Re: [OPE] Digital investor worlds

Very interesting, but this is no Mandel-like "thinking robots" - this is just plain old expert systems. What the article confirms is what a crasy, wastful world the Wall street is:

"But at its worst, it is an inscrutable and uncontrollable feedback loop. Individually, these algorithms may be easy to control but when they interact they can create unexpected behaviors?a conversation that can overwhelm the system it was built to navigate. On May 6, 2010, the Dow Jones Industrial Average inexplicably experienced a series of drops that came to be known as the flash crash, at one point shedding some 573 points in five minutes. Less than five months later, Progress Energy, a North Carolina utility, watched helplessly as its share price fell 90 percent. Also in late September, Apple shares dropped nearly 4 percent in just 30 seconds, before recovering a few minutes later."

Do anyone belive that a drop of the value of Apple of 4% in over a period of a couple of minutes has anything to do with economic reality, not to speak of Progress Energy.

I think it is clear to any sane person that the fluctiations in stock prices are for the most part completely disconnected from economic reality.

We should demand that the stock exchange was only open a day a month, or maby eack quarter in order to bust the myth that continuous trading has any economic rationale. Imortant also to delegitimize that obscene incomes fromt this kind of 99% useless - 0 sum - rentseeking activity.

Regards
Anders E

> From: Michael Webber [michaeljwebber@gmail.com]
> Sent: 2011-01-17 02:10:04 MET
> To: Outline on Political Economy mailing list [ope@lists.csuchico.edu]
> Subject: Re: [OPE] Digital investor worlds
>
> thanks for this, juriaan: very interesting. of course, this is not an
> example of an answer to mandel's question, for this system of
> interacting algorithms is producing unanticipated effects (emergent
> properties of complex, dynamic systems) but not new algorithms (yet!).
> MICHAEL
>
> On 17 January 2011 11:09, Jurriaan Bendien <jurriaanbendien@online.nl> wrote:
> > In 1984, Ernest Mandel gave me a paper to read in which, among other things,
> > he noted:
> >
> > "There remains one unanswered question, a question which Marxists have not
> > taken up till now because it was not posed before humanity. But after
> > dwelling for decades in the realm of science fiction and futurology, this
> > question has now been brought to the threshold of the materially
> > conceivable, as a result of the huge leaps forward of applied science and
> > technology in the last decade: could human labour construct machines which
> > could escape the control of humanity, become completely autonomous of men
> > and women, i.e. intelligent machines, and machines with a potential to rebel
> > against their original creator? After a certain point, would robots start to
> > build robots without human instructions (without programming), even robots
> > inconceivable to humanity and largely superior to them from the point of
> > view of intelligence?"
> > http://www.marxists.org/archive/mandel/1985/xx/future.html
> >
> > Just now, my friend Julio Huato referred me to an article which sheds new
> > light on this:
> >
> > http://www.wired.com/magazine/2010/12/ff_ai_flashtrading/
> >
> > Jurriaan
> >
> >
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> >
>
>
>
> --
> Michael Webber
> Professorial Fellow
> Department of Resource Management and Geography
> The University of Melbourne
>
> Mail address: 221 Bouverie Street, Carlton, VIC 3010
>
> Phone: 0402 421 283
> Email: mjwebber@unimelb.edu.au
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Received on Mon Jan 17 02:49:26 2011