Monthly Archives: January 2013

Max Levchin has plans for you

bracknell

Lady Bracknell: Do you smoke?
Jack Worthing: Well yes, I must admit I smoke.
Lady Bracknell: I’m glad to hear it. A man should have an occupation of some kind.

Transport Lady Bracknell to the present, implant a geek’s brain in her bean, give her a zillion bucks and a Macbook Air, and she’ll begin dreaming the dream of Max Levchin:

I sometimes imagine the low-use troughs of sinusoidal curves utilization of all these analog resources being pulled up, filling up with happy digital usage.

Yes, it lacks that Wildean snap — though “happy digital usage” provides a witty little twist at the end — but it’s memorable nonetheless. The sentence comes from Levchin’s keynote speech last week at the DLD conference in Munich, Germany. He describes his talk as “crucially important,” and I have to crucially agree. It’s required reading. Though not in the billionaires’ club, Levchin is one of the Silicon Valley elite—computer scientist, cofounder of PayPal, buddy of Peter Thiel, Yahoo director, restless entrepreneur, big thinker, venture capitalist, angel—and his speech provides the clearest view yet of the grand ambitions of our would-be techno-saviors.

Levchin refers to “humans” as “analog resources,” a category we share with “cars, houses, etc.” The tragedy of analog resources is that they’re horribly underutilized. They spend a great deal of their time in idleness. Look out into the analog world, and you see a wasteland of inefficiency. But computers can fix that. If we can place sensors and other data-monitoring devices on all analog resources, including ourselves, then we can begin to track them, analyze them, and “rationalize their use.” For Levchin, “the next big wave of opportunities exists in centralized processing of data gathered from primarily analog systems.” We already see the beginnings of this trend, he says, in the rise of “collaborative consumption,” in which the spare capacity of analog resources like cars and houses is matched, via digital exchanges, with underserved demand. “A key revolutionary insight here is … the digitalization of analog data, and its management in a centralized queue to create amazing new efficiencies.”

But what we’ve seen so far is only the tip of the iceberg. What’s really exciting is the possibility for rationalizing the use of the most underutilized analog resources of all: people. Declares Levchin: “We will definitely see dynamically-priced queues for confession-taking priests, and therapists!” And then we can move on to maximizing the utilization of the human mind itself:

How about dynamic pricing for brain cycles? We have been maximizing utilization of very high-value, very low-frequency specialists — today you can already rent the brain of a data-mining genius via Kaggle by the hour, tomorrow by brain-hour. Just like the SETI@Home screensaver “steals” CPU cycles to sift through cosmic radio noise for alien voices, your brain plug firmware will earn you a little extra cash while you sleep, by being remotely programmed to solve hard problems, like factoring products of large primes.

Yes, he’s serious. This is Clay Shirky’s “cognitive surplus” idea taken to its logical, fascistic extreme.

As soon as the general public is ready for it, many things handled by a human at the edge of consumption will be controlled by the best currently available human at the center of the system, real time sensors bringing the necessary data to them in real time. … This is going to add a huge amount of new kinds of risks. But as a species, we simply must take these risks, to continue advancing, to use all available resources to their maximum.

If this is a bit too abstract for you, Levchin brings it down to an everyday level, describing the kind of practical business services he and his colleagues are actually developing:

On a Saturday morning, I load my two toddlers into their respective child seats, and my car’s in-wheel strain gauges detect the weight difference and reports that the kids are with me in a moving vehicle to my insurance via a secure message through my iPhone. The insurance company duly increases today’s premium by a few dollars.

No need to think of analog resources in the aggregate anymore; networked sensors allow us to monitor and rationalize the utilization of each individual resource, each person in isolation. But you can go even deeper. You can begin to rationalize each individual’s internal resources. Imagine, as Levchin does, that everyone is hooked up to physical sensors that minutely monitor their health and behavior and send the data to a centralized processing system. An insurance company “looking at someone’s heart rate monitor data could make their cardiovascular healthcare cost-free.” Of course, if you engage in risky behavior (do you really want that third slice of pizza, or that third beer?) or have some suboptimal health reading (did your heart just skip a beat?), an alert from your insurer, or maybe your employer, or maybe the government, would immediately come through your smartphone notifying you that your health care premium has just been increased. Or maybe your policy has been cancelled. Or maybe you’ve been scheduled for a brief reeducation session down at the local office of the Bureau for Internal Resource Optimization.

This is the nightmare world of Big Data, where the moment-by-moment behavior of human beings — analog resources — is tracked by sensors and engineered by central authorities to create optimal statistical outcomes. We might dismiss it as a warped science fiction fantasy if it weren’t also the utopian dream of the Max Levchins of the world. They have lots of money and they smell even more:  “I believe that in the next decades we will see huge number of inherently analog processes captured digitally. Opportunities to build businesses that process this data and improve lives will abound.” It’s the ultimate win-win: you get filthy rich by purifying the tribe.

I could use a smoke.

Peep show

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There’s a moment, tragically brief, after a new recording or broadcasting tool is introduced when it’s used unselfconsciously, with an endearingly human innocence and enthusiasm. That moment, for Twitter’s video-shooting app Vine, is now. Vine brings the Twitter ethos to the motion picture, imposing a six-second limit on recordings. A site called Vinepeek is randomly streaming new vines, and there’s something at once enervating and exhilarating about watching the clips zip by. It’s mostly the banal stuff you’d expect—kids, pets, meals, tourist shots—but there are also some charmingly clumsy time-lapse and stop-motion experiments, stories trying to be born. And the best thing is: the pervs and promoters haven’t moved in yet. (UPDATE: You may now disregard that last sentence. Vine has been deflowered.)

This will get old fast, but right now it’s new, and alive.

Image from the vine “There might be zombies here” by micro-auteur Chloe Alexandra.

The lever revolution

Here’s a small but telling detail from a news photo I came across this weekend (you can see the full image here):

Egypt opposition protest on revolt second anniversary

The picture was taken, by Andre Pain, at one of the anti-government protests in Egypt on Friday, the second anniversary of the start of the country’s as yet unfinished revolution. Much has been made of the critical role that new technologies, like the cell phone and the social network, played in that revolution and other recent popular uprisings. Here we see that the very oldest of human technologies — the lever — can still be enormously useful, too. It helps put things in perspective. There are times for messaging. And then there are times when you need to move a big heavy object. Tools are important, but what really matters, now as ever, is the will of the people wielding them.

The futuristic past

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I’ve been wondering about something: Why is it that images from the past — the actual past — often feel more futuristic than our current images of an imagined future? The latter, even when they’re created with great seriousness, always have a certain kitschy quality, and the kitschiness becomes more pronounced as time passes. It’s the Tomorrowland effect. George Lucas understood that pretty well, I think; he let Star Wars revel in kitschiness rather than trying to avoid the inevitable decay into kitschiness. Fight fire with fire. Hence the film feels less dated, visually, than a lot of the more “futuristic” films about the future.

But if the future doesn’t look much like the future, the past often does. There are pictures from the past that, while you immediately recognize them as being from the past, nevertheless feel futuristic. It’s as though there’s something in your brain that wants to read them as images from the future. Here, for instance, is a picture of Enrico Fermi sitting in a control room in 1951:

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Tell me you don’t experience a little cognitive dissonance while looking at that. Even the clock — drab, utilitarian, old — feels futuristic. Why?

You might think I’m stacking the deck, using a picture of an old control room. Everyone knows that old control rooms are just plain cooler than new control rooms. But I don’t think it’s just control rooms. Here’s a photo of a Fort Worth gas station celebrating its grand opening in 1964. Everything about it, not least the prices, screams “Fort Worth 1964.” (In 1964, I was five years old and I lived very near Fort Worth; it’s entirely possible I visited that gas station.) And yet there’s also an odd air of the future about it. If you needed to fill up your tank in 2064, wouldn’t this be the place you’d pull into:

gas station

If Lucas went the kitsch route from the start, Jean Luc Godard, in his 1965 movie Alphaville, took the opposite, and I think more interesting, route. He didn’t use futuristic sets at all. He just went out and filmed a science fiction movie in the Paris of the (then) present. He knew, I suspect, that by the time the film was released, the present would already be the past and hence would already have started to take on a futuristic patina — a patina that would actually grow stronger as time passed. And it worked:

alphaville2

Surely, that’s an image from the future.

I draw no conclusions from any of this. I’m just making an observation: the future looks more like the past than the future.

This video makes the same point, kind of. Anyway, I like the song.

“No one has lived in the past and no one will live in the future.” That is the absolute truth.

 Movie stills from Alphaville; Fermi photo from Chuckman; gas station photo from Craig Howell; fan video for song “Yellow Wife No. 5” from the Airport 5 album Life Starts Here.

Technological unemployment lines

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The debate over technological unemployment — do digital machines kill jobs? — continues to heat up. At Slate, Matthew Yglesias hacks together a chart, from Federal Reserve data, that he claims shows that technological unemployment doesn’t really exist. He plots the country’s economic output (red line) against the hours worked by non-management personnel (blue line) for the last ten years:

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They seem to match up pretty well, with the growth in hours worked lagging a bit behind the growth in output — an indication of a healthy increase in productivity. Comments Iglesias, “The big rise and fall and rise again in output is caused by a big rise and fall and rise again in the amount of time people put on the job. Or alternatively, the big rise and fall and rise again in working time is caused by a big rise and fall and rise again in the amount of demand for goods and services.” It’s the economy, stupid. Employers’ recent investments in fancy new technology don’t seem to be altering the old economic laws. There’s no such thing as technological unemployment, at least not when you look at the big picture.

Some commenters suggested that the “covariance” of the two lines isn’t really as tight as Iglesias makes it out to be, that the blue line may be flattening out. Wrote one: “The problem is not that the red line and blue line are growing apart, the problem is that, while the red line has more than recovered since the recession, the blue line is still below recession levels.” Wrote another: “Matt’s right that there is a lot of covariance between the two curves, but that’s hardly surprising, and even people who believe that technology is displacing workers would agree that large-scale macroeconomic trends will strongly affect labor demand — it would be difficult to believe data that didn’t show a strong relation between the two. But visual inspection also shows that the overall linear trend for GDP (i.e. the regression line) has a clearly larger slope than the trend for aggregate hours.”

Now, Andrew McAfee has responded with some charts of his own. Here’s one that looks particularly at the manufacturing sector, comparing output growth (blue line) and job growth (red line) over a longer period:

fredgraph

Not much recent covariance there. Writes McAfee: “That really looks like technological unemployment to me, especially when manufacturing employment is also on the decline in Germany and Japan, in China, and around the world. When this is the case, it means that employment changes are not due to jobs moving around the world in search of cheap human labor; they’re due to machine labor becoming at least as capable as and cheaper than humans.”

And here’s a longer term look at the overall economy, comparing output (red line), jobs (green line), and hours worked (blue line).

fredgraph-1

Certainly, the economic cycle still matters, but it doesn’t seem to be the whole story. McAfee again: “We are still adding jobs and working more hours in non-recession years, but not as quickly as we used to. Since the end of the 2001 recession real GDP has increased by just about 20%. The number of hours worked, however, has increased by only 2.8% over that same time, and the total number of jobs by 1.9%.”

The economy is a complex beast, and none of these charts shows the actual effect of new technology on employment. But the specter of technological unemployment certainly hovers over McAfee’s charts. Dismissing it as a myth seems at best premature.

SPECIAL BONUS CHART: And just to prove I can create a line chart too, here’s one, made with Google’s Ngram Viewer, showing mentions of the phrase “technological unemployment” in books over the past ninety years or so. (Click to enlarge it.) Ngram doesn’t go beyond 2008, but I bet when you make the chart in the future you’ll see the start of a new spike in 2013.

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 Library of Congress photo.

The intricate rented world

yardsale

The new issue of Forbes has a cover story, headlined “Who Wants to Be a Billionaire,” about the new “economic revolution” of “peer-to-peer sharing.” Fueled by a proliferation of personal asset-rental clearinghouses on the web, run by companies like Airbnb, Lyft, and DogVacay, this revolution, says Forbes, is “quietly turning millions of people into part-time entrepreneurs, and disrupting old notions about consumption and ownership.”

As its prime example, the magazine points to a 63-year-old photographer named Frederic Larson. He was laid off from his full-time job at the San Francisco Chronicle in 2009 and since has only been able to find some part-time work, without the benefits he once enjoyed. But now Larson is a micro-entrepreneur in the “gig economy”:

Twelve days per month Larson rents his Marin County home on website Airbnb for $100 a night, of which he nets $97. Four nights a week he transforms his Prius into a de facto taxi via the ride-sharing service Lyft, pocketing another $100 a night in the process. It isn’t glamorous–on nights that he rents out his house, he removes himself to one room that he’s cordoned off, and he showers at the gym–but in leveraging his hard assets into seamless income streams, he’s generating $3,000 a month. “I’ve got a product, which is what I share: my Prius and my house,” says Larson. “Those are my two sources of income.” He’s now looking at websites that can let him rent out some of his camera equipment.

It’s good that Larson has found ways to make ends meet. I’m not entirely sure what makes his new income streams “seamless” (they seem pretty stitched together to me), but he’s clearly better off with them than without them. I find it hard, though, to celebrate a phenomenon — I mean, revolution — that, in Larson’s case, seems more a manifestation of a failure in the economy than some grand new breakthrough.

I’m reminded of that Raymond Carver short story “Why Don’t You Dance?,” where a nameless “middle-aged” guy sets all his furnishings out on his front lawn. He’s in bad straits, and he needs to sell his stuff to make some money — or, as we might say today, he has to transform his possessions into assets in order to monetize their residual value. He carefully arranges everything to mimic the way it had looked inside his house:

A rattan chair with a decorator pillow stood at the foot of the bed. The buffed aluminum kitchen set took up a part of the driveway. A yellow muslin cloth, much too large, a gift, covered the table and hung down over the sides. A potted fern was on the table, along with a box of silverware and a record player, also gifts. A big console-model television rested on a coffee table, and a few feet away from this stood a sofa and chair and a floor lamp. The desk was pushed against the garage door.  A few utensils were on the desk, along with a wall clock and two framed prints. There was also in the driveway a carton with cups, glasses, and plates, each object wrapped in newspaper. That morning he had cleared out the closets, and except for the three cartons in the living room, all the stuff was out of the house. He had run an extension cord on out there and everything was connected. Things worked, no different from how it was when they were inside.

There are plenty of good things that can be said about making it easier for people to rent or barter or share stuff that they own. There are also troubling things about the trend, particularly when the companies skimming the profits try to position themselves as pure-hearted do-gooders battling the sad benighted bureaucrats with their outdated zoning laws, licensing requirements, and consumer-protection regulations. As Tom Slee recently wrote, in response to a Tim Wu op-ed, “The Randian, simplistic free-market thoughtlessness behind the wave of ‘peer-to-peer’ companies, and especially those who are trying to uproot regulations that protect consumers, is far from the wave of the future: it’s hucksterism masquerading as progress, hubris as vision, callous selfishness as community-mindedness, and it’s a disaster waiting to happen.”

Maybe that’s an overstatement. But it’s no greater an overstatement than the one peddled by those who seek to portray peer-to-peer sharing as an unalloyed good, a populist economic revolution. “Who Wants to Be a Billionaire”: That would have made a good title for a Carver story.

 Photo by Julia Manzerova.

The mixed reality setup

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In the nineteenth century, the physicist James Clerk Maxwell conducted a famous thought experiment. He imagined a container filled with a gas at a uniform temperature. He divided this theoretical container into two theoretical compartments, with a little theoretical sliding door between them. He then imagined an itty-bitty Leprechaun-like fellow, a “demon,” as he came to be known, standing in the container and operating a switch that opened and closed the door. The demon watched as molecules came zipping toward him. He opened and closed the door in such a manner as to let molecules with a faster-than-average velocity go into the left compartment and to let slower-than-average molecules go into the right compartment. Through the demon’s superhuman efforts, the temperature of the left compartment rose while the temperature of the right compartment fell. The molecules in the container became more organized, in other words, and the uniformity, or entropy, of the container diminished.

Ours is a world of demons. We’ve created all sorts of devices to impose greater order on society, to curb the chaos of human beings running around at different speeds like crazed molecules. Think of traffic lights. What are they but demons that regulate the flow of vehicles through intersections and other tight spots? As any engineer would tell you, we need traffic lights because our communication abilities are highly constrained. We can yell, or activate our turn signal, or make hand gestures — or do all those things at once — but for a bunch of cars to navigate a busy intersection smoothly and without accident, that method of communication is wildly insufficient. It’s way too slow, way too ambiguous. What you’d really need is instantaneous, realtime, non-ambiguous, continuous messaging, and that’s just not possible for a bunch of glorified apes prone to anger and daydreaming. So: demonic traffic lights.

The traffic light is a lousy solution — really inefficient, when you think about it — but we had no real alternative. Traffic cops are no better, and because they’re human you have to pay them and give them time off to deal with all that meatspace crap. But the world and its possibilities are changing. Now, we’re close to having an alternative to the traffic light system: the self-driving car. Computers, unlike humans, are really good at instantaneous, realtime, non-ambiguous, continuous messaging. They don’t get angry; they don’t daydream. When they’re connected to sensors and satellites and transceivers, and outfitted with the right algorithms, their superior communication skills actually allow them to navigate busy intersections smoothly and efficiently, without any signals. The network is the demon! It’s all explained in this YouTube video:

If you watched that video all the way to the end — fat chance, statistics indicate — you would have heard the narrator discuss a big complicating factor when it comes to the rollout of computer-driven cars. It’s what he, in an exquisite turn of phrase, calls a “mixed reality setup.” If you could snap your fingers and turn every car on the road into a computer-driven car, then you’d be able to go ahead and take down all those traffic lights and let the computers coordinate intersection traffic. The people formerly known as drivers would be free to focus their attention on what really matters in life, i.e., their smartphones. Instant nirvana. But that’s only possible in a Mussolini fantasy. The fact is, you’re going to have, for a good long time, both computer-driven cars and human-driven cars. That’s a mixed reality setup. The humans have their reality, and the computers have their reality, and the realities don’t mesh all that well. Remove the traffic lights, and, well, every intersection turns into an end-of-days battle between the forces of rationality and the forces of testosterone. It’s Larry Page vs. Rambo.

This post will now have a Brief Idiotic Intermission while we change the set:

I really like that phrase mixed reality setup. It has enormous explanatory power that extends well beyond cars and intersections. It extends all the way to Maxwell’s demon, I think. I’m going to posit — and I’m pretty sure physicists will back me up here — that the universe doesn’t much like mixed reality setups. One way to think about entropy is as a force, or a bias, that is constantly pushing everything away from a mixed reality setup and toward a uniform reality setup, the latter state being more familiarly known as absolute heat death. We began, pre-Big Bang, with some kind of uniform reality setup, and we’ll end with another uniform reality setup. That’s not something to look forward to. Uniform reality setups, in addition to being inhospitable, are really boring. Shit doesn’t happen.

I’m going to further posit — and here I may part company with my physicist friends — that human history itself might be explained as an ongoing attempt to resolve the tensions inherent in a mixed reality setup. What is war but an attempt by one party to impose its reality setup on another party? What is politics but a clash of reality setups? Even in the intimate violence of personal relationships we hear the sound of reality setups grating against each other. From this perspective, it becomes clear that the conflict between the reality setup of the computer-controlled car and the reality setup of the human-controlled car is part of a much, much larger conflict between the different reality setups of the computer and the human.

Have you ever had the misfortune to walk behind someone who is deeply engaged in manipulating an app on his smartphone? The person displays extraordinarily poor speed regulation, often slowing down, without warning, to a geriatric shuffle. The person also tends to weave like a drunk, frustrating your ability to get past him. You’re stuck in a slow-moving pedestrian nightmare. It’s really unbelievably annoying. It’s also another example of a mixed reality setup. Not only is there a conflict between the reality setup of the computer-enabled human and that of the non-computer-enabled human, but there’s a conflict within the computer-enabled human himself. His human reality setup (particularly the innate limitations to his ability to walk in a straight line at a steady speed while engaging in other pursuits) is maladjusted to the reality setup that the networked handheld device seeks to impose on him. There are two ways to resolve these tensions: you either defer to the human reality setup (ie, put constraints on the use of mobile computers in public thoroughfares) or you defer to the computer reality setup (ie, put everyone on some sort of computer-controlled personal-transportation vehicle, like a Segway with LIDAR). Or you just muddle through with a mixed reality setup and all the annoyances it entails.

Given society’s current bias toward efficiency and safety and the meticulous measurement of outcomes, I predict that, going forward, the computer reality setup will have an advantage over the human reality setup. Slowly but surely, we’ll defer to the computer reality setup, and eventually the computer reality setup will shoulder aside all other reality setups and become the uniform reality setup. The mixed reality setup that has always characterized human society will go the way of the Dodo and the PalmPilot. Plenty of people will celebrate this eventuality, particularly as they zip effortlessly through complex, accident-free highway systems while playing Words With Friends or writing odd, rambling blog posts. But there’s something to be said for the mixed reality setup. Sure, it leads to inefficiencies and annoyances, but it’s also life’s Sriracha sauce. The conflicts that emerge from the mixed reality setup are the stuff of art, for one thing. And, certainly, you can’t have comedy without a mixed reality setup. Steve Martin? Gone. Tragedy becomes unthinkable, too. The unexpected pleasures of serendipity and ambiguity? Gone, and gone. This may just be a case of preemptive nostalgia, but I already find myself clinging to my mixed reality setup, refusing to let go of the wheel. I’m finding it hard to see a big difference between a uniform reality setup and absolute heat death. We’re going to miss those traffic lights when they’re gone.

Photo from Ajuntament Barcelona.