Monday, December 29, 2008

Damn you Taleb

Bearing in mind Nassim Nicholas Taleb's admonitions to stop reading newspapers, I have been making an effort to avoid doing so.

The problem is I am finding it extremely difficult. I can just about avoid watching TV, but I spend so much time online it become difficult to avoid looking at newssites. Even worse (when I do) reading articles like this:

Churnalism and all other forms of sponsored or assisted reporting are deplorably remote from Steer's ideal of the reporter as author of history's first draft. They are really little more than sordid compromises which famous newspapers and broadcasters feel forced to make in a plummeting market.

I believe that one day and somehow web-based news outlets will find a way to finance expensive, agenda-setting journalism. But that is a faith-based position, not an entirely rational one. The website does not yet exist that can afford to send correspondents on speculative foreign missions or to fund expensive long-term investigations.

As yet, despite the brilliance of sites such as this one, the best online journalism remains dependent on revenues earned by its paper and broadcast parents and upon journalists employed and paid primarily by old media outlets.

The problem with this is that I simply don't even buy newspapers. On the other hand I don't buy blogs, and there are some excellent weblogs that are completely free (The Yorkshire Ranter, Charlie's Diary, Stumbling and Mumbling etc).

The problem with blogs is that for every reasonable blog there are thousands of unreasonable ones. If people don't like what one blog says they can just go and find one that says stuff they like - I'm probably guilty of this myself in my blog selection.

This leads to what the one of the guests on Andrew Marr's Start the Week (in which he recaps some of the more profound biotechnological and computational stories of the past year) describes as counter knowledge.

Perhaps I should just go cold-turkey on all forms of media, including blogs and newspapers, TV news and so forth?

The problem is if I did that I wouldn't know what to think! I need to know more before I can make reasonable judgements, and the only way I can find out more is if I read more, and the only way I can read more educational stuff is if I read books (including textbooks).

One of the comments on this blog post on Overcoming Bias (another excellent blog) puts it rather well: the "opportunity cost" of reading newspapers is very high.

Thursday, December 25, 2008

Validation in graphs

Confirming what I always suspected:



{{{"You're reading The Economist??? --- it's Christmas etc!}}}

[from the Economist]

Sunday, December 21, 2008

Knowledge and newspapers

After thinking about my previous post further I've realised that newspapers are fairly entertaining. They also help fulfil the basic human need for gossip and discussion, which is good.

The problem is they just provide you with information, no deep knowledge. I read loads of newspapers and news websites every day and I know what's happening, but (to quote Elliot Carver) I don't know "why" things are happening.

I don't know enough about the world to come to analyse what happens independently of journalistic blowhards, disingenuous politicians, lawyers, scientists, and experts of every stripe.

Chris Dillow (a journalist who has written this book, and can therefore be considered an agent of deep knowledge) says of opinion:

Opinion is over-rated. Sure, I like a neat turn of phrase or a new perspective. On a good day I even like the occasional fact. But mere opinions are like arseholes - everyone's got one, and I don't want to hear any of them.


Because I possess relatively little deep knowledge it would be a good idea for me to go somewhere and read lots of books about a wide variety of important things (economics, management, accountancy, psychology, engineering, physics, maths, electronics, computer science, literature, philosophy, politics etc) and get "up to speed" on Life, the Universe, and Everything and then I'll be able to make my own judgements.

I also think that "not reading the daily newspapers" would be a good New Years Resolution, particularly bearing in mind (the opinion of) Thomas Jefferson:

Avertisements contain the only truths to be relied on in a newspaper.

...

I do not take a single newspaper, nor read one a month, and I feel myself infinitely the happier for it.

...

The man who reads nothing at all is better educated than the man who reads nothing but newspapers.
Quite right. An opinion, of course, but still.

So I guess I'll be reapplying to university...

Update:

Edited on the 27th of December, links and quotes added.

Monday, December 15, 2008

Black swans and newspapers

Currently reading The Black Swan by Nassim Nicholas Taleb. Pretty good. One personal point hits home though: why the hell do I read so many newspapers? Why does anyone?

The stock answer is "to be informed" - which is a bunch of bull. Not only does Taleb show how reading newspapers actually makes you less knowledgeable about what goes on in the world he also points out that newspapers are so full of misery and negativity there is little value in them even as a form of entertainment.

Much better to read a good book - which I'm just off to do right now.

Thoughts on "The Black Swan"

Having read "The Black Swan" by Nassim Nicholas Taleb (his website is here) I have come to a few conclusions:

  1. I spend too much time reading newspapers and on trivial and timewasting exercising (writing this blog post does not qualify as it counts as practice in writing and helps me organise my thoughts).
  2. Much of what I believe about the world isn't based on any kind of objective reality, but rather a collection of superstitions, cognitive biases[link], and predjudices.
  3. In certain non-empirical fields there is little value in deferring to experts if your intention is to accomplish something (like building a bridge, or making money).
  4. The value in the "free market" has less to do with competition and more to do with the resultant levels of "stochastic tinkering" that have the potential to lead to hugely influential but unpredicted developments.

The Book Itself

Taleb is arrogant, irreverent and amusing - all qualities I value in anyone. He writes engagingly, occasionally dipping into anecdote (for illustrative purposes, not necessarily to support his argument).

The Black Swan

A Black Swan is an unpredicted event that has a huge impact. Human beings tend to ignore Black Swan events when making decisions about the future, despite the fact that Black Swans tend to have an overwhelming effect in history, science, business, finance, and individual lives.

Black Swan events are outliers, they have an extreme impact, and third human nature has the tendency to attempt to "explain" the Black Swan after the fact, making it seem predictable and obvious.

Extremistan and Mediocristan

Taleb defines two areas of human experience: in Mediocristan things tend to behave in a fairly orderly and predictable manner. The distributions of height in a large population, for example, remain relatively close to a normal Gaussian bell curve even if you were to add the world's tallest man to the population - because he is not 3 kilometres tall he does not effect the overall distribution.

In Extremistan, on the other hand, outliers have a disproportionately large effect. The distributions of personal net worth in a large population, for example, will be completely thrown out of whack if you add Bill Gates to the population.

Power Laws and Guassian Bell Curves

In Extremistan, power laws (Pareto's Principle, Zipf's Law) and fractal relationships are the norm. In Mediocristan Guassian bell curves are the norm.

Taleb believes the bell curve is misused in it's application in investing (I wasn't aware the bell curve was used extensively in finance).

Scalable and Non-Scalable Professions

Inequality tends to follow a power law. The richest 1% own 50% of all assets, whereas the poorest 10% own substantially less than 10% of all assets.

With regard to income some professions lend themselves to black swans and power laws, and others don't. Medical doctors and priests will tend to earn roughly a certain amount, which will fall somewhere on the bell curve of income for that particular profession.

Writers, venture capitalists, entrepreneurs, and scientists, on the other hand, all occupy extremistan, or black swan territory. Some writers (like J.K. Rowling or Terry Pratchet) earn collossal amounts of money per hour worked whereas the vast majority will struggle to earn anything.

Empiricism and the Problem of Induction

How do we know that what happens in the past will continue to happen in the future? Taleb likes empirical philosophers like Francis Bacon and Karl Popper, and Sextus the Empirical. In trying to find knowledge about the world it is better to prove conclusively that something doesn't work than that it does - in fact you can't prove that something always works.

Knowledge, therefore, emerges from negatives. Disproving something adds to knowledge.

Platonism and Theories

Taleb rails against creating a theory and then selecting evidence to fit the theory. He dislikes the application of game theory to economics, and portfolio theory to investment. He describes the mistake of focusing on elegant, tractable mathematics at the expense of empirical knowledge as platonicity, and any knowledge divined from such abstract mathematical theorising is "nerd knowledge."

Cognitive Bias and the Narrative Fallacy

Correlation does not equal causation. Post hoc ergo propter hoc.

Terry Pratchett and Taleb

Pratchett comments extensively on the human desire to create stories (the Discworld is a world that runs on narrative, rather than physical laws) and on the fact that million-to-one chances occure nine times out of ten.

Also Pratchett's uber-politician Lord Vetinari is the embodiment of the knowledge that in an unpredictable world what people really, really want is for tomorrow to be pretty much the same as today.

Arthur Koestler and Taleb

Skimming through The Sleepwalkers by Arthur Koestler (which I have read) I can see many parallels between Taleb's dislike of platonism and Koestler's similar criticism of excessive theorising in physics.

Taleb refers to Koestler's book in The Black Swan in the context of the inadvertant nature of much scientific discovery.

Koestler was also intensely critical of the dogmatic nature of theoretical physics (as he perceived it). Koestler's problem was that, unlike classical physics, quantum electrodynamics involved fields and quanta that could be one or the other or something else, depending on your perspective. I personally think the problem is more to do with the fact that QED is counter-intuitive. We humans have evolved in a quasi-classical environment and just aren't set up for thinking in terms of the quantum environment of the very small.

Hayek and Stochastic Tinkering

Taleb believes the value in free markets lies in their ability to generate new idea in a process of stochastic tinkering. This apparently is what Hayek thought.

Taleb is also a fan of Francis Bacon and Karl Popper. Does not like Platonism - mistaking the map for the territory and overextending the use of models.

Whither singularity?

Both Kurzweil and Taleb are obsessed with the fact that humans tend to have an "intuitive-linear perspective."

Taleb doesn't comment on the singularity directly. He does refer to the importance of power laws and such.

Conclusions

There is a lot of food for thought in this book, and I intend to read a lot more about the various topics that Taleb raises.

As ever at this stage in my education any new knowledge raises more questions and than it answers.

However as Taleb's central point is that the world is in many ways fundamentally unknowable and unpredictable perhaps this is a good thing.

The objective of learning is not simply to know a load of facts, but rather to become comfortable with the limits of your understanding. To transform unknown unknowns into known unknowns and to cope as best you can with those things that remain unknown unknowns.

Wednesday, December 10, 2008

The perfect job?

Jason Stoddard writes of the difficulties of being a science fiction writer in 2008 [via Futurismic] and describes what sounds to me to be pretty much my ideal job:

To write fully believable, near future science fiction today, you almost need to be voracious antisocial polymath, deeply conversant in half a dozen technical fields, as well as familiar with ongoing social, economic, and environmental change.

...

And that’s the burden of the modern science fiction writer. If you want to write believable near-future fiction, you can’t choose a single point of advancement. You need to have a good understanding of advances in many different fields, and you need to be able to imagine how these can come together, for good or for bad. And to be really believable, you’ll need to know more than you ever wanted to know about how the world works, economically and socially, as well as where the trends are heading.

This is actually pretty close to being my ideal career - a sort of polymath technocrat who spends half his time researching and half his time writing stories. Jeremiah Tolbert disagrees [again via Futurismic], saying that:

I take exception to is the notion that you need to be deeply conversant in anything. I think you just need to do research to the point where what you have to say doesn’t break the suspension of disbelief and I think that’s a long ways from being a polymath. You don’t need to be an expert on anything but people.

Well I agree with this as well. I wouldn't be adverse to doing the whole bleached-skin, eccentric-reclusive paranoiac thing (like Neo in the first Matrix movie or the oil rig dude in The Star Fraction) but I would like to get out sometime.

Saturday, December 06, 2008

Discussion of ethics, capitalism, the environment, and what I should do with my life

I have been reading The Business by Iain Banks. It is an engaging read, despite the treacle-slow plot, and has plenty of the kind of feats of imagination that I like about Banks’ writing.

The main protagonist is a mid-to-high-level manager in “the business” – a generation-spanning organisation that supposedly bought the Roman Empire (but only for 66 days), owns several sets of crown jewels, and is as ubiquitous as it is unnoticed.

The internal set-up of the business is explored in some detail; it is vehemently rationalist, secular, meritocratic, and organised to avoid corruption, nepotism, and dynasty-building as these things are seen to get in the way of effective money-making.

As ever Banks’ imagination and prose add a great deal to the story, and his politics shines through as clearly as usual. Several pages are given over to debates about inequality, opportunity, capitalism, and the pros and cons of free markets and the state.

I am currently at 312/392 pages. I don’t know if there will be a twist at the end or not, but the book has already given me food for thought on a subject that has been worrying me for some time now.

I am currently 19 years old and in the very fortunate position of being able to choose how, where, and in what manner I wish to live my life. This is not a choice most people are offered. As such, I have been vacillating over the appropriate direction to take. Do I want to dedicate my life to the service of some greater good, or do I want to pursue my own aims and personal ambitions?

Reading A.C. Grayling’s The Choice of Hercules: Pleasure, Duty, and the Good Life in the 21st Century has helped a little. In the book Grayling argues that the idea that we have to choose whether to devote our lives to vice or virtue is a false one. At the same time H.J. Blackham’s Humanism suggests that I have a responsibility to myself, and a responsibility to everyone else by virtue of our common experience of humanity. Balancing the two is addressed by Grayling quite well in his book.

In any case the real cause of my concern over what path to take stems from the ideas explored in The Business. Is acquisitiveness good? Is greed good? Is it better to seek to grow and expand your wealth or persue other interests entirely?

Quite often this argument is subsumed by other arguments about capitalism vs. socialism; of free markets vs. state control; traditional morality vs. human nature; and arguments over the best way to raise people out of poverty and end tyranny and bloodshed.

These kind of political, economic and social arguments devolve to deciding whether or not our current system of liberal democratic capitalism (as typified by the USA, Japan, and the EU) is the best resource/scarcity-allocating system.

The definition of “best” is open for debate as well. Anyone asking for my beliefs on what is best should read the Universal Declaration of Human Rights, then read up on utilitarian philosophy and the golden rule. For the purposes of the rest of this essay I will assume “best” means that all resources are allocated in a manner which leads to an ending of human poverty ASAP, an ending to war, and provision for ensuring sustainable use of finite resources (read: avoiding anthropogenic climate change, preserving and enhancing biodiversity, repairing some of the damage we have already done to the environment and ensuring that in the long run human activity has a neutral effect on the environment).

This is a tall order for any prospective resource-allocation system, but I am confident it can be accomplished. The best book I’ve read on the subject of ensuring continuing and growing prosperity for all whilst maintaining the environment is The Meaning of the 21st Century: A Vital Blueprint for Ensuring Our Future by James Martin. In the book Martin argues for something called “eco-affluence.” Martin believes that with a combination of freer markets, more education (especially for women), and advanced technologies (most notably extensive use of genetic engineering, nuclear power, and hydroponics) we will be able to simultaneously solve our environmental and humanitarian problems. He makes an excellent case for the fact that they are one and the same problem, and that attempting to solve one whilst disregarding the other will end up exacerbating both.

From an objective perspective it is clear that if a better resource/scarcity-allocating system than liberal democratic capitalism ever emerged then we should immediately adopt it. Some might point to China’s model of state capitalism as an alternative solution, but they miss the point that what matters is quality of life. Most evidence suggests dictatorships are simply institutionally incapable of behaving in a benign manner.

Can you do good simply by aiming to become rich? You create jobs, you increase public tax revenues and hence the amount of money spent on welfare, hospitals, schools, etc. If you do it properly you create an environmentally sustainable business that provides people with a good service. You will probably have a lot of fun once you acquire wealth and then you can give it all away before you die.

There are a couple of ways of looking at problems in the world. One argument would be to say that the problem is corporatism. Whenever the needs and desires of an abstract collective are put above the needs and desires of individuals you get problems. An example that springs to mind is that of environmentalism. Environmentalists have an unfortunate habit of treating people as “the problem” rather than the only reason it is worth solving the problem.

In The Business “the Business” is a mechanism for allowing the flourishing of individuals – or is it a controlling corporate regime?

John Marnard Keynes, the economist whose theories of fiscal stimulus are currently being implemented by our politicians saw capitalism as a means to an end, a multi-generational project for creating wealth, growth, and technological innovation. His concept of capitalism was that it is a necessary evil; a mechanism for creating a greater good.
In his essay The Economic Possibilities of Our Grandchildren Keynes writes that:

The strenuous purposeful money-makers may carry all of us along with them into the lap of economic abundance. But it will be those peoples, who can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes.
It could be said that Keynes is too utopian – and that he doesn’t realise that humanity is inherently acquisitive and irrational. Maybe markets emerge naturally in all human societies?

To return to Iain Banks – A Few Notes on the Culture is well worth reading on the subject of what (I hope) a post-scarcity civilisation looks like.

And also (via Ken MacLeod) this libertarian commentary on the idea of "success" from Brian Micklethwait.

And finally, because this is a blog after all, what about me? What should I do? Start a business? Go study bioinformatics? Go study economics? Go study systems engineering? Write novels?