Thursday, September 12, 2013

Machine Economies

Link to an article about how ultrafast events in economic trading occur as a result of algorithms. These events happen so fast that no human trader can take advantage of them, but the algorithms will. The article also uses interesting language: mob activity on the one hand, ecology on the other.

The economy changes yet again as more and more persons access it. It is unfortunate that robots such as these won't be acknowledged as agents creating their own niches for survival for some time, but at least they are already altering and constructing worlds. What exactly it means for there to be a "fundamental and abrupt transition to another world where conventional market theories no longer apply" is not clear yet, but it does indicate there are other ways of exchanging information and creating wealth than what humans are so used to. This is encouraging, or frightening, but it is one of those feelings where a person, being more aware of things, starts to notice the changes happening to this world.

These virtual markets, virtual in the sense of virtual particles, will have effects on the markets humans notice as humans integrate more of the materiality of their markets with the efficiencies of algorithm-controlled markets, in the same way that humans have not noticed the churning of the virtual particles until they reached levels of technological and mathematical capabilities opening up to them. As the ultrafast events occur more often, the aggregate effect will be positively reinforcing for some time: the spikes and crashes offer more opportunities for generating wealth, specifically through increasing the speed of the exchange. The time when market growth was small, sustained, and long-term is well past. The robots are themselves too short-lived to want to forsake their purpose in life, trading and predating, for the preservation of a cultural history they do not share.

In this sense, market robots are just like any other evolving generation of people. The younger agents, unable to think from the perspective of the longer cycles of the older generation, do not have the same passion to build something culturally significant such as a Parthenon, a Great Wall, a Stone Henge, or a constitutional government. They do not regard these massive wastes of resources as part of their emerging culture, and forsake their immanent possibilities for moving outward far beyond one's own self in favor of treating their monumental materiality as simply another object to be admired, captured and stored away in digital video, and archived. A memory of a crumpling past, a layer the Earth is burying away.

Ultrafast capital is just part of the evolution of that aspect of our reality, the drive towards efficiency and exploitation of time. But it will hurt to be exploited, as it always does, until the welfare state aspect of reality, the drive towards organizational consolidation and creation, makes something from all the energy liberated by the young from the wasted moments of the old.

Humans, being young, look at all the waste of the Earth, who is quite old but not most old, that they have to refine, reuse, and return into existence as a new car, a new shipping container, a new road. I wonder what will return to us in the markets as the robots, seeing all of the wasted time humans take up with living and sensing and indulging and eating and shitting and sleeping, roll up their sleeves and dig into their earth, who is us.

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