Category: Science

Computing the Madness of People

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Bubble playing cardThe best paper I’ve read so far this year has to be Pseudo-Mathematics and Financial Charlatanism: The Effects of Backtest Overfitting on Out-of-sample Performance by David Bailey, Jonathan Borwein, Marcos López de Prado, and Qiji Jim Zhu. The title should ring alarm bells with anyone who has ever puzzled over the disclaimers made by mutual funds or investment strategists that “past performance is not a guarantee of future performance.” No, but we have nothing but that past performance to judge the fund or firm on; we could just pick based on vague investment “philosophies” like the heroizing profiles in Kiplingers seem to promote or trust that all the arbitraging has squeezed the markets into perfect equilibria and therefore just use index funds.

The paper’s core tenets extend well beyond financial charlatanism, however. They point out that the same problem arises in drug discovery where main effects of novel compounds may be due to pure randomness in the sample population in a way that is masked by the sample selection procedure. The history of mental illness research has similar failures, with the head of NIMH remarking that clinical trials and the DSM for treating psychiatric symptoms is too often “shooting in the dark.”

The core suggestion of the paper is remarkably simple, however: use held-out data to validate models. Remarkably simple but apparently rarely done in quantitative financial analysis. The researchers show how simple random walks can look like a seasonal price pattern, and how by sending binary signals about market performance to clients (market will rise/market will fall) investment advisors can create a subpopulation that thinks they are geniuses as other clients walk away due to losses. These rise to the level of charlatanism but the problem of overfitting is just one of pseudo-mathematics where insufficient care is used in managing the data.… Read the rest

Humbly Evolving in a Non-Simulated Universe

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darwin-changeThe New York Times seems to be catching up to me, first with an interview of Alvin Plantinga by Gary Cutting in The Stone on February 9th, and then with notes on Bostrom’s Simulation Hypothesis in the Sunday Times.

I didn’t see anything new in the Plantinga interview, but reviewed my previous argument that adaptive fidelity combined with adaptive plasticity must raise the probability of rationality at a rate that is much greater than the contributions that would be “deceptive” or even mildly cognitively or perceptually biased. Worth reading is Branden Fitelsen and Eliot Sober’s very detailed analysis of Plantinga’s Evolutionary Argument Against Naturalism (EAAN), here. Most interesting are the beginning paragraphs of Section 3, which I reproduce here because it is a critical addition that should surprise no one but often does:

Although Plantinga’s arguments don’t work, he has raised a question that needs to be answered by people who believe evolutionary theory and who also believe that this theory says that our cognitive abilities are in various ways imperfect. Evolutionary theory does say that a device that is reliable in the environment in which it evolved may be highly unreliable when used in a novel environment. It is perfectly possible that our mental machinery should work well on simple perceptual tasks, but be much less reliable when applied to theoretical matters. We hasten to add that this is possible, not inevitable. It may be that the cognitive procedures that work well in one domain also work well in another; Modus Ponens may be useful for avoiding tigers and for doing quantum physics.

Anyhow, if evolutionary theory does say that our ability to theorize about the world is apt to be rather unreliable, how are evolutionists to apply this point to their own theoretical beliefs, including their belief in evolution?

… Read the rest

Substitutions, Permutations, and Economic Uncertainty

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500px-SHA-2.svgWhen Robert Schiller was awarded the near-Nobel for economics there was also a tacit blessing that the limits of economics as a science were being recognized. You see, Schiller’s most important contributions included debunking the essentials of market behavior and replacing it with the irrationals of behavioral psychology.

Schiller’s pairing with Eugene Fama in the Nobel award is ironic in that Fama is the father of the efficient market hypothesis that suggests that rational behavior should overcome those irrational tendencies to reach a cybernetic homeostasis…if only the system were free of regulatory entanglements that drag on the clarity of the mass signals. And all these bubbles that grow and burst would be smoothed out of the economy.

But technological innovation can sometimes trump old school musings and analysis: BitCoin represents a bubble in value under the efficient market hypothesis because the currency value has no underlying factual basis. As the economist John Quinnen points out in The National Interest:

But in the case of Bitcoin, there is no source of value whatsoever. The computing power used to mine the Bitcoin is gone once the run has finished and cannot be reused for a more productive purpose. If Bitcoins cease to be accepted in payment for goods and services, their value will be precisely zero.

In fact, that specific computing power consists of just two basic functions: substitution and permutation. So some long string of transactions have all their bits substituted with other bits, then blocks of those bits are rotated and generally permuted until we end up with a bit signature that is of fixed length but that is statistically uncorrelated with the original content. And there is no other value to those specific (and hard to do) computations.… Read the rest

Towards an Epistemology of Uncertainty (the “I Don’t Know” club)

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space-timeToday there was an acute overlay of reinforcing ideas when I encountered Sylvia McLain’s piece in Occam’s Corner on The Guardian drawing out Niall Ferguson for deriving Keynesianism from Keynes’ gayness. And just when I was digesting Lee Smolin’s new book, Time Reborn: From the Crisis in Physics to the Future of the Universe.

The intersection was a tutorial in the limits of expansive scientism and in the conclusions that led to unexpected outcomes. We get to euthanasia and forced sterilization down that path–or just a perception of senility when it comes to Ferguson. The fix to this kind of programme is fairly simple: doubt. I doubt that there is any coherent model that connects sexual orientation to economic theory. I doubt that selective breeding and euthanasia can do anything more than lead to inbreeding depression. Or, for Smolin, I doubt that the scientific conclusions that we have reached so far are the end of the road.

That wasn’t too hard, was it?

The I Don’t Know club is pretty easy to join. All one needs is intellectual honesty and earnesty.… Read the rest

Methodical Play

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imageMy fourteen-year-old interviewed a physicist yesterday. I had the privilege of being home over the weekend and listened in; my travel schedule has lately been brutal, with the only saving grace being moments like right now en route to Chicago when I can collapse into reading and writing for a few whitenoise-washed moments. And the physicist who was once his grandfather said some remarkable things:

  • Physics consists of empirical layers of untruth
  • The scientific method is never used as formulated
  • Schools, while valuable, won’t teach how to be a scientist
  • The institutions of physics don’t support the creativity required to be a scientist

Yet there was no sense of anger or disillusionment in these statements, just a framing of the distinctions between the modern social model surrounding what scientists do and the complex reality of how they really do their work.

The positives were that play is both the essential ingredient and the missing determinant of the real “scientific method.” Mess around, try to explain, mess around some more. And what is all that play getting this remarkable octogenarian? Possible insights into the unification of electromagnetism and the strong nuclear force. The interview journey passed from alignment of quarks to the beams of neutron stars, igniting the imaginations of all the minds on the call.

But if there is no real large-scale method to this madness, what might we conclude about the rationality of the process of science? I would advocate that the algorithmic model of inference is perhaps the best (and least biased) way of approaching the issue of scientific method. By constantly reshuffling the available parameters and testing the compressibility of models, play is indistinguishable from science when the play pivots on best explanation.… Read the rest

Chinese Feudal Wasps

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waspsIn Fukuyama’s The Origins of Political Order, the author points out that Chinese feudalism was not at all like European feudalism. In the latter, vassals were often unrelated to lords and the relationship between them was consensual and renewed annually. Only later did patriarchal lineages become important in preserving the line of descent among the lords. But that was not the case in China where extensive networks of blood relations dominated the lord-vassal relationship; the feudalism was more like tribalism and clans than the European model, but with Confucianism layered on top.

So when E.O. Wilson, still intellectually agile in his twilight years, describes the divide between kin selection and multi-level selection in the New York Times, we start to see a similar pattern of explanation for both models at far more basic level than just in the happenstances of Chinese versus European cultures. Kin selection predicts that genetic co-representation can lead an individual to self-sacrifice in an evolutionary sense (from loss of breeding possibilities in Hymenoptera like bees and ants, through to sacrificial behavior like standing watch against predators and thus becoming a target, too). This is the traditional explanation and the one that fits well for the Chinese model. But we also have the multi-level selection model that posits that selection operates at the group level, too. In kin selection there is no good explanation for the European feudal tradition unless the vassals are inbred with their lords, which seems unlikely in such a large, diverse cohort. Consolidating power among the lords and intermarrying practices possibly did result in inbreeding depression later on, but the overall model was one based on social ties that were not based on genetic familiarity.… Read the rest

Keep Suspicious and Carry On

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I’ve previously argued that it is unlikely that resource-constrained simulations can achieve adequate levels of fidelity to be sufficient for what we observe around us. This argument was a combination of computational irreducibility and assumptions about the complexity of evolutionary trajectories of living beings. There may also be an argument about the observed contingency of the evolutionary process that is an argument against any kind of “intelligent” organizing principle though not against simulation itself.

Leave it to physicists to envision a test of the Bostrom hypothesis that we are living in a computer simulation. Martin Savage and his colleagues look at Quantum Chromodynamic (QCD) theory and current simulation methods for QCD. They conclude that if we are, in fact, living in a simulation, then we might observe specific inconsistencies that arise from finite computing power for the universe as a whole. Those inconsistencies would be observed in looking at the distribution of cosmic ray energies, specifically. Note that if the distribution is not unusual the universe could either be a simulation (just a sophisticated one) or could be a truly physical one (free running and not on another entity’s computational framework). It is only if the distribution is unusual that it might be a simulation.… Read the rest

Bats and Belfries

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Thomas Nagel proposes a radical form of skepticism in his new book, Minds and Cosmos, continuing his trajectory through subjective experience and moral realism first began with bats zigging and zagging among the homunculi of dualism reimagined in the form of qualia. The skepticism involves disputing materialistic explanations and proposing, instead, that teleological ones of an unspecified form will likely apply, for how else could his subtitle that paints the “Neo-Darwinian Concept of Nature” as likely false hold true?

Nagel is searching for a non-religious explanation, of course, because just enervating nature through fiat is hardly an explanation at all; any sort of powerful, non-human entelechy could be gaming us and the universe in a non-coherent fashion. But what parameters might support his argument? Since he apparently requires a “significant likelihood” argument to hold sway in support of the origins of life, for instance, we might imagine what kind of thinking could result in highly likely outcomes that begin with inanimate matter and lead to goal-directed behavior while supporting a significant likelihood of that outcome. The parameters might involve the conscious coordination of the events leading towards the emergence of goal-directed life, thus presupposing a consciousness that is not our own. We are back then to our non-human entelechy looming like an alien or like a strange creator deity (which is not desirable to Nagel). We might also consider the possibility that there are properties to the universe itself that result in self-organization and that either we don’t yet know or that we are only beginning to understand. Elliot Sober’s critique suggests that the 2nd Law of Thermodynamics results in what I might call “patterned” behavior while not becoming “goal-directed” per se.… Read the rest

Science, Pre-science, and Religion

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Francis Fukuyama in The Origins of Political Order: From Prehuman Times to the French Revolution draws a bright line from reciprocal altruism to abstract reasoning, and then through to religious belief:

Game theory…suggests that individuals who interact with one another repeatedly tend to gravitate toward cooperation with those who have shown themselves to be honest and reliable, and shun those who have behaved opportunistically. But to do this effectively, they have to be able to remember each other’s past behavior and to anticipate likely future behavior based on an interpretation of other people’s motives.

Then, language allows transmission of historical patterns (largely gossip in tight-knit social groups) and abstractions about ethical behaviors until, ultimately:

The ability to create mental models and to attribute causality to invisible abstractions is in turn the basis for the emergence of religion.

But this can’t be the end of the line. Insofar as abstract beliefs can attribute repetitive weather patterns to Olympian gods, or consolidate moral reasoning to a monotheistic being, the same mechanisms of abstraction must be the basis for scientific reasoning as well. Either that or the cognitive capacities for linguistic abstraction and game theory are not cross-applicable to scientific thinking, which seems unlikely.

So the irony of assertions that science is just another religion is that they certainly share a similar initial cognitive evolution, while nevertheless diverging in their dependence on faith and supernatural expectations, on the one hand, and channeling the predictive models along empirical contours on the other.… Read the rest

The Universe is Smeary Stuff

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What should our expectations be regarding scientific theories? That question regularly bobs to the surface for me. When I taught physics in the Peace Corps over twenty years ago I worried over it. And now, with an inquisitive thirteen-year-old curious about the recent results from the pursuit of the Higgs Boson asking me questions, I continue to think that the conceptual shifts requisite for scientific understanding are perhaps as important as the science itself.

You see, none of it makes simple, clean sense. And none of it makes sense precisely because there is no conceptual similarity between our everyday scales of interaction and those of the mega and the micro. They are baffling and complex and not fully understood. We should take great pride in this, as human beings. We should revel in the rise of experimentation and rationality that has led us to this baffling precipice. We should not back away into the gray simplicity that predates what our scientific investigations have brought us to, because they make enough sense that they can be understood with some effort. But the urge is there; relent at the scale, scope, and complexity of the edifice that is required to get even basic traction. It either doesn’t impact me or is inhuman at some level.

But it needn’t be. The Higgs Boson is simply badly explained because it it based on preserving explanatory footholds that relate to everyday physics of cars and bowling balls. Drop that assumption and things get both weirder and simultaneously simpler. The universe appears to be composed of stuff that has a holographic quality to it in the sense that holograms replicate images throughout their structure. Break a piece off of a hologram and you can still see the image in it.… Read the rest