Stupidity of the crowds

Recent research from the Max Plank Institute for Psycholinguistics in the Netherlands show that Chimpanzees quickly copy arbitrary behavior of others in close proximity. The researcher noticed how a female chimp named Julie repeatedly put a blade of grass for no apparent reason in her ears and that behavior was copied rapidly by other chimps who observed it. This has implications for humans, who share most of the genetic make-up of chimps. Copying observed behavior of others may have had some evolutionary advantage for humans – at the very least it may have allowed them to experiment. It appears that such a notion is now built into the psyche of humans. This may have some negative consequences in the modern world.

For example, in the financial markets – there appears to be a tendency to follow arbitrary behavior of others, however stupid that could be. It has been established that in large markets, outcomes are generally efficient even though individual participants could be irrational and stupid. However, if copying is an in-built behavior pattern of the closest cousins of the chimps, then one could envision persistent excursions away from efficiency. Hedge funds, for example, may arbitrarily attempt a trade that could be replicated by many others – not because they understand it but because it is compelling to copy. The short term volatility in the market could be explained by such chimp-like behavior.

This behavior is equally apparent in real markets. For example, it is often observed that in large meetings within operating companies in which the participants are ambivalent as to the choices presented, a preemptive selection decision by one is quickly followed by many. In such experiments, the crowd could reach diametrically opposite decisions just because the first mover had preferences in one direction or another. Large companies are generally managed by chimp-like instincts exhibited by one and quickly adhered to by others.

It is ironic that large-brained animals – chimps and humans – may be more prone to group-think than others such as cats, who exhibit more individualistic preferences.

Maximizing children

Recent research from the University of Wisconsin-Madison shows that early stress – such as poverty and abuse - has a lasting deleterious effect on children’s brains. Stress at ages less than five seems to impact even the structure of the brain with predictable negative effects all through life. Policy tacticians, counting today’s debt and tomorrow’s votes and busy shutting down the government may be well advised to take a more holistic and macro view of societal costs and health.

Education and health with unambiguous positive network effects on society could substantially influence the trajectory a nation or society could progress in. Now, it appears that even micro-effects such as early childhood stress may have to be considered in the design and provision of healthcare if societies want to nourish healthy, productive and intelligent future generations. Maximizing human resources is an important strategic goal for any society and if that is understood then one could delve into policy implications.

Humans, born totally incompetent and unprotected, require systematic nourishment in early part of their lives. Evolution seems to have assumed that societies would care for the children and accordingly selected a design with a large brain attached to a feeble body that can be pushed through a narrow canal at birth. Such a design requires a system of support, for without it the results are obvious. But in more subtle ways, even if the children survive physically, it appears that they get hurt mentally if sufficiently protective environments are not afforded. The brain, a fantastic organ, requires close attention in the formative years and it appears that modern societies do not understand this well.

More practically, there are two primary questions modern societies have to grapple with. First, given that a child requires specific considerations at least in the first five years, should parents be punished if they are unwilling or unable to provide the required environments for them?. Since the child is a luxury item and a choice, more thought and planning are needed prior to a decision to have children. And, second, assuming no policy will be perfect and that transitions will be problematic in any case, how should societies treat children born into environments unable to provide the evolutionarily required conditions?

As the politicians and policy makers – some octogenarians – are utterly incompetent and incapable of understanding and thinking about the future, it seems that we are entering a very problematic time. “Serving the country,” is not a job and it requires people who recognize at the very least that they have become ineffective.

The age of AI

Computer scientists from the University of Washington and the Allen Institute for Artificial Intelligence in Seattle claim that they have created the first fully automated computer program that teaches everything there is to know about any visual concept (1). Artificial Intelligence has been the most hyped and the least effective of concepts for over three decades. Determinism and rules based logic – underpinnings of the shallow understanding of human knowledge by humans, have put a lid on progress in this field and it appears that such a constraint could be for ever.

Watson, the current champion, has perpetuated the same ideas even though it dazzled ordinary humans by its ability to memorize rules and retrieve them fast. Not impressed, the autonomous car maker of the West, unleashed the “neural net” of immense proportions on the web where it invented search, only to realize that the beast only went looking for “cat videos.” And now, some academics claim that all they need is raw computing power to create something that will learn “everything there is to know.” It is indeed impressive.

Artificial Intelligence is showing its age. No amount of computing power is going to help humans learn how stupid they really are.

(1)http://esciencenews.com/articles/2014/06/13/new.computer.program.aims.teach.itself.everything.about.anything

Homocentrism

Nearly 500 years ago, a heliocentric view of the solar system was proposed. It was reluctantly accepted over time – by the religious and not so religious, as it fundamentally shook the core belief system of humans – the idea that they are not at the center of the universe. Further intellectual excursions into defining the universe, first as infinite and then as very large, possibly supplemented by alternatives, have been eating into the psyche of humans, as they struggle to forfeit superiority.

They never really let the idea go. The fact that Earth revolves around the Sun and the solar system revolves around the center black hole of the Milky Way and the galaxy itself revolves around the center of gravity of the local group, that represents a tiny part of the space-time continuum of one of the many possible universes, never sinks in. Astrophysics and Astrobiology, arguably the most progressive of scientific disciplines of the present, still invest significant resources looking for Earth’s twins and Human’s alter-ego, across the universe. They argue that life will be found on an “Earth-like planet,” rocky with a density of 5.5 grams per cubic centimeters, revolving around a “Sun-like” star in the “habitable zone,” that affords the same temperature and radiation shields, with an atmosphere replete with oxygen and oceans with plenty of water to drink, bathe and perform religious ceremonies. Such is the power of homocentrism that leading science fiction writers find extra-terrestrials travelling to Earth to be similar to humans - eyes, legs, hands and a brain, supported on long and flexible necks, albeit with a different skin color, something humans hold dear. The less sophisticated ones create crafts that travel across space-time and find creatures, well dressed and fed, ready to converse in English.

The discovery of thousands of exoplanets has led to a feeding frenzy and heart-break for most for they are yet to find something with the precise dimensions and density of their beloved home. Exolife has eluded them and this has forced them to lower some standards. Some are now willing to accept that the Sun is no ordinary star and that there are ten times as many dwarf stars as Sun-like stars with one-tenth the energy, occupying space near and far. This has expanded the “habitable region,” where Earth’s twins would be found, albeit such a discovery may not be as exciting. On that Earth, just next door, orbiting a dwarf, they still hope to find organisms, animals and human clones of similar proportions, aerobic and hydrophilic, living, fighting and killing each other, occasionally looking for their twins elsewhere. They are ready to sacrifice the Sun but not the Earth, an ironic twist to the story of “scientific discoveries.”

Homocentrism, the curse of humanity, may have substantially limited humans.

The value of natural assets

A recent paper in the Journal of the Association of Environmental and Resource Economists highlights some issues most finance professionals either do not understand or tend to forget. However, it falls short of describing how value emanates from a basket of interacting options on the underlying tangible stock of natural assets. Such frameworks have been available for decades, but business schools and finance professional tend to focus on how to better count today’s money rather than value tomorrow’s options. Machines are fully capable of counting money and it is unclear why industries such as finance and accounting employ so many people with inferior skills compared to computers.

However, “the strategic thinking” exhibited in the paper should also be approached with caution. Ever since humans arrived on the planet, they have been worrying about “running out of” natural resources. This is understandable from an accounting sense for non-renewables and from a management sense for renewables, the latter if optimized with well understood portfolio techniques provide growing and prosperous paths to the future. Such a thinking, however, is based on static assumptions on technology and human ingenuity. What environmental economists (and non-economists) do not fully appreciate is that technology discontinuities could substantially remove the concerns of previous regimes within very short time-spans. So, although it is certainly important to manage the stock of fish, forests, ground-water and other such resources, it is much more important to effect a leap in technology that could make such concerns go away. Current education systems provide skills heavily focused on the present but not the future. This is why the “singularity,” feared (or hoped for) by the “intelligentsia” may never arrive.

Although the paper does not address this, from a policy perspective, it is also important to prioritize – For example, fish, forest and ground-water could become the least of our concerns if an asteroid of measurable size heads our way. Although self-driving cars and phones that glow under water are laudable goals for the current technology leaders, they should realize that humans are imprisoned on a small planet in the midst of an unbelievable amount of space debris. It is a miracle that we have the opportunity to think about managing our forests better.

The data problem

It appears that the “data age” has arrived. Aided by century old Mathematics and latest technologies for the collection of large amounts of data, nearly everybody seems to be excited about the insights that are going to be revealed. Will data prove the existence of God? Will data tell us precisely when each of us will depart from this Earth?  Will data finally usher in the long feared “singularity?” Are data enough to create insights and make better decisions?

Economists and scientists have a checkered history in the use of data to prove what they believe. A hypothesis, once stated and believed, can always be proven with data. The man from France who made a strong case for wealth redistribution may have to now relook at the raw materials he used to build the leaning edifice. The listeners to the Satellite echoes and the finders of the ocean pings, who knew precisely where the metal bird fell and sank may now have to relook at the data they collected and analyzed. Analyzing data with preconceived expectations have proven to be dangerous in many fields – Medicine, Economics and High Energy Physics, included. Data have helped many careers and it has killed many others.

Data are not enough – Common-sense and logic are still important.

Reaching Type II

Over the ages, many have wondered if humans could transform into a Type II society. Different definitions exist for Type II society, one humans could aspire to, most of which are related to technological capabilities to harness and use energy. Although this forms the foundation of measurement, a more holistic approach will be to combine such metrics with the characteristics that are likely in such as civilization.

In the status-quo society, humans are such poor users of available energy, most waste time thinking about sustainable population rates and running out of fossil fuels and minerals. The most popular worry of humanity today – global warming – would be such a trivial matter in a Type II society with zero cost energy. With a nice example of controlled fusion in close quarters, the Sun, which produces many times more than what is currently consumed if humans could harness what reaches the surface through highly inefficient current technologies, it is ironic that humans have not progressed further on fusion.

One characteristic of type II societies will be a dearth of tactical issues – problems that consume inferior societies, never able to solve them strategically. Such issues include, in addition to directly energy related problems, other attributes such as death, taxes, wealth, ego, pain and all segmentation schemes – such as class, country, race, region, religion and physical characteristics. There will not be any needs in a Type II society – such as food, health and information – with zero cost energy comprehensively providing food on demand, the cure for death making health irrelevant and all information permeating through every thinking cell. In Type II societies, with aspirations to reach Type III in the future, biological systems may simply reduce to thinking machines, with little utility for any other noise. If the status-quo Mathematics is the right way to think about it, then, all thinking cells have to connect in a massive network able to self propel to the next level of imagination.

To assess if a Type I society such as humanity is showing promising signs of moving toward Type II, one may measure a percentage of the population who could imagine such an outcome. By any measure, humanity appears doomed as most of the 7 billion appear locked in their own little boxes and an embarrassingly high percentage still looking to satisfy basic needs. The rest spend most of their time worrying about death, taxes, ego, pain and segmentation as if these are the most important issues.

Tactics weigh down on humanity and it seems highly unlikely they could rise above it.

The elite racists

Racism has been in the air – some utterly stupid and others less so – some allowed themselves to be taped and others less so, some very rich and others less so, but most sharing the same characteristics. Racism is not about the words you utter but the actions you take.

I have seen racists before – brain surgeons, technologists and graduates of IV leagues who went down to South America to “study cultures.” They have been explicitly racists but it did not move a single muscle in the beast’s infrastructure, for it was expected and accepted. Graduates of the elite schools and rejects of the elite consulting firms, for they were not corrupt enough to land in jail – racism was not enough for them to rise to the top. They practiced racism all their lives but still, they could not become the one behind the white masks. They shunned anything beneath them as they portray – schools, consulting firms, investment banks – for if you are not from the one – gold coated and corrupt, you could not be accepted to the country club.

Racism, a highly sophisticated notion, is everywhere – not just in audio tapes and it is practiced by the best and the brightest of the world.