The Productivity Paradox

In the IT world, there is what is called the Productivity Paradox. That while investment and development of information technologies continuous, there is little if not less productivity in the markets. Many have tried to answer how can this be. Though there have not been a set explanation, there have been many proposed answers.

One of these answers is measurement quality. The service industry is the one most affected by IT development. Currently the method of productivity measurement can lead to anomalies which may serve to explain the contradiction between technology and productivity. However, trends in the service industry would contradict these claims and it is suspect how the whether the qualities of the sector would actually be relevant in this assessment. 

In addition there are lags. Quite simply, IT takes time to pay for itself. This kind of technology typically has a learning curve that gives the appearance of inefficiency due to the benefits being indirect and long-term. The market has a tendency to be averse to short-term loses, providing the perception.

Another explanation is redistribution. IT implementation may allow for a firm to gain a bigger market value share, but does not increase the total market value. Information gathering is typically only useful for individual companies, however it rarely changes the value output. The value gained from research and analysis is intangible as far as the economy is concerned. However a counter point would be that this does not explain why companies that do not invest on IT lose sales to companies that do.

An a fourth explanation is that it is not information technologies that are the issue but instead the managers. That because technology is evolving so quickly, management principles have not have had the time to catch up on what might be the best way to implement and systematize the tools available. Regardless of these inefficiencies, managers in general seem to still perceive a benefit from their investment in IT.

Regardless of whatever explanation claims people have made, it is imperative to remember that measuring productivity is not a refined process. There are still many questions when it comes to how IT truly benefits firms and the greater economy. However, as both research and technology continue to evolve, our relationship with our tools will continue to change as well.

http://ccs.mit.edu/papers/CCSWP130/ccswp130.html

DON'T BELIVE IN THE CULT OF AI

Over the past years, droves of people have sung praises to AI as a technology. They say it is the future, something that will change the world like fire or electricity did. That the very concept of "work" will be revolutionized. Naturally, such these are mostly exaggerations. 

 In truth, AI is algorithms relating to a long string of calculus equations. It, as well as all software, can be thought of a list of automated instruction on how to turn a series of 0s and 1s into another series of 0s and 1s in ways that are useful to users. AI is no different. The way they are built is by training the intelligence to create an equation that will take in a prompt and output a result based on the most probable (read average) prediction on what the right answer might be. The AI is adjusted and trained better match outputs to desired inputs leading to programs like Leonardo.Ai or ChatGPT. 

What these sites often fail to mention is the limitations of AI. A computer can only compute arithmetic sequences and use algorithms to compute algebraic and more complex mathematical concepts. Because of this, everything we must ask a computer to do must be first abstracted in numerical terms, and the code written to output a result that can then be converted back into a useful result. Image generating AIs are given massive libraries of art works in order to create their images. However, unlike inspiration in which there is lateral interpretations and extrapolation, an AI will respond to the prompt, "girl with blue hair" and create an image of a girl with blue hair, not because it understands what "girl", "blue", or "hair" is, but because in its library, there is an image that is label with those words, so that must be the most likely correct answer. This often means that the AI will simply return one of the works in its database, bit rendered as it was passed through a filter. This is, by even the standards of the US courts, not an original work but instead theft. Take into consideration that most artists did not consent to have their artwork used in these programs, and you have an industry bankrupt of innovation.

You might have noticed there have been a lack of talk about AI innovations. In fact, I would wager there is more work on the internet about the anxieties of AI rather than leaps in AI development. There is a reason for this. Because AI is biased towards average based results, most of the things done by AI trend towards the generic. In addition, AI does not understand anything, so when it is asked by, say edit a paper, it will more often than not alter in ways that make sense to a statistical system, but is bizarre and unnatural for a human to say or read, due to the idiosyncratic nature of human language. More relevantly, AI can be outright disastrous when it comes to legal documentation. We have talked before about the court case in which lawyers used ChatGPT to write their arguments and the software outputted fake cases, which ended up being used in an actual trial. You can imagine the judge's reaction when he found out. Because AI has no concept of "reality", it might quote information that is completely fictitious because it is statistically likely information like that might exist, which to the computer is the same as it existing.

People in the AI industry are people who benefit from people believing in the infinite potential of AI. But if AI was so revolutionary, why would these companies not change the world themselves but instead ask their clients to use the technology for them? Ultimately AI might not be a passing trend, but its hype will be.

THE DIGITAL FACE STEALERS/ LOS LADRONES DE CARAS DIGITALES

We live in a strange era. For most of history, people have had a sense of logic to the world; a logic something that could be used to determined the absurd from the realistic. In modernity, specially in these past years, it has felt like this logic has abandon us to the point that the things we would have previously laughed about, are now urgently real. Shifts and threats that would be restricted to tall tales or novels becoming reality in ways that are disruptive and sometimes actively malicious. So lets talk about "deepfakes".

AI, that is something you don't seem to be able to avoid talk thereof these days. AI will replace artists, AI will replace authors, those are some of the common talking points. But AI will replace, "you"? Deepfake technology is a collective term used to describe software that is able to replicate the likeness and even the voice of a person to such an extent that people may confuse it for the reality. People like Tom Hanks, leading actor for movies such as Forest Gump or Saving Private Ryan, has had to deal with digital imitators. An AI clone had been used in Instagram advertisements against the consent of Hanks, leading the actor to release a statement clarifying what was happening. On a concerning note, many technology companies have pitched the concepts of AI clones as a solution to the problem of having to treat human beings as people. Naturally, this has been a point of contention in the SAG-AFTRA strike, between actors, writers, and the producers.

So we live in a sci-fi movie, what now? One of the things to keep in mind is that AI, by the nature of it being code, can only make things through a series of average values derived from calculus expressions. As such, AI can never have an "understanding" of the task it has been assigned to do. Once it has to go outside the box it was design for, if it can even, the AI has no capacity to adapt or innovate, only copy what it was trained on. It is not a dynamic system that can create its own ideas, instead it is best to think of it as part of the same family of programs such as auto-complete or Instagram filters. As the novelty of the technology fades, people will become urgently aware of its limits. One of the things AI will probably replace are jobs that employers did not see the value thereof in the first place. It will most likely be used by people who want to spend the least amount of money on the particular activity they are employing the AI for. What this means is that whether AI will replace humanity in the workplace is not a question of competency or efficiency, but instead whether the forces that be valued humanity in the first place.

So, what do you think? we would like to hear your opinions about AI and its place in the future, both in the arts and in business. Do you think AI will be here to stay or is it just a passing trend? How have you interacted with AI? Are you concerned that it will be used to harm people or are you excited about what possibilities may open up.

MERCADO CRYPTO EN FUEGO, EL FUTURO DE BLOCKCHAIN TECNOLOGÍA ES INSEGURO

 Muchos todavía recuerdan el boom de las criptomonedas de 2021. Parecía que la forma de hacer negocios iba a revolucionarse. Empresas como Bored Ape Yacht Club fueron pioneras en el mercado NFT, Bitcoin se estaba generalizando y FTX, un mercado de criptomonedas, estaba en auge. Parecía que el blockchain iba a ser el motor del progreso durante las próximas décadas. Y como la mayoría de los sueños de una revolución completa y radical, la realidad fue totalmente diferente.

Sam Bankman-Fried, ex director ejecutivo de FTX, la empresa de criptomonedas actualmente en quiebra, está ahora siendo juzgado. Los delitos: fraude electrónico, fraude de valores, fraude de materias primas y blanqueo de dinero. Bankman había tomado dinero de las cuentas de los clientes para utilizarlo en inversiones personales y contribuciones políticas. Incluso existe la posibilidad de otro juicio para abordar la naturaleza política de la acusación. Cómo funcionó esto es a través de Alameda Research, un fondo de cobertura propiedad de Bankman. Al fondo se le permitió pedir prestado una cantidad ilimitada de fondos de FTX. Bankman ha afirmado su inocencia y ha achacado esto a la incompetencia de las personas que lo rodean por ser descuidadas con su seguridad. Sus colaboradores más cercanos ya han confesado su participación en el plan.

Más que otros, la industria de la criptografía se ha asociado con un flagrante desprecio por la ley o la regulación. Muchos ven esta prueba como una forma de sentar un precedente en la industria. En este punto de vista hay que señalar dos cosas: que la estafa de Friedman le costó a la industria 8 mil millones de dólares, provocando un efecto dominó que arrasó con los medios de vida de las personas que invirtieron en empresas de criptomonedas o que eran propietarias de ellas; y que Friedman había rescatado previamente a muchas personas en la industria cuando el mercado colapsó en 2022 al aumentar las evaluaciones de criptomonedas.

Les cuento esta historia hoy porque este es un aspecto de la inversión en el que mucha gente no piensa. Cuando se trata de nuevas tecnologías, debido a la falta de conocimientos sobre STEM o de experiencia financiera, la gente cree rápidamente en las promesas de los directores ejecutivos sobre cómo cambiarán el mundo. Además, en esta era moderna, hemos llegado a asociar el progreso con el avance tecnológico con fines económicos. Son sinónimos a estas alturas. Como tal, es fácil aceptar la exageración de tales figuras y organizaciones, como una forma de obtener parte de la gloria que han obtenido. Sin embargo, es muy importante tratar siempre de ver las cosas, no como desearías verlas, sino tal como son. La gente había estado diciendo que el mercado de las criptomonedas era un lugar corrupto y despiadado durante años, y aún así la gente seguía comprando. Ahora, muchas personas normales, incluso antes de este incidente, lo han perdido todo porque creen en una mentira difundida por estas personas. No debemos dejarnos cegar por las luces brillantes de tales cosas o de lo contrario podríamos descubrir que lo que pensábamos que era una luz guía era el señuelo de un pescador.

¿Qué opinas del caso Sam Bankman-Fried? Nos encantaría escuchar sus comentarios a continuación. Como siempre, puede comunicarse con 200GFS si desea realizar una consulta y le deseamos lo mejor.

-200GFS

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Works Cited

Griffith, E. (2023, October 2). Who’s rooting hardest for a Sam Bankman-fried conviction? the crypto industry. The New York Times. https://www.nytimes.com/2023/10/02/technology/crypto-insiders-sam-bankman-fried-conviction.html

Yaffe-bellany, D. (2023, October 3). What to know about Sam Bankman-fried’s fraud trial. The New York Times. https://www.nytimes.com/2023/10/03/business/sam-bankman-fried-trial-ftx.html

CRYPTO MARKET ON FIRE, THE FUTURE OF BLOCKCHAIN TECHNOLOGY IS UNSURE/ MERCADO CRYPTO EN FUEGO, EL FUTURO DE BLOCKCHAIN TECNOLOGÍA ES INSEGURO

Many still remember the crypto boom of 2021. It seemed like the way to do business would be revolutionized. Companies such as Bored Ape Yacht Club were pioneers in the NFT market, Bitcoin was becoming mainstream, and FTX, a cryptocurrency marketplace, was booming. It felt like the blockchain was going to be engine of progress for the following decades. And like most dreams of complete and radical revolution, the reality was starkly different.

Sam Bankman-Fried, once CEO of FTX, the currently bankrupted cryptocurrency company, is now on trial. The crimes: wire fraud, securities fraud, commodities fraud and money laundering. Bankman had taken money from customer accounts to use in personal investments and political contributions. There is even the possibility of another trial to address the political nature of the indictment. How this worked is through Alameda Research, a hedge fund that was owned by Bankman. The fund was allowed to borrow an uncapped amount of funds from FTX. Bankman has claimed innocence and has blamed this on the incompetence of the people around him for being careless with their security. His close associates have already confessed to their involvement in the scheme.

More than others, the crypto industry has been associated with a flagrant disregard for the law or regulation. This trial is seen by many as a way to set a precedent in the industry. Two things should be noted on this view: that Friedman's con cost the industry $8 billion, causing a domino effect that obliterated the livelihoods of people who either invested in or owned cryptocurrency firms; and that Friedman had previously bailed out many people in the industry before when the market crashed in 2022 by driving up cryptocurrency evaluations. 

I am bringing this story up today because this is an aspect of investment a lot of people don't think about. When it comes to new technologies, due to a lack of either STEM literacy or financial experience, people are quick to believe in the CEO's promising how they will change the world. In addition, in this modern age, we have come to associate progress with technological advancement for economic purposes. They are synonyms by this point. As such, it is easy to buy into the hype of such figures and organizations, as a way to have some of the glory they have garnered for themselves. However, it is so very important to always try to see things, not as what you wish you would be seeing, but instead for what they are. People had been saying that the crypto market was a corrupt and cutthroat place for years, and yet people still bought in. Now many normal people, even before this incident, have lost everything because they believe a lie peddled by these people. We must not be blinded by the shining lights of such things or otherwise we might find that what we thought was a guiding light was an angler's lure.

So what do you think of the Sam Bankman-Fried case? We would love to hear your comments below. As per always you may contact 200GFS if you wish to make a consult, and we wish you the best.

-200GFS