Author Archives: Diane Coyle

Information underload

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In his classic book [amazon_link id=”014016734X” target=”_blank” ]Darwin’s Dangerous Idea[/amazon_link], Daniel Dennett said: “A scholar is just a library’s way of making another library.” I’ve always loved that inversion of conventional thinking about causality, and sometimes even muse that as friendly bacteria in the gut are to humans, we humans are becoming to computers or the internet.

[amazon_image id=”014016734X” link=”true” target=”_blank” size=”medium” ]Darwin’s Dangerous Idea: Evolution and the Meanings of Life (Penguin Science)[/amazon_image]

The line from Dennett is quoted in James Gleick’s [amazon_link id=”0007225741″ target=”_blank” ]The Information[/amazon_link]. It’s been a very enjoyable read, covering some of my favourite territory in a well-written way. This includes the long-run effects of the  telegraph, Charles Babbage and Ada Lovelace, Alan Turing’s codebreaking work, Norbert Wiener and cybernetics, Claude Shannon’s information theory. The book had some angles that were new and quirky – for example, I like the point that lots of newspapers named themselves The Telegraph, following on from The Bugle, but none chose The Telephone. I liked it that Turing and Shannon had met in 1943, one devising codes and the other breaking them, but because of wartime secrecy had been unable to discuss their work. There’s a good section on Godel’s incompleteness theorem and why this relates to computation, although drawing quite a lot on Douglas Hofstadter’s [amazon_link id=”0140289208″ target=”_blank” ]Godel, Escher, Bach[/amazon_link] and [amazon_link id=”0465045669″ target=”_blank” ]Metamagical Themas[/amazon_link].

Overall, though, there was little that’s new here (at least if you share my obsessions and have read so many other books on this territory, from Tom Standage’s [amazon_link id=”0753807033″ target=”_blank” ]The Victorian Internet[/amazon_link] to George Dyson’s [amazon_link id=”014101590X” target=”_blank” ]Turing’s Cathedral[/amazon_link]), and I could not find really find a line of argument. There’s a general theme that everything is about information, right down to genetic code and the meaning of life; that information is the fundamental idea that should shape how we think about the physical universe and all of life, rather than energy. Maybe. There’s a long section on entropy that tries to underpin this thought. But I think that just as our forbears saw everything via mechanical metaphors, information is the framing metaphor of our times.

So, an enjoyable, meandering read, ideal for a flight. But not, for me, living up to the praise heaped on it by other reviews such as this in The Guardian or this (rather more tempered) one in The New York Times. And of course it won the Royal Society Winton Prize, a major achievement. So maybe it’s just me. I wouldn’t discourage anybody from trying it.

[amazon_image id=”0007225741″ link=”true” target=”_blank” size=”medium” ]The Information: A History, A Theory, A Flood[/amazon_image]

Big data 2.0

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As I read a long Foreign Affairs article about Big Data and its ramifications this morning, it struck a real chord with a passage I’d just read in James Gleick’s interesting (although rambling) book [amazon_link id=”0007225741″ target=”_blank” ]The Information[/amazon_link].

[amazon_image id=”0007225741″ link=”true” target=”_blank” size=”medium” ]The Information: A History, A Theory, A Flood[/amazon_image]

He describes the use of the newfangled telegraph to send for the first time almost instantaneous news about the weather in different, distant parts of the country – fine in York, raining in Manchester. “The telegraph enabled people to think of the weather as a widespread and interconnected affair, rather than an assortment of local surprises.” Gleick quotes a commentator of 1848: “The telegraph may be made a vast national barometer.” (Tom Standage’s [amazon_link id=”0753807033″ target=”_blank” ]The Victorian Internet[/amazon_link] is a brilliant book about this particular communication medium.)

The possibility of weather reports led to the 1854 etablishment of the Meteorlogical Office by the Government, headed by Admiral FitzRoy, famously captain of [amazon_link id=”014043268X” target=”_blank” ]The Beagle[/amazon_link]. In 1860 he began issuing the first weather forecasts. The science of meteorology, and understanding of a global interconnected system, was built on the foundation of the local weather information conveyed by telegraph.

The new book, [amazon_link id=”1848547900″ target=”_blank” ]Big Data[/amazon_link], by Cukier and Mayer-Schoenberger appreciates the transformative scope of today’s Big Data 2.0 – in the article they write: “Big data is different: it marks a transformation in how society processes information. In time, big data might change our way of thinking about the world.” What the change will be is impossible to predict.

[amazon_image id=”1848547900″ link=”true” target=”_blank” size=”medium” ]Big Data: A Revolution That Will Transform How We Live, Work and Think[/amazon_image]

What is different, and what isn’t

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I’ve been a bit mystified by Excel-gate (see this good, balanced summary by Gavyn Davies). Bravo for Thomas Herndon, the graduate student who uncovered the error in the now-notorious paper by Carmen Reinhardt and Kenneth Rogoff; his job prospects will be rightly enhanced by this episode.

But the glee with which anti-Austerians pounced on this episode to ‘prove’ that austerity doesn’t work seems to involve an assumption that the original Reinhardt-Rogoff paper of 2010 ‘proved’ anything to the contrary in the first place. There are lots of papers about the impact of debt/GDP ratios on growth, and they demonstrate all kinds of different things – see for example this BIS paper by Cecchetti and others, or this IMF paper (pdf) from last year on the Caribbean economies, or this Fed paper published in December (pdf), or this much-cited 2010 paper by Koehler-Geib and others, or for that matter the new paper debunking Reinhardt and Rogoff’s 90% as it too finds the same correlation albeit with different numbers.

Well, you get the idea. Taking these together, we ‘know’ there might be a threshold for sovereign debt, but it varies over time and across countries, it’s a correlation whose causal direction and mechanism is unclear, and there isn’t enough data for any estimates to be robust (because history only runs once). All of which only goes to underline how little is known about the macroeconomy, not to mention how hard any macroeconomists and their camp followers find it to resist claiming certainty where there is none.

No doubt Reinhardt and Rogoff were tempted into over-claiming for their work by the politicisation of the debt threshold issue. But the underlying message of their big 2009 book, [amazon_link id=”0691152640″ target=”_blank” ]This Time is Different[/amazon_link], is unscathed: unlike the later paper, it makes it absolutely clear that debt ‘thresholds’ above which increasing borrowing is correlated with lower growth vary widely in different countries and at different times (no magic 90% here); and that the historical record indicates it generally takes a long time for growth to recover after banking crises involving debt overhangs.

[amazon_image id=”0691152640″ link=”true” target=”_blank” size=”medium” ]This Time Is Different: Eight Centuries of Financial Folly[/amazon_image]

Understanding the system, but not changing it

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The trouble with reading the review sections of the weekend papers is that I discover so many more books I’d like to read. Martin Sandbu has a review essay in the FT of several books about Occupy: David Graeber’s [amazon_link id=”1846146631″ target=”_blank” ]The Democracy Project[/amazon_link], [amazon_link id=”1846146984″ target=”_blank” ]Meme Wars: The Creative Destruction of Neoclassical Economics[/amazon_link] by Kalle Lasn and Adbusters, and [amazon_link id=”B00CC8C1E6″ target=”_blank” ]Occupy: Three Inquiries in Disobedience[/amazon_link] by WJT Mitchell, Bernard Harcourt and Michael Taussig.

The interesting point Sandbu makes is that there’s no point getting irritated with Occupy folks about their lack of a positive programme for change, because the point about them is procedural justice and participation; but on the other hand, they’ll never change anything about ‘the system’ if they don’t find a means of engaging with it enough to depart from it. They’re falling foul of Karl Marx’s famous aphorism that the point is to change rather than analyse things. Of these, the Adbusters volume appeals to me the most – although irritating, their work is always thought-provoking. I enjoyed reading Graeber’s [amazon_link id=”1612191819″ target=”_blank” ]Debt[/amazon_link] but suspect his Occupy fame might have gone to his head.

[amazon_image id=”1846146984″ link=”true” target=”_blank” size=”medium” ]Meme Wars: The Creative Destruction of Neoclassical Economics[/amazon_image]

John Le Carre’s latest novel, [amazon_link id=”B00AWJYJVA” target=”_blank” ]A Delicate Truth[/amazon_link], also seems to be about ‘the system’, albeit its political and legal dimensions. It gets very positively reviewed in both The Guardian by Mark Lawson and The Observer by Robert McCrum. On another system, the glorious writer Andre Makine has a novel about Brezhnev’s USSR: Brief Loves That Live Forever.

Also in the FT, Emma Jacobs reviewed [amazon_link id=”1846685206″ target=”_blank” ]Made to Last: The History of Britain’s Best-Known Shoe Firm[/amazon_link] by Mark Palmer. She’s lukewarm about the book about Clarks, but I loved learning that Clarks shoes (which we all know and love for their sturdy school shoes for our kids and comfortable shoes for middle-aged feet) are beloved of Jamaican reggae stars and feature in song: “Everybody haffi ask weh mi get mi Clarks.”

[amazon_image id=”1846685206″ link=”true” target=”_blank” size=”medium” ]Clarks: Made to Last: The story of Britain’s best-known shoe firm[/amazon_image]

There’s a posthumous volume of W.G. Sebald’s essays, [amazon_link id=”0241144183″ target=”_blank” ]A Place in the Country[/amazon_link], out soon. The Guardian Review has a great feature on Sebald.

[amazon_image id=”0241144183″ link=”true” target=”_blank” size=”medium” ]A Place in the Country[/amazon_image]

Finally, I spotted that Joe Stiglitz’s latest, [amazon_link id=”0718197380″ target=”_blank” ]The Price of Inequality[/amazon_link], is out in paperback – I’ve not yet read it so now have no excuse.