Monthly Archives: August 2012

The Sophists

Stranger: Of hunting on land there are two principal divisions 
Theaetetus: What are they?
Stranger: One is the hunting of tame, and the other of wild animals.
Theaetetus: But are tame animals ever hunted?
Stranger: Yes, if you include man under tame animals. But if you like you may say that there are no tame animals, or that, if there are, man is not among them; or you may say that man is a tame animal but is not hunted-you shall decide which of these alternatives you prefer.
Theaetetus: I should say, Stranger, that man is a tame animal, and I admit that he is hunted.

Plato, The Sophists

With the Republican convention this week American election season kicks into overdrive.
I am often hard-pressed to explain this peculiar species of collective insanity to my non-American students, but I think no better description can be found than one written 2,500 years ago in Plato’s Republic with his descriptions of Athenian democracy and the sophists.

Of course, Athenian direct democracy was much different from the representative type we have today. In Athens the gap between a decision made and a consequence felt was nothing like chasam we have today, and in the sense of choosing their future, the Athenians really were sovereign. When the Athenian Assembly fatefully voted for the Peloponnesian War, they were sending themselves, their sons, and their colleagues to their potential death in battle, and would bear ultimate responsibility for the conquest of their city and the destruction of its empire.

In perhaps no way but when they sit on juries are citizens of representative democracy sovereign in this sense, nor is the impact of the power we exercise in elections so immediate. The responsibility for political decisions is handed to representatives or the president, and our society is so large that it is often others, for instance soldiers and their families, that bear the brunt of decisions which are almost invisible to us.

In the sophists, however, we get a glimpse of features held in common between the Greek and our own form of democracy. The sophists were wandering teachers, who taught many things, but what they excelled in most, at least according to Plato, was the art of persuasion. It is hard to not see what we would call a “political consultant” in Plato’s description of the sophists that he puts in the mouth of Socrates in the Republic:

Why that all those mercenary individuals whom the many call Sophists and whom they deem to be their adversaries do in fact teach nothing but the opinion of the many that is to say the opinions of their assemblies and this is their wisdom I might compare them to a man who should study the tempers and desires of a mighty strong beast who is fed by him he would learn how to approach and handle him also at what times and from what causes he is dangerous or the reverse and what is the meaning of his several cries and by what sounds when another utters them he is soothed or infuriated and you may suppose further that when by continually attending upon him he has become perfect in all this he calls his knowledge wisdom and makes of it a system or art which he proceeds to teach although he has no real notion of what he means by the principles or passions of which he is speaking but calls this honourable and that dishonourable or good or evil or just or unjust all in accordance with the tastes and tempers of the great brute Good he pronounces to be that in which the beast delights and evil to be that which he dislikes and he can give no other account of them except that the just and noble are the necessary having never himself seen and having no power of explaining to others the nature of either or the difference between them which is immense.” (Republic 191-192)

What the sophist excel at, Plato seems to be saying, is the science of how to seduce the crowd, and you seduce the crowd by finding out what it wants, and giving it to it, or finding out what it hopes, and promising to deliver those hopes, or what it fears, and convincing them that you will protect them from those fears. To hell if what the crowd wants is foolish or unjust, or what it hopes for is an impossible fantasy, or what it fears an irrational paranoia.

I think nothing better sums up this years election and both the Democrats and Republicans are guilty here.

On the Democratic side, you have a campaign of micro-mobilization in which segments of the population are mobilized by fear. Something, I think, of the assumptions behind the political elites can be found in the comments of the former DNC Chair Howard Dean who said recently on an episode of This Week with George Stephanopoulos “Campaigns are not for educating”, (@39min).  The obvious assumptions here being both, that the public needs to be educated, and that the true purpose of campaigns is “mobilization”. What  we do not see here might be something we could learn from the ancient Greeks minus the sophists, that politics is about discussion and debate between adults around choosing the right course of action.

Republicans, of course, don’t escape this criticism. Not only was the micro-mobilization around fear, in this case homophobia, pioneered by Karl Rove , but Romney himself might be the best example we have had of Plato’s sophist, having given the liberal Massachusetts, while he was governor there,social goods such as publicly funded health care that he now wholly disowns to curry favor with the Republican base. Just the most prominent of his many flip-flops that include everything from abortion to global warming and then some.

In this atmosphere of politics as mass mobilization the Supreme Court’s 2010 Citizens United decision, declaring large portions of the Bipartisan Campaign Finance Reform Act, better known  Mccain-Feingold, unconstitutional is an unmitigated disaster.

Plato disliked oligarchy almost as much as he disliked democracy, and it’s easy to see why. In an oligarchy decisions are made on the basis of the interests of the rich, interest again, that more often than not bear little relationship with justice, or even the smart thing to do.

If the poll numbers actually reflect reality then this race really will come down to a matter of who had the best mobilization strategy and the differing strategies of the campaigns were dictated by their varied finances, which have largely been a reflection of their differing attitudes towards the super-rich.   Big money players, most notably George Soros, have largely soured on Obama this time around, something which has thinned the president’s war chest and forced him to follow a slow-and-steady ad-campaign strategy. Romney, on the other hand, flush with cash from mega-rich funders such as the casino magnate and Israel hawk Sheldon Adelson, intends to flood the airwaves with ads from the convention forward.

Surely, what these super-rich contributors hope to “buy” with their massive donations is some degree of influence on the president. Soros soured on Obama after the latter seemed uninterested in listening to the advice of the financial alchemist. Adelson wants lower taxes, and an aggressive stance towards Iran. Why American policy should be any more influenced by these men because they can fund political campaigns than by reasonable arguments about what is best for the country, arguments that can be made by experts and laymen alike, without a similar wherewithal to finance an untold number of television advertisements is beyond me.

Once you base your campaign on large donations from a select group of individuals whether they be what is typical- socially liberal Hollywood types on the left, or business tycoons on the right, what you profess is bound to the views of those paymasters, which is why the most interesting characters in American politics are often politicians with a very low level of support among the rich.  Here you find characters like, Ralph Nader, and on the totally other side of the political spectrum, Ron Paul, who despite his libertarian views is supported mostly by small donations from individuals.  Even, someone like, Ross Perot, was not so much supported by super- wealthy donors, as he was so rich himself that he was actually able to do that rare thing in politics- actually speak his mind.

For all that said, in this election, like all the others I will bite my tongue and vote, (though I can certainly understand why others, out of principle, will not)  for it is the only small piece of influence I have to exercise over the direction of my country, but there has to be a better way; there has to be a way to have more nuanced conversations, for citizens to actually deliberate on the questions at hand and decide on the course of the future for ourselves and our children. There has to be a way to break the spell of sycophants and regain the sovereignty of democracy, for how many more elections will we have to go through run by the logic of sophists?

Pandemonium, Kingdom of the Quants 3

THE SPELL-CASTERS 

Back in the stone age, when I was a teenager, I had the good fortune of hanging out with a pretty eclectic group of people. Among this group were a certain subset who might be called spell- casters. These were individuals who, quite literally, cast spells to deal with the problems of everyday life: to get the girl, the promotion, or even just pay the bills.  Hanging out with this crew didn’t score many points with the authorities at the conservative Catholic school I attended.  Some, no doubt well meaning, busybody actually informed my parents that my soul was in danger. Had this person , or the school priests, who wished to save my soul, actually been able to step inside my mind, they wouldn’t have sought to sever my ties to the “devil worshipers”; they would have confiscated my copies of Carl Sagan’s Dragons of Eden and Cosmos, they would have burned my worn out paperback of Nietzsche’s Beyond Good and Evil, and forced me to read the Christian heavy hitters of Kierkegaard  and Dostoevsky, the latter who I especially adored.

I was not a member of the spell- casters, I was more like their sceptic mascot. I really enjoyed sparring with them, and it may seem odd, but I think they felt the same. For both me, and for them our arguments were ways to clarify our own thinking, to chart our divergent spiritual paths. I don’t remember much of anything but the tenor of these discussions except for one, and it has stuck with me all of these years.

Once, I was asking one of the spell- casters to explain to me the physical mechanism for how they were supposedly able to influence others with their ritual mumbo-jumbo. Was it brain waves? Pheromones? What?

Without really hesitating he responded that“it was like money”.

What?!

He continued that “money was a talisman, that grants its holder power because others believe in its power” that he, as a spell-caster, really only had power over those who already believed he had power to begin with, that I, as a sceptic, was largely untouchable, in a way that those, such as the Church who believed in his magic, but just thought it came from a place of darkness, were not.

The idea stuck in my head… money was a talisman.

Years later I encountered this same idea in a totally different context in William Greider’s conspiratorial sounding: Secrets of the Temple, How the Federal Reserve Runs the Country. I have not been able to locate my old, no doubt, dust covered copy of Greider’s excellent book, and have not read it for perhaps a decade, but I will try to remember as best as I can, and will turn to Greider when I come to the issue of the Federal Reserve.

As far as money being a talisman, Greider, from what can I recall, repeated the same point as my spellcaster friend. Money had something of our primitive magical thinking behind it, we had to believe in it to make it real.

I came back to this idea in the context of this series of posts because it seemed to suggest something about the connection between our current economy and idolatry. I thought for sure I would be able to find all sorts of evidence for money having originated as a talisman- which, by the way, is different than what we would call a charm- say your lucky rabbit’s foot. A talisman is an amulet that covers certain powers, such as powers of seduction, or the power to attract wealth etc.

I was able to find anecdotal evidence that money came into the world as a talisman. Take the picture above. On the left is a picture of traditional Chinese coin (Tang Dynasty 7th and 8th centuries AD), and on the right is a traditional Chinese talisman. (Shang Dynasty 16th- 11th centuries BC).  I, for one can’t tell the difference, but such does not an argument make.

Instead of finding surefire evidence that money had originated as a talisman, in my search, I discovered a fascinating story about the origins of money and debt themselves: David Graeber’s Debt the First 5,000 years, and it is from there that I think this inquiry should continue.

Graeber sets out to tell the history of debt, but this seems to require that he provide a history of money, for the two are inseparably combined. Like many other people, I had always imagined that money had emerged as an advance over systems of barter.
But, as long as we take the findings of economic anthropologists and economic historians into account, this idea appears to be a myth. According to Graeber not one anthropological or historical example of money emerging spontaneously from barter has been observed.

Historically, money seems to have first appeared in Ancient Sumer as a form of temple credit, allowing priests to keep accounts with the local population, and then evolved into a more general system of credit-money.  Niall Ferguson, in his documentary, The Ascent of Money, has a cool scene (@9 min) in which he is holding one of these clay credit-money pieces in his hand. It’s inscription reads that the possessor of the tablet is owed so much grain by such-and-such. That “possessor” part is important because it implies that these tablets were transferable.

In Graeber’s tale, this credit money was supplanted by coinage with the rise of empires. He sees the dual-evolution of coinage and the state this way: the state needed to pay its new professional soldiers in some way, and money was an ingenious way they could do so.  The state created coins, gave them to its soldiers, and then asked for them “back”, not from the soldiers, but as a tax on its merchants and farmers. These merchants and farmers were thus compelled to accept payment for their goods from soldiers in the the form of the state’s coins. The state had created its own perpetual motion machine- for war.

Many people on the right today, at least in America, seem to associate “hard-money”, that is money backed by gold, with a weak state. Graeber thinks the relationship actually worked the other way around. Hard- money is the surest sign of a strong state, and the vector through which the state imposes taxes. Eras of hard-money are also incredibly violent, after all, they signal that large armies are marching around. They tend as well to be eras of mass slavery- classical, African. The two major hard-money eras, in the West, Graeber thinks, were those between the birth and fall of the Roman Empire, and the period from the early 1400s to the mid-20th century.

Hard-money has a rival in the form of credit-money, and the two tend to oscillate over great arcs of history and over a very wide historical expanse. The great period of credit-money was from the fall of the Roman Empire until the early 1400s, and its most important developments took place outside of the West. Both China, and the Islamic World, had thriving, credit-based economies for much of this era. The Islamic World, especially, developed a rich market-based economy that was largely free from government interference, and many of the financial innovations that later made their way to Europe were begun here.

Periods of credit-money have a tendency to also become eras of debt, and this debt can sometimes be horribly de-humanizing. As the father of two daughters, the idea of the “bride-price” struck me on a particularly visceral level. In certain eras and places daughters became “collateral” for loans. This was actually the standard by which the dark age Irish judged something’s worth, by the abstract value of not just another human being, but your very own child.

The answer that credit-based societies have come up with for the problem of debt is essentially to ban interest on loans, especially high rates of interest, or usury.  Graeber sees no anti-commerce logic to these bans on charging interest. Muslim society, for instance, has been, and is, an extremely commerce based society that, even to this day, largely looks askance at interest bearing loans.

The Catholic Church, having taken Aristotle seriously, held that interests bearing loans had something unnatural about them.  Money, in ages where it is based on credit and not coin, was seen as a social convention, nothing more, and nothing less. Charging interest on a “mere idea” seemed to the Medievals to be asking something lifeless to generate itself, to have “money beget money” in the same way life begat life.

The credit-money era of the Middle Ages did not so much end as became a hybrid-era of both credit-money and cold hard cash, and it was this hybrid quality which I think Graeber is suggesting helped give rise to capitalism, which really was something new under the sun.

A barbarian like Hernando Cortez was literally insatiable for the gold of the Americas, and it’s this insatiable quality which was somewhat new. Why did Cortez not rest free and easy on a caribbean island after he had won the lion’s share of the biggest of the biggest gold booty in history- the riches of Tenochtitlan?  Graeber suggest it was because he was in debt up to his eyeballs with interest bearing loans he could never hope to repay- even though he had conquered one of the greatest empires on the globe.

It was this idea of being designed for limitless growth that was new, something that came into being most clearly a half a century after the death of Cortez with the creation of the Dutch East India Company. This company was a public-private partnership whose mission was the domination of the spice trade, which paid its soldiers in gold coins, and was built from loans- in the form of shares- that could never be repaid but required the outlay of “dividends” to the stockholders. Issuing more stock for supplies for imperial expeditions, meant more dividends would have to be paid,  and therefore the gain of more control over the spice trade secured- a control that was largely “bought” by the force of arms.

Here I am going to step aside from Graeber, and lean on what I can remember from William Greider’s Secrets of the Temple, for while Graeber is great on economic history up until the slave trade, his take on contemporary history is a little thin and I think Greider can fill in that gap.

Since the 1700s, we seem to have been slowly moving back towards the idea that money is a social convention. Since then we have oscillated between hard-money (paper backed by gold) and soft-money (paper based on credit) with every era of hard-money seeming to end in a deflationary crisis as money dries up, goods plummet in value, and loans become unbearable, followed by an era of soft- money, in which credit chases its’ own tail, goods become too expensive to buy, and manic asset bubbles emerge, some large enough to take down whole economies.

The problem is simple to state, and incredibly hard to solve. If money is a convention then we can make as little of it or as much of it as we want, but neither choice is without huge consequences. Print too little, and the economy literally seizes up, like a car engine running without oil. Print too much, and everything rises in value, people find themselves drunk on inflating asset prices, and the whole balloon eventually bursts.

Governments tried to control the inflationary potential of paper money by pegging it to a high level of gold. The problem here is that this money was often way too hard, especially for debt holding farmers. William Jennings Bryan’s “Cross of Gold” speech was essentially a cry to east coast bankers to soften the value of the dollar and therefore ease the debt burden of Midwestern farmers.

After the Great Depression, capitalist countries tried to steer a middle course with the value of the new global currency- the dollar- pegged to gold under the Bretton Woods system, but with governments following an inflationary policy of high spending even in good times. In the early 1970s this system blew apart: Nixon abandoned the gold peg, and inflation took off like a rocket. This only ended when the central banks, most notably the US Federal Reserve was given real control over the value of the currency, and they took the side of hard-money, only this time it wasn’t based on gold, but on strictly limiting the supply of money itself.

In 1980-81 the chairman of the Federal Reserve, Paul Volcker, essentially convinced the markets that their inflationary expectations regarding the US currency were no longer true, by hanging a sword of Damocles over the American economy’s head. Whenever the American economy grew so fast as to cause inflation the FED would slam on the brakes of money creation and raise interests rates as high as they needed to go to constrict the money supply and squeeze out inflation- even if this lead to rates of unemployment touching 8 percent.

In terms of taming inflation, this certainly worked. In terms of American living standards- not so much. The strong dollar helped push high paying factory jobs overseas. Volcker, and his successor Alan Greenspan effectively ended the rise in American wages by keeping wage inflation, which had previously ran ahead of price inflation being linked to COLAS in labor contracts, under strict control.

Greider’s work leaves us off in the 1990s, but it is easy to pick up the story from there.

During the same time American wages stagnated, the financial innovations and speculation that were discussed in my post on the quants proceeded apace. The “net-worth” of the middle class became tied not to income, which was frozen in time, but to assets- the value of their homes, and their stock-portfolios, both of which seemed to expand towards the stars. Eventually the staid deposit-banks themselves wanted in on the action- the road to systemic collapse. For many, including the quants, the best way to make money, it seemed, was to have “money beget money”, in the Medieval phrasing, or, to use our modern flavorless terminology-  “financialization.”


The graph below captures the transformation:

We know where that led.

Whether or not it needed to be done to save the economy, it makes perfect sense that the FED, which had spent a generation fighting for hard-money despite its costs on the working class and poor, would totally reverse course and move towards soft money; it was saving itself. Opponents of the FED on the right have it only half correct- the problem with the FED isn’t that it aims at weakening the currency, the problem, it seems, is that the FED will only definitively do this when the interests of its primary constituency- the financial sector itself- is at stake, and not, it seems, for any broader public interest.

All this, by the most circuitous route imaginable leads me back to the spell-casters with whom I began this post. These were working class kids, and they really were just kids, even if they were living independently, who were living near Bethlehem, Pennsylvania- a place that a generation before had possessed one of the most vibrant steel industries in the world.  By the early 1990s the industry and its hard- but- certain road to the middle class was gone. These kids had no hope of college and made their living working in warehouses moving around goods made overseas, or in malls selling the same, both bought with strong American dollars.

How surprising is it then, that with a hard- but- certain road closed, they would turn to a seemingly easy, yet probabilistic one? The worldview of the spell-casters seems to resemble the fantasies and nightmares of the quants, in the same way Graeber writes of tribal peoples who projected the world of their Western conquerors into strange nightmares of warlocks and zombies. The spell-casters had their Aleister Crowley, and the quants had their Alpha. Both were trying to load the dice in their favor, for to not win the game was to look out onto a future of bleakness.

Pandemonium, Kingdom of the Quants 2

THE QUANTS

Quants is a term for a breed of mathematical wizards who, from the early 1970s forward, essentially built the computerized system of finance we have today. Before the quants, Wall Street types were largely made up of testosterone filled, play- by- the- gut traders- (think Gordon Gekko of the 80s classic- Wall Street- though no doubt with harrier  knuckles than Michael Douglas.) After the quants, Wall Street would be filled with refugees from the world of quantum physics or other math heavy branches of the sciences. Its myriad of financial transactions would be no longer be based on the gut instinct of human traders, but run by advanced algorithms that churned away the world’s daily business within a bewilderingly complex network tied together through satellites and fiber optic cables that literally circled the globe. The world for the first time had truly become “one world” with everything of value in it symbolized in electric strings of ones and zeros.

How did this come to be so?

A book probably destined to become the definitive story of the rise of the quants is the Wall Street Journal’s Scott Patterson’s The Quants: How a new breed of math whizzes conquered Wall Street and nearly destroyed it. Patterson begins his story with Ed Thorp, who started his career not as a Wall Street trader, but as an academic with a penchant for gambling.

The journey to quantdom began with the quest to beat the roulette wheel. Thorp was sure he could figure out a “scientific system” to predict where the ball would fall, and thus conquer chance and make himself a fortune. He found an unlikely ally in the economist, and gagater, Claude Shannon.

In a scene that reminded me of the 60s classic Get Smart, Patterson recounts how Thorp and Shannon invented a roulette computing computer that was placed in Shannon’s shoe. Shannon would relay the predictions to the roulette playing Thorp through a radio device in his ear. The scheme, of course, went nowhere, and could have ended up getting the both of them killed. Thorp, however was not to be deterred, chance could be beaten, even if it wasn’t the chance of the roulette wheel. He turned his attention to BlackJack, where he did, indeed, come up with a winning strategy that he would turn into a best selling book- Beat the Dealer.  With one kind of chance beaten, Thorp set out to conquer another, and he set his eyes on the biggest casino in the world, the one found on Wall Street. Thorp’s core method, as it would be for all quants, would be to use advanced computers, and highly sophisticated mathematics borrowed from the physical sciences, to divine the future of the market, the outcome of the great financial game, and in the process make a killing for himself.

Thorp, who with philosophy major, Jay Regan, started the computer based trading firm Thorp and Regan, was but the first of a flood of people with an advanced mathematical background who would stream into Wall Street, especially after the 1980s, enabled by financial deregulation, the explosion of super-fast and relatively inexpensive computing, and the development of sophisticated mathematical finance.

Thorp’s quant brethren, a good deal of whom also had a taste for gambling included: Ken Griffin (Citadel Investment Group), Cliff Asness (AQR Capital Management), Boaz Weinstein (Deutsche Bank), and Jim Simons, who emerged from the super-secret field of military cryptography to create what is perhaps the most successful quant fund in the world (Renaissance Capital Management).

I should step aside from Patterson’s narrative for a moment and provide a general picture of the historical circumstances that coincided with the rise of the quants. The quants were just one of many groups linked together by newfound faith in “the market” that had emerged from the failure of Keynesian economics. To overly simplify the matter, Keynesianism, which had grown out of the collapse of the global economy in the 1930s, held the position that government managers should interfere with the economy to prevent a rerun of the Great Depression, and perhaps more importantly, believed that such interference with the economy would work. This interference was largely what is called “counter-cyclical”. When recession struck the government would run up huge budget deficits to keep unemployment from going so high that it would derail consumer spending, thus, in theory, avoiding the vicious circle of unemployment-less spending-more unemployment that had characterized the Great Depression.

By the 1970s, Keynesianism was a spent force. Yes, another Great Depression hadn’t occurred, but Western economies became mired in unemployment and seemingly intractable inflation as this great sketch by comedian Father Guido Sarducci illustrates better than any economist could.

The revolution that Ronald Reagan (though Reagan with his oversized budget deficits was perhaps more of a Keynesian than some would admit) and Margaret Thatcher launched in the early 1980s would assert not only that markets were smarter than any government manager, but that giving the freest reign possible to the markets would eventually lead to prosperity for all.

The argument between those who favored some sort of government management of the economy, and the proponents of the wisdom of the markets, was at root an epistemological argument- an argument over how knowledge worked. The Keynesians might have argued that if an economy was to avoid the kinds of crises experienced in the 1930’s you needed able management at the top, an expert who kept the ship on course. The position of the market proponents was that knowledge was best processed from the bottom up, as individuals made decisions based on their interactions with one another. Based on these interactions, the sum of all individual interactions- the market- was an order of magnitude smarter than any individual bureaucrat who by necessity had to understand the economy on an abstract level, and thereby risked losing so much of the economy’s actual detail that they lost touch with reality itself.

To return to Patterson’s narrative, the strange thing about the quants is that they were both true believers in the free market, who simultaneously held that they were so smart that they could “beat the market”-the title of one of Thorp’s books.  This idea that the market could be outsmarted flew in the face of the prevailing theory of how markets worked, the so-called,  Efficient Market Hypothesis. The idea behind the EMH was that markets were always smarter than any individual or subgroup because markets reflected the total of information exchanged between individuals.  If you own what is called an “Index Fund”, through your 401K  at work, or for some other reason, your retirement future is built on the assumption of the EMH. That is, an Index Fund buys an entire market assuming that there is no way for human beings to be able to pick winners and losers- the hope being that winners out number losers over the long haul.

Quants certainly believed in the wisdom of the market. They even had a word for it “Alpha”, the website Seeking Alpha, and the hedge fund magazine Alpha get their name here. What the quants believed was not that the market was wrong, but that it was slow. If, through their sophisticated mathematical models and lightning fast computers, they could get to the “Truth” first- say by buying up a stock that their models told them was about to rise in price- they could make a killing. And many of them did just that.

Here’s Patterson on the quest for Truth of the quants:

The Truth was a universal secret about the way the market worked that could only be discovered through mathematics.  Revealed through studies of obscure patterns in the market, the Truth was the key to unlocking billions in profits. The quants built gigantic machines- turbocharged computers linked to financial markets around the globe- to search for the Truth, and to deploy it in their quest to make untold fortunes. The bigger the machine, the more Truth they knew, the more they could bet. And from that, they reasoned, the richer they would be. (The Quants, p. 8)

The quants, using their sophisticated mathematics were largely responsible for the creation of a whole host of financial exotica, such as Credit Default Swaps, that came to the public’s attention with the financial collapse of 2008. Many of their creations were meant to hedge risks, thereby “guaranteeing” profit, and became a large component of the delusion that human beings had gotten so smart that full-blown financial crises were a thing of the past. Economists called this lack of crises, what proved to be a mere calm before the storm “The Great Moderation”- a delusion that was believed in all the way up to Federal Reserve Chairman, Alan Greenspan himself. Once the valuation models the quants had devised to price their exotic financial instruments was shown to be an illusion, the financial institutions that held them started to unravel.  As the financial system verged on the edge of collapse in 2008, the quants models, which predicted that the market would soon return to equilibrium, stopped working. Panicked investors were not acting as the model of human beings as rational actors would suggest. Quant funds were forced to join in the massive selling, or risk being wiped out entirely, as the value of not just the exotic instruments they invented, but the market itself, evaporated in the biggest decline since the 1930s.

There had been lone prophets who tried to point out the fundamental errors in the models of the quants. One of these prophets was the mathematical genius Benoît Mandelbrot who, way back in the 1960s, observed that many markets rather than reflecting the smooth structure one would expect from a phenomenon of rational actors looking for the best price, was instead filled will all of these crazy spikes as prices alternatively soared then crashed. A more contemporary critic of the quants was the trader and writer, Nassim Taleb, who pointed out that the mathematical models of the quants, which were based on the physical sciences where predictable averages- Gaussian bell curves- were the order of the day (say the average human height- Mediocristan) did not work in the realm of economics because it was prone to extremes (say a sample of average income with Bill Gates in the mix-Extremistan).

The cries of the prophets were for-not until the whole system reached a point of near implosion.  An implosion that was only halted by a massive Keynesian intervention and reinflation in the form of bailouts and stimulus aimed largely at the financial sector, but also elsewhere (GM) by the world’s most powerful governments and their central banks. An action that almost certainly lacked much, if any, democratic legitimacy, and that, while probably having saved us from a full-scale implosion of the global economy, has not allowed us to escape what is proving to be a long“soft-depression”. Indeed, if the current crisis in the EU portends the future, governments may have merely postponed an economic reckoning that will likely now be centered on the bloated finances of the governments of the rich countries rather than the financial markets themselves.

This may seem like a particularly long and drawn out detour from what I had promised in the post preceding this one, that is, to apply what I had learned from David Hawkes’ reading of Paradise Lost to the quants. So, without further ado, let’s see where this takes us:

I should say right off the bat that what I am about to do is apply religious concepts to secular phenomenon. This might strike some as vulgar and a debasement of spiritual concerns. I understand this concern, and think it real myself, but nevertheless find this effort worthwhile. My suspicion is that when we peer underneath things we today believe to be wholly secular, we will find ideas that have their origins in religion. The reason we likely don’t recognize this is that ours is the first truly secular age,  that is, it is the first age whose social conventions are devoid of any explicitly religious context, or, in other words all other ages have approached both the human and the natural world through religious ideas. It is from this realization, not from any sense of my own personal religion or spirituality (I have little of either) that I think approaching the world using religious concepts is sometimes helpful, and this is the case even if the current religions are no more “real” than the religion of the Greek gods.

To continue: It would be a mistake, I think, to believe the quants were brought low by the vice of greed alone, and Milton/Hawkes can perhaps help us see why.  The broken relationship (sin) that underlies the whole of Paradise Lost is the sin of idolatry, and for our purposes, one can see this most especially in the construction of the capital of Hell, Pandemonium. The fallen angel Mammon (again meaning money) whose vision becomes the basis for Pandemonium was, while he was still in Heaven, transfixed by its beauteous gold. Mammon confuses this mere symbol of Heaven’s beauty for the beauty of Heaven itself. If its golden visages could be duplicated, in the logic of Mammon, then the fallen could recreate Heaven in what was actually Hell. It is this confusion, of the power brought to us by money, Milton seems to be telling us, with the powers of Heaven and of God, which is the danger point of our relationship with earthly wealth, rather than the animal-like greed for more and more. Mammon’s Pandemonium, is perhaps, like the beautifully decorated Anglican (and before that Catholic) cathedrals that dotted England in Milton’s day, a confusion of style over substance, an affront to the idea of God as the source of charity and love.

Ultimately, this boils down to an argument over what we should attend to during this short life of ours. The quants were, without doubt, brilliant individuals. Yet, they chose to use this brilliance not to seek out cures for disease, or find ways to aid the poor, or even to unveil the beauty of creation through science, but sought the generation of riches for themselves, and wealth for the already well off members of the hedge funds they managed. (Hedge funds, by law are limited to people with a minimum of a million dollars in assets).

The quants might respond that the wealth they were chasing would eventually make its way down to the lower classes like manna from Heaven. It would be a difficult argument for the quants to make in regards to the poor, given how hard the financial crisis, in part caused by the quants, has been on the least well off. It would be just as difficult a case for the quants to make for the middle class whose imaginary wealth- the value of their houses and stocks- disappeared as quickly as the electrons it was made of, once the power of cheap borrowing, of leverage, short- circuited.

It is not merely, however, the fact that the quants could be accused of idolatry in the sense of their worship of wealth, of which many could be accused, but that they were guilty of idolatry in that they both exalted their own idea of “truth” in a way that was almost quasi-religious, and that they practiced what was in a sense a form of divination.

On the first point: the mathematically inclined seem almost cognetally prone to a form of Platonism. That is, they tend to look at numbers not as mundane symbols to be manipulated for our purposes, but as part of some sort of higher reality whose truth stands above all human convention. You get this weird faith in the ability of numbers to capture reality in the most practical of people, “show me the numbers”, means the same thing as show me the truth, a phrase whose underlying assumption is that the truth can best be captured by abstract digits.

For the quants, “Alpha” was not some limited model of the financial world, but the deep, underlying truth of the it. Alpha was not a symbolic representation of the market, but was the market itself. The fact that this idea was neither rational, nor pragmatic, but instead constituted a sort of faith, can be seen in the fact that the quants’ belief in Alpha was not subject to doubt. Critics, such as Benoît Mandelbrot, or Nassim Taleb weren’t really engaged or answered, they were brushed aside because they didn’t conform to this “faith”. In an earlier age, such heretics might have been burned at the stake, but in our humane present, they were subject to the intellectual equivalent- they were ignored. This blind faith was only called into question by the quants when their “god” failed them and their models were shattered by the hammer blows of reality.

On the second point, I don’t think it is surprising that many of the quants started as gamblers, and not just because Wall Street is the greatest casino on earth, which it certainly is. Rather, gambling has a deep relationship with divination, and what the quants were really trying to do was peer into the non-existent future in order, as all divination does, to assert control over the existent present.

It’s a chicken-and-egg- question of whether gambling or divination came first in human history, and for all intents and purposes, it seems the further we go back the more indistinguishable the two probably become. The fact that a person’s future could be predicted using cards- the modern version of this is, of course, the Tarot deck, or dice, makes perfect sense if we put ourselves into an idolatrous frame of mind- which is essentially the frame of mind of almost all pre-scientific forms of thinking. The key mistake of idolatry is to confuse the symbol with the symbolized. This mistake seems to naturally imply that the more “like” the actual thing our symbol for something is, the more it actually is the thing being represented. An individual life is subject to chance, therefore, if we know the outcome of a game of chance we will be able to predict what will happen in an individual life.

The quants did almost precisely this with their models. What they did is construct extremely sophisticated chance games with one caveat: that the outcome of the chance games would trend towards the equilibrium of the Efficient Market Hypothesis. Like a fortune teller they played their Tarot decks, and then confused the outcome of these games with the economy the rest of us make our living in. Perhaps like the gut-level traders they replaced, and like the successful fortune teller, much of their initial luck arose as much from their intuition as their models. Perhaps, too, like the successful fortune teller, many of them were supremely good con-men who were quick to recognize and exploit the vulnerabilities of people who believed in their predictive power.

This world the quants had helped create only became supremely dangerous for the rest of us when the gap between their models and reality became too wide, or worse was ignored. The fall of idols is always difficult to bear, and given the fact that the larger economy had become tied up in the belief in these false models, their being proven false couldn’t help but affect the vast majority of us who had never heard of a quant or a hedge fund or, or algo-trading, or a credit default swap.

The markets were only saved when the public and quasi-public institutions, the world’s most powerful governments and central banks- (the latter, which especially, had up to that point, been the most vociferous proponents of the virtues of the free market) both turned tail and “got Keynesianism” flooding the markets with cheap cash. This magical elixir to cure the burdens of debt, however, was one limited to the richest institutions and elements of society. Financial deregulation and the exotic instruments devised by the quants had turned the creditors into their own debtors, and these debtors would be cured by the magic of cheap money, a concoction brewed by the world’s central banks who had previously treated even the hint of cheap money like poison.

Something seems to be seriously wrong with our financial system, something that reaches back long before the quants, and touches upon the fundamental assumptions behind the seemingly oldest elements of our economic life- money and debt. Which leads me to the last question along this train of thought:

How might something seemingly so essential to our lives as economic creatures, our money and our debt, be viewed through the lens of idolatry?

Until next time…

* Scott Patterson, The Quants: How a new breed of math whizzes conquered Wall Street and nearly destroyed it, Random House, 2010

Pandemonium, Kingdom of the Quants 1

You wouldn’t think an epic poem from the 17th century that dealt with a war in Heaven between the angels of God and Satan, the creation of Hell, and the fall of Adam and Eve, would have all that much to tell you about the 2008 financial crisis, or, on an even deeper level, would reveal the whole of modern economics to be based on a sort of magical illusion, but you would be wrong. John Milton’s great epic, Paradise Lost does both of those things, and perhaps much more besides.

For those of you who haven’t read Paradise Lost in high school or college I will briefly lay out the story below. I have to admit that I came very late to this book, and hadn’t read it in either high school or college. Once I had I was somewhat upset I hadn’t done so earlier- it is truly one of those books that grab you and change the way you look at the world. All I can say is read this book, and don’t think you can “wait for the movie”, it’s been canceled.

The story is one that probably anyone with even a modest Christian background in some sense already “knows” even if they’ve never heard of Milton. It is the tale of Lucifer and his angelic allies’ rebellion against God, the Son of God, and the angels that remain loyal to their Creator. Lucifer’s rebellion is sparked by his claim that angels are “self-begot”, and therefore owe no worship to God and his Son. The rebels are single-handedly casts out of Heaven by the Son of God, and into the depths of Hell, where they become monstrous, shift-shaping demons. Under the encouragement of the demon, Mammon, (literally “money”), they build Hell’s capital of glittering gold, Pandemonium. This city is supposed to replicate the glorious visages of Heaven, but, though more splendid than any earthly city, remains but Heaven’s pale shadow.

Satan plots his revenge against God, and finds his opportunity in the weak link of God’s new creation- Adam and Eve. After a courageous and epic journey through the depths of Hell, Satan makes his way to the earthly Garden of Eden, where in the form of a serpent, he convinces Eve that the Tree of  Knowledge of Good and Evil God had commanded her and Adam not to eat of on pain of death, is instead the means to upgrade to a god herself.

Ye eat thereof, your eyes that seem so clear,
Yet are but dim, shall perfectly be then
Open’d and clear’d, and ye shall be as gods. (286)

Eve takes the bait, and Adam the ever dutiful husband follows her lead. Rather than leading to godhood, eating from the Tree of Knowledge results in the couple’s expulsion from the Garden and the beginning of the sad fate of human beings until the arrival, promised to Adam by the archangel, Michael, of the Messiah.

You might be asking yourself by now what in the world such a religious epic from an era so unlike our own could possibly have to do with such a real world event as the financial crisis of 2008? Surely, the state of contemporary economics is not so bad that it needs to pull from the pages of religious mythology.

Allow me in what follows to engage in a flight of fancy. What I intend to do below is ride out what is a largely unsubstantiated set of assumptions, a claim, as it were, that has only the barest minimum of research behind it. CRITICISM of such a wild set of assumptions is not only to be expected, but HOPED FOR on my part. For the last thing I would want is to turn some random thought that entered my head into some sort of IDOL, that I refuse to allow to be criticized, or much worse, have DISPROVEN.

Here then is my idea: that one of the best ways to understand the financial crisis that broke upon us in 2008 is not through any of the competing economic models out there which have emerged largely ex post facto to explain the crash, but through the lens of an idea that emerged out of religion- the idea of idolatry.

This idea, in large part, was inspired by David Hawkes, the editor of the brilliant 2005 edition of Paradise Lost I have in front of me. It is Hawkes’ point that what Paradise Lost offers us is an extended meditation on idolatry, and that the concept of idolatry can provide us with a useful guidepost, even when severed from its original ground in the Jewish, Christian or Muslim faiths. That Milton’s great work might be read as a prophecy of our own age of secular idolatry.

Hawkes sees behind Milton’s Paradise Lost, though it is embedded in religious language, what was to become philosophy’s famous distinction between the “thing” and the “thing in itself”. The awareness that we can never know the world as it truly is, but only as it is mediated for us by our senses, and perhaps most especially by our ideas, one would today call them models of it.

The only being who can know the thing in itself, in Milton’s reading of it, is their Creator and thus the world of the created, including the angles, are in a state of alienation in reference to the world.  (XXX-XXXI)

Our inability to know the world as it truly is does not, however, stop us from trying. Far too often in our quest we believe we have reached that unreachable destination.

This seemingly innocent confusion of the map for the territory, the symbol for that which is symbolized, is not, in Hawkes’ terms “ethically neutral”. Instead the thing in itself, which only God can see, becomes confused with the image we hold in our hands or place upon an altar. The illusion that we are in possession of the “Truth”, like the voodoo dolls of witches. seems to lead straight to the illusion that we have God-like control over the actual thing we have symbolized. (XXXII)

In the words of Hawkes:

…. for Milton, sin consists in the refusal to recognize, and thus in the attempt to bridge, the world of experience and the world beyond experience. This is the sin of Satan, whose basic mistake is the failure to understand the difference between himself and God is qualitative rather than quantitative. (xxxvi)

The whole of Paradise Lost is a meditation on the dangers of confusing our idols for the thing in itself, our maps for the actual territory. This delusion is seen in Satan’s futile rebellion against an omnipotent God, in the building of Pandemonium, the capital of Hell, in which the demon Mammon thinks the glory of Heaven can be obtained in the gold of the earth. It is seen in the seduction of Eve by the serpent, when she confuses what she sees -the serpents human like power of speech- with the reality of what will be gotten from eating from the Tree of Life.

Hawkes wants us to connect Milton’s meditation on idolatry with the birth of capitalism that was happening right in front of the “eyes” of the blind prophet. Persons were being alienated from their labor as they were forced from their lands and forced to become wage earners, and more importantly for our purposes, money emerged as “an independent, self-generating force- an efficacious sign”. (XV)

Above all, Hawkes wants us to see Paradise Lost not as a mere epic poem that, despite its genius, is too embedded in a  religious language that offers little guidance to the problems of our secular age, but as what Milton intended it to be, a prophecy, that was meant to capture the outlines of the future. We are that future, and if Hawkes is right, Milton might have been able to peer into the way in which the world would unfold not out of any connection with the divine, but because his genius occurred at the very moment the modern world was coming into being, allowing him to grasps its fundamental assumptions.

Hawkes writes of us:

Our own “postmodern condition” is characterized by the virtually complete dominance of representation    over reality, but few twenty-first-century thinkers are capable of constructing an ethical critique of this situation. Paradise Lost offers such a critique, and that is why Milton’s poem is more pertinent today than ever before. (XXXIII)

What Hawkes interpretation of Paradise Lost provided me with was a model to understand the financial crisis. In particular, it gave me a way to understand the role of two forces which played a role in the outbreak of the crisis: the mathematical geniuses of Wall Street known as “quants” who created a whole new system of computer based finance during the 1980s, 1990s, 2000s  that imploded with the 2008 crisis, and the emergence of “fiat currency” in the early 1970s that engendered a credit boom the likes of which was never seen before, and that was ultimately based on the illusion that money could be created out of thin air- like magic.

Next time the Quants….

* John Milton, Paradise Lost, EDITED WITH AN INTRODUCTION BY David Hawkes, Barnes and Noble Classics, 2005 

What’s Wrong With Borgdom?

Lately, I’ve had superorganisms on the brain. My initial plan for my post this week was to do a piece comparing earthly superorganisms like the Leaf Cutter Ant with the most well known of science-fiction superorganisms- the Borg. Two things happened that diverted me from this path. First,  the blogger and minimalist beekeeper, James Cross, shared with me an article he wrote that largely said what I wanted to say about the Borg and insects as well or better than I could have. Second, during the course of my research I ran into a recent article that stuck in my craw, which I felt compelled to address.

Someday I will return to the Borg, but now for that article I mentioned. The article, by the author, Travis James Leland, I found on the Institute for Ethics and Emerging   Technologies website, and is entitled “We Are the Borg, And That is a Good Thing.”.

Leland’s point in the article is that many of the positive changes from technology that have been brought to our lives in recent decades have first been imagined in science-fiction, and one of the most powerful of these visions has been that of Star Trek.
But, while Star Trek has this incredibly powerful vision of a hopeful technological world it also has a “dark-side” in the form of the Borg. This darker view of technology, Leland thinks, leads to neo-luddism: the phrase “resistance is futile”- with which the Borg “introduce” themselves to species they are about to assimilate, now greets every new technology, and frankly scares people into seeing our technological future in a much more dismal light than should be the case. Leland hopes to cast doubt on this pessimistic vision:

But is it such a bad thing for humanity to want to become a collective? Isn’t one of the main selling points of the internet, social media, etc. the fact that we are all now closer than ever? What I write on my Twitter account can be read by hundreds or even thousands of people instantly. They know what I am thinking, and I can see what is on the mind of all the people I follow. Facebook allows me to share videos, photos, music, status updates and more (although I rarely use Facebook anymore, but I plan on returning to it). Foursquare, Google+, LinkdIn, Skype, and all the other apps and social media are being used to keep us constantly “plugged in” to our peers, our favorite celebrities, causes, politicians, businesses and anyone or anything else we want.

Leland completely embraces the cyborg- transhumanist ideal of the merger of human beings with their technology. In other words, he wants to be a cyborg:

I have been keeping up on the research into Google Glasses, Augmented Reality, implanted microchips, prosthetic limbs, brain uploading and more and I have to say “bring it on!”

For Leland, opposition, or fear, of cyborg-transhumanism isn’t a matter of ethical, egalitarian, or spiritual objections- it’s all about bad “PR”, and we have Star Trek’s Borg partially to blame. If opposition to cyborg-transhumanism is all about spin, then what is needed to undo such opposition is spin in the opposite direction to make cyborg- transhumanism “sexier”. He states:

This one will all come down to advertising, I think.

Leland then shares two videos that he thinks make the positive case for cyborgs. The first one is of a young woman, deaf from birth, who has been granted the ability to hear via a cochlear implant. It is a very touching video. It may be a little too harsh to characterize Leland posting it as an advertisement for cyborg-transhumanism as despicable, but it was certainly disturbing enough for me to feel inspired to write this post.

The second video is, ehem, an advertisement for Corning Glass that pictures a near human future in which a family is blissfully connected to one another via technology, all embedded in glass, of course.

Let me first tackle the issue of social media. The best counter to Leland’s Corning Glass video, with its happy family and their augmented reality bubble, is a dark and frankly brilliant piece of design fiction called Sight  that was brought to my attention by the Atlantic blogger Kasia Cieplak-Mayr von Baldegg (that’s a mouthful).

Sight  is a very short film that shows us the potential dark side of a world of ubiquitous augmented reality and social profiles- a world in many ways scarier that the Borg because it seems so possible. In this film, which I really encourage you to check out for yourself, a tech- savvy hotshot, seduces, and we are led to believe probably rapes, a young woman using a “dating app” that gives him access to almost everything about her.

Sight  gets to the root of the potential problem with social media which isn’t the ability to interconnect and communicate with others , which it undoubtedly provides,  but the very real potential that it could also be used as a tool of manipulation and control.

Sight  is powerful because it shows this manipulation and control person to person, but on a more collective level manipulation and control is the actual objective of advertisement. It is the bread and butter of social media itself. It is quite right of us to wish to limit the ways our personal information can be used, and to ask questions of it such as: Does using a social media website mean that all my “friends” are bombarded with advertisements for product X because I recently bought X? Do social media companies have the right to sell to third parties my “social map” revealing my friends, my interests, my location? What the advertisement Leland shared from Corning Glass showed was a world of ubiquitous video displays against the backdrop of loving families almost without advertisements- the just as, if not more likely scenario, is the kind of nightmare of manipulation found in Sight  and a world of almost constant bombardment by personalized advertisements based on our location, what we are doing, and our “social map”.

Corporate abuse of social media goes well beyond targeted advertising. Upwards of 37% of  hiring managers use social media to prescreen applicants. Even if one would argue that such screening is merely due diligence on the part of corporations one must be aware of the extremely negative knock-on-effects this might be having on American democracy. I can’t tell you how many bloggers I have run into who are afraid to reveal their own names out of fear that what they might say could have a negative impact on their “employment prospects”. This leads me to wonder how many people are dissuaded from blogging or engaging in other forms of publicly accessible speech at all. What this means is that, on some level, people are beginning to become afraid of actually saying what they think which means social media, which should have the effect of facilitating democracy, is instead sucking the very lifeblood out of it.

If individuals or corporations with such deep information about us make some of our skin crawl, governments themselves in possession of such knowledge is just as, or even creepier. As an article in the Economist recently pointed out wiretapping laws have not kept pace with social media. What this means is that the governments essentially have open access to not merely our publicly accessible profiles, but all the background information such as where we went, who we called, emailed, SKYPED with etc. all without need of a warrant.

Conta-Leland being wary of the potential for abuse of social media, and fighting to short-circuit such abuse  is not neo-luddism, but a prerequisite for freedom in a world in which social media is here to stay- for good and for ill.

Leland engages in the very sort of manipulation that seems to underlie the dark side of social media when he essentially appropriates the private, even if shared,  experience of the young deaf woman regaining her hearing for his own ends.

His posting of this video as a form of “advertising” for the kind of cyborg-transhumanism he wishes for the future raises a whole set of questions: Are we supposed to think that questions, concerns or even opposition towards cyborg- transhumanism would mean keeping people deaf and blind? Why is this video so moving for viewers, and the experience of regaining her hearing bring such joy to the woman in the first place? Is it not that she has been given the capacity to do what most of us take for granted? Would our reaction not be different if instead of being brought into the human world of sound the woman was instead given an implant to be able to hear high frequency sounds that could be heard by bats or dogs? I think it most certainly would be.

One thing is clear, pressures are building among medical technology companies to extend the sort of technology that has brought the joy and wonder of sound to this young woman well beyond bringing people within the range of normal human experience or curring debilitating diseases, but first for the good news.

As a recent article in the Financial Times, Health Care: Into the Cortex , by Clive Cookson points out, at least some in the pharmaceutical industry think we are on the cusp of a bioelectronics revolution. Moncef Slaoui, head of research for the health care juggernaut GlaxcoSmithKline believes according to Cookson that:

…this is a moment comparable to the birth of the modern pharmaceuticals industry at the end of the19th and beginning of the 20th centuries, when chemical companies began to realize that they could design drugs with compound effects.

Here are some of the wonders of bioelectronics that have either already come down the pike, or are in process according to Cookson:

  • Paralyzed persons with bioelectronic implants being able to control robots with their just their thoughts.    
  • Bioelectronic communication with persons in a comatose state.
  • Robotic “suits” that give tetraplegics the ability to walk.
  • “Smart-Skin” implanted under the skin of epileptics to diminish/prevent seizures.
  • Deep brain stimulation to reduce the symptoms of Parkinson’s Disease, and although Cookson doesn’t mention this, clinical depression that is not responsive to existing treatments.
  • Stimulation of the peripheral  nervous system, outside of the brain, to treat conditions such as obesity.

All of these actual and potential inventions promise to reduce or end human suffering, and in that respect, are certainly a good thing. The danger, I think, will come from the fact that the shear economies of scale necessary to sustain medical bioelectronics is likely, as it has in the areas of pharmaceuticals and cosmetic surgery (the latter which began as a way to repair the horrendous scars of war suffered by some injured soldiers, and to help ease the emotional burden of women undergoing mastectomies), to demand the creation  of a mass market for bioelectronics, which will mean taking it beyond the treatment of disease.

I can imagine it working something like “plug-in-play” devices do now with people being able to essentially dock their brain into computerized systems to access networks instantly, or to communicate “telepathically” or to gain instant access to a new skill. I can see these products being aggressively marketed to quite healthy people, much as pharmaceuticals are aggressively marketed today. I can imagine all kinds of intense social pressures to use these products in order to effectively compete in the corporate world or the dating game. I cringe at the thought of how such hyper-expensive “enhancements” will further exacerbate an already pernicious social and economic inequality.  And I can lament like the words in the Arcade Fire song We Used to Wait, “that I hope that something pure can last”.

The ethical questions this type of cyborg-transhumanism will open up are real and are likely to be legion: questions about equity and individual rights and forced competition and peer pressure and morality and who decides what kind of world we live. The current field of bioethics, which currently deals with the ethical dilemmas posed by biological technology, will probably need to spawn a whole new subfield, or even new field of ethics itself, that will deal with the specific problems posed by bioelectronics. Let’s hope that the forums for discussing, debating, and deciding such issues are more open and democratic than the current ones for bioethics, which tends to be locked up in universities and exclusive publications. And let’s be fast in creating such forums because it seems very likely that we are about to plunge ourselves headlong into the dreams and nightmares of Leland’s borgdom.