Silicon Valley is surely the epitome of capitalism in the popular imagination, where technological breakthroughs rapidly happen alongside deepening concerns that automation and artificial intelligence is soon to take all our jobs.
This argument usually assumes we are on the cusp of a machine age with the advent of Artificial Intelligence (AI). But what if both the supposed promises of AI and its perils are wrong assumptions? What if we are witness to a new sort of Marxism in Silicon Valley upon which these assumptions are based?
While it may sound counter-intuitive, George Gilder’s latest work, Life after Google: The Fall of Big Data and the Rise of the Blockchain Economy, expounds on this prospect in deep analytical detail. Gilder, a tech enthusiast, sees stagnation already at work in some big Silicon Valley firms – borne of a philosophy which relegates Google and its contemporaries to a future of irrelevance. As moral philosopher Samuel Gregg argues, Marxism’s first error is anthropological in nature, and it is this error to which Gilder clearly alludes.
The Current Philosophy
The dominant tech philosophy holds the view that we have nearly reached an epoch in which machines are set to take over most human jobs. It is an imminent and final reality in a ‘winner takes all cosmos,’ where the inferior humans are best satisfied with a basic income grant; a universe where AI handles work on Earth and a new life on Mars. With human creativity now replaced by AI, the human person becomes subject to new, superior machines. A cog in a more efficient data wheel. This is the ideology of Google, according to Gilder. While the internet search function is important and will ensure the company exists a decade on from now, the Googleplex ideology is a system of the world doomed to failure. According to Gilder, however, this ideology is built on false premises- not least the difference between human and machine potential. “The materialist superstition,” Gilder calls it, “keeps the entire Google generation from understanding mind and creation”; “A machine by definition lacks consciousness. A machine is part of a determinist order. Lacking surprise or the ability to be surprised, it is self-contained and determined.”
Gilder commits to exposing these errors – along with their implications for technocratic public policy and the future of capitalism. The worldview, he argues, contains in itself the seeds of failure due to Google’s centralization, a lack of security, and the absence of price signals for ordering human cooperation. Artificial Intelligence cannot compensate for the model that ignores these realities any more than legislative directives could compensate for the widening cracks in the financial system that heralded the 2008 market correction of the Great Recession.
An enterprise ignoring the principles of market economics is not in the economy for long, barring government intervention.
Gilder says of Googles centralization, security and privacy are in the domain of the provider, not the user. He would prefer more private keys, rather than traditional passwords, as the former are held by individual human beings, not by governments or Google. “Private keys enforce property rights and identities, says Gilder”. (Editor’s note: for more on this facet of Gilder’s argument, see Arnold Kling’s review here.) Further, the absence of pricing in the current Google model means we don’t get what we want, but freely receive what others have deemed best for us. Without the user as the owner, Gilder argues customers are not valued in the Googleplex. When this changes, which he believes it inevitably will, not only will we pay, but we can sell our information ourselves – creating a new market comprising billions of decentralized decisions, all characteristic of thriving competitive economies in the real world.
Without the role of prices, Google faces the same problems governments do in attempting to deliver something free. The role of prices in blockchain technology includes purchasing the protection that makes our data secure. Personal data and transactions among trillions which only users can access- this is the future Gilder sees, a contrast to the present centralized hubs that are vulnerable to hacking.
Peer-to-peer technology, driven by people, and not a centralsied machine mind of algorithms, will define our lives and render false the promise of Artificial Intelligence as the central driver of efficient data collection and innovation.
The Gilder worldview and its implications
Gilder’s work is relevant as it is not just tech analysis, but reveals his own worldview, predicated on the centrality of human beings and what constitutes our uniqueness in the universe. “The blind spot of AI is that consciousness does not emerge from though; it is the source of it”.
Like his previous bestseller, Wealth and Poverty, there are implications for how we legislate. Both in terms of what we legislate and what it is possible to legislate. The real changes will not be an Artificial Intelligence (AI) and fearmongering of takeover. The revolutionary change will be driven by the human mind within a decentralized online system of human knowledge, driven by interpretive analysis of data, private ownership of that data, monetizing it, and discovery through risk-taking using the data we own.
Barring new regulatory constraints, such a future will transform public expenditure assumptions, reforecasting downward the billions of dollars required for infrastructure spending we assume we will need in the future (imagine flying cars, Gilder says, which will remove the pressure on hard-surface roads). Gilder’s sketches of the future may sound mind-boggling, but in principle it has already happened: in Africa billions in telecommunications infrastructure was no longer needed as private mobile providers stepped in and there are now 960 million mobile subscriptions possible at virtually zero cost to the state.
Classic Austrian economics is at play throughout the book. For example, Gilder advises preparing for a world in which fiat currency of central banks “bursts at last”. For Gilder, stable money endows human with dignity and control, which makes the burst of fiat currency a component of liberty as whole. In Austrian economics, where reality is discernable by reason and reflection, fiat currency is not one policy choice among many; but an artificial bubble who sustainability is not guaranteed, says Gilder. It has echoes of the artificial bubble that preceded the sub-prime mortgage crisis; stated monetary value and underlying actual values are out of sync due to distortion and prone to a painful realignment to actual value. For those concerned that the once outsiders of the tech universe may be the new insiders in a world of neo-Marxist ideas and crony capitalist practices, Gilders’ work appears to indicate this new elite – once entrepreneurial, but now often plain technocratic – will be very short lived.
Accounting for the past to help forecast the coming future
While many authors use different examples to make the same point on classical free market ideas, Gilder argues many of these accounts do not sufficiently explain the explosion in wealth. Gilder’s work posits that the problems of centralization and ignoring the role of profit afflict not only governments but any human institution. (For most of history, governments have simply been more prone to these mistakes given the nature of power as more centralised and removed from price signals). The private sector is not immune to human beings at the helm unable to overcome the “knowledge problem” – Hayek’s point to the socialists that no central source can know every want and desire. Knowledge is distributed across actors and their ever-changing preferences and therefore impossible for a central authority to capture- whether human or machine.
To explain the coming cryptocracy era, Life after Google explains not only how cryptocurrency works, but why it does and under what conditions within the blockchain infrastructure upon which the cryptocracy operates. In the marketplace of ideas, the cryptocracy will help enable the “world’s greatest and most complex thinking system,” the human mind, to flourish in a way that has been constrained in our current virtual reality of life online. The flourishing that will be made possible will be more deeply secure and affirm human dignity in a decentralized world of innovation. Crucially, because the cryptocracy is at its core constituted by free people, open markets, and all the vital elements that constitute liberty in our economic decision-making.
Garreth Bloor is a vice president of the IRR, the oldest classical liberal think tank in South Africa. He served as a former executive politician in the country and is the founder of a venture capital firm. Bloor currently resides in Toronto.
READER COMMENTS
Ken P
Nov 29 2018 at 8:35pm
Great review. I read Gilder’s new book recently. It’s very insightful. I’ve always assumed tech to be decentralized and customer focused and often it is, but the book totally made me rethink those assumptions with regard to Google and to distinguish Google/Facebook from Amazon/Apple especially with regard to the role of price signals. That’s not total insulation from consumer preferences, though. Looking back at the approaches of Alta Vista and others, Google definitely dominated via competition for consumer choice. By trying to play watchdog of content many tech companies are taking on impossible tasks.
I’m less convinced on Gilder’s separation of man and machine in absolute terms. He argues against algorithms which cannot be understood as obviously useless, when it is precisely the inability to understand our own creative solutions which he says can’t be replicated. Is there really no surprise in the moves of AlphaGo? I would argue that there is something akin to intuition taking place. I’m not arguing that human-like consciousness is necessarily possible but instead that creativity can occur and that the potential for true Shannon information to come out is a possibility.
Matthias Goergens
Nov 30 2018 at 2:51am
Oh, boy. Who ever wrote those words has never done any debugging. (And slept through all the Chaos theory and fractal craze of the 90s, too.)
Matthias Goergens
Nov 30 2018 at 2:59am
Cryptocurrencies are fun, but at the moment mostly a solution in search of a problem.
(And anyone who wants to see how private currencies can work, should have a look at George Selgin’s works. Especially his overviews over historic episodes of free banking.
I boldly predict that fractional reserve banking in some form or other is necessary for a bitcoin-like cryptocurrency to take off. (But not sufficient. Ie my prediction is falsified, if a cryptocurrency takes off for without fractional reserve banking.)
Google is a big and ever more complicated beast. They actually run countless auctions every day. But for bidders on ad space, not for users.
Readers here might be interested in Google’s Resource economy
T Boyle
Nov 30 2018 at 11:16am
“A machine by definition lacks consciousness.”
I’m not aware of that definition. Indeed, looking around me I can see half a dozen bio-machines nearby, all of whom would, if I asked, claim to be conscious.
Manufactured machines do not, today, show much evidence of consciousness. That makes it factually true, but not true by definition.
Tania
Dec 12 2018 at 10:38am
Interesting thought about consciousness in the article. For sure ‘a machine lacks consciousness’. Only moving and breathing objects have consciousness, such as animals, insects, humans. And this is consciousness, which makes groups of animals be organized, act as they do and so on, and makes us, people, be able to do our jobs, use our bodies, see everything around us, talk, hear and so on. But the most exciting thing is that except consciousness we, humans, also have Personality. You can watch more here https://allatra.tv/en/video/soznanie-i-lichnost . And this is our Personality who we are. After watching this programme, I understood how important it is to understand myself and to use my consciousness in a way it is determined to be used. And not to allow it to use myself.
Tom
Dec 22 2018 at 11:38am
The future will not be peer to peer. There is too much overhead. Some form of centralized issuance and validation of private keys will ultimately prevail because it is so much more efficient and secure.
The future is peer <–> identity trust <—> identity trust <—> peer
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