Capitalism is a paperclip maximizer

http://thoughtinfection.com/2014/04/19/capitalism-is-a-paperclip-maximizer/

by mcscom • 11 years ago

126 92 11 years ago

VLM• 11 years ago

The article irrationally assumes the best effort maximizer has no competition and long life, which we have not seen in endless lower powered implementations, and there seems to be no trend so unless it starts going exponential...

There might be a barrier here, like speed of light or various mathematical limits that formalize the old saying of too many cooks spoil the broth. The required complexity of a uber-maximizer to handle the complex universe means its unprovably complicated and unreliable. Or you'd need a bigger computer than the universe to answer the halting question for a universe controlling control loop, or even something much smaller like a mere multinational corporation. Or another way to put it is a predatory competitor maximizer would inevitably be better at predation than its victim that focuses more on some arbitrary goal than on avoid becoming a meal, so in a hyper optimized playing field all you'd get is ever better predators eating each other and eating weaker non-predation focused orgs, or basically the modern business/finance system.

bmmayer12• 11 years ago

Capital doesn't maximize capital; it maximizes productivity. In absence of controls, capital naturally flows to productivity in order to be maximized by the holders of capital; but only because productivity creates wealth, not the capital itself.

biomene• 11 years ago

Capital only maximises productivity if it gains an advantage by doing so. In other words, productivity is a means for Capital to maximise itself, not an end. There are infinite examples of this: shrimp peeling machines have existed for ages, but shrimp is still mostly manually peeled in Thailand because it has a cheap workforce.

legitster• 11 years ago

The workforce in Thailand is cheap because there is not enough capital. The answer will never be less capital.

ZenoArrow• 11 years ago

"only because productivity creates wealth"

Does it? For whom does productivity create wealth for?

Productivity is about getting set results based on the smallest set of resources (time, money, materials, etc...). It does not include anything about wealth, nor where that wealth is distributed to, or whether resources could have generated more wealth used in a different way. It's actually possible for increased productivity to decrease wealth.

bmmayer12• 11 years ago

Productivity is the creation of goods and services. Goods and services are the building blocks of wealth: one who has more goods and services is more wealthy. It is impossible to create more wealth without increased productivity.

Now, to your point, the fruits of productivity could be unfairly captured by non-producers, in which case wealth is being misappropriated from those who created it to those who have the power through whatever form to capture it (i.e., taxes, feudal land ownership, etc).

theworstshill• 11 years ago

Well said.

gglitch2• 11 years ago

If I'm understanding this observation correctly, you're saying that capital flows to the productive, which creates wealth, which in principle generates more productivity, and therefore draws more capital?

barrkel• 11 years ago

Productivity is the ratio of outputs to inputs. In an efficient competitive market, profit tends to zero. That would make capitalism a minimizer of productivity, as long as productivity is greater than 1 (otherwise the enterprise is not profitable).

Labour productivity, by economic definition, is the ratio of output to people. If most of the wealth generation in an organization is automated, labour productivity will be high, whereas if most of it is manual, labour productivity will be low, even when both organizations are producing the same amount of wealth.

marcosdumay• 11 years ago

Wait, what?

Capitalism maximizes "giving people what they want". This is much closer to the benevolent AI models than to paperclip maxizers.

drabiega3• 11 years ago

While that may be true in some sense there is a very important caveat. Capitalism maximizes giving people they want in proportion to the capital they have.

The fact that the distribution is skewed by capital ownership and that agents other than people can own capital creates a powerful distortion and an entirely different systematic effect.

plutooo4• 11 years ago

Remember that capitalism works in favor of big numbers. 1 person has to earn as much as 1000 people in order to have the same power as them.

So while your point still stands, if you have a decent middle-class then it will be much more powerful than any billionaire will ever be.

harshreality• 11 years ago

A lot of capitalism involves making people want things that capitalism then supplies to them. I'm not sure that's benevolent.

transfire2• 11 years ago

That's laughable. Capitalism excels at forcing people to accept what is most profitable.

6d0debc071• 11 years ago

Capitalism maximizes "giving people what they want".

So do drug dealers who get girls hooked on heroin and put them on the streets. Simply because you serve some compulsion or desire that someone has does not make you benevolent, there are such things as high local utility traps.

lukifer2• 11 years ago

Implicit in the statement "giving people what they want" is a set of assumptions about what "want" means. Do I want life-saving medicine? Do I want a soul-sucking job that pays the bills? Do I want to be de-facto-required to participate in Facebook in order to socialize? I may voluntarily choose all of these things, and while that is unambiguously better than being forced to do them by violence, that's subtly distinct from "wanting" them.

There are also varied spectra of wants: on some level, I want to pursue self-actualization goals that are years away. On another level, I want to step out of the rat race and read a good book. On yet another level, I want to watch TV, eat candy, and click a button that delivers a dopamine reward directly to my brain. These wants are frequently in conflict, and capitalism is more incentivized (or capable) to satisfy some of those than others. (I remember a good PG essay about the phenomenon of short wants vs. long wants, but I can't find it; neighboring ideas are found in http://paulgraham.com/addiction.html and http://paulgraham.com/distraction.html)

I don't think markets are a bad technology, any more than any other technology. But the paperclip analogy fits: people do want paperclips, but they also want a variety of other things that aren't paperclips. If we create social machines that optimize some wants over others, a plethora of human needs and desires may be drastically under-supplied as an unintended side effect.

jerf• 11 years ago

"Implicit in the statement "giving people what they want" is a set of assumptions about what "want" means."

And while that's all very interesting and important in the abstract, it's worth double-checking that you don't get yourself lost in the weeds... which I think you did... and forget that the paperclip maximizer is scary precisely because it has no concept of wants in it. With capitalism, wants can be changed in real time, and the system reacts. The paperclip maximizer does not. They are fundamentally different.

There is a memeset that strongly encourages you to fling up whatever word smokescreen is necessary to ensure that nothing positive is said about Emmanual Goldstein, today played by Capitalism, but it's still just a word smokescreen. There is a fundamental different between a paperclip maximizer and capitalism, and you should not throw yourself into a word tizzy until you've confused your rational brain enough that you can fall back on the comfortable emotional judgments about capitalism. Not every bad thing that can be said about capitalism is true simply because it's a bad thing said about capitalism.

eli_gottlieb7• 11 years ago

Capitalism maximizes "giving people what they want". This is much closer to the benevolent AI models than to paperclip maxizers.

Yes, I'm sure that what I want involves working lots of hours to buy Boston real-estate. That surely wasn't determined for me by capitalism, in roughly the same way that a not-quite benevolent AI might determine that what I really ought to want is paperclips.

cheald2• 11 years ago

You want it more than you want not having any real estate, or having real estate in some place that isn't Boston, obviously! You want real estate in Boston - so do many other people, many more than who can physically own real estate in Boston. How is it decided who receives and who goes without?

Wants cannot be considered seriously independent of the reality of scarcity. The sum of the world's wants is greater than the sum of the world's resources, so we have to have some system of allocating those resources among those wants. There are many theories on how to do this, but free market trade is somewhat unique in that it is one of the only systems that acknowledges and allows for subjective value. So long as you are permitted to freely trade your time and resources, you are able of exchanging them for whatever you want most - which is not the same as being able to exchange them for all that you want.

madaxe_again2• 11 years ago

Capital is not what most people conceive of it to be. Capital is commonly (and correctly) viewed as a "store of wealth", or as "the crystallisation of labour-time" - but capital comes in different flavours, and when you deal with capital in the form of goods which provide an incremental benefit to the user, what you have is indeed capital, but when you deal with money... it's up to you whether it's capital or not.

Often, people confuse money with capital. Money is an exchange mechanism which facilitates the transfer of value between parties through a common unit of exchange. Money can be viewed as a subset of capital (i.e. as a sedentary store of value), or it can be viewed as the destruction of the benefits of labour, as it converts an active instrument (i.e. the work I am doing, or the goods I have produced) into a sedentary instrument which provides no incremental benefit, unless it is spent.

So - how this relates to the article - capitalism is a system which currently optimises for money. When you take a step back and consider that by converting labour and value into money, you are effectively freezing the benefit of that labour away, accruing money as an end of its own ceases to make sense, as much of this value ends up lying in the ledgers of corporates, governments, or wealthy individuals, doing nothing for anybody other than perhaps dealing with some of the more fragile elements of human psychology (security).

We have let a means become the end, and have forgotten that the Purpose of all of this is to promote human happiness - I mean, what other possible Purpose can there be?

AndrewKemendo2• 11 years ago

capitalism is a system which currently optimises for money.

If that were the case then cash reserves would be where the bulk of people poured their resources. In fact the majority of non-debt "capital" is held in real-estate and some combination of financial instruments (CD, bonds, common stock etc...).

You are confusing how the assets are valued with what is actually being valued. What I think you are saying though is that capitalism is optimizing for having the highest dollar denominated balance sheet - which could be true, but I think that is a function of the people, not the function of open markets or the asset value function of assigning ownership to capital.

gglitch2• 11 years ago

Out of my depth here, but aren't the real estate and financial instruments being held merely as a generator of more money (except in the rare case that one actually lives on the real estate, I suppose)?

irln3• 11 years ago

It depends upon whether capitalism == the current form of managing the money supply (e.g. fractional reserve loans, Federal Reserve's open market operations).

bko5• 11 years ago

Some would disagree that the purpose of existence is to promote happiness.

Robert Nozick offered this thought experiment to which I would not opt to maximize happiness:

Nozick asks us to imagine a machine that could give us whatever desirable or pleasurable experiences we could want. Psychologists have figured out a way to stimulate a person's brain to induce pleasurable experiences that the subject could not distinguish from those he would have apart from the machine. He then asks, if given the choice, would we prefer the machine to real life? [0]

[0] https://en.wikipedia.org/wiki/Experience_machine

kaffeemitsahne• 11 years ago

Why wouldn't you?

Retra4• 11 years ago

The problem here is that you've created a scenario that talks about a single human brain, but "maximizing human happiness" doesn't refer to any single person's brain. It refers the state of our entire social environment as viewed through the aggregate of individual experience.

And you're probably vastly underestimating the complexity and comprehensiveness demanded of such a machine.

rndn• 11 years ago

I think this response has something to do with the fact that artificial stimulation is often regarded as deceptive in western culture. So the decision is heavily influenced by how people see it being judged by their social environment. You can achieve an interesting twist by asking: Would you hook your brain to a pleasure machine if everybody else agrees to use it too (and of course it wouldn't cause any social or cognitive side-effects, boredom, fatigue etc.)?

fweespeech• 11 years ago

I wonder what Robert Nozick would think of recreational drug use.

That is as close to that "machine" that we have in reality and its pretty clear people are willing to accept/risk the negative impacts and use such drugs.

This being the case, I'm pretty sure, people would use that machine if it was legal and cheap. Similarly, I'm pretty sure at least some of those people would prefer it to real life.

Similarly, the only reason I prefer "real life" is the relationships I built with people. If I had been given the choice, say, 10+ years ago to have such a machine ... I'd prefer it to RL and the effort it took to build the kind of life I want.

So its a philosophical question with answer of "it depends on the person and RL situation they have".

pharrington• 11 years ago

The internal experience of an individual is totally beyond the point (the stimulation of watching an engaging movie is literally real in your brain!); all the issues about generating happiness for the human species revolve around the sustainability of that happiness. Kindof can't handwave away the social implications of promoting happiness within society. Also the arguments of "we'd rather DOOOOOO something than just EXPERIENCE doing it" obviously either rely on some sort of dualist existence or just straight out say the experience machine isn't as good as advertised.

jsprogrammer3• 11 years ago

Capital is commonly (and correctly) viewed as a "store of wealth", or as "the crystallisation of labour-time"

Sorry, but what? I'm guessing that you don't even really believe this and that you don't even know what those phrases are supposed to mean. Why else would you put them in quotes -- twice?

I can only guess that this is supposed to mean that capital somehow binds up prior effort into a claim on (others?) future effort?

That is a fiction (likely told to you by someone with "capital"). It's a fine theory, but it is only that. There is no physicality to capital in your definition. It is purely a social construct.

A more traditional definition of capital is that it refers to a physical machine which substitutes labor.

madaxe_again2• 11 years ago

Dude. Smith (WoN) and Marx (Kapital). Know your sources before shooting your mouth off.

dredmorbius3• 11 years ago

capital somehow binds up prior effort into a claim on (others?) future effort?

Actually, yes. Money is a lien on future production. Or demand rights. That's specifically what debt creates: an obligation to someone else for future efforts if the debtor.

nevinera6• 11 years ago

Corporations can be usefully described as 'profit-maximizers', but capitalism itself doesn't have a coherent behavior - you can't describe it as any kind of AI.

Sakes8• 11 years ago

AI is just a subset of intelligence. You absolutely can describe capitalism as an intelligent system since it is primarily made up of units (people) which are intelligent.

If capitalism didn't have a coherent behavior, then how could we ever rely upon it as a primary driver of our economy? It must be coherent and on some level understandable for us to make predictions around it.

nevinera6• 11 years ago

You can call an ecosystem 'intelligent' if you want to, I suppose, but there's not really any way to discuss it as a 'maximizer' when it has no goals and no intentional behavior. You could as easily describe water as a 'gravitational potential' minimizer - it has a collective aggregate behavior that you can characterize, but that doesn't make it intelligent by most definitions of the word.

If capitalism didn't have a coherent behavior, then how could we ever rely upon it as a primary driver of our economy?

It is not a 'primary driver' of our economy, it is a description of our economy. The primary driver of our economy is corporations - entities obeying a profit motive. They have behaviors, intentions, and goals - they attempt maximize shareholder profits. "Capitalism" doesn't intend anything, have any goals; it doesn't even have any non-emergent behaviors.

transfire2• 11 years ago

Nailed it.

mhb• 11 years ago

What we really want is a happiness maximizer but no one knows how to make one of those which leverages the innate characteristics of people. Capitalism seems like a pretty good system to pragmatically approximate this happiness maximizer.

Yes, there are negative externalities to capitalism including possibly maximizing short term happiness at the expense of long term. Is there something better?

Framing this in terms of the paperclip maximizer made this idea appear more interesting than it turned out to be.

unoti• 11 years ago

The root problem here is not economics, it is basic human nature. Humans have forever been seeking to increase their power base at the expense of others, and been corruptible by greed. This is not new, and it is not limited to capitalism. It's basic human nature, and it's one of our key weaknesses.

thiagoharry• 11 years ago

I'm not seeking to increase my power base at the expense of others. If I would get less money doing something that would make the world a better place, I would happily choose this. Am I not human?

I see this kind of answer as a kind of explanation widely disseminated to justify our economic system as inevitable, but which have very little scientific basis. For me it's wishful thinking.

The kind of economic growth observed in capitalism and some of its characteristics like the cyclic crisis not related with natural changes like climate is something unique to our civilization. And it's a very new thing at the human history (less than 300 years). What will be the effects of these things at long scale is something still to be comprehended.

Sakes8• 11 years ago

The problem with building arguments around human nature is that just about everything is human nature. Greed... Altruism...

* Edit for clarity *

So it can be invoked to justify almost any argument involving human behavior.

Retra4• 11 years ago

It's not so basic that it can't be overcome.

electricblue2• 11 years ago

War can only destroy capital, perhaps the most breathtaking destruction of capital in history was WWII. So War would be antithetical to this hypothetical capital maximizer and it would be it's among its top priorities to avoid it. Similarly, the market system based on human rationality is far too volatile for our capital maximizer, it would look to replace that ASAP.

Rhapso• 11 years ago

Economic systems are optimizers (each with slightly different objective functions).

One of the first things we learn about optimizers is that they are rarely globally suited to solving problems, and that the best technique is to identify and apply the locally optimal solution over the range of input.

TLDR: We need to admit that there is not a globally applicable economic system, and learn to apply different models where they are most efficient/least disastrous.

plutooo4• 11 years ago

It's a faulty analogy. In fact, a paperclip maximizer goes against every single principle of capitalism out there.

The paperclip maximizer is bad exactly because it isn't based on capitalism; it will maximize paperclips regardless of whether someone values them or not! At _any cost_, it will maximize paperclips.

Markets, on the other hand, have the goal of providing products/services that people are willing to pay for. It adapts. The more people value it, the more capital it will attract, and the more resources will be allocated to it.

irln3• 11 years ago

You've identified one of the key defects in capitalism today...the disconnect of a "true" market where value is measured by folk's willingness to pay for things.

plutooo4• 11 years ago

So, the problem is not enough capitalism? ;)

electricblue2• 11 years ago

Thinking about this some more, it would seem that if we really have a Capital Maximizer then the system's process toward its objective (creating capital) is highly inefficient. If your goal is to create capital in the world you need better infrastructure, after all what capital is more useful than that which can be easily used to create more capital? Long term, if you're a Capital Maximizer trapped on this planet, you only have a small finite amount of resources than can be converted to capital, you would want to spread out to other planets very soon. These are obvious things we aren't doing very well.

eli_gottlieb7• 11 years ago

There are currently a few rules crippling the Capital Maximizer:

1) Don't think in a longer term than five years. That's risky.

2) Labor is the worst expense to have, so minimize the amount of expensively useful work that has to be done.

3) Collude with others when it's gainful, but don't coordinate with others to get around rules (1) and (2). Coordination is for commies.

"It does often seem that, whenever there is a choice between one option that makes capitalism seem the only possible economic system, and another that would actually make capitalism a more viable economic system, neoliberalism means always choosing the former. The combined result is a relentless campaign against the human imagination." -- David Graeber

eli_gottlieb7• 11 years ago

Oh good. The Americans are rediscovering Das Kapital.

Forgive the snark, but when I first heard about paperclip maximizers, I thought, "Oh, you mean like capitalism." That these two things have a likeness is the reemergence of an idea that had been buried in order to make capitalism look good.

epx• 11 years ago

People fantasize too much about capitalism. The definition of capitalism is: capital and income are expressed under the same monetary unit (like mass and energy could be):

income = capital x interest rate

The former alternatives was to put capital in a separate "namespace". In Middle Ages, only nobles could have land and land was the only capital that could exist ("usury" was forbidden, you know). Then came mercantilism, that defined wealth as a quantity of gold that one had; and so on.

Capitalism will certainly pass, but hopefully not going back to restricting access to capital. I imagined something like a "complex" interest rate, with the imaginary part representing natural resources, while the real part is the human effort that is the only think currently measured by monetary unit. But bimetalism failed everywhere it has been adopted, I think that the imaginary part of a price would become dominant since natural resources are becoming the limit of economic output.

tpeo• 11 years ago

I disagree with much of what was written, but I find it hard to address what seems, to me, more like a long analogy than anything else.

"Capitalism" doesn't maximize "capital", in any sense. The word "capital" generally refers either: to some asset that might be used in production, such as a piece of machinery; or structures that might render services over a time, like buildings; or to some sum which might be used in buying either of these, through financial services.

Now, "capital" wouldn't be maximized by "capitalist" firms. Why should they? Firms produce additional capital units so long as they can be sold above production cost, but they won't produce indefinitely. They are concerned with their profits, not with the amount of product. They aren't even concerned with the products' value, so long as it is above production costs. Hence, there's no incentive to inflate the capital good prices, which would be necessary to maximize the amount of money "capital".

Also, an it really be said that capitalism is an adaptive intelligence system? That, I'm not knowledgeable enough to tell. On the other hand, human interaction is unstructured enough that it seems unlikely that there's any goal to such supposed intelligence, or that it has capital-maximization as it's goal. Rather, I see a collection of different goals, each corresponding to different agents, and some of which might even be contradictory. The noisy neighbor, the ambitious monopolist, or the NIMBY all seek to maximize their private benefit, but often beyond social benefits. Hence I find it hard, whenever markets fail through the presence of either externalities, imperfect competition, or adverse incentives, that it ought nonetheless be the work of some powerful demiurge.

Yet, in so far as it puts into words an anxiety that so many feel, I can't say much else beyond that I don't believe it. The author certainly proceeds by analogy when he likens "capitalism" to an artificial intelligence whose goals themselves mean nothing to humanity at large; and mentions alienating "monuments" to capital, as if to liken it to a 20th century pharaoh, or to cruel tyrant. But since so many feel this is really the case, I have nothing else to say (other than that it's a very vivid picture). I disagree, for instance, that the majority of goods are worthless, as they ought to have some value in order to be sold. Even Marx reckoned this much, and thinking otherwise seems like relying too much in the stupidity of others (which should never be trivially admitted). That would be the case if capital were built beyond all possible utility (say, like a bridge between London and NY). And I don't think it is necessary to make analogies to speak of wealth and income distribution issues, which are real problems in themselves, and which the majority of people are already acquainted with. Rather, I think that such analogies make problems much larger than they ought to be, by giving some monstrous character. Would be it be easier to tackle inequality by conceiving it as a result of an incredibly power artificial intelligence? I don't think so (even if the system is rotten, we'd be waiting on a constructive proof of one that isn't).

ArkyBeagle2• 11 years ago

Capitalism depends on price theory, which predicts that making too many paperclips will cause them to be in glut and the price will drop. So a paperclip-maximizing AI might oughta be built to take that into account.

dredmorbius3• 11 years ago

Point missed.

It's not that any one product is being produced. "Capital" (or profit or wealth) here is the combined market aggregate of all production. The problem is that this too, as with any single optima process, leads to madness.

In the case of capitalism, ecternalities, equity/equality, sustainability, and systemic global risk are all undervalued, and simple short-term profit maximisation tends strongly to "underproduce" these.

ArkyBeagle2• 11 years ago

I get the point - it's necessary to reanimate the mouldering bones of Malthus now and again. I just disagree with that because the emiprics of the case are pretty lopsided against him. He could not have known about engines. Which now appear to cause one whale of an externality.

The only thing Capitalism did was replace Mercantilism at scale. You had production before.

What's weird is that economists talk about ways to actually price things like externalities, equality, sustainability and/or risk. That might be madness or it might be reason.

If we can't price them, then are we not dropping the checkbook and reaching for the sword?

Capitalism is a paperclip maximizer

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