they are obvious applications of the model in this post.
I worry that the obviousness is misleading, because economies actually are made of more or less rational agents, and as a result have a lot of anti-inductive elements, which are not captured by a control theory based derivation. For example, it fails to suggest that if it’s possible to make abnormal returns by operating a research lab, people would be doing that already and thereby drive the risk-adjusted returns down to a level that’s commensurate with other investments, or that if you manage to figure out how to better operate a research lab, other research labs can copy that and thereby reduce your returns down to a normal level, or new research labs will start up and compete with you.
It really doesn’t explain housing
In that case it’s probably explained by preferences for greater quality and size in housing (explained by the income effect and housing being in part a positional good), plus increased regulation (studied under public choice theory).
I worry that the obviousness is misleading, because economies actually are made of more or less rational agents, and as a result have a lot of anti-inductive elements, which are not captured by a control theory based derivation.
This is a really good point, thanks. This points at some areas of my strategy that aren’t explained in this post (these areas contain things like asymmetric weapons and using decision theories that pass the mirror test).
In that case it’s probably explained by preferences for greater quality and size in housing (explained by the income effect and housing being in part a positional good), plus increased regulation (studied under public choice theory).
The first explanation would imply that people are willing to pay 6x as much for a 2000-style house than a 1950-style house (ignoring factors like 1950-style houses being scarcer now than they were in 1950), which seems false. A public choice theory framework for regulation assumes that these regulations are generally in people’s interest, whereas they often aren’t (people aren’t very informed about what housing regulations are good, and regulatory capture is a thing); indeed, if people wouldn’t be willing to pay 6x as much for a 2000-style house than a 1950-style house after knowing about these additional regulations, then that indicates that these regulations aren’t in their interest. Perhaps there are one or more good explanations within the field of economics for this phenomenon, but it does not seem like the search strategy you are using to produce economics explanations for this phenomenon is getting good explanations at a very high rate, which indicates that the field of economics is drawing little attention to good explanations for this, or is drawing attention away from the good explanations.
The first explanation would imply that people are willing to pay 6x as much for a 2000-style house than a 1950-style house (ignoring factors like 1950-style houses being scarcer now than they were in 1950), which seems false.
I only intend it to be part of the explanation, and surviving 1950-style houses are probably bigger and higher quality than the average 1950 house (which is what the cost comparison was based on).
A public choice theory framework for regulation assumes that these regulations are generally in people’s interest
I don’t think that’s true. Rent seeking and regulatory capture are major themes in public choice theory. (Wait, by “in people’s interest” do you mean “in someone’s interest” or “in the interest of the general public”? I think public choice theory definitely doesn’t assume the latter, and even the former is debatable in that it predicts a lot of waste which isn’t in anyone’s interest.)
it does not seem like the search strategy you are using to produce economics explanations for this phenomenon is getting good explanations at a very high rate
What is the explanation that your framework generates? I don’t think it was spelled out in the post, or maybe I missed it?
Rent seeking and regulatory capture are major themes in public choice theory.
Oh, I got public choice theory confused with social choice theory, you’re right.
What is the explanation that your framework generates?
So, I’m still confused about this (I plan to investigate this more), but the framework of this post would posit some combination of: processes that produce houses are hard to imitate and have gotten worse over time as knowledge is lost; regulatory capture; coordination being harder as better attacks on existing coordination systems have been developed (e.g. more ways of pretending to work, more bullshit jobs that are considered part of a normal business); some kind of coordination among house-builders. Since there are lots of possible explanations, this isn’t very enlightening on its own, and more investigation is needed.
Upon writing this, it seems like my framework isn’t clearly better at explaining the phenomenon than the field of economics (they both posit that there could be many causes), until further investigation has been done; however, that isn’t the assertion I was originally making, and also it’s kind of a moot point since I previously thought you were arguing that the content of this post was obvious, and responding to that.
I worry that the obviousness is misleading, because economies actually are made of more or less rational agents, and as a result have a lot of anti-inductive elements, which are not captured by a control theory based derivation. For example, it fails to suggest that if it’s possible to make abnormal returns by operating a research lab, people would be doing that already and thereby drive the risk-adjusted returns down to a level that’s commensurate with other investments, or that if you manage to figure out how to better operate a research lab, other research labs can copy that and thereby reduce your returns down to a normal level, or new research labs will start up and compete with you.
In that case it’s probably explained by preferences for greater quality and size in housing (explained by the income effect and housing being in part a positional good), plus increased regulation (studied under public choice theory).
This is a really good point, thanks. This points at some areas of my strategy that aren’t explained in this post (these areas contain things like asymmetric weapons and using decision theories that pass the mirror test).
The first explanation would imply that people are willing to pay 6x as much for a 2000-style house than a 1950-style house (ignoring factors like 1950-style houses being scarcer now than they were in 1950), which seems false. A public choice theory framework for regulation assumes that these regulations are generally in people’s interest, whereas they often aren’t (people aren’t very informed about what housing regulations are good, and regulatory capture is a thing); indeed, if people wouldn’t be willing to pay 6x as much for a 2000-style house than a 1950-style house after knowing about these additional regulations, then that indicates that these regulations aren’t in their interest. Perhaps there are one or more good explanations within the field of economics for this phenomenon, but it does not seem like the search strategy you are using to produce economics explanations for this phenomenon is getting good explanations at a very high rate, which indicates that the field of economics is drawing little attention to good explanations for this, or is drawing attention away from the good explanations.
I only intend it to be part of the explanation, and surviving 1950-style houses are probably bigger and higher quality than the average 1950 house (which is what the cost comparison was based on).
I don’t think that’s true. Rent seeking and regulatory capture are major themes in public choice theory. (Wait, by “in people’s interest” do you mean “in someone’s interest” or “in the interest of the general public”? I think public choice theory definitely doesn’t assume the latter, and even the former is debatable in that it predicts a lot of waste which isn’t in anyone’s interest.)
What is the explanation that your framework generates? I don’t think it was spelled out in the post, or maybe I missed it?
Oh, I got public choice theory confused with social choice theory, you’re right.
So, I’m still confused about this (I plan to investigate this more), but the framework of this post would posit some combination of: processes that produce houses are hard to imitate and have gotten worse over time as knowledge is lost; regulatory capture; coordination being harder as better attacks on existing coordination systems have been developed (e.g. more ways of pretending to work, more bullshit jobs that are considered part of a normal business); some kind of coordination among house-builders. Since there are lots of possible explanations, this isn’t very enlightening on its own, and more investigation is needed.
Upon writing this, it seems like my framework isn’t clearly better at explaining the phenomenon than the field of economics (they both posit that there could be many causes), until further investigation has been done; however, that isn’t the assertion I was originally making, and also it’s kind of a moot point since I previously thought you were arguing that the content of this post was obvious, and responding to that.