Kissinger on Artificial Intelligence

I am no fan of Henry Kissinger. One cannot be, after reading ‘The Blood Telegram’. But, his comments on Artificial Intelligence were very thoughtful. They were written in ‘The Atlantic’ three months ago. I do not know why I never got around to posting the extracts from that article here, although I had saved the extracts for posting as soon I had finished reading that piece. Today, when I read the well-written review of Yuval Harari’s latest book by Manu Joseph in MINT, I resolved to post it here today:

Inundated via social media with the opinions of multitudes, users are diverted from introspection; in truth many technophiles use the internet to avoid the solitude they dread. All of these pressures weaken the fortitude required to develop and sustain convictions that can be implemented only by traveling a lonely road, which is the essence of creativity. ….

………….  Before AI began to play Go, the game had varied, layered purposes: A player sought not only to win, but also to learn new strategies potentially applicable to other of life’s dimensions. For its part, by contrast, AI knows only one purpose: to win. It “learns” not conceptually but mathematically, by marginal adjustments to its algorithms. So in learning to win Go by playing it differently than humans do, AI has changed both the game’s nature and its impact. Does this single-minded insistence on prevailing characterize all AI?…

…….  Through all human history, civilizations have created ways to explain the world around them—in the Middle Ages, religion; in the Enlightenment, reason; in the 19th century, history; in the 20th century, ideology. The most difficult yet important question about the world into which we are headed is this: What will become of human consciousness if its own explanatory power is surpassed by AI, and societies are no longer able to interpret the world they inhabit in terms that are meaningful to them?

…………  Ultimately, the term artificial intelligence may be a misnomer. To be sure, these machines can solve complex, seemingly abstract problems that had previously yielded only to human cognition. But what they do uniquely is not thinking as heretofore conceived and experienced. Rather, it is unprecedented memorization and computation. Because of its inherent superiority in these fields, AI is likely to win any game assigned to it. But for our purposes as humans, the games are not only about winning; they are about thinking. By treating a mathematical process as if it were a thought process, and either trying to mimic that process ourselves or merely accepting the results, we are in danger of losing the capacity that has been the essence of human cognition….

….. the scientific world is impelled to explore the technical possibilities of its achievements, and the technological world is preoccupied with commercial vistas of fabulous scale. The incentive of both these worlds is to push the limits of discoveries rather than to comprehend them. [Link]

So, what did Manu Joseph write about Artificial Intelligence that triggered this post?

To draw our attention to the impending darkness, Harari mentions a chess contest that was held in December last year. One of the contenders was known to chess players around the world. Stockfish, believed to be the world’s most powerful chess engine, is a computer program that has been designed to analyse chess moves. No human has a chance to beat it. Stockfish played AlphaZero, Google’s machine-learning program. The two programs played a hundred games.

AlphaZero won 28, drew 72 and lost none. The programmers of AlphaZero had not taught it chess; it learned on its own—in 4 hours.

Google’s claim of “4 hours” is actually a bit dramatic and opaque.

Also, AlphaZero has been training through such powerful devices that we should not try to comprehend “4 hours” in human terms. Harari, despite being a historian, is not concerned with the nuances of it all. He wants us to be scared. All things considered, it still is extraordinary that AlphaZero could teach itself chess and become the best chess player in the universe known to us. Harari uses such events to point to the future when machines will do almost all human tasks.

It is fitting (in many ways) to end this post with a link to the article by Nicolas Carr published in 2008 on whether Google was making us stupid. Now, we know the answer or do we?

Employment creation in India

Apparently, Surjit Bhalla and his co-author (Tirthatanmoy Das) have put up a paper on the website of the Economic Advisory Council of the Government of India on job creation in India in 2017. They estimate it to be 22 million jobs. That seems to be on the high side. Commentators have their knives out to attack the estimates. The protagonists and the antagonists are politically motivated. I am yet to read their paper. But, I have seen two critiques. One by Professor R. Nagaraj and the other in Hindustan Times which was supposedly second of a five-part serial on Indian labour market.

Professor Nagaraj analyses the claims of Bhalla and Das in four dimensions. The third dimension is that of generating formal employment estimates from the data provided by the Employee Provident Funds Organisation (EPFO). Prof. Nagaraj’ critique is stale and wrong because of the work of Pulak Ghosh and Soumya Kanti Ghosh had taken them into consideration in coming up with their conservative estimates of formal job creation from EPFO data. They have excluded EPFO enrolment through amnesty. They have excluded those who were above 25 years of age. They have dropped those where even one contribution was missed. I have written about their work here and here. That Prof. Nagaraj rehashes the same critique is a reflection of both sloppiness and bias.

Key sentences in this piece tell me that the authors are offering opinion and not analysis. Pulak Ghosh & Soumya Kanti Ghosh’ estimates based on EPFO were conservative and passed the test of rigour. These authors, when discussing their work, say that Ghosh & Ghosh were criticised. They leave it at that. Criticised by whom? For what? and how rigorously? Were the criticisms correct and reasonable?

That throwaway line dilutes the seriousness with which one should take the entire piece although one cannot and does not rule out political and, otherwise,upward bias in the work of Bhalla +1.

The first part is here (can be safely skipped) and the third part is by Manish Sabharwal. Those who have not read Manish’s articles on Indian labour market before can find them all neatly recapitulated in that piece.

A Chinese company perspective on the trade war with America

Business Review and Outlook

10 years ago, the U.S. printed money like crazy and exported U.S. dollars all over the world. Now, the U.S. has become a global enemy, trying to bring back the exported U.S. dollars (the U.S. dollar debt of the emerging market in the first quarter was close to 3.7 trillion) and supply chains, as well as to undermine the asset markets of other countries and the global supply chain order. No wonder the U.S. has made a lot of enemies. Fortunately, Trump does not have the same wisdom as Mao Zedong in making alliance with one while fighting another. He wants to fight the world. But to defeat the U.S. hegemony is not an easy task. The history told us that those who wanted to kick out the big brother would run the risk of being wiped out. Nevertheless, Chinese are savvy and resourceful. Deng Xiaoping said, “we should grope our way across the river, going one step at a time”. Jiang Zemin said, “keep a low profile to make a big fortune”. Han Xin demonstrated his immense ability to endure humility in order to preserve his existence for future accomplishments. Such wisdoms contributed to the creation of incredible historical achievements one after the other.

Today, the U.S. is pushing the trade war to the limit. Yet, it is not easy to cripple the China model, even with Trump’s wisdom. With a looming war, there are risks as well as opportunities. Therefore, the Group’s established policies will remain unchanged. While some projects are delayed pending for the government’s new plan, the Group will always ensure that Shareholders’ benefits are well taken care of.

Source: Half-yearly interim report of the China Properties Group Ltd. (1838 HK) [Link]

The moral requirements of Nirmal Mulye

This story boggles the mind. The Chief Executive Officer is either Indian or of Indian origin. His comments are politically incorrect, at the minimum and wrong, at worst.

“The point here is the only other choice is the brand at the higher price. It is still a saving regardless of whether it is a big one or not,” said Mr Mulye.

Mr Mulye compared his decision to increase the price to an art dealer that sells “a painting for half a million dollars” and said he was in “this business to make money”.

He also defended the actions of Martin Shkreli, who became infamous in 2015 for his decision to raise the price of an Aids and cancer drug from $13.50 to $750 per tablet. Shkreli was jailed earlier this year on unrelated fraud charges.

“I agree with Martin Shkreli that when he raised the price of his drug he was within his rights because he had to reward his shareholders,” said Mr Mulye.

Mr Mulye pointed out that Shkreli was able to increase the price of Daraprim so dramatically because his company was the only one making it.

“If he’s the only one selling it then he can make as much money as he can,” said Mr Mulye. “This is a capitalist economy and if you can’t make money you can’t stay in business.”

He added: “We have to make money when we can. The price of iPhones goes up, the  price of cars goes up, hotel rooms are very expensive.” [Link]

I do not know whether he has learnt that the goal of capitalism was not rewarding shareholders at all times; that it is a construct of the 1980s, etc. Further, I wonder if he also knows that capitalist enterprises could survive only if they are also seen by the market as being fair players and not amoral players. Then, there is Karma, of course.

I wonder what Adam Smith would have made of him, had he been around.

Students of economics can debate the following questions:

  • Is market economy compassionate?
  • Or, is there no place for compassion in a market economy? Why not? Shouldn’t it be there?
  • Without compassion, can there be a society? Without society, can there be an economy? – market economy or non-market economy?
  • Further, is he right to come across as so callous and insensitive? He may score marks for honesty but is the CEO being  insensitive?
  • There is another angle: Intellectual Property Rights/Patents of Pharma companies. Should there be IP protection at all, in the first place? If so, for how long?

These are all the questions one can explore.

Amusing and priceless

This is the amusing stuff:

“Juncker vows to turn euro into reserve currency to rival US dollar”

He must pay close attention at least the topline results of the PEW Survey I had blogged on earlier.

A quick recap:

Underneath Mr. Macron’s pro-European rhetoric, the French people are only closely behind Italy in their distaste for the European project. Politicians do not command much trust. The public is confused and worried on immigration. Distrust of media is rather high as it is the case with financial institutions.

(2) This is priceless stuff:

“Aung San Suu Kyi defends verdict against Reuters journalists”

This underscores the ‘free lunch’ of being a ‘Liberal’ outside the government and how difficult it is to govern as a ‘Liberal’. Indeed, there is an inherent contradiction being in government and being Liberal.

Summer of discontent in China and Europe

Nikkei Asia Review had some excellent articles on Xi Jinping’s political troubles this summer. He is not executing the trade war well. All the media pundits who ‘egged him on’ cannot really help. The simple math that Trump relied on – I import more from you than you import from me and therefore, I can hurt you more with my tariffs – seems to have eluded many complicated economists and pundits. The summer chastisement of Xi by party elders therefore makes for interesting read. You can read them here, here and here.

This captures a lot of things:

The revised regulations stipulate the importance of “resolutely upholding the core status of General Secretary Xi in the Chinese Communist Party Central Committee and the entire Party.” This sentence holds significant meaning and marks a step forward for Xi. Earlier, the party had only talked about “resolutely upholding the Central Committee with Xi Jinping at the core.” The revised disciplinary regulations strengthen the wording regarding “core,” giving the impression that Xi, not the party’s collective leadership, is being highlighted. Now anyone who makes light of Xi faces punitive action. [Link]

South China Morning Post has a story on how it is not just trade but even Chinese investments that are now threatened because the rest of the world has wisened up.

Some interesting and unresolved long-term dilemmas crop up in the tension between European Union and Hungary. The European Parliament has censured Hungary. The censure motion got the required two-thirds majority. But, does it smack of hypocrisy and inconsistency? Hungarian people had voted him back to office just few months ago with a bigger mandate. He is pursuing policies that he had done before and which the voters have approved. So, is the European Parliament censuring him for being faithful to his people’s preferences?

Interestingly, heard a talk by Dr. S. Jaishankar in Singapore last afternoon. He was India’s foreign secretary. He said that the alliance between Italian Deputy PM Matteo Salvini and Orban of Hungary was the talking point of his meetings in Europe two weeks ago.

A comprehensive survey of people’s attitudes towards public institutions like military, parliament, financial institutions and the media, towards immigrants, etc., was published by Pew just two months ago. Europe is conflicted. For example, majority in many countries say that immigrants contribute to economy. But, the vote for the question of whether immigrants increase terror risk runs very close. Germany, in fact, has a net positive score. That is, the proportion that says immigrants increase terror risk exceeds those that say that immigrants don’t increase terror risk by 9 percentage points, followed by 4% points in Italy. Surprisingly, of the other countries, Sweden has the lowest negative differential: -6%.

On immigration, one has to interpret positive sentiments with a bit of scepticism. Respondents want to project themselves as open-minded. But, the truth is that negative sentiments and scepticism run deeper. The proof of the pudding is in the way the vote has swung in Sweden and in the rising popularity of AfD in Germany. No wonder Europe experienced a heat wave this summer.

Attitudes towards the European Union’s dominance in national policy discourse – more power should be returned to national governments – is uniformly negative. Indeed, 73% in the UK feel that more power should be returned to national governments. Even more than in Italy. Those who want to put Brexit to a second vote should note.

Financial Institutions are not trusted (either not at all or not too much) by a substantial majority in Italy, Spain and France. It is 46% in Germany and in the UK. But, distrust of media is uniformly high in all countries (not trusted at all or somewhat not trusted) with the exception of the Netherlands, Sweden and Germany. In the trust quotient, media scores lower than financial institutions! That is some achievement.

The lesson is that the so-called centrist and mainstream politicians and elites are failing in walking the fine line between acknowledging as real people’s perceptions and grievances and in appearing to be legitimising extremist political parties. The challenge lies in doing the former without doing the latter. It takes a lot of hard work, deft communication and repetitive messaging along with tangible measures on the law and order front, etc. It is hard work and, out of laziness, many mainstream politicians are taking the easy out: lumping all sentiments as xenophobia. So, they turn it into a lose-lose situation. They lose their people and they lose to their more extreme alternatives.