The Robot in the Market Machine

News reports from yesterday’s sharp drop of the Dow point to the role of computer algorithms that sell stocks when they reach a certain point as one of the main sources of the drop.  This explanation would appear to be the logically absurd conclusion of a so-called free market economy.  Defenders of a free market economy maintain that the market can best distribute goods at the right prices when human beings each act for their own self-interest.  Will Roberts makes the case that this surrender of human decision-making to the market is why Marx argues that capitalism does not cultivate freedom.  In a market economy, human beings no longer deliberate collectively about what is best.  They each act for themselves and the market decides.  They lose the collective work of speaking together about how to direct the community.

As Roberts concludes his account of the political conception of freedom he finds in Marx:

I think Marx’s concern about the anarchy and incontinence of the market can be summed up neatly by saying that commercial society leaves us unfree because it renders us systematically irresponsible for our economic life.  It is this systematic irresponsibility that Marx pinpoints when he treats individuals as the personifications of economic relations.

Enter the robots.  Stock markets are supposed to measure the confidence people have in corporate America and therefore dictate whether interest rates should be raised or lowered and other fiscal policy.  But then, people make algorithms that determine when to sell on the market.  At this point, markets do not only foreclose our capacity to determine what should be done, but they foreclose even the human capacity to make decisions on the market.  It is not just that we are not deliberating together about what the collective should do, we are not even deliberating about our own self-interest–we are not even making our own judgments.  The robots are determining the economic decisions of the community, compounding the extent to which we are made systematically irresponsible for our economic life.

This is a perfect encapsulation of how the market always was functioning as an of automaton that could sort out what was best for human beings.  It was the machine that could best function without human interference.  The human judgment was replaced by computer algorithms in order to get more precise indicators of when to sell.  At the point, the automaton of the market is run not out of shared human judgment but by computers who have no concern for human beings and who were capable of making decisions that counteracted the best interests of the humans using them.  Just like the market!