The part and the whole

Can you know the whole by observing the part? If you are grasping the whole by the part, then you're not observing the part indeed: you're observing the whole from a specific viewpoint. As long as a viewpoint necessarily leads to another viewpoint, you're grasping the whole.

A true part doesn't allow to know the other parts. It is necessary but not sufficient to know the whole. However the part conveys some information about the whole which can be classified in two categories: one, definite but limited knowledge about the whole; two, reduction of the possible true assertions which can be given about the whole, or which is the same, some information about what the whole is not.

An explicit bet

By November 2012, the unemployment rate in United States was 7.7% and inflation, as measured through the Personal Consumer Expenditures Index (core), was 1.6%.

The Fed members seemed to agree that unemployment was to high and that they were ready to concede a slightly higher inflation in order to reduce the unemployment rate.

This is how on its December FOMC statement, the Fed decided to undertake a monetary policy which basically increases the quantity of money in the economy. The goal was that more money means more credit and more general activity and, at the end, more employment (less unemployment) and production, even if recognizing a cost through more inflation. But the Fed is more explicit: the statement asserts that a reduction on the unemployment rate is going to be pursued as long as inflation doesn't reach 2.5%

The Phillips curve is a supposed relation between unemployment and inflation. What is the shape of that curve at any point in time? What does it shift (changes the shift) of that curve? Those are empirical questions over which economists have debated for years.

With their very explicit, quantitatively measurable policy, what the Fed members are telling amounts to bet that the Phillips curve has a specific shape, a shape such that lays under the point {unemployment: 7.7, inflation 1.6}. This is so, because only such a curve (drawn as the green curve in the graph), allows to reach an unemployment rate of 6.5% or less before reaching an inflation of 2.5% or more.

However, if the Phillips curve lays over the point {unemployment: 7.7, inflation 1.6}, i. e. if the Phillips curve has a shape as that of the blue curve on the graph, then the Fed is going to reach the 2.5% inflation milestone before reducing unemployment under 6.5%, being therefore unable to reach the undartaken goal of having an unemployment of 6.5% or less with an inflation of 2.5% or less.

Next months and years are going to be really interesting in matching reality against the Fed view on the Phillips curve, is going to be a rarely good contribution to the empirical debate, and is going to give a very clear case study to economics teachers.

Green or blue? Make your bet!

Mean means: true versus merely apparent economics

Explanation of economic phenomena is rarely an end in itself, some times a means for technological ends, and near to always a pretext to deceive others and oneself.

A praxeological modelling of government

Every right is exclusive: it aims to exclude all others from commanding that over what the right is invested.

A right is only meaningful when there are means, available (included being to the knowledge of) to the right owner, to successfully defend it against any other attempt to violate it.

A rules structure is any list of all not conflicting rights.

Conflict comes from the confronting of two or more different rules structures.

Conflict is a case of absence of cooperation (the only other case of absence of cooperation being autarky).

The set of actions, either by one agents or by more, aimed to defend a rules structure, i. .e. to attack any other rules structure, conforms a government.

A government is, by definition, in conflict (i. e. in war) with any other government.

Two apparent governments which are in no conflict whatsoever, i. e. which defend the same rules structure, are not two governments but two parts of one same government.

One apparent same government which changes a rules structure, i. e. which enters into conflict with a previously defended rules structure at least in some part, it is not the same government than before but other government, therefore an enemy of the former, even if it is composed by the same people, and governs in the same place than the former. A change in the rules structure is, in kind and regardless of magnitude, akin to a coup d'état.

The apparent "meta-right" of having the right to change other rights amounts to the effective non-existence of those other rights. As long as some have the effective power to change others' rights, the others don't have rights but only the some.

Government, Inc.

Wouldn't be better if government ownership were embodied on stock? After all, elections are already driven by little more than financial power.