While Einstein contributed extensively to the foundations of Quantum Mechanics, he refused to accept the philosophical ramifications of the whole field. His objection is probably best summarized by his famous quote: "My God does not play with dice."
If you think about it, the thematic differences are pretty profound. General Relativity implies that we can understand, describe, measure, (and potentially control) everything in the universe. Quantum Mechanics implies that we can't.
What I find interesting is that the Western way of understanding the world is very much like General Relativity. If you can't measure it, it doesn't exist/matter, which has led to a number of problems. Could some of our more systemic problems today be described metaphorically as stemming from our refusal to admit to this contradiction?
Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
Tuesday, March 27, 2012
Wednesday, June 16, 2010
BP's Options
I feel like talking about some current events right now, mostly because the Deepwater Horizon oil spill is such a big deal. Talking about it months from now may or may not make sense, so might as well do it now.
I'm going to come right out and say it: I think this is going to be bad. Really bad. I wouldn't be surprised if some of the oil gushing out right now ends up on the shores of Europe or Africa. BP's CEO made a rather silly statement early on to the effect of "this spill is ok, because the ocean is really really big." I don't have to explain the silliness of that, but I do think that fact matters: it's the reason this isn't going to threaten our survival on the Earth.
So far, every attempt to plug the leak has failed. It's been somewhere around 50 days since the explosion; at this point the specific number of days loses significance. It's pretty clear that they can't stop it with anything other than the slow solution, though we don't know if that'll work either. The amount of oil that has spilled out is a subject of debate over estimates, but by now it's easy to assume it's more than anything in U.S history, and likely will be the worst in world history before it's done.
There are two things I hope will come of this. One is that hopefully this will become a major impetus for alternative energy. That's the easy one. The other probably won't happen, but would be nice, and very interesting: BP needs to change. The way this is going, they are in the running to become... well... "reviled" is a good world. They probably have a chance at surviving this as a company, but I think they'd have a better chance if they change their entire paradigm of operation.
How? By becoming a "do-gooder" company. Currently, BP's purpose in the world is to supply people with petroleum. That mission needs to change to supplying the world with energy, and repairing the damage done. I'd propose that instead of fining them out of business, we should give them a directive that they spend a portion of their time money and manpower to clean up the gulf oil spill, until it is cleaned up.
I remember reading something about that sort of concept of business in the book What Would Google Do by Jeff Jarvis. The idea is that instead of doing everything you can as a business to extract as much money as possible from the world, you instead extract as little as you can and stay in business. This has two purposes: one, it makes you look better, and two, it makes it almost impossible for some new company to show up and undercut your prices. A company's purpose (morally, logically, philosophically) is to create value, not to extract value. Most oil companies have been in the business of extracting value. Now if BP is to survive, and perhaps even flourish, it needs to start over with a new philosophy of creating value, through clean energy and through cleaning the mess it has made. If it's smart and energetic about it, it can survive and come out of this disaster and in 5-10 years be better off than it was before.
Do I think any of that will happen? No, I avoid having high expectations. Hopes, yes. Expectations, no.
I'm going to come right out and say it: I think this is going to be bad. Really bad. I wouldn't be surprised if some of the oil gushing out right now ends up on the shores of Europe or Africa. BP's CEO made a rather silly statement early on to the effect of "this spill is ok, because the ocean is really really big." I don't have to explain the silliness of that, but I do think that fact matters: it's the reason this isn't going to threaten our survival on the Earth.
So far, every attempt to plug the leak has failed. It's been somewhere around 50 days since the explosion; at this point the specific number of days loses significance. It's pretty clear that they can't stop it with anything other than the slow solution, though we don't know if that'll work either. The amount of oil that has spilled out is a subject of debate over estimates, but by now it's easy to assume it's more than anything in U.S history, and likely will be the worst in world history before it's done.
There are two things I hope will come of this. One is that hopefully this will become a major impetus for alternative energy. That's the easy one. The other probably won't happen, but would be nice, and very interesting: BP needs to change. The way this is going, they are in the running to become... well... "reviled" is a good world. They probably have a chance at surviving this as a company, but I think they'd have a better chance if they change their entire paradigm of operation.
How? By becoming a "do-gooder" company. Currently, BP's purpose in the world is to supply people with petroleum. That mission needs to change to supplying the world with energy, and repairing the damage done. I'd propose that instead of fining them out of business, we should give them a directive that they spend a portion of their time money and manpower to clean up the gulf oil spill, until it is cleaned up.
I remember reading something about that sort of concept of business in the book What Would Google Do by Jeff Jarvis. The idea is that instead of doing everything you can as a business to extract as much money as possible from the world, you instead extract as little as you can and stay in business. This has two purposes: one, it makes you look better, and two, it makes it almost impossible for some new company to show up and undercut your prices. A company's purpose (morally, logically, philosophically) is to create value, not to extract value. Most oil companies have been in the business of extracting value. Now if BP is to survive, and perhaps even flourish, it needs to start over with a new philosophy of creating value, through clean energy and through cleaning the mess it has made. If it's smart and energetic about it, it can survive and come out of this disaster and in 5-10 years be better off than it was before.
Do I think any of that will happen? No, I avoid having high expectations. Hopes, yes. Expectations, no.
Friday, October 16, 2009
Fair Distribution of Profits
Tobold decided to branch out a little the other day, and wrote a nice post about some general economic thoughts. His metaphor is pretty good, but the really interesting stuff is the discussion running in the comments.
Thursday, October 8, 2009
Mistakes and the Economy
Gevlon has a post over on his blog about the common concept often referred to as "Mistakes were made (but not by me)". Usually, I'm not a big fan of his positions, though his thoughts can be very illuminating in attempts to understand different points of view. However, I think he has some interesting points, even he was a bit undiplomatic.
To summarize, when a human is presented with a contradiction, they generally have to solve it in some way. True, sometimes they simply avoid it, but that's not always possible. One of the most typical contradictions is the concept of being wrong. We're generally programmed to be confident; in fact, I would argue that it's a survival instinct. Few people get stuff done by doing it half-heartedly, so when we do something, we need to be confident that we are doing the "right" thing. However, if it turns out that it was the "wrong" thing to do, we're faced with this contradiction.
There are many ways that people deal with it. Generally, they either change their paradigm in some way, or they don't. If they do change, it could lead to a lowering of confidence, perhaps depression as an extreme example, or it could lead to them simply changing their behavior and knowledge, and moving on. However, some people don't change their paradigm when confronted with a problem. The most common instance of this is avoiding responsibility. If they can claim that it wasn't their fault, then their view of themself, their self-esteem, is preserved.
That tactic pisses me off. My beliefs stem from the omnipotence of knowledge, and to see someone willfully avoid knowledge in order avoid risk to their self-esteem is beyond frustrating. However, there is a caviat to that: a politician saying "mistakes were made (but not by me)" is a special case of this to me. In other words, in the current climate of politics, it's virtually impossible for a politician to admit having made a mistake, and not be harmed politically by it. In that case, even if they say it, it is possible that they are still admitting to themselves that they made a mistake, they're simply not allowed to admit it publicly. So in that case, my ire is not directed at the individuals, but at the system that forces that sort of behavior.
Which segues somewhat to the next connection I made (with some help from the end of Gevlon's post), which was to the economy. Milton Friedman once said (as I'm sure a lot of economists have said too) that the economy is not just a profit system, it's a profit and loss system. He implied that the two functions are equally important to the economy; I'd like to argue that they're not, loss is more important.
Another way of putting it is this: there are lots of things being done in the world today that make it a better place. Some of them are for profit, some are not. It is possible to get people to do things for the good of all without encouraging them with money. Price and money is a useful tool to encourage activity, but it is not strictly necessary. However, if someone makes a mistake, it's often difficult for them to admit, even to themselves, that they made a mistake (we're talking about large scale stuff here, like building a bridge for a town in the developing world, and it collapses). What makes it worse is that it's not usually considered a morally wrong act, or at least it isn't by the one who does it. If I steal from someone, unless I'm seriously messed up in the head, I know it's a morally wrong thing to do. However, if I convince myself that something wasn't my fault, that I didn't make a mistake, I don't usually have my conscience frowning at me.
That's where money comes back into the picture. No matter how well I've convinced myself that my idea/company/investment is a good idea, if I'm losing money, it doesn't matter. Because profit is (at least in this respect) a completely objective measure of success. And that's what makes it effective even in the face of mistakes, blame games, and self-delusion.
To summarize, when a human is presented with a contradiction, they generally have to solve it in some way. True, sometimes they simply avoid it, but that's not always possible. One of the most typical contradictions is the concept of being wrong. We're generally programmed to be confident; in fact, I would argue that it's a survival instinct. Few people get stuff done by doing it half-heartedly, so when we do something, we need to be confident that we are doing the "right" thing. However, if it turns out that it was the "wrong" thing to do, we're faced with this contradiction.
There are many ways that people deal with it. Generally, they either change their paradigm in some way, or they don't. If they do change, it could lead to a lowering of confidence, perhaps depression as an extreme example, or it could lead to them simply changing their behavior and knowledge, and moving on. However, some people don't change their paradigm when confronted with a problem. The most common instance of this is avoiding responsibility. If they can claim that it wasn't their fault, then their view of themself, their self-esteem, is preserved.
That tactic pisses me off. My beliefs stem from the omnipotence of knowledge, and to see someone willfully avoid knowledge in order avoid risk to their self-esteem is beyond frustrating. However, there is a caviat to that: a politician saying "mistakes were made (but not by me)" is a special case of this to me. In other words, in the current climate of politics, it's virtually impossible for a politician to admit having made a mistake, and not be harmed politically by it. In that case, even if they say it, it is possible that they are still admitting to themselves that they made a mistake, they're simply not allowed to admit it publicly. So in that case, my ire is not directed at the individuals, but at the system that forces that sort of behavior.
Which segues somewhat to the next connection I made (with some help from the end of Gevlon's post), which was to the economy. Milton Friedman once said (as I'm sure a lot of economists have said too) that the economy is not just a profit system, it's a profit and loss system. He implied that the two functions are equally important to the economy; I'd like to argue that they're not, loss is more important.
Another way of putting it is this: there are lots of things being done in the world today that make it a better place. Some of them are for profit, some are not. It is possible to get people to do things for the good of all without encouraging them with money. Price and money is a useful tool to encourage activity, but it is not strictly necessary. However, if someone makes a mistake, it's often difficult for them to admit, even to themselves, that they made a mistake (we're talking about large scale stuff here, like building a bridge for a town in the developing world, and it collapses). What makes it worse is that it's not usually considered a morally wrong act, or at least it isn't by the one who does it. If I steal from someone, unless I'm seriously messed up in the head, I know it's a morally wrong thing to do. However, if I convince myself that something wasn't my fault, that I didn't make a mistake, I don't usually have my conscience frowning at me.
That's where money comes back into the picture. No matter how well I've convinced myself that my idea/company/investment is a good idea, if I'm losing money, it doesn't matter. Because profit is (at least in this respect) a completely objective measure of success. And that's what makes it effective even in the face of mistakes, blame games, and self-delusion.
Thursday, September 24, 2009
Motivation and the Economy
Dan Pink on the surprising science of motivation. A very interesting TED talk. For those of you who don't know, TED stands for Technology, Entertainment, and Design. It's a conference where people who know a lot of stuff make engaging presentations to each other about everything under the sun. There are a lot of videos on youtube and elsewhere floating around of various talks, and almost all of them are extremely interesting.
This one was especially interesting to me in that it provides some challenge to one of the basic assumptions behind my political belief in fiscal conservatism, and free market economics (well, not completely free, of course). That challenge is the assertion that rewarding someone with money works if they have simple labor to do, but when their job becomes much more creative, simple external incentives may not be as effective.
On second thought, however, I'm not too worried that this will shake the foundation of my beliefs to it's core. Basically, this is a direct challenge to the half of the market that is about profit. In other words, the idea that money is the best motivation to get people to work hard. It is very interesting to hear strong evidence opposing that belief. I will have to think on it some more, and will probably come up with some other connections, extrapolations, and ramifications it may have, but that's a discussion for another time.
The other part of the market is about loss. Profit and loss, and people often forget about the loss part. Milton Friedman put it rather effectively some decades ago: "If Chrysler loses money, they have to change what they're doing; if Amtrak loses money, they just go get a bigger government appropriation." It's a simplistic example, but those are often the best at getting the idea across.
This TED talk does nothing to contradict the effectiveness of loss on efficiency in the economy. And I would also add that running an experiment where you threaten people with taking away some of their money if they don't solve the candlestick problem would not contradict the effectiveness of it either. Because loss is less a motivation, and more of a... how would I put it? A barometer? If you are losing money, that means your solution isn't working. It might mean you're not working hard enough, but it might also simply mean that the way you're working isn't good enough.
The candlestick test is insufficient to prove that "loss" is an ineffective tool of the economy to improve overall efficiency of society. This is because the test is too simple. Money and price is the economy's way of on voting whether a particular product is wanted or not. If you don't get moeny for it, then no one wants it, and you know you need to do something different. If your business is losing money, that means that the economy does not value your work enough to justify you continuing to do it.
This isn't to say that what you're doing is bad or good, it simply means that want you're doing is insufficient. The closest the candlestick problem gets to representing that state would be the case of using the thumbtacks to attach the candle to the wall, or trying to glue it to the wall with it's own wax. Both methods do not work. Not earning enough money is the market's way of letting you know that your method did not work. And in that respect, it is not motivating, but it is useful.
This one was especially interesting to me in that it provides some challenge to one of the basic assumptions behind my political belief in fiscal conservatism, and free market economics (well, not completely free, of course). That challenge is the assertion that rewarding someone with money works if they have simple labor to do, but when their job becomes much more creative, simple external incentives may not be as effective.
On second thought, however, I'm not too worried that this will shake the foundation of my beliefs to it's core. Basically, this is a direct challenge to the half of the market that is about profit. In other words, the idea that money is the best motivation to get people to work hard. It is very interesting to hear strong evidence opposing that belief. I will have to think on it some more, and will probably come up with some other connections, extrapolations, and ramifications it may have, but that's a discussion for another time.
The other part of the market is about loss. Profit and loss, and people often forget about the loss part. Milton Friedman put it rather effectively some decades ago: "If Chrysler loses money, they have to change what they're doing; if Amtrak loses money, they just go get a bigger government appropriation." It's a simplistic example, but those are often the best at getting the idea across.
This TED talk does nothing to contradict the effectiveness of loss on efficiency in the economy. And I would also add that running an experiment where you threaten people with taking away some of their money if they don't solve the candlestick problem would not contradict the effectiveness of it either. Because loss is less a motivation, and more of a... how would I put it? A barometer? If you are losing money, that means your solution isn't working. It might mean you're not working hard enough, but it might also simply mean that the way you're working isn't good enough.
The candlestick test is insufficient to prove that "loss" is an ineffective tool of the economy to improve overall efficiency of society. This is because the test is too simple. Money and price is the economy's way of on voting whether a particular product is wanted or not. If you don't get moeny for it, then no one wants it, and you know you need to do something different. If your business is losing money, that means that the economy does not value your work enough to justify you continuing to do it.
This isn't to say that what you're doing is bad or good, it simply means that want you're doing is insufficient. The closest the candlestick problem gets to representing that state would be the case of using the thumbtacks to attach the candle to the wall, or trying to glue it to the wall with it's own wax. Both methods do not work. Not earning enough money is the market's way of letting you know that your method did not work. And in that respect, it is not motivating, but it is useful.
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