People have this desire to find an order in the world around them, even if it’s hard to prove that one exists. This is second only to the tendency to see life as linear progression – this is just how our minds work most of the time.
A good example is the long fascination with prime numbers (they only divide by one and by itself). They appear totally randomly – there is no rhyme or reason for their frequency. So, it should come as no surprise that this was a call to action for some to find a hidden order. In the 18th century the mathematician superstar Leonhard Euler established an elegant connection between PI and the prime numbers. He basically proved that the quantity of prime numbers is infinite. That was it, really. Next was Bernhard Riemann introducing the zeta function and trying to further encode the primes. His hypothesis says that the points where the zeta function takes the value zero, all line up in a straight line. It still waits to be proven and there is a Nobel prize in mathematics waiting for whoever succeeds. And if one day some lucky soul will, a new problem will appear – what do we do with this information? Fast-forward to the modern times and the story gets really interesting. John Nash was an American mathematician and the only person to be awarded both the Nobel prize in Economic Sciences and the Abel Prize. Working to prove the Riemann hypothesis, in 1959 Nash began showing clear signs of mental illness and spent several years at psychiatric hospitals being treated. He was not able to return to academic work until the mid-1980s. His struggles with the illness and his recovery became the basis of the film “Beautiful Mind” with Russell Crowe as Nash. Some people rather sacrifice their lives than admit randomness of the world. Interestingly, often just an approximation of the order works. The Bernoulli's principle is how the wings of airplanes are designed to create lift. I asked an experienced pilot I know, “how close is the real life flying to the formula?” “It’s in the ballpark,” he said. “But that’s it.” Accepting some level of randomness is healthy, but not accepting the cyclical nature of the world can really do widespread damage. For example, this is the case with the climate change crowd, not willing to consider the impact of decline in sun output, right on schedule actually. The solution to climate change is not carbon taxes or tradable emission quotas. Let’s look at the last mini-ice age and try to learn from it. We could start by correlating historical events with climate changes throughout history, like the global cooling periods with the fall of the Roman empire or with the defeat of Napoleon in Russia. For those inclined to trade, a cool period will bring a boom in commodities. But really dangerous are attempts by governments to combat the business cycle. It ends with asset bubbles and mountains of debt on one side and pension crisis on the other. And the cleanup is never pleasant. The tools applied include massive interest rates manipulation, open market operations and capital controls. All this has been done before and they never succeeded even once. Doing the same thing over and over and expecting different outcome is a definition of mental instability and it’s very different from what Nash went through. At least he felt that he was at the frontier of knowledge.
0 Comments
## Leave a Reply. |
## AuthorTom Kubiak is the author of ## Archives
February 2019
## Categories |