December 18, 2014

Piketty Reviews: the year in review


Thomas Piketty's book "Capital in the Twenty-first Century" became quite the phenomenon this year. Originally published in French, it was translated into English in 2014 and has since elicited a large amount of feedback. I have collected a series of book reviews over the course of this year that provide a bit of perspective on the book. This could either prove to be prophetic, or another "End of History and the Last Man". The diversity of responses presented here suggests that the relationship between inequality and economic growth will become a defining social issue in years to come.

Even at 696 pages and a large number of graphs, it is quite a captivating read. Piketty synthesizes data from multiple sources and arrives at a fundamental set of relationships between concentrations of capital (e.g. inherited wealth) and economic growth (e.g. the diffusion of capital into the broader economy). Based on this intellectual synthesis, Piketty's presents two laws of inequality [1, 2]. These laws are drawn from the cross-national and historical data analyses. In particular, the second law serves as shorthand for the book's main thesis. While people might debate how exactly to define "wealth" and "growth" or how well this framework describes the macroeconomic present, Piketty's book gives us the conceptual tools to discuss these issues more clearly.

Piketty's insight is quite simple: there is a proportional and often unbalanced relationship between wealth and growth that transcends both nation and historical era. When the returns on inherited wealth exceeds income growth generated by resource exploitation, entrepreneurship, or innovation, high degrees of social and economic inequality result (W > G -- see Figure 1). This often occurs when growth is slow or nonexistant, and the rate of return on inherited capital exceeds growth by default. In terms of social relations, the W > G scenario allows for inherited wealth to triumph over social mobility and new wealth creation. By limiting social mobility, a host of related factors act to reinforce income inequality [3]. Yet this relationship does not always hold. For example, historical periods during which opportunities for economic expansion and social mobility exceed the power of inherited wealth (such as the latter half of the 20th century) tend to be characterized by high rates of conventional growth (e.g. increases in GDP). While the power of inherited wealth is curbed by growth, it might also be curbed by taxation policy. In any case, the second half of the 20th century scenario can be formulated as G > W, or growth exceeding wealth.

Figure 1. Extreme inequality, shown in both artistic and symbolic logical form.

Piketty arrives at this conclusion by using historical data. These data suggest that the slow growth and high levels of inequality which characteerize the early 21st century will recapitulate a pattern typical of the 19th century or even the European middle ages. The predominance of rentier behavior amongst the 21st century elite is indeed reminiscent of the medivel era, where the primary source of wealth generation came from rents paid to a landed gentry [4]. While the mode of wealth generating is variable from century to century, the basic tension between inherited versus newly-generated wealth is predicted to govern economic dynamics. And in this context, inequality can inflence a host of societal characteristics, from social stratification to technological innovation [5].

Perhaps these consequences of inequality are simply a consequence of an over-domineering financial industry, which provides massive returns to investment income relative to labor productivity. In this sense, history is more contextual than cyclical. But history can also parallel broadly-stated theoretical predictions. This state of affairs can be compared with the prediction made by Karl Marx with respect to the end of capitalism itself [6]. As capitalism matures (so-called "late stage" capitalism), we can expect most forms of labor to become devalued. While this is not something that Piketty predicts for the future, this devaluation is due to both various resource consolidations promulgated by the owners of capital and a by-product of technological innnovation (particularly automation -- see [7]). Piketty's solution to countering this type of structural inequality is wealth redistribution, which is something America pioneered [8], but is needed on a global scale to avoid the predicted negative consequences of economic growth stagnation [9].



Here is my collection of Piketty reviews



Introducing Piketty:
Galbraith, J.K.   Kapital for the Twenty-first Century? Institute for New Economic Thinking blog, March 31 (2014).

Frankel, J.   Piketty's Fence. Jeffrey Frankel's blog, September 22 (2014).

Yglesias, M.   The Short Guide to Capital in the 21rst Century. Vox blog, April 8 (2014).

Dorman, P.   Piketty for Dummies. EconoSpeak blog, April 26 (2014).

Wolf, M.   "Capital in the Twenty-first Century", by Thomas Piketty. FinancialTimes.com, April 15 (2014).

R.A.   Thomas Piketty's "Capital", summarized in four paragraphs. Economist, May 4 (2014).

Cowen, T. and de Rugy, V.   Why Piketty's Book Is a Bigger Deal in America Than in France. NYTimes The Upshot, April 29 (2014).

Eakin, E.   Capital Man. Chronicle of Higher Education, April 17 (2014).


Broader Economic Implications:
An Interview with Adair Turner: "Which Capitalism for the 21rst Century?". Institute for New Economic Thinking blog, November 12 (2013).

Hutton, W.   Capitalism simply isn't working and here are the reason why. The Guardian, April 12 (2014).

Boucoyannis, D.   Adam Smith is not the antidote to Thomas Piketty. WaPo Monkey Cage blog, April 22 (2014).

Cassidy, J.   Forces of Divergence: is surging inequality endemic to capitalism? The New Yorker, March 31 (2014).

Krugman, P.   Why we're in a New Gilded Age. New York Review of Books, April 10 (2014).

Shenk, T.   Thomas Piketty and Millenial Marxists on the Scourge of Inequality. The Nation, April 14 (2014).

Faux, J.   Thomas Piketty Undermines the Hallowed Tenets of the Capitalist Catechism. The Nation, April 18 (2014).

Rosenberg, P.   Thomas Piketty terrifies Paul Ryan: Behind the right’s desperate, laughable need to destroy an economist. Salon, April 30 (2014).

Ritholtz, B.   Piketty vs John Stuart Mill’s Marketplace of Ideas. The Big Picture blog, May 1 (2014).

Kaminska, I.   Inequality and Hyperinflation. Dizzynomics blog, April 25 (2014).


Criticisms: In May, there was a post on the Financial Times' Money Supply blog that claimed to find flaws in Piketty's data analyses and basic aproach to studying inequality. The following articles are a rebuttal to these claims.

Piketty, T.   Appendix to Chapter 10. Inequality of capital ownership. Addendum: response to FT. May 28 (2014).

Buchanan, M.   Economists, Show your Assumptions. Bloomberg View, May 6 (2014).

Irwin, N.   Everything You Need to Know About Thomas Piketty vs. The Financial Times. NY Times The Upshot, May 30 (2014).

Winship, S.   Financial Times vs. Piketty on US. Smoke, No Fire. Forbes, June 2 (2014).


Return to an Ancien Regime?
So is growth truly over? Or are we transitioning to a new mode of production? Perhaps it is not the nature of growth that guides thinking about this but the existential need for a powerful ruling class. Such a desire for oligarchy mirrors many popular interpretations of Piketty's main thesis, but in a more fatalistic manner. This hidden cultural theme might explain the recent (and disturbing) trend towards neo-reactionary thought amongst certain segments of Western society [10, 11]. So-called neo-reactionary thinking involves a combination of radical libertarianism with dictatorship. In and of itself, this would be a fairly predictable reaction to a period of great social and economic change. Yet this movement even has legions in the technology industry, a social milieu that a) represents the "new" economy and a prime source of future economic growth, and b) represents an industry that could help us overcome the limitations of traditional growth. This might reflect an inability to think innovatively about social and cultural change, or perhaps it shows how inerred we truly are to old ideas.


NOTES:
[1] Galbraith, J.K.   Unpacking the First Fundamental Law. Economist's View blog, May 25 (2014). AND Krussell, P. and Smith, T.   Is Piketty's "Second Law of Capitalism" Fundamental? Vox blog, June 1 (2014).

[2] von Schaik, T.   Piketty's laws with investment replacement and depreciation. Vox blog, July 6 (2014).

[3] Krugman, P.   Piketty Day Notes. Conscience of a Liberal blog, April 16 (2014).

[4] Kaminska, I.   The Tyrrany of Land. Dizzynomics blog, February 5 (2014).

[5] Hanlon, M.   Why has human progress ground to a halt? Aeon Magazine, December 3 (2014).

[6] Jeffries, S.   Karl Marx's guide to the end of capitalism: a primer. The Guardian, October 20 (2008).

[7] Gordon, R.J.   Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds. NBER Working Paper No. 18315 (2012).

[8] Geier, K.   Taking Aim at Inequality. Blog of the Century, March 12 (2014) AND Yglesias, M.   If growth is dead, we need radical redistribution. Moneybox blog, October 7 (2013).

[9] Cowen, T.   "Unified Growth Theory" by Oded Galor. Marginal Revolution blog, June 9 (2011) AND Kuznets Curve. Wikipedia. December 30 (2013).

[10] Pein, C.   Mouthbreathing Machiavellians Dream of a Silicon Reich. The Baffler, May 19 (2014).

[11] Brin, D.   "Neo-Reactionaries" drop all pretense: End democracy and bring back lords! Contrary Brin blog, November 26 (2013).

December 11, 2014

May You (and your Lineage) Have a Long (Artificial) Life!

The nested pun is my way of announcing the arrival of ECAL 2015Since I will be on the program committee for ECAL (European Conference for Artificial Life) 2015, I have been asked to publicize the call for papers, abstracts, and workshops. Here it is below — if interested, please consider submitting and attending.



* CALL   FOR   PAPERS *

ECAL 2015 - 13th EUROPEAN CONFERENCE ON ARTIFICIAL LIFE
“Embodiment, Interaction, Conservation”

The 13th European Conference on Artificial Life (ECAL 2015) will be held in York, United Kingdom, 20-24 July 2015, hosted by the York Centre for Complex Systems Analysis at the The University of York.


ECAL 2015 will showcase a wide range of topics in Artificial Life, bringing together world-leading researchers to discuss the latest advances in Artificial Life.  Artificial Life is an interdisciplinary field, and as such welcomes submissions from across the spectrum of scientific and humanities disciplines, that consider the main conference themes of “Embodiment, Interaction, Conservation”. 

THE ECAL programme committee invite you to submit full papers (8 pages) or abstracts (1 page) in the area of Artificial Life.  All submissions will undergo a detailed peer review process.  Full papers will be reviewed for relevance, scientific and/or engineering quality, sound methodology and use of appropriate analysis techniques. Abstracts will be reviewed for relevance and quality.


I M P O R T A N T   D A T E S   A N D   I N F O R M A T I O N

Submission papers:    Monday 2nd March, 2015
Notification of Acceptance: Friday 17th April, 2015
Paper CRC required:    Monday 18th May, 2015
Main Conference convenes: 20-24 July, 2015

Contact email for queries: ecal2015  groupyork.ac.uk


S U B M I S S I O N   F O R M A T

There are two options for submission: either full paper or abstract. Note that the format is exactly the same for both options. The only difference resides in the number of pages and type of contents:

* full papers have an 8-page maximum length and should report on new, unpublished work.

* abstracts are limited to a 1-page length and can report on previously published work, but offer a new perspective on that work. We encourage the use of LaTeX for the production of papers. 

Submission will be via the Easy Chair system.

Papers and abstracts will be selected for oral or poster presentation, with no distinction being made between full papers and abstracts.

* ORGANISING COMMITTEE *

General Chair: Prof. Susan Stepney
Technical Chair: Prof. Jon Timmis
Workshop Chair: Dr. Simon Hickinbotham
Special Sessions Chair: Dr. Leo Caves
Tutorial Chair: Dr. Fiona Polack
Local Chair: Dr. Paul Andrews
ISAL Summer School: Dr. Rene Doursat

December 8, 2014

What Kind of Jurassic World Do We Live In?

Free-association and creative license at geologic timescales......

In a world where Gondwana has not yet fully drifted apart.....

COURTESY: Australian Museum.

And features a long-suffering movie idea that will probably end up being mediocre.....

Here is the "Jurassic World" trailer. COURTESY: Universal Pictures.

Satire still exists! Sort of.

A cynical take on the whole Jurassic World enterprise. COURTESY: xkcd.

December 4, 2014

Tales of an Academic Start-Up (Orthogonal Research)

This content is cross-posted to my personal website reboot. Previous updates and allusions to Orthogonal Research can be found (in chronological order) here, here, here, here, and here.

Myself, Represented Orthogonally
From January 2014 to November 2014, my primary affiliation was as Primary Investigator at Orthogonal Research [1]. Upon running out of funding at my previous position (Cellular Reprogramming Lab at Michigan State University), I decided to formally found an academic start-up. The idea was to have an affiliation and continue doing research while looking for a more formal position. However, with an open mind, an interest in research innovation, and some background in research commercialization, I decided to turn this into a more formal opportunity. I managed to turn out several papers, become a formal grant-making institute, and begin a long-term, large-scale distributed collaboration (DevoWorm). In fact, this collaboration led to my current position at UIUC.


While I now have a formal position, I am retaining the organizational identity as a secondary affiliation (much as some academics are "Chief Science Officers" at a start-up). I generated a number of reports to document the activities of an "academic start-up". This was stylized in the form of Quarterly Reports, which were based on three month intervals of the calendar year and summarized my academic activities during the period in question. These reports can be downloaded here: Q1, Q2, Q3, Q4 (coming soon).

Why call it a "Start-up"?
Why do I call it an academic start-up? Three things distinguish this from a more traditional start-up: fundraising, non-tangible vs. tangible outcomes, and business plan. While regular start-ups have multiple rounds of fundraising, the academic start-up is a bit more flexible. We can use cross-subsidization, grant money, and crowdsourcing [2] as a starting point. It is harder to fundraise when you have many non-tangible outcomes. The quarterly reports stress the tangible outcomes (papers, presentations, peer reviewing). However, academic work (particularly of the scientific variety) involves significant learning, internalization, experimentation, and reflection. 

Because of this flexibility and departure from conventional business thinking, the academic start-up does not operate by means of a formal business plan. In the case of Orthogonal, a path forward was made through exploration, tying up the loose ends of previous research, and working with collaborators to generate new productivity. In a sense, an academic start-up is a lot like a creative web endeavor such as programming a YouTube channel or administering blog content (which is part of the Orthogonal Research portfolio).

The workflow and productivity of an academic start-up, enabled by information technology.

Things I learned from this experience
1. There are significant economic "barriers to entry" in the field of research. As I was aware when starting Orthogonal, the University provides much of this infrastructure at significantly reduced cost. A University affiliation is to benefit from numbers (of fellow researchers) and (institutional) prestige. Orthogonal Research occupies a space in which the barriers to entry have fallen enough to do research at a very low cost (e.g. secondary analyses, modeling and simulation, collaborations, theory-building).

2. There is a need to combine academic start-ups with alternative funding methods [3], particularly for researchers who and projects that do not fit in well at more traditional academic institutions. Alternately, an academic start-up can be used as an auxiliary affiliation, to conduct work and collaborations outside the scope of one's Uni affiliation. In any case, this might serve the research workforce and local Universities well, much as research parks can have a synergistic effect with the University. While not everyone will agree that such partnerships are a good development, the small-scale nature of my initiative provides an avenue for high-risk or hybrid projects. Particularly when cross-subsidized, academic start-up might actually catalyze research innovation by not forcing research to conform to any single model.

3. What happens when a large number of independent researchers all have their own organizations, whether or not it is registered as a LLC? They can do things such as share equipment and resources, broker agreements with the local Uni, and provide collaborative support to each other. Here are two examples of how this has become more common:

a. one of my long-term collaborators (Dr. Steven Suhr) is in the process of starting up a biotech/ gene construct business called Biomilab LLC. Part of the purpose for this is to match an impressive skill set with resources that are outside the scope of traditional Uni research opportunities and funding regimes. While he is independent, he also collaborates with with University-affiliated people.

b. in the DevoWorm project, none of the collaborators (excluding myself) have a formal academic affiliation beyond graduate student. One is affiliated with a start-up called MetaCell, LLC, another is the proprietor of New Light Industries, Ltd., and a third is retired from academia but affiliated with Gulf Specimen Marine Lab (non-profit educational institute) in Florida.

NOTES:
[1] "Orthogonal" means "at right angles", "perpendicular", or alternately, "statistical independence". I chose this name to reflect the diverse research I have been fortunate enough to engage in over the years (a fair amount of it in the areas of mathematical and computational modeling). While my research work typically represents an interdisciplinary synthesis, there is always the feeling that the different components are "perpendicular" or "statistically independent" to one another. There is also referential meaning in the oddly- defined relationship between "Independent" and "Affiliated" research.

[2] My feelings about crowdsourcing are mixed. On the one hand, it is a good way to raise money quickly, and it is catching on amongst researchers. On the other hand, there is a tangibility (or hipster) bias, and (at least to me) resembles an inbred capital market (see below).

Diagram of an inbred capital market, or, “why do seemingly ridiculous Kickstarter projects raise large sums of money". Distinct from the phenomena of large corporate entities using the idle time of social groups for fun and profit.

[3] My forays into alternative funding methods have been largely theoretical. However, check out my stock presentation on the topic (from January 2013, so it might be time for a revision). It is called "A New Route to Science Innovation", and lays out the visionary case for the why and how with respect to the alternative funding of science research.

November 29, 2014

Neo-proprietarians + Conceptual Obfuscation = To What End?

It's been an interesting/bizarre month with respect to the open source/open access ethos [see disclaimer in 1]. The first part of the month saw two events. One was the posthumous birthday of Aaron Schwartz, and the other was a social media kerfuffle that represents part of a more general conservative backlash to net neutrality. More recently, an article in Nature [2] argued that increases in the number of published papers in recent years (partially enabled by open-access publishers), has diluted the quality-control process enforced through peer-review.

What do these three events have in common? They all involve brushes with neo-proprietarianism, or the advocacy of intellectual property (IP) rights through a simple assumption: private ownership/management of IP is always somehow morally superior to open access. This might range from overzealous prosecutors and politicians to earnest, well-meaning scientists. The result is oddly-placed criticism of ideas that are potentially more beneficial to society than to private owners or firms. At times, people with no direct stake in the IP rights defend the claims of rights holders, which seems odd except in the light of neo-propietarianism (or defending the mere idea of ownership rather than its drawbacks and consequences).


In the case of both Aaron Schwartz and the aforementioned Nature article, the issue at hand is open access to scientific articles. The Nature article is well-meaning and raises some good points about how scientists might be compensated for work such as peer review. However, the tone and overall argument is reminiscent of another critique of open access publishing published last year in Science. Furthermore, there are some issues with making a link between publication quantity and the overall quality of the scientific literature. This is particularly true when the argument is made in a Nature article, lest it be interpreted as a conflict of interest [2].

Whether this is simply the act of conflating "the best of the best" with a restrictive paid-access model of publishing or an implicit argument for the infallibility of peer-review elitism is unclear. However, blog posts and data analyses by two biologists (one being Michael Eisen) and a bioinformatician [3, 4, 5] provide a very different (and more nuanced) view of the open-access journal phenomenon. This includes a rebuttal of the argument that the explosion of open-access journals is bad for the quality of the scientific literature and a burden on peer reviewers.


Sometimes quality control is a good thing. This paper was accepted by a so-called "predatory publisher" (maybe you stop bugging me for solicitations to your journal, maybe I won't embarrass you) . In discussions that revolve around publishing "quality" and "prestige", it is common to lump predatory publishers in with all other open-access publishers. Do you need an elite publishing model to prevent things like this from happening? (Answer: a rhetorical "no"). COURTESY: David Mazieres, Eddie Kohler, and Peter Vamplew.


For more reflection on the life of Aaron Schwartz, see this event hosted by the Electronic Freedom Foundation (EFF) called "Hacking for a Better World". And for some less ideonational views on net neutrality, see the two readings on the subject in [6]. Should November be known henceforth as "Open Information Month". In light of this year's events, perhaps.



NOTES:
[1] For purposes of this post, no finer distinctions will be made between true (e.g. the technical definition of) "open access" and Net Neutrality. Particularly as defined by the current debate, Net Neutrality is not equivalent to "open access".

However, for some recent thinking in this area, please see: Godwin, M.   How Wikipedia Zero will serve and promote network neutrality. Mike Godwin's LinkedIn blog, December 1 (2014).

[2] Arns, M.   Open accss is tiring out peer reviewers. Nature, 515, 467 (2014).

[3] Taylor, M.   Open-access megajournals reduce the peer-review burden. Sauropod Vertebra Picture of the Week blog, November 27 (2014).

[4] Eisen, M.   Contrary to what you read in Nature, Open Access has not caused the growth in science publishing. It is NOT Junk blog, November 27 (2014).

[5] Saunders, N.   Growth in free and closed scientific publications 2000-2013. Neil Saunders' Rstudio Notebook, November 28 (2014).

[6] Madrigal, A.C. and LaFrance, A.   Net Neutrality: A Guide to (and History of) a Contested Idea. The Atlantic, April 25 (2014) AND Bergstein, B.   Q&A: Lawrence Lessig. MIT Technology Review, October 27 (2014).

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