This post is mainly for Keith McInnis and network or computer experts of like mind. Keith asked for a chaotic systems example. That got me back in an econometric state of mind as I was looking for just one example to top this part off. For this, and this is quite appropriate to this forum, I can turn to the economist Alfred Marshall who was one of the founders of neoclassical economics. It was also the name of a U.S. Representative from Maine (we are talking about the economist).
Macro economies are chaotic systems no doubt. Few economists have stressed like Marshall that economics should be an empirical science. Quite ironically, the computational or scientific approaches that equate empirical regularities with theoretical statements do not explicate causes at all. None-the-less, they are called emperico-deductive or merely "empirical" approaches -- implying that have something to do with causal experience. Since interest in the pragmatics of C.S. Peirce and the good Reverend Bayes, was revived in the 1970's, causality and explanation has been nearly relegated from science altogether -- or so it only seems. Interest in evolutionary approaches and complexity have only blossomed in the last two decades.
A product of Marshalls' earlier view is his businessman in the pursuit of his ordinary affairs. He calculates, organizes and pursues strategies. He is involved in production and marketing. He hires and fires. He liquidates or expands his business. All these operations or activities are performed on the basis of rules.
These rules are calculation rules, organizational rules, strategy rules, production rules, and so forth. all part of a chaotic system of markets and economic pressures. The entrepreneur or businessman will not only be alert with regard to existing profit opportunities, but will also venture into new activities and he or she will experiment. They will look for new rules, new strategies, new forms of organization, new factorial combinations, new products, and so forth. They must — to survive.
They will display, depending on temperament and capabilities, Schumpeterian traits (in that they either innovate or imitate other successful models and repeat or copy and reproduce what they do best). The Marshallian business man is, as are all other agents, a rule using and rule making animal --NOT the symbol processing animal of AI or the rational animal of statistics and logic. If we contemplate a bit on this exemplar, we will soon see rules in the economy everywhere. The view will become a routine. In the following, since I have brought it up I will briefly sketch the category of the "rule."
A rule compresses an idea. Not all ideas are rules. A picture on the wall represents an idea but is not a rule. Statistical or programming assertions often make good pictures but they as often as not make lousy rules. They represent — but they do not compress — or they do compress — but are only used to assert. A correctly compressed file, as most people know by now is smaller without any loss of content. A representation is no such thing and can make no such claim. For even if it appears to be so it must always be but a sign standing in the place of something else, in fact and in effect, hiding what it represents.
An idea is a rule, if, and only if, it is a compression of knowledge useful for operations and only if it implies no loss of its primary efficiency. A rule is comprised of the identification and solution to be applied to one or more problems that may be encountered. To be translated into an operation, a rule must have a deductive or procedural format. It may be a recipe for success or a monotonic financial formula. A financially-oriented economic rule is thereby defined as a “deductive knowledge compression” for the identification and solution of problems in the course of financial operations.
Rules have been said and can be seen to be actualized in carriers. Individuals "embody" rules. But rules can also be written as words or as a message or text on a piece of paper, for instance. They can also be given as a blueprint for building a structure or operating a machine. Rules of this kind are then not actualized in a carrier or a medium. They die and they are "disembodied,"-- even when they are put in a song. I said this before: representations are dead words and so is 'belief' in relative representations like "good" or "bad" as rules or guides for morals or some such thing-- when they are really rather undefined variables used only as labels and strewn about with casual imperceptibly and flair like ‘perfect’ or “ideal.”
This claims that only individuals embody rules does not personalize rules. It is not a personification. We can talk about 'rules' being carried or embodied or not because this terminology is used in endogenous economic growth theory to distinguish between capital embodied technology and capital disembodied technology. Keith knows, but this is for others who may not: Endogenous refers to a subject developed or educed: a potential from within. It is opposite and opposed to exogenous that refers to external force or pressure. A rule carrying animal embodies a rule (a soul) or a purpose or intention as well as the intension or the elementary rule itself. Not only one but many. How many? How well does the individual know them? It matters greatly and costs dearly when individuals do not know how to perform work.
We may also choose to employ this distinction more generally, and distinguish between embodied rules and disembodied rules. Disembodied rules are rules that are not empirically or naturally coherent or compliant. Disembodied rules cohere to prescript, conscript, ascription, description, restriction, and: this covers most forms of asserted labels and "identities." I am only explaining the (chaotic) macroeconomic world, as well as the social or psychological worlds, and what can be observed as "work" or "labor" input.
Here is the innovation: Carriers of rules are subjects as well as objects. All that need be said of objects is that they are entities that are not subjects, such as capital goods, machines, techniques, instruments, buildings, final consumer goods and other economically relevant cultural artifacts. Objects embody object rules as we all already now know from object-oriented programming paradigm. Rule carriers (which are not objects) can perform operations. Rule carriers are called functions in programming. Rule carriers are different from regular objects-as-we-know-them in this critical respect.
Subjects, are thus seen as, or are conceived to be, individuals, or, possibly, socially organised subjects, e.g. a firm, as well as objects, such as machines, buildings or instruments that can and do perform operations. In the act of recognizing what is now called a representation or representative agent, to be a carrier, this shell, or representational part, ought fade from view. What is left in its place is something else. It is a dynamic or dynamo -- the stuff or substance that was hidden by the symbol. This is a force, law or power for carrying out an action or operation (e.g., knowing when to fold one's hand and sit out the hand (circuit in the game)). Operations like what I am talking about here --those that happen or take place inside the carriers -- are metabolic. They educe econometric motion and trajectory.
That is: They are associated with transformation, that is, transformation of production inside the firm, and that of consumption inside the household. Exogenous operations outside the carriers are typically referring to transactions in the market. Adi and I developed specialized carriers for text analysis we called topics, issues and probes for use in our software. These were all rule carriers that were used to self-organize and perform finer more detailed analysis of relevant and pertinent harmony found in relationships in and between information -- both: known about within, and encountered from without; between information becoming known prior and subsequent to any particular event. And it is complete recursive in this respect.
However, once again, traditional technology is found lacking in this respect. A pivotal question is for traditional approaches to answer in their defense: What is the basic analytical unit of the economic system?
Candidates now are the micro units of CEM, the single rule carrier, single rule, or the empty box of a carrier. We ought propose that Homo Sapien Oeconomicus plays a central role in the process of economic evolution, and suggest generic individualism would be the ideal way to go. However, most would likely think that methodological individualism is inappropriate, given existing techniques and approaches, since it reduces the all-important econometric feature of variety to the notion of “representative agent’ or acts of “”representation” itself. Psychologists may be attached to folk psychology but we shouldn’t let them ruin free markets and bring down capitalism under the egalitarian rule of greedy folks.
I find this revolting and disastrous for the future of America and the world. It alone is what has stirred me to take so much time and patience with producing this clear explanation of the needs and uses of Causal Explanatory Methodology.
As long as we recognize that a micro unit is a member of this population, to wit, the individual. An individual can, and usually will, be a member of several populations. The analytical unit of individual is a component part of a macroeconomic group like GAIN, or an even a larger politcal or cultural community, and is thus neither micro nor macro. It is apparent therefore, that the individual belongs to a meso level and is the carrier of the essential cause. This is as it was in Aristotle’s Four Causes. We cause the world to be as it is. We individuals are the causal agents.
Maintaining this ontological stand, any individual existence has a bimodal structure. It is a matter-energy actualization of an idea, or respectively rule. This means that the macro-structure has two levels: a "deep" rule level, (an intensional (causal) level) and a "surface" (or intentional, effectual) actualization level.
The economic system is, at a deep level, a structure of (intensional) rules. A single rule is a structural component of a macro-structure. At a surface level, the macro-structure is many structured processes appearing chaotic but defined by adoption, selection and retention frequencies and related actualization properties of the meso trajectories. Here, a meso unit --the individual-- represents a fully vested part of a process component in the macroeconomic structure.
It is therefore important to resolve the problem of the picture of incompetent individuals: Individuals of society that are given to usually only approximate, and; at that incorrect and error prone and often resorting to drastic "reductions" and approximations or "rules of thumb." This must be resolved to save the all-important feature of variety to the notion of agents that make extensive and appropriate use of their own psychological and ego-centric gifts of awareness, discretionary judgement, representation, compression and general common sense and perception.
My hope is that at the price of a little progress in economic planning, where opportunities for reform (are rich and rewarding) abound, here and now, this can be developed into a core model of computing and we will be able to demonstrate a gratification or success function that runs as follows: A: Novel rules are conceived or generated by individuals B. I saw a sign at the Cade Museum on barbecue day that read Logic will get you from A to B. You need imagination to go anywhere else. Now we imagine that novelty changes things but the way it does it has been as a chaotic system.
The CEM superstructure provides for microscopical adoption, selection and retention frequencies in a species or population of rules, rule makers and rule users. CEM educes and investigates the superstructure of the novel rules (A) generated by individuals (B) as "work" that serves to de-coordinate and re-coordinate an economic or physical, social, moral or philosophical macro structure (C). What was seen as a chaotic system can now be seen as a stratified order in which change can be captured, monitored, and traced such that reforms are readily selected from (attractive) variety, easily adopted as rule and acquired by taste and persuasion, and firmly retained for lasting value. That would indeed be ideal.
This is intended to illustrate that there needs be (causal) feedback loops that interconnect through all three levels A-B-C, upwards (expressed in) micro (A) to-meso (B) to-macro (C) levels and back, with circular loops effective at all levels. Those familiar with feedback loops in programming and computing can easily imagine that this is far more sophisticated than anything out there.
We have already solved, scaled and peer-tested software for compiling such carriers and investigating or searching them for solutions while applying these rules to make determinations and informed decisions of pertinence, fidelity and equilibrium. That is what Readware does. It was measured as generating 400% more uniquely relevant answers to questions, than other techniques did given the same questions and population of answers, at a cost per page of processing, thousands of dollars less than the cost of others in real terms.
Readware is an algorithm implementing a doctrinal function of discovery. This natural 'mechanism' I am discussing here is called 'evolutionary realism' in the literature. It is not new, you can look it up using Google. Therefore, it can be presented and understood by other professionals (either system-oriented, legally-minded or just economically or technically driven) in the language of axioms.
In the case of present existence , there are only three to consider:
So now all that is left to conclude with discussion is the sort of analytical framework that we might consistently build on these axioms. Specifically: I am looking to start something in any three-level analytical structure of micro, meso and macro domains. I see entrepreneurial development and best practice as two of those domains and child-educational development as another. Any domain that seeks to develop individual potential would also be of interest and would benefit directly from learning CEM.