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	<title>Tim Howgego &#187; Future</title>
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		<title>Scottish Tram Financing</title>
		<link>http://timhowgego.com/scottish-tram-financing.html</link>
		<comments>http://timhowgego.com/scottish-tram-financing.html#comments</comments>
		<pubDate>Tue, 30 Aug 2011 14:24:01 +0000</pubDate>
		<dc:creator>Tim Howgego</dc:creator>
				<category><![CDATA[Analysis]]></category>
		<category><![CDATA[Edinburgh]]></category>
		<category><![CDATA[Future]]></category>
		<category><![CDATA[Public Transport]]></category>
		<category><![CDATA[Rail]]></category>
		<category><![CDATA[Risk]]></category>
		<category><![CDATA[Transport]]></category>

		<guid isPermaLink="false">http://timhowgego.com/?p=369</guid>
		<description><![CDATA[Some Edinburgh City councillors already privately refer to the city&#8217;s tram project as the problem that &#8220;cannot be named&#8221;. Much as actors refer to Shakespeare&#8217;s tragedy as &#8220;the Scottish play&#8221;, superstitions of bad luck now bedevil the production. A dramatic shift from the optimism that initially characterised the development of the Edinburgh tram, towards pessimism. [...]]]></description>
			<content:encoded><![CDATA[<p><img src="http://timhowgego.com/files/edinburgh_tram_transforming.jpg" width="600" height="333" alt="Transforming Travel... or not. Edinburgh Tram's optimistic route plan." title="Transforming Travel... or not. Edinburgh Tram's optimistic route plan." class="border" /> </p>
<p>Some Edinburgh City councillors already privately refer to the city&#8217;s tram project as the problem that &#8220;cannot be named&#8221;. Much as actors refer to <a href="http://en.wikipedia.org/wiki/Macbeth" title="External link: Wikipedia - Macbeth.">Shakespeare&#8217;s tragedy</a> as &#8220;the Scottish play&#8221;, superstitions of bad luck now bedevil the production. A dramatic shift from the <a href="http://timhowgego.com/optimism.html" title="Optimism.">optimism</a> that initially characterised the development of the Edinburgh tram, towards pessimism.</p>
<p>That which cannot be named is no longer just the failure of a flagship local transport policy. The issue has engulfed the City of Edinburgh Council, and now risks destroying local politics completely: Not only <a href="http://edinburghnews.scotsman.com/edinburghtransportplans/Dawe-admits-Lib-Dems-may.6826248.jp" title="External link: Edinburgh Evening News - Dawe admits Lib Dems may quit over tram line failure.">the existing administration</a>, but public trust in local government decision-making.</p>
<p>Political heavy-weights, who normally shy away from the minutiae of local governance, are now offering parental guidance in public: Alistair Darling (local Member of Parliament, and former United Kingdom Chancellor and Secretary of State for Transport) described the option to borrow £231 million ($370 million) to complete the city centre section of the tram line as &#8220;<a href="http://edinburghnews.scotsman.com/edinburghtransportplans/Darling-brands-tram-borrowing-39madness39.6824238.jp" title="External link: Edinburgh Evening News - Darling brands tram borrowing 'madness'.">absolute madness</a>&#8221; &#8211; the local population would be saddled with vast debts. Days later, Graham Birse (chief executive of the influential Edinburgh Chamber of Commerce) called the decision to <em>not</em> complete the city centre section, &#8220;bonkers&#8221; &#8211; far fewer passengers would use a tram that did not serve the city centre adequately. Even Alex Salmond (Scotland&#8217;s First Minister) has become directly embroiled, <a href="http://www.bbc.co.uk/news/uk-scotland-edinburgh-east-fife-14691885" title="External link: BBC News - Edinburgh trams inquiry 'on hold for now'.">struggling to contain calls for an immediate public inquiry</a> to identify who is responsible.</p>
<p>Burn the witches! This Scottish tragedy is rapidly descending into farce. That would be unfortunate, because this particular <em>local difficulty</em> goes to the heart of the Scottish nationalist agenda: A desire for greater devolution of public funds to local level. More localised independent entities have fewer financial resources, so are less able to manage expensive, risky projects. Consequently policy ambitions also need to be scaled back. Such scale isn&#8217;t necessarily a problem &#8211; small can be beautiful. The problem lies in pretending to be big, when not.</p>
<p>This article introduces the concept of risk in tram (and similarly large public transportation and infrastructure) projects, chronicles the decisions that lead a relatively small local authority to need to find hundreds of millions of pounds to support a single project, and explores the implications for future policy-making, especially in the context of a more devolved Scotland. <span id="more-369"></span>On this page:</p>
<ul>
<li><a href="#uncertainty" title="Jump to section: Tram Cost Uncertainty.">Tram Cost Uncertainty</a></li>
<li><a href="#devolution" title="Jump to section: Devolution of Chaos.">Devolution of Chaos</a></li>
<li><a href="#scaling" title="Jump to section: Scaling Ambition.">Scaling Ambition</a></li>
<li><a href="#history" title="Jump to section: Appendix: Policy History of Edinburgh Trams.">Appendix: Policy History of Edinburgh Trams</a></li>
</ul>
<h3 id="uncertainty">Tram Cost Uncertainty</h3>
<p>I have <a href="http://timhowgego.com/optimism.html" title="Optimism.">previously discussed</a> why estimations of the cost of large transportation infrastructure projects (especially light rail) are both inherently inaccurate, and tend towards optimism. Edinburgh Trams transpire to be an extreme example: From £375 million estimated for the original 3-line network, via £545 million for a more pragmatic 2-line network, to <a href="http://edinburghnews.scotsman.com/edinburghtransportplans/Tram-funding-plans-to-push.6821447.jp" title="External link: Edinburgh Evening News - Tram funding plans to push cost of building line to £1bn.">over £1 billion</a> for today&#8217;s single line (which is still far from completion).</p>
<p>However, this uncertainty was somewhat predictable: The graph below is taken from Bent Flyvbjerg&#8217;s 2004 <a href="http://www.hm-treasury.gov.uk/green_book_guidance_optimism_bias.htm" title="External link: HM Treasury - Optimism Bias.">Procedures for Dealing with Optimism Bias in Transport Planning</a>, guidance issued to central government alongside <abbr title="Her Majesty's">HM</abbr> Treasury&#8217;s Green Book. It shows the probability that the cost of rail projects (including trams) will exceed the estimated budget.</p>
<h4>Distribution of Rail Cost Overruns (Bent Flyvbjerg, 2004)</h4>
<p><img src="http://timhowgego.com/files/rail_cost_overrun.jpg" width="600" height="292" alt="Probability of that the cost of rail projects (including trams) will exceed the estimated budget. Bent Flyvbjerg, 2004." title="Probability of that the cost of rail projects (including trams) will exceed the estimated budget. Bent Flyvbjerg, 2004. S-curve with a fifth of projects with no overspend, 80% overspend for the worst-performing projects, and 40% overspend average." /> </p>
<p>(Data is based on analysis of 46 rail projects from across Europe and North America &#8211; <abbr title="United Kingdom">UK</abbr> has few recent rail schemes, however comparison of road schemes suggests patterns are very similar for all regions.)</p>
<p>The average cost overrun is about 40%. In the planning/appraisal process 40% is literally added to the estimated cost of a project as &#8220;optimism bias&#8221;. Optimism bias is part of <a href="http://www.transportscotland.gov.uk/stag/home" title="External link: Transport for Scotland - Scottish Transport Appraisal Guidance.">Scottish Transport Appraisal Guidance</a>, to which the Edinburgh Tram was subjected, although the original tram analysis pre-dates formalised optimism bias.</p>
<p>The 40% value should protect the <abbr title="United Kingdom">UK</abbr> treasury:</p>
<ul>
<li>Over many separate projects, cost overruns will average to zero. Broadly, in the long-term, the treasury will remain balanced, without requiring individual projects to be micro-managed from the top of government.</li>
<li>Individual project costs are in the hundreds of millions (£). These are still a tiny proportion of <abbr title="United Kingdom">UK</abbr> Gross Domestic Product, taxes collected, or ability for the UK government to take loans. The national economy will not be thrown into a crisis if one specific project goes badly wrong.</li>
</ul>
<p>Unfortunately, merely adding 40% adds a sense of certainty to an individual project which remains uncertain. For the immediate funders of a project, the important question is, <strong>can we fund a cost overrun of 80%?</strong> For the City of Edinburgh Council, the answer to that question was effectively, &#8220;we cannot&#8221;.</p>
<p>A quick glance at the <a href="http://www.edinburgh.gov.uk/info/695/council_information_performance_and_statistics/873/key_facts_and_figures/2" title="External link: City of Edinburgh Council - Council income and spending.">council&#8217;s budget</a> puts the tram in perspective: The council&#8217;s total annual capital budget (for investment in <em>everything</em>) is only £235 million, less than a quarter of the capital cost of <em>one</em> tram line. Typically transport accounts for 20% of <a href="http://www.hm-treasury.gov.uk/pespub_economic_functional_analysis.htm" title="External link: HM Treasury - Economic and Functional Analysis (chapter 6, table 7.4).">local government capital expenditure</a>, so we might expect a local authority like Edinburgh to be investing around £50 million each year in transport projects. Placing over 10 or 20 years worth of investment into <em>just one</em> project suggests a tram scheme was far too ambitious to ever be a local government responsibility.</p>
<p>Not only do councillors appear to be losing a high-stakes casino game, but they seem to be playing with all theirs chips on the table.</p>
<p>However, the tragedy is not so simple, because while the City of Edinburgh Council are responsible for the tram project, they are not the only funder:</p>
<h3 id="devolution">Devolution of Chaos</h3>
<p>Conventionally in Britain, higher tiers of government act as financial guarantors for low tiers. A local authority has statutory (in law) responsibilities, and hence cannot &#8220;go bankrupt&#8221;, however badly it manages its budget. This hierarchical structure is not accidental: It is rooted in currency (money itself), for which central government is solely responsible. In practice central government imposes strict financial controls on local government, which limit the scope for mis-management. Historically important cities, such as Edinburgh, also tend to own a lot of local assets (like property), which can be sold in a crisis.</p>
<p>1990s Scottish devolution did not devolve money, it just altered the hierarchy slightly, with an extra decision-making tier (the Scottish Parliament and their civil service, the Scottish Executive) in between Edinburgh&#8217;s council and the United Kingdom&#8217;s central government.</p>
<p>In addition to keeping a <em>watchful</em> eye on how the council manages its budgets, the Scottish Parliament is part-funding the Edinburgh Tram &#8211; providing extra money beyond normal budgets or spending approvals. The Scottish Parliament&#8217;s contribution (currently via Transport Scotland) is <em>limited to</em> <a href="http://www.audit-scotland.gov.uk/docs/central/2010/nr_110202_trams.pdf" title="External link: Audit Scotland - Edinburgh trams - Interim Report, February 2011.">£500 million</a> [<abbr title="Portable Document Format">PDF</abbr>]. And herein lies the problem: When that funding package was agreed, the local council&#8217;s contribution was the remainder, just £45 million, a value broadly attainable by the local authority. But since Scotland&#8217;s contribution is fixed, every time the estimated price rises, the City of Edinburgh Council&#8217;s contribution rises out of proportion: Without other sources of funding, a doubling of project cost to £1 billion is actually a ten-folded increase in the cost to the council&#8230;</p>
<p>By attempting limit the Scottish Parliament&#8217;s exposure to the tram project, all the risk has been transferred down the hierarchy, towards the tier of government least able to raise large amounts of cash in a crisis.</p>
<p>Brinkmanship of the worst kind? In the interim, the council&#8217;s response is to control escalating costs by reducing the length of the route to be completed, with apparent disregard for whether the resulting tram track connects places large numbers of passengers might want to travel between. Underpinning their decision appears to be one of the worst assumptions of &#8220;modern&#8221; accountancy: That the asset value of a (tram) service is defined by the cost of constructing the infrastructure on which that service operates. Strategically, the <em>value</em> of the (tram) service to the city of Edinburgh is linked to the number of passengers that use it. Cynically, to the number that <em>see</em> it. Even commercial assets that are technically transferable (like land and tram vehicles) tend to sell for a lot less than they were bought. Scottish government&#8217;s reaction to the council&#8217;s decision was to withhold part of Scotland&#8217;s funding contribution, effectively forcing the council to reach a <em>different decision</em> [the following Friday, 2 September, the city centre section was added again].</p>
<p class="box">With Scottish national government substantially funding the Edinburgh tram, and the project appearing too risky for local government, perhaps the Scottish level of government should have conceived and manage the project from the outset? The appendix at the bottom, <a href="#history" title="Jump to section: Appendix: Policy History of Edinburgh Trams.">Policy History of Edinburgh Trams</a>, will help explain.</p>
<h4>Haymarket Tram Terminus? Existing bus to Edinburgh Airport, with new tram station &#8220;under construction&#8221; on the left (August 2011)</h4>
<p><img src="http://timhowgego.com/files/haymarket_tram_airlink.jpg" width="600" height="450" alt="Existing Airlink bus to Edinburgh Airport (left), with tram station under construction (right)." title="Existing Airlink bus to Edinburgh Airport (left), with tram station under construction (right)." class="border" /> </p>
<h3 id="scaling">Scaling Ambition</h3>
<p>Broadly, there are 2 viable methods of containing risks on the scale of the Edinburgh tram:</p>
<ul>
<li>As a Scotland-level public project: Even £1 billion is only around 1% of Scotland&#8217;s Gross Domestic Product, a magnitude of (over-) spending that should be manageable by a truly devolved Scottish government. The Scottish Parliament has subsequently established an organisation (theoretically) capable of managing transport projects at this level, <a href="http://www.transportscotland.gov.uk/" title="External link: Transport Scotland.">Transport Scotland</a>.</li>
<li>As a primarily private project: Most modern tram systems built in England transferred risk to the private sector (rather than Edinburgh&#8217;s model of merely contracting private sector suppliers). Scotland&#8217;s past record on private sector transport projects is poor (<a href="http://timhowgego.com/optimism.html" title="Optimism.">most obviously on the Skye Bridge</a>), because policy changes too fast.</li>
</ul>
<p>Unfortunately neither of these methods complement good local public governance: Decision-making and responsibility becomes remote from local politicians. Ultimately, this would dilute the role of local authorities: Logically to organisations that deliver (statutory) local services and act as &#8220;community council&#8221; talking shops, with no ability to actively shape or invest in the long-term future of their own areas.</p>
<p>That may be where Scotland is heading: Far greater centralisation of powers at Holyrood (the Scottish Parliament), drawn simultaneously from both Westminster (<abbr title="United Kingdom">UK</abbr> government) and Scottish local authorities. Such a structure might even work, and would address one of the major post-devolution issues &#8211; &#8220;too much democracy&#8221;.</p>
<p>However, the most important lesson of the Edinburgh tram is not that such projects should be managed more centrally. Rather, that <strong>capital investments should be scaled to match the scale of the government trying to deliver them</strong>: The tram&#8217;s fundamental failing is that it is too expensive (and consequently risky) a mode for a local public transport project. If an inherently local policy can only be enacted by a non-local government, then (I argue) it is the wrong policy. Local policy ambitions need to be scaled down to what is <em>reliably achievable</em> at local level.</p>
<p>The issue will become critical for a future Scottish government with financial independence from the rest of the United Kingdom (a distinct possibility, given the current dominance of the Scottish National Party). Scotland represents approximately 10% of the <abbr title="United Kingdom">UK</abbr> population and economy. This implies that a truly independent Scottish government could only safely manage 1/10 the amount of risk that the UK government is capable of managing. Meaning, the most ambitious project an independent Scotland could achieve would be 90% less ambitious than a UK-backed project.</p>
<p>Scotland&#8217;s current transport projects are still reasonably modest, like reopening short sections of old railway line. But it is easy to imagine the Scottish Parliament&#8217;s ever-increasing ambition proposing grandiose projects that the UK might contemplate, but which <em>could bankrupt</em> Scotland &#8211; like a <a href="http://timhowgego.com/railways-for-prosperity.html" title="Railways for Prosperity.">new high speed rail network</a>: A core route serving Scotland&#8217;s largest 5 or 6 cities, with an under-sea tunnel to Lerwick in phase 2&#8230;</p>
<p>The challenge for Scotland is not to pretend to be big, to still be part of the British Empire, or a modern-day China. Quite the opposite: To deliver the same (or better) policy impact, while the maximum cost of individual projects is limited to a tenth what the population has learnt to expect. Overall expenditure would not be reduced &#8211; there would simply be far more, smaller, projects. Fortunately, there&#8217;s a lot more <a href="http://timhowgego.com/scaling-the-bus-stop.html" title="Scaling the Bus Stop - A New Approach to Park and Ride.">scope to improve the humble bus stop</a> than you might think!</p>
<p>I suspect Scotland&#8217;s history already contains the best example of what can happen when a nation stops pretending to be big, and instead focuses on itself: The original Acts of Union (with England) removed colonial and military <em>distractions</em>, allowing Scotland to develop domestically as an intellectual and commercial 18th century power-house.</p>
<p>The management of chaos (of which financial risk is a part), may become one of the great challenges for structured 21st century government, regardless of size. Paradoxically, the easiest way to manage chaos is not to have to: To foster a system where no one part is too important to fail.</p>
<h3 id="history">Appendix: Policy History of Edinburgh Trams</h3>
<p>The idea for the Edinburgh tram was originally developed by the Scottish Office (the pre-devolution civil service responsible for administering Scotland), as part of a package of transport measures for south-east Scotland, to be funded by road pricing (tolls on car journeys within Edinburgh).  </p>
<p>3 conditions made Edinburgh a perfect target for such ambitious transport policy initiatives:</p>
<ol>
<li>Transport was (is) a constant source of annoyance for many city residents &#8211; a &#8220;political hot topic&#8221;.</li>
<li>Edinburgh&#8217;s geography &#8211; densely populated, but hilly &#8211; historically lead to above-average local public transport use, with bus travel remaining socially acceptable among Edinburgh&#8217;s &#8220;middle classes&#8221;.</li>
<li>Minimal democratic interference (the Thatcher/Major governments contained almost no Scottish Members of Parliament) allowed Scotland&#8217;s civil servants to focus.</li>
</ol>
<p>The first Blairite UK government (1994) heralded both devolution in Scotland, and a shift in transport policy towards public transport. That combination should have been perfect for Edinburgh, except that the Scottish Executive (the devolved <em>equivalent</em> of the Scottish Office) became considerably more focused on <em>managing opinions</em>. Which in transport, has a tendency to result in nothing&#8230;</p>
<p>Instead, policy momentum was picked up by the recently liberated (from Lothian Regional Council during local government reorganisation) City of Edinburgh Council: Local ambition steadily grew, from &#8220;Greenways&#8221; (networks of bus lanes) in the early 1990s, through guided busways and radical parking policies, to strategies based around trams and road charging.</p>
<p>Charging proved too radical: Scottish government compelled Edinburgh to hold a referendum &#8211; but only on road pricing, not the trams that pricing had originally been intended to fund. Edinburgh&#8217;s population naturally rejected road pricing in isolation &#8211; Turkeys don&#8217;t vote for Christmas &#8211; and the tram project proceeded with traditional forms of funding.</p>
<p>In spite of (initially) primarily being funded by Scotland, the trams were local in scope (with no tangible benefit to anyone outside Edinburgh), and hence construction was &#8220;managed&#8221; by the council. This was done through Transport Initiatives Edinburgh, a council-owned company established to deliver Edinburgh&#8217;s light rail scheme &#8211; something which it has since struggled to achieve.</p>
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		<title>Difference and the Same</title>
		<link>http://timhowgego.com/difference-and-the-same.html</link>
		<comments>http://timhowgego.com/difference-and-the-same.html#comments</comments>
		<pubDate>Sat, 17 Apr 2010 13:57:00 +0000</pubDate>
		<dc:creator>Tim Howgego</dc:creator>
				<category><![CDATA[Future]]></category>
		<category><![CDATA[Philosophy]]></category>
		<category><![CDATA[Psychology]]></category>
		<category><![CDATA[Society]]></category>
		<category><![CDATA[Thoughts]]></category>

		<guid isPermaLink="false">http://timhowgego.com/?p=259</guid>
		<description><![CDATA[&#8216;Blogosphere luminary, Larísa, thinks I&#8217;m smart. In capitals, because the word itself evidently lacks sufficient emphasis. Her implication, that this is a good thing. Yet it&#8217;s driving me mad. This article tries to explain why. It defines aspects of intelligence as difference from average, and then quantifies this as degrees of shared reality. The article [...]]]></description>
			<content:encoded><![CDATA[<p>&#8216;Blogosphere luminary, Larísa, <a href="http://www.pinkpigtailinn.com/2010/02/picture-of-day.html" title="External link: Pink Pigtail Inn - The Picture of the Day.">thinks I&#8217;m smart</a>. In capitals, because the word itself evidently lacks sufficient emphasis. Her implication, that this is a good thing.</p>
<p>Yet it&#8217;s driving me mad.</p>
<p>This article tries to explain why. It defines aspects of intelligence as <em>difference</em> from average, and then quantifies this as degrees of shared reality. The article provides a model where genius and stupidity are almost identical, where the closer someone is to the join, the closer they come to insanity &#8211; the &#8220;reality of one&#8221;.</p>
<p>It explains why wider human society continues to believe extremes of intelligence can be a positive attribute, in spite of the social disconnection associated with this. The article shows how perception-based, consumerist social structures have built reward structures upon this delusion. The nature of illusion is then considered, with particular reference to aesthetics, and the role of empathy in maintaining illusion among humans.</p>
<p>The article lastly introduces the concept of social gravity &#8211; the tendency of humans to <em>the same</em> &#8211; and then challenges the idea that everyone should be dragged back towards that single point of gravity: Rather, by maintaining multiple illusions, a social structure emerges where multiple extremes of <em>difference</em> can be maintained, while still averaging to <em>the same</em>.</p>
<p>Like some of my more abstract writing, this isn&#8217;t terribly well researched. Equally, the topic so broad, it isn&#8217;t practical to consider every counter-argument or divergence of thought within the text, and still maintain some form of readability. It may be helpful to first read <a href="http://timhowgego.com/science-of-mind-constraining-matter.html" title="Michael Gazzaniga on the Science of Mind Constraining Matter.">Michael Gazzaniga&#8217;s Science of Mind Constraining Matter</a>, which provides the rationale for some of the statements made in this article. <span id="more-259"></span>On this page:</p>
<ul>
<li><a href="#smarts" title="Jump to section: Smarts.">Smarts</a></li>
<li><a href="#disconnection" title="Jump to section: Disconnection.">Disconnection</a></li>
<li><a href="#evolution" title="Jump to section: Evolution.">Evolution</a></li>
<li><a href="#perception" title="Jump to section: Perception.">Perception</a></li>
<li><a href="#illusion" title="Jump to section: Illusion.">Illusion</a></li>
<li><a href="#empathy" title="Jump to section: Empathy.">Empathy</a></li>
<li><a href="#gravity" title="Jump to section: Gravity.">Gravity</a></li>
<li><a href="#chaos" title="Jump to section: Chaos.">Chaos</a></li>
</ul>
<h3 id="smarts">Smarts</h3>
<p>Smart means applicable intelligence. Ingenuity. Where <a href="http://en.wikipedia.org/wiki/Intelligence" title="External link: Wikipedia - Intelligence.">intelligence</a> is an ability to understand and organise information. Smart uses that intelligence to adapt to the environment around us. Popular perceptions of intelligence tend to reflect <em>simplistic</em> analysis like &#8220;IQ&#8221; tests. The higher the number, the further along the <a href="http://en.wikipedia.org/wiki/The_Bell_Curve" title="External link: Wikipedia - The Bell Curve.">The Bell Curve</a>, the more likely you are to be <em>living the American Dream</em>. It&#8217;s a necessarily simple illusion.</p>
<p>Unfortunately, intelligence transpires to be multifaceted. Elements like speed, perception, and memory can all vary. The concept underpins a lot of cognitive psychology, although the ideas of people like <a href="http://www.howardgardner.com/" title="External link: Howard Gardner, Professor of Cognition and Education, Harvard Graduate School of Education.">Howard Gardner</a> remain far from mainstream Western education.</p>
<p>Someone with strong perceptual reasoning and slow cognitive ability, might demonstrate &#8220;genius&#8221; when writing a book, yet is a &#8220;dunce&#8221; in school tests. Simultaneously both intelligent and stupid. On average, they are average. But in truth, the only thing they are is <em>difference</em> (<abbr title="As written">sic</abbr>). Anything but average.</p>
<p>Latin implies genius comes, literally, from birth. Its modern-day usage tends to indicate exceptional intelligence or ability.</p>
<p>Ingenuity is arguably a subset of genius: Applied genius. A curious concept, as <a href="http://plato.stanford.edu/entries/schopenhauer/" title="External link: SEP - Arthur Schopenhauer.">Arthur Schopenhauer</a> hints in the distinction, &#8220;talent hits a target no one else can hit, genius hits a target no one else can see.&#8221; If no one else can see it, how applicable is it? Fortunately there are sufficient overlaps between peoples&#8217; abilities for the ideas created by &#8220;genius&#8221; to make the lives of others <em>better</em>.</p>
<p>Genius itself is an inherently lonely place, since, almost by definition, there is nobody quite like <em>you</em>.</p>
<p>Consider <a href="http://en.wikipedia.org/wiki/Grigori_Perelman" title="External link: Wikipedia - Grigori Perelman.">Grigori Perelman</a>, the Russian mathematician who solved the Poincaré conjecture. In effect, defining what shapes are possible in 3-dimensional space. He&#8217;s since become almost as famous as a recluse, as for his proof. Not wanting money, &#8220;success&#8221;, people to be interested in him, or, it seems, <a href="http://news.bbc.co.uk/1/hi/world/europe/8585407.stm" title="External link: BBC News - Russian maths genius Perelman urged to take $1m prize.">anything else</a> that mainstream society expects that he <em>should want</em>.</p>
<p>This doesn&#8217;t just exemplify extremes of &#8220;difference&#8221; away from the social norms (in all directions). Perelman has become famous for not wanting to be famous. And that circular outcome is far more indicative of the underlying pattern:</p>
<h3 id="disconnection">Disconnection</h3>
<p>David Hume is attributed with the observation that society perceives genius and ignorance the same. Both types of people are merely disconnected from <em>everyone else</em>. This disconnection is key understanding what at first seems nonsense: That <em>absolute</em> genius and <em>absolute</em> stupidity can be precisely the same <em>thing</em>.</p>
<p>Using a &#8220;flat earth&#8221; logic, genius and stupidity are at opposite ends of the same &#8220;line&#8221;, with most people tending towards the mid-point of the line. Most observers can see neither &#8220;end&#8221; of the line, but logically deduce that those ends will never meet. Yet the earth transpires to be round: If you travel east, you will eventually reach the same destination as if you travel west. So, instead consider &#8220;Intelligence&#8221; as a spherical object. Skewed and multi-dimensional, so rather more difficult to visualise than the earth. But definitely joined up at each <em>end</em>.</p>
<p>I will quantify intelligence in terms of &#8220;reality&#8221;. Specifically the degree to which a reality is shared by people. The fewer people share a reality, the more disconnected they are from mainstream society.</p>
<p>This assumption stems from the observation that the only apparent agreement in philosophical thought is that <em>we</em> don&#8217;t agree. We are what defines what is. In my corruption of Biblical creation, Adam and Eve validate the reality of each other. In effect, create one another. (And for the curious &#8211; the notion of &#8220;God&#8221; would only emerge to temporarily resolve the patterns they cannot collectively understand &#8211; like, why are we standing in this garden?) The interchangeable use of the words &#8220;reality&#8221; and &#8220;intelligence&#8221; stems from the idea of reality as what can be understood, rather than what is. Those states differ because <em>what is</em> is merely a set of possibilities, which can be understood by different people in different ways, largely depending on their capacity to understand and organize information. That is, their intelligence.</p>
<p><img src="http://timhowgego.com/files/reality_circle.png" width="379" height="344" alt="Reality Circle."  style="float: right; margin: 0 0 7px 7px;" /></p>
<p>Assume a simplistic (IQ-style) model of intelligence, where people tend towards the average. The greatest amount of shared reality occurs at this average, because of the tendency towards average among the population. The further away from the average, the more likely you are to be embracing elements of reality that aren&#8217;t so widely shared.</p>
<p>This is why it is desirable to be average, not <em>difference</em>: &#8220;The same&#8221; grants the richest sense of shared reality, and, logically, for a social animal, the most fulfilling life.</p>
<p>As one approaches the <em>extremes</em> of genius/stupidity, one approaches a &#8220;reality of one&#8221;. A unique understanding. A <em>reality</em> not shared with anyone else.</p>
<p>Of course, by (my) definition, you can&#8217;t have a reality in which just one person agrees with it. This would be pure madness.</p>
<p>Indeed, as we approach a reality of one, we progressively lose sanity. Lose context. Every step forward requires an ever-more complex set of checks that the world <em>behind</em> is still there. Patterns of thought becomes less and less certain. Without a structure to constrain thought, eventually one&#8217;s head explodes: Overwhelmed by doubt about the things that <em>everyone else</em> subconsciously knows to be.</p>
<p>This is what drives me mad.</p>
<p>I appear to have contradicted myself: A reality of one is not obtainable, so how can it be the ultimate destination for anything? Surely this unattainability implies that intelligence <em>is not</em> spherical? That there is no point at which genius meets stupidity?</p>
<h3 id="evolution">Evolution</h3>
<p>Human evolutionary advantage seems predicated on adaptability. Specifically the plasticity of a human&#8217;s brain, compared to other animals. Brain size transpires to be something of a myth: Human brains are evolving to be smaller, because a smaller size makes it easier for information to transfer around the brain. So human evolution allows progressively more complex pattern to be solved, and associated realities to be explored, and ultimately shared.</p>
<p>This means the system is not in equilibrium &#8211; even the simplistic notion of &#8220;average intelligence&#8221; is constantly changing. And absolute extremes of intelligence are altogether less absolute than the simple circle implies.</p>
<p>It also explain why, at a basic evolutionary level, above-average intelligence is considered preferable to average (or below) intelligence: Not only does the <a href="http://en.wikipedia.org/wiki/Baldwin_effect" title="External link: Wikipedia - Baldwin effect.">Baldwin effect</a> favour those who can learn new skills; but by later life, the typical intelligence level of humanity as a whole will have improved, so someone that is slightly above-average at birth is much more average in later life.</p>
<p>But here lies the root of the confusion:</p>
<ul>
<li>Near-average intelligence parallels the most basic form of learning: Social learning. The ability to copy other humans, rather than learning by experimentation. Remember, these are the people that have the strongest social connections.</li>
<li>In contrast, significant <em>difference</em> parallels learning by trial and error. A far more frustrating, inefficient learning process, invariably achieved by doing what (most) others are not. Yet a process that <em>someone</em> has to do to move humanity forward.</li>
</ul>
<p>So, the near-averages regard the &#8220;smart&#8221; <em>differences</em> favourably, because the differences are a source of useful ideas to be imitated, while still allowing the near-averages to maintain their rich sense of reality. However, the <em>differences</em> see few of these benefits. Their lives are punctured by failure. Their realities forever on the edge of madness.</p>
<h3 id="perception">Perception</h3>
<p>In the final analysis, being <em>difference</em> is only desirable if you&#8217;re not. So, if you are, why bother?</p>
<p>Well, some don&#8217;t. Indeed, many of the most inspired people end up prematurely <a href="http://en.wikipedia.org/wiki/Geoffrey_Pyke" title="External link: Wikipedia - Geoffrey Pyke.">over-dosing on sleep</a> or <a href="http://news.bbc.co.uk/1/hi/uk/8519492.stm" title="External link: BBC News - Designer Alexander McQueen 'hanged himself'.">hanging in their own wardrobe</a>.</p>
<p>Part of the explanation lies in social reward structures. Perelman&#8217;s reclusiveness <a href="http://www.telegraph.co.uk/news/1526782/Worlds-top-maths-genius-jobless-and-living-with-mother.html" title="External link: Telegraph - World's top maths genius jobless and living with mother.">transpires</a> to stem from rejection by his &#8220;peers&#8221; (the <a href="http://www.mi.ras.ru/" title="External link: Steklov Mathematical Institute.">Steklov</a>). In effect, isolation from the one &#8220;social&#8221; group that might have relevance to <em>his reality</em>. In contrast, fame and fortune are the currency of popular average, and all but useless to anyone that <em>exists</em> near the extreme.</p>
<p>But these reward structures are more confused than that example suggests:</p>
<p>Since <a href="http://en.wikipedia.org/wiki/Epic_of_Gilgamesh" title="External link: Wikipedia - Epic of Gilgamesh.">Gilgamesh</a>, written narrative and storytelling has made it easier for humans to empathise with people they have never met. The more communication, the greater the sense of shared reality. In an age of widespread dissemination of &#8220;knowledge&#8221; and hyper-communication between individuals, shared reality tends to dominate. <em>Difference</em> requires an illusion to maintain. That may take the form of topic, ability or interest-based groups of people &#8211; such as obscure academic schools of thought. Such things are part of a bigger illusion &#8211; fortunately one that elitist universities already excel: Maintaining a very positive reputation among a wider population that generally doesn&#8217;t understand its academics.</p>
<p>Consumerist values are inherently shared values: Changing how the people around the owner of the consumerist good, regard that owner. The more people consider such a good to be desirable, the greater its value. This logically motivates people to seek the point of greatest shared value. A distinctly average position, that appears to disincentivise <em>difference</em>. However, consumerism is premised on the inherent contradiction of <em>everyone</em> wanting something that hardly anyone has &#8211; if everyone had it, nobody would want it. This consumerist contradiction is commonly resolved through a form of dual-identity:</p>
<ul class="spacedlist">
<li>The socialite wife of the business tycoon, who is able to buy the exclusive designer dresses, without having to demonstrate <em>difference</em> herself.</li>
<li>The &#8220;show-business celebrity&#8221; (notably actresses), whose professional skills allow them to convincingly occupy the roles of at least 2 people &#8211; one <em>difference</em> (their self, as an empathic performer), one more typical (their self, as presented in public). That they don&#8217;t always get the balance right, fills much of modern media: &#8220;Entertainment news&#8221; is as likely to be reporting the latest matrimonial crisis or drug addiction of some celebrity &#8220;role model&#8221;, as it is to be reporting on the art form they appeared in.</li>
<li>The projection of status through external signs and symbols &#8211; the big house, luxury car, prestigious title &#8211; that do not necessarily reflect the desires of their owner. Rather, they reflect the owner&#8217;s desire to be accepted in spite of their <em>difference</em>.</li>
</ul>
<p>Not all difference is associated with such tokens of value. Indeed, some combinations or extremes of difference are far less rewarding. But, it demonstrates that the lack of equilibrium in human society &#8211; that allows difference and the same &#8211; is maintained on a web of illusion. An illusion built heavily upon irrationality.</p>
<p>Such dominance of perception is perhaps only be a problem for those that seek to apply rationality where there is none. Those that are totally reliant on structure to organise chaos.</p>
<h3 id="illusion">Illusion</h3>
<p>After claiming I was &#8220;smart&#8221;, Larísa noted that I was, &#8220;as far as you can come from the old cliché [of players of online games] about the fat, stupid no-lifer living in his mothers basement&#8221;. Removing the words &#8220;as far as you can come from&#8221;, reveals how I actually am. At least, how I see me. With the caveat that I&#8217;m only living in my mother&#8217;s basement in a metaphorical sense &#8211; which is possibly worse.</p>
<p>How can we disagree, so fundamentally, about <em>me</em>?</p>
<p>Easily! Everything we think we know about one another comes from what we have written in articles such as this. In my case, these are rather poor representations of my <em>no-life</em>. And not just the inherent remoteness and weakness of reality associated with <em>difference</em>. For example, this article contains a day&#8217;s worth of curious (and hopefully interesting) thought, but has taken almost a month to write. The overall process is dominated by my <em>stupidity</em>, I merely don&#8217;t write those parts down. Your impression, as a reader, is a very selective illusion.</p>
<p>This notion of illusion mirrors thought on aesthetics.</p>
<p>One person can (subjectively) see beauty in (for example) a painting, that another person does not see. Yet by stating that it is beautiful, they implicitly demand that everyone else agree with them &#8211; what <a href="http://plato.stanford.edu/entries/aesthetic-judgment/" title="External link: SEP - Aesthetic Judgment.">Immanuel Kant called</a> &#8220;universal validity&#8221;. It&#8217;s a contradiction that transpires to be rather hard to resolve. I can assume all facts are, <em>in fact</em>, &#8220;normative&#8221; &#8211; social judgements &#8211; and effectively remove <em>empirical judgements</em> from the problem. Such a cheap solution hints at the underlying issue: The structure through which thought is applied.</p>
<p>Established early-enlightenment Western thinking <a href="http://plato.stanford.edu/entries/aesthetic-concept/" title="External link: SEP - The Concept of the Aesthetic.">regarded</a> beauty as rational (for example, the idea that beauty could be quantified using mathematics) and egoistic (for example, the idea that beauty must be self-serving). Roughly the opposite of my logic, which stresses irrational, <em>us</em>-centric behaviour. My hypothesis is that thought is gradually evolving from one extreme to the other. That evolution parallels the shift of wider scientific thought from determinism (fixed natural laws) and reductionism (explaining a thing by the sum of its parts), to chaos (divergent dynamic systems) and emergence (isolated components do not explain the whole system).</p>
<p>The issue can also be considered from the opposite extreme. For example, if we can have 2 words for the same thing, why is it so hard to have 2 things for the same word?</p>
<p>Well, we can: The most complex &#8211; that is, <em>beautiful</em> &#8211; forms of the English language do just that. Consider my earlier line, &#8220;This is what drives me mad.&#8221; <em>This</em> is left undefined. You probably read it as referring to the previous paragraph, but it could also refer to the next paragraph. Or both. Or maybe I was using the sentence to convey uncertainty?</p>
<h3 id="empathy">Empathy</h3>
<p>Underlying this social illusion is empathy &#8211; the human ability to perceive how other humans are feeling. Without empathy, illusion loses context, meaning, plausibility, belief. That hints at why empathy occurs across the spectrum:</p>
<ul>
<li>Empathy logically defines &#8220;the same&#8221;, since it is required to form conventional social connections.</li>
<li>As &#8220;emotional intelligence&#8221;, empathy is one potential component of difference.</li>
<li>The ability to occupy the persona of someone unlike yourself, is what William Hazlitt <a href="http://essays.quotidiana.org/hazlitt/genius_and_common_sense/" title="External link: William Hazlitt - On genius and common sense.">described as real genius</a> &#8211; an extreme manifestation of empathy, found in the very best actors and playwrights.</li>
</ul>
<p>Neurologically, the same brain activity occurs regardless of whether a person is experiencing something themselves, or is empathising with another person. <a href="http://en.wikipedia.org/wiki/Mirror_neuron" title="External link: Wikipedia - Mirror neuron.">Mirror neurons</a> might challenge the very notion of an independant (rather than collective) mind. In the meantime, they surely blur the boundary between illusion and <em>what is</em>:</p>
<p>If your view (mental feeling) about me is derived from your view of similar conditions, then your view about me isn&#8217;t about me at all. Your view reflects upon you. If we are both broadly similar, then we might agree on a shared sense of truth. But if we are separated by difference, illusion dominates.</p>
<p>So, illusion allows us to disagree without disagreeing. For limited <em>difference</em> to co-exist with <em>the same</em>.</p>
<p>Empathy doesn&#8217;t come &#8220;built-in&#8221; at birth. It develops in the early years of life. The most popular example is the <a href="http://en.wikipedia.org/wiki/Sally%E2%80%93Anne_test" title="External link: Wikipedia - Sally-Anne test.">inability of very young children</a> (roughly under age 4) to hold a false belief &#8211; they cannot acknowledge that others may hold a belief that is wrong.</p>
<p>Perhaps reality is <em>primarily</em> a social construct after all? And most interestingly, one that can be manipulated as the human develops.</p>
<h3 id="gravity">Gravity</h3>
<p>The <a href="http://timhowgego.com/adventures-in-the-invisible-tent.html" title="Adventures in the Invisible Tent.">uncanny notion that the sky is down</a> (not up) is madness. Likely a &#8220;reality of one&#8221;, even though up and down are inherently arbitrary concepts. Yet we all agree that the sky is up, and (mostly) think nothing more of it.</p>
<p>This social gravity &#8211; the tendency towards <em>the same</em> &#8211; dominates humanity. While illusion allows some flexibility, it doesn&#8217;t allow the full range of possibilities to be explored. And so we seem to be trapped on one side of the uncanny valley. We just don&#8217;t perceive ourselves to be trapped, because everyone is <em>trapped</em> in more-or-less the same place.</p>
<p>Social gravity dominates justice and law. Systems of jury trial (the judgement of average), the very laws that underpin them. Unfortunately, the more we understand about the <em>difference</em>, the more the system is challenged: If <em>my</em> (let&#8217;s assume) autism, means I can&#8217;t comprehend a particular socially-agreed notion of &#8220;wrong&#8221;, should that be a mitigating factor when I commit that wrong? Using the model of <em>difference</em> presented here, if the legal system is prepared to accept a plea of insanity, it should at least consider a plea autism. Such pleas of <em>difference</em> are a the logical evolution of legal systems that are prepared to moderate justice depending on circumstances. Yet, in the final analysis, every crime can be argued to be the result of some kind of non-average human. An alternative, absolute notion of law (&#8220;all murders should be hanged&#8221;) is certainly easier to rationally manage, but goes against common human instinct (&#8220;all murders should be hanged&#8230; unless the murder was unintended&#8221;).</p>
<p>Social gravity is apparent in the &#8220;medicalisation of existence&#8221;. The idea that every divergence of humanity from <em>the same</em> is some sort of medical condition, implicitly <em>in need</em> of a cure. A broken bone is both painful and not terribly useful, so most medical ethics would agree that the bone should be fixed. A <em>broken</em> mind is far more contentious. Extremes of <em>difference</em> may be socially unpleasant for everyone involved (both afflicted and affected), but may yield the very &#8220;moments of genius&#8221; that wider society needs to evolve. It would be ironic if, for example, in the rush to &#8220;<a href="http://www.nytimes.com/2004/12/20/health/20autism.html?_r=1" title="External link: New York Times - How About Not 'Curing' Us, Some Autistics Are Pleading.">cure autism</a>&#8221; humanity damned itself to mediocrity.</p>
<p>Fortunately, social gravity is biased by <a href="http://timhowgego.com/optimism.html" title="Optimism.">optimism</a>. A tendency towards the slightly above-average. The popular view that &#8220;smart is good&#8221; may not eliminate an attempt to normalise society, but will ensure that such normalization is actually a little bit better than normal.</p>
<p>But that&#8217;s still a bleak view, likely to suppress the scale of evolutionary change, rather than &#8211; well, what?</p>
<h3 id="chaos">Chaos</h3>
<p>What if there wasn&#8217;t a single social gravity? Instead many different points, to which different communities of humans gravitated.</p>
<p>Conventional logic would view that like a divergence of the species: Communities would be unable to share anything outside their community. Including copying new methods discovered by other communities. Evolution falters. Certainly becomes inconsistent. And we&#8217;d probably end up slaughtering one another, in some kind of dystopian hell.</p>
<p>But that logic overlooks the apparent ease with which the human mind can learn of, and exist around, illusions.</p>
<p>Rather than introduce the mind to one illusion, introduce it to several. Each of these illusions is off-set from the centre of social gravity, but balanced around that centre for each person. For (a simple) example, 3 different illusionary points forming a triangle, where the centre of the triangle is the center of social gravity. On balance, everyone is <em>the same</em>, even though nobody actually occupies the center point of social gravity. Both <em>difference</em> and <em>the same</em>.</p>
<p>In the simplest form, each illusion is shared by a different community of people. But unlike the earlier conventional logic, balance is now maintained by each person <em>existing</em> in several different communities, allowing any one person to cross-reference their respective illusions.</p>
<p>In a more complex form, each illusion is unique to the individual. This more complex form would require mutually opposing &#8220;realities of one&#8221; to average out at the centre of social gravity &#8211; which makes about as much sense as saying, <em>the difference between nothing and nothing is everything</em>.</p>
<p>The <em>shape</em> of thought is also unclear. My logic assumes it is unbiased &#8211; a thought in one direction is just as likely as a thought in the other &#8211; and hence (in a 2-point model) the 2 thoughts average out in the middle. Of course conventional &#8220;academic&#8221; structure tends to be rather linear &#8211; sequences of arguments, where consensus is built over time, and divergence tends to only occur towards the end. In contrast, my logic implies the reconciliation of several different sequences, each of which is built upon fundamentally different initial assumptions. </p>
<p>This doesn&#8217;t just allow vastly more different combinations of possibilities to be considered across all human thought. It parallels the creative thought process (for example, <a href="http://timhowgego.com/valuing-nothing.html" title="Valuing Nothing.">James Austin&#8217;s 4 kinds of luck</a>), and reflects the emergent structure of the brain itself (neurons may take one of hundreds of thousands of possible paths, not a predictable route). And it does all this while maintaining the same sense of common ground between humans, that more structured forms of thought currently tend to ensure.</p>
<p>It&#8217;s easy to argue that this is nonsense. And to many people alive now it probably always will be. But it might make more sense to those born into a world where it is quite normal to have <em>relationships</em> with people solely through a form of digital communication, in addition to actual physical relationships. The adaptation of the mind to manage these multiple illusions is really no adaptation at all. But such logic appears to offer the opportunity of an intellectual and social structure that mimics a chaotic system. Potentially, immensely more beneficial to humanity than conventional structured thought, although a huge challenge the just about everything modern society was established upon.</p>
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