All the Workers They Were Already Gone /2

This is the second article of a three-article series about the so-called Third Industrial Revolution.

Pick up where we left off:

In the next article of the series, I will try to suggest that, in developed countries, people have already been provided permanent income support, in a very Freudian and Calvinist-guilt-free way but still…

The recent article Work Is Bullshit: The Argument For “Antiwork” by Adele Peters comes in handy(well, just a few points, I strongly disagree with the interviewed: hard-working people are a bless, poseurs are the real issue):

[…] A fascinating essay by U.K.-based writer Brian Dean argues that we need to reframe the idea of work itself […]

is the idea of the virtuous “hard worker” anachronistic? Dean writes about how the concept grew in Puritan times and never really went away. […]

“Society seems to be in denial over this, to a large extent,” Dean says. “So, we see the persistent belief that we can achieve ‘full employment.’ Rifkin showed empirically that this is nonsense, unless we create a lot of make-work, i.e., work for the sake of working. And that’s what, as a society, we seem to be doing. Everywhere you look there are stupid, pointless (and probably environmentally destructive) jobs.”

[…] Dean supports the idea of unconditional basic income—a system in which society pays everyone enough to meet basic needs, so we can all spend our time doing something that truly fulfills us. […]

Despite very straightforward economic theory suggesting that direct monetary income support is the most efficient (“these God damn food stamps don’t buy diapers”) and least distortionary welfare measure, historically nation states even dismissed most proposals for voucher programs and preferred a mix of direct public provision of services, subsidies to otherwise uneconomical private entities and creation of regulatory agencies.

Why? Let us behave as a corrupt politician. Nothing wrong with politicians, just worst-case scenario, which is always wise to consider.

First, I can provide you much more than direct monetary income support, I can give you a job: social status and no more Puritan guilt. I own you.

Second, I am a God-like economic entity: I can shape competition and innovation in whatever industry my intellectuals and pundits are able to label as strategic.

Third, I know plenty of private economic information. “I got pennies for my thoughts, now I’m rich”.

Enough said, not my fault if this corrupt-politician scenario sounds familiar to you.

Digital Publishing OPML

Here you are DigitalPublishing.opml, an OPML file with the news feeds of a number of thematic blogs (English and Italian) to stay up to date with what is happening in the magic world of digital publishing.

feedly is a good news feed reader. Once subscribed, import the OPML file: Add Content > Import OPML (bottom of the page).

OPML and news feeds are XML files: the OPML file lists and links to a series of news feed files, that are automatically updated each time a new article is published and contain its title, URL and, sometimes, a digest or the entire hypertext (according to the blog owner’s preferences). A news feed reader allows to import OPML files and display the content of news feeds.

Please, feel free to share other sources (especially non-Italian and non-English) in the comments, so I can add them to the OPML file. Currently in DigitalPublishing.opml:

The one and only scientific definition of Profit

Me reading articles about Amazon unprofitability:

image

Due to the unpredictable nature of medium-/long-term investment in a dynamic economy (i.e. real life), the one and only scientific definition of profit is in a sense both more subjective, being based on expectations of market participants, and more objective, being readily observable at a given point in time, than pseudoscientifc profit computed in income statements based on arbitrary assumptions:

[…] convert goodwill into bona fide market values. […] this is exactly what every profit-seeking plan attempts–the conversion of purely subjective values, which are not exchangeable, into market values that are generally recognized and readily transferable.

[very precious and underrated undisclosed personal source of mine]

Now the Internet is a safe and healthy place, I can finally get asleep.

Mycroft: This is a chullo. The classic headgear of the Andes. It’s made of Alpaca.
Sherlock: Nope.
Mycroft: No?
Sherlock: Icelandic sheep wool. Similar, but very distinctive if you know what you’re looking for. I’ve written a blog on the varying tensile strengths of different natural fibers.
Mrs. Hudson: I’m sure there’s a crying need for that.

All the Workers They Were Already Gone /1

This is the first article of a three-article series about the so-called Third Industrial Revolution.

Nouriel Roubini has recently shared his views about “whether demand for labor will continue to grow as technology marches forward” in Where Will All the Workers Go?, an op-ed column for Project Syndacate.

Contrary to the (once?) common economic belief that robotics will affect only manufacturing employment, Roubini correctly points out that even highly-skilled service jobs are at risk of technological disruption.

[…] a patient in New York may have his MRI sent digitally to, say, Bangalore, where a highly skilled radiologist reads it for one-quarter of what a New York-based radiologist would cost. But how long will it be before a computer software can read those images faster, better, and cheaper than the radiologist in Bangalore can?

[…] will we still need so many teachers in the decades to come if the cream of the profession can produce increasingly sophisticated online courses that millions of students can take? If not, how will all of those former teachers earn a living?

[…] by transforming how services are provided to the public, the e-government trend can offset the employment losses with productivity gains.

However, he runs into a common economic pitfall when he defines recent technological advances as “capital-intensive” (thus favoring those who already have financial resources) and “skill-intensive” (thus favoring those who already have a high level of technical proficiency).

Actually, recent technological advances are capital-saving: a few decades ago, not even the richest man in the world could command the computational power and the mass storage that, today, I can command with a few hundred bucks.

Since practically every kind of information can be digitally encoded, computationally manipulated and electronically transmitted, from an economic point of view we are not just talking about bits, we are talking about less physical capital, real stuff: paper, trucks, buildings, machinery, gasoline, etc.

This fact also explains why an incredible and historically unprecedented amount of research and development has been undertaken by small companies (the now-mythical startup garages) and not by giant incumbent firms with huge financial endowments.

Furthermore, it may sound counterintuitive but technological progress has never been skill-intensive: technological progress is all about embodying human knowledge into capital goods.

A very quick and simple example should do the work: only a fool could label earlier generations of low-level computer programmers as less skilled than current generations of high-level computer programmers.

If current generations of high-level computer programmers are able to deal with very complex and relevant problems is not because they are more skilled than earlier generations of low-level computer programmers, exactly the opposite: the superior knowledge of earlier generations of low-level computer programmers is now embodied into very complex, but not-so-expensive, capital goods, so that it is easily available to less skilled current generations of high-level computer programmers.

Current generations of high-level computer programmers are less skilled and need less capital (go back to the sixties and try buying a mainframe with your monthly salary…) than earlier generations of low-level computer programmers, but they are also much more productive because they can build upon the superior knowledge embodied into more recent capital goods.

If you think thoroughly about the history of professions and sciences, you will notice that this is a general and well-known truth: we are dwarfs on the shoulders of giants.

In the short run, it is not a historical novelty that technological progress is deflationary and employment-depressing: its contribution to economic development has never been full employment, it has always been fostering entrepreneurial activity (new goods, new production methods, new markets, new sources of supply, new organization forms) that in turn drives the rise in income and the wealth and political power redistribution into different hands.

The fact that winner-takes-all effects are at work is also quite encouraging, it implies that entrepreneurial profits are still among us: as long as the law of category (“If you can’t be first in a category, set up a new category that you can be first in.”) still holds, there will be loads of different competitions and winners.

IMHO, the real question that we should ask ourselves is: why now? Why did it take the Internet for economists to notice and discuss the “Third Industrial Revolution”? I will stick to Roubini’s own examples:

  • It did not take the Internet for telemedicine to be competitive with more labor-intensive medical practices. Why do developed countries lag behind developing countries in this field?
  • It did not take the Internet for distance learning to be competitive with more labor-intensive educational practices. Actually, it is not “the cream of the profession” that is producing “increasingly sophisticated online courses that millions of students can take”, it took an ex-hedge fund manager. Why is it so?
  • It did not take the Internet for governments to achieve greater efficiency and transparency through ICT (see non-internet e-government). So why all the buzz now?

Roubini concludes that, eventually, it might “become necessary to provide permanent income support to those whose jobs are displaced by software and machines.”

In the next article of the series, I will try to suggest that, in developed countries, people have already been provided permanent income support, in a very Freudian and Calvinist-guilt-free way but still…

Tilde made easy on Windows

For one reason or another, real men need to type the tilde character quite often.

On Windows, the corresponding Alt code is 126, which is such a pain in the ass to type, especially if you are using a laptop without a separate numeric keypad (very likely).

On Linux, the Italian keyboard shortcut for the tilde character is very straightforward: Alt Gr + ì.

To replicate this behavior on Windows, install AutoHotkey and save the following script as tilde.ahk in your startup menu folder.

<^>!ì::~
#c::Run,https://www.clipperz.com
#s::Run,%A_ProgramFiles%\RStudio\bin\RStudio.exe

Run it, or wait for next reboot. Done.

For more information about AutoHotkey, see Turn Any Action Into a Keyboard Shortcut: A Beginner’s Guide to AutoHotkey by Adam Pash.

Actually, my script includes two extra shorcuts, pointing to the only website and the only program I can’t really do without, just to show some other useful AutoHotkey features.

The Windows + c shortcut launches Clipperz, the host-proof online password manager priced in cryptocurrency. Gotta love paranoia.

Windows + s, instead, is a shortcut to the RStudio executable, a powerful IDE for R, my own macho reason for the tilde shortage.

Speculatori

– “Nonno, tu ti sei trasferito qui nel ’72, giusto?”
– “Sissignore, nel millenovecentosettantadue. Mi passi l’acqua, per favore?”
– “Prego, tieni. E hai comprato casa in quell’anno?”
– “Certamente. Mettici il formaggio, non è buona senza.”
– “Non mi piace il parmigiano sugli asparagi. Con mutuo a tasso fisso?”
– “Per forza. Moglie, prepari sempre troppa roba.”
– “Complimenti, bel colpo. Che modello econometrico hai utilizzato?”
– “Modello econometrico?”
– “Classica ironia del fondamentalista puro. Evidentemente hai ragione tu, certo però che il timing è stato perfetto.”
– “Maria, cos’è che dice?”

BTC Currency Options

Exotic options are financial derivatives different from commonly traded products. Usually, they are more complex than vanilla options because of particular and unusual contractual arrangements. BTC currency options, instead, could be classified as exotic because of the singular nature of the underlying assets.

BTC currency options are derivatives of the exchange rates between P2P cryptocurrencies and “traditional” currencies. BTC stands for Bitcoin, the first and most widely used P2P cryptocurrency. The critical difference with “traditional” currencies is that P2P cryptocurrencies do not rely on social institutions: their monetary system is “regulated” automatically by cryptographic algorithms and peer-to-peer technology.

As a consequence, Bitcoin transactions are very cheap and potentially anonymous, untraceable, and non-taxable. The floating exchange rate between Bitcoin and “traditional” currencies is influenced not only by the “traditional” variables of exchange rate theory, but also by the preferences of market participants for these unique set of features.

This must be taken into account for the pricing of BTC currency options, together with the high volatility of the underlying exchange rates, probably due to the relatively low trading volumes. #bitcoin-otc offers a very informal platform for the OTC trading of BTC currency options.

Links

  • Duncan Geere, Peer-to-peer currency Bitcoin sidesteps financial institutions, “Wired UK”, 05/16/2011, bit.ly/VTDdAW
  • #bitcoin-otc, bit.ly/SCeO2e