Tag Archives: Technology

AlphaGo and the A.I. Apocalypse


AlphaGo, circa 2050

“After humanity spent thousands of years improving our tactics, computers tell us that humans are completely wrong, (and) I would go as far as to say that not a single human has touched the edge of truth of Go.” – Ke Jei

The above quote is from a man many consider the world’s best Go player. It was stated shortly after AlphaGo, an artificial intelligence (AI), thrashed him as well as many more of the world’s best players to win 60 straight matches, an unprecedented feat. Some marveled at the accomplishment, the creation of an artificial intelligence capable of defeating the best human players in the world at a game that not only requires skill but also tremendous creativity to master. It was painted not so much as a victory for machines but for Humanity, who created a synthetic limited cognizance that showed the first signs of being able to supersede its creators not only in technique but in “imagination” as well.

While taking a walk, something profound occurred to me about this development. There are some who think that we should not be particularly concerned with the prospect of AI achieving intellectual and creative superiority over Humanity; but there was something unsettling about the situation regarding AlphaGo as I pondered it in more detail. Consider that a computer has been created that has shown clear superiority over humans in a game that many thought was beyond a machine’s inherent capability to master. To me, the fact that a machine could establish mastery over humans in this fashion makes it clear that machines likely can gain mastery over humans in every fashion, at least when it comes to cognition.

While it remains to be seen if that’s the case, what really struck me was how AlphaGo was able to do it. This isn’t so much about the “machine learning” used by it but something more basic:

AlphaGo has perfect recall.

Yes, it learns but it also remembers more or less perfectly. In other words, AlphaGo is able to access its accumulated experiences, it’s history, in a perfect way. By being able to draw from all of its experiences in totality, it was able to formulate near perfect strategy to throttle the world’s best at a notoriously difficult game.

In my post “Efficient Markets” Eliminate Risks, I wrote about prescience and how perfect knowledge of the future would inform subsequent actions to either reap gains or avoid calamity. To put it another way, complete knowledge of the future would allow one to formulate a perfect strategy to deal with it.

Consider the prospect that not only can complete knowledge of the future eliminate risk and create certainty of action, but complete knowledge of the past likely can as well. If humans were able to successfully map every action of everyone everywhere in history with a machine, would that machine be able to successfully “predict” what we would do next?

AlphaGo was not just reacting to its opponents, it was using its history to shape its future. It was using perfect knowledge of its past to inform its actions to create a future outcome. Considering the fallibility of the human mind in accurately retaining past accumulated information, is it any wonder that we are prone to repeating the same errors of judgment? Maybe all human error is simply the result of our general inability to perfectly and efficiently access our complete past experiences.

Another thing to consider is that Go is a game with specific rules in which a specific outcome is sought. What are those rules and what is the outcome we seek as a species? Even if we perfectly mapped the past, using it to inform current or future actions would be meaningless if we didn’t know what outcome we were seeking. So is it possible that it is not only important, but essential that Humanity agrees on an overall purpose?

What I think I’ve come to understand is that, in order for Humanity to survive, it should strive for two things:

  1. As complete and unbiased an accounting of our history as possible and;
  2. A clear and continuous linear set of objectives, with each subsequent objective determined only when a previous objective has been met.

In theory, if Humanity were able to record all of its history perfectly, every event, in an AI, that AI likely would be able make very high-value recommendations regarding what our future actions should be.

What would a machine with perfect knowledge of our past be able to tell us about our future? Most likely that “not a single human has touched the edge of [T]ruth.”


The Trust Engine


Somebody recently tweeted something to the effect that being “anti-Capitalist” was a form of absolutism. This person also implied that being anti-Capitalist was hypocrisy in that an anti-Capitalist enjoys the benefits of Capitalism while being “pious” about its flaws. Consider this:

I’ve enjoyed computers ever since I got my first one in my early 20s. It worked great. I was awed by what I could do with it and gaming on it was mind-blowing. I loved that thing.

Why don’t I own it anymore?

Sure, it worked. The software that ran on it was pretty good. It was fast for its time. But times changed. As the software became more capable, the system couldn’t keep up. So I upgraded. Does that mean I didn’t enjoy or benefit from my first computer? No. It simply means that, as software and networking became more sophisticated, new problems arose in software that had to be addressed. Security became a concern. On top of that, the desire for people to do more propelled evolutions in software that often required wholesale overhauls of their code bases. The new software was more robust but also placed greater demands on my system. Eventually, those changes were so extensive that I simply had to buy a newer, faster system. Luckily for me, PC hardware companies understood this reality and kept making their components faster and better.

It was simply evolution.

I’d say, like most people who enjoy computers, I have fond memories of my first real one. I’d also guess that there is not one of us who would trade in what we have now to go back to using it.

This is an easy enough argument when it comes to computers so why is it so difficult to understand when it comes to Capitalism? It’s like any other man-made system. It will work great for awhile but start to show flaws. Those flaws will be patched and patched until it is no longer practical to fix them. Then, a newer, better, more robust system will replace it.

But, oddly enough, this observation isn’t really why I wrote this post. It was just the thought that motivated a deeper exploration. I realized that I was going through life but not really understanding it. What is the essence of our existence?

I didn’t find the meaning of life but I think I did come to a few pretty significant conclusions. I came to understand what the single most important component of modern society truly is:


It is the single most valuable component in society. It is the literal foundation on which all of civilization is built. From the very first time that two non-related humans decided to cooperate, trust has been the most relevant survival trait. Without it, society literally could not exist.

Why is this important? Because, by understanding that trust is the single most valuable component in society, you start to understand why people, at the apex of humanity’s wealth and dominance on this planet, are unhappy. Guys like Max Roser and the late Hans Rosling wave around statistics showing how much the world supposedly has improved. It’s compelling evidence. But they are completely missing the point.

The only way we can survive and prosper truly on this planet is not only by trusting one another but also by valuing the building and sustenance of it as our core ideology. My next statement may seem controversial but, on reflection, I think you will agree:

Trust is the only true religion.

If you explore the tenets of most religions, especially the major ones, trust is their foundation. The very power of the “God” concept is the belief in an objective arbiter who punishes those who violate social trust and rewards those who honor it. Indeed, what is a “belief”? It is trust in any conceptual entity without the benefit of evidence. Even our secular laws and institutions… every single one is built on the premise of trust.

Assuming I’m correct, then consider the following extrapolations:

  • In order for a system to be trusted, it must produce uniform outcomes. In other words, it must produce near identical and consistent outcomes based on context for everyone or everything in that system;
  • The only true “sin” or crime is that which violates, undermines, or destroys trust;
  • The key criteria for trust are consistency, plausibility, predictability, and reproducibility. Any system or institutions that does not fulfill those criteria will be rendered invalid.

When I look at the world, what I see is a fundamental erosion of the trust structures. This is a problem that Capitalism is not solving. Indeed, it is now exacerbating it. When equal circumstances do not produce equal, consistent, or, minimally, equitable outcomes, any system designed to produce those outcomes is fundamentally flawed. A system does not have to produce universally bad outcomes to become invalid, it only needs to produce inconsistent ones.

In any system built on trust, the most corrosive element in it is the “bad actor.” I don’t mean in a theatrical sense; an actor is simply someone who takes action. A bad actor is one who violates, undermines, destroys and, otherwise, exploits trust systems for personal gain to detrimental effect. The irony of bad actors is that many are pretty good actors in the theatrical sense.

Which brings me to this next point: one of the reasons I oppose incrementalism, at least as it relates to social progress, is that it fundamentally validates the bad actor’s actions. Remember, in order for a system to be trusted, it must produce consistent outcomes for everyone. Incrementalism is both a tacit acknowledgement and an accommodation of the bad actor in the form of tolerance. The opposition to incrementalism is rational because trust is undermined in any system where uniform outcomes under contextually similar conditions aren’t possible. By nature, such a system is fundamentally flawed.

I could continue on but I hope those who read this will take the time to relate it to their own experience. Think of the institutions with which you participate, the people with whom you interact. Do you trust them? What bad actors, in person or institution, have you engaged?

I think when you examine it more closely, you will begin to understand why there is so much discontent in the world. Look even closer and you will see that many pathological systems endure largely because, even by producing consistently negative outcomes, they create trust.

Should Capitalism ever fail, it will likely be simply because people no longer trust it.

Immutability = Extinction


A thing that is not changing is dying.

Being interested in technology, I’m often confronted with the concept of “disruption.” Maybe the more apropos term is “creative destruction.” In any case, the idea that growth is indelibly linked to change is one that is pretty much unchallenged when it comes to tech.

The ironic and, at least to me, hypocritical thing is that such thinking doesn’t apply when it comes to Capitalism. Particularly in regards to Silicon Valley and its high-profile venture capitalists, Capitalism is the one concept that should forever be immune to disruption. There is a belief that we have perfected economics, that no system is possible beyond Capitalism and, therefore, no serious discussion of potential alternatives is necessary. Those who believe in the Capitalist system are prone to consider those, such as myself, who contemplate alternatives as “cranks.” Even their language is polarized; most immediately consider anything that is not Capitalist as “socialist” or “communist.” The idea that there can be anything outside of our current economic system is simply beyond their ability to grasp.

Here’s the thing: Capitalism will either change to the point where it no longer resembles what it does today or it will cease to exist entirely. This isn’t speculation or wishful thinking, it is a fact. The simple reality is that a thing that is immutable is unchanging and a thing that doesn’t change is a thing that ultimately becomes extinct.

I find it humorous how serious Capitalists are about their system. From the economists, to the finance guys, to the tech guys, Capitalism is the one thing that is truly “serious,” a thing that, for some reason or another, should not ever change. Indeed, even the subject of it changing isn’t “serious” enough to discuss, at least not in any but the most marginal way. It’s pretty preposterous really. What thing can exist in perpetuity without changing? The champions of Capitalism don’t even seem to be intelligent enough to understand that their unwillingness to seriously address its shortcomings is what guarantees its ultimate failure.

Capitalism isn’t immune to “creative destruction.” At some point, the necessity for it to alter in a substantial or even a profound way will become apparent. What then? Will its champions resist? Will they become the impediments to advancement that they attribute to “cranks” such as myself?

I have to admit, the entire process tickles me. The asymmetries of Capitalism are not indefinitely sustainable. Either a more egalitarian form of growth will evolve from it or it will alter under the specter of violence and upheaval. But, one way or the other, it will change. Or it will die. Simple as that.

So, all you “serious” guys… enjoy Capitalism now while it still resembles something you recognize. Change is coming, whether you like it or not.

The cranks will have their day.

How the West *Really* Got Rich


Nina, Pinta, Santa Maria by BarbedWings

Yesterday, I got into an exchange on Twitter that made me simultaneously remember what I enjoy so much about the platform and why I have significantly decreased my presence on it. I responded to a blog post by economist Jared Rubin titled Why The Middle East Fell Behind; his premise, at least to my understanding, is basically that institutional stagnation resulted from the political and economic elite’s need to manage around the influence of the religious elite, who had the weight of the Quran behind them. The progressive economic improvements codified in the Quran had a major stimulative effect on growth in the Middle East; however, because they were indeed codified into the religion, they prevented economic innovation and thus impaired the region’s ability to progress through economic adaption. I don’t want to misrepresent Rubin’s work so please read his post.

I decided to respond to his post because, while I generally agreed with his reasoning, it gave me the impression that he was making the case of a Middle East that had complacently chosen a path of stagnation. As someone who has read the Quran and learned a lot about Islam’s “golden age,” Rubin’s premise did not seem consistent with the dynamic cultures from that region of that era. The Islamic Empire from 600 A.D. to 1200 A.D. was arguably one of the most progressive and advanced in history; the Middle Eastern cultures of that time forwarded the disciplines of mathematics, science, literature, philosophy, and art to unprecedented levels and it seemed incongruous that such innovation would not touch their economics. Why would a region so advanced in every other endeavor of learning fall behind so dramatically when it came to finance and economics?

To me, history easily provides that answer: war. Between the Crusades and the Mongol invasion, the Middle East endured roughly 300 years of war in some form or another. The Mongol invasion was particularly devastating as it was routine for the Mongols to depopulate and destroy entire cities, including valuable libraries and scholars likely representing hundreds of years worth of technological advancement. My premise is that much of the stagnation of the institutions of that region in that era wasn’t by choice but by necessity. Civilizations at war tend to only progress in technology that facilitates fighting war more effectively versus making other societal improvements. With the destruction of some of its most valuable technological and philosophical resources as well as the ruthless murder of tens of thousands of its brightest minds, the Middle East was devastated beyond repair. The cultures that supplanted the Arab and Persian hegemonies, particularly the Mongols and the Ottoman Turks, were assimilators versus being innovators. Though many of the advancements of the Islamic Empires of the Middle East survived, the Mongols and Turks were cultures with very different motivations and histories; while they assimilated Islam, they were not its progenitors and thus likely could only respect its traditions rather than build upon them.

I advanced my (unoriginal) premise to Rubin and the result was this thread and adjacent related ones. All in all, I think it was a pretty interesting exchange but, once again, intellectual vigor slowly started to yield to tribalism and general suck-uptitude. Thankfully, my involvement reached a natural end before too many people jumped in to “put me in my place” for the apparently serious Internet crime of engaging someone with better bonafides than mine in a fashion that wasn’t completely fawning.

I think Rubin’s premise is well reasoned. His argument reminded me of economic historian Deidre McCloskey’s recent essay on the so-called Great Enlightenment and the rise of the West which I addressed in a rebuttal. Rubin’s juxtaposition of the Middle East with Western Europe seems to me like another angle on the concept of Western Europe’s apparent exceptionalism. A lot of words have been written regarding why Western Europe came to dominate the world economically, militarily, and socially; the basic thread is that, around 1800 A.D., Western Europe, particular England, embarked on an unprecedented technological advancement called the Industrial Revolution.

I don’t intend to challenge fact. However, I’d like to advance my own theory for why Western Europe came to dominate the world.

Let’s start from the period of Islam’s Golden Age in the timeframe of 600 A.D. to 1200 A.D. Around this time, Western Europe was pretty much a backwater. In every meaningful way, the dominant cultures of the Middle East and Asia were far more technologically, militarily, and culturally advanced.

Now consider this: In what direction could Western European culture spread at that time? In pretty much any direction east or south, the peoples of Western Europe were going to encounter a more advanced culture. Are they getting through the eastern Europeans or central Asians, who have already been exposed to the advances of Islam? Nope. Are they going through the Mongols, who have militarized largely from conflict with the Islamic Empire? Nope. Are they going through the Middle East or North Africa, the heart of the Islamic Empire, which at that time is likely the most technologically and militarily advanced in the world? Nope. And, if by some miracle, they make it to the Far East… are they going through India or China, also two cultures far more advanced than them? Definitely not.

The first thing that needs to be understood is that, for a great deal of history, conquest was not an avenue for Western European cultures, at least not on land. The Western European nations (if you could even call them that) were stuck fighting each other on their little, fairly undesirable plot of land. Any attempts at serious expansion would have put them directly in the sights of a more powerful culture.

So Western Europe spent most of its time stuck in Western Europe. However, it does have something that everyone else mostly doesn’t (with the exception of China and Japan): unfettered access to a great, big ocean. When going east isn’t an option and going west means traveling over a huge body of water, an enterprising people start trying to figure out how to travel long distances over that water. So they start innovating. Their ships get bigger, faster, and more capable. Then they start exploring. Yeah, it’s expensive but not as expensive as war (even though you still continue to indulge that pastime every now and again). Now here’s where it gets interesting… they send ships out into the ocean and start finding things. People, places. But, more importantly, they start finding riches. Even better, the cultures protecting those riches, while advanced in some ways, aren’t even close to them technologically and, more importantly, militarily. On top of that, their presence has the devastating effect of making massive portions of the indigenous populations terminally ill from disease, far more effective than any army. So now, Western Europeans are raping and plundering “inferior” cultures all over the globe.

But then, it gets even better. Some enterprising individual has learned on their travels of entire cultures that can be enslaved. The best part is that those cultures are so primitive in comparison that the moral dilemma solves itself. Now they’ve discovered a whole new concept: scale. Slavery allows them to take the first timid steps in understanding the value of economies of scale. Now, there is virtually unlimited manpower to grow their economies.

But they also reached a tricky part: slavery requires space. Using slaves in all that new stolen/conquered land is fine, but those slaves can’t come to Western Europe. There’s simply not enough room. On top of that, Western Europeans figured out early that slavery is expensive. Mouths to feed and all that, which is why they switched to serfdom. “Let the nouveau rich in ‘the colonies’ deal with that headache.”

Now we’ve reached the turning point. An interesting thing happened in the colonies: a man named Eli Whitney found a way to use a machine to do the work of many slaves. In other words, a new method for developing economies of scale was developed, one that was far cheaper and far more efficient than manpower. Now, the concept of substituting machines for labor takes root.

At that point, the floodgates open. The confines of using finite physical resources, particularly physical manpower, to create wealth are circumvented by turning to an unlimited, free resource to achieve the same end: human ingenuity. In the end, it was a combination of necessity and circumstance that allowed Western Europe to make the technological leap that gained it worldwide preeminence.

Is this all a gross simplification? Yeah. I’m definitely sacrificing nuance and detail for succinctness. And I’m also fairly certain this isn’t an original idea. But it is definitely more logically coherent than the concept of Western European exceptionalism, which is really just the intellectual forerunner to white supremacy.

It wasn’t “liberty” or superiority that created the dominance of Western Europe, it was necessity along with the proper conditions. At least, that’s what makes sense to me.

Your mileage may vary.

AirPods, Alexa, and the Rise of Voice


I was in the middle of writing another post for this blog when I noticed that there was a lot of chatter going on regarding Apple’s newly released AirPods. Some have called them “magical” and the level of technology that has gone into them definitely seems to be vintage Apple. I figured I’d take a break from econ and sprinkle in some tech for my readers.

AirPods aren’t just run-of-the-mill Bluetooth earbuds, it appears that Apple is very much treating them as a new interaction model. Airpods aren’t just a passive peripheral but a new human-computer interface for the iPhone. In conjunction with Watch, Apple seems to be trying to contemplate usage beyond the smartphone screen. In this new computing paradigm, voice, and thus Siri, is finally set to become the primary user interface.

Though Siri has been around for awhile, it is Amazon’s Alexa that has shown the tech industry the way to using voice effectively as a user interface. Before Amazon Echo, companies largely focused on shoehorning voice into pre-existing user interaction models, such as controlling elements on a computer with a display. The Echo showed the industry how to build a computer from the ground up using voice as its primary user interface (UI). It has no screen and no tactile controls that require constant interaction. The device is mainly speakers and microphones. It’s the dream of Star Trek nerds everywhere because it operates in much the same way the Enterprise Computer did in that you instruct it by talking to it. I’ve gotten a chance to be around an Echo and I personally think it is pretty amazing. If I could reconcile having what amounts to a dedicated listening device in my home, I’d definitely own one but, between my computers and my phone, I think the world’s intelligence organizations have enough to work with.

The big difference between voice interaction for computers today and what was available in the past is that two things have improved substantially: context and linearity. By minimizing or removing the graphical interface layer entirely, voice can be used naturally and conversationally. But how is it done?

What I suspect is that the industry has rediscovered the power of verbs. When I created my UI model, Simplicity, I didn’t focus on applications but on actions. For greater reference, check out my initial idea document on what would become a concept document for a new type of tablet (coincidentally, a very similar product is being produced and will become available next year. My (mostly positive) thoughts on that at a later date):


As I noted in my document, it is very easy to encapsulate a very wide range of functionality with a few verbs. An additional benefit is that a verb-based interaction model is also highly self-organizing. What I didn’t anticipate was that such an interface would also be ideal for voice. However, considering the applicable verbs for a device that requires no tactile control and has no screen, a remarkably simple yet intuitive voice interface is conceivable.

Consider how Amazon’s virtual assistant, Alexa, is currently used. One class of interaction would be actions. In other words, one of the main things that can be done with Alexa is to have it perform an action, for instance: “Alexa, play Pachelbel’s Canon in D.” In this interaction model, the verb “play” is the cue; at least up until this point, the programming model is pretty simple. It gets more complicated when nouns are added to the equation but the overall model at least has the benefit of being very linear and pretty intuitive from the programming perspective, at least in theory (Alexa programmers may seriously disagree but I’m stating that conceptually).

The second class of interactions would be interrogative in nature, such as “who,””what,””where,””when,” and “how.” “Why” would form a special case because this particular interrogative is difficult even in human-to-human interaction. However, even in this case, the interrogative acts as a very simple cue. Nouns definitely complicate this process more than an action-based model and I suspect that it is with these types of inquiries that most voice assistants struggle.

What I see is that, at least at the conceptual level, voice interfaces have the potential for a very high level of power and sophistication. Even more importantly, I see that the programming interfaces also have the potential to be extremely powerful yet very simple, at least conceptually.

It took a minute but it looks like voice interaction may finally be ready for prime time. In my opinion, Alexa was the first really great example of voice as an interface done right but I wouldn’t count out what Apple is doing with Siri and the AirPods are a really innovative way of making that interaction model more mainstream. I suspect that augmented reality (AR) will be the third pillar of Apple’s attempt to redefine human-computer interaction, likely in the form of an eye wearable. My guess is that Apple’s main challenge on that front is making such a device look unobtrusive enough to wear all the time.

And the iPhone? The brains of the outfit, at least until Watch is sufficiently powerful enough and the new interface and usage models are fully perfected.

The Riddle of Scarce Abundance: A Redux

oracle of Delphi

In my post, Currency and the Riddle of Scarce Abundance, I offered what I thought were the ideal traits of a cryptocurrency that had the ability to replace fiat currencies.

Since then, Bitcoin, the current cryptocurrency poster child, has once again embarked on a roller coaster ride of volatility, prompted mainly by the defection of a prominent developer in the Bitcoin community, Mike Hearn. In his post, The resolution of the Bitcoin experiment, Hearn refers to Bitcoin as a “failed experiment.” Many conflated Hearn’s statement to mean that Bitcoin was “dead” and gleefully pointed to the exchange rate and transaction volume to paint him as a bitter opportunist who also had the ignominious condition of being dead wrong.

Here’s the thing though… Hearn never claimed that Bitcoin was “dead” he only claimed that it had failed. In that respect, I think there is a lot of evidence that he may be correct. Despite the claims that Bitcoin transactions are increasing, there is almost no evidence that its use for common financial transactions is increasing. As for its exchange rate, there are many incentives to trade in Bitcoin, few of which are relevant from a currency standpoint. The truth is that Bitcoin, in its best case, only shows utility as a speculative vehicle and, in its worst, shows signs of being heavily manipulated.

The simple reality is that, if a cryptocurrency intends to replace central bank-issued fiat currency, people, first and foremost, have to have an incentive to use it for common financial transactions. As I’ve stated before, no one truly has an incentive to use Bitcoin every day. Why? It’s too volatile and doesn’t really do anything significantly better than the current currency paradigm.

My thinking is that Bitcoin suffers from an abundance, or lack thereof, problem. Its scarcity is used as a means to trap value but it works against the currency being used every day. I’m willing to admit that this may strictly be a matter of psychology. But the truth is, Bitcoin feels scarce. Its deflationary bias exacerbates that feeling. Not only is it not practical as an every day currency, it feels like it’s not practical as an every day currency. People intuitively understand that Bitcoin doesn’t work because there isn’t enough of it to go around (yeah, I know, “divisibility,” blah, blah, blah).

In my opinion, the best use case for a cryptocurrency in today’s world is as a reserve currency. People may choose to buy U.S. dollars for that purpose but I think there would be something uniquely encouraging for many people if there was a popular currency that was not controlled by any nation that could also be used seamlessly across borders. But I think it also has to feel like a currency as well. There has to be both an actuality and an intuitive sense that the currency is stable yet flexible, that it can grow effectively with demand without destroying its ability to store value. Call it “faith.”

What I came to understand is that a currency can expand as long as it remains in lockstep with demand. There has to be effective mechanisms to destroy money as well as create it in an economy. I think many of the problems faced in our current economic system stem from a fundamental disequilibrium in the creation and destruction processes of money. The imbalance is caused by the demand for interest on debt-based money which creates a net-negative sum bias. The result is that, as debt is serviced and profit is protected, an artificial scarcity of money is being produced in the every day economy which is encouraging a deflationary environment.

As an aside, many people believe that technology is a major factor driving deflation. This is an interesting theory. My first response is that this leads to a very strange syllogism:

  • Software allows more to be done with fewer resources;
  • As a result of software “eating the world” and efficiencies of scale, fewer resources are being consumed;
  • The result is deflation as there are more resources available in relation to demand.

Here’s where this gets tricky for me: how does this reconcile with an expanding money supply? At the personal level, if I have a smartphone that can substitute for a myriad of devices, it stands to reason that I should have more money in my pocket. Now scale that out to hundreds of millions of people. If deflation is less money chasing more goods but tech is helping people keep more money in their pockets, then how is technology causing deflation? Indeed, technology should be having an inflationary effect, at least monetarily, relative to the expanding money supply. The expansion of markets globally easily translates into greater use of resources in aggregate. It should not be possible for technology to have a deflationary effect. Quite the opposite actually.

Indeed, there is a massively deflationary element counteracting the naturally inflationary bias of technology. There is mounting evidence that rents, particularly in housing, are contributing to that effect. So, even in an environment in which technology should be putting more money in people’s pockets, the demand for that money in the form of rents is systematically eroding people’s personal wealth. So even with more income and personal wealth, many people are actually poorer as the result of the increased demands on it. This seems to validate Thomas Piketty‘s research on economic inequality. The economist Branko Milanović has coined the term “wealth-poverty” to explain this phenomenon.

The money supply is expanding at an amazing clip, more natural resources are being consumed now than at any time in history, yet disinflation/deflation is a problem in all but the most corrupt countries. This is a strange contradiction, one that has many central bankers puzzled. Disinflation and deflation suggest that the expansion of the money supply can’t keep up with even the tepid amount of growth that we are now experiencing.

So how does all of that relate to cryptocurrency? Well, one of the advantages of a cryptocurrency is that it can provide insulation from the current economic forces. A stable cryptocurrency can provide a completely liquid safe haven and act as an effective counterbalance to central banking monetary mishaps. Think of it as a safety net for the global currency system.

So getting cryptocurrency right is very important, so much so that I think even central banks would be able to get behind a good one. It could be used as an escape hatch should the worst happen.

But, as I’ve shown before, Bitcoin is already rigged in favor of its early adopters. Increased demand would only ensure that each subsequent purchaser of it gets less and less while the fortunes of those who accumulated early and cheaply would go through the roof.

The answer is the creation of a cryptocurrency that allows true supply/demand equilibrium. Everything necessary to create it now exists. As in many things, it is not a lack of capability but a lack of will that is preventing it.


The world can be a funny place. We are constantly assaulted with various perspectives and tend to give weight to the ones that validate, rather than challenge, our preconceptions. I don’t consider myself either a liberal or conservative though my politics could probably be described as mostly left-leaning. It’s kind of humorous to me that many have described The Currency Paradox as “socialist” when, in reality, it is nothing of the sort. I personally think it has elements that (should) appeal to many political, economic, and ideological philosophies and, as a result, transcends them.

I don’t consider myself contrarian for the sake of being contrary but I know I can be so because I try to be objective. Do I succeed? Unlikely. Like everyone else, my worldview has been shaped by my experiences and I probably tend to over-emphasize aspects of life that, from a broader sense, may not be that serious and vice versa.

In the end, I strive to avoid existing in two particular states: dishonesty and hypocrisy. I can look at the stats and see that, particularly over the last 300 years, the world has improved immensely. By all objective factors, death, crime, disease, and poverty are in retreat. The world is truly improving.

I could leave it at that. I could choose to focus on the positive and ignore or marginalize the negative. I could choose to take the long view of history and think that, at some point, crime, disease, and poverty will be completely eradicated (death, not so much). My emotional life would definitely be much easier if I just went with the flow.

The reason why I don’t, the reason why I wrote The Currency Paradox, the reason why I would like to see Capitalism ended in my lifetime is because, in the long arc of history, billions have fallen between the cracks. How many people suffered and needlessly died to bring us to this point? How many died in slavery or in exploitive servitude so that people could own iPhones today? For that matter, how many suffer and die every day because “the market” has determined that they do not have worth or value?

When someone dies as a result of structural violence, neglect, abuse, disease, or some other dysfunction that Capitalism breeds or, in theory, can address, why do we think that is an acceptable outcome? If only a few millions of people are dying today rather than the tens of millions who were dying previously, why are we so willing to write them off as acceptable sacrifices to history? We finally realized in the U.S. that the LGBT community should no longer have to wait for their right to marry, yet we are OK consigning literally millions of people to death because we think the Capitalist system is already “good enough.” If history is about progress, why are we unwilling to accept that we have the ability to finally enlist everyone, everywhere to contribute to the advancement of our civilization? Why are we unwilling to ensure that others do not face the instability, degradation, and insecurity that pretty much no one individually wants to face? Are the “acceptable losses” of Capitalism truly that acceptable? Would you trade places with one of those whom Capitalism has forgotten or neglected?

There is a tremendous irony in following the tech scene, particular those immersed in the culture of Silicon Valley. Its venture capitalists and high profile entrepreneurs are some of the most “optimistic” people when it comes to the future and what it holds. I put the word “optimistic” in quotes though because it isn’t really optimism in my book so much as it is marketing. Many of the same people who believe so unerringly in technology’s ability to disrupt, destroy, and replace the vestiges of the past are also staunch Capitalists; they don’t see the hypocrisy in desiring unfettered change, innovation, and growth in everything except the very system underpinning their culture. Sure, that’s a *natural* response but it is still very much hypocritical. If we can disrupt the world, why is a system that countenances the death of millions worldwide off-limits?

Even if I could accept the trade-offs of Capitalism, I also would like to see it replaced because I think it is not an “anti-fragile” system. Capitalism has had to be saved from itself on at least two occasions in the last century. Do I believe that those crises are the last that Capitalism will ever again face? No, I don’t. Indeed, I think that there will be at least one more major economic crisis within the next 100 years, likely within my lifetime, and it will probably be a doozy. I do not have confidence that the next crisis will be resolved without a great deal of upheaval.

In the end, I wrote The Currency Paradox as an act of conscience. It was the non-hypocritical thing to do. It represents the world in which I would like to live, one in which everyone has a fair chance to maximize their potential. I think we have grown beyond the need to make compromises that result in suffering, unhappiness, and death. Whether some people want to accept it or not, Capitalism is already obsolete. We could either choose to willingly explore the next step in our economic evolution (whether it’s related to the innovation in The Currency Paradox or not) or we can let history decide for us, a process that is likely to be very painful.

The choice is ours.