Highways, plumbing, electricity in the wall, nitrogen fixing fertilizers, vaccines, clean water available with the turn of another near home. When all these things appear what is undeniable and really apparent immediately thereafter is a wave of improvement and wellbeing for people. Vast portions of the population start getting better, also all kinds of things are opened up. I was certain now was going to happen with digital networking, but it is not exactly the way things went. Starting around the turn of the century i started to notice a pattern that was really bothering me which is that my friends who worked in the industries that were most affected by digital networking first, and im thinking of musicians and journalists and photographers, were not finding the world of new opportunity that i had for so long anticipated would appear. Instead i ended up almost every week having to be part of a fundraiser to help somebody get a crucial operation in needed and they did not have insurance or Something Like that. People who are well known and not the unknown, and famous, but wellknown musicians. Ashamed to admit that they needed help. That had not been true before. That was new. But then what really hit me was the financial crisis, the whole developed world. Of focusing on the developed world exclusively for the moment. I will get to the developing world later. All developed world at approximately the same time got itself tangled up in financial absurdity. You had the most powerful countries is in their credit ratings. You had lots of social mobility, jobless recoveries, hollowed out job markets, insanely tight credit, massive waves of financial socked fraud or pseudo fraud. And most of all there was a phenomenon of intense concentration of wealth and influence and a loss of the broader middle of wealth and influence, a decline of what we could call the middleclass. And this happened in societies all over the world, not just year. All of the developed ones. This just blew my mind. Now, when i look at this i noticed something that sent chills down my spine which is that all of the newly powerful elite, all of the people who are really at the center of the game , and i have to mention, i have done pretty well myself. And not talking about other. Me and my friend. I know individuals who have done well in the last 15 years i say. Not some weird aliens. But every single one of us is somehow close to one of the biggest computers on the net. And when i started to realize, in the new system we create, power and influence were accumulating around the biggest computers on the network. This happened in finance. It happened in insurance. Happened in a lecture politics. It happened in media. Happened with nation states. It was happening all over. So i thought back on my idealism from when i have been the anchor. I have been kind of a fire breathing oping culture person for years to help bring up a lot of the rhetoric. And what we have always believed as if we made Information Available it would create so many aborigines and so must efficiency and creativity that we were not sure what happened, but surely the incredible scrubbing of goods and benefits would overwhelm problems otherwise be temporary, but we fail to consider something which is, if you want to create this utopia where you have all these people sharing your information and everything is available, people might be created people, but computers are not. Computers are vastly different from one another. Some computers are giant server farms in utah collecting information for american intelligence organizations. Some computers are giants giant server farms powered by their own power plants and cooled by rivers or blazers. They all need exotic ways. Some of them belong to financial schemes. Some belong the social media were searched companies, some along to finance years. They are all kinds of different ones, some of the rear distributive once the takeover our computers are run by criminal organizations, but theyre all doing basically the same thing. So what happens is if everyone shares equally, whoever has the best computer gets on natural advantages, its advantages that are so profound that they seduce the owners of the largest computers into the well, when you are gifted and privileged, you often dont notice it. It is the thing that is invisible, a form of failure that sneaks into people. And you end up in essentially taking advantage of your position without ever intending to our knowing because it is the most natural thing in the world. One way to explain what it is like, the biggest computer on a network is to go back to the a thought experiment creature from the 19th century. You will notice there would go to the 19th century a lot because i feel the 21st century is, in no way, an echo of the 19th century in a multitude of ways. So there is a creature would like to introduce you to in a town like this it is so educated, most of you probably know. How many of you have encountered this . Okay. You never know. So somebody you will need if you take a class in introductory thermodynamics. No, no. He will talk about physics. Run. Run. No. It is really simple. He had this to a man named after ambushing. Imagine a little demon opening and closing a little tiny door, just an adb door just big enough for molecules slip through. The demon is watching molecules into chambers right next to each other and this little bar connected chambers. Each chamber is still with a fluid, water, air, Something Like that. The demon is watching the molecules approaching the door, and if theyre is a really how one on the left side of the memo led it through the right side, and if theres a rally called one bad game and will let it go to the left side. And just by observing these molecules and opening the store very carefully that timman separates the hot from the cold. Once you have done that, you can do something rather nuys which is open up the bigger door and the fickle than a hot mix again. Then you can repeat the process in the have perpetual motion. Global warming solved. Perpetual motion machines cellmark. Its interesting. The active discrimination, the active dealing in information is real work. Its never purely abstract, or separated from reality. The active opening and closing the little door and observing the molecules and the celtics more power and generates more waste heat then you attempt to save by running the turbine in between sessions. This is also known as no free lunch, and you can never get ahead of the game. Every purported perpetual motion machine turns up to be a demon policy if you understand it well enough. Faugh what happened with that any bad intent, they could pretended they could be the max will the men in obamanomics. Heres how it works. The most familiar example is American Health insurance. That most cherished of american institutions. So Health Insurance use to try to calculate risk and there were professionals called actuaries. They had to write down figures and tables and work with very poor in permission, roughly gathered and in at crude since they would try to set the rates of policy. Their job was not really to exclude people by surprise. That only became possible when there was so much state and so much computational power today you could set to pretend to be at maxwells demand. You gather a statistical correlations to predict to has been needed insurance and an open a little door and say the people unlikely to need insurance gather over here and the people likely to need the benefits of insurance, we put them on the other side of the door. Thereby, by having the biggest computer recreate the perfect investment. We create the perfect scheme that cannot fail because we are only insuring people in need it. We know for sure will make a great profit. Theyre is a story i, perhaps, should not tell. I will tell it without naming names. The editors lawyers cut it. Theyre is a Little Island that is used by the republican establishment for planning retreats. I wont say where it is, and i had a consulting gig helping the largest american insurance concern figure out how operate the computers when they first got them. And remember this deal of this concern talking about how we really love to not insure people who are going to turn out to the insurance. We should deal to avoid doing that. And at that moment there was this weird like rushing sound and then it was this enormous and it was such a little earthquake. It turns out there was a meteor strikes right next to a and so anyway, those of you who are astronomers interested in me yours who are seeking a device to attract meteors in order to be allowed to study and should really look to the population of Health Insurance executives. You will find unique. And the metaphor of making should be clear. He think creating the perfect business that is all benefit and no risk, but the problem is your radiating his seat, the risk out to the world. And the world is not and can at large. It cant those are the risk or the people in the insurance. So eventually the system breaks. You undermine the system in which it made sense. So its ultimately selfdestructive, but in the immediate sense is more destructive to others. So in a shortterm sense you could say, others are hurt more by me of what ultimately everyone certainly the people trying to run the perfect investment. This has happened to Health Insurance in america which we can see just by looking at the state of our country, but it also happened of finance again and again and again. Some friends of mine who used to work at an outfit called longterm capital. Remember that one. So longterm capital was an attempt to use big computing to make a perfect investment fund. It seemed too good to be true, so in order to create an air of legitimacy they hire a bunch of people who had nobel prizes in economics to be associated with it, and it looked perfect first. When it failed, it failed big. Guess you paid for it . Hello, all of you. You paid for it. There was another one called and ron. And ron was doing whatever the same thing. A great big computer. Lets make a perfect investment because we can predict where risk is. I remember getting a call from enron. They want to buy my idols are up. I thought, no. We dont want to sell. We dont want to sell a little party star of the we love so much to some companies test the strength to take advantage of a competing. Guess who bought it . Cool. I love them. Im sure there are some people here tonight. We would get to that. So then the thing about it is that even though maxwell the many allusions always break after a while, that condition is so great because at least in the first phase it does work. If you have the biggest computer and a connected network you can calculate little tiny ways to improve your game so that other people take the risk could you get the benefit. You just everything seems golden. What happens, finance and insurance, it will happen to Silicon Valley. It will happen to every other area of life of which are organized this way. This is the fundamental pattern that we have to figure out a way to transcend. It is not going to be easy because it is seductive. Ive been on the of a side of it. Its great when it works. It is like heroin or something. Its information heroin, and we have to find some way to yet off of it. I mentioned that time will be returning to the 19th century again and again. I will return to it now. In the 19th century a lot of things happened. There was a whole hundred years there. There was a civil war here. Lots of new technology, lots of new science. In terms of human thought there was a unifying his theme that was so powerful and so presence that the expressions of it remain dominant today, and that theme was robot anxiety. The 19th century was defined intellectually to an amazing degree by ethier that people would be made obsolete by approving improving technology. You might not think of that is the 19th century concern. But let me give you a couple of the signposts. First of all, the riots which were riots by textile workers being concerned that there would be made obsolete by improved textile machinery fell of the improved looms. That was a very ugly early battle that resulted in public executions of one not. That, in turn, strongly influenced the 19th century thinkers and a potential heir to the particular karl marx. If you read the early march, the 1840s marks, he was at that time it Technology Writer concerned precisely with this issue. I realized i was driving on alma listening to kate tsa, but that did not know. I thought it was kqed. It was someone going on about how ever going to lower barriers to Market Access and more going to a capital was going to flow. No, god. Another one of these stupid Silicon Valley startups. It was an actual reading of marks. It was the strangest thing. Oh, my god. I went back and reread it. If you forget about im not a marxist. I think his solution has been proven to fail, but if you read his descriptive work on what was going on with human life in the world of improving technology, he sells contemporary. It really is extraordinary stuff there are not that many songs from the 19th century that are immediately familiar to us, but the ballad of john henry is one about a guy who is in a race with the robot that lies Railroad Tracks and manages to win but dies from exhaustion. It was the sort of tragic, erotic this to five disparate some of the people and raising its machines. The literature of the 19th century is with us today, and recall it Science Fiction. The earliest sciencefiction was directing motivated by a fear of human obsolescence. A wonderful example to of example is hd wells time machine worked humanities splits in the future and just uses pcs, one of which benefits from being the descendants of those who own facebook in is to gramm and google, the rich ones to run the scheme. They eat the other ones. The interesting thing in the vision is that both sides of that divide i made a kind of ridiculous. Absurd. If you look at Science Fiction occasionally it is an alien who makes as obsolete, but it is one of the other. Always a question of whether humans will become obsolete or not, and usually it is our own machines. As the theme over and over again. The Science Fiction started out of robot anxiety in the 19th century. An interesting thing happened. In the 20thcentury we did not see massive waves of unemployment because of improving technology. And of course the reason was that new jobs were created when machines get better and it shows that those jobs are usually more desirable. It did not happen automatically. There is this thing called the Labor Movement which was no small thing, a gigantic, but become a difficult movement. In a sense it was fighting for the right to get paid even if your job is as miserable and dangerous as old jobs. That is something that is often forgotten. So lets imagine for a moment that this bookstore is located in rochester, new york instead of menlo park, california. If we were in rochester we would remember that in 19th century it was that cynosure of the manufacture of buggy whips. It when obsoletes because motorized vehicles gamelan. I love horses. Dealing with horses as a necessity to get around is a pain in the bud. I dont know if he had done it. There is the feeding, the poop, and whose chairman the getting kate, not all of that nice. The whole thing is really a big nuisance. So having a motorized vehicle is not only cool, but it is so fun you wonder why people would not to spit it drive it. So if you have if you ever wonder why the Teamsters Union is tough union, have to be tough to assert that even the lawyer doing is sitting there putting your foot up battle, he still deserves to be paid. Thats why cabbies get paid. And every time they use the job that is not utterly miserable and dangerous but still pays, you will notice something about that job which is that there was in the past some straw vote created some sort of the ratchet or structure that helps as people get paid despite the fact that they are not constantly risking death. There is either a union were academics are something. Always some kind of mechanism. And this is the reason why in the georges century we have better jobs to do a better technology. It was not so much a question of whether people will were still needed but a judgment dammar hardfought for the judgment that even if the new rules for people or more pleasant than the old, you could still get paid for them. That is what happened. So Unemployment Crisis averted. Middleclass strong. Now, at the turn of the 21st century we suddenly decided to read a on that covenant. Recently decided, screw the solution. Who will let people go obsolete. Let me spine allies see this happening. One of the magical little tools that are available for us swimmingly for free is language translation, a proximate language translation. You can up load an essay in english and get it back seemingly automatically turned into a spanish essay. Not perfect, but readable. Google to microsoft and a few others. The First Company to iraq demonstrated was ibm labs, but it is a pretty common thing at this point. So the way that we talk about a service like this, most commonly, is as if theyre is a giant artificial brain and we are privileged to get the services of this artificial brain for free. Isnt it a Wonderful World in which you can benefit from the artificial brain for free . Now, there have been a time when there was a hope that this spring might be created. It goes back to the 1950s when some of the pioneers were never really sure what would be involved than just one of my mentors when i was young, one of the founders of the a i field, he has signed a gradual basis since the summer project seeing if they could translate between math languages. No, that does not work. Famously does not work. What does work is what we call a big data or giant corporation if tension. The thing is it is a matchup of real people who we pretend dont exist. So what were saying is, as this technology progresses and gets better and better, if you were a translator, multilingual, that job of translating is not like being a truckdriver, even though it is not miserable, this time you dont get paid for it because we have a non unwise to a pretended you dont exist to create the illusion of a giant electronic brain. So this is yet another example of what i call a siren server or a maxwell demon where we are creating the illusion that all the value goes to one side. We will let all the value from the transition go to one side and all the people who actually did the work go over to the other si