From mboxrd@z Thu Jan 1 00:00:00 1970 Return-Path: X-Spam-Checker-Version: SpamAssassin 3.1.3 (2006-06-01) on yquem.inria.fr X-Spam-Level: * X-Spam-Status: No, score=1.9 required=5.0 tests=DNS_FROM_RFC_ABUSE, DNS_FROM_RFC_POST,HTML_MESSAGE autolearn=disabled version=3.1.3 X-Original-To: caml-list@yquem.inria.fr Delivered-To: caml-list@yquem.inria.fr Received: from mail3-relais-sop.national.inria.fr (mail3-relais-sop.national.inria.fr [192.134.164.104]) by yquem.inria.fr (Postfix) with ESMTP id 8D1C1BBC4 for ; Tue, 17 Mar 2009 18:05:59 +0100 (CET) X-IronPort-Anti-Spam-Filtered: true X-IronPort-Anti-Spam-Result: AsABAOB0v0liiCwklGdsb2JhbACCIDGTCAEBAQEJCwgJEQOuEJBzBQIBg3kG X-IronPort-AV: E=Sophos;i="4.38,379,1233529200"; d="scan'208,217";a="24462250" Received: from n71.bullet.mail.sp1.yahoo.com ([98.136.44.36]) by mail3-smtp-sop.national.inria.fr with SMTP; 17 Mar 2009 18:05:58 +0100 Received: from [216.252.122.216] by n71.bullet.mail.sp1.yahoo.com with NNFMP; 17 Mar 2009 17:05:56 -0000 Received: from [68.142.237.90] by t1.bullet.sp1.yahoo.com with NNFMP; 17 Mar 2009 17:05:56 -0000 Received: from [69.147.75.180] by t6.bullet.re3.yahoo.com with NNFMP; 17 Mar 2009 17:05:56 -0000 Received: from [127.0.0.1] by omp101.mail.re1.yahoo.com with NNFMP; 17 Mar 2009 17:05:56 -0000 X-Yahoo-Newman-Id: 583027.92756.bm@omp101.mail.re1.yahoo.com Received: (qmail 3779 invoked from network); 17 Mar 2009 17:05:56 -0000 DomainKey-Signature: a=rsa-sha1; q=dns; c=nofws; s=s1024; d=yahoo.com; h=Received:X-YMail-OSG:X-Yahoo-Newman-Property:Message-ID:Date:From:User-Agent:MIME-Version:To:CC:Subject:References:In-Reply-To:Content-Type; b=OdIrjD/SjeFV8VNjUxQeTczwg30AoMqJ4vP+Mqb4MeUJ+HBnC+S3tmzC1P+wiSEJMv0VnA8xu+BnYNxt5k8UfBATVc+aUBI6n5kyYu+A68T4OYWq8ZUUtjsszdT93I26DBERDdrr/qHnnJtzVTrmb9sHWlIjI451idntvLtTx8A= ; Received: from unknown (HELO ?0.0.0.0?) (LawrenceAusten@74.208.144.25 with plain) by smtp116.plus.mail.re1.yahoo.com with SMTP; 17 Mar 2009 17:05:56 -0000 X-YMail-OSG: v_AVGrIVM1njCxvaUxNBif_mQktHhvOLPDQ37k6bemRjluvkh6dYpVDNg0h4_xbVRu4KA71v.WOI5RLvT7BPvZoYUM8btOY_aBPYN2naxrxJwtoDhdG2.JqZ8qm5Lo7m0br4fNo28XLFFV.YN_EfwgdyZ_PVMtPr2HRTpUm8KaJ9Y9gSqD6oc_wKDyWLMDGVFWMcj5UotA8ANmbh15CrO5I- X-Yahoo-Newman-Property: ymail-3 Message-ID: <49BFD872.50405@yahoo.com> Date: Tue, 17 Mar 2009 10:05:54 -0700 From: Lawrence Austen User-Agent: Thunderbird 2.0.0.19 (X11/20090213) MIME-Version: 1.0 To: Markus Mottl Cc: yminsky@gmail.com, caml-list@yquem.inria.fr Subject: Re: [Caml-list] caml trading References: <891bd3390903131252t7feb059aq94f56b0a4d2efbf3@mail.gmail.com> <87hc1wyl9q.fsf@aryx.cs.uiuc.edu> <891bd3390903141025w3d0580dbgf97ab4f40386903d@mail.gmail.com> <87d4chy29p.fsf@aryx.cs.uiuc.edu> <53c655920903161937w4d6d5a28t94e95a3910048342@mail.gmail.com> <038F9B0A-EE44-47DA-AB4C-055EABB287CB@gmail.com> <891bd3390903162022t19507992te76de13111751535@mail.gmail.com> In-Reply-To: Content-Type: multipart/alternative; boundary="------------000208090400020101040703" X-Spam: no; 0.00; markus:01 real-world:01 wikipedia:01 wiki:01 cheers:01 lacaml:01 markus:01 mottl:01 yaron:01 minsky:01 yminsky:01 real-world:01 wikipedia:01 wiki:01 cheers:01 This is a multi-part message in MIME format. --------------000208090400020101040703 Content-Type: text/plain; charset=ISO-8859-1; format=flowed Content-Transfer-Encoding: 7bit Hi Markus, I agree that, empirically, market-based mechanisms tend to be the socially optimal solution to most real-world resource allocation problems. However, this isn't really what is demonstrated in most introductory microeconomics textbooks, which focus on the analysis of systems in equilibrium. As is well known -- http://en.wikipedia.org/wiki/Theory_of_the_Second_Best -- once you're outside of equilibrium there is no particular reason why market-based mechanisms should result in social welfare improvements. Producing a product that creates pollution (which is a form of market failure) is the classic example, making the manufacturing process more competitive might result in a net social loss if increased production results in increased pollution, but the problem is far broader than that. I think what Jane St is doing is great and I've made my career in finance, but arguing that you're doing it to save the world doesn't seem like good chess. At least I hope you don't actually believe that or you'll have to change the name to St Jane St :-) Cheers, Lawrence PS Thanks for LACAML, very social welfare improving! Markus Mottl wrote: > 2009/3/16 Yaron Minsky : > >> I would humbly propose that this thread has now gotten deeply off-topic, and >> perhaps discussion on the list should turn back to programming languages, >> rather than to deep philosophical questions about the nature of the >> financial markets. >> > > I'd also rather keep this thread off the list now and will only reply > off the list in the future if it seems reasonable. This thread has > become way too political for my taste. > > As someone else here has already suggested, I encourage everyone that > wishes to learn more about different models of economy to pick up any > reputable, introductory textbook on microeconomics. It will teach you > that markets, by and large, work well, that they can sometimes fail, > can also fail systematically in certain areas, and that it is > extremely hard to find good solutions for the latter that do not cause > more problems than they solve. Ideological quick fixes do not exist, > just as the optimal type sytem doesn't so no more flames please... > > Regards, > Markus > > --------------000208090400020101040703 Content-Type: text/html; charset=ISO-8859-1 Content-Transfer-Encoding: 7bit Hi Markus,

I agree that, empirically, market-based mechanisms tend to be the socially optimal solution to most real-world resource allocation problems.  However, this isn't really what is demonstrated in most introductory microeconomics textbooks, which focus on the analysis of systems in equilibrium. 

As is well known -- http://en.wikipedia.org/wiki/Theory_of_the_Second_Best -- once you're outside of equilibrium there is no particular reason why market-based mechanisms should result in social welfare improvements.  Producing a product that creates pollution (which is a form of market failure) is the classic example, making the manufacturing process more competitive might result in a net social loss if increased production results in increased pollution, but the problem is far broader than that.

I think what Jane St is doing is great and I've made my career in finance, but arguing that you're doing it to save the world doesn't seem like good chess.  At least I hope you don't actually believe that or you'll have to change the name to St Jane St :-)

Cheers,
Lawrence

PS Thanks for LACAML, very social welfare improving!


Markus Mottl wrote: 
2009/3/16 Yaron Minsky <yminsky@gmail.com>:
  
I would humbly propose that this thread has now gotten deeply off-topic, and
perhaps discussion on the list should turn back to programming languages,
rather than to deep philosophical questions about the nature of the
financial markets.
    

I'd also rather keep this thread off the list now and will only reply
off the list in the future if it seems reasonable.  This thread has
become way too political for my taste.

As someone else here has already suggested, I encourage everyone that
wishes to learn more about different models of economy to pick up any
reputable, introductory textbook on microeconomics.  It will teach you
that markets, by and large, work well, that they can sometimes fail,
can also fail systematically in certain areas, and that it is
extremely hard to find good solutions for the latter that do not cause
more problems than they solve.  Ideological quick fixes do not exist,
just as the optimal type sytem doesn't so no more flames please...

Regards,
Markus
--------------000208090400020101040703--