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 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.

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