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Posts Tagged ‘complexity’

Human beings, viewed as behaving systems, are quite simple. The apparent complexity of our behavior over time is largely a reflection of the complexity of the environment in which we find ourselves.

Herbert Simon

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Now here’s a MEATY discussion on Edge.org about the role scientists should play in helping improve the economic conditions.  Chew on this awhile.

Here’s one of my favorite chunks of the discussion lifted from George Dyson’s comments:

Brown, Kauffman, Palmrose, and Smolin have hit the nail on the head. But is it the right nail? When the patient needs first aid, do you ask “is there a modeler in the house?”

Financial systems exhibit the Gödelian incompleteness characteristic of all (sufficiently powerful) formal systems: within the given system it is possible to construct statements (or financial instruments) whose value appears to be sound, but cannot be proved within the system itself. The same limitations apply to models of financial systems.

There is good news and bad news in this. No financial system (or model of such a system) can ever be completely secure and closed. On the other hand, there is no limit to the level of concepts that an economy (or a model of that economy) is able to comprehend.

So, what should we do? Assigning an international team of experts to formulate a global economic model is a worthy undertaking, but can the rest of us afford to hold our breath and wait? We also need Plan B, just in case. Plan B is to nurture new, grassroots economic systems that directly (and honestly) couple the flow of currencies to the flow of goods, services, and information—down to the last bit, and the last dollar, from the bottom up.

“Ten years ago I started a company based on the assumption that people are basically good,” argued E-Bay founder Pierre Omidyar (at the Santa Fe Institute) in 2004. “And now I have the data to prove it.” Instead of putting a dozen scientists in a room to come up with a better model of the existing global financial system, we should put a dozen Pierre Omidyars, Elon Musks, Salar Kamangars, and Jeff Bezoses in a room (with Danny Hillis) and let them actually build one (a new financial system, not another model).

Why is this my favorite?  He seems to be saying, get on with it.  Rather than endlessy try to model things you can’t model, start creating.  I’m not a huge fan of the Omidyar quote, as it’s not an accurate nor useful statement.  However, the idea that we can generate all sorts of new ways to buy, sell, create and generate things/services people want is right. We do it all the time and we need to do even more of it.  It’s about the do.

There’s also a fallacy brought up many times by the various contributors that science and modeling can somehow FIX this.  It can’t.  It helps us explain and make sense of things, but that doesn’t imply control.

Also worth noting is seeing how scientists attack a “real life” problem.  Are they shrinking back from the tough stuff or being realistic in what science and scientific approaches can contribute?

Eric Weinstein answers that question:

To be clear, the world’s markets are going to be analyzed, modeled, and regulated by panels of “experts”. That is not at issue. What is at issue is whether the scientific community has the moral luxury, as some commenters here heartily recommend, to sit this one out and complain from the sidelines when most of the skills needed to debunk seemingly sophisticated failed market theory are scientific in origin. But to believe in one’s own ability to improve a theory and make contributions across disciplines require taking serious risk and I well understand that some may find such risk frightening. I would be happy enough for those who feel sure they have nothing to contribute to avoid such an undertaking.

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We know that behavior is not simple but there are simple behavioral components that keep getting ignored. Relative to what we all experience in life like conflicts in the Dan Ariely remarks below and in a previous blog on this site.… we recognize his statements on habits, good and bad, etc.  Yet there is a second component that comes to be more easily considered as well.  Follow along…

Dan Ariely: ….(on the October Bailout, politicians, Wall Street, etc.)

The second thing is that nothing has changed much in the short term living of people. In some sense, this is smaller than the effect of the increasing gas prices.

Greer: Yeah.

Ariely: What is happening? Basically the thing is we are creatures of habit, if you think about it. The best predictor of what we will do tomorrow is what we did today. That is it. Habits are good and bad. They are good because they help us save energy. We don’t have to think about it. We don’t have to contemplate every cup of coffee if it is worth it or not. As a consequence, we get into habits.

When we lose 50 or 500 interactive habits all at once via an earthquake, hurricane, family death, financial threats, loneliness, fall from grace, rejection…etc. (you get the idea) we have nothing to replace those ‘habits’ that are the products of conditioning shaped by consequences over years. We don’t have any behavior to replace those lost dynamic relationships with… literally!. We have to figure it out all over again. Sometimes it is too much to handle.

Take the following stories bunched together from Associated Press just today…10/7/08

Tuesday, October 7th 2008, 11:31 AM

AP/The Courier-Journal

LOUISVILLE, Ky. – A deputy coroner confirmed Tuesday that Hope Orwick stabbed her two children to death and then shot herself.

Deputy Jefferson County Coroner Bob Jones said Emily Orwick, 9, and Lindsey Orwick, 8, were stabbed multiple times, though he could not say how many. He said Hope Orwick, 35, shot herself in the head.

RELATED: FATHER KILLS SELF, FAMILY IN MURDER-SUICIDE DRIVEN BY FINANCIAL PROBLEMS

Louisville Metro Police spokeswoman Alicia Smiley said a family member stopped by the house just before 7:30 p.m. EDT Monday and found the bodies.

Jones said he hasn’t been able to pinpoint when the girls died, and police were trying to determine a motive for the killings.

Crisis counselors will be available at the girls’ elementary school Wednesday, said Jefferson County Public Schools spokeswoman Lauren Roberts, who would not say which school they attended. Public schools in Louisville were closed Tuesday for parent-teacher conferences.

RELATED: MOM KEPT DAUGHTERS’ REMAINS IN THE FREEZER

Along the quiet, well-kept southwest Jefferson County street where the family lived, children played in their yards Tuesday. All was quiet at the family’s modest, ranch-style house, where there were no signs of activity.

Two chaplains were at the scene Monday night, and Smiley said 15 or so family members gathered there. Police talked to relatives to see if they could help explain what may have led to the deaths.

Neighbor Mechelle Rockey, 48, told The Courier-Journal that she has lived across the street from the family for about six months. She said the two girls often played outside.

Contingencies around us control our behavior. We give them other ‘causes’ but as you can see it is contingencies that have all the power, be you the Pope, the President or the paparazzi… all the people above lost what they saw as options on what to do. Ariely and the others represent the loss (of behavior) on how to cope, what strategies to use, what methods to embrace, etc. They lost their behavior.

What contingencies control your behavior and generates your ‘habits’ that define who you are and what you’d do in your crisis?

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The news is a maniacal scramble to make sense of the current financial situation around the world.

Predictions, ____ expert from _____ investment research firm, advice, soothsaying, modeling, bear vs. bull, Fed should do this, Fed shouldn’t do this…. and so on.

A truth I got comfortable with a long time ago but had reinforced over the last three weeks in my life.

Your model can only be as predictive as the thing you are modeling.

– Jason Cawley, Wolfram Research (and probably others…)

That’s a stupid statement, right? Duh.  I know that.

Really think about it though.  and then consider these things and your interpretation of them

  • weather forecasts
  • endless dow jones index reports
  • Political polls
  • compatibility tests in online dating
  • SAT scores
  • TSA profiling at airports
  • Annual budgeting for businesses
  • Or go through the latest in the news

All of these “indicators” attempt to predict complex systems/situations.  Those systems have to show some stability, some simplicity to ever give way to useful prediction (useful = do you get info you can use elsewhere and with enough time/energy to use it).

There is potential to get some local or short term prediction due to local or short term stability.  However, to effectively use that over time you need to be able to predict when that stability yields to a new pattern. That is where it gets difficult.

Yes, you can aggregate a lot of these indicators to produce some sort of statistical sample.  Usually though, you’re simply hiding the intesting stuff in the errors in your statistical model.  Washing out the outliers as “noise”.  The problem is, especially in the indicators above, it’s the outliers that matter! But I digress…

Point for financial pundits: national and global economics itself is complex. no simple model, simple statement, simple index can accurately model it. not even poorly.

Agree or Disagree?  Let’s have a discussion.

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If the universe (our experience, our lives, our physical reality) weren’t complex (unpredictable, undecidable) what would it be?

This is not rhetorical question.

It is not easy either.

Can you imagine an alternative?

It would be useful if we could so we can go look for evidence of the thing you imagine.  Why would we do this?  The growing research in “complexity” and “complex systems” make some assumptions based on irreducibility, computation equivalence and so forth that suggest less complex things are not capable of universal computation, and in some sense, the ability to evolve ever more interesting/complex things, like our universe.

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On any given day in the US in 2008 an average of about 148,000 people will die. Yawn. As the population swells it will grow larger. Yawn. As the population struggles with food, water, disease, contamination and war, those numbers will fluctuate higher and higher. Yawn. For many of us the numbers are so staggering that they don’t matter: 1+ million dead this week. Hummmm

 

There are the wars. Yawn. The US Government stopped totaling the body count on each side toward the end of the Vietnam War. Bad press for politicians, I guess. For Afghanistan and Iraq – and wars to come – Iran, North Korea, etc., that policy is continued. Good thing too. It continues to get harder to tell who the ‘other side’ is.

 

There is the US auto accident problem (3500/mo). Yawn. The US smoking problem: (42000/mo). Yawn. The US cardiovascular disease problem: (120,000/mo). Yawn.

 

But wait! There is an unsafe rollercoaster in Orlando! An alligator eats a cocker spaniel near a receding swamp in Mississippi and, heavens forbid, say it isn’t so!…an asteroid will hit Earth in the next 24.4 thousand years! YIKES!

 

Did you hear that airplanes are not being inspected? Bridges are unsafe. Baby bottles are contaminated by the plastic being used and don’t even mention the Chinese-made ingredients in heparin, toys, air conditioning parts and auto break pads.

 

The examples above represent that paradox according to the statistical probabilities that have been kept for the last 52 years. Clearly many of the things that will kill us we don’t value as dangerous. Other things we fear have a miniscule chance of harming us.

 

You are 109 X more likely to be injured in a car wreck on the way to the airport than to be injured in the airplane if you don’t get bumped.

A few things lead to this distorted view of what we value as good and what isn’t good that we fear.

 

Fear is conditioned just like eating habits are conditioned. Fear is based on losing what we value. Fear is the ‘other’ half of ‘magical thinking’ that comes from not knowing how to evaluate relationships between what is real and what is not real.

 

There is a hierarchy to fear. Not everyone’s hierarchy is the same but a hierarchy exists both for what we value and what we fear. They are related.

 

Our set of fears reflects our values; we engage or focus on what we value. We value what we were trained to value in our home, country, school, street corner or office. We value children… Children trump adults, having resources trumps resource dependency, helplessness trumps risky business and things close to home trump an Austrian engineer’s bazaar behavior. Circumstances around losing those things that we have learned or been trained to value is part of [conditioned] fear.

 

As big as the numbers are above they represent someone else’s world. They are nothing new; they lack ‘spectacle’. That is also conditioned. You can hardly be focused on car accidents if that is the only way to get to a job that makes you the money that affords you the luxuries of life, family, etc. In time, you learn to adjust, accomidate, to level what you have to do to get what you want to get.

 

Many dangerous things get conditioned to ignore: cholesterol, nicotine, sugar, over-medication, cell phones on the freeway and drugs that take the ability away to attend to consequences. That list is only 0.00000000002 % of the total list you might have.

 

Here is what is known. You are human. Your were born and you will die. You are more complex than any other organism on Earth and you are conditioned to be who you are with the material you brought to the table when you were born. Actuarial numbers don’t matter to those alive or to those that are dead. They won’t protect you nor comfort those at your funeral.

 

You will live to be an average of 76 (male) or so years if you are white and 72 (male) or so years if you are black living in the US. Your numbers are smaller if you fit in any of the categories and are in denial. You live longer if you plan to live longer and don’t get hit by one of those driving while eating an ice cream cone while text messaging, etc.

 

Real time you can use this rule of thumb:

  1. figure out what you value
  2. question what you fear
  3. figure out the consequences for all your behavior
  4. determine who benefits from you doing or not doing something

 

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