CCCXX – Inflation

Ed Feser has an interesting article up about Economic and Linguistic Inflation. It’s mostly about linguistic inflation but it begins with a point about economic inflation. Here’s the beginning of Feser’s article:

F. A. Hayek’s classic paper “The Use of Knowledge in Society” famously argued that prices generated in a market economy function to transmit information that economic actors could not otherwise gather or make efficient use of.  For example, the price of an orange will reflect a wide variety of factors – an increase in demand for orange juice in one part of the country, a smaller orange crop than usual in another part, changes in transportation costs, and so on – that no one person has knowledge of.  Individual economic actors need only adjust their behavior in light of price changes (economizing, investing in an orange juice company, or whatever their particular circumstances make rational) in order to ensure that resources are used efficiently, without any central planner having to direct them.

Inflation disrupts this system.  As Milton and Rose Friedman summarize the problem in chapter 1 of their book Free to Choose:

One of the major adverse effects of erratic inflation is the introduction of static, as it were, into the transmission of information through prices.  If the price of wood goes up, for example, producers of wood cannot know whether that is because inflation is raising all prices or because wood is now in greater demand or lower supply relative to other products than it was before the price hike.  The information that is important for the organization of production is primarily about relative prices – the price of one item compared with the price of another.  High inflation, and particularly highly variable inflation, drowns that information in meaningless static. (pp. 17-18)

We have the tools to solve this problem! There’s two points worth making:

• What inflation is & what information it conveys
• What information is conveyed in any price whatsoever?

Let’s start with the second question first, because I like thinking backwards.

What’s In A Price? A Rose By Any Other Name Would Cost Twice As Much

I will make two mutually counterintuitive claims about Price. First: Price contains perfect information about the world at the moment of every transaction. Second: Price contains imperfect information about the market because it simulates but does not convey an expression of value.

Price contains perfect information about the world at a moment in time because of the equilibrium it achieves between supply and demand. If we are talking about oranges, the supply side of the market equation includes the substitutes and replacements, the derivative products and trades–every possible orange and every possible thing like oranges is represented by perfect knowledge of the supply side of the market. The demand side of the market equation includes every person for whom it is possible to buy oranges, every person for whom it is not possible, every currency they can buy it in, every conceivable purpose for oranges, and every conceivable derivative product from oranges. In short: the price of oranges includes who is supplying oranges and who is not. It includes who demands oranges and who does not. Every price includes this information, because if demand was infinite price would be infinite too. A market cannot just be an expression of who wants something, it has to factor in who doesn’t want it, and why. I am not in the market for oranges at this very moment because I ate grapes a few minutes ago. That decision is included in the price of oranges. If two minutes from now I get an idea for a way to make unlimited clean energy out of orange peels then two minutes from now my demand for oranges will increase dramatically, and that will affect the price of oranges.

(Kristor wrote an article and made this point in the comments, or i made this point, or I was learning it from him–anyway I can’t find it on the Orthosphere yet but I will link here if I can find it).

There’s a whole other side to this equation, that does not get a lot of consideration. What can oranges be exchanged for? This is a good point to pivot into inflation.

Inflation Makes Me Want To Blow Up

Inflation typically refers to the increase in prices of goods due to an increase in the money supply. Typically, inflation is treated like weather–it is a thing that happens to economies, and it is hard to predict. Inflation is a quality of markets. In fact, a more sensible way of discussing economic inflation would be an increase of supply for a resource available for barter. Remember the Zippy rule: All exchange is barter. So what makes it that I am willing to trade a sack of oranges for a few sheets of paper?

The core of this idea is the fact that the paper represents the delegated authority of the sovereign to provide for my needs. The sovereign issues a paper which says “I would buy this citizen one dollar’s worth of goods, but I cannot, so I trust this citizen to buy it for himself.” When the sovereign issues a LOT of these papers, they become worth less and less in barter. If the total economy is just me and my friend Joe the Orange Seller, and our total savings is $10,000 between us, and I go and offer to buy one orange from Joe for $10–that is a substantial amount of the total economy being spent on this one transaction.

If Joe the Orange Seller and I have a sum total savings of $10,000,000 between us, and I offer $10, that is less substantial of an investment. The sovereign needs to carefully manage the money supply or else there will be an over abundance of the resource. This makes sense if we were to use another resource.

If where I live, Guinea Pig husbandry is rare, then offering Joe a Guinea Pig in exchange for an orange would be a pretty big deal. If where I live there is an infestation of Guinea Pigs and they have become a pest, such that you cannot walk outside without stepping on one, then offering Joe a Guinea Pig would be a joke–he could step outside and fill a basket with guinea pigs right now, for free–why would he give me an orange for one?

Managing money as a resource is the key. Price is the twofold equilibrium between the supply and demand of the product being sold and the thing being traded for it.

This means you should be able to make a model for price that includes the supply and demand of oranges and the supply and demand of barterable resources and set the price in [resource] for oranges given both. I’m imagining two intersecting graphs with supply and demand on it and price being the point at which both graphs are in mutual equilibrium.

Price as twofold equilibrium is the new idea for me. Maybe economists realized this a long time ago but I’ve just realized it so I will probably write more on this topic.

AMDG

CXXXVI – On Hell and Divine Mercy

This post was originally going to focus on teachings of Hell and damnation, inspired by the many confused and rightly terrified commenters on Ed Feser’s article on his blog and Kristor’s article on Orthosphere. In reading the articles (to which I found no objection) and subsequently the comments (to which I found many), it occurred to me that the Church hasn’t done enough to catechize on this teaching.

However, during a speakeasy Mass celebrated by my parish Priest on Divine Mercy Sunday, I realized that the problem is twofold: How do we reconcile teachings of Mercy with teachings of Hell? How can both be understood in their proper context?

On the Bus to Hell

The objections go something like this: (1) If God is good, why would he sadistically torment people for eternity? (2) God wants us to be saved, so it’s entirely possible Hell is empty and everyone realizes their mistakes when faced with particular judgement. (3) If God is omnipotent, why did he bother making us so we would reject him? If we can do that then it means he wants us to do it, and it’s his fault we would go to Hell, which isn’t just at all.

These touch on many facets of the question. I can simplify them all: If God is Love, why does Hell exist at all?

Lets use Zippy’s “Bus Stops” Rubric to try and sort this out.

1. God made man with Free will. This is self explanatory. Without free will, man is not his own master, and we are not responsible for our own actions. To conceive of Man without Free Will is to conceive of an automaton: Mindless, following along the predetermined course of his life. Free will is ontologically essential to our ideas of man. If you do not believe man has free will, get off the bus.
2. Man can freely choose God or ¬God. If man has free will, he can, of his own volition, make any choice. One such choice is whether or not to follow God. We make this choice every moment of every day. Choosing God implies obedience to His law, the precepts of the Catholic Church, and participation in the Sacraments. Choosing ¬God is the absence of those things. We can continue to make this choice as long as we are mortal. If you do not believe every choice we make is for God or ¬God, get off the bus.
3. That decision is permanent. When we die, our souls will be laid bare before a perfect judge. The state they are in at the time of their death is how it is. The decision for God or ¬God is irrevocable after we die, because we lack the means to change. How can our immaterial souls change? Change is measured by time, and in the absence of time, what can change? If you do not believe our Last Act is perfect and irrevocable, get off the bus. If you are still on the bus, you have an orthodox notion of Eschatology.

Selected Objections

The first bus stop is about agency. Objections on this ground usually fall under two varieties: First, that Free will is an illusion brought on by biological necessity (i.e. we are clumps of atoms). Second, that God is the author of all things, even our lives, and we are merely riding the roller coaster of life.

The first objection can sound convincing but when followed through, is absurd on it’s face. This is a “nature above all else” argument, that the natural world gave rise to life on its own. The connection being that if Free Will is mere biological process, all creatures would have similar processes: The human mind is obviously different and superior to animal life, and the difference is our agency. Biology cannot account for the difference between a human brain and an animalian brain.

The second objection is based on the fallacy that God knowing all things, and God creating all things, makes God responsible for all things. Parents are not responsible for the actions of their children, for example, and you would think that a Law written on the universe would find its parallels in our mundane daily life. When little Johnny throws a baseball in the house and breaks a vase, Dad doesn’t apologize to Mom. Little Johnny must apologize to them both.

The second bus stop is about the nature of our choices. I’ve presented it as a choice between God and ¬God. How do we know what those choices are? I noted the Catholic Church as the authority. The doctrine that There is no salvation outside the Church exists for a reason: The Church is the authority on how to choose God, following any other authority must by its very nature leads away from God. Said another way, the Church is the shortest path between you and God. Choosing any other Christian authority might vector slightly away; choosing ¬God is vectored the opposite direction from God. Therefore, objections to this bus stop generally dispute the authority of the Church, or they dispute the nature of the choice.

The apologia for the Church is larger than I have room for here. So on this point I will only say, Christ instituted the Church. Anyone who points to any other authority must explain why Christ instituted the wrong church, and then waited for centuries (or millenia) for someone else to figure out what He really meant.

The objection about the nature of the choice is a little more straightforward to discuss. Some object that those are the only two options. Perhaps a third intermediate or neutral choice could be made. Perhaps the choice isn’t so clear cut all the time. The answer to me can be explained visually. If we imagine a large circle, like a Venn diagram without the counterpart, that is all things that abide by God’s law, and which are therefore “choosing God”. If it doesn’t fall within that, it is for ¬God. The argument then becomes, where’s the line? Who sets it? And we’re back to the authority of the Church.

The third bus stop is a little more complex. This pertains to the metaphysical nature of the afterlife, and the consequences of each of the prior bus stops affects the significance of this one. Nevertheless you cannot arrive at this stop without making it past the others. The assertion that we cannot change our station after we die is defensible by scripture, defensible by Catholic doctrine, and defensible by logic. Objections will usually appeal to emotion, however.

One such objection is the idea that once we realize our mistake, we’ll be able to change our minds. Another such objection is that God will understand the extenuating circumstances relating to our choices.

To the first objection, I have two responses. The first, hinted at above: Change can only happen as long as there is something to change. Can a soul be cut in half? Can a soul be dyed purple? No. Can a soul be angry or happy? Those are changes in emotional state: I think not, at least not in the same way you or I can be angry or happy. Our mortal husk is capricious because our mortal world is ever changing around us. Emotional change is a response to some stimulus. To what stimulus would a soul be exposed to? The only change that can happen in the afterlife is the restoration of the Soul’s being in purgatory. For a soul to learn then would be for a soul to change its mental state to accommodate some new knowledge. For a soul to show remorse would be for it to experience an emotional response to some stimulus. If those things happen at all, they are not at all comparable to our merely human learning and remorse. The second response I have to this is scriptural: Consider the parable of the workers in the vineyard. The man who was there at daybreak, worked all day, got paid the same as the man who arrived an hour before sundown. The important thing is not how much they were paid, but that they worked for the vintner. The man who showed up after the vintner wouldn’t be paid at all, even if he realized it was a mistake to do no work. Why ought the vintner pay him?

The second objection is that God will understand the extenuating circumstances of our choices for God or ¬God. He will! As mentioned earlier, our souls will be laid bare before a perfect judge. If you believe God’s Justice is somehow imperfect, then you do not believe in God. At the same time, for Justice to be perfect, there must be a perfect Law to be measured against. The Catholic Church guides us through that Law, and we must make every effort to live by it.

Lord Have Mercy

We cannot have this discussion without addressing for a moment the concept of Divine Mercy. We are responsible, in this life, for making the choice between God and ¬God. God is a perfect Judge, and so will weigh our souls according to His infinite wisdom, which we typically call Justice. But what is Mercy?

To understand we need to follow two etymological streams: The English word Mercy, back; and the Latin word misericordia (mercy) forwards. Lets start with Latin.

Misericordia is a contraction of miseria (Misery) and cor (heart). There are a couple ways to read this. One way is that Mercy is a misery of the heart, like empathy. Indeed this is related to the second way I had in mind, which was the heart extending to one who is miserable. In this sense, Mercy is consolation, not necessarily abrogation of due justice. We describe putting down a sick pet as a mercy, because we are “putting them out of their misery” or easing their pain. Mercy to a man sentenced to death might be to ease his pain somewhat by offering him a last meal. His death is not avoided, but it is eased somewhat by some kindness. In one more example, when soldiers in World War 1 storm a trench and find foes who are wounded, mercy is to help with their wounds, to recognize that they have already suffered enough. God hears our penitent supplications, but for God to be merciful does not mean he will forgive; but if he forgives, it would be merciful.

Let’s look at Mercy now. Mercy comes from Latin merces (reward, wages, favor, or grace), which in turn comes from Latin mercis (merchandise), which is related to mercatus (market). Colloquially it means “disposition for compassion” or “act of goodwill”. But this etymological difference shows us two things. First, the modern understanding of Mercy as an entitlement; second, the idea of it as the disposition for misericordia, which is mistaken for misericordia itself. This is where people get confused and think God’s Mercy means a disposition to forgive, and thereby extend that as an expectation of forgiveness.

I say again: Mercy does not abrogate justice, if it did it would be rather unjust. If the man who shows up to the vineyard after sundown receives a wage even though he did no work, that would be unjust regardless of whether it is considered merciful or not.

When we choose for God or ¬God, we can know that whatever happens God will have empathy for us because he loves us, and that God’s Justice will be perfect.

AMDG

CXXXI – Truthmakers and History

I am wading into a discussion I am neither equipped nor qualified to participate in, but as a thought experiment it piqued my curiosity so I will try my hand and let the experts run roughshod over my musings.

I first encountered the idea of Truthmakers via Ed Feser, here. Read this first. Today I saw an article by James Chastek at Just Thomism, here. That’s about all the preparation I have, besides the Metaphysics I’ve gleaned from the Orthosphere.

The question seems to be: How can past events be both true and not exist?

As mentioned I am unqualified for this so at this point I attempted to summarize the state of things but I can’t find the words. Read those two articles first and you’ll know everything I know about the issue.

Feser says Presentism holds that in our temporal realm, only present objects and events exist. Those who object to it suggest that past events and objects are true, so they must exist. Feser goes on to explain that they obviously do not exist in the same way that you or I exist, but they are true because they happened.

Chastek suggestions two additional solutions to the objection: If the contingency of events “prescinds from time” (or, if contingency of events is true, absent considerations of time) then there’s no special necessity for particular events at particular times. He says “There’s nothing in the concept of Lincoln requiring he be shot”.

The alternative is that contingency does not prescind from time, but if that’s the case then “past events as past cannot be otherwise”, which I take to mean that Object A is a current event and Object B is a past event, and a trait of Object B is that it is past and so cannot be conceived other than as a past event.

All of this is preamble. I ended up summarizing kind of.

Kristor has a metaphysical heuristic I like to use relating to “facts, acts, and truth“. In it, he describes present things as “occasions of becoming”, they are “in progress”. So this might actually conflict with what Feser said about only present things existing. The second an act is complete, it is in the past.

Let me approach this from a different angle.

Built into the present is the past. You cannot conceive of any present thing without some past thing. A wooden chair cannot exist if it was not assembled by a carpenter, or cut apart by a lumberer, or felled by a lumberjack, or exposed to sunlight, or planted as a seed, so on and so forth. The wooden chair does not exist apart from it’s past. It is the culmination of a sequence of completed acts going all the way back to the Prime Mover. The present is indistinct from the past, by definition.

Once an act is completed, it is unchangeable. I don’t know that I would say that makes it not contingent. It’s necessary as it pertains to the present, but not necessary insofar as God required it.

So then lets tackle the other part of the problem. Past events don’t exist. What does it mean to exist? It seems like presentism holds that existence is what Kristor would describe as “becoming”. Things that exist are becoming. The wooden chair is not a completed act, because a completed act implies necessarily that it is past. All completed acts lead to the current becoming of the chair.

The question about Truthmakers is “what makes this true”, which is another way of saying “is this a fact”. As Kristor explains, a Fact is a statement of truth. “The wooden chair exists” is true because exists implies it is actively becoming. “Abraham Lincoln Was Shot” is true because it is a completed act. “Abraham Lincoln Exists” is not true because Abraham Lincoln is not actively becoming. “Abraham Lincoln Existed” is true because Abraham Lincoln is no longer becoming.

This helps me wrap my head around the question, at any rate. I don’t think I’m putting forward any new arguments, but Kristor’s heuristic helps break it into useful chunks.