Brooke Allen, a Wall Street financier, argues for keeping physicists out of finance, in Science:

I came to Wall Street in 1982 as a computer consultant and went for an MBA in finance at night. That is where I first encountered the finance-as-physics mentality of my professors. I bought into it. By the time I graduated in 1986, it seemed likely that the old-timers who understood only markets would not survive because they could not do physics.

By 1987, the hottest innovation to come from finance theory was something marketed as “portfolio insurance.” The idea was that as markets went up, you could increase your exposure, and when they went down, you could decrease it and protect your gains.

In October of 1987, stock markets experienced the worst crash on record. Believers in portfolio insurance discovered that they could not decrease their exposure fast enough, and as they sold, the crash snowballed.

After the crash, I stopped listening to people who understood physics but not markets and went back to doing what I do best: trying to understand things through direct observation and applying my tools to solving the problems at hand.

The theoreticians dusted themselves off and went back to what they do best. They invented exotic financial instruments that nobody can price properly—not even them—and designed complex, misguided risk models that triumphed over common sense. Markets are now so complex and move so fast that humans cannot participate without assistance from supercomputers—programmed, incidentally, to quality standards so low they would shock engineers responsible for things such as airline safety.

Physicists (and most other “quants”) on Wall Street will tell you over a beer that they know that finance is not a science, but they act as if it is. I think the reasons are that: 1) once you are trained to be a scientist it is hard not to act like one, and 2) management and clients want to believe you are one.

There is also something more insidious going on.

From lensculture:

Over a period of several years, Polish photographer Rafal Milach accompanied seven young people living in the Russian cities of Moscow, Yekaterinburg and Krasnoyarsk. In intimate pictures, he portrays a generation caught up between the mentality of the old Soviet regime and Russia of the Putin era. In this album, bound in synthetic leather, these snapshots of contemporary Russian life are accompanied by interviews with those portrayed.

PICTURE: “Nowadays it’s different from in the Soyuz. I remember how my aunt, who worked at the Soviet Ministry of Culture, used to organize balls in Sverdlovsk. A neckline lower than the seventh vertebra was regarded as pornography, but now even if you ran about the stage with your tits bare, no one would say a word. These days people feel freer. The difference is that once upon a time people knew what they had to say, but they couldn’t say it. Now you can say anything, but no one knows what to say.”

7 Rooms by Rafal Milach. Texts by Svetlana Alexievich.

More here.

From Columbia Journalism Review:

Paul Wright began his journalism career behind bars. When he was 21, Wright killed a man in Federal Way, WA, during a botched hold-up; the cocaine dealer he went to rob reached for a gun, and Wright fired first. He claimed self-defense, but was convicted of first-degree felony murder in 1987. Rather than languish, Wright began studying the law, and spent most of his time in Washington State’s prison system writing, reporting, and litigating for , a magazine he co-founded with fellow inmate Ed Mead in 1990. (He served 17 years of a 25-year sentence, and was released in 2003.) Some Washington prisons tried to ban Prison Legal NewsPLN, but Wright became an experienced jailhouse lawyer and convinced the courts to overturn those decisions—something he’s since done in nine other states, with three cases pending. What started as a 10-page newsletter is now a 56-page monthly magazine with subscribers in all 50 states and several other countries. PLN has a staff of five, and is the centerpiece of a growing nonprofit—recently renamed the Human Rights Defense Center—with a litigation arm focused on prisoners’ rights, a book-publishing operation, and a budding Web presence. Wright has written three books (two while in prison). CJR’s Alysia Santo spoke with him in PLN’s office in West Brattleboro, VT.

From killer to crusader

The worst phone call I ever made was when I was sitting in jail and called my parents to tell them that I’d been arrested on murder charges. I grew up in Lake Worth, FL. My dad worked for the post office and my mom was a housewife. I liked to read and stay up on what’s happening, but my career goals were always in the law-enforcement arena, not journalism. I graduated high school when I was 16, and then went to Mexico to teach English. I came back to the US when I was 18 and joined the Army. I was stationed in Hanau, Germany, as a military policeman. When I came back to US, I went through a military police investigator course, and I was working as a military police officer in Washington when I was arrested. In retrospect, it was really pathetic.

More here.

Dance Me to the End of Love

Dance me to your beauty with a burning violin
Dance me through the panic 'til I'm gathered safely in
Lift me like an olive branch and be my homeward dove
Dance me to the end of love
.
Oh let me see your beauty when the witnesses are gone
Let me feel you moving like they do in Babylon
Show me slowly what I only know the limits of
Dance me to the end of love

Dance me to the wedding now, dance me on and on
Dance me very tenderly and dance me very long
We're both of us beneath our love, we're both of us above
Dance me to the end of love

Dance me to the children who are asking to be born
Dance me through the curtains that our kisses have outworn
Raise a tent of shelter now, though every thread is torn
Dance me to the end of love

Dance me to the end of love
.

by Leonard Cohen
from I'm Your Man, 1988

Over at the University of Chicago, Elizabeth Anderson delivers the Dewey Lecture in Law and Philosophy:

Critics of every social insurance proposal in the U.S., including recent health care reform, have called them socialist attacks on private property. To be sure, social insurance is a central pillar of social democracy, and social democratic parties originated in a socialist critique of capitalism. Yet the equation of social insurance with socialism is doubly ironic. The first realistic proposal to abolish poverty by means of universal social insurance was Thomas Paine, who explicitly advanced his scheme as a defense of private property against socialist revolutionaries. And the first actual social insurance scheme was introduced by Otto von Bismarck, who advanced it against the German Social Democratic Party, which opposed his plan. This talk will consider how Paine grounded the justification of social insurance in a neo-Lockean theory of private property rights, and explore the implications of the ironic inversion of social insurance from a bulwark of to a perceived assault on capitalism.

Charlie Rose interviews David Harvey and Richard Wolff:

Patrick Higgins in Counterpunch:

From Cockburn to Vidal, some great thinkers and men have moved on over the past few weeks. Among those ranks is the French documentarian—nay, cine-essayist is more near correct—Chris Marker, whose “brilliance as a thinker and filmmaker has,” in the words of film critic Jonathan Rosenbaum, “largely (and unfairly) eclipsed by Godard’s.”

Both men, Godard and Marker, are responsible for more than a few films of almost upsetting beauty. Both men also contributed greatly to the withering art of film criticism, their best moments as critics achieved through the camera rather than the typewriter. It is true that Godard has made films one could safely call revolutionary (despite the spirited abuse the Situationists leveled at him), just as it is true that Godard possesses a painter’s eye and the deepest of possible understandings of the text and the image, but Marker’s intensity as a narrator and dedication as a wonderer and intelligence as a traveler have not been matched by Godard or anybody else. It is time this artist of the highest caliber, for whose talents 91 years could never suffice, received his due.

On my backpack—the one perpetually hanging from my body—is a rusting button with the image of the Cheshire Cat, its sprawling grin teasing and frightening. The button has been there for years, and will remain there for many years more, because to be put in mind of Marker’s films is to be put in mind of so many other wonderful things. The image is from Marker’s The Case of the Grinning Cat, in which the image of the Cheshire Cat, found as graffiti on walls and in metros throughout Paris, serves as Marker’s springboard for ruminations on nearly everything. As it should be. What better to capture Marker’s syndicalist-ish spirit and sensibility than street art, anonymously created, continually evolving, and publically consumed?

Marker films help me more than most in understanding the clutter and serenity, the noise and peacefulness of the world we inhabit. He was expert at finding “moments.”

Neal Ascherson in the LRB:

In a few weeks, all going well, I will get to see my Polish file. Any foreign journalist who visited Poland regularly in the Communist period must assume that the old Security Service built up a dossier on him or her. Mine is now in the Institute of National Remembrance in Warsaw, and I can read it. I don’t know what it contains. Much irrelevant rubbish, no doubt: surveillance teams have to justify their expenses. But one thing I am prepared for: reports to the secret police by people I considered to be friends or at least friendly acquaintances. Some ‘targets’ find the idea of such reports so horrible and distressing they prefer not to see their file at all. My view is different.

‘People’s Poland’ was the land Ryszard Kapuściński lived in, but left as often as he could. Many men and women there who despised the regime made bargains with themselves: if the price of getting a passport to a conference in Paris, or of befriending a Western foreigner, was to visit a certain Major Kowalski now and then and invent some harmless platitudes – cheap at that price. A few of my friends admitted this and joked about it. Others kept it delicately unsaid. They were reluctant informers, not professional spooks out to entrap me, and knowing that, I trusted them.

I thought Kapuściński was in that sort of league. We met quite a few times, mostly in Warsaw, and I felt that we were friends. Perhaps I was wrong. He was charming, intent, always apparently interested in what you had to say. And yet, as Artur Domosławski observes in this biography, that warm, complicit smile was for everyone. I can’t remember much of what he said. This is because he never said much. He was one of those rare journalists whose way of listening makes other people open up and talk. That’s what this elusive man used his smile for. That, and to take attention and curiosity away from himself. Kapuściński was evasive, and it turns out he had plenty to evade.

Jina Moore in the Boston Review:

In 1906, the readers of The New York Times opened their papers to a story about the Bronx Zoo’s latest attraction: Ota Benga, a 22-year-old Mutwa from today’s Democratic Republic of the Congo.

“Ota Benga let some of the savage nature of the African forest come out yesterday,” began the story, in which Benga is drenched with a hose in the zoo’s monkey cage.

Today, the “savage nature” of Africa is still on display, in American headlines: “Uganda’s rebels in murderous spree,” “Congo a country of rape and ruin” “Africa’s Forever Wars.” Sometimes the savagery doesn’t come from the “savages” themselves. It comes from poverty—“NIGERIA: Focus on the scourge of poverty”—or disease—“AIDS at 30: Killer has been tamed, but not conquered.” Other times, all the savagery blends together: “Starving Babies, Raped Mommies, Famine in Africa—Do you care?”

All I can imagine from these headlines is that Africa—all 54 countries, all 11.7 million square miles of it—must be a very deadly place.

But I’ve lived there. It’s not. Or rather, it can be, in certain places, at certain times. Far more often, and across most of the continent, it isn’t. Not even in its most infamous “war-torn” countries, such as the Democratic Republic of Congo. In Goma, part of a region the United Nations’ special representative on sexual violence in conflict Margot Wallström two years ago dubbed “the rape capital of the world,” I went to an impromptu hip-hop show, full of dancing Congolese. In Kinshasa, nearly a thousand miles away on the other side of the country, I met an oboist for the city’s symphony orchestra.

More here.

Jalees Rehman in the Huffington Post:

In the course of studying non-Muslim writings and Scriptures during this Ramadan, I came across the excellent essay “What I Believe” by the great atheist philosopher and Nobel laureate Bertrand Russell. This essay can be found in a collection of essays, including the famous or perhaps infamous “Why I Am Not a Christian.” I remember reading this essay collection a number of years ago, but as with many of Bertrand Russell's writings, it does not hurt to continuously re-read them since one is bound to find new facets of wisdom each time. In “What I Believe,” Russell formulates some of the key principles of his humanist and atheist philosophy.

Part of the essay is devoted to critiquing religion, such as when he says: “Religion, since it has its source in terror, has dignified certain kinds of fear and made people think them not disgraceful. In this it has done mankind a great disservice: all fear is bad.”

Russell acknowledges that fear is found not only in religion, but in many aspects of our society.

“Fear is the basis of religious dogma, as of so much else in human life. Fear of human beings, individually or collectively, dominates much of our social life, but it is fear of nature that gives rise to religion.”

More here.

Alexis Madrigal in The Atlantic (article is a few months old but interesting):

While there are more than 8 million Holstein dairy cows in the United States, there is exactly one bull that has been scientifically calculated to be the very best in the land. He goes by the name of Badger-Bluff Fanny Freddie.

Already, Badger-Bluff Fanny Freddie has 346 daughters who are on the books and thousands more that will be added to his progeny count when they start producing milk. This is quite a career for a young animal: He was only born in 2004.

There is a reason, of course, that the semen that Badger-Bluff Fanny Freddie produces has become such a hot commodity in what one artificial-insemination company calls “today's fast paced cattle semen market.” In January of 2009, before he had a single daughter producing milk, the United States Department of Agriculture took a look at his lineage and more than 50,000 markers on his genome and declared him the best bull in the land. And, three years and 346 milk- and data-providing daughters later, it turns out that they were right.

“When Freddie [as he is known] had no daughter records our equations predicted from his DNA that he would be the best bull,” USDA research geneticist Paul VanRaden emailed me with a detectable hint of pride. “Now he is the best progeny tested bull (as predicted).”

Data-driven predictions are responsible for a massive transformation of America's dairy cows. While other industries are just catching on to this whole “big data” thing, the animal sciences — and dairy breeding in particular — have been using large amounts of data since long before VanRaden was calculating the outsized genetic impact of the most sought-after bulls with a pencil and paper in the 1980s.

More here.

From The Atlantic:

It’s time to stop fooling ourselves, says a woman who left a position of power: the women who have managed to be both mothers and top professionals are superhuman, rich, or self-employed. If we truly believe in equal opportunity for all women, here’s what has to change.

Eighteen months into my job as the first woman director of policy planning at the State Department, a foreign-policy dream job that traces its origins back to George Kennan, I found myself in New York, at the United Nations’ annual assemblage of every foreign minister and head of state in the world. On a Wednesday evening, President and Mrs. Obama hosted a glamorous reception at the American Museum of Natural History. I sipped champagne, greeted foreign dignitaries, and mingled. But I could not stop thinking about my 14-year-old son, who had started eighth grade three weeks earlier and was already resuming what had become his pattern of skipping homework, disrupting classes, failing math, and tuning out any adult who tried to reach him. Over the summer, we had barely spoken to each other—or, more accurately, he had barely spoken to me. And the previous spring I had received several urgent phone calls—invariably on the day of an important meeting—that required me to take the first train from Washington, D.C., where I worked, back to Princeton, New Jersey, where he lived. My husband, who has always done everything possible to support my career, took care of him and his 12-year-old brother during the week; outside of those midweek emergencies, I came home only on weekends.

As the evening wore on, I ran into a colleague who held a senior position in the White House. She has two sons exactly my sons’ ages, but she had chosen to move them from California to D.C. when she got her job, which meant her husband commuted back to California regularly. I told her how difficult I was finding it to be away from my son when he clearly needed me. Then I said, “When this is over, I’m going to write an op-ed titled ‘Women Can’t Have It All.’” She was horrified. “You can’t write that,” she said. “You, of all people.” What she meant was that such a statement, coming from a high-profile career woman—a role model—would be a terrible signal to younger generations of women. By the end of the evening, she had talked me out of it, but for the remainder of my stint in Washington, I was increasingly aware that the feminist beliefs on which I had built my entire career were shifting under my feet. I had always assumed that if I could get a foreign-policy job in the State Department or the White House while my party was in power, I would stay the course as long as I had the opportunity to do work I loved. But in January 2011, when my two-year public-service leave from Princeton University was up, I hurried home as fast as I could.

More here.

From The New York Times:

There could have been nothing. It might have been easier. Instead there is something. The universe exists, and we are here to ask about it. Why? “Why is there something rather than nothing?” sounds so fundamental a question that it should have perplexed humanity since the dawn of philosophy. Strangely, it hasn’t, or at least it has left no trace on early written literature. Aristotle said that philosophy begins with wonder, and earlier Greek philosophers did wonder what the world was made of. Thales thought its primal substance was water, Anaximenes air, Heraclitus fire. But they didn’t ask why anything was there at all. We find no one haunted by the specter of non-being until Gottfried Wilhelm Leibniz, who wrote in 1714, “The first question which we have a right to ask will be, ‘Why is there something rather than nothing?’ ” For some, the question is not really a question. It is more an expression of philosophical amazement — a way of saying “wow” in the face of existence.

Ludwig Wittgenstein described a feeling of awe that led him to use phrases like “How extraordinary that anything should exist,” but he decided it was better not to say such things. Martin Heidegger decided the other way, and made the Question of Being the foundation for his entire philosophy, becoming, as George Steiner described him, “the great master of astonishment, the man whose amazement before the blank fact that we are instead of not being, has put a radiant obstacle in the path of the obvious.” Other people have treated it as a real question, the kind that might have an answer. And some think they have actually found answers, though these tend to be so different that one can hardly believe they started with the same question. In “Why Does the World Exist?,” Jim Holt, an elegant and witty writer comfortably at home in the problem’s weird interzone between philosophy and scientific cosmology, sets out in search of such answers.

More here.

Philosophy is Useless

to Bakhtytzhan Kanapianov

Philosophy is useless. How much nicer it is
to brew some tea, to make it strong, to sip it
with apricot preserves, while going through
your chest of treasures: a collection of
clay dragons from Samarkand, with their tails
chipped off and then repaired with good old glue.
If you get bored with that, there is also a collection
of toy lions. One of them, made of grey metal,
is most amusing, with its fierce head
and mangy mane; originally it embellished
the handle of an ancient sword, then someone
ingeniously used it as a model for the corkscrew
that I, unfortunately, cannot put to use because
the thing was given to me as a farewell memento.

I have no reason not to cherish all these objects:
for over a quarter of a century they’ve been forming
a tight circle around me, and were it not for them
so much would be forgotten. Here is a tarnished
tea-glass holder, a reminder of trains that used to be,
and of a teaspoon that would tinkle against thin glass
in a compartment, on a railroad stretch between
Saratov and Orenburg; here is a silver-plated
cigarette case with the Soviet Kremlin indented
on the lid, with a most touching elastic band inside,
as if from an undergarment. Inside, it houses
a handful of small change in various denominations –
five-, fifteen-, twenty-kopeck coins and, above all,
the two-kopeck coins that now no longer can
convey all of their former magic meaning:
a night in February, a frozen-through phone booth,
in the receiver a barely audible voice of her
who is at the other end of Moscow, and your heart
is pounding, not for the reason of too much caffeine
or alcohol, but because of too much happiness.

Read more »

Jared Diamond's review of Daron Acemoglu and James A. Robinson's Why Nations Fail: The Origins of Power, Prosperity, and Poverty, in the NYRB:

In their narrow focus on inclusive institutions, however, the authors ignore or dismiss other factors. I mentioned earlier the effects of an area’s being landlocked or of environmental damage, factors that they don’t discuss. Even within the focus on institutions, the concentration specifically on inclusive institutions causes the authors to give inadequate accounts of the ways that natural resources can be a curse. True, the book provides anecdotes of the resource curse (Sierra Leone cursed by diamonds), and of how the curse was successfully avoided (in Botswana). But the book doesn’t explain which resources especially lend themselves to the curse (diamonds yes, iron no) and why. Nor does the book show how some big resource producers like the US and Australia avoid the curse (they are democracies whose economies depend on much else besides resource exports), nor which other resource-dependent countries besides Sierra Leone and Botswana respectively succumbed to or overcame the curse. The chapter on reversal of fortune surprisingly doesn’t mention the authors’ own interesting findings about how the degree of reversal depends on prior wealth and on health threats to Europeans.

Acemoglu and Robinson reply (with a response by Diamond):

[C]ontrary to Diamond’s claim, there is nothing that contradicts tropical medicine and agricultural science in claiming that these are not major factors shaping differences in national prosperity. That these geographic factors cannot by themselves account for prosperity is illustrated by an empirical pattern we discuss—the “reversal of fortune.” Among the countries colonized by Europeans, those that were more prosperous before colonization ended up as relatively less prosperous today. This is prima facie evidence that, at least in the sample that makes up almost half of the countries in the world, geographic factors cannot account—while institutional ones can—for differences in prosperity as these factors haven’t changed, while fortunes have. Academic research also shows that once the effect of institutions is properly controlled for, there is no evidence that geographic factors have a significant impact on prosperity today.

From PolitiFact.com:

Six members of the Walton family appear on the Forbes 400 list of the wealthiest Americans. Christy Walton, widow of the late John Walton, leads the clan at No. 6 with a net worth of $25.3 billion as of March 2012. She is also the richest woman in the world for the seventh year in a row, according to Forbes. Here are the other five:

No. 9: Jim Walton, $23.7 billion
No. 10: Alice Walton, $23.3 billion
No. 11: S. Robson Walton, oldest son of Sam Walton, $23.1 billion
No. 103: Ann Walton Kroenke, $3.9 billion
No. 139: Nancy Walton Laurie, $3.4 billion

That’s a grand total of $102.7 billion for the whole family.

Sylvia Allegretto, a labor economist at the Center on Wage and Employment Dynamics at the University of California-Berkeley, compared the Waltons’ cumulative net worth with that of the overall population, as cited in the Survey of Consumer Finances. (She used the Waltons’ wealth from 2010, which was valued at $89.5 billion.)

Allegretto found that in 2007, the wealth held by the six Waltons was equal to that of the bottom 30.5 percent of families in the U.S. In 2010, the Waltons’ share equaled the entire bottom 41.5 percent of families.

That 41.5 percent represents nearly 49 million families, notes Josh Bivens at the left-leaning Economic Policy Institute. While median family wealth fell by 38.8 percent, Bivens wrote, the wealth of the Walton family members rose from $73.3 billion in 2007 to $89.5 billion in 2010, or about 22 percent growth.

More here.

Pervez Hoodbhoy in the Express Tribune:

Agha Waqar Ahmad deserves a medal from the people of Pakistan for his great service to the nation. In a few short days, he has exposed just how far Pakistan has fallen into the pit of ignorance and self-delusion. No practical joker could have demonstrated more dramatically the true nature of our country’s political leaders, popular TV anchors and famed scientists.

At first, it sounded like a joke: a self-styled engineer, trained in Khairpur’s polytechnic institute, claims to have invented a ‘water kit’ enabling any car to run on water alone. It didn’t matter that the rest of world couldn’t extract energy from water; he had done it. He promised a new Pakistan with limitless energy, no need for petrol or gas, and no more loadshedding. For an energy starved nation, it is a vision of paradise.

Agha Waqar Ahmad is now a national celebrity thanks to Religious Affairs Minister Khursheed Shah. Federal ministers Mir Hazar Khan Bijarani and Qamar Zaman Kaira have added their commendations. President Asif Ali Zardari has expressed his delight. The cabinet has met three times to discuss the water vehicle, and a fourth meeting is scheduled. Reports suggest millions may be spent on the ‘water fuel kit project’.

The media has rushed in to celebrate the new national hero. For TV anchor Talat Husain, thanks to Agha Waqar Ahmad’s invention, Pakistan’s image can go from a country ravaged by terrorism to one of boundless possibilities. Anchor Hamid Mir and Senator Parvaiz Rasheed drove around Islamabad sitting next to the inventor, wondering how to protect the man’s life from Western oil companies.

More here.

Pankaj Mishra in The New Yorker:

Mohandas Gandhi was the twentieth century’s most famous advocate of nonviolent politics. But was he also its most spectacular political failure? The possibility is usually overshadowed by his immense and immensely elastic appeal. Even Glenn Beck recently claimed to be a follower, and Gandhi’s example has inspired many globally revered figures, such as Martin Luther King, Jr., Nelson Mandela, the Dalai Lama, and Aung San Suu Kyi. Gandhi, rather than Mark Zuckerberg, may have been the presiding deity of the Arab Spring, his techniques of resistance—nonviolent mass demonstrations orchestrated in the full glare of the world’s media—fully absorbed by the demonstrators who prayed unflinchingly on Kasr al-Nil, in Cairo, as they were assaulted by Hosni Mubarak’s water cannons.

And yet the Indian leader failed to achieve his most important aims, and was widely disliked and resented during his lifetime. Gandhi was a “man of many causes,” Joseph Lelyveld writes in “Great Soul: Mahatma Gandhi and His Struggle with India” (Knopf; $28.95). He wanted freedom not only from imperial rule but also from modern industrial society, whose ways Western imperialists had spread to the remotest corners of the globe. But he was “ultimately forced, like Lear, to see the limits of his ambition to remake his world.”

How can one square such quasi-Shakespearean tragedy with Gandhi’s enduring influence over a wide range of political and social movements? Why does his example continue to accumulate moral power?