Friday, March 13, 2009

Mind Reading

Interpreting neural activity:
"fMRI scanners enable us to see the bigger picture of what is happening in people's brains," she says. " By looking at activity over tens of thousands of neurons, we can see that there must be a functional structure – a pattern – to how these memories are encoded. Otherwise, our experiment simply would not have been possible to do."


Klein on Summers:
That, at least, is how it should go. But at the moment, the normal market processes are broken. "It was a central insight of Keynes’ General Theory that two or three times each century, the self-equilibrating properties of markets break down as stabilizing mechanisms are overwhelmed by vicious cycles. And the right economic metaphor becomes an avalanche rather than a thermostat. That is what we are experiencing right now." Summers went on to tick off five of the mechanisms that seem to be feeding on themselves rather than being tamed by the market's Econ 101 tendency towards balance:

* Declining asset prices lead to margin calls and de-leveraging, which leads to further declines in prices.

* Lower asset prices means banks hold less capital. Less capital means less lending. Less lending means lower asset prices.

* Falling home prices lead to foreclosures, which lead home prices to fall even further.

* A weakened financial system leads to less borrowing and spending which leads to a weakened economy, which leads to a weakened financial system.

* Lower incomes lead to less spending, which leads to less employment, which leads to lower incomes.

Financial intermediation

Very interesting:
An intermediary can "add value" by reducing investors' risk in comparison to disintermediated investment, by for example, investing in a better-diversified portfolio than an investor would. An intermediary can very effectively reduce liquidity risks to investors, again by since idiosyncratic liquidity demands are themselves diversifiable. But risk reduction via these techniques can never reduce risk to zero. In fact, investing via an intermediary can never alter the fact that 100% of invested capital is at risk — business performance is not uncorrelated and projects can fail completely. Also, usually idiosyncratic liquidity demand occasionally become highly correlated, due to bank runs or real need for cash. Statistical attempts to quantify these risks are misleading at best, as the distributions from which inferences are drawn are violently nonstationary — the world is always changing, the past is never a great guide to the future for very long. Fundamentally, the value intermediaries can add by diversifying over investments and liquidity requirements is very modest, and ought to be acknowledged as such.

Wednesday, March 11, 2009

Adam Smith

On trust and markets:
[Adam] Smith explained why this kind of trust does not always exist. Even though the champions of the baker-brewer-butcher reading of Smith enshrined in many economics books may be at a loss to understand the present crisis (people still have very good reason to seek more trade, only less opportunity), the far-reaching consequences of mistrust and lack of confidence in others, which have contributed to generating this crisis and are making a recovery so very difficult, would not have puzzled him.

There were, in fact, very good reasons for mistrust and the breakdown of assurance that contributed to the crisis today. The obligations and responsibilities associated with transactions have in recent years become much harder to trace thanks to the rapid development of secondary markets involving derivatives and other financial instruments. This occurred at a time when the plentiful availability of credit, partly driven by the huge trading surpluses of some economies, most prominently China, magnified the scale of brash operations. A subprime lender who misled a borrower into taking unwise risks could pass off the financial instruments to other parties remote from the original transaction. The need for supervision and regulation has become much stronger over recent years. And yet the supervisory role of the government in the US in particular has been, over the same period, sharply curtailed, fed by an increasing belief in the self-regulatory nature of the market economy. Precisely as the need for state surveillance has grown, the provision of the needed supervision has shrunk.

A nation of jailers

Glenn Loury:
Nor is it merely the scope of the mass imprisonment state that has expanded so impressively in the United States. The ideas underlying the doing of criminal justice — the superstructure of justifications and rationalizations — have also undergone a sea change. Rehabilitation is a dead letter; retribution is the thing. The function of imprisonment is not to reform or redirect offenders. Rather, it is to keep them away from U.S. “The prison,” writes sociologist David Garland, “is used today as a kind of reservation, a quarantine zone in which purportedly dangerous individuals are segregated in the name of public safety.” We have elaborated what are, in effect, a “string of work camps and prisons strung across a vast country housing millions of people drawn mainly from classes and racial groups that are seen as politically and economically problematic.” We have, in other words, marched quite a long way down the punitive road, in the name of securing public safety and meting out to criminals their just deserts.
My recitation of the brutal facts about punishment in today’s America may sound to some like a primal scream at this monstrous social machine that is grinding poor black communities to dust. And I confess that these facts do at times leave me inclined to cry out in despair. But my argument is intended to be moral, not existential, and its principal thesis is this: we law-abiding, middle-class Americans have made collective decisions on social and incarceration policy questions, and we benefit from those decisions. That is, we benefit from a system of suffering, rooted in state violence, meted out at our behest. Put differently our society — the society we together have made — first tolerates crime-promoting conditions in our sprawling urban ghettos, and then goes on to act out rituals of punishment against them as some awful form of human sacrifice.

Tuesday, March 10, 2009

Quantum Swampman

The original Swampman thought experiment is here.

An alternate version of "Swampman": Let's get rid of the lightning bolt (too dramatic), and just go with quantum fluctuations. Virtual particles. That sort of thing.

In this version, Davidson is vaporized by the unlikely but not impossible simultaneous quantum tunneling of all of his constituent particles for random distances in many random directions. BUT, by another completely unrelated and hugely unlikely (but not impossible) quantum event, a whole new set of exactly identical particles materialize from the background vacuum energy of space and Swampman is born. However, the process happened so rapidly that Swampman is not even aware that he isn't Davidson, and no one watching would have noticed the change either.

Now, 10 minutes go by, as Swampman continues his oblivious enjoyment of the murky swamp, and then suddenly the same thing happens again. Swampman is replaced by Swampman-2. And again it happens so fast that neither Swampman-2 nor any observers notice it.

Now, 10 seconds go by and Swampman-2 is replaced by Swampman-3, via the same mechanism. And 1 second later, the same thing again. And so on until you get down to whatever timeslice you like.

So in this case, neither Davidson/Swampman nor anyone else who is observing him OR interacting with him will have any idea that anything is amiss. And the reason that no one notices anything wrong is that there is a continuity, and a relationship, between the information that is represented by the particles of the various versions of the Swampmen and Davidson, EVEN IF there is no causal connection between the particles themselves.

Sunday, March 8, 2009

Bankers can't be trusted

There is another argument, implicit or explicit, for the nationalisation of banks; we can not trust bankers not to leave with the cash, let alone spend any of the assistance provided by the government in the public interest. Two recent studies that analyse the experience of recent years show that bankers will not hesitate to enrich themselves at the expense of the public if they have the opportunity.

The Watchmen

A good review by Roger Ebert.

Which continued this link to a good youtube video on quantum mechanics and electrons.

Wednesday, March 4, 2009

A shadow universe

A bizarre universe may be lurking in the shadows
Such hidden worlds might sound strange, but they emerge naturally from complex theories such as string theory, which attempts to mesh together the very small and the very large. Hidden worlds may, literally, be all around us. They could, in theory, be populated by a rich menagerie of particles and have their own forces. Yet we would be unaware of their existence because the particles interact extremely weakly with the familiar matter of our universe. Of late, physicists have been taking seriously the idea that particles from such hidden sectors could be dark matter.

The Sun

Ten Things You Didn't Know About The Sun:
When you go outside at night and look at the stars, almost all the stars you see are within 100 light years from us, and only a handful of the extreme brightest ones can be seen from farther away. If you were to pluck the Sun from the solar system and plop it down in some random location in our Galaxy, there's a better than 99.99999% chance it would be invisible to the naked eye.

Sunday, March 1, 2009

Dennett on Zombies

The Zombic Hunch:
Must we talk about zombies? Apparently we must. There is a powerful and ubiquitous intuition that computational, mechanistic models of consciousness, of the sort we naturalists favor, must leave something out–something important. Just what must they leave out? The critics have found that it’s hard to say, exactly: qualia, feelings, emotions, the what-it’s-likeness (Nagel)[13] or the ontological subjectivity (Searle)[14] of consciousness. Each of these attempts to characterize the phantom residue has met with serious objections and been abandoned by many who nevertheless want to cling to the intuition, so there has been a gradual process of distillation, leaving just about all the reactionaries, for all their disagreements among themselves, united in the conviction that there is a real difference between a conscious person and a perfect zombie–let’s call that intuition the Zombic Hunch–leading them to the thesis of Zombism: that the fundamental flaw in any mechanistic theory of consciousness is that it cannot account for this important difference.[15] A hundred years from now, I expect this claim will be scarcely credible, but let the record show that in 1999, John Searle, David Chalmers, Colin McGinn, Joseph Levine and many other philosophers of mind don’t just feel the tug of the Zombic Hunch (I can feel the tug as well as anybody), they credit it. They are, however reluctantly, Zombists, who maintain that the zombie challenge is a serious criticism. It is not that they don’t recognize the awkwardness of their position. The threadbare stereotype of philosophers passionately arguing about how many angels can dance on the head of a pin is not much improved when the topic is updated to whether zombies–admitted by all to be imaginary beings–are (1) metaphysically impossible, (2) logically impossible, (3) physically impossible, or just (4) extremely unlikely to exist. The reactionaries have acknowledged that many who take zombies seriously have simply failed to imagine the prospect correctly. For instance, if you were surprised by my claim that the Steinberg cartoon would be an equally apt metaphorical depiction of the goings on in a zombie’s head, you had not heretofore understood what a zombie is (and isn’t). More pointedly, if you still think that Chalmers and I are just wrong about this, you are simply operating with a mistaken concept of zombies, one that is irrelevant to the philosophical discussion. (I mention this because I have found that many onlookers, scientists in particular, have a hard time believing that philosophers can be taking such a preposterous idea as zombies seriously, so they generously replace it with some idea that one can take seriously–but one that does not do the requisite philosophical work. Just remember, by definition, a zombie behaves indistinguishably from a conscious being–in all possible tests, including not only answers to questions [as in the Turing test] but psychophysical tests, neurophysiological tests–all tests that any “third-person” science can devise.)

We Earth Neurons

Daniel Dennett:
Some years ago a friend of mine in the Peace Corps told me about his efforts on behalf of a tribe of gentle Indians deep in the Brazilian forest. I asked him if he had been required to tell them about the conflict between the USA and the USSR. Not at all, he replied. There would be no point in it. They had not only never heard of either America or the Soviet Union, they had never even heard of Brazil! Who would have guessed that it is still possible to be a human being living in, and subject to the laws of, a nation without the slightest knowledge of that fact? If we find this astonishing, it is because we human beings, unlike all other species on the planet, are knowers. We are the ones–the only ones–who have figured out what we are, and where we are, in this great universe. And we are even beginning to figure out how we got here.

These quite recent discoveries are unnerving, to say the least. What you are–what each of us is–is an assemblage of roughly a trillion cells, of thousands of different sorts. Most of these cells are “daughters” of the egg and sperm cell whose union started you (there are also millions of hitchhikers from thousands of different lineages stowed away in your body), but each cell is a mindless mechanism, a largely autonomous micro-robot, no more conscious than a bacterium, and not a single one of the cells that compose you knows who you are, or cares.