when philosophers keep hearing the siren call of digital communism
To address income inequality, economists and philosophers keep coming up with the same ideas, most of which involve resurrecting heavy-handed control economies and adding computers.
When you study computer science, much of you first four years are spent essentially reinventing the wheel. This is partly because we really want you to understand why the wheel is round and it’s a bad idea to keep reinventing everything all the time because you’ll end up with a lot of clacking keyboard sounds and digital fury signifying nothing. If after everything you’ve done, you ended up with a round wheel, you probably understand the gist of what you’ll need to do out in the real world. The other reason is that we’re hoping that someone might actually spot a way to make that wheel better and more useful.
When faced with the thorny issue of income inequality across the world due to automation, stagnant wages, and tax policies which disproportionately benefit the wealthy, economists and philosophers have also been on a quest to reinvent the wheel. Their goal? To see if they can figure out a way to stop the freefall of the once comfortable, pluralistic, live-and-let-live middle class without being attacked for “inciting class warfare” by wealthy pundits preaching the secular equivalent of the Prosperity Gospel while promoting an economic road to nowhere.
Among their ranks is Stefan Heidenreich, whose proposal merges the algorithms behind the gig economy with people and subtracts the money involved. According to a paywalled interview he gave to Medium, Heidenreich sees matching people with goods a services as the only function of the economy and provides a few interesting quotes which elaborate on this worldview.
There are plenty of empty houses where nobody lives because they’re being used merely as investment vehicles. Houses are being matched with money instead of with people. […] Currently, the economy’s bias towards wealth is not presented to us as a political choice with alternatives. Going back to the matching function is to liberate our understanding of economy from money and payment, which allows us to imagine other possibilities.
This all sounds very much like the next iteration of “from each according to their ability and to each according to their needs, but with computers,” or, to appropriate a meme template from a certain animated TV show, just communism with extra steps. If we just open our minds to a world without money, he insists, we can simply use existing algorithms to find the one exact best match for the one exact good or service needed. This will certainly come as a surprise to those of us who ever tried to buy something in high demand just to be outbid, a common situation Heidenreich dismisses by pretending that scarcity isn’t a thing that exists.
If a profiling algorithm can determine the price one is willing to pay for a specific product at a given time and place, there exists exactly one marketplace for that sale. In that case the price of the item conveys no additional information outside of this single market.
In other words, for his algorithmic communism scheme to work, we just have to pretend that at no time have two or more people ever wanted to buy the same finite good and that all good are somehow equally desirable. If you want to buy a house in a location you really like with terrific schools and high walkability, you can put in bids until you beat out others who want to buy that house or other houses nearby. But according to Heidenreich’s algorithm, you shouldn’t get this sort of housing because you don’t have kids who’ll thrive in those schools, or elderly relatives who will appreciate the walkability. The algorithms will see to that.
Even if we decide to accept this notion just for the sake of argument, there might only be a few hundred houses in such a community and tens of thousands of families that would qualify for a match. How do we break the tie? Whoever’s closer and needs to make less of a move on the assumption that others won’t want to move too far? Whoever’s kids are closest to school age and relatives are older but still most fit? A dance-off? Rap battle? Social media followers? Put it to a community vote? Today, we consider all the factors we just enumerated, and use the ability to actually pay for the house as the deciding factor.
You could certainly dismiss this concern as getting into the weeds when trying to talk about a big picture idea, but if this idea ignores such a common real world situation and pretends this will all just work itself out, that should raise a red flag. (With a yellow hammer and sickle.) And this idea isn’t even new. It’s just a micro-economic, moneyless version of a concept for an artificial intelligence-driven macro-economy in which computers decide the optimal course for entire nations and industries. If such a big picture view that kept money around for ease of personal transactions can’t get off the ground even theoretically, what hope does this magical matching algorithm have? How does one train its neural nets and set up its geofencing?
Heidenreich is absolutely right that economies rely on matching people to goods and services, but they do so by determining what those goods and services are worth. Since time immemorial we relied on understanding how valuable something is to someone, and how they can afford it to make voluntary transactions happen. The alternative was that someone with more or bigger weapons would simply take the thing from you, and even there you could argue that incurring injury or death was the price that person was willing to pay. By essentially making things worth whatever a computer decides at the exact moment a transaction is requested, Heidenreich and advocates of similar schemes are tossing away the very foundations of economics.
This could work in a post-scarcity society where there’s so much choice and the basics are so cheap that it wouldn’t matter who got what house or what car. Well, up to a point. There would always be someone willing to acquire something exclusive and luxurious because there’s no society in which everyone is truly an equal. But since we don’t live in a post-scarcity world and don’t seem to be in a hurry to enter one, treating everything as a common good and running a sort of lottery to determine who gets what, assuring ourselves we’ll get it right, simply don’t work, even on paper. And the closest efforts to replicate those ideas in practice have failed for the last century or so, often with massive death tolls in the process.
Finally, consider that even in communist nations with command economies people just invented their own black market currencies and economies to ultimately get what they wanted or needed. They didn’t do it because they thought money was unnecessary or irrelevant. They did it because that was the only option available to them. And now imagine that the system which allocates what they’ll ultimately get, from housing to food, is ran by a computer. How long until these systems start being hacked to rig the algorithms in favor of certain people who found a way to pay hackers or became ones themselves? Personally, I’d give it a few hours.