I started working at NVIDIA nine months ago, so Moore’s Law is a daily theme in my head of late.  And given my interest in economics, I sometimes wonder whether Moore’s Law will ever have a measurable impact on economics.  Certainly, if computers and robots start doing a majority of the “manual labor” in the world economy, then Moore’s Law may start to have an impact.

So I started thinking: what if productivity doubled every eighteen months?  Of course, this question is qualitatively different (massively so!) from the prior paragraph.  But what if?  What would economics look like?

Or to put it another way: What if the total of whatever you owed were cut in half every eighteen months?  How would you behave?  How would your actions change?

Probably most of us would borrow and spend like there were no tomorrow!  I.e., the rational choice would then to become Keynesians overnight.

I think that my point may be that the difference between an Austrian and a Keynesian gets pretty blurry near such a singularity.  Kind of like a black hole starts to make physics (Newtonian, quantum, whatever) pretty blurry.

You say: But that’s not the real world.

And I agree.

But again, this is just a thought experiment about the difference between an Austrian and a Keynesian.  The difference still seems to be with the creditor – if every creditor forgave half of all debts every eighteen months, everyone would be Keynesian.

 

(Aside: Congress and the Fed could “make this happen” by printing 35% (or so) more “money” every year.  (And, of course, spreading the “money” out much more evenly than just giving it to Wall Street!)  The results would be horrible, of course – everyone would flee the dollar, a crack-up boom would occur, etc.

Unless Moore’s Law starts to effect the economy.  Or something else occurs, like the efforts of Focus Fusion give everyone free, clean energy.

Or, suppose all creditors just take the new dollars because they’re happy enough – everyone has enough food, shelter, clothes, entertainment, etc.  Or the government is powerful enough to make all creditors take the new dollars.

Or some combination of all of the previous statements.

A combination of the previous statements just about results in what we have today – the Fed printing money, everyone getting Social Security, everyone starting to get health benefits, etc.)

 

What would Mises say about an exponential explosion of productivity?

I haven’t blogged in about a year, mostly because a friend of mine gave me the complete set of the Great Books (from Brittanica).  A gift like that is enough to set one behind for a lifetime, never mind a single year!  It’s also enough to scramble the brain for a while, so I couldn’t write anything worth reading.

So after plowing through a lot of reading I still don’t have much confidence to write statements, so here are some of the questions that I have wrestled with over the last year:

Why are the benefits of capitalism so counter-intuitive?  I.e., why does it take an immense genius like Mises to be clear on the subject?  Why does it take waiting until the twentieth century to be clear on the subject?  Why does it take even bright people a lot of time wrestling with the writings of Mises to finally “get it”?  (Probably because economics is so complex.  It’s almost like we need Mises’s Law: “Economics is immensely more complex than you think, even if you take into account Mises’s Law.”)

When will most people “get it,” if ever?  Will the twenty-first century finally start when more people “get it”?  How many more?  Will Information Technology need to help deflect control of the Healthcare and Financial sectors from government first?  (See the categories in the list of S&P 500 companies.)

Doesn’t pure capitalism create J.P. Morgans?  I.e., if the financially intuitive rise to the top (which I believe Mises implies), and birds of a feather flock together, won’t you get a (very) few Wall Street firms controlling the economy?  Mises.org rails against the immense power of the bankers (for good reason), but isn’t that power aided by pure capitalism?

What is the average person to do in a world economy that is getting exponentially more complex?  Doesn’t the vastly increasing complexity of modern economics just provide many more pitfalls for the average person?  Thus doesn’t pure capitalism (in real life, not in theory), create an uberclass of the financially “astute”?  Sure, the Walton family (thank God for Sam Walton!) controls billions, but Wall Street moves trillions!

What do we do with the STJ’s that aren’t going to be productive in such an increasingly complex economy?  Is democracy just the best tool for keeping (bored) STJ’s in check?  In a democracy, don’t the ESTJ’s just become populist shills for all the ISTJ’s?  And then populist shills + J.P. Morgan = central banks and fiat currency, right?

Isn’t the “greatest human being,” the most caring human being, the most human human being (e.g., President Obama) supposed to be in leadership?  Wouldn’t anyone want President Obama as President, instead of, say, J.P. Morgan?

Don’t the benefits of capitalism include higher population?  Then what happens to the environment?  Aren’t many of the (good!) problems of the modern age (expensive healthcare, unproductive masses, environmental degradation, etc.) results of the exponentially-increasing complexity aided by capitalism?

When, if ever, will the technological complexities afforded by capitalism actually start to solve the problems of the modern age?  Will this be the start of the twenty-first century?  Or even of a major inflection point in history, a Singularity?

How does a brilliant person like Lord Keynes make such an astonishingly stupid statement like: “In the long run, we’re all dead”?

Today’s daily article on Mises.org, Hoppe’s “On the Impossibility of Limited Government and the Prospects for a Second American Revolution,” reminded me of a section in Walter Truett Anderson’s book Reality Isn’t What It Used To Be.  Both Hoppe’s mention of “paper law” and his statements about the Constitution parallel Mr. Anderson’s thoughts.

Mr. Anderson’s book is a post-modern commentary on today’s society (actually on 1990’s society as it bears a 1990 copyright).  And in true post-modern style, the book is a devastating commentary on the plethora of myths that our modern society acts upon every day.  Much of the book is insightful, incisive, and right on the mark: Mr. Anderson sweeps away many pre-modern and modern myths, most of them created by political and religious demagogues.  Unfortunately, also in post-modern style, the book provides no replacements for those myths but ends with a typical post-modern whimper about myths being here to stay.  (Mr. Anderson, meet Mr. Hoppe!)

The fourth chapter of Mr. Anderson’s book is entitled “The Meanings of Literature,” which summarizes the post-modern emphasis on (and methods of) textual deconstruction.  The section of the chapter that caught my eye is entitled “Deconstructing Law”; the section opens with a choice quote from Harvard Law professor Clare Dalton: “Law, like every other cultural institution, is a place where we tell one another stories about our relationships with ourselves, one another, and authority.”  The next paragraph mentions Ms. Dalton again, along with the results of her insight: “Ms. Dalton, who was denied tenure.”  Poor Ms. Dalton actually followed the Harvard motto, and we see where it lead her.

I would like to quote all five pages of the entire section, but suffice it to say that the rest of the section reveals how various modern mandarins of law are trying to suppress the growing realization that most law is merely paper.  The first example: Harvard Law emphasizes the scientific study of law, “a method, sometimes called the doctrinal approach, which looked on the law as something like a science.”  (Harvard Law, meet Mr. Mises.)

Another example: “Paul D. Carrington, dean of the Duke University Law School, said all [Critical Legal Studies] law teachers were morally bound to resign, because it is immoral to teach a subject in which one does not believe.  Is it appropriate, he asked, for an atheist to teach religion?”  (Mr. Carrington, are you really saying that one should “believe” in law?  Is law a matter of faith for you??  Really??  So who should be resigning?)

The last example throws Hoppe’s view of the Constitution into sharp relief: Judge Bork’s book about his denied confirmation to the US Supreme Court.  In his book, Judge Bork decries the excesses of the Warren court, and calls for a return to the “original understanding” of the intent of the authors of the Constitution.  Mr. Anderson isn’t buying it: “Although the conflict [Judge Bork] describes is certainly going on, I don’t think the picture is as black-and-white as he paints it.  We are not faced with a choice between return to governance in the mode of Judge Bork and his friends at the American Enterprise Institute, or a blind leap forward to governance in the mode of deconstructionist law professors – and it’s a mighty good thing we’re not.  The conservatives do not appear to know that their rock-of-ages understanding of the Constitution is a social construction of reality …”

Unfortunately, once again, Mr. Anderson ends with a whimper: “Does that mean that Constitutionalism is dead?  I don’t think so.  I note that even Professor Levinson says he is willing to make a ‘limited affirmation’ of faith in the Constitution.  It is one of the things that holds American society together.  The country has not yet reached the time when it can do without one, and I suspect it is well past the time when it could create a new one.  If we had the new constitutional convention that some desire, bringing together a nationally representative group of framers, could they create an organic document?  I seriously doubt it.  I doubt that we could even get one out of a smaller gathering – I doubt, in fact, that you could get a decent bill of rights out of the Harvard law faculty.”

So post-modern thought seems to argue for Mr. Hoppe’s thesis, which is good since our world is more post-modern every day.  Unfortunately, while Mr. Anderson makes many great points, his world-view is not sufficient to offer strong solutions.  Post-modern thought is not strong enough to carry the day, but merely to show the need for a resolution to the crisis of government.  But all journeys out of addiction start with the first step: realizing the need.

I write flight simulation software for a living, and thus the machine at my desk has to have a relatively recent graphics processing unit (GPU).  Maybe not the most bleeding edge GPU, but something at least relatively recent.  Thus one (small) requirement of my job is to maintain an acquaintance with the capabilities of GPUs as they evolve over time.

One capability that I have been watching with growing interest is the use of GPUs in biotechnology applications, specifically protein folding.  The research into a complete understanding of protein folding is exciting for many reasons: it has the potential to cure devastating illnesses, it requires immense computational resources, and it gives insights into how non-mechanical machines work.  In the last few years, the folding at home project supported by a biotech lab at Stanford has written a couple versions of their protein-folding software to take advantage of the linear algebra capabilities of modern GPUs.  For instance, the lab has just released the second version of their GPU software in their effort to keep up with the state of the art in GPU hardware.

Of course, the reason that efforts like folding at home are interested in wringing the last cycle of performance out of modern GPUs is that their computations are of enormous complexity – to achieve accurate results, the proteins being studied must be simulated at the atomic level.  Since each protein molecule contains hundreds if not thousands of atoms, the software that simulates the physical interactions between all the atoms must perform billions of linear algebra calculations.

So what does protein folding have to do with Mises?  Protein folding requires a focus on each, individual atom.  Protein folding algorithms must calculate the actions of each individual atom to achieve results worth more than a bucket of warm spit.  Each atom is vitally important.  Any “statistical” efforts to understand the protein “as a whole” are worse than worthless.  You have to do the math, per atom.  If you have to use statistics, you really don’t know what you’re talking about.

And, as Mises showed again and again, the same principle applies to economics.  To achieve any results worth more than a bucket of warm spit, you have to consider the individual actors.  Period.  Anything else is mere guesswork.  And in the age before supercomputers, Mises had the courage to say so.  Which takes a lot of courage – Mises had the integrity not to spew a lot of fake “mathematics” to cover his (and everyone else’s) necessary ignorance of economics “in the large.”  Would that more economists followed his example.

I say “the age before supercomputers” in the hope against hope that immense computational resources might help us to achieve results deeper than what Mises could achieve – results based on the computation of the interaction between individual actors.  But I think Mises would probably deny that even supercomputers would help economics.  They certainly help for very complex physics problems: weather prediction, protein folding, atom smashing, and so forth, but of course human reasoning does not follow physical laws.

Being the curious person that I am, I’m always interested to see if some economist can achieve deeper, more fundamental results than Mises did.  Unfortunately, without an accurate model of human action based on linear algebra, I’m afraid that supercomputers aren’t going to help all that much.

I just finished reading Robert Reich’s “The Work of Nations”; I’m
not familiar with the body of Mr. Reich’s work, but the first half of
the book interested me somewhat as I leafed through it in a used book store. 
Besides, Wikipedia says that it is probably his most important work,
being translated into 22 languages.  (The below page references are
from the paperback edition.)

The theme of the book is the dilution of national economic power in
an age of globalization.  Mr. Reich compares the era of the 1950s and
1960s with the coming 1990s (the book was published in 1991).  He
points out that in the former era, American corporations were largely
American-owned, and staffed by American workers in American
factories, workers that had been trained (for production work) in
American public schools, American workers that had been promised full
employment, etc.  He compares that economic world with the “global
webs” of corporations today in which ideas, products, and money flow
across the globe in search of “high value.”  He warns the reader to be
sure to adjust his or her thinking to the new era, not to fall into a
“vestigial trap” (p. 95), a “vestigial notion” (p. 100), “vestigial
concerns” (p. 118), a “vestigial view” (p. 148), or “vestigial thought”
(p. 154), … and I stopped counting his uses of the word “vestigial”
when he decides to write an entire chapter on vestigial thought. 
Vestigial is the word of the week, isn’t it?

As I said, the first half of the book interested me: Mr. Reich
highlights the drastic differences between the two eras.  I
really liked that he “gets” that economics today is about high value,
not high volume: he writes an entire chapter with that emphasis.  Mr.
Reich also understands that the people with rising incomes today are
mostly what he calls “symbolic analysts” – those people whose
occupation is to manipulate symbols, be they financial, mathematical,
or otherwise.  And a whole section of the book explores the “global
web” of today’s economy.

But then the book starts to slide into, yes, vestigial thought. 
Sorry, Mr. Reich, but for the entire back half of your book you
relentlessly avoid your own advice.

His most basic vestigial thought is a throwback not to the 1950s, but the
1850s: he views the group of symbolic analysts as a class, as in class
warfare.  Marx would have been proud.  Of course, Mises (and others)
destroy the class myths, but it’s a good guess that the Kennedy School
of Government doesn’t study Mises.

Now I don’t mind his talking about symbolic analysts as a group –
this is not a formal treament in an economics text, I realize – but
when he starts talking about the symbolic analysts “seceding from the
Union,” wow, that’s 1850s with a vengeance.  Twenty million workers up
and decide to leave the Union?  Together?  That’s rich.  Right there in
chapter 24: “The Politics of Secession.”  In the chapter, he states that the other “four-fifths” of the workers “could mandate that a larger proportion of the burgeoning incomes of symbolic analysts be taxed and transferred to them,” and posits reasons why that hasn’t happened.

Another vestigial thought is the classic government minister’s need
for control.  From page 186: “As the world shrinks and the pace of
economic change quickens, such beneficial or harmful side effects loom
larger.  A new vaccine can protect millions of children; a meltdown at
a nuclear power plant can poison the air for just as many.  How do we
ensure that symbolic analysts apply their creative energies in the
right direction?”  Besides your yearning for control, you have a
special way with your use of “we” and “their,” Mr. Reich.  Great class
warfare thinking.  (Not to mention the nuclear meltdown scaremongering … and wasn’t it the Soviet system that created the Chernobyl crisis?)

Yet another vestigial thought is the usual government minister’s
arrogance that he or she knows best what the customer needs.  From page
195: “Anyone who believes that the American economy, or American
society generally, has nevertheless on balance benefited from the
surging number of lawyers and financiers that now engulf us must be
either a lawyer or a financier.”  This single sentence contains errors
too numerous to count: the afore-mentioned arrogance, the
emotionally-charged use of “surging” and “engulf,” the disdain for
services that add high value – didn’t you just say the new economy is
all about high value?

And yet another vestigial thought: his chapter 16 on “American
Incomes” rehashes the old canards of rich and poor, etc., but the real fallacy is that he uses the 1950s and 1960s as his baseline for
comparison.  Mr. Reich, I thought you warned us *against* thinking that
we are still in the 50s and 60s?

Of course, his first solution for keeping the nation together
economically is a “truly progressive income tax” (page 245): he reminds
us how high the income tax rates were in 1917 … 1917?  Seriously? 
The answer to the “problem” of income inequality is to go back to
1917???

The idea of keeping the nation together economically brings us full
circle to Mr. Reich’s “politics of secession.”  And this is where Mr.
Reich’s mind gets truly vestigial – even primitive, as in
warmongering.  The way he talks about secession makes me wonder if he
would not hesitate to use any of Mr. Lincoln’s methods to keep the nation together.

But the real reason that I mention warmongering is the horrific
suggestion in the epilogue – given the absence of Cold War threats,
Japan is an apt candidate for economic warfare!  (If the book were
written today, I have no doubt that Mr. Reich would be begging for a
fight with China.)  One must read his epilogue to receive the full
shock – it’s beyond belief.  Here’s a (necessarily) long quote: “Given
these trends, without the external pressure of Soviet communism holding
us together, America may simply explode into a microcosm of the entire
world.  It will contain some of the world’s richest people and some of
the world’s poorest, speaking innumerable languages, owing many
allegiances, celebrating many different ideals.  These individuals will
be efficiently connected to the globe – both economically and
culturally – but not necessarily to each other.  Our collective
identity will fade.  There will be no national purpose, and no pretense
of one.  Instead, each inhabitant of the United States can attend to
the great problems of mankind … This is not an altogether grim
picture.  Some of libertarian bent might even find it attractive.  In
contrast to most inhabitants of the planet, who still live in nations
that impose on them substantial responsibilities for the well-being of
their compatriots, the people who live within the borders of the United
States will inhabit a kind of free, universal zone, obligating them
only to refrain from causing one another bodily injury and stealing one
another’s property. … Yet there is also something terribly sad about
this fate … There is an alternative, of course.  America may choose
another nemesis to replace the Soviet empire – a new external threat
that binds us together as Americans, and gives us a reason to be
responsible to one another.  Japan comes immediately to mind. … the
British do not suffice to bring Americans together … No, we need a
more potent external force to hold us together in this post-Soviet
world – an external force so utterly different from us that, by dint of
contrast, it will continuously remind us of who “us” is.  Japan is an
apt candidate.”

My mind boggles at the Orwellian suggestion, from a man soon to be a
cabinet minister, of pitting the “symbolic analyst” “class” against the
scary, “different” foreign nation.  In the name of national unity. 
George Orwell would have not been surprised.  This is vestigial
thinking at its very best.  Mr. Reich gets it right that nations are
formed from common struggle – the modern states of Europe were created
in the crucible of the religious wars of the Reformation.  But his mind
is totally primitive if he seeks war, even economic war, just to
preserve some form of national patriotism.  Mr. Reich, you are welcome
to the sixteenth century – please let the rest of us join the
twenty-first.

After blathering about social graphs through my last few blog entries, I finally had an intelligent idea: check the local used book store for volumes about social graphs.  Some real research is far better than my stream of consciousness, right?

And lo and behold, I came across Duncan Watts’s book Six Degrees: the Science of a Connected Age.  After leafing through it, I decided that the book was deep enough to warrant purchasing, and I took it home.  Only later did I realize that Duncan is one of the (very few!) people actually creating the new field of network science.

Network science is the brand-new field of science that uses tremendous amounts of computational horsepower to study the structure and behavior of large-scale networks, down to the level of the individual node.  Network science is such a new field because without large, fast computers, it is impossible to reveal any worthwhile results about networks with millions of nodes.

For example, starting on page 56 of his book Watts discusses the efforts of a mathematician at the University of Chicago named Anatol Rapaport who studied epidemiology in the 1950s.  Rapaport was taking a social graph approach to the problem, and actually achieved some initial results using just pencil and paper.  Here is the paragraph that ends Watts’s section on Rapaport:

“Back in Rapaport’s day, this realization was pretty much the end of the road, and reading his original papers you can see that he knew it.  Perhaps if the University of Chicago group had had the same kind of computers that we have today, they might have cracked the problem wide open, and network theory might have taken a very different route.  But they didn’t.  Blinded by a lack of data and hobbled by a dearth of computational power, the theory of random-biased nets struggled as far as its few protagonists could take it with their mathematical intuition, and then effectively disappeared.  It really was an idea for a future age, and like many such ideas, it had to do its time in purgatory.”

When I read this paragraph, I was reminded immediately of Mises.  Especially by the use of the word “purgatory.”  We all know that Mises spent his life in academic purgatory, and we all believe that he was way before his time.  But maybe Mises was also way before his time because the tools that he needed weren’t invented yet.

Mises was right to reject statistical economics – use of statistics automatically reveals that the user has no idea what is actually going on.  A quote from Human Action, section 5 of his “Prices” chapter: “The first variety is represented by the statisticians who aim at discovering economic laws from the study of economic experience.  They aim to transform economics into a quantitative science.  Their program is condensed in the motto of the Econometric Society: Science is measurement.  The fundamental error implied in this reasoning has been shown above …”

But while mathematical, Watts’s work is not statistical, and he includes almost no equations in his book.  Watts is using logic and computational horsepower to find new structure in networks.  He is studying dynamic networks to discover new theories behind their behavior.  One wonders how much further Mises could have gone if he had had a supercomputer in his day.

Continuing my thoughts about social graphs, I thought that I would list some assumptions that (the social graph of) my brain currently makes on behalf of social graphs.  If they are written down they can at least be refuted.  So I currently assume that the growth of social graphs will:

1. Grow economies, as both producers and consumers of similar goods and services can more easily find each other

2. Improve education, as a person’s personal graph starts to grow beyond his or her own parent, teacher, boss, pastor, and news anchor

3. Improve government, as formerly-secret political connections come to light

4. Improve diversity, as persons now have a platform and connections to raise awareness of their own thoughts 

5. Lessen violence, as social graphs stretch the boundaries of our own monkeyspheres

6. Increase the number of personalized products and services (as a result of points 1 and 4 above) 

7. Increase the information about markets as consumers compare notes on specific products and services 

And the list goes on. 

Employing a bit of inductive reasoning, one sees that the above list is all about transparency.  In my mind, social graphs increase the transparency of economies, governments, knowledge, products, and even people.  Connections made by social graphs tend to remove the blinders of propaganda, ignorance, dogma, racism, nationalism, and so forth.

An amazing story of connection comes from Paul Rusesabagina, the hotel manager of the Mille Collines during the Rwandan genocide.  Early in the genocide, as Paul was driving his friends and neighbors to hide in the Hotel Diplomat, an army officer ordered him to get out of his car and shoot his friends and neighbors that were with him.  Paul started to use his amazing gifts of persuasion to try to avoid obeying the order, when he discovered that the officer could not look him in the eye!  Paul took this as a sign that he could actually win the argument, and thus save all the lives in his car.  He proceeded to use this new-found knowledge to save hundreds of Rwandan refugees during the genocide. 

And basically Paul’s new-found knowledge was this: looking people in the eye forces them to build a connection to you, forces them to include you in their monkeysphere.  And that connection forces them to have to become a psychopath if they then decide to kill you.  So every time Paul was confronted, he made sure to stand eye-to-eye with his assailant, by getting out of his car or up from his chair, or whatever was necessary.

So I posit that the growth of connections, and even the growth of visualization of those connections, builds the transparency needed to remove the blinders that have helped wars, violence, and coercion to thrive.  When the propaganda of our federal government demonizes Islam, only the transparency of social graphs will shed light on the actual circumstances.  When the socialism of our federal government enslaves the masses, only the transparency of social graphs will show each person as the complete human beings that they are.

(I pause to wonder if the larger social graphs of the younger generation enlarge that generation’s monkeyspheres, and thus logically make them less susceptible to the collectivist lie, and thus more libertarian.) 

Now the above statements assume that current social graphs will avoid balkanization caused by the former barriers of nation, race, and dogma.  But since the power of networks is realized only by their joining together (of not only people but also other networks), any graph that does not grow to some critical mass will wither and die.  And the measure of that critical mass will only grow as social graphs compete with each other.

Possible future blog topics from the above: social graphs and personalized products and services, social graphs and libertarianism, measuring the critical mass of a social graph, monkeyspheres, visualization, transparency and privacy, etc.

IrishOutlaw asked me to expand on the social graphs comments that I made in my previous entry; this is my first attempt of (maybe) several, as the topic is rich. 

Graph topologies have nodes and edges.  What is interesting about any graph is how many nodes it has, how many edges it has, how many edges each node has, which nodes are connected, and, for social graphs, how strong those connections are.  Unfortunately, in my previous entry I used the somewhat-misleading words “central” and periphery” to describe nodes; those terms usually imply (low-dimensional) geometric concepts.  In any interesting (i.e., complex) social graph, one may not necessarily be able even to identify where a “center” or a “periphery” lies.  (Just like our (expanding) universe.)

So my question about the importance of being a “central” or “peripheral” node in a social graph may be better expressed in terms of edge count, or edge strength, for nodes.  Thus my previous entry can be translated to imply that the higher a node’s edge count is, the more fit it is.  The longer the node will “survive” (whatever survival means for a social graph).

I received a slightly different perspective from an unexpected source this week: Ben Goertzel.  Ben is one of the most intelligent people that I have ever interacted with, and he posted a note on the SL4 reflector this week in reference to his blog.  I had never read his blog before, so I was amazed to find that he was writing about social graphs and “being a neuron” last fall.

Ben is somewhat horrified to find that the messages passed by those with the most social graph connections (teenagers that constantly use IM, MySpace, Facebook, etc.) seem to be the most trivial: who’s dating whom, who’s cute, etc.  He decries the fact that as social graphs merge into some type of “global brain,” the result is looking a lot like a bunch of morons in the middle.

So maybe those who are the most connected have the least value to add to the graph’s content, while those who are the least connected may have the most to add?  (The “Emily Dickinson” hypothesis, anyone?)

But is the value of the content the supreme measure of fitness?  When we consider communications across outer space, or across a computer chip, there seems to be much overhead, much protocol involved.  Some space communications contain many more correction bits than data bits, for example.  And on a computer chip, the clock keeps beating even if the chip is idle.  So maybe having a heartbeat of communications is extremely important to the social graph, no matter how trivial the content.

And in a market of goods and services, “middle” men are extremely important.  The best sales people constantly spend “face time” with their customers, whether on actual sales calls or not.  So while sales agents may not create much content, their mere communications capabilities are extremely important.  At least until they can be replaced.

Which brings me back to the survival idea: what happens when Google, Digg, MySpace, FaceBook, even artificial intelligences, replace (the functions of) “middle” men?  Will they ever?

A week ago, I was under the impression that smarter and smarter tools would creep in from the “edges” of the graph first, replacing the “peripheral” nodes with the fewest connections, but now I’m not so sure.  Maybe the immediacy and bandwidth of modern communications will render the “middle” superfluous first.  Of course, the answer probably lies somewhere in the “middle” (sorry!), as our global economy creates ever smarter machines, ever greater accumulations of capital, for many possible uses.

In my last post, I mentioned Robert Sapolsky’s response to The Edge Annual Question – 2008.  As I continued to read the other responses to the question, I came across Tim O’Reilly’s response, which is about the importance of social graphs.  While having heard about MySpace and Facebook, I had never given much thought to social graphs.  So I googled “social graphs” and found Brad Fitzpatrick’s comments at the top of the search results.  Fascinating stuff.

The day after I read those web pages, I was reading Schumpeter’s 1942 essay about Marx called “The Marxian Doctrine.”  Schumpeter boils down Marx’s Economic Interpretation of History to only two points, the first of which is: “The forms or conditions of production are the fundamental determinant of social structures.”  So if MySpace, Facebook, or even the SixApart effort starts providing a much more useful fundamental determinant of social structures (shared interest rather than shared occupation), then Marx has another thought coming.  Especially as on-line social communities continue to blur the “line” between bourgeoisie and proletariat  The social graph has a much different (and much more subtle) topology than Marx’s bright line.  And without Marx’s line, there goes the class struggle as well.

The social graph idea raises a thousand questions: How does social graph technology affect governments? economics? media? politics? political campaigns?  Does social graph technology reveal special interest groups?

When social graphs are applied to media, do the nodes become information filters and the edges information flows?  If so, how does one become a major, central node?  Trustworthiness?  Volume?  Filtering for what is “important” (to other nodes) out of the information deluge?  Graph nodes start to look like the birth, growth, and death of brain neurons.  Or websites like Google.

What happens when robots become functional nodes in the social graph?  Even central to it? 

And is it important to be a central node, instead of on the periphery?  Is the periphery where the frontier is, where “start-ups” get built?  Is it less risky to be a central node?

And so we come full circle to Sapolsky’s response – the more-connected primates are the healthier primates; so are the more central nodes the most fit?

I haven’t blogged in a while, because I just spent a couple (very busy) weeks in NH with Operation Live Free or Die.  It was amazing to meet so many people so very dedicated to liberty as our founding fathers knew it.

When I returned from NH, I found this great site linked from a slashdot article: The Edge annual question – 2008.  One of the responses to the year’s question (“What have you changed your mind about?  Why?”) is from Robert Sapolsky, a neuroscientist at Stanford.  His response includes the following words:

“The
other change concerned my life as a primatologist, where
I have been studying male baboons in East Africa. This
also came in the early 90’s. I study what social behavior
has to do with health, and my shtick always was that if
you want to know which baboons are going to be festering
with stress-related disease, look at the low-ranking ones.  Rank
is physiological destiny, and if you have a choice in the
matter, you want to win some critical fights and become a
dominant male, because you’ll be healthier. And my change
of mind involved two pieces.

The
first was realizing, from my own data and that of others,
that being dominant has far less to do with winning fights
than with social intelligence and impulse control. The
other was realizing that while health has something to
do with social rank, it has far more to do with personality
and social affiliation — if you want to
be a healthy baboon, don’t be a socially isolated one.“

This quote reminded me of words about division of labor and human society from Mises’s Human Action, page 146: “Every step by which an individual substitutes concerted action for isolated action results in an immediate and recognizable improvement in his conditions.  The advantages derived from peaceful cooperation and division of labor are universal.  They immediately benefit every generation, and not only later descendants.  For what the individual must sacrifice for the sake of society he is amply compensated by greater advantages.  His sacrifice is only apparent and temporary; he foregoes a smaller gain in order to reap a greater one later.  No reasonable being can fail to see his obvious fact.  When social cooperation is intensified by enlarging the field in which there is division of labor or when legal protection and the safeguarding of peace are strengthened, the incentive is the desire of all those concerned to improve their conditions.”

Division of labor works.  Peace works.  It’s so cool to see, again and again, that the a priori reasoning of Mises predicts what the empiricist will see.