Humans struggle with allocating losses

Canada seems to have a weird atmosphere of being in a recession, but without that term being used and without the definition (in terms of GDP growth or contraction) being met.

This starts to make more sense when you see that the GDP growth is largely the result of population growth and growth in the labour supply – not increased output per worker. GDP per capita was $58,304 in Q1 of 2020 and $58,111 in Q4 of 2023. Meanwhile, according to the Bank of Canada’s inflation calculator, inflation has averaged 4% per year over the span, so C$100 in 2024 buys what C$85.48 would have bought in 2020. The average Canadian is getting poorer, even with all the stimulus that was given out over the pandemic and with all the new debt which has been accumulated. I personally think governments have been pulling out all stops to keep asset prices (especially stocks and houses) high since the 2008 financial crisis, with very little consideration of what those measures are doing to the non-affluent and those in future generations.

This is worrisome both in the immediate context and as a broader signifier. Daniel Kahneman’s Thinking Fast and Slow stresses how people experience gains differently from losses, and find a loss of any size more aversive than they find a gain of that size pleasurable. He comments on the social and political implications:

If you are set to look for it, the asymmetric intensity of the motives to avoid losses and to achieve gains show up almost everywhere. It is an ever-present feature of negotiations, especially of negotiations of an existing contract, the typical situation in labor negotiations and in international discussions of trade or arms limitations. The existing terms define reference points, and a proposed change in any aspect of the agreement is inevitably viewed as a concession that one side makes to the other. Loss aversion creates an asymmetry that makes agreements difficult to reach. The concessions you make to me are my gains, but they are your losses; they cause you more pain than they give me pleasure. Inevitably, you will place a higher value on them than I do. The same is true, of course, of the very painful concessions you demand from me, which you do not appear to value sufficiently! Negotiations over a shrinking pie are especially difficult, because they require an allocation of losses. People tend to be much more easygoing when they bargain over an expanded pie. (p. 304)

Globally, this pattern is alarming too. Humanity is choosing to persist in activities which we know will cause catastrophic climate change, loss of wealth, and unprecedented damage to the natural world which sustains us. We are also massively failing to invest enough in non-fossil energy sources to retain our current standard of life. This is setting us up for brutal inter- and intra-national fights over allocating losses.

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The nuclear razor’s edge

I listened to the audiobook of Annie Jacobson’s Nuclear War. Having followed the subject and read a lot about it over the years, it nonetheless had a lot of new information inside of a compellingly presented, plausible, and chlling story.

Our whole world can end in a couple of hours; live life accordingly.

Peter Russell tributes

In January, my friend and mentor Peter Russell died. His son Alex invited me to give remarks at his funeral reception: Remarks at the funeral of Peter Russell

Yesterday, I spoke at Innis College’s memorial event: Remarks about Peter Russell at Innis College

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Pfeffer on the limitations of intelligence as a path to power

Furthermore, intelligence, particularly beyond a certain level, may lead to behaviors that make acquiring or holding on to influence less likely. People who are exceptionally smart think they can do everything on their own and do it better than everyone else. Consequently, they may fail to bring others along with them, leaving their potential allies in the dark about their plans and thinking. Being recognized as exceptionally smart can cause overconfidence and even arrogance, which, as we will see in more detail later, can lead to the loss of power. And smart people may think that because of their great intelligence they can afford to be less sensitive to others’ needs and feelings. Many of the people who seem to me to have the most difficulty putting themselves in the other’s place are people who are so smart they can’t understand why others don’t get it. Lastly, intelligence can be intimidating. Although intimidation can work for a while, it is not a strategy that brings much enduring loyalty.

Pfeffer, Jeffrey. Power: Why Some People Have It — and Others Don’t. HarperCollins, 2010. p. 56

Taleb on the domain dependence of knowledge

I used to attend a health club in the middle of the day and chat with an interesting Eastern European fellow with two Ph.D. degrees, one in physics (statistical no less), the other in finance. He worked for a trading house and was obsessed with the anecdotal aspects of the markets. He once asked me doggedly what I thought the stock market would do that day. Clearly I gave him a social answer of the kind “I don’t know, perhaps lower”-quite possibly the opposite answer to what I would have given him had he asked me an hour earlier. The next day he showed great alarm upon seeing me. He went on and on discussing my credibility and wondering how I could be so wrong in my “predictions,” since the market went up subsequently. Now, if I went to the phone and called him and disguised my voice and said, “Hello, this is Doktorr Talebski from the Academy of Lodz and I have an interrresting prrroblem,” then presented the issue as a statistical puzzle, he would laugh at me. “Doktorr Talevski, did you get your degree in a fortune cookie?” Why is it so?

Clearly there are two problems. First, the quant did not use his statistical brain when making the inference, but a different one. Second, he made the mistake of overstating the importance of small samples (in this case just one single observation, the worst possible inferential mistake a person can make). Mathematicians tend to make egregious mathematical mistakes outside of their theoretical habitat. When Tversky and Kahneman sampled mathematical psychologists, some of whom were authors of statistical textbooks, they were puzzled by their errors. “Respondents put too much confidence in the result of small samples and their statistical judgments showed little sensitivity to sample size.” The puzzling aspect is that not only should they have known better, “they did know better.” And yet…

Taleb, Nassim Nicholas. The Black Swan: The Impact of the Highly Improbable. Random House, 2007. p. 194-5 (italics in original)

Sagan on self-skepticism

Perhaps the sharpest distinction between science and pseudoscience is that science has a far keener appreciation of human imperfections and fallibility than does pseudoscience (or “inerrant” revelation). If we resolutely refuse to acknowledge where we are liable to fall into error, then we can confidently expect that error—even serious error, profound mistakes—will be our companion forever. But if we are capable of a little courageous self-assessment, whatever rueful reflections they may engender, our chances improve enormously.

Sagan, Carl. The Demon-Haunted World: Science as a Candle in the Dark. Ballantine Books, 1996. p. 21

Bhargava and Luce on practical radicals

We wrote this book for a specific audience: the segment of the Left who might embrace the label practical radical. These are organizers who hold big visions for transforming society and are willing to do what it takes to win in the real world. Legendary organizer Bayard Rustin, a consummate practical radical, criticized two other dominant ways of approaching social change: “My quarrel with the ‘no-win’ tendency in the civil rights movement (and the reason I have so designated it) parallels my quarrel with the moderates outside the movement. As the latter lack the vision or will for fundamental change, the former lack a realistic strategy for achieving it. For such a strategy they substitute militancy But militancy is a matter of posture and volume and not of effect.” Practical radicals are not content to be on the right side without a plan to make their vision a reality. And they are not satisfied with working on small issues without an analysis of what’s wrong with society and a vision for how it could be better.

Bhargava, Deepak and Luce, Stephanie. Practical Radicals: Seven Strategies to Change the World. The New Press, 2023. p. ix-x (bold and italics in original)

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Reviewing an unreleased book and TV show

While it won’t help with my rent, I nonetheless have some very interesting work for the next few days.

I am doing a close read twice of Professor Peter Russell’s forthcoming memoirs, which has been a privelege because of the respect I have for him as a thinker and a person, and a joy because of their colour, humour, and personality.

I am also previewing a new series of James Burke’s TV show Connections, which previously ran in 1978, 1994, and 1997. I have seen those old shows many times, and I thought a lot about his book The Axemaker’s Gift back in high school. I have the chance to interview him from Monaco on Wednesday, so I am giving the new material a careful viewing and thinking through how to make the best use of the conversation. There is scarcely a person I can think of who has a more educated and wide-ranging understanding of the relationships between science, technology, and human society. Since human civilization is presently hurtling toward a brick wall which threatens to rather flatten us all, it may be invaluable to get Burke’s views on how a defensive strategy from here can be undertaken.

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Exciting reading material

I am still job-hunting, but life has given me a bit of a treat to work on between those efforts. I have two new books from professors I know at U of T to read.

Already published and available to everyone, there is Steve Easterbrook’s Computing the Climate: How We Know What We Know About Climate Change.

Still in the works, possibly for another year, are Peter Russell’s draft memoirs, which he has been kind enough to let me read.

I will be working on both before today’s Critical Mass bike ride, which I expect will be the last with decent weather before spring.

Emotional maturity and self-reflection

Emotionally mature, responsive people have an emotional engagement instinct that works smoothly. They like to connect, and they naturally give and receive comfort under stressful conditions. They are sympathetic and know how crucial friendly support can be.

They reflect on their actions and try to change. Emotionally mature people are capable of taking a look at themselves and reflecting on their behavior. They may not use psychological terms, but they clearly understand how people affect each other emotionally. They take you seriously if you tell them about a behaviour of theirs that makes you uncomfortable. They’re willing to absorb this kind of feedback because they enjoy the increased emotional intimacy that such clear communication brings. This shows interest in and curiosity about other peoples’ perceptions along with a desire to learn about and improve themselves. Willingness to take action as a result of self-reflection is also important. It isn’t enough to just say the right things or apologize. If you’re clear about what bothers you, they’ll remain aware of the issue and demonstrate follow-through in their attempts to change.

Gibson, Lindsay C. Adult Children of Emotionally Immature Parents. ch. 11, 25:00 – 26:20