ADMXI gathers a corpus of references from three main investigation fields : (1) Fabulatory Epistemology of Louis Bec and Vilem Flusser, beautifully illustrated by the seminal book of Zoosystemic "Vampyrotheutis Infernalis"; (2) High-frequency networked finance, and particularly towards finance's algorithmic transformation process. (3) Philosophy of technique, focusing on the development of cybernetics as a political project, and quoting the extended researches of Antoinette Rouvroy on the concept of Algorithmic Governmentality.
Fabulatory epistemology involves introducing into the domain of knowledge the inventive, imaginary dimensions of face-to-face discussion, in a way that sends out their multiple reflections and endlessly reinvents their meaning.
The classification of living things by the living beings can be considered as one of the first experiments of modeling undertaken by the human species to make comprehensible a strangely heterogeneous world. Taxonomy has thus gradually become an act of creation of potential, additive, adaptive and predictive, universes, all the while attempting to apply grids on a elusive reality in the interest of producing an objective reading.
This section investigates on the transformations that are subsequent to the rise of technique and technology in society, politics and economics. The following selection of papers and books contains works by Gilbert Simondon, John Von Neuman, Norbet Weiner, Antoinette Rouvroy and Dan McQuillan, questions and engages the non-neutrality of technique, technology as a discourse and cybernetics as a political project.
God & Golem Inc. The MIT Press, 1964.
God and Golem presents Wiener's ideas on machine learning, machine reproduction, and the place of machines in society, with some religious context. The provocative title sums up the confrontation of technical, mathematical and imaginative boldness with cultural prejudice.
1966. Theory of Self-Reproducing Automata, Burks, A. W., ed., University of Illinois Press.
In the late 1940's John von Neumann began to develop a theory of automata. He envisaged a systematic theory which would be mathematical and logical in form and which would contribute in an essential way to our understanding of natural systems (natural automata) as well as to our understanding of both analog and digital computers (artificial automata).
McQuillan, D (2015, forthcoming) 'Algorithmic States of Exception', European Journal of Cultural
In this paper I argue that pervasive tracking and data-mining are leading to shifts in governmentality that can be characterised as algorithmic states of exception. I also argue that the apparatus that performs this change owes as much to everyday business models as it does to mass surveillance. I look at technical changes at the level of data structures, such as the move to NoSQL databases, and how this combines with data-mining and machine learning to accelerate the use of prediction as a form of governance. The consequent confusion between correlation and causation leads, I assert, to the creation of states of exception. I set out what I mean by states of exception using the ideas of Giorgio Agamben, focusing on the aspects most relevant to algorithmic regulation: force-of and topology. I argue that the effects of these states of exception escape legal constraints such as concepts of privacy. Having characterised this as a potentially totalising change and an erosion of civil liberties, I ask in what ways the states of exception might be opposed. I follow Agamben by drawing on Walter Benjamin's concept of pure means as a tactic that is itself outside the frame of law-producing or law-preserving activity. However, the urgent need to respond requires more than a philosophical stance, and I examine two examples of historical resistance that satisfy Benjamin's criteria. For each in turn I draw connections to contemporary cases of digital dissent that exhibit some of the same characteristics. I conclude that it is possible both theoretically and practically to resist the coming states of exception and I end by warning what is at stake if we do not.
This last selection of papers tries to draw an alternative history of finance, through a perspective that embrasses the introduction of physics in finance by Bachelier in 1900, to the recent transformations of finance due to its hybritization with technology and high-frequency communication networks.
Written in the 1880s by a successful cotton trader and president of the New York Cotton Exchange between 1878 and 1880, the pamphlet effectively disappeared until parts of it were republished in 1965 by Traders Press and then reprinted several times by Fraser Publishing. In eight pages Watts analyzes, advises, and admonishes. Although Watts admits that speculation and gambling have elements in common—for instance, speculation has elements of chance and gambling has elements of reason, he defines speculation as a venture based upon calculation.
Théorie de la Spéculation, Par M.L. Bachelier. 1900
March 29, 1900, is considered by many to be the day mathematical finance was born. On that day a French doctoral student, Louis Bachelier, successfully defended his thesis Théorie de la Spéculation at the Sorbonne. The jury, while noting that the topic was "far away from those usually considered by our candidates," appreciated its high degree of originality.
PDF in french
The Variation of Certain Speculative Prices. Benoit B. Mandelbrot. The Journal of Business 02/1963; 36(4):394-394. DOI: 10.1086/294632
In 1963 Mandelbrot analyzed the variations of cotton prices on a time series starting in 1900. There were two important findings. First, price movements had very little to do with a normal distribution in which the bulk of the observations lies close to the mean (68% of the data are within one standard deviation). Instead, the data showed a great frequency of extreme variations. Second, price variations followed patterns that were indifferent to scale: the curve described by price changes for a single day was similar to a month’s curve. Surprisingly, these patterns of self-similarity were present during the entire period 1900-1960, a violent epoch that had seen a Great Depression and two world wars. Mandelbrot used his fractal theory to explain the presence of extreme events in Wall Street. In 2004 he published his book on the “misbehavior” of financial markets. The basic idea that relates fractals to financial markets is that the probability of experiencing extreme fluctuations (like the ones triggered by herd behavior) is greater than what conventional wisdom wants us to believe. This of course delivers a more accurate vision of risk in the world of finance.
1963 The Variation of Certain Speculative Prices.pdfIMGS/
Financial black swans driven by ultrafast machine ecology
2012, Neil Johnson, Guannan Zhao, Eric Hunsader, Jing Meng, Amith Ravindar, Spencer Carran and Brian Tivnan
Society’s drive toward ever faster socio-technical systems, means that there is an urgent need to understand the threat from ‘black swan’ extreme events that might emerge. On 6 May 2010, it took just five minutes for a spontaneous mix of human and machine interactions in the global trading cyberspace to generate an unprecedented system-wide Flash Crash. However, little is known about what lies ahead in the crucial sub-second regime where humans become unable to respond or intervene sufficiently quickly 20,21 . Here we analyze a set of 18,520 ultrafast black swan events that we have uncovered in stock-price movements between 2006 and 2011. We provide empirical evidence for, and an accompanying theory of, an abrupt system-wide transition from a mixed human-machine phase to a new all-machine phase characterized by frequent black swan events with ultrafast durations (<650ms for crashes, <950ms for spikes). Our theory quantifies the systemic fluctuations in these two distinct phases in terms of the diversity of the system’s internal ecology and the amount of global information being processed. Our finding that the ten most susceptible entities are major international banks, hints at a hidden relationship between these ultrafast ‘fractures’ and the slow ‘breaking’ of the global financial system post-2006. More generally, our work provides tools to help predict and mitigate the systemic risk developing in any complex socio-technical system that attempts to operate at, or beyond, the limits of human response times.
2012 Financial black swans driven by ultrafast machine ecology.pdf
Are random trading strategies more successful than technical ones?
A.E.Biondo, A.Pluchino, A.Rapisarda, D.Helbing
March 19, 2013
In this paper we explore the specific role of randomness in financial markets, inspired by the beneficial role of noise in many physical systems and in previous applications to complex socio-economic systems. After a short introduction, we study the performance of some of the most used trading strategies in predicting the dynamics of financial markets for different international stock exchange indexes, with the goal of comparing them with the performance of a completely random strategy. In this respect, historical data for FTSE-UK, FTSE-MIB, DAX, and S&P500 indexes are taken into account for a period of about 15-20 years (since their creation until today).
2013 Are random trading strategies more successful than technical ones.pdf