Re: [OPE] Digital investor worlds

From: paul bullock <>
Date: Tue Jan 18 2011 - 11:40:53 EST

Lay mans question: With respect to flash crashes etc ... what I don't
understand is IF 'chaos' theory mathematicians (who believe mathematics is
inadequate, not that chaos exists) tell us that quite unpredictable
behaviour eventually occurs when 'predicting' a next set of prices and then
compounding that by reiteration, why can't we expect the algorithms
eventually to express 'chaotic' behaviour as they race ahead 'predicting'
the future (actually as a result of an inadequate number of decimal points
for all data in their systems) in the first place? Either algorithm sales
people are hiding their mathematical inadequacies or everyone is keeping
quiet about the problem to keep playing a game that must always break down
if it 'over calculates'.


-----Original Message-----
From: []
On Behalf Of Anders Ekeland
Sent: 17 January 2011 07:48
To: Outline on Political Economy mailing list
Subject: Re: [OPE] Digital investor worlds

Very interesting, but this is no Mandel-like "thinking robots" - this is
just plain old expert systems. What the article confirms is what a crasy,
wastful world the Wall street is:

"But at its worst, it is an inscrutable and uncontrollable feedback loop.
Individually, these algorithms may be easy to control but when they interact
they can create unexpected behaviors?a conversation that can overwhelm the
system it was built to navigate. On May 6, 2010, the Dow Jones Industrial
Average inexplicably experienced a series of drops that came to be known as
the flash crash, at one point shedding some 573 points in five minutes. Less
than five months later, Progress Energy, a North Carolina utility, watched
helplessly as its share price fell 90 percent. Also in late September, Apple
shares dropped nearly 4 percent in just 30 seconds, before recovering a few
minutes later."

Do anyone belive that a drop of the value of Apple of 4% in over a period of
a couple of minutes has anything to do with economic reality, not to speak
of Progress Energy.

I think it is clear to any sane person that the fluctiations in stock prices
are for the most part completely disconnected from economic reality.

We should demand that the stock exchange was only open a day a month, or
maby eack quarter in order to bust the myth that continuous trading has any
economic rationale. Imortant also to delegitimize that obscene incomes fromt
this kind of 99% useless - 0 sum - rentseeking activity.

Anders E

> From: Michael Webber []
> Sent: 2011-01-17 02:10:04 MET
> To: Outline on Political Economy mailing list []
> Subject: Re: [OPE] Digital investor worlds
> thanks for this, juriaan: very interesting. of course, this is not an
> example of an answer to mandel's question, for this system of
> interacting algorithms is producing unanticipated effects (emergent
> properties of complex, dynamic systems) but not new algorithms (yet!).
> On 17 January 2011 11:09, Jurriaan Bendien <>
> > In 1984, Ernest Mandel gave me a paper to read in which, among other
> > things, he noted:
> >
> > "There remains one unanswered question, a question which Marxists
> > have not taken up till now because it was not posed before humanity.
> > But after dwelling for decades in the realm of science fiction and
> > futurology, this question has now been brought to the threshold of
> > the materially conceivable, as a result of the huge leaps forward of
> > applied science and technology in the last decade: could human
> > labour construct machines which could escape the control of
> > humanity, become completely autonomous of men and women, i.e.
> > intelligent machines, and machines with a potential to rebel against
> > their original creator? After a certain point, would robots start to
> > build robots without human instructions (without programming), even
> > robots inconceivable to humanity and largely superior to them from the
point of view of intelligence?"
> >
> >
> > Just now, my friend Julio Huato referred me to an article which
> > sheds new light on this:
> >
> >
> >
> > Jurriaan
> >
> >
> > _______________________________________________
> > ope mailing list
> >
> >
> >
> --
> Michael Webber
> Professorial Fellow
> Department of Resource Management and Geography The University of
> Melbourne
> Mail address: 221 Bouverie Street, Carlton, VIC 3010
> Phone: 0402 421 283
> Email:
> _______________________________________________
> ope mailing list

ope mailing list
Received on Tue Jan 18 11:42:31 2011

This archive was generated by hypermail 2.1.8 : Mon Jan 31 2011 - 00:00:02 EST