half baked ideas

Graph is a term used in mathematics for a spider web style series of points and links. And because of the web and in particular, social networking (think ‘social graph’), its understanding has come into the mainstream.

A weighted graph, treats the links like little springs, where the weighting creates forces in the links which then determine the shape of the spiders web.

Reading this article on the emergence of what may be imaginary epidemics in the US, such as autism and bipolar disorder, it struck me that they could perhaps be predicted and identified using a weighted graph of incentives. The older I get the more it seems to me that people very rarely take a view that isn’t in their own interest (people in cities take liberal views rather than liberals living in cities). Conspiracies rarely seem to be real because people are not that organized and that this rather than active collaboration creates the illusion of conspiracy.

In other words:

(a) Its in a drug company’s interest to believe in bipolar disorder to sell drugs.
(b) There is no incentive for a Doctor to challenge a diagnosis of bipolar disorder, she could get sued for not but won’t for doing so.
(b) Parents and human beings in general want simple concrete answers that they can act on – so there is a tendency to label people as having diseases when they are nebulous. (i.e. you won’t get wrong diagnoses for missing a leg but you do for autism etc.).
(d) The scientific community will bolster the idea of the existence of the disease, under social pressures (this one is perhaps the hardest to buy, but here is a real example, where a paper on ADHD rates in the US, which are 20x that of say the UK, looks at whether it is disease caused by Us lifestyles or is under-diagnosed abroad. It ignores completely, the third possibility, that it is over diagnosed in the US. It’s possible that this is because it is not in the authors’ interests to espouse the heresy that children are not suffering from a disease, because anything to do with sick children is an emotionally charged subject. In other words, the consensus has swung away from the truth, due to self interest weightings and its a subject where challenging the consensus will make you look wicked).

An incentive graph would show that autism diagnoses are in everyone’s interest and so will self emerge, passively, without any active conspiracy and independent of whether they are true or not. It would consist of various actors (e.g. doctors, drug companies in the example above), and various opposing stances (autism, not autism).

e.g.
Autism—(diagnosis)—Doctor———-(diagnosis)———-Not Autism
Autism—–(epidemic)—–Drug company——–(epidemic)——–Not Autism
etc.

Each of these 2 dimensional mini ‘tugs of war’, where the dashes are less on the left indicating a percentage bias towards the stance on the left, would create a three dimensional graph when multiple stances were introduced for each actor.

Anyone want to help me build an incentive graph application?

For organisms, their shape is the phenotype, which is created by the genotype – the DNA. A true family tree is ultimately based on DNA. There is no exact equivalent for man made things, however some objects are more like the phenotype and others more like the real DNA, tools vs the things that make them.
The Midnight Moses explains what I am getting at better: “Every single manufactured object was created using a tool or set of tools, and every single tool itself was manufactured using a tool or set of tools, and so on. Every single manufactured object, therefore, possesses a vast and complicated ‘family tree’ that pares and branches back through time”.
Wouldn’t it be fun to be able to trace the family history of Large Hadron Collider back to a flint axe. Ironically, since the LHC is a demolition tool for making sub atomic particles, you could potentially go full circle.
How could this be done.
First you need to separate what a tool is from any other type of object. A tool is something that can make another object. Some tools make objects that in turn cannot make another object (this is like having infertile offspring). Some tools make objects that have already existed before, and some tools can make new objects that have never existed before. A chain of tools that can make new tools that can make new tools that couldn’t have been made before, is the most interesting one from a genealogical perspective.
The process is similar to genealogy but with three differences: (1). a tool can have components with different sets of parents for each (parents being the tools that are needed to make it), for human beings, the same parents make the arms as the legs, body, liver, head etc. (2). each component can have more than two parents (there might be three of more tools that needed to exist before something could be made). (3) Tools potentially keep having offspring forever (they don’t die), a simple axe might be needed to develop something new, today.

New Scientist has a piece on re-assessing economics after the crash.
I’ve a half-baked idea here, that is, one the one hand, obvious, but I haven’t seen spelled out anywhere: that free-markets are prone to viruses.

Clearly some memes propagate despite the fact that they aren’t true: astrology; homeopathy etc., the memetic equivalent of viruses.
Much of free-market ideology is based upon application of darwinian ideas to economics.
Therefore, even if free-markets do evolve naturally under natural selection, not all market forces will be benign, there could be the free-market money equivalent of viruses. I’ll call these ‘benes’ (as in bean counter, slang for accountant).
These benes could be merely be specific memes to do with money – such as a speculative or panic rumor, or indirectly such as businesses based on memes e.g. horoscopes. But they could equally be financial instruments, business practices or business environments themselves that are attractive and therefore become widely used, but are damaging to the free market that creates them. (An example of the latter might be lobbying, where businesses such as Verisign, for example, protect a monopoly over .com domain names more effectively by seducing legislators than being competitive.) These are somewhat different from memes since they become much more like organisms, with a life of their own. In some cases, like the SWIFT transaction system or retail bank buildings, they arguably have a phenotype.
The idea that capitalism is prone to periodic viral infection through benes, seems like an obvious thing to investigate. It also creates a middle road between the doomsayers that claim that macro economics is dead and the libertarians who say that it would have been OK to let everything fail. The message: ‘Capitalism works overall, but be careful’. Just how careful, might be something that could be ascertained scientifically.

Chris Nedin writes about the analogy of evolution in a fitness landscape where fitness equates to climbing a mountain, and recommends turning the fitness landscape upside down:

“Adaptation is not climbing up Mt Improbable, it’s climbing down Pit Improbable! The pits are hard to find, but once in, it’s easier to go down than it is to back out, and if you adapt too far, you are trapped in a cul-de-sac with no way out when the environment changes.”

Although this makes sense, the very fact that we can flip the landscape shows that evolution requires a proper explanation in terms of physics, where the ‘pits’ are, perhaps, energy wells determined by the relationship between evolution and entropy.

The fitness landscape is a visual tool to help us understand eco-systems, rather like the rubber sheet visualization of gravity in General Relativity. Neither the geometry of space-time or fitness landscapes are actually stretchy 2D sheets in 3D space. But like gravity, which exists in curved 4D space, there may be a real geometry of evolutionary fitness landscapes.

The equivalent of ‘matter tells Spacetime how to curve, and Spacetime tells matter how to move’, would be something like:

‘organisms tell the fitness landscape how to curve and the fitness landscape tells organisms how to adapt’.

In that phrasing the fitness pits work best.

Now if only we knew the dimensions, let alone the geometry.

Link

John Cassidy has a great review of George Soros’ new book, ‘The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means‘.

Cassidy describes how Soros re-iterates his empirically derived theory of economics which explains why boom bust cycles necessarily happen in unregulated markets. The concept of inevitable instability is something rejected by the extreme free market view, based upon the monetarist economics of the Chicago School: Milton Friedman; Eugene Fama; Robert Lucas. They believed that free markets would always reach a stable equilibrium.

Nothing has defined the period of American hegemony from Reagan until now more than monetarism, which has transcended economics and morphed into the broader political ideology of libertarianism. The current financial crisis, with its massive-scale, state intervention, shows nothing other than the complete failure of monetarism and with it, libertarianism.

Soros has an economic theory that is an alternative to monetarism and explains why crashes happen, it is derived from experience and is not mathematically formalized. I know almost nothing about economics, but I know a bit about information theory, and it seems clear that Soros’ theory while possibly true is not needed, since the monetarist view surely contradicts some very basic laws of physics.

First, the background. Cassidy recaps how the Chicago school “had invented a new way of doing macroeconomics, known as the rational expectations approach, which enshrined in higher mathematics the stabilizing properties of unfettered markets… If in one period the economy gets out of sync, in the next period it jumps back to the “equilibrium” defined by the model.”

Cassidy goes on to show that “Soros had neither the inclination nor the technical ability to challenge the Chicago school’s formal arguments…What he does possess, however, is voluminous amounts of firsthand knowledge gained in the financial markets, together with a keen interest in formulating a theory on the basis of his observations.”

Soros developed the idea of Reflexivity, a “two-way feedback loop, between the participants’ views and the actual state of affairs.” He clarified reflexivity to critics who “claimed that I was belaboring the obvious, namely that the participants’ biased perceptions influence market prices. But the crux of reflexivity is not so obvious; it asserts that market prices can influence the fundamentals. The illusion that markets manage to be always right is caused by their ability to affect the fundamentals they are supposed to reflect.”

In other words, the instability in markets is due to the feedback loop founded on us seeing things slightly wrong and acting on these perceptions which in turn actually changes the reality, allows it to be perceived with different uncertainty again, and so on.

The Soros view requires human perception to create chaotic fluctuations, but there are many things that behave chaotically, from eco-systems to the weather. Over time, all these things exhibit both cyclical and unpredictable behavior regardless of perception.

There are systems which self regulate to stability like the temperature of a hot bowl of soup in a closed room, or anything which runs down. This is called the second law of thermodynamics – over time entropy never decreases.

There is, however, a massive difference between systems that are inherently stable or will run down and ones that are chaotic. The former are always closed systems and the latter are open systems.

The economy is not a closed, running down system. Energy (or more specifically negentropy) is poured into it from high energy sunlight, past (oil and coal) or present (meat and veg). It is converted by industrious, growing populations of humans into local pockets of order, like buildings and machines and a much larger amount of waste. The eco-systems that connect these pockets of order are always chaotic and unpredictable in an open system, from the turbulent flow comprising cascading arrays of whirlpools as a river flows over rocks, to the flow of promises, in the form of money, through corporations.

Soros’ ideas may or may not be true, but they are not necessary, there is no need for an observer, just like there is no needs for a designer in nature. The monetarist view is surely wrong, period, and on a fundamental level, since it seems to be based on the assumption that the economy is a closed system.

Efficient markets aren’t smooth just like the weather isn’t, and thunder storms are not caused by psychology, but by the natural effects of open systems. Similarly, market crashes are caused by the chaotic nature of open systems, and the maximum efficiency is the production of waste.

Monetarism is wrong a pseudo science driven by an American ideological form of capitalism best described by the Libertarian label. From Ayn Rand to Reaganomics the economic ideas supporting them are based on the same ideological wishful thinking as Lysenko’s Larmarckian genetics, an idea which starved Communist Russia.

I have finally put up some notes, about what I have been thinking about for a very long time, concerning Information Theory and Evolution.

Specifically:

How systems self-emerge and self-configure for information exchange from 0 to 1 to n bits.

How these systems necessarily culminate in the complexity and diversity of living things as a result of rules governing information theory, where natural selection is a specific case of the laws governing noisy information exchange between finite sized systems.

If anyone else is interested in this topic or has any questions, the notes are here, and I’d be happy to hear from you.

An interesting piece in Science Daily on the evolutionary aspects of humor.

On a related but different note, I have always wondered whether there was more to the familiar movie cliche where someone challenges a king’s authority and the room goes silent, then suddenly the king laughs and everyone follows. The object of laughter is let off the hook, in exchange for looking like he or she was joking – making a fake challenge. The cost of this back down is partial humiliation.

Perhaps the origins of humor are a back down mechanism in potential conflict situations, where one party offers a lack of aggression signal in exchange for humiliation, i.e. being laughed at. In game theory terms, it allows for battles to be won or drawn without physical violence, with the same rules as for conflict, but a lesser cost/benefit of losing or winning.

Obviously, this may just be one facet of humor, but since fighting is such a fundamental behavior common to almost all species, whereas joking is not, I would suspect humor is built upon more ubiquitous traits further down the behavior tree.