In the Information Economy, Value Is Decreasingly In The Numbers – Hellenic Shipping News Worldwide

Is economic growth accelerating or slowing in the developed world?

On one extreme we have economist Robin Hanson, who has carefully quantified what the path to Ray Kurzweils predicted 2045 technological singularity would look like economically. As the domination of biotech, nanotech and artificial general intelligence rise over the next few decades, Hansons detailed analyses suggest the annual economic growth rate will reach 45% or more.

In another camp, we have economist Robert Gordon, who argues that electrification and the internal combustion engine provided a one-time boost to the world economy and that the various inventions rolled out since have been small potatoes. This skeptical view seems bolstered by the fairly lackluster effect of the internet and mobile telephony on conventional economic indicators up until today.

But the truth is that, in the information era, growth is decreasingly in the numbers.

Look at arXiv.org, where scientists in various disciplines routinely post their freshly written research papers. Sometimes this is a prelude to publishing the paper in a conventional journal or conference, but increasingly, its an alternative.

If a scientists goal is to disseminate their work to their colleagues in an orderly way, and to ensure their work persists in the memory of the scientific literature, then posting on arXiv.org is arguably better than publishing in a commercially run scientific journal. Anyone with an internet connection can read arXiv, whereas many journals and conference proceedings are available only to those with a developed-world university connection or a lot of money to spare (who really wants to pay $30 to download a PDF of a research paper they havent even read beyond the abstract, which may or may not actually be of interest?).

As one among a huge number of examples, the recent progress in deep learning technology for image, video, voice and language processing has been largely driven by the rapid posting of new algorithmic ideas and results to arXiv and the corresponding rapid posting of new open-source software code to Github.

How is the rise of arXiv and Github reflected in economic indicators? ArXiv has allowed the level of activity in the scientific community to increase without any commensurate increase in the revenue of the scientific publishing sector. The open-source software movement has allowed the level of activity in certain parts of the software world (operating systems and AI, as two major examples) to increase without commensurate increase in the revenue of software publishers.

Something similar has happened in the journalistic world with the rise of blogging. Activity has increased in some very real senses the amount of prose widely disseminated, the diversity of points of view widely shared, etc. but without commensurate increase in the revenue of journalistic publishers.

And the same sort of thing can be seen in the music world.

Whats happening here?

First, were seeing a shift from an economy of physical goods toward an economy of more abstract, informational goods. This is well known; it represents the movement of human society upward in some sort of economic Maslows Hierarchy.

Electrification and the internal combustion engine may well have been bigger leaps in the physical aspects of peoples lives than anything to happen since. But its because our physical lives have gotten so comfortable that we have shifted to pursuing improvement in more abstract informational domains.

Secondly, and less well understood at this point, were seeing a shift from a quantified to an unquantified exchange of value. This is where the economic analyses of both Hanson and Gordon fall short.

With arXiv, scientists are exchanging knowledge and ideas with each other directly without anyone needing to quantify the value of whats being shared or received. With Github, coders are exchanging software with each other directly (also without the need for quantification). And on Facebook, users are exchanging information with each other without need for quantification of value.

These modes of nonquantified value exchange interoperate with more traditional systems of quantified value exchange.

Papers on arXiv often are associated with software or hardware inventions, which are then conventionally monetized. Open-source AI code on Github is used to train models on proprietary datasets, which are then used to fuel commercial products that are licensed to end users for money (or commercial products like Facebook or Google that are offered as parts of more complex, partly nonquantified value exchanges). Data provided to Facebook is used to drive customization of Facebook ads, whose value to advertisers, based on user attention, is quantified and monetized.

But when such a significant percentage of the fundamental value exchange is nonquantified, just tracking the money flows doesnt meaningfully measure growth. And the situation will only exacerbate.

Professor Dirk Helbing has suggested that multidimensional qualified money (e.g., money that keeps track of various components, including social value, environmental value and so forth) may come to play a role in the economy of the future, allowing a richer sort of value accounting. Carbon credits and Fair Trade certifications are a step in this direction.

More radically, five years ago I introduced the notion of the offer network a community of parties that carry out economic exchange via the intersection of requests/offers of the form If someone does X for me, then I will do Y for someone (maybe a different someone). An offer-network economy is basically a giant matching engine that connects various parties with each other based on the compatibility of their request/offer pairs.

In an offer network, one gets scalable and systematic exchange of value without the need for quantification.

What the cases of arXiv, Github, Facebook and so many others show is that the information economy is becoming an offer network rather than a quantified economy.

This means we could well get to the singularity without ever seeing the 45% financial growth rates Hanson forecasts. What we might see instead is the quantified portion of the economy becoming exponentially smaller and economists becoming exponentially less relevant unless they develop radically new tools.Source: Forbes

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In the Information Economy, Value Is Decreasingly In The Numbers - Hellenic Shipping News Worldwide