Posts Tagged ‘speculation’

A Ponzi Scheme

August 14, 2017 Leave a comment

Everyone has heard of Ponzi schemes, right? If not, here’s the dictionary definition: a form of fraud in which belief in the success of a non-existent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors. It is named after Charles Ponzi who set up elaborate money-making ventures based on the system in the early 1900s.

Typically the first few people involved in the scheme promise to pay huge returns to the “investors” and when these are demanded they are paid from the initial investments made from other investors. It can never last, of course, but the original perpetrators usually try to get out before it all turns bad.

A related scheme is known as a “pyramid scheme”. In these the early “investors” are paid a fee by those they recruit and a lesser amount by those the recruiters recruit, etc. It works as long as new people are recruited, but the “deeper” into the scheme you are the less you will get and the more you will be paying those at the peak.

A unique feature of these schemes is that the organisation or individual running the scheme doesn’t actually need to do anything apart from run the scheme. They don’t need to sell anything or provide any service, for example. The scheme is entirely about shuffling money from one place to another (generally from the “suckers” who sign up late to those who were involved in the initial setup of the scheme).

As we all know, there are some pyramid schemes which also sell products (I’m sure we can all name some) but that is more or less just a cover for the dishonest underlying structure.

I was thinking about this recently and realised that there are many aspects of our modern economic system which make it look like just another Ponzi scheme. The economy only works well while there is “growth” or “increased efficiency or productivity”, yet these aims are totally unsustainable in the long term, and even during the short period that they are sustainable they are often undesirable.

In New Zealand a major election issue is immigration. New Zealand allegedly has a healthy and growing economy – and some stats support this view – yet the vast majority of people don’t feel as if they are doing well. How is this possible? Well basically it gets back to the fact that this alleged “growth” we see in our “rock star economy” is all fake. It is primarily due to increased population, provided by immigration, and no real progress has been made at all.

Unfortunately for the politicians supporting this scheme, it cannot last. Like most rock stars our economy will crash and burn when the excesses of its existence overtake any worthwhile contribution it is making. Eventually everyone will realise they are just being ripped off by a giant Ponzi scheme. But by that time the people in government who have created this situation will probably be gone.

Of course I should point out two things here. First, a pyramid scheme is probably a better description that a Ponzi for the economy, but Ponzi just sounds cooler so it better serves my rhetorical narrative; and second, the economy isn’t a pure Ponzi or pyramid scheme and almost everyone would admit that it works well in some ways.

Despite the obvious and numerous faults in capitalism, for example, it does produce the goods and services the First World needs to maintain its lavish lifestyle. As I have pointed out many times in the past, the system is grossly inefficient, poorly focussed, and generally corrupt, but I would never claim it doesn’t have some good points as well, especially for the original investors in the Ponzi or the people at the top of the pyramid (AKA the 1%).

But it will fail because indefinite growth is impossible and because the 99% who support the people at the top of the pyramid will eventually catch on to what’s really happening and rebel. It’s not a matter of if, but when. Like all Ponzi schemes it will fail and it will probably happen through catastrophic collapse rather than a careful restructuring.

When it happens it won’t be pretty, just like poor old Charles Ponzi’s slow and painful decline and death after all his wonderful and elaborate schemes failed.

Boss, Leader, or Team?

July 18, 2017 Leave a comment

I have a cartoon on my wall (amongst my collection of socially and politically relevant material) which depicts two management styles. There are two images of a team of three people trying to move a heavy weight and in one the “boss” is sitting on top of the weight (and therefore making it even heavier and harder to shift) at his desk, giving out orders. In the second the “leader” is at the front of the team, helping to shift the weight, and indicating the best direction to go.

The symbolism is obvious and I’m sure most people would know which category the vast majority of managers belong in. They are the type who not only perform no useful function but actually make getting the job done even harder for the people actually doing it.

I honestly believe that many organisations would be better off just to put their managers in a room where they can have meetings all day but never do anything in the real world. I’m not making a rhetorical point here, I really do believe we would be better to pay them to do nothing (assuming they have to exist at all, but disposing of them all would be too big a step for most organisations).

But my real point is this: is it possible to have a third model where all 4 team members share equally in both the work and the decision making? Could all the team members look at the challenge ahead and decide the best course of action instead of just relying on the opinion of the one who is designated leader?

Because, in the end, the decisions made by management really are just opinions being imposed on other people simply because of an artificial hierarchy which has been created (by managers, of course). They have no natural right to impose their views on others. And they have no real justification for those opinions, because business cases can be used to justify anything, and it seems in most cases that the decision is made first, based on personal preferences, then a case is prepared to justify it.

You might be thinking at this point that this argument is somewhat hypocritical, because it’s just my opinion that management opinions are unreliable and untrustworthy. But I do have some evidence supporting my view. The wisdom of crowds is a well established phenomenon in both social science and statistical theory. Basically, in many circumstances, a large number of opinions, when properly aggregated, lead to far more accurate appraisals of the real world than an individual’s assessment.

So there is the simple fact that multiple opinions are usually better than just one. But it goes beyond that, because the leaders often have a very distorted view of what their decisions are trying to achieve. A positive spin on it would be to say that they see “the big picture” but it would be equally valid to say they see a picture devoid of any connection with reality.

And if none of the above appeals there is one last point I would make in support of my “team leadership” idea. That is the decisions are made by those they affect. In a top-down model the decisions are made by a leader, but the negative consequences are dealt with by those who must carry out the new idea. At least if a team finds themselves trying to implement a bad idea they know it is their own and can fix it.

I’m not necessarily suggesting this model (which I will call the “team” model as opposed to the “boss” and “leader” models in the cartoon) is the best solution, but I am wondering if it could work and why it isn’t considered as an option in more organisations (it has been attempted in some situations with mixed results).

The real danger with these new and radical ideas is that, even if the current system seems fairly bad, it still might be the best we can hope for given the vagaries of human nature and the realities of actual social and political interactions. Maybe the leader model is the best we can hope for. Or maybe – an even more depressing thought – the boss model, no matter how bad it seems on the surface, is best. I certainly hope not!

Let’s Vote on It!

June 15, 2017 Leave a comment

There’s an awful lot I don’t like about the way our society works. If you follow this blog you probably have realised this by now, based on the endless diatribe of negativity contained here. I think my fundamental disagreements can be summarised in just a few statements though, so I thought I might list them here, along with some suggested ways to fix them, of course.

1. I reject the need for politics, leadership and management. Why should one person be able to control another? We need to rid ourselves of politicians by moving to a direct democracy and leveraging the wisdom of crowds. And on a smaller scale we need to do the same thing in the workplace. All managers, CEOs, etc must be eliminated.

2. I reject capitalism. The pursuit of financial gain just encourages people to gain financially, not to make a useful contribution to society. The tragedy of the commons shows us that the pursuit of individual wealth will eventually lead to disaster. And no, greed is not good, except for the tiny fraction of people who are greedy, and even they will suffer in the long term.

3. I reject rules and regulations. It is utterly ridiculous how our lives are controlled by so many pointless and inane rules and laws. No one can possibly know them all, yet if we transgress against them we are punished. This includes laws set by politicians and policies and regulations set by companies and other organisations.

4. I reject special privileges given to both individuals and institutions. I am totally against the automatic right to rule given to royalty, and I can’t see why churches should not have to pay taxes like everyone else.

So, now I need to get on with the ways these issues might be fixed. Each one deserves an entire blog post to cover properly so I will just give a quick summary of the sort of solution I would suggest here. No doubt, in future admonishments of the status quo I will expound on these basic principles.

For leadership I suggest we institute a system of management by the people most affected. So every major decision could go to a vote and could be decided that way. Would that mean that every person would be constantly involved with the pros and cons of every potential change? No, because each person would be given a quota of votes they could use during the year and it would be up to them to choose the issues they wanted to use the votes on.

Everyone would have the same number of votes and voting would be easy because it would all work through the internet. What about people who don’t have a computer or don’t like technology? No problem, they would be given a dedicated device which does all the technical stuff for them and connects through the cell network. Anyone who didn’t have the ability or initiative to do even that probably shouldn’t be voting anyway.

We all know that bad decisions are often made by voters in democratic systems, but I say “so what?” Bad decisions are made by politicians and managers all the time. At least, using my method, the people would have “ownership” of the error and would be likely to fix it since no individual blame would be possible.

So what about a replacement for capitalism? Well we need to have a system which rewards behaviour which leads to the best outcomes for the majority rather than capitalism which does the exact opposite. I would be the first to admit that attempts at traditional extreme socialism (USSR, etc) have not worked well, so that isn’t a good substitute. I would suggest a system based on the internet voting I described above might be better. Individuals, companies, etc could be rewarded based on how much the majority of people think they are worth rather than how much they can extract from the existing corrupt system.

I suspect we would find that people working as cancer researchers would be paid more than those who chose to be currency traders under a system like this. Who would possibly argue with that? – apart from currency traders, of course!

Regarding rules and regulations. I don’t suggest we completely remove those, of course. For a start, we would need some of them to make the decisions arrived at by the systems I have already described binding on society.

But let’s think about the rules and laws we have now. As I said above, no one knows them all, yet we are expected to obey them. The reason this works is that the important rules (against murder, theft, etc) are understood by all moral, rational people so it doesn’t really matter whether they are laws or not, and the the more trivial rules (for example, the blasphemy laws I have discussed in the past) tend to be ignored anyway.

So why not have general guidelines instead, and use the voting system again to decide the guilt or innocence of offenders. Anyone could ask for an opinion on how they have been disadvantaged by another person. If one person stole from another they would probably be found guilty, but there might be special situations where society found the theft was acceptable. For example, if someone steals a small amount from another person who is really rich and uses it to buy some medicine a member of their family needs I would say that is no crime. Of course, if the voting system works as expected there won’t be huge discrepancies between the rich and poor any more so this situation might not even arise!

Finally, the special privileges. I’m fairly confident that a vote would quickly eliminate these odd deviations from what is fair. Churches would not be allowed to operate tax free, corporations would not be people, and tax havens would not be allowed. We all know these things aren’t fair and we all know the sophistry used to justify them doesn’t stand up to any fair appraisal. In my system they I think they would be gone.

So there it is: the new utopia! A world where decisions are made by the people, for the people. Lincoln’s dream might finally really happen. In the end it all seems to be about taking control from the self-serving elite and giving it to the people. I’m not naive enough to think that it will happen in any realistic time frame, but hey, it’s just an idea I’m tossing out there. Let’s vote on it!


April 21, 2017 Leave a comment

I recently finished reading (actually listening to the audiobook version of) the Michael Crichton novel, Next, which I found both compelling and interesting, and hard to “put down”.

I know that his work gets a certain amount of criticism because of his failure to follow what many deem to be the standard mechanisms writers should use to produce the best results (clear leading characters, strong single plot lines, full and complex character development) but I find his books quite engrossing because of the complex plots and interesting treatment of ideas and controversies.

Next was the last book Crichton wrote before his death from cancer in 2008 at age 66. I have read or listened to most of his other books and liked them for the same reasons I liked this one: he includes a lot of credible scientific and technical details; he often has several plots and sub-plots running simultaneously and interacting in complex ways; and he always has a greater philosophical, political, or scientific point to make.

I should emphasise that this is fiction based on science. In the introduction to the book the author says “this novel is fiction, except for the parts that aren’t.” and in a New York Times Book Review they described the book as “a barrage of truths, half-truths and untruths”.

Maybe the best example of this is in another of his novels, Jurassic Park (the one the movies were based on) where the dinosaur DNA is sourced from amber. This is a genuine technique but not one which is likely to allow recovery of material more than 65 million years old.

But the real point of Jurassic Park is not about *how* dinosaurs might be brought back to life but *if* they should. In the book the dinosaurs get out of control – as predicted by the expert in chaos theory (also a real thing and basically well portrayed) – despite the best efforts of the people in charge.

And this is a common theme in other Crichton books. They usually involve failures to allow for all possible problems, greed and unrealistic optimism leading to bad decisions, and incompetent and corrupt people causing systems to break down.

I found it interesting, as the book proceded, to try to guess which parts were true and, if they were based on fact, how much fact. So all of the following are parts of the book which sound odd but are essentially true: cells taken in medical procedures are used for profit by universities without the donors’ consent; body parts are harvested by morgues and funeral directors and sold; transgenic species, including monkeys, have already been created; modern human blonde genes probably originated in Neanderthals; and an artist has used his own fat (obtained through liposuction) to make a meatball served at a dinner party!

Actually, the only “fact” I checked which I couldn’t verify was the existence of a group mentioned in the book called the “society for libertarian biology” which doesn’t appear to exist. No doubt there are many other fictional elements too, that was just the only one I checked.

So here are some of the themes/ideas presented in the book which I agreed with, or at least found interesting…

We need to stop patenting genes. This is totally absurd from a logical perspective, it is intolerable from any reasonable moral viewpoint, and it doesn’t even make much sense from a business or economic angle, except for the company who has the patent for something they have no right to. There are many examples already of gene patents causing great harm to both individuals and society. The processes of science and discovery in general have been warped by business.

We need better rules for tissue storage and we need to enforce them. Again there are many examples of where companies have acted in very morally doubtful ways to profit from cells they “own”. The pursuit of profit has warped basic moral standards.

The real outcomes of research and development must be made public. Research and trials of new drugs and treatments sometimes leads to bad outcomes for the subjects, including death, and this should not be hidden behind commercial sensitivity and trade secrets. In fact (this is just my opinion), commercial sensitivity should always be rejected: all information relating to large organisations (companies, universities, etc) should be public. The pursuit of profit has destroyed basic fairness.

Studies of commercial products need to be transparent and performed by neutral scientists. Under the current system 90% of drug trials give positive results for the person funding the trial. It seems a clear case of where science has been corrupted by business.

We should avoid bans on research. All research is useful although some caution needs to be used in potentially dangerous or morally ambiguous situations. Again we need a scientific approach rather than a commercial one

Universities have become too commercial and their original function as unbiased commentators on society and originators of pure knowledge have largely gone. In public universities the taxpayers pay, the universities profit by selling their new discoveries to corporations who sell them back (with extreme profits) back to the taxpayers who paid for them to start with. Again, science has been corrupted by commerce

Look at the last sentence of each of those points and it is pretty obvious where the problem lies. The problem is the same one responsible for most of our modern problems: uncontrolled capitalism. It’s a point I have made many times and it is interesting that the same point is apparent in Crichton’s work, even though he is often considered a libertarian.

Finally, I liked this book. it was thoughtful but also fast paced, serious but also humorous in parts, based on fact but those were portrayed through fiction. The ultimate recommendation: I started another Crichton novel as soon as I finished this one!

Judgement Day

April 6, 2017 Leave a comment

I have made a few comments recently on the theme of the “next great change” in society, when we will transition from the industrial age to the information age. I’m sure a lot of people think my ideas are just crazy dreams, and I sometimes wonder whether that is the case myself, but I was interested to see that the famous science historian, James Burke, said very similar things in a recent podcast he was featured in.

Our current society is concerned with distributing resources in an environment of scarcity, controlling the means of production of those resources, and recruiting the labour necessary for production on the best possible terms for the people in control.

The inevitable result of this is a deeply divided society where a tiny fraction of the people get most of the wealth available, and we certainly see that today in the grossly uneven ownership of wealth by the top 1%.

But let’s look at the massive changes which are about to make everything we currently know obsolete. Some of this is my opinion of what will happen in the next 20 to 30 years, and some is from the Burke podcast where he takes a more extreme view than me, but one which might be placed a bit further in the future too.

The basic point is that there will be no shortages. Chemical synthesis and 3D printing will provide any materials needed. Efficient power generation (it’s unclear exactly what that will be, but it could be ultra-efficient solar, improved nuclear such as Thorium, or the ultimate power source: fusion) will provide all the power needed. Robotics will provide all the physical labour. And artificial intelligence will provide the creativity, invention, and overview.

Once a robot is made which can make more robots (of course with small improvements with each generation controlled by an AI) there is no need for a human to ever make anything again. And if the thinking machines (AIs) can design and improve themselves then everything changes because the rate of improvement would inevitably escalate exponentially.

Within a relatively short period of time there will be literally nothing left for humans to do.

And when that happens all out political structures, our economies, and even our value systems will become meaningless.

To many this sounds like a bleak prospect, and I agree to some extent. But what’s the point of resisting something which is inevitable? The Luddites resisted change which they saw as negative – and they were right in many ways – but they couldn’t stop the industrialisation process once it got started.

No doubt vested interests will try to stop these changes, or at least try to maintain control of them, but that just won’t be possible because there will be no point of leverage for them to base their power on. Who cares who has the most money when everything is free?

So getting back to that point about humans having nothing to do: what our role will be will very much depend on how the machines feel about us, because I’m sure that eventually we will no longer be able to control our ultra-intelligent creations.

If the machines decided that humans were pointless maybe they would just eliminate us, and maybe that would be the kindest thing. Or maybe they might find there is something about organic life which synthetic life couldn’t match so it still might have some value. Or maybe they might just want to keep humans around because we are self-aware and deserve a certain level of respect.

I do have to say that if I was an ultra-intelligent machine and looked around at how humans have behaved both in the past and present, I might be tempted to take the first option! Maybe it’s time for us to start behaving a little bit better so that when we are judged by our new synthetic masters we might be allowed to live.

It’s all rather Biblical, actually. Maybe there really will be a judgement day, just like Christianity tells us. But the type of god doing the judging won’t be the one imagined by the writers of any religious text. For a more accurate fictional appraisal of that future we should look at science fiction, not theology!

An Upcoming Apocalypse

March 31, 2017 2 comments

Recently I have been contemplating the possibility of an upcoming apocalypse. Why is that, you may ask. Well, there are several factors: first, there is the current political situation in the world, where regressive and extreme politics seem to be becoming popular; second, I have recently re-read a post-apocalyptic science fiction novel called “Earth Abides”; and third, I just listened to a podcast about the collapse of bronze age civilisation.

By apocalypse I don’t mean anything religious or Biblical, or course, and I don’t mean the world will be totally destroyed, or the Universe will end, or anything that extreme. I just mean a major collapse of the current civilisation and, hopefully, it’s replacement with something better. So maybe apocalypses can actually be good.

There have certainly been situations in the past where dominant civilisations have fallen after a period of stagnation and regressive thinking. We might look around the world today and see similar changes towards more inward thinking and conservative policies. Maybe these are early signs of an approaching apocalypse.

In Earth Abides (a novel written in 1949, but still quite relevant even though it does show a few anachronisms and other signs of being dated) most humans are wiped out by a virus. The few survivors band together into small groups and try to survive in various ways. The story is told in the third person and involves the events experienced by the main protagonist, Isherwood Williams (known as “Ish” – a rather symbolic name).

Initially Ish tries to maintain the old civilisation by teaching the children to read, and by planning to have his most intelligent son, Joey, learn about the old world and its technologies. But the lessons become increasingly pointless and when Joey dies in an epidemic he has to abandon that path. Eventually, as the old technologies, such as power and water, fail the tribe reverts to a more primitive lifestyle and the most useful skill he teaches them is how to make a bow for hunting.

But it seems that the new, simpler culture might not be such a bad thing, because the new members of the tribe (those born after the great disaster) are arguably happier than most of the people were before.

It’s a work of fiction, of course, and not too much should be extrapolated from it, but it does provide a useful perspective on what the actual benefits of society really are.

Apocalypses have been common in the past, although they tended to be localised, simply because global interaction between regions wasn’t possible. So societal collapse has ranged from Rome to Maya to Angkor Wat. The Maya are an interesting parallel to the story in Earth Abides. They abandoned their great cities and returned to a village-based lifestyle after a huge population collapse. No one seems entirely sure why.

According to the podcast on the bronze age, the causes of that collapse were quite complex and probably included an excessively intricate and dependent trading network (especially for tin), major natural disasters (especially earthquakes and drought), and attacks by foreign invaders. It would probably have been possible to survive any one of these influences, but not them all.

So let’s put it all together. Clearly we have an excessively complex trading network today. If one part was interrupted (like oil from the Middle East) it would cause a major collapse in society as a whole. We have natural disasters becoming more devastating as a result of climate change. And attacks from “outside forces” could be from a number of sources, including terrorism, which is a more symbolic than real threat, but maybe even more influential because of that.

At the end of the Bronze Age the interruption of trading in tin caused alternatives to be considered. Tin was used to make bronze, so alternative materials, especially iron, had to be used instead. In fact iron was much better than bronze and the iron age resulted. So one collapse lead to something new and better. Unfortunately many societies suffered a dark age of several decades to centuries between the two.

Maybe it takes destruction and darkness before creation and light can result. We might hope that we are more aware of these factors today and that we can abandon our “bronze age” – which is paralleled by the carbon fuel (oil, coal, etc) age today – and move to an “iron age” – modern renewable energy sources. But there is increasing evidence that this might not actually happen.

They say that necessity is the mother of invention. We could easily transform our society to a much better one any time we wanted to, but that probably won’t happen until the current one becomes totally unworkable. It’s just much easier to continue with the status quo. In Earth Abides the tribe just broke into an abandoned store and retrieved cans when they needed food. They didn’t need to do anything harder than that. But the cans couldn’t last forever. They never do.

What is Reality?

March 21, 2017 Leave a comment

You are probably reading this post on a computer, tablet, or phone with a graphical user interface. You click or tap an icon and something happens. You probably think of that icon as having some meaning, some functionality, some deeper purpose. But, of course, the icon is just a representation for the code that the device is running. Under the surface the nature of reality is vastly more complex and doesn’t bear the slightest relationship to the graphical elements you interact with.

There’s nothing too controversial in that statement, but what if the whole universe could be looked at in a similar way? In a recent podcast I heard an interview with Donald Hoffman, the professor of cognitive science at the University of California. He claims that our models of reality are just that: models. He also claims that mathematical modelling indicates tha the chance that our models are accurate is precisely zero.

There are all sorts of problems with this perspective, of course.

First, there is solipsism which tells us that the only thing we can know for sure is that we, as an individual, exist. If we didn’t then we couldn’t have the thought about existence, but the reality of anything else could be seen as a delusion. Ultimately I think this is totally undebatable. There is no way to prove that what I sense is real and not a delusion.

While I must accept this idea as being ultimately true I also have to reject on the basis that it is ultimately pointless. If solipsism is true then pursuing ideas or understanding of anything is futile. So our whole basis of reality relies on something which can’t be shown to be true, but has to be accepted anyway, just to make any sense of the world at all. That’s kind of awkward!

Then there is the fact that the same claims of zero accuracy of models of the world surely apply to his models of models of the world. So, if our models of reality are inaccurate does that not mean that the models we devise to study those models are also inaccurate?

And if the models of models are inaccurate does that mean there is a chance that the models themselves, aren’t? We really can’t know for sure.

I would also ask what does “zero accuracy” mean. If we get past solipsism and assume that there is a reality that we can access in some way, even if it isn’t perfect, how close to reality do we have to be to maintain some claim of accuracy?

And the idea of zero accuracy is surely absurd because our models of reality allow us to function predictably. I can tap keys on my computer and have words appear on the screen. That involves so much understanding of reality that it is deceptive to suggest that there is zero accuracy involved. There must be a degree of accuracy sufficient to allow a predictable outcome, at the level of my fingers making contact with the keys all the way down to the quantum effects working within the transistors in the computer’s processor.

So if my perception of reality does resemble the icon metaphor on a computer then it must be a really good metaphor that represents the underlying truth quite well.

There are areas where we have good reason to believe our models are quite inaccurate, though. Quantum physics seems to provide an example of where incredibly precise results can be gained but the underlying theory requires apparently weird and unlikely rationalisations, like the many worlds hypothesis.

So, maybe there are situations where the icons are no longer sufficient and maybe we never will see the underlying code.