The melancholy of history rhyming
They never tell you how sad it makes you to see history repeat itself.
In my last post I wrote about some of the parallels between the “AI” Bubble and the Icelandic banking bubble, but what I left out was just how different the bubble felt in Iceland than, for example, in the UK.
During that bubble I first lived in the UK, then moved back home to Iceland for a couple of years, before returning to the UK towards the tail end of the bubble.
I was sitting on a floor pillow in an otherwise empty flat planning my Ikea purchases, like a proper Nordic person, when I got a phone call from my mother.
This was back before she retired as a reporter and she was telling me that her sources in the Icelandic banks were all acting as if they were about to crash, so she told me to transfer all of my savings out of Icelandic if I could.
I did, and about an hour after the transfer was confirmed, the banks stopped all withdrawals and transfers.
I still lost most of that money. I was working remotely for an Icelandic company and a combination of currency controls, exchange rate collapse, and other legal limitations meant that I was largely without income for the following months, mostly living on those savings.
Savings that I’d basically destroyed myself for over the previous two years, working a full-time sideline job in addition to my main job as a web developer.
That, in and of itself, was a fairly typical experience during that bubble. I didn’t have a house to lose, so I was better off than most.
What had been different was the experience of living in Iceland during the two years prior.
The bubble was all-encompassing culturally and, worse yet, it was suffused with toxic nationalism throughout. Everybody, and I mean everybody, was convinced that the success of the banks was due to the Icelandic people being naturally good at finance, when our history would generally suggest the opposite.
Everywhere you went, people were talking about finance, real estate, and the superiority of the blood and nature of the Icelandic nation. There was extensive research, most of it funded by the banks or organisations that later turned out to be closely affiliated. Banks and investors directly sponsored positions a the universities. Our media and culture was a constant march of nationalist bullshit. Critics were hounded into silence.
That resulted in an academic environment that was nothing short of an outright propaganda machine. The combination of funding and intimidation meant that all research, even that from otherwise impartial researchers, became indistinguishable from propaganda – nationalistic “blood and nation” propaganda at that.
It was, to put it bluntly, mildly horrifying.
Much of this took place in Icelandic, which meant that foreigners largely missed the gross nationalism and racism-adjacent rhetoric that dominated Icelandic society at the time.
I was already planning my move back to the UK within a year of moving back to Iceland. Even though the banking bubble was, at that time, an international phenomenon, it wasn’t as all-pervasive culturally in the UK as it was in Iceland.
When it fell apart, I felt both relief and fear. It was already obvious that we were unlikely to ever repair the damage, hence the fear, but at least Iceland could start to recover culturally.
Twelve years passed until I finally moved back home.
The “AI” Bubble feels more like the all-encompassing wasteland that was the 2007 bubble in Iceland than anything else I’ve experienced.
Even many of the critics have completely integrated “AI” propaganda and myth-making into their worldview, assuming Large Language Model progress as inevitable, blinding them to the inherent weaknesses of the tech, and leading them to promote “careful” adoption of a tech whose variability is inherently destructive to productivity, reliability, and quality.
It is wholly unsuitable to its stated purpose, but you wouldn’t know that from the discourse.
There are sound reasons to be against the technology irrespective of whether it works are not.
- It’s turned the tech industry from a potential political ally to environmentalism to an outright adversary. Water consumption of individual queries is irrelevant because now companies like Google and Microsoft are explicitly lined up against the fight against climate disaster. For that alone the tech should be burned to the ground.
- People in a variety of fields are watching the “AI” industry outright promise to destroy their field, their industry, their work, and their communities. Illustration, filmmaking, writers, and artists don’t need any other reason to be against the tech other than the fact that the industry behind the tech is openly talking about destroying them.
- Those who fight for progressive politics are seeing authoritarians use the tech to generate propaganda, litter public institutions with LLM “accountability sinks” that prevent the responsibility of destroying people’s lives from falling on individual civil servants, and efforts to leverage the centralised nature of Large Language Model chatbots into political control over our language.
But this means that there is a large group of people in society who, because generations of individualistic and libertarian propaganda has completely sabotaged their ability to do basic risk-reward calculations – you live in a society, you fucking ghoul, if it goes, you go – who have ingrained the promises and myth-making of the tech industry into their very worldview.
They believe that this tech will help at work.
That it will get better.
The flaws will be fixed.
There is no reason to believe that, any more than there was reason to believe the Icelandic universities’ research on the inherent superiority of the Icelandic people, or the ever-present promise of imminent rollout of high-yield fusion reactors.
In fact, as with the 2007 bubble in Iceland, there’s plenty of reason to believe the opposite. The history of “AI” is littered with tech that didn’t pan out and plateaued early in its development process. The history of tech, specifically, is one of constant mismanagement and extremely dodgy research.
Promises of a glorious future abound, but those futures never pan out as promised.
But, specific to our time, this particular set of tech CEOs have a history of looking genuinely unreliable and self-centred.
Not that anybody cares at this point, but there’s plenty of evidence in the tech itself that it is more of a hazard than a benefit. It’s highly variable and variability is more toxic to work and productivity than accuracy. Its output is rife with defects of a nature that is genuinely hard for each individual user to spot. It’s expensive, but because it’s also still underperforming, any progress in making it cheaper will get consumed by efforts to “fix” a broken tech.
And it’s an outright cognitive hazard, which I warned about two years ago, but is now playing out to be much, much worse than I expected with ever-increasing reports of “chatbot psychosis”.
The evidence in 2007 was that the Icelandic economy was on the brink of disaster, yet the prevailing story at the time was that it was the “doubters” who were being unrealistic and the “pragmatic” view was that the Icelandic economic miracle needed to be supported and built on.
What reliable evidence we have today would suggest that this tech is outright harmful to work and productivity, yet the prevailing myth is that supporting LLMs is “realpolitik” – that it has a benefit that justifies sacrifices in other fields.
As with other bubbles, this one won’t last. But history shows us that we’re unlikely to fix what the bubble ends up breaking. We’ve had almost two decades of active dismantling of public services, education, and public access to healthcare throughout Europe and the US. The bubble pop was used to justify the destruction of the public institutions that we built up after World War Two. The dysfunctions of the finance industry were glossed over, leading directly to the mess we’re in now with tech and “AI”.
I worry what will happen when the “AI” Bubble pops and how it might be used to reshape the society we live in today.