Monday, February 14, 2011

Robotics and Economics

Ninety years ago, the Czech journalist and author Karel Capek introduced the word "Robot" to the world in his play, "R.U.R. (Rossum's Universal Robots)." Isaac Asimov expanded the concept in his I, Robot books.

A staple of science fiction of the forties and fifties was the question of how society might cope with the circumstance created if robots with a wide range of capabilities were to replace humans in routine or even challenging jobs (as did HAL in "2001, Space Odyssey").

We are now there. We get our money from robots (ATM's), we send robots in to fight fires where no human could survive, we use robots to do surgery, dispatch software robots to search the internet, and even use robots to fight our wars.

This is just the beginning.

This Wednesday, IBM will pit its artificial intelligence system named Watson against two of the world's best Jeopardy players. Experts expect that Watson will win the contest. If so, it would be a demonstration of the amazing progress in artificial intelligence. To succeed, Watson will have to deal with puns, homonyms, and contextual ambiguities. (Update as of Tuesday morning: The first round of Jeopardy ended with Watson in a tie for the lead. Stay tuned.)

A different but also successful approach to use of computers to assist human intelligence is known as Intelligence Augmentation (IA). Google searches are a successful implementation of IA.

Economists have always held that increased automation creates as many new jobs as it destroys. That may no longer be the case (if ever it was). For the past few recessions, we seem to have had a "jobless recovery."

The usual suspect for loss of jobs is offshore outsourcing. It may be that another factor is increasing use of computers to perform tasks formerly done by humans. An additional influence is that high speed broad band internet makes it possible to transmit any information that can be digitized to offshore sites for processing. This is already done for widely diverse fields including accounting, law and radiology. Combining offshore outsourcing, robotics and high speed internet could be creating a perfect storm of economic restructuring.

The volume of such outsourcing is said to be small compared to the economy as a whole, but it probably already influences salaries by establishing marginal salaries above which companies will seek offshore solutions, thus keeping labor rates down.

Possible consequences include the fact that twenty-six percent of recent college graduates not going on to postgraduate education are unemployed. For that matter, many of those pursuing graduate degrees may be doing so because they couldn't find a job.

Saturday, February 12, 2011

Fork in the Road

"When you come to a fork in the road, take it."
-Attributed to Yogi Berra

We at the height are ready to decline.
There is a tide in the affairs of men
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.
-Brutus speaking in Shakespeare, Julius Caesar (IV.ii.269–276)

Today's New York Times reports that the Obama administration had an internal struggle over how to respond to events in Egypt. Should they emphasize the need for an orderly transition (thus appearing to prop up an increasingly reviled dictator), openly push Mubarak out the door, or support the demonstrators by emphasizing the need for democratic reforms and for Egyptians to find their own solutions.

As always, the cautious old foreign policy hands emphasize stability. Don't rock the boat. Give him time. Orderly transition. Democracy is hard.

The problem is, the tide was already running. We were at the fork in the road. We had to "take the current when it serves" the cause of democracy.

There are always risks in international affairs. But when the tide is running, we have to navigate between Scylla and Charybdis. Jumping overboard is not an option. Even if the rudder is smaller than we wish and the wind is fickle.

Twenty-one years ago, a series of events similar to the past three weeks led to the dismantling of the Berlin Wall. Old hands (I was one) worried that German reunification might be bad for the rest of Europe and NATO. It could destabilize Europe. Despite decades of lip service to German reunification, the dirty secret is that none of NATO's member states wanted it to actually happen. But it soon became apparent it was impossible to prevent. Best get on with it.

In a similar vein, in the long run we're better off with Mubarak gone.

Do we believe in democracy or not? If we do, then let's support it wholeheartedly.

Be not afraid.

Friday, February 11, 2011

Egyptians: Not Subjects, but Sovereign

Today Egyptians took control of their own country.

This is as big as the day the Berlin Wall fell. A day to celebrate!

Tomorrow the work begins.

Thursday, February 10, 2011

The Price of Civilization

An anonymous reader commented on my report on Pamlico County Economic Development as follows: "Just remember that government grants are other peoples taxes and they represent the forced redistribution of wealth."

I do.

I also remember Justice Oliver Wendell Holmes, Jr.'s comment that "Taxes are the price we pay for civilization."

Contrary to popular opinion, wealth is not just an individual creation. It is also a creation of society. Those who would create wealth need social goods such as: roads, harbors, monetary system, collective defense, police, educated employees, banking, transportation, communications, protection for intellectual property, standard measurements, a level playing field (law and regulation), assistance in navigating through legal and regulatory requirements, and on and on. In short, they need the activities of government. These activities are funded through taxes. Tax collection is always coercive.

Our Revolutionary War forebears decried taxation without representation, not taxes in general. In fact, they had been governing themselves and collecting taxes for their own government activities for a century and a half before the Revolution.

There are those who believe the only proper functions of government are defense and public safety. The rest can be handled by the magic of the marketplace. Alexander Hamilton and George Washington (among others) knew better.

In the present case, the issue facing Pamlico County is whether modest support for a project to meet an important national military requirement, expand economic activity in the county and employ up to 1,000 of our citizens is a proper public purpose.

It is.

Egypt - the Abyss?

This afternoon we saw and listened to President Mubarak of Egypt talking down to the demonstrators as though they were children.

This is clearly not the case. Whatever happens in Egypt in the short run, Mubarak has the look of being on his last legs.

The times aren't favorable to dictators. The crowds gathering in the square in Cairo were reminiscent of the Orange Revolution in Ukraine, the Velvet Revolution in Prague, the Rose Revolution in the former Soviet Republic of Georgia, the Solidarity uprisings in Poland, the Serbian ouster of Milosevich, the Green Revolution in Iran and countless other democratic movements of recent years, both successful and unsuccessful.

Winston Churchill once observed, "Democracy is the worst form of government, except for all those other forms that have been tried from time to time." (from a House of Commons speech on Nov. 11, 1947) Mubarak has demonstrated to all and sundry the inherent weakness of authoritarian governments: there is no mechanism for making orderly adjustments to changed circumstances.

Egypt has changed greatly in the past thirty years. The government hasn't.

Whether they win this time or not, the demonstrators are right.


Tuesday, February 8, 2011

Pamlico County Economic Development

Last night the Pamlico County Board of Commissioners approved by a narrow 4-3 vote a request by the county's Economic Developer, Jayne Robb, to apply for a flex grant in the amount of $13,900. The grant would not cost the County a dime. The purpose is to fund a feasibility study to determine the suitability of certain land in the county for an algae-based biofuels production facility. The land in question is not suitable for other uses. The proposed project is envisioned to produce up to 80,000 gallons per day of diesel and jet fuel, and to provide employment for up to 1,000 persons.

The first public hint of the project was provided last month in the report to the commissioners of current activities of the Military Growth Task Force. Not explained in detail at either session was why the Military Growth Task Force would be interested.

In October of 2009, Secretary of the Navy Ray Mabus committed the Department of the Navy (which includes the Marine Corps) to energy reform. A major goal is to aggressively reduce the Navy Department's reliance on fossil fuels. Marines deployed to Afghanistan are already using alternate energy sources, including solar. Here is the Secretary's strategic approach to energy:
http://www.onr.navy.mil/naval-energy-forum/~/media /5EFD428CFEB0412391CC321DCAF67138.ashx

One of the first measures the Secretary of the Navy took to put the policy in effect was to conclude a memorandum of understanding with the Secretary of Agriculture:
http://www.navy.mil/search/display.asp?story_id=50710

The use of algae to produce fuel has the following advantages:
a. It can use land not suitable for agriculture;
b. Does not affect fresh water resources;
c. Can be produced using ocean or brackish water or wastewater (BRMSD take note);
d. Algae are biodegradable and relatively harmless if spilled;
e. Can yield 10 to 100 times more energy per unit area than other biofuels;
f. USDOE estimates enough algal fuel to replace all petroleum fuel can be generated using less than 1/7 of the area currently planted in corn;
g. No net generation of carbon dioxide.

Here is a Scientific American article explaining some of the issues and possibilities:
http://www.scientificamerican.com/article.cfm?id=algae-biofuel-of-future

Why Pamlico County? One measure the Navy and Marine Corps are taking is to identify as many local sources as possible for everything they need, including fuel. This not only reduces transportation cost in general, it reduces the use of fossil fuels. Using a local source of algal fuel for jets would therefore kill two birds with one stone.

The projected output is modest compared to petroleum refineries. It would take about 25 similar algal oil production facilities to equal the fuel output of a small refinery. Even so, the facility would provide enough fuel every day to support 80 sorties of fully-loaded combat fighters. That would make a big dent in Cherry Point's fossil fuel usage.

This is a project that deserves our support.

Saturday, February 5, 2011

Remember the Soviet Union?

In the past few days there have been a number of comments criticizing our intelligence community for not predicting the events in Tunisia and Egypt.

The criticism is unfair. As Yogi Berra once said, "it's difficult to make predictions, especially about the future."

More to the point, we have excellent technical means to collect some kinds of intelligence, but we lack a mind reading capability. Even if we had a machine to read minds, it would be of doubtful use against people who have not yet decided what to do.

There is also a fundamental, unresolved conflict between the intelligence community and decision makers. The conflict: who gets to evaluate the intelligence?

The arrangement: policymakers get to evaluate intelligence. They are the consumers. They get to tell intelligence professionals what to look for (collection requirements). The professionals are producers. Because there is so much raw information, professionals have a role in selecting and editing what they present to decision-makers, but evaluation is in the final analysis done by those responsible for plans and policy.

This became a problem in December, 1941, when the Navy's Director of Plans and Policy, RADM Richmond Kelly Turner, overruled the Director of Naval Intelligence over what information to provide to the Fleet Commander at Pearl Harbor, RADM Husband E. Kimmel.

After the attack, Kimmel was fired and Turner was promoted.

The world isn't always fair.

Since then, the list of "intelligence failures" is a long one. One of the largest was the failure to anticipate the demise of the Soviet Union.

No heads rolled.

On Bearing Arms

Yesterday's New York Times entry in its "Disunion" series looking at events 150 years ago leading to the Civil War is based on diary entries by a Virginia slave owning farmer, Daniel W. Cobb.

Cobb, a barely literate secessionist, seems to have had misgivings about what was to come. Though he supported secession, one of his main concerns was personal: “I am with in a fiew months of 50 Years of age, they cant make me Bare [sic] armes.”

In 1861, this barely literate Virginia farmer clearly understood what present day elected officials and Supreme Court justices have forgotten: soldiers bear arms, not civilians.