Thomas Sowell Speaking at The Fairmont Conference (1980)

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[NobodyImportant2008]

@AndroidPolitician

Hayek said it's common sense because it's the logical result of basic choices, actions, motives, rules, etc, which everyone in the economy already understand.

Buyer -> Seller. To the buyer "->" is "Spending". To the seller "->" is "Income". Thus "Spending" -> "Income". 1 Transaction, 2 Perspectives.

That's only the expense equation. There are others. Y = GDP not income, Y isn't an addend & it isn't recursive. Even if it was, it's still not circular reasoning so it's moot.

[NobodyImportant2008]

@AndroidPolitician

Ugh.. It's not an 'archaic definition'. It's a Greek compound word, like "Photon" & "Philosophy". We adapted it from Xenophon in the 1500s. How ancient Greece chose to manage its wealth isn't a fallacy of composition.

Quote: "Saying something is 'common sense' implies it is mostly innate, I'm not saying you're saying babies are born knowing it."

That's exactly what innate means. Also:

Quote: "So people are born knowing Okun's law or the concept of supply and demand?"

Oops? =p

[AndroidPolitician]

@NobodyImportant2008

(Cont.) Although I'd appreciate you replied in one comment to both.

It's not circular reasoning but how it's calculated is said to be circular. You can't get GDP without understanding that Income = Spending and that these are two different variables worth the same amount.

GDP is actually calculated by using the sectors of spending (C+I+G+[X-IM]) in a circle that increases income (Y) with each loop.

[AndroidPolitician]

@NobodyImportant2008

Archaic definitions from when people used fallacy of composition aside, the understanding of human affairs isn't innate so I don't see how it follows that everything from supply and demand to Singer–Prebisch thesis is "common sense". And saying something is "common sense" implies it is mostly innate, I'm not saying you're saying babies are born knowing it.

Exactly but for about a million comments you were claiming that Spending --> Income when they don't. (Cont.)

[NobodyImportant2008]

@AndroidPolitician

Once again, GDP does not use circular reasoning. None of the methods used to calculate it rely on themselves, on eachother, or on the assumption that spending = income. It does not attempt to prove anything, least of all its starting assumptions. It's just a measurement.

It's not a systemically circular either. It's not a 'circular flow'. You do not need to know 2009's GDP to calculate 2010's GDP.

True to your beliefs, you've confused 'what GDP is' with 'what GDP represents'.

[NobodyImportant2008]

@AndroidPolitician

Economics literally means "Household Rules". You are most certainly talking about laws people wrote, else there would be no such thing as an 'economy'. Money doesn't have any reality apart from human rules. It's contractual legal tender.

Context doesn't excuse your bad logic. Innate vs Discovery is a false dichotomy.

Buyer -> Seller is a vector. 'Spending' & 'Income' are entirely a product of perspective.

Are you saying circular reasoning is okay because GDP allegedly does it?

[AndroidPolitician]

@NobodyImportant2008

I'm talking about new scientific knowledge not laws people wrote. A few hundred years ago we didn't know the concept of supply and demand until someone discovered it, likewise we didn't know Singer–Prebisch thesis until 1950. It's not "common sense", they're discoveries.

I'm using the example of variables without vectors you can imagine them to be square = circle. GDP is literally circular and is understood as a "circular flow".

[NobodyImportant2008]

@AndroidPolitician

If economics is empirical, it certainly can't be told by listening to you.

How did you even extract that from what I said? Let me try: Are people born knowing state laws? No? So they're discoveries!?

Your 'Y' is just 'X' from another direction. They're not two variables which conspicuously have the same value. It's 1 vector.

If GDP required that Spending = Income, it'd be as circular as your misuse of it. It doesn't. They're independent. Use the production method, for example.

[AndroidPolitician]

@NobodyImportant2008

Well luckily you're not saying macroeconomics isn't empirical.

So people are born knowing Okun's law or the concept of supply and demand?

They're variables not figures, again it's = not an arrow sign. It's like saying X = Y, if X increases so does Y but that doesn't mean they are the same variable.

However you try to justify it, you can't accept GDP unless you understand that total spending = total income.

[NobodyImportant2008]

@AndroidPolitician

An estimate is not empirical data, it's an estimate.

You don't discover something you created. Again, if I make a (state) law saying you can't buy or sell on the Sabbath, you can't claim to discover a(n economic) law that transactions decrease on weekends.

Spending = Income is not the foundation of GDP. I can 'deny' their equality without hurting GDP because it doesn't pretend - as you do - that they're separate things which happen to match, much less claim to 'discover' it.