Tags: finance

In his talk at the Lift conference last year Kevin Slavin talks about the emergent patterns in trading algorithms, the bots that buy and sell with one another occasionally resulting in events beyond our comprehension. It’s a great, slightly dark talk and I highly recommend you watch the video.

This is the same territory that Daniel Suarez explored in his book Daemon. The book is (science) fiction but as Suarez explains in his Long Now seminar, the reality is that much of our day to day lives is already governed by algorithms. In fact, the more important the question—e.g. “Will my mortgage be approved?”—the more likely that the decision will not be made by a human being.

Kevin Slavin mentions that financial algorithms are operating at such a high rate that the speed of light can make a difference to a company’s fortunes, hence the increase in real-estate prices close to network hubs. Now a new paper entitled Relativistic Statistical Arbitrage by Alexander Wissner-Gross and Cameron Freer has gone one further in mapping out “optimal intermediate locations between trading centers,” based on the Earth’s geometry and the speed of light.

In his novel Accelerando, Charles Stross charts the evolution of both humans and algorithms before, during and after a technological singularity.

The 2020s:

A marginally intelligent voicemail virus masquerading as an IRS auditor has caused havoc throughout America, garnishing an estimated eighty billion dollars in confiscatory tax withholdings into a numbered Swiss bank account. A different virus is busy hijacking people’s bank accounts, sending ten percent of their assets to the previous victim, then mailing itself to everyone in the current mark’s address book: a self-propelled pyramid scheme in action. Oddly, nobody is complaining much.

The 2040s:

High in orbit around Amalthea, complex financial instruments breed and conjugate. Developed for the express purpose of facilitating trade with the alien intelligences believed to have been detected eight years earlier by SETI, they function equally well as fiscal gatekeepers for space colonies.

The 2060s:

The damnfool human species has finally succeeded in making itself obsolete. The proximate cause of its displacement from the pinnacle of creation (or the pinnacle of teleological self-congratulation, depending on your stance on evolutionary biology) is an attack of self-aware corporations. The phrase “smart money” has taken on a whole new meaning, for the collision between international business law and neurocomputing technology has given rise to a whole new family of species—fast-moving corporate carnivores in the Net.