Monthly Archives: January 2025

Swings and roundabouts – or slides?

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When you’ve seen as many ups and downs in the ranking of countries’ economic models as I have, it’s no surprise to learn that what was considered a sure-fire recipe for success at one time is portrayed as stagnation or sclerosis a decade or two later. The perceptions amplify relatively small differences in GDP growth, as the western economies tend to exhibit the same broad trends. Still, Wolfgang Munchau’s Kaput: The end of the German miracle was surprising. (although so were my recent experiences with German trains mobile coverage).

The book – which is very well written – argues that German policymakers made some strategic bets some decades ago that have backfired significantly over time: dependence on Russian energy, underinvestment, over-reliance on parts of the manufacturing sector as China has gained ground – in electric vehicle production for example – and a failure to keep up with digital technology. It emphasises the reliance on technologies that the digital and green transitions are simply rendering redundant – the internal combustion engine prominent among them. The effectively mercantilist system of political prioritisation and finance has continued to support the country’s traditional strengths rather than anything innovative that might cannibalise those famous manufacturing companies. In fact, the list of charges is long – out-of-date skills, a labour market that cannot well accommodate expanding sources of labour supply (women, over-60s, immigrants) because of the vocational and apprenticeship structures, a weak digital infrastructure, and of course a disastrous energy policy over many years.

Is this really the end of the German miracle, or another of those episodes when what looks like a fatal weakness one decade will turn out to be just what is needed the next? As the author says in the prologue, “A British journalist and friend of mine warned me not to write this book. He said that the over-arching lesson in his professional life has never been to bet against the German economy.” The 5G is terrible and the trains are worse than ours in the UK, but German towns are still visibly more prosperous than many of their British counterparts. On the other hand, people still generally use cash – the ATM at the airport in Hamburg a while ago gave me a €100 note, which is just unimaginable in other European countries. And people aren’t using the apps so familiar to us to navigate or find a restaurant because they just won’t load over the terrible mobile networks.

So I don’t know whether the German miracle is permanently broken or not but this is an eye-opening read. And of course there’s the message Germany’s voters are about to send the country’s political establishment next month – whatever it turns out to be.

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The social life of ideas

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I re-read a book I first read in 2002 when the first UK paperback was published, Louis Menand’s magnificent The Metaphysical Club: A story of ideas in America. It takes a sweeping view of the reshaping of the climate of ideas in the US after the Civil War, when pre-war traditions were replaced thanks to a combination of influences: the professionalisation of intellectual life in universities, the impact of scientific discovery particularly Darwin, and indeed the consequences of the Union victory. By the late 19th century the broadly defined pragmatist perspective that lasted until the 1960s – including an accommodation among White Americans over the status of African-Americans – was in place. The story is told though the intertwined histories of William James, Charles Peirce, Oliver Wendell Holmes and John Dewey.

The book lived up to my memory of its excellence, although newly poignant as the idea of an intellectual life among the new US ruling class seems increasingly like a contradiction in terms. I picked out moments that speak to my current preoccupations. For example, on the impact of The Origin of Species, that it emphasized difference or variation as an organising principle, not common characteristics. Some quotes that seem particularly relevant now: Everything human beings do by choice rather than by instinct, and course of conduct they choose when they might have chosen differently, is a moral action.”

William James arguing that society is the fact of life, and the idea of a non-social individual is pure abstraction, while Dewey agreed that there are no individuals without society: “Dewey taught that doing is why there is knowing.” Holmes meanwhile argued that experience – which defines the practice of justice – “is social, not psychological”, his construct of how the ‘reasonable man’ would judge being defined with respect to society.

Menand concludes: “Everything James and Dewey wrote as pragmatists boils down to a single claim: people are the agents of their own destinies. They dispel the fatalism that haunts almost every 19th century system of thought. … What Holmes did not share with those thinkers was their optimism. He did not believe that the experimental spirit will necessarily lead us, ultimately, down the right path. Democracy is an experiment, and it is in the nature of experiments sometimes to fail.” As he had seen it fail as a combatant in the Civil War.

Of course it won’t do to project today’s angst directly onto a 20+ year old book. But it is a brilliant and highly relevant read.

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Robots among us

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I ended up with mixed reactions to Waiting for Robots: The Hired Hands of Automation by Antonio Caselli.

The powerful point it makes is the complete dependence of AI and digital technologies generally on ongoing human input. Many years ago, my husband – then a technology reporter for the BBC – was digging out the facts about a hyped dot com company called Spinvox. Its business was said not be automated voice transcription, but it turned out the work was mainly done by humans, not computers (although the story turned scratchy –  the linked post responds to the company’s points). Waiting for Robots gives many examples of apps that similarly involve cheap human labour rather than digital magic – I was surprised by this. Less surprising – and indeed covered in other books such as Madhumiat Murgia’s recent Code Dependent – is the use of humans in content moderation (remember when big social media companies used to do that?), data labelling and other services from Mechanical Turk to reinforcement learning with human feedback for LLMs.

The book also claims much more as ‘labour’ and this is where I disagree. Of course big tech benefits from my digital exhaust and from content I post online such as cute dog photos. But this seems to me categorically different from often (badly) paid employment relationships. Although the stickiness of network effects or habit might keep me on a certain service, although the companies might set the defaults so they hoover up my activity data, the power dynamics are different. I can switch, for instance from X to BlueSky, or from Amazon to my local bookstore. So I’m not a fan of portraying these types of data-provision as more ‘digital labour’.

Having said that, the book makes a compelling case that robots and humans are interdependent and will remain so. Generative AI will continue to need human-produced material (‘data’) and intervention to avert model collapse. Humans are also going to have to pay for digital services so will need to have money to pay with. Focusing on the economic dynamics involved is crucial, as it is clear that the market/platform/ecosystem structures are currently tilted towards the (owners of) robots and away from humans. So, for all that I’m not persuaded by the classification of different types of ‘digital labour’ here (and find the anti-capitalist perspective on tackling the challenges unpragmatic apart from anything else), there is a lot of food for thought in Waiting for Robots.

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The tech coup

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It’s some months since I read Marietje Schaake’s The Tech Coup, as she delivered the ST Lee Poicy Lecture here in Cambridge last November 11th, right after the US presidential election. Just a short time later, her warning looks even more prescient than it did on the day, as the American tech executives bend the knee at the court of Mar A Lago.

Most of the book is a descriptive analysis of how the US tech companies have come to occupy such a central role in daily life and in the politics of the west, often under the cover of “innovation” and their role in delivering economic growth. The chapters pick up on specific concerns, such as facial recognition being used by police forces as well as authoritarian regimes, misinformation on social media, the cyber insecurity due to corporate practices, and the loss of sovereignty by states other then the US. The thread running through all these is the vanishing concern for the public interest in the development and deployment of digital technology. While the issues are sadly familiar, Schaake brings the unique perspective of someone who was an MEP with responsibilities for the digital sector and now a Stanford University academic, in the heart of Silicon Valley.

The conclusion is titled, “Stop the tech coup, save democracy.” she writes, “The tech coup shifting power from public and democratic institutions to companies must stop.” But continues, “Invisibly or indirectly, a whole host of technologies is privatizing responsibilities that used to be the monopoly of the state.” As I write this post, the headlines today feature Mr Musk getting an office in the White House later this month, the European Commission ‘pausing’ its anti-trust actions against the big US tech firms under the EU DMA to consider the political ramifications, and the UK government, on the advice of a tech investor, going gung-ho on getting AI used through the public sector asap. Interestingly, yesterday I took part in a webinar at ICRIER, the Delhi-based think tank, where there was much emphasis on the direct role of the state in running digital public infrastructure. Public options must surely be a part of, not stopping, but turning back, the coup – or if you prefer a less dramatic turn of phrase, putting public interest back at the centre of innovation in this amazing technology.

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Engineers and their problems

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I bought Wicked Problems: How to engineer a better world by Guru Madhavan because of a column by the author in the FT, The Truth About Maximising Efficiency: it argues that governments, like engineered artefacts and indeed our bodies need some redundancy and safety marging. How true!

I enjoyed reading the book but in terms of analysis didn’t get much out of it beyond the FT column. It advocates a systems engineering approach even to ‘hard’ problems ie. well-definable ones. It classifies problems into hard (solvable), soft (only resolvable) and messy (need redefining) and takes wicked problems as the union of these categories. It was interesting to me to read a critique of engineering similar to the one I apply to economics, namely that engineers too often ignore the normative or political context for their solutions. The book sort of makes the case that engineering is social but not in a particularly clear way.

Having said that, the book has lots of examples of messiness and wickedness from the world of engineering, and particularly aircraft training and engineering. It focuses on the career of Ed Link – whom I had never heard of – who went from making player pianos to inventing the first on the ground flight training simulator to inventing and building submersible vessels. The book is full of the kind of fact that pleases me no end – for example that black boxes are orange and were created by Lockheed Air Services along with food company General Mills and a waste disposal company, Waste King. Also – tragically relevant – that engines are tested for resilience against bird strikes by lobbing chickens at them – real birds rather than imitation ones, and freshly killed rather than frozen and defrosted. A cited paper by John Downer, When the Chick Hits the Fan, observes that birds have adapted to devices meant to scare them away, so there is a sort of arms race between engineers and birds. (The paper is fascinating – there is an expert debate about how many birds of what size and being lobbed in how fast constitute an adequate test. The resulting pulp is known as ‘snarge’.)

Most of the examples of wicked problems in the book involve engineering rather than social problems. On the one hand, that’s an issue because we tend to think of wicked problems as social and political – paying for the groing need for adult social care, for example, On the other hand, the one main example of that type, reducing homelessness among veterans in the US, discusses how to get the different agencies and stakeholder to talk to each other and respect their differences. but doesn’t in the end describe a solution. Perhaps the moral one is meant to take is that wicked problems don’t have a solution?

All in all, an enjoyable read, and I for one am on board with systems engineering approaches, resilience and organisational flexibility.

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