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Wednesday, November 26, 2008

The Increasing Value of Peculiar Intelligence

One more sociopolitical/futurist observation ...

If you're not aware of David Brin's Transparent Society concept, you should read the book, and start with the Web page

http://www.davidbrin.com/tschp1.html

His basic idea is that, as surveillance technology improves, there are two possibilities:

  • The government and allied powers watch everybody, asymmetrically
  • Everybody watches everyone else, symmetrically (including the government and allied powers being watched)

He calls the latter possibility sousveillance ... all-watching ...

What occurs to me is that in a transparent society, there is massive economic value attached to peculiar intelligence

This is because, if everyone can see everything else, the best way to gain advantage is to have something that nobody can understand even if they see it

And it's quite possible that, even if they know that's your explicit strategy, others can't really do anything to thwart it...

Yes, a transparent society could decide to outlaw inscrutability. But this would have terrible consequences, because nearly all radical advances are initially inscrutable....

Inscrutability is dangerous. But it's also, almost by definition, the only path to radical growth.

I argued in a recent blog post that part of the cause of the recent financial crisis is the development of financial instruments so complex that they are inscrutable to nearly everyone -- so that even if banks play by the rules and operate transparently, they can still trick shareholders (and journalists) because these people can't understand what they see!

But it seems that this recent issue with banks is just a preliminary glimmering of what's to come....

Yes, maybe there is something a bit self-centered or self-serving in this theory, since I seem to personally have more differential in "peculiar intelligence" than in most other qualities ... but, call it what you will, my peculiar intelligence is definitely pushing me to the conclusion that peculiar intelligence is going to be a more and more precious commodity as the Age of Transparency unfolds...

Obviously, you can also see this phenomenon in financial trading even in a non-crisis time. It's not enough to be smart at predicting the markets to make a LOT of money ... because if you're just smart, but in non-peculiar way, then once you start trading a lot of money, others will observe your trades and pick up the pattern, and start being smart in the same way as you ... and then you'll lose your edge. The way to REALLY make a lot of money in the markets is to be very smart, and in a very peculiar way, so that even if others watch your trades carefully, they can't understand the pattern, and they can't imitate your methodology....

The best trader I know personally is Jaffray Woodriff who runs quantitative.com, and he exemplifies this principle wonderfully: very intelligent, very peculiar (though in an extremely personable, enjoyable way), and very "peculiarly intelligent" ;-)

Democratic market socialism redux

All in all, the conclusion I'm coming to lately ... as reflected in my last two blog posts, as well as in some other thinking ... is that government is going to need to do some rather careful and specific things to guide society toward a positive Singularity.

Yes, if someone creates a hard-takeoff with a superhuman AGI, then the government and other human institutions may be largely irrelevant.

But if there is a soft takeoff lasting say 1-3 decades ... before the hard takeoff comes along ... then, my view is increasingly that the market system is going to screw things up, and lead to a situation where there are a lot of unhappy and disaffected people ... which increases the odds of some kind of nasty terrorist act intervening and preventing a positive Singularity from occurring.

It seems we may need to review the general line of thinking (though not many of the specific proposals) from old democratic-socialism-style texts like Economics and the Public Purpose ...

Perhaps one positive consequence of the current economic crisis is that it may cause the US public to understand the value of well-directed government spending....

And yes, I'm well aware that most of my colleagues in the futurist community tend to be libertarian politically. I think they're just wrong. I am all in favor of getting rid of victimless crimes ... legalizing drugs and prostitution and so forth ... but, given the realities of the next century and the risks of a negative Singularity, I don't think we can afford to leave things up to the unpredictable self-organizing dynamics of the market economy ... I think we as a society will need to reflect on what we want the path to Singularity to be, and take specific concerted governmental actions to push ourselves along that path...

This is not the political dialogue for 2008 ... different issues are occupying peoples' minds right now ... but it may be the political dialogue for 2012 or 2015 ... or at latest, I'd guess, 2020 ...

Why the average workweek isn't decreasing faster ... and what we can do about it

This is another post on political, economic and futurist themes ... starting out with a reflection on a bogus patent, and winding up with a radical social policy proposal that just might improve life in the near future and also help pave the way to a positive Singularity... (yeah, I know I know, lack of ambition has never been one of my numerous faults ;-)

Let's start with the simple, oft-asked question: Why isn't the average workweek decreasing faster ... given all the amazing technology recently developed?

One clue is found in some news I read today: IBM has patented the idea of a specialized electronic device that makes it handier to split your restaurant bill among several people at the table:

http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r=1&f=G&l=50&s1=7,457,767.PN.&OS=PN/7,457,767&RS=PN/7,457,767

The patent application is really quite hilarious reading ... and the number of references to prior, equally bullshitty patents for related inventions is funny too.

What strikes me most here is the amount of effort expended by lawyers, patent examiners and judges in dealing with this crap. Not to mention their paralegals, secretaries, and on and on and on.

Why does this part of the contemporary human workload exist?

One could argue that some wasted work is a necessary part of a complex economic system, and that it would be hard to eliminate the crap without throwing out a lot of useful stuff as well.

I'm sure this is part of the truth, but I don't think it's the whole story.

Another part of the answer, I think, is: This kind of BS work exists because people have time to do it.

If people didn't have time to do this shit, because they all had to be occupied gathering food or making shelter or defending themselves against attackers -- or conceiving or manufacturing truly original and interesting inventions -- then the legal system would rapidly get adjusted so as to make bullshit patents like this illegal.

But, because we have plenty of extra resources in our economy ... due to the bounty created by advances in technology ... we (collectively and without explicitly intending to) adjust various parameters of our economy (such as the patent system) in such a way as to create loads of bullshit work for ourselves.

But there's a little more to it than this. Granted that we have the time ... but why do we choose to spend our time on this kind of crap? Instead of, say, doing less useless work and having more free time?

One important, relevant fact to grasp is that people like working.

Yes, it's not just that we're ambitious or greedy, it's that we actually like working -- in spite of the fact that we also like complaining about working. (Don't blame me -- humans are just fucked-up creatures....).

There is loads of data supporting this idea; I'll cite just a smattering here.

Americans work more and are happier than Europeans:

http://sayanythingblog.com/entry/americans_work_harder_happier_than_europeans/

Old folks who work longer are happier:

http://ideas.repec.org/p/pra/mprapa/5606.html

I can't remember the link, but studies show that people are on average happier at work than at home (if asked at random times during the day), but will when asked SAY they are happier at home than at work.... I think this study was done by Mihaly Csikszentmihalyi, who you can find out about at

http://www.time.com/time/health/article/0,8599,1606395,00.html

http://www.amazon.co.uk/Flow-Classic-Work-Achieve-Happiness/dp/0712657592

He is the pioneer of the study of "flow", the state of supreme happiness that many humans enter into when carrying out some highly absorbing, satisfying activity, like creating an artwork, participating in a sport, acting in a play or doing scientific or other professional work ... or gardening ... or chopping down a tree ... actually the activity can be almost anything, the real point is in the way the mind interacts with the activity: it has to be enough to fully occupy the mind without causing too much frustration, so that the self is continually lost and rediscovered within the ongoing dynamism of the interactive process....

Among many more interesting observations, he notes that:

"
Those at work generally report that they wish they were at home, but when they're home they often feel passive, depressed or bored. "They have in mind that free time at home will make them feel better, but often it doesn't,"
"

But, the plot thickens ... because, although we like working ... this doesn't necessarily mean we like working long hours.

People who work part-time are happier than those working full-time (84 per cent are happy versus 79 per cent):

http://www.arboraglobal.com/documents/Happiness%20at%20Work%20Index%202007.pdf

So where we seem to fail is in creating more part-time jobs...

This seems to be because, for an employer, it's always more cost efficient to hire one full time worker than two part-timers ;-(

So, instead of making use of the bounty provided by technology by creating part-time jobs and also creating more opportunities for creative, growth-producing, flow-inducing leisure ... we make use of it by creating more and more full-time jobs doing more and more bullshit work, like processing patents for "inventions" like the one I referenced above.

Given the way our brains work, we're better off working full-time than we would be not working at all.

But there is at least some evidence to suggest we'd be even better off working fewer hours....

But, given the way the market system works, there is almost never any incentive for any employer to allow part-time workers. It just isn't going to be rational from their perspective, as it will decrease their economic efficiency relative to competitors.

The market system, it seems, is going to push toward the endless creation of BS work, because no individual company cares about reducing the workweek ... whereas individual companies DO in many cases profit by creating BS work ... if they can bill other companies (or the government) for this bullshit work....

So, this leads to the idea that the government of France may have had the right idea at heart, in creating the 35 hour maximum workweek. Which they have since rescinded, because in a global context, it made them uncompetitive with other countries lacking such a restriction.

But anyway, outlawing long work hours is obviously not the answer. People should have the freedom to work long hours and get paid for them, if they want to.

So, an interesting question, policy-wise, is how the government can create incentives for reduced workweeks, without introducing punitive and efficiency-killing regulations.

One possibility would be, instead of just government projects aimed at paying people to build infrastructure, to launch government projects aimed at paying people to do interesting, creative, growth-inducing stuff in their spare time.

Basically, what I'm suggesting is: massively boosted government funding for art and science and other not-directly-economically-productive creative work ... but without making people jump through hoops of fire to get it (i.e. no long, tedious, nearly-sure-to-fail grant applications) ... and specifically designed NOT to discriminate against people who do not-directly-economically-productive creative work only part-time.

This would make it harder for companies to find full-time employees, because it wouldn't be all that much more lucrative to work full-time than to work part-time plus earn a creative-activity stipend on the side. But, unlike France's previous restrictive laws, it would enable companies that REALLY need full-time employees to hire them, so long as they were able to pay the required premium salaries ... or recruit workers who preferred the offered work to paid on-the-side creative-activity....

I suspect this would actually boost the economy, by shifting effort away from BS make-work like processing bogus patents, and toward creative work that would end up having more indirect, ancillary economic value in all sorts of ways.

This may seem a funny thing to think about in the current economic context, when the economy is in such trouble globally. But I consider it obvious that the current economic troubles are "just" a glitch (albeit an extremely annoying one) on the path to a post-scarcity economy. And even so, the government is still giving away money right now to people who are out of work. What if the payment were decreased to people who didn't engage in creative activities, but increased to people who did. Peoples' lives would become richer, as more of them would be more involved in creative activities. And, the human world as a whole would become richer because of all of these new creations.

And this sort of thing will become all the more interesting once robots and AI software eliminate more and more jobs. At that point the market system, unrestricted, would probably create an insane overgrowth of bullshit full-time jobs ... but a part-time creative-activity incentive as I've described could interfere with this dynamic, and nudge things toward a more agreeable situation where people divide their time between genuinely economically useful work, and non-directly-economically-useful but personally-and-collectively-rewarding creative activity.

Furthermore, this would create a culture of creative activity, that would serve us well once robots and AIs eliminate jobs altogether. It would be great if we could greet the Singularity with a culture of collective creativity rather than one characterized by a combination of long hours on useless bullshit jobs, combined with leisure time spent staring at the tube (whether the TV or the YouTube) or playing repetitive shoot-em-up video games ... etc. etc.

OK -- now ... time for me to get back to work ;-)

Tuesday, November 25, 2008

The Inevitable Increase of Irrationality (more musings on the recent financial crisis)

In a recent email dialogue with my dad, I found myself spouting off again about the possible causes of the recent financial crisis ... and found myself coming to a conclusion that may have some more general implications as we move forward toward Singularity.

Basically, I came to the conclusion that the financial crisis can be interpreted, in part, as a failure of the "rational actor" model in economics.

And furthermore, it's a failure of the rational actor model for an interesting reason: technology is advancing sufficiently that the world is too damn complex for most people to be rational about it, even if they want to be.

And this situation, I suggest, is likely to get worse and worse as technology advances.

Greenspan said something related in an interview shortly after the credit crunch hit: he said was shocked that major banks would deviate so far from rational self-interest.

To the extent this is the case, the recent crisis could be viewed as a failure of the rational-actor model -- and a validation of the need to view socioeconomic systems as complex self-organizing systems, involving psychological, sociological and economic dynamics all tangled together ... a need that will only increase as technology advances and makes it harder and harder for even smart rational-minded people to approximate rational economic judgments.

As a semi-aside: In terms of traditional economists, I'd say Galbraith's perspective probably accounts for this crisis best. He was always skeptical of over-mathematical approaches, and stressed the need to look at economic mechanisms in their social context. And of course, Obama's proposed solution to the problem is strongly Galbraithian in nature (except that Galbraith, not being an elected official, had the guts to call it "socialism" ;-)

Now, there is (of course) a counterargument to the claim that the recent financial crisis indicates a failure of the rational actor model. But one can also make a counter-counterargument, which I find more compelling.

The counterargument is: the banks as institutions were perhaps being irrational, but the individual decision-makers within the banks were being rational in that their incentive structures were asymmetric ... they got big bonuses for winning big, and small penalties for losing big. As a human being who is a banker, taking a huge gamble may be rational, if you get a huge bonus upon winning ... and upon losing, just need to go find another job (a relatively small penalty). So in that sense the individuals working in the banks may have been acting rationally ...

Yet the corporations were not acting rationally: which means that the bank shareholders were the ones not acting rationally, by not constraining the bank managers to put more appropriate incentive structures in place for their employees...

But why were the shareholders acting irrationally?

Well, I suggest that the reason the bank shareholders did not act rationally was, largely, out of ignorance.

Because the shareholders were just too ignorant of the actual risks involved in these complex financial instruments, not to mention of the incentive structures in place within the banks, etc.

We have plenty of legal transparency requirements in place, so that shareholders can see what's going on inside the corporations they invest in. But this is of limited value if the shareholders can't understand what's going on.

So, getting back to rational actor theory: the novel problem that we have here (added on top of the usual human problems of dishonesty, corruption and so forth) may be that, in a world that is increasingly complex (with financial instruments defined by advanced mathematics, for example), being a rational economic actor is too difficult for almost anybody.

The rational-actor assumption fails for a lot of reasons, as many economists have documented in the last few decades ... but this analysis of the current financial crisis suggests that as technology advances, it is going to fail worse and worse.

You could argue that this effect would be counterbalanced by the emergence of an increasingly effective professional "explainer" class who will boil down complex phenomena so that individuals (like bank shareholders) can make judgments effectively.

However, there are multiple problems with this.

For one thing, with modern media, there is so much noise out there that even if the correct explanations are broadcast to the world on the Web, the average person has essentially no way to select them from among the incorrect explanations. OK, they can assume the explanations given in the New York Times are correct ... but of course there is not really any objective and independent press out there, and "believing what the authorities tell you" is a strategy with many known risks.

And, secondly, it's not clear that the journalists of the world can really keep up with developments well enough to give good, solid, objective advice and explanations, even if that is their goal!

So we can expect that as Singularity approaches, the rational-actor model will deviate worse and worse from reality, making economics increasingly difficult to predict according to traditional methods.

Some folks thought that increasing technology would somehow decrease "market friction" and make markets more "efficient" ... in the technical sense of "efficiency," meaning that everyone is paying the mathematically optimal price for the things they buy.

But in fact, increasing technology seems to be increasing "market incomprehensibility" and hence, in at least some important cases, making markets LESS efficient ...

But of course, making markets less "efficient" in the technical sense doesn't necessarily make the economy less efficient in a more general sense.

The economy is, in some senses, becoming fantastically more and more efficient (at producing more and more interesting configurations of matter and mind given less and less usage of human and material resources) ... but it's doing so via complex, self-organizing dynamics ... not via libertarian-style, rational-actor-based free-market dynamics.

Interesting times ahead....

Glocal memory, neural nets, AI, psi

The dichotomy between localized and globalized (distributed) memory in the brain and world is pretty much bullcrap.

For a long time I've had the idea of harmonizing the two, and the Novamente and OpenCog AGI designs incorporate this harmony, as do the speculative brain theories I proposed in my books in the 1990s.

But I never really articulated the concept of global/local ... i.e. glocal ... memory in a general way before, which I've now done in a semi-technical essay called "Glocal Memory"

http://www.goertzel.org/dynapsyc/2008/glocal_memory.htm

I decided to write up the glocal memory stuff now because I'm writing a technical paper on glocal Hopfield neural nets and glocal attention allocation in OpenCog, and I wanted to have something to reference in the paper on glocal-memory-in-general, and there wasn't anything....

In case that's not odd enough for you, I also posted another essay using the glocal memory concept to give a possible model for how psi might work, building on others' ideas regarding filter and transmission models of mind:

http://www.goertzel.org/dynapsyc/2008/glocal_psi.htm

Whoop-di-doodly-dandy-oh