Financial Times columnist and author Tim Harford talks with EconTalk host Russ Roberts about Harford’s latest book, Fifty Inventions That Shaped the Modern Economy. Highlights include how elevators are an important form of mass transit, why washing machines didn’t save quite as much time as you’d think, and the glorious illuminating aspects of light throughout history.
Tagged with “economics” (55)
We may think of our independent press today as being the result of political awakening and noble efforts by those seeking truth, but that’s not the whole story. University of Chicago economist, Matthew Gentzkow, says we’ve progressed not just because of good intentions, but because of basic economics. Gentzkow explains how advances in printing helped newspapers expand their audience beyond just one political party.
We’re building an artificial intelligence-powered dystopia, one click at a time, says techno-sociologist Zeynep Tufekci. In an eye-opening talk, she details how the same algorithms companies like Facebook, Google and Amazon use to get you to click on ads are also used to organize your access to political and social information. And the machines aren’t even the real threat. What we need to understand is how the powerful might use AI to control us — and what we can do in response.
With his book Thinking, Fast and Slow, Daniel Kahneman emerged as one of the most intriguing voices on the complexity of human thought and behavior. He is a psychologist who won the Nobel Prize in economics for helping to create the field of behavioral economics. He is a self-described “constant worrier.” And it’s fun, helpful, and more than a little unnerving to apply his insights into why we think and act the way we do in this moment of social and political tumult.
In the latest ‘Geeks’ Guide to the Galaxy’ podcast, Simone Caroti discusses his critical survey of the Culture series by sci-fi author Iain Banks.
Our increasingly smart machines aren’t just changing the workforce; they’re changing us. Already, algorithms are directing human activity in all sorts of ways, from choosing what news people see to highlighting new gigs for workers in the gig economy. What will human life look like as machine learning overtakes more aspects of our society?
Alexis Madrigal, who covers technology for The Atlantic, shares what he’s learned from his reporting on the past, present, and future of automation with our Radio Atlantic co-hosts, Jeffrey Goldberg (editor in chief), Alex Wagner (contributing editor and CBS anchor), and Matt Thompson (executive editor).
Why cities live forever
West focussed on cities in his discussion of the newly discovered exponential scaling laws that govern everything alive.
“We live,” he said, “in an exponentially expanding socio-economic universe.”
Global urbanization has reached the point that there are a million new people arriving in cities every week, and that rate is expected to continue to midcentury.
What is the attraction?
One reason for constant urban growth is that the bigger the city, the more efficient it is, because of economies of scale.
With each doubling of a city’s size, the numbers of gas stations and power lines and water lines, etc. increase at a rate a little less than double.
In other words, with every size increase there is a 15% improvement in energy efficiency.
“That‘s why New York is the greenest city in America,” West said.
The same dynamics of networks explain how what is called “power-law scaling“ works in biology.
The bigger the animal, the slower and more efficient its metabolism is, at a rate lower than 1-to-1 (“sublinear” in West’s terminology).
This leads to some remarkable constants.
Shrews weigh 2 grams, and in their 14-month life their heart beats a billion times.
Blue whales weigh 200 million grams, and in their 100-year life, their heart beats the same billion times.
Ditto for all mammals (except humans, who have achieved a lifetime average of 2 billion heartbeats, presumably for cultural reasons.)
In physical terms, cities are like organisms, enjoying sublinear economies of scale with each increase in size.
But when you look at cities in terms of their social-economic networks, an astonishing finding emerges. Once again there is power-law scaling if you count patents, wages, tax receipts, crimes, restaurants, even the pace of walking, but instead of slowing down with increasing size, cities speed up with increasing size.
Their increase is greater that 1:1.
It is superlinear.
“Bigger cities are better,” said West.
Each time they increase in size, they are 15% more innovative socio-economically at the same time they are 15% more efficient in terms of energy and materials.
Furthermore, they apparently live forever.
They create most of civilization’s problems, but they are capable of solving problems even faster than they create them.
However, when you compare companies with cities, companies have similar metabolic efficiencies of scale as they grow, but their innovation rate, instead of increasing with size,
slows down as they get ever bigger. And they are mortal.
The average lifespan of a publicly traded companies is 10 years.
They can grow prodigiously, but their net income, sales, profits, and assets can’t quite keep up—they are sublinear.
Successful new companies start off like cities, full of innovation, but over time the nature of corporate growth leads them to focus ever more solely on exploiting their success, and eventually they taper off and die like animals.
The city feeds on their corpses and creates new companies.
How much might global economic output rise if anyone could work anywhere? Some economists have calculated it would double. By the turn of the 20th century only a handful of countries were still insisting on passports to enter or leave. Today, migrant controls are back in fashion. It can seem like a natural fact of life that the name of the country on our passport determines where you can travel and work – legally, at least.
But it’s a relatively recent historical development – and, from a certain angle, an odd one. Many countries take pride in banning employers from discriminating against characteristics we can’t change: whether we’re male or female, young or old, gay or straight, black or white.
It’s not entirely true that we can’t change our passport: if you’ve got $250,000, for example, you can buy one from St Kitts and Nevis. But mostly our passport depends on the identity of our parents and location of our birth. And nobody chooses those.
The Egyptians thought literacy was divine; a benefaction which came from the baboon-faced god Thoth. In fact the earliest known script – “cuneiform” – came from Uruk, a Mesopotamian settlement on the banks of the Euphrates in what is now Iraq. What did it say? As Tim Harford describes, cuneiform wasn’t being used for poetry, or to send messages to far-off lands. It was used to create the world’s first accounts. And the world’s first written contracts, too.
From Spacewar to Pokemon Go, video games – aside from becoming a large industry in their own right – have influenced the modern economy in some surprising ways. Here’s one. In 2016, four economists presented research into a puzzling fact about the US labour market. The economy was growing, unemployment rates were low, and yet a surprisingly large number of able-bodied young men were either working part-time or not working at all. More puzzling still, while most studies of unemployment find that it makes people thoroughly miserable, the happiness of these young men was rising. The researchers concluded that the explanation was simply that this cohort of young men were living at home, sponging off their parents and playing videogames. They were deciding, in the other words, not to join the modern economy in some low-paid job, because being a starship captain at home is far more appealing.
Page 1 of 6Older