#7 Soros the hedgehog and learning online

An intro to reflexivity, learning online, and the point of online courses

Welcome readers old and new. This is one of Thomas Hollands’ notes in his search for ideas which are surprisingly general, or generally surprising. The first issue explains the project, and you can find all past issues here.


Soros 101: The principle of reflexivity

George Soros is a hedgehog. In the words of Isiah Berlin, he knows “one big thing”. Soros’ One Thing is big indeed. It is a nuanced model of the interplay between social systems and base-reality, a Theory of Everything which has allowed him to amass a fortune of over $30 billion dollars. He calls it the theory of reflexivity.

Let’s find out how it works.

In natural systems, like physics, there is a purely objective reality. Causes and effects can be teased apart, and laws can be deduced by an observer, whose attempts to understand the system do not affect the system itself. In a natural system, the observer’s mind sits outside of it. Even though the observer can change the system by interacting with it (for example by making a quantum mechanical measurement), his understanding of the system does not change it. The observer cannot see everything going on in the system — he is fallible. As a result his mental model of the system can change over time, as he gleans more insights about what he is studying. His mental model of the system can change without altering the system itself.

Physical Systems: Though an observer can interact directly with the system, his model of the system (the way he thinks about it) does not influence it. It sits outside the system.

Social systems are more complicated. Social systems are comprised of a web of interactions between different people. There is objective reality: the structure of the web can be mapped out, and cause and effect can still be established. But there are also subjective realities: each participant has their own unique, path-dependent experience within the system. All participants are fallible — they have limited information, which results in them making imperfect, inaccurate models of the system and their place within it. Unlike natural systems, these models are not independent of the system itself. You cannot exist “outside” it. Your understanding of a system shapes the information you collect, which shapes your actions, and thus re-shapes your understanding of the system.

This is the principle of reflexivity. Fallible participants in a social system act based on their personal inaccurate models of reality, and their actions change the system in ways they didn’t intend. This in turn means their models become worse representations of the system, and the cycle continues again. This mismatch between individual agents’ models and their reality causes some funky behaviour.

Social systems: An observer’s beliefs about the system cannot be separated from the system. Even without taking decisions, his beliefs about the system influence the system itself.

In a social system, there is a difference between ‘real’ variables and ‘perceived’ variables. Real variables, like the number of shoes a company produced in a year, can be measured. Perceived variables, like a company’s market capitalisation, are the result of opinion. It is obvious that fundamental real variables can influence perceived variables; all else equal, the company with higher sales will be more valuable. It is less obvious that causality can run the other way — but negative analyst expectations can trigger increased lending rates to a company which can increase the probability of that company defaulting on debt. In the social sphere, expectations can become reality. Reflexivity explains how.

It all hinges on positive social feedback loops.

These occur when increases in a ‘real’ variable influence a perceived variable, which then drive up more increases in the ‘real’ variable. A classic example is a housing bubble. Consumer credit is cheap, which means more people take out mortgages. This makes real estate prices rise. There are fewer defaults, and lending earns a better return. This makes banks relax provision of credit. Which means more people take out longer, riskier mortgages. And so on, and so on. The real variable — effective consumer interest rates on a mortgage, influences a perceived variable — house prices. This influences the return on mortgages, which makes banks decide to lower barriers to borrowing. On and on this goes, until borrowers begin to default. Then expectations lean the other way, and house prices collapse.

A special (and very useful) case of reflexivity is Boyd’s OODA loop. In the OODA loop, you observe the environment, taking in empirical evidence from your limited point of view. Then, you orient yourself within your environment, making a model of yourself and other agents. Finally you decide what to do, and then actually do it. Your action affects the environment, and your orientation affects the empirical data you seek.

Reflexivity and the OODA loop are two kinds of models which have fallen between the cracks — they are highly explantory, but somehow aren’t taught in conventional academia. Unless you work in finance, military strategy, or waste hours of time reading random stuff on the internet, you’re unlikely to hear about them.

We’ll discuss these ideas again in a few weeks’ time.

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Learning Online

And why online courses aren’t about the knowledge.

Something slightly different this week — a Breaking Smart style riff on learning online.

  1. Pre internet, if you wanted to learn a skill, you'd either go to the local library and hope they had a book on it, or try to find someone who could teach you. Both learning materials and teachers were scarce. Having access to great materials was thus a great advantage.

    1. My favourite example of this is from Game of Thrones. When Jon Snow first trains with the Night’s Watch at the Wall, he laughs at his fellow brothers, most of whom are terrible swordsmen. It takes Tyrion Lannister to point out that Jon grew up in a wealthy family, and was trained in martial arts daily by expert warriors. It was Jon Snow’s learning environment, with an abundance of great teachers, that made him a good sword fighter. These other men were poor, and had no such advantages.

  2. After the internet was created, a Cambrian explosion of learning materials were shared online. Search engines like Google helped index content, surfacing the most used learning materials and submerging the least used. It was an enormous equaliser: Now everyone had access to the best materials. Anyone with enough desire could learn anything from a book.

  3. But this only helped people who wanted to learn things which were written in books. Books are great for learning abstract things (like physics) or written things (like poetry), but not athletic skills (like how to cross a football) or social skills (like telling jokes). Many skills are difficult to boil down into words, and reading words is not an efficient way to learn them. A book can replace a maths teacher, but it can't replace a football coach.

  4. But a Youtube video can. Further increases in bandwidth, and advances in camera hardware have made video sharing ubiquitous. Now, we can watch Youtube videos of just about anything, from people building their own houses from scratch, to full sports matches. And we can pause, slow-down and rewind the videos whenever we like.

  5. We can watch someone pass a football, pause the video, and mimic them exactly. Like Ryan Gosling's character in Laland, we can listen to the same 10 seconds of music over and over, internalising the rhythm and melody until we can reproduce it just right.

La La Land - Sebastian (Ryan Gosling) at home playing the piano ...

My man. Playing Thelonius Monk.

  1. Youtube has done for sports, standup and physical skills, what Wikipedia and the early internet did for writing and abstract skills years before. It has provided teaching materials that are so good, they obviate the need for teachers. All for free.

    1. I’ve experienced this myself recently. I play a sport called Touch Rugby, which is very popular in Australia and New Zealand, but far less popular in Europe. There’s a dearth of good coaches in Europe, but thanks to Youtube channels like this one I can study tactics from world class coaches from down under.

  2. TLDR: Youtube has done for physical/embodied skills what Wikipedia/early-internet blogs did for abstract and written skills. As long as you have enough desire (and time), you can learn anything you like on the internet.

  3. With this in mind: why are there so many online courses?

    People want other things besides the skill from the course. I call these things the Five Cs.

    1. Credentials — legible proof you actually learned the skill

    2. Curation — many people are willing to pay for the best materials so they don’t have to look for them themselves

    3. Community — many people learn best when discussing with coursemates, and making friends who hold them accountable.

    4. Charisma — People are willing to pay a premium for inspiration

    5. Commitment — The act of paying for something makes you more likely to follow through on it!

      I will write more about these some point soon.

  4. A great tutor is still better than doing it all yourself, even if you have desire and curiosity. As the mathematician Polya said, the first duty of the teacher is to know a little more than the student. The second duty is to suggest things to the student, so the idea may have occurred to her by herself. This is the main advantage of tutoring over purely exploratory learning — the tutor has a map of the idea-space, and can ask guiding questions to send you back on the path. Learning with a tutor is like traversing foreign country with a guide — over time you learn the well worn paths through the land. But exploratory learning is going off road. It takes much longer, and you reach plenty of dead ends and the occasional ravine. But eventually you end up with a much better understanding of the territory than you would get from your guide. And one day you may even become a guide yourself.

I’ll be writing more about traversing idea space without a map later.

If you have your own experience of self teaching on the internet I would love to hear about it!

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