For those who are in higher education they will appreciate the section
on Education’s Gini. In the old days, professors worked with a few hundred
students but online education is about to make the super professor. These are
the professors that reach out and touch thousands of students at one time. The
industry is in the process of making its way into the mainstream and developing new technology.
Of course, the age old problem of variability in human behavior has not
been resolved. Alan Greenspan is amazed at how these animal spirits have been
defined by regression analysis and human actions are very much closer to being refined
for economic analysis. If we were to develop better economic models that
include the animal spirits along with economic modeling we will have better
projections for development.
In particular his call for the restructuring of American’s
infrastructure makes sense in light of recent changes. Our excessive debt has damaged short-term spending and long-term productivity while not leaving
enough to fix our antiquated system.
Roads have not kept up with the cars and the ecological efficiency of
potential technology has not been fully exploited. We are patch working an older system without embracing
the new.
He further goes on to discuss the nature of macro-forecasting and how
it has grown in influence. In the
distant past the process of forecasting was a private affair among business
people trying to reduce risk. The age of big data is coming on us and those who
can master this data are more likely to be successful. The end of WWII and
Keynesian economic explanations helped solidify this trend. Today’s data makes it a reality.
The book is interesting in a number of ways and there is much to gather
out of it. Like Alan Greenspan, I agree that the time when an overhaul of our
economic system is likely. With rising income disparity, technology development,
and big data analysis the need to tie people to the system is even more
important for international competitiveness. A time may soon come when
government becomes more transparent with data, investment risk is reduced
through better information, and people are tied to the system through
innovative entrepreneurship both in their own and within other’s companies. Education will need to change to help ensure
that the high technological skills, innovative spirit and developed analytic skills will be
available. Infrastructure will need to tie people together in ways not seen at
any time in history in order to create a better pipeline of transformational
products and services.
Greenspan, A. (2013). Map and the Territory-Risk, Human Nature,
and the Future of Forecasting. NY:
Penguin Press.
