It’s political correctness gone – profitable

The Google memo affair has sent me quickly to the proofs of a book coming out next month, Scott Page’s The Diversity Bonus. (Here is all the blurb for the book,)

Page wrote an excellent book a few years ago, The Difference, covering his early research on how and why diversity contributed to better (faster & more accurate) problem-solving.

The new book, judging from the intro, looks at how diversity contributes to profit. By ‘diversity’ he means a range of different cognitive approaches. Identity is one contributory factor to cognitive diversity, because it reflects the different experiences, networks and knowledge different types of people have; but it is not the only factor. However, it is a relatively easy one to monitor. What’s more, the more multi-dimensional and complex the business activity (eg coding, systems engineering), the more profitable it will be to have cognitively diverse teams. In other words, even if it were true that women were less likely on average to be good coders because of their biology – a doubtful proposition as today’s FT leader and many others (such as Prof Wendy Hall here ) point out – Google should still be eager to hire more of us.

If political correctness is profitable, is it still political correctness? Anyway, I’m looking forward to reading the book properly.

The business also sent me back to Simone de Beauvoir’s The Second Sex.

“In human society nothing is natural and a woman, like much else, is a product elborated by civilization. The intervention of others in her destiny is fundamental: if this action took a different direction, it would produce quite a different result. Woman is determined not by her hormones or mysterious instincts but by the manner in which her body and her relation to the world are modified by the action of others than herself. The abyss that separates the adolescent boy and girl has been deliverately widened between them since earliest childhood.”

‘Destiny’ is not predetermined. Biology does not mean women can’t become coders, chief executives, or economists. Even if the distributions of aptitude for certain activities differ by sex among adults  –  and it seems highly unlikely that the between-group differences are larger than the within-group variation – those distributions are the outcome of two decades of socialisation and social constraints.



Summer frivolity

The reason for the 2 weeks’ silence here was of course my summer holiday – when I read fewer serious books than usual because I spent a couple of hours a day writing my next book (a public policy economics textbook for Princeton University Press). Among the detective novels and other fiction though, I did read East West Street by Philippe Sands which is absolutely as brilliant as all the reviews have said, and could not be more timely.


It wasn’t all frivolous detective novels. As well as the Sands, Linda Grant’s The Dark Circle stood out, and Jessie Burton’s The Miniaturist, though I wasn’t so keen as others on Zadie Smith’s Swing Time. I also really enjoyed MFK Fisher’s The Gastronomical Me.

Having now read half a year’s worth of fiction in a fortnight, though, it’s time to pick my next economics book. In the pile are two Piketty-related volumes: Anti-Piketty: Capital for the 21st Century and The Contradictions of Capital in the 21st Century (or ‘pro-Piketty’). Also some September publication proofs. Both Scott Page’s The Diversity Bonus and Dennis Rasmussen’s The Infidel and the Professor are tempting but I think I have to start with Eli Cook’s The Pricing of Progress: Economic Indicators and the Capitalization of American Life. This looks from a very quick skim like a pre-history of GDP from a US perspective.


Economics for a moral end

I’ve read Pigou’s Economics of Welfare, and I talk to students about Pigouvian taxes and subsidies, but never known anything about the man. So I enjoyed The First Serious Optimist by Ian Kumekawa. The author is a Harvard PhD history student (so kudos to him for having a book published so early in his career!), and this is definitely a historical biography rather than an economics book.

As an economist, and one getting specifically interested in welfare economics, I’d have preferred more about the economic ideas. But for less nerdy readers, there is plenty here on the intellectual trends. And the wider intellectual and political context of Edwardian England, the terrible decades of war, depression and war in the early 20th century, and the post-war swing to Labour and the welfare state, is portrayed very well.

At the end of the book, I decided Pigou the man was still a bit of an enigma, but perhaps someone from a privileged Edwardian milieu, who spent his entire adult life at Cambridge, is just a bit too alien. But the arc of his thinking from classical liberalism to active sympathy for the Labour government of 1945 is fascinating. And the tale is quite sad in the end, Pigou seen as a surly recluse, his star not only waning but utterly shot out of the sky by Keynesianism (and, as so often, Keynes comes across here as a brilliant but not very nice man).

(One is also left wondering how scholars of the future will ever write biographies now we don’t write letters to each other any more? Email exchanges, with their more telegraphic form, or skype conversations – these are how we discuss ideas with colleagues. I suppose conferences are recorded so the video of those formal occasions will be available. That, and the Twitter record? )

I like very much the way the book ends: ” His justification for his career, maybe for his very existence, was to serve a moral end. Perhaps it is this part of Pigou’s systematic framework – its self-conscious motivation – that present-day economists would do best to revisit.. …. It would mean accepting what Pigou had declared in 1908 that, ‘Ethics and economics are mutually dependent’ and that ‘Economics cannot stand alone’.”


The responsibility of the public

It isn’t an economics book but it is about technology: I’ve just finished A Crack in Creation: The New Power to Control Evolution by Jennifer Doudna and Samuel Sternberg. It’s a terrific book, really well-written and compelling. Despite knowing nothing at all about biology or genetics, and finding some of the more technical bits quite hard going, I could follow the tale: every point is illustrated with illuminating metaphors and diagrams. And this – CRISPR and associated techniques – is such an important and far-reaching technology, I do think we should all be eager to understand it and think about the consequences. Indeed, we have a responsibility to do so.

By the time you get to the end of the book, it’s clear that this is Doudna’s aim (although co-authored, the book is written as if in her voice): she wants a public debate about CRISPR before it starts to be used to edit the human germline. She would like the debate to avoid the chasm between scientists and public opinion that afflicted GMOs, which became ‘Frankenfoods’ before the public understood that technology at all. But also to acknowledge the significance of CRISPR, with all its potential benefits to tackle diseases.

So I recommend this as a summer read. One final thought: if only Robert Gordon had appreciated that there is more to new technology than playing Angry Birds on smartphones (I exaggerate a little, but he does say the new tech frontier is all about digital entertainment), he might have seen some potential for social welfare in the future as well as in the past.


Mobile contradictions

It’s surprising that there are not more books about mobile communications in general and smartphones in particular. Having been involved since 12 years ago on a strand of work on the economic and social impact of mobiles in low-income economies, when there was already evidence that the effects of the technology were going to be profound, you’d have thought researchers and authors would be all over the territory. Of course, the literature has grown substantially since, but is dwarfed by the work looking at digital in general, or net neutrality, for instance. It’s similar to the strange analytical gap concerning another very powerful technology with huge social effects, the spread of satellite TV in low-income countries from the mid-1990s. And while there is a burgeoning literature looking at social media, I hunger for a big picture synthesis of the social and economic impacts of the set of technologies it relies on, the smartphone and mobile broadband.

Anyway, Anindya Ghose’s Tap: Unlocking the Mobile Economy makes a welcome appearance in this somewhat sparse landscape. It’s a well-written introduction to the various ways US, European and Asian businesses are making use of mobile in developing their services. The book sets up a nice series of contradictions in consumer preferences:

  • people want spontaneity but are predictable and value certainty
  • people are annoyed by ads but don’t want to miss opportunities
  • people want choice but are also overwhelmed by it
  • people value their privacy, and also give away personal data for access to services

After an introductory descriptive section, the book turns to nine forces Ghose (a Professor at NYU’s Stern School of Business) argues are driving the mobile economy. This, the bulk of the book, is really aimed at business readers who want to think through the implications of pervasive smartphone use for their business model. There are lots of examples here of what others are already doing, and the book aregues that in many respects Asian businesses are ahead of US and European counterparts in the ways they have innovated.

The subtext throughout is essentially that too many businesses are sacrificing the long term creation of value – which would require navigating carefully through consumers’ contradictory attitudes – in favour of short-term profit or market share, for example by treating consumer data in a cavalier and exploitative manner. Businesses need to take data security far, far more seriously than they have to date, and also make sure that the service they deliver in return for data is truly of value to their customers.

In short, an accessible book with lots of colour, though definitely aimed at the business audience rather than economists.