Economics

The Reconn Reader: 1 February, 2020

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

Why Britain Brexited

It is this Brexit story that underpins Britain’s exit from the EU—the story of a country that voted to buck the post-war order and “take back control,” but has little idea whether that is even possible anymore, or indeed, whether it had ever lost control in the first place. It is also a story that does not begin or end at 11 p.m. tomorrow, the formal point of rupture, but one that started decades ago and will likely last decades longer. (The Atlantic)

Human Trafficking Helps Terrorists Earn Money and Strategic Advantage

Beyond emboldening terrorist groups and bankrolling criminal activity, human trafficking also supports abusive regimes. Some repressive governments traffic their own citizens and compel them to labor in harsh conditions in order to bolster the economy or suppress dissent. The U.S. State Department estimates that the North Korean government, for example, has close to 100,000 forced laborers working abroad, mainly in China and Russia, often in harsh conditions. By taxing those overseas workers, the regime has generated more than $500 million annually, thereby helping it mitigate the effects of economic sanctions. (Foreign Policy)

Venezuela’s Problem Isn’t Socialism

But also like all good propaganda, the charge obscures more than it reveals. The deeper driver of Venezuela’s implosion isn’t Maduro’s doctrinaire adherence to socialism but, rather, the country’s slide into kleptocracy. To focus on Venezuela as a failure of socialism is to miss the real story: the collapse of the Venezuelan state and the takeover of its resources by a confederation of ruthless criminals from both inside and outside the country. (Foreign Affairs)

Coronavirus Eclipses Trade as Global Economy’s Biggest Threat

Hong Kong, already reeling from months of often violent anti-China protests, is the most exposed, with a probable hit of 1.7 percentage points to growth in the first quarter, the economists wrote. South Korea and Vietnam will also suffer, as will Japan, which is scheduled to host the Olympic Games in Tokyo this summer. Commodity exporters such as Australia and Brazil will also suffer. Big Western economies, with the exception of Germany, face less of a blow because of their smaller export exposure. (Bloomberg)

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Business & Economics

Why Microsoft and Tesla are the decade’s big disrupters

In an interview, Alex Zhu, the head of the Chinese video app TikTok, defends the company against accusations of spying and censorship and explains why he isn’t interested in making the platform a place for political debate. (Der Spiegel)

Business automation in investment banking: fast forward…. or not?

We are going to look at this proposition in the context of one sample sector – covering investment banking, asset and wealth management. We could have chosen any part of the more mature banking, financial services and insurance sectors. These have made 52% of the total investment in business automation, starting at least four years ago. The analysis suggests that many business managers are anticipating a future in two or three years’ time that is, in many respects, in fact already here, if they could only identify and seize the opportunities. (LSE)

Everyone now believes that private markets are better than public ones

Yet every investment craze is liable to overreach, blindness to risk and misallocated capital. Recent converts to the private world, dazzled by the historical returns, may not fully appreciate the hazards. The capital washing into San Francisco’s venture-capital industry has bloated both the value of pre-ipo companies and the egos of founder-managers. The big concern is that a shift from public to private capital merely swaps one set of agency conflicts (shareholders v company managers) for another (shareholders v private-asset managers). (The Economist)

How the ‘Facebook cooperative’ could point the way for the network economy

To ensure that there is proper competition among service providers, i.e. the operators of platforms organised as cooperatives, and that no monopolies or cartels are created that could then put up their fees and/or reduce dividend payouts by the cooperative, the legal framework must ensure connectivity between platforms. Not only can personal profiles and data be transferred to another provider at the click of a mouse (they are private property), but members themselves can connect with each other. In concrete terms, what that means is that anyone who is on Facebook can see what Xing or Twitter members who are connected to him are posting and vice versa, provided that this is by mutual consent. (Vox EU)

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Science & Technology

The race to decipher how climate change influenced Australia’s record fires

If attribution studies can quantify the role of climate change in particular extreme events, scientists can better forecast the chances that the catastrophes will strike again. Such information is vital for emergency-response managers as they prepare for a warmer Earth. Firefighters in many countries have noticed, for instance, that big blazes are getting hotter and more dangerous, so modelling studies of future risks would help them train for and respond to the conflagrations to come. (Nature)

The Secret History of Facial Recognition

But early in his career, Woody had been consumed with an attempt to give machines one particular, relatively unsung, but dangerously powerful human capacity: the ability to recognize faces. Lance knew that his father’s work in this area—the earliest research on facial-­recognition technology—had attracted the interest of the US government’s most secretive agencies. Woody’s chief funders, in fact, seem to have been front companies for the CIA. Had Lance just incinerated the evidence of Washington’s first efforts to identify individual people on a mass, automated scale? (WIRED)

What’s Wrong with Physics

 I suppose it is a form of the law of diminishing returns. The big breakthroughs that fundamentally change our understanding come from the people who follow their own path even when everyone else is running in the other direction.  Unfortunately, physics like other academic fields usually doesn’t give much support to those who don’t want to play follow the leader.  (Scientific American)

Kobe’s crash reminded me of this dinner conversation, shared among a table of expert pilots steeped in the culture of risk management. I must say I didn’t appreciate how challenging flying these machines can be. I told a story about landing on the lawn of the Le Beauvallon hotel in Saint-Tropez, last year, in a narrow opening between towering trees. My 22-year-old pilot confided that the approach terrified him because he had no room to move laterally if he was caught in a downdraft. A lot of solemn nodding around the table. At one point Elan Head, a freelance author and helo pilot who was sitting next to me, mentioned that she had lost five friends in five separate accidents. That rocked me. (WSJ)

Culture & History

Classical Music Has a ‘God Status’ Problem

To be serious about becoming a professional classical musician is, in other words, to be completely dedicated to honing one’s craft. And in an industry where women hold just 31 percent of the seats in major orchestras and were found to have composed just 1.8 percent of the music that major American orchestras performed in the 2014–15 season, anything that throws a music student off her game, even temporarily, has the potential to derail a career. (The Atlantic)

Why an internet that never forgets is especially bad for young people

Consider, for example, the young woman known on Twitter as @NaomiH. In August 2018, excited by news that she had scored a coveted internship at NASA, Naomi went online and tweeted, “EVERYONE SHUT THE F— UP. I GOT ACCEPTED FOR A NASA INTERNSHIP.” When a friend retweeted the post using the NASA hashtag, a former NASA engineer discovered it and commented on Naomi’s vulgar language. NASA eventually canceled her internship. (MIT Tech Review)

‘Islamic Empires’ Review: Revisiting a Glorious Past

Mr. Marozzi gives us a tale of 15 cities, one for each century in a count that begins with the seventh and ends in the 21st. The first city is Mecca—“the Mother of All Cities”—and his list includes Damascus, Baghdad, Córdoba, Jerusalem, Cairo, Constantinople and Kabul, as well as Samarkand in present-day Uzbekistan and Isfahan in Iran, all capitals of successive Islamic empires. Contrasting these imperial boom-towns at their zenith with the benighted condition of many Muslim cities today, Mr. Marozzi writes that they “represented an exhilarating combination of military might, artistic grandeur, commercial power and spiritual sanctity.” (WSJ)

As Mr Wasson recounts, 1974 was a golden year for Hollywood. Paramount received a staggering 43 nominations for the Academy Awards, including 11 for “Chinatown” (although only Mr Towne took home an Oscar) and a best-picture award for “The Godfather Part II”. But in retrospect, this was the end of a cinematic heyday. More and more, the industry became commercially minded as film budgets swelled to pay for rising promotional costs and rocketing salaries. For its creators, too, “Chinatown” was a farewell. Evans soon lost his career and reputation to cocaine; Mr Polanski fled the consequences of his own crimes against a teenage girl. (The Economist)

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