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To: Don Lloyd who wrote (186)	4/13/2001 10:04:21 AM
From: Ilaine	Read Replies (2) \| Respond to of 443

I'm distrustful of economic books that attempt to quantify human behavior via mathematical equations. I don't really think it can be done. For example, an attempt to quantify the percentage of unemployment that is consistent with overall growth. The question is absurd. It tells you nothing about the people who are unemployed - it assumes everyone is equal, when they aren't. It's more likely than not that the population of employed people is made up of intelligent, educated, hardworking people, and it's more likely than not that the population of unemployed people is made up of less intelligent, less educated people who are less motivated to work hard. The more work demands intelligence and education, the more likely it is that the less intelligent and less educated will become chronically unemployed, perhaps even unemployable. Those are truisms, but I defy anyone to test those theories by an equation. They can only be tested "scientifically" by surveys, or you could just settle for observation. So if you measure productivity growth (I dare say it here) and compare it to unemployment - I contend that all you've really learned is how many people have become, as they say in England, "redundant." Economic dead weight. Either they are not working because they can't keep up, or they are in an industry with lower demand for workers, and need to learn new skills. Schumpeter and his ilk I find especially risible because of their belief in waves. The attempt to quantify the law of supply and demand into an overarching theory is on a par with Elliott waves in absurdity. Yes, the constant tension between aggregate supply of goods and aggregate demand for those goods causes the supply and the price to rise and fall in reverse correlation. Similarly interest rates and the money supply. But any wave pattern you actually see is more like a fractal. Schumpeter assumes that an upwave will come due to new technology. The constant human endeavor of inventing new technology, especially in the West, follows no pattern. But that's just my own bias - I hate generalization, love individualization, recognizing the unique aspect of every human event. If someone came up with a wave theory about lions and zebras, you'd think they were a moron. In a closed system, the more lions, the fewer zebras, then the fewer lions, so the more zebras, then the more lions, and so on and on ad infinitum. But the system isn't closed because the zebra supply is also dependent on the zebra food supply, and that isn't dependent on the lion population but on the weather. And lions can also eat wildebeasts and springboks, but those also eat the same things that zebras eat. No doubt some fool could try to make that into an equation, but what would he prove? What would a grand wave theory about lions and zebras tell you that I didn't just tell you using words?