2012-06-14

Lessons from games

I recently exchanged thoughts about World War II with a pacifist - someone who believes the deaths from the atomic bombs could have been avoided through negotiation. (Typical of people with nebulous idealism, he also said that everyone with a different opinion is a monster, and should never have public office.)

At this point, I realized an important lesson I learned in player vs. player games.

Someone who has won and lost many matches against other players knows that, in war, every hesitation is an advantage to the opponent, means more losses for your side, and a smaller chance of victory. You can afford to be infinitely patient only if you are infinitely strong. When the stakes are high and your advantage marginal, you must act decisively. Hesitation is commitment to failure, and is very hard to recover from. The penalty is death.

2012-06-12

Well put.

This is all that needs to be said.

2012-06-06

"You can never repay all the interest"

The upside of commenting on Reddit is that, every once in a while, you get an insightful reply.

A common complaint about our monetary and banking systems is that "you can never repay all the interest".

The argument goes like this.

Suppose you have a barter society, and someone - representing a central bank - introduces money. But he doesn't just give people money; instead, he loans it. He loans a total of 100 pieces to everyone, at 5% annual interest. The community starts using money to trade, it's convenient, and everyone is happy. But then, after a year, the money issuer comes back, and asks everyone to repay him the money. The total amount due is 105 pieces, but there's only 100 pieces to go around. Someone won't be able to repay. The system forces someone to go bankrupt!

Except, not. The system doesn't force everyone to return all the money all at once, and the same money can be used over and over again to repay debts and interest. Here's an example from Reddit user "selven":
Imagine a 2-person world with just me and a bank, and we're also each other's employers. Only $100 cash exists in the world, at the start all owned by the bank. I want to upgrade my farm equipment, so I borrow $100 from the bank. I have $100, the bank has $0, I'm $100 in debt, with 1% interest owed every month. Now, I go and actually buy said farm equipment from the bank. I have $0, the bank has $100, I'm $100 in debt. Now, let's say that I want to renovate my farm some more. I take out another $100 loan and buy the goods, so I have $0, the bank has $100 and I'm $200 in debt.

What do I do now? I work for the bank. Let's say that I'm not expecting returns for many years, so for now every year I'll just pay interest. I sell my goods for the bank. I go sell him some of the fruit that my farm produces and get paid $2 for it. I immediately pay $2 back in interest. Next month, same thing. Sell fruit, get $2, pay interest, lose $2. Let's say that this happens for ten years, and then my farm finally gets more productive and I pay off the loan. What just happened is that I took out a $200 loan and paid $200 principal and $240 interest all on a $100 money supply. How is this possible? Because the same money circulates between the two of us alternately as payment for goods and as interest many times. The real world is an expansion of this two-person farmer and banker, where the employers and customers and banks are different people, but the same principle applies, just more indirectly.

Extinction risk: Mad scientists

I came across this captivating article about a teenager who attempted to build a nuclear breeder reactor in the vicinity of Detroit. The most fascinating part of the story is how far he got, with very few resources other than ingenuity, determination, and a complete disregard for safety.

As technology progresses, this is our major extinction risk.

In the 1990s, this kid was able to obtain dangerous quantities of radioactive materials by laboriously extracting small amounts from readily available equipment.

In several more decades, some similarly ingenious, short-sighted kid is going to synthesize a virus that ends up killing most humans. Not because he intends that result, but in a blind attempt to do good, or to compensate for social maladjustment by showing off his prowess.

Our Earth is a single system where everything is interrelated. A monkey could destroy the planet if she knew what actions to take, and what order to perform them in. Increasingly, our knowledge is bringing us closer to the point where a single person, or group, will be able to connect the dots and unleash the destruction. People with both the brilliance to give them the ability, and the maladjustment to give them the will, may be few and far between; but it's only going to take that one person in 10 billion.

I wrote about this back in 2006, and years before that. We need self-sustaining colonies in space so that a mishap in one ecosystem doesn't end up killing us all.