Spread Networks laid a new fibre optics cable between New York and Chicago

17 results back to index


pages: 400 words: 121,988

Trading at the Speed of Light: How Ultrafast Algorithms Are Transforming Financial Markets by Donald MacKenzie

algorithmic trading, automated trading system, banking crisis, barriers to entry, bitcoin, blockchain, Bonfire of the Vanities, Bretton Woods, Cambridge Analytica, centralized clearinghouse, Claude Shannon: information theory, coronavirus, COVID-19, cryptocurrency, disintermediation, diversification, en.wikipedia.org, Ethereum, ethereum blockchain, family office, financial intermediation, fixed income, Flash crash, Google Earth, Hacker Ethic, Hibernia Atlantic: Project Express, interest rate derivative, interest rate swap, inventory management, Jim Simons, level 1 cache, light touch regulation, linked data, lockdown, low earth orbit, machine readable, market design, market microstructure, Martin Wolf, proprietary trading, Renaissance Technologies, Satoshi Nakamoto, Small Order Execution System, Spread Networks laid a new fibre optics cable between New York and Chicago, statistical arbitrage, statistical model, Steven Levy, The Great Moderation, transaction costs, UUNET, zero-sum game

The first such proposal, in 2016, came from the Chicago Stock Exchange, which was small and somewhat peripheral to US share trading. The staff of the SEC initially approved the proposal, but Republican Commissioner Michael Piwowar opposed that decision, which was then put on hold. In April 2018, the Chicago Exchange was bought by the Intercontinental Exchange, owner of the New York Stock Exchange, and its proposal for an asymmetric speed bump was subsequently withdrawn. The issue continued to be a live one, though, because each of the three “families” of US stock exchanges (the New York Stock Exchange, Nasdaq, and the Chicago Board Options Exchange or CBOE) owns multiple exchanges—the CBOE, for instance, owns four—which gives them a certain freedom to take just one of the exchanges they operate and experiment with modifying its market structure in the hope that a different material arrangement of trading will increase revenues.

The strands that had marginally lower refractive indexes were made ever so slightly longer—by a small amount of coiling—to ensure transmission times that were as equal as possible. The new, direct cable laid by Spread Networks had immediate effects on trading. Automated trading firms that had been unable to, or had chosen not to, pay the high costs of using it suddenly found themselves at what in some cases was a serious disadvantage. Interviewee CV’s firm, for example, had been an influential Chicago pioneer of the trading not just of Treasury futures but also of the underlying Treasury securities. “I couldn’t pay Spread Network’s prices,” says CV, “I wasn’t big enough for that.” Other firms, with their faster New Jersey to Chicago link, “were beating us,” he says: You couldn’t get to the connection quick enough.

Cultural Economy: Cultural Analysis and Commercial Life. London: Sage. Duhigg, Charles. 2009. “Stock Traders Find Speed Pays, in Milliseconds.” New York Times, July 24. Available at https://www.nytimes.com/2009/07/24/business/24trading.html, accessed September 21, 2020. Durbin, Michael. 2010. All About High-Frequency Trading. New York: McGraw-Hill. Einstein, Albert. 1920. Relativity: The Special and the General Theory. London: Methuen. Equinix. 2012. “Chicago’s Financial Hub.” Available at https://carlarweir.files.wordpress.com/2013/03/equinix-chicago_metro_report_6-26-2012.pdf, accessed November 8, 2019. Eurex. 2020. “Introduction of a Framework to Confine Speculative Triggering and Recalibration of the ESU Fee Limits.”


pages: 250 words: 87,722

Flash Boys: A Wall Street Revolt by Michael Lewis

automated trading system, bash_history, Berlin Wall, Bernie Madoff, collateralized debt obligation, computerized markets, drone strike, Dutch auction, Fall of the Berlin Wall, financial intermediation, Flash crash, High speed trading, information security, latency arbitrage, National best bid and offer, pattern recognition, payment for order flow, Pershing Square Capital Management, proprietary trading, risk tolerance, Rubik’s Cube, Sergey Aleynikov, Small Order Execution System, Spread Networks laid a new fibre optics cable between New York and Chicago, the new new thing, too big to fail, trade route, transaction costs, Vanguard fund

On top of the mountain was a microwave tower—a string of them, in fact, perched on the mountains above the valley in which the line was buried. It takes roughly 8 milliseconds to send a signal from Chicago to New York and back by microwave signal, or about 4.5 milliseconds less than to send it inside an optical fiber. When Spread Networks was laying its line, the conventional wisdom was that microwave could never replace fiber. It might be faster, but whatever was going on between New York and Chicago required huge amounts of complicated data to be sent back and forth, and a microwave signal couldn’t transmit nearly as much data as a signal in a fiber-optic cable.

The only constraint was how fast an electronic signal could travel between Chicago and New York—or, more precisely, between the data center in Chicago that housed the Chicago Mercantile Exchange and a data center beside the Nasdaq’s stock exchange in Carteret, New Jersey. What Spivey had realized, by 2008, was that there was a big difference between the trading speed that was available between these exchanges and the trading speed that was theoretically possible. Given the speed of light in fiber, it should have been possible for a trader who needed to trade in both places at once to send his order from Chicago to New York and back in roughly 12 milliseconds, or roughly a tenth of the time it takes you to blink your eyes, if you blink as fast as you can.

As late as 2008, major telecom carriers were unaware that the financial markets had changed, radically, the value of a millisecond. Upon closer investigation, Spivey saw why. He went to Washington, DC, and got his hands on the maps of the existing fiber cable routes running from Chicago to New York. They mostly followed the railroads and traveled from big city to big city. Leaving New York and Chicago, they ran fairly straight toward each other, but when they reached Pennsylvania they began to wiggle and bend. Spivey studied a map of Pennsylvania and saw the main problem: the Allegheny Mountains. The only straight line running through the Alleghenies was the interstate highway, and there was a law against laying fiber along the interstate highway.


pages: 317 words: 84,400

Automate This: How Algorithms Came to Rule Our World by Christopher Steiner

23andMe, Ada Lovelace, airport security, Al Roth, algorithmic trading, Apollo 13, backtesting, Bear Stearns, big-box store, Black Monday: stock market crash in 1987, Black-Scholes formula, call centre, Charles Babbage, cloud computing, collateralized debt obligation, commoditize, Credit Default Swap, credit default swaps / collateralized debt obligations, delta neutral, Donald Trump, Douglas Hofstadter, dumpster diving, financial engineering, Flash crash, G4S, Gödel, Escher, Bach, Hacker News, High speed trading, Howard Rheingold, index fund, Isaac Newton, Jim Simons, John Markoff, John Maynard Keynes: technological unemployment, knowledge economy, late fees, machine translation, Marc Andreessen, Mark Zuckerberg, market bubble, Max Levchin, medical residency, money market fund, Myron Scholes, Narrative Science, PageRank, pattern recognition, Paul Graham, Pierre-Simon Laplace, prediction markets, proprietary trading, quantitative hedge fund, Renaissance Technologies, ride hailing / ride sharing, risk tolerance, Robert Mercer, Sergey Aleynikov, side project, Silicon Valley, Skype, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, transaction costs, upwardly mobile, Watson beat the top human players on Jeopardy!, Y Combinator

In fact, as the new machines were installed in phases, Western Union had to devise a way to slow them down to run at the same speed as the older machines so they wouldn’t offer unfair advantages to traders looking to front-run the rest of the market.6 Not long after the new tickers were installed, Western Union announced that they would be raising the rates from $25 per month for the first time in a decade.7 From there, the price of getting information as quickly as technology allowed escalated inexorably, culminating in our single strands of dark fiber that fetch $3 million per year. Just weeks after Spread Networks completed its route, rumors popped up of a yet shorter pipe from New York to Chicago. The gossip, circulated on popular finance blogs and hacker chat rooms such as NuclearPhynance, posited that a company was drilling a hole in an absolute straight line through the earth from Chicago to New York. This hole would dispense with the earth’s curvature, ensuring the shortest route possible. As fun as it sounded, the project was a complete hoax. “Yeah, I heard about that one,” says Spivey, the Spread Networks president, with a laugh. “Let’s hope it doesn’t get done anytime soon.”

This is why, in 2010, two men built a secret gopher hole that stretched halfway across the country. TO TRADE IS TO DIG The unlikely tale begins in 2008, when a New York hedge fund asked Daniel Spivey to develop an algorithmic trading strategy that searched out tiny price discrepancies between index futures in Chicago and their underlying stocks and securities in New York. If the future cost more in Chicago than did all of its stocks in New York, the strategy would sell futures in Chicago and buy stocks in New York. When prices in Chicago and New York realigned—and they always realigned—Spivey’s program would dump its positions and book its profit. Spivey’s strategy was no different than the arbitrage Thomas Peterffy did with similar stock indexes in disparate markets—except Spivey had to do it a lot faster.

The more he learned, the more he believed it was possible to build a new, private dark fiber pipe between Chicago and New York. Most important, Spivey had devised a way to make his line shorter than existing paths of fiber between the two cities. These lines followed railroad rights-of-way for their entire route. Telecom companies like such paths because they require dealing with just one or two different entities, usually rail companies, to get between Chicago and New York. But the major rail corridors take a slight detour south in Pennsylvania and New Jersey. Spivey’s proposed path would leave Chicago, nudge around the tip of Lake Michigan, and fire straight east toward New York with no detours.


pages: 356 words: 105,533

Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market by Scott Patterson

Alan Greenspan, algorithmic trading, automated trading system, banking crisis, bash_history, Bear Stearns, Bernie Madoff, Black Monday: stock market crash in 1987, butterfly effect, buttonwood tree, buy and hold, Chuck Templeton: OpenTable:, cloud computing, collapse of Lehman Brothers, computerized trading, creative destruction, Donald Trump, financial engineering, fixed income, Flash crash, Ford Model T, Francisco Pizarro, Gordon Gekko, Hibernia Atlantic: Project Express, High speed trading, information security, Jim Simons, Joseph Schumpeter, junk bonds, latency arbitrage, Long Term Capital Management, machine readable, Mark Zuckerberg, market design, market microstructure, Michael Milken, military-industrial complex, pattern recognition, payment for order flow, pets.com, Ponzi scheme, popular electronics, prediction markets, quantitative hedge fund, Ray Kurzweil, Renaissance Technologies, seminal paper, Sergey Aleynikov, Small Order Execution System, South China Sea, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stochastic process, three-martini lunch, Tragedy of the Commons, transaction costs, uptick rule, Watson beat the top human players on Jeopardy!, zero-sum game

A small group of elite high-speed traders in Chicago had started using microwaves to transmit trading signals at rates that dwarfed those boasted by fiber. First used to beam trades into the Chicago Mercantile Exchange, microwaves were now relaying trades between Chicago and New York through a series of microwave-station relays. The only problem: The signals could be disrupted by rainstorms or even geese. But the advantage was huge. According to industry estimates, microwaves could transmit a round-trip trade between Chicago and New York in ten milliseconds—a “whopping” three milliseconds faster than Spread Networks. The biggest firms were already using microwaves, insiders said, and more were coming onboard.

The phenomenon wasn’t confined to the United States—it was going global. In October 2010, just months after Spread Networks plugged into Nasdaq, fiber-optic companies Hibernia Atlantic, based in Summit, New Jersey, and Huawai Marine Networks, of Tianjin, China, announced a plan to lay the first transatlantic fiber-optic cable built in a decade, a half-billion-dollar project that was projected to cut five milliseconds off trades between New York and London. Once complete, the three-thousand-mile cable would stretch from Halifax, Nova Scotia, across the North Atlantic to Somerset, England. As with the Spread Networks cable, the route would be shorter than other cable providers had used because it would cross shallow waters, where cable can be damaged by everything from fishing trawlers to sharks, which are attracted by the line’s electricity.

THE Chicago Mercantile Exchange was straining under the pressure. Then, just before 2:43 Eastern time, a massive sell order for several thousand E-mini contracts hit the tape, eating right through the order book. At the exact same moment in New York, a massive wave of ETFs mirroring the S&P 500, the Nasdaq index, and the Dow industrials were sold. Research group Nanex would later theorize that the sell order came from the same firm capitalizing on a fourteen-millisecond delay in the time it took prices to move between Chicago and New York. It labeled the trade the Disruptor. BACK in Chicago, the giant hedge fund Citadel was seeing system errors in its programs.


pages: 200 words: 54,897

Flash Boys: Not So Fast: An Insider's Perspective on High-Frequency Trading by Peter Kovac

bank run, barriers to entry, bash_history, Bernie Madoff, compensation consultant, computerized markets, computerized trading, Flash crash, housing crisis, index fund, locking in a profit, London Whale, market microstructure, merger arbitrage, payment for order flow, prediction markets, price discovery process, proprietary trading, Sergey Aleynikov, Spread Networks laid a new fibre optics cable between New York and Chicago, transaction costs, zero day

Fortunately, in the surveillance state that is today’s stock market, such a violation would have to be pretty rare and pretty insignificant to avoid detection. Finding Proof (of something): CBSX Volume and Spread Networks The story Lewis tells about CBSX is a relatively small anecdote, but it neatly demonstrates both a conspiracy paranoia and a lack of real trading knowledge. As Lewis correctly notes, the Chicago-based CBOE Stock Exchange (CBSX) suddenly exploded with activity in late 2010 – specifically, trading in the stock of Sirius. Why? Katsuyama and Ryan put their heads together and figured out that it must be because Spread Networks’ new fiber-optic cable between Chicago and New York just became operational, yet again somehow proving in their minds that high-frequency traders were front-running the market through speed.

* * * [1] The only quotation I could find from anyone involved in high-frequency trading was about the fiber-optic network between New York and Chicago. Curiously, we never hear a word from this electronic trading firm (or any other) about actual trading. [2] Ronan Ryan, Chief Strategy Officer of IEX, as quoted in the article “IEX not anti-HFT, says founder,” John Bakie, The TRADE, April 9, 2014. [3] See “Exploratory Trading,” Adam Clark-Joseph, Job Market Paper, January 13, 2013 (emphasis added). [4] On an annualized basis, the five-year Spread Networks contract plus equipment would total approximately $2.8 million per year. It’s not clear why, but before the chapter ends this has become “tens of millions of dollars in entry fees.”

Remember the discussion in Chapter 3 about the surprising uptick in trading volume for shares of Sirius radio? Trading volume on the CBSX? Located in Chicago? That exchange is actually the exchange farthest from IEX – more than twenty times farther than the NYSE. Why, then, isn’t the delay 15,000 microseconds, the time it would take to send a signal to the CBSX? Wouldn’t this be doubly important, given Katsuyama and Ryan’s fervent belief that high-frequency traders were using the Spread Networks fiber-optic line to front-run everyone else on the CBSX? So, why not a 15,000 microsecond delay? The answer, again, is probably business concerns.


pages: 478 words: 126,416

Other People's Money: Masters of the Universe or Servants of the People? by John Kay

Affordable Care Act / Obamacare, Alan Greenspan, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Monday: stock market crash in 1987, Black Swan, Bonfire of the Vanities, bonus culture, book value, Bretton Woods, buy and hold, call centre, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, cognitive dissonance, Cornelius Vanderbilt, corporate governance, Credit Default Swap, cross-subsidies, currency risk, dematerialisation, disinformation, disruptive innovation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, Elon Musk, Eugene Fama: efficient market hypothesis, eurozone crisis, financial engineering, financial innovation, financial intermediation, financial thriller, fixed income, Flash crash, forward guidance, Fractional reserve banking, full employment, George Akerlof, German hyperinflation, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Greenspan put, Growth in a Time of Debt, Ida Tarbell, income inequality, index fund, inflation targeting, information asymmetry, intangible asset, interest rate derivative, interest rate swap, invention of the wheel, Irish property bubble, Isaac Newton, it is difficult to get a man to understand something, when his salary depends on his not understanding it, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jim Simons, John Meriwether, junk bonds, light touch regulation, London Whale, Long Term Capital Management, loose coupling, low cost airline, M-Pesa, market design, Mary Meeker, megaproject, Michael Milken, millennium bug, mittelstand, Money creation, money market fund, moral hazard, mortgage debt, Myron Scholes, NetJets, new economy, Nick Leeson, Northern Rock, obamacare, Occupy movement, offshore financial centre, oil shock, passive investing, Paul Samuelson, Paul Volcker talking about ATMs, peer-to-peer lending, performance metric, Peter Thiel, Piper Alpha, Ponzi scheme, price mechanism, proprietary trading, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, railway mania, Ralph Waldo Emerson, random walk, reality distortion field, regulatory arbitrage, Renaissance Technologies, rent control, risk free rate, risk tolerance, road to serfdom, Robert Shiller, Ronald Reagan, Schrödinger's Cat, seminal paper, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, sovereign wealth fund, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, Steve Wozniak, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tobin tax, too big to fail, transaction costs, tulip mania, Upton Sinclair, Vanguard fund, vertical integration, Washington Consensus, We are the 99%, Yom Kippur War

‘High-frequency trading’ is undertaken by computers which are constantly offering to buy and sell securities. The interval for which these securities are held by their owner may – literally – be shorter than the blink of an eye. Spread Networks, a telecoms provider, has recently built a link through the Appalachian Mountains to reduce the time taken to transmit data between New York and Chicago by a little less than one millisecond. World trade has grown rapidly, but trading in foreign exchange has grown much faster. The value of daily foreign exchange transactions is almost a hundred times the value of daily international trade in goods and services.

., 2003, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, New York, Penguin. Meeker, M., 1995, The Internet Report, New York, Morgan Stanley. Megginson, W.L., and Netter, J.M., 2001, ‘From State to Market: A Survey of Empirical Studies on Privatization’, Journal of Economic Literature, 39 (2), June, pp. 321–89. Mian, A., and Sufi, A., 2014, House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again, Chicago and London, The University of Chicago Press. Miles, D.K., Yang, J., and Marcheggiano, G., 2013, ‘Optimal Bank Capital’, The Economic Journal, 123 (567), pp. 1–37.

This realisation of goodwill happened to businesses as different as Goldman Sachs – whose partnership became a limited company in 1999, making some partners millionaires several hundred times over – and Halifax Building Society, the largest mortgage lender in Britain (and the world), which converted from a mutual to a listed company in 1997, distributing shares with a total value of almost £20 billion to some 8 million people. Exchanges such as the Chicago Mercantile Exchange and the New York and London stock exchanges transformed themselves from membership organisations into listed companies. They became business organisations with revenue and profit objectives of their own, rather than utilities providing services to their members. They sought to attract business by facilitating and promoting trading, and found themselves in competition with the new trading mechanisms facilitated by new information technology and by deregulation, which removed exchange monopolies.


pages: 342 words: 94,762

Wait: The Art and Science of Delay by Frank Partnoy

algorithmic trading, Atul Gawande, behavioural economics, Bernie Madoff, Black Swan, blood diamond, Cass Sunstein, Checklist Manifesto, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, computerized trading, corporate governance, cotton gin, Daniel Kahneman / Amos Tversky, delayed gratification, Flash crash, Frederick Winslow Taylor, George Akerlof, Google Earth, Hernando de Soto, High speed trading, impulse control, income inequality, information asymmetry, Isaac Newton, Long Term Capital Management, Menlo Park, mental accounting, meta-analysis, MITM: man-in-the-middle, Nick Leeson, paper trading, Paul Graham, payday loans, Pershing Square Capital Management, Ralph Nader, Richard Thaler, risk tolerance, Robert Shiller, Ronald Reagan, Saturday Night Live, scientific management, six sigma, social discount rate, Spread Networks laid a new fibre optics cable between New York and Chicago, Stanford marshmallow experiment, statistical model, Steve Jobs, systems thinking, The Market for Lemons, the scientific method, The Wealth of Nations by Adam Smith, upwardly mobile, Walter Mischel, work culture

Consider this extreme example: one of the most popular fiber-optic cable routes for carrying securities trades runs between Chicago, where most options and futures are traded, to New York, where most stocks are traded. Many firms are perfectly content to send their ChicagoNew York trades along the cables that zig and zag along old railroad tracks running through Indiana, Ohio, and Pennsylvania. They don’t care much if their trades arrive a few milliseconds faster, any more than we would care if a package sent by overnight mail arrived at 8:59 AM instead of 9:00 AM. But other firms demand a faster route, and this demand led a company, Spread Networks, to spend two years and several hundred million dollars digging a new straight-shot trench from Chicago to New York.

But other firms demand a faster route, and this demand led a company, Spread Networks, to spend two years and several hundred million dollars digging a new straight-shot trench from Chicago to New York. It costs a fortune to send trades through the cables along this more direct new route, like a superfast version of Federal Express, but many firms are willing to pay to minimize latency. After all, they save three whole milliseconds.4 Why are three milliseconds so important? For some traders, having an electronic buy or sell order arrive first can be the difference between making money and losing money. If only one share is available at a low price, the first buy order to arrive will secure that price. Any later orders might pay more.

Although UNX’s new trading platform was a huge success, he thought they could do even better by moving their computers three thousand miles from Burbank to New York, closer to the trading facilities of the New York Stock Exchange and NASDAQ, where most trades were completed. At the time, few people had focused on the travel time of trades. But Harrison understood that geography was causing delay: even at the speed of light, it was taking UNX’s orders a relatively long time to move across the country. He studied UNX’s transaction speeds and noticed that it took about sixty-five milliseconds from when trades entered UNX’s computers until they were completed in New York. About half of that time was coast-to-coast travel.


pages: 282 words: 80,907

Who Gets What — and Why: The New Economics of Matchmaking and Market Design by Alvin E. Roth

Affordable Care Act / Obamacare, Airbnb, algorithmic trading, barriers to entry, behavioural economics, Berlin Wall, bitcoin, Build a better mousetrap, centralized clearinghouse, Chuck Templeton: OpenTable:, commoditize, computer age, computerized markets, crowdsourcing, deferred acceptance, desegregation, Dutch auction, experimental economics, first-price auction, Flash crash, High speed trading, income inequality, Internet of things, invention of agriculture, invisible hand, Jean Tirole, law of one price, Lyft, market clearing, market design, medical residency, obamacare, PalmPilot, proxy bid, road to serfdom, school choice, sealed-bid auction, second-price auction, second-price sealed-bid, Silicon Valley, spectrum auction, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, The Wealth of Nations by Adam Smith, two-sided market, uber lyft, undersea cable

Just as important, it takes a few milliseconds for news of a price change in Chicago to reach traders in New York, and vice versa. Put another way, when the price of SPY or ES changes in one city, there can be a few milliseconds of lag time in which someone who has heard the news can buy cheap on one market and sell at a higher price on the other. How fast do you have to be to make money this way? Before 2010, market news between Chicago and New York was transmitted fastest on cables that ran along the rights-of-way of roads and railways. But that year, a company called Spread Networks spent hundreds of millions of dollars to build a high-speed fiber-optic cable that went in a much straighter line and cut round-trip transmission of information and orders from 16 milliseconds to just 13.

A Game of (Milli)Seconds Not far from where wheat futures are traded at the Chicago Board of Trade, there’s another marketplace, the Chicago Mercantile Exchange. And near them both, at the University of Chicago, an innovative market designer named Eric Budish (a former student of mine) has been thinking about high-speed trading at both exchanges. Budish is looking at the growing use of computerized algorithms and how they influence financial markets. He’s also looking at how changes in the design of financial marketplaces might help solve some of their long-standing structural problems. The Chicago Mercantile Exchange is a lot like the New York Stock Exchange.

See also smartphones central planning, 7, 149–50, 166–67 Chain, Ernst, 134 chains. See kidney transplants cheap talk, 176–77 checks (bank), 23 Chen, Yan, 127–28, 241, 243 Cherokee Strip Land Run, 57–58 Chicago Board of Trade, 16–17, 82 Chicago Mercantile Exchange, 82 China, school matching in, 165–66 Civil War, 203 clearinghouses. See also National Resident Matching Program (NRMP) for British medical interns, 140–41 for medical residencies, 136–50 New York City school system, 112 in New York school choice program, 155–61 preferences information for, 34 stable outcomes with, 139–43 trading cycles and, 32–41 Coca-Cola, 25 coercion, 203, 208 coffee, 17–19 Coles, Peter, 244 college admissions, 5–6 acceptance rates in, 172 campus visits in, 178 deferred acceptance algorithm in, 141–43 early, 171–72 signaling in, 169, 170–73 strategic decision making in, 10 “College Admissions and the Stability of Marriage” (Gale & Shapley), 141–43, 158, 241, 242 college bowl games, 59–65 College Football Playoff, 64 Commodity Futures Trading Commission, 85 commodity markets, 228 coffee, 17–19 congestion in, 111–12 differentiation and, 18–20 financial, 82–89 grading systems for, 16–18 markets for, 5 price-based markets for, 9–10 standardization of, 17–18, 19–20 wheat, 15–17 Common Application, 170–73 communication, 169–92.


pages: 320 words: 87,853

The Black Box Society: The Secret Algorithms That Control Money and Information by Frank Pasquale

Adam Curtis, Affordable Care Act / Obamacare, Alan Greenspan, algorithmic trading, Amazon Mechanical Turk, American Legislative Exchange Council, asset-backed security, Atul Gawande, bank run, barriers to entry, basic income, Bear Stearns, Berlin Wall, Bernie Madoff, Black Swan, bonus culture, Brian Krebs, business cycle, business logic, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chelsea Manning, Chuck Templeton: OpenTable:, cloud computing, collateralized debt obligation, computerized markets, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, crowdsourcing, cryptocurrency, data science, Debian, digital rights, don't be evil, drone strike, Edward Snowden, en.wikipedia.org, Evgeny Morozov, Fall of the Berlin Wall, Filter Bubble, financial engineering, financial innovation, financial thriller, fixed income, Flash crash, folksonomy, full employment, Gabriella Coleman, Goldman Sachs: Vampire Squid, Google Earth, Hernando de Soto, High speed trading, hiring and firing, housing crisis, Ian Bogost, informal economy, information asymmetry, information retrieval, information security, interest rate swap, Internet of things, invisible hand, Jaron Lanier, Jeff Bezos, job automation, John Bogle, Julian Assange, Kevin Kelly, Kevin Roose, knowledge worker, Kodak vs Instagram, kremlinology, late fees, London Interbank Offered Rate, London Whale, machine readable, Marc Andreessen, Mark Zuckerberg, Michael Milken, mobile money, moral hazard, new economy, Nicholas Carr, offshore financial centre, PageRank, pattern recognition, Philip Mirowski, precariat, profit maximization, profit motive, public intellectual, quantitative easing, race to the bottom, reality distortion field, recommendation engine, regulatory arbitrage, risk-adjusted returns, Satyajit Das, Savings and loan crisis, search engine result page, shareholder value, Silicon Valley, Snapchat, social intelligence, Spread Networks laid a new fibre optics cable between New York and Chicago, statistical arbitrage, statistical model, Steven Levy, technological solutionism, the scientific method, too big to fail, transaction costs, two-sided market, universal basic income, Upton Sinclair, value at risk, vertical integration, WikiLeaks, Yochai Benkler, zero-sum game

Korean exchanges faced a smaller crash in late 2013. 129. For example, McCabe observes, a “Chicago-New York cable will shave about 3 milliseconds off . . . communication time.” Thomas McCabe, “When the Speed of Light Is Too Slow: Trading at the Edge,” Kurzweil Accelerating Intelligence (blog), November 11, 2010, http://www.kurzweilai.net /when-the -speed-of-light-is-too-slow. 130. This story opens Michael Lewis, Flash Boys (New York: W.W. Norton, 2014), 15. Economic sociologists have also studied Spread Networks. Donald Mackenzie et al., “Drilling Through the Allegheny Mountains: Liquidity, Materiality and High-Frequency Trading” ( Jan., 2012), at http://www.sps.ed .ac.uk /__data /assets/pdf_file/0003/78186/LiquidityResub8.pdf. 131.

The Computerized Market HFT is the ultimate in fi nancial self-reference, where perceptions of value come entirely from signals encoded on trading terminals. Lately, the limiting factor in fast trading the speed of light in fiber optic cables. Thus fi rms are paying to construct ultrafast cables between fi nancial centers.129 Spread Networks spent over $200 million to lay a cable between Chicago and New York-area exchanges, estimating that fi rms could make $20 billion in a year exploiting price discrepancies (lasting less than a second) between the two cities.130 Modelers have devised more extreme solutions to the time delay problem. An “optimal scheme” would “push trading fi rms to build new computers [at] the exact, optimal points in between markets”— even if that happened to be in the middle of an ocean.131 How does this minuscule speed advantage help?

Marx W. Wartofsky, Conceptual Foundations of Scientifi c Thought (New York: Macmillan, 1968). 130. Alice Goffman, On the Run: Fugitive Life in an American City (Chicago: University of Chicago Press, 2014); Matt Taibbi, The Divide (New York: Spiegel & Grau, 2014). 131. As Charles Taylor puts it, “By ‘brute data’ I mean . . . data whose validity cannot be questioned by offering another interpretation or reading. . . .” Taylor, Philosophical Papers, Vol. II, 19. 132. Harcourt, Against Prediction, 156. 133. See, e.g., Floyd v. City of New York, Case No. 1:08-cv-01034-SAS-HBP (Aug. 12, 2013), 58. Available at http://ccrjustice.org/files/Floyd-Liability-Opinion -8-12-13.pdf.


pages: 484 words: 104,873

Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford

3D printing, additive manufacturing, Affordable Care Act / Obamacare, AI winter, algorithmic management, algorithmic trading, Amazon Mechanical Turk, artificial general intelligence, assortative mating, autonomous vehicles, banking crisis, basic income, Baxter: Rethink Robotics, Bernie Madoff, Bill Joy: nanobots, bond market vigilante , business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Charles Babbage, Chris Urmson, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, computer age, creative destruction, data science, debt deflation, deep learning, deskilling, digital divide, disruptive innovation, diversified portfolio, driverless car, Erik Brynjolfsson, factory automation, financial innovation, Flash crash, Ford Model T, Fractional reserve banking, Freestyle chess, full employment, general purpose technology, Geoffrey Hinton, Goldman Sachs: Vampire Squid, Gunnar Myrdal, High speed trading, income inequality, indoor plumbing, industrial robot, informal economy, iterative process, Jaron Lanier, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Kenneth Arrow, Khan Academy, Kiva Systems, knowledge worker, labor-force participation, large language model, liquidity trap, low interest rates, low skilled workers, low-wage service sector, Lyft, machine readable, machine translation, manufacturing employment, Marc Andreessen, McJob, moral hazard, Narrative Science, Network effects, new economy, Nicholas Carr, Norbert Wiener, obamacare, optical character recognition, passive income, Paul Samuelson, performance metric, Peter Thiel, plutocrats, post scarcity, precision agriculture, price mechanism, public intellectual, Ray Kurzweil, rent control, rent-seeking, reshoring, RFID, Richard Feynman, Robert Solow, Rodney Brooks, Salesforce, Sam Peltzman, secular stagnation, self-driving car, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, single-payer health, software is eating the world, sovereign wealth fund, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, Steven Pinker, strong AI, Stuxnet, technological singularity, telepresence, telepresence robot, The Bell Curve by Richard Herrnstein and Charles Murray, The Coming Technological Singularity, The Future of Employment, the long tail, Thomas L Friedman, too big to fail, Tragedy of the Commons, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, union organizing, Vernor Vinge, very high income, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, women in the workforce

Indeed, speed—in some cases measured in millionths or even billionths of a second—is so critical to algorithmic trading success that Wall Street firms have collectively invested billions of dollars to build computing facilities and communications paths designed to produce tiny speed advantages. In 2009, for example, a company called Spread Networks spent as much as $200 million to lay down a new fiber-optic cable link stretching 825 miles in a straight line from Chicago to New York. The company operated in stealth mode so as not to alert the competition even as it blasted its way through the Allegheny Mountains. When the new fiber-optic path came online, it offered a speed advantage of perhaps three or four thousandths of a second compared with existing communications routes.

David Von Drehle, “The Robot Economy,” Time, September 9, 2013, pp. 44–45. 20. Andrew Harris, “Chicago Cabbies Sue Over Unregulated Uber, Lyft Services,” Bloomberg News, February 6, 2014, http://www.bloomberg.com/news/2014–02–06/chicago-cabbies-sue-over-unregulated-uber-lyft-services.html. CHAPTER 8 1. For statistics on consumer spending, see Nelson D. Schwartz, “The Middle Class Is Steadily Eroding. Just Ask the Business World,” New York Times, February 2, 2014, http://www.nytimes.com/2014/02/03/business/the-middle-class-is-steadily-eroding-just-ask-the-business-world.html. 2. Rob Cox and Eliza Rosenbaum, “The Beneficiaries of the Downturn,” New York Times, December 28, 2008, http://www.nytimes.com/2008/12/29/business/29views.html.

Erik Brynjolfsson, “Race Against the Machine,” presentation to the President’s Council of Advisors on Science and Technology (PCAST), May 3, 2013, http://www.whitehouse.gov/sites/default/files/microsites/ostp/PCAST/PCAST_May3_Erik%20Brynjolfsson.pdf, p. 28. 9. Claire Cain Miller and Chi Birmingham, “A Vision of the Future from Those Likely to Invent It,” New York Times (The Upshot), May 2, 2014, http://www.nytimes.com/interactive/2014/05/02/upshot/FUTURE.html. 10. F. A. Hayek, Law, Legislation and Liberty, Volume 3: The Political Order of a Free People (Chicago: University of Chicago Press, 1979), pp. 54–55. 11. Ibid., p. 55. 12. John Schmitt, Kris Warner, and Sarika Gupta, “The High Budgetary Cost of Incarceration,” Center for Economic and Policy Research, June 2010, http://www.cepr.net/documents/publications/incarceration-2010–06.pdf. 13.


pages: 600 words: 72,502

When More Is Not Better: Overcoming America's Obsession With Economic Efficiency by Roger L. Martin

activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, autism spectrum disorder, banking crisis, Black Monday: stock market crash in 1987, butterfly effect, call centre, cloud computing, complexity theory, coronavirus, COVID-19, David Ricardo: comparative advantage, do what you love, Edward Lorenz: Chaos theory, financial engineering, Frederick Winslow Taylor, Glass-Steagall Act, High speed trading, income inequality, industrial cluster, inflation targeting, Internet of things, invisible hand, Lean Startup, low interest rates, Lyft, Mark Zuckerberg, means of production, Network effects, new economy, obamacare, open economy, Phillips curve, Pluto: dwarf planet, power law, Renaissance Technologies, Richard Florida, Ronald Reagan, scientific management, shareholder value, Silicon Valley, Snapchat, Spread Networks laid a new fibre optics cable between New York and Chicago, Tax Reform Act of 1986, The future is already here, the map is not the territory, The Wealth of Nations by Adam Smith, Tobin tax, Toyota Production System, transaction costs, trickle-down economics, two-sided market, uber lyft, very high income, Vilfredo Pareto, zero-sum game

It also shows that as the markets become more complex and technologically enabled, the cumulative small advantages that come from high-frequency trading are creating more and more of a gap between those players with the capital and know-how to engage in high-speed trading and those without. Spread Networks, for example, invested hundreds of millions of dollars to build a fiber-optic link along the shortest route between the NYSE and the Chicago Board of Trade. The link cut transmission time to an estimated 13.3 milliseconds. But that is a proverbial slow boat to China compared with the two microwave networks under construction, which promise to cut the time down to 8 to 9 milliseconds, because microwave is more direct than fiber-optical cable.15 As all these clever adaptations and the ensuing adaptations to the adaptations take place, we gradually see the stock market losing sight of its original purpose, which was to help companies issue stock to the public in order to enable the companies to grow their businesses.

The mergers of the capital-market exchanges, for example, have lowered the cost of connecting one equity pool to the next, while regulations such as the Financial Industry Regulatory Authority (FINRA) Rule 5310, which requires all trades to be routed to the market that has the best current price for the security, are forcing markets to interconnect seamlessly, thereby reducing the costs of connection to zero. With microwave towers now connecting the Chicago Board of Trade to the New York Stock Exchange, arbitrage between the two markets has become virtually nonexistent. Forced salary disclosure by the Securities and Exchange Commission of the five top-paid executives of publicly traded companies means that, for example, the compensation of our company’s CEO is seamlessly connected to and comparable with the compensation of every public-company CEO in the country, meaning that if those salaries go up, there will be instant upward pressure on the compensation of our CEO.

., the municipality—then funds as many of the projects as its budget allows, following the order of priority established by community votes.26 Participatory budgeting began in Porto Alegre, Brazil, in 1989 but has spread to more than three thousand cities around the world since then, including New York City, which tested out a participatory-budgeting program in 2012 and has spent $210 million on 706 different community projects since then. In 2018, just under one hundred thousand residents participated in the program to allocate $36 million for investments in schools, parks, and libraries.27 While small in the overall picture, participatory budgeting has shown the capacity for getting more citizens involved in the day-to-day processes of politics, especially citizens for whom participation has generally seemed futile. In the New York process, almost twice the proportion of families with household income under $35,000 took part in participatory budgeting as voted in municipal elections.


pages: 301 words: 85,263

New Dark Age: Technology and the End of the Future by James Bridle

AI winter, Airbnb, Alfred Russel Wallace, AlphaGo, Anthropocene, Automated Insights, autonomous vehicles, back-to-the-land, Benoit Mandelbrot, Bernie Sanders, bitcoin, Boeing 747, British Empire, Brownian motion, Buckminster Fuller, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, coastline paradox / Richardson effect, cognitive bias, cognitive dissonance, combinatorial explosion, computer vision, congestion charging, cryptocurrency, data is the new oil, disinformation, Donald Trump, Douglas Engelbart, Douglas Engelbart, Douglas Hofstadter, Dr. Strangelove, drone strike, Edward Snowden, Eyjafjallajökull, Fairchild Semiconductor, fake news, fear of failure, Flash crash, fulfillment center, Google Earth, Greyball, Haber-Bosch Process, Higgs boson, hive mind, income inequality, informal economy, Internet of things, Isaac Newton, ITER tokamak, James Bridle, John von Neumann, Julian Assange, Kickstarter, Kim Stanley Robinson, Large Hadron Collider, late capitalism, Laura Poitras, Leo Hollis, lone genius, machine translation, mandelbrot fractal, meta-analysis, Minecraft, mutually assured destruction, natural language processing, Network effects, oil shock, p-value, pattern recognition, peak oil, recommendation engine, road to serfdom, Robert Mercer, Ronald Reagan, security theater, self-driving car, Seymour Hersh, Silicon Valley, Silicon Valley ideology, Skype, social graph, sorting algorithm, South China Sea, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, stem cell, Stuxnet, technoutopianism, the built environment, the scientific method, Uber for X, undersea cable, University of East Anglia, uranium enrichment, Vannevar Bush, warehouse robotics, WikiLeaks

In 2009–10, one company spent $300 million to build a private fibre link between the Chicago Mercantile Exchange and Carteret, New Jersey, home of the NASDAQ exchange.5 They closed roads, they dug trenches, they bored through mountains, and they did it all in secret, so that no competitors discovered their plan. By shortening the physical distance between the sites, Spread Networks reduced the time it took a message to get between the two data centres from seventeen milliseconds to thirteen – resulting in a saving of about $75 million per millisecond. In 2012, another firm, McKay Brothers, opened a second dedicated New YorkChicago connection. This time it used microwaves, which travel through the air faster than light through glass fibre.

A free health service is pure Socialism and as such it is opposed to the hedonism of capitalist society.’11 In 2013, Hillingdon Council approved a planning application from a company called Decyben SAS to place four half-metre microwave dishes and an equipment cabinet atop the hospital building. A Freedom of Information request filed in 2017 revealed that Decyben is a front for McKay, the same company that built the millisecond-shaving microwave link between Chicago and New York.12 In addition, site licences have been granted to Vigilant Telecom – a Canadian high-frequency bandwidth supplier – and to the London Stock Exchange itself. Hillingdon Hospitals NHS Foundation Trust refused to publish the details of the commercial arrangements between itself and its electromagnetic tenants, citing commercial interests.

In what could be taken as the founding statement of computational thought, he wrote: ‘All stable processes we shall predict. All unstable processes we shall control.’14 In January 1947, von Neumann and Zworykin shared a stage in New York at a joint session of the American Meteorological Society and the Institute of the Aeronautical Sciences. Von Neumann’s talk on ‘Future Uses of High Speed Computing in Meteorology’ was followed by Zworykin’s ‘Discussion of the Possibility of Weather Control’. The next day, the New York Times reported on the conference under the headline ‘Weather to Order’, commenting that ‘if Dr Zworykin is right the weather-makers of the future are the inventors of calculating machines’.15 In 1947, the inventor of calculating machines par excellence was von Neumann himself, having founded the Electronic Computer Project at Princeton two years previously.


pages: 369 words: 121,161

Alistair Cooke's America by Alistair Cooke

Albert Einstein, Alistair Cooke, British Empire, Charles Lindbergh, company town, Cornelius Vanderbilt, cotton gin, double entry bookkeeping, Ford Model T, full employment, Gunnar Myrdal, Hernando de Soto, imperial preference, interchangeable parts, joint-stock company, Maui Hawaii, Ralph Nader, Ralph Waldo Emerson, Spread Networks laid a new fibre optics cable between New York and Chicago, strikebreaker, The Wealth of Nations by Adam Smith, transcontinental railway, Triangle Shirtwaist Factory, urban sprawl, wage slave, Works Progress Administration

This was the first of four lakes – Michigan, Huron, Erie, and Ontario – that were linked with canals to the north and east, giving clear access all the way from the Atlantic, fifteen hundred miles away, to the western shore of Lake Michigan. At that point, at Chicago, there was a snag – literally, an obstacle that impeded navigation. Between a bend in the Chicago River and the lake there was a sand bar. Once they cut through it, Chicago had a harbor. This was done in 1833, when the place was a squatter settlement of two hundred souls. When the canal opened, the usual horde swept in: disappointed factory workers from the East, refugee farmers from the rocky soil of New England, immigrants from Europe. Two years later, when the traffic of the Lakes was beginning to hum, a thirty-year-old hustler from New York State arrived. William Ogden was an orphan, but of comfortable means, who had got out of school as soon as he could and at fifteen was already dabbling in real estate.

William Ogden was an orphan, but of comfortable means, who had got out of school as soon as he could and at fifteen was already dabbling in real estate. He fancied, he once said, ‘I could do anything I turned my hand to, and that nothing was impossible.’ He entered the New York State Legislature on an election promise to build the New York and Eric railroad. But a land company excited him with tales of the boom-to-be along the shore of Lake Michigan, and in 1835 he went to look over a patch of Chicago land his brother-in-law had bought. He was as exhilarated, at a distance, as the Northerners who were sold a slice of paradise in the Florida land boom of the 1920s. They found their plots were underwater and sometimes under the sea.

Ogden gambled on the furious growth of the city and in 1841, six years after he’d arrived, the first bumper crop on the prairie paid him off. Wagons brought the crops and the livestock into Chicago; and steamboats, brigs, and schooners carried them to New York and then to Europe. In only nine years Chicago had gone from a marshy village of two hundred squatters to the largest grain market in the world. It became the reception center for all the harvests and the livestock of the prairie. It is still the stock exchange of the American farmer. Every Wednesday, on the floor of the Chicago Commodity Exchange, there is a deafening frenzy of bidding that will be filtered, at twilight, over thousands of radio stations, into a few laconic phrases: ‘Wheat up one point, corn down three eighths, soybeans steady.’


pages: 759 words: 166,687

Between Human and Machine: Feedback, Control, and Computing Before Cybernetics by David A. Mindell

Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, Charles Babbage, Charles Lindbergh, Claude Shannon: information theory, Computer Numeric Control, discrete time, Dr. Strangelove, Frederick Winslow Taylor, From Mathematics to the Technologies of Life and Death, James Watt: steam engine, John von Neumann, Lewis Mumford, Menlo Park, military-industrial complex, Neil Armstrong, Norbert Wiener, Paul Samuelson, public intellectual, Ronald Reagan, scientific management, Silicon Valley, Spread Networks laid a new fibre optics cable between New York and Chicago, tacit knowledge, telerobotics, Turing machine

In Tooling for War: Military Transformation in the Industrial Age , ed. Stephen D. Chiabotti, 49–96. Chicago: Imprint, 1996. Svoboda, Antonin. Computing Mechanisms and Linkages . Radiation Laboratory Series, 27. New York: McGraw-Hill, 1948. Taylor, Frederick Winslow. The Principles of Scientific Management . New York: Harper & Brothers, 1911. Tellegen, B. D. H. “Inverse Feedback.” Phillips Technical Review 2 (October 1937): 289–94. Terman, Frederick Emmons. Radio Engineer’s Handbook . New York: McGraw-Hill, 1943. Thompson, Emily. The Soundscape of Modernity . Cambridge: MIT Press, forthcoming.

Long distance was the key to expanding that share, since competing local operators could not offer the service. The Bell System thus followed its own frontier on a western expansion, often along the tracks of the railroads and the telegraph. From the turn of the century until the 1930s, AT&T expressed its technical milestones in geographical terms: the New YorkChicago line represented carrier frequency transmission; the New York–San Francisco transcontinental line represented vacuum tube repeaters; the Morristown trial simulated the entire country and represented the negative feedback amplifier. “People assimilated telephony into their minds as if into their bodies,” wrote the telephone historian John Brooks, “as if it were the result of a new step in human evolution that increased the range of their voices to the limits of the national map.” 4 Despite its continental ambitions, the telephone network at the turn of the century remained a passive device, as it had been since the time of Alexander Graham Bell.

“Stokowski and the Bell Telephone Laboratories: Collaboration in the Development of High-Fidelity Sound Reproduction.” Technology and Culture 24, no. 1 (1983): 43. McLeod, John, ed. Simulation: The Dynamic Modeling of Ideas and Systems with Computers . New York: McGraw-Hill, 1968. McNeill, William H. The Pursuit of Power: Technology Armed Force and Society since A.D. 1000 . Chicago: University of Chicago Press, 1982. McSwain, Rebecca. “The Social Reconstruction of a Reverse Salient in Electric Guitar Technology: Noise, the Solid Body, and Jimi Hendrix.” In “I Sing the Body Electric”: Music and Technology in the Twentieth Century , ed.


pages: 443 words: 112,800

The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World by Jeremy Rifkin

3D printing, additive manufacturing, Albert Einstein, American ideology, An Inconvenient Truth, barriers to entry, behavioural economics, bike sharing, borderless world, carbon footprint, centre right, clean tech, collaborative consumption, collaborative economy, Community Supported Agriculture, corporate governance, decarbonisation, deep learning, distributed generation, electricity market, en.wikipedia.org, energy security, energy transition, Ford Model T, global supply chain, Great Leap Forward, high-speed rail, hydrogen economy, income inequality, industrial cluster, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, job automation, knowledge economy, manufacturing employment, marginal employment, Martin Wolf, Masdar, megacity, Mikhail Gorbachev, new economy, off grid, off-the-grid, oil shale / tar sands, oil shock, open borders, peak oil, Ponzi scheme, post-oil, purchasing power parity, Ray Kurzweil, rewilding, Robert Solow, Ronald Reagan, scientific management, scientific worldview, Silicon Valley, Simon Kuznets, Skype, smart grid, smart meter, Spread Networks laid a new fibre optics cable between New York and Chicago, supply-chain management, systems thinking, tech billionaire, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, transaction costs, trickle-down economics, urban planning, urban renewal, Yom Kippur War, Zipcar

Bureau of the Census Library, pp. 718, 721. 4.Stover, J. F. (1961). American Railroads. Chicago: University of Chicago Press, p. 135; Ripley, W. Z. (1912). Chapters 14–15. In Railroads: Rates and Regulations. New York: Longmans, Green, and Co. 5.Chandler, A. D., Jr. (1977). Revolution in Transportation and Communication. In The Visible Hand: The Managerial Revolution in American Business. Cambridge, MA: Belknap Press, p. 120. 6.Malone, D. (1946). Dictionary of American Biography (Vol. VII). New York: Ch. Scribner’s Sons, p. 461; Burgess, G. H., Kennedy M. C., “Centennial History of the Pennsylvania Railroad 1846–1946” (1949), The Pennsylvania Railroad Company, Philadelphia, pp. 514–515. 7.Taylor, F. (1947).

Unfortunately, the current trend is toward depopulation of the city center and flight to suburban enclaves because of a lack of modern housing, severe traffic congestion, and air pollution. Although central Rome has a shortage of social housing, it has a surplus of office space. Therefore, our urban design group proposed that Rome convert now-defunct commercial buildings into new residential blocks—as both New York City and Chicago have done before—using innovative architectural techniques that echo some of the best elements of ancient Roman building design. The plan calls for leaving the historical facades intact to preserve the architectural heritage of central Rome, while excavating the central core of buildings to make room for communal gardens, like those of ancient Roman villas.

Vertical economies of scale became the defining feature of the incipient industrial age and gigantic business operations became the norm. New businesses patterned after the railroad and telegraph organizational structures began to proliferate. Mass wholesalers emerged after the Civil War, followed by mass retailers, like Marshall Field’s in Chicago, Macy’s in New York, and Wanamaker’s in Philadelphia. Mail-order houses like Montgomery Ward and Sears, Roebuck and Co. appeared around the same time. The first national grocery chains—Grand Union, Kroger, Jewel Tea Company, and the Great Western Tea Company—took advantage of the new continental rail links and began consolidating their power over the food chain.


pages: 796 words: 223,275

The WEIRDest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous by Joseph Henrich

agricultural Revolution, Bartolomé de las Casas, behavioural economics, British Empire, charter city, cognitive dissonance, Columbian Exchange, correlation does not imply causation, cotton gin, Daniel Kahneman / Amos Tversky, dark matter, delayed gratification, discovery of the americas, Edward Glaeser, en.wikipedia.org, endowment effect, epigenetics, European colonialism, experimental economics, financial innovation, Flynn Effect, fundamental attribution error, glass ceiling, income inequality, invention of agriculture, Isaac Newton, James Hargreaves, James Watt: steam engine, Johannes Kepler, John Snow's cholera map, joint-stock company, knowledge economy, land reform, longitudinal study, Menlo Park, mental accounting, meta-analysis, New Urbanism, pattern recognition, Pearl River Delta, profit maximization, randomized controlled trial, Republic of Letters, rolodex, social contagion, social web, sparse data, spinning jenny, Spread Networks laid a new fibre optics cable between New York and Chicago, Stanford marshmallow experiment, tacit knowledge, The Wealth of Nations by Adam Smith, theory of mind, trade route, Tyler Cowen, ultimatum game, wikimedia commons, working-age population, World Values Survey, zero-sum game

., and Dexter, E. (2012). Literacy and Mothering: How Women’s Schooling Changes the Lives of the World’s Children. New York: Oxford University Press. Levine, R. N. (2008). A Geography of Time: On Tempo, Culture, and the Pace of Life. New York: Basic Books. Levine, R. V., and Norenzayan, A. (1999). The pace of life in 31 countries. Journal of Cross-Cultural Psychology 30 (2), 178–205. Levy, R. I. (1973). Tahitians: Mind and Experience in the Society Islands. Chicago: University of Chicago Press. Lewer, J. J., and Van den Berg, H. (2007). Religion and international trade: Does the sharing of a religious culture facilitate the formation of trade networks?

Lerner and S. Stern (eds.), The Rate and Direction of Inventive Activity Revisited (pp. 443–79). Chicago: University of Chicago Press. Menke, T. (1880). Europe according to its ecclesiastical circumstances in the Middle Ages. In Hand Atlas for the History of the Middle Ages and Later (3rd ed.). Gotha, Germany: Justus Perthes. Merton, R. K. (1938). Science, technology and society in seventeenth century England. Osiris 4, 360–632. Meyers, M. A. (2007). Happy Accidents: Serendipity in Modern Medical Breakthroughs. New York: Arcade. Mikalson, J. D. (2010). Ancient Greek Religion. Hoboken, NJ: Wiley-Blackwell.

Hoboken, NJ: Wiley-Blackwell. Milgram, S. (1963). Behavioral study of obedience. Journal of Abnormal and Social Psychology 67 (4), 371–78. Miller, W. I. (2009). Bloodtaking and Peacemaking: Feud, Law, and Society in Saga Iceland. Chicago: University of Chicago Press. Mintz, S. W. (1986). Sweetness and Power: The Place of Sugar in Modern History. New York: Penguin. Mischel, W., Ayduk, O., Berman, M. G., Casey, B. J., Gotlib, I. H., Jonides, J.,… Shoda, Y. (2011). “Willpower” over the life span: Decomposing self-regulation. Social Cognitive and Affective Neuroscience 6 (2), 252–56. Mischel, W., Shoda, Y., and Rodriguez, M.


pages: 859 words: 204,092

When China Rules the World: The End of the Western World and the Rise of the Middle Kingdom by Martin Jacques

Admiral Zheng, An Inconvenient Truth, Asian financial crisis, Bear Stearns, Berlin Wall, Bob Geldof, Bretton Woods, BRICs, British Empire, classic study, credit crunch, Dava Sobel, deindustrialization, Deng Xiaoping, deskilling, discovery of the americas, Doha Development Round, energy security, European colonialism, failed state, Fall of the Berlin Wall, flying shuttle, Francis Fukuyama: the end of history, global reserve currency, global supply chain, Great Leap Forward, illegal immigration, income per capita, invention of gunpowder, James Watt: steam engine, joint-stock company, Kenneth Rogoff, land reform, land tenure, lateral thinking, Malacca Straits, Martin Wolf, Meghnad Desai, Naomi Klein, Nelson Mandela, new economy, New Urbanism, one-China policy, open economy, Pearl River Delta, pension reform, price stability, purchasing power parity, reserve currency, rising living standards, Ronald Reagan, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, spinning jenny, Spread Networks laid a new fibre optics cable between New York and Chicago, the scientific method, Thomas L Friedman, trade liberalization, urban planning, Washington Consensus, Westphalian system, Xiaogang Anhui farmers, zero-sum game

., China: Fragile Superpower (Oxford: Oxford University Press, 2007) So, Hirano, ‘Study of Contemporary Political History of East Asian Region - from the Chain Effect of Chinese and Japanese Nationalism Perspective’, workshop on Sino-Japanese relations, Renmin-Aichi University conference, Beijing, 2005 Song, Weiquiang, seminar paper, Aichi University, 21 May, 2005 ——‘Study on Massive Group Incidents of Chinese Peasants’, PhD dissertation, Nankai University, 20 April 2006 Soros, George, The Crisis of Global Capitalism (New York: Public Affairs, 1998) Spence, Jonathan D., The Chan’s Great Continent: China in Western Minds (New York: W. W. Norton, 1998) ——The Search for Modern China, 2nd edn (New York: W. W. Norton, 1999) Stanlaw, James, ‘English in Japanese Communicative Strategies’, in Braj B. Kachru, ed., The Other Tongue: English Across Cultures (Urbana and Chicago: University of Illinois Press, 1992) Steele, Valerie, and John S. Major, China Chic: East Meets West (New Haven: Yale University Press, 1999) Stephens, Philip, ‘A Futile European Contest for Obama’s Ear’, Financial Times, 10 November 2008 Stiglitz, Joseph E., ‘Development in Defiance of the Washington Consensus’, Guardian , 13 April 2006 ——Globalization and Its Discontents (London: Allen Lane, 2002) ——Making Globalization Work (London: Allen Lane, 2006) ——‘Thanks for Nothing’, Atlantic Monthly, October 2001 ——and Linda J.

., Asian Englishes: Beyond the Canon (Hong Kong: Hong Kong University Press, 2005) ——The Other Tongue: English Across Cultures (Urbana and Chicago: University of Illinois Press, 1992) Kagan, Robert, ‘The Case for a League of Democracies’, Financial Times, 13 May 2008 ——Dangerous Nation: America and the World 1600-1898 (London: Atlantic Books, 2006) ——Paradise and Power: America and Europe in the New World Order (London: Atlantic Books, 2003) Kahn, Joseph, and Jim Yardley, ‘As China Roars, Pollution Reaches Deadly Extremes’, New York Times, 26 August 2007 Kang, David C., China Rising: Peace, Power, and Order in East Asia (New York: Columbia University Press, 2007) ——‘Getting Asia Wrong: The Need for New Analytical Frameworks’, International Security, 27:4 (Spring 2003) Kaplinsky, Raphael, Globalization, Poverty and Inequality (Cambridge: Polity, 2005) ——‘Winners and Losers: China’s Trade Threats and Opportunities for Africa’, in Leni Wild and David Mepham, eds, The New Sinosphere (London: Institute for Public Policy Research, 2006) Karumbidza, John Blessing, ‘Win-Win Economic Co-operation: Can China Save Zimbabwe’s Economy?’

., The Rise of the West: A History of the Human Community (Chicago and London: University of Chicago Press, 1991) McRae, Hamish, The World in 2020: Power, Culture and Prosperity: A Vision of the Future (London: HarperCollins, 1994) Maddison, Angus, Chinese Economic Performance in the Long Run, Second Edition, Revised and Updated: 960- 2030AD (Paris: OECD, 2007) ——The World Economy: A Millennial Perspective (Paris: OECD, 2006) ——The World Economy: Historical Statistics (Paris: OECD, 2003) Mahbubani, Kishore, The New Asian Hemisphere: The Irresistible Shift of Global Power to the East (New York: Public Affairs, 2008) Manji, Firoze, and Stephen Marks, eds, African Perspectives on China in Africa (Oxford: Fahamu, 2007) Mann, James, The China Fantasy: How Our Leaders Explain Away Chinese Repression (New York: Viking, 2007) Martinez, D.


pages: 734 words: 244,010

The Ancestor's Tale: A Pilgrimage to the Dawn of Evolution by Richard Dawkins

agricultural Revolution, Alfred Russel Wallace, Boeing 747, classic study, complexity theory, delayed gratification, domesticated silver fox, double helix, Drosophila, Great Leap Forward, Haight Ashbury, invention of writing, lateral thinking, Louis Pasteur, mass immigration, nuclear winter, out of africa, Peter Singer: altruism, phenotype, Richard Feynman, Ronald Reagan, Spread Networks laid a new fibre optics cable between New York and Chicago, Steven Pinker, Stuart Kauffman, the High Line, the long tail, urban sprawl

., etal. (2002) A new hominid from the Upper Miocene of Chad, central Africa. Nature 418: 145-151. [37] BUCHSBAUM. R.(1987) Animals Without Backbones, University of Chicago Press, Chicago, 3rd edn. [38] BUTTERFIELD. N.J. (2001) Paleobiology of the late Mesoproterozoic (ca. 1200 Ma) Hunting Formation, Somerset Island, arctic Canada. Precambrian Research 111: 235-256. [39] CAIRNS-SMITH, A. G. (1985) Seven Clues to the Origin of Life. Cambridge University Press, Cambridge. [40] CARROLL, R. L. (1988) Vertebrate Paleontology and Evolution. W.H. Freeman, New York. [41] CATANIA, K. C., KAAS.J. H. (1997) Somatosensory fovea in the star-nosed mole: Behavioral use of the star in relation to innervation patterns and cortical representation.Journal of Comparative Neurology 387: 215-233

Cambridge University Press, Cambridge. [59] DARWIN, C. (1860/1859) On The Origin of Species by Means of Natural Selection. John Murray, London. [60] DARWIN. C. (1987/1842) The Geology of the Voyage of HMS Beagle: The Structure and Distribution of Coral Reefs. New York University Press, New York. [61] DARWIN, C. (2002/1839) The Voyage of the Beagle. Dover Publications, New York. [62] DARWIN, C. (2003/1871) The Descent of Man. Gibson Square Books, London. [63] DARWIN, F. (ed.) (1888) The Life And Letters of Charles Darwin. John Murray. London. [64] DAUBIN, V., GOUY, M., Si PERRIERE, G. (2002) A phylogenomic approach to bacterial phylogeny: evidence for a core of genes snaring common history.

[140] HUXLEY, T. H. (2001/1836) Man's Place in Nature. Random House USA. New York. [141] INOUE, J. G., MASAKI. M., TSUKAMOTO, K., & NISHIDA. M. (2003) Basal actinopterygian relationships: A mitogenomic perspective on the phylogeny of the 'ancient fish'. Molecular Phylogenetirs and Evolution 26:110-120. [142] JEFFERY, W. R. & MARTASIAN, D. P. (1998) Evolution of eye regression in the caveflsh Astyanax: Apoptosis and the Pax-6 gene. American Zoology 38: 685-696. [143] JERISON, H. J. (1973) Evolution of the Brain and Intelligence. Academic Press, New York. [144] Ji, Q., Luo, Z.-X., YUAN, C.-X., et al. (2002) The earliest known eutherian mammal.


pages: 302 words: 73,581

Platform Scale: How an Emerging Business Model Helps Startups Build Large Empires With Minimum Investment by Sangeet Paul Choudary

3D printing, Airbnb, Amazon Web Services, barriers to entry, bitcoin, blockchain, business logic, business process, Chuck Templeton: OpenTable:, Clayton Christensen, collaborative economy, commoditize, crowdsourcing, cryptocurrency, data acquisition, data science, fake it until you make it, frictionless, game design, gamification, growth hacking, Hacker News, hive mind, hockey-stick growth, Internet of things, invisible hand, Kickstarter, Lean Startup, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, means of production, multi-sided market, Network effects, new economy, Paul Graham, recommendation engine, ride hailing / ride sharing, Salesforce, search costs, shareholder value, sharing economy, Silicon Valley, Skype, Snapchat, social bookmarking, social graph, social software, software as a service, software is eating the world, Spread Networks laid a new fibre optics cable between New York and Chicago, TaskRabbit, the long tail, the payments system, too big to fail, transport as a service, two-sided market, Uber and Lyft, Uber for X, uber lyft, vertical integration, Wave and Pay

Quora and LinkedIn targeted entrepreneurs and investors in the valley where their respective founding teams had significant influence. Both platforms are, respectively, global brands today. Local platforms always start by targeting a micro-market, by design. Yelp started by focusing on restaurants in San Francisco, Foursquare focused on New York City, and Groupon on Chicago. Pinterest offers an object lesson in succeeding as a follower by targeting a micro-market. Pinterest started at a time when Facebook was already huge, users were developing ‘social’ fatigue, and all the pundits of user experience were advocating real-time text feeds. An image-based social network was not exactly a venture capitalist’s dream.

While not necessarily a requirement for all spreadable units, the incompleteness of the interaction creates an active call to action for the recipient, prompting them to act. Spreadable units remain the most important, yet least understood, element of designing for viral adoption. EXTERNAL NETWORK What is the external network on which the unit spreads? Networks grow on top of other networks. Instagram leveraged Facebook, as did Zynga. There are countless examples of viral growth, leveraging Facebook as an underlying network. For quite some time, startups building new platforms saw Facebook as their savior for solving launch and adoption problems. For many marketers, implementing viral growth translates to little more than a simple introduction via a share button and an integration with Facebook.

Platform Scale is a builder’s manual for anyone building a platform business today. It lays out a structured approach to designing and growing a platform business model and addresses the key factors that lead to the success and failure of these businesses. “The leading resource for understanding business models for the networked age.” — PATRICK VLASKOVITS, New York Times Bestselling Author of The Lean Entrepreneur “Many understand the power of platforms. Few understand how they work. Only Sangeet tells you how to build them.” — NIR EYAL, Wall Street Journal Bestselling author of Hooked “Sangeet’s work brings science and structure to a host of emerging digital business models


pages: 457 words: 128,838

The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order by Paul Vigna, Michael J. Casey

Airbnb, Alan Greenspan, altcoin, Apple Newton, bank run, banking crisis, bitcoin, Bitcoin Ponzi scheme, blockchain, Bretton Woods, buy and hold, California gold rush, capital controls, carbon footprint, clean water, Cody Wilson, collaborative economy, collapse of Lehman Brothers, Columbine, Credit Default Swap, cross-border payments, cryptocurrency, David Graeber, decentralized internet, disinformation, disintermediation, Dogecoin, driverless car, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, fiat currency, financial engineering, financial innovation, Firefox, Flash crash, Ford Model T, Fractional reserve banking, Glass-Steagall Act, hacker house, Hacker News, Hernando de Soto, high net worth, informal economy, intangible asset, Internet of things, inventory management, Joi Ito, Julian Assange, Kickstarter, Kuwabatake Sanjuro: assassination market, litecoin, Long Term Capital Management, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, McMansion, means of production, Menlo Park, mobile money, Money creation, money: store of value / unit of account / medium of exchange, Nelson Mandela, Network effects, new economy, new new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, off-the-grid, offshore financial centre, payday loans, Pearl River Delta, peer-to-peer, peer-to-peer lending, pets.com, Ponzi scheme, prediction markets, price stability, printed gun, profit motive, QR code, RAND corporation, regulatory arbitrage, rent-seeking, reserve currency, Robert Shiller, Ross Ulbricht, Satoshi Nakamoto, seigniorage, shareholder value, sharing economy, short selling, Silicon Valley, Silicon Valley startup, Skype, smart contracts, special drawing rights, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, supply-chain management, Ted Nelson, The Great Moderation, the market place, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, Turing complete, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, underbanked, Vitalik Buterin, WikiLeaks, Y Combinator, Y2K, zero-sum game, Zimmermann PGP

Big-name individuals in business and entertainment are also popping up in bitcoin and other cryptocurrency investment pools: Virgin Group chairman Sir Richard Branson, actor Ashton Kutcher via his A-Grade Investments fund, and Hong Kong billionaire Li Ka-shing, who plowed money into BitPay via his Horizons Ventures firm. Then there are those investors who’ve become so involved that they’re now part of the bitcoin community as mainstays on the bitcoin conference circuit: Matthew Roszak at Tally Capital in Chicago, Rik Willard of MintCombine in New York, and William Quigley of Santa Monica–based Clearstone Venture Partners, to name a few. On top of this, an active community of bitcoiners is putting its newfound wealth back into accelerator programs and angel investing projects, often with funds denominated in bitcoin and other cryptocurrencies.

It called for an extension of the forty-five-day comment period that Lawsky had set, arguing that this was an inordinately short period for poorly funded tech firms with limited experience on Wall Street. Some suggested more drastic action and started lobbying New York State lawmakers in Albany to rein in Lawsky, framing him as a killer of innovation and new job creation in New York. Most dramatically, Circle CEO Jeremy Allaire, perhaps the bitcoiner with the best connections to the political establishment,* wrote a powerful blog post arguing that his high-profile and well-funded retail bitcoin service might have to shut out people with New York ISP addresses. Allaire posited that it would be “devastating” for bitcoin if the New York BitLicense became a template for other states. The pressure clearly had some effect.

Some suggested more drastic action and started lobbying: Open-Source Financial Developers Association, “Stop BitLicense from Harming Small Businesses and Tech Innovation in NY,” petition to Governor Andrew Cuomo via change.org, http://www.change.org/p/governor-andrew-m-cuomo-and-the-new-york-state-legislature-stop-bitlicense-from-harming-small-businesses-and-tech-innovation-in-ny. Most dramatically, Circle CEO Jeremy Allaire: Jeremy Allaire, “Thoughts on the New York BitLicense Proposal,” August 13, 2014, Circle Internet Financial blog, https://www.circle.com/2014/08/13/thoughts-new-york-bitlicense-proposal. Conceding that the NYDFS didn’t have “a monopoly on the truth”: Paul Vigna, “BitBeat: BitLicense Gets Extension; Lawsky: ‘We Don’t Have a Monopoly on the Truth,’” Wall Street Journal, MoneyBeat blog, August 21, 2014, http://blogs.wsj.com/moneybeat/2014/08/21/bitbeat-bitlicense-gets-extension-lawsky-we-dont-have-a-monopoly-on-the-truth/.