Optimization is gentrification

Gentrification, like most entropic processes in life, is bittersweet. It makes a neighborhood economically viable, but the neighborhood loses something wonderful in the shuffle.

The process is well-documented. Struggling artists are attracted to a long-standing lower-income neighborhood. The low costs allow these artists to experiment with their ideas and combine them with the existing cultural vibrancy of the neighborhood to create something very interesting. It is a symbiotic relationship distant enough from the life-sucking pipelines of capitalist extraction that it can nurture something truly original and cool. What is cool eventually becomes valuable, as yuppies realize that they can buy into it for social capital. This eventually snowballs into a full development of the neighborhood, driving up costs, and driving out both the artists as well as long-standing members of the community. Eventually, it becomes yet another yuppie stronghold, high walls surrounding a void.

Gentrification is a lifecycle, the lifecycle of a neighborhood. Its death is driven by an entropic process, the same process behind Common in a GAP commercial, Che Guevara t-shirts, tech startups, kobe beef sliders, life hacking, and data driven decisions. The slow, painful death by optimization and decontexualization.

As described in detail in a previous post, we give order to our reality based on maps and symbols, arbitrary structures that we build up to make sense of what is essentially chaos. These structures correlate with the establishing of strongly connected neural networks in our brain, as experiences strengthen synaptic connections via Hebbian plasticity.

A single symbol is a chunk of experiences, analogous to the Platonic archetype, but far more fluid and never absolute. My “swan” is a collection of experiences. If I’ve only seen white swans, my “swanliness” will include “whiteliness.” The experience of a black swan will fundamentally change my symbol for “swan.” At the very least, “swan” will be associated with both black and white. Very likely, I may stop considering the notion of color at all. If there are black swans, there might be green swans. “Swanliness” and color will have a weaker binding at this point and I will focus more on the notion of space and structure to define a “swan.”

As our experiences pile up, symbols can take on arbitrary levels of complexity and tie into other symbols. Our entire world-view is essentially a gigantic spiderweb of linked symbols. We cannot experience reality without referencing this networked world view.

The beginning of the process of gentrification is symbol creation. Artist hipsters combine with locals to have experiences, swap existing symbols, and bricolage/create new symbols with no notion of quality. Without the tyranny of evaluation, these new symbols are allowed to grow and develop in weird ways. Most of these symbols are terrible and are eventually discarded. However, some of them become interesting. Yes, that poké brew-pub was totally a bad idea, but that series of photos you took about the collapse of traditional Latin-American religiosity in the face of the American marketing machine was quite good!

The lower costs allow people to try out more ideas than they otherwise would in an expensive, extraction-driven neighborhood like Midtown Manhattan (more on this later.) This is how hipsters serve the role of cultural speculators. They buy penny-stock ideas, and they see if any of those lottery tickets pay off.

Of course, the process of symbol creation depends on more than just low costs. The symbol must also be allowed to develop unmolested. Hip-hop was born in the South Bronx, back when New York City was a dungeon crawl straight outta Diablo 3. It was still the era of disco and record companies didn’t give a shit about hip-hop. Hip-hop was allowed to develop slowly and organically until it became a fully fleshed out culture and a stable symbol. If record companies had dug into the culture too soon, it would never have developed.

This is also why venture capital is so critical to the development of social startups. Bringing a social product to maturity is nothing like a SaaS or enterprise product where you’re matching a solution to a problem. Social products depend on building up a community, which cannot be forced and crumbles when prematurely paired with the often conflicting goal of monetization.

Creativity is definitionally correlated with underground movements. The low costs and freedom from value extraction create this rainforest-like environment where any organism can survive, thrive, and shake their tail feathers.

Gentrification begins with a sense of value.

As a symbol (neighborhood, creative movement, etc.) gains momentum, it becomes an untapped reserve of social capital. By associating yourself with the symbol, you can be “cool.” It suddenly has value to a large group of people outside of movement, who we’ll call “yuppies,” shorthand for the bourgeoisie as described by Karl Marx.

Yuppies are rather tragic. They are caught in the middle of the log curve of income utility, which creates an incentive structure that traps them there. On the upper end, the marginal utility of additional work is too low to make linear increases in effort worthwhile. On the lower end, the marginal loss of comfort is too high to risk non-linear gambles. Yuppies are trapped in their own middle income trap, so they play a different game: the orthogonal game of social status.

While yuppies do participate in creative activities, they could never compete with artists who dedicate all of their time into their craft. In a consumer society, yuppie social status is driven by curation. Curation requires a low amount of effort but a high amount of judgement, signaling taste and class in a way that purely creative activities cannot.

Yet this signal is diluted when the symbol is oversaturated. When everybody is associating themselves with the symbol, the value per person is reduced proportionally. You certainly don’t want to be the millionth person to hear about that cool new band or TV show.

This is why yuppies are drawn to new symbols: to escape the over-saturation of existing symbols. Think of it as wolves migrating from an over-hunted environment to a prey-rich environment.

Yuppies, due to a lack of free time, are unable to contribute back into the neighborhood, creative movement, or other symbol. Their interaction with culture is purely consumptive. Instead, they parlay their participation with the one resource they do have: money. This is the beginning of the end for the symbol.

Money translates subjective value into objective asset. Money can be measured or rather, money IS measurement. Thus, valuation turns into optimization.

Let’s talk a bit about optimization. The mathematical definition of optimization revolves around an objective function. This is a function that takes in whatever environment (variables) you have and spits out a single number. You adjust your environment to maximize this single number. The thing to note here is that the single number is a SINGLE number. If you have two numbers, you need to resolve conflicts between them, usually via scalarization, which spits out a SINGLE number anyways. The uniqueness of the objective is important because that is what causes decontextualization.

In the “swan” example, we can see a symbol changing based on new experiences. Now imagine that all the new experiences you receive are relative to this single number you are optimizing for, in this case money. The qualities of the symbol that directly generate money will be emphasized and the qualities of the symbol that do not directly generate money will be suppressed.

A symbol as a complete object is authentic. This authenticity has so many complex interdependencies that it cannot be expressed in a single measure. When you break aspects of the symbol down into a single measure, you lose a tremendous amount of information. As you continue to build the symbol, optimizing for this singular measure, you start breaking down the complex interdependencies required for this notion of authenticity and completeness. The optimized symbol becomes a caricature of its former self.

An analogy here is the effects of hardcore pornography on the minds of young men. Because everything is optimized for busting a nut, the whole notion of “woman” is decontextualized. Every aspect of the symbol that is not sexual is stripped away. With enough exposure, “woman” as a concept becomes no more than an amalgamation of pussy, tits, and feet. WAIT NO. I mean ass. Ass. Not feet.

This is why you start seeing hilarious caricatures of culture in these gentrified neighborhoods. Simulacra like fusion restaurants, concept cocktail lounges, themed brunches. In the aggregate, yuppies don’t give a fuck about context. They only give a fuck about talismans of status. And property developers definitely don’t give a fuck about context. They only want that money.

The end game of optimization is a symbol overfit for a specific objective, bereft of soul, authenticity, context and vibrancy.

Yet this is a double-edged sword. While optimization eventually decontextualizes and destroys the symbol, it is absolutely necessary for fitness. Without some kind of measurement of quality, some kind of critique of the ideas produced, we lack a way of directing our efforts and stripping away those aspects of the symbol that are “wasting resources.”
Destructive forces are essential in many complex systems: competition in a capitalist economy, apex predators in ecosystems, discriminators in generative adversarial networks. A discussion of these processes warrant a full post so I’m going to stop here and just say that I recommend you read John Boyd — Destruction and Creation, which is the inspiration for these ideas. John Boyd was a strategic genius who had the balls to communicate via Powerpoint presentations instead of papers. Destruction and Creation was the only academic paper he ever wrote, and it deals specifically with the interplay between creative/inductive forces and destructive/deductive forces.

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