Tuesday, July 31, 2007

how to keep from losing our heads

It's possible to drive a herd of Buffaloes right off a cliff. First Nations people did just that in a place in Alberta called, appropriately enough, “Heads-Smashed-In Buffalo Jump”

Whereas, if a single Buffalo was chased it would dodge about and quickly change direction, a herd runs together and acts as if a slower more primitive organism is in charge. Individuals take their cues from the individuals around them. If everyone around you is running the same way you are less likely to change direction. So individual Buffaloes don't pull out, but run off the cliff together.

Herd behaviour is often self-reinforcing in this way. It forms the basis of behavior in financial markets and the stock market. An investor buys when he sees a trend towards climbing prices – a bull market. More people are buying so prices rise. The rising price means that people who sell make more money. And banks are more willing to make loans. With more money available more stocks can be bought so the price continues to climb. But at some point reality intervenes. The herd will reach a barrier and it has to change direction.

Something will eventually trigger enough lack of confidence that people begin to believe that the price of stocks will peak and start coming down. Enough people start selling and they bid the price lower. Lower prices mean that sellers are not getting as much money. And banks are calling in their loans because of the greater risk of default. Less money is available to spend and that forces prices down further. Whereas a bull market climbs gradually a bear market can drop precipitously. That's because as people receive less money their freedom of action diminishes and they lose options. They are motivated to quickly sell off as much as possible in order to cut their losses and gain more leeway. The herd of buffaloes is forced off the cliff because they have nowhere else to go.

Economics calls itself a science but it is really an ideology. Two of its fundamental assumptions are that each economic actor has perfect knowledge and acts rationally. But as we can see some markets, such as financial and stock markets, do not work this way. That's why no-one is able to predict the behaviour of financial markets with any degree of accuracy. Prices don't reflect reality because most of the time people don't know whether something is overvalued or undervalued. They follow trends like a herd. The very fact that we call a rising market a bull market and a dropping market a bear market shows an implicit recognition of irrational behaviour.

The other fundamental assumption of economics is that markets tend towards equilibria, But this is belied by the omnipresence of business cycles in the form of self-reinforcing booms and busts. Instability, not stability is the norm. During a boom demand chases supply as prices rise. During a bust, demand runs away from supply as prices fall.

We need to think and act less like bulls and bears and more like humans so that we can change direction before we reach our limits and run out of room to move. If prices don't reflect physical reality they will send the wrong messages to consumers and producers creating perverse incentives that reinforce destructive behaviours. This is exactly what happens when we allow big business to influence government policy.

There is no such thing as a perpetual motion machine yet we act as if the global economy is exactly that. If our economic behavior – our consumption and production - increase beyond the bounds of the Earth's capacity to support us then we are in a situation analogous to the Buffalo running off the cliff into the thin air. Our overproduction of stuff will cut the Earth out from under us.

Sunday, July 22, 2007

A Message From the Garden

One of my favorite stories is the story of the garden of Eden. As a story it's got everything: sex, nudity, the loss of innocence, the quest for power, deceit and betrayal... It could have been written yesterday.

When God first made the world God made a garden and created a man and a woman to live there. God named the first humans Adam and Eve. Before there were any other people Adam and Eve didn't wear any clothes – not a stitch. They didn't need to work because everything they needed was ready at hand, in the garden. God told them that there was only one thing they couldn't have and that was to eat from the fruit of the tree of knowledge. God told them straight out: if they ate from that tree they would die.

In the garden lived a talking snake. And being innocent, Eve didn't realize that snakes are something to be afraid of. So she listened politely as the snake suggested to her that, in spite of what God said, she and Adam could really benefit from eating that forbidden fruit. “God is putting you on.” said the snake, “God knows that if you eat of that fruit you won't die. Instead you can use this knowledge to become as powerful as the Gods.”

So Eve talked it over with Adam. And being a man it's hard to argue with a naked woman. So they both ate of the fruit and their eyes were opened. And the first thing they realized was that they were naked. Ah knowledge – there goes innocence. So Adam and Eve made the first pair of bermuda shorts out of a bunch of fig leaves. Then they hid from God because, having knowledge, they knew they were in big trouble.

But God also knew what was going on and so God called out to them: “Why are you hiding?” At this point Eve knew that there was no sense in lying to God because God knew everything. So she confessed to their eating the forbidden fruit. Even though God knew everything, this still made God angry. “No more innocent fun for you two. Adam, from now on you will have to work by the sweat of your brow. Eve, you will have to suffer the pain of childbirth.” And God sent them out of the garden.

What do we get from this story? Even when we humans come to know things we still get it wrong. Knowledge is not certain knowledge. We can only make guesses and the longer we are around the better we are at guessing what is going on. But we can never be certain. Being human, we are guaranteed to screw up because we can't know everything. But we can learn from our mistakes and improve.

Christians call this “original sin”, but I call it being fallible. If we are fallible then we must be open to other points of view because we can never be certain that our point of view is the truth. This leads to Open Society. Since we always fall short of perfection we should always be open to improvement.

Fundamentalist Christians call the idea of Open Society “secular humanism” and “moral relativism”. They believe that there is only one standard of truth and it's in the Bible. When there is only one standard you don't need to ask questions, you simply follow what authority says. This is Closed Society. There is no room for improvement because we have certainty, no learning from mistakes because we don't make
mistakes, no listening to other points of view because every point of view but ours is wrong.

The problem is there are as many interpretations of the Bible as there are people. How can we know which interpretation is the “true” interpretation? If the story of the garden of Eden is anything to go on – even when we think we have certain knowledge, we still get it wrong.

Monday, July 16, 2007

Here's Why U.S. Should Impeach Bush

One of the best shows on TV right now is Bill Moyer’s Journal on PBS. I am amazed at both the superb quality and at Bill Moyer’s courage for hosting it. Last Friday it was about impeaching U.S. President George W. Bush and Vice President Dick Cheney. There were two constitutional scholars being interviewed, one a Democrat and the other, a Republican. They both gave eloquent and compelling arguments in favour of impeachment.

The U.S. Democratic House Leader Nancy Pelosi has insisted that impeachment is not on the table. So far at least a dozen books about impeaching Bush and Cheney have already been published. Apparently a recent poll has 54% for impeaching Cheney and 45% for impeaching Bush. Congressman Dennis Kucinich has put forth a motion to impeach Cheney but only thirteen other Congressmen have signed on as yet.

A serious movement to impeach Bush and Cheney would probably hurt the Democrats because people would perceive this as a power grab. No-one wants to impeach Bush by himself, because then Dick Cheney would become president. Oops! Both of them would need to be impeached and that means that according to the
American political system, the House Leader would become President. This is one reason why Nancy Pelosi does not want to be seen supporting impeachment.
Here is my brief but incomplete list of reasons for impeaching: The Bush administration has consistently acted as if it is above the law and unaccountable to the people. Bush through his many “signing statements” has attempted to nullify legal restrictions on his actions. Bush together with Cheney has refused to answer subpoenas and refused to cooperate with congressional investigations; has used lies to get the United States into an unjustified war; has been involved in illegal spying on the American people,etc…

The two scholars on Bill Moyer’s Journal – Bruce Fein and John Nichols, both argued persuasively that if Bush and Cheney are not impeached then future presidents will have a precedent for expanding their power and practicing illegal activities with impunity. They pointed out that once such a precedent is made it is very unlikely that a future president, either Republican or Democratic – for instance, Hilary Clinton – would give up those extra powers. Therefore, it is in the interests of both sides to impeach them now.

Nichols and Fein argue that the United States Constitution, with its central doctrine of the separation of powers, is being subverted by Bush and Cheney’s actions. Not going forward with impeachment would set a dangerous precedent for the future of America.

These are undoubtedly interesting times. Imagine, TV. that actually makes a difference. Don’t be surprised if Bill Moyers is kicked off the air for this.

Tuesday, July 10, 2007

We should be listening to the bees

Lately there's been a big buzz about honeybees dying off. They call it Colony Collapse Disorder or CCD. One day the beekeeper sets up a hive with a thriving colony the next day the hive is empty except for the Queen and her brood. All the worker bees that went off looking for pollen and nectar are gone, never to return. Nobody knows why it is happening. Perhaps it's a new disease, or maybe a combination of diseases, or maybe too much pesticides or herbicides. Some have even argued that cell phones are the culprit because they could interfere with the bee's homing system.

There are twenty thousand species of bees – all of which contribute to the pollination of flowering plants. Domesticated honey bees are derived from only seven of those species. Honey bees have become indespensible for pollinating the crops from large farms and orchards. That's because along with urbanization, the huge fields of single crops have displaced the habitat of wild bees.

Bumble bees, which have longer tongues and can carry bigger payloads, are better pollinators than honey bees but they have much smaller colonies made up of from ten to one hundred bees.

Honeybee colonies, with up to forty thousand bees in a single hive, can more than make up for their less efficient pollinating technique via sheer numbers. Beekeepers truck their bees across North America in order to pollinate various important crops: cotton, apples, soybeans, avocados, and especially almonds. Some say that the mysterious CCD is due to the fact that the bees are deprived of their honey and fed a solution of corn syrup. Or maybe its the stress of being trucked all over the place. One thing for sure is that honeybees on organic farms are in much better shape with few recorded cases of CCD.

Bumblebees are the generalists of the bee world. The new bumblebee queen spends the winter hibernating. When she wakes up in the spring she has to select and furnish a nest site, lay eggs and brood and forage for nectar and pollen all by herself until her first brood of workers matures. Honeybees have much stricter caste systems where the queen is always surrounded by a huge retinue of workers.

A bumblebee can fly at much lower temperatures than honeybees because the bumblebee is “homeothermic” - meaning they can warm themselves up by shivering or firing up their flight muscles. That's why you'll always see bumblebees out earlier in the spring than honeybees.

Bumblebees, also called “humblebees”, are more adaptive than honeybees. They originated in the arctic where the flowering season is short but the days are long. They survive in colder climates; they forage on a larger variety of flowers. Their smaller colonies mean that they can live in a greater variety of nesting sites. Here in Prince Rupert, where there are no honeybees, bumblebees do a great job of pollinating my raspberries and blackberries.

Like the canary in the coal mine, if domestic honeybees are in trouble it could be a sign that industrial agriculture with its excessive use of herbicides and pesticides and its oversimplified system of monoculture is in trouble also. We could do well to heed that message ourselves.

Tuesday, July 3, 2007

The Open Society and Its Enemies

In 1938 when Hitler was about to plunge the world into war and German facism and Soviet communism were at the pinnacles of power the Austrian philospher of Science, Karl Popper wrote a book called “The Open Society and its Enemies”. In his book, Popper attacked the ancient Greek philosopher Plato for being an apologist for totalitarianism. He went on to criticize other great philosophers such as Hegel and Marx but the real brunt of his attack was on Plato, considered by many to have been the greatest philosopher of all time.

Besides his hatred of totalitarianism one of Popper's main motivations for writing “Enemies” was his belief that the social sciences had failed to grasp the significance and the nature of facism and communism. Popper argued that the reason why the social sciences had not led to a better understanding of totalitarianism was because these sciences were based on faulty epistemologies. He called marxism and other philosophies of history pseudo-sciences for purporting to predict the course of history. The communists and facists not only asserted that theirs' was the only legitimate view of history they demanded absolute loyalty to their view. This made critical thinking impossible and led to the destruction of knowledge in totalitarian countries.

Popper's philosophy of science is based on the idea that there is no way to prove the truth of any knowledge. All we can do is use the process of critical thought to examine our assumptions and theories and through democratic means, choose the best of them. On the other hand it is possible to disprove theories, if we gather the right evidence. Thus scientific knowledge can keep approaching the truth through a process of conjectures and refutations, but it can never achieve certainty.

This critical process is reflected in open society in which no one group is allowed to impose it's views on the rest because it is recognized that there is no ultimate truth. Instead the institutions of an open society: schools, courts, the market, etc., are all designed to enable citizens to freely reach their own conclusions about the truth. In an open society ideas,values, and theories compete with each other and there is free rein to accept or reject ideas according to agreed upon standards of evidence and reason. But significant and sudden changes can put open society at risk because these can threaten our sense of security.

Modern society in the last hundred years has appeared more and more vulnerable to attacks on it's openness. The hyperinflation in pre-second world war Weimar Germany was so traumatic that Germans lost faith in the liberal political institutions and allowed themselves to be seduced by the totalitarianism of Hitler's Nazis.

The attacks on 9/11 traumatized the American people leading them to be less critical of the Bush administration's deconstruction of their beloved constitution. The “War on Terror” is an example of an uncritical approach to knowledge about war and politics. George Soros calls it a “false metaphor”, and a good demonstration of his idea of “reflexivity”. The more the Americans wage war against terrorists in places like Iraq, the more it becomes a focal point for the recruitment of new Jihadists. Thus it's a war without end that ends up creating more terrorists then it destroys. Like the witch craze in the sixteenth century, people in power, believe that their policies are seeking out and destroying evil when in fact they are creating the evils that they set out to prevent.

The question is, as Soros puts it in his book “The Age of Fallibility”: “How can participants make the best decisions when they cannot base their decisions on knowledge?” It is only through the critical thinking allowed in open society that the best decisions can be made. The ongoing suppression and censoring of scientific evidence about global warming is a case in point. Since the United States is the most powerful nation around what happens to scientific inquiry there has repercussions for the future of the world. And that's a scary thought.

In a closed society, there is only one version of reality, and all competing claims to truth are prohibited. Therefore pursuit of power replaces the pursuit of truth as lies are used to justify official policy, and vital information is witheld from the people. Unfortunately that other Austrian interpreter of Plato, Leo Strauss, agreed with Plato's idea of “the noble lie”. And unlike Karl Popper, Strauss' influence on the neo-conservatives is still felt in the Bush Whitehouse.