Is Technology Evil?
Podcast: Play in new window | Download
This column started out being titled “Is Goldman Sachs Evil?” until I realized the issue is far more broad. It began with a blog post by my old boss Jim Casella, who now runs Asset International, a financial publisher. Jim concludes after a review of some recent and very negative press that Goldman isn’t evil, per se, just cocky. But by comparing the investment bank to sports teams and players I think Jim makes a grave error. Goldman Sachs isn’t evil, just stupid. And that stupidity comes in the form of their witless abuse of technology.
Jim’s sports analogies are misplaced because while sporting events must inevitably have winners and losers economies don’t. TRADING has winners and losers but Goldman is an INVESTMENT bank (worse still, they are now a bank holding company) pretending to be on the side of economic growth. Trading relies on finding and exploiting inefficiencies in the system while investing grows the economy. Trading is a parasite on investing. I’m not saying to ban it, I AM saying that technology has enabled outfits like Goldman to be such efficient parasites that they threaten the survival of their hosts.
This is fine if we look at it as a process of evolution. Maybe what we are going through lately is natural selection that will over time improve our culture and society. But that’s not the way it is being pursued by Goldman and others: they aren’t envisioning some future after they’ve killed their host, nor do their techniques allow the host to recover before being bitten again. I’ve talked with these guys and they are clueless about the implications of their work. The deepest they’ll go is to allow that China will likely be the next economic superpower so they’ll just move their operations to Beijing or Shanghai.
That doesn’t do much for Ma and Pa back on the farm.
Economies need a little slack to function smoothly but these companies are removing all of it. All they need to be is a little less greedy, but their greed apparently knows no bounds.
Their techniques usually come down to the application of technology. Faster computers and bigger pipes allow the relentless application of small advantages that eventually suck profit out of the market. The answer is bigger and bigger guns wielded by bigger and bigger players, which is fine unless you aren’t a big player, which pretty much describes the rest of us.
This process builds financial bubbles until they pop then it is left to the despised government to fix things. But what if government runs out of options? Then there is economic revolution. That’s what happened in the former Soviet Union in 1989 — a process we in the west cheered at the time.
But what if it happened to us?
We can’t imagine that. Our economic policy doesn’t imagine it, nor does our foreign policy, because superpowers don’t acknowledge weakness.
But we ARE weak.
It all comes back to technology. Remember the work of Black and Scholes that underlay the staggering growth of derivative securities was based on thermodynamics. We use principles from one area in another to good effect, but what makes an efficient heat exchanger can make a deadly security.
There’s a sore failing here, I believe, in the application of ethics to technology.
Ethics? What does ethics have to do with Boyle’s Law?
Maybe nothing, maybe plenty, but the overall problem is that those who claim to understand ethics aren’t so good at the technology parts, and vice versa. We saw that with Enron, which was technology gaming the market, and we evidently haven’t learned much since.
Google’s corporate motto is “Don’t be Evil.” I thought that was silly when I heard it first. But now I think it is the height of wisdom. Because the techiest of techie companies probably knows better than most the power of tweaking systems to death.
It’s possible. We CAN kill our own culture trying to preserve or defend it. Understanding that and helping to make change as painless as possible comes down to the best efforts of those few people who really understand the complexity of our society — many of whom are readers of this column.
Everything is interconnected in this era where technology drives society yet few really understand technology. If someone can take down Twitter because of a petty grudge then ANY information system is vulnerable. Sometime neglect is all it takes.
And neglect is all around us.
is tamiflu dangerous…
tamiflu purchase. tamiflu and happy feet. tamiflu purchase avian bird flu. …
I must be dense. I think I understand what you are trying to say, but would prefer that you make a clear and lucid statement of the problems you see.
I can’t speak for the author, of course, but my interpretation was that GS is to the economy at large what the Big Three were to Detroit. And if left to ‘prosper’ in the same heavily subsidized and legally favored fashion, the economy at large will start looking increasingly like Detroit.
So, you know, not good.
I second @issy53. Please give a specific scenario or explain the mechanism GS destroys us with step by step. I suspect Cringely may be on to something, but he needs to explain how it works.
Cringely is clearly referring to flash trading, but as far as I know, the jury is still out regarding its market impact. Moreover, GS is far from the only, or even the largest, entity in that market, so I’m sort of with you guys in being confused with exactly what it is that sets it apart from the crowd.
The problem isn’t what you state it to be.
The problem is that criminal acts are not prosecuted in this country. When crime pays in a (Godless/ethicless) society it will collapse. Note all of the third world. Unpunished criminal graft, corruption, and greed is everywhere there are failed societies.
We are joining them.
Just the other day, I heard the phrase that describes what you are trying to say. Crimogenic environment.
“When crime pays in a (Godless/ethicless) society it will collapse.”
Iran, is pretty god-fearing nation. Most of the economy is state owned, inflation is triple digit, and corruption is rampant. http://www.heritage.org/Index/Country/Iran I think you can leave out the parenthetical and the sentence is fine, no need to drag religious bigotry into the discussion.
I’ll place parentheticals as I please. Your perspective on faith, though the mode, is hardly competent (I viewed your link to philobyte
.
I hate translated emoticons. They add more than I intended.
You seem to be talking about Quants and (bad) mortgage schemes simultaneously. However, the connection is elusive to me. Could you clarify?
If Goldman makes China the next economic superpower, won’t that help Ma and Pa Chinese people?
Not in the least, because China is becoming just as owned by large corporations as the US is. Perhaps more so, because the Chinese government views its citizens as ignorant pawns to be shuffled around the board when they get in the way of business — and acts to keep them as ignorant pawns in every way possible.
You are right about the government treating us little guys like little pawns, but they simply treat the corporations as knights, bishops and rooks. A huge bureaucracy will sacrifice any of them to preserve itself, and grow. To paraphrase Pogo: “We have met the enemy and he is big government.”
Sorry, I don’t find this post convincing at all. The analogy of trading to parasitism is an interesting if overused one, but it doesn’t really further your argument. As Brian commented, mortgage securitization and trading are very different. In fact, if banks had held onto less of those securities and… traded them, they would have been in far better shape. There’s a great case to be made that improved quant trading improves markets because it speeds up price discovery and reduces volatility.
The Soviet Union analogy is equally poor if not worse.
Remember, revision, revision, revision. And kill your darlings.
I think what Cringely is saying is that the financial traders are modern day privateers. They are authorized by the government to steal from the government’s enemies, which would be everyone that isn’t in our government and that has something worth stealing. The privateers and the government split the booty and the war goes on.
I don’t think it can be much clearer. Goldman Sachs used to do investments. Investments are the process of giving money to people so something gets done. Trading is different. Trading, especially high-speed computer trading (like, in fractions of a second), simply siphons money away from some people to give it to others. Nothing is made, nothing is supported, nothing is produced – except more money in the accounts at Goldman Sachs.
If one is investing, one is trying to make something come out of the face that money can make things happen. If one is simply trading, then it doesn’t matter if the money goes to cancer drug development, tobacco, or useless ‘securities” made up of mortgage hamburger. All that matters is at the end of the day, you have more money than you did in the morning.
The potential for evil when you don’t plan – worse, when you don’t care – is staggering. “Don’t be evil” is an acknowledgement that yes, technology pursued simply to make money can result in chaos, pain, and destruction for people who weren’t even involved: insane disparities of wealth, and potential economic collapse.
Clear?
Clear?
When will we learn that just because something can be done does not mean it should be done? When will we learn that financial markets cannot regulate themselves and that citizens should be made to put the interest of their country before their own financial gain? In the past when someone had completely sold out their own country they were called traitors and charged with Treason. Buying imports is one thing (America has always done that since Colonial Times) but to plan the downfall of the American economy and hand it over to China just because they want to be rich is another thing totally. There has got to be a line in the sand.
I Agree with Fred. The US has all the hallmarks of a failed state and will collapse. Goldman Sachs is just one of the more visible symptoms of that process (as are the occupations of Iraq and Afganistan). But lets listen to an expert on failed states and subsequent collapse:
http://www.energybulletin.net/node/23259
Expert? The first line of the article states he’s not an expert!
[...] listening to http://www.cringely.com/2009/08/is-technology-evil/ [...]
I think that though you’ve identified a problem, you haven’t located the underlying cause. High-speed trading is allowed by exchanges and allowed by current legislation and if there is money in it people will do it.
What might be needed is legislation that mandates a cool down period on all purchases, and a minimum holding period for all trades. I don’t think we can get rid of puts, but we could have heavier fines for unsupported or failed puts.
It is in our nature to pursue any small advantage. Clearly the people at Goldman are oblivious to the larger picture. But can we really expect them to be otherwise? They are only acting within their narrow vision as an investment house bent on profit. The problem arises when such a business invades the regulatory bodies, turning oversight decisions to it’s own ends. At that point, the bodies appointed to take the bigger picture into account have been undermined. If these bodies were actually doing their jobs, simple solutions would make all the difference. Solutions like transparent derivative markets, Tobin taxes and making all public businesses pay dividends on gross profits. Very simple plans that would have major stabilizing effects on our economy. Instead we get endless pages of legislation, written by the lawyers of such firms, made to look like action, but only disguising the gates to business as usual.
[...] Cringely on technology – Is Technology evil? – Link. [...]
[...] to come at things from a slightly different vantage point. My last blog inspired him to write “Is Technology Evil?” (www.cringely.com) He clearly did not like my sports analogies and found wisdom and inspiration in [...]
I am not sure if I agree with your post here. See you do make the best point, I don’t think you have actually given a large amount of thought to the opposite side of the argument. Perhaps I could do a guest post or a follow-up, just tell me.
[...] magazine (print? Whassat?) article on Goldman Sachs. It was a nice fluff piece, but I agree with Cringely’s view on why GS is evil — they’re a trading house masquerading as an investment bank. Their most profitable [...]
In my opinion, that Interest Savings Accounts is way to low!
When prompted, click Yes & start into Windows as normal.
Everyone should just start buying gold with the csh they have and start hiding it under the mattress.
Damn, cool website. I actually came across this on Yahoo, and I am stoked I did. I will definately be coming back here more often. Wish I could add to the conversation and bring a bit more to the table, but am just absorbing as much info as I can at the moment.
Thank You
corporation tax
Your Article Was Hand Picked For Sydication On:…
We loved this article so much I have chosen to syndicate it…
I actually came across this on Yahoo, and I am stoked I did. I will definately be coming back here more often. Wish I could add to the conversation and bring a bit more to the table, but am just absorbing as much info as I can at the moment.cheap VPS
Of course, what a great site and informative posts, I will add backlink – bookmark this site? Regards, Reader.
I actually find that interesting. I’ve been browsing your blog for a couple days now and I truly enjoy what I see. Keep up the good work!
It is pleasant here. great study. I have been looked this info for quite a while. thanks
Can I website as much as this, from my webpage? I’m planning to gather as much sources of information as i am able.
hhprpyndzwssqkrrbv, william rast, BzFvyLtgyxGPtAdJMxCX. erdcnyltaazdlaunlu, pantene pro v, egRfavbdDUhapalvOpEf.
Hi; Excellent post for me. Your post has valuable infos. I wish to has valuable posts like yours in my website. How do you find these posts?
I agree with the above poster.
A very helpful article, Google is increasingly important in daily life.
video izlemenin keyfi videocok.com ile çıkar.
[url=http://www.installsoftware.com/educational-software]educational applications[/url] rfgdfgh ytyt trtrsrt ghgh [url=http://www.installsoftware.com/audio-software]sound drivers[/url] [url=http://www.installsoftware.com/voip]internet calling[/url] thd hjytgh ryted dfg [url=http://www.installsoftware.com/video-software]converter software[/url] fthgt trygh y yurt [url=http://www.installsoftware.com/speech-recognition-software]voice dictating[/url] rytrt6yu tr dknj ljf ouye njfjlk [url=http://www.installsoftware.com/security-software]security threat software[/url] rfg riojkl slkj nhju oji iol [url=http://www.installsoftware.com/screensavers-wallpapers]background software[/url] rgsdergrg trsf gfh ghdfsht thtrsdgthth tyhhhtrh [url=http://www.installsoftware.com/networking-software]network managing application[/url] sthheeiuhjnfkdv iunjjk oij oiajvj mkl [url=http://www.installsoftware.com/itunes-ipod-software]itunes software[/url] fbvfsd trht tghhsdf [url=http://www.installsoftware.com/internet-software]internet surfing software[/url] sfdhg thsdfgg sdgtr [url=http://www.installsoftware.com/browsers]web browsers[/url] strhf frsrg trht sdgtrtr tstsfhhtu [url=http://www.installsoftware.com/install-developer-software]programming developer[/url] ru ghsdtst trghgth thtr werrg [url=http://www.installsoftware.com/home-software]family software[/url]gwegr trhhdrs tthyj utrj [url=http://www.installsoftware.com/gaming-software]computer game software[/url] ytjuytj jytj [url=http://www.installsoftware.com/e-mail-software]email[/url] ytjye eytj jtj uy kykjk kyu [url=http://www.installsoftware.com/drivers]update drivers[/url] r7yu yudf ytj ytrt6 tyj [url=http://www.installsoftware.com/desktop-enhancement]desktop widgets[/url]ytjt6uydhj ytjuyr dyj djyj yj [url=http://www.installsoftware.com/design-software]home designing software[/url]j dyjud yjdyj [url=http://www.installsoftware.com/operating-systems]computer systems[/url] ydj ikl jbdddn dfgdtr tdt gtrsdr [url=http://www.installsoftware.com/business-software]book keeping software[/url]
Wow!, this was a top quality post. In theory I’d like to write like this too – taking time and real effort to make a good article… but what can I say… I procrastinate a lot and never seem to get something done
Seriously. Why did not I visualize that?
Wow!, this was a top quality post. In theory I’d like to write like this too – taking time and real effort to make a good article
Took me time to learn every of the feedback, but i really loved the article. It proved to be extremely beneficial to me and i\’m positive to every of the commenters here! it’s all the time great when you can not solely be informed, but additionally entertained! i’m sure you had enjoyable penning this content.
You wrote some excellentparts and I’m pleased you were brutally honest.
comparable with my type of view
I’ve discovered a lot in your website and I look ahead to further updates and will probably be back. Perhaps this can be a bit offf matter however in any case, I’ve been browsing about your blog and it seems to be actually neat. impassioned about your writing. I am creating a new blog and laborious-pressed to make it appear nice, and supply glorious articles.
The information is very complete. It tackles a broad field of ideas. Thank you for giving me a chance to see things the way you do.
I’ll gear this review to 2 types of people: current Zune owners who are considering an upgrade, and people trying to decide between a Zune and an iPod. (There are other players worth considering out there, like the Sony Walkman X, but I hope this gives you enough info to make an informed decision of the Zune vs players other than the iPod line as well.)
Hey everyone, I’ve attached a pointer to another resource I found on the online searches I’ve done that has quite a bit of valuable information and data on the topic.
May be a really good idea to bookmark this current website and travel over the site I am recommending and bookmark that too.
We really need this type of resources these days.
Thanks!
thanks .. i like web site . enjoy
Great discussion, Useful for me because i am working such related project. It guides me a lot.
There exists a serious debate today and lots of heated up ideas whether you aren’t for your ##keyword## . In the event you understand it? What factors when you think about before making your decision? The objective of this post is for you to weigh the pros, cons and alternatives you’ve.
I don’t think tech is in and of itself evil. In fact, much of modern technology is liberating. But there’s no question that it can be problematic when used by people with evil motives. I think a better title for this post would be “Are Large Investment Banks Evil?” or even “Are Large Corporations Evil?”
[...] Cringely speculated that the day might be coming when Goldman Sachs decides the United States isn’t worth dealing with anymore. Crazy, eh? Maybe not. Blaming ‘intense media attention,’ Goldman Sachs has [...]
This article seems to imply that big companies leaving the US for China (or any other country) “improves the world” while doing the opposite doesn’t. I’d argue that that assumption is, at least, disputable.
Don’t misunderstand me: I’d take the US as a world leader over China any day. (Just look at what they are doing with their Internet)
There are probably more Moms and Pops in the Chinese farms than in the American ones. These are human beings, too. And their numbers also have to be taken into account when speaking about global improvement.
What I’m saying is that this “what’s good for US is good for the world” mentality is exactly what has brought us to the current crysis. The world leaders can’t afford to be so myopic.
Perhaps this can be a bit offf matter however in any case, I’ve been browsing about your blog and it seems to be actually neat. impassioned about your writing.