I recently read a novel by Herman Melville entitled “The Confidence-Man”. (At least I thought it was a novel when I picked it up, though it mostly seemed like a series of oddball stories. I need to read it again.) In the story, Melville portrays a series of crooks (or just one?), posing as a doctor, a philanthropist, a chemist, a philosopher, a psychologist, investment advisor, etc.
One of Melville’s characters observes that it is almost impossible for an economy to function without mutual trust:
Confidence is an important foundation for all types of business activities. Without it, trade between man and man, between country and country, would be like a clock, standing still.
Unfortunately, evolution favors those who take advantage of others. Fortunately, an equilibrium is reached where only a small percentage of the population consists of sociopaths. Here is Melville:
“Pray, which do you think are more, knaves or fools?”
“Since I’ve met few or none of them, I don’t think I have the skills to answer.”
“I will answer you. Fools are very foolish.”
“Why do you think so?”
“For the same reason I think oats are worth more than horses. Don’t you eat fools like hash and oats?
One character argues that only machines can be trusted:
“Now I am on the way to make some kind of machine to do my job. Machines for me. My cider-mill—does that ever steal my cider? My lawnmower—does that ever make the bed in the morning? My mount—does that ever make me scornful? No: Cider-mill, reaper, corn-husker—all faithfully attend to their business. You’re not interested, either; no board, no fee; yet they do good all their lives; shining examples of virtue being their reward—the only real Christians I know.”
“Oh, love, love, love!”
And he awaits the day when machines will replace all workers:
“That’s why these thousands of new products have been invented—carding machines, horseshoe machines, tunnel boring machines, harvesting machines, apple picking machines, shoemaking machines, sewing machines, shaving machines, sewing machines, dumb waiter machines. , and only the Lord knows what machines; all that heralds the age when that opposing animal, the working or worshiping man, will be buried in the past, the fossilized remains replaced.”
Melville wrote this in 1857, at the dawn of the new industrial economy. In some ways, the issue of “certainty” is more central to today’s economy than it was to the economy of the 1850s, when most Americans were farmers and lived in small communities where people knew each other. The following is from the 2021 paper at psychopathology:
In this regard, it has been proposed to find high levels of psychopathic symptoms in certain professions or professions (eg, businessmen, managers, politicians, investors, salesmen, surgeons, lawyers, telemarketing workers). The reason for this could be that these very factors can increase the activities involved in those jobs or activities and help them succeed (Hare, 2003b; Dutton, 2012; Babiak and Hare, 2019; Fritzon et al. , 2020). . . .
In this regard, Dutton (2012), after using the Levenson Self-Report Psychopathy Scale (LSRP; Levenson et al., 1995) online to 5,400 people and asking about their work, found that, in the United Kingdom, The 10 highest levels of psychopathic symptoms were company CEOs, lawyers, radio or television personalities, salesmen, surgeons, journalists, priests, police officers, chefs and civil servants.
There is a lot of discussion about what AI will or will not be able to do in the future. I see little discussion of how AI will deal with the problem of confidence. Who can you trust more, a person selling herbal remedies, or an AI giving advice on herbal remedies? A human real estate agent, or an AI providing real estate information? Human investment advisor or AI giving investment advice?
If Melville is right, then the biggest advantage AIs will have is that people trust machines more than they trust other people. Remember how Uber solved the problem of taxi regulation. Maybe AIs will solve the principal agent problem.
PS. This is the link in Melville’s novel. Chapter 7 provides a humorous take on effective altruism (especially the section from the bottom of page 53 to page 58.)
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