Book Bits | 21 April 2018

Prediction Machines: The Simple Economics of Artificial Intelligence
By Ajay Agrawal, et al.
Essay by authors via Harvard Business Review
There is no shortage of hot takes regarding the significant impact that artificial intelligence (AI) is going to have on business in the near future. Much less has been written about how, exactly, companies should get started with it. In our research and in our book, we begin by distilling AI down to its very simplest economics, and we offer one approach to taking that first step.
We start with a simple insight: Recent developments in AI are about lowering the cost of prediction. AI makes prediction better, faster, and cheaper. Not only can you more easily predict the future (What’s the weather going to be like next week?), but you can also predict the present (what is the English translation of this Spanish website?). Prediction is about using information you have to generate information you don’t have. Anywhere you have lots of information (data) and want to filter, squeeze, or sort it into insights that will facilitate decision making, prediction will help get that done. And now machines can do it.

The Other Half of Macroeconomics and the Fate of Globalization
By Richard C. Koo
Summary via publisher (Wiley)
The failure of the vast majority of economists in government, academia and the private sector to predict either the post-2008 Great Recession or the degree of its severity has raised serious credibility issues for the profession. The repeated failures of central banks and other policymakers in all advanced countries to meet their inflation or growth targets in spite of astronomical monetary easing, have left the public rightfully suspicious of the establishment and its economists. The Other Half of Macroeconomics and the Fate of Globalization elucidates what was missing in economics all along and what changes are needed to make the profession relevant to the economic challenges of today. Once the other half of macroeconomics is understood both as a post-bubble phenomenon and as a phase of post-industrial economies, it should be possible for policy makers to devise appropriate measures to overcome difficulties advanced countries are facing today such as stagnation and income inequality.

Media Amnesia: Rewriting the Economic Crisis
By Laura Basu
Summary via publisher (Pluto Press)
Following the news coverage of a decade-long crisis that includes the 2008 financial crash and the Great Recession, the UK deficit, the eurozone crisis, austerity and rising inequality, we see that coverage is suffering from an acute amnesia about the policies that caused the crisis in the first place. Rather than remembering its roots in the dynamics of ‘free market’ capitalism, the media remains devoted to a narrative of swollen public sectors, out-of-control immigration and benefits cheats. How has history been so quickly rewritten, and what does this mean for attempts to solve the economic problems? Going behind the coverage, to decode the workings of media power, Basu shows that without a rejection of neoliberal capitalism we’ll be stuck in an infinite cycle of crisis.

Nation Building: Why Some Countries Come Together While Others Fall Apart
By Andreas Wimmer
Summary via publisher (Princeton University Press)
Nation Building presents bold new answers to an age-old question. Why is national integration achieved in some diverse countries, while others are destabilized by political inequality between ethnic groups, contentious politics, or even separatism and ethnic war? Traversing centuries and continents from early nineteenth-century Europe and Asia to Africa from the turn of the twenty-first century to today, Andreas Wimmer delves into the slow-moving forces that encourage political alliances to stretch across ethnic divides and build national unity. Using datasets that cover the entire world and three pairs of case studies, Wimmer’s theory of nation building focuses on slow-moving, generational processes: the spread of civil society organizations, linguistic assimilation, and the states’ capacity to provide public goods.

The Efficiency Paradox: What Big Data Can’t Do
By Edward Tenner
Review via Publishers Weekly
Historian Tenner (Why Things Bite Back) argues that supposed advances in technological efficiency can actually be self-subverting in this reasoned antidote to a culture increasingly obsessed with doing more with less. He starts by examining the history of innovations premised on efficiency, first seen in continuous production models such as Ford’s assembly line, and more recently in the rise of digital platform companies, which are “based less on the organization of machines and human labor than the gathering, analysis, and exchange of data.” The book then segues into hot topics such as rideshare apps, GPS, and self-driving cars. Tenner demonstrates how systems such as these, which are premised on efficiency, reduce serendipity, stifle learning, and limit humans’ ability to respond when malfunction occurs; they also, he argues, create substantial lost opportunity cost in the long term.

Ten Thousand Years of Inequality: The Archaeology of Wealth Differences
Edited by Timothy A. Kohler and Michael E. Smith
Summary via publisher (University of Arizona Press)
Is wealth inequality a universal feature of human societies, or did early peoples live an egalitarian existence? How did inequality develop before the modern era? Did inequalities in wealth increase as people settled into a way of life dominated by farming and herding? Why in general do such disparities increase, and how recent are the high levels of wealth inequality now experienced in many developed nations? How can archaeologists tell?

China Rx: Exposing the Risks of America’s Dependence on China for Medicine
By Rosemary Gibson and Janardan Prasad Singh
Summary via Sandra Dijkstra Literary Agency
Millions of Americans are taking prescription drugs made in China and don’t know it–and pharmaceutical companies are not eager to tell them. This is a disturbing, well-researched wake-up call for improving the current system of drug supply and manufacturing.