Re: MIT experts analyze financial crisis, debate cures

Posted by Kenneth Lloyd on
URL: http://friam.383.s1.nabble.com/MIT-experts-analyze-financial-crisis-debate-cures-tp1364627p1372463.html

Phil,

You speak of causality and "why" answers as if they "ought" be deterministic
in some scientific paradigm.  Uncle Occam cautions that may be one
assumption too many.

Therefore, I sense that the underlying assumption in your observation is
that science is "supposed" to be the search for truth from events of the
past.  I refer you to Henry Pollack's book "Uncertain Science, Uncertain
World", and Michael Lynton's observation that the purpose of science is to
"separate the demonstrably false from the probably true".

I would add that "probably true" actually means "probably not false", so
even that logical state is approached asymptotically.  This is an artifact
(meaning a residual error or inaccuracy) from a Newtonian era paradigm of
science that has long been shown erroneous yet still permeates most peoples
thinking.

The problem caused by planning on things working is what I call The Sunny
Day Paradox - usually faced by those who believe in a deterministic
scientific paradigm. In other words, in spite of successful surgery, the
patient died.

One last point, by "pump" do you mean "probabilistic wavefunction"?

Ken

> -----Original Message-----
> From: [hidden email]
> [mailto:[hidden email]] On Behalf Of Phil Henshaw
> Sent: Friday, October 24, 2008 8:17 AM
> To: [hidden email]; 'The Friday Morning Applied Complexity
> Coffee Group'
> Subject: Re: [FRIAM] MIT experts analyze financial crisis,
> debate cures
>
> Gosh, I don't know why it's so hard to convey, but it's
> important to understand.  
>
> The error in planning on things working as if responding to a
> normal curve distribution (i.e. admirably designed for all
> the usual problems) is relying on it if there is a growing
> 'fat tail' of abnormal events (the black swan).
> That situation is sure to develop when trying to regulate a system for
> producing ever more unusual and complex events.   That is
> precisely what we
> were, and have always been, and still are trying to do.
>
> A bubble pops at it's weakest point, not it's strongest.  
> When the 'containment' is a regulatory design, the certainty
> is that the breach will occur at the most critical place that
> no one checked.  By definition it's a small error that
> multiplies to an irreversible point before anyone quite
> realizes it.   The CAUSE of that is not the rare event (the
> pin prick).
> It's not the weak point in the containment that no one
> checked (patches of poor design or regulation or greed, etc).
>  It's not the size of the bubble (how big the gradient is
> from high to low).  It's the pump.
>
> The cause is pumping the bubble of complications in an
> accelerating way that
> guarantees people will miss the problems developing.   It's
> operating an
> growth system and making the first regulatory error,
> accepting the learning curve of exploding complication
> required to stabilize it forever.
>
> There are a lot of 'why' answers, and some of them circular.  
> I think the correctable reason why is the common scientific
> error of reading the future
> in the past.   We plan on the future behaving like the past
> by trusting old
> stereotypes and patterns for changing things.   We plan on
> the future being
> like the past EVEN for systems we design for the purpose changing at
> continually multiplying rates.   The solution is to notice
> the cognitive
> dissonance... you could say, and just ask the dumb questions.
>
> Phil Henshaw  
>
>
> > -----Original Message-----
> > From: [hidden email]
> [mailto:[hidden email]] On
> > Behalf Of Phil Henshaw
> > Sent: Thursday, October 23, 2008 12:06 PM
> > To: 'The Friday Morning Applied Complexity Coffee Group'
> > Subject: Re: [FRIAM] MIT experts analyze financial crisis, debate
> > cures
> >
> > Of course!, the reason they fooled everyone so completely was that
> > they were
> > designed to be completely sensible.   That's what is meant by the
> > "black
> > swan".
> >
> > Phil Henshaw
> >
> >
> > > -----Original Message-----
> > > From: [hidden email]
> [mailto:[hidden email]]
> > > On Behalf Of Owen Densmore
> > > Sent: Wednesday, October 22, 2008 12:11 PM
> > > To: The Friday Morning Applied Complexity Coffee Group
> > > Subject: [FRIAM] MIT experts analyze financial crisis,
> debate cures
> > >
> > > This seemed to be a pretty sound analysis of the current crisis:
> > >    http://techtv.mit.edu/file/1448/
> > > In particular, I was surprised to see how reasonable
> several things
> > > I had thought to be "bad" were.  For example, the
> "securitization"
> > > of mortgages arose from a very reasonable desire to
> "smooth out" risk.
> > I
> > > hadn't understood their function before.
> > >
> > >      -- Owen
> > >
> > >
> > >
> > > ============================================================
> > > 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
>
>
>
> ============================================================
> 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