Tag Archives: technology

Algorithms and (in)justice

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It’s been one of those weeks. One of those years, actually – David Bowie *and* Leonard Cohen. Listening to ‘Democracy‘ as I write this.

Still, I have managed to read Cathy O’Neil’s excellent Weapons of Math Destruction, about the devastation algorithms in the hands of the powerful are wreaking on the social fabric. “Big data processes codify the past. They do not invent the future. Doing that requires moral imagination, and that’s something only humans can provide. Sometimes that will mea putting fairness ahead of profit.”

The book’s chapters explore different contexts in which algorithms are crunching big data, sucked out of all of our recorded behaviours, to take the human judgement out of decision-taking, whether that’s employing people, insuring them or giving them a loan,  sentencing them in court (America, friends), ranking universities and colleges, ranking and firing teachers….. in fact, the scope of algorithmic power is increasing rapidly. The problems boil down to two very fundamental points.

One is that often the data on a particular behaviour or characteristic is not observed, or unobservable – dedication to work, say, or trustworthiness. So proxies have to be used. Past health records? Postcode? But this encodes unfairness against individuals, those who are reliable even though living on a bad estate, and does so automatically with no transparancey and no redress.

The other is that there is a self-reinforcing dynamic in the use of algorithms. Take the example of the US News US college ranking. Students will aim to get into those with a high ranking, so they have to do more of whatever it takes to get a high ranking, and that will bring them more students, and more chance of improving their ranking. Too bad that the ranking depends on specific numbers: SAT scores of incoming freshmen, graduation rates and so on. These seemed perfectly sensible, but when the rankings they feed into are the only thing that potential students look at, institutions cheat and game to improve these metrics. This is the adverse effect of target setting on addictive crystal meth. Destructive feedback loops are inevitable, O’Neil points out, whenever numerical proxies are used for the criteria of interest, and the algorithm is a black box with no humans intervening in the feedback loops.

The book is particularly strong on the way apparently objective scoring systems are embedding social and economic disadvantage. When the police look at big data to decide which areas to police more harshly, the evidence of past arrests takes them to poor areas. A negative feedback loop – they are there more, they arrest more people for minor misdemeanours, the data confirms the area as more crime-ridden. “We criminalize poverty, believing all the while that our tools are not only scientific but fair.” Credit scoring algorithms, those evaluating teachers using inadequate underlying models, ad sales targetting the vulnerable – the world of big data and algos is devastating the lives of people on low incomes. Life has always been unfair. It is now unfair at lightning speed and wearing a cloak of spurious scientific accuracy.

O’Neil argues that legal restraints are needed on the use of algorithmic decision-making by both government agencies and the private sector. The market will not be able to end this arms race, or even want to as it is profitable.

This is a question of justice, she argues. The book is vague on specifics, calling for transparency as to what goes in to the black boxes and a regulatory system. I don’t know how that might work. I do know that until we get effective regulation, those using big data – including especially the titans like Facebook and Google – have a special responsibility to consider the consequences.

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The trade-investment-service-intellectual property nexus

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I’ve managed to resist reviewing Richard Baldwin’s new book The Great Convergence: information technology, trade and the new globalization until now, and it has taken serious self-restraint as the book is so relevant to (among other things) the Brexit debate. I would for one thing force every Cabinet member to read it and not allow them to keep their jobs unless they could pass an exam based on it. Anyway, the book’s published on 14th November and now it’s November my self-denying ordinance can end.

The Great Convergence offers a compelling framework for thinking about how trade is organized and why and how it benefits whom. The first part is a historical overview of trade leading up to the first, the Old Globalization or the 19th century. This phenomenon, due to steam power reducing trading costs, industrialization and a context of relative global peace led to the Great Divergence: the major economies of Asia, which had been richer than the West, fell behind, dramatically so over the course of two centuries. The New Globalization, since the 1980s, driven by the new information and communication technologies, has taken the rich countries’ share of global output back to its 1914 level in little over two decades. China is the standout story, going from uncompetitive in 1970 to 2nd biggest in the world by 2010, but other rapidly industrializing nations in the New Globalization are Korea, India, Poland, Indonesia and Thailand (ie. a different group from the notorious BRICs).

However, as the book goes on to document, the New Globalization is a completely different kind. Trade over distance has three costs: the costs of moving goods, ideas and people. When moving goods got cheap, the first explosion of trade occurred, but ideas were costly to move so the innovations of the industrial revolution were not easily exported. The Old Globalization was the result of low shipping costs and high communication costs. ICTs have reduced the latter significantly, so industrial competitiveness is defined in terms of production networks, interlinked supply chains, that cross national borders. Knowledge has been offshored, and the rapid growth in a few previously poorer countries has come about because of their geographical location, close enough to G7 industrial centres that managers can travel there, sharing knowledge within the confines of the production network.

This means the New Globalization happens at the level of stages of production and occupations. This makes it harder to predict who will be affected – which jobs will be offshored, which areas most affected. “Nations are no longer the only natural unit of analysis”. Much of the book describes a new data set making it possible for economists to begin to explore the ‘value added’ pattern of trade created by the switch from trading finished goods toward trading components in global production chains. The picture is going to be utterly different – the famous example being the iPhone which is sourced conventionally as a Chinese export to the US but where the value added is concentrated in the American business and the Chinese import a lot of the components they assemble and re-export with not much value added at that stage.

This is one insight the Brexiteers need to appreciate, although the Nissan letter suggests at least some members of the government realise the signficance. British businesses are woven into supply chains with our near neighbours: we aren’t importing prosecco and salami so much as gear boxes. Brexit threatens to tear apart these links. If the cost appears to be too high, the multinationals at the head of the supply chains will relocate chunks of their production networks, and won’t care if they’re exporting gear boxes to the Czech Republic rather than Britain.

The book adds: “Twenty-first century supply chains involve the whole trade-investment-service-intellectual property nexus, since bringing high quality, competitively priced goods to customers in a timely manner requires international coordination of production facilities via the continuous two-way flow of goods, people, ideas and investments. Threats to any of these flows become barriers to global value chain participation…” Baldwin adds that the movement of people is still a binding constraint on globalization, and face-to-face communication – and so distance – remain important. He argues that the improving quality of telepresence is changing this, but I think that remains to be seen.

Ultimately, trade policy today is not just about trade nor about nations. It involves deploying the nation’s productive resources through overseas connections. This is why 90% of the economics profession thought, and thinks, Brexit so damaging, and the idea that the UK has more economic self-determination outside the EU a delusion. The Great Convergence is not about Brexit – it ranges far wider. I can’t imagine a better and more accessible analysis of trade and globalization in the digital era.

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(20 November: minor typos corrected)

Humans need not apply

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As one would of course expect from the economics correspondent of The Economist, Ryan Avent has written a very clear account of the way digital technologies, and the globalisation driven in part by technology, is changing the ways people can earn a living. The Wealth of Humans: Work and its Absence in the 21st Century brings together the debate about robots destroying jobs, arguments about the ‘death of distance’ and literature on the re-emergence of cities as economic hubs, the issue of inequality, and the more recent discussion of whether or not the world is in for an era of ‘secular stagnation’. The focus is on three related trends: automation, globalization, and the enhanced productivity of a highly skilled minority of people.

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It ends up being a rather pessimistic synthesis. The starting point is unarguable: “Society must go through a period of wrenching political change before it can agree on a broadly acceptable social system for sharing the fruits of this new technological world.” A few years ago this would have seemed hyperbole, but no more. And yet the rest of the book tends to suggest that this political change cannot happen. Essentially, Avent does not believe enough people can become educated or skilled enough to share the benefits of automation and globalisation with those happy few whose cognitive skills have made their incomes increase. He does not think as many as 50% can complete tertiary education. “The proportion of highly educated workers to less educated workers is no longer going to grow in the growth-boosting, inequality-dampening way it once did.”

Part of this, I’d take issue with. I don’t agree that skill upgrading has ‘run out of steam’. The character of tertiary education clearly needs to change; we are in a stage like the persistence of classical education in the late 19th century. The educational establishment is slow to change – but it will, or it will be disrupted. But I’m much more persuaded by James Bessen’s argument (in Learning by Doing) that in the later stages of the technological transformation of production, the necessary skills are steadily standardised and thus able to be codified and taught. And, while addressing the ‘lump of labour’ fallacy, Avent nevertheless argues that, “The problem is the sheer abundance of labour.” Yet he also sees technology replacing ‘expensive’ labour. Surely labour=people=knowledge, pretty key in an endogenous growth, knowledge-based economy. It seems more likely that ‘work’ will be redefined, with a role for appropriately skilled humans, as it has been so many times before.

There are some very nice details indeed in the book. I didn’t know that Robert Gordon used to ask audiences whether they would rather give up post-2000 technology or indoor plumbing – the answer used to be the former, until smartphones came along. And indeed in the developing world, people would clearly rather have their phones and the internet. (An aside: indoor plumbing is a great example of why technology is social more than it’s technological. It’s a simple and well-known technology, yet one many countries are unable to make work for them.) Arvind Subramanian’s term ‘fluff not stuff’ for weightlessness (cf The Weightless World) was new to me, although perhaps a little too derogatory-sounding for the source of most of the value-added in developed economies.

Avent concludes that the reason to be pessimistic is that there is ‘no-one in control’, able to pilot society wisely through the upheaval. Looking back over the past 200 years, someone thinking they are ‘in control’ seems a pretty bad idea to me. But, to get back to the starting point, the politics, I’d agree that this is the territory for pessimism. Where leadership to generate a sense of progress and confidence would be desirable (because expectations matter no end for the economy), we have politicians reacting to people’s fears. It’s understandable, but it isn’t what we need.

Different and alone

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Courtesy of striking French air traffic controllers, I had a longer journey back from Toulouse than I’d expected today, and managed to read the whole of Olivia Laing’s thought-provoking book [amazon_link id=”1782111239″ target=”_blank” ]The Lonely City: Adventures in the Art of Being Alone[/amazon_link].

[amazon_image id=”1782111239″ link=”true” target=”_blank” size=”medium” ]The Lonely City: Adventures in the Art of Being Alone[/amazon_image]

It wasn’t what I’d expected from the reviews, which made it seem like a kind of travelogue about her having some time alone in New York and reflecting on modern urban life; I’m a sucker for books about sitting in foreign cafes feeling a sense of anomie while writing in one’s notebook. Instead, [amazon_link id=”1782111239″ target=”_blank” ]The Lonely City[/amazon_link] is more a sort of successor to Susan Sontag’s [amazon_link id=”0141187123″ target=”_blank” ]Illness as Metaphor[/amazon_link] with a soupcon of Patti Smith’s [amazon_link id=”0747568766″ target=”_blank” ]Just Kids[/amazon_link]. Through her research into the work and lives of four artists who engaged with and battled with loneliness, but also with poverty, rejection, AIDS, Laing actually gives us a profound discussion of society’s inability to tolerate difference.

She also reflects on the role of our use of digital contact through social media and always being online – using it as a shield against human contact and at the same time a means of human contact. Laing notes the trajectory of Sherry Turkle’s assessment of digital tech through her trilogy, [amazon_link id=”0262701111″ target=”_blank” ]The Second Self[/amazon_link] (1984), [amazon_link id=”0684803534″ target=”_blank” ]Life on the Screen[/amazon_link] (1995) and the far more pessimistic [amazon_link id=”0465031463″ target=”_blank” ]Alone Together[/amazon_link] (2011).

Andy Warhol, one of the artists discussed by Laing, predates Twitter and Facebook. What would he have done with them, I wonder?

Digital and democracy

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I’ve been dipping into [amazon_link id=”0691167346″ target=”_blank” ]Digital Keywords[/amazon_link] edited by Benjamin Peters. This is in the chapter ‘Democracy’ by Rasmus Kleis Nielsen: “Attempts to assess the effects of digital technology use on political participation have again and again found only modest effects and often a ‘reinforcement’ tendency whereby the digital technology use may correlate with political participation, but mostly in ways where already-engaged groups are even more engaged and less-engaged groups are no more engaged. Digital technologies offer easier access than anything else, but for many, apparently, access is less of a barrier to political participation than inclination (or confidence that even trying is worth one’s while).”

[amazon_image id=”0691167346″ link=”true” target=”_blank” size=”medium” ]Digital Keywords: A Vocabulary of Information Society and Culture (Princeton Studies in Culture and Technology)[/amazon_image]

The circumstances in which click-ability leads to a reduction in transactions costs or barriers, and those in which it doesn’t, is surely worth some research. But while the above argument is plausible, it does seem worth worrying about the way the filter bubble can reinforce social and political chasms. This by Tom Steinberg puts it eloquently.