Massey University’s Teo Susnjak on how Covid-19 broke machine learning, extreme data patterns, wealth and income inequality, bots and propaganda and…

This weeks Top 5 comes from Teo Susnjaka computer scientistspecialising in machine learning. He is a Senior Lecturer in Information Technology at Massey University and is the developer behind GDPLive.

As always, we welcome your additions in the comments below or via email to david.chaston@interest.co.nz.

And if you're interested in contributing the occasional Top 5yourself, contact gareth.vaughan@interest.co.nz.

1. Covid-19 broke machine learning.

As the Covid-19 crisis started to unfold, we started to change our buying patterns. All of a sudden, some of the top purchasing items became: antibacterial soap, sanitiser, face masks, yeast and of course, toilet paper. As the demand for these unexpected items exploded, retail supply chains were disrupted. But they weren't the only ones affected.

Artificial intelligence systems began to break too. The MIT Technology Review reports:

Machine-learning models that run behind the scenes in inventory management, fraud detection, and marketing rely on a cycle of normal human behavior. But what counts as normal has changed, and now some are no longer working.

How bad the situation is depends on whom you talk to. According to Pactera Edge, a global AI consultancy, automation is in tailspin. Others say they are keeping a cautious eye on automated systems that are just about holding up, stepping in with a manual correction when needed.

Whats clear is that the pandemic has revealed how intertwined our lives are with AI, exposing a delicate codependence in which changes to our behavior change how AI works, and changes to how AI works change our behavior. This is also a reminder that human involvement in automated systems remains key. You can never sit and forget when youre in such extraordinary circumstances, says Cline.

Image source: MIT Technology Review

The extreme data capturing a previously unseen collapse in consumer spending that feeds the real-time GDP predictor at GDPLive.net, also broke our machine learning algorithms.

2. Extreme data patterns.

The eminent economics and finance historian, Niall Ferguson (not to be confused with Neil Ferguson who also likes to create predictive models) recently remarked that the first month of the lockdown created conditions which took a full year to materialise during the Great Depression.

The chart below shows the consumption data falling off the cliff, generating inputs that broke econometrics and machine learning models.

What we want to see is a rapid V-shaped recovery in consumer spending. The chart below shows the most up-to-date consumer spending trends. Consumer spending has now largely recovered, but is still lower than that of the same period in 2019. One of the key questions will be whether or not this partial rebound will be temporary until the full economic impacts of the 'Great Lockdown' take effect.

Paymark tracks consumer spending on their new public dashboard. Check it out here.

3. Wealth and income inequality.

As the current economic crisis unfolds, GDP will take centre-stage again and all other measures which attempt to quantify wellbeing and social inequalities will likely be relegated until economic stability returns.

When the conversation does return to this topic, AI might have something to contribute.

Effectively addressing income inequality is a key challenge in economics with taxation being the most useful tool. Although taxation can lead to greater equalities, over-taxation discourages from working and entrepreneurship, and motivates tax avoidance. Ultimately this leaves less resources to redistribute. Striking an optimal balance is not straightforward.

The MIT Technology Reviewreports thatAI researchers at the US business technology company Salesforce implemented machine learning techniques that identify optimal tax policies for a simulated economy.

In one early result, the system found a policy thatin terms of maximising both productivity and income equalitywas 16% fairer than a state-of-the-art progressive tax framework studied by academic economists. The improvement over current US policy was even greater.

Image source: MIT Technology Review

It is unlikely that AI will have anything meaningful to contribute towards tackling wealth inequality though. If Walter Scheidel, author of The Great Leveller and professor of ancient history at Stanford is correct, then the only historically effective levellers of inequality are: wars, revolutions, state collapses and...pandemics.

4. Bots and propaganda.

Over the coming months, arguments over what has caused this crisis, whether it was the pandemic or the over-reactive lockdown policies, will occupy much of social media. According to The MIT Technology Review, bots are already being weaponised to fight these battles.

Nearly half of Twitter accounts pushing to reopen America may be bots. Bot activity has become an expected part of Twitter discourse for any politicized event. Across US and foreign elections and natural disasters, their involvement is normally between 10 and 20%. But in a new study, researchers from Carnegie Mellon University have found that bots may account for between 45 and 60% of Twitter accounts discussing covid-19.

To perform their analysis, the researchers studied more than 200 million tweets discussing coronavirus or covid-19 since January. They used machine-learning and network analysis techniques to identify which accounts were spreading disinformation and which were most likely bots or cyborgs (accounts run jointly by bots and humans).

They discovered more than 100 types of inaccurate Covid-19-19 stories and found that not only were bots gaining traction and accumulating followers, but they accounted for 82% of the top 50 and 62% of the top 1,000 influential retweeters.

Image source: MIT Technology Review

How confident are you that you can tell the difference between a human and a bot? You can test yourself out here. BTW, I failed.

5. Primed to believe bad predictions.

This has been a particularly uncertain time. We humans don't like uncertainty especially once it reaches a given threshold. We have an amazing brain that is able to perform complex pattern recognition that enables us to predict what's around the corner. When we do this, we resolve uncertainty and our brain releases dopamine, making us feel good. When we cannot make sense of the data and the uncertainty remains unresolved, then stress kicks in.

Writing on this in Forbes, John Jennings points out:

Research shows we dislike uncertainty so much that if we have to choose between a scenario in which we know we will receive electric shocks versus a situation in which the shocks will occur randomly, well select the more painful option of certain shocks.

The article goes on to highlight how we tend to react in uncertain times. Aversion to uncertainty drives some of us to try to resolve it immediately through simple answers that align with our existing worldviews. For others, there will be a greater tendency to cluster around like-minded people with similar worldviews as this is comforting. There are some amongst us who are information junkies and their hunt for new data to fill in the knowledge gaps will go into overdrive - with each new nugget of information generating a dopamine hit. Lastly, a number of us will rely on experts who will use their crystal balls to find for us the elusive signal in all the noise, and ultimately tell us what will happen.

The last one is perhaps the most pertinent right now. Since we have a built-in drive that seeks to avoid ambiguity, in stressful times such as this, our biology makes us susceptible to accepting bad predictions about the future as gospel especially if they are generated by experts.

Experts at predicting the future do not have a strong track record considering how much weight is given to them. Their predictive models failed to see the Global Financial Crisis coming, they overstated the economic fallout of Brexit, the climate change models and their forecasts are consistently off-track, and now we have the pandemic models.

Image source:drroyspencer.com

The author suggests that this time "presents the mother of all opportunities to practice learning to live with uncertainty". I would also add that a good dose of humility on the side of the experts, and a good dose of scepticism in their ability to accurately predict the future both from the public and decision makers, would also serve us well.

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Massey University's Teo Susnjak on how Covid-19 broke machine learning, extreme data patterns, wealth and income inequality, bots and propaganda and...