raghu wrote:
This discussion would be much enriched if you can provide a concrete example. An example where increased sophistication in modeling and computation has provided good forecasting ability.
raghu, Please don't get offended, but your request makes me think of somebody who, after watching Michael Moore's "Sicko," asks for concrete examples showing that medical technology has really improved, given that the U.S. health care system is such a mess. Is the development of ephedrine or seldenafil really evidence of medical progress, when they're used as life style pills rather than as blood-pressure regulators? Few on this list will question Marx's notion that capitalism -- turbocharged by class struggles, competition, individual pursuits at the expense of others, etc. -- is continuously pushing the envelope, revolutionizing the means of production, etc. It may also be clear that a social order plagued by conflicts of interest tends to induce some sort of technological arms' race, where the contending parties strive to hone more effective weapons, get ahead of the foes, etc. It may be less obvious, but it also stands to reason that the dynamics generated by widespread social conflict is largely self-referential, in the sense that the process by which people are trying to win feeds right back into the nature of the game making it more complex and its outcomes harder to anticipate. On top of that, at some points, sometimes as if out of the blue, people want to turn the tables altogether and change the very nature of the game, so on and so forth. In this light, is it really hard to see that -- whether brandished by Fed macro-econometricians to calibrate monetary-policy moves or by financial quants trying to expand the value of a hedge fund -- the technology of statistical inference is just one weapon inter alia in this conflict-ridden world of ours? Isn't it equally clear that they are going after a shifting target, a target that shifts precisely because they are going at it? Does that make the race, the necessity of developing increasingly effective weapons, and those weapons themselves less real? Welcome to the contradictory development of the productive force of labor under capitalism.
