On the World
Minutes / Improbables versus Impossibles
NEVATHIR
August 21, 2018
Many people believe it's impossible for them to believe what's impossible except for things like astrology. Economists who make the jump from the existence of general equilibrium to the elimination of extensive deviation from general equilibrium from modern capitalism are of this class and were responsible for blinding the public from the possibility of Great Recession, even though previous financial crises around the world already proved them idiots.
Aside from conspicuous logical fallacies, it's easy for economists to overlook the distinction between improbables and impossibles to simplify their models. Although it's practical to avoid models absorbing all economic complexities, oversimplification might eventually prove disastrous.
For example, models that prohibit financial crises can not address real world financial crises. Not to say those that belittle the financial sector, which were once somewhat fashionable academic macroeconomics.
Improbables with explicit probabilities are common insurance economics subjects, but general improbables, like financial crises, are hard to deal with, for it's inefficient to suppress entire economy to avoid improbable financial crises, but unwise and costly to overlook them.
Many mathematical models that exhibit chaos are ergodic with predictable probabilities from simulation. Thus, these models are not general improbables, which is often ignored even among highly technical economists. Keynesian radical uncertainty isn't simply a paraphrase of chaos theory.
Thus, it's implausible that general mathematical theorems derived from chaos theory can reliably provide clairvoyance for or even address financial crises. The foundation might belong to logic and evidence, rather than mathematics.
Beyond anticipation of the onset of improbable financial crises, for which numerous statistical sources provided reasonable signals, the duration and depth of GDP recession together with unemployment further depend on market structure and government intervention that are harder to quantify and forecast. Expert economic management and automation likely will prove essential during severe business cycles.
Other than the fact that people often opt for impossibles, lack of explicit or even discernible chain of causation for improbables may cause people to cast blame on wrong sources, like Iraq War or the Euro, each of which takes life and returns with extreme suffering.
The wisdom is to pursue remedy and justice first, not finding a scapegoat. Suffering reinforces hatred and revenge, often misplaced and equally vicious. It's hard to pursue justice with grief, but hatred and revenge are easy recipes for common ruins.