Know-how: Big Data, AI and the peculiar dignity of tacit knowledge

Essay by Tim Rogan: “Machine learning – a kind of sub-field of artificial intelligence (AI) – is a means of training algorithms to discern empirical relationships within immense reams of data. Run a purpose-built algorithm by a pile of images of moles that might or might not be cancerous. Then show it images of diagnosed melanoma. Using analytical protocols modelled on the neurons of the human brain, in an iterative process of trial and error, the algorithm figures out how to discriminate between cancers and freckles. It can approximate its answers with a specified and steadily increasing degree of certainty, reaching levels of accuracy that surpass human specialists. Similar processes that refine algorithms to recognise or discover patterns in reams of data are now running right across the global economy: medicine, law, tax collection, marketing and research science are among the domains affected. Welcome to the future, say the economist Erik Brynjolfsson and the computer scientist Tom Mitchell: machine learning is about to transform our lives in something like the way that steam engines and then electricity did in the 19th and 20th centuries. 

Signs of this impending change can still be hard to see. Productivity statistics, for instance, remain worryingly unaffected. This lag is consistent with earlier episodes of the advent of new ‘general purpose technologies’. In past cases, technological innovation took decades to prove transformative. But ideas often move ahead of social and political change. Some of the ways in which machine learning might upend the status quo are already becoming apparent in political economy debates.

The discipline of political economy was created to make sense of a world set spinning by steam-powered and then electric industrialisation. Its central question became how best to regulate economic activity. Centralised control by government or industry, or market freedoms – which optimised outcomes? By the end of the 20th century, the answer seemed, emphatically, to be market-based order. But the advent of machine learning is reopening the state vs market debate. Which between state, firm or market is the better means of coordinating supply and demand? Old answers to that question are coming under new scrutiny. In an eye-catching paper in 2017, the economists Binbin Wang and Xiaoyan Li at Sichuan University in China argued that big data and machine learning give centralised planning a new lease of life. The notion that market coordination of supply and demand encompassed more information than any single intelligence could handle would soon be proved false by 21st-century AI.

How seriously should we take such speculations? Might machine learning bring us full-circle in the history of economic thought, to where measures of economic centralisation and control – condemned long ago as dangerous utopian schemes – return, boasting new levels of efficiency, to constitute a new orthodoxy?

A great deal turns on the status of tacit knowledge….(More)”.