Governor Schwarzenegger made an announce­ment on Monday. He’s with­drawing sup­port for a planned off­shore oil project in California state waters. He was very clear: this deci­sion was made specif­i­cally because of the Gulf oil leaks.

“I think that we all go through the end­less amount of studies and research and every­thing, and before you make a deci­sion like that, you are con­vinced that this will be safe,” the gov­ernor added. “But then again, you know, you see that, you turn on tele­vi­sion and see this enor­mous dis­aster and you say to your­self, why would we want to take that risk?”

We have a hard time plan­ning around risks that have low prob­a­bility but poten­tially mas­sive impact. Most risk assess­ment is done intu­itively, and our intu­ition gets fickle around long-​​tail events. Our gut instincts differ person-​​to-​​person, and also per­haps within our­selves. Somehow I can never be both­ered to wear a helmet when I get on a bicycle, but when riding a motor­cycle in states without a helmet require­ment, the idea of taking mine off strikes me as absolutely insane.

Formal cost-​​benefit analyses can be used to math­e­ma­tize plan­ning around uncer­tain out­comes, and they often are. But CBA can lead to espe­cially extreme cases of garbage-​​in/​garbage-​​out, and usu­ally does. What number do you assign to the “cost” of a species loss, for example. And how would an equa­tion help if you didn’t know what the prob­a­bility of a species loss was anyway? Laplaces’s insuf­fi­cient reason cri­te­rion can be used to hold together these shaky for­mal­iza­tions, but that cri­te­rion states that if you can’t guess the out­come, insert a ⁵⁰⁄₅₀ chance of it hap­pening. Which makes intu­itive sense I guess, but here we are at intu­ition again.

Intuition is sen­si­tive to recent cir­cum­stances. And so, because of the timing of the “pic­tures on TV”, California won’t have off­shore drilling. I’m sym­pa­thetic to the gov­ernor; I’m sure he was shown cred­ible evi­dence that safety stan­dards in oil rig­ging have been much improved. But how much safety is enough? It depends what’s on TV at the moment.

We seem to col­lec­tively deal with a lot of these low-​​probability/​high-​​impact deci­sions. I think they’re some of the most impor­tant choices soci­eties make (what­ever that means). For example, the ques­tion “how to deal with the threat of ter­rorism?”, is premised, often invis­ibly, on the ques­tion “how much of a threat is ter­rorism?”. Is the attempted Times Square bombing proof that Americans are living under threat? Or is it a reminder that American cit­i­zens are remark­ably safe from home front ter­rorism? When the poten­tial con­se­quences are so impor­tant, declaring some­thing irrel­e­vant because it’s out-​​of-​​the-​​ordinary doesn’t seem right somehow. And yet, and yet.

Or how about that crazy cli­mate change? Critics sug­gest that because we have uncer­tainty in the out­comes — which we absolutely do — we shouldn’t be pouring resources into com­bat­ting an unknown. Which isn’t so crazy, if you con­sider the oppor­tu­nity costs: the money and time and polit­ical cap­ital we spend keeping carbon out of the atmos­phere could be going to plenty of other deserving projects. But my intu­ition tells me that the uncer­tainty asso­ci­ated with cli­mate change is pre­cisely the reason we should fear it. I worry that we’re going to learn too late the value of a pre­dictable cli­mate. Each spe­cific climate-​​linked tragedy may be unlikely to the point of absolute unknowa­bility, but somehow that col­lec­tion of unknow­able tragedies sounds like the worst thing in the world to me.

I have a hard time artic­u­lating that threat to myself or to others, but the pre­cau­tionary prin­ciple speaks to it. According to wikipedia, the prin­ciple states that

“if an action or policy has a sus­pected risk of causing harm to the public or to the envi­ron­ment, in the absence of sci­en­tific con­sensus that the action or policy is harmful, the burden of proof that it is not harmful falls on those who advo­cate taking the action.”

Environmental sys­tems are weird. They often seem to be com­plex in the aca­d­emic sense, behaving in aggre­gate in ways which can be either resis­tant to per­tur­ba­tion or sud­denly highly sen­sis­tive to it. Formal com­plex sys­tems theory usu­ally isn’t very good at pre­dicting out­comes in envi­ron­mental sys­tems (although I think it’s fab­u­lous at helping us to under­stand why we can’t make those pre­dic­tions). Ecologies are weird and unknow­able, but they are also cru­cial to our lives, both in big ways and small ways. We will all die if the ecosystem ser­vices we rely on are thrown out of wack, but we will all be mis­er­able and grumpy long before those ser­vices com­pletely col­lapse. That com­bi­na­tion of com­plexity and cru­ciality makes pre­dic­tions around unlikely but poten­tially sig­nif­i­cant envi­ron­mental dan­gers espe­cially perplexing.

I’m not usu­ally a small-​​c con­ser­v­a­tive, I tend to value exper­i­men­ta­tion and lib­eral pol­i­tics. But because of the par­tic­u­larly fraught nature of envi­ron­mental choices, I’m a big believer in that pre­cau­tionary principle.

Intrade is a “pre­dic­tion mar­ket­place”, which is a sort of alter­nate stock exchange attempting to leverage the ability of mar­kets to ratio­nalize infor­ma­tion held by dis­trib­uted indi­vid­uals. The idea is to con­cen­trate common sense and/​or insider infor­ma­tion into an emer­gent pre­dic­tion, by let­ting people put money behind their guesses. There’s an assump­tion that people will bet money rel­a­tive to their degree of cer­tainty in a given pre­dic­tion, thus cor­recting for hap­hazard spec­u­la­tion and (maybe) ide­ology. People argue back and forth about the effec­tive­ness of pre­dic­tion mar­ket­places, but it’s cer­tainly a plau­sible sounding idea, for some kinds of predictions.

Intrade had a run­ning trade on the U.S. health care bill passing by June.

The wisdom of the crowd was against the bill passing for the majority of the run, and as recently as three weeks ago. There wasn’t a clear con­sensus for pas­sage until prac­ti­cally last week.

So what was it about the U.S. health­care pol­i­tics that con­founded the pre­dic­tion mar­ket­place? Was it in fact wishful thinking from the sorts of people who are likely to par­tic­i­pate in pre­dic­tion mar­kets? Were they wrong for the right rea­sons, and today’s bill-​​signing was actu­ally a freak event? Was there some­thing fun­da­men­tally abnormal about the polit­ical dynamics of this bill such that estab­lished heuris­tics failed people who thought they had a money-​​good grasp of what was going on?

I guess all of those hypotheses pre­sume that the Intrade market has some track record of get­ting things more or less right. Has anyone checked? Paging Dr. Tetlock?

Kevin Kelly studies western sci­ence from a few dif­ferent per­spec­tives. He’s got a pretty good feel for it as an insti­tu­tion. For his reg­ular Cool Tools newsletter, he reviewed The Deniers, a book cel­e­brating sci­en­tists who dis­pute the global cli­mate change con­sensus. If I get a chance I’d like to read it, but regard­less of the book, Kelly’s review is worth a read in its own right.

“What should we do with the 1% who dis­sent about global warming? By logic, we should embrace them, but cur­rently “deniers” of global warming have become demo­nized, which is a sign that global warming has become slightly reli­gious. Which is a shame because many global warming skep­tics are not crack­pots or paid shills, but first-​​class pres­ti­gious sci­en­tists with a minority view.

Throughout its his­tory, sci­ence usu­ally advances from the edges. Heretics should be cher­ished for forcing edges to the center. The most respected sci­en­tific global warming heretics have been rounded up in this very read­able book, The Deniers. Significantly, many of the emi­nent sci­en­tists included here don’t call them­selves deniers at all. They say, “I believe global warming is evi­denced in all these other fields; Except in the field that I am expert in, the evi­dence is totally bogus.” One by one the field-​​specific heretics make their case. And a number of them are rather per­sua­sive. But at the moment there is no uni­fied alter­na­tive theory of cli­mate change, so the cri­tique of global warming amounts to exposing holes in the cur­rent sci­ence. Any good sci­en­tific theory will have holes.”

I get frus­trated when I hear people com­plain that sci­en­tists didn’t do enough to alert the world to the cli­mate change threat. According to received wisdom, sci­en­tists aren’t sup­posed to be involved in the set­ting of social pri­or­i­ties at all, they’re just sup­posed to pump objec­tive fac­tual infor­ma­tion into the mix and let civil, demo­c­ratic insti­tu­tions decide what to do or not do about it. So even if sci­en­tists hadn’t become activist around global warming, it wouldn’t seem totally fair to blame them. And the thing is, sci­en­tists were activist. For decades, when media and gov­ern­ment and even envi­ron­mental groups seemed to be drop­ping the ball on global warming, it was a cadre of research pro­fes­sionals who fum­bled it along, and if they didn’t do a better job of it, can you really blame them? If you didn’t hear about global warming during the 90’s, it wasn’t because there wasn’t a lab­coat who was trying to tell you, they just didn’t know how to do it well.

Perhaps one of the draw­backs of that breaking down of the notional fire­wall between sci­ence and pol­i­tics is that sci­en­tific insti­tu­tions sub­se­quently aren’t dealing pro­duc­tively with cli­mate change minority views, as Kevin Kelly and appar­ently the authors of this book think.

Parts one and two.

The update:

“Elliott later said that while there’s no evi­dence that Tasers kill, the fact that deaths have occurred soon after a Taser was used on indi­vid­uals sug­gests there is a dis­tinct pos­si­bility it may have con­tributed to death in some cir­cum­stances.“
– RCMP tightens the rules on Tasers, Toronto Star

We’re making progress here. Very metic­u­lous philoso­pher sci­en­tists, these RCMP. I wonder, just what kind of evi­dence would it take for them to believe that a thing had caused another thing? Like say, a taser causing the death of someone who had just been shot with a taser? From a more util­i­tarian per­spec­tive, at least they’re going to start acting as though tasers kill people. I sup­pose that’s what counts.

This snippet is interesting:

“The Mounties have also dropped the term “excited delirium” – a phrase that had no med­ical foun­da­tion, and was crit­i­cized ear­lier by the Commons com­mittee, the RCMP’s public com­plaints com­mis­sioner, inde­pen­dent con­sul­tants and civil lib­erty groups.”

So why, until yes­terday, were they using such an odd term to frame their oper­ating pro­tocol? Oh look, it’s a con­struc­tion that TASER International have long been repeating in their press releases and court cases, despite years of head-​​scratching per­plexity from anyone who has ever tried to figure out just what it might actu­ally mean in a bio­log­ical con­text. How does cor­po­rate unspeak from Scottsdale, Arizona get embedded in the pro­ce­dural man­uals of the Mounted Police? How does it get embedded in their mouths? I’m glad we’re making progress on get­ting it out.

Steven Chu, Obama’s pick for Secretary of Energy, hints at what I think is the most impor­tant point about cli­mate change: yes we know it’s going to happen, but we don’t know what is going to happen, and that’s not a good thing.

And he just keeps talking about impor­tant stuff. Imagine an America where sci­en­tif­i­cally grounded ideas are sat down in the same room with capable politics.

Greenspan Concedes to ‘Flaw’ in His Market Ideology — Bloomberg (2^nd Term)

’”If we are right 60 per­cent of the time in fore­casting, we are doing excep­tion­ally well; that means we are wrong 40 per­cent of the time,” Greenspan said. “Forecasting never gets to the point where it is 100 per­cent accurate.“‘

Yes, that fol­lows. And when the con­se­quences of bad out­comes are cat­a­strophic and pre­dic­tion of good out­comes can’t be cer­tain, you have to have poli­cies which are robust to failure. What Greenspan seems to have been sug­gesting, and what he still seems to be defending, is that when pre­dic­tion cannot be 100%, it is accept­able or even inevitable to forge ahead as if the out­come was sure to be uni­formly positive.

‘Today, the former Fed chairman asked: “What went wrong with global eco­nomic poli­cies that had worked so effec­tively for nearly four decades?”

Greenspan reit­er­ated his “shocked dis­be­lief” that finan­cial com­pa­nies failed to exe­cute suf­fi­cient “sur­veil­lance” on their trading coun­ter­par­ties to pre­vent surging losses.’

So how many cat­a­strophic market fail­ures do we have to have before we get past shocked dis­be­lief when there’s another? Sure, each one is dif­ferent in spe­cific char­acter than the last, but the insis­tence that this time we’ve got it all fig­ured out is prac­ti­cally childish when repeated ad infinitum. Marketeers seem capable of con­vincing them­selves that, because they are per­son­ally familiar with the mech­a­nisms at play at the level of indi­vid­uals, they can there­fore know what behav­iour will emerge at the level of the system. It’s not that neolib­eral market the­o­rists don’t believe in emer­gence, by con­trast they are devoted to the ele­gant effi­cien­cies that they see when mar­kets aggre­gate infor­ma­tion and action. They just don’t seem to want to believe that com­plex sys­tems (including the ultra-​​complex sys­tems Wall St. financiers are capable of cooking up) are capable of neg­a­tive out­comes too.

It comes back to John Kenneth Galbraith’s posi­tion that market col­lapses don’t happen because of unpre­dictable shocks from some­where out­side of the lines that econ­o­mists draw around “the economy”, they happen because of the most fun­da­mental rules of cap­i­talist economies. And they will again, par­tic­u­larly if we don’t exer­cise cau­tious oversight.

update: See also this inter­esting and con­vincing chunk of quotes from the same testimony:

Greenspan: Bad data hurt Wall Street com­puter models — NYT

‘Business deci­sions by finan­cial ser­vices firms were based on “the best insights of math­e­mati­cians and finance experts, sup­ported by major advances in com­puter and com­mu­ni­ca­tions tech­nology,” Greenspan told the com­mittee. “The whole intel­lec­tual edi­fice, how­ever, col­lapsed in the summer of last year because the data inputted into the risk man­age­ment models gen­er­ally cov­ered only the past two decades a period of euphoria.”

He added that if the risk models also had been built to include “his­toric periods of stress, cap­ital require­ments would have been much higher and the finan­cial world would be in far better shape today, in my judgment.“‘

We live and learn. Especially about using models to make serious decisions.

“Be modest about what mil­i­tary force can accom­plish and what tech­nology can accom­plish,” Gates said.

He urged his audi­ence to have an “appre­ci­a­tion of limits” of mil­i­tary power, arguing that although the U.S. has achieved huge advances in tar­geting and intel­li­gence that have made attacks more pre­cise, war­fare is “inevitably tragic, inef­fi­cient and uncertain.”

The com­ments amounted to a cri­tique of a mil­i­tary theory called “effects-​​based oper­a­tions,” which argues in part that the gov­ern­ment can care­fully craft mil­i­tary inter­ven­tions to have a pre­dictable impact.

“Look askance at ide­al­ized, tri­umphalist or eth­no­cen­tric notions of future con­flict that aspire to upend the immutable prin­ci­ples of war: where the enemy is killed, but our troops and inno­cent civil­ians are spared,” he said.

The above from Defense Secretary Robert Gates.

After get­ting irri­tated at humankind’s inability to accept that some things are gen­uinely uncer­tain, I open my pod­casting device and hey presto:

Resilience: Adaptation and Transformation in Turbulent Times — A World Of Possibilities, May 6^th

It opens with Buzz Holling (who NRE 580 alumnus will remember for panarchy theory) on adap­ta­tion, uncer­tainy, ade­ter­minism, non-​​equilibrium, and such like in the gen­eral world. Then it moves onto Brian Walker talking about much of the same in ecosystem man­age­ment, plus con­trol fetishism. Then it moves on from there. Recorded at a Stockhlom con­fer­ence on applying biology-​​based resilience theory to social sys­tems. The idea of which is now creeping me out. Except that maybe, just maybe, this is a group of people that can be trusted to think ratio­nally across dis­ci­plines. Maybe. Anyhow, it’s good listening.

Brian Walker’s talk reminded me of a lec­ture on con­ser­va­tion man­age­ment from my under­grad, wherein Thom Nudds announced that if you manage to get an ecosystem to not cycle you’ve flat­lined it, so con­grat­u­la­tions on that.

I have nothing to say about the finan­cial crisis, because I dis­cover that as a heavy news reader who has scraped through classes on law, eco­nomics and com­plex sys­tems, and even read some Galbraith on a bus once, I don’t have even first prin­ci­ples to judge what has just hap­pened in the US finan­cial system. The subject–the impen­e­trable inter­play of finan­cial “instruments”–is so inscrutable that any com­pre­hen­sible nar­ra­tive one tries to tease out of it by watching the shadows it casts on the wall seems to have more to do with what goes on in one’s own head than what goes on in the stock mar­kets or board­rooms or policy lairs of the world. I just have no idea about where it came from, or what it means, or what should be done, or where it will go. All I’ve learned is that the people who pre­sum­ably do have the exper­tise to deal with this, pos­sibly don’t.

But everyone is telling one story or another about it all the same. And they usu­ally boil down to public versus pri­vate, gov­ern­ment versus market. Here’s a somehow rather heart­ening thought from com­menter HH at Crooked Timber:

The left-​​right polar­iza­tion over and pri­vate enter­prise is over­shad­owed by the larger con­flict between truth and lies. Both free market and planned eco­nomic sys­tems can func­tion with rea­son­able effi­ciency when oper­ated with com­pe­tence and integrity. Neither can func­tion when overrun by thieves and liars.

America’s moon landing pro­gram and nuclear sub­ma­rine projects were mas­ter­pieces of cen­trally planned, gov­ern­ment spon­sored endeavors. France’s nation­ally con­trolled nuclear power pro­gram achieved great suc­cess, while America’s pri­vately man­aged nuclear power efforts stum­bled. It is the ani­mating vigor and func­tional integrity of a pro­gram that is the best pre­dictor of suc­cess, not its ide­o­log­ical grounding.

To which I think I would add that we get a some­what better chance at choosing thoughtful cri­teria for what ‘suc­cess’ means for public enter­prises than for private.

Here’s an old-​​hand finan­cial tech­ni­cian inter­viewed by Reason mag­a­zine people:

(Just inci­den­tally, I’m tickled to note that the Reason blog linked to this little old web­site a few days back).

I don’t under­stand how he gets from some of his premises to some of his con­clu­sions. But his cen­tral premise feels about right: nobody knows how to value these deriv­a­tives, which seem to have absorbed so much of the nations wealth and now may or may not even par­tic­u­larly exist as real enti­ties in the real uni­verse. The old bosses didn’t know how to value them, and the new bosses won’t either, once they’ve sunk so much more of the country’s trea­sure into get­ting a chance to try.

But we won’t admit to our­selves that we’re dealing with an uncer­tainty, will we? Instead we’ll talk our­selves into believing one thing or the other, and forge ahead on that basis.

A sep­a­rate but related ques­tion: how does a country that can’t afford equi­table edu­ca­tion or health care keep finding hun­dreds of bil­lions of dol­lars lying around when there’s a country to be invaded or a bank to be bought out? Where does all this money come from? And why wasn’t it there before?

Steve Steinberg argues that human ter­rain map­ping, and in par­tic­ular emer­gent group sim­u­la­tion, may be a dam­aging tech­nology we are devel­oping without due thought to it’s consequences.

With regard to Paul Torrens’ work:

“The next example was more dis­turbing. The sce­nario this time is a public demon­stra­tion, sim­ilar to the WTO protests that occurred in Seattle a few years ago. The model includes such details as tear gas which causes civil­ians to stam­pede, extrem­ists who are trying to insti­gate vio­lence, and mounted police. Torrens shows that changing a few small ini­tial con­di­tions con­trols whether the protest spins out of con­trol or not, and sug­gests this sim­u­la­tion is a valu­able tool for policing. Indeed. Demonstrating either star­tling igno­rance or touching naïveté, Torrens argues that this sce­nario is really a public health issue, due to the pos­si­bility of injury. Well, yes – but, more impor­tantly, it’s a demo­c­ratic, human rights issue, and improving the state’s ability to squash demon­stra­tions doesn’t strike me as a desir­able development.”