Technological pessimism

[Kaa]

An interesting conversation, from http://marginalrevolution.com/margin...v-schmidt.html :

Peter Thiel, taking the pessimistic view, and Eric Schmidt of Google, taking the optimistic view, both made good points in their debate over technology but Thiel had the knockout punch:

PETER THIEL: …Google is a great company. It has 30,000 people, or 20,000, whatever the number is. They have pretty safe jobs. On the other hand, Google also has 30, 40, 50 billion in cash. It has no idea how to invest that money in technology effectively. So, it prefers getting zero percent interest from Mr. Bernanke, effectively the cash sort of gets burned away over time through inflation, because there are no ideas that Google has how to spend money.

ERIC SCHMIDT: [talks about globalization]

The moderator repeats Thiel’s point:

ADAM LASHINSKY: You have $50 billion at Google, why don’t you spend it on doing more in tech, or are you out of ideas? And I think Google does more than most companies. You’re trying to do things with self-driving cars and supposedly with asteroid mining, although maybe that’s just part of the propaganda ministry. And you’re doing more than Microsoft, or Apple, or a lot of these other companies. Amazon is the only one, in my mind, of the big tech companies that’s actually reinvesting all its money, that has enough of a vision of the future that they’re actually able to reinvest all their profits.
ERIC SCHMIDT: They make less profit than Google does.
PETER THIEL: But, if we’re living in an accelerating technological world, and you have zero percent interest rates in the background, you should be able to invest all of your money in things that will return it many times over, and the fact that you’re out of ideas, maybe it’s a political problem, the government has outlawed things. But, it still is a problem.
ADAM LASHINSKY: I’m going to go to the audience very soon, but I want you to have the opportunity to address your quality of investments, Eric.
ERIC SCHMIDT: I think I’ll just let his statement stand.
ADAM LASHINSKY: You don’t want to address the cash horde that your company does not have the creativity to spend, to invest?
ERIC SCHMIDT: What you discover in running these companies is that there are limits that are not cash. There are limits of recruiting, limits of real estate, regulatory limits as Peter points out. There are many, many such limits. And anything that we can do to reduce those limits is a good idea.
PETER THIEL: But, then the intellectually honest thing to do would be to say that Google is no longer a technology company, that it’s basically ‑‑ it’s a search engine. The search technology was developed a decade ago. It’s a bet that there will be no one else who will come up with a better search technology. So, you invest in Google, because you’re betting against technological innovation in search. And it’s like a bank that generates enormous cash flows every year, but you can’t issue a dividend, because the day you take that $30 billion and send it back to people you’re admitting that you’re no longer a technology company. That’s why Microsoft can’t return its money. That’s why all these companies are building up hordes of cash, because they don’t know what to do with it, but they don’t want to admit they’re no longer tech companies.
ADAM LASHINSKY: Briefly, and then we’re going to go to the audience.
ERIC SCHMIDT: So, the brief rebuttal is, Chrome is now the number one browser in the world.

In my mind, the revealed preference of our technological leaders is the best and most depressing argument for the great stagnation.

Kaa

[Norman Bernstein]

Very interesting.... and there's a great deal, in this brief C&P, that I think I'm in agreement with (I'll read more later, on the boat).

I definitely agree with the sentiment that lack of ideas is a huge problem for technology today. We seem to be good at coming up with big transformative ideas that relatively quickly saturate the market (i.e., smart phones, tablet computing), but then 'stall' while looking for the next transformative technology.... and you can't buy the big ideas with money. Another problem: the baseline complexity of technology has gotten so high, it has become a bar to innovation; it isn't the same as it was in the late 70's/early 80's, when transformative products like the PC could be built from off-the-shelf technology.... nowadays, it takes a cast of thousands, and a bankload of money, whereas 30 years ago, a nerd with a soldering iron in his basement could pull it off.

Regarding 'The Great Stagnation', I just one-clicked it from amazon, for $3.99... and will read it over the weekend.

[Gerarddm]

Nanotech.
Hydrogen fuel.
Space.

The next big three.

[B_B]

What's apparent is that the technology and the commercialization thereof has matured. Computers have been around since the '50's, PC's since the '70's, and while what we've experienced in the last ten years is phenomenal, it doesn't, in my mind, come close to equaling what happened in, say, flight between the Wright Bro.s and supersonic passenger jets - and it's taken longer despite what we say about computer tech.

To suggest that things are now becoming harder in today's high tech only makes sense, history repeats - and will be that way until a new 'high tech' (nano tech possibly?) becomes commercially viable, and we'll see a huge boom there, that tech will mature, and so on. It's life.

[Flying Orca]

Although this may sound needlessly pessimistic, I think the next wave of massive innovation is going to have more to do with working around shortages of nonrenewable natural resources than with sexy new high tech per se.

[Kaa]

I'll throw in one more quote, don't remember who said it: "The brightest minds of our generation are busy trying to come up with ways to make people click on ads" :-/

Kaa

[B_B]

I'll throw in one more quote, don't remember who said it: "The brightest minds of our generation are busy trying to come up with ways to make people click on ads" :-/

Kaa

One of Warren Buffet's biggest concerns (I don't recall where he got it from) is that the brightest minds of our generation are on Wall Street trying to find ways to game the system.

But, yeah, it's the way things are - money is our only currency at the moment.

[switters]

Although this may sound needlessly pessimistic, I think the next wave of massive innovation is going to have more to do with working around shortages of nonrenewable natural resources than with sexy new high tech per se.

yup, I've watched micro hydro which has been around for 200 years make some big leaps in the last 10. I think power storage in the form of batteries is going to be the next big breakthrough and there has been a lot of advancement in that field recently. hydrogen fuel cells may never get going due to the material needed for electron exchange, but who knows?

[LeeG]

In my mind, the revealed preference of our technological leaders is the best and most depressing argument for the great stagnation.

Kaa

a quick look at the Amazon synopsis says this:
"Yet during the last forty years, that low-hanging fruit started disappearing and we started pretending it was still there. We have failed to recognize that we are at a technological plateau and the trees are barer than we would like to think. That’s it. That is what has gone wrong.The problem won’t be solved overnight, but there are reasons to be optimistic. We simply have to recognize the underlying causes of our past prosperity—low hanging fruit—and how we will come upon more of it."

There's something fundamentally wrong with the metaphor for low hanging fruit that doesn't differentiate between resources and "technology".
The low hanging fruit that helped our country was a vast inheritance of oil, when our consumption exceeded our production the rest of the worlds "low hanging fruit" was available. That isn't the case with regards to oil. For this to not be recognized is a major flaw in describing the causes of stagnation and way out of it, if possible.

[purri]

+1 for nanotechnology.

[Norman Bernstein]

Great topic.... Unfortunately, I'll be away from a net connection until Monday, but if anyone is still interested then, I'll be eager to discuss!

[2MeterTroll]

use your worthless search engine and see what google has cooking. the only one not in the investment portfolio is hydrogen fuel cells cause anyone with half a brain gets that they are a lost cause. space and nano-tech maybe some bio engineering on the side. folks dont seem to track the advances we are making in the bio fields, the cost is low and the returns are huge in every corner including computers.
not to mention Nano fits hand and glove with it.

As a sailor all i am concerned with is space; our next ocean will shine with the suns of a billion worlds.

Nanotech.
Hydrogen fuel.
Space.

The next big three.

[Flying Orca]

As a sailor all i am concerned with is space; our next ocean will shine with the suns of a billion worlds.

Yes, if we manage to bootstrap ourselves to a sustainable system for getting out of the gravity well on the required scale before we run out of the necessary consumables. I used to be quite optimistic that we would do so, but we've wasted 40 years.

[Paul Pless]

maybe eric was just having an off day. . .

[Kaa]

And technological optimism -- what Eric Schmidt *should* have said is:

The reason we're not investing more in new technology isn't that we're out of ideas. It's that we're out of ideas that we think will make money. Why are we out of ideas that make money? Because millions of people keep giving away incredible innovations to everyone for free!

Challenge for the audience: Think of something you want. Now use Google to locate whoever's already providing it for free. I could do this all day.

(http://econlog.econlib.org/archives/...schmidt_a.html)

Kaa

[Paul Pless]

Challenge for the audience: Think of something you want. Now use Google to locate whoever's already providing it for free. I could do this all day.

I'm not finding a whole lot of free craft beer here in Michigan. . .

[2MeterTroll]

we will have to boot strap it but i am thinking that we can do so somewhat cheaply with our current tech. I agree we have waisted the time however i think some folks are now taking things into there own hands and we are on the cusp if seeing some real progress.

Yes, if we manage to bootstrap ourselves to a sustainable system for getting out of the gravity well on the required scale before we run out of the necessary consumables. I used to be quite optimistic that we would do so, but we've wasted 40 years.

[B_B]

I'm not finding a whole lot of free craft beer here in Michigan. . .

The idea was to find things that will make them money - beer brewing has to be one of the lower margin endeavours out there.

But Kaa's point is well articulated. There's millions of good ideas which no-one has yet found a way to make any money at (putting newspapers on-line for example). Google would be negligent to their shareholders, and their customers, if they invested in every good idea.

[Kaa]

I'm not finding a whole lot of free craft beer here in Michigan. . .

That's what the social networks are for :-D

Kaa

[Paul Pless]

But Kaa's point is well articulated.

To be fair, most of Kaa's points on this forum are 'well articulated'. However, articulation doesn't make them right or worthy.

[Kaa]

But Kaa's point is well articulated.

It's not my point -- I'm quoting a guy, see the link :-)

Kaa

[Old Dryfoot]

Something that goes hand in hand with the commercialization of space is AI in robotic form. Not only does it offer possibles re: space bound resources but the possibilities for terrestrial application are immense.

I recently saw a demonstration of a bipedal robot that had a rudimentary AI which allowed it to navigate an otherwise hostile terrain independent of an operator. The ability for a machine intelligence to interact with the physical world unattended has limitless monetary potential.

[Paul Pless]

Skynet became self aware August 29th, 1997. . .

[Chip-skiff]

Refreshingly thoughtful thread— thanks, Kaa.

My technological pessimism take a different tack. We seem to be creating ever-more-intricate networks (e.g. the internet) that depend on a stable infrastructure. I think that there will be a marked increase in instability and chaos owing to climate change (droughts, fires, floods, storms) and the consequent social and political unrest, that will threaten and disrupt these taken-for-granted infrastructure supports over large areas.

The obsession with making money give birth to more money is creating a mega-bubble. Or if your prefer, a black hole of greed that devours imagination, talent, ingenuity, and other worthy human qualities that might otherwise be devoted to our survival.

[Old Dryfoot]

Yeah... Skynet forgot Asimov's three laws though.

[elf]

It strikes me that Google could do well to invest in securing its energy supply.

[Paul Pless]

It strikes me that Google could do well to invest in securing its energy supply.

It is.

[Kaa]

The ability for a machine intelligence to interact with the physical world unattended has limitless monetary potential.

You're a bit too late to the party




Kaa

[Kaa]

We seem to be creating ever-more-intricate networks (e.g. the internet) that depend on a stable infrastructure.

While I'll agree with your general point (I'd say that we are building systems so complex that they become very fragile), the internet is a bad example. It is, by design, a very resilient network -- much more so than, for example, the telephone network which preceded it.

I think that there will be a marked increase in instability and chaos owing to climate change (droughts, fires, floods, storms) and the consequent social and political unrest

That's the current boogieman that has been VASTLY overrated. Instead of alarmist media try reading academic papers which attempt to estimate the economic impact of global warming (hint: the results might surprise you).

The obsession with making money give birth to more money is creating a mega-bubble. Or if your prefer, a black hole of greed that devours imagination, talent, ingenuity, and other worthy human qualities that might otherwise be devoted to our survival.

I don't see our contemporaries being more obsessed with money than people at other points of human history. Humanity didn't do too badly so far :-) The complaints about preoccupation with money are also traditional, by the way :-D

Kaa

[Kaa]

It strikes me that Google could do well to invest in securing its energy supply.

I don't understand this. If the situation get so bad Google cannot buy on the open market enough energy to run its servers, there is no point in running these servers anyway.

Kaa

[Ted Hoppe]

Good thought provoking thread.

[B_B]

what Eric Schmidt *should* have said is

It's not my point -- I'm quoting a guy, see the link :-)

Kaa

"Eric Schmidt should have said" seems like a point to me! Just because you didn't think of it first doesn't mean it isn't your point...goodness knows I haven't had an original thought in years, doesn't mean I don't make points...

To be fair, most of Kaa's points on this forum are 'well articulated'. However, articulation doesn't make them right or worthy.

So, again, Plessner comes in and nails it.

[Chip-skiff]

That's the current boogieman that has been VASTLY overrated. Instead of alarmist media try reading academic papers which attempt to estimate the economic impact of global warming (hint: the results might surprise you).

I live in the real world, not in selected academic papers. And this is what's going on:



With nonexistent snowpack, extreme drought, and gusty, shifting winds, we had a fire nearby. It burned four power poles, and the electricity went out. That disabled our well pump and the fire sprinkler system I'd installed to protect the house. So we chose to load the small portion of irreplaceable stuff we could, and evacuate.

We were able to return on the fourth day after. Our place didn't burn. What happened to us was not that bad, compared to the circumstances in the third world. But it did have an effect on my thinking.

[Old Dryfoot]

You're a bit too late to the party




Kaa

Technically I think you will find that those are run from a program. Think of IBM's Watson with the ability to interact with objects.

We could construct a robot with the tools and AI to say find gold, drop it into an adit, and would need to do no more than remove the ore periodically. It would be able to determine on it's own where to dig, for how long, and when to move to a new location.

[B_B]

Technically I think you will find that those are run from a program. Think of IBM's Watson with the ability to interact with objects.

We could construct a robot with the tools and AI to say find gold, drop it into an adit, and need would need to do no more than remove ore periodically. It's would be able to determine on it's own where to dig, for how long, and when to move to a new location.

Technically the second robot would be run from a program too.

Channeling Kaa.

[Paul Pless]

So, again, Plessner comes in and nails it.

I want to say that despite Kaa's misuse and misunderstanding of statistics I really enjoy his contributions here. He offers interesting insights and viewpoints, and I learn from him, he makes me think. He's also never an asshole. I'm glad that he's returned to the forum after some time off. . .

[Kaa]

I live in the real world, not in selected academic papers.

Your personal circumstances are just that -- extrapolating from them to the whole world is common, but... perilous.

Also, dumping everything on the global warming's doorstep isn't too defensible either. For example the American West seems to have a long-term dry-wet cycle that's been happening for a long while. The 60s and the 70s were the wet part of the cycle, so people assumed the water will be there always and overbuilt (mostly agriculture). Now we are in the dry part of the cycle, so there is the Great Drought, but it's not a function of global warming. Doesn't stop people from attributing it to global warming anyway :-)

Kaa

[Old Dryfoot]

Technically the second robot would be run from a program too.

Channeling Kaa.

True however the former would interpret commands and execute instructions, the latter would asses it's environment and formulate a plan of action.

[Kaa]

True however the former would interpret commands and execute instructions, the latter would asses it's environment and formulate a plan of action.

That's more or less the same thing. What you're saying is that the programming for the second robot would be more complex than for the first robot.

AI isn't magic. It's just computer code. That's it.

Kaa

[Chip-skiff]

Your personal circumstances are just that -- extrapolating from them to the whole world is common, but... perilous.

Also, dumping everything on the global warming's doorstep isn't too defensible either. For example the American West seems to have a long-term dry-wet cycle that's been happening for a long while. The 60s and the 70s were the wet part of the cycle, so people assumed the water will be there always and overbuilt (mostly agriculture). Now we are in the dry part of the cycle, so there is the Great Drought, but it's not a function of global warming. Doesn't stop people from attributing it to global warming anyway :-)

Kaa

Nor does it stop persons such as yourself, who seem to be arguing points they attribute to others, from discounting what seems to me (both from reading genuine scientific papers, not corporate-sponsored crap) and from longterm observation of our region, to be an unusual variability in conditions. For example, the extreme fire conditions in Colorado, and the resulting fires, were followed by record-breaking rainfall, 6 inches in some areas, and consequent floods and debris flows.

I live in a real place where real things happen.

To sum up, I'm more concerned with actual, physical peril than with the threat to your carefully-crafted right-wing comfort zone.

[Tom Hunter]

@Kaa This is absolutely correct: "Your personal circumstances are just that -- extrapolating from them to the whole world is common, but... perilous." Relying on past data to predict the future can also be perilous. It's true that there is a history of wet dry cycles in the areas currently in a dry cycle. So there is some history of this happening before.

There are also important differences, for example this time the temperatures are higher, and they are high enough to cause significant plant death. Plants that would survive a 1950s drought die in the heat of the 2012 drought. This is adding to the economic cost, because plants lose value when they are dead.

Theil's comments are very interesting. There is an effect of the accounting rules that I see in my work that may be impacting this as well. R&D is an expense and reduces profitability, but acquisition is not accounted as an operating expense so it does not hit the bottom line in the same way. If Google spent $5 billion of that cash horde on R&D every year for the next ten they might produce a wonderful fast growing high earning product, or they might not. They would certainly kill their profitability and thier stockprice.

[Kaa]

To sum up, I'm more concerned with actual, physical peril than with the threat to your carefully-crafted right-wing comfort zone.

Couldn't resist dropping into nastiness, could you? :-)

If you think you live in an area where severe wildfires are likely to be common, you should be concerned about physical peril. But it's quite a distance from there to global disruptions of infrastructure which is where we started.

Kaa

[Kaa]

There is an effect of the accounting rules that I see in my work that may be impacting this as well. R&D is an expense and reduces profitability, but acquisition is not accounted as an operating expense so it does not hit the bottom line in the same way.

Well, acquisition is not pure expense because you acquire an asset, after all. In that sense buying company is no different from buying more machinery -- on your balance sheet you have less cash but more assets. I don't know accounting well enough, but my impression is that you can capitalize the results of (successful) R&D as well. You can certainly add patents and such to your balance sheet as assets. Of course if your R&D didn't produce anything useful... but that's a different problem.

Kaa

[B_B]

... Now we are in the dry part of the cycle, so there is the Great Drought, but it's not a function of global warming...

Your assumption is just that, an assumption. The facts may 'appear' to fit your construct, as they 'appear' to fit another construct.

We will not know for decades, if ever, the full impact of every variable, the weight of every variable, behind various climate changes.

[Old Dryfoot]

That's more or less the same thing. What you're saying is that the programming for the second robot would be more complex than for the first robot.

AI isn't magic. It's just computer code. That's it.

Kaa

Again this is correct, a program is a program. But when that level of complexity broaches cognitive ability, does it still only exist as a program or has it become an intelligence?

[Paul Pless]

There is an effect of the accounting rules that I see in my work that may be impacting this as well.

My entire career (20 years self employed) has been R&D. Usually multi year projects. The accounting becomes really complex both from the corporate standpoint and from my standpoint being the outside firm that companies contract with to perform R&D. As often as I see a reluctance to 'expense' R&D, I see companies that have rules against making or increasing capital expenditures in their R&D departments. This is good for me when this happens. Since they can't 'invest' in themselves, their only outlet to perform R&D is to contract it out to firms like me. This is a pretty widespread phenomenon.

Two primary reasons for this is that it prevents a large company from expanding a bureaucratic middle manager class and two, sometimes its really nice to just 'expense' a large expenditure versus depreciating it over a longer period of time. There are probably other reasons. Most of my research is for consumer products companies. These types of companies are often dominated from an operations standpoint by marketing departments, the rest of the company is often run very lean and in a subservient role to the marketers.

[Kaa]

Again this is correct, a program is a program. But when that level of complexity broaches cognitive ability, does it still only exist as a program or has it become an intelligence?

Ah, the favorite sci-fi topic :-) Nowadays people like to argue that if/when a program reaches the "true intelligence" status it will be able to rapidly bootstrap itself to higher and higher levels of consciousness (aka take over the world). This even is commonly known as The Singularity. At this point it's lights-out for the humans :-D instead of "limitless monetary potential" :-D

Kaa

[Kaa]

Your assumption is just that, an assumption.

Yes, though technically I suppose it's a model, not an assumption.

We will not know for decades, if ever, the full impact of every variable, the weight of every variable, behind various climate changes.

Correct, and so..? This doesn't seem to prevent a large number of the environmentally faithful from screaming loudly about how we need to shut down the hydrocarbon-burning civilization right now and exhale only every other time :-D

Kaa

[Old Dryfoot]

Ah, the favorite sci-fi topic :-) Nowadays people like to argue that if/when a program reaches the "true intelligence" status it will be able to rapidly bootstrap itself to higher and higher levels of consciousness (aka take over the world). This even is commonly known as The Singularity. At this point it's lights-out for the humans :-D instead of "limitless monetary potential" :-D

Kaa

Kaa

Life does have a tendency to imitate art.

This might prove to be of interest if you've not seen it already.
http://www.ibm.com/smarterplanet/us/...computing.html

[johnw]

In my mind, the revealed preference of our technological leaders is the best and most depressing argument for the great stagnation.

Kaa

I don't think that's the explanation. The Great Stagnation just happens to coincide with a period in which we reduced our investment in public goods, with the result that our public capital is aging much faster than our private capital. If innovation matters, we should be investing more in higher education. If productivity is the problem, we should be investing in the sort of thing that makes us more productive. For example, building overpasses for traffic would greatly speed both trains and traffic on the East Coast. Why don't we do enough of that?

Republicans prefer lower taxes, Democrats are more concerned with defending transfer payments like Social Security. Plus, it costs more to build infrastructure here than it does in, say England.


http://www.economist.com/blogs/gulli...infrastructure


Now we have higher transfer payments than we've ever had, and cutting them isn't going to happen, because people love their Social Security (and welfare reform has already happened.) We've got top marginal tax rates lower than they've been in about 80 years.

The problem is fixable. The politics might not be.