An Autonomous Agent

exploring the noosphere

Category: thoughts (Page 7 of 7)

The Future Materials of Earth’s Life-Forms

In Investigations, Stuart Kauffman writes about the adjacent possible. While reading this section I couldn’t help but wonder whether the idea of pollution needed revision. For example, imagine 700 million years into the future and the organisms which may exist. At this time the adjacent possible will have explored one long path in the space of possible paths. I think it would be extremely likely for there to be life forms which incorporate materials which humans have deemed “pollution.” Fish or insects may roam the planet with polyethylene skin or shells. Or imagine a creature with a defense mechanism made of concrete or steel, much like an ankylosaurus — but with a concrete ball at the end of its tail, instead of a calcium bone. I can envision such possibilities  but could they actually occur? As long as materials like concrete, polyethylene, or steel ended up in the food supply, I think this is a potential outcome of evolution.
Thus, are the materials we consider pollution a bad thing for the environment? Because in the future they could be a valuable resource for an organism. Certainly these materials may be toxic to modern life-forms, but what about evolution. Polyethylene never existed in the universe before and neither did concrete, steel and many other materials created by man.
Maybe the young parts of the universe, like the outer arms of spiral galaxies, look at the old galactic center and think “wow! look at all the pollution in the center of the galaxy. There is so much carbon, copper, iron, and oxygen which react with our precious hydrogen.” In other words, pollution is only relative.

Can a Stock Market Crash be Avoided? Can the Collapse of Society be Avoided?

The idea in Why Stock Markets Crash is that there exists a critical point which represents the boundary between two regimes. The entire stock market exists as numerous agents whose decisions are not independent.  These agents are in a state of disorder under “normal” trading conditions, thus creating return distributions which are normally distributed. As time progresses the market rises and the agents begin to enter a state bordering disorder and order.  While in this state, the market attitudes of the agents can be abstracted to fractal islands just like the Ising model when close to criticality; in this state, attitudes are able to percolate through various hierarchies and organizations. I have left out many details, but the general concept is that once the market reaches this state, the probability for a crash becomes large; in other words, a crash is the result of instabilities caused by agents reaching a critical state.
Ising model representing attitudes of agents
My question is this: If market agents realize the instability and expect a crash, will the crash be avoided?
Perhaps there exists a critical proportion of agents who must expect the crash for it to be avoided. If a small number of agents expect the crash, then it will still occur. If more than the critical number of agents expect the crash, it will be avoided. But, if so many agents share the same attitude, doesn’t that make  the market even more unstable? With all this order, there will be opportunities for arbitrage. As attitudes flip-flop and cascade through the system, this arbitrage opportunity will occur again and again; faster and faster; this creates the observed log-periodic oscillations. Eventually, the crash occurs. My conclusion seems to be that a crash can not be avoided.
Figure and Ground
People say that in reality there is no arbitrage. They believe that any pattern which arises will be quickly removed. BUT, isn’t the removal of a pattern a pattern itself? Perhaps similar to Hofstadter’s Figure and Ground? Caution: some Grounds are not themselves Figures. I believe that the ideas presented by Sornette may be the pattern of pattern removal. Perhaps there can be strategies based on the removal of a pattern, which is based on the removal of a different pattern… and so forth.
The potential for crash prevention has applications in societal collapse. My intuition tells me that the two are related. If we can answer the question: Can we prevent the crash of a market? Then we will know the answer to the question: Can we prevent the collapse of a society? To me this seems deeply connected with Isaac Asimov’s Foundation Series. In this series Hari Seldon develops psychohistory (from Wikipedia):

Using the laws of mass action, it can predict the future, but only on a large scale; it is error-prone on a small scale. It works on the principle that the behaviour of a mass of people is predictable if the quantity of this mass is very large (equal to the population of the galaxy, which has a population of quadrillions of humans, inhabiting millions of star systems). The larger the number, the more predictable is the future.

It seems that Asimov is once again ahead of his time!

Natural Resource Depletion – Solution: Algae Oil and Water Cavitation

I recently read Phase Transitions, by Ricard Sole. The last chapter talks about societal collapse due to resource depletion. Under some assumptions, modelling the per capita consumption rate of natural resources shows that there exists a phase transition between stability and collapse. In other words, a gradual increase in the per capita consumption rate (or an increase in population, given a fixed per capita consumption rate) will result in a sudden and extreme phase shift — from stability to instability, i.e. collapse.
Interestingly, the book Why Stock Markets Crash, by Didier Sornette, mentions the same phase transition, or critical point as he refers to it, occurring due to an increasing rate of population growth and dependence upon technology. The rate of population growth implies the occurrence of a finite time singularity. Upon reaching this critical point, a change from one regime into another will occur. What this change will be is unknown.
There have been numerous large civilizations of the past whose existence was relatively brief on the face of the Earth. Will modern civilization have the same fate? These two books suggest an impending change. However, there is a chance that this time could be different. No other society in history has been able to predict its own demise. Is this the key? The knowledge of one’s own collapse could be sufficient to prevent it.
I believe to at least postpone the arrival of this phase transition requires only that we have a full dependence on renewable resources and find a revolutionary way to produce and distribute fresh water. Once these are accomplished, other issues which could lead to collapse can be fixed in due time.
Surprisingly, there already exist potential solutions which I believe can solve the problem: Algae Oil and Water Cavitation. Growing algae in deserts near the ocean seems like a terrific idea for generating fuel. Not to mention the fact that the algae remove CO2 from the air. However, I can foresee that this could actually create a problem, since too little CO2 in the atmosphere is also a problem.
Water Cavitation, as mentioned in the link above, provides a reliable mechanism for removing chemicals and organisms from water. A perfect source of clean, fresh water for the world. However, there still exists the problem of water availability. Perhaps there are good ideas for this, I am not sure.

An Organization which Creates a Market for Clean Air

This post is a sequel to a previous story.

Warren, Ben, David, and Taylor meet again.  This time they are violently coughing.

Ben: Why is the air is so dirty?

Taylor: Yes, I can hardly see more than a mile through the pollution.

David: It’s sad that we have done this to our once beautiful city. Will we ever be able to clean the air?

Ben: Not sure, perhaps Warren has another great idea?

Warren: I have an idea, but I am not sure if it will work. More of hypothesis really…

David: Any idea is a good idea in these depressing times.

Taylor: Please tell us your idea Warren.

Warren: Well, it’s similar to that idea I had along time ago about pieces of the paper.

Ben: Yes! How could we forget, that idea made us very rich!

David: Make pieces of paper to clean air?

Taylor: I don’t see the point yet, but please continue.

Warren: Just think of these figures — the average human lives 67 years; this person will inhale about 11,000 to 14,000 liters of air each day; thus, in a life-time a person will inhale about 6.5 billion liters of air.

David: Wow! that seems like an enormous quantity of air.

Warren: It’s about the volume of 2,600 Olympic-size swimming pools.

Taylor: Remarkable when you put it into perspective.

Ben: What do these figures mean?

Warren: Ah, well they provide an upper estimate on the volume of air a person needs to live for a life-time. Now, we can place a value on clean-air.

Ben: With pieces of paper?

Warren: Yes, exactly.

David: Each piece of paper could be worth a life-time of clean air?

Taylor: Interesting…

Warren: Sounds like a good idea, right?

Ben: I think so, but there are some issues with this idea.

Warren: Please explain.

Ben: Well, what if a person does not own one of these pieces of paper? Do they not get to breathe? It does not seem possible to force people to buy these papers.

Warren: I would never allow that to happen! Rather, these pieces of paper are only theoretical rights to clean air. Much like the idea of paper representing the value of a company. The paper only obtains value through trading in a market.

David: I see! Through the complex interaction of market agents we will be able to establish the value of clean air.

Taylor: Not to mention the money we will intially raise by selling these pieces of paper.

Ben: Just like Warren’s other idea!

David: Ironically, people would expect the value to increase as pollution gets worse.

Warren: And, as the value increases, a larger amount of money can be raised by additional issuance of these papers. With this money we could develop sophisticated clean air technologies.

David: If the technologies work then the value of the papers should decrease.

Warren: True.

Ben: I like the idea. But I feel it would not work. An international organization would have to be responsible for issuing these pieces of paper; the organization’s sole purpose would be to clean and reduce pollution. And, as we know from history, corruption is always a problem.

Taylor: I agree. If the people running the organization don’t spend the money properly, the whole idea will crumble.

Warren: Well, like I said before, I am not sure if the idea will work.

David: I think it’s at least worth a try.

Ben: Agreed!

Taylor: So… how do we get this idea off the ground?

The Creation of Stocks

Warren, Ben, David, and Taylor are four friends who meet on weekends to discuss various ideas and have a good time. They are together one night and begin discussing a business venture.

Warren: I know a great idea!

Ben: Sure, tell us another one of your “great” ideas. I hope this one is better than that silly farming device.

David: Alright, let Warren indulge us.

Warren: Ok… so, what if we printed pieces of paper and told people that they were worth the value of a certain company?

Taylor: Is that your idea? Hahahaha, what could that possibly achieve? I am leaving.

Warren: No, wait! Just think about it. If we printed a fixed number of these papers and said that the sum of the them are worth the value of the company, then we could sell them for that value to people.

Ben: Yes, but what fool would fall for such an obvious scam.

Taylor: What value? How can pieces of paper be worth more than paper? How can we claim that they are worth the value of a certain company?

David: You know, I think Warren has a point. All we have to do is sound reputable and create a way for these pieces of paper to be traded.

Warren: See! David is following me!

David: If this were a scam, we would just sell the papers and run off with the money.

Ben: But isn’t that your plan?

Warren: Hmm… True. But in this case, the people are able to trade with each other to get their money back and possibly a profit.

Ben: In fact the potential for a profit would be the only reason for buying these pieces of paper.

Taylor: Hahahah, so this is a giant Ponzi Scheme?

David: Yes, it does seem so, now that you mention it.

Warren: No, there is a difference. We will simply be selling pieces of paper. The “Ponzi Scheme” that Taylor mentioned would be caused by the infinite self-repeating pattern of people buying the paper from each other and then selling it to other people for a return.

David: That is a very strange concept. Kinda like a strange loop.

Ben: Ok, but wouldn’t each person value the pieces of paper differently, based on their opinion on the value of the company?

Taylor: Yes, person Expensive may be willing to pay ten the piece of paper; while person Cheap may only pay ten for the same piece of paper.

David: Then this is idea is doomed. It will never work.

Ben: Too much chaos!

Warren: No! Someone, perhaps seeing an opportunity to profit will establish a definite lower bound to the value of the piece of paper. Let’s say that lower bound is ten; i.e., there is a person who believes that he can buy a piece of paper for ten and, at a later date, sell it to people for more than ten.

David: Ok. I follow.

Warren: Then, someone else, seeing that there is a potential to make money, will offer 12 for the piece of paper.

Ben: AHH! Yes, a price will dynamically form based on the interactions of all these people.

Taylor: And then?!?!

Warren: Well, then we have a way to sell these pieces of paper for more than the value of paper?

Ben: Yes, precisely.

David: So, by simply saying we have pieces of paper which represent the value of a company we have made a handsome profit?

Warren: Exactly!

Ben: And, in the process we have discovered a way to find the value of a company!

Taylor: Wow! I must say Warren, this is a brilliant idea!

David: What will we do will all this money?

Warren: I think I will buy some of these pieces of paper.

Ben: Me too! And make even more money!

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