Blinded By Science - When models FAIL taking all the humans
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Blinded By Science - When models FAIL taking all the humans
 
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Models don't replace ownership and smaller sized business responsibility...unless can figure out a model for Caring.
When I was doing bank work in D.C. for Consumer Federation, I ended up with the position, due both to intuition, as well as hard facts from studies that were performed by Harvard and other fairly reputable places-- showing that good banking judgement becomes reduced (like with any management) as ownership is eliminated replaced by ever larger scale operations managed by non-ownership managers.
Translation -- statistics and common sense verified that the larger the operation becomes, with noticeably poorer decisions happening at the size of business over $1 billion in profits, matched by replacement of ownership/manager with non-owner managers, judgment fails. Caring appears to be a part of ownership. Somethings counter this problem, like profit sharing -- giving workers part of profits -- but ownership of business and smaller size seems to be almost irreplaceable. Small banks and credit unions, owned locally, rarely fail. The owner's name, reputation and thus decisions are on the line.
How many names of the managers of these large failed institutions do we know? a couple? and they get paid handsomely either way ..
There was discussion of linking pay of all managers more directly to following of safety standards .. but I don't think that happened. Also .. just fyi .. when we went to have a hearing on this before Senate Banking Committee .. with the studies showing that size of institutions relates to poor management -- when you get over $1 billion, management quality noticeable deteriorates -- suddenly the group of professors and academics who performed the studies said they could not testify (they were silenced somehow.)
Have a great day!
Peggy Miller
============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
Re: Blinded By Science - When models FAIL taking all the humans
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Thus spake peggy miller circa 10/17/2008 09:32 AM:
> Translation -- statistics and common sense verified that the larger the > operation becomes, with noticeably poorer decisions happening at the size of > business over $1 billion in profits, matched by replacement of > ownership/manager with non-owner managers, judgment fails. Caring appears to > be a part of ownership. Somethings counter this problem, like profit sharing > -- giving workers part of profits -- but ownership of business and smaller > size seems to be almost irreplaceable. Small banks and credit unions, owned > locally, rarely fail. The owner's name, reputation and thus decisions are on > the line. Why is it that we are (and continue to be) so myopic to the flaws to such large-scale abstraction (aggregation and accumulation)? It seems (to me) that we should have learned this lesson thoroughly when we demonstrated that many contexts call for distributed as opposed to centralized solutions. We had to learn that lesson over and over in various disciplines. Why hasn't that knowledge translated to corporate governance? (Or government even?) Centralization, abstraction, aggregation, and accumulation seem to be the dominant tendency. My undefended conjecture is that such abstraction is the only way an individual can _both_ multiply their money _and_ keep the consequences at arm's length. I.e. it's the only way one can both make butt-loads of money and retain a clear conscience. (Gee, do I sound like a socialist? or what? ;-) But it's also quite possible that the only way to maintain a "survival by growth" method is to engage in such accumulation. For corporations, it's obvious. For the federal government, it's less so because it's reasonable to assume that the management of 3.5 million square miles and 350 million people requires a centralized solution. > How many names of the managers of these large failed institutions do we > know? a couple? and they get paid handsomely either way .. This reminds me of: Thus spake peter circa 10/01/2008 09:50 AM: > Sure I will dig out some names ... > [...] > > glen e. p. ropella wrote: >> But can you help me reduce my ignorance? Which "complexity science >> geniuses" created these credit models? And which ones do you think >> might go to jail? Peter? Did you ever get a chance to dig up some names of these "complexity science geniuses"? -- glen e. p. ropella, 971-219-3846, http://tempusdictum.com ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
Re: Blinded By Science - When models FAIL taking all the humans
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Peggy,
Sounds like interesting and important results. Do you have citations? -- Russ Abbott _____________________________________________ Professor, Computer Science California State University, Los Angeles o Check out my blog at http://russabbott.blogspot.com/ On Fri, Oct 17, 2008 at 10:27 AM, glen e. p. ropella <[hidden email]> wrote: Thus spake peggy miller circa 10/17/2008 09:32 AM: ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
Re: Blinded By Science - When models FAIL taking all the humans
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In reply to this post by HighlandWindsLLC Miller
I found that Nature article disingenuous. It just so happened I sat
down to dinner with a couple of bigtime modelers on Tuesday night--one models mathematically, one heuristically. They hadn't ever talked about it with each other, but they found out they'd done the same thing: they'd done the arithmetic, saw that whatever was happening in the markets was a bubble, and closed most of their positions within the last eighteen months. Is Nature asking us to feel sorry for people who couldn't do arithmetic? On Oct 17, 2008, at 12:32 PM, peggy miller wrote: > Models don't replace ownership and smaller sized business > responsibility...unless can figure out a model for Caring. > > When I was doing bank work in D.C. for Consumer Federation, I ended up > with the position, due both to intuition, as well as hard facts from > studies that were performed by Harvard and other fairly reputable > places-- showing that good banking judgement becomes reduced (like > with any management) as ownership is eliminated replaced by ever > larger scale operations managed by non-ownership managers. > > Translation -- statistics and common sense verified that the larger > the operation becomes, with noticeably poorer decisions happening at > the size of business over $1 billion in profits, matched by > replacement of ownership/manager with non-owner managers, judgment > fails. Caring appears to be a part of ownership. Somethings counter > this problem, like profit sharing -- giving workers part of profits -- > but ownership of business and smaller size seems to be almost > irreplaceable. Small banks and credit unions, owned locally, rarely > fail. The owner's name, reputation and thus decisions are on the line. > > How many names of the managers of these large failed institutions do > we know? a couple? and they get paid handsomely either way .. > > There was discussion of linking pay of all managers more directly to > following of safety standards .. but I don't think that happened. Also > .. just fyi .. when we went to have a hearing on this before Senate > Banking Committee .. with the studies showing that size of > institutions relates to poor management -- when you get over $1 > billion, management quality noticeable deteriorates -- suddenly the > group of professors and academics who performed the studies said they > could not testify (they were silenced somehow.) > > > > Have a great day! > Peggy Miller > ============================================================ > FRIAM Applied Complexity Group listserv > Meets Fridays 9a-11:30 at cafe at St. John's College > lectures, archives, unsubscribe, maps at http://www.friam.org "But this I know: the writer who possesses the creative gift owns something of which he is not always master--something that, at times, strangely wills and works for itself." Charlotte Bronte ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
Re: Blinded By Science - When models FAIL taking all the humans
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In reply to this post by glen ep ropella
Glen says, " > It seems (to me) that we should have learned this lesson
thoroughly > when> we demonstrated that many contexts call for distributed as opposed to > centralized solutions. Yes, very much so, but I also agree with Peggy's sense that there's something about ownership that is different from being indifferent about following someone else's rules. If both principles are to apply... then a distributed system of individual owners, of their own part of a larger whole system is needed. To me that means everyone being curious about what can go wrong. I see that kind of risk avoidance as one of the clear distinguishing characteristics of distributed systems functioning as advanced learning processes, as all organisms seem to in their own domains. Some learning processes can't learn, like thermostats. Some can only explore for self-expansion, like fire. Others can be risk averse and seeking out only resources that are free of conflict. The question isn't 'how' so much, as identifying what we can clearly observe occurring, and we're trying to explain. I think that's one of the things a conscious and logical mind can perceive, that there is a wide assortment of successful learning systems that notice when the progression of problems being solved is leading to unsolvable problems, the universal warning sign. You can call it "sensing increasingly complex risks with fat tailed distributions" as Taleb would, or "approaching diminishing returns" as I or Tainter would, or crossing lines of potential conflict, the name in common language any animal watches closely in going about their daily business. I just don't seem to know how to prove that staying with an ever riskier course is the cause of the calamity it naturally becomes. Proving that you can have foresight seems to require foresight, relying on reading beyond one's data every time... Phil > -----Original Message----- > From: [hidden email] [mailto:[hidden email]] On > Behalf Of glen e. p. ropella > Sent: Friday, October 17, 2008 1:27 PM > To: The Friday Morning Applied Complexity Coffee Group > Subject: Re: [FRIAM] Blinded By Science - When models FAIL taking all > the humans > > Thus spake peggy miller circa 10/17/2008 09:32 AM: > > Translation -- statistics and common sense verified that the larger > the > > operation becomes, with noticeably poorer decisions happening at the > size of > > business over $1 billion in profits, matched by replacement of > > ownership/manager with non-owner managers, judgment fails. Caring > appears to > > be a part of ownership. Somethings counter this problem, like profit > sharing > > -- giving workers part of profits -- but ownership of business and > smaller > > size seems to be almost irreplaceable. Small banks and credit unions, > owned > > locally, rarely fail. The owner's name, reputation and thus decisions > are on > > the line. > > Why is it that we are (and continue to be) so myopic to the flaws to > such large-scale abstraction (aggregation and accumulation)? > > It seems (to me) that we should have learned this lesson thoroughly > when > we demonstrated that many contexts call for distributed as opposed to > centralized solutions. We had to learn that lesson over and over in > various disciplines. Why hasn't that knowledge translated to corporate > governance? (Or government even?) > > Centralization, abstraction, aggregation, and accumulation seem to be > the dominant tendency. > > My undefended conjecture is that such abstraction is the only way an > individual can _both_ multiply their money _and_ keep the consequences > at arm's length. I.e. it's the only way one can both make butt-loads > of > money and retain a clear conscience. (Gee, do I sound like a > socialist? > or what? ;-) > > But it's also quite possible that the only way to maintain a "survival > by growth" method is to engage in such accumulation. For corporations, > it's obvious. For the federal government, it's less so because it's > reasonable to assume that the management of 3.5 million square miles > and > 350 million people requires a centralized solution. > > > How many names of the managers of these large failed institutions do > we > > know? a couple? and they get paid handsomely either way .. > > This reminds me of: > > Thus spake peter circa 10/01/2008 09:50 AM: > > Sure I will dig out some names ... > > [...] > > > > glen e. p. ropella wrote: > >> But can you help me reduce my ignorance? Which "complexity science > >> geniuses" created these credit models? And which ones do you think > >> might go to jail? > > Peter? Did you ever get a chance to dig up some names of these > "complexity science geniuses"? > > -- > glen e. p. ropella, 971-219-3846, http://tempusdictum.com > > > ============================================================ > FRIAM Applied Complexity Group listserv > Meets Fridays 9a-11:30 at cafe at St. John's College > lectures, archives, unsubscribe, maps at http://www.friam.org ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
Re: Blinded By Science - When models FAIL taking all the humans
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In reply to this post by Pamela McCorduck
I sold enough for my own and my son's security for a time last Nov.... for
what it's worth. I chose not to sell out to see how it felt to only 'cover my ass' and not act like leading the kind of 'flight to safety' that would bring whole systems down if copied. That did develop, of course, a few weeks ago. As I saw the wave building and crashing it constantly felt like I really should have sold more, and was glad I had not. Phil > -----Original Message----- > From: [hidden email] [mailto:[hidden email]] On > Behalf Of Pamela McCorduck > Sent: Friday, October 17, 2008 4:03 PM > To: The Friday Morning Applied Complexity Coffee Group > Subject: Re: [FRIAM] Blinded By Science - When models FAIL taking all > the humans > > I found that Nature article disingenuous. It just so happened I sat > down to dinner with a couple of bigtime modelers on Tuesday night--one > models mathematically, one heuristically. They hadn't ever talked about > it with each other, but they found out they'd done the same thing: > they'd done the arithmetic, saw that whatever was happening in the > markets was a bubble, and closed most of their positions within the > last eighteen months. Is Nature asking us to feel sorry for people who > couldn't do arithmetic? > > > > > On Oct 17, 2008, at 12:32 PM, peggy miller wrote: > > > Models don't replace ownership and smaller sized business > > responsibility...unless can figure out a model for Caring. > > > > When I was doing bank work in D.C. for Consumer Federation, I ended > up > > with the position, due both to intuition, as well as hard facts from > > studies that were performed by Harvard and other fairly reputable > > places-- showing that good banking judgement becomes reduced (like > > with any management) as ownership is eliminated replaced by ever > > larger scale operations managed by non-ownership managers. > > > > Translation -- statistics and common sense verified that the larger > > the operation becomes, with noticeably poorer decisions happening at > > the size of business over $1 billion in profits, matched by > > replacement of ownership/manager with non-owner managers, judgment > > fails. Caring appears to be a part of ownership. Somethings counter > > this problem, like profit sharing -- giving workers part of profits - > - > > but ownership of business and smaller size seems to be almost > > irreplaceable. Small banks and credit unions, owned locally, rarely > > fail. The owner's name, reputation and thus decisions are on the > line. > > > > How many names of the managers of these large failed institutions do > > we know? a couple? and they get paid handsomely either way .. > > > > There was discussion of linking pay of all managers more directly to > > following of safety standards .. but I don't think that happened. > Also > > .. just fyi .. when we went to have a hearing on this before Senate > > Banking Committee .. with the studies showing that size of > > institutions relates to poor management -- when you get over $1 > > billion, management quality noticeable deteriorates -- suddenly the > > group of professors and academics who performed the studies said they > > could not testify (they were silenced somehow.) > > > > > > > > Have a great day! > > Peggy Miller > > ============================================================ > > FRIAM Applied Complexity Group listserv > > Meets Fridays 9a-11:30 at cafe at St. John's College > > lectures, archives, unsubscribe, maps at http://www.friam.org > > "But this I know: the writer who possesses the creative gift owns > something of which he is not always master--something that, at times, > strangely wills and works for itself." > > Charlotte Bronte > > > ============================================================ > FRIAM Applied Complexity Group listserv > Meets Fridays 9a-11:30 at cafe at St. John's College > lectures, archives, unsubscribe, maps at http://www.friam.org ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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In reply to this post by glen ep ropella
glen e. p. ropella wrote: Thus spake peggy miller circa 10/17/2008 09:32 AM: Lets see how accurate these names are and when they get their subpoenas Rothman / Kearns / Goldberg / Cushing / Jessop / Mouicci ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
Re: Blinded By Science - When models FAIL taking all the humans
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Thus spake peter circa 10/18/2008 07:26 PM:
> glen e. p. ropella wrote: >> Peter? Did you ever get a chance to dig up some names of these >> "complexity science geniuses"? >> > > Lets see how accurate these names are and when they get their subpoenas > > Rothman / Kearns / Goldberg / Cushing / Jessop / Mouicci Excellent! Thanks. -- glen e. p. ropella, 971-219-3846, http://tempusdictum.com ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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