This Machine Kills

We go from talking about how AI/ML research is dominated by the resources, interests, and tradeoffs of “top labs.” Then discuss how our algorithmic agents become active participants in human culture but in ways that can be unexpected and unknowable. Together these conditions are producing a world that is far more weird, bizarre and unsettling than anybody intended. Less George Orwell, more Phillip K. Dick. Some stuff we reference: ••• I don't really trust papers out of "Top Labs" anymore | https://www.reddit.com/r/MachineLearning/comments/uyratt/d_i_dont_really_trust_papers_out_of_top_labs/ ••• The Steep Cost of Capture | Meredith Whittaker https://interactions.acm.org/archive/view/november-december-2021/the-steep-cost-of-capture ••• AI Inventing Its Own Culture, Passing It On to Humans, Sociologists Find | Edward Ongweso Jr | https://www.vice.com/en/article/pkp7y7/human-culture-to-increasingly-come-from-unexplainable-ai-sociologists-find Subscribe to hear more analysis and commentary in our premium episodes every week! patreon.com/thismachinekills Grab fresh new TMK gear: bonfire.com/store/this-machine-kills-podcast/ Hosted by Jathan Sadowski (twitter.com/jathansadowski) and Edward Ongweso Jr. (twitter.com/bigblackjacobin). Production / Music by Jereme Brown (twitter.com/braunestahl)

We are joined by Bennett Tomlin and Cas Piancey, hosts of the great podcast Crypto Critics’ Corner, for a deeper dive into stablecoins—a cornerstone // time bomb of the crypto financial system. They explain how stablecoins, and specifically Tether, have become systemically important to the workings of the system and the wealth of big players, creating too big to fail institutions that continue growing despite their practices, performance, and people being anything but stable. Listen to Crypto Critics’ Corner: https://twitter.com/CryptoCriticPod Follow Bennett Tomlin: https://twitter.com/BennettTomlin Follow Cas Piancey: https://twitter.com/CasPiancey Subscribe to hear more analysis and commentary in our premium episodes every week! patreon.com/thismachinekills Grab fresh new TMK gear: bonfire.com/store/this-machine-kills-podcast/ Hosted by Jathan Sadowski (twitter.com/jathansadowski) and Edward Ongweso Jr. (twitter.com/bigblackjacobin). Production / Music by Jereme Brown (twitter.com/braunestahl)

We dive into chapter 9 – Hiding in Plain Sight – of The Dawn of Everything by Graeber and Wengrow. We discuss the utopian experiment of Teotihuacan in Mesoamerica 2000 years ago: a city that revolted against authoritarian rule and instituted a socialist system, complete with universal housing and democratic governance, which lasted for hundreds of years. Subscribe to hear more analysis and commentary in our premium episodes every week! patreon.com/thismachinekills Grab fresh new TMK gear: bonfire.com/store/this-machine-kills-podcast/ Hosted by Jathan Sadowski (twitter.com/jathansadowski) and Edward Ongweso Jr. (twitter.com/bigblackjacobin). Production / Music by Jereme Brown (twitter.com/braunestahl)

(While Jereme works to overcome a technical problem from our last record, we are unlocking an episode.) We continue our discussion of Hilary Allen’s paper on DeFi and shadow banking and dive into her comparative analysis between Wall Street and Silicon Valley. We see how there are direct analogues between the kind of financial innovations and systemic fragilities that led to the 2008 crash and the crisis dynamics of DeFi: overleveraging and crypto tokens; rigidity and smart contracts; bank runs and stablecoins. Allen then argues that the best approach is not to legitimize DeFi through regulation, but to erect a firewall that prevents it from integrating with the mainstream economy and financial sector. Some stuff we reference: ••• DeFI: Shadow Banking 2.0 | Hilary J. Allen https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4038788 ••• Is Crypto Re-Creating the 2008 Financial Crisis? | Charlie Warzel, Hilary Allen https://newsletters.theatlantic.com/galaxy-brain/624cb2ebdc551a00208c1524/crypto-bubble-web3-decentralized-finance/ ••• Defi and Shadow Banking 2.0: Leverage, rigidity and bank runs | Cory Doctorow https://doctorow.medium.com/defi-and-shadow-banking-2-0-7bae9d1d308e Subscribe to hear more analysis and commentary in our premium episodes every week! patreon.com/thismachinekills Grab fresh new TMK gear: bonfire.com/store/this-machine-kills-podcast/ Hosted by Jathan Sadowski (twitter.com/jathansadowski) and Edward Ongweso Jr. (twitter.com/bigblackjacobin). Production / Music by Jereme Brown (twitter.com/braunestahl)

(Sorry for the delay!) We comb through Andreessen Horowitz’s inaugural 2022 State of Crypto Report, devoting more time and attention to discussing its claims and framing than it should warrant. But considering the outsized influence a16z has here, they force us to take seriously even their most inane fever dreams. In the process of reviewing the report, we receive a masterclass in how to lie with graphs and numbers. Some stuff we reference: ••• Introducing the 2022 State of Crypto Report | a16z https://a16zcrypto.com/state-of-crypto-report-a16z-2022/ ••• The 2022 State of Crypto Report | a16z https://a16z.com/wp-content/uploads/2022/05/state-of-crypto-2022_a16z-crypto.pdf Subscribe to hear more analysis and commentary in our premium episodes every week! patreon.com/thismachinekills Grab fresh new TMK gear: bonfire.com/store/this-machine-kills-podcast/ Hosted by Jathan Sadowski (twitter.com/jathansadowski) and Edward Ongweso Jr. (twitter.com/bigblackjacobin). Production / Music by Jereme Brown (twitter.com/braunestahl)

We check in on our old friend / enemy / mentor, Masayoshi Son, and see how the SoftBank Vision Fund has been faring over the last year. The Masa multiplier effect is his ability to amplify the state of the larger tech sector. When it’s good, it’s really good. But when it’s really bad—in the way tech sector valuations have been dropping this year—oh boy, it’s enough to make you want to [redacted]. Fortunately, nobody has a stronger stomach for loss than Masa. Some stuff we reference: ••• Tech bubbles are bursting all over the place | The Economist https://www.economist.com/business/2022/05/14/tech-bubbles-are-bursting-all-over-the-place ••• After a bruising year, SoftBank braces for more pain | The Economist https://www.economist.com/business/2022/05/16/after-a-bruising-year-softbank-braces-for-more-pain Subscribe to hear more analysis and commentary in our premium episodes every week! patreon.com/thismachinekills Grab fresh new TMK gear: bonfire.com/store/this-machine-kills-podcast/ Hosted by Jathan Sadowski (twitter.com/jathansadowski) and Edward Ongweso Jr. (twitter.com/bigblackjacobin). Production / Music by Jereme Brown (twitter.com/braunestahl)

We dive into chapter 8 – Imaginary Cities – of The Dawn of Everything by Graeber and Wengrow. We talk about the origins of cities and contradict the commonly held belief that proto-state governance—e.g. centralized, hierarchical administration—developed in tandem with urban society. Instead, early cities existed for hundreds of years, organized by bottom-up self-governance, before the palaces and temples became the centers of urban power. Subscribe to hear more analysis and commentary in our premium episodes every week! patreon.com/thismachinekills Grab fresh new TMK gear: bonfire.com/store/this-machine-kills-podcast/ Hosted by Jathan Sadowski (twitter.com/jathansadowski) and Edward Ongweso Jr. (twitter.com/bigblackjacobin). Production / Music by Jereme Brown (twitter.com/braunestahl)

We review China’s hard, fast, and big regulatory responses to big tech’s rising power over the last year, discuss the vastly different political theories motivating tech policy in the US, Europe, and China, and look ahead for what’s to come as China unveils a new set of sweeping, world leading regulations for AI decision-making. Some stuff we reference: ••• China’s Tech Crackdown: A Year-in-Review https://www.lawfareblog.com/chinas-tech-crackdown-year-review ••• What Xi Means by ‘Disorderly Capital’ Is $1.5 Trillion Question https://www.bloomberg.com/news/articles/2021-09-09/what-xi-means-by-disorderly-capital-is-1-5-trillion-question?sref=z97LigUM ••• Antitrust in China – 2021 Year in Review https://www.gibsondunn.com/antitrust-in-china-2021-year-in-review/ ••• China Is About to Regulate AI—and the World Is Watching https://www.wired.com/story/china-regulate-ai-world-watching/ Subscribe to hear more analysis and commentary in our premium episodes every week! patreon.com/thismachinekills Grab fresh new TMK gear: bonfire.com/store/this-machine-kills-podcast/ Hosted by Jathan Sadowski (twitter.com/jathansadowski) and Edward Ongweso Jr. (twitter.com/bigblackjacobin). Production / Music by Jereme Brown (twitter.com/braunestahl)

We continue our discussion of Hilary Allen’s paper on DeFi and shadow banking and dive into her comparative analysis between Wall Street and Silicon Valley. We see how there are direct analogues between the kind of financial innovations and systemic fragilities that led to the 2008 crash and the crisis dynamics of DeFi: overleveraging and crypto tokens; rigidity and smart contracts; bank runs and stablecoins. Allen then argues that the best approach is not to legitimize DeFi through regulation, but to erect a firewall that prevents it from integrating with the mainstream economy and financial sector. Some stuff we reference: ••• DeFI: Shadow Banking 2.0 | Hilary J. Allen https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4038788 ••• Is Crypto Re-Creating the 2008 Financial Crisis? | Charlie Warzel, Hilary Allen https://newsletters.theatlantic.com/galaxy-brain/624cb2ebdc551a00208c1524/crypto-bubble-web3-decentralized-finance/ ••• Defi and Shadow Banking 2.0: Leverage, rigidity and bank runs | Cory Doctorow https://doctorow.medium.com/defi-and-shadow-banking-2-0-7bae9d1d308e Subscribe to hear more analysis and commentary in our premium episodes every week! patreon.com/thismachinekills Grab fresh new TMK gear: bonfire.com/store/this-machine-kills-podcast/ Hosted by Jathan Sadowski (twitter.com/jathansadowski) and Edward Ongweso Jr. (twitter.com/bigblackjacobin). Production / Music by Jereme Brown (twitter.com/braunestahl)

We discuss an extremely good paper by law professor Hilary J. Allen – DeFI: Shadow Banking 2.0 – which lays out a very clear, critical, and comparative analysis of the unregulated financial instruments that led to the 2008 global financial crash and their systemic similarities to the unregulated financial innovations that are emerging in DeFi / Web3. In this first part, we lay out the causes of the 2008 crash, explaining specific instruments and dynamics that caused this hyper-complex fragile system to collapse. In part two, on the patreon later this week, we explain how DeFi is already unfolding in ways that are best described as: “It is happening again.” Some stuff we reference: ••• DeFI: Shadow Banking 2.0 | Hilary J. Allen https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4038788 ••• Is Crypto Re-Creating the 2008 Financial Crisis? | Charlie Warzel, Hilary Allen https://newsletters.theatlantic.com/galaxy-brain/624cb2ebdc551a00208c1524/crypto-bubble-web3-decentralized-finance/ ••• Defi and Shadow Banking 2.0: Leverage, rigidity and bank runs | Cory Doctorow https://doctorow.medium.com/defi-and-shadow-banking-2-0-7bae9d1d308e Subscribe to hear more analysis and commentary in our premium episodes every week! patreon.com/thismachinekills Grab fresh new TMK gear: bonfire.com/store/this-machine-kills-podcast/ Hosted by Jathan Sadowski (twitter.com/jathansadowski) and Edward Ongweso Jr. (twitter.com/bigblackjacobin). Production / Music by Jereme Brown (twitter.com/braunestahl)