Re: The end of knowledge

nwcnwc — Sat, 22 Mar 2014 00:49:51 -0000

Michael, maybe I should have picked a better title. "The end of knowledge" is a weak play on Fukuyama's 1989 essay "The end of history?" The play is weak for two reasons: firstly, Fukuyama had a question mark in his title, so as not to seem pompous; secondly, and more importantly, so far Fukuyama has turned out to be completely wrong and has little hope of ever turning out right. Today we see something more like Huntington's competing theory, "The clash of civilizations."

I think Fukuyama also got grief for his title, and so it always goes with an explanation that he didn't actually mean history will stop. My explanation is that I'm not saying that knowledge will stop, but rather that humanity will unlock so many mysteries of the physical universe that our understanding of how physical things work will become so full that practitioners of science will have God-like abilities.

I am a strong proponent of the idea that there are realms beyond the physical realm, namely, the psychological and spiritual realms. The spiritual realm is a realm where science does not go, a realm which many (but not all!) scientists refuse to acknowledge. The psychological realm is the realm between the physical and the spiritual, and so there is some scientific understanding, but the understanding will never be full.

Maybe I will write about this more in the future.

Best regards

Nathan

Re: A Market For Private Companies?

nwcnwc — Fri, 15 May 2009 12:41:04 -0000

Our present financial crisis has shown that not only do non-accredited investors (i.e. normal people) not understand risk, but neither do most so-called "sophisticated" investors. And I'm not even talking about the people who were fooled by Bernie Madoff (most of those people, though, probably inherited their money -- people who've actually toiled and sweated to make large sums of money by definition aren't that stupid with it). I'm talking about the extremely high-paid and for the most part well-educated money managers at various banks and funds who got caught up in the extending-ridiculous-credit-to-poor-people-who-live-in-overpriced-houses madness. If they were making "rational" decisions in their own heads, it can only be that there was something wrong with their heads. They didn't understand the risk of the "securities" they were buying.

But these people are our smartest and brightest -- they MUST have understood the risk. For whatever reason, they thought it was worth it. Worth it for themselves, that is. And it probably was. So their compensation arrangements must have been backwards.

But I digress. My point is that nobody properly understands risk, and even if we mortals were capable of understanding it, in aggregate we will always end up taking too much risk because the downside risk is limited (a bank account at zero, or bankruptcy), while the upside risk is perceived to be unlimited (in reality, I doubt there's much difference between 1 trillion and 2 trillion).

But I still digress. The original issue is Cory's dissatisfaction with the accredited investor rule. First off, this rule certainly doesn't restrict start-ups from taking money from friends and family. Second off, the government rightly controls lotteries and gambling. Investing in start-ups you know nothing about is a little like gambling in a lottery. Third off, there is no shortage of bad people out there who would gladly swindle money from our 80-year-old grandmothers. Not all of these bad people are in jail, and the SEC is never going to find all of them.

So to wisely invest in a company requires both that you have good reason to trust the people running the it and that you have and take the time to understand and feel confident about the business model. If you are missing one or both of these, then your investment is likely adding to a bubble that's going to explode in society's collective face and require wounded society not only to heal itself, but bail you out too. That's what we're living through right now.

The accredited investor rule supposedly keeps this from happening in certain areas of commerce, and now supposedly we've got to find another rule to keep this from happening in the way it just did. Personally, I think government is no better at making rules than bankers are at making loans. So government will look busy until the dust settles, then society will collectively start building its next bubble, with or without accredited investors.

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Re: The end of knowledge

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