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I think a better fact to latch onto is hyperbolic discounting and saliency. People crave excitement (which is now) and ignore the consequences of what generated the excitement. You see this is action for every idiot you see buying fireworks, or cheering on some form of property destruction (as in every modern Hollywood action movie). Saliency is relevant insofar as, when the war is pictured, the picture is of me as hero, killing bad guys, saving babies, having my medal pinned on me. The picture is defined by the 1 in a 1,000,000 hero, not by the 999,999 thousand other guys, many of them drowning in mud, dying of diarrhea or dengue fever, being hit by a bomb before they ever even saw a "bad guy", etc. The question then as to morality of leaders is problematic, not least because some of them seem to deeply believe this stuff every bit as much as their followers. Hitler certainly as in that camp; Stalin may well have been. Everything I have seen of GWB and his intelligentsia suggests to me they all likewise felt the same. (You can despise someone who thinks it's a great idea for the youth [excluding his/her kids] of a society to get shot at, building character and all that; but that doesn't change the fact that that's what they believe.) Which means that I think the two standard tactics the left has used against war in recent times (at least the wars they're against...), that they are immoral, and that those calling for them are liars and hypocrites, are both not especially effective tactics against people who aren't already on your side. Then what is effective? That's the problem, isn't it? How do you fight against stupidity? If we could somehow create a system whereby the pain of war had to be felt before the first bullet was fired (eg by immediately raising taxes and imposing various types of rationing) that would do the job, but how could you possibly get laws like that through the system? Against the most intelligent pro-war enthusiasts you might raise intellectually interesting questions like "OK, what would count as an END to this war you want to start? And how can you be sure that your enemy is willing to agree that that would count as an end and would thereby stop?"; but the problem is the masses who crave excitement today, to hell with what happens tomorrow. cf WW1 and the immediate enthusiasm for war, even against the attempts of some Socialist organizations to point out the consequences. WW2 was greeted with much less enthusiasm by the Allies of course, but I suspect that was purely because they'd lived through the last one. It seems to only take one generation for the accumulated wisdom of lived experience of war to dissipate (and even less, when that lived experience is of ever more minimal war damage, as has been the US experience since, pretty much, the Civil War, and certainly post WW2).
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"There is little more dangerous to the NATO powers than a Chinese elite whose values and interests are not broadly consonant with those of America." Is that true even for a Chinese elite whose whose values and interests are not broadly consonant with those of CHINA? Doesn't that give us Saudi Arabia all over again? And that (Saudi Arabia) does not seem to be a game that's going to end well. The GB to US transition strikes me as something exceedingly rare, in terms of the consonance of values of the two states involved (especially after the Civil War cleaned up that last major disagreement). Because it's so rare, it doesn't seem an especially useful template for other situations.
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"But there are genuine "sources and methods" concerns and this really sounds like one of them." The problem is, we've had far too many examples (since at least US v Reynolds) of the government CLAIMING a state secret when the reality is an attempt to cover up malfeasance or incompetence. This is precisely what "cry wolf" is all about... You may believe the US when it says that something is very different from what it appears to be, but on secret grounds that it can't reveal; however my take is rather, in the words of someone who certainly did his share of telling the public precisely these sorts of lies: "Fool me once, shame on — shame on you. Fool me — you can't get fooled again."
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"Stock prices are (or are very nearly) a random walk: they are as likely to go up as down tomorrow, and whether they will go up or down tomorrow has nothing to do (or very little to do) with what has happened about the past and everything (or almost everything) to do with what we will learn in the future." This, by itself, is a misleading statement. It suggests that stock prices are an UNBIASED random walk. They could be --- for example if businesses paid out in dividends everything they earned. But as an empirical matter they're a biased rather than an unbiased random walk. Since the "random walk" deviation scales as the square root of time, while the bias scales linearly with time, obsessing about the random walk part is irrelevant to anyone with a reasonably long term time horizon; the question of interest is what the drift term is and whether we expect it to become larger, smaller, or unchanged over our time horizon of interest. (One can see the same issues at play in a casino. Your payout from roulette is a biased random walk, with random blips up and down, but with a constant drift term downwards of 2 parts in 36. We all know that what matters in the long run is that downward drift, not the blips along the way.) As for looking at the Shiller data, the problem is that it assumes that the parameters of interest (for example the bias in the random walk) are sufficiently constant in time that they are usefully estimated from a time series. It's not at all clear that this is the case. I suspect a far better starting point would be some sort of mechanized version run across all (large, public) businesses of the sort of work that Aswath Damodaran does on the valuation of individual corporations. Of course this isn't much help either at the times when one most wants an answer: if it's early 2008 and you're trying to model the value of US stocks, there is nothing much available to tell you how Congress is going to behave over the next few years. Or likewise for Europe. (And if you claim there is, answer us right now, before it happens. OK, let's say there are riots in Greece in September and Greece unilaterally exits the euro. Go --- tell us the political response, and how businesses react.) This ALSO only tells us (with some limited precision, some limited confidence) the "correct" value of the S&P --- it doesn't tell us anything about the level of mania that determines the actual level of the S&P. MAYBE you're right to buy or sell on that correct level rather than the mania --- but see the previous paragraph about unknown unknowables. (Though perhaps there IS a useful strategy here based on buying during the run up to the over-valuation, at the point where things look like they're at some sort of historical average point, and selling when they move rather beyond that. Of course this means you only get to "play" once every five years or so, the rest of the time you're sitting the game out and most people can't stand that. The point is --- the downsides, the recessions, are at the unknowable whims of governments and populations, so it's not worth trying to score against them, whereas the upsides are driven by a human mania of shortsighted enthusiasm, and so have a rather more predictable pattern.)
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"pete wilson was the only good gov.ca.ever had" So you and I agree that Ronald Reagan was a terrible governor of CA? Hmm. Who would have thought we'd agree on anything?
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There IS value to the word "emergent" insofar as it tells us of a situation where the results depend on the INTERACTIONS not the constituents. For example, one can talk of properties of matter as being emergent insofar as they are best understood by writing down simple models of how atoms interact, rather than investigating ever more finely the details of atoms qua atoms. A better (more obvious) example might be something like modeling the properties of highway traffic flow based on a distribution of vehicle velocities and response times, without bothering about the details of individual human psychology or how autos are manufactured. Similarly, a discussion of sociology of institutions where, for the most part, what's more important is the ROLES people are playing than the specific INDIVIDUALS inhabiting those roles. There is an obvious relevance to macro-economics, in that trying to ground macro in micro strikes me as a pointless and stupid endeavor, as likely to succeed as grounding climatology in Schrodinger's equation, unless its done EXTREMELY carefully and with seriously deep knowledge of the full scope of all the human sciences. Of course this doesn't mean anything goes. The proper grounding for macro is large-scale OBSERVED regularities, as opposed to large-scale HYPOTHESIZED as "obviously correct" "laws".
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Hypothesis: Smith dislikes the situation of a lord employing servants but can't think of a coherent argument so comes up with this weak sauce. Let's put the issue differently. Suppose our servants are no longer servants as of 1776, but service workers as of 2013. Our cooks do not cook for the lord and his household, but in a restaurant; our housekeepers clean not just the lord's house, but maybe 10 different houses. We now have the situation of division of labor of which Smith was so enamored --- our cooks and housekeepers will learn how to do their crafts efficiently, will invest in optimal tools and so on. Would Smith disapprove of our restaurants and housekeeping services because "their labor is not embodied is tangible goods"? I think not. So his argument is spurious. Clearly what he dislikes is the fact that the lord is employing servants, not the fact that servants are service workers. WHY does he dislike that fact? I'm certainly in no position to answer that. One hypothesis could be some sort of suppressed religious thing (the point of money is to die with a large bank balance, not to have a comfortable life). Another could be some sort of rage at the fact that some are born to a life of luxury based on no merit of their own.
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@JimV & MTstile: Einstein did not so much hate the idea as hate the fact that he was surrounded by people who apparently couldn't get his point. The problem is easy to explain. IMHO it's easiest to explain for a SINGLE photon system. - We start with a single atom --- we can create such a thing in an ion trap and can image it to be sure it's sitting there happily. - We excite the atom in a particular way. The time evolution of the atom now has its excited state (almost an eigenstate) changing with time at frequency ω1, but also (because it's not exactly an eigenstate) slowly evolving to the ground state, which likewise changes in time with frequency ω2. The overlap (the sum) of the electron field for these two states gives rise to a combined state with the properties that (a) it is larger in one area of space than another and (b) the region which is larger shifts in space with the beat frequency of (ω1-ω2). (This is easy enough to imagine. Imagine adding to a constant s orbital, ie a sphere, a pz orbital [think high school chemistry] whose phase changes with time so alternately the upper then the lower lobe is positive while the other is negative). - The result of this is a time-varying charge dipole, which you can visualize just like classical EM, and which gives rise to an EM wave which propagates out in space. - So far nothing too unusual and easily explained by orthodox QM. Here's the part that's NOT covered by known physics. - Put a number of detectors in a large sphere around this atom. What will happen? Two things of note. +ONLY ONE of the detectors will ever detect EM radiation AND +the "amount" (by some appropriate measure) of radiation that is detected is fixed and independent of the radius of our sphere. The second point is covered by the use of the word "photon" and hand-waving about wave-particle duality and suchlike. It is not EXPLAINED and no-one nows how to explain it, in the sense of a coherent mathematical story that connects to the bits we know qualitatively. Essentially we run through the QM math, we calculate something continuous, and then "at this point a miracle occurs" --- we convert our continuous calculation to a measure, claim that some sort of probability draw happens according to that measure, and, voila. But that's NOT the issue today. The issue today is the FIRST point, the ONLY ONE detection. The model we have of what is happening is that the EM wave (or if you insist on meaningless Bohr rhetoric, some sort of EM probability wave proxy) spreads out from the atom at the speed of light. This entity which spreads out IS spread-out --- the atom doesn't "choose" to fire a particle-like photon in one particular direction and ignore the others. We know this because we can run things like interference experiments on this oread-out entity. So we have an entity which is spread out across a sphere of, let's say, one light-micro-second, centered on the atom. OK, our detector at one part of this sphere now fires. What stops any of the OTHER detectors on the light sphere from also firing? If we take relativity seriously, the information, whatever form it might take, of one detector firing can't get to a detector on the other side of the sphere until two more micro-seconds have passed. Do you appreciate the point at hand here, because THAT is the crux of the matter. The phrase "collapse of the wave function" does not make sense if you take relativity seriously. The reason is that the very first thing you're supposed to take from learning relativity is that the phrases "immediately" or "instantaneously" or "simultaneously" do NOT MAKE SENSE ACROSS AN EXTENDED REGION OF SPACE. To say that the "extended" photon "wave function" collapse "instantaneously" on contact with the detector is precisely this point --- to assume that simultaneity has some meaning for something extended in space. THIS is what Einstein objects to. It's, IMHO, obvious even in the case of single photon detection, but people (ie Bohr et al) get pissy and use weird theological language about wave-particle duality which I find incomprehensible, and I suspect Einstein felt the same. So he described a variant of the experiment using two photons or two electrons which gives rise to the exact same problem but which couldn't as easily be papered over by Bohr's stream on meaningless words. The two photon version is exactly the same issue. Detector A detects some property of photon A which "immediately" forces photon B, on the other side of the light-sphere, to take the same (or opposite or whatever) property. What does "immediately" mean in this context, and how can it take place? I said already that the detector is NOT simply detecting a pre-existing correlation which was manufactured at the atom. In the two photon cases, this is also the case. The whole point of the Bell inequalities is to prove this, the whole point of the Alain Aspect experiments, in their ever more elaborate versions, was to show that this is indeed the case --- the detector really does FORCE photon A into some state, it doesn't detect a pre-existing condition, and the state forced really IS forced onto photon B a long way away. How do we interpret this? I have NEVER read a coherent explanation (and I've read a lot on this --- of all the quantum mysteries this is the one that I've considered both most problematic, but also most amenable to actually being solved by slow experimentation and theory, ever since I was a lowly undergrad). But let me give you a very brief outline of how I think the problem might be solved --- at least a framework for what I consider IS a solution, as opposed to meaningless Bohr verbiage. I have to do this at high speed because I have limited time and limited space. But I'll try. (1) Forget the Schrodinger view of the world. The world is not explained by a wave function (whether for one electron or the entire universe) which evolves in time. You need to look at the Heisenberg view and accept that it is real. (Experts will know what I mean here. Amateurs will have looked at the Heisenberg view and decided it sucks, Schrodinger is so much more intuitive. I'm sorry, but that's how it is. Understand the Heisenberg view before you go any further because nothing will make sense without that.) (2) So the Heisenberg view can be thought of as the following. We have a CONSTANT "wave function" (again for a single electron or something larger, up to the whole universe). We also have a field of operators, a collection of operators sitting at each point of space-time. So, for example, there is an Ex operator telling us something about the x direction of the electric field, at each point of space-time. What you think of as, for example, Maxwell's equations, describes the relationships between these operators at each point of space-time. These relationships are invariant across time and space, and, for example, adhere to Einstein's restrictions. (3) The operators by themselves, however, are only half the story. The other half is what they operate on, the "wave function". QM as we understand it today is a theory about the relationships between these operators at difference space-time points, but says nothing about the "wave function". This object is postulated as existing, and UNCHANGING. The analogy is to the operator field being a PDE and the "wave function" being an initial condition. We set the initial condition (somehow) and then can extract all the information, can propagate forward or backward in time as much as we like, by means of the PDE. To use another analogy, the "wave function", the "initial condition", represents "now", the PDE represents our mental propagation of now into either the future or the past. (4) Suppose now that we provide for a mechanism which can modify this "wave function". For simplicity right now, let's assume a totally ordered set of such "wave functions", and that (by some measure) "wave functions" which are "near" each other by this total ordering are "similar". Then, associated with each "wave function" of this ordering, there is a fully evolved universe of space-time, the result of applying our field of operators to this particular "wave function". (5) We can now imagine that what actually happens in "real" time is that nothing but a "now" exists, a particular instantiation of one of these "wave functions". Associated with this "wave function" is its universe, the result of applying our field of operators to this particular "wave function". This "frozen" universe matches what's in our mental projections of the world, it is what you get if (for the particular set of initial conditions) you run the model backwards and forwards, and our brains do that, even if they aren't solving PDEs, just because they have evolved to predict. (6) A "tick" happens and we move to the next "wave function". It's pretty much the same as the previous "wave function" except in some minor detail, so the next "now" frozen universe looks much like the current one. And so on and so on. The important point here is that we have two things that look like time. We have space-time (which I am seeing as a frozen object, fixed and unvarying the moment you specify the initial conditions) and we have the other "time" which is changing the initial conditions. The initial conditions, the "wave function", do not exist in space-time, and so are not in any way bound by Einstein. This is a very brief sketch. Some obvious points which need to be filled in are - it would seem that there IS a coupling from the space-time side of the ledger back to the "wave function" side. The conditions which give rise to "collapse of the wave function" appear to be space-time conditions (albeit not well understood) --- for example one model has that one calculates the spread in gravitational curvature associated with some region of space-time due to the spread in the "wave function", and when that becomes too large "collapse" occurs. A simple mental model of this (which also incorporates some, though not all, of what we want from the granularity of the collapse we see) has something like + whatever the "wave function" is, it is made up of "atomic" sub-pieces. + imagine now the set of operators at each point of space-time is a little CPU. Each "tick" we have the initial conditions and all our CPUs simultaneously calculate the outcomes for all their operators. Some of these CPUs we expect will have problems, something will be out of bounds, and will throw exceptions. Some random one of these exceptions is caught, and handled by modifying the particular sub-part of the "wave function" which led to the problem (ie some electron has its state collapsed). Then we repeat with the new "wave function". There is no beginning, no end, only a sequence of closely similar "wave functions" each of which defines a whole space-time, and so a sequence of closely similar space-times. (More controversial, and perhaps not essential, certainly not physics any more, our consciousness of moving through time is not actually a "motion" in the frozen spacetime generated by each initial condition, it is rather the sequence of "now's" corresponding to the sequence of initial conditions.) This is weird stuff, I know, but there are parts that are amenable to experimental probing, most immediately attempting to elucidate the precise conditions which trigger 'collapse of the wave function". One final point is that, while this sounds nutty, it seems to bear some resemblance, as far as I can tell, to what Lee Smolin is getting at in _Time Reborn_, though I've not yet read that, only some reviews, and this is my attempt to reconcile relativity and "collapse of the wave function" which as been on-going for years.
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"History will be kind to me for I intend to write it."
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"Do any of these systems really work?" I don't want to be a dick, but, seriously, Louis CK. "The Shittiest Cell Phone In The World Is A Miracle": http://www.youtube.com/watch?v=KpUNA2nutbk I'm all for criticizing companies to inspire them to do better, but let's have some perspective here. Google Maps AND Apple Maps are BOTH freaking unbelievable. And they're not just unbelievable today, they're both getting better all the time. Yes, let's criticize if the same problem persists across three updates; but let's also accept that these are systems unlike anything that has ever existed before, that it is phenomenal how well they work, and that we take for granted behind the scenes stuff that is hardly trivial. If you're ever written a program longer than a thousand lines, how'd YOU like to be the person responsible for ensuring that either of these two systems keep running, don't get overloaded, update their data (which consists of a large number of separate types of items, all with very different lifespans) without overwriting anything critical, stay backed up, roll in new features while the system keeps running, etc? In this particular case, Brad is almost certainly correct that we have an over-eager Google Now stepping in. Once again I'd say how about a little sense of history. Yes, Google Now today makes mistakes (as does Siri, as will the almost certain Siri+Google Now mashup we expect in iOS7). You know what also sucked? MacOS 1.0, or Windows 1.0, or even (yes, it's true) Linux 1.0. Go back and look at Android 1.0 or iPhone 1.0 --- not inspiring in retrospect. Things change, and they change FAST. But mistakes are made along the way. To complain about the minor glitches (as opposed to systemic ongoing faults) is churlish. Personally I think Brad strikes the right note here, pointing out the mistake Google has made, and accepting it. The commenters, on the other hand, I think are rather less reasonable.
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So how much evidence does it take before the economics profession is willing to concede that Berg & Ostry (2011) are in fact correct, that "income equality has a more beneficial impact [on economic growth] than trade openness, sound political institutions, and foreign investment"? We could resolve the ACTUAL ISSUE which is causing the problem, or we could spend another generation arguing technical points, all our reasoning informed by free market theology and with zero empirical input...
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So when an article says (re Walmart and healthcare) specifically "Optimists about travel surgery predict they will get results because they focus narrowly on the most elite hospitals and because the published studies don’t account for surgeries that are averted through better diagnosis. But several employers and hospitals acknowledged it will take time—at least a year, Wal-Mart estimates, despite its huge workforce—before they can prove the accuracy of their instincts." some editor feels the correct way to summarize is "Turns out, it’s a great way to save money." Hmm, it's a true mystery why the intelligent fraction of America is deserting the mainstream media more every year...
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"The difference is that Ken Rogoff is both scary-smart" OK, so let's ask the question that everyone refuses to ask. What does "scary-smart" mean? Because as far as I can tell, from every example where I have seen it and similar phrases used, it means something like "able to construct a long chain of non-obvious deductions from a set of premises". Here's the thing. The ability to construct such deductions is WORTHLESS if the premises on which they are predicated are wrong. And a constant theme among the "scary-smart" is that they seem to have a completely broken bullshit detector, and so accept any random piece of crap as a valid premise for their chains of logic. Please, pundits, don't waste our time. Someone whose intellectual claim to fame is of this form is not worth listening to, and you are not improving the world by praising these people with such plaudits as "scary-smart". Wisdom consists of both the intelligence to deduce AND the common-sense to know the appropriate premises for deduction, and someone without BOTH skills is not worth paying attention to.
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I understand your arguments and sympathize with them insofar as they represent the usual case of the poor being screwed over. But in the absence of hard numbers, I do not find that they make the case for Britain becoming richer. My reasoning is exactly as I gave. Britain is not sui generis. There are multiple countries that grew rich during the 19th C; what they all have in common is the embrace of science, not the embrace of empire. Japan is a particularly striking example. I suspect that when you run the numbers completely, the end conclusion is that all this imperial preference crap ultimately results in making a few people in each (master and servant) society somewhat richer, but has nothing to do with mass prosperity in the master society --- which is why nothing much terrible happens or even changes when it is dismantled. An obvious analogy is to the US. The North took the path of Science and, while the North was hardly noble in its many of its dealings, the science machine did what it does and generated mass prosperity. The South took the path of Exploitation and this made a few individuals a whole lot richer, but did nothing useful for mass prosperity.
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People seem unable to grasp my point about Britain vs India, so let me lay out the issue in precise detail. We say Britain gets richer during the 19th C. By this we mean that there is a certain number, call it the GNP, associated with Britain for each year. This number is essentially constructed from the sum over all "products" Britain creates in a year, times the amount of product, times the value of the product. How does this number get larger? On the one hand, we have an increasing number of products, and more created of each product. This is where R&D, construction of factories and machines and public education come in. Throw in also, if you like, the legal system, mechanisms of dispute resolution, "culture", and so on. But pretty much all factors LOCAL to Britain. On the other hand we have prices. These effect things in two ways. The GNP can be made larger if the prices of inputs (the Net part of GNP) are "artificially" small, or if the values for the produced goods are "artificially" large. What would this mean in practice? The first question is what significant inputs does Britain derive from India? Gems and precious metals are not significant inputs for the British economy. Likewise for the other high value Indian goods of the 18th C and earlier like spices --- we're talking 1815+ here. I don't believe India ever supplied much food to Britain (or the rest of the world). We have cotton (NOT the cloth of the 18th C and earlier), which is a significant factor in the British economy, and tea (which I'm willing to accept is, though I doubt it). What else? So a "looting" of India, an enrichment of Britain which was based on India, would be something like Britain acquiring this cotton at a cost lower than could be obtained elsewhere (eg from Egypt, or Central Asia, or the US South). Do we have reason to believe that the price Britain paid for Indian cotton was substantially lower than the world price? Issues like Britain importing a lot of cotton from the US South suggest this was not the case. Likewise for tea. There were other sources of tea, and everything I know suggests that Britain paid the world-price for tea. (This one I'd be more prepared to concede in the face of evidence. The primary other source was China, and China was keeping the world price high; Indian tea had a substantial effect on lowering that price.) The second way the GNP could be spiked would be if the prices for British products are artificially high. This would require that India be paying more than the rest of the world for British items, from services to cloth to locomotives, so as to artificially raise the price of these items as it appears in GNP. Was this in fact the case? I've never heard of such a claim. What I see when I look at the issue is (a) The reason India in the 17C and earlier had 25% of world GNP was that it had 25%+ of the world population, and the entire world was pretty much equivalent in how much value was produced by an individual human. PER CAPITA GNP was lousy in India, even then, way before the Portuguese and then the rest of the west showed up. (b) Once the 19th C really gets going, we move to a world where humans in the right environment can create dramatically more value than ever before. India doesn't move into this world. You can blame the British for that if you like, but that's not the point. The point is that Britain gets rich because it DOES move into this world, not because India doesn't move into this world. (c) Yeah, it sucks to be India in the 19thC producing commodities like cotton and tea and jute which are produced at the same quality levels and at the same cost by dozens of other places. But that's because it sucks to be in the commodity business, no matter what. PCs have become commodities, and it sucks to be in the PC business today. Once again, blame Britain if you want for India not moving beyond commodities, but that is not the argument we are having. Britain took advantage of cheap inputs, yes, but those cheap inputs were cheap because they were commodities, not because of some special British nefariousness. India did not go backward during the 19th C; it simply stood still while Britain moved forward. This British forward motion was driven (IMHO) primarily by science, with some help from a stable legal/political system. Other countries that were willing and able to embrace science did the same thing, from France (with a rather punier empire) to Germany (with a pretty much nonexistent empire) to Japan (with an absolutely non-existent empire, until their idiot fringe took over the country). Meanwhile other countries with an empire, (and even a more or less stable political system) but unwilling to embrace science (Spain and Portugal most obviously, the Ottomans, Russia, China) stood still, just like India.
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mg, Explain this in terms that are more sophisticated than the economics of 9-yr old kids. What exactly were the RESOURCES that were diverted from India. You say Capital. So what exactly? Ancient Indian machines? Indian buildings? Indian land? You say tax revenues? So pieces of paper with 5 pounds written on them? Which they could have (and did) print in London? You are talking the language of mercantilism --- steal the gems and, voila, rich. I want you to talk the language of modern economics. In particular, complaining about the ebb and flow of pieces of paper (title to bits of India, or pound notes as tax revenues) is an epiphenomenon. What were the REAL RESOURCES which were moved from Britain to India? And don't repeat your claim about "economic drain theory". That is an argument about why India was ruined by Britain, a point I am not disputing. It is NOT (in any form I have ever seen) a coherent argument about why Britain was made substantially richer.
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Noah makes a very good point, but there is an even more basic point to be made of asymmetric payoffs. We're all familiar with trolley experiments (http://en.wikipedia.org/wiki/Trolley_problem) in various versions, with the idea that we treat a death that was caused by "accident" very differently from a death that was caused by deliberate (even non-malicious) human intent. I claim that the exact same thing is at play in these sorts of betting experiments: people feel, logically or not, responsible in some measure for an outcome they bet upon. Many people (most? I suspect so) would prefer not to bet, whatever the details of the wager, than be involved. This unwillingness is not so much due to a fear of upsetting god so much as a feeling of "what's going to happen is going to happen, but at least it won't be my fault", or, to put it differently and to focus on a different part of the same issue, it is MY fault if I lose the bet, but it's not as much my fault if I don't take the bet. In my experience people who like to be simply do not believe that other humans think this way; they cannot imagine a consciousness different from their own. And I suspect people who like to bet disproportionately go into economics (and even more so finance). So: if you confronting people (whether random street workers in India or undergrads at State U) and forcing them to bet even though they don't want to, the results you get may be reflecting this antipathy more than anything else. People are going to bet low amounts (unless you force them not to), and they're going to be differently depending on how you phrase the outcome. (The old "if we use this medicine we will save 90 of the 100 sick people" vs "if we use this medicine we will kill 10 of the sick people".) Results on gambling markets taken by professional gamblers presumably avoid this bias. But I wouldn't much trust the results of gambling-type experiments forced on random individuals who are not willing gamblers. (And now, of course, we have a self-selected set of confessed adrenaline junkies who are more likely to go for the big but unlikely pay-off; so it's not clear they're much help either.)
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Pretty much everything important in stochastic processes occurred after Weiner and Doob in the late 1940s, and that's a substantial part of financial math. Similarly for game theory in other parts of economics. I don't see the problem as insufficiently sophisticated mathematics, I see it as a lack of concern with empirics. People are rewarded for creating yet another sophisticated model, then showing how in some non-obvious limit you can convert the integral it generates into a hypergeometric function. At no stage in this process is anyone rewarded for comparing the results with reality. Rewarding people for doing this same thing but expressing it in the language of category theory is not going to improve the situation. There is a place for simple models which get across a useful idea, even if they are empirically flawed. Physics is full of these. There is a place for complex models where the complexity results in better performance. Engineering is full of these. There is no obvious place for complex models with no better performance. Economics is full of these. (Unless, of course, your REAL goal is to have on-hand a set of models which can be tweaked as needed to produce whatever results you want on political grounds...)
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Serious question. How EXACTLY did this "looting" take place, and how did it make Britain exponentially richer? Here's my point. Wealth, especially post-1815-style industrial wealth, results from making large amounts of stuff. How did India help with that? What did Britain take from India? OK, they may have taken some amount of jewels and precious metals. That makes some British individuals richer and some Indian individuals poorer, it doesn't much change the overall wealth of the entire state. India provided a considerable number of soldiers, and that probably helped in the African colonial adventures. What else? I don't want to be a bitch here, I want to actually understand the supposed chain of logic. I'm quite happy with the claim that Britain retarded the development of India --on can debate this, but the chain of logic there is obvious. What I don't understand is how possession of India supposedly made Britain wealthier.
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"I didn't realize how fast water levels in aquifers are falling" Hmm. Doesn't that sum up the economics attitude to EVERY natural resource? Wait until it's too late, whether it's ocean fish, phosphorous, or oil, then throw out a mea culpa about how it was surely impossible for this to have happened because magic of some sort was supposed to prevent it --- rising prices, the invention of a replacement, or whatever. It was economists who mocked Ehrlich and Club of Rome 40 years ago; and while Ehrlich and Club of Rome were both fools to the extent that they laid out precise trajectories for failure, trajectories which could easily be falsified by unexpected events, their larger point about finite resources and exponential growth remains valid today --- and the economist's response to that larger point was, as it remains today, that magic will solve the problem. Ahh, economics, you have so much to be proud of over the last forty years.
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@J V DuBois " I do not see humans as that far off - if we are talking about life expectancy of humans living in the wilderness where life expectancy of humans would be around 30 year. " When you talk of "humans in the wilderness" you are referring to life expectancy at birth. That is not the relevant metric here. The metric that matters is something more like "maximum realistic lifespan" which you could operationally define as something like the lifespan of the 95th percentile of the cohort that make it to age 21. (The assumption is we can't make assumptions about the absolute longest lived, who may be unusual genetically, but we can assume that if most people died from accidents, infectious disease, starvation, that sort of thing, then by eliminating those we can move most people to that 95th percentile --- and indeed we have, in developed societies.) By this sort of metric, humans have always had their sixty and seventy year old members of society. They were rare, yes, but they weren't freakish myths like say Methuselah.
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Just out of curiosity, what's with the weird tense usage in the second document? "Our submarine HAD carried out a successful attach..." etc. Is this some strange convention of British parliamentary language that made sense in 1535 and has not been updated since then? The only way I can contort it to make sense if it corresponds to something like: "We were told that our submarine had carried out a successful attack..." and the convention in these documents is to suppress the "We were told"
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"RT @TimHarford: "That's not the tragedy of the commons. That's the tragedy of you're a dick." http://xkcd.com/958/ Brilliant!" The correct analogy is not to the tragedy of the commons, it is to pollution. And it's not hypothetical --- what Exxon and their shills say every day about global climate change, or what Wall Street and its minions say every day about financial regulation are EXACTLY what is being mocked in the cartoon --- deliberately pissing in the communal well of information so as benefit oneself at the expense of everyone else.
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"The Germans had been taking the Russians to school in 1941, but there were 2 Soviets for every one German, so even after the Germans chopped through the first rank, the survivors plus the following ranks were still larger than what the Germans could keep in the East. Attrition at this point was around 30% for the German combat units, and supply was becoming a greater problem with each step taken towards Moscow, especially after the autumn rains made the unmetalled roads disappear." It's very easy, in hindsight, to say that things would turn out the same as for Napoleon. I'm not sure that is correct. The thing you always have to remember is that the US was not part of the war yet. The issue is not how fast are Russian humans being used up relative to German humans, but how fast are their relative supplies being used up. Without the US to resupply the Soviets, are we certain things would have turned out the way they did? As I understand it, the Japanese had not let the Germans know they planned to attack America, so Hitler was justified in not factoring them into his calculations. Now, of course, once the Japanese DID attack, it was Hitler's choice to declare war on the US, not the other way round; but did he really have a choice in the matter? Presumably once the US starts fighting Japan, the same desire to help Britain that had already been there would only grow, and Hitler's declaration allowed him the flexibility to, if and when appropriate, take out US ships etc. So the question is --- was Barbarossa quite as obviously a crazy, doomed move as it's always portrayed? I'm not sure, and I don't think what Troy says proves the case. The US supplying the USSR is one of those things that CAN happen in war, that swings the balance, but it's also one of those low-probability things that you have to just ignore --- if you consider EVERY possible low probability event that might happen, you'd never start down the path of war, whether for good or ill.
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"Why did Europeans not adopt foreign weapons technology to their advantage in the 400s and 1200s, as they did with Turkish cannon designs several centuries later?" I suspect that, as is often the case, using a generalization, "Europeans", hides more than it helps. The issue is not "Europeans as a single-minded body against the other", it is that there are lots of Europeans, with lots of agendas. The average peasant/slave, presumably, knows little about bows and doesn't really give a damn who wins any battle or war --- his life will be the same either way. Local strongmen were, during this period, probably more interested in how to exploit a changed political order to their advantage than in how to preserve the existing political order. The ones who should care the most are presumably the fighters, but something we have seen throughout history is immense conservatism on the part of fighter, especially when they DEFINE themselves as fighters. Hence, at most times and places, language about "fighting like a gentleman", "appropriate conduct during war", etc etc. We saw the same thing at the tale end of the middle ages --- knights more interested in fighting gloriously in the traditional way than in winning (British bows at Crecy and Agincourt, the slow introduction of guns, heck even Napoleon's finally taking artillery serious). We see it today as the US Air Force continues to insist on the necessity for B2 long range bombers and and improved fighter plane even as the future or air warfare is clearly missiles, drones and UAVs. In other words, the question as phrased does not lead us to a helpful analysis of the situation. A better question might be something like "Why did European SOCIETY not adopt ...", with the concomitant question: "Why DID European Society become amenable to adopting, albeit slowly and begrudgingly, new weapons and tactics starting around maybe 1500". The fact is that the default position during catastrophe is pretty much always NOT to adopt the new, even when the necessity for change is obvious, because change carries the possibility that those on top will lose their privileges, and that threat always seems even more real than the upcoming catastrophe. cf China from 1600 to 1945, heck cf western society (US and Europe) today in the face of financial calamity
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