Category Archives: History

Machine envy

By Philip Ball – The tools of science are so specialised that we accept them as a kind of occult machinery for producing knowledge. We figure that they must know how it all works. Likewise, histories of science focus on ideas rather than methods — for the most part, readers just want to know what the discoveries were.

Even so, most historians these days recognise that the relationship between scientists and their instruments is an essential part of the story. It isn’t simply that the science is dependent on the devices; the devices actually determine what is known. You explore the things that you have the means to explore, planning your questions accordingly.

Today, however, they have become symbols of prestige as never before. I have several times been invited to admire the most state-of-the-art device in a laboratory purely for its own sake, as though I was being shown a Lamborghini.

One of the dysfunctional consequences of this sort of attitude is that the machine becomes its own justification, its own measure of worth. Results seem ‘important’ not because of what they tell us but because of how they were obtained. more> https://goo.gl/4HQWRQ

What a State-Owned Bank Can Do for New Jersey

By Ellen Brown – Consider the possibilities, for example, for funding infrastructure. Like most states today, New Jersey suffers from serious budget problems, limiting its ability to make needed improvements. By funding infrastructure through its own bank, the state can cut infrastructure costs roughly in half, since 50 percent of the cost of infrastructure, on average, is financing.

Again, a state-owned bank can do this by leveraging its capital, with any shortfall covered very cheaply in the wholesale markets. In effect, the state can borrow at bankers’ rates of 1 percent or less, rather than at market rates of 4 to 6 percent for taxable infrastructure bonds (not to mention the roughly 12 percent return expected by private equity investors).  The state can borrow at 1 percent and turn a profit even if it lends for local development at only 2 percent—one-half to two-thirds below bond market rates.

That is the rate at which North Dakota lends for infrastructure. In 2015, the state legislature established a BND Infrastructure Loan Fund program that made $150 million available to local communities for a wide variety of infrastructure needs. These loans have a 2 percent fixed interest rate and a term of up to 30 years; and the 2 percent goes back to the State of North Dakota, so it’s a win-win-win for local residents.

The BND is able to make these cheap loans while still turning a tidy profit because its costs are very low: no exorbitantly-paid executives; no bonuses, fees, or commissions; very low borrowing costs; no need for multiple branch offices; no FDIC insurance premiums; no private shareholders. Profits are recycled back into the bank, the state and the community. more> https://goo.gl/QrGLBD

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The internet of (economic) things

By Jonathan Sallet – Robert Gordon argues that, with the exception of a decade starting in the mid-1990s, information networks have not driven productivity in the way that electricity transformed the American manufacturing sector in the 20th Century. But some believe now that IoT (internet of things) can boost productivity growth by increasing the efficiency of traditional business operations such as manufacturing, transportation, and retail. Whether the United States can return to historical productivity growth levels is critical to the American economy.

IoT standards raise a series of policy questions: Are industry standards being set in a pro-competitive fashion?

Are companies complying with their obligations under standards (a question featured in an analogous context in the recent Federal Trade Commission complaint against Qualcomm)?

And what kind of role should government play in establishing the standards at the outset? more> https://goo.gl/p3Zwph

Why Most Government Reform Plans Die

BOOK REVIEW

Working With Culture: the Way the Job Gets Done In Public Programs, Author: Anne Khademian.

By Howard Risher – “Culture Eats Strategy for Breakfast.” That quote is credited to the father of modern management, Peter Drucker. He was saying that leaders need to understand and address their organization’s culture in their planning.

Writers tell us that culture encompasses the values, beliefs, underlying assumptions, attitudes, and behaviors shared by a group of people. It sets forth the rules—unspoken and unwritten—for working together.

It’s relevant to reform because it governs behavior in work groups. It influences virtually every interaction of people in performing their jobs. It affects the time they start work, their tolerance for sexist comments, the way they deal with customers—everything.

Culture plays an important role in every successful organization. More than a few writers have argued that it would be great if government could develop a performance culture. That’s one where employees are committed to achieving results. Employees in high performing companies are energized by the culture. It’s reinforced by their reward and recognition practices. more> https://goo.gl/AiEOKL

Want to strengthen democracy? Exercise your freedom of religion

By Steven Paulikas – If Washington is correct, then the long-term decline of religious participation in America and other democratic countries is one of the root causes for the type of political decay we are experiencing—and the absence of a “national morality” is at the core of this. The first American president was not a religious zealot, but he nonetheless saw religious practice as an essential act of citizenship, especially among those of “refined education.”

There is a multitude of good reasons why Americans are deserting the faith institutions their forebears built, not the least of which is the litany of inexcusable abuses many have suffered in the name of religion. (And to be sure, not every faith group is dedicated to upholding peace and common human dignity.)

But the scale of exodus leaves one to wonder if the abandonment of “organized” religion is not something akin to the type of apathy that led left-leaning people like me to become complacent about our political institutions.

After all, the American state is guilty of just as many sins as religion, and yet there is no movement to abandon our institutions of democracy. more> https://goo.gl/Plgl03

America Needs the World

The U.S. is heading toward a trade war it cannot win.
By Tavis Jules – President Donald Trump ended his address to a joint session of Congress by saying “My job is not to represent the world. My job is to represent the United States of America.”

Trump’s job as de facto representative of the world is a byproduct of post-World War II era restructuring that ushered in over seventy years of American dominance and greatness while allowing America to significantly influence and shape educational development priorities, agendas and directives of global institutions such as the World Bank, the International Monetary Fund and World Trade Organization.

Since the 1980s, the mantra of open markets has equated to open educational systems in the name of democratic governance and transition. In line with Washington Consensus principles of deregulated labor markets, privatization of nationalized industries, and openness to trade under the banner of ‘saving’ national education and preparing a new generation of global workers to exploit their untapped capital, governments have been slowly opening their educational markets to all forms of trade and services.

These neoliberal policies crystallized in 1995 when the U.S.-led WTO in its General Agreement on Trade in Services identified education as one of 12 tradable services, under the movement of natural persons. Thus, education became subjected to global trade and commercial rules.

Trump’s congressional message of not knowing the full scope of what his job is or should be, highlights the narrowness which is fed through his policy advisers, who too often apply established models to current circumstances, rather than considering the radical reinterpretations of the issues.

In today’s overly interconnected world, the U.S. is heading towards a trade war it cannot win; America needs the world, but the world does not need America when the emerging and frontier markets show such promise. more> https://goo.gl/6Tyf03

Updates from Chicago Booth

Can we save retirement?
What the US and other countries can learn about social security reform
By Alex Verkhivker – When it comes to pension crises, American workers are not alone. In the United Kingdom, many of the country’s almost 6,000 employer-sponsored, defined-benefit programs are underfunded.

In Greece, Poland, and across the European continent, a demographic mismatch means there are not enough incoming taxes to fund promised payouts.

Privatization is often suggested as a solution to pension crises. Rather than have governments or employers fund workers’ retirements, why not give retirees more control over funding their retirements, with private individual accounts?

Many critics of privatization are quick to point to Chile as a cautionary tale. The Chilean government privatized its pension system in 1980, its secretary of labor and social security inspired by Milton Friedman’s book Capitalism and Freedom.

In Mexico, money is automatically deducted from workers’ wages and placed in individual accounts. Then individuals choose from a menu of assets in which to invest and work through regulated, professional money managers, each of which offers a single investment product.

But competition did not materialize as the government had hoped it would. Hastings, Hortaçsu, and Syverson looked at where investors lived, which fund managers they invested with, how much money they saved—and earned after fees. They find that while many people expected competition to drive down costs, the average asset-weighted load was a steep 23 percent, and balance fees were another 0.63 percent. Those fees ate away—a lot—at returns. more> https://goo.gl/usSmNP

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Are human rights anything more than legal conventions?

BOOK REVIEW

Human Rights: From Morality to Law, Author: John Tasioulas.
The Law of Peoples, Author: John Rawls.

By John Tasioulas – Philosophers have debated the nature of human rights since at least the 12th century, often under the name of ‘natural rights’. These natural rights were supposed to be possessed by everyone and discoverable with the aid of our ordinary powers of reason (our ‘natural reason’), as opposed to rights established by law or disclosed through divine revelation.

Since the middle of the previous century an elaborate architecture of human rights law has emerged at the international, regional and domestic levels, one that is effective to wildly varying degrees. But, ultimately, this legalistic approach is unsatisfactory.

To begin with, the law does not always bind all those we believe should abide by human rights. For example, some states have not ratified human-rights treaties, or have ratified them subject to wide-ranging exceptions (‘reservations’) that blunt their critical edge. A country such as Saudi Arabia can have a seat on the UN Human Rights Council yet persist in severe forms of gender discrimination.

Moreover, the international law of human rights, like international law generally, almost exclusively binds states. Yet many believe that non-state agents, such as corporations, whose revenues in some instances exceed the GDP of all but the wealthiest nations, also bear grave human-rights responsibilities.

Whether I’m right or not, I am convinced that we cannot sustain our commitment to human rights on the cheap, by invoking only the law or the assumptions of our liberal democratic culture. more> https://goo.gl/AXTYg3

The $7 Trillion Hazard That Lies Beneath the M&A Boom

By Chris Bryant Tara Lachapelle – The global M&A boom has left a giant footprint on corporate balance sheets, and we’re not just talking about all that debt. Goodwill — the difference between what assets are worth on paper and how much an acquirer paid for them — is also soaring, and that could spell trouble for corporate earnings.

At S&P 500 companies, goodwill has risen by two-thirds over the past decade and accounts for more than one-third of net assets.

In the past two years, takeover targets have sold for a median of 11 times Ebitda — essentially 11 years of profit — whereas the multiple was only about 7-9 times in the years leading up to the recent merger frenzy.

As for who’s sitting on the most absolute goodwill, beer takes the cake. Anheuser-Busch InBev SA’s goodwill doubled to a cool $136.5 billion after its $100 billion takeover of SAB Miller Plc.

Impairments deplete shareholder equity, which makes lenders and bondholders nervous. Companies that financed takeovers with lots debt are particularly exposed. more> https://goo.gl/Ube7e8

Now it’s time to prepare for the Machinocene

BOOK REVIEW

Expressivism, Pragmatism and Representationalism, Author: Huw Price.

By Huw Price – One way or another, then, we are going to be sharing the planet with a lot of non-biological intelligence. Whatever it brings, we humans face this future together. We have an obvious common interest in getting it right. And we need to nail it the first time round. Barring some calamity that ends our technological civilization without entirely finishing us off, we’re not going to be coming this way again.

If we are to develop machines that think, ensuring that they are safe and beneficial is one of the great intellectual and practical challenges of this century. And we must face it together – the issue is far too large and crucial to be tackled by any individual institution, corporation or nation. Our grandchildren, or their grandchildren, are likely to be living in a different era, perhaps more Machinocene than Anthropocene.

Our task is to make the best of this epochal transition, for them and the generations to follow. We need the best of human intelligence to make the best of artificial intelligence. more> https://goo.gl/dHx4jd