The 2nd Law (part 3) – The Missing Linkage Between Economy and Ecosystem. Mankiw’s Ten Principles and Thermoeconomics


Recalling the previous post about ecological sustainability [1],

The 2nd Law (part 2) – My Issue with Ecological Sustainability and World Economy (Mankiw’s Ten Principles)

what is missing is strong linkage between the world economy and the limited biocapacity of the planet Earth.

The missing link between economy and ecosystem has been already pointed out by many researchers [2].

World Economy and Ecosystem: Mankiw’s 10 Principles and Thermoeconomics

Both, natural ecosystem and world economy are complex system and theirs outcomes are not easy to define analytically, to predict and to manage.

Briefly, world economy have been described by Mankiw’s Ten Principles and outcomes are mainly due to [1]:

  • Decision Making and Supply-Demand’s law (invisible hand)
  • Regulation by Government and Policy Makers

Regarding the ecosystems, the Global Footprint Network is attempting to provide a measure about the biocapacity of each country as well as for all over the world. This year (2014), human activities have consumed all the biocapacity available on 19th of August [3].

A possible link between the world economy and the ecosystem might be established thanks to Thermoeconomics [4]: that is Thermodynamics applied to Economy.

Without touching topics such as, thermodynamics, information theory and cybernetic, briefly, both ecosystem and economy are two environments that are accessing to the same resources (biocapacity, energy,…) available in the “system” Earth as shown in the Figure below [5]:

Economy and Ecosystem

Ecosystem

The ecosystem, thanks to photosynthesis and Krebs cycles, is efficiently using the resources in the Earth (mass and energy) without producing any waste.

The variables of an ecosystem are its biocapacity (mass: forests, animals, soil, water,…), energy, temperature, etc. and they are regulated by physics’ laws.

Economy

On the contrary, human activity is evolving and economy is growing because of energy dispersal without re-integrating biocapacity consumptions (deforestation, species’ extinctions, water, natural resources, etc) [6].

Values (money), regulations, prices, interest rates, etc. are the variables of the economy. Human behaviors and outcomes of the economy are governed by Mankiw’s ten principles [7].

What economy produce as an exchange for growth is mainly waste and pollution: something that neither the economic nor ecosystem environments are able to use as a resource.

How to Link World Economy & Ecosystem?

Since the beginning of the 19th century, many scientists, biologists, physics and economists, have conducted several studies and developed theories as well in order to address the missing link between economy and the entire ecosystems [2][8].

The same researches, inferred that (thermoeconomic):

Assumption 1: to each money transaction correspond a flow of energy or biocapacity.

Meanwhile, in the economic environment (from Mankiw’s ten principles):

Assumption 2: to each economic interaction among economic actors corresponds a transfer of value that is represented by a monetary flow.

Common economic interactions are:

  • selling\buying: a transfer of money from the consumer to the retailer
  • issuing a loan: a transfer of money from banks to households\firms.
  • transfers of money from central bank to national banks;
  • taxes and subsidies: transfers of money between households\firms and governments.
  • the act of printing money by the central bank incentivize the volume of the economic transactions since more money is putted into the system.

While:

  • producing goods\services means adding a value in the economic environment that is equal to the (price – cost of production).
  • consuming goods\services means decreasing the value in the economic system that is equal to the price paid for the goods\services.

The missing link… at least in theory, in two new principles

How Economy and Ecosystem Interact: Principle N.11

Putting assumption 1 from thermoeconomic and assumption 2 together, here below one missing principle to add at the previous Mankiw’s ten principle that might link World Economy with the Ecosystem:

Principle N.11

To Each Interaction among Economic Actors Corresponds both a Monetary Flow and an Energy Flow.

 

How Economy and Ecosystem Interact: Principle N.12

The new Principle N.12 is about how to deal with complex systems as both economy and ecosystem they are.

In a complex system mostly of the times something strange, new and unexpected happen that is called as “emergent phenomena“.

An example, is the human body. A body is actually a mass o billions of one-celled organism like bacteria.

Well, would a unicellular organism exist without human bodies? Of course, Yes. There are even bacteria that infect our organism.

On the contrary, would human bodies exist without unicellular organisms? No!

Therefore, the questions above suggest us that a human body is an emergent phenomena of unicellular organisms as well as there is also clear hierarchy of existence among complex systems.

What about Economy and Ecosystem?

By answering to the same questions:

  • Would Ecosystem exists without Economy? Yes, as it happened before humankind.
  • On the contrary, would Economy exists without Ecosystem? No way. Economy is an emergent phenomena created by humankind, and humankind is an emergent phenomena of Ecosystem as well. As a matter of fact, human beings can not exist without the support of the Ecosystem: mainly food, water and energy.

Such a reasoning leads to Principle N.12:

Principle N.12

The Economic Environment is an Emergent Phenomena of the Ecosystem.

So, once acknowledged the new Principles  N.11 and N.12 that link Economy and Ecosystem:

what does they mean in practice, both for economic activities and enviroment sustainability?

To be continued…

Feelink – Feel & Think approach for doing life!

Resources

[1]: I. Gruer, “The 2nd Law (part 2) – My Issue with Ecological Sustainability and World Economy (Mankiw’s Ten Principles)”. Posted Sept. 10, 2014, http://www.ivangruer.com.

[2]: Peter A. Corning. “Control Information Theory: The Missing Link in the Science of Cybernetics”. System Research and Behavioral Science. n.24, pp 297-311, 2007.

[3]: Earth Overshoot Day. “Global Footprint Network“. http://www.footprintnetwork.org

[4]: Peter A. Corning. “Thermoeconomics: Beyond the Second Law”. Journal of Bioeconomics. Vol. 4 – Issue 1, pp 57-88, 2002.

[5]: M. Gong, G. Wall. “On Exergetics, Economics, and Optimization of Technical Process to Meet Enviromental Conditions”. International Conference on Thermodynamic Analysis and Improvements on Energy Systems. 10-13 June 1997. Beijing, China.

[6]: A. Annilla, S. Salthe. “Economy Evolves by Energy Dispersal”. Entropy. 11-2009. http://www.mdpi.com/journal/entropy/

[7]: N.Gregory Mankiw. Principles of Economics 6e. South-Western, Cenage Learning.

[8] Peter A. Corning. Holistic Darwinism: Synergy, Cybernetics, and the Bioeconomics of Evolution. University Of Chicago Press. 2005.

[9]: N.Gregory Mankiw. “A Carbon Tax that America could Love with”. New York Times. 01. Sept. 2014.

[10]: Buttonwood’s Notebook. “Energy use and Growth: an Optimistic View”. The Economist. 26 June 2013.

The 2nd Law (part 2) – My Issue with Ecological Sustainability and World Economy (Mankiw’s Ten Principles)


ABC_Towards_Ecological_Sustainability

Global Footprint and Ecological Sustainability

19th August 2014, planet Earth: humanity has exhausted all the biological resources provided by nature in one year [1].

According to Global Footprint Network, last 19th August was the Earth Overshoot Day 2014. That means, from 20th of August till the end of the year 2014, in order to support world consumptions and human activities, the world economy has to exploit natural resources, such as water, soil and gas, that nature is not able to recover back as usable as well as all the carbon dioxide emissions will not be assimilated by the ecosystem anymore.

Till 70s, human activities where below Earth’s biocapacity. From 80s, the world economy has always overshoot the biocapacity and it’s getting higher and higher every year. Financially speaking, is like withdrawing from a bank account more money than incomes: It’s not sustainable in the long run.

Way towards ecological sustainability (Mankiw’s Ten Principles)

According to Mankiw’s ten Principles [2], there are manly two ways\approaches that might promote ecological sustainability:

  1. Regulations
  2. Decision Making and Consumer Awareness

1. Regulations

Recalling the so called “invisible hand” of principle n.6, markets are a good way to organize economic activities:

Households and firms that interact in market economies act as if they are guided by an “invisible hand” that leads the market to allocate resources efficiently. The opposite of this is economic activity that is organized by a central planner within the government.

Meanwhile, Governments and policy makers can fix market inefficiencies, as stated in principle n.7:

When a market fails to allocate resources efficiently, the government can change the outcome through public policy. Examples are regulations against monopolies and pollution

Therefore, according to principle N.7, Governments and policy makers can regulate market ecological inefficiencies towards sustainability as well. For example, through incentives in renewable energies (see also principle n.2), taxes or regulations.

As an example, with regards to climate changes, Mankiw himself suggest (see A Carbon Tax that America could love with, New York Times [3]) to put a price (tax) on carbon emissions. In such a way, Governments, by charging a fee for each carbon emission, will “internalize the external costs” due to climate changes (hurricanes, global warm,…).

Prices of Product\Services with higher carbons emissions will have higher prices and thus people will be inactivated to buy other products with less carbon emissions (see also Principle N.2), look for alternatives, or even not to buy it (see also principle N.1).

2. Decision Making and Consumer Awareness

Since people have a limited amount resources in terms of time and money, behind each consumptions there is always a tradeoff.

That means, People Face Tradeoffs (principle n.1):

To get one thing, you have to give up something else. Making decisions requires trading off one goal against another.

As an example, in the same post concerning climate changes [3], Mankiw’s pointed out that people might decide to:

  • buy a smaller, more fuel-efficient car;
  • use public transportation;
  • eat more locally produced foods, which need less fuel to transport;
  • ….

as a trade-off for introducing in the ecosystem less carbon emissions and waste.

Therefore, people decision-making and how much people is sensitive toward sustainability issues when consuming, have an impact on the ecological footprint.

My issue about economic activities and (bio) sustainability

In order to achieve ecological sustainability, there are two approaches argued among economists, activists, biologists and mathematicians. One is through regulations (tax, incentives, agreements,…) and the second one through more responsable decision-making by consumers and firms.

Regulation approach concerns “How Economic Work as a Whole” Mankiw’s principles:

  • n.5: Trade Can Make every one better off;
  • n.6: Market are a good way to organize economic activity;
  • n.7: Governments can improve economic outcomes;

While, Decision Making is about awareness on biological impacts of consumptions. “How People Make Decisions”  are explained by the following Mankiw’s principles:

  • n.1: People Face Trade Offs
  • n.2: The Cost of Something is what you give up on get it
  • n.3: Rational People think at the Margin
  • n.4: People Respond to Incentives

Regarding regulations, Mankinw’s himself complained how difficult is to convince politicians to put a fee on a carbon tax. Elections debates are about reducing rather than increasing taxes [3] and usually people is not willing to vote a candidate who promotes new taxes.

Concerning Decision Making, some researches applied thermodynamics principles (2nd Law) to Economics (Thermoeconomics) and theirs conclusion was that each money transaction as well as consumptions is essentially a flow of energy [4][5].

Thus, no matter if the decision is to buy a smaller and more, fuel-efficient car or use public transportation: an amount of energy will be dispersed anyway.

But, what happen in everyday life when a new car is bought? Actually, there is a money flow from the consumer to the retailer.

Thus, since for each consumption there are either  a money flow and an energy flow, my issue regarding ecological sustainability of economy is:

Why not considering money as a measure of energy and biocapacity flows?

People use money as a tool for exchanges, and such interactions are described by the remaining three Mankiw’s principles (How People Interact):

  • n.8: A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services;
  • n.9: Prices Rise When the Government Prints Too Much Money;
  • n.10: Society Faces a Short-Run Tradeoff Between Inflation and Unemployment;

Some scientists already pointed out the missing link between Information Theory (Cybernetics) and social sciences (e.g. economy) as well as biologists have some concerns about sustainability of an economy based on endless growth.

Thus, how to create a link between human economy and the Earth biocapacity thanks to the achievements and researches in Economy, Physics, Biology and Cybernetic?

Decision Making and Policies have a key role for pursuing economy towards ecological sustainability, as described by Mankiw’s principles from number 1 to 7.

Nevertheless, till economy is not linked with natural environment and its limited biocapacity neither policies and more conscious behaviors towards sustainability will be effective since what is missing is how people interact: money flows and monetary policies.

With regardless to Mankiw’s principle n.2:

The Cost of Something is What You Give Up to Get It.

So, how much does it cost to give up to link economy with natural environment?.

There is an Optimistic View about a self-regulation of the world economy that, thanks to the supply-demand’s law, will guarantee an endless growth and energy efficiency as well [6].

However, relying mainly on the supply-demand’s law it is a reactive, rather than proactive, attitude towards sustainability.

Since economy is also a social science, having such an optimistic view it means forgetting what happened in the 18th century to the population of Easter Island: they dropped from 15.000 to 2.000-3.000 inhabitants because of an ecology disaster created by themself.

People of Easter Island realized supply-demand’s effect when it was too late for recovering their ecosystem and its biocapcity.

Economy, ecosystems and complex systems in general, have outcomes that are not predictable and controllable in the long-run.

Avoiding to consider the constraint of a limited Earth’s biocapacity, it means avoiding the risk of definitely compromise the entire ecosystem without any chance for recovering.

So the question is: would all humankind be reactive or proactive towards the ecological sustainability issue?

Feelink – Feel & Think approach for doing life!

Resources

[1]: Earth Overshoot Day. “Global Footprint Network“. http://www.footprintnetwork.org

[2]: N.Gregory Mankiw. Principles of Economics 6e. South-Western, Cenage Learning.

[3]: N.Gregory Mankiw. “A Carbon Tax that America could Love with”. New York Times. 01. Sept. 2014.

[4]: A. Annilla, S. Salthe. “Economy Evolves by Energy Dispersal”. Entropy. 11-2009. http://www.mdpi.com/journal/entropy/

[5]: M. Gong, G. Wall. “On Exergetics, Economics, and Optimization of Technical Process to Meet Enviromental Conditions”. International Conference on Thermodynamic Analysis and Improvements on Energy Systems. 10-13 June 1997. Beijing, China.

[6]: Buttonwood’s Notebook. “Energy use and Growth: an Optimistic View”. The Economist. 26 June 2013.

Caution!!! BigData S.L.I.P.S.: five tips when using analytics


BigData_SLIPS

Along my brief research on BigData, I’ve found 5 type of S.L.I.P.S that a data scientist might encounter along the way: Statistic, Learning, Information, Psychology and Sources.

1) Statistic (Left Foot)

Is without any doubt the main and well-known technical aspect. The most common slip concerning statistic is misleading correlation with causation. In other words, discovering correlations among variables doesn’t necessarily imply a cause-effect relation. Mathematically speaking, correlation is a necessary but not sufficient condition for a cause-effect relationship.

(see also K. Borne: Statistical Truisms in the Age of BigData).

2) Learning (Right Foot)

OK, lets assume that a cause-effect relationship exists: which model\algorithm to chose in order to describe the relationship? There are many: ARMA, Kalman’s Filter, Neural Networks, customized,… which one fits best? A model that has been validated with the data available now might be not valid anymore in the future. So, constantly monitoring and measure the error of prediction with the estimated values by the model.

Choosing a model implies making assumptions. In other words, never quit to learn from data and be open to break assumptions otherwise predictions and analysis will be slanted.

3) Information (Right Hand)

Which information is really meaningful? That’s the first point to clarify before implementing a bigdata initiative or any new BI tool for your business.

Another point is misleading information with data. According to information theory, and a well-grounded common sense as well, data are facts while information is an interpretation of facts based upon assumptions (see also the D.A.I. model).

(see also: D. Laney & M. Beyer: BigData Strategy Essentials for Business and IT).

4) Psychology (the Head… of course!)

Have you ever heard about eco-chamber effects and social influence? Well, what happen is that social media might amplify irrational behaviours where individuals (me included) base its decisions, more or less consciously, not only on their knowledge or values but also on the actions of those who act before them.

In particular, whenever dealing with tricky-slippy tools such as bigdata sentiments is better to consider carefully the relevance and impacts of psychology and behaviours. The risk is to gather data that is intrinsically biased (see also My Issue with BigData Sentiments.)

(see also:

D. Amerland: How Semantic Search is changing end-user behaviour

C. Sunstein: Echo Chambers: Bush v. Gore, Impeachment, and Beyond – Princeton University Press

e! Science News: Information technology amplifies irrational group behavior).

5) Sources (Left Hand)

Variety!!! That is one of the three suggested by D. Laney: Volume, Velocity and Variety. Not only choosing the right model is important in order to avoid predictions’ and insights’ biases: what about the reliability of the sources of data that has been used for the analysis? If the data is biased predictions and insights will be biased as well. In particular, any series of data has a variance and a bias that can not be eliminated.

How to mitigate such a risk? By gathering data from different sources and weight them accordingly to its reliability: the variance.

Moreover, as a bigdata scientist and as a consumer as well, never forget positive and negative SEO tactics. There is a social-digital jungle there! (see Tripadvisor: a Case Study to Think Why BigData Variety matters).

Feelink – Feel & Think approach for doing life!

The D.A.I. model to better understand different mindests and cultural values: why social responsibility means higher prices?


Few weeks ago, from a new Twitter follower, I’ve received a direct message with the following question: “Do you spend more money with a brand that you think is socially responsible?”. I felt immediately that it could be either a marketing research or a way to create awareness on something, nothing bad on it whatever it is.

Anyhow, the aim of a question is to gather an information. So which is the information that the question above wants to address? Suddenly came into my mind a principle from information theory: information is an interpretation of data based on assumptions (see figure). Usually assumption are due to culture, mindset and context in general. Think, as an example, how the same gesture of moving the head up and down (data) means yes for Europeans and Westerns but for Indians means exactly the opposite.

information_assumption

So, why not applying such a principle from information theory also for every day life in order to better understand ourselves as well as others? Let’s analyze deeper the question “Do you spend more money with a brand that you think is socially responsible?”

First of all, the question is a close one since the answer must be yes or not. When I’ve realized that I felt myself uncomfortable… why? I thought and I realized that is due to the value of “social responsibility” that in the question is forced to be against “price” (money).

Acknowledge that, I inferred unconsciously that if the answer of the question would have been YES it means that social responsibility is priceless thus more important that money. Vice versa, if the answer would have been NO.

…however, why inferring such considerations? which is the assumption behind? That was my doubt and my hypothesis was that the assumption behind the tricky question “Do you spend more money with a brand that you think is socially responsible?” is: beeing social responsible costs!

…wow, eureka! So, why not creating such conditions so that pursuing social responsibility implies intrinsically cheaper products?

That was my question that I’ve delivered to the owner of the research…and, as an incredible surprise, I’ve receive the following answer: “The impression is socially responsible = higher product cost to the consumer.”

Bingo! The assumption that I’ve inferred is right. There is a kind of cultural impression, suggestion and mindset that unconsciously let us to think (me included) that if you want social responsible products there are no other ways: you have to pay more! Why?

Paradoxically, since people behave according to incentives, if socially responsibility implies intrinsically cheaper prices instead, a virtuous circle will be established!

How to create a context where the assumption “socially responsible = higher product” is replaced with “socially responsible = cheaper product”?

…I don’t know, any idea?

Meanwhile, why not applying the DAI (Data, Assumption, Information) model whenever we inferred quick answers?

Behind each information there is an unknown world of undisclosed assumptions.

Feelink – Feel & Think approach for doing life!

Semantic search algorithm, behaviorism and fairy-tale Snowwhite with the seven dwarfs. Would SEO behave like Grumpy?


How does semantic search work? Which are the implications regarding SEO tactics and users/customers’ behaviors?

Google search is not unlike the “Mirror, mirror on the wall, who’s the fairest of them all?” where the question asked, reveals (in the fairy tale) the Evil Queen’s narcissistic obsession

, what a great metaphor to explain how semantic search works! (see Google Search and the Racial Bias).

I will take the assist from David Amerland to help me to better understand how the SEO world (something still unknown from me) as well as remembering childhood times with the fair tale “Snow White and the seven dwarfs“.

So, let’s have a look at the characters of the famous fairy-tale:

The mirror is the result of the search engine. According to what I’ve understood about semantic search, the mirror reflects back a result that is contextualize accordingly to the user and his/her relationships among the social networks as well as thorough the analysis of past behaviours.

Snow White is the most beautiful creature in the WEB forest. She publishes smart content as well as she establishes such trusted relationships in the social medias so that the mirror (the semantic search engine) reflects back a beautiful princess… accordingly to the algorithm I would say.

The evil queen is the bad guy, attempting to be viewed as the most beautiful in the WEB forest while it is not. The evil queen struggles and suffers a lot for that, since the mirror suggest always Snow White as the best result… the life in the digital jungle is not so easy for the evil queen!

The poisoned apple represents a trick, a negative SEO attack where the objective either is to game the search engine (the mirror) or to compromise the reputation of Snow White. Fake reviews, negative or positive SEO tactics, are just an example of how an apple could be poisoned in order to kill digitally a competitor and game the search engine algorithm (see the case of Tripdavisor).

The seven dwarfs are data scientists and SEO experts that are mining the WEB forest in order to get some valuable and reliable information from the WEB. Usually they are well-intentioned and thus willing to protect the beauty of Snow White from negative SEO (the poisoned apple and the evil princess).

The charming Prince represents all the users, companies and individuals, that go deeper and deeper into the WEB forest in order to discover the truth. Mirror’s result apart: Who is really the fairest in the WEB forest?Encountering few smart dwarf might be useful for the charming Prince, both in the forest to discover the beauty of Snow White and in the WEB to find out great contents and reputations accordingly to personal impressions rather than only relying on algorithms.

…so, which is the moral of the fairy-tail “Snow White and the seven dwarfs” applied to the modern semantic search and SEO?

An interesting point has been pointed out by D. Amerland in his article “How semantic search is changing end-user behaviour“. In particular:

The fact remains that the web is changing, search has changed and the way we operate as individuals, as well as marketers, has changed with it.

Since the semantic search is so powerful to influence the behaviour of the end-user (individuals, companies,…), the point is: what kind of algorithm there is behind the mirror on the wall? Which are the criteria behind the result that identify the fairest princess in the WEB?

More interesting doubt: what happen if the criteria behind the search algorithm (the mirror) change so that the fairest in the WEB would be Grumpy, one of the seven dwarfs? Would all the end-user and SEO really want to become and behave like Grumpy?

seo_mirror_on_the_wall

Barriers to change… Should I stay or should I go? A ripped up speech


Ferdinandeo (Triest), Saturday 21st September 2013 around 12:00 a.m.: what to say as a final speech after attending an MBA program in behalf of all the class?

Here below an idea, a story about barriers to change… delivered here, in a comfortable “context”, with 10 day of delay: should I stay or should I go?

Should I stay or should I go? A story about barriers to change

Should I stay or Should I go? That was the question that each MBA participant has faced when applying for the master program in business administration here at MIB School of Management.

Should I get an MBA in my country or abroad?

The MBA class of the 23rd edition was almost equally distributed: 60% foreigners and 40% Italians. Who made the right decision?

Nobody knows… now!

Anyhow, what all the participants of the 23rd edition have in common, both foreigners and Italians, is that they have started a changing process in a way:

someone changed country, some other quit a job and somebody did both.

Was that easy? Of course it was not!

Why? Because each change requires a transformation process, and each transformation process requires resources:

physically, mentally and emotionally.

So… which are the barriers to change? I would say mainly three:

unawareness, laziness and conservation of the status quo.

The first one, unawareness, means that since I don’t know there is a problem, why to invest resources for a change? How to start a changing process in such a situation? Simply by creating awareness: “Houston, we have a problem!”

The second one, laziness, I know there is a problem but it requires too much resources: physically, mentally and emotionally. In this case the therapy is defining an objective that is attractive enough in order to justify the effort.

The third one, conservation of the status quo, is the toughest: I do know there is a problem and I do not want to change since I feel myself comfortable in the current situation. I am not sure… in this case uncertainties about the current situation and status quo will establish a changing process.

Why uncertainties? According to a passage taken from a speech held here in this hall few months ago: “Since the economy is not growing in Europe and in the Western counties, the only alternative for getting good jobs is to go abroad where the economy is booming”

So… should I stay or should I go? According to this story, I would say: it depends!

It depends on how much uncertain and uncomfortable you are with your current situation and status quo… unless new innovative opportunities and unconventional alternatives will be created from scratch.

All the best for the MBA23 and MBA24 classes!

Thank you!

The story was slightly different and this speech has not been delivered because the “context”, the final ceremony for the MBA23 class, was not comfortable for the speaker.

How to break such a uncomfortable situation? …well, you already know the moral of the story: by creating uncertainties through innovative and unconventional alternatives!

Feelink – Feel & Think approach for doing life!

20130930-101901.jpg

My Issue with BigData Sentiment Bubble: Sorry, Which Is the Variance of the Noise? (NON Verbal Communication)


Why sentiment analysis is so hard? How to interpret the word “Crush” in a tweet? Crush as in “being in love” or Crush as in “I will crush you”? According to Albert Mehrabian communication model and statistics, I would say that on average a tweet for a sentimenter has an accuracy of 7%. No such a big deal, isn’t it?

Let’s think about it by considering, as an example, the case of the sentiment analysis described in My issues with Big Data: Sentiment: crush as in “being in love” (positive) or crush as in “I will crush you” (negative)?

What is a sentimenter? As a process, is a tool that from an input (tweets) produce an outupt like “the sentiment is positive” or “the sentiment is negative“. Many sentimenters are even supposed to estimate how much the mood is positive or negative: cool!

Paraverbal and non-verbal communication

Anyhow, according to Albert Mehrabian the information transmitted in a communication process is 7% verbal, 38% paraverbal (tone of the voice) and the remaining 55% is non-verbal communication (facial expressions, gestures, posture,..).

In a Tweet, as well in a SMS or e-mail, neither paraverbal nor non-verbal communication are transmitted. Therefore, from a single tweet is possible to extract only the 7% of the information available: the text (verbal communication).

So, what about the paraverbal and non verbal communication? During a real life conversation, they play a key role since they count for 93% of all the message. Moreover, since paraverbal and non verbal messages are strictly connected with emotions, they are exactly what we need: sentiments!

Emotions are also transmitted and expressed though words such as “crush” in the example mentioned. However, within a communication process, not always the verbal and non-verbal are consistent. That’s the case when we talk with a friend, he\she saiys that everything is ok while we perceive, more or less consciously, something different from his\her tone or expressions. Thus we might ask: are you really sure that everything is ok? As a golden role, also for every day life, I would recommend to use non-verlbal signals as an opportunity to make questions rather than inferring mislead answers (see also: A good picture for Acceptance: feel the divergences & think how to deal with).

For these reason, the non-verbal messages are a kind of noise that interferes with verbal communication. In a tweet, it is a noise that interferes with the text. Such a noise can be as much disturbing as much the transmitter and the receiver are sensitive to the non-verbal communication. It might be so much disturbing to change completely the meaning of the message received.

Statistic and Information Theory

From a statistic point of view the noise might be significantly reduced by collecting more samples. In Twitter, a tweet is one sample and each tweet have 7% of available information (text) and 93% of noise (non verbal communication) that is the unknown information.

From a prediction\estimation point of view no noise means no errors.

Thus, thanks to BigData, if the sentimenter analyzes all the tweets theoretically it’s possible to reduce the noise to zero and thus having no prediction error about sentiments…...WRONG!!!

Even if the sentimenter is able to provide a result by analyzing all the BigData tweets (see Statistical Truisms in the Age of Big Data Features):

the final error in our predictive models is likely to be irreducible beyond a certain threshold: this is the intrinsic sample variance“.

The variance is an estimation of how much samples are different each others. In the case of a communication process, that means how much emotions are changeable through time. Just for fun, next time, try to talk to a friend by changing randomly your mood happy, sad, angry,..and see what happen with him\her (just in case, before fighting tell him\her that is part of an experiment that you’ve read in this post).

In Twitter, the variance of the samples is an estimation about how much differently emotions are impacting the use of certain words in a tweet, from person to person at a specific time. Or, similarly, by considering one person, how much emotions are impacting the use of words differently through time.

Like in a funnel (see picture), the sentimenter can eliminate the noise and thus reduce the size of the tweet bubbles (the higher the bubble the higher the noise) till a fixed limit that depends on the quality of the sample: its variance.

Sentimenter_Twitter_Funnel

So, I have a question for bigdata sentimenters: which is the sample variance of tweets due to non-verbal communication? Acknowledge the sample variance, the error of prediction of the best sentimenter ever is also given:

error of prediction (size of the bubble sentiment) = sample variance of tweets…

…with the assumption that both samples and algorithm used by the sentimenter are not slanted\biased. If this is not the case, the sentiment bigdata bubble might be even larger and the prediction less reliable. Anyhow, that is another story, another issue for BigData sentimenters (coming soon, here in this blog. Stay tuned!).

Feelink – Feel & Think approach for doing life!

The 2nd Law: a MUSE for a Sustainable Economy


What does it mean sustainable? After the last financial crisis in 2007 as well as the issues of global warming, pollution and deforestation the word “sustainable” has become very popular.

That is the question that many people have. That’s why there are many best sellers about economic crisis. That’s why nowadays economists are so popular… that’s why I’ve just bought the last book by @TimHarford “The Undercover Economist Strikes Back”.

In their latest album, “The 2nd Law“, the rock band @muse spreads out to the all the fans the concept of entropy and the second principle of thermodynamics. Paraphrasing Rockonomics by Tim Harford (see Undercover Economist: the law of rockonomics), that’s an example of Rockphysic…cool, check it out!

MUSE – The 2nd Law: Unsustainable

All natural and technological processes proceed in such a way that the availability of the remaining energy decreases. In all energy exchanges, if no energy enters or leaves an isolated system, the entropy of that system increases. Energy continuously flows from being concentrated, to becoming dispersed, spread out, wasted and useless. New energy cannot be created and high grade energy is being destroyed. An economy based on endless growth is Unsustainable

The fundamental laws of thermodynamics will place fixed limits on technological innovation and human advancement. In an isolated system the entropy can only increase. A species set on endless growth is Unsustainable

So, according to the second law of thermodynamics each transformation requires energy (see also Does the price for inequalities exist because of the second law of thermodynamics?). If the system is isolated there is no way to recover such energy in a state that can be used. An example, think about a car as a system that transforms the chemical energy of the gasoline in mechanical energy and heat (…mainly heat actually). If the car is an isolated system, once the tank is empty the car can not work anymore. Fortunately the car is not isolated, since it’s sill possible to go to the patrol station and fill again the tank with additional energy: gasoline.

What about the planet earth: is it an isolated system? Is the world economy as is defined nowadays sustainable accordingly to the second law of thermodynamics? For @MattBellamy, @CaptMorganized, @CTWolstenholme and their friend Charles no way: it’s unsustainable.

Anyhow, since the planet is not isolated there is a chance to create a sustainable economy and thus to avoid extinction. How? Every second, every minute every day for billions of years the planet Earth has received energy from the Sun. It’s thanks to the solar energy that there is life in our planet and all the human activities are possible (even blogging!). Both, life and world economy need energy. In order to be sustainable, the sum of the energy needed for life and human activities must be lower that the solar energy received from the Sun (see Life on Earth). In this way the stock of energy available in the biosphere (number of species, forests, oil,…) will increase or, if the energy consumed equals the energy received, at least remains constant (see Figure below).

charles

On the contrary, if the energy consumed by life and human activities is higher than the energy coming from the Sun, the energy balance is negative and the stock of energy in the biosphere will decrease (extinctions of species, deforestation, oil, gas,…). That condition can not be sustained for a long period since the stock of energy available in the planet is finite. It’s like a bank account: expenditures higher than the incomes can be sustained till the bank account is positive!

That’s way Entropy likes the song “Time is on my side” by Rolling Stone. Soon or later the 2nd Law will impose its energy dictatorship to all the humankind.

Rolling Stones – Time is on my Side

According to Tim Harford  there is an Optimistic View about a self-regulation of the world economy that, thanks to the supply-demand’s law, will guarantee an endless growth and energy efficiency as well (see Energy Use and Growth: an Optimistic View).  In particular, for Tim Harford the key fact is that:

Economic growth and energy growth are not the same thing, and there are good reasons to believe they’re already in the process of decoupling from each other

Believe!?! Despite there are good reasons, why the sustainability of an endless economic growth is not certain and still a Belief? Is really knowledge what is missing?

What about replacing “believe” with more certain words such as “assert”, “confirm” or “state”? Few simple questions should be answered:

  1. How much energy the planet Earth receives from the Sun [S]?
  2. How much energy is needed for supporting life (carbon cycle,  photosynthesis, climate,…) in the Earth [L]?
  3. How much energy is consumed by the world economy [E]?

Are the life and the human activities together in the planet Earth sustainable?

If

Energy from the Sun [S] < Energy for sustaining Life [L] + Energy consumed by the economy [E]

Mr. Charles, after few calculations, will give the answer: UN-UN-UNSUSTAINABLE!

So, conscious about the uncertain sustainability of the world economy as it is defined nowadays, let’s move our bodies following the irresistible funky rif of “Panic Station” from “The 2nd Law” album by Muse while since entropy is inattentive (it’s still singing “Time is on my side”).

MUSE – Panic Station

You won’t get much closer
Until you sacrifice it all (all the energy available)
You won’t get to taste it
With your face against the wall (the truth of The 2nd Law)

…actually, the humankind has already “tasted” the unavoidable rule of the 2nd law. In the 18th century, the population of Easter Island has dropped from 15.000 to 2.000-3.000 because an ecology disaster due to an unsustainable use of the natural resources (see Easter Island, they harvest all the woods in the island). If the inhabitants of Easter Island had had the chance to see a concert of “The 2nd Law” tour in Rapa Nui probably they would have decided not to hack up so many trees. Is the humankind smart enough to learn from his mistakes and make the optimistic view of growth really sustainable? Who knows!

Feelink – Feel & Think approach for doing life!

Chaos vs. Determinism: why not both? From evolutionary theory to BIG Data challenge


How was the Universe created? It was generated by chance or it was created with a specific purpose?

Chaos vs. Determinism is one of the toughest issue to address for philosophers and it has been debated since the age of the ancient Greece.

Is the world nowadays governed by chaos or determinism? Hard to say, but what I notice is that sometimes Chaos and Determinism together might create an outstanding synergy. When? Here there are at least four examples: the Evolutionary Theory, the New Product Design process, the Lateral & Vertical thinking and the challenge of Big Data with Social Media.

1.  Evolutionary theory

The Darwin’s evolutionary theory is undoubtedly the most meaningful example of how chaos and determinism can work very well together…otherwise we couldn’t be here to discuss how this world works!

Since also Mother Nature cannot foreseen what will happen in the future, how is it possible to survive? By generating continuosly chaotic genetic mutation in the DNA a thus create a large variety of species: simple and brilliant! The generation of new alternatives, through DNA mutations, happens also when the environment is not changing because such variety of species will more likely guarantee the life in our planet Earth if a big change occurs.

Just think what happened 65milion years ago with the extinction of Dinosaurs. The impact of a big asteroid changed radically the climate and the T-Rex, together with his big friends, wasn’t able to adapt to the new environment condition. What happened is that a new family of species more adaptable escape from the extinction: mammals.

Mother Earth is not efficient like human being tends and likes to be. She is effective, likes redundancy and varieties in order to let the life carry on. How many times financial advisors said? “Diversification! That is the way to mitigate the risk of market’s volatility and uncertainty”. Either they consciously know the evolutionary theory or they are survivors from the natural selection.

2.  New Product Design                                                       

Another example is taken from the business world. Words like innovation, internationalization, diversification, mass-customization, not only have inspired the famous “business lingo bingo” game in order to stay awake during a work meeting, but also they have in common the same objective: continuously create new products. A company that doesn’t invest on the development of new product, in order to fill the customer needs that change through time or to reach\establish new market, is doomed to die.

Anyway, a new product is the result of a process: the New Product Design (NPD).Well, such process is divided into many different stages. Briefly, at the beginning there is brainstorming phase in which are collected all the new ideas in terms of needs without thinking if a new idea makes sense or is not feasible. For example, thinking about a new umbrella: “I want to use an umbrella like a parachute!” Why not? …ok, probably using an umbrella as a parachute is not practicable. So, how to organize and select all the ideas that came out from a chaotic brainstorming? A solution is the so called KJ method invented by Kawakita Jiro. It’s a process that organize, prioritize and select all the needs that really matters in a structured way. Probably also a parachute umbrella, is needed who knows!

Once the needs have been classified, the NPD process analyzes systematically all the needs related to the features required by the new product through the QFD (Quality Function Development) and the Pugh matrix. As a result, there is one or a couple of new solutions that are feasible and that fit all the significant needs. Just in case, if doesn’t cost so much effort, also others additional needs like “parachute umbrella” might be added in the new product in order to be “different” in the market.

Now, considering the brainstorming as a genetic mutations and the KJ\Pugh matrix as a natural selection, does the NPD process is like the evolutionary theory applied to products?

3. Lateral vs. Vertical thinking

Considering again the example of the umbrella parachute, it came out during the brainstorming phase without thinking if it would be feasible or not, while during the NPD process it might be more likely eliminated due to many technical as well as reasonable limitations: is there someone that really need a parachute umbrella?

This is the first distinction that Edward de Bono, the inventor of the lateral thinking, suggets between the Lateral and the Vertical thinking. Respectively, one is productive while the other is selective. Not only, Edward de Bono defines many others adjectives that characterized the vertical and lateral thinking as follow:

Lateral thinking: productive, stimulating, discontinuous, incoherent, do not use negations, open to intuitions, unspecific, less probable, open\probabilistic process.

Vertical thinking: selective, analytical, continuous, coherent, use negations, relevance focused, specific, more probable, close\deterministic process.

According to the adjectives mentioned above the aim of the lateral thinking is to find new solutions\ideas in an incoherent and chaotic way in order see the things from different perspective. On the contrary the vertical thinking select the intuitions in a structure way in order to develop a new coherent model. That’s what happened to the father of Quantum Theory Max Planck.

At the beginning ,when he got the intuition to assume that the energy of the particles can change only in discrete amounts, no less that the so called Planck constant, Max Planck was extremely skeptical because such assumption was not coherent with classical physic. Than many others brilliant minds such Bohr, Heisenberg, de Broglie, Einstein, Schrödinger, Pauli and others demonstrated that the assumption of Plank works with physical phenomena at microscopic scales. A new physic model was born thanks to a winning combination between the lateral and vertical thinking: the Quantum Mechanics.

More: see Lateral Thinking by Edward de Bono.

4. Big Data Challenge

Social Media phenomenon is undoubtedly having significant impacts in the way the people communicate and interact as well as the businesses operate. Some decades ago the main trouble was how gathering the needed information while nowadays it’s the opposite: which information is really relevant? The Big Data is going to address this issue, in order to organize, classify and select the relevant information that is generated almost randomly by billions of sources, me included, in the world. Why the information is generate randomly? Well, the Big Data issue is going to be addressed from the technical point of view and many tangible results has been achieved. Think about the mass-customized advertisement and NPD (new product design, see above).

However, Big Data is not only a question of technology. Also the human factor is interested since the information technology and social media might amplify an irrational behavior of groups by creating the so called Social Object’s effect. Retweets call likes, likes call posts and posts calls retweets again into spiral loop. In fact, as Tom Dickson showed: “It blends!

Anyway, why the social object might stimulate an irrational behavior? Prof. Vincent F. Hendricks from the University of Copenhagen underline the fact that the online discussion take place in a kind of echo chambers: “In group polarization, which is well-documented by social psychologists, an entire group may shift to a more radical viewpoint after a discussion even though the individual group members did not subscribe to this view prior to the discussion” (see Information technology amplifies irrational group behavior). That is because the human behaviuor is highly influenced by the group.

The influence of the grpup is one aspect. Than, when I discovered that a social object in Twitter or Facebook reaches its peak of influence only after two hours and then it rapidly declines I realized that also the time factor might force to an irrational behaviour. If you want to follow the peaks you must react quickly, and when a quick reaction is required the human brain rely to the amygdala by asking: flight or fight?

The amygdala is switched on whenever a dangerous or a stressful situation occurs. The amygdala, since activates quick reactions, saved humans (and other species like rabbits!) from extinction when thousands and thousands of years ago the human being were struggling against predators every day. Fortunately a social object doesn’t hurt like a saber-toothed tiger so there is no risk to die physically, possibly only digitally.

Anyway, in order to fully exploit the chaos generated by the social media, dealing amygdala might be useful in order to navigate rather than drifting in the digital see. So feel, think and than just in case post, tweet and like.

Chaos and Determinism: inseparable twin brothers of knowledge!

Feelink – Feel & Think approach for doing life!

A possible TIP for giving effective feedbacks: wearing a SCARF that is SMART, does it make sense?


Four ways to provide effective feedbacks

Few weeks ago, the Time has posted an article by Annie Murphy Paul: “Four Ways to Give Good Feedback” (originally posted in the Brilliant Report blog). As reported in the post, “feedback is a powerful way to build knowledge and skills, increase skills, increase motivation, and develop reflective habits of mind in students and employees“. Briefly, the four ways suggested to provide effective feedbacks are: 1) supply information about the learner is doing, 2) taking care about how a feedback should be presented, 3) oriented feedback around goals and 4) use feedback to build metacognitive skills (develop the awareness of learning).

What’s stimulated my curiosity is the point 2: How present a feedback in a way that is effective? I think is the toughest aspect because requires something that the brain naturally refused to do: deliver the message according to a mindset that is different! In the article mentioned above, taking care about how feedbacks should be presented means avoiding three things: a) closely monitoring the performances because reduce the self-consciousness of the learner b) providing unique solution like “This is how you should do it ” – because it might be interpreted as an attempt to control, c) establish a sense of competition among colleagues because might reduce the engagement.

Thus, how can be ensured a good feedback in practice? An idea could be to combine together the S.C.A.R.F. given by Social\Cognitive Neuroscience and the S.M.A.R.T. criteria for setting well-defined objectives. Let’s see how the SMART-SCARF matrix works after a brief description of the two models.

The S.C.A.R.F. model from Social and Cognitive neuroscience.

M.D. Liebarman & E.I. Eisenberger provided many insights regarding Social, Cognitive and Affective neuroscience. In particular, in their article “The pains and pleasures of social life: A social cognitive neuroscience approach” they discovered that there are mainly two circuits that the human brain activates: simply, one circuit for the pains and one circuit for the pleasures. Acknowledged that, the social and cognitive neuroscience might be useful also for giving some further specific insights in order to provide effective feedbacks. The S.C.A.R.F. is a framework in which the “approach (reward)” and the “avoid (threat)” instinctive responses, given by the “pleasure” and “pain” circuits respectively, are mainly related to five human social domains of experience: 1) Status – the relative importance to others, 2) Certainty – ability\need to predict the future, 3) Autonomy – sense of control, 4) Relatedness – as a sense of safety with the others and 5) Fairness – as the perception of a fair exchange between people and justice.

More: “SCARF: a brain-based model for collaborating with and influencing other“.

Each one of us has lived different experiences in various environments and thus there are many different S.C.A.R.F.s as well… as a matter of fact, have you ever seen in a shop only scarfs made only by silk or only blue colored?

If someone likes this kind of

SCARF2

, it means that the main dimensions that stimulate the “approach (reward)” and the “avoid (threat)” responses are the Status and the Autonomy. A person with such a S.C.A.R.F. tends to be more competitive because for them winning a game, be the best student or being promoted in their company will more likely activate the “approach (reward)” response. While the “avoid (threat)” response will be activated when they perceive a reduction of their Status. For example, pushing solutions might be tricky since an advice might be perceived from a person with a high Status as follows: “You are giving me advises, because you think you have more skills\experience than me.” – The emotional reaction of such perception is more likely negative. Even if the coach has much more experience and skills than the coachee, avoiding to emphasize\remark such difference will make feel the coachee comfortable.

At the same time, since also the Autonomy dimension is more important than the others, a good mood will be established whenever a sense of autonomy or control increase. For example, that might be achieved by letting to organize the work, schedule and desk. On the contrary, setting, defining and monitoring constantly the performances of such employees will increase the level of control and thus might activate the “avoid (threat)” response.

Now, how is it possible to estimate and figure out which SCARF suit well who is going to receive a feedback? Since it has been described the SCARF model, it’s like wondering which are the preferences regarding clothes and fashion of people: just observe, listen and understand. In other words, before giving feedbacks it’s better to know well each persons. Thus, apart from all the recommendations, some common sense might be useful too.

The S.M.A.R.T model for well-set objectives

As mentioned in the article by Annie Murphy Paul at point 3), a well stated feedback is oriented around goals. A cool and well-known tool for providing well-defined objectives is the S.M.A.R.T. model in which a good objective must be: 1) Specific – What?, 2) Measurable – If you can’t measure it you will NOT handle it, 3) Attractive – Why? What motivated to do such effort?, 4) Realistic – not too difficult and on too easy 5) and Time-scaled – no time limit, no urgency!. The S.M.A.R.T. model might be useful in order to set the objectives for an evaluation feedback as well for the definition of a personal development plan.

As for the dimensions of the S.C.A.R.F., also for the five ones in the S.M.A.R.T criteria each person is more sensitive in some aspects rather than others. Thus, the common sense “know people before” is crucial in order to deliver the feedback in a way that encourage and motivate.

See also the S.M.A.R.T. criteria.

A TIP for giving effective feedbacks: a SCARF that is SMART

Now, given the S.M.A.R.T. criteria for well-defined objectives and the S.C.A.R.F. framework with its five social\cognitive dimensions (Status, Certainty, Autonomy, Relatedness and Fairness), how should be possible to combine these tools together in order to provide feedbacks effectively by engaging people and avoiding threats? Let’s take the S.C.A.R.F. mentioned above with a high perception in the Status and Autonomy dimensions. Which are the “DOs” and the “DO NOTs” for these dimensions?

With a high Status, in order to activate the “approach (reward)” response it’s necessary to recognize the previous achievements\improvements before specifying the new ones (the “S” of S.M.A.R.T) and make them more attractive by emphasizing how the new goals can be an opportunity to achieve a distinctive specialization\quality (the “A” of S.M.A.R.T). Meanwhile, in the “Specific” dimension of S.M.A.R.T, as mentioned above, pushing solutions activate the “avoid (threat)” response and make the coachee uncomfortable and thus unmotivated.

Regarding the Autonomy dimension of the S.C.A.R.F., what is recommended is to give opinions instead of solutions when specifying the new goals\objectives (the “S” of the S.C.A.R.F.). In order motivate (approach (reward)” response) and make the goal attractive (the “A” of the S.C.A.R.F.) provide at least three  possible solutions and alternatives because that will increase the sense of Autonomy and control (only two will create a “dilemma”!). The “DO NOTs” for the Autonomy are linked with the Specific and the Time-scaled dimensions of the S.C.A.R.F. Respectively, avoid to specify only one solution and explain a detailed schedule and plan.

Final Considerations

By combining in a matrix with one dimension for the S.C.A.R.F framework and the other one for the S.M.A.R.T. criteria then it’s possible to define which objectives and how deliver them properly in order to motivate people and reinforce a positive mood in the team, in the work environment and why not, also in our personal life.

More: see also a possible detailed schema for the SMART-SCARF matrix  here (SlideShare).

All the four points mentioned in the post “Four Ways to Give Good Feedback” are present both in the SMART-SCARF, thus nothing new to add. However, organize all the thousands recommendations given by the experience and the Neuroscience research in a structured way such as has been done in the SMART-SCARF matrix might be useful in order to put them into practice.

Well, it’s time to wear and validate the SMART-SCARF in the real world… Do you think it will works?

Feelink – Feel & Think approach for doing life!