Who Were the Sea Peoples?

In the midst of my macro class today, I came up with two ideal types to help the class picture one economy in which Say's Law holds, and one in which it does not. Let's look at each. First we imagine a class dance party. We stipulate that people are only allowed to enter the dance hall in pairs, and that they agree to dance with any available partner at any point they are in the hall, and then they all leave at the same time. In that situation, no general glut is possible. Every person by entering the room is simultaneously supplying and demanding a dance partner, surely the proper way to understand Keynes's formulation of Say's Law as "supply creates its own demand." So long as there is an even number of people in the room, no one can overproduce a supply of dance partners. Say's Law holds. The dance was such a success that we plan a class picnic. Everyone is going to make a small dish, the right size for a single meal, with the idea that everyone ...

as a coordination problem .

We don't follow fashion That would be a joke You know we're going to set them, set them So everyone can take note, take note -- Adam Ant and Marco Pirroni In his book Knowledge and Coordination , Daniel Klein distinguishes between mutual coordination and concatenate coordination. Mutual coordination is coordination which people intend: you and I plan to meet for lunch, or several con artists devise a scheme to defraud an elderly widow of her fortune. Concatenate coordination is coordination that is pleasing to an observer: one of Klein's examples is a room designed with a harmonious combination of colors, shapes, and so on. It is important to note that successful mutual coordination does not imply concatenate coordination. If the con artists pull off their scheme to defraud the widow, they will have achieved mutual coordinaiton that is not concatenate coordination. (I really cannot do this schema full justice here; I am just introducing it to make sense ...

Over at Think Markets , I discuss the limits of Bayesian inference .

Dan Klein asked me, in reference to this post , whether, for Oakeshott, "dropping anchor" was merely an interruption of the real quest, that of being "perpetually en voyage." As I began to compose my response to Dan, I realized it might be of general interest... well, of general interest to the sort of nerds who hang around here, anyway! So here goes: What Oakeshott is trying to get at in the passage I quoted is not so much that either dropping anchor or sailing on is the "real deal," but that there is a tension between that we should never completely dismiss from out awareness. Let us use an example from Klein's book itself to make this clearer. George Stigler is Klein's chief exemplar of "narrow neoclassicism." Stigler had at hand at a certain "equipment of theoretic hooks and nets," such as optimization within a given means-end framework, perfect knowledge of search costs, knowledge as information, and so on, and began u...

Klein: Re-examining one's positions -- re-viewing one's point of view -- is trying business, because one must view from some ground, and once we begin to question our home ground, how do we choose another? Eventually, people must claim their ground and their sanity. They must stop inquiring into their own core beliefs, so they install smoke detectors and sprinkler systems to prevent the fire of inquiry from reaching their own precious ground. It is a necessary and fully human strategy. -- p. 307 Compare Oakeshott: Here, theorizing has revealed itself as an unconditional adventure in which every achievement of understanding is an invitation to investigate itself and where the reports a theorist makes to himself are interim triumphs of temerity over scruple. And for a theorist not to respond to this invitation cannot be on account of his never having received it. It does not reach him from afar and by special messenger; it is implicit in every engagement to understand and ...