preposterous and fallacious, a state of equilibrium happens in a chemical laboratory when all the properties and variables are set exact and appropriately in accordance and in balance to each other, but in the real world with real people, the notion of a state of economic equilibrium in a crowded market with so many different inputs, variables, conflicting interests and high level of complexity was absurd, yet when repeated by numerous people it seemed real.

The philosopher of science tried to warn the economists, he tried to warn all three economists one by one, but to no avail. When the economists gathered,  they all told their stories to each other. One economist said: "There were three different happenings to three economists, we have a pattern here". The second economist said: "This faith will be confirmed". The third economist said: "Yes, we then have probable cause for faith. We shall then believeth in the invisible hand. We shall believeth in Bayesian agents. We shall make a synthesis out of this. We shall call it a dynamic stochastic general equilibrium".

All three economists then chanted together: "This faith is now confirmed, amen".

Stage 4.

(The extrinsic teleological ending of this economic narrative and fairytale).

The philosopher of science approached all three economists at the same time and said: "But don't you see that your conclusions are fallacious and preposterous.
A state of equilibrium happens only in a chemical laboratory when the environment are in a specific condition, but in the real world with real people, using equilibrium models when thinking of macro economics is obviously wrong, a serious and erroneous conflation of empirical economy and political economy, and a dynamic stochastic general equilibrium is hardly any better, for it is too useless a task to think in terms of conditions that may happen a long time into the future, if in the future there will not be a struggle of resources or distribution, and only marginal disagreements on political economy. We could call that a macro economic equilibrium perhaps, but this scenario will probably not happen until many generations into the future."
 "And the invisible hand, that's just a metaphor. To assume a conclusion from the basis of a figuratively spoken metaphor, and to claim that it is a serious attempt at social science is a fallacious statement that is inherently in a contradiction with the scientific method."
"There are agents that are living persons who are causing these transactions, and they are not Bayesian. This is a not even a slight attempt at doing social scientific research within the constraints of conventional epistemology and philosophy of science, especially including the scientific method that is in use in the natural sciences". 

The philosopher then asked the economists if they would believe in a persons report that a tiger was roaming the market, to which the economists replied: "Oh no. God forbid that the market would ever enter into a state of disequilibrium!", and, "How can agents act in a Bayesian manner if there is a tiger roaming the same market as the agents! Just imagine the volatility, recessions and slow growth, the invisible hand would disappear, it would be chased away by the tiger...!".
"What a financial tragedy that would be! And the government would have to bail us out". 

The economists then left the town, convinced that the only thing that could disrupt their new economic model was if a tiger roamed the market and caused mayhem.

--- end of story ---.

Copyrighteous: @equalitus.