Is the free market failing us?

I recently listened to the joe rogan podcast with tristan harris and one thing I kept thinking about when they mentioned regulating tech companies, specifically social media companies, was that the free market experiment has succeeded, but failed us as humans in other ways.

A few years back, much like most hardcore hacker news readers, I read a book by Ayn Rand called Atlas Shrugged. This book was an interesting take on how the free market and very little government intervention can spark innovation and push all of humanity forward. It reminded me of the optimism around the internet in the 90s. The thinking went that the internet would usher in an age of enlightenment. You could find answers to all of your questions at the push of a button. Of course what I didn’t see coming was the hijacking of which questions to ask in the first place.

This is where libertarianism and the free market in general break down. When things are free, the free market is undermined. The idea I think with libertarians is that you want to buy the best thing and someone else wants to make the best thing. The gray area here is how do you connect these two people “at scale”? The answer is advertising. It turns out that advertising itself is even more profitable as an industry than actually making high quality things and selling them for a profit. When you combine advertising with a very cheap communication medium, like the internet, you get business models where the incentives are very… different. The incentives are to keep you looking at ads and the media behind those ads longer. So the media is now free, but with the ad interstitials mixed in. In the name of efficiency, which is another free market tenet, advertisers can also target groups of people based on the things they have looked at in the past. More recently this has extended to using machine learning to try and predict what people will want next.

The logical conclusion of this is summed up nicely in the 1999 movie The Matrix, there’s a scene where the protagonist Neo is talking to a more or less sentient A.I. named “The Oracle” inside of a simulated reality.

She says, “Don’t worry about the vase”.

He says, “What vase?” and turns around in his chair to see this vase. As he turns he knocks the vase behind him off of a table with his elbow.

Through machine learning, advertisers can not only try to predict “what you will do”, they can suggest you do a certain thing, thereby “proving” their prediction. That’s the tricky thing about the future, anyone or any thing can change it.

Back to the free market, is it failing us? In a word, no, because we can now buy and sell things at an astonishing rate. Mission accomplished. However the unintended side effect of all of this commerce is that the free market has become so successful that free will has been undermined by a small army of machine learning algorithms trying to predict our next purchase.