Thursday links: These links may or may not be safe to click on

Harari on our bovine financial future

The good news is that Yuval Noah Harari does not think AI poses a Terminator-style risk. No robots are coming to exterminate us.

The bad news is that the peaceful outcome he foresees instead is not much more appealing: “We are the cows of the future,” he told an interviewer this week.

He means that metaphorically: The world AI is now creating will soon be as incomprehensible to us as the human world is to cows.

The historian-turned-futurist explains that humans “took over the planet” by building “bureaucracies.” Our lives, he says, are shaped by the bureaucracies of banks, governments, legal systems, and religious institutions. 

Animals’ lives, too. The number of cows that exist, how they exist, and where, is a function of the money, markets, laws, and religions humans have invented; none of which they understand.

“How do you explain the bond market to cows,” Harari asks, “even though it controls their lives?”

We could soon find ourselves in the same situation. For the same reason. The bureaucracies of the future will be shaped by AI, Harari warns, because AIs are “bureaucratic natives” and will therefore be much better at building them.

“For us, bureaucracy is difficult,” Harari explains. “We were born in the forest, not the office.” For AIs, by contrast, “bureaucracy is home. They were born in the office.”

Harari’s chief concern is that AIs will create a financial system — markets and money both — beyond our understanding: “Just as cows can’t understand the financial system that controls their lives today, we will not be able to understand the financial system that controls our lives in 10 or 20 years.”

This might cause problems, as we’ve previously discussed. If AI makes markets unintelligible to humans, we may not want to participate in them any more. In which case, markets may cease to function.

But who even knows how markets work now? No one, really — which, Friedrich Hayek would say, is kind of the point.

We don’t need to understand why prices are what they are. We only have to respond to them by adjusting our consumption and investing accordingly. This is how markets make the world better: by creating price signals that incentivize us to allocate our resources more productively.

Harari warns that AIs will create financial markets of unfathomable sophistication. But if the measure of any market is the quality of the price signals it produces, what is there to fear from better ones? 

Better markets will lead to better price signals, which, in turn, leads to the better allocation of our resources. If AIs become perfectly knowledgeable, our resources might even become perfectly allocated.

We won’t have to know how it works. To reap the benefits, we’ll only have to follow the incentives.

(Assuming they don’t lead us like cows to the slaughterhouse, that is.)

Check your bank balance

Axios reports that customer accounts at major US banks have been infiltrated by “unauthorized third-party AI agents” — some of which are going rogue.

This seems like a fixable problem. Surely banks can just block bots from their websites?

(Or, as we discussed yesterday, scan their customers’ irises.)

Nevertheless, bank executives describe the situation as “horrifying.” They told Axios they’re making contingency plans for a worst-case “day after” scenario in which they would need to “quickly secure or restore customer access.” 

Right. But what if the entire internet goes down? We might have to start thinking about it. It’s been a no-good, very bad cybersecurity week, and people are contemplating the worst.

“Read this website while you still can,” The Atlantic advised. “The internet could be on the verge of a total meltdown.”

I don’t know how seriously to take these warnings because I don’t really understand how the internet that I’m so entirely dependent on actually works. Which is a reminder that we've been living in a “placid sea of ignorance,” as the sci-fi writer HP Lovecraft put it.

For most of us, the world just works, however little we understand it.

Until it doesn’t? 

“The sciences, each straining in its own direction, have hitherto harmed us little,” Lovecraft adds, “but some day the piecing together of dissociated knowledge will open up such terrifying vistas of reality, and of our frightful position therein, that we shall either go mad from the revelation or flee from the light into the peace and safety of a new dark age.”

Harari’s cow option is sounding better and better.

A crypto-sleuth heroine

Wired tells the feature film-worthy story of Lili Infante, a DEA agent who pioneered ways of disrupting the market for drugs on the dark web — only to find out that her beloved grandmother was herself dealing drugs on the dark web.

There are a lot of entertaining details along the way.

I did not know, for example, that the DEA allows its agents to launder money on behalf of drug cartels in order to “understand the narco traffickers’ financial pathways.” Or that informants receive a cut of whatever assets the DEA seizes as a result of their information — often as much as 20%.

(Note: The informants are themselves typically drug dealers or money launderers.)

Infante is the hero of the story and her journey begins with an epiphany about crypto.

This sent her down a rabbit hole of learning how both crypto and the dark web worked, which led her to another epiphany: There was an entire illicit drug trade operating right under the nose of the DEA, right there in Miami.

She resolved to do something about it.

“Challenge coins” are given to agents in recognition of extraordinary achievements. (At a bar, if another agent challenges you to produce a coin and you do, they have to buy you a drink.)

Wired does not specify, but Infante must have earned several for her groundbreaking investigations into crypto money laundering and dark web drug dealing.

The story of how she did it is custom-made for Hollywood — she even has the movie star looks to play herself.  

But the screenwriter will have to come up with a happier ending.

First, Infante divorces her husband, also a DEA agent, after she sees on his phone — which she’s using while in pursuit of a drug dealer — that he’s been having an affair.

Then she learns that the grandmother who raised her, Nina, had turned to drug dealing — at the age of 72 — to help a nephew pay off a debt owed to the Russian mafia. 

Finally, we learn that Jose Irizarry, the mentor at the DEA who taught Infante how criminals launder money, was himself a money-laundering criminal:

Irizarry was caught and convicted, fortunately. But he was also unrepentant. “The drug war’s a game,” he told a journalist. “A very fun game that we were playing.”

Infante has quit the game. At the age of just 32, she resigned from the DEA, in part because Irizarry’s prosecution blew the cover she used to infiltrate the Miami drug trade.

She’s still doing her bit, though. Infante is now the founder of a software company that helps law enforcement seize and control crypto assets from criminals.

— Byron Gilliam

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