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EV#139 Pitchforks, globalization, labor and AI.
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I am travelling this week and I wanted to make sure you still got your dose of Exponential View, so I asked Tim O’Reilly to step in.

Tim O’Reilly needs no introduction to any Silicon Valley watcher. For over 30 years, his eponymous firm has been the foremost technical publisher in the world, teaching millions of developers how to build the services we use each day. He has also been a keen observer of the potential of technology from the crucible of Silicon Valley for those decades. More than that, Tim has launched a venture capital firm and sits on several boards, and actively promotes responsible behaviour in the technology industry.

I first met Tim about 15 years ago during the emerging years of Web 2.0. Tim was the foremost proponent of Web 2.0, the idea of a Web focussed on high-interoperability, user-generated content and end-user participation. Of course, Web 2.0 didn’t end up in the pro-social, community infrastructure we expected to arise from the wreck of the dotcom crash. Rather, we sit in the shadow of hyper-dominant, monocultural Silicon Valley firms.

Tim has a new book, which reflects on this and how we might move forward: “WTF? What’s the Future and Why it is Up to Us”. It’s part personal history, part manifesto, part action plan for how we can harness technology for our benefit.

I value Tim’s insight into the Valley, his understanding of how small sparks can create bright futures and his view on where technology might take us. He has a vantage point few can match.

Enjoy his Exponential View,
Azeem

P.S. If you are going to really think about one part of what Tim has to say, mull over the paragraph that ends with “we’ve already had our Skynet moment”. I’ve been thinking along the same lines myself. Read it once, read it twice, and reflect. 💭

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ABOUT TIM

Hi, I’m Tim O’Reilly, founder of O’Reilly Media, founding partner of early stage VC firm O’Reilly AlphaTech Ventures, and author of “WTF? What’s the Future and Why It’s Up to Us”, released last month.

I’ll start by sharing a few lines from books that have changed my life.

From "Science and Sanity", by Alfred Korzybski:

The map is not the territory.

When I was a teenager in the late 1960s, I studied with a man named George Simon, who had built an experiential practice based in part on Korzybski’s work. A deep understanding that the language we use about the world shapes what we see, that it is a kind of map, and that a bad map can lead us astray, has been central to my ability to notice things about emerging technologies and to reframe the story that we tell ourselves about what matters and why. Recognizing when you’re stuck in the words, looking at an out-of-date map rather than looking at the road, is something that is surprisingly hard to learn.  

From “When Nietzsche Wept”, by Irvin Yalom:

First will what is necessary. Then love what you will.

There's a profound insight there that I've tried to live by, long before I read the quote. Life asks many things of us that we don't want to do. Some of them are distractions, but some of them are necessary. It’s so easy to be full of resentment toward things that we feel are keeping us from our joy. Finding joy in what needs doing is magical. Learning to love the things that are necessary—like daily chores—is the secret of happiness.

DEPT OF GLOBALIZATION & PITCHFORKS 

📦  The fine Atlantic writer Alexis Madrigal invested a good amount of time and brainspace on this engrossing eight-part podcast series about capitalism and the impact of global trade on the economy, viewed through the prism of shipping containers and the ecosystem that has sprung up around them. It’s well worth the time you’ll spend listening to Containers; if you’re not convinced, listen to this interview with Madrigal about his audio documentary. And for sheer enjoyment, here’s his fascinating account of the making of the logo for Containers.

🎩  This summer, venture capitalist Nick Hanauer sounded the alarm: “The Pitchforks Are Coming... For Us Plutocrats.” This memo to his “fellow zillionaires” in Politico, stressing the immediate threats to the economy of income inequality, is blunt and pointed (no pun intended); it’s a clarion call to address the situation or face an uprising.   

Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.


As a companion piece to Nick’s assessment of the problems and perils of income inequality from the zillionaire’s perspective, here’s a harrowing account from the point of view of a steelworker losing her job as her company shifts its manufacturing to Mexico in pursuit of greater profits.

And to understand the rise of income inequality over time, thanks to the erosion of business values and corporate beneficence, there’s no more instructive story than this tale of two janitors:

Ms. Evans was a full-time employee of Kodak. She received more than four weeks of paid vacation per year, reimbursement of some tuition costs to go to college part time, and a bonus payment every March. When the facility she cleaned was shut down, the company found another job for her: cutting film.

Ms. Ramos is an employee of a contractor that Apple uses to keep its facilities clean. She hasn’t taken a vacation in years, because she can’t afford the lost wages. Going back to school is similarly out of reach. There are certainly no bonuses, nor even a remote possibility of being transferred to some other role at Apple.


DEPT OF LONG-TERM THINKING

In my book, I spend a good deal of time talking about how Wall Street’s emphasis on short-term shareholder value is an algorithm that has spawned many problems in our economy. Silicon Valley may have found one solution: the Long-Term Stock Exchange.

Spearheaded by entrepreneur Eric Ries, author of "The Lean Startup", it’s backed by tech leaders—including Marc Andreessen, Steve Case, Reid Hoffman, Dick Costolo (and me)—who want to encourage long-term thinking on the part of executives and investors by providing incentives for shareholders to hang on to stocks for greater periods of time and rewarding company employees for long-term business performance.

Proponents believe it will help entrepreneurs bring their startups to IPOs and catalyze innovation and new investment opportunities. Under discussion for several years, it could come to fruition by the end of 2017. Read all about it in the Wall Street Journal or the New York Times, which also explores other alternative approaches to the financial markets. If you don’t subscribe to either of those publications, here’s a good summary of the LTSE from Quartz.

🏙️  Sidewalk Labs is creating the city of the future on 800 acres in Toronto. I’d prefer that they build the city of the future for the some of tens of millions of refugees around the world who will be living in temporary camps, which, if history is any guide, will still be with us as shanty cities decades hence. As Eric von Hippel wrote long ago, if you really want to innovate, go to the most extreme environments, not the one that is most familiar to you.

🔮  Speaking about the future, it’s well known that several towering intellects are convinced that the advent of AI poses a serious threat to humanity. Elon Musk has repeatedly sounded the alarm, as has Stephen Hawking, who addressed the issue again at the recent Web Summit in Portugal. While acknowledging that AI has tremendous positive potential, Hawking said,

we cannot know if we will be infinitely helped by AI, or ignored by it and side-lined, or conceivably destroyed by it

and advocated developing best practices and the establishment of rules to regulate AI and robotics.

While I believe that we need to grapple firmly with the long-term ethics of AI, the hype about future “Terminator-like” scenarios distracts us from present concerns. AI-enabled face recognition is already being used by repressive regimes, and our first cyberwar featured bots used in a massive disinformation campaign to affect the US elections.

As Zeynep Tufekci noted on Twitter,

too many worry about what AI—as if some independent entity—will do to us. Too few people worry what *power* will do *with* AI.


We also don’t need to look to hypothetical scenarios like Nick Bostrom’s “paper-clip maximizer” or Elon Musk’s “strawberry fields forever” to see examples of what you can call a “runaway objective function.”

Facebook’s fake news problem shows that even present-day algorithmic systems can optimize for the wrong thing; by telling its systems to show people more of what they liked and shared. Facebook thought that it would encourage deeper social connections and build a great advertising business. It didn’t intend to amplify hyper-partisanship and the development of fake news. And when economists told companies that the only social obligation of business is to make money for shareholders, they thought they would make businesses more efficient. They didn’t mean to increase income inequality, hollow out the US economy, and create an opioid epidemic. But these were some of the unintended consequences when we told our companies to optimize relentlessly for corporate profit and treat humans as a cost to be eliminated. This is why I say we’ve already had “our Skynet moment.”


DEPT OF LABOR

🤖  UK-based online grocer Ocado is getting order fulfilment down to a science. Where it once took two hours to gather and pack an order of 50 items, it now takes five minutes, thanks to a squadron of 1,000 robots that scour the warehouse to gather the products and deliver them to human packers. It’s a giant leap forward for the continuing automation of the grocery business.

While it’s easy to interpret developments like this as a threat to jobs (and understandable, given all the headlines about the retail apocalypse), we’re beginning to see evidence that e-commerce businesses can be powerful jobs engines. When Amazon added 45,000 robots to their warehouses, it also added 250,000 warehouse workers and hundreds of thousands more delivery drivers.

Why? Because they didn’t simply do the same thing more cheaply—they used the technology to pack more products into their warehouses and get them out faster. This is the master design pattern of technology: Do more. Do things that were previously impossible.

💸  Michael Mandel, chief economic strategist at the Progressive Policy Institute in Washington, DC, contends that the shift to e-commerce is not only a net job creatorthe new jobs spawned by the rise of online shopping in fulfillment centers and distribution warehouses pay better wages than brick-and-mortar retail work. Furthermore, the rise of e-commerce and its tremendous space requirements is bringing good jobs back to regions crushed by the decline of US manufacturing.

🚙  We’re familiar with the traditional migrant workforce; they’re typically foreign laborers who follow crops around different regions throughout the year, making a living pruning or harvesting in orchards and fields. But there’s a new US migrant work force; retired Americans, many of whom lost their homes (and hopes for retirement) in the financial crisis that began in 2008. Known as Workampers, they follow seasonal jobs in their RVs. And Amazon has its own subgroup, known as CamperForce.


DEPT OF FAKE NEWS

While Washington calls Google and Facebook on the carpet for enabling foreign agents and illegitimate fringe media outlets to influence the US election, a book published in 2015 has found new relevance. "Phishing for Phools: The Economics of Manipulation and Deception", by Nobel Prize winning economists George Akerlof and Robert Scholes, makes an extraordinary case for efficient market theory: fraud and abuse are not examples of market failure, but evidence that there is an efficient market for everything, including fraud. The market will find ways to take advantage of every possible cognitive bias or human failing.

For a lighter touch, consider "The Sun and the Moon: The Remarkable True Account of Hoaxers, Showmen, Dueling Journalists, and Lunar Man-Bats in Nineteenth-Century New York" by Matthew Goodman, which tells the tale of the first fake news story. In 1835, the New York Sun ran an article claiming that a British astronomer had discovered life on the moon through his telescope, complete with fantastical details about lunar life; the story was designed to look like a reprint from the Edinburgh Journal of Science. Goodman’s book, released in 2008, has found new currency (as is evident from the publication of recent features about this tale in the New Yorker and the Atlantic) at a time when we’re gnashing our teeth over fake news and struggling to figure out what to do about it.


SHORT MORSELS TO APPEAR SMART AT DINNER PARTIES

😨  That time in 2008 when an airplane computer “went psycho,” putting more than 300 Qantas passengers at risk.

👚  Unpaid textile workers are leaving hidden messages in the clothes they made

Joi Ito’s manifesto “Resisting Reduction: Designing our Future with Machines” explains how the complex-adaptive systems of nature are a better analogy than the Singularity when thinking about technology. You can use ideas from this piece to think more clearly about crypto-currencies as well!

Kumail Nanjiani isn’t a software engineer; he just plays one on TV. But through his work on the HBO series Silicon Valley he often gets to peek behind the curtain at what’s going on in the tech industry, and he’s a bit concerned by what he sees.

☀️ On a different note—a fascinating account of a Japanese woman whose amateur sunspot observing over 40 years created a backbone for the work of today’s scientists.


END NOTE

I hope you enjoyed Tim’s Exponential View as much as I did. Please thank Tim for taking the time to share his views with us by tweeting, or forwarding his issue to your friends and colleagues.

Separately, Mat Morrison, an EV reader, turned me on DEXA scanning, a way of peering inside your body to understand body composition. I recently undertook one at a place called BodyScan in London. It was eye-opening, giving me a very detailed view into my body, and enough data to keep me happy for hours (kitten & ball of string levels of happy) but more importantly, understand what to fix. If you are data-driven & interested in your fitness, I can’t recommend it highly enough. I got on well with Phil, the founder of BodyScan. He is a former tech marketer and bit of a maths geek. He’s agreed to give some EV readers the same game-changing experience. Just head over here and it’s all set up to give you an exclusive 25% discount. (Or use the code EXPONENTIAL.)

As W. Edwards Deming said, “you can’t manage what you can’t measure.” Get measuring!

Cheers,
Azeem

P.S. We're on the lookout for new sponsors for next year. Drop us an email if your company wants to reach a selected audience of decision-makers, thinkers and those who are always a step ahead. 

Carefully curated by Azeem Azhar: The Exponential View.

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