Tim Morgan inspects the concept of Smart Capital in his tenth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.
We are starting to embed automated decision-making into capital itself. We routinely embed automatic control systems into our processing plants and factories ensuring that optimal use is made of those capital investments. Advertising and sales are increasingly given over to algorithmic management. No industry seems to be untouched by automation. We are infusing our intelligence into our capital systems. So how smart can our capital get?
Once upon a time a computer was a job description, not a machine. Human computers did the hard work of accurately calculating everything from astronomical phenomena to tracking weather patterns. That changed with the advent of stored instruction computing machines. Programmed algorithms could be systematically created from a combination of well-defined repeatable steps incorporating not only mathematical operations but conditional (if/then/else) decision-making logic as well.
We have been developing this computational capability for decades. We still are limited by the need to design and transcribe programs most of the time. The logic is still simplistic and rigid compared to human reasoning. But that design limit is quickly giving way to complex machine learning algorithms. Artificial Intelligence has been a field of study since the beginning of the digital computing era. Now the early promises of decades past are rapidly being realized.
A.I. researchers are harnessing our exponentially increasing torrent of data to train machine learning algorithms. This has resulted in A.I. techniques like Generative Adversarial Networks (GAN) which use competing Generator and Discriminator neural networks to solve problems based on older human-curated examples. GANs quickly learn tasks like creating human-like art, designing 3D objects, and accurately identifying tumors in X-rays.
Other advanced A.I. techniques are moving beyond the need for human training or big data sets. Google’s AlphaGo A.I. beat world Go champion Lee Sedol by 100 games to 0 in 2016. AlphaGo’s neural network heuristics were initially trained using a database of 30 million moves from 160,000 masters-level games. Yet in 2017 with no access to that database and just three days of self-play AlphaGo Zero beat AlphaGo by the same 100 games to 0 that AlphaGo beat Sedol. Go masters worldwide have begun eagerly studying AlphaGo Zero’s unusual moves to inject new strategies into their sport.
Computing advances will not stop with digital computers and machine learning. Researchers around the world are rapidly developing Quantum Computers to take computing capabilities to a whole new level. A leaked paper recently revealed that Google has demonstrated the theorized principle of “Quantum Supremacy”, or the ability of quantum computers to quickly solve problems that conventional computers cannot. Their quantum computer solved a problem in about 3 minutes that the world’s most powerful supercomputer could not perform in 10,000 years.
The cognification of capital via computing will not stop. It will accelerate. Capital will incorporate computer’s gains in self-training and abilities to solve ever harder problems. Capital will acquire more and more ability to self-manage with less and less need for human decision making. The ultimate endpoint may be that it no longer needs our direction. If that happens, capital will go from being owned to autonomous. If it does, we will need to pay close attention to what it wants.
Ruth Lewis a member of our Emerging Fellows program evaluates ownership as a human right in her ninth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.
Every minute of every day data about us is created, collected and stored somewhere. As more and more of the goods and services that we use every day become digitised, it is inevitable that the service providers and their downstream supply chains will want information about their customers (or potential customers), so that they can ‘service you better’, or create a supply-driven market-place. Our liberty to live the lives that we choose is scrutinised and forecast to drive demand, and thus supply. Who owns this data that is created and collected about you? Is it the service provider? Or should it be the ‘data subject’, the person about whom the data is collected?
There are rules and interpretive algorithms set up around the data, but have you stopped to consider what if these systems could be wrong, that the data is flawed? That the data does not really describe what you want or believe in, or what you want to do? And after you die, your digital representation may live on well after your death, like a digital Henrietta Lacks.
Our data selves live a shadow life that resides within the world’s data warehouses, often located far away from where we live. Economic decisions were made to locate our data there, and often our data selves are traded between various companies for a fee, so that they can get to know us too – or their representation of us. However, that is where human values and the freedom of the individual, and economic value sharply collide. Because ‘human values’ and ‘liberty’ are only considered where legislated imperatives such as the European Union’s General Data Protection Regulation are in operation, which forces the user of the services to explicitly consent to their data collection and storage, and the service provider to have some accountability for collection of private information.
How can human value and human values be used to protect our shadow selves that exist in the internet’s servers and data warehouses of the world? Only by thinking about data as part of ourselves, and valuing it with the same care. We, as consumers of digitised services, should and must demand that our shadow selves be given the same digital rights as our human selves. We must be able to trust that the representation of ourselves is shown in truth, and is not abused or compromised.
This assurance should be the noble principle on which to base our aspirations for a better future.
In the future, could each of us fully embrace the online world, and create and own a digital avatar existing in cyberspace? A representation of our own personal human values, beliefs and thoughts that we are willing to share with others, and more importantly, owned and controlled by us? Could our digital agent be entitled to the human rights law under codified International Law? Could we use this personal image to ‘play’ with futuristic representations so that we can build a better world together? To try out different economic, governance, legal, technology and social structures through a range of scenario building, in much the same way as online gamers try out different virtual worlds? Perhaps this could create participative governance, citizen engagement and dialogue, as well as resultant political structures to promote the common good for society.
How would we then protect our own personal avatar from the creeping tendency for governments and corporations to undermine human rights to privacy under the guise of cyber security, ‘for the purpose of securing morality, public order and general welfare’?
Tim Morgan inspects the ownership of resources by themselves in his ninth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.
In April 2016 the world’s first decentralized autonomous organization was launched. This crowdfunded organization, aptly named “The DAO”, was a collection of interlocking digital smart-contracts designed to use the Ethereum blockchain to fund investor proposed projects. The only human interactions allowed were voting on new projects by shareholders. All other management activities were conducted according to its founding smart-contract rules. This organization worth US$150 million existed as a purely digitally managed company with no legal charter, no physical address, no board of directors, no CEO, and no human management. It was the world’s first stateless autonomous company. Though The DAO was shut down later that year after hackers compromised it, new frameworks like the Aragon project and DaoStack are actively being developed.
Decentralized autonomous organizations (Daos) represent a new stage in capitalism, one that embraces the idea of giving ownership control to non-human algorithmic entities. This is a continuation of a centuries old trend of owners progressively giving up more and more control of capital to managers, corporations, investment funds, and the like. This takes that progression one step further. A Dao controls itself and all the value associated with it. It can have investors. It can pay people for work performed. It could even own physical property if a government chose to charter a Dao as a corporation. We are one legal step from autonomous organizations getting personhood-like rights of a human-chartered corporation. Is it plausible we could take the next step? Can non-human entities have human-like legal rights?
The International Center for the Rights of Nature maintains a timeline showing the accelerating adoption of legal rights for nature. Ecuador wrote Rights of Nature into their constitution in 2008. Mexico City put language into its city constitution in 2017 that would “recognize and regulate the broader protection of the rights of nature formed by all its ecosystems and species as a collective entity subject to rights”. There are many other examples. However, one right seems to always be neglected: the right for nature to engage in commerce. That leaves even legally protected natural resources at the mercy of market pressure on governments and the court of public opinion.
What happens though if we put Daos and rights-holding natural resources together? What we get are autonomous resources that can become full active participants in markets and the legal system. These “deodands”, as futurist Karl Schroeder has named them, could protect themselves from exploitation by entering into commercial contracts for sustainable extraction of their resources, hiring security, funding scientists to monitor their health, and maintaining lawyers to sue contractual or rights violators. They could even hire programmers and engineers to improve their own decision-making algorithms and sensing technologies as the state-of-the-art progresses.
Can resources own themselves? They can if we let them. If we blend a bit of technology with a dash of nature and a smidgen of legal rights, then a whole new level of ecologically sustainable development will be unlocked. Best of all is that markets will be working for sustainability. Their new owners will demand it.
Tim Morgan published his seventh blog post in our Emerging Fellows program by inspecting the ownership of automated societies. The views expressed are those of the author and not necessarily those of the APF or its other members.
Ownership is not a single concept. We see the accumulated layers of different ownership modes in many societies across history. The possessive “MINE!” of a child is our earliest form of ownership. In turn, acceptance by those nearby transforms a claim to a personal possession into socially recognized ownership. Land and tax records written on clay, skins, paper, and even the ancient Inca’s “talking knots” created a recorded form of ownership. Later, printing made that form more complex and flexible, enabling ownership modes such as stock corporations and fiat money. Telegraphs and telephones made negotiation or sale of recorded assets even more dynamic, complex, and widespread. New forms of ownership always co-emerge with new communication modes, building on top of earlier modes.
We are now in the era of accelerating digital communications and automation. Ubiquitous information technologies have strained to breaking intellectual property concepts like copyright, trademark, and patents. Courts, legislatures, and media struggle every day with automation’s effects on ownership. What new ownership mode is emerging along with networked automation?
Online gamers sometimes use an early Internet slang term which rhymes with “owned” when they decisively win: pwned. Unskilled “script kiddy” hackers boast of “pwning” a website or computer using off the shelf hacker tools. To be pwned is to be dominated by someone online. This “leetspeak” term has softened over time to mean clear, decisive winning over a situation or person. Powerful online businesses operate with a similar dominance-as-owning-dynamic. Google overwhelmingly owns online search in the West with Baidu owning China’s search market. Amazon and Alibaba own online product sales worldwide. Facebook and WeChat respectively own social media. Pwning a market goes beyond mere monopoly. Businesses that successfully use automation to establish market dominance become a de facto infrastructure for other’s services and products. Automation platforms are creating a new layer of economic and social infrastructure.
Platforms create increasing automation dependence as capabilities increase. Doctors adopting new AR/VR surgical tools quickly find that they are owned by the supplier when they lose critical capabilities after an unexpected software update. A small company’s sales can disappear overnight if their search rankings drop to the second page on Google or Amazon for no apparent reason.
Platform-based businesses feel like they are pwning everyone. They are wrong. Networked elements within a long-marginalized Civic sector are beginning to connect to a growing Social Commons sector. Global green initiatives are reshaping popular sentiment, policy and infrastructure. Activists are using corporate-created social media to force social conscience back into corporate governance. Each sector is increasingly leveraging automation created by the Private sector to influence the social values of society. This in turn influences the services offered on Private sector platforms. The local Civic sector and the global Social Commons sector are beginning to team up via automation. They are slowly shifting the balance of values flowing through automation and into society.
Who owns an automated society? It is those who best exploit the potentials of automation and consciously shape them to change society. The Private sector currently controls the automations which are driving social change, but not for long. One thing the Internet era has taught us is that those who pwn everyone today are certain to be pwned tomorrow.
Tim Morgan publishes his third blog post in our Emerging Fellows program by asking about the ownership of capital. The views expressed are those of the author and not necessarily those of the APF or its other members.
If you can’t open it, you don’t own it. That is the unofficial motto of the world-wide Maker Movement, which emerged along with the early development of the World Wide Web. It celebrates the fusion of art, technology, and do-it-yourself inventiveness. It inherited much of its emphasis on openness from the earlier Free and Open Source software (FOSS) movements.
FOSS formed in response to proprietary software which could not be changed by anyone but the copyright owners. FOSS advocates professed that collaboration via sharing source code was the best way to develop software. Makers embraced FOSS sharing sensibilities in no small part because automation was key to many of their projects. It was easier to bootstrap a new creation by copying and modifying existing code or hardware.
This free-as-in-speech information sharing ethos shaped the way the early Internet developed. Shared code forms the foundation of many commercial operating systems. Android alone powers over 2.7 billion smartphones and devices worldwide. The Internet and Web as we know them would not have expanded as quickly without shared-source software. This desire to share information is a design consequence of digital networks. Information can be copied with perfect fidelity as many times as desired. Perfectly copying information from computer to computer is fundamental to the design of the Internet. If the medium is the message, then the message of the Internet is to Share.
The drive to share is fundamental to human nature. Digital technologies unexpectedly created a new type of social structure that champions sharing - an Abundant Information Commons. Value is added by modifying for your needs; be it code, a design, a formula, or a written work. Those changes are then released back into the commons for anyone to use and improve.
Digital technologies are not completely free from restraints though. Individual possessiveness is in human nature too. Information may want to be free, but markets do not. Algorithms and hardware can put controls on data. Laws can penalize unauthorized use. The old ownership modes still exist, but now they are in tension with a network that wants to copy information. After several decades, we have reached an uneasy balance between owned information capital and shared information commons. Wikipedia did not replace Encyclopedia Britannica, but it did force it to adapt.
This balance is still shifting though. The more digital technology is embedded into everything, the more networks find new connections into physical, legal, and market domains. Cracks in the foundational layers supporting ownership are being slowly forced open by the roots and tendrils of ever-expanding networks. What was once purely physical is being bonded with the virtual.
Nothing owned is safe from this increasing integration with the digital realm. Networks want capital to be data-like and are actively working to make that happen by embedding code and connections in every owned thing.
The traditional capital triad of Ownership, Control, and Use is thus giving way to the networkable capital triad of Copying, Modification, and Sharing. The dynamic of how the virtual and real will fuse together will determine how future value is created.
The future of ownership is that if you want to own capital, you will need to find a way to open at least part of it and share.