Do we really understand the waves of Economics?

Do we really understand the waves of Economics?

For most people, economics is all about money and finance and issues of supply and demand. While these are important elements, economics is about much more. Economics provides a framework for understanding the actions and decisions of individuals, businesses and governments. It provides a means to understand interactions in a market-driven society and for analysing government policies that affect the families, jobs and lives of citizens

If you watch the news at all, you will probably hear the word ‘economy’ branded in many contexts. But if you are like many people, you may not understand what economics is and why it matters so much.

According to the American Economics Association (AEA), “Economics can be defined in a few different ways. It’s the study of scarcity, the study of how people use resources and respond to incentives, or the study of decision-making. It often involves topics like wealth and finance, but it is not all about money. Economics is a broad discipline that helps us understand historical trends, interpret today’s headlines, and make predictions about the coming years.”

Economics may seem obtuse in the abstract. However, it has very powerful real-world implications. Specifically, according to the AEA, economics can help us answer many big questions, such as why some countries are rich while others are poor; why men earn more than women; how data can help us make sense of the world; what causes recessions; and why we ignore information that could be used toward better decision-making.

Economics Help provides several examples of times when economics come into play, including dealing with shortages of raw materials; working out how wealth is distributed and redistributed within society; determining the extent to which the government should intervene in the economy; and using principles and measures such as opportunity cost, social efficiency, forecasts, and evaluation.

Friedrich August von Hayek once proposed: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” In this sense, economics lies at the intersection of the natural sciences and the humanities: applying a quantitative, data-driven approach to human behaviour. “As such [it] is one of the most important and relevant skills for the world today, helping us choose wisely when it comes to our personal, social and professional lives,” asserts Financial Express.

In 1998, as the Asian financial crisis was ravaging what had been some of the fastest-growing economies in the world, the New Yorker ran an article describing the international rescue efforts. It profiled the super-diplomat of the day, a big-idea man the Economist had recently likened to Henry Kissinger. The New Yorker went further, noting that when he arrived in Japan in June, this American official was treated “as if he were General [Douglas] MacArthur.”

In retrospect, such reverence seems surprising, given that the man in question, Larry Summers, was a dishevelled, somewhat awkward nerd then serving as the U.S. deputy treasury secretary. His extraordinary status owed, in part, to the fact that the United States was then (and still is) the world’s sole superpower and the fact that Summers was (and still is) extremely intelligent. But the biggest reason for Summers’s welcome was the widespread perception that he possessed a special knowledge that would save Asia from collapse. Summers was an economist.

During the Cold War, the tensions that defined the world were ideological and geopolitical. As a result, the superstar experts of that era were those with special expertise in those areas. And policymakers who could combine an understanding of both, such as Kissinger, George Kennan, and Zbigniew Brzezinski, ascended to the top of the heap, winning the admiration of both politicians and the public.

Once the Cold War ended, however, geopolitical and ideological issues faded in significance, overshadowed by the rapidly expanding global market as formerly socialist countries joined the Western free trade system. All of a sudden, the most valuable intellectual training and practical experience became economics, which was seen as the secret sauce that could make and unmake nations. In 1999, after the Asian crisis abated, Time magazine ran a cover story with a photograph of Summers, U.S. Treasury Secretary Robert Rubin, and U.S. Federal Reserve Chairman Alan Greenspan and the headline “The Committee to Save the World.”

In the three decades since the end of the Cold War, economics has enjoyed a kind of intellectual challenge. It has become first among equals in the social sciences and has dominated most policy agendas as well. Economists have been much sought after by businesses, governments, and society at large, their insights seen as useful in every sphere of life. Popularized economics and economic-type thinking have produced an entire genre of best-selling books. At the root of all this influence is the notion that economics provides the most powerful lens through which to understand the modern world.

The crisis of 2008 may have been the wake-up call, but it was only the latest warning sign. Modern-day economics had been built on certain assumptions: that countries, companies, and people seek to maximize their income above all else, that human beings are rational actors, and that the system works efficiently.

But over the last few decades, compelling new work by scholars such as Daniel Kahneman, Richard Thaler, and Robert Shiller has begun to show that human beings are not predictably rational; in fact, they’re predictably irrational. This “behavioural revolution” landed a debilitating blow to mainstream economics by arguing that what was perhaps the centrepiece assumption of modern economic theory was not only wrong but, even worse, unhelpful.

Let me be clear: Economics remains a vital discipline, one of the most powerful ways we have to understand the world. Economics remains a vital discipline, one of the most powerful ways we have to understand the world.

Economics promotes understanding of and insight into problems specific to our times, including everything from education and the environment to health care and national security.

“One of the principal jobs for economists is to understand what is happening in the economy and investigate reasons for poverty, unemployment and low economic growth. For example, in a political debate such as – Should, the UK leave the EU? There are many emotional arguments made about immigration. Economic studies can try and evaluate the costs and benefits of free movement of labor.

Economic studies can try to examine the economic effects of immigration. This can help people make a decision about political issues,” says Economics Help

The problems that we want economists to help us solve are more like predicting how leaves will fall on a windy day than predicting how objects will fall in a vacuum. Economic phenomena are affected by a very large number of causal factors of many different kinds.

The world is now facing what observers are calling a “synchronised” growth upswing. What does this mean for the economic “convergence” of developed and developing countries, a topic that lost salience after the Great Recession began a decade ago?

The answer will depend on developing economies’ ability to find and tap new, more advanced sources of growth. In the past, the key engine of convergence was manufacturing. Developing countries that had finally acquired the needed skills and institutions applied advanced-country technologies locally, benefiting from plentiful, low-cost labour.

Rising interest rates, increasing trade tensions, Brexit uncertainty… the world economy in 2019 faces many headwinds, but there are also many positive signs that global growth will continue in the coming year. The incoming and outgoing chief economists at the IMF discuss in this video where we are headed.

Maury Obstfeld, Outgoing Economic Counselor, IMF; Gita Gopinath, Incoming Economic Counselor, IMF; Gerry Rice, Director, Communications Department, IMF

Moreover, today’s cutting-edge technologies – such as robotics, artificial intelligence (AI), and bioengineering – are more complex than industrial machinery, and may be more difficult to copy.

And, because intelligent machines can increasingly fill low-wage jobs, developing countries’ cost advantage may have been diminished significantly.

Of course, for robotics and AI to appear in developing-country value chains, including services that rely on frontier technologies, a minimum set of specific skills and infrastructure will be needed. But deploying some new technologies and tasks in the emerging economies may turn out to be no more difficult or costly than in advanced countries.

Here, much will depend on what kind of complementary labour is required. It is often assumed that a pool of very highly skilled labour is crucial to deploy AI. That may be true in some cases, but the opposite may be true in others.

For example, the new labor-displacing technologies could make feasible activities for which there had been insufficient skilled labour. Thus, complete automation can lead to a greater share of an economic activity being located in a developing country.

Another factor that will shape the process of technological upgrading in developing countries is global firms’ willingness to invest. Global market structures and pricing will partly determine the distribution of benefits. But so will countries’ efficiency at learning regulatory lessons, including how to design rules that attract investors, capture important segments of value chains, and secure a sufficiently large share of the gains from innovation. Those countries that learn quickly may actually grow faster than advanced economies, even in high-tech sectors.

Of course, for many countries and sectors, there remains considerable room for traditional catch-up – a process that will likely continue to fuel growth. But it will not be enough to fuel true convergence. For that, developing countries will need to deploy new technologies relatively efficiently, taking into account the role of labour-market skills and regulations. This will not be easy, and we may never return to the “golden age” of convergence that preceded 2007. But new technologies should not be expected to stop convergence, even if, as is likely, they slow it down.

My final word: Economics remains a vital discipline, one of the most powerful ways we have to understand the world. Economics remains a vital discipline, one of the most powerful ways we have to understand the world.
But in the heady days of post-Cold War globalisation, when the world seemed to be dominated by markets and trade and wealth creation, it has become the dominant discipline, the key to understanding modern life. That economics has since slipped from that pedestal is simply a testament to the fact that the world is messy.

The social sciences differ from the hard sciences because “the subjects of our study think,” said Herbert Simon, one of the few scholars who excelled in both. As we try to understand the world of the next three decades, we will desperately need economics but also political science, sociology, psychology, and perhaps even literature and philosophy. Students of each should retain some element of humility.

As Immanuel Kant, an influential German philosopher, in his doctrine of transcendental idealism said:

“Out of the crooked timber of humanity, no straight thing was ever made.”

Will globalisation actually happen?

The age of globalisation began on the day the Berlin Wall came down. From that moment in 1989, the trends evident in the late 1970s and throughout the 1980s accelerated: the free movement of capital, people and goods; trickle-down economics; a much diminished role for nation states; and a belief that market forces, now unleashed, were unstoppable.

There has been pushback against globalisation over the years. The violent protests seen in Seattle during the World Trade Organisation meeting in December 1999 were the first sign that not everyone saw the move towards untrammelled freedom in a positive light. One conclusion from the 9/11 attacks on New York and Washington in September 2001 was that it was not only trade and financial markets that had gone global. The collapse of the investment bank Lehmann Brothers seven years later paid to the idea that the best thing governments could do when confronted with the power of global capital was to get out of the way and let the banks supervise themselves.

Now we have Britain’s rejection of the EU. This was more than a protest against the career opportunities that never knock and the affordable homes that never get built. It was a protest against the economic model that has been in place for the past three decades.

Extraordinary times are leading to extraordinary challenges. Linda Yueh, Fellow in Economics, Oxford University addresses these geopolitical challenges and demographic changes and how it will affect global economics and the asset management industry.

Modern humans have created many thousands of distinct cultures. So what will it mean if globalisation turns us into one giant, homogenous world culture?

The importance of the tribe in our evolutionary history has meant that natural selection has favoured in us a suite of psychological dispositions for making our cultures work and for defending them against competitors. These traits include cooperation, seeking affiliations, a predilection to coordinating our activities, and tendencies to trade and exchange goods and services. Thus, we have taken cooperation and sociality beyond the good relations among family members that dominate the rest of the animal kingdom, to making cooperation work among wider groups of people.

And so in a surprising turn, the very psychology that allows us to form and cooperate in small tribal groups, makes it possible for us to form into the larger social groupings of the modern world. Thus, early in our history most of us lived in small bands of maybe 50 to 200 people. At some point tribes formed that were essentially coalitions or bands of bands. Collections of tribes later formed into chiefdoms in which for the first time in our history a single ruler emerged.

But two factors looming on the horizon are likely to slow the rate at which cultural unification will happen.

One is resources, the other is demography. Cooperation has worked throughout history because large collections of people have been able to use resources more effectively and provide greater prosperity and protection than smaller groups. But that could change as resources become scarce.

This must be one of the most pressing social questions we can ask because if people begin to think they have reached what we might call ‘peak standard of living’ then they will naturally become more self-interested as the returns from cooperation begin to leak away. After all, why cooperate when there are no spoils to divide?

If we try to draw some conclusions from the ‘why’ we can see high levels of global employment and any form of prosperity will elude us and big reductions of poverty in the emerging world will not happen quickly enough.

Obviously, it is important to base these conclusions on where people are located and their individual views about the economies in which they live: how they see the problem, how they see their future, and whether the ambitions of different countries’ citizens can be advanced by stronger, more coordinated action around the world.

If you were to ask Americans what America has to do now to sort out its economy, some would say ‘cut deficits’; many would say ‘cut taxes’; but most would say ‘cut the foreign imports that are stealing our jobs’.

If you were to ask Europeans what their answer is, they would probably say ‘cut the debt’; and some might even complain about the very viability of the Euro and Brexit.

If you asked the Chinese what their solution was for their best future, they would probably answer that they are a developing country so other countries should stop threatening them with protectionism and complaining about their currency.

If you asked the developing world, they would call for an end to unfair trading practices that ruin their basic ability to export and say that aid is unfairly being cut or withheld.

If I asked the question a different way, asking the citizens ‘what do you really want to achieve as a country? I am sure that the answer would be very different.

In America people would say the main issue for them is jobs and rising living standards for the working middle class.

In the countries of the European Union people would say that Europe needs to get its young people into work and cut its high levels of unemployment.

In China people would say they want to see more personal prosperity and that means cutting the numbers of poor people and giving the rising middle class the opportunity to buy homes and access opportunities.

In many developing countries, people would tell you the problem was poverty.

Yet in the absence of a bigger vision of what can be achieved, the politics of each country inevitably pulls towards the narrow tasks and not the broad objectives.

So how can this wider debate contribute to global growth and collaboration?

Bradford DeLong once wrote: ‘History teaches us that when none of the three clear and present dangers that justify retrenchment and austerity – interest rate crowding-out, rising inflationary pressures on consumer prices, national overleverage via borrowing in foreign currencies – are present, you should not retrench’.

Yet in the absence of seeing a different and global route to greater prosperity, each country is trying, post-crisis, to return to its old ways. However, the security people crave will come not from countries clinging to an old world, but from reinventing themselves for our new interdependent world: Asia reducing poverty and building their new middle class; America and Europe exporting high-value-added goods by building a more skilled middle class; all undertaking structural reforms but in a growing economy.

This is the answer to those who travel today not with optimism but in fear. But there is no old world to return to: it has gone. The transition between epochs is always the moment of maximum danger. It is also the moment of maximum opportunity.

Final thought: against this backdrop the seemingly unstoppable and ever accelerating cultural homogenization around the world brought about by travel, the internet and social networking, although often decried, is probably a good thing even if it means the loss of cultural diversity: it increases our sense of togetherness via the sense of a shared culture. In fact, breaking down of cultural barriers – unfashionable as this can sound – is probably one of the few things that societies can do to increase harmony among ever more heterogeneous peoples.

So, to my mind, there is little doubt that the next century is going to be a time of great uncertainty and upheaval as resources, money and space become ever more scarce. It is going to be a bumpy road with many setbacks and conflicts. But if there was ever a species that could tackle these challenges it is our own.

It might be surprising, but our genes, in the form of our capacity for culture, have created in us a machine capable of greater cooperation, inventiveness and common good than any other on Earth.

And, of course it means you can always find a cappuccino just the way you like it no matter where we wake up.

As Herbie Hancock once said:

“Globalization means we have to re-examine some of our ideas, and look at ideas from other countries, from other cultures, and open ourselves to them. And that’s not comfortable for the average person.”

Purpose Must Have Relevance – Author Interview

Geoff Hudson-Searle is interviewed by RTL Europe Television across his professional career and authorisms. Each of us is, to some extent or other, are a reflection of the real-life experiences of our lives. However, whether and how we succeed is determined at least in part by how we cope with those experiences and what we learn from them. Meaningful leadership , whether this be in business, life or family will conquer, the most profound truth of your individual journey’s. Courage, drive, determination, resilience, imagination, energy, you will find success. We are all human, not machines, we should not deny ourselves fulfilment or Meaningful Conversations.

FREEDOM AFTER THE SHARKS
In his first book, “Freedom after the sharks”, Geoff Hudson-Searle tells the story of a man who, despite a difficult family life and professional setbacks, developed the determination, drive and skills to create a successful business and happy life.
“Freedom after the sharks” shows how, even in a declining economy, a business can survive and even succeed. It covers some real-life experiences and offers some suggestions for dealing with problems and issues. It provides a guide to finding your way in the business world.

The book is suitable for entrepreneurs who might not be sure of the path to take or who want to benefit from other people’s mistakes and failures. Other audiences include middle management or junior executives who are looking for a fascinating life story of courage, drive and inspiration, as well as graduates and college students, who will find information that will help prepare them for their careers.

Buy on Amazon

MEANINGFUL CONVERSATIONS
This book has been written about some very passionate subjects in business today: Communications, Strategy and Business Development and Growth.

In February 2014 I set out as an author to write a weekly blog across a variety of subjects and foremost about people in business, opinions, research and tips, advise on some revelations, past and present.

This book demonstrates the relationship between communications (human 2 human), strategy and business development and growth. It is important to understand that a number of the ideas, developments and techniques employed at the beginning as well as the top of business can be successfully made flexible to apply.

Communications, Strategy and Business Development and Growth are essential for success and profitability in the business process.

This book provides a holistic overview of the essential leading methods of techniques. It will provide you with a hands on guide for business professionals and those in higher education.

Readers will gain insights into topical subjects, components of Communications, Strategy and Business Development and Growth, including a wide range of tips, models and techniques that will help to build strong and effective solutions in today’s business world.

The terms ‘Communications’, Strategy’ and Business Development and Growth’ have become overused during the last decade and have become devalued as a result. In this book I aim to simplify these terms and to re-value management and leadership by addressing topics and subjects in each distinctive chapter.

As Anthony Robbins once said:

“The way we communicate with others and with ourselves ultimately determines the quality of our lives.”

The book therefore covers all the essential components of Communications, Strategy and Business Development and Growth, but ensures that they are described in an engaging, enjoyable way with clarity.

The book is divided into three key areas to make it easy to find the material you need. Each component is easy to locate by the titles of the short story at the top of the pages. Each chapter within the three components relates strongly to each other but is also interrelated to all the other chapters. Those with interest on certain topics may wish to start at their area of interest first, while those who prefer to read the book from the first page to the end will proceed as they started, there really is a topic for everyone in the book.

Business professionals and individuals in the great challenges of today’s business world have renewed responsibility for what business does best; innovate, invest and grow. Many people wait until circumstances force change and transformation, that can be radical and painful, this book will arm you with the tips, advise and techniques to provide fresh thinking to your everyday environment and to innovate your circumstances for a better environment, we are all extraordinary people and have the ability to share and provide wealth creation and richness to our surroundings, the question is how much do we want to be extraordinary.

This book has been written not just for people in a company or organisation, it is about helping and supporting understanding across a wide variety of subjects to anyone in life; students, budding entrepreneurs, business people and aspiring individuals.

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JOURNEYS TO SUCCESS VOLUME 9
In the best-selling “Journeys to Success” series, men and women share their personal stories of transforming life-shattering events into triumphant success. The stories inside this book contain powerful seeds for resilience, spiritual awakening and plain determination in the face of powerful events. ‘Volume 9’ (2018) is a dedication to the late Tom Cunnigham, who recently passed away.

If you love stories of overcoming life’s challenges, this book is for you!

The “Journeys to Success”-series has become an international sensation, international author and I’m incredibly proud to have contributed this chapter: ‘Striving for an Ultimate Goal’.

The series has sold over 100 million copies in various formats including ebooks, hardback, and paperback, apps and audiobooks.

Written from the work, experience and wisdom of Geoff Hudson-Searle – an international director and business thought leader – ‘Journeys to Success Volume 9’ is rapidly poised to become the next bestselling “must have” for busy executives, business professionals and those in higher education. Simplifying and comprehensively deconstructing the over-used terms used in life, business and ‘growth’, Hudson-Searle’s compelling volume provides refreshing new advice on thriving in today’s cutthroat and often confusing business world. One critic recently wrote, “Well done Geoff, I’m a buyer #BigTime congratulations for your further literary success, more power to you.

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Do we need AI, if humans can grow in development?

It seems like every day there is a new article or story about artificial intelligence (AI). AI is going to take over all of the jobs. AI is going to do all of the repetitive, menial tasks carried out by admins on a daily basis. AI is going to rise up and take over. AI is not going to take over but instead be natively baked into all systems to produce more human interactions.

For all the things AI is allegedly going to do, it can already do a lot right now, such as automation, custom searches, security interventions, analysis and prediction on data, serve as a digital assistant, perform algorithm-based machine learning and more.

It will be a good number of years before we get AI doing everything for us, the real question is can humans survive without AI?

Does anyone recall the Trachtenberg speed system of basic mathematics?

The Trachtenberg Speed System of Basic Mathematics is a system of mental mathematics which in part did not require the use of multiplication tables to be able to multiply. The method was created over seventy years ago. The main idea behind the Trachtenberg Speed System of Basic Mathematics is that there must be an easier way to do multiplication, division, squaring numbers and finding square roots, especially if you want to do it mentally.

Jakow Trachtenberg spent years in a Nazi concentration camp and to escape the horrors he found refuge in his mind developing these methods. Some of the methods are not new and have been used for thousands of years. This is why there is some similarity between the Trachtenberg System and Vedic math for instance. However, Jackow felt that even these methods could be simplified further. Unlike Vedic math and other systems like Bill Handley’s excellent Speed Math where the method you choose to calculate the answer depends on the numbers you are using, the Trachtenberg System scales up from single digit multiplication to multiplying with massive numbers with no change in the method.

Multiplication is done without multiplication tables “Can you multiply 5132437201 times 4522736502785 in seventy seconds? One young boy (grammar school-no calculator) did successfully by using the Trachtenberg Speed System of Basic Mathematics.

So, with human intelligence why do we need AI, AGI, deep learning or machine learning?

Faster than a calculator, Arthur Benjamin discusses the speed of mathematics TEDxOxford

Albert Einstein is widely regarded as a genius, but how did he get that way? Many researchers have assumed that it took a very special brain to come up with the theory of relativity and other stunning insights that form the foundation of modern physics. A study of 14 newly discovered photographs of Einstein’s brain, which was preserved for study after his death, concludes that the brain was indeed highly unusual in many ways. But researchers still don’t know exactly how the brain’s extra folds and convolutions translated into Einstein’s amazing abilities.

Experts say Einstein programmed his own brain, that he had a special brain when the field of physics was ripe for new insights, that he had the right brain in the right place at the right time.

Can we all program our brains for advancement, does our civilisation really need our brains rely on AI/AGI?

Artificial intelligence is incredibly advanced, at least, at certain tasks. AI has defeated world champions in chess, Go, and now poker. But can artificial intelligence actually think?

The answer is complicated, largely because intelligence is complicated. One can be book-smart, street-smart, emotionally gifted, wise, rational, or experienced; it’s rare and difficult to be intelligent in all of these ways. Intelligence has many sources and our brains don’t respond to them all the same way. Thus, the quest to develop artificial intelligence begets numerous challenges, not the least of which is what we don’t understand about human intelligence.

Still, the human brain is our best lead when it comes to creating AI. Human brains consist of billions of connected neurons that transmit information to one another and areas designated to functions such as memory, language, and thought. The human brain is dynamic, and just as we build muscle, we can enhance our cognitive abilities we can learn. So can AI, thanks to the development of artificial neural networks (ANN), a type of machine learning algorithm in which nodes simulate neurons that compute and distribute information. AI such as AlphaGo, the program that beat the world champion at Go last year, uses ANNs not only to compute statistical probabilities and outcomes of various moves, but to adjust strategy based on what the other player does.

Facebook, Amazon, Netflix, Microsoft, and Google all employ deep learning, which expands on traditional ANNs by adding layers to the information input/output. More layers allow for more representations of and links between data. This resembles human thinking when we process input, we do so in something akin to layers. For example, when we watch a football game on television, we take in the basic information about what’s happening in a given moment, but we also take in a lot more: who’s on the field (and who’s not), what plays are being run and why, individual match-ups, how the game fits into existing data or history (does one team frequently beat the other? Is the centre forward passing the ball or scoring?), how the refs are calling the game, and other details. In processing this information we employ memory, pattern recognition, statistical and strategic analysis, comparison, prediction, and other cognitive capabilities. Deep learning attempts to capture those layers.

You’re probably already familiar with deep learning algorithms. Have you ever wondered how Facebook knows to place on your page an ad for rain boots after you got caught in a downpour? Or how it manages to recommend a page immediately after you’ve liked a related page? Facebook’s DeepText algorithm can process thousands of posts, in dozens of different languages, each second. It can also distinguish between Purple Rain and the reason you need galoshes.

Deep learning can be used with faces, identifying family members who attended an anniversary or employees who thought they attended that rave on the down-low. These algorithms can also recognise objects in context such a program that could identify the alphabet blocks on the living room floor, as well as the pile of kids’ books and the bouncy seat. Think about the conclusions that could be drawn from that snapshot, and then used for targeted advertising, among other things.
Google uses Recurrent Neural Networks (RNNs) to facilitate image recognition and language translation. This enables Google Translate to go beyond a typical one-to-one conversion by allowing the program to make connections between languages it wasn’t specifically programmed to understand. Even if Google Translate isn’t specifically coded for translating Icelandic into Vietnamese, it can do so by finding commonalities in the two tongues and then developing its own language which functions as an interlingua, enabling the translation.

Machine thinking has been tied to language ever since Alan Turing’s seminal 1950 publication “Computing Machinery and Intelligence.” This paper described the Turing Test—a measure of whether a machine can think. In the Turing Test, a human engages in a text-based chat with an entity it can’t see. If that entity is a computer program and it can make the human believe he’s talking to another human, it has passed the test.

But what about IBM’s Watson, which thrashed the top two human contestants in Jeopardy?

Watson’s dominance relies on access to massive and instantly accessible amounts of information, as well as its computation of answers’ probable correctness.

Why humans will always be smarter than AI…..

This concept of context is one that is central to Hofstadter’s lifetime of work to figure out AI. In a seminal 1995 essay he examines an earlier treatise on pattern recognition by Russian researcher Mikhail Bongard, a Russian researcher, and comes to the conclusion that perception goes beyond simply matching known patterns:

… in strong contrast to the usual tacit assumption that the quintessence of visual perception is the activity of dividing a complex scene into its separate constituent objects followed by the activity of attaching standard labels to the now-separated objects (ie, the identification of the component objects as members of various pre-established categories, such as ‘car’, ‘dog’, ‘house’, ‘hammer’, ‘airplane’, etc)

… perception is far more than the recognition of members of already-established categories — it involves the spontaneous manufacture of new categories at arbitrary levels of abstraction.
For Booking.com, those new categories could be defined in advance, but a more general-purpose AI would have to be capable of defining its own categories. That’s a goal Hofstadter has spent six decades working towards, and is still not even close.

In her BuzzFeed article, Katie Notopoulos goes on to explain that this is not the first time that Facebook’s recallbration of the algorithms driving its newsfeeds has resulted in anomalous behavior. Today, it’s commenting on posts that leads to content being overpromoted. Back in the summer of 2016 it was people posting simple text posts. What’s interesting is that the solution was not a new tweak to the algorithm. It was Facebook users who adjusted — people learned to post text posts and that made them less rare.

And that’s always going to be the case. People will always be faster to adjust than computers, because that’s what humans are optimized to do. Maybe sometime many years in the future, computers will catch up with humanity’s ability to define new categories — but in the meantime, humans will have learned how to harness computing to augment their own native capabilities. That’s why we will always stay smarter than AI.

Final thought, perhaps the major limitation of AI can be captured by a single letter: G. While we have AI, we don’t have AGI—artificial general intelligence (sometimes referred to as “strong” or “full” AI). The difference is that AI can excel at a single task or game, but it can’t extrapolate strategies or techniques and apply them to other scenarios or domains you could probably beat AlphaGo at Tic Tac Toe. This limitation parallels human skills of critical thinking or synthesis—we can apply knowledge about a specific historical movement to a new fashion trend or use effective marketing techniques in a conversation with a boss about a raise because we can see the overlaps. AI has restrictions, for now.

Some believe we’ll never truly have AGI; others believe it’s simply a matter of time (and money). Last year, Kimera unveiled Nigel, a program it bills as the first AGI. Since the beta hasn’t been released to the public, it’s impossible to assess those claims, but we’ll be watching closely. In the meantime, AI will keep learning just as we do: by watching YouTube videos and by reading books. Whether that’s comforting or frightening is another question.

Stephen Hawking on AI replacing humans:

‘The genie is out of the bottle. We need to move forward on artificial intelligence development but we also need to be mindful of its very real dangers. I fear that AI may replace humans altogether. If people design computer viruses, someone will design AI that replicates itself. This will be a new form of life that will outperform humans.’

From an interview with Wired, November 2017