Published

17

Feb

2021

Commentary

Who has the power?

Throughout history, the industrialization of technology has led to new practices, which in turn has led to new forms of organization. Technology never stands still because of supply and demand competition. It is continuously evolving to more industrialized forms which, along with new practices, enables new technology to appear, which then in turn evolves. Genesis begets evolution begets genesis. Along with this ongoing cycle, history is peppered with forcing functions which quicken the pace at which we have to adapt. Today, the forcing function is the isolation economy created by COVID.

Who has the power?

In the research on industrialization so far, 43 common themes of change have appeared, from radicalization to mobilization to autonomy across many industries. Since it is topical, I thought I'd discuss the issue of swarming and the murmuration that is GameStop. But to begin this journey, we need to look at masks.

Healthcare, like many industries, has codes of practice. Often, professionals within a space are measured against those codes, which represent the embodiment of knowledge. In the early days of the pandemic, a lot of the discussion of masks was about droplets vs. aerosols and how to put on a mask correctly. In an infectious environment, the outside of the mask itself is a point of infection and so the correct approach to putting on and removing a mask is important. However, in a pandemic the goal is to reduce the density of infectious particles in the surrounding environment. It's not about protecting yourself but about protecting everyone, and so at scale, the response should have been everyone in a mask regardless of how you put it on. While official WHO guidelines recommended "those infected with the COVID-19 coronavirus to wear masks to prevent spreading it to someone else” and media discussion concentrated on the importance of how to put on a mask, a motley crew of data scientists, medical professionals, epidemiologists and physicists rapidly coalesced online around the single intent of getting everyone to wear masks.

They collected evidence, challenged the orthodoxy and created a movement online – #Masks4All. It is important to note that without access to data, collaboration tools and mechanisms of broadcasting, then the rapid growth of this movement would have been unlikely. Whilst we often discuss the dangers of misinformation online, we too easily forget its ability to challenge.

The same impacts can be seen in WallStreetBets. Numerous hedge funds had been found to short GME stock to 140 percent of the float, enabling an opportunity for a gamma squeeze. There was open discussion of the issue, and a murmuration – a swarm – formed. It had intent (often described as retribution against the hedge funds) and it acted, purchasing stock and calls on the shares. The squeeze drove the price up rapidly as this swarm of retail investors challenged the authority of the large hedge funds. There is currently a Senate Committee investigation into actions that were taken. Significant misinformation seems to have been sown (including "Reddit investors target silver") but a focus on intent, use of industrialized collaboration tools (Reddit) and the swarming together of retail investors (a property often found in the gaming world) combined with industrialization of banking components (RobinHood) to cause a significant event.

This might even be the beginning of more active swarms of retail investors, which could have implications from the environmental field to corporate strategy. Swarming, mobilization and a focus on intent are three recurring patterns in our research whether we're talking humans or machines. The isolation economy has forced us into a more virtual world and has enabled this swarming and mobilization. It is doubtful that ten years ago we could have seen the likes of WallStreetBets and small retail investors challenge the billion-dollar hedge funds.

However, there is another theme that is important: the diversity of the challenge. In both cases, the orthodoxy was challenged by people who were not part of that industry. The same effect is slowly starting in a field close to my heart, which is economics. In December 2020, Bloomberg announced that Everything We’ve Learned About Modern Economic Theory Is Wrong. The issue is statistics and a physicist Ole Peter who has pointed out the economic field is often based on Gaussian distributions where actual power laws rule. The effects are quite startling because many of the issues we see in society (such as inequality) can be simply explained by the role of luck. Obviously, this is not comfortable reading for those in the economics field, nor those who believe their position in life is somehow related to talent and hard-work, but it has profound effects in terms of government policy. Once again, a movement is growing, it's swarming together, with a diversity of opinion, with access to data and collaboration tools and willingness to challenge the existing orthodoxy or codes of practice or accepted wisdom.

We should expect more of this. The industrialization of collaboration tools, components within industries, mechanisms to broadcast and narrowcast, data and tools to analyze it, combined with the ability for diverse people to swarm around a common intent, is likely to see many of us challenged in the future. We have often talked about using the same tools to target (to narrowcast) individual consumers. We've seen the rise of this within the political sphere (e.g. Cambridge Analytica) but the same tools can be used against corporations. Before you start thinking that this doesn't affect you, or that you are above any influence, then it's worth remembering that 40 percent of the people arrested in the recent US capital riots were doctors, lawyers, CEOs, business owners and other professional classes. These swarms, these murmurations and these tools affect everyone.

Of course, many of the ideas are not new. They were described in the 2015 book Data Journalism: Inside the Global Future. To quote: "There's a great democratization of data going on. Rather than the numbers belonging to the experts, they belong to us all". That means everyone, from the CEO to the road sweeper, and today it's not just data but many orthodoxies, from medicine to finance to politics, that are being challenged.

In the 2021 LEF Study Tour, we will be touching on some of these themes and the underlying technology that is causing them. The themes have already come up in the elective sessions over the last six months, from the discussion of the importance of intent with Robbie Schingler of Planet Labs to the challenge of what it means to be a physical engineering company (with its creed of location and physical interaction) in a distributed world with Nadav Goshen from MakerBot. We will be hearing from them again on the Study Tour and it will be interesting to ask how this rise of murmurations and the challenge of orthodoxies is impacting them.

WallStreetBets and Masks4All seem to be just the start of wider movements driven by industrialization. As the Federal Reserve Chairman Jerome Powell said, "We're recovering, but to a different economy"; and in this economy, swarms of mobilized consumers may well hold the power.

Further details of our Study Tour can be found here or via Jane Kingston.

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