Path-dependent

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Path-dependent
/pɑːθ-dɪˈpɛndənt/ (adj.)

Of a circumstance, that its coming about can only be explained by the sequence of events and contributing factors that lead to it; that it cannot be justified or explained by reference only to existing conditions.

The way things turned out depended on the coincidental interaction and juxtaposition of unrelated factors in the ecosystem.

The classic case is of course evolution by natural selection: re run the tape from the beginning and you would not get the same result.

Backtesting, how how “hindsight is a wonderful thing”

Backtesting is the most naked way of trying to solve for the future by extrapolating from the past.

It is so naked that only the genuinely dense or mendacious have any truck with it.

We collect and analyse 5 years of market data and from it construct the optimal trading strategy, that, had we used it, would have returned the greatest profit.

Of course we didn't know at the time how the data would turn out, so didn't know no to use the optimal strategy. Had we known, and had we adopted the strategy, others would have too, trading patterns would have been different, the data would have come out differently, thereby confounding the strategy. Backtesting is a preposterous idea.

By the lights of history, the market’s course is now fixed whereas when you are there in the moment, it is not. It reacts to you, just as you react to it. It is dynamic. Contingent. Alive. There are unlimited possibilities. A trading strategy derived from its fossil remains is similarly inert Dead. Unable to participate in the symbiosis between market and participant.

This is true of any algorithm that depends on data. Data is a fossil record. Good for answering questions to which there already is an answer. (You shouldn't scoff at this: many of our best questions are things for which there is already an answer; just one we don't personally know. Hence: the value of Google. The value of a library.

But note the mode of discovery: static; historical; final; determinate.

Causal determinism

Iteration lies behind our obsession with the power of Amazon butterflies to set off hurricanes in the Philippines.

We accept causal determinism because the alternative seems to deny the apparent regularity of the universe. But still, even the fossil record flatters to deceive: the lattice of potential causes is far more complex than we our wildest dreams — we form our dreams from what we see and what we hear and that necessarily infinitesimal. The histories we construct are works of imaginative fiction. (This is why historians do not agree). We make them; we do not find them.

By looking at a unitary history (that we made up), in hindsight we miss the contingency from which it was fashioned. Once it is laid down, it looks as if it was inevitable. It looks to be immutable of operating causes. It looks pre-ordained. This is a curiously religious idea.

In any case, if we accept the proposition that there is but one past (whether or not we can never be sure what it is) still there remains, from any given present, an infinity of futures.

The temptation of looking at our concrete past, is to see a single decision, at any point on that timeline as having determined the remaining history to the present. The extrapolation is that it will determine future also, unless a counterweighting single decision of equal significance can be made.

But neither is true. We have, and our ancestors had, the ongoing ability to change things daily by the decisions they, and we, made. Everyone makes some bad decisions. The key is not to be defined by them. Everyonevmakes good decisions too we have good luck, and bad luck.

Our permanent aspiration: from here, make more good decisions than you do bad ones. Improve your ratio.

You can’t undo the decisions of the past, whether made by you or about you, or by your ancestors or about them.

So, serenity’s prayer: have the courage to fix the things you can do, being those in the present live.com and up for debate; and the patience 2 2 to bear those things you cannot, and the wisdom to know the difference.

You cannot influence all matters and present Colleen some wisdom is required. That little wisdom is needed to know you cannot change the past.

The best you can do is change the stories you tell yourself,and others, about it.

Pragmatist’s prayer and the infinite game

Finite and infinite games is, as ever, handy metaphor for framing these battles of the past and present. For what is a “lived experience”, a “grievance” or a “standpoint”, if not an articulations of history? The future contains unlived experiences. There are no grievances. Our standpoints, the margins and their intersections are unknown.

Being historical, a lived experience is permanent, and set it stone. It cannot be moved. It cannot be removed. It cannot be compensated for. It cannot be denied. It becomes a monument. A shibboleth. A sacred prophecy. But it is our imaginative construction. We choose our significant events. We build our own memorials. We choose to live beneath their shadows. But our present is a function of every point in the past, not just the ones it's suits us to settle on.

This is the empathetic stance. To adopt a historical narrative: to step into its shoes, to take sides, to exalt it and perpetuate its grievance.

But, look: standpoints iterate. As the present moves through spacetime, we lay down the tracks of future, each new decision we make contributes to our lived experience. We update our standpoints. The decisions of the past for all further away in time and significance. It is an inverse square.

The infinite game counsels us to look at where we are, see what we’ve got and make the best of it. It focuses on the decisions of the now and the possibilities of the future. It regards the past as informational and instructive, not constraining. If I once hit my thumb with a hammer, I know to be careful next time I have a hammer. It does not make me forever a victim of hammer abuse.

The past as a formal system

Not also the idea that the past is a single formal causal chain, that we know about, is is a classic example of legibility in the sense articulated by James c Scott in seeing like a state. Articulation of history is necessarily a simplification, and model, a boiling down of an infinity of information into a single digestible narrative. It necessarily Mrs please in the same way that informal systems and interactions are are critical to the operation of a state or a business so are informal, unobserved, and noticed interactions.

Not only is “the past” —as we articulate it — inert and immutable, it's not even true. We can adjust it and do adjusted by nearly changing our account of it. This is the orwellian concept Colin Wright and rewrite and erase our history whilst insisting on its utter continuity. The true history of the universe is immutable. The stories we tell ourselves about it are not.

See also

• Evolution