Interconnectedness
The New Scientific Enlightenment
There is a massive paradigm shift occurring: beliefs about the nature of scientific inquiry that have held for hundreds of years are being questioned.
As laypeople, we see the symptoms all around us: climatology, economics, medicine, even fundamental physics; these domains (and more) have all become battlegrounds with mounting armies of Ph.D.s and Nobel Prize winners entrenching in opposing camps. Here’s what’s at stake:
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Scientific Objectivity
In 1972 Kahneman and Tversky launched the study into human cognitive bias, which later won Kahneman the Nobel. Even a cursory reading of this now vast literature should make each and every logically-minded scientist very skeptical of their own work.
A few scientists do take bias seriously (c.f. Overcoming Bias and Less Wrong). Yet, nearly 40 years later, it might be fair to say that its impact on science as a whole has been limited to improving clinical trials and spawning behavioral economics.
In 2008, Farhad Manjoo poignantly illustrates …
The Pattern
The wind was flapping a temple flag. Two monks were arguing about it. One said the flag was moving; the other said the wind was moving. Arguing back and forth they could come to no agreement. The Sixth Patriarch said, “It is neither the wind nor the flag that is moving. It is your mind that is moving.” — Zen Koan
“The belief in an external world independent of the perceiving subject is the basis of all natural science.” — Albert Einstein
Does a whirlpool exist in the same way that a rock exists or that energy from the sun exists? For something to exist it either has to have always existed, or there must have been a time prior to its existence. Leaving for a moment the possibility that everything which exists today has always existed, let’s consider that it came into being at some point.
If something came into being, then not only must there have been a point in time prior to …
Entanglement
Daniel asks, Does the Mind Influence Physical Processes?
Proof: our mind sets out to modify our environment in particular ways (i.e. set goals); then we act in ways consistent with that intention; more often than chance, our environment changes in those intended ways (i.e. goals are achieved).
This is a form of entanglement — spooky action at a distance — between our minds and the environment (which includes other minds), but we usually dismiss this as trivial, not very spooky. On the other hand, we know that quantum entanglement exists and it seems spooky to us because we have no mechanism to explain it.
We also observe that there are quantum effects in the basic architecture of the brain (nanotubules) and wonder if these are somehow the “ghost in the machine” of consciousness. But this could be just a red herring. Perhaps quantum effects matter to consciousness, perhaps they don’t. Still quantum effects are part of the human experience in some sense — and so …
Troubling Statistics
In his eloquent article, Breaking the Galilean Spell (worth reading in its entirety), Stuart Kauffman has given me the words to finally be able to articulate the uneasiness I feel about statistical reasoning in an increasingly interconnected world:
…[Can] we make probability statements about the evolution of the biosphere? No. Consider flipping a coin 10,000 times. It will come up heads about 5,000 times with a binomial distribution. But, critically, note that we knew beforehand all the possible outcomes, all heads, all tails, all 2 to the 10,000 possibilities. Thus we knew what statisticians call “the sample space” of the process, so could construct a probability measure.
Can we construct a probability measure for the evolution of the biosphere into its Adjacent Possible? No. We do not know the sample space!
I won’t belabor the point except to say that I view the increasing irrelevance and danger of statistical reasoning as the essential argument of The Black Swan, the fundamental reason why the …
The Adjacent Possible
Stuart Kauffman has a concept called the Adjacent Possible which I find incredibly useful in understanding the world. Simply put, if you think of the space of possibilities from the present moment forward and just concentrate on those that are achievable today — adjacent to the present moment — that’s the Adjacent Possible.
What’s interesting about possibility-space is that tomorrow’s Adjacent Possible depends on the actions and choices we make today; it’s not symmetric and it’s nonlinear. Certain actions generate more future possibilities than others. In my experience, those actions tend to be the cooperative ones, ones that produce network effects: financial, social and otherwise.
Due to our evolutionary heritage, having come from a resource-constrained world, we may be predisposed to see the more competitive actions which tend to shrink the Adjacent Possible. Whether or not this is a bias or an actual state of affairs, much of our thinking is based on scarcity, so we are drawn to actions that become self-limiting.
Here’s …
The Process
Imagine a multiverse, infinitely infinite. There’s just infinity. Or if you prefer, nothing. There’s no space, no time, no matter, no energy. There’s no structure whatsoever, and nothing “in” any of the universes that make up the multiverse. it’s not even clear whether these individual universes are separate from one another or the same. But since our minds seem finite and we have to start somewhere, let’s imagine them as separate: an infinite collection of universes with nothing in them, no dimension, and no relationship between them.
Now lets assume there is some process for picking out universes from the multiverse. Since there’s no time in the multiverse, the process has no beginning and no end. It’s like a computer program, but it’s infinitely complex. Let’s call it The Process.
If The Process is infinitely complex and has no beginning and no end, what can we know about it? We know that it picks some universes but not others, which effectively creates an “in …
Name That Financial Debacle!
The following quotes are from a book describing a real set of events:
[The incident] is an extraordinary example of what happens when you get… a dozen people with an average IQ of 160… working in a field in which they collectively have 250 years of experience… employing a ton of leverage.
It’s hard to overstate the significance of a [government-led] rescues of a private [corporation]. If a [company], however large was too big to fail, then what large [company] would ever be allowed to collapse? The government risked becoming the margin of safety. No serious consequences had come about in the end from the… near-meltdown.
Was the incident:
a) The savings and loan scandal
b) The collapse of Enron
c) The sub-prime mortgage meltdown
d) none of the above
First correct answer gets to invest in an exciting new bridge project I’m involved with in New York!…
Alfred Hubler on Stabilizing CAS
With his permission, I am posting an email thread between myself and Alfred Hubler. I had contacted him on the recommendation of John Miller when Kevin and I were posting on the possibility of dampening boom-bust cycles in the financial markets through policy or other mechanisms. Here’s what Hubler had to say:…
The Vanguard of Science: Bonnie Bassler
The import of this talk goes way beyond the specific and stunning work that Bassler and her team have done on quorum sensing. In my mind, this is the prototype for good biological science:…
Another Must Read on the Origins of the Crisis
Steven Gjerstad and Vernon Smith have published a really nice article that starts out with bubbles in general and goes on to explain why the bursting of this particular bubble hurt the economy so much. It echoes a lot of themes that I’ve covered before, but is obviously much more soundly though out.
The short version is that the effect of a bubble on the economy is determined by its effect on consumer spending. The Dot Com Bubble didn’t have much of an effect because it primarily affected institutions and already relatively wealthy consumers. However, the Fed’s attempt to shorten the resulting recession created a loose monetary policy which forced dollars into the most attractive asset class: homes. This attractiveness stemmed from relaxed lending standards and tax-free capital gains on homes, which created more buyers. But asset appreciation in this class is fundamentally limited by the ability of consumers to repay loans from income, which was not growing fast enough. As the institutions insuring mortgages …
Too Big to Fail = Too Big to Exist?
I asked this question on twitter/facebook and got a lot of variants of “I agree” and only one person who stated disagreement (but provided inadequate reason, IMO). Jay Greenspan put it this way:
Interesting question this morning, and something I’ve been wondering about. I’ve yet to see anyone really argue that state of non-regulation we’ve been in for the last years has been a good idea. I’ve heard some thoughtful conservatives talk about how their views have changed radically — coming to understand that forceful regulation is absolutely necessary.
The super-conservatives I’ve seen are talking more about taxes, avoiding the subject. I’d be very interested to see a credible argument for a hands-off approach.
So how about it, anyone game to take up a considered argument for not mandating that companies who get big enough to affect the global economy should be broken up or otherwise handicapped?…
Best Reader Comment Award
I’m giving my “2009 Q1 award for most concise, lucid comment” to Paul Phillips for this gem:
…Autocatalysis, Blog Comment, Economics, Incentives, Interconnectedness, Markets, Non-linearity, Stability Autocatalysis, Blog Comment, Economics, Incentives, Interconnectedness, Markets, Non-linearity, Stability, 1