Mathematicians From The United States

"Clearly, information is of the utmost importance in making economic decisions, especially when it comes to securities or other assets whose value depends on events not yet known. Now the distribution of information cannot simply be taken as given. On the contrary, information can be acquired at some cost."

"Alchian: Perhaps it might have been more appropriate for the Nobel Prize to have gone to you and Hicks together, and [Kenneth] Arrow and [[Gunnar Myrdal|[Gunnar] Myrdal]] together. Hayek: Oh, surely. [laughter]"

"As we see it, a choice is not something you do today in isolation; it is part of a plan that includes some choices to be made in the future."

"The Austrian a priori dogmatism (von Mises, especially; Hayek, to a lesser degree)."

"I don't know which way human psychology will go wrong. We have a world in which there is uncertainty. There are new technologies. And one of the problems is that we do things today with a thought to the future. Any purchase is one for the future. If you buy a refrigerator you are making a commitment to the future, so that you have food to eat for the next ten years. That's a simple theory, one of many simple theories -- theories that people agree on and that don't, in a fundamental way, change. But every once in a while there is unemployment, and wages will drop, and there will be several different interpretations."

"I was a very polite person, though. Paul Samuelson tells these stories how he used to correct his professors. I assume that’s true. But I wasn’t that type."

"There are information asymmetries in this story. Health insurance is limping along. It's limited in scope, and then you other consequences. Insurance companies have high premiums to protect themselves. The ones who come to the insurance company are sicker and the people have to pay more. You have adverse selection. You have moral hazard. And the doctor does what's on the safe side -- defensive medicine -- without regard to cost. These are fundamental conditions that make health insurance difficult. You have some things that help. Some doctors understand that they shouldn't abuse the system. But you still see problems in the way doctors behave towards patients. They goof off. Sometimes it's too much work. Some things are difficult and risky to diagnose."

"My own view is that both endogenous and exogenous elements are important in explaining innovation. Incentives certainly play a role, but so does the general state of scientific knowledge, which is not directly produced by profit-making entities."

"We don't have much time left. We are moving towards temperature increases of around two degrees Celsius, which is going to have consequences in the tropics, and we will lose things like glaciers. That's not a theory; it's happening right now. It's not a prediction; it's happening right now. But you just sightsee near those glaciers. But the glaciers are a big source of water. And on the questions of water, in California we store our water in a snowpack. When that's gone, the rain will be the same but it won't accumulate. With warming temperatures the snowpack will not work. It might be possible to substitute with dams, but that's complicated. This is conjoined with a big energy problem and I think that we really have to encourage development in this area. Just waiting for technological improvement won't work. We need to encourage it."

"Then during the early '50s Kenneth Arrow published his book Social Choice and Individual Values (1951). That stirred up a great deal of interest, both in political science and economics. My general reaction was that the people who criticized Arrow, and Arrow himself, really didn't quite get the message in the sense that the concentration was on the fact that majority rule would not give you a political equilibrium, that you get this political cycle and so forth. My criticism basically was, if that's the way the preferences are, that's what you want to have. A democracy should not mean one majority simply ruling. It ought to be a rotation, if that's the way the preferences are. I was kind of an anti-majoritarian then and now. So my critique of Arrow, which not many people paid much attention to, got me further into thinking about these things."

"The creation of knowledge that constitutes an innovation is in turn dependent on the acquisition and application of existing knowledge; information is an input into the production of information. This background knowledge and the ability to use it are the most important elements of the social context of individually motivated innovation."

"For the voucher system to work, it would be necessary to have informed parents. One cannot be dogmatic without empirical evidence, but I would be surprised if the average parent has the time or patience or competence to digest the relevant information. Indeed, one wonders where the information is to come from and in what form it should exist. Do we use test scores, themselves affected by the selection processes of the students? Impressions of individual teachers or of the physical appearance of the school will tend to dominate."

"Child care has grown up under different circumstances than education and probably for a mixture of reasons, good and bad. There are many systems of child care, some private, some public. As compared with primary and secondary education, there is clearly less need for coordination. The sequencing of classes is much less important. It would appear that the ability of parents to monitor the conduct of the child care activity is much greater because the activity is much closer to everyday experience and knowledge. Most of the informational and structural arguments for the public supply of education are absent in the case of child care. Reputation and experience may suffice for adequate monitoring."

"The conflict of incentives and information is increasingly leading to a diffusion of responsibility for medical decisions. The simple picture of the physician making decisions for the patient has certainly become more complicated. Patients always had a role in choosing to seek medical advice and from whom. Their choices are becoming increasingly restricted as medical practice becomes more organized. The problems of cost control in an insured world are partly met by the increasing use of control of medical services through review by health maintenance organizations and insurance carriers."

"Krugman's whole attack is directed at a statement made neither by Arthur nor by Cassidy. Krugman has not read Cassidy's piece with any care nor has he bothered to review what Arthur has in fact said."

"Unfortunately, the word 'learning' is a very general word. It isn't a very specific theory and we can have a lot of learning models, and it's unlikely that any one is going to track. When you talk about learning, you talk about the human mind adapting to conditions, and we haven't nailed that down very well. This is always an objection to the whole idea of bounded rationality. Not that it's wrong, but if it's right, it doesn't actually tell you what to do. Rationality is unique. That isn't really quite true, but at least under many circumstances it is. To say that we're not at the top of a hill gives you a lot of variety as to where you might be. So the problem with bounded rationality is not that it's wrong. On the contrary, I think it's very apt to be correct. It's just that its predictions are a lot more vague than those implied by rationality. At the moment, I don't know what to do about that."

"I think one of the things we learned from the physicists and also the theoretical biologists is the idea that when you're dealing with very complex systems you're going to get a large variety of behavior which can be interpreted as hill climbing, but hill climbing with a lot of modifications, hill climbing with big jumps occasionally. This is an elaboration of the idea of the learning model. The learning model story takes off from psychology, but the adaptive processes take off from biology and physics. They have the same story. One thing it does suggest in some sense is that we have to be more modest in what we claim."

"There are many unknowns in the creation and use of knowledge as a factor of production. Still, two main lessons stand out: * Every country or firm must have education and training in technology and science, even if the research is not on par with that being conducted elsewhere. Knowledge cannot be absorbed unless some knowledge is already possessed. * Countries and firms must be open to new ideas, have multiple sources of new ideas, and see that ideas are diffused. This point strongly argues for freedom of entry, even when it seems to forgo economies of scale."

"The slippery role of information as an economic good is of deep significance to economic behavior, especially in the relatively information-rich modern economy. It is an economic good in the traditional sense; it is valuable, and it is costly. But it has a peculiar algebra. Adding one ton of steel to another permits more to be done; repeating the same item of information does not add anything useful. On the other hand, supplying a ton of steel to another reduces the steel available to the supplier; supplying information to another does not reduce the information available to the supplier."

"I was early regarded as having unusual intellectual capacity. I was an omnivorous reader, and I added to that a desire to systematize my understanding. As a result, history, for example, was not merely a set of dates and colorful stories; I could understand it as a sequence in which one event flowed out of another. This sense of order crystallized during my high-school and college years into a predominant interest in mathematics and mathematical logic."

"As a general rule, the greater the uncertainty, the better to avoid large and irreversible commitments, to the extent that it is possible. When the famous 1930s gangster, Dutch Schultz, was dying, his incoherent last remarks were taken down by a stenographer. One of them was. "Don't make no bull moves." His words are a lesson for the kind of future that one might choose. Maintaining flexibility or keeping ones options open, is key in these matters."

"I interpret moral obligation as the carrying out of agreements which may, however, be implicit. Thus, a society in which everyone immediately executed his aggressive impulses would be untenable. Therefore, there is an agreement that I will refrain from aggressive actions, which in themselves give me satisfaction, in return for your not taking aggressive action against me. However, conscious agreements to achieve these ends are much too costly in terms of information and bargaining. Therefore, as societies have evolved they have found it economical to make these agreements at an unconscious, implicit level. Internalized feelings of guilt and right are essentially unconscious equivalents of agreements that represent social decisions."

"I am old-fashioned enough to retain David Hume’s view that one can never derive “ought” propositions from “is” propositions. The two issues, method and value, are distinct."

"Information, one of the fundamental determinants of production, laps over from one firm to another, yet the firm has so far seemed reasonably sharply defined in terms of legal ownership. It seems to me there must be increasing tensions between legal relations and fundamental economic determinants. Small symptoms are already appearing in the legal and economic spheres. There is continual difficulty in defining intellectual property. The United States courts, at least, have come up with some strange definitions of property."

"Various medical groups are continually putting out advice as to health-inducing behavior (diet, exercise, and so forth). Individuals who follow this advice will reduce their demand for medical services. An extreme version is the campaign of the American Dental Association for fluoridation of water, a measure designed to reduce cavities and so the demand for dental services. There is also a logical problem. How does the relatively small group of physicians acquire power? In a democratic system, political power derives from numbers or from wealth. While physicians are certainly relatively well off, they do not have the concentration of wealth of many industries. Their power, it seems to me, is derived from moral authority. It is derived from the same professional respect that we are trying to explain. Indeed, when the American Medical Association came into conflict with either the retired or with the business interests that bought medical plans, the weakness of its power base quickly became apparent."

"In technical economics, I see a peak with Paul Samuelson and Kenneth Arrow and some of the core developments in game theory. Since then there are fewer iconic figures being generated in this area of research, even though there are plenty of accomplished papers being published."

"Mathematicians seem to have no difficulty in creating new concepts faster than the old ones become well understood, and there will undoubtedly always be many challenging problems to solve. nevertheless, I believed that some of the unsolved meteorological problems were more fundamental, and I felt confident that I could contribute to some of their solutions."

"By showing that certain deterministic systems have formal predictability limits, Ed put the last nail in the coffin of the Cartesian universe and fomented what some have called the third scientific revolution of the 20th century, following on the heels of relativity and quantum physics... He was also a perfect gentleman, and through his intelligence, integrity and humility set a very high standard for his and succeeding generations."

"We see that each surface is really a pair of surfaces, so that, where they appear to merge, there are really four surfaces. Continuing this process for another circuit, we see that there are really eight surfaces etc and we finally conclude that there is an infinite complex of surfaces, each extremely close to one or the other of two merging surfaces."

"Churchman recognized in his critical systemic thinking that the human mind is not able to know the whole. … Yet the human mind, for Churchman, may appreciate the essential quality of the whole. For Churchman, appreciation of this essential quality begins … when first you see the world through the eyes of another. The systems approach, he says, then goes on to discover that every worldview is terribly restricted. Consequently, with Churchman, a rather different kind of question about practice surfaces. … That is, who is to judge that any one bounded appreciation is most relevant or acceptable? Each judgment is based on a rationality of its own that chooses where a boundary is to be drawn, which issues and dilemmas thus get on the agenda, and who will benefit from this. For each choice it is necessary to ask, What are the consequences to be expected insofar as we can evaluate them and, on reflection, how do we feel about that? As Churchman points out, each judgment of this sort is of an ethical nature since it cannot escape the choice of who is to be the client—the beneficiary—and thus which issues and dilemmas will be central to debate and future action. In this way, the spirit of C. West Churchman becomes our moral conscience. A key principle of systemic thinking, according to Churchman, is to remain ethically alert. Boundary judgments facilitate a debate in which we are sensitized to ethical issues and dilemmas."

"Systems thinking, as written about and practiced by Russell Ackoff, C. West Churchman, Peter Checkland and others, contained within it many of the impulses that motivate the application of design ideas to strategy, organization, society, and management. Ideas such as engaging a broad set of stakeholders, moving beyond simple metrics and calculations, considering idealized options and using scenarios to explore them, shifting boundaries to reframe problems, iteration, the liberal use of diagrams and rich pictures, and tirelessly searching for a better set of alternatives were all there. If the business and management community had bought it, we would not be having the many discussions about design, design thinking, and expanding management education to engage the intuitive, to embrace values, to look beyond available choices."

"Managers within organizations sometimes confront a type of problem that is difficult to solve, in part, because the problems involve many stakeholders with diverse perspectives. The different assumptions from each perspective result in differing views of the problem and potential solutions. It is difficult to produce a satisfactory potential solution when the formulation of the problem definition is the major concern and when applying a potential solution risks unintended consequences. Churchman (1967, p. 141) writes that the solutions proposed to solve these problems "often turned out to be worse than the symptoms""

"Everybody's daily life consists of problems arising from what you decided yesterday. Managers understand that. Mathematicians want to solve a theorem, publish the results and walk away clean. Managers never walk away clean. The real world is a very dirty place. Clarity is supposed to be the objective of science. I disagree. I think the objective of science is confusion, because confusions carries you into problems."

"I was an Editor-in-Chief of Philosophy of Science during its early years. Now, over a half century later, I have to admit that I was not very clear what the journal was about, except that it tried to reflect on the meaning of science and its relation to other human activities. At this time I am even less sure of its purposes."

"If the story of my early years with Russ sound like they were years of battle, then the sound is correct."

"Prediction of events is a central problem to which students of decision making have also addressed themselves. See, for example, Simon (1957), Churchman (1948), Bross (1953)."

"It would be a good thing, if the systems planner's germination was moral outrage and not just a mild felt need. In other words, I do not think we should view the major problems of the world today with calm objectivity. We shouldn't first ask ourselves for a precise and operational definition of malnutrition. We should begin with 'kids are starving in great numbers, damn it all!"

"General systems theory is considered as a formal theory (Mesarovic, Wymore), a methodology (Ashby, Klir), a way of thinking (Bertalanffy, Churchman), a way of looking at the world (Weinberg), a search for an optimal simplification (Ashby, Weinberg), didactic method (Boulding, Klir, Weinberg), metalanguage (Logren), and profession (Klir)."

"The design of my philosophical life is based on an examination of the following question: is it possible to secure improvement in the human condition by means of the human intellect? The verb 'to secure' is (for me) terribly important, because problem solving often appears to produce improvement, but the so-called 'solution' often makes matters worse in the larger system (e.g., the many food programs of the last quarter century may well have made world-wide starvation even worse than no food programs would have done.) The verb ‘to secure' means that in the larger system over time the improvement persists. I have to admit that the philosophical question is much more difficult than my very limited intellect can handle. I don't know what 'human condition' and 'human intellect' mean, though I've done my best to tap the wisdom of such diverse fields as depth psychology, economics, sociology, anthropology, public health, management science, education, literature, and history. But to me the essence of philosophy is to pose serious and meaningful questions that are too difficult for any of us to answer in our lifetimes. Wisdom, or the love of wisdom, is just that: thought likes solutions, wisdom abhors them."

"For the goal planner, reality stops at the boundaries of the problem. For the objective- planner, it stops at the boundaries set by feasibility and to some extent by responsibility. For the ideal-planner, there are no "real" boundaries."

"The story begins with a somewhat disgruntled hero, who perceived of the world as populated with stupid people, everywhere committing the environmental fallacy. The fallacy was a case not merely of the “mind’s falling into error,” but rather of the mind leading all of us into incredible dangers as it first builds crisis and then attacks crisis. Like all heroes, this one looked about for resources, for aids that would help in a dangerous battle, and he found plenty of support – in both the past and the present. It won’t hurt to summarize the story thus far. If the intellect is to engage in the heroic adventure of securing improvement in the human condition, it cannot rely on “approaches,” like politics and morality, which attempt to tackle problems head-on, within the narrow scope. Attempts to address problems in such a manner simply lead to other problems, to an amplification of difficulty away from real improvement. Thus the key to success in the hero’s attempt seems to be comprehensiveness. Never allow the temptation to be clear, or to use reliable data, or to “come up to the standards of excellence,” divert you from the relevant, even though the relevant may be elusive, weakly supported by data, and requiring loose methods. Thus the academic world of Western twentieth century society is a fearsome enemy of the systems approach, using as it does a politics to concentrate the scholars’ attention on matters that are scholastically respectable but disreputable from a systems-planning point of view."

"The enemies will be asking reasonable questions, like Isn't politics the way matters are really decided, and isn't the rational systems approach simply one political device, to be used when politically expedient? Or isn't morality essentially inexpressible in terms of concepts and words, and doesn't this essentially ineffable quality of our lives lead us humans to decide the way we do? Or, isn't religious imagery really the basis of all our perspectives and concepts, including the perspective of the systems approach? And what is it that carries the values we humans cherish? It is not the ego or the mind, but, say our basic aesthetic feeling, which cannot be conceptualized. And finally, and most generally, why is a rational, holistic approach desirable for the human species, especially since it so often gets out of hand, missing the vital essence of the specific and individual, the here and now, encompassing "everything" to the exclusion of every thing?"

"Enemies are hostile, out to stop you, to eliminate you and your ideas; they are also to be loved, even as yourself."

"Common to all these enemies is that none of them accepts the reality of the "whole system": we do not exist in such a system. Furthermore, in the case of morality, religion, and aesthetics, at least a part of our reality reality as human is not "in" any system, and yet it plays a central role in our lives. To me these enemies provide a powerful way of learning about the systems approach, precisely because they enable the rational mind to step outside itself and to observe itself (from the vantage point of the enemies)."

"We must face the reality that the enemies offer: what's really happening in the human world is politics, or morality, or religion, or aesthetics. This confrontation with reality is totally different from the rational approach, because the reality of the enemies cannot be conceptualized, approximated, or measured."

"Suppose we consider, not the rationality of holism, but its spirituality. Holism traditionally says that a collection of beings may have a collective property that cannot be inferred from the properties of its members."

"Finally we should note the basic assumption of the classical laboratory-namely, that nature is neither capricious nor secretive. If nature were capricious, she would tell one observer one thing and another observer a quite different thing... Also nature is not secretive, in the sense that she will not forever hide certain aspects of her being..."

"Knowledge is a potential for a certain type of action, by which we mean that the action would occur if certain tests were run. For example, a library plus its user has knowledge if a certain type of response will be evoked under a given set of stipulations."

"Design, properly viewed, is an enormous liberation of the intellectual spirit, for it challenges this spirit to an unbounded speculation about possibilities."

"To conceive of knowledge as a collection of information seems to rob the concept of all of its life. Knowledge resides in the user and not in the collection. It is how the user reacts to a collection of information that matters."