The Three Article Problem

I’ve been mulling over three separate columns/posts/interviews over the past few days. Today’s post was supposed to be me reflecting on my thoughts about all of them together, but as it turns out, I have more questions than I do thoughts.

Worse (or if you think like I do, better) I don’t even have a framework to go through these questions in my own head. That is to say, I do not have a mental model that helps me think about which questions to ask first, and which later, and why.

So this is not me copping out from writing today’s post. This is me asking all of you for help. What framework should I be using to think about these three pieces of content together?

All three posts revolve around technology, and two are about the Chinese tech crackdown. Two are about innovation in tech and America. And one of the three is, obviously, the intersection set.


The first is a write-up from Noah Smith’s Substack (which you should read, and if you can afford it, pay for. Note that I am well over my budget for subscribing to content for this year, so I don’t. But based on what I have read of his free posts, I have no hesitation in recommending it to you.)

In other words, the crackdown on China’s internet industry seems to be part of the country’s emerging national industrial policy. Instead of simply letting local governments throw resources at whatever they think will produce rapid growth (the strategy in the 90s and early 00s), China’s top leaders are now trying to direct the country’s industrial mix toward what they think will serve the nation as a whole.
And what do they think will serve the nation as a whole? My guess is: Power. Geopolitical and military power for the People’s Republic of China, relative to its rival nations.
If you’re going to fight a cold war or a hot war against the U.S. or Japan or India or whoever, you need a bunch of military hardware. That means you need materials, engines, fuel, engineering and design, and so on. You also need chips to run that hardware, because military tech is increasingly software-driven. And of course you need firmware as well. You’ll also need surveillance capability, for keeping an eye on your opponents, for any attempts you make to destabilize them, and for maintaining social control in case they try to destabilize you.

https://noahpinion.substack.com/p/why-is-china-smashing-its-tech-industry

As always, read the whole thing. But in particular, read his excerpts from Dan Wang’s letters from 2019 and 2020. It goes without saying that you should subscribe to Dan Wang’s annual letters (here are past EFE posts that mention Dan Wang). As Noah Smith says, China is optimizing for power, and is willing to pay for it by sacrificing, at least in part, the “consumer internet”.

That makes sense, in the sense that I understand the argument.


The second is an excellent column in the Economist, from its business section. Schumpeter is a column worth reading almost always, but this edition in particular was really thought-provoking. The column starts off by comparing how China and the United States of America are dealing with the influence of “big” technology firms.

As the column says, when it comes to the following:

  1. The speed with which China has dealt with the problem
  2. The scope of its tech crackdown
  3. The harshness of the punishments (fines is just one part of the Chinese government’s arsenal)

… China has America beat hollow. As Noah Smith argues, China is optimizing for power, and has done so for ages. As he mentions elsewhere in his essay, “in classic CCP fashion, it was time to smash”. Well, they have.

But the concluding paragraph of the Schumpeter column is worth savoring in full, and over multiple mugs of coffee:

But autarky carries its own risks. Already, Chinese tech darlings are cancelling plans to issue shares in America, derailing a gravy train that allowed Chinese firms listed there to reach a market value of nearly $2trn. The techlash also risks stifling the animal spirits that make China a hotbed of innovation. Ironically, at just the moment China is applying water torture to its tech giants, both it and America are seeing a flurry of digital competition, as incumbents invade each other’s turf and are taken on by new challengers. It is a time for encouragement, not crackdowns. Instead of tearing down the tech giants, American trustbusters should strengthen what has always served the country best: free markets, rule of law and due process. That is the one lesson America can teach China. It is the most important lesson of all.

https://www.economist.com/business/2021/07/24/china-offers-a-masterclass-in-how-to-humble-big-tech-right

This makes sense, in the sense that I understand the argument being made. Given what little I understand of economics and how the world works, I am in complete agreement with the idea being espoused.


The third is an interview of Mark Zuckerberg by Casey Newton of the Verge.

It is a difficult interview to read, and it is also a great argument for why we should all read more science fiction (note that the title of today’s post is a little bit meta, and that in more ways than one). Read books by Neal Stephenson. Listen to his conversation with Tyler Cowen. Read these essays by Matthew Ball.

Towards the end of the interview, Casey Newton asks Mark Zuckerberg about the role of the government, and the importance of public spaces, in the metaverse. Don’t worry right now if the concept of the metaverse seems a little abstract. Twenty years ago, driverless cars and small devices that could stream for you all of the world’s content (ever produced) also seemed a little abstract. Techno-optimism is great, I heavily recommend it to you.

Here is Mark Zuckerberg’s answer:

I certainly think that there should be public spaces. I think that’s important for having healthy communities and a healthy sphere. And I think that those spaces range from things that are government-built or administered, to nonprofits, which I guess are technically private, but are operating in the public interest without a profit goal. So you think about things like Wikipedia, which I think is really like a public good, even though it’s run by a nonprofit, not a government.
One of the things that I’ve been thinking about a lot is: there are a set of big technology problems today that, it’s almost like 50 years ago the government, I guess I’m talking about the US government here specifically, would have invested a ton in building out these things. But now in this country, that’s not quite how it’s working. Instead, you have a number of Big Tech companies or big companies that are investing in building out this infrastructure. And I don’t know, maybe that’s the right way for it to work. When 5G is rolled out, it’s tough for a startup to really go fund the tens of billions of dollars of infrastructure to go do that. So, you have Verizon and AT&T and T-Mobile do it, and that’s pretty good, I guess.
But there are a bunch of big technology problems, [like] defining augmented and virtual reality in this overall metaverse vision. I think that that’s going to be a problem that is going to require tens of billions of dollars of research, but should unlock hundreds of billions of dollars of value or more. I think that there are things like self-driving cars, which seems like it’s turning out to be pretty close to AI-complete; needing to almost solve a lot of different aspects of AI to really fully solve that. So that’s just a massive problem in terms of investment. And some of the aspects around space exploration. Disease research is still one that our government does a lot in.
But I do wonder, especially when we look at China, for example, which does invest a lot directly in these spaces, how that is kind of setting this up to go over time. But look, in the absence of that, yeah, I do think having public spaces is a healthy part of communities. And you’re going to have creators and developers with all different motivations, even on the mobile internet and internet today, you have a lot of people who are interested in doing public-good work. Even if they’re not directly funded by the government to do that. And I think that certainly, you’re going to have a lot of that here as well.
But yeah, I do think that there is this long-term question where, as a society, we should want a very large amount of capital and our most talented technical people working on these futuristic problems, to lead and innovate in these spaces. And I think that there probably is a little bit more of a balance of space, where some of this could come from government, but I think startups and the open-source community and the creator economy is going to fill in a huge amount of this as well.

https://www.theverge.com/22588022/mark-zuckerberg-facebook-ceo-metaverse-interview

I think he’s saying that the truth lies somewhere in the middle, and god knows I’m sympathetic to that argument. But who decides where in the middle? Who determines the breadth of this spectrum, governments or businesses? With what objective, over what time horizon, and with what opportunity costs?


At the moment, and that as a consequence of having written all of this out, this is where I find myself:

China is optimizing for power, and is willing to give up on innovation in the consumer internet space. America is optimizing for innovation in the consumer internet space, and is willing to cede power to big tech in terms of shaping up what society looks like in the near future.

Have I framed this correctly? If yes, what are the potential ramifications in China, the US and the rest of the world? What ought to be the follow-up questions? Why? Who else should I be following and reading to learn more about these issues?

I don’t have the answers to these questions, and would appreciate the help.

Thank you!

Etc: Links for 27th December, 2019

  1. Because it contains an article on dying, and an article on pooping. Why not?
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  2. Thanos, Neal Stephenson and Chernobyl.
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  3. Conching and sports, among other things.
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  4. Baader-Meinhoff, jackfruits et al.
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  5. On the animal kingdom.

Tech: Links for 3rd December, 2019

  1. “Both Starship and Starlink are transformative technology being built before our very eyes, here, in our lifetimes. If I live long enough my grandchildren will be more flabbergasted that I’m older than Starlink than that I’m older than cell phones (museum pieces) or the public internet itself.”
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    A fascinating write-up on Starlink: its economics, its pricing, its upsides, its downsides, and the underlying strategy. A very long read, and I’ll admit I didn’t get all of it – but rewarding nonetheless.
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  2. “To finish this post, I’m going to revisit its starting point. Starship is still seen by many in the space media community as a slightly overgrown version of any other rocket, with reusability tacked on. This is an error of analogy. Starship fundamentally changes our relationship with space.Starship is a devastatingly powerful space access and logistical transport mechanism that will instantly crush the relevance of every other rocket ever built.””
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    And so also for Starship.
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  3. “…the venture capital pouring into astrology apps will create a fortune telling system that works, because humans are predictable. As people follow the advice, the apps’ predictive powers will increase, creating an ever-tighter electronic leash. But they’ll be hugely popular – because if you sprinkle magic on top, you can sell people anything.”
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    Speaking of stars
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  4. “But using models is inherently tricky. We can never be certain that our model behaves enough like the thing we are actually trying to understand to draw conclusions about it. Nor can we be sure that our model is similar enough in the ways that really matter. So it can be hard to know that the evidence we collect from the model is truly evidence about the thing we want to know about.”
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    Evidence and proofs are very tricky to think about.
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  5. “This requires more ingenuity than you might think—wires have never been perfectly transparent carriers of data; they have always degraded the information put into them. In general, this gets worse as the wire gets longer, and so as the early telegraph networks spanned greater distances, the people building them had to edge away from the seat-of-the-pants engineering practices that, applied in another field, gave us so many boiler explosions, and toward the more scientific approach that is the standard of practice today.”
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    The very first link above includes a link to this gem of an essay by Neal Stephenson. Written in 1996, it still is a great read!

Etc: Links for 5th July, 2019

  1. “…in the series, Valery Legasov (Jared Harris), a member of the Academy of Sciences, lives in nearly the same kind of squalor as a fireman in the Ukrainian town of Pripyat. In fact, Legasov would have lived in an entirely different kind of squalor than the fireman did.”
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    This is one of many, of course, but that line above was particularly illuminating. A review of the excellent series, Chernobyl.
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  2. “The productivity equation is a non-linear one, in other words. This accounts for why I am a bad correspondent and why I very rarely accept speaking engagements. If I organize my life in such a way that I get lots of long, consecutive, uninterrupted time-chunks, I can write novels. But as those chunks get separated and fragmented, my productivity as a novelist drops spectacularly. What replaces it? Instead of a novel that will be around for a long time, and that will, with luck, be read by many people, there is a bunch of e-mail messages that I have sent out to individual persons, and a few speeches given at various conferences.”
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    Neal Stephenson (whose books are excellent, and uniformly so) on productivity.
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  3. “Thanos, observing that there were too many people, decided to kill half of them. But this is curiously short-sighted for a man regarded by many as a policy prophet. Any exponential population growth process will soon replace the lost people: that is why exponential growth is such a headache in the first place. For example, if an economy’s resource footprint grows exponentially at a rate of 7 per cent, it doubles in just ten years — meaning that in less time than has elapsed since the first Iron Man movie, we could be back where we started.The only lasting solution is an economy that uses resources at a sustainable rate. Malthus’s qualms notwithstanding, contraception has been a very good start. The world population growth rate is steadily approaching a very sustainable-sounding zero.”
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    Tim Harford analyzes Thanos like only an economist can.
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  4. “Imagine you’re cooking a roast dinner for your family of four. You opt for beef with all the trimmings, safe in the knowledge that it’s a firm family favourite. But just as you’re about to serve up, your daughter announces she’s vegetarian, your partner texts to say they’re running late, and your son tells you he’s invited “a few” friends over for dinner too. Then, your dog runs off with the joint of beef while you’re desperately trying to work out how you are going to meet the needs of all these (quite frankly) very demanding and unruly individuals.”
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    The BBC on the problem of dynamic resource allocation. The excerpt, by the way, has nothing to do with the rest of the article.
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  5. “Because at the end of their pilgrimage, the weary are rewarded with two things: a footbath and a bowl of steaming noodles. The footbath is just a footbath, but the noodles are extraordinary. Su filindeu is—quasi-official designation here—the rarest pasta on the planet. The dish is made specifically for this occasion; its very existence revolves around this trek. So specialized and obscure and mind-bendingly intricate is it that only a few souls can make it. And only those who reach Lula will ever try it.”
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    The rarest pasta on earth. Why wouldn’t you want to read!