Value of society’s health | 02/07/2015
Policy makers, both sides of the aisle and across the pond, often seem to miss the big picture. Sure, a democratic system that works in 4 and 5 year election cycles, is not amenable to strategy. Healthcare, a lighting rod for idiots running for office, is a complex question. For most of their history, humans were driven by simple objective functions – food and sex, dominating anything else. In the modern world, for most, the equation has not changed much. Although the village elders may have thought strategically about the health of the clan, as managing a portfolio of men and women with high specialization is not a trivial problem, such ideas did not flow much further.
The idea of society, an abstract concept, is very new. In the modern context of interconnected humans by technology, the definition of society certainly has been expanded. Facebook boasts of a society, nearly billion strong and that system is not significantly different from China and India. Although politicians would like to cleanly divide populations by faith, ignorance and color, fitting them neatly into societal fragments, such ideas have been rendered obsolete for a while.
Assuming that one can clearly understand societies – an interconnected organism - then one can envision the best way to nourish it. The foundational elements of a modern society are health and education. Every participant benefits from positive externalities associated with these common goods. Thus, policy imperatives that substantially enhance health and education should be dominant in a modern society. However, the tactics of implementation differ significantly. Health, for example, is as much the responsibility of an individual as it is of the society. Thus, an individual who does not care for her health and education (societal goods) cannot be helped by society. Her actions, then, will be against utility maximization for herself and more importantly, for the society.
Upgrading a society is likely a two-step process – first, information has to be widely available to all participants including the society’s objective function. Then market forces have to take over to move the system to a better state – providing appropriate incentives and disincentives to all participants as long as there are no market failures. If market failures are present in the provision and use of common goods, they have to be removed through appropriately designed constraints. And, all policies have to be consistently implemented.
It seems unlikely that modern humans can design next level societies as they seem to lack necessary knowledge and skills.
Cultural slippage | 02/03/2015
Human societies, from inception, have shown a positive slope, albeit small, toward higher culture – defined by a better and abstract understanding of extra-self. Arguably, contemporary modern humans show measurable slippage in culture. Alarmingly, this could be big enough to reverse many centuries of progress. The instruments used to sustain a positive slope in culture for centuries, such as religion, are largely responsible for reversing the trend, now.
For most of the history of the upstart humans, it was art that provided the fuel for a positive cultural slope. For the past several centuries, however, science has taken a dominant role. But it has been inferior to provide a sustaining momentum to the human psyche. Materialism, that spreads like cancer, coupled with prescriptive science, has largely assured that the trend reversal is permanent. It has been successful in dividing the world into tiny fragments, each apparently different but certainly fighting the rest. It is ironic that at the peak of pride for technologists, the world shows signs of humans returning to their origins, when little technology was present.
The slope of cultural progress, the only tangible measure of advancement for the human mind, has turned negative again with little chance of yet another reversal.
The utility of strategy | 01/22/2015
Strategy, a long term view of evolving uncertainty, has been misunderstood. Blue chip consulting firms and investment banks - sultans of PowerPoint and handlers of boardroom dramatics, have been leading firms in the wrong direction for decades. Business schools, filled with those adept at finance and accounting, have been drilling the wrong stuff into the brains of every budding graduate. The economy is suffering from ”stratgeists” and not from the lack of them.
Strategy, however, is a useful construct, not for individuals or organizations but for society. For the society, it provides guidance to nourish a stable, productive and improving population, able to propagate the human genes, across space and time. For individuals and organizations, with limited decision and harvesting horizons, strategy provides negative value. This inherent conflict – the whole benefiting from longer horizon thinking but not the parts, means that the former is likely to lose. Utility maximization for an individual or organization, is inherently constrained by limited time horizons and tacticians, indeed, add more value.
Strategy has to be redefined – it is not about entering new markets, culling dogs and embracing stars, maximizing equity value, next quarter’s earrings or next year’s bonuses. Strategy is a notion that may help assess and improve humanity.
Is living longer, better? | 01/16/2015
Statistics have been clear, humans are living longer (1). India, projected to be the most populous country in the world as the Chinese have been systematically controlling the birth/death ratio for long, cunningly culling the variety that could create more, has been able pump up nearly 20% of the world population to longer life expectancy. In India today, one is expected to live till 65 and the world at large to 71. The more important question is whether living longer is better.
Biological systems are preprogrammed to maximize life span. The basic equation is driven by reproductive requirements and those living longer are more likely to transmit their DNA to the next generation. Nature, with little flexibility to adjust to technological advances, seems to have gotten it wrong. Living longer is the biggest liability in the modern world, controlled by humans, who do not think straight. Today, over 80% of the healthcare costs of an individual is attributed to the last year of her life. For the individual, waiting to fade away in dignity, extension of life is likely utility destroying.
There could be an optimal life span for a human driven by the status of technology and the availability of resources. Moving outside such bounds is unlikely to be good and this has policy implications for medicine, education and societal formation.
Living on the edge | 01/11/2015
A recent article published in the open access journal ZooKeys (1) shows that the 10 Km wide asteroid that impacted the Earth, 65 million years ago – famous for removing the dominant species at that time, nearly terminated the weaklings, the mammals, as well. The paper portrays a picture that is striking – the placental mammals that dominate the world today – from mice to women – just got lucky. They do not seem to posses any significant advantages but the conditions afforded by the trauma, removed all competition, allowing them to thrive.
If mammals were any wiser, they would analyze this event in depth. Dinosaurs had technology – largely supported by biology but the discontinuity made the status-quo technology, a liability. Humans, apparently, on top of the food chain today, seem to be proud of their technology as well – most of which are finely tuned to current conditions. Their societies seem to have morphed into systems with little networked flexibility. Any minor perturbation could send them galloping back 50,000 years – hunting for food and sex, aided by a volatile organ, an evolutionary mishap, on their shoulders. Technology would not matter in such a discontinuity.
10 Km wide space debris are like pebbles in a system, teaming with primordial matter, sprinkled across an irrelevant planetary system at the boundaries of a less than ordinary galaxy, in a bubble universe, member of an infinite multiverse. Such an event is a near certainty for a planet that is in a straight jacket in limited space-time.
BELLA rules | 01/08/2015
Recent news that the Berkeley Lab has achieved an energy of 4.25 Giga Volts in a miniature accelerator, 9 centimeters long on a desktop, continues on a profitable path to next level of discoveries in Physics. Traditionalists, steeped in the philosophy of “size matters,” have been on the wrong track for over 50 years. They dug tunnels and abandoned them in Texas and they dug longer on the other side of the pond, that could prove pretty much anything in the midst of mind-numbing noise in the data. Size and volume do not matter, insights do.
It is ironic that scientists bow to engineers in an effort to make fundamental discoveries. Engineers, bored out of their wits, need no invitation to build ever bigger guns. This combination is deadly – it is costly and it takes away any possibility of fundamental discoveries in Physics – Not the Nobel seeking ones, but real ones. Einstein's obscure paper on LASER would have given a favorable direction 100 years ago for the brilliant minds of this century. But in the midst of mediocrity, some even nourishing visions of accelerators, the size of the solar system, it was all about size. BELLA thinks differently – and that ultimately could make a difference to the “dark” ages of Physics – where anything inexplicable is tagged with “dark.”
Few provide insights – but many publish, build and run experiments.
Simplification | 12/27/2014
A recent paper in Nature and Communications that demonstrates that wave-particle duality and the uncertainty principle in Physics can be explained by the same fundamental theoretical constructs, is instructive at multiple levels. First, incentives in the scientific and academic world has long been skewed toward the ability to publish – and often this means repackaging old wine in a new bottle. And, second, educational systems world over have missed a trick – learning the “established theories,” is a sheer waste of time for the next generation. In Physics, Medicine and Economics, most established theories are known to be wrong – as they do not explain observations or provide complex explanations that cannot be tested.
Engineering progress – largely based on empirical approximations of incorrect theories – does not necessarily mean that the knowledge content of humans is increasing. In some sense, it is the opposite. Educational institutions strive to drill complexity into the heads of budding engineers and doctors – draining any innate creativity. In effect, Universities manufacture zombies and automatons, steeped in tradition and the status-quo, unable to question or even think beyond what is in the text books. The idea that text books could be wrong is a major shock to the “educated,” as they have invested most of their lives learning what has been written down. But, writing something down and perpetuating it across generations, does not necessarily mean that it is correct. Modern technologies allow more rapid propagation of ignorance.
Simplification has to be the fundamental building block of knowledge creation in a world, mired in complexity and misaligned incentives.
Irrational life | 12/19/2014
Humans are often thought of as utilitarian, able to maximize individual and societal utility. In this scheme, however, life itself is irrational. With a hard constraint on time to expiry for the individual, society and the environment at large, extending all the way to the small part of an instance of the multiverse that is visible, utility itself loses all meaning. Utility, then, has to be defined in the micro – there is no impact an individual can make on the universe, she has been assigned to. But she could, certainly, enhance utility for herself within the hard constraints that exist – time, space and the limitations of knowledge.
Individual, then, provides any reliable subset of the measurement of utility. There are many parameters in this complex function, mediated largely by initial conditions. In very limited horizons, it appears sustaining herself is paramount. Sustenance, however, seems to have differing meaning for different people. The cost of sustenance appears to linearly increase with wealth. Perhaps, the slope of utility is a more meaningful measure for the individual. If so, those who start with a higher cost of sustenance are less likely to be able to enhance individual utility. For this cohort, life is even more irrational than the populace at large.
Life, a highly irrational notion, continues with inexplicable regularity.
Millennials’ tech | 12/16/2014
A recent article in the International Journal of Business Information Systems investigates how social networking could be used positively during campus emergencies. The generation gap between the young and the old has been growing at such a rapid rate that the knowledge held by the young encompasses most of what is relevant for the future. Octogenarians in the Congress, aging bearcats that govern the economy and those waiting to retire at the top of large organizations are slowing down technology progress to such an extent that most in universities today will never consider working for a company or voting. Recent elections that swept a “red wave” across the country accounted for a 35% turn out – most showing up to send their relatives back to Washington.
The millennials certainly have the technology – to eliminate crime, to grow knowledge and to create next level societies. If the “wise men,” could remove the shackles, they can grow a lot faster. For the status-quo, findings such as “social networking has a positive effect in emergencies,” seem to be a new revelation – but for the millennials, it is part of their life. The internet – as described once by a policy maker as “a series of tubes,” has taken a toll – not only on the ego of those who came before but also their ability to be effective. This has happened before – airplanes and computers themselves opened up discontinuities that separated generations – and it will happen again.
Those, unwilling to admit ignorance at the face of accelerating technology, will destroy knowledge, wealth and the security of future generations.
Sunny value destroyers | 12/13/2014
A recent article in the Review of Accounting Studies, that apparently demonstrates CEOs with “sunny dispositions,” – have a positive impact on stock price, is symptomatic of the time and money wasted by accounting and those who research it. Accounting, the bane of corporate America, deploys so many people – in Wall Street and inside companies, measuring, monitoring and reporting numbers - that have little impact on shareholder value. Part of the blame has to go to business schools, still steeped in tradition, graduating people with irrelevant skills for the modern world.
Shareholder value is seldom created by accounting or “sunny dispositions” of the CEO or the CFO, as claimed by the article. Apparently, the authors mistake bumps in stock price as shareholder value – it is not so. However, “sunny,” the reporter is, those who invest in the stock of the company, do care about the real assets of the firm and how they are growing. They do not really care how “gold plated,” the investment banker is and how McSleasy the consulting firm is. And BS, has an expiry date.
The idea that dressing up numbers and reporting them with a sunny disposition enhances the value of the firm has no empirical validation.