Exploring mainly Heterodox Economics, Monetary Reform, Environmental Sustainability, and relevant Emerging Climate ChangeTechnologies. It is a resource of Internet articles, and also promotes awareness of a futuristic modern universal Paradigm known as TFE, or Transfinancial Economics which is arguably the most advanced, and most "scientific" form of Economics in the world. Modern Monetary Theory( MMT) which is similar to TFE is far less advanced .
Andy Haldane, BoE chief economist, says economists should embrace data flood
It should be said here that Andy Haldane also knows about Transfinancial Economics, and the notion of "mapping the economy in real time..." is clearly indicated in the following article. Though Big Data is part of the TFE Paradigm it is only part of the whole picture for a modern futuristic economics... See https://wiki.p2pfoundation.net/Transfinancial_Economics
The goal of mapping economic activity in real time, just as we do for weather or traffic, is “closer than ever to being within our grasp”, according to Andy Haldane, the Bank of England’s chief economist. In recent years, “data has become the new oil . . . and data companies have become the new oil giants”, Mr Haldane told an audience at King’s Business School earlier this month and released on Monday. But economics and finance have been “rather reticent about fully embracing this oil-rush”, partly because economists have tended to prefer a deductive approach that puts theory ahead of measurement. This needs to change, he said, because relying too much on either theory or real-world data in isolation can lead to serious mistakes in policymaking — as was seen when the global financial crisis exposed the “empirical fragility” of macroeconomic models.
Parts of the private sector and academia have been far swifter to exploit the vast troves of ever-accumulating data now available — 90 per cent of which has been created in the last two years alone. Massachusetts Institute of Technology’s “Billion Prices Project”, name-checked in Mr Haldane’s speech, now collects enough data from online retailers for its commercial arm to provide daily inflation updates for 22 economies. The Alan Turing Institute — the UK’s new national institute for data science — runs a programme, with funding from HSBC, which aims to use new data to measure economic activity faster and more precisely than was previously possible. National statisticians are taking tentative steps in the same direction. The UK’s Office for National Statistics — which has faced heavy criticism over the quality of its data in recent years — is experimenting with “web-scraping” to collect price quotes for food and groceries, for example, and making use of VAT data from small businesses to improve its output-based estimates of gross domestic product. In both cases, the increased sample size and granularity could bring considerable benefits on top of existing surveys, Mr Haldane said. The BoE itself is trying to make better use of financial data — for example, by using administrative data on owner-occupied mortgages to better understand pricing decisions in the UK housing market. Recommended Analysis UK politics & policy Starting gun prepped in race to replace Mark Carney at Bank of England Mr Haldane sees scope to go further with the new data coming on stream on payment, credit and banking flows. “Almost all economic activity leaves a financial footprint,” he said. “In time, it is possible that these sorts of data could help to create a real-time map of financial and activity flows across the economy, in much the same way as is already done for flows of traffic or information or weather.
Once mapped, there would then be scope to model and, through policy, modify these flows.” New data sources and techniques could also help policymakers think about human decision-making — which rarely conforms with the rational process assumed in many economic models. Data on music downloads from Spotify, used as an indicator of sentiment, has recently been shown to do at least as well as a standard consumer confidence survey in tracking consumer spending. “Why stop at music?” Mr Haldane asked. He saw potential to create a gaming environment “to explore behaviour in a virtual economy where players can spend or save, and one could test their reactions to monetary and regulatory policy intervention”.
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The blockchain (more accurately called “distributed ledger technology”) has long been a fixation for nerds of all stripes, but lately the real world has been taking notice as well. No longer solely the domain of crypto-security nuts and techno-utopians looking to restart society on a sea platform, the inherently prosaic new software technology has enough real-world potential for change that it’s beginning to appeal even to large corporate interests and other traditionally stodgy groups. New applications are being driven by the large hubs for tech progress you’d expect, your IBMs and your MITs, but recent entrants also include major diamond mining companies, several of the largest banks on Wall Street — and recently, even governments. From organizing municipal services in China to distributing excess grid power in New York, there are widespread experiments in farming out the minutia of governance to distributed software.
Now, the UK is testing the most intriguing example yet: blockchain-based tracking of welfare spending.
This is a bit of a weird one in the modern history of the blockchain. Whether it’s micro-trading stocks down to the millisecond or coordinating drivers in a car-share fleet, for the most part the blockchain’s past practical applications have achieved something we’ve already been doing in the past, just easier, faster, with greater security, or with fewer human employees. What we’re talking about here, on the other hand, is a fundamentally new thing: the ability to use software as a government agent, and thus the ability to assign “government agents” to achieve all new levels of social understanding, and social control.
The proposition is simple: have a blockchain-based system monitor exactly where the money handed out to welfare recipients is being spent. That’s it. It’s always been possible on the small scale, but difficult to impose as a wide ranging policy for two main reasons: There are way too many people receiving welfare for human-driven oversight to be practical, and because people are inherently resistant to the idea of a human being following another’s financial life like that.
Distributed ledgers can undoubtedly remove the first problem, providing a means to actually deliver oversight on the scale required — but can it, and should it, remove the second problem?
A big issue is security. One thing that makes distributed ledgers secure is that they are publicly viewable, and long-lived by being distributed across many computers. As we’ve seen over and over in the past several years, however, no security regime in flawless. And even if it is flawless today, the information indexed in that ledger remains sensitive for a long time, meaning that some future computing breakthrough could retroactively expose a bunch of people who aren’t even receiving welfare any more!
IBM and other giants of industry and business are working to fix the problems that continue to make distributed ledgers impractical in many cases.
There’s a fairly simple fix for this, however: use only non-identifying signifiers for welfare recipients in the ledger itself, and maintain the database of signifier-to-legal-name associations on a more classically protected government database unconnected to the ledger itself. Any attacker would need both the ledger info and the database of associations — and if we’re worried about attackers getting our information from classically secured government databases, we need to worry about a lot more than stolen welfare tracking.
At that point, the biggest problem is corruption on the part of people who are supposed to be able to have access to that information — and that’s not a threat many Westerners are going to be willing to bear in the age of surveillance.
The bigger issue is not the security of the data, but the use of it. So, you’ve tracked welfare spending — what now? The obvious application is to take punitive measures against those who misspend, to lower the payment amount as a disincentive to spend poorly, and to lower waste of money intended for the essentials.
Ethereum is an attempt to build an entire online platform in a distributed ledger.
According to a UK government report released earlier this year, “the [Department of Work and Pensions] pays out roughly £166 billion of taxpayer’s money in welfare support per year. Some £3.5 billion of that sum is overpaid through fraud (£1.2 billion), claimant error (£1.5 billion) and official error (£0.7 billion) 2 of which £930 million is recovered.”
To outright reject this proposition, on ideological and not practical grounds, seems to fundamentally misunderstand what welfare is. It’s not a statement that the poor should always have money, but that the poor should always have the essentials — if the idea is that the most efficient, effective, and humanitarian way of doing that is to provide the money necessary to acquire those essentials, then it’s not irrational to want to check whether the funding is actually having that effect. If someone is habitually spending a welfare check on frivolous things, then depriving them of the check deprives them only of frivolous things.
However, given the passion that currently exists for privacy and digital liberty, it seems far more likely that any such spending-tracking system would have to be fully anonymized to be implemented on a wide scale. It would track statistical-level trends in welfare spending, following faceless numbers and looking at population-level spending habits. This could have all kinds of utility without having to record who buys what, when.
There is also the fact that distributed ledgers require computational time to be donated, which classically means that inclusion of a crypto-currency in the system. Many people say that the blockchain was the technology that allowed Bitcoin to exist, but it’s just as true to say that Bitcoin is the technology that allowed the blockchain to exist. The acquisition and trading of cryptocurrencies with real monetary value is what motivates users to do the hard work of keeping crypto-currencies crypto-currencies, and thus secure.
UK Prime Minister David Cameron has made killing encryption a major initiative.
In the case of a welfare distribution scheme, this means that the recipients would be using a digital currency to make their welfare purchases — not so much physical food stamps as digital stuff stamps. Adoption wouldn’t be the biggest problem, since a government could theoretically require some or all business to accept their crypto-currency when offered. There are some nice aspects to this right off the bat, such as that drug dealers and other frequent recipients of misspent welfare funds are likely to have a harder time redeeming government crypto-bucks than supermarkets and children’s clothing stores.
Food stamps have some pretty major downsides associated with them, more notably the stigma associated with receiving and spending them. A digital stamp could possibly alleviate that, making the use of this welfare currency visually indistinguishable from the use of, say, Apple Pay. It could also do away with the restrictive nature of physical service vouchers, allowing people to, say, hunt for a good deal online and make a purchase without having access to credit.
It’s tough to convince people to let you track them openly, when they know that you’ve already been tracking them in secret for so long.
The people who should really be looking at this sort of technology with interest are those who are into the concept of a guaranteed minimum income. One of the strongest arguments against such a scheme is the institutional and bureaucratic waste that would be associated with such a massive government project, but a sufficiently advanced public ledger might be able to handle it. Privacy and security becomes infinitely more important at that point.
The current, relatively primitive level of advancement in the software could actually undercut it from a cost-saving perspective, as cryptographically securing all these transactions and could take an enormous amount of electrical power. Unless the distributed ledger system itself is improved, this and most other applications of it will be pretty much unachievable on a large scale. But with so many big powers working to get a more efficient solution in place, it makes perfect sense to be thinking ahead to the potentially revolutionary ways we might apply it, once we’re able.
This is a bit of a weird one in the modern history of the blockchain. Whether it’s micro-trading stocks down to the millisecond or coordinating drivers in a car-share fleet, for the most part the blockchain’s past practical applications have achieved something we’ve already been doing in the past, just easier, faster, with greater security, or with fewer human employees. What we’re talking about here, on the other hand, is a fundamentally new thing: the ability to use software as a government agent, and thus the ability to assign “government agents” to achieve all new levels of social understanding, and social control.
