“Yes, we can” in a deterministic universe

If you make policy suggestions to Europeans, they’ll tell you that they can’t do that.

Consider the problems that the ECB is having raising the core inflation rate closer to 2%.

Why not do unlimited QE? — “We can’t do that”
Why not raise the inflation target? — “We can’t do that”
Why not level targeting? — “We can’t do that”

They can’t do anything that would actually work.

Consider the problem of sluggish growth.

How about injecting dynamism into France and Italy through supply-side reforms? — “We can’t do that.”

Consider the Brexit fiasco.

How about a better Brexit, say the Norway option? — “We can’t do that.”
How about another Brexit referendum? — “We can’t do that.”

There a sense in which the naysayers are right. In politics, the law of large numbers is very powerful. Things happen for a reason. Options are not chosen because there currently is not enough support for those options.

So what is to be done? One solution is to look for alternative solutions that are politically feasible. But those do not exist. For the moment, there is no hope for Europe. There is virtually no chance that Europe will snap out of its malaise in the next three days.  They won’t do any of the things that might work.

As we look further out into the future, however, things gradually become more hopeful. The longer the malaise continues, the greater the appetite for changes that currently are not politically feasible.

The solution is not to look for alternatives to sound economic policies; there are no alternatives. Fiscal stimulus will not get Europe to 2% inflation. Rather, the solution is to keep beating our heads against the wall, day after day and year after year, until the time is right for effective solutions to be adopted. NGDP targeting plus free market reforms. That’s what I’ll keep promoting. The zeitgeist determines the policy mix; there’s nothing I can do about that. The universe is deterministic. But I can affect the zeitgeist, at least a tiny bit.

You can too.


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36 Responses to ““Yes, we can” in a deterministic universe”

  1. Gravatar of Philo Philo
    17. December 2018 at 11:48

    OK, but my tiny bit is a lot tinier than your tiny bit, and yours is already pretty small. (But keep on trying!)

  2. Gravatar of Rein Rein
    17. December 2018 at 11:57

    http://ngdp-advisers.com/2018/12/09/euro-area-ngdp-growth-rate-to-keep-dropping/

    NGDP dropping hard for the eurozone, but Draghi anounced to stop with QE. Our Dutch Central Bank is telling us the economy is going back to “normal”. Apparently the a slow economic growth is the new accepted normal here …

  3. Gravatar of Christian List Christian List
    17. December 2018 at 12:14

    The zeitgeist determines the policy mix; there’s nothing I can do about that. The universe is deterministic. But I can affect the zeitgeist, at least a tiny bit. You can too.

    I also believe that the universe is deterministic. But the more I think about it, the more my head is exploding.

    So I can affect the zeitgeist , but the universe is deterministic, but I can affect the zeitgeist, but the universe is deterministic, but… AAAAAAAAAAAAAHHHH… Boooom! My head exploded.

  4. Gravatar of Benoit Essiambre Benoit Essiambre
    17. December 2018 at 13:48

    “The ocean waves, the universe peoples” and usually we’re all just caught in the storm.

  5. Gravatar of Brian Donohue Brian Donohue
    17. December 2018 at 13:52

    @Christian, if it helps, according to determinism, you were always going to go through that cognitive dissonance, and Scott was always gonna write this post, and I was always gonna write this comment.

    Determinsim is easy and even respectable, but determinists also always want to talk about morality and good and evil and what we “should” do, which is the funny part.

  6. Gravatar of ssumner ssumner
    17. December 2018 at 16:24

    Brian, Not funny at all. Our talk is part the environment that causes other people to change their behavior.

  7. Gravatar of Christian List Christian List
    17. December 2018 at 16:45

    Determinsim is easy and even respectable, but determinists also always want to talk about morality and good and evil and what we “should” do, which is the funny part.

    Brian,

    thank you so much for your precise summary. I think you are correct. I do not completely agree with your second part though. It is true, at first morality and determinism seem ridiculous together. But I think they belong together. Spontaneously, I would say morality is a good “crutch” for the human mind. It might be a good illusion.

    But more importantly, you can even go further and say, moral is still part of the “equation”, you know what I mean? It’s still part of cause and effect. Well, I don’t really believe in “cause” and “effect” in the normal sense but let’s just say it’s part of the same world, the same “bubblegum”.

    Now what is this “bubblegum” exactly, that’s the great question. How does it behave? Can you just take pieces away from the bubblegum and the rest would still exist? Or is it more like a car window that completely crumbles if you take just one tiny little piece away? Or is there an interim solution, that says for example, that you can take as much pieces away as you want but with each piece it’s completely different bubble gum.

  8. Gravatar of mbka mbka
    17. December 2018 at 16:49

    Scott,

    I don’t buy the deterministic (algorithmic) universe. Anything from the random acts of radioactive decay to the mysteries of quantum mechanics to complexity and emergence to the the recursivity problem that a computable universe would have to compute itself in a noiseless fashion to the contradiction posed by Turing’s halting problem viz the Church-Turing thesis … it all points towards a non deterministic universe.

    Christian List,

    “I can affect the zeitgeist , but the universe is deterministic”

    We shape our buildings, thereafter they shape us (Winston Churchill, supposedly).

  9. Gravatar of ssumner ssumner
    17. December 2018 at 17:21

    mbka, I wonder if the “mysteries” aren’t just things we don’t understand. David Deutsch has an interesting video disproving randomness, but I can’t find it.

  10. Gravatar of mbka mbka
    17. December 2018 at 18:09

    Scott,

    two kinds of mysteries – things that exist but we can’t explain after the fact for lack of theory or data, and things we can’t predict for lack of theory. Data are only available for the past, so data never predict anything anyway, only theory can predict.

    In the category of no prediction, there are things that can’t be predicted in a practical way but are predictable theoretically (if we had the resources). And then, there are things that can’t even be predicted in a theoretical way. For all I know, the halting problem is a proof of unpredictability in computing even in theory – and that’s just a formal universe, not the real one, that’s way more complex. Radioactive decay and quantum events are usually taken as the gold standard of random and unpredictable events in the physical universe. So I would really like to see how someone gets around this – there are things that are pretty much universally accepted as unpredictable both in practice and in theory, and in my mind this also means that these events are not deterministic in any meaningful way. If we have no way of knowing “why” something happened, then we also have no way of knowing whether it happened for a reason (determinism) or not (randomness). There is also, in chaos theory, a distinction between chaos (stuff that looks random but was produced by an algorithm, example, your pseudo-random number output in Excel), and actual randomness.

    Here is a small piece I found on some of these matters, also mentioning Deutsch

    http://philosophyofbrains.com/2016/06/01/the-unexplained-intellect-the-importance-of-computability.aspx

    And here is Wikipedia on Church-Turing-Deutsch, note that other interpretations on computability are possible and it does not look like there is a last word:

    https://en.wikipedia.org/wiki/Church%E2%80%93Turing_thesis#Philosophical_implications

  11. Gravatar of Luis Pedro Coelho Luis Pedro Coelho
    17. December 2018 at 21:58

    It was Jean-Claude Juncker, the head of the European Commission who came up with the following wonderful description of the “we can’t do that” problem:

    “We all know how to solve the problem, we just don’t know how to get re-elected after we do it.”

    I believe he was talking about pension system sustainability, but it is broadly applicable (see carbon tax, Macron).

  12. Gravatar of Brian Donohue Brian Donohue
    18. December 2018 at 07:23

    “Our talk is part the environment that causes other people to change their behavior.”

    Change from what? Their behavior is determined. Like yours is. Like you, they could do no other. To understand all is to forgive all. And to recognize the gigantic pointlessness of a meatbag compelled to haul itself out of bed to exchange views with a stranger on the Internet.

    That’s determinism. Easy to understand intellectually, impossible to live by.

  13. Gravatar of msgkings msgkings
    18. December 2018 at 09:12

    @Brian and mbka:

    Well said.

  14. Gravatar of Christian List Christian List
    18. December 2018 at 10:29

    Brian,

    “Our talk is part the environment that causes other people to change their behavior.”
    — Change from what?

    I’m completely with Scott here. The future is determined, yes, but (the human perspective) of “cause and effect” is still in place. Morality is not pointless. You made the perfect example at 13:52 (“you were always going to…”) but you seem to interpret differently what your example means.

    Scott made the same example actually: “Our talk is part the environment that causes other people to change their behavior.” It doesn’t really matter if it’s all determined or not, you cannot take away the cause and then still get the same effect. So morality is not pointless in the sense that it has no effect. It has an effect.

    Of course, morality is wrong in the sense that some people are better than others. They are not, people have no choice. But morality still has an effect on the world – not to mention it’s a really good crutch.

  15. Gravatar of Brian Donohue Brian Donohue
    18. December 2018 at 11:02

    It’s ok to be a determinist, it’s ok to think Hitler is worse than a hurricane that kills millions of people, it’s just not ok to do both.

  16. Gravatar of ssumner ssumner
    18. December 2018 at 11:48

    mbka, A lot of extremely smart people insist that QM does not imply randomness. For instance, there is the many worlds interpretation, which is deterministic.

    Brian, You said:

    “That’s determinism. Easy to understand intellectually, impossible to live by.”

    If determinism is true, then we have no choice but to live by it. It’s not hard at all. And it doesn’t suggest we should not criticize others, as criticism helps to “determine” better behavior. We criticize to shame people into improving, or to inform well intentioned people of their mistakes. This is all 100% consistent with determinism.

    And Hitler was a bad guy, obviously. The fact that his badness was determined by various factors is irrelevant. That’s like saying Michael Jordan was not a good basketball player because his greatness was determined by good genes, a strong work ethic and good coaching. Duh.

  17. Gravatar of Christian List Christian List
    18. December 2018 at 11:49

    Brian,

    Godwin’s law already, really? I assume you had no other choice. =)

    Let’s get to the point: Hitler is worse in sheer numbers. He is also “worse” in the moralistic sense if you use morality as a useful crutch.

    But I also think determinism is the humble insight that a perfect simulation of 1933, where all parameters are exactly the same, would have no other outcome than the known one. You would need other presets in order to get a different outcome.

    Not to mention that you wouldn’t even write these exact words right now. You write these words because of Hitler! How shameful! I’m so morally outraged now.

  18. Gravatar of Christian List Christian List
    18. December 2018 at 11:59

    And Hitler was a bad guy, obviously. The fact that his badness was determined by various factors is irrelevant.

    Scott,

    that’s a really good point. The Michael Jordan example is even better.

    I assume that’s why I’m confused when people get milder sentences when they took drugs right before the crime or when they had a “difficult childhood”.

  19. Gravatar of Brian Donohue Brian Donohue
    18. December 2018 at 13:27

    “And Hitler was a bad guy, obviously.”

    My Dad always loved the “well known historical fact” argument.

    In a deterministic universe, in what sense is Hitler worse than a comparable natural disaster? Are hurricanes evil too?

  20. Gravatar of Brian Donohue Brian Donohue
    18. December 2018 at 13:31

    I think I understand determinism. If I adopt a deterministic mindset, this:

    “And it doesn’t suggest we should not criticize others, as criticism helps to “determine” better behavior. We criticize to shame people into improving, or to inform well intentioned people of their mistakes. This is all 100% consistent with determinism.”

    is rightly regarded as nonsense. The entire pantomime you describe was set in motion before we were born. There’s no such thing as going off-script or changing anything.

  21. Gravatar of Gene Callahan Gene Callahan
    18. December 2018 at 13:33

    ‘And it doesn’t suggest we should not criticize others, as criticism helps to “determine” better behavior. We criticize to shame people into improving, or to inform well intentioned people of their mistakes. This is all 100% consistent with determinism.’

    What’s 0% consistent with determinism is thinking you can choose whether to criticize others or not.

  22. Gravatar of Christian List Christian List
    18. December 2018 at 13:50

    Brian and Gene, I don’t get you. Scott never said that you can go off-script or that you can choose anything.

    in what sense is Hitler worse than a comparable natural disaster

    He is worse in the human mind which is more than sufficient.

    He is not worse from the perspective of the black hole in the center of our universe, which simply doesn’t care.

  23. Gravatar of Christian List Christian List
    18. December 2018 at 14:00

    Is there a real argument against determinism? And no, “I don’t like determinism because of its consequenses”, is NOT an argument.”

  24. Gravatar of msgkings msgkings
    18. December 2018 at 14:33

    @Christian:

    Which is why Brian’s comment “That’s determinism. Easy to understand intellectually, impossible to live by.” is so pithy.

    Determinism makes a lot of sense logically, as does extreme libertarianism and communism. But none of those isms make sense for actual humans in the world to live by, or with.

  25. Gravatar of mbka mbka
    18. December 2018 at 18:10

    Scott,

    I don’t have the final answer on determinism but neither have the experts. It doesn’t look like a slam dunk to me. And I don’t think morality makes sense as a concept in a deterministic universe. Any “free will” influence you may have thought you exerted, would also have been “determined”.

    Christian List,

    A perfect simulation of 1933 does not automatically lead to Hitler. There are at least two ways of showing this, all assuming that the world acts like a simulator in this case, so we are not talking about a computer simulation, but the computer simulation rules still apply:

    1. A non deterministic Universe. All it takes for the universe to be non-deterministic is some noise. Chaos theory was discovered when multiple runs of physical simulations gave different results, because the computer would round off numbers in knife-edge cases differently each time due to thermal noise, and these small differences amplified. Certainly the real world simulation would be prone to the same effects.

    2. Even if you do assume that there is no noise, and that any real life noise in physical systems is actually deterministic (unknowable in its details but still deterministic), you would still have the halting problem. And a whole-world simulation would have the halting problem just the same – you are not able to predict whether r how it would “run”, from first principles.

  26. Gravatar of Matthias Goergens Matthias Goergens
    18. December 2018 at 18:12

    Quantum Mechanics is not only deterministic, it’s also linear.

    (You get the randomness when doing the standard procedure for extracting macroscopic / classic forecasts. But those don’t really exist in a pure quantum setting.)

    However, what Scott might actually want to talk about is free will. But that’s a very different topic. ‘Libertarians’ (in a philosophical sense, not the political meaning of the term) hold that free will and determinism are compatible. Other people think it’s incompatible.

    Scott Aaronson has a good essay / paper about free will and quantum mechanics. I think it’s called The Ghost in the Quantum Machine or so.

  27. Gravatar of Matthias Goergens Matthias Goergens
    18. December 2018 at 18:15

    Mbka, you have your chaos theory fluff exactly backwards.

    The big discovery was that even some deterministic systems are already chaotic and unpredictable. Lorentz did his calculations twice with deliberately slightly different rounding, and got very different results. That was unexpected. But everything deterministic.

  28. Gravatar of Matthias Goergens Matthias Goergens
    18. December 2018 at 18:20

    The halting problem is indeed interesting, but it’s no obstacle to simulation. We can simulate a finite number of steps of a calculation just fine, even if we can’t tell up front whether that calculation halts.

    Similarly, we can simulate a short time of how atoms move around just fine in finite time (given enough but finite processing power etc, assuming something like Quantum Mechanics and the Standard Model hold), even if we can’t forecast the utlimate fate of the system under simulation in finite time.

  29. Gravatar of mbka mbka
    18. December 2018 at 19:04

    Matthias,

    on chaos theory, yes the initial discovery was from slightly different input rounding (by accident) and yes, chaotic systems are deterministic in the strict definition. I was talking about something else (maybe a bit misleadingly in my post above): similar effects were observed from thermal noise whenever the computer did the rounding and the inputs were identical (later experiments, I had the reference but can’t find it now). Any real world computer is just not always rounding up or down the same way when an exact 0.5 has to be made into a 0 or a 1. This is due to thermal noise in the macro world. So, your computer and program are deterministic, their real word implementation is not. Now, yes, you can go one step up and posit that this thermal noise is in-principle deterministic but then we get into these QM issues which, to the layman that I am here, don’t seem to have been sorted out by the experts in a universally agreed upon fashion. Because then you’d also have to assume that the (non chaotic, but random) decay of atoms is non random.

    I agree that there are a couple of problems mixed together here – determinism, free will, and predictability. They sometimes overlap, but not always. To me, the world doesn’t make a whole lot of sense unless you at least pretend that past cause leads to future effect (determinism) while free will exists (cause is “free”, not strictly determined by the past and possibly influenced by an expected future) and it is perfectly OK if not everything is predictable or known. So usually I ignore these kinds of musings because they don’t make much of a difference to my experience of the world. Still, a strict determinism irks me psychologically, I find the concept of such a world incredibly boring.

  30. Gravatar of Gene Callahan Gene Callahan
    20. December 2018 at 15:39

    @Christian List: “Scott never said that you can go off-script or that you can choose anything.”

    There’s is no point *advising* people that criticism is OK if they have no choice as to whether to criticize or not.

  31. Gravatar of Gene Callahan Gene Callahan
    20. December 2018 at 15:41

    @Christian List: “Is there a real argument against determinism?”

    Well, wouldn’t someone have to put forward a semi-coherent argument for determinism first before we needed arguments against it?

  32. Gravatar of Christian List Christian List
    21. December 2018 at 10:40

    Matthias,

    thank you so much for your many good thoughts, illuminations, and sources. They helped a lot to better organize my thoughts.

    Gene,

    There’s is no point *advising* people that criticism is OK if they have no choice as to whether to criticize or not.

    You don’t seem to get Scott’s point, that is all. I won’t explain it anymore, it seems to be determined that you don’t get it.

    Well, wouldn’t someone have to put forward a semi-coherent argument for determinism first before we needed arguments against it?

    You could have argued like that. But Brian and you did put arguments against determinism out there, to which I am of course allowed to respond.

    mbka,

    in your last paragraph you make the same mistake as Brian and Gene. “It’s boring” is not an argument. Not to mention that you don’t really find our world boring, now do you?

  33. Gravatar of mbka mbka
    21. December 2018 at 22:17

    Christian List,

    “in your last paragraph you make the same mistake as Brian and Gene. “It’s boring” is not an argument. ”

    don’t you think I know that? It was a quip to explain why, in the absence of a universally accepted final answer to the question, and seeing the general irrelevance of any such answer, should it exist, to my personal experience of the world, I prefer defending the option that seems more pleasing to me. Or, to paraphrase Einstein, “I refuse to believe that God does NOT play dice with the world”.

  34. Gravatar of Kevin Kevin
    22. December 2018 at 23:52

    Thank you for everything you’ve done, Scott. As a student of economics in college during the 2008 recession, you provided a way of understanding the economy and the Federal Reserve that none of my professors had been able to articulate. Your perspective is unique and valuable, and you should know that, and think about it every day. I love that you continue blogging and commenting on the world around you. I find your way of thinking very useful both for the solutions it provides as well as the influence it has on my own ability to reason through my experiences. I’ve spread the good word of thinking logically about monetary economics (essentially, that any particular currency is just another asset and should be modeled as such) to a lot of the people around me and most reasonable people are willing to listen, so keep at it. Thanks again.

    On an unrelated note, if you need someone to help get your website on https so modern browsers don’t yell at them for visiting it, because I think your content is really valuable to people, I’d love to help, no charge. Let me know!

  35. Gravatar of ssumner ssumner
    23. December 2018 at 10:06

    Thanks Kevin, I passed your message on to my tech support. I’ll see what they say.

    I appreciate your support.

  36. Gravatar of Christian List Christian List
    27. December 2018 at 13:24

    mbka,

    Yeah, Einstein was pretty clear and good on that. I don’t think there was an uncaused cause for Einstein. God does not play dice.

    I prefer defending the option that seems more pleasing to me. Or, to paraphrase Einstein, “I refuse to believe that God does NOT play dice with the world”.

    Even if I go down that road, I don’t see what’s so great in your utopia. It looks pretty nasty to me. And it still doesn’t have anything to do with morality and free will.

    People don’t like determinism because they think it’s bad but they don’t really think carefully enough about the alternatives. You think carefully enough about the alternatives: The alternative seems to be close to playing dice indeed.

    Determinism on the other hand goes pretty well with morality but not free will, but that’s not really a bug. I never saw a theory that goes well with (real) free will.

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