Last Thursday, the stock market took its single biggest one day drop in its history, somewhere slightly over a thousand points, as measured by the Dow Jones Industrial Index.  While the market recovered sixty to seventy percent of that drop before the close Thursday, the financial damage across the world was not inconsiderable.  Did this happen because Greece is still close to a financial meltdown, or because economic indicators were weak?   No… while the leading cause or precipitating factor may have been a typographical error – a trader entered a sell order for $16 BILLION of exchange futures, instead of a mere $16 million, there are a number of other possibilities, but the bottom line [literally] was that, whatever the cause, all the automated and computerized trading engines immediately reacted – and the market plummeted.  Later, the NASDEQ canceled a number of trades, but that was long after the damage had been done.

From the Terminator movies onward, there have been horror stories about computers unleashing doomsday, but the vast majority of these have concerned nuclear and military scenarios – not world economic collapse.  While I don’t fall into the “watch out for those evil computers” camp, I have always been and remained greatly concerned about the growth and uses of so-called “expert systems” – in all areas of society, largely because computers are the perfect servants – they do exactly what their programming tells them to do, even if the result will be disastrous.

For example, Toyota is now having all sorts of problems with runaway acceleration.  When this first occurred, my question was simple enough:  Why didn’t the drivers either shift into neutral or turn off the ignition.  Apparently, it turns out, at least some of them may not have been able to, not quickly, because they had keyless ignition systems.  Yet the automakers are talking about cars that will be not only keyless but also totally electronic, that is, even the shifting will be electronic and not physical/manual.  And if the electronics malfunction, exactly how will a driver be able to quickly “kill” the system?  Let’s think that one over for a bit.

President Obama and the health care reformers want all medical records to be electronically available, both for cost-saving purposes and for ease of access.  The problem with that kind of ease of access is that it also offers greater ease of hacking and tampering, and, I’m sorry, no system that offers the kind of ease the “reformers” are proposing can be made hacker-proof.  The access and security requirements are mutually antithetical. Years ago, Sandra Bullock starred in a movie called “The Net,” and while many of the computer references are outdated and almost laughable, one aspect of the movie was not and remains all too plausibly real.  At least two characters die because their medical records are hacked, and changed.  In addition, national databases are manipulated and identities switched.  Now… the computer experts will say that these sorts of things can be guarded against… and they can be, but will they?  Security costs money, and good security costs a lot of money, and people use computers to cut costs, not to increase them.

As far as economics go, now that an “accident” has shown just how vulnerable securities markets are to inadvertent manipulation, how long before some terrorist or other extremist group figures out how to duplicate the effect?  And then all the programmed trading computers will blindly execute their trades… and we’ll get an even bigger disaster.

Why?

Because we’ve become an instant-reaction society, and electronic systems magnify the effect of either system glitches or human error. Those programmed securities trading computers were designed to take advantage of market fluctuations on a micro if not a nano-second basis.  For better or worse, they make decisions faster than any human trader could possibly make them – and they do so based on data that may or may not be accurate.

We’re seeing the same thing across society.  Today’s young people are being trained to react, rather than to think.  Instead of letters or even email, they use Twitter.  Instead of bridge or old fashioned board games like Risk or Diplomacy, they prefer fast-acting, instant reaction videogames with a premium on speed.  More and more of the younger generation cannot form or express complex concepts, even as technology is taking us into an ever more complex world.  Business has a greater and greater emphasis on short-term gain and profits.  People want instant satisfaction.

The societal response to the increase in speed across society is to use computers and electronic systems to a greater and greater extent – but, as happened last Thursday, what happens when one’s faithful and obedient electronic servants do exactly what their inputs dictate that they’re supposed to do – and the result is disaster?

Do we really want – and can our society survive – a world where a few high-speed mistakes can destroy more than a trillion dollars worth of assets in seconds… or do even worse damage than that?  Not to mention one where thinking is passé… or for the old fogies of an earlier generation… and where all that matters is instant [and shallow] communications and short-term results that may well result in long-term disaster.