13-5g1 The ERE (evenly rotating economy) is not the condition but the effect of thought experiment

Seeing the unseen via the ERE (evenly rotating economy).

“The idea of the evenly rotating economy is indispensable in analyzing the real economy; through hypothesizing a world where all change has worked itself out, we can analyze the directions of actual change.” (p. 329)

“Costs of production, are at the mercy of final price, and not the other way around. It is ironic that it is precisely in the ERE that this causative phenomenon should be the clearest. In the real world of uncertainty it is more difficult to see this, because factors are paid in advance of the sale of the product, since the capitalist-entrepreneurs speculatively advance money to the factors in the expectation of being able to recoup their money with a surplus for interest and profit after sale to the consumers.” (p. 355)

Related:

• 2-1a0b ‘Thought experiment’ - Don’t limit yourself to binary thinking. Explore at least three possible solutions.
• 13-3a The use of the mathematical concept of function in a science of human action is inappropriate—because it disregards time and knowledge creation (i.e., the multiverse)
• 13-4d6 The economist must take account of all the interrelations in the economy and recognize that money costs are determined by final prices reflecting consumer demands and valuations
• Data (as in experiences) needs theory (as in though experiment such as the ERE)
  • 5-2b5 Theories precede data
• Yet the theory needs data, and nothing of this world would suggest the evenly rotating economy per serevisit
  • 1-1c6a1c The absence of evidence is not the evidence of absence
  • 1-2g3.1 It’s explanations all the way down
  • 5-2b6 Theories need data
  • 13-1a3a4a The actual market prices are the only ones that ever exist
• The evenly rotating economy is about what would’ve happened without mind, but then some concepts (e.g., money) in the evenly rotating economy wouldn’t exist in the first placerevisit
  • 2-3a ‘First principles thinking’ - If it’s not forbidden by the laws of physics, it is possible
  • 5-2b7 The skeptical empiricist doubts both data and theory
  • 10-2e8 Reasoning about causes and effects is reasoning about variants of the causes and effects. What would’ve happened. How it could’ve been otherwise.
  • 10-2g3d1 Humans do stupid things because we can guess and create meanings. Our ability comes with a great cost of potentially doing very (infinitely) stupid things.
• On the ERE (evenly rotating economy)
  • 13-1a3a4 The equilibrium price cannot be realized, except in the evenly rotating economy (ERE)
  • 13-1a3a4b The long run of the evenly rotating economy (ERE) is not real at all, but a very useful theoretical construct that enables the economist to point out the direction in which the market is moving at any given time
  • 13-5b2c There is no time inconsistency in the evenly rotating economy (ERE)