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  • “There is a striking similarity between the questions we ask about 1914 and 2008,” writes Adam Tooze. “How does a great moderation end? How do huge risks build up that are little understood and barely controllable? . . . How do the passions of popular politics shape elite decision-making? Is there any route to international and domestic order? Can we achieve perpetual stability and peace? Does law offer the answer? Or must we rely on the balance of terror and the judgment of technicians and generals?”

    This, then, is a complex story, financially, economically and also politically. Yet some things are now clear. The crisis marked the end of the dominant consensus in favour of economic and financial liberalisation. It shifted political energy towards populist extremes, particularly towards the xenophobic right. It weakened the legitimacy of European integration. The world of the established high-income countries fell into flux. Anything now seems possible.

    Furthermore, because the banking systems had become so huge and intertwined, this became, in the words of Ben Bernanke — Fed chairman throughout the worst days of the crisis and a noted academic expert — the “worst financial crisis in global history, including the Great Depression”. The fact that the people who had been running the system had so little notion of these risks inevitably destroyed their claim to competence and, for some, even probity.

    Given the scale of the crisis, no alternative to a comprehensive state-backed rescue existed. And, given that this was a dollar-based financial system, it had to be led by the Americans. Moreover, because political pressure had already mobilised against fiscal policy action by as early as 2010, central banks, not elected representatives, had to take most of the needed action. But their policy actions, particularly “quantitative easing” — the buying of assets held by the private sector, especially government bonds — became noxious to those who viewed these actions as an unnatural distortion of markets, an unwarranted reduction in returns to savers, or an unjustified boost to the wealth of the already wealthy. Nevertheless, these actions were both appropriate and successful.

    The scale and nature of the required response had significant political consequences. The public was enraged by the size of support for the banks and, even worse, by the payment of the bonuses apparently due to the bankers. This was made more infuriating by the fact that hundreds of millions of ordinary people suffered by losing their homes and jobs, or by being the victims of post-crisis fiscal austerity. Many were also enraged that so few senior individuals were charged. The trust that must exist in any democracy between elites and everybody else collapsed. With trust gone, conspiracy-mongers and political mountebanks had their day.

    Perhaps most startlingly, conservative politicians in the US, the UK and Germany successfully reframed the crisis as the result of out-of-control fiscal policy rather than the product of an out-of-control financial sector. Thus, George Osborne, chancellor of the exchequer in the UK’s coalition government, shifted the blame for austerity on to alleged Labour profligacy. German politicians shifted the blame for the Greek mess from their banks on to Greek politicians. Transforming a financial crisis into a fiscal crisis confused cause with effect. Yet this political prestidigitation proved a brilliant coup. It diverted attention from the failure of the free-market finance they believed in to the costs of welfare states they disliked.

    At the same time, the financial crisis really had left most countries permanently poorer than had been expected. People were in aggregate worse off. That misery did need to be shared out. The question always was: how.

    What, finally, are the biggest results? One comes from Tooze’s remark that “the optimistic dogma under which democracy and markets were seen as necessary complements — the mantra of the aftermath of the cold war — was dead. In its place the crisis had put a more realistic awareness of the potential tensions between the two.” This is surely right.

    Yet another of these big results is that power and politics are back. US power dealt with the crisis. German power shaped the eurozone’s response. Rightwing politics reimagined a financial crisis as a fiscal one. A similar politics also shifted the emphasis from the dangers of economic insecurity and inequality to the threat from immigration. The crisis has, alas, awoken the sleeping ogres of fear and hatred.

    How, if at all, will liberal democracy survive the age of Trump, Brexit, Putin and Xi? That is the biggest question raised by this transformative decade.

    tags: 2008 crisis banking finance policy publicpolicy politics propaganda bookreview MartinWolf polarisation publicopinion anger inequality injustice

  • THE WORLD will need to rethink its approach to food as the planet warms and the population grows towards an expected 9.7bn people in 2050.

    tags: food future diet augmentedreality virtualreality technology science insect meat spirulina algae

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  • When searching for E.T., scientists tend to look for signs of life with certain similarities to life on Earth. But abiding by that narrow definition of life could be the reason we still haven’t found any aliens. Are we truly alone in the universe, or do we simply have no idea what we’re looking for?Scientists may have better luck finding aliens if they can come up with a definition of life that isn’t so “Earth-centric,” some researchers have said. In other words, scientists need to broaden the scope of the search to account for the possibility that extraterrestrial life may have nothing in common with life on Earth. Biologists and chemists may have a hard time wrapping their heads around a more universal definition of life, because everything they know about life is based on observations of Earth. Theoretical physicists, however, may have a better approach…In current projects in the search for life on other worlds, biologists and chemists can tell astronomers to look for “biosignatures,” or chemicals that may hint at the presence of life, like oxygen and methane. But the only biosignatures we know to look for are chemicals like those produced by organisms on Earth. What if aliens don’t have the same biosignatures as Earthlings? Or what if they don’t produce any biosignatures at all, because they aren’t biological beings? In addition to those biosignatures, “technosignatures” like radio signals could also help us find intelligent aliens. But Walker suggests that theoretical physicists could discover new kinds signatures to look for…NASA’s Astrobiology Institute currently defines life as “a self-sustaining chemical system capable of Darwinian evolution.” But that definition holds true only for the kind of biological life we see on Earth, and it precludes what Walker and other scientists consider to be other forms of life, like artificial intelligence (AI)…”One of the problems that we often encounter is assuming that life is a chemical phenomenon,” Walker said. “I think there’s a confusion between the scale at which life emerges—which is probably chemical—and the definition of life, which is likely not related to chemistry and could apply to AI,” she added. “We think of life as this chemical phenomenon and a cell as the fundamental unit for life … but that may be too narrow a view,” Walker said. “If you do have this kind of expanded view and are really looking for more-fundamental basic processes of life, it really opens your horizons for things that you might look for,” she said.Fellow panelist Susan Schneider, a philosopher with the AI, Mind and Society Group at the University of Connecticut, also said that NASA’s definition of life is too narrow. “What if AI is self-sustaining and has all sorts of intriguing properties, but the instance that we have is created by intelligent design—that is, we are the designers, we make the AI systems—and it doesn’t evolve in a Darwinian fashion?” By NASA’s definition, AI wouldn’t qualify as a form of life. However, when searching for extraterrestrial intelligence, shouldn’t researchers be willing and able to recognize the artificial version of life as well?…In the grand scheme of things—the expanse of our 13.8 billion-year-old universe—AI robots could be more common than biological aliens, assuming that other intelligent lifeforms tend to create and use AI in the same way that humans do and could do in the future, Walker said…Planet Earth is about 4.5 billion years old. Our ancestors became an intelligent species only sometime between 60,000 and 100,000 years ago, and we just recently started developing AI technology, in the mid-20th century. Assuming that aliens who are at least as intelligent and technologically advanced as humans would develop their own AI, there may be more robotic AI progeny out there than their mortal, biological inventors, Walker said. And because alien civilizations could potentially be billions of years older than Earth, they could be so advanced that we can’t even begin to imagine what they might look like, she said. They could be human-AI hybrids like cyborgs, or they might even be entirely artificial lifeforms created by a biological species that no longer exists.Whether it’s “little green men” on another planet or a colony of artificially intelligent robots on an interstellar spaceship, any system that processes information about its surroundings and uses that information to survive and thrive could qualify as a form of life, Walker told Space.com. “I think people want to make this distinction between biological and artificial, but in my mind, they’re all information-processing systems, and they represent the same kind of physics,” she said.The kind of information in “living” systems that interests theoretical physicists like Walker concerns “the process whereby biological systems seem to acquire knowledge or information about their world and use that to do things that are really interesting and [that] make them very bizarre kinds of physical systems,” Walker said. This approach breaks down life to such a fundamental level that it goes beyond what the life sciences can explain, she said. Physicists, however, can take a stab at the problem using mathematical models to describe such systems differently using network theory… Using network theory, theoretical physicists can broaden the criteria for the search for life so that any kind of organized and seemingly unnatural system would be recognized as a form of life, Walker said.”I really think cities are alive, and I think computers are alive, and I think AI is alive,” Walker said. “These are all examples of the same kind of information mattering to the world and re-emerging at different scales, and we don’t really know how high up in the hierarchy that goes. We know that chemistry [was] organized into unique cellular organisms and that those [organisms were] organized into multicellular organisms. And then we had social systems, and then we had cities, and we have technological civilization that’s now globally integrated, and now we’re inventing artificial intelligence.”For alien civilizations that have been around much longer than humans, that hierarchy could advance to the point that very advanced kinds of life “could look entirely different than anything that we could anticipate right now,” Walker said. If scientists are able to understand life at the most fundamental level, we’ll have a better chance of recognizing the most bizarre forms of life, even if we have no idea what we’re looking for.

    tags: SETI extraterrestrialintelligence space life physics definition mathematics pattern intelligence technology

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  • MONOPOLIES ARE GOOD—so long as they can be challenged, however remote the possibility. That belief has long held sway at the University of Chicago, a bastion of free-market thinking, which helped make the word “antitrust” lose most of its meaning in America, not least with respect to technology…

    All these suggestions raise two big questions. One is whether any of them are workable. The measures in the first option seem feasible, although merger controls can be sidestepped. The proposals under the second approach could stymie innovation. As for the third, what type of data should be shared, and in which format? And how can the tension between data-sharing and privacy be resolved? Much will depend on how regulators interpret the GDPR, but the legislation does not seem to condone the idea of exporting your social graph because it includes personal information on your friends.

    The other big question is whether any of these ideas can be made to fit with existing antitrust law. Critics of the tech titans have not spent much time thinking about that, says Carl Shapiro of the University of California, Berkeley. Before regulators can limit data power, for instance, they have to show that it has been abused, which will be tricky. So far only one big data-related antitrust investigation has been launched, by Germany’s Federal Cartel Office. In December it found that Facebook had abused its dominant position by getting users to agree to let the firm collect personal data from other websites.

    Many participants at the Chicago conference called for a big trial that could put the spotlight on firms’ practices, as the Microsoft case did in the 2000s. In Europe this is a distinct possibility. Data “can foreclose the market—they can give the parties that have them immense business opportunities that are not available to others,” said Margrethe Vestager, the EU’s competition commissioner, in a recent interview. In April she announced an investigation into Apple’s proposed acquisition of Shazam, a popular smartphone app that identifies songs. This would give the iPhone-maker access to data that could help it poach customers from rivals such as Spotify.

    But in America a major case seems unlikely to be brought, even if the Democrats regain power in Washington, DC. The recent techlash notwithstanding, the online giants still have many left-leaning friends, and have contributed to Democratic campaigns. So in the absence of any quick technical or regulatory fixes to the internet’s centralisation, what can be done?

    tags: data networkeffect internet monopoly competition regulation policy publicpolicy Chicago law

  • WHAT MASS IS for Catholics, technology conferences are for geeks. Speakers at these gatherings often sound like preachers, promising a dazzling future. So it was at a blockchain conference in Berlin in March, organised by Blockstack, a startup. The enthusiasm on display echoed that of gatherings in the mid-1990s.

    tags: blockchain internet architecture security technology

Posted from Diigo. The rest of my favorite links are here.

Posted from Diigo. The rest of my favorite links are here.

Posted from Diigo. The rest of my favorite links are here.

  • Nonetheless, the five more conservative justices on the Supreme Court managed to find a way to win this case for American Express. They did so not by contesting the fact that the gag order stymies competition — for that was impossible to disprove. Instead the court put theory ahead of practice in an absurd way: Even though, in practice, American Express hurt competition and inflicted harm on consumers, the court concluded, the company was not, in theory, powerful enough to do so.The logic is ridiculous: You could just as easily say that robbing banks is economically irrational, given the risks involved, and therefore it does not happen.To reach this strained conclusion, the court deployed some advanced economics that it seemed not to fully understand, nor did it apply the economics in a manner consistent with the goals of the antitrust laws. Justice Stephen Breyer’s dissent mocks the majority’s economic reasoning, as will most economists, including the creators of the “two-sided markets” theory on which the court relied. The court used academic citations in the worst way possible — to take a pass on reality.As Justice Breyer points out in his dissent, America’s antitrust laws represent a historic compromise between pure laissez-faire capitalism and state control of the economy. In cases like Ohio v. American Express, the court is rejecting that tradition of compromise and taking us down a path that leads in dangerous directions.Giving freer rein to private economic power has already yielded extreme levels of economic inequality, stoking the fires of social and political dissatisfaction. To break from Congress’s historic compromise in aid of the credit card industry only throws fuel on the fire and represents judicial activism in its most unseemly form.

    tags: competition abuse law AmEx USSupremeCourt twosidedmarket TimWu

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