"To defend the truth, to articulate it with humility and conviction, and to bear witness to it in life are therefore exacting and indispensable forms of charity."

H. H. Benedict XVI. Caritas in Veritate Encyclical. June 29, 2009

Sunday, October 6, 2013

Generation F: how common life will be in 2050

The problem:
Sexual maturity arrives at, say, 15 years old, but productive maturity arrives only after college graduation at, say, 25 (I'm thinking of post-degree). Those 10 years are years in which people want to have sex but feel that cannot afford to form a family. The  consequence is that by the time productive maturity arrives anti-family practices and then values have been consolidated. Plus, this enforces hedonism which in advance calls for selfish fun after productive maturity by renouncing to form a family, and to see having a wife and children as a sacrifice rather than an achievement.

The consequence of the problem:This will pressure to a more and more selfish, superficial life, to more vice, crime and degradation (particularly sexual degradation), to a dystopia, to general unhappiness.

The solution:
A scheme through which companies will hire people since 15 (sexual maturity) and technical education will be an in-house or at least very specific, long-term process. Education companies will sell to the companies, not to the students. Worker-students will learn in their job time, making a fuller use of new informatics technologies, professors will go to the company, university campus as we know them today will either disappear altogether or transform themselves into research companies. Study subjects will be very different for different people. It will be the end of one-fits-all curricula. Education will be paid by companies on condition of employee loyalty. Technical study will be more of a life-time slow process. Humanities or moral or religious education will be a private weekend activity. Work time will be short, maybe six or seven hours for men and even less for women (at least during pregnancy or lactation).

The consequence of the solution:
Since productivity will continue to be higher and higher, people will be able to afford big families, a lot of children will be the most conspicuous mark of status. Since families will become the most important life project again, companies will have to adapt to this. Companies will have their own day care for children and maybe the old. Maybe both husbands working for the same company or nearby companies will be very common. Companies will have their own schools and high schools, and will try to engage those young people into the next generation of worker-students. Companies will be less and less about producing a determined good and more and more about satisfying needs with the ultimate goods whatsoever in which the have some competitive advantage.

Thursday, September 26, 2013

Agent theory versus micro theories

One of the main contributions of Austrian economics in general and of Mises in particular is the underlying general agent theory which is behind the mere specializations of consumer theory and producer theory. This one logic is far less clear in the economics of Marshall which of course is which is viewed today as standard micro theory.

Friday, September 13, 2013

Only men being priests as an exaltation of the woman

I guess that, in allowing only men to become priests, to marry the Church, a fundamental reason is this sort of femininity which pervades the Church as Christ's wife and mother of ours. Well understood, the prescription of only men becoming priests constitutes a veneration to femininity and the irreplaceable role of the woman as wife and a mother. In seeing only men being priests, we see the reflection of the Church being necessary feminine, and of women as being an utmost beautiful representation of the Church.

Tuesday, September 10, 2013

Capitalism and socialism

Capitalism can completely dispense of socialism, but socialism is going to always somehow be dependent on certain capitalist tenets and institutions.

Sunday, September 1, 2013

Simplest way to start a band exchange regime

Technically, a floating exchange rate regime is the optimum.

But guess what: only a blackboard economist without ever going beyond his armchair could see this as a feasible project, at least for starting a new exchange regime coming from, say, a fixed exchange regime.

An option is a gradually stretching-out band.

However, the width as well as the slope of both floor and roof of the band is a very difficult question to ask, and if you do it in the wrong way (read, too fast) either exporters or importers are going to buy lobby for your band experiment to finish.

The key is that everybody gets gradually accustomed to the band.

A practical way of doing this is by just picking a preferably small amount of daily stretching out. I call this amount "rodin" (Spanish for training wheel).

Then each time the market exchange rate touches either the floor or the roof, you stretch out the band (reduce the roof or increase the roof) by the rodin amount.

How is the band to evolve? You don't know beforehand. If it is going to go predominantly down or up, or how fast is going to stretch out, all is a market matter.

Thursday, August 22, 2013

Irrational market

"The market is irrational" is Economist for "I don't have a fricking idea of what is causing such and such behavior on this market".

"The market is irrational" can be translated into Noneconomist as "I am either stupid enough or lack enough training as to understand what the heck is going on with this damned market, but I'm also a little too arrogant as to acknowledge it."

Saturday, August 3, 2013

Friday, July 26, 2013

Selling a song in a filleted form

A song is usually recorded on several separated tracks. I guess that it is good business to sell every track separetely. You practically don't lose sale on the packaged song but gain a market on its fillets or tracks.

Thursday, July 25, 2013

Friday, June 28, 2013

Market environmentalism

The more nature you consume, the more nature market either produces or otherwise protects.

Wednesday, June 26, 2013

The road to legalizing drugs

Do you want to legalize drugs? Allow the government to have a monopoly on them.

Sunday, June 23, 2013

Wednesday, April 10, 2013

Not really an exception

Markets failures are to market law as hydrogen globes are to gravity law.

Tuesday, April 9, 2013

We all save lives

I meet this guy and he says: "My work is to save lives. I'm a doctor". I answer: "Great! Mine too is to save lives!". He says: "Are you a doctor too?". I answer: "No, I'm an economist". He sees me frowning. I explain:

"An economist job is, for instance, to tell people how the economy is faring. This helps people to take decisions; in particular decisions related with the best way to finance colleges where medicine is taught, to finance profitable colleges and to shut down unprofitable ones. Other people decides on hiring or firing doctors, or on how to invest funds in order to pay hospital rolls.

By the way, all other people too helps in saving lives: the security officer outside the hospital, the traffic officer in the streets which helps doctors and security officers to arrive on time to their jobs, the man who sells the yachts which are the reason why some doctors decide to work at night, etc.

The fact that we only see the clock hands but not the pinions or ratchets are not an argument at all to conclude that only the hands are instrumental to allow a clock to work."

So, yes the doctor helps to save lives. He is the last part of a process not designed (and not designable!) by anyone but which nevertheless works. But as long as the doctor has a claim to say that he saves lives, anyone else has it too.

My summary of Knight's "Risk Uncertainty and Profit"

There is not such a thing as "systematic uncertainty". That's an oxymoron.

An ex-post zero sum game

The utmost feature of a forward commitment (forward, future, swap, etc.) is that ex-post if one party wins, the other party losses, ceteris paribus.

Sunday, April 7, 2013

Market failure

If you find that markets fail, that's a proof of you lacking reading.

Saturday, April 6, 2013

Intelligence and God

More intelligence is required to believe in God than to to be an atheist.

Thursday, April 4, 2013

Time is a mere informational topic

Future is future only and as long as we are ignorant about it.

As long as we arrive at the logical mechanics of a system that system becomes for us in an eternal present.

Put another way: it is not merely that time is related to information. From the viewpoint of human thought, time is entirely an informational phenomenon. Uncertainty is not a feature of future, it is its essence. There where you don't find uncertainty, you don't have a future whatsoever.

There is not such a thing as time on the one hand and information on the other. There's only a one, un-separated, phenomenon: timeformation.

Wednesday, April 3, 2013

Two sorts of arbitrage

There are both commercial and productive arbitrage.

Commercial arbitrage is the typically-seen arbitrage consisting in buying cheap and selling dear commodities without incurring in transaction costs.

Productive arbitrage occurs always that there is a difference between the value of a finished good on the one hand, and a set consisting of an input plus a transaction expenditure on the other. In this sense, it is the most convenient to conceive of the set of inputs as a synthetic, such as the term is used in finance.

Since productive arbitrage is less obvious and require expectations on more issues, it is conceivable that there is easier to find businesses opportunities this way.

Productive arbitrage is the reason behind producing.

Always that the ratio between output and inputs through production is perceived as different from the price ratio between these two sets of commodities which can be expected to be achieved in the market, a decision to change the current level of production will occur.

Saturday, March 30, 2013

General equilibrium never seen

The economy works, every single economic action is undertaken, precisely because and as long as the law of one price is not being accomplished.

The economy lives because there is no equilibrium.

Equilibrium and the law of one price are ultimate states. The economy always tends to them but never reach them beacause those states are themselves constantly changing due to disequilibrating forces (changes in preferences, technologies, and resource availability; and in general by our changing attitude towards resources).

Nevertheless, the market is that spontaneous order through which information flows towards entrepreneurs which then interpret them and act in order to make use of disequilibrium opportunities. By doing this entrepreneurs, this is all of us in our aim to improve our condition by buying cheap and selling dear, embody the very invisible equilibrating hand of the market, this is the economic or social manifestation of God, as it were.

Sunday, March 24, 2013

Freedom

Freedom is always and necessarily, freedom to buy, which is akin to freedom to sell.

Friday, March 22, 2013

A creepy but regrettably true law on the fate of any industry in regards to its relation with government

A new industry either will be successful or not. If successful, either will be a competition for government or not. If competition for government, it will eventually be either taxed proportionately to its level of competitiveness against the government or plainly banned.

Thursday, March 21, 2013

Apodicticity of theories

A theory, if correctly constructed from a logical viewpoint, can be useful or useless, but never empirically wrong. The test on a theory is exclusively on its logical correctness on the one hand, and on a useful identification of parts of the reality with concepts of the theory.

Sunday, March 17, 2013

Transaction cost

1. By implication of the definition of input, any good requires more than one inputs to be produced.

2. Let's group inputs to produce a good g into two groups: on the one hand input i, and on the other hand all the rest of inputs, which we will call (composite) input j. Let's don't call it input i anymore. Since now on, let's call it good i.

3. Transaction cost from good i to good g, or good g's transaction cost from good i, or beginning with good i, is the value of input j.

4. The fact that the term "transaction cost" is mostly used when the value of good i is much dearer than the value of good j doesn't introduce anything analytically relevant to the analysis.

Monday, March 11, 2013

Market is the most efficient mechanism

The interaction of the information of agents with, in principle, different plans is the very definition of what a market is. It is true that a market could incorporate not all conceivable information, but markets do incorporate all possible information. If information is not already in the market, nobody (in particular, not the government authorities) can incorporate further information.

A market reaches all possible efficiency. There is no further informational, operating, or allocative efficiency beyond the market. In that sense, if you accuse the market of being inefficient, automatically you neglect the possibility of any further possibility whatsoever of improving that inefficiency.

If you do find a possibility of improving efficiency, you automatically become part of the market, not something beyond it.

There is, for instance, no way of reflecting new information faster than through the market. To put another way, the quickest way in which new information can be reflected is precisely what a market is.

Sunday, March 3, 2013

No choice

By having to pick some currency in which to charge taxes, and by having to pick to pick some language in which to record information, the government cannot not choose a currency and a language for the territory whereas it rules.

Saturday, February 16, 2013

No risk free assets

If

1) A security's risk is defined as the variability of return, and
2) US government T-bills' return is not fixed, and
3) a risk-free asset is defined as one with zero risk,

then

T-bills are not risk-free assets.

Wednesday, February 6, 2013

Governance versus profit

No failure in corporate governance disproves the apodictic axiom of aiming at profit maximizing in every and all properly defined firm or entreprenurial project. What a failure in corporate governance demonstrates is merely the coexistence within the company of several differenciated firms, at least one of which exerts what from the ownership's point of view of the other firms is seen as coercion. This coercion, just to be clear, is different from market competition.

Sunday, February 3, 2013

Planned or spontaneous?

Picture 1
Look at the first picture. Can you say, just by seeing this Rubik's cube, whether that combination is purposeful or not?


















Picture 2
Now, take a look at the second picture. Is it sorted? Is there order in it?

After seeing the second picture, take another look at the first one again and answer again the first question. Did your opinion change?















Picture 3
Now an (apparent) easy one. Take a look at the third picture. Is the cube on it solved?




















Picture 4
Now, observe the fourth picture; this is: for God sake, take an actual look at the damn color disposition of the sub-cubes!

Does this fourth picture somehow change your answer to the question with respect to the third photo? (Once again, compare the third and fourth pictures.)

How many "disordered" cubes there are out of the two?


Is one of them already solved? If so, can you say which one?

Can it be that both are already solved?

Can it be that none is already solved?



Picture 5
Finally (we're almost done), take a look at the fifth picture. Is there a chance that the cube depicted there is disordered? Is there a chance that the cube in Picture 3 is more "ordered" than the cube in Picture 5?

Friday, January 25, 2013

To believe or not to believe

It seems incredible to me that some people believe in God, but it seems even more incredible that some people don't.

Thursday, January 10, 2013

A manifesto on the epistemology of economics

1. The prime cause of economic phenomena is purposeful behavior. Economics qua economics doesn't have any more to explain once it arrives at this prime cause.

2. Every economic phenomenon is caused ultimately caused by the prime cause. Something not linkable to the prime cause is, ex definitione, not economic.

3. Through logic, it is possible to develop explanations about economic phenomena whose logic concatenation could not be obvious at first sight.

4. The interaction of the purposeful behavior of different agents or of the same agent through time or of the same agent with regard to different goals could generate the emergence of spontaneous orders which are themselves purposeless.

5. The method of economic logic is useful to explain economic orders and, through this, to arrive at pattern predictions, empirically falsifiable.

6. Economic logic is logically falsifiable in the sense that the chain of reasoning can be proven wrong by not obeying the logic method.

7. Economic logic is empirically falsifiable in principle, in the sense that its primitive assumptions can be proven not to be present in a factual situation.

8. Economic logic is often empirically not falsifiable in practice, in the sense that there is empirically impossible sometimes or always to falsify some primitive assumptions. For instance, it is impossible to empirically falsify that an assumed agent is not such. At the end, the attribution of some assumptions to facts is often a matter of faith. For instance, there is an ultimate impossibility for you to falsify whether this text is the work of an agent (i. e. the external successful fruit of a will) or just characters randomly disposed. Under a model which assigns equal chance to a list of characters to be randomly disposed in each position for a string of some positions, the chance that this exact text be the fruit of pure chance is higher than zero. So, at the end there is an inextricable, this is a necessary, portion the faith, even if small, in your hypothesis that this text is a fruit of some will, a purposeful behavior, an economic phenomenon.

9. Whichever which is not logically and therefore generally modelable is history, is particular.

10. The particular can be approached through statistics, but this, to be sure, is not economic logic.

Sunday, January 6, 2013

Profits

Profits are themselves free but impose a cost on every further related action.