speculation

Mayor Bloomberg is on record claiming that riots are caused by unemployment among college graduates. But I suspect that Occupy Wall Street is overweight degrees and underweight 9-to-5 employment, and it’s not taking down the regime so much as it is taking down a lot of pizza. So one might question Bloomie’s conclusions and seek someone with more rigorous statistical training to explain Where Do Riots Come From.

Fortunately we have that in Yaneer Bar-Yam, a physicist, complex systems theorist and general man-about-town with a pleasing CV that includes writing a book called “Making Things Work” and telling Slate that “the shortcomings of the U.N. humanitarian-response system in Haiti have a lot to do with a 50-year-old mathematical theorem known as Ashby’s Law of Requisite Variety.”

He and some friends wrote a paper, released yesterday, arguing that increases in food prices over the last few years can be explained almost entirely by two factors: financial market speculation and the growing use of corn for ethanol production rather than food.

Now these arguments have been made before, and also disputed or minimized. The new paper rejects a lot of those criticisms; more interestingly, it constructs a fairly simple four-parameter model that can pretty closely match the actual trends in food prices over the last few years:

So, neat. Also disturbing. Also also disturbing is this: Read more »

Unfounded speculation encouraged at this time.

Update: And it’s Goldman learning 550 million “lessons.” Read more »