Yuan Yang’s Private Revolutions: Coming of Age in New China is quietly revelatory. One of the new intake of Labour MPs, the author was born in China, moved to the UK at age 4, and returned to China as an adult when working as a journalist for the FT. The book is a history of four women of her generation who became friends and contacts during that period. It’s a gripping read as the women have extraordinary stories. It’s also a powerful reminder of how much the country has changed within a generation – a rapid transformation that can’t help but have had an impact on people’s psyches. The word ‘revolution’ is not hyperbole. It reminded me a bit of a 1986 book I read decades ago by John Hooper about Spain, in which he pointed out the pyschological impact on young men from conservative villages of going to work as waiters or similar in the new resorts of hte Costa Brava. So I warmly recommend Private Revolutions, a fascinating read and a different perspective on a country we will have to learn more about in the years ahead.
Tag Archives: review
Always and everywhere a political phenomenon
I was quite excited about Carola Binder’s Shock Values: Prices and Inflation in American Democracy, as I expected something similar to Thomas Stapleford’s (2009) The Cost of Living in America. It isn’t about price indices, however, but about monetary policy and inflation. Macroeconomics is so much not my area that I feel unable to comment on the argument of the book, except to wholeheartedly agree that inflation is always and everywhere a political phenomenon. I’ve written (in my forthcoming book, The Measure of Progress) about the scarring experience of the late 1970s inflation for my working class family.
Anyway, Shock Values is a very readable monetary history of the United States, from the Revolutionary era to the 2020s. The theme throughout is the question of the political legitimacy of prevailing monetary arrangements, particularly the role of the state in aiming to stabilise prices. As the final chapter notes, the current episode of inflation has combined with broader US political instability and the arrival of crypto to raise new questions about that legitimacy – the book borrow’s Paul Tucker’s concept of legitimacy as set out in his book Unelected Power.
I knew less about the early (19th century) period and so particularly enjoyed that; perhaps I was the only audience member to leave Hamilton wishing there had been more about the formation of the first federal banking system. The sections on wartime price controls are also very interesting. If you’re already steeped in monetary history there might not be much new in the book, but I found it an excellent overview and it didn’t seem to be ideological – politely ignoring MMT and casting justifiably measured doubt on crypto assets.
Valuing the future
Discounting the Future: The Ascendancy of a Political Technology by Liliana Doganova is an interesting read. I don’t entirely agree with its perspective, which is that the concept of discounted cash flow or net present value is inherently damaging to the future; but I do think it’s valuable to understand that it is not a technical tool but an inherently normative one – or political, if you prefer. The book is part of a literature that criticises ‘assetization’ – generally used as a synonym for financialization – and identifies the performativity of certain economic concepts. This is a valuable and thought provoking literature, drawing attention to some dysfunctions of ‘free-market’ practices in policy and business.One of these is certainly the spread of CBA-type analyses as practiced in policy and business decisons.
As Doganova writes here, there is an inherent contradiction. On the one hand, “Discounting literallty devalues the future and gives priority to the present, inducing short-termism.” On the other hand, “discounting could also be analyzed in exactly the opposite terms, as futurism as opposed to presentism, because it posits the future as the ultimate source of rewards in the present.” She adds, “The future is a political domain.”
The first part of the book discusses theoretical debates about the selection of the discount rate and the use of discounting, including the wrangling among economists after the publication of the Stern Review. The later chapters give three historical examples, 19th century forestry, the introduction of discounted cash flow analysis in US corporations in the 1960s and 70s, and venture capital investment in biopharma recently. The interesting examples illustrate a clear shift from a focus on purpose (eg healthy woodlands, or sustained engineering success in manufacturing) to a focus on financial returns. She writes of the corporate use, “The troubling consequence of the use of discounting was that companies were turning down investments.” I’d like to think of a way to test this empirically.
However, the book conflates the practice of discounting or CBA with the inherent analytical possibilities of conceptualising the economy as a process through time involving investment in assets that subsequently provide a period-by-period return. I see this as an essential step forward from flow-based metrics of success (GDP growth or current year profits). Without a balance sheet, it is impossible to evaluate sustainability. My challenge to the contributors to this literature criticising ‘assetization’ is what alternatives there are if we are to transition to a sustainable economic model.
Thinking specifically about discounting, Doganova concentrates on the selection of a discount rate – and indeed companies select a ludicrously high hurdle rate very often. But the technique involves other normative choices. One is the discounting formula – one could use hyperbolic rather than exponential discounting, which favours the more distant future. And above all there is the question of the prices at which the benefits (and costs) are evaluated; the book assumes it has to be market prices, but shadow prices are needed for social cost benefit analysis.
So while I agree that the tool is not technocratic but embeds values, choices about consuming resources now or in the future will always involve an implicit cost benefit analysis. Better to make it explicit, recognising the specific normative decisions involved. Anyway, loads of interesting detail in the book and it made me think, always welcome!
Humans and machines
My colleague Neil Lawrence’s new book, The Atomic Human: Understanding Ourselves in the Age of AI, is a terrific account of why ‘artificial intelligence’ is fundamentally different from embodied human intelligence – which makes it on the one hand an optimistic perspective, but on the other leads him to end with an alarming warning, that the potential of pervasive machine intelligence, “could be as damaging to our cultural ecosystem as our actions have been to the natural ecosystem.” The influence of AI on human society could be parallel to our adverse influence on the environment – no matter how good the intentions – because just as nature moves at the pace of evolutionary time so the interface between humans and nature has failed to take account of the damage humans cause, so the computer-human interface is characterised by this mismatch in information-processing speeds.
The book does not offer a handy list of actions to prevent the damage AI might do to us, but ends by warning about two things: the immense concentration of power in its development and use; and the use of automated decision-making in contexts where any judgement is essential – which is many contexts where uncertainty enters the picture. I rather fear those horses have bolted, though.
Most of the book is a fascinating account of both types of intelligence, AI and human cognition, using information theory as well as cognitive science to explain the profound differences. As he notes, “Shannon defined information as being separated from its context,” but humans need contextual understanding to communicate. Neil uses stories to provide context, to make what could be rather dry material more engaging, braiding the same examples (many from wartime: Bletchley Park, his grandfather’s D-Day experience alongside General Patton’s, the development of radar, missile testing…) through the text. Sometimes I found these confusing, but I have a very literal mind.
There have been lots of books about AI out this year, and I’ve generally enjoyed the ones I’ve read – although whatever you do, avoid Ray Kurzweil’s. I’d recommend adding this one to the to-read list, as it offers a fresh perspective on AI from a super-expert and super-thoughtful practitioner.
Escape velocity?
I’ve read Ray Kurweil’s jaw-dropping book, The Singularity is Nearer: When We Merge With AI, so you don’t have to. He does literally believe we will be injected with nanobots to create an AI super-cortex above our own neo-cortex, plugged into the cloud and therefore all of humanity’s accumulated intelligence, and thus become super-intelligent with capabilities we can hardly imagine. Among the other possibilities he forsees AI ‘replicants’ (yes, he calls them that) created from the images and texts of deceased loved ones, to restore them to artificial life. The main challenge he forsees will be their exact legal status. The book has a lot of capsule summaries about consciousness, intelligence, how AI works – and also the general ways in which life is getting better, there will be more jobs, and our health and lifespans will improve by leaps and bounds.
Might he be wrong about reaching ‘longevity escape velocity’ and the AI singularity by 2030? A hint of this when he says that book production is so slow that what he has written in 2023 will already be overtaken by events by mid-2024 when we are reading: “AI will likely be much more woven tightly into your daily life.” Hmm. Not sure about that prognostication. Although one of the scariest things about the book is the advance praise from Bill Gates, who writes that the author is: “The best person I know at predicting the future of artificial intelligence.” Do all the Tech Types believe this?
One suspects they believe they’re already more super-intelligent than the rest of us, so what could possibly go wrong?