On disrupting death

Saw this posted by Climateer Investing, regarding what I have long described as Silicon Valley’s God complex:

The entrepreneurs are driven by a certitude that rebuilding, regenerating and reprogramming patients’ organs, limbs, cells and DNA will enable people to live longer and better. The work they are funding includes hunting for the secrets of living organisms with insanely long lives, engineering microscopic nanobots that can fix your body from the inside out, figuring out how to reprogram the DNA you were born with, and exploring ways to digitize your brain based on the theory that your mind could live long after your body expires.
“I believe that evolution is a true account of nature,” as Thiel put it. “But I think we should try to escape it or transcend it in our society.”

Don’t get me wrong. Extending and improving mature life is a noble cause. But we should be mindful of the potential tail-end risk that comes along with “disrupting” death.

First, there’s the Miracle Day scenario (if you think insurance/pension firms have funding gaps today, imagine what might happen to them if we find the secret to eternal life but not necessarily the secret to rejuvenation).

Second, if we all live forever, it seems reasonable to assume we wouldn’t be able to have children at the same rate. But can you imagine a world with no children? A world with no rejuvenation? And a world where new life has to be capped? What becomes of our purpose? I think unless we find a way to colonise new planets and extend life beyond our own solar system, eternal life would be a frightful prospect for our planet.

All of which reminds me of a personal anecdote.

When I was about five years old, I used to worry a lot about dying. In fact, during that period of my life the fear of dying consumed me night and day — preventing me from sleeping through the night, driving my parents up the wall. This continued until one day, whilst trying to calm me down, my dad said: “don’t worry I know a man who can sell me some magic pills. They make anyone who consumes them immortal. They’re very hard to get, but I think I know a way to get them.”

Needless to say I begged my dad to get me these pills and promised I would be good and always do what my parents say if only he would find a way to get them.

Next day, as if by magic, my dad appeared with the pills to hand.

From then on I wouldn’t go a day without taking them. (I later found out they were just vitamin C and that I was a total mug, but that’s another story). In any case, I referred to them as my anti-death pills, and if they were ever forgotten or ran out I would panic just as much as I ever did. This state of affairs continued for about six months until all of a sudden it occurred to me that if I lived forever I would probably get immensely, hugely and unfathomably bored.

It was now the fear of eternal boredom that started to concern me more than the fear of death. I also coincidentally had a horrible nightmare — which I remember vividly to this day — of a nice sunny day at the park turning into something akin to a zombie apocalypse, with everyone around me beginning to decay and turn into a skeleton.

I decided at that point to stop taking the pills. It was better to die than to be eternally bored. This was a big epiphany for a five year old.



Digital scarcity

Here’s a thought experiment.

What happens if and when all the digital services we have become accusstomed to getting for free experience a system-wide revenue slump (perhaps due to a sudden dearth of advertising dollars on the back of extreme market fragmentation that makes advertising on platforms much less appealing) and are forced to start charging for services instead?

How would such a sudden system-wide digital scarcity affect users? How would users choose to allocate their modest salaries to digital services if they had to pay for them? Who would win and who would lose?  What would be considered vital and what would be considered a luxury? To what degree would such an event constitute a major inflationary shock?

Thinking about myself, I would pay only for the following services and only if certain conditions were met:

1) a neutral search engine (one that doesn’t use my data to better target advertising at me and doesn’t rank commercial searches I might make according to the dollars corporates have passed on to the search engine).

2) my email, providing it was cryptographically secure.

3) one instant messenger app.

4) one social media site (that didn’t target advertising at me. It would probably be Twitter, not Facebook or Linkedin).

5) up to 10 different news sites. I already pay for subs for the New York Times, New Scientist, WSJ, Vanity Fair. The FT is a given. I would pay for Reuters, some Bloomberg content (can’t see myself living without access to Matt Levine), perhaps the Daily Mail (sometimes you need a brain rest), im presuming BBC would remain free because of the license, and I’d also pay for the Guardian. The remainder I would pick randomly. I’d pay for an archive service.

6) would I pay for Youtube? Probably not. If we are going down the pay route i would pay for video content distributed via formal channels. I would not pay for selfie tutorials or “viral” pics of cats. Id expect those could be sent to me via the other channels I pay for, and be hosted on different sites. Would i pay to have access to a video broadcast network that I can post content to? Probably not. Only on a case specific basis.

7) i’d pay wordpress to host this blog.

8) I’d pay for an RSS reader — even if i just get links to content that I later have to pay for. But I’m presuming some truly voluntary altrusistic content would remain free, notably in scenarios where the cost of hosting the content is covered by the author.

9) i’d pay for cloud storage and photo sharing/storage.

10) i’d pay for an encyclopedia, especially if was run and verified by experts, with a managemenf board that was accountable for mistakes and errors.

11) I’d pay for food recipe sites. Or other hobbiest specific content.

12) I already pay for netflix and spotify, and buy content on itunes, so I’d continue to do that.

13) I’d possibly pay for a travel information app.

14) I’d pay for map services.

15) I’d pay for a secure browser service.

16) education platforms.

17) neutral honest marketpalces that don’t give preferential treatment to particular participants. 

Things I would probably not pay for out of my own pocket (because there are limits and as a journalist I would expect my employer to pay for some of these, or get journalistic priviledge):

1) translation services

2) google earth

3) a host of social media sites/apps im currently signed up to but never use.

4) google books

5) academic journals

6) google trends

7) google analytics (im not too fussed about knowing who is reading my blog, since im not  trying to sell advertising)

8) any corporate retailer’s app that gives access to product sales.

9) medical information – i’d expect a publicly funded and factually corroborated service.

10) product reviews

11) trivial databases

12) reddit, and chat forums

13) government websites

14) national statistics

15) directories

16) price comparison, or marketplaces 

17) skype. I would use my normal phone.

18) Tumblr.

19) Ello, and all sorts of other social media sites.

There are probably a multitude of things I’ve missed out. But you get the gist. If I tallied up the cost of essential digital services I would prefer not to live without, I think we would come close to an additional monthly expense of at least £1000 for digital goods I currently get for free. That would hurt anyone’s pocket. That would also count as an inflationary event.

Remember the basis for this thought experiment is that all these services are being subsidised by advertising dollars and/or speculators awaiting advertising dollars. But that the model only works in a winner takes all digital environment. The more the digital universe fragments the less advertising dollars there are to go round (or they get distributed in such a localised way that they can’t form the economies of scale that can allow major cross subsidisation of digital products to continue indefinitely).  The positive sum game that the internet is based on (the idea we can all get a free lunch on the internet) may in that scenario turn out to be a fallacy, or even a temporal market inefficiency. When the true cost of these services is revealed, in terms of energy and human labour/attentiom, we may suffer a major repricing in the economy.  On the plus side we would become more discerning digital consumers. This would see poor quality providers, including system spammers, go the way of the dinosaurs (one would hope). 

Basically what I’m getting at is that I don’t think there is any such thing as zero marginal cost. Even on the internet.

Bitcoin myths #1040

Myth: Bitcoin is simple to use!

Bitcoin may be many things but it is definitely NOT simple to use.  Indeed, any system that requires an “Anna and Bob” schematic by definition is not simple to use.

It’s simple to use only if the complexity is intermediated by a third party. But this of course defies the point of using Bitcoin. That third party is also going to charge you by the way. And if it’s not charging you, it’s probably exploiting you in some other way, probably by using your data or flow against you in some underhanded two-sided clandestine market way.

Bitcoin myths #1039

Again, just tackling some of the audience questions that arose during yesterday’s panel which I didn’t have a chance to answer and felt were incompletely answered by other panelitsts. 

Question: but it’s just so darn cost effective for merchants who get ripped off by payment providers all the time!

The usual response to this question (statement) by panelists — even the reasonable ones — is agreement. “Yes, yes”, people say, “There’s no denying the cost advantage for merchants.”

But this too is a fallacy.

Had I had a chance to respond I would have guided the audience to the work of Jean Tirole on two sided markets. 

The reason merchants bear the bulk of payment processing fees today is because they stand out as the key beneficiaries of the payments which are taking place.

For merchants it’s a competitive advantage not to have to slap a payment charge onto whatever good they are charging for. It makes their prices appear lower vs everyone else.

After all, a customer who really wants the good may end up changing his mind about the purchase if on top of VAT (which is usually embedded into the price of the good and non negotiable) he has to weather a payment charge.

Banks know merchants want to appear competitive. They also know customers will run a mile from their own services if they pass the cost of clearing directly to their accounts via bank account fees. They see merchants, consequently, as best placed to support the cost of the payment network, because merchants have other tools to make up for these costs: branding, promotion and/or bulk sales and bundling (distributing the payment cost over a series of goods). Hence the phenomenon of “minimum spend”.

Why does Bitcoin appeal to merchants? Well, mainly because they get to undercut the competition. The cost of clearing payments is passed on to miners and speculators in the Bitcoin network instead. Bitcoin price speculators are basically covering the cost for merchants. What’s not to like for merchants?!

Problem is, this arrangement is subject to diminishing returns and not at all a long-term solution.

1) Eventually the speculative inflows will subside leaving miners on the hook for covering the costs of the network. Unless they are benevolent altruists — unlikely — they will seek to pass the costs on by hiking fees to merchants and users. (Gavin Andresen is already proposing passing the costs of the network over to high itensity users via an assurance fund fee).

2) the cost advantage for the merchant will eventually be arbed away, as everyone seeks to discount in the same way offering “If you pay with Bitcoin, you get 20 per cent off” type deals. Merchants, by the way, already do this for cash sales. But being an inflexible “only cash” business doesn’t grow sales. Look at how taxi cabs are now suffering because they hate taking cards or other digital payment mechanisms that make life easier for the customer. Only merchants who have a massively oversubscribed business/service can afford to be that fussy.

A more logical strategy is to compensate for the cost of the payment by embedding it into the price. If the customer voluntarily pays by cash or Bitcoin you the merchant then get the additional profit. Meanwhile, if the merchant feels the sale is at risk because the customer is dithering on price he can then offer a cash discount as a negotiation strategy to win the business.

Flexibility is key. As is providing the customer with as good an experience as possible so that he keeps coming back. As long as the good is sold at a price that allows the merchant to break even on his costs with some profit margin that’s all that matters. And since most major providers charge standard rates and don’t favouritise some merchants over others it all tends to equalise. There aren’t many merchants who can consistently beat competitor prices just because they’re using cheaper payment providers. Not for long anyway.

Think of it in terms of the Amazon postage and packaging fee. At the moment customers are accustomed to paying the postage costs directly, treating it as a surcharge on top of the merchant price. But let’s face it we’ve all experienced instances when we don’t go through with the purchase of a small value item precisely because when it comes to adding postage, the postage fee makes the good feel too expensive.

Amazon, in its wisdom, has realised that many impulse purchases are lost on account of this phenomenon. Hence why it itself sees value now in getting into the postage business and/or offering discounted rates to customers who are part of a postal members club or who buy in bulk.

This makes sense for Amazon because the company can steal market share from competitor retailers who can’t offer such postal discounts. The volumes, Amazon hopes, will make up for the costs of postage incurred to win the business. A retailer like Amazon is also helped by its scale, it’s smart logistics network and the data it gleans about you and your consumption habits when you sign up for its prime delivery network. 

The point is, these are dynamic systems that always adjust to form an equilibrium, so whatever “cost advantage” merchants think they get with Bitcoin today, it will soon be eroded as the system adjusts. Either because customer business will be lost due to the complexity of using Bitcoin, or because everyone else will adopt the same technology so the competitive advantage dissipates or — most likely of all — because the miners/speculators who are absorbing the costs on behalf of the merchants at the moment and making the whole thing look synthetically cheap will stop doing so (or go bankrupt).

Bitcoin myths #1038

Another week, another Bitcoin panel, another opportunity to hear the same old myths being propagated about the world’s worst currency.

This time the favoured mythology was the idea that Bitcoin is apparently the only truly debt-free economic system in the world.

Which, of course, is a fallacy.

Leaving aside the existence of outstanding claims on Mt Gox following its bankruptcy, the proliferation of Bitcoin derivatives markets, the attempted creation of an etf, all sorts of dodgy custody businesses that have failed to keep promises, and the rise of offchain clearing — all of which show Bitcoin is entirely prone to debt, leverage and finding itself short — let’s tackle the specific claim that it’s the fundamental unit of Bitcoin itself that is debt free.

This argument is based on the notion that because you can’t fake Bitcoin units in the master ledger, whatever debt exists in the economy is an inferior subordinated claim and thus totally separate to Bitcoin. The master unit remains debt free.

So even if you can’t control how many times people oversell claims to the underlying Bitcoin, if anyone tried to move it, you would soon know because the receipts or certificates they hold are inferior and thus subordinate to Bitcoin. Ta dah! No debt.

Except, of course, that describes our current system as well. 

The Fed’s money/deposits have absolutely nothing to do with how much debt there is in the system.

That’s because the Cbank system is what you call a “closed system” more akin to equity than debt. In that sense it operates just like Bitcoin. 

The confusion for the bitcoiners I think comes about because they mistake being fully funded with being debt free. But the two are totally different concepts.

Let me explain the difference.

Imagine I am a Fed member bank with full and rightful title over x percent of the fed’s deposit stock. I own these reserves unconditionally. They are mine. No one else’s.

Yet they also amount to a claim on the Fed. That means they must de facto be a Fed liability as well. 

The only way this varies from the Bitcoin set-up is that the claims I own unconditionally are on the Bitcoin network instead of the Federal reserve system. They are the Bitcoin network’s liability (i.e. They represent the equity of that community). 

With gold, you could argue, the asset is nature’s liability — because every bar of gold supposedly entitles the holder to some form of consumption that relies on the resources of Mother Nature. 

Okay. Here’s where the confusion comes about I think.

If I, the unconditional owner of a Fed liability, choose VOLUNTARILY to lend this unconditional asset of mine to someone else (rather than transfer it to them on an unconditional basis because I feel they’ve earnt that asset by providing me with something else I value) I enter into a debt contract with the transferree.

The transfer still occurs in plain vision of everyone whether the asset is a fed deposit or a Bitcoin. As far as they are concerned the transfer has occurred. The only thing they don’t know is on what conditions the transfer has happened. 

But say I’ve lent that asset on the condition I get it back one day. In that case  — despite the fact I was entirely fully funded — I become exposed to counterparty risk and default. There is now undeniably debt in the system.

Get it???!

You see, the fact that the agreement I struck exists on some other ledger or paper is neither here nor there. As far as the Bitcoin network is concerned there has been no increase in network liabilities. Yet a debt DOES exist. And It exists on a supplemental piece of paper that adds “duration” to the scheme. A paper that can now be “discounted” for instant liquidity. 

And here’s a truly mind blowing fact! Not only is debt totally possible in the Bitcoin system, it is possible in a way that can create state debt just as easily as it can private debt. 

For example, if the Winklevii decided to lend all their Bitcoin to a state like Colombia, what would they get in return if not a Bitcoin denominated obligation which would trade like a bond?

What’s more, if the state couldn’t pay that Bitcoin back on time as agreed  — maybe because the price of Bitcoin had shot to the moon and it couldn’t afford to buy it back — wouldnt’t you get the same sort of debt crisis as the one on Greece? Of course you would. What’s more, it would be up to the Winklevii as creditors and bond holders to determine the debt penalties or writedowns in arduous debt discussions with Colombia.

Bitcoin does not stop debt.

Neither does a full reserve system.

All it does is ensures that the debt is fully funded.

Does fully funded debt or a full reserve system stop rehypothecation and/or the equivalent of naked shorting in money (lending something you don’t yet have) – yes, it does.

You can’t officially lend something you don’t have in a full reserve system.

Is a full reserve system actually enforceable? History tells us probably not.

That’s because there are two ways to get around it. 

First, you increase the velocity of the cycle. Colombia borrows from the Winklevii then pays for goods from a company that does business with the Winklevii and the Winklevii relend that income once again to Colombia to extend its debt even more. But with colombia’s debt growing more and more, and no spare float in the system to help it match that liability on an affordable level, the liability just gets so big that eventually the system itself breaksdown. Colombia defaults. The Winklevii in their greed lose everything, and mainly because they  chose to choke the debtor to death before he could repay.  (These are the conditions that brought about the end of the gold standard btw).

Second,  you create a side chain/off block chain business. In the real world that’s called a shadow bank which operates outside of the world of Fed full reserve regulations and cares not if it is fully funded or not, or how many times the same piece of collateral is lent out. All it needs to start its business is someone’s trust. I transfer my deposits conditionally to that shadow bank (because, you know, it’s offering a much more tempting interest rate than the full reserve banks) but it has no qualms about lending something which isn’t really theirs to someone else. It can get away with this because of the temporal lag between when I want my deposits back and when it thinks it will get them back from its borrower. It has, you could say, a short-term funding exposure.

Ah ha! (You think to yourself.) The Bitcoin system would never allow this. NOT TRUE. It would.

Remember, I am transferring my asset into the custody of a third party agent that treats it like a deposit. In Bitcoin I may do this for a plethora of reasons (I can’t operate my own wallet, don’t have technical know how, want the interest being offered). 

If I’m only looking at my Bitcoin deposits as stated on the third party site not on the blockchain, my claim is on the third party not the Bitcoin community. In the meantime, they can do whatever they want with my Bitcoin. They can even keep processing transactions on a Centralised basis between respective clients matching flows in their own closed system.

But, I’d argue, that’s not actually the main way the Bitcoin system currently gets leveraged. The main way is through the FX platform operators due to their poor market making skills. 

How does this work? 

Well, say I open an account at an exchange and plan to source Bitcoin from the system. The process usually involves depositing dollars and waiting for a favourable price from a respective counterparty in the system who happens to have bitcoin deposits.

This is a coincidence of wants scenario. When it occurs it’s like magic. My dollars are swapped directly for bitcoins and all is well in leverage land. No new capital enters or exits the system. We are square.

If only things could always work as perfectly as that though! Usually they don’t. 

The coincidence of wants is a rare, rare thing, especially in an illiquid and tiny market like Bitcoin. Chances are at any given point more people want dollars than Bitcoin. Or vice versa. Or alternatively there’s simply no trade going on at all.

To facilitate exchange therefore the custodian of all the respective deposits (in Bitcoin, that’s usually the exchange itself) is usually tempted to intermediate in some shape or fashion. The main temptation is to become a market maker for the purpose of inducing liquidity and stabilizing the volatility of prices.

But market making is a risky business. It requires good knowledge of risk management, skill at pricing markets and sophisticated hedging. That’s why, by the way, it’s usually pretty difficult to get a market maker involved in a market where deep and liquid hedging options are not available. No such luck in Bitcoin.

Since flows are rarely equal the temptation for inexperienced exchanges that “believe ” in the underlying asset is to take undue temporal risk when acquiring bitcoins.

For example, say the flow is biased to dollar outflows (more people want to sell Bitcoin than buy it), as an MM you might be inclined, as a less than objective party, to offer to buy Bitcoin at a higher price than it can really be passed over to the market. You do, after all, have all that cheap dollar funding from client accounts at your disposal. What’s more, you think, if I buy now at $200, when it goes to $300 on real demand I can sell out making a handsome profit and be able to return the money to clients and pocketing the difference for yourself. If you can control the redemption timeframe as well you think “wow” I can manage my funding liabilities easily.

But say the position goes the other way and your clients start wanting their dollars back. Suddenly you’re left with a major dollar shortage exposure and a debt to clients you can’t make good on.

What’s the temptation then?

I’d argue probably to borrow even more client funds and start offering to buy Bitcoin at rates that you hope induce a bull run so that you can dump your coins into it. That, or a dollar capital raising.

Except it all gets vey circular very quickly. Without major new capital injections into the system (as a whole) all you’ve got are the same dollars chasing the same bitcoin, leaving you short no matter how much you attempt to manipulate the price. 

Eventually you turn into Colombia.

No debt eh?!

*The reason we don’t operate a full reserve system btw is because central bankers have learnt over the ages that allowing licensed banks to lend some portion of their liquid assets in a supervised structure is preferable to having shadow banks you can’t control or understand do it it outside of your catchment area. There’s also the fact that most depositors want to put their money to work and don’t mind lending via an intermediary that can manage the various funding duration exposures. That’s how capital gets put to work in productive ways. With a full reserve system every bank would be a p2p lender rather than a duration intermediator. There’s nothing wrong with that and some people think it may add to stability but sometimes for an economy to grow there needs to be some slack in the system. The idea with fractional reserve is simply that all you really need in the reserve system is the liquid float needed to satisfy emergency unexpected redemptions, everything else is a wasted opportunity, especially since every loan extended with depositors’ money still creates a new (performing) asset that can be discounted and liquefied on demand. 

The Cbank knows if the banks mismanage the duration risk they will be forced to come cap in hand for more liquidity, which the cbank will charge them for at a punitive rate. If the bank is clearly insolvent and can’t manage that cost the cbank will let it fail as a lesson to the industry. 

The only measures that matter for the cbank when it considers adding Fed liabilities into the system are inflation and employment rates, because these indicates whether there is too much liquidity for the system to handle or alternatively not enough. The objective is incentivizing growth in the real economy and the fear is a full reserve system could stifle it.

In Bitcoin, however, the borrowed “shadow” money is often just consumed/burned/squandered for personal profit or experience.

To conclude:

Fully funded debt = you don’t lend what you don’t own.

Fractional reserve = you lend other people’s money that they have lent you on a short-term basis.

Private banks’ money creation = you lend your own equity because it’s liquid enough to be treated as money, and worry about funding it later.

In which Andy Haldane envisions the coming of Kubrick’s star child


From a speech last week by the BoE’s chief economist Andy Haldane.

Economist Brian Arthur has a beautiful metaphor for describing this transition – the transition from a physical (or “first”) economy to a digital (or “second”) economy.47 He likens earlier industrial revolutions to the body developing its physiological or muscular system. By analogy, the economic system was defining and refining its motor skills, largely through investment in physical capital.
The digital revolution is different. It is akin to the economic body developing its neurological or sensory system, defining and refining its cognitive skills through investment in intellectual capital. The success of the recent wave of transformative technologies is built on them creating a neural – brain-like – network of connections. The “internet of things” uses multiple sensors (like the brain’s neurons) connected through the web (like the brain’s synapses) to create, in effect, a machine-brain.
It is that brain-like wiring which has given rise to thinking, as well as doing, machines – the move from Artificial Intelligence (AI) to Artificial General Intelligence (AGI). In the words of Brynjolfsson and McAfee, we are entering a second machine age.48 Moreover, Moore’s Law means that the processing power of the machine brain is ever-rising. That leads to the intriguing possibility that, at some point in the future, the processing power of the machine brain could exceed the human brain.

Humans evolved from mammals, and mammals evolved from aquatic life (yes, yes there were reptiles somewhere in between as well — I’m not a biologist), but this evolutionary process was only possible once a habitat that could support living systems was established. The establishment of that habitat involved a significant atmospheric change which itself was only made possible by the rise of complex oxygen-producing cellular structures: plants, which themselves only evolved once the process of photosynthesis was established. Somewhere algae played an important role as well.

To sum up: each evolutionary leap involved an incremental rise in complexity, cellular organisation and information sharing. Arguably, also, each leap brought with it a new level of consciousness, which built on the consciousness achieved by the previous less complex organism that had come before it.

Furthermore, this new consciousness often depended on successfully mastering and/or exploiting the lower forms of consciousness (in the great darwinian food chain sense).

So the question now is where is evolution taking us next? A new higher level of human? (A view that appeases our centrist human perspective on all things.) Or, alternatively, a new class of being entirely? One in which humans play only the role of a cellular cog — to be exploited by the higher consciousness formed by the process?

See here for some of my previous thoughts on the matter.

In any case, as Haldane notes, this opens the door to the sort of evolutionary leap that technologists call the “singularity”:

Were the singularity to be reached, the sky becomes the limit innovation-wise. Machine, rather than man, then becomes the mother of all invention. With exponential rises in processing power, the economy could become “super-intelligent”. And with close to zero marginal costs to expanding processing capacity, it may also become “super-efficient”.
This would indeed be a fourth industrial revolution. But unlike its predecessors, and almost by definition, it would be near-impossible for the human brain to imagine where the machine brain would take innovation, and hence growth, next. The world would be one of blissful ignorance. The excitement of the optimists would be fully warranted.

But as Haldane also notes, even if humanity cannot perceive the higher consciousness that’s forming beyond its sensory range, we will still have to exist in a social system that supports and feeds that higher consciousness. How we order that system, therefore, could determine whether our new subservient state in this new consciousness order is tolerable or intolerable.

So far, notes Haldane, it’s not looking good for the common man because technology is doing little to help keep the human system balanced.

In fact, he notes, we may be re-wiring our brains in a such a short-termist way that the quality of our consciousness is already regressing.

From Haldane:

A third secular, sociological headwind concerns short-termism. That sits oddly with historical trends, which points towards secular rises in societal levels of patience, in part driven by technological trends. But those trends may themselves be on the turn. Just as the printing press may have caused a neurological re-wiring after the 15th century, so too may the Internet in the 21st. But this time technology’s impact may be less benign.

We are clearly in the midst of an information revolution, with close to 99% of the entire stock of information ever created having been generated this century.64 This has had real benefits. But it may also have had cognitive costs. One of those potential costs is shorter attention spans. As information theorist Herbert Simon said, an information-rich society may be attention-poor. The information revolution could lead to patience wearing thin.

This echoes my own opinion that Silicon Valley technologists are nurturing dangerous instant gratification expectations in all of us, and working hard to convince us that such instant gratification comes at no cost to the whole. In their view “we can have it all” despite the fact that human experience depends on quality interactions which by their nature are impossible to mass produce if they are to be valued. I think it’s clear that in a closed system one person’s instant gratification must come at the cost of another person’s non gratification or worse than that, their free will. Nevertheless, the mantra from SV is that the digital commons has created a magic positive sum world where no one needs to be patient, because temporal delays are no longer an issue for anyone. Or at least for the 1 per cent they care about.

It’s as if the entire float of human consciousness — our suspended patient state in which we work to overcome inefficiencies — becomes unnecessary. Which is weird because the thing we value most, money, in many ways represents nothing more than a suspended float and sum of our inter-temporal inefficiency and human variance.

Which is why, Haldane notes, these technologists possibly under appreciate the paradox that comes into play as soon as we begin to think we can have it all and no longer pause for thought or appreciation of the journey:

Using Daniel Kahneman’s classification, it may cause the fast-thinking, reflexive, impatient part of the brain to expand its influence. If so, that would tend to raise societal levels of impatience and slow the accumulation of all types of capital. This could harm medium-term growth. Fast thought could make for slow growth.

Psychological studies have shown that impatience in children can significantly impair educational attainment and thus future income prospects. Impatience has also been found to reduce creativity among individuals, thereby putting a brake on intellectual capital accumulation. Innovation and research are potential casualties from short-termism.

There is evidence suggesting just that. Investment by public companies is often found to be deferred or ignored to meet the short-term needs of shareholders. Research and development spending by UK companies has been falling for a decade. They are towards the bottom of the international research and development league table (Chart 16). If short- termism is on the rise, this puts at risk skills-building, innovation and future growth.”

I’ve just been reading Zen and the Art of Motorcycle Maintenance by Robert Pirsig and the above really resonates with the message of that book. In some ways our human condition is underpinned by the concept of quality. If we don’t take our time over things, if we don’t strive to do things properly or better, if we don’t bother learning technique or craft, if we don’t learn to enjoy the journey of life itself, we give up on life and what it means to be human. In short, we regress to a lower form of consciousness.

Though Haldane puts it in a more Hari Seldon-esque way:

Growth is a gift. Yet contrary to popular perceptions, it has not always kept on giving. Despite centuries of experience, the raw ingredients of growth remain something of a mystery. As best we can tell historically, they have been a complex mix of the sociological and the technological, typically acting in harmony. All three of the industrial revolutions since 1750 bear these hallmarks.

Today, the growth picture is foggier. We have fear about secular stagnation at the same time as cheer about secular innovation. The technological tailwinds to growth are strong, but so too are the sociological headwinds. Buffeted by these cross-winds, future growth risks becoming suspended between the mundane and the miraculous.

To me that means: if we are to progress sustainably — or at the very least achieve a healthy steady-state — we must not give up on the pursuit of quality and/or purpose.

That means we have to very purposefully focus on bringing latency back into our lives.

I’m going to start by rationing posts to no more than four a month in a bid to protect all our attention spans.

Jedi guild councils – how the platforms of tomorrow should look

The bulk of today’s “sharing economy” is anything but. Instead what we have is a fast proliferating fad for platforms that claim to be built on the principles of a collaborative structure but are in fact thinly disguised monopolies designed to draw rents from the hard work and sweat of crafts/trades people. It’s pure exploitation that will inevitably lead to a subsistence existence for most workers.

Something needs to be done.

I propose a viable and honest alternative model which can be executed by any craft or trade. Understandably, since it’s a non-profit structure, it’s a much harder concept to bring to market because those who believe in it (like me) don’t have access to capital or development resources. But I do think that once the initial hurdle is overcome, it’s a long-term sustainable model for all sorts of varying professions.

Nevertheless, the non-profit structure doesn’t appeal to VCs, funders, banks or any other type of investor. But that doesn’t mean there aren’t viable investments to be made that can — and this is a fair offer in a negative interest world — protect capital from erosion.

Attached is one idea I came up with*. The key point is that all these organisations could be managed and operated in a guild-like structure, it’s just a question of organising the practitioners of the craft effectively. Think of my proposal as an example of how it could be done.

A key point to bear in mind is that whilst this sort of platform encourages healthy competition, it remains purposefully protectionist to ensure that those who wish to draw a livelihood from perfecting real skills, trades or crafts with a focus on quality and sustainability (not just making clickbait), can do so without relegating themselves to a serf existence. The structure, if done right, could empower all sorts of middle-class professionals. It’s best to think of it as a digital professional union than a company per se.

* I am not an entrepreneur (or a particularly good chef) and this is not intended to be a sales pitch. At the moment this plan is going nowhere because I don’t have any resources to make it happen. And whilst I tinkered with it for a while I think it poses too much of a conflict of interest to be a business developer and a journalist. So it’s on ice. Nevertheless I’m interested in feedback.