Non-linearity

This entry will be the first of a few trying to explain why you should have no more than one emotional argument when trying to make a decision, and that you should spend most of your time figuring out which to pick. This will help you a lot when trying to philosophize over though questions.

I kick this off by the following statement: Humans react to inputs non-linearly. If you believe this you are all set for continuing to the next entry. If not, I'll try to explain why I believe this.

If you are not trained in the field of non-linear processes (which is the case if you for example don't know what a non-linear process is), I'll summarize it in a few lines. When the cause and effect of something (almost anything I guess) doesn't seem to be proportionate, the cause and effect are probably goverened by a non-linear process. Here are some examples:

When you shake a ketchup bottle and for a long time nothing happens; then without any proportion to how much you shake all the ketchup suddenly decides to come out.

When you play on a slot machine and bet the same amount every time. At some time you may win alot of money even though your input was just the same as the time before when you won nothing.

When you fall from 1 meter you land on you feet, from 3 meters you may fall and scratch yourself. From 5 meters you may sprain your foot but from 7 meters you could actually die.

This morning I was late for work and waited for hot water in the bathroom. I turned the heat up and suddely realized the water was so hot that it hurt. If you think about it like this it makes more sense.
Holding your hand in 20 degree water is tolerable
So is doing it at 40 degrees
I sort of hurts at 60 degrees
It is completley untolerable at 80 degrees.
So for some reason the difference is way bigger between 60-80 than from 40-60. We of course know this. I suspect that the reason for this is that the skin receptors start to send impulses to the brain that this hurts at maybe 40 degrees. The brain interprets these impulses non-linearly and will we will experience non-linear pain. I am no neuro scientist so I may be wrong on the mechanisms, it can also be that the receptors send out signals non-linearly based on heat input, but right now we only care that we do experience it this way.

Non-linear processes are difficult to predict. This is because the input has to be determined very well in order to get an accurate estimation of the output. This is partly why weather is so difficult to predict.

When you have to make a decision based on emotions in any way (this is almost allways the case, few decisions are not related to emotions), you will MAKE the desicion based on one argument, but when you think about it you BELIEVE that you make the desision based on careful consideration based on many arguments. This may require some explanation.

When inputs are non-linearly connected to output, like the case when our senses create input for the brain to produce emotions, even similar (but not identical) input from senses will affect our emotions very differently (remember the oven and how seemingly similar temperatures affected our brain very differently). This has two implications:
(1): When our brain has created the emotion based on the input from our senses, it is very difficult to use the output (emotion) to determine the input(you know that putting your hand in hot water hurts like hell, but you can't use that knowledge to derive the temperature)
(2): The probability that two inputs derived from different senses or will affect your emotions with comparable strength is small. To do that the objective facts has to be very very similar to each other AND connect in the same way to different inputs. The emotions however are of the same kind and will sort of add up in your brain and affect your overall well being. It will be difficult to separate your overall emotion into components AND THEN determine the quantity of the input.

This affects you a lot! But more about that next time.

Life is a game

Games are like reality but in a box. This may not be quite obvious but hang on for a while.

How do you define a game? I am not 100% sure but I am pretty sure it has to look something like this:

* It has rules.
* It is limited.

I can't figure out anything that I call a game that doesn't fulfill these criterion. With limited I mean that the rules that I apply to the game are at some point turned on and off. A football game for example has clear rules, but they only apply for 90 minutes (at the time, until the next game). When the game is on, other rules of other games are turned off. With this I mean that there can be games within the timespan of other games, but that only one set of rules apply at the time. While playing football we live in a democracy for example. But on the field the rules of democracy are disabled, and you are not allowed to determine the football game by popular vote. Is democracy a game then? Yes, it has rules and it started many years ago. It is actually also bound to stop sometime, be it due to war or the collapse of the universe. This new exciting type of game is a little different: it is played for an unknown time. The game of democracy is also paused when for example your mother demand that you do the dishes and you enter a new exciting game of family. These rules are dynamical and varies between families.

You may question this with something like this: "Your definition of a game is so broad that I can't figure anything out that isn't a "game"." This is precisely true and it takes me to my next statement; games don't have an antonym. I will help you and propose that the closest we can come to something that is not a game would be called "reality". The thing is that reality is not experienced objectively but by humans, and we live finite lives and follow rules while living our finite lives. Our lives are also small boxes placed in reality. Such rules are not meant to mean "rule of law"; those can clearly be broken. The rules I mean are for example cause and effect and laws of physics, but social laws are also useful when discussing the subject. If I rob a bank, I may or may not go to jail but the action itself affects the way people act towards me, usually due to the applicable social norms and conventions that exists.

So with my definition of games, life is definitely a game. We play it for an unknown but finite lifetime and we play it by rules (except if you are Neo in the Matrix). When we die we leave the playground (although we hopefully affected other people in a positive way, but that is then part of their games and not yours).

If you can believe this I have some ideas of how I can use this and develop some appropriate philosophy, based on how I like to play games. This is what I like in games.

* They are clear enough to understand.
* You can differentiate between success and failure.

Knowing me I realize that both these are an effect of me being very competitive. I hate games i which I don't know how I am doing and who is winning. How do I translate this to how I should live my life? The rules of our life are clearly very messy, and often good things comes with bad and vice versa. This is how I should it.

* I make my own rules, but call them ideals. Then I live by them. This satisfies my desire for clear rules.
* I set up goals. When reaching these goals it is the definition of success. When not, it the definition of failure.

This is surprisingly almost how I live my life. It has its problems, especially I have to experience loads of failures when I don't reach my goals. But in the end it is all of what I appreciate in a good game.

You may object and say that you can't set up your custom made philosophy based on what you like in games because "life is more serious than games". Then you are completely missing the point. Life is a game. But since we live in it we perceive the stakes of the game to be very high. But in principle it is not different from playing Super Mario with only one extra life and no continue. Besides that Mario gets extra lives by lethal mushrooms while we die from them.

Can you derive your philosophy from what you like with games?

With this we can now be very constructive! For example; knowing a persons favorite game may tell much about the persons' philosophy. Examples (Very Quasi scientific at best) :
No favorite game -> Either depressed or at least not much of a philosopher.
Solitaire -> Either a Christian fundamentalist (simplistic enough for you?) or hermit (no opponent to play)
Poker -> Poker professional (Self explanatory)

Why do intellectuals believe in the market?

Economics is the science of how "stuff" is produced and consumed, and by who. This may sound simple until you find out what stuff really means. Stuff includes among other things: Cars, electricity, video games, TV-shows, security, risk, sex, house cleaning, ideas, experience. The interface between producer and consumer is called "the market". This is where people exchange stuff.

Why do we study this? One reason is that we spend all our life on either side of the market. We wake up and go to work, spend eight hours producing stuff (with some small breaks for consuming food). Then we go home to consume the the stuff we are entitled to get since we produced things for other people during the day. We live all our life on either side of the interface that connects producer and consumer. A simple example may look like this:
Wake up (consumed one night on your bed)
Breakfast (consume corn flakes)
Go to work by bus (consume bus ride service)
Work (produce cars for others) (Example not applicable in Sweden anymore)
Go home (bus service again)
Relax and Recharge (Consume TV subscription.)
Eat (consume corn flakes)
Go to bed (consume one night on your bed)

Does it alarm you that your life is one big supermarket in which you work some shifts as a cashier just to be able to buy your food? I don't mean to upset with this but I think it shows why we want to study economics (well maybe not you and I, but some guy). If we understand this process we can use it to develop better public economic policy which means that we will know if we should spend our tax money on schools or bailouts. Important stuff.

The problem is that we will never be able to know this. I usually explain why this is impossible by showing an (empty) beer can with the following statement: "At least 10 people were involved in the brewing of this beer in some unknown country (usually Denmark though, Its' usually a Carlsber)g. In some way they made it because they had some value of my calculations. How did they benefit from my calculations?"
The answer is of course that no one will ever know how this happened. For some reason some guys brewed beer for me because I provided something for them. But they don't even know who I am. It's like magic.

People used to believe that there were two different ways to deal with this complex process. The first one was called communism and was based on that clever people were very able to understand this process and use it to make everyone better off. They came up with a plan for their economy and applied this plan to control what was produced and consumed. After the Berlin wall fell it became obvious that they weren't that good at doing this since eastern Berlin looked like the retarded cousin of western Berlin. This was strong evidence against a planned economy. Most sensible people now consider communism as ineffective and wasteful, although many people are still drawn to its more romantic aspects like fairness and such.

The other way of dealing with this is to say that we are too stupid to understand the market process and should hence leave it alone. The government should not intervene and try to fix the market any more than a moron should try to fix a car engine. This side is called capitalism. From this ideology it is easy to derive policy like Free trade, no taxes, no unions and no minimum wage.

Slow down, you may say. All this things are big policy decisions. How do they derive these again? I'll explain it in steps:
1) assume you have perfect engine.
2) assume a moron is standing next to it.
3) Now ask yourself: Do you want the moron to mess with the engine?
If you are reasonable you say NO and start to support all kind of economic policy that keeps that moron away from the engine.

If you are not an economist you may apply some common sense and say: Should we assume that the engine was perfect just like that? What if it is not? Maybe if it is not even working a moron may be able to make some things better. Economists have thought about this and decided to deal with it like this:

1) In the economy, the engine is made of people.
2) These people are not homogeneous. They are problematic to predict since they are different.
3) Well, assume that they are homogeneous then. At least then I can do some calculations before I go home.
4) This calculation turned out to be a pain. Let's also assume that they are extremely selfish and only want to maximize their OWN happiness, that reduces my calculational pain. (This is actually very similar to what we do in Physics: we assume that the electrons are independent and don't care about each other, then we compensate for this later. We do this because it is painful to calculate anything else.)
5) Wow! If this is true; markets are truly very efficient.
6) If markets are efficient, let them govern themselves. Keep the moron away from the engine.

Now we can conclude three things:
1) Markets are efficient and can be left alone IF our assumptions are right.
2) If the above is true it would be disastrous to let the market break down. We should only intervene if our efficient market is threatened. Banks are crucial to the efficient market since they provide liquidity, they should be bailed out.
3) If the above is true investing in schools may actually ruin the market for private education which is more efficient. No more investing in schools.

Intellectuals like capitalism for the same reason that I like my faulty model that I use to calculate how electrons interact. Because I can pretend that I know the truth and I will get numbers and funny predictions out. They will get numbers and fancy policy out.

Better hope that people are selfish and homogeneous (also that they have all the information in the world to make educated decisions, but I didn't have time to talk about that).