I Think, Therefore…

Originally published in the Informanté newspaper on Thursday, 26 January, 2017. 

On 23 June 1912, in Maida Vale, London, a young man was born to a member of the Indian Civil Service of British India, and the daughter of the chief engineer of Madras Railways. Young Alan showed early signs of genius, and even at age 16, when he encountered Alter Einstein’s work, he not only understood it, but also figured out that Einstein was questioning Isaac Newton’s laws of motion, even though that was not explicit in the text. 

Alan later studied at King’s College, Cambridge, where he excelled at mathematics. By 1935, he was elected a fellow at King’s, and in 1936, he published a seminal paper, "On Computable Numbers, with an Application to the Entscheidungsproblem." Here he reformulated the limits of proof and computation via a simple hypothetical device that would become known as a Turing Machine. This “universal computing machine” was proved to not only be capable of calculating any conceivable mathematical computation if it could be represented as an algorithm, but he also proved that any such machine could perform, or emulate, the task of any other such machine. Alan Turing had provided the mathematical basis for computers. But he was not done.

Unfortunately, during the next few years, there was a spot of trouble with the Germans. He worked for His Majesty’s Government at Bletchley Park, in cryptanalysis, and developed a codebreaking machine that enabled the Allies to crack the Enigma Code. This played a key role in enabling an Allied victory, and it is estimated that his work shortened the war by two years, and saved more than 14 million lives. 

After that spot of bother, Alan turned his mind back to the mathematics of computational devices. In 1950, he published a paper in Mind, titled “Computing Machinery and Intelligence.” Based on his previous paper, where he proved that digital computers are ‘universal,’ in that they can in theory simulate the behaviour of any other digital machine, Alan Turing asked that seminal question that would drive the imaginations of computer scientists for years to come. Since Computer A could simulate the behaviour of Computer B in an imitation game, well, "Let us fix our attention on one particular digital computer C. Is it true that by modifying this computer to have an adequate storage, suitably increasing its speed of action, and providing it with an appropriate programme, C can be made to play satisfactorily the part of A in the imitation game, the part of B being taken by a man?"

In other words, can a computer isolated from a judge so that she or he cannot immediately tell whether she or he is communicating with a person or a computer, convince this judge that it is human? Can a computer think? Or, as the case may be, act indistinguishably from the way someone who can think acts? And thus, the field of Artificial General Intelligence was born. 

Many people have tried in the intervening 65-plus years to invalidate his original proposal with various arguments, the most common of which I alluded to in the previous paragraph. John Searle, for example, proposed the following analogy – suppose an artificial intelligence is programmed that passes this test, and understands Chinese. Then suppose he is in a closed room and has a book with an English version of the computer program, along with sufficient materials to run the program manually. He could receive Chinese characters through a slot in the door, follow the program as written, and produce Chinese characters as output through the door. If the program could pass Turing’s test, so could he – but he still wouldn’t understand Chinese! And neither, ipso facto, would the computer.

And yet, this is the same problem we as people face. Given that we can only observe the behaviour of others, how can we be certain that they have minds that can think? Behaviour, as shown above, does thus not guarantee that a thinking mind exists – we can only ever be certain our own minds exist. The Turing test, it seems, would not prove that a thinking computer would exist, but for all practical intent and purposes, it would be indistinguishable from one that does…

Of course, simply knowing it’s possible does not make it easy to achieve. The limitations of computer power at the time left it to a mostly theoretical science. Yet as computational power grew, so too were the attempts to realise what Alan Turing had theorized. Trying to reach that elusive goal of Artificial General Intelligence in one go was soon abandoned, but the fields of research into its specific sub-sections have borne fruit.

Fields like machine language processing, and translation opened up. Expert systems were created than when input with data, would follow expert reasoning to give solutions to a problem at hand. Games were amongst the first to gain artificial intelligence, as when the first available commercial computer was released in 1951, both chess and checkers had AI to play them written almost immediately. It took a while to mature, naturally, but by 1997 computers were able to beat grandmasters at chess for the first time, and by today, even chess AI running on mobile phones can beat most human players.  

By 2016, computer AI was able to beat the best humans at Go, considered one of the most computationally challenging games to win, and even now, artificial intelligence programs are inching ever closer to being able to beat humans at poker. But it is not only games – in the 1960’s, Captain Kirk’s verbal querying of the USS Enterprise computer was considered science fiction and over 200 years in the future, and yet today, we carry mobile phones that can do the same thing. Apple’s Siri, Google’s Assistant (and predecessor, Google Now), Amazon’s Alexa and Microsoft’s Cortana are all intelligent assistants available on a variety of computing devices that respond to your voice and perform actions. 

Slowly the parts are coming together, and Turing’s test will become relevant as never before. Sadly, Turing was gay, and chemically castrated in 1952 for Homosexual Acts, leading to his suicide in 1954 before his 42^nd birthday. One of the greatest minds and pioneers in computer science had his life cut short due to intolerance and the world is worse off for it. It took the British government until 2009 to offer a public apology for its appalling treatment of a war hero, and in 2013 Queen Elizabeth II granted him a posthumous pardon. 

Let us hope that this is not how we act when we finally meet these new children of humanity. It is our responsibility as people to make ethical decisions based on reason, empathy and a concern not only for ourselves, but also other conscious, sentient beings, wherever they may come from. And perhaps, after welcoming them into our global community, we can offer them a glass of champagne.

Gross Domestic Recession

Originally published in the Informanté newspaper on Thursday, 19 January, 2017. 

During December, the Namibia Statistics Agency released the third quarter GDP figures for Namibia, and they were, well, if not unexpected, certainly a disappointment. For the second quarter in a row, our country had experienced negative growth. Namibia has entered a technical recession. 

I know! Sounds scary! But what is a technical recession? I’ve previously covered our Gross Domestic Product, and that figures in here. A technical recession is when GDP growth is negative for two quarters or more. That neatly defines it, and yet doesn’t actually tell us what it means – what its effect will be on our lives. To start with, it helps to know that a recession refers to a slowdown of economic activity – quite reasonable, given that GDP is an indicator of economic activity.

It’s effects, however, spread beyond simply that – whereas a simple reduction in economic activity can be countered simply by a better quarter later, a recession has psychological effects that can trap the economy in a negative feedback loop. When companies see a recession approaching, they tend to ‘buckle up’, getting ready for tough times. Excess employees are trimmed, and instead of investing in new ventures, they will start saving money. 

This can result in what is called the paradox of thrift or the paradox of deleveraging. After all, these excess employees trimmed are no longer employed, and their consumption no longer fuels the economy, driving growth lower. The money saved, and not invested, is unproductive – not being put to use, that further slows growth. 

This translates down personally as well. When ordinary citizens start feeling economically pressured, they tend to save more and pay down debts to prepare for hard times ahead. Yet every dollar spent, is one that is active in the economy, paying wages and suppliers. Ironically, by saving, growth is reduced and a recession can linger. 

Let’s have a look, then, at the state of the economy in our recession. Inflation has increased quarter-to-quarter, averaging at 6.9% in the third quarter versus 6.7% in the second quarter, due to increases in the price of food due to the drought. Our net exports have improved, compared to last quarter, but Namibia is still running at a trade deficit of N$ 5.0 billion. In other words, we import N$ 5.0 billion more than we export. Compared to the second quarter figure of N$ 7.3 billion, we are making some progress.

Onto the specific sectors of the economy. Agriculture and Forestry had an increase of 1.6% in the third quarter – after six consecutive quarters of declines. The recovery in the sector is attributed to the livestock farming subsector that registered a growth of 1.1%. In addition, the crop farming subsector recorded an increase of 3.1%. The increase in performance is due to the increase in the number of slaughtered livestock stock at the export abattoirs and butchers. Farmers are re-stocking and investing in their herds! But the fishing sector declined by 4.8%, dropping into the negatives once again. 

Mining and quarrying declined by 5.6 % in the third quarter, mainly due to a decrease in diamond production of about 13%. This was offset somewhat by strong growth in the Uranium subsector, which showed growth of 16.4%. The manufacturing sector also experienced a decline of 5.3% due to declines in diamond cutting and polishing, beverage production and other fabricated metals. In contrast, the electricity and water sector had positive growth, recording 5.3% growth – with the electricity sub-sector showing slower growth.

But the construction sector continues to struggle. After 10 consecutive quarters of 20% plus growth, it had slowed to near zero in the first quarter, and a decline of 19.9% in the second quarter. In the third quarter, it registered a decline of 12.3%, due to a 19.4% decline in government construction. Hotels and Restaurants recorded a return to form with growth of 10.3%, with greater tourist numbers bolstering them. 

Wholesale and retail trade slowed down further, but it still recorded a 3.6% growth, driven by supermarket and clothing sales. The transport and communication sector grew by 1.8%, spearheaded by the port services and airport services, reflecting the greater tourist numbers as well.  Finally, the financial services sector grew by 3.4%, with the banking sub-sector leading the way.

When looked from this angle, it is clear why it is called a ‘technical’ recession – because while certain industries in our economy may struggle, others are on a rebound. The technical recession should be seen as a warning sign, not an indication of economic doom – and we should guard against falling into the paradox of thrift and preventing a recovery. The economy works best when we all pull together – when we Harambee. With the final 2016 GDP figures still to come, let us Harambee at the start of this year to ensure that a technical recession does not turn into a full blown depression.

 

The Outside Context Problem

Originally published in the Informanté newspaper on Thursday, 12 January, 2017.
 

Lo and behold – it is 2017! What a wild year 2016 was! When we started 2016, who could have predicted that the United Kingdom would vote to leave the European Union? Who’d have thought an outsider like Donald Trump would snatch away the election from an established Hillary Clinton? And with Namibia’s growth on a high, who would have thought we’d enter the next year under the cloud of a technical recession?

We’ve lived through a year full of what economists term ‘black swan events.’  In 16^th century London, it was common knowledge that all swans were white – after all, no black swans had ever been seen. Thus, claiming something was a ‘black swan’ was to say it did not exist. But then, in 1697, Willem de Vlamingh saw black swans in Western Australia, and the term ‘black swan’ became known as something that seemed impossible, only to later be shown otherwise.

It is thus an unknown unknown – something we don’t know, that we also don’t realise we don’t have knowledge of. I myself prefer calling it an Outside Context Problem, as referred to by writer Iain M Banks in his Culture novels. As he put it, it’s a problem you’d encounter “rather in the same way a sentence encountered a full stop.”

“The usual example given to illustrate an Outside Context Problem was imagining you were a tribe on a largish, fertile island; you'd tamed the land, invented the wheel or writing or whatever, the neighbours were cooperative or enslaved but at any rate peaceful and you were busy raising temples to yourself with all the excess productive capacity you had, you were in a position of near-absolute power and control which your hallowed ancestors could hardly have dreamed of and the whole situation was just running along nicely like a canoe on wet grass... when suddenly this bristling lump of iron appears sail-less and trailing steam in the bay and these guys carrying long funny-looking sticks come ashore and announce you've just been discovered, you're all subjects of the Emperor now, he's keen on presents called tax and these bright-eyed holy men would like a word with your priests.”

Or as Nassim Taleb put it, “First, [the event] is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme 'impact'. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.”

Nassim Taleb, in fact, first brought the term as applicable to risk management to the forefront, most notably in his 2007 book, The Black Swan. His points make sense, after some rumination. Too often we expect the normal everyday life to continue, with the bits of randomness so prevalent in life to be the same kind of randomness you often find in games – a perfectly normal randomness, in other words. 

But as the past year has shown us, this ‘normal’ Bell-curve randomness results in us actually discounting events with very small probabilities of occurring as they are extreme outliers. And additionally, we’ll never expect events to occur that we didn’t even CONSIDER to be possibilities at all! How do you prepare to mitigate that? Taleb, luckily, has some ideas. Key amongst these is the concept of anti-fragility. In order words, institutions should implement strategies that can capitalize on positive outside context problems, and become stronger due to negative ones. 

He provides several guidelines as to how to achieves this. “What is fragile should break early while it is still small.” In other words, don’t have any institution that is too big to fail. Anything critical should be tested early and often, so that it can fail and show its weaknesses before it becomes critical. “Don’t let someone making an incentive bonus manage risk.” Bonuses don’t accommodate critical collapses. You don’t want to cut corners to show a profit on safety. 

“Only fraud should depend on confidence. Governments should never need to restore confidence.” No one will ever be able to contain the spread of rumours. Instead, our government should be able to shrug off rumours and operate in the face of them. “Do not give an addict more drugs if he has withdrawal pains.” Or, don’t use the same methods to try and solve the problem as the ones that caused it. After all, the definition of insanity is doing the same thing over and over again and expecting different results. “Make an omelette with the broken eggs.” We might be tempted to fix what is broken, but a better solution would be to take the pieces of what is broken, and build something new that cannot be broken as easily. 

It is quite an interesting facet of risk management to examine, and I heartily recommend that those interested do so – after all, it seems more and more that the unthinkable becomes reality. Globally, we’re going to see even more potentially unthinkable scenario’s that could become reality – France deciding to exit the European Union and NATO, a new Italian banking crisis that could precipitate a new banking crisis, Venezuela going into default, a potential trade war between China and the USA, or the USA and Mexico, a successful North Korean nuclear test… These all seem like low-probability events, but ones with far-reaching consequences. 

Locally, we face the possibility of a recession that could stretch into a true depression. We have a drought that may be extended and a possibility of a water crisis. The SWAPO conference is this year as well and that could drastically change the face of our political landscape. We have South Africa that seems teetering on the edge of a political or economic crisis. All of these have the potential to have massive consequences for our nation. 

But there could be outsized positive events as well. The United States could reach a lasting peace with Russia, significantly reducing the chance of war. Namibia could experience immense rainfall, and experience a burgeoning agricultural sector. Our Harambee Prosperity Plan could have a sudden, impactful success, that catapults our economy to new highs. We need to be prepared for that as well. 

But all of this we can see. It’s quite probably things will happen that we’d never have seen coming, that will change our lives forevermore. A true Outside Context Problem. And that is what will test our resolve. That will reveal if the foundations of this Namibian House we’re building remains strong enough to weather any storm, and to grow in times of rain. We should be ever vigilant, and ensure the foundations of truth, loyalty, kindness, generosity, joviality and friendship permeate our society. When the waves break on our shores, we must be ready.