Blinded Rationality

In the journey of life, individuals often happen to be at a point from where they have to choose a path from among many paths laid before them. Once they choose a particular path, the other paths are automatically closed and never be available to them in their life. The individuals think that their chosen path is better than other paths and start believing that is the right path for them. However, in reality, there is a chance that one of the other paths could have been a better one. The irony is the other path cannot be seen or experienced unless it is chosen. This other path can only be visualized or imagined and the individuals visualize the other path as less favorable than the chosen path. I call this situation ‘blinded rationality’ because their choice is rational but blinded by the limitation explained above.

Understanding this concept is important because we as individuals, organization, or institution take decisions for self or group or for public to achieve a certain goal. Even the chosen path has inherent problems and opportunities. Each chosen path has multiple lanes and each lane leads us to different destinations. We reach different destinations depending upon how we manage our problems and opportunities. For example, what could have been the state of the U.S. economy had they chosen some ‘X’ as their President instead of President Trump? What could have been the state of the economies of other countries or regions? It could have been better or worse but we would never be able to see that. The world under ‘X’ would have been different with its inherent problems and opportunities. Those problems and opportunities might have been managed with different policy decisions. Consequently, it might have led us to a different destination, a destination that can only be imagined or visualized. No one can prove that. It can best be only in our mind or in a paper.

Another setting example is the Indian stock market. India’s growth rate was around 8% from 2014-2016. Since then it has never seen the previous level though it is growing at or above the Hindu rate of growth. However, the Indian stock market has climbed to its historical peak recently. The stock market community was in jubilation and celebrated the achievement. Skeptics questioned in the media why the stock market is climbing while India has been registering less growth rate in the last 2 years. Let us see the BSE Sensex from 2014-2020. The highest Sensex numbers from 2014 to 2020 are 27739, 28044, 27714, 32683, 37128, 38460, and 40478 respectively. In the first 3 years, the index has not grown. It has been stagnant though India has been registering 8% growth rate. The Sensex has grown more than 15% though India’s growth rate was less than 8%. In the following year, the Sensex has again grown around 15% though India registered a growth rate less than the previous year. In the last 2 years, the Sensex registered less than 5% though Indian economy registered more than 5% growth rate. The recent peak was actually overdue. If we do a bit of math multiplying 27739 with India’s growth rate in the said period, we almost reach 40000 level. This peak is normal in accordance with India’s growth rate. However, people look at this figure differently. Some think that it is irrational exuberance. Some others think that the Sensex should have reached 45000 had the growth rate for the last 3 years been around 8% or more. What is real is 40000 due to our chosen path. The 45000 or 50000 is only in our mind or in paper because the other paths are closed as a path was chosen with some rational thinking. However, 45000 or 50000 was not improbable. We cannot just prove that because of human limitation. We cannot see simultaneously different worlds.

Author: Mathivanan Palraj.

Is John Rawls’ ‘beneficial inequality’ possible?

Inequality

According to John Rawls of the United States, inequalities-either social or economic-are only to be allowed if the worst off will be better off than they might be under an equal distribution. This is precisely the meaning of beneficial inequality. Is ‘beneficial inequality possible, plausible, and practicable at the aggregate level? The following example elucidates that  the application of this principle and judgement of results thereafter to a particular economy is humanly impossible. Consider,

Scheme A: Inequality(benefits are distributed unequally)

Scheme B: Equality(benefits are distributed equally)

To illustrate, let there be 5 persons and total benefits be 100.

In scheme A, the benefits are distributed as: 22, 21, 20, 19, 18. The sum of total benefits is 100 units. The worst off person gets benefits equal to 18 units.

In scheme B, the benefits are distributed as: 20, 20, 20, 20, 20. The sum is again 100 units. Here, everyone gets benefits equal to 20 units.

The worst off person in scheme A is no better off than in scheme B. Scheme B is advantageous for the worst off person of scheme A. Instead, in scheme B, if the State distributes benefits as: 17, 17, 17, 17, 17, taking away 15 units from 100 units, then scheme A is constructed, and construed as advantageous for the worst off person. Therefore, without the State’s intervention, beneficial inequality is not possible.

Or, keeping 100 units as constant in scheme B, the distribution in scheme A should have been: 25, 24, 23, 22, 21, in order to support the principle. In that case, the total benefits in scheme A has to be inflated to 115 units. This will not happen simultaneously unless the State print additional currency worth 15 units. Economists and the Central Bank will question the monetary policy.

We observe from the above example that the two schemes cannot be executed simultaneously.  They are two different worlds that cannot exist together. It might be possible in different dimensions that we humans can conceive but cannot perceive. On temporal consideration, however, it can exist at different time periods or regions. Yet, there are practical difficulties in assessing the results of the two schemes. It is obvious that the two schemes operate on different frameworks, each is built with different systems inherent to its nature.

Hence, comparing an economy in two different frameworks that are real is improbable. Only one world exists at a time that can be experienced. Once we opt for a world, the other worlds are automatically closed.

 

 

The Economic Crisis was Not an Economic One

economic crisis

The economic crisis of 2007 was not an economic one. Why?

The inflation adjusted US housing price index in 1900 was close to 102 (Base year 1890, 100). In 2000, it was 120, and in 2007 it was close to 195. From 1890 to 1990 (100 years), the percentage increase was 25%. From 2000 to 2007 (7 years), it was a whopping 62.5% (Source: Observations, Saturday, July 23, 2011).

For 100 years, the framework in people’s mind was an average annual price growth of 0.25% for housing. All of a sudden, people’s framework of housing price growth changed phenomenally. What was the cause? It was nothing but financial innovation and a conducive environment.

Is financial innovation bad? Consider this. More than 60% of Americans own a house. The remaining 40% of Americans need a house. This is a huge opportunity in the housing industry. We need to build a lot of houses and we need fund for this. Who will finance a huge amount to this housing sector? Neoliberalism does not allow the government to take an active role of this social benefit. The free market forces will find a way to solve this housing problem. In deed! The free market forces found a way.

The total asset value of houses (Single family owning a house) in US was about $20 trillion in 2000. These assets are not productive except that it meets the cost of staying in a house. If you own a house you don’t need to pay rent. If not it costs you a rent. These assets are investments made in the past. What if these house owners are encouraged to build houses for the rest of 40% Americans who do not own a house? Great idea. The house owners can be financed taking the collateral security of their houses. In turn, the house owners can build a second home that can be rented out. As there is huge demand for houses, the asset price will continue to increase. In addition to house rent, the second home will also produce capital gains for the owner. A safe bet for the financial institutions.

Besides, there are other positive aspects for the US economy. Demand for raw materials, capital goods, and labor will place the economy in robust growth. Wage increase will improve income level and purchasing power. In turn, consumption will increase resulting in higher GDP. This really sounds good. Then what went wrong?

It is the greed of financial institutions and some people. The financial innovation was not executed prudently. Loans were sanctioned on bad assets and these bad assets were clubbed with good assets (Securitisation, another financial innovation) in order to get more funds from other higher financial institutions in the hierarchy. The higher financial institutions did not scrutinize the securities. Hedge funds were brought into the game to avoid risks (yet another financial innovation). All these unscrupulous financing happened just to make more profits while the Sun is shining. The Sun was shining but a volcano erupted and spewed dirt that screened the Sun. The edifice built by the financial innovations collapsed. The weak pillars could not withstand the huge load.

Once you start feeding you should not break it before the task is completed. In case of housing loans, the repayment period is very long. People need income continually in order to repay the loans. Otherwise, the loans will require liquidation. The bubble bursts and asset prices come down drastically that deteriorates liquidation process. This is what happened once you stopped feeding. Greed screens prudence.

Disbelief is one important factor that put the break on feeding. A mere 25% growth of asset price over a period of 100 years from 1890 to 1990 had changed to around 62.5% from 2000 to 2007 over a period of just 7 years. Suddenly, people realized that this growth is unbelievable. How long will it go?

Secondly, the wage growth of the 40% American who do not own house was not matching with the asset price growth of 62.5% from 2000 to 2007. Let us see some data: From 1948 to 1973, the productivity was up at 96.7% while the hourly compensation was up at 91.3% for the same period. However, from 1973 to 2013, the productivity was up at 74.4% while the hourly compensation was up at a mere 9.2% for the same period (Automation could be the reason behind that, added by author). Source: EPI analysis of Bureau of Labor Statistics and Bureau of Economic Analysis of data.

That means the wage growth was absolutely not changing and it was stagnating for quite a long period (40 years!). To whom the new houses are built? The newly built houses are just show-pieces, owned by the rich.

Thirdly, the shelter costs have been increasing faster than the costs of other items. Shelter is considered a minimal human need, along with food and other consumer items. Median monthly housing costs, which include utility costs, have increased by 128%, from $348 in 1985 to $793 in 2005 (Source: U.S. Department of Housing and Urban Development Office of Policy Development and Research). While wage is almost stagnating, the shelter costs increased by 128%. That means people reduced their expenditure on food and other consumer items in order to pay the increased shelter costs. When 40% of Americans reduce an expenditure of $445 monthly on food and other consumer items, what is expected to happen? Recession.

Conclusion:

The economic crisis was just one of the dimensions of social order. While the American Social Structure (groups, strata and class, as well as the system of relations between them) provided an opportunity to build numerous houses to the 40% of Americans who do not own a house, the interactions between the sub-structures were not in order. While the American people have not yet completely shifted their mindset (framework) from the past, unbelievable asset price increase instilled doubt in their mind and in the institutions. The crisis within the institutions was another dimension that was not in order. Demography is another dimension which is undergoing severe crisis currently.

Why are Fat People Fat?

fat man

Yesterday, I traveled in a public transport bus. There were a few seats available. Three vacant seats, one in a two-seat and one each in the other two three-seat, were available to me. They were not bucket seats. The two persons in the three-seat were sitting at the extreme seats comfortably. They never bothered me. When I approached, they offered me the middle seat. But it was quite difficult to get into the middle seat. I had to physically disturb them to get into the middle seat. They were not ready to get up and ease my going to the middle seat.

They were ready to get disturbed. However, I decided not to disturb them. Instead, I opted to take the one in the two-seat. In that case, I don’t need to disturb anybody. But the person in the two-seat was really a big fat boy. He was keeping his two legs so wide that only 20% of seating area was available to me. I decided to take that seat. The boy did not bother to adjust for my comfort. He was playing with his cell-phone. He bought only one ticket. I also bought one ticket. However, he boarded the bus before I.

Bus fare is not charged according to a person’s weight. Why? I was thinking to find a solution for this problem while traveling the rest of my journey. Finally, I realized that this problem is a complexity. If a rule comes into force that bus fare should be collected according to the weight of a person, then that rule will benefit only the bus owners because the thin and lean persons will be charged the same old fare while the fat persons will be charged more and that extra amount goes straight into bus owners’ pocket. Therefore, people don’t bother to raise this issue. Consequently, the thin and lean continue to suffer. It’s at the sacrifice of the thin and lean that the fat is enjoying.

Why is the problem a complexity? There are practical problems. How do you weigh a person before they board the bus? Even if a weighing machine is available, it will take extra time to weigh a person and a calculator to calculate a fare proportion to their weight. Busy buses cannot do this.  Assuming that this is done, how do you seat them so that all passengers are seated proportionate to their fare and weight? Ultimately, the bus needs AI to allocate seats to optimize maximum number of persons in order to get maximum profit. Execution of this rule involves a cost. That will be again collected from the passengers. One simple solution, though not perfect, is to have bucket seats for all buses. But again you have to pay more for this comfort and this will be collected equally from all passengers fat or thin. In any case the thin and lean is not benefited financially.

A similar situation exists in middle class restaurants. A complete meal is priced at a fixed cost. Whatever quantity you eat you pay the same price. The fat eats more but pays the same price. The fat eats more at the cost of the thin and lean. Why does it happen perpetually? Why is the check not proportionate to quantity you eat? The lean becomes leaner and the fat becomes fatter. It seems it’s good to be fat.

In upper class restaurants you pay according to what you order but you pay more in such restaurants. The thin and lean have no choice but pay more. The restaurants are deliberately doing this in order to get more fat customers. If they increase the price the fat customers are not happy and the restaurants will lose many customers. In order to satisfy the fat customers they take something from the thin and lean and give it to fat. There is no other choice for the thin. The restaurants don’t lose the thin customers. The restaurants optimize their profit at the cost of the thin and lean. It’s taxing the thin and lean.

Why Inflation Hurts the Aged the Maximum

pexels-photo-320442

There is a convincing reason for the aged to work even after retirement from work in certain countries especially if their retirement benefits are not large enough and inflation is more than the optimum level. Inflation at best captures average price of a predetermined basket of goods. Individuals, however, have different preferences for goods. Even if inflation is kept at the optimum level, it might affect certain people unfavorably if their preferences for goods are on the wrong side. For example, if a retiree just makes both the ends, an increase in house rent of $20 per month, will force the retiree to cut his consumption of preferred goods or to find alternative residence. In both the cases, the retiree forgoes satisfaction by reducing usual consumption considering the logistic cost involved in shifting the residence. On the aggregate level, it is negative for the economy. As inequality in many advanced and developing countries widens more and more in recent times, a favorable social benefit policy is imperative. This also calls for attention to early financial planning before retirement, failing which a person’s retirement life will be in jeopardy. Financial education is in the interest of the State rather than its citizens.

The best social benefit that a central bank and a government can provide to people is controlling inflation and keeping it at an optimum level. The following data best depicts the financial pressure due to inflation that is higher than optimum level.

Suppose, your monthly expenditure is $5000 at present cost. If you are retiring after 24 years, then what will be your monthly income requirement? It depends upon where you are living, and who your central bank is.

  • If your central bank is keeping the inflation at 2%, then your monthly requirement will be $8040, after 24 years.
  • If your central bank is keeping the inflation at 3%, then your monthly requirement will be $10145, after 24 years.
  • If your central bank is keeping the inflation at 4%, then your monthly requirement will be $12795, after 24 years.
  • If your central bank is keeping the inflation at 5%, then your monthly requirement will be $16120, after 24 years.
  • If your central bank is keeping the inflation at 6%, then your monthly requirement will be $20240, after 24 years.
  • @7% your monthly requirement will be $25385.
  • @8% your monthly requirement will be $31665.
  • @9% your monthly requirement will be $39500.
  • @10% your monthly requirement will be $49270.

If you have any specific goal such as buying a home at your retirement, then you will have to look for inflation index of home. If you can buy a home for $100,000 today it will cost you $1 million after 24 years at 10% inflation. It is impossible for a person who just makes both the ends. Everyone needs surplus income and the surplus income has to be invested intelligently.

How to become Rich While You are Young

rich persons

I would like to edit the topic question: How can I get rich on my own while I am still young? One can get rich through inheritance as well. Therefore, I’m not considering inherited wealth. How do you create wealth on your own? It’s not easy. You will have to work really hard. If luck favors, you will be rich sooner. Luck, I mean favorable conditions.

The difficult part: The rule of compound rate of growth and the initial point of your trajectory.

Zero never gives you growth. Whatever the rate of growth you apply zero always remains zero. First, you have to enter into the positive zone. The initial amount is the biggest impact on your wealth. Therefore, you have to earn this big initial amount at the earliest. For example, you invest $1 at a compound rate of 10%, approximately after 14 years it will become $4, at the end of 21.5 years it will become $8. You will be rich by $8. At the same time, if your initial investment is $1,000,000, you will get $8,000,000 at the end of 21.5 years at 10% compound rate (800% of initial investment). The co-ordinate point from where your trajectory takes place is very important.

Wise investment will make you rich:

If you are able to get a higher rate of growth you will get rich sooner. In the previous example we considered only 10% compounded growth. In fact, you can get higher rate if you invest your money wisely. When I was young I invested in a mutual fund (tax scheme, lock-in period of 3 years) an amount of $5000 in order to get tax relief. After 3 years, the NAV was 500% of the initial offer price. I got $25,000. Had I invested more on this investment I would have been rich at 28. That was a favorable time in life. It’s rare in life. You may get this kind of favorable conditions 3 or 4 times in your life. 3 or 4, because you missed some in the past and you might miss some more in the future. Identifying such conditions is the key to become rich. In general, young people will miss out the first chance or even more as I missed. You will miss out early chances if your mind is engaged in non-financial activities. Only experience will teach you.

Short term investments will not make you richer:

Time is another important deciding factor. Accumulation takes its own time. Time and higher rate of compounded growth rate will make you rich. If you want to be rich in 7 years, then the growth rate has to be much higher. If your target is $ 1,000,000,000 and now you have only $100, then every year it has to grow 10 times in order to reach your target. That is an extraordinary growth rate. So it is quite difficult to become a billionaire with an investment of $100. The probability is very, very low. Therefore, don’t set an unrealistic target. Allow time to accumulate your wealth.

People surrounding you is another important factor:

99% of the people surrounding you will make you to spend your money. My dad asked me money to invest in plantain crop. I gave him the money he asked for. After 1 year he told me that the entire plantain crop was flattened by the monsoon wind. The return he got was zero. My money was also gone in the wind.

My uncle advised me to buy a car when I was 25. I did not have enough money to buy a car. I had to borrow money. I would have got a bank loan easily. Somehow, I postponed the idea of buying a car at that time which was really an unwanted thing. That decision was good and made me richer now.

One of my neighbors was ready to sell his house and offered me a price. I did not have money at that time. I had only half of the money. I would have got a bank loan for the remaining amount. Somehow, I declined the offer. That was really, really a bad decision I made in my life. That investment would have fetched me 100000% profit by now. This is another favorable condition that I missed out.

Do no invest in stock market without learning the basics

Once I bought 100 share of a company(IT). Each share costed me 1200. Within 6 months, the market price reached 3600. I did not sell it thinking that it was a value stock. I decided to hold long. The next month, it started coming down due to some head wind. The entire stock market was nose diving. My stock reached to the bottom of issued price of 40 or 45. I lost all my money. Yet, I did not sell it because there was nothing to lose more. I waited, and waited for 7 years patiently to see the price going up to 85. During this period, the company had been correcting and consolidating its market share. I bought more shares of the same company. After 10 years, now it is trading at its previous peak.

Another stock that I invested along with the above mentioned at around 45 had not climbed even to 100 in the initial 10 year period. In the next 3 years, it climbed to 250. In the following 3 years, it crossed 1000 and now trading at around 1500.

Yet, there are other stocks that had never been able to raise their head after the collapse.

This is how stocks behave in the market. There are reasons why they behave so. You have to learn the basics.

My advice is a mindful living. Study your surroundings and look for favorable conditions. Invest time and money to improve yourself which will always help you. One favorable condition is enough to make you rich. Be mindful. Don’t miss it.

Living Without A Job

Living without a job

It is increasingly becoming difficult to get a job. Hundred thousand young people are applying for a mere 100 vacancies. The ratio of job applicants to number of vacancies will only increase in the coming years. Employers say that most of the job seekers are not skilled or not employable. Job seekers say that they are clueless about what skill if they acquire will fetch them a job. In this world, the skill requirement of the industries are changing and they are changing very fast. The cost of learning new skills are expensive. The technology change is faster than the time taken to acquire a new skill and settle in a job. Before we settle in a job we need to acquire another skill. Where are we heading towards?

This problem will continue to exist for some time. Then suddenly people will realize that Job is meaningless in this world. Before it happens something is to be done for what these young people will do next? Have you ever tried to live without a job and without much savings in your bank account? Try to live without a job and without your inheritance. If you can survive you will be successful and happy for ever.

Machines are efficient and most preferred for mass production that had stolen your jobs and will continue to put pressure on you. One day every job will be done by a machine. You will be just a spectator. What work will you do to earn your food and a shelter? Nothing.

How do you live without work? Somebody has to give you food for free. Even if you are given free food you become dependent and the masters don’t even expect you to work for your food. What do you do in that world? A meaningless and worthless life or a meaningful and innovative life. How do you pass your time? You depend on the masters for everything you need. The masters are depleting the resources as fast as possible so that you will have nothing to explore. We waste a lot of resources on things which are not essential to life. A case for an alternative world is compelling, where your life is meaningful and joyful. You will have the right to work and therefore the right for your food. You don’t depend on anybody anymore. You don’t get into the trap of dependency.

Your parents spoiled you by giving you money. Without that money you cannot think of a life. You stick on to that money. As long as you stick with that money you are happy, and the moment you are without money you are a big zero. Learn to live without money and you will know what life is. I tried to live without a job and without much savings in my bank account. It was quite difficult. My bank balance was coming down every succeeding month. Within 2 years I had to find a job that gave me regular income. I could not withstand the pressure of living without a job and without much money in my bank account. Life was not easy. Fortunately, getting a job was not very difficult for me at that time. I could find a job immediately. You don’t get anything without money. Money is a necessary evil. You need to work in order to get money. When you don’t find work what do you do? Whom do you approach for money?

The rise of Bitcoin could be a case of alternative world that is against the existing system. But Bitcoin is not a system of alternative world. It depends on the existing system to survive. It has to cooperate with the system or to destroy the system in order to survive. Any alternative world needs its own rule of survival. It has to create its own space, people, and economy that would in no way depend on the existing system and at the same time not in conflict with the other. That means the two systems will coexist in isolation. Any kind of cooperation between these two systems tells that the systems have inherent weaknesses to survive on their own. If it can thrive on its own strengths then only the alternative world will be successful. It should not strive to replace the existing system as mimicking the old system is meaningless and such mimicking only reveals the weakness of its foundation on which an alternative world is built.

The idea of ISIS could be another incident of alternative world. Thinking of alternative world is not new in the history of humans. Every political uprising is an incident of seeking an alternative world. Every socio-economic movement is an incident of seeking an alternative world. History also tells us that such incidents were oppressed only to emerge later with more power than before. This is because we did not understand the underlying factors which were responsible for such risings. Certain risings were successful and they tried to establish an alternative world that failed later. If we don’t find solutions for the causes the risings will continue to emerge from the graveyard. The ghost will continue to haunt us.

Universal Basic Income (UBI) is a temporary solution that can hold back the sufferings of people without jobs. Slowly and steadily the machines will take over all jobs or at least most jobs. If we believe in the efficiency of machines, then this will eventually happen. At that moment, UBI will become meaningless. The system has to go on free rationing. Central banks and their monetary system will lose their importance. What all is required for the machines to do work is a constant supply of energy? All other requirements of the machines will be taken care of by the machines themselves. If the machines learn to produce their own energy then our job is much easier. The machines will take care of your food crops. They will take care of food processing. They will take care of supply chains. They will take care of your kitchen. They can even feed the food into your mouth. What else do you want? What all you do is eat, watch TV, and sleep.

There is a catch here. What do you prefer, humans playing the shows or machines playing the shows? There might be some jobs for the humans that would be highly competitive. Such jobs will not provide you salary but value and a position. Humans and machines will compete with one another to entertain you. It has already begun.

All is well as long as the machines are doing their jobs correctly. In the event of collapse of the system, the people who suffer the most will be you. By that time, you will have forgotten all your survival abilities. You will not be able to do even the basic works. We need a second plan ready to tackle any such misadventure. The plan B should go side by side and be more powerful to stop any misadventure or at least allow us to begin where we stopped our normal work. One plan could even be leaving some remote tribes untouched by mainstream life so that the species survives in the event of system collapse.

The event of misadventure compels us not to lose our learned abilities that are necessary to survive on this planet. Education has to continue even though it does not give you any job. The purpose of education is knowledge and acquiring new knowledge. Perhaps it could be learning a new skill that the machines cannot do. You will not be competing with fellow humans but with the machines. The challenge of education may be to fix the malfunctioning of machines. Another big challenge of education is motivating children to learn. In the absence of motivation for money and materials, the motivation will stem from love of humanity. Teachers will lose their enthusiasm to teach our children without love for humanity. At present, teaching is a profession. In the world of machines, machines will be replacing the teachers. I learnt a lot from my teachers, then from books, and now from machines. But, why should I learn anything when I get my food, medicine, and a shelter for free? Children will try to enjoy their life without learning anything. Learning is painful especially when you don’t want to learn. At the same time, learning is joyful when you have a passion for that. The key is in your mind. How to train the children to inculcate this mind?

To begin with, we can trust our traditional motivation technique. Children will be awarded food stamps for their activities in the school, which they can use it for buying things. Perhaps, this can be extended to adults also. Instead of free rationing, food stamps will be given to people for their works and activities. This will help us to engage in some activities. The activities are anything from sports, arts, and research works. Some of us will supervise and grade these activities. In due course, children will learn the importance of learning and from there they will find learning is joyful. I think schools should start issuing food stamps to children for their activities on a graded basis as a motivation. Let them earn while they learn.

Philosophy, Machine, and AI

blind

Is philosophy undergoing a radical transformation? In recent times, this question has been very popular especially after the radical development that has been taking place in machine learning and artificial intelligence. Whether this radical development and application of such knowledge in machine learning and artificial intelligence is setting off a radical transformation of traditional philosophy?

What is philosophy?

The discipline concerned with questions of how one should live (ethics); what sorts of things exist and what are their essential natures (metaphysics); what counts as genuine knowledge (epistemology); and what are correct principles of reasoning (logic)?Wikipedia

Some definitions:

Investigation of the nature, causes, or principles of reality, knowledge, or values, based on logical reasoning rather than empirical methods (American Heritage Dictionary).

The study of the ultimate nature of existence, reality, knowledge and goodness, as discoverable by human reasoning (Penguin English Dictionary).

The rational investigation of questions about existence and knowledge and ethics (WordNet).

The search for knowledge and truth, especially about the nature of man and his behavior and beliefs (Kernerman English Multilingual Dictionary).

The rational and critical inquiry into basic principles (Microsoft Encarta Encyclopedia).

The study of the most general and abstract features of the world, the grounds for human knowledge, and the evaluation of human conduct (The Philosophy Pages).

If we look at the definitions we can find the most underlying principle of philosophy is questioning. The questioning of what is life? How one should live? What sort of things do exist and what are their natures? What are correct principles of reasoning? What are the principles of reality, knowledge, or values?

Finding the answers or solutions to questions or problems through the application of the principles of reasoning is the aim of philosophy. In short, search for knowledge and truth. The search does not necessarily result in finding the truth. However, the process employed in finding the truth is more important. History tells us that wisdom of humans (the body of knowledge and experience that develops within a specified society or period) changed and has been changing continuously. Humans are in pursuit of wisdom (the ability to think and act using knowledge, experience, understanding, common sense, and insight)

Blind beliefs are the biggest obstacles that arrest our thinking process. Philosophers question these blind beliefs or rather question every belief. They are skeptical on everything. In fact, it is one of the philosophical methods (Methodic doubt) they employ in order to find the truth. Philosophizing begins with some simple doubt about accepted beliefs. They apply methodic doubt and knowledge to test the functional, dysfunctional, or destructive nature of an accepted and prevailing belief in a society.  Wait a moment! We have a problem that is to be addressed first. When we say ‘ knowledge’, it does not necessarily lead us to the truthfulness of the conclusion they arrive at. The existing knowledge is not complete. Therefore, there is a possibility of fallacy of conclusion. A conclusion may be valid but it need not be a truth. With the introduction of an additional premise or deletion of an existing premise, the nature of the conclusion will undergo a change.

Fallacies

The other common obstacles to logical and critical thinking are a) Confirmation bias, b) Framing effects, c) Heuristics, and d) Common fallacies such as fallacies of relevance, the Red Herring fallacy, the Strawman fallacy, the Ad Hominem fallacy, fallacious appeal (to authority), the fallacy of composition, the fallacy of division, equivocation, appeal to popularity, appeal to tradition, appeal to ignorance, appeal to emotion, begging the question, false dilemma, decision point fallacy, the slippery slope fallacy, hasty generalizations, faulty analogies, and the fallacy of fallacy. And we can add the two formal fallacies a) affirming the consequent,  b) denying the antecedent.

We humans make mistakes. It’s often said that to err is human nature. Having known the myriad fallacies of logical arguments, we have been developing certain methods or models to avoid such errors. The philosophical methods are our tool kit that when employed reduces our mistakes.

Apart from these obstacles, we have certain other human limitations such as limitation of long-term & short-term memory capacity and limitation of our sensory capacity. All these limitations are obstacles to our philosophizing. Therefore, we make mistakes knowingly and unknowingly. However, we have never stopped our endeavor to become the finest species on earth.

On the other hand, machines though not the perfect species can avoid certain human limitations while performing the philosophizing. If they are given two logically supporting propositions they can deduce a perfect conclusion. However, if they are given randomly selected propositions will they be able to pick the right propositions that are logically supporting the conclusion? It depends upon the algorithm that we feed to the machine. But then, we are not perfect. We have not yet completely understood how the human brain functions. The main purpose of using a machine for philosophizing is to avoid errors. The machine might imitate the human errors, a humiliating human characteristic that we fervently wanted to avoid.

One approach is to allow the machine to learn thinking and take decisions on its own. In the process, the machine may be able to develop its own brain that can surpass the ability and capacity of human brain. That could be a possibility. This approach is already in trial.

Human wisdom is the ability to think and act using knowledge, collective experience, understanding, common sense, and insight. Will the machine be able to attain and surpass the human wisdom?

The machine can be fed the knowledge accumulated by humans. However, the challenge is how the machine will pick up the right knowledge for a right claim. The machine does not have experience of human life. That is actually a blessing in disguise. If we feed all our experiences to the machine it will be a mere cocktail of beliefs and ideas that are different and mostly diagonally opposite to one another. The best thing is to feed information as little as possible and leave the rest to the machine to have the first-hand experience with humans. That means the machine will live with human beings and interact with humans so that they develop knowledge of human behavior and hopefully the other human characteristics such as emotional understanding, common sense, etc.

Most probably, the philosophical methods which include the rules of reasoning to make right conclusions will be greatly useful to the machine. It can take decisions minus the logical fallacies that we commit knowingly and unknowingly. Such a machine could really immensely be helpful to humans especially as a guide or guard that can work without succumbing to emotions and biases.

Apart from philosophical methods, the machine can also be fed with super sensory powers without which human intelligence is limited. Humans might take a longer time to develop such built-in extra sensory powers. Such a machine would be a marvelous piece of art.

Therefore, the philosophical methods will transform the nature of machines rather than the machines setting off radical transformation of philosophizing. The machines would assist humans to take right conclusions. The machines would pick up the right propositions from the enormous data and provide us a valid conclusion which is a tiresome, time-consuming task of humans. The machines can work continuously without boredom unless they develop their own human-like emotions. Hope, the machines understand human emotions and at the same time do not have emotions.

 

The Counting Mind

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Counting began much earlier. We can trace it to ancient civilizations. In fact, counting began much earlier than the onset of ancient civilizations. Counting of objects was felt necessary even in the most primitive human society. Humans wanted to know the number of animals or the number of fellow humans. Early humans had some idea of counting but it took a long time to invent symbols for counting.

In modern human society, we teach our children mathematics with counting of numbers. It is an important elementary training that is necessary to comprehend the subject of mathematics. The first operator we use is addition to count numbers. Then, slowly we introduce multiplication to count the numbers fast. For example, if there are five sets of objects and each set contains five objects, then we use multiplication operator to find the total number of objects instead of the long process of counting each object using the simple addition operator.

We did not stop there. We invented advanced models like permutation and combination that simplify our counting process. For example, if a person can go from city A to city B in 4 distinct routes and from city B to city C in 3 distinct routs, then the person can take 12 distinct routes to reach city C from city A, provided there is no other direct route from city A to city C. We just multiply 4 and 3, that is, you have to choose one route from A to B and another route from B to C. There are four ways to choose from the former and three ways to choose from the latter. 4 and 3 or 4×3 or 4C1×3C1. The letter ‘C’ indicates combination, the rule for selection. 4C1 means choose 1 from 4. If there are 4 distinct routes you can choose a route in 4 ways.

What is fascinating is how our mind evolved to count in different ways to arrive at the same result. At one point in the evolution, humans were unable to quantify the objects though had some idea about quantity. This is not far away in the evolutionary time scale. Invention of number symbols especially a symbol for zero ought to be the inflection point for the growth and development of counting in mathematics. Instead of manually counting objects we are using principles of counting in order to save our time and energy, which had probably driven our mind to invent computing machines.

How many arrangements can be made from the letters A, B, C, and D, using all letters without repetition?

ABCD, ABDC, ACBD, ACDB, ADBC, ADCB; BCDA, BCAD, BDAC, BDCA, BACD, BADC; CABD, CADB, CBAD, CBDA, CDAB, CDBA; DABC, DACB, DBAC, DBCA, DCAB, DCBA.

This is how we manually write down all possible words and count them to arrive at the answer. It’s tedious and time-consuming. Imagine, how much time will it take if you are given all the 26 letters?

Let us see how our mind had evolved to count the number of arrangements without manually writing down all the possibilities. Look at the data. I have written all the possible arrangements systematically in order not to allow repetition. This is the first step. There are four letters and therefore we need four places to write each letter. There are four sets of arrangements and each set contains six arrangements. Hence, we have 4×6=24 arrangements. The first set starts with the letter ‘A’, the second set starts with the letter ‘B’, and so on.

Now, let us think in a different way. There are four places and there are four letters to occupy those four places. In the first place, any of the four letters can occupy in four ways, that is A, B, C, or D. In the second place, we have only three letters since we have already consumed one letter for the first place. Similarly, for the third place we have two letters and for the fourth place we have only one letter. Therefore, the number of arrangements will be 4×3×2×1=24. Symbolically, we represent it as 4! (Read as 4 factorial) or 4P4 (P represents permutation, the rule for arrangements).

There is also another explanation for this result. We can use the combination. There are four letters and four places. We are going to place one letter in the first place. Since there are four letters we can choose in 4C1 ways. For the second place, since we are left with only three letters, we can choose in 3C1 ways, and so on. Hence, we have 4C1×3C1×2C1×1C1=24.

Following the principles of counting, we can now count arrangements easily even if you are given all the 26 English alphabets. This is the power of our mind. It’s this power of mind that led us to invent many things. To really appreciate our power of mind I would like to give you another illustration.

5 letters are to be sent to 5 different addresses. The 5 addresses are written on 5 different envelopes. In how many ways can all the 5 letters go to the wrong envelopes?

This particular problem is solved using the principle of inclusion and exclusion, viz. derangements (symbolically represented as !n)

The problem of counting derangements was first considered by Pierre Raymond de Montmort in 1708. He solved it in 1713, as did by Nicholas Bernoulli at about the same time (Wikipedia). The derangement formula is: .

Now, just substitute n=5 in the above formula, you will get the answer as 44. We have to do a bit of research to find how Pierre conceived this idea and arrived at the above formula. However, I had tried to do a bit of research on how the human mind could have evolved to find this formula. Sitting on the shoulders of wise men, I first used the induction method. If there is one letter and one envelope, there is zero way of putting in the wrong envelope. Look at the formula, the first two terms cancel it out. It gives you the answer as zero.

If there are two letters and two envelopes, you can place the two letters in only one wrong way. Look at the formula, the first three terms give you the answer as 1. I continued the induction method up to 5 letters and found the answer as 44. It took a lot of time to do it manually. However, I determined to do it to find the pattern. Pattern finding is my passion. The first 5 letters gave me a sequence like 0, 1, 2, 9, and 44. Five results are a safe bet to find a generating term as mathematicians suggest. I tried the method of differences. I could not find a meaningful pattern. I really got frustrated at one point of time. I looked back at my manual workings for each case. I split the numbers in various combinations to arrive at a pattern. Finally, I got the pattern. You have to combine the previous two terms and multiply with an integer to get the next number.

(0+1)×2=2

(1+2)×3=9

(2+9)×4=44 and so on.

Given the first two results, which you can easily manually find, you can generate the subsequent terms. All you need is 0 and 1. I checked for the next numbers and found that they are obeying the pattern.

So, the generating term I got was: Sn = (Sn-2+Sn-1)×n, n≥3; S1=0, S2=1.

The above derangement question was asked to me by a student in 2015. It’s at that time that I used the induction method to find the answer. At that time, I had not come across the derangement formula. That was a blessing in disguise, otherwise I would not have gone for induction method.

In 2016, the same question was again asked to me by a student. It’s at that time, that I tried to find a pattern and got it too.

Surprisingly, in 2017, when I looked back at my workings, I found another model to find the same result. This time it was even much easier and simpler. 5 letters and 5 envelopes. 5 distinct things in 5 distinct places. The total arrangements are 5!=120, which we have already worked out in the earlier example. What we have to do is divide n! successively with divisors starting from 2, 3, 4, and so on up to n. In our case, n = 5. Then, find the sum of the sequence of all quotients with operators minus and plus successively as used in the derangement formula.

120÷2=60

60÷3=20

20÷4=5

5÷5=1

60-20+5-1=44.

Therefore, the formula according to my finding is:

n!/2 – Q1/3 + Q2/4 – Q3/5+…+ (-1)^n*Qn-2/n; Q1, Q2,… are successive quotients.

 Our mind is designed to evolve. Should we stop our mind evolving? What are we teaching to our children? Most of the millennial do not know multiplication and division. The few ones who can do division hate finding three decimals for an accurate answer. It’s a dangerous trend that will drive our children’s mind to that of primitive society. Are we pushing our younger generation back to primitive age? Are we deliberately setting a stage for a different human species to branch out? It’s not improbable for the humans to branch out into a new species in the scheme of evolution. However, that is the work of evolution. Or, the new species is already existing and destroying the not so smart human species. The millennial are a bit lazy and depend too much on machines to do their works. In the process, their mind is becoming dormant and not evolving to keep up with others (the few smart children). Let us do something before it is out of our hand.