Wednesday, June 22, 2011

1 + 1 does not equal 2

It came to me yesterday - in an epiphany:
1 + 1 does not equal 2 : if it does it is only half the answer, the other half lies in understanding chaos and fractals.

The definition of (or insight from) the fractal is: same but different (or regular irregularity) - at all scales.
Fractals show us how no one object is the same, they are complex, they are different.

The 'same' component of the definition is quantitative, and met or described as the 1 + 1.
The different is qualitative and describes (at least) the diversity, complexity or unpredictability of the object.

Update 2015
I have long thought about the my early entry and now know more. If 2 identical objects are added together, they equal 1. They are indistinguishable. I have also leant this is an assumption at the quantum level where particles are assumed to be identical; more support to my fractal quantum theory.

I plan to write all this up in one paper as soon as I can.


Wednesday, June 8, 2011

Decades of Common Agriculture Policy leave Europe with little future hope.

Update: 01-11-2011

I have been thinking of a metaphor to sum up this issue, and thought of this:
"Cutting off the nose to spite the face"

Original entry:
This is the perfect fractal (or scale) example of 'no such thing as a free lunch'.

Decades of agriculture protectionism - strangling the death out of developing economies - has (ironically) hindered any prospects for Europe trading itself out of this (next to) bankrupt financial crisis it is currently in.
 One of the saddest topics in the subject of economics is that of the impacts of farm and agriculture protectionism, namely the Common Agricultural Policy, or the CAP.  For decades it has favoured a very  few – some 1  to 2% on average of EU GDP  – at the expense of the EU tax payer, and has almost systematically destroyed –  through the act of dumping –  any hopes of developing counties (LDC’s) producing and importantly trading food themselves. It has gotten so bad, and out of hand, these countries are now net importers of food.

Is it now 'Africa', that could save the EU?  - trade your way out - rather than bail /print yourself out.

In principle, had EU bought African sugar (cotton, corn, chocolate bars and T-shirts best), Africa would have in turn bought EU trucks, EU make trucks, and Africa they will need trucks to move the sugar – both would have won. Through CAP, this principle has been distorted (and still is, even with the austerity in Europe right now, CAP has hardly changed!! ) to the extent where Europe produce both sugar and trucks, and have then dumped the surplus sugar on African market, destroying their production chances and their self sufficiency.  To add salt, EU then expect them to buy the trucks anyway! - with the little they have.

This absurdity has survived due to more than one reason, but it is interesting how rich nations have been able to trade with each other, the same goods – trucks for trucks in this case - as Professor Krugman described in his 2008 Nobel Prize lecture (here).  This has been successful, up until recently, but now rich countries (with the exception of a few, Norway and the like) are broke! 

The only method to kick-start these economies has been extreme monetary policy (printing), with negative interest rates (from around 2014) and fiscal policy. I call this act of printing and deficit spending to improve yourself, Economic incest.  Do it with yourself, your own family.

Europe wouldn’t have had to do this, had they'd traded - freely!  Win Win.

Too late, China is in ahead.
Today, we see China making its way into Africa, and in doing so growing Africa for the first time in 50 (odd) years.  Europe never did that, and thought the only solution for Africa was aid. Wrong!

EU, what a mess you have made for yourself. "Cutting off the nose to spite the face".
From a distance, it is almost as if Europe is racist. Economic apartheid.

Sunday, June 5, 2011

Rationality and Chaos

Updated: 29th Nov. 2012
This is an entry I have been wanting to do for some time, and is the first of three on fractal insights I have discovered on the economic assumptions (rationality, ceteris paribus, and perfect knowledge). This is a very difficult subject to describe, I hope I give it justice.

I strongly believe that the issue of understanding of rationality is closely related to - if not the same as - that of understanding 'chaos': that is to say, complex systems are unpredictable. If we are to understand rationality, then should understand chaos, and thus, fractals.

The definition of the fractal (attractor) is: same but different, at all scales. In our Economic models we use the assumption ceteris paribus: we hold all other variables constant,  and treat all persons as rational, so as to see the order (or the 'same', as in the definition), amongst complexity -  just as other science's do.  This definition maybe adapted or interpreted in this context of rationality, to read as: rational but irrational at all scales. This is to say, that even the axe murder will weigh up cost over benefit - before throwing the axe; their choice is rational to them, at that time of throwing, but relative to someone else watching (the fractal demonstrates relativity), it would appear extremely irrational. It is just to say they are reasoning 'differently', but they are using the 'same' method.
Again,  all Science uses the notion of  ceteris paribus -  with its laboratories, and control experiments, it 'freezes' out the chaos. Science can know (can derive a law, but, with that knowledge it cannot predict.  We can know the likes of Newton's laws of gravity, and use them to describe a pen falling from a table; but could we every repeat the event so as the pen falls in exactly the same place, over and over?  Theoretically, yes. Practically, no. I know I am contravening some 'deternimistic' understanding here, but I say no.  Even if we had all the information, I still say no: the reason being, it is infinity costly to get full information - this is demonstrated in the fractal, and is the key principle of chaos theory.
Not being able to predict, does not stop the work of science. And in the same way, not being rational does not stop the work of economics. We are searching for patterns.
Ignore the chaos, find the order.

So I would conclude that if we are to understand, we must treat all as rational, so that we can find the rational behaviour. But understand, when all is put together in the reality, we will observe 'irrationality' - or chaos.