Mark Blyth’s best seller Austerity: The History of a Dangerous Idea https://amzn.to/2Lcw556 Mark Blyth is a British political scientist from Scotland and a professor of international political economy at Brown University.37:43here’s a story when they did the Podestaemail Hawks when they got the Democratsemails somebody took the data fromWikiLeaks and decided it was called geolocate the data in other words what werethe place names that the leadingDemocrats who are the last part of hermentor represent all of us rememberright not the elite Republicans whatwere the police names that he talkedabout and their private communicationsand their selection what was the numberone most frequently named place in theircommunications can you guess have aguess Martha Martha’s Vineyard yeahnumber two Eastern Southampton then NewYork then San Francisco then I think itwas Ellie in DC and the rest of thecountry two standard deviations out sowhat’s the imaginary of a party thisseeks to represent all if that’s all theplaces did they talk about becausethat’s where the money is and it’s notjust to castigate the Democrats theBritish Labour Party was like this underblare of the German SPD under shorterit’s done that’s the left issystematically failed the people that itsupposedly represents so why should webe in the least surprised that theydefect and then go to any one at allthat actually says here I know thateveryone’s ignored you for 25 years I atleast hear the fact that you’re cryingand I understand why people’s everydayexperience is very different from anational average walking out and tellingpeople that the price of iPods hasfallen which means that really they’vegot more money than they think at a timewhen they can’t afford to send theirkids to college or their kids would beinsane to take on that much debt becauseit’s like having a house with no ASSAit’s just parts on izing and the exampleof immigration occupied to that one it’svery different depending on where youliveimmigration to me is another person fromanother interesting country who has aphd but that’s what it means where Ilive right but that’s because I’m in thetop 20% if you’re living in publichousing in France right and thoseresources are been finite and thoseresources are being cut and you’re theones are confronted with incrediblydifferent cultures coming and notintegrating with you taking theresources from you at least as youperceive it and that’s what’s beennarrated by the National Front don’texpect them not to make end roadsbecause it gels with everybody’s commonsense regardless of whether we can saywell on average and migrants benefit theeconomy no one lives in an average nowthe problem here now close with us is.. prompted the following response I thinkthe election of Trump has been good forclimate change because it stops the restof the world waiting around for Americato solve the problemso if the gentleman’s and the Chinesenow get together and do technologgreentech bring it to scale China forexample has installed more solar in thepast few years in the United States hasright if they end up doing that we’rethe suckers because we should have beenleading the investment we’ll be buyingit from thembut in a way if that forces them to dothat and that’s good in a global sensego for it so does that mean Trump was agood leader in that regard well that’s adifferent question right but it can havea positive effect so the mark like let’snot summit all up to you know the oneleader the genius the charisma whateverthe doesn’t that’s not good we arethinking about it they can’t make adifference but the key thing is whenthey’ve actually got the trust ofeverybody who’s who wants them to leadthat’s when societies work better butwhen you have leaders who are divisivewho pet people against each other Inever walk so for anybody that’s thetype of populism you want to avoid all
At the same time that science and technology have vastly improved human lives, they have also given certain visionaries the means to transform entire societies from above. Ominously, what was true of Soviet central planners is true of Big Tech today: namely, the assumption that society can be improved through pure “rationality.”CAMBRIDGE – Digital technology has transformed how we communicate, commute, shop, learn, and entertain ourselves. Soon enough, technologies such as artificial intelligence (AI), Big Data, and the Internet of Things (IoT), could remake health care, energy, transportation, agriculture, the public sector, the natural environment, and even our minds and bodies.
Applying science to social problems has brought huge dividends in the past. Long before the invention of the silicon chip, medical and technological innovations had already made our lives far more comfortable – and longer. But history is also replete with disasters caused by the power of science and the zeal to improve the human condition.
For example, efforts to boost agricultural yields through scientific or technological augmentation in the context of collectivization in the Soviet Union or Tanzania backfired spectacularly. Sometimes, plans to remake cities through modern urban planning all but destroyed them. The political scientist James Scott has dubbed such efforts to transform others’ lives through science instances of “high modernism.”
An ideology as dangerous as it is dogmatically overconfident, high modernism refuses to recognize that many human practices and behaviors have an inherent logic that is adapted to the complex environment in which they have evolved. When high modernists dismiss such practices in order to institute a more scientific and rational approach, they almost always fail.
Frontier technologies such as AI, Big Data, and IoT are often presented as panaceas for optimizing work, recreation, communication, and health care. The conceit is that we have little to learn from ordinary people and the adaptations they have developed within different social contexts.
The problem is that an unconditional belief that “AI can do everything better,” to take one example, creates a power imbalance between those developing AI technologies and those whose lives will be transformed by them. The latter essentially have no say in how these applications will be designed and deployed.
The current problems afflicting social media are a perfect example of what can happen when uniform rules are imposed with no regard for social context and evolved behaviors. The rich and variegated patterns of communication that exist off-line have been replaced by scripted, standardized, and limited modes of communication on platforms such as Facebook and Twitter. As a result, the nuances of face-to-face communication, and of news mediated by trusted outlets, have been obliterated. Efforts to “connect the world” with technology have created a morass of propaganda, disinformation, hate speech, and bullying.
But this characteristically high-modernist path is not preordained. Instead of ignoring social context, those developing new technologies could actually learn something from the experiences and concerns of real people. The technologies themselves could be adaptive rather than hubristic, designed to empower society rather than silence it.
Two forces are likely to push new technologies in this direction. The first is the market, which may act as a barrier against misguided top-down schemes. Once Soviet planners decided to collectivize agriculture, Ukrainian villagers could do little to stop them. Mass starvation ensued. Not so with today’s digital technologies, the success of which will depend on decisions made by billions of consumers and millions of businesses around the world (with the possible exception of those in China).
That said, the power of the market constraint should not be exaggerated. There is no guarantee that the market will select the right technologies for widespread adoption, nor will it internalize the negative effects of some new applications. The fact that Facebook exists and collects information about its 2.5 billion active users in a market environment does not mean we can trust how it will use that data. The market certainly doesn’t guarantee that there won’t be unforeseen consequences from Facebook’s business model and underlying technologies.
For the market constraint to work, it must be bolstered by a second, more powerful check: democratic politics. Every state has a proper role to play in regulating economic activity and the use and spread of new technologies. Democratic politics often drives the demand for such regulation. It is also the best defense against the capture of state policies by rent-seeking businesses attempting to raise their market shares or profits.
Democracy also provides the best mechanism for airing diverse viewpoints and organizing resistance to costly or dangerous high-modernist schemes. By speaking out, we can slow down or even prevent the most pernicious applications of surveillance, monitoring, and digital manipulation. A democratic voice is precisely what was denied to Ukrainian and Tanzanian villagers confronted with collectivization schemes.
But regular elections are not sufficient to prevent Big Tech from creating a high-modernist nightmare. Insofar as new technologies can thwart free speech and political compromise and deepen concentrations of power in government or the private sector, they can frustrate the workings of democratic politics itself, creating a vicious circle. If the tech world chooses the high-modernist path, it may ultimately damage our only reliable defense against its hubris: democratic oversight of how new technologies are developed and deployed. We as consumers, workers, and citizens should all be more cognizant of the threat, for we are the only ones who can stop it.
Historically, high-modernist schemes have been most damaging in the hands of an authoritarian state seeking to transform a prostrate, weak society. In the case of Soviet collectivization, state authoritarianism originated from the self-proclaimed “leading role” of the Communist Party, and pursued its schemes in the absence of any organizations that could effectively resist them or provide protection to peasants crushed by them.
Yet authoritarianism is not solely the preserve of states. It can also originate from any claim to unbridled superior knowledge or ability. Consider contemporary efforts by corporations, entrepreneurs, and others who want to improve our world through digital technologies. Recent innovations have vastly increased productivity in manufacturing, improved communication, and enriched the lives of billions of people. But they could easily devolve into a high-modernist fiasco.
Advanced Micro Devices Inc. transformed itself from a financially struggling company to an investor’s dream in just three years, a turnaround that began with a decision to help Chinese partners develop advanced computer-chip technology.
That deal may have helped save the company, but it alarmed U.S. national-security officials, who saw it as a threat to their goal to rein in China’s supercomputing industry. Last week, after years of friction, the Commerce Department issued an order that effectively bars several Chinese entities—including AMD’s partners—from obtaining American technology.
It looked as though the U.S. had succeeded in stanching the flow of cutting-edge computer technology to China. In reality, it was too late. Chinese versions of AMD chips already have been rolling off production lines. That technology is helping China in its race with the U.S. to build the first next-generation supercomputer—an essential tool for advanced civilian and military applications.
AMD’s Chinese partner, a military contractor, already used those chips to build what may prove to be the world’s fastest supercomputer, according to high-performance computing experts briefed on the project.
The partnership with the Santa Clara, Calif.-based chip maker was a game changer for China, which has long been unable to match the U.S.’s supercomputing power because of its inferior chips, one product the country has so far struggled to master. The AMD deal gave China access to state-of-the-art x86 chips, which are made by only two companies in the world: AMD and Intel Corp. They are the most dominant processor technology in use today.
“It’s the keys to the kingdom,” said retired Brig. Gen. Robert Spalding, who served on the National Security Council in 2017 and 2018 and discussed strategies to stop the AMD deal with officials at other agencies. “Everything today is built on x86.”
A deal between Advanced Micro Devices and Sugon Information Industry granted China access to U.S. chip technology.
in a deal that gave China advanced chip tech, which the U.S. fears would help China’s military:
Develop nuclear weapons
Enhance missile defense
Pursue artificial intelligence
Sources: Sugon company statements; interviews with U.S. officials
AMD said in a written statement that it “has and will continue to comply with all U.S. laws,” and that the technology transferred to China in the deal wasn’t as high-performing as other U.S. products commercially available there at the time.
Commerce Department officials said last week’s action was made in consultation with other agencies. It followed weeks of inquiries by The Wall Street Journal about AMD’s Chinese partnership and the belief of some government officials that AMD had plotted a sophisticated end-run around regulators.
This account of the protracted battle over the deal between AMD and the government is based on interviews with more than a dozen current and former government officials familiar with AMD’s China deal, senior chip-industry executives, lawyers and company and government filings in the U.S. and China.
When Lisa Su was named AMD’s chief executive in October 2014, the company was desperate for cash, its debts were mounting and its revenue was declining. Its stock had dipped to around $3 a share. Some analysts predicted it would seek bankruptcy protection.
Three weeks after getting the top job, Ms. Su, a Taiwan-born New Yorker, jetted to Beijing to meet officials at China’s Ministry of Industry and Information Technology. A Chinese vice minister urged her to partner with China “to achieve mutual benefits based on AMD’s technological strength,” according to a ministry press release at the time.
In February 2016, AMD reached a joint-venture deal involving a leading Chinese supercomputer developer, a state-backed military supplier called Sugon Information Industry Co., to make chips licensing AMD’s x86 processor technology.
“Making contributions to China’s national defense and security is the fundamental mission of Sugon,” its website read as recently as December 2016. Sugon also makes computers for civilian use.
In exchange, the Chinese government gave AMD a lifeline: $293 million in licensing fees plus royalties on the sales of any chips developed by the venture.
That April, AMD got another boost from Beijing. It said it would get a $371 million payout for selling an 85% stake in two of its semiconductor factories in China and Malaysia to an entity controlled by China Integrated Circuit Industry Investment Fund Co., a state-backed financier known as “the Big Fund.” Its mission is to develop China’s indigenous chip industry.
The U.S. and China are competing to develop the world’s first exascale computer, a next-generation supercomputer that would be capable of doing one quintillion—or one billion billion—calculations per second. While supercomputers are used in tasks such as weather forecasting and cancer research, they also are integral to the development of nuclear weapons, encryption, missile defense and other systems. The chips American companies produce to power supercomputers, including AMD’s x86, are superior to any China can make on its own.
“Semiconductors are a space where the U.S. still leads China and the rest of the world,“ says William Evanina, the U.S. government’s top counterintelligence official.
The U.S. still makes many of the world’s top supercomputers…
Source of the world’s top supercomputers*
…but China has been adding to its total.
Number of systems on list of 500 fastest
*Rank based on maximum achieved performance
Shortly before AMD announced the Sugon deal, Defense Department officials learned of a presentation the joint-venture partners made in China talking up the deal’s potential to transform the country into a leader in processor technology.
Pentagon officials quickly began seeking ways to unwind the deal, according to people familiar with the matter. They questioned company representatives and repeatedly tried to get them to submit the deal to a review by the Committee on Foreign Investment in the U.S., or Cfius, according to those people.
Companies routinely seek approval from the committee for deals that raise national-security issues. The committee is led by the Treasury Department and includes the Defense, Commerce, Justice and Energy departments, among others. It can recommend that the president block foreign investments in U.S. assets for national-security reasons.
AMD didn’t submit the deal for committee review, arguing Cfius didn’t have jurisdiction to review that type of joint-venture, according to people familiar with the matter. The company also claimed it wasn’t turning over any state-of-the-art technology. Pentagon officials found that response at odds with how the joint-venture had portrayed itself in China.
Treasury officials, who have the final say on the consensus-driven Cfius panel, ultimately agreed with AMD’s assessment that the deal fell outside its remit. That left AMD and Defense officials at a stalemate through the end of the Obama administration and the first months of the Trump administration.
A Treasury spokesman declined to comment, as did the Defense Department.
Commerce Department officials also were investigating the deal for compliance with export controls. In June 2017, following a series of inquiries, they sent AMD an “is informed letter” that alerted the company they suspected the China deal violated export controls. AMD replied that it was complying with all regulations, according to people familiar with the matter.
In its statement to the Journal, AMD said that starting in 2015, it “diligently and proactively briefed the Department of Defense, the Department of Commerce and multiple other agencies within the U.S. government before these joint ventures were entered into, and we received no objections to their formation or the transfer of technology.”
Before the transfer of any technology, AMD said, the Commerce Department notified the company that it wasn’t restricted or otherwise prohibited from being transferred.
Current and former national-security officials said in interviews they believe AMD designed the deal’s complex structure, which involved the creation of two interlinked joint ventures, to sidestep U.S. regulations. AMD said the deal was structured for business and technological reasons and to comply with regulations, not to evade them.
AMD controls the first joint venture, which licenses the U.S. chip maker’s x86 intellectual property and manages production of the chips. The second venture, controlled by AMD’s Chinese partner, designs the devices that use the chips and sells the final products.
The arrangement enables AMD to share technology with China while retaining control over the entity working with its intellectual property. The creation of the second, China-controlled joint-venture allowed the parties to claim that the resulting product was indigenously developed in China, a key goal of the Chinese government.
While Cfius has jurisdiction to review foreign purchases of U.S. chip assets, it doesn’t have clear authority to review overseas joint ventures that don’t grant a foreign entity control over a U.S. business.
AMD didn’t have to seek an export license from the Commerce Department because it stripped out the parts of its x86 chip that would have required licenses, such as encryption technology, which China didn’t need anyway.
The x86 chips under development for China, code-named Dhyana, are similar to AMD’s own EPYC chips, minus U.S. encryption technology that AMD omitted, say people familiar with the deal.
The joint venture’s U.S. managers stressed to employees that the Dhyana chip was being developed for commercial purposes, such as providing processing technology to Chinese tech giants such as Baidu Inc. or Tencent Holdings Ltd. , according to one of the people familiar with the deal.
Sugon, however, told state-run media that the x86 technology could serve China’s bid to build the world’s first exascale supercomputer. The joint venture’s job postings in Chinese implore candidates to help strengthen China’s domestic chip ambitions.
Sun Ninghui, head of the computing-technology institute at the Chinese Academy of Sciences, which works closely with Sugon, likened its chip development strategy to what China did with high-speed trains—introduce a foreign technology to the market, absorb it, and then innovate to make China a leader.
“This gradually advances our ability to comprehend their core technologies,” Mr. Sun told a government-run newspaper. “That way, we no longer can be pulled around by our noses.”
By mid-2017, concerns about AMD’s China deal had reached the Trump White House. Retired Gen. Spalding, who left the National Security Council last year, said of AMD: “They’re using the letter of the law to violate the spirit of the law.”
In November 2017, Sen. John Cornyn (R., Texas) and then-Rep. Robert Pittenger (R., N.C.) introduced legislation to expand Cfius’s authority, including broader powers to review joint ventures overseas.
There was heavy opposition from many companies and trade organizations, which feared Cfius interfering in their overseas activities, and the provision didn’t make it into the final version of the legislation that passed in August 2018.
Defense Department officials decided to unilaterally submit AMD’s Sugon deal to Cfius for review, despite Treasury’s earlier interpretation that it fell outside the panel’s jurisdiction. Only rarely in Cfius’s 44-year history has the committee been asked to review deals without the cooperation of either party involved, according to lawyers who track the confidential cases.
As the Cfius filing sat in limbo, Lisa Porter, the Defense Department’s deputy undersecretary for research and engineering, criticized AMD’s China deal in front of industry executives. AMD officials hired Beacon Global Strategies, a Washington-based consulting firm that employs former top national-security officials, to try to make peace.
On Friday, however, the Commerce Department announced the new export restrictions banning Sugon and its affiliates on the AMD deal from accessing U.S. technology without a license. The move, which followed the imposition of similar export restrictions last month targeting Chinese telecommunications giant Huawei Technologies Co., effectively forces AMD to unwind the deal.
In its decision, the Commerce Department said the Chinese entities were determined “to be acting contrary to the national security or foreign policy interests of the U.S.” It added: “Sugon has publicly acknowledged a variety of military end uses and end users of its high-performance computers.”
In a statement on its WeChat account, Sugon said the decision would severely disrupt its cooperation with U.S. partners. It said it had complied with all U.S. laws and would seek to discuss the issue with U.S. officials. “We believe there is a large gap in the understanding of Sugon’s corporate circumstances on the part of relevant U.S. authorities,” it said.
The Commerce action will make it hard for China to make future generations of the x86 chip, and it’s unclear if AMD’s partners will be able to continue producing the current version without the U.S. company’s technical assistance, according to experts in semiconductor technology. But China gained significant technical know-how through the deal, which has already yielded chips currently powering supercomputers.
For AMD, pushing back against U.S. national security officials while its China partnership gained traction paid off. The chip maker used the cash infusion to get back on its feet and has since introduced an array of competitive new products.
The company’s stock price has risen to around $30 per share recently, from under $2 in early 2016. AMD’s shares were the S&P 500 index’s top performers last year, rising nearly 80%.
“Only 2 rooms left? They don’t expect me to believe that do they? You see that everywhere.”
I leave with a wry smile. The client won’t be happy, but at least the project findings are becoming clear. Companies in certain sectors use the same behavioral interventions repeatedly. Hotel booking websites are one example. Their sustained, repetitive use of scarcity (e.g., “Only two rooms left!”) and social proof (“16 other people viewed this room”) messaging is apparent even to a casual browser.
For Chris the implication was clear: this “scarcity” was just a sales ploy, not to be taken seriously.
My colleagues and I at Trinity McQueen, an insight consultancy, wondered, was Chris’s reaction exceptional, or would the general public spot a pattern in the way that marketers are using behavioral interventions to influence their behavior? Are scarcity and social proof messages so overused in travel websites that the average person does not believe them? Do they undermine brand trust?
The broader question, one essential to both academics and practitioners, is how a world saturated with behavioral interventions might no longer resemble the one in which those interventions were first studied. Are we aiming at a moving target?
.. We started by asking participants to consider a hypothetical scenario: using a hotel booking website to find a room to stay in the following week. We then showed a series of nine real-world scarcity and social proof claims made by an unnamed hotel booking website.
Two thirds of the British public (65 percent) interpreted examples of scarcity and social proof claims used by hotel booking websites as sales pressure. Half said they were likely to distrust the company as a result of seeing them (49 percent). Just one in six (16 percent) said they believed the claims.
The results surprised us. We had expected there to be cynicism among a subgroup—perhaps people who booked hotels regularly, for example. The verbatim commentary from participants showed people see scarcity and social proof claims frequently online, most commonly in the travel, retail, and fashion sectors. They questioned truth of these ads, but were resigned to their use:
“It’s what I’ve seen often on hotel websites—it’s what they do to tempt you.”
“Have seen many websites do this kind of thing so don’t really feel differently when I do see it.”
In a follow up question, a third (34 percent) expressed a negative emotional reaction to these messages, choosing words like contempt and disgust from a precoded list. Crucially, this was because they ascribed bad intentions to the website. The messages were, in their view, designed to induce anxiety:
“… almost certainly fake to try and panic you into buying without thinking.”
“I think this type of thing is to pressure you into booking for fear of losing out and not necessarily true.”
For these people, not only are these behavioral interventions not working but they’re having the reverse effect. We hypothesize psychological reactance is at play: people kick back when they feel they are being coerced. Several measures in our study support this. A large minority (40 percent) of the British public agreed that that“when someone forces me to do something, I feel like doing the opposite.” This is even more pronounced in the commercial domain: seven in ten agreed that “when I see a big company dominating a market I want to use a competitor.” Perhaps we Brits are a cynical bunch, but any behavioral intervention can backfire if people think it is a cynical ploy.
Heuristics are dynamic, not static
Stepping back from hotel booking websites, this is a reminder that heuristics are not fixed, unchanging. The context for any behavioral intervention is dynamic, operating in “a coadapting loop between mind and world.” Repeated exposure to any tactic over time educates you about its likely veracity in that context. Certain tactics (e.g., scarcity claims) in certain situations (e.g., in hotel booking websites) have been overused. Our evidence suggests their power is now diminished in these contexts.
Two questions for the future
In our study, we focused on a narrow commercial domain. It would be unwise to make blanket generalizations about the efficacy of all behavioral interventions based on this evidence alone. And yet nagging doubts remain.
#1: Like antibiotic resistance, could overuse in one domain undermine the effectiveness of interventions for everyone?
If so, the toolkit of interventions could conceivably shrink over time as commercial practitioners overuse interventions to meet their short-term goals. Most would agree that interventions used to boost prosocial behavior in sectors such as healthcare have much more consequential outcomes. In time, prosocial practitioners may be less able to rely on the most heavily used tactics from the commercial domains such as social proof and scarcity messaging.
#2 : How will the growing backlash against big tech and “surveillance capitalism” affect behavioral science?
Much of the feedback from the public relates to behavioral interventions they have seen online, not offline. Many of the strategies for which big tech companies are critiqued center on the undermining of a user’s self-determination. The public may conflate the activities of these seemingly ubiquitous companies (gathering customer data in order to predict and control behavior) with those of the behavioral science community. If so, practitioners might find themselves under much greater scrutiny.
Feedback loops matter
There probably was never an era when simple behavioral interventions gave easy rewards. Human behavior—context-dependent, and driven by a multitude of interacting influences—will remain gloriously unpredictable.
Marketers should design nudges with more than the transaction in mind, not only because it is ethical or because they will be more effective over time but also because they bear responsibility toward the practitioner community as a whole.
The lesson I take from our study? Feedback loops affect the efficacy of behavioral interventions more than we realize. Just because an intervention was successful five years ago does not mean it will be successful today. Practitioners should pay as much attention to the ecosystem their interventions operate in as their customers do. There’s no better place to start than spending time with them—talking, observing, and empathizing.
We should also consider our responsibilities as we use behavioral interventions. Marketers should design nudges with more than the transaction in mind, not only because it is ethical or because they will be more effective over time but also because they bear responsibility toward the practitioner community as a whole. We owe an allegiance to the public, but also to each other.