296 (21 December 2016)

Welcome to week 296!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(14 December 2016): “The Great A.I. Awakening” (http://www.nytimes.com/2016/12/14/magazine/the-great-ai-awakening.html)

********This is a very lengthy—39 pages in pdf—article that is very well written, interesting, and important.  Its summary, below the article title, is “How Google used artificial intelligence to transform Google Translate, one of its more popular services—and how machine learning is poised to reinvent computing itself.”  The article uses the transformation of Google Translate as the occasion to accessibly dilate on the recent history of artificial intelligence.  It contains a few videos and links to seminal papers; the so-called “cat paper” was especially important.  The article generated 436 comments before commenting was closed.  I read the entire article but only a few comments.  I suspect that reading both would give one a decent overview of the promise and perils of AI.

********One sentence that really caught my attention was: “There has always been another vision for A.I. — a dissenting view — in which the computers would learn from the ground up (from data) rather than from the top down (from rules).”  It turns out this bottom-up perspective has been a driving force in recent developments of AI, just as it characteristic of the concept emergence and the methodological individualism of some social thinkers, especially economists.

********Although a major peril of AI revolves around the question of “What will happen work as we know it?” there is, perhaps, a more sinister concern.  This is touched upon this week in The Economist where a leader (http://www.economist.com/news/leaders/21711904-worrying-experiments-new-form-social-control-chinas-digital-dictatorship) and a briefing (http://www.economist.com/news/briefing/21711902-worrying-implications-its-social-credit-project-china-invents-digital-totalitarian) discuss some aspects of China’s evolving work to develop digitized “social credit” scores for all of its inhabitants.  Just as we all have more-or-less accurate credit scores, China’s social-credit scores look to address far more comprehensive aspects of one’s life.  This article reminded me of previous readings (and a movie) that sought to predict future criminal activity.  An article appeared this week in Quartz, entitled “The disturbingly accurate brain science that identifies potential criminals while they’re still toddlers” (http://qz.com/866064/neuroscience-study-brain-tests-identify-future-criminals-as-toddlers/).

(15 December 2016): “How Antibiotic-Tainted Seafood From China Ends Up on Your Table” (https://www.bloomberg.com/news/features/2016-12-15/how-antibiotic-tainted-seafood-from-china-ends-up-on-your-table)

——–“Chinese agriculture has thrived for thousands of years on . . . recycling—the nutrients that fatten the pigs and geese also feed the fish.  But the introduction of antibiotics into animal feed has transformed ecological efficiency into a threat to global public health. . . . The overuse of antibiotics has transformed what had been a hypothetical menace into a clear and present one: superbugs, bacteria that are highly resistant to antibiotics.  By British government estimates, about 700,000 people die each year from antibiotic-resistant infections worldwide.  If trends continue, that number is expected to soar to 10 million a year globally by 2050—more people than currently die from cancer.”

********The feature food item in the article is shrimp, the country of origin of which is frequently mislabeled, a deception that is sometimes intentional.  In some instances, the shrimp comprising one’s meal also contains a “healthy” dose of antibiotics.  All this and more is related in the five-minute video featuring an interview with Bloomberg editor Megan Murphy.  She used the term ‘regulatory arbitrage’ that seems very useful in discussing the differing regulatory regimes in different countries.  With regard to shrimp, it seems, there is a real effort underway to use regulatory arbitrage to increase sales and profitability.

(16 December 2016): “Scandinavia’s Disappearing Cash Act” (https://www.bloomberg.com/news/articles/2016-12-16/scandinavia-s-disappearing-cash-act)

——–“By the end of this month, Scandinavia’s last mint will have closed.  Following in the footsteps of Sweden and Norway, Denmark has decided to outsource the production of its coins to Finland.  The Danish central bank has already stopped printing banknotes.  They’ve become so unfashionable that there’s no rush to find a subcontractor for those.  From the European Central Bank to Venezuela to India, authorities are falling out of love with cash, particularly the kind of high-denomination banknotes favored by mobsters and drug dealers.”  Scandinavia has been a trailblazer “in the global transition to a post-cash society.  Crucially, its preference for electronic payments helps reduce tax evasion, a key ingredient for funding its generous welfare state.”  The decline of cash has also affected the black economy.  “According to a March report by Denmark’s Tax Ministry, the size of [Denmark’s] . . . black economy has fallen by a third between 2012 and 2014.  Still, the Nordics’ shift away from cash has as much to do with convenience as with the fight against crime.  A June report by the Danish central bank found that the cost of handling cash is more than double that of handling domestic debit card payments.”

********As the article suggests, Scandinavia provides a glimpse into what is likely to be the future of money and money substitutes in the U.S.

(16 December 2016): “Mapping the Growth of Disability Claims in America” (https://www.bloomberg.com/news/features/2016-12-16/mapping-the-growth-of-disability-claims-in-america)

——–“If you’ve paid into Social Security, become injured or sick, and can no longer earn more than $1,130 a month, you can get a monthly subsidy from Social Security’s Disability Insurance Trust Fund.  In 1990 fewer than 2.5 percent of working-age Americans were ‘on the check.’  By 2015 the number stood at 5.2 percent.”  Although an aging population may be one reason for the increase, the geographic distribution of people on disability suggests that “Workers who might have endured pain for a physical job apply for disability when jobs disappear.  This has created what some economists call ‘disability belts’—rural areas in Appalachia, the Deep South, and along the Arkansas-Missouri border.”  According to MIT economist David Autor, “Social Security disability benefits function as unemployment insurance” even though they were not designed to do so.

********The article includes a stunning map of the geographic distribution of disability claims.  As noted in the article, the structure of existing disability payments may be discouraging some from seeking employment.

(18 December 2016): “OxyContin goes global—‘We’re only just getting started’” (http://www.latimes.com/projects/la-me-oxycontin-part3/)

——–In the United States prescriptions “for OxyContin have fallen nearly 40% since 2010, meaning billions in lost revenue for its Connecticut manufacturer, Purdue Pharma.  So the company’s owners, the Sackler family, are pursuing a new strategy: Put the painkiller that set off the U.S. opioid crisis into medicine cabinets around the world.  A network of international companies owned by the family is moving rapidly into Latin America, Asia, the Middle East, Africa and other regions, and pushing for broad use of painkillers in places ill-prepared to deal with the ravages of opioid abuse and addiction.  In this global drive, the companies, known as Mundipharma, are using some of the same controversial marketing practices that made OxyContin a pharmaceutical blockbuster in the U.S.”  Regarding that global drive, former U.S FDA commissioners David A. Kessler notes that Mundipharma’s push into global markets is “right out of the playbook of Big Tobacco.  As the United States takes steps to limit sales here, the company goes abroad.”

********Stefano Berterame, of the U.N.-affiliated International Narcotics Control Board, based in Vienna, notes that although most global pain problems could be solved with “very cheap morphine” the approach holds little interest for multinational drug companies due to its unprofitability.  Purdue Pharma charges “hundreds of dollars a bottle for a month’s supply of OxyContin” but “Generic morphine, which provides similar pain relief, can cost as little as 15 cents a day.”  A fascinating article, the third of a series put out by The Los Angeles Times.  The comparison of Purdue’s use of the Big Tobacco “play book” seems apt.  Indeed, any producer facing declining sales in one geographic market will look to other regions to replace sales lost.  What is different here, though, is that the expansion of sales will likely take place in areas that have relatively less stringent regulations and are possibly less well equipped to deal with the likely aftermath of expanded sales of opioids for pain management.

(21 December 2016): “The Highly Charged Way to Play Electric Cars” [SR](http://www.wsj.com/articles/the-highly-charged-way-to-play-electric-cars-1482250405)

——–“The next automotive revolution will be electric, or so they say.  The financial spotlight is on the car companies that will produce them, and especially on pioneer Tesla Motors, but are investors getting things wrong?  Isn’t there equal or perhaps far greater value in enabling electric vehicles?”  Maybe not.  “If every single car in America were electric then it would be awful for petroleum companies, disastrous for refiners and fatal for fuel retailers, but merely a challenge for electric utilities.  It would boost electric consumption by 25%.  But, because so much electricity is produced to keep the system reliable, the actual increase in generation capacity would likely be far more modest. . . . In a theoretical exercise, a maximum of 73% of miles driven nationally could be supported using available resources—something for almost nothing.”

********The article contains a chart comparing the price of gallons and e-gallons.  You can find a calculator, which provides comparisons by state and the U.S. average, at: https://energy.gov/maps/egallon.  For North Carolina, the price of a gallon of gas is $2.16 and the price of an e-gallon is $1.08; in Wisconsin, the respective prices are $2.16 and $1.34.

May you have a good week!

Bruce

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