The dumb country

The Australian government hates people like me. Educated ones.

They love to say we are the smart country, but no longer. The Commonwealth government has capped the educational expenses at $2,000 per annum that can be deducted.

This means that anyone doing an MBA, a PhD or some other form of education whist working has to have to full tax costs associated with their education. The end result will be less education. We can expect fewer scientists, fewer people doing post grad studies and a general decline in the standard of living in the country.

You can argue that there is a cost and this is skewed. For instance, I spent and claimed $56,000 in educational expenses last tax year for the two degrees I was undertaking (my second PhD and a Masters). What you would be missing is that I could do this study without the structure. In having a doctorate, you learn how to research. I just like to have the structure of the University.

Next, I am actually paying the University that money. As the University IS a government institution, the amounts I am paying to do a full fee course are actually going to the federal government. In effect, taxing one such as myself who has done a working post graduate degree is double taxation. 

The end result and the unintended consequences of this will be a lowered uptake of education. Then, less educated people are easier to control…

 

For more, see:

http://www.smartcompany.com.au/tax/055096-business-protest-capping-self-education-expenses-at-2000.html

On Trust and Risk

Security matters, but not so we can eliminate all risk, but so we can have trust. Even if we could eliminate nearly all risk (we cannot ever remove risk entirely) we would have to ask whether it was worth it to do so.

Risk IS quantifiable.

This is a statement like many others that is true, not always in the ways we assume, but it is true none the less.

We can always measure risk. This does not make a difference what field you are referring to, risk is a quantifiable metric.

The problem is not if we can measure risk, but how and with what results. These results come to:

• reliability,
• precision, and
• accuracy.

These are not the same, but each has a bearing on how well we report on risk. The first of these, reliability comes down to whether we can repeat the same results again when we do an experiment. It refers to an ability to have either or both precision and/or accuracy stay within predictable bounds.

Precision is how true we are to the mark each time we make a risk measurement. This is, how close to the real value we lie and in effect it comes to the level of variance we have. We can actually be imprecise with the mean value right on the bulls-eye and results that have a large variance or spread. This would be centered on the expected mean on average but with results that vary widely.

Accuracy is how close we are to the mean or other value we see as the measure of risk. We can say it is a measure of how close we are to the bulls-eye.

To have a good measure of risk, we need to aim for both precision as well as accuracy. It is also important t5hat we can reliably have a measurement that we can have others examine and produce.

Qualitative measures of risk.

There are always people who will tell you that risk cannot be measured. What they are really saying in effect is that risk cannot be measured using a scientific process and is an art.

There are reasons that people hold these views. Some have the idea that metrics are not possible and that only skilled people can create a metric. The flaw in this argument is that this is a form of metric and it is one that can be measured and tested. When we look at the results of how risk comes out over time, we see that the art based approach does not work well.

In science, we make predictions and the ultimate test of these predictions is the result that the real world delivers over time.

Risk can be measured. In doing so, we hold those making predictions to account. We can start to measure the actual predictions made. Is a system secure, well time does tell and in checking the “predictions” of risk and security people against time we can make measurements.

In making models, we also see how well we model a system and the feedback from inaccuracy and imprecision allows us to improve over time.

Next time somebody states to you that risk cannot be measured, remember it is. Think instead what they are telling you is that they do not want to have their ability tested in case they come up short.

Are the poor exploited?

In 2012, the US trade with Sub-Saharan Africa (SSA) came to a total of $48 billion [1] as a combination of both imports and export to the nations. This was mostly in the form of machinery and other capital equipment that could (if increased) help the African people develop. The trade with Africa accounts for a little less than 1.4% of the overall US trade to the world.

We see this in the figure below.

Notice, for all of the resources in Africa, they are insignificant and if all trade to SSA stopped overnight (incl. South Africa), the US would hardly notice it.

Overall, in 2012, the US GDP was $14.99 Trillion . Of this, only a small amount comes through trade with “poor” countries. This is the issue, a lack of trade and not exploitation.

Overall, the GDP from Africa as a whole (incl. the oil nations and South Africa) is tiny when compared to the USA. We see this below.

The entire African continent does less than the US. Not as we have seen through trade based exploitation, there is not enough trade, but through a lack of markets.

Next time you hear that the poor are exploited, know that it is through their own leaders and failed political systems and not through trade. It is trade that could help them no longer be poor.

GDP is not the best measure of trade and growth for a number of reasons I will not address here, but it is sufficient.

[1] http://www.agoa.gov/build/groups/public/@agoa_main/documents/webcontent/agoa_main_003964.pdf

Models and Science

We love to make simplified models. We still use Newtonian models and there is reason. They work most of the time. Even these fall over and we cannot calculate a generalised three body problem of gravitational attraction as put forth by Newton now. If we tried this using Relativistic equations, well we do not have the computational power with all the computer systems on earth and a few lifespans to do that.

Back in 1887, mathematicians Ernst Bruns and Henri Poincaré demonstrated an elegant generalised system that offered proof showing that there is no general analytical solution for the three-body problem when defined using by algebraic expressions and integrals. This does not say that one could not exist, but that it cannot be completed using the mathematics we have at our disposal.

In this, they demonstrated that the motion of three bodies is generally non-repeating, except in special cases. Right now (and as last I know of) we have a total of 16 specific solutions to the three-body problem. The last 13 of these only in the last year (http://arxiv.org/abs/1303.0181).

These are great and have a wonderful purpose, but we need to remember the world is bigger and more complex than we can understand.

Models are just that. When we lose sight of this, we start to lose sight of what we can achieve.

Many models of reality are based on Euclidian space (geometry). The Friedmann–Lemaître–Robertson–Walker metric is an exact solution of Einstein's field equations of general relativity. From it and the general relativistic formula, we find that space is only approximately flat. A good approximation for most purposes, but flat it is not. To really model the world, we have to start with CAT(k) spaces, Hadamard spaces, and constructs such as Hilbert spaces in the Quantum mechanical world.

For the most part, the error rate is small and the calculation cost is such that we use a classical model. This does start to fail in modern applications. For example, the time system on the GPS we need to us a relativistic calculation as the time difference experienced is significantly affected by the differential velocity of the Earth to the satellite. The result would be a large error that continued to grow with the use of a classical model.

Science is all about models. We like to believe we can know it all, but this is most like something that will always lie outside our grasp.

For more on Hilbert Space see:

http://www.math.kun.nl/~landsman/HSQM2006.pdf

http://econ.la.psu.edu/~hbierens/HILBERT.PDF

...

Making a pencil

Back in 2007 I talked to Tim Taylor of McAlester. I wrote to him at the time on my plans to make a pencil. At that time I wrote:

I have been told that you have a lecture where you state that there is a high likelihood that there is no person who could make a pencil from scratch.

I would like to put myself forward as the exception for you. I have been called an academic junkie, but I have studied all that is required to do this and also other skills. I learnt how to make charcoal using a medieval clay burner last year. I learnt iron smelting and blacksmithing over a decade ago. Woodwork is a hobby. I have qualifications in Organic Chemistry – so the rubber is easy.

Although I agree that this is not generally useful knowledge, it does help drive home the point of where we are and what society (and yes the economy) really means.

I could have a pencil produced in under 6 months from start to finish if I dedicated my time and was in an iron or bronze rich area. At my current rate it is unlikely that anyone would pay me my current rate, but I do believe that I could manufacture from scratch at least 8000 pencils pa continuously from the point of being setup after 9-12 months – assuming somebody else takes care of food.

I do understand that I will still not make my own pencils however, not only is the quality poor, but the cost is excessive.

I was wrong at that point in thinking I could have completed a pencil and gained the knowledge in something so simple in only six more months (and with my existing knowledge built over a decade). I was not wrong in being able to make a pencil from scratch.

In learning this, I have learnt to smith, to make tools and smelt and many arts that have been neglected by many people.

I have grown my own understanding of many topics and at the root it is other technologies that have allowed me to comprehend a simple item such as a humble pencil.

Tim had stated at the time in an early email:

Thanks for your charming note. The pencil example is from a famous (to teachers of economics) essay written back in 1958. If you want to check it out, it's available on the web at <http://www.econlib.org/LIBRARY/Essays/rdPncl1.html>.

When I'm citing the noone-can-make-a-pencil example in a classroom context, I sometimes(but not always) say: "OK, there's probably someone who can prove me wrong out there -- some professor of metallurgy or chemistry who has an offbeat set of personal hobbies." But in roughly 20 years of using this example, you are the first one to call me on it!  When I next use the example, I'll have to be sure to add that I've heard from one person who can do it. This will lead naturally into the next major subject of the introductory class, which is comparative advantage, and why it wouldn't make economic sense for you to do it. So you see, for a teacher, everything is grist for the mill.

 

At that point I could make a pencil, but not from first principles. This required learning all of the following skills to an adept level:

• carpentry,
• forestry
• geology
• mining
• mineral processing
• black smiting (and I am no artist)
• Coking
• Making bricks
• Steel work
• and so many things it is not funny. Wait to see the publication.

I ended up doing the standard HB composition.

• Graphite 68%-wt, Clay 26%-wt, Wax 5%-wt

My beneficiation process is extremely rudimentary but it does work. Making a screen is not a simple process in itself and is one that modern methods can easily improve on the efforts of one person.

I started with  a "Gesner pencil" and slowly gained the level of skill to progress to the Nicholas-Jacques Conte version. In this, the speed of discovery has been amplified and made less expensive through the growth of the Internet. YouTube has a remarkable number of How-Too videos that have accelerated this process and changed the dynamics of the exercise.

I also needed to use other resources. Mixing graphite in a kiln sounds easy, and as my ex-wife had a kiln for pottery, it was. Making a kiln was a separate exercise. Moving from an electric kiln to a Raku pottery kiln I make myself was a large step. Even here I cheated. I made Forty three bricks before I decided to use the other hundred or so from a commercial maker. If I had to make all the bricks I would have needed more time and effort.

• Ritter, Steve (October 15, 2001). "Pencils & Pencil Lead". American Chemical Society.

Ritter’s paper was essential to this exercise. It started the process of discovery. The part I have not replicated in a natural manner and could not is the sourcing of the knowledge, something like the pencil we take for granted. I have never met Steve Ritter, but owe a debt of gratitude to him and hundreds of people posting on blogs, webpages and lastly via video on YouTube.

Tight now, I am starting to write this on a computer connected to the Internet. The pencil was something I could copy. A piece of 18th century technology. What I could not ever hope to do is to replicate all the knowledge required for a pencil in a single life span without the aid of technology.

So, even now we have something more to add to the process.

I am writing this process up now. I have spent a little over 12 years researching pencils and once I have finished the publication, I shall put them to rest.