- Main topic: Algorithm based economies.
- Estimated run time: 15 minutes.
Stock market flash crashes. Time dilation. Dynamic pricing. Mass-customization of nonexistent products. Our world is becoming increasingly governed by algorithms.
An algorithm is a process or rules system automated by a computer program. Potentially very complex in behavior, these algorithms start with very simple instructions executed by the machine with the only limitations of its physical constrains, a set of constrains very different to ours.
These are entities without their own goals or ideas, not the kind of artificial intelligence we are used to see in movies. They are purposeless automata yes, but they are not passive agents. As they become prevalent in our civilization, is very important for us to try to understand their nature if we want to understand our future.
I'd love to talk with you about it.
I'd like to discuss the topic of algorithm based economies and its implications. In this context I would like to expand in a few different vectors:
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Time elasticity. As algorithms' speed keeps accelerating in an ever increasing trend our perception of time will be affected to fit and reflect their timespans. Even more interestingly, we can find today examples of our physical reality being transformed to satisfy their speed requirements.
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Internal dynamics. Read a few lines of code and you'll -eventually- understand what that computer program is doing with relative simple instructions. Put that program in an digital environment interacting with other programs and you'll discover what scientists call emergence, complex systems and patterns arising out of the interaction of multiple simple units. This is a key concept to understand why the algorithmic-markets defenders' affirmations about the deterministic nature of their solutions are a bold understatement.
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The long digital migration. We're not separated from algorithms and machines anymore. True, there is still some areas of human experience that remain virtually -no pun intended- untouched but mobiles, the cloud and wearables infuse our lives with more algorithms as the water slowly percolates through the soil.
I'll add some examples to each one of these elements to illustrate the friction and the ethical/political questions arising from the gap between our nature and that of the algorithms.