Chaos, tools and thoughts

It has been unsurprisingly hard to concentrate this week, but I did finish Everyday Chaos: Technology, Complexity and How We’re Thriving in a New World of Possibility by David Weinberger. Publishers love thise long subtitles and with one so long you might think there was no need to read the book. This one does the author a disservice. The book is nothing like the giddy Silicon Valley techno-optimistic tract it seems to indicate (and how badly that would have dated in current circumstances). I’d bill it as a follow-up to two much earlier books – The Cluetrain Manifesto of 2000 (of which Weinberger was a co-author) and Kevin Kelly’s 1992 Out of Control.

Everyday Chaos is concerned with the implications of AI everywhere and the always-on internet. It’s broad hypothesis is that the business environment and world more broadly need to take complexity seriously: “At last we are moving from Chaos Theory to chaos practice.” (Chaos Theory being the flapping butterfly in one place causing a hurricane across the world thanks to the non-linear complex dynamics of weather systems.) That means expecting small interventions to sometimes have huge consequences. It implies organisations need to be ‘agile’ (ie flexible), open, less hung up on causality and more willing to live with (shifting) correlations.

It’s particularly interesting on the flexibility of the concept of interoperability, which can be made to build bridges between organisations in different ways. The book advocates a “networked, permeable” view of business rather than the hard boundaries we are used to thinking about. “The knocking down of old walls that were definitional of a business is better understood as a strategic and purposive commitment to increasing a business’s interoperability with the rest of the environment.” Rather than narrowing down to a small number of strategic options, Weinberger’s advice is: “In an interoperable world in which everything affects everything else, the strategic path forward may be to open as many paths as possible.”

The book also reminded me about the very interesting work by Andy Clark and his argument that our tools – pen and paper, whiteboard, screen, spreadsheet – determine how we think (this is a terrific New Yorker profile and here’s a famous paper with Dave Chalmers on the ‘extended mind’). Knowledge is a function of what’s outside our heads. As Weinberger concludes, we are neither an effect of thing (technodeterminism) or nor to we straightforwardly cause things. new tools – machine learning – will end up with us understanding the world in a different way.

Everyday Chaos is also really well written and engaging, so it’s well worth ignoring the airport bookshop packaging. Not that there will be many chances to buy in airport bookstores for quite a while…

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All that we don’t know

What a month – what a week – and much more to come.

Meanwhile, I enjoyed reading David Hand’s new book Dark Data: Why What You Don’t Know Matters. A former president of the Royal Statistical Society, Hand has written an excellent guide to the many reasons for caution in interepreting data. He uses the overall metaphor of ‘dark’ data (like dark matter in the universe) to categorise these pitfalls, which is a nice way of organising a book that could have ended up being a list of the rather varied things statisticians need to worry about. The book ends with a very useful, rather sobering, taxonomy of the 15 data issues a careful empiricist should be aware of.

For example these include missing data we know about; missing data or omitted variables we are unaware of (the unfairly mocked Rumsfeldian ‘unknown unknowns’); sample selection bias; gaming and feedback; fraudulent data; measurement error; extrapolation; counterfactuals; and even the process of scientific discovery. This is still obviously quite a varied collection of issues which does lead to some tangents (such as why Sigmund Freud was not a scientist, how Facebook breached the Nuremberg Convention, and that Randolph Churchill found decimal places mysterious).

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But it is all very clearly and amusingly written so it is an excellent overview of all the potential mis-steps a student (or practitioner) might make, from p-hacking to omitted variable bias, Simpson’s Paradox to the Hawthorne Effect.The final section has some positive suggestions too: linking datasets, replication, RCTs, and anonymisation. A very useful book and one I will recommend to students.

There are limits of course: sometimes the uncertainty is irreducible, as we are learning now.

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Counting people

I was very pleased to receive in the post a copy of Andrew Whitby’s book The Sum of The People: How the Census has Shaped Nations, which I read in a proof copy and wrote one of the back cover blurbs for. I am perhaps peculiarly interested in statistics and the story of statistics, but this book is genuinely a page-turner from the first page of the Preface on.

It’s a broadly chronological account of the history of censuses from the dawn of recorded history (China’s Yellow River region, ancient Mesopotamia) to the present day. It weaves into that the history of technologies for counting people, including for example the story of the BBC’s 1986 900th anniversary version of the Domesday Book – on an aluminium laser disc. As the book points out, the vellum of the original has had greater longevity and it has been digitised.  And of course demographic trends feature too, for example in the ‘population time bomb’ debate of the late 60s and 70s.

Of course, the most interesting aspect is why the cenus matters, which is its relationship with power and money. They are always either political or politiczed. One vivid illustration is the Allied attack on the Dutch population registry in early 1944, which killed around 60 civilians working there but destroyed one in four of the records so a quarter of the identity cards the occupiers asked for unable to be verified. Too late for Dutch Jews, of whom 73% had already been murdered, but very helpful to the Dutch Resistance as the war drew toward its end.

The book ends by observing that the current censuses in and around 2020 – US, UK, China and elsewhere – my well be among the last of the traditional kind where enumerators try to get a response from everyone. The use of administrative records is likely to take over in future. Cost is a major reason, as is evidence of systematic undercounting in some countries. But I must say, the idea of being reliant on big data stored in centralised population registries leaves me a bit uneasy: is this the ideal way of capturing the relationship between individual and state? As the book puts it, “In a time when so much information collection is covert and passive, the census is the opposite: it demands our active attention.” Another human will ring the doorbell. It’s a shame this will surely pass into history.

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What’s wrong – and right – with economics

I didn’t expect to enjoy Robert Skidelsky’s new book, What’s Wrong With Economics: A Primer for the Perplexed, for he has long been forthright about his low opinion of economics and economists; and so it proved.

He makes some good points, nevertheless. Indeed, some I strongly agree with, as do a lot of other economists. For example, many of us would agree about the importance of studying economic history; even some of the nerdiest econometricians and theorists I know devour the big new econ history books. Likewise about the importance of taking into account psychological realism – behavioural economics, hello! (Though standard rational calculation of self-interest often matches reality better – it’s all about the context.) Institutional economics is everywhere now, in the tradition of Coase, Williamson, et al. Lord Skidelsky approves of it (albeit preferring the old institutionalism to the new transactions-cost based approach); he just seems to be under the misapprehension that it’s a neglected part of the discipline.

In sum, there is indeed much here that I and many other economists of my acquaintance agree with. Big ticks to history, institutions, psychological realism, even to acquaintance with sociology or anthropology.

So why did I not enjoy the book? It talks about “the poverty of neoclassical economics under its carapace of techniques.” This is absurd. While certainly there is some excess ‘mathiness‘, technique is a vital thing in any discipline. Even historians have techniques, and models (‘the causes of the first world war’). Does this carapace consist of too much ‘theory’? As Beatrice Cherrier has blogged, there has been a significant shift to applied work in economics, even though its description as the ’empirical turn’ has been over-stated.

But above all, despite insisting on the importance on both economic history and the history of economic thought, the book is ahistorical in its approach to economics. It attacks an economics it labels as ‘mainstream’ or ‘neoclassical’. Whatever it means by mainstream, this isn’t what most economists do. As ever in such critiques, the book only talks about macroeconomics, doesn’t cite a single piece of applied microeconomics, but above all ignores the fact that economics has changed in the past 10, 20, 30 years.

I do think there are serious methodological issues in the present (‘mainstream’) economic paradigm – my next book, Cogs and Monsters, out around this time next year, will be about this.

Meanwhile, What’s Wrong With Economics is concise, clearly and elegantly written and spends half its length demonstrating that the other half is – well, about what’s right with economics.51FqQfM-ouL._SX325_BO1,204,203,200_

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Deaths of despair

Many people will be familiar with Anne Case’s and Angus Deaton’s work on deaths of despair – the increase in death rates in the United States due to suicide, (legal and illegal) drug overdose and alcoholism, and the fact that life expectancy in the US has now declined for three years in a row. The research is brought together in compelling form in their new book, called Deaths of Despair and the Future of Capitalism.

The scale of this slow disaster is staggering. “In 2017158,000 Americans died from what we call deaths of despair… That is the equivalent of three full 737 MAXs falling out of the sky every day with no survivors.” “Opioids prescribed by physicians accounted for fully a third of all opioid deaths in 2017 and a quarter of the 70,237 drug overdose deaths that year. This overall number is greater than the peak annual number of deaths from HIV, from guns or from automobile crashes. It is greater than the total number of Americans who died in Vietnam. The cumulative total from 2000 to 2017 is greater than the total number of Americans who died in the two world wars.”

Much of the book is concerned with descriptive analysis of the patterns within these totals. The short answer is: white, working age people with no college degree. While on many indicators things are worse for African-Americans, the trends have been improving for them. Education stands out strikingly as a key differentiator. While the adverse trend is most noticeable from around 2000, for Americans with high school education only things have been getting worse, in terms of despair, in every cohort for decades.

The figures here are for the US, and some of the causes are US specific. Its racial legacy from slavery is unique. Its appalling “health care” system stands out as a major culprit – the costs, the perverse incentives it creates, the lack of coverage. But not only healthcare. The pharma industry is portrayed as a rent-extracting machine. The authors criticise the FDA for approving opioids for general prescription, particularly OxyContin: “The FDA was essentially putting a government stamp of approval on legalized heroin.”

However, it may be that the US and its particular form of weaponized capitalism is only an extreme and early version of something happening elsewhere. The education divide – whose causes and consequences I think we still need to understand in the round – is manifest throughout the western economies. The skill-biased technical change, the “assortative mating”, the concentration of good jobs in big cities, are all occurring throughout the west. Life expectancy gains in the UK have halted and reversed for some groups, and the recent Marmot Review highlights serious inequalities and challenges. Interestingly, the trends seem to be more adverse in English-speaking countries in general. But not unique.

When you consider the harm a number of other industries are doing to us, their customers – highly processed and sugary foods and drinks, finance, tech, as well as pharma and alcohol – it’s perhaps surprising there hasn’t been even more of a backlash against modern capitalism. The final section of the book runs through the broad economic trends behind the adverse outcomes for the once-robust white working class, and lists what could be done. Each item on this list is a major challenge, not least politically – reform US healthcare, anyone? But it extends also to improving corporate governance, anti-trust enforcement, higher minimum wages, improving educational outcomes. The system is broken and every bit of it needs fixing. This is a sobering – and essential –  book.

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