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Sunday, October 30, 2011

Festival della Scienza Genova and Italy: final thoughts

Here are the "official" video links from the Festival della Scienza in Genova: my public lecture , interview.

I had a wonderful time in Genova. My visit wasn't very long, because I had to come back to teach.

On the trip I spoke to quite a few young Italians (young here is probably, err, 35 and below), who all expressed pessimism about the future of the country and the economy. On the other hand, at the fancy dinners with Genovese families, I met a number of wealthy business types who reassured me that Italy would be fine and would have no trouble servicing its debt.

On Friday equity markets rallied in relief after the announcement of the latest plan to deal with the Euro debt crisis. However, ominously, bond investors demanded higher rates for Italian 10 year debt.

WSJ: ... Those sorts of concerns played out in Italy's €7.935 billion debt sale on Friday. On each of the four bond issues it sold, Italy was forced to pay higher yields than in the recent past. Most significantly, 10-year debt—a market benchmark—was sold at a yield 6.06%, up from 5.86% only a month ago.

"With a 120% debt-to-GDP ratio and 10-year Italian bonds yielding roughly 6%, they can't do that forever or the borrowing costs will get to an unsustainable level," said Eric Stein, portfolio manager at the Eaton Vance Global Macro Absolute Return Fund. "As your rates go up, it means you're paying more and more to service your debt, and your whole debt dynamics become harder and harder and harder.

As often noted by professionals, equity markets are driven by emotion, whereas bond markets are driven by quantitative analysis.

Steve Jobs, intuition, and genius

Walter Isaacson, biographer of both Einstein and Steve Jobs, on smarts, intuition and innovation.

NYTimes: ONE of the questions I wrestled with when writing about Steve Jobs was how smart he was. On the surface, this should not have been much of an issue. You’d assume the obvious answer was: he was really, really smart. Maybe even worth three or four reallys. After all, he was the most innovative and successful business leader of our era and embodied the Silicon Valley dream writ large: he created a start-up in his parents’ garage and built it into the world’s most valuable company.

But I remember having dinner with him a few months ago around his kitchen table, as he did almost every evening with his wife and kids. Someone brought up one of those brainteasers involving a monkey’s having to carry a load of bananas across a desert, with a set of restrictions about how far and how many he could carry at one time, and you were supposed to figure out how long it would take. Mr. Jobs tossed out a few intuitive guesses but showed no interest in grappling with the problem rigorously. I thought about how Bill Gates would have gone click-click-click and logically nailed the answer in 15 seconds, and also how Mr. Gates devoured science books as a vacation pleasure. But then something else occurred to me: Mr. Gates never made the iPod. Instead, he made the Zune.

So was Mr. Jobs smart? Not conventionally. Instead, he was a genius. That may seem like a silly word game, but in fact his success dramatizes an interesting distinction between intelligence and genius. His imaginative leaps were instinctive, unexpected, and at times magical. They were sparked by intuition, not analytic rigor. Trained in Zen Buddhism, Mr. Jobs came to value experiential wisdom over empirical analysis. He didn’t study data or crunch numbers but like a pathfinder, he could sniff the winds and sense what lay ahead.

He told me he began to appreciate the power of intuition, in contrast to what he called “Western rational thought,” when he wandered around India after dropping out of college. “The people in the Indian countryside don’t use their intellect like we do,” he said. “They use their intuition instead ... Intuition is a very powerful thing, more powerful than intellect, in my opinion. That’s had a big impact on my work.”

Mr. Jobs’s intuition was based not on conventional learning but on experiential wisdom. He also had a lot of imagination and knew how to apply it. As Einstein said, “Imagination is more important than knowledge.”

Einstein is, of course, the true exemplar of genius. He had contemporaries who could probably match him in pure intellectual firepower when it came to mathematical and analytic processing. Henri Poincaré, for example, first came up with some of the components of special relativity, and David Hilbert was able to grind out equations for general relativity around the same time Einstein did. But neither had the imaginative genius to make the full creative leap at the core of their theories, namely that there is no such thing as absolute time and that gravity is a warping of the fabric of space-time. (O.K., it’s not that simple, but that’s why he was Einstein and we’re not.)

... Both Einstein and Mr. Jobs were very visual thinkers. The road to relativity began when the teenage Einstein kept trying to picture what it would be like to ride alongside a light beam. Mr. Jobs spent time almost every afternoon walking around the studio of his brilliant design chief Jony Ive and fingering foam models of the products they were developing.

Mr. Jobs’s genius wasn’t, as even his fanboys admit, in the same quantum orbit as Einstein’s. So it’s probably best to ratchet the rhetoric down a notch and call it ingenuity. Bill Gates is super-smart, but Steve Jobs was super-ingenious. The primary distinction, I think, is the ability to apply creativity and aesthetic sensibilities to a challenge.

In the world of invention and innovation, that means combining an appreciation of the humanities with an understanding of science — connecting artistry to technology, poetry to processors. This was Mr. Jobs’s specialty. “I always thought of myself as a humanities person as a kid, but I liked electronics,” he said. “Then I read something that one of my heroes, Edwin Land of Polaroid, said about the importance of people who could stand at the intersection of humanities and sciences, and I decided that’s what I wanted to do.”

The ability to merge creativity with technology depends on one’s ability to be emotionally attuned to others. Mr. Jobs could be petulant and unkind in dealing with other people, which caused some to think he lacked basic emotional awareness. In fact, it was the opposite. He could size people up, understand their inner thoughts, cajole them, intimidate them, target their deepest vulnerabilities, and delight them at will. He knew, intuitively, how to create products that pleased, interfaces that were friendly, and marketing messages that were enticing.

... China and India are likely to produce many rigorous analytical thinkers and knowledgeable technologists. But smart and educated people don’t always spawn innovation. America’s advantage, if it continues to have one, will be that it can produce people who are also more creative and imaginative, those who know how to stand at the intersection of the humanities and the sciences. That is the formula for true innovation, as Steve Jobs’s career showed.

Friday, October 28, 2011

The top 1 percent by profession

Notice anything funny about the trends? Source: tax data (complete tables at the link; what I display below is truncated). Click for larger versions.



Here is the share of national income by profession.




More interesting would be the top .1 percent, because secular growth in financier representation would be even more apparent.


Here are two more just for fun.










Monday, October 24, 2011

The illusion of skill

Daniel Kahneman claims that differences in the performance of professional investors are mostly due to luck, whereas compensation is awarded as if differences are due to skill. Most alpha is fake alpha.

This of course raises all sorts of questions about why such people are allowed to become so extravagantly wealthy. The usual argument is that their investment decisions lead to more efficient resource allocation in the economy. (They are a "necessary evil" of a capitalist market system that benefits all of us :-) But if the decisions of the highest paid professionals are no better than those of average professionals, we could replace the services of the highest earners at much lower cost (or cap their salaries or impose high marginal tax rates) without negatively impacting the overall quality of decisions or the efficiency of the economy.








The article is worth reading in its entirety.

NYTimes: ... No one in the firm seemed to be aware of the nature of the game that its stock pickers were playing. The advisers themselves felt they were competent professionals performing a task that was difficult but not impossible, and their superiors agreed. On the evening before the seminar, Richard Thaler and I had dinner with some of the top executives of the firm, the people who decide on the size of bonuses. We asked them to guess the year-to-year correlation in the rankings of individual advisers. They thought they knew what was coming and smiled as they said, “not very high” or “performance certainly fluctuates.” It quickly became clear, however, that no one expected the average correlation to be zero.

What we told the directors of the firm was that, at least when it came to building portfolios, the firm was rewarding luck as if it were skill. This should have been shocking news to them, but it was not. There was no sign that they disbelieved us. How could they? After all, we had analyzed their own results, and they were certainly sophisticated enough to appreciate their implications, which we politely refrained from spelling out. We all went on calmly with our dinner, and I am quite sure that both our findings and their implications were quickly swept under the rug and that life in the firm went on just as before. The illusion of skill is not only an individual aberration; it is deeply ingrained in the culture of the industry. Facts that challenge such basic assumptions — and thereby threaten people’s livelihood and self-esteem — are simply not absorbed. The mind does not digest them. This is particularly true of statistical studies of performance, which provide general facts that people will ignore if they conflict with their personal experience.

The next morning, we reported the findings to the advisers, and their response was equally bland. Their personal experience of exercising careful professional judgment on complex problems was far more compelling to them than an obscure statistical result. When we were done, one executive I dined with the previous evening drove me to the airport. He told me, with a trace of defensiveness, “I have done very well for the firm, and no one can take that away from me.” I smiled and said nothing. But I thought, privately: Well, I took it away from you this morning. If your success was due mostly to chance, how much credit are you entitled to take for it?

From the comments.

If you read the whole article, you see that Kahneman does believe in skill. For example, his studies show that some doctors are better at diagnosis than others. I am also sure that some entrepreneurs or some physicists or some athletes are better than others. (Although in the case of entrepreneurs it would be very hard to demonstrate statistically since outcomes are noisy and the number of attempts per entrepreneur is relatively small.)

But there may be areas where *the differences between high level professionals* (e.g., people who have been hired to run money, have top MBAs or graduate degrees, etc.) are statistically seen to be mostly due to luck. This has already been convincingly demonstrated for pundits or analysts of complex world events by Tetlock's studies of expertise. (You can find several posts on this blog on the topic.) Whether it's true of money managers (or even big company CEOs) is controversial. If you argue the skill side, I'd like to see *your* statistical evidence, not just repetition of your priors (again and again).

Expert predictions

In all areas of human activity, even the skill dominated ones, luck plays a big factor. This is a good argument for redistribution -- almost every successful person owes some of their success to luck.

and

It seems to me that the 20th century trend in democracies is toward greater redistribution: social safety nets, guaranteed minimum income, etc. People have been conditioned to believe these are aspects of a just society.

The question is: what is the optimum level of redistribution? (Given a particular utility function for society.)

One argument is that we have to let the rich get rich in order to have strong economic growth. Too much redistribution means a smaller pie to split. But the Illusion of Skill argument (if correct) suggests that for some activities like finance a high marginal tax rate (say, which kicks in above the income of the *average* finance professional; this would then only affect the top earning financiers who, according to the argument are not adding any real value that the average guys can't also provide) would not negatively affect economic efficiency.

If people irrationally and incorrectly believe that only Harvard MDs are capable of treating pneumonia, and bid up their compensation to exorbitant levels (levels so high that the Harvard MDs begin exerting financial and political control over society as a whole), wouldn't it be better for society to impose a high tax rate on Harvard MDs, which kicks in above the income of other doctors with similar credentials (but who are not beneficiaries of the irrational belief)?

Sunday, October 23, 2011

Festival della Scienza Genova: videos and photos

Video of my public lecture and an interview, both available in English or Italian translation. The slides for my talk are here.

Some more photos below.

An interview with Rai (Italian version of BBC). Matt Ridley (author and science writer) was also interviewed (the woman sitting between us is the translator).





More views of Genova.


Foto di Genova 2

The lecture hall. See here for video and a short interview. (Not up at the moment but should appear later today.)






Translator booth. Most people listened via headset.




The interview studio.






Plaza outside the Palazzo Ducale.




At the pier.




View from the hills. Each night the speakers have been invited to dinners hosted by local Genovese families "of repute" :-) Last night's dinner was one of the best meals I can remember!

Saturday, October 22, 2011

Foto di Genova

Views from my hotel in central Genova:






Cattedrale di San Lorenzo and Via San Lorenzo:






Palazzo Ducale, where I will give my lecture later today:







Friday, October 21, 2011

IQ malleability

This paper got a lot of attention in the press. I don't have time to discuss it in detail, but it is worth emphasizing that the correlation between scores on WISC and WAIS for the n=33 subjects was around .8 -- typical for two different IQ tests administered years apart. (Note, the same test -- e.g., the SAT -- administered twice with a gap of 1 year might have correlation of .9 or even .95.) In other words, knowing an individual's WISC score gives you good power to predict their eventual WAIS score, but with a big chunk of variance (say, 30-40% of total variance) still unaccounted for. In light of this, a 1 SD shift in score is to be expected for a reasonable fraction of participants, as found in the study. What is a bit more novel is that they correlated the score shifts to actual MRI observations of the brain.

(One might also interpret this as saying that the residual uncertainty in "true g score" is a good chunk of an SD even after an individual is carefully tested using WAIS or WISC; personally I don't think "g" is much better defined than at this level of accuracy.)

I am very jet-lagged right now, so I hope what I wrote makes sense :-)

Verbal and non-verbal intelligence changes in the teenage brain (Nature):

... Our participants were 33 healthy and neurologically normal adolescents with a deliberately wide and heterogeneous mix of abilities (see Supplementary Information for details and the implications of our sampling for the generalizability of our conclusions). They were first tested in 2004 (‘time 1’) when they were 12–16 yr old (mean, 14.1 yr). Testing was repeated in 2007/2008 (‘time 2’) when the same indivi- duals were 15–20 yr old (mean, 17.7 yr). See Table 1 for further details of the participants. During the intervening years, there were no testing sessions, and participants and their parents had no knowledge that they would be invited back for further testing. On both test occasions, each participant had a structural brain scan using magnetic resonance imaging (MRI) and had their IQ measured using the Wechsler Intelligence Scale for Children (WISC-III) at time 1 and the Wechsler Adult Intelligence Scale (WAIS-III) at time 2 (see Supplementary Information for details). These two widely used, age-appropriate assess- ments5 produce strongly correlated results at a given time point, con- sistent with them measuring highly similar constructs6. Scores on individual subtests are standardized against age-specific norms and then grouped to produce separate measures of verbal IQ (VIQ) and performance IQ (PIQ), with VIQ encompassing those tests most related to verbal skills and PIQ being more independent of verbal skills. Nevertheless, VIQ and PIQ scores are very significantly correlated with each other across participants: in our sample, the correlations between VIQ and PIQ were r50.51 at time 1 and r50.55 at time 2 (in both cases, n 5 33; P , 0.01). Full-scale IQ (FSIQ) is the composite of VIQ and PIQ and is regarded as the best measure of general intellectual capacity (the g factor) that has previously been shown to correlate with brain size and cortical thickness in a wide variety of frontal, parietal and temporal brain regions7,8.

The wide range of abilities in our sample was confirmed as follows: FSIQ ranged from 77 to 135 at time 1 and from 87 to 143 at time 2, with averages of 112 and 113 at times 1 and 2, respectively, and a tight correlation across testing points (r 5 0.79; P , 0.001). Our interest was in the considerable variation observed between testing points at the individual level, which ranged from 220 to 123 for VIQ, 218 to 117 for PIQ and 218 to 121 for FSIQ. Even if the extreme values of the published 90% confidence intervals are used on both occasions, 39% of the sample showed a clear change in VIQ, 21% in PIQ and 33% in FSIQ. In terms of the overall distribution, 21% of our sample showed a shift of at least one population standard deviation (15) in the VIQ measure, and 18% in the PIQ measure. However, only one participant had a shift of this magnitude in both measures, and, for that particip- ant, one measure showed an increase and the other a decrease. This pattern is reflected in the absence of a significant correlation between the change in VIQ and the change in PIQ. The independence of changes in these two measures allows us to investigate the effect of each without confounding influences from the other.

... Using regression analysis, we studied the brain changes associated with a change in VIQ, PIQ or FSIQ (see Methods Summary for details). The results (Fig. 1) showed that changes in VIQ were positively corre- lated with changes in grey matter density (and volume) in a region of the left motor cortex that is activated by the articulation of speech10. Conversely, changes in PIQ were positively correlated with grey matter density in the anterior cerebellum (lobule IV), which is associated with motor movements of the hand

Tall and good looking

There's an interesting discussion of height and selection at Razib's blog Gene Expression. I can think of lots of plausible tradeoffs related to greater height -- increased calorie requirements, perhaps not so adaptive for females, effects on metabolism or other body systems, etc. But what about facial attractiveness or symmetry? Every so often I see a really good looking face and the effect is very striking. Surely there are lots of benefits from this, but are there any plausible genetic costs? I would guess that evolution can tweak facial bone structure without affecting the brain or other bodily systems... If so, why aren't we all much better looking? :-)

See earlier post female faces.



[Posted from CDG in Paris; see you in Genova soon!]

Wednesday, October 19, 2011

Ideograms, alphabets and civilizations

As someone who never mastered them, I've always felt oppressed by Chinese characters. Perhaps my kids will succeed where I failed :-)

Bertrand Russell reflects on ideograms, alphabets and civilizations in The Problem of China. (Note, technically Chinese is neither wholly ideographic or logographic.)

As everyone knows, the Chinese do not have letters, as we do, but symbols for whole words. This has, of course, many inconveniences: it means that, in learning to write, there are an immense number of different signs to be learnt, not only 26 as with us; that there is no such thing as alphabetical order, so that dictionaries, files, catalogues, etc., are difficult to arrange and linotype is impossible; that foreign words, such as proper names and scientific terms, cannot be written down by sound, as in European languages, but have to be represented by some elaborate device.[15] For these reasons, there is a movement for phonetic writing among the more advanced Chinese reformers; and I think the success of this movement is essential if China is to take her place among the bustling hustling nations which consider that they have a monopoly of all excellence. Even if there were no other argument for the change, the difficulty of elementary education, where reading and writing take so long to learn, would be alone sufficient to decide any believer in democracy. For practical purposes, therefore, the movement for phonetic writing deserves support. [Somehow, modern Chinese have achieved nearly 100% literacy despite the difficulty of the writing system.]

There are, however, many considerations, less obvious to a European, which can be adduced in favour of the ideographic system, to which something of the solid stability of the Chinese civilization is probably traceable. To us, it seems obvious that a written word must represent a sound, whereas to the Chinese it represents an idea. We have adopted the Chinese system ourselves as regards numerals; "1922," for example, can be read in English, French, or any other language, with quite different sounds, but with the same meaning. Similarly what is written in Chinese characters can be read throughout China, in spite of the difference of dialects which are mutually unintelligible when spoken. Even a Japanese, without knowing a word of spoken Chinese, can read out Chinese script in Japanese, just as he could read a row of numerals written by an Englishman. And the Chinese can still read their classics, although the spoken language must have changed as much as French has changed from Latin.

The advantage of writing over speech is its greater permanence, which enables it to be a means of communication between different places and different times. But since the spoken language changes from place to place and from time to time, the characteristic advantage of writing is more fully attained by a script which does not aim at representing spoken sounds than by one which does. [Italics mine.]

Speaking historically, there is nothing peculiar in the Chinese method of writing, which represents a stage through which all writing probably passed. Writing everywhere seems to have begun as pictures, not as a symbolic representation of sounds. I understand that in Egyptian hieroglyphics the course of development from ideograms to phonetic writing can be studied. What is peculiar in China is the preservation of the ideographic system throughout thousands of years of advanced civilization—a preservation probably due, at least in part, to the fact that the spoken language is monosyllabic, uninflected and full of homonyms.

As to the way in which the Chinese system of writing has affected the mentality of those who employ it, I find some suggestive reflections in an article published in the Chinese Students' Monthly (Baltimore), for February 1922, by Mr. Chi Li, in an article on "Some Anthropological Problems of China." He says (p. 327):—

Language has been traditionally treated by European scientists as a collection of sounds instead of an expression of something inner and deeper than the vocal apparatus as it should be. The accumulative effect of language-symbols upon one's mental formulation is still an unexploited field. Dividing the world culture of the living races on this basis, one perceives a fundamental difference of its types between the alphabetical users and the hieroglyphic users, each of which has its own virtues and vices. Now, with all respects to alphabetical civilization, it must be frankly stated that it has a grave and inherent defect in its lack of solidity. The most civilized portion under the alphabetical culture is also inhabited by the most fickled people. The history of the Western land repeats the same story over and over again. Thus up and down with the Greeks; up and down with Rome; up and down with the Arabs. The ancient Semitic and Hametic peoples are essentially alphabetic users, and their civilizations show the same lack of solidity as the Greeks and the Romans. Certainly this phenomenon can be partially explained by the extra-fluidity of the alphabetical language which cannot be depended upon as a suitable organ to conserve any solid idea. Intellectual contents of these people may be likened to waterfalls and cataracts, rather than seas and oceans. No other people is richer in ideas than they; but no people would give up their valuable ideas as quickly as they do....

The Chinese language is by all means the counterpart of the alphabetic stock. It lacks most of the virtues that are found in the alphabetic language; but as an embodiment of simple and final truth, it is invulnerable to storm and stress. It has already protected the Chinese civilization for more than forty centuries. It is solid, square, and beautiful, exactly as the spirit of it represents. Whether it is the spirit that has produced this language or whether this language has in turn accentuated the spirit remains to be determined.

Without committing ourselves wholly to the theory here set forth, which is impregnated with Chinese patriotism, we must nevertheless admit that the Westerner is unaccustomed to the idea of "alphabetical civilization" as merely one kind, to which he happens to belong. I am not competent to judge as to the importance of the ideographic script in producing the distinctive characteristics of Chinese civilization, but I have no doubt that this importance is very great, and is more or less of the kind indicated in the above quotation.


Monday, October 17, 2011

Is the Left right?

When I see someone overcoming their long-held prior beliefs, I pay attention. Someone who sided with Reagan and Thatcher in the 1980s doesn't have to be a supporter of financiers in 2011.

Note to rabid conservative attack dogs: criticism of the present over-concentration of economic and political power is not equivalent to the rejection of a (well-functioning) free market system.

I'm starting to think that the Left might actually be right

It has taken me more than 30 years as a journalist to ask myself this question, but this week I find that I must: is the Left right after all? You see, one of the great arguments of the Left is that what the Right calls “the free market” is actually a set-up.

The rich run a global system that allows them to accumulate capital and pay the lowest possible price for labour. The freedom that results applies only to them. The many simply have to work harder, in conditions that grow ever more insecure, to enrich the few. Democratic politics, which purports to enrich the many, is actually in the pocket of those bankers, media barons and other moguls who run and own everything.

In the 1970s and 1980s, it was easy to refute this line of reasoning because it was obvious, particularly in Britain, that it was the trade unions that were holding people back. Bad jobs were protected and good ones could not be created. “Industrial action” did not mean producing goods and services that people wanted to buy, it meant going on strike. ...

A key symptom of popular disillusionment with the Left was the moment, in the late 1970s, when the circulation of Rupert Murdoch’s Thatcher-supporting Sun overtook that of the ever-Labour Daily Mirror. Working people wanted to throw off the chains that Karl Marx had claimed were shackling them – and join the bourgeoisie which he hated. Their analysis of their situation was essentially correct. The increasing prosperity and freedom of the ensuing 20 years proved them right.

... It turns out – as the Left always claims – that a system purporting to advance the many has been perverted in order to enrich the few. The global banking system is an adventure playground for the participants, complete with spongy, health-and-safety approved flooring so that they bounce when they fall off. The role of the rest of us is simply to pay.

This column’s mantra about the credit crunch is that Everything Is Different Now. One thing that is different is that people in general have lost faith in the free-market, Western, democratic order. They have not yet, thank God, transferred their faith, as they did in the 1930s, to totalitarianism. They merely feel gloomy and suspicious. But they ask the simple question, “What's in it for me?”, and they do not hear a good answer.

... The greatest capitalist country in history is now dependent on other people’s capital to survive. In such circumstances, Western democracy starts to feel like a threatened luxury. We can wave banners about “life, liberty and the pursuit of happiness”, but they tend to say, in smaller print, “Made in China”.

As for the plight of the eurozone, this could have been designed by a Left-wing propagandist as a satire of how money-power works. A single currency is created. A single bank controls it. No democratic institution with any authority watches over it, and when the zone’s borrowings run into trouble, elected governments must submit to almost any indignity rather than let bankers get hurt. What about the workers? They must lose their jobs in Porto and Piraeus and Punchestown and Poggibonsi so that bankers in Frankfurt and bureaucrats in Brussels may sleep easily in their beds.

When we look at the Arab Spring, we tend complacently to tell ourselves that the people on the streets all want the freedom we have got. Well, our situation is certainly better than theirs. But I doubt if Western leadership looks to a protester in Tahrir Square as it did to someone knocking down the Berlin Wall in 1989. We are bust – both actually and morally. ...

To the Barricades!

New Yorker economics correspondent John Cassidy blogs:

TOP TEN UNLIKELY OCCUPY WALL STREET SUPPORTERS

(click through for links to the source of each quote)

10) Henry Blodget: Disgraced Wall Street analyst turned online media mogul empathizes with the mob. Provides handy charts to back up case.

9) Suze Orman: Schoolmarmish personal-finance maven says banks deserve to be criticized. Grades OWS as “approved.”

8) Deepak Chopra: New Age guru leads protesters in a group meditation. Tells them to go to place of “compassion, centered equanimity, and creativity.”

7) Larry Fink: Head of world’s biggest asset-management firm says demonstrators “are not lazy people sitting around looking for something to do.” (Not to be confused with the photographer Larry Fink, who also supports the protests.)

6) Bill Gross: Manager of world’s biggest bond fund says it’s no surprise the 99% is fighting back “after 30 years of being shot at.”

5) Charles Moore: Tory sage and official biographer of Mrs. Thatcher says he is starting to think the left “might actually be right.”

4) Alec Baldwin: Actor and Capital One front man tweets support and advice to protesters. (Not clear if he’s donated the fees from his ads to OWS, though.)

3) Jeffrey Sachs: Columbia economist and former godfather of free-market shock therapy visits Zuccotti Square and tells protesters they are on right track.

2) Vikram Pandit: Citigroup chairman says “trust has been broken” between Wall Street and Main Street. Offers to meet with demonstrators.

1) Ben Bernanke: Republican-appointed Fed chairman says he “can’t blame” protesters for taking to the streets.

Friday, October 14, 2011

Links 10.14.2011

New Yorker: in search of bitcoin creator Satoshi Nakamoto.

BBC In Our Time: the Ming voyages.

Financial Times: "The reputation of economists, never high, has been a casualty of the global crisis ..." See also here.

Steve Weinberg on his work as a JASON

BusinessInsider: 15 charts on US wealth and income inequality (the ugly truth).

NYTimes: "... participants judged women made up in varying intensities of luminance contrast (fancy words for how much eyes and lips stand out compared with skin) as more competent than barefaced women, whether they had a quick glance or a longer inspection."

Wednesday, October 12, 2011

Genova Science Festival



Next week I'll give a "Lectio Magistralis" (not sure exactly what this means, but probably I am not worthy ;-) at the Genova Science Festival.

Below are the title and abstract. Slightly imperfect Google translation.

Unificare le forze e le idee: La sorprendente semplicità della natura

Il mondo che ci circonda è straordinariamente complesso, abbondante, complicato. È affascinante scoprire come la complessità della natura possa essere spiegata in termini semplici. Questo grazie alle leggi fisiche fondamentali che forniscono una descrizione unificata dei fenomeni naturali. Per mezzo della fisica sveliamo così il cuore semplice ed elegante del mondo. Dopo aver discusso dell’unificazione in fisica delle forze fondamentali della natura, si presenta l’idea di "sintesi": algoritmi compatti che riescono a generare i più complessi fenomeni, proprio come la natura semplice riesce a creare la complessità che ci circonda. Nella discussione si aprono nuove prospettive che legano la descrizione della natura semplice a quella delle idee e del pensiero, umano e artificiale. Lo studio di questi algoritmi risulta infatti centrale non solo in fisica, ma anche nell’evoluzione, nella biologia e nelle ultime ricerche in intelligenza artificiale.

The venue for my talk (Palazzo Ducale Sala del Maggior Consiglio) appears to be the most beautiful room I have ever lectured in!



Margin Call



I can't believe they shot this for only $3.5 million. A lot of star power for such a tiny budget. NYTimes review.

Limits

In a Harvard Square cafe with a famous theoretical physicist. Small talk after discussing some research. I am in my mid twenties, my counterpart is an older professor.

What do you think happens to those child prodigies?

Weren't you a child prodigy?

No, the real ones. Kid geniuses who finish college at age 12. There's always one in the paper.

I don't think any eighteen year old in the world understands quantum mechanics as well as I do.

Tuesday, October 11, 2011

Let them eat cake




Does this include secretaries? See Manhattan on $500k a year.

Sunday, October 09, 2011

Nobel Prizes 2011


I was a bit busy last week, with a visitor, posting a paper, etc. so I didn't get to comment on the Nobel prizes.

The dark energy prize is richly deserved (see slides from a colloquium on dark energy I've given a few times; includes above figure). These guys have discovered where most of the energy in the universe is, and may have determined the ultimate fate of the universe on cosmological scales. I note Saul Perlmutter was awarded 1/2 the prize and the other two guys each received 1/4. This may seem like petty credit splitting, but in this case it is appropriate as Perlmutter's group at LBNL have been working on supernova astronomy for a long time trying to get it to work. (Since when I was a grad student!) Perlmutter attributes the original idea to Luis Alvarez, perhaps the greatest experimentalist of the 20th century.

In finding that the universe is on a path to runaway expansion, you had to find type Ia supernovae, which can act as distance markers. How did you get involved with supernova searching?

I was at the University of California at Berkeley for graduate school. One of the heroes here at Berkeley is Luis Alvarez. The tradition that he started is looking for interesting science no matter where it is and then finding tools to do those things. For example, he invented one of the first steady cams.

One of his protégés was my professor, Richard Muller. There was a project to do a superautomated supernova search that Luis Alvarez had suggested to Rich. They had just done one of the first adaptive-optics experiments.

...

To what do you most attribute your scientific success?

I think the biggest thing is, first of all, being willing to learn things, being willing to pick up a new area, but also just being able to work with other people. Most of these jobs are too big for any one person. You end up trying to find a team of people who are as excited as you are and want to push the technique forward. I'm always struck by the fact that the image of the scientist is as a lone person wearing a lab jacket in the lab by themselves for hours, whereas my sense is that maybe the single most important thing for a scientist, aside from being able to think of good questions, is figuring out good people to work with and enjoying the process of inventing ideas together with other people.

You can add one more Nobel prize to the Berkeley lab collection:




I don't have too much to say about the quasicrystal prize, except that there are several curious aspects (this is mostly second hand stuff I picked up from colleagues): 1. the chemists gave a prize for a physics discovery, and seem to have botched the job: 2. they left out the theorist who was instrumental in convincing people that Shechtman's result was for real (Steinhardt had worked out the theory of quasicrystals out already, and even coined the name!) and 3. Shechtman's group at NIST (where he made the discovery) didn't believe the result and his boss kicked him out!

Thursday, October 06, 2011

Hurray for the little guy

I actually spent more time at Harvard than at Caltech, and the former paid me generously to be there while the latter charged me tuition. But I still root for the geeky underdog :-)

My Caltech graduating class was 186 kids. How many schools that size can compete with Harvard, Stanford, Berkeley or Cambridge in anything?

A reasonable university ranking metric should have components that are normalized to size. For example, the number of citations or publications or research dollars per professor (or per student) is more informative than the absolute number. Otherwise schools with 50 or 100 thousand students would have a misleading advantage over smaller schools. But once you try to adjust your metrics to take this into account it is very hard to keep Caltech from coming out as number one. You basically have to cook the books ;-)

TimesHigherEducation: ... In the eight years that Times Higher Education has published a global university ranking, one thing had always seemed unassailable: Harvard University's position as the world's number one. Not any more.

Harvard - the world's best-known university, boasting a brand some sources rate as more valuable than Pepsi, Nike or Sony - has this year been pushed off the top spot.

Most remarkably, the 375-year-old colossus of global higher education has been toppled by a much younger, much smaller upstart from the West Coast of the US. The world's number one for 2011-12 is the California Institute of Technology, better known as Caltech. Why? It is clear that the differences at the pinnacle of the World University Rankings are minuscule. In terms of the overall score for each institution, the gap last year between first-placed Harvard and second-placed Caltech was 0.1 point.

This year, Caltech pips Harvard with marginally better scores for "research - volume, income and reputation", research influence (measured by paper citations) and (most substantially) the income it attracts from industry. Harvard just beats Caltech for the quality of its teaching environment.

Don't take it from me, or some crazy ranking metric, just ask (Economics) Nobel Prize winner Vernon Smith, who attended both institutions:

At Harvard they believe they are the best in the world; at Caltech they know they are the best in the world

... The first thing to which one has to adapt is the fact that no matter how high people might sample in the right tail of the distribution for "intelligence," ... that sample is still normally distributed in performing on the materials in the Caltech curriculum.

Wednesday, October 05, 2011

So long, Steve




“Being the richest man in the cemetery doesn’t matter to me … Going to bed at night saying we’ve done something wonderful… that’s what matters to me.” [The Wall Street Journal, May 25, 1993]

“Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure — these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.” [Stanford commencement speech, June 2005]

“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.” [Stanford commencement speech, June 2005]

Fast evolution in Quebec

These researchers find evidence that genes lowering the age at first reproduction (AFR) became more prevalent over 140 years in a small isolated population for which they had detailed ancestry records. See also this NYTimes article.

I haven't read the paper yet, so can't comment on the result. Environmental confounds might be tricky, but I suppose the result is basically that children of low AFR mothers tend to also have low AFR and that AFR dropped systematically in the population due to greater fitness (effective fertility) of low AFR women over the 140 years.

Those pesky allele frequencies, they are not constant in time ;-)

Evidence for evolution in response to natural selection in a contemporary human population (PNAS)

It is often claimed that modern humans have stopped evolving because cultural and technological advancements have annihilated natural selection. In contrast, recent studies show that selection can be strong in contemporary populations. However, detecting a response to selection is particularly challenging; previous evidence from wild animals has been criticized for both applying anticonservative statistical tests and failing to consider random genetic drift. Here we study life-history variation in an insular preindustrial French-Canadian population and apply a recently proposed conservative approach to testing microevolutionary responses to selection. As reported for other such societies, natural selection favored an earlier age at first reproduction (AFR) among women. AFR was also highly heritable and genetically correlated to fitness, predicting a microevolutionary change toward earlier reproduction. In agreement with this prediction, AFR declined from about 26–22 y over a 140-y period. Crucially, we uncovered a substantial change in the breeding values for this trait, indicating that the change in AFR largely occurred at the genetic level. Moreover, the genetic trend was higher than expected under the effect of random genetic drift alone. Our results show that microevolution can be detectable over relatively few generations in humans and underscore the need for studies of human demography and reproductive ecology to consider the role of evolutionary processes. (Italics mine)

Hollowing out

How the US lost much of its manufacturing capability, step by step. Each business decision along the way may have been rational for the individual company making it, but the cumulative effect has been a hollowing out of US technological capabilities.

Forbes: ... The U.S. has lost or is on the verge of losing its ability to develop and manufacture a slew of high-tech products. Amazon’s Kindle 2 couldn’t be made in the U.S., even if Amazon wanted to:

The flex circuit connectors are made in China because the US supplier base migrated to Asia.

The electrophoretic display is made in Taiwan because the expertise developed from producting flat-panel LCDs migrated to Asia with semiconductor manufacturing.

The highly polished injection-molded case is made in China because the U.S. supplier base eroded as the manufacture of toys, consumer electronics and computers migrated to China.

The wireless card is made in South Korea because that country became a center for making mobile phone components and handsets.

The controller board is made in China because U.S. companies long ago transferred manufacture of printed circuit boards to Asia.

The Lithium polymer battery is made in China because battery development and manufacturing migrated to China along with the development and manufacture of consumer electronics and notebook computers.

An exception is Apple [AAPL], which “has been able to preserve a first-rate design capability in the States so far by remaining deeply involved in the selection of components, in industrial design, in software development, and in the articulation of the concept of its products and how they address users’ needs.” [Sure, but they meet with Taiwanese engineers who are the ones who know what is actually feasible.]

... So the decline of manufacturing in a region sets off a chain reaction. Once manufacturing is outsourced, process-engineering expertise can’t be maintained, since it depends on daily interactions with manufacturing. Without process-engineering capabilities, companies find it increasingly difficult to conduct advanced research on next-generation process technologies. Without the ability to develop such new processes, they find they can no longer develop new products. In the long term, then, an economy that lacks an infrastructure for advanced process engineering and manufacturing will lose its ability to innovate.

... “already lost” to the USA:

“Fabless chips”; compact fluorescent lighting; LCDs for monitors, TVs and handheld devices like mobile phones; electrophoretic displays; lithium ion, lithium polymer and NiMH batteries; advanced rechargeable batteries for hybrid vehicles; crystalline and polycrystalline silicon solar cells, inverters and power semiconductors for solar panels; desktop, notebook and netbook PCs; low-end servers; hard-disk drives; consumer networking gear such as routers, access points, and home set-top boxes; advanced composite used in sporting goods and other consumer gear; advanced ceramics and integrated circuit packaging.

This is from a multi-part series. See further down this page for links to the first 10 articles.

See also this earlier post, on conversations with an in-law who is a senior executive at Foxconn (makers of the iPhone and iPad, among other things).

... My uncle is worried about prospects for the US -- he sees the technology gap between China and the US as almost closed and wonders how America can compete against Chinese workers making much lower wages. He didn't deny that the US is still more innovative, but noted that the gains from this innovation (i.e., jobs and commercial industries) are now captured by those with manufacturing capability. In other words, a key bit of innovation might make a few people (e.g., at a startup) rich, but down the line someone has to actually manufacture and ship products, which creates jobs and wealth at a much larger scale. He is certain that will be done in China. I tried to point out that this is counter to the conventional US mythology (Apple gets the big margins, Foxconn's profit is pennies per iThingy shipped), but he just said "It's a matter of time."

Tuesday, October 04, 2011

On the origin of probability in quantum mechanics

New paper! This is a brief writeup of the talk I gave last year in Benasque, as well as a few other places. Slides are available at the link above.

On the origin of probability in quantum mechanics

http://arxiv.org/abs/1110.0549

I give a brief introduction to many worlds or "no wavefunction collapse" quantum mechanics, suitable for non-specialists. I then discuss the origin of probability in such formulations, distinguishing between objective and subjective notions of probability.

Here's what I say in the conclusion.

Decoherence does not resolve the collapse question, contrary to what many physicists think. Rather, it illuminates the process of measurement and reveals that pure Schrodinger evolution (without collapse) can produce the quantum phenomena we observe. This of course raises the question: do we need collapse? If the conventional interpretation was always ill-defined (again, see Bell for an honest appraisal [1]; Everett referred to it as a "philosophical monstrosity''), why not remove the collapse or von Neumann projection postulates entirely from quantum mechanics?

The origin of probability is the real difficulty within many worlds interpretations. The problem is subtle and experts are divided as to whether it has been resolved satisfactorily. Because the wave function evolves entirely deterministically in many worlds, all probabilities are necessarily subjective and the interpretation does not require true randomness, thereby preserving Einstein's requirement that outcomes have causes.

[1] J.S. Bell's famous article Against Measurement.

Monday, October 03, 2011

Startup-ville, NYC



Nice digs. I think the community aspect and seminars on topics like venture or employment law are really valuable. Probably not as good as Y-Combinator, but what do you expect for NYC? ;-)

Sunday, October 02, 2011

China economic challenges

Highlights of a special FT debate looking at the choices that lie ahead for the world’s second largest economy: video. [Related statistic: Chinese internet users now exceed 500 million, greater than the entire population of the EU.]

Forensic Asia's Gillem Tulloch believes that the Chinese property market is a bubble on a similar magnitude to the crisis in the US as a result of the huge stimulus package after the global financial crisis. He tells the FT why he thinks China could be on the verge of a property-led slump that would have an impact far beyond its own borders: video. [The only question is when this bubble will pop and whether it will be an orderly decline.]

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