Fake News and the Fall of Globalization

What seems to be the latest Russian specialty of the house (here, here and here), fake news have shaped people’s mind in recent years. Fueled by abused search engine algorithms and social websites, fake news have risen to the top and have been identified as the main contributor to recent unexpected results such as Brexit and Trump.

However, fake news are just one side of the coin. What has not been discussed so far and should be is why are fake news, and news in general, so powerful. If you don’t know what I’m talking about just take a look at the USA. According to Gallup around 43% of US citizens think ill of Muslims. However this number is a bit baffling when you take into account that the Muslim population in most of the states is below 1%.

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Robotech Funds, a path to Universal Basic Income

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Universal Basic Income (UBI) has been promoted and advocated by several of the most famous Silicon Valley entrepreneurs. It seems like a great idea. Since in the future most of the repetitive work will be taken over by robots, then people without a job will need to earn money somehow. UBI promises to give people enough income to make a poor living without the need to work. In the midst of a world where globalization and digital disruption has already wreaked havoc among the manufacturing rungs of society, and where this has lead to more and more nationalistic governments, UBI shines as a promise to protect the displaced.

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Freedom and efficient markets

The other day I was walking down the park at night when I saw some teenagers hanging out around near a school. They were dressed with hoodies and caps, and as I went by they opened their spray paint cans and started painting a master piece on one of walls.

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The only thing I could think then was this is too stereotypical. I then thought about betting my money on that they would have skateboards around. As soon as they were done drawing their misspelled artwork, sure enough they pulled out the skateboards. Could have won money easily. The next thought that came to my mind was how few degrees of freedom they had. In other words, how predictable they were.

Then the idea came to my mind, people and markets are not that different. A predictable market (one which you know what the price will be in the future) is a very inefficient market since it is not optimizing well the allocation of resources. On the other hand, a very efficient market is hard to predict since it is always at the right price given the available information. Because of this, it is impossible to predict whether the price will go up or down in the future.

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Now how do the two relate? Well inefficient markets and predictable people have one important thing in common: They are easy to control. And why is that important? Because as soon as you understand this, you can take advantage of it. In the case of the markets, you can win money. In the case of people, you can get them to do things you want, or predict how they’ll react to your behavior.

More importantly though, an efficient market behaves ‘on its own will’, since no one is controlling the price; we could say it’s a free market. I think this applies to people as well. A person who is truly free is not predictable since it’s being controlled by no one else. And don’t get me wrong, being a graffiti-skateboarder-hoodie-teenager doesn’t necessarily implies predictability as long as it is a conscious decision. As a market with predictable cycles which reacts immediately to people taking advantage, a person who decides to follow a pattern consciously can always adapt to the circumstances and free themselves from the trend as soon as it is no longer desirable.