The Future of the Global Economy

The following is an essay of my own composition around some of the ideas Edie Wiener presented in her fantastic keynote at TEDx Midwest. Sorry about the length. She brought up some really amazing points in a very condensed time period that made me think of a lot of other things.


("TL;DR Summary")

• Technology makes us more powerful and smart than ever before
• Innovation happens faster than ever before
• Unemployment will raise as machines continue to replace people
• We need to change our institutions so they can react quickly to innovation
• We should use our excess labor to change the world

("The Speed of Change")


We tend to think that things are changing faster now than they used to. The past hundred years seems to have exploded with technological change. If you think back to the end of the last century, however, they would say the same thing: that the past hundred years have brought extraordinary growth, unknown in previous ages.


The wise, thus, say that change happens constantly, at the same rate.  The only thing that changes is that our perspective moves forward and thus those changes that happened most recently seem biggest.


The idea that "change is more rapid now is a fallacy" is actually a fallacy.  


Life on earth was single-celled for 7 billion years. It took just 600 million years from the moment multicelled creatures started appearing for all complex life on earth to evolve, and it took just 2 million years for man to come from early apes.


Similarly, civilization has evolved higher level economies based on the efficient solution to human needs at an ever-quickening rate.  We had an agricultural economy for over 2000 years. Just 200 years ago, we started to have an industrial economy. The information revolution started just 40 years ago. Edie Wiener argues that we are already in a new revolution, the emotile economy that started just 10 years ago: an economy of connecting you with people and things that make you feel a certain way.


("Why Faster?")


There are strong parallels with Maslow's hierarchy of needs.  The progression of these economies represents nothing but the mechanization and efficient "solving" of progressively higher human needs. The agricultural revolution "solved" the food supply problem for civilization. The industrial revolution "solved" our need for physical things and our power for physical change in the world.  The information revolution is currently solving our need for knowledge and the emotile revolution has just begun to change, at a fundamental level, how we feel.


Now, obviously, these revolutions don't happen strictly after each other. They feed into each other and innovations in each effect the others. As fewer workers are needed to make food, more people can make tools. The more tools that are made, the less people there are needed to make food. The more information technology we have, the smarter we become and the faster that innovative combinations of ideas can happen.


This not only explains how change accelerates, but also why it always feels fastest in the last hundred years or so.  The rate of change in the next hundred years will be about the same as the last few hundred combined.


("Social Change") 


Revolutions in economy typically necessitate social revolutions as well to remold the social institutions to better reflect the (for lack of a more inclusive word) economic reality.  The industrial revolution saw social revolutions across the world which did away with the institutions that were better suited for an agrarian society.


Unfortunately we still have institutions that are built for an industrial society. 


We raise kids with more stimulation and curiosity and energy and independence than ever before.  We then stick them in the same schools our great-grandparents went to and drug them when they can't sit still and focus on a stale curriculum taught on a black board.  


We have banks and economists that think that wealth should be concentrated and controlled by as few people as possible. We have a government that mediates the voice of the people through several layers of opaque representation and is afraid of asking its citizens to do things.  We have a tax structure that punishes work and encourages harmful behavior. We have old courts, old jails, old regulatory systems, and old intellectual property laws.  


We are only just starting to feel the tremblings of the social revolution in the West and Middle East that the information revolution must eventually cause.


Unfortunately for us, social institutions cannot change very quickly by their very nature of needing to be resilient to whim.  Now that economic revolutions are happening on the order of decades instead of hundreds of years, it is not clear that social revolutions can keep up with the rate of change.


The careful reader may argue that the free flow of information that the information revolution has facilitated should actually speed up the rate and effectiveness of revolutions and allow more small, nonviolent revolutions to happen now than in the industrial revolution. The industrial revolution, after all, was so tough and bloody because the state had mechanized weapons.


How quickly, though, can a revolution happen in today's emotive economy?  What are tanks in Tiananmen Square compared to think tanks on cable TV? How much harder it is to overcome a state that has emotional weapons of comfort and distraction!


This is why companies will continue to overshadow governments in power and influence in society. Our governments (as currently imagined) are not flexible enough institutions to change at the pace necessary in todays world. All that governments can hope to do is set the rules by which companies play together.


("The Future of the Economy")


Edie's description of the future economy is that it will be a "meta-space" economy. The important spaces in this economy are physical space (place for all the people in our crowded world), storage space (where to put all our trash and where to get new resources), temporal space (quantifying time as a commodity), cyberspace (creating ways and spaces to live online), outer space (going off our planet), innerspace (biotech and nanotech) and green space (valuing natural spaces and ecologies). These areas are going to be immensely important as the world gets even hotter, flatter and more crowded.


As the world gets flatter, people in progressively poorer areas move closer to the developed world.  This is great news for them, because businesses can move in and provide (for a price) the development that should have happened there already.  Businesses like WaterCredit.org which finance projects to bring basic necessities to populations that don't have these things can be profitable because it costs so little to purify water and people are willing to pay incredibly well for these basic necessities.  Charity becomes easier, as does "exploitation" which here I put in quotes because it is hard to not see providing clean water as a good thing. The future economy may just be the process of bringing the advances of the developed world to the world's poorest areas.


The problem is that the poorest areas on the planet are by definition poor and can't spend money on much more than basic goods. And the incredibly sad, frustrating news is that they never will.


The problem is this: the rich areas of the world don't need the labor of most of the worlds poor and uneducated anymore. The tragic, terrible paradox of the future economy is that because our tools are so good, we don't need everyone on the planet to be working to solve the rich people's problems anymore, and this means that in a greed-based economy such as we have and always have had wealth cannot flow down to the entire population.


It used to take an entire section of countryside to feed a royal family well in the dark ages. As the population grew and farming / tradesmen improved, more man-power could go into providing the rich with art and enlightenment: and we had the Renaissance.


In the modern world however, a few million dollars can build you a home that Louis XIV would have been proud of, and a mere $50 / month can buy you enough internet to keep you entertained (and happy?) for life. There isn't much higher left to climb on Maslow's pyramid! When solving the problems of the rich becomes too easy, unemployment becomes the norm and not the exception.


("The Way Out")


We need another war.  It is what galvanized the nation after the Great Depression and it is necessary now.  I don't mean a war with another nation.  The planet needs to rally together and focus on solving big problems as a whole.  We have the technology and the human resources to educate the entire planet, to solve global warming, to abolish hunger, to make sure that all water is drinkable, to build a spaceship to go to mars, and more.


The amazing thing is that for as much as this would "cost" governments to do, as a society it would actually cost nothing because there is so much unemployment: unemployment that is not caused by inflation or deflation or stagflation but rather by the fact that solving the problems of the rich is no longer a reasonable way to keep the entire world employed.


In a war, when humanity's very survival is at stake, we rally behind one cause and all contribute to making it possible. This employes not just enough of our population to get by, but enlists the help of everyone.  When everyone is contributing, everyone gets back because suddenly every other human being becomes (economically) valuable.


What mankind needs, at both the private level and at the largest, is a cause of existential importance: working toward a goal not just because you believe in it, but because you will perish if you do not succeed.


The good news is global warming may provide us with exactly what we need.


~Alex Madjar

The Science and the Humanities Major

First, a stupid joke of my own creation:

A humanities major and an engineering major walk into a bar and each order a pint. They sit down and a bit later a barmaid hands each of them a pint glass that's half-full. The humanities major, enraged, asks his engineering friend to go complain to the cheapskate bartender. The engineer agrees, "Seriously! As if they can't afford to buy half-pint glasses!"

Okay, so obviously the first thing that jumps out is how bad I am at making jokes. (Please inform me of a better such joke if you know one) The point however is not my poor talents at humor, but rather the difference in thinking between humanities majors (hereafter called "anthros") and engineering majors (hereafter called "smiths"). The anthro in this joke sees the half-full glass as resulting from the barkeeper's hesitation to give them the full pint, and the smith sees the half-full glass as being twice as large as it should be.

The difference in thinking is obvious, and much seen, but what precisely is this difference and what can it tell us about how we (as humans) see the world.

The answer is, simply put, that humans have evolved as both users of tools and as social creatures.

As social creatures, whose survival both of our group and within our group depends on effective communication of empathy, we are cursed by a lack of telepathy. If we had telepathy, and could know what each other was thinking and the thoughts of predators and prey in our environment, we would be able to plan around what other agents in our environment were doing because we would know completely what that was. Life would be reduced to a game of complete information, and we would all have evolved to be chess players: the tiger is hiding there and wants the turkey over there, not me, so I don't need to be afraid of walking here.

But this is not the world we evolved in. To determine whether the tiger wants to eat you, you must closely watch its posture and see who it's targeting. The process of making sense of the world by looking for "social" cues (loosely defined here to include the posture of tigers) is roughly one of dividing the world into agents (having goals and desires and the free-will to pursue those goals) and then attempting to understand their desires and infer their internal mental state. This process, of seeing the world as a collection of intelligent, emotional, "human-like" agents, is called anthropomorphism, and this is the way that the "anthro" sees the world.

The world is complex, and is the product of the interaction of many complex things that we cannot understand. The anthro "chunks" the world into easily identified agents and makes sense of the world as the "social" interaction of these elements. The extreme example of this being, obviously, the nature gods.

But as we came to understand the workings of high and low pressure systems, we obviously no longer needed to view "the north wind" as a human-like god. We now understand the wind as a "scientific" phenomenon, rather than a "miraculous" one. The triumph of the smiths!

This transition from deified, anthropomorphic understanding to a scientific one is typically cast as the triumph of god-like human reason over our more animal-like, emotional understanding. This view, however, ignores the fact that our "smith's" scientific view is also the product of evolution.

Humans are, apart from uniquely social, uniquely tool-using. Not only do we use the objects in our environment as tools, but we even design and create tools for future use. To understand how a rock or stick might be used as a tool, we must first be able to predict how this object would affect and be affected in a variety of situations. The goal of science, to make predictions about future observations, is a pragmatic goal based on our evolution as tool-users, not a lofty one handed down by god.

To the black-smith, a hammer is not an independent agent but rather an extension of his arm: he understands its properties and can cause changes in his world by using those properties. To "smiths" the world is the predictable interaction of simple tools: I strike the flint, the sparks heat the twig, the twig catches fire, the fire heats the pig, the pig feeds me.

This is the primary distinction between our humanities and engineering majors: how they make sense of a complex world. The engineer views the world from the bottom up: as the vast interaction of simple elements. He predicts the future, by extrapolating from the simple to the system. The humanities major attempts to view problems from the top down: assigning goals and personality to a system, and making predictions from their understanding of humans (themselves a pretty complex system!). While in today's secular society science is often touted as being superior, in fact these two understandings of the world are equally flawed, just in different ways. The scientist may fail to take _every_ interaction into account, and often the wholistic approach misses the crucial detail.

Eeastern and Western Medicine as Exemplifying this Difference

The primary difference, as I see it, between Western and Eastern medicine, is the difference between an anthro's and smith's approach.

In western medicine, we see the body as a completely intelligible interaction between simple components. Naturally, to correct a problem one simply needs to correct for the component of the machine that is missing or repair it. Is you kidney failing? Let's put you on dialysis! Is your heart stopped? Restart it! Are you sad? Take this serotonin supplement! This approach is fantastically successful at saving lives in seriously threatening situations. To some degree, your body is a machine and to keep functioning each part (each "tool") must fulfill its responsibilities.

Where this breaks down, however, is in unintended consequences. For as much as we would like to compartmentalize our understanding of the body, it is a fundamentally more interconnected, complex artifact than can be understood completely. Drugs have side-effects, and while the body is usually resilient enough to balance them out, it is today's "body as machine" methodology that results in serious (sometimes fatal) complications. This leads to the bizarre, completely insane yet all too common practice, of taking one or several drugs just to combat the side effects of another drug. For example, millions of people today are taking Advil to combat the aches and pains caused by Allegra and Lipitor, and it isn't uncommon for psychiatric patients or patients with liver problems to take cocktails of dozens of drugs to remain stable. The nearly endless stream side-effects comes from this erroneous notion that we can have a targeted effect on one part of the body, without it effecting others.

Chinese medicine, far from discarding these inter-relations, relies on them. It views the body as an anthropomorphic relationship between parts, and in attempting to "please" the body they get a fuller understanding of the body-system as a whole. It is this understanding that makes Eastern medicine "wholeistic" and (in many ways) far superior to Western medicine, particular for non-specific ailments and long-term health. Have a stomach ache? Drink this tea, and let me poke your foot! You feel sad? Let's fix your diet, and meet regularly for a massage, de-stress and talk about your life. You heart has stopped? Let's put some needles in your back!

My point is: Give me western when something is seriously wrong: give me eastern the rest of the time. It is a mistake to think that a logical, tool-based understanding is any more valid or any less a product of our animal heritage than a perceptual, anthropomorphic understanding. Both ways of understanding a complex world are equally valid and important.

Application to Computer Interfaces

The problem with computers today is that without presenting a good understanding of how it works to the user, then you cannot think of it as a tool. Yet without presenting itself as a social creature, giving clues and working "with" the user, you cannot understand it as an agent! It's easy to see how many claim to "not get" computers! The challenge to designers of all kinds of tools is to create something whose function (and therefor use) are obvious and appeal to our existing understanding of the world.

The challenge (and perhaps opportunity) with computers is that they are so complex and abstracted away from our typical (physical) understanding of the world, that only very nerdy computer scientists can understand how they work. The opportunity here is that this means that computers are _already_ anthropromorphised, and that it shouldn't be too difficult to "play up".

While many consider "clippy" (Microsoft Word's paper-clip assistant) to be a laughable failure in the history of interfaces, this is (I claim) more from its failure as an agent, than a failure of approach. The problem with clippy was that for as helpful as he tried to be, he never quite understood what you actually wanted. He was, in this way, too ambitious for his time. Despite his complete lack of utility, he (see the anthropomorphism here?) became a well-loved (if oft mocked) mascot of technology attempting (and failing) to be helpful.

But modelling intelligent agents, using machine learning to identify user intent, and even the theory of designing lovable mascots and modelling emotion have all progressed significantly in the past 15 years. Computers are not becoming less complex, and people's conceptual understanding of computers as tools is progressing slowly. Perhaps the time has come for the PDA to truly try to be your friend.