Tuesday, June 23, 2009

Act of God

When studying contract law, or when signing any formal contract, you may come across the clause Force Majeure. It means superior force. The lecturer said it refers to act of god. This clause is included in contract in order to avoid some liabilities. It is bad news for the damaged party in the contract. One cannot sue the other party for damages arising from act of god. Definition of act of god is normally stated in the contract, but the description is not exhaustive. Usually such events include natural disasters such as flooding, earthquake, volcanoes and also man-made disasters such as war, strike, riot, crime. The general principle is that events which cannot be controlled by the contracted parties are acts of god.

While natural disasters with causes beyond human comprehension temporarily can be regarded as acts of god, it may a shame to label those human evil deeds as acts of god. On the other hand, on the face of the almighty, all good and evil things we cannot controlled should be attributed to god. This thinking prompts an article in Mckinsey Quarterly entitled What Natural and Economic Disasters have in Common. The author draws parallels between the failures of man-made systems, such as the economy, and of similarly complex natural ones. Please take a look at the article if you are interested.

Economists, financial experts and the like are somewhat disappointed for not foreseeing last year's global credit crisis. They turned to the lexicon of natural disasters, describing the shock as a tsunami hitting markets and as an earthquake shaking the world economy’s foundations. Such reaction reflects the extreme and unexpected nature of the circumstances. In fact, the parallels between the dynamics and failures of man-made systems, such as the economy or the electricity grid, and similarly complex natural ones are bringing new ideas to economic forecasting, strategic planning, and risk management.

Scientists in cooperation with economists are applying complexity theory to economic research, rejecting the traditional view of the economy as a fully transparent, rational system striving toward equilibrium. The geophysics professor and earthquake authority Didier Sornette, for example, leads the Financial Crisis Observatory in Zurich, which uses concepts and mathematical models that draw on complexity theory and statistical physics to understand financial bubbles and economic crises.

Sornette aims to predict extreme outcomes in complex systems. Many other scientists in the field of complexity theory argue that earthquakes, forest fires, power blackouts, and the like are extremely difficult or even impossible to foresee because they are the products of many interdependent “agents” and cascades of events in inherently unstable systems that generate large variations. One symptom of such a system’s behavior is that the frequency and magnitude of outcomes can be described by a mathematical relationship called a “power law,” characterized by a short “head” of frequently occurring small events, dropping off to a long “tail” of increasingly rare but much larger ones. The economy, like other complex systems characterized by power law behavior, is inherently unstable and prone to occasional huge failures.

Act of god is being studied and understood and the focus is on early warning. Similar to the early-warning systems for earthquake, volcano eruption and tsunami, strategists could monitor potential indications that economic stress might be building in their industries. Other lessons to be learnt from nature's complex systems include flexible business models incorporating some slack and flexibility, and examples like controlled damages of small forest fires to avoid large-scale fires.

Thursday, June 18, 2009

The New Exodus

About 3400 years ago, Moses led the Israelis away from Egypt to find the promised land. They finally settled in Palestine and built a temple in Jerusalem. This story is recorded in Exodus which is a sacred text worshiped by the Jews, and more than a thousand years later worshiped by the Christians and the Muslims. Exodus has become a symbol of people escaping hardship and finding a bright future.

National Geographic carries a story in the June 2009 issue entitled the New Exodus. This time, the direction has reversed. Christians are now escaping from the promised land; but the meaning and the spirit of Exodus are the same.

The article gives a detailed account of the Christians living in the Levant, which is an area south of Turkey down to Sinai. Christians have been living there since the first century and flourished when the Roman Empire turned Christian. The area was conquered by the Muslims a few hundred years later, but Christians were still living there. The first great disaster to them was the Crusades, claiming to preserve Christianity. Crusaders slaughtered most of the people in the town they captured. There is an old story that the Crusaders could not tell who was Muslim or Christian; so they killed everyone, saying god could tell when these people died. After the Crusades, there were still many Christians living in the Levant alongside the Muslims.

The present disaster is a result of the clash between western countries and middle east countries. A quote from the article says:
"Western Christians have made matters worse, he argues, echoing a sentiment expressed by many Arab Christians. It's because of what Christians in the West, led by the U.S., have been doing in the East," he says, ticking off the wars in Iraq and Afghanistan, U.S. support for Israel, and the threats of "regime change" by the Bush Administration. To many Muslims, especially the fanatics, this looks like the Crusades all over again, a war against Islam waged by Christianity. Because we're Christians, they see us as the enemy too. It's guilt by association."

The New Exodus is on-going. Christians in the promised lands are now out-numbered and surrounded by angry voices. They are continuously seeking an exit to other countries, leaving behind only those who are too old to emigrate. The article tells a story about a Christian family. The wife is from Bethlehem while the husband is from Jerusalem, only 10 km away. Because Bethlehem is Palestinian territory, by Israeli law they cannot live together. The wife has to apply for special permit to enter Jerusalem to visit her husband. They are now planning to emigrate to Canada.


The situation is very vivid when I visited Jerusalem and Bethlehem two years ago. Jerusalem is Jewish territory. I saw Judaism worship everywhere. Christianity is only present inside the ancient church relics. Bethlehem is even worse. The Jewish guide could not even get close to the wall surrounding Bethlehem. Tourists were met by a Palestinian guide on the other side. Christianity in Bethlehem is limited to the Church of Nativity. It is not difficult to imagine how hard a Christian is living there. Both the Jews and the Palestinians are not friendly. Not friendly is actually an under-statement.

During Easter, the Christian world suddenly descends on the promised land. Christian tourists from different countries roam the holy land, doing the ritual of walking the Via Dolorosa, crowding the Church of Sepulchure and the Church of All Nations by the Garden of Gethsemane. As seen by this local Christian family:
"Hundreds of pilgrims churned through the church's double doors, filling the cavernous space with warm bodies and pushing us deeper into the church... Lisa gripped the stroller and tried to anchor herself against the river of humanity flowing into the church. Dutch, German, Korean, Nigerian, American, French, Spanish, Russian, Filipino, Brazilian, the crowd surged forward, searching hungrily for a greater proximity to God... Suddenly Lisa's decision to bring Nadia along was looking like a mistake... As we passed through the doors, the crowd thinned out slightly. Lisa leaned in, straining to be heard over the chaos around us. "Do you see how it is?" she asked, gasping for air on the hill where Jesus spent his last night on Earth. "This is our home. And it's like we're not even here!"

Monday, June 8, 2009







另一個著名的數字表達例子是美國唱片業協會RIAA 發放的數據;它說在二零零二年美國人在互聯網下載音樂有二十一億次,每次下載商業上會損失一張唱片的銷售;每張唱片價值十二美元,所以唱片業該年損失二百五十二億美元。這個結論故意錯誤地假設每次下載都成功、整張唱片都被下載而如果不下載會有人一定買一張唱片。該年唱片銷量是八億張,因此音樂下載被說使唱片業損失了百分之七十三的收入。真實的情況是該年唱片銷售數量只是下跌百分之九,而收入只下跌百分之七;而銷量下跌亦受新唱片出版減少和影碟競爭影響。