my path to pension reform

June 19th, 2019

My interest in pension reform began 19 years ago, in April of the year 2000. I was at an OECD conference in Prague, listening to presentations of two World Bank economists (Estelle James and Dimitri Vittas). At that moment, it suddenly dawned on me that an ideal pension system should provide basic pensions for everyone, funded pay-as-you-go from general government revenue, allowing citizens who desire more than basic income in retirement to save in any way they please, without subsidies, tax breaks or coercion from government. This was my ‘Eureka’ moment.

When it was my turn to speak, the very next day, I spoke with excitement and enthusiasm. The conference was on private pensions, so the audience did not react warmly to my talk. Nonetheless, I presented my core ideas orally, and drafted a discussion paper (“Three Pillars of Pensions?”) immediately after the conference. Read the rest of this entry »

artificial intelligence and human stupidity

June 12th, 2019

I am continuing to slowly read this wonderful book, and will occasionally point out parts that particularly interest me. Here is one such part.

The danger is that if we invest too much in developing AI and too little in developing human consciousness, the very sophisticated artificial intelligence of computers might only serve to empower the natural stupidity of humans. We are unlikely to face a robot rebellion in the coming decades, but we might have to deal with hordes of bots that know how to press our emotional buttons …, and use this uncanny ability to try to sell us something–be it a car, a politician, or an entire ideology. …. We have already been given a foretaste of this in recent elections and referendums across the world, when hackers learned how to manipulate individual voters by analyzing data about them and exploiting their existing prejudices.

Yuval Noah Harari, 21 Lessons for the 21st Century (Penguin, 2018), pp. 70-71.

democracy, dictatorship and AI

June 9th, 2019

Israeli historian Yuval Noah Harari’s new book is fascinating, so fascinating, in fact, that I am reading it at a slow pace. There is simply too much to think about. Here is an example, from chapter 3, “Liberty”, subtitled “Big Data is Watching You”.

In the late twentieth century democracies usually outperformed dictatorships because democracies were better at data processing. A democracy diffuses the power to process information and make decisions among many people and institutions, whereas a dictatorship concentrates information and power in one place. Given twentieth century technology, it was inefficient to concentrate too much power and information in one place. ….This is part of the reason the Soviet Union made far worse decisions than the United States, and why the Soviet economy lagged far behind the American economy.

However, soon AI [artificial intelligence] might swing the pendulum in the opposite direction. …. The main handicap of authoritarian regimes in the twentieth century–the attempt to concentrate all information in one place–might become their decisive advantage in the twenty-first century.

Yuval Noah Harari. 21 Lessons for the 21st Century (Penguin, 2018), p 66.

war and human stupidity

June 4th, 2019

Israeli historian Yuval Noah Harari (born 1976) teaches at the Hebrew University of Jerusalem. He has authored two international bestsellers: Sapiens: A Brief History of Humankind (2014) and Homo Deus: A Brief History of Tomorrow (2016). His latest book, which I just borrowed from the Victoria Public Library, is titled 21 Lessons for the 21st Century (2018). Of  its 21 chapters, I began with the 11th – “War” – because I am a convinced pacifist, so wanted to see what this famous historian had to say on the subject. I was fascinated, so decided to write a TdJ blog before reading the rest of the book.

Sapiens covers the past, Homo Deus the future, and 21 Lessons for the 21st Century the present. Is there anything left for another book of Harari?

Read the rest of this entry »

the 3.5% rule

May 30th, 2019

In a 2013 TED talk, Harvard political scientist Erica Chenoweth (born 1980) focused on what she calls a “3.5% rule”— “the notion that no government can withstand a challenge of 3.5% of its population without either accommodating the movement or (in extreme cases) disintegrating”.

“Researchers used to say that no government could survive if five percent of its population mobilized against it. But our data reveal that the threshold is probably lower. In fact, no campaigns failed once they’d achieved the active and sustained participation of just 3.5% of the population—and lots of them succeeded with far less than that. Every single campaign that did surpass that 3.5% threshold was a nonviolent one.” Read the rest of this entry »

internal migration in China

May 6th, 2019

I just finished reading a delightful book written by Chinese journalist Karoline Kan. Her work is autobiographical, and more, since she writes also about the lives of a cousin, her parents, grandparents and great-uncle. The 300-page book is very readable, and, at the same time, very informative. I recommend it highly. Among other things, I learned that government control of internal migration began centuries ago, long before the Communist government came to power.

Here is a portion of the book that explains the migration controls. In her memoir, Ms Kan goes on to explain the effect these controls had on her, and on the lives of her parents and grandparents. Read the rest of this entry »

collaboration is important

May 4th, 2019

Sixty years ago the British scientist and novelist C.P. Snow (1905-1980) delivered his famous lecture The Two Cultures and the Scientific Revolution, published later the same year in book form. FT columnist Tim Harford celebrates the occasion this week in a column that reminds me that IIASA, the Austrian research institute with which I have been associated since my retirement from the UN in 2004, provides a meeting place for mathematicians, statisticians, social scientists -from sociologists to economists- and natural scientists -from biologists to physicists- to work together. This is an important public service, as Snow’s lecture and Harford’s column clearly show. Read the rest of this entry »

Adam Smith and basic needs

April 30th, 2019

Mark Twain is reputed to have said “A classic is something everybody wants to have read, but no one wants to read.” This is certainly true for the writings of dead economists. I recently saw an example in criticism of Adam Smith, the author of Wealth of Nations, first published in 1776. The economist, whom I will not cite, correctly wrote that the now-dead Adam Smith broke with the tradition of his day by explaining that it is consumption, not production or saving, that satisfies the wants of men and women.

But the contemporary economist went on to criticize Smith for not distinguishing between needs and wants, known also as necessities and luxuries. This distinction between types of consumption, he asserted, was done more than a century later, with the 1890 publication of Cambridge University economist Alfred Marshall’s Principles of Economics. This assertion is wrong. Alfred Marshall founded neo-classical economics, so is justly famous, but he was not the first to distinguish between necessary and luxury consumption. In the Wealth of Nations, Smith devotes considerable attention to this in a section titled “Consumable commodities are either necessaries or luxuries”: Read the rest of this entry »

classics as ‘other cultures’

April 8th, 2019
There are a lot of cultures very different from America [meaning the USA]. China was and is a civilization perhaps more distant from us than Rome.  And learning its language and culture is likely to be more instrumentally useful for most students in world where that nation is rising to challenge the United States in commerce and power.
John O. McGinnis, “How Classicists Undermine the Case for Classics“, Law & Liberty blog, 5 April 2019.
The author is Professor of Constitutional Law at Northwestern University. His book Accelerating Democracy was published by Princeton University Press in 2012.

schooling is not learning

April 2nd, 2019

Many years ago I came across a book reporting an evaluation of children who completed primary school (grade five) in Pakistan (or perhaps it was Bangladesh) compared to classmates who had dropped out of school in their first or second year. The results were very clear: there was no difference between the two groups. Many students were warming seats in the classroom, but were not learning anything. Actually, the dropouts managed to out-perform graduates in mathematics. Apparently it is important for street kids to learn math, so that they can make change when selling products. I don’t recall the name or author of the book, or even what country I was in. I only remember that I read it in a library, and was unable to borrow or copy it. Sadly, I did not take notes because I was not working in the field of education at the time. Some day, I hope to find the book to refresh my memory of it.

This introduction is to explain why I was excited to discover a World Bank working paper that examines schooling in terms of what is learned (examination scores) rather than years spent warming a classroom seat. The researchers assess the effect of spending on access to schooling and learning outcomes, using the World Bank’s new measure of outcomes, known as Learning-Adjusted Years of Schooling (LAYS). Previously, it was common to rely on years of schooling, with no attempt to measure what, if anything, might have been learned. Read the rest of this entry »