Peter Cochrane's Blog: Is the analogue-digital barrier breaking down?

Could the fragile membrane between digital and analogue one day fail?

Written in Vancouver on a cool autumn day and dispatched via a free wi-fi service in my hotel with lots of bandwidth.

Analogue diseases crossed the animal-human divide long ago, but digital infections have only recently started hopping across platforms. Is there now a breakdown in the man-machine analogue-digital barrier, too?

Fleas, ticks, mosquitoes, contaminated water and food, skin contact and the air we breathe have all been conduits for the migration and mutation of animal-based diseases, infecting mankind over millennia. On the other side of the analogue-digital divide we now see growing levels of digital contamination by malware spreading through our machines.

I think we can safely assume that we all harbour some form of disease, and that every PC is infected with one nasty or another: there is just no avoiding it. With a sneeze, splash, touch or breath, that network connection, email, memory stick, or website, how could we escape?

So this raises the question: could the fragile membrane between digital and analogue break down, and might we see cross-infection between the two worlds?

Of course, I think we already have. At an obvious level, the bacteria-rich dust, debris and smears of grease from the human body that reside in and on every keyboard, trackpad and mouse are common examples, but I think there are many more.

Digital deaths in healthcare are now a significant cause of people shuffling off this mortal coil. Anything from misreading an instrument, a typing or file error, applying the wrong body mass or dose correction, to getting a diagnosis or name wrong - it just happens.

If a politician, manager, statistician or trader is off-colour and hits the wrong key or misreads screen data and infers the wrong condition, the resulting effects may be felt across the planet, sometimes with an immediate impact. Conversely, corrupted data presented to the same people can be equally disastrous.

Looking at the networked world we have built, you might conclude that it is something of a miracle that we are still all here, but all rapidly-evolving ecologies are inherently tolerant of most change, until an extreme is reached.

Consider for a moment the economic system of this planet, which is governed by people and machines.

Politicians, bankers, regulators businesses, consumers, markets, traders, supply-and-demand, and automated sensors with trading systems all largely operate invisibly and without any form of policing or supervision. Of course, so do those on the periphery - criminals, big and small.

Looking at the economic patterns over the past 200 years, we see cycles of repeated success and failure. It is also clear that the cycles speed up as technology advances, and the peaks and troughs appear to become more extreme with time.

US price cycles correlated against conflicts

US price cycles correlated against conflicts in the past 200 years
(Image credit: Peter Cochrane)

There is more than a hint of correlated rise and fall in fortunes. The US is often described as blindly treading an almost identical path towards stagnation to that taken by Japan 20 years ago. The same condition of course was, relatively speaking, also achieved by a number of EU economies well ahead of Japan. The graphic below illustrates the potential problems brewing in this one case.

Cycles of success and failure in the economic patterns of the past 30 years

Repeated cycles of success and failure are evident in the economic patterns of the past 30 years
(Image credit: Peter Cochrane)

Why, you might ask, do economies insist on aping failed models? Probably for the same reason all the EU nations systematically lost their empires: was it just the evolution of societies and liberty, political blindness, hubris, or diseased decisions? Probably.

Looking through the vast amount of data generated by the markets, analysts and pundits, it is easy to identify...