Author Topic: Economic Growth: Physicist vs. Economist  (Read 4905 times)

arebelspy

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Economic Growth: Physicist vs. Economist
« on: July 06, 2012, 11:16:31 AM »
I thought this discussion on the physical constraints of economic growth was interesting, figured some of you might as well.

http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-physicist/

(Couldn't really find a good category for this thread to go in.  This will have to do.)
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TLV

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Re: Economic Growth: Physicist vs. Economist
« Reply #1 on: July 06, 2012, 12:53:15 PM »
The part where they started talking about the Matrix reminds me of an omake from "Harry Potter and the Methods of Rationality" here (at the very bottom).

darkelenchus

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Re: Economic Growth: Physicist vs. Economist
« Reply #2 on: July 06, 2012, 01:06:24 PM »
Yeah, the Matrix bit reminded me of Robert Nozick's Exeperience Machine.

Also: Quick, somebody go yell at him for using "quality of life" instead of "standard of living!"

darkelenchus

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Re: Economic Growth: Physicist vs. Economist
« Reply #3 on: July 06, 2012, 01:15:44 PM »
Yeah, the Matrix bit reminded me of Robert Nozick's Exeperience Machine.

It's somewhat bizarre that the economist thought of retreating to virtual reality as an improvement in standard of living, seeing as he pretty much described Nozick's Experience Machine to the tee, and the result of that thought experiment tends to result in the opposite view of those who consider it, viz. that real life is preferable to simulation. And it's a pretty slender peg on which to hang an argument for continued development to begin with.

AJ

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Re: Economic Growth: Physicist vs. Economist
« Reply #4 on: July 06, 2012, 02:10:43 PM »
...and the result of that thought experiment tends to result in the opposite view of those who consider it, viz. that real life is preferable to simulation.

Its one thing to ask the question as a thought experiment, but it is another to be presented with the choice in real life. Think of all the people that watch the documentaries about lottery winners that lose all their money and think "that wouldn't be me, I'd be smarter with it." But, of course, everyone thinks that, and it is different when the decisions have real consequences. Another example would be how people tend to trade differently when paper-trading vs. using their hard-earned dollars.

I suspect that, despite how offensive the idea is in theory, many (even most) people would choose the machine. Ask a teen whether interpersonal communication is better had in person or virtually, most might say in person, even as they text their friends 10 feet away. Our lives are already increasingly virtual even as we "speak". :)

darkelenchus

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Re: Economic Growth: Physicist vs. Economist
« Reply #5 on: July 06, 2012, 03:19:27 PM »
...and the result of that thought experiment tends to result in the opposite view of those who consider it, viz. that real life is preferable to simulation.

Its one thing to ask the question as a thought experiment, but it is another to be presented with the choice in real life. Think of all the people that watch the documentaries about lottery winners that lose all their money and think "that wouldn't be me, I'd be smarter with it."

Yes, this is very true. Whether people would in fact opt-in to entering the machine is another matter entirely. There are a few things to consider, here.

First, the simulated experience might be way better (in terms of pleasure, intellectual stimulation, etc.) than one's reality. If given the choice between actually traveling to Rome and merely having the experience of traveling to Rome, then, all things being equal, I think most people would actually choose to travel to Rome. Experiencing a Rome tour without actually touring is like receiving a trophy that one hasn't earned. It's inauthentic and thus valued far less than the authentic. On the other hand, if given the choice between the mere experience of traveling the world and the reality of living in poverty, in an impoverished environment, with very little opportunity for increasing one's standard of living, most would choose to enter the machine. Even if inauthentic, the experience of world travel will be more enriching and offer a higher standard of experience. In fact, I imagine this is why most people would end up opting in to the experience machine. It offers them an increase in pleasure compared to their ordinary hum-drum life (hedonic adaptation, anyone?) without all the hassle it'd take to get that pleasure in real life.

Second, there are some things that one may want to experience but not actually do, possibly due to fear of potential high stake loss. For instance, my fear of heights is strong enough that I could never jump out of a plane of my own volition, but I wouldn't mind opting in to the experience machine to see what it's like. I'm sure many others would do the same.

Third, if the experience machine is asynchronous, such that the simulation provides a lifetime of experience during just a brief interval in real time, I'd bet many would opt-in to "test drive" different lifestyles, career choices, etc. to see whether they lead to an outcome they'd prefer.

I suppose the economist could argue that opting in to enter a low-energy experience machine would be the rational choice for those who are in a state where energy supply is too low even to engage in the activities that culminate in the experiences that the experience machine lets them enjoy. But this still isn't economic development. It may be the rational choice within the imagined scenario, but that doesn't change the fact that it'd be a reduction in standard of living compared to the past, since most people would still prefer to do the activities related to the experience rather than merely experience them.

darkelenchus

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Re: Economic Growth: Physicist vs. Economist
« Reply #6 on: July 06, 2012, 03:27:45 PM »
The part where they started talking about the Matrix reminds me of an omake from "Harry Potter and the Methods of Rationality" here (at the very bottom).

That's pretty funny. I had no idea Morpheus was an Aristotelian.

HeidiO

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Re: Economic Growth: Physicist vs. Economist
« Reply #7 on: July 07, 2012, 02:46:09 AM »
I see drugs, alcohol and compulsive overeating as types of experience machines.  Many, many people live with their addictions seperating them from reality.
Heidi

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Re: Economic Growth: Physicist vs. Economist
« Reply #8 on: July 19, 2012, 10:06:54 AM »
I have also been enjoying the "Do the Math" blog and picked up this video on the comments section.

I think it applies directly to this thread, though it is over 1 hour long- I would be interested in hearing the MMM forums take on it.

http://www.youtube.com/watch?v=umFnrvcS6AQ

(I had also posted this to the Investors Forum inside my other thread) I am not intentionally cross posting this for a higher readership, its just that is also dovetails this thread very well.

-David

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Re: Economic Growth: Physicist vs. Economist
« Reply #9 on: July 22, 2012, 02:25:19 PM »
This article / exchange is great. It's all too true how far the economics profession has become unmoored from physical reality. There is a multidisciplinary field called Ecological Economics (http://ecoeco.org for those interested) whose purpose is to reestablish economic theory in the context of a finite physical world. It's considered "heterodox" which means mainstream economists don't take it seriously. At least the ecological economists are moving in the right direction.

Some day the economics profession will get shaken up and come back to reality. I fear that day is still years and possibly decades away.