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Eco-philo-pol

Of Thanksgiving Turkeys and Black Swans

A couple of months ago I finished reading The Black Swan (TBS) by Nassim Nicholas Taleb. I suspect I’ll read it again sometime.

In a nutshell, TBS is about (un)predictability, uncertainty and knowledge. Karen and the kids bought me the second edition of TBS for Fathers’ Day. It’s the one with a lengthy postscript essay, which I thought was arguably the best part of the book. I was happy to read in the postscript (p. 333) that the author appreciates my rather slow reading of his book.

Uncertainty, TBS explains, is predominantly an epistemic problem, one that is subjective and one that the social sciences ought not model with conventional Gaussian methods. The propensity for Nobel prize-winning economists to wield bell curves is the target of much of Taleb’s disdain. Black Swans are those rare, unpredictable events that mathematics has no business in attempting to predict (i.e., because they’re unpredictable. Duh!).

Taleb contends that the concepts of probability and randomness as they are taught in universities by bow tie wearing academics, and used by all manner of practitioners are wholly unsuitable for application in most non-physical domains, like economics, policy and risk management. These are typically domains which are dominated by, often cumulative, human action. Sometimes, Taleb explains, these systems can be more appropriately modelled with power laws or fractal mathematics, which can render Black Swans grey; but these models are not intended to provide the concreteness of the more commonplace methods with which we’re familiar. More often, these systems ought not be modelled at all, particularly not with sophisticated mathematics or equations taken from physics text books, as they are Black Swan prone, and impermeable to these approaches.

With uncertainty’s epistemic roots, Taleb spends some time discussing some important aspects of knowledge. Knowledge is biased both in terms of its distribution and its verification. Consider the Thanksgiving turkey: it is fed day after day, given a place to roost (is that what turkeys do?) and generally cared for, until one day, chop! The turkey couldn’t have suspected this was coming. It’s an event lying totally outside its experience. A Black Swan. The butcher, on the other hand, knew what was coming all along. Not a Black Swan. There is an imbalance of knowledge here, highlighting the subjective nature of uncertainty. We don’t need to look far to find examples of this kind of uncertainty, and massively consequential historical events that illustrate the disproportionate impact that Black Swans have.

Knowledge is also governed by the confirmation bias: no matter how many pieces of evidence are collected in support of some theory or idea, only one piece of negative evidence is required to refute it. This is the basis for the Popperian notion of falsification, which is itself fundamental to the way science proceeds.

A related idea is that of silent knowledge, cheekily termed the “Casanova problem” by Taleb. This reflects the observation that we only remember confirmatory instances, the successes, and rarely the failures. Just think about startup companies. Look at Company A. They’re so successful because they did X, Y and Z, so we should do the same. Of course, there may be a graveyard full of companies that did X, Y and Z, too. The silent evidence. Likewise, Casanova didn’t live to tell his tale because he was particularly clever or immunised against misfortune; rather, probability tells us that a small number of playboy types from that era would survive their ordeals and thus feel indestructible, and perhaps go on to write a book or two about their experiences. But we don’t hear about those other Casanovas, who weren’t quite so lucky. This problem tends to make us blind to the real course of history.

Taleb moves on to describe how social systems are currently modelled by social scientists, and it is here that he is especially scathing. Economics, particularly academic economics, is full of phonies, says Taleb. Run from anyone who tells you that Brownian motion or Heisenberg’s uncertainty principle can model human behaviour. Or, if you’re not the running type, put a mouse down the back of their shirt when they least expect it. These things don’t model true randomness or uncertainty; they model a very tame version of it. This is, he says, evidenced by the fact that our coffee cups don’t jump off our coffee tables. Yet, the equivalent of jumping coffee cups happens with relatively high frequency in social systems (e.g., stock market crashes).

Rather than find false safety in econometrics and other phony methods, writes Taleb, we should heed the advice of that intuitive economic philosopher, Friedrich Hayek. In Hayek’s view, it is impossible for a central planner to aggregate all the pieces of data required to make a meaningful forecast of the economy and to plan a priori. Rather, the interactions between the individual agents in the system, who each hold knowledge, often tacit knowledge, of their own, result in a coherent, self-organised system — what we might call society (though Lady Thatcher mightn’t call it such). One way of looking at this idea is that locals can integrate local knowledge in a way that a central planner never could. The difficulty in central planning has been met by economists with increasingly “scientific” methods, but this creeping scientism, as it was called by Hayek, is just making matters worse according to Taleb. It is the scandal of prediction. Medical empiricism, evidence-based medicine or clinical medicine, is perhaps the field to which economists should look for inspiration, rather than to physics. Physics, funnily enough, is for the physical world, where its methods and models apply, and where the Gaussian and related distributions are observable in reality. But its models are often inappropriate for the social world.

TBS presents an idea born of a rich body of existing literature, but perhaps nobody in the relevant fields has articulated their ideas as colourfully and passionately as Taleb. I will say that while his narrative is colourful, and while it’s generally comprehensible by the amateur reader (like me), I did find his rambling style a bit hard to digest at times; the book doesn’t flow as well as it could have. Taleb can also be rather self-indulgent at times. Nevertheless, this is one of those books that any thinking person should get a hold of and read. Gift it to someone as a late Christmas present. In fact, my dad scored a copy of it today (New Year’s Day, 2011) for “Christmas”, as my parents just arrived in Brisbane from Cairns. I’ve lent my own copy out to someone, and I hope she remembers to bring it with her next time she travels to Brisbane so that I might lend it to another interested reader.

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Eco-philo-pol

The Australian and the new Battle of Jericho

When the Israelites crossed the River Jordan into the land of Canaan, they came upon the city of Jericho. God spoke to the leader of the Israelites, Joshua, saying he and seven priests should walk around the city once a day with the Ark of the Covenant, until the seventh day, at which time they were to march around the city seven times and then sound their ram’s horns. This Joshua and the priests did. The walls of Jericho collapsed, being particularly susceptible to bad music, enabling the Israelites to storm into the city, slaying every man, woman and child (barring the Canaanite traitor Rahab and her family, who had provided Joshua’s spies with shelter, and possibly other services). Once Joshua ensured Jericho was completely burned to the ground, he declared that anyone who attempted to rebuild the city would pay the price of their firstborn son (at the time it would seem, firstborn sons were routinely the subject of honour killings to “right” the apparent wrongs committed by their daddies, or were sacrificed to prove their daddies’ faith or allegiance to something, like a god for instance). A rather gruesome Biblical tale, but thankfully one that carbon dating and other methods have shown to be completely fictitious.

Fast forward a few thousand years to the present day, where a not altogether dissimilar battle is taking place. Sure, it doesn’t involve child sacrifices or indiscriminate killing. At least not yet. But bad music has been aired, walls have fallen down, people have been burned, and some sections of the Australian twittering class consider that threats have been made, if not against their firstborns, then against their “rights”.

For those few who don’t know, Grog’s Gamut is a blog written by a public servant, which came to prominence during the 2010 federal election campaign. The author of the blog remained anonymous until recently. He strongly criticised the news media’s coverage of the campaign, as many others were doing, but also made some suggestions for how to improve the coverage. The ABC decided to heed Grog’s advice, leading some sections of the media to conclude that discovering and revealing the true identity of the public servant behind Grog’s Gamut was in the public interest. On Monday, September 27, 2010, James Massola, the Joshua of our little story, wrote in The Australian that the public servant behind Grog’s Gamut was one Greg Jericho. So began the new Battle of Jericho, otherwise known as Groggate.

With the ram’s horns blown, and the Grog’s Gamut persona crumbling around him, Jericho has been exposed. Defending him and the right to anonymity are the Twitterati, armed with their virtual vuvuzelas loaded with 140 character bursts of noise, which make a worse racket than ram’s horns.

What’s got everyone so hot under the collar? Why shouldn’t Jericho have been unmasked? It’s an interesting question, but as we shall see, not the most important one.

The title of Massola’s (controversial) article is “Controversial political blogger unmasked as a federal public servant“. Besides the fact that we already knew beforehand that the Grog’s Gamut blog was written by a public servant, one must ask, what makes Jericho controversial, and in whose eyes is there a controversy? There is little evidence, as far as I can see, that anyone other than The Australian found any controversy whatever in the fact that Grog’s Gamut was written by a public servant. In fact, one is hard pressed to find evidence that The Australian itself considered Grog’s Gamut to be controversial. The only two references to Grog’s Gamut in The Australian I can find prior to September 27 is the article, written by Amanda Meade, detailing the events leading to the ABC’s change in the way they covered the 2010 election, and another written by Massola pointing out the increasing relevance of Twitter and blogs. Both articles paint Grog’s Gamut in a neutral-tending-towards-positive light. Not a hint of controversy anywhere. Tellingly, Massola writes of blogs and tweets:

And as Grog’s post shows they are increasingly relevant, whatever the identity of the poster.

(Emphasis mine.) This glaring absence of any prior mention of controversy in relation to Grog’s Gamut hints at mischief on the part of James Massola and The Australian. This post hoc rationalisation of the decision to out Jericho on the basis of public interest is a cloak weaved of the finest sanctimony, designed to obscure the newspaper’s real reason (if one can call it a reason) for revealing Jericho’s name: opportunism. There are at least two casualties of this decision, and they are Greg Jericho and journalism.

If it wasn’t The Australian who initially labelled the Grog’s Gamut blog controversial, was it the public? Jericho made no attempt to hide the fact that he was a public servant. Yet, I do not recall any public outcry in regards to his employment in that role when his blog gained a little bit of fame. Further, when Massola blew Grog’s cover, nothing of consequence occurred insofar as the original story: that the author of the Grog’s Gamut blog was a public servant by the name of Greg Jericho. On the contrary, the great bulk of discussion was and still is whether The Australian newspaper had done the right thing by outing Jericho. Thus, regardless of whether you’re on the side that says Jericho was fair game or the side that says his desire to remain anonymous ought to have been respected, the fact of the matter is that The Australian created the news rather than reported it (for, as we will see, the outing of Jericho was inconsequential, except, perhaps, to Jericho himself, who may now be considering some significant life changes).

Consider that, like Joshua and his priests who marched around the ancient city for six days before striking on the seventh day, Massola and The Australian had known Grog’s true identity for months prior to publishing it. Why?

Consider also that the consequence (or lack thereof) of Massola’s story would have been the same if Grog had turned out to be, not Greg Jericho, but a public servant by the name of Bill Bloggs or Jane Jones. There was nothing to gain in putting a real name to an anonymous blogger in this case, unless the blogger turned out to be Kevin Rudd, or someone similar. Then you’ve got a news story. It seems, therefore, that Massola and the self-ordained high priests of the Church of the Public Interest in fact acted in their own interest.

So, while the issue of anonymity on the interwebs is an interesting one, arguably the more serious issue is whether our major news outlets are able to recognise what constitutes news and what does not, and importantly, whether in reporting a non-newsworthy item, they inadvertently or purposefully become the news story.

Although the main subject of this article is not the issue of anonymity, let’s examine it briefly. Unlike the view expressed by Annabel Crabb, that in her ideal world disclosure of identity would be a rebuttable presumption (that seems like a dubious use of the term, but we know what she’s getting at), in my perfect world people would play the ball and not the person. That is, it would not matter who is saying something, but what matters is what is said. Anonymity is one of the cornerstones of peer review in many fields of science, for example, and some widely read news publications such as The Economist still observe the practice of publishing without by-lines. A strong argument does not resort to ad hominem attacks. Paul Graham’s article on “How to disagree” is an excellent resource to point your friends and enemies to, should you want to suggest to them that their argumentative skills are in need of some improvement. Note, however, that the sort of pseudonymity employed by Grog’s Gamut does not prevent ad hominem attacks. Although it prevented ad hominem arguments against Greg Jericho, whilst this pseudonymity lasted anyway, it did not prevent ad hominem attacks against Grog’s Gamut, an online identity built up over the lifetime of that blog. For instance, it’s still possible to level attacks of the “well, Grog would say that, because based on his/her previous posts he’s/she’s a raging lefty” kind. (Aside: It’s interesting to note how many of the attacks against The Economist focus on the their practice of writer anonymity, rather than on its content. Take this quote from American author Michael Lewis, for example: The magazine [sic] is written by young people pretending to be old people. If American readers got a look at the pimply complexions of their economic gurus, they would cancel their subscriptions in droves.)

We may identify, then, several distinct reasons a person may want to unmask an anonymous blogger:

  1. I just want to know who it is, dammit!
  2. I want to find out in case the blogger has a (real) conflict of interest, in which case I will report it.
  3. I want to find out who it is so I can demonstrate my unmatched investigative skills or the scale of my professional network, thereby drawing attention to myself.
  4. I want to know so I can launch into an ad hominem attack on them, or cause them some other sort of grief.

Annabel Crabb’s desire would seem to fall into the first category. The Australian‘s and Massola’s stated reasons are in the second, though, as I have argued, probably align with third. Clearly, the hullabaloo on Twitter shows that some people would argue their reasons are encroaching upon the fourth. I have not seen enough evidence to give support to the claim that The Australian‘s motivations fall into the fourth category.

Nevertheless, many are choosing to interpret The Australian‘s actions as a threat against bloggers, and anonymous ones critical of The Australian in particular: “look what we did to Jericho; watch it, or we’ll take your firstborn.”

Will I continue to read The Australian? Of course, because some sections of the paper are worth reading. I don’t always agree with the editorials, but many of them take a considered and principled view in my opinion (probably the ones written by Paul Kelly; I don’t know for sure, because I don’t really care about the by-lines). It’s not all bad (despite what some people might think). And, in any case, The Australian happened to be in a position to break the “story”, but there’s nothing to say that another news outlet wouldn’t have broken the story if they were in possession of the same information. As mentioned above, the ABC‘s Annabel Crabb seems to think that what The Australian did was kosher, so presumably she would have reported Grog’s true identity if she had known it. Would I recommend the The Australian to others as a credible primary news source? Not on current form, and certainly not in isolation. However, I’m seriously contemplating Nassim Nicholas Taleb’s advice of just not reading the news, period. I’ll let you know how that one goes.

Note: This post is late. Very late. Hopefully it’s still relevant to somebody.

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Eco-philo-pol

How do you like your coffee?

While enjoying a fantastic cup of coffee courtesy of the Kuranda Coffee Republic up near Cairns, I remembered that I wanted to write something about the various “socially responsible” trade organisations, specifically those that have a strong association to the coffee trade. Of late, there are two main socially responsible trade systems vying for your conscience and your dollar: Fair Trade and Rainforest Alliance.

Fair Trade is really a movement consisting of a number of principal organisations: Fairtrade Labelling Organizations International (FLO), World Fair Trade Organization, Network of European Worldshops and European Fair Trade Association. While Fair Trade refers to the overall movement, Fairtrade refers to the certification given by FLO. In the rest of this article, I refer to Fairtrade, because when you’re in the supermarket shopping for coffee, that’s the label you will see. One of the defining features of Fairtrade is that it guarantees the coffee grower (or whatever the product happens to be; we’ll just be dealing with coffee in this article) a predetermined minimum price for his/her coffee.

You can look at Fairtrade as being just like free trade, except that the coffee being sold has been sprinkled with a range of “socially responsible enhancements”. As mentioned, chief among these enhancements is the knowledge that the farmer who grows the coffee beans that end up in your mug gets at least an agreed minimum price for the coffee, and his/her farm workers are similarly guaranteed a minimum wage. The idea is that the consumer is paying a premium for a superior product, because the coffee has been produced in a way that yields greater benefits for the farmers who grow the coffee. So, in this respect, the price of Fairtrade coffee is set by supply and demand, just like non Fairtrade coffee. There is an ethical dilemma here, however. An important criticism of Fairtrade, and one that I believe is completely valid, is that Fairtrade artificially inflates the price of coffee, encouraging more people to grow coffee, thereby increasing supply and, in the long run, placing downward pressure on coffee prices (non-Fairtrade coffee). This, of course, results in farmers receiving less and less for the coffee they grow. The ethical dilemma is that Fairtrade coffee is marketed as being socially responsible and fair, but the question must be asked “fair to whom?” Certainly not to the farmer who sees the price of his coffee going down because all his mates have decided to try to get a piece of the action. The already oversupplied coffee market becomes even further oversupplied. Consumers with a social conscience, I believe, ought to think twice about Fairtrade – it might not be as fair or as socially responsible as you think. Besides, I wonder just how many consumers of Fairtrade coffee take the time to find out what this minimum wage is, and what this minimum wage could buy in the given farmer’s country.

Rainforest Alliance has different goals to that of Fairtrade. Its mission is to

…conserve biodiversity and ensure sustainable livelihoods by transforming land-use practices, business practices and consumer behavior.

Rainforest Alliance certification means that goods (coffee in our case) are produced in an environmentally sustainable fashion, in adherence to the Sustainable Agriculture Network standards. These standards set down criteria relating to water pollution, erosion, environmental and human health, wildlife habitat protection, waste, water efficiency, farm management and working conditions. An important distinction from Fairtrade is that there is no artificial minimum price set for the product. As such, there is no artificial incentive introduced for more farmers to produce coffee, and therefore no distortion of production levels and prices. For these reasons, I’d be more comfortable buying Rainforest Alliance Certified coffee than Fairtrade Certified coffee. Rainforest Alliance certification is gaining momentum, with some big corporations, no doubt trying to improve their image, serving up or packaging up Rainforest Alliance Certified coffee. These include McDonald’s and Kraft.

Of course, there are other kinds of certification as well, including UTZ and various organic certifications. There’s also direct trade, whereby a coffee roaster or boutique coffee shop establishes a relationship directly with a coffee grower. This allows the buyer to select a grower who meets their own set of ethical criteria. Because the buyer knows first hand how the coffee is produced, there is no formal certification required. See the Cooperative Coffees site for a good explanation of the most common kinds of certifications.

kuranda-coffeeMeanwhile, back at the Kuranda Coffee Republic, Mike just serves cups of great coffee, which are each works of art and feats of engineering, with an ample helping of banter. His differentiation is that he sells only direct to people, spurning lucrative approaches by corporations. I guess you could call this extreme direct trade, so his coffee requires no further certification. It’s not about capitalism or not capitalism, he claims. It’s that he wants all of the beans he grows to be served with a “Hello, how’s it going” and a “Thanks for coming.” Sell to corporations, he argues, and you can’t be guaranteed that the shop assistant or barista will respect the beans and the experience. And here’s a tip: engage Mike in good conversation, say thanks for your coffee, and for your next cup he might just give you the discount he reserves for locals. Even at the standard price of $3 for a large cup, you’ll be hard pressed to find a better value coffee anywhere in Far North Queensland, or all of Queensland for that matter. Will I be going back to the Kuranda Coffee Republic next time I’m in Cairns? You bet.

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Eco-philo-pol

When policing is not policing

Nick Holmes a Court had his Blackberry forceably confiscated from his person by NSW police after he filmed them conducting a search. Apparently, the police had no right to do this, thank goodness. Holmes a Court twittered his experience minutes after the incident.

I’ve previously documented my thinking on issues of surveillance, though I hadn’t specifically considered the situation where a member of the public films a police operation or an operation conducted by some other state agency. I think what I wrote in that article holds for this case, too. If anything, I’d expressly encourage this sort of surveillance. We still live in a free democracy, don’t we?

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The Rudd shop

Have you seen the Kevin Rudd memorabilia store? It’s a hoot. My favourite items are the Kevin Rudd Decisive Action Doll, and the School Computer.

I certainly had a laugh, but one does have to wonder whether the Liberals might have found a better use of their limited funds…

Nah!

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Eco-philo-pol

A most singular election

It is a rare election that, by its outcome alone, achieves something so profound as the recent US presidential race. Ultimately, Barack Obama will, rightly, be judged by his accomplishments as the 44th President of the United States of America. He ascends to the presidency at a time of global economic turmoil; an era in which many scientists would have us believe our decisions and non-decisions will define the future of our planet and our place on it; and a decade that has seen the US and its allies engaged in wars on two fronts. It will not be an easy presidency.

Yet, for all that, his election in and of itself has given hope to millions of his fellow countrymen and women, and perhaps billions of people around the world who happen to share his skin colour. One gets the feeling that it is the kind of hope accompanied by equal parts relief and outright joy, particularly for those who have lived long enough to witness some of the various events in US history that each contributed to the moment of Barack Obama’s victory speech. What’s sad is that it has taken so long for this day to come. What’s sad is that the colour of someone’s skin still matters. History, too, is sure to remember him primarily as America’s first black president, regardless of what he achieves or fails to achieve over the next four or eight years.

Whether you agree with his politics or not (or, if like me, you feel there was so little depth to the presidential campaigns of both the major parties that it is nearly impossible to tell what policies will be pursued), you must admire Obama’s terrific achievement. To overcome McCain and Palin so definitively is an enormous feat; but to have first defeated the machine called Hillary and Bill Clinton is, when you think about it, incredible.

Living in a small country across the Pacific Ocean as I do, with any luck I will not be chastised for confessing that, perhaps more than anything, I look forward to being wowed by Barack Obama’s indisputably sublime oratory skills. A president with a command of the English language: how novel. Our very own prime minister might take a leaf out of the President-elect’s book, and infuse some inspiring words into his rather mundane speeches.

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Eco-philo-pol

Powell backs Obama

Republican Colin Powell, Secretary of State during George Bush’s first term as president, has endorsed Barack Obama for President of the United States of America.

Via James.

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Eco-philo-pol

Subprime Primer

Here’s a presentation from Slideshare about the economic meltdown. Really good.

Subprime Primer

View SlideShare presentation or Upload your own. (tags: subprime mortgages)
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Eco-philo-pol

The best commentary on the global economic crisis

Believe it or not, some of the best commentary I’ve found on the financial crisis sweeping the globe has been on the Essential Baby forum. Two posts by someone called LucyE, made in the week leading up to the approval of the bail out plan, are particularly good. The second post is the better of them. I just thought that this was an excellent, easy to understand high-level explanation of the current situation and what is likely to happen. LucyE’s posts were obviously appreciated by many of the members of that forum.

I also appreciated the below video explanation of collateralised debt obligations (CDOs), which are at the heart of the current problems. Worth a look. More in depth than LucyE’s analysis, but still understandable for the lay person. (Via Presentation Zen.)

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Eco-philo-pol

Gold, Silver, Bronze, Carbon

Georgia, it seems, may finally have reason to celebrate after what’s been a tough few weeks for the former Soviet nation. A revised tally of the 2008 Olympic gold medal count, which adjusts the tally according to carbon emissions, puts Georgia at the top of the rankings, well ahead of its nemesis, Russia. Jamaica, Ethiopia, Kenya and Cameroon round out the top 5 in the revised tally.

Gold medals per kilotonne of carbon emissions - top 5 countries

Australia, Russia, China and the USA are left trailing by some margin, as shown in the figure below.

Gold medals per kilotonne of carbon emissions - selected countries

Armenia tops out the revised ranking when all medals are taken into account.

All medals per kilotonne of carbon emissions - top 5

It gets even worse for the traditional powerhouses of Olympic sport.

All medals per kilotonne of carbon emissions - selected countries

Notes:

  1. The medal tally is from the official overall medal standings for the Beijing 2008 Olympic Games.
  2. Emissions data is from CDIAC – A Compendium of Data on Global Change. This means the emissions data is from 2004 (i.e., it is a little out of date). Anyone know of a complete set of more up to date data?
  3. This article is, of course, for your amusement only; this analysis is completely meaningless, and should not be cited as evidence in any argument (in pubs, courtrooms, scientific conferences or elsewhere).