At the top of the list of economic theories based on clearly false assumptions is that of Rational Expectations, in which humans are assumed to be machines programmed with rational responses. Although we all know – even economists – that this assumption does not ﬁ t the real world, it does allow for relatively simple conclusions, whereas the assumption of complicated, inconsistent, and emotional humanity does not. The folly of Rational Expectations resulted in ﬁve, six, or seven decades of economic mainstream work being largely thrown away. It did leave us, though, with perhaps the most laughable of all assumption-based theories, the Efﬁcient Market Hypothesis (EMH).
Jeremy Grantham is a national treasure.
Effective problem solvers are deliberate: they think before they act. They intentionally establish a vision of a product, an action plan, a goal, or a destination before they begin. They strive to clarify and understand directions, they develop a strategy for approaching a problem, and they withhold immediate value judgments about an idea before they fully understand it. Reflective individuals consider alternatives and consequences of several possible directions before they take action. They decrease their need for trial and error by gathering information, taking time to reflect on an answer before giving it, making sure they understand directions, and listening to alternative points of view.
Language and thinking are closely entwined; like either side of a coin, they are inseparable. Fuzzy, vague language is a reflection of fuzzy, vague thinking. Intelligent people strive to communicate accurately in both written and oral form, taking care to use precise language; defining terms; and using correct names, labels, and analogies. They strive to avoid overgeneralizations, deletions, and distortions. Instead, they support their statements with explanations, comparisons, quantification, and evidence.
The development of the battery began with Galvani in 1790, and Volta in 1800. Galvani discovered that a frog’s legs would exhibit violent muscular contraction when its exposed nerves were touched with one metal and its muscles were touched with another metal, the two metals being connected. The effect was due to an electric current generated and acting with contractile effect on the muscles of the frog’s legs.
But railroads and steam-cars constitute only one of the stirring elements of modern civilization. As we make the backward run of one hundred years we have passed by many milestones of progress. Let us see if we can count some of them as they disappear behind us. We quickly lose the telephone, phonograph and graphophone. We no longer see the cable-cars or electric railways. The electric lights have gone out. The telegraph disappears. The sewing machine, reaper, and thresher have passed away, and so also have all india-rubber goods. We no longer see any photographs, photo-engravings, photolithographs, or snap-shot cameras. The wonderful octuple web perfecting printing press; printing, pasting, cutting, folding, and counting newspapers at the rate of 96,000 per hour, or 1,600 per minute, shrinks at the beginning of the century into an insignificant prototype. We lose all planing and wood-working machinery, and with it the endless variety of sashes, doors, blinds, and furniture in unlimited variety. There are no gas-engines, no passenger elevators, no asphalt pavement, no steam fire engine, no triple-expansion steam engine, no Giffard injector, no celluloid articles, no barbed wire fences, no time-locks for safes, no self-binding harvesters, no oil nor gas wells, no ice machines nor cold storage. We lose air engines, stem-winding watches, cash-registers and cash-carriers, the great suspension bridges, and tunnels, the Suez Canal, iron frame buildings, monitors and heavy ironclads, revolvers, torpedoes, magazine guns and Gatling guns, linotype machines, all practical typewriters, all pasteurizing, knowledge of microbes or disease germs, and sanitary plumbing, water-gas, soda water fountains, air brakes, coal-tar dyes and medicines, nitro-glycerine, dynamite and guncotton, dynamo electric machines, aluminum ware, electric locomotives, Bessemer steel with its wonderful developments, ocean cables, enameled iron ware, Welsbach gas burners, electric storage batteries, the cigarette machine, hydraulic dredges, the roller mills, middlings purifiers and patent-process flour, tin can machines, car couplings, compressed air drills, sleeping cars, the dynamite gun, the McKay shoe machine, the circular knitting machine, the Jacquard loom, wood pulp for paper, fire alarms, the use of anæsthetics in surgery, oleomargarine, street sweepers, Artesian wells, friction matches, steam hammers, electro-plating, nail machines, false teeth, artificial limbs and eyes, the spectroscope, the Kinetoscope or moving pictures, acetylene gas, X-ray apparatus, horseless carriages, and—but, enough! the reader exclaims, and indeed it is not pleasant to contemplate the loss. The negative conditions of that period extend into such an appalling void that we stop short, shrinking from the thought of what it would mean to modern civilization to eliminate from its life these potent factors of its existence.
The legal market is going to have a hard time competing with the illegal market, but a particularly hard time competing with untaxed, unregulated sort-of-legal market,” Mark Kleiman, a UCLA professor and one of the main policy consultants for the Washington’s government, told Sullum.
37signals will lead the new global movement filled with imaginary assumptions on growth and monetization potential,” he continued. “We’re excited to roll out a list of unconfirmed revenue possibilities that involve crowdsourcing, a robust set of widget creation tools, 3G, augmented reality, social stuff, and an app store. Also, everything we make will include a compass.
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