Michael Martin does Soros

(Back from Alex’s European adventures)

Michael Martin of Broken Symmetry with two incredibly insightful posts on Soros’ theory of reflexivity, distinction between social and physical sciences, and the ability of markets to regulate us as well as themselves.

1. “Are markets flawed? Or is it competition?“.  Martin’s response to Soros’ criticism of markets’ ability to self-regulate:
“Individuals spontaneously order into firms. What benefit is there to such integration if markets put less constraints on the same individuals? The function of markets is to synchronize buyers and sellers who cannot otherwise integrate their needs within a firm. Soros has it exactly backwards. It’s not that markets are suitable only for individual choices; it’s that individual choices are suitable only for markets.

In this context, Soros would do well to consider some of the New Institutional Economics and Organizational Theory literature, which provides theory on how and when institutional culture develops. I don’t disagree with his point that institutional rules are needed. Just his point that government institutions are necessary or sufficient to meet those needs.”

 The optimist in me believes that “artifical inteligence” akin to google type algorithms could be created to simulate our political choices/decisions to help squeeze out the middleman of politician and create a market/forum of political ideas.  Change.org is a start.  Does anyone know of any other examples?

 

2. “Reflexivity Goes Deeper than Soros Himself Seems to Realize“:
“The cycle is manifest in the activities of people. The mathematical world is revealed, step by step, through consensus among living and dead mathematicians. The mental world represents the model everybody has, including mathematicians, of what exists. Both of these are embedded in a physical world along with a Noah’s ark of other animals and a Garden of Eden of other living things.

We exercise control over our existence by formulating theories about what exists. There are plenty of things that exist that no person imagined to exist until a theory was developed that permitted for experiments, which in turn were consistent with other experiments, and so on. Nobody doubts anymore that we are made of atoms, quarks, and leptons. Yet none of us has seen any of these things. And if we were to stop looking for them, there is no doubt in my mind that we would eventually forget about them — leaving their existence as ghostly as it was a hundred years ago.

There is no dichotomy between social and natural science. Rather, social science should embrace these constraints that have been on all science for as long as we’ve been doing experiments.”

Related posts:

1. Peer-Review vs. Info Prizes and Markets
2. Stray Thought About the Singularity
3. Hive Mindstein
4. Stability Through Instability
5. Highlights from the Year in Ideas