Sunday, December 29, 2013

Untestable simplicity

Cosmology has been unable to advance any further understanding of the universe for nearly a century. However, aided by fancy mathematics and fancier machines, physicists have been successful in creating a false perception of knowledge progression during this time as they danced their way to Nobel prizes and professorships. Some have even been successful in making the field “approachable” for the common woman through lecture circuits, books, blogs, podcasts and countless TV appearances. Even sitcoms have become “socially responsible,” teaching the couch potatoes about black holes and time travel through the comedy of idiots representing wise men. The general and continuous lowering of standards, aiding entry based on popularity and not competence, has resulted in a crop of physicists who are good story tellers but not much else.

The collective groan heard across the physics departments in major universities when the LHC failed to detect exotic partners to the much anticipated Higgs Boson or the conspicuous absence of her bridesmaids, the SUSY particles, could only be attributed to broken strings on their mathematical violins and the possibility of curtailed funding to mend them. It is ironic that the “theory of everything,” was done in by the potent concoction of the particle soup – something that the man who made the last meaningful contribution to physics, warned against. The dangerous combination of declining imagination and accelerating technology to make finer and finer measurements of noise has resulted in the field coming to a grinding halt. To top it all off, mathematics, a tool that helped humanity build civilizations in the past has now turned into a trick to prove anything or to create theories that do not need to be proven.

Experimentalists have been “defending” the field against occasional excursions into imagination – such as the multiverse - on the premise that a theory, if not proposed along with predictions that can be experimentally tested, is not worthwhile. They steadfastly cling to such a practical notion that most are willing to accept any level of complexity in existing alternatives as long as something could be tested. This is indeed noble. However, judging from their contributions for the past hundred years, it is unclear if such a posture is valuable for humanity.

Simplicity, even at the cost of untestability, should dominate the discourse in physics.

Friday, December 20, 2013

Data loss?

A recent report in Current Biology Indicates that a large percentage of the data, supporting scientific publications, are lost due to lack of access to the original authors and obsolete data storage techniques. Underlying data to scientific publications are apparently lost at an astonishing rate of 17% per year. Current expectations of the life of data are significantly different from what was considered to be acceptable 20 years ago.

What is an acceptable span of life for data today? Do data remain relevant for ever? Should data have an expiry date? Data, as we all know, are the raw materials to insight generation but that does not necessarily mean that they should exist for ever. In a world of exponentially increasing data, the challenge is to extract any information content in them quickly and discard the rest. Storing data for ever is likely going to create problems in many different dimensions.

The basic notion that more is better is not at all true for data. Scientific experiments such as the LHC create data at such a rate, it is virtually indistinguishable from random noise, unless one is looking for something specific. Large companies create so much data that many are coming to a grinding halt. The star of the data revolution has been googling its way into such endeavors as creating a human brain through artificial neural nets and curing death on the premise that there is nothing one cannot accomplish if data were available. Based on the artificial brain’s proclivity to seek cat videos on the internet they may be right on one account but not on others.

Data are very close to random noise. More of it is unlikely to solve problems.

Thursday, December 12, 2013

Shilling out

A recent Nobel laureate has derided his fellow prize winner as “the catholic who has discovered that God does not exist.” He argues that humans are psychologically imbalanced and make irrational decisions. That is fair enough – one has to just observe our leaders in Washington to understand this is a truism. What he misses however is the simple idea that predicting irrational behavior of aggregate markets – a large number of idiots – is not easy. If this is not true, Yale would have amassed all of the world’s wealth by now. One could observe this is not the case – neither for the University nor for its illustrious champion. It is also not true for its foundation – one would imagine with such knowledge, the professor would have helped it a bit. Alas, alpha is not that easy to capture.

Market efficiency has been a lightening rod for many practioners, those who make money by moving money around for no other purpose. It is ironic that an economist of such stature will fall for the same. It is indeed puzzling that the Nobel committee will find such an argument compelling. Getting wrapped in psychology, albeit being good fodder for story telling, is not amenable to creating frameworks for the behavior of large and complex systems. Measuring real estate prices is one thing – many could do that, but imagining how complex systems function in aggregate is another. If one could indeed predict “bubbles,” why not do that routinely – and become the richest man on earth? Is it just the altruistic endeavors in education that is holding him back? or is it that practicing what is being professed is not as easy as it seams?

To make this clear, once and for all, all he has to do is to predict the next bubble and bet his entire career, home and savings on it. Then, perhaps, he can find some disciples.

Wednesday, December 4, 2013

Slow evolution

A recent book “The Ghosts of Evolution of Nonsensical Fruit, Missing Patterns and other Ecological Anachronisms” points out that Avocados appear to prefer designs that seem to rely on creatures who lived a few million years ago to perpetuate their seeds. Is this a case of a time warp or just incredibly slow evolutionary trajectories?

Avocados, clinging to a strategy that worked for many millions of years, may find themselves extinct, eventually. Is the speed of evolution an important attribute of survival? The fact that Avocados are still around implies processes that replicate transmission, albeit at lower efficiencies. This is an important learning for more advanced life forms as well. The fact that the form has survived does not mean that it is the fittest, it is just that natural laws have not gotten to them.

Humans should be worried.

Tuesday, December 3, 2013

Leaning PISA

Results from the recently concluded PISA (Program for International Student Assessment) test show sobering results for US teenagers, lagging behind in Math, Science and Reading to their Asian counterparts in aggregate (although certain states such as MA and CT are on par or above). Although these are important metrics, there are more fundamental questions for education systems worldwide.

Is education about getting high scores in Math, Science and Reading? What’s the correlation of such high scores to eventual success – perhaps defined as the contribution to society – in the advancement of knowledge and humanity? What Math, Science and Reading are being tested – are they from last two centuries or something newer? How do such high scores correlate with the GDP growth of the countries associated with the star test-takers? What do the students who capture such superior scores eventually do with their lives?

What is education for? Is education about taking and performing in tests? Does education improve intelligence or does intelligence portends education? What has been the educational background of people who changed the world? Were they good test takers or something else? What are contemporary tests really testing – is it the ability to take tests, acquired knowledge or intelligence? How does culture affect measurement by tests? Do tests motivate students to learn? How does one learn? Is it from books and classes?

Educations systems, world-over, have gotten it completely wrong. In the East, they cram information into the brains of kids, essentially destroying any innate creative capabilities. In the West, they de-prioritize fundamental knowledge, creating students with stars in their eyes but with no hard skills to back it up. And PISA shows up – testing, ranking and reporting as if it means something. It doesn’t.

The only metric of a good education system is the end result. Does it produce individuals and teams who advance humanity? If not, it does not mean anything.

Sunday, December 1, 2013

It is complicated

A recent article in Nature that shows Native Americans may have arrived 24,000 years ago and they are a mixture of two distinct populations – East Asians and Western Eurasians is interesting. Current technology on human genome may be more aptly applied in this manner rather than the misguided attempts at predicting the probability of disease.

Humans have been circling the Earth for long. Contemporary populations that subscribe to country, color or religion are akin to those who may find the meaning of life based on the color of ice-cream that was consumed yesterday. It is such a preposterous notion that a large percentage of the 7 billion current humans are driven by such ideas of cultural purity. They have figured out how to divide themselves so infinitesimally small that the preferred human in close proximity has nearly zero chance of carrying anything resembling them in her genes.

Is this lack of information or just a bug in the physical hardware that they are endowed? If it is the former, then the biggest productivity boost for humanity could come from disseminating information on migratory patterns for the last 50,000 years to all inhabitants. If it is the latter, then, God save us.

Friday, November 29, 2013

Free-less education

The rise in freelance lecturers in US educational institutions is concerning from many perspectives. The first question is why this is happening. If this is emanating from cost reduction (and profit enhancement), it is akin to short-sighted companies focused on next quarter’s EPS instead of better products and strategies. A related question is whether the decline in full-time tenure track faculty is a conscious effort to contain R&D (and perhaps costs).
Image
The US business schools have been educating bean counters for many decades now. They equip them with the “latest tools,” fully capable of demonstrating maximum earnings in their companys’ income statements. Now, there are indications that the administrators of these venerable “not for profit” institutions are practicing what they have been teaching. Sure, reducing costs are important but if it adversely affects the products they make, in this case the graduates of these schools, it is going to come back and bite them later.

It is time that the universities in the country rise to the accountability of creating the best educated generation, yet. If they regress to the gimmicks of failing companies, they have only themselves to blame for the results.

Sunday, November 24, 2013

Network dominance

A recent study in the Proceedings of Royal Academy: Biological Sciences shows that the breadth and depth of one’s network are important determinants of skills acquisition and retention. This makes intuitive sense but now data proves it as well. In the context of expanding electronic social networks, it will be interesting to assess the correlation between skills and network scope.

Human brains have always been terribly constrained in the absence of external stimuli. An interesting question is whether the quality of one’s network is as important as its size. Those with stringent criteria for network building with ex.ante biases are likely to build “pure” networks. Such networks, however, are unlikely to extend the thought processes of the participants. On the other hand, promiscuous network builders may build very large systems quickly but may derive little benefit from it as diversity may create a level of noise that is incomprehensible. Logically, then, there is an optimal network building strategy to maximize skills building.

The next battleground – social networks – present a challenging design problem for humans.

Friday, November 22, 2013

The value of time

A recent study from the Mayo clinic that shows extremely high mortality in patients who are over 75 years old who have elected to undergo dialysis is sobering. With over 40% of the sample population passing within six months and a high percentage unable to return home, one has to wonder if decision-making could be improved. This is indeed a difficult question, one that may not have a clear answer, but it is worthwhile to think about it.

If human life cannot be infinitely sustained, then, there is an optimal decision point to extinguish it. If the objective function is a combination of individual and societal utility, maximization of value would require a mutual decision. If human life is standardizable, allowing high substitutability, life would appear to be a wasting asset. In such a situation, life will unambiguously lose value with time and the option held by the individual and society mutually to terminate would be optimally exercised earlier than what current norms allow. Thus, modern societies need to postulate better exits for its members.

On the other hand, if science and technology slopes indicate a step-function change to improve the life span of humans by orders of magnitude, then, exercising the option to exit early is suboptimal – both for the individual and possibly for society. In a world of declining aggregate number of humans, such an exit is extremely expensive. Assuming substitutability, the value of a human life, then, is a function of stock and flow of humans as well as the forecasted lifespan of an individual.

Thus, the value of remaining time for an individual can be reliably forecasted using a few attributes such as total population, net rate of growth and the probability of extension of human lifespan in the near future.

Tuesday, November 19, 2013

Intelligent evolution

A recent article published in the journal of PLOS pathogens show data indicating that evolvability is an important characteristic of selection. This is a finding that points to the importance of optimal control in a multi-stage game of evolution. Random mutation and single stage selection always sounded too simplistic to many. Now, it appears that evolution is not necessarily that straight forward.

Ridiculing each others’ position has taken much of the air time for debating evolution. There is no theory (let alone hypothesis) that could NOT be modified with new data and insights. Those bowing to the super creators of religion fight endless wars with the super scientists, who have figured it all out. Well, in physics about 4%, in biology less and in economics lesser. Flexibility of mind is much more valuable than conventional belief systems. As much of the world turn around predictable axes, the rest have to attempt to move thoughts forward.

If evolution, indeed, is a multi-stage game and selection shows optimal control, then, one has to question contemporary ideas. If evolution is intelligent, what may not be?

Tuesday, November 12, 2013

Horizontal innovation

Recent research from MIT shows structural and mechanical guidance from snails and clams improve the designs of robots. This is in a favorable direction of the application of Mathematics, informed by optimal designs from Biology. Vertical specialization has been substantially dampening breakthrough innovation in both engineering and medicine. Synergistic cooperation between mathematicians and biologists could steepen the innovation trajectory in both.

Engineers have been utilizing data in creative ways for centuries. This is a discipline that has invented and utilized much of the analytics, currently rediscovered by scientists. The basic notion that biological systems are too complex to be systematically analyzed using data, kept the discipline back for decades. Now, human genome and big data seem to have broken the shackles.

However, one has to be careful jumping into “big noise,” with presumed success. There will be setbacks and some may declare victory prematurely at the first sign of success. There is significant potential here but it would require professionals with limited horizontal view to trade their egos for a chance of higher success.

Thursday, November 7, 2013

Involuntary terraforming

News that a new species of bacteria was found in two category 4 clean room facilities used for assembling payloads for space in two different parts of the World illustrate the difficulties of executing sterilized exploration. This coupled with the fact that earthly organisms were found on Mars probes indicate that the first inhabitants of the planet continue to fool their somewhat more evolved cousins. This is concerning, as humans have a forgettable history of negatively influencing areas they have explored in the past.

Physical exploration of space appears too archaic in the presence of improving technologies for remote viewing. More importantly, the fascination to physically explore the Solar system, apparently to find life, may have to be tempered based on the recent hypothesis that there are at least 8 billion Earth like planets orbiting Sun like stars in the Milky Way alone. Human exploration of the Solar system for extraterrestrial life is a bit like riding a bicycle around the house in an effort to find Lions or some other majestic animals. It is unlikely.

It is time we rethought micro space exploration. The expected information gain from such exploits is close to zero.

Tuesday, November 5, 2013

Maximum MOM

India’s successful launch of the Mars Orbiter Mission (MOM) is good news. After a few weeks in the Earth’s orbit, the orbiter will be heading out to the famed red planet. The journey, however, is fraught with danger with only the ESA making it in the first attempt.

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Ref: NewScientist

A larger question is why India (and before that Japan, China and the ESA) attempted to develop their own technology for the Mars mission. After the US and Russia have already demonstrated viable technologies to reach the orbit and then land on Mars, it is unclear why reinventing such technologies is an economically good decision.

The utility a country derives from developing its own Mars mission may have four parts.

Public Pride (PuP) = Pride from achieving something for humanity

Private Pride (PrP) = Pride from showcasing the country’s accomplishments

Public Data (PuD) = Data and information that will be disseminated publicly

Private Data (PrD) = Data and information that will be held confidential

V = PuP + PrP + PuD + PrD

If the total cost of the mission is C, the the return to the country is (V-C)/C. However, since the true economic value of pride is close to zero, the country’s real return from such missions is low. It can, however, boost this return by acquiring such technologies from countries that have already demonstrated viability.

For example, in India’s case, if it is able to swallow the less valuable pride, then it could buy the technology (from the US or Russia) for just PrD. By doing so, it loses PrP but the selling country will likely subsidize PuP and PuD. In this case, its return from the mission is (PuP+PuD)/PrD. This is likely substantially higher than developing the technology on its own. At the very least, the cost will likely be an order of magnitude less.

More generally, society can maximize return on space investments if follower countries (after a single country has accomplished the goal) simply buys the technology from the leader to execute missions.

Sunday, November 3, 2013

Behavioral flexibility

A recent study in The American Naturalist suggests that animals show an equal level of behavioral unpredictability as humans. Observations of adult male mosquitofish over a period of time also seem to indicate that some individuals are more unpredictable compared to others. The authors hypothesize that such unpredictability represents behavioral flexibility that facilitates learning or creates confusion for predators.

These observations have implications for modern organizations also. Large enterprises implement organizational constraints to reduce behavioral volatility of its employees – in how they work, execute tasks, get trained and deliver products and services. They also measure time and effort at detailed task level and they generally view volatility in such metrics as undesirable. These actions by companies may be decreasing the ability of their employees to experiment and learn. The long term impact of this could include declining innovation rate, lack of job satisfaction and stagnant productivity.

Unpredictability and behavioral flexibility may have a positive impact on the viability and growth of organizations.

Ref: Flexibility : Flexible Companies for the Uncertain World.

http://www.crcpress.com/product/isbn/9781439816325

Monday, October 28, 2013

NIFting LIFE

Recent news that the National Ignition Facility (NIF) has surpassed a critical benchmark – obtaining more energy than provided in a fusion experiment is a significant milestone toward free energy, an outcome that will help solve two tactical problems faced by the Earth, environmental degradation and colliding asteroid vaporization. No cost energy production has become a critical need in a system, wobbling toward extinction, either by the actions of its inhabitants or by space debris that envelop it like fruit flies around a rotten apple.

image Lasers focused on a target container for hydrogen fusion – a mini Sun

Ref: BBC News

NIF, plagued by technical difficulties, has been behind on its own goals. But it seems to have accomplished what it set out to do a full year before. If the results are verified and replicated, they successfully demonstrate the concept of sustainable hot fusion with energy accretion. This should boost efforts to scale up fusion into practical power generation.

image

Ref: LIFE at LLNL

The aptly named, Laser Internal Fusion Energy (LIFE) at Lawrence Livermore National Laboratory (LLNL) has been making conceptual power plant designs based on NIF experiments and it appears that we are moving ever closer to reality. Although the goal is to deliver fusion based commercial energy by 2020, recent advancements may allow an accelerated deployment.

Fusion, the only known source for clean energy, may ultimately help humans sneak out of disaster, just in time.

Saturday, October 26, 2013

Music to the inventors

Research from Michigan State University shows a high positive correlation between involvement in arts and crafts in childhood (<14 years) to innovation (measured by patents) and business creation later in life. Training and early participation in music, creative writing, photography and other such artistic areas appear to positively influence out-of-the-box thinking, a critical attribute of innovation and new business creation.

It has long been argued that the superiority of the US in innovation is related to its flexible education system that focuses more on whole brain development. Although US may not top other countries in test scores in hard sciences, it does produce a high level of creativity per capita, far in excess of any other country. There is a clear trade off between early specialization in sciences and later creativity. Well known technical institutes around the world, understandably proud of their ability to create a large number of engineers and doctors at will, may be missing a trick. The world may need less human robots in the future, highly efficient in applying what they are taught and it may need more creative individuals who can innovate and create new businesses. An education system focused on creating employees is significantly less valuable than one nourishing inventors and entrepreneurs.

Arts and crafts – that propelled the human psyche out of a dreadful life focused on food and sex – may ultimately give a more substantial makeover for humans.

Friday, October 25, 2013

Option value of organs

A recent study in the Clinical Journal of the American Society of Nephrology argues that assigning a benefit, say $10,000, to a kidney donor could increase available organs for kidney transplantation by 5%. Although the price elasticity of kidneys is unclear, it seems logical to assume a normal market equilibrium. Ethical issues aside, the owner of an organ may be sub optimizing decisions by not exercising the put option optimally.

Organs are wasting assets, the market value of which are declining over time. The utility one gains from her organs is a function of remaining lifetime – with the asset lost in a catastrophic end. The net value of the asset is the difference between the two, that may show a U shaped curve. The put option held by the owner on her organs has an optimal exercise horizon prior to death. This is especially true if the organ is not essential to life, or acceptable backups exist as in the case of donating one out of the two functioning kidneys.

Tangible economic incentives, if applied correctly, can induce optimal exercise, with beneficial societal impacts.

Tuesday, October 22, 2013

Lonely baby

Recent discovery of a lonely planet without a star, a mere 80 light years away from the Earth is interesting from many angles. The newborn, just 12 million years old, may indicate a failed star at six times the size of Jupiter. Although ejection theories are abound, this could be a case of star formation in zones not considered active. With this unexpected finding, the frenzy of extra solar planet discovery continues to increase.

However, we now know that planets are out there in large quantities and in every size, age and composition. One has to wonder if further exploration of these somewhat uninteresting objects is a good use of limited resources. It is unclear why so much passion exists in the identification and cataloging of planets. Is it the need to verify the already known structure of the universe or perhaps a desire to find life elsewhere. If it is the former, there is enough data to confirm that planetary systems are replicated across the universe. But if it is the later, then, it is advisable to look closer.

With limited understanding of all the life on planet Earth and possible life in close proximity in the solar system, it does not make sense to seek it elsewhere. If this is driving a good part of the thought processes of budding knowledge seekers, this has the potential for destroying further advances.

Monday, October 14, 2013

Efficient Chicago

The idea was simple but the implications are huge. It is clear to those who understand frameworks but less so to others. The notion that information is quickly reflected in the prices of traded assets, standardized and liquid, in markets that implement clear rules of engagement and property rights, is elegantly obvious. It is, however, singularly confusing to active investors, individuals and institutions, a sizable chunk of the US economy.

The dominance of the Chicago school in shaping economic thinking continues. Recently minted Nobel Laureates – Fama and Hansen, seem to complement wonderfully in the grand tradition of theorization and empirical support. Their work has direct practical consequences for investment decisions and asset pricing models. More importantly, they also provide guidance on resource allocation across the economy.

For example, efficient markets mean passive investing dominates, a conclusion that is robustly supported by empirical observations. Even though risk adjusted excess returns (alpha) is shown to be zero (after management and transaction costs) across investment managers (a direct conclusion of Fama’s Efficient Market Hypothesis), significant resources – money, people and time – are wasted across the world by actively managing liquid investments. One has to wonder why the venerable investment banks and financial institutions, filled to the brim with the brightest, engage in activities that add no value either to themselves or to the economy. To make matters worse, there are over eight million active traders in the US alone, ably assisted by the brokerage houses, pushing buttons and pulling levers arranged on multiple screens in such complexity that they rival the cockpit of the space shuttle. As the markets close every day, some rise like vampires – mad, fast and crazy - aiding and abetting the following day’s trades and newly emerging traders. This is a massive misallocation of capital across the entire economy. This is indeed a systemic issue for the economy where agents are engaged in value destroying activities for a large cohort of the economy, presumably because of monopoly rent and hidden options yielded from asymmetric information between the adviser and the client. Such a market failure, if corrected by appropriate policy actions, could significantly improve global productivity.

Hansen’s method of moments help mere mortals make reasonable models for complex macro phenomena. His focus on incorporating the agent’s thoughts, beliefs, doubts and learnings into modeling her actions and the systematic consideration of uncertainty that is evolving stochastically, is refreshing. Determinism has been the bane of theoretical finance for long and the incorporation of uncertainty in accepted models may help measure risk better – both locally and globally. Policy makers will benefit if they understand that flexibility embedded in policy decisions are valuable in the presence of uncertainty.

Chicago has had an unbelievable run – primarily because of its commitment to embracing unconventional ideas early and nourishing them over long periods of time. However, there are indications that the school is becoming more conventional and it is less inclined to accept emerging ideas. If it deviates from a formula that has been successful for nearly a century, it can quickly mean revert to mediocrity, ably demonstrated by its peers today.

Thursday, October 10, 2013

Fusion, fusion everywhere but not here

Recent news that NASA may be making progress toward fusion rockets for inter-planetary travel is encouraging. Given the level of knowledge humans appear to posses, it is embarrassing to be in a situation that limits available energy. Everywhere we look, energy is free and it comes from fusion. The inability of humans to master this universal trick is puzzling, especially because zero cost energy would have set them free – with unlimited food, water and automatically cleaned and stabilized environment for ever.

Digging toxic materials out of the ground and burning them in their unstable green house for energy seem to reveal a level of societal stupidity that is incomprehensible. The tree huggers and hipsters, perhaps with better intentions but with equally stupid notions of energy creation have been clamoring for wind, photovoltaic cells and nuclear fission. Is this because of lack of understanding or is it driven by localized incentives that simply will not allow societally optimal solutions?

Energy creation has to stick to a few simple constraints. The process cannot create waste that needs to use energy and time to process, it cannot affect habitats and the environment and more importantly, it cannot consume more than it produces. What is left?

Sunday, October 6, 2013

Connected brilliance

A recent article in the journal of Brain hypothesizes that the unusual level of high connectivity between the left and right hemispheres of Einstein's brain may have contributed to his brilliance. If true, this has implications for many areas including childhood brain exercising and education in general.

Typical designs of the human brain seem to promote hemispherical specialization. This may be an unintentional effect of evolution that may have afforded an advantage to being good in one activity or another. If the objective functions of the individual and society are relatively simple, optimal brain design may be dominated by specialization. After all, it is possible to create an efficient hunting group by assembling spotting, throwing and carrying skills in separate individuals. This seem to have continued in the modern world even in the presence of somewhat more complicated needs.

Education systems that stress focus may create highly specialized individuals, akin to robots that possess a limited, albeit being efficient, skill set. As the information and knowledge needs of society increase, there is a natural push toward specialization. However, education systems that cater to this trend are trading off creating individuals with the ability to transform the world to those who can efficiently work in it.

Education systems providing whole brain content may be able to provide a desirable software connectivity overlay to ordinary brains. It is not realistic to expect another Einstein but perhaps universities can devise ways to incrementally improve what they are provided with.


Friday, October 4, 2013

Simulated colonies

A recent article in the Journal of Proceedings of the National Academy of Sciences shows that a simple mathematical simulation explains the formation and progression of human populations between 1500 BCE and 1500 CE. The authors appear proud that their models explain reasonably well how large scale societies formed. However, it also indicates that “intelligently designed” humans resemble ants and bees than something more substantial.

For most of the history of humans – a few parameters that describe the interactions of ecology and geography were enough to explain and forecast their behavior. Sporting fairly simple objective functions that include food, sex and power, human societies flourished with less flexibility and depth shown by ants and bees. They have been understandably proud of the accomplishments of the last few centuries in which they devised faster and more destructive ways to perpetuate the same goals.  Now, simple mathematics prove societal behavior can be easily modeled.

As they dream of perpetuating their genes across the solar system and beyond, humans may benefit from some introspection – what they have done thus far and why they may not do anything different in the future.

Monday, September 30, 2013

Downward mobility

A recent article in Sociology Mind, demonstrating that check cashing outlets strategically target high crime neighborhoods, is an indication that analytics and targeted marketing are kicking into top-gear. Demand for goods and services will be met with supply at prices that will clear the market. The providers of services will maximize profits by selecting the most desirable locations, consumers, products and prices. This is true for crime, guns, prostitution, check-cashing and other such entities. From a policy perspective, however, this has societal implications.

If the reduction of crime has a net economic value to society, then regulating agents that aid crime may be optimal. However, this is an analytical (and empirical) question as regulation adds costs to society by introducing artificial constraints to market clearing mechanisms, resulting in dead-weight losses. The positive spill-over and long-term beneficial effects of crime reduction has to be evaluated against the likely cost of regulations. Both the benefits and costs are uncertain and thus, policies that are staged, introducing flexibility to future course corrections are optimal. Since crime almost always has a perpetrator and a victim, the question is how to shut down access to resources for those who commit the crimes. This is not unlike cutting the blood supply to certain types of cancers. This is, however, a complicated problem as the victims rely on the same mechanisms to live.

Policies have to have a temporal dimension – possibly starting with a severe action (such as government controlled access) with a well laid out plan to move toward a full market based mechanism. The most beneficial policy is not a stagnant one but rather a system with clear and well-articulated transition from necessary regulation to solve the issue at hand to market based mechanisms.

Saturday, September 28, 2013

Uncertain governance

As the politicians in Washington battle for their beliefs and brownie points, the coming generation has to seriously consider effecting a transformation in the current governance system. The two-party dysfunction has reached its peak and the halls of the capital are now filled with ignorance and incompetence. The “representatives” simply do not represent the knowledge and capabilities of the population, as over half of them never cared to even vote in recent elections. It is time to move to the future. It is time to break the shackles of irrelevant rules and regulations and equally antiquated law making procedures.

The representative form of democracy is already obsolete in the presence of contemporary and emerging technologies. The elections, controlled by a minority, almost always result in a choice that could be marginally better than the alternative presented, but never the best. Unless the participation in the electoral process can be substantially increased, it will remain to be a sham – an inefficient process to control the damage. The current process elects a handful of people, completely disconnected from the present and with obscene incentives to perpetuate the past. They are ill-equipped to understand the choices in front of them, let alone select the best alternative. Most likely still have fax machines in their offices even though they may not know how to use them. To expect them to effect the best policies for the country is irrational.

The best way to get out of this nightmare is to move to a form of direct democracy – using technology. There is no need to create an inefficient layer between the people and the policies. Alternatives can be easily presented to the people and voted on by the entire country. Perhaps then, the “representatives” can return to their homes and towns and start collecting social security, if it is still available.

Thursday, September 26, 2013

Failure

The failure of science to propel thoughts and the failure of religion to lift humanity have left most in the dust – some yearning for meaning and others for food, to sustain themselves. Humans have demonstrated irrationality by living while some attempt to concoct grand theories to explain the inexplicable. In the noise of segmentation – countries, colors and beliefs – homo-sapiens shall sub-optimize and possibly destroy a fantastic quirk in space-time, that is habitable.

They had done it before, erasing sophisticated Neanderthals and running over their cousins across the continents to the South.They had done it before, by pretending superiority and waging wars to prop up their own egos. They had done it before, by travelling far and wide, by injecting diseases and false hopes to the indigenous. They had done it before, by raping and pillaging what is not theirs and then asserting meaningless theories to justify their actions. They had done it before,  by allowing the stupid to rule them and then becoming submissive in their own homes and valleys. They had done it before, by asserting privilege to be talent and initial conditions to be inevitable. They had done it before, by beauty, strength and ignorance.

The failure is irreversible in the presence of societal inflexibility.

Monday, September 23, 2013

Regulatory obsolescence

A recent article in Anesthesia & Analgesia points out that iPhones can already be equipped with Pulse Oximetry – currently only available through expensive and rather bulky equipment in the OR and preparation rooms. However, these devices on smart phones are not yet approved for use. This regulatory overhang is holding back the application of cutting edge technologies in medicine and other areas.

Regulatory agencies with rigid and prescriptive rules are ill-equipped to move at the speed of technology. In such a regime, regulations are likely to constrain the population to antiquated, costly and more risky methods than what may be afforded by contemporary technologies that are more effective but are not proven in the traditional tracks. Unfortunately, the education, skills and knowledge of regulators are unlikely to keep pace with rapidly changing technologies. Thus, decisions made by humans are increasingly less efficient in the creation and implementation of regulations.

A better regulatory regime may be one that describes the expected outcomes in quantitative terms and let technologies, that satisfy such end points, to be automatically approved.

Friday, September 20, 2013

Chandra’s coma

Recent observations from NASA’s Chandra observatory that shows the enormous scope of the Coma cluster of galaxies leave the amateurs dumfounded. The features of this epic structure, spanning over half a million light years, cannot be easily explained. The marriage of at least two giant elliptical galaxies has resulted in a structure of fantastic scale, held in shape, apparently by gravity.

The observation of such structures, ironically, raises more questions than answers. The paradoxical information loss in a black hole, sometimes explained away by the pasting on the surface, leading to the possibility of the universe being a hologram, may need to be revisited. The question is whether peeking into the past is a fruitful activity – does it provide new information or just cloud already established ignorance?

It may be time to look to the future, for the past is too dull or inexplicable with available tools.

Friday, September 13, 2013

Rajan : Intellect to spare

As I walked up to the shabby building in downtown Chicago, battling the bone chilling wind from the lake in 1992, I was looking forward to Rajan’s class. I made the trip from Hyde Park in anticipation of new information and I was never disappointed. Albeit being contemporaries at IIT, my engineering path left me distinctly ignorant of economics and he gave me more than I was bargaining for.

Freshwater economics was refreshing as it provided a robust framework, not unlike the engineering I was used to. The young professor was already showing brilliance as he systematically explained traditional finance from 6 PM to 9 PM. My first peek into research was also instructive with an empirical study into decision-making in financial markets. I attempted to soak the knowledge in with unreliable results. It sounded interesting but it was unclear if managers in firms made decisions that way. Later,I would find that managers were worse, much worse.

The theory was clear – but in practice it turned out be nearly useless. Chicago’s tendency to be enamored by deterministic models is its Achilles heel, as it argued what should be without asking why it is not so. Not many make decisions discounting cash flows but most do calculate an NPV that is swept aside by decision-makers as either irrelevant or incorrect – and for good reasons. Decisions were never that simple – neither in companies nor in the macro economy.

It will be interesting to see if he can bring back an economy in shambles, driven to hell by socialistic and ignorant policies for over five decades.

Thursday, September 12, 2013

Mad, fast and dumb

Recent research from the University of Miami warns that the emergence of the “ultrafast machine ecology,” – referring to algorithmic trading - may create more market crashes. This “predatory” behavior, the author argues, is reaching a stage of instability and may need to be regulated. These arguments, based mostly on an engineering view of financial markets seem to be suffering from a lack of understanding of what markets are. Assuming that regulation is the only medicine for any symptom is problematic for many reasons.

First, let’s look at what financial markets are for. They are set up for the trading of standardized paper that represent the value of real assets. Nobody is forced to buy or sell such instruments and markets fundamentally mean that anybody is able to buy and sell those at any time and ideally at any place. The rules that govern such markets are simple – everybody is allowed to analyze publicly available information and make decisions for herself. Granted, the simple rules – equal access to information, no insider trading and no preferential access to trading are not consistently implemented – but that is a different issue.

Second, application of technology to trade is an innovation – but such innovation has not resulted in risk adjusted excess returns (alpha). Nobody has cornered all the wealth in the world yet by algorithmic trading. So in spite of the mad, fast and dumb bunch that shout from the TV screens every evening, the many supercomputers and light years of cable wrapping around the exchanges and the brilliant physicists and mathematicians who fine tune the algorithms continuously – academic studies show that none of these create alpha. Finally, the presumption that “regulation” will solve these “problems” implicitly assumes that the regulators have perfect information to make the optimal rules. If the last decade is any indication, one cannot imagine regulators are that smart.

Analysis of financial markets and trading behavior based on engineering rules is unlikely to provide any insights. Further, assuming that regulation is needed over the application of emerging technologies for trading is wrong, philosophically and practically. It would be a lot better if regulators focus on implementing the rules that already exist consistently and sending the offenders to jail quickly.

Tuesday, September 3, 2013

An economic loss to society

The passing of Ronald Coase makes us poorer in our ability to conceptualize complex problems that affect society at large and solve them elegantly. He made two invaluable leaps in economics, while teaching law at the University of Chicago and those insights stood the test of time. “The nature of the firm",” survived through industrial revolution into information revolution providing a simple and complete framework to analyze and understand scale and scope of firms. He will repeat it again in “the problem of social cost,” with a clear articulation of the cost of blind government intervention, with normative prescriptions for auctions and allocations.

The elegance of these observations was astonishing and they left mere mortals, yearning for intellectual stimulation. It has influenced a wave of innovation in economic thinking under the umbrella of Chicago school, where frameworks based on a set of principles yielded tools with broad applications to every aspect of society. This ability to solve problems top-down, uncluttered by data and anecdotes, is a skill that is waning. In the contemporary world of “big noise,” where academics and practioners scramble to create and prove hypotheses, such insights are very rare.

A true economic loss to society - perhaps educators and policy-makers may take a moment to look back and see the brilliance.

Sunday, September 1, 2013

Dropped call

As the world’s largest democracy attempt to grapple with the problems of its own creation, one has to wonder if the last decade was yet another failed start. From its recent independent beginnings, its incompetent leaders consistently made bad policies – from soft socialism to fully planned societies, with the hope that failed policies elsewhere will work in India. It should be clear by now, that they do not.

Three primary vectors have always held the country back. First, its political elite, with compassion clearly worn on the long sleeves of their home made garments, have always been corrupt – top down. Such a corrupt system simply cannot make optimal policies and a country that claims to be a democracy goes to the poll, mesmerized by a few last names as if it is in some sort of hypnotic trance, and keep electing the same corrupt and incompetent bunch. And second, the one-sided education handed out to the politicians from a few choice institutions in Europe, have sufficiently brain washed even those who may have wanted to do something good. And, finally – a disconnected set of kingdoms, packed into a country for the convenience of the World, still hoards endemic discrimination across classes, regions and sexes.

Central planning does not work, markets do. This simple idea is yet to penetrate those technocrats in charge, still burning the midnight oil to optimize resource allocation and to engineer optimal growth, as if they are the only ones who know how to drive a ship with over 1 billion people to their certain heavenly destiny. The basic idea that past performance is no indication of the future has never been explained to the entire country, that seems to cling to its illustrious past, as if godly intervention will return it to its past glory. It will not.

The prescriptions are simple – open markets, trade freely, shed cronyism, punish corruption and implement a true democracy. Opening markets means clear and consistent implementation of rules – those regulating market failures such as monopolies and those implementing fair taxation and minimal subsidies. Trading freely means it has to get stronger in areas of comparative advantages and not drive its educated populace to industries of fleeting cost advantages, afforded by a protected currency. Shedding cronyism means that it creates organizations that compete on merit and intellectual property and not those manufacturing profits by connections and handouts. Punishing corruption means that it has to get tougher on white collar crime and use powerful disincentives to remove this issue that is eating into its core. And, implementing a true democracy means that the system is able to understand available choices and elect representatives who are the best leaders, irrespective of where they come from and what their last names are.

It is a long shot.

Friday, August 23, 2013

Buggy OS

The rise of humans from available alternative biological systems has been ably aided by a robust Operating System (OS) design. The hardware, sported by the species, was never a head-turner, showing fragility, clumsiness and lack of power to move fast, climb high or lift heavy. However, the installed OS, compensated for these deficiencies, by allowing efficient use of memory, learning and pattern finding. However, on the downside, the OS appears buggy, thanks to ad-hoc evolutionary processes and random mutations.

For starters, at the core, logic processing appears volatile and seems to be prone to errors. To make matters worse, built in learning and error-correction facilities can and does go haywire, producing unexpected and unreliable outcomes. Since these issues are seen across the entire cross-section of humans, they can only be attributed to the OS itself and not the acquired applications. Early adoption of the next generation OS, perhaps thrust into the market by nature without sufficient testing, seems to have provided an edge early but the tight coupling of high level (but rather premature functionality) ended up in a less robust long-term design.

Humans may be sufficiently limited by a buggy and outdated OS. Newer and more powerful applications – education, culture and art - are unlikely to make a fundamental difference, if this is the case.

Saturday, August 17, 2013

Teleported

Recent news that physicists at ETH-Zurich have successfully teleported a large number of qbits, albeit over a short distance, is welcome news for practical quantum computing and telecommunications. It appears that we are fast approaching a possible jump in the application of science, with a theoretical foundation laid down nearly a century ago – something that engineers and technologists have been waiting for many decades. Teleportation and quantum computing have the highest potential to transform the human psyche, currently lost in meaningless wars and less meaningful experiments.

Incrementalism, a disease of modern human societies, has been eating into the potential of humans, substantially lowered by ignorance, conformation, racism and politics. Only a leap in technology that can flatten the ego, wealth and timidity, has any chance of transforming the status-quo. This will not come easy as conventional education and contemporary industry favor less risky mediocrity – most propped up by connections, campaign contributions and charitable donations with tax-breaks. In this toxic pool of influence and 15-minute fame on TED talks, humanity has been held hostage by the blind and the dumb.

Only a leap in technology has any chance of freeing the mind and visualizing the future.

Wednesday, August 14, 2013

The puzzle

Who solves the puzzle of life, who tries and retries, who fails and starts all over again? Who understands and then forgets? Who begins and ends? Who thinks and dreams? Who starts and then stops, abruptly? Who catches the inevitable and drops it later? Who knows and is then left with the inexplicable? Who predicts and then is challenged by the unpredictable? Who sees and then is blinded by the light? Who listens and then waits for the inaudible?

Who faces adversity and grows from it? Who sees further than what can be seen? Who hears the sound of future and dreams again? Who understands the present and fight for the future? Who knows the unknowable? Who smiles and waits for the unexpected fortune? Who takes a turn and tumbles higher? Who waits for a better tomorrow and forgets a worse yesterday?

It is an interesting puzzle.

Saturday, August 10, 2013

Suspended knowledge

A recent paper in the journal of Physical Review Letters, showing a new analysis of the Cosmic Microwave Background Radiation and hypothesizing how the constructs from the existing model – such as dark energy and Neutrinos – could be sufficient to explain them, is symptomatic of the common experimental problem, in which results almost always tend toward ex. ante expectations. This is now common in most scientific disciplines including Physics, Medicine, Economics and others.

Experiments have been useful for most of the scientific pursuit of humans. However, we are fast approaching a regime that has a critical level of knowledge that cannot be improved by experiments. Empiricism and experimentalism have contributed significantly to the acceleration of knowledge in the past. However, the alarming rise seen in confirmation bias in experimental results, across scientific disciplines also point to a level of knowledge saturation bounded by experiments. This is akin to an environmental change and if the human brain is not able to adapt to this new state of knowledge, it stands high risk of stagnation, or worse extinction.

One way to get around this stagnation is to increase the number of experiments designed specifically to disprove expectations. As the value of confirming experiments decline for knowledge creation, experiments that look for yet to be defined needle in yet to be defined haystack have to dominate. The problem, of course, is even in those cases, ex. ante expectations of the haystack and the properties of the possible needle will be corrupted by the status quo. It is possible that humans are unable to make a transition to the next wave of knowledge creation as the current education and industrial systems are simply unable to adapt to the new realities.

It will be sad if we experiment our way through finer and finer measurements of the non-existent, in a state of suspended and stagnant knowledge.

Saturday, August 3, 2013

Social automobile

A recent study from Virginia Tech describes how unstructured textual information from online discussion forums and other social media can be mined to unearth vehicle defects. This, in turn, helps quality management professionals to predict impending problems, make decisions and proactively manage safety and quality. This is an area that merits further exploration.

There are two important vectors of possible future innovation here. First, portfolio information from social media, albeit being highly variable and unpredictable at individual level, contains valuable insights to aid decision support. One could imagine similar techniques to predict disease outbreaks and terrorist activities. It has been known that health and law professionals have been taking advantage of social media to support decisions. With improved technologies in unstructured text mining, these concepts can be further developed. In the long run, one has to believe that such technologies will become widely available to the consumers as well.

Second, it also showcases the importance of product quality for manufacturers as any lack of it will be internalized not just by the immediate customer but the populace at large, very quickly. For example, for automobile manufacturers, it is increasingly important that any possible quality issue is identified and corrected before the user of the vehicle knows and blogs about it. In essence, they have to build smart cars, able to self-diagnose problems and communicate them to the manufacturer. Additionally, the manufacturer has to be able to aggregate information at the fleet level to identify any looming quality issue before it affects the user adversely. We may be fast approaching the establishment of social channels for machine-to-machine communications. If manufacturers do not get ahead of this developing wave, they will be consumed by those who do.

It took thousands of years for humans to invent technologies to connect them all together, allowing the emergence of social intelligence. It will take less time for machines to do the same.

Friday, August 2, 2013

K-NEST

Recent simulation of NEST on a K Computer in Japan demonstrated a neural network close to 1% of a human brain. Although this is encouraging and point to the possibility of simulating an entire brain using exa-scale computers in the future, it also raises many questions as to the utility of programmatic simulation of the human brain. It has been a fascination for many ordinary men and women, for ages. A powerful quantum computer, housed in such an efficient space, standing ready to learn and forget, tantalized those who attempted to replicate it in-silica – but is has all been in vein.

Simulation of the human brain by traditional means, using raw computing power, is unlikely to produce insights into its workings. The brain is an efficient quantum computer, not something that possesses very high computing power and memory as measured by traditional computing metrics. Its specs are mediocre at best but it does have a highly sophisticated operating system, that is able to take advantage of its limited capabilities. In the absence of such powerful software, able to adapt to modular and learning apps, some able to reconfigure on demand, it will be less interesting. Failure of the operating system or some critical apps, render the brain incompetent quickly, regardless of its supposed hardware depth.

Sheer scaling of computing power and memory, although a straightforward experiment, is unlikely to yield the mysteries of this remarkable organ.

Monday, July 29, 2013

Free Marketability

A recent study in the International Journal of the Economics of Business shows that the European Climate Exchange (ECX) has been an efficient way to curb carbon emissions. Free markets, yet again, provide a simple and holistic way to price divisible and tradable benefits and dis-benefits to society. Free trading participants of a system are the most likely to impute efficient prices to outcomes and drive optimal policies. Ignorant politicians and paranoid scientists are unlikely to devise the best policies for society – worse, they make the situation worse.

More generally, society is in the best position to determine the price of an outcome for itself. Attempts at prescriptively driving policies either through the analysis of incomplete data or the adherence to political agendas by a few, will always result in worse outcomes. The basic idea that there is an efficient price to pollution is missing in these emotional debates. Since pollution affects society and its participants, only a large cohort of these participants, expressing freely could determine the cost of it.

There is a need to focus on two areas – first, market mechanisms, that will efficiently price any anticipated positive or negative outcomes to society, including pollution have to be prevalent with easy access to all participants and second, entities that manipulate prices have to be tried with the possibility of the highest penalty – they are engaged in crimes against humanity.

Friday, July 26, 2013

Unified, but not grand

A recent article in the European Physical Journal explains how the behavior of  a complex dynamical system could be explained by the superposition of simpler underlying systems. The work hypothesizes that special relativity and quantum-mechanical dynamics are mathematically identical to two interlocked processes operating at different energy levels.

Grand unification theories have been directionless for decades, attempting the impossible – some spawning particles and others energy fields, to plug the holes in improbable theories. They have been inventing strings, membranes and other such constructs, that would make a dress-maker blush but with little advancement in fundamental knowledge. The notion that complexity can be explained by superposition of simpler processes have been with us for decades as well, but that sounded too simplistic for the pretending geniuses behind ivy walls.

Simpler explanations to complex phenomena will always dominate even though it may not be sufficiently robust to prop up the ego of Nobel seekers.

Saturday, July 20, 2013

Parasitic evolution

Recent research from Vanderbilt University demonstrating that microbes in the gut of animals can substantially influence selection and thus evolution, is interesting. It implies that the outcome of evolution is based on a constrained optimization taking into account the characteristics and needs of multiple organisms in a single matrix. The interesting question is what dominates the process and how it has shaped evolutionary history.

Single cell organisms, amazingly robust and extremely flexible, have been dominating the Earth ever since they arrived, possibly hitching a ride on an asteroid. They shaped the environment to suit them and fundamentally changed the course of the blue planet. They meticulously designed carriers for them to survive in harsh conditions and thrive invisibly. Nothing less could have been expected of a species that travelled through interstellar space, billions of years ago.

Their hosts, complex and customized carrying boxes for this remarkable species are left with sheer astonishment as they study these superior biological entities.

Sunday, July 14, 2013

Excess power

A recent study in the Journal of Neuroscience replicates the process of daydreaming in a computer simulation. It is a reminder that the most important asset of humanity – 7 billion brains – is significantly underutilized. An evolutionary quirk endowed humans with a massive organ that finds itself with little to do most of the time. It can control and operate the most sophisticated robot on Earth with less than 10% of the available power. The rest, is simply wasted – and out of sheer frustration, it ventures into daydreaming and night dreaming.

Humans have been attempting to use excess computing power in interesting ways. The Internet finally connected islands of processing power but the use of available excess computing power in the network is still in its infancy. Computing power, however, is a trivial resource compared to brain power – that remains largely disconnected and wasted. Productivity of modern societies is likely highly correlated with its ability to connect brains and use wasted brain power to solve complex and interesting problems.

A technology, akin to the Internet, able to connect brains and utilize the available excess capacity, is needed for humans to take the next step. This is a societal problem – something that the “singularity” peddling technocrats are ill-equipped to understand.

Tuesday, July 9, 2013

A measure of goodness

As the world, fully segmented into countries, religions and belief systems, fight to prove and disprove, it is interesting to think about a measure of goodness. Here, actions clearly matter more than words, for the latter is costless. A good person contributes to the wealth of humanity to such an extent that optimization of the system will require the protection and nourishment of that entity at almost any cost. Goodness, then, is about understanding the universe, its interconnectedness and its ability to solve the future and forget the past. It is about shedding the pretense, capturing the thoughts of beautiful minds and extending them. It is about shunning meaningless fights and challenging apparently meaningful present.

Goodness is indeed rare – it is not about wealth, intelligence, status or strength. It is all about beautiful thoughts that connect constrained ideas for the benefit of all. It is not about showcasing own self, but rather appreciating the random ones. It is not about winning at any cost, but rather assuring that victory has meaning. It is not process but content and it is not status but contribution. It is the ability to see the whole and not manufacture the details of the components. It is not running for the meaningless destinations but crawling to the beacons of enigma. It is, indeed, about beautiful thoughts – with fading but powerful examples, such as Einstein and Gandhi – and as a precious few look back in such bewilderment that they could find minds of such inexplicable depth and capabilities, they hang their heads in shame.

How does one measure goodness, then? With asymmetric pay-off to the individual, most rational and ordinary men and women will shun choices of implementing goodness at her own cost. She will be forced to optimize with harsh constraints on her own tactical life, with a programmatic and irreversible end. Could ordinary humans be good enough? Would they put yet another brick in the wall of humanity? Would they extend the knowledge handed down from generations or would they simply give up?

The value of society is the sum total of its goodness – a metric that is clear to those who want to optimize and less so to others.

Thursday, June 27, 2013

Wild mouse

Recent research from Northwestern University shows that removal of a single gene from a biological entity can substantially affect behavior. In this specific study, the removal of a gene, TAAR4, from a mouse, rendered it incapable of smelling the urine of the predator cat and avoid them. The team from NU hypothesizes that the gene provides a level of senisitivity to smell in evolved systems, such as humans, helping them avoid rotten foods. Even complex systems, thus, are precariously balanced by the presence of few "apps" for survival.

Even human, a marvel of nature, may be vulnarebale to specialized systems without back-ups. Mice, with a smilar structure, show signifcant vulnerability to the alteration of a single gene in a similar gene pool. Natural designs, thus, have been risky experiments - assuming high confidence of performance in critical systems. The design of an aircraft in this fashion, will substantially increase the probability of failure in every flight. The question is why nature would partake in such risky designs. Clearly, redundancy is costly and if the evolutionary design is part of a game with winner takes all result, then it makes sense to enter risky designs to the competition. With no limits on entries to the evolution competition, it is dominant for nature to push a plethora of efficient but risky designs.

Contemporary bilogical systems, winners of past high stake games, may be ill-equipped to win again in changing regimes.

Tuesday, June 25, 2013

Entropy driven evolution

Although many explanations exist for the origin of life – mostly from traditional religions, the most robust scientific explanation is the one driven by entropy. A singular direction of time coupled with unambiguously increasing entropy in the universe, point to life as a mechanism that accelerates entropy. Those wondering why a group of complex chemicals will get together and act in unnatural ways, could consider the existence of a simple objective function as the maximization of entropy from available means. In other words, life is the most efficient way to accelerate entropy given a chemical condition.

Evolution, then, could be explained in the same vein. If more complex life forms increase entropy at faster rates, then, there should be a natural push toward the creation of such life. Simpler life, should lead to more complex ones and this is fundamental to evolution. However, from a system perspective, if such a transformation leads to aggregate loss in entropy creation – either due to volumetric loss of simpler life or constraints placed on them by evolving complex ones, then, evolution can lead to suboptimal performance. Since the physics of entropy cannot be refuted, it has to be that complex life is fully capable of compensating for any loss of entropy creation from entities they evolved from. The evolution of the brain, a highly inefficient organ, in mammals, certainly fits the bill.

Evolution, may be better explained by physics, as a process that accelerates the entropy of the universe

Friday, June 21, 2013

Single City

A recent study from the Santa Fe Institute shows that cities are excellent systems – they are efficient social reactors and networks. As they grow, they make larger and denser social webs available to each participant, without any additional effort from the individual. The study does not suggest any diseconomies to scale and maximum limits.

Conceptually, then, the larger a city is, the better. This implies that the best design for humanity is to establish a single city that houses all of the World’s population – about 7 billion currently. To reduce extra-terrestrial risks from such a concentration, perhaps a second city can be established, at a location diametrically opposite to the first one. The second city, a mirror image of the first, could be left vacant for emergency use only. With distributed 3D printing, conventional manufacturing can be eliminated. Power production can be designed at mega scale with concentrating solar and wind farms away from the city, with efficient transmission back. Vertical farming may allow food production in close proximity. Excess power production may ultimately eliminate the need for farming, with instant conversion of power to food or direct consumption of energy instead of food.

With a single city design, most of the World can be returned to its original state. Such a system will have higher diversity and associated flexibility to mend itself after shocks.

Sunday, June 16, 2013

Predictive scans

A recent study funded by the National Institute of Mental Health shows that brain scans before and immediately after the initiation of a treatment hold valuable information to predict efficacy. Both the discovery and the practice of medicine, still, largely depend on trial and error. Multi-factorial complex responses of the biological system to CNS therapies have resulted in significant noise in the collected behavioral data – creating havoc both in R&D and in healthcare providers, not to mention the payers. The process of inventing and applying medicines for mental health seem fully antiquated in the presence of available technologies.

Pharmaceutical R&D and healthcare, albeit being technologically advanced in certain dimensions, have been lagging in the analysis of available information. PET scans, an old technology, show brain activity in highly analyzable matrix, providing an almost instantaneous path to measure efficacy of a drug. Such scans may also provide a method to determine optimal dose, something that researchers were forced to ignore. The 7 billion specimens of humans across the world show such genetic diversity that it seems unlikely that popping a standardized amount of the NCE within standardized time intervals, will be optimal treatment.

It is time both R&D and the practice of medicine embraced the tools of analytics – something boring engineers have been accustomed to for many decades and it has resulted in handsome returns.

Saturday, June 15, 2013

Democratic network

Recent research from the City University of Hong Kong and the School of Management, at Beijing Normal University, shows that the click stream is not dominated by a few hubs – but rather smaller and relatively unknown websites could have significant influence on network traffic. The basic notion of scale – still a dominant theme of strategy for consulting firms and business schools alike - has been irrelevant for over two decades. Somehow, the PowerPoint gurus of corporate board rooms, have been a bit slow in recognizing it. And, they have been successfully draining shareholder value in fees and escaping before the owners are able to recognize the scheme.

Two basic ideas – content is important and people are not stupid – have escaped many. The “hubs” - some perfecting algorithms through neural nets trained to seek cat videos and others spawning cloud capacity like escaping water from the Amazon, may have missed the mark. Scale does help you but it is not a life saver. Content is more important and increasingly content is inversely correlated with scale. As the knowledge content of society increases, business models based on legacy ideas and those frozen in time – either mesmerized by monopoly profits or just sheer ignorance, are bound to fail. Such enterprises, akin to autocratic regimes with little understanding of optimal polices, are now run by people who have lost touch with reality. As they yahoo themselves to mediocrity, some demanding physical presence at the workplace and others counting earnings per share – apparently believing it is the most important metric, there is life beneath.

Democracy – a concept that never fails to bring the best possible outcomes – will continue to dominate networks, societies and the universe.

Tuesday, June 11, 2013

Complex stability

Recent research from the University of Southampton shows a mechanism that self-stabilizes complex systems – such as the Earth’s environment. When the system and its participants are affected, a control system emerges to stabilize the environment. This has implications for many different systems including the financial markets and large companies.

If the financial system is akin to a self equilibrating complex system, that would mean that it is more likely to mend itself after shocks. This means that there is a strong mean reversion in asset prices after shocks. This will challenge the assumption that asset prices follow random walk and this may cast doubts on the efficient market hypothesis. Similarly, predictions of the demise of large and complex companies are premature as unknown mechanisms appear to sustain them and their participants even though most do not demonstrate competitive advantages outside monopoly power.

In general, it appears that the higher the complexity of a system, the more likely that it nourishes self-equilibrating control systems that kick in after shocks. Complexity could be a valuable survival trait for inefficient and naturally unstable systems.

Monday, June 10, 2013

Mathematical language

Recent research from the University of Texas demonstrates how Markov logic chains could be used to assign a probability of “closeness” of a word or phrase to a paraphrase. This appears to finally break the shackles of determinism and prescriptive rules in natural language processing. Decades of lull in artificial intelligence could be attributed to those trying to ram a square peg into a round hole. Chess and Jeopardy have given certain technologies respect they do not deserve. More importantly, research in that direction holds everything back. It is unclear if computer scientists will ever accept that intelligence is not rules based.

Intelligence, however, is not rules based. Engineers with traditional training find it hard to move away from this concept just as the business students who were given antiquated methods to determine the value of something, fail to consider alternatives. This is a significant failure of the education system that appears to favor the past and discount the future. Why else would we have people in venerable companies stuffing rules into hardware in an attempt to beat a human or business students who adorn spreadsheets with numbers neatly adding up, down and sideways as if it means something. Language is a good example of chaotic outcomes that start with simple patterns. Incremental addition of random noise renders it completely incomprehensible to those with linear brain waves.

If the education systems are not able to catch up with the present, we may be fast approaching a regime in which education has negative value.

Sunday, June 9, 2013

Fast decisions

Recent research from the Laboratory of Behavioral Ecology and Evolution at Seoul National University demonstrates that birds, specifically magpies, make fast decisions based on human gaze. Clearly, selection advantages have provided them with the ability to both collect and process information from human gaze efficiently. Although the human gaze, on the surface, appears to be a binary phenomenon – present or absent, it is possible that the birds may be using finer details of the available information in the decision processes.

If the speed of decision-making is a skill that is passed on from generation to generation, then, it should point to observable differences in the bird brain. If the skill has been improving over time, then, it is unlikely that it is an acquired skill. If the structure of the brain, indeed, is changing, it is interesting to think about what is happening in the case of humans. The speed of decisions was critical early in human evolution but it seems less important now. If evolution did select for speed, then the current crop of humans are thrust into an unfamiliar environment. Excluding certain war situations, video games and financial trading (that is largely taken up by computers), the quality of decisions is more important than the speed of making them. In other words, the magpie that is able to discern finer shades of human gaze by analysis may ultimately win the game. 

Trigger happy Homo-sapiens may have been successful in eliminating slower Neanderthals but one has to wonder if this is another evolutionary quirk, that resulted in sub-optimal outcomes.

Friday, June 7, 2013

Stress-less belief

Research from the University of Oxford, recently reported in the Journal of Experimental Social Psychology demonstrates that “the belief in science,” increases with stress. In trials where subjects were known to be stressed in the experimental group compared to the control, they found that the stressed group are more likely to agree with seemingly innocuous statements such as “the scientific method is the only reliable path to knowledge.” This points to the general observation that it is “belief” that acts as the stress reducer. An equal number of people may be using “the belief in religion” in a similar vein.

This makes sense from an evolutionary perspective. Early days of homo-sapiens were not pretty – animals and cannibals were hunting them down and stress was the primary attribute of living. One had to believe to survive, for without it, everything looked bleak. Burdened with a powerful organ, an evolutionary quirk, humans could look forward and see a worse tomorrow. The uncertainty was constant and they were completely ill-equipped to survive in the environment they were afforded. The elements reduced them to less than a few thousand – before inexplicable luck launched them higher from near extinction.

Stress has been with humans ever since. And survival, thus, selection depends much on how to reduce stress. Belief has become a critical defense mechanism in this battle. They started believing in inanimate objects that resembled something. As society developed, they moved onto legends and stories – that will someday morph into organized religion. Then, science arrived – with similar but potentially superior constructs that could explain what is observed. It slowly ate into the market share of the dominant provider of belief – religion. Science, however, could never appeal to the masses as belief is not about explaining the present - it is more about obscuring the future. The inability of science to give meaning to ignorance will likely hold it back for ever.

Believe to reduce stress – it does not matter what one believes in.

Monday, June 3, 2013

Technology lift

A recent study from the Indian Institute of Technology, Madras argues that making cheap tablets available to millions in India may lift them out of poverty. This is a path worth pursuing as poverty is fundamentally driven by lack of access to information and capital. The competence and even desire can be shown to be uniform across the masses but market failures in information have held nearly 1/3 of the world’s population back and pinned them to incurable poverty. This is a shame for a civilization claiming to have made progress in virtually every dimension but has little to show for it.

Lack of access to information is the worst contemporary societal disease, as it leads to poverty, disease, crime and moral decay. As the leaders of countries across the world clamor to build and enhance physical infrastructure such as roads and bridges, they forget the leverage afforded by improved information infrastructure. The world has already moved on from the need for physical transport to mental engagement. With 3D printing around the corner, the trucks, trains and airplanes that carry physical goods are about to become obsolete. Further, with computer languages and mathematics rendering the world flatter than a pancake, the only advantage remains to be in information and knowledge.

If the IIT hypothesis holds good, then the distribution of millions of tablets across the country at $50 a piece, may usher in a wave of innovation. If the leaders of the country are serious about making a difference, here is a golden opportunity to run an experiment that cost nearly nothing. But then, one can never underestimate bureaucratic friction, corruption and sheer incompetence in policymaking, in a country, vastly famous for it.

Wednesday, May 29, 2013

The goal

What is the goal of an individual? With 7 billion people around the world with little genetic diversity but with a wide variation in perspectives, that include sex, country, language, religion, physique and science, the question is what one should attempt to optimize. In a zero order society such as ours where optimization is always local, it is a good thought experiment.

The problem presented, then, is related to the probability that humanity will pull itself to the next stage. It seems unlikely – diseases have to be cured, the environment has to be mended, happiness has to be restored, art and philosophy have to triumph over prescriptive engineering and science, money has to be abandoned, knowledge has to become the primary currency of transaction and meritocracy has to prevail. Yes, it seems unlikely, but many attempted to achieve much less in the past.

What is the goal for an individual in the precious amount of time she is afforded? Could she try to change the system, society and the culture that envelopes her – or should she simply drift away to obscurity, complying? Should she look around, see what others do not see, make others cannot make and progress thoughts, others cannot have?  Should she redefine who she is and in the process change humanity bottoms up? Should she challenge the status-quo or accept the preprogrammed outcomes? Should she become successful and then change the world or fail attempting early? Should she broker thoughts across time and space to connect and then disconnect?

What is the goal of an individual? Is it comprehensible?

Monday, May 27, 2013

Inflexible homes

A recent study from the University of Warwick statistically demonstrates what could be intuitively clear – policies that result in high home ownership reduces labor and location flexibility, leading to higher unemployment rates. This is an important observation. However, what the study may be ignoring is that the “job market” has changed and any analysis of historical data on jobs and location flexibility may not be valid.

Many are unwilling to own up to the fact that there are no more “jobs” in the conventional sense of the word. With advancements in 3D printing and communications technology, both manufacturing and services industries are being revolutionized. What matters most now are skills and not presence, creativity not political savvy, imagination not optimization and execution not meetings.Those seeking jobs and those who are attempting to hire, should seriously reconsider what they are tying to do. If having a home, ties somebody down to a location and that reduces her employability, then, she may be seeking the wrong job. Equally importantly, if the hiring manager, however yahoo great she might think she is, insist on the presence of the employee on location, may be simply missing the whole point.

Studying historical data is good – but doing so without the context of the changing world, may not be.

Saturday, May 25, 2013

Memories

As humans find ways to live longer – first comprehensively beating out the bugs and then tackling some autoimmune diseases – it appears that the brain is taxed more and more. It has been the workhorse, ever ready to monitor, maintain and occasionally think, but it was never designed to last this long. A quantum computer, no less, but constrained by its biological origins and lack of flexibility, the brain has been a puzzle to those who attempt to use it. It stores information but retrieves it less efficiently, allowing humans to be ordinary animals, inaccurately recollecting the past and happily speculating about the future.

Memories of the brain, then, are what sustain humanity and the loss of them is simply disastrous. As the sane departs into the folds of history, they take those precious memories with them as there is no cloud, with sufficient capacity, to store it all. What a tragedy that humans have not found a way to preserve their own memories as the loss of information from those leaving and those who left but yet alive, is infinitely costly. Housed in small spaces, the brain has been front and center to the tribulations of generations in the past and more yet to come, yet it shows flashes of brilliance and compassion with failed attempts at integration and introspection. What could be done to preserve its creative intentions, its ability to seek the truth, its actions to make things right, its attempts to resolve the past and its valiant attempts to forecast the future?

The brain, the final frontier, will likely elude humanity forever as they travel in deep space, accumulate wealth and fame, explain particles and energy, kill and mutilate in the name of religion and politics and assert superiority over the known universe.

Friday, May 17, 2013

Better, older..

Recent observations (1) from a binary star system that includes a neutron star dancing with a white dwarf, indicate that Einstein's general theory of relativity, nearly a 100 years old now explain the seen gravity waves, the best. This is further affirmation that the dark ages of science is prolonged, with no foreseeable end. Fancy theories and heavy steel never measured up to sheer intellect and imagination.

The real question for physicists is where they go from here. Now that the Higgs Boson is proven to be “true”, what is next? Perhaps, a more exotic version of the Boson or maybe another trip to the particle zoo to pick an unproven fantasy, that may require a bigger and more powerful atom smasher. In either case, the expected progress in knowledge is close to zero. Both status-quo education systems and the process of awarding research grants have to change substantially to make any difference here. Awards and prizes, mere nods to mediocrity, who strive to discover and publish, peer reviewed or otherwise, simply make the situation worse. Further, engineers clamoring for “bigger” and more interesting projects simply aid and abet useless experimentation.

It is time to return to paper and pencil, the forgotten art of thinking, instead of measuring.

 

Einstein's gravity theory passes toughest test yet. Published: Thursday, April 25, 2013 - 14:10 in Astronomy & Space

Friday, May 10, 2013

Morality

A recent article (1) proposes that the mere existence of markets substantially erodes moral value, subjectively defined as the willingness to save the life of a mouse (used in animal experiments) instead of receiving money by trading them. Further, the authors argue that multilateral markets adversely affect morality more than bilateral markets.

These are interesting observations. If one were to accept the definition of morality as the ability to reject money to save a life (of a mouse), then, lack of markets will certainly enhance it. For, without markets, one cannot transact and hence an individual with no access to markets will be unambiguously, the most moral. At the other extreme, with large multilateral markets – and at the limit, with instantaneous and unrestricted access to infinite markets, the proclivity of an individual to transact (for money or other such benefits) will be the highest. Such large markets will always reduce transaction costs and participants in these markets will always be less moral (according to the definition) than those with no or restricted access to markets.

The real question is how one should define morality. Is morality a property of the individual or does it depend on the environment presented to her? Does morality change with the context, space and time of the issue at hand? Is morality demonstrable and measurable? Is morality binary or continuous? Does morality differ across ethnic and geographical regions? Are moral people better and if so how? Is morality valuable to society, or is it costly?

It is always important to define what is being measured before setting out to measure it. Also, passive assertion of societal benefits from subjective constructs such as morality can lead to the wrong conclusions.

(1) Morals and Markets Armin Falk 1,*, Nora Szech 2,
1 Center for Economics and Neuroscience, University of Bonn, Bonn, Germany.
2 Department of Economics, University of Bamberg, Bamberg, Germany.

Friday, May 3, 2013

Analyze this!

A recent research demonstrates that application of machine learning techniques applied to brain activity in a dream state do well against activity found in waking responses to visual stimuli (1). In general, visual contents of dreams seem to correlate well with those observed when the brain is awake.

The brain, albeit being a non-linear quantum computer, harbors characteristics that could be understood by traditional techniques. Machine learning techniques have been improving although most are extensions of deterministic statistical methods, engineers have been using for many decades. The observation that even such a crude technology is able to correlate brain states is encouraging and it may imply that the practice, if not the theory, of the brain is understandable. Research into biological and artificial intelligence progressed along opposite directions with little in common. The ability to build robust models from brain patterns that do well in predictions in different brain states could open a path toward collaboration among experts in these different areas.

Convergence in technologies and ideas is the most powerful concept yet. Segmented research is increasingly less productive.

(1) Neural Decoding of Visual Imagery During Sleep
T. Horikawa1,2, M. Tamaki1,*, Y. Miyawaki3,1,†, Y. Kamitani1,2,‡

Thursday, May 2, 2013

Shutting down the brain

Recent research from UCLA demonstrates that rats require less brain power in a virtual reality than in real world. This is an interesting observation. Although the UCLA experiment defines virtual reality in a narrow sense, one could broaden the concept. Conceptually, humans with routine lives are in a sort of virtual reality that requires less brain power to live in and thrive. Such a programmatic life is the norm for most, following traditional careers.

The larger question is whether such an effect has evolutionary implications. If the probability of success is higher when you find yourself in a virtual reality – a repeating game with less volatility – then they are more likely to be selected. Most large companies of today fit the bill. This means that the skills to adhere and optimally shut down parts of the brain that are not useful are the most valuable. If so, it is possible that humans may slide down the brain power curve as they evolve. The brain, already a highly expensive organ consuming 20% of available energy, can only be justified if it is fully deployed. Why buy a super computer if all one needs is a PC running a spreadsheet?

We may be precariously positioned in the evolutionary process, that never led to optimal outcomes in the past. The most likely outcome appears to be more brawn and less brain – a return to the origins for humans.

Thursday, April 25, 2013

Disconnected

Recent research from Cornell University hypothesizes that life in the universe may have originated 9.5 Billion years ago. The authors, Alexei A. Sharov and  Richard Gordon do this by looking at trends on Earth and using a linear regression against the Log of the Genome size – a measure of complexity. See the chart below.

This has several implications.

First, with a universe only 13.7 billion years old and suffering from an initial violent epoch dominated by QSOs, this observation means that life initiated at the first available opportunity – just 4 billion years after the inception of the universe. As the solar system does not demonstrate any advantages over numerous other alternatives, it is likely that life originated across the universe, 10 billion years ago.

Second, the only known life progression has taken nearly 10 billion years to reach a level of complexity that aids interstellar communication capabilities. If this relationship holds in the universe, then the complexity of life everywhere may be approximately the same as what is found on Earth. Current capabilities of humans to communicate thru interstellar space are primitive. With similar expected capabilities elsewhere, the chance of a contact is close to zero. Further, current theory allows a very limited window of space-time for possible communications and that further constraints this possibility.

Finally, this observation makes it clear that life arrived in the solar system from outside – perhaps just 4.5 billion years ago. The visitors already harbored sufficient genetic complexity and spread highly successfully. What is not known, however, is whether the progression could have been different given different conditions.

Extra-terrestrial life has been a fascination for humans from the beginning. It appears that the effort expended in this direction is a waste of time. Humans may be better off focusing on how to protect the Earth and borrow sufficient time to evolve into something, bit more interesting.

Monday, April 22, 2013

Quantum efficiency

Recent research from the University of Chicago hypothesizes that quantum coherence may play an important role in the highly efficient conversion of energy in photosynthesis. This is an exciting fundamental finding that may open the doors for the creation of efficient and possibly organic solar cells. This further illustrates that most life, including plants, have figured out how to practically use quantum effects.

Humans are heavily handicapped – as they seek to improve incrementally based on well established frameworks. Most of what we proudly hold as true, are irrelevant and in most cases send us on dead end pursuits. There are enough signs that technologists are on a wrong track to boredom – but they are shackled by an antiquated education system and their prospective employers are chasing next quarter's earnings. This spiral – well constrained by the established notions and status-quo structures, can have only inferior outcomes.

It is ironic that humans are the last ones to the quantum party.

Saturday, April 20, 2013

Fine tuning emptiness

Recent findings that the universe is older, is expanding slower and it harbors more dark matter than energy compared to what was previously thought, are attempts at fine tuning a model, most are unwilling to let go. The basic idea that the inhabitants of a space-time bubble could not understand the system that governs itself, appears to have been lost. Only imagination, not experiments, has any chance of breaching that hard constraint.

Knowledge, then, could only come from philosophy and imagination, with science and technology delegated to noise created by those who do not perceive the constraints. Ironically, science is most apt at showcasing the constraints even though the underlying theories valiantly attempt to surpass them. There was a fork on the road – perhaps couple of centuries ago - when humanity eagerly marched down the scientific route, that was predetermined to win the tactics but lose the plot. The question is whether there is a possibility of convergence of the different ideas to substantially expand knowledge. That will require an integration of contrasting belief systems – science and philosophy, included.

Not all hope is lost – As a beautiful mind remarked nearly a century ago - “Logic will get you from A to B, but imagination will take you everywhere.”