The Theory That Explains Why Everyone Went Crazy

Joe Weisenthal (0:03)

Bloomberg Audio Studios.

Tracy Alloway (0:05)

Podcasts, radio, news.

Joe Weisenthal (0:20)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:26)

And I'm Tracy Alloway.

Joe Weisenthal (0:27)

Tracy, you know, there's a lot of, like, concerns about AI, obviously, these days. And we, anyone who's, like, reasonably intelligent can, like, list tons, like, maybe, like, it's going to go rogue and be smarter than us or maybe whatever. But I still think, like, what or maybe there's just going to be this, like, flood of disinformation and deepfakes, or maybe it's going to put all journalists out of business, which is certainly plausible.

But I think, you know, like, something I think a lot about is just this idea that, regardless of what happens, like, we're going to be increasingly sort of trusting, like, a black box for answers, that we really have no idea where those answers, however you want to describe that, come from.

Tracy Alloway (1:09)

Yes, absolutely. And this is something that's come up on the podcast a number of times now. I'm thinking way back to an episode we did that was basically about the black box of algorithms and how difficult it was to understand what goes into them and then what comes out. And then, of course, we recently did that episode on pricing and the idea of algorithmic pricing, the idea of building proxy consumer profiles.

And you're right, the issue is we know that there's this new technology, we know that there's all this data floating around, but we don't entirely know how it is coming to the conclusions or creating the output that it actually is.

Joe Weisenthal (1:50)

The pricing thing is interesting because in a market economy, you could argue it's like, at any given moment, you're being served up to the optimal price. And in theory, even with the most advanced algorithms and stuff, maybe there's some like this price is happening at the best price for both the seller and the buyer, et cetera. But I think people just have a deep intuitive distrust about the fact that you can't go there and touch it and verify it and see this is why this exists in the state that it is.

And I think it's going to create a lot of, I don't know, cultural apprehensions as more and more decisions and more and more things that affect our lives just seem to emerge spontaneously out of the box.

Tracy Alloway (2:38)

Absolutely, I'm thinking of all the people working at Chipotle who are going to have to answer questions about not just portion sizes now, but also questions from customers about are they getting the best price?

Joe Weisenthal (2:49)

Have you seen those awful videos that people are taking of the Chipotle workers?

Tracy Alloway (2:54)

Yeah, I've seen some of them.

Joe Weisenthal (2:55)

It's so vile.

Tracy Alloway (2:55)

I can only imagine.

Joe Weisenthal (2:56)

It's so vile. Anyway, that's a separate thing.

But yes, like all of these things and you know, it's not just with AI, obviously, and like this sort of world exists in increasingly black boxes. You put in a support ticket, you try to like talk to someone in an embassy or consulate or anything you do and you sort of like send out some requirement or some request to some bureaucracy or some company and then it moves around. I was on a I had a flight recently that was delayed for nine hours and there's like this palpable frustration that everyone feels that the person, you know, standing at the gate like can't answer their questions and they can't get anyone to answer their questions. And it just sort of like, you know, everyone explodes and everyone knows it's not the gate agent's fault.

But still like, you know, there's just this frustration like where where is the answer to what's going on? Right.

Tracy Alloway (3:47)

And you can't ask a single person because that single person does like the gate agent doesn't have the answers.

I think what's happening is like society has organized itself in such a way as to devolve responsibility, and the creation of all this new technology is basically going to, I guess, ramp all of that up. Right. Like, so it might not even be the gate agent that you're asking in the future. It might be you trying to like, I don't know, ask the algorithm, like why it decided to bump you versus someone else or actually that already happens, right? There is an algo that dictates like who gets bumped from the plane and who doesn't. So, yeah.

Joe Weisenthal (4:29)

The other big one, of course, is health insurance and why some claims are suddenly denied and you never get this answer. Anyway, the world is already filled with systems in which we have some question and no one actually can sort of, you know, give you the answer.