Group items tagged

Since coming to power in 2019, Bukele has declared a still-to-be-rescinded state of exception, suspended the Salvadorean constitution, and locked up some 70,000 alleged gang members without due process.

This trait also makes him a touchstone for the Right-wing movement that I predict will replace “conservatism” in the 21st century. This outlook owes more to the Italian Futurist Filippo Marinetti than conservatives of the G.K. Chesterton variety

yet, Bukele’s strongman tactics have made him wildly popular with Salvadoreans, who doubtless enjoy a reported 70% reduction in the country’s previously extremely high murder rate. They have also made Bukele a rock star for the online Right. This group, fond of complaining about spineless leaders, fraying Western law and order, and the bleeding-away of political agency into international institutions and NGOs, regards the spectacle of a strongman leader with good social media game as something like a fantasy made flesh.

Arguably, it’s as much his embrace of technology that accords Bukele the mantle of poster-boy for a futuristic Right. Whether in his extremely online presence, his (admittedly not completely successful) embrace of Bitcoin as legal tender, or the high-tech, recently rebuilt National Library, funded by Beijing and serving more as showcase for futuristic technologies than as reading-room

Western critics, though, point to allegations that he has corrupted institutions by packing them with allies, not to mention, according to Amnesty International, “concealed and distorted public information, backed actions to undermine civic space, militarised public security, and used mass arrests and imprisonment as the sole strategies for counteracting violence in the country”.

is perhaps most visibly embodied in American technologists such as Elon Musk, Mark Andreessen or Peter Thiel. As a worldview, it is broadly pro-capitalist, enthusiastically pro-technology and unabashedly hierarchical, as well as sometimes also scornful of Christian-inflected concern for the weak.

We might call it, rudely, “space fascism”, though N.S. Lyons’s formulation “Right-wing progressivism” is probably more accurate. Among its adherents, high-tech authoritarianism is a feature, not a bug, and egalitarianism is for fools. Thinkers such as Curtis Yarvin propose an explicitly neo-monarchical model for governance; Thiel has declared that: “I no longer believe freedom and democracy are compatible.”

El Salvador is thus the most legible real-world instance of something like a Right-wing progressive programme in practice. And along with the tech enthusiasm and public-order toughness, the third distinctive feature of this programme can be gleaned: a desire not to end international migration, but to restrict it to elites.

For Right-wing progressives, polities are not necessarily premised on ethnic or cultural homogeneity — at least not for elites. Rather, this is a vision of statehood less based on affinity, history or even ethnicity, and more on a kind of opt-in, utility-maximisation model

As a worldview, it’s jarring to cultural conservatives, who generally value thick ties of shared history and affinity

Right-wing progressives generally accord greater political value to gifted, high-productivity foreigners than any slow-witted, unproductive coethnic: those within Right-wing progressive circles propose, and in some cases are already working on, opt-in startup cities and “network states” that would be, by definition, highly selective about membership.

As for those still wedded to the 20th-century idea that being Right-wing necessarily means ethnicity-based nationalism, they are likely to find this outlook bewildering.

Yet it’s still more heretical to egalitarian progressives, for whom making migration and belonging an elite privilege offends every premise of inclusion and social justice.

Right-wing progressives, by contrast, propose to learn from the immigration policies of polities such as Singapore and the Gulf states, and avert the political challenges posed by ethnic voting blocs by imposing tiered citizenship for low-skilled migrants, while courting the wealth and productivity of international elites

Bukele’s proposal suggests a pragmatic two-tier Right-wing progressive migration policy that courts rich, productive, geographically rootless international “Anywheres” of the kind long understood to have more affinity with one another than with less wealthy and more rooted “Somewheres” — but to do so while explicitly protecting cultural homogeneity on behalf of the less-mobile masses.

There are larger structural reasons for such pragmatism, not least that population growth is slowing or going into reverse across most of the planet.

At the same time, impelled by easier transportation, climate change, social-media promises of better lives elsewhere, and countless other reasons, people everywhere are on the move. As such, like a global game of musical chairs, a battle is now on for who ends up where, once the music stops — and on what terms.

How do you choose who is invited? And how do you keep unwanted demographics out? Within an egalitarian progressive framework, these are simply not questions that one may ask

Within the older, cultural conservative framework, meanwhile, all or most migration is viewed with suspicion.

The Right-wing progressive framework, by contrast, is upbeat about migration — provided it’s as discerning as possible, ideally granting rights only to elite incomers and filtering others aggressively by demographics, for example an assessment of the statistical likeliho

od of committing crime or making a net economic contribution.

In Britain, meanwhile, whatever happens to the Tories, I suspect we’ll see more of the Right-wing progressives. I find many of their policies unnerving, especially on the biotech side; but theirs is a political subculture with optimism and a story about the future, two traits that go a long way in politics.

That may not be true in the future: If market dominance means fewer competitors and less innovation, consumers will be worse off than if those companies had been restrained. “The impact on innovation can be the most important competitive effect” in an antitrust case

Yet Google’s monopoly means some features and prices that competitors offered never made it in front of customers. Yelp Inc., which in 2004 began aggregating detailed information and user reviews of local services, such as restaurants and stores, claims Google altered its search results to hurt Yelp and help its own competing service. While Yelp survived, it has retreated from Europe, and several similar local search services have faded.

In a 2005 paper, Mr. Scherer found that Standard Oil was indeed a prolific generator of patents in its early years, but that slowed once it achieved dominance.

Standard Oil and AT&T used trusts, regulations and patents to keep out or co-opt competitors. They were respected but unloved.

By contrast, Google and Facebook give away their main product, while Amazon undercuts traditional retailers so aggressively it may be holding down inflation. None enjoys a government-sanctioned monopoly; all invest prodigiously in new products.

All are among the public’s most loved brands, according to polls by Morning Consult.

Yet there are also important parallels. The monopolies of old and of today were built on proprietary technology and physical networks that drove down costs while locking in customers, erecting formidable barriers to entry.

. If they’re imposing a cost, it may not be what customers pay but the products they never see.

When the federal government sued to break up Standard Oil, the Supreme Court acknowledged business acumen was important to the company’s early success, but concluded that was eventually supplanted by a single-minded determination to drive others out of the market.

Amazon hasn’t yet reached the same market share as Google or Facebook but its position is arguably even more impregnable because it enjoys both physical and technological barriers to entry. Its roughly 75 fulfillment centers and state-of-the art logistics (including robots) put it closer, in time and space, to customers than any other online retailer.

“Just like people joined Facebook because everyone else was on Facebook, the biggest competitive advantage AT&T had was that it was interconnected,”

Early in the 20th century, AT&T began buying up local competitors and refusing to connect independent exchanges to its long-distance lines, arousing antitrust complaints. By the 1920s, it was allowed to become a monopoly in exchange for universal service in the communities it served. By 1939, the company carried more than 90% of calls.

After AT&T was broken up into separate local and long-distance companies in 1982, telecommunication innovation blossomed, spreading to digital switching, fiber optics, cellphones—and the internet.

“There should be hundreds of Yelps. There’s not. No one is pitching investors to build a service that relies on discovery through Facebook or Google to grow, because venture capitalists think it’s a poor bet.”

At that same hearing Jeffrey Katz, then the chief executive of Nextag, responded, “That is like saying move to Panama if you don’t like the tax rate in America. It’s a fake choice because no one has Google’s scope or capabilities and consumers won’t, don’t, and in fact can’t jump.”

In 2013 the U.S. Federal Trade Commission concluded that even if Google had hurt competitors, it was to serve consumers better, and declined to bring a case. Since then, comparison sites such as Nextag have largely faded.

The different outcomes hinge in part on different approaches. European regulators are more likely to see a shrinking pool of competitors as inherently bad for both competition and consumers. American regulators are more open to the possibility that it could be natural and benign.

Internet platforms have high fixed and minimal operating costs, which favors consolidation into a few deep-pocketed competitors. And the more customers a platform has, the more useful it is to each individual customer—the “network effect.”

But a platform that confers monopoly in one market can be leveraged to dominate another. Facebook’s existing user base enabled it to become the world’s largest photo-sharing site through its purchase of Instagram in 2012 and the largest instant-messaging provider through its purchase of WhatsApp in 2014. It is also muscling into virtual reality through its acquisition of Oculus VR in 2014 and anonymous polling with its purchase of TBH last year.

Once a company like Google or Facebook has critical mass, “the venture capital looks elsewhere,” says Roger McNamee of Elevation Partners, a technology-focused private-equity firm. “There’s no point taking on someone with a three or four years head start.”

when Google launched its own comparison business, Google Shopping, those sites found themselves dropping deeper into Google’s search results. They accused Google of changing its algorithm to favor its own results. The company responded that its algorithm was designed to give customers the results they want.

As the dominant platform for third-party online sales, Amazon also has access to data it can use to decide what products to sell itself. In 2016 Capitol Forum, a news service that investigates anticompetitive behavior, reported that when a shopper views an Amazon private-label clothing brand, the accompanying list of items labeled “Customers Who Bought This Item Also Bought,” is also dominated by Amazon’s private-label brands. This, it says, restricts competing sellers’ access to a prime marketing space

In the face of such accusations, the probability of regulatory action—for now—looks low, largely because U.S. regulators have a relatively high bar to clear: Do consumers suffer?

“We think consumer welfare is the right standard,” Bruce Hoffman, the FTC’s acting director of the bureau of competition, recently told a panel on antitrust law and innovation. “We have tried other standards. They were dismal failures.”

What would remedies look like? Since Big Tech owes its network effects to data, one often-proposed fix is to give users ownership of their own data: the “social graph” of connections on Facebook, or their search history on Google and Amazon. They could then take it to a competitor.

A more drastic remedy would be to block acquisitions of companies that might one day be a competing platform. British regulators let Facebook buy Instagram in part because Instagram didn’t sell ads, which they argued made them different businesses. In fact, Facebook used Instagram to engage users longer and thus sell more ads

Ben Thompson, wrote in his technology newsletter Stratechery. Building a network is “extremely difficult, but, once built, nearly impregnable. The only possible antidote is another network that draws away the one scarce resource: attention.” Thus, maintaining competition on the internet requires keeping “social networks in separate competitive companies.”

How sound are these premises? Google’s and Facebook’s access to that data and network effects might seem like an impregnable barrier, but the same appeared to be true of America Online’s membership, Yahoo ’s search engine and Apple’s iTunes store, note two economists, David Evans and Richard Schmalensee, in a recent paper. All saw their dominance recede in the face of disruptive competition.

It’s possible Microsoft might have become the dominant company in search and mobile without the scrutiny the federal antitrust case brought. Throughout history, entrepreneurs have often needed the government’s help to dislodge a monopolist—and may one day need it again.

This shift, combined with business-friendly tax and regulatory policy, ushered in a period of mergers and acquisitions that created megacorporations

In the past 20 years, more than 75 percent of American industries, from airlines to pharmaceuticals, have experienced increased concentration, and the average size of public companies has tripled. The results are a decline in entrepreneurship, stalled productivity growth, and higher prices and fewer choices for consumers.

Because Facebook so dominates social networking, it faces no market-based accountability. This means that every time Facebook messes up, we repeat an exhausting pattern: first outrage, then disappointment and, finally, resignation.

Over a decade later, Facebook has earned the prize of domination. It is worth half a trillion dollars and commands, by my estimate, more than 80 percent of the world’s social networking revenue. It is a powerful monopoly, eclipsing all of its rivals and erasing competition from the social networking category.

Facebook’s monopoly is also visible in its usage statistics. About 70 percent of American adults use social media, and a vast majority are on Facebook products

Over two-thirds use the core site, a third use Instagram, and a fifth use WhatsApp.

As a result of all this, would-be competitors can’t raise the money to take on Facebook. Investors realize that if a company gets traction, Facebook will copy its innovations, shut it down or acquire it for a relatively modest sum

Facebook’s dominance is not an accident of history. The company’s strategy was to beat every competitor in plain view, and regulators and the government tacitly — and at times explicitly — approved

The F.T.C.’s biggest mistake was to allow Facebook to acquire Instagram and WhatsApp. In 2012, the newer platforms were nipping at Facebook’s heels because they had been built for the smartphone, where Facebook was still struggling to gain traction. Mark responded by buying them, and the F.T.C. approved.

Neither Instagram nor WhatsApp had any meaningful revenue, but both were incredibly popular. The Instagram acquisition guaranteed Facebook would preserve its dominance in photo networking, and WhatsApp gave it a new entry into mobile real-time messaging.

When it hasn’t acquired its way to dominance, Facebook has used its monopoly position to shut out competing companies or has copied their technology.

In 2014, the rules favored curiosity-inducing “clickbait” headlines. In 2016, they enabled the spread of fringe political views and fake news, which made it easier for Russian actors to manipulate the American electorate.

As markets become more concentrated, the number of new start-up businesses declines. This holds true in other high-tech areas dominated by single companies, like search (controlled by Google) and e-commerce (taken over by Amazon)

I don’t blame Mark for his quest for domination. He has demonstrated nothing more nefarious than the virtuous hustle of a talented entrepreneur

It’s on our government to ensure that we never lose the magic of the invisible hand. How did we allow this to happen

a narrow reliance on whether or not consumers have experienced price gouging fails to take into account the full cost of market domination

It doesn’t recognize that we also want markets to be competitive to encourage innovation and to hold power in check. And it is out of step with the history of antitrust law. Two of the last major antitrust suits, against AT&T and IBM in the 1980s, were grounded in the argument that they had used their size to stifle innovation and crush competition.

It is a disservice to the laws and their intent to retain such a laserlike focus on price effects as the measure of all that antitrust was meant to do.”

Facebook is the perfect case on which to reverse course, precisely because Facebook makes its money from targeted advertising, meaning users do not pay to use the service. But it is not actually free, and it certainly isn’t harmless.

We pay for Facebook with our data and our attention, and by either measure it doesn’t come cheap.

The choice is mine, but it doesn’t feel like a choice. Facebook seeps into every corner of our lives to capture as much of our attention and data as possible and, without any alternative, we make the trade.

The vibrant marketplace that once drove Facebook and other social media companies to compete to come up with better products has virtually disappeared. This means there’s less chance of start-ups developing healthier, less exploitative social media platforms. It also means less accountability on issues like privacy.

The most problematic aspect of Facebook’s power is Mark’s unilateral control over speech. There is no precedent for his ability to monitor, organize and even censor the conversations of two billion people.

Facebook engineers write algorithms that select which users’ comments or experiences end up displayed in the News Feeds of friends and family. These rules are proprietary and so complex that many Facebook employees themselves don’t understand them.

What started out as lighthearted entertainment has become the primary way that people of all ages communicate online.

In January 2018, Mark announced that the algorithms would favor non-news content shared by friends and news from “trustworthy” sources, which his engineers interpreted — to the confusion of many — as a boost for anything in the category of “politics, crime, tragedy.”

As if Facebook’s opaque algorithms weren’t enough, last year we learned that Facebook executives had permanently deleted their own messages from the platform, erasing them from the inboxes of recipients; the justification was corporate security concerns.

No one at Facebook headquarters is choosing what single news story everyone in America wakes up to, of course. But they do decide whether it will be an article from a reputable outlet or a clip from “The Daily Show,” a photo from a friend’s wedding or an incendiary call to kill others.

Mark knows that this is too much power and is pursuing a twofold strategy to mitigate it. He is pivoting Facebook’s focus toward encouraging more private, encrypted messaging that Facebook’s employees can’t see, let alone control

Second, he is hoping for friendly oversight from regulators and other industry executives.

In an op-ed essay in The Washington Post in March, he wrote, “Lawmakers often tell me we have too much power over speech, and I agree.” And he went even further than before, calling for more government regulation — not just on speech, but also on privacy and interoperability, the ability of consumers to seamlessly leave one network and transfer their profiles, friend connections, photos and other data to another.

I don’t think these proposals were made in bad faith. But I do think they’re an attempt to head off the argument that regulators need to go further and break up the company. Facebook isn’t afraid of a few more rules. It’s afraid of an antitrust case and of the kind of accountability that real government oversight would bring.

We don’t expect calcified rules or voluntary commissions to work to regulate drug companies, health care companies, car manufacturers or credit card providers. Agencies oversee these industries to ensure that the private market works for the public good. In these cases, we all understand that government isn’t an external force meddling in an organic market; it’s what makes a dynamic and fair market possible in the first place. This should be just as true for social networking as it is for air travel or pharmaceuticals.

Just breaking up Facebook is not enough. We need a new agency, empowered by Congress to regulate tech companies. Its first mandate should be to protect privacy.

First, Facebook should be separated into multiple companies. The F.T.C., in conjunction with the Justice Department, should enforce antitrust laws by undoing the Instagram and WhatsApp acquisitions and banning future acquisitions for several years.

How would a breakup work? Facebook would have a brief period to spin off the Instagram and WhatsApp businesses, and the three would become distinct companies, most likely publicly traded.

Facebook is indeed more valuable when there are more people on it: There are more connections for a user to make and more content to be shared. But the cost of entering the social network business is not that high. And unlike with pipes and electricity, there is no good argument that the country benefits from having only one dominant social networking company.

others worry that the breakup of Facebook or other American tech companies could be a national security problem. Because advancements in artificial intelligence require immense amounts of data and computing power, only large companies like Facebook, Google and Amazon can afford these investments, they say. If American companies become smaller, the Chinese will outpace us.

The American government needs to do two things: break up Facebook’s monopoly and regulate the company to make it more accountable to the American people.

But the biggest winners would be the American people. Imagine a competitive market in which they could choose among one network that offered higher privacy standards, another that cost a fee to join but had little advertising and another that would allow users to customize and tweak their feeds as they saw fit

The cost of breaking up Facebook would be next to zero for the government, and lots of people stand to gain economically. A ban on short-term acquisitions would ensure that competitors, and the investors who take a bet on them, would have the space to flourish. Digital advertisers would suddenly have multiple companies vying for their dollars.

The Europeans have made headway on privacy with the General Data Protection Regulation, a law that guarantees users a minimal level of protection. A landmark privacy bill in the United States should specify exactly what control Americans have over their digital information, require clearer disclosure to users and provide enough flexibility to the agency to exercise effective oversight over time

The agency should also be charged with guaranteeing basic interoperability across platforms.

Finally, the agency should create guidelines for acceptable speech on social media

We will have to create similar standards that tech companies can use. These standards should of course be subject to the review of the courts, just as any other limits on speech are. But there is no constitutional right to harass others or live-stream violence.

These are difficult challenges. I worry that government regulators will not be able to keep up with the pace of digital innovation

I worry that more competition in social networking might lead to a conservative Facebook and a liberal one, or that newer social networks might be less secure if government regulation is weak

Professor Wu has written that this “policeman at the elbow” led IBM to steer clear “of anything close to anticompetitive conduct, for fear of adding to the case against it.”

Finally, an aggressive case against Facebook would persuade other behemoths like Google and Amazon to think twice about stifling competition in their own sectors, out of fear that they could be next.

The alternative is bleak. If we do not take action, Facebook’s monopoly will become even more entrenched. With much of the world’s personal communications in hand, it can mine that data for patterns and trends, giving it an advantage over competitors for decades to come.

This movement of public servants, scholars and activists deserves our support. Mark Zuckerberg cannot fix Facebook, but our government can.

maybe most controversially, the Biden team added a “foreign direct product rule” that, as The Financial Times noted, “was first used by the administration of Donald Trump against Chinese technology group Huawei” and “in effect bars any U.S. or non-U.S. company from supplying targeted Chinese entities with hardware or software whose supply chain contains American technology.”

This last rule is huge, because the most advanced semiconductors are made by what I call “a complex adaptive coalition” of companies from America to Europe to Asia

The more we push the boundaries of physics and materials science to cram more transistors onto a chip to get more processing power to continue to advance artificial intelligence, the less likely it is that any one company, or country, can excel at all the parts of the design and manufacturing process. You need the whole coalition

The reason Taiwan Semiconductor Manufacturing Company, known as TSMC, is considered the premier chip manufacturer in the world is that every member of this coalition trusts TSMC with its most intimate trade secrets, which it then melds and leverages for the benefit of the whole.

“We do not make in the U.S. any of the chips we need for artificial intelligence, for our military, for our satellites, for our space programs” — not to mention myriad nonmilitary applications that power our economy. The recent CHIPS Act, she said, was our “offensive initiative” to strengthen our whole innovation ecosystem so more of the most advanced chips will be made in the U.S.

It managed to pilfer a certain amount of chip technology, including 28 nanometer technology from TSMC back in 2017.

Until recently, China’s premier chip maker, Semiconductor Manufacturing International Company, had been thought to be stuck at mostly this chip level,

China can’t mass produce these chips with precision without ASML’s latest technology — which is now banned from the country.

Raimondo rejects the idea that the new regulations are tantamount to an act of war.

“The U.S. was in an untenable position,” she told me in her office. “Today we are purchasing 100 percent of our advanced logic chips from abroad — 90 percent from TSMC in Taiwan and 10 percent from Samsung in Korea.” (That IS pretty crazy, but it IS true.)

Because China is not trusted by the coalition partners not to steal their intellectual property, Beijing is left trying to replicate the world’s all-star manufacturing chip stack on its own with old technologies

Imposing on China the new export controls on advanced chip-making technologies, she said, “was our defensive strategy. China has a strategy of military-civil fusion,” and Beijing has made clear “that it intends to become totally self-sufficient in the most advanced technologies” to dominate both the civilian commercial markets and the 21st century battlefield. “We cannot ignore China’s intentions.”

So, to protect ourselves and our allies — and all the technologies we have invented individually and collectively — she added, “what we did was the next logical step, to prevent China from getting to the next step.” The U.S. and its allies design and manufacture “the most advanced supercomputing chips, and we don’t want them in China’s hands and be used for military purposes.”

Our main focus, concluded Raimondo, “is playing offense — to innovate faster than the Chinese. But at the same time, we are going to meet the increasing threat they are presenting by protecting what we need to. It is important that we de-escalate where we can and do business where we can. We don’t want a conflict. But we have to protect ourselves with eyes wide open.”

China’s state-directed newspaper Global Times editorialized that the ban would only “strengthen China’s will and ability to stand on its own in science and technology.” Bloomberg quoted an unidentified Chinese analyst as saying “there is no possibility of reconciliation.”

“When you show people deepfakes and generative AI, a lot of times they come out of the experiment saying, ‘I just don’t trust anything anymore,’” says David Rand, a professor at MIT Sloan who studies the creation, spread and impact of misinformation.

The signs that an image is AI-generated are easy to miss for a user simply scrolling past, who has an instant to decide whether to like or boost a post on social media. And as generative AI continues to improve, it’s likely that such signs will be harder to spot in the future.

The combination of easily-generated fake content and the suspicion that anything might be fake allows people to choose what they want to believe, adds DiResta, leading to what she calls “bespoke realities.”

Examples of misleading content created by generative AI are not hard to come by, especially on social media

This problem, which has grown more acute in the age of generative AI, is known as the “liar’s dividend,

“What our work suggests is that most regular people do not want to share false things—the problem is they are not paying attention,”

People’s attention is already limited, and the way social media works—encouraging us to gorge on content, while quickly deciding whether or not to share it—leaves us precious little capacity to determine whether or not something is true

are now using its existence as a pretext to dismiss accurate information

in the course of a lawsuit over the death of a man using Tesla’s “full self-driving” system, Elon Musk’s lawyers responded to video evidence of Musk making claims about this software by suggesting that the proliferation of “deepfakes” of Musk was grounds to dismiss such evidence. They advanced that argument even though the clip of Musk was verifiably real

If the crisis of authenticity were limited to social media, we might be able to take solace in communication with those closest to us. But even those interactions are now potentially rife with AI-generated fakes.

what sounds like a call from a grandchild requesting bail money may be scammers who have scraped recordings of the grandchild’s voice from social media to dupe a grandparent into sending money.

companies like Alphabet, the parent company of Google, are trying to spin the altering of personal images as a good thing. 

With its latest Pixel phone, the company unveiled a suite of new and upgraded tools that can automatically replace a person’s face in one image with their face from another, or quickly remove someone from a photo entirely.

Joseph Stalin, who was fond of erasing people he didn’t like from official photos, would have loved this technology.

In Google’s defense, it is adding a record of whether an image was altered to data attached to it. But such metadata is only accessible in the original photo and some copies, and is easy enough to strip out.

The rapid adoption of many different AI tools means that we are now forced to question everything that we are exposed to in any medium, from our immediate communities to the geopolitical, said Hany Farid, a professor at the University of California, Berkeley who

To put our current moment in historical context, he notes that the PC revolution made it easy to store and replicate information, the internet made it easy to publish it, the mobile revolution made it easier than ever to access and spread, and the rise of AI has made creating misinformation a cinch. And each revolution arrived faster than the one before it.

Not everyone agrees that arming the public with easy access to AI will exacerbate our current difficulties with misinformation. The primary argument of such experts is that there is already vastly more misinformation on the internet than a person can consume, so throwing more into the mix won’t make things worse.

it’s not exactly reassuring, especially given that trust in institutions is already at one of the lowest points in the past 70 years, according to the nonpartisan Pew Research Center, and polarization—a measure of how much we distrust one another—is at a high point.

“What happens when we have eroded trust in media, government, and experts?” says Farid. “If you don’t trust me and I don’t trust you, how do we respond to pandemics, or climate change, or have fair and open elections? This is how authoritarianism arises—when you erode trust in institutions.”

the message couldn’t be more unmistakable if you happen to be living in such countries — the “aliens” are here, and they’re planning to take control, weapons loaded and ready to fire.

. In 2004, near Samarra in Iraq’s Salahuddin province, for instance, then-Major Guy Parmeter recalled asking a farmer if he’d “seen any foreign fighters” about. The farmer’s reply was as simple as it was telling: “Yes, you.

It’s not the fault of the individual American soldier that, in these years, he’s been outfitted like a “Star Wars” storm trooper. His equipment is designed to be rugged and redundant, meaning difficult to break, but it comes at a cost. In Iraq, U.S. troops were often encased in 80 to 100 pounds of equipment, including a rifle, body armor, helmet, ammunition, water, radio, batteries and night-vision goggles. And, light as they are, let’s not forget the ominous dark sunglasses meant to dim the glare of Iraq’s foreign sun.

Think for a moment about the optics of a typical twenty-first-century U.S. military intervention. As our troops deploy to places that for most Americans might as well be in a galaxy far, far away, with all their depersonalizing body armor and high-tech weaponry, they certainly have the look of imperial storm troopers.

Do you recall what the aliens were after in the first “Independence Day” movie? Resources. In that film, they were compared to locusts, traveling from planet to planet, stripping them of their valuables while killing their inhabitants. These days, that narrative should sound a lot less alien to us. After all, would Washington have committed itself quite so fully to the Greater Middle East if it hadn’t possessed all that oil so vital to our consumption-driven way of life?

American troops in that country often moved about in huge MRAPs (mine-resistant, ambush-protected vehicles) described to me by an Army battalion commander as “ungainly” and “un-soldier like.” Along with M1 Abrams tanks and Bradley fighting vehicles, those MRAPs were the American equivalents of the Imperial Walkers in “Star Wars.”

As Iraq war veteran Roy Scranton recently wrote in The New York Times, “I was the faceless storm trooper, and the scrappy rebels were the Iraqis.” Ouch.

Now, think how that soldier appeared to ordinary Iraqis — or Afghans, Yemenis, Libyans or almost any other non-Western people. Wouldn’t he or she seem both intimidating and foreign, indeed, hostile and “alien,” especially while pointing a rifle at you and jabbering away in a foreign tongue?

Now, think of the typical U.S. military response to the nimbleness and speed of such “rebels.” It usually involves deploying yet more and bigger technologies. The United States has even sent its version of Imperial Star Destroyers (we call them B-52s) to Syria and Iraq to take out “rebels” riding their version of “speeders” (i.e. Toyota trucks).

unlike the evil empire of “Star Wars” or the ruthless aliens of “Independence Day,” the U.S. military never claimed to be seeking total control (or destruction) of the lands it invaded, nor did it claim to desire the total annihilation of their populations (unless you count the “carpet bombing” fantasies of wannabe Sith Lord Ted Cruz). Instead, it promised to leave quickly once its liberating mission was accomplished, taking its troops, attack craft and motherships with it.After 15 years and counting on Planet Afghanistan and 13 on Planet Iraq, tell me again how those promises have played out.

Like it or not, as the world’s sole superpower, dependent on advanced technology to implement its global ambitions, the U.S. provides a remarkably good model for the imperial and imperious aliens of our screen life.

As it turns out, technology demand only increased and the Nasdaq had its best year since 2009, spurred on by low interest rates and a surge in spending on products for remote work.

“Companies that recently raised at very high prices at the height of valuation inflation may be grappling with high burn rates and near-term challenges growing into those valuations,” Shakir told CNBC in an email. “Others that were more dilution-sensitive and chose to raise less may now need to consider avenues for extending runway that would have seemed unpalatable to them just months ago.”

“Our companies heeded that advice and most companies are now prepared for winter,” Lux wrote.

“This time, many of those tools have been exhausted,” Sequoia wrote. “We do not believe that this is going to be another steep correction followed by an equally swift V-shaped recovery like we saw at the outset of the pandemic.”Sequoia told its companies to look at projects, research and development, marketing and elsewhere for opportunities to cut costs. Companies don’t have to immediately pull the trigger, the firm added, but they should be ready to do it in the next 30 days if needed.

And among companies that are still private, staff reductions are underway at Klarna and Cameo, while Instacart is reportedly slowing hiring ahead of an expected initial public offering. Cloud software vendor Lacework announced staffing cuts on Friday, six months after the company was valued at $8.3 billion by venture investors.“We have adjusted our plan to increase our cash runway through to profitability and significantly strengthened our balance sheet so we can be more opportunistic around investment opportunities and weather uncertainty in the macro environment,” Lacework said in a blog post.

Shakir agreed with that assessment. “Like many, we at Lux have been advising our companies to think long term, extend runway to 2+ years if possible, take a very close look at reducing burn and improving gross margins, and start to set expectations that near-term future financings are unlikely to look like what they may have expected six or 12 months ago,” she wrote.

Lux highlighted one of the painful decisions it expects to see. For several companies, the firm said, “sacrificing people will come before sacrificing valuation.”But venture firms are keen to remind founders that great companies emerge from the darkest of times. Those that prove they can survive and even thrive when capital is in short supply, the thinking goes, are positioned to flourish when the economy bounces back.

conditions.”CORRECTION: This story was updated to reflect that cloud software vendor Lacework raised $1.3 billion in growth funding at a valuation of $8.3 billion.

4 of the 10 most expensive housing markets in the country — San Francisco, San Mateo, Santa Clara and Marin counties — are in the greater Bay Area. Even Oakland, once a cheaper alternative to the city, saw average rent surge 11 percent in 2012 over the previous year.

Those lucky enough to live in rent-controlled apartments say they fear that they can never afford to move. Those who are not so lucky say the rent increases have left them with little choice but to leave the city.

Melissa Jensen, said she recently moved from Los Angeles where she paid less than $2,000 for a one-bedroom in a nice neighborhood. “To get that same space in San Francisco I’m realizing I’m going to have to pay twice that much,”

No matter how fierce play may look on the playground or in the social scrimmage of the school day, the more grueling competition is the one your child faces each day to measure up in her peer group. At around age eight, children start to compare themselves to each other in more competitive ways.

media and much of life online introduce an adult context for a child’s self-assessment. The behaviors they see there that set the bar for cool, cute, bold, and daring come from the wrong age and life stage. The mix suddenly includes adolescents and adults, media coverage of fame-addled celebrities and jaded politicians, teen magazines, and Victoria’s Secret at the mall and in the mail.

As the inner critic grows, parents become indispensable as the voice of the inner ally, the voice that helps balance a child’

innermost sense of himself

Day by day, kids need time to process their experiences intellectually and emotionally, to integrate new information with their existing body of knowledge and experience. They need time to consolidate it all so that it has meaning and relevance for them. Ideally, they do that with their parents and in the context of family and community.

Kids don’t get home from school anymore; they bring school—and an even larger online community—home with them.

t in the ways that matter most, speed derails the natural pace of development. Pressure to grow up faster or exposing children to content or influences beyond their developmental ken does not make them smarter or savvier sooner. Instead, it fast-forwards them past critical steps in the developmental process.

Developmentally, this is the time children need parents and teachers to help them learn to tame impulsivity—learning to wait their turn, not cut in line, not call out in a class discussion—and for developing the capacity to feel happy and alone, connected to oneself and empathetic toward others.

With nature pressing for human interaction and a child’s world of possibility expanding in the new school environment, to trade it all for screen time is a terrible waste of a child’s early school years.

Some things in life you just have to do in order to learn, and do a lot of to grow adept at it. Like learning to ride a bike, developing these inner qualities of character and contemplation calls for real-life practice. In the absence of that immersion-style learning, time on screens can undermine a child’s development of these important social skills and the capacity to feel empathy

Emotional and social development, like cognitive development, can benefit from “judicious use” of tech

“But if it is used in a nonjudicious fashion, it will shape the brain in what I think will actually be a negative way,”

“the problem is that judicious thinking is among the frontal-lobe skills that are still developing way past the teenage years. In the meantime, the pull of technology is capturing kids at an ever earlier age, when they are not generally able to step back and decide what’s appropriate or necessary, or how much is too much.”

in school, they take their cues from the crowd-sourced conversations they hear among friends and on social media. For girls, even seven-year-olds on the school playground, sexy is the new cute. Thin is still in, but for ever younger girls. In a study of the effects of media images on gender perceptions, one study reported that by age three, children view fatness negatively, and free online computer games for girls trend toward fashion, beauty, and dress-up games, reinforcing messages that your body is your most important asset.

prior to Britney Spears, most girls had ten years of running around, riding their bikes, and experiencing their bodies as a source of energy, movement, confidence, and skills. That was before children’s fashions included thong panties for kindergarten girls, stylish bras for girls not much older, lipstick or lip gloss as a top accessory for nearly half of six-to nine-year- old girls, and “Future Pimp” T-shirts for schoolboys.

Boys, too, are under pressure. They must measure up to the super-masculine ideal of the day, portrayed and defined by more graphic, sadistic, and sexual violence than the superheroes of yesterday. Homophobia and the slurs used to express it remain a common part of boy culture, but now at an earlier age, as does a derogatory view of all things female and an increasingly sexualized attitude toward girls.

Children do best when they are free and flexible to try on and cross over the gender codes—girls who skateboard and play ice hockey, boys who draw or dance, boys and girls who enjoy each other without “dating” overtones.

TV viewing helped white boys feel better about themselves, and left white girls, black girls, and black boys feeling worse. White boys saw male media comparisons as having it good: “positions of power, prestigious jobs, high education, glamorous houses, a beautiful wife” all easily attained, as if prepackaged. Girls and women saw female media comparisons in more simplistic and limited roles, “focused on the success they have because of how they look, not what they do, what they think or how they got there.” Black boys also saw their media comparisons in the negative, limited roles of “criminals, hoodlums and buffoons, with no other future options.”

there is “a clear link between media violence exposure and aggression” as well as to other damaging consequences including eating disorders, poor body image, and unhealthy practices in an effort to achieve idealized appearances. “Failure to live up to the specific media stereotypes for one’s sex is a blow to a person’s sense of social desirability,”

That’s more than agriculture, forestry, fishing and mining combined and second only to education, health care and social assistance, which includes teachers, doctors, nurses and social service counselors. Most of those jobs are government funded.

Overall, manufacturing employs about one in eight workers in the country’s 704 entirely rural counties.

After World War II, small town prosperity relied on its contribution to the industrial economy.

But factory jobs can no longer keep small-town America afloat. Even after a robust eight-year growth spell, there are fewer than 13 million workers in manufacturing across the entire economy

Robots and workers in China put together most of the manufactured goods that Americans buy

and the high-tech industries powering the economy today don’t have much need for the cheap labor that rural communities contributed to America’s industrial past. They mostly need highly educated workers. They find those most easily in big cities, not in small towns.

In a report published in November, Mark Muro, William Galston and Clara Hendrickson of the Brookings Institution laid out a portfolio of ideas to rescue the substantial swath of the country that they identify as “left behind.”

They identify critical shortages bedeviling declining communities: workers with digital skills, broadband connections, capital. And they have plans to address them: I.T. training and education initiatives, regulatory changes to boost lending to small businesses, incentives to invest in broadband.

even the authors concede that they may not be up to the task. “I don’t know if these ideas are going to work,” Mr. Galston acknowledged when I pressed him on the issue. “But it is worth making the effort.”

agglomeration, one of the most powerful forces shaping the American economy over the last three decades. Innovative companies choose to locate where other successful, innovative companies are.

That’s where they can find lots of highly skilled workers. The more densely packed these pools of talent are, the more workers can learn from each other and the more productive they become. This dynamic feeds on itself,

“We have a spatial reorganization of the economy,” said Mr. Muro. “We have an archipelago of superstars in an ocean of low-productivity sectors.”

what are the odds that, say, a small town like Amory, Miss., where 14 percent of adults have a bachelor’s degree and a quarter of its 2,500 workers work in small-scale manufacturing, have a chance to attract well-paid tech jobs?

Consider a recent Brookings Institution study by Benjamin Austin, Edward Glaeser and Lawrence Summers

After examining a range of potential policy interventions, they conclude that a targeted employment subsidy, such as the earned-income tax credit, is probably the most powerful tool available to revive employment. But they, too, are not sure it will work. “Our call for a wage subsidy is us saying, ‘We can’t figure this out, and we hope the private sector will,’ ”

Excluding these places, the United States is still left with 50 to 55 million people living in rural communities that no longer have much to offer them economically.

Instead of so-called place-based policies to revitalize small towns, why not help their residents take advantage of opportunities where the opportunities are

Geographic mobility hit a historical low in 2017, when only 11 percent of Americans picked up shop and moved — half the rate of 1951. One of the key reasons is that housing in the prosperous cities that offer the most opportunities has become too expensive.

Even if moving people might prove more efficient on paper than restoring places, many people — especially older people and the family members who care for them — may choose to remain in rural area

What’s more, the costs of rural poverty are looming over American society. Think of the opioid addiction taking over rural America, of the spike in crime, of the wasted human resources in places where only a third of adults hold a job.

if today’s polarized politics are noxious, what might they look like in a country perpetually divided between diverse, prosperous liberal cities and a largely white rural America in decline? As Mr. Galston warned: “Think through the political consequences of saying to a substantial portion of Americans, which is even more substantial in political terms, ‘We think you’re toast.’ ”

Senate Majority Leader Charles E. Schumer (D-N.Y.) last month urged Congress to adopt “comprehensive” regulations on the AI industry.

Rather than focusing on AI technology that lets the general public create unique content like the chatbots and image generators, Chinese companies have instead focused on technologies with clear commercial uses, like surveillance tech.

n a recent study, Ding found that most of the large language models developed in China were nearly two years behind those developed in the U.S., a gap that would be a challenge to close — even if American firms had to adjust to regulation.

This gap also makes it difficult for Chinese firms to attract the world’s top engineering talent. Many would prefer to work at firms that have the resources and flexibility to experiment on frontier research areas.

Restrictions on access to the most advanced chips, which are needed to run AI models, have added to these difficulties.

Recent research identified 17 large language models in China that relied on Nvidia chips, and just three models that used Chinese-made chips.

While Beijing pushes to make comparable chips at home, Chinese AI companies have to source their chips any way they can — including from a black market that has sprung up in Shenzhen, where, according to Reuters, the most advanced Nvidia chips sell for nearly $20,000, more than twice what they go for elsewhere.

Despite the obstacles, Chinese AI companies have made major advances in some types of AI technologies, including facial recognition, gait recognition, and artificial and virtual reality.

These technologies have also fueled the development of China’s vast surveillance industry, giving Chinese tech giants an edge that they market around the world, such as Huawei’s contracts for smart city surveillance from Belgrade, Serbia, to Nairobi.

Companies developing AI in China need to comply with specific laws on intellectual property rights, personal information protection, recommendation algorithms and synthetic content, also called deep fakes. In April, regulators also released a draft set of rules on generative AI, the technology behind image generator Stable Diffusion and chatbots such as OpenAI’s ChatGPT and Google’s Bard.

They also need to ensure AI generated content complies with Beijing’s strict censorship regime. Chinese tech companies such as Baidu have become adept at filtering content that contravenes these rules. But it has hampered their ability to test the limits of what AI can do.

No Chinese tech company has yet been able to release a large language model on the scale of OpenAI’s ChatGPT to the general public, in which the company has asked the public to play with and test a generative AI model, said Ding, the professor at George Washington University.

“That level of freedom has not been allowed in China, in part because the Chinese government is very worried about people creating politically sensitive content,” Ding said.

Although Beijing’s regulations have created major burdens for Chinese AI companies, analysts say that they contain several key principles that Washington can learn from — like protecting personal information, labeling AI-generated content and alerting the government if an AI develops dangerous capabilities.

AI regulation in the United States could easily fall short of Beijing’s heavy-handed approach while still preventing discrimination, protecting people’s rights and adhering to existing laws, said Johanna Costigan, a research associate at the Asia Society Policy Institute.

“There can be alignment between regulation and innovation,” Costigan said. “But it’s a question of rising to the occasion of what this moment represents — do we care enough to protect people who are using this technology? Because people are using it whether the government regulates it or not.”

Meanwhile, the top banks and law firms, along with other high-paying employers, recruit almost exclusively from a few elite colleges.

Hardworking outsiders no longer enjoy genuine opportunity. According to one study, only one out of every 100 children born into the poorest fifth of households, and fewer than one out of every 50 children born into the middle fifth, will join the top 5 percent

Absolute economic mobility is also declining—the odds that a middle-class child will outearn his parents have fallen by more than half since mid-century—and the drop is greater among the middle class than among the poor.

because meritocratic inequality does not in fact serve anyone well, escaping meritocracy’s trap would benefit virtually everyone.

Nearly three-fifths of Republicans believe that colleges and universities are bad for America

Outrage at nepotism and other disgraceful forms of elite advantage-taking implicitly valorizes meritocratic ideals. Yet meritocracy itself is the bigger problem, and it is crippling the American dream. Meritocracy has created a competition that, even when everyone plays by the rules, only the rich can win.

Even meritocracy’s beneficiaries now suffer on account of its demands. It ensnares the rich just as surely as it excludes the rest, as those who manage to claw their way to the top must work with crushing intensity, ruthlessly exploiting their expensive education in order to extract a return.

But what, exactly, have the rich won

Meritocracy frames this exclusion as a failure to measure up, adding a moral insult to economic injury.

Elite middle and high schools now commonly require three to five hours of homework a night; epidemiologists at the Centers for Disease Control and Prevention have warned of schoolwork-induced sleep deprivation.

Where aristocratic children once reveled in their privilege, meritocratic children now calculate their future—they plan and they scheme, through rituals of stage-managed self-presentation, in familiar rhythms of ambition, hope, and worry.

Wealthy students show higher rates of drug and alcohol abuse than poor students do. They also suffer depression and anxiety at rates as much as triple those of their age peers throughout the country

education—whose benefits are concentrated in the extravagantly trained children of rich parents—must become open and inclusive. Private schools and universities should lose their tax-exempt status unless at least half of their students come from families in the bottom two-thirds of the income distribution

A recent study of a Silicon Valley high school found that 54 percent of students displayed moderate to severe symptoms of depression and 80 percent displayed moderate to severe symptoms of anxiety.

Elite universities that just a few decades ago accepted 30 percent of their applicants now accept less than 10 percent.

The University of Chicago admitted 71 percent of its applicants as recently as 1995. In 2019 it admitted less than 6 percent.

A person whose wealth and status depend on her human capital simply cannot afford to consult her own interests or passions in choosing her job. Instead, she must approach work as an opportunity to extract value from her human capital, especially if she wants an income sufficient to buy her children the type of schooling that secured her own eliteness. She must devote herself to a narrowly restricted class of high-paying jobs, concentrated in finance, management, law, and medicine

In 1962, when many elite lawyers earned roughly a third of what they do today, the American Bar Association could confidently declare, “There are … approximately 1,300 fee-earning hours per year” available to the normal lawyer.

In 2000, by contrast, a major law firm pronounced with equal confidence that a quota of 2,400 billable hours, “if properly managed,” was “not unreasonable,” which is a euphemism for “necessary for having a hope of making partner.” Because not all the hours a lawyer works are billable, billing 2,400 hours could easily require working from 8 a.m. until 8 p.m. six days a week, every week of the year, without vacation or sick days

Today, the higher a person climbs on the org chart, the harder she is expected to work. Amazon’s “leadership principles” call for managers to have “relentlessly high standards” and to “deliver results.” The company tells managers that when they “hit the wall” at work, the only solution is to “climb the wall.”

Americans who work more than 60 hours a week report that they would, on average, prefer 25 fewer weekly hours. They say this because work subjects them to a “time famine” that, a 2006 study found, interferes with their capacity to have strong relationships with their spouse and children, to maintain their home, and even to have a satisfying sex life.

The capacity to bear these hours gracefully, or at least grimly, has become a criterion for meritocratic success

Meritocracy traps entire generations inside demeaning fears and inauthentic ambitions: always hungry but never finding, or even knowing, the right food.

As the meritocracy trap closes in around elites, the rich themselves are turning against the prevailing system. Plaintive calls for work/life balance ring ever louder. Roughly two-thirds of elite workers say that they would decline a promotion if the new job demanded yet more of their energy

it is simply not possible to get rich off your own human capital without exploiting yourself and impoverishing your inner life, and meritocrats who hope to have their cake and eat it too deceive themselves

Building a society in which a good education and good jobs are available to a broader swath of people—so that reaching the very highest rungs of the ladder is simply less important—is the only way to ease the strains that now drive the elite to cling to their status

Parents—sometimes reluctantly, but feeling that they have no alternative—sign their children up for an education dominated not by experiments and play but by the accumulation of the training and skills, or human capital, needed to be admitted to an elite college and, eventually, to secure an elite job

How can that be done

A parallel policy agenda must reform work, by favoring goods and services produced by workers who do not have elaborate training or fancy degrees

For example, the health-care system should emphasize public health, preventive care, and other measures that can be overseen primarily by nurse practitioners, rather than high-tech treatments that require specialist doctors

In finance, regulations that limit exotic financial engineering and favor small local and regional banks can shift jobs to mid-skilled workers.

The main obstacle to overcoming meritocratic inequality is not technical but political. Today’s conditions induce discontent and widespread pessimism, verging on despair.

In his book Oligarchy, the political scientist Jeffrey A. Winters surveys eras in human history from the classical period to the 20th century, and documents what becomes of societies that concentrate income and wealth in a narrow elite. In almost every instance, the dismantling of such inequality has been accompanied by societal collapse, such as military defeat (as in the Roman empire) or revolution (as in France and Russia).

Rebuilding a democratic economic order will be difficult. But the benefits that economic democracy brings—to everyone—justify the effort. And the violent collapse that will likely follow from doing nothing leaves us with no good alternative but to try.

Oil prices are back up to their highest levels in more than three years. U.S. production has topped record levels, hitting 10.9 million barrels a day in the last week of June, according to the U.S. Energy Information Administration, compared with its high of 9.6 million in 2015. But as of May, nationwide oil and gas employment is down 21% since 2014

For decades, high school graduates could jump into a job on a drilling rig with few technical skills and expect a well-paid career. The allure of the often dangerous life of a roughneck attracted generations of worker

The work paid well, and Mr. Neece, 54 years old, indulged in boats, cars and motorcycles. “You get used to a certain lifestyle,” he said

Baker Hughes , a GE company that is the successor to GE Oil & Gas, said it is focusing on recruiting high-tech workers, increasingly from Silicon Valley. “You need to combine talent from the tech industry with oil and gas expertise,” said Binu Mathew, who was hired from Oracle Corp. in 2013 and heads the company’s newly created digital products division. “[Everyone] understands this is going to change the industry.”

One screen displays the progress as a 2-mile-long horizontal well is drilled 10,000 feet underground. A graph tracks the budgetary impacts in real time using customized software. If the drill bit goes outside the sweet spot where the company believes oil and gas to be—an area sometimes no more than 10 feet across—dollar signs tick up and a call is made to workers in the field to adjust equipment.

it is easy to forget how much we have in common as people. I can’t think of any major nation after the United States with more of a Protestant work ethic and naturally capitalist population than China.

These days, it is extremely difficult for a visiting columnist to get anyone — a senior official or a Starbucks barista — to speak on the record. It was not that way a decade ago.

The Communist Party’s hold is also a product of all the hard work and savings of the Chinese people, which have enabled the party and the state to build world-class infrastructure and public goods that make life for China’s middle and lower classes steadily better.

Beijing and Shanghai, in particular, have become very livable cities, with the air pollution largely erased and lots of new, walkable green spaces.

some 900 cities and towns in China are now served by high-speed rail, which makes travel to even remote communities incredibly cheap, easy and comfortable

Just when trust has become more important than ever between the U.S. and China, it also has become scarcer than ever. Bad trend.

China’s stability is a product of both an increasingly pervasive police state and a government that has steadily raised standards of living. It’s a regime that takes both absolute control and relentless nation-building seriously.

For an American to fly from New York’s Kennedy Airport into Beijing Capital International Airport today is to fly from an overcrowded bus terminal to a Disney-like Tomorrowland.

China got an early jump on A.I. in two realms — facial recognition technology and health records — because there are virtually no privacy restrictions on the government’s ability to build huge data sets for machine learning algorithms to find patterns.

“ChatGPT is prompting some people to ask if the U.S. is rising again, like in the 1990s,”

“I understand your feeling: You have been in the first place for a century, and now China is rising, and we have the potential to become the first — and that is not easy for you,” Hu said to me. But “you should not try to stop China’s development. You can’t contain China in the end. We are quite smart. And very diligent. We work very hard. And we have 1.4 billion people.”

Before the Trump presidency, he added: “We never thought China-U.S. relations would ever become so bad. Now we gradually accept the situation, and most Chinese people think there is no hope for better relations. We think the relationship will be worse and worse and hope that war will not break out between our two countries.”

A lot of people hesitated when I asked. Indeed, many would answer with some version of “I’m not sure, I just know that it’s THEIR fault.”

t was repeated conversations like these that got me started asking American, Chinese and Taiwanese investors, analysts and officials a question that has been nagging at me for a while: What exactly are America and China fighting about?

the real answer is so much deeper and more complex than just the usual one-word response — “Taiwan” — or the usual three-word response — “autocracy versus democracy.”

Let me try to peel back the layers. The erosion in U.S.-China relations is a result of something old and obvious — a traditional great-power rivalry between an incumbent power (us) and a rising power (China) — but with lots of new twists

One of the twists, though, is that this standard-issue great-power rivalry is occurring between nations that have become as economically intertwined as the strands of a DNA molecule. As a result, neither China nor America has ever had a rival quite like the other.

in modern times, China, like America, has never had to deal with a true economic and military peer with which it was also totally intertwined through trade and investment.

Another new twist, and a reason it’s hard to define exactly what we’re fighting about, has a lot to do with how this elusive issue of trust and the absence of it have suddenly assumed much greater importance in international affairs.

This is a byproduct of our new technological ecosystem in which more and more devices and services that we both use and trade are driven by microchips and software, and connected through data centers in the cloud and high-speed internet

so many more things became “dual use.” That is, technologies that can easily be converted from civilian tools to military weapons, or vice versa.

no one country or company can own the whole supply chain. You need the best from everywhere, and that supply chain is so tightly intertwined that each company has to trust the others intimately.

when we install the ability to sense, digitize, connect, process, learn, share and act into more and more things — from your GPS-enabled phone to your car to your toaster to your favorite app — they all become dual use, either weapons or tools depending on who controls the software running them and who owns the data that they spin off.

As long as most of what China sold us was shallow goods, we did not care as much about its political system — doubly so because it seemed for a while as if China was slowly but steadily becoming more and more integrated with the world and slightly more open and transparent every year. So, it was both easy and convenient to set aside some of our worries about the dark sides of its political system.

when you want to sell us ‘deep goods’ — goods that are dual use and will go deep into our homes, bedrooms, industries, chatbots and urban infrastructure — we don’t have enough trust to buy them. So, we are going to ban Huawei and instead pay more to buy our 5G telecom systems from Scandinavian companies we do trust: Ericsson and Nokia.”

as we’ve seen in Ukraine, a smartphone can be used by Grandma to call the grandkids or to call a Ukrainian rocket-launching unit and give it the GPS coordinates of a Russian tank in her backyard.

So today, the country or countries that can make the fastest, most powerful and most energy efficient microchips can make the biggest A.I. computers and dominate in economics and military affairs.

As more and more products and services became digitized and electrified, the microchips that powered everything became the new oil. What crude oil was to powering 19th- and 20th-century economies, microchips are for powering 21st-century economies.

When you ask them what is the secret that enables TSMC to make 90 percent of the world’s most advanced logic chips — while China, which speaks the same language and shares the same recent cultural history, makes zero — their answer is simple: “trust.”

TSMC is a semiconductor foundry, meaning it takes the designs of the most advanced computer companies in the world — Apple, Qualcomm, Nvidia, AMD and others — and turns the designs into chips that perform different processing functions

TSMC makes two solemn oaths to its customers: TSMC will never compete against them by designing its own chips and it will never share the designs of one of its customers with another.

“Our business is to serve multiple competitive clients,” Kevin Zhang, senior vice president for business development at TSMC, explained to me. “We are committed not to compete with any of them, and internally our people who serve customer A will never leak their information to customer C.”

But by working with so many trusted partners, TSMC leverages the partners’ steadily more complex designs to make itself better — and the better it gets, the more advanced designs it can master for its customers. This not only requires incredibly tight collaboration between TSMC and its customers, but also between TSMC and its roughly 1,000 critical local and global suppliers.

As the physics of chip making gets more and more extreme, “the investment from customers is getting bigger and bigger, so they have to work with us more closely to make sure they harvest as much [computing power] as they can. They have to trust you.”

China also has a foundry, Semiconductor Manufacturing International Corporation, which is partly state-owned. But guess what? Because no global chip designers trust SMIC with their most advanced designs, it is at least a decade behind TSMC.

It’s for these reasons that the erosion in U.S.-China relations goes beyond our increasingly sharp disagreements over Taiwan. It is rooted in the fact that just when trust, and its absence, became much bigger factors in international affairs and commerce, China changed its trajectory. It made itself a less trusted partner right when the most important technology for the 21st century — semiconductors — required unprecedented degrees of trust to manufacture and more and more devices and services became deep and dual use.

when American trade officials said: “Hey, you need to live up to your W.T.O. commitments to restrict state-funding of industries,” China basically said: “Why should we live by your interpretation of the rules? We are now big enough to make our own interpretations. We’re too big; you’re too late.”

Combined with China’s failure to come clean on what it knew about the origins of Covid-19, its crackdown on democratic freedoms in Hong Kong and on the Uyghur Muslim minority in Xinjiang, its aggressive moves to lay claim to the South China Sea, its increasing saber rattling toward Taiwan, its cozying up to Vladimir Putin (despite his savaging of Ukraine), Xi’s moves toward making himself president for life, his kneecapping of China’s own tech entrepreneurs, his tighter restrictions on speech and the occasional abduction of a leading Chinese businessman — all of these added up to one very big thing: Whatever trust that China had built up with the West since the late 1970s evaporated at the exact moment in history when trust, and shared values, became more important than ever in a world of deep, dual-use products driven by software, connectivity and microchips.

it started to matter a lot more to Western nations generally and the United States in particular that this rising power — which we were now selling to or buying from all sorts of dual-use digital devices or apps — was authoritarian.

eijing, for its part, argues that as China became a stronger global competitor to America — in deep goods like Huawei 5G — the United States simply could not handle it and decided to use its control over advanced semiconductor manufacturing and other high-tech exports from America, as well as from our allies, to ensure China always remained in our rearview mirror

Beijing came up with a new strategy, called “dual circulation.” It said: We will use state-led investments to make everything we possibly can at home, to become independent of the world. And we will use our manufacturing prowess to make the world dependent on our exports.

Chinese officials also argue that a lot of American politicians — led by Trump but echoed by many in Congress — suddenly seemed to find it very convenient to put the blame for economic troubles in the U.S.’s middle class not on any educational deficiencies, or a poor work ethic, or automation or the 2008 looting by financial elites, and the crisis that followed, but on China’s exports to the United States.

As Beijing sees it, China not only became America’s go-to boogeyman, but in their frenzy to blame Beijing for everything, members of Congress started to more recklessly promote Taiwan’s independence.

Xi told President Biden at their summit in Bali in November, in essence: I will not be the president of China who loses Taiwan. If you force my hand, there will be war. You don’t understand how important this is to the Chinese people. You’re playing with fire.

at some level Chinese officials now understand that, as a result of their own aggressive actions in recent years on all the fronts I’ve listed, they have frightened both the world and their own innovators at precisely the wrong time.

I don’t buy the argument that we are destined for war. I believe that we are doomed to compete with each other, doomed to cooperate with each other and doomed to find some way to balance the two. Otherwise we are both going to have a very bad 21st century.

I have to say, though, Americans and Chinese remind me of Israelis and Palestinians in one respect: They are both expert at aggravating the other’s deepest insecurities.

China’s Communist Party is now convinced that America wants to bring it down, which some U.S. politicians are actually no longer shy about suggesting. So, Beijing is ready to crawl into bed with Putin, a war criminal, if that is what it takes to keep the Americans at bay.

Americans are now worried that Communist China, which got rich by taking advantage of a global market shaped by American rules, will use its newfound market power to unilaterally change those rules entirely to its advantage. So we’ve decided to focus our waning strength vis-à-vis Beijing on ensuring the Chinese will always be a decade behind us on microchips.

I don’t know what is sufficient to reverse these trends, but I think I know what is necessary.

If it is not the goal of U.S. foreign policy to topple the Communist regime in China, the United States needs to make that crystal clear, because I found a lot more people than ever before in Beijing think otherwise.

As for China, it can tell itself all it wants that it has not taken a U-turn in recent years. But no one is buying it. China will never realize its full potential — in a hyper-connected, digitized, deep, dual-use, semiconductor-powered world — unless it understands that establishing and maintaining trust is now the single most important competitive advantage any country or company can have. And Beijing is failing in that endeavor.

In his splendid biography of the great American statesman George Shultz, Philip Taubman quotes one of Shultz’s cardinal rules of diplomacy and life: “Trust is the coin of the realm.”

China’s technocrats have, to date, demonstrated competence in managing the economy’s imbalances.

Mainland China has delivered significant extra returns -- 87 basis points a year more than the mighty S&P -- for anyone willing to hack the wild volatility

“On balance,” Adam sums up, “If you want to be part of history-making economic transformation, China is still the place to be.”

The third point is where we disagree. We just don’t see China as having any good options for maintaining strong growth. 

we think China’s underlying growth story is coming to an end as the country’s economic imbalances become unsustainable and global decoupling picks up steam. The volatility and low valuations, on the other hand, are likely here to stay. 

Replace bad investment with domestic consumption. 

What imbalances are we talking about? In crude summary, China’s growth has been driven by debt-funded investment, especially in property and infrastructure. The problem is that the returns on these investments are in fast decline, even as debt continues to build up.

This can’t go on forever. Eventually, you have all the bridges, trains, airports and apartment blocks you need, and the return on new ones falls below zero (How do you know that you have arrived at that point? When you have a financial crisis).

The problem is that without a healthy consumer, China’s only real options to create growth are investment and exports -- and at the same time as return on internal investments are declining, the rest of the world, led by the US, are increasingly wary of dependence on Chinese exports. 

What are China’s policy options? Broadly, there are five, as Micheal Pettis explained to us:

Stay with the current model.

Replace bad investment in things like infrastructure and real estate with good investment in things like tech and healthcare.

Beijing has policy options.

Replace bad investment with (even) move exports and a wider current account surplus.

Just quit it with the bad investment. 

we think that options 1 and 5 are not really options at all. The current model will lead to a financial crisis as return on investment falls further and further behind the costs of debt. Simply ceasing to overinvest in infrastructure and real estate, without changing anything else, will simply kill growth. 

Option 2 might be summed up -- as Jason Hsu of Ralient Global Advisors summed it up to us -- as China becoming more like Germany.

The idea is that China would steer more and more money away from real estate and towards high value-add sectors from biotech to chip manufacturing. 

The problem with option 2 is that investment is such a huge part of the Chinese economy that it is difficult to see how that the capital could be efficiently allocated to the country's tech-heavy, high value-add sectors, which are comparatively small

The most promising Chinese firms are swimming in capital as it is. And developing productive capacity isn't just about capital. It takes things the state can't rapidly deploy, like knowhow and intellectual property.

Option 3 is more promising. China could start, as Adam suggests, by building up a proper welfare safety net. But it is reasonable to expect pretty serious social and institutional resistance to this sort of mass redistribution.

why hasn’t China increased its welfare state until now? Longtime China watcher and friend of Unhedged George Magnus suggests it is because of a deep bias in the Chinese policy establishment. “It’s how Leninist systems operate: they think production and supply are everything … if you see a demand problem as a supply problem, you get the wrong answers.”

Option 4, increasing exports’ share of China’s economy even further, may be in the abstract the most appealing. But it runs directly into the fact that both China and the US and its allies have reasons to reduce mutual dependence on their economies.

The emergence of geopolitical divisions between the west, on the one hand, and Russia and China, on the other, will put globalisation at risk. The autocracies will try to reduce their dependence on western currencies and financial markets. Both they and the west will try to reduce their reliance on trade with adversaries. Supply chains will shorten and regionalise… 

Russia must remain a pariah so long as this vile regime survives. But we will also have to devise a new relationship with China. We must still co-operate. Yet we can no longer rely upon this rising giant for essential goods. We are in a new world. Economic decoupling will now surely become deep and irreversible.

In all, the most likely scenario is that China’s growth just keeps slowing. That does not mean that investors in China will necessarily lose money. But it does suggest that generic China exposure -- simply owning Chinese equity or credit indices -- is going to be a losing proposition in the long-term

“We want to serve every person in the world” with high-speed Internet signals, said Yael Maguire, head of Facebook’s Connectivity Lab. The dream — assuming regulators around the planet go along with it — is a fleet as big as 1,000 drones connecting people to the Internet. And where it is too remote even for the drones, satellites would do the trick.

Facebook’s effort in artificial intelligence is called deep learning, for the number of levels at which it critically analyzes information. By figuring out context, Facebook better knows why people anywhere are looking at something, and what else it can do to keep them engaged.

For the long term, Mr. Zuckerberg hopes Facebook’s A.I. will translate languages on the fly, know strangers you might meet and, of course, bring you the highest-value ads

Because, in the end, it’s still about getting you to look at more ads.“The fundamental thing about advertising is people paying to get a message in front of you,” Mr. Schroepfer said. “That won’t go away in my life, though the form may change.”

More broadly, some economists say, the lack of family-focused policies reflects the power imbalance between companies and workers in the American economy today. The share of economic output flowing to corporate profits has surged, while employee compensation has stagnated.

The technology industry is a striking example because it attracts some of the country’s smartest people, many of whom have far more bargaining power than most workers. Silicon Valley also has outsize cultural significance, as the face of American ingenuity and a magnet for global talent.

But it is also a place that often expects total commitment to work. That grows from the notion that in tech, unlike in other industries, companies become overnight successes, and believe their work is changing the world.

“People who give you millions of dollars for nothing but an idea at the very least expect your complete commitment to that idea,”

Start-ups are unlikely to have parental policies because they are more focused on growing as quickly as possible.

Though it’s off limits for interviewers to ask candidates whether they have children, tech companies use euphemisms to indicate that parents or older employees are not welcome, said a tech executive who would speak only anonymously. They say people are not a good “culture fit” and cannot “align on priorities” or make it in a “rapidly moving company.” The translation, he said: “People who are not exactly like us.”

“When people have kids, they have other priorities — and start-ups can be pretty brutal about not having other priorities,”

“Young people just have simpler lives,” Mark Zuckerberg, Facebook’s co-founder and chief executive, said in a talk to would-be entrepreneurs in 2007, when he was 23. “We may not own a car. We may not have family. Simplicity in life allows you to focus on what’s important.”

In some ways, an aging Silicon Valley is beginning to look more like the rest of corporate America, where most workers have families. The challenge is retaining the youthful optimism that they can do the impossible — while also showing their employees that working and having families is realistic.