Broad Oak: your emotional support animal

Sunday, May 31, 2009

History Revisited?

I have just finished re-watching Jacob Bronowski's wonderful 'The Ascent of Man' series, which I first saw as a teenager.

In his segment on Isaac Newton, he notes that Newton couldn't get the attention of the rich and influential in his middle years. The reason was that there was little interest in science and technology, since so many were making fortunes in the South Sea Bubble scam.

It struck me at that moment that the disinvestment in science and technology in the US and UK for the past 30 years may be due to a similar set of cicumstances, since so much money was being conjured out of thin air, first in the dotcom bubble, and then in artificial housing prices.

18 comments:

James Higham said...

There may be a connection.

OldSouth said...

People, of all levels of wealth, are generally allergic to work, likewise allergic to people like Newton who display extraordinary industriousness.

Thus, get-rich-quick bubble schemes throughout history.

And, crashes...bailouts...different varieties of totalitarian ideologies...

mainstreetmattersmore.blogspot.com

Joseph Oppenheim said...

People, of all levels of wealth, are generally allergic to work, likewise allergic to people like Newton who display extraordinary industriousness.<<<<

Sorry, but Newton was not into "work", per se, as his vocation was intellectual, similar to those who make their livings via investing.

Please remember, there were investors who actually made money during the dot.com "bubble" and "artificial" housing prices. Believe it or not, many people actually sold near or at the top of those "bubbles", just as in any other "bubbles". Investing is all about understanding human psychology in addition to investment fundamentals, etc.

Paddington said...

Joseph - making money in a rising market is as much luck as anything, and quite a few experiments have shown that.

As for Newton, I would say you are quite dismissive, as befits the modern American Republican. Newton produced tools that are still in use today. Investment specialists produce nothing.

Newton and his ilk paved the way for the Industrial and Scientific Revolutions, which made the modern world possible. They frequently did so at risk to their own lives (G. Bruno, J. Kepler, Galileo) because they followed data to the logical conclusion, and offended the powers-that-be.

As for 'work', I have seen many students try and fail to gain degrees in science, mathematics, and engineering. To succeed requires some natural talent, and a great deal of work. The ones who get there are working far more than business, law, or humanities students.

Thank goodness that some are still willing to try.

Joseph Oppenheim said...

As for 'work', I have seen many students try and fail to gain degrees in science, mathematics, and engineering.<<<<<

Precisely! That was my point. Intellectual pursuits are as valuable as some perjoritive term like "work". They both are actually work. To use one's mind requires enervating electro-chemical processes, etc. Also, owning a company and delegating all operations is really logically quite similar to buying shares in a company therefore being part owner.

As for Newton creating intellectual tools which have helped others - to say an investor who earns all his money through investing is not accomplishing something worthwhile is nonsense. Besides providing for one's own living expenses and not being dependent on others and benefiting one's loved ones/family also, etc - one is also providing capital for an organization and society which benefits many people, not to mention taxes paid to contribute to a whole society.

I'm not saying all investors are equal to Newton, just as not all scientists are equal to Newton, just that is can be a worthwhile vocation.

As for making money in a rising market, not being a skill, sorry, but simply not true, especially when one has a proven consistency in doing so. The key is not being greedy. Capitalism needs investors. That is a fact, and our society needs capitalism. It's all about moderation, like with anything.

As for you aside comment about math, I could go on and on about math. In my opinion, it is the key to understanding EVERYTHING. Two important things to remember about math: 1)it is an art not a science - hence BA/MAs in pure math. 2) its real purpose is to teach one how to think not what to think.

Paddington said...

Joseph - I should know a little about mathematics, since I have been a mathematician for 35 years.

While 2) is important, you have to realize that 1) is both right and wrong. The huge demand right now is for applied analysts, who can make a model, and also prove that the conclusions of that model are correct.

As for the issue of investing, the problem is not just greed, but short-term thinking. Long-term investment is the only way out of our current mess.

Paddington said...

Joseph - to my mind, there is a huge difference between creation of wealth or usuable ideas, and the movement of the same. I am not arguing that many investment people work long hours, by the way.

My opinion is that there is more creativity in good science than in art, music, or literature, since scientists are bound by reality, and so have to work around those limitations.

Joseph Oppenheim said...

As for the issue of investing, the problem is not just greed, but short-term thinking. Long-term investment is the only way out of our current mess<<<<

I agree 100%, Paddington. Short term thinking is speculating, not investing. The only caveat I have about that, is that with long term positions in a stock I think it is wise to sometimes add or subtract from the position to take advantage of situations, hoping to make a quick profit with the worst case being if the situation doesn't pan out, I just have added to my long term position or now have a better opportunity to pick up what I had sold thereby enhancing my long term position. So, really it is just managing my long term position in the stock, with the added advantage of just keeping me up-to-date with the stock, always important. By the way, I also only buy stocks which pay good dividends, hopefully raising them each year. Buying stocks that don't pay a dividend is also speculation, not something I am interested in.

As for your comment:

My opinion is that there is more creativity in good science than in art, music, or literature, since scientists are bound by reality, and so have to work around those limitations.<<<<<<<

Well, what I have to say to that, is Einstein set himself apart from his European science peers, was although he was a physicist he became enamored with math, and differentiated himself from most other scientists at the time who mostly used induction (observing things and coming up with laws from them), by using deduction (coming up with some theory in his mind, then seeing if he could find its proof in nature). That is why math is an art and how Einstein used it to set himself apart from other scientists. Remember, Einstein, although very intelligent (about 150 IQ), was certainly not up to the level of many of his peers (probably closer to 200 IQs).

Also, remember, the largest media company on the planet, Google, was founded by two math students. There are even mathematical alghoritms which can interpret prose.

It surprises me that as a mathematician you seem to underestimate math. Science is important, but it is the art, math, which is where the real creativity comes in with science. Oh yeah, the artist, Jackson Pollack, when his art was analyzed they discovered mathematical fractals within his "art". How did that happen? Who knows, except it opens the mind to how math is the key to probably everything.

Paddington said...

I don't know where you get the impression that I underestimate math. It is US and UK societies that have done so for 30 years, and are paying the price now.

Joseph Oppenheim said...

I don't know where you get the impression that I underestimate math. It is US and UK societies that have done so for 30 years, and are paying the price now.<<<<

Yeah, Paddington, in the US it really is kind of a paradox.

Americans seem to love numbers, but not arithmetic. Despite the popularity of TV shows like 'CSI' and 'Numb3rs' and movies like 'Good Will Hunting', 'A Beautiful Mind' and 'The Da Vinci Code', Harvard recently only had 77 math majors out of 6700 undergraduates.

Paddington said...

Joseph : "Harvard recently only had 77 math majors out of 6700 undergraduates."

We have perhaps 100 math majors out of 26,000.

Joseph Oppenheim said...

Yes, Paddington, I do think you nailed perhaps the heart of what lead to this financial mess. Since math teaches people how to think, so many just didn't have that ability.

When this mess first started I read the 1852 classic book, "The Extraordinary Popular Delusions and the Madness of Crowds", hoping to gain some insights.

Sure, the book goes into some historic financial bubbles, like Tulipmania, the South Sea Bubble, and the Mississippi land scheme. But, when it got into other manias involving witches, the Crusades, alchemy, popularity of certain phrases/expressions, fortune tellers, slow poisoners, duels, admiration of thieves, haunted houses, etc., it awakened me that our financial meltdown wasn't simply a repeat of other financial bubbles. We had the Internet bubble only a few years prior to what was happening with Housing, so most of us should have not been so blinded as Housing got out of hand. But, it is clear that we were also suffering from an overload of all kinds of manias, which I think appeared to condition so many in our society to find an even greater safety in 'crowds'. In particular, words like liberal and socialist were not just argued against, but actually successfully demonized, along with targeted uses of words like 'traitor' for anyone not supporting a US war, even trying to affix the term, 'terrorist' to Barrack Obama. Witness the success of Ann Coulter books, Fox News, etc. It is like if you just wanted to be a renter, there must have been something wrong with you, even anti-American, not wanting to participate in 'the ownership society', another term feeding into a financial mania. Plus, was anyone warning that this 'ownership society' was based almost entirely on debt, hardly real ownership? Heck, we were told after 9-11, the patriotic thing to do was shop, never mind sacrificing for the war. Also, our almost maniacal adoration of celebrities, outrageous salaries for athletes and CEOs, long lines for new introductions of new Apple products, Harry Potter books, etc, etc.

We were a society primed with all kinds of 'extraordinary popular delusions', especially susceptible to a meltdown of generational proportions. Will we change? It does look like many are looking for some deeper societal transformation. But, as this book seems to show, transformation will be difficult, and we probably need to worry about transforming to just another mania, just as bad.

By the way, when the book mentioned a mania associated with 'fortune tellers', I also see a mania-like symptom surrounding guys like Peter Schiff, Noriel Roubini, etc, etc where masses of people are turning to just the modern day incarnation of 'fortune tellers', rather than relying on their own minds, education, etc. People trust their own minds less and less, nowadays, and probably like you say, with good reason. I would also say the same thing applies to the "Teabagger" mentality, just another crowd-following mania. Follow one mania with another, just great! Obama has a legitimate fine mind, with a dispassionate demeanor, surrounding himself with other proven fine minds, not political hacks, and was elected with a solid majority and still has solid support, yet sure, trust a mania with obstructionists whose only policy position on this financial mess is "No".

Paddington said...

Joseph - Try Michael Shermer's 'Why People Believe Weird Things'. It's probably in the clearnace rack. After living here in the US for 31 years, I am convinced that Americans have a huge capacity for lying, both to themselves and others. I pointed out a while back on our local talk radio that America has charged into every War in its history with frenzied assurance that 'One American was worth 3 Huns/Jpas/Germans/Gooks', etc, and was never actually prepared. Look at the terrible situation in Iraq, the Vietnam mess, the fact that the soldiers in Korea weren't issued cold-weather gear the first winter, etc.

On the other subject, you might be interested to know that there is a movement in business schools to eliminate mathematics, and in engineering schools to reduce the same. The argument is that 'computers can do all of this'.

Joseph Oppenheim said...

OK, Paddington, I put the book on my Amazon.com wish list. Sounds interesting, though I notice the customer reviews of the book are all over the place. So, I'll put it in the mix of upcoming books I'll consider.

It does sound like our minds do cross paths, with the differences perhaps by degree, rather than completely opposite, like with your comment about wars, etc.

The remarkable thing about the US, in my opinion, is the diversity, both in people and their ideas and on top of it all, there is general optimism. The defining political issue of my life was Vietnam, and remember the US did come close to real revolution over it. There is a strong moral component in America, while at the same time a strong immoral component. Think, math, to me the two most significant math concepts are infinity and math paradoxes. So, reasoned thought can still include paradoxes - dualities. In my opinion, that is why controversial issues are controversial, because both sides of an argument can be true at the same time, where the only differences are nuanced differences.

Rememember, great legal minds have to understand both sides to an argument, because there really are two sides, or more, to an argument.

As for morality relating to war, remember this is the most peaceful time in recorded history, based on the percentage of people dying from war. As bad as Iraq has gone, deaths are miniscule compared to Vietnam when the US killed maybe 2-3 million Asians with about 58,000 US deaths. Iraq is nowhere near that. Not to mention, what happened during WWII. As I mentioned America's checkered past with genocide of Native Americans and slavery of Blacks, nothing close to Germany and Russia during WWII. Plus, America managed to hold together. We are a nation that has bent but not broken and somehow came out better, and things do tend to run in cycles. Bush was elected in 2004 out of fear and Obama in 2008 out of hope. Again dualities, America has both, but, in my opinion, hope usually wins out in the long run.

About you comment about less math in business schools, etc, I'd say my criticism is not so much using computers, etc for calculations since that is applied math, my concern is for the lack of teaching theoretical math, abstract math. I am a big advocate of research universities, because since they look to prepare students for doctorates, they teach more theory than applications. So, even if one just gets a BA there, it is from a higher level of mind development. And, of course how important just a BA in math from that kind of institution. As I say, teaching how to think, not what to think. Applied math is important, but not like theoretical math, at least in K-12 and undergrad college/university.

By the way, the book I am reading now is "Is God a Mathematician?"

Joseph Oppenheim said...

my Amazon.com wish list. Sounds interesting, though I notice the customer reviews of the book are all over the place. So, I'll put it in the mix of upcoming books I'll consider.

It does sound like our minds do cross paths, with the differences perhaps by degree, rather than completely opposite, like with your comment about wars, etc.

The remarkable thing about the US, in my opinion, is the diversity, both in people and their ideas and on top of it all, there is general optimism. The defining political issue of my life was Vietnam, and remember the US did come close to real revolution over it. There is a strong moral component in America, while at the same time a strong immoral component. Think, math, to me the two most significant math concepts are infinity and math paradoxes. So, reasoned thought can still include paradoxes - dualities. In my opinion, that is why controversial issues are controversial, because both sides of an argument can be true at the same time, where the only differences are nuanced differences.

Rememember, great legal minds have to understand both sides to an argument, because there really are two sides, or more, to an argument.

As for morality relating to war, remember this is the most peaceful time in recorded history, based on the percentage of people dying from war. As bad as Iraq has gone, deaths are miniscule compared to Vietnam when the US killed maybe 2-3 million Asians with about 58,000 US deaths. Iraq is nowhere near that. Not to mention, what happened during WWII. As I mentioned America's checkered past with genocide of Native Americans and slavery of Blacks, nothing close to Germany and Russia during WWII. Plus, America manged to hold together. We are a nation that has bent but not broken and somehow came out better, and things do tend to run in cycles. Bush was elected in 2004 out of fear and Obama in 2008 out of hope. Again dualities, America has both, but, in my opinion, hope usually wins out in the long run.

About you comment about less math in business schools, etc, I'd say my criticism is not so much using computers, etc for calculations since that is applied math, my concern is for the lack of teaching theoretical math, abstract math. I am a big advocate of research universities, because since they look to prepare students for doctorates, they teach more theory than applications. So, even if one just gets a BA there, it is from a higher level of mind development. And, of course how important just a BA in math from that kind of institution. As I say, teaching how to think, not what to think. Applied math is important, but not like theoretical math, at least in K-12 and undergrad college/university.

By the way, the book I am reading now is "Is God a Mathematician?"

Paddington said...

Joseph - a lot of the applied mathematics being done now is quite theoretical. That's why the engineers and scientists have us on board, because the large computing tools are failing them. As for caclulators and computers, the result of using them is that fewer students have and number sense at all. How much of the current economic mess can be laid at the door of people who don't understand numbers or logic?

Joseph Oppenheim said...

As for caclulators and computers, the result of using them is that fewer students have and number sense at all.<<<<<

Yes, Paddington, I agree that the sciences, engineering, etc are seeking out pure mathematicians. I am reminded of a college student advisor who once said what she liked about math majors, is that they are prepared to pursue virtually any career, with companies loving them because they can fit into so many areas.

As for your comment about computers, etc being a crutch, I think it is more complicated than that. For creative minds, they are but tools to reach greater creative/mathematical heights. Plus, if properly used, there is less need for the masses to be so technically skilled, so to speak. Like, in the US, because of computers, etc there is less need for many clerical jobs, and recently even higher order jobs even financial, engineering, etc. The workplace has flattened, with less need for middle management and related jobs, hence the pressure on the middle class.

But, with such tools, now there is a greater need for lower level workers to be skilled with social, interpersonal skills. Think of a fast food worker, now it is more important for her/him to relate to the customer than master calculating change, etc since machines can speed time and be more accurate. Sure, that doesn't eliminate the need for everyone to understand math, just that we need to figure out how to best do that best. That is why I have mentioned before how computers are transforming education, with distance and virtual education programs all over the spectrum from early grades all the way up to masters graduate degrees, to make it easier and cheaper to educate so many.

That is also why I think it is so important to upgrade the pay of lower class workers to "living wage" levels. The reason inflation hasn't been a problem over the last two decades has been because of increased productivity. The little guy actually contributes much more to the economy than ever before, but the players at the top are trying to keep all the profits for themselves.

So, yes, let's upgrade everyone's math skills, but now we actually have the tools to do so very cheaply, while the people at the lower ends, because of increased productivity, have more time to pursue education, as long as we pay them enough for the work they do, or subsidize the education.

By the way, after WWII, top notch German medical professionals went to the US, and led the way for America to be #1 in the medical sciences. Whereas, top notch German mathematicians mostly went to Russia, to make them #1 in math. Remember, the USSR was the first to reach outer space.

After the Berlin Wall fell, there was a mass exodus of Russian mathematicians to the US, specifically on Wall Street. What a waste of talent! But, that was where the big bucks were. And, look where that lead. We need to level the field and make teachers, etc, especially math teachers not only earn more, but be more respected. But, computers, etc can help, if done right.

Paddington said...

Joseph - first a little correction. The German and other European mathemacians freqently came here after WWII, or shortly before. Think of Einstein, von Neumann, etc. America was the leader in both pure and applied mathematics for decades as a consequence. The Russians were good because:

a) Stalin, and earlier the Tsars, sent all of the 'problem' people to Siberia, many of whom were the intellectuals. That's why Nova Sibersk was the primary centre for mathematics in the USSR.

b) They didn't have the computing equipment that the West did for decades, so had to do better mathematics.

c) The Russian ssytem was selective, even under the communists.

As for improving productivity, the world is getting too complicated just to push buttons. Chernobyl was one example. For another, a friend once found a physical facilities guy at Cleveland State University trying to pour a barrel of ammonia into the same drain where he had just poured a barrel of bleach. The overuse of calculators and computers hides ineptitude, but makes the problems (like the current economic meltdown) far worse when they do occur.