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perhaps of greatest significance from the perspective of Civil Society and of communities is the overall absence of measurement and thus inclusion in the economic accounting of the value of the contributions provided to, through and on the Internet of various voluntary and not-for-profit initiatives and activities. Thus for example, the millions of hours of labour contributed to Wikipedia, or to the development of Free or Open Source software, or to providing support for public Internet access and training is not included as a net contribution or benefit to the economy (as measured through the GDP). Rather, this is measured as a negative effect since, as some would argue, those who are making this contribution could be using their time and talents in more “productive” (and “economically measurable”) activities. Thus for example, a region or country that chooses to go with free or open source software as the basis for its in-school computing is not only “not contributing to ‘economic well being’” it is “statistically” a “cost” to the economy since it is not allowing for expenditures on, for example, suites of Microsoft products.

there appears to have been no systematic attention paid to the relationship of the activities and growth of voluntary contributions to the Internet and the volume, range and depth of Internet activity, digital literacy and economic value being derived from the use of the Internet.

The participants who lived long, happy lives "were not cynical rebels and loners" but accomplished people who were satisfied with their lives. Many knew that worrying is sometimes a good thing. The authors also looked at a study of Medicare patients that found that "neuroticism was health-protective."

spending 30 minutes at least four times a week expending energy at a moderate to intense level is "good up-to-date medical advice but poor practical advice."

Being active in middle age was most important to health and longevity in the study. But rather than vow to do something to get in shape (like jogging) and then hate it and not stick with it, find something you like to do."We looked at those who stayed active," Friedman says. "It wasn't the kids on sports teams. It's the ones who had activities at one point and had the pattern of keeping them ... They were doing stuff that got them out of the chair ... whether it was gardening, walking the dog or going to museums."

One of the best childhood personality predictors of longevity was conscientiousness — "qualities of a prudent, persistent, well-organized person, like a scientist or professor — somewhat obsessive and not at all carefree,"

the most obvious reason "is that conscientious people do more things to protect their health and engage in fewer activities that are risky."

"What characterized the people who thrived is a combination of their own persistence and dependability and the help of other people," Friedman says. The young adults who were thrifty, persistent, detail-oriented and responsible lived the longest.

Those with the most career success were the least likely to die young. Those who moved from job to job without a clear progression were less likely to have long lives than those with increasing responsibilities.

"continually productive men and women lived much longer than the laid-back comrades. ... This production orientation mattered more than their social relationships or their sense of happiness or well-being."

those who were most engaged in pursuing their goals.

a sexually satisfying and happy marriage is a very good indicator of future health and long life," but being single for a woman can be just as healthy as being in a marriage, especially if she has other fulfilling social relationships.

The married men in the study lived the longest. Single men outlived remarried men but didn't live as long as married men. Among women, the number who divorced their husbands and stayed single lived nearly as long as steadily married women."Being divorced was much less harmful to a women's health," the authors say.

Arguing that governments can pick winners, Professor Chang urges us to reclaim economic planning, not as a token of centrally-planned communism, but rather as the simple reality behind our market economies today:

Capitalist economies are in large part planned. Governments in capitalist economies practice planning too, albeit on a more limited basis than under communist central planning. All of them finance a significant share of investment in R&D and infrastructure. Most of them plan a significant chunk of the economy through the planning of the activities of state-owned enterprises. Many capitalist governments plan the future shape of individual industrial sectors through sectoral industrial policy or even that of the national economy through indicative planning. More importantly, modern capitalist economies are made up of large, hierarchical corporations that plan their activities in great detail, even across national borders. Therefore, the question is not whether you plan or not. It is about planning the right things at the right levels.

Drawing a clear distinction between communist central planning and capitalist 'indicative' planning, Chang notes that the latter: ... involves the government ... setting some broad targets concerning key economic variables (e.g., investments in strategic industries, infrastructure development, exports) and working with, not against, the private sector to achieve them. Unlike under central planning, these targets are not legally binding; hence the adjective 'indicative'. However, the government will do its best to achieve them by mobilizing various carrots (e.g., subsidies, granting of monopoly rights) and sticks (e.g., regulations, influence through state-owned banks) at its disposal.

Chang observes that: France had great success in promoting investment and technological innovation through indicative planning in the 1950s and 60s, thereby overtaking the British economy as Europe's second industrial power. Other European countries, such as Finland, Norway and Austria, also successfully used indicative planning to upgrade their economies between the 1950s and the 1970s. The East Asian miracle economies of Japan, Korea and Taiwan used indicative planning too between the 1950s and 1980s. This is not to say that all indicative planning exercises have been successful; in India, for example, it has not. Nevertheless, the European and East Asian examples show that planning in certain forms is not incompatible with capitalism and may even promote capitalist development very well.

As we have argued before, the current crisis raging through Europe (in large part caused by free-market economics), forces us to reconsider our economic options. More than ever before, now is the time to rehabilitate indicative planning and industrial policy as key levers in our arsenal of policy tools.

there is one crucial difference between IQ and CQ scores. With intelligence, there is a phenomenon called the Flynn effect—each generation, scores go up about 10 points. Enriched environments are making kids smarter. With creativity, a reverse trend has just been identified and is being reported for the first time here: American creativity scores are falling.

creativity scores had been steadily rising, just like IQ scores, until 1990. Since then, creativity scores have consistently inched downward.

It is the scores of younger children in America—from kindergarten through sixth grade—for whom the decline is “most serious.”

It’s too early to determine conclusively why U.S. creativity scores are declining. One likely culprit is the number of hours kids now spend in front of the TV and playing videogames rather than engaging in creative activities. Another is the lack of creativity development in our schools. In effect, it’s left to the luck of the draw who becomes creative: there’s no concerted effort to nurture the creativity of all children.

Around the world, though, other countries are making creativity development a national priority.

In China there has been widespread education reform to extinguish the drill-and-kill teaching style. Instead, Chinese schools are also adopting a problem-based learning approach.

When faculty of a major Chinese university asked Plucker to identify trends in American education, he described our focus on standardized curriculum, rote memorization, and nationalized testing.

Overwhelmed by curriculum standards, American teachers warn there’s no room in the day for a creativity class.

The age-old belief that the arts have a special claim to creativity is unfounded. When scholars gave creativity tasks to both engineering majors and music majors, their scores laid down on an identical spectrum, with the same high averages and standard deviations.

The argument that we can’t teach creativity because kids already have too much to learn is a false trade-off. Creativity isn’t about freedom from concrete facts. Rather, fact-finding and deep research are vital stages in the creative process.

The lore of pop psychology is that creativity occurs on the right side of the brain. But we now know that if you tried to be creative using only the right side of your brain, it’d be like living with ideas perpetually at the tip of your tongue, just beyond reach.

Creativity requires constant shifting, blender pulses of both divergent thinking and convergent thinking, to combine new information with old and forgotten ideas. Highly creative people are very good at marshaling their brains into bilateral mode, and the more creative they are, the more they dual-activate.

“Creativity can be taught,” says James C. Kaufman, professor at California State University, San Bernardino. What’s common about successful programs is they alternate maximum divergent thinking with bouts of intense convergent thinking, through several stages. Real improvement doesn’t happen in a weekend workshop. But when applied to the everyday process of work or school, brain function improves.

highly creative adults tended to grow up in families embodying opposites. Parents encouraged uniqueness, yet provided stability. They were highly responsive to kids’ needs, yet challenged kids to develop skills. This resulted in a sort of adaptability: in times of anxiousness, clear rules could reduce chaos—yet when kids were bored, they could seek change, too. In the space between anxiety and boredom was where creativity flourished.

highly creative adults frequently grew up with hardship. Hardship by itself doesn’t lead to creativity, but it does force kids to become more flexible—and flexibility helps with creativity.

In early childhood, distinct types of free play are associated with high creativity. Preschoolers who spend more time in role-play (acting out characters) have higher measures of creativity: voicing someone else’s point of view helps develop their ability to analyze situations from different perspectives. When playing alone, highly creative first graders may act out strong negative emotions: they’ll be angry, hostile, anguished.

In middle childhood, kids sometimes create paracosms—fantasies of entire alternative worlds. Kids revisit their paracosms repeatedly, sometimes for months, and even create languages spoken there. This type of play peaks at age 9 or 10, and it’s a very strong sign of future creativity.

From fourth grade on, creativity no longer occurs in a vacuum; researching and studying become an integral part of coming up with useful solutions. But this transition isn’t easy. As school stuffs more complex information into their heads, kids get overloaded, and creativity suffers. When creative children have a supportive teacher—someone tolerant of unconventional answers, occasional disruptions, or detours of curiosity—they tend to excel. When they don’t, they tend to underperform and drop out of high school or don’t finish college at high rates.

They’re quitting because they’re discouraged and bored, not because they’re dark, depressed, anxious, or neurotic. It’s a myth that creative people have these traits. (Those traits actually shut down creativity; they make people less open to experience and less interested in novelty.) Rather, creative people, for the most part, exhibit active moods and positive affect. They’re not particularly happy—contentment is a kind of complacency creative people rarely have. But they’re engaged, motivated, and open to the world.

A similar study of 1,500 middle schoolers found that those high in creative self-efficacy had more confidence about their future and ability to succeed. They were sure that their ability to come up with alternatives would aid them, no matter what problems would arise.

But, Hor points out, Page 340: to give legislative effect to a norm which stems almost exclusively from Christian or Muslim beliefs does appear to be a curiously misguided decision. Take the example of the prohibition against eating pork — certainly a tenet of Islam and Judaism. No one would even suggest that we enact a law banning the consumption of pork in Singapore, even for Muslims, no matter how strongly these two religious communities feel about it.

With reference to the constitutional guarantee of equality before the law, Hor explains that this provision requires that, Page 340: law must not be “arbitrary”; there must be a “rational nexus” or “reasonable classification” between what the law targets and the purpose for which it is laid down.

Laws must be tested for “fit” and “weight”, he said. With respect to the former, the question is whether the classification of the target persons affected by the law fits the intended purpose of the law. As for “weight”, the question is whether whatever the problem the law purports to deal with is real and serious enough to justify the intervention of criminal sanction. Or is it mostly capricious?

decision to retain 377A is gravely problematic on both fronts. It does not fit very well at all. . . . If, as we have seen, the legislature was acting in some manner on the antipathy of certain segments of society towards homosexual activity, then the non-inclusion of women in 377A is a very huge omission indeed — more than half our population and presumably half of all homosexual activity.  It would be akin to subjecting half all our cars to a certain speed limit rule based on the colour of the car.

The element of “weight” is no less shaky. Can the sole purpose of accommodation of sectarian sensibilities ever be weighty enough to justify the criminalization of private sexual conduct between consenting adults? If the answer is “yes”, then it is hard to imagine for what earthly purpose the equal protection clause was written into the Constitution for. It is not the case that the Legislature has made a judgment that 377A activity is sufficiently harmful to society to attract criminal sanctions. . . the speech of PM Lee shows a clear belief that it is not so harmful — but 377A was to remain for, apparently, the sole purpose of appeasing those who disapprove.

It is not difficult to see that if the desire to accommodate a disapproving segment of society is reason enough, that would result in the evisceration of equal protection. . . Equal protection is about protection against prejudice, and if the government does not buy into the substantive arguments (of those who disapprove) for criminalization, then those putative reasons become, as far as the government is concerned, prejudice.

This is why, for example, large numbers of Americans oppose the idea of an estate tax even though the current form of the tax, slated to return in 2011, is very unlikely to affect them or their estates. In narrowly self-interested terms, that view may be irrational, but most Americans are unwilling to frame national issues in terms of rich versus poor. There’s a great deal of hostility toward various government bailouts, but the idea of “undeserving” recipients is the key factor in those feelings. Resentment against Wall Street gamesters hasn’t spilled over much into resentment against the wealthy more generally. The bailout for General Motors’ labor unions wasn’t so popular either—again, obviously not because of any bias against the wealthy but because a basic sense of fairness was violated. As of November 2010, congressional Democrats are of a mixed mind as to whether the Bush tax cuts should expire for those whose annual income exceeds $250,000; that is in large part because their constituents bear no animus toward rich people, only toward undeservedly rich people.

envy is usually local. At least in the United States, most economic resentment is not directed toward billionaires or high-roller financiers—not even corrupt ones. It’s directed at the guy down the hall who got a bigger raise. It’s directed at the husband of your wife’s sister, because the brand of beer he stocks costs $3 a case more than yours, and so on. That’s another reason why a lot of people aren’t so bothered by income or wealth inequality at the macro level. Most of us don’t compare ourselves to billionaires. Gore Vidal put it honestly: “Whenever a friend succeeds, a little something in me dies.”

Occasionally the cynic in me wonders why so many relatively well-off intellectuals lead the egalitarian charge against the privileges of the wealthy. One group has the status currency of money and the other has the status currency of intellect, so might they be competing for overall social regard? The high status of the wealthy in America, or for that matter the high status of celebrities, seems to bother our intellectual class most. That class composes a very small group, however, so the upshot is that growing income inequality won’t necessarily have major political implications at the macro level.

All that said, income inequality does matter—for both politics and the economy.

The numbers are clear: Income inequality has been rising in the United States, especially at the very top. The data show a big difference between two quite separate issues, namely income growth at the very top of the distribution and greater inequality throughout the distribution. The first trend is much more pronounced than the second, although the two are often confused.

When it comes to the first trend, the share of pre-tax income earned by the richest 1 percent of earners has increased from about 8 percent in 1974 to more than 18 percent in 2007. Furthermore, the richest 0.01 percent (the 15,000 or so richest families) had a share of less than 1 percent in 1974 but more than 6 percent of national income in 2007. As noted, those figures are from pre-tax income, so don’t look to the George W. Bush tax cuts to explain the pattern. Furthermore, these gains have been sustained and have evolved over many years, rather than coming in one or two small bursts between 1974 and today.1

At the same time, wage growth for the median earner has slowed since 1973. But that slower wage growth has afflicted large numbers of Americans, and it is conceptually distinct from the higher relative share of top income earners. For instance, if you take the 1979–2005 period, the average incomes of the bottom fifth of households increased only 6 percent while the incomes of the middle quintile rose by 21 percent. That’s a widening of the spread of incomes, but it’s not so drastic compared to the explosive gains at the very top.

The broader change in income distribution, the one occurring beneath the very top earners, can be deconstructed in a manner that makes nearly all of it look harmless. For instance, there is usually greater inequality of income among both older people and the more highly educated, if only because there is more time and more room for fortunes to vary. Since America is becoming both older and more highly educated, our measured income inequality will increase pretty much by demographic fiat. Economist Thomas Lemieux at the University of British Columbia estimates that these demographic effects explain three-quarters of the observed rise in income inequality for men, and even more for women.2

Attacking the problem from a different angle, other economists are challenging whether there is much growth in inequality at all below the super-rich. For instance, real incomes are measured using a common price index, yet poorer people are more likely to shop at discount outlets like Wal-Mart, which have seen big price drops over the past twenty years.3 Once we take this behavior into account, it is unclear whether the real income gaps between the poor and middle class have been widening much at all. Robert J. Gordon, an economist from Northwestern University who is hardly known as a right-wing apologist, wrote in a recent paper that “there was no increase of inequality after 1993 in the bottom 99 percent of the population”, and that whatever overall change there was “can be entirely explained by the behavior of income in the top 1 percent.”4

And so we come again to the gains of the top earners, clearly the big story told by the data. It’s worth noting that over this same period of time, inequality of work hours increased too. The top earners worked a lot more and most other Americans worked somewhat less. That’s another reason why high earners don’t occasion more resentment: Many people understand how hard they have to work to get there. It also seems that most of the income gains of the top earners were related to performance pay—bonuses, in other words—and not wildly out-of-whack yearly salaries.5

It is also the case that any society with a lot of “threshold earners” is likely to experience growing income inequality. A threshold earner is someone who seeks to earn a certain amount of money and no more. If wages go up, that person will respond by seeking less work or by working less hard or less often. That person simply wants to “get by” in terms of absolute earning power in order to experience other gains in the form of leisure—whether spending time with friends and family, walking in the woods and so on. Luck aside, that person’s income will never rise much above the threshold.

The funny thing is this: For years, many cultural critics in and of the United States have been telling us that Americans should behave more like threshold earners. We should be less harried, more interested in nurturing friendships, and more interested in the non-commercial sphere of life. That may well be good advice. Many studies suggest that above a certain level more money brings only marginal increments of happiness. What isn’t so widely advertised is that those same critics have basically been telling us, without realizing it, that we should be acting in such a manner as to increase measured income inequality. Not only is high inequality an inevitable concomitant of human diversity, but growing income inequality may be, too, if lots of us take the kind of advice that will make us happier.

Why is the top 1 percent doing so well?

Steven N. Kaplan and Joshua Rauh have recently provided a detailed estimation of particular American incomes.6 Their data do not comprise the entire U.S. population, but from partial financial records they find a very strong role for the financial sector in driving the trend toward income concentration at the top. For instance, for 2004, nonfinancial executives of publicly traded companies accounted for less than 6 percent of the top 0.01 percent income bracket. In that same year, the top 25 hedge fund managers combined appear to have earned more than all of the CEOs from the entire S&P 500. The number of Wall Street investors earning more than $100 million a year was nine times higher than the public company executives earning that amount. The authors also relate that they shared their estimates with a former U.S. Secretary of the Treasury, one who also has a Wall Street background. He thought their estimates of earnings in the financial sector were, if anything, understated.

Many of the other high earners are also connected to finance. After Wall Street, Kaplan and Rauh identify the legal sector as a contributor to the growing spread in earnings at the top. Yet many high-earning lawyers are doing financial deals, so a lot of the income generated through legal activity is rooted in finance. Other lawyers are defending corporations against lawsuits, filing lawsuits or helping corporations deal with complex regulations. The returns to these activities are an artifact of the growing complexity of the law and government growth rather than a tale of markets per se. Finance aside, there isn’t much of a story of market failure here, even if we don’t find the results aesthetically appealing.

When it comes to professional athletes and celebrities, there isn’t much of a mystery as to what has happened. Tiger Woods earns much more, even adjusting for inflation, than Arnold Palmer ever did. J.K. Rowling, the first billionaire author, earns much more than did Charles Dickens. These high incomes come, on balance, from the greater reach of modern communications and marketing. Kids all over the world read about Harry Potter. There is more purchasing power to spend on children’s books and, indeed, on culture and celebrities more generally. For high-earning celebrities, hardly anyone finds these earnings so morally objectionable as to suggest that they be politically actionable. Cultural critics can complain that good schoolteachers earn too little, and they may be right, but that does not make celebrities into political targets. They’re too popular. It’s also pretty clear that most of them work hard to earn their money, by persuading fans to buy or otherwise support their product. Most of these individuals do not come from elite or extremely privileged backgrounds, either. They worked their way to the top, and even if Rowling is not an author for the ages, her books tapped into the spirit of their time in a special way. We may or may not wish to tax the wealthy, including wealthy celebrities, at higher rates, but there is no need to “cure” the structural causes of higher celebrity incomes.

to be sure, the high incomes in finance should give us all pause.

The first factor driving high returns is sometimes called by practitioners “going short on volatility.” Sometimes it is called “negative skewness.” In plain English, this means that some investors opt for a strategy of betting against big, unexpected moves in market prices. Most of the time investors will do well by this strategy, since big, unexpected moves are outliers by definition. Traders will earn above-average returns in good times. In bad times they won’t suffer fully when catastrophic returns come in, as sooner or later is bound to happen, because the downside of these bets is partly socialized onto the Treasury, the Federal Reserve and, of course, the taxpayers and the unemployed.

if you bet against unlikely events, most of the time you will look smart and have the money to validate the appearance. Periodically, however, you will look very bad. Does that kind of pattern sound familiar? It happens in finance, too. Betting against a big decline in home prices is analogous to betting against the Wizards. Every now and then such a bet will blow up in your face, though in most years that trading activity will generate above-average profits and big bonuses for the traders and CEOs.

To this mix we can add the fact that many money managers are investing other people’s money. If you plan to stay with an investment bank for ten years or less, most of the people playing this investing strategy will make out very well most of the time. Everyone’s time horizon is a bit limited and you will bring in some nice years of extra returns and reap nice bonuses. And let’s say the whole thing does blow up in your face? What’s the worst that can happen? Your bosses fire you, but you will still have millions in the bank and that MBA from Harvard or Wharton. For the people actually investing the money, there’s barely any downside risk other than having to quit the party early. Furthermore, if everyone else made more or less the same mistake (very surprising major events, such as a busted housing market, affect virtually everybody), you’re hardly disgraced. You might even get rehired at another investment bank, or maybe a hedge fund, within months or even weeks.

Moreover, smart shareholders will acquiesce to or even encourage these gambles. They gain on the upside, while the downside, past the point of bankruptcy, is borne by the firm’s creditors. And will the bondholders object? Well, they might have a difficult time monitoring the internal trading operations of financial institutions. Of course, the firm’s trading book cannot be open to competitors, and that means it cannot be open to bondholders (or even most shareholders) either. So what, exactly, will they have in hand to object to?

Perhaps more important, government bailouts minimize the damage to creditors on the downside. Neither the Treasury nor the Fed allowed creditors to take any losses from the collapse of the major banks during the financial crisis. The U.S. government guaranteed these loans, either explicitly or implicitly. Guaranteeing the debt also encourages equity holders to take more risk. While current bailouts have not in general maintained equity values, and while share prices have often fallen to near zero following the bust of a major bank, the bailouts still give the bank a lifeline. Instead of the bank being destroyed, sometimes those equity prices do climb back out of the hole. This is true of the major surviving banks in the United States, and even AIG is paying back its bailout. For better or worse, we’re handing out free options on recovery, and that encourages banks to take more risk in the first place.

there is an unholy dynamic of short-term trading and investing, backed up by bailouts and risk reduction from the government and the Federal Reserve. This is not good. “Going short on volatility” is a dangerous strategy from a social point of view. For one thing, in so-called normal times, the finance sector attracts a big chunk of the smartest, most hard-working and most talented individuals. That represents a huge human capital opportunity cost to society and the economy at large. But more immediate and more important, it means that banks take far too many risks and go way out on a limb, often in correlated fashion. When their bets turn sour, as they did in 2007–09, everyone else pays the price.

And it’s not just the taxpayer cost of the bailout that stings. The financial disruption ends up throwing a lot of people out of work down the economic food chain, often for long periods. Furthermore, the Federal Reserve System has recapitalized major U.S. banks by paying interest on bank reserves and by keeping an unusually high interest rate spread, which allows banks to borrow short from Treasury at near-zero rates and invest in other higher-yielding assets and earn back lots of money rather quickly. In essence, we’re allowing banks to earn their way back by arbitraging interest rate spreads against the U.S. government. This is rarely called a bailout and it doesn’t count as a normal budget item, but it is a bailout nonetheless. This type of implicit bailout brings high social costs by slowing down economic recovery (the interest rate spreads require tight monetary policy) and by redistributing income from the Treasury to the major banks.

the “going short on volatility” strategy increases income inequality. In normal years the financial sector is flush with cash and high earnings. In implosion years a lot of the losses are borne by other sectors of society. In other words, financial crisis begets income inequality. Despite being conceptually distinct phenomena, the political economy of income inequality is, in part, the political economy of finance. Simon Johnson tabulates the numbers nicely: From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.7

There’s a second reason why the financial sector abets income inequality: the “moving first” issue. Let’s say that some news hits the market and that traders interpret this news at different speeds. One trader figures out what the news means in a second, while the other traders require five seconds. Still other traders require an entire day or maybe even a month to figure things out. The early traders earn the extra money. They buy the proper assets early, at the lower prices, and reap most of the gains when the other, later traders pile on. Similarly, if you buy into a successful tech company in the early stages, you are “moving first” in a very effective manner, and you will capture most of the gains if that company hits it big.

The moving-first phenomenon sums to a “winner-take-all” market. Only some relatively small number of traders, sometimes just one trader, can be first. Those who are first will make far more than those who are fourth or fifth. This difference will persist, even if those who are fourth come pretty close to competing with those who are first. In this context, first is first and it doesn’t matter much whether those who come in fourth pile on a month, a minute or a fraction of a second later. Those who bought (or sold, as the case may be) first have captured and locked in most of the available gains. Since gains are concentrated among the early winners, and the closeness of the runner-ups doesn’t so much matter for income distribution, asset-market trading thus encourages the ongoing concentration of wealth. Many investors make lots of mistakes and lose their money, but each year brings a new bunch of projects that can turn the early investors and traders into very wealthy individuals.

These two features of the problem—“going short on volatility” and “getting there first”—are related. Let’s say that Goldman Sachs regularly secures a lot of the best and quickest trades, whether because of its quality analysis, inside connections or high-frequency trading apparatus (it has all three). It builds up a treasure chest of profits and continues to hire very sharp traders and to receive valuable information. Those profits allow it to make “short on volatility” bets faster than anyone else, because if it messes up, it still has a large enough buffer to pad losses. This increases the odds that Goldman will repeatedly pull in spectacular profits.

Still, every now and then Goldman will go bust, or would go bust if not for government bailouts. But the odds are in any given year that it won’t because of the advantages it and other big banks have. It’s as if the major banks have tapped a hole in the social till and they are drinking from it with a straw. In any given year, this practice may seem tolerable—didn’t the bank earn the money fair and square by a series of fairly normal looking trades? Yet over time this situation will corrode productivity, because what the banks do bears almost no resemblance to a process of getting capital into the hands of those who can make most efficient use of it. And it leads to periodic financial explosions. That, in short, is the real problem of income inequality we face today. It’s what causes the inequality at the very top of the earning pyramid that has dangerous implications for the economy as a whole.

What about controlling bank risk-taking directly with tight government oversight? That is not practical. There are more ways for banks to take risks than even knowledgeable regulators can possibly control; it just isn’t that easy to oversee a balance sheet with hundreds of billions of dollars on it, especially when short-term positions are wound down before quarterly inspections. It’s also not clear how well regulators can identify risky assets. Some of the worst excesses of the financial crisis were grounded in mortgage-backed assets—a very traditional function of banks—not exotic derivatives trading strategies. Virtually any asset position can be used to bet long odds, one way or another. It is naive to think that underpaid, undertrained regulators can keep up with financial traders, especially when the latter stand to earn billions by circumventing the intent of regulations while remaining within the letter of the law.

For the time being, we need to accept the possibility that the financial sector has learned how to game the American (and UK-based) system of state capitalism. It’s no longer obvious that the system is stable at a macro level, and extreme income inequality at the top has been one result of that imbalance. Income inequality is a symptom, however, rather than a cause of the real problem. The root cause of income inequality, viewed in the most general terms, is extreme human ingenuity, albeit of a perverse kind. That is why it is so hard to control.

Another root cause of growing inequality is that the modern world, by so limiting our downside risk, makes extreme risk-taking all too comfortable and easy. More risk-taking will mean more inequality, sooner or later, because winners always emerge from risk-taking. Yet bankers who take bad risks (provided those risks are legal) simply do not end up with bad outcomes in any absolute sense. They still have millions in the bank, lots of human capital and plenty of social status. We’re not going to bring back torture, trial by ordeal or debtors’ prisons, nor should we. Yet the threat of impoverishment and disgrace no longer looms the way it once did, so we no longer can constrain excess financial risk-taking. It’s too soft and cushy a world.

Why don’t we simply eliminate the safety net for clueless or unlucky risk-takers so that losses equal gains overall? That’s a good idea in principle, but it is hard to put into practice. Once a financial crisis arrives, politicians will seek to limit the damage, and that means they will bail out major financial institutions. Had we not passed TARP and related policies, the United States probably would have faced unemployment rates of 25 percent of higher, as in the Great Depression. The political consequences would not have been pretty. Bank bailouts may sound quite interventionist, and indeed they are, but in relative terms they probably were the most libertarian policy we had on tap. It meant big one-time expenses, but, for the most part, it kept government out of the real economy (the General Motors bailout aside).

We probably don’t have any solution to the hazards created by our financial sector, not because plutocrats are preventing our political system from adopting appropriate remedies, but because we don’t know what those remedies are. Yet neither is another crisis immediately upon us. The underlying dynamic favors excess risk-taking, but banks at the current moment fear the scrutiny of regulators and the public and so are playing it fairly safe. They are sitting on money rather than lending it out. The biggest risk today is how few parties will take risks, and, in part, the caution of banks is driving our current protracted economic slowdown. According to this view, the long run will bring another financial crisis once moods pick up and external scrutiny weakens, but that day of reckoning is still some ways off.

Is the overall picture a shame? Yes. Is it distorting resource distribution and productivity in the meantime? Yes. Will it again bring our economy to its knees? Probably. Maybe that’s simply the price of modern society. Income inequality will likely continue to rise and we will search in vain for the appropriate political remedies for our underlying problems.

narrow or biased measures of scientific achievement can lead to narrow and biased science.

Global demand for, and interest in, metrics should galvanize stakeholders — national funding agencies, scientific research organizations and publishing houses — to combine forces. They can set an agenda and foster research that establishes sound scientific metrics: grounded in theory, built with high-quality data and developed by a community with strong incentives to use them.

Scientists are often reticent to see themselves or their institutions labelled, categorized or ranked. Although happy to tag specimens as one species or another, many researchers do not like to see themselves as specimens under a microscope — they feel that their work is too complex to be evaluated in such simplistic terms. Some argue that science is unpredictable, and that any metric used to prioritize research money risks missing out on an important discovery from left field.

It is true that good metrics are difficult to develop, but this is not a reason to abandon them. Rather it should be a spur to basing their development in sound science. If we do not press harder for better metrics, we risk making poor funding decisions or sidelining good scientists.

Metrics are data driven, so developing a reliable, joined-up infrastructure is a necessary first step.

We need a concerted international effort to combine, augment and institutionalize these databases within a cohesive infrastructure.

On an international level, the issue of a unique researcher identification system is one that needs urgent attention. There are various efforts under way in the open-source and publishing communities to create unique researcher identifiers using the same principles as the Digital Object Identifier (DOI) protocol, which has become the international standard for identifying unique documents. The ORCID (Open Researcher and Contributor ID) project, for example, was launched in December 2009 by parties including Thompson Reuters and Nature Publishing Group. The engagement of international funding agencies would help to push this movement towards an international standard.

if all funding agencies used a universal template for reporting scientific achievements, it could improve data quality and reduce the burden on investigators.

Importantly, data collected for use in metrics must be open to the scientific community, so that metric calculations can be reproduced. This also allows the data to be efficiently repurposed.

As well as building an open and consistent data infrastructure, there is the added challenge of deciding what data to collect and how to use them. This is not trivial. Knowledge creation is a complex process, so perhaps alternative measures of creativity and productivity should be included in scientific metrics, such as the filing of patents, the creation of prototypes4 and even the production of YouTube videos.

Perhaps publications in these different media should be weighted differently in different fields.

There needs to be a greater focus on what these data mean, and how they can be best interpreted.

This requires the input of social scientists, rather than just those more traditionally involved in data capture, such as computer scientists.

An international data platform supported by funding agencies could include a virtual 'collaboratory', in which ideas and potential solutions can be posited and discussed. This would bring social scientists together with working natural scientists to develop metrics and test their validity through wikis, blogs and discussion groups, thus building a community of practice. Such a discussion should be open to all ideas and theories and not restricted to traditional bibliometric approaches.

Far-sighted action can ensure that metrics goes beyond identifying 'star' researchers, nations or ideas, to capturing the essence of what it means to be a good scientist.

Other Anonymous targets include the Church of Scientology and, most recently, cyber-security company HBGary, which attempted to infiltrate Anonymous. In response, the lose-knit hacker group released 71,800 HBGary emails, which revealed highly dubious activities by the company, almost instantaneously destroying HBGary’s reputation and potentially setting it on a path to financial ruin.

The success suggests that socialbots could manipulate social networks on a larger scale, for good or ill. "We could use these bots in the future to encourage social participation or support for humanitarian causes," Hwang claims. He also acknowledges that there is a flip side, if bots were also used to inhibit activism.

The military may already be onto the idea. Officials at US Central Command (Centcom), which oversees military activities in the Middle East and central Asia, issued a request last June for an "online persona management service". The details of the request suggest that the military want to create and control 50 fictitious online identities who appear to be real people from Afghanistan and Iraq.

It is not clear, however, if any of the management of the fake identities would be delegated to software. A Centcom spokesperson told New Scientist that the contract supports "classified blogging activities on foreign language websites to enable Centcom to counter violent extremist and enemy propaganda outside the US".

Hwang has ambitious plans for the next stage of the socialbot project: "We're going to survey and identify two sites of 5000-person unconnected Twitter communities, and over a six-to-12-month period use waves of bots to thread and rivet those clusters together into a directly connected social bridge between those two formerly independent groups," he wrote in a blog post on 3 March. "The bot-driven social 'scaffolding' will then be dropped away, completing the bridge, with swarms of bots being launched to maintain the superstructure as needed," he adds.

Dr Altuna not only includes the lack of involvement of teaching staff amongst the limitations for incorporating ICT, but also that of the involvement of the families. It was explained that families showed interest in the use of Internet and ICTs as educational tools for their children, but that these, too, excessively delegate to the schools. The researcher stressed that the families also need guidance, as they are concerned about the use by their children of Internet but do not know the best way to go about the problem.

Educational psychologist Dr Jon Altuna has carried out a thorough study of the phenomenon of the school 2.0. Concretely, he has looked into the use and level of incorporation of Internet and of Information and Communication Technologies (ICT) into the third cycle of Primary Education, observing at the same time the attitudes of the teaching staff, and of the students and the families of the children in this regard. His PhD, defended at the University of the Basque Country (UPV/EHU), is entitled, Incorporation of Internet into the teaching of the subject Knowledge of the Environment during the third cycle of Primary Education: possibilities and analysis of the situation of a school. Dr Altuna’s research is based on a study of cases undertaken over eight years at a school where new activities involving ICT had been introduced into the curricular subject of Knowledge of the Environment, taught in the fifth and sixth year of Primary Education. The researcher gathered data from 837 students, 134 teachers and 190 families of this school. This study was completed with the experiences of ICT teachers from 21 schools.

review sites could do more. For example, Yelp could have offered to represent Alice itself, or even filed for a declaratory judgment that Alice's post was not an infringement of copyright.

According to Yelp spokeswoman Stephanie Ichinose, that isn't Yelp's role. "The way we approach this space is that we're a platform," she told Ars by phone. When faced with a lawsuit threat, "some reviewers might choose to take down their reviews, others may choose to leave them intact."

Wendy Seltzer, founder of the Chiling Effects clearinghouse, thinks that's not good enough. "It's in Yelp's interest not to let it or its submitters be manipulated by these agreements," she said. "The reading public is going to learn that these things exist and then come to distrust the sites."

Transparency is another key weapon against review censorship.

Ars talked to Angie Hicks, founder of Angie's List, about the steps her company takes to prevent manipulation by business owners. "Angie's List is positioned very differently in the review space," she said. "We don't accept anonymous reviews. Consumers pay to be a part of Angie's List. And any time a flag is raised about a review, it's reviewed by a human." Angie said that her company actively penalizes businesses who try to use user agreements to censor her users. "Whenever we find that a doctor is asking patients to sign this kind of agreement, we put a notification on that provider's record," she said. "We also take them out of search results."

Constantly engaging this executive control function is a form of mental exercise, explains Bialystok, and some researchers, including herself, believe that this can be beneficial for the brain. Bilingual speakers have been shown to perform better on a variety of cognitive tasks, and one study Bialistok did found that dementia set in four to five years later in people who spent their lives speaking two languages instead of one.

Agar directly tackles Hughes’ ideas of a “democratic transhumanism.” Here as post-humans and humans live shoulder to shoulder in wonderful harmony, all persons have access to the technologies they want in order to promote their own flourishing.  Under girding all of this is the belief that no human should feel pressurised to become enhance. Agar finds no comfort with this and instead can foresee a situation where it would be very difficult for humans to ‘choose’ to remain human.  The pressure to radically enhance would be considerable given the fact that the radically enhanced would no doubt be occupying the positions of power in society and would consider the moral obligation to utilise to the full enhancement techniques as being a moral imperative for the good of society.  For those who were able to withstand then a new underclass would no doubt emerge between the enhanced and the un-enhanced. This is precisely the kind of society which Hughes appears to be overly optimistic will not emerge but which is more akin to Lee Silver’s prediction of the future with the distinction made between the "GenRich" and the "naturals”.  This being the case, the author proposes that we have two options: radical enhancement is either enforced across the board or banned outright. It is the latter option which Agar favours but crucially does not elaborate further on so it is unclear as to how he would attempt such a ban given the complexity of the issue. This is disappointing as any general initial reflections which the author felt able to offer would have added to the discussion and added further strength to his line of argument.

A Transhuman Manifesto The final focus for Agar is James Hughes, who published his transhumanist manifesto Citizen Cyborg in 2004. Given the direct connection with politics and public policy this for me was a particularly interesting read. The basic premise to Hughes argument is that once humans and post humans recognise each other as citizens then this will mark the point at which they will be able to get along with each other.

Agar takes to task the argument Bostrom made with Toby Ord, concerning claims against enhancement. Bostrom and Ord argue that it boils down to a preference for the status quo; current human intellects and life spans are preferred and deemed best because they are what we have now and what we are familiar with (p. 134).  Agar discusses the fact that in his view, Bostrom falls into a focalism – focusing on and magnifying the positives whilst ignoring the negative implications.  Moreover, Agar goes onto develop and reiterate his earlier point that the sort of radical enhancements Bostrom et al enthusiastically support and promote take us beyond what is human so they are no longer human. It therefore cannot be said to be human enhancement given the fact that the traits or capacities that such enhancement afford us would be in many respects superior to ours, but they would not be ours.

With his law of accelerating returns and talk of the Singularity Ray Kurzweil proposes that we are speeding towards a time when our outdated systems of neurons and synapses will be traded for far more efficient electronic circuits, allowing us to become artificially super-intelligent and transferring our minds from brains into machines.

Having laid out the main ideas and thinking behind Kurzweil’s proposals, Agar makes the perceptive comment that despite the apparent appeal of greater processing power it would nevertheless be no longer human. Introducing chips to the human body and linking into the human nervous system to computers as per Ray Kurzweil’s proposals will prove interesting but it goes beyond merely creating a copy of us in order to that future replication and uploading can take place. Rather it will constitute something more akin to an upgrade. Electrochemical signals that the brain use to achieve thought travel at 100 metres per second. This is impressive but contrast this with the electrical signals in a computer which travel at 300 million metres per second then the distinction is clear. If the predictions are true how will such radically enhanced and empowered beings live not only the unenhanced but also what will there quality of life really be? In response, Agar favours something what he calls “rational biological conservatism” (pg. 57) where we set limits on how intelligent we can become in light of the fact that it will never be rational to us for human beings to completely upload their minds onto computers.

Agar then proceeds to argue that in the pursuit of Kurzweil enhanced capacities and capabilities we might accidentally undermine capacities of equal value. This line of argument would find much sympathy from those who consider human organisms in “ecological” terms, representing a profound interconnectedness which when interfered with presents a series of unknown and unexpected consequences. In other words, our specifies-specific form of intelligence may well be linked to species-specific form of desire. Thus, if we start building upon and enhancing our capacity to protect and promote deeply held convictions and beliefs then due to the interconnectedness, it may well affect and remove our desire to perform such activities (page 70). Agar’s subsequent discussion and reference to the work of Jerry Foder, philosopher and cognitive scientist is particularly helpful in terms of the functioning of the mind by modules and the implications of human-friendly AI verses human-unfriendly AI.

In terms of the author’s discussion of Aubrey de Grey, what is refreshing to read from the outset is the author’s clear grasp of Aubrey’s ideas and motivation. Some make the mistake of thinking he is the man who wants to live forever, when in actual fact this is not the case.  De Grey wants to reverse the ageing process - Strategies for Engineered Negligible Senescence (SENS) so that people are living longer and healthier lives. Establishing this clear distinction affords the author the opportunity to offer more grounded critiques of de Grey’s than some of his other critics. The author makes plain that de Grey’s immediate goal is to achieve longevity escape velocity (LEV), where anti-ageing therapies add years to life expectancy faster than age consumes them.

In weighing up the benefits of living significantly longer lives, Agar posits a compelling argument that I had not fully seen before. In terms of risk, those radically enhanced to live longer may actually be the most risk adverse and fearful people to live. Taking the example of driving a car, a forty year-old senescing human being who gets into their car to drive to work and is involved in a fatal accident “stands to lose, at most, a few healthy, youthful years and a slightly larger number of years with reduced quality” (p.116). In stark contrast should a negligibly senescent being who drives a car and is involved in an accident resulting in their death, stands to lose on average one thousand, healthy, youthful years (p.116).  

De Grey’s response to this seems a little flippant; with the end of ageing comes an increased sense of risk-aversion so the desire for risky activity such as driving will no longer be prevalent. Moreover, plus because we are living for longer we will not be in such a hurry to get to places!  Virtual reality comes into its own at this point as a means by which the negligibly senescent being ‘adrenaline junkie’ can be engaged with activities but without the associated risks. But surely the risk is part of the reason why they would want to engage in snow boarding, bungee jumping et al in the first place. De Grey’s strategy seemingly fails to appreciate the extent to which human beings want “direct” contact with the “real” world.

Continuing this idea further though, Agar’s subsequent discussion of the role of fire-fighters is an interesting one.  A negligibly senescent fire fighter may stand to loose more when they are trapped in a burning inferno but being negligibly senescent means that they are better fire-fighters by virtue of increase vitality. Having recently heard de Grey speak and had the privilege of discussing his ideas further with him, Agar’s discussion of De Grey were a particular highlight of the book and made for an engaging discussion. Whilst expressing concern and doubt in relation to De Grey’s ideas, Agar is nevertheless quick and gracious enough to acknowledge that if such therapies could be achieved then De Grey is probably the best person to comment on and achieve such therapies given the depth of knowledge and understanding that he has built up in this area.