The problem of gravitational fluctuations confined inside a finite cutoff at
radius r=rc outside the horizon in a general class of black hole geometries
is considered. Consistent boundary conditions at both the cutoff surface and
the horizon are found and the resulting modes analyzed. For general cutoff
rc the dispersion relation is shown at long wavelengths to be that of a
linearized Navier-Stokes fluid living on the cutoff surface. A cutoff-dependent
line-integral formula for the diffusion constant D(rc) is derived. The
dependence on rc is interpreted as renormalization group (RG) flow in the
fluid. Taking the cutoff to infinity in an asymptotically AdS context, the
formula for D(∞) reproduces as a special case well-known results derived
using AdS/CFT. Taking the cutoff to the horizon, the effective speed of sound
goes to infinity, the fluid becomes incompressible and the Navier-Stokes
dispersion relation becomes exact. The resulting universal formula for the
diffusion constant D(horizon) reproduces old results from the membrane
paradigm. Hence the old membrane paradigm results and new AdS/CFT results are
related by RG flow. RG flow-invariance of the viscosity to entropy ratio η/s is shown to follow from the first law of thermodynamics together with
isentropy of radial evolution in classical gravity. The ratio is expected to
run when quantum gravitational corrections are included.Comment: 34 pages, harvmac, clarified boundary conditio