On October 19, 2024, six of us continued our discussion of Bruce Schneier’s A Hacker's Mind at the point where the author noted that even religious beliefs can be hacked. Typically, penitence involves acts of contrition to absolve one of sins, bypassing purgatory and taking a shortcut to heaven. Another shortcut is using money to absolve one of sin. In other words, you can get to heaven by buying an indulgence. These indulgences became commodified and even became a form of money where middlemen arbitraged their value in markets.
For that matter, what makes a market successful? What makes it a free market? A successful free market must include information, choices, and agency. Buyers need trustworthy information about products and services to make intelligent decisions. Buyers must have multiple sellers to get competitive pricing. Buyers need agency, the ability to deliberate and make the best choice. Do these elements also define capitalism? Can these elements be hacked making a market less free?
Stealing the drafts of company press releases before they are made public, buying shares to pump up the price of a stock and dumping it to reap profits, and even creating a fake financial news website reporting that someone was buying a company, driving up prices of its stocks, are some of the ways to make a treacherous market for the naive investor. Even before the release of a company’s financial report, members of that company are prohibited from buying or selling company stock before it is made public.
Other hacks are not illegal such as high-frequency trading that buys stock when there is a drop in its price and sells the stock when its price increases within a millisecond. Trades are made on the small ups and downs of the stock’s price which we perceive as noise, but a computer can seize an opportunity in these small variations. A mysterious crash in the market where over a trillion dollars was lost in 2010 prompted some to suspect that a high-frequency trading computer may have caught a downward wave and it was transformed into a tsunami with other automatic traders joining in on the downward wave eventually swamping the market.
Another way a market becomes less free is when there are monopolies, when a company becomes the exclusive supplier of goods raising prices, reducing competition, and reducing choice. We even have companies too big to fail, and governments must rescue them. Are they too big to exist?
Venture Capital is another hack where backers with deep pockets start new companies to capture quick profits. The venture capitalist’s expectations shape the new company’s culture where there is pressure to make a huge profit by forcing these companies to undertake high-risk projects rather than projects that are more attainable but with smaller profits. Extraordinary claims of some companies attracted more money to them and starved other companies of capital. Another hack is for criminal organizations to launder their ill-gotten gains by buying luxury condominiums and using them as collateral for loans to fund the purchase of untainted investments. To reduce depreciation, these apartments are not rented resulting in 30% of them being vacant in certain areas of London stifling the opening of small businesses hoping to serve residents who never appear.
Do we have the Selfish Gene that makes all of us hackers, perpetually looking for shortcuts and workarounds? In a biological frame of reference, an invasive species can cause an ecosystem to collapse. Fish farms raising Asian Carp allow some to escape into the Mississippi River. They outcompeted the native fishes, lowered water quality, and killed off sensitive organisms like local freshwater mussels. Are humans also an invasive species since our peripatetic habits force us to venture into vulnerable ecosystems? After all, hacks are parasitical. Some have minimal impact and others can collapse a market. Can we live in harmony with others and with Nature? Are there patches to prevent either the collapse of a market or an ecosystem?
We invite you to join our shared inquiry to find out if Artificial Intelligence (AI) can be hacked, or will AI hack us in A Hacker's Mind: How the Powerful Bend Society's Rules, and How to Bend Them Back by Bruce Schneier. on November 2, 2024, from 2 PM to 4 PM using Google Meet.
