Weekend Argus (Saturday Edition)
Future heralds an era where virtual and real worlds connect
THE onset of a new year brings plenty of predictions, and so I will hazard one: many of the biggest events of 2018 will be bound together by a common theme, namely the collision of the virtual internet with the real “flesh and blood” world.
This integration is likely to steer daily lives, the economy, and maybe even politics to an unprecedented degree.
For instance, next year will see a major expansion of the “internet of things”, especially home and other smart devices subject to people’s commands. So much of our time with information technology has been taken up by texting and Facebook. The next steps will be controlling our doors, heating systems, lights, stoves and refrigerators, and moving toward driverless cars. The virtual world will be managing our older physical processes more and more.
“Augmented reality” will become a better-known phrase as a superior version of Google Glass arrives. Imagine walking into a store, putting on techie glasses and learning about product bargains and items you might want to buy, as you do now on the web.
That kind of useful information will seep into public spaces and you’ll be able to speak a command and have your favourite cheese waiting for you at the grocery checkout, at a discount!
Integration will shape the financial world too. Bitcoin has been an online sensation since its origin in 2009, but it has existed as a kind of closed universe, both intellectually and in terms of its impact on other financial markets.
Late this year, futures contracts for bitcoin started on the Chicago Board Options Exchange and the Chicago Mercantile Exchange, which means bitcoin now intersects with a world of collateral, margin requirements, potentially insolvent traders, and publicly verifiable values for contract settlement.
This integration of real and virtual worlds will either make or break bitcoin and other crypto-assets.
US foreign policy has proceeded along two separate lines. The process-oriented, expertise-based approach from some of President Donald Trump’s advisers, and from the State Department.
And Trump, who conducts much of his personalised, individualised foreign policy on Twitter, including threats to North Korea and insults to various allies. So far the processoriented and Twitter-oriented foreign policies have co-existed, however uneasily.
I see 2018 as the year where these two foreign policies converge in some manner. Either Trump’s tweets end up driving foreign policy and its concrete realisation, or the real-world policy prevails and the tweets become less relevant.
As for conflict, cyberwar will escalate to the point where it is seen like an act of physical aggression, comparable to bombing civilians, rather than existing in its own separate sphere.
Yet more of the advances on the tech side are troubling, such as how artificial intelligence is being used for surveillance , and how Chinese social credit rating systems are assessing the suitability of individuals as both credit risks and loyal citizens. I expect many other countries to adopt similar technologies, and so “control of information” will mean “control of people” more and more.
One under-discussed feature of the internet has been its role as an “add-on” in human affairs. If you don’t want to use the internet, you can still get most things done, in the physical world at least, but you’re probably relying on other people to use the internet for you.
Even without using e-mail you can vote, buy groceries, drive your car, and send your kids to school.
But independence from internet use is diminishing rapidly. The bright side is that the integration of the physical and the virtual will spread productivity gain.
The downside is that skill in virtual worlds will determine a person’s financial success and enjoyment of life more and more, to the disadvantage of those on the dwindling side of the digital divide.
Cowen is a Bloomberg
View columnist and a professor of economics at George Mason University.