The Undercover Economist Follows Up My Podcast Suggestion

As you know, my religion is skepticism. I flatter myself that even in front of the pearly gates, I would be withholding judgment up until the moment I am really, really ushered into the eternal hereafter of bliss, seventy-two virgins and all the pepperoni pizza you can eat. I was not educated as a scientist, but I have a healthy admiration for science as a type of controlled skepticism. Now, for the practicing skeptic, there is no better brain fodder than Tim Harford’s More or Less podcast on the BBC. Harford is perhaps best known as the author of the highly recommendable Undercover Economist, one of the pop economy books for general audiences that have become so popular in the past decade and which spawned the column on the Financial Times of the same name. The More or Less program is not directly concerned with economics; rather, it mainly consists of minute analyses of statistical data that generally conclude that most of the figures bandied about in the media and by pundits are pretty much rubbish. (If you are into finding out what drives skeptics to be so caustic about the media in general, I can’t resist plugging Guardian columnist Ben Goldacre’s Bad Science: Quacks, Hacks, and Big Pharma Flacks).

Now, some weeks ago, President Hugo Chávez of Venezuela stated that the fact that he, President Lugo of Paraguay, former president Luiz Inácio “Lula” Da Silva of Brazil, current President Dilma Roussef of Brazil, and President Cristina Fernández de Kirchner of Argentina all got cancer was evidence of (wait for it) a secret CIA plot. Although Chávez has accustomed world media to batshit claims, this was outrageous enough to warrant some passing coverage. (A friend of mine joked that maybe Chávez will make his next few appearances covered in aluminum foil to ward off the CIA’s top secret cancer ray). Anyhoo, the incident is indicative of the distortion of reality and reason that is a feature of daily life under the Bolivarian Revolution. A statement that would have previously led people to question the mental health of the head of state is just a weird little footnote to fill up some air time. Another feature of the statement is that it is typical of the extreme paranoia that characterizes the Latin American left: the CIA as an all-powerful, hidden demiurge that controls everything. This creates the same problems that the concept of evil creates for the idea of an omnipotent God. If the U.S. spy agency is all-powerful, how did it allow episodes such as the Mexican Revolution, the Cuban Revolution, Chávez, Morales, Lugo, Juan Domingo Perón, etc., etc., etc.? It reminds me of a line in De Niro’s Good Shepherd, where one character asks why you never place a definite article before CIA, and another one responds: "Do you put the word 'the' before God?" (Back in the fifties, the acronym CIA was not preceded by a definite article, contrary to the case now.)

Therefore, a bunch of aging leftist Latin Americans get cancer and the best hypothesis is that the CIA has a cancer ray. William of Ockham must be rolling in his grave. Not being a statistician, I am unable to work out the probability. So I wrote to Harford and suggested that this claim was right up the alley of the More or Less team. He agreed and devoted the first part of this week’s podcast to the issue. And here it is:

http://www.bbc.co.uk/podcasts/series/moreorless

Miguel Llorens is a freelance financial translator based in Madrid who works from Spanish into English. He is specialized in equity research, economics, accounting, and investment strategy. He has worked as a translator for Goldman Sachs, the US Government's Open Source Center, and H.B.O. International. To contact him, visit his website and write to the address listed there. You can also join his LinkedIn network by visiting the profile or follow him on Twitter.

Big Data: Another Silicon Valley Fad

George: If it was a regular salad, I wouldn’t have said anything. But you had to have the BIG SALAD!

(Seinfeld)

One of the narratives of the current tech bubble is closely related to the Content Big Bang. This explosion of data (aside: I don’t think text is necessarily “content” and much less data) is at once a challenge and an opportunity. According to this piece of groupthink, although managing the deluge of data and storing it is a problem, harnessing this flood of bits and bytes provides manifold insights for data mining. More powerful computing technology, we are told, will open the doors of this future.

But guess who was also a fan of Big Data? The preeminent military strategist of the past twenty years. No, not David Petraeus. I mean Donald "Unknown Unknowns" Rumsfeld. Tim Harford writes in a recent essay to promote his new book, Adapt, that the early (failed) Pentagon strategies in Iraq focused on routing tons of combat data to central headquarters, which processed it and then spit out tactical recommendations like a real-time version of Risk:

It is also a story about the role of technology in decision-making. The U.S. military placed increasing emphasis on the use of “effects based analysis of operations” – using massive amounts of data and computing power to allow commanders at headquarters to absorb information and react quickly, moving units around like chess pieces. Such techniques are hugely useful in some circumstances – a “shock and awe” campaign – but even then they do not always perform as advertised. We’re now discovering that in many campaigns, it is the decision maker on the ground – a captain or even a regular soldier – who has the information that counts and the ability to use it.

Now I know why Amazon keeps giving me such crappy recommendations after over a decade of feeding it data.


Miguel Llorens is a freelance financial translator based in Madrid who works from Spanish into English. He is specialized in equity research, economics, accounting, and investment strategy. He has worked as a translator for Goldman Sachs, the US Government's Open Source Center and H.B.O. International, as well as many small-and-medium-sized brokerages and asset management companies operating in Spain. To contact him, visit his website and write to the address listed there. Feel free to join his LinkedIn network or to follow him on Twitter.