Edward Tenner’s *The Efficiency Paradox*, or are big tech and finance actually the same?

The author is Edward Tenner and the subtitle is What Big Data Can’t Do.  Overall, I prefer to read Tenner on engineering more narrowly construed, but still I found some novel and interesting ideas in this book, as you might expect.

Most notably, I was struck by his claim that the rise of “Big Tech” and the rise of finance are more or less the same thing.  Many of the tech innovations are in fact transactional innovations, and both the “financialization” revolution and much of social network tech promulgate the idea of “life as a portfolio,” albeit portfolios of different kinds.  Both have an ideal of “friction-free commerce,” or social interactions, as the case may be, and of course in both cases this is organized by code.

Furthermore, if you make buying and finding things much easier, finance as a percentage of gdp likely will go up.  Do not forget that Jeff Bezos was first a young star at Shaw, a hedge fund.  Is it any accident that finance and tech are often, these days, competing for the same pool of talented young quant workers?

Here is one good bit from Tenner:

We have all heard of Jeff Bezos, founder of Amazon.com.  Only technical specialists and historians have heard of Jacobus Verhoeff.  Yet when Bezos planned to transform online retailing, bookselling was a natural beginning because, thanks to Verhoeff’s algorithm, more books had standardized product numbers than any other category of merchandise.

You can buy the book here.


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