"IMHO, any statement that you cannot reduce to simple arbitrage is not economics at all. The rest is all decoration."
Yep. I sometimes feel economics gets crushed by its own weight and suffers the fate of philosophy, leading to discussions about how many angels can dance on the head of a pin. This is a great article that explains well how these forces of inflation and tax rates change preferences.
I have fond recollections of sitting and talking (mostly listening) with you at the Gilder Telecosm conferences where we were both speakers and you introduced me to thinking of economics using the Second Law of Thermodynamics. Your ability to simplify the complex and teach economics as it should be taught everywhere (visually) is rare if not unique. When someone truly understands a subject they distill it to simple elements - those who don't, or have ulterior motivations, strive to make it complex.
I've tried to follow your lead in my writing. I shared a paper a few weeks ago that I first published last May on my Linkedin page. I think you will find very interesting. Advancements described by Moore's Law reduced the cost of information - some suggest by a billion fold during the last 40 years. The paper addresses why the continuation of this vast economic benefit has dwindled if not died. This is not to suggest there won't be advances in technology coming our way - there will, but they will come much more slowly and be driven by different things that are not entirely visible outside a small circle.
Paul, thank you for your kind note. I remember our wide-ranging conversation that evening well. Earlier that day I has to give the lecture to the group that was. my first attempt to recast economics and finance through the lens. of thermodynamics. Carver Mead was in the front row--I was scared to death. So grateful to the help he gave me over the years. I will find your paper and read it eagerly. The first thing I have my PhD students read is von Hayek's two papers here he developed the notion that the price system is an extremely efficient information network that had solved the 'division of knowledge' problem. That notion fits perfectly with the complex systems work in nonequilibrium thermodynamics that views credit crises as cascading network failures.
Since then I have devised our investment strategy around the phase transitions thamark crises. Look forward to reading your paper.
Dr. John, Thank you for your thoughtful reply. I hope you are doing well. I've read some of von Hayek's work in the past, but it has been a very long time ago when I was trying to establish a foundation for my macro-economic perspective. I'm encouraged to now to read - possibly reread - the two papers you assigned your students. When you have the time, could you share the titles of the two papers?
Thanks for your kind words, Jeff, and for reading my article. The ideas literally hit me while I was looking out an airplane window flying from Miami to LAX in 1977. I remember thinking to myself, "all of the things I am looking at are NOT GDP. But they didn't fit into any other economic models so I had to cook them up from scratch.
Thanks, Russell, hope you are well. Lot of years since we last shook hands in Claremont. I had a nice surprise couple weeks ago when I got a phone call from CMC telling me that Jerry Heisler, one of your old classmates, has endowed a scholarship with my name attached. Couldn't have been more surprised.
That is more rewarding to me than you could imagine. I love teaching young people. Thanks for helping them navigate this confusing world. They are, of course, all welcome to free subscriptions.
"IMHO, any statement that you cannot reduce to simple arbitrage is not economics at all. The rest is all decoration."
Yep. I sometimes feel economics gets crushed by its own weight and suffers the fate of philosophy, leading to discussions about how many angels can dance on the head of a pin. This is a great article that explains well how these forces of inflation and tax rates change preferences.
You are a true gentleman, Mykel. I have always found simple words and simple logic to be true best ways to discuss complicated topics.
I have fond recollections of sitting and talking (mostly listening) with you at the Gilder Telecosm conferences where we were both speakers and you introduced me to thinking of economics using the Second Law of Thermodynamics. Your ability to simplify the complex and teach economics as it should be taught everywhere (visually) is rare if not unique. When someone truly understands a subject they distill it to simple elements - those who don't, or have ulterior motivations, strive to make it complex.
I've tried to follow your lead in my writing. I shared a paper a few weeks ago that I first published last May on my Linkedin page. I think you will find very interesting. Advancements described by Moore's Law reduced the cost of information - some suggest by a billion fold during the last 40 years. The paper addresses why the continuation of this vast economic benefit has dwindled if not died. This is not to suggest there won't be advances in technology coming our way - there will, but they will come much more slowly and be driven by different things that are not entirely visible outside a small circle.
Thank you, Paul McWilliams
Paul, thank you for your kind note. I remember our wide-ranging conversation that evening well. Earlier that day I has to give the lecture to the group that was. my first attempt to recast economics and finance through the lens. of thermodynamics. Carver Mead was in the front row--I was scared to death. So grateful to the help he gave me over the years. I will find your paper and read it eagerly. The first thing I have my PhD students read is von Hayek's two papers here he developed the notion that the price system is an extremely efficient information network that had solved the 'division of knowledge' problem. That notion fits perfectly with the complex systems work in nonequilibrium thermodynamics that views credit crises as cascading network failures.
Since then I have devised our investment strategy around the phase transitions thamark crises. Look forward to reading your paper.
John
Dr. John, Thank you for your thoughtful reply. I hope you are doing well. I've read some of von Hayek's work in the past, but it has been a very long time ago when I was trying to establish a foundation for my macro-economic perspective. I'm encouraged to now to read - possibly reread - the two papers you assigned your students. When you have the time, could you share the titles of the two papers?
Regards,
Paul
Happy to do so Paul. Drop me an email at drjohnrutledge@gmail.com and I will send you both papers. John
Compelling ideas I've not seen anywhere else, written with brilliant clarity.
Thanks for your kind words, Jeff, and for reading my article. The ideas literally hit me while I was looking out an airplane window flying from Miami to LAX in 1977. I remember thinking to myself, "all of the things I am looking at are NOT GDP. But they didn't fit into any other economic models so I had to cook them up from scratch.
John
Good article! completely agree
Thanks, Russell, hope you are well. Lot of years since we last shook hands in Claremont. I had a nice surprise couple weeks ago when I got a phone call from CMC telling me that Jerry Heisler, one of your old classmates, has endowed a scholarship with my name attached. Couldn't have been more surprised.
John
Sharing with my students (again). Thanks
That is more rewarding to me than you could imagine. I love teaching young people. Thanks for helping them navigate this confusing world. They are, of course, all welcome to free subscriptions.
John