Extortion in Prisoner's Dilemma

This week I stumbled across a fascinating paper by William H. Press and Freeman J. Dyson titled "Iterated Prisoner's Dilemma contains strategies that dominate any evolutionary opponent," published in the Proceedings of the National Academy of Sciences. I think it is fair to say it is the most interesting thing I have read this year. Press and Dyson have somehow discovered something completely new and profound in a field that has already been studied extensively for decades, and have written a beautifully clear and concise paper that you require only some elementary linear algebra to understand. This is the kind of paper we would all love to write, and I've found it hard to stop thinking about it since I first read it a few days ago.

(Incidentally, there is also a physics connection here. Although Press is a computational biologist at the University of Texas he happens to have written several papers in theoretical astrophysics and cosmology, including a famous one with Paul Schechter in 1974, which is one of the most highly cited theoretical papers in all of cosmology. He is also one of the authors of the Numerical Recipes books, which anyone who has ever done any programming has probably used at some point. Dyson is best known to physicists for his work on the theory of quantum electrodynamics, in particular for being the first person — other than Feynman — to recognise the importance of the Feynman diagram. According to Steven Weinberg he was "fleeced" of a Nobel. He's also a remarkable 88 years old. You can read a beautiful character portrait of this complicated man here.)

The dog who climbed a mountain

Three years ago today I took this photograph of a dog on the summit of a Himalayan peak, nearly 6000 metres above sea level.

Dog on the summit of Hanuman Tibba (5932 m) in the Indian Himalayas. 

It wasn't the easiest peak in the world, he was just a pretty amazing dog. Below the fold you can read the story of how he made it there — and as you will see, there was another powerful reason, apart from the dog, that keeps the day quite fresh in my memory.

This piece was first written in 2009 as a report for trustees of the A.C. Irvine Travel Fund, who helped finance my trip, and was later published in the Oxford Mountaineering Journal. It does contain some strong language, for which I apologise.

Calling on Germany

In the New York Review of Books, George Soros has written an excellent long piece on the future of the European Union in light of the Eurozone economic crisis. If what happens in the EU in any way affects your life (and it almost certainly does), you should read it. There is a lot to ponder over in there, including a brief history of European cooperation, an astute diagnosis of the economic problems, and a bold call for action that is unlike anything that has been said anywhere else. It is also written from the perspective of a heartfelt supporter of the idea of a united Europe.

It is that call for action that gathered the most attention in the press, making several newspaper headlines. Soros is quite blunt: he says straight out that at every stage in the crisis, Germany's intention has been to do the absolute minimum required to avert disaster — with the end result that no resolution has been reached, and the can is just a few metres further down the road.

The policies pursued under German leadership will likely hold the euro together for an indefinite period, but not forever. [...] If and when the euro eventually breaks up it will destroy the common market and the European Union. Europe will be worse off than it was when the effort to unite it began, because the breakup will leave a legacy of mutual mistrust and hostility. The later it happens, the worse the ultimate outcome. That is such a dismal prospect that it is time to consider alternatives that would have been inconceivable until recently.

In my judgment the best course of action is to persuade Germany to choose between becoming a more benevolent hegemon, or leading nation, or leaving the euro. In other words, Germany must lead or leave.

Strong words indeed, and not an angle I have seen advocated (explicitly) by anyone else yet. He then goes on to explain a bit more.

Since all the accumulated debt is denominated in euros it makes all the difference who remains in charge of the euro. If Germany left, the euro would depreciate. The debt burden would remain the same in nominal terms but diminish in real terms. The debtor countries would regain their competitiveness because their exports would become cheaper and their imports more expensive. The value of their real estate would also appreciate in nominal terms, i.e., it would be worth more in depreciated euros.

The creditor countries, by contrast, would incur losses on their investments in the euro area and also on their accumulated claims within the euro clearing system. The extent of these losses would depend on the extent of the depreciation; therefore creditor countries would have an interest in keeping the depreciation within bounds.

The eventual outcome would fulfill John Maynard Keynes’s dream of an international currency system in which both creditors and debtors share responsibility for maintaining stability. And Europe would escape from the looming depression. The same result would be achieved, with less cost to Germany, if Germany chose to behave as a benevolent hegemon. That would mean (1) establishing a more or less level playing field between debtor and creditor countries and (2) aiming at nominal growth of up to 5 percent, in other words allowing Europe to grow its way out of excessive indebtedness. This would entail a greater degree of inflation than the Bundesbank is likely to approve.

Whether Germany decides to lead or leave, either alternative would be better than to persist on the current course. The difficulty is in convincing Germany that its current policies are leading to a prolonged depression, political and social conflicts, and an eventual breakup not only of the euro but also of the European Union. How to persuade Germany to choose between either accepting the responsibilities and liabilities that a benevolent hegemon should be willing to incur or leaving the euro in the hands of debtor countries that would be much better off on their own? That is the question I shall try to answer.

As I said, go and read the full argument.

One thing that is generally accepted by everyone is that the ultimate resolution of the Eurozone crisis can only come about through a relative decrease in the wages and prices in debtor countries (Spain, Italy, Portugal et al.) compared to Germany, in order to restore their competitiveness. This can happen in one of two ways: slightly higher inflation in Germany than in other countries, or deflation in other countries and stable prices in Germany. Most people also agree that achieving this entirely through deflation in debtor countries is not only highly unlikely to work, but also exacts a terrible and unnecessary human cost.

This is why Soros argues for Germany to make the sacrifice and accept moderate inflation. He accepts that this is a very hard pill for the Germans to swallow:

[T]he Bundesbank remains committed to an outmoded monetary doctrine that is deeply rooted in German history. Following World War I, Germany had a traumatic experience with inflation; consequently it recognizes only inflation as a threat to stability and ignores deflation, which is the real threat today.

The genuineness of this fear of any inflation is not in doubt. Nevertheless, if you think about it, it is a little bit strange. It is often argued that the Weimar inflation was one of the driving factors behind the rise of the Nazis, and that this contributes to the national psychological scarring. But surely this is the wrong historical lesson. As a few people have argued before, the period of the most dramatic growth in the Nazi share of the vote — from 2.6% in 1928 to 37.8% in 1932 — was long after the awful inflation, and coincided almost exactly with the Great Depression, during which the deflationary policies of Chancellor Brüning dramatically increased unemployment and lowered national income. If we must bring the Nazis into it, we should at least draw the right conclusions.

Thankfully, since Soros wrote his piece, events have moved quickly in Europe and it looks as though a combination of the ECB, the German courts, Spanish firmness and Angela Merkel's surprising new attitude have gained the upper hand over the president of the Bundesbank. Which is just as well, because as Kevin O'Rourke pointed out two years ago, looking at the massive unemployment, civic unrest and success of extremist parties in Europe today would not otherwise leave much room for optimism.

Why are plants green?

Yes, I know, because chlorophyll is green. But why is that? This is a genuine question, so if any readers of this blog can answer it for me, I'd be grateful.

Let me explain a bit more. Yesterday I stumbled across an old post by Peter Coles asking why the Sun isn't green. If you haven't wondered this before, you should have a read. The reason for asking is that the intensity of light emitted by the Sun — which is very similar to a blackbody spectrum at a temperature of close to 6,000 Kelvin — peaks at the wavelengths associated with green.

Some example blackbody spectra. The Sun's surface temperature is about 5,800 K.

Naively therefore one might expect the Sun to appear green, rather than the colour it does, which is ... white (depending a little on where it is in the sky).

I won't explain here why the Sun doesn't appear green, or indeed why we don't see any green stars at all, because that's been done very well elsewhere on the internet. In particular you might want to check out this video explanation. As perhaps you might have suspected, the answer is less to do with physics than with biology of the human eye.

In fact, it's quite easy to come up with a simple ex post facto rationalisation of why we should have evolved so as to perceive sunlight as neutral white colour. 'White', after all, is a somewhat vague and flexible concept, as anyone who has operated a digital camera would know.

But in light of this, what I don't have such a simple explanation for is the fact that plants are green. Chlorophyll appears green because it uses light from the red and blue parts of the spectrum to power photosynthesis, and reflects green wavelengths. But why has it evolved in such a way as to reject precisely that part of the solar spectrum where the intensity of light is highest? Would it not have conferred an evolutionary advantage to make better use of this incident energy?

As I said, I don't know the answer to this little puzzle. Perhaps the explanation comes from chemistry — maybe there is simply some restriction on the possible chemical pathways by which CO₂ and H₂O can be converted into organic molecules, which all evolutionary variants would have to respect, and which renders light of certain frequencies unsuitable. Or perhaps it comes from some quirk of evolutionary history — one of those little inefficiencies that occur due to historical accident, and which are themselves evidence for the action of evolution, like the panda's thumb.

Either way, if you know the answer or can hazard a guess at it, please do tell me.

Things to Read, 8th September

I have been neglecting this series over the summer, so there are rather a lot of things to highlight today.

Science items:

• The most interesting piece of physics news over the last few months has been that the wealthy Russian investor and physics fan, Yuri Milner, decided to award a 'Fundamental Physics Prize' to 9 theorists he chose himself. The amount of the award is a staggering $3 million each, wired overnight into the physicist's bank accounts — as many people have pointed out, this makes the prize worth far far more than the Nobel Prize. Suddenly being a physicist almost appears to be a lucrative career choice. The lucky physicists were Nima Arkani-Hamed, Alan Guth, Alexei Kitaev, Maxim Kontsevich, Andrei Linde, Juan Maldacena, Nathan Seiberg, Ashoke Sen and Ed Witten. All big names in theoretical physics.
• Unsurprisingly, the award of this prize generated a lot of debate. For one thing, it is a huge amount of money. For another, the prizes were awarded basically on the whim of one man, who is not a physicist himself. But perhaps the most controversial thing was reported in the New York Times:
  

  Unlike the Nobel in physics, the Fundamental Physics Prize can be awarded to scientists whose ideas have not yet been verified by experiments, which often occurs decades later.

  This was picked up on by Peter Woit, who is of course well-known for his dislike of some of the work on string theory that the said physicists are famous for, and was highly critical of the prize, including in an article for an Italian newspaper (English transcript from his blog). I guess most physicists would share his unease with the prize, if perhaps not with string theory itself. It was quite amusing to read Matt Strassler finding himself in a position of agreement with Woit but managing to attack him nevertheless (I get the feeling he really dislikes Woit).
• Motivated by this discussion, Strassler did put up a very interesting and nuanced personal defence of string theory. Whether you have an opinion on 'The String Wars' or not, you will probably have heard strong criticisms of string theory. This piece will provide some balance.
• Among the other worthwhile physics discussions were two guest posts at Cosmic Variance: by Terry Rudolph and Douglas Finkbeiner. Both discuss recent research work (in quantum mechanics and searches for dark matter, respectively) and both include interesting little insights into the world of academic publishing.
• Outside physics, I saw a piece by Dr. Dave Hone in the Guardian science section that includes the lines:

  [...] we have dinosaurs everywhere around us. We have dinosaurs nesting in trees in our gardens, tiny dinosaurs that can hover and fly backwards and feed on nectar, aquatic dinosaurs that live in Antarctica. There are dinosaurs that we eat, we have dinosaurs that can circle the globe without landing, intelligent and puzzle-solving dinosaurs, tall and flightless dinosaurs that can sprint at over 40 miles and hour, and brightly coloured and beautiful dinosaurs almost too numerous to mention.

Other items:

• Of course the big news over the summer has been the Olympics. It's been impossible to miss the outpourings of national pride in British newspapers at Team GB's medal tally and I have heard also of despondency in countries such as Russia and Australia. But what is the benefit to a nation from this arms race for medals? This was discussed, rather provocatively perhaps given the timing, by Ian Johnson in the New York Review of Books. 
• There's been a lot of discussion in the US about the Republican presidential ticket, and in the UK about the dire state of the national economy, now in a longer slump than during the Great Depression. Paul Krugman made the obvious connection, and labelled Chancellor of the Exchequer George Osborne "Britain's Paul Ryan." That post includes a graph that should be shown to everyone who still believes austerity in the recession is the answer to anything:
  
  
  
  One could forgive Krugman for feeling rather frustrated (and perhaps a little smug), because this is pretty much exactly what he predicted back in 2010:
  

  The British government’s plan is bold, say the pundits — and so it is. But it boldly goes in exactly the wrong direction.

  See also here.
• Of course some people might remember the 20 "leading economists" who wrote an open letter to The Sunday Times supporting George Osborne's fiscal plans back before the 2010 election. Well, some time ago the New Statesman had the bright idea to go back and ask them if they still stuck by their advice: 9 of the 20 had changed their minds, 10 refused to comment, and only one still agreed with himself.
• You might wonder what a poor politician is to do: if you have only a degree in History and an ideology as substitutes for genuine competence, you naturally rely on the advice of professional macroeconomists. But when the economists disagree with each other, which ones should you listen to? Jonathan Portes had a post laying out some sensible criteria for judging who to take seriously. Unsurprisingly, people like Krugman, Simon Wren-Lewis and Martin Wolf passed the test, but none of the Sunday Times economists did. Portes notes that not all those who pass his test always agree with each other — but he still always takes them seriously.
• The New York Review of Books carries a review of two books on the current global and American economic mess by Paul Krugman (End This Depression Now!) and Joseph Stiglitz (The Price of Inequality: How Today's Divided Society Endangers Our Future). What particularly interested me here was learning just how radical Stiglitz appears to be.
• Incidentally, for those who were interested in the Niall Ferguson episode featured here, John Cassidy in the New Yorker has a longer look at the arguments, and comes to the same conclusions: Ferguson is a lightweight who is being repeatedly knocked to the canvas, and this "isn't a fair fight".
• And finally, since I'd like to end on an uplifting note, here's a video to cheer us all up.