Tuesday, 28 February 2017

Where do experts come from?

Over the weekend, Brigitte Nerlich published a piece on the origin of the ‘deficit model’.
The ‘deficit model’ is the idea that if the public understood scientific concepts they would accept the judgements of scientists. Or, if scientists shout loud enough eventually people will agree with them. Or, people don’t like GMOs/fracking/climate change science because they are dumb.
This is a hot-topic in the aftermath of the US Presidential Election and theUK’s EU Referendum, when ‘experts’ were widely ignored and her contribution has been well received.
My reaction to Brigitte’s tweet was “Spinoza of course”, but there was no reference of the seventeenth century Dutch philosopher in her piece.
My interest is as part of my remit as the RCUK Academic Fellow for Financial Mathematics between 2006 and 2011 was the ‘publicunderstanding of Financial Mathematics’, or at least the ‘public engagement with Financial Mathematics’. This introduced me to the issue of the ‘deficit model’ over a period in time dominated by the ‘Great Financial Crisis, which started 10 years ago yesterday.
For almost ten years I have been trying to figure out what is the relationship between finance, mathematics and ethics. To me, a significant contributor to the GFC was the belief that ‘science’ had some how tamed financial risk. Therefore to understand the GFC it was necessary to understand where the faith in scientific determinism originated, and I think the source (in European science at any rate) is in Spinoza. The argument is presented in the book I am finishing off for Palgrave
and I have extracted two relevant sections, separated by some 27,000 words and 125 years.
Baruch Spinoza would produce the most influential development of Descartes’ philosophy that incorporated ideas from de Groot and Hobbes during the ‘Dutch Golden Age’. Spinoza’s family were Portuguese Jews, marranos, who had been forcibly converted to Christianity in the sixteenth century. They had immigrated to the United Provinces in 1593, taking advantage of Calvinist toleration and Baruch’s father became a prominent, and wealthy, citizen of Amsterdam. Baruch was born in 1632, his first language was Portuguese and he grew up studying in Spanish and Hebrew and he only studied Latin in his twenties. His understanding of Greek philosophy came primarily through Judaic and Islamic interpretations, rather than from the Scholastics.
Spinoza became involved with the Collegiants, a sect that had emerged as a successor to the Arminians, and was eventually excommunicated by his synagogue in 1656, changing his name to Benedictus. The excommunication did not worry Spinoza too much and he developed a reputation as a teacher, writer and a lens-grinder, a skilled profession closely associated with the important new science of optics. Supported, in part, by a pension from de Witt, he developed his philosophy and in 1670 moved to The Hague where he would witness de Witt’s murder in 1672. He died in 1677, probably of tuberculosis.
Spinoza’s most influential work, his Ethics, was published posthumously in 1677. Spinoza echoed Plato, Augustine and Descartes in arguing that mathematics provided the means of discerning truthi and the text presented a deductive chain that proved propositions having started with definitions and axioms. The key step that Spinoza took in developing Descartes’ work was to collapse the three types of substance: matter, mind and God, into one. This was captured in his phrase Deus sive natura, ‘God or nature’, indicating that there is only a single substance2 that, when viewed from one perspective is nature but from another is God. This solved the problem of how Descartes’ mind interacted with matter at the cost of prohibiting contingency3 because if everything was connected to God, it could not happen by chance. This also meant that emotions were not part of the mind, and so could not be rationalised, but were governed by the laws of nature4, as Hobbes had implied.
Spinoza argued that people believed themselves to possess free-will and had autonomy because they did not see the complete picture, being only finite5. Spinoza believed that the purpose of the individual was to lift themselves out of a mundane perspective in order to comprehend the totality of creation, coming to understand the true nature of God’s will: the laws of nature. The ethical nature of the Ethics was in describing how different actions helped, or hindered, the individual in approaching God6, which would give the correct perspective on everyday phenomena. Spinoza believed that at the most basic level people had direct knowledge of nature through their senses. This could be improved into a scientific knowledge of the world that identified connections between phenomena and so was able to make generalisations. The ultimate aim was to have direct knowledge of the generalisations7, not mediated by ‘finite’ ideas or concepts and this knowledge delivered true freedom8.
Spinoza’s contribution to western philosophy was in suggesting that humans were capable of attaining a complete picture of the universe that provided certain knowledge. This was novel to Europeans rooted in the Scholastic tradition that synthesised Aristotle and Augustine. However, it was reminiscent of Jewish and Islamic mysticism. Jewish mysticism Kabbalah had become prominent in the thirteenth century through Moshe ben Naiman Girondi, from Catalonia, while Sufi thought was legitimised in the eleventh century by the Islamic scholar Muhammad ibn Muhammad al Ghazali. Both these scholars challenged Hellenistic philosophy, with al-Ghazali’s repudiation of Aristotle in The Incoherence of the Philosophers being pivotal in the development of Islamic thought. Associated with al-Ghazali was the doctrine of occasionalism, that effect follows cause not because of a physical law but only because God’s will. Spinoza echoed this attitude when he argued that a law of nature was simply a consequence of God’s or nature’s consistency9. In Sufi metaphysics there is the concept of ‘Unity of Essence’ (wahdat al-wujud, وحدة الوجود) and the idea that people seek ‘annihilation in God’ (fanaa,فناء‎‎)10 just as for Spinoza people sought a God-like perspective. While Islam and Spinoza both denied contingency, they did not deny the ability of the individual to assert their own will, it was just that asserting one’s will against God or nature would be detrimental to the individual11. This idea of determinism was unusual in European thinking. The Calvinists believed in predestination, that the ultimate fate of a person’s soul was destined for heaven or hell, but an individual had will throughout their life. Spinoza’s argument was that individuals don’t really have a choice in correct action; knowledge guides them to the correct course12. If someone makes an immoral choice, it is through ignorance13. This is less bestial than Hobbes but still rejects autonomy.
If Judaism can be characterised by the covenant with God and Christianity by God’s caritas for people, in Islam people can be characterised by having an intellect that can discern God’s will14. In this sense Spinoza was introducing Islamic, specifically Sufi, ideas into western philosophy. This was possible because Spinoza was re-presenting tested Islamic philosophy that opposed Aristotle, just as European thought was rejecting Aristotelian ideas.
The influence of Spinoza on western thought becomes significant at the end of the Enlightenment. Romanticism had appeared in English literature in the 1790s. It incorporated Rousseau’s idealisation of the ‘noble savage’, in a ‘state of nature’, and empiricism, which focused on the individual sensation of nature. In Germany, the movement was broader and more significant with a philosophical basis, idealism, in a problem Kant created in trying to resolve the issue of mind-body dualism. Idealism addressed the problems by dissolving the distinction between observers and observed, an approach that was heavily influenced by Spinoza15. A core concept in idealism was the principle that what was observed was dependent on the thinking ‘I’ that, itself, could only exist in the context of society. This spawned the idea that national identity was fundamental to the individual, fusing Spinoza, Rousseau and Kant.
Johann Wolfgang von Goethe, born in 1749, exemplified the broader Romantic Movement. His fame was established with his 1774 sentimental novel Die Leiden des jungen Werthers (The Sorrows of Young Werther). Today Goethe is known for his interpretation of the Faust story, written in 1808, that describes how Mephistopheles suggests that a ruler solved their financial problems by printing paper money, backed by gold reserves, which were yet to be discovered16. In 1775 had been invited to become a civil servant for the small Duchy of Weimar where he would remain a bureaucrat until his death in 1832. Goethe was responsible for some mines and became interested in geology and the natural sciences generally. As a novelist, Goethe was interested in the ‘narrative’ of science rather than brute, individual facts, an approach that coincided with the idealists’ approach to science, Naturphilosophie.
Naturphilosophie was personified by the Prussian naturalist Alexander von Humboldt. Humboldt travelled to South America between 1799 and 1804 and gathered observations of nature that he then presented in Ansichten der Natur (Aspects on nature) in 1807. Humboldt aimed at Spinoza’s all-encompassing perspective that transformed an apparently capricious nature into a cohesive whole17. However, this implied that science was fundamentally subjective, with the scientist being part of, not an objective observer of, nature18. To ensure that the ideas coming out of the mind of a scientist, often presented as a solitary genius, were true representations of the world, their observations had to be precise and accurate. Johann Carl Friedrich Gauss, the director of the Göttingen observatory from 1807, addressed the fidelity of scientific observations by developing the Central Limit Theorem into a theory of measurement and the Normal distribution, which is often referred to as the Gaussian distribution.
The Romantics regarded nature as a complex, ‘living’ organism and were concerned with how nature changed, rather than focusing on how it was at any single point in time19. This represented a ‘counter-revolution’ in science, reverting to Aristotelian qualities rather than Cartesian quantities. Some Romantics, notably William Blake, were highly critical of the mechanistic natural philosophy founded on Descartes and Newton20 and stressed the need for human imagination in theory construction. With respect to Malthus, the Romantics saw his argument as reducing people to elements of a machine and they preferred more paternalistic policies, associated with the Tories.
Prussia had initially joined the attacks on Revolutionary France in 1792 but became neutral in 1795, content to see the Holy Roman Empire, ruled by the Austrian Hapsburgs, disintegrate. However, in 1806, as Napoleon presented a greater threat, Prussia declared war on the Empire and was swiftly defeated. In the aftermath of the defeat the Prussian’s began a programme of reorganising the state administration, inspired by Kantian ideals, whereby subjects would become citizens21. During this time, Georg W.F. Hegel developed idealism by arguing that the nation was a living organism, with a purpose, will and rationality22. This contrasted with the dominant view of the eighteenth century that saw the state as a machine designed to deliver ‘interests’, a view that Hegel rejected for the same reasons that the Romantics rejected mechanistic science. Hegel argued that the state’s will was defined by ‘public opinion’ which expressed
the genuine needs and correct tendencies of common life, but also, in the form of common sense, of the eternal, substantive principles of justice23.
Hegel argued that the state and people were indistinguishable, because an individual was formed in the context of culture, and so their aims are necessarily compatible. In addition, he rejected the idea that public opinion developed through discourse could be meaningful, since it would only represent the subjective opinions of a narrow section of the public24. Therefore, like Rousseau, Hegel believed the well-constituted state could not be challenged and the role of education was to ensure people’s subjective opinions conformed to the state’s, Spinozian, objectivity. This perspective can be contrasted with that of Thomas Paine, who had argued at the start of Common Sense, an essay of 1776 and a key inspiration of the American Revolution, that
Some writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins. Society is produced by our wants, and government by our wickedness; the former promotes our happiness positively by uniting our affections, the latter negatively by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher.25

I suspect students of Spinoza and Hegel will object to my caricature, but I think the essential point that " Spinoza’s contribution to western philosophy was in suggesting that humans were capable of attaining a complete picture of the universe that provided certain knowledge." is important in understanding why 'science' believes in the 'deficit model'.

1 (Spinoza 2002, 240)
2 (Spinoza 2002, I.P14, 224)
3 (Spinoza 2002, I.P26, 232)
4 (Spinoza 2002, 277-278)
5 (Spinoza 2002, 238-241)
6 (Spinoza 2002, IV.P28, 334)
7 (Spinoza 2002, V.P25, 375)
8 (Spinoza 2002, 378-379)
9 (Spinoza 2002, 239)
10 (Davis 1984, 12)
11 Qu’ran 4:79, (Spinoza 2002, 359-362)
12 (Spinoza 2002, V.P42, 382)
13 (Spinoza 2002, IV.P27,334)
14 (Schuon 1976, 19-22)
15 (Frank 2003, 55-76), (Förster and Melamed 2012),
16 (Wennerlind 2003, 234), (Binswanger 1994)
17 (Daston 2010)
18 (Fara 2009, 215-218)
19 (Brush 1976, 655)
20 (Christensen 1982)
21 (Clark 2006, 327-344)
22 (Hegel 1952, Secs. 257-258), (Clark 2006, 451)
23 (Hegel 1952, Sec. 317), (Habermas 1991, 120)
24 (Habermas 1991, 119)
25 (Paine 1998, 5)

Brush, S. G. 1976. The Kind of motion we call heat: A history of the kinetic theory of gases in the 19th century. North-Holland.
Christensen, B.J. 1982. “The Apple in the Vortex: Newton, Blake and Descartes.” Philosophy and Literature 6 (1&2): 147-161.
Clark, C. 2006. Iron Kingdom: The Rise and Downfall of Prussia, 1600--1947. Penguin.
Daston, L. J. 2010. “The Humboltian Gaze.” In Cultures and Politics of Research from the Early Modern Period to the Age of Extremes, by M. Epple and C. Zittel, 45-60. Walter de Gruyter.
Davis, D. 1984. “Introduction to The Conference of the Birds.” In The Conference of the Birds, by Farid ud Din Attar, 9-26. Penguin Classics.
Fara, P. 2009. Science: a four thousand year history. OUP.
Förster, E., and Y. Y. Melamed, . 2012. Spinoza and German Idealism. Cambridge University Press.
Frank, M. 2003. The Philosophical Foundations of Early German Romanticism. Translated by E. Millán-Zaibert. SUNY Press.
Habermas, J. 1991. The Structural Transformation of the Public Sphere: An Inquiry Into a Category of Bourgeois Society. Translated by T. Burger and F. Lawrence. MIT Press.
Hegel, G.W.F. 1952. “Hegel’s Philosophy of Right.” Edited by T.M. Knox. Clarendon Press. Accessed September 2016. https://www.marxists.org/reference/archive/hegel/works/pr/philosophy-of-right.pdf.
Paine, T. 1998. Rights of Man, Common Sense and other Political Writings. Edited by M. Philip. Oxford University Press.
Schuon, F. 1976. Understanding Islam. Unwin.
Spinoza, B. 2002. “Ethics.” In Spinoza: Complete Works, edited by M. L. Morgan, translated by S. Shirley, 213-382. Hackett Publishing.
Wennerlind, C. 2003. “Credit-Money as the Philosopher's Stone: Alchemy and the Coinage Problem in Seventeenth-Century England.” History of Political Economy 35 (5): 234-261.

Saturday, 7 January 2017

Some implications of the Bank of England comparing itself to the MetOffice

At some point over the Christmas break I was cursing the fact that I was finding  it difficult to find a weather map.  That is a weather map with isobars and fronts marked on it not one with icons of cloud, rain and sun.  My favourite subject as a final year physics student was Atmospheric Physics: I was fascinated by how the differential equations delivered different weather, particularly cloud formations, based on different inputs.  Underpinning this academic interest my father taught me to sail and until I left the oil industry for academia, and lost money and free time as a result, I was a keen sailor.  This has left me with the ability to formulate my own idea of the future weather from pressure charts, and my expertise is such that my wife confidently ignores it.  Though I find pressure charts more useful than the rain icons, which I believe replace the cloud icon with a rain icon when 26 out of the 50 simulations the MetOffice runs return rain.

Meteorology also featured in a discussion of "fog" and "mist", on the BBC Radio 4's Today programme.  The meteorologist distinguished the two identical phenomenon in terms of visibility: fog is less than 1,000 m, mist indicates visibility is 1,000m-2,000m and they said terms like "thick fog" or "dense fog" are meaningless.  I checked my 1998 RYA Weather forecast book, where it said shipping forecasts do distinguish fog (200m-1000m), thick fog (50m-200m) and dense fog (less than 50m).  The distinctions the meteorologist was making come from aviation forecasts and they were ignoring maritime definitions, that describes visibility of 1,000m-2,000m as "Poor visibility", since it can be caused by mist, dust or smoke.

Two things struck me about these experiences.  Firstly the meteorologists definition reflected the relative significance of modern aviation over shipping, the public forecast definitions reflected this change in status, definitions were mutable to social status.  The weather map issue is more significant in that the maps it uses today provide the public with "the answer" (there is a 52% chance of rain tomorrow, here is a rain icon that is interpreted as rain) rather than the information to make a judgement.  I see this is an example of the transformation of the public sphere, where by a state institution inhibits the public's ability to think and criticise.  I think this type of transformation in relation to finance as being core to the lack of faith the public have in finance and the public's inability to knowledgeably criticise finance the root of financial crises.

A key episode in the transformation of finance was the 1844 Bank Charter Act.  This was a consequence of twenty years debate amongst economists on the  merits of fixing the relationship between money and gold. The currency school argued, with the support of statistics, that the easy availability of credit led to inflation and so there should be a link between the, concrete, quantity of gold and the availability of credit. The banking school argued that financial instability was a consequence of fluctuations in demand and supply and had nothing to do with the networks of banks providing credit by issuing their own notes. This argument was supported by the fact that high, not low, interest rates were associated with periods of inflation. The currency school won the argument and  the Bank Charter Act prohibited English banks, other than the Bank of England, from issuing notes and required all banks to hold Bank of England notes as a capital reserve to back up their lending. Banks could still create ‘money’ in bank deposits by lending money, which would be ‘destroyed’ once the loan was repaid but were under the centralised control of the Bank of England.

In the aftermath of the Bank Charter Act the Quaker dominance of banking waned. The Act undermined the network of ‘country’ banks that served local businesses and led to the merger and centralisation of the provincial Quaker institutions. Following this centralisation a number of Quakers became associated with financial malfeasance. The most famous example is the failure of Overend, Gurney & Company in 1866. The firm was connected to the Quaker Gurney banking dynasty and had been able to underwrite other banks during a crisis of 1825. Its failure was a result of speculative investing in the 1850s, exposed by the Panic of 1866, and the refusal of the Bank of England to underwrite it. In the distributed financial network that existed before 1844 the stability of the system rested on inter-personal relationships and trust. Quaker doctrine nurtured this trust and produced financial success. After 1844 this stability rested on the centralised decision making of the ‘lender of last resort’.  

On this basis I was interested to hear that Andy Haldane, Chief Economist at the Bank of England had also drawn connections between finance and weather forecasting in a speech hosted by the Institute of Government (the relevant section is initiated at 15:22 and then developed at 18:45 in this video)

 Dr Haldane compares economists' failures to foresee the Credit Crisis with the the BBC's lunctime weather forecast of 15th October 1987

Note that the forecaster starts by dismissing the prospect of a hurricane hitting the UK raised by a member of the public.  The following day the BBC reported a "hurricane" had struck the UK overnight causing the death of 18 people.  It is ironic that the BoE looks back to the weather event of 15 October 1987, skilfully passing over Black Monday of 19 October 1987.

Dr Haldane observes that the accuracy of weather forecasts has improved dramatically since 1987 through the greater use of data  and economics could similarly improve (19:53-20:10).  I would start of by disputing Dr Haldane's diagnosis and argue it was not greater data (10 weather ships used in the 1970s have been replaced by 18 weather buoys) that lead to the improved forecasts but greater computational power that has allowed finer scale simulations of the differential equations that has delivered the better precision.  Whether or not the improvement in forecast accuracy is down to greater data or greater computational power the underlying assumption is that the economy, like the weather, is a system that can be represented by a set of differential equations that can be used to simulate the evolution of the economy.  This is a massive assumption.

Both Aristotle and Cicero recognised that it was feasible to predict natural phenomena, like the weather but events subject to human agency were impossible to foresee.  Augustine agreed that humans were not able to foresee the future though the Christian God, unlike the pagan gods, had perfect fore-knowledge.  The change in attitude begins with Descartes search for certainty that involved applying the deductive reasoning presented in Euclid's Elements to non-mathematical thinking starting from the ‘common notion’  “I think therefore I am”.  This resulted in Descartes seeking mechanical, logical, explanations for natural phenomenon, rather than the teleological ones of Aristotle. Because different objects had different ends, Aristotle believed there were distinctive sciences to account for different phenomenon. Descartes, in contrast, believed in a unified science and he likened his whole philosophical programme to a tree whose roots were in metaphysics while its trunk was made up of mathematics ‒ “on account of the certitude and evidence of [its] reasoning” ‒ and physics with the branches of the tree being the practical sciences, both natural and moral.  Both Dr Haldane's association of economics and meteorology, a consequence of a belief in unified science, and his search for certainty, revealed (19:41-19:48) by his admiration of precision in weather forecasts,  reflect a commitment to Cartesian science.

The alternative to Descartes has traditionally been Locke who dismissed the Cartesian belief that there are innate ideas, rather people are born with minds that are blank-sheets: tabula rasa.  Locke argued that knowledge came from experience with sense organs first perceiving events in the real world and then the mind interpreting them to form ideas. The validity of an idea did not depend on how it conformed to some authority, theoretical or political, but on the  origins of idea and how had it evolved: its genealogy.  This meant that people needed to investigate the origins of their beliefs, reflecting a Puritan upbringing. For Locke the purpose of philosophy was to show how the tabula rasa was filled with knowledge, which is “the perception of the agreement” of two ideas. In contrast to Descartes  Locke argued that human knowledge could never be certain.  One  might observe the Sun rising every morning of our lives and infer it will do the same tomorrow, but we cannot assume it is true and this motivates us to ask ourselves why the Sun rises. Locke finished the An Essay concerning Human Understanding by dividing knowledge into three types. The first is physica, the nature of things. The second is practica, what people should do as rational and wilful agents. The final type is semeiotika (Greek for ‘signs’), how physica and practica are attained and communicated.
Locke applied these ideas to politics in his Two Treatises of Government.  As a Puritan who had lived through the Civil War, Commonwealth and Restoration, Locke had been concerned with the fundamental tension between an individual’s right to sincerely express their religious beliefs and the need for a well ordered society to mandate the restriction of those rights, such as by a sovereign’s exercise of prerogative powers. Locke argued that a state was made up of autonomous individuals ruled by rationally constituted, abstract and universal laws rather than by subjects enforced to comply with the personal decrees of monarchs.

While Descartes philosophy can be caricatured as being based on doubt, Locke’s can be characterised as focusing on trust with Locke claiming that language was important because it enabled promises to be made , which created the trust that bound a society together.  Since knowledge was fallible reliable knowledge could only be based on trust, faith is only necessary in the presence of doubt, while a stable political system relied on people making and keeping promises and abiding by contracts. Locke opposed atheism because it dissolved trust by undermining individuals’ commitment to truth telling, promise keeping and consideration for others.

Locke's influence was persistent.  The tripartite separation of knowledge into physica, practica and semeiotika was mirrored in  Kant's tripartite Critique of Pure Reason, Critique of Practical Reason and Critique of Judgement.   Laplace’s reputation in mathematics was built on two parallel pairs of books: Mécanique Céleste (1799-1825) and Exposition du système du monde (1796) describing the mathematics of physica to a technical and general audience, while Théorie analytique des probabilités (1812) and Théorie des probabilités (1819) did the same for the mathematics of practica.

Descartes view of a certain, unified science came to dominate during the nineteenth century.   Descartes' ideas had been developed by Spinoza who's Deus sive natura, ‘God or nature’, indicated that there was only a single substance that, when viewed from one perspective is nature but from another is God. This solved the problem of how Descartes’ mind interacted with matter at the cost of prohibiting contingency, because if everything is connected to God, it cannot happen randomly. Spinoza argued that people believe themselves to possess free-will and have autonomy because, being only finite, they do not see the complete picture. The purpose of human rationality was to come to understand the true nature of God, the laws of nature.  Spinoza believed that at the most basic level people have direct knowledge of nature through their senses. This can be improved into a scientific knowledge of the world that could identify connections between phenomena and so was able to make generalisations. The ultimate aim was to have direct knowledge of the generalisations, not mediated by ‘finite’ ideas or concepts and this ‘third type’ of knowledge delivered true freedom. Spinoza saw the purpose of the individual as to lift themselves out of a mundane perspective in order to comprehend the totality of creation.  Spinoza's objective, described in his Ethics, presented in the Euclidean style, was of attaining a 'God-like' perspective was picked up by the German Romantics and resulted in the Idealists assuming a deterministic outlook across a unified science.

Dr Haldane refers to a "methodological mono-culture" in economics (16:29-16:31). I  think that the mono-culture is not a specific to neo- or new-Keynesianism or Marxism etc. etc. but to the fact that they are all based on the Cartesian tradition that results in 'rationality' coming to signify a commitment to deterministic certainty.

I suspect Dr Haldane would regard these points as reading a little too much into what he has said in an informal setting, in much the same way a patient may dismiss a line their psychiatrist takes.  However, I think the distinction between a Lockean and Cartesian approach to economic policy making is fundamental to the issues the BoE is facing up to.  Consider the issue of market liquidity.  For most of the period since 1700 liquidity, the ability to transact at will, had been associated with a person's credit, Defoe discussed it frequently.  A person's credit was based on their trustworthiness and the financial system was founded on believing 'promises to pay'.  Today much of the research on liquidity, some of it funded by the BoE, seems to see 'liquidity' as a utility that is the responsibility of the regulator.  This tends to focus on defining the capital reserves of institutions, based on the assumption that the economy is a deterministic system, and ignores the Lockean issue of trust.  I suspect these points have broader relevance in the whole issue around "post-truth" politics: people who think there is an issue seem to have lost the faith of the public.

Some post-scripts:

  1. Proofs that the economy is not deterministic are fairly straight forward to construct.  Locke and Spinoza would agree that peoples' beliefs are formed by their experiences and inform their decisions.  Hence, whether or not a person has a conversation with another determines the future.  The economy can only be predictable if individual interactions are predictable.  This is only possible if all peoples deaths are predictable, which is not the case since earthquakes and hurricanes are not predictable.  It might be admirable to aspire to identifying the equations that represent the economy and amass the data, but in the meantime I think it would be better to focus on what is important and achievable in an uncertain world, such as restoring public trust in economics.
  2. It might seem odd that a mathematician is sceptical about the Euclidean method.  Most mathematicians appreciate that a proof of a theorem starts at the result and the process of working out what is required to deliver the proof.  This approach to organising science was the great contribution of the ancient Greeks and was rooted in Platonic Forms, which needed to be the foundations of knowledge.  This fact about Euclid was not really appreciated until Frege in the 1880s and resulted in Descartes belief in innate ideas and justified Kant's synthetic a priori truths.  Its a great way of 'proving' the conclusion you want to, with Hobbes being the first great exponent.
  3. An interest.  I submitted a grant application to the BoE in spring 2016 for funds to model, mathematically, the effect that trust might have on the resilience and effectiveness of financial networks.  It was declined.