Neoliberalism and big data: public and private goods

In the words of Ronald Reagan, here we go again.*

Sandy Pentland rehearses something that’s made it’s way from heresy to platitudinal commonplace with breakneck speed. Asked “what, specifically, is the New Deal on Data?” Sandy tells us this:

It’s a rebalancing of the ownership of data in favor of the individual whose data is collected. People would have the same rights they now have over their physical bodies and their money.

Jaron Lanier has written a book on devolving power to individuals in their own data.

Ladies and gentlemen, we have the Wrong Metaphor. Just as it was a pity that we ever called intellectual property intellectual property (we want strong property rights don’t we? Pretty much the stronger the better) so now by making data something that is owned, our metaphor gives short shrift to the free rider opportunity.

Once more with feeling, here are the words of Thomas Jefferson, well known freedom fighter and slave-owner.

He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation.

Now it’s one thing to say that, in so far as we arrogate a right of control to anyone, it should be to the individual that the data is about. This is arbitrary in some ways.  It took two to tango and the data is about some attribute or assumed attribute of the industrial, but it was also the product of someone else capturing and organising that data. But since we want a society in which individuals are empowered, that all seems good.

But there’s a problem. We’ve errected this idea of someone owning their own data out of anxiety about the way it was being misused, for instance in ways that compromised individuals privacy. So we’ve done something about that – as well we might.

But along the way that metaphor got in the way. Here we have data – which in the age of the internet is always and everywhere a potential global public good. And here we have identifiable mischiefs that can befall an industrial. But instead of focusing the remedy around constraining the mischief in the most efficient way – with regimes that make it difficult and punishable to misuse data and create those mischiefs, we’ve gone with The Metaphor. Your data is yours. And we’ve gone with something that we built modern commercial law from and which lawyers love. Consent. We’re devolving the decisions to those at the coalface – a good instinct – and, hey, it’s your data so you had better consent to all the uses it will be put to.

But this is already going too far. Why? Because you can’t possibly consent to all the possible worthwhile uses to which your data could be put. Furthermore this all smacks of the fiction of infinite computing power which has been so useful, for instance in macro-economics in building views of the world which are unparadoxically, counterintuitive and at the same time wrong. If data is owned, then the cascade of permissions follows from the logic of property.**

One of the most important things I know about political discourse I got from a few lines in Schumpeter’s Capitalism, Socialism and Democracy. The ‘engine’ behind democracy – what makes us engage – is not reason (which tells us that there’s no point in engaging because of the infinitesimal chance we have of affecting the outcome) but affect – our emotional and expressive selves. And this governs what gets covered by the media – what takes off as a meme and what doesn’t. And it turns out the metaphors of property are pretty memeworthy, while the metaphors of a public good commons are strangely not.

Anyway, for the record, reason tells us that when it comes to data we’re staring at a massive and exponentially*** growing free rider opportunity. That that opportunity ramifies into the future into a multiverse of possibilities. We want to put people in control of their data to the extent that we want them to make decisions about whether they wish to compromise their rights – for instance to privacy – for whatever reason they may wish to. Moreover this is the only way we can build a healthy eco-system in personal data in a democratic world. (And doing so would be a major economic and social boon!)

But we don’t want them to individually or even in principle consent to every possible use of their data. Rather – and people might differ on how far to go – we want to identify a universe of possible objections that people might have to allowing others to use their data and empower them to prevent such objectionable uses. Beyond that, in the words of that well known Socialist Muslim Barack Hussein Obama “they didn’t build that”. We all built it. Or to put it more clearly, we are all the beneficiaries of the information world we have built which makes it possible for there to be data on us. And if our data can help benefit future generations by being free subject to being vouchsafed against reasonable mischiefs, then it’s the least we can do to set it free.       

* Yes, I know he said 'There you go again, but I'm after cheap mellifluence here - cut me some slack.
** As an aside I note that it may follow from the logic of property, but not from the fact of property which has always practically made room for the idea of multiple use without consent. Thus easements, adverse possession, residual rights, riparian rights, mining rights, airspace rights and on it goes.
*** Yes folks, I mean exponentially - not "really so amaaaazzzingly faaast you won't belieeeeve it".

Habituation – to mediocrity

A Tale of Repetition: Lessons from Florida Restaurant Inspections
by Ginger Zhe Jin, Jungmin Lee – #20596 (IO)


We examine the role of repetition in government regulation. Using
Florida restaurant inspection data from 2003 to 2010, we find that
inspectors new to the inspected restaurant report 12.7-17.5% more
violations than the second visit of a repeat inspector. This effect
is even more pronounced if the previous inspector had inspected the
restaurant more times. The difference between new and repeat
inspectors is driven partly by inspector heterogeneity in inherent
taste and stringency, and partly by new inspectors having fresher
eyes in the first visit of a restaurant.

One reason why Britannia ruled the waves: TQM 18th C style


An Englishman enters a naval action with the firm conviction that his duty is to hurt his enemies and help his friends and allies without looking out for directions in the midst of the fight; and while he thus clears his mind of all subsidiary distractions, he rests in confidence on the certainty that his comrades, actuated by the same principles as himself, will be bound by the sacred and priceless law of mutual support. Accordingly, both he and all his fellows fix their minds on acting with zeal and judgment upon the spur of the moment and with the certainty that they will not be deserted. Experience shows, on the contrary, that a Frenchman or a Spaniard, working under a system which leans to formality and strict order being maintained in battle, has no feeling for mutual support, and goes into action with hesitation, preoccupied with the anxiety of see­ing or hearing the commander-in-chief’s signals for such and such manoeuvres. . . . Thus they can never make up their minds to seize any favourable opportunity that may present itself. They are fettered by the strict rule to keep station, which is enforced upon them in both navies, and the usual result is that in one place ten of their ships may be firing on four, while in another four of their comrades may be receiving the fire of ten of the enemy. Worst of all, they are denied the confidence inspired by mutual support, which is as surely maintained by the English as it is neglected by us, who will not learn from them.


Nelson leaves men onboard to whack polar bear: Inadvertently shoots own arm off

Don Domingo Perez de Grandallana, a Spaniard writing of the Battle of St Vincent where a relatively obscure Commodore Horatio Nelson first rocketed to celebrity thrill-seeker status. Disobeying orders, he headed his 74 gun third rate straight into six of the heaviest Spanish ships three of which were 112-gun three-deckers and a fourth the 130-gun flagship. With his ship’s wheel shot away, he led his troops to board an enemy ship and then with cries of “Westminster Abbey or Glorious Victory” ordered them to board another ship. Everyone ended up very impressed. The rest is history. 


Smartphone use in meetings and impressing your boss

Distractions abound: In an image from the inauguration, the entire Obama family is seen using their smartphones.This post is mostly a note to self: Like I keep saying, there’s an ecology between public and private goods. This article asks whether smartphones should be used in meetings. That’s a question about a cultural rule. It’s a public good question. The article however seeks the answer to the question in private feelings and etiquette.

The closest it gets to considering whether the rule – or some more felicitous variant of the rule – is good is considering whether you (an underling) should use your smartphone. Well no you shouldn’t. Why? Because it might annoy your boss.

TalentSmart has tested the emotional intelligence of more than a million people worldwide and found that Millennials have the lowest self-awareness in the workplace, making them unlikely to see that their smartphone use in meetings is harming their careers.

There are certainly lots of circumstances in which one could agree. It can be annoying. Sometimes very annoying. As I understand it one of Kevin Rudd’s staffers early in his term wore earpieces attached to an iPhone in meetings.

Still the moment I saw Twitter being used at conferences I realised there were costs and benefits and there could be strong benefits. The costs were distraction and all that can entail. On the other hand the spoken word is a very time inefficient medium for getting across information. You can read these paragraphs a lot faster than you can listen to them, and if there’s a lot to the article, you can also skim stuff you think you don’t need to read. Not so with listening to someone on a platform talking at you and taking you through his slides. And the more people there are in the audience, the greater the gain for them as they tailor their attention to what is generating the best value for them at the time (OK, that’s the theory, some will just be distracting themselves, but lots won’t).

Smartphones can be a pain in meetings if they’re used by people who don’t’ acknowledge their duty to the group to pay attention and know what’s going on. On the other hand you can occasionally check email and even write back without losing track. If you manage that then we’ve got a productivity gain on our hands. Not only doesn’t this article even canvass this possibility. It’s whole world is the world of impressing your boss. Too bad if he’s a jerk and is only impressed by your dumb obedient silence – too bad for the public good that is – which in this case is the interests of the organisation he’s bossing you about in. Continue reading

Why is Infant Mortality Higher in the US than in Europe? (Hint: it’s what you guessed it was)

maternal mortality nigeriaby Alice Chen, Emily Oster, Heidi Williams – #20525 (AG CH HC HE PE)


The US has a substantial – and poorly understood – infant mortality disadvantage relative to peer countries. We combine comprehensive micro-data on births and infant deaths in the US from 2000 to 2005 with comparable data from Austria and Finland to investigate this disadvantage. Differential reporting of births near the threshold of viability can explain up to 40% of the US infant mortality disadvantage. Worse conditions at birth account for 75% of the remaining gap relative to Finland, but only 30% relative to Austria. Most striking, the US has similar neonatal mortality but a substantial disadvantage in postneonatal mortality. This postneonatal mortality disadvantage is driven almost exclusively by excess inequality in the US: infants born to white, college-educated, married US mothers have similar mortality to advantaged women in Europe. Our results suggest that high mortality in less advantaged groups in the postneonatal period is an important contributor to the US infant mortality disadvantage.

Full paper here.

Paul Krugman the academic, Martin Wolf the economic journalist: Bottom line – read Wolf’s great new book

MartinWolf2011ByDaphneBorowski.pngPaul KrugmanI’m a big, though not uncritical admirer of Paul Krugman – of his straightforwardness and his aggression in what is almost always a worthy cause. And yet, reading Martin Wolf’s magnificent book rather inauspiciously titled The Shifts and the Shocks: What We’ve Learned-and Have Still to Learn-from the Financial Crisis, I’m struck by how modest Krugman’s achievement is.

Before his decisive turn with the coming of George Bush’s presidency and what Krugman saw as the rampant dishonesty of the campaigning and discourse of the right, Krugman styled himself as an aggressive defender of centrism, puncturing the fallacies of the heroes of the right and left. As he put it, he liked to catch them with their hands in the intellectual cookie jar and expose them in his pieces. Thus in his attacks on the ‘policy entrepreneurs’ of the Clinton era and before, like Lester Thurow and Robert Reich, he’d frequently ‘catch’ each of them not paying sufficient respect to the subtleties of comparative advantage and allegedly committing themselves to various other alleged intellectual fallacies.

While I was quite sympathetic to the points he was making on policy – these guys were often somewhere between little and a lot too slick in the way they presented their stuff - I didn’t really think that Krugman had demonstrated that they had in fact committed themselves to those fallacies. If you tried to read them ‘with’ the grain as it were, to get what they were trying to say – knowing also that they’re trying to communicate with people who are not steeped in economics – it wasn’t clear they were mistaken logically whether or not you ultimately agreed with them.

By contrast on the right we had all sorts of hijinks – massive tax cuts that paid for themselves, full Ricardian equivalence, modelling the Great Depression as a spontaneous holiday and various other grand themes thrown together with the flimsiest of evidence. In any event since Krugman has self-identified as a fighting Liberal, he’s been fantastically good at skewering his opponents – almost always when they need skewering, and at the same time he’s kept producing interesting academic(ish) papers. And in economics where models should be used to test, train and illustrate economic intuition and shouldn’t take over the show, academic(ish) papers are usually better than academic papers. Yet there’s been something missing. Continue reading

How the aged crowd out the young, and how it’s inefficient

This paper is pretty interesting. The last generation has seen the triumph of the baby boomers in attracting resources to themselves, at the cost of other generations, most obviously illustrated in throwing off the shackles of university fees (so other generations and the uneducated could pay for their university education) and then returning to ramp up fees on the oncoming generations. Ditto for the pension – which they’ll enjoy but get later generations to self-fund. Ditto all the tax breaks for self-funded boomers and on it goes though quite possibly the effect of house prices may be as or more important than all that.

Meanwhile think how those who rise to a certain position in the workforce tend to stay there, regardless of merit. This is not so true at the very top of large companies any more that seem to turn over their CEOs pretty quickly and ruthlessly (thought the terms of separation show a great deal of ruth). So economists tend to think of firms as making efficient decisions to survive competition, but they’re full of humangoes, and humangoes, just like mangoes have soft squishy bits that tend to do pretty much what they’re going to do whatever the state of competition is.

Demographics and Entrepreneurship

: by James Liang, Hui Wang, Edward P. Lazear – #20506 (IO LS)

Abstract: Entrepreneurship requires creativity and business acumen. Creativity may decline with age, but business skills increase with experience in high level positions. Having too many older workers in society slows entrepreneurship. Not only are older workers less innovative, but more significant is that when older workers occupy key positions they block younger workers from acquiring business skills. A formal theoretical structure is presented and tested using the Global Entrepreneurship Monitor data. The results imply that a one-standard deviation decrease in the median age of a country increases the rate of new business formation by 2.5 percentage points, which is about forty percent of the mean rate. Furthermore, older societies have lower rates of entrepreneurship at every age.