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The Fermi Paradox and the Hubris Hypothesis

The Fermi Paradox and the Hubris Hypothesis.
The great Enrico Fermi proposed the following paradox. Given the size of the universe and evidence of intelligent life on Earth making it non-zero probability for intelligent life elsewhere, how come have we not been visited by aliens? “Where is everybody?”, he asked. No matter how minute the probability of such life, the size should bring the probability to 1. (In fact we should have been visited a high number of times: see the Kolmogorov and Borel zero-one laws.)
Plenty of reasons have been offered; a hypothesis is that:
+ With intelligence comes hubris in risk-taking hence intelligent life leads to extinction.
+ As technology increases, misunderstanding of ruin by a small segment of the population is sufficient to guarantee ruin.
Think how close humanity was to extinction in the 1960s with several near-misses of nuclear holocausts. Think of humans as intelligent enough to do genetic modifications of the environment with GMOs but not intelligent enough to realize that we do not understand complex causal links. Many like Steven Pinker are intelligent enough to write a grammatical sentence but not intelligent enough to distinguish between absence of evidence and evidence of absence. We are intelligent enough to conceive of political and legal systems but let lobbyists run them. Humans are like children intelligent enough to unscrew a computer but not enough to avoid damaging it. And we are intelligent enough to produce information but unable to use it and get chronically fooled by randomness in some domain (even when aware of it in other domains). +
Acknowledgments: I thank Alessandro Riolo.

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SKIN IN THE GAME and The reasons for firms to exist.

SKIN IN THE GAME and The reasons for firms to exist.
The great Ronald Coase, in 1937, came up with the theory of the firm which “offered an economic explanation of why individuals choose to form partnerships, companies and other business entities rather than trading bilaterally through contracts on a market.” His idea is that there are costs to having firms but that transaction costs are lower within a firm, by which he meant cost of searching, bargaining time, secrets, etc. These are supposed to outweigh some the benefits of competition. So competition works, but it is optimal to have firms competing than just smaller units.
+ A simple extension related to SITM: firms exist because employees have more skin in the game as they have more to lose in some situations. For instance, a contractor has many clients, an employee is the equivalent of a person with a single client. You can have a complicated chain where one supplier can put you in trouble because another supplier is now frozen. The supplier cares about you but he has other clients and doesn’t need ALL of them to be satisfied, just MOST of them (not even).
+ In fact employees are rather insecure and although they may have slack and inefficiencies, they are more dependent precisely because they are inefficient and after years of employment are no longer able to work independent of a protector of job security. So it is this insecurity that makes them loyal, and escape the ubercompetitive system of contracts.
+Great literature beyond Coase: Alchian, Dempsetz, Williamson, etc. This idea came to me listening to a podcast by Russel Roberts.
+ Relational vs Transactional capitalism.

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GREECE, GREXIT, and “EUROPE”

GREECE, GREXIT, and “EUROPE” as an unnatural proto-Nazi “Aryan” construction, or why putting Teutons and Greeks together isn’t the smartest (and most stable) idea. Nor is it natural. The least *unnatural* union for Greece is some sort of *loose* Mediterranean League of City States (and another minor Balkan connection). But again, it would need to stay fuzzy –i.e., should you want to use history/culture, use them properly (“annales” style).
+ There are two natural cultural (eventually leading by mixing to ethnic) demarcations: butter vs olive oil (and eventually a third, the palm tree). The demarcation is robust: if people have the same food, they are the same (or eventually through mixing) become the same. Now if a nonblind but deaf Martian visited Turkey and Greece, he would think they are the same people (same with Lebanon and Western Syria). If words are different, body language in the Levant, Greece, Turkey and Southern Italy is similar. “Una faccia, una razza”. But a bureaucrat blinded by constructions would put the Greek in the same unit as the German, and bundle the Turk with the Huns in the Altai mountains near China.
+ But Mediterraneans are integrated as a socio-cultural unit. This is not just recent; the integration is 5000 years old in the East and 3000 in the West. The trend to “Europeanize” came with German scholarship which starting in 1820s (one Müller) tried to kill any Levantine/Babylonian connection to Greece, trying to give Germany some nobility in its historical roots, while French scholarship was until then considering Greece as deeply rooted in the Levant and Asia Minor, as a continuum from Babylon to the Phoenicians to classical Greece (mythology says that Europa herself was Phoenician). The rise of antisemitism played a part: the Teutonic cultural separation from the Levantine Canaanite race (the Jews and Phoenicians had near-identical language and ethnicity).
+ The Levant and what is now Greece spent at least 1000 years in the same political unit Rome-Byzantium and another few hunded in the Ottoman Empire; the Greeks and the Germans have now about 40 years together.
+ The nation-state started integrating the Mediterranean people. During the 19th Century only a few coastal cities such as Marseille and Toulon in Southern France spoke French, the rest spoke Provencal or Catalan.
+ The idea of a Mediterranean unit is not popular. Partly because it has been linked to Mussolini.
+ The Mycenians did not use a Semitic language (linear B). But the word Knossos (the capital) means “settlement” in Phoenician.
+ If a French person looks like a Mediterranean and speaks French, it is by colonization. The same applies to the “Aryanization” of Greece, to the “Turkification” of Asia Minor, and the “Arabization” of Syria or the “Aryanization” of India. Arian/Semitic/Hun is not a distinction beyond the language spoken.

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Statistics of Violence as Special Case of Fat Tails

A lecture summarizing the paper on violence with Cirillo to MIT and NECSI data scientists, mostly explaining to data scientists how to work with fat tails and only indirectly addressing Pinker by responding to those fooled by the illusion of drop in violence:

 

https://www.youtube.com/watch?v=R1Dm2ZYeA6U

 

Uploaded on Jul 10, 2015

A lunch discussion at MIT with computer science-data science researchers from MIT and NECSI. The talk is mostly about the methodology for dealing with fat tails, with application to violence.
We show which claims can be made, and which ones cannot be made, from data, and “violence has dropped” is not one of them. We do not focus directly on Steven Pinker’s popular science book (owing to some deficiencies), only indirectly as some people in political science made reference to it.
The paper is here: http://arxiv.org/abs/1505.04722

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Error, Dimensionality, and Predictability

This is a bit technical (for those into technical stuff and mathematical flaneuring). It proves why you can’t predict in any multivariate (not even complex) system.
Even thin-tailed variables are unpredictable.

https://dl.dropboxusercontent.com/u/50282823/Propagation.pdf

PS: Actually we show how we lose predictability by adding dimensions, with a trade-off, so it can lead to precise policies and decisions

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