On the Road
Event Date: [ 1.24.10 ]
Location:
United States

Edge was in Munich for DLD 2010 and an Edge/DLD event. The event, entitled "Informavore", is a discussion featuring Frank Schirrmacher, Editor of the Feuilleton and Co-Publisher of Frankfurter Allgemeine ZeitungAndrian Kreye, Feuilleton Editor of Sueddeutsche Zeitung, Munich; and Yale computer science visionary David Gelernter, who, in his 1991 book Mirror Worlds presented what's now called "cloud computing".

Gelernter's June, 2000 manifesto, published by both Edge and Frankfurter Allgemeine Zeitung, was at the time widely read and debated. In it, he famously wrote: "Everything is up for grabs. Everything will change. There is a magnificent sweep of intellectual landscape right in front of us."

FURTHER READING ON EDGE:
The Age of the Informavore: A Talk with Frank Schirrmacher
Lord of the Cloud: John Markoff and Clay Shirky talk to David Gelernter
"The Second Coming: A Manifesto" by David Gelernter
The Edge Annual Question 2010: How Is The Internet Changing the Way You Think?

On the Road
Event Date: [ 9.30.09 ]
Location:
United States

Edge was invited by Alvaro Fischer, the Director of Fundacion Ciencia Y Evolucion in Chile to attend the Foundation's Darwin Seminar in Santiago, entitled "Darwin's Intellectual Legacy To The 21st Century" and join the eight speakers (all Edge contributors) on a trip to the "extreme south" including a trip along "The Beagle Channel", named after the ship HMS Beagle which surveyed the coasts of the southern part of South America from 1826 to 1830.

Alvaro Fischer

Leda Cosmides

Helena Cronin

Daniel C. Dennett

Nicholas Humphrey

         

The Seminar, which ran for two days, attracted an audience of 2,200 people on each day...

"Our intention is to illuminate and discuss how Darwinian thought influenced the disciplines that focus on the study the individuals (biology, neuroscience, psychology); the individual within their social interactions (anthropology, sociology, economy, political science); and how these concepts pertain, in general, to a moral philosophy."

Ian McEwan Steven Pinker Matt Ridley John Tooby

"We wish to explore how, from Darwinian thought, there emerges a vision of what it is to be a human being. And that this vision is fundamental and coherent with the entire body of accumulated scientific knowledge. With reverence for the details of their application, it is the impact of Darwin's ideas that is the reason we are celebrating Darwin's anniversary."

 

After the Seminar, the Foundation flew the group to Tierra del Fuego and The Beagle Channel, where we boarded the Chilean Navy Patrol boat SS Isaza at 6am at Puerto Williams the next day for a 19-hour trip to "the end of the world". Charles Darwin, on the second trip of HMS Beagle under Captain Robert FitzRoy, wrote in his field notebook in 1833, "many glaciers beryl blue most beautiful contrasted with snow".

As part of our celebration the three hundredth edition of Edge, we are pleased to present a video record (with accompanying slides) of the eight talks, a video interview with program organizer Alvaro Fischer, and a Photo Galleryof the trip.

JB

Photo Credits: The Beagle Channel photographs on this page (and releated in the Photo Gallery) are by Steven Pinker. Images in the Photo Gallery are by Pilar Valenzuela (with the addition of the Pinker images and snapshots added by the speakers).


"Mountain In Glow of Sunrise Beagle Channel"


DARWIN'S INTELLECTUAL LEGACY TO THE 21ST CENTURY

A Talk With Alvaro Fischer

ALVARO FISCHER mathematical engineer, entrepreneur and businessman, is President of the Ciencia y Evolución Foundation, organizer of the 2009 seminars on Darwin’s Legacy to the XXI Century , member of the editorial committee of the El Mercurio newspaper, author of Evolution: The New Paradigm.

Further reading on Edge"Why Chile?" by Alvaro Fischer


"Clouds Over Darwin Range"


Some people think today that it is impossible for a mindless process to produce evolution. ... It isn't. ...There may be an intelligent God hidden in the evolution process, but if so, he might as well be asleep, since there is no work for him to do!

DARWIN AND THE EVOLUTION OF REASONS

By Daniel C. Dennett

DANIEL C. DENNETT is a philosopher; University Professor, Co-Director, Center for Cognitive Studies, Tufts University; Author, Breaking the Spell: Religion as a Natural Phenomenon

 


"Buff Necked Ibises In Flight"


There's a mismatch between the modern versus ancestral world. Our minds are equipped with programs that were evolved to navigate a small world of relatives, friends, and neighbors, not for cities and nation states of thousands or millions of anonymous people. Certain laws and institutions satisfy the moral intuitions these programs generate. But because these programs are now operating outside the envelope of environments for which they were designed, laws that satisfy the moral intuitions they generate may regularly fail to produce the outcomes we desire and anticipate that have the consequences we wish. ...

EVOLUTIONARY PSYCHOLOGY Cognitive instincts for cooperation, institutions & society

By Leda Cosm ides

LEDA COSMIDES, is the founder of the field of Evolutionary Psychology. She is he co-director of UCSB's Center for Evolutionary Psychology.


"Chilean Armada Ship PSG Isaza"


The modern social sciences are built on an Aristotlean blank slate foundation. On the Aristotlean view the mind is like a tape recorder or video recorder assumes: the mechanisms of recording (learning) do not impart any content of their own to the signal that it absorbs our mental content is therefore wholly supplied by the senses, especially from social sources (culture). Basing the social sciences on the mistaken theory that the mind is like a blank slate was a fundamental error that has kept the social sciences from being as fully successful as the natural sciences.

THE EVOLUTIONARY APPROACH TO THE SOCIAL SCIENCES

By John Tooby

JOHN TOOBY is the founder of the field of Evolutionary Psychology. He is he co-director of UCSB's Center for Evolutionary Psychology.


"Island Clouds and Mountains"


Language is an adaptation to the "cognitive niche". It facilitates exchange of information, negotiating of cooperation. But indirect speech (polite requests, veiled threats & bribes, sexual overtures) are a puzzle for the theory that language is an adaptation for efficient communication. Language is an adaptation to the "cognitive niche". ...

LANGUAGE AND HUMAN NATURE

By Steven Pinker

STEVEN PINKER is a Harvard College Professor and Johnstone Family Professor of Psychology, Harvard University; Author, The Stuff of Thought.


"Upland Goose In Flight"

 


Farming — a division of labour between humans and other species; Fossil fuels — a division of labour between humans and extinct species?

PARALLELS BETWEEN ECONOMICS AND EVOLUTION, OR — WHAT HAPPENS WHEN IDEAS HAVE SEX

By Matt Ridley

MATT RIDLEY is a Science Writer; Founding chairman of the International Centre for Life; Author, Francis Crick: Discoverer of the Genetic Code.

Further reading on Edge"The Genome Changes Everything": A Talk with Matt Ridley


"Dramatic Sky Beagle Channel"


If we want to change the world, we need first to understand it. And when it comes to understanding human nature — male and female — Darwinian science is indispensable.

WHY SEX DIFFERENCES MATTER: THE DARWINIAN PERSPECTIVE

By Helena Cronin

HELENA CRONIN launched and runs Darwin@LSE. She is a Co-Director of LSE's Centre for Philosophy of Natural and Social Science. Author,The Ant and the Peacock: Altruism and Sexual Selection from Darwin to Today.

Further reading on Edge:"Getting Human Nature Right": A Talk with Helena Cronin


"Blue-Eyed Comorant In Flight"


...I want to engage you in a discussion of the deep history of beauty. By deep I mean as seen from an evolutionary perspective. I am an "evolutionary psychologist".  I believe that to understand and fully appreciate human mental traits, we need to know why they are there — which is to say what biological function they are serving.  Evolutionary psychology has been making pretty good progress. But, as we say, "there are still some  elephants in the living room" — big issues that no one wants to talk about. And human beings worship of the beautiful remains  one of the biggest.

BEAUTY’S CHILD: SEXUAL SELECTION, NATURE WORSHIP AND THE LOVE OF GOD

By Nicholas Humphrey

NICHOLAS HUMPHREY is Professor Emeritus, London School of Economics and author of Seeing Red: A Study in Consciousness.


"Fuquet Glacier Face"


I'm going to talk about some convergences, about arts and science, as far apart as science and religion, two magisteria, if you might say, and yet at some human level they converge.

ON BEING ORIGINAL IN SCIENCE AND IN ART

By Ian McEwan

IAN MCEWAN, novelist, is the author of On Chesil Beach.


"Soft Light Beagle Channel"


Master Classes
Event Date: [ 7.24.09 ]
Location:
United States

On July 24, 2009, a small group of scientists, entrepreneurs, cultural impresarios and journalists that included architects of some of the leading transformative companies of our time (Microsoft, Google, Facebook, PayPal), arrived at the Andaz Hotel on Sunset Boulevard in West Hollywood, to be offered a glimpse, guided by George Church and Craig Venter, of a future far stranger than Mr. Huxley had been able to imagine in 1948.

In this future — whose underpinnings, as Drs. Church and Venter demonstrated, are here already — life as we know it is transformed not by the error catastrophe of radiation damage to our genetic processes, but by the far greater upheaval caused by discovering how to read genetic sequences directly into computers, where the code can be replicated exactly, manipulated freely, and translated back into living organisms by writing the other way. "We can program these cells as if they were an extension of the computer," George Church announced, and proceeded to explain just how much progress has already been made. ...

George Dyson, from The Introduction

Edge Master Class 2009
George Church & J. Craig Venter

The Andaz, Los Angeles, CA, July 24-6, 2009

AN EDGE SPECIAL PROJECT

GEORGE CHURCH, Professor of Genetics at Harvard Medical School and Director, Center for Computational Genetics, and Science Advisor to 23 and Me, and J. CRAIG VENTER, Founder of Synthetic Genomics, Inc. and President of the J. Craig Venter Institute and the J. Craig Venter Science Foundation, taught the Edge Master Class 2009: "A Short Course In Synthetic Genomics" at The Andaz Hotel in West Hollywood, the weekend of July 24th-26th. On Saturday the 25th the class traveled by bus to Space X near LAX, where Sessions 1-4 were taught by George Church. On Sunday, the Class was held at The Andaz in West Hollywood. Craig Venter taught Session 5 and George Church taught Session 6. The topics covered over the course of a rigorous 2-day progam of six lectures included:

What is life, origins of life, in vitro synthetic life, mirror-life, metabolic engineering for hydrocarbons & pharmaceuticals, computational tools, electronic-biological interfaces, nanotech-molecular-manufacturing, biosensors, accelerated lab evolution, engineered personal stem cells, multi-virus-resistant cells, humanized-mice, bringing back extinct species, safety/security policy.

The entire Master Class is available in high quality HD Edge Video (about 6 hours).

The Edge Master Class 2009 advanced the themes and ideas presented in the historic Edge meeting "Life: What A Concept!" in August 2007.


GEORGE M. CHURCH is Professor of Genetics, Harvard Medical School; Director, Center for Computational Genetics; Science Advisor to 23andMe.

With degrees from Duke University in Chemistry and Zoology, he co-authored research on 3D-software & RNA structure with Sung-Hou Kim. His PhD from Harvard in Biochemistry & Molecular Biology with Wally Gilbert included the first direct genomic sequencing method in 1984; initiating the Human Genome Project then as a Research Scientist at newly-formed Biogen Inc. and a Monsanto Life Sciences Research Fellow at UCSF with Gail Martin.

He invented the broadly-applied concepts of molecular multiplexing and tags, homologous recombination methods, and array DNA synthesizers. Technology transfer of automated sequencing & software to Genome Therapeutics Corp. resulted in the first commercial genome sequence (the human pathogen, H. pylori, 1994). He has served in advisory roles for 12 journals (including Nature Molecular Systems Biology), 5 granting agencies and 24 biotech companies (e.g. recently founding Codon Devices and LS9). Current research focuses on integrating biosystems-modeling with the Personal Genome Project & synthetic biology.

J. CRAIG VENTER is regarded as one of the leading scientists of the 21st century for his invaluable contributions in genomic research, most notably for the first sequencing and analysis of the human genome published in 2001 and the most recent and most complete sequencing of his diploid human in genome in 2007. In addition to his role at SGI, he is founder and chairman of the J. Craig Venter Institute. He was in the news last week with the announcement that SGI had received a $600 million investment from ExxonMobil to develop biofuels from algea.

Venter was the founder of Human Genome Sciences, Diversa Corporation and Celera Genomics. He and his teams have sequenced more than 300 organisms including human, fruit fly, mouse, rat, and dog as well as numerous microorganisms and plants. He is the author of A Life Decoded, as well as more than 200 research articles and is among the most cited scientists in the world. He is the recipient of numerous honorary degrees, scientific awards and a member of many prestigious scientific organizations including the National Academy of Sciences.


INTRODUCTION: APE AND ESSENCE
By George Dyson

Sixty-one years ago Aldous Huxley published his lesser-known masterpiece, Ape and Essence, set in the Los Angeles of 2108. After a nuclear war (in the year 2008) devastates humanity's ability to reproduce high-fidelity copies of itself, a reversion to sub-human existence had been the result. A small group of scientists from New Zealand, spared from the catastrophe, arrives, a century later, to take notes. The story is presented, in keeping with the Hollywood location, in the form of a film script.

On July 24, 2009, a small group of scientists, entrepreneurs, cultural impresarios and journalists that included architects of the some of the leading transformative companies of our time (Microsoft, Google, Facebook, PayPal), arrived at the Andaz Hotel on Sunset Boulevard in West Hollywood, to be offered a glimpse, guided by George Church and Craig Venter, of a future far stranger than Mr. Huxley had been able to imagine in 1948.

In this future — whose underpinnings, as Drs. Church and Venter demonstrated, are here already— life as we know it is transformed not by the error catastrophe of radiation damage to our genetic processes, but by the far greater upheaval caused by discovering how to read genetic sequences directly into computers, where the code can be replicated exactly, manipulated freely, and translated back into living organisms by writing the other way. "We can program these cells as if they were an extension of the computer," George Church announced, and proceeded to explain just how much progress has already been made.

The first day's lectures took place at Elon Musk's SpaceX rocket laboratories — where the latest Merlin and Kestrel engines (built with the loving care devoted to finely-tuned musical instruments) are unchanged, in principle, from those that Theodore von Karman was building at the Jet Propulsion Laboratory in 1948. The technology of biology, however, has completely changed.

Approaching Beverly Hills along Sunset Boulevard from Santa Monica, the first indications that you are nearing the destination are people encamped at the side of the road announcing "Star Maps" for sale. Beverly Hills is a surprisingly diverse community of interwoven lives, families, and livelihoods, and a Star Map offers only a rough approximation of where a few select people have their homes.

Synthetic Genomics is still at the Star Map stage. But it is becoming Google Earth much faster than most people think.

GEORGE DYSON, a historian among futurists, is the author of Baidarka; Project Orion; and Darwin Among the Machines.


"For those seeking substance over sheen, the occasional videos released at Edge.orghit the mark. The Edge Foundation community is a circle, mainly scientists but also other academics, entrepreneurs, and cultural figures. ... Edge's long-form interview videos are a deep-dive into the daily lives and passions of its subjects, and their passions are presented without primers or apologies. The decidedly noncommercial nature of Edge's offerings, and the egghead imprimatur of the Edge community, lend its videos a refreshing air, making one wonder if broadcast television will ever offer half the off-kilter sparkle of their salon chatter. — Boston Globe


THE CLASS

Stewart Brand,Biologist, Long Now Foundation; Whole Earth Discipline 
Larry Brilliant, M.D. Epidemiologist, Skoll Urgent Threats Fund?
John Brockman, Publisher & Editor, Edge?
Max Brockman, Literary Agent, Brockman, Inc.; What's Next: Dispatches on the Future of Science
Jason Calacanis, Internet Entrepreneur, Mahalo?
George Dyson, Science Historian; Darwin Among the Machines?
Jesse Dylan, Film-Maker, Form.tv, FreeForm.tv?
Arie Emanuel, William Morris Endeavor Entertainment?
Sam Harris, Neuroscientist, UCLA; The End of Faith?
W. Daniel Hillis, Computer Scientist, Applied Minds; Pattern On The Stone?
Thomas Kalil, Deputy Director for Policy for the White House Office of Science and Technology Policy and Senior Advisor for Science, Technology and Innovation for the National Economic Council?
Salar Kamangar, Vice President, Product Management, Google?
Lawrence Krauss, Physicist, Origins Initiative, ASU; Hiding In The Mirror?
John Markoff, Journalist,The New York Times; What The Dormouse Said?
Katinka Matson, Cofounder, Edge; Artist, katinkamatson.com?
Elon Musk, Physicist, SpaceX, Tesla Motors?
Nathan Myhrvold, Physicist, CEO, Intellectual Ventures, LLC, The Road Ahead
Tim O'Reilly, Founder, O'Reilly Media, O'Reilly Radar
Larry Page, CoFounder, Google?
Lucy Page Southworth,Biomedical Informatics Researcher, Stanford
Sean Parker,The Founders Fund; CoFounder Napster & Facebook ?
Ryan Phelan,Founder, DNA Direct
Nick Pritzker, Hyatt Development Corporation
Ed Regis, Writer; What Is Life?
Terrence Sejnowski, Computational Neurobiologist, Salk; The Computational Brain?
Maria Spiropulu,Physicist, Cern & Caltech?
Victoria Stodden, Computational Legal Scholar, Yale Law School
Richard Thaler, Behavioral Economist, U. Chicago; Nudge?
Craig Venter,Genomics Researcher; CEO, Synthetic Genomics,A Life Decoded?
Nathan Wolfe, Biologist, Global Virus Forecasting Initiative?
Alexandra Zukerman, Assistant Editor, Edge


SESSION 1 @ SPACEX [7.25.09]

Dreams & Nightmares [1:26]


SESSION 2 @ SPACEX [7.25.09]

Constructing Life from Chemicals [1:21]


SESSION 3 @ SPACEX [7.25.09]

Multi-enzyme, multi-drug, and multi-virus resistant life [1:06]


SESSION 4 @SPACEX [7.25.09]

Humans 2.0 [33.15]


SESSION 5 @ ANDAZ [7.26.09]

From Darwin to New Fuels (In A Very Short Time) [34:54]


SESSION 6 @ THE ANDAZ [7.26.09]

Engineering humans, pathogens and extinct species [40:35]


 

Thanks to Alex Miller and Tyler Crowley of Mahalo.com for shooting, editing, and posting the videos of the Edge Master Class 2009.

EDGE MASTER CLASS 2009 — PHOTO ALBUM


David Gross, Frank Schirrmacher, Lawrence Krauss, Denis Dutton, Tim O'Reilly, Ed Regis, Victoria Stodden, Jesse Dylan, George Dyson, Alexandra Zukerman

DAVID GROSS
Physicist, Director, Kavki Institute for Theoretical Physics, UCSB; Recipient 2004 Nobel Prize in Physics

"I should have accepted your invitation. I have been listening to the Master Class on the Web — fascinating. I am learning a lot and I wish I had been there. Thanks for the invite and thanks for putting up the videos. ... Invite me again..."

FRANK SCHIRRMACHER
Co-Publisher & Feuilleton Editor, Frankfurter Allgemeine Zeitung

I watched sessions 1 to 6. This is breathtaking. The Edge Master Class must have been spectacular and frightening. Now DNA and computers are reading each other without human intervention, without a human able to understand it. This is a milestone, and adds to the whole picture: we don't read, we will be read. What Edge has achieved collecting these great thinkers around is absolutley spectacular. Whenever I find an allusion to great writers or thinkers, I find out that they all are at Edge.

LAWRENCE KRAUSS
Physicist, Director, Origins Initiative, ASU; Author, Hiding In The Mirror

What struck me was the incredible power that is developing in bioinformatics and genomics, which so resembles the evolution in computer software and hardware over the past 30 years.

George Church's discussion of the acceleration of the Moore's law doubling time for genetic sequencing rates,, for example, was extraordinary, from 1.5 efoldings to close to 10 efoldings per year. When both George and Craig independently described their versions of the structure of the minimal genome appropriate for biological functioning and reproduction, I came away with the certainty that artificial lifeforms will be created within the next few years, and that they offered great hope for biologically induced solutions to physical problems, like potentially buildup of greenhouse gases.

At the same time, I came away feeling that the biological threats that come with this emerging knowledge and power are far greater than I had previously imagined, and this issue should be seriously addressed, to the extent it is possible. But ultimately I also came away with a more sober realization of the incredible complexity of the systems being manipulated, and how far we are from actually developing any sort of comprehensive understanding of the fundamental molecular basis of complex life. The simple animation demonstrated at the molecular level for Gene expression and replication demonstrated that the knowledge necessary to fully understand and reproduce biochemical activity in cells is daunting.

Two other comments: (1) was intrigued by the fact that the human genome has not been fully sequenced, in spite of the hype, and (2) was amazed at the available phase space for new discovery, especially in forms of microbial life on this planet, as demonstrated by Craig in his voyage around the world, skimming the surface, literally, of the ocean, and of course elsewhere in the universe, as alluded to by George.

Finally, I also began to think that structures on larger than molecular levels may be the key ones to understand for such things as memory, which make the possibilities for copying biological systems seem less like science fiction to me. George Church and I had an interesting discussion about this which piqued my interest, and I intend to follow this up.

DENIS DUTTON
Philosopher; Founder & Editor, Arts & Letters Daily;Author, The Art Instinct

Astonishing.

TIM O'REILLY
Founder, O'Reilly Media, O'Reilly Radar

George Church asked "Is life a qualitative or quantitative question?" Every revolution in science has come when we learn to measure and count rather than asking binary qualitative questions. Church didn't mention phlogiston, but it's what came to mind as a good analogy. Heat is not the presence or absence of some substance or quality, but rather a measurable characteristic of a complex thermodynamic system. Might not the same be true of life? 

The measurement of self-replication as a continuum opens quantitative vistas. Here are a few tidbits from George Church and Craig Venter:

• The most minimal self-replicating system measured so far has 151 genes; bacteria and yeast about 4000; humans about 20,000.

• There are 12 possible amino acid bases (6 pairs); we ended up using 4 bases (2 pairs); other biological systems are possible.

• Humans are actually an ecology, not just an organism. The human microbiome: 23K human genes, 10K bacterial genes.

• Early estimates of the number of living organisms were limited to those that could be cultured in the laboratory; by sampling the DNA in water and soil, we have discovered that we undercounted by many orders of magnitude

• The biomass of bacteria deep in the earth is greater than the biomass of all visible plants and animals; ditto the biomass of ocean bacteria.

• The declining cost of gene sequencing is outpacing Moore's Law (1.5x/year): the number of base pairs sequenced per dollar is increasing at 10x per year.

Net: The current revolution in genomics and synthetic biology will be as profound as the emergence of modern chemistry and physics from medieval alchemy.

ED REGIS 
Writer; What Is Life?

Almost fifteen years ago, in a profile of Leroy Hood, I quoted Bill Gates, who said: "The gene is by far the most sophisticated program around."

At the Edge Master Class last weekend I learned the extent to which we are now able to reprogram, rework, and essentially reinvent the gene. This gives us a degree of control over biological organisms — as well as synthetic ones — that was considered semi-science fictional in 1995. Back then scientists had genetically engineered E. coli bacteria to produce insulin. At the Edge event, by contrast, Craig Venter was talking about bacteria that could convert coal into methane gas and others that could produce jet fuel. It was merely a matter of doing the appropriate genomic engineering: by replacing the genome of one organism with that of another you could transform the old organism into something new and better.

George Church, for his part, described the prospect of synthetic organisms grown from mirror-image DNA; humanized mice, injected with human genes so that they would produce antibodies that the human body would not reject; and the possibility of resurrecting extinct species including the woolly mammoth and Neanderthal man.

But as far-out as these developments were, none of them was really surprising. After all, science and technology operate by systematically gaining knowledge of the world and then applying it intelligently. Thus we skip from miracle to miracle.

More extraordinary to me personally was the fact that the first day of the EDGE event was being held on the premises of a private rocket manufacturing facility in Los Angeles, SpaceX, which also builds Tesla electric vehicles, all under the leadership of Internet entrepreneur Elon Musk. The place was mildly unbelievable, even after having seen it with my own eyes. In the age of Big Science, where it is not uncommon for scientific papers to be written by forty or more coauthors, the reign of the individual is not yet dead.

VICTORIA STODDEN
Computational Legal Scholar, Yale Law School

Craig Venter posed the question whether it is possible to reconstruct life from its constituent parts. Although he's come close, he hasn't done it (yet?) and neither has anyone else. Aside from the intrinsic interest of the question, its pursuit seems to be changing biological research in two fundamental ways encapsulated Venter's own words:

We have these 20 millions genes. I view these as design components. We actually have software now for designing species, where we can try and put these components together. The biggest problem with engineering biology on first principles is that we don't know too many first principles. It's a minor problem! In fact, from doing this, if we build this robot that can make a million chromosomes a day, and a million transformations, and a million new species versions, it'll be the fastest way to establish what the first principles are, if we can track all that information and all the changes.           

Unlike physics or more mathematical fields, research in biology traditionally hasn't been a search for underlying principles, or had the explicit goal of developing grand unifying theories. A cynic could even argue funding incentives in biology encourage complexity: big labs are funded if they address very complicated, and thus more expensive to research, phenomena. Whether or not that's true, chemical reconstruction of the genome is a process from first principles, marking a change in approach that brings biological research closer in spirit to more technical fields. Venter seems to believe that answering questions such as, "Can we reconstruct life from its components?" "What genes are necessary for life?" "What do you really need to run cellular machinery?" and "What is a minimal organism that could survive?" will uncover first principles in biology, potentially structuring understanding deductively.            

Venter's use of combinatorial biological research is another potential sea-change in the way understanding is developed. This use of massive computing is analogous to that occurring in many other areas of scientific research, and the key is that discovery becomes less constrained by a priori assumptions or models (or understanding?).

Moore's Law and ever cheaper digital storage is giving scientists the luxury of solution search within increasingly large problem spaces. With complete search over the space of all possible solutions, in principle it is no longer necessary to reason one's way to the (an?) answer. This approach favors empirical evaluation over deductive reasoning. In Venter's biological context, presumably if automated search can find viable new species it will then be possible to investigate their unique life enabling characteristics. Perhaps through automated search?

JESSE DYLAN
Film-Maker, Form.tv, FreeForm.tv

What a revelation the The Master Class in Synthetic Genomics was. In addition to being informative on so many literal levels it reinforced the mystery and wonder of the world. George Church and Craig Venter were generous to give us a glimpse of where we are today and fire the imagination of where we are going. It's all science but seems beyond science fiction — living forever, reprogramming genes, resurrecting extinct species. All told at SpaceX — a place where people are reaching for the stars, not just thinking about it but building rockets to take us there. Where Elon Musk contemplates the vastness of space and our tiny place in it, where we gained a perspective on the things that are very small and beyond the vision of our eyes. So small it's a wonder we even know they are there. Thanks for giving us a profound glimpse into the future.

We are in such an early formative stage it makes one wonder where we will be in a hundred or even a thousand years. It's nice to be up against mysteries.

GEORGE DYSON
Science Historian; Darwin Among the Machines

End Of Species

We speak of reading and writing genomes — but no human mind can comprehend these lengthy texts. We are limited to snippet view in the library of life.

As Edge's own John Markoff reported from the recent Asilomar conference on artificial intelligence, the experts "generally discounted the possibility of highly centralized superintelligences and the idea that intelligence might spring spontaneously from the Internet."

Who will ever write the code that ignites the spark? Craig Venter might be hinting at the answer when he tells us that "DNA... is absolutely the software of life." The language used by DNA is much closer to machine language than any language used by human brains. It should be no surprise that the recent explosion of coded communication between our genomes and our computers largely leaves us out.

"The notion that no intelligence is involved in biological evolution may prove to be one of the most spectacular examples of the kind of misunderstandings which may arise before two alien forms of intelligence become aware of one another," wrote viral geneticist (and synthetic biologist) Nils Barricelli in 1963. The entire evolutionary process "is a powerful intelligence mechanism (or genetic brain) that, in many ways, can be comparable or superior to the human brain as far as the ability of solving problems is concerned," he added in 1987, in the final paper he published before he died. "Whether there are ways to communicate with genetic brains of different symbioorganisms, for example by using their own genetic language, is a question only the future can answer."

We are getting close.

ALEXANDRA ZUKERMAN
Assistant Editor, Edge

As the meaning of George Church and Craig Venter's words permeated my ever-forming pre-frontal cortex at The Master Class, I cannot deny that I felt similarly to the way George Eliot described her own emotions in 1879. Eliot, speaking as Theophrastus in a little-known collection of essays published that year, predicts that evermore perfecting machines will imminently supercede the human race in "Shadows of the Coming Race:"

When, in the Bank of England, I see a wondrously delicate machine for testing sovereigns, a shrewd implacable little steel Rhadamanthus that, once the coins are delivered up to it, lifts and balances each in turn for the fraction of an instant, finds it wanting or sufficient, and dismisses it to right or left with rigorous justice; when I am told of micrometers and thermopiles and tasimeters which deal physically with the invisible, the impalpable, and the unimaginable; of cunning wires and wheels and pointing needles which will register your and my quickness so as to exclude flattering opinion; of a machine for drawing the right conclusion, which will doubtless by-and-by be improved into an automaton for finding true premises — my mind seeming too small for these things, I get a little out of it, like an unfortunate savage too suddenly brought face to face with civilisation, and I exclaim —

'Am I already in the shadow of the Coming Race? and will the creatures who are to transcend and finally supersede us be steely organisms, giving out the effluvia of the laboratory, and performing with infallible exactness more than everything that we have performed with a slovenly approximativeness and self-defeating inaccuracy?'1

Whereas Theophrastus' friend, Trost (a play on Trust) is confident that the human being is and will remain the "nervous center to the utmost development of mechanical processes" and that "the subtly refined powers of machines will react in producing more subtly refined thinking processes which will occupy the minds set free from grosser labour," Theophrastus feels "average" and less energetic, readily imagining his subjugation by these steely organisms giving out the "effluvia of the laboratory." He imagines instead that machines operate upon him, measuring his thoughts and quickness of mind. Micrometers, thermopiles and tasimeters were invading the sanctity of his consciousness with their "unconscious perfection."??As George Church told us that "We're getting to a point where we can really program these cells as if they were an extension of a computer" and "This software builds its own hardware — it turns out biology does this really well," my sensibilities felt slightly jarred. Indeed, I felt as though I might be from an uncivilized time and place, suddenly finding myself on the platform as a flying train whizzed past (in fact, our tour of SpaceX and Tesla by Elon Musk was not far off!).

I asked myself the same question as George Eliot posed to herself over one hundred years ago: If computing and genetics are converging, such that computers will be reading our genomes and perfecting them, has not Eliot's prediction come true? I wondered, as a historian of science, not as much about the implications of such a development, but more about why computers have become so powerful. Why do we trust, as Trost does, artificial intelligence so much? Will scientists ultimately give their agency over to computers as we get closer to mediating our genomes and that of other forms of life? Will computers and artificial intelligence become a new "invisible hand" such as that which guides the free market without human intervention? I am curious about the role computers will be playing, as humans grant them more and more hegemony.

___1George Eliot, Impressions of Theophrastus Such

LAWRENCE KRAUSS
Physicist, Director, Origins Initiative, ASU; Author, Hiding In The Mirror

What struck me was the incredible power that is developing in bioinformatics and genomics, which so resembles the evolution in computer software and hardware over the past 30 years.

George Church's discussion of the acceleration of the Moore's law doubling time for genetic sequencing rates,, for example, was extraordinary, from 1.5 efoldings to close to 10 efoldings per year. When both George and Craig independently described their versions of the structure of the minimal genome appropriate for biological functioning and reproduction, I came away with the certainty that artificial lifeforms will be created within the next few years, and that they offered great hope for biologically induced solutions to physical problems, like potentially buildup of greenhouse gases.

At the same time, I came away feeling that the biological threats that come with this emerging knowledge and power are far greater than I had previously imagined, and this issue should be seriously addressed, to the extent it is possible. But ultimately I also came away with a more sober realization of the incredible complexity of the systems being manipulated, and how far we are from actually developing any sort of comprehensive understanding of the fundamental molecular basis of complex life. The simple animation demonstrated at the molecular level for Gene expression and replication demonstrated that the knowledge necessary to fully understand and reproduce biochemical activity in cells is daunting.

Two other comments: (1) was intrigued by the fact that the human genome has not been fully sequenced, in spite of the hype, and (2) was amazed at the available phase space for new discovery, especially in forms of microbial life on this planet, as demonstrated by Craig in his voyage around the world, skimming the surface, literally, of the ocean, and of course elsewhere in the universe, as alluded to by George.

Finally, I also began to think that structures on larger than molecular levels may be the key ones to understand for such things as memory, which make the possibilities for copying biological systems seem less like science fiction to me. George Church and I had an interesting discussion about this which piqued my interest, and I intend to follow this up.


FRANKFURTER ALLGEMEINE ZEITUNG

15. August 2009?FEUILLETON

GENETIC ENGINEERING

THE CURRENT CATALOG OF LIFE [Der Aktuelle Katalog Der Schöpfung Ist Da] By Ed Regis

[ED. NOTE: Among the attendees of the recent Edge Master Class 2009 — A Short Course on Synthetic Genomics, was science writer Ed Regis (What Is Life?) who was commissioned by Frank Schirrmacher, Co-Publisher and Feuilleton Editor of Frankfurter Allgemeine Zeitung to write a report covering the event. A German translation of Regis's article was published on August 15th by FAZ along with an accompanying article. The original English language version is published below with permission.]

In their futuristic workshops, the masters of the Synthetic Genomics, Craig Venter and George Church, play out their visions of bacteria reprogrammed to turn coal into methane gas and other microbes programmed to create jet fuel

14. August 2009 — John Brockman is a New York City literary agent with a twist: not only does he represent many of the world's top scientists and science writers, he's also founder and head of the Edge Foundation (www.edge.org), devoted to disseminating news of the latest advances in cutting-edge science and technology. Over the weekend of 24-26 July, in Los Angeles, Brockman's foundation sponsored a "master class" in which two of these same scientists — George Church, a molecular geneticist at Harvard Medical School, and Craig Venter, who helped sequence the human genome — gave a set of lectures on the subject of synthetic genomics. The event, which was by invitation only, was attended by about twenty members of America's technological elite, including Larry Page, co-founder of Google; Nathan Myhrvold, formerly chief technology officer at Microsoft; and Elon Musk, founder of PayPal and head of SpaceX, a private rocket manufacturing and space exploration firm which is housed in a massive hangar-like structure near Los Angeles International Airport. The first day's session, in fact, was held on the premises of SpaceX, where the Tesla electric car is also built.

Synthetic genomics, the subject of the conference, is the process of replacing all or part of an organism's natural DNA with synthetic DNA designed by humans. It is essentially genetic engineering on a mass scale. As the participants were to learn over the next two days, synthetic genomics will make possible a variety of miracles, such as bacteria reprogrammed to turn coal into methane gas and other microbes programmed to churn out jet fuel. Still other genomic engineering techniques will allow scientists to resurrect a range of extinct creatures including the woolly mammoth and, just maybe, even Neanderthal man.

The specter of "biohackers" creating new infectious agents made its obligatory appearance, but synthetic genomic researchers are, almost of necessity, optimists. George Church, one of whose special topics was "Engineering Humans 2.0," told the group that "DNA is excellent programmable matter." Just as automated sequencing machines can read the natural order of a DNA molecule, automated DNA synthesizing machines can create stretches of deliberately engineered DNA that can then be placed inside a cell so as to modify its normal behavior. Many bacterial cells, for example, are naturally attracted to cancerous tumors. And so by means of correctly altering their genomes it is possible to make a species of cancer-killing bacteria, organisms that attack the tumor by invading its cancerous cells, and then, while still inside them, synthesizing and then releasing cancer-killing toxins. ??Church and his Harvard lab team have already programmed bacteria to perform each of these functions separately, but they have not yet connected them all together into a complete and organized system. Still, "we're getting to the point where we can program these cells almost as if they were computers," he said.

But tumor-killing microbes were only a small portion of the myriad wonders described by Church. Another was the prospect of "humanized" or — even "personalized" — mice. These are mammals whose genomes are injected with bits of human DNA for the purpose of getting the animals to produce disease-fighting antibodies that would not be rejected by humans. A personalized mouse, whose genome was modified with some of your very own genetic material, would produce antibodies that would not be rejected by your own body.

Beyond that is the possibility of creating synthetic organisms that would be resistant to a whole class of natural viruses. There are two ways of doing this, one of which involves creating DNA that is a mirror-image of natural DNA. Like many biological and chemical substances, DNA has a chirality or handedness, the property of existing in either left-handed or right-handed structural forms. In their natural state, most biological molecules including DNA and viruses are left-handed. But by artificially constructing right-handed DNA, it would be possible to make synthetic living organisms whose DNA is a mirror-image of the original. They would be resistant to conventional enzymes, parasites, and predators because their DNA would not be recognized by the mirror-image version. Such synthetic organisms would constitute a whole new "mirror-world" of living things.

Church is also founder and head of the Personal Genome Project, or PGP. The project's purpose, he said, is to sequence the genomes of 100,000 volunteers with the goal of opening up a new era of personalized medicine. Instead of today's standardized, one-size-fits-all collection of pills and therapies, the medicine of the future will be genomically tailored to each individual patient, and its treatments will fit him or her as well as a made-to-order suit of clothes. Church also speculated that knowledge of the idiosyncratic features that lurk deep within each of our genomes — genetic differences that give rise to every person's respective set of individuating traits — will bring us an unprecedented level of self-understanding, and, therefore, will allow us to chart a more intelligent and informed course through life.

Toward the end of the first day Elon Musk, for whom the word charismatic could have well been coined, described a genomic transformation of another type. While a video of his Falcon 1 rocket being launched from the Kwajalein Atoll in the South Pacific played in the background, Musk spoke about sending the human species to the planets. That might have seemed an unrealistic goal were it not for the fact that on 13 July, just twelve days prior to the Edge event, SpaceX had successfully launched another Falcon 1 rocket that had placed Malaysia's RazakSAT into Earth orbit. Earlier, competing against both Boeing and Lockheed, SpaceX had won NASA's Commercial Orbital Transportation Services competition to resupply cargo to the International Space Station.

Then, like an emperor leading his subjects, Musk gave the conference attendees a tour of his spacecraft manufacturing facility. We saw the rocket engine assembly area, several launch vehicle components under construction, the mission operations area, and an example of the company's Dragon spacecraft, a pressurized capsule for the transport of cargo or passengers to the ISS.

"This is all geared to extending life beyond earth to a multiplanet civilization," Musk said of the spacecraft. Suddenly, his particular version of the future was no longer so unbelievable.

The leadoff speaker on the second and last day of the conference was J. Craig Venter, the human genome pioneer who more recently cofounded Synthetic Genomics Inc., an organization devoted to commercializing genomic engineering technologies. One of the challenges of synthetic genomics was to pare down organisms to the minimal set of genes needed to support life. Venter called this "reductionist biology," and said that a fundamental question was whether it would be possible to reconstruct life by putting together a collection of its smallest components.

Brewer's yeast, Venter discovered, could assemble fragments of DNA into functional chromosomes. He described a set of experiments in which he and colleagues created 25 small synthetic pieces of DNA, injected them into a yeast cell, which then proceeded to assemble the pieces into a chromosome. The trick was to design the DNA segments in such a way that the organism puts them together in the correct order. It was easy to manipulate genes in yeast, Venter found. He could insert genes, remove genes, and create a new species with new characteristics. In August 2007, he actually changed one species into another. He took a chromosome from one cell and put it into different one. "Changing the software [the DNA] completely eliminated the old organism and created a new one," Venter said.

Separately, Venter and his group had also created a synthetic DNA copy of the phiX virus, a small microbe that was not infectious to humans. When they put the synthetic DNA into an E. coli bacterium, the cell made the necessary proteins and assembled them into the actual virus, which in turn killed the cell that made it. All of this happened automatically in the cell, Venter said: "The software builds its own hardware."

These and other genomic creations, transformations, and destructions gave rise to questions about safety, the canonical nightmare being genomically engineered bacteria escaping from the lab and wreaking havoc upon human, animal, and plant. But a possible defense against this, Venter said, was to provide the organism with "suicide genes," meaning that you create within them a chemical dependency so that they cannot survive outside the lab. Equipped with such a dependency, synthetic organisms would pose no threat to natural organisms or to the biosphere. Outside the lab they would simply die.

That would be good news if it were true, because with funding provided by ExxonMobil, Venter and his team are now building a three to five square-mile algae farm in which reprogrammed algae will produce biofuels.

"Making algae make oil is not hard," Venter said. "It's the scalability that's the problem." Algae farms of the size required for organisms to become efficient and realistic sources of energy are expensive. Still, algae has the advantage that it uses CO2 as a carbon source — it actually consumes and metabolizes a greenhouse gas — and uses sunlight as an energy source. So what we have here, potentially, are living solar cells that eat carbon dioxide as they produce new hydrocarbons for fuel.

George Church had the final say in a lecture entitled "Engineering Humans 2.0." Human beings, he noted, are limited by a variety of things: by their ability to concentrate and remember, by the shortness of their lifespans, and so on. Genomic engineering could be used to correct all these deficiencies and more. The common laboratory mouse, he noted, had an average lifespan of 2.5 years. The naked mole rate, by contrast, lives ten times longer, to the ripe old age of 25. It would be possible to find the genes that contributed to the longevity of the naked mole rat, and by importing those genes into the lab mouse, you could slowly increase its longevity.

An analogous process could also be tried on human beings, increasing their lifespans and adding to their memory capacity, but the question was whether it was wise to do this. There were always trade-offs, Church said. You may engineer humans to have bigger and stronger bones, but only at the price if making them heavier and more ungainly. Malaria resistance is coupled with increased susceptibility to sickle cell anemia. And so on down the list. In a conference characterized by an excess of excess, Church provided a welcome cautionary note.

But then he proceeded to pull out all the stops an argued that by targeted genetic manipulation of the elephant genome it might be possible to resurrect the woolly mammoth. And by doing the same to the chimpanzee genome, scientists could possibly resurrect Neanderthal man.

"Why would anyone want to resurrect Neanderthal man?" a conference participant asked.

"To create a sibling species that would give us a fresh outlook on ourselves," Church answered. Humans were a monoculture, he said, and monocultures were biologically at risk.

His answer did not satisfy all of those present. "We already have enough Neanderthals in Washington," Craig Venter quipped, thereby effectively bringing the Edge Master Class 2009 to a close. ?

Ed Regisis the author of several science books, most recently, What Is Life? Investigating the Nature of Life in the Age of Synthetic Biology


SUEDDEUTSCHE ZEITUNG

August 13 , 2009

FEUILLETON

THE WALKMAN OF GENETIC ENGINEERING: THE MOVE FROM SCIENCE TO A NEW WORLD OF PRODUCTS

[Walkman der Gentechnik; Der Schritt von der Wissenschaft zu einer neuen Warenwelt]  By Andrian Kreye, Editor, The Feuilleton, Sueddeutsche Zeitung

...Genetic engineering is now at a point where computer science was around the mid-eighties. The early PCs were limited as to purpose and network. In two and a half decades, the computer has led us into a digial world in which every aspect of lives has been affected. According to Moore's Law, the performance of computers doubles every 18 months. Genetic engineering is following a similar growth. On the last weekend in July, Craig Venter and George Church met in Los Angeles to lead a seminar on synthetic genetic engineering for John Brockman's science forum Edge.org.

Genetic engineering under Church has been following the grwoth of computer science growing by a factor of tenfold per year. After all, the cost of sequencing a genome dropped from three billion dollars in 2000 to around $50 000 dollars as Stanford University's Dr. Steven Quake genomics engineer announced this week. 17 commercial companies already offer similar services. In June, a "Consumer Genetics" exhibition was held in Boston for the first time. The Vice President of Knome, Ari Kiirikki, assumes that the cost of sequencing a genome in the next ten years will fall to less than $1,000. In support for this development, the X-Prize Foundation has put up a prize of ten million dollars for the sequencing of 100 full genomes within ten days for the cost of less than $10,000 dollars per genome sequenced. ??It is now up to the companies themselves to provide an ethical and legal standing to commercial genetic engineering. The States of New York and California have already made the sale of genetic tests subject to a prescription. This is however only a first step is to adjust a new a new commercialized science which is about to cause enormous changes similar to those brought about be computer science. Medical benefits are likely to be enormous. Who knows about dangers in its genetic make-up, can preventive measures meet. The potential for abuse is however likewise given. Health insurances and employers could discriminate against with the DNS information humans. Above all however our self-understanding will change. Which could change, if synthetic genetic engineering becomes a mass market, is not yet foreseeable. For example, Craig Venter is working on synthetic biofuels. If successful, such a development would re-align technology, economics and politics in a fundamental way. Of one thing we can already be certain. The question of whether genetic engineering will becomes available for all is no longer on the table. It has already happened.


SPIEGEL ONLINE

13.08. 2009
FEUILLETON-PRESSESCHAU

Süddeutsche Zeitung, 13.08.2009

HEUTE IN DEN FEUILLETONS

Von aktuellen Entwicklungen aus der schönen neuen Welt der Genom-Sequenzierung berichtet Andrian Kreye: "Am letzten Juliwochenende trafen sich Craig Venter und George Church in Los Angeles, um für John Brockmans Wissenschaftsforum Edge.org ein Seminar über synthetische Gentechnik zu leiten. Die Gentechnik, so Church, habe die Informatik dabei längst hinter sich gelassen und entwickle sich mit einem Faktor von zehn pro Jahr. Immerhin - der Preis für die Sequenzierung eines Genoms ist von drei Milliarden Dollar im Jahr 2000 auf rund 50.000 Dollar gefallen, wie der Ingenieur der Stanford University Dr. Steven Quake diese Woche bekanntgab. 17 kommerzielle Firmen bieten ihre Dienste schon an."


Edge Dinners
Event Date: [ 4.20.09 11:15 AM ]
Location:
United States

April 20, 2009 — Zilly Fish, London

Special Events
Event Date: [ 4.3.09 ]
Location:
AZ
United States

The Origins Initiative at ASU, under the leadership of its Director, physicist and Edge contributor Lawrence Krauss, is a University-wide initiative to focus on deep and foundational questions ranging across the entire spectrum of scholarship at ASU. The three-day Origins Symposium explored forefront questions at the edge of knowledge: from the origin of the universe and the laws of nature to the evolution of life, humans, consciousness, and culture. The symposium, which took place April 3-6 and consisted of private scientific seminars and large public lectures, was an intellectual extravaganza, a "Kraussfest", which assembled in one place a group containing the most well known scientific public intellectuals in the world, many of whom are well-known to readers of these pages.  

On the bus with Nobel Laureates David Gross, Wally Gilbert, Frank Wilczek

Among the Edgies at "Kraussfest 2009" were Roger Bingham, Patricia Churchland, Paul Davies, Richard Dawkins, Rebecca Goldstein, A. C. Grayling, Brian Greene, David Gross, Alan Guth, Jonathan Haidt, Lawrence Krauss, John Mather, Randolph Nesse, Steven Pinker, Terrence Senjnowski, Maria Spiropulu, Craig Venter, Alex Vilenkin, Frank Wilczek.

Edge Dinners
Event Date: [ 2.5.09 ]
Location:
CA
United States

"The crowd was sprinkled generously with those who had amassed wealth beyond imagining in a historical eye blink."
— Kara Swisher, Wall Street Journal 


The "Billionaires' Dinner" at TED: Readjusted for the 2009 Econalyspe
February 9, 2009
By Kara Swisher

Many years ago in the midst of the Web 1.0 boom, when working as a reporter for The Wall Street Journal,BoomTown redubbed an annual dinner that book agent John Brockman threw ... called the "Millionaires' Dinner," but I renamed it the "Billionaires' Dinner."That was due to the frothy fortunes that had been made at the time by the Internet pioneers, from Amazon to AOL to eBay. Well, despite the economic meltdown, there were still a lot of billionaires in attendance at Brockman's most recent dinner last Thursday in Long Beach.

Indeed, Brockman now calls the event the "Edge Dinner," after his lively Edge Web site, where he presides over a variety of eclectic online debates and discussions (in January, for example, the topic was: "DOES THE EMPIRICAL NATURE OF SCIENCE CONTRADICT THE REVELATORY NATURE OF FAITH?").

Since I managed to miss the fete entirely (embarrassing confession: I fell dead asleep at 7 p.m. and did not wake until the next morning) and could not chronicle it, Brockman allowed me to post some photos from the event taken by him and by former Microsoft research guru and current intellectual property mogul Nathan Myhrvold.
 


 

 

On the Road
Event Date: [ 1.27.09 ]
Location:
Germany

REFLECTIONS ON A CRISIS

Daniel Kahneman & Nassim Nicholas Taleb: A Conversation in Munich?
(Moderator: John Brockman)

Nassim Taleb and Daniel Kahneman: Reflection on a Crisis from DLD on FORA.tv

View the complete 1-hour HD streaming video of the Edge event that took place at Hubert Burda Media's Digital Life Design Conference (DLD) in Munich on January 27th as the greatest living psychologist and the foremost scholar of extreme events discuss hindsight biases, the illusion of patterns, perception of risk, and denial.

DANIEL KAHNEMAN is Eugene Higgins Professor of Psychology, Princeton University, and Professor of Public Affairs, Woodrow Wilson School of Public and International Affairs. He is winner of the 2002 Nobel Prize in Economic Sciences for his pioneering work integrating insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty.

NASSIM NICHOLAS TALEB, essayist and former mathematical trader, is Distinguished Professor of Risk Engineering at New York University’s Polytechnic Institute. He is the author of Fooled by Randomness and the international bestseller The Black Swan.

Daniel Kahneman's Edge Bio Page
Nassim Taleb's Edge Bio Page



FOCUS ONLINE
January 28, 2009

ARE BANKERS CHARLATANS

Sind Banker Scharlatane?

At blame for the financial crisis is the nature of man, say two renowned scientists: Nobel Prize winner Daniel Kahneman and bestselling author Nassim Taleb ( "The Black Swan").

By Ansgar Siemens, FOCUS online editor

Two men sitting on the stage. Left. Daniel Kahneman, 74, bright-eyed, Nobel Prize winner. Right Nassim Taleb, 49, former Wall Street banker, best-selling author. Both speak on the future of Digital Life Design Conference (DLD) in Munich on the financial crisis, about the beginning--mainly they talk about people. They say it is due to human nature, that the crisis has broken out. And they choose harsh words in discussing the scale of the disaster.

Kahneman explains why there are bubbles in the financial markets, even though everyone knows that they eventually burst. The researchers used the comparison with the weather: If there is little rain for three years, people begin to believe that this is the normal situation. If over the years stocks only increase, people can't imagine a break in this trend.

"Those responsible must go--today and not tomorrow"

Taleb speaks out sharply against the bankers. The people in control of taxpayer's money are spending billions of dollars. "I want those responsible for the crisis gone today, today and not tomorrow," he says, leaning forward vigorously. The risk models of banks are a plague, he says, the bankers are charlatans.

It is nonsense to think that we can assess risks and thus protect against a crash. Taleb has become famous with his theory of the black swan described in his eponymous bestsellers described. Black swans, which are events that are not previously seen--not even with the best model. "People will never be able to control a coincidence," he says.

The early warning

"Taleb had an early warning before the crisis. In 2003 he took note of the balance sheet of the U.S. mortgage finance giant Fannie Mae, and he saw "dynamite".

In autumn last year, the U.S. government instituted A dramatic bailout. Taleb said in the "Sunday Times" in 2008: "Bankers are very dangerous." And even now, he sees a scandal: He provocatively asks what have the banks done with the government bailout money. "They have paid out more bonuses, and they have increased their risks." And it was not their own money.

Taleb calls for rigorous changes: nationalize banks--and abolish financial models. Kahneman does not quite agree with him. Certainly, the models are not capable of predicting a collapse. But one should not ignore our human nature. People will always require and use models and get benefit from them--even if they are wrong.

Edge Dinners
Event Date: [ 7.28.08 ]
Location:
United States

Master Classes
Event Date: [ 7.25.08 ]
Location:
United States

What we're saying is that there is a technology emerging from behavioral economics. It's not only an abstract thing. You can do things with it. We are just at the beginning. I thought that the input of psychology into behavioral economics was done. But hearing Sendhil was very encouraging because there was a lot of new psychology there. That conversation is continuing and it looks to me as if that conversation is going to go forward. It's pretty intuitive, based on research, good theory, and important. — Daniel Kahneman

Richard Thaler Sendhil Mullanthan Daniel Kahneman

Edge Master Class 2008 
Richard ThalerSendhil Mullainathan, Daniel Kahneman

Sonoma, CA, July 25-27, 2008


A year ago, Edge convened its first "Master Class" in Napa, California, in which psychologist and Nobel Laureate Daniel Kahneman taught a 9-hour course: "A Short Course On Thinking About Thinking". The attendees were a "who's who" of the new global business culture. 

This year, to continue the conversation, we invited Richard Thaler, the father of behavioral economics, to organize and lead the class: "A Short Course On Behavioral Economics". Thaler asked Harvard economist and former student Sendhil Mullainathan, as well as Daniel Kahneman, to teach the class with him.

Thaler arrived arrived at Stanford in the 1970s to work with Kahneman and his late partner, Amos Tversky. Thaler, in turn, asked Harvard economist and former student Sendhil Mullainathan, as well as Kahneman, to teach the class with him.

The entire text is available online along with video highlights of the talks and a photo gallery. The text is also appears in a book privately published by Edge Foundation, Inc.

Nathan Myhrvold Jeff Bezos Elon Musk

Whereas last year, the focus was on psychology, this year the emphasis shifted to behavioral economics. As Kahneman noted:

...There's new technology emerging from behavioral economics and we are just starting to make use of that. I thought the input of psychology into economics was finished but clearly it's not!

The Master Class is the most recent iteration of Edge's development, which began its activities under than name "The Reality Club" in 1981. Edge's is different from The Algonquin, The Apostles, The Bloomsbury Group, or The Club, but it offers the same quality of intellectual adventure. The closest resemblances are to The Invisible College and the Lunar Society of Birmingham.

The early seventeenth-century Invisible College was a precursor to the Royal Society. Its members consisted of scientists such as Robert Boyle, John Wallis, and Robert Hooke. The Society's common theme was to acquire knowledge through experimental investigation. Another example is the nineteenth-century Lunar Society of Birmingham, an informal club of the leading cultural figures of the new industrial age—James Watt, Erasmus Darwin, Josiah Wedgewood, Joseph Priestly, and Benjamin Franklin.

In a similar fashion, Edge's, through its Master Classes, gathers together intellectuals and technology pioneers. In this regard, George Dyson, in his summary (below) of the second day of the proceedings, writes:

Retreating to the luxury of Sonoma to discuss economic theory in mid-2008 conveys images of Fiddling while Rome Burns. Do the architects of Microsoft, Amazon, Google, PayPal, and Facebook have anything to teach the behavioral economists—and anything to learn? So what? What's new?? As it turns out, all kinds of things are new. Entirely new economic structures and pathways have come into existence in the past few years.

Sean Parker, CoFounder, Facebook Salar Kamangar, Google Evan Williams, CoFounder, Twitter

Indeed, as one distinguished European visitor noted, the weekend, which involved the 2-day Master Class in Sonoma followed by a San Francisco dinner, involved "a remarkable gathering of outstanding minds. These are the people that are rewriting our global culture".

John Brockman, Editor

 

RICHARD H. THALER is the father of behavioral economics—the study of how thinking and emotions affect individual economic decisions and the behavior of markets. He investigates the implications of relaxing the standard economic assumption that everyone in the economy is rational and selfish, instead entertaining the possibility that some of the agents in the economy are sometimes human. Thaler is Director of the Center for Decision Research at the University of Chicago Graduate School of Business. He is coauthor (with Cass Sunstein) of Nudge: Improving Decisions About Health, Wealth, and Happiness. 

Richard Thaler's Edge Bio Page

SENDHIL MULLAINATHAN, a Professor of Economics at Harvard, a recipient of a MacArthur Foundation "genius grant", conducts research on development economics, behavioral economics, and corporate finance. His work concerns creating a psychology of people to improve poverty alleviation programs in developing countries. He is Executive Director of Ideas 42, Institute of Quantitative Social Science, Harvard University.

Sendhil Mullainathan's Edge Bio Page

DANIEL KAHNEMAN, a psychologist at Princeton University, is the recipient of the 2002 Nobel Prize in Economics for his pioneering work integrating insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty. 

Daniel Kahneman's Edge Bio page.


PARTICIPANTS: Jeff Bezos, Founder, Amazon.com; John Brockman, Edge Foundation, Inc.; Max Brockman, Brockman, Inc.; George Dyson, Science Historian; Author, Darwin Among the Machines; W. Daniel Hillis, Computer Scientist; Cofounder, Applied Minds; Author, The Pattern on the Stone; Daniel Kahneman, Psychologist; Nobel Laureate, Princeton University; Salar Kamangar, Google; France LeClerc, Marketing Professor; Katinka Matson, Edge Foundation, Inc.; Sendhil Mullainathan, Professor of Economics, Harvard University; Executive Director, Ideas 42, Institute of Quantitative Social Science; Elon Musk, Physicist; Founder, Tesla Motors, SpaceX; Nathan Myhrvold, Physicist; Founder, Intellectual Venture, LLC; Event Photographer; Sean Parker, The Founders Fund; Cofounder: Napster, Plaxo, Facebook; Paul Romer, Economist, Stanford; Richard Thaler, Behavioral Economist, Director of the Center for Decision Research, University of Chicago Graduate School of Business; coauthor of Nudge; Anne Treisman, Psychologist, Princeton University; Evan Williams, Founder, Blogger, Twitter.

Further Reading on Edge:
"A Short Course In Thinking About Thinking
Edge Master Class 2007
Daniel Kahneman
Auberge du Soleil, Rutherford, CA, July 20-22, 2007


A SHORT COURSE IN BEHAVIORAL ECONOMICS
CLASS ONE • CLASS TWO • CLASS THREE • CLASS FOUR • CLASS FIVE • CLASS SIX
PHOTO GALLERY
 


LIBERTARIAN PATERNALISM:  WHY IT IS IMPOSSIBLE NOT TO NUDGE 
(Class 1)
A Talk By Richard Thaler

Danny Hillis,Nathan Myhrvold ,Daniel Kahneman, Jeff Bezos, Sendhil Mullainathan

If you remember one thing from this session, let it be this one: There is no way of avoiding meddling. People sometimes have the confused idea that we are pro meddling. That is a ridiculous notion. It's impossible not to meddle. Given that we can't avoid meddling, let's meddle in a good way. —Richard Thaler


IMPROVING CHOICES WITH MACHINE READABLE DISCLOSURE
(Class 2)
A Talk ByRichard Thaler & Sendhil Mullainathan

 

 

Jeff Bezos, Nathan Myhrvold, Salar Kamangar, Daniel Kahneman, Danny Hillis, Paul Romer, Elon Musk, Sean Parker

At a minimum, what we're saying is that in every market where there is now required written disclosure, you have to give the same information electronically and we think intelligently how best to do that. In a sentence that's the nature of the proposal.—Richard Thaler


THE PSYCHOLOGY OF SCARCITY
(Class 3)
A Talk By Sendhil Mullainathan

Nathan Myhrvold, Richard Thaler, Daniel Kahneman, France LeClerc, Danny Hillis, Paul Romer, George Dyson, Elon Musk, Jeff Bezos, Sean Parker

Let's put aside poverty alleviation for a second, and let's ask, "Is there something intrinsic to poverty that has value and that is worth studying in and of itself?" One of the reasons that is the case is that, purely aside from magic bullets, we need to understand are there unifying principles under conditions of scarcity that can help us understand behavior and to craft intervention. If we feel that conditions of scarcity evoke certain psychology, then that, not to mention pure scientific interest, will affect a vast majority of interventions. It's an important and old question.


TWO BIG THINGS HAPPENING IN PSYCHOLOGY TODAY
(Class 4)
A Talk By Daniel Kahneman

Danny Hillis,Richard Thaler,Nathan Myhrvold,Elon Musk, France LeClerc, Salar Kamangar, Anne Treisman, Sendhil Mullainathan, Jeff Bezos,Sean Parker

There's new technology emerging from behavioral economics and we are just starting to make use of that. I thought the input of psychology into economics was finished but clearly it's not!

THE REALITY CLUB

W. Daniel Hillis, Daniel Kahneman, Nathan Myhrvold, Richard Thaler on "Two Big Things Happening In Psychology Today"


THE IRONY OF POVERTY
(Class 5)
A Talk By Sendhil Mullainathan

Daniel Kahneman, Paul Romer, Richard Thaler, Danny Hillis, Jeff Bezos, Sean Parker, Anne Treisman, France LeClerc, Salar Kamangar, George Dyson

I want to close a loop, which I'm calling "The Irony of Poverty." On the one hand, lack of slack tells us the poor must make higher quality decisions because they don't have slack to help buffer them with things. But even though they have to supply higher quality decisions, they're in a worse position to supply them because they're depleted. That is the ultimate irony of poverty. You're getting cut twice. You are in an environment where the decisions have to be better, but you're in an environment that by the very nature of that makes it harder for you apply better decisions.


PUTTING PSYCHOLOGY INTO BEHAVIORAL ECONOMICS
(Class 6)
A Talk By Richard Thaler, Daniel Kahneman, Sendhil Mullainathan

Richard Thaler, Daniel Kahneman, Sendhil Mullainathan, Sean Parker, Anne Treisman, Paul Romer,Danny Hillis, Jeff Bezos, Salar Kamangar, George Dyson, France LeClerc

There's new technology emerging from behavioral economics and we are just starting to make use of that. I thought the input of psychology into economics was finished but clearly it's not!


PHOTO GALLERY
Edge Master Class & San Francisco Dinner

Photo Gallery: A Short Course In Behavioral Economics (Below)

Photo Gallery: The San Francisco 2008 Science Dinner


INTRODUCTION
By Daniel Kahneman

Many people think of economics as the discipline that deals with such things as housing prices, recessions, trade and unemployment. This view of economics is far too narrow. Economists and others who apply the ideas of economics deal with most aspects of life. There are economic approaches to sex and to crime, to political action and to mass entertainment, to law, health care and education, and to the acquisition and use of power. Economists bring to these topics a unique set of intellectual tools, a clear conception of the forces that drive human action, and a rigorous way of working out the social implications of individual choices. Economists are also the gatekeepers who control the flow of facts and ideas from the worlds of social science and technology to the world of policy. The findings of educators, epidemiologists and sociologists as well as the inventions of scientists and engineers are almost always filtered through an economic analysis before they are allowed to influence the decisions of policy makers.

In performing their function as gatekeepers, economists do not only apply the results of scientific investigation. They also bring to bear their beliefs about human nature. In the past, these beliefs could be summarized rather simply: people are self-interested and rational, and markets work. The beliefs of many economists have become much more nuanced in recent decades, and the approach that goes under the label of “behavioral economics” is based on a rather different view of both individuals and institutions. Behavioral economics is fortunate to have a witty guru—Richard Thaler of the University of Chicago Business School. (I stress this detail of his affiliation because the Economics Department of the University of Chicago is the temple of the “rational-agent model” that behavioral economists question.) Expanding on the idea of bounded rationality that the polymath Herbert Simon formulated long ago, Dick Thaler offered four tenets as the foundations of behavioral economics:

Bounded rationality

Bounded selfishness

Bounded self-control

Bounded arbitrage

The first three bounds are reasonably self-evident and obviously based on a plausible view of the psychology of the human agent. The fourth tenet is an observation about the limited ability of the market to exploit human folly and thereby to protect individual fools from their mistakes. The combination of ideas is applicable to the whole range of topics to which standard economic analysis has been applied—and at least some of us believe that the improved realism of the assumption yields better analysis and more useful policy recommendations.

Behavioral economics was influenced by psychology from its inception—or perhaps more accurately, behavioral economists made friends with psychologists, taught them some economics and learned some psychology from them. The little economics I know I learned from Dick Thaler when we worked together 25 years ago. It is somewhat embarrassing for a psychologist to admit that there is an asymmetry between the two disciplines: I cannot imagine a psychologist who could be counted as a good economist without formal training in that discipline, but it seems to be easier for economists to be good psychologists. This is certainly the case for both Dick and Sendhil Mullainathan—they know a great deal of what is going on in modern psychology, but more importantly they have superb psychological intuition and are willing to trust it.

Some of Dick Thaler’s most important ideas of recent years—especially his elaboration of the role of default options and status quo bias—have relied more on his flawless psychological sense than on actual psychological research. I was slightly worried by that development, fearing that behavioral economics might not need much input from psychology anymore. But the recent work of Sendhil Mullainathan has reassured me on this score as well as on many others. Sendhil belongs to a new generation. He was Dick Thaler’s favorite student as an undergraduate at Cornell, and his wonderful research on poverty is a collaboration with a psychologist, Eldar Shafir, who is roughly my son’s age. The psychology on which they draw is different from the ideas that influenced Dick. In the mind of behavioral economists, young and less young, the fusion of ideas from the two disciplines yields a rich and exciting picture of decision making, in which a basic premise—that the immediate context of decision making matters more than you think—is put to work in novel ways.

I happened to be involved in an encounter that had quite a bit to do with the birth of behavioral economics. More than twenty-five years ago, Eric Wanner was about to become the President of the Russell Sage Foundation—a post he has held with grace and distinction ever since. Amos Tversky and I met Eric at a conference on Cognitive Science in Rochester, where he invited us to have a beer and discuss his idea of bringing together psychology and economics. He asked how a foundation could help. We both remember my answer. I told him that this was not a project on which it was possible to spend a lot of money honestly. More importantly, I told him that it was futile to support psychologists who wanted to influence economics. The people who needed support were economists who were willing to be influenced. Indeed, the first grant that the Russell Sage Foundation made in that area allowed Dick Thaler to spend a year with me in Vancouver. This was 1983-1984, which was a very good year for behavioral economics. As the Edge Sonoma session amply demonstrated, we have come a long way since that day in a Rochester bar.

Daniel Kahneman


FIRST DAY SUMMARY—EDGE MASTER CLASS 2008
By Nathan Myhrvold

DR. NATHAN MYHRVOLD is CEO and managing director of Intellectual Ventures, a private entrepreneurial firm. Before Intellectual Ventures, Dr. Myhrvold spent 14 years at Microsoft Corporation. In addition to working directly for Bill Gates, he founded Microsoft Research and served as Chief Technology Officer.

Nathan Myhrvold's Edge Bio Page

____________________________

The recent Edge event on behavioral economics was a great success. Here is a report on the first day.

Over the course of the last few years we've been treated to quite a few expositions of behavioral economics—probably a dozen popular books seek to explain some aspect of the field. This isn't the place for a full summary but the gist is pretty simple. Classical economics has studied a society of creatures that Richard Thaler, an economist at University of Chicago dubs the "Econ". Econs are rather superhuman in some ways—they do everything by optimizing utility functions, paragons of bounded rationality. Behavioral economics is about understanding how real live Humans differ from Econs.

In previous reading, and an Edge event last year I learned the most prominent differences between Econs and Humans. Humans, as it turns out, are not always bounded rational—they can be downright irrational. Thaler likes to say that Humans are like Homer Simpson. Econs are like Mr. Spock. This is a great start, but to have any substance in economics one has to understand that in the context of economic situations. Humans make a number of systematic deviations from the Econ ideal, and behavioral economics has categorized a few of these. So, for example, we humans fear loss more than we love gain. Humans care about how a question is put to them—propositions that an Econ would instantly recognize as mathematically equivalent seem different to Humans and they behave differently.

Daniel Kahneman, a Nobel laureate for his work in behavioral economics told us about priming—how a subtle influence radically shifts how people act. So, in one experiment people are asked to fill out a survey. In the corner of the room is a computer, with a screen saver running. That's it—nothing overt, just a background image in the room. If the screen saver shows pictures of money, the survey answers are radically different. Danny went through example after example like this where occurred. The first impulse one has in hearing this is no, this can't be the case. People can't be that easily and subconsciously influenced. You don't want to believe it. But Danny in his professorial way says, "Look, this is science. Belief isn't an option. Repeated randomized trials confirm the results. Get over it".??The second impression is perhaps even more surprising—the influences are quite predictable. Show people images of money, and they tend to be more selfish and less willing to help others. Make people plot points on graph paper that are far apart, and they act more distant in lots of way. Make them plot points that are close together, and damned if they don't act closer. Again, it seems absurd, but cheap metaphors capture our minds. Humans, it seems, are like drunken poets, who can't glimpse a screen saver in the corner, or plot some points on graph paper without swooning under the metaphorical load and going off on tangents these stray images inspire.

This is all very strange, but is it important? The analogy that seems most apt to me is optical illusions. An earlier generation of psychologists got very excited about how the low level visual processing in our brains is hardwired to produce paradoxical results. The priming stories seem to me to be the symbolic and metaphorical equivalent. The priming metaphors in optical illusions are the context of the image—the extra lines or arrows that fool us into making errors in judgment of sizes or shapes. While one can learn to recognize optical illusions, you can't help but see the effect for what it is. Knowing the trick does not lessen its intuitive impact. You really cannot help but think one line is longer, even if you know that the trick will be revealed in a moment.

I wonder how closely this analogy carries over. Danny said today that you couldn't avoid priming. If he is right perhaps the analogy is close; but perhaps it's not.

I also can't help but wonder how important these effects are to thinking and decision making in general. After the early excitement about optical illusions, they have retreated from prominence—they explain a few cute things in vision, but they are only important in very artificial cases. Yes, there are a few cases where product design, architecture and other visual design problems are impacted by optical illusions, but very few. In most cases the visual context is not misleading. So, while it offers an interesting clue to how visual processing works, it is a rare special case that has little practical importance.

Perhaps the same thing is true here—the point of these psychological experiments, like the illusions, is to isolate an effect in a very artificial circumstance. This is a great way to get a clue about how the brain works (indeed it would seem akin to Steven Pinker's latest work The Stuff of Thought which argues for the importance of metaphors in the brain). But is it really important to day-to-day real world thinking? In particular, can economics be informed by these experiments? Does behavioral economics produce a systematically different result that classical economics if these ideas are factored in?

I can imagine it both ways. If it is important, then we are all at sea, tossed and turned in a tumultuous tide of metaphors imposed by our context. That is a very strange world—totally counter to our intuition. But maybe that is reality.

Or, I could equally imagine that it only matters in cases where you create a very artificial experiment—in effect, turning up the volume on the noise in the thought process. In more realistic contexts the signal trumps the noise.

The truth is likely some linear combination of these two extreme—but what combination? There are some great experiments yet to be done to nail that down.

Dick Thaler gave a fascinating talk that tries to apply these ideas in a very practical way. There is an old debate in economics about the right way to regulate society. Libertarians would say don't try—the harm in reducing choice is worse than the benefit, in part because of unintended consequences, but mostly because the market will reach the right equilibrium. Marxist economists, at the other extreme, took it for granted that one needs a dictatorship of the proletariat—choice is not an option, at least for the populace. Thaler has a new creation—a concept he calls "libertarian paternalism" which tries to split the baby.

The core idea (treated fully in his book Nudge) is pretty simple—present plenty of options, but then encourage certain outcomes by using behavioral economics concepts to stack the deck. A classic example is the difference between opt-in and opt-out in a program such as organ donation. If you tell people that they can opt-in to donating their organs if they are killed, a few will feel strongly enough to do it—most people won't. If you switch that to opt-out the reverse happens—very few people opt out. Changing the "choice architecture" that people have changes choices. This is not going to work on people who feel strongly, but the majority doesn't really care and can be pushed in one direction or another by choice architecture.

A better example is a program called "save more tomorrow" (SMT), for 401K plans in companies. People generally don't save very much. So, the "save more tomorrow" program lets you decide up front to save a greater portion of promotions and raises. You are not cutting into today's income (to which you feel you are entitled to spend) but rather you are pre-allocating a future windfall. Seems pretty simple but there are dramatic increases in savings rates when it is instituted.

Dick came to the session loaded for bear, expecting the objections of classical economics. Apparently this is all very controversial among economists and policy wonks. It struck me as very clever, but once explained, very obvious. Of course you can put some spin on the ball and nudge people the right way using to achieve a policy effect. It's called marketing when you do this in business, and it certainly can matter. In the world of policy wonk economists this may be controversial, but it wasn't to me.

An interesting connection with the discussion of priming experiments is that many policy contexts are highly artificial—very much like experiments. Filling out a driver's license form is a kind of questionnaire, and the organ donation scenario seems very remote to most people despite the fact that they're making a binding choice. The mechanics of opt-in versus opt-out or required choice could matter a lot in these contexts.

Dick has a bunch of other interesting ideas. One of them is to require that government disclosures on things like cell phone plans, or credit card statements be machine-readable disclosure with a standard schema. This would allow web sites to offer automated comparisons, and other tools to help people understand the complexities.

This is a fascinating idea that could have a lot of merit. Dick is, from my perspective, a bit over optimistic in some ways—it is unclear that it will be overwhelming. An example is unit prices in grocery stores—those little labels on store shelves that tell you that Progesso canned tomatoes are 57 cents per pound, while the store brand is 43. Consumer advocates thought these would revolutionize consumer behavior—and perhaps they did in some limited ways. But premium brands didn't disappear.

I also differ on another point—must this be required by government, and would it be incorruptible were it so mandated. In the world of technology most standards are de facto, rather than de juris, and are driven by private owners (companies or private sector standards bodies), because the creation and maintenance of a standard is a dynamic balancing act—not static one. I think that many of the disclosure standards he seeks would be better done this way. Conversely, a government mandate disclosure standard might become so ossified by changing slowly that it did not achieve the right result. Nevertheless, this is a small point compared to the main idea, which is that machine-readable disclosures with standardized schema allow third party analysis and enables a degree of competition that would harder to achieve by other means.

Sendhil Mullainathan gave a fascinating talk about applying behavior economics to understand poverty. If this succeeds (it is a work in progress) it would be extremely important.

He showed a bunch of data on itinerant fruit vendors (all women) in India. 69% of them are constantly in debt to moneylenders who charge 5% per day interest. The fruit ladies make 10% per day profit, so half their income goes to the moneylender. They also typically buy a couple cups of tea per day. Sendhil shows that 1-cup of tea per day less would let them be debt free in 30 days, doubling their income. 31% of these women have figured that out, so it is not impossible. Why don't the rest get there?

Sendhil then showed a bunch of other data arguing that poor people—even those in the US (who are vastly richer in absolute scale than his Indian fruit vendors)—do similar things with how they spend food stamps, or use of payday loans. He was very deliberate at drawing this out, until I finally couldn't stand it and blurted out "you're saying that they all have high discount rate". His argument is that under scarcity there is a systematic effect that you put the discount rate way too high for your own good. With too high a discount rate, you spend for the moment, not for the future. So, you have a cup a tea rather than double your income.

He is testing this with an amazing experiment. What would these women do if they could escape the "debt trap"? Bono, Jeffery Sachs and others have argued this point for poor nations—this is the individual version of the proposition.

Sendhil is studying 1000 of these fruit vendors (all women). Their total debt is typically $25 each, so he is just stepping in and paying off the debt for 500 of them! The question is then to see how many of them revert to being in debt over time, versus the 500 who are studied, but do not have their debt paid off. The experiment is underway and he has no idea what the result will be.

The interesting thing here is that, for these people, one can do a meaningful experiment (N = 500 gives good statistics) without much money in absolute. It would be hard to do this experiment with debt relief for poor nations, or even the US poor, but in India you can do serious field experiments for little money.

Sendhil also has an amusing argument, which is that very busy people are exactly like these poor fruit vendors. If you have very little time, it is scarce and you are as time-poor as the fruit ladies are cash-poor. So, you act like there is a high discount—and you commit to future events—like agreeing to travel and give a talk. Then as the time approaches, you tend to regret it and ask, "Why did I agree to this?" So you act like there is a high discount rate. This got everybody laughing. The difference here is that time can't be banked or borrowed, so it is unclear to me how close an analogy it is, but it was interesting nonetheless.

Indeed, I almost cancelled my attendance at this event right before hand, thinking, "why did I agree to this? I don't have the time!" After much wrestling I decided I could attend the first day, but no more. Well, this is one of those times when having the "wrong" discount rate is in your favor. I'm very glad I attended.

—Nathan Myhrvold


SECOND DAY SUMMARY—EDGE MASTER CLASS 2008
By George Dyson

GEORGE DYSON, a historian among futurists, is the author Baidarka; Project Orion; and Darwin Among the Machines.

George Dyson's Edge Bio Page

____________________________

The weekend master class on behavioral economics was productive in unexpected ways, and a lot of good ideas and thoughts about implementing them were exchanged.

Day 2 (Sunday) opened with a session led by Sendhil Mullainathan, followed by a final wrap-up discussion before we adjourned at noon. Elon Musk, Evan Williams, and Nathan Myhrvold had departed early. In the absence of Nathan's high-resolution record, a brief summary, with editorial comments, is given here.

"I refuse to accept however, the stupidity of the Stock Exchange boys, as an explanation of the trend of stocks," wrote John von Neumann to Stanislaw Ulam, on December 9, 1939. "Those boys are stupid alright, but there must be an explanation of what happens, which makes no use of this fact." This question led von Neumann (with the help of Oskar Morgenstern) to his monumental Theory of Games and Economic Behavior, a precise mathematical structure demonstrating that a reliable economy can be constructed out of unreliable parts.

The von Neumann and Morgenstern approach (developed further by von Neumann's subsequent Probabilistic Logics and the Synthesis of Reliable Organisms From Unreliable Components) assumes that human unreliability and irrationality (by no means excluded from their model) will, in the aggregate, be filtered out. In the real world, however, irrational behavior (including the "stupidity of the stock exchange boys") is not completely filtered out. Daniel Kahneman, Richard Thaler, Sendhil Mullainathan, and their colleagues are developing an updated theory of games and economic behavior that does make use of this fact.

Sendhil Mullainathan opened the first hour, on the subject of scarcity, by repeating the first day's question: what is it that prevents the fruit vendors (who borrow their working capital daily at high interest) from saving their way out of recurring debt? According to Sendhil, many vendors do manage to escape, but a core-group remains trapped.

Sendhil shows a graph with $$ on the X-axis and Temptation on the Y-axis. The curve starts out flat and then ascends steeply upward before leveling off. The dangerous area is the steep slope when a person begins to acquire disposable income and meets rapidly increasing temptations. "To understand the behavior you have to understand the scale." Thaler interjects: "It's a mental accounting problem—but I think everything is a mental accounting problem." All human beings are subject to temptation, but the consequences are higher for the poor. Conclusion: temptation is a regressive tax.

Paul Romer notes that the temptation of time is a progressive tax, since time, unlike money, is evenly distributed, and wealthy people, no matter how well supplied with money, believe they have less spare time. Bottom line: the effects of temptation do not scale with income.

How best to intervene? Daniel Kahneman notes: "Some cultures have solved that problem... there seems to be a cultural solution." Sendhil, whose field research may soon have some answers, believes that lending at lower interest rates may help but will not solve the problem, and adds: "It would be better for the micro-financiers to come in and offer money at the same rate as the existing lenders, and then make the payoff in some other ways." The problem is the chronic effects of poverty, not the lending institutions (or lack thereof).

Sendhil moves the discussion to the subject of "depletion"—when judgment deteriorates due to the effects of stress. Clinical studies and real-world examples are described. Mental depletion correlates strongly with high serum cortisol (measurable in urine) and low glucose. Poverty produces chronic depletion, and decisions are impaired. High-value decisions are made under conditions of high stress. This results in what Sendhil terms the scarcity trap.

During the mid-morning break (with cookies), Richard Thaler shows videos from a 40-year-old study (Walter Mischel, 1973) of children offered one cookie now or two if they wait. The observed behavior correlates strongly, by almost any measure, with both the economic success of the parents and the child's future success. Hypothesis: small behavioral shifts might produce (or "nudge") large economic results.

After the break we begin to wrap things up. Richard Thaler suggests a "nudge" model of the world. The same way a digital camera has both an "expert mode" and an "idiot mode," what the economy needs is an "idiot mode" resistant to experts making mistakes.

Thaler notes that Government is really bad at building systems that can be operated in "idiot mode"—just compare private sector websites vs. public sector. Imagine if the Government had designed the user interface for Amazon!

Sendhil makes a final comment that elicits agreement all around: "R&D in the poverty space has huge potential returns and there is too little thinking about that."

Daniel Kahneman concludes: "There's new technology emerging from Behavioral Economics and we are just starting to make use of that. I thought the input of psychology into economics was finished but clearly it's not!" The meeting adjourns.

My personal conclusions: retreating to the luxury of Sonoma to discuss economic theory in mid-2008 conveys images of Fiddling while Rome Burns. Do the architects of Microsoft, Amazon, Google, PayPal, and Facebook have anything to teach the behavioral economists—and anything to learn? So what? What's new?? As it turns out, all kinds of things are new. Entirely new economic structures and pathways have come into existence in the past few years. More wealth is flowing ever more quickly, and can be monitored and influenced in real time. Models can be connected directly to the real world (for instance, Sendhil's field experiment, using real money to remove real debt, observing the results over time). The challenge is how to extend the current economic redistribution as efficiently (and beneficently) as possible to the less wealthy as well as the wealthy of the world.

A time of misguided economic decisions, while bad for many of us, is a good time for behavioral economics. As Abraham Flexner argued (26 September 1931) when urging the inclusion of a School of Economics at the founding of the Institute for Advanced Study: "The plague is upon us, and one cannot well study plagues after they have run their course." All the more so amidst the plagues of 2008.

It was Louis Bamberger's wish (23 April 1934), upon granting Abraham Flexner's request, that "the School of Economics and Politics may contribute not only to a knowledge of these subjects but ultimately to the cause of social justice which we have deeply at heart."

—George Dyson
 

Edge Dinners
Event Date: [ 2.25.08 ]
Location:
Indian Summer Restaurant
Monterey, CA
United States

"The crowd was sprinkled generously with those who had amassed wealth beyond imagining in a historical eye blink." — The Wall Street Journal


 

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