New economic theory

My last two blog entries received withering criticism from my daughter and I was given a list of required reading to gain a better foothold for my implicit critique of the neo-marxist theories. Rather than follow this path I will resort to a standard academic trick - I will unveil my own theory and let neo-marxists try to poke a hole in it!  My theory  can be described easily in a few paragraphs. It explains  recent past, correctly predicts the future and it  is endowed with great simplicity coming from  combining  logic with Bayesian reasoning. Unveiling is the right word, the theory is too good to be false, and in fact it was created many years ago and it took a great deal of effort of politicians, bankers and regulators to implement it. I simply reverse engineered it from  life experiences of myself and my colleagues. 

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From the early 90's US economy developed a three-currency system described below.

Green money

Green money is the usual currency used for everyday needs. Average citizen has always very little of it, usually in form of loose change or small bills, and if popular culture is a good indicator, large quantities of green money are usually connected with criminal activity.  Green money is used to buy food and other necessities and steady inflow of green money is synonymous with having a job.

Red money.

This is a special kind of money that buys only one thing - your house. Banks will give you practically any amount of red money while retaining ownership of your property and the right to kick you out. You are constantly converting green money into fees associated with having red money but you also have the ability to use red money for your economic activity. Having red money is critical to passing through the transition points in your life: starting a family, sending children to college, providing medical care during the sunset years, etc.

Yellow money

This is the money that represents your entitlements. Throughout your life you accumulate  yellow money in form of Social Security, 401k, and other retirement schemes. Technically you are converting a part of your green income but in reality those contributions are not voluntary. You have no access to your yellow money until you are very old and even then you do not control it. Yellow money is a major source of economic activity for others.

This three color scheme is an abstraction whose sole purpose is to explain the connections between different components. In the end, the theory will posit that green money does not have practical value, red money is a mechanism that allows you to send your kids to college, and  yellow money is an IOU that allows fund managers to have private jets and billion dollar bonuses.

The theory described below presents economy as interactions between two types of players: small and big ones, and the main focus is on you -  a small player. A small player is a member of the middle class but I prefer a modern term: a precarian.

Total wealth formula

Your total wealth is W=G+R+Y or more generally W(p,t) = G(p,t)+R(p,t)+Y(p,t), where the variable  p represents a person and t is time.

As an instantiation of the variable p you may think that the red portion of your wealth represents a debt so it should be subtracted rather than added. Not quite, as you will soon see.

The value of W(p,t) can be computed for different values of t but such computations will be only approximations. This is really a technicality and to remove statistical variations, big players use tranches of the form W_P(t)=sum_{p in P} W(p,t) (sum of the values of W(p,t) over all the p's in the population P). The value of such tranche can be computed with arbitrary accuracy at any time t with error that depends only on the size of the population P.

We continue with basic axioms of the system.

Axiom 1

G(p,t) equals approximately 0 for almost all  (p,t). In other words, almost everybody is almost always broke i.e. does not have any green money.

Note that this axiom does not contradict the existence of millionaires but of course the number of them must be a measure zero set.  Main consequence of Axiom 1 is that the green money is not a significant source of economic activity for anybody, at least directly.

To introduce axioms 2 and 3 we need one more parameter. Recall that  the red money R =R(p,t) was used to acquire your property. Let V(p,t) represents its value.

Axiom 2

R(p,t) equals approximately V(p,t) for almost all (p,t) or equivalently that for almost everybody and  most of the time the amount of red money in your possession is  approximately equal to the value of your property.

Axiom 3

lim_{t --> infinity} V(p,t)=infinity for almost all p,  that is that for most people the value of their property goes to infinity.

These axioms are the cornerstones of the theory so let me explain their consequences.

A bank that owns your property charges you monthly rent (called interest) which is a percentage of its value. What makes this transaction special and unique is that in addition it provides you with the full value of the property paid in red money (called mortgage).  This trick allows you to use the  term "my house" with a minimum amount of credibility.  With an ordinary act of sale you would attempt to buy down red money to zero and complete the purchase. However, Axiom 3 indicates that buying a house is not an ordinary sale since the value of the property goes up with time. Consequently, your behavior is described in Axiom 2. As the value of property increases you increase your red money holdings by taking out the difference V(p,t)-R(p,t) in green money. The technical term used for this procedure is called extraction of equity and it produces a temporary windfall of green money. But wait, does it not violate Axiom 1? No, it does not  - the green money that you obtain this way is immediately used for necessities other than food. These were already mentioned: sending kids to college or fixing up your house in order to extract more green money out of it.

This points to Axiom 3 as the enabler of this scheme. Is this axiom true?  Abstractly, the value of your property is a small fraction of the value of the entire planet and we know where this is going. Economically however, the value of your property is determined by willingness of others to try to buy  it, and this in turn is determined by the supply of red money. As this source appears bottomless Axiom 3 is certainly valid.

This describes how you can live and prosper in this economic systems, and that is the micro-economic scale of things. Now we look at the big players or the macro-economic game. As I indicated already they deal with tranches to compensate for the  stochastic aspects of the axioms. So do not feel that this is all about you and that somebody is out to get you. This type of thinking will only get you into the looney bin...  The source of profits for the big players is the yellow portion of your wealth portfolio.  You and your employer are continuously increasing this amount by their involuntary contributions and  this  gigantic pool of wealth  is open to modern financial wizardry while  nobody is watching. So in practice  the only growth of this portfolio is represented by your contributions while the profits from investing it, turning it into stocks, futures or other obligations go the the owners, that is the banking industry. Since the end-value of your yellow portfolio is an order of magnitude bigger than your red portfolio and the average time that it is out of your reach is about 20 to 30 years the big players can extract tremendous amount of wealth from it without making it obvious that they are robbing you blind.

Early capitalists were after your ability to work and deliver surplus value. In this new scheme your entire life - present and future - is in the hands of a twenty-something hedge fund manager with quick mind and fingers whose formative years were spent playing Grand Theft Auto.

There is a version of Axiom 3 (due to Alan Greenspan) which assumes in addition that the derivative dV(p,t)/dt is greater than zero, that is that the value of your property is always increasing in time. This version of the axiom  greatly simplifies economic calculations but unfortunately it turned out to be false. In 2008 the property values went down on a set of positive measure and many precarians become proletarians. The current version of Axiom 3 allows temporary reversals.

In summary - the presented theory demonstrates how of two people spending 8 hours in the office one can make many thousands times more money than the other. It describes a layer of economy where great deal of action is taking place while nothing is ever being produced or consumed. And finally, it describes optimal strategies for small and big players.

In the presented system, everybody benefits (although not equally), and a significant portion of the society gets a sliver of the american dream. For this to work well however it is best if they remain asleep.

Sub-three sigmas unite!

In my last posting I complained about the lack of a new Communist Manifesto that would explain the world in simple terms and show the way forward. Here is my try at such a piece (and I dedicate it to Ayn Rand.) 

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 The history of mankind is the history of exceptional people. They are the ones who come up with the ideas, create and invent things, become role models, and lead the others. For the exceptional men and women are like an active ingredient in any medication - little of the good thing surrounded by massa tabulettae - an inert medium acting as a carrier.
What does it mean to be exceptional? Lets just say that it means that regarding some special ability one belongs to the top one percent. Top one percent means more than 2.57 (a bit less than three) standard deviations (sigmas) away from the mean. Being exceptional is not correlated with race, gender, age, education, income and so on. While it is hard to excel in any particular thing, it is much easier to be good at something. Sadly, only very few of us make use of our abilities while the rest tries to emulate somebody else's.
 While nothing of importance happens without exceptional people being involved, the forces of mediocrity are constantly conspiring against them and try to deprive them of their special properties. And of those forces the government represents the most powerful adversary, an iron fisted  mindless destroyer of talent.
Consider the most common ways to be exceptional - wealth, intellectual and physical abilities - and see how government relentlessly tries to undercut them.

 Wealth

Getting your first billion is hard work - many hours, a lot of risk and perhaps one or two things that you are not proud of. But now that you have made it, you want to cash in on your accomplishments. You want to be pampered and respected and you do not mind to be called a "job creator" even if the jobs you create are on a different hemisphere. But no, the big government swoops in and tries to take away your hard earned money, 15% of it or so. This is 150 mil for gods sake! who has this kind of cash to give away! Rather than requiring that everybody pitches in equally, they target you because you stand above the crowd.

 Intellect

You are six years old and suddenly you notice that everybody around you is sooo slooow. They read slowly, they think slowly and they do not seem to understand basic things. You are just a kid, and you do not know much but the rubbish that people tell you cannot possibly be right! This is where the government steps in. For the next twelve years you will be locked in a high security prison known as a public school. You will be bored to death, teased without mercy and if you do not toe the line you will be repeating classes that you should not be taking in the first place.

 Physical ability.

You are a runner and you dream of running a 100 meter dash under 9 seconds, or a marathon under 2 hours. Impossible? Not quite, and big pharma is here to help. All that stands in your way is the government with its lawyers and regulations. They will humiliate you and strip you of your medals if you follow your dreams and allow science to help your body to accomplish what it was meant to do.

 So what can we do? How can we remain strong?

Sub-three sigmas unite!

Get out of the glass jar of your talent and seek out other sub-three sigmas. You are unique and exceptional but it comes at a price. The great ability that makes you a sub-three sigma may have pushed aside other parts of your personality. You may be lacking social skills, be an incomprehensible introvert or simply an arrogant asshole. This is where another sub-three sigma with a different skill set can help and save you. The energy coming from building synergistic connections is enormous and the power of networking is unparalleled.

 Consider the following examples to see what could be accomplished. They are modeled on  what in the domain of science represent the most treasured form - multidisciplinary research.

 Albert Einstein and Wayne Gretzky

Instead of wasting years on trying to develop socially irrelevant grand unification theory, we would end up with better physics of ice and scads of commercial applications. In defiance of laws of thermodynamics energy-free ice creation would make frozen water available throughout the planet. Transformative aspects involve creation of hockey leagues in equatorial countries, desalinization of sea water and (possibly) staving off  global warming by increasing the Earth reflectivity through multiple hockey fields. And last but not least, we would get a better Zamboni machine.

 Paris Hilton and Isaac Newton

 While Isaac invents calculus Paris keeps his mind off nasty Leibniz and makes sure that he is not described as "asexual" four hundred years later. More importantly she looks at the educational side of calculus and the rest of mathematics. Transformative aspects of this duo involve making mathematics a cool subject and its teachers trendy and well dressed individuals paying attention to personal hygiene. Centuries later kids would look forward to be taking math classes as places to socialize and hang out. Expect modern fashion industry and computer age to come about two hundred years earlier.

 Noam Chomsky and Saint Francis of Assisi

 How can we think of communicating with extra-terrestial civilizations if we cannot figure out what our cat thinks of our table manners? This team would change it all. Saint Francis' zeal to give sermons to all creatures endowed with ears will be combined with Chomsky's understanding of language formation for the efficient inter-species communication. Finally when looking at our "little brothers" we will stop wondering how to cook them and focus on their thoughts and feelings. Plague of obesity will be eradicated when animal products will disappear from our daily diet. Equal rights for all the species and participation based on genome complexity will be established.

 So sub-three sigmas unite! As we enter dark days of the XXI century you are our only chance to go forward. United you stand but divided you fall as the evil forces of government are constantly conspiring against you. Hook up and multiply and let the freedom reign!

Not enough math - too much math

There is no substitute for understanding the world around you and mathematics is a way to get there. A few differential equations will give you the right level of objectivity, while too many may leave you wanting to look elsewhere. Consider these examples.

 It is year 1867 and life is completely miserable when Karl Marx publishes the first volume of Das Kapital, Kritik der politischen Ökonomie. The book lays out the basic theory of wealth. The key concepts are "surplus value", "means of production" "accumulation of capital" and so on. It is simple and it is almost built from the first principles. I am reluctant to speculate since many of my family members have intimate knowledge of Marx' work (while I do not) but I think the theory is so useful because it allows to be twisted, adapted, extended and used in so many different ways. It helps those that agree with it as well as those that do not. At a closer look, the book is easy to read but extremely boring. There are hundreds of examples but there are no formulas, tables, graphs or pie charts. Lack of a single differential equation when the whole thing is about "maximizing the surplus value" is just sad. Obviously the standards of academic discourse that Marx was subscribing to were limited by the toolbox at his disposal, but it is amazing how poorly the whole thing is put together. A modern version would come with a dvd, video clips of slaving workers, champagne sipping capitalists, and the Red Army choir gently humming The Internationale in the background. Of course Marx understood that Das Kapital is not for everybody. Consequently, it was preceded by the Communist Manifesto, a piece of inspired and energetic writing, that channeled the key ideas of Das Kapital while spicing them with tidbits about wife sharing among communists. It is a work of great enthusiasm and also an excellent brainwash. So as it stands, these writings laid out transformative ideas for the XX century. Although the take home message for the average Joe was "you are being screwed" Das Kapital gives a very clear guidance on how to get rich - wealth comes from hard work, and preferably someone else's work. For hundred years afterward these concepts were followed and the idea of acquiring a machine and putting a redneck in front of it fired up the imagination of millions of gold diggers.  It is clear that many millions of lives would have been spared if the the word "mathematischen" replaced "politischen" in the Das Kapital sub-title. A few partial differential equations and a chapter or two on the point of diminishing returns, tipping points and such things would have possibly kept political wackos at a distance. Certainly the last hundred years would have been easier if this theory was build more on mathematics and less on propaganda.


 Fast forward to 2008 when the world's economy is brought to its knees. Marx's theory seems now obsolete and creation of wealth is no longer linked to human labor or to manufacturing in general. Consider Renaissance Technologies - a hedge fund with less than 300 employees that in 2009 had over 1 billion in profit. With no orphans working 12 hours in the production line or other workforce abuses, these profits raise few eyebrows. A simple question about where this wealth comes from seems strangely neglected and the message for the average Joe appears to be "nobody is getting hurt ". This time mathematics is abundantly present and it obfuscates everything.  The point is that modeling behind high-frequency trading, CDOs and so on relies heavily on mathematics, but mathematics is not used toward better understanding of the bigger picture. If the XXth century was about the creation of wealth, then perhaps the XXIst is about the redistribution of it.  It is entirely possible that this is a zero-sum game and profits of hedge-fund managers indicate that everybody else is getting just a little poorer.
So  where is the next Communist Manifesto that would explain it all in simple terms, blame the guilty and provide the ideological backbone to the Occupy Wall Street movement? Where?! It is time for ten tweets that will change the world!

Ministry of Everything forges ahead!

Big Gala

Botany Unit is a small part of Ministry of Everything, and our organization is undergoing  significant transformations. Just the other day we had All Comerades on Deck meeting. Since we are such a large organization it took place in a nearby Fire Station, and still we had to do it in three shifts! 

We were first and I wish we wern't. It was early morning and comrades were still not fully awake. The leadership was trying to raise the spirit with The Interantionale but our voices were feeble and tired.

The leading idea for the meeting was "One of Everything". My colleague joked that this is right - in the communist  system one is plenty and two would be already too much. I am still thinking whether I should report these subversive comments to the management… Anyway, I think it is like in the poem of Mayakovsky:

                         The Party and Lenin are twin brothers,

                         when we say one, we mean the other.

One of Everything means unity and togetherness in a vague and imprecise form. It is a way of thinking that allows more important units a bigger share of the resources, and less important ones to continue making  sacrifices. This way everybody feels appreciated and contributes to the common goal!

The minister and his deputy sat at the podium with a little fern between them. Fern is a beloved plant of our Party and no serious meeting can occur without one. The first half an hour were the production statistics. It was clear that we are are beating capitalist pigs left and right but as usual the complete victory is elusive.  So more sacrifices have to be made, longer hours, less food and more attention to political purity. 

Next we had a brief period when comrades could ask questions to our leaders. Three questions were asked and they concerned fairly peripheral aspects of our organization. Our system is based on democracy and free exchange of ideas but constant questioning of everything (that capitalists are so proud of) is only a sign of poor education. In our society, citizens already know the answers so there is no need to ask many questions!

At the end of the ceremony we saw a propaganda film about our Ministry. Comrades filmmakers did a good job… The film starts with the great battles of World War II and then shows our soldiers fighting in Korea, Vietnam, our special units building missile silos in Cuba, removing american mines from harbors of Nicaragua, and so on. There is even a short clip showing children putting sugar into a fuel tank of a big truck with the US Army logo! Good brave kids with the right revolutionary zeal! Instead of traditional Tchaikovsky soundtrack, the movie features some  battle noises, and it is shot in color! Excellent job! I am sure that our Ministry will be on the minds of our citizens as a  key contributor to country's welfare and a bulwark against capitalist disease.  However,  I still have this feeling that it is a bit of misdirection. Of course battling capitalist pigs is very important but this is not exactly what we do and our contributions are far more subtle.  

Acceleration

This is an idea that came straight from the Central Committee. We are supposed to do everything just a little faster and in the end it will result in a great leap forward. Different units use different metrics so let me explain what it means for the Botany Unit. We are about growing things and this is tied up to a yearly cycle.  However, three-field crop rotation is the most common of our activities so the bulk of our actions is on a three-year schedule. In addition we have somewhat experimental five-field crop rotation.  Three years ago the Party felt that the victory is near and we got a lot of extra resources. Botany Unit got extra seeds, machines and so on. We worked extra hard and made good use of it, in spite of the fact that  with farming it is more important that these resources come in a steady and predictable way. Anyway, at the urging of Central Committee we put some of these extra resources into the experimental five-year programs. And now this caught attention of our distinguished comrades and they suggested doing it in four instead of five years. This is a great idea in principle but in practice it does not make much sense. Things that were meant to last five years are usually difficult to do in four. However, the comrades in the central committee did not get these prestigious posts for paying attention  to whining of their underlings.  We have to comply and this is a simple order. As this plan is completely nonsensical from our point of view we came to a conclusion that this is a part of grand scheme that will result in an unexpected victory elsewhere. Yet we have to tell our farmers that whatever we gave them for five years has to be used in four or it will be taken away. As you can imagine, farming community is not happy about it but in the end they will toe the line. Everybody does.

Virtual farming

This is a new fad, and Botany Unit leads the way. Few years back our working groups had to include veterans, later soldiers and now they need to be partly virtual. This is all because the Party gave us new technology - each of our working units was provided with a phone! The devices look pretty ordinary but in the end they will reduce the costs, increase productivity and help with our fight against capitalism. We assign three assistants to every phone to monitor its operation and protect from damage or misuse.  This is an important assignment and for the moment we are not allowed to touch these devices. This crowds our farming units and unfortunately it lowers our productivity. This is because in the end the number of comrades that are involved in each unit is generally larger than it was  before but all these extra participants are not associated with the primary tasks. In addition this technology is very stable - it either works perfectly or not at all and unfortunately, the number of times that it does not work is still high. Luckily, the reasons are usually simple - mis-dialed numbers, disconnected cables or virtual farmer falling asleep. Perhaps if we were allowed to study these devices ourselves we could improve the effectiveness… I love technology,  but I also like the original idea of a farming unit. Working together on a field, being able to see and talk to one another, and afterward having a simple meal together - these things are  difficult to replace with technology even as sophisticated as a phone. For the most part virtual farmers send their comments in a letter and listening to their talking while we work on the field is often not very productive.

Advocating for science - a success story

One of the missions of our organization is to support basic science and the going is tough. Spending money on scientific projects is satisfying and fairly simple but getting the taxpayers to pay for it is not. So we struggle and complain. Yet acquiring resources for seemingly hopeless projects can be successful as the following example illustrates.

For quite some time I have been longing to became an owner of a Harley-Davidson motorcycle. In line of my opening remarks, this is an investment that is difficult to frame as a necessary family purchase. At the very least, it costs as much as a decent car, uses significantly more gas and has as much utility value as your brother's cocaine addiction. For me a Harley is a natural step to a bigger and fancier bike, but the connection is deeper. Somewhat obsolete technology, emphasis on form over content, and trading high rpm's for low-end torque resonate profoundly with the direction in which my life is going at the moment.

So yes, if my wife is a taxpayer in this equation it looks like a hopeless project and frankly, convincing an average citizen to spend a penny on algebraic geometry should be trivial in comparison! Furthermore, for my wife joining the Harley-Davidson family is somewhat comparable to joining the Manson family. In fact, I have have my doubts as all. After all, I have not been to Nam, I do not have tattoos, and I do not own an American flag. Yet I can recite most lines from Big Lebowski so perhaps some residual connection is there. 

Gestation

Every great idea is born in a quiet space and it requires some time. For several years I have been frequenting Harley-Daidson dealers and getting inspired. HD dealerships  are church-like places filled with beautiful bikes and the smell of fresh paint. You enter them caring your primordial sin of not having one of those bikes and giving some lame excuse for not correcting this error immediately. Yet Harley-Davidson priests are gentle and forgiving and they give you hope that you will mend your ways eventually. So you start thinking and figuring your options - a long and arduous process. 

It is really no different then when as a taxpayer you visit Harvard or MIT and you leave with the impression that you might grow a second brain one day or at at the very least your offspring will study there. 

Unveiling

Sooner or later your plan has to be laid out in the open. It is a precarious moment because this seedling of an idea can be squashed in an instant. The main objectives are 

1. present the plan as a joint idea,

2. create an atmosphere of inevitability around it

3. divert attention from the undesirable aspects of the project.

These are well tested methods of universal value whether you are getting a bike, changing the name of an organization or building a large telescope. This is where most of the projects collapse, but if you survived this part you are on a solid ground. Soldier on!

First contact

It is time for the first visit to the Harley-Davidson family with my wife. She does not know what to expect but a great deal of hostility is just below the surface. We arrive on time and are greeted by the salesman, the guy that I bonded with on several prior occasions. My wife challenges most of his statements and she behaves irreverently. However, the priest of Harley-Davidson is a professional and with the agility of Jackie Chan he evades confrontation. Eventually, the rescue comes in the form of a free Harley-Davidson coffee - a terrible and undrinkable brew that channels her  criticism in a safe direction. In comparison, everything else seems better and we start moving forward. My wife stops comparing the place to Home Depot - her most hated shopping destination and when we leave an hour later our wallet is lighter but there is a  "hold"  sticker on one of the bikes.

This is a crucial phase and there is no recipe for success. A mixture of scientists, taxpayers and politicians is combustible and nothing can be taken for granted.

Closure

The final day has arrived. My wife drops me off at the Harley-Davidson dealership and I am supposed to come back on a new bike. I am a lonely sardine swimming in a shark pool but I do not quite realize it. The key word is "options" and there are tons of them. I am enjoying everything so far, particularly the fact that there is no haggling and in fact nobody told me how much it all is going to cost. I am quickly lured into a service agreement which includes six  free bike washes. I have washed my old bike only once and the appeal of this service is boundless. As if this is not  revealing enough, my attempts to project an image of a bad-ass biker are squashed when I'm am being congratulated on being the first ever client with a perfect credit score. I briefly toy with the idea of alluding this to my white-collar crime activities but eventually I resign myself to be what a large portion of Harley-Davidson family must be - mid level bureaucrats who like to pretend on weekends that they are somebody else. 

Whether this is a new bike or new science the act of sale is always the same and a scientist is no different than a used car dealer. No effort is spared to provide the buyer with a lot of dubious extras, wool is pulled in front of ones eyes many times and utility of acquiring a dismemberment package is explained in a most creative way. 

Two hours later I hop on a new bike and head home. The ride is everything that I expected except that it is freezing cold and I have no windshield.

Aftermath

As with every taxpayer funded project that went a bit overboard the day of reckoning is near. Upon confessing that I paid thousands of dollars for six bike washes my wife becomes speechless and manifests quite unusual face discoloration. When she recovers, the errors in my judgment become glaringly apparent in the most explicit manner. I pledge to undo the damage as my membership in my family is being put on hold. In the end I rescind all extras, including parts that were supposed to be installed by the dealer. Harley-Davidson family Is not pleased either, they claw at my careless offerings and it looks like they plan to reject me as well. 

Alas in the end all is well. We sign a brand new contract and I get my bike parts. I confidently declare that installing them will be an utmost triviality only to discover at home how foolish these statements were. Luckily I am being rescued by a friend who mastered the zen of motorcycle maintenance.

In the end, the project is a roaring success and the path towards incremental upgrades and modifications is wide open. HD parts catalog resembling a phone directory of a mid-size town rests by my bedside and messes up my sleep patterns.

Future Science - Science of the Future

In the opening paragraph of Die Frage nach der Technik,  Martin Heidegger describes science and technology in the following sequel "Questioning builds a way. [ ]  The way is one of thinking. All ways of thinking, more or less perceptibly, lead through language in a manner that is extraordinary."  For a long time I have liked this description as particularly fitting for the mathematical and physical sciences (and I did not  read the rest of the book because I found it incomprehensible). These three sentences were quite clear - questioning builds a way towards understanding and understanding, miraculous and extraordinary, leads to discovery and innovation. This scheme lays foundation for the modern scientific method where the branches of the  Tree of Knowledge represent the ways of a conscious mind.

So is there another way to obtain knowledge? one that is not preceded by understanding but where the existing knowledge is leveraged to move between  points  where a human mind cannot follow? Perhaps, if machines are involved.

One possibility is offered by the Data Science and it is fairly simple. We can gather colossal amounts of data and extract knowledge from them. Neither task can be done without sophisticated tools. Consider Large Synoptic Survey Telescope - it is a marvel of modern astronomy that (when operational) will collect about 30 terabytes of data per night. This data will contain information about planets, supernovas, dark energy, and much more, and this is all possible because the Universe observed at this scale appears to be quite simple.The fact that we can simultaneously track a relatively small number of variables on a huge number of objects through frequent snapshots is all it takes to make discoveries that thirty years ago were not thought to be possible. Another such tool is the Kepler planet finder telescope.  With the marginal cost of finding new planets well below 1M a piece, commercial applications become possible…

When the setting is more complicated simple statistical tools  tend to fail. Consider the  Human Genome Project that was supposed to provide critical advances in medicine. Unlike in astronomy, the number or variables is very large and the data set is not big enough. In the end, fundamental advances in statistical reasoning are necessary.

Computational Science is another alternative, and the premise is simple - use the existing knowledge to compute and model the nature. In many cases it is the only way to gain some understanding of how the nature works. However, the methodological underpinnings of this process are inherently shaky, and when the stakes are high the results are questioned. Whether modeling of the climate or designing nuclear weapons the conclusions from computational models are difficult to verify and open to criticism. No wonder, even when only four arithmetical operations are concerned, the computer implementation may be deeply flawed as this incident shows. 

For most of the other things, computational methods are very successful.  Doron Zeilberger wrote:

Don't Ask: What Can The Computer do for ME?, But Rather: What CAN I do for the COMPUTER? This is a Faustian bargain but hopefully it will take some time  before we get there. Nevermind, consider Inverse Symbolic Calculator and play with it a little. As this article  illustrates the computer sometimes knows more math than you do.  Other examples abound - consider Eureqa or software developed by Ayasdi. Eureqa will "discover" Newton's Second Law of Motion based on the results of a countertop experiment, and Ayasdi's  software is likely to surprise you as well. Machine learning algorithms such as automatic translation between languages, Google's Page rank's calculations are all well known commercial applications  where a great deal of computational power goes to produce results that cannot be in any sense verified by a paper and pencil calculation.

So in the end do not  think that the battle is over and all goes to  Computational  Data Science and Engineering, Large Hadron Collider  and other projects that need electricity but no coffee.  Enjoy this and cheer up for human brain that operates on 1 watt of green energy.

Foreign language

I like photography. I like taking pictures, editing them, cataloguing, evaluating and labeling. Yet I have never paused to think what is the nature of photography, and how it relates to other things. So when my daughter gave me Camera Lucida by Roland Barthes I took the opportunity to step up to a new level. And while this is what happened in the end, the whole experience left me puzzled and uncertain.

 I read the book on a long flight - it is fairly short and it consists of about forty vignettes comprising two parts of the book. The writing style is peculiar, I was annoyed with the sentence structure, abundance of quotes and references, prolific use of latin, italicized words and more. All along I had the impression that the book represents a trip that my mind does not want to take, yet I glided from one sentence to another with relative ease. The main feature of the book is that while I understood most of the words, I hardly understood any of the sentences. After finishing the book, I have glanced at randomly selected phrases and I could not honestly say that I could parse them unambiguously . One would think at this point that this could not have been a positive experience. Au contraire, and here is why and how.

 The subject of the book is of course photography and it takes it from the first principles. There is no doubt that the author knows what he is talking about, although a reader like myself cannot grasp the meaning at some level. The discussion is akin to looking at a painting from a distance of one inch and establishing the language and physical evidence. The jig-saw puzzle of different bits and pieces is slowly absorbed by your mind and in end the picture emerges. I doubt if it is the same picture for every reader, and in this respect the book mimics the subject itself. This type of thing is common when watching someone paint or draw, listening to the music, reading poetry or watching a movie that was edited in a fancy way. However, I have never seen it, or even thought possible, in a scholarly work.