In his wonderful TED talk, Kevin Slavin, a well-known game developer with an interest in algorithms, explains why we’ll never master the ramifications of such complex math. In regards to the Flash Crash, he says,
All of a sudden nine percent [of wealth] just goes away and nobody—to this day—can even agree on what happened. Because nobody ordered it. Nobody asked for it. Nobody had any control over what was actually happening… We’re writing these things that we can no longer read. We’ve rendered something kind of illegible. And we’ve lost the sense of what’s actually happening in this world that we’ve made…
When you see this kind of behavior, what you see is the evidence of algorithms in conflict, algorithms locked in loops with each other without any human oversight, without any adult supervision.
The only power we have over these algorithms, he suggests, is to press the “red button that [says] STOP.” Unsurprisingly, most leaders on Wall Street lack this kind of humility.
Dispatches From The Front 