Wednesday, May 7, 2014

The Second Machine Age by Erik Brynjolfsson and Andrew McAfee

I'm thinking that I need to create a new label on this blog, called (tongue firmly in cheek) The PollyAnnas. Every so often I run across a book written by a group of optimists with a vision of the future so bright and cheerful that it blows out all of the cobwebs deposited by today's mainstream media. Unfortunately, they're few and far between. In fact, in the last three years, I've reviewed only two other PollyAnnas - Diamandis and Joffe.

This book starts out quite well, fulfilling my expectations in talking about the rapid pace of technological progress, how Moore's Law and the compounding effect of worldwide networking have given us so many everyday devices that once were the stuff only of science fiction, such as a driverless automobile, Star Trek-like communicators which we all carry around with us, amazing new social networks, and so forth. It begins to fizzle a bit in the middle of the book when the authors begin to talk about the social and economic effects of the new technology, as it rewards those people who are able to increase their productivity and skills by using computers and networks and apps, while it leaves others falling behind and losing their jobs to our new robot overlords (not quite literally...yet). The latter third of the book contains their prescriptions for individuals and government to follow going forward to alleviate the problems and to take advantage of the opportunities, which seems somewhat biased towards their somewhat Progressive take on things, so I just took it with a grain of salt and enjoyed a few of their wilder thoughts along the way.

In their discussion of how computers are terrible at pattern recognition, but good at following rules, known as algorithms, I found the following side note amusing:

"In the years leading up to the Great Recession that began in 2007, companies were giving mortgages to people with lower and lower credit scores, income, and wealth, and higher and higher debt levels. In other words, they either rewrote or ignored their previous mortgage approval algorithms. It wasn't that the old algorithms stopped working; it was that they stopped being used."

What a great description of the "algorithm" which precipitated the artificial bubble in housing prices and all of its unexpected consequences.

In an interesting illustration of how far we've come very rapidly:

"ASCI Red... was the worlds fastest 1996. It cost $55 million to develop and its one hundred cabinets occupied nearly 1,600 square feet of floor space...Designed for calculation-intensive tasks like simulating nuclear tests, ASCI Red was the first computer to score above one teraflop...To reach this speed it used eight hundred kilowatts per hour...By 1997, it had reached 1.8 teraflops.

Nine years later another computer hit 1.8 teraflops. But instead of simulating nuclear explosions, it was devoted to drawing them in all their realistic, real-time, three-dimensional glory. It did this not for physicists, but for video game players. This computer was the Sony Playstation 3."

Ain't it great!

I discovered a new term, "network effect" - a situation where the value of a resource for each of its users with each additional user.

The authors talk about Waze, an application that works far better than most GPS mapping and direction-providing applications, which takes into account the information both automatically and manually fed into it by its users and their cell phones, providing the most efficient method of navigating from one point to another, based on traffic patterns, speeds traveled in real time, and so forth. It doesn't merely take you down the freeway to your destination, but will make use of side streets if traffic is less dense there on your morning commute, for example.

Other apps which obviously benefit from the network effect are social networks like Facebook, LinkedIn, and Twitter, which get more useful to all users as more users become connected.

Another new development which may be promising involves the Jeopardy playing computer, Watson. It is being reprogrammed with medical data which scientist hope will help doctors make better, quicker diagnoses. In one AI-related project, a computer was programmed to scan for cell patterns in cancer biopsies that might predict survivability rates. The program discovered three new patterns that pathologists had not previously used, which were good predictors.

The authors have an interesting theory:

"In the past couple of decades, we've seen changes in taax policy, greater overseas competition, ongoing government waste, and Wall Street shenanigans. But when we look at the data and research, we conclude that none of these are the primary driver of (income and wealth) inequality, Instead, the main driver is exponential, digital, and combinatorial change in the technology that undergirds our economic system. This conclusion is bolstered by the fact that similar tends are apparent in most advanced countries. For instance, in Sweden, Finland, and Germany, income inequality has actually grown more quickly over the past twenty to thirty years than in the United States."

"...technologies like big data and analytics, high-speed communications, and rapid prototyping have augmented the contributions made by more abstract and data-driven reasoning, and in turn have increased the value of people with the right engineering, creative, or design skills. The net effect has ben to decrease demand for less skilled labor while increasing the demand for skilled labor."

Another concept I wasn't familiar with was the idea of "winner-take-all" markets, which seem to be gradually taking hold of the world of business. With the removal of geographic barriers to marketing made possible by the worldwide web, it is possible for people to rapidly find the best product, app, or service, and to base their spending decision on the absolute best choice, rather than the merely relatively good choice. Competitors who don't have the best choice are rapidly eliminated from the market.

One of the keys to getting ahead in the future mentioned in the book by Brynjolfsson and McAfeee is going to be the ability to play well with robots. Those who are able to augment their skills by taking advantage of technology will do well, while those who do not will wither.

They mention an interesting avant-garde clothing manufacturer called Zara who determine which clothes they will create, and what to ship to individual stores by consulting their store managers about what will sell well in that location over the next few days.

"Managers figure this out not by consulting algorithms but instead by walking around the store, observing what shoppers (particularly the cool ones) are wearing..."

Which raises the question, "How do you know who's cool?" It's high school all over again, apparently.

Side note, in case you're occasional confused by the difference between tera, peta, and exabytes, here's a link to an exabyte definition on Wikipedia that helps a lot.

I found mildly amusing that researchers Ernest Pascarella and Patrick Terenzini summarized more than twenty years of research in their book How College Affects Students by telling us, "...our most fundamental recommendation to students and their parents: study hard, using technology and all other available resources to 'fill up your toolkit' and acquire skills and abilities that will be needed in the second machine age."

Ya think? How many tax dollars were spent on that grant, Captain Obvious?

In the midst of their policy recommendations to solve the problem of technical illiteracy among the unskilled (which, not surprisingly contains the first prescription "pay teachers more"), I found this one puzzling.

"We do not think the right policy would be to try to halt the march of technology, or to somehow disable the mix of exponential, digital, combinatorial innovation taking place at present."

Who in the world is saying that we should? Maybe a few Luddites in the hinterlands, but the rest of us, like Ken Jennings, are welcoming our new robot overlords.

One idea which they present is one I've seen in science fiction for a long time - the idea of a universal basic living stipend for all citizens. What I hadn't realized is that it was actually seriously considered and proposed during the Nixon administration, with the Family Assistance Plan.

" also faced a large and diverse group of opponents. Caseworkers and other administrators of existing welfare programs feared that their jobs would be eliminated under the new regime; some labor leaders thought it would erode support for minimum wage legislation; and many working Americans didn't like the idea of their tax dollars going to people who could work but chose not to."

La plus ca change, eh?

They list some ideas from a brainstorming session on better shaping the future. I particularly like #5.

"Start a 'made by humans' labeling movement, similar to those now in place for organic foods, or award credits for companies that employ humans, similar to the carbon offsets that can be purchased. If some consumers wanted to increase the demand for human workers, such labels or credits would let them do so."

Perhaps if we started a rumor that foods grown by robots caused birth defects or sexual impotence...

Best chuckle I had all day.

An interesting, occasionally thought-provoking read. I only wish it had spent more time on reporting about all the great things happening in high tech, and not so much politically pontificating.

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