"I could kill for a bacon sandwich". Photo: Getty.
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US Secret Service seeks Twitter sarcasm detector

The US Secret Service is seeking some help with its online snooping, and needs a company that can detect sarcasm online - because you need to be able to distinguish between "I love Al Qaeda" and "I love Al Qaeda". Good luck with that, pals! 

“How do I look?”

“Great.”

Without the benefit of other clues, this conversation could have gone any number of ways. Perhaps Ed Miliband was consulting Justine on his latest portrait with a bacon sandwich. And even then, who knows, maybe Miliband’s wife really loves his bacon buttie face. The English language is so delightfully, confusingly rich in meaning that “great” can mean anything from “wonderful” to “mediocre” to “awful”.  

Which brings me to a great piece of news. The US Secret Service is looking to commission a Twitter sarcasm detector to improve its online social media surveillance. It is inviting analytics firms to bid for a five-year contract to monitor and analyse online trends and sentiment, and one of its requirements is the ability to “detect sarcasm and false positives” – presumably because when scanning the web for potential threats to national security, you don’t want to deploy police to the home of the tweeter who could “totally kill for a bacon sandwich right now.” (We know who you are.)  And you need to be able to distinguish between “I love Al Qaeda” and “I love Al Qaeda”.

Humans are not actually very good at detecting sentiment in written language. Consider, for instance, that for over 500 years, scholars have tried to improve the way in which irony is expressed on paper – including by developing several irony marks, from backwards question marks to squiggly exclamation marks (more on which here).

Because tweets and text messages are too short to give much context, there is an even greater potential for misunderstanding. The emoticon might have helped a little, and yet over the years, a billion sentiments have been furnished with a winky face.wink

According to one study published in 2005 in the Journal of Personality and Social Psychology, respondents had a 50/50 chance of correctly judging the tone of an email – although they thought they were right 90 per cent of the time. 

Still, the Secret Service can take heart. A number of attempts to develop computerised sarcasm detectors appear to have slightly better odds of being correct than the humans in the above study. In 2010, scientists at the Hebrew University in Jerusalem reported they had developed an algorithm to judge sarcasm that had a 77 per cent success rate at identifying snark in Amazon reviews. The French company Spotter claims to have an 80 per cent success rate at identifying sentiment correctly, and can work in 29 different languages. Its clients include the EU Commission, the Home Office and the Dubai Courts. Perhaps they will be offering their skills to the US as we speak.

If this new information on government surveillance gives you the heebie-jeebies, there is some cause for optimism. The US Secret Services computer technology might not be as advanced as you feared – as the BBC points out, the Secret Service requests that the software be compatible with Internet Explorer 8, a web browser released over five years ago. Good luck with it all, guys!

Sophie McBain is a freelance writer based in Cairo. She was previously an assistant editor at the New Statesman.

Ralph Orlowski / Getty
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Labour's investment bank plan could help fix our damaging financial system

The UK should learn from the success of a similar project in Germany.

Labour’s election manifesto has proved controversial, with the Tories and the right-wing media claiming it would take us back to the 1970s. But it contains at least one excellent idea which is certainly not out-dated and which would in fact help to address a key problem in our post-financial-crisis world.

Even setting aside the damage wrought by the 2008 crash, it’s clear the UK’s financial sector is not serving the real economy. The New Economics Foundation recently revealed that fewer than 10% of the total stock of UK bank loans are to non-financial and non-real estate businesses. The majority of their lending goes to other financial sector firms, insurance and pension funds, consumer finance, and commercial real estate.

Labour’s proposed UK Investment Bank would be a welcome antidote to a financial system that is too often damaging or simply useless. There are many successful examples of public development banks in the world’s fastest-growing economies, such as China and Korea. However, the UK can look closer to home for a suitable model: the KfW in Germany (not exactly a country known for ‘disastrous socialist policies’). With assets of over 500bn, the KfW is the world’s largest state-owned development bank when its size is measured as a percentage of GDP, and it is an institution from which the UK can draw much-needed lessons if it wishes to create a financial system more beneficial to the real economy.

Where does the money come from? Although KfW’s initial paid-up capital stems purely from public sources, it currently funds itself mainly through borrowing cheaply on the international capital markets with a federal government guarantee,  AA+ rating, and safe haven status for its public securities. With its own high ratings, the UK could easily follow this model, allowing its bank to borrow very cheaply. These activities would not add to the long-run public debt either: by definition an investment bank would invest in projects that would stimulate growth.

Aside from the obviously countercyclical role KfW played during the financial crisis, ramping up total business volume by over 40 per cent between 2007 and 2011 while UK banks became risk averse and caused a credit crunch, it also plays an important part in financing key sectors of the real economy that would otherwise have trouble accessing funds. This includes investment in research and innovation, and special programs for SMEs. Thanks to KfW, as well as an extensive network of regional and savings banks, fewer German SMEs report access to finance as a major problem than in comparator Euro area countries.

The Conservatives have talked a great deal about the need to rebalance the UK economy towards manufacturing. However, a real industrial policy needs more than just empty rhetoric: it needs finance. The KfW has historically played an important role in promoting German manufacturing, both at home and abroad, and to this day continues to provide finance to encourage the export of high-value-added German products

KfW works by on-lending most of its funds through the private banking system. This means that far from being the equivalent of a nationalisation, a public development bank can coexist without competing with the rest of the financial system. Like the UK, Germany has its share of large investment banks, some of which have caused massive instabilities. It is important to note that the establishment of a public bank would not have a negative effect on existing private banks, because in the short term, the UK will remain heavily dependent on financial services.

The main problem with Labour’s proposal is therefore not that too much of the financial sector will be publicly owned, but too little. Its proposed lending volume of £250bn over 10 years is small compared to the KfW’s total financing commitments of  750 billion over the past 10 years. Although the proposal is better than nothing, in order to be effective a public development bank will need to have sufficient scale.

Finally, although Brexit might make it marginally easier to establish the UK Investment Bank, because the country would no longer be constrained by EU State Aid Rules or the Maastricht criteria, it is worth remembering that KfW’s sizeable range of activities is perfectly legal under current EU rules.

So Europe cannot be blamed for holding back UK financial sector reform to date - the problem is simply a lack of political will in the current government. And with even key architects of 1980s financial liberalisation, such as the IMF and the economist Jeffrey Sachs, rethinking the role of the financial sector, isn’t it time Britain did the same?

Dr Natalya Naqvi is a research fellow at University College and the Blavatnik School of Government, University of Oxford, where she focuses on the role of the state and the financial sector in economic development

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