Archive for the ‘Finance’ Category

Big Data

March 26, 2018

I’ve written many a blog on airplanes, but this is the first time I’m doing one online.

The turbulence is causing a stir as we hit the south coast of Turkey. In a few minutes we’ll be flying over northern Syria, and I’m keeping a close eye on the map.

Wifi in the sky is just another example of global comms—it’s a satellite feed, of course, and large email attachments go the way of Malaysian Flight 370, but for a wee blog it works just fine.

Night has fallen over the eastern Med, and I spare a thought for the poor people below, caught up in a proxy world war, while Trump fends off claims by porn actresses and Playboy centerfolds.

But today’s article is on Big Data, capitals and all. First off, full disclosure—I’m a social media dinosaur. I speak out against Facebook many a time, and Peter Wibaux would never hold an account—in any case, the platform lost its mojo when it became a shadow site for parents to track their kids.

I find it all pathetic, as kids swiftly shifted to Instagram, and parents share lonely, pathetic photos of their latest dinner party banalities, and pretend they lead an interesting life. So I welcomed a few suggestions on alternatives to F-Book.

Apart from the trivia aspect, my fundamental gripe is lack of privacy—I suppose growing up under the iron fist of the Portuguese dictator Salazar left me with a fundamental and permanent dislike for data theft, particularly on a grand scale—I’m pretty sure people who suffered the Stasi or the Savak feel the same way.

Somewheres East of Suez once more. Afrin, where the Turks recently pounded the Kurds, is just south of here.

Of course, the fact that I’m not on FaceBook doesn’t mean I’m not on FaceBook—and the same stilted logic applies to GMail, which I also take a pass on. Truth is, as long as you correspond with anyone on these platforms, or have your picture taken in their company, you’re trapped.

Practically the entire US electorate found out about this last week, when Cambridge Analytica turned turtle after a whistle blower decided to tell the world what they did for the Trump campaign.

The key to it all was the colossal FaceBook database, and the way in was through a personality evaluation app aimed at the insecure FB neurotics, which assessed their OCEAN score.

What’s OCEAN? Openness, Conscientiousness, Extroversion, Agreeableness, and Neuroticism. Who makes this shit up? Maybe it should be: Only Cretins Ever Auto-evaluate Neurosis. Because Neuroticism isn’t even a word!

The story of Cambridge Analytica beats any conspiracy theory. Robert Mercer, a US right-wing hedge fund billionaire, provided the seed capital to spawn the UK company—Mercer is a major contributor to Breitbart News, and created the ‘Make America Nº1’ PAC to elect Trump.

His daughter Rebekah (gotta love that ‘h’) sat on the company’s board, and Analytica’s vice-president was none other that Saturday Night Live’s grim reaper, Steve Bannon.

The company has now re-invented itself as Emerdata, with Mercer money again doing the rounds, and all the usual suspects back on the bus—given Analytica’s track record, lots of UK citizens are reaching beyond the Trump election and wondering what went on with Brexit.

The thing about Big Data? You can drop FaceBook right now but you can never shake your shadow.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

 

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Being for the Benefit of Mister Mogg

February 17, 2018

The younger Mogg is a hard-line British conservative politician, and a favorite butt of the UK satirical magazine Private Eye. This week, they honor him on the cover.

Jacob Rees-Mogg, retro-brit, as seen by Private Eye magazine.

Mogg senior, however, is currently the object of my attentions. The Guardian newspaper carried an article this week on New Zealand—normally that wouldn’t get my attention, and it was a very long-winded piece—but it focuses on the likes of Peter Thiel.

Thiel is a Silicon Valley billionaire—two orders of magnitude below Jeff Bezos, but still worth a respectable 2.5 billion dollars. There’s nothing unusual about tech entrepreneurs being wealthy, but Thiel is unusual because he supports Trump.

There’s a group of extremely wealthy folks who believe the apocalypse may be around the corner, and that the safest place to view it from is… New Zealand. Apart from the mystical vapors of Tolkien, the attraction appears to be its distance from… well, anywhere, and the fact that there’s plenty of clean air and water.

Some of these beliefs are fruit of a book called Sovereign Individual: How to Survive and Thrive During the Collapse of the Welfare State, written by James Dale Davidson and William Rees-Mogg, and published in 1997. The late Mogg was editor of The Times of London, and is the better-known of the two names.

I don’t like basing articles on reviews, so I did my best to locate a copy of the book. You can get it from Amazon in analog, but I wanted instant digital gratification—it didn’t prove easy. I browsed the deep web, using esoteric tools like duckduckgo.com, but I couldn’t access the real deal.

Like the Guardian author, I don’t plan to enrich the Mogg estate, so I’ll have to wing it. Mogg Major was apparently one of the first to predict the arrival of bitcoin, and deduced that this would free capital from taxation, since it would make it impossible for governments to trace income.

If I had a bitcoin (sing to the tune of If I Were a Rich Man) I could buy the book. At today’s rate it would cost me ten bucks and change.

The authors also suggest that democratic governments currently force folks to pay for health and education—the shame of it!

In this dystopian vision, sovereign individuals and corporations replace ineffectual democracies, and an entire new world order is created. The digital paradigm is at the center of this acid trip, and for those who are buying up apocalypse-free land in faraway places, there’s yet another hallucination—seasteading.

Seasteading looks like upmarket island living to me—a trip on a concrete petal (image from the Huffington Post).

The word is a little weird, which matches the concept itself—man-made islands where humans… live differently.

The Seasteading Institute empowers people to build floating startup societies with innovative governance models

The concept merits a book—written by someone aptly named Joe Quirk. French Polynesia seems to be on board, if you excuse the pun, and these man-made islands will of course be resilient to climate change, because—duh—they float.

The institute’s head, who does sound like a bit of a nutter, preaches the seasteading gospel.

Our venture is poised to launch a seasteading industry that will provide environmental resiliency to the millions of people threatened by rising sea levels, provide economic opportunities to people in remote and economically deprived environments, and provide humanity with new opportunities for organizing societies and governments.

Ambitious? Moi? Steady on, chaps…

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

 

Precarius

January 28, 2018

In the original Latin, the word was related to favor. Either to depend on favor, or to be given as a favor. It’s a term I’ve heard all my adult life—in Portugal, and assuredly elsewhere, it has a clear connotation with employment—there’s even an NGO by that name.

The end of precarious labor is one of the banners of the left—the fight for permanence, where a job has continuity, and a worker can plan a life based on a steady income stream.

In the developed world, this ‘jobs for life’ model ended with the baby boomers—the very early baby boomers, at that. Post-austerity in Southern Europe, it became obvious that the pension model was similarly dead.

There’s a certain irony here, because jobs for life are what we have now—a nuanced version where retirement age steadily increases, and you work until you’re physically unable to carry on. In both halves of the hourglass, but particularly in the McDonald’s half, you shift (excuse the pun) into each new ‘job’ until you keel over.

For John and Jane, the golden handshake (or watch), the golf links, the Martini-modulated retirement plan, are a bygone. Current baby boomers and millennials are under no illusion: precarious is the new normal.

A recent study in the U.K. entitled ‘thriving, striving, or just about surviving’, reports that seventy percent of the country’s population is practically broke. Forty percent of the two thousand people interviewed stated their finances were ‘permanently precarious’, and the lowest thirty percent claimed they were ‘not managing to get by’—a British euphemism for being broke.

The lie of the land. Jobs in the United Kingdom, analyzed by the Royal Society of Arts.

The Royal Society of Arts commissioned this research, and the report identifies a wholly new class structure. In this brave new world, there are seven classes, in ascending order.

The chronically precarious: the reliably broke, people in this group are typically on a steady contract albeit with low pay. 60% have less than £1,000 saved and they have low job satisfaction and little autonomy at work. Typical job: full-time sales assistant.

The acutely precarious: usually broke but with significant income “yoyo-ing”. Work is often low-paid but, unlike the chronically precarious, irregular. This is a young group and 45% have a degree. Typical job: zero-hours hospitality.

The flexi-workers: love their job, even if it doesn’t pay well: 83% are satisfied at work but 59% earn less than £21,000 a year. High levels of savings: many are redundant “second careerers”. They value autonomy above security. Typical job: freelance photographer.

The steady-staters: feel well treated (90%) and well paid (69%), even if work is a means to an end. But they have low savings, and rely on work for income so are vulnerable to a shock. Their routine jobs are at high risk of automation. Typical job: public sector administrator.

The idealists: mid-earning, passionate and often millennials (50% under 35), 70% think they make a positive contribution to society at work. They are most likely to rely on others, such as parents, for income. They are urbane and 25% have more than £10,000 saved. Typical job: charity employee.

The strivers: these have regular jobs with high income and high savings, but worry the link between hard work and fair pay has broken: 73% are stressed but only 20% think their pay reflects their efforts. Typical job: middle manager.

The high-flyers: the wealthiest group: 55% have more than £10,000 in savings. They are successful at adapting to automation, and the most likely group to value new technology. They report high job security, high autonomy and high fulfilment. Typical job: director of an IT services business.

This distribution is heart-rending. Forty-three percent of the total have no safety net—if they lose their job, have an accident, or fall prey to the many other tricks life plays on us, no one in their household is able to support them.

I’ve been in England all weekend, talking to people who voted enthusiastically for Brexit, listening to the same people moaning about the government, and eating and drinking in establishments where the staff have no idea of the meaning of good service.

I also had the opportunity to examine one National Health Service (NHS) facility at close quarters, and I was impressed—in a good way. The hospital I visited was full of dedicated staff, of which the vast majority were foreigners: Indians from Kerala, Greeks, Spaniards, East Europeans.

I was struck by the friendly and competent nurses, the cleanliness, the quality of the wards—everything impressed me. I saw empty corridors, not gurney-ridden walls of patients waiting for treatment. I guess that may happen in some places, but it didn’t happen here.

I saw that much of the work was executed by immigrants, who definitely fall into some of the more challenging classes above. I guess the Indians will stay on after the Europeans go, but I can tell you they will be missed.

Work like this is not a job, it’s a calling. I searched through the RSA report for data on immigrants. The word pops up only once. I wonder how many of those two thousand people are not UK nationals, and I think I know the answer—very few.

So here’s the thing. The UK is no different from a bunch of other countries. So take a selfie. Where do you fit in?

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

 

Happy Birthday

December 2, 2017

On the first day of this year, the euro turned eighteen years old. In the West, that’s a significant birthday—in other parts of the world, where life expectancy is much lower, an eighteen-year old is an older person—schooling is compressed, often down to zero, hard work and children are by then both abundant.

Currency is a fundamental part of finance—money, as defined by Philip Coggan, is the promise someone will pay you back. It therefore goes without saying that if a nation possesses a strong currency, one perceived to hold its value, this is major asset.

A corollary is that, like the nuclear club, the strong currency club is zealously, and jealously, guarded.

Until the First World War, roughly a century ago, the British pound sterling had been the top of the crop for a couple of hundred years. British debt in WWI, much of it contracted with US banks, together with the rise of huge American conglomerates in banking and oil, propelled the dollar onto the currency throne.

At the end of the XIXth century, men like Rockefeller, Vanderbilt, Morgan, and others created the business giants that catapulted the US economy onto the world stage.

Then, at the end of the XXth century, a new currency appeared. It happened in the heart of Europe, and the Brits didn’t like it at all. Many in England still long for an empire that  evaporated three generations ago, and the thought of an upstart replacing the pound was the last straw.

But replace it it did, and together with the renminbi—literally the people’s bill, or banknote—it has pushed the pound off the podium, which like any proper podium, only has space for three medals.

One indicator of success is the number of nations pegged to the currency—the list for sterling reads like the last cronies of a dictator: Falkland Islands, Gibraltar, Guernsey, Jersey, Isle of Man, Northern Ireland, St. Helena, Scotland.

The euro steamrolled through the peg list, in good part because of the French influence in West Africa—currencies pegged to the CFA franc jumped onto the new EU currency in 1999.

Country Currency Name Peg
Bahrain Dinar USD
Benin West African CFA Franc EUR
Bosnia and Herzegovina Convertible Mark EUR
Bulgaria Lev EUR
Burkina Faso West African CFA Franc EUR
Cameroon Central African CFA Franc EUR
Central African Republic Central African CFA Franc EUR
Chad Central African CFA Franc EUR
Cuba Convertible Peso USD
Denmark Krone EUR
Dijibouti Franc USD
Equatorial Guinea Central African CFA Franc EUR
Eritrea Nakfa USD
Gabon Central African CFA Franc EUR
Guinea-Bissau West African CFA Franc EUR
Hong Kong Dollar USD
Ivory Coast West African CFA Franc EUR
Jordan Dinar USD
Lebanon Pound USD
Lesotho Loti ZAR
Mali West African CFA Franc EUR
Namibia Dollar ZAR
Nepal Rupee INR
Niger West African CFA Franc EUR
Oman Rial USD
Panama Balboa USD
Qatar Riyal USD
Republic of the Congo Central African CFA Franc EUR
Saudi Arabia Riyal USD
Senegal West African CFA Franc EUR
Swaziland Lilangeni ZAR
Togo West African CFA Franc EUR
United Arab Emirates Dirham USD
Venezuela Bolivar USD

And all this happened in just eighteen years, during which time I watched the London-based CNBC show diss the euro in every which way, and the London merchant bankers, along with their friends in New York, and the Anglo-Saxon rating agencies, do everything in their power to destroy the currency union.

In the process, they caused untold distress to families in Greece, Italy, Ireland, Spain, and Portugal—anything and everything to throw those countries under the train, and sow discord in Europe. Their legacy is profound: fringe parties on the far right and far left, dealing in the same crappy mumbo-jumbo that placed Donald Trump in power—I don’t often plug books in these pages, apart from my own, of course, but treat yourself this Christmas, and read The Making of Donald Trump.

David Cay Johnston, a man with unusually large testicles, grabs you by the very same right from the first sentence—he’s known mumbo-trumpo for decades, and does a superb job of deconstructing America’s new and much lamented leader, reducing him to the selfish and ignorant conman he’s always been.

The second legacy of UK and US investment banks was unexpected: despite the pain—and inexplicably in the greedy and selfish corridors of Goldman Sachs, Morgan Stanley, and the other noble houses—all but a small minority of the people in those nations wish to stay in the euro.

And these are not PIGS, the generous sobriquet given to hard-working nations by Blackberry-twiddling, Excel-fondling children in London and New York—these nations, my little friends, are the cradle of European civilization: these are the peoples who invented, adopted, and disseminated philosophy, democracy, astronomy, and yes, history. Words that rhyme with money, but there the similarity ends: money, like yourselves, is merely a tool.

One of the obvious characteristics of this new kid on the block is the speed with which it became a mainstream player. I’ve written about that non-linearity when it comes to technologies—the eons it took for prehistoric cave art to turn to writing, and the lightning speed of media development in recent years.

Digital has changed everything, and the new new kid on the block, who everyone is trying to kill, recently touched ten grand—this child is secretive, clever, devious, and profound.

And thoroughly unpredictable—she must therefore be a lady, and her name is bitcoin.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

 

Three Buses

September 30, 2017

There’s a well-known British gripe about the bus service—you wait forever, then three come at once.

I’m using that to go a little further down the automation road. The UK Labour Party conference took place last week, and Jeremy Corbyn, who since the June 2017 election fancies his chances, spoke to his audience about plans for a robot tax.

The reaction from the manufacturing sector and the Tory press was swift—the word Luddite was very much in evidence.  The left, of course, was quick to support the idea. When we compare the two articles (using the Private Eye sobriquets), the Torygraph one is just demagoguery, the Grauniad piece is better thought through.

Corbyn diluted the message for political reasons, but it’s an important discussion.

First out of the post was South Korea, which is currently ruled by the liberal Min Ju party. In early August, the Koreans announced that tax incentives would be limited on automation investments.

This is not a ‘robot tax’ as such, but it does recognize that if the state provides a safety net for its citizens, that service must be funded by society.

Traditionally, this has been paid for by corporations and job-holding citizens, and a strong shift toward automation means that more citizens will lose their jobs—if we assume for this analysis that demography remains unchanged, then governments will find it increasingly difficult to support their citizens.

The choices are stark, but partial options could be combined.

  • The Luddite option—freeze automation
  • The Robot Tax—increase revenue from companies which reduce their workforce
  • Increase debt—business as usual, pretend the problem doesn’t exist
  • Reduce benefits—when a threshold is broken, there will be blood on the streets

The alternative view to all this is that Artificial Intelligence (AI) will create more jobs than it destroys. That’s one area where the debate is particularly hot.

The three buses problem. Transport researchers have built mathematical models to study this problem (hint: it never happens on the underground).

PwC put out a press release on AI and jobs in March 2017, which is disturbing on two counts—the numbers are compelling, but the interpretation is weak.

The study states that up to 30% of UK jobs will be gone by 2030, but ‘this should be offset by job gains elsewhere in the economy.’

The only suggestions for that last part are that a higher level of education will be needed for those new jobs, and they will be more social in nature.

PwC also tells us that in the US, the job loss number is 38%, and in Germany, 35%.

So there’s one key question—which side is right: AI job gain or AI job loss?

To find out, I asked a machine.

“Google, what new jobs will be created by artificial intelligence?”

A study by Accenture helped me out. Apparently, there are three fascinating entirely new job categories. These are:

  • Trainers
  • Explainers
  • Sustainers

I’ve abridged some of the explanatory text below, because in humans, tedium can easily set in.

Humans in these roles will complement the tasks performed by cognitive technology, ensuring that the work of machines is both effective and responsible.

Trainers

This first category of new jobs will need human workers to teach AI systems how they should perform…
…they teach AI algorithms how to mimic human behaviors.

Customer service chatbots, for example, need to be trained to detect the complexities and subtleties of human communication…
…Yahoo engineers have developed an algorithm that can detect sarcasm on social media and websites with an accuracy of at least 80%.

Consider, then, the job of “empathy trainer” — individuals who will teach AI systems to show compassion…
…Humans are now training the Koko algorithm to respond more empathetically to people who, for example, are frustrated that their luggage has been lost, that a product they’ve bought is defective, or that their cable service keeps going on the blink even after repeated attempts to fix it.

Without an empathy trainer, Alexa might respond to a user’s anxieties with canned, repetitive responses such as “I’m sorry to hear that” or “Sometimes talking to a friend can help.”

The second category of new jobs — explainers — will bridge the gap between technologists and business leaders. Explainers will help provide clarity, which is becoming all the more important as AI systems’ opaqueness increases. Many executives are uneasy with the “black box” nature of sophisticated machine-learning algorithms, especially when the systems they power recommend actions that go against the grain of conventional wisdom.

I can think of a couple more categories ending in ‘ainer’ for the guys who wrote the study. I would also say that all these amazing jobs are centered on humans helping machines, not machines helping humans—maybe the report was written by a robot.

Enter Eric Schmidt, your man from Google. Speaking at the Viva Tech conference in Paris in June this year, Schmidt quoted a McKinsey study that states 90% of jobs are not fully automatable.

Two points come to mind: the first is that if 90% are not, 10% are—add that to the present jobless rate. The second is the definition of fully. If we think very conservatively, and speculate that fully means only 20% (i.e. you still do the other 80% of your job, presumably for 80% of the pay), then the added employment loss is a further 18%.

Of course, you might do 100% of what you did before in 80% of the time, because AI is helping you out.

For instance, let’s say you have a job processing expense claims. When you get to work, you say good morning to your three colleagues and sit down at your desk. There’s a stack of paper invoices in front of you.

AI now provides a machine where you dump the lot, sort of like a juicer.

The machine sorts through everything, regardless of size, scans and reads issuers, dates, and amounts, and produces a spreadsheet with the results. It compares that with a sheet you’ve received from the claimant, and attempts a match. It flags any inconsistencies.

Your job is to run through the line items, query any expense that seems unjustified, or any amount entered that doesn’t match. A job that took one hour is done in fifteen minutes, so you can now process four such claims per hour—congratulations, your productivity just quadrupled.

But wait… for this to work, you need four claims on your desk every hour, and the limiting factors are: (i) how many claims you actually get; (ii) whether the speed with which your department processes them (pre-AI) introduces delays.

If your team is working well, then with the introduction of AI it now has four times the productivity, but unfortunately, not four times the work, because expense claims are not going to quadruple.

Your company is pleased as punch. You’re their star operator. It fires your three colleagues, and the departmental productivity quadruples. Actually, now it even goes up a little more—because you have no one to chat with, you can now manage a claim every twelve minutes, so you’re doing five times better.

Your new robotic colleague always says: Hi! I’m done with this batch, please feed in the next documents. It doesn’t know about your lunch hour, so it repeats this mantra at regular intervals when you’re munching your sandwich. Since it gets no input, the pitch of the automated voice shifts from cocktail lounge seductive to low-cost airline lounge wife.

Over the last few months, the damn thing has been driving you nuts. This afternoon, you weren’t quite yourself, and smarty-pants AI (you call it SPAI) said it once too often.

You hurled it out the window, two floors down—it landed on top of a parking robot and shattered its triangulation vision unit. SPAI’s last croak was “Hi! I’m done…”

Your section head wanted to keep you on—anyone can make a mistake, it’s known as human error. Unfortunately, Health & Safety had the last word. After all, if the claims robot had killed a human, can you imagine the publicity?

ROBOT CLAIMS ITS LAST VICTIM! WHAT’S THE COST FOR THE HUMAN RACE?

So there we are—all four jobs gone, but the good news is the new machine is far more advanced, and benefits from a cutting edge AI training algorithm, so it doesn’t need a human at all. And when it’s done with this batch, it turns itself off until the next one arrives.

That’s excellent for carbon emissions, and the new spy never says a word.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

 

No Pension

September 23, 2017

Paradigm shifts don’t often happen at great speed—usually, change gathers momentum, circumstances around you begin to diverge from the old norm, and then quite suddenly you realize you’re in a different world.

It happened with electricity, the motor car, and the internet, and it’s in full force with robots.

In The Hourglass, which I’m presently writing in earnest, governments find a new social contract that builds in the workforce paradigm shift (telling you more would spoil things).

Let’s see how many people I put out of work when writing this article.

During the week, a couple of interesting topics for my weekend chronicles invariably pop up. If I’m traveling, it’s easier, sometimes fate intervenes, more often I read or hear something which merits a text and do a screengrab.

This week, out of three or four possibilities, robots back came on the radar with a vengeance, partly because of a newspaper article. I can’t remember the last time I bought a newspaper—analog that is, because I’ve never bought a digital one.

So there’s the vendor out of business, although in the US and elsewhere, the profession died decades ago with the appearance of newspaper vending machines.

I guess the fact I don’t buy papers is not unusual, so there’s another bunch of people out of work—reporters, editors, distribution jobs. News organizations have been slimming for years, in any case. Pieces written on a computer (bye-bye typists), auto-correction for typos and grammar (so long copy editors), digital image libraries (see you illustrators and photographers), automated layouts and printing (ciao typesetters)… the list goes on.

All my research is done online. After this brief intro, I’ll re-read the Elon Musk article, hunt around for other sources, and type up my thoughts. No library, no coffee on the way, no photocopies, no writer’s notebook, no pens, no pencils or erasers, zilch. Add ’em up.

Finally, publication, review, and distribution—Wordpress and I take care of all that. And how about you? We (WordPress and I) only ask for your time. Once in a while WordPress fields you an ad, but that’s fine. So do the papers I read online.

The time I take to research, write, re-read, and publish is my contribution. Since each article takes about four hours all told, and I’ve been publishing weekly for ten years, we’re at about one hundred days and counting—believe me, that’s nothing compared to the number of full-time jobs lost along the way.

Whenever a paradigm shifts, the naysayers come out of the woodwork—when trains appeared, cows would stop giving milk (false); with the advent of calculators, kids would be much worse at arithmetic (true); aquaculture would be the end of fishing (false); computers would replace humans (well…). It’s a long list.

Innovation has always changed the way we do things, and often changed the pace. And society is usually slow to deal with change, as manifest this week by politicians talking about legislation on algorithms. Most people have no idea what an algorithm is—and that includes lawyers and lawmakers. My definition? It’s a quantitative approach to a problem—so good luck with that.

Elon Musk, most famous for the Tesla electric car, considers artificial intelligence (AI) the biggest threat to mankind—he baldly states that ‘robots will be able to do everything better than us.’ Actually, haircuts might be an exception for a while—I can see kids getting teased at school for getting a real robot haircut.

Musk says transport jobs will be the first to go—the US Department of Transportation tells us that’s one in every seven. Unemployment in the US is at 4.3%. Employment is therefore at 95.7%. One seventh of that is 13.5%, so unemployment fairly quickly shifts to 17.8%, which is a three hundred percent increase—and AIV (vehicles) will not spend their time bumping into each other, so panel-beating will become an art form, not a day job.

The mental process I used in the last paragraph is a generic description of an algorithm—I did it in my head, since I pre-date calculators, but you can check it on Excel, or write a two line computer program to do it.

Musk  uses the game of Go as an example of how fast this will all change. If you want to see how much fun lawmakers will have legislating algorithms, read this summary from the scientific journal Nature—it’s a bit long, but humor me.

The game of Go has long been viewed as the most challenging of classic games for artificial intelligence owing to its enormous search space and the difficulty of evaluating board positions and moves. Here we introduce a new approach to computer Go that uses ‘value networks’ to evaluate board positions and ‘policy networks’ to select moves. These deep neural networks are trained by a novel combination of supervised learning from human expert games, and reinforcement learning from games of self-play. Without any lookahead search, the neural networks play Go at the level of state-of-the-art Monte Carlo tree search programs that simulate thousands of random games of self-play. We also introduce a new search algorithm that combines Monte Carlo simulation with value and policy networks. Using this search algorithm, our program AlphaGo achieved a 99.8% winning rate against other Go programs, and defeated the human European Go champion by 5 games to 0. This is the first time that a computer program has defeated a human professional player in the full-sized game of Go, a feat previously thought to be at least a decade away.

A recent study commissioned by the UK Royal Society of Arts suggests four million jobs in the British private sector could shift to AI in the next decade. That’s 15% of the workforce. The current unemployment number is almost identical to the US: 4.5%, and would bump up to 19.5% as machines take over.

A survey of employers shows that three sectors would be hardest hit: finance and accounting, transportation and distribution, and manufacturing. Over twenty percent of employers see more than thirty percent of jobs in those sectors disappearing.

These trends toward automation are much more prevalent in developed countries than in other parts of the world, and are pushing a major change in the way society works.

Job satisfaction, unemployment, trade unions, overtime, workers rights, coffee breaks, vacation, sick leave… all these words fall on a robot’s deaf ears. These days, when you call US airline customer services, you have to say the word agent three times before you get to speak to a human.

Society is globally unconcerned, or else humans blame other humans for their woes. Think Trump trampoline for expelling immigrants, Brexit, and the US job export to humans in third-world countries.

Citizens rally to the call against their fellow man, but no one blames the machines, or those who conceive or build them. I love technology, but I also believe in human employment—just as boundaries are imposed on people, so they must be imposed on machines. After all, we want our kids to grow up to be useful citizens, whose values include a work ethic and an education—if you grow up destined to do nothing, it’s hard to see why you should work hard at school, or even why you should go at all.

Crazy things happen when a paradigm shifts. If in fifty years there’s a scarcity of protein, there will be no more pets, since they compete with humans for food—salmon and trout patê, yum!

And in a world where robots do our jobs, there will be no pension plan.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

Rudolf

August 5, 2017

History is most interesting when paradigms shift. And paradigms shift in two ways.

The first is when something totally unexpected occurs. The discovery of penicillin, which changed the relationship between humans and disease, is a good example. The second comes about through non-linearity, my favorite process. Water slowly builds up behind the wall, the level gradually rising, unseen and unheard, and then one day the wall cracks.

This build-up translates an accumulation of potential energy into a release of kinetic energy—the myth of Sisyphus, perennially rolling a rock up a hill until exhaustion releases it to roll down again. The king of Corinth provides the kinetic energy, the rock acquires potential energy, and then releases it as it rolls downhill.

A similar shift occurs when anger, stress, or frustration builds up inside you until there is a release, and there is a societal parallel as a trend or wish develops in enough minds to cause a shift. Arguably, the US presidential election is an example of the latter.

Unquestionably, so is the recent decision in parts of Europe (not Germany) to do away with the internal combustion engine. France and Britain plan to do so by 2040, by banning the sale of new diesel and petrol cars.

Germany, where diesel is king, timidly wants a million electric cars on the road by 2020—in 2016, there were forty-five million registered.

Which bring us to Uncle Rudolf.

Rudolf Diesel: an amazing man, of whom hardly an English biography exists.

The inventor of the most successful engine in the world is a little-known man. The Franco-German engineer became very wealthy from his invention, but he was a prodigy in engineering, with a string of innovations to his name.

You may not like engines, so forgive me torturing you with the information that the man invented the compression-ignition engine, a very different beast from the internal combustion engine that drives petrol-fueled cars. These engines fire on their own, using basic principles of thermodynamics to inject fuel into a compressed air mixture—above a certain temperature the mixture self-ignites, so the engine doesn’t need the complex low voltage-high voltage rig that fires spark plugs.

Diesel is the only guy with an engine named after him. Well… there is Wankel, but I don’t want to lower the tone on a weekend—we already have trump tweets for that.

The remarkable thing about diesel engines is they run on just about anything, as long as it burns. Which means used cooking oil, even from McDonald’s, and everything from cane sugar alcohol to beet to peanut oil—the oils fall under the category of biodiesel, and you can run the most recent diesel engines on it. You can even use homemade oil, as long as you wash it.

Rudy was born in 1858, and disappeared mysteriously from a postal steamer called the Dresden in 1913. Somewhere between dinner and breakfast he vanished from the ship, in the middle of the English Channel, while en route to London. What is known is that the fifty-five year old millionaire had dinner on his own and retired to his cabin at ten o’clock, leaving word that he was to be woken at 06:15 the next morning.

His bed was found perfectly made, with his unused nightshirt laid out, and his hat and overcoat were neatly folded on the afterdeck. A terribly disfigured corpse was found in the North Sea ten days later, and his identity confirmed by his son Eugen, based on personal effects.

The corpse was found near Norway, but the ship had sailed from Antwerp to London, not exactly close—there was a report on October 11th 2013 that Diesel’s body had first been found by a small Dutch fishing boat at the mouth of the Scheldt estuary in Zeeland, but cast overboard due to rough seas.

In the early XXth century, the world was still the province of colonial powers, and at the Paris World’s Fair in 1900, the Otto company exhibited a diesel engine running on peanut oil.

The French wanted it for their African colonies, where petroleum fuels were not abundant. Diesel himself had a noble vision for his engine—he saw it powering the agri-industry in remote parts of the world, and imagined a world where farming became self-sufficient—farmers would go their own fuel, refine it using simple methods, and use it to power the engines that operated tractors and harvesters.

Rudolph Diesel became a strong advocate for biodiesel, which is understandable for three reasons. First, his engine was fuel-agnostic, and he saw no particular advantage in advocating petroleum products. Second, it was a huge untapped market, which could greatly increase his company revenue.

Finally, it made perfect sense to locally produce the fuels that would be used in farm areas—although no one spoke of carbon footprint back then, or terrorism in the Mid-East, hindsight can be revealing on the consequences for both.

Enter John D. Rockefeller and Big Oil. A biodiesel success would scupper Standard Oil of New Jersey, and the huge US business bet on petroleum hydrocarbons.

Or… enter the German secret service, worried that Diesel would help Churchill with his plans for the development of a British submarine.

Or…

The suicide theory is very unlikely, and in those days a problem could be created or resolved by one man with a briefcase.

And although they found the hat and coat, the briefcase is missing to this day.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

 

 

 

 

Old Europe

July 1, 2017

Old Europe is heating up again.

The disparaging term was coined by Donald Rumsfeld to vilify traditional European views that clashed with the Bush 43 administration’s vision of a new world order.

History is a wonderful leveler—this so-called order, fifteen years later, is a world in utter chaos. With one exception: Old Europe.

In mid-2016, the prophets of doom began predicting the end of Europe—Anglo-Saxon pundits repeated ad nauseam that the UK was the first nation to leave the European Union.

In the fall, a confused and fractured America elected Donald Trump, and the voices of isolation grew—a kind of nationalist autism (natautism) frenzy, where crazies with no historical grounding advocated a return to bastions of prejudice and hatred.

After Holland gave Europe its first sign of hope this spring, those same pundits said “with all due respect” that The Netherlands was small potatoes, France would be the game-changer.

And it was. The country whose motto is ‘liberty, equality, fraternity’ scored a home-run for Europe. Twice, in the presidential and parliamentary elections—and shut the pundits up for good.

In the meantime, Trump steadily confirmed what better-educated Americans knew all too well: his boorish incompetence, singular lack of judgement, and moral turpitude—the latter manifested through multiple cheap accusations and childish threats, offending anyone and everyone who disagreed with him or dared question his ‘wisdom’.

And then came the Maybot debacle. It’s difficult to exaggerate the degree of confusion that currently plagues the British Isles, but it’s left an isolated England even more alone, and turned Old Europe into a haven of common sense when compared to the Anglo-Saxon alternative.

Finally, young Britons saw the light, and came out en masse to change the status quo. I’ve been railing in these pages for some time that apathy and amnesia are democracy’s greatest enemies—British youth suddenly awoke and put the fear of god into the Tory government.

The same seems to have happened in France, where Macron mobilized young people in ways that completely shifted the political spectrum.

In both countries, the change was for the good of all, and underscored a simple fact—what unites us is far more important than any divisions.

The U.K. is more isolated than ever, and has absolutely no idea on how to extricate itself from its present mess. Europe is left wondering who it is negotiating with, and what will actually be discussed—on both sides of the Channel, cool heads believe that the most straightforward solution would be to confess that the whole Brexit affair was simply a huge mistake—many affairs are.

Europe is running hot. The financial channels, which delighted in dissecting the break-up of the euro, are now busy discussing the vagaries of the pound and UK inflation.

The dollar, which was moving toward parity with the euro even as Trump was elected, and afterward flirted with values below 1.05, is presently nudging 1.15.

The greenback vacillates as Old Europe thrives.

The next test for Old Europe is the German election on the 24th of September. It seems unlikely that the Germans will undo the good things this year has brought.

Frau Merkel, whether you like her or not, is a steady hand at the helm, and has learned several important lessons about Europe—some of which, like austerity, made Southern European nations pay a spectacular price, but there is a far clearer vision now about what works and what doesn’t.

We have scary people like Le Pen, Trump, and Farage to thank for showing us all how not to do it, and above all for frightening the politicians and the young people of Europe alike into a return to common sense.

Beyond the borders of Europe lies chaos: the Mid-East inheritance of the Bush and Blair years, and the radical testosteronocracy of Russia.

We’re not out of the woods yet, but this good feeling that permeates the continent is a superb opportunity for Europe to consolidate further.

After all, many of the citizens of the Union will be happy to tell you they live in the best place on earth. And England can so easily remain a part of that, if it exercises one of its most prized virtues—common sense.

Good Old Europe.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

 

 

Fractured, Not Broken

February 4, 2017

In medicine, the two words are identical. A fractured bone is broken, period.

But in the minds of ordinary people, these are two different concepts. And in America today, I see the distinction in simple terms.

America is broken is an untruth, aka an alternative fact, put forward by the new US administration. There are obvious asymmetries in American society between the Haves and the Have Nots, but there is no novelty here. Overall things are far from where they should be, but far better that they were. Rust belt? Read the Grapes of Wrath, and listen to Woody Guthrie sing Do-Re-Mi. Then after that, listen to Ry Cooder cover the same tune. Turn it up, it brings tears to your eyes!

By the way, the incredible accordion player happens to be a Mexican, Flaco Jiménez—or rather, what used to be disparagingly called a wetback, an immigrant to the San Antonio area of Texas.

America is fractured, on the other hand, is no factoid. By my definition, the country is split down the middle. FACT. Not because it’s broken, but because the ideology gap is huge, and widening.

A fascinating article by Fareed Zakaria in yesterday’s Washington Post helps put that in perspective. I admit I got sidetracked on the first paragraphs, trying to apply Spoonerisms to some cabinet names.

Sean Hannity could become Hean Sannity, and Steve K. Bannon might turn into BS Kannon. Even DJ himself could become TJ Dump, at a stretch.

But as I’ve said before, what these guys say is only relevant insofar as it gives them the power base to do things. And what they do is extremely worrying. Democracy gave them the soapbox, and populism gave them the popgun. Except this popgun not only fires the traditional cork to silence the media, but is capable of far greater harm.

The Post article uses data compiled by The Economist on the role of individual US states as net donors or recipients of federal funds. I feel a table coming on…

How the fed gets and spends its money (table from The Economist).

How the fed gets and spends its money (table from The Economist).

It turns out that, based on Zakaria’s analysis (the data are from 2009)

…blue states, which voted against Trump in 2016, that fund the red states that voted for him. From 1990 to 2009, Clinton states collectively paid $2.4 trillion more in federal taxes than they received in federal spending, while Trump states altogether received $1.3 trillion more than they paid.

A report from the Brookings Institution, also mentioned in the article, tells us that the areas of the US that voted against Trump produce the vast majority of economic output—true for employment, innovation, start-up companies, and pretty much any other indicator you fancy.

Even more worrying, the less than 500 US counties that voted Clinton generate 64% of GDP, whereas the Trump block (over 2,600 counties) generates the other 36%. These are not alternative facts, but between you, me, and the truck on blocks, who cares?

The fracture is clear: the areas where there is less knowledge, less employment, less education, and greater income inequality are the support base for a range of policies being enacted by the current administration. On the other hand, the areas that thrive better economically are being penalized for their success.

Overall, the kinds of measures now considered, which include changes to immigration, increased protectionism, and ignorance of all the benefits of a sustainable circular economy that emphasizes re-use, waste reduction, and a better environment, will be disastrous.

The one thing they will not do is improve the welfare of the 36% group.

Europeans, my own folk, would do well to dwell on these numbers—I look forward to a similar analysis of the Brexit referendum vote.

To those in Europe who believe that one generation is long enough to analyze the potential of a European Union, as opposed to the previous eighty generations of European war (a well-tested model), the facts above should be food for thought.

The US gained independence in 1776. If in 2011, a federal union can still support a diversity of winners and losers among the states, and work toward a greater balance, what part of a European Union do you not understand?

 

The India Road, Atmos Fear, and Clear Eyes. QR links for smartphones and tablets.

The India Road, Atmos Fear, and Clear Eyes. QR links for smartphones and tablets.

Break Out the Wodka

November 12, 2016

It feels like a remake of Sweet Little Sixteen. Just change the lyrics a little.

He’s got ’em rockin’ in Moscow
In Beijing, Hebei
Deep in the heart of China
In North KO-RE-E-A

Way down in Crimea
Across Manila Bay
All the cats wanna dance with
Sweet little DJ

Yes indeed, they’ll be cracking out the Russian Standard these days in Red Square. And the square of heavenly peace. Glory days like these come once a century.

Everything’s gone a little nuts since Wednesday morning—dollar shot up, so did copper. Pound shot up, as speculation on a UK rate rise became rampant, and the brexit + trexit = succexit camp reveled.

Leonard Cohen preempted the Trump victory in the most appropriate way, and all I did this Monday was dump dollars.

Last night I went through the few Cohen songs I still know how to play: Suzanne; Chelsea Hotel, which he wrote after a one-night stand with Janis Joplin; and The Partisan, a classic about the French resistance in the Second World War. Not forgetting Marianne, and the song Joe Cocker immortalized: Bird On A Wire—both written for his longtime muse, Marianne Ihlen, who died earlier this year.

It helped me to sing those old songs, and to share a few tears with an old friend—he was always there for me on those dark nights in my English boarding school.

Cohen’s final album is called ‘You Want It Darker.’ What could be more appropriate.

Well, good old Donald’s ahead of me on the dollars, but with his plans for US debt, it won’t last. Personally, I think the markets are in headless chicken mode, and as January approaches both the nights and the knives will get longer.

After I went to Las Vegas in the spring, I was convinced this election might well end up giving the US this ‘accidental president’, and after Brexit I was sure. I owe you all an apology for boring you with these scribblings for weeks—but if ever there was a relevant historical topic, this is it.

Meantime, I worked on an early draft of my new book, The Hourglass—and I’m still only a third of the way in, with characters and concepts jockeying for position. Sometime around June, President David Klomp elbowed his way into my pages, right there in chapter 2.

I usually only share text when my book is already in good shape, but as Cohen says in Chelsea Hotel, for you I will make an exception.

President Klomp was late. Don Pletz paced the huge entrance hall, aware that a roomful of extremely busy men and women waited impatiently at the back of the mansion—among them, the British prime minister, the top adviser of the European Commission, and key world leaders in banking, insurance, and oil.

Pletz knew the discussion was super-sensitive, which is why the group was meeting in Maine, not Manhattan. He’d been thinking about this for years, a problem that hamstrung GDP growth, and made politicians act even more stupid than usual—calling referendums they couldn’t win, and making wild promises they had no way of keeping.

At the core, it boiled down to one, simple, four letter word.

The secret service men morphed into animated Action Man puppets, striding, taking positions, and murmuring into microphones. Pletz heard the blades of the Sikorsky VH-3D overhead and followed the presidential detail toward the helipad.

Marine One was given ground clearance by the senior security officer, and a large, ruddy man, running to flab, descended. The new tenant of the White House—POTUS as he was known to the acronym-rich US military—walked toward Pletz, the chopper downwash tangling his perennially messy hair into a stylist’s nightmare.

Klomp was a no-nonsense businessman, the sort of guy who disdained career politicians and had no patience or knowledge of detailed analysis—his approach to government appealed widely to his core voters—he trusted his gut.

Pletz greeted the president, a corporate magnate who he’d known for years. Personally, like many business people, he thought Klomp was a fool—a thin-skinned, self-obsessed, conceited buffoon. The chairman of Goldstein was a New Yorker like Klomp, and he knew a con when he saw one—the president was an empty set, and the campaign rhetoric about fixing Wall Street and main street was just a bag of nothing.

Goldstein Pletz had put a package together for this client, a marvel of easy solutions to complex problems. After all, that’s what an investment bank did best, from sub-prime mortgages to sovereign debt. Now, Pletz thought, as he showed the president into the meeting room, all I have to do is sell the package.

Signor Presidente.” The senior European Commissioner, a stubby Italian career politician with a face like a mole, shook the great man’s hand. There was no need for false smiles and photo-ops here—any reporter found within the perimeter would be dropped into the lake with a lead weight round his neck.

Next came the ‘special relationship’, a woman who guided the destiny of the United Kingdom. Pletz watched the dowdy, non-descript British PM pay homage to POTUS—it was well known that career politicians loathed him, just as he in turn despised them. Well, Brit politicians often referred to their nation as a corporation, UK plc: now she’d find out what it really meant—and agree to it.

“Welcome to the United States of America, ladies and gentlemen.” The president formally opened the meeting. “We were asked to meet here, in beautiful Maine, by our good friends at Goldstein Pletz. As you know, Goldstein is good for business, and business is good for America.” POTUS seemed well pleased with this quip. His hand absently ran his mussed hair forward.

“This great country was made great by deal-makers, and secrecy is the heart of the deal. It’s a pleasure to bring together the key players of the Western world, our friends from Europe, from Britain. I’ll tell ya—“the man in the red tie and the rumpled blue suit used the familiar tones that had won him the election—“Lemme tell ya, what we’re doing here today, I mean, this is the best deal you’ll ever make.”

He’s going off the reservation, Pletz thought. Cut with the bullshit already.

“Now, when I heard about this deal, understood the story here, I knew. I knew, people, that it would work.” People? Pletz could see the faint distaste on the British premier’s face, as if confronted with a particularly pungent plate of haddock.

One thing Tuesday did for me, it gave me a lot more motivation to work on The Hourglass. I’m going to leave you today with a little bit of homework, to help put the new leader of the free world in perspective.

The first gem is an article published in August by Anne Applebaum, a woman who was repeatedly insulted during the campaign by the anti-Jewish lobby of the Trump campaign. News today of how the president-elect plans to involve his family in the running of USA, Inc., very much supports her thesis.

The second piece was published yesterday in the Guardian. Among other things it suggests Sarah Palin might become interior secretary, in charge of emblematic parks like Yosemite and Yellowstone.

Yogi Bear will be turning in his grave.

The India Road, Atmos Fear, and Clear Eyes. QR links for smartphones and tablets.

The India Road, Atmos Fear, and Clear Eyes. QR links for smartphones and tablets.


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