The Singularity is actually just the Market Unfolding

After watching this excellent video by Dr. Michael Cox, I felt inspired to jot down a few more notes on the nature of a phenomena I’ve decided to call the “market singularity.”  Contrary to popular imagination, the technological singularity Ray Kurzweil speaks of is not the only context in which the phenomena of singularity can apply; and in fact, the definition of any particular “singularity” depends entirely upon the context in which it is used.

What struck me most about the video is when he mentions that while the rate of growth of technology (and thus wealth) has grown at a rate unprecedented throughout human history in the past 100 years alone, what is even more remarkable is that the rate of  this progress has been happening faster in recent years, than in the past one hundred years combined.

In the graphs Dr. Cox uses, technological developments throughout the past 100 years appear to happen in tandem with improvements to communications systems. Anytime there is an advancement in the methods of human communication, whether by telephone, television and radio, or the Internet, there is a corresponding increase in the rate of advancement of all other technologies. And basically what any improvement in communications systems accomplishes is an increase in the speed of information exchange.

The Internet makes this phenomena especially evident, since the nearly infinitely compounded nature of its interconnected networks creates a communication system vastly more complex than the comparatively linear nature of the telephone. Whereas the telephone constituted more or less of a dead-end in design, an end product not capable of transforming into anything beyond its initial form, the internet is nearly organic in its ability to grow, evolve, and replicate. And so it follows that the information economy exists in a state of flux that is as perpetual as it is unpredictable. Much like markets themselves.

And so if markets resemble the infrastructure of the Internet, or rather, the Internet mimics the chaotic and spontaneous nature of the free market, then it seems that any system or structure the Internet successfully employs to organize itself ought to likewise benefit the infrastructure of market exchanges. And that in fact, the two structures ought to be able to seamlessly merge into a single infrastructure, at which point the two phenomena would become indistinguishable from each another. Whereas the Internet was designed to store and organize quantities of objective data, the primary function of markets is, essentially, to convey information about human-specific values. If technology is merely a conduit tool, then markets provide the human action with which to power the machine.

The merging of markets with information technology would allow for seamless price signalling because it would give prices the ability to respond to all known information in real-time. And not just any amount or any type of information indiscriminately, but only that information which is immediately relevant to the value of the commodity in question at the instant at which the transaction occurs. If left untouched by regulation, it is likely that interconnected price networks would spontaneously emerge that would instantaneously monitor price signals and constantly reflect changes in value in real-time. And though market values would be arrived at instantaneously, they would simultaneously exist in a state of perpetual flux as the information around them changed, which is precisely what digital currencies such as bitcoin are designed to accommodate. (Though some will say that this is no different than how the stock market currently works, I beg to differ, due to my belief in the relevance of the labor theory of value, which I will elaborate upon more in later posts.)

If full market anarchism on the Internet was allowed to flourish without any government intervention whatsoever, there would be so many beneficial transactions available to you that you couldn’t possibly make all of them at once, at least not on your own time. And so you could perhaps download into your digital wallet a program to identify which transactions to approve instantaneously if they fulfilled the prior arrangements set out by both parties, and which transactions would require your full attention and bargaining efforts.

The technological singularity Kurzweil and other futurists are talking about is a force shaped entirely by the market. Because the market is the singularity. They are viewing the phenomena through the lens of the products of the market, or through the effects rather than the cause. Yet it is the free market that is the initiator of the exponentially increasing speed of all technology, communication, civilization, and the evolution of our species itself. The components of the technology are merely the inert matter – the plastic, silicon and metal that is incapable of transformation without the intervention of the human mind and hand. And if the inert components of technology are thus incapable of organizing themselves, then the market is the animus through which human motive is enabled to shape its direction, motivations, and outcome.

 

 

 

Tech Envy

So lately it appears that the infamous Occupy-type protesters of the San Francisco bay region have now taken to throwing themselves under the wheels of Google buses as their new cause célèbre of the day. Which certainly prompts the question of what could possibly be so terrible about Google that would motivate these young people to take such careless risks with their own lives for the sake of making a political statement.

Their answer hinges upon the growing economic inequality and income gap in America, a trend they primarily attribute to the growing power and profits of giant tech companies concentrated along the west coast, many of which are headquartered in San Francisco. Yet as a victim of the income gap myself, and as a person who studies economics in great depth,  I feel confident in attributing the current structural problems of our economy to flawed government policy rather than the actions of private companies. Only governments can wield the legal authority to manipulate and distort markets through public policy, whereas private companies wield no greater power in the economy than to influence consumers to buy their products.

And yet the protesters of Google believe that their disenfranchisement is somehow directly correlated with specific individuals working within the tech sector, and that Google employees are somehow personally responsible for vastly complex global economic forces that no one company, nor industry for that matter, could possible have any direct ability to influence or control.

I find it immensely difficult to direct any anger towards a company that adds as much value to my life as Google does. Or pretty much any tech company, for that matter. If it were  not for computer engineers, I wouldn’t be writing a blog this very moment that has the potential to reach millions of readers. And were it not for the Internet, the protesters of the Occupy movement would not have been able to organize to the extent that they did, had they been able to organize at all. Could Tahrir Square have happened without the help of Twitter? I seriously doubt it. And so it seems evident, to me at least, that technology is an inseparable component of progressive social revolution in today’s world.

As a former participant in the Occupy movement, I value the communication tools that the Internet has put within easy reach, enabling me to find and communicate instantaneously with those people who share my values and interests. My self-education in economics and political theory would not have been possible without the Internet and search engines such as Google. Nor would I have been able to find and connect with other like-minded activists to form what ultimately became the Occupy movement, a movement which I’m sure many of these Google protesters participated in as well. As an activist and scholar, it makes no sense for me to reject those companies that created the social tools with which I empower myself.

There was a study done not too long ago where pollsters asked the public whether they would give up the Internet in exchange for a million dollars. And the answer of 99% of those asked? Absolutely not. Nothing, apparently, has created as much meaning, value or wealth for today’s world than the Internet, if the numbers in the poll prove correct. And something that no amount of money could ever replace is a very powerful entity indeed that ought to command respect from all those who rely upon it in their daily lives.

As far as the income inequality issue, let’s not forget that these tech workers didn’t end up becoming successful by accident, and that they worked super hard to get where they are in life, taking risks and making sacrifices that most others aren’t willing to attempt. And not only did they possess the raw brainpower to pull it off, but more importantly they decided to invest that talent towards ends that benefit humanity as a whole, rather than serve the basest of narrow self-interests and short-term profits.

As uncomfortable as it may be for some to admit, our undergrad college degrees aren’t worth much of anything these days. And while that has a lot to do with the faulty economics of excessive loans inflating the perceived value of a college degree, it’s also a function of the phenomena where technology is replacing many of the relatively low-skilled jobs that most of us once filled, myself included. Those with rare and highly specialized skill sets, such as tech and science workers, will always be in higher demand in the employment market.

Is this a hard pill for me to swallow? Of course it is. But at the same time, it’s forcing me to figure out how to adapt, to think creatively, to self-improve, to create something of value that is relevant to others; and in the process, hopefully help me redefine the concept of value itself, which ought to become a pretty big asset if I work hard enough at it. In essence, it is forcing me to evolve, thus enabling me to achieve something far greater than I was capable of before.

The Google protesters apparently feel that the Google techs make far more money than they deserve. And yet think about the vast, if not immeasurable amount of wealth these innovators have created not only for today’s generation, but for the future of our species as a whole. If anything, these protesters should be pausing for a second to ask themselves what sort of value it is that they themselves are capable of contributing to society, and in what ways they can adapt to the changing times to make that value indispensable.

Related articles

• S.F. tech companies’ civic image at stake as backlash grows (sfgate.com)
• 2013: The year we stopped trusting technology (salon.com)
• #Googlebus protest – What does it say about Oakland’s future? (oaklandlocal.com)

The Power of Optimism

After a few years of listening to doom-mongers such as Alex Jones and the Economic Collapse blog, my head started to fill up with negative voices that encouraged me to give in to feelings of paralyzing fear, panic and paranoia. Spiraling downwards into a sense of helplessness and despair, I finally reemerged with the realization that the world cannot possibly fall to tyranny on its own unless we allow it to happen.

Because we have free will, we are capable of creating the world we wish to live in. With all the technological tools of communication at our fingertips, there is no reason to think that human nature is inherently incapable of creating beauty, innovation and progress with our new tools rather than the nightmare scenarios of tyranny, oppression and suffering. In the end, the choice is up to us.

Just the other day I stumbled upon this highly pessimistic article claiming that digital currencies pose a threat to human freedom. In making his case against the liberating qualities of bitcoin and other digital currencies, the author appears to believe that governments are more powerful than markets; that the State is somehow all-powerful and capable of crushing the billions of voluntary economic transactions that take place every day, according to our own choices as individual economic actors; that somehow the State is capable of pulling off a stunt as immense as global hegemonic economic control and domination, when it can’t even successfully accomplish a task as comparatively simple as setting up a national healthcare website.

In the opening of the article, the author is fearful of “an unfortunate approaching moment in time when our current technological snooping prowess, the ease of big data manipulation and our sprint to a cashless economy will converge. This will happen in such a way as to permit governments to exercise incredibly powerful control over all human behavior.”

I think the most important word to highlight in this passage is the word permit. Seeing as we still live in more or less of a democracy with relatively free markets, and assuming that most of us still possess the ability to exercise our free will, it would seem to follow that the government is only capable of unleashing tyranny upon us if we allow it to. 

Think about the logistics for a second: how else can bureaucrats and elected officials enforce unethical laws unless we permit them to take office in the first place? Unless we hand over the paychecks with which they feed, clothe and house themselves, how can they even survive at all, much less force tyranny upon the rest of us, since we are the only ones providing them with the resources to exist in the first place? Who else is there to enable them other than ourselves? With the communication tools now available to us, governments can only become as powerful as we enable them to be. Everyone who uses the Internet has access to the tools that shape the world we live in, a world which is created collectively by the accumulation of our individual choices.

The author goes on to mention the fact that the government is able to seize any money and assets belonging to either an individual or a company through the process of “civil forfeiture.” While this is unfortunately true, I fail to see how it has anything to do with digital currencies, given that the government already had the power to do so in the first place, and was exercising that power long before digital currencies emerged. I do, however, agree with his sentiment to repeal the government’s authority to exercise civil forfeiture; but that requires wiser voting decisions from the American public, which in turn requires us to become more involved in the political process ourselves, rather than relying on others to shape it for us.

As it currently stands, no one is forced to patronize any particular bank, and at any time consumers can choose to opt out of supporting the current banking conglomeration by transferring their accounts into credit unions and other localized, small-scale services. Powerful as they may be, the executives at JP Morgan cannot hold a gun to your head and force you to walk up to one of their tellers and open an account. If they are powerful, it is only because we allow them to be. You must choose to patronize their services out of your own free will. It literally requires you to get into your car, drive to the location, park your car, and walk up the sidewalk into the building using your own own legs and personal volition. 

What irks me most about the article is its relentless pessimism. It makes us out to be powerless against a mammoth State, when in fact we have all the power in the world. How so? Because as consumers who direct our own choices in our daily economic transactions, we hold the fate of the dollar, the banks, and the entire global financial system in our own hands. After all, it is we who are doing the spending, and they who are reacting to our choices. They can’t have our money unless we give it to them. And they can’t stop us from using bitcoin if we decide to build a new economy that no longer requires the use of their services.

If there is in fact a big bad wolf hiding behind the curtains of the predatory system that we find ourselves in, it might help to turn around and look into the mirror, because that wolf might just be staring right back at you.

 

 

The Market Singularity

The Digital Anarchist

Though when we hear the term “singularity” we most often associate it with the technological singularity sermonized by techno-utopian-futurists at TED conferences, there are in fact an innumerable number of phenomena to which the term singularity can apply.

Take for instance the Occupy movement, which was a profound moment of social singularity whereupon a cluster of individual actors spontaneously converged upon a specific time and place, both in the digital and literal physical sense, to produce a singular event in the history of human social cooperation toward a shared collective goal.

In essence, the term “singularity” can apply to any type of scenario wherein a cluster of seemingly unrelated points converge upon a single event, or event horizon. Whereas the prior interests responsible for motivating the initial movements of each actor are individualistic, it is during that moment of convergence upon the common event that the motive becomes a collective one.

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The Market Singularity

Though when we hear the term “singularity” we most often associate it with the technological singularity sermonized by techno-utopian-futurists at TED conferences, there are in fact an innumerable number of phenomena to which the term singularity can apply.

Take for instance the Occupy movement, which was a profound moment of social singularity whereupon a cluster of individual actors spontaneously converged upon a specific time and place, both in the digital and literal physical sense, to produce a singular event in the history of human social cooperation toward a shared collective goal.

In essence, the term “singularity” can apply to any type of scenario wherein a cluster of seemingly unrelated points converge upon a single event, or event horizon. Whereas the prior interests responsible for motivating the initial movements of each actor are individualistic, it is during that moment of convergence upon the common event that the motive becomes a collective one.

Given this broader definition of the phenomena of singularities, the event that this blog post seeks to explore in substantial detail is that of market singularity. Following the basic tenets of Friedrich Hayek’s “spontaneous order” and the more vaguely attributed precepts of the “self-organizing principle,” I will attempt to convey a brief outline of this concept’s basic structure before delving into its finer details in subsequent posts.

The concepts of spontaneous order and the self-organizing principle can be difficult to distinguish from one another, as both refer to achieving a state of “order from chaos.” In other words, a state of ordered equilibrium is arrived at through processes that are entirely spontaneous, anarchic, self-directed, and self-initiated. In this context, centralized and top-down approaches to achieving ideal states of organization for any system are not only unnecessary, but harmful to the organizing process itself.

From my perspective, it seems that the difference between the self-organizing principle and spontaneous order is that one is the cause, and the other the effect. The self-organizing principle is the cause behind which the state of spontaneous order results. I’m sure that other scholars will disagree and be quick to point out that drawing such distinctions is somewhat arbitrary if not outright tedious; but because I am specifically applying these concepts to market forces, I contend that splitting hairs may prove useful.    

The concept of the self-organizing principle in particular often applies to biology, whereas the phrase spontaneous order is most often used in the field of economics. In the case of biology, not only is self-directed growth the natural order of things as an immutable law of biology, but it is likely also the only means to an organism’s growth and participation in genetic evolution. To intervene in the natural order of self-directed biology is to interfere with the progress of evolution itself.

And so it is the same with the markets and social groups that manifest from the human biological sphere. Markets and other collective social phenomena flourish best when independent of any external forces that seek to redesign, redistribute, legislate, curb, control, or in any other way inhibit the natural evolution of untamed biological processes. Just as all natural living organisms on Earth experience self-directed growth driven solely by the DNA that contains the entirety of information needed for their survival and fulfillment of purpose as a species, so too do humans fulfill their inherent biologic and social destinies best through self-directed means alone.

Taken to its extreme, the self-organizing principle might allow unregulated market forces to combine with the tools of advanced internet technologies such as quantum and cloud computing, resulting in exponentially increasing speeds between economic transactions until they culminate into a moment (or several diverse moments) of unified market singularity. The stock market twitter phenomena of 2010 may in fact hint at some preliminary rumblings of an approaching social event horizon that I believe will have the potential to unleash the mechanisms of global market anarchism is such a way that it will no longer be possible to deny the beauty of the self-organizing market.

In the case of markets, the term “singularity” has the potential to be misread as an implication that all known market forces will converge upon a single culmination point, past which no further innovation or market evolution could take place. Where a static sort of idealism is achieved and no further meaningful innovation is thought to be possible. Yet this point, once reached, would not result in the end of economic activity itself, nor the final summation or goal of all prior economic activity leading up to this point. Rather, it would become a new starting point from which everyday economic transactions hyperdrive into an era of exponentially increasing returns upon the original investment of time and labor.

Before this hypothetical market event horizon, we were living in a world mired in regulation where the State constantly sought to monitor, control, and constrict the natural flow of human progress. Whereas the State cannot create – it can only regulate and redistribute – this was also a world afflicted by needless entropy, by endless penalties that stunted the full flowering of human potential.

It is very possible that in the near future we will live as one global society under an entirely voluntary system of social constructs created from the beneficial confluence of science, technology, and unregulated market forces alone, and where the traditional centralized social contracts once forced upon us by independent nation-states become the historical relics of a bygone era.

The event horizon is fast approaching where technology and markets will replace the need for centralized governance entirely, if they have not already done so at the moment of this blog posting. And it is the express purpose of this blog to attempt to speed up this inevitable process through the power of suggestion alone.

Note: This blog post was first published on Dec 9, 2013. When I logged in today to make some minor adjustments and add category tags, I discovered that an article claiming just about the opposite of everything I’ve just written was published just yesterday, Dec 12, 2013, on an exceptionally pessimistic concept termed the “econgularity” – a term apparently coined by a banker and finance professional that reads as a near-parody of my own hypotheses. Oh the irony of the timing. Is this further proof of the fast-approaching singularity, whether technological or otherwise? Only time will tell.

Related articles

• Cosmos and Taxis (marginalrevolution.com)