A requirement for the study is that I blog weekly about our progress. If these topics interest you, I hope you will stay tuned and engage in conversation.

To get things going, I dipped a toe into computational finance. Since I have no background in this area, I googled it and discovered Peter Forsyth’s aptly titled Introduction to Computational Finance without Agonizing Pain. What I found there surprised me.

The first few chapters of Forsyth’s work involve the pricing of stock options. Stock options are agreements wherein the option owner has the option, not obligation, to sell a stock at a particular price at a future time. These can be valued by imagining them as part of a portfolio with the stock in question, and determining the price which would hedge out all the risk from the portfolio.

Since stock prices are dynamic, evaluating the price of a stock option requires quick adaptation to change. As a model for the changes in stock prices, Forsyth uses Brownian motion, in which a variable moves according to a combination of drift and noise. The accuracy of the estimation of a value of a stock option is going to depend on the accuracy of the estimated expected value of this random stock price.

How do you estimate the expected value of a stock price that is subject to a complex stochastic process, such as Brownian motion? Forsyth starts by recommending a Monte Carlo method. This involves running lots of randomized simulations based on the model of stock price fluctuation and averaging the result.

This is great, but there’s a catch: Monte Carlo methods are computationally expensive. Forsyth goes into detail warning about how to tune the parameters to account for the time it takes these Monte Carlo simulations to converge on a result. Basically, the more iterations of simulation, the more accurate the estimate will be.

This is a very promising early result for us, because it suggests a link between computational power and economic risk. Even when all the parameters of the model are known, deriving useful results from the model requires computation. So we can in principle derive a price of computation (or, at least, of iterations of Monte Carlo simulation) as a function of the risk aversion of the stock option trader.

Is that counter-intuitive? This would be consistent with some findings that high-frequency trading reduces market volatility. It also suggests a possible economic relationship between finance, insurance, and the cloud computing market.

One question I’d like to look into is to what extent computational power can be seen as a strategic advantage to adversaries–for example, in a stock trading situation–and what the limits of that power are. At some point, the effects of computation are limited by the amount of data one has to work with. But too much data without the computational means to process it is a waste.

See where this is going? I’m interested in hearing your thoughts.

Whatever else one may say about Roemer as a candidate, there is something wrong with this picture. Putting aside the other tools of the modern campaign (advertising, for example), the debate is the cornerstone of rational politics. In these events, we pretend for a moment that we are lead by those who are able to persuade us to follow them. This is only a fantasy when reasonable candidates are barred from entry.

Of course, politics is not a fair fight for our approval as citizens. Citizens are pawns. Or, perhaps more appropriately, ants ready to swarm to any greasy slick of propaganda spewed from the orifices of power. So must we be viewed by the billionaire Super PAC donors who have been investing in the Romney campaign, shareholders ready to instate their loyal CEO.

Is it going too far to say that these Romney shareholders aim to turn a profit on the presidency? We could consider the alternative: that these are philosopher-king oligarchs, who have spent their lives earning their billions through honest business only to turn their attention to national politics and endorse Mitt Romney. Out of selfless benevolence, they seek a consistent champion of middle and lower classes. Some of them think Gingrich would be a better one.

No, that seems unlikely.

If there is any iron law of politics, it is that those in power aim to keep themselves in power. Companies that succeed will try to maintain their market power, even when their products face obsolescence. Unions that triumph will shift demands from workers rights to the excluding the unorganized. Non-profits that form out of genuine selfless action contort themselves to chase funding and become whatever will justify their existence. Prison systems will fight to incarcerate more people. Political parties will try to maintain control of political messaging to keep out political diversity. And so on.

Truth erodes the grip of power. By recognizing these patterns as what they are, we can choose to deny them. We can liberate ourselves by holding institutions of power to account.

However, truth is something we transmit to one another. Truth travels as information. In our era, that means the spread of truth is controlled by mass media and information technology. But media and IT are themselves part of our economy and politics. Herein lies the problem.

SOPA is a good example of this. Media companies that want to use the power of the state to enforce monopolies on their works (Hollywood, the RIAA, etc.) are battling with Internet companies that profit from easy sharing of information across networked users (Google, Facebook, Twitter) over control of the Web. The media companies have been playing politics for much longer than the internet companies. One friend of mine explains to me that the Hollywood lobbyists are physically older than Google’s. They have been on K Street longer. They have better connections with legislators and other lobbyists. So they are winning.

Buddy Roemer is trying to expose this truth about how politics works–that policies are determined not by citizens but by lobbyists paid for by the rich and powerful. He has other politics but he has ripped this plank from his platform and sharpened it into a spear fit for the head of Mitt Romney.

But the media companies by and large control the spread of truth. These media companies are in their tangle of alliances with powerful political parties and corporations, they have no incentive to let in a candidate who is so eager to blow the lid off the whole complex. So they raise the requirements of debate eligibility to exclude anyone who isn’t playing their power games.

So Roemer has turned to non-mass media to launch his campaign. Roemer has been working hard on his Web campaign, using social media (especially Twitter) to get his message out.

Perhaps Roemer’s faith in this alternative structure is due in part to his witnessing of the Occupy movement. I believe it can be uncontroversially said at this point that social media was necessary (though not sufficient) for the successes of the Occupy movement, whether in organizing, gaining publicity, and in responding tactically to suppression. Its success in raising the issue of inequality in national politics has been due largely to its independence from centralized media. It continues to use the Internet to organize itself over the winter in order to plan its next moves for 2012. Perhaps Roemer can raise awareness about political inequality through similar channels.

It is worth watching and studying these events because the question of whether and under what conditions information technology can be liberation technology will determine our future. Is it possible for a message that is true but unpopular with power to spread? Under what conditions? This is not just a question of theoretical interest. It is a strategic question for those concerned with their own freedom.

We have many clues to this question already. We have the efficacy of the open Web, as opposed to centralized media channels, in assisting politics of truth. In SOPA, we see how the centralized hub of the Internet, its DNS system, is where it is most vulnerable to attack by powers that are threatened by it.

On the other hand, open data programs by governments show that there is also a politics of mutual empowerment through sharing information with citizens. Government transparency initiatives allow the kinds of analysis and awareness of money in politics that show us who is supporting SOPA and help us verify the claims of Buddy Roemer and the like. And SOPA has shown examples of industries that are able to gain power by benefiting openness and wage political battles to defend it.

What technologies are needed to further embolden truth? What strategies will get these technologies into the hands of those that can use them? How can truth be sifted from fiction, anyway? Can we find out before a growing concentration of power stamps out our ability to search and disseminate our answers?

I am eager to discuss these topics with anyone interested and collaborate on solutions.

When I brought him up, one of them told me that “Buddy Roemer is a joke”–as if there was nothing at all sensible about a former Congressman running as a government reform protest candidate after two years of Tea Party and Occupy press. I have to remind them that Buddy was once Louisiana’s Governor, not just a Congressman. One friend jokes, “Good people don’t become Governor of Louisiana.” I don’t really know what he’s talking about, but Buddy seems like good people to me.

I ask if he could be a third party spoiler. “No, that’s unrealistic. I mean the last time there was a third party spoiler was…” It gets him thinking. “Well, there was a minor spoiler effect with Nader in 200, but the last real spoiler was Perot in 1992.” That sounds like once a decade to me. We’re due.

Let’s play it out. Roemer is running as a Republican currently. He has a slim to nothing chance of winning the primary. Suppose he continues to run as an independent. Suppose he is allowed to debate nationally and get public attention.

Buddy is an old Southern white man who will spend his time at the debate telling Mitt Romney that he is fake and bought, which is the elephant in the room around Romney and the root of the flip-flopping that so pisses of his base. No wonder the GOP won’t let Buddy debate with them. But in a national debate, Buddy could easily steal elements of the Romney’s base in addition to swing voters.

If things are as dismal for Obama as some say (though at the moment he’s InTrading at 51%…) then Roemer on that ballot could be the spoiler he needs to pull things through. Obama, after all, ran on “Change” originally, and could have plenty to agree with Roemer about, but with the spin that it’s only the Republican party that is as influenced by money in politics.

At this point, I don’t see a stronger move for the center-left than backing Roemer and helping him get on the ballot.

Campaign finance reform is a hot political topic right now, but mostly only among the netroots and those that get their political news through the Internet. The Internet has allowed grassroots activists to get national attention despite the lack of coverage by traditional media through, for example, viral video. And the Internet has offered an alternative means of nominating a presidential candidate and allowing them to appear on the ballot.

If SOPA passes, the value of the Internet as a platform for political organizing will be greatly diminished. And the political influence of those industries who are fighting for SOPA will be secure.

Is it possible that SOPA is being pushed through Congress to deliberately destroy the Internet, in order to break the one platform that has potential to truly change politics?

Would Congress rather destroy the Internet than adapt to a new technology that makes a united and informed citizenry, politically represented by those that honor its rights and values, possible?

Would it smash the greatest engine of innovation the United States has ever seen in order to enshrine powers whose time has come and past?

Perhaps, SOPA is more than an assault on the Internet. Maybe it’s an assault on what’s left of democracy in our once great nation.

Twitter has begun to open source the software built by Whisper Systems, the enterprise mobile security startup it acquired just three weeks ago. …This move confirms the, well, whipsers that the Whisper Systems deal was mostly made for acqui-hire purposes.

Another acquisition like this that comes to mind is Etherpad, which Google bought (presumably to get the Etherpad team working on Wave) then open sourced. The logic of these acquisitions is that the talent is what matters, the IP is incidental or perhaps better served by an open community.

When I talk to actual or aspiring entrepreneurs, they often make the assumption that it would spoil their business to start building out their product open source. For one thing, they argue, there will be competitors who launch their own startups off of the open innovation. Then, they will miss their chance at a big exit because there will be no IP to tempt Facebook or whoever else to buy them out.

These open source acqui-hires defy these concerns. Demonstrating talent is part of what makes one acquirable. Logically, then, starting a competing company based on technology in which you don’t have talent makes you less competitive, from the perspective of a market exit. It’s hard to see what kind of competitive advantage the copycat company would have, really, since it doesn’t have the expertise in technology that comes from building it. If they do find some competitive advantage (perhaps they speak a foreign language and so are able to target a different market), then they are natural partners, not natural competitors.

One can take this argument further. Making open and available software is one of the best ways for a developer to make others aware of their talents and increase the demand (and value) for their own labor. So the talent in an open source company should be on average more valuable in case of an acqui-hire.

This doesn’t seem like a bad way out for a talented entrepreneur. Why, then, is this not a more well-known model for startups?

One reason is that the real winners in the startup scene are not the entrepreneurs. It’s the funders, and to the funders it is more worthwhile to invest in several different technologies with the small chance of selling one off big than to invest in the market value of their entrepreneurs. Because, after all, venture capitalists are in the same war for engineering talent as Google, Facebook, etc.. This should become less of an issue, however, as crowdfunding becomes more viable.

There’s a sense in which computing power is the limited resource for humanity these days.

We have the vast canon of recorded human thought available as digitized text. We have countless sensors, oceans of data, very accurate models of the fundamental mechanics of our universe. We we lack is the ability to synthesize that data and learn as much as we could from it.

This isn’t new; brains are an important source of computing power, and in fact a remarkably efficient one. But digital processing and memory have accelerated human thought to such a degree that we have outpaced ourselves.

It doesn’t help that so much of this precious resource is used against itself. The processing power that spammers use to spread new spam is pitted against the processing needed to identify and block it. We revere projects like reCAPTCHA because they harness that computing power that otherwise goes to waste for something good.

So, there is something heartwarming about see that my little lappy is running at full steam. It’s actualizing some potential. I hope I’m putting it to good use.

EDIT: Ironically, just an hour or so after I wrote this, my laptop shut down spontaneously and wouldn’t restart until I took the battery in and out. Maybe lappy couldn’t handle it after all. I’ll be doing more intensive computing on the cloud from now on.

The video speaks for itself, but I wanted to write about a particular point the letter makes:

Various searches related to UC Davis and pepper spraying were the *top searches on Google* in the US today — think of what that means.

this all happened on a day when virtually no news (except Demi and Ashton’s divorce or the 30 year old Natalie Wood death investigation) gets reported on mainstream outlets. This *all* happened online, and drew a huge national audience in the process, enough so to force a major university into damage control freakout.

Last week I attended a talk at Berkeley’s CITRIS center on Internet and Democracy, with EFF’S Jillian York and Evgeny Morozov, author of The Net Delusion. The speakers discussed the role of the internet as ‘liberation technology’ in countries overthrowing dictatorships. Morozov was skeptical about promoting the use of the web for these purposes without extensive regional expertise. He also noted that that many of these regimes import surveillance technology from the West. York agreed. But neither was able to speak much to the use of technology by the Occupy movement, and neither was able to address the actual mechanics of how the web helps (or not). Instead, both agreed that, yes, the Internet is a factor, but people on the ground and organizing in person were also very important.

There must be a more satisfying answer than this. Thankfully, the Occupy provides a great case study in the role of technology in movement building. Conditions in the U.S. are obviously different from those in the Arab Spring. There is relatively little fear of censorship on the web, free speech is well protected (within limits–see below), and Internet access and use is very high. So what we’d expect is for the impact of web technology on movement building to be stronger in the U.S. than in, say, the Middle East or Belarus.

What the anonymous letter writer points out is that the mass action required “to force a major university into damage control freakout” could happen almost overnight and even when the events in question are under-served by the mass media. It’s not clear whether the web activity encourages the movement on the ground or the other way around. Or rather, I don’t think there’s any question that they two activities feed off each other. But the real upshot is that combined, they simply make damage control impossible. You can’t hide the fact that you are beating kids up in the U.S. Full stop.

This is all possible because we have such great freedom of speech in this country. The irony is that what’s getting so much attention is the repression of free speech. In the U.S., it’s OK to complain on the Internet. It’s not yet OK to “encamp” as a symbolic political act. Encampment gets you pepper sprayed in the mouth.

This isn’t a contradiction, so much as a demonstration of why free speech is valuable and how it is won. Our ability to publish videos and articles freely on-line and use social media to express dissent is allowing the activity at the frontier of free speech to gain resonance. My colleague Kartik Date explain today that the effect of the encampments, met by violence, is to force the viewer to make a decision. Do you support the students, or do you support the forces breaking them? The health and safety technicalities of pitching a tent in a park become insignificant if people are hospitalized with broken ribs.

So what is the technology doing? It’s increasing the velocity of information from the events that demand that we make a decision to the people looking on. Exposure to edge cases makes us, as onlookers, realize that world does not divide into the categories that we expect. It forces the boundary of right and wrong to curve and swell.

This is why it would not be enough for the Occupy movement to limit itself to innocuous speech like blog posts or op-eds. If it did, it wouldn’t really ‘speak’ to the national audience at all, because its statements would be lost in the steady drone of information we filter out. Yes, there are radicals who think corporations are at fault. Yes, there are radicals who think the government is at fault. So what? This news changes nothing for me.

But when I hear the stories about how students are being hospitalized and demonstrating their peaceful commitment in response, I can’t remain neutral. I am now a supporter. And all because of content shared very rapidly through the web. Multiply this effect, and its clear how liberation technology can work to expand a movement.

The author explains the appeal of this metric here, arguing that since updating a site is more effortful than using a Twitter hashtag, it is a better indicator of involvement.

While it’s definitely worth making the distinction of between on-line buzz and meat activity, using just one web site as an indicator seemed shady to me. Who knows what could be influencing that Tumblr? Maybe it’s just the site that’s lost steam, since by now anybody who is likely to look at it probably (a) has already and (b) gets the point.

What about using a more aggregate measure of how much people care about the Occupy movement? Here’s an easy one to grab: the number of Google searches for ‘occupy’.

You can see spikes corresponding to some major Occupy events:

• October 15th, the peak, was Occupy’s Global Day of Action
• October 27th, another high, came right after an Oakland occupier got brained by a police tear gas canister.
• November 3rd was Oakland’s Occupy-induced general strike
• The last little bump on November 10th corresponds to the Colbert coverage of the police brutality on Berkeley’s campus

Yes, searches are in decline. But the numbers suggest that as long as protesters can keep things eventful–by causing an economic ruckus or getting beat up–they will stay on the public radar.

Google recently ‘redesigned’ Google Reader in a way that blatantly forced Reader users to adopt Google+ as their social media platform. A lot of Reader devotees are pissed about this. They want their old technology back.

My first response to this is: What did you expect? What made Reader so special? It was just the first of several experiments in social media that Google’s used to edge into the Facebook’s market. (Reader, Buzz, Wave, now Google+). Of course, the industry logic is that your community should be dumped onto the newer platform, so that Google can capture the network effects of your participation. Your community is what will make their new technology so valuable to them!

Still not happy?

The problem is that Google Reader was a corporately operated platform, not a community operated one. You may not have know that you had other options. There are a lot of social media communities that have a lot of self-control, Metafilter being a particularly great one. (incidentally, Ask Metafilter has a good guide to Reader alternatives) There is also a lot of energy going into open source social media tools.

The most prominent of these is Diaspora, which raised a ridiculous amount of funding on Kickstarter when the New York Times wrote about its being a project. I stopped following it after the first press buzz, but maybe it’s time to start paying attention to it again. Since its community has recently announced that it is not vaporware, I decided to go ahead and join the diasp.org pod.

To my surprise, it’s pretty great! Smooth, intuitive interface, fast enough, seems to have all the bells and whistles you’d want and not a lot of cruft–basically all the stuff I care about on Google+. I’ve got a public profile. Plus, it has great tools for data export in case I want to pick up and move to a different pod.

Looking into it, Diaspora does not yet work as an RSS reader, though there is an open issue for it. A bit of a missed opportunity, IMO. Some other people are build an open-source Reader clone in response, which could more directly solve the Reader problem. Whatever the current technical limitations, though, they can be surmounted by some creative piping between services.

The point that I hope stands is that there is a hidden cost to a community investing in a technical infrastructure when it is being maintained by those that do not value your community. People’s anger at the Reader redesign demonstrates the value of the open source alternatives.