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Capitalism is a paperclip maximizer

• VLM 11y ago
  The article irrationally assumes the best effort maximizer has no competition and long life, which we have not seen in endless lower powered implementations, and there seems to be no trend so unless it starts going exponential... There might be a barrier here, like speed of light or various mathematical limits that formalize the old saying of too many cooks spoil the broth. The required complexity of a uber-maximizer to handle the complex universe means its unprovably complicated and unreliable. Or you'd need a bigger computer than the universe to answer the halting question for a universe controlling control loop, or even something much smaller like a mere multinational corporation. Or another way to put it is a predatory competitor maximizer would inevitably be better at predation than its victim that focuses more on some arbitrary goal than on avoid becoming a meal, so in a hyper optimized playing field all you'd get is ever better predators eating each other and eating weaker non-predation focused orgs, or basically the modern business/finance system.
• bmmayer1 11y ago
  Capital doesn't maximize capital; it maximizes productivity. In absence of controls, capital naturally flows to productivity in order to be maximized by the holders of capital; but only because productivity creates wealth, not the capital itself.
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  • biomene 11y ago
    Capital only maximises productivity if it gains an advantage by doing so. In other words, productivity is a means for Capital to maximise itself, not an end. There are infinite examples of this: shrimp peeling machines have existed for ages, but shrimp is still mostly manually peeled in Thailand because it has a cheap workforce.
    • legitster 11y ago
      The workforce in Thailand is cheap because there is not enough capital. The answer will never be less capital.
      • Sakes 11y ago
        He's not making an argument for less capital. I think he needs to clarify his definition of productivity.
  • ZenoArrow 11y ago
    > "only because productivity creates wealth" Does it? For whom does productivity create wealth for? Productivity is about getting set results based on the smallest set of resources (time, money, materials, etc...). It does not include anything about wealth, nor where that wealth is distributed to, or whether resources could have generated more wealth used in a different way. It's actually possible for increased productivity to decrease wealth.
    • bmmayer1 11y ago
      Productivity is the creation of goods and services. Goods and services are the building blocks of wealth: one who has more goods and services is more wealthy. It is impossible to create more wealth without increased productivity. Now, to your point, the fruits of productivity could be unfairly captured by non-producers, in which case wealth is being misappropriated from those who created it to those who have the power through whatever form to capture it (i.e., taxes, feudal land ownership, etc).
  • theworstshill 11y ago
    Well said.
  • gglitch 11y ago
    If I'm understanding this observation correctly, you're saying that capital flows to the productive, which creates wealth, which in principle generates more productivity, and therefore draws more capital?
  • barrkel 11y ago
    Productivity is the ratio of outputs to inputs. In an efficient competitive market, profit tends to zero. That would make capitalism a minimizer of productivity, as long as productivity is greater than 1 (otherwise the enterprise is not profitable). Labour productivity, by economic definition, is the ratio of output to people. If most of the wealth generation in an organization is automated, labour productivity will be high, whereas if most of it is manual, labour productivity will be low, even when both organizations are producing the same amount of wealth.
• marcosdumay 11y ago
  Wait, what? Capitalism maximizes "giving people what they want". This is much closer to the benevolent AI models than to paperclip maxizers.
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  • drabiega 11y ago
    While that may be true in some sense there is a very important caveat. Capitalism maximizes giving people they want in proportion to the capital they have. The fact that the distribution is skewed by capital ownership and that agents other than people can own capital creates a powerful distortion and an entirely different systematic effect.
    • plutooo 11y ago
      Remember that capitalism works in favor of big numbers. 1 person has to earn as much as 1000 people in order to have the same power as them. So while your point still stands, if you have a decent middle-class then it will be much more powerful than any billionaire will ever be.
      • drabiega 11y ago
        The problem isn't power, it's the behavior generated by rules of the system. Because agents only receive output proportional to the capital they possess, they are incentivized to accumulate capital and the system ends up optimizing for capital instead. As the system progresses, agents get the choice between loosing their allocation or using it to accumulate capital. This is unfortunate since, theoretically, the whole point of capitalism is to maximize long term consumption.
        • plutooo 11y ago
          But what is capital but investment in the long term?
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• madaxe_again 11y ago
  Capital is not what most people conceive of it to be. Capital is commonly (and correctly) viewed as a "store of wealth", or as "the crystallisation of labour-time" - but capital comes in different flavours, and when you deal with capital in the form of goods which provide an incremental benefit to the user, what you have is indeed capital, but when you deal with money... it's up to you whether it's capital or not. Often, people confuse money with capital. Money is an exchange mechanism which facilitates the transfer of value between parties through a common unit of exchange. Money can be viewed as a subset of capital (i.e. as a sedentary store of value), or it can be viewed as the destruction of the benefits of labour, as it converts an active instrument (i.e. the work I am doing, or the goods I have produced) into a sedentary instrument which provides no incremental benefit, unless it is spent. So - how this relates to the article - capitalism is a system which currently optimises for money. When you take a step back and consider that by converting labour and value into money, you are effectively freezing the benefit of that labour away, accruing money as an end of its own ceases to make sense, as much of this value ends up lying in the ledgers of corporates, governments, or wealthy individuals, doing nothing for anybody other than perhaps dealing with some of the more fragile elements of human psychology (security). We have let a means become the end, and have forgotten that the Purpose of all of this is to promote human happiness - I mean, what other possible Purpose can there be?
  • AndrewKemendo 11y ago
    >capitalism is a system which currently optimises for money. If that were the case then cash reserves would be where the bulk of people poured their resources. In fact the majority of non-debt "capital" is held in real-estate and some combination of financial instruments (CD, bonds, common stock etc...). You are confusing how the assets are valued with what is actually being valued. What I think you are saying though is that capitalism is optimizing for having the highest dollar denominated balance sheet - which could be true, but I think that is a function of the people, not the function of open markets or the asset value function of assigning ownership to capital.
    • gglitch 11y ago
      Out of my depth here, but aren't the real estate and financial instruments being held merely as a generator of more money (except in the rare case that one actually lives on the real estate, I suppose)?
• nevinera 11y ago
  Corporations can be usefully described as 'profit-maximizers', but capitalism itself doesn't have a coherent behavior - you can't describe it as any kind of AI.
  • Sakes 11y ago
    AI is just a subset of intelligence. You absolutely can describe capitalism as an intelligent system since it is primarily made up of units (people) which are intelligent. If capitalism didn't have a coherent behavior, then how could we ever rely upon it as a primary driver of our economy? It must be coherent and on some level understandable for us to make predictions around it.
    • nevinera 11y ago
      You can call an ecosystem 'intelligent' if you want to, I suppose, but there's not really any way to discuss it as a 'maximizer' when it has no goals and no intentional behavior. You could as easily describe water as a 'gravitational potential' minimizer - it has a collective aggregate behavior that you can characterize, but that doesn't make it intelligent by most definitions of the word. >If capitalism didn't have a coherent behavior, then how could we ever rely upon it as a primary driver of our economy? It is not a 'primary driver' of our economy, it is a description of our economy. The primary driver of our economy is corporations - entities obeying a profit motive. They have behaviors, intentions, and goals - they attempt maximize shareholder profits. "Capitalism" doesn't intend anything, have any goals; it doesn't even have any non-emergent behaviors.
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      • Sakes 11y ago
        Every time I start writing a response to this, I can't help but feel it will simply be misinterpreted. I thought my original response was pretty succinct and clear. If you'd like to continue, please select one discrepancy and I'll be happy to discuss it further with you.
• transfire 11y ago
  Nailed it.
• mhb 11y ago
  What we really want is a happiness maximizer but no one knows how to make one of those which leverages the innate characteristics of people. Capitalism seems like a pretty good system to pragmatically approximate this happiness maximizer. Yes, there are negative externalities to capitalism including possibly maximizing short term happiness at the expense of long term. Is there something better? Framing this in terms of the paperclip maximizer made this idea appear more interesting than it turned out to be.
• unoti 11y ago
  The root problem here is not economics, it is basic human nature. Humans have forever been seeking to increase their power base at the expense of others, and been corruptible by greed. This is not new, and it is not limited to capitalism. It's basic human nature, and it's one of our key weaknesses.
  • thiagoharry 11y ago
    I'm not seeking to increase my power base at the expense of others. If I would get less money doing something that would make the world a better place, I would happily choose this. Am I not human? I see this kind of answer as a kind of explanation widely disseminated to justify our economic system as inevitable, but which have very little scientific basis. For me it's wishful thinking. The kind of economic growth observed in capitalism and some of its characteristics like the cyclic crisis not related with natural changes like climate is something unique to our civilization. And it's a very new thing at the human history (less than 300 years). What will be the effects of these things at long scale is something still to be comprehended.
  • Sakes 11y ago
    The problem with building arguments around human nature is that just about everything is human nature. Greed... Altruism... * Edit for clarity * So it can be invoked to justify almost any argument involving human behavior.
  • Retra 11y ago
    It's not so basic that it can't be overcome.
• electricblue 11y ago
  War can only destroy capital, perhaps the most breathtaking destruction of capital in history was WWII. So War would be antithetical to this hypothetical capital maximizer and it would be it's among its top priorities to avoid it. Similarly, the market system based on human rationality is far too volatile for our capital maximizer, it would look to replace that ASAP.
• Rhapso 11y ago
  Economic systems are optimizers (each with slightly different objective functions). One of the first things we learn about optimizers is that they are rarely globally suited to solving problems, and that the best technique is to identify and apply the locally optimal solution over the range of input. TLDR: We need to admit that there is not a globally applicable economic system, and learn to apply different models where they are most efficient/least disastrous.
• plutooo 11y ago
  It's a faulty analogy. In fact, a paperclip maximizer goes against every single principle of capitalism out there. The paperclip maximizer is bad exactly because it isn't based on capitalism; it will maximize paperclips regardless of whether someone values them or not! At _any cost_, it will maximize paperclips. Markets, on the other hand, have the goal of providing products/services that people are willing to pay for. It adapts. The more people value it, the more capital it will attract, and the more resources will be allocated to it.
  • irln 11y ago
    You've identified one of the key defects in capitalism today...the disconnect of a "true" market where value is measured by folk's willingness to pay for things.
    • plutooo 11y ago
      So, the problem is not enough capitalism? ;)
      • irln 11y ago
        Not more capitalism :), just determining a better way to manage the money supply then a few folks on the board of central banks. If we could somehow connect an increase or decrease of the money supply to a classic market definition (e.g. people buying and selling) I think it would make a very positive impact to everyone.
• electricblue 11y ago
  Thinking about this some more, it would seem that if we really have a Capital Maximizer then the system's process toward its objective (creating capital) is highly inefficient. If your goal is to create capital in the world you need better infrastructure, after all what capital is more useful than that which can be easily used to create more capital? Long term, if you're a Capital Maximizer trapped on this planet, you only have a small finite amount of resources than can be converted to capital, you would want to spread out to other planets very soon. These are obvious things we aren't doing very well.
  • eli_gottlieb 11y ago
    There are currently a few rules crippling the Capital Maximizer: 1) Don't think in a longer term than five years. That's risky. 2) Labor is the worst expense to have, so minimize the amount of expensively useful work that has to be done. 3) Collude with others when it's gainful, but don't coordinate with others to get around rules (1) and (2). Coordination is for commies. "It does often seem that, whenever there is a choice between one option that makes capitalism seem the only possible economic system, and another that would actually make capitalism a more viable economic system, neoliberalism means always choosing the former. The combined result is a relentless campaign against the human imagination." -- David Graeber
• eli_gottlieb 11y ago
  Oh good. The Americans are rediscovering Das Kapital. Forgive the snark, but when I first heard about paperclip maximizers, I thought, "Oh, you mean like capitalism." That these two things have a likeness is the reemergence of an idea that had been buried in order to make capitalism look good.
• epx 11y ago
  People fantasize too much about capitalism. The definition of capitalism is: capital and income are expressed under the same monetary unit (like mass and energy could be): income = capital x interest rate The former alternatives was to put capital in a separate "namespace". In Middle Ages, only nobles could have land and land was the only capital that could exist ("usury" was forbidden, you know). Then came mercantilism, that defined wealth as a quantity of gold that one had; and so on. Capitalism will certainly pass, but hopefully not going back to restricting access to capital. I imagined something like a "complex" interest rate, with the imaginary part representing natural resources, while the real part is the human effort that is the only think currently measured by monetary unit. But bimetalism failed everywhere it has been adopted, I think that the imaginary part of a price would become dominant since natural resources are becoming the limit of economic output.
• ArkyBeagle 11y ago
  Capitalism depends on price theory, which predicts that making too many paperclips will cause them to be in glut and the price will drop. So a paperclip-maximizing AI might oughta be built to take that into account.
  • dredmorbius 11y ago
    Point missed. It's not that any one product is being produced. "Capital" (or profit or wealth) here is the combined market aggregate of all production. The problem is that this too, as with any single optima process, leads to madness. In the case of capitalism, ecternalities, equity/equality, sustainability, and systemic global risk are all undervalued, and simple short-term profit maximisation tends strongly to "underproduce" these.
    • ArkyBeagle 11y ago
      I get the point - it's necessary to reanimate the mouldering bones of Malthus now and again. I just disagree with that because the emiprics of the case are pretty lopsided against him. He could not have known about engines. Which now appear to cause one whale of an externality. The only thing Capitalism did was replace Mercantilism at scale. You had production before. What's weird is that economists talk about ways to actually price things like externalities, equality, sustainability and/or risk. That might be madness or it might be reason. If we can't price them, then are we not dropping the checkbook and reaching for the sword?
• tpeo 11y ago
  I disagree with much of what was written, but I find it hard to address what seems, to me, more like a long analogy than anything else. "Capitalism" doesn't maximize "capital", in any sense. The word "capital" generally refers either: to some asset that might be used in production, such as a piece of machinery; or structures that might render services over a time, like buildings; or to some sum which might be used in buying either of these, through financial services. Now, "capital" wouldn't be maximized by "capitalist" firms. Why should they? Firms produce additional capital units so long as they can be sold above production cost, but they won't produce indefinitely. They are concerned with their profits, not with the amount of product. They aren't even concerned with the products' value, so long as it is above production costs. Hence, there's no incentive to inflate the capital good prices, which would be necessary to maximize the amount of money "capital". Also, an it really be said that capitalism is an adaptive intelligence system? That, I'm not knowledgeable enough to tell. On the other hand, human interaction is unstructured enough that it seems unlikely that there's any goal to such supposed intelligence, or that it has capital-maximization as it's goal. Rather, I see a collection of different goals, each corresponding to different agents, and some of which might even be contradictory. The noisy neighbor, the ambitious monopolist, or the NIMBY all seek to maximize their private benefit, but often beyond social benefits. Hence I find it hard, whenever markets fail through the presence of either externalities, imperfect competition, or adverse incentives, that it ought nonetheless be the work of some powerful demiurge. Yet, in so far as it puts into words an anxiety that so many feel, I can't say much else beyond that I don't believe it. The author certainly proceeds by analogy when he likens "capitalism" to an artificial intelligence whose goals themselves mean nothing to humanity at large; and mentions alienating "monuments" to capital, as if to liken it to a 20th century pharaoh, or to cruel tyrant. But since so many feel this is really the case, I have nothing else to say (other than that it's a very vivid picture). I disagree, for instance, that the majority of goods are worthless, as they ought to have some value in order to be sold. Even Marx reckoned this much, and thinking otherwise seems like relying too much in the stupidity of others (which should never be trivially admitted). That would be the case if capital were built beyond all possible utility (say, like a bridge between London and NY). And I don't think it is necessary to make analogies to speak of wealth and income distribution issues, which are real problems in themselves, and which the majority of people are already acquainted with. Rather, I think that such analogies make problems much larger than they ought to be, by giving some monstrous character. Would be it be easier to tackle inequality by conceiving it as a result of an incredibly power artificial intelligence? I don't think so (even if the system is rotten, we'd be waiting on a constructive proof of one that isn't).