VII Notes
2010
Notes
[Sunday 7 March 2010 - Saturday 13 March 2010]
[Notebook: DB 68: Salalah]
Sunday 7 March 2010
[page 261]
Stiglitz: Free Fall Stiglitz
Stiglitz page xiv: 124 financial crises in developing countries between 1970 and 2007. '[Thailand] was a classic example of contagion - a failure in one part of the global economic system spread to other countries in East Asia and hen to Latin America and Russia.'
page xvii: '[This book's] view is that essentially all the critical policies, such as those related to deregulation, were the consequences of political and economic "forces" -- interests, ideas and ideologies -- that go beyond any particular individual.'
'What policies and what events triggered the great downturn of 2008? If we can't agree on the answers to these questions, we can't agree on what to do, either to get us out of the crisis or to prevent the next one . . . I put the onus of responsibility on financial markets and institutions.'
Mathematical theology. The mention of mathematics may sound scary to people, but it is necessary because mathematics is a universal language that can (sometimes with difficulty) be embedded in any natural language, the symbols being the same in any language. Let us say that mathematics is symbolic dialogue between mathematicians. Mathematicians cal talk about ideas like the rest of us, but when working as mathematicians, the
[page 262]
expression of these ideas is closely related to the notion of proof. Mathematics is mechanical in the sense that all its bits and pieces are held together by proofs. The archetype of all proofs is the Turing machine (ie computer), a logical; machine which defines the boundary in mathematics between computable functions (ie feasible proofs) and incomputable functions (things that cannot be proves) that is situations where the outcome is uncertain.
We are carried through time on a wave of proof. We cannot resolve all the steps in this wave, but, using quantum mechanics, we can derive probability density functions for the outcomes of various situations, and out natural social abilities operating in our per group provide us with probability density functions for the actions of our fellows: what will she do if he leaves her, she gets pregnant, etc etc? the stuff of all human gossip.
Gossip is an incomputable force. Logic, on the other hand is computable in the sense that we can make physical incarnations of the abstract Turing machine, as most desktops now show. The Turing machine is outstandingly tedious because its memory is a tape, and access is sequential, so that the machine has to travel long distances one step at a time until it fond the data it is looking for. The breakthrough that made computers practical was random access memory.
The fundmaental physical world proceeds one step at a time through the three dimensional 'tape', each step takinfg a finite interval of time. The maximum velocity of a process through space is c, the velocity of light.
[page 263]
We begin with language (Nowak) and the transfinite power of generating infinite variety by finite means. Nowak The definition of mathematics might be symbolic dialogue between the definite and the infinite.
Keynes: The controller must spend and save inversely to the traders in order to maintain an equilibrium. Keynes To do this it must know what the trading cashflows are, preferably in real time, responding in an integrated manner to keep critical variables near their optimum values. Let us guess that quantum mechanics yields the optimum values of various controlled parameters in the Universe. How does this happen?
Although it is a powerful proof machine, the fundamental strength of the Turing machine is its linearity when we map it to the observed Universe. What does this mean? A Wild guess? Or does it reflect the fact that at the root of a computer is simply an interacting network of binary operations?
Keynes General Theory [= dynamic theory]: page vii: 'This book . . . has evolved into what is primarily a study of of the forces which determine changes in the scale of output and employment as a whole.'
One has to go commercial before one can go scientific spreading the idea in an inchoate form to raise the funds to study it more closely.
Keynes page vii: 'A monetary economy, we shall find, is essentially one in which changing views about the future are capable of influencing the quantity of employment and not merely its direction. But our method of analysing the economic
[pae 264]
of the present under the influence of changing ideas about the future is one which depends on the interaction of supply and demand, and is in this way linked up wit our fundamental theory of value. We are thus led to a more general theory, which includes the classical theory, with which we are familiar, as a special case. [We would like to say that natural religion includes all other religions as special cases]
page viii: 'The difficulty lies, not on the new ideas, but in escaping from the old ones. which ramify, for those brought up as most of us have been, into every corner of our minds.'
Monday 8 March 2010
Keynes page 5: Second postulate of classical economics: 'The utility of a wage when a given volume of labour is employed is equal to the marginal disutility of that amount of employment.'
'That is to say, the real wage of an employed person is that which is just sufficient (in the estimation of the employed persons themselves) to induce the volume of labour actually employed to be forthcoming.
page 16: '. . . the classical theory is best regarded as a theory of distribution under full employment.'
'We need to throw over the second postulate of the classical doctrine and to work out the behaviour of a system in which involuntary unemployment . . . is possible.'
[page 265]
Gn3g: This is a popularization of the theological ideas developed through personal experience [Naturaltheology.net], formalized in A New Theology (Exposition) -- Hypothesis [anewtheology.net], differentiated from the past in the commentary on the Summa [atheology.net], developed onto religious practice in The Natural Religion Project [tnrp.net], the whole overseen by the Theology Company [physicaltheology.com].
A Theology: Contrast the theological foundation of Natural Religion with that of Christianity through a Commentary on the Summa. Aquinas
Keynes page 32: '. . . Ricardo conquered England as completely as the Holy Inquisition conquered Spain. Not only was his theory accepted by the city, by statement and by the academic world. But controversy ceased; the other point of view completely disappeared. It ceased to be discussed. The great puzzle of the Effective Demand with which Malthus had wrestled vanished from the economic literature.' Malthus
Like Christianity and 'paganism' (pantheism). Paganism - Wikipedia
We are unashamedly pantheist. The world is god; it is full of gods. And the whole story revolved around the fact that formally distinct elements can form a seamless dynamic whole.
Keynes big move was to introduce dynamics into economics by exposing the importance of the flow of Money.
page 32: 'The completeness of the Ricardian victory is something of a curiosity and a mystery. . . . That it could explain much social injustice and apparent cruelty as an inevitable incident in the scheme of progress,
[page 266]
and the attempt to change such things as likely on the whole to do more harm that good commended it to authority. That it provided a measure of justification to the free activities of the individual capitalist attracted to it the support of the dominant social force behind authority.'
Transactions take place when traders agree on a price (an encoding) which allows the trade to go through at equilibrium. So it can be computerized, like the Australian Stock Exchange, trades only happening when bid and offer are the same.
What flows in quantum mechanics is probability. The sum of the probabilities of the outcomes of a given situation (preparation) is normalized to 1, so one event can become more probable only by receiving a flow of probability from some other event which has become less probable to maintain the normalization. How does this apply to the flow of money?
Normalization is local in time, but we may imagine a cyclic event having a probability greater than one if it happens many times in a given interval. The probability, measured as frequency, has the unit Hertz, which couples directly to energy via Planck's constant.
Money flowing toward me increases my fitness, that is probability of survival and reproduction.
Tuesday 9 March 2010
Wednesday 10 March 2010
[page 267]
Planck's discovery that the Universe is quantized delivered a major shock to classical physics which led to the development of quantum physics which we now consider to be the true description of the Universe. Although all our observations indicate that the Universe is thoroughly pixellated at the scale of Planck's quantum of action, we are still wedded to the use of continuous mathematics in our descriptions of the Universe. In the case of quantum mechanics, such mathematics is no longer believed to describe the Universe directly, but rather the evolution of probability density functions which describe the limiting properties of large numbers of observations of particular local initial states of the Universe, such states, in collision theory being taken to relate to the infinite past of a collision when the particles colliding can be considered to be independent and non-interacting. The justification for the use of continuous mathematics in quantum theory is ultimately founded on Kolmogorov's axiomatization of probability theory following the discovery of the Lebesgue integral. Kolmogorov Lebesgue integration - Wikipedia
The trouble starts when we try to interface the continuous classical theories of special and general relativity to quantum theory, because in relativity continuous functions are believed to describe spacetime itself and not the probabilities of events in spacetime. [although the energy of a given region of spacetime is the frequency of events there] This leads to trouble when we try to integrate functions whose denominator is a [continuous] function fo spacetime. Such functions tend to infinity as the denominator approaches zero, a problem which has spawned the whole art of renormalization which is based on the notion that the assumption of continuity is trustworthy and cannot be abandoned, so that we have to find some other way of cancelling out the infinities.
[page 268]
Yet, as Misner, Thorne & Wheeler point out, in general relativity it is events that are primary and Einstein's use of continuous mathematics, differential equations and so on is merely a process of averaging the energy and momentum of sufficiently large numbers of discrete events to justify the use of continuous approximations, as we do in the theory of probability. Given the fact that all observable events are discrete, one might wonder while we still stick by mathematical continua despite the evidence that they are a human mathematical creation whose only role is to approximate situations where the law of large numbers can be applied.
So we propose the discrete alternative. Much of the mathematics remains the same.; what changes is our interpretation of the mathematics. What we are describing is not the actual process in the universal network, but the frequencies of various events in the network. This information is sufficient for communication theorists to whom every communication is identical, but not for scientists and philosophers (not to mention the rest of us) who are interested in the actual contents of the communications we emit and receive.
So we arrive at logical continuity as an alternative to geometric continuity, which explains, as quantum mechanics does not, why (in the light of communication theory)we observe a quantized Universe.
The distinction between geometric and logical continuity is a remnant of the ancient distinction between the material and spiritual worlds that lies at the foundation of almost all mainstream philosophy and religion since many thousands of years ago.
[page 269]
gn3g: This site is meant to be clear and easy to understand, but it also has deep roots which you may explore in other sites on the natural religion project network.
We might imagine that the Roman Catholic Church is a scourge equal to all the major infectious diseases combines by its insistence on a direct coupling between sexual behaviour and reproduction, given the view that one may only fuck if the way is completely clear to pregnancy [within wedlock]. Teresa Cerojano kwanzaakeepers.com
The roots of economics lie in evolution and until they realize this, the economic fraternity will remain the ship of fools that they so frequently prove themselves to be. But can an economist believe in evolution and make a living in the current religious / political / business environment? My approach must be to write articles which eventuially become pages in the overall Toward Natural Religion Project tree, which looks like this:
| Natural Theology - A personal journey | ||
| Toward Natural Religion Project | A New theology | The Theology Company |
| GN3G -- popularization | A Theology: a commentary on the old system |
We must thing of all this industrially as well as academically. A New Theology and A Theology (the formal history of ANT) are academic. Natural Theology, the personal experience, motivates action,ie gaining the economic input to achieve the formal output (just like revolutionaries raping their environment to gain control, for
[page 270]
better or worse.: Ataturk Mustapha Kemal Atatürk - Wikipedia
What am I doing: scheming for an outcome and (I hope) an income.
Gaining experience: instead of fasting and flagellation as a means to sanctity, I flog myself with the credit card debt that has keep this project inching along, which gives me a strong incentive to get an income-producing enterprise going. At present my internet presence costs me about $70 per month (sites + ISPs) and brings in about a dollar [advertising and book sales]. It would be good to invert that ratio. By using some of the borrowed money to trade on the stock exchange, I am also gaining (sometimes bitter) experience in the working of the capital markets behind the real markets where money is exchanged for things other than money itself. The flows of money must be accompanied by legal and financial documentation (even if carried ion the mind) which verify the actual exchange behind the cash flow.
MONEY ⊃ CASH ('bare' money), self documenting, eg coins, banknotes) Cash is linear: a hundred hundred dollar notes is $10 000 in anybody's language.
Keynes page 196: '. . . it is by playing on the speculative motive that monetary management (or, in the absence of management, chance changes in the quantity of money) is brought to bear on the economic system. . . . experience indicates that the aggregate demand for money to satisfy the speculative-motive usually shows a continuous response to gradual changes in the rate of interest, ie there is a continuous curve relating
[page 271]
changes in the demand for money to satisfy the speculative motive and changes in the rate of interest as given by changes in the prices of bonds and debts of various maturities.'
Can we see quantum mechanics in terms of the relationship between a bank and its customers,money in money our and relationships between these flows established by probabilistic theories which exclude the probability of bank failure.
A business is failed (insolvent) if it cannot pay its debts, ie net worth < 0.
Keynes and the Quants: looking for mathematical isomorphisms between the money system and the real world.Money is a carrier of probability (or control) insofar as the more money I have the greater the probability of achieving a stated aim.
As I read books I come up against things that just don't make sense, so that I linger over them for a long time trying to find a picture in which they do make sense. Takes Keynes wheat, page 223. Spot price $100 per 100 quarters, lone year future price $107. So I buy 100 now, sell them then make 7% in money terms. The cash interest rate is 5%, so I buy $100 now, sell it then, make 5% in money terms. Therefore wheat performs 2% better. But no, K says that wheat interest rate is -2% per annum. I am looking at things from the point of view of deciding what to buy now for a better retuirn. K looks at it then, when my hundred is worth $105 but wheat is $107, so I can only buy 98 of wheat, a loss of 2% for deciding to hold the money now and buy the
[page 272]
wheat then.
With such problems the question always arises: is it the author or is it me?
Keynes page 227: '. . . it is an essential difference between money and all (or most) other assets that in the case of money its liquidity premium much exceeds its carrying cost whereas in the case of other assets their carrying cont much exceeds their liquidity premium.'
Governments have two main lines of control on the overall energy of the economy: interest rates and government expenditure, ie (ultimately)_ transfers from the taxpayers.
BANK vs NATION - are they isomorphic? One operating at the money layers, - Physical; other operating at higher layers - whole world.
Ultimately all things are constrained by their relative physical layers, not in terms of computing ability (all we need to make a universal computer is a 2 symbol alphabet and loads of memory). What is of the essence is algorithmic efficiency, the closeness of the algorithm to the optimum eg the Shannon bounds on communication or the thermodynamic limits on heat engines.
I would like to explain it to someone, but
[page 273]
first I must get it into an explicable state, a piece of software like a mathematics book that starts with a few simple rules an builds a marvellous set of structures within the rules, like coaches seeking winning tactics and strategies.
The key to all our economic problems is to define money as a public (visible) fixed point in the economic system, ie we enforce the rules of arithmetic on units of money, so that they are linearly additive isomorphic to one dimensional geometry.
The fundamental error of continuous mathematics is to try to construct lines of finite elngth out of points of zero length.
On mapping geometry to reality. Quantized Universe.
EVERY MEASURE is a COUNT. The items counted my be of unbounded complexity, It is required only that they be distinct, having no overlap but nevertheless touching like the orthogonal axes of real 3D space.
Money is public. We all like to hide our cashflows, like our sex lives, because we fear attack when we are vulnerable. But at the supra-human scale (peer level) ie corporate and governmental, all flows (say more than a million per day) should be public - source, sink and quantity.
Keynes would create money by government debt.
page 274>
Is this what the Universe does, going into debt to create more structure as it expands. Kinetic vs static energy - stores of action - movements of action.
ACTION == CASH ? Can realize any form.
Stiglitz page 293: 'The importance of money essentially flows from it being a link between present and future.
Thursday 11 March 2010
We may liken Papal doctrine on condoms to Stalinist doctrine of collectivization, that it must be maintained no matter how many people die.
Point set continuity makes sense with a certain suspension of disbelief, that we can always find more points between any two points in a continuum. Cantor's work gave a new meaning to a continuum--it is now all the points that can be names by putting them into correspondence with different permutations of the set of 'discontinuous' numbers.
Here we are concerned not so much with the technicalities of physics as the meaning of physics and the role it plays in the predominantly spiritual world.
Cantor's function space. The physics game is to find mathematical functions that fit nature. Every function realizes a transformation, some input (from the domain of the function) is transformed to some output (in the range of the function). From Cantor we narrow down to continuous
[page 275]
continuous space Continuous functions form a set of measure zero in the space of all possible functions (transformations of each of ℵ0 discrete points into some other discrete point.
Why do we observe a quantized Universe? Cantor discretized the continuum. Shannon discretized communication.
ENTROPY is a measure of the fineness of grain. The pixels of the Universe are measured by Planck and Boltzmann. Planck's constant - Wikipedia Boltzmann constant - Wikipedia Thermodynamic pixels; quantum mechanical pixels, expressed in 4-space (energy-momentum reprsentation) and Hilbert space (normalization).
The business of physics is to find functional relationships that appear to fit the world and so may be used to predict its behaviour allowing us to design things cheaply in the abstract before we go to the expense of manufacture. Of course until we start to manufacture we cannot know if our designs work, and we usually find a lot of details have to be dealt with which the designers have overlooked (unless we are dealing with [mature designers in] a mature technology).
The creative process is time and scale invariant, ie it works at all times and all scales.
How do we bring the quantized Universe into the creative Universe?
Cantor anticipated Shannon by his notion of sets of points, discrete entities with no interior and an address, ie locations in which objects may be stored.
POINT = EMPTY SET (initial singularity seen
[page 277]
from inside). Abstract: stable Universe ⊃ stable error free communication ⊃Shannon's theorems ⊃ quantization.
Sources of English Constitutional History Stephenson We see a judgement as the halting of a process analogous to the halting of a Tuyring machine which is in fact a network of machines proceeding to a corporate conclusion.
Extrapolating from the divine right of kings, we might see the rise of democracy as a indication that the world itself is divine.
Friday 12 March 2010
Keynes page 372: 'The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes.'
STRESS / FORCE / THE GRADIENT OF A POTENTIAL
What is quantum mechanics describing? iI tells is as much about the physical world as a network of cashflows tells us about the real world.
STRESS ENERGY
KINETIC ENERGY
Motion relieves stress. On the other hand, we need barriers to motion of there is to be stress,
[page 278]
permeable barriers of energy and entropy which we want to map to the layered network, ie transfinite network.
Entropic force : energetic force. Once we have alogical explanation of these forces we have a general theory of creation that operates at all scales. Keynes The General Theory of Employment, Interest and Money
Scale invariance--understand yourself, understand the world.
Once we transform things into the logical domain we et them free of the bounds of continuity (and computability?).
One reads constitutional history like quantum mechanics, flows of action bounded by laws.
. . .
We distinguish the class government from an instance of that class, the government.
Stephenson and Marcham page 713: 'ad quaestionem juris not respondent juratores; at quaestionem facti, non respondent judices.'
page 714: 'To be free is to live under a government by law.'
page 279
Formalism is not static: it is the bearer of stress, as in the structure of a building. The forms of the Universe are tense!
Saturday 13 March 2010
Insofar as the sovereign can do no wrong it needs no error control and so can proceed at greater than the velocity of light.
