On Mon, 29 Jul 1996 Ben Goertzel <ben@godel.psy.uwa.oz.au> Wrote:
>We all know that a system of nonlinear simultaneous equations
>can have MORE THAN ONE SOLUTION. The market finds ONE OF THEM
>which is better than state price-fixing does. But I do not
>believe that the price-level attractor found by a market is
>necessarily "good" just because it is a moderately
>wide-basined attractor of some dynamical system in price space.
It might be wise to read an entire post before you comment on it. I'll give
you the Readers Digest Condensed Version, the main theme of my post was that
the free market is NOT perfect, just the best instrument we have. The correct
price for a mass market object is the maximum amount that most people are
willing to pay for it. If this price is less than the cost to manufacture and
distribute it, then there is no point in making it at all, nobody wants it
very badly. The market finds this price not by solving simultaneous equations
but by experiment, with modern commutations it might not find the perfect
price but it can come very close.
>are the solutions that happen to get converged to necessarily
>the BEST ones? To assume that they are, which seems to be
>the line of John Clark and some others on this listserver,
>is just a variation on Pangloss with his "This is the best
>of all possible worlds."
In other words a society governed by the free market is not as good as one
lead by somebody who is infinitely wise, infinitely knowledgeable, and
infinitely good. Well, I think that is perfectly true, the only trouble is,
although there are plenty of leaders who claim to posses these wonderful
attributes, those who actually do in fact have these qualities are in rather
short supply.
>I resent being presented with a forced-choice between 20'th
>century "free market" capitalist "democracy" and Soviet-style
>state socialism (state capitalism, some would say).
Capitalism yes, but few on this list have anything good to say about
democracy, I certainly don't. And nobody want's to force you to do anything,
all we ask is that you give us the same curtesy.
>I am in favor of decentralization, and am interested in the
>possibility of new social/cultural systems emerging which
>lack both the centralized control of the Soviet system and
>the centralized corporate control of the current US system.
Let's see, you don't want the state to have power, you don't want corporations
to have power, sound like you want a powerless wimpy civilization. Yes I know,
you want the individual to have power, but until you spell out what that
means it's as vacuous as "power to the people".
>I understand that the expansion of something like Microsoft
>software is a natural phenomenon -- it's what the economists
>call "increasing returns" [...] The more you sell, the more
>you gain "mind share" as well as market share, and the more
>other software vendors write software only compatible with
>your stuff. Positive feedback!!
Sounds like you've been reading Brian Arthur. His idea of "increasing returns"
is that positive feedback can be important in economics, small things can
lead to huge changes, and popularity alone can lead to even more popularity.
For example, a century ago for no very good reason, somebody made a QWERTY
typewriter and today nearly every keyboard on the planet is a QWERTY, even
though it is not the most efficient layout. I think Arthur is a very bright
fellow and his increasing returns idea has a lot of validity, but I part
company with him when he uses it to justify government regulation.
His argument boils down to 2 things, the free market is not perfect and
standards are hard to change. Both points are true but neither can justify
Big Brother using coercion to stop the Microsoft\Intuit merger, as he
maintains. I agree that the free market is not perfect, but then, perfection
never enters into the realm of real world economics, regulators are not
perfect either. And yes, it's difficult to tell when the time is right to
change a standard, and yes, politicians are not nearly smart enough to make
that decision.
>The spread of MicroSoft software is much like the spread of
>a foreign bacterium in the human body. A healthy body has
>an immune system which keeps any substance (internal or
>external) from rising to an excessive level. One can imagine
>a social system which had similar internal, self-organizing
>mechanisms acting to keep things decentralized
I don't understand what prevents this mysterious regulatory mechanism from
falling victim to the same "increasing returns" and "positive feedback" you
so fear, especially when you consider that even at the start it MUST be more
powerful than Microsoft if it is to have any hope of regulating it.
John K Clark johnkc@well.com
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