Steve's post on Chaos (from Tom)

Steve.Keen at unsw.EDU.AU Steve.Keen at unsw.EDU.AU
Mon Nov 14 15:48:40 MST 1994


Tom writes:
|Steve,
|
|I don't want to put words in your mouth.  But when you "critique"
|Marxism for not considering "third terms," are you not yourself
|"straw manning" Marxist  dialectic as Fichtean--even though you know
|it's not true?

You don't want to put words in my mouth and yet you say that I "critique
Marxism for not considering third terms"; when did I ever say that???
And what would I have meant by it, had I said it?

I presume that someone else said the above, and you incorrectly thought
that it was me.

All I said in that first post was, in effect, that I have great respect
for what Marx and Hegel did with and meant by dialectics, but not so
much for what Marx's followers did; and that perhaps at the root of the
real world phenomena that Hegel and Marx captured in dialectics is what
science has only recently come to recognise as chaos (though the first
formal proof of its existence was done by Poincare in 1899).

You continue:

|For I sense that chaos
|accepts the spllit in bourgeois economics between the micro- and the
|macro-economical, whereas Marxist dialectics certainly does not.
|I could be wrong--I'm not an economist nor very well versed.  So show
|me where.

Well, you are wrong, Tom; but believe me, so are most economists--
most of them have no knowledge of chaos theory either. I'll try to show
where your impression above is wrong.

(I hope that Lulu "drops in" here and improves my explanations a bit--
as I intimated in that first post, I "came into chaos" via the back
door, and have only done the maths to understand it after I realised
that it impacted on my work.)

Perhaps the key concept that undermines your impression--and, I might
add, undermines the bourgeois distinction between micro and macro--is
the idea of "emergent behaviour". This asserts that quite simple rules
at a micro level can result in quite complex behaviour at a macro one.
Now while this might look like the micro/macro distinction that you
criticise above (and believe me, we're on the same side on that point),
fundamentally it undermines it.

The micro/macro idea in economics has two components: (1) that the macro
can be understood as a simple "adding up" of all the micro components;
(2) that if maximising principles apply at the micro level, they will
apply at the macro level as well.

Emergent behaviour destroys both of these. It says that the net result of
interactions at the micro level (even ones based on simple rules like
maximisation behaviour) can result in fundamentally different behaviour
at the macro level.

So economists have built wonderful assumptions to let them "aggregate
up" from micro level to macro, keeping systemic behaviour the same as
micro; chaos now says that such aggregation is only permissible if all
relationships are fundamentally linear.

This linear thing simply means that relationships are the simplest type
imaginable, by the way: if I say, for example, that weight is dependent
on height, then the simplest relationship I can postulate is that
w = k*h, where k is some constant.

When relationships are more complex that this (the one for weight to
height, for example, is something between w = k*h^2 and w=k*h^3), you
can't understand something big (like an economy) by breaking it down
into its constituent parts, working out how they behave, and adding them
up again. This is the methodology behind the micro/macro technique in
economics, and complexity theory points out that this is fundamentally
in error.

There's a lot more to chaos than the above: if you would like a "lay"
introduction, you could consider either of the following (biblio
details are from my Uni library catalogue:

 AUTHOR    :Waldrop, M. Mitchell
 TITLE     :Complexity : the emerging science at the edge of order and
            chaos / M. Mitchell Waldrop.
 EDITION   :                                   FORMAT :
 PLACE     :New York              PUBLISHER :Simon & Schuster     DATE :c1992

 AUTHOR    :Lewin, Roger
 TITLE     :Complexity : life at the edge of chaos / Roger Lewin.

 EDITION   :                                   FORMAT :
 PLACE     :New YorkTorontoNew Y  PUBLISHER :Macmillan Pub. Co.Ma DATE :c1992

Cheers,
Steve Keen


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