Technology in the time of nationalism

The last 24 hours:

  • Sterling drops 8%.
  • $1.5T dollars erased from global markets.
  • The Prime Minister resigns.
  • Hundreds of millions pulled from private equity and VC deals.
  • Scottish referrendum and Irish reunification floated.
  • Leave campaign retracts NHS and immigration promises.

A story emerges.

It will become increasingly dangerous to live in a world of artificial intelligence and genetic engineering, when democracy remains conducted by television campaign promises and paper ballets.

Those in work voted to remain. Those out of work voted to leave.
The young voted to remain. The older voted to leave.

Britain’s young workers — those driving the economy forward–voted for European governance and open borders. Britain’s pensioners and welfare recipients voted for an isolated England.

From London, on the day of EU Referendum
If the answer of the majority is no, we failed to share the last gains, voters reject promises of future gains, and we together usher the consequences.

Far from just rejecting the gains that come with being a global financial centre, the English population voted for full control over the welfare state. They don’t want it controlled in Brussels, and they don’t want to share it with foreigners.

Where identity over economy means a larger share of a smaller pie. A strict lesson from citizens of England to global capital. Your money, my laws. What good is unfettered economic growth to people on legally-fixed incomes? Priorities of control and security. The surity to continuing benefitting from the society–and economy–they created, for the rest of their lives.

The young want upside, the older want downside protection.
The young see Europe’s benefits, the older see its costs.

Yanis Varoufakis continually warned of future backlash from European treatment of Greece — wave after wave of austerity forcing the Greek government to continuously break promises to its people. The shadow demolition of sovereignty. That echoes now in Britain. While the numbers show European membership underpins Britain’s economic growth and opportunity, growth is a secondary concern to security.

Ten years ago, the global financial crises rose. Then we fought our way back to record global growth.

Or did we?

The financial crises was not only a wave of destructive, but a wave of creative destruction that lead to a golden age of technology — the startup goes worldwide. Silicon Valley everywhere. Compounding productivity and efficiency gains. Record global output.

Record domestic output for all. Record income growth for some.

Distribution of average UK weekly earnings, 1997–2015 (ONS)
Summary distribution of average UK weekly earnings

Yet, it doesn’t make sense for the results from this referendum to be driven by wealth inequality. The United Kingdom has one of the highest rates of inequality in Europe. Therefore, if the economy was the driver, there would have been a greater move toward Europe, not away from it.

We’ve largely been in a boom-and-bust cycle since 1997 — since the first .com meltdown. Progressive waves of creative destruction at the hands of technology.

While each cycle rachets additional volumes of wealth toward the top 10%, the solution would by to move toward Europe, not away from it.

Global economic growth started exponential acceleration at the same time. The last 20 years was first the time of the personal computer, and then the explosion of the mobile device. Now we sit on the cusp of truly exponential growth – artificial intelligence.

We must now consider that the question is not when is technology going to begin dividing us as people – into people with different kinds of minds – but rather consider that process already started. The first generation of humans to use computing devices daily since birth has entered the economy. Billions of hours spent shaping minds.

That our step toward artificial intelligence in society is already well on its way, and we have just witnessed one of the first shocks.

The tone in London after the EU Referendum ranged from shock, to sadness, to anger. Then the questions.

How did we get this so wrong?

By all accounts, voting to leave the European Union impairs a huge part of the UK economy. The consensus seems to be five to ten years of lost economic growth as the deck is reshuffled into new consquences and new opportunities.

It appears on the surface that exiting the European Union runs counter to rationalism and self-interest. Unless there are factions of self-interest, diametrically opposed.

  • The young and the older
  • The worker and the pensioner
  • The European and English

What the (slight) majority of people sought in this election was control. The same message as “Take Back America” in the United States. Why such discontent in the world’s richest economies?

A chasm between the self-interests.

The young lived in European London. A world of Instagram, startups, artificial intelligence, and genetic engineering.

The older remain in England. A world of television, pensions, memories, and medical care.

The financial crisis has created an intergenerational governance crisis. The EU referendum is a shot across the bow, both for Europe and the United States.

Ultimately, for whatever reason, the majority of the population felt threatened by Europe. Responsibility for the vote itself – and what comes – lays at all sides.

Technology is the ultimate leveller. It was obvious that it destroys barriers of age, class, gender, geography, race. Now it appears it also creates them.

In the next great leap forward, we must consider:
1) not only the differences of those around us, but 
2) that those differences are becoming so pronounced that we have fundamentally different self-interests.

Overall, the EU referendum was a failure to recognise the real drivers on the other side. Whatever progress the young London worker sees as obvious, inevitable, and fundamentally desirable, left too many people feeling out of control, threatened, and vulnerable.

Governance itself is about balancing self-interest. Given the results of what we see today in Europe, we may be headed to a crisis of the ability to even understand what the other side values.

Worlds so distinct, that the likely solution requires restructuring democratic systems around technology.