Sage against the Machine – Freedom or Marxism?

Back in the day, before I retired to write Thriller novels, I had a career as a High Tech consultant. I had great clients (from IBM, HP, to Intel and beyond). I wrote regular columns for the old Upside and Electronic Design.

It eventually turned me into being an author. My first books (now way out of date) were non-fiction. My first book, High Tech with Low Risk for a time was a cult classic.

But George Guilder was the guru of gurus. When he spoke, smart people listened. He now speaks again….

What Guilder is predicting is the end of the “era of big data,” the eventual demise  (in a decade or two) of the Cyber cartels like Google, Facebook, Amazon, etc. This helps to explain why these firms are such active members of the Deep State, actively censoring conservative free speech, and buying media companies (e.g., Washington Post) to help spread Fake News (propaganda). Even Orwell didn’t predict that….

This is about The Future and its Enemies: Under Freedom,  markets and technology will evolve. Under Marxism, Deep State control, they will not.

Sage Against the Machine

A leading Google critic on why he thinks the era of ‘big data’ is done, why he opposes Trump’s talk of regulation, and the promise of blockchain.

New York

‘I rarely have an urge to whisper,” says George Gilder—loudly—as he settles onto a divan by the window of his Times Square hotel room. I’d asked him to speak as audibly as possible into my recording device, and his response, while literal, could also serve as a metaphor: Nothing Mr. Gilder says or writes is ever delivered at anything less than the fullest philosophical decibel.

Mr. Gilder is one of a dwindling breed of polymath Americans who thrive in a society obsessed with intellectual silos. As academics know more and more about less and less, he opines brazenly on subjects whose range would keep several university faculties on their toes: marriage and family, money and economics, law and regulation, and the social role of technology, a subject that engrosses him at present and the topic of his latest book, “Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy.”

Mr. Gilder has published 20 books, the best-known of which, “Wealth and Poverty” (1981), sold more than a million copies and made him rich. It was an impassioned defense of the morality and compassion of the free market. Ronald Reagan acknowledged that the book bolstered his confidence in supply-side economics, and he was known to be particularly beguiled by its opening line, which reads: “The most important event in the recent history of ideas is the demise of the socialist dream.”

Mr. Gilder also had a vast and avid following during the tech boom of the 1990s, when his Gilder Technology Report—an idiosyncratic subscription newsletter—shaped the investing habits of thousands around the world. Analysts spoke of a Gilder Effect, which had investors rushing to buy stock in any new company mentioned in the Report. The newsletter effectively ended, Mr. Gilder tells me, “in the months after the stock market crash of 2000, when I lost nearly all my 106,000 subscribers.”

Mr. Gilder, 78, is still immersed in the world of tech, but he doesn’t like all that he sees. Google makes him mad, as does Silicon Valley more broadly, and his ire is directed at the “new catastrophe theory” which holds “that artificial intelligence will make human minds obsolete, and that we’ll soon produce machine-learning tools and robotics that excel the capabilities of human brains.” He calls this attitude “Google Marxism”—a phrase he utters with a certain salivary distaste—“because Marx’s essential theme was that the Industrial Revolution of the 19th century had overcome all the challenges of production.” From that point on, Marx held, “human beings would focus on redistributing wealth among the classes rather than creating it.”

Marx was convinced that the steam turbine, electrification and what William Blake called “dark satanic mills” were a final stage in social evolution—“an eschaton.” Mr. Gilder loves abstruse words, and this one, which signifies a kind of climax in human attainment, is a particular favorite. “Google and the Silicon Valley people also imagine that their artificial intelligence, their machine learning, their cloud computing, is an eschaton—another ‘end of history’ moment. And it’s just preposterous.”

In truth, Mr. Gilder says, Google is at the end of its “paradigm,” which he defines as “avoiding the challenge of security across the internet by giving away most of its products for free, and financing itself with an ingenious advertising strategy.” Mr. Gilder also contends that Google believes capitalism is at an end—that “this is the winner-take-all universe,” as he puts it, “and the existing generation of capitalists are the final capitalists. That’s their vision.” And if you believe that “machines can re-create new machines in a steady cascade of greater capabilities that are beyond human comprehension and control, you really believe that’s the end of the human race.”

Mr. Gilder rejects the premise. “Machines can’t be minds,” he says. “Information theory shows that.” Citing Claude Shannon, the American mathematician acknowledged as the father of information theory, Mr. Gilder says that “information is surprise. Creativity always comes as a surprise to us. If it wasn’t surprising, we wouldn’t need it.” However useful they may be, “machines are not capable of creativity.” Human minds can generate counterfactuals, imaginative flights, dreams. By contrast, “a surprise in a machine is a breakdown. You don’t want your machines to have surprising outcomes!”

The narrative of human obsolescence, Mr. Gilder says, is giving rise to a belief that the only way forward is to provide redundant citizens with some sort of “guaranteed annual income,” which would mean the end of the market economy: “If everyone gets supported without any kind of growing up and facing the challenges of life, then our capitalist culture would collapse.”

Mr. Gilder worries deeply about the state of capitalism in America, and President Trump’s adamant focus on the trade gap irks him. “To the extent that the U.S. is the world’s leading capitalist power and welcomes foreign investment, it can’t possibly run a trade surplus.” Mr. Trump “is a politician, and his chief goal is to communicate to the unions in the Midwest that he’s on their side. Besides, it’s a lot easier to blame China than it is to really explain the widespread campaign in the colleges of this country to suppress manufacturing and industry in the United States.”

As we talk of capitalism and America’s universities, Mr. Gilder sits upright, unable to mask his indignation. “The point is that we didn’t want manufacturing in this country, and we suppressed it. All of our colleges are devoted to stopping things rather than starting them.” The “whole focus” of science in American higher education, he says, is on “the dangers and perils of technology rather than its promise.”

America’s university system, says Mr. Gilder, is “incredibly corrupt and ideological.” How did it come to be like that? Surely, I observe, it wasn’t that way when he graduated from Harvard in 1962. “It was beginning to get that way,” he says, as he revs his engines for a fresh sortie. “The rise of affluence through the 1960s created this kind of amazing irresponsibility that resulted in a whole generation losing track of reality.”

The pithy aperçu is Mr. Gilder’s forte. He tells me here that “human beings have a propensity to believe in leftism”—in the idea that government can “answer all of their problems, guarantee their future, and relieve them of the challenges of life.” The idea of a “completely providential government” arose in America, and a “whole generation of young people were given college loans in a fabulous national mistake, in which the Republicans participated.” These loans were used by the university system to “increase perks and tenured luxuries and ideological distractions”—all of which led to the “diversity campaigns and CO2 panics” that currently dominate university faculties.

The only way to undo this “vast blunder,” says Mr. Gilder, is to forgive student loans across the board and “extract the money from all the college endowments and funds that were used to just create useless departments and political campaigns.” More than $1.5 trillion in student-loan money is outstanding, according to the Federal Reserve. That money, Mr. Gilder says, “wasn’t deployed to improve education. Not a scintilla of evidence has been adduced that learning has been improved. It was used entirely to lavish on bureaucracies that, in turn, paid tribute to government and leftist nihilism.”

The impact of these loans, and of the academic ecosystem they engendered, has been catastrophic, in Mr. Gilder’s view. “The result was to destroy the entrepreneurial optimism of a whole generation of young people, to drive them toward socialism, which they now tend to favor, and to even dissuade them from marriage.” The last is a consequence of debt, “which cripples them for the future.” Any benefit that education might confer on the young is, in Mr. Gilder’s dark view, nullified by the economic burden inflicted on them, which “leaves these kids impotent in the world.”

We turn to national politics, and Mr. Gilder reaffirms his view—which he’s expressed often—that Reagan set the gold standard for the modern American presidency. “I hope Trump emulates him,” Mr. Gilder says. “I don’t know Trump, but he beat all my candidates, and he’s got something going for him. He’s a man of action, and I think too much stress is placed on his verbiage.” He credits the president with having “rolled back the climate-change cult in government to some degree. He’s appointing good justices, who can actually see through leftist claims, and he’s dismantling the reach of the administrative state.”

Although Mr. Gilder is a critic of Google, he disapproves of Mr. Trump’s talk of regulating the search engine—a prospect the president raised in a tweet describing its results as “rigged” against him and possibly “illegal.” This is no time, Mr. Gilder says, “for American conservatives to advocate an expansion of the administrative state into social networks and search engines.” If right-leaning content ranks low on Google, that shows that “conservatives still have a long way to go if they are to prevail in the opinion wars on social media. They cannot expect the government to do it for them.”

For all the gloom about Silicon Valley that appears to suffuse his new book, Mr. Gilder insists that he’s not a tech-pessimist. “I think technology has fabulous promise,” he says, as he describes blockchain and cryptocurrency as “a new technological revolution that is rising up as we speak.” He says it has generated “a huge efflorescence of peer-to-peer technology and creativity, and new companies.” The decline of initial public offerings in the U.S., he adds, has been “redressed already by the rise of the ICO, the ‘initial coin offering,’ which has raised some $12 billion for several thousand companies in the last year.”

It is clear that Mr. Gilder is smitten with what he calls “this cryptographic revolution,” and believes that it will heal some of the damage to humanity that has been inflicted by the “machine obsessed” denizens of Silicon Valley. Blockchain “endows individuals with control of their data, their identity, the truths that they want to assert, their transactions, their visions, their content and their security.” Here Mr. Gilder sounds less like a tech guru than a poet, and his words tumble out in a romantic cascade.

With the cryptographic revolution, he says, “we’re now in charge of our own information. For the first time in history, really, you don’t have to prove who you are, or what you are, before a transaction.” A blockchain allows users “to be anonymous if they wish, while also letting them keep a time-stamped record of all their previous transactions. It allows us to establish unimpeachable facts on the internet.”

That evokes trust in the internet, “without having to trust or rely on Sergey Brin, Larry Page, Mark Zuckerberg, or whoever the paladins of the new economy may be.” In the age of the almighty machine, Mr. Gilder believes, this is a notable victory for mankind.

Mr. Varadarajan is a fellow at Stanford University’s Hoover Institution.

Appeared in the September 1, 2018, print edition.

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