Monthly Archives: February 2016

Capitalism vs. Robots – which is more terrifying?

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In an article that recently resurfaced on Reddit, Famed Astrophysicists Stephen Hawking argues that we should fear capitalism more than robots. I think the timing of this is somewhat interesting, being an election cycle and the two populist candidates are opposites in many regards especially in terms of Democratic Socialism vs. Crony Capitalism (Sanders v Trump). In the broader context of emerging technology this is important as well though, as many other technology leaders have expressed fear of AI, such as Elon Musk, while other leaders are running full steam ahead towards more and more automation.

Hawking isn’t the only person thinking about the economy and technology though. Warren Buffet just released Berkshire Hathaway’s annual report with some pretty stark warnings about the future of capitalism in action at the corporate level. Indicating that innovation does have a darkside. While he’s speaking as a manager, there are economists looking into this and in the book Second Machine age, the authors argue that the best is still to come, because man and machine work best together, not separately.

Unfortunately, this will only push the ceiling up on skills required for jobs, rather than expanding opportunities. A perfect example of this will be Uber. Being an Uber driver isn’t a difficult job because of skill requirements, but because it’s a boring job that is relatively tiring. Uber has been pushing down their prices over a multi-month/year process which will continue through the introduction of “Autonomous” Cars, or RobotCars. At this time a large number of low skilled workers will find themselves out of a job, including people I know and probably people you know. This has been Uber’s plan for a long time as they understand that people are the biggest costs and risk for the company. Especially in light of the mass shooting in Michigan.

Uber isn’t the only major company looking to replace workers like this. In fact, it’s likely that a lot of White Collar jobs are going to go this route as well, including in industries that notoriously relied on people that then made unethical decisions, such as the financial industry.  We’ve heard of High Frequency Trading, which is basically a set of algorithms to make decisions on buying and selling stocks based on microtrends. However, this is going to continue to expand into newer areas. It’s been well remarked that most brokers are no better than a coin flip (Black Swan; Drunkards Walk; Thinking, Fast and Slow; all reference this) so it is highly likely that algorithms will do better than people in picking winners and losers on the stock market. It’s also likely that those algorithms will have access to more data faster than any person could eve analyze and act upon.

This interaction between capitalism and automation creates huge risks for the economy. A few years ago, there was a “flash crash” which was basically caused by those HFT I mentioned above. As more and more portions of the financial industry come under the purview of robo-traders, these sorts of events are going to be more likely. These institutions still have pushed most of the risk to the public, while retaining the bulk of the profits from these robots.

As these trends continue across industries, the local optimization of companies to automate and create more robots is going to gradually push people out of jobs at a more and more rapid pace than new categories of jobs can be opened. I think it likely that will be likely that we’ll see more companies going the route of Uber. Using tools like Amazon’s Mechanical Turk to get processes started before they invest effort and energy into automating processes. Once they are shown to be successful, the effort to remove the human element will continually increase until those workers are out of a job. What we will eventually see is a white collar migratory worker going from one type of tech job to another only to be replaced by automation in the long run.

The impact to the economy in the long run and the human condition in the short term will be catastrophic as our current institutions are not designed to handle this sort of change in labor type. The incentives for this behavior has been in place for decades and have been pushing bad actors to be worse, such as the Turing Pharmaceuticals’ CEO price gouging dying patients, because the market could support it.

Continual Computing Innovation

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Several years ago, I wrote a few blogs about where I felt that the future of computing is heading. The main premise focused on high speed internet, essentially a mesh network with the speed of Google fiber. I feel pretty good at some of the things I predicted have come true, like the personal cloud in some form or another. The other key component that is slowly starting to come true is the phone that you can plug in and use as a computer. HP announced another version of this at the Mobile World Congress to pretty bad press reports. I’m not convinced I agree with TechCrunch’s prognosis, but I also don’t plan to run out and buy one of these phones. I believe that for HP’s product to be successful it really needs to build on the Surface Book. A phone, even a large phone, is nice for some applications, but definitely won’t have enough power for other applications. Especially graphically demanding applications. I’m sure that we’re getting to the point that tablets are getting to be laptop replacements, in the right form factor. I don’t think phones are there yet. What needs to happen, is that the dock for the HP V3 needs to have the ability to enhance the performance of the phone. Furthermore, the switching between docked and undocked needs to be seamless to the point the user doesn’t suffer major slow downs in opening applications that are expected to be used in phone mode (texting, email, etc…). I think we’re finally getting to the point where we’re going to see more and more of these products.

Another more interesting advance in cell phones is the LG G5, which has the ability to add new hardware components, after market. Right now the portion that comes off, removes the battery, but I have a feeling there will be an aftermarket version that will change how that works. I believe that this phone has some serious potential to have an attachment that docks similarly to the HP V3, but with the ability to increase performance of the phone. This is going to be a big deal as more and more people are looking into turning Android into a successful desktop operating system (or maybe laptop operating system). I can imagine a monitor that has the capability to dock with a phone of one kind or another will be developed to further support this ecosystem. It would be easiest to create a dock with an USB-C adapter based on the amount of information and that these are already being used to allow for Graphics Amplification.

I think over the next few years the innovations around the blurring of smart phones with these applications is going to increase. We’ve seen it to some degree with Smart TVs, albeit mostly unsuccessfully compared to set top boxes like Apple TV and Roku. However, with the way phones plow through batteries and the continually evolving use cases of smart phones and computers, this convergence is going to continue and within the next 3-5 years we’ll have at least one company offering a suite of products that is all inclusive to the smartphone as a replacement for computer. Especially, if we’re able to get unlimited 5G on said phone (5G speeds are expected to be in the range of Fiber).

Democracy, Corrupted

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Several years ago I read a great book called Republic, Lost by Lawrence Lessig. Wrote a blog about it back when Occupy Wall Street was a thing. Lessig has since ran for President and subsequently dropped out of this year’s race, but I think the points in his book are a salient now as ever. His platform was to eliminate corruption government by changing campaign finance laws. Of the remaining candidates, I believe Bernie is the only one that has portion’s of Lessig’s platform in his. As I mentioned in my blog a few days ago, money influences people even when they don’t believe that it does. In fact, simply having a conversations with someone can either normalize or prime a certain behavior. For example, a lobbyist may call from the cable industry to discuss some topic that’s going to be up for vote in some time, they also mention donating to the next election cycle. That same day an unrelated bill may be up for vote that tangentially impacts the cable industry, because of this priming the politician will be more sympathetic to the cable industry than they may have been otherwise. In some cases this type of priming or normalization can result in some pretty disastrous policies for the American people.

This is a horrible problem caused by us vs. them mentality of current politics. It’s also caused by the need to raise money. The ability to disenfranchise voters is powerful, because it robs them of their voice and replaces their voice with a special interest voice. These voters aren’t being disenfranchised for no reason. This is a systematic effort to eliminate the influence of a group of minorities that would push for dramatic changes in the criminal justice system. This impacts a large number of groups, private prison companies, law enforcement, lawyers, etc. As the Pennsylvania Republican points out at the end of the segment, this voice has serious impact on the direction a state can go in a general election thus impacting policy.

All of the other things I write about are the result of policy, which fundamentally comes from who is in office. When elected officials abuse their position to prevent other people, who I might not agree with, from voting our Democracy is corrupt. It is important to note that the actions described in the video above, while likely coordinated by the RNC, happens at the state and city levels. These are areas that people, myself included, largely ignore when thinking of voting. With so much focus on the national elections, these smaller roles largely don’t seem to matter to voters. These policies impact us as much, or in some cases more, than national polices. These are the policies that prevent cities from deploying their own broadband or the lead to the militarization of police departments in cities like Ferguson.

Lessig started a group called Mayday.us which highlights candidates, mostly at the national level, that are working for eliminating corruption in government. I supported them last year and plan to do so again this year. I also believe it is time for me to get more actively involved in this and other movements to address the fundamental corruption issues in government. This is truly the only way to level the playing field so that the best ideas win out rather than the biggest budget.

Government Policy and Technology Innovation

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In a way that mirrors yesterday’s court ruling, the FCC announce they were going to investigate and likely force serious changes in the world of set top boxes. The FCC, at one point, forced and supported the cable industry in controlling the types of set top boxes (Set top boxes are cable boxes – Roku and AppleTV are cableless competitors) available to consumers. Since then, we’ve suffered with mediocre and extremely expensive boxes. Boxes that cost $16/month and over time you end up paying for a box 10 times over. The gist of this issue is whether or not to allow companies to make “soft” cable cards. Right now, if you want to decode any video from a coax cable from Comcast, you must have a physical card to do the decoding. There’s nothing preventing this from being accomplished entirely using software once you get the signal into the box and that’s what this is trying to encourage.

Granted, this has taken a while for the FCC to wake up and look at the competitive landscape and see that this isn’t in the public interest. Defining exactly what is in the public interest is a difficult because everyone sees this in a different light. However, it’s pretty obvious that something that you end up paying $1,920 over span of ten years isn’t in the public interest. The competition, Roku and AppleTV, each cost between 100-200 one time and you can use it until it dies which will probably be something like 10 years. I’ve had my Roku HD for 5 years now and it still works great. It would make perfect sense for me to buy a version, assuming I had cable at all, that would allow me to watch cable through it. Everything all in one place.

This is the type of regulation that government should be celebrated for encouraging. Granted they screwed it up to begin with and they are only righting a wrong now, but they’re on the right path. Regulation like Net Neutrality is a similar decision that can spur innovation. Looking at T-Mobile’s binge on plan, you can see why we need this. If I’m a small streaming company or, ya know, YouTube, I look at this platform and see how it’s slanted against me and limits what I’m capable of delivering on T-Mobile’s network.

in the case of the FBI and forcing technology companies to change their technology to reduce security, it’s nice to see an organization that’s willing to at least consider improving opportunities for innovators. Sure it may look like picking winners and losers – but when most policy is driven by current winners picking them to lose sure looks more like balancing the playing field to me.

Privacy, Government, and Business

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This week there were two big moments for privacy. First, was a ruling by a court that Apple had to unlock in some manner, call it decrypt or creating a backdoor into this specific phone. Second, was the fact that Apple, and now Google, has given the state a big middle finger saying “No!” These are important because of the gravity of both of these. The FBI is using “The All Writs Act” something from the 18th century and definitely not written to support dealing with difficult technological issues on technology that would appear to be magic to the author’s of the act. This is definitely stretching this law to its limits and likely beyond what is realistic, but it sets a precedence which is dangerous. The second part is important as both of these companies have been working with the government to provide data to them in the past.

While both of these companies are standing up to the government is great, it’s not enough. With a limited number of powerful players, it’s only a matter of time before they lose to the government or be threatened in some way that will require them to play ball with the government. On the other hand, smaller companies won’t have the money to fight the government, so even if you want to support a smaller company with privacy as its core values, there is no guarantee that they will be able to follow through. Furthermore, if the government forces the company to re-write its operating system, like Apple effectively has to do, the company might go bankrupt. With a precedence set by the Apple decision, a small phone company like Silent Circle and their Blackphone, would be forced to capitulate unless they were able to show that this was unduly burdensome.

The other issues with this case is that businesses are only fighting for what is “right” here because it will help them improve their bottom line. Of course, they are also fighting for their own personal privacy as an employee of the company and consumer of its products, but the goal is to improve profitability. Across the world it has been shown that privacy and protection from agencies like the NSA (US) and GCHQ (UK) is something that people are willing to pay for. Apple learned this from Blackberry during the Arab Spring – they emulated the encryption of the Blackberry Messenger with their iMessage application. This help transition some of the last hold-outs to Apple and eventually spurred other similar apps.

I believe it is likely that the Electric Frontier Foundation will be a strong advocate for Apple, so if you want to support Apple in their battle with the government I recommend donating to the EFF, especially if you don’t support Apple for its other business practices. I know I will.