The direction we are heading for today is a dangerous one. The inequality that exists today is in stark contrast to the wealth that exists today. While I am not here to talk about the 1%, or the economy, I have a few comments about the current environment we have, the way it can be viewed from a historical perspective, and what I think the future can look like in two different ways.
Today, people like the Walton family, Jeff Bezos, Zuckerberg, and a handful others own more wealth than most of the rest of the world combined. More jobs are lost to automation, and not enough skills exist by those replaced to get new and better jobs. I also don't think they need it, I personally believe we can design a world where automation does most of the work for us, and humans just enjoy life in whichever way they choose. Some will choose to lounge at the beach, while others will enjoy working on their open source projects. Entertainers enjoy performing to the delight of their audience, and the curious will continue to seek education to expand their horizons. All of that can happen without the need for our money based economy when forged laborers in the form of automated machines do the meaningless tasks we do today.
Today, programmatic buying and selling of stocks is known as HFT (high-frequency trading). How high frequency? If you press a button to buy a stock, then as quickly as you can press the button again to sell the stock, you could probably complete the pair of transactions in about one-tenth of a second. Today’s HFT systems can complete approximately one hundred thousand transactions in about the same amount of time. Your order to buy one hundred shares of Google is a mere snowflake in this blizzard of transactions, executed as a courtesy to perpetuate the illusion that you can participate in the American dream. In May 6, 2010, the percentage of trades executed by HFT was over 60%. At 2:42 p.m., the Dow Jones Industrial Average plunged in a matter of minutes, off more than a thousand points, or 9 percent, from its opening that day. Over $1 trillion in asset value had disappeared by 2:47. This happened because of a clash of titans when two competing HFT systems collided, doing exactly what they were designed to do. Things escalated from there, and world-wide systems smelling blood in the waters joined the party, trading furiously based on their algorithms; Apple’s stock price soared to over $100,000 per share, while Accenture crashed to the bargain basement everything-must-go price of 1¢ per share. The real world continued to spin on its axis as if nothing happened.
That means, in plain English, that stock markets are meaningless when it comes to reality. It's a game, but it has serious ramifications, and that is dangerous beyond measure. It wastes resources, in the form of energy, computer processing power, and human time and effort, to conduct activities that are holding back the rest of humanity from doing better things.
Consider a typical website's advertising space, those annoying pop-ups, multiple boxes displaying items you looked up on Amazon last week, or the overlays on screen keeping you away from the content you want. These ad-spaces are not sold by a single website, they are managed by ad-exchanges and vast networks of artificial intelligence machines analyzing impressions of you. Every time you visit a website, a tiny image the size of a single pixel can be requested on your behalf from one of these ad-exchanges. These allow them to place a cookie on your device, and keep track of where you have been and what you have been looking at. Each request like that can be thought of as a pin on a map, keeping track of your movements around the internet. This lets them build a profile of you, based on your actions, without actually knowing you are you. They don't need to know your name to figure out you are a vegetarian when you search a recipe, or know you are interested in running based on the shoes you purchased. Your chances of responding to a random ad may be slim, but vegetarians are more likely to try the new yoga studio. Random people may not play golf, but if you are male (based on the jacket you purchased last week) those odds are much better.
When a page loads, asking for a specific size of an ad, that information is transmitted to an ad-exchange. This in turn sends out a request to intermediary entities (sizmek, adform, weborama, mediamath, etc) to place a bid for the right to show you an advertisement from one of their clients (domino's pizza, amazon, sunwing, etc). These intermediary entities will check your cookie, and perform elaborate calculations to estimate how much they want to pay for the opportunity to show you something, based on where you've been, and their ability to influence you. They also take into consideration what page you are requesting, to make sure they show you something appropriate. The intermediaries can also purchase information about you from other third-parties, the kind that don't sell ads but have your information (facebook for example).
The ad-exchange will then pick a winner in this bidding war, but will most likely pay them the second-highest bidder's price. After spending more computing power than was used to put a man on the moon, an ad appears on your page for a new cat mansion, as you just got a new cat from the humane society last week.
All this waste of resources goes to show that machines are better at the art of persuasion than the most skilled salesperson. The ad business is estimated at $100 billion US dollars per year, and the amount of resources going into figuring out the likelihood of you buying a shirt after seeing an ad are enormous. There are also complex strategies at play between the ad-exchanges and intermediaries to outwit each other, like poker players, and the machines are just doing what they are designed to, accomplish a simple task, without awareness or concern for side effects. They achieve their goals of paying as little as possible to one end of the transaction, while extracting the most out of the other end of their transactions, thus maximizing profits for their creators.
But as this becomes more abundant in our world, these machines are oblivious to the social context, and they behave in ways we humans find repugnant at times, like buying all the batteries from the hardware store before a storm.
All of this, and much more, help shift our world into a world of extremes. Extreme poverty on one end of the scale, and extreme luxury on the other. So let's look into the past for a second, and think about Ancient Egypt. The Pharos ruled for roughly 2000 years, and the entire civilization worked to appease their every whim. It didn't mean they were slaves, as evidence shows, in the negative interpretation of the word in today's culture. The people back then could sell themselves into slavery, as their own body was their only resource at times, in a process of bonded-laborers. They helped build pyramids and in return had an acceptable life with a roof over their heads and food on their tables. By contrast today, Jeff Bezos can afford to personally employ about a million people to build his own personal pyramid, much in the same way as the peasants of Egypt built the ones in Giza. The problem with this idea is that today we also have machines that can do the same work, hence there will be no need to employ a million people for such a project.
I am sure some people at the top of the financial ladder feel some form of guilt at their situation. I don't think they are bad people, or morally deviant in any way. I do think they have the ability to solve the debt problems of most countries, and that thought weighs heavily on some. That's why they turn to philanthropy, that's why some vowed to leave most of their money to charity instead of their children, and that's why they engage in giving back and projects that can advance humanity. There are obviously the ones who don't, and I think they are the dangerous ones. The luxury market is the only economy that doesn't operate at scale and carries a year-by-year growth despite a recession and economic downturns that have occurred since 2008. A $1000 Louis Vuitton handbag requires very similar resources to make as a $20 knock-off, offers the same utility of carrying around items, and is accessible to a much smaller percentage of the population. That expensive bag will provide a small part back to the economy in terms of salary, and a large portion back to the manufacturer that will get tucked away somewhere. Even if a portion of that gets distributed back to shareholders, this doesn't get back to the employees making the product or the suppliers of resources. The wealth moves in a single direction, and the overall trend shows that the luxury market is accountable for almost 60% of the economy. Soon enough we will be in a situation where a handful of "Pharaohs" are the only ones able to afford consumer goods, as there will be no market for the rest of us.
In contrast to this grim prediction, I want to offer an alternative, specifically The Venus Project. The current economic system is an obsolete one, much like the farming economy or hunter-gatherer economies have no place in modern society. Today we are in a very unique position, one that has not existed before in world history. We have the technology and knowledge, combined with global understanding to be able to design our future, and transform all of our lives into a much better world. The choice is ours to work together as a species towards a better future, regardless of religion or country of origin or gender or skin color. We can free people from the drudgery of labor, and provide the basic necessities of housing, food, education, and safety to all people using the right implementation of artificial intelligence and forged laborers.