by Alberto Gross, CEO, Metal Convertibility, MCon- August 2020
Before the invention of computers, humans acted as their own computers. Through experience, a person absorbed information directly and converted that knowledge into valuable labor.
The core theme of economics, even society itself, is the exchange of labor. As economies became more diverse, bartering became unwieldy. The use of currency was one of mankind’s first “data revolutions.” By having all goods and services in a free market denominated in one fungible, standard coin, the value of everything was easily comparable.
Over the centuries, we have come to realize that not all data reliably makes it through the biases and emotional filters of the human computer. Human beings are intuitive and capable of making inspired synthesis between disparate concepts. We are capable of interpreting realities in vastly different ways that are all, still, imbued with undeniable truth. But it’s ironic that we invented the study of statistics, yet not always capable of understanding — or even believing — the facts it conveys. It is ironic that we invented computers but cannot hope to compete with even the most rudimentary ones in terms of raw computing power.
Anyone who has read Freakonomics, read about the well-known debates between leading mathematicians around the columns of Marilyn vos Savant, or, indeed, just encountered any kind of concrete data that reveals something completely counter-intuitive, knows that human intuition only gets us so far.
Perhaps in situations where limited time and perception have required us to act resolutely, despite not having enough information — to guess, in other words — intuition is useful.
But technology is quickly reducing the necessity of acting on intuition. In fact, it’s even reducing the need to make decisions. Via machine learning and artificial intelligence, computers are encroaching into the exalted territory of human intuition. Before, human beings used computers to “run the numbers” but then had to make the final decisions. This is no longer the case.
Due to the rapid advance of the availability of computing power, most people have the luxury of the productivity that computers (and smartphones) provide. But computers are only as good as the data fed to them, which is why collecting data has become an annoyingly widespread activity. We are asked to fill out surveys constantly, and social media and communications companies are pushing the limits of privacy laws to learn as much about each of us as possible so that their algorithms can tell corporations what we want and how much we’re willing to pay for it.
As has been the case since the beginning, knowledge has value. And data fuels our computers, the same as gasoline fuels cars, and those computers analyze that data quickly and turns it into value. The knowledge produced by computers is cold and objective. It is free from the biases produced by the human computer.
Data, today, is the invaluable edge which every business needs to thrive.
The next “data revolution” will likely manifest as a hybrid of the ones brought about by currency and computers. Today, we have dozens of major currencies being exchanged all over the world. We have trade barriers, protectionism, and differences in monetary policy. Value is lost every second via foreign exchange, tariffs, banking fees, and interest rate differentials. Imagine a global economy with a handful of liquid, global, electronic currencies where all goods and services in every country were easily comparable. Cost savings would be enormous, and the power of banks would be reigned in. With the persistent diversification into such things as Bitcoin and gold, we are witnessing the inception of just such a revolution today.
*This article was first published in Oct 2019.