Millions of years ago, our chimpanzee ancestors sacrificed the left side of their brain.
They lost a tremendous amount of short-term memory space. But in return they got the power of speech.
This cognitive trade-off was put forward in a seminal essay by George A Miller of Harvard University in 1956.
It was called: ‘The Magical Number Seven, Plus or Minus Two: Some Limits on Our Capacity for Processing Information.’
Miller had worked out that every animal had a limited amount of brain power.
So, every new evolutionary skill — such as speech — had a cost somewhere else in the brain.
Decades of studies have shown that chimpanzees still retain much greater short-term memory ability than humans.
(Aside from some people with brain disabilities, such as Dustin Hoffman’s character in the film Rain Man.)
But, as it turned out, the ability to communicate better ended up being a pretty good deal for mankind.
The unbelievable amount of data now at our fingertips
This new power of coordination allowed complex group decision-making through speech and was vital for our rise to the top of the food tree.
We developed traditions of storytelling, to pass down the most important pieces of wisdom through the generations, ensuring our progress continued through ever-increasing knowledge.
These days we use technology.
And that, perhaps, is a growing problem…
You see, we live in a world chock-full of information. But we haven’t yet developed sufficient techniques to deal with the unbelievable amount of data now at our fingertips.
Not all information is good either. Some is fake news, some is propaganda, and some is too complex for us to comprehend.
So, we look for easy hacks to make quick judgements on things.
The Nobel Prize winning psychologists Amos Tversky and Daniel Kahneman call these hacks, heuristics.
They’re quick and dirty shortcuts we use to process new information and make faster decisions.
Heuristics are good for life or death decisions such as ‘is that animal dangerous’, but not so good for understanding the causes of the current bushfires.
Unfortunately, what worked well in simpler times is less likely to work as well in this more complex age.
We need to develop new frameworks to make complex decisions as a society.
Which leads us to the next frontier of decision-making…
What if we let artificial intelligence (AI) call the shots?
What if, in the future, we outsource our decision-making to computers?
This isn’t as far-fetched an idea as you might first think.
After all, you already outsource a lot of your memory function to computers.
Think about it…
You don’t remember people’s phone numbers anymore; they’re all stored on your smartphone.
You might keep an online diary to organise your work day rather than trying to remember everything.
You probably look up a lot of things you might once have tried to memorise.
Whether that’s investing in a stock, finding a new recipe for dinner, or deciding who to date, technology is part of your process.
The fact is, you don’t think twice about using the fantastic memory power of computers to store your information, rather than rely on the less efficient grey matter between your ears.
Like it or not, you’re already part machine!
The next step is obvious…
To give your machines the power to make certain decisions for you too.
This works on an individual level, but also at a wider level too.
Would you trust an AI-powered computer over a politician for instance? Perhaps, not such a crazy notion…
Now, some people dismiss AI as a sci-fi fantasy.
But the fact is we’re fast moving to a future where we’re taking the power of decision-making out of human hands.
It’s already happening.
Self-driving cars are one visible example.
Most think of self-driving cars as just doing the necessary calculations to drive safely. A mechanical operation of complex maths.
But it’s much more than that…
Imagine for example, there’s an accident, your tyre blows at speed, and your self-driving car has to make a decision.
It can decide to drive into a lamp post and probably kill you…or alternatively to mow down a group of pedestrians on the pathway.
How would an AI decide this?
Would it change its decision if the pedestrians were kids?
What would you do?
There are no easy answers to this.
Just like there are no easy answers to many questions in life. But what we’re increasingly finding is that machines can make smarter decisions than us.
Big business is taking note of AI
Hacker Noon reported recently:
‘The introduction of AI by 2030 will boost worldwide GDP by 14%, or approximately $15.7 trillion, according to PwC. They note that this is more than the current total industrial output of China and India combined.
‘According to the results of a study by Teradata, the vast majority of large companies (80%) are investing in artificial intelligence technologies, and according to forecasts from Gartner, by 2020 they will be present in almost all new software products and services.’
The investing industry is an early user of such technologies.
Sophisticated algorithms that ‘learn’ by themselves already manage billions of dollars. And venture capitalists are using AI to sort through start-up opportunities.
Medical research, military use, software creation, logistics, and even the legal industry are all huge areas for AI decision-making in the future.
This throws up some deep questions for humanity.
After all, if we haven’t got control over our memories, and we no longer make decisions, what even are we?
Will the liberation of such concepts free up our brains to pick up new capabilities? Capabilities as big as the move to speech was millions of years ago?
Do we become gods?
Is that the big twist?
We exist for a blink of an eye in order to create something better, then fade into the myths of time?
A scary thought perhaps…
But it seems to be the world that’s coming.
This much is clear…
AI could be the most important exponential trend in the world right now. Both for you as an investor, and for you as a human.
It’s not some sci-fi wet dream. It’s a coming reality.
Pay close attention…
Editor, Money Morning
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