I used to work at a place where colleagues of mine were replaced, one by one, by algorithms. This was viewed as the inevitable march of progress that all good for-profit corporations undertake. So now we have a hypothesis that the corporation itself could be replaced by an algorithm:
I hypothesize that the management overhead which makes corporations grow sub-linearly is due to the limited information processing capability of individual humans. People at the top do not have local on-the-ground information: how are individual products performing, what are customers’ complaints etc. And the rank-and-file folks on the ground do not have the relevant high-level information: how does what I’m doing translate to the value that the corporation as a whole seeks to maximize? In fact, the the flow of value and information is so complex that employees have pretty much given up on determining that relationship, and know of it only at a macro P&L-center level.
In plainer English:
Corporations can be thought of as information-processing feedback loops. They propose products, introduce them into the marketplace, learn from the performance of the products, and adjust. They do this while trying to maximize some value function, typically profit.
So why can’t they be completely automated? I mean that literally. Could we have software that carries out all those functions?
Vivek Haldar’s question is rhetorical, but it seems clear where his thought-experiment is taking him. (Which I would characterize as the midpoint between OF COURSE NOT, THIS IS MERELY TO PROVOKE and I EAGERLY AWAIT THE COMING OF OUR NEW CORPORATE-ROBOT MASTERS). To be fair, this midpoint is the more reasonable position, YES, IF ONE ACCEPTS CERTAIN PREMISES AND LIMITS WHAT ONE MEANS BY “COMPLETELY AUTOMATED.”
He gives away the game in his somewhat strained example:
A limited version of what I’m describing already exists. High-frequency trading firms are already pure software, mostly beyond human control or comprehension.
Well…yes and no. (And we’ve seen where high-frequency trading gets you, but that’s a story for another day.) Haldar is on steadier ground when he thinks through the implications:
An algorithm will have no such problems with acting on both global as well as fine-grained local information. In fact, I suspect that the more information it gets to act on, the better decisions it will make, making automatic corporations grow super-linearly.
I don’t mean to nitpick; I love the idea and find it fun to think about the ramifications. But for me, the biggest question is: who will program the program? And why does it have to be for-profit only? Can’t we have an Automatic B Corp? Stay on your toes, Little Pickle!
All that algorithiming didn’t stop me from availing myself of their services when it was time to distribute my books. My not-for-profit ghost has always lived in its for-profit machine. Or something. Read more about benefit corporations, or the corporate investor geniuses of Silicon Valley and their views of self-publishing…or just skip all that and read a poem about a guy who threw a spelling bee.