If you enjoyed the book, The Second Machine Age, or Marc Andresssen’s piece, Software Eating The World, take a look at this paper (by Frey @ Osborne) – it identifies areas where technology is replacing human labor. This is a fairly long post which contains the following:
1. Research abstract
2. Curated excerpts
3. Ideas for investors, students, and entrepreneurs
“We examine how susceptible jobs are to computerisation. To assess this, we begin by implementing a novel methodology to estimate the probability of computerisation for 702 detailed occupations, using a Gaussian process classifier. Based on these estimates, we examine expected impacts of future computerisation on US labour market outcomes, with the primary objective of analysing the number of jobs at risk and the relationship between an occupation’s probability of computerisation, wages and educational attainment. According to our estimates, about 47 percent of total US employment is at risk. We further provide evidence that wages and educational attainment exhibit a strong negative relationship with an occupation’s probability of computerisation.”
Part 2: My Favorite Bits
“The impact of computerisation on labour market outcomes is well-established in the literature, documenting the decline of employment in routine intensive occupations – i.e. occupations mainly consisting of tasks following well-deﬁned procedures that can easily be performed by sophisticated algorithms.”
“Arguably, this is because the manual tasks of service occupations are less susceptible to computerisation, as they require a higher degree of flexibility and physical adaptability (Autor, et al., 2003; Goos and Manning, 2007; Autor and Dorn, 2013).”
“At the same time, with falling prices of computing, problem-solving skills are becoming relatively productive, explaining the substantial employment growth in occupations involving cognitive tasks where skilled labour has a comparative advantage, as well as the persistent increase in returns to education (Katz and Murphy, 1992; Acemoglu, 2002; Autor and Dorn, 2013).”
Technological disruption and unemployment isn’t a new topic.
“The concern over technological unemployment is hardly a recent phenomenon. Throughout history, the process of creative destruction, following technolog- ical inventions, has created enormous wealth, but also undesired disruptions. As stressed by Schumpeter (1962), it was not the lack of inventive ideas that set the boundaries for economic development, but rather powerful social and economic interests promoting the technological status quo.
Here’s a historical example of innovation vs the status quo.
“William Lee, inventing the stocking frame knitting machine in 1589, hoping that it would relieve workers of hand-knitting. Seek- ing patent protection for his invention, he travelled to London where he had rented a building for his machine to be viewed by Queen Elizabeth I. To his disappointment, the Queen was more concerned with the employment impact of his invention and refused to grant him a patent….Most likely the Queen’s concern was a manifestation of the hosiers’ guilds fear that the invention would make the skills of its artisan members obsolete.5 The guilds’ opposition was indeed so intense that William Lee had to leave Britain.”
Historically innovation/employment dynamics originally occurred as follows:
“Unless all individuals accept the “verdict” of the market outcome, the decision whether to adopt an innovation is likely to be resisted by losers through non-market mechanism and political activism.” Workers can thus be expected to resist new technologies, insofar that they make their skills obsolete and irreversibly reduce their expected earnings. The balance between job conservation and technological progress therefore, to a large extent, reflects the balance of power in society, and how gains from technological progress are being distributed.
Attitudes shifted around the industrial revolution and societies began to favor innovation.
“There are at least two possible explanations for the shift in attitudes towards technological progress. First, after Parliamentary supremacy was established over the Crown, the property owning classes became politically dominant in Britain (North and Weingast, 1989). Because the diffusion of various manufacturing technologies did not impose a risk to the value of their assets, and some property owners stood to benefit from the export of manufactured goods, the artisans simply did not have the political power to repress them.”
“Second, inventors, consumers and unskilled factory workers largely benefited from mechanisation (Mokyr, 1990, p. 256 and 258). It has even been argued that, despite the employment concerns over mechanisation, unskilled workers have been the greatest beneficiaries of the Industrial Revolution (Clark, 2008).”
Let’s continue studying 19th century innovation.
“An important feature of nineteenth century manufacturing technologies is that they were largely “deskilling” – i.e. they substituted for skills through the simplification of tasks (Braverman, 1974; Hounshell, 1985; James and Skinner, 1985; Goldin and Katz, 1998). The deskilling process occurred as the factory system began to displace the artisan shop, and it picked up pace as production increasingly mechanized with the adoption of steam power (Goldin and Sokoloff, 1982; Atack, et al., 2008a).”
“Work that had previously been performed by artisans was now decomposed into smaller, highly specialised, sequences, requiring less skill, but more workers, to perform.”
“Together with developments in continuous-flow production, enabling workers to be stationary while different tasks were moved to them, it was identical interchangeable parts that allowed complex products to be assembled from mass produced individual components by using highly specialised machine tools to a sequence of operation.”
An example of this type of innovation would be the Ford Motor Company.
“Crucially, the new assembly line introduced by Ford in 1913 was specifically designed for machinery to be operated by unskilled workers (Hounshell, 1985, p. 239). Furthermore, what had previously been a one-man job was turned into a 29-man worker operation, reducing the overall work time by 34 percent (Bright, 1958).”
“The example of the Ford Motor Company thus underlines the general pattern observed in the nineteenth century, with physical capital providing a relative complement to unskilled labour, while substituting for relatively skilled arti- sans (James and Skinner, 1985; Louis and Paterson, 1986; Brown and Philips, 1986; Atack, et al., 2004).11 Hence, as pointed out by Acemoglu (2002, p. 7): “the idea that technological advances favor more skilled workers is a twentieth century phenomenon.” The conventional wisdom among economic historians, in other words, suggests a discontinuity between the nineteenth and twentieth century in the impact of capital deepening on the relative demand for skilled labour.”
By the late 19th century a pattern of capital-skill emerged.
“The modern pattern of capital-skill complementarity gradually emerged in the late nineteenth century, as manufacturing production shifted to increasingly mechanised assembly lines. This shift can be traced to the switch to electricity from steam and water-power which, in combination with continuous-process and batch production methods, reduced the demand for unskilled manual workers in many hauling, conveying, and assembly tasks, but increased the demand for skills (Goldin and Katz, 1998).”
“…while factory assembly lines, with their extreme division of labour, had required vast quantities of human operatives, electrification allowed many stages of the production process to be automated, which in turn increased the demand for relatively skilled blue-collar production workers to operate the machinery. In addition, electrification contributed to a growing share of white-collar nonproduction workers (Goldin and Katz, 1998).”
“Over the course of the nineteenth century, establishments became larger in size as steam and water power technologies improved, allowing them to adopt powered machinery to realize productivity gains through the combination of enhanced division of labour and higher capital intensity (Atack, et al., 2008a). “
Furthermore, changes in transportation also play(ed) an important role.
“The transport revolution lowered costs of shipping goods domestically and internationally as infrastructure spread and improved (Atack, et al., 2008b).”
“The market for artisan goods early on had largely been confined to the immediate surrounding area because transport costs were high relative to the value of the goods produced. With the transport revolution, however, market size expanded, thereby eroding local monopoly power, which in turn increased competition and compelled firms to raise productivity through mechanisation.”
“As establishments became larger and served geographically expended markets, managerial tasks increased in number and complexity, requiring more manage- rial and clerking employees (Chandler, 1977). This pattern was, by the turn of the twentieth century, reinforced by electrification, which not only contributed to a growing share of relatively skilled blue-collar labour, but also increased the demand for white-collar workers (Goldin and Katz, 1998), who tended to have higher educational attainment (Allen, 2001).”
Which brings us to what’s happening today.
“recent studies find that computers have caused a shift in the occupational structure of the labour market. Autor and Dorn (2013), for example, show that as computerisation erodes wages for labour performing routine tasks, workers will reallocate their labour supply to relatively low-skill service occupations. More specifically, between 1980 and 2005, the share of US labour hours in service occupations grew by 30 percent after having been flat or declining in the three prior decades.
Furthermore, net changes in US employment were U-shaped in skill level, meaning that the lowest and highest job-skill quartile expanded sharply with relative employment declines in the middle of the distribution.”
“The expansion in high-skill employment can be explained by the falling price of carrying out routine tasks by means of computers, which complements more abstract and creative services.”
For example, text and data mining has improved the quality of legal research as constant access to market information has improved the efficiency of managerial decision-making – i.e. tasks performed by skilled workers at the higher end of the income dis- tribution.
The result has been an increasingly polarised labour market, with growing employment in high-income cognitive jobs and low-income manual occupations, accompanied by a hollowing-out of middle-income routine jobs. This is a pattern that is not unique to the US and equally applies to a number of developed economies (Goos, et al., 2009).”
In other words,
“The result has been an increasingly polarised labour market, with growing employment in high-income cognitive jobs and low-income manual occupations, accompanied by a hollowing-out of middle-income routine jobs. This is a pattern that is not unique to the US and equally applies to a number of developed economies (Goos, et al., 2009). “
Now on to the potentially worrisome part.
“The reason why human labour has prevailed relates to its ability to adopt and acquire new skills by means of education (Goldin and Katz, 2009).”
“Yet as computerisation enters more cognitive domains this will become increasingly challenging (Brynjolfsson and McAfee, 2011).”
“For example, Beaudry, et al. (2013) document a decline in the demand for skill over the past decade, even as the supply of workers with higher education has continued to grow. They show that high-skilled work- ers have moved down the occupational ladder, taking on jobs traditionally per- formed by low-skilled workers, pushing low-skilled workers even further down the occupational ladder and, to some extent, even out of the labour force. ”
“As robot costs decline and technological capabilities expand, robots can thus be expected to gradually sub- stitute for labour in a wide range of low-wage service occupations, where most US job growth has occurred over the past decades (Autor and Dorn, 2013). This means that many low-wage manual jobs that have been previously protected from computerisation could diminish over time. “
“Computers will therefore be relatively productive to human labour when a problem can be specified – in the sense that the criteria for success are quantifiable and can readily be evaluated (Acemoglu and Autor, 2011). The extent of job computerisation will thus be determined by technological advances that allow engineering problems to be sufficiently specified, which sets the boundaries for the scope of computerisation.”
“Recent technological breakthroughs are, in large part, due to efforts to turn non-routine tasks into well-defined problems. Defining such problems is helped by the provision of relevant data…”
“data is required to specify the many contingencies a technology must manage in order to form an adequate substitute for human labour. With data, objective and quantifiable measures of the success of an algorithm can be produced, which aid the contin- ual improvement of its performance relative to humans. ”
“As such, technological progress has been aided by the recent production of increasingly large and complex datasets, known as big data. ”
Specifically, which technological advances are likely to lead to human labor replacement?
“advances in fields related to Machine Learning (ML), including Data Mining, Machine Vision, Computational Statistics and other sub-fields of Artificial Intelligence (AI), in which efforts are explicitly dedicated to the development of algorithms that allow cognitive tasks to be automated.”
“In addition….the application of ML technologies in Mobile Robotics (MR), and thus the extent of computerisation in manual tasks.”
Why do these advances add value?
“The use of big data is afforded by one of the chief comparative advantages of computers relative to human labor: scalability. Little evidence is required to demonstrate that, in performing the task of laborious computation, networks of machines scale bet- ter than human labour (Campbell-Kelly, 2009). As such, computers can better manage the large calculations required in using large datasets. ML algorithms running on computers are now, in many cases, better able to detect patterns in big data than humans.”
“Computerisation of cognitive tasks is also aided by another core comparative advantage of algorithms: their absence of some human biases.”
“Advances in user interfaces also enable computers to respond directly to a wider range of human requests, thus augmenting the work of highly skilled labour, while allowing some types of jobs to become fully automated.”
Here are some examples of the types of advances that we are talking about:
“Fraud detection is a task that requires both impartial decision making and the ability to detect trends in big data. As such, this task is now almost completely automated (Phua, et al., 2010).”
“Oncologists at Memorial Sloan-Kettering Cancer Center are, for example, using IBM’s Watson computer to provide chronic care and cancer treatment diagnostics. Knowledge from 600,000 medical evidence reports, 1.5 million patient records and clinical trials, and two million pages of text from medical journals, are used for benchmarking and pattern recognition purposes.”
“Sophisticated algorithms are gradually taking on a number of tasks performed by paralegals, contract and patent lawyers (Markoff, 2011). More specifically, law firms now rely on computers that can scan thousands of legal briefs and precedents to assist in pre-trial research. A frequently cited example is Symantec’s Clearwell system, which uses language analysis to identify general concepts in documents, can present the results graphically, and proved capable of analysing and sorting more than 570,000 documents in two days (Markoff, 2011).”
“…the cities of Doha, São Paulo, and Beijing use sensors on pipes, pumps, and other water infrastructure to monitor conditions and manage water loss, reducing leaks by 40 to 50 percent. In the near future, it will be possible to place inexpensive sensors on light poles, sidewalks, and other public property to capture sound and images, likely reducing the number of workers in law enforcement (MGI, 2013). ”
What about labor replacement in more nuanced fields?
“Moreover, a company called SmartAction now provides call computerisation solutions that use ML technology and advanced speech recognition to improve upon conventional interactive voice response systems, realising cost savings of 60 to 80 percent over an outsourced call center consisting of human labour (CAA, 2012). ”
“Although the extent of these developments remains to be seen, estimates by MGI (2013) suggests that sophisticated algorithms could substitute for approximately 140 million full-time knowledge workers worldwide. “
But technology is still unable to replace labor when it comes to several types of tasks, including:
“1. Perception & Manual Tasks - Robots are still unable to match the depth and breadth of human perception. While basic geometric identification is reasonably mature, enabled by the rapid development of sophisticated sensors and lasers, significant challenges remain for more complex perception tasks, such as identifying objects and their properties in a cluttered field of view…..The difficulty of perception has ramifications for manipulation tasks, and, in particular, the handling of irregular objects, for which robots are yet to reach human levels of aptitude….Manipulation is also limited by the difficulties of planning out the sequence of actions required to move an object from one place to another. There are yet further problems in designing manipulators that, like human limbs, are soft, have com- pliant dynamics and provide useful tactile feedback.”
“2. Creative Intelligence Tasks - The challenge here is to find some reliable means of arriving at combinations that “make sense.” For a computer to make a subtle joke, for example, would require a database with a richness of knowledge comparable to that of humans, and methods of benchmarking the algorithm’s subtlety…..the principal obstacle to computerising creativity is stating our creative values sufficiently clearly that they can be encoded in an program (Boden, 2003). Moreover, human values change over time and vary across cultures. Because creativity, by definition, involves not only novelty but value, and because values are highly variable, it follows that many arguments about creativity are rooted in disagreements about value. Thus, even if we could identify and encode our creative values, to enable the computer to inform and monitor its own activities accordingly, there would still be disagreement about whether the computer appeared to be creative.”
“3. Social Intelligence Tasks – While algorithms and robots can now reproduce some aspects of human social interaction, the real-time recognition of natural human emotion remains a challenging problem, and the ability to respond intelligently to such inputs is even more difficult. Even simplified versions of typical social tasks prove difficult for computers, as is the case in which social interaction is reduced to pure text.”
According to the authors, to predict which jobs are likely to be displaced we need to think about job as rich combinations of 3 traits: perceptual/manual, creativity, & social intelligence. To the degree that jobs are low in these three areas they are likely to be automated (over time).
Likelihood of different jobs to be replaced by computers due to technological advances.
“Seen from this perspective, our findings could be interpreted as two waves of computerisation, separated by a “technological plateau.”
“In the first wave, we find that most workers in transportation and logistics occu- pations, together with the bulk of office and administrative support workers, and labour in production occupations, are likely to be substituted by computer capital. ”
“[The second wave is demonstrated by] algorithms for big data are already rapidly entering domains reliant upon storing or accessing information, making it equally intuitive that office and administrative support occupations will be subject to computerisation. The computerisation of production occupations simply suggests a continuation of a trend that has been observed over the past decades, with industrial robots taking on the routine tasks of most operatives in manufacturing.”
“More surprising, at first sight, is that a substantial share of employment in services, sales and construction occupations exhibit high probabilities of computerisation. Yet these findings are largely in line with recent documented tech- nological developments.”
“Second, while it seems counterintuitive that sales occupations, which are likely to require a high degree of social intelligence, will be subject to a wave of computerisation in the near future, high risk sales occupations include, for example, cashiers, counter and rental clerks, and telemarketers.
“Third, prefabrication will allow a growing share of construction work to be performed under controlled conditions in factories, which partly eliminates task variability.”
“According to our estimates, however, this wave of automation will be followed by a subsequent slowdown in computers for labour substitution, due to persisting inhibiting engineering bottlenecks to computerisation.”
But not everything will be computerized (just yet).
“… generalist occupations requiring knowledge of human heuristics, and specialist occupations involving the development of novel ideas and artifacts, are the least susceptible to computerisation.”
“Our predictions are thus intuitive in that most management, business, and finance occupations, which are intensive in generalist tasks requiring social intelligence, are largely confined to the low risk category. The same is true of most occupations in education, healthcare, as well as arts and media jobs.”
“The low susceptibility of engineering and science occupations to computerisation, on the other hand, is largely due to the high degree of creative intelligence they require.”
“Rather than reducing the demand for middle-income occupations, which has been the pattern over the past decades, our model predicts that computerisation will mainly substitute for low-skill and low-wage jobs in the near future. By contrast, high-skill and high-wage occupations are the least susceptible to computer capital.”
“Our findings thus imply that as technology races ahead, low-skill workers will reallocate to tasks that are non-susceptible to computerisation – i.e., tasks requiring creative and social intelligence. For workers to win the race, however, they will have to acquire creative and social skills”
If you are an entrepreneur: then creating value via technological disruption is your main mission. Of course, first you have to identify opportunities to exploit (areas where you can apply technology or pain points that people will pay you to remove).
I suggest flipping to the appendix of this paper. It lists 700 jobs/careers and ranks them according to the probability that they will computerized. Create a spreadsheet with each career and go meet senior people in those industries and ask them what types of products or services would help them improve their business(es). Ideally you will already have experience in one or more areas that are likely to be computerizable.
If you are an equity investor: Firs, take a look at this list of companies in the automation/robotics space
If you are thinking about investing in automation/ robotics companies like Fanuc, Kuka, Durr, or these, then competitive/ innovative threats are likely to appear where technological bottlenecks exist. I would make sure to ask senior management teams how they are spending r&d to tackle these types of issues and whether there are competitors that have a lot of competencies in these areas (as they could be acquisition candidates).
Also, a good idea would be to plot cost of low-skill labor (which you can source from the appendix) in various areas around the world to understand potential adoption/demand for automation/robotics products/services.
If you are a venture capital investors: If you are a big picture (top down thematic) investor I would focus on 3 things:
First, research organizations trying to tackle technological bottlenecks (meaning making advances in perception/manipulation, social intelligence, etc). But, I suspect investing at this stage is a very high risk low reward strategy because development would involve lots of r&d. A better strategy would be to pick teams within academia that are brink of discoveries and help them commercialize their research.
Second, I would try to map jobs/industries using this paper’s appendix and then search for companies via crunch-base, angel-list that are trying to innovate these domains.
Third, I would use this paper for risk mgmt. Meaning, are you investing in companies that are likely to use insights from people innovating in areas of perception/manipulation, social intelligence, ai, etc? If the answer is no, revisit your portfolio and start talking to your ceo’s.
If you are a student (high school & college): I would spend sometime browsing this paper’s appendix.
Take a look at jobs that are very likely and unlikely to be computerized. Then map which majors and career paths lead to those jobs. Avoid majors leading to jobs that are likely to be computerized. But there is another bigger picture message, you absolutely need to invest in non computerizable skills while focusing on becoming a well rounded generalist, communicator, and manager.
One last point:
If the ideas in this paper are viable then I have a feeling equity investors will enjoy some ebit margin expansion as cogs/sga decline due to technological innovation.
You can access Frey & Osborne’s paper here.
This a pretty interesting panel (moderated by Michael Milken) on the current state of credit markets.
H/T Champ for sending this our way.
I’ve started delving into the world of artificial intelligence and of course I am starting by reading the classics. Here is a link to Alan Turing’s very famous work, Computing Machinery & Intelligence, a paper that many say catapulted artificial intelligence research.
What is the Turing Test?
The Turing test is a test of a machine’s ability to exhibit intelligent behaviour equivalent to, or indistinguishable from, that of a human. In the original illustrative example, a human judge engages in natural language conversations with a human and a machine designed to generate performance indistinguishable from that of a human being. All participants are separated from one another. If the judge cannot reliably tell the machine from the human, the machine is said to have passed the test. The test does not check the ability to give the correct answer to questions; it checks how closely the answer resembles typical human answers. The conversation is limited to a text-only channel such as a computer keyboard and screen so that the result is not dependent on the machine’s ability to render words into audio.
I just finished watching this TED interview with Larry Page. I’m amazed by Mr. Page’s humility and willingness to reimagine the world.
Some of my favorite bits from the video:
The shortcomings of Search
Q: When [search is ] done, how will it be?
A: Well, I guess, in thinking about where we’re going – you know, why is it not done? – a lot of it is just computing’s kind of a mess. You know, your computer doesn’t know where you are, it doesn’t know what you’re doing, it doesn’t know what you know, and a lot we’ve been trying to do recently is just make your devices work, make them understand your context. Google Now, you know, knows where you are, knows what you may need. So really having computing work and understand you and understand that information, we really haven’t done that yet. It’s still very, very clunky.
On Ed Snowden, Internet Security & Privacy
A: I saw the picture of Sergey with Edward Snowden yesterday. Some of you may have seen it. But I think, for me, I guess, privacy and security are a really important thing. We think about it in terms of both things, and I think you can’t have privacy without security, so let me just talk about security first, because you asked about Snowden and all of that, and then I’ll say a little bit about privacy. I think for me, it’s tremendously disappointing that the government secretly did all this stuff and didn’t tell us. I don’t think we can have a democracy if we’re having to protect you and our users from the government for stuff that we’ve never had a conversation about. And I don’t mean we have to knowwhat the particular terrorist attack is they’re worried about protecting us from, but we do need to knowwhat the parameters of it is, what kind of surveillance the government’s going to do and how and why,and I think we haven’t had that conversation. So I think the government’s actually done itself a tremendous disservice by doing all that in secret.
Q: Yeah. And then there’s a privacy side of it.
A: Yes. The privacy side, I think it’s — the world is changing. You carry a phone. It knows where you are. There’s so much more information about you, and that’s an important thing, and it makes sense why people are asking difficult questions. We spend a lot of time thinking about this and what the issues are. I’m a little bit – I think the main thing that we need to do is just provide people choice, show them what data’s being collected – search history, location data. We’re excited about incognito mode in Chrome, and doing that in more ways, just giving people more choice and more awareness of what’s going on. I also think it’s very easy. What I’m worried is that we throw out the baby with the bathwater.And I look at, on your show, actually, I kind of lost my voice, and I haven’t gotten it back. I’m hoping that by talking to you I’m going to get it back.
A: All right. So get out your voodoo doll and whatever you need to do. But I think, you know what, I look at that, I made that public, and I got all this information. We got a survey done on medical conditions with people who have similar issues, and I look at medical records, and I say, wouldn’t it be amazing if everyone’s medical records were available anonymously to research doctors? And when someone accesses your medical record, a research doctor, they could see, you could see which doctor accessed it and why, and you could maybe learn about what conditions you have. I think if we just did that, we’d save 100,000 lives this year.
A: So I guess I’m just very worried that with Internet privacy, we’re doing the same thing we’re doing with medical records, is we’re throwing out the baby with the bathwater, and we’re not really thinking about the tremendous good that can come from people sharing information with the right people in the right ways.
On Corporate Responsibility
Q: Which is a second thing about corporations. You are one of those people who believe that corporations are an agent of change if they are run well.
A: Yeah. I’m really dismayed most people think companies are basically evil. They get a bad rap. And I think that’s somewhat correct. Companies are doing the same incremental thing that they did 50 years ago or 20 years ago. That’s not really what we need. We need, especially in technology, we need revolutionary change, not incremental change.
Two years ago a friend and shareholder of Aggreko told me about a book called, “Sustainable Energy Without The Hot Air“. The book was recommended by Aggreko’s senior management as a primer for investors to learn about sustainable energy. As I started reading the book it reminded me of Richard Feynman’s physics lectures (and Charlie Mungers approach to multidisciplinary problem solving). Little did I know that Bill Gates was also a fan of the book and named it the one book to read if you want to learn sustainable energy basics.
Before you commit to reading the book do the following:
First, read the synopsis to get a flavor for the book - http://www.withouthotair.com/synopsis10.pdf
Next, watch the following ted talk by author, David MacKay.
Finally, I recommend you read the book and flip to the corresponding technical appendix after you finish each chapter. In the appendix, the author walks you through -step by step- how to think about the physics of a particular type of sustainable energy. Here’s an example of the appendix related to cars.
Read: Sustainable Energy Without The Hot Air by David MacKay
Via The Web: http://www.withouthotair.com/
As Paperback: http://www.amazon.com/dp/0954452933/tag=davidmackayca-20
Read: The Appendix to Sustainable Energy Without Hot Air by David MacKay
Via The Web http://www.withouthotair.com/ *click on right most column where it says technical chapters