NOW REPORTING FROM BALTIMORE. An eclectic, iconoclastic, independent, private, non-commercial blog begun in 2010 in support of the federal Meaningful Use REC initiative, and Health IT and Heathcare improvement more broadly. Moving now toward important broader STEM and societal/ethics topics. Formerly known as "The REC Blog." Best viewed with Safari, FireFox, or Chrome.
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SBF on the SDNY witness stand testifying in his own defense in his FTX fraud trial.
"The biggest mistake was we did not have a dedicated risk management team, we didn't have a chief risk officer. We had a number of people who were involved to some extent in managing risk, but no one dedicated to it, and there were significant oversights."
Right. Understatement of the century thus far.
I know a thing or two about financial risk management—back in the days of actual money. From my 2008 post Tranche Warfare:
"THE BEST THINGS IN LIFE ARE'FEE'"
That was the oft-repeated sarcastic and cynical joke in executive circles at the privately held subprime VISA/MC issuer where I worked in risk management. My own initial supervisor, the hastily installed VP of Risk who'd been brought over from Collections, would candidly say in private that according our customers credit was like giving whiskey to alcoholics.
But,hey, it's legal. And, if we don't do it, someone else will.
"Churn & Burn"
I was hired initially in March of 2000 as a temp tech writer brought in to compose documentation for a pendingOCCexamination, and subsequently offered a permanent position as a "risk analyst" once they learned of my applied stats background and SAS programming fluency. When I arrived the operation was classic subprime "churn & burn," bordering on the "predatory" (some would say they'd crossed far over that border). Huge upfront and ongoing transaction fees charged to the financially desperate made it nearly impossible to lose money, heavy charge-off losses notwithstanding. Burn 'em up and churn new accounts.
At the outset of my tenure, the "Risk Department" was one effectively in name only, consisting of two holdovers of the prior risk manager'spro formaregime, one a quite saavy statistician, the other an econometrician -- both of whom had their eyes on the door.
There wasn't much "risk" to manage beyond those posed by nagging class-action litigation and pending consent decrees that were a familiar feature of the subprime domain (and cynically viewed simply as a manageable cost of doing business).
The new VP of Risk, though, set about to build an effective, "best practices" risk department, one eventually staffed by a platoon of astute MBAs and statisticians recruited from far and wide, one whose subprime credit risk modeling and portfolio management and operations analytics became the envy of the sector. The bank's portfolio and profits grew steadily and impressively, and charge-off losses declined impressively. We sailed through our regulatory examinations. The OCC eventually characterized us as "Best-in-Class"[pdf]. While most other subprime players crashed and burned during this period (including the largest issuers such as Providian and NextCard), our little bank had moved away from the reckless and predatory and into "near-prime" marketing territory...
We made successive record profits every year of the five I was there (my annual bonuses were very nice). We had financial risk by the throat. Market risk; interest rate risk; regulatory risk; reputation risk; operations risk; portfolio risk—all involving actual money rather than digital casino zero-sum table games tokens.
"The biggest mistake was we did not have a dedicated risk management team..."
Yeah, bro. In your own too-little-too-late post-crash words, "I fucked up."
BTW: Tangentially off-topic, but still, related to finance. I guess (online sports gaming).
HALLOWEEN DAY UPDATE
I've been following a number of these YouTube crypto podcasts lately. This young woman, Carly Reilly, is interesting. I have no idea as yet as to what her Sheet is.
What an old coot I am. Below, Michael Lewis at the SBF trial.
UPDATE: OF FAR MORE IMPORTANCE
The IDF bombed a northern Gaza refugee neighborhood on October 31st, killing and wounding an as-yet unknown number of Palestinian civilians. Israel claims the target was a senior Hamas commander and his subordinates. The entire apartment neighborhood was reduced to large rubble-strewn craters by a reported six large aircraft-dropped bombs.
Click image.
"...No third party is going to step into Gaza to fight the insurgency planned for Israeli troops, rebuild the infrastructure and society shattered by war, and solve the long-standing problem of governance that Hamas’s armed presence has ensured will endure. Israel is on its own, and so it must find an alternative both to leaving Gaza quickly, thereby allowing Hamas to reemerge, at least as a political entity, and to staying and battling the inevitable insurgency.
Whatever Israel decides to do now that its ground attack in Gaza is under way, it needs to understand that no deus ex machina will swoop in and save it from the accumulated consequences of its actions since 1967. When the smoke clears, yet again, Israel and the Palestinians—and not anyone else—will be left to cope with their self-inflicted disasters."
Sue gets up at 6 a.m. and fills her coffeepot with water to prepare her morning coffee. The water is clean and good because some tree-hugging liberal fought for minimum water-quality standards.
With her first swallow of coffee, she takes her daily medication. Her medications are safe to take because some stupid commie liberal fought to insure their safety and that they work as advertised.
All but $10 of her medications are paid for by her employer's medical plan because some liberal union workers fought their employers for paid medical insurance - now Sue gets it too.
She prepares her morning breakfast, bacon and eggs. Sue's bacon is safe to eat because some girly-man liberal fought for laws to regulate the meat packing industry.
In the shower, Sue reaches for her shampoo. Her bottle is properly labeled with each ingredient and its amount in the total contents because some crybaby liberal fought for her right to know what she was putting on her body and how much it contained.
Sue dresses, walks outside and takes a deep breath. The air she breathes is clean because some environmentalist wacko liberal fought for laws to stop industries from polluting our air.
She walks to the subway station for her government-subsidized ride to work. It saves her considerable money in parking and transportation fees because some fancy-pants liberal fought for affordable public transportation.
Sue begins her work day. She has a good job with excellent pay, medical benefits, retirement, paid holidays and vacation because some lazy liberal union members fought and died for these working standards. Sue's employer pays these standards.
If Sue is hurt on the job or becomes unemployed, she'll get a worker compensation or unemployment check because some stupid liberal didn't think she should lose her home because of her temporary misfortune.
Sue is home from work. She plans to visit her father this evening at his farm home in the country. She gets in her car for the drive. Her car is among the safest in the world because some America-hating liberal fought for car safety standards.
She is happy to see her father, who is now retired. Her father lives on Social Security and a union pension because some wine-drinking, cheese-eating liberal made sure he could take care of himself so Sue wouldn't have to.
Sue gets back in her car for the ride home, and turns on a radio talk show. The radio host keeps saying that liberals are bad and conservatives are good. He doesn't mention that Republicans have fought against every protection and benefit Sue enjoys throughout her day.
Sue agrees: "We don't need those big-government liberals ruining our lives! After all, I'm self-made and believe everyone should take care of themselves, just like I have."
Props to Sonny Vermont for posting this stuff on TwitterX.
A year ago, Sam Bankman-Fried (often called “SBF”) was on top of the world. He had been on the covers of Forbes, which dubbed him “the richest twentysomething in the world”, and Fortune – the equivalent, for a business leader, of a rock star on Rolling Stone, or an athlete on Sports Illustrated.
But in late 2022, his FTX crypto trading operation – and the closely related Alameda Research, an investment fund he had founded before FTX – both collapsed.
Bankman-Fried is currently charged with crimes relating to the disappearance of billions of dollars of FTX users’ money. These people did not think they were investing in FTX, or even lending to it. Their funds were just being kept there while they switched between, for example, dollars and bitcoins or between bitcoins and dogecoins. But instead it is claimed that their funds were transferred to Alameda and then lost.
Bankman-Fried is pleading not guilty and has published a statement reading: “I didn’t steal funds, and I certainly didn’t stash billions away.”
Review: Going Infinite: The Rise and Fall of a New Tycoon – Michael Lewis (Allen Lane)
Bankman-Fried, who was living in the Bahamas at the time of his arrest, now resides in a US prison. He is facing charges that could result in a sentence of more than a century behind bars and has been taunted as “Scam Bankrupt-Fraud”.
His remarkable story has been told by Michael Lewis, the author of Liar’s Poker, a Wall Street story drawing on his own experience as a bond salesman for Salomon Brothers; and the internationally successful book-then-film The Big Short, an account of the financial market shenanigans that led to the global financial crisis of 2007-09.
Lewis, who had extraordinary access to Bankman-Fried while writing, holds the unusual combination of degrees in art history from Princeton and economics from the London School of Economics. As a former bond salesman, he knows his way around financial markets and has seen his share of excess and oversized egos. As a journalist, he is skilled at clear writing about complex finance. He was ideally placed to write this book.
However, he has been widely criticised as too close to his subject. When Bankman-Fried was arrested, Lewis had been shadowing him for nearly a year. And as events unfolded – and even while Bankman-Fried was under house arrest – Lewis was there, taking notes.
Going Infinite derives its title from a question Lewis asked his subject: how much would he need to be paid to sell and walk away from FTX? Bankman-Fried initially replied: $150 billion. He then added he needed “infinite dollars” because he planned to address existential risks facing humanity.
Making the cover of Forbes is the equivalent, for a business leader, of a rock star on Rolling Stone.
This rather grandiose response was based on a concept called “effective altruism”, inspired by a 1971 essay by Australian philosopher Peter Singer.
Lewis’s example is that instead of becoming a doctor in Africa and helping some people, you can make a fortune and then pay for 40 doctors and help 40 times as many people.
Bankman-Fried claimed his motivation for FTX was to fund effective altruism. Some of his senior executives claimed to share this motivation.
Bankman-Fried felt Donald Trump was an impediment to actions that would make the world a better place. He donated to anti-Trump Republicans and to Democrats. One revelation in the book is that Bankman-Fried contemplated paying Trump not to run again for president. The figure mentioned was US$5 billion, but it is not clear whether this number came from Trump himself.
The odd life of Sam Bankman-Fried
Bankman-Fried’s parents are both Stanford professors. But there is no obvious factor in his childhood that explains his eccentricities, or why he seemed to have few friends.
Lewis writes that Bankman-Fried had to teach himself facial expressions, and that Bankman-Fried thought he had “an aching hole in my brain where happiness should be”. He skates over Bankman-Fried’s years as a high school nerd, where the place he most felt a kind of belonging was math camp, and as a MIT physics student. And he concludes that the future crypto king was perfectly positioned, emotionally and intellectually, to make a religion of himself.
One of the most interesting parts of the book is the account of Bankman-Fried’s early career at Jane Street Capital, a Wall Street high-frequency trading firm, where interns were encouraged to gamble with each other and with the full-time employees as a way of developing their professional skills. There, Bankman-Fried’s intuition about probability shone.
The “SBF” who emerges from the book has some similarities with the portrait of Elon Musk in the eponymous just-published biography by Walter Isaacson. Both men are convinced they are the smartest guy in any room they are in. And both have the hubris to think the future of humanity depends on them.
Bankman-Fried reportedly said there was a 5% chance he could become US president. The US constitution meant this was one takeover to which the South Africa-born Musk could not aspire.
Isaacson relates a half-hour telephone discussion between Bankman-Fried and Musk about the latter’s takeover bid for Twitter. After consulting colleagues for 15 minutes, with Lewis present, Bankman-Fried was considering contributing “maybe a billion” as part of a consortium being assembled by Musk. But the discussion did not go well. Both apparently thought the other was crazy.
This Forbes video purports to take readers behind the scenes of FTX in the Bahamas.
FTX was ‘essentially a casino’
So-called “cryptocurrencies”, like Bitcoin, are rarely used for their original stated purpose of making payments. They are really just speculative tokens with no fundamental value.
FTX promoted itself as the equivalent of a stock exchange for these cryptocurrencies.
Lewis writes:
The new crypto exchanges had no regulators. They acted as both exchange and custodian: they didn’t just enable you to buy bitcoin but also housed the bitcoin you’d bought.
FTX was no usual business operation. It was barely a business at all. FTX had no chief financial officer, nor even a list of its staff. It had a sort of board of directors, just for appearances. Bankman-Fried was one director, but in a conversation with Lewis, he could not recall the other two. As Lewis puts it, he “just thought grown-ups were pointless”.
Most of the senior staff at FTX and Alameda were friends of Bankman-Fried (although many have since turned on him, whether from a belated sense of shame or to try to wrangle shorter prison sentences). They lived and worked in a luxury compound in the Bahamas, a sunny place for shady people (as Somerset Maugham once described Monaco).
Apart from the luxury accommodation, there were other extravagances, such as food and chartered planes. Clothes were not one of them. Until his recent court appearances, Bankman-Fried was rarely seen in anything but a t-shirt and shorts - no matter the occasion.
One of his senior employees, Zane Tackett, told Lewis:
His oddness mixed with just how smart he was allowed you to wave away a lot of the concerns. The question of why just goes away.
FTX was essentially a casino. But Bankman-Fried both owned the casino and was gambling in it – apparently with other people’s chips. Alameda Research seemed to be making large bets with money transferred from the accounts of FTX customers.
While Alameda operated in the shadows, huge amounts were spent promoting FTX.
FTX spent tens of millions making an expensive advertisment featuring Larry David comparing crypto to the wheel, democracy and the moon landing. (It has already been screened at the trial.) At least, unlike Katy Perry, Larry can claim that in the advert he was sceptical!
The gag of this expensive ad for FTX, featuring a sceptical Larry David, is now reversed.
After FTX collapsed, John Ray, the bankruptcy expert tasked with sorting out the mess, remarked: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information.” And he had handled Enron!
Accused of having stolen billions
Somewhere between US$5 billion and US$10 billion of customers’ money from FTX seems to have disappeared. Lewis writes that it may have been lost in losing bets by Alameda. Lewis estimates that Bankman-Fried made over 300 separate investments - one every three days. There were certainly some poor investments, such as 101 Bored Ape NFTs, bought for US$24 million. These have lost about 90% of their value.
Bankman-Fried has been accused of having stolen “billions from thousands of people”. His lawyers responded that he is being painted as a “cartoon villian”. A lot will depend on whether the jury regards him as a calculating liar or an idiot savant “math nerd”, hopelessly out of his depth as a manager.
Another interesting aspect yet to emerge is how the top Wall Street and Silicon Valley investors explain their naivety in trusting Bankman-Fried. How do you explain what the Financial Times called the “legend of Sam”?
Michael Lewis has written ‘a letter to the jury’
Lewis seems inclined towards the view Bankman-Fried may not have been deliberately fraudulent. He has spoken of a “mob mentality” and a “very quick rush to judgement”.
Biographers seem to sometimes experience a literary equivalent of the now much-debated “Stockholm syndrome”. If they are embedded with their subject, they may come to share their world view.
Another recent book that profiles Bankman-Fried, Number Go Up by Zeke Faux, paints a similar picture in many ways – but is more sceptical about his motivations.
Faux makes the telling point that many of the punters lured in by the advertisements for FTX lost money they could not afford to lose. This is hardly the act of an altruist. Faux described Lewis as asking his subject questions “so fawning, they seemed inappropriate for a journalist” at an FTX-sponsored conference.
Like Lewis’s other books on financial shenanigans, Going Infinite does a good job of explaining complex financial concepts. And it is an entertaining read about an unusual and intriguing personality. But it does seem like it was rushed out to coincide with the trial. There is no index, for example. It will need a second edition once the current court case is resolved.
“At a military base north of Tel Aviv, the Israel Defense Forces held a grisly matinee screening of 43 minutes of raw footage from Hamas’s October 7 attack. Members of the press were invited, but cameras were not allowed. Hamas had the opposite policy on cameras during the attack, which it documented gleefully with its fighters’ body cams and mobile phones. Some of the clips had been circulating already on social media in truncated or expurgated form, with the footage decorously stopped just before beheadings and moments of death. After having seen them both in raw and trimmed forms, I can endorse the decision to trim those clips. I certainly hope I never see any of the extra footage again.”—Graeme Wood
“What’s already happened has been horrible beyond belief, and what’s coming next will probably be worse.”
Freedom from free will A scientist presents a case for a predetermined future
We all sometimes behave in ways that seem to conflict with our goals and intentions. One person might struggle to resist a favorite comfort food despite knowing that a different option will be more nutritious. Another may repeatedly snooze their alarm and miss their morning workout. Still others may wish to spend more time with family but instead find themselves mindlessly browsing social media. If we only had more willpower, the conventional wisdom goes, we could eat healthier, exercise regularly, and spend more time with loved ones. In Determined: A Science of Life without Free Will, neuroscientist Robert Sapolsky argues that we have no free will and that such choices are thus actually determined by factors beyond our control.
Our genetic and epigenetic makeup, together with environmental and cultural factors, make us who we are and determine how we behave, Sapolsky claims. Whether a person makes it to the gym or opts for a decadent dessert is little more than a function of the architecture of their prefrontal cortex and the neurotransmitters and hormones circulating in their body, all of which in turn are physical manifestations of a person’s genetic inheritance and the environment in which they spent their formative years.
This claim is not new. It is a version of the “consequence argument,” popularized by philosopher Peter van Inwagen in 1983, which states that in a deterministic universe—one where all events are completely determined by an initial state and the laws of nature—all human actions are a consequence of the laws of nature and events in the remote past and are therefore not under our control. Nevertheless, Sapolsky’s coverage of the relevant science is first-rate and very much worth reading...
Sapolsky’s decades of experience studying the effects of the interplay of genes and the environment on behavior shine brightly in these discussions. In particular, he argues against the claim that “luck” evens out over time, with fortune and misfortune striking most people in equal measure over the years, an idea favored by philosopher Daniel Dennett and others. Instead, he provides compelling examples that bad luck compounds, meaning that many who are born “unlucky” have little chance of getting ahead. In later chapters, he convincingly argues against claims that chaos theory, emergent phenomena, or the indeterminism offered by quantum mechanics provide the gap required for free will to exist.
...If we accept that humans are not responsible for their misdeeds, will some of us feel emboldened to behave badly? He thinks not, citing epilepsy as a case in point. Once thought to be the result of demonic possession, it is now understood as a neurological disorder. In addition to leading to the development of effective treatments, this framework helped us to rethink to what degree an individual undergoing an epileptic seizure is responsible for any potential negative outcomes.
Although he is careful not to conflate determinism with the inability to affect change in the world, Sapolsky’s dismissive attitude toward how determinism might be compatible with free will is one of the book’s weak points. Indeed, he sets the bar very high for free will (“Show me a neuron being a causeless cause”). This well-written book is nonetheless worth reading. Better yet, pair it with Kevin Mitchell’s book Free Agents: How Evolution Gave Us Free Will, also publishing in October 2023, which makes the opposite argument, and then decide for yourself whether you had a choice to do so or it was all predetermined.
Eyeball deep in both books. Had not planned on this. I can see right off the bat myriad definitional problems. Not being anywhere close to being the sharpest knife in the drawer, I have way more questions than answers at the moment.
IN TRYING TO SOLVE the terrifying problems that face us in the world today, we naturally turn to the things we do best. We play from strength, and our strength is science and technology. To contain a population explosion we look for better methods of birth control. Threatened by a nuclear holocaust, we build bigger deterrent forces and anti-ballistic-missile systems. We try to stave off world famine with new foods and better ways of growing them. Improved sanitation and medicine will, we hope, control disease, better housing and transportation will solve the problems of the ghettos, and new ways of reducing or disposing of waste will stop the pollution of the environment. We can point to remarkable achievements in all these fields, and it is not surprising that we should try to extend them. But things grow steadily worse, and it is disheartening to find that technology itself is increasingly at fault. Sanitation and medicine have made the problems of population more acute, war has acquired a new horror with the invention of nuclear weapons, and the affluent pursuit of happiness is largely responsible for pollution. As Darlington has said, “Every new source from which man has increased his power on the earth has been used to diminish the prospects of his successors. All his progress has been made at the expense of damage to his environment which he cannot repair and could not foresee.”
Whether or not he could have foreseen the damage, man must repair it or all is lost. And he can do so if he will recognize the nature of the difficulty. The application of the physical and biological sciences alone will not solve our problems because the solutions lie in another field. Better contraceptives will control population only if people use them. New weapons may offset new defenses and vice versa, but a nuclear holocaust can be prevented only if the conditions under which nations make war can be changed. New methods of agriculture and medicine will not help if they are not practiced, and housing is a matter not only of buildings and cities but of how people live. Overcrowding can be corrected only by inducing people not to crowd, and the environment will continue to deteriorate until polluting practices are abandoned.
In short, we need to make vast changes in human behavior, and we cannot make them with the help of nothing more than physics or biology, no matter how hard we try. (And there are other problems, such as the breakdown of our educational system and the disaffection and revolt of the young, to which physical and biological technologies are so obviously irrelevant that they have never been applied.) It is not enough to “use technology with a deeper understanding of human issues,” or to “dedicate technology to man’s spiritual needs,” or to “encourage technologists to look at human problems.” Such expressions imply that where human behavior begins, technology stops, and that we must carry on, as we have in the past, with what we have learned from personal experience or from those collections of personal experiences called history, or with the distillations of experience to be found in folk wisdom and practical rules of thumb. These have been available for centuries, and all we have to show for them is the state of the world today.
What we need is a technology of behavior. We could solve our problems quickly enough if we could adjust the growth of the world’s population as precisely as we adjust the course of a spaceship, or improve agriculture and industry with some of the confidence with which we accelerate high-energy particles, or move toward a peaceful world with something like the steady progress with which physics has approached absolute zero (even though both remain presumably out of reach). But a behavioral technology comparable in power and precision to physical and biological technology is lacking, and those who do not find the very possibility ridiculous are more likely to be frightened by it than reassured. That is how far we are from “understanding human issues” in the sense in which physics and biology understand their fields, and how far we are from preventing the catastrophe toward which the world seems to be inexorably moving…
Burrowed down into both books at the moment, alternating back & forth in fairly lengthy chunks. My Kindle app tells me the Sapolsky book will take me 15 hours, and Mitchell's will consume 9. I can already see a lot of dueling definitional "No True Scotsman" stuff going on. "Depends on what you mean by ____________."
Inevitable, one supposes. ;) arf.
The writing styles are both quite engaging. Sapolsky is by far the funnier of the two. While I'm sure I will find these to have been fully enjoyable and worthy in their own respective rights, I have to wonder to what degrees these will settle much in terms of ethical policy utility.
Inevitable, one supposes? ;) arf.
I must admit to being a bit Pavlovian when it comes to rather reflexively delving into books I encounter via Science Magazine reviews.
Inevitable, one supposes? ;) arf.
A COUPLE OF CITES
WHAT IS CONSCIOUSNESS? Giving this section this ridiculous heading reflects how unenthused I am about having to write this next stretch. I don’t understand what consciousness is, can’t define it. I can’t understand philosophers’ writing about it. Or neuroscientists’, for that matter, unless it’s “consciousness” in the boring neurological sense, like not experiencing consciousness because you’re in a coma.
Nevertheless, consciousness is central to Libet debates, sometimes, in a fairly heavy-handed way. For example, take Mele, in a book whose title trumpets that he’s not pulling any punches—Free: Why Science Hasn’t Disproved Free Will. In its first paragraph, he writes, “There are two main scientific arguments today against the existence of free will.” One arises from social psychologists showing that behavior can be manipulated by factors that we’re not aware of—we’ve seen examples of these. The other is neuroscientists whose “basic claim is that all our decisions are made unconsciously and therefore not freely” (my italics). In other words, that consciousness is just an epiphenomenon, an illusory, reconstructive sense of control irrelevant to our actual behavior. This strikes me as an overly dogmatic way of representing just one of many styles of neuroscientific thought on the subject.
The “ooh, you neuroscientists not only eat your dead but also believe all our decisions are unconscious” nyah-nyah matters, because we shouldn’t be held morally responsible for our unconscious behaviors (although neuroscientist Michael Shadlen of Columbia University, whose excellent research has informed free-will debates, makes a spirited argument along with Roskies that we should be held morally responsible for even our unconscious acts).
Compatibilists trying to fend off the Libetians often make a last stand with consciousness: Okay, okay, suppose that Libet, Haynes, Fried, and so on really have shown that the brain decides something before we have a sense of having consciously and freely done so. Let’s grant the incompatibilists that. But does turning that preconscious decision into actual behavior require that conscious sense of agency? Because if it does, rather than bypassing consciousness as an irrelevancy, free will can’t be ruled out.
As we saw, knowing what a brain’s preconscious decision was moderately predicts whether the behavior will actually occur. But what about the relationship between the preconscious brain’s decision and the sense of conscious agency—is there ever a readiness potential followed by a behavior without a conscious sense of agency coming in between? One cool study done by Dartmouth neuroscientist Thalia Wheatley and collaborators shows precisely this—subjects were hypnotized and implanted with a posthypnotic suggestibility that they make a spontaneous Libet-like movement. In this case, when triggered by the cued suggestion, there’d be a readiness potential and the subsequent movement, without conscious awareness in between. Consciousness is an irrelevant hiccup.
Sure, retort compatibilists, this doesn’t mean that intentional behavior always bypasses consciousness—rejecting free will based on what happens in the posthypnotic brain is kind of flimsy. And there is a higher-order level to this issue, something emphasized by incompatibilist philosopher Gregg Caruso of the State University of New York—you’re playing soccer, you have the ball, and you consciously decide that you are going to try to get past this defender, rather than pass the ball off. In the process of then trying to do this, you make a variety of procedural movements that you’re not consciously choosing; what does it mean that you have made the explicit choice to let a particular implicit process take over? The debate continues, not just over whether the preconscious requires consciousness as a mediating factor but also over whether both can simultaneously cause a behavior.
Amid these arcana, it’s hugely important if the preconscious decision requires consciousness as a mediator. Why? Because during that moment of conscious mediation we should then be expected to be able to veto a decision, prevent it from happening. And you can hang moral responsibility on that…
Sapolsky, Robert M.. Determined (pp. 31-33). Penguin Publishing Group. Kindle Edition. ________
…the sequence of the genome in a lineage comes to reflect information about the environment and the past experiences of the population of organisms in that lineage, both good and bad. For example, imagine a mutation that alters the function of an enzyme, such that the organism can now metabolize a new source of food (say, a different type of sugar). If that type of sugar is available in the environment, then that mutation may be beneficial and selected for. This sequence of DNA persists because it carries information about the environment; namely, that this type of sugar can be found in it.
That same process of adaptation happens across the whole genome, reflecting all kinds of aspects of the life histories of individual organisms in the lineage. And the unsuccessful mutations—the ones that don’t make it through—convey a kind of information too, by their absence. I described the genome as a reference template that carries information about the configuration of all the cell’s biochemical components and processes. In a sense, an abstract model of the cell is encoded in the genome. And by virtue of the optimizing actions of natural selection, the genome also embodies a model of the environment or, more precisely, of the fittedness of the organism to the environment.
This model allows living organisms to use information about the past to predict and anticipate the future—to adapt to the regularities of their environment by embodying useful functions or responses in their own structure. If we want to understand what happens in a biological system at any given instant, this historicity is a key part of the explanation. The sequence of the genome and the resultant structure of the organism right now reflect the configurations of its ancestors and whether those configurations promoted persistence or hastened death. In addition to whatever factors are impinging on an organism at any given instant, there are thus causes at work from the distant past, captured in the sequence of the DNA. In a very important sense, there are also causes from the future.
What’s the Point? The sequence of events described in this chapter might suggest to some a purposive process—as if the point of all that was to generate life. But there’s no reason to assume a purpose. Life reflects an unlikely arrangement of matter, but its emergence and the resultant trajectories of its evolution are merely statistical outcomes of the application of the mindless algorithm of natural selection. There is a set of circumstances that led to its emergence but there’s no reason for it. If, rather than asking “What is life?,” we ask “Why is life?,” the answer lies in the question: life is why. It exists because it can. There is no cosmic purpose at play—merely thermodynamic tendencies played out in the particular conditions of our young planet (and of who knows how many others).
But once life does exist, everything changes. The universe doesn’t have purpose, but life does. Natural selection ensures it. Living organisms are adapted to their environment—retrospectively designed to function in specific ways that further their persistence. Before life emerged, nothing in the universe was for anything. But the functionalities and arrangements of components in living organisms are for something: variations that improve persistence are selected for on that basis, and ones that decrease persistence are eliminated.
Nothing in this whole arrangement—not the organism, nor any of its components, nor natural selection—is aware of this purpose. Indeed, you might argue that this is not real purpose: it’s only the system behaving as if it had purpose. And its components don’t actually have functions; they only have physical and chemical properties and tendencies that fit well together to form a whole system that tends to persist over time.
But we can approach the question from the other end and ask, “What would be the difference in the consequences between a system with ‘real’ purpose and one that only behaves as if it has purpose?” If we put aside the fact that all this apparent design was actually imparted by the blind actions of natural selection, we can see that the result is a fittedness of the organism to its niche and a fittedness of each component to the whole system.
Just as importantly, there is a fittedness of the activities of the system to the future outcome of its persistence. Organisms are doing work in order to maintain themselves: all those activities are goal directed (and thus qualify as functions). At least that is the effect, and the pragmatic consequences are no different than if the organism was explicitly designed to have that goal. Things happen because of that goal. The system behaves in ways that advance it. The components of the organism and its internal processes have functions, with respect to the goal of persistence. Once you have those properties, what else is needed for something to qualify as a goal or for us to say the whole system has purpose?
And unlike the designed machines and gadgets that surround us in our daily lives, which also have a purpose or at least serve a purpose, living organisms are adapted for the sake of only one thing—their selves. This brings something new to the universe: a frame of reference, a subject. The existence of a goal imbues things with properties that previously never existed relative to that goal: function, meaning, and value.
In a lifeless universe, things have consequences, but nothing matters. There’s nothing with respect to which they could matter. Things just happen, with nobody or no thing trying to make them one way or another. Nothing has meaning or value; nothing is good or bad. But living things do try (to stay alive), and because of that, things matter to them. As we will see in later chapters, meaning and value are the internal currency that drives the mechanisms of decision making and action selection that emerged as life continued to evolve.
From the rocks and sea of our early world, life emerged—organisms that actively maintain their internal states and sustain a degree of causal autonomy from the world around them. The next step in the evolution of agency is the ability of these autonomous organisms to act on the world, to become causes in their own right…
Mitchell, Kevin J.. Free Agents (pp. 40-43). Princeton University Press. Kindle Edition.
Lots to ponder. Below, I'll just drop this snippet in for now:
14.5 Living With Uncertainty Without uncertainty, there would be no hope, no ethics, and no freedom of choice. It is only because we do not know what the future holds for us (e.g., the exact time and manner of our own deaths) that we can have hope. It is only because we do not know exactly the future results of our choices that our choice can be free, and can pose a true ethical dilemma. Moreover, there is much uncertainty in the world, and one of our most basic choices is whether we will accept that uncertainty as a fact or try to run away from it. Those who choose to deny uncertainty invent a stable world of their own. Such people’s natural desire to reduce uncertainty, which may be basic to the whole cognitive enterprise of understanding the world, is taken to the extreme point where they believe uncertainty does not exist…
Hastie, Reid; Dawes, Robyn M.. Rational Choice in an Uncertain World (p. 333). SAGE Publications. Kindle Edition.
Actually, you'd really like the entirety of Chapter 14 (and the Stats appendix).
A BIT MORE DETERMINED
…the Libetian Wars don’t ask the most fundamental question: Why did you form the intent that you did?
This chapter shows how you don’t ultimately control the intent you form. You wish to do something, intend to do it, and then successfully do so. But no matter how fervent, even desperate, you are, you can’t successfully wish to wish for a different intent. And you can’t meta your way out—you can’t successfully wish for the tools (say, more self-discipline) that will make you better at successfully wishing what you wish for. None of us can.
Which is why it would tell us nothing to stick electrodes in your head to monitor what neurons are doing in the milliseconds when you form your intent. To understand where your intent came from, all that needs to be known is what happened to you in the seconds to minutes before you formed the intention to push whichever button you choose. As well as what happened to you in the hours to days before. And years to decades before. And during your adolescence, childhood, and fetal life. And what happened when the sperm and egg destined to become you merged, forming your genome. And what happened to your ancestors centuries ago when they were forming the culture you were raised in, and to your species millions of years ago. Yeah, all that.
Understanding this turtleism shows how the intent you form, the person you are, is the result of all the interactions between biology and environment that came before. All things out of your control. Each prior influence flows without a break from the effects of the influences before. As such, there’s no point in the sequence where you can insert a freedom of will that will be in that biological world but not of it.
Thus, we’ll now see how who we are is the outcome of the prior seconds, minutes, decades, geological periods before, over which we had no control. And how bad and good luck sure as hell don’t balance out in the end. Determined [p. 46].
AND, BACK AGAIN TO FREE AGENTS
Although their behaviors appear simple from the outside, these single-celled creatures are thus far from being passive stimulus–response machines. Their response to a given signal depends on what other signals are around and on the cell’s internal state at the time. These organisms infer what is out in the world, where it is, and how it is changing. They process this information in the context of their own internal state and recent experience, and they actively make holistic decisions to adapt their internal dynamics and select appropriate actions.
This represents a wholly different type of causation from anything seen before in the universe. The behavior of the organism is not purely driven or determined by the playing out of physical forces acting on it or in it. Clearly, a physical mechanism underpins the behavior, which explains how the system works. But thinking of what it is doing—and why it is doing it—in terms of the resolution of instantaneous physical forces is simply the wrong framing. The causation is not physical in that sense—it is informational.
Information and Meaning Before we go on, let me discuss what I mean by information, why it is useful for organisms to have it, and how it can have causal power in a physical system. First of all, information is physical; that is, it has to be carried in the physical arrangement of some kind of matter. It doesn’t just float around in the ether but has to be instantiated in some physical medium. That is literally what the phrase to in-form means. As a result, the idea that information can have causal power in a physical system should not be so outlandish: it is the same as saying that the way a system is organized constrains how it evolves over time.
The word “information,” however, has multiple meanings, both colloquially and technically, which can create confusion. The most commonly used technical sense of the word was developed by Claude Shannon working at Bell Labs in New Jersey and published in 1948 in an article titled “A Mathematical Theory of Communication.” Shannon was working on a classic engineering problem of signal transmission: how best to encode a signal, send it via some noisy medium, and decode it at a receiver. He conceived a way of calculating the amount of information in any given message and derived a formula to calculate the optimal rate of information transfer relative to the noise.
Shannon’s deep insight—one that let him develop a theory of information in the abstract, independent of the message or medium—was to think of information in terms of uncertainty or probability. He reasoned that the way to calculate how much information it would take to send a message—a sequence or “string” of elements—is to ask how many other arrangements a string of the same length could be in.
If the string is just a single digit, say, then from the receiver’s point of view, there are ten possibilities for which one it could be. If it were a single letter, then there would be twenty-six possibilities. The receiver has greater uncertainty about which letter it would be than which number it would be, because there are more possibilities. Conversely, the message with a particular letter contains more information than the one with a particular number, because it resolves a greater degree of uncertainty. Obviously, longer strings carry more information than shorter ones.
The amount of information can be measured in bits—roughly, how many yes/no questions you would have to ask to know what the message says. The amount of information in the signal thus relates to how improbable it is, which is a function of how many other forms it could have taken. If this sounds similar to the discussion in chapter two about the probability of particular arrangements of matter, it should—there is a mathematical equivalence between these ideas.
There is something very fundamental about this framing that is crucial for understanding the role of information in living systems. For something to count as information and for it to have causal power in a system as information, the possibility must exist that it could have been different. We will talk about this concept more in later chapters, but it’s worth noting here that in a truly deterministic universe, such possibilities would not exist nor would information in this sense…Free Agents [pp. 62-64].
Y'see where we might be headed?
HASTIE & DAWES APPENDIX
apropos?
A recent president of the American Psychological Association gave as his presidential address a talk on “torque and schizophrenic viability.” In it, he presented some absolutely striking data. Of 52 children who had seen him 10 years earlier who drew circles clockwise, 11 were later diagnosed as schizophrenic; of the 54 who drew circles counterclockwise, only 1 had been diagnosed schizophrenic. This relationship reached the “.01 level of statistical significance.” He related his finding to the fact that “the world turns in a counterclockwise direction with respect to the north–south axis” and that “with some exceptions, this ‘left-turning’ is characteristic of living cells.”
Certainly, a finding of this magnitude—particularly when it is related to fundamental properties of the earth and of the very unit of life—should have set the psychological world on its ear. At the least, it might have contributed to our understanding of schizophrenia, which is one of the two most prevalent mental health problems in the United States (along with depression). The average citations by other scientists to that article hovered around three per year in the subsequent 8 years, until it vanished from the charts. Why so few citations? Perhaps the researcher will be neglected for 50 years, only to be rediscovered as the founder of a modern theory of schizophrenia. A more likely explanation is found in part of his talk: “Subjects for this study were 155 children first seen for psychological evaluation at my private psychological clinic.” Children seen for such evaluations are given many tests, each of which can be evaluated on a multiplicity of variables. The researcher reported his findings on only one of these tests in his presidential address. Our educated guess is that it was 1 out of approximately 200 that he could have easily related to later diagnoses of schizophrenia. (It is important to what follows to note that this guess is based on the authors’ knowledge of clinical practice, not on the plausibility that he looked at many tests. But imagine a scenario in which a child enters a psychologist’s office, is asked to draw a circle, and is then told to go away.)
How does one evaluate whether one of these very unusual findings might be important? The best answer, of course, is to determine whether it can be repeated. Attempts to replicate such “psychic power” findings have had a dismal history. Absent the possibility of prediction, control, and replication, the best approach is to precisely specify the hypothesis of interest in advance, to specify the conceptual sample space of possible relevant events, and then to systematically collect data—even anecdotes—to describe the entire space of possible outcomes. Persi Diaconis and Fred Mosteller (1989) have outlined such a strategy and illustrate it with an application to the common experience of encountering coincidental “clusters” of newly learned words in everyday life.
If we look hard enough, we’re bound to find something. After all, the probability that exactly nothing will happen is indeed exactly zero. And, as Diaconis and Mosteller (1989) note, “When enormous numbers of events and people and their interactions cumulate over time, almost any outrageous event is bound to occur” (p. 853). Both classical and Bayesian analyses of statistical significance and informativeness are addressed to questions asked beforehand. In evaluating research findings in order to reach rational decisions, it is crucial to determine whether they were hypothesized in advance or simply picked out post hoc— from the imagination of the person purporting to have discovered them. Rational Choice in an Uncertain World [pp. 357-359]
Minimally, I'm now having some wafts of "Black Swan" misgivings. Also rummaging around on the Internets today to see what, if anything, the Buddhists might have to say on the topic. They are generally the only peeps who ever made any sense to me.
