A RANDOM WALK DOWNHILL

"I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all. -- Ecclesiastes 9:11.

We recently visited a relative, a widow who lives with her son and daughter-in-law, who have been married only a few years. Her daughter-in-law is probably in her late 40's, and Vietnamese. We had never talked to her about her personal history until Liz brought up the subject.

Her father was a government official in the US-backed South Viet Nam administration, and her mother was a successful clothier. They moved to Cambodia for awhile, but, when the infamous Henry Kissinger destroyed that government, returned to Saigon. She learned British English and Cambodian in school. They were a wealthy family. She spoke, for example, of problems bringing a car from Cambodia to Viet Nam. They had paid 100,000 "monies" for it, 250,000 to register it, and, when it turned out that the "registrar" was a fake who absconded with the cash, 100,000 more in penalties. All this in a country where the average wage was 8,000 monies per month.

When the collapse of Saigon came, the official news was not alarming, but there were lots of rumors. No one knew what to believe. They decided to catch one of two boats that was leaving. Her mother and one sister went to pick up a cousin and meet the rest of the family (her, her father, 3 sisters, 1 brother) at the dock. The cousin's husband, however, had gone out to reconnoiter the best course of action. When he didn't return, the cousin decided to stay behind. Her mother, evidently uncertain of what to do next, returned home, but the others had all left. The rest of them got on the crowded boat, which had only one of three engines working. For days, she walked around the boat looking in vain for her mother. The second boat sank with all passengers lost. They landed in the Philippines, but were turned away. Some days later, they encountered a US Navy vessel that transported them to a relocation camp in Guam. Long after that, they were sent to Texas, and the family was then sponsored by a church in Rochester, MN. Their previous wealth meant nothing in the new land. After little more than a year, though, all the family members had jobs in the new country, and were off the church dole. This meant the church could import another family from a disaster area.

She is now a bank accountant. She learned that, shortly after the takeover, her mother and sister who stayed behind were murdered by Viet Cong who took over their house. Another brother who had been in the South Vietnamese army was sent to a re-education camp in the north, where he died. If they now wanted to move back to Viet Nam, they could, but they'd have to pay 25 years worth of back taxes to get their house back. She will probably not move back.

Long ago, when the US was in the first stages of slipping into the Viet Nam morass, Liz and I attended a meeting at the First Unitarian Society in Minneapolis. I forget what the meeting was about, but on the way we passed a room with an open door on a discussion group. The leader said as we passed, "... if, then, we can agree that man is a rational animal, ... ". We kept walking.

Today, on C-Span, I watched Alan Greenspan, Chairman of the US Federal Reserve Bank, testifying before a senate committee. He said the Fed has begun investigating what they are going to do if the US government repays its public debt. The problem is that the Fed's monetary policy is based on its controlling the money supply by buying or selling government bonds. If there are no bonds to buy or sell, there goes the control. The idea that the US will ever repay its debt is based on linear math.

For the last few weeks, I've been reading Against the Gods: The Remarkable Story of Risk, by Peter L. Bernstein (Wiley & Sons, 1996). The book is a fairly coherent history of the theories of probability and statistics, from its origins in gambling, through the development of actuarial tables, on through recent theoretical advances, such as Von Neumann's Game Theory. When he comes to the late 20th century, Bernstein betrays his occupation as an investment consultant, since he discusses in depth various theories of rationality and irrationality among investors, as well as "portfolio valuation" and other arcane theories, most of which are proven wrong by next week's events on Wall Street. He even discusses Chaos Theory a little.

Any mathematical theorem depends on axioms beyond those presented in geometry. They are usually not verbalized, because they're deeply rooted in Western European thought. Some examples, and this list could be extended greatly, of these kinds of axioms in ordinary mathematics are:

1.    The environment tomorrow will be expressible in term's of today's environment.

2.    If man (or the universe) is not rational, his (its) irrationality can be expressed as a measurable deviation from the conclusions that a rational being could reach. As an example, "throwing good money after bad," is understandable as a quantifiable deviation from rationality. Cavorting with space aliens is not.

3.    There is no effect without one or more causes.

4.    If we could only measure all the variables, we could understand why any event occurred.

5.    A small perturbation will have a small effect.

Chaos Theory disputes Axiom # 5. In its most cliched expression, under unstable conditions a butterfly flapping its wings on one continent can cause a hurricane on another continent. Chaos Theory merely states that there are conditions under which, contrary to usual assumptions, the math is extremely nonlinear. In fact, the math is so nonlinear that even exponential equations will not satisfactorily express the relationships. Conventional mathematics exists on a landscape of rolling hills. Chaos theory postulates cliffs, although it promises to show you where they are.

There would be no point to Chaos Theory if it wasn't useful for predicting events. So far, it has not proven very useful, perhaps because it still follows unspoken axioms 1 through 4. There's the possibility that the unpredictable is, by definition, unpredictable, and that we are adrift in a world where even God can't predict the future. That's alarming, because it means that prayers or rain dances can produce only random outcomes.

"Random's no problem," says Bernstein. "We can handle 'Random' with proper Risk Management." But what if the theater curtains catch fire and everyone rushes for the exit at once, as happened in South Viet Nam? What if all the insurance company actuaries are in the theater? Even with a complete Chaos Theory, the calculations won't help you any.

Our thoughts and assumptions are smug and arrogant -- we haven't had a war on our land for almost 150 years. We've lost lots of our young men to foreign adventures, but, no matter how much the relatives may grieve, that loss is nothing compared to the losses suffered by families who both lose their sons and their homes and their mothers and uncles and aunts to wars that take place in their own back yard. Grief for the loss of a loved one is a whole other thing when you have to grieve while running barefoot through the snow carrying all that's left of your worldly possessions, like the Kosovars.

Given the arrogance, is it any wonder that "terrorists" around the world have the urge to bring the wars home to us? A nuclear or biological bomb brought into New York City by suitcases and assembled in a Trump hotel. That's gotta be the dream of thousands of disgruntled people around the world. When that happens, and happen it will, that will be a nonlinear event unpredictable by Chaos Theory, but still rational, if you try to think the way Osama bin Laden would. We can rail against it, but no Star Wars Program can defend us against it, and no Risk Management Theory can handle it, any more than Risk Management could have handled the effects of the Black Death or the Spanish Flu or the Great Depression. Those nonlinear horsemen are waiting in the wings, too, as Alan Greenspan and his buddies worry about the effect of a fractional percentage point change in interest rates on economic health. The fact that he's worrying about what to do when the national debt reaches zero worries me.

At the time I wrote this, I was so proud of it that I e-mailed it to a few friends. One of them sent a response:

Lyle,
I reread your e-mail today because I had a little extra time. I appreciate your thoughts on things because as you know, I am quickly bored and love new things to get ticked off about. I think I follow your argument and probably even agree with much of it, but what did you mean by: "Our thoughts and assumptions are smug and arrogant -- we haven't had a war on our land for almost 150 years." What thoughts and assumptions are you talking about? I assume you mean the ideas you listed below, like: a small perturbation will have a small effect. I guess I just don't figure how these are smug and arrogant. To me they are weak and pitiful, but not smug or arrogant. Are you suggesting that Bin Laden sits around with his buddies getting ticked off about how we view small perturbations mathematically. I think most terrorists are mad #1) because they are whacked-out religious zealots, #2) because they feel the right to exact some revenge for some past wrong. and 3) because they are morally bankrupt and hate filled. Usually humans war because they want something they do not have (e.g., land, power, or revenge). Anyway, I think the humanists in the west are very arrogant; "thinking themselves wise they became fools." But, I also think the west, and in particular the U.S., has achieved a level of civil liberties, personal freedoms, and sexual/racial equality unprecedented in the history of the world. 150 years of peace is a good thing. The whole world should know peace, and for more than 150 years. I hope you were not trying to say the eastern thoughts are superior to western. They certainly are not. We must judge them by their fruits, and certainly the fruits of the east have been mass murder, mass suffering, tyranny. and nearly no freedoms or liberties at all. Or am I just thinking like an arrogant westerner?
-- Steve

My answer:
Steve, thanks for responding. I now realize that I'd skipped a bunch of opinions towards the end of my essay when I got to what George Schulz called the "short strokes." I did not mean to suggest that our enemies are parsing our axioms. Bin Laden is financing a war with the US because he is convinced we are the Great Satan. As far as he's concerned, we symbolize everything in the world that is evil. His religion requires him to fight evil, but because he's merely a billionaire, he can only afford a cheap war, which is what "terrorism" is.

Religion isn't the only source of friction between Americans and the Islamic world. Before we lost Iran, I read a magazine article about unrest among the citizenry caused by the large number of American roughnecks working there for American oil companies. It seems some of them had the quaint cultural habit of raping Iranian women whenever they felt like it, and the Shah was doing nothing to stop it. The Ayatollah used more fundamentalism than he really needed to get the populace behind him and to send the Shah packing. Raping local women is arrogant, in my view.

When the Soviet Union collapsed, we did our part to help by sending over a bunch of free-market economists who urged the government to sell everything immediately. The resulting flood of factories and businesses, although they were sold incredibly cheap, could only be absorbed by people with rubles: the Russian criminals. Not all entrepreneurs are criminals, but all successful career criminals are entrepreneurs. Those economists, who didn't stop to think about who might be able to afford to buy the means of production, were both ignorant and arrogant -- the two attitudes often go together.

Look at the War of 1812. In the 19th century, Great Britain ruled the seas, and we got into that war because the British naval commanders would board American ships and draft all those aboard into the British navy to continue on to rule the seas. The British had what I would call arrogance. We won that war, but, before we did, the British managed to burn down Washington DC. If we had much of a sense of history, that should have taught us some humility.

We came out of the 19th century a weak power in world politics, partly because of the Civil War, and partly because Britain had such a jump on us with their Industrial Revolution. Then Europe screwed everything up for themselves. A passel of rigid defense cross-treaties combined with the assassination in Sarajevo of a two-bit Austrian prince resulted in the "War to End All Wars." The US didn't enter that war until everyone in Europe had exhausted themselves -- we came in and tipped the balance, even though the result was not peace, but a truce. The war flared up again 20 years later, only this time it had spread to the Pacific as well and become a true World War.

The losses to Europe and Asia, both to population and infrastructure, were astounding. Typical estimates of Russia's losses in WW2 run to about 20 million people. We lost no factories, and so came out of that war a wealthy nation who could afford to help rebuild both Europe and Asia.

The Colonial Era ended, but we didn't realize it, even though we had started the end of the era with our own revolution against England. When France lost one of their colonies (French Indo-China, a/k/a Viet Nam) at Dien Bien Phu, we misinterpreted a colonial revolutionary war as a war of Communism against Democracy. We went in and, by God, were going to show the French how to fight a war. I called that arrogance back then, and I call it arrogance now. At the same time, we were determined to gain or retain control of the newly-independent African nations that had been European colonies. Our rationale in all these cases was that we were fighting communism, whether Russian or Chinese. Were the Russians arrogant? You bet, just like us -- from the perspective of the rest of the nations, we were mirror images -- each of us knew just how everyone else should behave. Madeline Albright felt perfectly comfortable rattling sabers around the world, and we believe it's OK to bomb Yugoslavian citizens to convince them to get rid of Slobby Dan (Slobodan Milosevich).

What we have had is not, as you put it, 150 years of peace, but 150 years when we were lucky enough to fight wars on other people's land, not on ours. When I see people who believe their luck is due to skill, I call them smug, whether they are day-traders or world leaders.

What I had really been thinking about when writing of smug predictability assumptions was: suppose that the course of history had been only slightly different, and the Cuban Missile Crisis had resulted in a massive missile exchange. Can you imagine what America would be like today? All of our major cities would be gone, probably only partially rebuilt after 40 years. Since 90% of the original Americans would have been killed in the exchange, our population would be about 25 million, mostly eking out marginal livings on subsistence farms. Because the ground would still have a heavy dose of radioactive materials, chronic radiation sicknesses would be as rampant a destroyer of health and wealth as AIDS is in Africa today. If the population were higher, it would be due to immigration from what we now call third-world countries. We, however, would be part of that third world.

The fact that Russia would be in the same shape would not improve our condition. Any improvement would be due to help from our WW2 enemies, Germany and Japan, who would by now have gained world dominance as Super Powers. We would be on the dole, and we would not be smug or arrogant.

Notice that, in order to get you to agree with me, I've cleverly used only examples where a Democrat was president. The arrogance, however, the attitude that "we know best," is not limited to either major party. It's endemic, and not just in the State Department.