If the cell is the basic unit of life – the living tool that forms the organism – then what is it “designed” to do?
Well, first it has evolved to be autonomous, to survive as an independent living unit. This autonomy depends, in turn, on organization – on the cell’s interior anatomy. A cell is not a blob of chemicals; it has distinct structures, or subunits, within it that allow it to function independently… Second, a cell is designed to reproduce, so that one cell can produce all the other cells that populate the organism’s body. And, finally, for multicellular organisms, the cell (or at least the first cell) is designed to differentiate and develop into other specialized cells, so that various parts of the body – tissues, organs, organ systems – can be formed.
Siddhartha Mukherjee, The Song of the Cell
Our family attended the bat mitzvah of one of Camilla’s best friends earlier this morning. It was exciting to to attend. On the one hand, we know Camilla’s classmate and it feels meaningful to be part of the connection of the special day, for which she has prepared for years; Their class has studied Hebrew, Torah, and Jewish studies for years and, in a sense, the bat mitzvah is a culmination of these studies.
On the other hand, it feels like a preview for Camilla’s own bat mitzvah, which will occur next month. The amount of energy and effort put into her preparation, by her (and her mom!) has been impressive. The role the contemplation and effort have had in her formation of views, about her identity, faith, doubt, and place in the world, have been clearly influenced by the process. And all for the better.
For me, there has been some collision of thoughts provoked by Camilla’s forthcoming bat mitzvah, my recent reading of Siddhartha Mukherjee’s previously quoted book, certain visits with entrepreneurial friends and family, my own venture, and the recent demise of Silicon Valley Bank; I think these should become fodder for a blogpost…
I wonder whether the unifying force in life and science isn’t the existence of paradox.
Song of the Cell
In addition to my time serving clients directly and leading businesses, I have also made numerous private investments over the years. Two of these investments have been in seed-stage ventures operating in biological sciences: Biomagnetic Solutions, LLC and Trailhead Biosystems Inc. In both cases, my thesis for investment was something akin to “bet on the jockey, not on the horse.” I felt I was making a good judgement to bet on Ted and Jan, given their views of the market opportunities and abilities to execute on the business plans. Having learned more about the business of science in the years since making these investments, I would do them again!
In talking with these fellows about their views of the business, and conversing over many late evenings in graduate school with classmates in executive roles in pharma and biotech, I regularly felt inadequate when discussion pushed into depths and became more laden with technicalities: “What is the difference between a small molecule and a large molecule?” “What, precisely, is a stem cell? An iPSC?” Heck, I never clearly learned the distinctions between proteins, amino acids, and enzymes. I saw this book as a bridge I could cross over a recent vacation to fill in some of these gaps.
I loved this book. Not surprisingly, I found myself more relating to the anecdotes, history, and personalities than the actual progress of the science. Much like reading Thomas Kuhns‘ The Structure of Scientific Revolutions, this book offers insights into the nature of (non-linear, long-term) improving trends in our understanding of the world. One of the ideas developed early in Mukherjee’s book is the idea that, at the same time, multicellular organisms consist of many cells which are mutually supporting and systemic, while also entirely independent and autonomous (each defined by its own membrane.)
The one and the many. A paradox.
Laplace’s Demon
I was listening to a Sam Harris podcast a few weeks ago and the guest, when asked about his view of why a certain topic was true, referenced a thought experiment which was initially presented by Pierre-Simon Laplace. The experiment was described as follows:
"We may regard the present state of the universe as the effect of its past and the cause of its future. An intellect which at any given moment knew all of the forces that animate nature and the mutual positions of the beings that compose it, if this intellect were vast enough to submit the data to analysis, could condense into a single formula the movement of the greatest bodies of the universe and that of the lightest atom; for such an intellect nothing could be uncertain and the future just like the past would be present before its eyes." — Marquis Pierre Simon de Laplace
Harris’ guest offered that Laplace’s Demon had no need for formulas of kinematics; Given a perfect knowledge of every atom at a moment in time along with every force, it would be therefore determined how movement and behavior would progress; It is impossible for us to have such knowledge, but also unnecessary, as long as we develop models that do not disagree fundamentally with underlying principles, we can very precisely predict behavior in many systems.
As I read Song of the Cell and reflected on Laplace’s Demon, I found myself cycling through memories of discussions with biologist friends who were lamenting how their field was considered a “soft science,” aspects of Harris’ views on the illusion of free will, and my own undergraduate studies of economics. Now, as I sit in my living room and write this blogpost, I also think back on Camilla’s friend’s speech this morning about a paradox from Rabbi Akiva: “All is foreseen, and permission is given.“
I think about Karl Popper; Popper wrote in his dissertation that it was “the priority of the study of logic over the study of subjective thought processes.” I inquired with Chat GPT how I could best represent Popper’s ideas:
According to Popper, a scientific theory is only meaningful if it is capable of being tested and potentially falsified by empirical evidence. In other words, a theory should be stated in such a way that it can be tested and potentially shown to be false. Popper's theory of falsifiability had a significant impact on the philosophy of science, as it challenged the prevailing view that science progresses through the accumulation of evidence in support of theories. Instead, Popper argued that scientific progress is achieved by identifying and eliminating false theories, rather than by verifying true ones. Furthermore, Popper believed that a theory cannot be proven to be true, but can only be supported by empirical evidence. This means that even if a theory has been extensively tested and never been falsified, it still cannot be considered absolutely true, but only provisionally true until new evidence or better theories emerge.
I think the appeal of Popper’s ideas is the lack of obvious paradox.
Science and Pseudoscience
As a young man, I chose to study economics as an undergraduate at Penn State. I was curious about human behavior, the role of government, and the impacts of business on society; More important to me at the time, though, was an undergraduate degree in econ was the only field that felt approachable to me that consistently landed on Top 10 lists of top earning majors for college graduates. I didn’t want to study chemical engineering or computer science, and I wanted to make money. Economics was my path.
I was troubled in my courses at Penn State by a feeling, notably in economics and sociology, that the professors had (over)confidence that their research and theories could hold up similar to research and theories in physics and chemistry. As the years have progressed, my sense has become much stronger that these fields of inquiry into the human condition, along with anthropology, psychology, and philosophy, are simultaneously important and deserving of skepticism. Various articles have demonstrated the problems with replicating research across fields (and not just in social sciences). For example: here, here, and here. I imagine Karl Popper would be horrified by these articles.
I find it striking how confident, and wrong, so many highly trained economists were about the relationship between inflation and money supply and/or the Federal Reserve’s balance sheet. Here is a quick graph of inflation (CPI) and money supply I pulled from the St. Louis Fed.
Paul Romer captured some similar concerns in this essay.
For more than three decades, macroeconomics has gone backwards. The treatment of identification now is no more credible than in the early 1970s but escapes challenge because it is so much more opaque. Macroeconomic theorists dismiss mere facts by feigning an obtuse ignorance about such simple assertions as "tight monetary policy can cause a recession." Their models attribute fluctuations in aggregate variables to imaginary causal forces that are not influenced by the action that any person takes. A parallel with string theory from physics hints at a general failure mode of science that is triggered when respect for highly regarded leaders evolves into a deference to authority that displaces objective fact from its position as the ultimate determinant of scientific truth. Paul Romer, The Trouble With Macroeconomics, 2016
I think Romer’s essay reflects the fundamental challenge in dealing with efforts to advance knowledge given the human condition; “To me, this reveals a disturbing blind spot. The trouble is not so much that macroeconomists say things that are inconsistent with the facts. The real trouble is that other economists do not care that the macroeconomists do not care about the facts. An indifferent tolerance of obvious error is even more corrosive to science than committed advocacy of error.”
Does the study of human behavior and incentives being confounded by the human condition constitute a paradox? I think so.
Silicon Valley Bank
I don’t have strong opinions about the federal response to the Silicon Valley Bank run. Bank runs are not new phenomena, though, and are essentially a simple combination of quick and dramatic drops in confidence which become self-reinforcing (and self-actualizing) mechanisms, amplified by the nature of fractional reserve banking which is to borrow-short and lend-long.
In other words, banks operate in society with assumptions about stable periods during which, usually, they earn profits driven by the net interest margin, a.k.a. the “spread” between cost of funding and earnings from loans; That is, until the stable periods become unstable. How often does that occur? Well, here are a few examples:
- 2008-2012: 465 banks failed
- 1986-1995: ~1,000 savings and loan thrifts failed
- 1930’s Great Depression: ~9,000 banks failed
Other crises included American panics in 1901, 1907, and global crises in the 1970’s (e.g. UK) and 1920’s and 1990’s in Japan.
I think the questions of moral hazard, accounting standards specific to HTM securities, and ALM all deserve a place in public discourse; I am particularly curious about how much attention was paid by regulators on the liability-side of the SVB balance sheet and, notably, the concentration and makeup of uninsured depositors.
Leo Tolstoy wrote, “Happy families are all alike; every unhappy family is unhappy in its own way.“ Similarly, bank runs and financial crises arise in history based on idiosyncratic shocks which are best represented by Donald Rumsfeld’s term: “the unknown unknowns.” An important ingredient to these risks, though, is the reaction function of people, prompted by greed, fear, and context, and influenced by bias.
Individuals voting with their pocketbooks; Individuals leading organizations contemplating impacts to bonuses, 401k balances, and unvested options; Families demonstrating risk aversion; The one and the many.
Some final thoughts
I wonder how analogous the biology described by Mukherjee is to the American financial system: Is our global financial architecture akin to some combination of central-nervous and circulatory systems, conveying information across our society and transferring capacity for funding based upon outlooks for productivity? Is an occasional failed project not dissimilar to a pathogen, isolated and broken down by an innate immune system? Perhaps systemic risk, like the failure of LTCM in the 90’s or AIG FP in ’08, arises from a more structural rot, not dissimilar to a financial cancer; In each of these cases, of course, numerous parties, led by individual decision-makers, autonomously responding to their own reaction functions and biases, led to cascades. Maybe these cascades, across entities and areas of the economy, such as Moody’s and AIG FP to the government of Norway and homeowners in Las Vegas, is quite similar to metastasis.
And let’s hope that recent steps taken in the US and Switzerland let us look back on March 2023 as analogous to a minor illness and not a Stage 2 lymphoma. [I am hopeful we are on the right track!]
In any event, we enjoyed dinner with friends tonight to celebrate the bat mitzvah of Camilla’s friend at Toftrees in State College, the location of our own wedding in 2006. The joy of these types of gatherings is a function of the individuals celebrated as well as the connection to the group; The one and the many. I don’t know that I think of this as a paradox. Just a really nice detail.
