Economic cycles finally explained

Friday, 25 April, Year 6 d.Tr. | Author: Mircea Popescu

A fellow by the name Eric Falkenstein absolutely nails it :

In an expansion investors are constantly looking for better places to invest their capital, while entrepreneurs are always overconfident, hoping to get capital to fund their restless ambition. Sometimes, the investors (dupes) think a certain set of key characteristics are sufficient statistics of a quality investment because historically they were. Mimic entrepreneurs seize upon these key characteristics that will allow them to garner funds from the duped investors. The mimic entrepreneurs then have a classic option value, which however low in expected value to the investor, has positive value to the entrepreneur. The mimicry itself may involve conscious fraud, or it may be more benign, such as naïve hope that they will learn what works once they get their funding, or sincere delusion that the characteristics are the essence of the seemingly promising activity. The mimicking entrepreneurs are a consequence of investing based on insufficient information that is thought sufficient, but they make things worse because they misallocate resources that eventually, painfully, must be reallocated.

Once the number of mimics is sufficiently high, their valueless enterprises become too conspicuous and they no longer pass off as legitimate investments. Failures caused by insufficient cash create a tipping point, notifying investors that some of their material assumptions were vastly incorrect. Areas that for decades were very productive, are found to contain exceptional levels of fraud, or operate with no conceivable expectation of a profit. Everyone outside the industry with excessive mimics marvels at how such people—investors, entrepreneurs, and their middlemen--could be so short-sighted, but the key is that the mimics and duped investors chose those business models that seemed most solid based on objective, identifiable characteristics that were, historically, correlated with success. An econometric analysis would have found these ventures a good bet, which is why investors did not thoroughly vet their business models. For example, banks stocks through 2007 were one of the best performing industries since industry data has been available in the US, and performed well in the 2001 recession). Another notable example: when I was head of economic risk capital allocations for KeyCorp in the 1990s, residential mortgages had the lowest risk allocation because of their decades of minuscule loss rates; speaking with an economic risk capital allocator recently, they currently have the highest.

[...]

Efforts to prevent the next recession face a large difficulty, in that the impetus by necessity will be in the area that invites the least concern, because that is where mimics fester. Any risk analysis that can identify risky ventures necessarily identifies safe ones, and when these safe investment characteristics become known to the mimics, they will be exploited. Top down risk management, the focus of so much policy talk in Basel, Washington, and wonky journals is futile, because risk grows dangerously only where one does not suspect it (G-7 sovereign debt, anyone?).

This suggests focusing on robustness, as opposed to prediction, because the system works against rational expectations, especially those consensus ideas that come out of large bureaucracies. After all, what better sufficient statistic for a mimic to exploit than some well-known regulatory bullet point that supposedly ensures trivial risk? Recessions are not going away; they are endogenous because zero mimicry is not an equilibrium among insects, reptiles, or humans. Expect more unexpected recessions, just not real soon, and not in subprime housing.

This beautiful and certainly correct model explains a number of disparate things, such as :

  • Why Ycombinator is such shit today, in spite of Paul Graham being so smart a decade or two ago.
  • Why "upstanding" (in their own view) members of the "community" hate me so in every "community" ever, be it BTC derpage or Romanian online publishing or whatever else have you. The discussion usually centers around "politeness", because the mimics don't really have the intellectual ability to identify, nor the ethical fiber to enunciate the real problem : I am disruptive. I am disruptive, and they require a particular sort of formal stability to spin their silks.
  • Why my punishment modeli works so well : it's exactly the bane of mimicry, the only way to survive in such an environment is to do it for real, rather than pretend like you're doing it.
  • Why, as little as we might like this idea, copyrights, trademarks and patents aren't going anywhere anytime soon. While the superficial seductiveness of "information wants to be free" and other similar bullshit is very compelling, the most important antagonist in business is mimicry, and tools are needed to fight it. These may not be very good tools, but they still can't be removed, only replaced, with better ones. So don't tell me how information "wants" things, it doesn't. Tell me instead how are you going to design a better copyright model. That's what's worth money.

I am thankful for this, I feel smarter for having read it. Thank you Mr. Falkenstein.

———
  1. As described in the earlier Romanian "Arta pedepsirii", the art of punishment : "punishment must be impredictable, disproportionate and visible". Impredictable so the guilty is caught operationally unprepared, disproportionate so the guilty is caught financially unprepared, and visible so his unpleasant experience may serve others well, through showing them that their turn will come, it will be at an inconvenient moment and it will not have been worth it. []
Category: Actiuni si Optiuni
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17 Responses

  1. A good extra point here :
    http://www.nobelprize.org/mediaplayer/index.php?id=1996

    PS: Really ?.. " Sorry, we only accept comments sent by actual human beings."

  2. Mircea Popescu`s avatar
    2
    Mircea Popescu 
    Friday, 25 April 2014

    Apparently you've transcended.

    To even it out :

    To view this page ensure that Adobe Flash Player version 10.0.0 or greater is installed.

  3. Mateusz Wywiał`s avatar
    3
    Mateusz Wywiał 
    Monday, 28 April 2014

    Thank you for pointing to Falkenblog, another blog rich in gems. Sadly, it seems no longer updated, for good.

    The model seems to be a very appealing, fairly robust generalization of vast array of supply-side (i.e. fundamental, non-monetary and not related to demand) theories, just as Falkenstein noticed and you applied it in your post. I'd really like to see it somehow tested, by deriving some simple, preferably easy to measure or check implications. My guesses would be:
    - Imitators suffer greater percentage losses than those who are imitated (assuming we are able to differentiate imitators and imitated)
    - Per analogiam, outsiders losses exceed the losses of insiders
    - Branches in which mimicry is more costly or difficult, the downturn is less severe (on a second thought, it would be difficult to observe objectively...)
    -...?
    I'm curious what tests would you think of, as well as what do you think of those above.
    Also, you might find something of interest in this paper, considering endogenous business cycle modeled by Lotka-Volterra equations.

    The mimicry theory and the one I linked to are however, as I noted before, rather supply-side stories. Without any change in nominal demand or nominal money stream, such crises would be inflationary (rising price level), in the mechanism similar to e.g. earthquake or tsunami (negative supply shock => fewer goods/dimnished production => rising prices). However, depression of 1929-1933 and 2008-9 were deflationary (or disinflationary). This makes them hard to explain economy-wide (as opposed to sector/branch only) economic downturns, thus serve better as theories of unsustainable boom rather than depression per se (it shares this property with Austrian explanation of business cycles, at least in my view). Absent any monetary factors, it is hard to explain why there is general collapse in trade, usually accompanied with inflation decline and so on.
    To be more precise, it does not explain why in times of depression, Say's law doesn't seem to hold. My conclusion is that here we have a very plausible, yet partial, explanation of business cycles.

  4. Mircea Popescu`s avatar
    4
    Mircea Popescu 
    Monday, 28 April 2014

    I’d really like to see it somehow tested

    Me too. Moreover, I suspect there's a good research paper or two in there for an entreprising young academic mind.

    (assuming we are able to differentiate imitators and imitated)

    This is by definition.

    Anyway, perhaps the best approach would be to pick a specially constructed task, have a control group complete it in isolation, then have a number of groups complete it after having seen particular instructional videos. The task should be constructed so it makes it easy to grade types of mimicry (learning in itself is fundamentally this) by how deep they go, with well separated layers with no overlap. Then measure outputs to your heart's content.

    In fact, if one's a cheapskate, I suspect many already completed experiments could be mined for interpretation this way. Take the famous Milgram experiment : there's mimicry at work there.

    My conclusion is that here we have a very plausible, yet partial, explanation of business cycles.

    Unless we observe that money is a good as any other, and consequently subject to mimicry as any other. Why did the real estate bubble happen ? Perhaps because a bunch of people noticed a bunch of other people coming home to derp about how "Honey, our house made more money than me this week!" and [tried to] mimic that ?

    The run-up to the Great Depression is definitely a fine example of mimicry at work. Even the shoe shine boys and chamber maids held stocks, the story goes.

  5. Mateusz Wywiał`s avatar
    5
    Mateusz Wywiał 
    Tuesday, 29 April 2014

    Anyway, perhaps the best approach would be to pick a specially constructed task, have a control group complete it in isolation, then have a number of groups complete it after having seen particular instructional videos. The task should be constructed so it makes it easy to grade types of mimicry (learning in itself is fundamentally this) by how deep they go, with well separated layers with no overlap. Then measure outputs to your heart’s content.

    In fact, if one’s a cheapskate, I suspect many already completed experiments could be mined for interpretation this way. Take the famous Milgram experiment : there’s mimicry at work there.

    I fear that such experiments would at best indirectly point to the role of mimicry in business cycles. The point is not to show that individuals are prone to mimicry, but that it causes the market to be unpredictably irrational as a whole.
    As an example, take investor irrationality, a well documented branch of behavioral finance. On individual level, even sophisticate investors make significant psychological errors, whereas efficient market hypothesis still holds as a good proxy (of course, only a proxy).
    That's why I pointed to historical economic/financial data, as even if we prove that mimicry 1) is a significant part of human behavior 2) significant part of market behavior in experimental situation, we have to prove that it was a significant part in the particular business cycle - for example, it wasn't overwhelmed by some other factor.

    On the other hand, that doesn't mean the experiments would be useless in this case. I wonder if constructing a simulated market with adequate punishment/reward system (such as assets yielding different returns) would be a step forward.

    Unless we observe that money is a good as any other, and consequently subject to mimicry as any other. Why did the real estate bubble happen ? Perhaps because a bunch of people noticed a bunch of other people coming home to derp about how “Honey, our house made more money than me this week!” and [tried to] mimic that ?

    First, we have to distinguish between money (as in money supply) and money returns. The burst of real estate bubble wrought havoc to individuals’ and institutions’ balance sheets – assets were worth much less, some bankruptcies were unavoidable, economy’s output (or output growth) diminished. If this were the whole story, what would happen with prices? They would rise, as I explained before.
    But they didn’t. Inflation dropped, inflation expectations (as measured by TIPS/Treasuries spread) sunk in the subzero levels – why? My bet is that there was a rise in a money demand not corresponding to a rise of the money supply (or even corresponding to the fall in broad monetary aggregates. Under monetary disequilibrium, the crisis, instead of being a neat liquidation of failed investments (as in early 1920s), developed into a recession.

    The run-up to the Great Depression is definitely a fine example of mimicry at work. Even the shoe shine boys and chamber maids held stocks, the story goes.

    Run-up? Can’t agree more. But that doesn’t explain so easily the severity downturn. Are you familiar with Milton Friedman’s monetary history of the US ?

  6. Mircea Popescu`s avatar
    6
    Mircea Popescu 
    Tuesday, 29 April 2014

    we have to prove that it was a significant part in the particular business cycle

    It would seem this is in principle an impossible task.

    Nevertheless, an experiment could be perhaps constructed, even if it would be somewhat elaborate. Consider this very crude, and not seriously intended to be applied as is model :

    A number of subjects are divided into teams of 12. Each team is divided into sets of 3. It is the task of each set to "write proposals" for the purpose of "brillig the slithy toves". They are told that as part of this process, they will receive half hour instruction seminars from three people they chose, from a list provided. Once their proposal is ready, it will be applied. It is not explained to the participants HOW their proposal will or can be applied, but they are assured credibly that in fact anything they write can and will be applied. Anything at all. To keep things simple proposals will have to be typed, using only characters available in basic ASCII. They will then be communicated the result of the application of their proposal, as a score. The whole team sees each set's score.

    They are then asked to write proposals for the purpose of "gyring the gimble wabe". The process is the same. After which, proposals for the purpose of "outgrabing the mome raths". Idem. In between all these, the best and the worst set in each team are allowed to socialise togehter, in to separate social spaces, so that no best and worst set of the same team is in the same space. All participants know that everyone else present is either the best or the worst there, but don't know which is the case.

    The "application" process can and probably should be a random number generator, something like "take the first four bytes of the sha512 hash of the proposal and a salt and express it as an integer". The trainers however, will offer varied and creative explanation, including particular "meme seeds", such as insisting on the color blue or whatever.

    A separate set of subjects are given "credits" which allow them to "buy shares" into any one team, to gain or lose according to how the teams do. The "investors" all share the same (third) social space. The eventual score of each team's proposal's "application" either increases or decreases all invested investors' credits total.

    If you get dozens of trainers and hundreds of participants, enough so to actually have economic cycles (may need more than 3 stages, perhaps), you will no doubt notice that in fact mimicry plays a role in those cycles. Unfortunately, this thing would cost millions to actually implement and even more to think through, so I'm not too hopeful. And it's not something that can be skimped on, either.

    They would rise, as I explained before.

    We do not agree on this point. They would rise in an actual free market, which is ipso definitio any market where the government holds 1% or less of total output. Any state which taxes over 1% is by that fact alone rendering the market unfree.

    My bet is that there was a rise in a money demand not corresponding to a rise of the money supply

    Sure. The government can currently set these arbitrarily, in that the currency is worthless (and decoupled from underlying economic reality).

    Run-up? Can’t agree more. But that doesn’t explain so easily the severity downturn.

    Why not ? People can mimic each other's depression, not just each other's enthusiasm. Which is the original, and still the only sane and meaningful argument for statal intervention in downturns. It boils down to the story of the stone soup, and it really isn't any more sophisticated than that.

    Are you familiar with Milton Friedman’s monetary history of the US ?

    Yes.

  7. One must look into what is influencing inflation in advanced economies: notably an oversupply of money.
    Financial crisis typically is reducing the available money supply since money is lost through asset devaluation.

  8. Mircea Popescu`s avatar
    8
    Mircea Popescu 
    Thursday, 1 May 2014

    That is a point, tho I'd restate it : after the destruction of actual money with WW2, the state imposed upon the economy, and the economy to some degree accepted, out of sheer desperation I guess, fake money in the sense of this paper crud. It has absolutely nothing to do with money, because unlike actual money it can't be used by private parties to force the government, but only the other way around. It is, in any proper sense, a simple, liniar extension of the ration card.

    So yes, in the ration card economy, which for some reason you call advanced but which in any sense is very backward, the supply of money can and often does suddenly collapse. For the exact reason the purchasing power of ration cards dependend more on what was in the warehouse than on what the card said.

  9. Mateusz Wywiał`s avatar
    9
    Mateusz Wywiał 
    Wednesday, 7 May 2014

    Sure. The government can currently set these arbitrarily, in that the currency is worthless (and decoupled from underlying economic reality).

    I have some hope that we are in fact speaking of roughly the same phenomenon. Indeed, the Fed controls totally the nominal economy, nominal GDP above all (but not the money demand, as I point at the end of my comment). You are right that the Fed can set arbitrarily the path of money growth, relative to money demand in particular. I add that they allowed this in the outbreak of the current depression and that had consequences in the performance of the real economy. So, to sum up, the claim is that the Fed, by money manipulation, is the another factor of

    Why not? People can mimic each other’s depression, not just each other’s enthusiasm. Which is the original, and still the only sane and meaningful argument for statal intervention in downturns. It boils down to the story of the stone soup, and it really isn’t any more sophisticated than that.

    Let me illustrate my point with the brief comparison of the dotcom bubble and the housing bubble. If I’m right and my exposition is clear enough, you should see why I believe that simple mimicry of pessimism cannot explain the downturn fully.
    The dotcom bubble burst at the end of March 2000, as it is visible in the NASDAQ-100 Index, yet this crash is totally invisible in nominal GDP data, graph of which please find here. The slowdown begins in late 2001, due to reasons unrelated to the dotcom bubble. There is no economy-wide crisis, no spillover to other branches. A good example of “mimicry crisis”.

    The housing bubble burst mildly in 2006, as illustrated by Case Shiller Home Price Index (graph). The housing continued to decline through 2007, housing profits disappeared. The inflation started to rise more rapidly (see graph), as predicted by theory, but it suddenly sunk in late 2008. Nominal GDP (again, 100% arbitrarily controlled by the Fed) plunged significantly, as depicted here. The depression has begun.

    So yes, in the ration card economy, which for some reason you call advanced but which in any sense is very backward, the supply of money can and often does suddenly collapse. For the exact reason the purchasing power of ration cards dependend more on what was in the warehouse than on what the card said.

    What is curious, and what attracts my attention, is the situation when purchasing power of the “ration cards” rises as the money demand spikes, accompanied or not by the fall in the supply of money. And the money demand cannot be controlled directly by the Fed, the only channel available is through management of expectations.

  10. Mircea Popescu`s avatar
    10
    Mircea Popescu 
    Wednesday, 7 May 2014

    The dotcom bubble burst at the end of March 2000, as it is visible in the NASDAQ-100 Index, yet this crash is totally invisible in nominal GDP data, graph of which please find here. The slowdown begins in late 2001, due to reasons unrelated to the dotcom bubble. There is no economy-wide crisis, no spillover to other branches. A good example of “mimicry crisis”.

    I think a major point to underscore here is that in general terms, the "tech sector" economy, understood as website makers (which is, almost entirely, what the dot com was made out of) carried no weight. It is dubious if it accounted for as much one percent of one percent of actual economic activity across all classes (ie, whether 0.01% of all leads generated were generated through it, whether 0.01% of all employement man-hours were generated by it, whether 0.01% of taxes paid and so on and so forth). Their average even is probably under 0.01%. This as far as economic activity, the actual kind.

    Now, as far as mindshare goes, it's quite certain that the "tech sector" website makers accounted for attention well in excess of 1% of total attention, and for pointlessly spilled ink in the press well in excess of 1% of total and so forth. This massive disparity however is not fairly represented by saying that yes, here we have a crisis "of mimicry" as opposed to some sort of "real" economic crisis.

    To best explain what I mean, consider a town in which adults go about their daily business, building cars, driving trucks, planting leeks and submitting to anal sex, whatever it is adults do. In that same town, in a certain neighbourhood, under a certain tree by a certain building a gaggle of children like to gather. They are also part of the town, in all respects, such as for instance being born as the result of accidentally spilled juices during a bout of spirited buttfucking, and being taken to school and back, and being fed by food moved on trucks which consists to some degree of leeks and so on. So yes, they are part of the town economy.

    In their fantastic capacity as children, which is notably not part of the town's economy, they also play a complicated game under their tree, with special kid currency (I have no idea what it is, we used promotional materials packaged in chewing gum by some Turkish firm), and generally abundant mimicry : both of one another, and, scaled to the degree their inferior mental capacity allows, of the adults.

    Obviously their faux economy will display all the avatars of a real economy, even if you could never, no matter what you do, notice the panics and bubbles of kid economy in the greater workings of the adult economy, and its aggregated synthetics. So : while it's true that the kids mimic each other, and the parents, it is not (or at least, not necessarily) correct to say that "because their fauxeconomy has no visible impact in the economic data we regard, it wasn't really a crisis". Surely it won't have been a real crisis in the terms of, no child will starve and die because he didn't acquire enough kid tokens. But these aren't economic terms, these are sociopolitical terms. In economic terms, their economy and its crisis is just as economic as the adults'.

    So the kid will get depressed, which is economically sound, and the kids' mother will tell it to chil out, because "it's no big deal", which is economically meaningless, and otherwise a political statement. Fundamentally religious, and visible in the adult economy every time religious figures come out with "trust in the lord" and "god will provide" to abate the rumblings of starvation during famine. But an ability of politics to dull the meaning of economy, were it even endless and infinite, still has no bearing on the question of economy.

    This disparity would seem to me to also account for the very divers political treatment of the two examples you give : one was allowed to resolve itself economically, because it was Too Small To Notice. The other was not, and is still festering, because the converse.

    What is curious, and what attracts my attention, is the situation when purchasing power of the “ration cards” rises as the money demand spikes, accompanied or not by the fall in the supply of money. And the money demand cannot be controlled directly by the Fed, the only channel available is through management of expectations.

    In my opinion this is not surprising, but actually predicted by theory, once you observe that any government (ie, political power) with economic-side exposure is in effect running a Ponzi scheme.

    So, consider the exact match between the phases of a typical Ponzi scheme and the disparity you observe : originally the con artist is unknown, and his capital inflow is low. Then, as he becomes better known, his capital inflow explodes just as the demand for his services also explodes. Why ? Wouldn't it be logical to expect that the more money he collects, the less people are looking to give him money ?

    Well, that's what I mean by mimicry : suppose there are 1mn ration cards printed for 1mn kilograms of sugar in war torn Poland. Suppose there's a ton of sugar in the govt warehouse. As you'd expect, the ration cards are widely held in disrepute, and discounted perhaps under the market value of a gram of sugar. Now suppose one hundred people turn in their cards for a kilogram of sugar each. The situation is that now 999`900 cards represent 900 kilograms of held sugar, adn so the cards should be even further discounted. But they won't be, now will they ? Their market value will spike, for absolutely no reason, because mimicry works as an adaptive strategy in biology.

    The caveat, of course, is that it only works in biology because biology is by and large disinterested in identity. It doesn't work to conserve identity, it just works to conserve existence, and if only one thousand fenotypes make it biology is perfectly happy to have the other 999 thousand feed some other speecies, be it bacteria or worms.

    Much like marriage out of love, trusting the government and economy by mimicry do not work for the benefit of individuals involved, but merely "society", which is to say those individuals clever enough to position themselves so as to take advantage of the idiocy of the others.

  11. > we used promotional materials packaged in chewing gum by some Turkish firm)

    'Turbo'? That's what we had!

  12. Mircea Popescu`s avatar
    12
    Mircea Popescu 
    Wednesday, 7 May 2014

    https://www.google.com/search?q=turbo+turk+lirasi&source=lnms&tbm=isch

    They also had dollars and marks.

  13. Mateusz Wywiał`s avatar
    13
    Mateusz Wywiał 
    Thursday, 8 May 2014

    Well, that’s what I mean by mimicry : suppose there are 1mn ration cards printed for 1mn kilograms of sugar in war torn Poland. Suppose there’s a ton of sugar in the govt warehouse. As you’d expect, the ration cards are widely held in disrepute, and discounted perhaps under the market value of a gram of sugar. Now suppose one hundred people turn in their cards for a kilogram of sugar each. The situation is that now 999`900 cards represent 900 kilograms of held sugar, adn so the cards should be even further discounted. But they won’t be, now will they ? Their market value will spike, for absolutely no reason, because mimicry works as an adaptive strategy in biology.

    The caveat, of course, is that it only works in biology because biology is by and large disinterested in identity. It doesn’t work to conserve identity, it just works to conserve existence, and if only one thousand fenotypes make it biology is perfectly happy to have the other 999 thousand feed some other speecies, be it bacteria or worms.

    Thank you for this reply. Such insightful pieces are alone worth the whole discussion. Now that is an explanation drawing highly on mimicry *and* explaining surges of money demand...

    You are also right that the dotcom bubble was of much less importance than the housing bubble. And you are probably right that it's the reason it was allowed to fold in a non-disrupting fashion.

    In closing remarks (and for illustrative purposes), I'd like to mention that initially the housing bubble was as well bursting in a really non-deflationary way, its economic impact notwithstanding. It was 2008's monetary conditions that was the trigger.
    You may have a look at the report of the September 2008 Fed FOMC meetings transcript (or at least fragments of it here). The FOMC were all fearful of inflation, and barely have given thought to possibility of a depression!

    Dr. A,

    Financial crisis typically is reducing the available money supply since money is lost through asset devaluation.

    It depends on the asset class. If the asset is valued most for its liquidity, as in debt, then you are right. But we usually think of equity when we think about asset devaluation in crisis. The severe fall of their valuation is much more often a sign of rising *money demand*, or flight to cash/liquid assets, then a sign of money supply shrinking.

    Of course, not everywhere in the world the crisis began with money demand surge. A good example of money supply collapse and subsequent depression is Romania: http://florincitu.wordpress.com/2014/05/04/bad-economic-policies-led-to-permanent-output-loss-in-romania/.

    I'm curious on your opinions of this case.

  14. Mircea Popescu`s avatar
    14
    Mircea Popescu 
    Thursday, 8 May 2014

    In closing remarks (and for illustrative purposes), I’d like to mention that initially the housing bubble was as well bursting in a really non-deflationary way, its economic impact notwithstanding. It was 2008’s monetary conditions that was the trigger.

    You may have a look at the report of the September 2008 Fed FOMC meetings transcript (or at least fragments of it here). The FOMC were all fearful of inflation, and barely have given thought to possibility of a depression!

    The situation there was well complicated, and I suspect the only agreement sensible people will be able to reach in retrospect will be that the situation was poorly handled, that the handling of the situation was a major contributor to the situation itself and perhaps even that out of all the available handling approaches, the worst was picked.

    What's remarkable here is that this is the exact "lesson" Bernanke purported to have learned from the 1930s crisis and its respective mishandling. Similar intellectual gains were claimed by Greenspan in his own time, and by each and every statist fuckwit for the past century or two.

    Somehow the observation that all the nonsense is quite childlike, and that nothing has in fact been learned because nothing is there to be learned because the possibility of learning is precluded in principle for all those cases where action is precluded in principle fails to form in their heads. Taleb's out there in a desert screaming the same things to the bare rocks, it's not a point any of the deluded religious minds are willing to grasp. They wish to artifex their own salvation, and they shall do so as a group because beeee-beeee. Who are you to tell them better, and who are you to know better ? Beeeeee.

  15. Why, as little as we might like this idea, copyrights, trademarks and patents aren’t going anywhere anytime soon.

    This is an interesting subject, as no one seems to even find the right language to express the problem. It seems to me that the same tools "needed to fight" mimicry are nowadays used to defend it; see the so-called "patent trolling" cases on intellectual property devoid of any real value (Oracle vs. Google comes to mind, but there are probably thousands others).

  16. Mircea Popescu`s avatar
    16
    Mircea Popescu 
    Sunday, 1 June 2014

    Sure, but that's generally the symptom of a doomed society, when the tools of its power are being used towards its weakness. At least Socrate seems to have thinked so, correctly.

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