The market economy exhibits most of the traits of the much hyped – and feared – singularity, where an artificial intelligence takes over the show and humans are enslaved.

We have all heard the stories of the powerful algorithms. They control our choices and they learn by analyzing an ever increasing amount of data. In the book Homo Deus, Yuval Noah Harari says that we have replaced the idea of God with an algorithm. In this emerging ideology, which he names Dataism, the ultimate goal is to increase the amount of information flow through the algorithm.

“Hitherto, data was seen as only the first step in a long chain of intellectual activity. Humans were supposed to distil data into information, information into knowledge, and knowledge into wisdom. However, Dataists believe that humans can no longer cope with the immense flows of data, hence they cannot distil data into information, let alone into knowledge or wisdom. The work of processing data should therefore be entrusted to electronic algorithms, whose capacity far exceeds that of the human brain.”

Harari makes a link to the markets in his analysis, for example he says that:

“We often imagine that democracy and the free market won because they were “good”. In truth, they won because they improved the global data-processing system.”

These are good observations, but in my view he doesn’t draw the full conclusions of his own observation.

That the market is the super AI and the Singularity.

According to the singularity hypothesis, an intelligent agent (such as a computer running software-based artificial general intelligence) would enter a “runaway reaction” of self-improvement cycles, with each new and more intelligent generation appearing more and more rapidly, causing an intelligence explosion and resulting in a powerful superintelligence that would far surpass all human intelligence. (Wikipedia)

I would argue that ”the market economy” is already the super intelligent self-learning algorithm or artificial intelligence that has taken over from the human mind and brain. It is actually one of the main arguments of neo-liberal thinking that “we” should not try to regulate or decide or control the resource allocations in society but leave it to The Market to decide. The notion goes back to Friedrich Hayek’s tremendously influential article The Use of Knowledge in Society (1945) where he writes:

“The marvel is that in a case like that of a scarcity of one raw material, without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly; that is, they move in the right direction.”

Carey King is on the track of how the market is the most powerful algorithm in his article Artificial Intelligence and the Utility Monster: It’s the Economy StupidHe concludes that:

”In an extreme world with markets for everything, each of us becomes an automaton responding to price signals to maximize collective utility, or GDP, that might have very little to do with our personal well-being.”

While many seem to believe that someone has decided that the economy (i.e. the GDP) must grow that is not the case. Economic growth itself is a result of the market and not a result of plots by financial capital or governments. Even governments have limited abilities to command or induce growth in the longer run (just look at Japan since 1990s). Economic growth is created by the competition in the market place and a few more mechanisms which I have elaborated upon in other articles (such as Competition, not consumption, drives global destruction).

Gradually, societies have surrendered more and more decisions to the Market Singularity, not only because of corporate manipulation but also because it is indeed “efficient”, at least as long as externalities can be dumped in a landfill, exported or hidden. In a similar way as people voluntarily accept the manipulation of their access to information by corporate business such as Facebook, they also voluntarily yield their own power to the Market. And the arguments in favor of this surrender are seductive. The fact that “nobody” decides may sound very democratic as there is no authoritarian ruler or state telling us what to do.  Meanwhile, nobody is accountable.

 

Teaser photo credit: CC BY-SA 3.0