Check this image out….
And then this one…
And then go play with the entire set….
And by the way, you’re welcome. ;)
P.S.: For the politically minded among you…start here.
Just got hit with someone promoting an article they’ve just written in an area about which I know passing little, and which may be total bollocks — though its so far out of my area of interest right now I’m not even going to dig deep enough to check.
This happens quite a bit — probably to anyone hanging in the blogosphere (certainly the science end of it). Everyone who pops their prairie-dog head even a little bit above the surface of public conversation gets these.
For me, having made films and written about Einstein — a true lightening rod — most of what I receive are fundamental theories of the universe (or the universe-and-spirit) that somehow have failed to gain traction in the hidebound and corruptly closed world of professional physics.
Back at the dawn of time, when I still used a chisel and slate whilst workign at NOVA, we used to put the most wackily wonderful of the then-snail-mail delivered breakthroughs up in a special corner of the hall bulletin board.
Now it’s all email, of course, complete with links to websites or pdfs. Not all of it is crazy stuff, though most is. Sometimes its just someone trying to get traction, blasting out news of something or other — not much different, I suppose, than putting up stuff on a blog…except for the distinction between pull and push media.
The one curiousity that comes from this new email mode of shouting in the middle of the stage “attention must be paid!” is you get to see who else your sender thinks belongs in the crowd of those who could help him or her. And this latest is nice company, if a rather — make that “very” — odd mix. I didn’t recognize many of the fifty odd receipients listed, but Jared Diamond was there, and so was Frances Fukuyama, (see what I mean about an odd combo?), Jerry Coyne and Jeffrey Sachs and a bunch of other hugely disparate notables. How I got on such a list I have no idea, but if one is to be distracted, even for a moment, by such random blasts from the cosmos, the frisson of synchronicity with all those grand pooh-bahs provides a chuckle.
Image: A fused quartz gyroscope for the Gravity Probe B experiment which differs from a perfect sphere by no more than a mere 40 atoms of thickness as it refracts the image of Albert Einstein in the background.
Yesterday CNN.com published my op-ed. in which I told the story of Isaac Newton’s catastrophic losses in the stock market during the South Sea Bubble of 1720. That piece is a distillation of a section in my book, Newton and the Counterfeiter (Amazon, Powells,Barnes and Noble, Indiebound) in which I discuss, inter alia, Newton’s role in the formation of what have become our modern ideas about money, finance and banking
For me, the moral of Newton’s catastrophic brush with stock market gyrations is that regulation of the financial markets is essential. Slightly expanding — my account in the CNN piece — this is so because human emotional responses in the midst of a money mania make even the most seemingly expert brains prey to belief in the impossible.
This is not a new thought, and examining it in detail is a staple of behaviorial economics.
Its connection to a justification of financial regulation is that this known deviation from the ideal view of markets made by rational actors with equal access to information is (a) exploited by the unscrupulous — and in fact there was fraud as well as simple delusion implicated in the South Sea Bubble — and (b) is simply an easy-to-spot example of a whole spate of real-world departures from the ideal markets of myth and beginning economics courses.
So far this seemed to me almost too banal to mention. But the comment thread to the piece reminded me why it’s important to pound this drum. And that’s because those who don’t know, or don’t wish to know, about the gap between aspiration and experience* keep on coming back for more. This comment on my piece is typical of one (I think a minority, but not by that much) reaction to what I wrote:
Claiming Newton should have known better is disingenuous. Just because he was of above-average intelligence does not give him the ability to know the unknowable. Fraudulent behavior is hidden precisely because it offers no benefit if everyone knows its fraud. Additional regulation on fraud is unnecessary — it’s already illegal — and additional regulation on non-fraudulent transactions is also unnecessary as it only adds cost and makes the transactions less efficient, as the author points out. Attempting to regulate the risk out of investments is folly — the only difference between a casino and the stock market is the odds.
This truly is a statement within a dream. In this writer’s pleasing fantasy, no fraud may be detected or deterred by a regulatory body other than that of the local sherriff. And no transaction that does not involve outright fraud can possibly distort the market.
What’s impressive about this commitment to assumptions-not-in-evidence is that it was written yesterday, Wed. July 29, 2009 — just five days after this piece appeared in The New York Times. This fine piece of MSM economics reporting (see — there really is good stuff out there) — documented the apparently legal use of very fast computers by leading Wall St. firms (Goldman Sachs, anyone!) to front run, and thus cheat other investors in the markets. Money graf:
High-frequency traders often confound other investors by issuing and then canceling orders almost simultaneously. Loopholes in market rules give high-speed investors an early glance at how others are trading. And their computers can essentially bully slower investors into giving up profits — and then disappear before anyone even knows they were there.
The cost adding, inefficiency, and theft in the markets affected by these trading technologies (which is to say the same markets where I and everyone else with a 401k live) is not driven by regulation, but by its absence or lack of enforcement.
As Newton used to say at the end of his proofs in the Principia, Q.E.D.
Image: South Sea Bubble card reproduced in the 1841/1852 editions of Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay, LL. D.
Nothing is as satisfying as the praise of one’s colleagues — especially the really good ones — which is why Nature’s Summer Books feature in the July 30 issue is so delightful. There Carl Zimmer has this to say about Newton and the Counterfeiter (Amazon, Powells,Barnes and Noble, Indiebound):
Imagine Isaac Newton as a policeman, using his brilliant intellect to pursue the most elusive thieves of his day. It sounds like a ridiculous example of historical fiction — except that it actually happened. …. Levenson’s account of the struggle between these two masterminds [Newton and his nemesis, William Chaloner] is fascinating on its own, but he also uses this historical episode to show how the modern economy took shape in the late 1600s.
The book’s resonance with today’s economic upheavals seems almost too good to be true. Would you believe that Isaac Newton lost much of his fortune in a financial crash? The physicists whose models of financial risk lie in ruins today can take some comfort in Levenson’s stranger-than-fiction tale.
It’s always great when a reader takes pleasure — and more — from something you’ve written. It’s better still when you know the reader is one of the best science writers and journalists working today. It’s even better when you get to see the company your book keeps — fourteen very sharp people recommending fourteen works…to produce a list my book is blushing to be part of.
Much has been made of the bizarrely almost beautiful incomprehensibility of ex-Governor Palin’s farewell speech. There’s something of the same — without the beauty, in Megan McArdle’s praised (by Sullivan) attempt to justify her reflexive rejection of health care sector reform. Check out this paragraph and tell me if you can figure out what the hell she’s trying to say:
Why don’t you tell some person who has a terminal condition that sorry, we can’t afford to find a cure for their disease? There are no particularly happy choices here. The way I look at it, one hundred percent of the population is going to die of something that we can’t currently cure, but might in the future . . . plus the population of the rest of the world, plus every future generation. If you worry about global warming, you should worry at least as hard about medical innovation.
I mean, what?
I can’t even be sure that this wasn’t machine generated. Actually, that’s not a bad hypothesis; it would explain so much of the imperviousness of the Village chatterers to any real-world correction. If McArdle, and so many others were actually simply a piece of software churning out grammatically sound strings of characters, it would make so much of current discourse clear.
But hell, there probably is a carbon-based unit answering to McArdle behind this nonsense. Probably even has a photocopy of a birth certificate lying around some place. But I tell you, if this is what passes for the intellectual elite on the wrong side of this issue, we’re in more trouble than I thought — and I think we’re pretty damn deep in the big muddy as it stands.
I very rarely read Megan McArdle. She gets filtered by the “life is too short to read stupid people” mesh. Specifically, in the area in which she claims expertise, economics, especially political economy she has neither formal training (Lit degree as an undergraduate, and an MBA for post-graduate work) nor any demonstration of subsequently acquired understanding.
But, some will say, she’s got an MBA!. Well, yes. That and a token gets you (showing our age here –ed.) on the T.
It’s not as well known as it should be — at least for those trying to get a quick read on the knowledge and skill of unmeritedly popular pundits, but MBA courses do not teach economics as real economics departments understand the subject.
Just take a look at the MBA offered by the management program to which I am closest (at least geographically), MIT’s Sloan School. You get a required semester of economic analysis applied to business decisions…and that’s it for the baseline experience. If you enter the entrepeneurship track you can (but are not required) to choose a couple of electives on the economics of particular industries. You can get a very strong background in finance if you want, which certainly expects and hones proficiency with quantitative problems — but though numbers are involved, as are thoughts about money, the problems considered are not those that lead to a deep, or even a superficial analytical understanding of the kind of problems that MIT’s top-five (some years, top one) econ. department thinks are important.
Take note of a couple of things here: I’m not saying that there is anything wrong with business schools that base their curricula on what their graduates will need to succeed in businesses. Economics as an academic discipline, or even as an applied social science within the wider world is not what managers and entrepeneurs use as primary tools when making decisions on an enterprise or project basis. It’s just a fact: B-schools teach managerial skills and the methods useful in some fairly well defined fields, consulting, management, and finance, for the most part. Economists do something quite different, and the knowledge and methods needed to do that work are taught at a different place in the academy. Fine so far.
But the punchline for this story is that Megan McArdle in fact knows very little — not nothing, but not much either — of the formal apparatus of modern economic thought, nor of the rich bodies of content knowledge real economists have developed on a number of important questions, including, most important for the present discussion, medical economics and political economy.
Which brings me back to my headline. I don’t read McArdle much because I know she doesn’t know what she’s talking about, and the glibness of her ignorance and the infantile quality of her ideology (that brand of libertarianism present in populations that include my nine-year-old and that can be summed up “you can’t tell me what to do”) piss me off. Why read annoying, uninformed –if glibly written — dreck?
Well, if I must, I must, and so I did.
Now, the reviews are already coming in on this essential wisdom, and they ain’t charitable. I’m not going to take the time here to piece together the complete takedown that she deserves, but I’d like to take a few quotes and hold them up to the light.
I’ve got a bunch of reviews of Newton and the Counterfeiter to acknowledge, but as I’m in the depths of packing up my home of fifteen years and can’t string more than one or two sentences together at a time, let me just here point you to one that popped up yesterday that is sweet on several levels. (I’ll try to round up the rest, several of them more than generous later tonight or tomorrow, but I’m painfully aware that all blog promises I’ve made I’ve broken.)
This one though has got to get a mention before my dwindling number of neurons collapses all review-links into one great heap. Why?
Well, first, because of this conclusion:
Down to the apostrophes from Newton’s pen, it’s a real-life thriller you don’t need to be a history-buff to appreciate.
And second, because it comes within MIT Science Writing grad student Genevieve Wanucha’s first NPR.org bylined article.
No logrolling here, I promise — I had no warning that this review was in prospect, and Genevieve was a writer of great talent and greater soft-spoken ferocity; there is no chance that she would praise that which she did not admire. I’ve seen her in action, and I know that if she likes Newton and the Counterfeiter I may breathe a sigh of relief as well as gratitude.
And whatever she thought of my book or the others she reviewed in this piece, there is this unvarnished pleasure: seeing a good young writer start to break out into the public arena. Watch for her.
Image: Woodcut from the title page of Wenceslaus Brack: Vocabularius rerum, 1487.