A strange radio announcement

Listening to the radio whilst driving I heard a very peculiar advert. At first I thought it was a spoof, but it seemed not to be. The announcement went something like:

"Do you suspect a member of your family of being a terrorist? If so, report them to the police now! If the accusation turns out to be false, then no harm is done. This message is on behalf of Durham county council".

I don't spend a lot of time listening to the radio, so perhaps this is a common message. The first thing which came to mind was that this sounds like something you might hear announced in a totalitarian state - inform on your friends and relations. The second thing which occurred to me is that making such accusations about members of your family is far from a harmless activity, and could have very significant consequences for that individual even if they're innocent.

A state within a state

Nicholas Shaxson talks about the UK banking system and tax avoidance. He's right that although I've always been a UK citizen the existence of a "City of London Corporation" with it's own mayor separate from the mayor of London is a completely new revelation to me. Nothing in my education or in the popular media (newspapers, TV, etc) informed me about this. It sounds almost like a state within a state, with it's own laws and a voting system which allows companies as well as citizens to vote. This merely goes to show that you can live in a country and still not know very much about it.



I really had very little idea about banking until the current recession began a few years ago, and it turns out that my thinking on this topic was comically naive. It seems very clear that more transparency, regulation and democratic oversight is urgently required in the financial sector in order to avoid the catastrophic failures that we've witnessed in the recent past.

One potential big disruption coming to the banking system is the emergence of cryptocurrencies. The way that money moves around at present is already electronic to a high degree, so using cryptocurrencies is no different in that regard, except that it would be likely to be more secure and readily facilitates online micropayments with negligible computational or administerial overhead. Their principal advantage is that they don't require centralised banks, which can collapse or engage in arbitrary money printing and other questionable practices. If cryptocurrencies become popular this doesn't necessarily resolve the issue of tax avoidance though, and without further regulation identical shenanigans could continue unhindered, regardless of the form in which money itself is implemented.



Until quite recently I had no idea that private banks created money from nothing whenever a new loan is issued. That is, they don't need to hold any assets in order to be able to issue loans. This violates the commonsense notion of lending something. For instance, if I lend a book to you I typically need to own the book in the first place, otherwise I'd be regarded as a thief attempting to launder his ill-gotten gains, and money is really just a meta system which stands for things of value, like books, and allows convenient exchange of value which is more efficient than barter.

To me this was also a revelation, because it means that at the heart of what I had thought of as a fairly sober and responsible type of business activity is something akin to large scale fraud. Of course, the amount of money in circulation does need to expand in order to adequately represent the goods and services available, but giving this ability to private companies sets up an unvirtuous cycle where it's easy to see that there's a compelling incentive towards irresponsible or "sub-prime" lending - the very type of lending which caused the collapse of the financial system and consequent public bailouts or buyouts.



One way to implement monetary reform would be to have some non-commercial independent organisation under democratic oversight deciding upon how much money was needed to represent goods and services based upon an analysis of the overall economy. The other way, which I think is more viable in the long run, and less susceptible to human fallibility, is the way that inflation occurs within the Bitcoin cryptocurrency. Under that system inflation of the number of coins in circulation occurs continuously over time and at a rate which is entirely predictable. This predictability should allow for steady expansion in goods and services, and discourage bubbles and crashes. It's also good for business in that completely predictable inflation allows you to plan for the future with greater confidence. It would also mean that private banks would have to behave responsibly, and lend in accordance with their assets with no incentive to lend more than they can really afford to.

Encirclement

Turtlebot

Although this may look like every other small trash can style robot which has existed in the previous couple of decades it's really a big deal.  The Turtlebot is both low cost, having a total cost of probably less than $1500, and it also has SLAM and autonomous navigation capability.

It could be argued that Neato got there first, but the Neato is, as far as I'm aware, a special purpose cleaning robot not intended to be hacked or reprogrammed by users.  The Turtlebot is really what the WhiteBox robot from five years ago would ideally have been, except without the fancy molded casing, and of course if those robots are still in production there's now an opportunity to fulfill Tom Burick's original concept of a home robot costing about the same as a high end PC.

This is the Sinclair Spectrum or C64 of robotics.  It's not glamourous and it doesn't have a simple to use GUI, but there's enough functionality to potentially build some interesting applications and since the software is open source it's completely hackable.  Just like with the early home computers, anyone with sufficient interest and a low budget could construct one of these and start messing around with it, with only minimal effort and without needing to be an expert in robotics algorithms.  There is still plenty more work to be done before robots can carry out many useful tasks beyond their existing cleaning or telepresence niches, but this is the beginning of a new service robotics industry.

Clegg against Cronyism

Earlier in the year out of curiosity I conducted a survey of the educational backgrounds of front bench MPs, in order to see whether a popular saying was merely mythology or whether it had some basis in reality.  The results showed that the popular idea that MPs are mostly privately educated in a small clique of "independent" schools has a strong factual basis.

This makes recent statements by Nick Clegg, himself a veteran of Westminster school, all the more intriguing.  Is Clegg a fan of Sluggish Software?  I doubt it.  More likely in an environment where unemployment is high social mobility is becoming the topic of the day.  Fear of unemployment also tends to foster more conservative career decisions with less possibility to move between companies, especially if they're operating with minimal staff.  A traditional route of social mobility via university education also looks as if it's immanently about to be severely curtailed.



Until quite recently I had believed that British society was becoming more egalitarian.  Within my own lifetime I've undoubtedly had more opportunities than my grandparents did, who came up against very rigidly enforced social class limitations.  The same sort of explicit exclusion, based upon the occupation or status of your father, no longer exists but it does seem that what might be called "classism" or the more popular contemporary term "cronyism" is on the rise.  Some of the employment advice I've had recently does make the suggestion that you try to become friends with "important people" or people at companies that you want to work for, in the hope that your application might be more favourably dealt with.

I suppose that increasing cronyism is only to be expected in a business as usual scenario in which inequality continues to increase as advances in automation and use of outsourcing concentrates wealth into shrinking and more defensive social networks.  It's also possible that cronyism could be the outcome of falling energy per capita or increasing cost of energy.  If energy becomes too expensive or scarce then transport opportunities might be more limited and who your neighbours are becomes more important.

Robot economics

An article about the dilemmas faced by managers as the service robotics industry grows.  This is the standard narrative around robotics and employment, and to large extent I think it's true that robotics can complement existing workforces and make work safer, more productive and less stressful.

Automating previously manual processes, such that workers become managers or teleoperators of robots, is just the first stage though.  Over time the supervisory jobs can also be subject to automation as more data about the details of supervision is collected, mined and modelled, so ultimately there is really no escape from the rising tide.

Some jobs which are primarily about human contact and the human condition will probably remain largely immune from automation, and here I'm thinking of things such as artistic pursuits.  This is not to say that AI systems cannot also do creative work, but much of the value of art seems to originate from a fascination with the humanity of the artist and their individual story.

Going beyond the standard narrative in the sort term, by which I mean the next few decades, I expect current trends to continue.  As more systems are automated this concentrates wealth, and hence political power, into fewer and fewer hands.  Initially robotics complements the existing workforce, but as time goes on it becomes increasingly obvious that jobs are being lost in the drive for ever greater efficiencies.  The middle classes shrink and become less affluent, cronyism becomes more apparent in daily life and the fraction of the population who are in one way or another defined to be "economically inactive" continues to enlarge.

My guess is that the number of jobs which are immune from the effects of technological unemployment is not going to be sufficient to keep the system stable in the form that we know it now, and that as inequality increases the resulting stresses will bring about a higher degree of localised production with less reliance upon money as a representation of value and determinant of wealth.  The kind of phenomena I'm expecting is to see people getting paid less and finding it much harder to obtain money via their own labour, but still having an acceptable standard of living from a surplus of goods and services produced via automation in a decentralised way.  In a world where automation technology is more advanced, factories may lose their competitive advantage in terms of economies of scale and it may be possible to produce single items on demand at the same unit cost that a factory could produce a thousand or a million identical widgets.  Raw materials will still need to be moved around, bought and sold and recycled, so I still expect a monetary economy to play a part in that regard, but eventually perhaps the majority of the economy may be a gift or post-scarcity system similar to that of our distant tribal ancestors, or similar to the economy of open source software which exists now.

Sandwiched between the current monetary system and a gift economy is an intermediate stage of the citizen's income.  To an extent we already have this, although often imperfectly implemented, in terms of social security systems.  As inequality rises but automation is not yet fully downwardly mobile it may be possible for the fortresses of wealth to effectively "buy off" the rest of the population by issuing a minimum income guarantee as a right of citizenship, keeping most people at least sufficiently comfortable that they don't revolt against the status quo.  This strategy might temporarily bolster a primarily money based economy for a while, in order to ensure that the purchase power of those in its possession is not depleted too greatly.

Although I think that money will become less important it seems unlikely that its fall from favour will be entirely catastrophic.  In many ways money is a convenient indicator of value, and direct electronic exchange via cryptocurrencies or other electronic tokens would be quite efficient and keep any unproductive rent seeking activities to the minimum.