Have you written a piece that really should be separated out into many short excerpts or blogs; you do so only to combine them again; realizing there is too much overlap to continue in that method? That is this post. :) A friend recently said that most movies and songs will always come back to where they started (I believe to keep people comfortable - the happy ending story); this blog post will certainly not invoke those thoughts. Ive never found full circle to be reality unless the individual, the character, the writer never really wanted to move beyond current existence to begin with. If that's the case, why write the play, the song, or the movie? Yeah yeah...
I've spent the weekend thinking about many things; among them, desire, human drive, intervention, interaction, economics, materialism, the human brain, "starters" versus maintainers and their gap; homeostasis or the psychological desire to maintain status quo to reduce tension, equilibrium points, internal stability, core responses, and the brain - particularly the fear many have of neuroscience ... that understanding it at its core might document what many suspect.. that humans have less free will than we think and are a product of our environment and our minds' perception of it rather than free thinking, useful, pragmatic organisms.
I am convinced these are all highly related to one another. It might take me years to figure out precisely how but we all have to start somewhere. ;) Perhaps this thought process started with the many friends, acquaintainces and business partners I have that seem to be terrific "starters"; they love creating something new. Yet several months into it, the desire to complete the project, book, company, relationship etc and drive to do the same seem to be disconnected. Some argue that it is because homeostasis (or in economics, equilibrium) is boring - so although any objects natural state is to try to expend the least amount of energy (and thereby stay at equilibrium), sometimes the desire and excitement of something new creates enough momentum and energy to move beyond this point into actual action. As something becomes the norm, it, too, is equilibrium and no longer requires the energy expense. This explains many things in life I believe.
Yet how do we explain then how objects that are in motion (baseballs included), including the human energy element, tend to slow over time.. beyond the physics involved. It would seem natural that the further along we as humans get into something and the more of a challenge it becomes (growing is hard), the more we'd continue to persevere until the mission is accomplished; yet the opposite seems to happen in real life. This is explained through physics and quick studies of the brain, but it seems illogical and a bit maladaptive to successful strategy of any sorts.
Many people put just as much energy into staying at equilibrium as they do getting out of equilibrium. I have many friends that do their best to maintain status quo and pour their heart and soul into it; and friends that seem to get themselves into situations just to create disequilibrium to get some sort of temporary satisfaction and high, only to go back to equilibrium when things become a bit too hectic or, to use a non scientific word, scary for them. Humans have too many motivations to begin to try to evaluate why this is the case; but it does lead to a great question - who should those who try to create disequilibrium but want to constantly maintain that status pair up with in business, in relationships, and in learning? It is rare to find someone that likes disequilibrium to the point that their version of homeostasis is constant change. I find them a lot in technology because change is the only constant; yet many fight it even in that field.
Constant change is where all the fun happens. There are few people I believe in this world that can make no change into fun constant change.
But this brings up so many other important points for our markets, our friendships, materialism and so on. Many people are great at beginning new things; not so great at maintaining them. Few possess the ability to do both and do them both with drive and passion. Zizek describes many theories and demystifies some; complicates others; debunks many more. He notes the Parallax View in a book titled the same as shifting perspectives between two points. In this particular case, because the individuals or the situation are on exact opposite sides of precisely the same phenomenon - they can never meet and therefore will never do more than be connected; they will never share space or find a point of mediation. But what I find more fascinating is the parallax nature of the "gap" between ones' drive, and ones' desire. If an individual is attempting to do something rather mundane but can never accomplish it, his attitude about that act often changes to the point where he finds excitement and even pleasure in repeating the same failed task! This is when we shift from drive to desire, to desire to drive.
Ultimately drive will then become its own strategy to profit from each failed attempt to reach that particular goal that is now merely desire. When looked at from a variety of perspectives, we can see this in failed businesses; in businesses that continue to operate without success; in personal relationships that are beyond homeostasis to flat out boring yet they are maintained - perhaps merely for the incremental profit (in this case it can be physical, mental, or literally, dollars) gained from repeating that same failed task. This is all fascinating stuff.
I believe that in good businesses, good relationships, in good friendships, in good partnerships, in good models and in good entrepreneurial activities there must be inherent tension. This can take all sorts of forms, but without it our natural tendency to maintain equilibrium is fulfilled; and life takes on a new meaning - going back to what the brain originally "knows" as intuition rather than intention, and not expanding to the point of drive + desire simultaneously. What a great anything this would be if we could combine the two and keep it there!
Greene and Cohen speculated once that neuroscience will toss out the window all intuitive sense of free will and we will be left realizing that very little of what we do is actually intentional; but more or less the product of outside influences - and that which is outside of our control. That has drastic implications; from the way we treat those that commit serious crimes to the way in which we run our businesses. They speculate that individuals are rarely consciously aware of what is driving their own behavior; and that we are not rational creatures. If the brain truly is the most complex living structure in the universe, then perhaps one day (well after I'm no longer living on this planet) we will understand the impact of this theory.
But I think more interestingly is the parallax gap which indicates (albeit using two entirely different areas of study) that the confrontation of two closely linked perspectives can never find neutral ground; if this is the case, we can apply it to markets and probably more importantly, to people (since ultimately they really make up markets). Perhaps then the effects of materialism and what drives our economy is nothing more than a fetish, an ordinary object that fills an empty place within any sort of structure - and perhaps relationships, businesses, and partnerships are nothing more than this either.
Maybe what we need to do (anyone sure how?) is re-establish what learning is - being the ability to become aware of the disturbing sides of something we knew existed all along - or perhaps even to acknowledge it if we are aware of it. That takes courage beyond what most have, and perhaps an ability beyond what our human minds can do out of self preservation. Maybe the ability to do this though would solve economic woes; calm nerves, and create stronger relationships.
If people always take the path of least energy, and markets always take the path of least energy, then the maximum level of achievement and perhaps even happiness can never be achieved - unless happiness is defined as homeostasis for its own sake. From stress often comes the greatest reward if you're willing to take it risk. Entrepreneurs all over America are trying to figure out what level of stress (and risk) they can handle. Automakers are trying to determine how to solve 3 month long stress to come back and revisit the humiliation again - but they are at a point of parallax gap - they will simply perform the same failed task until the need to do that task becomes their soul driven purpose - probably not so consciously either.
Right now an entire generation is learning about markets; that they don't just go up - they can go down, too... and they're not always "fixable" with more than time and government intervention. More likely in my view, they will go up because of the desire of those very few who wish for something beyond equilibrium - to take risk - and try again in a new type of marketplace. A market not afraid of money written in other languages or the people that speak them. This is what will rebuild our future economy over time... the risk takers, the people that don't want homeostasis, and those that aren't afraid of the neuroscience component that perhaps they're doing it for reasons beyond those that they can explain or will even attempt to.
Fear is bondage that keeps people from achieving great things and being incredibly happy because they're wired to do or be a certain thing for a group of people, an individual, or a business - often out of environmental impacts they cannot explain.
While they are perhaps unaware of the grip that the fear is having on their lives (I meet many of them - hedge fund managers, investors, traders and so on particularly in NYC) ... an entire generation is learning that over-leveraging can be a bad thing (present company included) albeit profitable in many instances.
I wrote in a previous blog called Feminism's Defeat... about my grandfather and how many times I've replaced my couch in the time he has reupholstered his. Our economy is being reupholstered; the fundamentals are there because the fundamentals aren't CPI or GDP or GNP or anything economists discuss in three minute segments on Fox News. The fundamentals are the people that encompass the desire to continue to push beyond what is comfortable for what is great and without boundary - courting all that is new to see what is possible. Once enough people do this, we will see recovery.
Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts
Sunday, December 7, 2008
Saturday, November 29, 2008
Neural Networks Explaining Econ & Human Emotion?
In the process of taking my mind off of too many things to count and needing a few minutes break from work, a student post about neural networks and artificial intelligence got me thinking about its application to today's marketplace. Everyone seems to be trying to come up with a theory to explain what is happening today; I am convinced none exists. It is a series of mistakes, blunders, oversimplifications, overcomplications and greed that got us where we are today, but perhaps it is the use of information technology - and not in the systems sense - that could get us out of it.
Technologists have long studied artificial neural networks, or ANNs.. these are often referred to just as neural nets. This is one of those terms that students are often baffled by; but its really simple when you break it down. We can use many analogies; the brain, IT, math.. If we look at the brain, we have a series of neurons.. these aren't the artificial type however. They connect information through synapse connection; in IT this is referred to as a connectionist approach. But the key about this system is that it is highly adaptive; information is constantly exchanged and new networks are created.
Neural nets are used in statistical data tools too; particular those creating models or trying to explain what isn't explained by a regression equation. We can use them to find patterns, to find relationships - perhaps even from an emotional perspective, to explain relationships. Some nodes in this network are those which are inputs... from a human perspective we have all needs on the hierarchy.. from a neurology perspective we have the senses, and so on. They also consist of those nodes which are hidden; in emotions perhaps intentionally; in neuroscience perhaps because they are nothing more than transmitters to create a synapse connection. Then we have outputs; the results of the input nodes and the hidden nodes; this works much the way a network does. In neural nets though, interestingly, only those hidden nodes produce output - one could say that only our hidden motives or internal needs are those that produce change. In a capital market, one could say that this is yet another proof of Smith's Invisible Hand; with human motivation moving markets.
One thing is certain and that is every discipline uses neural nets in their own way but I don't see it being used in economics much; or in emotions and emotional intelligence (EI) analysis much either. We do generally agree that it is taking the simple to create a complex pattern of behavior; the simple human need to be loved to create a complex set of outcomes that is often unexplainable; the brains need for food to take drastic or creative measures to get it; the markets need for profit to make uninformed and albeit seemingly irrational decisions to achieve it.
I was telling my students earlier that one goal of scientists in neural network study is to not necessarily make the network adaptive.. it does a pretty good job of that on its own. But, to be able to measure the weight of each connection to either modify it to produce an intended effect, or weigh its value. This can be used for a variety of purposes; but perhaps explaining emotion and economics (and the connection of the two even) is of most interest to me. If we can modify the inputs or if we can identify the hidden nodes, then perhaps we can explain and even give value to the outputs; this in turn could potentially predict when markets are overreacting, overrationalizing, or even overcorrecting. We can then tweak the value of the output, which would in turn create a new method of explaining what economists try to dumb down to supply and demand.
Another fascinating element is bio neural nets... with biological NNs, each of the nodes functions in units but in parallel; each node appears to understand the motivation and the hidden nodes and then react accordingly. Tasks are clearly distinguished; each node knows what it needs to do and its relationship to other nodes. Perhaps just as in the human brain, this is missing in our marketplace. Perhaps the goal to keep the market competitive has removed the ability for nodes to work in parallel, thus preventing an intended purposeful and intelligent outcome.
Scientists like systems that adapt; after all if we can tweak the input we can tweak the output. But what seems largely missing in most disciplines is the hidden node, which if we are to follow the original intent of neural nets it is to identify and explain the impact of inputs on the hidden nodes, since they are the only direct impact on the output nodes.
Therefore unless we understand the not so obvious hidden motivations of individuals and markets, we can never surely predict an outcome.
I like the idea that the adaptive NNs are capable of learning and understanding, and therefore making a choice by a learned algorithm. Many try to manipulate this; but it doesn't take into consideration those darn pesky hidden nodes which drive neuropsychology in all aspects. I am cautiously optimistic in believing it may drive our economy too; but I just need to figure out exactly how. Large data sets are needed, and parallel implementations are a must - but this requires an imperfect market as opposed to a tangible perfect one; which economists don't seem to enjoy very much.
Nonetheless, I think this is interesting stuff indeed.... maybe we need Recurrent Networks with bidirectional data flow to really understand this market...and right now we have unidirectional inputs without any transparency as to the hidden node.
Fun stuff.
Dani
Technologists have long studied artificial neural networks, or ANNs.. these are often referred to just as neural nets. This is one of those terms that students are often baffled by; but its really simple when you break it down. We can use many analogies; the brain, IT, math.. If we look at the brain, we have a series of neurons.. these aren't the artificial type however. They connect information through synapse connection; in IT this is referred to as a connectionist approach. But the key about this system is that it is highly adaptive; information is constantly exchanged and new networks are created.
Neural nets are used in statistical data tools too; particular those creating models or trying to explain what isn't explained by a regression equation. We can use them to find patterns, to find relationships - perhaps even from an emotional perspective, to explain relationships. Some nodes in this network are those which are inputs... from a human perspective we have all needs on the hierarchy.. from a neurology perspective we have the senses, and so on. They also consist of those nodes which are hidden; in emotions perhaps intentionally; in neuroscience perhaps because they are nothing more than transmitters to create a synapse connection. Then we have outputs; the results of the input nodes and the hidden nodes; this works much the way a network does. In neural nets though, interestingly, only those hidden nodes produce output - one could say that only our hidden motives or internal needs are those that produce change. In a capital market, one could say that this is yet another proof of Smith's Invisible Hand; with human motivation moving markets.
One thing is certain and that is every discipline uses neural nets in their own way but I don't see it being used in economics much; or in emotions and emotional intelligence (EI) analysis much either. We do generally agree that it is taking the simple to create a complex pattern of behavior; the simple human need to be loved to create a complex set of outcomes that is often unexplainable; the brains need for food to take drastic or creative measures to get it; the markets need for profit to make uninformed and albeit seemingly irrational decisions to achieve it.
I was telling my students earlier that one goal of scientists in neural network study is to not necessarily make the network adaptive.. it does a pretty good job of that on its own. But, to be able to measure the weight of each connection to either modify it to produce an intended effect, or weigh its value. This can be used for a variety of purposes; but perhaps explaining emotion and economics (and the connection of the two even) is of most interest to me. If we can modify the inputs or if we can identify the hidden nodes, then perhaps we can explain and even give value to the outputs; this in turn could potentially predict when markets are overreacting, overrationalizing, or even overcorrecting. We can then tweak the value of the output, which would in turn create a new method of explaining what economists try to dumb down to supply and demand.
Another fascinating element is bio neural nets... with biological NNs, each of the nodes functions in units but in parallel; each node appears to understand the motivation and the hidden nodes and then react accordingly. Tasks are clearly distinguished; each node knows what it needs to do and its relationship to other nodes. Perhaps just as in the human brain, this is missing in our marketplace. Perhaps the goal to keep the market competitive has removed the ability for nodes to work in parallel, thus preventing an intended purposeful and intelligent outcome.
Scientists like systems that adapt; after all if we can tweak the input we can tweak the output. But what seems largely missing in most disciplines is the hidden node, which if we are to follow the original intent of neural nets it is to identify and explain the impact of inputs on the hidden nodes, since they are the only direct impact on the output nodes.
Therefore unless we understand the not so obvious hidden motivations of individuals and markets, we can never surely predict an outcome.
I like the idea that the adaptive NNs are capable of learning and understanding, and therefore making a choice by a learned algorithm. Many try to manipulate this; but it doesn't take into consideration those darn pesky hidden nodes which drive neuropsychology in all aspects. I am cautiously optimistic in believing it may drive our economy too; but I just need to figure out exactly how. Large data sets are needed, and parallel implementations are a must - but this requires an imperfect market as opposed to a tangible perfect one; which economists don't seem to enjoy very much.
Nonetheless, I think this is interesting stuff indeed.... maybe we need Recurrent Networks with bidirectional data flow to really understand this market...and right now we have unidirectional inputs without any transparency as to the hidden node.
Fun stuff.
Dani
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