Something for the weekend, sir?
|The Devil’s Advocate™|
Machines of Loving Grace - John Markoff Buckminster Fuller, Marshall McLuhan and Peter Drucker Whole Earth Catalog
Superstition → a belief based on a fear of the unknown and faith in magic or luck. Actions based on that belief can lead to ’'malign outcomes (e.g. ritual sacrifice) benign/neutral outcomes (touching wood, rubbing David Hume’s toe) or a method for undertaking a task you had to do anyway (putting your cricket pads on in a certain order before batting: you have to put your pads on in some order and neither is (objectively) worse than the other, so from a rationalist perspective the superstition here has no practical effect on the world at all.
On the other hand acting out a superstition can have unintended psychosomatic consequences (my confidence my pads went on in the lucky way may trigger for getting into system 2? - no opportunity cost ... ) CF hubris: missing the humility of acknowledging there's something bigger than all of us out there pascal’s wager → opportunity cost and importance of psychological safety and community consensus (believing God in salt lake City) → modern day superstition netting ESG (motivated irrationality = the livelihoods one can make from believing stupid things
Paradigm = system. Explains the multiple paradigms in Kuhn's model ... They are all paradigms - interlocking systems
Variation margin as source of systemic risk. Would it not be better to manage margin exposure by declining to trade? Thanks do not provide margin on the upside, so that puts a natural cap on on clients preparedness to transact. Thanks still call margin on the downside reflecting at this is fundamentally a lending business and the use of bilateral contracts banks role and regulation and capital is the primary systemic risk mitigant.
The interplay with netting being a a giveaway: variation margin + netting = worse xposure The bilateral nature of ISDA being a great misconception
The shitness of netting
The power of Ignorance: The most powerful response to a contrary idea is to ignore it.
“we love automation. We can automating complex things”. WRONG QUESTION DUDE.
It's structural questions, its new clauses its new schedules. The complexity is mind bending.”
Big ideas... Your tech needs to make the process better, bit just accelerate or anaesthetise existing process
Contracts and processes as formal and informal structures in systems
Ricky, listen, maybe, maybe death wasn’t the right word, I meant you know, he's still here, Ricky, he 's still here, he still exists in the space time continuum. The way it works is like when he's ceased to be, he actually turned into a different type of energy — space-time continuum — and the way the universe up there, the black holes and everything, they wrap around, there’s string theory, that can prove that different things, that he can live here in the space-time continuum, I mean that’s how the universe works, Ricky, black holes and thermodynamics can fold over time space like that so he's actually still, existing.
logical undecidability of libertariaism. John highs example of the right to choose which side of the road to drive on.
- Average being comprised of individuals. There is no magic, no emergence from the average. Just because cour category performs, on average, differently to another category doesn't mean you perform differently to him.
- Categories are as hoc and non-exclusive. The Simpson paradox
- The category error
- That guy
- Opportunity cost
Dear lord and father of mankind is the back end of a poem written during a hallucinogenic trip brought on by drinking Soma in some vedic ritual: https://en.wikisource.org/wiki/The_Brewing_of_Soma
Soma was a sacred ritual drink in Vedic religion, going back to Proto-Indo-Iranian times (ca. 2000 BC), possibly with hallucinogenic properties.
Modernism vs. pragmatism
- Vertex vs. edge
- Text vs. meaning
- Algorithm vs. heuristic
- Formal vs. informal
- Tool vs. application
- Innate vs. emergent
- Obvious vs. subtle
- God vs. Darwin
- Simple vs. complex
- Quantitative vs. qualitative
- Calculated vs. interpreted
- Static vs. dynamic
- Stocks vs. flows
- Structure vs. interaction
- Nouns vs. verbs
- Trees vs. wood
- Permanent vs. ephemeral
“I should explain that in the Soviet scientific community in those days, mechanistic determinism held sway over all other approaches. Researchers believed that the natural world was governed by the iron law of cause and effect. This mentality was a product of the political environment.”
- — Cixin Liu, Ball Lightning
A running theme in the JC is the distinction between top-down and bottom-up of organisation models, particularly where it comes to dealing with existential risk.
We are in the swoon of an obsession with data, technology and the algorithm. Thought leaders perceive an inevitable, short, path to a singularity where everything can be calculated, everything planned and we will no longer have to rely on irrational, costly, inconstant, error-prone meatsacks. Only crusty old refuseniks can’t see it.
Now I am just such a crusty old refusenik, and while that is largely borne of self-interest — I am an irrational, costly, inconstant, error-prone meatsack, after all — before mortgaging our futures to the machine, it is worth nutting through the digital prophecies to see if they hold water.
We start with a fundamental, philosophical divide between, on on hand, modernism: in a deterministic world wherein the causal principle holds it follows that, in theory, we can calculate all outcomes from first principles. In this world the main challenge is outright data processing capacity and the sophistication of our model. Encouraged by the success of artificial intelligence in solving problems not long ago considered intractable — chess, alpha go, self-driving cars, facial recognition, chatbots and so on — modernists extrapolate to a world where risk is atomised and calculated out of existence.
On the other hand is pragmatism: whether or not the causal principle holds, and however good robots may get at chess, they cannot manage non-linear interactions and dynamic environments which present “wicked problems” and complex systems. Not only can formal logical tools not deal with rapidly emerging risk situations, they can’t even see them. It’s better to live with uncertainty, deploy experts, proceed with caution, keep slack in the system and use practical rules of thumb to which we have no great metaphysical attachment to address contingencies. We should live on our wits and figure things out as we go. There is no certainty, but humility is no bad defence.
Determinism begets modernism and sees centralisation and automation as the highest good. We should aggregate and optimise processing power. The main role of the executive is orderly administration and maintenance of a machine which, by cold operation of logic, will dispense optimal outcomes by itself. The less we interfere the better.
Pragmatism begets systems thinking and aspires to decentralisation: the world is fundamentally unpredictable; it is best dealt with by experienced experts; management’s main function is to empower and equip experts and optimise their ability to communicate. Pragmatists prioritise relationships and interactions and over equipment and structure.
Determinists are from Mars; pragmatists from Venus.
“Modernists” view organisations, and systems, as complicated machines. Formal design is important, and follows (centrally-determined) function; the more efficient your contraption is, the better it will navigate the crises and opportunities presented by its environment — the market. Modernism regards the market as an extremely complicated mathematical problem: hard, but— theoretically — calculable. Modellable. Should a model not work, one must refine it.
Shortcomings in current technology mean we cannot — yet — fully solve that problem. We still need humans to make sure the machine operates as best it can, but the further humans are from that central executive function, and the better the algorithm gets, the more humans resemble a maintenance crew. Their task is to ensure the orderly functioning of the plant. As technology advances, human agency can be progressively decommissioned.
Business, and government, suffers from a kind of physics envy. It wants the world to be the kind of place where the input and the change are proportionate: everything is numerically expressible and the amount you spend on something is proportionate to the scale of your success.
Modernism only sees what it can see
Firstly, modernism cannot “see” informal, but vital, interactions between components of the system that are not in its model: random acts of kindness, the star seller’s sales technique, the time every staff member spends building lateral relationships, the value of those relationships, the necessary work beyond the service catalogue, the work-arounds that the machine going; the ad-hoc tricks that make up the difference between meaningful performance and work-to-rule. The critical call that clinched the deal.
Theory: it is not an organisation’s form or structure, but its interactions that determine its outcomes. A badly organised firm that interacts well with its customers will perform better than a perfectly organised firm that interacts poorly:
“You are in a queue. an operator will be with you shortly. Your call is important to us.”
An organisation is a system. Systems are comprised of stocks, flows and feedback loops. Key are their interactions: components that don’t interact are not in a system. A system’s behaviour emerges from how its components interact, not what it is made of or how it is arranged. In other words, a system is defined by its “flows”, not its “stocks”. Flows create feedback loops. Feedback loops create, or deplete stocks. Stocks — formal, structural capacities — only facilitate flows. But formal structures are easier to see than interactions. Yet modernism focuses on formal structure, organisation lines — mostly vertical — not functional communications, which are mostly horizontal.
Modernism as a negative sum game
Secondly, thanks to its physics envy, modernism is a negative sum game: its baseline is immediate, costless, faultless performance. Positive variance from this baseline is not possible: the goal is to lose as little energy as you can. But friction, gravity, heat, entropic energy loss means in the real world, the system loses energy. We can minimise entropic loss with engineering and environmental control but it remains practically impossible to conserve energy, and theoretically impossible to create it.
Human operators create a great deal more entropic loss than unattended algorithms. If the only gauge is accurate, efficient execution of instructions, humans must be worse at that than machines. Modernism cannot give credit to insight, diagnosis, model revision or reimagination because there is nothing to reimagine. There is no such thing as a valid alternative model. Economics is a kind of physics. There are no “alternative facts”.
Now, if bettering an algorithm is impossible, it stands to reason: meatware is expensive and inconstant: the largest risk to the organisation is human error, thus the strategic direction of an organisation’s development is to eliminate it where possible. Where that is not possible, human activity should be constrained by rigid guidelines and policies to reduce the probability of mishap, and monitored and audited to record and correct those errors that do happen top prevent them happening again. To the modernist, malfunction and human error are overarching business risks.
This worldview is one that appeals to many people in business management. Others might find it it rather desolate. But desolation is no argument against it if it is correct.
When a man throws a ball high in the air and catches it again, he behaves as if he had solved a set of differential equations in predicting the trajectory of the ball. He may neither know nor care what a differential equation is, but this does not affect his skill with the ball. At some subconscious level, something functionally equivalent to the mathematical calculations is going on.
When you get too close to your material, sometimes you can’t see an absurdity even if it pinches you on the nose. Not only does a person catching a cricket ball not solve differential equations, or anything “functionally equivalent”, but she can’t. She would need the inputs for every differential equation in play. Just to determine a trajectory is: Y = H + X * tan(α) - G * X² / 2 * V₀² * cos²(α).
To be clear: it is’t simply that she is doing this subconsciously, somehow, in a way she can’t apprehend: she doesn’t know, even subconsciously, the velocity, angle, vector, or starting coordinates of the ball. She would need all of these just to perform that differential equation. She is doing something else: she’s using a subconscious heuristic: keep your eye on the ball, run towards it, and keep the angle of your gaze as constant as you can. It is called the “gaze heuristic”. No cosines or tangents required.
Bottom-up models are, for want of a better world, “pragmatic”. They see the organisation as a constantly changing organism operating with incomplete, ambiguous information in an environment that is also constantly in flux. To survive, firms must respond dynamically and imaginatively to unpredictable, non-linear interactions in the environment which is constantly shape-shifting into new configurations in unexpected, and unexpectable, ways. For a pragmatist, practical control must be exercised at the points where the organisation interacts with its environment. A firm should have talented, empowered, well-equipped people — subject matter experts — to handle those interactions. Those in the central management function have a holistic view of the environment and can provide aspiration and tools to the subject matter experts, but real decision making is done by those experts at the edges, not the the management function in the middle.
Intellectually, the battle ought to have been won by the pragmatists long since (systems theory, complexity theory, even, for all its obsession with algorithms, evolutionary theory line up with pragmatism), but modernism keeps devising new ways of getting itself back in the game, and over the last twenty years has been winning. What with the giant strides of the information revolution, the forthcoming singularity, technological unemployment, the abolition of boom and bust in 2005, and the effective management and distribution of financial risks through sophisticated financial derivatives (amirite?), it is easy to be lulled into a sense of security.
Getting down amongst the elephants and turtles is not to everyone’s taste, but if you do it helps to see the planet on top of it more clearly. Here’s a distinction to draw: between things and interactions between things. Nouns versus verbs.
The illusion of permanence and the Ship of Theseus
We see that even many of the markers we treat as formal, fixed and permanent are really temporary: the Dread Pirate Roberts effect: the personnel comprising a corporation change over time. Likewise institutions: corporations merge, change business models, change locations, move into different markets. IBM of 2021 is very different from the IBM of 1971.
But the individuals may be fleeting and transitory; the residue they leave behind is not: The corporation’s devotion to the formal means that successive individuals become progressively constrained by their predecessors actions and decisions — even if, in the mean time the dynamic considerations that led to the decision no longer prevail. A rule that has been there for a long time, but that no-one knows the provenance of, acquires a kind of mystical quality. I think this is the inverse of the “Lindy effect”.
The illusion of significance
Psychology in negotiating
Why you should call call before writing.
If you wanted to persuade someone of a a course of action, wouldn't you you first explain it to them?
What works better, a pitch or a deck?
Standard operating practice amongst professional negotiators is to proceed almost entirely in written form. There are a few selfish grounds for doing so: firstly it's a bit like pre preparing a performance. You don't need to be perfect, you don't need to react to to expected turns of events, and you have time to prepare the perfect answer.
Calling and debating live requires confidence, preparedness, and a greater command of the technical material over which you are negotiating. This is intimidating . Effective interpersonal communication also requires empathy, psychology and wit: these are are skills one generally acquires with experience and and expertise and they are generally not available from school leavers in Bucharest operating with a PlayBook on their lap.
So negotiators have evolved away of operating which best suits they are degree of skill and experience, and more or less guarantees and ongoing stream of work. The the orderly, leisurely, thorough exchange of correspondence. One can ensure all boxes are ticked, or processes followed, without tension comic conflict unexpected crisis or or risk of inadvertent error.
The cost is is the speed and waste it generates as an a inevitable by-product. The unnecessary trials of correspondence. The waiting, the over detailed drafting as each side tries to unpick the others goal. All of this can be circumvented by direct conversation.
Yes; this means having skilled negotiators and they are expensive. But avoiding that is a false economy.
Nepotism and networks of trust
Is nepotism the problem or is it lack of networks of trust? When when the bosses nephew gets that plum job, what is the value in it of the the credibility signal sent by the boss. I vouch for this person full stop my reputation is at stake if he he fails. In recommending him to you I have skin in the game.
By looking at at these arrangements purely from the perspective of unfair advantage and privileged access that they undoubtedly also have, we miss a trick. But it is true that children from lower socioeconomic backgrounds and deprived areas have much less opportunity of this kind. But if these reinforcing social vouching systems have value, and it seems that they do (otherwise privileged would not use them), then is not the answer to look for ways of constructing these vouchers systems amongst children who would otherwise not have them.
Many corporations have relationships with inner-city schools, for example, which run summer internships and similar programs. These are fantastic opportunities to create relationships of trust and recommendation. This is what networks like LinkedIn are basically designed to achieve. But are there other similar systems question mark if not, how could we invent them? Raising levels of trust in a community, however that is done, is clearly of value to the whole community.
Talking Politics with Adam Curtis
The idea that the truth is in the patterns in the days that human cannot even see.
Money as an abstract token of value that has no intrinsic value
Advertising generates economic production, rather than economic production generating advertising.
The importance of authenticity. Why is it not the same when it isn't David gilmour playing that guitar solo?
The importance of effort. We should not underestimate how we we value the effort required to produce intellectual property. Many years ago go robotics engineers designed a contraction that could play the flight of the bumblebee on classical guitar. Undoubtedly the machine was extremely complex, the programming highly ingenious and it executed the police flawlessly at tempo, undoubtedly more perfectly then the finest classical guitarist could. But would you pay money to sit in a concert hall and watch a robot playing classical guitar? Once the technical problem has been solved and can be inexpensively replicated the value of the performance tends to 0. Even though we can can program robots to flawlessly play, at no cost, we will still pay good money to watch a human virtuoso doing the same thing less well than the machine.
The segues into a conversation about the meaning of value. The same way that meaning does not exist in the words on a page, value does not exist in in the technical performance of a skill, but lies somewhere between the performer and and it's audience. Similarly, science is not simply demarcation of the correct answers to questions, but is demarcation of the correct questions requiring answers. This is a dynamic. It is complex in the technical sense, the ground rules are approximate and shift without warning based on the attitudes of the conversants.
Leaving aside all the overpowering psychological reasons not to value an AI version of Pink Floyd, there is the bluntly practical one. They can only ever be a flawless moment it can recombine existing elements into a new you form. But it cannot create genuinely new you output because it is not the artist. Whatever the machine comes up with it will not be what nirvana's next album was going to be. Of course, we cannot know that, but consider an AI algorithm directed at The Beatles first four albums. Is there any chance it could have devised music resembling that on revolver or rubber soul let alone tough White album or sergeant pepper's? An AI analysing Pablo honey and The bends will not produce amnesiac or kid A.
Allegory, fairy stories and the hubris of taking things literally
We have been been warning ourselves since the dawn of civilization about the folly of using magic to take shortcuts. If we take Arthur C. Clarke at his word that any sufficiently advanced technology is indistinguishable from magic then are we forgetting our oldest lessons?
“People of every age seem to be in a sort of post-truth scenario here, where I get to pick my own facts. There are a lot of facts out of there, I get to pick the ones that I like, and I can go with those, and nobody can really tell me that those aren’t the facts because it’s my truth. Those are my facts, and don’t tell me they’re not.”
Most conspiracy theories contain a grain of truth. Some are completely true. There has to be something for the credulous to glom onto.
Critical theory’s grain of truth, ironically, is “there is no such thing as a grain of truth”.
Well, not quite — “it is true that there is no truth” refutes itself, after all — but rather that the idea of “objective truth” is incoherent. There is no objective truth, because the very idea makes no sense.
“Things” are properties of the universe. They have (we presume) continuity, whether we see them or not, and whether we talk about them or not. “Truths” are propositions about things. Propositions put things into a relationship with each other: “the cat sat on the mat”. “Gordon is a moron”. “Propositions” are a property of language: they only exist within the framework of a language.
Thus, things aren’t true or false: only propositions about things are. Propositions are prisoners of the language they are articulated in. Beyond it, they are only marks on a page.
“گربه روی تشک نشست”
Truths are propositions. Truths, therefore are a function of the language they are articulated in. A truth cannot “transcend” its language. It doesn’t make sense. There is the further difficulty that “language” itself is an indeterminate, incomplete, unbounded thing; no two individuals share exactly the same vocabulary, let alone the same cultural experiences to map to that vocabulary, let alone the same metaphorical schemes. It is what James P. Carse would describe as “dramatic” and not “theatrical”. This makes the business of acquiring and communicating in a language — where meaning does not reside in the textual markes, but in the indeterminate cultural milieu in which the communication occurred — all the more mysterious. That we call it “communication”; that we infer from that a lossless transmission of information from one mind, is a deep well of mortal frustration.
This is its debt to post-modernism, and it is a proposition that contemporary rationalists find hard to accept, whether hailing from the right — see Douglas Murray’s The Madness of Crowds for an articulate example — or the left — see Helen Pluckrose’s patient and detailed examination in Cynical Theories.
The problem, all seem to agree, is this post-modern rejection of truth. And it isn’t by any means limited to the critical theorists: it lives in Kellyanne Conway’s “alternative facts”, in Elon Musk’s Twitter feed, and the generally relaxed attitude to rigorous fact-checking of the populist right.
At the same time we lament the death of “authenticity” — is it the same thing as truth? Is it what we mean by “truth”? — and with it, the terminal defection of logic from the mechanical operation of the world.
We think: what have we done? Have we syllogised truth away altogether? Have we passed a point of no return? Some kind of event horizon between truth and post truth; an invisible force-field from the outside in a collection of received veracities, which once you permeate it, once you cross its threshold all reality dissolves and it is suddenly the only visible truth that remains, in a twisting kaleidoscope of unfathomable nonsense — truth is no longer possible?
Nowhere is this more evident than the blockchain, and its two most startling, and contradictory creations: bitcoin on one hand: the utter rejection of any underlying reality: bitcoin unashamedly represents “value” as a totally abstracted essence; a theoretical quality, disconnected from our ugly Platonic cave, floating free of any messy, ugly corporeal, earthly extension that might taint it with mortal frailty; the non-fungible token on the other, a means vouchsafed by that very same essential abstraction from the earthen shores, of achieving unimpeachable authenticity. A non-fungible token cannot be replicated, it can’t be cloned, copied or imitated: it is immutably, eternally, digitally unique
The irony deepens, for defenders of the enlightenment bring critical theory to book for its ignorance of obvious truths, while critical theory itself has bootstrapped itself into assembling a new set of of objective truths, which happened to be different to the conventional enlightenment ones.
The deep problem that critical theory has, all agree (from Christopher Hitchens, Richard Dawkins, Helen Pluckrose, Douglas Murray and recently Matthew Syed) is that something things — physical sciences are a favourite example — just are true. No amount of identifying with an alternative theory of gravity will stop you from hitting the ground if you throw yourself out of a window.
On the other hand Jacob Howland made the interesting assertion recently that so completely has critical theory escape its postmodern origins, that it has become captured by, of all people the high modernists who inhabit an intellectual world that seeks to solve all problems by top-down taxonomies and computation.
An illiberal alliance of technological corporatism and progressivism is rapidly turning universities into a “talent pipeline” for the digital age. When fully constructed, this pipeline will deliver a large and steady flow of human capital, packaged in certifiable skill sets and monetised in social-impact or “pay-for-success” bonds. But the strongly particular or eccentric shapes of mind, character, and taste that make human beings, as John Stuart Mill says, “a noble and beautiful object of contemplation” would clog the talent pipeline.
Critical theory has escaped its usual confines in the liberal arts faculties of universities and is now inhabiting the management and human resource departments of corporations, and who are using their rationalist framework to advance what is a fairly radical political agenda. Critical theory is not an alternative narrative by which we can puncture the arrogant assumptions of the capitalist class: it has displaced them altogether and is making its own arrogant assumptions in their place.
That’s not altogether a bad thing — although the practical effects of the updated dogma seem more pronounced the further from the executive suite you go — but it seems to me to substitute one set of bad ideas with another.
The idea of transcendent truth — a truth that holds regardless of language, culture or power structure in which it is articulated — is not false (that would be a paradox right?) So much as incoherent. It is incoherent because, as Richard Rorty pointed out, truth is a property of a sentence about the world, not the world itself. Truth depends on language.
And languages are intrinsically ambiguous. This is the tragedy and the triumph of the human condition.
The statement there is no truth is not an article of postmodern faith, by the way: you can trace it back as far as David Hume, Adam Smith, Charles Darwin Friedrich Nietzsche, Karl Popper, Thomas Kuhn and Richard Rorty. I know, I know: all old, dead, white, men. And Nancy Cartwright.
If you accept the proposition that truth is a function of a sentence and therefore the language of that sentence comma for there to be a transcendent truth the language in which it was uttered would necessarily need to be complete, comprehensive, and itself true. The nearest linguistic structures that we have to to complete languages are those of mathematics and perhaps science. Yet we know that mathematics is a necessarily incomplete language something Colin from that we know that any natural language is necessarily incomplete semicolon and in the case of science we know with certainty that science is not what a complete and comprehensive statement of the laws of the physical universe. We haven’t solved the universe yet. There are large fundamental unknowns; dark matter; dark energy; the incommensurability of quantum mechanics and and special relativity. Even if the concept of transcendent truth were coherence we have nothing like enough information to access it. In the same way that the fielder does not have enough physical information to calculate the trajectory of a cricket ball, and therefore pragmatically approximates it, so we do not have anything like enough information to confidently predict the scientific performance of the universe and therefore we pragmatically approximate it.
Pragmatic approximations comma being provisional, contingent, and subject to revision at any time I’m are are more tolerant, plural and liberal than concrete scientific calculations.
The lack of a a coherent concept of transcendent truth is a a roadmap to tolerance, pluralism, and liberalism. It obliges us to treat as contingent anything we know comma to expect things to change and to be prepared for new and more effective ways of looking at the world. All it requires is that we substitute a certainty about how we view the world and ash that we see it as true with a pragmatism about how we view the world, seeing it as effective.
Power structures are all around us
- The Selfish Gene, 2nd Ed., 95 — see it on Dawkins’ website.
- David Hume’s causal scepticism put paid, centuries ago, to the idea that we can be sure about this.
- Translated from Persian into English: “the cat sat on the mat.”
- This is not even to take the point that, thanks to the indeterminacy of closed logical sets, no statement in a natural language can possibly have a unique, exclusive meaning.
- In his Finite and Infinite Games.