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United Airlines: “the singularity” in action

Getting beaten up and thrown off the plane by a bunch of goons is simply the United Airlines’ digital version of a long-established banking practice according to Izabella Kaminska at the Financial Times:

“Some might call it “bad public relations”, but we would prefer to call it a sign of things to come for a world increasingly obsessed with technically pure risk-less financial systems…

“But then you have the real economy, which just doesn’t work like that.  Here, to the contrary, pressure to service increasingly flaky “on demand” clients (who don’t like to commit to anything) in a highly competitive environment makes overselling available stock not just an option but a corporate necessity. At least if companies are to stay afloat.”

More than a century ago, banks adopted fractional reserve banking – a practice in which banks loaned out multiples of the amounts of cash they had on deposit.  This worked (most of the time) because (except during crises) only a fraction of depositors would want to withdraw their cash at any time.  United Airlines – along with the other air companies – does essentially the same thing.  They sell more seats than they have because their computer algorithms can calculate how many passengers will fail to show up on the day.  And when too many passengers show up, the company can bribe them to take the next flight.  It is only very rarely that airlines have to resort to physical force to manage demand.  But as algorithms get more sophisticated, this may become a more common practice.

Banking, too, is likely to generate its version of giving depositors a bloody nose as it throws them out of the (digital) doorway.  According to Kaminska:

“Just imagine if we sorted creditor runs out this way: ‘Sorry. You will not be receiving your funds today. Your account was randomly selected by a computer to be the beneficiary of an uncash prize. Non-compliance is not an option. Thank you for your continued custom!’”

Nor is it only banking and air travel that are likely to resort to forcible eviction as a means of balancing supply and demand in the brave new algorithmic world of “the internet of things.”  Consider those smart meters that your government is so keen to install in your house.  Energy experts are already considering schemes that will use smart meters to disconnect the poor in the event of demand outstripping supply.  As Fereidoon Sionshansi at Energy Post reports:

“Malcolm Keay of Oxford Institute for Energy Studies has proposed a scheme where customers must decide in advance if they wish to have a secure supply of electricity at a premium, or if they wish to buy what he calls ‘as available’ electricity when and if it is available at the prevailing price.”

A scheme of this kind is only possible if every grid-connected household and business is plugged into the internet of things via a smart meter.  Non-premium households and small businesses will receive the energy equivalent of a beating from National Grid’s algorithmic goons when there is not enough energy to go around.  In the same way that United Airlines gave no thought to Dr David Dao’s patients when they violently ejected him from their plane, the energy companies will give no thought to why a business or household might need electricity or gas when they disconnect them.

Nor will it stop there of course.  In the event of another – increasingly frequent – Multi-billion-pound flooding event, presumably the insurance companies will simply eject that portion of their policy holders that they cannot afford to pay.  ITC providers will disconnect a proportion of their customers whenever broadband capacity problems arise. In future, companies like Uber and Deliveroo will simply fail to show up when the algorithms calculate that it would be unprofitable to do so.

Put simply, all of those things that we were promised would make life easier will end up making life harder so long as the algorithms that run them prioritise corporations’ bottom lines over real human beings.

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