Tuesday, 22 July 2014

MH17 and the news circus moves on

Do you remember the floods in the UK or MH370?  What about Rolf Harris?   Do you care?  The loss of MH17 was a ghastly accident or a ghastly crime.  Time will tell.  But, this blogger feels passionately for the victims and the families and hopes that justice will eventually be meted out to the perpetrators.  However, what is almost certainly true is that it will not make a jot of difference - when the stakes are too high the cards never get played.  No western government is going to impose meaningful sanction on the Russian economy.  A few politicians and oligarchs have had to move their assets about and relocate their holiday plans. But that is trivial cost as the great bear in the East attempts of create a greater Russia federation of states to rival the European Union.   Even as I write the media storm is abating, I predict that within 3 days it will no longer be headlines and within 10 days it will have slipped into the realm of old news and the circus will have moved on.  Russia is rapidly fast replacing Iran as the pariah state of choice but I doubt that Vlad, Putin the Boot, Putin really cares less.  This is not the start of WW3, that started a long time ago, there will be no western boots on the ground, military meddling yes, but real action no.  As I say, the stakes are too high.  The cards will never be played.

Wednesday, 25 June 2014

Suarez Gives Love Bite Shock!

Luis Suarez of Liverpool and Uruguay has vented his frustration on an opponent in their last group game against a lacklustre Italian team.  The video of the action appears to show Luis head-butting his hapless victim with his teeth.  The video isn't clear to be fair.  There is no doubt the molested Italian decided to make a scene as, after all, Suarez has form.  'Disgusting' the three P's roar as the press, pundits and, led by the nose, public go for our carnivorous football star.  But, come on, let's get some perspective.  What's worse:  a reckless tackle leaving a player damaged and out of the game, a wild head butt which lays someone out cold or a gentle nibble?  My observation of Mr Suarez is that he is a pretty passionate young man.  His love of his sport, his country and indeed all those around him is so intense that he gets carried away.  And like many men and women (to be balanced about this) vent their passion with their teeth.  I suspect far more damage to human lives and relationships has been caused by over-intense love bites.  The bruising is hard to hide and marriages have fallen apart as a result.  So, let's cut Luis some slack here if he is guilty.  After all he doesn't have rabies and he probably regularly cleans his teeth.

Friday, 2 May 2014

Teaching in Germany

For each of the past four years I have been lured out to Germany to teach the MBA students at NordAkademie in Hamburg.  This is a small school by many standards with both an undergraduate and a postgraduate MBA programme run, very effectively, by a small team of administrators.  Now I am very fond of administrators - indeed how could I not be.  I am married to one of the best.   But was is surprising about NordAkademie is the quality of what they do and the quality of the small group of students they attract and who are willing to sign up for my gruesomely difficult Business Valuation module.  For three days I pound them with ideas and methods, forcing them to deal with a real company - Rolls Royce Holdings plc - and come up with analyses and valuations which would be beyond your average CFA.  How do they do it?  Well its because technically they are very good.  They are not afraid to work at theoretical models to understand their uses and their limitations.  They are not switched off by what they don't understand which is a truly refreshing characteristic of any student.

Sunday, 20 April 2014

Scientist is what scientist does

Across the blogosphere the vexed question keeps surfacing: what is a scientist?  Do they have privileged access to knowledge denied to the rest of us.  Should their views be given the status of indisputable advice on how to conduct our lives? In medicine, the climate, economics, and in the conduct of our lives who are these modern day priests who whilst not calling us to church on Sunday or to prayers twice a day still demand our respect?  Governments and courts call them to give expert witness and their conclusions they call 'evidence backed'.  The post-modern era with its slogan 'anything goes' has come and gone but we are left with a resurgence of 'speculative science' driven by a multiplicity of agendas.   So, let us be clear: what makes a scientist?

Scientists come in two broad categories: theoretical and experimental.  There is also a third type we will return to shortly.  Theoretical scientists are those who, starting from some well established theoretical or observational background spin out a range of further theories which they claim explain or predict the nature of underlying reality in novel ways.  Some of the greatest theoretical scientists such as Einstein, Hawking, Newton and Schrodinger have created powerful explanatory theories giving us explanations of gravity, space time, black holes and the sub-atomic world and, crucially predictions of observable phenomenon which have been astonishingly successful.  However, their language is constructed of theoretical terms which do not have direct observational reference.  Take a term like 'temperature'.  Temperature is something we talk about all the time but how do we define it?  Very soon we discover that we are using other theoretical terms in our definition which do not have direct observational reference but appeal to further terms: heat, energy and so on which in their turn are not directly observable.  Theoretical scientists use predominantly mathematics to develop their conceptual understanding of the world: tensor geometry, number theory, calculus and so on.  By and large they are platonists, looking for that 'ideal reality' which the real world more or less imperfectly reflects.

Empirical scientists are, in their turn, of a different ilk.   Their interest is in constructing experiments. Their language is observational using terms which, they believe, will lead to measurement of empirical phenomena of various sorts.  Sometimes these experiments will be strictly controlled in a laboratory environment, sometimes the observation is less direct, undertaken in context perhaps through field trials or directly through observation.  Some try to directly engage the subject blurring the object-subject divide in order not to gain knowledge in the Platonic sense of 'justified true belief' but rather understanding of processes physical or social.

The problem for science is how to bridge the gap between the theoretical and the empirical in such a way that the former can be justified by the latter.   The classical way that this has been done is through the creation of 'hypotheses' - compound statements that linked theory with observation.  The problem is that observation is not theoretically neutral.   Observation relies upon measurement and measurement has its own theory of measurement.   The notion that observation is intrinsically 'theory laden' underpinned the challenge of Kuhn, Lakatos and Fayerabend against Popper's simple falsificationism as the defining standard for science.  Science, Popper argued is about putting 'conjectures' to crucial tests with the aim of refuting them by the simple logic If p is true then q is true, not q, therefore p is not true where p is the premise and q the consequent.

The problem, as Lakatos pointed out is that (i) all observation is theory laden and (ii) with any well formed theory there will be so many ceteris paribus clauses that it is impossible to determine uniquely what has been refuted.  Lakatos went on to propose what this blogger believes to be the most cogent exploration of how sciences develop.  He argued that scientists coalesce around a series of 'core terms' - theoretical constructs if you like which they consider irrefutable and which they protect against refutation through the creation of a range of ad-hoc modifications as a way of immunising them against challenge.   Theories are not the way science progresses, Lakatos argued.  They progress by scientists becoming committed to research programmes which either progress when they generate novel predictions or degenerate when the desire to sustain the core of belief against refutation overwhelms the empirical significance of the programme.  

However, since Lakatos untimely death in 1974 a new type of science has arisen.  It is where scientists seek to create computer based models of more and more complex social and physical systems reflecting a series of underlying laws which whilst not conjectural in themselves are spun into more and more abstract sets of interacting relationships.   By priming these computerised models of reality with a small number of empirically determined parameters and seeding them with given initial conditions projections of future outcomes are derived.   These theoretical realities, created in cyberspace, are designed to give an insight into how real systems operate.    In practice they rarely perform well in that what they project rarely maps onto what is observed and measured.   Indeed, what I will refer to as Bob's Law applies:  as models gain complexity they progressively lose any connection with reality.    This is an application of what I regard as an almost universal principal:  the more complex a model the less real are its outcomes.  
http://www.lse.ac.uk/philosophy/About/lakatos/introduction.aspx

Thursday, 20 February 2014

So, the media circus moves on.....

The great British media having exhausted the misery of the floods - or at least the patience of the unlucky inhabitants of the Somerset Levels - and have moved onto pastures new. Soon all will be forgotten. The politicians will have retreated and all that will be left are sodden ruins of homes, shattered dreams and promises we know they will never fulfil. The Environment Agency will return to quango mode following three months of chasing after BBC film crews. 'We always knew when the Environment Agency would turn up', complained one irate resident, '- as soon as the BBC arrived'. Like a whining child the Environment Agency blamed everyone but themselves: it's the weather, it's the jet stream, no it's the climate, no it's lack of money, no it's a flood plain (this is what you get if you live on a flood plain and we're in charge) and no.... so, it goes on.

What is for sure is that the recent storms belting the South West of England normally vent their fury on the West Coast of Scotland or Cumbria which have mountains and lakes and things and which no one cares about. It has been unusually wet, but the claim that the amount of rain December through February is the largest on record is bunk. 1929/30 holds the record by a substantial margin for what are typically the wetest three months of the year (October-December). Paul Homewood on his excellent blog: http://notalotofpeopleknowthat.wordpress.com/ has more information from the Met Office that puts the recent deluge into context.

What we have experienced this winter, in the UK, is weather. That's what we get in the UK, alongside bloated quangos. Quango's like weather are a hazard of British life and I am sure the blighted inhabitants of Somerset have had enough of both.

ps: by way of passing who was it forecast in the early Autumn that we would have below average precipitation between December and February? Why, another quasi-governmental-organisation, demonstrating the power of its super-computerised models of the British weather: the Met Office! We are now solemnly informed by its Chief Scientist Dame Julia Slingo that this is what we get with climate change. She wasn't saying that in October was she?

Sunday, 6 January 2013

Pension Balls-UP

Ed, the demon barber of the left, Balls has a brilliant wheeze on how to finance his latest job creation scheme. Screw those who save for a pension and,just to make sure, screw the pensioners. His idea, which to be fair, is only an extension of current coalition policy, is to reduce pension relief for highest rate tax payers to 20k per annum. For those on defined benefit schemes that means that even small increases in annual earnings will result in huge tax bills. But, leaving that aside, the injustice here is that restricting pension relief means that pension saving will effectively come from taxed earnings, and the ultimate pension will be taxed as well. Pensions are simply deferred income, reinvested at a rather pathetic rate of return by pension fund managers who have always relied upon the presence of the tax shield to make the exercise worthwhile to the punter. What is happening is that the original income source will be taxed twice, once at the point of deferral and once at the point the fund is drawn upon by the pensioner. Already, higher earners are saying to employers 'pay me more and I will opt out of the pension scheme' - then investing their income to their best tax advantage elsewhere. That in the longer run does not seem to be a good idea. People need big incentives to save for a pension, most of us are not into deferred gratification, and this is one crazy way of bringing about a situation, in the not too distant future, of even more very poor pensioners.

Wednesday, 2 January 2013

Reacher, Bond and a Hobbit

It's great at the moment if you are a movie fan. Suddenly some big movies are hitting the screen - some after lengthy production delays. I took my nearest and dearest to see Jack Reacher, the long delayed first movie from the books of Lee Child. Enjoyed it although it was a bit hard coping with a diminutive Tom Cruise in the role of a 6'6" ex-military policeman. But why the interest in what is happening at the movies? It's just a hint but maybe there is now some life in the market for asset backed paper of various sorts. This market virtually dried up in the crash and with it the cash cycle the film industry depends upon came to a grinding halt. Now I don't know whether this chronic shortage of cash was the reason for the substantial delay in production of many movies but rumour has it that a number of sequels to mid-'noughties' hits are now under production. The cash taps might just be beginning to flow again and if so this could be a sign that the problems of 2008, if not solved, are like the euro crisis beginning to dissolve. Perhaps 2013 maybe the start of the real recovery.