Friday, May 06, 2011

The Law of Parabolic Returns.

There are several intellectual assumptions which I feel are at the root of many of society's maladies. One of the them is what I would call is the misattribution of linearity.

The erroneous logical process runs as follows. Let's say something called X is good, then even more by implication, is better. It's  runs on the assumption that systems are linear and predictable. It's common error that's seen in many facets of life. Take for example vitamins.  Small doses of vitamins are definitely beneficial to individuals who are vitamin deficient, but at ever greater doses, the effects become  negligible and some instances harmful.  Likewise with exercise, many people,  especially sportsmen, are of the the opinion if a little bit of exercise is good for you even more is better and you can never really get too much of it. Public policy makers, who view education in the same light as motherhood, extrapolate its benefits in the same way.

It's a common intellectual pathology and it exists amongst both the left and right to varying degree.

Very few systems of any complexity are linear in their effect. In fact, most systems obey what I call the law of parabolic returns. Here, what happens initially, is there is a bit of a linear effect which after a while peters out and then finally becomes negative. The more you think about complex systems, the more you recognise the effect.

My interest is as to why this phenomenon exists in the fist place. After thinking about it for a while I believe that it is due to three things:

1) Limitations in intelligence. (That is the ability to process information)
2) Limitations in knowledge, which can either be from ignorance or from a lifetime of specialisation.
3) Superficial thinking. (Sentimental thought)
4) Ideological bias. (Thought-filtering)

Understanding multi-parametric systems is hard and therefore, given the relative scarcity of deep and broad thinkers in our community, linear thinking is more likely to be the predominant mode of thought. Hence, in community based decision systems, there will be a deep bias towards linear explanations of complex phenomena. The simple solution is more easily grasped than the complex one, especially when it needs to be explained by the moronic media to the bovine masses.

Ontologically, linear models frequently bear some relation to reality under some conditions, in other words, there usually is a degree of truth to them. This is why some of the claims of Marxists, Libertarians, Keynesian's etc have some validity; they are not outright fantasy. The problem is that their model is only valid under a limited set of conditions.  Conservatives err when they dismiss leftist claims reflexively; sometimes there is a degree of truth to their claims.  In doing so they make themselves look stupid.

The phenomenon of linearity also explains a lot of the idiotic polarisation in our society at the moment.
Take for example, the two extremes: Communists and Libertarians.

Both of them engage in a denial of reality. The communists fail to see that collectivisation has negative consequences just as much as the rabid libertarians can't see that individualisation is just as socially destructive. In many ways they are similar having the same cognitive blinders, just different cognitive models.  As the general levels of intelligence decline and Facebook becomes the information source for the majority of the voting population,  simplistic solutions to complex problems will assume greater political force.

Charles Munger, Warren Buffet's partner, was a meteorologist prior to him becoming a lawyer. Meteorology is hard probably the ultimate multi-parametric discipline He describes the problem of linearity as the problem of "the man with a hammer". To a man with a hammer every problem is a nail. He has written and excellent and easily readable essay on the importance of multi-parametric knowledge: Academic Economics: Strengths and Faults After Considering Interdisciplinary needs. It's well worth a read.