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.

 

 

 

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.