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20161126 – Specialization and Trade

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MAIN IDEA:

The main idea of this book is to look at economy from the angle of specialization and division of labor that become the key feature of contemporary economy. In process author demonstrates impossibility of central planning and government controlled economy to produce effective and efficient results. Author also provides suggestions for solutions mainly in form of promoting better balancing between market and government controls in mixed economy.

DETAILS:

Introduction

Author defines it as re-introduction to economics with specialization being the main character in the story. He refers to Adam Smith and his famous example of specialization leading to dramatic increase in productivity, but does not stop there. He also stresses dynamic character of specialization bringing in Schumpeter’s “Creative destruction” to demonstrate that lots of events in economics could be explained by detailed analysis of specific changes in specialization patterns over time.

 

1.Filling in Frameworks

This is about meaning of economics as whether it is a science or not. Author’s infer that it is not a science strictly speaking, but rather interpretive framework for understanding economic events because any economic statement always starts with “all other things being equal”, which is in and by itself moves it out of possibility for falsification because all other things are always unequal. Obviously any theoretical construction, which is not subject to falsification, is not strictly scientific.

2.Machine as Metaphor

This is the critic of the idea of economics as machine, subject to engineering. The point here is that economics actually deals with human action, which makes mechanical approach invalid.

3.Instructions and Incentives

This is the critic of the idea of planning as controlling tool for economics even at the enterprise level. The reality is that the prices derived from supply and demand processes define economics and coordinate human actions within its framework. The planning, even if conducted with supercomputers, could not possibly handle complexities of the real live because of distributed character of relevant information, leading to grave mistakes and producing staff that nobody needs, while neglecting staff that people want.

4.Choices and Commands

This is a comparative analysis of market system and central planning, which historically failed in resolving information problem, incentives problem, and innovation problem. Here author provides a nice small 2×2 table of what one could get by using/not using price system and/or commands:

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Obviously we are mainly in “Mixed system” with huge variances in proportion of mix, but quite stable pattern of results: minimizing commands and maximizing pricing consistently leads to better economic outcomes.

5.Specialization and Sustainability

This is a very interesting discussion about market price being the only tool that could support sustainability of economics and any attempts to override it leads to failure.

6.Trade and Trust

This chapter is directed against strict libertarians who believe that market by itself is solution for everything. Author’s opinion is that government together with NGOs is absolutely necessary to force people to play by the rules.

  1. Finance and Fluctuations

This is about financial intermediation, the value it brings to economy, and its necessity for maintaining stable patterns of specialization and trade.

  1. Policy in Practice

This is critic of typical approach to “market failure” using housing crash as an example.

  1. Macroeconomics and Misgivings

This is restatement of idea that that economy is way too complicated to try Keynesian approach for controlling it. It also provides author’s suggestions on using analysis of specialization in trade to provide subtle corrective impulses, as needed, rather than use crude Keynesian and/or monetarist tools.

  1. Concluding Contemplation

The main conclusion is that we live at the time of extreme specialization that created correspondingly complex economy, which could not be effectively managed by using Keynesian equations because these equation way too simplified to match complexity levels of reality. Author’s proposed alternative is to use small intervention needed to promote trust in trade, overcome inherent instability of financial system, and establish better balance between constructive and destructive forces in economy needed to avoid or at least alleviate boom and bust cycles.

MY TAKE ON IT:

This book’s ideas are pretty much consistent with my thinking on economics in terms of its high level of complexity that makes it impossible to manage effectively by using simplified mathematical modeling, socialist central planning or even Keynesian government interventions. However I do not agree with ideas of even minimal government controlling interventions because it would always and inevitably going to be done by human bureaucrats in their own interests distorting economic reality and decreasing effectiveness of the system as whole. I believe that violence and coercion (government) should be used only to protect property, enforce legally admissible contracts, and collect information that some participants in the system would try to hide so everybody would make decision based on reality rather than illusions.

20161119 Life on the Edge (Quantum Biology)

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MAIN IDEA:

The main idea of this book is that live is not based exclusively at chemistry level, but that it rather based at lower level of elementary particles so laws of quantum mechanics had to be used if we to understand its nature and key difference between living and non living objects.

DETAILS:

  1. Introduction

This starts with an example of a robin. The bird is flying for thousands miles using highly developed orientation mechanism based on magnetic fields. The mystery is how exactly this mechanism works and it brings in an idea of insufficiency of chemical processes for explanation. The real explanation comes from quantum mechanics via process of fast triplet reaction that kind of connects electron level to chemical reactions level. This example is only one of many that demonstrate continuity of nature from one level as described by specific human modeling to another. Basically the point is that it is humans who have different models for different levels of understanding of nature so mechanics for big objects is analyzed separately from chemistry at molecular level, which in tern is analyzed separately from quantum mechanics at particles level, but live is a complex phenomenon that crosses multiple levels and therefore could be understood only via new modeling combining chemistry, biology and quantum mechanics.

  1. What is life?

While nobody really knows beyond typical answer that “we know it when we see it”, this chapter reviews some previous ideas like life force, which it rejects and tries to define it as a process qualitatively different from normal chaotic processes described by chemistry and molecular statistics. While at high level we have quite solid model of genetic replication and selection, we have a big whole below that because so far we cannot replicate process of creation of new cell from non-live materials, even if we can easily differentiate between living cell and dead cell. In short we can build new forms of live by manipulating genes in existing living materials, but we cannot recreate living material itself and this is the area where quantum biology is aiming.

  1. The engines of life

This is somewhat technical chapter about enzymes as engines of live, which are catalysts for all processes more or less explained by transition state theory (TST) and insufficiency of chemical explanation of live. The inference from this is the necessity to go to lower, quantum levels for explanation of a living cell processes by using quantum tunneling.

  1. The Quantum beat

This is highly simplified explanation of what actually is quantum mechanics in relation to particles / waves movement within living cells. Basically this is used to explain how captured photon’s energy is transferred into living biomass at microscopic level.

  1. Finding Nemo’s home

This is a bit different approach: using process of smelling, when minuscule amount of chemicals serves to transfer and decode information about environment, to demonstrate that understanding is not possible without involvement of quantum mechanics.

  1. The butterfly, the fruit fly and the quantum robin

This is return to author’s initial question of robin’s magnetic orientation with explanation based on quantum entanglement and spin.

  1. Quantum genes

This chapter reviews genetic transfer of information using just 4 keys: Adenine, Thymine, Cytosine, and Guanine, but then moves to reviewing quantum explanations for bond between them.

  1. Mind

It starts with the story of the Chauvet cave where some very ancient art was found representing one of the oldest samples of human consciousness. Author discusses kind of physiology of conversion of idea into human action and then moves on to neural networks and quantum computers where bit represented by qubit, which have more states and could therefore contain more information than a bit.

  1. How life began

This is an interesting approach to the process of the beginning of live. The point here is that there was probably a long, now completely disappeared, molecular scaffolds of primitive replicators that are a lot simpler than the most primitive living thing currently existing. Author believes that understanding of random creation of such super primitive replicators could come from quantum mechanics analysis.

  1. Quantum biology: life on the edge of a storm

The final chapter is about the place of quantum mechanics in general human modeling of environment and its explanatory and predictable power as it is related to live. Author provides somewhat unusual points on live vs. death as live being grounded at the quantum level and death meaning disconnection of living object from this level. It is nicely illustrated in these couple of pictures the first representing live and the second death:

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Another point here is that with future understanding of live at quantum level it will be possible to create live from the scratch, directly from non-live materials.

Epilogue: quantum life

The final point is that even if quantum mechanics level may not be as deeply linked with biology as presented in this book and many biological processes are fully explainable at higher, molecular level; the application of quantum mechanics to biology will still produce new and unexpected knowledge.

MY TAKE ON IT:

It seems to me that ideas presented in this book are mainly valid, just because division of nature into different levels analysis: mechanics, thermodynamics, and quantum mechanics is nothing more than need to handle complexity of nature at the level accessible for human understanding, which is quite limited by evolutionary achieved level of complexity comprehension. The next step would probably be development much more powerful Artificial intelligence that would be to able analyze complexity of nature as whole, synthesize complex models of high predictability power and then dumb it down to the level of human understanding.

 

20161112 Intelligence and how to get it

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MAIN IDEA:

The main idea of this book is that IQ of not genetically inherited, but rather is the product of combined influence of genes and environment, with environment including education having much bigger impact than genetic endowment. This idea discussed in polemics with Bell Curve, Twin Studies, and other supporters of preponderance of genetic IQ. Correspondingly author infers that increasing one’s IQ is quite possible and education is the way to do it.

DETAILS:

1.Varieties of Intelligence

This is discussion of IQ tests, what exactly they measure, and various types of intelligence. It provides a very nice graph describing dependency of two main types of intelligence on age with Fluid intelligence being raw, generally knowledge independent ability to solve intellectual problems and Crystallized intelligence being more knowledge/experience based ability:

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2.Heritability and Mutability

Here author defines two camps as one consisting of environmentalists who believe that IQ heritability provides 50% or lower impact on achievement level, and another view, which he believes is outdated, it is 75% or more. He provides a table of metadata demonstrating correlation between IQs of variously related individuals:

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Author makes a very important point that genes are not singularly defining factor in intelligence or any other human characteristics because they are expressed only via interactions with environment so complex that it is not even conceivable to break down result into specific components. The final point author makes is irrelevance of heritability to mutability.

  1. Getting Smarter

This chapter discusses improvement in general IQ over period of time (Flynn effect) and data demonstrating high dependency of IQ on schooling or lack thereof. Here is graph demonstrating this:

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  1. Improving the Schools

Since author believes in direct impact of schooling on IQ, he looks at factors that define quality of schooling: Money, class sizes, teachers’ quality, instructional technics, and such. He also provides recommendation how to use schools to produce smarter people.

  1. Social class and Cognitive Culture

This is detailed review of impact of class on cognitive abilities and IQ. It include a number of factors mainly unrelated to genetic endowment such as:

  • Nutrition and other biological factors
  • Cognitive culture of environment
  • Socialization for factory for lower classes and socialization of professions in middle and upper class
  1. IQ in Black and White

Similarly to class author believes that IQ variance by race between black and white mainly caused by environmental factors. It includes economic barriers, cultural positioning as low IQ group, and parenting practices that stint intellectual development by providing for example several times less words during childhood development by parents of working class than by parents in middle class. Probably the most important here are examples of black success at the North before civil war and mass migration from South that undercut it. Also very interesting is the story of Caribbean immigration that produce as good economic outcomes as any group of whites.

  1. Mind the Gap

This is a review of multiple external interventions aiming to improve cognitive abilities of lower class black population, its many failures like Head starts and few successes as KIPP academies.

  1. Advantage Asia?

This is overview of Asian success in all things educational with interesting point that actual IQ is not higher than for other groups, but it is well compensated by higher level of effort. There is also interesting part about difference between Asian and European cognitive processing.

  1. People of the Book

This is practically unavoidable chapter for any book about IQ related to Jews and their outstanding intellectual achievements. Author reviews a number of theories, but basically gives up on explanation stating at the end that whatever is Jewish advantage in IQ, the actual achievement is higher that could be explained by this advantage and had to relate to very specific culture and values,

  1. Raising Your Child’s Intelligence…and Your Own

The final chapter provides some pedagogical advice on how to raise children so they grew up smart by promoting training for Fluid-Intelligence, Self-control, effective tutoring, and providing incentives for hard work, but avoid rewarding activities that have intrinsic value for a child.

Epilogue: What We Now Know about Intelligence and Academic Achievement

Author summarizes book by once again rejecting strong hereditarian view and stressing value of culture and education in enhancing whatever endowment one has.

In Appendix author provides some experimental data starting with a nice statistical graph:

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MY TAKE ON IT:

It is an interesting book, but I think that the whole IQ issue is practically irrelevant for contemporary world and even less so for emerging world. The point of IQ at the beginning was to find way easily and cheaply identify cognitive abilities of individuals in order to achieve the most efficient match for tasks assignment in military or industrial environment. We are now moving beyond industrial environment, mass conscript armies, and such, all of which quickly becoming things of the past, so the original objectives are now practically defunct. With Internet and availability of all information including multiple education classes, testing tools, and, most important, advance of self-selection of activities, the test of IQ intelligence becomes not just outdated, but plainly meaningless, unless we intent maintain some kind of artificial “meritocratic” system when merits are defined by IQ tests. I believe that we are moving to the world without elite, maybe even without elite colleges, in which we will stop treating people as attachments to tasks. My guess is that over time IQ test will become harmless curiosity exercise like crossword puzzles, rather than live defining test.

 

20161105 Kelly, Kevin – The Inevitable

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MAIN IDEA:

The main idea is to use author’s extensive experience as technological writer and editor to analyze the direction and nature of development for our increasingly computerized and digitalized civilization and present it in disassembled form of 12 specific processes with some more or less specific prognosis of future condition for each of them.

DETAILS:

INTRODUCTION

Here author defines his intent as to uncover roots of digital change and try to foresee societal impact of this change. Philosophically he defines this change as switch from products to processes and this book pretty much describes 12 high level processes or forces that he believes will form the future of humanity.

  1. BECOMING

Here author uses his experience as editor of Wired to discuss continuing change in technological landscape, which is constantly upgrading unlike very stable landscape of the past. He calls this state “protopia” kind of rejection of notion of utopia and dystopia, that is condition of constant becoming but never to become some final permanent condition.

  1. COGNIFYING

This process means adding some cognitive function implemented by using computer to practically all aspects of live from daily routine activities to entertainment and big choices of live. Practically it also includes substitution of humans by robots in all conceivable areas of activity.

  1. FLOWING

This is about constant flowing of information via computer networks with clouds containing everything that could be digitalized and 3-D printing producing material goods as needed on demand.

  1. SCREENING

This is kind of addition to the flowing when humans and computers constantly screen the flow of information to select what they need at any given moment. It also would include constant screening of personal health parameters and/or anything related to selected activities either productive or recreational.

  1. ACCESING

Here author promotes idea that future contains dramatic switch from ownership mode of resource allocation, production, and consumption with accessing mode when goods and services provided as needed without taking ownership in order to use. Simple example: use of driverless Uber car instead of car ownership.

  1. SHARING

This is a vision of the new world overcoming self-interest via open source software, cooperation, sharing of information on Facebook, Instagram, and such. Strangely enough author believes that he was indoctrinated in free-market individualism, when, as practically all educated people in America, he was indoctrinated with collectivism, based on ideal of all powerful and all benevolent government run by unselfish expert public servants in the best interest of population, which consists of similarly unselfish, enlightened but somewhat dim people who need continuing guidance. Consequently it is not surprising that anything that smells like sharing and voluntary job without pay he celebrates as wave of the future and everything that is driven by self-interest is suspicious as retrograde and probably evil.

  1. FILTERING

Here author reviews filtering processes and provides very nice and concise presentation of existing filters:

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his is very interesting and important piece because filtering could be a huge tool for supporting peer to peer services by allowing use of AI to select very specific services for a person both to produce for small and precisely targeted audience and to consume from reliable source who knows one’s preferences. However it could be and actually is powerful tools for conditioning people to do whatever elite wants them do, even if it is extremely harmful.

  1. REMIXING

This is another process that always existed, but at current level of computer and communication power is becoming qualitatively more effective, allowing just about everybody produce just about everything by remixing existing bits and pieces of information.

  1. INTERACTING

This is about interacting with computerized virtual reality. Here are trends that author expects to expand this area:

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  1. TRACKING

This process is expanding all the time and eventually, in author’s opinion would lead to a number of beneficial abilities:

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  1. QUESTIONING

This process already achieved significant success with Wikipedia and Google search allowing finding answers with ease not even conceivable a half century earlier. With development AI of IBM’s Watson type the level of complexity of QA becoming dramatically higher, providing support for increasingly high level of functionality. Actually the crux of human intellectual activity will move from finding answers to posing good questions and author provides a nice list to define what kind of questions are the good ones:

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  1. BEGINNING

The final chapter kind of summarizes author’s vision of the future as one highly integrated human-computers network, albeit still saturated with barriers and monopolies either corporate or governmental. However these barriers will be breached and on the long run we’ll achieve soft singularity with AI.

MY TAKE ON IT:

I find technological ideas presented in this book quite convincing and generally consistent with my take on future technological development. However I think author significantly overestimate possibilities for cooperation and labor without compensation and all these open source kind of things, but it is relatively insignificant problem. The main point is that with all these processes humans cease to be standing alone entities and becoming self-controlling and self-directing parts of one network based on AI running everything that is required for meeting objectives defined by humans.