31 August 2020

Thought Experiment: How do you Price the Office Parlour Palm?

Posted by Martin Cohen
Here's one of a collection of short puzzles that might be considered an A-Z of the tricks of high finance: Not so much 'P is for Parlour Palm' though as 'C is for Cheap Collateral'.

This is the idea that if a bank agrees to loan the office parlour palm to the next door bank for a million dollars, and in return to rent their aspidistra for a million dollars, they both can update their asset sheets accordingly!

Now that's magic. But it was also the basis of the B for Bubble that brought down most of the world's banking system in 2008!

Of course, banks don't do silly stuff like buy each others' pot plants. But they do buy each others' packaged securities. And for many years, these packages became more and more complex, and thus more and more about buyer and seller agreeing on what mysterious qualities made the deal realistic. We know where that ended up: with thousands of dodgy loans to people who had no income or maybe had even died being bundled up and sold as top quality assets. Banks are plagued by problems with so-called ‘ghost’ collateral that disappears or is pledged to several lenders at the same time! After the crisis, the European Central Bank looked at the use of such devices and in a discussion paper wrote:

"the use of collateral is neither a sufficient nor a necessary condition for financial stability."*

The logicians could not have put it better!


https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2107.en.pdf

23 August 2020

The Necessity of Free Will

Eric Hanson, ArtAsiaPacific Magazine, Mar/Apr 2013
by Thomas Scarborough

I propose to solve the problem of free will.

The problem is, quite simply, the view that we live in a world where causality reigns supreme. If causality reigns supreme, then there can be no free will. And if we admit quantum indeterminacy to the picture, neither is indeterminacy free will.

I propose that the problem rests on an ancient conceptual dichotomy: the things-relations distinction. I propose, too, that this distinction is illusory. Aristotle called it the features-dispositions distinction. Wittgenstein called it the objects-arrangements distinction. We find it, too, in language (the nouns-verbs distinction), and in maths (variables-operators).

The alternative is obvious: there is no such distinction, but rather a fusion of things.  The philosopher Mel Thompson describes our world as ‘a seamless web of causality that goes forwards and backward in time and outwards in space’. ‘Seamless’, if we take it to mean exactly that, implies that there are no seams; there is no separation between things; therefore there is no relation between them.

Our reality has been variously described as an undifferentiated stream of experience, a kaleidoscopic flux of impressions, a swirling cloud without determinate shape. To make sense of this, then, we need to separate it into sounds and sights, surfaces and motions—which is individual things. We take aspects of a seamless whole, and we isolate them from the whole. Once done, we are able to trace relations between them.

With this, we have the basis of causality.  But in a seamless reality, where there is a fusion of things, all things cause all things. Even the language which we speak has an urge towards such fusion. There is an ‘evil’, wrote the philosopher and statesman Francis Bacon, in defining natural and material things.  ‘Definitions themselves consist of words, and those words beget others’.  Ultimately, our words reach into everything.

In the midst of an undifferentiated expanse, therefore, we create things, and we create causes. We isolate causes from the seamless whole—and with them, effects. But these causes must always strip something off.  This is why our thinking in terms of causality—which is supremely embodied in the modern scientific method—must bring about unwanted side effects of all kinds, through stripped-off relations.

When we say that A causes B we are, as it were, placing our drawing compass on the seamless web of causality and demarcating a circle in the midst of it: 'A'.  Outside of this circle lies the entire, seamless universe, and this knows no 'things'—until we create them in its midst. And when we create them, we create the intractable problem as to what a relation actually is.  A property?  An attribute?

Someone might object. Even if we have no things, no objects, no features (and so on) with which to create causality, we still have a reality which is bound by the laws of the universe. There is therefore some kind of something which is not free. Yet every scientific law is about A causes B. Whatever is out there, it has nothing in common with such a scheme—that we can know of anyway.

One more step is required to prove free will. Every cause that I identify is a creation of my own mind, in that it is freely chosen.  I am free to create it—which is, to demarcate the circle with the drawing compass. When I say that A caused B, I omit C, D, E, and every other possible cause, with the exception of what I want to create.  This is a choice without any kind of necessity.

I fire a shot at a clay pigeon. I choose the cause, and with the cause I choose the effect, and the pigeon shatters in the sky.  Now I see a nearby church bell.   I choose the cause, and I choose the effect, and an entire village awakes from its slumbers on a drowsy afternoon.   In this lies free will.  Cause and effect might seem iron clad—yet it is itself freely chosen.

But did I not cause my causes to be created?  Are not the causes and effects we invent themselves caused in some way?  This possibility is excluded.  We would need to readmit A’s and B’s to our scheme before we could claim cause.

David Bohm wrote that quantum theory is ‘the dropping of the notion of analysis of the world into relatively autonomous parts, separately existent but in interaction’.  In fact, this applies in every sphere.  Causality is illusory.  Not only that, but to say that any such illusion is caused is to admit causality through the back door.  There is no back door. 

16 August 2020

And the Universe Shrugged




Posted by Keith Tidman

It’s not a question of whether humankind will become extinct, but when.

To be clear, I’m not talking about a devastatingly runaway climate; the predations of human beings on ecosystems; an asteroid slamming into Earth; a super-volcano erupting; a thermonuclear conflagration; a global contagion; rogue artificial intelligence; an eventual red-giant sun engulfing us; the pending collision of the Milky Way and Andromeda galaxies. Nor am I talking about the record of short-lived survival of our forerunners, like the Neanderthals, Denisovans, and Homo erectus, all of whom slid into extinction after unimpressive spans.

Rather, I’m speaking of cosmic death!

Cosmic death will occur according to standard physics, including cosmology. Because of the accelerating expansion of the universe and the irrepressibility of entropy — the headlong plunge toward evermore disorder and chaos — eventually no new stars will form, and existing stars will burn out. The universe will become uninhabitable long before its actual demise. Eventually a near vacuum will result. Particles that remain will be so unimaginably distanced from one another that they’ll seldom, if ever, interact. This is the ultimate end of the universe, when entropy reaches its maximum or so-called thermodynamic equilibrium, more descriptively dubbed ‘heat death’. There’s no place to duck; spacefaring won’t make a difference. Nowhere in the universe is immune.

Assuredly, heat death will take trillions of years to happen. However, might anyone imagine that the timeframe veils the true metaphysical significance of universal extinction, including the extinction of humans and all other conscious, intelligent life? And does it really make a difference if it’s tens of years or tens of trillions of years? Don’t the same ontological questions about being still searingly pertain, irrespective of timescale? Furthermore, does it really make a difference if this would be the so-called ‘sixth extinction’, or the thousandth, or the millionth, or the billionth? Again, don’t the same questions still pertain? There remains, amidst all this, the reality of finality. The consequences — the upshot of why this actuality matters to us existentially — stay the same, immune to time.

So, to ask ‘what is the meaning of life?’ — that old chestnut from inquiring minds through the millennia — likely becomes moot and even unanswerable, in the face of surefire universal extinction. As we contemplate the wafer-thin slice of time that makes up our eighty-or-so-year lifespans, the question seems to make a bit of sense. That select, very manageable timeframe puts us into our comfort zone; we can assure ourselves of meaning, to a degree. But the cosmological context of cosmic heat death contemptuously renders the question about life’s purpose without an answer; all bets are off. And, in face of cosmic thermodynamic death, it’s easy to shift to another chestnut: why, in light of all this, is there something rather than nothing? All this while we may justifiably stay in awe of the universe’s size and majesty, yet know the timing and inevitability of our own extinction rests deterministically in its hands.

A more suitable question might be whether we were given, evolutionarily, consciousness and higher-order intelligence for a reason, making it possible for us to reflect on and try to make sense of the universe. And where that ‘reason’ for our being might originate: an ethereal source, something intrinsic to the cosmos itself, or other. It’s possible that the answer is simply that humankind is incidental, consigning issues like beginnings to unimportance or even nonsense. After all, if the universe dies, and is itself therefore arguably incidental, we may be incidental, too. Again, the fact that the timeframe is huge is immaterial to these inquiries. Also immaterial is whether there might, hypothetically, be another, follow-on Big Bang. Whereby the cosmological process restarts, to include a set of natural physical laws, the possible evolution of intelligent life, and, let’s not overlook it, entropy all over again.

We compartmentalise our lives, to make sense of the bits and pieces that competitively and sometimes contradictorily impact us daily. And in the case of cosmic death and the extinction of life — ours and everyone else’s possibly dotting the universe — that event’s speck-like remoteness in distant time and the vastness of space understandably mollifies. This, despite the event’s unavoidability and hard-to-fathom, hard-to-internalise conclusiveness, existential warts and all. To include, one might suppose, the end of history, the end of physics, and the end of metaphysics! This end of everything might challenge claims to any singular specialness of our and other species, all jointly riding our home planets to this peculiar end. 

Perhaps we have no choice, in the meantime, to conduct ourselves in ways that reflect our belief systems and acknowledge the institutional tools (sociological, political, spiritual) used to referee those beliefs. As an everyday priority, we’ll surely continue to convert those beliefs into norms, to improve society and the quality of life in concrete, actionable ways. Those norms and institutions enable us to live an orderly existence — one that our minds can plumb and make rational sense of. Even though that may largely be a salve, it may be our best (realistically, only) default behaviour in contending with daily realities, ranging from the humdrum to the spectacular. We tend to practice what’s called ‘manic defence’, whereby people distract themselves by focusing on things other than what causes their anxiety and discomfort.

The alternative — to capitulate, falling back upon self-indulgent nihilism — is untenable, insupportable, and unsustainable. We are, after all, quite a resilient species. And we live every day with comparatively attainable horizons. There remains, moreover, a richness to our existence, when our existence is considered outside of extraordinary universal timeframes. Accordingly, we go on with our lives with optimism, not dwelling on the fact that something existential will eventually happen — our collective whistling past the graveyard, one might say. We seldom, if ever, factor this universal expiry date into our thinking — understandably so. There would be little to gain, on any practical level, in doing otherwise. Cosmic thermodynamic death, after all, doesn’t concern considerations of morality. Cosmic death is an amoral event, devoid of concerns about its rightness or wrongness. It will happen matter of factly.

Meanwhile, might the only response to cosmic extinction — and with it, our extinction — be for the universe and humanity to shrug?

09 August 2020

A New Dark Age?

Genseric's Invasion of Rome, by Karl Bryullov, 1833
By Allister Marran
Are we living through a mini Dark Age in what was supposed to be a time of Enlightenment? Will history see this moment in the same light as it saw the decline of Western civilisation during the thousand lost years from 500 to 1 500 AD?
The democratisation of and free access to information with the rise of the Internet, mobile phones, and social media should have made people smarter, more knowledegable, and aware of the world around them.

Being able to access information previously locked behind the paywall of a university education, a military career, or a scientific laboratory seemed to be a renaissance-like utopia ushering in the next stage of the socio-cultural evolution of humankind.

But instead, we are now ostensibly far dumber for it, most notably because information without context is worthless, and the weaponisation of information and context, by nefarious actors trying to forge a new narrative that seeks to divide and conquer instead of unite and build, has had a devastating effect on world politics and social cohesion.

The value of information is that it is held in the trust that it is authentic, and this is where the manipulation of data has seen the biggest gains for bad actors seeking power and influence.

A false fact, or distorted perspective, can be drip fed into social conscience using complex social media algorithms which identify those most willing to buy into the lie using confirmation bias. The influencers are encouraged to share and comment, this lending the lie credibility, and ensuring that the common man or woman will continue to share it downstream, until a lie becomes generally accepted as truth for those wanting to believe it.

The right uses innate prejudice and hatred to rally support for bigotry and lies, which the anonymity of the Internet and a carefully chosen Twitter handle protects like a KKK mask of old.

And with the advent of cancel culture and left wing propaganda, people are too scared to challenge obvious falsehoods that emerge on the left, for fear of being cancelled themselves, a modern version of the Salem Witch Trials if you will.

This has permeated into every facet of life, not least of which being science and education. No student or professor dare take on any controversial research project, lest they be cancelled, stripped of tenure, or harmed if their scientifically verifiable results are taken to task by anyone on the left or right. Truth is no longer important; pandering to an already decided audience is the only thing that matters.

This is how progress stalls. This is how the last dark age began, when science and truth was made to conform to the beliefs and norms of the religious conveniences of men and women.

Perhaps humankind was not meant to have unfettered access to knowledge and information, as with great power comes great responsibility, and the average person does not have the ability to filter out the nonsense and internalise the good data.

The current course on which we are headed has dire consequences for everyone, as we have not existed this close together physically, yet far apart ideologically, for almost a hundred years, and without some method of bringing us all back together again, human being will either end up in conflict, or less desirably, enter another thousand years of Dark Ages.

02 August 2020

Picture Post 57: A Clown's Playground



'Because things don’t appear to be the known thing; they aren’t what they seemed to be neither will they become what they might appear to become.'

Photo credit: Rebecca Tidman
Posted by
Tessa den Uyl

Putting on a clown’s nose is a subtle and non-violent gesture to distinguish, but what exactly? The red ball on the nose un-identifies its wearer immediately, almost as if to become part of another species. Clowns may be funny and dramatic, stupid and incredibly smart, poetic without prose, offensive, scary, or sweet. Clowns attain to a world that mirrors the exaggeration of our being human.

The image of the clown offers the spectator a space to de-personalise in its turn, and in this psychological game the clown creates its playground. If a clown communicates, this is by touching all the unfolded layers we carry along within ourselves.


Indeed, clowns could very well have become a branch like ‘action psychotherapy’, only that clowns are much older than psychotherapy itself. Perhaps this is why many ideas about clowns are misapprehended, and a partly negative view or childishness in their regard belongs, not that much to them, but rather to how being human has been abased by their former appearances.