AI entrepreneur–philosopher on how the free market consolidates individuals' knowledge into something bigger and better
Red ants working together. Image by Timon Cornelissen
Brendan McCord—past research affiliate with Stanford Institute for Human-Centered AI, and successful tech CEO—discusses economist Hayek's idea that the marketplace elegantly assembles human knowledge to make more efficient, developed, and truthful civilizations. From the University of Austin.
Three years ago, I had my second of two kids, and I sold two AI companies. And at that moment, I tried to think about what I believed in, what I wanted to model for those little humans, and how I would spend the rest of my career.
This put me into a kind of philosophical search, the perennial search, and so I started with the ancients. I moved to the Enlightenment project, the American founding, modern debates, and this book in particular—Constitution of Liberty [by Friedrich Hayek]—is a is a really good synthesis and forward look on what it takes to maintain a free society and how we drive broad prosperity. (0:46–1:26)
He makes the case in this book that liberty is important because of its consequence … justice, for him, is about the unknown person being able to attain his or her arbitrary ends. … And he thinks that by increasing the ability for people to attain those ends, that we've made progress … And so, this is why so much of his thinking centers on the use of knowledge in society and the generation of knowledge in society …
Liberty for him is a minimization of coercion. So he basically wants you to act independently, not be the instrument of another. He doesn't want others, particularly the government, to be able to put choices before you that mean that even when you do the lesser of two evils, you're still the agent of another. (3:38–5:49)
If you're an individual, then the knowledge that you can use is [in your brain]. But if you're in a civilization, if you're in a broader society, you're constantly using knowledge that you don't possess. … [Hayek] brings up this mathematician Alfred North Whitehead, who has this great quote, stuck with me, about what civilizational progress even is … the ability to perform important operations of thought without thinking about them. So if we can do things without thinking about them because we're utilizing the knowledge of others or we're utilizing technology that outsources what we would have otherwise had to think of, then that's very valuable. (7:39–8:49)
Another way to say this that Hayek frequently comes back to is that knowledge is [largely] dispersed and local. You each have a perception of your own abilities, of your own interests, of your own level of hunger, all these things that are fundamentally not aggregable. I can't know those things. No central planner ever could. But they're really, really important. …
The way Hayek thinks that I can benefit from [this] is if we have a kind of coordination mechanism—an impersonal coordination mechanism, that allows you to use your knowledge—you to use your knowledge, you to use your knowledge in a way that washes over all of us. And he says that the market is one of the ways in which we do that. …
It's the case because when we act in an economic situation, we are … constantly trying to attain our ends. We're picturing ends and attaining them, and then we're finding little bits of collision because we can't all have all the things we want … and so then we have to kind of mutually co-adapt to one another. … So acting in the world gives us a way to transmit knowledge, and it gives us a way to equilibrate our plans. (9:27–11:55)
So he talks about the … marketplace of ideas as being a way to move towards truth, but only if you have wide access to diverse and competing views … (12:53–13:10)
Throughout his work is the idea of a spontaneous order. So he quotes Adam Ferguson, who's one of the early Scottish Enlightenment thinkers, who says that civilization is the product of men's action but not our design.
You could think of an ant hill being this way, too. There's not an ant that has a vision of an ant hill. That just doesn't exist in the mind of an ant. Yet, they create this elaborate ant hill … How do they do it? Well, they act in a way that builds this thing up, and a higher level order emerges from their actions but not from their design.
So Hayek thinks that as our intellect pictures something that we go do, it then interacts with culture and tradition and society around us, the actions of others, to produce something that's different than what we thought it would produce. And then those things kind of interact and produce a higher level order.
He then thinks that thing morphs over time, what that higher level order is, and he thinks that's how some of the best institutions evolve. When I say best, I mean the most knowledge bearing. Things like the common law, which you can think of as a Scrabble board building up over time and evolving to address problems that people encounter …
So, last thing I'll say is that in ancient Greek, there were two words for order: taxis, which is where you get taxonomy [from]. It's the top-down order. And then cosmos, which is the evolutionary, adaptive, more organismic order that you see in language and the common law and things like that. And this was a big part of why I named the organization Cosmos … to think about the possibility of bottom-up solutions in society and so forth. (13:32–15:26)
Watch the whole thing here.
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