When optimization arrives, either others will optimize against you or you will optimize against others. Business against you or you against business. There will be either corporate planning or central planning.

# Author: Ramsi Woodcock

## The Trappings of Wealth

Really rich people have more money than they can consume. Why is it valuable? Investment power. The ability to implement “private” policy. Suppose we think it’s good for the political system to have a group of private parties who can do that. Why do we choose them by the luck of the draw in business? Why not have a lottery every ten years and give a trillion dollars to ten lucky winners? Or elect ten people every ten years, or thirty years, give them the money, and tell them to spend it? Why not choose them a better way?

How interesting that these thoughts have raised Unger’s rotating capital fund (pages 35-36) out of the ocean trenches of my memory!

## Rearranging the Law of Large Numbers

The Law of Large Numbers is completely meaningless to me when it is phrased as “the probability that the sum of results, divided by the number of independent samples, equals expected value gets very high as the number of independent samples goes to infinity.” mu=(sum of ys)/n, in which mu is the expected value, the ys are the results of independent samples, and n is the number of samples. Why should anything converge to the expected value?

But it is very meaningful to me when it is rephrased as “the probability that the expected value times the number of independent samples equals the sum of the results gets very high as the number of independent samples goes to infinity.” mu*n=sum of ys.

Yes, as the number of samples gets high, you know better and better exactly what your aggregate results will be.

As you multiply your expected value by larger and larger sample sizes, expected value goes from being totally fictitious and unhelpful to completely real. If I get $100 with a 50% chance and zero otherwise, it is meaningless to tell me that my expected value is $50. I will never have $50. But if you tell me that I will face this chance 1000 times, then I can tell you with great confidence that I will have $50 times 1000 equals $50,000.

## A Model for Macro

So far we have been discussing the properties of matter from the atomic point of view, trying to understand roughly what will happen if we suppose that things are made of atoms obeying certain laws. However, there are number of relationships among the properties of substances which can be worked out without consideration of the detailed structure of the materials. The determination of the relationships among the various properties of the materials, without knowing their internal structure, is the subject of

thermodynamics. Historically, thermodynamics was developed before an understanding of the internal structure of matter was achieved….We have seen how these two processes, contraction when heated and cooling during relaxation, can be related by the kinetic theory, but it would be a tremendous challenge to determine from the theory the precise relationship between the two. We would have to know how many collisions there were each second and what the chains look like, and we would have to take account of all kinds of other complications. The detailed mechanism is so complex that we cannot, by kinetic theory, really determine exactly what happens; still, a definite relation between the two effects we observe can be worked out without knowing anything about the internal machinery!

1 Richard P. Feynman et al., The Feynman Lectures on Physics 44-1-44-2 (1963).

Cf. http://rajivsethi.blogspot.com/2010/02/case-for-agent-based-models-in.html .

## The Field of Thought

The extraordinary thing about algebra is that it provides accurate solutions in advance of intuitive understanding, rather than after it. Normally this only happens with the observation of empirical phenomena. You see that a thing happens and then you try to explain it. But with algebra, too, sometimes you see that a result pops out of your equations, and then you try to explain it. But algebra is pure thought! Herein the facticity of thought.

## Maybe It’s the Stage

Climbing the Eiffel Tower is a disappointment. Reaching the moon is a disappointment. Why shouldn’t getting down below the nuclear level be a disappointment? Or getting outside the universe be a disappointment? Why shouldn’t science generally be the Eiffel Tower?

Suppose, for a minute, that God really did mean the universe to be our stage. Wouldn’t we expect its underside, and its backside, to be drab and unadorned, just as they are at the Met or La Scala? And shouldn’t we take the barrenness of the moon, the emptiness of space, and the randomness of quantum mechanics, as signs. Can’t we see the signs?

To follow the plot, keep your eyes on the stage.

## An Apology for Futility

Is it the fly who dies behind the window pane, or the fly who fears to enter your house, who retains her dignity?

Either flies don’t enter or people open their windows. By dying, which does the fly make possible?

## The Heaven Chance*

You are nought but your fortune, as completely empty as chance, from the color of your eyes to the sharpness of your mind. So do not tell me that gambling lacks substance. You lack substance. There is no greater humility than the gambler’s.

*See Nietzsche.

## The Enchanting System

In what way are mathematical models that validate our intuition different from specious etymologies? History is sexist because it is his story. Dogs are backward gods. Etc.

I don’t need a book; I can figure it out for myself!