dw2

10 October 2015

Technological unemployment – Why it’s different this time

On Tuesday last week I joined members of “The Big Potatoes” for a spirited discussion entitled “Automation Anxiety”. Participants became embroiled in questions such as:

  • To what extent will increasingly capable automation (robots, software, and AI) displace humans from the workforce?
  • To what extent should humans be anxious about this process?

The Big Potatoes website chose an image from the marvellously provocative Channel 4 drama series “Humans” to set the scene for the discussion:

Channel4_HumansAdvertisingHoarding-440x293

“Closer to humans” than ever before, the fictional advertisement says, referring to humanoid robots with multiple capabilities. In the TV series, many humans became deeply distressed at the way their roles are being usurped by these new-fangled entities.

Back in the real world, many critics reject these worries. “We’ve heard it all before”, they assert. Every new wave of technological automation has caused employment disruption, yes, but it has also led to new types of employment. The new jobs created will compensate for the old ones destroyed, the critics say.

I see these critics as, most likely, profoundly mistaken. This time things are different. That’s because of the general purpose nature of ongoing improvements in the algorithms for automation. Machine learning algorithms that are developed with one set of skills in mind turn out to fit, reasonably straightforwardly, into other sets of skills as well.

The master algorithm

That argument is spelt out in the recent book “The master algorithm” by University of Washington professor of computer science and engineering Pedro Domingos.

TheMasterAlgorithm

The subtitle of that book refers to a “quest for the ultimate learning machine”. This ultimate learning machine can be contrasted with another universal machine, namely the universal Turing machine:

  • The universal Turing machine accepts inputs and applies a given algorithm to compute corresponding outputs
  • The universal learning machine accepts a set of corresponding input and output data, and makes the best possible task of inferring the algorithm that would obtain the outputs from the inputs.

For example, given sets of texts written in English, and matching texts written in French, the universal learning machine would infer an algorithm that will convert English into French. Given sets of biochemical reactions of various drugs on different cancers, the universal learning machine would infer an algorithm to suggest the best treatment for any given cancer.

As Domingos explains, there are currently five different “tribes” within the overall machine learning community. Each tribe has its separate origin, and also its own idea for the starting point of the (future) master algorithm:

  • “Symbolists” have their origin in logic and philosophy; their core algorithm is “inverse deduction”
  • “Connectionists” have their origin in neuroscience; their core algorithm is “back-propagation”
  • “Evolutionaries” have their origin in evolutionary biology; their core algorithm is “genetic programming”
  • “Bayesians” have their origin in statistics; their core algorithm is “probabilistic inference”
  • “Analogizers” have their origin in psychology; their core algorithm is “kernel machines”.

(See slide 6 of this Slideshare presentation. Indeed, take the time to view the full presentation. Better again, read Domingos’ entire book.)

What’s likely to happen over the next decade, or two, is that a single master algorithm will emerge that unifies all the above approaches – and, thereby, delivers great power. It will be similar to the progress made by physics as the fundamental force of natures have gradually been unified into a single theory.

And as that unification progresses, more and more occupations will be transformed, more quickly than people generally expect. Technological unemployment will rise and rise, as software embodying the master algorithm handles tasks previously thought outside the scope of automation.

Incidentally, Domingos has set out some ambitious goals for what his book will accomplish:

The goal is to do for data science what “Chaos” [by James Gleick] did for complexity theory, or “The Selfish Gene” [by Richard Dawkins] for evolutionary game theory: introduce the essential ideas to a broader audience, in an entertaining and accessible way, and outline the field’s rich history, connections to other fields, and implications.

Now that everyone is using machine learning and big data, and they’re in the media every day, I think there’s a crying need for a book like this. Data science is too important to be left just to us experts! Everyone – citizens, consumers, managers, policymakers – should have a basic understanding of what goes on inside the magic black box that turns data into predictions.

People who comment about the likely impact of automation on employment would do particularly well to educate themselves about the ideas covered by Domingos.

Rise of the robots

There’s a second reason why “this time it’s different” as regards the impact of new waves of automation on the employment market. This factor is the accelerating pace of technological change. As more areas of industry become subject to digitisation, they become, at the same time, subject to automation.

That’s one of the arguments made by perhaps the best writer so far on technological unemployment, Martin Ford. Ford’s recent book “Rise of the Robots: Technology and the Threat of a Jobless Future” builds ably on what previous writers have said.

RiseofRobots

Here’s a sample of review comments about Ford’s book:

Lucid, comprehensive and unafraid to grapple fairly with those who dispute Ford’s basic thesis, Rise of the Robots is an indispensable contribution to a long-running argument.
Los Angeles Times

If The Second Machine Age was last year’s tech-economy title of choice, this book may be 2015’s equivalent.
Financial Times, Summer books 2015, Business, Andrew Hill

[Ford’s] a careful and thoughtful writer who relies on ample evidence, clear reasoning, and lucid economic analysis. In other words, it’s entirely possible that he’s right.
Daily Beast

Surveying all the fields now being affected by automation, Ford makes a compelling case that this is an historic disruption—a fundamental shift from most tasks being performed by humans to one where most tasks are done by machines.
Fast Company

Well-researched and disturbingly persuasive.
Financial Times

Martin Ford has thrust himself into the center of the debate over AI, big data, and the future of the economy with a shrewd look at the forces shaping our lives and work. As an entrepreneur pioneering many of the trends he uncovers, he speaks with special credibility, insight, and verve. Business people, policy makers, and professionals of all sorts should read this book right away—before the ‘bots steal their jobs. Ford gives us a roadmap to the future.
—Kenneth Cukier, Data Editor for the Economist and co-author of Big Data: A Revolution That Will Transform How We Live, Work, and Think

Ever since the Luddites, pessimists have believed that technology would destroy jobs. So far they have been wrong. Martin Ford shows with great clarity why today’s automated technology will be much more destructive of jobs than previous technological innovation. This is a book that everyone concerned with the future of work must read.
—Lord Robert Skidelsky, Emeritus Professor of Political Economy at the University of Warwick, co-author of How Much Is Enough?: Money and the Good Life and author of the three-volume biography of John Maynard Keynes

If you’re still not convinced, I recommend that you listen to this audio podcast of a recent event at London’s RSA, addressed by Ford.

I summarise the takeaway message in this picture, taken from one of my Delta Wisdom workshop presentations:

Tech unemployment curves

  • Yes, humans can retrain over time, to learn new skills, in readiness for new occupations when their former employment has been displaced by automation
  • However, the speed of improvement of the capabilities of automation will increasingly exceed that of humans
  • Coupled with the general purpose nature of these capabilities, it means that, conceivably, from some time around 2040, very few humans will be able to find paid work.

A worked example: a site carpenter

During the Big Potatoes debate on Tuesday, I pressed the participants to name an occupation that would definitely be safe from incursion by robots and automation. What jobs, if any, will robots never be able to do?

One suggestion that came back was “site carpenter”. In this thinking, unfinished buildings are too complex, and too difficult for robots to navigate. Robots who try to make their way through these buildings, to tackle carpentry tasks, will likely fall down. Or assuming they don’t fall down, how will they cope with finding out that the reality in the building often varies sharply from the official specification? These poor robots will try to perform some carpentry task, but will get stymied when items are in different places from where they’re supposed to be. Or have different tolerances. Or alternatives have been used. Etc. Such systems are too messy for robots to compute.

My answer is as follows. Yes, present-day robots currently often do fall down. Critics seem to find this hilarious. But this is pretty similar to the fact that young children often fall down, while learning to walk. Or novice skateboarders often fall down, when unfamiliar with this mode of transport. However, robots will learn fast. One example is shown in this video, of the “Atlas” humanoid robot from Boston Dynamics (now part of Google):

As for robots being able to deal with uncertainty and surprises, I’m frankly struck by the naivety of this question. Of course software can deal with uncertainty. Software calculates courses of action statistically and probabilistically, the whole time. When software encounters information at variance from what it previously expected, it can adjust its planned course of action. Indeed, it can take the same kinds of steps that a human would consider – forming new hypotheses, and, when needed, checking back with management for confirmation.

The question is a reminder to me that the software and AI community need to do a much better job to communicate the current capabilities of their field, and the likely improvements ahead.

What does it mean to be human?

For me, the most interesting part of Tuesday’s discussion was when it turned to the following questions:

  • Should these changes be welcomed, rather than feared?
  • What will these forthcoming changes imply for our conception of what it means to be human?

To my mind, technological unemployment will force us to rethink some of the fundamentals of the “protestant work ethic” that permeates society. That ethic has played a decisive positive role for the last few centuries, but that doesn’t mean we should remain under its spell indefinitely.

If we can change our conceptions, and if we can manage the resulting social transition, the outcome could be extremely positive.

Some of these topics were aired at a conference in New York City on 29th September: “The World Summit on Technological Unemployment”, that was run by Jim Clark’s World Technology Network.

Robotic Steel Workers

One of the many speakers at that conference, Scott Santens, has kindly made his slides available, here. Alongside many graphs on the increasing “winner takes all” nature of modern employment (in which productivity increases but median income declines), Santens offers a different way of thinking about how humans should be spending their time:

We are not facing a future without work. We are facing a future without jobs.

There is a huge difference between the two, and we must start seeing the difference, and making the difference more clear to each other.

In his blogpost “Jobs, Work, and Universal Basic Income”, Santens continues the argument as follows:

When you hate what you do as a job, you are definitely getting paid in return for doing it. But when you love what you do as a job or as unpaid work, you’re only able to do it because of somehow earning sufficient income to enable you to do it.

Put another way, extrinsically motivated work is work done before or after an expected payment. It’s an exchange. Intrinsically motivated work is work only made possible by sufficient access to money. It’s a gift.

The difference between these two forms of work cannot be overstated…

Traditionally speaking, most of the work going on around us is only considered work, if one gets paid to do it. Are you a parent? Sorry, that’s not work. Are you in paid childcare? Congratulations, that’s work. Are you an open source programmer? Sorry, that’s not work. Are you a paid software engineer? Congratulations, that’s work…

What enables this transformation would be some variant of a “basic income guarantee” – a concept that is introduced in the slides by Santens, and also in the above-mentioned book by Martin Ford. You can hear Ford discuss this option in his RSA podcast, where he ably handles a large number of questions from the audience.

What I found particularly interesting from that podcast was a comment made by Anthony Painter, the RSA’s Director of Policy and Strategy who chaired the event:

The RSA will be advocating support for Basic Income… in response to Technological Unemployment.

(This comment comes about 2/3 of the way through the podcast.)

To be clear, I recognise that there will be many difficulties in any transition from the present economic situation to one in which a universal basic income applies. That transition is going to be highly challenging to manage. But these problems of transition are a far better problem to have, than dealing with the consequences of vastly increased unpaid unemployment and social alienation.

Life is being redefined

Just in case you’re still tempted to dismiss the above scenarios as some kind of irresponsible fantasy, there’s one more resource you might like to consult. It’s by Janna Q. Anderson, Professor of Communications at Elon University, and is an extended write-up of a presentation I heard her deliver at the World Future 2015 conference in San Francisco this July.

Janna Anderson keynote

You can find Anderson’s article here. It starts as follows:

The Robot Takeover is Already Here

The machines that replace us do not have to have superintelligence to execute a takeover with overwhelming impacts. They must merely extend as they have been, rapidly becoming more and more instrumental in our essential systems.

It’s the Algorithm Age. In the next few years humans in most positions in the world of work will be nearly 100 percent replaced by or partnered with smart software and robots —’black box’ invisible algorithm-driven tools. It is that which we cannot see that we should question, challenge and even fear the most. Algorithms are driving the world. We are information. Everything is code. We are becoming dependent upon and even merging with our machines. Advancing the rights of the individual in this vast, complex network is difficult and crucial.

The article is described as being a “45 minute read”. In turn, it contains numerous links, so you could spend lots longer following the resulting ideas. In view of the momentous consequences of the trends being discussed, that could prove to be a good use of your time.

By way of summary, I’ll pull out a few sentences from the middle of the article:

One thing is certain: Employment, as it is currently defined, is already extremely unstable and today many of the people who live a life of abundance are not making nearly enough of an effort yet to fully share what they could with those who do not…

It’s not just education that is in need of an overhaul. A primary concern in this future is the reinvention of humans’ own perceptions of human value…

[Another] thing is certain: Life is being redefined.

Who controls the robots?

Despite the occasional certainty in this field (as just listed above, extracted from the article by Janna Anderson), there remains a great deal of uncertainty. I share with my Big Potatoes colleagues the viewpoint that technology does not determine social responses. The question of which future scenario will unfold isn’t just a question of cheer-leading (if you’re an optimist) or cowering (if you’re a pessimist). It’s a question of choice and action.

That’s a theme I’ll be addressing next Sunday, 18th October, at a lunchtime session of the 2015 Battle of Ideas. The session is entitled “Man vs machine: Who controls the robots”.

robots

Here’s how the session is described:

From Metropolis through to recent hit film Ex Machina, concerns about intelligent robots enslaving humanity are a sci-fi staple. Yet recent headlines suggest the reality is catching up with the cultural imagination. The World Economic Forum in Davos earlier this year hosted a serious debate around the Campaign to Stop Killer Robots, organised by the NGO Human Rights Watch to oppose the rise of drones and other examples of lethal autonomous warfare. Moreover, those expressing the most vocal concerns around the march of the robots can hardly be dismissed as Luddites: the Elon-Musk funded and MIT-backed Future of Life Institute sparked significant debate on artificial intelligence (AI) by publishing an open letter signed by many of the world’s leading technologists and calling for robust guidelines on AI research to ‘avoid potential pitfalls’. Stephen Hawking, one of the signatories, has even warned that advancing robotics could ‘spell the end of the human race’.

On the other hand, few technophiles doubt the enormous potential benefits of intelligent robotics: from robot nurses capable of tending to the elderly and sick through to the labour-saving benefits of smart machines performing complex and repetitive tasks. Indeed, radical ‘transhumanists’ openly welcome the possibility of technological singularity, where AI will become so advanced that it can far exceed the limitations of human intelligence and imagination. Yet, despite regular (and invariably overstated) claims that a computer has managed to pass the Turing Test, many remain sceptical about the prospect of a significant power shift between man and machine in the near future…

Why has this aspect of robotic development seemingly caught the imagination of even experts in the field, when even the most remarkable developments still remain relatively modest? Are these concerns about the rise of the robots simply a high-tech twist on Frankenstein’s monster, or do recent breakthroughs in artificial intelligence pose new ethical questions? Is the question more about from who builds robots and why, rather than what they can actually do? Does the debate reflect the sheer ambition of technologists in creating smart machines or a deeper philosophical crisis in what it means to be human?

 As you can imagine, I’ll be taking serious issue with the above claim, from the session description, that progress with robots will “remain relatively modest”. However, I’ll be arguing for strong focus on questions of control.

It’s not just a question of whether it’s humans or robots that end up in control of the planet. There’s a critical preliminary question as to which groupings and systems of humans end up controlling the evolution of robots, software, and automation. Should we leave this control to market mechanisms, aided by investment from the military? Or should we exert a more general human control of this process?

In line with my recent essay “Four political futures: which will you choose?”, I’ll be arguing for a technoprogressive approach to control, rather than a technolibertarian one.

Four futures

I wait with interest to find out how much this viewpoint will be shared by the other speakers at this session:

Advertisements

2 April 2014

Anticipating London in 2025

The following short essay about the possible future of London was prompted by some questions posed to me by Nicolas Bérubé, a journalist based in Montreal.

PredictionsFuturists seek, not to give cast-iron predictions about what is most likely to happen in the future, but, instead, to highlight potential scenarios that deserve fuller study – threats and opportunities that need addressing in advance, before the threats become too severe, or the opportunities slip outside our grasp.

Given this framework, which trends are the most significant for the future of London, by, say, 2025?

London has a great deal going for it: an entrepreneurial spirit, a cosmopolitan mix of people of all ages, fine universities (both in the city and nearby), a strong financial hub, the “mother of parliaments”, a fascinating history, and rich traditions in entertainment, the arts, the sciences, and commerce. London’s successful hosting of the 2012 Olympics shows what the city can accomplish. It’s no surprise that London is ranked as one of only two “Alpha++ cities” in the world.

Other things being equal, the ongoing trend of major cities becoming even more dominant is going to benefit London. There are many economies of scale with large cities that have good infrastructure. Success attracts success.

Second Machine AgeHowever, there are potential counter-trends. One is the risk of greater inequality and societal alienation. Even as mean income continues to rise, median income falls. Work that previously required skilled humans will increasingly become capable of being done by smart automatons – robots, AIs, or other algorithms. The “technological unemployment” predicted by John Maynard Keynes as long ago as the 1930s is finally becoming a significant factor. The book “The second machine age” by MIT professors Brynjolfsson and McAfee, gives us reasons to think this trend will intensify. So whilst a smaller proportion of London citizens may become increasingly wealthy, the majority of its inhabitants may become poorer. That in turn could threaten the social cohesion, well before 2025, making London a much less pleasant place to live.

One reaction to the perception of loss of work opportunity is to blame outsiders, especially immigrants. The present populist trend against free movement of people from the EU into the UK, typified by the rise of UKIP, could accelerate, and then backfire, as young Europeans decamp en masse to more open, welcoming cities.

A similar trend towards social unpleasantness could happen if, as seems likely, there is further turmoil in the financial markets. The “great crash of 2008” may come to be seen as a small tremor, compared to the potential cataclysmic devastation that lies ahead, with the failures of trading systems that are poorly understood, overly complex, overly connected, poorly regulated, and subject to many perverse incentives. Many people whose livelihoods depends, directly or indirectly, on the financial city of London, could find themselves thrown into jeopardy. One way London can hedge against this risk is to ensure that alternative commercial sectors are thriving. What’s needed is wise investment in next generation technology areas, such as stem cells, nanotechnology, green energy, artificial intelligence, synthetic biology, neuro enhancement, and driverless cars. Another response is to urgently improve our collective understanding and oversight of the pervasive interconnections in our monetary systems.

The fact that, with modern medical treatments, people are living longer and longer, increases the pressures on social welfare systems. Ailments that previously would (sadly) have killed sufferers fairly quickly, can now linger on for years and even decades, in chronic sickness. This demographic change poses all sorts of challenge, including the need to plan much longer periods of time when people will be dependent on their pension plans. One important counter-measure is accelerated development of rejuvenation biotechnology, that gives people new leases of life (and renewed potential for productive employment) before they are afflicted with the diseases of middle-age and old-age.

Cities depend in major ways on their transport infrastructure. By 2025, there will be huge strides in the capabilities of driverless cars. This could usher in an era of transport that is much safer, less expensive, and greener (in part because cars that don’t crash can be built with much lighter materials). Cities that are quick to adopt this new technological infrastructure, and who do it well, could quickly gain in comparative popularity. It’s encouraging that Oxford, near to London, is conducting state-of-the-art research and development of low-cost driverless cars. And alongside driverless surface vehicles, there’s far-reaching potential for positive adoption of a vast network of autonomous flying drones (sometimes dubbed the “Matternet” by analogy with the “Internet”). But unless London acts smartly, these opportunities could pass it by.

Three other trends are harder to predict, but are worth bearing in mind.

  1. First, the wider distribution of complex technology – aided by the Internet and by the rise of 3D printing, among other things – potentially puts much more destructive capability in the hands of angry young men (and angry middle-aged men). People who feel themselves dispossessed and alienated might react in ways that far outscale previous terrorist outrages (even the horrors of 9-11). Some of these potential next-generation mega-terrorists are home-grown in London, but others come from troublespots around the world where they have imbibed fantasy fundamentalist ideologies. Some of these people might imagine it as their holy destiny, in some perverted thinking, to cause huge damage to “the great Satan” of London. Their actions – as well as the intense reactions of the authorities to prevent future misdeeds – could drastically change the culture of London.
  2. Second, fuller use of telecommuting, virtual presence, and remote video conferencing, coupled with advanced augmented reality, could lessen people’s needs to be living close together. The millennia-long trend towards greater centralisation and greater cosmopolitanism may reverse, quicker than we imagine. This fits with the emerging trend towards localism, self-sufficiency, and autonomous structures. London’s population could therefore shrink, abetted by faster broadband connectivity, and the growth of 3D printing for improved local manufacturing.
  3. Finally, the floods and storms experienced in the south of England over the last few months might be a harbinger of worse to come. No one can be sure how the increases in global temperature are restructuring atmospheric and ocean heat distribution patterns. London’s long dependence on the mighty river Thames might prove, in a new world of unpredictable nastier weather, to be a curse rather than a blessing. It’s another reason, in addition to those listed earlier, for investment in next-generation technology, so we can re-establish good relations between man and nature (and between city and environs).

What’s the most important aspect missing from this vision?

26 September 2013

Risk blindness and the forthcoming energy crash

Filed under: books, carbon, chaos, climate change, Economics, irrationality, politics, risks, solar energy — David Wood @ 11:28 am

‘Logical’ is the last thing human thinking, individual and collective, is. Too compelling an argument can even drive people with a particularly well-insulated belief system deeper into denial.

JL in Japan 2The Energy of Nations: Risk Blindness and the Road to Renaissance, by Jeremy Leggett, is full of vividly quotable aphorisms – such as the one I’ve just cited. I see Jeremy as one of the world’s leading thinkers on solar energy, oil depletion, climate change, and the dysfunctional ways in which investment all-too-frequently works. The Observer has described him as “Britain’s most respected green energy boss”. A glance at his CV shows an impressive range of accomplishments:

Jeremy Leggett is founder and chairman of Solarcentury, the UK’s fastest growing renewable energy company since 2000, and founder and chairman of SolarAid, an African solar lighting charity set up with 5% of Solarcentury’s annual profits and itself parent to a social venture, SunnyMoney, that is the top-selling retailer of solar lights in Africa.

Jeremy has been a CNN Principal Voice, and an Entrepreneur of the Year at the New Energy Awards. He was the first Hillary Laureate for International Leadership on Climate Change, chairs the financial-sector think-tank Carbon Tracker and is a consultant on systemic risk to large corporations. He writes and blogs on occasion for the Guardian and the Financial Times, lectures on short courses in business and society at the universities of Cambridge and St Gallen, and is an Associate Fellow at Oxford University’s Environmental Change Institute.

On his own website, The triple crunch log, Jeremy has the following to say about himself:

This log covers the energy-, climate-, and financial crises, and issues pertinent to society’s response to this “triple crunch”…

Let me explain why am I worried about oil depletion, climate change, and dysfunctional investment.

I researched earth history for 14 years, and so know a bit about what makes up the climate system. I researched oil source rocks for several of those years, funded by BP and Shell among others, and I explored for oil and gas in the Middle East and Asia, so I have a background in the issues relevant to peak oil. And more recently I have been a clean-energy entrepreneur and investor for more than decade, as founder of a solar energy company and founding director of a Swiss venture capital fund, so I have seen how the capital markets operate close to. That experience is the basis for my concerns…

Many of the critics who comment on my blogs urge readers to discount everything I say because I am trying to sell solar energy, and so therefore must be in it for the money, hyping concerns about climate change and peak oil in the cause of self enrichment. (As you would). They have it completely the wrong way round.

I left a lucrative career consulting for the oil industry, and teaching its technicians, because I was concerned about global warming and wanted to act on that concern. I joined Greenpeace (1989), on a fraction of my former income, to campaign for clean energy. I left Greenpeace (1997) to set up a non-profit organisation campaigning for clean energy. I turned it into a for-profit company (1999) because I came to the view that was the best possible way I could campaign for clean energy – by creating a commercial success that could show the way. The company I set up gives 5% of its operating profit to a charity that also campaigns for clean energy, SolarAid. All that said, I hope Solarcentury makes a lot of money. It won’t have succeeded in its mission if it doesn’t. I’m hoping fewer people will still want to discount my arguments, knowing the history.

Today marks the UK availability of his book, The Energy of Nations. Heeding its own advice, quoted above, that there are drawbacks to presenting arguments in an overly rational or compelling format, the book proceeds down a parallel course. A large part of the book reads more like a novel than a textbook, with numerous fascinating episodes retold from Jeremy’s diaries.

937893A1-06FA-4829-B09E-599DEFDC1C7F

The cast of characters that have walk-on parts in these episodes include prime ministers, oil industry titans, leading bankers, journalists, civil servants, analysts, and many others. Heroes and villains appear and re-appear, sometimes grown wiser with the passage of years, but sometimes remaining as recalcitrant, sinister (yes), and slippery (yes again) as ever.

A core theme of the book is risk blindness. Powerful vested interests in society have their own reasons to persuade public opinion that there’s nothing to worry about – that everything is under control. Resources at the disposal of these interests (“the incumbency”) inflict a perverse blindness on society, as regards the risks of the status quo. Speaking against the motion at a debate, This House Believes Peak Oil Is No Longer a Concern, in London’s Queen Elizabeth II Congress Centre in March 2009, in the aftermath of the global financial crisis brought on by hugely unwarranted over-confidence among bankers, Jeremy left a trenchant analogy hanging in the mind of the audience:

I explain that those of us who worry about peak oil fear that the oil industry has lapsed into a culture of over-exuberance about both the remaining oil reserves and prospects of resources yet to be turned into reserves, and about the industry’s ability to deliver capacity to the market even if enough resources exist.

Our main argument is that new capacity flows coming onstream from discoveries made by the oil industry over the past decade don’t compensate for depletion. Hence projections of demand cannot be met a few years hence. This problem will be compounded by other issues, including the accelerating depletion of the many old oilfields that prop up much of global oil production today, the probable exaggeration by OPEC countries of their reserves, and the failure of the ‘price-mechanism’ assumption that higher prices will lead to increased exploration and expanding discoveries…

In conclusion, this debate is all about the risk of a mighty global industry having its asset assessment systemically overstated, due to an endemic culture of over-optimism, with potentially ruinous economic implications.

I pause to let that sentence hang in the air for a second or two.

Now that couldn’t possibly happen, could it?

This none too subtle allusion to the disaster playing out in the financial sector elicits a polite laugh from the audience…

Nowadays, people frequently say that the onset of shale oil and gas should dissolve fears about impending reductions in the availability of oil. Jeremy sees this view as profoundly misguided. Shale is likely to fall far, far short of the expectations that have been heaped on it:

For many, the explosive growth of shale gas production in the USA – now extending into oil from shale, or ‘tight oil’ as it is properly known – is a revolution, a game-changer, and it even heralds a ‘new era of fossil fuels’. For a minority, it shows all the signs of being the next bubble in the markets.

In the incumbency’s widely held view, the US shale gas phenomenon can be exported, opening the way to cheap gas in multiple countries. For others, even if there is no bubble, the phenomenon is not particularly exportable, for a range of environmental, economic and political reasons

This risk too entails shock potential. Take a country like the UK. Its Treasury wishes actively to suppress renewables, so as to ensure that investors won’t be deterred from bankrolling the conversion of the UK into a ‘gas hub’. Picture the scene if most of the national energy eggs are put in that basket, infrastructure is capitalised, and then supplies of cheap gas fall far short of requirement, or even fail to materialise.

As the book makes clear, our collective risk blindness prevents society as a whole from reaching a candid appraisal of no fewer than five major risks facing us over the next few years: oil shock, climate shock, a further crash in the global financial system, the bursting of a carbon bubble in the capital markets, and the crash of the shale gas boom. The emphasis on human irrationality gels with a lot of my own prior reading – as I’ve covered e.g. in Our own entrenched enemies of reasonAnimal spirits – a richer understanding of economics, Influencer – the power to change anything, as well as in my most recent posting When faith gets in the way of progress.

The book concludes with a prediction that society is very likely to encounter, by as early as 2015, either a dramatic oil shock (the widespread realisation that the era of cheap oil is behind us, and that the oil industry has misled us as badly as did the sellers of financial hocus pocus), or a renewed financial crisis, which would then precipitate (but perhaps more slowly) the same oil shock. To that extent, the book is deeply pessimistic.

But there is plenty of optimism in the book too. The author believes – as do I – that provided suitable preparatory steps are taken (as soon as possible), society ought to be able to rebound from the forthcoming crash. He spends time explaining “five premises for the Road to Renaissance”:

  1. The readiness of clean energy for explosive growth
  2. The intrinsic pro-social attributes of clean energy
  3. The increasing evidence of people power in the world
  4. The pro-social tendencies in the human mind
  5. The power of context that leaders will be operating in after the oil crash.

But alongside his optimism, he issues a sharp warning:

I do not pretend that things won’t get much worse before they get better. There will be rioting. There will be food kitchens. There will be blood. There already have been, after the financial crash of 2008. But the next time round will be much worse. In the chaos, we could lose our way like the Maya did.

In summary, it’s a profoundly important book. I found it to be a real pleasure to read, even though the topic is nerve-racking. I burst out laughing in a number of places, and then reflected that it was nervous laughter.

The book is full of material that will probably make you want to underline it or tweet an extract online. The momentum builds up to a dramatic conclusion. Anyone concerned about the future should make time to read it.

Not everyone will agree with everything it contains, but it is clearly an honest and heartfelt contribution to vital debates. The book has already been receiving some terrific reviews from an interesting variety of people. You can see those, a summary, Chapter One, and links for buying the book here.

Finally, it’s a book that is designed to provoke discussion. I’m delighted that the author has agreed to speak at a London Futurists event on Saturday 5th October. Please click here for more details and to RSVP. This is a first class topic addressed by a first class speaker, which deserves a first class audience to match!

19 August 2013

Longevity and the looming financial meltdown

Filed under: aging, books, challenge, converged medicine, Economics, futurist, healthcare, rejuveneering, SENS — David Wood @ 2:12 pm

What kind of transformational infrastructure investment projects should governments prioritise?

In the UK, government seems committed to spending a whopping £42 billion between now and 2032 on a lengthy infrastructure project, namely the “HS2” High Speed rail link which could see trains travelling between London, Birmingham, and six other cities, at up to 250 miles per hour. The scheme has many critics. As Nigel Morris notes in The Independent,

In an analysis published today (Monday), the IEA (Institute for Economic Affairs ) says the scheme’s cost has been vastly underestimated and had failed to take into account changes to routes and extra tunnelling because of local opposition.

Richard Wellings, its author, said: “The evidence is now overwhelming that this will be unbelievably costly to the taxpayer while delivering incredibly poor value for money.”

Supporters of this investment claim that the improved infrastructure will be a boon for business in the UK. Multi-year infrastructure improvement projects are something that the private sector tends not to attempt. Unless there’s coordination from government, this kind of project will not happen.

The BBC news website (here and here) helpfully listed ten alternative infrastructure improvement projects that might be better recipients of portions of the £42B earmarked for HS2. Suggestions include:

  • A new road motorway for the east of Britain
  • A bridge to the Isle of Wight
  • A new Channel tunnel, directly accessible to car drivers
  • Tram systems for Liverpool and Leeds
  • A tunnel between Great Britain and Ireland
  • Aerial cycle highways for London

If it were my decision, I would reallocate a large chunk of this funding to a different kind of multi-year infrastructure improvement project. This is in the area of health rather than the area of transport. The idea is to significantly promote research and deployment of treatments in preventive and regenerative medicine.

Ageless CoverThe argument for this kind of sustained investment is laid out in the book The Ageless Generation: How Advances in Biomedicine Will Transform the Global Economy, by Alex Zhavoronkov, which I’ve just finished reading. It’s a compelling analysis.

Alex will be sharing his views at a forthcoming meeting of the London Futurists, on Saturday 31st July. There are more details of this meeting here. (Note that a number of copies of the speaker’s book will be available free of charge to attendees of this meeting.)

The book contains many eye-opening pointers to peer-reviewed research. This covers the accelerating pace of medical breakthroughs, in areas such as bioartificial organs, stem cell therapies, repairing damaged tissues, fortifying the immune system, and autophagy. The research also covers financial and economic matters.

For example, here’s a snippet from the 2009 report “The Burden of Chronic Disease” (PDF) – which is written from a US point of view, though the implications apply for other countries too:

Our current economic reality reminds us that now more than ever, we need to invest in the backbone of our economy: the American workforce. Without question, the single biggest force threatening U.S. workforce productivity, as well as health care affordability and quality of life, is the rise in chronic conditions…

Further into that report, data is quoted from the Milken Institute report “The Economic Burden of Chronic Disease” (PDF)

By our calculations, the most common chronic diseases are costing the economy more than $1 trillion annually—and that figure threatens to reach $6 trillion by the middle of the century.

The costs include lost of productivity, as well as absenteeism:

The potential savings on treatment represents just the tip of the proverbial iceberg. Chronically ill workers take sick days, reducing the supply of labor—and, in the process, the GDP. When they do show up for work to avoid losing wages, they perform far below par—a circumstance known as “presenteeism,” in contrast to absenteeism. Output loss (indirect impacts) due to presenteeism (lower productivity) is immense—several times greater than losses associated with absenteeism. Last (but hardly a footnote), avoidable illness diverts the productive capacity of caregivers, adding to the reduction in labor supply for other uses. Combined, the indirect impacts of these diseases totaled just over $1 trillion in 2003…

In his book, Alex builds on this analysis, focussing on the looming costs to healthcare systems and pensions systems of ever greater portions of our population being elderly and infirm, and becoming increasingly vulnerable to chronic illnesses. Countries face bankruptcy on account of the increased costs. At the very least, we must expect radical changes in the provision of social welfare. The pensionable age is likely to rocket upwards. Families are likely to discover that the provisions they have made for their old age and retirement are woefully inadequate.

The situation is bleak, but solutions are at hand, through a wave of biomedical innovation which could make our recent wave of IT innovation look paltry in comparison. However, despite their promise, these biomedical solutions are arriving too slowly. The healthcare and pharmaceutical industries are bringing us some progress, but they are constrained by their own existing dynamics.

Alex_cover_2_smallAs Alex writes,

The revolution in information technology has irreversibly changed our lives over the past two decades. However, advances in biomedicine stand poised to eclipse the social and economic effects of IT in the near future.

Biomedical innovations typically reach the mass market in much slower fashion than those from information technology. They follow a paradigm where neither demand, in the form of the consumer, nor supply, in the form of the innovator, can significantly accelerate the process. Nevertheless, many of the advances made over the past three decades are already propagating into mainstream clinical practice and converging with other technologies extending our life spans.

However, in the near-term, unless the governments of the debt-laden developed countries make proactive policy changes, there is a possibility of lengthy economic decline and even collapse.

Biomedical advances are not all the same. The current paradigm in biomedical research, clinical regulation and healthcare has created a spur of costly procedures that provide marginal increases late in life extending the “last mile”, with the vast percentage of the lifetime healthcare costs being spent in the last few years of patient’s life, increasing the burden on the economy and society.

There is an urgent need to proactively adjust healthcare, social security, research and regulatory policies:

  • To ameliorate the negative near-term effects
  • To accelerate the mass adoption of technologies contributing positively to the economy.

Now that’s a project well worth spending billions on. It’s a vision of expanded healthspans rather than just of expanded lifespans. It’s a vision of people continuing to be happily productive members of society well into their 80s and 90s and beyond, learning new skills, continuing to expand their horizons, whilst sharing their wisdom and experience with younger generations.

It’s a great vision for the individuals involved (and their families), but also a great vision for the well-being of society as a whole. However, without concerted action, it’s unlikely to become reality.

Footnote 1: To connect the end of this line of reasoning back to its start: If the whole workforce remains healthy, in body, mind, and spirit, for many years more than before, there will be plenty of extra resources and skills available to address problems in other fields, such as inadequate traffic vehicle infrastructure. My own preferred approach to that particular problem is improved teleconferencing, virtual presence, avatar representation, and other solutions based on transporting bits rather than transporting atoms, though there’s surely scope for improved physical transport too. Driverless vehicles have a lot of promise.

Footnote 2: The Lifestar Institute produced a well-paced 5 minute video, “Can we afford not to try?” covering many of the topics I’ve mentioned above. View it at the Lifestar Institute site, or, for convenience, embedded below.

Footnote 3: The Lifestar Institute video was shown publicly for the first time at the SENS4 conference in Cambridge in September 2009. I was in the audience that day and vividly remember the impact the video made on me. The SENS Foundation is running the next in their series of biennial conferences (“SENS 6”) this September, from the 3rd to the 7th. The theme is “Reimagine aging”. I’m greatly looking forward to it!

conf-page-banner

21 March 2013

The burning need for better supra-national governance

International organisations have a bad reputation these days. The United Nations is widely seen as ineffective. There’s a retreat towards “localism”: within Britain, the EU is unpopular; within Scotland, Britain is unpopular. And any talk of “giving up sovereignty” is deeply unpopular.

However, lack of effective international organisations and supra-national governance is arguably the root cause of many of the biggest crises facing humanity in the early 21st century.

That was the thesis which Ian Golding, Oxford University Professor of Globalisation and Development, very ably shared yesterday evening in the Hong Kong Theatre in the London School of Economics. He was quietly spoken, but his points hit home strongly. I was persuaded.

DividedNationsThe lecture was entitled Divided Nations: Why global governance is failing and what we can do about it. It coincided with the launch of a book with the same name. For more details of the book, see this blogpost on the website of the Oxford Martin School, where Ian Golding holds the role of Director.

It’s my perception that many technology enthusiasts, futurists, and singularitarians have a blind spot when it comes to the topic of the dysfunction of current international organisations. They tend to assume that technological improvements will automatically resolve the crises and risks facing society. Governments and regulators should ideally leave things well alone – so the plea goes.

My own view is that smarter coordination and regulation is definitely needed – even though it will be hard to set that up. Professor Goldin’s lecture amply reinforced that view.

On the train home from the lecture, I downloaded the book onto my Kindle. I recommend anyone who is serious about the future of humanity to read it. Drawing upon the assembled insights and wisdom of the remarkable set of scholars at the Oxford Martin School, in addition to his own extensive experience in the international scene, Professor Goldin has crystallised state-of-the-art knowledge regarding the pressing urgency, and options, for better supra-national governance.

In the remainder of this blogpost, I share some of the state-of-consciousness notes that I typed while listening to the lecture. Hopefully this will give a flavour of the hugely important topics covered. I apologise in advance for any errors introduced in transcription. Please see the book itself for an authoritative voice. See also the live tweet stream for the meeting, with the hash-tag #LSEGoldin.

What keeps Oxford Martin scholars awake at night

The fear that no one is listening. The international governance system is in total gridlock. There are failures on several levels:

  • Failure of governments to lift themselves to a higher level, instead of being pre-occupied by local, parochial interests
  • Failure of electorates to demand more from their governments
  • Failure of governments for not giving clearer direction to the international institutions.

Progress with international connectivity

80 countries became democratic in the 1990s. Only one country in the world today remains disconnected – North Korea.

Over the last few decades, the total global population has increased, but the numbers in absolute poverty have decreased. This has never happened before in history.

So there are many good aspects to the increase in the economy and inter-connectivity.

However, economists failed to think sufficiently far ahead.

What economists should have thought about: the global commons

What was rational for the individuals and for national governments was not rational for the whole world.

Similar problems exist in several other fields: antibiotic resistance, global warming, the markets. He’ll get to these shortly.

The tragedy of the commons is that, when everyone does what is rational for them, everyone nevertheless ends up suffering. The common resource is not managed.

The pursuit of profits is a good thing – it has worked much better than central planning. But the result is irrationality in aggregate.

The market alone cannot provide a response to resource allocation. Individual governments cannot provide a solution either. A globally coordinated approach is needed.

Example of several countries drawing water from the Aral Sea – which is now arid.

That’s what happens when nations do the right thing for themselves.

The special case of Finance

Finance is by far the most sophisticated of the resource management systems:

  • The best graduates go into the treasury, the federal reserve, etc
  • They are best endowed – the elite organisation
  • These people know each other – they play golf together.

If even the financial bodies can’t understand their own system, this has black implications for other systems.

The growth of the financial markets had two underbellies:

  1. Growing inequality
  2. Growing potential for systemic risk

The growing inequality has actually led to lobbying that exaggerates inequality even more.

The result was a “Race to the bottom”, with governments being persuaded to get out of the regulation of things that actually did need to be regulated.

Speaking after the crisis, Hank Paulson, US Treasury Secretary and former CEO of Goldman Sachs, in effect said “we just did not understand what was happening” – even with all the high-calibre people and advice available to him. That’s a shocking indictment.

The need for regulation

Globalisation requires regulation, not just at the individual national level, but at an international level.

Global organisations are weaker now than in the 1990s.

Nations are becoming more parochial – the examples of UK (thinking of leaving EU) and Scotland (thinking of leaving UK) are mirrored elsewhere too.

Yes, integration brings issues that are hard to control, but the response to withdraw from integration is terribly misguided.

We cannot put back the walls. Trying to withdraw into local politics is dreadfully misguided.

Five examples

His book has five examples as illustrations of his general theme (and that’s without talking in this book about poverty, or nuclear threats):

  1. Finance
  2. Pandemics
  3. Migration
  4. Climate change
  5. Cyber-security

Many of these problems arise from the success of globalisation – the extraordinary rise in incomes worldwide in the last 25 years.

Pandemics require supra-national attention, because of increased connectivity:

  • The rapid spread of swine flu was correlated tightly with aircraft travel.
  • It will just take 2 days for a new infectious disease to travel all the way round the world.

The idea that you can isolate yourself from the world is a myth. There’s little point having a quarantine regime in place in Oxford if a disease is allowed to flourish in London. The same applies between countries, too.

Technology developments exacerbate the problem. DNA analysis is a good thing, but the capacity to synthesise diseases has terrible consequences:

  • There’s a growing power for even a very small number of individuals to cause global chaos, e.g. via pathogens
  • Think of something like Waco Texas – people who are fanatical Armageddonists – but with greater technical skills.

Cyber-security issues arise from the incredible growth in network connectivity. Jonathan Zittrain talks about “The end of the Internet”:

  • The Internet is not governed by governments
  • Problems to prosecute people, even when we know who they are and where they are (but in a different jurisdiction)
  • Individuals and small groups could destabilise whole Internet.

Migration is another “orphan issue”. No international organisation has the authority to deal with it:

  • Control over immigration is, in effect, an anarchic, bullying system
  • We have very bad data on migration (even in the UK).

The existing global institutions

The global institutions that we have were a response to post-WW2 threats.

For a while, these institutions did well. The World Bank = Bank for reconstruction. It did lead a lot of reconstruction.

But over time, we became complacent. The institutions became out-dated and lost their vitality.

The recent financial crisis shows that the tables have been turned round: incredible scene of EU taking its begging bowl to China.

The tragedy is that the lessons well-known inside the existing institutions have not been learned. There are lessons about the required sequencing of reforms, etc. But with the loss of vitality of these institutions, the knowledge is being lost.

The EU has very little bandwidth for managing global affairs. Same as US. Same as Japan. They’re all preoccupied by local issues.

The influence of the old G7 is in decline. The new powers are not yet ready to take over the responsibility: China, Russia, India, Indonesia, Brazil, South Africa…

  • The new powers don’t actually want this responsibility(different reasons for different countries)
  • China, the most important of the new powers, has other priorities – managing their own poverty issues at home.

The result is that no radical reform happens, of the international institutions:

  • No organisations are killed off
  • No new ones created
  • No new operating principles are agreed.

Therefore the institutions remain ineffective. Look at the lack of meaningful progress towards solving the problems of climate change.

He has been on two Bretton Woods reform commissions, along with “lots of wonderfully smart, well-meaning people”. Four prime ministers were involved, including Gordon Brown. Kofi Annan received the report with good intentions. But no actual reform of UN took place. Governments actually want these institutions to remain weak. They don’t want to give up their power.

It’s similar to the way that the UK is unwilling to give up power to Brussels.

Sleep-walking

The financial crisis shows what happens when global systems aren’t managed:

  • Downwards spiral
  • Very hard to pull it out afterwards.

We are sleep-walking into global crises. The financial crisis is just a foretaste of what is to come. However, this need not be the case.

A positive note

He’ll finish the lecture by trying to be cheerful.

Action on global issues requires collective action by both citizens and leaders who are not afraid to relinquish power.

The good news:

  • Citizens are more connected than ever before
  • Ideologies that have divided people in the past are reducing in power
  • We can take advantage of the amplification of damage to reputation that can happen on the Internet
  • People can be rapidly mobilised to overturn bad legislation.

Encouraging example of SOPA debate in US about aspects of control of the Internet:

  • 80 million people went online to show their views, in just two days
  • Senate changed their intent within six hours.

Some good examples where international coordination works

  • International plane travel coordination (air traffic control) is example that works very well – it’s a robust system
  • Another good example: the international postal system.

What distinguishes the successes from the failures:

  • In the Air Traffic Control case, no one has a different interest
  • But in other cases, there are lots of vested interest – neutering the effectiveness of e.g. the international response to the Syrian crisis
  • Another troubling failure example is what happened in Iraq – it was a travesty of what the international system wanted and needed.

Government leaders are afraid that electorate aren’t ready to take a truly international perspective. To be internationalist in political circles is increasingly unfashionable. So we need to change public opinion first.

Like-minded citizens need to cooperate, building a growing circle of legitimacy. Don’t wait for the global system to play catch-up.

In the meantime, true political leaders should find some incremental steps, and should avoid excuse of global inaction.

Sadly, political leaders are often tied up addressing short-term crises, but these short-term crises are due to no-one satisfactorily addressing the longer-term issues. With inaction on the international issues, the short-term crises will actually get worse.

Avoiding the perfect storm

The scenario we face for the next 15-20 years is “perfect storm with no captain”.

He calls for a “Manhattan project” for supra-national governance. His book is a contribution to initiating such a project.

He supports the subsidiarity principle: decisions should be taken at the most local level possible. Due to hyper-globalisation, there are fewer and fewer things that it makes sense to control at the national level.

Loss of national sovereignty is inevitable. We can have better sovereignty at the global level – and we can influence how that works.

The calibre of leaders

Example of leader who consistently took a global perspective: Nelson Mandela. “Unfortunately we don’t have many Mandelas around.”

Do leaders owe their power bases with electorates because they are parochial? The prevailing wisdom is that national leaders have to shy away from taking a global perspective. But the electorate actually have more wisdom. They know the financial crisis wasn’t just due to bankers in Canary Wharf having overly large bonuses. They know the problems are globally systemic in nature, and need global approaches to fix them.

ian goldin

16 September 2012

Transcending the threat of the long emergency

The not-so-distant future (2030-2045) may turn out very different from how we commonly imagine. It may turn out very different from what we desire.

At that time, those of us who remain alive and who still have the faculty to think critically, may well bemoan the fact that we didn’t properly anticipate the intervening turn of events, and didn’t organise ourselves effectively to enable a better future to unfold. We may bitterly regret our present-day pre-occupations with celebrity gossip and 24×7 reality TV and rivalries between the latest superphones and by bickering over gullible interpretations of antiquated religious folk tales.

Why did we fiddle why Rome burned? Why did we not see the likelihood of Rome burning? Why were we so enthralled to the excitements of consumer goods and free-market economics and low-cost international travel and relentless technology innovation that we failed to give heed to the deeper stresses and strains portending what writer James Howard Kunstler has termed “The Long Emergency“?

The subtitle of Kunstler’s The Long Emergency book is “Surviving the end of oil, climate change, and other converging catastrophes of the twenty-first century“. His writing style is lively and unapologetic. He pays little respect to political correctness. His thesis is not just that supplies of oil are declining (despite vigorously growing demand), but that society fails to appreciate quite how difficult it’s going to be to replace oil with new sources of energy. Many, many aspects of our present-day civilisation depend in fundamental ways on by-products of oil. Therefore, we’re facing an almighty crisis.

Quoting Colin Tudge from The Independent, The Long Emergency carries an endorsement on its front cover:

If you give a damn, you should read this book

I echo that endorsement. Kunstler makes lots of important points about the likely near-future impact of diseases, shortages of fresh water, large multinationals in their runaway pursuit of profits and growth, the over-complexity of modern life, and the risks of cataclysmic wars over diminishing material resources.

I agree with around 80% of what Kunstler says. But even in the 20% where we part company, I find his viewpoint to be illuminating.

For example, I regard Kunstler’s discussion of both solar and wind energy as being perfunctory. He is too quick to dismiss the potential of these (and other) alternative energy sources. My own view is that the same kinds of compound improvements that have accelerated the information and communications hi-tech industries can also apply in alternative energy industries. Even though individual companies fail, and even though specific ideas for tech improvement are found wanting, there remains plenty of scope for cumulative overall improvement, with layers of new innovations all building on prior breakthroughs.

Kunstler’s first reply to this kind of rejoinder is that it confuses technology with energy. In a recent Rolling Stone interview, “James Howard Kunstler on Why Technology Won’t Save Us“, he responds to the following observation by journalist Jeff Goodell:

You write about visiting the Google campus in Silicon Valley, and how nobody there understood the difference between energy and technology.

Kunstler’s reply:

They are not substitutable. If you run out of energy, you can’t plug in technology. In this extremely delusional society right now, one of the reigning delusions is that if you run out of energy, you can just turn to technology. We completely don’t understand that. And the tragic thing is, the people who ought to understand it don’t get it. And if the people at Google don’t know the difference between energy and technology – well, then who does?

My own comment: the world is not facing a shortage of energy. An analysis published recently in Nature shows that wind energy could provide 20-100 times current global power demand. And as for solar energy, National Geographic magazine reports

Every hour the sun beams onto Earth more than enough energy to satisfy global energy needs for an entire year.

So the problem isn’t one of lack of energy. It’s a problem of harvesting the energy, storing it, and transporting it efficiently to where it needs to be used. That’s a problem to which technology can apply itself with a vengeance.

But as I said, Kunstler is insightful even when he is wrong. His complaint is that it is foolish to simply rely on some magical powers of a free-market economy to deliver the technology smarts needed to solve these energy-related problems. Due to the dysfunctions and failures of free-market economies, there’s no guarantee that industry will be able to organise itself to make the right longer-term investments to move from our current “local maximum” oil-besotted society to a better local maximum that is, however, considerably remote from where we are today. These are as much matters of economics and politics as they are of technology. Here, I agree with Kunstler.

Kunstler’s second reply is that, even if enough energy is made available from new sources, it won’t solve the problem of diminishing raw materials. This includes fresh water, rare minerals, and oil itself (which is used for much more than a source of energy – for example, it’s a core ingredient of plastics). Kunstler argues that these raw materials are needed in the construction and maintenance of alternative energy generators. So it will be impossible to survive the decline in the availability of oil.

My comment to this is that a combination of sufficient energy (e.g. from massive solar generators) and smart technology can be deployed to generate new materials. Fresh water can be obtained from sea water by desalination plants. Oil itself can be generated in due course by synthetic biology. And if it turns out that we really do lack a particular rare mineral, presently needed for a core item of consumer electronics, we can change the manufacturing process to swap in an alternative.

At least, these transformations are theoretically possible. But, again, they’ll probably require greater coordination than our present system of economics and politics enables, with its over-emphasis on short-termism.

Incidentally, for a particularly clear critique of the idea that untramelled free market economics is the best mechanism to ensure societal progress, I recommend “23 things they don’t tell you about capitalism“, by Cambridge University economics professor Ha-Joon Chang. This consists of 23 chapters which each follow the same form: a common tenet of free-market economics is presented (and is made to appear plausible), and then is thoroughly debunked, by means of a mixture of data and theory. Professor Chang isn’t opposed to markets, but he does believe in the necessity for key elements of state intervention to steer markets. He offers positive remedies as well as negative criticisms. Alternatively, you might also enjoy “What money can’t buy: the moral limits of markets“, by Harvard professor Michael J. Sandel. That takes a complementary path, with examples that are bound to make both proponents and opponents of free markets wince from time to time. They really get under the skin. And they really make you think.

Both books are (in my viewpoint) brilliantly written, though if you only have time to read one, I’d recommend the one by Ha-Joon Chang. His knowledge of real-world economics is both comprehensive and uplifting – and his writing style is blessedly straightforward. Being Korean born, his analysis of the economic growth in Korea is especially persuasive, but he draws insight from numerous other geographies too.

Putting the future on the agenda

As you can tell, I see the threat of self-induced societal collapse as real. The scenarios in The Long Emergency deserve serious attention. For that reason, I’m keen to put the future on the agenda. I don’t mean discussions of whether national GDPs will grow or shrink by various percentage points over the next one or two years, or whether unemployment will marginally rise or marginally fall. Instead, I want to increase focus on the question of whether we’re collectively able to transition away from our profligate dependence on oil (and away from other self-defeating aspects of our culture) in sufficient time to head off environmental and economic disaster.

That’s the reason I’m personally sponsoring a series of talks at the London Futurists called “The Next Golden Age Of Technology 2030-45“.

The first in that series of talks took place on Saturday at Birkbeck College in Central London: “Surfing The Sixth Wave: Modelling The Next Technology Boom“, with lead speaker Stephen Aguilar-Millan. Stephen is is the Director of Research at the European Futures Observatory, a futures think tank based in the UK.

The different talks in the series are taking different angles on what is a complex, multi-faceted subject. The different speakers by no means all agree with each other. After all, it’s clear that there’s no consensus on how the future is likely to unfold.

Rather than making specific predictions, Stephen’s talk focused more on the question of how to think about future scenarios. He distinguished three main approaches:

  1. Trends analysis – we can notice various trends, and consider extrapolating them into the future
  2. Modelling and systems thinking – we seek to uncover underlying patterns, that are likely to persist despite technology changes
  3. Values-based thinking – which elevates matters of human interest, and considers how human action might steer developments away from those predicted by previous trends and current models.

Stephen’s own approach emphasised models of change in

  • politics (a proposed cycle of concerns: community -> corporate -> individual -> atomistic -> community…),
  • economics (such as the Kondratieff Cycle),
  • and social (such as generational changes: boomer -> generation X -> millennial -> homeland -> scarcity),
  • as well as in technology per se.

For a model to understand long-term technological change, Stephen referred to the Venezuelan scholar Carlota Perez, whose book “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages” is held in high regard. Perez describes recent history as featuring five major technical-economic cycles:

  1. From 1771: The First Industrial Revolution (machines, factories, and canals)
  2. From 1829: The Age of Steam, Coal, Iron, and Railways
  3. From 1875: The Age of Steel and Heavy Engineering (electrical, chemical, civil, naval)
  4. From 1908: The Age of the Automobile, Oil, Petrochemicals, and Mass Production
  5. From 1971: The Age of Information Technology and Telecommunications.

In this analysis, each such cycle takes 40-60 years to spread across the world and reach maturity. Each techno-economic paradigm shift involves “a change in the direction of change” and brings:

  • New industries
  • New infrastructure
  • New ways of transport and communication
  • New ways of producing
  • A new way of working
  • A new way of living.

Golden ages of technology – insight from Carlota Perez

Stephen’s slides will shortly be posted onto the London Futurist website. The potential interplay of the different models is important, but in retrospect, the area that it would have been good to explore further was the analysis by Carlota Perez. There are a number of videos on YouTube that feature her presenting her ideas. For example, there’s a four-part presentation “Towards a Sustainable Global Golden Age” – where she also mentions a potential sixth technical-economic wave:

  • The Age of Biotech, Bioelectronics, Nanotech, and new materials.




Unlike Kunstler, Perez offers an optimistic view of the future. Whereas Kunstler in effect takes wave four as being irretrievably central to modern society, Perez argues that the technology of wave five is already in the process of undoing many of the environmental problems introduced by wave four. This transformation is admittedly difficult to discern, Perez explains, because of factors which prolong the “energy intensive” culture of wave four (even though the “information intensive” wave five already enables significant reductions in energy usage):

  • The low price of oil in the 1980s and 1990s
  • The low price of labor in China and Asia
  • The persistence of “the American way of life” as the “model of well-being” that the world wishes to emulate.

On the other hand, a paradigm change in expectation is now accelerating (see slide 20 of the PDF accompanying the video):

  • Small is better than big
  • Natural materials are better than synthetic
  • Multipurpose is better than single function
  • ‘Gourmet’ food is better than standard
  • Fresh organic fruit and vegetables are healthier
  • Exercise is important for well-being
  • Global warming is a real danger
  • Not commuting to work is possible and preferable
  • Solar power is luxurious
  • Internet communications, shopping, learning and entertainment are better than the old ways.

Nevertheless, despite her optimism that “a sustainable positive-sum future is possible”, Perez states clearly (slide 23):

  • But it will not happen automatically: the market cannot do it alone
  • The state must come back into the picture

Her analysis proceeds:

  • Each technological revolution propagates in two different periods
  • The first half sets up the infrastructure and lets the markets pick the winners
  • The second half (“the Golden Age” of the wave) reaps the full economic and social potential
  • Each Golden Age has been facilitated by enabling regulation and policies for shaping and widening markets.

Scarcity resolved?

The next London Futurist talk in this series will pick up some of the above themes. It will take place on Saturday the 20th of October, with independent futures consultant Guy Yeomans as the lead speaker. To quote from the event page:

Many people regard technological invention as not just a key driving force in human evolution but as the primary source of historical change, profoundly influencing wider economic and social developments. Is this perspective valid? Does it enable us to fully explain the world we live in today, and may actively occupy tomorrow?

Specifically, will technological invention be the ‘saviour’ some believe for our collective future challenges? Can we rely on technology to resolve looming issues of scarcity?

To answer these questions, this talk re-examines the emergence of technology and its role in human affairs. It does this by reviewing the history of the discipline of futures thinking, including techniques such as trend analysis themes.

The talk begins by considering the conditions under which futures thinking formed in North America in the aftermath of World War II. From this, we’ll assess what contributions the methods and techniques created during this period have made to contemporary strategic planning. Using parts of this framework, we’ll formulate a perspective on the key issues likely to affect future technological needs, and assess the dynamics via which technologies may then emerge to meet these needs.

Crucial to all this will be our ability to identify and reveal the core assumptions underpinning such a perspective, thereby providing a more robust footing from which to investigate the ways in which technology might actually evolve over the coming decades. From this, we’ll finally ask:Will scarcity even emerge, let alone need to be overcome?

Later talks in the same series will be given by professional futurists Nick Price, Ian Pearson, and Peter Cochrane.

28 July 2012

More for us all, or more for them?

Filed under: books, disruption, Economics, futurist, Humanity Plus, politics, UKH+ — David Wood @ 1:15 pm

The opening keynote speaker at this weekend’s World Future 2012 conference this weekend was Lee Rainie, the Director of the Pew Research Center’s Internet & American Life Project. Lee’s topic, “Future of the Internet”, was described as follows in the conference agenda:

In this keynote presentation based on his latest book, Networked: The New Social Operating System (co-authored with Barry Wellman), Dr. Rainie will discuss the findings of the most recent expert surveys on the future of teens’ brains, the future of universities, the future of money, the impact of Big Data, the battle between apps and the Web, the spread of gamefication, and the impact of smart systems on consumers.

That was a lot to cover in 45 minutes, but Lee said he would speak fast – and he did!

Analysis  of the Pew Internet expert surveys Lee mentions is available online at http://www.elon.edu/e-web/predictions/expertsurveys/2012survey/ – where you’ll find a wealth of fascinating material.

But Lee’s summary of the summary (if I can put it like that) is that there are two potential pathways ahead, between now and 2020, regarding what happens with Internet technology:

  1. In one pathway, we all benefit: the fruits of improving Internet technologies are widely shared
  2. In another pathway, the benefits are much more restricted, to “them”.

Hence the question: “More for us all, or more for them?”

“Them” could be political leaders, or it could be corporate leaders.

Listening to Lee’s words, I was struck by a powerful resonance with the main theme of a BIG book on history that I’m the processing of reading. (Actually, I’m listening to an Audible version of it on my iPod.)

The book is “Why nations fail the origins of power, prosperity, and poverty“, by Daron Acemoglu and James Robinson. It has a marvelous sweep through events in all eras of human history and in all corners of the globe.

I’m only six hours into what will be a 15 hour long listen, but I already suspect this to be the most important book about history that I’ve ever read. (And as regular readers of this blog know, I read a lot.)

It’s not just “one thing after another” (fascinating though that kind of history book can be), but a profound analysis of the causes of divergence between societies with prosperity and societies with poverty.

In brief, the primary differentiator is the kind of political institutions that exist:

  • Are they extractive, in which the outputs of society are siphoned by a relatively small elite
  • Or are they inclusive, which a much greater sharing of power, influence, and potential benefit?

The nature of political institutions in turn influence the nature and operation of economic institutions.

The book has many striking examples of how ruling elites blocked the development or the wider application of technology and/or market reforms, fearing the “creative destruction” which would be likely to follow – threatening their grip on power.

One example in the book is the story of the reaction of the Roman emperor Tiberius to the invention of unbreakable glass. This story is also told by, for example, Computer World blogger John Riley, in his article “Why innovation is not always welcomed with open arms“:

The story of the Roman inventor of flexible glass 2000 years ago is a salutary lesson for all innovators, especially those within organisations.

As Isadore of Seville tells it, the inventor went to the Roman Emperor Tiberius (14-37 AD) with a drinking bowl made of this flexible and ductile glass, and threw in on the ground to demonstrate that it didn’t shatter.

Tiberius asked him if anyone else knew about the invention. The inventor said he’d told no-one.

And he was instantly beheaded.

What the unfortunate inventor hadn’t seen was the big picture – Tiberius had instantly realised that cheap, easily produced flexible glass that didn’t break would wreck the Imperial monopoly on gold and silver!

That, sadly is too often the case in big companies, where someone comes up with a bright idea which in practice means interfering with a profitable short term operation or disintermediating a product line.

In such cases innovators these days don’t get killed – they get ignored, sidelined, blocked or gagged under non-disclosures. Many innovative products have been  rejected by large suppliers controlling projects when they threaten monopolistic inefficiencies. There are many cases of other innovations being bought up and mothballed…

As Acemoglu and Robinson point out, in a different political climate, the inventor could have taken his invention to market without the explicit knowledge and permission of the ruling elite (such as the emperor). That would be a world in which, to return to my opening question, there would more likely be technology benefits for everyone, rather than control of technology being subordinated to the benefits of a clique.

But our current political climate is highly troubled. My friend and Humanity+ UK co-organiser Amon Kalkin describes the situation like this:

We are in a time of crisis. Large numbers of people are increasingly disenfranchised, squeezed on all sides and with no hope of appeal to authorities. Why? Because those very same authorities – our governments – are virtually indistinguishable from the corporate interests who are gaining most from the current situation. We live under a system where our votes essentially don’t matter. You can pick a team, but you’re not allowed to change the rules of the game. Even worse, we have been trained to think of this as a normal and natural situation. Who are we to question these powerful people? Who are we to awaken, to unify and demand change?

Rather than just considering the topic “Why Nations Fail“, we might well consider “Why Transnational Institutions Fail” – referring to, for example, the evident problems within the Eurozone and within the United Nations.

The same imperative applies: we need to find a mode of collaboration that avoids being subverted by the special interests of ruling minorities – whether these minorities be economic elites or political elites.

That imperative has led Amon to found the Zero State movement:

Zero State is a movement for positive social change through technology.

We’re a grass-roots world community pursuing smart, compassionate solutions to problems, and improving the human condition.

Personal transformative technologies we pursue include life extension and Artificial Intelligence. Social projects include accelerating changebasic incomeMeshnet and Bitcoin, while lifestyle initiatives explore areas such as the arts, spirituality, fashion and culture.

More recently, Amon and various other Zero State members are launching a political party, “Consensus“, to promote their Zero State vision. My quote above (“We are in a time of crisis…”) comes from Amon’s description of what he plans to say at the launch meeting for Consensus that will take place next weekend in London.

For more details about this launch event, see this announcement on the London Futurist meetup site:

The case for a Zero State political movement

Many futurists envisage a better, more compassionate society, organized in terms of using technological developments to maximize well-being rather than simply concentrating resources in a few ultra-rich hands and leaving everybody else increasingly worse off. But all too often, futurists talk about positive outcomes as if such things come without work or struggle. They are apparently oblivious to the fact that right now our society is stalling, strangled by a tiny proportion of citizens who do not share our values.

There have been few moments in the history of our society like the one facing us now, where deep crisis also offers the opportunity for deep, positive change. It’s the time for futurists to step up to actively guide our society toward the better futures we envisage.

The CONSENSUS is a newly-formed UK-based political party which seeks to harness the intelligence and compassion to be found among futurists and other subcultures to the design of a real, improved future, for us and our children. Drawing inspiration from the eight principles of the Zero State movement, the CONSENSUS will encourage people to think about the possibilities open to society once again.

The CONSENSUS is the first party of its kind. We intend to reach out to other parties and groups who share similar views and goals. If we are successful, there will soon be a number of CONSENSUS parties at the national level around the world, all part of an organization known as the Consensus of Democratic Futurist Parties (CDFP). The UK CONSENSUS is already affiliated with an international futurist organization in the Zero State movement, and the seeds of multiple local political parties have been sown.

We welcome the opportunity to hear your views about the state of society today and its future, and what are the issues and goals that we should focus on. No matter what your own views are, this is your chance to have your say, and to have it influence a concrete course of action.

If you care about our future, and the possibility of finding intelligent, compassionate solutions to our problems, then we encourage you to come to this meeting to:

  • find out how you can help
  • join the conversation
  • offer your views on how we should move forward…

15 April 2012

Hope for healing healthcare

Filed under: books, change, Economics, healthcare, market failure, medicine, passion — David Wood @ 12:45 am

Within the space of the first few pages of his book “The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care“, T.R. Reid had me chuckling at some of his descriptions of healthcare systems around the world. Within these same few pages, he also triggered in me a wave of anger and disbelief. He’s a veteran foreign correspondent for the Washington Post, and his writing skills shine throughout his book. Marshaling personal anecdotes from his experiences during visits to healthcare facilities in ten different countries, with historical accounts of how these healthcare systems came to have their current form, his writing addressed both my head and my heart.

Given the title of the book, it’s no spoiler for me to reveal that the episode in the first few pages that triggered my feeling of anger and disbelief was located in the USA. NY Times journalist Nicholas D. Kristof also read T.R. Reid’s book and had the same reaction as me. He retells the story in his article “The Body Count at Home“:

Nikki White was a slim and athletic college graduate who had health insurance, had worked in health care and knew the system. But she had systemic lupus erythematosus, a chronic inflammatory disease that was diagnosed when she was 21 and gradually left her too sick to work. And once she lost her job, she lost her health insurance.

In any other rich country, Nikki probably would have been fine, notes T. R. Reid in his important and powerful new book, “The Healing of America.” Some 80 percent of lupus patients in the United States live a normal life span. Under a doctor’s care, lupus should be manageable…

As Mr. Reid recounts, Nikki tried everything to get medical care, but no insurance company would accept someone with her pre-existing condition. She spent months painfully writing letters to anyone she thought might be able to help. She fought tenaciously for her life.

Finally, Nikki collapsed at her home in Tennessee and was rushed to a hospital emergency room, which was then required to treat her without payment until her condition stabilized. Since money was no longer an issue, the hospital performed 25 emergency surgeries on Nikki, and she spent six months in critical care.

“When Nikki showed up at the emergency room, she received the best of care, and the hospital spent hundreds of thousands of dollars on her,” her step-father, Tony Deal, told me. “But that’s not when she needed the care.”

By then it was too late. In 2006, Nikki White died at age 32. “Nikki didn’t die from lupus,” her doctor, Amylyn Crawford, told Mr. Reid. “Nikki died from complications of the failing American health care system.”...

Alas, the case of Nikki White is very far from being an exception. Kristof notes the estimates that “18,000 Die a Year for Lack of Insurance” each year in the US. (And numerous online responses to his blog post give other sad personal experiences.)

But here’s what I found really stomach-churning in the opening pages of T.R. Reid’s book:

Many Americans intensely dislike the idea that we might learn useful policy ideas from other countries, particularly in medicine. The leaders of the healthcare industry and the medical profession, not to mention the political establishment, have a single, all-purpose response they fall back on whenever someone suggests that the United States might usefully study foreign healthcare systems: “But it’s socialized medicine!”

This is supposed to end the argument. The contention is that the United States, with its commitment to free markets and low taxes, could never rely on big-government socialism the way other countries do. Americans have learned in school that the private sector can handle things better and more efficiently than government ever could.

In US policy debates, the term “socialized medicine” has been a powerful political weapon…  The term was popularized by a public relations firm working for the American Medical Association in 1947 to disparage President Truman’s proposal for a national healthcare system. It was a label, at the dawn of the cold war, meant to suggest that anybody advocating universal access to healthcare must be a communist. And the phrase has retained its political power for six decades…

I was reminded of the remarkable claims at the beginning of this year by would-be President Rick Santorum that the “NHS devastated Britain” and caused “the collapse of the British Empire”.

T.R. Reid had been bureau chief for the Washington Post in both London and Tokyo, and had lived in each of these cities for several years with his family. That gave him considerable first-hand experience of the healthcare systems in these two countries. The book arose from a wider set of visits, including France, Germany, Canada, India, Nepal, Switzerland, and Taiwan. He had two reasons for all these visits:

  1. To inquire about possible treatments for a shoulder injury he had sustained many years previously, but which had recently flared up again, becoming increasingly painful and hard to move. As he explained, “I could no longer swing a golf club. I could barely reach up to replace a lightbulb overhead or get the wine-glasses from the top shelf. Yearning for surcease from sorrow, I took that bum shoulder to doctors and clinics… in countries around the world”
  2. To seek, more generally, for “a solution to a much bigger medical problem… a prescription to fix the seriously ailing healthcare system” of the US.

He retells his diverse experiences with good humour and great insight. Along the way, he lists and punctures “Five Myths About Health Care in the Rest of the World” – myths that are widely believed in some parts of the US, but which have limited basis in actual practice:

  1. It’s all socialized medicine out there
  2. Overseas, care is rationed through limited choices or long lines
  3. Foreign health-care systems are inefficient, bloated bureaucracies
  4. Cost controls stifle innovation
  5. Health insurance has to be cruel

For example, on whether cost controls stifle innovation, he notes the following:

The United States is home to groundbreaking medical research, but so are other countries with much lower cost structures. Any American who’s had a hip or knee replacement is standing on French innovation. Deep-brain stimulation to treat depression is a Canadian breakthrough. Many of the wonder drugs promoted endlessly on American television, including Viagra, come from British, Swiss or Japanese labs.

Overseas, strict cost controls actually drive innovation. In the United States, an MRI scan of the neck region costs about $1,500. In Japan, the identical scan costs $98. Under the pressure of cost controls, Japanese researchers found ways to perform the same diagnostic technique for one-fifteenth the American price. (And Japanese labs still make a profit.)

And the facts and figures throughout the book are relentless and comprehensive:

  • Average life expectancy at birth in the United States is 77.85 years. “That means the world’s richest country ranks forty-seventh, just ahead of Cyprus and a little behind Bosnia and Herzegovina, in terms of longevity. The United States is among the worst of the industrialized nations on this score; for that matter, the average American can expect a shorter life than people in relatively poor countries like Jordan”
  • “For those Americans who are uninsured or under-insured, any bout with illness can be terrifying on two levels. In addition to the risk of disability or death due to the disease, there’s the risk of financial ruin due to the medical and pharmaceutical bills. This is a uniquely American problem. When I was traveling the world on my quest, I asked the health ministry of each country how many citizens had declared bankruptcy in the past year because of medical bills. Generally, the officials responded to this question with a look of astonishment, as if I had asked how many flying saucers from Mars landed in the ministry’s parking lot last week. How many people go bankrupt because of medical bills? In Britain, zero. In France, zero. In Japan, Germany, the Netherlands, Canada, Switzerland: zero. In the United States, according to a joint study by Harvard Law School and Harvard Medical School, the annual figure is around 700,000”
  • “The one area where the United States unquestionably leads the world is in spending. Even countries with considerably older populations, with more need for medical attention, spend much less than we do. Japan has the oldest population in the world, and the Japanese go to the doctor more than anybody – about fourteen office visits per year, compared with five for the average American. And yet Japan spends about $3,000 per person on health care each year; we burn through $7,000 per person”
  • “When a Harvard Medical School professor working at the World Health Organisation developed a complicated formula to rate the quality and fairness of national healthcare systems around the world, the richest nation on earth ranked thirty-seventh… just behind Dominica and Costa Rica, and just ahead of Slovenia and Cuba…”

(For more about the WHO comparative rankings of healthcare systems, see e.g. Wikipedia’s coverage. T.R. Reid addresses various criticisms of the methodology in an Appendix to his book.)

Rising above the facts and figures, and the various anecdotes, the book provides a handy framework for making sense of the different systems deployed around the world:

“Fortunately, for all the local variations, health care systems tend to follow general patterns. In some models, government is both the provider of health care and the payer. In others, doctors and hospitals are in the private sector but government pays the bills. In still other countries, both the providers and the payers are private.”

There are four basic models:

  1. The Bismarck Model: “Both health care providers and payers are private entities. The model uses private health insurance plans, usually financed jointly by employers and employees through payroll deduction. Unlike the U.S. health insurance industry, though, Bismarck-type plans are basically charities: They cover everybody, and they don’t make a profit”
  2. The Beveridge Model: “Health care is provided and financed by the government, through tax payments. There are no medical bills; rather, medical treatment is a public service, like the fire department or the public library. In Beveridge systems, many (sometimes all) hospitals and clinics are owned by the government; some doctors are government employees, but there are also private doctors who collect their fees from the government. These systems tend to have low costs per capita, because the government, as the sole payer, controls what doctors can do and what they can charge”
  3. The National Health Insurance Model: “The providers of health care are private, but the payer is a government-run insurance program that every citizens pays into. The national, or provincial, insurance plan collects monthly premiums and pays medical bills. Since there’s no need for marketing, no expensive underwriting offices to deny claims, and no profit, these universal insurance programs tend to be cheaper and much simpler administratively than American-style private insurance. As a single payer covering everybody, the national insurance plan tends to have considerable market power to negotiate for lower prices. NHI countries also control costs by limiting the medical services they will pay for or by making patients wait to be treated.”
  4. The Out-of-pocket model: “Most medical care is paid for by the patient, out of pocket, with no insurance or government plan to help”.

Which all these systems apply in the US? The answer, surprisingly, is: All of the above – but not done in an efficient way.

Chapter by chapter, the book highlights ways in which the various medical systems keep costs lower (e.g. through having simpler administration) and deliver generally higher quality than applies in the US.

But two examples are even more important than any mentioned so far. These are the examples of Switzerland and Taiwan. Both of these are countries where significant reforms in the healthcare system have recently taken place – putting the lie to any viewpoint that complicated healthcare systems are incapable of major improvement:

Neither of these countries looks much like the United States of America… Still, both countries have important parallels to the United States. Both are vigorous democracies marked by fierce competition between political parties that look a lot like our Republicans and Democrats. Both have finance and insurance industries that are rich and politically influential. Both are ferociously capitalist places, and both have jumped aboard the digital revolution to build advanced, high-tech economies. Most important, both Taiwan and Switzerland had fragmented and expensive health care, similar to the American system – until they launched their reform campaigns.

In both countries, payment for medical care was dominated by health insurance plans tied to employment; in both significant numbers of people were left with no coverage at all. Even with large numbers of people uninsured, both countries were pouring considerable amounts of money into health care. In both Taiwan and Switzerland, as in the United States…, a growing chorus of voices began demanding universal coverage, arguing that every sick person should have access to a doctor…

In both cases, the results of the reforms have been very positive. To take the case of Taiwan:

Almost overnight, some 11 million Taiwanese who had no medical insurance suddenly had access to doctors and hospitals, with the Bureau of National Health Insurance paying most of the bill. This created a flood of new demand for medical services. The market responded with a flood of new supply: Clinics, hospitals, dentists, optometrists, labs, hostels, and acupuncture centers sprang up everywhere…

The most striking result of Taiwan’s new system is a healthier population with a longer healthy life expectancy and much higher recovery rates from major diseases. This is particularly evident in rural areas, where it was difficult or impossible to see a doctor before the new system took place…

As a system started from scratch, with uniform rules and procedures for every doctor and patient and state-of-the-art paperless record-keeping, Taiwan’s new health insurance system is the most efficient in the world. The 1994 law seemed hopelessly optimistic when it set a limit of 3.5% for administrative costs; in fact, the system has done much better than that, with paperwork, etc. accounting for only 2% of costs most years (and sometimes less). That’s about… one-tenth as high as the administrative burden for America’s private health insurers. As a result, even with explosive growth in the consumption of medical services, national health spending in Taiwan remains at about 6% of gross domestic product (as opposed to about 17% of GDP in the United States). This has kept costs low for patients…

As for the healthcare reforms in the US, under President Obama, T.R. Reid points out that they miss various elements of the reforms undertaken in both Taiwan and Switzerland:

  • Even with the reform in place, there will still be around 23 million Americans without healthcare insurance in 2019
  • American health insurance companies will still be able to get away with various practices (for denying payments to patients) that are banned in every other rich democracy
  • Much of the argumentation in favour of the reform has emphasised economics (not a bad thing in itself), but the moral and ethical drivers which were at the forefront in the debates in Taiwan and Switzerland have had a much lower profile in the US.

The final passage in the main body of the book puts it like this:

The sad truth is that, even with this ambitious reform, the United States will still have the most complicated, the most expensive, and the most inequitable healthcare system of any developed nation. The new law won’t get to the destination all other industrialized democracies have reached: universal healthcare coverage at reasonable cost. To achieve that goal, the United States will still have to take some lessons from the other national healthcare systems described in this book.

I’ll touch on four points in my own conclusion:

1. The moral argument for healthcare reform

The time I’ve spent recently reading Jonathan Haidt’s “The Righteous Mind” and watching him speak at a couple of events in London, has made me more sensitive to the fact that different people have different moral “tastes”, and can assign different priorities to six major dimensions of moral sensibility:

  • care vs. harm
  • fairness vs. cheating
  • liberty vs. oppression
  • loyalty vs. betrayal
  • authority vs.subversion
  • sanctity vs. degradation.

Failure to appreciate this fact leads of lots of bewilderment, as summarised in William Saletan’s New York Times review “Why won’t they listen?” of Haidt’s book. As T.R. Reid highlights, the current US healthcare system may well fail important moral tests on grounds of care vs. harm, and by being “unfair”. However, the arguments of people like Rick Santorum against the reform act build on different moral dimensions – e.g. liberty vs. oppression. These arguments find it particularly objectionable that, under these reforms, many people will be obliged (“oppressed”) into purchasing healthcare insurance. That’s seen as a fundamental denial of liberty.

Another insight from Haidt is that, in these circumstances of conflicting moral intuitions, reasoning often fails. One of his key summary points is as follows:

Moral intuitions come first, strategic reasoning comes second, to justify the intuitions we have already reached.

That’s not to say further discussion is pointless. As William Saletan puts it:

Haidt believes in the power of reason, but the reasoning has to be interactive. It has to be other people’s reason engaging yours. We’re lousy at challenging our own beliefs, but we’re good at challenging each other’s. Haidt compares us to neurons in a giant brain, capable of “producing good reasoning as an emergent property of the social system.”

Our task, then, is to organize society so that reason and intuition interact in healthy ways. Haidt’s research suggests several broad guidelines. First, we need to help citizens develop sympathetic relationships so that they seek to understand one another instead of using reason to parry opposing views. Second, we need to create time for contemplation. Research shows that two minutes of reflection on a good argument can change a person’s mind. Third, we need to break up our ideological segregation. From 1976 to 2008, the proportion of Americans living in highly partisan counties increased from 27% to 48%. The Internet exacerbates this problem by helping each user find evidence that supports his views…

2. A surprisingly effective example of lower-cost healthcare

So, what happened to T.R. Reid’s shoulder? Out of the all the recommendations from different doctors around the world, which was the best?

Doctors in several countries – including the US – recommended expensive, invasive, reconstructive surgery – even though all these doctors noted that there was no guarantee the surgery would be successful.

But the advice T.R. Reid ultimately found most useful involved a very different kind of technology, with roots going far back into time. That treatment was in India, and was based on Ayurdveda – which, like yoga, is derived from ancient Hindu scripture. It included

  • Eating only bland food (lentils and rice, primarily) during the course of the treatment, on the theory that the body should be under minimal strain during treatment
  • Daily massages involving hot oils and powerful hand movements (“to smooth the bodily routes that the prana needs to follow”)
  • Six times each day, imbibing “a vile assortment of herbal medicines, most of which tasted like spoiled greens or aging mud”
  • Attending a temple within the hospital grounds, “to perform poojah, or reverence, tot he Hindu god of healing”
  • Undertaking various yogic exercises
  • Accepting advice to “relax, and to forget whatever stresses and worries”
  • Reading one of the key Hindu scriptures, the Bhagavad Gita.

After several weeks of this treatment, the results were unmistakable. The shoulder had a much greater range of movement than before, and the pains were much reduced:

To this day, I don’t know why it happened. Was it the massage, the medication, the meditation…? In any case, the timing was definitely propitious. Ayurveda worked for me. I didn’t have a miracle cure; my shoulder was not completely healed. But my pain decreased, my range of motion increased, and I was definitely better – and all without the trouble or cost of a total shoulder arthoplasty…

Note that the book also describes some alternative medical treatments that were not successful – including other herbal medicines in Nepal, and acupuncture in Taiwan. And as mentioned, the Ayurveda did not provide “complete” healing. What’s more, Ayurvedic clinics increasingly incorporate x-ray machines, stethoscopes, and other western tools. But this section of the book was an intriguing reminder to me that I’d love to dig more deeply into material such as William Broad’s “The science of yoga: the risks and the rewards“.

3. Every healthcare system is under increasing financial strain

Despite the many successes of healthcare systems covered in the book, T.R. Reid was clear that all these systems are under increasing financial stress. He quotes the (somewhat tongue-in-cheek) “Universal Laws of Healthcare Systems” as articulated by economist Tsung-Mei Cheng:

  1. No matter how good the health care in a particular country, people will complain about it.
  2. No matter how much money is spent on health care, the doctors and hospitals will argue it is not enough.
  3. The last reform always failed.

As the author states,

All national health systems, even those that do their job well, are fighting a desperate battle these days against rising costs.

We live in a technological age, and technology – in the form of new miracle drugs, new medical devices (e.g. man-made shoulders) and new procedures – plays a huge role in modern medicine. This is unquestionably a good thing… but it is also an expensive thing.

But good technology, wisely applied, can reduce healthcare costs, rather than simply make them more expensive. For example, as T.R. Reid points out, suitable early tests can do wonders in preventive medicine. One place I’ve covered this topic before is in “Smartphone technology, super-convergence, and the great inflection of medicine“.

4. The good news in American medicine

Lest it be thought that T.R. Reid, the author of “The healing of America”, is unduly negative about America, or unpatriotic, let me draw attention to a 53 minute PBS documentary he has recently released: “The good news in American medicine“.

Whereas “The healing of America” gathers inspiring examples of best practice from around the globe, “The good news in American medicine” gathers inspiring examples of best practice from around the US – and draws out some important economic and moral principles along the way. (Quote: “A whole lot of this is about doing the right thing“.) Just as I recommend the book, I also recommend the video.

27 July 2011

Eclectic guidance for big life choices

Filed under: books, challenge, Economics, evolution, leadership, market failure, psychology, risks, strategy — David Wood @ 10:34 pm

“If you’re too busy to write your normal blog posts, at least tell us what books you’ve liked reading recently.”

That’s a request I’ve heard in several forms over the last month or so, as I’ve been travelling widely on work-related assignments.  On these travels, I’ve met several people who were kind enough to mention that they enjoyed reading my blog posts – especially those postings recommending books to read.

In response to this suggestion, let me highlight four excellent books that I’ve read recently, which have each struck me as having something profound to say on the Big Topic of how to make major life choices.

Adapt: Why Success Always Starts with Failure, by Tim Harford

Adapt: Why Success Always Starts with Failure draws out all sorts of surprising “aha!” connections between different areas of life, work, and society.  The analysis ranges across the wars in Iraq, the comparative strengths and weaknesses of Soviet-style centrally planned economies, the unorthodox way the development of the Spitfire fighter airplane was funded, the “Innovator’s Dilemma” whereby one-time successful companies are often blindsided by emerging new technologies, different approaches to measuring the effectiveness of charitable aid donations, the risk of inadvertently encouraging perverse behaviours when setting grand over-riding incentives, the over-bearing complexity of modern technology, the causes of the great financial crash of 2008-2009, reasons why safety systems break down, approaches to tackling climate change, and the judicious use of prizes to encourage successful breakthrough innovation.  Yes, this is a real intellectual roller-coaster, with some unexpected twists along the way – revelations that had me mouthing “wow, wow” under my breath.

And as well as heroes, there are villains.  (Donald Rumsfeld comes out particularly badly in these pages – even though he’s clearly in some ways a very bright person.  That’s an awful warning to the others among us who rejoice in above-average IQs.)

The author, Tim Harford, is an economist, but this book is grounded in observations about Darwinian evolution.  Three pieces of advice pervade the analysis – advice that Harford dubs “Palchinsky Principles”, in honour of Peter Palchinsky, a Russian mining engineer who was incarcerated and executed by Stalin’s government in 1929 after many years of dissent against the human cost of the Soviet top-down command and control approach to industrialisation.  These principles are designed to encourage stronger innovation, better leadership, and more effective policies, in the face of complexity and unknowns.  The principles can be summarised as follows:

  1. Variation – seek out new ideas and try new ideas
  2. Survivability – when trying something new, do it on a scale where failure is survivable
  3. Selection – seek out feedback and learn from mistakes as you go along, avoiding an instinctive reaction of denial.

Harford illustrates these principles again and again, in the context of the weighty topics already listed, including major personal life choices as well as choices for national economies and international relations.  The illustrations are full of eye-openers.  The book’s subtitle is a succinct summary: “success always stars with failure”.  The notion that it’s always possible to “get it right the first time” is a profound obstacle to surviving the major crises that lie ahead of us.  We all need a greater degree of openness to smart experimentation and unexpected feedback.

The Moral Landscape: How Science Can Determine Human Values, by Sam Harris

That thought provides a strong link to the second book I wish to mention: The Moral Landscape: How Science Can Determine Human Values.  It’s written by Sam Harris, who I first came to respect when I devoured his barnstorming The End of Faith: Religion, Terror, and the Future of Reason a few years ago.

In some ways, the newer book is even more audacious.  It considers how we might go about finding answers to big questions such as “how should I live?” and “what makes some ways of life more moral than others?”  As some specific examples, how should we respond to:

  • The Taliban’s insistence that the education of girls is an abomination?
  • The stance by Jehovah’s Witnesses against blood transfusion?
  • The prohibition by the Catholic Church of the use of condoms?
  • The legalisation of same-sex relationships?
  • The use of embryonic stem cells in the search for cures of diseases such as Alzheimer’s and Parkinson’s?
  • A would-be Islamist suicide bomber who is convinced that his intended actions will propel him into a paradise of abundant mental well-being?

One response is that such questions are the province of religion.  The correct answers are revealed via prophets and/or holy books.  The answers are already clear, to those with the eye of faith.  It is a divine being that tells us, directly or indirectly, the difference between good and evil.  There’s no need for experimental investigations here.

A second response is that the main field to study these questions is that of philosophy.  It is by reason, that we can determine the difference between good and evil.

But Sam Harris, instead, primarily advocates the use of the scientific method.  Science enters the equation because it is increasingly able to identify:

  • Neural correlates (or other physical or social underpinnings) of sentient well-being
  • Cause-and-effect mechanisms whereby particular actions typically bring about particular changes in these neural correlates.

With the help of steadily improving scientific understanding, we can compare different actions based on their likely effects on sentient well-being.  Actions which are likely to magnify sentient well-being are good, and those which are likely to diminish it are evil.  It’s no defense of an action that it makes sense within an archaic, pre-scientific view of the world – a view in which misfortunes are often caused by witches’ spells, angry demons, or spiteful disembodied minds.

Here, “science” means more than the findings of any one branch of science, whether that is physics, biology, psychology, or sociology.  Instead, it is the general disciplined outlook on life that seeks to determine objective facts and connections, and which is open to making hypotheses, gathering data in support of these hypotheses, and refining hypotheses in the light of experimental findings.  As science finds out more about the causes of human well-being in a wide variety of circumstances, we can speak with greater confidence about matters which, formerly, caused people to defer to either religion or philosophy.

Unsurprisingly, the book has stirred up a raucous hornet’s nest of criticism.  Harris addresses most of these criticisms inside the book itself (which suggests that many reviewers were failing to pay attention) and picks up the discussion again on his blog. He summarises his view as follows:

Morality and values depend on the existence of conscious minds—and specifically on the fact that such minds can experience various forms of well-being and suffering in this universe. Conscious minds and their states are natural phenomena… fully constrained by the laws of Nature (whatever these turn out to be in the end). Therefore, there must be right and wrong answers to questions of morality and values that potentially fall within the purview of science. On this view, some people and cultures will be right (to a greater or lesser degree), and some will be wrong, with respect to what they deem important in life.

As Harris makes clear, this is far from being an abstract, other-worldly discussion.  Cultures are clashing all the time, with lots of dramatic consequences for human well-being.  Seeing these clashes, are we to be moral relativists (saying “different cultures are best for different peoples, and there’s no way to objectively compare them”) or are we to be moral realists (saying “some cultures promote significantly more human flourishing than others, and are to be objectively preferred as a result”)?  And if we are to be moral realists, do we resolve our moral arguments by deference to religious tradition, or by open-minded investigation of real-world connections (investigations such as those proposed, indeed,  by Tim Harford in “Adapt”)?  In the light of these questions, here are some arguments that deserve thought:

  • There’s a useful comparison between the science of human values (the project espoused by Harris), and a science of diets (what we should eat, in order to enjoy good health).  In both cases, we’re currently far from having all the facts.  And in both cases, there are frequently several right answers.  But not all diets are equally good.  Similarly, not all cultures are equally good.  And what makes one diet better than another will be determined by facts about the physical world – such as the likely effects (direct and indirect) of different kinds of fats and proteins and sugars and vitamins on our bodies and minds.  While people still legitimately disagree about diets, that’s not a reason to say that science can never answer such questions.  Likewise, present-day disagreements about specific causes of happiness, mental flourishing, and general sentient well-being, do not mean these causes fail to exist, or that we can never know them.
  • Likewise with the science of economics.  We’re still far from having a complete understanding of how different monetary and financial policies impact the long-term health of the economy.  But that doesn’t mean we should throw up our hands and stop searching for insight about likely cause and effect.  The discipline of economics, imperfect though it is, survives in an as-yet-incomplete state.  The same goes for political science too.  And, likewise, for the science of the moral landscape.
  • Attempts to reserve some special area of “moral insight” for religion are indefensible.  As Harris says, “How is it that most Jews, Christians, and Muslims are opposed to slavery? You don’t get this moral insight from scripture, because the God of Abraham expects us to keep slaves. Consequently, even religious fundamentalists draw many of their moral positions from a wider conversation about human values that is not, in principle, religious.”  (I especially recommend Harris’s excoriating demolition of surprisingly spurious arguments given by Francis Collins in his surprisingly widely respected book “The Language of God: A Scientist Presents Evidence for Belief“.)

Mindsight: The New Science of Personal Transformation, by Daniel Siegel

The next book on my list serves as a vivid practical illustration of the kind of scientifically-informed insight that Harris talks about – new insight about connections between the brain and mental well-being.  Mindsight: The New Science of Personal Transformation contains numerous case histories of people who:

  • Started off lacking one or more elements of mental well-being
  • Became a patient of the author, Dr Daniel Siegel – a Harvard-trained physician
  • Followed one or other program of mindfulness – awareness and monitoring of the patterns of energy and information flowing in the brain
  • Became more integrated and fulfilled as a result.

To quote from the book’s website:

“Mindsight” [is] the potent skill that is the basis for both emotional and social intelligence. Mindsight allows you to make positive changes in your brain–and in your life.

  • Is there a memory that torments you, or an irrational fear you can’t shake?
  • Do you sometimes become unreasonably angry or upset and find it hard to calm down?
  • Do you ever wonder why you can’t stop behaving the way you do, no matter how hard you try?
  • Are you and your child (or parent, partner, or boss) locked in a seemingly inevitable pattern of conflict?

What if you could escape traps like these and live a fuller, richer, happier life?  This isn’t mere speculation but the result of twenty-five years of careful hands-on clinical work by Daniel J. Siegel, M.D… one of the revolutionary global innovators in the integration of brain science into the practice of psychotherapy. Using case histories from his practice, he shows how, by following the proper steps, nearly everyone can learn how to focus their attention on the internal world of the mind in a way that will literally change the wiring and architecture of their brain.

Siegel is, of course, aware that drugs can often play a role in addressing mental issues.  However, his preference in many cases is for patients to learn and practice various skills in mental introspection.  His belief – which he backs up by reference to contemporary scientific findings – is that practices such as meditation can change the physical structure of brain in significant ways.  (And there are times when it can relieve recurring back pain too, as in one case history covered.)

Siegel defines the mind as “an embodied and relational process that regulates the flow of energy and information”.  He goes on to say:

So how would you regulate the mind?  By developing the ability to see mental activity with more clarity and then modify it with more effectiveness… there’s something about being able to see and influence your internal world that creates more health.

Out of the many books on psychotherapy that I’ve read over the years, this is one of the very best.  The case studies are described in sufficient depth to make them absorbing.  They’re varied, as well as unpredictable.  The neuroscience in the book is no doubt simplified at times, but gels well with what I’ve picked up elsewhere.  And the repeated emphasis on “integration” provides a powerful unifying theme:

[Integration is] a process by which separate elements are linked together into a working whole…  For example, integration is at the heart of how we connect to one another in healthy ways, honoring one another’s differences while keeping our lines of communication wide open. Linking separate entities to one another—integration—is also important for releasing the creativity that emerges when the left and right sides of the brain are functioning together.

Integration enables us to be flexible and free; the lack of such connections promotes a life that is either rigid or chaotic, stuck and dull on the one hand or explosive and unpredictable on the other. With the connecting freedom of integration comes a sense of vitality and the ease of well-being. Without integration we can become imprisoned in behavioral ruts—anxiety and depression, greed, obsession, and addiction.

By acquiring mindsight skills, we can alter the way the mind functions and move our lives toward integration, away from these extremes of chaos or rigidity. With mindsight we are able to focus our mind in ways that literally integrate the brain and move it toward resilience and health.

The sections in the book on meditation are particularly interesting.  As Siegel has become aware, the techniques he recommends have considerable alignment with venerable practices from various eastern traditions – such as the practice of “mindfulness“.  However, the attraction of these techniques isn’t that they are venerable.  It is that there’s a credible scientific explanation of why they work – an explanation that is bolstered by contemporary clinical experience.

Good Strategy Bad Strategy: The Difference and Why It Matters, by Richard Rumelt

From a great book on psychotherapy, let me finish by turning to a great book on strategy – perhaps the best book on strategy that I’ve ever read: Good Strategy Bad Strategy: The Difference and Why It Matters.  The author, Richard Rumelt, Professor of Business and Society at UCLA Anderson School of Management, is a veteran analyst of strategy, who gained his first degree as long ago as 1963 (in Electrical Engineering from the University of California, Berkeley).  He speaks with an accumulated lifetime of wisdom, having observed countless incidents of both “bad strategy” and “good strategy” over five decades of active participation in industry.

“Strategy” is the word which companies often use, when justifying their longer term actions.  They do various things, they say, in pursuit of their strategic objectives.  Here, “strategy” goes beyond “business case”.  Strategy is a reason for choosing between different possible business cases – and can provide reasons for undertaking projects even in the absence of a strong business case.  By the way, it’s not just companies that talk about strategy.  Countries can have them too, as well as departments within governments.  And the same applies to individuals: someone’s personal strategy can be an explicit reason for them choosing between different possible alternative courses of action.

It’s therefore a far from ideal situation that much of what people think of as a strategy is instead, in Rumelt’s words, “fluff” or “wishful thinking”:

It’s easy to tell a bad [strategy] from a good one. A bad one is full of fluff: fancy language covering up the lack of content. Enron’s so-called strategy was littered with meaningless buzzwords explaining its aim to evolve to a state of “sophisticated value extraction”. But in reality its chief strategies could be summed up as having an electronic trading platform, being an over-the-counter broker and acting as an information provider. These are not strategies, they are just names, like butcher, baker and candlestick maker…

Bad strategy is long on goals and short on policy or action.  It assumes that goals are all you need.  It puts forward strategic objectives that are incoherent and, sometimes, totally impractical.  It uses high-sounding words and phrases to hide these failings…

The core of [good] strategy work is always the same: discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors…

Bad strategy tends to skip over pesky details such as problems.  It ignores the power of choice and focus, trying instead of accommodate a multitude of conflicting demands and interests.  Like a quarterback whose only advice to teammates is “Let’s win”, bad strategy covers up its failure to guide by embracing the language of broad goals, ambition, vision, and values.  Each of these elements is, of course, an important part of human life.  But, by themselves, they are not substitutes for the hard work of strategy…

If you fail to identify and analyse the obstacles, you don’t have a strategy.  Instead, you have either a stretch goal, a budget, or a list of things you wish would happen.

The mention of a specific company above – Enron – is an example of a striking pattern Rumelt follows throughout his book: he names guilty parties.  Other “guilty parties” identified in the midst of fascinating narratives include CEOs of Lehman Brothers, International Harvester, Ford Motor Company, DEC, Telecom Italia, and metal box manufacturer Crown Cork & Seal.

Individuals that are highlighted, in contrast, as examples of good strategy include titans from military history – General Norman Schwarzkopf, Admiral Nelson, Hannibal, and Hebrew shepherd boy David (in his confrontation with Goliath) – as well as industry figures such as Sam Walton, Steve Jobs, Intel’s Andy Grove, IBM’s Lou Gerstner, and a range of senior managers at Cisco.  The tales recounted are in many ways already well known, but in each case Rumelt draws out surprising insight.  (Rumelt’s extended account of Hannibal’s victory over the Roman army at Cannae in 216 BC indicates many unexpected implications.)

Why do so many companies, government departments, and individuals have “bad strategy”?  Rumelt identifies four underlying reasons:

  • A psychological unwillingness or inability to make choices (this can be linked with an organisation being too decentralised)
  • A growing tide of “template style” strategic planning, which gives too much attention to vision, mission, and values, rather than to hard analysis of a company’s situation
  • An over-emphasis on charismatic qualities in leaders
  • The superficially appealing “positive thinking” movement.

Rumelt’s treatment of “positive thinking” is particularly illuminating – especially for a reader like me who harbours many sympathies for the idea that it’s important to maintain a positive, upbeat attitude.  Rumelt traces the evolution of this idea over more than a century:

This fascination with positive thinking, and its deep connection to inspirational and spiritual thought, was invented around 150 years ago in New England as a mutation of Protestant Christian individualism…

The amazing thing about [the ideology of positive thinking] is that it is always presented as if it were new!  And no matter how many times the same ideas are repeated, they are received by many listeners with fresh nods of affirmation.  These ritual recitations obviously tap into a deep human capacity to believe that intensely focused desire is magically rewarded…

I do not know whether meditation and other inward journeys perfect the human soul.  But I do know that believing … that by thinking only of success you can become a success, is a form of psychosis and cannot be recommended as an approach to management or strategy.  All [good] analysis starts with the consideration of what might happen, including unwelcome events.  I would not care to fly in an aircraft designed by people who focused only on an image of a flying machine and never considered modes of failure…

The doctrine that one can impose one’s visions and desires on the world by thought alone retains a powerful appeal to many people.  Its acceptance displaces critical thinking and good strategy.

As well as pointing out flaws in bad strategy, Rumelt provides wide-ranging clear advice on what good strategy contains:

A good strategy works by harnessing power and applying it where it will have the greatest effect.  In the short term, this may mean attacking a problem or rival with adroit combinations of policy, actions, and resources.  In the longer term, it may involve cleverly using policies or resource commitments to develop capabilities that will be of value in future contests.  In either case, a “good strategy” is an approach that magnifies the effectiveness of actions by finding and using sources of power…

Strategic leverage arises from a mixture of anticipation, insight into what is most pivotal or critical in a situation, and making a concentrated application of effort…

A much more effective way to compete is the discovery of hidden power in the situation.

Later chapters amplify these ideas by providing many illuminating suggestions for how to build an effective strategy.  Topics covered include proximate objectives, chain-link systems, design, focus (“pivot points”), competitive advantage, anticipation and exploitation of industry trends (“dynamics”), and inertia and entropy.  Here are just a few illustrative snippets from these later chapters:

In building sustained strategic advantage, talented leaders seek to create constellations of activities that are chain-linked.  This adds extra effectiveness to the strategy and makes competitive imitation difficult…

Many effective strategies are more designs than decisions – are more constructed than chosen..

When faced with a corporate success story, many people ask, “How much of the success was skill and how much was luck?”  The saga of Cisco Systems vividly illustrates that the mix of forces is richer than just skill and luck.  Absent the powerful waves of change sweeping through computing and telecommunications, Cisco would have remained a small niche player.  Cisco’s managers and technologists were very skillful at identifying and exploiting these waves of change…

An organisation’s greatest challenge may not be external threats or opportunities, but instead the effects of entropy and inertia.  In such a situation, organisational renewal becomes a priority.  Transforming a complex organisation is an intensely strategic challenge.  Leaders must diagnose the causes and effects of entropy and inertia, create a sensible guiding policy for effecting change, and design a set of coherent actions designed to alter routines, culture, and the structure of power and influence.

You can read more on the book’s website.

The book is addressed to people working within organisations, with responsibility for strategy in these organisations.  However, most of the advice is highly valid for individuals too.  Are the big personal goals we set ourselves merely “wishful thinking”, or are they grounded in a real analysis of our own personal situation?  Do they properly take account of our personal trends, inertia, entropy, and sources of competitive power?

7 May 2011

Workers beware: the robots are coming

Filed under: books, challenge, disruption, Economics, futurist, robots — David Wood @ 9:07 pm

What’s your reaction to the suggestion that, at some stage in the next 10-30 years, you will lose your job to a robot?

Here, by the word “robot”, I’m using shorthand for “automation” – a mixture of improvements in hardware and software. The suggestion is that automation will continue to improve until it reaches the stage when it is cheaper for your employer to use computers and/or robots to do your job, than it is to continue employing you. This change has happened in the past with all manner of manual and/or repetitive work. Could it happen to you?

People typically have one of three reactions to this suggestion:

  1. “My job is too complex, too difficult, too human-intense, etc, for a robot to be able to do it in the foreseeable future. I don’t need to worry.”
  2. “My present job may indeed be outsourced to robots, but over the same time period, new kinds of job will be created, and I’ll be able to do one of these instead. I don’t need to worry.”
  3. “When the time comes that robots can do all the kinds of work that I can do, better than me, we’ll be living in an economy of plenty. I won’t actually need to work – I’ll be happy to enjoy lots more leisure time. I don’t need to worry.”

Don’t need to worry? Think again. That’s effectively the message in Martin Ford’s 2009 book “The lights in the tunnel“. (If you haven’t heard of that book, perhaps it’s because the title is a touch obscure. After all, who wants to read about “lights in a tunnel”?)

The subtitle gives a better flavour of the content: “Automation, accelerating technology, and the economy of the future“. And right at the top of the front cover, there’s yet another subtitle: “A journey to the economic landscape of the coming decades“. But neither of these subtitles conveys the challenge which the book actually addresses. This is a book that points out real problems with increasing automation:

  • Automation will cause increasing numbers of people to lose their current jobs
  • Accelerating automation will mean that robots can quickly become able to do more jobs – their ability to improve and learn will far outpace that of human workers – so the proportion of people who are unemployed will grow and grow
  • Without proper employment, a large proportion of consumers will be deprived of income, and will therefore lack the spending power which is necessary for the continuing vibrancy of the economy
  • Even as technology improves, the economy will stagnate, with disastrous consequences
  • This is likely to happen long before technologies such as nanotech have reached their full potential – so that any ideas of us existing at that time in an economy of plenty are flawed.

Although the author could have chosen a better title for his book, the contents are well argued, and easy to read. They deserve a much wider hearing.  They underscore the important theme that the process of ongoing technological improvement is far from being an inevitable positive.

There are essentially two core threads to the book:

  • A statement of the problem – this effectively highlights issues with each of the reactions 1-3 listed earlier;
  • Some tentative ideas for a possible solution.

The book looks backwards in history, as well as forwards to the future. For example, it includes interesting short commentaries on both Marx and Keynes. One of the most significant backward glances considers the case of the Luddites – the early 19th century manufacturing workers in the UK who feared that their livelihoods would be displaced by factory automation. Doesn’t history show us that such fears are groundless? Didn’t the Luddites (and their descendants) in due course find new kinds of employment? Didn’t automation create new kinds of work, at the same time as it destroyed some existing kinds of work? And won’t that continue to happen?

Well, it’s a matter of pace.  One of most striking pictures in the book is a rough sketch of the variation over time of the comparative ability of computers and humans to perform routine jobs:

As Martin Ford explains:

I’ve chosen an arbitrary point on the graph to indicate the year 1812. After that year, we can reasonably assume that human capability continued to rise quite steeply until we reach modern times. The steep part of the graph reflects dramatic improvements to our overall living conditions in the world’s more advanced countries:

  • Vastly improved nutrition, public health, and environmental regulations have allowed us to remain relatively free from disease and reach our full biological potential
  • Investment in literacy and in primary and secondary education, as well as access to college and advanced education for some workers, has greatly increased overall capability
  • A generally richer and more varied existence, including easy access to books, media, new technologies and the ability to travel long distances, has probably had a positive impact on our ability to comprehend and deal with complex issues.

A free download of the entire book is available from the author’s website.  I’ll leave it to you to evaluate the author’s arguments for why the two curves in this sketch have the shape that they do.  To my mind, these arguments have a lot of merit.

The point where these two curves cross – potentially a few decades into the future – will represent a new kind of transition point for the economy – perhaps the mother of all economic disruptions.  Yes, there will still be some new jobs created.  Indeed, in a blogpost last year, “Accelerating automation and the future of work“, I listed 20 new occupations that people could be doing in the next 20 years:

  1. Body part maker
  2. Nano-medic
  3. Pharmer of genetically engineered crops and livestock
  4. Old age wellness manager/consultant
  5. Memory augmentation surgeon
  6. ‘New science’ ethicist
  7. Space pilots, tour guides and architects
  8. Vertical farmers
  9. Climate change reversal specialist
  10. Quarantine enforcer
  11. Weather modification police
  12. Virtual lawyer
  13. Avatar manager / devotees / virtual teachers
  14. Alternative vehicle developers
  15. Narrowcasters
  16. Waste data handler
  17. Virtual clutter organiser
  18. Time broker / Time bank trader
  19. Social ‘networking’ worker
  20. Personal branders

However, the lifetimes of these jobs (before they too can be handled by improved robots) will shrink and shrink.  For a less esoteric example, consider the likely fate of a relatively new profession, radiology.  As Martin Ford explains:

A radiologist is a medical doctor who specializes in interpreting images generated by various medical scanning technologies. Before the advent of modern computer technology, radiologists focused exclusively on X-rays. This has now been expanded to include all types of medical imaging, including CT scans, PET scans, mammograms, etc.

To become a radiologist you need to attend college for four years, and then medical school for another four. That is followed by another five years of internship and residency, and often even more specialized training after that. Radiology is one of the most popular specialties for newly minted doctors because it offers relatively high pay and regular work hours; radiologists generally don’t need to work weekends or handle emergencies.

In spite of the radiologist’s training requirement of at least thirteen additional years beyond high school, it is conceptually quite easy to envision this job being automated. The primary focus of the job is to analyze and evaluate visual images. Furthermore, the parameters of each image are highly defined since they are often coming directly from a computerized scanning device. Visual pattern recognition software is a rapidly developing field that has already produced significant results…

Radiology is already subject to significant offshoring to India and other places. It is a simple matter to transmit digital scans to an overseas location for analysis. Indian doctors earn as little as 10 percent of what American radiologists are paid… Automation will often come rapidly on the heels of offshoring, especially if the job focuses purely on technical analysis with little need for human interaction. Currently, U.S. demand for radiologists continues to expand because of the increase in use of diagnostic scans such as mammograms. However, this seems likely to slow as automation and offshoring advance and become bigger players in the future. The graduating medical students who are now rushing into radiology for its high pay and relative freedom from the annoyances of dealing with actual patients may eventually come to question the wisdom of their decision

Radiologists are far from being the only “high-skill” occupation that is under risk from this trend.  Jobs which involve a high degree of “expert system” knowledge will come under threat from increasingly expert AI systems.  Jobs which involve listening to human speech will come under threat from increasingly accurate voice recognition systems.  And so on.

This leaves two questions:

  1. Can we look forward, as some singularitarians and radical futurists assert, to incorporating increasing technological smarts within our own human nature, allowing us in a sense to merge with the robots of the future?  In that case, a scenario of “the robots will take all our jobs” might change to “substantially enhanced humans will undertake new types of work”
  2. Alternatively, if robots do much more of the work needed within society, how will the transition be handled, to a society in which humans have much more leisure time?

I’ll return to the first of these questions in a subsequent blogpost.  Martin Ford’s book has a lot to say about the second of these questions.  And he recommends a series of ideas for consideration:

  • Without large numbers of well-paid consumers able to purchase goods, the global economy risks going into decline, at the same time as technology has radically improved
  • With fewer people working, there will be much less income tax available to governments.  Taxation will need to switch towards corporation tax and consumption taxes
  • With more people receiving handouts from the state, there’s a risk of loss of many of aspects of economic structure which previously have been thought essential
  • We need to give more thought, now, to ideas for differential state subsidy of different kinds of non-work activity – to incentivise certain kinds of activity.  That way, we’ll be ready for the increasing disturbances placed on our economy by the rise of the robots.

For further coverage of these and related ideas, see Martin Ford’s blog on the subject, http://econfuture.wordpress.com/.

Older Posts »

Create a free website or blog at WordPress.com.