Topic: Economic Devastation - page 32. (Read 504811 times)

CoinCube I wonder if you as a doctor can even know what your patients feel if you haven't experienced their illness yourself. I have come to the conclusion that no one who hasn't had daily chronic illness could comprehend (the daily feeling of the malaise) how it grinds down even the most determined fighter spirit. As a doctor, you can observe the lethargy and (possibly stoic) grimaces, but this can significantly understate what the patient is feeling inside; OTOH there are other patients who wail and exaggerate. (Also I do understand why you could not comment on my herbal treatments due to liability issues being I presume a licensed doctor or at least your responsibilities in your profession)

Entropy is not some vague concept. It has a precise mathematical definition which is the sum of the logarithmic relation of the number and probability of the possible configurations (a.k.a. states) in the system, i.e. it is measure of the granularity and uniformness of possibilities in the system, i.e. the availability to fitness (to receive work) of the system.  Mankind could not have achieved such amazing feats without a much larger scope of capability states and more distributed probabilities within that scope. In other words, if all lifeforms were capable of doing only one thing, mankind can't accomplish many things. If lifeforms can't interact to form higher information content, then their input to evolution can be lost and the information content decreases.

If you only focus on the biological lifeforms, you miss the entropic force. Biological lifeforms considered only physically and in isolation from the network effects (and memory of evolution) is just a zero sum game if without the entropic relationship. It is akin to focusing only on the actors of the system and treating the interaction of lifeforms (not in the physical but in the informational and evolutionary memory perspective) here on earth as a closed thermodynamic system.Thermodynamics tells us that entropy depends not only on the net flow of energy but also the work dissipated external to the system. The information content of evolution is orthogonal to the physical work done on earth, so all the energy being input is also being dissipated out of the open information system of evolution.

Data irrelevant to an actor is noise,  information that cannot be accessed, environment entropy

As i said information is not created it is discovered, or carved out of the entropy of the universe. When 2 actors come together and communicate ultimately  its is done by sharing a state, not flow but entanglement! their later computation based on the new information does not increase the information content simply shifts focus, that is we asume fixed memory, or at least bounded. Now you can argue that actors can record information but still the argument holds because there is not infinite supply of memory, or that actors can coordinate to hold diffrent parts of information so as to maximize total capacity but that just shifts entropy up or down in the network hierarcy

I think Hidalgo makes a pretty good job at clearing it out at least in my head the Info Matter Energy trinity interactions
if you havent watch his first talk do so
https://www.youtube.com/watch?v=9cXe8w62_ow

He claims that If you have entities that compute (lifeforms), a way to store Info as in solids or macromoleculles like DNA, and operate out of equilibrium ie in an energy potential that creates a flow you can grow information. and cheat the 2nd law

However he doesn't answer my inner question if this is emergent behaviour. I believe that if an energy flow exists, structures will emerge that will transform energy into information (low entropy)

, that compete the natural dissipative processes that transform energy to incoherent information (high entropy),

Of course TPTB will cut in here and say (and rightly up to a point), that Knowledge age will carve up the firms barriers into openly interconnected sub-networks networks no longer tied to a single Firm exposing thus their internals into Hand's domain again. I would welcome that situation as that would also mean that Firms will leave their Feudal age and be more Democratic.
However nature has not shown that it favours such a path. Nature seem to prefers monotonic appropriation of Hands Territory behind an ever expanding Coase barrier. Nature doesn't like market operations internally as their entropy production if accumulated is equivalent to death.

he argues that much of the resource allocation is hidden behind the Coasian barrier, internally in the firms in a non market way (political), and only a portion that will get smaller and smaller as the Firms barriers expand is left to be handled by market dynamics.
This runs in parallel with before mentioned structures that metabolize energy into internal information production and own growth rather than allow entropic forces to play freely.

So computation and life and social organizations and the higher stratified computational networks as they expand move territory from the Domain of the Hand into the internal Domain of they Internal central planning.

I can't imagine that Europe is face such a situation. Also these days most people from European countries started adopting bitcoin.
Coincube has done a good work of creating such a topic even before the crisis has started. He has predicted and observed much
about the market scenarios. Anyhow my prediction is bitcoin also grows only along with the growth of the world countries which
are facing a great distraction in economy.

I will be the first to admit I needed a week to fully absorb the following works of AnonyMint.

The Rise of Knowledge
Understand Everything Fundamentally

Europe will not disintegrate
Goldman Sachs conquers Europe

(source: independent.co.uk)

Coase’s theorem says that an inefficient internal order will continue for as long as there remains an unavoidable frictional barrier insulating it from the more efficient external possibilities. The fundamental reason the EU crisis will not result in a disintegration of the union, at least not until its people significantly abandon collectivism, is that organisms which are unable to comprehend the mechanism by which they are consuming resources faster than their ecosystem can replenish, thus are unable to stop the mechanism before they perish. So the implosion of the friction and thus the order only occurs when they perish, because they will continue to repeat the mechanism which they do not understand to be a cause of their suffering. This can be verified in a petri dish, as an organism will reproduce until it consumes all of its food or oxygen. Due to the lack of a pre-frontal cortex, it is unable to comprehend the connection of reproduction to unsustainability. Unfortunately, even though humans have a pre-frontal cortex, they do not comprehend that debt, insurance, bonds, fractional reserve money, and centralized governance, cause the demand (and thus production) of resources to be overconcentrated in sectors of the ecosystem that create a less productive future. In the next section, I will explain that these financialization mechanisms cause collective failure and thus demand ever increasing centralization (i.e. “too big to fail”), because from their inception they all pool capital. Thus they are always collectivism.

    “It amazes that otherwise bright people can’t understand the simple concept that economic collapse doesn’t convert collectivists into anarchists.”

Thus the people are blind to the mechanism which is enslaving them and reducing their prosperity. Thus, since they will not change the mechanism, centralization of governance will grow stronger from the current financial crisis, and will diminish only when the involved organisms perish. Entropy is continuously culling the center of the bell curve so that knowledge can advance. I make no political judgment when I state factually that these mega-death cullings take many forms, e.g. abortions kill 42 million annually, it is reasonable to assume birth control probably more than that, some statistics claim that governments and wars have killed a couple 100 million in the past century, totalitarianism (the political end of pooling resources) kills millions, drugs and medications probably kill millions, cancer rates are double in the ‘developed’ world (the countries with financialization), and arguably GMO food may add to that. I am not making a political judgment on reproduction, rather to state the fact that actuarial economics are constrained and politically intractable without a sufficient population of youth. And as will be explained with the entropic force, it is the antithesis of knowledge formation, to a have uniform (replicated) social action.

    “Currency wars are like [...] slap wars, trade wars is where the knives come out.”

        “Currency wars > trade wars > hot wars.”

Europe is predominantly retirees (low or negative birth rates exacerbate this), that own various european country bonds via their retirement plans. If interest rates go up, the bond values decline, and their retirement is toast. The politics is to appease subconscious denial, which is why you see Merkel talking tough and simultaneously making gradual steps towards centralized printing and fiscal controls. The savers want to penalize the non-savers, under some illusion that they can convert the non-savers, but they don’t accept culpability for causing the problem with a collectivist form of saving. If the collectivist non-savers were converted to collectivist savers, then who would borrow? Illogical.

Thus, the savers are blind to the fact they too are collectivists. Productive europeans (e.g. Germans) want to have a fixed interest rate return by loaning money to less productive sectors who can buy their exports. Now they want to deny they are subconsciously in support of money printing, because they also don’t want their fixed income to disintegrate (even though it will be debased either way). Due to the psychological phenomenon of ‘false attribution error’ (i.e. blaming the stone that one tripped on, a form of cognitive dissonance), they want to be the victim who will spank and control the bad PIIGS, via increased centralized control. Neither the savers nor the borrowers are the victim, they all are collectivists and being culled by the entropic force. Note, Germany’s debt ratio is as bad as the USA and Canada.

Fiscal centralization to come next (link explains how), with copious money printing and centralized rationing (i.e. austerity and/or price controls). The recent health care legislation in the USA, is price controls and rationing. The only prosperous fix for health care, was to eliminate insurance a priori so that individuals could maximize and individualize their preparations for aging. I will explain that pooled savings, i.e. insurance, is collectivism and thus automatically wasted.

My outlook is optimistic, in that those who understand how to avoid collectivism, facilitate maximum knowledge formation and efficiency of market fitness, will prosper and (they and their offspring will) survive entropic culling.

Imagine if life was perfect and without chance. Life would be deterministic and could be modeled with an algorithm, then failure couldn't exist, everything would be known in advance, and thus there could be no change that wasn't predictable, i.e. real change wouldn't exist and the universe would be static. Life requires imperfection and unbounded diversity, else life doesn't exist and isn't alive. Equality and perfection are the ambition of the insane who probably don't realize they must destroy life to reach their goal.

Thus the theory that it would be impossible to predict what computers would contemplate is nonsense because the input entropy of the models of the brain will always be finite and deterministic from the time the input entropy is varied.

Pseudo-random number generators are deterministic from the time the seed is changed. Even dynamically capturing entropy from the changing content of the internet would be deterministic from each moment of capture to the next, and the model of capture would be lacking diversity and static (only modified by a human).

The 160 IQ genius Microsoft founder Paul Allen refers to this as “specialized knowledge” in The Complexity Brake, yet he thinks the brain is finite because he apparently didn't consider that every finite human brain is unique; thus systemic creative thought possesses dynamic unbounded entropy.

Ray Kurzweil responded that the human genome (DNA) has a finite information content, and claimed that humans possess a canonical brain which is differentiated by what is learned from the environment during each human lifetime.

Since the portion of the human genome pertaining to the brain has an entropy in the millions or billions, each human brain is potentially at least one-in-a-million or one-in-a-billion unique. Notwithstanding that uniqueness, if human evolution was entirely encoded in a finite genome, then it would be mathematically possible for a plurality of humans to have identical brains at some point in time as the brain forms before differentiation from non-identical learning environments. However, the brain is learning and exposed to the environment as it is forming in the womb, thus there is never a point in time where the brain was entirely structured from only the information in the DNA.

Thus evolution is not just an encoding from the environment to the genome, rather a continuous interaction between the ongoing environment and the genome. Thus for computers to obtain the same entropy of the collective human brainpower, they would need to be human reproducing, contributing to genome and interacting with the environment in the ways humans do. Even if computers could do this, the technological singularity would not occur, because the computers would be equivalent to adding more humans to the population.

The implication is that the creativity of humankind is enhanced as the human population grows. And culling the population to increase average IQ would reduce human creativity. Resilient systems don't have low entropy.

Claude Shannon showed us that the capacity for information content is equivalent to the entropy of a system. As elucidated above, the entropy of our universe is inseparable from life, thus information is alive.

This is the essence of the debate I was having with professor JorgeStolfi (which I had to put on temporary hold).

this really needs to wait for when I might have the time to write an essay or series of essays or more formally develop some mathematical arguments.

Life prioritizes entropy because entropy is the antithesis of a uniform (i.e. static) distribution and non-existence. This can not be refuted. But it is sufficiently abstract that you and most others can't see that concretely unless it is spelled out very carefully. I don't have spare time to do it justice right now.

Energy is conserved. It is dead. It only is useful because entropy is created along the way. Period. With only energy and no friction, everything would collapse into a completely static environment. Friction and entropy are intimately related and I need to develop that argument more formally.

Well Life and Intelligence and Human societies run contrary to thermodynamics...

Yes

So asymptotically this process will ultimately lead to actors that reach equilibrium in a single step, ergo Central Planner, and no more walking by Invisible hand. If you don't accept this then you accept that the model can't work as in case 1

This is a path that will most likely be taken before AI models human economics starting from shop bots, or trading agents. But there is an inflexion point. Up to this point AI will be simple following the wishes of the actor and understood by it but still susceptible to gaming it, so the hand may have its bot helpers for faster convergence, but will not be "Invisible". However after the inflection point where we cant understand AI but they us, the strategy AI will choose cannot be determined, Agents may choose to disregard a local search for equilibrium and opt to distributedly compute an optimum equilibrium.

If we reach that inflection point however is open to debate.

Your argument is that once economic actors become aware of an economic model that can predict behavior they move to take advantage of this new information thus altering behavior and invalidating the model.

This is not always true. If the existing system distributes resources optimally accurate modeling may not open any arbitrage opportunities. Alternatively profits may come from identifying and circumventing market barriers that are inhibiting and preventing a walk towards equilibrium. In this event accurate modeling may result in actors that walk ever faster towards equilibrium.

If AI progresses to the point where it can model and predict human economics it would rapidly replace humans as primary economic decision makers. However, rather then a single central AI I suspect you would see multiple AI's managing the economics of corporations and even households. The artificial intelligences would presumably not be able to fully model the behavior of other AI's due to processing power limitations. Thus equilibrium would again be obtained by a multitude of actors (this time artificial) working towards their individual goals and walking towards  equilibrium as if guided by an invisible hand.

The impossibility of a top-down omniscience was already proved:


It doesn't matter how observers alter their environment, because they can never alter ALL OF IT because the speed-of-light is not infinite.

thaaanos can chase his tail with unbounded failed attempts to obfuscate that inviolable fundamental fact.

Only the Invisible Hand of the trend of entropy to maxium (because time can't be reversed, thermodynamic processes are irreversible) is in control. The entropic force is fundamental. Even gravity has recently been shown to derive from it.

...But begetting information is not easy. Our universe struggles to do so. Our ability to beget information, and to produce the items, infrastructures, and institutions we associate with prosperity, requires us to battle the steady march toward disorder that characterizes our universe and which troubled Boltzmann. To battle disorder and allow information to grow, our universe has a few tricks up its sleeve. These tricks involve out-of-equilibrium systems, the accumulation of information in solids, and the ability of matter to compute. Together these three mechanisms contribute to the growth of information in small islands or pockets where information can grow and hide, like the pocket we call our planet.

So it is the accumulation of information and of our ability to process information that define an arrow of growth encompassing the physical, the biological, the social, and the economic, and which extends from the origin of the universe to our modern economy. It is the growth of information that unifies the emergence of life with the growth of economies, and the emergence of complexity with the origins of wealth...

If AI progresses to the point where it can model and predict human economics it would rapidly replace humans as primary economic decision makers. However, rather then a single central AI I suspect you would see multiple AI's managing the economics of corporations and even households. The artificial intelligences would presumably not be able to fully model the behavior of other AI's due to processing power limitations. Thus equilibrium would again be obtained by a multitude of actors (this time artificial) working towards their individual goals and walking towards  equilibrium as if guided by an invisible hand.

This has already been refuted (by Lindsey Lamport and other Byzantine fault tolerance researchers) because the speed-of-life is not infinite, thus no perspective can be a total ordering. Or stated another way, due to the delay of propagation of information there will exist a plurality of arbitrary perspectives none of which are a total ordering.

Sorry. It is impossible to argue with that truth.

But my pragmatism is, damn the torpedoes and cover thy eyes, ears, and logic. Buy the dips with your student lunch allowance!

Its not a question of existence it is a question of applicability. You can't apply Invisible Hand to model actors that know and understand its mechanics.

Essentially the actors by understanding the invisible hand, they model it. So that model cannot now model said actors, you need a meta-model. It is an incompleteness argument really.

This is why I think that an AI, serving as metamodel can really be used to model economy. It may understand us if and only if we don't understand it.

By observing we alter the results.  Thing is the FED thinks it can manipulate the economy successfully and so change natural events but I believe they are ultimately merely going to observe a return to the mean despite their best efforts.      I think we follow highly predictable patterns even after all our changes through the years we remain basically the same in human activity though it might be as complex as a fractal the economy does still follow the same principals laid down hundreds of years ago which wasnt our invention really just conclusions on the natural flow of business etc.
Apologies if I misunderstood the point and I understand humans can defy gravity but they dont stop it being a consistent force and I think economies follow similar practise