Tuesday, January 13, 2015

Kurzweil's Black Swans

What can we expect in 2015?  Global recession and civil disorder top the list, according to what I read.  Given the way central banks and governments have sabotaged free markets at every turn, coupled with the belligerent nature of U.S. foreign policy and the militarization of our police, both forecasts strike me as plausible. 

But the plausible doesn’t need forecasting, does it?  We need to be reminded of it, certainly, and in that sense it’s critical.  But what we really want to know is: Are any black swans on the horizon?

There are two problems with black swans.  One is predicting them: how do you predict an event that by definition comes as a surprise?  The other is convincing people that this surprising event will in fact occur.  

We all know what happened to the price of oil, but how many prognosticators provided advanced warning of a sharp downturn?  Michael Lynch is one, to an extent.  Are there others who called the drop and who also are not known for making “stopped watch” predictions, as Lynch calls them?

According to gasbuddy.com, gas prices nationally dropped 6.5 cents in the last week, to $2.119/gallon.  
Since last week, some 12,000 stations dropped their price under $2/gal, with 45.1% of all gas stations (nearly 61,000) now selling under the $2/gal mark. The national average currently stands at its lowest since May 9, 2009, a date that saw 8.9% unemployment . . .
If someone had put this in writing a year ago he or she would’ve been regarded as crazy or Nostradamus.  Who is on record for saying gas prices would drop like a brick?  For most people this was a black swan.

But there are problems with what seems plausible, too.

Certain Austrian economists predicted serious price inflation following the Fed’s unprecedented expansion of the monetary base in 2008-2009.  Quite plausible, given Austrian theory.  If the new money had reached the buying public, we almost certainly would’ve seen a rapid rise in prices as the fractional reserve multiplier kicked in.  But most Austrians and other economists didn’t foresee Bernanke paying banks not to lend the money he created.  Nor perhaps did they fully account for the astronomical debt held by households and businesses, making them adverse to borrowing, or the commercial banks’ reluctance to lend in such an environment.

The non-event of high price inflation struck many analysts as a black swan.

Can we make any reliable predictions of the kind that would surprise almost everyone if they occurred?  Is there any radar anywhere on which black swans are visible?

The answer is no if by black swan we’re looking for a specific event at a specific time.  The answer is a profound yes if we mean there are changes coming that will hit almost everyone over the head.

According to Wikipedia the first smartphone patent was issued to Theodore G. Paraskevakos in 1973, the first devices went on sale in the early 1990s, and today there is fierce competition among companies to make them as powerful and affordable as possible.  I cite the example of smartphones because most people are familiar with them, and as information technologies they’re subject to the law of accelerating returns.  

It is this law that will produce radical changes in the near future and which people seem both to expect and disbelieve at the same time.  

On the knee of the exponential

To quote Ray Kurzweil from his March 7, 2001 essay:
An analysis of the history of technology shows that technological change is exponential, contrary to the common-sense “intuitive linear” view. So we won’t experience 100 years of progress in the 21st century — it will be more like 20,000 years of progress (at today’s rate). The “returns,” such as chip speed and cost-effectiveness, also increase exponentially. There’s even exponential growth in the rate of exponential growth. Within a few decades, machine intelligence will surpass human intelligence, leading to The Singularity — technological change so rapid and profound it represents a rupture in the fabric of human history.  [Italics in original]
I encourage you to read his first sentence a second time.  Common sense will be blind to the technological changes coming.  The incremental advances in smartphone technology will take flight, along with other technologies, as progress reaches the “knee” of the exponential curve (the point at which the exponential trend becomes noticeable).  We are near or on that knee right now.  
The first technological steps — sharp edges, fire, the wheel — took tens of thousands of years. For people living in this era, there was little noticeable technological change in even a thousand years. By 1000 A.D., progress was much faster and a paradigm shift required only a century or two. In the nineteenth century, we saw more technological change than in the nine centuries preceding it. Then in the first twenty years of the twentieth century, we saw more advancement than in all of the nineteenth century. Now, paradigm shifts occur in only a few years time. . . . 
As exponential growth continues to accelerate into the first half of the twenty-first century, it will appear to explode into infinity, at least from the limited and linear perspective of contemporary humans. The progress will ultimately become so fast that it will rupture our ability to follow it. It will literally get out of our control.
If Kurzweil were a kook with a blog it would be easy to dismiss him.  But forget that.  Ray Kurzweil is such an accomplished individual it is difficult to summarize his achievements in a brief article and do him justice.  He is a best-selling author, computer scientist, inventor, futurist, entrepreneur, documentary producer, lecturer, and director of engineering at Google.  As a teenager in 1965 he appeared on Steve Allen’s I’ve Got a Secret and played a piano piece composed by a computer he built. According to Wikipedia,
He has received twenty honorary doctorates, and honors from three U.S. presidents. Kurzweil has been described as a "restless genius" by The Wall Street Journal and "the ultimate thinking machine" by Forbes. PBS included Kurzweil as one of 16 "revolutionaries who made America" along with other inventors of the past two centuries. Inc. magazine ranked him #8 among the "most fascinating" entrepreneurs in the United States and called him "Edison's rightful heir”.
People have faulted him for his perennial optimism, but as he says entrepreneurs are predisposed to optimism.  He’s famous for his predictions, which he discusses in extensive detail here.  He writes:
Fundamental measures of information technology follow predictable and exponential trajectories, belying the conventional wisdom that “you can’t predict the future.” There are still many things — which project, company or technical standard will prevail in the marketplace, or when peace will come to the Middle East — that remain unpredictable, but the underlying price/performance and capacity of information is nonetheless remarkably predictable. Surprisingly, these trends are unperturbed by conditions such as war or peace and prosperity or recession.
In his 1990s book The Age of Spiritual Machines he made 147 predictions for 2009.  Of these 127 were correct or essentially correct (86%), 17 were partially correct, and 3 were wrong — according to his analysis.

Kurzweil's swans

Some of his predictions for the years ahead, which he made in late 2013, include:
  • By the early 2020s, we will have the means to program our biology away from disease and aging.  We already have the tools to reprogram our biology the way we reprogram our computers.  “RNA interference, for example, can turn genes off that promote disease and aging.”
  • By 2030 solar energy will have the capacity to meet all of our energy needs. The production of food and clean water will also be revolutionized. “The total number of watts of electricity produced by solar energy is growing exponentially, doubling every two years. It is now less than seven doublings from 100%.” Once we have inexpensive energy we will be able to convert all the bad water on the planet to usable water.  Agriculture will go from horizontal to vertical, where we will grow high-quality food in AI controlled buildings.
  • By the early 2020s we will print out a significant fraction of the products we use including clothing as well as replacement organs.  The early 2020s will be the golden age of 3D printing.  We’ll be able to choose from thousands of open source clothing designs and print them out at pennies per pound.  “We can already experimentally print out organs by printing a biodegradable scaffolding and then populating it with a patient's own stem cells, all with a 3D printer.  By the early 2020s, this will reach clinical practice.”
  • Within five years, search engines will be based on an understanding of natural language. “At Google, we are creating a system that will read every document on the web and every book for meaning and provide a rich search and question answering experience based on the true meaning of natural language.”
  • By the early 2020s we will be routinely working and playing with each other in full immersion visual-auditory virtual environments. By the 2030s, we will add the tactile sense to full immersion virtual reality.  The latter will require “nanobots [nanometer-size robots] traveling noninvasively into the brain through the capillaries and augmenting the signals coming from our real senses.”
For a robust discussion of how these and many other technological changes will radically alter our lives, please see Kurzweil’s book, The Singularity is Near: When Humans Transcend Biology. 

No comments: