Markets Learn to Manufacture Intelligence and Politics Modernizes (Nick Land, Meltdown, Sentence 3)
whatshot 13 snips
May 9, 2025
The discussion dives into how markets are evolving to 'manufacture intelligence,' drawing on ideas from Hayek and Mises. Historical stock markets exemplify this trend. Political modernization is portrayed as an attempt to manage uncontrollable market forces, highlighted through examples like Soviet collectivization and American political paranoia. The implications of AI advancement are also explored, especially regarding calls for governance and oversight, alongside concepts like 'Politically Organized Defensive Systems' in relation to emerging intelligence.
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insights INSIGHT
Markets as Intelligent Systems
Markets are intelligent systems that synthesize and aggregate decentralized local information.
This intelligence is technically specifiable, making markets literally smarter than individuals.
question_answer ANECDOTE
Early Amsterdam Stock Market Example
The earliest stock market in Amsterdam exemplified how prices reflected real-time intelligence like news and rumors.
Stockbrokers raced to gain knowledge first, showing early market intelligence competition.
insights INSIGHT
Political Reaction to Market Intelligence
Politics reacts to markets' intelligence by modernizing and increasing paranoia to try to maintain control.
Political systems struggle to keep pace with dynamic market intelligence, leading to reactive and often desperate attempts to exert control.
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Ludwig von Mises's "The Calculation Argument" is a seminal work in Austrian economics, critiquing the feasibility of socialist economic planning. Mises argued that a centrally planned economy lacks the price signals necessary for rational resource allocation. Without market prices, efficient production and distribution become impossible. The argument highlights the crucial role of market mechanisms in coordinating economic activity. Mises's work has had a lasting impact on economic theory and policy debates. His ideas continue to be relevant in discussions about the limits of government intervention in the economy.
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The Independent Scholar
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The Paranoid Style in American Politics
Richard Hofstadter
In this seminal work, Richard Hofstadter explores the concept of the 'paranoid style' in American politics, which he defines as a way of seeing and doing politics characterized by heated exaggeration, suspiciousness, and conspiratorial fantasy. The book, which includes the titular essay first published in Harper's Magazine in 1964, delves into historical examples such as the Anti-Masonic Movement, Father Coughlin's antisemitic conspiracies, and the post-McCarthy Right. Hofstadter argues that this style is not exclusive to any one side of the political spectrum and has been a recurring theme throughout American history, influencing political discourse and the behavior of individuals and groups. The book also includes other essays on topics like 'Free Silver and the Mind of 'Coin' Harvey' and 'What Happened to the Antitrust Movement?'[2][4][5]
Seeing Like a State
How Certain Schemes to Improve the Human Condition Have Failed
James C. Scott
In this book, James C. Scott examines the failures of centrally managed social plans and the destructive consequences of high-modernist ideologies. Scott argues that states often impose simplistic visions on complex societies, ignoring local, practical knowledge and leading to disastrous outcomes. He identifies four conditions common to all planning disasters: administrative ordering of nature and society, high-modernist ideology, authoritarian state power, and a prostrate civil society. The book critiques various utopian projects, including collective farms, compulsory villagization, and urban planning, and advocates for a more nuanced approach that respects local diversity and practical knowledge.
The Use of Knowledge in Society
Friedrich Hayek
In this seminal article, Hayek argues that the knowledge necessary for economic decision-making is dispersed among individuals and cannot be centralized. He emphasizes that market prices play a crucial role in disseminating this knowledge, allowing individuals to make rational economic decisions without needing complete information. Hayek critiques central planning, suggesting that it cannot match the efficiency of market mechanisms in utilizing local and specific knowledge held by various members of society.
This episode unpacks the third sentence from Nick Land's "Meltdown."
"As markets learn to manufacture intelligence, politics modernizes, upgrades paranoia, and tries to get a grip."
What does it mean for markets to "manufacture intelligence"? Drawing on Hayek and Mises, we discuss how this phrase is not merely a figure of speech. The earliest stock markets around the year 1600 illustrate the concept.
We then consider the reaction of politics to this ascendant market intelligence. Much of political modernism, along with its heightened paranoia, is an attempt to cope with or "get a grip" on forces it cannot control. We discuss examples from Soviet collectivization to the "paranoid style" in American politics.
The idea finds surprising applicability in the contemporary debate around Artificial Intelligence. As AI accelerates, familiar calls for control and "safety" emerge. Referencing Land's "Machinic Desire," we discuss "Politically Organized Defensive Systems" (PODS) and their core rule: "the outside must pass by way of the inside." This is what's going on when it comes to AI governance and the push to centralize oversight of a rapidly escalating new form of intelligence.
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