This is not a neutral system.
Consider personal technology. It is designed to be addictive, to prevent you looking away. It’s called the attention economy for a reason.
As Canadian communications guru Marshall McLuhan observed, “a medium is not something neutral — it does something to people.”
Next time you are on a train, look around. See how many people are on their phones or laptops. Pace Zuckerberg, we’re already in a hybrid reality, consuming infotainment relentlessly optimised to our personal preferences by a Machine that often knows us better than we know ourselves. We are all creating and consuming alternative realities reflexively engineered by and for us. China’s TikTok is cyberspace’s answer to crystal meth, not to mention a data-harvesting and manipulation engine extraordinaire for the platform’s biggest influencer: the CCP. In the US, that means it’s on borrowed time.
The epochal impact of smartphones and social media on our attention spans, ability to concentrate, mental health and political discourse are now widely documented if still underappreciated.
But it’s not just about information silos. For example, engines transform our relationship with distance, reordering society around them as artificial light does with darkness. ChatGPT, the artificial intelligence engine launched in 2022, is already reshaping the world around it, from school homework to the ‘knowledge economy’.
The Machine is an unstoppable flywheel, driving Modernity’s state of perpetual revolution: the more the Machine grows and disrupts, the more we depend on it. The Machine has given us access to more instrumental power, information, memory and processing capacity than ever before.
And yet, despite unprecedented technical capacity to identify and join dots, we’ve just experienced a succession of huge shocks, with many people surprised not just at their occurrence but also at their interconnection. Sophisticated models – used by central bankers, investors and more – have been blindsided by reality’s revenge.
BLINDED BY DATA
But perhaps the world is blind not despite the tsunami of data and sophisticated models but partly because of them. The Machine offers power, but also false comfort and illusory certainty in an inherently uncertain world. Look no further than financial models of the way the world is supposed to work. During the credit crunch, Goldman Sachs CFO David Viniar tried to explain the implosion of flagship hedge funds with the claim that “we were seeing things that were 25-standard deviation moves, several days in a row.” A single 25-standard deviation move should have happened less than once since the dawn of the known universe.23 Outlandish by any measure. But several days in a row? Truly magical. Viniar’s comment epitomised the naïve over-reliance on models which turned out to be junk. As the old saying goes: “In theory, theory and practice are the same. In practice, they are not.” Investors need to remember that, in theory, the models and reality are the same. In reality, they are not.
Deluging data, abstract models inspiring undue confidence, technology which deliberately narrows our attention – all make it harder to keep focused on the big picture, the future and to manage uncertainty.
But the influences of machine brains are most potent in their interaction with their human equivalents.
HEMISPHERES OF INFLUENCE
Human brains are split into two hemispheres that are asymmetric in all dimensions. This lateral asymmetry exists widely in the animal kingdom. It also runs deep into our evolutionary past: the earliest known example is nematostella vectensis, a sea anemone living over 700 million years ago.24
Why? It’s complex and not fully understood. But all animals need to do two things: eat; and avoid being eaten. These two activities require radically different approaches to the world.
In The Master and His Emissary, neuropsychiatrist Iain McGilchrist explored how “the left hemisphere [LH] yields narrow, focused attention, mainly for the purpose of getting and feeding. The right hemisphere [RH] yields a broad, vigilant attention, the purpose of which appears to be awareness of signals from the surroundings, especially of other creatures, who are potential predators or potential mates, foes or friends.”25
“All animals need to do two things: eat; and avoid being eaten.”
A deeper exploration of the hemispherical differences is worthwhile, given their relevance for investors. In The Matter with Things, McGilchrist continues: “The LH deals preferentially with detail. The local, what is central and in the foreground, and easily grasped; the RH with the whole picture, including the periphery of background, and all that is not immediately graspable… The RH is on the lookout for, better at detecting and dealing with, whatever is new; the LH with whatever is familiar… The LH aims to narrow things down to certainty, while the RH opens them up to possibility... The LH tends to see things as isolated, discrete, fragmentary, where the RH tends to see the whole.”
23 Dowd, Cotter, Humphrey and Woods (2008), How unlucky is 25-sigma?
24 McGilchrist (2021), The Matter with Things
25 McGilchrist (2019 edition), The Master and His Emissary