Markets are mediating machines. In our time, the notion of a
machine is very different from that of the industrial Machine
Age associated with the pragmatics of the civilization of
literacy. Today, the term machine is evocative of software rather
than hardware. Machine comprises input and output, process,
control mechanisms, and the expectation of predictable
functioning. Here is where our difficulties start. At best,
markets appear as erratic to us. Market prediction seems to be an
oxymoron. Every time experts come up with a formula, the market
acts in a totally new manner.
An amazing number of transactions, ranging from bargaining at a
garage sale to multi-prong deals in derivatives, continuously
subject the outcome of practical experiences of human
self-constitution to the test of market efficiency. There is
nothing that can escape this test: ideas, products, individuals,
art, sports, entertainment. Like a tadpole, the market seems to
consume itself in transactions. At times, they appear so
esoteric to us that we cannot even fathom what the input of this
machine is and what the output. But we all expect the charming
prince to emerge from the ugly frog!
What can be said, without giving away the end of the story too
early, is that the functioning of this growing mechanism of
human self-evaluation could never take place at its current
dynamics and size in the pragmatic framework of literacy. All
over the world, market processes associated with previous
pragmatic frameworks-barter is one of them-are relived in
bazaars and shopping malls. But if anyone wants to see
practical experiences of the civilization of illiteracy unfolding
in their quasi-pure manner, one has only to look at the stock
market and commodities exchanges and auctions conducted over the
Internet. Moreover, one must try to envision those invisible,
distributed, networked transactions in which it is impossible to
define who initiated a transaction, continued another one, or
brought a deal to an end, and based on what criteria. They, too,
seem to have a life of their own.
Mediating machine also evokes the notion of machine as program.
Although some stockbrokers have second thoughts about how their
role is diminished through the mediation of entities that cannot
speak or write, programmed trading on the various stock
exchanges is a matter of course. Computational economists and
market researchers, who design programs based on biological
analogies, genetics, and dynamic system models, can testify to
the truth of this statement.