orb@whuxl.UUCP (SEVENER) (05/10/85)
> > Comment of Gadfly: > >[...] Capitalism has its strong points, but the misery brought > >about by boom-and-bust overproduction is not one of them. > > Business cycles are indeed not a strong point of Capitalism; nor are they a > weak point. They are, in fact, not a point of Capitalism at all, but rather > of government manipulation of the money supply which distorts patterns of > savings and investment. > > Back later, > DKMcK Come now, Dan, surely you jest. Cycles are a phenomenon of *any* dynamic system, be it economic, ecological or biological. In order for there to be *no* economic cycles whatsoever the system would have to be *constantly* at the exact equilibrium point. Plausibly the only way such a system could exist would be if were actually no longer dynamic whatsover-i.e. either stagnant or dead. Indeed the whole point of neoclassical economic theory (and Marx' statements about the dynamism of Capitalism) is that supply and demand are dynamic and constantly shifting- such things as price controls restrict such dynamic changes in price and supply. As conditions shift the equilibrium point also shifts-but responding to these shifts involves lag effects and other factors. As I have pointed out earlier, it is possible theoretically for the market system to become more and more erratic under the conditions of the cobweb effect. Statements such as the above make me wonder if you are studying economics as a science or Libertarianism as a simplistic ideology totally divorced from either reality or logic. At the same time, I think it is just as much a mistake to assume that economic cycles do not exist in centrally planned economies. It is merely that such economic cycles are different in character from market cycles and probably more tied to political shifts. "There is no way for the human body to ever have high-blood pressure, diabetes, or other such ills except for interference from the brain!" tim sevener whuxl!orb
mms1646@acf4.UUCP (Michael M. Sykora) (05/12/85)
>/* orb@whuxl.UUCP (SEVENER) / 10:46 am May 10, 1985 */ >Come now, Dan, surely you jest. Cycles are a phenomenon of *any* >dynamic system, be it economic, ecological or biological. Why? Provide evidence that dynamism implies cyclicity. >In order for there to be *no* economic cycles whatsoever the >system would have to be *constantly* at the exact equilibrium point. Since this conclusion is not obvious, how about eleborating the reasoning that you claim leads to this conclusion. >Indeed the whole point of neoclassical economic theory (and Marx' >statements about the dynamism of Capitalism) is that supply and >demand are dynamic and constantly shifting- such things as >price controls restrict such dynamic changes in price and supply. >As conditions shift the equilibrium point also shifts-but responding >to these shifts involves lag effects and other factors. This seems to imply oscillation, but not necessarily cyclicity. How do you deduce cyclicity from this? >As I have pointed out earlier, it is possible theoretically for >the market system to become more and more erratic under the >conditions of the cobweb effect. What is the "cobweb" effect? Mike Sykora
josh@topaz.ARPA (J Storrs Hall) (05/14/85)
In article <632@whuxl.UUCP> orb@whuxl.UUCP (SEVENER) writes: >Come now, Dan, surely you jest. Is "Surely you jest" the new rallying cry of the Socialists? >In order for there to be *no* economic cycles whatsoever the >system would have to be *constantly* at the exact equilibrium point. This is complete, utter, total, absolute bullshit. A system oscillates if it is underdamped; if it is overdamped (or critically damped) it moves towards equilibrium asymptotically; under no circumstances does it sit constantly at the equilibrium. >"There is no way for the human body to ever have high-blood pressure, > diabetes, or other such ills except for interference from the > brain!" > tim sevener whuxl!orb The business cycle is more aptly compared to the effects on a drug addict's body of his alternately overdosing and going cold turkey. The Keynesian "prescription" for this condition is an even, smoothly but constantly increasing dosage. After all, in the long run we are all dead. --JoSH
orb@whuxl.UUCP (SEVENER) (05/14/85)
> From JoSH: > > from me > >In order for there to be *no* economic cycles whatsoever the > >system would have to be *constantly* at the exact equilibrium point. > > This is complete, utter, total, absolute bullshit. A system oscillates > if it is underdamped; if it is overdamped (or critically damped) it > moves towards equilibrium asymptotically; under no circumstances > does it sit constantly at the equilibrium. > Precisely my point: a *dynamic* system can never sit at the equilibrium point. It may tend towards the equiliibrium point which in itself is probably shifting. But there is also the possibility that it can have wide fluctuations like: the Great Depression. > >"There is no way for the human body to ever have high-blood pressure, > > diabetes, or other such ills except for interference from the > > brain!" > > tim sevener whuxl!orb > > The business cycle is more aptly compared to the effects on a drug > addict's body of his alternately overdosing and going cold turkey. > The Keynesian "prescription" for this condition is an even, smoothly > but constantly increasing dosage. After all, in the long run we are > all dead. > > --JoSH The Libertarian "prescription" is the Great Depression - lets leave any stabilizing government influences aside and let the market put 33% of the workforce out of work. After all in the long run we are all out of work. Regardless of revisionist history which tries to rewrite the history of the origins of the Great Depression I have yet to see a refutation of the fact that *massive government intervention* is what finally brought the US out of the Depression. This does not mean all government intervention is good, wise, or necessary. It is simply accepting the fact that without it we might have stayed mired in the Depression for years. tim sevener whuxl!orb
josh@topaz.ARPA (J Storrs Hall) (05/16/85)
In article <637@whuxl.UUCP> orb@whuxl.UUCP (SEVENER) writes: >> From JoSH: > > from me >> >In order for there to be *no* economic cycles whatsoever the >> >system would have to be *constantly* at the exact equilibrium point. >> >> This is complete, utter, total, absolute bullshit. A system oscillates >> if it is underdamped; if it is overdamped (or critically damped) it >> moves towards equilibrium asymptotically; under no circumstances >> does it sit constantly at the equilibrium. >> >Precisely my point: a *dynamic* system can never sit at the equilibrium >point. It may tend towards the equiliibrium point which in itself >is probably shifting. But there is also the possibility that it >can have wide fluctuations like: the Great Depression. That's not what you said at all. Look up and reread it: you said that either a system has cycles or it sits at equilibrium. >> The Keynesian "prescription" for this condition is an even, smoothly >> but constantly increasing dosage. ... >> --JoSH > >The Libertarian "prescription" is the Great Depression - lets leave >any stabilizing government influences aside and let the market put >33% of the workforce out of work. > tim sevener whuxl!orb This is one of Tim's more flagrant strawmen... --JoSH
mmt@dciem.UUCP (Martin Taylor) (05/21/85)
>>In order for there to be *no* economic cycles whatsoever the >>system would have to be *constantly* at the exact equilibrium point. > >This is complete, utter, total, absolute bullshit. A system oscillates >if it is underdamped; if it is overdamped (or critically damped) it >moves towards equilibrium asymptotically; under no circumstances >does it sit constantly at the equilibrium. >> tim sevener whuxl!orb >--JoSH JoSH's first quoted line applies to both comments. Severner should distinguish turbulence (chaotic flow) from cyclic oscillations, and JoSH should be aware that his comment applies only to a resonant system perturbed by a single impulsive event. It is extremely unlikely that a system that depends on a continuous energy flow could avoid some kind of oscillatory behaviour (possibly tending toward chaotic). If one considers, alternatively, that the economic *structure* is a stable entity, then one should note that it is perturbed by numerous shocks, not just one, and that any resonances in the structure will pick up those frequencies in the shock spectrum thus giving results that look like oscillations. In other words, DKMcK's ideal free market will not have cycles if events happen very slowly (by analogy, its Reynolds number is very low and the flow of energy/money is non-turbulent), but such a market will inevitably oscillate or break down into chaotic conditions when activity levels get high. -- Martin Taylor {allegra,linus,ihnp4,floyd,ubc-vision}!utzoo!dciem!mmt {uw-beaver,qucis,watmath}!utcsri!dciem!mmt
mms1646@acf4.UUCP (Michael M. Sykora) (05/23/85)
>/* mmt@dciem.UUCP (Martin Taylor) / 6:39 pm May 20, 1985 */ >A very interesting article that suggests economic cycles are very strongly >controlled by almost "physical" processes is: Economic cycles are very strongly controlled by "almost 'physical' processes?" How? What precisely are "almost physical processes?"
tos@psc70.UUCP (Dr.Schlesinger) (05/31/85)
The folks carrying on the sometimes interesting discussion about
"systems" seem sometimes to forget (and then it gets
not-so-interesting) that "systems" don't "exist" at all. They are
ideas created by various scholars who define a phenomenon which lends
itself to chronological analysis -- usually something like a graph --
and which on that basis then gives evidence of some regularieties,
some recurring pattern of behavior. Change your definition of the
phenomenon, and the apparent regularity or recurrence changes.
To treat "systems" as reality is simply another crude reification.
The folks who get awards for the articles and books which announce the
"discovery" of the systems would be the first to object reification of
what are, and should remain, no more than hypotheses... ways of
depicting reality to be used as intellectual tools to better sort it
out, and learn about it... most optimistically to predict future
behavior.
Tom Schlesinger
Plymouth State College,
Plymouth, NH