Pascal's diversified portfolio

I have to let you in on a secret - I don't read that many blogs. But I have a select group that I read as much as humanly possible. Which is why I get immensely pleased when I come across a blog post that I like.

This is one. And, as always, Bronze Dog does a smashing job. Which he referred to a post at PZ Myers' excellent blog (which I read less regularly), Pharyngula.

These posts are about something written by the increasingly unbalanced Scott Adams who created the Dilbert cartoon. I normally like Dilbert. Not passionately or anything like that, hell, give me Ernie/Piranha Club any day. But I find it better than some of the cartoons out there. Fred Basset, anyone?

Adams has been writing all sorts of weird shit in his blog lately, and given his comic timing (I love bad puns) in the strip, you would have to say that he is most definitely not taking the piss.

I mention this because if there is one thing that is guaranteed to make me angry, it's mention of this stupid concept.

Pascal's Wager has always been something that has annoyed me. The first tine that I heard it was at school when my roommate - who was previously an atheist from an atheist family - suddenly found religion in a big way. And this was one of the fastest transformations I ever saw - it all took place over a two week period.

Anyway, he ran Pascal's Wager by me. For those who need their memory refreshed, Pascal's Wager goes like this:

If I believe in God, and I find out that He doesn't exist, then I have lost nothing.

If I don't believe in God, and I find out that He exists, then I have lost everything.

Pascal had formulated a lot of what became known as Game Theory, and his reasoning was sound, except that he didn't realise one thing - he had made the assumption that only the Judeo-Christian-Islamic god existed.

Or, to put that another way, if God promises annihilation for non-believers, than what about non-believers in Shiva, the Destroyer?

Anyway, Dog suggests the following alternate probabilities to Pascal's Wager about a deity of which we know no details:

1. What if the deity punishes people for doing evil deeds and rewards them for doing good deeds, with no regard for beliefs?

2. What if the deity punishes people for blindly believing in him and rewards them for thinking critically and thus doubting him?

3. What if the deity rewards everyone, regardless of what they do or believe?

4. What if the deity rewards people on a random basis?

5. What if the deity only punishes those who step on cracks in a sidewalk?

6. What if the deity doesn't care at all about human beings and only thinks about them as a meaningless, uninteresting by-product of a brane/string experiment he conducted 13.7 billion years ago?

7. What if the deity just throws everyone's souls up on the roof, where they get stuck?

And so on and so forth. I thought of another possible outcome:

8. What if the deity is a liar?

Oh, the confusion that one would cause. And of course, this is before consideration of competing deities, to whom all the outcomes above might also apply.

Being the financial nerd that I am, I thought at that I'd take a view of this through the window that is Portfolio Theory. Portfolio theory says a variety of things, but the one most important thing that comes out of portfolio theory is this: for a set level of risk, you can increase your return by diversifying your portfolio.

Or to put that another way, "Don't put all your eggs in the one basket."

So let's take a diversified approach to investment in a god as proposed by Pascal:

Option 1 - Belief in god A but he doesn't exist.

Believing in a god would appear to have a rather high risk/return trade-off - the potential return is eternal life, however, your potential risk for this return is also infinite and given that there are quite a few gods out there, who knows if you've picked the right one?

Normally, you can't say that infinity A is greater than infinity B, so there is no way of knowing if the risks outweigh the potential returns, but you can say this: the chance of you picking the wrong god is enormous from the outset.

So for us to load all our belief credits into the one slot machine is obviously a high risk investment.

Option B - Belief in a portfolio of gods.

This would appear to satisfy a prudent approach to investing in a high risk asset class, which is what theistic belief clearly is. The problem with this is that there are many more gods that we can read about before we can profess a belief in them.

I should clarify from the outset that my problem with the word "belief" is another thing that Dog expressed frustration with in his post. Is it enough to just say that you believe in a deity?

Most theists would say yes to this. After all, quite a lot of them will say they believe, however they may actually believe something completely different. However, this is not what most of the rest of us understand by the word belief. The problem with this perspective is that a token statement of belief is clearly not belief, if the person who says it believes something completely different.

Most of us understand belief to be what we predominantly think is the case about something, when we do not know the answer. For example, if we're holding an apple, and we drop it, we know it's going to hit the ground. This is called "knowledge". However, if we drop the apple, and we think that a magic invisible hand is going to catch it before it hits the ground, this is called "belief".

There is nothing that could cause us to "know" that this magic invisible hand will catch it - you would have to be pretty darn sure to say that you knew that a hand or other such appendage would catch it.

So obviously, while belief implies some level of disbelief, it is an outright lie to say that you believe in something when you don't.

Which means that for us to have a meaningful definition of belief for the purpose of this post, we'll have to eliminate those who only pay lip service to believing in something.

In other words, we'll define belief as being that where we've studied the deity in question a little bit and decided that we have more than just a token level of faith that they'll be there to greet us at the other end.

So it is possible to believe in a portfolio of gods based on this approach. How do we construct this portfolio?

Those who understand portfolio theory know that there are many ways to construct this portfolio. In investment, there are active methods that look at various different criteria, all of which involve chopping and changing between different assets in order to reduce risk and maximise return.

There are also passive methods where assets are bought and held for a long time based on a number of criteria, though normally, the criterion is a popularity measure, such as a major index. These are all designed to get a return that matches the index or some other benchmark.

I propose that we appeal to popularity and create a passively managed index portfolio based on popularity. This makes it easy.

Our Judeo/Christian/Islamic god gets in first. The Taoist pantheon is next - the Jade Emperor is a particular favourite of mine - followed by Vishnu, Brahma and Shiva. The remaining spots in the core portfolio would be filled by the remaining major deities out there.

Now on to creating a satellite investments sub-portfolio with lesser deities. I've always had a thing for Huitzilopochtli and Quetzalcoatl, so they're in. And just because I'm Australian, the Rainbow Serpent gets the nod, too. Flying Spaghetti Monster and Invisible Pink Unicorn? They're in.

How much of an investment do we make in all these deities?

Reading the holy books of each and professing a belief should be enough I think. We don't want to make this too onerous.

And this is where our diversified approach cleans up - you get as many bets into different deities as possible.

It also minimises the downside of the other possibility that Pascal overlooked:

What if all the deities exist, and they have to fight amongst each other to see who gets to punish unbelievers?

What better way to do this, than to reduce those deities who are out to get you?

Of course, prudent investing also says to wait until the evidence is in before committing. For me, Pascal's Diversified Portfolio is just going to have to wait until I have enough evidence to start putting my portfolio together. I don't want to find the religious version of Enron in my portfolio.

My advice?

Theistic belief is the kind of high risk/high return investment that makes derivatives appear positively safe by comparison.

This is for ultra-ultra-ultra-aggressive investors only, folks.