The Laws of the Way Things Really Work
Introduction -- The 1st Law is simply the application of the Second Law of Thermodynamics to everyday life, history, economics and politics. The 2nd law follows naturally from the 1st Law. The rest of the laws are self evident.
1st Law -- Destiny is driven by Chaos and Cascade
1. Any event is a random variable.
2. The outcome of any action is a random variable which is conditioned by the interaction of one or more events, both known and unknown. (This is the source of the Law of Unintended Consequences.)
Corollary -- Given eternity, an event with infinitesimal probability becomes a certainty.
Example -- "Random variable" simply means that the laws of probability are involved in the occurrance of an event. For example, when we see an apple fall from the tree, we expect that the event will be the apple striking the ground. But there is a probability, however small, that the event will be the apple flying off into space instead. A person might think, "I never saw that or ever heard of anybody who did!" Personal experience is not a determinant of what is possible. For someone to think so is simply hubris. Another example is the fertilization of an egg by a sperm. The odds against your conception are truly astronomical. So count yourself lucky that you exist. Or not, depending on how your life has gone.
Example -- A few years ago I saw one of those "catastrophe recovery" trucks parked at my neighbor's house. I went over to see what had happened. It seems that the basement toilet had overflowed and flooded the basement. These were the events involved in the tragedy. The lady of the house used the basement toilet and then left the house. The husband was off fishing in another state. The toilet was stopped up. The toilet tank didn't seat the ball valve after flushing, so the water just kept running. Since the toilet was stopped up, the basement was flooded. The action involved here was flushing the toilet. Based on her experience, the lady assumed (not unreasonable) that the toilet would do its flush and stop. Here we have two random events operating together to overflow the toilet -- the toilet blockage and the open ball valve (since the ball valve was open, the tank didn't fill and the water wasn't shut off -- the water just ran through the tank into the bowl and then onto the floor). Two other random events came into play -- the lady immediately leaving the house and the husband fishing in another state. Thus, we have four random events operating together (cascading) into the random event (unintended consequence) of the basement flooding, since if the house hadn't been empty the situation would have been discovered in time to prevent a flood. Thus, even though from a probability point of view and the expectation rendered by experience, the action of flushing the toilet should have resulted in simply a flush, this particular action resulted in an expensive incident. There was no reason for anyone to anticipate the flood. But, consider, if the lady had simply waited a minute to be sure that the water filling the toilet had shut off, the incident could have been avoided. You can't predict but you can prepare.
Just for fun, let's see if we can estimate the probability for this incident. What is the probability for the toilet plugging up? Off hand, it seems to me that I experience a plugged toilet maybe once every 10 years, but my experience may be exceptionally good, so let's say once a year. With four people in the house, suppose each flushes the toilet an average of four times a day. That's 5,840 flushes in a year. The probability of a plugged toilet is thus about 1/5840. What's the probability of the ball valve getting stuck? It seems to me that I experience this maybe once every three months. So, that's about 1,440 flushes for every stuck ball valve. The probability of two events cascading, that is, occurring together, is the product of the individual probabilities. Thus, the probability of these occurring together is 1/5840 X 1/1440 = 1/8,409,600. Already, your odds of being struck by lightning are far better. What's the probability that the husband will be off fishing? It seems like he spends maybe a month a year fishing. So, the probability of that is about 1/12. What's the probability of the lady being out of the house? She doesn't seem to spend much time away from the house. Say, it totals out to about the same as the husband being out, about 1/12. The probability of the incident, then, can be roughly estimated at about 1/5840 X 1/1440 X 1/12 X 1/12 = 1/1,210,982,400 = 0.000000000825. Your chances of winning the lottery are far better. Let's suppose that I'm off in my estimates by a factor of 100, or even 1,000. Even so, the chances that this incident will occur are still extremely remote, and my error in probability estimates could just as well be toward lower probabilties.
Example -- The War on Terror may have inadvertently made Iran the dominant power in the Persian Gulf. Iran had been contained by the Taliban in Afghanistan and Saddam Hussein. The War on Terror eliminated both of these boundary controls on Iran. Thus the action of liberating Iraq may have resulted in an unintended consequence unfavorable to the US. A second unintended consequence is that we may have expanded the army of terrorists by many fold. Another unintended consequence of defeating the Taliban is that heroin production is once again thriving. We have caused a thousand poppies to grow.
Example -- The War on Drugs is intended to rid our nation of the scourge of drug addiction. It has apparently failed in that mission. Instead, it has made the US the free world's most incarcerated nation, obviously an unintended consequence.
Example -- The early European settlers brought diseases to the New World that killed approximately 90% of the native population. This unintended consequence essentially left the continent open for European settlement. Without this event, the United States would closely resemble that other USA -- the Union of South Africa -- in its political and racial problems.
2nd Law -- All systems tend to revert to the mean.
1. The further from the mean that a system progresses, the more violent the reaction back to the mean.
2. The mean does not need to be achieved in a reaction. The mean itself can increase or decrease over time.
3. The mean can be exceeded in a reaction, such that a new reaction will occur from the opposite direction. This secondary reaction would be expected to be less violent than the original reaction.
Example -- The business cycle. A boom is always followed by a bust. The severity of the bust is usually proportional to the joy of the boom. Another example is climatic cycles, where long periods of wet weather are typically followed by long droughts. Ice ages are followed by global warming, which is followed by ice ages. Any fad, whether in politics, clothes, sex, health, religion, what have you, is typically followed by a reaction against that fad. Every breath inhaled is exhaled. Whatever is born, dies.
Example -- Wages were more or less the same in one part of the world compared to another for millenia. Since about 1900, wage levels in the West have far exceeded those in the East, in places such as China and India. We can expect a reversion to the mean at some point. US wages will decline and Chinese wages will gain.
3rd Law -- People don't believe what they see, they see what they believe.
Example -- During Reagan's term a survey was taken asking if (in your opinion) inflation had increased or decreased during his term. Republicans said that inflation had decreased, Democrats said it had increased. The same survey was taken during Clinton's term. Republicans said that inflation had increased, Democrats said that it had decreased. The fact is that inflation had decreased in both cases. The people surveyed had created their own realities based upon their political biases.
Example -- For centuries, people ascribed illness and disaster to being out of sync with their deities. The advent of science changed that to a large extent. But not entirely. After 9/11, Jerry Falwell ranted about how it was the fault of the decadent American society, with its homosexuality, abortion, etc. Where most of us saw some Islamist fanatics flying airplanes into the Twin Towers, Falwell saw the hand of God at work, using (presumably) innocent Arab boys as His tool to exact revenge on a sinful America.
Example -- Dan Rather was so blinded by his hatred of G. W. Bush that he set aside his normal journalistic suspiscion about some questionable documents about Bush's National Guard service and bit like a trout rising to a fly, documents that were so questionable that web "bloggers" were challenging them within 30 minutes of his report.
Example -- The march to the invasion of Iraq is an example of crowd psychology infecting a whole government. Abundant conflicting evidence was in view but not seen. The hysteria that gripped the nation after 9/11 spawned the belief that Saddam Hussein was an imminent threat to the US and blinded the authorities to even the perception that a second look might be warranted.
Example -- For some reason, the notion became widespread after the 2004 election that the Republicans had won the "culture war". This idea was believed equally strongly by both Democrats and Republicans. It seemed to hinge on the vote in states that also had initiatives on their ballots to outlaw gay marriage. Bush won in these states. What wasn't immediately noticed was that he won these states by smaller margins than he had won them in 2000. A statistical analysis of the election in Liberty, a libertarian publication, showed that there was essentially no impact on the election from "moral values" issues. Charles Krauthammer also independently reached the same conclusion. In this case, people believed that the Republicans had a lock on "moral values" issues, and they saw the election results as proving that view. In fact, the "moral values" issues apparently didn't really matter.
4th Law -- Wherever there is a demand there will be a supply.
Example -- The War on Drugs spends enormous sums on interdicting the flow of illegal drugs into the US. This has only caused the price to increase. The supply continues unabated.
5th Law -- Whatever is subsidized becomes more expensive.
Example -- Health care in the US is subsidized both by private benefit plans for employees and government welfare plans for the poor. The cost of health care has spiraled out of control and is the most inflationary element of our economy.
Example -- Public education has caused education to be another highly inflated element of our economy. Public schools offer multiple programs, such as sports and various experiments in social engineering, that have little to do with learning but which consume vast sums. Jobs that used to require an eigth grade education now require a college degree, an inflation in qualification requirements that isn't reflected in actual job requirements, that causes the dedication of further sums to the acquisition of unnecessary qualifications.
Example -- The War on Poverty was supposed to abolish poverty. In percentage terms, we have the same number of poor that we had when the "war" was declared. Something like $500 billion has been spent. Thus, we have spent a lot of money but made no progress. In effect, we subsidized poverty and it became more expensive. Some might argue that poverty would be worse except for the "war". This is idle speculation and is not supported by the historical statistics on poverty.
Example -- The Federal Emergency Management Administration (FEMA) effectively subsidizes hurricanes. By offering low cost loans (and outright grants) for rebuilding after a hurricane, FEMA lowers the cost of living in Florida and similar states, thereby encouraging people and businesses to live there who might otherwise elect to locate elsewhere. Each hurricane is thus more expensive than the preceding ones because more people are affected. FEMA effectively subsidizes forest fires and earthquakes through the same mechanism. Federal assistance for rare disasters is one thing and is probably prudent. In the examples, these events are not rare and are actually expected.
Example -- Subsidy sometimes takes unexpected forms. Taxes are a major industry. Thousands of people are employed in the IRS and work as tax lawyers and accountants in business. Notice how the proposals for tax simplification basically go nowhere. Here, through our tax code, we are susidizing a whole industry.
6th Law -- People behave to maximize their own satisfaction.
1 -- What appears to one man as a "sacrifice" may actually be another man's satisfaction of his own interests.
2 -- An individual has many interests competing for satisfaction. The strength of these interests varies with time and circumstance. A person who gives lavishly to charity is frequently called generous and is lauded for putting the interest of others ahead of his own. He is simply acting to satisfy his own interest that has dominance at the moment.
7th Law -- Humans love war. If they didn't they wouldn't do it so much.
8th Law -- Like it or not, one man's terrorist is another man's freedom fighter.
Here is a partial list of "terrorists" who were statesmen or heroes of the realm at the time or morphed into them later. Yasser Arafat, Menachem Begin, Ben Bella, John Brown, Winston Churchill, Michael Collins, Geronimo, Ulysses S. Grant, Jomo Kenyatta, Curtis Lemay, Vladimir Lenin, Nelson Mandela, Robert McNamara, Ho Chi Minh, Yitzhak Shamir, Phil Sheridan, William Tecumseh Sherman, Harry Truman, Mao Tse Tung, Nat Turner. Terrorism is a tactic that has been employed by every people in every time in history.
There may be other laws, but these are the ones that I have observed in operation enough to conclude that they actually are laws and not hypotheses.
-- David H. Neal
1st Law -- Destiny is driven by Chaos and Cascade
1. Any event is a random variable.
2. The outcome of any action is a random variable which is conditioned by the interaction of one or more events, both known and unknown. (This is the source of the Law of Unintended Consequences.)
Corollary -- Given eternity, an event with infinitesimal probability becomes a certainty.
Example -- "Random variable" simply means that the laws of probability are involved in the occurrance of an event. For example, when we see an apple fall from the tree, we expect that the event will be the apple striking the ground. But there is a probability, however small, that the event will be the apple flying off into space instead. A person might think, "I never saw that or ever heard of anybody who did!" Personal experience is not a determinant of what is possible. For someone to think so is simply hubris. Another example is the fertilization of an egg by a sperm. The odds against your conception are truly astronomical. So count yourself lucky that you exist. Or not, depending on how your life has gone.
Example -- A few years ago I saw one of those "catastrophe recovery" trucks parked at my neighbor's house. I went over to see what had happened. It seems that the basement toilet had overflowed and flooded the basement. These were the events involved in the tragedy. The lady of the house used the basement toilet and then left the house. The husband was off fishing in another state. The toilet was stopped up. The toilet tank didn't seat the ball valve after flushing, so the water just kept running. Since the toilet was stopped up, the basement was flooded. The action involved here was flushing the toilet. Based on her experience, the lady assumed (not unreasonable) that the toilet would do its flush and stop. Here we have two random events operating together to overflow the toilet -- the toilet blockage and the open ball valve (since the ball valve was open, the tank didn't fill and the water wasn't shut off -- the water just ran through the tank into the bowl and then onto the floor). Two other random events came into play -- the lady immediately leaving the house and the husband fishing in another state. Thus, we have four random events operating together (cascading) into the random event (unintended consequence) of the basement flooding, since if the house hadn't been empty the situation would have been discovered in time to prevent a flood. Thus, even though from a probability point of view and the expectation rendered by experience, the action of flushing the toilet should have resulted in simply a flush, this particular action resulted in an expensive incident. There was no reason for anyone to anticipate the flood. But, consider, if the lady had simply waited a minute to be sure that the water filling the toilet had shut off, the incident could have been avoided. You can't predict but you can prepare.
Just for fun, let's see if we can estimate the probability for this incident. What is the probability for the toilet plugging up? Off hand, it seems to me that I experience a plugged toilet maybe once every 10 years, but my experience may be exceptionally good, so let's say once a year. With four people in the house, suppose each flushes the toilet an average of four times a day. That's 5,840 flushes in a year. The probability of a plugged toilet is thus about 1/5840. What's the probability of the ball valve getting stuck? It seems to me that I experience this maybe once every three months. So, that's about 1,440 flushes for every stuck ball valve. The probability of two events cascading, that is, occurring together, is the product of the individual probabilities. Thus, the probability of these occurring together is 1/5840 X 1/1440 = 1/8,409,600. Already, your odds of being struck by lightning are far better. What's the probability that the husband will be off fishing? It seems like he spends maybe a month a year fishing. So, the probability of that is about 1/12. What's the probability of the lady being out of the house? She doesn't seem to spend much time away from the house. Say, it totals out to about the same as the husband being out, about 1/12. The probability of the incident, then, can be roughly estimated at about 1/5840 X 1/1440 X 1/12 X 1/12 = 1/1,210,982,400 = 0.000000000825. Your chances of winning the lottery are far better. Let's suppose that I'm off in my estimates by a factor of 100, or even 1,000. Even so, the chances that this incident will occur are still extremely remote, and my error in probability estimates could just as well be toward lower probabilties.
Example -- The War on Terror may have inadvertently made Iran the dominant power in the Persian Gulf. Iran had been contained by the Taliban in Afghanistan and Saddam Hussein. The War on Terror eliminated both of these boundary controls on Iran. Thus the action of liberating Iraq may have resulted in an unintended consequence unfavorable to the US. A second unintended consequence is that we may have expanded the army of terrorists by many fold. Another unintended consequence of defeating the Taliban is that heroin production is once again thriving. We have caused a thousand poppies to grow.
Example -- The War on Drugs is intended to rid our nation of the scourge of drug addiction. It has apparently failed in that mission. Instead, it has made the US the free world's most incarcerated nation, obviously an unintended consequence.
Example -- The early European settlers brought diseases to the New World that killed approximately 90% of the native population. This unintended consequence essentially left the continent open for European settlement. Without this event, the United States would closely resemble that other USA -- the Union of South Africa -- in its political and racial problems.
2nd Law -- All systems tend to revert to the mean.
1. The further from the mean that a system progresses, the more violent the reaction back to the mean.
2. The mean does not need to be achieved in a reaction. The mean itself can increase or decrease over time.
3. The mean can be exceeded in a reaction, such that a new reaction will occur from the opposite direction. This secondary reaction would be expected to be less violent than the original reaction.
Example -- The business cycle. A boom is always followed by a bust. The severity of the bust is usually proportional to the joy of the boom. Another example is climatic cycles, where long periods of wet weather are typically followed by long droughts. Ice ages are followed by global warming, which is followed by ice ages. Any fad, whether in politics, clothes, sex, health, religion, what have you, is typically followed by a reaction against that fad. Every breath inhaled is exhaled. Whatever is born, dies.
Example -- Wages were more or less the same in one part of the world compared to another for millenia. Since about 1900, wage levels in the West have far exceeded those in the East, in places such as China and India. We can expect a reversion to the mean at some point. US wages will decline and Chinese wages will gain.
3rd Law -- People don't believe what they see, they see what they believe.
Example -- During Reagan's term a survey was taken asking if (in your opinion) inflation had increased or decreased during his term. Republicans said that inflation had decreased, Democrats said it had increased. The same survey was taken during Clinton's term. Republicans said that inflation had increased, Democrats said that it had decreased. The fact is that inflation had decreased in both cases. The people surveyed had created their own realities based upon their political biases.
Example -- For centuries, people ascribed illness and disaster to being out of sync with their deities. The advent of science changed that to a large extent. But not entirely. After 9/11, Jerry Falwell ranted about how it was the fault of the decadent American society, with its homosexuality, abortion, etc. Where most of us saw some Islamist fanatics flying airplanes into the Twin Towers, Falwell saw the hand of God at work, using (presumably) innocent Arab boys as His tool to exact revenge on a sinful America.
Example -- Dan Rather was so blinded by his hatred of G. W. Bush that he set aside his normal journalistic suspiscion about some questionable documents about Bush's National Guard service and bit like a trout rising to a fly, documents that were so questionable that web "bloggers" were challenging them within 30 minutes of his report.
Example -- The march to the invasion of Iraq is an example of crowd psychology infecting a whole government. Abundant conflicting evidence was in view but not seen. The hysteria that gripped the nation after 9/11 spawned the belief that Saddam Hussein was an imminent threat to the US and blinded the authorities to even the perception that a second look might be warranted.
Example -- For some reason, the notion became widespread after the 2004 election that the Republicans had won the "culture war". This idea was believed equally strongly by both Democrats and Republicans. It seemed to hinge on the vote in states that also had initiatives on their ballots to outlaw gay marriage. Bush won in these states. What wasn't immediately noticed was that he won these states by smaller margins than he had won them in 2000. A statistical analysis of the election in Liberty, a libertarian publication, showed that there was essentially no impact on the election from "moral values" issues. Charles Krauthammer also independently reached the same conclusion. In this case, people believed that the Republicans had a lock on "moral values" issues, and they saw the election results as proving that view. In fact, the "moral values" issues apparently didn't really matter.
4th Law -- Wherever there is a demand there will be a supply.
Example -- The War on Drugs spends enormous sums on interdicting the flow of illegal drugs into the US. This has only caused the price to increase. The supply continues unabated.
5th Law -- Whatever is subsidized becomes more expensive.
Example -- Health care in the US is subsidized both by private benefit plans for employees and government welfare plans for the poor. The cost of health care has spiraled out of control and is the most inflationary element of our economy.
Example -- Public education has caused education to be another highly inflated element of our economy. Public schools offer multiple programs, such as sports and various experiments in social engineering, that have little to do with learning but which consume vast sums. Jobs that used to require an eigth grade education now require a college degree, an inflation in qualification requirements that isn't reflected in actual job requirements, that causes the dedication of further sums to the acquisition of unnecessary qualifications.
Example -- The War on Poverty was supposed to abolish poverty. In percentage terms, we have the same number of poor that we had when the "war" was declared. Something like $500 billion has been spent. Thus, we have spent a lot of money but made no progress. In effect, we subsidized poverty and it became more expensive. Some might argue that poverty would be worse except for the "war". This is idle speculation and is not supported by the historical statistics on poverty.
Example -- The Federal Emergency Management Administration (FEMA) effectively subsidizes hurricanes. By offering low cost loans (and outright grants) for rebuilding after a hurricane, FEMA lowers the cost of living in Florida and similar states, thereby encouraging people and businesses to live there who might otherwise elect to locate elsewhere. Each hurricane is thus more expensive than the preceding ones because more people are affected. FEMA effectively subsidizes forest fires and earthquakes through the same mechanism. Federal assistance for rare disasters is one thing and is probably prudent. In the examples, these events are not rare and are actually expected.
Example -- Subsidy sometimes takes unexpected forms. Taxes are a major industry. Thousands of people are employed in the IRS and work as tax lawyers and accountants in business. Notice how the proposals for tax simplification basically go nowhere. Here, through our tax code, we are susidizing a whole industry.
6th Law -- People behave to maximize their own satisfaction.
1 -- What appears to one man as a "sacrifice" may actually be another man's satisfaction of his own interests.
2 -- An individual has many interests competing for satisfaction. The strength of these interests varies with time and circumstance. A person who gives lavishly to charity is frequently called generous and is lauded for putting the interest of others ahead of his own. He is simply acting to satisfy his own interest that has dominance at the moment.
7th Law -- Humans love war. If they didn't they wouldn't do it so much.
8th Law -- Like it or not, one man's terrorist is another man's freedom fighter.
Here is a partial list of "terrorists" who were statesmen or heroes of the realm at the time or morphed into them later. Yasser Arafat, Menachem Begin, Ben Bella, John Brown, Winston Churchill, Michael Collins, Geronimo, Ulysses S. Grant, Jomo Kenyatta, Curtis Lemay, Vladimir Lenin, Nelson Mandela, Robert McNamara, Ho Chi Minh, Yitzhak Shamir, Phil Sheridan, William Tecumseh Sherman, Harry Truman, Mao Tse Tung, Nat Turner. Terrorism is a tactic that has been employed by every people in every time in history.
There may be other laws, but these are the ones that I have observed in operation enough to conclude that they actually are laws and not hypotheses.
-- David H. Neal
posted by David H. Neal at 1:40 PM
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