Category Archives: Topical

Includes posts on physics, philosophy, sciences, quantitative finance, economics, environment etc.

Life and Death, Philosophy, Topical

Does the World Go on?

Notwithstanding the certain rupture in the continuity of consciousness due to death, or a less certain rupture in that of a soul, we have another uninterrupted flow — that of life and of the world. This flow is the end result of a series of projections and perhaps the work of our mirror neurons. Let me explain. We know that the world doesn’t stop just because someone dies. Most of us middle-aged folks have lost a loved one, and, for all the grief, we know that life went on. So we can easily see that when we die, despite all the grief we may succeed in making our loved ones feel through our sheer good deeds, life will go on. Won’t it?

It is our absolute certainty about this continuity that prompts us to buy huge life insurances, and somewhat modulates the risk-reward analysis of our moral actions. I am not going to deny the existence of this continuity, tempted though I am to do just that. I merely want to point out certain facts that may prevent us from accepting it at its face value. The evidence for the world going on after our death is simple, too simple perhaps: We have seen people die; but we live on. Ergo, when we die, other people will live on. But you see, there is a profound difference between somebody else’s death and your death. We are thinking of death as the end of our consciousness or mind. Although I loosely group your mind and my mind as “our” mind in the previous sentence, they are completely different entities. In fact, a more asymmetric system is hard to imagine. The only mind I know of, and will ever know of, is my own. Your mind has an existence only in mine. So the demise of my mind is literally the end of your mind (and indeed all minds) as well. The world does come to an end with my death, quite logically.

This argument, though logical, is a bit formal and unconvincing. It smacks of solipsism. Let’s approach the issue from a different angle. As we did earlier in this essay, let’s think of death as dreamless slumber. If you are in such a state, does the world exist for you? I know the usual responses to this question: Of course it exists; just because you cannot feel it, doesn’t mean that it doesn’t exist. You know it exists, and that is enough. Now, who is this you that knows?

Therein lies the real rub. Once you cease to have a consciousness, be it thanks to sleep or death, you lose the ability to experience everything, including the existence of anything (or lack thereof). Now, we can take the normal approach and just assert that things have an existence independent of your experiencing it; that would the natural, dualistic view — you and everything else, your experiences and their physical causes, cause and effect, action and reaction, and so on. Once you begin to doubt the dualistic worldview and suspect that your experiences are within your consciousness, and that the so-called physical causes are also your cognitive constructs, you are on a slippery slope toward another worldview, one that seriously doubts if it makes any sense to assert that the world goes on after your death.

The world is merely a dream. What sense could a dead man’s dream possibly make?

Life and Death, Philosophy, Topical

Primal Soul

One simple way of reinstating an absolute form of morality (as opposed to a relative, risk-reward kind) is to postulate continuity beyond death. The notion of a “soul,” as proposed in almost all religions, serves this purpose. Soul is also the substantive (albeit ethereal) representation of the otherwise elusive consciousness of ours, which is an entity that has no right to exist or be real because it fails all possible tests for real existence, yet is supremely real to each one of us. In fact, consciousness is more than real, it is the arena in which our reality plays out its act. It is so fundamental to our experience and existence that we have a hard time accepting its ephemerality.

I, for one, believe logically that when I die, everything I will have known and experienced till then will just disappear. I believe that death is like an eternal dreamless sleep. Logically. But logic has very little to do with what I can feel and accept, emotionally. I don’t like to drag in the concept of “emotion” here; I am thinking of what I can accept at a gut-level. “Primally” would perhaps be a better word to use, but I am not sure. Any way, once we have conscious awareness, and develop a sense of temporal continuity about things and experiences around us, we cannot help assigning continuity to the backdrop of it all — our consciousness. Continuity of selfhood is encoded into our mind. Primally — yes, that would be the right word.

Logic and rationality, which come after the primal plumbing of the mind, consciousness, selfhood etc. (which may all ultimately mean the same thing) is already in place, can influence our thinking only to a limited extent. Mind grasps at anything that offers a semblance of eternal continuity. Enter religions.

All conventional religions have some notion of a “soul,” which comes in different forms and with a multitude of meanings and contexts, although, logically, it can only mean our consciousness, or an entity holding our consciousness and pretty much nothing else. Thanks to our primal need to search and find continuity, we readily buy into whatever notion of soul our parents’ religion happens to uphold, ignoring the gaping holes in logic associated with it. From the perspective of religions (speaking of religions as organizational entities with intentions and purposes), the notion of continuity implied in the concept of a soul has a great benefit — it completely alters the risk-reward analysis at the root of morality. And it takes out death (or at least, greatly diminishes its significance) in the analysis. For death is only the beginning, as the horror-comedy taught us.

If the wages of sin are eternal third-degree burns, not some material comfort followed by thirty-to-life in a federal facility till death sets you free, you do think twice before doing the crime. The “time” that you may have to do could well be an eternity. Other religions offer other kinds of divine carrots and sticks. For instance, if you are a Hindu engaged in a particularly unsavory Karma, you will reincarnate as somebody (or something) on the receiving end of the stick, roughly neutralizing your risk-reward equation. On the other hand, if you are willing to take it on your chin with some amount of fortitude, you will be upgraded to business class in your next life.

In all notions of spiritual continuity of consciousness, and/or soul, there is something I find logically wanting. It is the lack of continuity of memory. Death is still a point of phase transition where all the existing memory is erased. If we think of soul as the eternal manifestation of mind and consciousness, erasing its memory is as good or as bad as killing it, is it not?

What I find interesting in this Hindu notion is that the ultimate reward for presumably the best possible Karma is not an eternal life of comfort in heaven, but a release from the cycle of reincarnations, which, in my view, is similar to an eternal dreamless sleep — which is the only logical notion of death we can scientifically entertain. So, in the Hindu notion of the reward for ultimate good is, in some sense, the ultimate death. Makes me wonder…

Life and Death, Philosophy, Topical

From Here to Eternity

The temporal aspect of punishment extends beyond the span between the crime and its punishment. The severity of the punishment is also measured in terms of its duration. And death puts a definitive end to all man-made durations. This interference of death in our temporal horizons messes up what we mean by proportional punishment, which is the reason behind the general lack of gratification on Madoff’s long sentence. If a heinous crime like a senseless murder brings about only a life-sentence, and if you know that “life” means only a couple of months or so, then the punishment in and of itself is incapable of deterring the crime. And when the crime is not as senseless, but prompted by careful material considerations, it is a deliberate risk-reward analysis that determines its commission. A comprehensive risk-reward analysis would involve, I imagine, a consideration of the probability of detection, the intensity and duration of the potential punishment, and the time one has to enjoy the spoils and/or suffer the punishment. There may be other factors to consider, of course. I wouldn’t know because I haven’t actually done such analyses. Not yet.

The smallpox story I mentioned earlier brings these considerations to the foreground, along with how the relatively high probability of death from the disease affects them. Knowing that there isn’t much time to enjoy life (or face the music), two older gentlemen of the story decide to go and feast themselves on a local prostitute of the village whom they have been eying for a while. It is not that the consequences (spousal anger, bad diseases etc.) of their action have changed. Just that their potential duration has decreased drastically because of the outbreak of smallpox. Knowledge of our death has a dramatic effect on our moral inhibitions born out of risk-reward analyses.

It is in this light that we have to examine clichéd statements like, “Live in the present moment,” or “Live everyday as though it is your last.” What do these statements really mean? The second one is especially interesting because it makes a direct reference to death. Is it asking us to shed our inhibitions vis-à-vis all our actions? If so, it may not be such a positive invitation (which, of course, is a statement of value-judgment emanating form a sense of a morality of unknown origins). Or it could be a simple exhortation not to procrastinate — a positive thing by the same uncertain morality.

“Living in the present” is even more puzzling. I guess it comes from the Zen notion of “here” and “now.” I can kind of understand the Zen notion in terms of cognitive neuroscience, although that is the sort of thing that Zen would ask us not to do — understanding one thing in terms of something else. According to the Zen school, an experience has to be assimilated before the intellect has a chance to color it in terms of preconceived notions and filters. In the absolute stillness of a mind, presumably brought about by years of introspection and intense mediation, experiences take on perceptually accurate and intellectually uncolored forms, which they say is a good thing. If the statement “Live in the present moment” refers to this mode of experiencing life, fine, I can go with that, even though I cannot fully understand it because I am not a Zen master. And if I was, I probably wouldn’t worry too much about logically understanding stuff. Understanding is merely a misguided intellectual exercise in futility.

As a moral statement, however, this invitation to live in the present moment leaves much to be desired. Is it an invitation to ignore the consequences of your actions? You compartmentalize your timeline into a large past, a large future and tiny present. You ignore the past and the future, and live in the present. No regrets. No anxieties. What else could this slogan “Live in the present moment” mean?

Life and Death, Philosophy, Topical

Why Should I Be Good?

Knowledge of death is a sad thing. Not as a general piece of information, but in as applied to a particular individual. I remember only too vividly my own sense of helplessness and sadness towards the end of my father’s life, when it became clear to me that he had only a few weeks left. Until then, I could never really understand the grief associated with death of a loved one, given the absolute certainty and naturalness of death. In fact, I couldn’t understand my own grief and often wondered if I was romanticizing it, or feeling it because it was expected of me.

It is very difficult to know people, even ourselves. There are multiple obscuring levels of consciousness and existence in our inner selves. And we can penetrate only a limited number of them to see within ourselves. Therefore I find myself doubting my grief, despite its directly perceived realness and existence. Perhaps the grief arising from the loss of a loved one is so primal that we do not need to doubt it; but I cannot help doubting even the most obvious of feelings and sensations. After all, I am the dude who goes around insisting that reality is unreal!

The “loss” of a hated one, by virtue of its mathematical symmetry, should generate something like the opposite of grief. The opposite of grief is perhaps glee, although one is too civilized to let oneself feel it. But seriously, I once heard a stress reduction expert mention it. He said, “What if your boss stresses you out? Imagine, end of the day, he also will be dead!”

Yes, the fact that we will all die is a serious social and moral problem. How much of a problem it is is not fully appreciated due to the taboo nature of the subject. I once read a novel in Malayalam describing a village in the sixties ravaged by smallpox. Some parts of this novel illustrated the connection between death and morality. You see, morality is such a holy cow that we cannot examine it, much less question it, without being called all sorts of bad names. Being “good” is considered a “good” thing, and is taken to be beyond rationalization. I mean, we may ask questions like, “What is good?”, “What makes something good, something else bad?” etc. But we cannot realistically ask the question, “Why should I be good?” Being good is just good, and we are expected to ignore the circularity in this statement.

For a minute, let’s not assume that being good is good. I think the knowledge of imminent death would make us shed this assumption, but we will get to it later. For now, let’s think of morality as a logical risk-reward calculation, rather than a god-given axiom. If somebody proposes to you, “Why don’t you shoot to be a drug dealer? [Pun attempted] Good money there…,” your natural reaction would be, “Drugs kill people, killing people is bad, no way I am getting into it.” Now, that is a moral stance. If you were amoral, you may think, “Drug dealing involves violence. There is a good chance that I will get shot or caught. Thirty to life in a federal penitentiary is no walk in the park. No way I am getting into it.” This is a risk-reward analysis, but with the same end result.

I put it to you that the origin of most of our morality is this risk-reward analysis. If it wasn’t, why would we need the police and the criminal justice system? It is this risk-reward analysis that can get skewed because of an impending death, if we let ourselves notice it. You see, the concept of crime and punishment (or action and consequence, to be value-neutral) is not so simple, like most things in real life. To be a deterrent, the severity of punishment has to be proportional, not only to the foulness of the crime, but also to the probability of its detection. For instance, if you know that you will get caught every single time you speed, speeding tickets need not cost you thousands of dollars — a couple of dollars will do the trick of discouraging you from speeding. Such minuscule punishments do exist for little “crimes.” In public toilets, leaving the shower or sink faucet running would be a small crime because it wastes water, and the landlord’s funds. To fight this crime came spring-loaded faucets that shut themselves down after ten or 15 seconds. So you get “caught” every time you try to leave the water running, but the “punishment” is merely that you have to push the release button again. Now we have faucets with electronic sensors with even shorter temporal horizons for crime and punishment.

The severity of a pain is not merely its intensity, but its duration as well. Given that death puts a definitive end to our worldly durations, how does it affect our notion of punishment commensurate with crime? My third post on the philosophy of death will examine that aspect.

Life and Death, Philosophy, Topical

The Taboo Topic

Death is a taboo subject. We are not supposed talk about it, or even think about it. It is almost like if we did, death might take notice of us, and we can do without that kind of attention. If we want to be inconspicuous anywhere at all, it is in front of Death.

I have been watching Six Feet Under recently, which is probably behind these musings on death. I am curious though — why is the topic of death such a taboo, despite its natural inevitability? I don’t mean the superstitious kind of taboo (“No, no, no, you are not going to die any time soon, touchwood!”), but the intellectual kind. The kind of chill that comes about if you try holding a conversation about it over a beer or at a dinner table. Why is death such a taboo?

To say that we are just scared of death is a bit of an oversimplification. Sure we fear death, but we fear public speaking more, but we can still talk about the latter. We have to find the reason for the special tabooness of death elsewhere.

One thing special about death is that it is a great equalizer — a fact almost too obvious to appreciate. Everybody dies — regardless of whatever else they do in their lives. Perhaps this ultimate leveling of the field may be a bit distressing to the more competitive among us. However high we soar, or however low we sink, at the end of our days, the score is all reset and the slate is wiped clean.

This slate-wiping business also is troublesome for another reason. It is so damn permanent. Its permanence has an aspect never present in any other kind of pain and suffering we go through (including public speaking). One of my personal techniques to handle minor aches and pains (such as a root canal, or even deeper wounds like the loss of a loved one) is to make use of just this lack of permanence. I remind myself that it is going to pass, in time. (For some strange reason, I do this in French, “Ça va pas tarder,” although, to be correct, I think I should be telling myself, “Ça va pas durer.”) I even shared this technique with my son when he broke his arm and was in excruciating pain. I told him that the agony would soon abate. Well, I said it using different words, and I fancy the little fellow understood, although he kept screaming his head off.

We can handle any “normal” pain by just waiting it out, but not the pain of death, which lasts for ever. Ça va durer. Is this permanence behind our fear of it? Perhaps. With absolute permanence comes absolute imperviousness, as any Spiderman fan would appreciate. What lies beyond death is unknown. And unknowable. Despite all the religions of the world telling us various mystical things about what lies beyond (you know, like heaven and hell, Karma and reincarnation etc.), nobody really believes it. I know, I know, some may honestly insist that they really really do, but when push comes to shove, at an instinctive, gut level, nobody does. Not even the ones who are certain that they will end up in heaven. Why else would holy men have security details? In Of Human Bondage, Maugham caricatures this strange lack (or impossibility) of real faith vis-à-vis death in his portrayal of the last days of the Vicar of Blackstable.

To live with any sense of purpose, I think we have to ignore death. A finite span of existence is just absurd at multiple levels. It makes all our lofty goals and ideals absurd. It makes our sense of good and evil absurd. It makes whatever we think of as the purpose of life absurd. It even makes the modest purpose of life proposed in the DNA-based evolutionary explanation (that we just want to live a little longer) absurd, for any finite increment in our life span is essentially zero when compared to the infinity of time, as the nerdy ones among us would readily appreciate. In short, there is only one real problem with life, which is death. Since we cannot avoid dying and paying taxes, may be we can avoid thinking and talking about it — a plausible reason behind the taboo nature of the topic of death.

Columns, Corporate Life, Quantitative Finance, The Wilmott Magazine, Topical, Work and Life

In Our Defense

The financial crisis was a veritable gold mine for columnists like me. I, for one, published at least five articles on the subject, including its causes, the lessons learned, and, most self-deprecating of all, our excesses that contributed to it.

Looking back at these writings of mine, I feel as though I may have been a bit unfair on us. I did try to blunt my accusations of avarice (and perhaps decadence) by pointing out that it was the general air of insatiable greed of the era that we live in that spawned the obscenities and the likes of Madoff. But I did concede the existence of a higher level of greed (or, more to the point, a more sated kind of greed) among us bankers and quantitative professionals. I am not recanting my words in this piece now, but I want to point out another aspect, a justification if not an absolution.

Why would I want to defend bonuses and other excesses when another wave of public hatred is washing over the global corporations, thanks to the potentially unstoppable oil spill? Well, I guess I am a sucker for lost causes, much like Rhett Butler, as our quant way of tranquil life with insane bonuses is all but gone with the wind now. Unlike Mr. Butler, however, I have to battle and debunk my own arguments presented here previously.

One of the arguments that I wanted to poke holes in was the fair compensation angle. It was argued in our circles that the fat paycheck was merely an adequate compensation for the long hours of hard work that people in our line of work put in. I quashed it, I think, by pointing out other thankless professions where people work harder and longer with no rewards to write home about. Hard work has no correlation with what one is entitled to. The second argument that I made fun of was the ubiquitous “talent” angle. At the height of the financial crisis, it was easy to laugh off the talent argument. Besides, there was little demand for the talent and a lot of supply, so that the basic principle of economics could apply, as our cover story shows in this issue.

Of all the arguments for large compensation packages, the most convincing one was the profit-sharing one. When the top talents take huge risks and generate profit, they need to be given a fair share of the loot. Otherwise, where is the incentive to generate even more profits? This argument lost a bit of its bite when the negative profits (by which I indeed mean losses) needed to be subsidized. This whole saga reminded me of something that Scott Adams once said of risk takers. He said that risk takers, by definition, often fail. So do morons. In practice, it is hard to tell them apart. Should the morons reap handsome rewards? That is the question.

Having said all this in my previous articles, now it is time to find some arguments in our defense. I left out one important argument in my previous columns because it did not support my general thesis — that the generous bonuses were not all that justifiable. Now that I have switched allegiance to the lost cause, allow me to present it as forcefully as I can. In order to see compensation packages and performance bonuses in a different light, we first look at any traditional brick-and-mortar company. Let’s consider a hardware manufacturer, for instance. Suppose this hardware shop of ours does extremely well one year. What does it do with the profit? Sure, the shareholders take a healthy bite out of it in terms of dividends. The employees get decent bonuses, hopefully. But what do we do to ensure continued profitability?

We could perhaps see employee bonuses as an investment in future profitability. But the real investment in this case is much more physical and tangible than that. We could invest in hardware manufacturing machinery and technology improving the productivity for years to come. We could even invest in research and development, if we subscribe to a longer temporal horizon.

Looking along these lines, we might ask ourselves what the corresponding investment would be for a financial institution. How exactly do we reinvest so that we can reap benefits in the future?

We can think of better buildings, computer and software technologies etc. But given the scale of the profits involved, and the cost and benefit of these incremental improvements, these investments don’t measure up. Somehow, the impact of these tiny investments is not as impressive in the performance of a financial institution compared to a brick-and-mortar company. The reason behind this phenomenon is that the “hardware” we are dealing with (in the case of a financial institution) is really human resources — people — you and me. So the only sensible reinvestment option is in people.

So we come to the next question — how do we invest in people? We could use any number of euphemistic epithets, but at the end of the day, it is the bottom line that counts. We invest in people by rewarding them. Monetarily. Money talks. We can dress it up by saying that we are rewarding performance, sharing profits, retaining talents etc. But ultimately, it all boils down to ensuring future productivity, much like our hardware shop buying a fancy new piece of equipment.

Now the last question has to be asked. Who is doing the investing? Who benefits when the productivity (whether current or future) goes up? The answer may seem too obvious at first glance — it is clearly the shareholders, the owners of the financial institution who will benefit. But nothing is black and white in the murky world of global finance. The shareholders are not merely a bunch of people holding a piece of paper attesting their ownership. There are institutional investors, who mostly work for other financial institutions. They are people who move large pots of money from pension funds and bank deposits and such. In other words, it is the common man’s nest egg, whether or not explicitly linked to equities, that buys and sells the shares of large public companies. And it is the common man who benefits from the productivity improvements brought about by investments such as technology purchases or bonus payouts. At least, that is the theory.

This distributed ownership, the hallmark of capitalism, raises some interesting questions, I think. When a large oil company drills an unstoppable hole in the seabed, we find it easy to direct our ire at its executives, looking at their swanky jets and other unconscionable luxuries they allow themselves. Aren’t we conveniently forgetting the fact that all of us own a piece of the company? When the elected government of a democratic nation declares war on another country and kills a million people (speaking hypothetically, of course), should the culpa be confined to the presidents and generals, or should it percolate down to the masses that directly or indirectly delegated and entrusted their collective power?

More to the point, when a bank doles out huge bonuses, isn’t it a reflection of what all of us demand in return for our little investments? Viewed in this light, is it wrong that the taxpayers ultimately had to pick up the tab when everything went south? I rest my case.

Columns, Life and Death, Quantitative Finance, Unpublished

Food Prices and Terrible Choices

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Economists have too many hands. On the one hand, they may declare something good. On the other hand, they may say, “well, not so much.” Some of them may have even a third or fourth hand. My ex-boss, an economist himself, once remarked that he wished he could chop off some of these hands.

In the last couple of weeks, I plunged right into an ocean of economist hands as I sat down to do a minor research into this troubling phenomenon of skyrocketing food prices.

The first “hand” pointed out that the demand for food (and commodities in general) has surged due to the increase in the population and changing consumption patterns in the emerging giants of Asia. The well-known demand and supply paradigm explains the price surge, it would seem. Is it as simple as that?

On the other hand, more and more food crops are being diverted into bio-fuel production. Is the bio-fuel demand the root cause? Bio-fuels are attractive because of the astronomical crude oil prices, which drive up the prices of everything. Is the recent OPEC windfall driving the price hikes? What about the food subsidies in wealthy nations that skew the market in their favour?

Yet another economics hand puts the blame squarely on the supply side. It points an unwavering finger at the poor weather in food producing countries, and the panic measures imposed on the supply chain, such as export bans and smaller scale hoarding, that drive up the prices.

I’m no economist, and I would like just one hand, one opinion, that I can count on. In my untrained view, I suspect that the speculation in commodities market may be driving the prices up. I felt vindicated in my suspicions when I read a recent US senate testimony where a well-known hedge fund manager, Michael Masters, shed light on the financial labyrinth of futures transactions and legal loopholes through which enormous profits were generated in commodity speculation.

The real reasons behind the food crisis are likely to be a combination of all these factors. But the crisis itself is a silent tsunami sweeping the world, as the UN World Food Program puts it.

Increase in the food prices, though unpleasant, is not such a big deal for a large number of Singaporeans. With our first world income, most of us spend about 20% of our salary on food. If it becomes 30% as a result of a 50% increase in the prices, we certainly won’t like it, but we won’t suffer that much. We may have to cut down on the taxi rides, or fine-dining, but it is not the end of our world.

If we are in the top 10% of the households, we may not even notice the increase. The impact of the high food prices on our lifestyle will be minimal — say, a four-star holiday instead of a five-star one.

It is a different story near the bottom. If we earn less than $1000 a month, and we are forced to spend $750 instead of $500 on food, it may mean a choice between an MRT ride and legging it. At that level, the increase in food prices does hurt us as our grim choices become limited.

But there are people in this world who face a much harsher reality as the prices shoot up with no end in sight. Their choices are often as terrible as Sophie’s choice. Which child goes to sleep hungry tonight? Medicine for the sick one or food for the rest?

We are all powerless against the juggernaut of market forces creating the food crisis. Although we cannot realistically change the course of this silent tsunami, let’s at least try not to exacerbate the situation through waste. Buy only what you will use, and use only what you need to. Even if we cannot help those who will invariably go hungry, let’s not insult them by throwing away what they will die yearning for. Hunger is a terrible thing. If you don’t believe me, try fasting for a day. Well, try it even if you do — for it may help someone somewhere.

Columns, Environment, The Today Paper

Human Virus

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On one poignantly beautiful autumn day in Syracuse, a group of us physics graduate students were gathered around a frugal kitchen table. We had our brilliant professor, Lee Smolin, talking to us. We held our promising mentors in very high regard. And we had high hopes for Lee.

The topic of conversation on that day was a bit philosophical, and we were eagerly absorbing the words of wisdom emanating from Lee. He was describing to us how the Earth could be considered a living organism. Using insightful arguments and precisely modulated glib articulation (no doubt, forged by years of intellectual duels in world’s best universities), Lee made a compelling case that the Earth, in fact, satisfied all the conditions of being an organism.

Lee Smolin, by the way, lived up to our great expectations in later years, publishing highly acclaimed books and generally leaving a glorious imprint in the world of modern physics. He now talks to global audiences through prestigious programmes such as the BBC Hardtalk, much to our pride and joy.

The point in Lee’s view was not so much whether or the Earth was literally alive, but that thinking of it as an organism was a viable intellectual model to represent the Earth. Such intellectual acrobatics was not uncommon among us physics students.

In the last few years, Lee has actually taken this mode of thinking much farther in one of his books, picturing the universe in the light of evolution. Again, the argument is not to be taken literally, imagining a bunch of parallel universes vying for survival. The idea is to let the mode of thinking carry us forward and guide our thoughts, and see what conclusions we can draw from the thought exercise.

A similar mode of thinking was introduced in the movie Matrix. In fact, several profound models were introduced in that movie, which probably fuelled its wild box-office success. One misanthropic model that the computer agent Smith proposes is that human beings are a virus on our planet.

It is okay for the bad guy in a movie to suggest it, but an entirely different matter for newspaper columnist to do so. But bear with me as I combine Lee’s notion of the Earth being an organism and Agent Smith’s suggestion of us being a virus on it. Let’s see where it takes us.

The first thing a virus does when it invades an organism is to flourish using the genetic material of the host body. The virus does it with little regard for the well-being of the host. On our part, we humans plunder the raw material from our host planet with such abandon that the similarity is hard to miss.

But the similarity doesn’t end there. What are the typical symptoms of a viral infection on the host? One symptom is a bout of fever. Similarly, due to our activities on our host planet, we are going through a bout of global warming. Eerily similar, in my view.

The viral symptoms could extend to sores and blisters as well. Comparing the cities and other eye sores that we proudly create to pristine forests and natural landscapes, it is not hard to imagine that we are indeed inflicting fetid atrocities to our host Earth. Can’t we see the city sewers and the polluted air as the stinking, oozing ulcers on its body?

Going one step further, could we also imagine that natural calamities such as Katrina and the Asian tsunami are the planet’s natural immune systems kicking into high gear?

I know that it is supremely cynical to push this comparison to these extreme limits. Looking at the innocent faces of your loved ones, you may feel rightfully angry at this comparison. How dare I call them an evil virus? Then again, if a virus could think, would it think of its activities on a host body as evil?

If that doesn’t assuage your sense of indignation, remember that this virus analogy is a mode of thinking rather than a literal indictment. Such a mode of thinking is only useful if it can yield some conclusions. What are the conclusions from this human-viral comparison?

The end result of a viral infection is always gloomy. Either the host succumbs or the virus gets beaten by the host’s immune systems. If we are the virus, both these eventualities are unpalatable. We don’t want to kill the Earth. And we certainly don’t want to be exterminated by the Earth. But those are the only possible outcomes of our viral-like activity here. It is unlikely that we will get exterminated; we are far too sophisticated for that. In all likelihood, we will make our planet uninhabitable. We may, by then, have our technological means of migrating to other planetary systems. In other words, if we are lucky, we may be contagious! This is the inescapable conclusion of this intellectual exercise.

There is a less likely scenario — a symbiotic viral existence in a host body. It is the kind of benign life style that Al Gore and others recommend for us. But, taking stock of our activities on the planet, my doomsday view is that it is too late for a peaceful symbiosis. What do you think?

Columns, Corporate Life, Humor, Philosophy, Quantitative Finance, The Wilmott Magazine

Money — Love it or Hate it

Whatever its raison-d’etre may be, there is a need for more, and an unquenchable greed. And paradoxically, if you want to try to quench a bit of your greed, the best way to do it is to fan the greed in others. This is why the email scams (you know, the Nigerian banker requesting your help in moving $25 million of unclaimed inheritance, or the Spanish lottery eager to give you 67 million Euros) still hold a fascination for us, even when we know that we will never fall for it.

There is only a thin blurry line between the schemes that thrive on other people’s greed and confidence jobs. If you can come up with a scheme that makes money for others, and stay legal (if not moral), then you will make yourself very rich. We see it most directly in the finance and investment industry, but it is much more widespread than that. We can see that even education, traditionally considered a higher pursuit, is indeed an investment against future earnings. Viewed in that light, you will understand the correlation between the tuition fees at various schools and the salaries their graduates command.

When I started writing this column, I thought I was making up this new field called the Philosophy of Money (which, hopefully, somebody would name after me), but then I read up something on the philosophy of mind by John Searle. It turned out that there was nothing patentable in this idea, nor any cash to be made, sadly. Money comes under the umbrella of objective social realities that are quite unreal. In his exposition of the construction of social reality, Searle points out that when they give us a piece of paper and say that it is legal tender, they are actually constructing money by that statement. It is not a statement about its attribute or characteristics (like “This is a glass of water”) so much as a statement of intentionality that makes something what it is (like “You are my hero”). The difference between my being a hero (perhaps only to my six-year-old) and money being money is that the latter is socially accepted, and it is as objective a reality as any.

I conclude this article with the nagging suspicion that I may not have argued my point well enough. I started it with the premise that money is an unreal meta-thing, and wound up asserting its objective reality. This ambivalence of mine may be a reflection of our collective love-hate relationship with money – perhaps not such a bad way to end this column after all.

Photo by 401(K) 2013

Columns, Corporate Life, Humor, Philosophy, Quantitative Finance, The Wilmott Magazine

Money — Why do We Crave it?

Given that the investment value is also measured and returned in terms of money, we get the notion of compound interest and “putting money to work.” Those who have money demand returns based on the investment risk they are willing to assume. And the role of modern financial system becomes one of balancing this risk-reward equation. Finance professionals focus on the investment value of money to make oodles of it. It not so much that they take your money as deposits, lend it out as loans, and earn the spread. Those simple times are gone for good. The banks make use of the fact that investors demand the highest possible return for the lowest possible risk. Any opportunity to push this risk-reward envelope is a profit potential. When they make money for you, they demand their compensation and you are happy to pay it.

Put it that way, investment sounds like a positive concept, which it is, in our current mode of thinking. We can easily make it a negative thing by portraying the demand for the investment value of money as greed. It then follows that all of us are greedy, and that it is our greed that fuels the insane compensation packages of top-level executives. Greed also fuels fraud – ponzi and pyramid schemes.

Indeed, any kind of strong feeling that you have can be bought and sold for personal gain of others. It may be your genuine sympathy for the Tsunami or earthquake victims, your voyeuristic disgust at the peccadilloes of golf icons or presidents, charitable feeling toward kidney patients of whatever. And the way money is made out of your feelings may not be obvious at all. Watching the news five minutes longer than usual because of a natural disaster may bring extra fortune to the network’s coffers. But of all the human frailties one can make money out of, the easiest is greed, I think. Well, I may be wrong; it may actually be that frailty that engendered the oldest profession. But I would think that the profession based on the lucrative frailty of greed wasn’t all that far behind.

If we want to exploit other people’s greed, the first thing to ask ourselves is this: why do we want money, given that it is a meta-entity? I know, we all need money to live. But I am not talking about the need part. Assuming the need part is taken care of, we still want more of it. Why? Say you are a billionaire. Why would you want another billion? I think the answer lies in something philosophical, something of an existential angst, although those with their billions would the last ones to admit it. The reason behind this deep-rooted need for more is a quest for a validation, or a justification for our existence, and a meaning and purpose for our life. It is all part of that metaphorical holy grail. I know, it sounds a bit nutty, but what else could it be? The Des Cartes of our time would say, “I have loads of money, therefore I am!”