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Review: Big Tech Is Sowing The Seeds Of Its Own Destruction


George Gilder is the archetypal disruptive futurist author. Unlike many a denizen of Silicon Valley, Gilder is a theist who possesses a teleological view of knowledge and power, championing the idea that the all is not directionless, but is headed somewhere ultimately meaningful. As such, he’s been a noted proponent of intelligent design.

In his long and influential career (he’s 78), Gilder has always been a writer given to aphorism and oracular pronouncement. Sometimes these nuggets are profound and suggestive. They make you feel smart, like Neo about to control the Matrix, just by reading them. But sometimes they leave a reader befuddled as to what the heck Gilder might even be talking about, much less whether it is true or not.

Nevertheless, in previous works Gilder has found a way to weave his insights and maxims together into powerful and coherent arguments. This is most evident in his famous book, “Wealth and Poverty” (1981), where he argued for the then-new idea of supply side economics, and advanced a moral case for capitalism.

For an updated take on Gilder’s wonderful, Zeitgeist-contrarian conception of money, politics, knowledge, and power, check out “Knowledge and Power” (2013) and “The Scandal of Money” (2016). In these, and in his new book “Life After Google:The Fall of Big Data and the Rise of the Blockchain Economy,” Gilder adroitly incorporates his theistic, techno-triumphalist take on the universe.

The Great Unravelling

Perhaps because he is attempting to pull together a thesis from observations made on the messy edge of technological innovation, “Life After Google,” feels a bit more scattershot than what has come before. Some chapters are excursions into the weeds that don’t contribute much to the overall direction of the book beyond serving as ding-dongs of the bell of doom that Gilder is ringing for our Google and Facebook dominated information culture.

Yet in the end, Gilder makes a compelling case that the information revolution is moving into an age of decentralization and greater freedom both for entrepreneurs and for those of us who just want to use information technology to make our jobs and lives easier or better. In Gilderian oracular fashion, he calls this process “The Great Unravelling.”

The problem with the internet is that it was born without much of an immune system. According to Gilder, this is because the information revolution has been going through a difficult adolescent stage embodied in Google and the other net giants. Like many smart teenagers, Google thinks it knows everything (or, to be kind, its engineers aspire for their system to know everything, and think they are getting mighty close). It may seem at times that it does.

That is not only an illusion, says Gilder, it is an illusion that companies such as Google, Facebook, and Amazon (to an extent) have bought into to the point of no return. It is already proving to be their undoing. The process has begun and is accelerating.

Google’s philosophy, says Gilder, is to conglomerate everything into itself in a huge database representation of the known universe, and then to perform operations, such as search and often more insidious data rifling, on that big lump of everything it controls.

As Gilder points out, the attempt was doomed from the start. In fact, we’ve had proof it would be since 1930. In the actual discipline of philosophy, as opposed to the Silicon Valley version, Bertrand Russell and Alfred North Whitehead attempted to derive the entirety of logic and mathematical knowledge from a set of self-consistent propositions back in the 1910s in their enormous work “Principia Mathematica.”

The Halting Problem

Then along came Kurt Gödel. The Austrian mathematician (who later became an American) blew it to pieces. Gödel proved in empathic fashion that no mathematical-logical system can ever be built from a finite set of premises or be derived from only those principles. It is necessary that every logical system contain premises from outside the system. Induction, and the informed intuition that produces it, are as necessary as deduction.

Gödel’s proof of this truth—and Gödel showed it is true in every case—eventually sent Russell into despair. Whitehead got over it, and zoomed off into other realms, such as process philosophy. The Principia Mathematica became a historical curiosity.

In 1936, Gödel’s First Incompleteness Theorem got mathematician Alan Turing thinking about the universal computing architecture he was in the process of discovering. Computer programs were just as susceptible to incompleteness and unpredictable outcomes when, in the course of computation, they refer back to themselves. This is called the Halting Problem.

Google’s worldview is built on the philosophical certainty that algorithms, the “if-then” logical elements of computer programming, are supreme. Algorithms are made of numbers and logic. Gödel proved you cannot in principle build a self-contained system of logic and math. There is always a system encompassing your system and a system outside your system that necessarily impinges on the basic rules of your system. We usually call this state of things the real world.

Encrypted by Biology

The real world is much more like language than math, but analogies fail and it is really just like itself. The real world is creative, and this creativity is not random. It cannot be wholly described by either algorithms or statistics. At least the real world outside of Palo Alto, California cannot. Out here in flyover country, the world is full of meaning as well as information.

Modern cryptography is built on the idea of a subset of computations that are not reversible. Algorithms are reversible. But for cryptographic “hash,” you have to invent or discover a separate algorithm, totally unrelated to the first, to get back to your original conditions. Usually it’s impossible, or highly improbable within the lifespan of the universe. For those with a philosophy bounded by logical operands alone, such results may look like the product of random choices. But they aren’t.

That’s the essence of the mathematical model behind [Google’s] search engine. You are a random function of Google. But you are not random; you are a unique genetic entity that cannot be factored back into an egg and a sperm. You are unbreakably encrypted by biology.

According to Gilder, The World According to Google is about to be disrupted:

Google and its world are looking in the wrong direction. They are actually in jeopardy, not from an all-powerful artificial intelligence, but from a distributed, peer-to-peer revolution supporting human intelligence—the blockchain and new crypto-efflorescence.

Gilder calls this brave new world the “cryptocosm.”

Blockchain vs. The Behemoths

This unraveling might seem unlikely on the face of it. In The Dalles, Oregon, Google has built an enormous server farm powered by a hydroelectric dam and water cooled. Amazon and other cloud providers have built similar behemoths. Like old steel towns such as Pittsburgh and Birmingham that grew up in places where iron ore, coal , and water were found, these “Siren Servers,” as Gilder terms them (because they seem to draw all data to them like Rhine bargemen to the Lorelei), are often located at a cheap, near-inexhaustible power source such as a hydroelectric dam, and near a remote water supply for cooling a vast amount of waste heat.

These Sirens have the role the middleman in their information dealing. They are enormous warehouses and counting houses for data. But the basic strength of the cryptocosm is that it gets rid of the middleman. It does this by a special application of the cryptographic technique called the blockchain. A blockchain is an encrypted history of data or events, such as a record of transactions. It can’t be hacked or altered in principle. The most famous application is bitcoin, that attempt to create the techno equivalent of the Gold Standard.

Gilder has ambivalent feelings about the ultimate utility of bitcoin. He does, however, go on at length concerning “Satoshi Nakamoto,” the pseudonymous architect of bitcoin, whose ultimate identity is a point of endless contention among the bitcoin-smitten, and of perhaps lesser interest to a reader struggling to get his or her hands on the more immediately graspable versions of money. Whatever his doubts about bitcoin, Gilder is convinced that a new day has arrived for the information economy as a whole with blockchain technology.

Blockchains, hashchains, blockstacks, smart contracts, token issues, and cryptocurrencies are new ways to address the evils of the Google Age: porous Internet security, unmoored money, regulatory overreach, network concentration, officious delays, and diminishing returns of big data. All of these problems derive from the hypertrophy of trusted third parties that need to be collapsed into simpler systems controlled by individual agents closer to the actual point of service.

Gilder cites a broad array of startups and baby companies that are blockchain-based. One of these is Goblin, which touts itself as “AirBnB for computers,” with its idea to harness the unused calculating power of computers distributed throughout the world with instant agreements between buyer and seller negotiated, produced, and enforced by “smart contracts” based on blockchain encryption. If this or similar schemes prove out, Amazon and Google’s immensely lucrative cloud servers might become obsolete within a few years. Or a few months.

Ideologies, Indulgences, Entitlements, and Biases

One of the principle uses for bitcoin and other blockchain currencies (other than Tulip-Bubble-like speculation and buying drugs on the Dark Web) has been to skirt the Sarbanes-Oxley law that has nearly killed off initial public offerings for small tech companies in the last decade and to seek funding via initial coin offerings, ICOs.

Gilder is aware that government will not be able to resist regulating and taxing such trading, but claims that blockchain transactions by their very nature—no middleman, no government-fiat money changing hands—are difficult to capture.

Gilder’s golden boy in this regard is Vitalik Buterin, founder of Etherium, and creator of its blockchain currency, the “ether.” Born in 1994, Buterin has taken his place among the entrepreneur prodigies of our age. Buterin got his break in 2013 when he was chosen as one of the recipients of a Thiel Fellowship, the “anti-Rhodes Scholarships” offered by legendary venture capitalist Peter Thiel for bright kids under twenty to escape the drive-killing nonsense of the academic credentialing industry. In 2014, Ethereum was founded, Buterin created a fully formed computer language for creating blockchain tech, and the first ether was issued. It has since become a major alternative to bitcoin itself.

Gilder, a long-time Thiel crony, is personally involved as an investor in the 1517 venture firm which invests in Thiel Fellow startups, as well as those by other high school and college-aged company founders. Gilder spends a portion of the book shamelessly trumpeting the accomplishments of his 1517 companies and their youthful founders, but it is his deep involvement with this cutting edge of entrepreneurs that lends authenticity to his claim that the cryptocosm, and the distributed, peer-to-peer internet it makes possible, is in the midst of being born.

Google and the other Siren’s days are numbered. They will have to compete, but will likely not be able to overcome their centralizing mindsets derived from elite university culture, which Gilder adroitly characterizes in the book.

Focusing on stopping progress, barring new power plants, dismantling chemical facilities, mobilizing against Israel, and other reactionary pursuits, Ivy institutions are pursuing the fancies of a declining intellectual and business elite, full of chemophobic nags and luddite lame-ducks quacking away on their miasmic pools of old money as the world whirls past them.

Google’s soft-socialist philosophy that everything should be free as long as Google controls everything and sees to its just distribution is redolent of the universities in which so many of its founders and employees were educated: “Google’s system of the world reverberates with the ideologies, indulgences, entitlements, and biases of the academy,” says Gilder.

And it’s all coming down, sooner rather than later, because the nature of the internet and the information economy is about to undergo a transformative change.

Google, perhaps the world’s leading technology company, should know this better than anyone. But the mythology suffusing the Google system of the world is now a serious threat to Google itself as a technology leader. In the evolving technological economy, shaped by cryptographic innovations, Google is going to have to compete again. Preening over its avoidance of evil, its free goods, and its clout in Washington will do no good. It is going to confront a new world where its center will not hold.

And even at 78, George Gilder is convinced that he’ll be around to see that future happen.

Correction: Gilder is an early investor in 1517, not a founder.