Category: Current Affairs
Will AI blur the difference between private and public sectors?
…there are incredibly powerful non-state actors who are also competing furiously to develop this technology. All of the 7 most important technology companies in the world–Google, Apple, Amazon, Facebook, Alibaba, Tencent, Baidu–are making huge investments in AI, from low level frameworks and silicon to consumer products. It goes without saying that their expertise in machine learning leads any state actor at the moment.
As the applications of machine learning grow, the interactions between these companies and different nation states will grow in complexity. Consider for example road transportation, where we are gradually moving towards on demand, autonomous cars. This will increasingly blur the line between publicly funded mass transportation (e.g. a bus) and private transport (a shared Uber). If this leads to a new natural monopoly in road transportation should it be managed by the state (e.g. the call in London for “Khan’s Cars”) or by a British company, or by a multinational company like Uber?
As Mariana Mazzucato outlined in her fantastic book The Entrepreneurial State, states have historically played a crucial role in underwriting long term, high risk research in science and technology by funding either academic research or the military. These technologies are often then commercialised by private companies. With the rise of visionary and wealthy technology companies like Google we are seeing more high risk long term research being funded by the private sector. DeepMind is a prime example of this. This creates tension when the interests of a private company like Google and a state are not aligned. An example of this is the recent interactions between Google and the Pentagon where over 4000 Google employees protested against Google’s participation in “warfare technologies” and as a result Google decided to not renew its contract with the Pentagon. This is a rapidly evolving topic. Only a week earlier Sergey Brin had said that “he understood the controversy and had discussed the matter extensively with Mr. Page and Mr. Pichai. However, he said he thought that it was better for peace if the world’s militaries were intertwined with international organizations like Google rather than working solely with nationalistic defense contractors”.
Here is more of interest from Ian Hogarth, via…whoever it was that sent it to me!
Which technological advances have improved the working of autocracy?
That is the topic of my latest Bloomberg column, here is one excerpt:
“What have been the really major advances of the past 20 years?” is one of the most common debated questions in my circles. The smartphone is probably nominated most often, while Google, Facebook and fracking have their advocates too. Yet we hardly ever talk about one of the most important developments, perhaps because it raises uncomfortable political issues: the governance technologies and strategies of authoritarian regimes have become much more efficient…
The big innovation in authoritarian governance has been this: subsequent autocratic leaders, most of all in China, have found ways of both liberalizing and staying in power. The good news is that people living under authoritarian governments have much, much better lives than before. The corresponding bad news is that autocracy works better than it used to and thus it is more popular and probably also more enduring. The notion that autocratic government would fade away, either in practice or as an ideological competitor to Western liberalism, simply isn’t tenable any more…
A second development was when authoritarian leaders realized that absolute prohibitions on free speech were counterproductive, and they learned how to manage an intermediate solution. Allowing partial speech rights is useful as a safety valve, it allows major dissidents to be identified and monitored, and absolute speech prohibitions tended to wreck the economy and discourage foreign investment, leading to unpopularity of the government. At the same time, an autocratic government could come down hard on the truly threatening ideas when needed.
Scientific public opinion polling has been another advance in authoritarian states. In 1987, the Economic System Reform Institute of China conducted the first Chinese public opinion survey, a breakthrough event. Under Chairman Mao in contrast, the incentive was to report only the good news. In the 1990s, however, Chinese public opinion surveys boomed and also became much more scientific.
There is much more at the link, one of my more interesting columns as of late.
Why consume the most recent news?
Here is another left-over question from my recent talk:
How do you think about when it makes sense for to consume the most-recent news, in light of Robin Hanson’s “news isn’t about info”? How would you advise the rest of us?
I consume the news avidly for (at least) these reasons:
1. For professional reasons, I am required to do so. That said, I am happy to note the endogeneity of that state of affairs. Consuming the news is fun, though in a pinch more sports, games, and the arts could serve much of the same role.
2. I actually care what is happening.
3. Consuming the news is one of the best ways of testing your views about the past. We are always revaluing what we thought we knew, in light of new data. Brexit teaches us that the UK was never quite so well integrated into the EU. The election of Trump may imply that certain late 19th century strands of American politics are enduring, and the evolution of the racial income gap will induce us to reassess various policies of the last few decades.
Under this theory, reading a lot of history books should raise the return to following the news. For most people, they haven’t read so many books and at the margin they need more books rather than more news. In this sense, following the news doesn’t make intellectual sense for most people, though they may need it for social bonding, signaling, and conversation purposes.
I would stress the concomitant point that following the news does not make one a much better predictor of the future, if at all. It may even cause people to overweight the most recent trends, due to availability and recency bias.
4. I also use the news to make history more interesting to me. It is easier to get “wrapped up” in the news, if only because of the social support and the element of dramatic suspense. If somehow the Balkans no longer existed, I would find it hard to wish to understand that “…the medieval Serbian Orthodox Church had established a new see at Pec in Kosovo in 1297…” As it stands, my interest in that event is sufficiently intense, and it remains important for understanding the current day.
5. It is perhaps addictive that the news comes every day. But that is a useful discipline. If you follow the news, you will work at it every day, more or less. Better those compound returns than to do something else once every three months and a half.
In essence, the news is a good, cheap trick for getting yourself to care more about things you should care about anyway, but maybe don’t.
*Divided: Why We’re Living in an Age of Walls*
That is the new book by Tim Marshall, yes Trump and Israel and the like, but it goes much further than that. Here is one excerpt:
Since 1971, Assam’s population has more than doubled, from 14.6 million to over 30 million, much of which is due to illegal immigration. Hindu nationalists have argued that the area might have a Muslim majority by 2060. In 2015 there were 19 million Hindus and 11 million Muslims, nine of the twenty-seven districts being Muslim majority. Equally importantly, the 2017 census showed that people who are ethnically Assamese are now a minority in the state as a whole, and as people continue to arrive their proportions will continue to drop.
This is a depressing but thought-provoking book. Bangladesh, by the way, is smaller than the state of Florida, but has 165 million people. And I had not known there are about 800,000 Nigerians in South Africa. You can order the book here.
Asian-American admissions at Harvard
Here is basic NYT coverage of the case:
University officials did concede that its 2013 internal review found that if Harvard considered only academic achievement, the Asian-American share of the class would rise to 43 percent from the actual 19 percent.
Here is the plaintiff’s brief by Peter S. Arcidiacono. Here is David Card’s brief in defense of Harvard and Asian-American admissions. Here is Arcidiacono’s response to Card.
Gabriel Rossman noted on Twitter: “Once you control for lacrosse, founding an NGO in high school, legacy status, alumni evaluation of personality, woke personal essays, and a 23&me test for EDAR, there’s no effect”
My take is simple. Harvard is risk-averse with respect to the stream of future donations, as are many other schools. Asian-American admissions don’t have the same donating track record as the white students traditionally cultivated by Harvard and other top universities. Either Asian-Americans may seek out “diaspora philanthropy,” or they simply may have a more cynical attitude toward top institutions that they basically have never had any control over.
Furthermore, there is a common fear — repugnant to me I should add — that if a student body becomes “too Asian,” many white students will be less interested in going there. I taught at UC Irvine for several years and found it to be a delightful experience, but this is exactly what many schools are afraid of (the UCI student body is disproportionately Asian, and the honors class I taught in my first year had only one non-Asian student in it).
And so they come up with every excuse possible — sometimes cemented in by self-deception — for maintaining a “balanced” student body.
It is incorrect to call it “racism,” but it is non-meritocratic and we should move away from those attitudes as quickly as possible.
In related news, the University of Chicago is moving away from the use of SAT scores in admissions. The cynical might suggest this is so they are more insulated from potential lawsuits and also so they have more discretion in admissions. If Chicago feels the need to do this, perhaps the system really is buckling under the strain of all these outside pressures.
Nonetheless, I predict ultimately the status quo will not change very much. I just don’t see a strong enough popular or judicial constituency for righting the wrongs done to Asian-Americans. Some kind of partial concession will be made, various terms and standards will be somewhat redefined, and we’ll be back to “rinse and repeat.” Meritocracy: can’t live with it, can’t live without it.
I am pleased to report that none of this tomfoolery goes on at my home institution, which is highly and truly diverse.
Yale Politic interview with me
I enjoyed this one, lots of real questions from Eric Wallach, not “tell us about your book” and the usual snoozefest. Here is one bit:
So you like the idea of pardons– how do you work through that one?
I don’t even firmly believe that punishment is justified morally. Maybe it’s necessary, maybe you just can’t do without it. But the mere fact that someone has wronged another, I don’t think causes them to forfeit their rights in the way that was claimed in classic, early modern political philosophy. Once you think wrongdoers still have their human rights, on what grounds do you punish them? Could be that you simply have to– either the public won’t accept another option and they would overthrow your non-punishment regime and bring in fascism, and something with a lot more punishment would come about.
I get that– I’m not saying you can just toss away the keys to all these jails. But insofar as you have options of not punishing people – who in the cases I’ve read about it seems they’re not going to go out there and continue their serial killing sprees – I think we just simply ought not to punish them. Martha Stewart, again, that seems to me a very clear case. Undo the wrong. If I were a president, I’d consider just only pardoning people and then resigning. I know I couldn’t get away with it forever, but it’s one way to think about the job.
There are other points of interest, new and interesting throughout.
The North Korean summit and deal
Many of you have asked what I think, so here goes:
1. There is a secret (and unenforceable) deal beneath what is reported. You may think this is good or bad, but for heaven’s sake don’t just be judging the press release.
2. If they didn’t actually agree to anything, that is fine.
3. I am reading so much yelping about how Trump “legitimized” Kim. The status quo ex ante simply was terrible, and there is no reason to think this change is for the worse. Trump’s great “virtue” in this regard was simply to be some mix of ignorant/disrespectful of the prior “expert consensus” and approach the problem afresh with a rather direct transactional and person-centered, personality-centered mentality.
4. As I tweeted: “Isn’t the whole point of the “deal” just to make them go visit Singapore? The real spectacle is not always where you are looking. And I hope someone brought them to the right chili crab place.”
The goal is to show the North Korean leadership there is a better way than playing the Nuclear Hermit Kingdom game. We won’t know for some time whether this has succeeded. Here is good FT coverage on this point. There are in fact numerous signs that the North Koreans are considering serious reforms. Of course those could be a feint, but the probabilities are rising in a favorable direction. Economic cooperation with South Korea is increasing at an astonishing pace.
5. The chance that North Korea someday becomes an unruly version of an American client state has gone up. The chance of a kind of faux, “on paper” Korean reunification has gone up too.
6. No, North Korea isn’t giving up its nuclear weapons. The more important question is to what extent they will use those weapons in the future to check China.
7. How is it that Dennis Rodman played in only two All-Star games?
8. In expected value terms, this is the biggest triumph of the Trump presidency. Most of all, however, you should be agnostic. The negative commentary I am seeing is mostly sour grapes, misplaced frustration, and it is weak in the quality of its argumentation. Here is one of Trump’s better tweets.
The Importance of Institutions
In honor of President Trump’s meeting with Supreme Leader Kim Jong Un it’s time to reup The Importance of Institutions:
Washington Metro Qatar markets in everything
Metro significantly relaxed its policies on extended hours for the Washington Capitals’ run to the Stanley Cup Final, including extending service for Thursday night’s series win without ever planning for any cash to change hands, WTOP has learned.
Since last summer, Metro has required a $100,000 deposit for each additional hour of service, and Metro suggested Wednesday that the Capitals’ parent company, Monumental Sports and Entertainment, would cover those costs for Thursday night’s game.
In fact, Thursday night’s extended service was part of a trade between the Caps and Metro that Metro valued at $100,000, Metro spokesman Dan Stessel said in an email…
Revised requirements issued last year normally call for the $100,000 deposit two weeks ahead of an event for each extra hour of service. Instead, Metro is billing each of the other groups that agreed to pay for the extended service for Capitals playoff games after the fact, Stessel said…
The bills being sent to those other groups — Qatar (via the Downtown BID), Comcast and Uber — will already include the discount for any fares paid during extended hours of service.
Here is the bizarre story, via Bruce Arthur. For those of you who don’t get the joke, the D.C. Metro system shuts down too early relative to when many sporting events are likely to end.
My take on why Singapore works so well
That is the topic of my new Bloomberg column, of course I am considering only one small piece of a larger puzzle. Here is one bit:
I view the development of Singaporean civil service culture as one of the world’s great managerial and political success stories of the last 50 years, though it remains understudied and underdiscussed in the West.
Singapore also mixes many of the virtues of both small and big government. The high quality of the civil service means the country gets “good government,” which pleases many liberals and progressives. The high quality of the decision-making means Singapore often looks to market incentives – congestion pricing for the roads is one example of many – which pleases conservatives and libertarians…
Is Singapore a small government or a big government country? The correct answer is both. Government spending is about 17 percent of GDP, which makes it look small and helps hold down taxes, which is good for business and productivity. (And there are no additional state and local governments.) But if you look at stocks rather than flows, the government owns shares in many critical Singapore businesses, plus it de facto controls lucrative sovereign wealth funds. The government claims ownership of the land, although it allows for active markets for transferring rights of use. All of these resources give the government the ability and credibility to get things done.
I even take on the chewing gum caricature…do read the whole thing.
Income inequality has stabilized as of late
But from 2007 through 2014, the figure stabilized. Looking at market income, inequality increased by only 3 percent. Once you add in cash payments and in-kind transfers from government safety net programs, inequality actually fell over this period.
That is from Michael Strain at Bloomberg.
MAGA?
US exports increased 14.4 percent from YTD April 2016 to YTD April 2018, from $725.8 billion to $830.5 billion.
US imports increased 16.5 percent from YTD April 2016 to YTD April 2018, from $886.2 billion to $1,032.3 billion.
Here is the source, via James Hohman. You don’t have to credit Trump with much if any of that, the broader point is that, as I argued yesterday, the age of trade is hardly over.
Can privatization solve Ethiopia’s problems?
Here is a new paper by Ermyas Amelga, excerpt:
Privatization will not just solve the GTP’s financing problem, a worthy enough accomplishment in its self, but would also help address macroeconomic problems. These include funding/driving aggregate demand, financing aggregate investment, solving the foreign exchange shortage, rebalancing the balance of payments, dampening inflation and reviving general economic activity. May seem improbable but its not.
In the context of the huge financing needs to fulfill the plans under the GTP, privatization represents an excellent means of cashing out on the accumulated net worth of Ethiopia’s SOE’s. Indeed, there is arguably no more justifiable use of this accumulated net worth than spending it on the GTP that the government itself believes is worthy of supreme sacrifice from all corners of society.
This paper is a very good introduction to both Ethiopia’s corporate problems and also their fiscal problems. Privatization is not entirely fashionable these days, but the current situation in Ethiopia presents perhaps the strongest case for it. So if your initial reaction is “Ah privatization, that is the failed strategy that China rightly rejected”…you are making exactly the same mistake made by many privatization proponents in the 1990s. Ethiopia is starved for revenue, foreign exchange, and the country needs more private sector involvement/
And lo and behold, Ethiopia has in fact just announced a major plan to privatize many parts of some of the major state-owned companies.
By the way, I wish to thank Chris Blattman for an introduction to Ermyas and also for valuable ideas and information related to Ethiopia.
Brutalism in Singapore
Is this article evidence that we (I?) are living in a simulation? Or did the editors of The Economist place it as an Easter Egg for me?:
The building, which was once called a “vertical slum” by a Singaporean legislator, is a densely packed mix of residential and commercial units. Along with People’s Park in Chinatown (pictured), which has been praised by the Dutch architect Rem Koolhaas, it is among a handful of Brutalist buildings that were built in a surge of architectural confidence after the country became independent in 1965. They are particularly adored by those who love concrete, as well as bold and wacky colours.
Modernist buffs have started to fret that many of these Brutalist buildings will soon be gone. In February one of them, Pearl Bank, once the highest residential tower in Singapore, was sold for S$728m ($544m) to CapitaLand, one of Asia’s largest real-estate developers. The company plans to demolish the yellow horseshoe structure and build a “high-rise residential development” of 800 flats in its place.
Here is the full story, here is a related article from Malay Mail.
Will Trumpian foreign policy prove permanent?
I see several elements of Trumpian foreign policy, noting this list is far from exhaustive:
1. Little if any emphasis on human rights.
2. There is no particular tendency to prefer to deal with the democracies, if anything the contrary (it is easier to do “funny” opportunistic deals with the autocrats, plus democratic citizens, especially in Western Europe, may not want their leaders to do deals with Trump).
3. Problems can pop up all over the place, there is nothing special about Europe, and Europe is irrelevant to many of the most important geopolitical struggles.
4. Allies, if that word even can be used, pop up on an opportunistic basis and then are rapidly discarded if need be, with no expectations of feelings really being hurt either. Period-by-period maximization is more common than credibility or investing in relationships.
5. The doctrine of “maximum pressure.” Trump has been trying this with North Korea, and to a lesser extent with China, although with inconsistencies in both cases. This consists of dropping a lot of the diplomatic pretense and simply declaring that the U.S. will do everything possible to bring about some outcome, and then making some moves in that direction.
6. Not worrying as much about the kind of diplomatic processes traditionally imposed by the State Department. #2, #4, and #5 above often are more consistent with a kind of direct transactionalism than with the bureaucratization of foreign policy.
I now believe that, for better or worse, #1-6 are likely to survive in American foreign policy, with or without the reelection of Donald Trump.