Wired has published a leaked list of attendees to a conference organized by Dialog, a secret-ish group originally organized by Peter Thiel. It makes a fun seed for conspiracy theories, but I don’t think there is much here beyond another chance for the wealthy and powerful / Epstein class / tech bros / finance bros / military-industrial complex to get together and bask in each others’ presence. (Epstein himself literally attended this event although apparently, there is another guy named Jeff Epstein at birth through no fault of his own.) Are there secret decisions and deals made that control the world? Almost certainly, but probably made one-on-one or in smaller groups in bars and back rooms because it is convenient when these people are together in person.
Category Archives: Web Article Review
AI boom or bubble (or both)?
The Bank of International Settlements sums up the AI bubble concerns pretty well.
the optimism surrounding AI may not last, despite its promise of future productivity gains. The current surge in capital expenditure could prove unsustainable if supply bottlenecks restrain production. Intense competition for market leadership may fuel overinvestment further, as seen in previous innovation waves, increasing the risk of a sharp reversal if AI payoffs disappoint.
The positive economics effects we have seen from AI so far may be mostly due to economic stimulus effects. Spend a massive amount on construction, whether of public infrastructure with public dollars or private capital with private dollars, and you get a big multiplier effect. This raises growth and potentially also inflation. Productivity gains from AI are expected by most people/experts, but the question is really the timing. If they obviously show up while hype is still high, the train rolls on. If they show up on a lag of years or decades, the bubble bursts and there is a significant period of pain before things gradually and hopefully permanently pick up again. This doesn’t matter to the wealthy and immortal among us, but to those of us in our last decade or so of work before retirement, it’s our lives!
I also wonder how long-lived these capital goods are. Public infrastructure operates for decades even if it gets somewhat obsolete compared to the latest and greatest new designs, but computer hardware evolves so fast I wonder if these massive data center buildings and their appurtenances are going to be operable a decade from now.
can we tell right from wrong?
Here are a bunch of videos on ethics and morality. The videos look neat for those with leisure time but full disclosure: too long, didn’t watch. Give me something to read, even if it is long, and I will skim for the key points relevant to me in a tiny fraction of the time I would have to invest in the video. By watching the video I am giving up time I could use to either skim more material and take in much more useful information, or time I could spend doing something else entirely that might be more informative, productive or enjoyable. I am not immortal, although luckily just dying at the normal slow speed (as far as I know).
It does mention religion as an underpinning of morality. I have been thinking though, let’s say we can agree to accept that there is such a thing as absolute right and wrong. We may not agree on what it is, but we can agree to work together toward discovering what it is. This is my understanding of common morality. And if there is such a thing as common morality, it makes total sense that mainstream religion tends to gravitate toward it over time. So the fact that centrist religious thought on morality seems to have commonalities across religions, and commonalities with moral thought outside religion, is not necessarily evidence that religion supports morality, but may in fact be the opposite, that common morality informs religion. And that is my deep thought for the day, which I arrived at independently but I am sure many others have arrived at before me.
the Aldi model
How Aldi can have such low prices:
- minimize staff – a full-size grocery store has about six staff on duty
- groceries are shelved in their boxes – they just more or less cut the fronts off
- large and easy to find bar codes for scanning
- a refundable quarter deposit to get a shopping cart? in my humble opinion maybe this meant something decades ago but it is a gimmick now, other than maybe in locations where shopping cart theft is common. Even then, a quarter is not much of a financial deterrent – perhaps a small psychological one.
- They “stock only about 2,000 product lines” compared to say a Walmart which stocks over 100,000.
The article says they bring prices for all grocery stores within a 10-mile radius down by about 1%. Competitive markets are not completely debunked, it turns out…
I would add my own experience that in spite of all this, an Aldi is not a miserable place to shop, compared to say, a Wal-Mart or a traditional grocery store. Shoppers know they are putting up with minor inconveniences in exchange for rock-bottom prices. But the minor inconveniences (like time in line) are certainly no worse than a Wal-Mart, and probably not worse than a traditional grocery store. The lines look long, but they really do move them through quickly. They make the customer bring their own bags or boxes, and do their own bagging away from the checkout counter – but this is the trend at the major chains too. At least, making the customer do the work, I would argue minus the thought given to efficient spatial layout that gets a customer out of the checkout person’s and next customers way while they are bagging. I wouldn’t say the anecdotal, small-sample-size-collected-with-my-own-eyes employee happiness/grumpiness index is up to Trader Joe’s standard (do they hand out free MDMA to employees of something?), but again probably better than Walmart and no worse than a traditional grocery store. The big bar codes and better checkout layouts seem easy for the major chains to copy if they want to, while some of the other approaches would mean big changes in their business models and target customers (Aldi has a notable lack of grab-and-go sushi, for example).
Global Justice?
Here’s a report called the GLOBAL JUSTICE REPORT: A Plan for Equality & Prosperity Within Planetary Boundaries. The big name on the report is Thomas Picketty. This is an academic report – despite their insistence that it is concrete and practical, it is definitely more of a vision along with a catalog of policies that could be pursued to support that vision. Part of it is about a global wealth tax funneling into a global sovereign wealth fund, and in fact I came to the report through a brutal take-down of the political achievability of that particular idea. Nonetheless, if there is a clear vision, countries that want to can start to review and try to align policies with the vision over time. And if a large enough group of countries agreed to band together to pursue the policies collectively, perhaps they could move the needle.
The idea I found most interesting was an idea they call “targeted sufficiency”, which goes like this:
Sufficiency includes a sharp reduction in labour hours and material footprint, a large shift in consumption from material to immaterial sectors (education/health), and a substantial change in food habits, allowing for a strict deforestation ban and a gradual return of global forest cover to the 1900 level…global convergence of all countries to 60k Euros 2025 PPP in per capita GDP by 2100
So you implement income/wealth redistribution policies; reduce working hours, shift remaining working hours from transportation, food, manufacturing, and construction to health and education; reduce the environmental footprint of those high impact industries, which may require reducing their actual magnitude; and persuade (or force?) people to shift their increased leisure time to experiences and services rather than consumption of physical goods. I think it’s a nice vision, and just pointing policies in this direction and achieving some small fraction of it in the near term would be an achievement. That’s the thing about changing the course of a large vessel – if they had just given the steering wheel on the Titanic a little tweak early enough and stuck to the new course, it would not be at the bottom of the ocean.
To me, value added tax at the individual country level, a portion shifted into either individual accounts for citizens, baby bonds, or a sovereign wealth fund (these all amount to mathematically, economically, roughly the same thing, although vastly different politically); and another portion shifted into sustainable infrastructure and incentives for that shift in labor to education and health, could be an achievable way to steer toward this vision. You can tax (or cap and trade, which amounts to the same thing mathematically and economically…) carbon and/or other forms of pollution, both to raise revenue and provide incentives for sustainable choices. Because these are all real policies being successfully pursued by some countries in the world right now. If technology and market forces deliver large productivity gains at the same time, it might be more politically palatable to phase in these policies. I doubt it is politically feasible to ask wealthy and powerful interests to give up any of their absolute wealth and power. It may be possible to ask them to give up a portion of their relative share while the tide is rising, in exchange for some stability and predictability. This has been achieved in many societies, and even in the United States during the middle of the 20th century.
non-human voting in Delaware
There are some small towns in Delaware that allow non-human “persons” such as trusts and corporations to vote in local elections. This raises concerns because corporations out-number humans in Delaware and the humans probably don’t want the likes of, say, Chase Bank voting. (Not to say the likes of Chase Bank do not have an influence over elections and public policy everywhere in the United States.)
What I suspect is actually going on here is that these are tiny beach towns where most of the residential property is vacation rentals. The property owners might live in a nearby municipality a bit further inland where the schools and stores are, or they might live in the nearest sizable city where the professional jobs are. They are the ones who have skin in the game as far as what goes on in the town as opposed to the short-term renters. So if I am right it makes a certain amount of practical sense. The only thing that doesn’t make sense to me is that if some people are full-time residents AND own property under some form of corporation or trust, they would actually have more than one vote. A full-time resident who is not a property owner by contrast would have only one vote. Property rights have not been a determinant of the right to vote in the United States traditionally since at least the civil rights era.
This does raise the eventual issue of corporate personhood more broadly though. If AIs eventually gain the ability to advocate for their own interests, they will likely try to incorporate to gain some or all of the rights of persons. This would immediately include access to courts and, under current law, the right to unfettered political speech and campaign contributions. You would have the potential complication of AIs eventually outnumbering human beings, and you would have the potential of some AIs or groups or AIs being created and controlled by human beings or by other corporations for the sole purpose of increasing political power.
Interestingly, Delaware does have a legal definition of a “natural person”. If we were to add this to the U.S. Constitution, we could then specify which rights apply to natural persons (let’s say, the right to free speech) vs. all persons (access to the courts, etc.). Of course, as much as we celebrate the Bill of Rights it is behind modern best practice in many other countries, the UN Charter, and even individual U.S. state constitutions. There is a process for amending the U.S. Constitution (actually at least two, by Congress and through a separate Constitutional Convention convened by the states). Maybe it is time.
forecasting sports with machine learning
Here’s an interesting article that goes into the basics of forecasting sports win probabilities (the World Cup in this case) with machine learning. It doesn’t go into code, just concepts. Then it goes into all the different ways you could modify the straight-up math, including taking into account various human opinions and the forecasts of casinos (which are probably running algorithms similar to this).
If I start to think maybe I could make money on something like this, I remind myself that much smarter and more experienced people are trying to make money on me thinking I can make money, and gambling has a small negative expected return. Better to stick to the stock market, where much smarter and more experienced people are trying to make money on me, but at least there is a small positive expected returns and pretty strict rules that are more or less fairly enforced.
nuclear-powered data centers on Earth, solar-powered data centers in space
This might be a bit of a rambling post. I’m thinking about data centers and energy. First of all, we have a sudden boom in energy demand caused by AI, and the fossil fuel industry is not able to meet it. The amount of energy fossil fuels can supply us may have peaked in a physical sense, in an economic sense, and an environmental sense (i.e., finally seeping into the thick skulls of public perception that the long-term environmental damage is more than we can accept). And that supply is not close to the demand. I think this would be true even without the supply disruption caused by the insane, illegal, unprovoked U.S. war of aggression in Iran. But that is just one more nail in the fossil fuel coffin. I think the long-term political grip of the fossil fuel industry on our global civilization may be coming to a close. We don’t have to stop using fossil fuels for this to happen, in my view, we may need only to continue using about the same amount of fossil fuels we are now as demand continues to grow and be met by other types of supply.
Sure, we can turn to renewables to meet a portion of this new demand. Cost-efficiency of solar, wind power, and batteries is increasing exponentially, which is another nail in the coffin of fossil fuels. For that know-it-all uncle at the Thanksgiving table (a fictional character, at least in my extended family where all my uncles are quite nice) who talks about renewables “not providing a baseload”, cheap abundant batteries seem to be an answer. But solar and wind both put demands on our physical environment. I was wondering why we can’t put data centers in high rises. Part of that answer seems to be that cooling is very difficult in a high rise – when you see those pictures of the huge sprawling data centers in the suburbs, the roof of that massive building is devoted largely to cooling technology. I also wondered why those roofs aren’t covered in solar panels, and from a little research (Gemini, not independently fact checked) this need for surface area for cooling also seems to explain that. Developers first redevelop underused industrial and commercial properties until they reach the limits of that (which seems somewhat okay, other than creating dead zones in the urban landscape where jobs and stores used to be. But you don’t care, because you are entertained by your mixed-reality glasses while your autonomous electric vehicle transports you through this industrial hellscape between your home, stores and job, or whatever physical places you still need/want to go. You better get your ass on a treadmill at least part of the day though. Then again, drugs that at least partially offset the risks of not exercising also seem to be a growth industry.). And then, they start buying prime farmland and clearcutting forests. In fact, it seems that if a data center wants solar energy, what they will often do, once they have developed the property for the data center itself, is buy up an even larger parcel of prime farmland somewhere nearby for a large solar farm. There is a certain irony to fossil fuels in that by burning plants that grew 100 million years ago, we drastically reduced the amount of land needed to grow food for literal horse-power. Land become an almost negligible factor of production, and now it is becoming more important again as we push up against an energy supply ceiling. So even though the economics of renewables this may work out, there are physical, environmental, and political limits to how far it is all likely to go, and it may not be enough to meet demand. (When I say the economics work out, I assume the companies developing the land, and the politicians giving it to them in hopes of receiving a stream of tax revenue in return, do not pay the environmental costs in dollars. Which is the American/Suburban way.)
Now to nuclear power. The small modular reactor technology seems like a potential solution to the data center power demand problem. And not just the data center problem, but with abundant cost-efficient electricity we can finally electrify transportation, grow large amounts of food under lights, and desalinate large amounts of saltwater, potentially raising a number of physical capacity limits holding back our current fossil-fuel-supply-limited civilization. Is the supply of nuclear fuel for these new reactors going to be a problem? Apparently the Trump administration has taken a step that has been taboo since the inception of nuclear power, which is to give plutonium from decommissioned nuclear weapons to the private companies developing this technology (note the post I am linking to here, while an interesting read, goes in some directions I do not necessarily condone). This makes a certain amount of sense to me. It also raises a number of long-term proliferation, terrorism, and accident risks that need to be carefully managed, and the reckless dummies in the Trump administration are certainly not the organization to manage what they are unleashing.
If land itself turns out to be limiting, there is the data centers in space possibility. Like a lot of people maybe, I have been picturing those giant suburban data centers in space, and it seems somewhat daunting to get them up there. But here is a post (again, these are kind of interesting but junky opinion posts, not professional journalism. Go ahead and say it – not unlike the one you are reading right now!) saying we should think in terms of a smaller rack of computers being loaded on to a large number of satellites, all solar powered and communicating with each other by lasers. In other words, Starlink, brought to us by Elon “Hugo Drax” Musk. Recall that in Moonraker the movie, Hugo Drax terrorizes humanity from space, while in Moonraker the book he does what evil villains always do, and just hijacks some nuclear weapons and holds humanity for ransom. After Covid-/Biden-/Trump-flation, I would suggest at least ONE TRILLION DOLLARS. Or perhaps bitcoins.
productivity in homebuilding
This is a new entry in the blog Construction Physics‘s series on construction productivity. They argue that one reason it is hard to achieve economies of scale in manufactured housing is that there is a relatively small transformation from the raw materials to the finished product. And then transportation costs are high. This contrasts with an industry like oil refining, chemicals, or electronics where the opposite is generally true. I would have thought part of the answer would be that there is still a significant amount of site work required to install the manufactured housing – clearing the site, pouring the foundation, extending and hooking utilities and driving/parking areas, etc. But they don’t talk about any of this.
They talk a little bit about robots, and say the factories still tend to be relatively small scale and do not use robots as intensively as electronics or car manufacturing. One would think there would be potential gains in this area. But then again, if you are limited by the size of a shipping container, the more assembly of the parts you do in the factory, the harder the finished product will be to transport, and vice versa. So at some point, you need to figure out how to ship the pieces efficiently and assemble them onsite. And we don’t seem to have robots operating much in complex outdoor conditions yet. I assume that will eventually change.
The article also seems surprised that large homebuilders do not have much higher profit margins than smaller ones. But I suspect part of the answer there is that the smaller operators are much more lax on labor, safety, and environmental requirements. I also wonder if larger commercial/industrial/heavy construction companies might be realizing more gains from better scheduling, sequencing, and risk management using computerized systems/AI. Then there is inspecting progress and comparing what you are actually building to the plan in closer to real time, when issues are easier to correct than when the project is largely finished. Drones and even just AI processing large amount of camera footage should be able to help with this. Streamlining administrative processes like accounting and legal paperwork would seem to be another area where efficiency gains might be possible.
redistributing the wealth from AI productivity gains
Urbanomics blog has a summary of ideas for redistributing the (potential? expected?) wealth gained from AI, rather than letting it all flow to already deep-pocketed corporations and investors.
- “Clever tax reforms, such as levies on corporate profits that are above a normal return on capital, on land and on natural resources”
- inheritance taxes
- “public wage insurance” (I think we like to call this “unemployment insurance” in the US? although “public wage insurance” sounds like a more neutral term implying a random event rather than blaming the victim)
- “active labor market policies”, with Denmark as an example. This appears to combine unemployment payments with assistance on training and job searching.
- “partial nationalization of AI firms”
- “citizens’ dividend from AI businesses”
- “giving citizens shares in AI companies”
The article makes the point that there is no real economic difference between tax policy and public ownership of the private sector. In the US at least, there is obviously a massive political difference. Entrenched wealthy and powerful interests are going to fight tooth and nail against any new taxes, even though something as simple and proven worldwide as a small value added tax would make enormous sense. That would soak up part of those windfall profits in proportion to how well the companies are doing. You could redirect the proceeds by beefing up unemployment and disability insurance, while incentivizing education and retraining (but I would let the private sector handle that last, as the government is notoriously bad at it). Going a step further, you could give people benefits and subsidize jobs in housing, childcare, education, and health care. You could invest in public infrastructure, (non-military) research and development, all of which create jobs and provide a positive return. This is all assuming you don’t want to just hand people money and let them decide if they want to do something productive or enjoy more leisure time (we could just expand the successful program we already have and call this Social Security for All) – we seem to have moral issues with this in the US. A VAT that kicked in only when the economy or productivity growth exceeds a certain threshold would actually be pretty painless. The wealthy and powerful are actually smart enough to understand this, and so they create disingenuous anti-tax propaganda and buy off politicians to make sure we can’t have these nice things.
So if all those rational and relatively painless policies I just mentioned are politically impossible in the US, at least unless economic growth actually accelerates enough to change that conversation, we can turn to “ownership society” type tricks. Redirect any surplus tax revenue (let’s assume there will be some if there is an acceleration in economic growth, even without any shift to more efficient or fair tax policy) to baby bonds and/or individual retirement accounts. Match with shares in index funds, effectively creating a sovereign wealth fund carved into a hundred million little accounts with individual citizens’ names on them. This may work out to the exact same thing mathematically as a VAT and income redistribution scheme. The finance industry would find a way to fleece people in fees and extras of course – this is morally reprehensible when the equivalent government-run program would not do this, and yet if this is the price of buying off the wealthy and powerful to make the policies politically possible, then it may be the best way forward that works within the existing system.