The stuff beneath the cloud

The physical location of the Internet has always fascinated me, so I’ve been enjoying reading [amazon_link id=”0262029510″ target=”_blank” ]A Prehistory of the Cloud[/amazon_link] by Tung-Hui Hu (a network engineer turned English professor). The first half of the book is pretty much entirely about the physical infrastructure and the mismatch between our idea of ‘the cloud’ as something dematerialised operating to new social/political rules and its reality in cables and buildings in specific places. The introduction starts: “A multi-billion dollar industry that claims 99.999 percent reliability breaks far more often than you’d think because it sits on top of a few brittle fibres the width of a few hairs.” It goes on to say that the idea of the cloud as a metaphor for society or organising principle for the economy is sometimes uncomfortably at odds with the material, technological platform. Indeed, he points out, the cloud was responsible for 2 per cent of the world’s greenhouse gas emissions in 2008, since when there has been a rapid increase in the number of data centres.

[amazon_image id=”0262029510″ link=”true” target=”_blank” size=”medium” ]A Prehistory of the Cloud[/amazon_image]

The book then starts with the geography of US fibre optic cables, laid under old railroad tracks: an old-economy, centralised network beneath the cloud as “a vision os globalization that follows the dictates of a multinational corporation – a coalition of geographic arease that move capital and resources through the most efficient path.” We have the impression of the internet as a decentralized network, but it is not – the idealised distributed network described in a famous 1962 article by Paul Baran was never built. The idea that the network got its shape because of the threat of nuclear war is a kind of ‘how he leopard got its spots’ [amazon_link id=”1405279613″ target=”_blank” ]Just So[/amazon_link] story. “Virtually all traffic on the US Internet runs across the same routes established in the 19th century.” (The same is true in the UK, with the east and west coast spines.) Interoperability via IP has only increased the concentration of power, the book argues. Six telcos control the US internet; it is fewer in the UK. Yet there is, “A collective desire to keep the myth alive despite evidence to the contrary.” This chapter ends with an intriguing section on the inherent paranoia of seeing the world through a network lens. If the system is a logical construction overlaid on a physical network, anything and everything can become part of it: the cloud has nebulous edges. Therefore anything and everything – or everyone – can cause breaks or errors.

The second chapter discusses time sharing and virtualization in the cloud – the creation of the illusion that we have our own private part of it. The book presents this is part of a shift away from waged labour toward a flexible economy with a nebulous boundary between paid and unpaid: “By positioning users as intimate partners of the computer, time sharing yoked users to a political economy that made users synonymous with their usage and allowed them (or their advertising sponsors) to be tracked, rented or billed.” The concept of multi-tasking developed out of time share computers, and now refers to flexible working more generally. “Real time actually functions as an ideology of economic productivity.” I am intrigued by the link between time and productivity – not new of course; think of EP Thompson’s famous article about industrial time keeping. Still, time spent using the computer is the work time now to be tracked. “The underlying logic of freeware capitalism is consumption – of time.” The chapter goes on to discuss the privacy debate as the result of the transformation of what had been envisioned as a public utility into a set of private ones, or gated communities, albeit only brought about by virtualization software. The book argues that concerns about privacy contribute to the logic of (dread word) “neoliberalism.”

The n-word put me off quite a lot, as it seems a pretty empty concept, and the third chapter vanishes down the rabbit hole of critical theory, although I like (again) its preoccupation with the built structures of the internet, the data centres – some in old military bunkers. “Computers, like horses, overheat when worked hard.” However, the chapter is about the links between cloud computing and the surveillance state. The basic point is the re-emergence (as if it ever went away) of the claims of sovereign territories and state power over the internet.

With the final chapter the book re-emerges from its rabbit hole, opening with a section on the use of big data as a tool of power. He notes: “Targetted marketing came out of the Eisenhower era science of geodemography … GIS was a by-product of the military’s need to convert populations intro targettable spaces.” The chapter argues that opting out of the connected world is nearly impossible, so we ought to start by acknowledging its structural inequalities of power. “The cloud is a subtle weapon that translates the body into usable information.” Well, everything, perhaps. Airbnb turns housing into a housing cloud; we have car clouds drifting around major cities, and labour markets that deliver “humans as a service.” Although I certainly do not see the world through the prism of neoliberalism (which no doubt confirms me as a neoliberal, as if being an economist wasn’t enough to do so), I found this book a very thought-provoking essay about the economic and political underpinnings of our connected lives. We surely need to have more discussion about the ownership of ‘the cloud’, its physical reality and energy consumption, and the political power that flows from its roots in those old railroads.

On being creative

I’ve been browsing through a very nice, small book that’s outside my usual reading territory. It’s [amazon_link id=”0262029944″ target=”_blank” ]The Storm of Creativity[/amazon_link] by Kyna Leski. The book is a reflection on the creative process – not quite a ‘how to’ but not quite not a guide either. My attention was caught by the Introduction pointing to Charles Darwin’s letters and notebooks as an illustration of the creatvie process in action. Not only am I a big Darwin fan, it’s also unusual to start off with creativity in the scientific rather than artistic arena. Having said that, many of the book’s examples are in architecture and art, although there are instances from medicine, technology, and other sciences.

[amazon_image id=”0262029944″ link=”true” target=”_blank” size=”medium” ]The Storm of Creativity (Simplicity: Design, Technology, Business, Life)[/amazon_image]

Two dimensions of the creative process that appeal to me particularly are attentiveness – a much under-rated quality in modern life – and making connections. Darwin, again, is the examplar of somebody who created by joining up ideas. Steve Jobs features here too – he’s quoted as saying: “Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they had and synthesize new things.”

I can’t draw. I dance, but not all that well. But I can pay attention to things and make connections. There’s hope for all of us.

Revolutionary money

Today I finished reading properly Rebecca Spang’s marvellous [amazon_link id=”0674047036″ target=”_blank” ]Stuff and Money in the Time of the French Revolution[/amazon_link], having only dipped in when I first bought it. It really repays the attention. What seems to be a book about a specific aspect of the historical episode is really a reflection on the nature of money and its intrinsic relationship with politics and with conceptions of property. Set in the 1780s and 90s, it could not be more relevant to the bitcoin/ledger debate.

[amazon_image id=”0674047036″ link=”true” target=”_blank” size=”medium” ]Stuff and Money in the Time of the French Revolution[/amazon_image]

I learnt much from it, starting with the insight that the problems with the infamous assignats issued after the revolution stemmed from the unquestioned belief that the venal offices sold by the old regime, raising much government revenue, could not be cancelled or expropriated. Spang writes: “Throughout the debate, no one (not even Marat or Robespierre) took the truly revolutionary position of suggesting venal offices might be illegitimate privileges that could be cancelled without payment.” But, she adds, “Simply aboloshing the offices was unthinkable but so too was leaving the debt on the books, since officeholders who had not been repaid woulf retain their property and ‘privilege’ would still exist.” Settling the debts in one go would would consign the ancien regime to history and complete the revolution. Hence the issue of assignats backed by the expropriated land of the church.

The book also has a fascinating section on [amazon_link id=”0691116350″ target=”_blank” ]The Big Problem of Small Change[/amazon_link] (to quote the title of Tom Sargent and François Velde’s book on this): the cost of manufacturing the low-denomination coins used by most people exceeded their face value. A shortage of usable cash led to the proliferation of private currencies in many areas, and eventually their replacement by breaking up the assignats into smaller denominations, so that they morphed from something like bills of exchange, backed by specific property, into generic paper money. A sophisticated credit network built on personal relationships and specificities gave way to anonymity and ultimately distrust. But the distrust was the product of political uncertainty, the dissolution of everything familiar and the clear invalidation of the assumption that the future would be enough like the present that credit – and money – could be relied on.

[amazon_link id=”B00RLHMOF4″ target=”_blank” ]The book[/amazon_link] concludes with a reminder that the past is different from the present but what it does serve to underline is the culturally specific character of not only money but other foundation stones of economic relationships – property and value. These “have never been naturally given categories but are historically produced.” And, perhaps, poised for another revolution, as digital everything continues to strain conventional ideas of property and value to breaking point and beyond.

Ronald Coase on the sharing economy

Well of course he didn’t actually write about the sharing economy. But one of the essays in a new collection about Coase’s legacy – [amazon_link id=”0255367104″ target=”_blank” ]Forever Contemporary: The economics of Ronald Coase,[/amazon_link] edited by Cento Veljanovski – offers a Coaseian perspective on the phenomenon. Its author, Michael Munger, argues that the sharing economy platforms are enabling reductions in the transactions costs involved in exchanges that were always in principle possible. The three key transactions costs are: information about prices, characteristics, options; assuring safety and quality to creat enough trust for the transaction to occur; and process the transaction agreement and payment in a reliable and speedy manner.

[amazon_image id=”0255367104″ link=”true” target=”_blank” size=”medium” ]Forever Contemporary: The Economics of Ronald Coase (Readings in Political Economy)[/amazon_image]

The essay also notes, in a point that was bound to appeal to me, that there could be “a potentially dramatic reduction in the amount of new stuff that we need to manufacture,” be it shared drills or cars. Munger ends, “The firm of the future may operate primarily as a software platform rather than as a physical location.” While I certainly don’t think all firms will take this shape, it doesn’t seem a mad idea.

I haven’t yet read the other essays but it looks like a nice volume for all Coase fans – and aren’t we all? The pdf of the book can be downloaded here.

People and economists

There’s a chapter online from a forthcoming book, Economic Psychology edited by Robert Ranyard, called How Laypeople Understand Economics, by David Leiser and Zeev Krill. Although not entirely surprising, the chapter is very interesting. Those of us who are economists long ago internalised the subject’s distinctive way of thinking and understanding of how variables are related. Most people find economics difficult, even mysterious, however. There are some excellent demystifications, from John Lanchester’s [amazon_link id=”039335170X” target=”_blank” ]How to Speak Money[/amazon_link] to Tim Harford’s [amazon_link id=”0349119856″ target=”_blank” ]Undercover Economist[/amazon_link], and all the rest of the popular economics literature. But as this chapter points out, laypeople – including many politicians – will use one of three strategies for trying to make sense of economic discussions: use heuristics; use metaphors; fall back on teleological or causal explanations.

One example of a common heuristic is ‘good begets good’ – if there is a change in one variable perceived to be good, it is assumed it will cause good changes in other variables. On metaphors, the authors comment: “Understanding of financial marketsrelies onseven metaphors: the market as a bazaar, as a machine, as gambling, as sports, as war, as a living being and as an ocean. Crucially, each metaphor highlights and hides from view certain aspects of the foreign exchange market. Some of themetaphors imply market predictability, others do not. For instance, the sports and themachine metaphors were found to be associated with fixed rules and predictability, whereas the bazaar and war metaphors with unpredictability.”

[amazon_image id=”039335170X” link=”true” target=”_blank” size=”medium” ]How to Speak Money: What the Money People Say-And What It Really Means[/amazon_image]  [amazon_image id=”0349119856″ link=”true” target=”_blank” size=”medium” ]The Undercover Economist[/amazon_image]