QM is apparent at atomic and molecular scales. One much larger example is a Bose Einstein condensate in which a single quantum state can extend over thousands of atoms.

Watch for positronic brain development.

Its not quantum :)

This is classical physics but same result. A chaotic system by definition has infinitely close initial conditions that diverge exponentially over time. This means you don't have to invoke quantum to get a effectively unknowable future result. In addition the system is slam full of noise and incorrect assumptions so a lot of the players are acting on false assumptions. This is of course rapidly coming to a close but as of today the market has not correctly priced crude.

So the net result is that the classical model that I believe models the system i.e a forced logistic equation simply give the result that the system is becoming chaotic and effectively unpredictable.

The island of stability if you will or only stable orbit however you want to put it is that no matter what happens people have to eat and for the foreseeable future they have to have oil.

This rush to stability itself destabilizes the system causing more people to rush to stability.
http://en.wikipedia.org/wiki/Stochastic_resonance

Although the market has a lot of things wrong it has figured out that everything but oil/food/water now has a dubious valuation and this includes the fiat currencies.

The noise from the mainstream media and puppets in control now simply further destabilizes the system. Even though many people hold incorrect assumptions about whats happening the growing consensus is no one believes the puppet masters any more.

In any case a noisy chaotic system with very small islands of stability is sufficient to explain the current situation and effectively as unpredictable as a quantum system of any complexity. Actually less since a quantum system esp model as Feynman path integrals always finds the perfect solution. So a quantum market would pick the perfect answers (plural intended)

In any case I think we will see hoarding become a huge issue over the coming months in a lot of countries esp later in the year as countries scramble to find diesel to get the crops in.

Next year the repeated warning we have gotten about NPK issues will probably become a issue and we could well have crops planting curtailed by lack of diesel and yields lowered by lack of NPK. Global warming will throw in its own curve ball.

This thing can blow up so many different ways now its become impossible to figure it out.

However, since human behavior is only dubiously quantifiable, "reflexivity" is only loosely relevant. So, IMHO, it cannot be applied to human behavior, since I cannot fathom how one would apply Feynman's path integral method (i.e. "sum over histories") to human behavior.

Perhaps, when Hari Seldon is born, and develops psychohistory, we will have the appropriate mathematics to apply quantum mechanics to humans. ;-)

Google Robert Prechter and socionomics if you're interested in reflexivity, especially if you want it quantified (fractals and Fibonacci). He's been developing these ideas since the 1970s.

Great article by the way Nate. These ideas need to be discussed, as the flaws of the current paradigm become increasingly obvious. Emotionally driven human herding behaviour is critical to market dynamics. Markets are not rational or efficient and there is no such thing as equilibrium. Equilibrium implies negative feedback, but markets swings at all degrees of trend are based on positive feedback. In financial markets, demand increases as prices rise and everyone chases momentum, and demand falls as prices fall. Trends change suddenly once the greatest sucker has been fleeced, rather than gradually trending back towards a 'set point'.

A pretty good parallel, I think. A clue for the concept as Soros uses it, is Karl Popper's assertion that "No scientific predictor can predict its own future results". Soros is Popper's disciple through and through.

The infinite loop solution can be eliminated since we have finite inputs. I.e the program is running on a battery powered laptop. So finite resources actually eliminates one of the solutions thus this problem is more solvably insolvable then the halting problem. Technically this is true for any computation engine that obeys the second law of thermodynamics eventually heat degradation or disorder causes the system to become unable to compute.

I'm not sure if this is known or not.

Next for the same reason only the finite negative outcomes are possible if you don't introduce a new source of power of sufficiently large size so the set of solutions we consider positive can be eliminated again just based on the second law. If you did introduce it this would be the semi-renewable society we talk about renewable enough on time scales that matter to us.

So again this problems solution domain is a smaller infinity than the halting problem.

Next we can invoke the fact that its a complex forced system with positive feedback. Almost all equations that describe such systems have chaotic domains. I have no idea if a proof exists that the all do or not.
Given that these types of equations don't have a closed form one can argue that a week proof of some sort exists that the lack of general closed solutions equals chaos.

This assumption eliminates all of the closed simple solutions that have been presented as predictive models of the future evolution of oil extraction. So we can with some caveats eliminate this entire set.
So it fairly sure bet that everyone that has touted a model for the evolution of oil extraction to date is wrong. Some will eventually be more wrong than others but this is another group of solutions thats we can eliminate with some certainty as being wrong. The ones that require some sort of unified response to peak oil or selfless behavior are probably more wrong than others but in general this is not even relevant.
They are all wrong.

And finally and last but not least our computation engine is certain to be running a incorrectly coded program since noise exists in the system. This means of course even if stable regions exist in the perfectly coded algorithm noise in the system will ensure it explores a wide range of possible solutions and even recodes itself. It a non-linear driven mutating system. Think of it as a battery powered laptop being periodically dropped on the floor and zapped with static electricity. Simulated annealing is what this is called. Thus the chance of remaining close to a stable solution given its forced and noisy is effectively zero.

We happen to know that every 4 billion years or so given a constant influx of energy this computation engine gets smart enough to discover the halting problem.

However outside of this one briefly stable solution all others lead to the program halting early in execution.

Therefore given the odds its a safe bet that the outcome is our own simpler algorithm we call civilization we halt when stressed like all the other attempts before us.

In my opinion the fact that the algorithm or system refuses to recognize that without a lot of work the certain outcome is halting ensures that halting is the outcome. Thus the only solution that works is the one that recognizes or codes around the vast number of halting cases. In fact this is exactly what life figured out after a few billion years.

So in a pretty perverse way the fact we are unable to admit we are up shit creek without a paddle ensures that we are about to go over a waterfall.

I find it a bit sad that we are capable of discovering the halting problem yet is a group unable to except the obvious even though its the very reason we exist in the first place.

Yes....Reflexivity in sociology: difficult to describe, as it means different things in different contexts or for different authors.. cause and effect interact (seen from systems theory); or more tritely, one comes back to the (human) observer effect - see the anthropologist in the top post who affects the community she is studying - thus influencing her own vision (though the feedback loop is often forgotten.) The concept was indeed in part borrowed from QM to scientifize - that is a Frenchism - some common sense notions. It also, however, has roots in the idea of a ‘self fulfilling prophecy’ (Robert Merton, but See William Thomas, 1920’s or so) - the idea that how humans define (conceive, view, understand, etc.) situations become the “reality”.

These ideas - reflexivity, effect of measurement, observer effect, Rosenthal effect (something similar: expectations create reality, as when researchers are told the group of rats are ‘intelligent rats’ - lo and behold they perform better than the others, etc.) are all a bit muddled in social / psychological science. Vague ‘principles’, ‘laws,’ caveats, rules of thumb, that attempt to grasp, in some way, the interaction between human perception, concepts, and events in the real world, or ‘facts’ - proper, accepted, descriptions of the world, events, etc.

All such thinking has its roots in a constructivist pov: humans construct a view of reality, and ultimate ‘true’ reality is unknowable, and so possibly irrelevant or uninteresting. Of course, science and conventional wisdom furnishes us with some rock bottom statements or concepts that many or most accept as ‘true’ - cars burn petrol, men desire women, stars exist, plants grow... (Economists, technotopists, seem to accept a whole lot of other precepts as ‘true’...)

Really, the constructivist pov is all that Soros and the OP are referring to, imho at least. Sorting out what is ‘really real/true’ vs. what are human constructs and how these deviate from 'truth' is unresolved (duh!) - in fact everyone has their own version of that divide.

Yep.

Reflexivity in the context given deals with the flow of information through the system, and the feedback implications of that flow. It gets into complexity, the interesting bit being the meta level outcomes (eg what the totality looks like and does).

You could conceive of a QM system that would work similarly. Probably something involving entanglement and interacting systems of particles.

The interesting bits are where the attractors are for different levels of information flow - since they correspond to mode switches within the operation of the larger scale system.

The probability is that and understanding that peak oil is here would represent a sufficiently low level important event to force a switch of attractors (and with it modes of operation). Think of it as supercooled water turning to ice.

What's a meta for? To make an analogy...

When I read the post, the analogy that came to mind was that of a flock of birds, well settled in trees, until a kids appears, flinging a stone into the leaves. The birds fly away, but the direction they follow is the same, each deciding where and how to turn not based upon some knowledge of where the next roost is, but based upon the decision of the bird next to it. The same with some of our markets. In a time of calm, each bird/investor can determine its own way, but when frightened, each bird/investor reacts according to the movements of another frightened bird/investor, and not necessarily in maximization of its own self-interest. The flock flies together, and it takes a strong will and stout heart to move differently.

Oil markets are, and will for a long time be, in a state of crisis, and the birds/investors will be reacting to the movements around them, rather than sitting in a roost in Omaha, figuring out what is the best strategy for the long haul. Maybe that's why we had the spikes in wheat earlier this year, and the wierd jump and fall in WTI today.

You misunderstand the concept a bit. It's perfectly possible to understand a system up to a certain degree by looking at feedbacks and cycles and stuff. But complex interactions and chaos is not the same as reflexivity. Reflexivity becomes a problem when you are an unseparable part of the system you want to predict.

Then you can run into grand scale, real-life versions of the Liar's paradox, where whatever you say the truth is, the act of doing so may change it into something else. From the outside, that may look like chaos. From the inside, it's more subtle than that, and you're stuck on the inside, much as you would like to see it all from above.

This is really closely tied up to what Karl Popper (Soros' great teacher) wrote on historicist ideologies like communism. By declaring rules of evolution that society supposedly follows, and getting people to believe it, they changed the future they were supposedly predicting.

My first thought on hearing the term reflexivity was that it was a variant of the uncertainty principle one of the cornerstones to Quantum Mechanics. As pointed out above simultaneously measuring momentum and position is limited by Plancks constant. This is quite different but the concept is similar in that one recognizes that all actions have consequences and that the magnitude of uncertainity can be quantified. Without going into long discourses, there have been several papers in Science and Nature etc. in the last few years providing evidence that Quantum Mechanics occurs at scales larger then atoms and molecules where it clearly applies. There are in fact numerous books about the possibilities of QM applying to human behaviour. The best that I know is the late Anton Wilson's book "Quantum Psychology". He had degrees in mathematics and psychology. There is also a book by Prof. David Boehme (also deceased) which I consider the best non-fiction book of the 20th century titled "Wholeness and the Implicate Order".