Monthly Archives: October 2021

The future of – everything?

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I’ve polished off Ananyo Bhattacharya’s The Man From The Future: The Visionary Life of John Von Neumann in just a few sittings (a long train journey from Lancaster in torrential rain helped), and thoroughly enjoyed it. Parts of the tale were familiar from things I’ve read before, probably the many histories of computing. But much of it was new, and my goodness what an extraordinary person.

This biography is organised partly chronologically but also partly by chapters concerning each area of knowledge in which Von Neumann had a profound influence. And there are so many of them: pure mathematics, quantum physics, ballistics, the atomic bomb, computing, game theory, bringing expected utility theory back to life, cellular automata…  So he was a significant figure intellectually in maths, physics, economics, computer science, and even eventually biology. At the same time he was actively engaged in defence policy and busy with committees and meetings, zapping all around the country. He died rather young, and tragically knowing that his cancer was eating at his extraordinary mind. Highly recommended.

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Future uncertain

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I’m late to Radical Uncertainty by John Kay and Mervyn King, which was published last year. It took me a while to get into the book but I’ve enjoyed it and found much to agree with. The basic hypothesis is well known: that the kinds of models and methods useful for understanding what the authors call ‘small world’ or well defined problems are not useful for dealing with the contexts of many actual economic challenges. In these cases, from innovation or financial stability to climate change, ‘radical uncertainty’ demands a less narrowly formal approach. The term the book uses is that we should be asking ‘what is going on here?’ By radical uncertainty they go beyond Taleb’s famous black swans, or events in the fat tails of distributions. Rather, they mean there is no stable underlying probability distribution at all. This is the territory of unknowable futures. Is the Earth’s climate going to change irreversibly in the years ahead and if so how? There’s no probability to read off for this.

Some of the analysis is familiar. For instance the idea of reflexivity (from Popper via Soros among others) undermines the stationarity of probability distributions. In other words, one source of radical uncertainty is that we humans respond to events in ways that can be self-fulfilling or self-averting (see Chapter One of my Cogs and Monsters!) Kay and King also emphasise the important role of narratives, increasingly recognised (and btw we have a terrific Bennett Institute event on this coming up). I strongly agree with their scepticism about the scope for replacing humans with machine learning systems to get ‘better’ outcomes – as they put it, justice should be admininstered in an individual, not a statistical, manner. Otherwise we’re in the nightmare world of Minority Report. Human intelligence is accumulated collective intelligence, and co-ordination and institutions are all-important.

The book is full of examples of where policies go wrong by assuming a small world problem in a context of radical uncertainty. The UK pensions regime for example, applying technical valuations of the worth of pensions schemes which assume a stationary distribution of future returns – something belied by the evidence. Future risk can’t be eliminated so what’s needed is a future risk-sharing mechanism, rather than raising contributions now to unaffordable and unnecessary levels. (See for instance this excellent article about the UK’s USS scheme.)

As you would expect given the authors, the book is wide-ranging and beautifully written. There’s a tacit acknowledgement that these two eminent economists have changed their minds about the applicability of much of mainstream economics, for Mervyn King at least held an important role at the heart of mainstream policy. Good for them, though – so have I. As well as reading Radical Uncertainty on its own merits, it offers an interesting insight into the tides of change within economics, about which I’ve also written.

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War of the words

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A terrific book I read in proof has arrived here: it’s The War of Words: A Glossary of Globalization by economic historian Harold James. As the book notes at the start, this is a time of the polarisation of ideas about how to interpret the economy, society and politics. Nationalism is on the up and globalisation has become a dirty word. Well, the key point of the book is that the disputes about the world are in part due to the way different uses of the same word can lead to muddled thinking. “This book starts from the notion that moments of profound social transition spark new questions and inspire new vocabularies.” And yet fuzzy concepts obscure discussion rather than clarifying it. The book seeks to clarify potential differences in meaning, so that communication can perhaps become an exchange of ideas more than an angry shouting past people with opposing views.

The chapters each take a word, often an ism: capitalism, socialism, populism, globalism, but also technocracy, democracy, hegemony, debt, and more. They take a journey trough the history of how each term has been deployed, reflecting the changes in society along the way. The complex and changing politics of debt are a great example, and this chapter is a masterly and brief aerial view of why various types of debt – personal, corporate, sovereign – have become so problematic in the 21st century. The historical perspective is essential (I was very struck by Danny Quah’s pointing out on social media today that 2021 is as far from 1980 as 1980 was from 1939…. this is sobering if you remember 1980 as an adult). The debt chapter compares well with David Graeber’s much-praised vast tome Debt, in terms of setting out key political issues of our own time.

I also particularly liked the chapters on technocracy and populism; one could do worse than start students out with these two chapters before diving into the more extensive literature. Again, they have a clarifying focal length, just enough detail to start orienting oneself in these debates of competing isms and politiks. Professor James has the capacious knowledge that makes this possible and a wealth of historical details. Who knew that technocracy was a term born of World War 1, introduced by Californian engineer William H Smyth? He saw it was the means to ensure science and technology servied society. Technocrats took another giant leap forward with World War 2, with the recruitment of science into the comprehensive war effort and then the managerialism of the post-war era. Periodic revolts against the technocrats have occurred, such as Alasdair MacIntyre’s influential polemic After Virtue; but they are essential despite the constant need to maintain a balance between experts (techno-) and people (-cracy) which will inevitably shift over time.

Of course there are omissions but the point is clarification of terms, not exhaustive analysis. As the book concludes: “Words matter: … language can empower citizens.” This is exactly why ‘fake news’ and misinformation have had such a malign influence, why authoritarians control the media, why ‘woke’ and ‘neoliberal’ and many more words can become terms of abuse. We are indeed in a war of the words, and I recommend this book as ammo.

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Taking ideas seriously

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In preparation for delivering the 2021 John Urry lecture at Lancaster University on Thursday, I’ve been re-reading the book that introduced me to his work, Economies of Signs and Space, co-authored with Scott Lash. It was published in 1994, but being an economist, and therefore more ignorant of the other social sciences than I ought to be, I had only just found it when I wrote my 1997 The Weightless World. The commonalities in our ideas were striking – more so to me now than I recall them being 25 years ago, although I cite the book.

These included the intuition about the increasing salience of time and space – both books have a ‘cities’ chapter – fragmenting production systems, the importance of the cultural industries, the deficit of institutions lagging behind economic and cultural change. But above all the increasing share of value assigned to the intangible or weightless. They write: “What is increasingly produced are not material objects but signs,” and note the “increasing component of sign-value or image embedded in material objects.”

The lecture this week will pick up on these insights – I think I and they were pretty prescient – to talk about what it means to have an economy of ideas, but will also talk about the need to re-focus on the material foundation of this economy: giant warehouses and energy-guzzling AIs. Oh, and human brains.

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Do cities have a future?

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For obvious reasons there is a lot of debate about the future of cities, after 18 months when many of us have been stuck at home, and much speculation about whether there will ever be a return to commuting into dense city centres for work. The answer given in Survival of the City by Ed Glaeser and David Cutler is yes – probably. The basic reason is the role face-to-face interactions play in creating economic value, all the more so as increasing automation changes the kinds of jobs left to humans. Creativity, care, tacit knowledge – all require personal interaction. These long months on Zoom have depleted past stocks of social and organisational capital.

The ‘probably’ part, though, is that how successful cities will be depends on some key issues. Foremost among them is managing infectious disease. The book starts with epidemics in history and documents the ways cities have battled their effects, such as clean water and adequate sewage, not to mention the broader provision of good public health systems. For example, drug epidemics and pollution are usually urban blights. However, other aspects of city management are important too. The book singles out crime prevention, adequate supply of housing, and education provision too, for example (not least because the average level of education in a city is a strong predictor of life expectancy for its low income inhabitants even though they are generally not the most highly educated).

In a nutshell, the authors write: “A central theme of this book is that the vulnerability of large, dense, interconnected cities requires an effective, pro-active public sector.” Indeed. And the book ends with a series of recommendations: a “NATO for health”, effective across borders in a way WHO is not; better public health provision; education services that improve opportunities for those who are currently losing out in city life; and (this is a very US-focused book) criminal justice system reform.

I enjoyed reading it, not least because it speaks to my own instincts or prejudice about the role of cities. Lots of great detail too. Who knew the US health system might have been reformed in the 1960s if the then chair of the House Ways and Means Committee, Wilbur Mills, had not been caugh drunk driving with an Argentinian stripper called Fanne Foxe at 2am, and tried to escape the police by jumping into the river? Or that Bayer used to sell heroin as a safe alternative to opium. Or that ‘watered stock’ literally used to be cattle given a lot of water to drink so that they appeared to be fatter?

I’m talking to the authors on 20th October as part of Bristol’s Festival of the Future City – bound to be an interesting discussion.

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