Recognizing the widening gap and huge untapped potential in their economic cooperation, Russia and Africa are gearing up efforts in raising the level of trade and business, Lyubov Demidova, Deputy Chairperson of the Regional Chamber of Commerce and Industry at Moscow Region, explained in an interview with me, while emphasizing unreservedly the importance of increasing business and economic cooperation with the African countries.
She says that Russians are constantly interested in partnering with large and medium scale businesses in the African market as well as in the continuing interest of Africans to further cooperate with Russia, and further pointed out that a significant impetus to the Russian-African business cooperation was given by the visit of the then Russian leader Dmitry Medvedev to a number of African countries in June 2009.
Since then, many Russian delegations have visited the continent, the highest ranking delegation headed by Foreign Minister Sergei Lavrov to a few African countries, notably Zimbabwe where he launched the $3 billion project and in Addis Ababa, Ethiopia where he held discussion with Africa Union Commission Chairperson, Nkosazana Dlamini-Zuma, about Russia’s readiness to infrastructural development.
In 2014, Russia started a new $3 billion platinum mine about 50 km north-west of Harare, the Zimbabwean capital. The Russian project, where production is projected to peak at 800 000 ounces year, involves a consortium consisting of the Rostekhnologii State Corporation, Vneshekonombank, as well as investment and industrial group, Vi Holding, in a joint venture with some private Zimbabwe investors as well as the Zimbabwean government.
Brigadier General Mike Nicholas Sango, Zimbabwe’s Ambassador to the Russian Federation, wrote recently that Russia’s biggest economic commitment to Zimbabwe to date was its agreement in September 2014 to invest $3 billion in what is Zimbabwe’s largest platinum mine.
“What will set this investment apart from those that have been in Zimbabwe for decades is that the project will see the installation of a refinery to add value, thereby creating more employment and secondary industries,” Brigadier General Sango explained to the local media.
“We are confident that this is just the start of a Russian-Zimbabwe economic partnership that will blossom in coming years. Our two countries are discussing other mining deals in addition to energy, agriculture, manufacturing and industrial projects. Russia also continues to assist Zimbabwe in training young Zimbabweans in special-skills areas such as medicine, general engineering, agricultural engineering and many other disciplines,” Ambassador Sango added. Groundwork was laid for expanding trade and investment when Zimbabwean President Robert Mugabe met President Vladimir Putin in Moscow in May 2015.
Undoubtedly, Russia has been implementing a number of other large-scale projects with participation of Russian capital in Africa. Among them are the development of the world’s largest bauxite deposit in Guinea and an aluminium plant in Nigeria as well as oil and gas in Uganda.
Of particular importance is also the creation a Russian industrial zone in Egypt. It is expected that products of Russian companies will localize their production and will be in demand not only in the local market, but also in all regions of North and East Africa, the Middle East and Eastern Europe.
Besides projects, trade is also important. Speaking at a symposium organized by the Embassy of the Republic of Ghana as part of the Independence Day (March 6) celebration in Moscow and which was attended by the eminent group of diplomats, industry leaders, prominent international traders and analysts, Dr. Leonid Fituni, Deputy Director of the Institute for African Studies under the Russian Academy of Sciences, called on Russian authorities to take significant practical steps to provide African countries with broad preferences in trade.
He pointed out that “Russia attaches special significance to deepening trade and investment cooperation with African States, including the involvement of Russian economic operators in the implementation of infrastructure projects. It is encouraging that more Russian companies being aware of the prospects that are opening in the large market of the continent work actively in such fields as nuclear energy, hydrocarbon and metallurgy industries.”
On their part to engage Russian investors, Africans have seized efforts and shown activeness in business events (conferences, forums, seminars and exhibitions) in many cities, the latest in St. Petersburg and Yekaterinburg, in the Russian Federation. Official government representatives and private individuals from about fifteen African countries attended the IV Russian-African Forum (RAF) held on 11-14 July as part of the INNOPROM-2016 international industrial trade fair in Yekaterinburg (Urals).
According to the organizing committee, this year the African delegates represented different countries included Burkina Faso, Zimbabwe, Burundi, South Africa, Namibia, Rwanda, Senegal, Cameroon, Mozambique, Chad, Kenya, Ghana, Nigeria, Algeria and Egypt.
The “Russian – African Forum” has become an integral part of the program of the exhibition and it is no coincidence, that the African vector every year becomes more and more significant in the foreign policy of Russia, – said Russian Minister of Industry and Trade, Denis Manturov while addressing the gathering.
He expressed assertively Russia’s readiness to expand its activities in projects of nuclear energy and, oil and gas industry. “We hope that the authorities of the countries of the African continent will contribute their part in creating most favorable conditions for the development of all joint projects that we have been discussing and also here at INNOPROM,” said Denis Manturov.
As already well-known, Russian companies are interested in projects focusing on mineral extraction, the energy sector, construction of large manufacturing facilities, human resources training, healthcare development, agriculture and food security, cooperation in digital technology and communications.
The general or popular sentiments at the 2016 Russian-African forum was that Russia and Africa need a more efficient system of exchanging vital information and effective efforts have to target, first and foremost, the search for new partnerships, new ways directed at boosting the economic cooperation and at implementing the biggest and most promising projects.
Unbelievably for over two decades, Russian officials in their speeches have repeated the same identified pitfalls, speed bumps or setbacks in the bilateral relations between Russia and Africa. The Foreign Ministry published the text of Deputy Foreign Minister Mikhail Bogdanov’s speech at its official website in July 2013 which he highlighted the same decade-old problems at a session of the Urals-Africa economic forum in Yekaterinburg.
“One must admit that the practical span of Russian companies’ business operations in Africa falls far below our export capabilities, on the one hand, and the huge natural resources of the huge continent, on the other,” Bogdanov said.
“Poor knowledge of the African markets’ structure and the characteristics of African customers by the Russian business community remains an undeniable fact,” he said. “The Africans in their turn are insufficiently informed on the capabilities of potential Russian partners,” Bogdanov said.
Experts have also been looking at ways to improve trade relations and economic cooperation. For instance, Andrey Efimenko, an Expert at the Russian Chamber of Commerce and Trade said in an exclusive interview with me that CCI of Russia closely monitored the activities of Russian companies in Africa, as a number of companies – members of Chamber are implementing major investment projects in this region of the world, in particular, Renova group, Gazprombank, LUKOIL, Rosneft, etc.
“Unfortunately,” Efimenko regrettably pointed out, “some large Russian companies operating on the African market, has managed to establish itself negatively in a number of countries. This is primarily due to ignorance of cultural peculiarities of the region, the lack of social responsibility, failure to completely fulfill contractual obligations. These cases damage the image of Russia and Russian companies with further entering the African market.”
The Russian Chamber of Commerce conducted a survey of Russian companies regarding the work on the African markets has shown that in conditions of sanctions have hampered their access to financial and credit resources that could be directed to participate in the implementation of infrastructure projects, the purchase of foodstuffs and agricultural raw materials.
Certain deterrent factor is the cost of logistics from Africa to Russia and/or vice versa and weak solvency of local companies, interested in obtaining Russian products on preferential terms. Another constraint to the development of business cooperation with certain countries in the region (Guinea, Nigeria, Sierra Leone) is currently an epidemic of the Ebola virus, as well as the lack of political stability in several African countries (Chad, Nigeria, Liberia, etc), the Expert explained.
In conditions of high competition on the African markets from China, European Union and the United States believe that public-private partnership with the coordinating and steering role of the state is at this stage the key to success and the best form of development of cooperation of Russia with African countries.
An important factor in the expansion of Russian-African relations – the establishment of development institutions such as the Russian export center and Roseximbank. CCI of Russia is making serious efforts to unite the business community of the country for development of interaction with African countries.
On the initiative of the Chamber and with the support of Russian state, public and private organizations in 2009, established a Coordinating Committee on Economic Cooperation with Africa (south of Sahara) popularly referred to as AfroCom. Today, it unites more than 120 Russian organizations and companies interested in developing relations with Africa.
With the participation of the Committee are regularly conducted business activities, which are important both for the deepening of bilateral relations with individual countries, and to strengthen Russia-African relations in general. The Committee pays special attention to information work. The site completely devoted to the economy of the African continent and the development of Russian-African economic relations.
As a further step, the Africa Business Initiative (ABI) in partnership with the Institute for African Studies of the Russian Academy of Sciences, with the support of the Ministry of Foreign Affairs of the Russian Federation, are also attempting to bring together key representatives from large Russian companies, government and the academic community as a working group to focus on helping Russian companies to enter and work in Africa.
There is still high optimism. “Russia has a large scientific and technical potential, and the Moscow regions also are historically developed as industrial and scientific centers and have good opportunities to develop their export potential to Africa. I would not want to associate the current crisis in the West and in Europe with the development of relations between Russia and African States,” Lyubov Demidova wrote me in an emailed interview.
She further informed that the new regional committee will include representatives of Russian organizations and companies, from government, public and business organizations in Russia, major Russian companies which already occupied a niche in Africa, and those who plan to transact business in Africa.
The main directions of its work are to inform members of the committee, to explore the possibilities of establishing a mechanism of financial support for Russian entrepreneurs, the organization of various business activities, including conferences, seminars, business meetings to establish contacts with potential partners.
One of the most important directions in the committee’s work is working on the information back-up of the image. It consists of several components: forming a positive image of Russia and its business community, the provision of necessary business information about Africa, including the dissemination of information on tenders declared in Africa, analysis of the peculiarities of economic and socio-cultural development in Africa, reference materials about Russia and about the potential of Russian-African cooperation.
In order to bolster trade and raise economic cooperation, another new Regional Council for the Development of Economic Relations with African countries (RCDRA) was created early this February which will serve as a good mechanism for the development of fruitful cooperation in various fields.
For its part, the newly created Council will make every effort to establish large-scale, long-term and mutually beneficial cooperation and hopefully will meet the some positive results on the part of African States.
The main obstacle is insufficient knowledge of the economic potential, on the part of Russian entrepreneurs, needs and opportunities of the African region. For this, the Council hopes to help members of the business community of all African countries to address systematically issues of effective cooperation.
“The main task is to shift to a more comprehensive approach, using the extensive territorial network of the Russian Chamber of Commerce. Russia’s business should be provided with full information on economic development in African countries and their needs in order to establish an ongoing Russia-African mutually beneficial business dialogue,”she suggested.
The most promising option for solving the problem of intensification of bilateral contacts is the practical work to establish links between individual companies and business associations from both sides, which will gradually accumulate positive experience of working together, to understand the capabilities and needs of each other leading to the development of the economy with Russian and with the African side, Demidova concluded.
Currently, the turnover of trade between Russia and Africa is estimated at $2.5 billion, while imports of non-primary goods to the African continent already aggregate to $430 billion and are growing at 10-15 % a year. Nearly, in all economic sectors in African countries, Russia’s major competitors are from foreign countries especially Asia, western Europe and European Union.
Would You Like a Thirty-Hour Workweek?
Authors: Meena Miriam Yust and Arshad M. Khan
In the earliest days, foraging was key. Fruits, berries, edible plants and roots comprised a varied diet, the roots often mashed and made into meal.
Then there were days when the men — usually layabouts for foraging — would get the urge in their bellies for meat. That was when all the chatting and bonding paid off. Working together they could down a large beast and share the meat with the whole group … feasting for several days.
No nine-to-five slavery in those times, no five-day work week. That is all of recent vintage. And it leads to an unmistakable Monday morning feeling …
Millions of alarm bells sound in the wee hours of the morning, as semi-comatose individuals slide their snooze buttons hoping for a moment’s rest before the inevitable rush to the office. The weekend is over. Fun over, work beckons. Marching along like ants going to their own funeral, masses of people will soon swarm into the subway, vying for a seat in a stench-free area, surrounded shoulder to shoulder with others like them.
And for what when we know first hand that wage buying power hasn’t changed in decades while US income inequality continues to grow. Good luck to the rich who keep getting richer as the stock market booms while trends in wealth show the lower 60 percent have seen a net worth decline. Can we ever get a real wage increase? Yes, by working fewer hours for the same weekly salary when the over overtime on a few hours more would boost our financial health. More money and free time makes for a happier work and life balance. Just as raising the minimum wage, it would have an impact on pay inequality as economist Ben Zipperer made clear in his testimony before Congress last year.
For most of us, next come the Tuesday blues, that lethargic, listless feeling of no escape. Wednesdays mark the halfway point, Thursdays bring the hope of almost-Friday, and then Friday arrives with the joy of the weekend break. But soon it will be Monday morning again. The majority of our lives are spent working. The weekend leaves barely enough time for recovery, laundry, and if we’re lucky a smidgen of fun, before returning to the tedium of the five-day work week. It’s not that the powers that be are unaware of our circumstances. As long ago as 1935, the Senate Judiciary Committee held thirty-hour work week hearings but the idea failed to get traction. .
But is this weekly misery necessary? And where did it come from?
One year marks an orbit of the Earth around the sun. Months too are derived from astronomy. Five thousand years ago, the ancient Sumerian calendar had 12 months marked by the sighting of a new moon. They did not have weeks. And archaeologists have discovered a hunter gatherer calendar from Aberdeen, Scotland dating farther back from 8,000 B.C., which also appeared to mimic phases of the moon to track months.
The history of the seven-day week leads us to Babylon 4,000 years ago. With a lunar month they used seven days to represent each of the four phases of the moon, adding an intercalary day(s) to synchronize it to the actual lunar cycle. All of which worked out very well because they believed there were seven planets in the solar system and deemed the number significant. The seven-day week eventually spread to Egypt, Greece, and thence to India, China and Rome, ending up in the Gregorian calendar we use today.
The five-day work week was first introduced in a New England mill in 1908. Before this, Saturdays were a half day and Sundays a holiday.
It was not expected that humans would still be doing this a century later. John Maynard Keynes in 1930 predicted that the work week would be reduced to 15 hours, within a couple of generations, due to advancements in technology. In 2017, economist and historian Rutger Bregman put forward its feasibility by 2030 in his best seller, Utopia for Realists. A Senate subcommittee in 1965 also predicted we would be working 14-hour weeks by the year 2,000.
More recently, companies have started to study whether there are benefits to a four-day work week. Microsoft Japan recently reported the results of a four-day work week study. The company had employees work four days while receiving five-day pay. The results were striking – a whopping 40% increase in productivity. The firm also reported increased efficiency in several areas, including lower electricity and paper usage.
A New Zealand company Perpetual Guardian in 2018 experimented with a four-day work week with five-day pay. It resulted in a 20 percent increase in productivity while employees experienced a 45 percent improvement in work-life balance. The company has now made the policy permanent.
Another example is a company called Basecamp. Employees work 8 hours a day for four days. Jason Fried, the CEO, states in a New York Times op-ed that “Better work gets done in four days than in five.”
Despite the jokes about civil servants they do work, and some very hard. In a study of British civil servants, it was determined that those who worked 55 hours per week showed a comparatively greater cognitive decline some three years later than those working for 40 hours. Imagine what happens to us when we extend this to a lifetime of 40-plus-hour weeks.
The question is, do we need to work even 40 hours per week? If Keynes predicted humans would only need to work 15 hours by this point in time, and there has been an explosion of technological advancements in the last 30 years unimaginable to him — from computers to robotics to the internet and advancements in every type of engineering and medical field — then why are we still 40-hour slaves, particularly when the Basecamp example has demonstrated that 32 hours per week is equally or perhaps more productive?
Next is the question of whether even 32 hours, as at Basecamp, are necessary. David Graeber is an anthropologist at the London School of Economics. His 2018 book Bullshit Jobs: A Theory describes jobs that appear to have no useful purpose. These are far more common that one might expect. In a poll of British citizens, 37% considered their jobs meaningless. In the Netherlands, 40% of respondents believed their job had no reason to exist. Graeber defines bullshit jobs as “a form of paid employment that is so completely pointless, unnecessary, or pernicious that even the employee cannot justify its existence even though, as part of the conditions of employment, the employee feels obliged to pretend that this is not the case.”
In many of these jobs, employees sit at a desk five days a week with nothing to do. In other jobs, higher management invents tasks for subordinates to complete solely to fill their time. Some jobs exist merely for appearances. He splits them into categories, encompassing jobs with which we are all too familiar. “Flunkies” serve the purpose of making others feel superior (these include doormen, assistants, etc.). “Goons” encompass those such as the public relations professional whose job is to show the public that Oxford is a top school! “Duct tapers” are people in an organization who have to deal with its incompetence. For example, the person who handles lost luggage at an airport or addresses complaints on the phone. “Box tickers” are designed to look busy and push paper work forward. “Taskmasters” are split into two types – those that assign more bullshit work to subordinates “bullshit generators”, and those who supervise people who do not need supervision.
For the 60% of people who do not have “bullshit jobs” – studies have shown that fewer work days increases productivity and efficiency, not to mention mental well being. Companies will be more efficient, workers will work better and will be rested and refreshed, and employees will be more likely to stay in their jobs. It’s a plus-sum game if the work week is cut to 30 hours/ 4 days forthwith. Anything beyond 30 hours would be overtime, at time-and-a-half rates. The proposal is still twice John Maynard Keynes’ 15-hour expectation.
There is another very good reason for this proposal: Real wages in the US have been stagnant since the 1960s while the GDP is up over four fold and the stock market Dow is up about ten times, also in real terms i.e. after allowing for inflation. It means stock and asset holders have been getting much, much richer while the working sucker is getting nowhere. Cutting the work week down is a fair way to get part way (a very small part) even. It is 25 percent less work and a one-third real increase in wages making a minor dent in the horrendous inequality in the US, which happens to be way ahead in this dubious honor among all developed countries.
It is a long time since the hunter gatherers of Scotland or the Babylonians. Their week remains ingrained, and the weekend created thousands of years later expanded from the Biblical single day of rest to one-and-a-half days in England, and then finally to two in New England at the beginning of the 20th century. A hundred years later, is it not high time we advanced to three days? Or perhaps to diminish the chances of worse Monday morning blues, it might be better to work two days, have a day off, then two more days of work before the regular weekend. Humans were not designed for undue stress, we were designed for leisure, to be gathering food as we need it, and occasionally hunting, as the Scots mentioned earlier, and others of our ancestors did happily for generations.
Authors’ Note: This article first appeared on Truthout.org in a shorter edited version.
Banks and Artificial Intelligence
“Artificial Intelligence” is a terminology specifically invented in 1956 by John McCarthy and concerns the ability to make appropriate generalizations quickly, but based on an inevitably limited set of data.
The wider the scope and the faster conclusions are drawn, and with minimal information, the smarter the machine’s behaviour can be defined.
Intelligence is the creative adaptation to quick changes in the environment. This is the now classic definition, but in this case, with machines, the speed and the increasingly narrow base of the starting data are also evaluated.
What if the starting data does not contain exactly the necessary information – which is possible? What if, again, the speed of the solution stems from the fact that the data collected is too homogeneous and does not contain the most interesting data?
Konrad Lorenz, the founder of animal ethology, was always very careful to maintain that between instinctive behaviour and learned behaviour, external environmental and genetic sources can be equally “intelligent”. The fact, however, is that greater flexibility of a behaviour – always within a reasonable time, but not as quickly as possible – generates greater intelligence of the animal.
As said by a great student of Lorenz, Nikko Tinbergen, human beings are “representational magpies”, which means that much of their genetic and informative history has no practical value.
When the collection of information becomes easy, the “adaptive” magpie has a very adaptive behaviour, but when the data collection is at the maximum, all data counts and we never know which, among this data, will really be put into action.
In other words, machine data processing is a “competence without understanding”, unless machines are given all senses – which is currently possible.
Human intelligence is defined when we are at the extreme of physically possible data acquisition, i.e. when individuals learn adaptive-innovative behaviour from direct imitation of abstract rules.
Abstract rules, not random environmental signals.
If machines could reach this level, they would need such a degree of freedom of expression that, today, no machine can reach, not least because no one knows how to reach this level; and how this behaviour is subsequently coded.
What if it cannot be encoded in any way?
The standardization of “if-then” operations that could mimic instincts, and of finalized operations (which could appear as an acquired Lorenz-style imprinting) is only a quantitative expansion of what we call “intelligence”, but it does not change its nature, which always comes after the particular human link between instinct, intelligence and learning by doing.
Which always has an accidental, statistical and unpredictable basis. Which duck will be the first to call Konrad Lorenz “dad”, thus creating a conditioning for the others? No one can predict that.
If systematized, bio-imitation could be a way to produce – in the future – sentient machines that can create their own unique and unrepeatable intelligent way to react to the environment, thus creating a one and only intelligent behaviour. Will it be unique?
However, let us go back to Artificial Intelligence machines and how they work.
In the 1980s there was the first phase of large investment in AI, with the British Alvey Program; the U.S. DARPA Program spending a billion US dollars on its Strategic Computing Initiative alone; finally the Japanese Fifth Generation Computer Project, investing a similar amount of money.
At the time there was the booming of “expert systems”, i.e. symbolic mechanisms that solved problems, but in a previously defined area.
From the beginning, expert systems were used in financial trading.
There was the hand of the expert system in the fall of the Dow Jones Industrial Average by 508 points in 1987. In 1990, however, Artificial Intelligence also began to be used in the analysis of financial frauds, with an ad hoc program used by the Financial Crimes Enforcement Network (FinCEN), especially with the possibility to automatically review 200,000 transactions per week and to identify over 400 illegal transactions.
Machine learning, the model on which the most widely used AI financial technology relies, is based on a work by McCullogh and Pitts in 1943, in which it was discovered that the human brain produces signals that are both digital and binary.
A machine learning system is composed, in principle, by: 1) a problem; 2) a data source; 3) a model; 4) an optimization algorithm; 5) a validation and testing system.
In 2011, deep learning (DL) added to the other “expert” systems.
It is a way in which machines use algorithms operating at various separate levels, as happens in the real human brain. Hence deep learning is a statistical method to find acceptably stable paradigms in a very large data set, by imitating our brain and its structure in layers, areas and sectors.
As explained above, it is a mechanism that “mimics” the functioning of the human brain, without processing it.
DL could analyse for the first time non-linear events, such as market volatility, but its real problem was the verification of models: in 2004 Knight Capital lost 440 million US dollars in 45 minutes, because it put into action a DL and financial trading model that had not been tested before.
In 2013, during a computer block of only 13 minutes, Goldman Sachs flooded the U.S. financial market with purchase requests for 800,000 equities. The same week., again for a computer error, the Chinese Everbright Securities bought 4 billion of various shares on the Shanghai market, but without a precise reason.
Between 2012 and 2016, the United States invested 18.2 billion US dollars in Artificial Intelligence, while only 2.6 were invested by China and 850 million US dollars by the United Kingdom in the same period.
The Japanese Government Pension Savings Investment Fund, the world’s largest pension fund manager, thinks it can soon replace “human” managers with advanced Artificial Intelligence systems.
BlackRock has just organized an AILab.
In 2017, however, China overtook the United States in terms of AI startups, with 15.2 billion funding.
China now has 68% of AI startups throughout Asia, raising 1.345 billion US dollars on the markets for their take-off.
China has also overtaken the United States in terms of Artificial Intelligence patents over the last five years.
Nevertheless, considered together, the USA and China still account for over 50% of all AI patents worldwide.
China also dominates the market of patents on AI technology vision systems, while deep learning data processing systems are now prey to the big global companies in the sector, namely Microsoft, Google and IBM. Similar Chinese networks are rapidly processing their new “intelligent” data collection systems, also favoured by the fact that the Chinese population is about twice as much as the US population and hence the mass of starting data is huge.
The Chinese intelligence industry zone near Tianjin is already active.
In the end, however, how does Artificial Intelligence change the financial sector?
AI operates above all in the trading of securities and currencies in various fields: algorithmic trading; the composition and optimization of portfolios; validation of investment models; verification of key operations; robo-advising, namely robotic consultancy; the analysis of impact on the markets; the effectiveness of regulations and finally the standard banking evaluations and the analysis of competitors’ trading.
Algorithmic trading is a real automatic transaction system – a Machine Learning program that learns the structure of transaction data and then tries to predict what will happen.
Nowadays computers already generate 70% of transactions in financial markets, 65% of transactions in futures markets and 52% of transactions in the public debt securities market.
The issue lies in making transactions at the best possible price, with a very low probability of making mistakes and with the possibility of checking different market conditions simultaneously, as well as avoiding psychological errors or personal inclinations.
In particular, algorithmic trading concerns hedge funds operations and the operations of the most important clients of a bank or Fund.
There are other AI mathematical mechanisms that come into play here.
There is, in fact, signal processing, which operates by filtering data to eliminate disturbing elements and observe the development trends of a market.
There is also market sentiment.
The computer is left completely unaware of the operations in progress, until the specific algorithm is put to work – hence the machine immediately perceives the behaviour of supply and demand.
There is also the news reader, a program that learns to interpret the main social and political phenomena, as well as pattern recognition, an algorithm teaching the machine to learn and react when the markets show characteristics allowing immediate gains.
Another algorithm is available, developed by a private computer company in the USA, which processes millions of “data points” to discover investment models or spontaneous market trends and operates on trillions of financial scenarios, from which it processes the scenarios deemed real.
Here, in fact, 1,800 days of physical trading are reduced to seven minutes.
However, the algorithms developed from evidence work much better than human operators in predicting the future.
Artificial Intelligence works as a prediction generator even in the oldest financial market, namely real estate.
Today, for example, there is an algorithm, developed by a German company, that automatically “extracts” the most important data from the documents usually used to evaluate real estate transactions.
In Singapore, Artificial Intelligence is used to calculate the value of real estate property, with a mix of algorithms and comparative market analysis. Man is not involved at all.
As to corporate governance, there are AI programs that select executives based on their performance, which is analysed very carefully.
What is certainly at work here is the scientist and naive myth of excluding subjectivity, always seen as negative. The program, however, is extremely analytical and full of variables.
Artificial Intelligence is also used in the market of loans and mortgages, where algorithms can be processed from an infinity of data concerning clients (age, work, gender, recurrent diseases, lifestyles, etc.) and are linked to operations – always through an algorithm – which are ordered, without knowing it, from one’s own mobile phone or computer.
So far we have focused on Artificial Intelligence algorithms.
But there is also quantum computing (QC), which is currently very active already. Its speed cannot be reached by today’s “traditional” computers.
It is a more suitable technology than the others to solve problems and make financial forecasts, because QC operates with really random variables, while the old algorithms simply simulate random variables.
Quantum computing can process several procedures simultaneously, and these “coexistence states” are defined as qubits.
In a scenario analysis, QC can evaluate a potentially infinite set of solutions and results that have been randomly generated.
An extremely powerful machine which, however, cannot determine exactly – as it also happens to slower machines – whether the scenario processed corresponds to human interests (but only to the initial ones known by the machine) or whether the procedure does not change during operations.
The Reckoning: Debt, Democracy and the Future of American Power- Book Review
Authors: Junaid R.Soomro and Nadia Shaheen
The chapter is written by Michael Moran in which he discussed about the relations between the economic institutions with the other institutions of the state. A state is a combination of many institutions that work together as a single body to make the state run accordingly. Political and economic institutions are two major components of the state. Politics and economy somehow depend on each other from a very long time. The both concepts are old and influenced by each other. The major changes occurred after the industrial revolution that gave birth to new tactics and opportunities to the economy. Earliest, before the French Revolution the economy was controlled by the elites that were the political identities. This is the example that how those bourgeois controlled the economic structure of the state and how they shape or influence the economical aspect of the society. These involvements of both disciplines gave birth to a new subject that is known as the political economy of the states, that how political and economic policies influence each other because it is not possible for any institution to work separately. The economic institutions shape the economic structure of the state and it is controlled by many aspects, including the political institutions, the economic regulations, the political structure of the state that somehow effects the economic institution of the state.
The chapter tells us that how economic institution and other institutions are interconnected.
Firstly, the focus is on the political institutions. The recognitions of an economic institution as a political act. The “politics” and “market” are somehow interconnected. It’s not because the political institutions shape the fate of economy, but the economy shapes it as well. From the start of the history these two aspects are there and depend on each other. We can see it through the examination of the history that how the political elites dominated the society because they were also superior financially. The political institutions somehow legitimize the economic institutions. According to “Godin” different preoccupations drive inquiry in different disciplines: for instance, choice in economy and the power in the politics.
Secondly the focus is the connection between institutionalism and the economic institutions.
The institutions are constructs of human mind, we cannot see or feel them. The regulations and the market grew up together. The current world politics is an example that how the regulations affect the economy and shape it as different stats can be taken as a model who are following the regulations. The institutions determine the opportunities of the society and in result the organizations are made in order or take benefit of those opportunities. There are several parallels that shape the behavior of the institutions that later affects the other institutions including the economic institution.
Thirdly, the connection between the economic institutions and the regulations.
The regulations are made to control the behavior of the institutions. This faced major change after the industrial revolution when many regulations were made that were supposed to control the outcomes of the institutions. We cannot run from globalization, this is the reason that the concept is not the same as it was in the past, but it came up with the new characteristics. Mainly the evolution in the middle of the twentieth century created a paradigmatic shift in the relationship of economic and political institutions. There are agencies with in the states that regulates the working on an institution and on the international level there are multinational corporations. This gives us two basic concepts. The first is uncertainty about the boundaries between the politics and economy, and the second is the importance of the agencies that fills the space and regulates the institutions.
Fourthly, the connection between the economic institutions and the capitalism.
Capitalism and the economy are directly connected with each other because the industrial revolution triggered the economy. Industries were made after the revolution and the world faced a new era of progress and economic change. The modern organizations are the basics that can be taken as the source of understanding the modern political economy. Industries were made after the industrial revolution that mainly works on the productivity, the more the productions are the more it will benefit. This era was a game changer for the economic aspect of the society and later it the economic institutions modified themselves.
Fifthly, the economic institutions and the democratic government.
The connection between democratic political institutions and the economic institution is complex. It depends that how far democratic government can try to constrain the operations of the economic institutions or how far the economic institutions can try the constrain the operation of the democratic government. the basic aspect of the relation is the relationship between the democracy and the market order. The control of the trade union and the control of the business. There are several problems such as the tussle between the capitalist institution and the democratic institution. There are several measures that can make both sides work together. The democratic governments usually believe on large economic interests and they also shape it according to their interests. There come the institutional regulations that regulates the behavior of these institutions in the particular manner.
State is made of many institutions. All the institutions work together this is the reason they depend on each other to work properly. The economic institution is the important institution of the state that makes it stand on its own. Today the examples are in front of us, those states th at has the best economic structures are now ruling the world. USA is the major power but with the passage of time new economic powers are competing with each other. The institutions regulate the behaviors but there are negative aspects when people use the institutions for their benefits. After the industrial revolutions there were merits and demerits. It depends on how one regulates the authority. If the institutions work properly the whole structure can be run perfectly but the interference that affects the institutions negatively can damage the structure. Today in the world where the concept of politics and economy is so dominant it is very important to regulate the bodies properly.
About the Author
Michael E. Moran (born May 1962 in Kearny, New Jersey) is an American author and analyst of international affairs he is also a digital documentarian who has held senior positions at a host of media, financial services, and consulting organizations. A foreign policy journalist and former partner at the global consultancy Control Risks, he is author of The Reckoning: Debt, Democracy and the Future of American Power, published in 2012 by Palgrave Macmillan. He is co-author of ‘The Fastest Billion: The Story Behind Africa’s Economic Revolution’. Moran served as Editor – in-Chief at the investment bank Renaissance Capital and has been a collaborator of renowned economist Nouriel Roubini as well commentator for Slate, the BBC and NBC News. He is also an adjunct professor of journalism at Bard College, a Visiting Fellow in Peace and Security at the Carnegie Corporation of New York, and conceived of and served as executive producer of the award-winning Crisis Guides documentary series for the Council on Foreign Relations.
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