Economics Society Technology

The Reconn Reader: Mar 9, 2019

Each week, I share some of the most interesting articles I’ve come across in the past seven days. Here is this week’s selection. Inclusion does not mean endorsement. -CA


World & Politics

Worryingly Troubled Organisation: why the WTO is in serious peril

The grim prospects of what trading with the EU on WTO terms alone would mean was spelt out by a recent government estimate: an 8 per cent loss of GDP in 15 years’ time, compared with the trajectory if the country remained in the EU after all. In a December speech delivered in Washington, Alan Wolff, one of the WTO’s deputy director-generals, confessed that he found these prospective costs “disquieting, from the viewpoint of what it says about the multilateral trading system.” But he did not dismiss them. Even the WTO itself, then, seems to harbour doubts about how much fall-back protection it can really offer for a major economy leaving an integrated regional bloc.(Prospect)

Germany may pretend otherwise but it has reasons to fear a Europe without Britain

So there is a certain irony in a Brexit fuelled by migration when the Germans have done their utmost to quell that fear. The other exotic feature of Brexit for Germans is the nature of the elite warfare in Britain – something that seldom happens in the cloistered rooms of German politics, where consensus rules. In part this is because Germany’s ruling class was pulverised in the Second World War and the survivors never garnered much political allegiance. There is almost no equivalent of the Old Etonian, and leaders are drawn from haphazard backgrounds: Gerhard Schröder was the son of a cleaning woman, Merkel the daughter of a pastor. As one character says in A Small Town: “In Germany they’re all middle class.” (New Statesman)

Here are my Brexit regrets. What are yours?

2) Paying too little attention to the complexities of world trade. A government minister (not Liam Fox) likes to tell me that “bureaucrats and trade nerds love trade deals, but business just gets on with it” and I know what he means. But still, the architecture of global trade and its rules-based order is something Brexiteers paid insufficient attention to. We’re getting an education now. (Reaction)


Business & Economics

High-Tax States Make It Hard for the Rich to Leave

“We met, and we opened the door, we looked at each other, we just knew it was us again,” she testified. She divorced her husband. Patrick turned his life upside down, too. Previously a workaholic who rarely vacationed, he took long trips with Clara, learned scuba diving and climbed Mount Kilimanjaro, according to the ruling. By 2009, they were married. Patrick retired early from Colgate, missing out on a large pay package, and moved in with Clara and her teenage son in a $3.2-million Paris apartment with a view of the Eiffel Tower. He returned to New York frequently for medical treatments, but the Division of Tax Appeals didn’t harp on that. It was clear, the administrative law judge held, that Patrick, now 69, had sufficiently changed his lifestyle to prove he had left for good. So New York let him go. (Bloomberg)

The Servant Economy

It’s not hard to look around the world and see all those zeroes of capital going into dog-walking companies and wonder: Is this really the best and highest use of the Silicon Valley innovation ecosystem? In the 10 years since Uber launched, phones haven’t changed all that much. The world’s most dominant social network became Facebook in 2009, and in 2019, it is still Facebook. Google is still Google, even if it is called Alphabet.(The Atlantic)

iPhones cost US$800, I was offered a job at Foxconn to assemble them for US$1.7 per hour, 40 hours per week

I was told I would be assigned a dormitory later that day. As a Foxconn migrant worker, this would be my home. If I wanted to earn more money, I could work on a temporary contract through a recruitment agency, the recruiters said. That way, they said, I wouldn’t have to pay tax and mandatory social insurance fees. “Deal”, I said. “We are desperate for workers, we have to recruit 50,000 workers within two months,” one of the recruiters told me. (Bloomberg)



Science & Technology

Can machines create?

This interactive aspect is crucial for discussions of “creative” AI. Du Sautoy recounts examples of critics instantly (and anxiously) devaluing their assessments once they learn that a “work of art” was created by an algorithm. It seems to be a fairly universal response, and can’t be dismissed as mere snobbery. Lennox Mackenzie, the LSO’s chairman when the orchestra performed the works of Iamus, confessed that “my normal inclination is to delve into music and find out what it’s all about. But here I don’t think I’d find anything.” We find it harder to take pleasure in a creation devoid of human context or intention—but that of course is contingent knowledge.(Prospect)

Tackling Europe’s gap in digital and AI

Europe may achieve a significant productivity boost through AI, without sacrificing employment in the long term. Throughout history, technology has eliminated some types of jobs, but it also always created new ones. It is impossible to predict with any precision all of the jobs that are likely to be created through AI, but we contend that in the EU-28, on average, AI could enable the creation of as many new jobs as jobs that are changed, especially if Europe develops innovative new products and new demand. More innovation, fluidity in job reallocation, and internalization of AI gains (mostly by taking major positions in the AI supply chain) within Europe is likely to determine the fate of job development in the region. Powerful development of AI may be the best hedge and may even be the catalyst for new jobs in Europe in the future. (McKinsey)

Quantum Monism Could Save the Soul of Physics

Decoherence is the agent of classicality: It describes the loss of quantum properties when a quantum system interacts with its surroundings. Decoherence acts if it would open a zipper between quantum physics’ parallel realities. From the observer’s perspective, the universe and she herself seem to “split” into separated Everett branches. The observer observes a live cat or a dead cat but nothing in between. The world looks classical for her, while from a global perspective it is still quantum mechanical. In fact, in this view the entire universe is a quantum object. (Scientific American)


Culture & History

Fierce and shameless pursuit of self-interest dominate relationships of all sorts—familial, sexual, amicable, romantic, professional. Even the search for a lost dog provides multiple occasions for naked hostility, and the frozen indifference of the authorities to public responsibility is equalled by the aggressive indifference of neighbors to each other. Wei prepares for a street fight by stealing a club with which his father (formerly in some unspecified public function) used to beat detainees. Li gets hold of a gun that, eventually, will go off. Cell phones become intimate surveillance devices to be used for humiliation and extortion. (New York Times)

What Was the Happiest Day on the Internet This Decade?

Why You Always Lyin’ took over Twitter through the sheer force of its absurdity, and its usefulness as a retort to any variation of bullshit you might encounter online. We would soon enter a world where deception was the assumed posture of politiciansnews outlets, and the very platforms that we were using to accuse others of lyin’. We may never recenter on an agreed-upon objective truth again. But Fraser’s Vine—goofy, vulgar, and catchy as hell—will be the lighthouse that guides our ships through the long, factless night. (The Ringer)

It takes a village: career choices are influenced by society more than by upbringing

However, our work points also to gender norms in occupational choice. At the firm level, policy responses then involve more than just firm-level characteristics. Assuming, gender norms are socialised, downstream education policies which de-sex occupation choice, and firm level policies which put females in visible roles may change the gender norms that affect occupational choice. Next to this, our work underlines the importance of addressing the gender norms carried by males in society. Without this attention, the patterns observed in our study are unlikely to get fully eroded. (London School of Economics)

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