Nobles, fintechs and cash

How this year's economical Nobel Prize winners can aid us to save money from the temptations of an alliance of a smart bank lobby and powerful fintechs.

I am not a large fan of the most crucial work of this year's Nobel Prize laureates in economics Daron Acemoglu and James Robinson "Why do nations lose?". I consider them a savvy, cloudy book and standing on very thin substantive bases. I much like the newer and little celebrated thing Acemoglu wrote along with Simon Johnson (the 3rd Nobel laureate of this year) in 2023. It is “Power and Progress”.

The point is that technological improvement does not automatically make social progress.

Let's compose it on the board a 100 times to make it permanent – it does not generate, does not generate, does NOT GENERAL. And it may even be that there is no concrete economical gain in following fresh inventions. Or else, the profit from technological improvement is. But so heavy concentrated in the hands of fewer winners that in no way can this translate into even covering the negative side effects of these phenomena. Not to mention creating any affirmative added value for the full community.

What is technology?

Like most of the most crucial words we use, this besides comes from the Greek language (it's like individual has doubts where the civilization roots of our western planet are). Tekhne means ‘practical skill’. But pay attention, besides “kigling”! In turn logic is nothing but “telling about something”. Technology is so a way to realize and manage various applicable skills. From a social point of view, technology is simply a phenomenon where all of us, through our collective herd knowledge, learn how to better usage our own skills. In fact, there is not so much “there” as “should be”.

In their book Acemoglu and Johnson look at the past 1,000 years of technological improvement (various) and show that people, fashion and inventions are changing. But there's always the same problem.

It is precisely that no innovation is fundamentally good or bad.

Assessing its impact on past depends on it, FOR WHO is good and TO WHAT serve? And vice versa. It is besides crucial who on specified an innovation of STRACI. AND IF THE COST will be put into effect. We have plenty of examples.

Bentham Panoptycon

The first is the alleged panoptycon of philosopher Jeremy Bentham.

One of the large themes of the Englishman was observation.

No wonder that in his last will he wrote clearly that his temporal remains should be decently prepared and exposed to public sight. This has happened, and to this day, “almost as alive” Bentham can be admired in 1 of the buildings of London University College. Panoptycon was about looking too. But not just that.

The philosopher's proposal was to build prison corridors and the goal so that the inmates knew that they were being watched all the time (let's note that Bentham proposed this a 100 years before the beginning of cinema and 2 centuries before the improvement of monitoring). This surveillance was expected to have educational effects (seen to behave better) and austerity effects (the layout of the building was expected to make the guards less). It must be said, however, that the Benthamic idea, a applicable career in English prisons has never done – after any interest at first, it was yet never implemented.

At the same time, however, the concept of panopticon was captured and applied on a massive scale in modern English factories, which were born in the early 19th century. Specifically in the form of a large production hall. There, the imagination of permanent and inexpensive surveillance (everyone has the impression that it is “on display”) has passed its stunning success.

An example of the Bentham panopticon is possibly not the most apparent technological breakthrough in history. But Acemoglu and Johnson choose him to show their way of thinking. Here we have a technological innovation that over the next 100 years changes the face of European manufacturing (today, a reasoning mill thinks automatically “production hall”). Yet it is – according to the authors – an invention rather different from a steam device (it gets up around the same time) or a weaving device (a bit earlier).

The steam device or modern loom brings not only immense profits to manufacturers but besides immense growth in economical productivity. As a result, technological advancement yet translates (not immediately, but nevertheless) into fresh opportunities for earning and wealth for the peoples of Europe. The mill hall does not make specified progress. It becomes primarily a tool of oppression. This is against the organization (in another words, "conditions") of working in 19th-century factories. Not against machines! Karl Marx himself and another critics of early capitalism were actually fascinated by device progress.

Rather, the failure of the strategy was seen by the fact that technology serves only 1 side.

In that case, the owners of the means of production. Not the workers who utilized technology to produce this previously unknown wealth.

Modern evangelists of technological innovation

The criticism of Acemoglu and Johnson is of course (and rightly so!) against modern evangelists of technological innovation.

It means a conglomerate of fintechs from Silicon Valley and providing them with perfect sub-walls to opinion leaders from the media and academy. The field on which the concerns of Nobel laureates are concentrated is the AI industry. It is here that Acemoglu and Johnson's concerns converge on the negative effects of technological development, which do not care about the profit-oriented owners of technology.

Among these concerns, the first is the imagination of technological unemployment – to remove broad social masses from a sense of sense and usefulness for society after their competence is automated on a scale not yet known in history.

It seems that another manifestations of the same violent phenomenon of unbridled advancement occupy somewhat little Nobel Prize winners. besides bad. So let's aid Acemoglu and Johnson a small bit, then figure out what they started.

The Future of Money

Their diagram of the description of technological phenomena can, for example, be applied perfectly to the future of money. Cash is besides presented as an inevitable victim of technological progress. While all data shows that conventional money is inactive holding tight – in the full developed planet it is inactive the dominant form of financial transactions. However, opinion leaders tend to propose between the lines that the cash has already been ‘stamped’. According to this narrative, conventional money is expected to divide the destiny of train horses, elevators and stenographers in a decade or 2 – that is, to become an archaic and completely unnecessary phenomenon on the way to the museum shelf.

It takes quite a few criticism to get through this fog of proposition and point out that it doesn't gotta be. I urge the late published book by Brett Scott’s Institute of civilian Affairs, “Cloudmoney. Cash, cards, code – War for our wallets".

In this discussion about the future of money, it is worth supporting the arguments of Acemoglu and Johnson. besides due to the fact that they received Nobel this year from economics, and their names will for any time act as a kind of loud horn: “Note, there is something interesting to think about!”. Their argument – outlined above – fits the future of cash as a tailor-made suit.

In the case of a debate on the future of money, we are dealing with a model situation in which a group of interests (in this case the representatives of the old banking lobby operating under hand with modern fintechs) are trying to talk about the situation, presenting beneficial "innovations" as something inevitable.

The full set of side effects of cash displacement is completely ignored.

Eliminating the choice and right of citizens to be offline. Permanent surveillance threat. Trade in the alleged cognitive surplus (our online activity, which is then sold by net companies with large profit). Dependence of states and societies on the good will of digital intermediaries or giving the giants the final decision which the citizen (consumer) will or will not consume. It's all very real threats we're expected to keep quiet about. Just as we are to stay silent about technological unemployment or the disastrous impact of carefree improvement of AI on human fate. Fortunately, we are not silent about these last things. This is due to the voices of reason from specified authors and authorities as the mentioned Acemoglu or Johnson.

I do not see the slightest reason why their proposed critical reasoning and analysis of innovation in terms of their social impact (and not just a fewer profits) should not extend to phenomena that nobels compose about. Among them besides for the future of cash. In the fight against powerful supporters of advancement on their terms, any ally will be useful.