Risk, Strategy and the Nonrational

I am reposting a blog entry that I posted nearly a decade ago about the role of art and the nonrational in evaluating risk. The key is that our nervous systems consume far more data than we are consciously aware, and make their own statistical analyses, using this data, though it is most often communcated up to consciousness in ways that are hard to read, and at times even harder to believe:

I recently got asked by a headhunter to consider a job as a project/implementation manager for a company that specializes in VaR, or “Value at Risk.” That’s high finance talk for software that risk departments in investment banks and other financial institutions use to evaluate the extent of the damage they could bring upon themselves, considering their current strategies. You load up all of your positions and it tells you how risky your portfolio is, and perhaps suggests ways of hedging your bets with others so that your investments might be safe and sound.

During the interview I asked a bit about what went into it. At first I was thinking, wow, this might be my opportunity to find out first hand about strange attractors and self-organizing systems, but the interviewer, an MBA and PhD in mathematics (because you have to be in order to understand this stuff) assured me that VaR uses normalized calculations, just very complex ones. I lost about 95% of my interest at that moment, but I was still curious, so we went on.

He was most confident that in all but very rare cases the calcs could pinpoint and closely predict riskiness, and even alleviate most of the risk due to chaos (the unexpected), by helping to stabilize everything that was easily assimilated into knowable and predictable patterns. This was a few weeks before the financial markets imploded.

I’m sure that Lehman Brothers, Bear Stearns, Wachovia, Fanny and Freddy, for instance, were all using some sort of VaR system to help stave off their own tribulations.

But when I think again about Laura Ward’s “Whistle Me Higher” (see review posted below following this section) and all of the figures that may have been taken as indicators that may have suggested financial peril (i.e. gambling casinos, radioactivity, pandemonium, superstition, the sweeping up of toxic money by people in breakout suits), I am left wondering: who’s got a better system? True enough, like all art, Laura’s work is a bit of a Rorschach, something like the Delphic Oracle pouring out of the mouth of a Python Priestess high on geologic gasses, later interpreted by a throng of specialized priests.

There are many oracular parallels throughout the history of the world, everything from the reading of tea leaves to the bumps on one’s head. The Tao De Ching, for instance, grew out of a practice people in ancient China had of turning over tortoise shells in order to seek a correspondence between static visual patterns and those being lived. Nowadays we have complex visualizations of numerical data, (i.e. graphical display) which attempt to convey information in a way a body can understand, alongside explanations that, after all, mathematics is built upon embodied metaphors, bringing us oddly back to where we had begun, with a little added perspiration (and perhaps precision).

Add to that the concept of expertise that Malcolm Gladwell puts across in Blink, or the theory that our neurologies enable us to make complex statistical-based decisions on an unconscious level, and you begin to gain a kind of insight into the possibility that the somewhat mystified and mistrusted operations of art-making may not be, in many ways, too different from those more reliable domains, such as the sciences.

This does not say that one should listen only to Laura, and ignore the complex, though normalized, mathematical formulas. But we might attempt to think, and experience, for ourselves and learn to weigh both into our judgements, in whatever proportion seems fit for the context. In other words, use the statistics the machine can give you, but also those that we give and receive as a system of biological machines. True, there is much that is quite primitive in there, but tempered by our other facilities (i.e. those that have built the complex mathematical models to begin with), we might find we have a much bigger net to catch things in.

Original post: http://howtowork.blogspot.com/2008/10/var.html

Prior post about Laura’s show:

A few months ago my wife Kathleen and I went to see an old friend’s dance company do a show at The Theater for the New City. We were pleasantly, enormously, surprised at how far Laura Ward’s work had come. While I always admired her quirky inventiveness, disturbing playfulness, her sense of surprise, as well as a number of other qualities, her most recent piece, called “Whistle Me Higher” was not only on par with the best dance performances I’ve ever witnessed, it was an amazingly ambitious collision of mythos centered around the experience of Las Vegas. Not only is the city the great cliche gambling and entertainment capital, but it is not far from sacred native American and nulcear weapons testing sites. All of this comes out in the show, with sparks flying where they strike each other like flint on steel. Petite dancers in glittering patriotic garb grin manically to throbbing electronica, winding at times with lounge and parade tune overtones. There are occasionally theatrical breaks where a woman and man in breakout suits sweep away piles of fallen dollar bills amid fallen dancers, who get carted away in wheelbarrows. The two exchange poetic and philosophic dialog, sometimes strewn with scraps of clinical hypnotic scripts, suggesting, of course, a culture of the entranced, in which any verbal exchange wavers between directive and guesswork.

I had lunch with Laura not long afterward, and asked her how she managed the whole thing, from conceptualization, to composition, choreography, music selection, costumes, set design, you name it. What I found out was that Laura has developed an incredible prediliction for a kind of project management that you just don’t see in people trained by professional organizations. It sounded similar to the way Charles Mingus described leading his band, where the core themes and spirit of the work was embodied by the participants (an amazing collection of performers, I need to mention), who worked out the details through their own impetus.

It’s hard to imagine how something like this could be translated to the ordinary job world (even Laura works a day job, or rather day jobs), but it’s a much different process than the task list and Gantt chart way of doing things, and it’s got me thinking that there has to be a compromise, at least, or so many ways to organize and lead from inception to completion, if only we studied the way we actually did things, tracked the intinsic path of our minds and bodies, and designed a methodology around that. I would want to learn project management from Laura, rather than the PMI, even if they do get Colin Powell as a keynote speaker.

http://howtowork.blogspot.com/2008/09/welcome-back.html

What We Can Learn from Weinstein and Kaepernick

Pyramid Power: it was a big canard during the 1970s, when I was growing up, and every charlatan from Mumbai to Hoboken was trying to sell miniature pyramidal structures to wear on our heads, to increase thought-capacity beyond the once-thought 10% we were supposedly using.  Or to put over the goldfish bowl if little pet Goldy had the sniffles. It was supposed to sharpen razor blades, if you left them under its pointy apex overnight. There was some mysterious force, once known by the ancient Egyptians, and newly rediscovered that could do anything from fry eggs to cure cancer. I remember wanting one such devise. I was young, was often bullied, had no luck with girls, and my parents always got to watch what they wanted on TV.

It was a power advertised even on the back of the dollar bill – that creepy eye at the very top making me feel like I was always under surveillance, even at my most private moments. I wanted the ultimate toy, a talisman against the magic that was being used against me, humbling me past what was natural and acceptable for a suburban kid. Of course, I knew little about the humility and exploitation others faced, no matter how much the popular music I was listening to at that time made reference to it, and protested it. The singers sang about the plight of every disenfranchised population, from inner-city school children to poor villagers in Viet Nam, getting roasted in chemical flames dropped from helicopters manned by our honorable airborne divisions.

But the true power of the pyramid was the force of gravity, pressing down and outward to greater and greater widths to a foundation supporting the whole enterprise. It is actually a gradation of foundations, all the way down, that offers a tremendous stability and ability to endure centuries of the forces of weather and entropy.

Our social structures are pyramids as well, everything from governments, armies, leisure clubs and organizations, corporations – the ever-widening and layering of one management strata upon another, upon which all sit restlessly on the heads of those who often expend the most effort, and possibly produce, at least in its most raw form, the most value.

It’s a habit we seemed to have held onto from medieval times and before. We seem to like these forms of power relations, in spite of the fact that we also claim to love democracy, and to value freedom and equality. If I am prone to the rules of a corporation, in order to satisfy company standards, prove one’s professionalism, in order to maintain employment, feed myself, have a place to live, and that involves most of my waking time, then the whole notion of freedom is called into question. I can leave the corporation, all corporations, become self-employed, live off the grid, but the whole structure is so much a part of the way we live, who we have grown to know ourselves as, what we have been trained to be, both genetically and through acculturation.

We struggle with the rules, at least those of us who are among the more rebellious ilk, until we learn to internalize them, lest we are driven mad by having to adhere to a number of arbitrary behavior patterns that run against our grain. We take it on as we might a workout routine, or the Japanese Tea Ceremony. It becomes ours, which we then begin to dress up with so much ornamentation. We become hierarchical beings, its prophets and priests in full immersion.

Many things rely on our ability to organize ourselves in this way. Capital, for instance, would not exist without this form of traverse dominance. We would also not be able to bond in organized action they way we do today, whether it be in war, or in large scale projects such as landing on the moon. We would also not be able to have the kind of international trade we enjoy today, which engenders, for instance, the consumption of tropical fruit in temperate climates during the winter season, among other things.

But some of the functions implicit to our being hierarchal are not so nice. The fact that a man like Harvey Weinstein can assume that he is entitled to satisfaction of his desires with anyone he pleases, due to his position of dominance in the structure, is not an aberration or sickness of the hierarchy, but just another brick in the wall. He has not only the personal financial resources to make other people happy or miserable at his whim, but also the currency of connections with everyone on his level of strata and below, enforcing a near lockdown of every pathway in his vicinity. Yes, the pyramid is entitlement all the way down.

Let’s not assume Weinstein was always a wretched individual. He’s been involved in making some great movies, even films that show a particular ethical intelligence. No, something else happened to him perhaps that happens a bit to us all as we begin to internalize the system – he has become consumed by the mechanical and gravitational values of the system, the mechanical processes it comprises, i.e. the spirit of gravity, to such an extent that he has forgotten the values of his own that he had brought into the system to begin with. After all, it makes things easier.

Lesson number 1: just because you have entered the established order, and have mastered its rules, doesn’t mean you need leave everything else behind. It may take a certain amount of naiveté to maintain a desire to emulate the values of our heroes. I remember going through a very cynical period, during my coming of age, in which every value was turned upside down, but now that I am getting older, whether it be because of my settling down, or my brain shrinking, I want more and more to be like them – not the real people who we find out they actually were, but those idealized people, who are nice and wise at the same time, and seem to know what to do. At the same time, one needs to be patient with oneself – having values, one’s own deepest values, and living with them, isn’t easy.

On this end of the spectrum you have someone like Colin Kaepernick, who had nothing to gain and everything to lose, by beginning his protest. He was near the very top of the hierarchy, and instead of letting it own him, he turned against its mechanical force and began to do what is right. He has suffered for it, though he has the resources to cushion that suffering. But one should not forget that he is swimming upstream against gravity, against the very structure he had become a iconic part of.

Weinstein is the property-obsessed libertarian/libertine, whereas Kaepernick is the nomadic and quixotic anarchist rattling against the windmills of the machine. We can know, comfortably or uncomfortably, who we aspire to align with, and who we may align more with in actuality. Even our working metaphors (climbing the ladder, waterfall, etc.) are imbued with the spirit of gravity and the power of pressure – why is it we assume that it takes a force, constantly applied and directed, in order to propagate productivity? This attitude goes back to the days of slavery, and continues to contaminate our thinking in everything from politics and education, to our work and everyday living. It is part of the weight of the pyramid, the power of it, which if we are going to advance ethically, as we have technologically, we need to work diligently and thoroughly to tease out each of the poisonous barbs of or beloved systems, and even our behavior, everywhere that they breed and are hidden.

 

 

 

 

Why You Should Read John Ashbery

John Ashbery, who passed away just over a month ago, was a poet revered by many of the smartest and fearlessly challenging poets alive today. If the term “poet’s poet” means anything, it surely applies to him. At the same time, just as many poets and readers of poetry disdain his work for being overly oblique, incomprehensible, even elitist.  And while on the face of it, there are arguments in their favor, I think there is a point that they are missing that distintegrates all of their criticism.

And that point is that Ashbery forces you to read in a way that is completely different fom almost anything else that you will read. And this is a point significant, not only to poets, and lovers of poetry, but to anyone who values the richness of their subjective experience, and who wish to challenge their assumptions and cognitive habits, even those who simply seek to work better, and perform which a richness of fluidity beyond what they know.

To fully appreciate and experience an Ashbery poem, at least one of his better pieces, one needs to surrender to it. There’s no amount of brain-splitting mental tension as if applying all the force of one’s neurology to solving a mathematical puzzle or quantum function. You have to fall into an Ashbery poem the way you would a bath of phonemes, morphological and syntactical strangeness. It’s more like meditation than philosophy, though it contains continents of philosophical significance.

Reading an Ashbery poem, once you’ve done the work to get into the flow – which again is more work you need to do on yourself and your expectations – it will feel the way it does when you are in the midst of an epiphany, without there actually being an epiphany. And that is because you are  the zone where epiphanies are made.

Forget the brain gym, and all those gimicky internet tools supposed to enhance your cognitive abilities. If you read enough Ashbery, your brain will function differently. You will find yourself more at home in conundrums that tend to drive you mad, and you will likely laugh more frequently.

My graduate school advisor, David Lehman, was a close friend JA’s, and there were several times I had the opportunity to speak with him, but I shied away, feeling myself overly timid in the face of this timid giant. A friend of mine had several times sat at the bar with him, sipping martinis, and when I asked what they talked about, he said it was jokey stuff about what the newscasters on the TV were wearing. No heavy French literary theory or deep impressions about the current state of the art world. I’m sorry to have missed the chance to take part in that kind of chat, as I’m sure it would have had its own novelties, a special type of fluidity. I will never know.

David used to say that he would often blurt out things he had heard other people say, as if they were whisps of signification that floated right through him. Very often, we were told, he was egoless, a living atmosphere of humanity. Something different from all of us…

After John Ashbery had died, David asked for similes from people that describe his work. What I thought was that Ashbery’s poems read like plants growing and chemical reactions occurring. That’s the best I can do.

But John can say it best.

 

 

 

Cubicle of Cruelty Part 2

Anabelle knew she could ring the doorbell and see Michel, but she could also do nothing. She did not know that these ten minutes were a concrete example of free will; she knew only that they were terrible and that when they had elapsed, she would never be quite the same again. Many years later Michel proposed a theory of human freedom using the flow of superfluid helium as an analogy. In principle, the transfer of electrons between neurons and synapses in the brain – as discrete atomic phenomena – is governed by quantum uncertainty. The sheer number of neurons, however, statistically cancels out elementary differences, ensuring that human behavior is as rigorously determined – in broad terms and in the smallest detail – as any other natural system. However, in rare cases – Christians refer to them as acts of grace – a different harmonic wave form causes changes in the brain which modify behavior, temporarily or permanently. It is this new harmonic resonance which gives rise to what is commonly called free will.– Michelle Houellebecq, from The Elementary Particles

I dunno, but I sometimes think I write this blog for people who secretly harbor some kind of artist’s hankering over novelty, the challenges of change and varieties of aesthetic experience.  At other times I think I do it for those I think who should, and don’t know it yet. I see them, and I wonder. I want to get in their faces and help them awaken to the fact that there is a very thin gauze between the world they think they’re living in, and that other world.

And who are those people? Well, just about anybody.  Joseph Beuys not only believed that everyone was an artist, but he invited just about anyone who wanted to attend his classes at the Kunstakademie Düsseldorf. And largely to the protest of the rest of the staff, who had a much more elitist view of art than he had.

Most of his students did not become professional artists, but likely benefited from what they learned in applying that understanding in whatever other fields they pursued, whether it was a social work, business, medicine or anything else. That’s because in their very core, these things are not so different. The reason we are all artists, according to Beuys’ way of thinking, is because we live necessarily in a creative flux of life that demands it of us. In is our engagement in life, all of the problem solving, the variations in behavior, and learning to see differently so that we can respond differently. It’s you at your desk job, or whatever it is you do.

To Artaud, however, art had a very special purpose, which is also relevant to your desk job in a different, though parallel way, as I tried to explain previously. I think of what Artaud was after as being a parallel to Rinzai Zen Buddhism, where the practitioner will attempt to create a specific type of cognitive dissonance to provoke a change that liberates them into a state of  blissful wakefulness and spontaneity. He wanted to provide propitious opportunities to create that different harmonic wave form.

It’s all about innovation and change, which are two things either on a spectrum, or where one is special type of the other. In our work lives we are hired to create some change in the environment, take a situation from one state to another, or to alter the effect of entropy, either to halt the way things would normally fall apart, or to redirect and utilize those tendencies. These are all creative pursuits, in a sense, though we may not think of them the way we think of a Monet’s Water Lilies, or a song we hear on the radio.

You hear a lot about innovation and disruption, and people who are trying to sell them as products and services, as if they were theirs to sell. Real freedom and innovation may be two sides of the same coin, and yes, there may be a reliance on disruptive forces and behaviors to produce either and both. But perhaps it’s more about how we each engage the forces that disrupt and traumatize our own work, and the rest of our lives, those moments like Annabelle’s above, in the midst of a dilemma or conundrum, where we seemingly have no good choices. At least none that have occurred to us yet.