“The Great Decoupling”: National Wealth and Individual Well-being

McKinsey writes about “The Great Decoupling“:

The Quarterly: How would that work? Are you referring to some sort of wage insurance?

Robert Shiller: Insurance is a fundamentally important concept. Whether it’s provided by the private sector or the government, it’s an organized response to uncertainty that affects individuals. Wage insurance is one form that has been experimented with by the US government, in fact, in an effort to deal with the problem that globalization is taking jobs out of the country. But it hasn’t been experimented with very much yet. I think we could have a much more comprehensive system of wage insurance. And we can do it without moral hazard if we manage it right.

I would argue that any sort of large, complex insurance program would be subject to some sort of moral hazard. However, it is also true that a wealthy society with volatile economics should, generally speaking, have different mores about work and livelihood than a poor society or a wealth society with stable economics.

Read more about this image at The Dish.


Conceptualizing privacy

"Journalists, politicians, jurists, and legal academics often describe the
privacy problem created by the collection and use of personal information
through computer databases and the Internet with the metaphor of Big Brother—
the totalitarian government portrayed in George Orwell’s Nineteen Eighty-Four.
Professor Solove argues that this is the wrong metaphor. The Big Brother
metaphor as well as much of the law that protects privacy emerges from a
longstanding paradigm for conceptualizing privacy problems. Under this
paradigm, privacy is invaded by uncovering one’s hidden world, by surveillance,
and by the disclosure of concealed information. The harm caused by such
invasions consists of inhibition, self-censorship, embarrassment, and damage to
one’s reputation. Privacy law has developed with this paradigm in mind, and
consequently, it has failed to grapple effectively with the database problem.
Professor Solove argues that the Big Brother metaphor merely reinforces this
paradigm and that the problem is better captured by Franz Kafka’s The Trial.
Understood with the Kafka metaphor, the problem is the powerlessness,
vulnerability, and dehumanization created by the assembly of dossiers of
personal information where individuals lack any meaningful form of
participation in the collection and use of their information. Professor Solove
illustrates that conceptualizing the problem with the Kafka metaphor has
profound implications both for the law of information privacy and for choosing
legal approaches to solve the problem."


Our Online Selves

The Economist, on the relevance of the fact that privacy issues do not line up neatly along the right-left divide:

The fact that these issues don’t have a clear ideological colouration yet is important because they are among the most crucial issues of the 21st cen
tury. They are crucial because our identities and social selves, in this century, increasingly reside online. They are crucial because money, in this century, increasingly accrues to holders of intellectual property, particularly to those who control the ways we engage in online commerce—the very same companies (Google, Yahoo, Apple, Verizon) that hold the databases which the NSA accesses via PRISM. In this century, digital knowledge is the key to both property and power. Good algorithms and massive amounts of data are what you need to have in order to succeed in retail, to defend your country from attack, or to run a successful presidential campaign. 

Cyber-Attacks on Lockheed Martin

You may have read by now about recent cyber-attacks on defense contractor Lockheed Martin.  The following quote, from Anup Ghosh, “a former senior scientist at the Pentagon’s Defence Advanced Research Projects Agency who worked on securing military networks” stuck me especially:

“I think it tells us that DHS [the US Department of Homeland Security] doesn’t know much about what’s going on.”

The increasing level of organization of cyber-attacks can surely be met, in some measure, by improved technology and increased vigilance.  But do centralized organizations such as Lockheed attract too much attention to be sustainable in a future in which the barriers to entry for sabotage are lower?  And can weapons of war, for instance, be reliably developed in organizations that are anything other than centralized?