Mises Wire

Facebook icon
LinkedIn icon
Twitter icon
Home | Wire | Algorithms Are Fine — Until Governments Use Them Against Us

Algorithms Are Fine — Until Governments Use Them Against Us

  • bigdata.PNG

Tags Philosophy and Methodology

If you’re a frequent user of social media platforms you’ve probably noticed something akin to being watched or even monitored. Suddenly, an advertisement appears for a product you might have reviewed on Amazon or eBay. A series of videos appears to the right of your YouTube page relating to something you’ve watched days earlier. Facebook only shows you news feeds for posts you may have interacted with and ignores all of your other friends. The examples go on and on.

The answer lays in algorithms. These are logical mathematic equations which are designed to produce a certain outcome. A simple example would be if A>B and B>C then A>C. Putting it another way, if John prefers bananas to oranges and oranges to apples, then John prefers bananas to apples. But, does he always?

Positivism in Economics

In the study of economics, the Chicago school, Harvard, and MIT have long been advocates of what is known as economic positivism. This mathematical model-based theory of economics relies on certain normative and also certain positive assumptions. If an anomaly doesn’t fit the normative assumption, it is simply ignored. The economist continues ignoring certain “outliers” and comes to some definitive conclusion. These conclusions are then implemented as public policy by the state or banking institutions, like the Federal Reserve. Not unlike the algorithms used by social media, economic positivism is almost entirely mathematically based and relies heavily on “all things being equal” or better put, “all things being quantifiable.”

Just like in our above example, how can an economist quantify John’s taste in fruit? In proper economic terms, how can an economist quantify a utility? That is, how can an economist assign a numerical value to someone’s satisfaction or preferences? But, that is what the mainstream has been doing for over 100 years.

By making certain “one size fits all” assumptions, mainstream economics has been treating consumers as herd animals. This “feed at the trough” mentality ignores the individual in the vastness of the market. They do so because our myriad of different preferences and choices are not quantifiable. It would be an impossible task to mathematically reduce all of our choices and preferences to a simple equation. But, by dismissing individuality, mainstream economics can positively determine the success or failure of public policy decisions. Ergo, we end up with housing bubbles, bond market bubbles, college loan bubbles, stock market bubbles, and on and on.

Back to Algorithms

So what does economic positivism have to do with Facebook? Similarly, these algorithms reduce a social media user’s preferences to something quantifiable, determinant and predictable. Did you really want to read that post? What about the hundreds of others that were kept from you?

Matt Stoller of the Open Market Institute says that these algorithms are harmful and can lead people to make bad choices. They expose a reader or YouTube viewer to content they wouldn’t have otherwise been looking for. YouTube is notorious for putting related videos in a column on the right of the page. Some making even more outlandish claims than the one you’re currently watching. Suddenly, a viewer finds themselves down a very deep rabbit hole that they had no intention to follow.

Moreover, these social media algorithms attempt to assess a user as a predefined type such as conspiracy theorists, sports fanatics, pop culture sycophants, and more. This user will see content that will steer them down a predetermined road. With each mouse click, the user is unwittingly being categorized in a specific subset of society. According to Matt Stoller, this limited exposure to content can only be harmful to society as a whole.

Algorithms and AI

Artificial intelligence is also an algorithmic-based science. Just as was previously stated, these algorithms rely on certain axiomatic human behavior and responses to different situations. Albeit, always predictable and determinant.

The big commercial search engines are heavily dependent on AI to reveal your search results. The data gathered on each of us by Google, Microsoft, and Yahoo is being used to determine your likes and dislikes, what interests you have or not and ordered accordingly. It’s the content that is kept from you that determines the type of internet user you’ll become. Your internet activity is predetermined and you don’t even know it. We are being shoe-horned into specific sets and subsets of people by algorithmic AI on the internet.

Automated services are heavily reliant on these algorithms. Your favorite Starbucks coffee will be dispensed by an AI device. How you like your Big Mac, pizza, and a myriad of other consumer services are already transitioning to AI-controlled processes. A technocratic revolution has begun under our very noses and we didn’t notice. Most of these are positive and lead to a convenient and enjoyable consumer experience. But that is just the beginning.


So, what is wrong with algorithms? In of themselves, they can be a useful tool. But, when they are used to arrange society into specific sets and subsets of people groups and attempt to determine outcomes, then we run into problems. When algorithms are depended on to make laws, perform medical diagnoses and recommendations, determine our allowed energy consumption, what we eat, our career choices, if we marry or have children or any other personal decision, then they have become our masters. These examples are being discussed today by the technocrats in government who run our daily lives.

Relying on algorithms to make the correct choice for each individual is a dangerous path. The results will be no different than what econometricians have done to the economy. By reducing humanity to a set of equations, algorithmic AI will create a warped version of society every bit as bad as the artificial economy we live with. Artificial, I believe, will be the new buzz word for the foreseeable future.

Robert McKeown is the author and publisher of of the Blue Collar Economist

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
Image source:
When commenting, please post a concise, civil, and informative comment. Full comment policy here.

Add Comment

Shield icon wire