Author Archives: Diane Coyle

It’s the economy, stupid

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Collapse: The Fall of the Soviet Union by Vladislav Zubok was unexpectedly gripping. It’s a large tome, and I can’t remember how it came to be in my pile. But perhaps it’s because the events collectively described as the collapse of Communism marked history as part of my own life that I found the detailed descriptions here of Soviet politics over the years from the arrival of Garbachev and the collapse of the USSR so compelling. In the late 1980s I was working for DRI Europe where my job included trying to understand perestroika and the Soviet economic reforms to explain to clients. We were on holiday in remote Herefordshire watching the fall of the Berlin Wall on a small black and white TV, whose grainy footage felt somehow appropriate for a world historical event. Then came the Czechoslovak Velvet Revolution and the not-at-all-velvet overthrow of the Ceaucescus in Romania over the Christmas holiday. German re-unfication. And of course the collapse of the USSR and western ‘victory’ in the Cold War. If only we’d realised then that the West was a construct of the same system, except that its collapse on our side of the Iron Curtain would be a slower business.

Anyway, aside from the fascinating detail, the message I took away from Collapse was the perennial: it’s the economy, stupid. If there’s high inflation and people’s living standards are falling because of food shortages and other problems, you will have zero political room for manoeuvre and will open the way to political snake-oil peddlers to offer “easy” solutions. Oh.

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The path not taken in Silicon Valley

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The Philosopher of Palo Alto: Mark Weiser, Xerox PARC, and the original Internet of Things by John Tinnell is a really interesting read in the context of the latest developments in AI. I do have a boundless appetite for books about the history of the industry, and was intrigued by this as I’d never heard of Mark Weiser. The reason for that gap, even though he ran the computer science lab at Xerox PARC, is probably that his philosophy of computing lost out. In a nutshell, he was strongly opposed to tech whose smartness involved making people superfluous.

Based on his reading of philosophers from Heidegger and (Michael) Polanyi to Merleau-Ponty, Weiser opposed the Cartesian mind-body dualism involved in Turing’s (1950) paper and the subsequent development of late 20th century digital technologies focused on ‘machines that think’, electronic brains. He aimed to develop computing embedded in the environment to support humans in their activities, rather than computing via screens that aimed to bring the world to people but through a barrier of processing. In one talk, he gave the analogy of what makes words useful. Libraries gather many words in a central location and are of course very useful. But words that ‘disappear’ into the environment are also useful, like street signs and labelling on packages in the supermarket. Nobody would be able to shop efficiently if there were no words on the soup cans, and they had to go to a library to refer to a directory of shelf locations to find the tomato flavour.

Weiser emphasised also the role of the human body in knowledge and communication: “The human body, whatever form it took, was a medium not a machine.” In a dualist conception of mind and body it seems to be reasonable to think about a machine substituting for the activities of the mind. But the body’s senses are not information processors, and cannot be substituted by digital sensors. Embodied human experience in the world is part of human knowledge. Weiser became highly sceptical of the industry’s trajectory whereby software more and more “dictated what could and could not happen in a place.” Rather than mediating between the physical world and humans, tech should be looking to augment the material world in useful ways (hence the subtitle about the original Internet of Things).

Weiser died young, another possible reason why he is not better known. One can imagine though what he would have thought of generative AI. The book’s Introduction ends with a quote from Lewis Mumford: “The machine is just as much a creature of thought as the poem.” These AI products have been imagined as disembodied brains that get in the way of our direct experience of the world and indeed increasingly limit our ability to shape the world we want. A really interesting read, and one that will send me off to read other things – including the work of a PARC ethnographer who is really the second hero of this book, Lucy Suchman.

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Boys, brilliance and science

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I polished off Athene Donald’s manifesto, Not Just for the Boys: Why We Need More Women in Science at the weekend. Athene is a friend as well as the Master of my college (Churchill) at Cambridge so I was going to be well-disposed towards the book, and indeed found it both persuasive (not that it would have taken much) and a good read. There is plenty of evidence provided, statistics are cited, but you don’t feel as if you’re being sledge-hammered as a reader. There is too much common sense for it to come across as pure polemic, including the point that extreme gender imbalances in the other direction are not healthy for society or the process of discovery either.

The main point that stands out for me is that the male skew is highest in all the disciplines where ‘brilliance’ or being ‘really, really smart’ is seen as the key attribute. So “in science” is an over-generalisation. What’s needed is more women in physics, computer science, maths, and also philosophy and of course economics. Some of the other natural and human sciences as well as many arts subjects (but not music composition, surprisingly) skew female. ‘Brilliance’ isn’t just ‘clever but more so’; it’s a type of performative intelligence demanding supreme self-confidence, and I’m a bit suspicious of it in general; or, rather, think it leads to other kinds of insight and attributes being inappropriately undervalued.

Anyway, Athene and I and the wonderful Tabitha Goldstaub will be discussing the book and the issues it raises at an in-person event in Cambridge in the autumn.

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Coffee and communism

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“This project was hugely successful, perhaps one of the most effective aid projects ever conducted.” What would you guess this to be?

The line is from Katja Hoyer’s Beyond The Wall: East Germany 1949-1990. The context was the fact that the GDR ran out of coffee in 1977. “Afternoon coffee had become a daily ritual, not just comforting but essential as a psychological crutch,” Hoyer writes. It signalled stability and material comfort after the deprivations the middle-aged and older generation had experienced as young adults. The commodities crisis and the GDR’s chronic lack of foreign exchange meant the country couldn’t import any more coffee. What to do?

The solution was to come to a fraternal socialist arrangement with Vietnam, desperately poor after its own conflict. “East Germany could help the brother state rebuild itself while solving its own coffee problem.” GDR provided an enormous aid package and helped build massive infrastructure including a hydropower plant, and in return would get half of Vietnam’s coffee output for 20 years.

Vietnam now produces 20 million 60kg bags of coffee a year – almost all exported – in an industry employing 2.6 million people, the book reports. Unfortunately for East Germany, the coffee plants didn’t produce their first beans until 1990, too late to save the Communist regime. The coffee shortage was a striking illustration of the economy’s long-term unsustainability. It was too small and unproductive to continue to provide enough material and consumerist comforts to keep the population satisfied.

For a few years in the late 1980s a small part of my job involved monitoring the Soviet economy during the era of perestroika. The best estimates in the west (the CIA’s) over-estimated the strength of the planned Communist economies in the years running up to 1989. Extensive borrowing – and for the USSR itself, resource exports – was needed to fund enough consumption for political stability, given low productivity. Beyond The Wall is very interesting in its highlighting of the social benefits of the stability and the growing comforts East Germany provided its population; for a (significant) minority life there was intolerable, but for the majority it had some compensations. Until it didn’t.

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False lessons from history

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Economic crises are clearly all different – they can be triggered by many types of shock, and occur in many different contexts. Yet we hope to bring to bear on each new crisis lessons learned in dealing with earlier ones. Thus Ben Bernanke’s deep study of the Great Depression was generally seen as a plus in his presence as Fed Chair in the 2008 Great Financial Crisis. Similarly, Reinhardt and Rogoff argued, with the ironic choice of title for their book This Time Is Different, that there are in fact commonalities in all debt crises due to the arithmetic of debt dynamics.

A very enjoyable new book by Harold James, Seven Crashes: The Economic Crises That Shaped Globalization, applies the lens of whether each the seven advanced or set back the process of globalization to crises ranging from famines and blights in the 1840s via wars and depressions, commodity price hikes in the 1970s, the GFC and the Covid lockdowns and Russian invasion of Ukraine.

Very broadly speaking, he suggests that supply shocks tended to advance globalization as economic activity reorganised itself around the shocks to find new sources of supply. These shocks always reveal narrow bottlenecks. Never mind Ukrainian sunflower oil and grain; who knew that the country also produced 90% of the neon gas needed to manufacture semi-conductor chips? Demand shocks tended to do the opposite, and lead to a retreat from global markets, tending to be deflationary. This is not a hard and fast rule, not least because demand and supply soon interact.

However, that’s as far as the generalization goes. The author – a very eminent economic historian – sets out a key argument early on: “The turning points of globalization in a world that is industrialized and interconnected do not resemble each other. Each moment of crisis challenges individuals, businesses and governments in new and unprecedented ways, and leads to a redrawing of the mental map.” Each time is different. He argues, furthermore, that it is a mistake to try to learn lessons from the past – new problems need new solutions, rather than policymakers who are focused on fighting the previous (metaphorical) war.

The bulk of the book consists of chapters giving an account of the context and specifics of each of the selected crises. These are masterly concise essays, covering the economic events but also weaving in the influential economic ideas in each case, often through a chosen examplar such as Keynes. The book also resists the temptation of offering a final ten bullet point recommendations for tackling the next crisis. Because it will be different.

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