Comments (13)

• Deacon

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  Re your reference to socialism/communism,
  it is FAIRNESS underpinning an excuse to
  steal the fruit of another's labors.

  Re economics as science, no, it cannot
  be so defined because there are too many
  variables, such as one's whimsical wish to
  buy this or that, or to stop buying because,
  say, the emotion of love prevents one from
  engaging normal day-to-day behavior.

  Economics is about supply and demand
  management of limited resources, and
  about human greed, charity, love, hate,
  health, illness, and WHIMSY--the last of
  which makes economics a speculative
  pursuit, and one that no application of
  the scientific method can perfectly ex-
  plain, such as how adding 2 plus 1 can
  explain what "3" means.

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  Published: July 5, 2008 4:54 AM

• Inquisitor

  Yeah, only if you arbitrarily define science in such a way that it's exclusively positivist. No, economics is a science, albeit not one like physics.

  Published: July 5, 2008 5:34 PM

• theeconomicfractalist

  
  Macroeconomics is a science just like physics. With physics a vast number of subatomic particles, perhaps made of shared combinations of energy strings combine to make recognizable and measurable matter and energy whose actions and relationships are recognizable in macropatterns and laws which so define the science. So too are the basic assets, services, trades, money, debt, and many basic human interactions that are described as praxiological variables but which are integrated as a summation event into identifiable quantum time fractals of asset valuation growth and decay which describe the macroeconomic universe.

  US 150 Year Second Fractal Nonlinearity and The Quantum Macroeconomic Fractal Series: x/2.5x/2x/1.5x

  The Wilshire closed at 12815.47 on 3 July 2008, near its 22 month lows. Composite equity valuation decay will follow a quantum fractal decay pattern. What is that fractal pattern? Will the current fractal decay pattern time frame and final low be mathmatically consistent with the larger growth and decay pattern starting in October 2002? Will the US 150 year composite equity second fractal's terminal nonlinear area be incorporated within a larger nearly perfect quantum fractal pattern whose evolution and valuation saturation limits intuitively is casually determined by systemic unpayable massive debt? This historical debt evolved by unregulated credit expansion, financial engineering, and uncompetitive interest rates and taxed savings accounts and has resulted in oversupply, over ownership, over valuation, and gross and growing dysequilibrium between the jobs and wages needed in the real economy and the ongoing capacity to service the excessive amount of facilitated debt. The global macroeconomy composite equity valuation well represented by the Wilshire is now evolving under such apparent and growing dysequilibrium conditions and is within the terminal devaluation area were debt and entitlements wlll undergo synchronized default. The October 2002 x/2.5x/2x/1.5x ideal quantum fractal progressio is a 11/27/22/13 of 17-18 month evolution and a 46/115/92/ 51 of 69 week evolution. The 92nd week of the third fractal contained the 19 July 2007 high and a reflexive 20/50/40 day fractal yielded the predicted 11 October 2007 interday nominal all time Wilshire high. Is first decay base 13 weeks vice 23 weeks? This fractal decay base would generate a decay sequence of 13/32-33/32-33 weeks vice the 23/48/48-50 week sequence...In this mathematical construct the second decay fractal could be composed of a 24 week and a 9 week fractal with a low at the end of the 9 week fractal substantially higher than expected because of massive and historical federal reserve intervention with total rate cuts of over 2 percent for the January -March 08 time period with contemporary financial guarantees involving the collapse of the fifth largest US investment agency. This short 9 week fractal serves as a potential smaller interpolated base fractal for a final 9/17-18/17-18 week decay fractal series. The week of 7-11 July 08 will likely have a substantial nonlinear movement with the Wilshire on 4 July 08 at the 77th day of a 38-39/77 of 78 days x/2x-2.5x series. The 38-39 day first fractal base starts on 22-23 January 08 and ends on 17 March 08 and composes the short 9 week base. The 2x end of second fractal at day 77 of 78 is near the low valuation level of the first fractal with decay nonlinearity expected between 2x and 2.5x or between day 78 and day 95. With the deteriorating second fractal valuation level, nonlinearity is expected in the early range of the 78 to 95 day 2x to 2.5x time window..
  17-18 additional weeks of a third decay fractal 9/17-18/17-18 weeks would take the decay pattern to a low consistent with the terminal portion of the larger 46/115/92/51 of 69 week fractal progression starting in October 2002 and provide strong support of an operative self limiting mathematical quantum formula defining the limits and governing the complex macroeconomic system. The valuation devolution within the final third fractal of 17-18 weeks would reflect a necessary massive repudiation of debt and entitlement payments in the global debt expansion system which has fostered asset oversupply and overvaluation and has caused a facade of GDP growth. GM is likely to go the way of New Century and Delta during this next 18 week time period, with a final fractal pattern of 34/69/34 weeks, a fractal pattern elegantly similar to the pattern composing its first 34 week fractal a 9/18/9 week pattern. Fractally interesting, gold as a marker for commodity speculation has a potential 11/28/10 pf 28 week decay fractal which would match the expected composite equity low. On a daily basis as of 4 July gold and gold stocks are following a final 9/23/16 of potentially 18 day growth fractal. How low denominated in US dollars will the old yellow relic fall in the next 18 weeks supported by a plummeting number of surviving dollars? The devolution of equity and commodity valuations within the 18 weeks will likely be the greatest percentage drop the world has ever experienced.

  Published: July 5, 2008 7:37 PM

• newson

  economicfractals=cobblers!

  Published: July 5, 2008 10:30 PM

• blogger

  Sell Italian bonds. Italian public debt has reached a record high at 1646,7 billion euros.It is worse than 1992 when the country went very near to declare default.

  Published: July 6, 2008 5:58 AM

• Inquisitor

  Nice parody. :)

  Published: July 6, 2008 9:39 AM

• hayesy

  Is there a full moon...?

  Published: July 6, 2008 11:08 AM

• Yancey Ward

  Gary Lammert,

  I have wondered where you have been. It appears that you have made a solid prediction and within a time frame in which it can be remembered. If you are correct, then I will be the first to acknowledge it loudly and often.

  Published: July 6, 2008 11:47 AM

• Miklos Hollender

  This is a very important article, to understand the difference between praxeology and praxeological economics.
  While praxeology is universally true, praxeological economics is true only for a subset of human actions. Generally, it's true when people have more or less
  Pareto-optimal goals: they want to benefit themselves or someone else, they don't care much about the rest, but they don't really want to harm anyone either.

  The problem is that competition for status and prestige is a very basic, very powerful human motivation, and praxeology can help in understanding it,
  but praxeological economics cannot, because status is always relative, always based on interpersonal comparisions, and one gan gain status not only
  by gaining/doing something good that increases one's relative status, but one can also gain relative status by sabotaging the relative status of
  others by harming something they own or do (i.e. violence). A scientist can gain status by research, or maintain his relatively high status against a rising star
  young scientist by actively sabotaging, or harming, or at least suppressing and ridiculing his research. Praxeological economics, as of now, offers zero help in understanding that second approach. And yet it is the cause of most of our problems.

  I think the most important difference between a functional and dysfunctional society is that in functional societies this harmful
  competition for status is much lower than in dysfunctional ones. http://www.uwgb.edu/dutchs/PSEUDOSC/TOXICVAL.HTM

  Until we don't understand what makes a society fairly free from this harmful kind of competition for status, I think praxeological economics should
  stay a descriptive science which studies a subset of human action, and should NOT be made into the basis of a fully blown prescriptive
  AnCap political program that wants to tear down the state right now. First we must understand this very important human motivation, it's causes and
  it's consequences.

  Published: July 7, 2008 4:15 AM

• Inquisitor

  Miklos, you seem to be referring to sociology, which is the subdiscipline of praxeology which would focus on such things. I am hoping in coming years Austrians will expand their sociological works.

  Published: July 7, 2008 5:46 AM

• Miklos Hollender

  Yes, praxeological sociology would be great. Actually Hoppe's Democracy is a step into that direction. He quoted Banfield there, whose works are available online: http://www.kevinrkosar.com/Edward-C-Banfield/

  I would not call him a praxeologist by any means, but at least he understood time preference. On this site, two of his works, The Moral Basis of a Backward Society, and The Unheavenly City Revisited, are available in PDF download. Recommended - very interesting.

  Published: July 7, 2008 6:26 AM

• Michael A. Clem

  Deacon, it takes money, and thus, productive effort, to satisfy one's whimsy. Thus, economics isn't nearly as speculative as you imagine it to be. Of course, if you can get in on that new money being created, or otherwise force other people to provide you the money, then you may be able to engage in highly speculative fancies, at that. But that's theft, not economics.

  Published: July 7, 2008 4:57 PM

• Bruce Koerber

  The mind of Mises was so exact. He was able to penetrate deep into concepts and then describe them like no one else. There are famous people like Einstein who are regarded as geniuses. Anyone who sees the precision and scope of the work done by Mises has to conclude that he was one of those rare individuals who not only was a genius but also used that genius for the betterment of science.

  Consider how Mises explains praxeology and catallactics. Are you not made aware of a fine and intricate point that never would have occurred to you? Are you not now able to understand things so much more thoroughly just because Mises opened the door to understanding?

  And yet these - praxeology and catallactics - are only a small few of the concepts magnificently uncovered by Mises. That is why he is regarded as the greatest economist of the twentieth century.

  Published: July 7, 2008 9:51 PM