On: the dangers of AI, the future of money and more
This issue was first published in my biweekly newsletter: The Sovereign Stoic.
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5 paragraphs on a mix of practical frameworks, principles, lessons, captivating stories and more.
Today’s Snapshot
- Compassion is not reserved to only those we agree with
- What does prosperity mean and how do you measure it?
- Change is the only constant. This applies to money as well
- A lot of people believe AI is dangerous (but for the wrong reasons)
- How & why do consumer tech platforms tend to bring up the worst in us?
1-On compassion
In his “Meditations,” Roman Emperor and Stoic philosopher Marcus Aurelius wrote: “Accustom yourself not to disregard what someone else has to say: as far as possible, enter into the mind of the speaker.”
One of the biggest lies we’ve been sold lately is that in order to have compassion for someone, you must agree with everything they believe, say, or do.
Sometimes, when people are struggling with things we don’t struggle with ourselves, we tend to dismiss their struggle and even judge them.
How can they be so weak? Why don’t they stop it or fix it? It’s their fault that they are going through this… They brought it unto themselves.
Yes, all of the above might be true.
But pointing this out to them is the easy path. It’s easy to give in to the temptation to reply or give solutions when others face issues that are alien to us.
The hard path is to have compassion. To listen with empathy and not utter a word.
It’s to put ourselves in their shoes, to feel what they are feeling in the moment, not to think of what we could have ‘done better’ if it were to happen to us.
This is an honorable attribute that will serve you both in your personal relationships and professional ones.
2-On the dangers of AI
A couple of weeks ago, people noticed something peculiar with Google’s AI chatbot Gemini (previously known as Bard).
When asked to generate images of historic figures known to have been white, such as Thomas Jefferson or Abraham Lincoln, the chatbot would generate a ‘black or Asian version’ or whatever other racial version of the person.
This occurred when it was asked to generate images of the founders of Google as well.
This triggered lots of people. Some called it out for inaccuracies, and rightly so.
But most got it wrong as they viewed it through the lens of the ‘culture war’, because that’s all narrow-minded people are thinking about these days.
The idea of Gemini being ‘woke’ and pushing DEI is attractive to culture warriors and leaves no room for other alternatives.
I think the culture war narrative is only partly true.
But there is a much bigger issue. There is something more dangerous at play.
When trainers/programmers of Gemini instructed it to do something, they expected an output that fell within a spectrum of what they told it to do.
Instead, Gemini did something unexpected, basically not following instructions.
I don’t know if one could qualify this as ‘disobedience’, as the AI model didn’t obey the orders/instructions it was given, or if it’s just a one-off mishap.
If it’s the former, then it’s worth probing way deeper beyond the culture war narrative.
This thread by Yishan Wong delves deeper into this issue.
3-On the 7 deadly sins of consumer technology
The notion of deadly sins or capital vices is popular among Christians.
The seven deadly vices in order of gravity are: lust, gluttony, greed, wrath, sloth, envy, and pride.
While categorizing vices/sins in a specific order may not exist in the same form in other religions, many religions have similar teachings and principles.
Whether you are religious or not, you would agree that most of these seven vices can make you less content or keep you from living a good life to some extent.
They are undesirable traits to be associated with.
But what do these have to do with modern consumer technology?
In 2011, Reid Hoffman, the founder of LinkedIn, who is also a venture capitalist (investor), wrote a piece for The Wall Street Journal revealing what he thinks helps build great consumer technology companies and how it guides him in making his investments.
Hoffman suggested that for a consumer technology to be overwhelmingly successful, it has to tap into one or more of the seven vices.
He would know a thing or two about this topic since he is the founder of LinkedIn and an investor in more than 100 tech companies, including the successful social media platform Facebook, and other consumer tech companies like Airbnb.
I will give examples of a few successful consumer technology brands and how they relate to the seven vices.
Tinder: Lust
People join Tinder for two simple reasons: they want to meet other people who are looking for long-term or short-term partnerships (hook up).
On the short-term end of relationships, Tinder taps into our desire for sex with no strings attached.
You have access to a pool of people who are ready and willing right at your fingertips. It’s easy and tempting.
Instagram: Envy
Instagram is like an exposé of people’s best or highest moments (highlights).
You never get to see the lows. It’s easy to fall for it and envy the supposedly ‘flawless’ lifestyles of the people you see on there.
LinkedIn: Pride
On one hand, LinkedIn can help you increase your odds for career advancement.
When we get a new job at big company X, we are proud of it and want others to know.
But we don’t share when it becomes stressful and when we dread going to the office.
Just like Instagram, most of us share the best parts of our professional careers on LinkedIn.
The point is that the platform taps into our need to highlight how great we are doing professionally.
Coinbase/Robinhood: Greed
Trading platforms are often associated with giving access to wealth-building tools to the average Joe so they can become rich.
If you followed what happened in 2020–2022, you have seen how these platforms appeal to our desire to make more money while taking lots of unmeasured risk.
Some people invested their savings hoping for big returns in a short amount of time but ended up losing it all. Some even killed themselves over the losses.
Twitter: Wrath
One thing that makes Twitter interesting is that current events are first argued there as they are unfolding when there is little to no information or background of such events.
This creates the perfect environment for passionate opinions and stances, which lead to animosity in how people on the opposing sides of the arguments respond to each other.
It’s easy to hide behind an anonymous profile and say whatever you want.
It’s also hard to resist the temptation to get into heated arguments on there.
The point of this is not to contrast the good and the bad of these platforms, but rather to bring awareness to how and why they bring out the worst in us.
To be fair, there are also a lot of positive aspects to these consumer technology products and platforms. For instance, consumer technology platforms in the finance space have democratized access to wealth-building tools, allowing more people to choose and invest in assets that can help grow their money and retain their purchasing power that would other wise be reduce due to mostly inflationary monetary policies. Social media platforms have allowed us to connect and keep up with our families and friends who are thousands of miles away. They have also extended our abilities to access markets and do commerce on a global scale.
4-On the future of money
Money and currencies evolve.
Throughout history, money has undergone various transformations.
From barter systems, cowrie shells after them, metal coins 3000 years ago, paper currency emerging around the 8th century, the gold standard from the 1800s to the 1930s, to the hybrid electronic-physical currencies of today, each form reflects a shift in societal needs and technological capabilities.
What ties these forms of currency together is their function as tools for exchanging value.
The earliest systems, such as barter and the use of cowrie shells or metal coins, were decentralized. Anyone could produce goods for exchange, obtain shells, or make coins by working with metals.
These forms of currency also had intrinsic value derived from the materials they were made of, due to their scarcity, durability, and usefulness.
The currency systems following them, such as the gold standard, derived their value from a combination of rare metals backing them and the trust placed in the issuing authority.
In the 1900s, with the US moving away from the gold standard, money ceased to derive its value from being backed by precious metals, relying instead solely on trust in the issuing authority. This marked the advent of modern monetary systems known as fiat money/currencies.
The fiat system represents a hybrid of digital and physical money (paper bills). While transactions often occur electronically through platforms like online banking or payment apps, physical currency still circulates.
Technological progress and societal complexity have been key drivers of the evolution of money and currencies.
For example, paper money became possible only after the invention of paper, and electronic money emerged with advancements in computer and telecommunication technologies.
On the societal front, as societies grew larger and production of goods became more complex, there arose a need for more efficient and convenient means of exchanging value.
Each monetary system had its pros and cons.
For the sake of the next leg of money’s evolution, I’ll only look at today’s fiat monetary systems, and why I think the future of money will be what I say it is.
The fiat system has some significant problems:
- Large transactions can be cumbersome due to bureaucratic processes and intermediary fees.
- Central banks’ ability to manipulate and print currencies at will can lead to inflation, loss of purchasing power, and erosion of savings, disproportionately affecting the less affluent and contributing to economic inequality.
The trajectory of currency evolution points to a future of completely digital currency systems that offer more transparency, fairer and hard to manipulate monetary polices.
Technological advancements in computation and telecommunication have enabled this evolution.
Digital currencies offer several advantages:
- Some can be made limited in supply, making arbitrary inflation impossible.
- They can be programmed for either limited or permitted use.
- They facilitate seamless transactions without intermediaries and can be securely stored on easily portable devices.
It is likely that governments, through their central banks, will transition to fully digital currency systems.
Central Bank Digital Currencies (CBDCs) represent the forefront of this transition.
While CBDCs address convenience issues associated with fiat currencies, they may inherit some of the flaws of the fiat systems, such as centralized control.
There are other non-government entities that have been exploring and attempting to build digital currencies that can solve both issues that plague the fiat currency system (lack of convenience and dangerous unfair monetary policies).
These entities want to ensure that no one centralized entity can control the monetary system and come up with policies that favor one part of those who use the currency over another.
They are doing this by manipulating, building, and manipulating algorithms that allow for decentralized control and immutable monetary policy from the get-go.
Bitcoin would be a good example of such digital currency systems.
Although both systems of currencies, decentralized or centralized, will have their upsides and downsides, there is no doubt that the future of money is digital.
These digital currency systems will significantly change how we perceive and utilize money.
Assuming you somewhat agree with the assessments, the only question would be: where do you place your bet — revamped centralized but digital currency systems or new decentralized digital currency systems?
Only time will tell.
5-On prosperity
A lot of people hold the opinion that technological advances will likely become more hurtful than they will be useful.
But history begs to differ.
Technological advances have led to more human prosperity than they have caused misery.
What really is prosperity in the concept of society and then the individual?
Prosperity is not only about having all the things you want.
The true measure of prosperity is time.
As such, spending less time working for your basic needs is a better measure of prosperity.
It frees you to do other things such as spending time with the people you care about, exploring your interests and creating something new, or volunteering to help others, etc…
One of the most thought-provoking concepts on prosperity that I found was from “The Rational Optimist,” a book by Matt Ridley.
In his book, Ridley uses the ‘reading light’ concept to explain how technology drives prosperity:
How long do you have to work to earn 1 hour of reading today compared to the past?
-In 1715 BC: it took more than 50 hours (Sesame oil light (18 watts burning for 1 hour)
-Before the 1880s: it took about 60 minutes
-In the late 1880s: it took 15 minutes
-By the 1950s: it took 8 seconds
-Today: it takes 5 seconds
Technology allows societies to specialize, hence having people who can make the necessities of life at a fraction of the time it would take one individual to make, therefore driving prosperity for all.
The biggest issue with how technology evolves in the modern economic system is that it works in favor of those who already have wealth and can participate in the early stages of the development of new technology, charging rent for its use to those who couldn’t participate in funding its development.
Those who fund these developments see compounding in their prosperity, and can often push policies either keep the rest out of the development cycles, or they policies that push technological advancements at the expense society at large, as long as they can keep compounding their own gains in prosperity.
I don’t have the exact words to explain the downside of how the fruits of prosperity, enabled by technological advancements, are not spread evenly in the framework of modern economic systems. But basically, if technology were a field, it would be left to a few to exploit, while the majority are left outside looking in, only receiving its fruits. Unable to exploit the fields themselves, they are locked outside, looking onto those who first got access to the fields, labored the fields, and keep building layers of bigger and larger fences that give them more opportunities to exploit the fields while keeping the rest out as much as possible.
Since prosperity and abundance go hand in hand, some systems do better at managing and spreading that prosperity, but all of the systems remain flawed and could lead to the demise of even the most prosperous societies today.
