P+ε attack on the Koch brothers

Disclaimer: This is not about politics, but about game theory and recent developments in the cryptocurrency world. And a bit about politics.

The Golden Age of Lobby

This week’s announcement that the Koch brothers backed advocacy groups aim to spend almost a $1 billion on the 2016 elections stirred quite some concerns about disproportionate influence of lobby on the US political system.

On the bright-side, I guess it is nice that there still are Moore-like trends in contemporary economics – $1 billion is more than doubling the money spent on lobby during the 2012 elections. 100% growth in 4 years, and able to employ at least $1 billion at positive expected return? Sign me up!

John Stewart explains, that it is “grotesquely unfair to paint the Koch brothers as nefarious billionaires.” They are more like “benevolent god-kings”.

Buffet’s Billionaire’s Buyout Plan

Still there are many killjoys around, who think that political lobby is a poison in the veins of the democratic process. Warren Buffet, a fellow billionaire (and apparently a billionaire backstabber) proposed several years ago a reactionary solution – to return to effectively pre-1978 lobbying rules:

Suppose that a reform bill is introduced, raising the limit on individual contributions to federal candidates from $1,000 to, say, $5,000 but prohibiting contributions from all other sources, among them corporations and unions. These entities could still encourage their employees, stockholders, or members to contribute personally, but could do no more […]

Fortunately, no bribe-affine politician in his right mind would agree with this! No worries, this will never pass through Congress. Except that Buffet has some Jedi-level game theoretic trick up his sleeve:

Well, just suppose some eccentric billionaire (not me, not me!) made the following offer: If the bill was defeated, this person — the E.B. — would donate $1 billion in an allowable manner (soft money makes all possible) to the political party that had delivered the most votes to getting it passed. Given this diabolical application of game theory, the bill would sail through Congress and thus cost our E.B. nothing (establishing him as not so eccentric after all).

Emphasis mine. Think this carefully through, it’s a beauty.

P+ε attack on Bitcoin

This week also brought Vitalik Buterin’s reworking of Andrew Miller’s SchellingCoin attack for Bitcoins. And in fact this attack is isomorphic to Buffet’s trick! There are some interesting implications too:

Hence, from a cryptoeconomic security standpoint, one can in some sense say that proof of work has virtually no cryptoeconomic security margin at all […]

Proof-of-stake vs. proof-of-work is one of the most controversial topics in the cryptocurrency world and this finding undermines some arguments on the side of the proof-of-work. Will be interesting to follow

PS1: Incidentally, net_worth(Buffet) ≈  net_worth(Charles Koch) + net_worth(David Koch). Maybe going for a good old 51% attack?

PS2: More Buffet game theory goodness: Buffett’s $1 Billion Bracket Bet.


MOOCs in an hourglass economy

Last time we discussed Alexandre Borovik‘s analysis of the crisis of the mathematical education and its socio-economic roots and impacts.

While I fully agree with Borovik’s analysis, I do miss one factor that can be important for the future of education – Massive open online course (MOOCs). They have several limitations in their current iterations and it is almost comic to see the awkward monetization schemes that many providers are currently experimenting with. However, I think that they do have a disruptive potential on higher education and it is only a question of time that we will figure out how to do them better.

The promise of MOOCs

MOOCs can address several of Borovik’s requirements for a better education. They provide wide access to the best mentors, allowing access to some elements of the “deep education” to a larger audience of pupils. Some personalization of the content is possible, though they can’t be as deeply personal as say a Zunft system. In my opinion, however, they provide a very acceptable trade-off point on the availability – personalization axis.

While I was lucky enough to have several excellent teachers during my education, it never was tutoring on individual level. I think the impact of individual mentorship might be generally overestimated, with an exception on the extreme high-end of achievement spectrum. A MOOC could there at least give the mentor access to the highest performers to spin-off deeper, smaller circle education.

Cognitive inequality and the hourglass economy

Borovik talks about an hourglass economy: in a technologically advanced society, there is no market demand for “middle” level mathematical skills. The largest fraction of population requires only rudimentary arithmetic for its everyday life (using a calculator or a spreadsheet at best). On the high-end there is a very small group of high-skill workers required to develop and implement the newest technological advances.

MOOCs do not solve the disappearing middle problem. In fact they might be driving an even larger wedge between high- and low- ability ends of the distribution. This is because they rely more on self-motivation and therefore profit strongly those that have not only high aptitude, but also a high “appetite” for knowledge. This contributes strongly to the growing cognitive inequality, but by tapping into a wider population, it might be sufficient to fill the upper bulb of the hourglass economy.

The cognitive inequality gap will be a very important factor in the near future (it is showing already now). It runs very deep into our cores – indeed in our genetic essence – and we do not have simple mechanisms to alleviate it, like taxation in case of wealth inequality.

MOOCs, assuming they stay free and internet access continues to spread in developing countries, have here at least the upside, that they rely purely on self-selection. The burgeoning cognitive elite doesn’t receive its status from an “entitled” institution or similar but is self-selected by its own virtue of putting time and effort into self-education. The system can be also more meritocratic than most of its alternatives.

Late end-game?

Lot’s of questions and not many solutions. Ultimately, however, it might be also simply too late to worry. If development of an artificial general intelligence is maximum a few decades in the future, human knowledge, may it be as deep as it wishes, will soon be completely left behind. The ultimate limit is clear and independent of the exact timing – as illustrated by Greenspan’s quote in Borovik’s paper:

While there is an upside limit to the average intellectual capabilities of population, there is no upper limit to the complexity of technology.

How to grow stem cells for a technologically advanced society

This is a first installment of the Sgt. Pepper’s Lonely Hearts Journal Club, where we will monologue about interesting papers.

This week’s pick is:

Alexandre V. Borovik – Calling a spade a spade: Mathematics in the new pattern of division of labour


The paper looks at the socio-economic roots of the crisis of mathematical education. As the economy of developed countries is turning more and more technology- and knowledge-intensive, the demand on mathematical ability becomes bimodal: most of the population doesn’t require even the most rudimentary arithmetical skills, while a very small cognitive/technological elite requires ever-specializing knowledge. This deep knowledge hard to acquire both because of length of training and scarcity of quality teachers.

The dire state of mathematical (and science) education is then both caused by the market economics (it is a very expensive and highly uncertain investment for pupils, demand is low in terms of number of employments) and in the long-term it feeds back into the system as scarcity of deep expertise.


The paper is chock-full of good quotes. Here is a selection, paper is worth reading in entirety.

Position of mathematical education and the source of its crisis

concentrate on mathematics education, as an important and well documented area of interaction of mathematics with the rest of human culture.

[…] forces that drive these changes come from the tension between the ever deepening specialisation of labour and ever increasing length of specialised learning required for jobs at the increasingly sharp cutting edge of technology.

As an example of long-term infeasibility of over-specialization:

There are more mobile phones in the world now than toothbrushes.[…] However, practical necessity forces us to teach a rudimentary MP3/MP4 technol-ogy, in cookbook form, to electronic engineering students; its mathematical content is diluted or even completely erased.

This leads to an interesting contrast between high- and low-skilled labour:

In the clothing industry nowadays, cutters are replaced by laser cutting machines. But a shirt remains essentially the same shirt as two centuries ago; given modern materials, a cutter and a seamstress of yesteryear would still be able to produce a shirt meeting modern standards […]

What a 19th or 20th century cutter would definitely not be able to do is to develop mathematical algorithms which, after being converted into computer code, control a laser cutting machine. Design and optimisation of these algorithms require a much higher level of mathematical skills and are mostly beyond the grasp of the majority of our mathematics graduates.

The driver for this change:

It is this tension between the ever-increasing degree of
specialisation and the ever-increasing length of specialised
education that lies at the heart of the matter.

Disappearance of middle-level skill level from the point of view of economy:

Despite popular perception, the middle is gradually disappearing to create an ‘hourglass economy’.

[…] consequent declining need, among most of the population, regarded as employees or workers, for the kinds of skills (language skills, mathe-matical skills, problem-solving skills etc.) which used to be common in the working class […]

Dumbing-down is a rational—from the capitalist point of view—reaction to these labour-process developments. No executive committee of the ruling class spends cash on a production process (the production of students-with-a-diploma) that, from its point of view, is providing luxury quality.

And from the from the point of view of the students:

Certain levels of mathematics education are not supported by immediate economic demand and serve only as an intermediate or preparatory step for further study. From an individual’s point of view, the economic return on investment in mathematical competence is both delayed and less certain.

The outcome (emphasis mine):

As a result, the West is losing the ability to produce competitively educated workers for mathematically intensive industries.

Any chance to remedy the status? The path through standard education is hard:

The job market is changing fast and improving education is a slow and difficult process.

Mathematics education has a 15 years long production cycle, which makes supply-side stimuli meaningless.

Many people have high hopes for computerization of mathematical education. Borovik is rightfully skeptical:

[…] when a certain previously “manual” mathematical proce-
dure is replaced by software, the design and coding of this software requires a much higher level of mathematical skills than is needed for the procedure which has been replaced—but from a much smaller group of workers.

Another possible path is deep education via homeschooling, “math circles” (clubs) or via “Zunft system” – highly specialized, deep mentorship in an almost family setting. The problem with those solutions is that they do not scale to sufficient number of pupils as the number and time of high-quality mentors is very limited.

Borovik provides several examples of tensions and problems in the current education system (memorization, meaningless repetitive tasks, discussion around long division, the impact of smartphones and universal mathematics-solver software).

The ultimate aim would be to provide “deep mathematics education” – a concept developed by Maria Droujkova:

When I use the word “deep” as applied to mathematics education, I approach it from that natural math angle. It means deep agency and autonomy of all participants, leading to deep personal and communal meaning and significance; as a corollary, deep individualization of every person’s path; and deep psychological and technological tools to support these paths.

This is important because:

The potential for further intellectual metamorphoses is the
most precious gift of “deep mathematics education”.


I lived through sufficiently many changes in technology to become convinced that mathematically educated people are stem cells of a technologically advanced society, they are re-educable, they have a capacity for metamorphosis.

Finally, this presents the Democratic nations a trilemma:

(A) Avoid limiting children’s future choices of profession, teach rich mathematics to every child—and invest serious money into thorough professional education and development of teachers.

(B) Teach proper mathematics, and from an early age, but only to a selected minority of children. This is a much cheaper option, and it still meets the requirements of industry, defence and security sectors, etc.

(C) Do not teach proper mathematics at all and depend on other countries for the supply of technology and military protection.

Anti-inductive environments and social fermions

Phatic and anti-inductive environments

Scott Alexander has an excellent article on phatic vs. anti-inductive environments. He contrasts content-free communication (phatic, “talk-for-talk’s sake”) used for social signalling [1] with anti-inductive communication – coming up with unusual insights, that have not yet demoted to clichés by overuse [2].

Epistemology and anti-inductivity

The archetypal example of an anti-inductive system is the stock market (especially under the strong version of efficient market hypothesis).

Let’s say two stock prices are historically anticorrelated – the variance in their returns moves in opposite directions.  As soon as everyone believes this, hedge-fund managers will leverage up and buy both stocks.  Everyone will do this, meaning that both stocks will rise.  As the stocks rise, their returns get more expensive.  The hedge-fund managers book profits, though, because their stocks are rising.  Eventually the stock prices rise to the point they can go down.  Once they do, hedge-fund managers who got in late will have to liquidate some of their assets to cover margin calls.  This means that both stock prices will go down – at the same time, even though they were originally anticorrelated.  Other hedge funds may lose money on the same two stocks and also sell or liquidate, driving the price down further, etcetera.  The correlative structure behaves anti-inductively, because other people can observe it too.

– Eliezer Yudkovsky, Markets are Anti-Inductive

Anti-inductive environments are fascinating, because it is here that the bread-and-butter of “standard epistemology” – inductive reasoning – breaks down. I put quotes around “standard epistemology” because obviously this is exactly what hard-line Popperianism warns against (currently its most vocal proponent being Nicolas Nassim Taleb of the Black Swan fame).

Nonetheless, we do use induction all the time, trading off robustness of predictions for efficiency. It is indeed a great tool – assuming you are in an inductive environment (so definitely not in stock markets). Induction also works better, if you are close to the right solution (a local optimum in the solution space) – say ordinary, regular day-to-day problems. It does not work well with not well mapped solution spaces – say the cutting edge of science. That’s why we should rely there on falsification rather than induction.

Utility vampirism

The second key point is that anti-induction drains out any information value, the more it is acted on or decreases the utility of a given resource the more it is utilized.

Besides stock market, Scott mentions job interviewing as anti-inductive. Can we come up with other examples?

restaurant and VACATION Recommendations

These are typical anti-inductive situations: say you find a perfect vacation spot. The more people know about it, the worse it gets due to overcrowding.

traffic recommendations

If the GPS recommends the same alternative route to avoid a traffic jam for everybody, it potentially creates a new traffic jam.

The hipster Dilemma

Hipsters have it though. Saying: “I liked X, before it was cool” (for X being an indie band, foreign movie, underground writer etc.) is needed to signal your superior aesthetic taste and intellect, but at the same time devalues the resource X, by making it less obscure.

Social circles

“I don’t want to belong to any club that would accept me as one of its members.”

— Groucho Marx

You want to join social circles so that they increase your status. That means that your status has to be lower than the average of the social circle. If they accept you, the average status of the group decreases. And vice versa, a group wants new members with status higher than its average status, but why would he/her want to join?

Shared resources and tragedy of Commons

Many shared resources have anti-inductive features. The experience of a great movie can be ruined by an overcrowded cinema etc. This all is closely related to the tragedy of commons.

Solving anti-induction with Fermi-Dirac statistics

Interestingly, “crowd-aversion” behavior has a parallel in physics. Fermions are elementary particles with half-integer spins that follow the Fermi-Dirac statistics. Examples are quarks, leptons (e.g. electrons) and any composite particle from odd-number of fermions (e.g. protons and neutrons) [3].

Fermions obey Pauli’s exclusion principle: two identical fermions cannot occupy the same quantum state simultaneously. That’s why electrons don’t just bunch up on the lowest orbit in an atom and give rise to all kinds of interesting chemistry, such as you and me.

Recommendation engines can meet the required degrees of crowd-avoidance by incorporating a fermionic replusion term in their objective function.  A vacation recommendation engine therefore will not recommend both you and me the top place (giving us both a miserable time), but splits us between the few top ranked locations maximizing our overall satisfaction.

So did we solve anti-induction? Not so fast grasshopper! Maybe there is a second order anti-inductivity? As the old zen master asks: if an algorithm finds a trend, is it still cool?

I will leave as an exercise to the reader to work out the principles of a fermionic-stock market (herd behaviour? No problem!) and a fermionic utilitarianism (repugnant conclusion? Not for us!).

[1] Key here is that this is not a judgment statement. Content-free signalling is in fact important in many circumstances, albeit makes nerd-y types like us uncomfortable.

[2] Being true to Robin Hanson, anti-inductive communication is not about insights, but it is too about signalling just as phatic communicaiton, except it signals high cognitive capability and creativity (and hence a good genetic fond) instead of social alignment.

[3] For completeness, the counterparts to fermions, the integer spin bosons, do not mind crowds and they too can serve as a metaphor (and maybe more) in socio-economic systems, such as modelling monopolies/winner-takes-all dynamics in social networks via a Bose-Einstein condensation.

Turning consumer materialism into mindfulness using its own weapons


Using implementation intention, we can create a distributed meditation practice. With a bit of semiotic Aikido, we’ll then turn corporate logos into micro-meditation triggers. It will give more sense when your read it, I promise.

Benefits of meditation

Currently, there is a heaping mountain of evidence for benefits of meditation. Instead of a careful bibliography, I’ll just lazily point in the general direction of wikipedia. While the recommended daily doses is about ~20 minute of sitting mindfulness meditation, this stays an elusive goal for many.

Several authors came up with different, more portable versions of mindfulness practice (e.g. 2 minute meditation or the “Mindful minute”), as replacements of sitting meditation or as an addition to the main daily practice.

Micro-practice and distributed meditation

The limiting case to this minimization trend is what I call “Just one breath practice[1]. On various occasions during your day take one deep breath – in-and-out – paying full, undivided, non-judgmental attention to it and your bodily sensation.

Just one single breath, that is not asking too much, right?

The aim of this micro-practice is to refocus the mind, decrease stress and bring back the attention to momentary, mindful experiencing. We try to insert as many mindful breaths into our day as possible in hope to spread out the benefits of meditation through the whole day. Paying attention to many individual breaths during your day creates a distributed meditation!

The programmable self

The only tricky thing is to actually remember to do these mindful breaths in the maelstrom of your daily life. That is where “Implementation Intention” comes into play.

An implementation intention is a psychological if-then-rule, whit which you condition yourself to execute a certain desired behavior, when a simple trigger occurs in your environment. An example: “if I come home, then I will do 5 push-ups”.

The idea behind it is, that willpower is a very scarce resource (in first approximation linked to glucose levels in your neo-cortex). You increase the chance to create a desired habit, if you replace the need for willpower with an automated reactions to certain triggers.

For more details on implementation intention triggers see for example this review paper.

The next catch is where to find good triggers. The standard trigger classes are: time, place, emotional state and your reactions. But can we come up something more fun?

The marks of the devil

Is there something in our daily environment that is ever-present and glaringly obvious? Something that could function as a good visual cue for our micro-mindfulness practice?

Fortunately, the gentle, kindly giants – our multinational corporations – have not spared expenses and focus groups to develop and placate our environment (both off- and online) with excellent visual triggers. We’re so lucky!

The marks of the devil. Or pavlovian cues to a more spiritual life? I always confuse the two.

 We can now build triggers such as “If I see the Apple logo, I take a mindful breath”. “If I see a McDonald M, I take a mindful breath.” etc.


You can even use the breath, to mindfully examine our undesired cravings for a burger or a shiny gadget!

With this semiotic Aikido, we re-purpose the very symbols of consumer materialism to a more mindful, compassionate ends! High-tech corporate memes used as execution hooks for 2000+ year old spiritual memes.

This is definitely a flower-child/hippy idea, but I sort of like the irreverence of it. Or take it as an anti-consumerist  performance-art project! 🙂

Additional notes

1. What about creating triggers for the logo of your cigarette brand? When you reach for another cigarette and notice the logo on the pack, you’ll be compelled to take a mindful breath before lighting up. This creates an intention gap, that increases the chance of letting go/transforming your impulse. Worst case, use it to smoke mindfully.


2. Other obvious iconography that can be used as visual triggers are traffic signs – though I obviously do not recommend this, especially not for drivers. 🙂

3. Of course, you can use implementation intention to create a trigger for you standard practice, e.g. “If I finish cleaning my teeth in the morning, then I go meditate for 20 minutes”.

4. We might return to this topic in the future, to discuss how to use another trick of cognitive psychology – spaced repetition – to efficiently implement mental triggers in our wetware (brains).

[1] The term comes up in different connotations. I believe I heard somebody in the same context as here, but can’t seem to find the reference. Back to the text.