Nature of Competition: Science on Measurement

 

There is existence (1) and inexistence (0). As opposed to the latter, the former always and everywhere has two hands. A line (L¹ in dimension) has two ends, an area (L²) two opposing lines and a space (L³) two opposite sides. There in the nature are masses of all different types, kinds and sorts. The mass has a mass (M) and occupies a space (L³). Masses physically and chemically interact among themselves on the basis of physical and chemical forces. Apparently there are pros (+) and cons (-) particularly in between two masses: some two-some’s are inter-attractive and others are inter-rejecting.

 

Effectiveness vs efficiency. In life of us as human, we have so many fields of judgement after imaginary, nominal and virtual thinking on one side and actual, practical and real measurement on the other. Afterwards, we classify matters into two categories in one way or another: for instance, good or bad (好恶, hàowù), right or wrong (正误, zhèngwù), virtuous or vicious (善恶, shànè) and true or false (真伪, zhēnwěi).

             Approximately saying, the first regards preferences of pros (+) to cons (-). The second is about opinions on physical and economic matters, while the third on moral and ethical issues. The fourth is of, by and for scientific theories. On the flipside, the first is subjective, the second and third relative and the fourth absolute. The first is at our mercy; the second and the third depend on the poll, real or nominal; the fourth is owing to measurement.  

             Roughly saying, opinions are a matter of degree regarding efficiency, while theories a matter of dichotomy of effectiveness. Ergo, a true theory (+) is purposive (+) and beneficial (+), while a false theory is counter-purposive (-) and maleficial (-). Of all, “efficient ineffectiveness” is the most dangerous or even suicidal.

             “Ineffective” aggregate demand? Again, they just are barking down at the tree-top, however rightly it may be. S'il te plaît, va-t'en, all the anti-theories (-) of reverse (-) causality!

 

Measurement in physical sciences. Possibly excluding the Relativity Theory, scientific theories are to be constructed on the basis of measurement of things and matters. Without measurement in specific metrics we cannot tell “true” from “false.” We prefer purple to black as a matter of preference, while we make the call as a matter of fact, for instance, that three inches is greater than two.

             A metric consists of dimensions and scales. In physical sciences, there are three sets of dimensions, namely, spatial, temporal and material: L for length, T for time and M for mass. For instance, the volume is L³, the racing speed L∙T^-1, the acceleration L∙T^-2 and productivity M∙T^-1. Scales in each dimension are indefinite and up to us.

 

Measurement in economics. Economics is a discipline on effective utilization of resources. Needless to say, utilization is pro-utility and con-disutility, where utility is from consumption and consequently personal and situational. Alas, no science is possible?

             Where there is a will, there is a way. Assume noises away and focus on the abstracted market. Suppose ①a community with a defined number of households with four consumers each, ②a certain product of interest, ③a specific period of accounting, ④the sovereign currency, also called legal tender, to be used as medium of exchange, and ⑤more or less trustworthy context of trade. Incidentally we denote the value of utility as “U,” as borrowed from W.S. Jevons.

             Economy, sometimes imprecisely called efficiency, targets M∙U∙T^-1. We in the market are ready to measure economy with the currency unit. Therein, all the utilities (benefits) and dis-utilities (costs) are represented with a certain number of units in legal tender. For instance, the dollar sign is the unit of economic account and the one-dollar bill is the medium of exchange. Only now, the child of economics is born.     

             Abstraction, the paradigm of market and measurements are the three foundations of economic analysis. In economics, overuses, abuses and misuses of mathematics is more maleficial than beneficial. For instance, mathematical "differentiation" of the product will lead to nonentity (M⁰). Then on, where is the utility(M∙U)? Where is economics? Umm, excessiveness is no better than shortness (过犹不及, guòyóubùjí in pinyin).

             A corollary: Blaming the market, one ain’t an economist. It’s him who conceives and bears the market. Either way, mea culpa.

Foundations of Economic Analysis

Book by Paul Samuelson