At first sight there might not seem to be much connection between the belief in Intelligent Design and the ongoing meltdown of the world’s financial systems. I think there are some interesting parallels to be drawn though, that help explain perhaps some of what went wrong.
Intelligent Design (ID) is the belief that some or all parts of the universe were designed by something. At it’s most basic the belief is driven by the idea that some of what we perceive in the world around us is so complex, or well-designed, that it could not possibly have arisen through simple processes driven by the laws of nature. That it must have been “designed“.
One oft cited example is the human eye. This, some claim, shows such a marvellous degree of fitness for it’s purpose, such remarkable appositeness, that it could not have arisen through nature. This is a property known sometimes as irreducible complexity.
This of course leads to a most interesting question – what is the limit of what can be produced by simple laws? How can we spot something that has been created by “design” and one that has been created systemically.
Well, there is one property that tends to be exhibited by goal-seeking systems,as opposed to designed results. That is the presence of local maxima.
You can think of goal seeking systems, such as evolution, as systems that attempt to maximise one or more properties. The example I’ll show below is a very simple one, but imagine it extended to encompass multiple properties in many dimensions.
Imagine we start at a certain time and the thing we’re trying to maximise has a certain value. We make some modifications to the available “knobs” we can twiddle, and step forward a step in time. We discover this property is at some new position. If this position is better than the previous one, then we’re winning.
Systems like that often find local maxima – the highest local point. Here’s a lovely diagram from Wikipedia that illustrates it.
If we are somewhere in the little hill under “local maximum” then in attempting to find the “best” solution we will fail – but we will find the local maximum. There are algorithms that can improve on this sort of thing, such as Simulated Annealing, however all of them have the same property, ultimately, of a lack of what we could term “vision”.
So, do we see this in the human eye? In fact this sort of thing is found throughout the “design” of every life form you can examine – in the case of the eye, it is is built “backwards and upside down”, requiring “photons of light to travel through the cornea, lens, aquaeous fluid, blood vessels, ganglion cells, amacrine cells, horizontal cells, and bipolar cells before they reach the light-sensitive rods and cones that transduce the light signal into neural impulses- which are then sent to the visual cortex at the back of the brain for processing into meaningful patterns.” (Dr. Michael Shermer, as quoted by Christopher Hitchens in his book “God is Not Great”, pg.82).
The human eye is very poorly “designed” in fact. It contains many local maxima in it’s construction, showing it’s systemic roots.
So, the Credit Crunch. Here we have another example of a system – one we optimistically call a Free Market. Here we have another goal-seeking system. Individual players are supposed to maximise their profits without indulging in coordinated planning. Such planning is in fact frowned upon – cartels, price fixing and insider trading are illegal.
Again we see in the leaden hand of the market that it finds local maxima, not global ones.
Each individual system’s attempt to find the maximum manages to find at best only local maxima. Certainly they may do better than the simplistic example above – they may continue past the tiny foothills tomorrow in search of a better hummock next month, however their horizons are relatively short, and they must show progress upwards, at least by the next quarterly statement.
This of course is fine when local maxima are acceptable, but just as the human body would have profited greatly from a designer, so would our financial system, as is now painfully revealed. You cannot blame the players for following the rules, just as you cannot blame our genes for our rubbish eyes. They were only following the rules.
Blame must be laid, in the case of this financial disaster, on the regulators and politicians who believed that markets were somehow magically able to find the best of everything. They just cannot, and to expect them to is the same as expecting evolution to produce perfection.
It is almost amusing to note, of course, that many of those in the US who do not favour intelligent design in markets do believe in it for mammals. A bizarre confluence of opinion that would be funny if, as Andy said today, we weren’t actually living here.