Capital Neural Network Theory
I came up with a theory blending Conscious, Neural Networks, Money. Which I’ll call Capital Neural Network Theory for now.
Here’s what led to it -
It all stemmed from two open questions I had for myself.
Why do Popstars get paid more than Doctors?
Why do Money Managers get paid so much for seemingly creating nothing new in the world?
Let me walk you through step by step as to my questions, the building blocks of reasoning and my evaluation.
A number of years ago I got hung up on a question floating round in my head:
”Why do Popstars get paid more than Doctors?”
I paced around this question for a long time trying to understand it.
Superficially - if a doctor is out saving lives, how can they be less valuable than someone singing a song?
Which brings us to our first stop -
Perceived Value
There is no such thing as Intrinsic Value - Value can only exist when a Conscious perceives it. (I won’t cover Conscious in this post as it is huge and would detract from the flow).
See this post for a deeper explanation -
What Is Value?
During my 20’s I was trying to figure out how to become rich - so I “could be happier”. I was trying to figure out the patterns of why and how wealth accumulates.
The value of a song to an individual is parochial - in that it is different between two people. The same as the value of a life saving operation is different between a senior with ailments vs a young, healthy individual.
Why would one be paid more than another? Well a pop-star creates value (the song) and has a multiplier of the number of listeners (millions). The doctor creates value (the healthcare) and has a multiplier of the number of patients (hundreds).
The Total Value is calculated as: perceived value * recipients
That is intuitive and makes sense. Perhaps this is why Popstars get paid more than Doctors.
Another question regarding money has always pestered me:
”Why do Money Managers get paid so much for seemingly creating nothing new in the world?”
A baker feeds the local community. A builder creates shelter.
A person on wall street makes a lot of money for creating nothing?
Well it is clear that they are being paid a lot because they are being rewarded for providing a disproportionate amount of value.
I don’t see their value? What are they doing?
Well this led me to the idea of a Capital Neural Network.
Artificial Neural Network
Artificial Neural Networks were an attempt to model the human brain in computers.
They are made modelled primarily using Neurons, Dendrites. Neurons are the nodes within your brain and the Dendrites are the connections between these nodes.
A Neuron sends signals to other Neurons through the Dendrites. They can connect to some/lots/not many other neurons.
This is really a network of nodes. If a Neuron receives a signal (could be between 0 and 1) it can choose to send some/all/none of that to each other Neuron.
This simple process is responsible for us splitting the atom, getting man into space, building quantum computers and AI. This simple mechanism is responsible for remarkable intelligence.
In an Artificial Neural Network the amount of signal that each node propagates to other nodes is decided using a Fitness function.
Imagine a fitness function as being a measure of success.
If your goal is to turn on the light switch in your office, the fitness function would not be satisfied if the light was off and it would be satisfied if the light was successfully turned on.
Artificial Neural Networks are trained to complete complex tasks with the use of a fitness function and a feedback loop to adjust the weights/biases on each connection in the network. Each permutation will be adjusting the amount of bias that each Neuron is sending to each other Neuron.
Capital Neural Network
Zooming out from Neural Networks in individual humans or animals, I see the idea also applicable to a collective - a Capital Neural Network.
Where:
Money is an abstraction of resources/energy. Analogous to signal through the neural network.
People/individual consciousnesses. Analogous to Neurons in the network.
Markets/networks/corporations. Analogous to a sub-graph of Neurons and Dendrites in the network.
Rewards, prosperity. Analogous to the rewards from a node aligning with a Fitness function. Success in life is rewarded by individuals making decisions and acting upon them at scale.
This macro level view of resources flowing through the network orchestrated by individuals and being rewarded for making the right decisions and executing them at scale is what I believe is a bigger manifestation of the Neural Network model.
Looking at individuals who don’t make decisions - no reward.
Looking at individuals who make the right decisions but don’t take action - no reward.
Looking at individuals who make the right decisions and take action - some reward.
Looking at individuals who make the right decisions and take action at huge scale - huge reward.
Overlay these thoughts against individuals who influence (their signal bias) large amounts of the network graph (they own or control large companies).
It intuitively makes a lot of sense.
Revisiting The Money Manager Question
Revisiting the money manager question in this light -
I see the money manger as effectively controlling a large amount of resources in the network. They are rewarded from the fitness function from how they allocate capital capital towards satisfying the fitness function.
It doesn’t matter that they aren’t fixing cars or building houses. What matters more is the decisions they make and the size of resource execution they take towards achieving the overarching fitness goal.
The Universe doesn’t ever tell you what it is wanting.
This is analogous to the neural network’s current state being out of alignment with the desired outcome from the fitness function.
No one tells a new business what type of business you should create, what product to sell, who is your target market.
It is all trial and error.
This is analogous to a loop in the training process. Feedback is reacted to and adjusted by each node participant.
You are rewarded with resources when you align with it and resources re taken when you don’t align with it. Keen observation, cat like reflexes, the willingness to change and a strong tolerance for risk will set you apart.
Zooming out - I suspect that for mankind, the primary fitness function is - Evolution.