randform

Sometimes it happens that someone says to you something occasionally – like as a side remark, but that that phrase – despite its parenthetical nature – sticks in your head. Something similar to this happened to me when an intern at a german company where I was also as a student intern said to me: Nadja – one should buy shares only with gratuitous money, never with money that one needs. Maybe this phrase stuck in my head because this person was one of the very few persons in my surroundings which knew something about the stock market, who knows. However bank accountants and other financial consultants kept telling me to care for my retirement by investing in all sorts of bonds. In view of this discrepancy of recommendations and out of curiosity I thus took part in an online game which was organized by a german public TV station (If I remember correctly WISO, ZDF).

In this game one started with a fixed virtual start amount of money which could be virtually invested in real stocks at real prices. Despite that this “stock market” was only a game it nevertheless became quite captivating. I learned a lot in this game, like that it is rather difficult to have high returns on short term investments a.s.o At the end the game became quite time consuming though. But as a result I decided to follow the advice of the person from the internship which was sound. I never owned a bond.

But this little adventure in financial markets taught me more. It made me clear that the feature of “surplus” or “gratuitous money” is quite essential. Or in other words the often proclaimed view that financial markets are democratic and open to everybody seems to be more informed by concrete interests (like to sell financial packages to laypersons) than by actual facts.

Further deduction allows to say in a simplified manner that there are the following ways to become rich (we leave marriage and adoption out): that is either by being able to “sell” highly demanded goods (like done by hollywood actors, exceptional artists, rags to riches etc.) or via owning a surplus and letting the “money work” with high returns and/or a combination of the two. Lotto wins etc. are the exception to this rule. Lets consider criminal activities also as an exception.

It is interesting to observe that the first kind, i.e. the “self-made” riches are rather accepted while the latter the “undeserved”, “lazy” riches are seen more critically. This holds especially true for the recent protagonists of the financial crisis who still – despite their obvious failures demand more returns and/or boni than what is commonly regarded as appropriate.

However it is undenied that surplusses and the rather decentralized investment of surplusses is somewhat necessary in a technological society.

High risk investments carry a high risk of failure and thus they usually carry a high risk of personal loss, so it makes sense that high risk investments usually result in higher returns than low risk investments, in order to encourage them. However meanwhile a lot of returns in the banking businesses are exorbitantly high even without any personal risk at all. Without exagerating it can be said that the whole regulating mechanism of return vs. risk seems to be out of control – at least in the banking business.

In short –it seems that the question of how to deal with surplusses and the “return of investments” is a rather crucial point in any economic discussion.

In particular, apart from the disastrous performance of the banking business, it can be said that “capitalism” hasn’t given a satisfying answer to the question of how to encourage investments into ventures with from the outset low return or even with from the outset no return at all, despite the fact that these investments are often crucial for technological and societal developments. In my eyes this is a major flaw of “capitalism” or however you wanna call the current system.

Considering the above observations I thus started to think about: How could this flaw be mitigated ? and: How can one come up with something?

Inspired by the above described game and also by games like the Sims which usually mimick a real world in a virtual environment (and where the gameplay is supported by the fact that people like to “train” for the real world) I asked myself to what extent a “new investment system” could be implemented in a game in order to test such a system for the real world. One knows that such “experiments” have limited capabilities of providing real life evidences, however they may be not completely useless. At least it seems that the new possibilities in times of MMPORGS havent been fully explored in economic science.

My question turned thus into: “How can one set up an investment scheme (in a game like environment) which encourages investments into ventures with from the outset low return or even no return?”

Assume we have a kind of Sims game that is sort of a real life economic scenario. Could it be supplied with a different system of money distribution and storage than with the usual banking and economical scheme, in particular the system should be able to encourage investments into ventures with no return, but which are desired for technological and societal reasons? If yes – What could be possible? What can one think of?

Here – a very incomplete and rough (and probably not working) scheme as a start, which is mainly intended to encourage brainstorming about these issues rather than provide a solution.

Starting from the crucial point that surplusses are needed for investments, lets assume there exists a certain amount of surplus. In the game that surplus is just a fixed start amount of extra money. In reality and within a country one could find such a surplus in all assets which are not unconditionally needed for covering the running costs. Its a debatable point what these are, but in richer countries one can find a surplus. Or coltishly put: Schloss Neuschwanstein could a priori be liquidized. In some sense a countries surplus is an indicator of how a country florishes. If there is no surplus and if even running costs cant be covered a country is usually considered to be bankrupt.

Now a surplus could be in total centrally distributed by a government. However similar real life experiments like in a centrally planned economy showed that this was economically less successful. Nevertheless it is meanwhile also rather undisputed that governments or other societal institutions should be able to exert an influence on the distribution of surplusses.

Hence lets e.g. assume that the given surplus is evenly distributed among the participants (in order to give the most democratic chance of investment and in order to mitigate the problem of lazy riches).

Impose the rule that any personal surplus has to be spend within a short time span into various (short and long term) investments (so money has to be invested). The investments have to promise “benefits” that is either one can collect benificiary points (being e.g. issued by societal institutions prior to investment) for investments into ventures with low or no return or one can collect money returns. For the work which is related to the distribution of the surplus each participant gets a “wage” which can be used for one’s own consumption. The wage is dependend on the success of the investments. If an investment yields no return or no beneficiary points or worse if even the investment is lost then the participant is “punished”. E.g. in the worst case that is if the whole surplus is lost then the participant is punished with “getting no wage from surplus”. The actual size and dependency of the wage with respect to the earned returns and/or beneficiary points is thus an important parameter.

All made returns and beneficiary points enter the personal surplus and have to be reinvested. A venture may store collected investment and eventually issue interests until the needed lump sum is collected that would accomodate for the storage effect of banks.

It may be also be good to allow only for investments which are not ones own investments. This would e.g. encourage long-term investments, since the surplus could anyways not be spend on ones own projects and thus accomodate at least partially for the intermediation function of banks.

Note that the distribution of beneficiary points is also an important parameter. (please see also this randform post about assigning values) In particular beneficiary points may be distributed to such different things as newcomer bands, extraordinary social activities/aid or research in quantum gravity.

In a comment about a recent study whose neutrality was not so clear I was asked by a reader:

If there is all this data as you say on the internet then why do you need this reputation thing at all, i mean can’t you just check wether this Greiser person is right?

The study which the reader meant to be checked used data about leukemia occurences in children who lived in the vicinity of a nuclear power plant. This data was -to a great extend- gathered together via the internet and was then statistically evaluated. So the reader assumed that -given that all the necessary information is available- that one could just check wether the study is right.

My answer:
In principle -given that all information is provided in the study- and – given that oneself can access all data (this is unfortunately not always that easy) one can check wether all the in the study given data was correctly evaluated, one can follow the statistic reasoning and the methods which were used a.s.o. The question wether the study is correct or not should thus not be expected to be answered plainly with a yes or no, but at least include explanations about the involved methodology. All that takes a lot of knowledge and experience which is -for an outsider- not so easy to acquire. That is even though I am a mathematician it would take me probably quite some time to understand and evaluate the involved reasoning (it is not exactly my field), it is quite likely that I would end up with open questions and thus would need to consult other people.

One can compare this a little bit with a medical diagnosis, that is in principle all the medical information is available in text books, articles etc. and without having studied medicine one can have a “feeling” about how correct a diagnosis is, however – depending on the symptoms and ones own knowledge- people usually prefer to see a doctor instead of feeling inclined to cure themselves. The craftmanship of a mathematician -although this may not be so obvious- is comparable to that of a physician.

Nevertheless it happens that people won’t go see a doctor. This may happen because people can’t afford to pay a doctor and/or because they are convinced that their methods (or those of a non-medical-doctor) are better. And there are indeed cases were non-doctors may have better results. Nevertheless the typical scenario is that a learned doctor knows more and can help you better than a non-doctor. This holds also true for “crowd knowledge” that is you may ask around in fora about what to do with what symptoms, but typically you wouldnt like to rely on them completely.

Here one should note an important feature: Among others a doctor is someone who was evaluated by a certain group of people who know the subject. That is professional organisations, universities etc. hand out certificates which should give you some trust that this person knows what he/she is saying and doing. This is mostly what reputation is about. It is a guideline. Or put differently: Given a specified task the chance that you will end up with a completely incapable person which had been certified for this task by a respectable institution should be smaller than the chance that an uncertified person is incapable. This doesnt exclude the case that there are uncertified persons with a better knowledge than certified ones. This is just -at the moment- on average less likely.

I wrote “at the moment”, because there are unfortunately tendencies which dilute this rather helpful feature, as can be seen e.g. in the certification problem in the already mentioned outsourced learning environments/online classes. Certification problems can also be found in “cheap education” e.g. by certifying large amounts of students, which makes cheating easier (for example by handing in essays, which were not authored by oneself), academic misconduct and/or corruption e.g. due to financial interests etc. Moreover the possibilities for free autonomous learning are much, much better than before (which is good), so the number of highly trained individuals without a certificate are most probably on the rise. Traditional systems of evaluation may thus be loosing their influence. Personal recomendations would thus become more important, which makes it on the other hand harder to enter a foreign field as an outsider.

The above (unemployed) patient in the foto had a bad bike accident, which resulted unfortunately not only in a torn muscle. Thanks to a “still” rather good medical care in Germany within one week and with the help of several specialists and MRI a not so common injury could be diagnostized fastly and within 2 months the patient should be able to walk properly again….

Why do I write “still”?

Because in Germany the costs for health care are on the rise. This is not only due to an aging population but also to a great extend due to rising costs for pharmaceutical products, where new, patented products play a major role. According to this article in Berliner Zeitung on total the costs for physicians in Germany are meanwhile smaller than the costs for pharmaceutical products. Nevertheless suggestions of politicians which are about to form Germanys new government suggest to cut down on health care on the whole and instead secure a socalled “basic care” for the masses which could be supplemented by additional care – if you have the money. As a result the stockmarket for certain pharmaceutical companies soared right after the elections.

historical reading: -> hippocratic oath

There had been some uproar in mediascape-Germany about a study with the title “Konzept für ein integriertes Energieforschungsprogramm für Deutschland” (“Concept for an integrated energy-research program for Germany”). According to Financial times Deutschland” (FTD) the study was commissioned by the Federal Ministry of Education and Research however the study had been withheld from the public for 3 months.

The study is now -after the uproar- openly available. The reasons for the ministries policy of secrecy gave of course way to speculations in the press. So among others the study suggests that besides studying halite rock formations as a suitable geological formation for a final nuclear dump site, like the one in Gorleben it is meanwhile scientifically established that also Claystone formations may provide an alternative for a final nuclear waste repository. Since most of these rock formations can (according to FTD) be found in the current ministers “electoral homeland” Baden-Würtemberg and since the german elections will take place in about one and a half weeks it is understandable that the press identified this fact as a possible reason for the withheld (i.e. nobody wants a nuclear dump site in ones own backyard).

Another possible reason why the study was withheld was seen in the fact that the study suggests that an enforced research in nuclear power generation – and in particular in new nuclear fission technology could be a politically desired pathway in energy research (note the subtlety: the study does not suggest to pursue enforced research in nuclear energy, but states that enforced research in nuclear energy, in particular in new reactor types, may be a political request). This is in contrast to the current official political line of the minister and chancelor Angela Merkels party the CDU. Their official line (towards voters) is basically that power genration via nuclear fission should play NO role in Germanys future energy generation.

I have unfortunately currently not the time to study the study in full detail but nevertheless – here are some remarks to the study:

The study was made under the auspices of two german science/humanities academies, namely the National academy of science and the Berlin-Brandenburg Academy of Sciences and Humanities a third collaborator was the German Academy of Science and Engineering (Acatech), which claims itself to be a non profit agency, which represents the interests of German sciences and technology. Acatech has a strong connection to business, last but not least via funding. This has advantages and disadvantages.

Responsible for the text of the study are Prof. Dr. Frank Behrendt (Institut für Energietechnik, TU Berlin), Prof. Dr. Ortwin Renn (Abteilung für Technik – und Umweltsoziologie, Universität Stuttgart), Prof. Dr. Ferdi Schüth (Max- Planck-Institut für Kohlenforschung, Mülheim/Ruhr) and Prof. Dr. Eberhard Umbach (Forschungszentrum Karlsruhe), however the study encompasses contributions from numerous individuals (p.58 of the study) which are researchers from universities but also representatives of companies such as Siemens. As a remark: the company Siemens seems to intent to terminate its engagement within the french nuclear company AREVA, however according to this article it may replace its french engagement with a cooperation with the russian nuclear company Atomenergoprom. This should put the neutrality at least of parts of the study -namely those concerning nuclear power generation- under scrutiny.

A main argument of the study is that the challenges of Germany’s future power generation can only be dealt with in a – what the authors call- “systemic perspective” that is with an approach which integrates not only the scientific and technological demands of power generation but also the juridicial, sociological etc. aspects which are connected with it. The arguments are similar to the IPCC conclusions. For accomplishing this integration approach the study suggests among others to establish energy research clusters (similar to the US american Energy Frontier Research Center (EFRC), public-private partnerships like the british Energy Technologies Institute (ETI) and one central german energy research center which bundles the research activity and which serves as an outside representative for Germany’s energy research. The tasks and concrete realizations of such a center havent been yet not very much specified, however integrating and coordinating energy research is in my opinion definitely sound.

Moreover the study collects “no-regret” research options, like research in insulation improvements, energy efficiency, research in how necessary behavioural changes may be adressed appropriately, in how international agreements could be furthered etc. At this place I would have liked to see a stronger discussion of the problems related to patents/intellectual property rights obstructing technological development and international agreement processes.

Within the technological component the study identifies three main research sectors according to which politics can choose to put emphasis on. These are: regenerative energies, carbon based energies and finally -although as pointed out above there is currently no official political backing for this- nuclear energy. The technological aspects of each sector are introduced in the study in a socalled module.

I’d like to concentrate a bit on the nuclear energy module, since the text of the nuclear energy module is mildly put indeed controversial.

As already indicated the aspect that nuclear fission research may be pursued only with the goal of securing its safe pullback (which is the official political line!) is just a little side remark in the text.

In particular it is argued that in order to keep a fall back option on nuclear (fission) energy, Germany could feel strongly advised to support research in new fission technology and thus could feel the need to support the development of fast breeders and in particular in 4’th generation reactorsystems:

Deutschland kann sich aufgrund seiner Expertise hier an vorderster Stelle beteiligen, um unter anderem höchste Sicherheitsstandards zu etablieren.

(translation without guarantee: Germany may – based on its expertise – take part in this in the front row in order to establish among others highest security standards.)

The option that a fallback option on nuclear fission technology could also exist without a german research effort or accomplished with just a small german contribution like within an international noncommercially oriented community research project (my favoured option) is not mentioned.

The study mentions the necessity to keep a fallback option on nuclear fission due to the reason that climate change could have more dramatic consequences than expected, this was also annotated in an earlier randform post.

However the study suggests that such a fallback option may also be justified by the strong pressure which may be due to an international renaissance of nuclear fission technology and which may be due to raising energy needs (p.15) especially in regard to financial feasibility (p.12).

Yet the most problematic part of the nuclear module was the sentence:

“Außerdem müssen bei einer Wiederaufnahme der Forschungsarbeiten zu neuen Reaktoren bereits frühzeitig Ansätze entwickelt werden, mittels derer die Technologie gegebenenfalls umgesetzt werden könnte, ohne Widerständen zu begegnen oder – für den Fall, das dies nicht möglich ist – mit diesen Widerständen konstruktiv umzugehen.”

(translation without guarantee: Furthermore in case of a resumption of the research efforts concerning new reactor types one has to develop at an early stage approaches with which the technology could be realized without encountering resistance or – if this is not possible – develop approaches on how to deal with this resistances in a constructive way.)

I hope this sentence was a very unfortunate phrasing accident and that the authors do not really mean what they write here.

Just a quick link to an interesting article in the Washington monthly about possible future developments within the US and other high-tuition-dependent-educational systems ->College for $99 a Month

very, very short summary: the article explains that cheap online education (eventually outsourced to India etc.) may lure college students into taking standard classes in the internet instead of in a typical college. This development could be accelerated due to the economic crisis. Standard courses usually “nurture” the more specialized classes, hence it can be feared that the overall quality may suffer from this.

graphics looking as from cellular automata (game of life?) and fluids in a psychadelic 1970 animation by Schwartz and Knowlton.
via dataisnoture

Just a little report from our move back to Berlin where I was driving a little truck.

60km before the city of Leipzig the truck needed to get some fuel. It turned out that the trucks fuel cap was broken. In several calls to the car rental company (always hanging in waiting loops, so that I had to reload my cellular phone in between) I could convince them that I was not too stupid to manage with a fuel cap, because otherwise the filling station attendent would have been too, moreover I could convince them to send a service technician. Luckily the service technician was able to put on a new cap, so that it was possible to move on. He was friendly and said I should ask for a compensation. Altogether I was hanging out alone about 2 and a half hours on that service station before Leipzig (see below images) and thus when arriving in Berlin it was all too late and dark for deloading.

(more…)

Sorry for the retarded blogging. We are moving again. So I have to think about what to do with the furneture and other unpleasant things. I am moving fully back to Berlin – the city with international flair, Tim will commute. The search for schools in Berlin was sort of similar to this one. Here some examples:

Sehr geehrte Frau Kutz,
sehr geehrter Herr Hoffmann,

Entschuldugung für die späte Antwort.
Zum jetzigen Zeitpunkt sieht es leider so aus, dass kein Platz frei werden wird.

Wir können Ihr——- nur auf unsere Warteliste setzen, wenn Sie dies
wünschen. Dafür müssten Sie uns dann allerdings noch Unterlagen
(Zeugniskopie, Informationen über die ——- Vorbildung) schicken.

Mit freundlichen Grüßen
Im Auftrag

Sehr geehrte Frau Kutz,
sehr geehrter Herr Hoffmann,

nach Prüfung der Platzkapazität in den jetzigen 5. Klassen muss ich Ihnen leider mitteilen, dass ich Ihnen keine Zusage zur Aufnahme Ihr—– geben kann. Auf der Warteliste für die zukünftige 6. Klasse erhält —— die Wartenummer “2”.
Zur Vervollständigung der Unterlagen benötige ich noch eine *Kopie des Halbjahreszeugnisses 5.Klasse*.
Zur Information für Sie möchte ich Ihnen noch mitteilen, dass …..

Our friend Sophie Molholm coorganized recently a conference in multisensory research. Looking at the conference announcement I felt inspired to ask myself again to what extend rational cognitive instances do influence perception. An example: A traffic light in the western world is usually considered to have the colors red-yellow-green (or at least red and green (although the new LED lights look kind of bluish)). However I think it is important to note that in japaneese the green color for a traffic light – is not “MIDORI” (green), but “AOUI”, which is BLU! Did this make japanese people more prone to call something green-bluish “blue” instead of green? Doing experiments for this example might be difficult due to the ethnic pecularities, but I am sure there exist other examples and probably even studies on that subject.

here a little collection of randform posts related to the subject:

naming-gaming: evolution of languages
wirepullers: artwork challenging salience
manicone: artwork challenging 4 dimensional space perception
focus and context, part I: evolution and knowledge formation
focus and context, part IV: A Physicist Experiments With Cultural Studies: knowledge formation in humanities vs natural sciences
Le manoir du diable: conscientious coloring of astronomical data
common sense: designing computer minds at media lab
canny skinny skin scans perception and quantum computing (see also focus and context, part IIa: A quantum computation game)
error incognito:perception and space
Dreammachine: psychadelic effects in neuroscience
uncanny paintings: link to an experiment using facial expressions as a feedback interface for a painterly rendering algorithm
visualizing meaning: link to a survey concerning the usefulness of diagrams and charts in knowledge building (and a funny comment to that)

(old GDR advertisement of the electrical engineering industry)

There was a longer discussion on that randform post about oppression in the GDR. Within the discussion a randform reader called Ditta found my opinion that “part of all that huge mess of a wall through the streets of Berlin was plain economic warfare” absurd. This is still my opinion: there were surely people running away from East Germany for pure political reasons, but I dare say that a not to small part left for economical reasons. Moreover this reasoning doesnt justify the wall, I think it is clear that the wall was an inhuman mistake. The discussion just sheds a different light on the involved motivations.

I currently have not the time to discuss this in detail and since this is a different thread I hereby link to the comment which led to Ditta’s reaction and ask people who wish to discuss this issue to leave their comments here at this thread.

Blogwise – I am currently preparing a blog entry, which takes more time than I would have suspected…in particular I am not on vacation.