There are bots. Look around.

May 23, 2017 By
This entry is part 2 of 4 in the series The Feed

“There are idiots. Look around.”

So said economist Larry Summers in a paper challenging the idea of efficiency in financial markets, a cornerstone of American capitalism. We’ve hit a point where the same can be said of efficiency in a cornerstone of American democracy, the marketplace of ideas:

“There are bots. Look around.”

The marketplace of ideas is now struggling with the increasing incidence of algorithmic manipulation and disinformation campaigns.

Something very similar happened in finance with the advent of high-frequency trading (the world I came from as a trader at Jane Street): technology was used to distort information flows and access in much the same way it is now being used to distort and game the marketplace of ideas.

The future arrived a lot earlier for finance than for politics. There are lessons we can take from that about what’s happening right now with bots and disinformation campaign. Including, potentially, a way forward.

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Entrepreneurship is Metaphysical Labor

April 18, 2017 By

“Businessmen are our only metaphysicians…”

–Walker Percy, The Moviegoer

We were days away from closing a fresh fundraising round when our CFO pulled me aside to tell me the company did not have enough cash to cover the next payroll run.

“Never miss payroll” is the most uncontroversial of all the startup advice out there. We held this hard-and-fast rule in mind and used our gross payroll figure as a fixed expense in forecasts. Black-and-white issues are rare in startups, yet once you get down to practice, you find that even this simple advice is not so black-and-white.

We called an urgent meeting of the executive team to discuss our cash emergency. The solution we came up with was for everyone on the management team to take a drastic pay cut, but leave all other employee salaries the same, allowing payroll to squeak through at just under our current cash balance. A week later we closed our round and soon things returned back to normal.

So, were we faithful followers of the startup maxim? Did we still “make payroll,” even though several management employees got paid less than their usual wage?

Even if you answer in the positive, the best you could say is something like “Yeah, you made payroll, but…” It’s not 100% clear cut. We only just made payroll because we redefined what it meant to make payroll, and shifted some atoms in the world (that month’s salary calculations) to make the outcome “Did employees get paid?” come out true.

In the annals of entrepreneurship, this tale is a dime a dozen. Every entrepreneur worth their salt can relate with a story of their own company’s near-death experience. In fact, because this story is so common, I believe it sheds light on the defining skill set of entrepreneurship.

Just as emotional labor is arguably the foundation of work in the service industry, I posit that the shared work domain of entrepreneurs the world over is one of metaphysical labor.

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The Winter King of the Internet

March 21, 2017 By

On May 23, 1618, in Prague, three Catholics, named Slavata, Borzita, and Fabricius, got themselves thrown out of a window by a bunch of Protestants. That marked the beginning of the Thirty Years War. About eight million died in what was the bloodiest — and arguably most pointless and unnecessary — religious war in European history. It was also, unfortunately, a war that was triggered by a set of conditions that are uncannily similar to those that prevail today, 400 years later, in the Western world of 2017.

Defenestration of Prague, Public Domain photograph from period woodcut.

Curiously, the Thirty Years War, and the events leading up to it, are discussed far less today than the event that ended it: the Peace of Westphalia. Over the last decade, the “Westphalian nation-state” has become the official spherical cow of Internet futurism. To murmur ominously about how the the rise of the internet and the blockchain presage the impending “death of the Westphalian nation-state” is to establish credibility in certain internet thought-leadership circles. In these circles, the Peace of Westphalia has become a notional origin-myth for an equally notional mental model of the modern nation-state.

Yet, it is the Thirty Years War that is the more interesting story for today. In the immediate aftermath of the Defenestration of Prague, for a brief period, an obscure minor noble, Frederick V of the Palatinate, known in the history books as the “Winter King” of Bohemia (and therefore, ex officio, of the Reformation), played a brief but pivotal role in triggering the Thirty Years War. His role bears a remarkable resemblance, with features not captured by other analogies, to the one being currently played in our own time by Donald Trump: The Winter King of the Internet.

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Sulking Through a Subprime Presidency

March 7, 2017 By

I’d like to pretend that the long silence since my last proper post — that was November last year — has been due to the long queue of contributions we’ve been briskly working through, but truth be told, I’ve been sulking.

Sulking. Not depressed, fearful, angsty, or anxious. Sulking is really the only word for the tenor of my thoughts after the election of Trump and its aftermath. Not schoolyard sulking directed at jeering victors, but a deeper sort of philosophical sulking directed at the universe. For forcing me to think once more about things I thought I was done thinking about in my twenties. Things that I didn’t particularly enjoy thinking through the first time around, but believe I got roughly right and, more importantly, out of my system. Things that are fundamentally uninteresting to me, despite their importance to others who are less fortunate or more masochistic.

While I am not particularly coy about my political sympathies (or rather, antipathies) elsewhere, I like my politics to be illegible on this blog. When I write about matters societal, I like to tack between conceptual models and narratives a couple of levels of abstraction below politics and ideology.

Unfortunately, we may be headed into a future — a subprime presidency — where maintaining such a healthy creative distance from politics becomes impossible even in the best case. Fortunately, I’m beginning to find that philosophical sulking is not an entirely infertile state of mind.

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Prescientific Organizational Theory

February 21, 2017 By

Organizational Theory isn’t a science, though it would like to be. Unfortunately, building a scientific approach requires understanding from a number of fields that themselves are still only aspiring to be sciences. Because psychology, economics, and sociology are a mish-mash of rules of thumb and vague, non-predictive, and generally unfalsifiable “theories”, organizations are reduced to ad-hoc rules and guesswork: critical, but prescientific.

For now, to abuse the parable of the blind men and the elephant, organizational theorists are still groping at their respective elephants, unable to figure out that the trunk is next to the tusks, or even that they are part of the same animal. It’s not a science: if anything, it’s a field of engineering, albeit one without a grounding in physics or Asimovian psychohistory to draw from. Precisely because the field isn’t scientific, understanding the engineering rules of thumb that were developed over time is fantastically useful for a practitioner.

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When Tools Shape You

November 23, 2016 By

The weaponized form of McLuhan’s famous phrase the medium is the message is the phrase, first we shape our tools, then our tools shape us (due to to McLuhan’s friend John Culkin). I have come to prefer this form of the idea, and my favorite motif for it is Doc Ock, the Marvel super-villain.

doctor_octopus_thumb

Doc Ock’s artificially intelligent arms fuse to his brain stem in a reactor accident. In the movie version, the intelligence in the arms alters his behavior by making lower-level brain functions, such as emotional self-regulation, more powerful and volatile. The character backstory suggests a personality — a blue-collar nerd bullied as a schoolkid — that was already primed for destabilization by the usual sort of super-villain narcissistic wound. The accident alters the balance of power between his higher-level brain functions, and the hardware-extended lower-level brain functions. In the Doc Ock story, first we shape our tools, then our tools shape us captures the adversarial coupling between medium and message-sender.

The weaker form of McLuhan’s idea suggests that media select messages rather than the other way around: paper selects for formal communication, email selects for informal communication, 4chan selects for trolling. The stronger form suggests that when there is a conflict between medium and message, the medium wins. A formal communication intent naturally acquires informal overtones if it ends up as an email, memetic overtones if it ends up as a 4chan message.

Culkin’s form is the strongest. It suggests that the medium reshapes the principal crafting the message. The Doc Ock motif suggests why. There is no such thing as a dumb agent. All media have at least weak, latent, distributed intelligence. Intelligence that can accumulate power, exhibit agency, and contend for control.

The most familiar example of this effect is in organizational behavior, captured in an extension to Alfred Chandler’s famous observation that structure follows strategy. That becomes first structure follows strategy, then strategy follows structure. The explicit form is Pournelle’s Iron Law of Bureaucracy: in a mature organization, agent goals trump principal goals.

A subtler, less familiar example is the philosophical idea that in any master-slave relationship, the slave can self-actualize through labor. In practice, this happens only when the slave has some freedom above absolute wretchedness, with sufficient cognitive surplus to turn learning from labor into political leverage.

In all such examples, the mechanism is the same. A seemingly powerless and dumb agent, by virtue of having privileged access to information and organizational operations, can become the principal by converting growing tacit knowledge of reality into consciously exercised political leverage.

The idea sheds light on why we are instinctively concerned about the Trump administration-in-waiting. While it is plausible, indeed probable, that Trump’s own ideological postures are merely expedient responses to the needs of the moment, the same cannot be said of many of his agents-in-waiting, whether acknowledged or not. They are tools at the moment, being shaped to the will of a victor. Unfortunately, they can easily go from being shaped to doing the shaping.

King Ruinous and the City of Darkness

November 10, 2016 By

I want to tell you a story today. A sprawling epic mess of a story which began with two histories intersecting awkwardly just over a hundred years ago in a small tribal village nestled in the dense forests of one of the richest mining regions of the world. It is the kind of story that has multiple obscure beginnings but no ending. The kind of story that evolves as an unending stream of good chapters and dumpster-fire chapters, accompanied by endless bewildering arguments about which chapters were good, and which ones were dumpster fires.

The first history is the one behind a board room struggle within the $100 billion Tata empire, which made  headlines in the business press across the world in October. The second is the history behind a 500 million dollar corruption scandal known as the fodder scam, which first became public in 1996, and eventually led to a man named Lalu Prasad Yadav going to jail in 2013.

In 1904, those two histories intersected in that small tribal village which was about to become the modern city of Jamshedpur. I was born in Jamshedpur in 1974, just short of 42 years ago.

But this is not my story. Nor am I, perhaps, the best person to tell this story.

It is, however, as much mine to tell as anybody else’s, and when it comes to telling the story of history, that is often the only thing that matters. So I will tell you this story.

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The Cyberpunk Sensibility

October 27, 2016 By

“Cyberpunk creeps up on us. Some kind of alchemy transforms its fictions into truths, and draws us towards places we thought unreal.” — @uttunul

Conventionally speaking, cyberpunk is a media genre. It brings to mind William Gibson’s Neuromancer. You fondly remember Blade Runner, and maybe Deus Ex or Ghost in the Shell. The phrase “high tech, low life” floats up from the back of your brain. You picture an exaggerated version of Hong Kong with a heavy dose of Rio de Janeiro’s favelas. You’re envisioning the Walled City of Kowloon plus lots of computers. Within tiny apartments, disheveled vigilante hackers stare at their screens, busily infiltrating the databases of megacorps.

coffee-cyber

Illustration by Grace Witherell

But perhaps you’ve also noticed that cyberpunk plot points are turning up in real life. Robot security guards patrol shopping malls. A near-billionaire startup founder sees virtual reality as salvation for the downtrodden global poor. San Francisco’s Tenderloin district is flush with VC money and homeless drug addicts at the same time. And speaking of those vigilante hackers, they’re here in our reality too, pwning companies of all sizes. Some state-sponsored ones like to meddle in foreign politics. It’s all very exciting! Only plutocrats and nouveau mafiosos can avoid feeling uneasy.

Cyberpunk examines the way computing changes power relationships. Asymmetric information warfare has become the norm, as foretold by our pulpy sci-fi prophets. The technological changes that have been snowballing over the past fifty years now mean that anyone can talk to anyone, anywhere, with their identity hidden or not. Edward Snowden can stroll away from his NSA job with a priceless cache of secret documents that detail the crimes of an empire, then escape across continents in a matter of days, to hole up with a rival regime.

So, why bother with any of this if you don’t intend to commit espionage?

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Can the European Union Break Smart?

October 18, 2016 By

For my fourth video blog, I bring you a wide-ranging conversation with David Bosshart, CEO of the Gottlieb Duttweiler Institute (GDI) in Zurich. I’ve known the folks at GDI for a few years, and worked with them several times. Most recently, GDI undertook the German translation of my Breaking Smart essays.

This conversation is partly me interviewing David about the EU, and partly David interviewing me about the US. We talk about the future of Germany and the EU, Brexit, the rise of the new right, the history of corporatism in the US and EU, the rise of China and India, the future of nations, and various other things. Basically the sort of conversation about globalization and Big History that you can only have with somebody from Switzerland.

If the Germanic world interests you, you may like a recent issue of the breaking smart newsletter, Can the Germanic World Break Smart?

If you happen to be near Switzerland around January 17, you should consider attending GDI’s next conference, The Future of Power. They put on excellent events.

And if you happen to have any German speaking friends or business colleagues, be sure to pass on the German translation of Breaking Smart.

Overpowered Metrics Eat Underspecified Goals

September 29, 2016 By

“Alice: Would you tell me, please, which way I ought to go from here?

Cheshire Cat: That depends a good deal on where you want to get to.

Alice: I don’t much care where.

Cheshire Cat: Then it doesn’t much matter which way you go.

Alice: …So long as I get somewhere.

Cheshire Cat: Oh, you’re sure to do that, if only you walk long enough.”

― Lewis Carroll, Alice in Wonderland

Like Alice, most organizations, and most people, have goals that haven’t been articulated clearly enough. I call these rough ideas “underspecified goals” — we only sort-of know what we want. That’s normal for any complex process; when writing, my ideas coalesce only once they become more concrete. Novelists sometimes say that the story got away from them, when the characters behaviors don’t lead to the outcome the author had initially imagined. This can lead to slight narrative flexations, or a full out revolt of the characters.

This happens outside of writing as well, and specifically, in organizations. But it isn’t always a handicap. An explanation of why and how it happens is required to know when this underspecification is benign, or even useful, and when it’s harmful. And that understanding, in turn, will lead us to some conclusions about how, in the latter case, we can mitigate the problem or fix it completely.

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