Non-violable laws of nature in social science are empirically verified by the chronicle financial crises and the theoretical predictions of the Savings and Loan Crisis and the Subprime Woe with the Infinite Spreadsheet (http://123is.com), which is mathematically rigorous and, therefore, non-violable.
Financial crises will continue to occur without the price being stabilized by the Infinite Spreadsheet. The price would be unstable when analyzed by a finite spreadsheet. The equation of Cash Return can be written as
The Finite Spreadsheet Instability predicts that the price, overvaluation, and undervaluation are driven by instability and that financial crises will always occur if not checked by the Infinite Spreadsheet. The spatial dependence based on the supply and demand model is stable without externalities, as described by Gerard Debreu in his book Theory of Value. Thus, a graph depicting the Price vs. the Quantity and a third axis of the price calculated by the Infinite Spreadsheet is a three dimensional saddle.
The coming Age of Social Science will be brought about mainly by three thinkers, who are supported by three other thinkers. The three thinkers are Gerard Debreu, whose book the Theory of Value introduces formally the infinite nature of reality, the founder of post-science Hugh Ching, who introduces the concept of Non-violable Laws of Nature in Social Science as an extension of the Non-violable Laws in Science, and Lotfi Zadeh, who introduces the fuzzy nature of reality and points out that the Laws in social science are fuzzy because of the sacrifice of precision in order to provide sufficiently large range of tolerance in a creation, which needs to survive over all the possibility in an uncertain future. The thinkers, who support these conclusions, are Kenneth Arrow, who supports Debreu, Milton Friedman, who supports Hugh Ching and advocates deregulation or is against man-made laws, as the number of man-made laws in science is exactly zero, and Bulent Corak, a grand niece of the founder of modern Turkey, who points out the coming of the Age of Knowledge, replacing the Age of Religion in the last 2000 years, starting with Non-violable Laws of Nature in Social Science.
[Additional Note on after Social Science: The Age of Life Science with complexity of 500 variables will come after the Age of Social Science with complexity of 50 variables, which is an order of magnitude higher than the complexity of science with 5 variables. Tosiyasu L. Kunii has pointed out that the solution of touch based on Ta-You Wuís jumpulse, a sudden change of force, is the bottleneck in robotics. Chitoor V. Ramamoorthy has admitted that, being partially automated, the current computer science is completely wrong and that Universal Computer Source Code invented by Chien Yi Lee should initiate the replacement of English-like source codes with integer-like source codes. Chingís completely automated Universal Permanent Software needs both technical and economic freedom, where the economic, legal, and political software freedom is advocated by Richard Stallman. Lotfi A. Zadeh and Lee define computer science as the communication between the fuzzy human and the exact computer. After the Age of Life Science will be the Age of Robotics, where all human non-thinking works will be taken over by Self-manufactured General Purpose Robots with the ability of touch or interacting with uncontrolled environments and following by the Age of Self-creation, when the meaning and the purpose of life will be revealed in the design specifications of mankindís self-creation of the living system. Each of the four Ages after Science will occupy about 500 years; post-science is the knowledge for the next 2000 years.]
"It is the responsibility of the government to discover and educate its citizens non-violable laws of nature in both science and social science."
The other parts of the speech are in the following links:
Post-Science Next 2000 Years Part 1 of 7: Discovery of Non-violable Laws of Nature in Social Science
Post-Science Next 2000 Years Part 2 of 7: From Religion to Knowledge
Post-Science Next 2000 Years Part 4 of 7: Good vs. Evil, From Equation of Evil to Equation of Good
Post-Science Next 2000 Years Part 5 of 7: Complete Automation, DNA, and Life
Post-Science Next 2000 Years Part 6 of 7: What It Takes To Move from Science to Post-Science/Financial Crisis
Post-Science Next 2000 Years Part 7 of 7: Acceptance Theory of Knowledge, Demo of Jumpulse Dance
NEW November 1, 2013:
They work based on non-violable laws of nature in social science. Click Here to see a Global Economic Plan Post-science extends the concepts in science into social science and identifies the difference between science and social science. How does science work? Science obeys non-violable laws of nature in science. Similarly, social science obeys the non-violable laws in social science. Post-Science Institute has been invited to give a talk in Turkey on November 1, 2013 (to be voted to be the world peace day) to announce the existence of non-violable laws of nature in social science. A practical example of non-violable laws of nature in social science is at:
The equation PQ = VM describes how to stabilize the economy (roughly represented by PQ) by changing V and/or M. The equation is also known as the Fisher Identity, indicating that it could be considered an identity and, thus, is a non-violable law of nature. The solution of value is based on the problem posed by Kenneth Arrow and Gerard Debreu in Debreuís book Theory of Value and produces a quantitative solution of the price, replacing the qualitative utility. The Infinite Spreadsheet establishes a rigorous mathematical relationship between the price and the rate of return in a time space extending to infinity. The Infinite Spreadsheet is accepted based on mathematical rigor. Post-science economics is beyond science and is based on mathematical rigor, not just empirical verification, which is the rigor of science and is no longer possible when the calculation is taken to infinity in time, such as for the price.
Full employment should be one of the major goals of the economy because full employment will increase both V and M and money is more valuable in the hands of the poor than that of the rich. The incorrectly generated Q with P will not only create inflation, but also cause financial crises, such as the Savings and Loan Crisis and the Subprime Woe, both of which are caused by the incorrect Q with P, namely, the overproduction and the overvaluation of real estates. The correct allocation of resources, such as real estate construction, depends on the determination of the price by the solution of value.
The most important sector of resource allocation is that of the available jobs. As technology progresses, machines gradually take over human labors or employment. Post-science economics proposes a policy of orderly transition to full employment, as the available work for people decreases. The available employment depends on the amount of Q, where P satisfies justifiable rate of return. With 21th century technology, most advanced nations should be able to provide the basic needs of food, clothing, shelter, transportation, and health care for all their citizens. Providing the basic needs for all the citizens can be achieved by full employment through the orderly distribution of the available employment among all the citizens. Full employment can be created by shortening the weekly working hours by regions and sectors. This full-employment policy will reduce economic inequality and eliminate excessive greed.
From a long-term point of view, the reduction of working hour is inevitable when machines gradually take over human labors. Today, most people are working on jobs which will someday be done by robots. As leisure time increases, innovation time will also increase. The full-employment economy might lower the average earning of employees, but will encourage people to be innovators rather than be innovatorsí employees. The net result of switching to a full-employment economy will be an increase in innovations and in the wealth of the nation as a whole because there will be more innovators, who, in turn, will produce more jobs. Market Surveyed Rate of Return for Q: Real Estate: 10% +/- 5%; Small Business: 40% +/- 10%; Real Estate Development: 100% +/- 50%; Stocks: 10% +/- 5% Mars Exploration: 0% +/- 10%.
Three Policies Based On Non-Violable Laws Of Nature To Form A Permanently Stable Economy
Value is defined as the sum total of all the future benefits and losses to infinity in time. To derive the solution of value, which can be either the price or the rate of return on investment, we start from the equation of cash flow.
The equation of cash flow is a realistic accounting of cash flow, which should be acceptable by everyone:
The rigorous mathematical solution to value is to completely satisfy the equation of cash flow.
What we want to calculate is the price. In the above equation, there are two prices, one price and one resale price. Another similar equation can be written for the resale price. The equation for the resale price will introduce another resale price for the resale price. The number of similar cash flow equations of the exactly the same form extends to infinity in time, with an additional resale price introduced with each additional equation. The number of cash flow equation is always one less than the number of the price and the resale prices. The system of cash flow equations is non-deterministic, where the number of equation and the number of prices are not equal.
The additional equation can be obtained by making the assumption of economic stability at the end of the long chain of cash flow equations. The assumption of economic stability implies that the future capitalization rate, which is the net income divided by the price, is a constant. The net income is the annual gross income minus the vacancy and the annual operating expenses. Theoretically, and in practice, the end of the chain can be extended to as far as one wishes to make the assumption acceptable.
In general, the price at the end of the chain of cash flow equations needs to be determined by an iterative calculation by repeatedly assuming different trial prices and calculating the rate of return. The assumed price is the price when the calculated rate of return equals the assigned rate of return. All the inputs to the cash flow equation at the end of the chain are expressed as approximate time-invariant quantities, often either as a percentage of the price or of net income. Being approximately time-invariant, all the inputs are obtained from market comparisons. The price should not be obtained from market comparison because it can be calculated.
When the price at the end of the chain is known, the price prior to the end can be determined with known resale prices in a time reversed fashion.
When the price is given, such as in the stock market, the rate of return can be iterated with a double iterative loop, one for the price and one for the rate of return. The number of iterations for the calculation of the rate of return is roughly the square of the number of iterations for price determination.
Being mathematically rigorous, the solution of value is a non-violable law of nature and the basis of the three policies to establish a permanently stable economy:
1. Use the solution of value by all market participants,
2. Set the interest rate based on the logical order:
Rate of Return > Interest Rate > Inflation Rate
3. Supply the proper amount of money based on the Quantity Theory of
Money: Price x Quantity = Velocity of Circulation of Money x Money Supply (PQ = VM) where the distribution of money should be determined by the rate of return. In a capitalist economy, competition decreases the price. A capitalistic economy cannot survive without innovations, which, accordingly, often have the highest rates of return. One final important point to note is the relationship of the Money Supply M and inflation. Money supplied to increase the Price P without guidance by the rate of return will generally cause inflation. But, innovation can increase the Price P without necessarily causing inflation.
A Practical Application To The Financial Crisis Of 2008
The financial crisis is caused by the incorrect determined price by market participants and the monetary authorities. The cure is to:
1. Determine the correct price so that the price will stop falling at the correct price, not further, and no loan amount should be higher than the correct price.
2. The interest rate should be lowered to below the rate of return, but with the rate of return being negative, the interest rate should be lowered to the lowest possible point, approximately zero.
3. The negative interest can be achieved by bailout money or government contracts, whose priorities are ordered by their rate of return, not necessarily restricted to monetary returns. Social welfare is important because of its high non-monetary rate of return (non-monetary return of the same amount of money is higher for a poor person than a rich person).
The current policy of government finance through selling treasury bonds, in addition to taxation, is a self-imposed financial discipline on government spending and is not a non-violable law of nature. The policy will interfere with the money supply to the economy or the Quantity Theory of Money PQ=VM. Inflation is needed to counter deflation. Inflation can be created by increasing money supply. Money should be supplied as much as needed to create the inflation without being hampered by the concern of the national debt. The US dollar is already an IOU which is backed by the US economy. Selling Treasury bonds should only be for the purpose of reducing the money supply, not for raising funds. Otherwise, the government might interfere with the desired operation of the economy. If the federal government, not the local governments, needs money, it should just print it.
In a free economy constrained only by non-violable laws of nature, money supply should be allowed to increase to achieve the desired goal, such as funding projects with high rates of return to, mainly, increase employment. On the other hand, when there is too much work to be done, machines or robots should be manufactured to increase productivity through automation. Thus, the economy can be permanently stabilized by funding projects with high rate of return during underemployment and building robots or machine during over-employment.
It is important to stress innovation and automation, two real contributors to human progress. Money matters, but the real progress must come from knowledge, which is mainly advanced through innovations or new discoveries and the enhancement in automation. A permanent stable economic system must take into consideration improvement period, meaning innovations, and the construction period, meaning the commercialization.
After Boeing 777 was finished, the workers were fired from this project because the 777 is highly automated. Generally, automation or enhanced productivity, in general, decreases employment. Thus, the amount of money supply to maintain a desired degree of employment must not be influenced by progress in automation. It should be dictated by the equation, PQ=VM, mainly to avoid excessive inflation or deflation. The self-imposed discipline of the national debt accounting might interfere with the equation of PQ=VM and should be discarded, along with the sea shell, silver, gold standards, one-by-one in the past.
As a reality check, by the end of 2008 the US government has done (2) above in reducing the interest rate as low and as rapidly as possible, as recommended by Post-Science Institute. Soon the new Administration will have to face the task of determining the priorities of funding and finding the money to fund. It needs to consider (3) for determining the priority and finding the money. And (1) applying the solution of value is necessary for a permanent solution. ### Hugh Ching, Post-Science Institute, Updated 12-30-2008
From Regulation To Deregulation To Regulation By Non-Violable Laws Of Nature
What could be more important than solving the current financial crisis is changing the economic system in the aftermath of the crisis. Regulated central planning system lasts roughly forty years, and unregulated free market, eighty years, before a complete collapse.
Almost everyone agrees that more regulation is needed after the current crisis. The only remaining question is: "How To Regulate?"
Before going back to the old economic system of regulation by man-made laws, Post-Science Institute, which has predicted the S&L Crisis and the Subprime Woe with its solution of value, would like to propose a new economic system regulated by non-violable laws of nature, such as the solution of value and the quantity theory of value, which can be represented by the equation Price x Quantity = Velocity of Circulation of Money x Money Supply, which is strongly promoted by the late Milton Friedman. The new economic system can well be called the Post-Friedman Economics putting the development of economic systems in the proper historical and knowledge perspective.
The current financial crisis is caused by incorrect prices determined by uninformed market participants. Thus, the solution of value for determining the correct price is at the heart of the problem and the cure of most financial crises. The correct solution of value must be used by all market participants, including the government, in order to have a correct market price.
Being completely mathematically rigorous, the post-science solution of value is a non-violable law of nature in social science, as gravitation is a non-violable law of nature in science. After the verification of its mathematical rigor, the solution of value should be used by all market participants so that the market price will always be correct.
The difficulty of the popular acceptance of the solution value lies in its involvement of infinity. Value is defined as the sum total of benefits and losses to infinity in time. Infinity, according to the author of the book "Theory Of Value" Gerard Debreu, can only be handled with mathematics.
Most people, especially, politicians and their watchdogs, reporters, would prefer to avoid mathematics. However, reality is infinite in time and space. The financial crisis offers an opportunity for the world to advance from the current Age of Science to the Age of Post-Science, where exists relevant knowledge of non-violable laws of nature in social science, such as value, and of the fundamental requirement in life and computer science, namely, complete automation. ### Hugh Ching, Post-Science Institute, Updated 1/2/2009
JOB OBJECTIVE Teaching and/or Research in Post-Science
B.S. (Electrical Engineering) Massachusetts Institute of Technology E-M Field Theory
M.S. (Nuclear Engineering) Massachusetts Institute of Technology Fusion Economics
Sc.D. (Nuclear Engineering) Massachusetts Institute of Technology Plasma Kinetic Theory
Post-Doctoral Research Courant Institute of Mathematical Sciences Monetary Economics
2005 - Present Co-authoring with Dr. T. L. Kunii and Prof. C. V. Ramamoorthy on the book Knowledge at Complete Automation Laboratory (CAL): http://www.lulu.com/ching
1990 - Present President and Founder, Post-Science Institute, dealing with knowledge beyond science Permanent Software: Complete Automated Software (Patent No. 5,485,601)
Infinite Spreadsheet: Solution to Price (Patent No. 6,078,901 Issued June 20, 2000)
Robot Touch: Explanation of touch and ball control using the concept of jumpulse
(Jumpulse, a word coined by Ta-You Wu, is a sudden change of force, as impulse is a sudden change of momentum); no one detected this problem for three-hundred-years ! President and Founder, Infinite Spreadsheet Institute and Permanent Numbers, a $Trillion Business Plan based on Permanent Software, charging $1.00 for each number President and Founder, World-Wide Institute Of Valuation; Computer Newspaper
1987 - 1989 Columnist, "Chinese Student Voice"; Director/ Producer, TV show "The Art of Eating" Director of Ming's Villa in Palo Alto, California (Rescued it from near bankruptcy)
Prior to 1987 Partner, Homefinders Bulletin - First commercially successful Computer Newspaper reached Inc. 500 (responsible for the bankruptcy of 30 years old local newspaper Berkeley Gazette by taking away its classified ad section with a sliding pricing system) Contractor, Atomic Energy Commission; Visiting Associate Professor, National Tsing Hua University, ROC; Scientist, Courant Institute of Mathematical Sciences, NYU Research and Teaching Assistant, Massachusetts Institute of Technology
Who's Who (Asian Americans, American Inventors, etc.); Investment Teacher (self-supported all research)
1. Generalized Fluid Description: Df/Dt = Sources, where f is a function of all the spatial derivatives of time from the first (distance) to infinity. It provides a theoretical foundation for plasma physics to replace the correct but not usable Plasma Kinetic Theory and the usable but incorrect Magneto-Fluid Dynamics.
2. Table Tennis, Scientific Analysis - Book explaining ball control, the secret of consistency in sports, (The author is a two-times table-tennis champion at MIT). Robot fingers will bounce off a surface when they try to grasp an object (much like the ball bounces off a racket). Thus, jumpulse is the solution to robot grasping and walking, airplane landing, and bounceless shock absorbers. Force is defined by Newton as a push or pull, but when two objects come into contact, they generally bounce off each other
3. "Quantitative Supply And Demand Model Based On Infinite Spreadsheet" (Pat. No. 6,078,901) - Patented software for price prediction; predicted the US Savings and Loan Crisis
4. "Completely Automated And Self-generating Software System" - Patent (Pat. No. 5,485,601) putting computer and life sciences on a same foundation; expanding job market by lowering technical barriers; establishment of Permanent Software standards to replace all the current temporary software standards
5. Knowledge - Book co-authored with Dr. T. L. Kunii and Dr. C. V. Ramamoorthy based on the solutions of touch, value and complete automation, 2006.
For more information on post-science, please click here.
Post-Science welcomes 2008.
Please contact Post-Science Institute by email: chien_yi_lee(at)universalcomputersourcecode.com.