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.

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.

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.

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.

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).

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.

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.

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.

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?