From High Frequency Trading to Self-Organizing Moral Machines

From High Frequency Trading to Self-Organizing Moral Machines

Ben van Lier (Centric, Gouda, Netherlands)
Copyright: © 2016 |Pages: 17
DOI: 10.4018/IJT.2016010103
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Abstract

Technology is responsible for major systemic changes within the global financial sector in general and particularly in the trade in financial products. The global financial sector has already developed into a comprehensive network of mutually connected people and computers that are constantly evaluating and approving millions of transactions. Algorithms play a crucial role within this global financial network. An algorithm is in essence merely a set of instructions developed by one or more people with the intention of having these instructions performed by a machine such as a computer, a software robot or a physical robot in order to realize an ideal result. As part of a development in which we as human beings have ever higher expectations of algorithms and these algorithms become ever more autonomous in their actions, we cannot avoid including possibilities in these algorithms that enable ethical or more considerations. To develop this ethical or moral consideration, we need a kind of ethical framework which can be used for developing algorithms. With the development of such a framework we can start to think about what we as human beings consider to be moral action by machines within the financial sector based on such a framework.
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Enframing

Many foundations of the current financial and social crisis lie in the unstoppable rise of technology and the use of technological applications during the past decade and mankind's inability to give sufficient meaning to these developments. The rise of the personal computer, the Internet and the mobile phone has been unstoppable during the past twenty years, as noticed by van Lier (2015). We can now conclude that a mobile phone is available for each average world citizen. Of all the mobile phones sold worldwide, more than 40% are smartphones with a memory capacity that exceeds that of a desktop computer from eight years ago. On the basis of the resulting networking, new technological applications were invented, which became a social and economic force. I am referring to developments also known as social media such as Facebook, Twitter, Instagram, LinkedIn and Whatsapp. Who would have thought twenty years ago that the largest companies in the world would be IT companies such as Google, Apple, Microsoft or Samsung. And that a small company such as Whatsapp with approximately 100 employees is able to show the global telecommunications giants that their existing business model based on modern elements such as calling and texting has come to the end of its life cycle. These telecommunications giants are now also forced to sit and watch how their crucial role, which arose in the middle of the previous century, is replaced with data bundles and devices that communicate with each other in networks of the postmodern society. Whether we like it or not, all of these changes have an unprecedented influence on our daily life and work and our experience of reality. The end of this technological revolution is not yet in sight and in the years to come we will be confronted with more technological developments and applications arising therefrom. We are on the brink of a new phase in technological evolution and, in addition to people, more and more objects are interconnected in these networks and enabled to exchange and share information mutually and with people. As van Lier (2015) states, apparently ordinary and traditional objects such as cars, televisions, passport, books, sports shoes and medical implants will be or have already been interconnected in these networks. We also want to use and wear more portable information elements such as Google glasses, smart watches, OMsignal t-shirts or Nike shoes so that we are able to share information about ourselves with others. And as if this is not yet enough, we are also confronted with new developments resulting from the convergence of nano-, bio- and cognitive technology with IT. This convergence has been possible because our understanding of nanoscience and nanotechnology and how to manipulate matter with this technology is growing. According to Bainbridge and Rocco (2005), these new combinations of technology will enable:

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