Are We Unknowingly the Turkey (the problem of induction) - Part I

           The next couple of posts will explore the idea of how to learn from the turkey or the problem of induction or inductive knowledge as discussed by Nassim Nicholas Taleb in his book, The Black Swan The Impact of the Highly Improbable. I have referred to this book before as it has what I consider some highly insightful and provocative concepts, thoughts, and commentary relating directly to economics and finance. This problem also directly relates to the Black Swan phenomena as discussed by Taleb in his book mentioned above.

           The problem  of the turkey can be seen in the following story. Suppose you are a turkey and today the farmer comes to your pen and feeds you. Initially you think to yourself, this is interesting I wonder what is going to happen tomorrow? By the 14^th day of feeding you are thinking this is pretty good. By the 50^th day of the same activity you think this feeding thing is really great. I am going to brag to my friends about the farmer. By the 250^th day you have forgotten that you ever worried about food. By the 350^th day you feel you are entitled to being feed. You can look back on a long history of consistent feedings, it has always happened. No change, no difference. You expect tomorrow to be just the same as every other day, why wouldn’t it be? Tomorrow comes. The farmer has an ax- it is the day before Thanksgiving. You were not expecting that! The consequences of underestimating the impact is significant for you (the turkey). This is the problem of induction. Do past experiences or histories allow us to predict future events and activities? How do we know that what has been observed will be sufficient to enable us to figure out the properties of what we have been observing? Taleb poses several questions including; one, “how can we know the future, given knowledge of the past; or, more generally, how can we figure out properties of the unknown based on the known?”, two, “how can we logically go from specific instances to reach general conclusions?” and three, “How do we know what we know?”

           As I write this I am listening to the song “Russians” by Sting from Dream of the Blue Turtles album. The lyrics discuss the problem of believing what the Russians and President Regan say regarding the atomic bomb. At the time this was released in 1985 nuclear annihilation was a great concern. Both governments had the ability to destroy all humanity several times over. I remember being in school in the late 60’s and having air raid drills where we got under our desks. However, just four years after the song was released in 1989 the Berlin Wall was breached and by 1990 was torn down. By 1991, Mikhail Gorbachev had overseen the dissolution of the Soviet Union. Who predicted from past Soviet actions culminating in 1985 that six years later there would no longer be a Soviet Union, as such? No one. In 1973 I was studying military tactics in ROTC which included the most effective ways of destroying Russian tanks. In 2003 my son Daniel served an LDS church mission in Rostov, Russia, the place where they built the tanks I learned how to destroy in 1973. I never imagined in my wildest dreams in 1973 that one of my children would be in Russia on a religious assignment teaching the peaceable elements of Christianity in a former Communist country. This is a positive induction problem.

           Let’s further consider the problem of the turkey. Was the farmer suffering from a problem of induction? No, of course not. He knew exactly what was happening. Such problems can be very one-sided and it is critical which side we are on. In the following posts we will look at some specific examples of the problem of induction relating to recent financial and economic problems and some ideas for handling the problems. Additionally, I think there are some applications for world building that I hope will be interesting and helpful.

The bad dreams spawned by thinking about taxes and tax filing

I realized I haven’t done my taxes yet. Usually I have them done by now; the refund deposited and much of it spent. The reason for my procrastination is that I may owe something this year. I don’t know that but the thought makes me ill.I hate it with a passion reserved for few other things. I don’t think I would feel so strongly if I thought the Federal government would or even could use the funds wisely but having watched the latest shenanigans in Congress (even at our own state level) I just don’t have much confidence. We seem to lurch from one crisis to the next like a drunken sailor. Congress seems to careen from one short-term “solution” to the next, apologizing with a drunken smile at each injustice and injury but never thinking that the real solution might be to get sober. There is a good horror story here but I like horror stories to be fiction not true.

A new favorite author I have been enjoying is Nassim Nicholas Taleb. He writes The Black Swan, Fooled by Randomness and his new book, Antifragile. I have referred to some of his thoughts in previous blogs and will continue to do so in future blogs and comments. He has many comments on politicians and their actions. My own thinking tends to lean towards the thought that about the only way a politician seems to be able to justify his existence is by either spending money, creating a new program, increasing the welfare rolls, or creating a new regulation. One of my favorite examples is the TSA and airport security. A multi-billion dollar agency has been created to make a visible statement that something is being done. It doesn’t matter if the activity is helpful or hurtful, just that there is activity. What constitutes success here? The number of people embarrassed, the length of lines, the amount of money spent, the number of new Federal employees, the number of laptops stolen from the screening areas? The real hero here is the person who came up with the reinforced steel door for cockpits and the rule that pilots stay in the cockpit in any emergency situation. That person deserves a medal but will probably never be recognized and may not even be known. Dad tells a story that happened fairly soon after we had moved to Logan. Several of the neighbors thought it would be good to have street lights on our block. The families along to block got together, did the research to find what needed to be done and raised the money for the streetlights. The city people offered to install the lights because they had all the right equipment needed to do it correctly. When the job was done the local newspaper found out that a citizens group had improved their neighbor. As I remember the story a little ceremony was scheduled and who should show up but the local politician to be photographed and included in the story. He wasn’t involved in any other activity than the picture and story.

So in your writing, make your politicians believable. Whether that means a good guy or a bad guy depends on what you need. However, in my current frame of mind you are really going to have to work at making me believe a story with a good politician. Now, if you wanted to include one that didn’t do any work and only shows up for the ribbon cutting I have just the reference materials to help you.