Me: Science is wonderful, progressive and necessary for understanding temporal apparencies. Wisdom is inclusive of science. (the sages of yore, particularly of the Hindu and buddhist traditions were the scientists and most objective observers of consciousness of their or of our age) Integrating Science and Wisdom can enable a higher state of epistemological insight, and in fact the signature of scientific breakthrough is the integration of the scientific method and an aspect of consciousness like looking-visualization, curiosity, intuition, imagination etc. etc. This is why we require a Wisdomics.
If I may suggest a couple of koans and a straight forward question for economists and scientists:
What exists wherever you go?
How can you experience the three dimensionality of space while blindfolded?
What is the single integrative and aggregative point between the micro and macro economy, and as both the pricing system and the money system are digital what might that mean so far as beneficial monetary policy?
Me: Wisdom is the discerning process of integrating the truths, workabilities, applicabilities and highest ethical considerations in apparently opposing perspectives. And that is precisely what economics needs to truly progress, and science needs to move beyond its 400 year old process of becoming an orthodoxy rather than a legitimate paradigm for inquiry.
KZ: Observing the world requires always an observer. The observer chooses what to examine and how to examine it. The observer in the end is the source of all human knowledge. There is no “already there.
Me: That begins as an apt observation, but then contradicts itself.
As Jon Kabot-Zinn’s book states Wherever You Go There YOU ARE. So the “thing” that is always there is consciousness and excluding or suppressing that fact is very unscientific…if one believes in good non-orthodox science that is. Wisdom, which is the de-dogmatized science inclusive mental discipline of inquiry, is what is needed for the complete (though momentary) understanding known as scientific breakthrough. And grace-graciousness as in love in action/process is the pinnacle concept, experience and goal of both science and wisdom.
Investigate the concept of grace vis a vis economics and you’ll find its aspects of individual freedom, systemic free flowingness, gifting, abundance as opposed to austerity, non-dominating, non-orthodox benevolent power and control and dynamically flowing, simultaneous integration of opposing factors….to be precisely what all of the present cutting edge reformers are saying….yet not fully cogniting on or unifying under because they’re only thinking with science and mathematics instead of Wisdom which includes consciousness itself and which is a component part of a new paradigm.
PP: Articles on this blog (RWER) repeatedly go on about how modelling macro phenomena by simulating micro representative actors doesn’t work. Hold on! It doesn’t work because the way economists go about this (as far as I know) is rubbish: The actors are too simple and too uniform, the simulations are too small, and there’s no attempt to fit models to reality.
Try applying this technique in earnest. Make large-sale simulations of randomly varied actors, and give each of them a package of complex motives. Model 2nd and 3rd level phenomena like marketing and imitation. Start with modelling a specific population and time period that transpired in the recent past past, initially informed by statistical data and common sense, and then tweak the actors until the macro simulation matches historical reality. Run many variants of the assumptions using generic algorithms to be sure that you have convergence and didn’t just luck out. Then you may have a model with some predictive power applicable to some real-world domain.
And then it may still not work. Economic behavior may be just too emergent to model this way. But we don’t know that. We’ve not heard why micro modelling cannot possibly work, only that it doesn’t work when done in an obviously ineffective way.
Me: That’s a very good scientific suggestion. Another way to approach the problem is to find a stable and relevant micro foundational datum and point in time where all agents are terminatedly and willingly participating and are also in agreement about an economic decision….like at the point of retail sale…and then craft monetary policy there that recognizes that both the pricing and the money systems are digital and so are able to resolve the major chronic problems that modern economies are afflicted by.
KZ: Pavlos, what you describe is referred to as backcasting by modeling professionals. Modelers don’t use the terms micro and macro. They don’t accept this distinction. Actions are modeled in relation to one another over time. Most modelers also don’t deal with the notion of causation. The objective is to create models that depict actions following on one another over time. For example, what happens to different sorts of communities that have poverty, pollution, etc. over time. Using computer models the actors and actions can be constructed in whatever fashion the modeler fancies. A common route to assess whether what we put into the model provides results useful in things like testimony, policy development, writing legislation, etc. is backcasting. Here the model is applied to an historical period for which complete (or near complete) data for the areas that concern the modeler and/or policy makers appears to be accessible. The results of the model are compared with historical data. The model is modified through insights and skills that come only with study and experience until the results are “close enough” (again only with study and experience) to historical data. There are two main challenges with backcasting (aside from gaining the needed experience and insights). First, is the historical data acceptable? Often there are numerous versions of historical data from which to choose. Second, which of the various versions of “close enough” agreement between model and historical results do we select? There’s no right answer. It’s a pragmatic choice based on what seems to work best in different situations.
Me: Models and theories are the chaff of science and research, paradigm perception is the 24 carat gold of same. Why? Because theories come and go, or in the case of neo-liberalism stay way beyond their efficacy. On the other hand even though it’s an affront to the merely scientific mind (and historically verifiable)….everything adapts to a new paradigm….not the other way around.