User:Martlau/unwrapped

Today (June 25, 2006), I looked for a Wikipedia article which clearly explains the meaning/aim of life as naturally deduced from current scientific knowledge. I was disappointed to find nothing closely matching this aim. Here is a good personal attempt:

The meaning of life: please update scientifically

At some temperature and matter density, the most stable arrangements of matter are not the random distribution that would be seen in perfect gases. The complexity of the arrangements is a simple consequence of a few physical laws and time. Most atoms and molecules form very quickly when the right particles are combined at a high enough (but not too high!) temperature. Stability can be measured as the ratio of matter that respects a specific arrangement over all matter. Matches are obviously not exact to the elementary particle, so defining a general matching criteria is quite difficult.

Other arrangements of particles take longer to form. Planets and galaxies span large distances thus form more slowly. More complex arrangements, such as mountains and rivers, also take a significant time to form, even though the distances involved are not astronomical. The most complex arrangement of matter is what we call life.

Life is a highly complex and fragile arrangement of matter whose stability is acheived by fixing itself after structural collapse, rather than by passively persisting after being randomly assembled from the collisions of less complex structures. One may argue that the definition of life should involve creating more of itself (replicating). However, this view analyses only one individual. When the whole ecosystem is observed from a distance, there is no distinction between fixing itself, and creating more of itself in order to compensate for the structural collapse rate. This applies to an ecosystem whose aggregate capability to evolve has reached a deep local minima (or, much less likely, the absolute minima). Reaching either type of minima does not imply a completely static pattern of particles: some "evolution like" changes will persist even in a minima. Such changes do not make the system more stable, thus cannot be labeled as evolution, but rather as jitter. An analogy can be made with particles of gas within a balloon: they are moving and forming different patterns of pressure on the balloon over time, even though the shape of the balloon does not change. This is the steady-state definition of life.

As it exists on Earth, life has not reached the steady-state and thus is not trapped in a local minima (though proving this is not trivial). Evolution is making life more stable by changing the arragement of matter into often less stable, but sometimes more stable structures. The more stable structures persist and the less stable ones eventually become inexistant.

Evolution is driven mostly by macro and micro scale random events. It is generally accepted that molecules called nucleotide arose naturally in the Earth's atmosphere some 4 billion years ago, through the collision of simpler molecules and atoms. When nucleotide molecules collide with one another, they form larger molecules called RNA. Large RNA molecules are not very stable: they often break into pieces due external strain. They are however a terrific catalyst (i.e. they help) in the assembly of other molecules, especially molecules very similar to themselves. Thus RNA molecules respect the above definition of life: a structure too complex to be stable without catalysing the assembly of molecules similar to its own structure.

This RNA only ecosystem could have been the end of the road for life, had it been a local minima (or the absolute minima). It was not. Exactly how the next big evolutive step happened is unclear. RNA strands likely became long enough to start catalysing other molecule types such as DNA and protein, which made the entire system of molecules more stable than the RNA only ecosystem. The RNA ecosystem being less stable (less efficient at maintaining itself) than the molecule cocktail described above, it disappeared and was replaced with prokaryotes, the oldest type of cells found in fossils. The entire process of synthesizing prokaryotes from a lump of atoms took less than 500 million years.

Evolution at the single cell level is thought to have lasted another 3.5 billion years, after which groups of cells attached together proved even more stable than single cells. Around 1 billion years ago, a pluricellular algae appeared in the oceans. Things started to move quickly from then on, with the birth and extinction of a multitude of species.

The mutation rate is the rate at which structures change themselves in order to quickly find a better local minima (before another structure does so and uses up all the resources available to exploit the minima!). Lasting structural changes occur when a collaps is not fixed, but rather creates an even more stable structure mostly through the luck of the draw. Few structural changes are good (i.e. more stable), most are bad (less stable). If the rate at which a structure fixes its collapse decreases in such a way that collapses appears faster than they are repaired, the original structure will eventually become extinct, resulting in a loss of complexity or a diffirent, usually more stable structure.

Throughout the evolution and complexifying of life, a choice between a low mutation rate (when a good local minima has been found) and a high mutation rate (when a better local minima is reachable through the luck of the draw) controled the evolution rate of species. Fossil records show long periods during which life evolved slowly, as most species could no longer hope to reach a new local minima through the luck of the draw. Evolution was stuck. It is generally accepted that cataclysmic events (meteorites, volcanoes, etc) shook life out of its local minimas by quickly changing the climate on earth, rendering previous structure optimizations obsolete.

Upto very recently, only micro and macro random factors (mutations and cataclysmic events, respectively) played in the evolution of life towards a more stable state. Evolution eventually won the jack pot and put one specie (homo sapiens sapiens) in very deep local minima. By understanding what makes structures stable, humans are capable of synthesizing much more stable structures than random structural changes alone. However, humans have the capability of wiping out all life on Earth, proving to have been a rather unlucky draw from the stand point of structure stability.

So there you have it, the meaning of life: increase the stability of complex structures that resemble your current structure. In order of importance:

1. Don't wipe out all life on Earth (if humans prove to be an unstable structure, don't kick evolution out of the casino quite yet: it should have another 4 billion good years of gambling in it!).

2. Sustainably increase biodiversity (hedge your bets).

3. Sustainably increase biomass (reproduce).

4. Have fun (some of the above points can be fun as well!)

Two other conclusions are also possible, and compatible to the arguments herein. You can overweight your personal interests, and do whatever you feel like. All other life forms behave this way, so why shouldn't we? This generally leads to meeting a subset of the list above.

Or maybe you prefer much simpler structures, and thus would like to wipe out all life, placing the universe in another local minima incapable of spawning the complexity of life (though proving this result is not trivial). Hopefully the intersection of this conclusion and the means to execute it will forever remain null.

Here are some fun scenarios on how the story of life will end.

Rapture wins: Jesus returns to Earth, sends some of us to hell and others to heaven. Most humans spend eternity trying to figure out how they missed the signs that Rapture was emminent (you name them, hurricanes, earthquakes, the Bush administration).

Astrophysics wins: Life on Earth proves incapable (i.e. too dumb) of avoiding annihilation by a cosmic event. This could be a huge meteorite (unlikely), the collapse of the Sun, or the collapse of the Universe.

Thermodynamics wins: Life proliferates so much that it accelerates the progress of entropy and we run out of usable energy (unlikely).

2nd try: for some reason, humans are annihilated but other forms of life survive on Earth. They may be lucky enough to redevelop "intelligence" capable of synthesizing more stable structures, with the knowledge that other "intelligent" creatures romed the surface of the Earth but failed to survive as a specie (here is a quote taken from the future: "They mustn't have been that smart after all, those taherians [sic], they ended up killing themselves! We won't make that mistake!"). By statistical analysis it is possible to show that the three big steps needed to create intelligent life are not likely to occur much faster than they occured on Earth. It is not (yet) possible to know how much longer it would take to naturally recreate intelligent life if we were to restart evolution at a more primitive stage. Being an completely irrationnal optimist, my personal opinion is that each step will be about the same duration next time around.

Insuring a 2nd try (1): humans should build an unmistakeable, easy to find, unprerishable log of what we are doing, so that in the case of a massive extinction, the next "intelligent" life forms know what to not do.

Insuring a 2nd try (2): due to the high likelyhood of total annihilation of all life on Earth, a pre-emptive mass suicide of humans, staged as a unintentionnal self-destruction due to nuclear war, pollution, etc... could put the next "intelligent" life form on the right track, without risking a huge evolutionnary setback.

Faking the 2nd try: we could synthesize and plant past "intelligent" life fossils and civilisations to render current day humans more sensitive to total annihilation, having them thinking that they are the second "intelligent" life form on Earth.

Unwrapped Greediness is out of fashion.

Here are some weekend and lunch time ramblings, which may eventually be converted into a mildly structured book.

Introduction
The most important lesson that I have painstakenly learnt over the first 27 years of my existance is this: the best know practice in any field, no matter how long it has been around, is in no way the best practice, and can be significantly improved by many. For the longest of time, I though all discoveries in mature fields were inaccessible to the average human. It was thus impossible for me to improve a method that had been in use for a long time. Since these methods are by their nature well known and wide-spread, significant short-term gains can be made by improving them. Yet I expended no effort whatsoever in that direction, assuming innovation could only occur in emerging fields, such as cutting edge technology. I was completely baffled the day I realized how accesible and significant new discoveries in old, seemingly stagnating fields are. Some time later, I understood that I should have left no rocks unturned in my quest for innovation, even those engraved by countless people that preceeded me. From March 2002 to this day, I have whitnessed the dogmas on which I had previously based my life crumble one by one.

Many of these eye openning discoveries were a product of my professionnal life, researching various aspects of computer software and hardware. They are mostly documented in patents, articles or kept hidden in the micro-chips that I have designed. However fascinating, these ideas have but a very limited direct use in the life of others.

The economy, on the other hand, reaches a much broader audience, and is just as fascinating: it leaves no one indifferent. How we make and spend our money, and how our government taxes and redistributes it is what our life is all about. Obviously, we should be good at this.

Discussing these topics with my friends and family, reading periodicals and books on the subject, listening to politicians speak about these issues and questionning my own comprehension of how it all works out, I soon realized that very few people —including myself— actually understood how the economy works. And even fewer applied their knowledge of it to their decisions. All this sounded like a good topic for a useful book, I thought.

The goal of this book is to highlight the aspects of our economy that fall short of maximizing our quality of life, delivered in a sucinct, accessible and entertaining package. Over time my priorities, preoccupations and opinions will change; this book will also allow me to see how right or wrong I was in my late twenties, or at least, how I have changed since. I have learnt to steer clear from absolute truths, might they be preached by myself or by others. Thus the ideas herein do not come with a warranty, were not inspired by any truth-bearing entity, and, for the most part, will be proven incorrect —to some extent— by others. None the less, please read on.

Lets abstract the entire world wide production of goods and services to a single pie per year. This baked good analogy will allow even the most neophite reader to understand the inner workings of today's economy, as well as its short-comings.

Part I of this book, "Baking, Sharing and Eating the Pie", describes how the pie is produced, why the size of the pie changes over time, and how we divide the pie amongst everyone. It is a summary of the economic choices and consequences that the occidental world has been through over our brief exposure to two centuries of industrialization.

Part II, "Baking a Bigger Pie", addresses specific aspects of today's society that influence the size of today's pie, as well as tomorrow's. The most straight forward methods to improve our quality of life are explained here. They are simple changes to our economic system which can be used to circumvent many of its short-comings. These changes cannot give results overnight, thus are not very popular measures for politicians or for the masses. It is society's responsability to educate it citizens to value decisions which only pay off in the long run.

Part III, "Baking a Tastier Pie", addresses specific aspects of today's society that influence what is consumed in the future. A simple economic rules stipulates that all that services and positive valued goods produced will be consumed (at a given positive price). This means that no matter how good or bad the pie tastes, it will be eaten. Figuring out what flavor of pie people will prefer in a year, a decade or a century allows good planning in the use of current resources to deliver the best tasting pie at that time. An individual, a company or a government who can correctly predict the nature --or flavor-- of future demand brings significant value to society. Conversly, a wrong prediction can cause great harm to economic growth and to quality of life. Contrairily to Part II, the answers to this question are elusive. It highlights past mistakes that have been made in this area, which we should keep in mind as we make decisions that carry with them significant long term impacts. Some very debatable general guidelines are proposed: mostly food for thought, or mental indigestion.

It isn't about money
We often hear "Money makes the world go round", enough that we eventually believe the statement to be true. The art of exploiting money to our advantage -- making as much money as possible -- is greatly valued, admired and rewarded in our occidental society. Some professions, such as day traders and bankers, do not actually produce any goods or services which are consumed by others or themselves. Rather, just by shuffling liquidities around and speculating about future events, the talented or lucky ones can make much more money than can a farmer or a doctor, even though these two professions directly provide goods and services consummed by Earth's population. Does it make sense to pay people so much despite their apparently inexistant contribution to the goods and services produced by society?

Answering this question, as well as most topics addressed by this book, requires understanding how our economy works. As counter intuitive as it seems, we will be able to answer this question and cover most topics without even using the concept of money. All forms of abstract liquidities -- paper cash, electronic money in your bank account, stocks, derivatives, and bonds -- do make our life easier in general. They make the planning of expenses seem straight forward: save for retirement and for tough times, spend only as much as your income allows you to. Planning for our current and future needs is key to living comfortably. Abstract liquidities are very well suited for short-term planning, both for micro planing (personal economic decisions) and macro planning (world wide economic decisions). Yet abstract liquidities serve but a contentious role in long-term micro planning, and are completely useless in long-term global macro planning!

So how can we do long-term planning (plan our retirement, for example) if our only tool, money, cannot be reliably used? How about if we just got rid if it! If stores and businesses offered free of charge all the goods and services that we need through-out life, wouldn't that solve our money problem -- and wouldn't it be just great! This utopia is possible, as long as the world wide production of goods and services used by individual consumers matches the population's demand for them. The good news is that corporate and industrial consumption of goods and services would be nil, allowing consumers complete consumption of all of the world's production. The bads news is that we must find some benevolant entity willing to make all of these goods and provide us all of these services, free of charge.

Even though it is unlikely that such a benevolant entity is ever found, we can extract from this example what humanity is actually striving for: the maximum amount of consumer goods and services provided to every individual. In economic terms, we call this maximizing the GDP per capita. GDP per capita is the average amount of goods and services that every individual can consume over one year's time. This is the quality of life that you can expect to enjoy for a given year. As time passes the GDP per capita goes up, and your quality of life improves. Obviously, this is a good thing.

It's about quality of life
What is your goal in life? Here are some common answers. I want to be successfull. I want to have fun. I want to help others. I want to have a family. I want to live for a long time. I want to leave a lasting legacy. I want to go to heaven.

The common thread is this: I want to be happy. Adding an altruistic twist: I want everyone to be happy. This seems simple enough. We all know that time goes only forward, thus if our goal is to make everyone happy, were are refering to current and future states of mind. It is quite obvious that we have no control over past happiness, might it be our own or of others. But we do have some control, or at the very least some influence, over the happiness of our friends, family, coworkers, teachers, neighbors today and tomorrow. More indirectly, we also influence citizens of other countries and even future generations. Think of Thomas Edison, Albert Einstien, Henry Ford, Mother Theresa, George Washinton or  Gandi: they are no longer with us since they were born long ago, but they still inspire us today. They have a significant impact on our current happiness and quality of life.

It is really difficult to quantify how much happier I am today because of them. Our happiness has much to do with our expectations and how these are fulfilled or not. Though we don't generally realize it, our happiness is very much a product of our comfort level. Sickness, pain and accidents are common events that can lower our happiness. Medicine, pharmacuticals and insurance address these issues, and generally increase our comfort level and quality of life. These solutions are goods and services that civilisation has learnt to produce over many millenia, to enhance our comform and, to a degree, increase our happiness.

How can we measure the progress of our comfort level over time? Your comfort is proportionnal to what you can buy. You can only buy what has been produced somewhere in the world. Thus, on average, you will be able to buy in a single year your portion of the world's production, that is the world's production divided by its population. To give you a rough idea, in 2005 the world wide yearly production is around 30 trillion US dollars, and the world population is about six billion people. Thus you should expect to buy around 5000$ US in goods and services per year. If you are buying more than this, you are better off than the average living human. This number is the world wide GDP (gross domestic product) per capita. Over time this number goes up, and with it your comfort and quality of life get better.

If you are not yet convinced that time improves your quality of life, I will offer you the choice of living 750,000 years ago. Fire has not yet been discovered. You must hunt with rocks and sticks, and eat raw meat. Quality of life was quite low then. Or perhaps, you would prefer living in early 19th century industrial England. At least you have fire then, and can enjoy a cooked steak. Though you would have to live with some minor down sides: you would be working in a coal mine 60 hours a week for minimum wage. You would just have to give up modern medicine, running water, electricity, year round fruits and vegetables. Or perhaps you would prefer living in the 1950s: after all, that is not so long ago. All you would have to give up is oral contraception, anathesia during dental and medical procedures, color television, cell phones, calculators, computers and that two week vacation in the carribean during the winter. The best time is the present, isn't it? Or is it? If I reedit this book in 2050, I would certainly add as a possible past era to live in the early 21st century (now!). With all the crime, desease, social injustice, pollution of our day, who would ever want to go back? And I am leaving out the most important part: all those technological improvements that no one can even imagine are possible today. Increasing the GDP per capita, your quality of life, is a good thing.

How can we get more of it is what this book -- and your life -- is all about. Get your aprons out and get cooking: we will bake a bigger pie!

The three compelling benefits
Demonization of the modern economy. Economy is not all bad. If the most communist, anachist anti-globalisation extremist were stranded on a deserted island, they would very soon converge to an economic system because of these three benefits. They come naturally with human society because of our innate values and capabilities. The last section of this chapter.

Justice and fairness make a mess of things
Democracy, socialism, taxation, unequal wealth and power. These simply influence immediate division of wealth. These disciplines are selfing in the sense that they serve only current living humans (or humans that will be born in short order). This division makes no difference to humans born 1000 years down the road. All the effort invested in these system, and not invested in increasing the GDP per capita hurts future generations. Take the middle ages as an example. Humanity basically wasted 1000 years of techonological advances. Image your life if you were bron in the year 3000. Your life today would resemble this if the middles ages, controled by superstition and the church, has been allowed to progress as fast as the renaissance and the industrial revolotion. The word consomption come with a negative connotation in these times because it is associated with many things that we do not appreciate: big business, who, for the sole purpose of make few very rich, exploit worker in third world countries, destroy our environment and sell us goods that hurt us. Think of tobacco companies, of the fast food industry, or of large oil companies.

All of the effort that we invest in divide the pie correctly between individuals is wasted within one life time. How does the time that you great grand-father spent fighting over a piece of his land help us in any way today?

A very important part of equality is the forgetting factor of wealth and individual past accomplishment. This is done through death tax, capital tax. But it is unfair for such taxation to be local (it should be world-wide). Taxation does not mean redistribution of services through the government. It can mean direct redistribution of wealth (money). If humans ever become immortal, the dead tax at the very least will not be applicable. Food for thought, perhaps resetting personnal fortune at a random point in life would be good. This can be done volontarily...

Three main purposes of the economy: specialisation of labor, stocking up production, averaging out our individual production over our entire life. Chess, billiard, greedy algorithms. I don't really care for communism, capitalism, environmetalism, and the like. I just care for well being of humans in general, no matter the means and method by which it is delivered. What ever works.

I love science a great deal. What does this mean, it sounds so mechanichal? Firstly, I like to learn about things that are reproducable. Secondly, I like to learn simple things. In essence, this means undestanding statistics, that is sampling and correlation of independant events.

Hobbes stipulates that all motivation of man is towards gaining personal power. In fact, the motivation should be increasing mankind's total power, not subdividing more justly or accurately existing power.

Competition and evolution are really the same thing: can we leave an enduring legacy or not. If the answer is no, we are selectivily discarded from the deck of existance. If the answer is yes, we may continue to exist if luck permits).

Simpicity is what makes a theory viable, and stable: can other undersatnd and apply it? If not, it matters very little of the theory is correct, wouldn't you say?

In the very reductionnist view, we exist today to exist tomorrow. From a more pragmatic poitn of view, we choose how to act today to exist tomorrow. That is evolution in a nutshell. If we don't apply this rule, we die due to competition. Many objections can be thrown against this theory, when applied at the micro level -- our lives. Why are there gays, sufference, desease if the system is so perfect? These imperfections and undesireables are simple representions of our own subjective appreciation, as humans. In fact, what is really preserved is not our mind, our skin or our bones, but our DNA and its capability of survival. What we think is just has a very remote link with what will preserved DNA based life on Earth. After all, if we are here asking our selves these questions, it is not thanks to us, but rather thanks to this DNA life on earth that we participate in. If we or another animal were to evolve in a "smarter", more stable preservation of DNA in the universe, should we be greed and by principle try to stop it from existing (or kill it)?

Being a scientific and reasonable person are much of the same thing: believing on reproducable facts and theories and ignoring those things that we cannot reproduce or know nothing about. Religion. It is common wisdom in our occidental society to not trust the words and stories of others without proof that they are true. The justice system is a good example. Our (very justified) mistrust of door-to-door salemen another good one. Yet religion is based on believing without any proof.

I don't know if there is a god out there, or if there are other life forms elsewhere in the universe. However, I am quite convinced that these omni-present or extra-terrestrial beings do not influence my life or the life of anyone else. Thus, I don't base any decision in my life on their existance, but I do include in my thinking and reasoning that many other do believe in them and assume some form of interaction pre or post mortem. Personnal decisions are not restricted to being rational, and this is a good thing since one person's reason is the other personnal madness. However, following the rules and rites of your religion or culture is nothing but a restriction of your individual freedom in exchange for group acceptance. This is adult level peer pressure of joining a group, similar to what you have in schools with drugs and sex. Here the sin the restricting your freedom. It is a simple tradeoff: for most social acceptance - feeling you belong where you are and doing the "right" thing - is most important. I would not recommend atheism to anyone in this day and time, and would use much caution in converting the layman of agnosticism. Many people do feel lost and abandonned if they are not part of a group which checks what they are doing, judges them on it, and recommends a simple path to follow. Religion is just that. The only significant criticism that is can label some religions with is not tolerating the other religions. Saying that those of others religions will go to hell is just good marketing. Treating other unfairly (something this goes all the way to killing them), now that is crossing the line. What is the economic role of government? 1. Increase longterm wealth and well-being (invest) 2. Provide mandatory insurance, early and late life support without work (socialism, part 1) 3. Redistribute wealth amongst its population (socialism, part 2)

Conclusion
Progress is not always good. Talk about resiliency of humanity, of other life forms on earth. Likelyhood of re-emergence of intelligent life after human kind's extinction. Are mass extinctions all bad? Refer for book from Martin Rees. Give him a copy of this book.

Liquidity of the labor market Liquidity in the love, housing, governing markets. How many times have I heard: I was so much better off working at this company rather than this on. Yet you decided to quit your job and get you salary adjusted...

Capitalism vs. communism: central planning Capitalism vs. communism: individual capital The goods and bads of individual ownership, state ownership and well distributed ownership. Capitalism vs. communism. Government spending is intended to be equal amongst it population. The ratio of government ownership vs. private ownership is what distinguishes. Parameters: taxation of labor taxation of capital gains taxation of capitals themselves

What is interesting here is that the taxation of capital by the government is not well accepted by the public, but the taxation of capital gains is. So, in theory, rich persons can remain rich forever. It would be fairer, shall we say to tax capitals somewhat, not just capital gains to render the equality in access to wealth in the long-run. This is particularly important since having significant funds allows one to make much more interest than a small investor can. A small capital tax could be a solution to this problem.

Even now there is a small hidden tax on capital, which is inflation and GDP growth per capita. Since the government does not allow you to deduct inflation from your capital gains, you can actually lose wealth even though you are getting interest from you capital. For example, if inflation is 3% for a given year, and you get 5% interest from government bonds, and say capital tax is 50% at your income level, you are infact only getting 2.5% interest, which is less that the inflation level. Even if government was to allow you to deduct the inflation from your capital before taxing you (in the last example, you would only have been taxed 1%), another factor also dilutes individual wealth: as the GDP per capital grows, total wealth also grow proportionately. To keep you share of the pie, the gains returned by your investments must at least match the grow of GDP per capita. This forces you to get inflation adjusted interest that match the GDP growth, thus forces you to get taxed. Both the affect of inflation and grow of GDP per capita are the hidden capital tax already present in today's fiscal rules. The government has three way of increasing this social tax: by taxing capital gains more, by creating inflation and by increasing GDP per capita.

Labor, on the other hand, is produced, sold and consumed instantly, meaning that it will always be inflation adjusted (quickly if the labor market is liquid, and more slowly in highly unionized labor markets).

You should write a section about investment sector growth and security. Especially on security: housing market, stock market, money. What can devalue each? Money, central banking, and interest rates: what controls the total amount of money in circulation? - Taxes that are not spent, not a good way (-) - Government deficit, not a good way (+) - Emission of bond (- at first, then +) - Government loans (+ at first, then -) Interest rates are more like half lives of elements: they should be expressed in time to double.

Less Structured Ramblings
The health care system is grossly mismanaged: services should be privatized and research nationalized.

Bank accounts should be managed by the government and you should be able to borrow (with collateral)/invest at the fed funds rate (taux direteur).

Inflation should be maintained at a higher rate than 2% in order to allow the adjustment of wages in economic downturns, thus making the labor market inherently more liquid.

Minimum wages & welfare prevent occidental country from competing with lower cost labor in other markets.

Can the government make markets less volatile by providing only 10% of the supply? Petro canada is a good example of if this works or not.

Banks should present investment products to customers using inflation or GDP growth per capital normalization. There is a huge difference between a 3% and a 4% investment when inflation is at 2.5%. Most people don't realize this.

A simple rule: if you are not screwing your insurance company, then they are screwing you. Only, when you do it, it is deemed illegal.

Pourquoi attendre demain quand on peut le faire aujourd'hui? What a stupid quote! 30 day warrantees are a good counter example though.

Tom dit: "There is are only two optimal laborer schedules: 80 hours a week and 0 hours a week. Anything else is a compromise."

Much debated on stock market speculation. Is speculation bad in of itself or is it just volatility that is bad (for example, oil prices and day trading).

Long term bonds are more expensive than (pay more interest) than shortterms bonds on average. Why is that? Tom thinks variance is bad with equal average. Why does the government emit longterm bonds if they are more expensive? Does the gov need to hedge its own financing?

The whole taxation system should be reworked to tax spending of money by consumers (like a sales tax), rather than the earning of money by consumers. This is the equivalent of the no-contribution limit RRSP.

Perhaps "assurance emploi" and RRQ could both be replaced with a rainy day type RRSP account, in which you have to contribute x% of your income/spending. The account fills up to a certain amount, at which point you no longer have to contribute. The funds must be placed in secure investments, and can only be used when you need them (i.e. your spending is low). The funds would not be usable for rich people (since they spend too much).

Today, the role of government is to offer social insurance to its citizens (health care and various other insurance products, and to offer them a good economy in which to work (education and physical infrastructure). Taxation and bonds have been the two fund sources for such activities. Taxation in particular is a hypocritical system that has so many loopholes (namely migration of rich folk) that it no longer really achieves the social justice that it set out to get. Rather than just hiding with our heads in the sand, the government should reform had taxes are perceived and how they are redistributed.

The entire taxation system should adapt well (seemlessly) to inflation. Removing the concept of time from the taxation system is essential for it simplicity. A non-time varying flat tax provides the simplest socialist form of time independent taxation.

Is demographic insurance a form of discrimination or a form of socialism? Should socialism concentrate on insurable risks (i.e. risks with a very large number of events?). Demographic insurance does not qualify. Perhaps tax rates and programs should be split by age group, since this division is much more fair in terms of insurance.

Apparently I was right and interests paid to banks represent 3-4% of occidental GDP: a huge amount!

The fact that there is no tax applied to services rendered to yourself (i.e. housekeeping plumbing, etc) prevents economic optimization by specialization of labor. This reduces GDP artificially, and is one of the perverse effects of non-fixed amount taxation.

Anti-insurance. Companies could offer product similar to Christmas basket or retirement savings automatic withdraw for self-insurable things. This allows people to be self insured for welfare and unemployment, yearly dentist checkups. It is a form of insurance that has you wanting to not go to the dentist when you don't really need to, since you will need to refill your self insurance account. It also allows prices for services to go below what insurance companies cover, avoiding price fixing.

High inflation increases job security by allowing companies to easily reduce wages without firing anyone. This affects credit by making moderate debt less likely to default, but very high debt more likely to default (as wages adjust more easily to the economic cycle).

Belair Direct's zero deductable insurance commercial is a good example of how people don't understand that the deductible is easily self insurable.

Charlemagne - Apr 20th 2006 “WHAT do you expect from life—full coverage against all possible risks?” Yes, seems to be the Europeans' reply, just as it was Philip Marlowe's when he was mockingly asked that question at the end of Raymond Chandler's “The Long Goodbye”.

The importance of the liquidity of labor market and fast education. If the government was to spend a significant amount on health care services, the bulk of the spending would go to increase the work hours of current health professionals (possibly reducing the work load of their husbands). A better solution would be to accelerate higher education (i.e. become a *.* in only 1 year rather than 4-7 years). This can be achieved by limiting upper education to a "tronc-commun" type schooling, giving employers proper selection criteria upon hiring. The bulk of the knowledge would be acquired on the job rather than in upper education. Such an advantage in labor liquidity helps relocate the best resources in the economy by allowing short reeducation and classification on the work force (who would sign-up for a 4 years program at age 35???).

More focus should be given to improve the yearly GDP increase every year. This means heavily investing in research and technology, where the bulk of the progress is made (not in offering medical services). Thus, sending the smartest students to Med School is horrible optimization.

I have not yet figured out clear what the benefits of vertical integration are. What is the trade off? Should a company sell is base technology, or keep it and sell a product higher up in the food chain? Audiocodes and Ditech are an example. Better yet, you find way to predict the weather 10 days in advance (rather than 2 days as it is today). Do you make this information generally available for free, sell it at a price, or use investor psychology to make a fortune on Wallstreet by buying options ~10 days prior to their excercise date when the market will be up due to weather in 10 days?

What is the real value of an option? An option granted at market value has not fiscal implication, yet inflation is enough to redistribute the ownership of a company (let alone run of the mill GDP grow), thus giving it a measurable positive value.

Serenditpity effect (getting a 10% raise on a 500$/day salary gives you less satisfaction as winning 100$ at the lottery for some reason). And various other examples: the movie "Serenditpity", my flight from Paris from Phili where I talked to a French speaking person (which would not have happen on a Montreal to Paris trip), when a song that you own plays on the radio/in a bar you appreciate it more than when you play it yourself.

Humans consume all available resources in the execution of projects (and more!).

Salaries of the worst and best employee only vary by 30% because of the unknown/average quality at employment time. Salaries are maintained as such because of "anciennete" and because people can't conceive of anyone being better than them by more that 15%. The good old, I have great visibility in how people are less good than I am, but poor visibility on how much better they are. Can give the PG/Tom/Martin example for vflat.

Dividends are not in the interest of CEOs if these have a large number of options which they can't sell prior to returning dividends. This effect is direct and measureable, as opposed to under-water options and high risk taking. The effect is also very leveraged in large corporations, since options will only be a few percentage points over their strike price (in startup they are usually many multiples of their strike price, or way under!). Also, options are not emit by the company, which makes them particularly vulnerable to stock emissions and stock buy backs (since these are severely leveraged instruments, they are much more affected by inflation and emissions and buy backs of shares, thus they should only be stated in real terms and as a percentage of ownership).

Do people become more materialistic with age? Give the "reve d'enfant" example.

Grapes on desert island example of adult not wanting to wait for much pleasure in a long time (you eat the graps in 5 minutes rather than planting them and getting wine in 2-3 years time). Bear has a much lower discount rate, since barley is much less taisty than grapes, and you can get beer in less than 6 months.

Accumulated bad connotation of terms over you life: alchimie, synergy (Kal), Radiohead (Kar). Thank god we die eventually.

How much is choosing your exit time worth? What is the curb of higher yield at same average returns with more variance.

I should give out paperback copies of a book, rather than business cards (in all circumstances), since books are larger (thus much more difficult to forget or lose), and people have a terrible aversion to throwing out books (I thinks various fascist regimes are to be thanks for this psychological barrier).

People have a tendancy to link things that are not really related. Sometime this is a results of past correlation (scores of teams playing on television varying based on couch position). In other situations (like stock options and share classes), its is just a mistake.

In business investment, significant time elapses between getting a loan and making revenue from the invested capital. High inflation causes a false sense of reduced cash flow, since capital and interest payments usually start immediately after the loan is contracted. Taking a larger loan to make initial payments should compensate for this directly.

Since business loans are considered more risky than a morgage, their interest rate is higher than the money market's interest rate. Thus businesses taking a loan but not spending it immediately are at a disadvantage since the unspent balance can only make money market interest. A credit line is a more convinient vehicle for business loans.

Yesterday, I was having lunch with P,T,S, when we had a good long debate about education. P said that he badly optimized his schooling years by doing the minimum possible in order to get passing grades and to be accepted into higher education. This was in part due to the fact that his father had this opinion and hit him over the head with it often. It is also due to the fact that P found that he wasted much time in school, accomplishing nothing. Given that P had no way to accelerate his education (ETA to an undergraduate degree is 23 years no matter what), and that what he learnt in school was generally not applicable to the line of work that he chose, passing "sur le cul" was the best way to optimize his time. Ironic, no?

I was reading an article today about education in the developing world. Apparently a shortage of teachers is one of the causes. As in nuclear fission, it should be possible to inject one teacher/book in a room full of students, have a subset of the students learn about the subject, and then teach it to other students. There may be many benifits to this system. Firstly, the person in a good position to teach on a subject is the person that has just learn the subject (and still relates to someone who does not understand it). Secondly, this method is much cheaper. Third, a teacher never wants his students to be able to show that he is not competent, so students would have severe peer presure to know their material. Thirdly, it would be very very cheap.

At the Objectivist club yesterday, Tom really summerized it well: [research, analyze and] optimize. That's what we do. That's what's fun.

O* should use a wiki to provide customers with part documentation. This wiki should allow customers to change or improve the documentation themselves. Customers should be allowed to create new accounts in limited numbers, like gmail. An easy way is to send an email to x friends and to newaccounts@o.com; o.com returns an email asking for login approval for new accounts and creates them. Creating many accounts is painless. A rights inheritance graph can be created allowing users to grant other users rights to view or edit pieces of wiki (a gmail count for each right). Wikis are significantly limited because claris and excel are not integrated (with flawless change control).

An Post seems to do most of what I would want to implement in canada's banking services.

Making a united intercountry health file for a user will take forever. Perhaps the best way to offer such a service now is to store with OCR and a portable scanner (your cell phone) onto a central server (wikipedia/gmail) all documents that you read/sign. Documents can be saved by date and location. I'm not sure if a high definition camera is a good way to capture then information.

We should perhaps replace the senate with the HOP (house of ordinary people). This would likely limit corruption required to reach power positions.

High profile cases tend to get juries with very little general knowledge (i.e. dumb/secluded) since everyone who follows the news knows about cases in advance.

The money multiplier is an outdated concept that should be removed from the financial system, as bad loans are far more dangerous than bank runs (today). If banks never default, the current "fed funds rate" system works well. Since banks do default at some low rate and are bailed out by the government when this happens, the collateralless "fed funds rate" system forces all loans to pay for bank default insurance equally (this amount is hidden in the "fed funds rate"). That means the extra risk caused by banks loaning to leveraged investors are mostly paid by lower risk loans (ie. loans with collateral/morgages). Private equity leveraged buyouts are a good example of people taking advantage of this situation.

Using CPI to adjust interest rates seems to work poorly in a global economy. Perhars the gap between national wage increases and national productivity increases is a better measure. It at least separates deflation due to techonology improvements from affecting interest rates by not cancelling out actual wage inflation.

Proof that organized religion is likely wrong sits in the existance of many religion to which alegeance is chosen geographycally (by birth location) most of the time. Proof that God does not have human values lies in evolution: the value set of humans has changed genetically over the last 5 M years, and will continue to change. Humans were not around for ~1B years of interesting life on Earth. Shouldn't have God cared about the well being of other living creature (others than current day humans!)? If so, many of the human values that we have are systematically violated in nature.

Scrap provinces; government should be divided by age group, with bonds emit by age group. This prevents the abuse of political control in transfering asserts and liabilities between generations (pensions, medicare and education subsidies in particular). Some things still need central planning and central taxation, and don't fit well in this model: national defense, law, "free" common infrastructure (somewhat like roads), R&D tax credits, corporate taxes, allocation of crown resourcse (i.e. sales of land).

Now I like the Yen. It would seem that the canadian government does not tax capital gains currency speculation. So instead of giving half of 4% of interest to the government in income tax yearly, I should just hold Japanese bonds at 0% interest a year, and wait for the Yen's value to appreciate vs. the Canadian dollar. Its is that easy! Likewise, investing in Argentia's dollar yields a huge tax burden. That does really make any sense, does it? The capital gains would have to be taxed as interest for this thing to balance out.