Donald MacKenzie's "How to Make Money in Microseconds," published in the current issue of the London Review of Books, is a fascinating look into the role of algorithm-based trading in markets---the use of “share trading computer programs” and their “millisecond” timescales---in the events of May 6, 2010, in which “a self-feeding downward spiral” caused by algorithms lead to Sotheby’s sale price jumping to $99,999.99:

What goes on in stock markets appears quite different when viewed on different timescales. Look at a whole day’s trading, and market participants can usually tell you a plausible story about how the arrival of news has changed traders’ perceptions of the prospects for a company or the entire economy and pushed share prices up or down. Look at trading activity on a scale of milliseconds, however, and things seem quite different.

When two American financial economists, Joel Hasbrouck and Gideon Saar, did this a couple of years ago, they found strange periodicities and spasms. The most striking periodicity involves large peaks of activity separated by almost exactly 1000 milliseconds: they occur 10-30 milliseconds after the ‘tick’ of each second. The spasms, in contrast, seem to be governed not directly by clock time but by an event: the execution of a buy or sell order, the cancellation of an order, or the arrival of a new order. Average activity levels in the first millisecond after such an event are around 300 times higher than normal. There are lengthy periods – lengthy, that’s to say, on a scale measured in milliseconds – in which little or nothing happens, punctuated by spasms of thousands of orders for a corporation’s shares and cancellations of orders. These spasms seem to begin abruptly, last a minute or two, then end just as abruptly.

Little of this has to do directly with human action. None of us can react to an event in a millisecond: the fastest we can achieve is around 140 milliseconds, and that’s only for the simplest stimulus, a sudden sound. The periodicities and spasms found by Hasbrouck and Saar are the traces of an epochal shift. As recently as 20 years ago, the heart of most financial markets was a trading floor on which human beings did deals with each other face to face. The ‘open outcry’ trading pits at the Chicago Mercantile Exchange, for example, were often a mêlée of hundreds of sweating, shouting, gesticulating bodies. Now, the heart of many markets (at least in standard products such as shares) is an air-conditioned warehouse full of computers supervised by only a handful of maintenance staff. Read on.

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Hazem Kandil, a sociologist at UCLA, is interviewed in the New Left Review about the "revolt in Egypt":

Two developments were responsible for making ordinary, apolitical Egyptians feel they could no longer carry on with their normal lives. The first was the dissolution of the social contract governing state–society relations since Nasser’s coup in the fifties. The contract involved a div0it exchange: the regime offered free education, employment in an expanding public sector, affordable healthcare, cheap housing and other forms of social protection, in return for obedience. You could have—or at any rate hope for—these benefits, so long as domestic or foreign policies were not questioned and political power was not contested. In other words, people understood that they were trading their political rights for social welfare. From the eighties onwards, this contract was eroded, but it was not until the new millennium that it was fully abrogated. By this time the regime felt that it had eliminated organized resistance so thoroughly that it no longer needed to pay the traditional social bribes to guarantee political acquiescence. Viewing a population that appeared utterly passive, fragmented and demoralized, the regime believed it was time for plunder, on a grand scale. In the ruling National Democratic Party (NDP), a faction clustered around the President’s son Gamal Mubarak increasingly took charge through a new body called the Policy Committee. It had two components. One consisted of corrupt, state-nurtured capitalists with monopoly control over profitable sectors of the economy. The other was composed of neo-liberal intellectuals, typically economists with links to international financial institutions.

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Parallel with this social change, and related to it, was an alteration in the forms of political repression by the regime. Back in the fifties and sixties, it was understood that you would suffer arrest or torture only if you were politically organized. The military took care of domestic repression, which was brutal but highly targeted. In the seventies and early eighties, this function was transferred from the army to the police. Repression now became more indiscriminate, but it was still carried out within a discernible structure and certain limits. Calling the shots were colonels or captains, people with names and ranks and faces, who bore some kind of responsibility for the decisions they took, and you still had to have some kind of political involvement—not necessarily organized, now, but saying something that crossed a red line or upset some official—to fall into their hands. By the nineties, however, the regime had become so confident it faced no challenges that it treated criticism in the press, or on satellite television or later the internet, as harmless banalities. This was also the attitude taken by the police: day-to-day repression of citizens was too mundane to be carried out by uniformed officers. Why would police officers waste their time and energy on intimidating a few students, cracking down on the occasional hot-headed labour organizer or molesting some female human-rights activists to keep them off the streets? Read on

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Blake Gopnik weighs in on the newly unveiled portrait of Bill and Melinda Gates at The National Portrait Gallery, stating it's not "even close to significant art. It’s pretty much interchangeable with any of 10,000 other works of official portraiture":

No one could imagine this portrait, which is the gallery’s second nonpresidential commission, getting even a footnote in the art texts of the future. It couldn’t find a place even in the deepest vaults of the Museum of Modern Art or the National Gallery or any other serious art institution. If you didn’t recognize the celebrity sitters in Friedman’s painting, you wouldn’t spare it a glance. You’d expect to come across it in any corner suite on Wall Street or Capitol Hill—and to keep walking once you saw it.

Friedman says he was paid $75,000 for his expenses and his months of work on the painting. Those are the fees of a fine craftsman, rather than a payment for an object that has real value of its own, out on the open market. Major artworks by major artists fetch far more than that.

But here’s the thing: I think Friedman got his Gates portrait absolutely right. It doesn’t need to be good art, because it isn’t functioning as art at all, any more than the picture on your driver’s license is. It was commissioned by a history museum in honor of its subject—“someone of national significance, someone our audience is interested in,” as curator Brandon Fortune explained—not by an art museum to honor its artist. Speaking after the painting’s unveiling, Friedman said “I’m determined that it exist as fine art,” but he’s wrong to want that. The purpose of pictures like this is to pick out people of note in our culture and hold them up to our notice. And that means that, almost like that photo on your license, once it has picked out its subject its job is almost done. It is a placeholder for its sitter’s virtues, and it can’t hold that place if its own virtues stand out too much. Read on.

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Quine on philosophy's "concern with knowledge of the world."

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The June issue of Scientific American features an article on observable quantum effects in a growing number of macroscopic systems:

According to standard physics textbooks, quantum mechanics is the theory of the microscopic world. It describes particles, atoms and molecules but gives way to ordinary classical physics on the macroscopic scales of pears, people and planets. Somewhere between molecules and pears lies a boundary where the strangeness of quantum behavior ends and the familiarity of classical physics begins. The impression that quantum mechanics is limited to the microworld permeates the public understanding of science. For instance, Columbia University physicist Brian Greene writes on the first page of his hugely successful (and otherwise excellent) book The Elegant Universe that quantum mechanics “provides a theoretical framework for understanding the universe on the smallest of scales.” Classical physics, which comprises any theory that is not quantum, including Albert Einstein’s theories of relativity, handles the largest of scales.

Yet this convenient partitioning of the world is a myth. Few modern physicists think that classical physics has equal status with quantum mechanics; it is but a useful approximation of a world that is quantum at all scales. Although quantum effects may be harder to see in the macroworld, the reason has nothing to do with size per se but with the way that quantum systems interact with one another. Until the past decade, experimentalists had not confirmed that quantum behavior persists on a macroscopic scale. Today, however, they routinely do. These effects are more pervasive than anyone ever suspected. They may operate in the cells of our body.

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Robin Mackay on Urbanomic, the UK-based publisher he founded; Collapse, the journal of philosophical research it publishes; Speculative Realism, Florian Hecker and Quentin Meillassoux; and photographer Liz Deschenes.