Algorithms, Big Data, and the perfect sneaker

[insert rant] We have a perfect flow of information in a perfect market to make just the precise transactions whenever, wherever, however, whoever? Yes, ladies and gentlemen, we have the perfect sneaker (insert your own favorite product). I’m sorry but I’ve gotten really sensitive to better shopping as the answer to the meaning of life [end rant]

So the trigger for this little rant is a quite nice book on Reinventing Capitalism in the Age of Big Data. I have it as a Horizon 2 transition concept focused on new sources of value (data), but it certainly touches on collaborative platforms a well. Let’s get the cards right on the table: “This approach is based on the belief that competitive markets are the key foundation of a healthy and prosperous society…. We are convinced that the market is here to stay.” Okie dokie!

In the Houston Foresight program, we teach “markets” as one of ten theories of social change. It’s certainly a legitimate lens through which to view the future. Where it perhaps runs into difficulty, at least with me, is when it teams up with the dominant modern worldview – as it almost always does. Markets and competitions, winners and losers, “he/she who dies with the most toys wins,” and the like.

In fairness to the authors, they do indeed suggest that “market-driven coordination greased by rich data will allow us to meet vexing challenges and work toward sustainable solutions, from enhancing education to improving health care and addressing climate change.” Good for them. I must warn you though, that is more of a throw-in than a focus. But there are some really good insights in the book. A few that I particularly liked:

1. A key argument is that rich data will replace the blunt and clunky price mechanism as the guide to transactions….
2. ….and this will wreak a bit of havoc on the banks and finance folks…
3. …. which kinda sounds like a pathway to After Capitalism (they don’t say that)

They note the potential for the winner-take-all phenomenon and suggest a few remedies [insert sarcasm] that almost surely will be ignored – not because they are not solid, but we must not mess with markets, even if it eventually means one person will own all the world’s wealth [end sarcasm].

They also raise the happy point that “we will be able to direct a machine learning system to do the boring stuff and reserve those decisions that give us the most joy and pleasure for ourselves.” I’ve used lines like this, too, but I could just as easily see the flip, where the machines do the important decisions and I pick out the perfect sneaker.  – Andy Hines