Letter from the Editor: The [Fourth Industrial] Revolution
By Rob Carroll
First Published in Issue 004 of Dark Matter Magazine, July-August 2021
The United States economy is inefficient. A Keynesian case can be made that it’s incredibly inefficient. The siphoning of public wealth for the past thirty years, thanks in no small part to the advent of derivatives and high-frequency trading, has led to a wealth gap in this country so obscene that during a global pandemic, when most U.S. households saw their cash and savings decline dramatically, the collective wealth of American billionaires increased by a staggering 54% ($1.62 trillion). (Please bear with me as we approach the relevance of all this to science fiction; I promise we’ll get there soon).
An economy is most efficient when resources are used and distributed among the producers and consumers in a way that optimizes output, but due to adverse selection, asymmetric information, and moral hazard, we are moving in the opposite direction of that goal.
Adverse selection is the process that occurs when buyers and sellers have access to different information, also known as asymmetric information. Asymmetric information causes an imbalance of power. Moral hazard is a situation that occurs when, thanks to power imbalances, tendency to take undue risk increases because the costs (and potential losses) will not be felt by the party taking the risk.
In the wake of the 2008 financial crisis, a new technology emerged that was developed to prevent a similar crisis in the future, not by fixing a broken system, but by reinventing it so that the system would become less centralized and more egalitarian. That technology was blockchain.
Bitcoin was the first application of blockchain. The digital currency grabbed all the headlines in those early days, mostly on the perception that it was a joke, a scam, or the naive wish of every libertarian technocrat who watched Fight Club one too many times. But in the twelve years since, newer, more interesting applications of blockchain technology have started to show the ways in which our society can be transformed for the better by the technology, starting with Internet 2.0.
For all the failings of Internet 1.0, it does aim to accomplish a noble goal: to release the flow of information from its natural conservative state of being (information transfer is conservative by default, because like any complex system, it seeks the path of least resistance). However, Internet 1.0 still depends on centralized authorities, and those that use the technology must accept and trust those authorities in order to participate. Information in this system is still asymmetrical, and the system itself still suffers from power imbalances. But because blockchain is an immutable public ledger, Internet 2.0 could—in theory—decentralize any system authority by distributing that system’s governance across a broad network of independent users who share a vested interest in the network’s success and the success of all those involved, with no easy way to conspire against either.
In a decentralized world, the wheels of the economy are greased and
efficiency returns, because in a decentralized world, power and resources are redistributed to the people, who then reinvest those same resources back into the system, ad infinitum. In a decentralized world, there is no intermediary between you and the rest of humanity when it comes to things like your wealth, your data, your privacy, or your security, because the system is self-governing, which includes you as a governing participant.
If this sounds like a wishful utopia (or just a true democracy), it’s because it kind of is. The idea is so radical compared to how we’ve always lived, that it often feels doomed to failure. Yet, the idea almost needs to succeed in order to preserve a progressive way of life in the face of what’s to come.
The Fourth Industrial Revolution (or Industry 4.0) is upon us. It will usher in a new age of cyber security, cloud computing, systems integration, machine-to-machine communication (M2M), Internet of Things (IoT), Big(ger) Data, augmented and virtual realities, advanced robotics, and artificial intelligence. But in order for these complex technologies to be integrated into our society without further dividing us, and potentially even destroying us, we’re going to need to first redefine what “us” means.
Unless we redefine concepts like governance and transparency (to name just two), we may be doomed to grim futures like the ones described in this very issue of Dark Matter Magazine. For example, Warren Benedetto’s “Set For Life,” won’t feel so far-fetched if we continue to ignore the problems caused by our nation’s widening wealth gap and growing political polarization—or if we fail to plan for the eventual displacement of millions of workers due to automation. Jean-Paul L. Garnier’s poem, “Humanization,” will read like prophesy if we can’t overcome our desires to dominate and win, even after our competition is gone. L.P. Melling’s “100 KIAs” will become a documentary of future warfare if central authorities are allowed to become centralized authoritarians, gleefully pulling levers in a never-ending battle of contrived attrition.
If we enter this new age resigned to be wage slaves and corporate expenditures who passively consume, we will descend further into financial feudalism, where we will be ruled by unseen central authorities that we should not trust, but whom we will be forced to obey, since the power of the coming age will reside solely and hopelessly with them. That kind of power cannot be consolidated the way that power is consolidated now. It has to reside in the people. There is no other way.
© 2021, Rob Carroll