The Fairness Theorem - page 4
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A mathematical proof of not only the possibility but also the necessity of a libertarian economy - the free market.
Since the theorem is constructive, it can be used as a mathematical basis for libertarian economic theories that do not contain contradictions with the conditions of necessity and sufficiency of a fair market exchange mentioned in the theorem.
The theorem proves that not only material, but also spiritual values can be exchanged on the free market. It is also possible to calculate a fair price for spiritual goods, just as for material goods, expressed in material units of measurement, such as precious metals.
The current version can be seen HERE.
In short - not a theorem.
Rather - a modelling of the process of optimal management of redistribution of material goods in a planned market economy.
And even if they did, what good would it do the methaquotes to make the algorithm public? Don't they already have a working server, which acts as an inter-bank for the methaquot brokers? I read such information somewhere. Probably on the main website?
And who said you would make it "public"? You need IDEAS for it from the very beginning. For ideas, you have to first discuss, figure out what's what. There are only a handful of good algorithms for matching in the public domain.
A good stock-matching algorithm is good money. HFT only makes money - on deficiencies in these algorithms.
And server for a dozen brokers is one thing, and for an open site is quite another, because predatory traders and arbitrage "jackals" will pounce there - it won't be enough ......
So there you go.
In short - not a theorem.
Rather, it is a modelling of the optimal management of the redistribution of wealth in a planned market economy.
The planned market economy sets its own prices, based on the statistics of supply and demand, or other considerations, for example, if someone calls the State Planning Committee from above.
Here, each market participant offers the arbitrator contracts (like exchange limit orders), where he specifies his prices. The arbitrator does not set his prices - he has no such function. The arbitrator cannot be an arbitrator, i.e. a bureaucrat. This is the libertarian principle where a superior has no right to be autocratic and take decisions for others, but can only solve the problems of those below and only with their consent. The libertarian principle implies that a superior official may act towards his subordinates only on the basis of contractual obligations entered into with his subordinates. If he does not fulfil the terms of the contract, the subordinates can kick the boss out and find someone else.
This was roughly the principle of self-government in Veliky Novgorod, as long as the Veche existed there. That is, the princes there were nominal, and if necessary, they were either conscripted or driven to their necks. All the branches of power in Veliky Novgorod were never transferred to one person. I.e. the prince could only deal with military affairs, the posadnik with secular affairs, the priest with ecclesiastical ones, etc. There was no head of state in Novgorod, or rather head of the republic, and therefore official arbitrariness was kept to a minimum.
A planned market economy sets its own prices, based on gathered statistics on supply and demand or whatever, for example, if someone calls the State Planning Commission from above. Here, each market participant offers the arbitrator contracts (like exchange limit orders), where he sets his prices. The arbitrator does not set his prices - he has no such function. He cannot be an arbitrator, i.e. he cannot be a bureaucrat.
Well, this is not a market economy. All models of a market economy are based on the absence of an arbitrator. The arbiter in a market economy is the market itself.
In addition, in market economy models there is no single centre of information gathering - information about supply and demand is not instantly available to all market participants. Therefore, the choice of each participant is not always optimal.
The most accurate definition is modelling the exchange process with a Puppet. Or a single commercial-type clearing house (it receives profit/commission from transactions). It is already a question of terminology.
Well, this is not a market economy. All models of a market economy are based on the absence of an arbitrator. The arbiter in a market economy is the market itself.
That is the problem, declaratively the market, Adam Smith's so-called "invisible hand", seems to rule, but in reality we get crises on which certain individuals get rich, while the rest of us just squeak in discontent.
The most accurate definition is that you simulate the stock market process with Puppet.
A planned market economy sets its own prices based on collected statistics on supply and demand or other considerations, e.g. if someone calls the State Planning Commission from above.
Here, each market participant offers the arbitrator contracts (like stock exchange limit orders) where they specify their prices. The arbitrator does not set his prices - he has no such function. The arbitrator cannot be an arbitrator, i.e. he cannot be an official. This is the libertarian principle where a superior has no right to be autocratic and take decisions for others, but can only solve the problems of those below and only with their consent. The libertarian principle implies that a superior official may act towards his subordinates only on the basis of contractual obligations entered into with his subordinates. If he fails to fulfil the terms of the contract, subordinates may kick the superior out and find another one.
Such was the principle of self-government in Veliky Novgorod, while there existed Veche. I.e. Princes there were nominal and in case of need they were either conscripted or driven in the neck. All the branches of power in Veliky Novgorod were never transferred to one person. I.e. the prince could only deal with military affairs, the posadnik with secular affairs, the priest with ecclesiastical ones, etc. In Novgorod there was no head of state, or rather head of the republic, and therefore bureaucratic arbitrariness was kept to a minimum.
Planned market economy itself sets the prices on the basis of the collected statistics on supply and demand or any other considerations, for example, if someone calls the GosPlan from above.
That is not the case at all.
Planning was done from the bottom up. it was based on the notion of the "capacity" of an enterprise. It was such a composite indicator. I will not go into it, although it is very useful in a market economy. Let me explain in simplified terms.
Producers submitted a draft plan, from which it was clear how much they were going to produce and what they needed for that. Moreover, if a company produced 100 trousers, then it could not produce 200 trousers in principle: the number of workers (shortage) space, equipment..... All these applications were flocked up and there balanced, called an inter-industry balance. The ideal was if everything that was produced, including products consumed by other enterprises (e.g. coal) was consumed.
This ideal was unbalanced if the government (!) decided that not 100 trousers but 200 should be produced. In order to draw up a new inter-industry balance, employees were called in on weekends, at night, with the result that very often people were buried dead on the job...
Rather like this:
And here, each market participant offers the arbitrator contracts (like stock exchange limit orders), where he states his prices.
Only in a planned economy, planning was done in kind (in trousers) and then the state price committee came in to balance prices so that nothing was left on the shelves.
.............
By the way, Reshetov, a man does not think with his head, but with his whole body, all his cells. The brain (head) only controls this process. Therefore ...........
The brain (head) only thinks it controls the process.
Since many people did not understand the meaning of the theorem, and others could not understand it because they are not competent in mathematics, we had to create a second edition, where the conclusions are presented in a form understandable even to those who are unfamiliar with mathematics.
ConclusionsIn the process of exchanging benefits, both material and spiritual (e.g. gratitude), three different situations may occur:
Altruism, when some part of the participants of the exchange of goods - altruists agree to give more goods in the exchange than to receive in return. In this case the value of the minimax is less than 0.
Rationalism when some part of the exchange participants - rationalists - agree to give as much goods as they get in return. In this case the value of the minimax is 0.
Egoism, when a part of the participants in the exchange of goods - egoists agree to receive more goods than to give in return. In this case, the value of the minimax is greater than 0.
Since, according to the theorem, exchange of goods without coercion is possible only between:
Altruists and altruists.
Altruists and rationalists
Rationalists and rationalists
and impossible without coercion between any market participants and egoists.
Hence, rationalism, has nothing to do with egoism, but is merely the boundary between altruism and egoism.
In view of the above, at a minimum, rationalism and, at a maximum, altruism are necessary and sufficient conditions for reaching consensus on the will of the parties without coercion in terms of satisfying the needs of society for goods, i.e. the freedom to implement the will of the members of society. Egoism is not an attribute of freedom, because in the presence of egoism it is impossible to satisfy the needs for goods between any individual egoist and any other members of society without coercion. To be more precise, it is impossible to satisfy the wills of any single egoist without forcibly violating the wills of any other individual.
Accordingly, only altruists and rationalists represent the free and just, i.e. libertarian part of society.
Moreover, according to the justice theorem, the higher the degree of altruism (the lower the value of the minimax in the payment matrix of the wills of the members of society), the freer and fairer the possibilities for exchange of goods between members of society. For in this case, the participants in the exchange of goods can collectively receive more than they are willing to give.
In connection with the above said, the final conclusion is that egoism is the cause of coercion in society, while coercion against the will of any members of society is the consequence of the realization of egoists' will, expressed in action. Accordingly, for society to become free and just, it is necessary and enough: to reveal egoistic wills of separate individuals (the justice theorem proves that this task is solvable) and to prevent any actions from the side of carriers of egoistic wills, as any realization of an egoistic will will necessarily will lead to a violent coercion against the wills of other members of society.
The text of the second edition is in the attached archive:
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There is only a natural exchange of goods on the market. There are two shoe sellers. One of them is very hungry and agrees to exchange a pair of shoes for one loaf of bread. The other one is full and agrees to exchange a pair of shoes for five loaves of bread (bread is not relevant to him at the moment). There is only one vendor at the market who agrees to exchange a loaf of bread for a pair of shoes.
Is the second shoe seller "selfish"?
The next day there is only a second shoe seller with the same price and one bread seller who agrees to exchange a pair of shoes for five loaves of bread.
Is the second shoe seller a "rationalist" even though his price hasn't changed?
That is to say, whether a person belongs to one of the three categories is not a consequence of his consent or non-consent to the exchange, but of the consent or non-consent of his counterparty to the exchange?
This is not an economic theory, but rather belongs to philosophy
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Since the categorisation of any individual as 'egoist' is a consequence of his interaction with a counterpart, should all interaction between counterparts not be prevented?
And since society lacks a rational mechanism for determining the objective, common and universal value of benefits and therefore there will inevitably be egoist-altruist conflicts because the valuation of benefits is subjective, should not the Arbitrator (Demiurge) consider tearing down such a universe and starting anew?