Monthly Archives: June 2019

Guess who benefits from Automation 2.0

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This morning’s Observer column:

We have now lived through what one might call Automation 1.0. The paradigmatic example is car manufacturing. Henry Ford’s production line metamorphosed into Toyota’s “lean machine” and thence to the point where few humans, if any, are visible on an assembly line. Once upon a time, the car industry employed hundreds of thousands of people. We called them blue-collar workers. Now it employs far fewer. The robots did indeed take their jobs. In some cases, those made redundant found other employment, but many didn’t. And sometimes their communities were devastated as a result. But GDP went up, nevertheless, so economists were happy.

Now we’re embarking on Automation 2.0…

Read on

Social media enables pop-up parties

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From today’s Guardian

The Brexit party used simple messaging, an active social media presence and a “overwhelmingly negative” attack to win the online battle before the European elections, according to a new analysis of the campaign.

Nigel Farage’s party accounted for 51% of all shared content on Facebook and Twitter during the campaign, despite only producing 13% of the content. The analysis, by the 89up digital agency, said the “scale of their success went beyond what we were expecting”.

Meanwhile, Change UK, made up of pro-Remain former Labour and Tory MPs, were the losers of the internet campaign. Despite spending more than £100,000 on 1,000 Facebook ads in the week before the vote, Change UK generated 1.1% of all shares on the platform – fewer than any other UK-wide party.

The consolations of ageing

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From The Economist:

Among the compensations of ageing is the right to bore youngsters with stories of the prices of yesteryear. Once upon a time a ticket to the cinema cost just five quid, and a hogshead of mead but a farthing. Of course, savvier youths know how to debunk such tales. Adjust for inflation and many things are cheaper than ever. Since 1950 the real cost of new vehicles has fallen by half, that of new clothing by 75% and that of household appliances by 90%, even as quality has got better. Tumbling prices reflect decades of improvements in technology and productivity. But the effect is not economy-wide. Cars are cheaper, but car maintenance is more expensive, and costs in education and health care have risen roughly fivefold since 1950. Though no mystery, this rise is often misunderstood, with serious economic consequences.

There are as many explanations for the ballooning cost of such services as there are politicians. But as a newly published analysis argues, many common scapegoats simply cannot explain the steady, long-run rise in such prices relative to those elsewhere in the economy. In “Why are the prices so damn high?” Eric Helland of Claremont McKenna College and Alex Tabarrok of George Mason University write that quality has improved far too little to account for it. Administrative bloat is not the answer either. In America the share of all education spending that goes on administration has been roughly steady for decades. Health-care spending has risen faster than gdp in rich countries, despite vast differences in the structure of their health-care systems….

Subtle messages

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Hmmm… I found this mong the junk mail in our letterbox. Is someone trying to tell me something? Years ago I remember a comic giving out ‘life tips’. One was: “the last cheque you should ever write should be to the undertaker. And it should bounce!”

Facebook moves into global banking

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This morning’s Observer column:

We’ve known for ages that somewhere in the bowels of Facebook people were beavering away designing a cryptocurrency. Various names were bandied about, including GlobalCoin and Facebook Coin. The latter led some people to conclude that it must be a joke. I mean to say, who would trust Facebook, of Cambridge Analytica fame, with their money?

Now it turns out that the rumours were true. Last week, Facebook unveiled its crypto plans in a white paper. It’s called Libra and it is a cryptocurrency, that is to say, “a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units and verify the transfer of assets”.

Like bitcoin, then? Er, not exactly…

Read on

LATER Merryn Somerset Webb of the Financial Times had a really good column ($) about the Facebook venture. Among the points she raises are:

  • Real cryptocurrencies are about privacy and freedom. They are decentralised and permissionless — no one runs them, no one can be prevented from using them and the system never needs reference to a central authority. (This last assertion is dubious — see Vili Lehdonvirta’s Turing Institute talk — but we will leave that pass for now.) Libra is to be none of these wonderful things. It is to be run by a single organisation based in Switzerland. It is centralised and permissioned — and its value will not depend on anything intrinsic to it but to a basket of fiat currencies.

  • The interest from the deposits and government bonds that back Libra will not go to the people holding the currency. It will be used to pay for the system’s operating costs and, once those are covered, to the founding members as dividends.

  • There are real privacy concerns raised by Libra, especially in relation to Facebook’s role in it in relation to the metadata that Libra will throw up. “If you are worried about the way financial apps might use data on your spending patterns, you should be really worried about how a vast social network morphing into a financial network might use it. Anyone with your social media data can guess what you might buy. Anyone with your financial data knows already.”

  • If Libra really is based on a basket of fiat currenties and is stable as a result, it might not take long for us to refer to the value of things in Libras. A Libra could just be a Libra. That, says Webb, “is a sovereignty game-changer”.

  • If Libra succeeds, it won’t because it’s a real cryptocurrency. It’ll be because it isn’t.

In the West, Facebook is becoming an older person’s network

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This is interesting.

All the bad press about Facebook might be catching up to the company. New numbers from Edison Research show an an estimated 15 million fewer users in the United States compared to 2017. The biggest drop is in the very desirable 12- to 34-year-old group. Marketplace Tech got a first look at Edison’s latest social media research. It revealed almost 80 percent of people in the U.S. are posting, tweeting or snapping, but fewer are going to Facebook.

Why China won’t be democratised any time soon

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I’m reading an extraordinary book by Kai Strittmatter, a German journalist who has lived in, and studied, China for many years. It’s a sobering account of how the Chinese Communist Party is making the transition from what Rebecca Mackinnon christened “networked authoritarianism” to networked totalitarianism. Digital technology is their tool of choice for enabling this transition, and the book provides some graphic insights into its potential for such a project.

The recent remarkable demonstrations in Hong Kong — which caused the territory’s Chief Executive to make a humiliating climb-down over a proposed extradition law — have led some people to wonder if this might prompt a reversal of Xi Jinping’s remorseless progress to totalitarian power. Tyler Cowen doesn’t think so, and neither do I. Here’s the money quote from his latest Bloomberg Column:

It’s also worth thinking through exactly what changes Chinese democracy is supposed to bring. China’s urbanization has been so rapid — it has had more urban than rural residents for less than a decade — that a national election might well reflect the preferences of rural voters, which after all most Chinese were until very recently. If you belong to the Chinese upper class or even middle class along the eastern coast, you may end up asking yourself the following question: Who is more likely to protect my basic economic interests, the current Chinese Communist Party, or a democratic representative of Chinese rural interests? China is also growing rich during a time of extreme economic inequality, which may make many Chinese elites think twice about democratization.

Sadly, I think he’s right. Besides, I can’t see Xi having any truck with ‘democracy’.