One of the posts which has been sitting in my drafts pile the longest is titled “Economic Agents Who Have No Idea What’s Happening”. The draft starts like this:
Eight hundred years ago, a bloomery produces some iron. The process is not tightly controlled—the metal may contain a wide range of carbon content or slag impurities, and it’s not easy to measure the iron’s quality. There may be some externally-visible signs, but they’re imperfect proxies for the metal’s true composition. The producer has imperfect information about their own outputs.
That iron is sold to a blacksmith. The smith likewise does not know the quality of the iron, but will do largely the same thing with it regardless. The quality of the worked product depends in part on the quality of the input, and is likewise difficult to observe. The producer has imperfect information about their own inputs, and that uncertainty carries through to their outputs.
I wrote those paragraphs at least a year before reading Jason’s review of Andrew Carnegie’s autobiography. Now the draft has a TODO to replace the opening with a summary of relevant passages from the autobiography.
This idea of “economic agents who have no idea what’s happening” plays a pretty central role in my world-models, because the very large majority of economic agents have basically no idea what’s happening the very large majority of the time. They can kinda pattern-match the most surface-level-obvious features of the things they’re directly working with, but they have no idea what’s going on under the surface, or what’s going on in other parts of the economy. This was even more true historically. The passages and discussion in Jason’s post are the best currently-published source I know of to convey that frame.
Premodern iron producers had basically no idea what was in their ore, no idea how productive and profitable the parts of their business were, they didn’t even know how profitable they were until the end of the year! And the passages in this post show that they constantly wasted resources and missed out on opportunities as a result.
Premodern iron producers had basically no idea what was in their ore, no idea how productive and profitable the parts of their business were, they didn’t even know how profitable they were until the end of the year! And the passages in this post show that they constantly wasted resources and missed out on opportunities as a result.
This sure does describe how I currently feel about “trying to cultivate intellectual progress via online tools and community”. I don’t really know how to get from here-to-there.
One of the posts which has been sitting in my drafts pile the longest is titled “Economic Agents Who Have No Idea What’s Happening”. The draft starts like this:
I wrote those paragraphs at least a year before reading Jason’s review of Andrew Carnegie’s autobiography. Now the draft has a TODO to replace the opening with a summary of relevant passages from the autobiography.
This idea of “economic agents who have no idea what’s happening” plays a pretty central role in my world-models, because the very large majority of economic agents have basically no idea what’s happening the very large majority of the time. They can kinda pattern-match the most surface-level-obvious features of the things they’re directly working with, but they have no idea what’s going on under the surface, or what’s going on in other parts of the economy. This was even more true historically. The passages and discussion in Jason’s post are the best currently-published source I know of to convey that frame.
Premodern iron producers had basically no idea what was in their ore, no idea how productive and profitable the parts of their business were, they didn’t even know how profitable they were until the end of the year! And the passages in this post show that they constantly wasted resources and missed out on opportunities as a result.
This sure does describe how I currently feel about “trying to cultivate intellectual progress via online tools and community”. I don’t really know how to get from here-to-there.