As a novice and layman, I wanted a cut-through-the-hype book to educate me on the implications of AI. This was a decent choice for a non-technical sumAs a novice and layman, I wanted a cut-through-the-hype book to educate me on the implications of AI. This was a decent choice for a non-technical summary. My notes are below.
The authors start with the analogy of electricity disrupting existing technologies in the past century. They classify disruptions in three categories – point solutions, application solutions, and system solutions – in increasing order of implementation complexity. System solutions (a complete reimagining of the system given a blank canvas) may provide the biggest bang for the buck but will provoke the most pushback from existing incumbent technologies. Decisions involve two components – prediction, and judgment.
The authors posit that AI prediction will replace most human-dominated prediction, but judgment will likely involve some human elements. Exactly *which* humans will perform the judgment is debatable: almost certainly not the same ones that exercise that judgment today.
Many systems are rule-based today; examples abound, standard operating procedures, specifications, rule-of-thumb, etc. AI replaces rules with predictions. However, rules increase reliability. Where interdependent entities are involved, AI will necessarily decrease reliability in the short term until new system dynamics are devised.
Many “edifices” and “scaffolding” have been built up to hide the uncertainty and inefficiency in the rules we have adopted. E.g., restaurants and shopping in airports rather than simply catching your flight just-in-time. AI can reduce uncertainty by exposing these edifices and making them obsolete.
Rules glue together components of a system to increase reliability. It is hard for AI to replace one rule with a prediction because this breaks the system. More radical change may be called for.
Task-level replacement of operational functions with AI is not the best framework to think about potential applications. Deeper system-level thinking about how to improve decision making with AI based predictions is needed.
Better prediction of likely hypotheses to test (automated hypothesis generation) has been one of the breakthrough applications of AI technology in biology research. i.e., AI drives more targeted innovation.
Compared to other technologies where being a “fast follower” often incurs fewer costs than the “first mover”, AI delivers strong benefits to the early adopters. The reasons being – earlier access to data, and quicker feedback loops to improve predictions.
Prediction and judgment are the two main ingredients to decision-making. Prediction generates the probabilities of various events in the decision tree while judgment calculates the payoffs. When AI decouples these two ingredients, it also changes who makes the judgment. So traditional decision making is turned on its head with today’s heroes becoming tomorrow’s zeros.
Codifying the judgment component can be via learning from others, or by experience (feedback loops). Investment needed for this codification may be tough to justify initially because it may be expensive compared to today’s situation where the same person may be doing both prediction and implicit experience-based judgment.
Where decision-making power resides depends on four factors: information; skills; incentives; coordination. When AI disrupts, the location of these factors and therefore the source of power changes drastically.
Moving prediction to AI has “bullwhip” effects on other systems downstream and upstream. It will reduce reliability, forcing sequential change. Coordination and modularity are two ways to insulate the bullwhip effects, but both have pros and cons.
Designing systems from blank slate via a framework of - mission, decisions, predictions, and judgments – can be educational. The authors walk through interesting examples of insurance and healthcare (emergency triaging).
Epilogue on AI discrimination: some interesting research comparing human discrimination vs. AI. Unsurprisingly, humans are more likely to be discriminatory than AI, but this is less perceptible because of scale; AI predictions often operate at larger scale and volume where discrimination becomes easily exposed. This can be advantageous because it can be corrected faster. Basically, the authors’ contention is that the hullaballoo about AI discrimination is overblown.
Two points which were severely glossed over in my opinion.
When prediction becomes AI-based, the authors keep stressing that judgment will remain the purview of humans so the fear of “machines taking over” is unwarranted. But which humans now judge? Not the same ones as before for sure, and not as many as before for sure! Programmers that codify judgment now will have this new role compared to today’s human ones. And fewer programmers will be needed. This is a major automation disruption of the employment market that will certainly rock the world.
The concentration of power in the hands of the AI winners seems a scary proposition to me. But I have a very dim view of the moral compass of profit seeking corporations, and an even dimmer view of the regulators and government that supposedly rein them in, so mine may be a pessimistic view.
All in all, I found this book very educational indeed despite some repetition. Highly recommended book for someone trying to make sense of the new AI hype!
A worthwhile and ambitious attempt to recast economics in a new world, Doughnut Economics is an engaging, literate, and occasionally annoying read.
TheA worthwhile and ambitious attempt to recast economics in a new world, Doughnut Economics is an engaging, literate, and occasionally annoying read.
The author's contention is that classical economics has penetrated every facet of modern life and although it has undoubtedly improved living standards dramatically, it has run its course. Sticking to simplistic neoclassical economics to drive finance and public policy is a surefire recipe for disaster with the myriad crises of climate change, rampant inequality, return of authoritarian regimes, etc. confronting us today. Ms. Raworth bemoans the academic discipline of economics, at least as taught today with comfortable two-axes diagrams. She proposes a radical shift in thinking about economics by focusing on sustainable progress instead with the following visual of a doughnut”. I did get a little tired of the doughnut metaphor but accept that it represents sustainable economics pretty well. [image]
Ms. Raworth proposes the following seven areas for policy theorists and governments to work on. [image] Here are my interpretations.
Change the goal. The focus on GDP as a metric for "progress" is flawed beyond redemption. The remorseless drive to more profits is catastrophic for our planet and our well-being. Include more fuzzy numbers not represented today in the metrics such as women’s unpaid labor, mental well-being, etc.
Expand the view of the economy beyond business and households by including critical actors like the market, the state and the creative commons.
Discard the Chicago school “rational actor” in favor of a more realistic human personality.
Discard simplistic mechanical equilibrium principles to analyze real world economic problems. Use systems thinking with dynamic equilibria (both stable and unstable) and feedback loops to analyze the economy.
Don’t assume that the market will distribute wealth equitably. It won’t. Design policy to be distributive from the start.
Don’t assume that the market values the environment. Externalities are most definitely not priced into the economy. Design policy and processes to be sustainable and “circular” from the start.
Accept that infinitely rising GDP is inherently unsustainable to the planet. Focus on improving quality of life and regenerative processes instead.
Now for the slightly annoying parts. Firstly, the book comes across as a little preachy – probably forgivable. A lot of the book was “preaching to the choir” in my case, so most of the arguments made perfect sense to me, a receptive audience. However, my second problem was that it seemed that the author belabors points which should be self-evident to most folks who read, think, and work in these fields. Which self-respecting economist today subscribes to any of the following?
Oh, the rational actor paradigm is still alive and kicking and has great explanatory power. Simple supply and demand curves work great. Oh, wealth will trickle down to the oppressed masses once the mega-billionaires get tired of their superyachts. Oil and gas companies are intrinsically motivated to clean up the environment. Corporations will run circular or regenerative sustainability programs out of the goodness of their hearts.
If any exist, I’d like to sell them a gold mine or two! I’m assuming that most public policy theorists and economics graduates are thinking about these issues in much more nuanced fashion.
Anyway, those were minor critiques but where this book falls seriously short in my opinion is articulating a plausible chart of “now” to “tomorrow”. Exactly how do we convince governments, entrenched people and processes to change? After all, in Upton Sinclair’s pithy words,
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
Still an engrossing read and one that summarizes a lot of content in concise form. Highly recommended and I’m rooting for the causes that Ms. Haworth is clearly passionate about!...more
Apparently, anything from the flapping of a hummingbird in Peru and the price of tea in Bangladesh is because the world's economies have contracted toApparently, anything from the flapping of a hummingbird in Peru and the price of tea in Bangladesh is because the world's economies have contracted too much national debt and we are all due a serious spate of inflation. Reading this in 2022, this feels like an amazing prediction - except even a stopped clock reads correctly twice a day.
I found this a poorly argued and extremely unconvincing book. The author throws in several self-aggrandizing anecdotes, a dash of monetary hawkishness, and a pinch of humor, and declares that she has identified "signals" to navigate the economy. Several elementary "correlation does not equal causation" errors later, it was pretty clear that all her data merely served her previous confirmation bias.
After reading Nate Silver's "Signal and the Noise", I declare this book is clearly noise. Give it a miss....more
Fascinating read about the murky world of commodity traders. In theory, these companies - Glencore, Cargill and others mentioned - make markets more eFascinating read about the murky world of commodity traders. In theory, these companies - Glencore, Cargill and others mentioned - make markets more efficient by taking advantage of pricing anomalies, of course profiting handsomely in the process. In practice, it looks like the way they do it is through some seriously unsavory tactics - bribery, violence, corruption, revolutions are all par for the course. I found the anecdotes about how these companies avoid country sanctions (Iran, Russia etc.) really interesting. The final chapter was a great summary of market trends that have probably obsoleted some of these companies but given birth to more opportunities elsewhere.
A bit anecdote heavy so you will have to uncover the main threads but a great read nonetheless....more
(Update: A brilliant FAQ on crypto and all its related technologies - blockchain, DAO, web3 etc. - on the NYT: https://www.nytimes.com/interactive/2..(Update: A brilliant FAQ on crypto and all its related technologies - blockchain, DAO, web3 etc. - on the NYT: https://www.nytimes.com/interactive/2... was actually more useful to me than this book.)
This was my first introduction to the crazy world of cryptocurrency so clearly, I’ve been living under a rock for the past decade. Although the book was meticulously researched in terms of anecdotes about the weirdos, brilliant programmers, libertarians, criminals, and eccentrics of every description that have fueled the rise of cryptocurrencies, it came up short in several areas where I was hoping to learn more.
Are these cryptocurrencies closer to a currency or a commodity? They definitely fulfill some of the supposed attributes of a currency but the book did not really discuss these in any depth.
Durability: Yes. Crypto is arguably more durable than a currency note.
Portability: Partial. Crypto is likely to be more portable than a piece of paper but still requires a mobile phone, Internet access and power – not things to take for granted all over the world.
Divisibility: Yes. In theory, more divisible than fiat currency.
Uniformity: Yes. One unit should be clearly defined so no problem here.
Limited Supply: Yes, but with caveats. Bitcoin for example is hard-capped at 21M by definition. Fiat currency generally limits supply to avoid inflation but this is flexible. The money supply tap can be throttled or opened depending on monetary policy.
Non-counterfeitability: Yes. Crypto should be harder to counterfeit than a paper note.
Acceptability for transactions: No, at least not yet.
Relative stability: partial. Highly volatile today but you can argue that this is a function of transaction volume. If and when crypto gains acceptability, the volatility should decrease.
However, cryptocurrencies also behave like commodities or stores of value. They are “mined” and as the craziness around NFTs demonstrates, however dubiously, they are certainly perceived as stores of value.
What are the technicalities to money generation and transactions? The book has a short technical primer which covers the concepts of blockchain technology as applied to transactions but most of it went over my head.
Why is crypto superior to digital transactions in fiat currencies? Transaction speeds are demonstrably slower (Bitcoin takes 10 min to confirm by definition, plus the transactions/min compared to say Visa is terrible). Transaction costs to merchants are definitely a problem because the financial market is controlled by just a few players but that seems like a competitive problem that digital players are already attacking. Besides, the sustainability footprint of crypto is abysmal – energy required to run the “proof of work” algorithms is burning the planet up. The book has no coverage of this point.
The book makes a plausible argument that cryptocurrencies are a “flight to stability” play when fiat currencies (like the Argentinian peso) become untrusted. Another use case I can see is that during banking crises when liquidity or access to transactions become simply nonexistent. E.g., Afghanistan after the Taliban takeover has a nonfunctioning financial system. For the Afghan fleeing to Pakistan, carrying currency or gold is hardly an option. Storing your life savings in crypto before crossing the border seems a reasonable option. Of course, you will have to pray that you don’t get killed without revealing your private keys to someone but that’s another story!
At its very genesis, Bitcoin seems to have arisen out of a total and dystopian distrust in a collective society. Libertarians who carry their distrust of governments to extremes and criminals want to hide both their assets and their transactions. Cryptocurrency seems ideal for oligarchs wanting to move assets invisibly or drug runners and contract killers (e.g., the book has great coverage of Silk Road).
Another point I am fuzzy about. One of the main functions of fiat currency that governments seem to use is monetary supply - i.e. stimulate or curtail economic growth using interest rates depending on how the economy functions. Crypto exists to bypass this perhaps? I suppose from the viewpoint of the Ayn Rand libertarian who distrusts government totally, this is a non-argument. Individuals bear no collective responsibility for society to actually function as an economic entity so will store their earnings in crypto. Taxes? Who needs them? Not my cup of tea but at least I want to follow the reasoning.
All in all, this book is a decent historical primer but with serious flaws from my perspective at least. I hope to get another book to improve my understanding of this brave new world....more
An excellently written economic history detailing the rise and fall of laissez-faire thinking. John Cassidy is a brilliant economic journalist and in An excellently written economic history detailing the rise and fall of laissez-faire thinking. John Cassidy is a brilliant economic journalist and in the first part of this book, he traces the intellectual roots of "utopian economics" from Adam Smith through Friedman & Lucas. The second part of the book details the rise of reality-based economics with developments in behavioral economics and data-based study of economic crises. The third and final part describes the 2008 financial crisis and how Keynes went from pariah to hero again, along with practical demonstrations of why the entire financial world rides on fragile assumptions of value and psychology. Regulation of markets still is woefully inadequate, and future boom-bust cycles seem inevitable.
One criticism of the book may be that the connections between the three parts (along with the preface and epilogue) seem a bit disjointed.
Still, one of the better written economic history books I have read, recommended!...more
Excellent and much more readable than expected from two Nobel laureate economists. The authors are renowned for their evidence-based economics studiesExcellent and much more readable than expected from two Nobel laureate economists. The authors are renowned for their evidence-based economics studies among developing nations.
They offer refreshingly data-driven perspectives on the effects of immigration, inequality, globalization, climate change and growth. Rather than have dogma and ideological assumptions drive policy, the authors examine actual results from experiments. The book destroys many myths about these topics - e.g. "low skilled immigrant laborers steal jobs from locals". They offer compelling evidence about the winners and losers in our growth-obsessed public policy landscape. Globalization and trade are beneficial overall but will certainly increase inequality and generate populist pushback, if adequate measures are not taken to lift the losers. They make a passionate case for the future of economics (the dismal science!) as a critical discipline to combat the serious challenges faced by generations.
However, I found their recommendations for policy changes somewhat naive and without a hard-headed acknowledgment about political realities. At least, the authors keep us honest about starting from a position of humility and "not knowing". Very interesting and highly recommended....more
A decent attempt at an ambitious task - Buchholz traverses the sweep of Western economic history from Adam Smith, Alfred Marshall, Karl Marx, Milton FA decent attempt at an ambitious task - Buchholz traverses the sweep of Western economic history from Adam Smith, Alfred Marshall, Karl Marx, Milton Friedman and others in 300 odd pages. I liked the way he tried to set each economist's theory in his (I wish I could say her, but economics has been a sexist profession until lately) own era, with its historical context. Subsequent economists built refinements to the previously held theories, or were confronted with geopolitical situations where certain hypotheses didn't work.
The attempts to connect their theories with the economists' personal lives seemed clumsy at best, and irrelevant. This book also does not cover more recent insights by behavioral economists like Kahneman, Thaler and others.
Flawed but a useful book if you are looking for a lens into economic history since Adam Smith....more
Richard Thaler is one of the founding fathers of behavioral economics that brought down the hubris of the quants and the "rational actor" diehards, whRichard Thaler is one of the founding fathers of behavioral economics that brought down the hubris of the quants and the "rational actor" diehards, who swore by the market being perfect and fair. Misbehaving describes the economist equivalent of bar fights to bring respectability to the recognition that the humans that drive economic outcomes are altogether fallible, capricious and nefarious - and the markets that evolve from that irrationality are very unfair and illogical indeed. Fascinating and highly recommended....more
First, the positives. Stiglitz is an enormously important voice in the modern economics world, and has mentored the likes of Paul Krugman and other NoFirst, the positives. Stiglitz is an enormously important voice in the modern economics world, and has mentored the likes of Paul Krugman and other Nobel laureates. This book is a second edition with reflections on the rise of demagogues around the world, and the implications on globalization. Stiglitz lays out a compelling case that although globalization is an extremely desirable ideal for rising living standards for all countries, if the fruits of the increase in wealth are shared as inequitably as today, the entire project is doomed to failure. His new material (and especially the concluding chapters) are cogently argued and left me both better educated and more pessimistic about the future. He suggests fundamental strategic changes to development goals and public policy, none of which look politically viable because of the entrenched interests against them.
The negatives: we get it, Prof. Stiglitz - the IMF is a particularly dangerous organization that has left global chaos and mayhem in its wake. Repeating it ad nauseam does not strengthen the argument any. For entertainment, google the IMF's virulent response in the form of noted economist Kenneth Rogoff's response. Who knew economics conferences could be like a fishmonger wives fracas? The chapters on the IMF's colossal failures in Russia and Southeast Asia are illuminating, but smell a little like 20-20 hindsight. Much more troubling to me was Stiglitz connecting the dots between these purportedly non-partisan organizations and their financial sponsors in the banking community in the U.S. and developed world. When its the third-world, its corruption but if its the first world, it is "lobbying"! Also, the professor's self-assurance that he was right all along at all times, gets a little grating.
All in all, I found this a very important book, especially for this era - and one I suspect some Democratic presidential candidates in the U.S (at least policy wonks like Elizabeth Warren) will take very seriously indeed....more
Considering this is written by two Nobel prize winners in economics, this is a surprisingly accessible work, explaining several foundational ideas in Considering this is written by two Nobel prize winners in economics, this is a surprisingly accessible work, explaining several foundational ideas in behavioral economics. After the 2008 meltdown, few students of economics would argue that ideas like the rational actor paradigm and the invisible-hand-of-the-market are infallible, so sometimes it sounds like they are preaching to the choir. However, I did learn about how psychological biases can impact the economy through unstable feedback mechanisms. All-in-all, an interesting book for those curious about the subject of behavioral economics, and along the lines of other books by Dan Ariely, Richard Thaler and Daniel Kahneman....more
First for the good part: Matt Ridley manages to write an educational yet readable book - certainly no mean feat. He makes a persuasive case that pessiFirst for the good part: Matt Ridley manages to write an educational yet readable book - certainly no mean feat. He makes a persuasive case that pessimism about humanity's current economic status is misplaced. As a collective species, we are certainly better off than ever before. Mr. Ridley attributes the inexorable progress of human health and economic indicators to powerful market forces. His arguments based on anthropological and historical evidence that living standards improved due to open market exchange and specialization are very strong indeed. His writing is humorous and extremely entertaining, even when citing reams of archaeological evidence. This book is well worth a read, especially for the perennial doomsayers who seem to find clouds in every silver lining.
Now for some minor carping. Mr. Ridley's espousal of free markets overstates the case. His thinly veiled contempt of government and public sector administration jars throughout the book. He dismisses for example the role of British Rail as a inefficient boondoggle. Perhaps, but as a powerful unifying force that enabled Britain to reap the benefits of the Industrial Revolution while simultaneously robbing the colonized world - British Rail played a critical role. He underplays the inability and unwillingness of the short term profit minded private sector to tackle major economic "externalities". Mr. Ridley also exaggerates the so called global pessimism. Very few pessimists are seriously claiming that the world is not significantly a better place than it was during the Middle Ages. Rational pessimists and optimists simply both want to make the world an even better place than it is.
All in all - a good book for fans of economic history - highly recommended....more
An impressive piece of scholarship, covering the history of financial bubbles through the ages. The author covers the speculative periods ranging fromAn impressive piece of scholarship, covering the history of financial bubbles through the ages. The author covers the speculative periods ranging from the Tulip mania of the 1600's, the South Sea bubble of the 1700's all the way till the Internet bubbles of the 1990's. The author's research is incredible, as the voluminous footnotes attest. However, it almost feels overwhelming. Each of these financial bubbles is easily worth a book, and to strike a balance that is a broad sweep while still providing some detail is a difficult task. I'd say the author errs on the side of too much detail, and drowns the reader in some cases. Also, the intricacies of the financial arrangements behind these bubbles - derivatives, options, notes etc. - were way beyond my knowledge, and I suspect beyond most other readers too. Still, a worthwhile read if you want to learn about the crazy financial periods through history - with each era claiming "this time, its different."...more
Worth a read though it has lots of overlap with its predecessor "Predictably Irrational". Dan Ariely is one of the leading behavioral economics scholaWorth a read though it has lots of overlap with its predecessor "Predictably Irrational". Dan Ariely is one of the leading behavioral economics scholars so lots of interesting nuggets. In an effort to be more accessible and less academic, he errs too much on the side of conversational writing - lots of repetition to make obvious points sometimes. He also adds lots of personal experiences from his accident/rehabilitation which although harrowing, take away a bit from the central points made in the book. Still recommended....more
Superb analysis of economics with the "market" as a framework. Traces the roots of markets from various angles and explains the principles and limitatSuperb analysis of economics with the "market" as a framework. Traces the roots of markets from various angles and explains the principles and limitations of the "free market". This is a Stanford prof so expect to read slowly and have your brain cells creak to catch up. A must-read for economics and geopolitical buffs. ...more
This is an interesting look at all the political and economic forces that interacted with perhaps the most influential beverage of our time. AnecdotesThis is an interesting look at all the political and economic forces that interacted with perhaps the most influential beverage of our time. Anecdotes about the trajectories of the coffee industry in the 19th and 20th centuries are where this book shone the most for me. The author has clearly done enormous research and offers up juicy tidbits about the cereal-coffee wars instigated by E.W. Post (of General Foods Post Cereal fame) for example. Stories of the first women coffee-baronesses and the rampant sexism they faced, were also fascinating. Where the book suffers is by trying to be too ambitious. A few mild criticisms.
1. Transformed "our world" in the title. Really? The book references to Latin America are confined strictly to areas where the economics and marketing collided or coincided with American interests. Ethiopia, Kenya and other African coffee giants elicit passing mention at best. "A marketing and economic history of the coffee industry in the U.S." or something like it would be more apt.
2. It was very hard to find central themes or takeaways from a sweeping narrative . I found myself struggling to summarize every chapter in my mind. The final chapter was excellent in terms of offering a macro- look at the future of coffee and its likely impacts but the rest of the book is essentially stream-of-consciousness. Not a bad thing necessarily but something to be aware of.
3. This book could have used some more brutal editing. Forcing central themes and tighter academic style writing would have cut the intimidating length by 25%. Of course, that style of writing would have cut by review length by 50%! :-)
Still a recommended read for lovers and haters of the brew alike. ...more
An impressively researched book detailing the great economists of the past two centuries. Somehow, I felt it was too ambitious a canvas and no single An impressively researched book detailing the great economists of the past two centuries. Somehow, I felt it was too ambitious a canvas and no single "take-home" points really stood out in my mind. The narrative was definitely interesting at times - lots of irrelevant gossip about their personal lives included. I ploughed through to the end but the book could have been better if the main purpose had been clearer..still worth a cursory read.....more