Digest: 1 Sept 2013

Abstract

Machines are on the way to keeping humans as pets, just as a human might keep a monkey, as a result of developments in computing technology. — The National Flood Insurance Program has had limited success, as evidenced by its current $25 billion debt but with increasing storms, insurance subsidies are being phased out and premiums are thus rising on high risk homes causing the values of homes to plunge. – Economic bubbles can have benefits, even if the particular market itself fails the irrational investment in it prior to failure can give rise to developments that might not have taken place in the absence of that irrational expenditure. Professionals are seeking a respite from the world of modern conventional work in favor of the benefits to be had from working the land. – We should embrace a slower more considered approach to our business activities rather than follow endless advice to be more busy, this is particularly important where creative people are concerned as they are the drivers of innovative growth. – A new engine that runs on a mixture of power derived from natural gas, electricity and diesel, is highly efficient relative to pre-existing car engine technology, and is likely to be less costly than plug-in hybrids. – The NSA training manuals demonstrate the program’s ability to wiretap anyone with just a personal email, precisely what US officials have denied the NSA could do. – The total US intelligence budget is higher than the entire military budgets of the United Kingdom, Japan, and France, who, respectively have the fourth- through sixth-largest military budgets in the world. Business people become too influential in government as views developed that business people might be better at generating growth than government bureaucracies. – Facebook uses facial recognition to assist in tagging people in photographs that people have posted, but development of the technology continues and Facebook acknowledges that it might expand its use of the technology in the future. — Surveillance in the workplace has a remarkable effect on employee productivity, and a relatively small effect on theft during sales transactions.

Highlight

(view all)

In Neuromorphic Computing: The Machine of a New Soul, The Economist discusses the development of computing technology designed to mimic the human brain. Developers of this technology hope that they will achieve both better functioning computers and a better understanding of the brain. They wish to instill in computers three traits of the brain in particular – the ability to run on low amounts of power, the ability to withstand and overcome faults, and the ability to learn and change spontaneously.  Efforts are being made on both sides of the Atlantic, and while the most advanced programs are in Europe the US is not far behind.  One potential repercussion of these computing developments is particularly noteworthy – if the scientists succeed, there is the possibility that machines will develop to have higher thinking capacities than human beings, to the extent that they may be able, eventually, to keep human beings as pets – just as a human might keep a monkey.

Economic

(view all)

In The New Flood Insurance Disaster, Nicholas Pinter (for The New York Times) discusses the National Flood Insurance Program and its effect on policyholding homeowners in high risk coastal areas.  Pinter argues that the Program has had limited success, as evidenced at least by its current $25 billion debt. With increasing storms, insurance subsidies are being phased out and premiums are thus in effect rising on high risk homes. In addition, the rising insurance costs are causing the values of homes to plunge.  While these rates add fiscal discipline and political backbone to the Program, Pinter argues, they are placing too much of the burden of the debt on policyholders.  He says that reforms need to be more closely tied to a compassion for those living on flood-prone lands – a pathway should be provided to help homeowners move to less risky geographic areas. Editor’s Consideration: Taking into account the longstanding societal choice to subsidize the ongoing and increasing costs of people and businesses in high risk coastal areas (thus effectively allowing them to externalise these costs to the wider community) certainly it is high time that a shift was made to localize the costs in those who carry the risks.  But the question of how to achieve such an end is highly complicated – when a person or business has come to rely on subsidies, their economic situation by definition is designed with that subsidy taken into account.  Some will be profitable enough to bear the cost of the removal of the subsidy, but the vast majority may not.  The reality of the upheaval cannot be denied by politicians who rely on businesses and voters to maintain them in their position.  The correcting of the market distortion that exists in these high risk coastal areas is necessary, but how should the costs be distributed?

In The Next Economic Bubble, William H. Janeway (for Foreign Affairs) discusses the history of economic bubbles, the role that state investment has played in those bubbles, and how we may use that understanding to consider where we may expect the next bubble to arise.  He addresses the rarely considered point that the course of economic bubbles can have benefits – even if the particular market itself fails the irrational investment in it prior to failure can give rise to developments that might not have taken place in the absence of that irrational expenditure. Currently, the low carbon economy is the growing field of investment and expenditure in which we may expect bubbles to occur – indeed micro-bubbles may even be said to have taken place in the course of the development of solar technology and electric cars, and these bubbles have paved the way for fracking and increasing numbers of electric car charging stations.  Editor’s consideration: When a substantial shift of thinking or approach is to take place, to what extent do people or businesses generally require an incentive (whether internal or external) towards that shift? If it may be said that habit or protection of pre-existing norms can often cause inertia in action towards a given ultimately preferential change, then it is perhaps interesting to consider the role that an economic bubble may play as being similar to the role a storm may play along a coastline (see above article regarding Flood Insurance).  Economic bubbles take place in the event of a relatively systemic over-valuation of a marketable good – the hastening emotive effect of the overall incidence can it seems be enough to spark movement in productive directions despite initial failure.  But the nature of the effect must play a role in directions later pursued – should initial failures, such as in solar markets, necessarily mean a return to or a continuation of methods with a nature which solar, for example, would do well to replace?

In The US Professionals Quitting the Rat Race to Become Farmers, Karen Weintraub (for BBC News) discusses how, in some places at least, professionals are seeking a respite from the world of modern conventional work in favor of the benefits to be had from working the land.  It’s not necessarily an easy path, and many must complement their income from farming with income from other ventures more closely related to their professional speciality.  However, it does seem that a movement is developing, and those that Weintraub interviews seem perfectly content to replace economic riches with the riches of being outside and eating and selling the vegetables that they themselves grew.  Editor’s consideration: Could this manifestation of a slower, more considered, more holistic living be an example of the same enlightened thinking provided in the following article, In Praise of Laziness - the need to stop working ever harder on ever more mundane and irrelevant matters, and to instead slow down and consider not only what we are doing but where we are going?

In In Praise of Laziness, Schumpeter (for The Economist) discusses the dichotomy between endless advice to be more busy and its opposite – the suggestion that instead of increasing busy-ness we should embrace a slower more considered approach to our business activities.  By diminishing distracting insubstantial activity we may allow this more considered approach, and this is particularly important where creative people are concerned, who are after all at the heart of the modern economy – they are the drivers of innovative growth.  Editor’s consideration: Schumpeter points out that top managers are best concerned with strategy rather than operations – “whether the company is doing the right thing rather than whether it is sticking to its plans”.  By being distracted with micro considerations managers are incapable of fully considering the overall direction, the overall result, of the endeavors of the managed business. Should this same construct not be applied at all levels of society, so that at every level within a business there is the opportunity for unchallenged consideration? Is this not this type of overall awareness that a democracy requires for its proper functioning? But what is the result of this course? Consider the below article on the effects of surveillance on behavior in the workplace – the evidence that when employees are being watched they are more productive. The need to suggest that people working in high responsibility jobs should have time to think might suggest that something is structurally wrong, just as the need to surveil employees to keep them working might also suggest something is structurally wrong.

In Swiss Researchers Make an 80-mpg Hybrid, Kevin Bullis (for MIT Technology Review) discusses a new approach being made to hybrid-powered cars.  Researchers have developed a new engine that runs on a mixture of power derived from natural gas, electricity, and diesel.  The result is highly efficient relative to pre-existing car engine technology, and is likely to be less costly than plug-in hybrids.

Political

(view all)

In XKeyscore: NSA Tool Collects ‘Nearly Everything a User Does on the Internet’, Glenn Greenwald (for The Guardian) discusses the NSA program “that allows analysts to search with no prior authorization through vast databases containing emails, online chats and the browsing histories of millions of individuals…”. While US officials have denied the suggestion that the NSA could wiretap anyone with just a personal email, XKeyscore training manuals boast of the program’s ability to do, well, more or less precisely that.

In NSA Fears There are 3,999 More Snowdens, Elias Groll (for Foreign Policy) discusses the risk of analysts like Edward Snowden releasing sensitive information, the focus on signals intelligence over human-sourced intelligence, the gaps in US intelligence, the problem of digesting the huge amount of data collected by the NSA, and the current size of the US intelligence apparatus. One statistic is eye-opening – the total US intelligence budget is thought to be approximately $75.6 billion, ”That figure is higher than the entire military budgets of the United Kingdom, Japan, and France, who, respectively have the fourth- through sixth-largest military budgets in the world. Only China and Russia spend more on their militaries than the United States spends on its intelligence gathering.”

In Cronies and Capitols, Schumpeter (for The Economist) discusses how business people have become too influential in government. In the 20th century, the state, rather than business, was likely to win the greater influence in national affairs.  This has shifted as views have developed that business people might be better at generating growth than government bureaucracies. Powerful business people have the greatest opportunity to influence states in the developing world, and that world is making up a larger and larger percentage of the global economy.  But crony capitalism takes place in the developed world as well largely through lobbying, and in the US is set to increase with the Citizens United decision in the Supreme Court and with the consistent placing of industry executives in key positions in government.

Social

(view all)

In Facebook Considers Adding Profile Photos to Facial Recognition, Alexei Oreskovic (for Reuters) discusses developments in Facebook’s use of user profile photographs. Currently Facebook uses facial recognition to assist in tagging people in photographs that people have posted. While Facebook’s current use is relatively limited, its development of the technology continues, and it acknowledges that it might expand its use of the technology in the future. Facial recognition technology sparks concerns amongst privacy advocates and some government officials – the idea of databases existing that include records of all of our telephone calls and emails has already caused something of a public uproar. Adding to those databases a system that can spot and recognize a face, fed by photographs posted to Facebook (or by drivers’ license photograph databases), would seem to further exacerbate the issue.

In How Surveillance Changes Behavior, Steve Lohr (for The New York Times) discusses a research study into the problems of employee theft and low productivity in the restaurant industry, and the effects on employee behavior of surveillance in these settings.  The study found a relatively small savings as a result of anti-theft alerts on sales transactions, but a remarkable effect on employee productivity as a result of the monitoring software.  The monitoring software had the effect of concentrated shifting of effort towards greater productivity.