Month: March 2018

Will an AI Ever Be Able To Centrally Plan an Economy?

Every improvement in computing power and artificial intelligence raises anew the claim and, for some, the hope that now we can centrally plan the economy. I was asked at Quora whether this will ever happen.

I will begin by accepting that there is nothing inherently impossible about an AI running an economy so, for the sake of argument, let’s say it could be possible using today’s computing power to run a small economy in say 1800. Nevertheless, I assert that an AI will never be intelligent enough to perfectly organize a modern economy. Why?

The main reason is that AIs will themselves be part of the economy. Firms and individuals use AIs to make decisions. Thus, any AI has to take into account the decisions of other AIs. But no AI is going to be so far advanced beyond other AIs that this will be possible. In other words, as AIs increase in power so does the complexity of the economy.

The problem of perfectly organizing an economy does not become easier with greater computing power precisely because greater computing power also makes the economy more complex.

Hat tip: Don Lavoie.

Is America as polarized as you think?

In this study, we argue that the perceived polarization of Americans along party lines is partially an artifact of the low response rates that characterize contemporary surveys. People who agree to participate in opinion surveys are more informed, involved, and opinionated about the political process and therefore hold stronger, more meaningful, and partisan political attitudes. This motivational discrepancy generates a bias in survey research that may amplify evidence of party polarization in the mass public. We test the association between response rates and measures of polarization using individual-level data from Pew surveys from 2004 to 2014 and American National Election Studies from 1984 to 2012. Our empirical evidence demonstrates a significant decline in unit response that is associated with an increase in the percentage of politically active, partisan, and polarized individuals in these surveys. This produces evidence of dissensus that, on some issues, may be stronger than exists in reality.

That is from a forthcoming piece by Cavari and Freedman in The Journal of Politics.  For the pointer I thank an anonymous correspondent.

And via Nathan, here is a relevant comment.

Can Britain make itself less complacent?

Educators in Britain, after decades spent in a collective effort to minimize risk, are now, cautiously, getting into the business of providing it.

Out went the plastic playhouses and in came the dicey stuff: stacks of two-by-fours, crates and loose bricks. The schoolyard got a mud pit, a tire swing, log stumps and workbenches with hammers and saws.

“We thought, how can we bring that element of risk into your everyday environment?” said Leah Morris, who manages the early-years program at the school in Shoeburyness in southeast Britain. “We were looking at, OK, so we’ve got a sand pit, what can we add to the sand pit to make it more risky?”

Now, Morris says, “we have fires, we use knives, saws, different tools,” all used under adult supervision. Indoors, scissors abound, and so do sharp-edged tape dispensers (“they normally only cut themselves once,” she says).

Limited risks are increasingly cast by experts as an experience essential to childhood development, useful in building resilience and grit.

I suppose I am skeptical of this approach, as it may lead to harm and furthermore the benefits of risk have to arise more organically.  It will in any case be interesting to see how the public digests these changes as they play out in the lives of children.

Here is the full story by Ellen Barry.  In any case, there is also a bingo revival in Britain, is that a sign of renewed passivity?

On the so-called “beauty premium”

Very unattractive respondents always earned significantly more than unattractive respondents, sometimes more than average-looking or attractive respondents. Multiple regression analyses showed that there was very weak evidence for the beauty premium, and it disappeared completely once individual differences, such as health, intelligence, and Big Five personality factors, were statistically controlled.

…Past findings of beauty premium and ugliness penalty may possibly be due to the fact that: 1) “very unattractive” and “unattractive” categories are usually collapsed into “below average” category; and 2) health, intelligence (as opposed to education) and Big Five personality factors are not controlled. It appears that more beautiful workers earn more, not because they are beautiful, but because they are healthier, more intelligent, and have better (more Conscientious and Extraverted, and less Neurotic) personality.

That is from Satoshi Kanazawa and Mary C. Still, probably not the last word on this topic but still an advance in knowledge.  Via Kevin Lewis.

The Nordic glass ceiling?

Iceland in particular stands out among the Nordic states, since it has a smaller welfare state than its larger Nordic cousins and also ranks among the highest share of female managers in the world. On the other hand, Denmark has the highest tax rate among all the nations in the Organisation for Economic Co-operation and Development and ranks at the bottom in terms of its proportion of female managers.

In the dataset for developed economies, there are three countries with equal or higher rates of female managers than Iceland: New Zealand, the United States, and Latvia. These countries have relatively low tax rates: 26.4 percent in the United States, 29.0 percent in Latvia, and 32.8 percent in New Zealand.

That is from a new Cato study by Nima Sanandaji.

Monday assorted links

1. Should the Pentagon investigate UFOs in greater depth?

2. How do you teach people to love difficult music? (NYT)

3. “He swore that he would avoid learning about anything that happened to America after Nov. 8, 2016.” (NYT)

4. Did the blockchain mis-title this paper?

5. Big business is better than small business.

6. Steve Bannon on Hayek and the The Road to Serfdom (video).

7. And the excellent Michael R. Strain is now writing for Bloomberg View.

The World’s Biggest Field Experiment

A new paper (another summary) in Nature reports on what is perhaps the world’s biggest field experiment which has successfully shown how to, at scale, increase crop yields and reduce fertilizer usage in China. The scope of the 10 year experiment is astounding. The researchers first conducted thousands of field experiments all over China to discover and validate best practices:

A total of 13,123 site years of field trials were conducted from 2005 to
2015 for the three crops (n=6,089 for maize, 3,300 for rice and 3,734 for wheat), with sites spread across all agro-ecological zones…Each field trial included two types of management: conventional farmers’ practice (control) and ISSM-based recommendations (treatment; developed specifically for a given area). The recommended practices were discussed with local experts and participating farmers. Adjustments were made when necessary. Finally, the agreed-upon management technologies were implemented in the fields by the farmer; the collaborators provided guidance on-site during key operations, such
as sowing, fertilization, irrigation and harvest. Campaign collaborators recorded fertilizer rate, pesticide and energy use, and calculated nutrient application rate. At maturity, grain yield and above ground biomass were sampled by the collaborators for plots with a size of 6m^2 for wheat and rice, and 10m^2 for maize. Plant samples were dried at 70 °C in a forced-draft oven to constant weight, and grain yield was standardized at 14% moisture for all crops.

With validated best practices in hand the researchers and tens of thousands of collaborators then fanned out across the country to convince farmers to adopt the best practices.

During the campaign, about 14,000 training workshops, 21,000 field days, and more than 6,000 site demonstrations were organized by campaign staff; more than 337,000 pamphlets were distributed….During the campaign, we also encountered barriers and experienced challenges.  For example, we observed that some farmers appeared indifferent during some  outreach events. We later learned that it was mainly, because they could not comprehend the scientific content that we were trying to deliver. We solved the problem by having local (county or township) agents acting as an on-site ‘interpreter’ in  ways that speaks/connects with those farmers.

This was amusing:

It is also worth noting that the interests of agribusinesses do not always align with those of our campaign staff. For example, one of our main strategies used in the campaign was to select a site (for example, a village) for a given area, establish the base with field demonstrations of ISSM-based practices, then attract and engage more farmers from the same as well as neighbouring villages, creating  a snowballing and lasting effect. But sometimes, our partners in the private sector were more interested in changing sites so as to reach more farmer-clients. Vigorous  debates and discussion ensued. Eventually, the private sector personnel conformed to our reasoned schemes while using the established sites as demonstrations for  visitors from other areas.

Outputs and inputs among the treatment and control farmers were then measured (here I would have liked more information about the randomization. A lot can go wrong or be mismeasured at this stage.).

Farmers conducted all field operations. Campaign collaborators and/or extension agents were responsible for information and data collection. Typically, 10–30 farmers were randomly selected per ISSM-adopting site; another group of randomly selected 10–30 farmers from a nearby village without ISSM intervention served as a control/comparison. From the selected pool of farmers (roughly 14,600 paired data points), information on key management practices were obtained through a questionnaire survey, including crop varieties, planting densities, planting dates, fertilizer rates and harvest dates. For some sites, grain yields were directly measured in the same way as the field trials (see ‘Field trials’) for the selected 10–30 farmers. Yield and nitrogen rate were then averaged for each site.

The results were impressive.

Aggregated 10-year data showed an overall yield improvement of 10.8–11.5% and a reduction in the use of nitrogen fertilizers of 14.7–18.1%, when comparing ISSM-based interventions and the prevailing practices of the farmers. This led to a net increase of 33 Mt grains and a decrease of 1.2 Mt nitrogen fertilizer use during the 10-year period, equivalent to US$12.2 billion.

The entire experiment cost on the order of $56 million and generating $12.2 billion dollars of increased output, not including any environmental gains.

As if this weren’t enough the researchers then surveyed over 8 million smallholder farmers in China to estimate how much output could increase if the intervention were fully scaled.

What’s especially encouraging about this project is that no new technologies, seeds or infrastructure was involved–just basic science and a tremendous outreach campaign. Moreover, since the campaign increased profits it may continue to generate gains in the future even without further intervention as the practices spread. Repeated interventions will be necessary as climate changes, however. Information technology may makes this easier. China can be intimidating.

Is war declining?

From Michael Mann:

For over 150 years liberal optimism has dominated theories of war and violence. It has been repeatedly argued that war and violence either are declining or will shortly decline. There have been exceptions, especially in Germany and more generally in the first half of the twentieth century, but there has been a recent revival of such optimism, especially in the work of Azar Gat, John Mueller, Joshua Goldstein, and Steven Pinker who all perceive a long-term decline in war and violence through history, speeding up in the post-1945 period. Critiquing Pinker’s statistics on war fatalities, I show that the overall pattern is not a decline in war, but substantial variation between periods and places. War has not declined and current trends are slightly in the opposite direction. The conventional view is that civil wars in the global South have largely replaced inter-state wars in the North, but this is misleading since there is major involvement in most civil wars by outside powers, including those of the North. There is more support for their view that homicide has declined in the long-term, at least in the North of the world (with the United States lagging somewhat). This is reinforced by technological improvements in long-distance weaponry and the two transformations have shifted war, especially in the North, from being “ferocious” to “callous” in character. This renders war less visible and less central to Northern culture, which has the deceptive appearance of being rather pacific. Viewed from the South the view has been bleaker both in the colonial period and today. Globally war and violence are not declining, but they are being transformed.

The pointer is from the excellent Kevin Lewis.

Ghana fact of the day

After a sluggish period, Ghana seems to be doing well again:

…Ghana is on track to make a remarkable claim for a country mired in poverty not long ago: It is likely to have one of the world’s fastest-growing economies this year, according to the World Bank, the African Development Bank, the International Monetary Fund and the Brookings Institution.

Its projected growth in 2018, between 8.3 and 8.9 percent, might outpace even India, with its booming tech sector, and Ethiopia, which over the last decade has been one of Africa’s fastest-growing economies thanks to expanding agricultural production and coffee exports.

According to the I.M.F.’s projections, only Bhutan, with a minuscule economy, and Libya, whose war-ravaged economy plunged in recent years, may have a higher rate of growth this year.

The danger is that commodities — oil and cocoa — are driving the boom.  Here is more from Tim McDonnell at the NYT.

The surprise vacation (markets in everything)

Companies like Magical Mystery Tours and the Vacation Hunt, both based in Washington, D.C., have made surprise vacations their specialty, while more traditionally oriented operations like Rustic Pathways, which focuses on teen travel, and London-based luxury outfitter Brown + Hudson have added mystery trips to their already robust lineups.

The company picks the destination and does all the work planning the trip:

So, how does a destination get chosen? Most American mystery travel companies, including Pack Up + Go, require clients to take a survey. When booking my trip, I was asked where I’d been recently, and where I’d be heading soon, so the company could avoid those places. I was also asked to select from a long checklist of interests and to write in additional comments. I didn’t request a warmer destination, though I easily could have.

Here is the full story from Matthew Kronsberg at the WSJ.

For the pointer I thank the excellent Samir Varma.

Saturday assorted links

1. Comic on signaling theory.

2. Will Wilkinson on why America is polarizing.

3. “Economies governed by former economics students grow faster than economies governed by leaders with other education backgrounds; a result which is most evident for presidents.”  Speculative, by the way.

4. Men differ more from women in personality in more developed cultures.

5. Harald Uhlig on North Korea.

6. Steve Francis practiced basketball shots with a high arc.

Why are antiques now so cheap?

Compared with the heyday of antiques collecting, prices for average pieces are now “80 percent off,” said Colin Stair, the owner of Stair Galleries auction house in Hudson, N.Y. “Your typical Georgian 18th century furniture, chests of drawers, tripod tables, Pembroke tables,” he noted, can all be had for a fraction of what they cost 15 to 20 years ago.

That is from Tim McKeough at the NYT, there is plenty more evidence in the article.  I can think of a few hypotheses:

1. eBay and the internet have increased supply more than demand.  It is much easier to sell an estate, or the contents of your attic, than before.  But the upward potential for demand in the market isn’t nearly as significant.  Some people say “well, I would in fact buy and collect antiques if I could get the right 18th century pieces at 40% their current values,” but many more people just aren’t interested at all.

2. The article also demonstrates that many buyers are refocusing their demands on newer pieces.  Our attitude toward the past may have changed in some fundamental way, with items before a certain date just not existing in most people’s aesthetic universes.  It’s a bit like how people collect Elvis memorabilia, or even just treat Elvis as less iconic than they used to.

For many people today, “an English antique represents something that is kind of sad and tired,” said Thad Hayes, a New York interior designer who has recently been emptying antiques-filled homes and designing new rooms with contemporary pieces for wealthy clients both young and old.

Contemporary design, he said, “represents something that’s a lot more optimistic and positive.”

3. Homes have changed: “More homes have open-concept, casual living spaces rather than formal dining rooms and studies, which reduces the need for stately mahogany dining tables, chairs and cabinets.”

4. The aesthetic of the internet itself has pushed people away from “old and musty.”  Just look at the kind of images you see on Instagram.

What else?

The stochastically best books to read on Europe?

What exactly does that title mean?  It means they are your suggestions, and I kind of/sort of trust some of you, and I didn’t want to throw in all of my opinions.  At the very least, I know a lot of these to be good, but I am reporting these recommendations from a distance.  These are pulled from the comments section on my earlier post on the best book to read about each country, with my recommendations.  So here are your contributions for Europe:

Roy Foster on Ireland.

James Hawes has just published what has been reviewed as an excellent short history of Germany. His previous book on Anglo-German relations before WW1 felt like a fresh and convincing re-interpretation of what is very well-trodden ground in political/diplomatic history.

Jonathan Steinberg’s “Why Switzerland”

For Poland, yes, Norman Davies’ God’s Playground is the best book in English.

Poland: A History by Zamoyski is concise, but probably too concise for someone not already somewhat familiar with Polish history.

For Scandinavia – The Almost Nearly Perfect People: Behind the Myth of the Scandinavian Utopia by Michael Booth.

One of the best books for understanding any nation, ignoring much of the history and most of the politics, is ‘Watching the English’ by Kate Fox.

Is it possible the best book for “getting” France is the Larousse Gastronomique? Because I already have that one also.

Czech Republic – “Gottland” by Mariusz Szczygiel. A description of the Czechs by a Pole. Will give you a lot of insight into the Czech character. I suppose a lot of Czechs will tell you The Good Soldier Swejk is the best book about Czechs, but that is self-serving.

Czechoslovakia: The State That Failed by Mary Heimann is also very good.

On Bulgaria: “Border” by Kapka Kassabova

The Basque History of the World: The Story of a Nation” by Mark Kurlansky
Simon Schama’s A History Of Britain

On Romania: “Along the Enchanted Way: A Story of Love and Life in Romania” by William Blacker or perhaps Robert D. Kaplan’s “In Europe’s Shadow”. I also liked Kaplan’s portrait of Oman in “Monsoon”.

My choice would be Iberia by Michener.

The Bible in Spain by George Borrow. Very old, very good.

Patrick Leigh Fermor on Greece, Crete – Mani…etc.

Netherlands: The Low Sky: Understanding the Dutch by Han van der Horst (De lage hemel in the original)

Netherlands, fun read, although a bit dated now (written 20 years ago?): The Undutchables by Colin White and Laurie Boucke

There are two good and readable historical books on Amsterdam (and, by extension, The Netherlands)—one by Russell Shorto and the other by Geert Mak. Both are available in English. A bit more highbrow than the other books mentioned.

On Spanish recent history I enjoyed Ghosts of Spain by Giles Tremlett. Specifically on Barcelona I’d recommend Robert Hughes’ Barcelona. Inside into Catalan physcho.

On Scandinavia: The almost nearly perfect people by Michael Booth

On Eastern Europe – Bloodlands by Timothy Snyder.

On the history of Russia you can’t beat ‘Internal Colonisation’ by Alexander Etkind.

And on English – wonderful AA Gill, RIP, ‘Angry Island: Hunting the English’

Spain – John Crow – Spain the Root and the Flower, Italy – Dark heart of Italy by Tobias Jones. Not sure these are the best, but they give an interesting psychological insight for the occasional traveller

Russia – big country so 3 books, not histories – War and Peace (Tolstoy), Life and Fate (Vasily Grossman), Everything is possible (Pomerantsev)…

Enjoy!  Here are previous installments in the series.