The merchants of Venice, artificial intelligence and the future of information

The internet is a wellspring of information. How can one manage all this data and identify what is relevant?

- Johan Fourie

Information is power. In the 1340s, a dozen or so Florentine firms bandied together to start a postal service, called the Scarsella dei Mercanti Fiorentini, the purpose of which was to run regular correspondence between the firms and their agents in Barcelona, Paris, Cologne, and Bruges. It was a simple idea with a powerful effect: it suddenly made communication more reliable, allowing merchants to ascertain prices of goods in distant markets at frequent intervals. With it came other innovations, like invoices, bills of lading and shipping manifests. It is largely these innovations that allowed these Florentine merchants to be much more successful than their competitors. And it was not long before they were copied by others: the Venetians and the Genoese.

This and many other stories are told by Steven Marks in his underrated 2016 book The Information Nexus. It has a simple thesis: information is key to understanding the rise of capitalism over the last few centuries. At its core, merchants exploit information about market opportunities to earn a profit. The challenge for today’s merchants remains the same: how to obtain information about new opportunities before the competition does. Nowadays, though, speed is not the main constraint; communication is almost instantaneous. The challenge now is abundance: there is simply too much information available. A (quick, free and effortless) Google search reveals that humans produce about 1.7MB every second. An obvious question, then, is how modern-day merchants manage all this information and identify what is relevant?