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.
The Digital Anarchist 