Economics Future Review

AI Superpowers: China, Silicon Valley and the New World Order by Kai-Fu Lee – An Honest Review

If you haven’t been paying attention, there is a war going on. It’s not a cold war or a hot war – it’s something brand new. We are on the cusp of civilization changing technology reshaping our world and our species – how that reshaping takes place depends on who wins the war. Will it be Silicon Valley and the flawed ‘American Way’ or will it be China and the equally flawed (but for different reasons) ‘Chinese Way’. Or will it be something else? Dr. Kai-Fu Lee, a pioneer and luminary in the field of AI has written this very interesting book to prepare us – read on for a review. 

Essentially, for the last 500 years or so – European and American interests have been calling the shots and as Dr. Lee puts it – China now considers that to have been a mistake which will be corrected soon. He’s not just talking trash here. Dr. Lee has an amazing resume with plenty of experience and time to understand both the American and Chinese way of doing things. In this book – he contrasts the two technology ideologies from the developers to the government intervention to the use case scenarios. The result is a world approaching a crossroads with two very different futures ahead of it. 

While the average American may still think of China as the backwater where children are starving (so clean your plate), the reality is that China has awoken and is developing faster than any nation in world history. Dr. Lee says that the ‘sputnik moment’ was when the AlphaGo computer wholloped the world’s best human player repeatedly. At this point the Chinese government – an authoritarian, nationalist, socialist, and completely centralized entity in charge of nearly 1.5 billion humans put a laser focus on the development of AI and all that it will bring – and without the constraints of a capitalist nanny state that has to appear to be rights and property respecting. 

China is not constrained by property rights, patents, human rights, privacy issues, or unions – all of which prevent Silicon Valley from making the next leap. Dr. Lee compares data to electricity in this race and essentially what he posits is that China has a lot less constraints on it in regards to collecting and using data than the US does and this gives China a huge advantage. In addition, China has a population that values safety and security over liberty and privacy – which makes it much easier to implement all data seeing applications, software, and surveillance systems. 

I’ve read other reviews – and it seems that many of them think that Dr Lee is  playing favorites and painting a picture of China having an advantage because of his Taiwanese heritage and the fact that he has spent a great deal of time living in China. I don’t believe this is true, on the contrary, I think that Dr. Lee understates things due to his American bias and longstanding employment and investments in Silicon Valley. 

The Chinese are already deploying self-driving buses and paying for dinner in restaurants with the same app they buy music, message friends, find ride-shares, and rent bicycles with. We are very early in this race, but the US is already a decade behind. 

Dr. Lee’s breakdown of the factors that each country will lead in and his later breakdown of the jobs that will be affected (almost all of them) are about as good as one can hope to envision the future with. Only time will tell if his projections are accurate.  The important thing about this book, however, is the awareness it brings to the fact that we are in a race most American people aren’t even aware of – and we are losing. 

Finally, at the end of the book, Dr. Lee uses his own experience with cancer and how it changed the way he lives to suggest a more human approach to the future – unfortunately, unless the whole world is suddenly diagnosed wth Stage 4 cancer, this is not likely to resonate with people who have to struggle to pay bills, make rent, get educations, and worry about economic survival today. 

He argues that a sort of paid volunteerism is a better way to stave off the massive unemployment that is coming than an Universal Basic Income

He doesn’t seem to recognize that if thousands of senior citizens are suddenly volunteering to do jobs that require humans – that the humans who would have made a living doing those jobs now have no source of income. It seemed to be a pretty glaring blind spot to me in what was otherwise a very aware book. 

Economics Future

As the Economy Goes – So Goes the Nation….

There’s that annoying phrase you hear every four years – “As Ohio goes, so goes the nation” or sometimes it’s “New Hampshire” – I was in New Hampshire once and I’ve been to Ohio a couple of times. I met some fine people in both places – but that kind of thinking needs to go out the window. The fact that we have a system where we can even think for a moment that one state out of 50 represents what we are all thinking is total balderdash.

Not so much, with the title of this post. The Vagorithm Index is in the toilet right now – this morning it dropped as low as 275.6 – pretty close to the all time low. The V.I. contains a whole slew of economic indicators – not just from the USA but also from around the world. It also contains things like where innovation funding is being invested, how many tweets and retweets the buffoon president makes/recieves on a day to day basis, and measures of international turmoil. Mostly, however, it focuses on the US economy – although in the near future, it will need to bring equal focus to the Chinese economy.

Right now, there are massive military excercises taking place daily in the skies of Hawaii – presumably also at other U.S. bases. It’s a bit under the radar, but the U.S. is gearing up for a military conflict of some kind and it’s coming sooner rather than later. I am fully expecting a ‘Christmas Surprise’ – most likely timed to take attention away from anything catastrophic towards the Trump administration from the Meuller probe.

It will also be timed to prime the military/industrial pump of the economy – which is on the precipice right now. This economy wants to crash more than at any time I’ve witnessed since 2000 and 2008. The chickens are coming home to roost. You can’t just borrow borrow borrow borrow and hope that you’ll get lucky somehow at the casino – I mean, you can, and that’s what we’ve done, but at some point, your number is going to come up.

Worldwide right now there are a number of factors that are causing chaos. The children, grand-children, and great grand-children of native peoples who were subjugated, oppressed, enslaved, and murdered are becoming technology savvy – these are no longer people who have been fucked and left voiceless in some far corner of the world – they have voices, they have technology, and they are rightfully pissed. Same goes for women who have been  abused, assaulted, and paid unfairly for generations. Same goes for LGBTQ people and people of color living in first world nations…

Here’s the thing – their cause is righteous and there is no way to stop them. Sure, white guys like me born in the 1970s and later – we might have had nothing to do with it, but that doesn’t mean that there aren’t wrongs to be righted and the first wrong has to do with white male privilege – unfortunately, like the stock markets, reactions tend to be extreme – so we are in a time (and will be for some time) when white guys will be guilty first – regardless of who you are and what you have or haven’t done. There is a presumption of guilt. It’s not fair – but life isn’t fair. The wierd part is that that presumption of guilt comes while there is still this very pronounced habit of white male privelige.

And that’s where we get the Trumps and authoritarian sympathizers coming in. These awful Republicans (at least in the US) are more or less getting elected on protecting the entrenched white male privelige. They call it lots of other things but it really comes down to protecting the interests of rich white people – which the entire system is built around – the protection of rich white people. These people would rather see everyone lose their liberty than to see thier privilege eroded. So you have that…not just in the US but also in Europe. That’s the reason for the Brexit…in Europe, the immigrants are changing the society and the average white workingman in the UK is terrified of that happening.  It’s a bit like dwarves moving into a hobbit village to them.

Then you have Russia. How many Russian-Africans or Russian-Japanese or Russian-Arabs have you met? Me personally – and I’ve traveled quite a bit – none. I’m sure there must be some, but all the Russians I’ve ever met have been whiter than an Oregon ass in winter.

Next you have China – China is winning the technology war. Silicon Valley is still ahead – but the Chinese government is pushing, spending, encouraging, and saying ‘fuck the regulations, fuck the copyrights and patents, and fuck the ethical issues” and that is why they will win. Plus they have a centralized government and a population that sees the government as being responsible for providing safety first and everything else second. The Chinese people are willing to move faster. And they will win. There is no getting around this. China wins, no matter what. In China, English is compulsory in schools, the Belt and Road program is making China the dominant investor in developing nations around the word, and the lack of American leadership is leaving it wide open for them.

Automation is going to wipe out millions of American jobs. Automation is not going to wipe out millions of Chinese jobs – it will create millions of them. There is a mindset there that the average American can’t understand…because we don’t study Mandarin and because we don’t understand how the Chinese culture, the Chinese family, or the Chinese mind works. The entitled American independence of ego mentality fails in the coming years.

So, back to the title…As the Economy Goes, So Goes the Nation. Our economy is going into the shitter. It’s been built on market manipulation, easy credit, and massive debt. Obama and Yellen understood how to sustain that and use it to recover. Trump just jumped in there and said “Let’s give everyone free money and we’ll stop collecting taxes too” – and now, we’re fucked.

What can you do?

If you can, put your money in undeveloped land. Buy Bitcoin and other top crypto assets. Invest in technology and build businesses that people will use. Stop borrowing money (unless you want to default and tip the system over all that much faster). Pay down your debt. Stop spending billions of dollars on Amazon Prime Day, Black Friday, Cybermonday, and Christmas. And learn Mandarin. Teach Mandarin to your kids. The USA is on the edge of becoming irrelevent. I’m not sure we can do anything to stop that. There’s no way to ‘Make America Great Again’ or ‘Make America Rich Again’ (Mara by the way is the great temptor of Buddhism, roughly equivalent to Satan). All we can hope to do is to make our country decent to everyone living here and to everyone who dreams of living here. Only then will it ever be anything close to great.