What is making laugh on Friday Night: Robot fantasies

Man I wish I could get a Carnegie Melon sponsorship to talk about bullshit extrapolations. Jeesh you would have thought econometric modeling based on the past trend rate of growth to make a prediction about the future trend rate of growth was well dead. Here it is again in all its mechanistic glory.

Two Three flaws. First-off past rates of increases in the number of computational turns a processor can achieve do not translate into a sure, certain, or even likely predictor of the future rates of growth. This is not some natural law folks!

Second and perhaps more important is the question of what and how processors process when they process? What would a 1 billion tetra-flop processor process with asteroids as the software? That is, even if we accept the idea that in X years micro-processors will be 1 billion time more powerful (speakers claim) the question is will the software be 1 billion times more powerful? Video games are not a bad test of this reasoning. Surely FPS are vastly improved then when the little Doom 2.9 gigabyte shareware version was released in in 1995. But a billion times better?

But let us cut to the quick of it. For some war between human and robots we would need robots to have some sentient qualities which gave them the capacity to develop an identity as “robots” and yet as an equal but exploited underclass to humans. Think about that for an evening or two minutes and then laugh.

Let us descend even further into the absurdity and assume for argument sake that robots did develop consciousness, that they were capable of identifying as robots in some general sense. Surely there would be different robots occupying different levels in the social division of labour: there would be automotive robots, cleaning robots, pilot robots, bouncer robots, maybe prostitute robots, grad student robots, professor robots, lawyer robots…ok well you get the picture: to some extent all these locations in the social division of labour could be explained as “workers” subservient to capital. But what we also know is that this is not sufficient to provoke a war against capital. So why should robots be any smarter?

Third, and perhaps more importantly (here I had to think back to Donna Haraway in a senior undergraduate seminar and then fast forward to Philip Mirowski’s Machine Dreams ) there is the issue of the relation of robots to humans. Robots are in fact human prosthetics. They are not and will not be something that stands apart from and against human beings. They are, and will always be something enlisted, tied up with the human condition…with our creative capacity to transform nature and ourselves. To the extent that robots go to war with humans they will do so in the way machines always have: as an extension of our (in)humanity. These prosthetics will not go to war against humanity but in the service of some elements of humanity against other elements of humanity. And it is for that reason we ought to debate and evaluate the role of technological development in our society not in the sense of oh god “it is alive” but in the sense that they are we.

Here is the video enjoy:

And finally an Economist hits it right on the head

Robert Waldmann over at Angry Bear hits the ball right out of the park with “Price Revelation” is Mysticism. The post covers so much ground with implications so counter to the grain (too bad he does not take them beyond CDs) that it is quite simply elegant. His clarifications in the comments section are equally valuable. Much of financial engineering has been based on the idea that markets always get the prices right but that it is possible to beat the markets. That is, simultaneously clinging to the hard version of the efficient markets hypothesis and not.

At some point we will have to open up the debate on the difference between price formation and price selection. Neoclassicals have made a living off collapsing the two.

Reading Capital with David Harvey

Like most of the classic tombs *tomes* in philosophy, and later political economy and sociology Capital is a challenging read.   One must have some background in philosophy and some background in classical economics to even begin to penetrate this text.  Fortunately, David Harvey has put together an open on line reading course complete with lectures for each chapter.

Start here

So no excuses. Go buy or download a copy of Capital, read a chapter or two a week and then download the relevant lecture.

Good luck!

Carney goes all in: “We dont do spin”

Then

In the Bank’s January Monetary Policy Report Update, we projected that global economic growth will be tepid this year – just 1.1 per cent – before rebounding mildly to a below-trend rate of 3.7 per cent in 2010.

Now

We are now in recession with GDP projected to fall by 1.2 per cent this year. The first half of the year will be particularly challenging with sharp falls in activity and increases in unemployment.

But nevertheless:

In our base-case projection, real GDP is expected to rebound in 2010, growing by 3.8 per cent.

CBC Reports:

Liberal finance critic John McCallum asked whether the forecast “goes out on something of an optimistic limb.”

“We don’t do optimism; we don’t do pessimism,” Carney countered. “We do realism at the Bank of Canada. We don’t do spin.”

I think they do do spin over at the Bank of Canada and I also think that any sign of solid growth above say 1.5% in 2010 and nobody will care.  That is, the bluff will work whether it “works” or not because the prediction will be defended as reasonable at that time with the information and model they were working with.  2010 is a long way out for a forecast.

Economic Forecasts: Roubini makes the Bear’s Case

There are lots of rosy forecasts flirting around predicting a quick turnaround in the Canadian economy.  They all rely on some notion that global effective demand is going to raise commodity prices and thus restore growth in Canada.  So much of this hinges on what the prospects are for future global growth, not just if house prices stop falling and house and car sales pick up a little in the US.

Roubini who has been consistently ahead of the game has an expanded Q&A in the Financial Times. It needs to be read in full.  The point I would make is that any analysis which discounts uncertainty, does not take a more global dynamic approach, and which relies on a couple of discrete sectors is likely to give a false sense of security (or insecurity).

In many ways Roubini makes the point that has been made on this blog several times:  the neoliberal growth model is crumbling and there is no simple sense in which we return to 2006.

The basic difference between the bears and the wanna-be bulls seems to resolve itself to whether or not the present crisis is viewed as deeply systematic or superficially located in some auxillary system.  That is, whether the problem is with the starter of the engine or with the engine itself.

Mr. Gardner you got some splainin’ to do

Over at the Ottawa Citizen there is worthwhile attempt to keep the economy in perspective.  The watch phrase seems to be “do not panic.”  The implicit premise being that panic is driving bogus assessments of the extent of the turmoil unfolding in the economy and the labour market.  At least that was the premise of Gardner’s blog post:  StatsCan, you got some splainin’ to do .

For my part I am quite happy to the see that someone in the press is actually taking a look at the numbers.  The problem is, in this case, Mr. Gardner does not seem to be generating his own numbers.  He claims that Stats Can erred when it stated that:

This drop in employment exceeds any monthly decline during the previous economic downturns of the 1980s and 1990s.

Mr. Gardner argues that based on the Stats Can press release that reporters went about generating seriously flawed headlines.  I quote:

In one news story after another, we were told that the monthly job loss figure was worse than any in the recessions of the early 1990s or the early 1980s. This isn’t just bad, we were effectively told. This is unprecendentedly (sic) bad.

Mr Gardner goes on to say:

But that conclusion is based on a grade-school mistake: The labour market isn’t the same size today as it was in the early 1990s or early 1980s. It’s bigger. A lot bigger. For the stat to tell us how bad this drop was relative to those in other recessions, it has to take that into account.
Do that and it’s not the worst drop since the data were first gathered in 1976. It’s the third worst.

Now when I first read this I thought that Mr.Gardner’s conjecture was likely right.  The labour force is a lot bigger so all things being equal a large drop-off in unemployment might be relatively less severe than at other periods in the past.  It would have been nice if Mr. Gardner had presented his readers with the data or the formula by which he arrived at his conclusion.

So this morning I took a virtual walk over to Stats Can and pulled three series to be exact: Labour Force 15+; Employment; and Unemployment. All monthly and seasonally adjusted going back to 1976.

Why unemployment when this relates to Stats Can’s claim about employment?  Charity and balance is the answer.

So let us see if we can verify Gardner’s claim that Stats Can got it wrong and the press is full of a bunch of gloomsters.

In this graph two measures of employment loss are plotted.  One is the absolute loss of jobs (in black).  Here Stats Can is correct the 129,000 jobs was the most jobs ever shed since 1976.  But what of Mr Gardner’s point about the changing size of the Labour market?  The second measure captures this.  The pink line is the percent change in employment month over month.  Given that employment already accounts for 92% + of the total labour force it is by definition an ok approximation of the relative size of the Labour force.  And here again we are in Historic Territory: the fall in employment was the largest relative fall since 1976.

employment-loss1

But what if something really funky was going on with the labour force? That is, what if we used the labour force to generate our relative assessment.  This seems to be Mr. Gardner’s acid test.  Always dutiful I did that too. Here the  change in employment was calculated as the absolute change in employment divided by the labour force.

change-employment-relative-lf

Here again it would seem, according to the Stats Can data, that January was indeed a unprecedented happening.  No matter how one cuts-it, the Stats Can conclusion that “this drop in employment exceeds any monthly decline during the previous economic downturns of the 1980s and 1990s”  was exactly right.

To be fair to Mr. Gardner we could, however, take a different look at the employment situation and see if one could generate a much less novel conclusion.  For that I took a look at unemployment.  What I did was simply take the monthly unemployment rate and subtract Ti from T-i.  This will tell us if the jump in unemployment in January was higher than during any other time since 1976 (remember this has nothing to do with the Stats Can claim; that was purely about employment).

absolute-change-in-unemployment-rate

Clearly by this metric no records were being set (yet). The problem is, however, this metric does not take into account the changing size of the labour force. Well it in fact does, it is just that if the labour force is contracting it understates the unemployment level.

How to account for Mr. Gardner’s claim that if we adjust for labour market size “it’s not the worst [employment] drop since the data were first gathered in 1976. It’s the third worst”?

I must confess I do not really know because Mr. Gardner does not present any data nor the formula he used to arrive at his conclusion.  I am racking my brain to see if I can find some exotic data manipulation exercise  to get to that conclusion based on the Stats Can data.  But even if I did find a way and could manipulate the data I would be far away from dealing with the basis of Stats Can’s claim.

Now, if I’ve misunderstood something, I’d be delighted to be corrected. But if I’m right, I think Mr.Gardner got some splainin’ to do.