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It’s a more ambitious commitment that carries much higher risks—but also strategic rewards—for the Western alliance.

“Nobody thought the Russians would start a medieval war in the 21st century,” said Sen. James Risch, the ranking Republican on the Senate Foreign Relations Committee. “This conflict is going to change the face of Europe as much as World War II did.”

In Asia, the Middle East and elsewhere, the West’s geopolitical adversaries are calculating whether the U.S. and its allies have the stamina and cohesion to defend the rules-based international order that has benefited the West for decades.

In particular, the future of Taiwan and the South China Sea is closely linked to the West’s record in Ukraine.

“If Putin wins in Ukraine, the message to him and other authoritarian leaders will be that they can use force to get what they want. This will make the world more dangerous and us more vulnerable.”

The Munich conference capped several weeks in which the U.S. and its allies have dramatically expanded the scope of their military aid, an indication that Mr. Putin’s expectation that the West will eventually tire of helping Ukraine hasn’t materialized just yet

Both sides believe they can win on the battlefield, and little room exists for peace negotiations. Ukraine is preparing offensives to regain the roughly 18% of its territory still occupied by Moscow, including the Crimea peninsula and parts of the eastern Donbas region that Mr. Putin seized in 2014. Russia has declared four Ukrainian regions, none of which it fully controls, to be its own sovereign territory and seeks, at the very least, to conquer those lands. Mr. Putin, in a speech on Tuesday, indicated that his aspirations remain much broader, referring to Russia’s “historical territories that are now called Ukraine.”

A year into Europe’s bloodiest conflict since World War II, Ukraine’s own military industries have been shattered by Russian missile strikes, and its reserves of Soviet-vintage weapons are running out. By now, Kyiv can keep fighting only as long as Western assistance continues apace

“The next months will be very critical. If, say, another Ukrainian offensive fails, if it becomes the public narrative that it’s going to be a stalemate, support in the West might drop—perhaps not substantially, but some of the politicians will see the writing on the wall,

“In diplomacy, morality is part of the public narrative, but rarely part of the real decision-making process. But Ukraine’s case was one of the examples in history when you can argue that sympathy based on moral arguments was a game changer,”

“Some governments acted the way they did not merely based on their practical considerations but under enormous pressure of their public opinion. And that public opinion was based on moral compassion for the victim of the aggression.”

Mr. Putin has tried to counter the Ukrainian message by appealing to fear. On the first morning of the war, he alluded to nuclear weapons to deter the West from helping Ukraine.

“Putin is threatening Armageddon, and the Russians are doing it all the time, sometimes in oblique ways and sometimes in a more direct way,

“But when you actually poke at that and provide weapons gradually over time, there hasn’t been the catastrophic response that Putin promised.”

“boiling the frog.” As the U.S. began to introduce new weapons systems, it did so slowly and, initially, in limited numbers. None of these individual decisions were of sufficient scope to provoke a dramatic escalation by Moscow. But over the past 12 months, the cumulative effect of these new weapons has transformed the balance of power on the battlefield and enabled a string of strategic Ukrainian victories.

“If you look at the arc of Western involvement, no one would have predicted where we are now six months ago, and the same goes for six months before that. It’s a crisis response that has evolved into a policy—a policy that, probably, no one would have prescribed at the outset,” said Samuel Charap, a senior political scientist at Rand Corp. who has urged caution on arming Ukraine

“The West is also the frog that is boiling itself. With each incremental increase in assistance, qualitative or quantitative, we become accustomed to that being normal, and the next one doesn’t seem so extreme,”

“There is a dynamic here where we become desensitized to what is going on. We are in a bit of a slow-moving spiral that shows no signs of letting up.”

In 2014, after Mr. Putin annexed Ukraine’s Crimea peninsula and triggered a bloody war in the eastern Donbas region, covertly sending troops and heavy weapons across the border, the American and European response was limited to sanctions that only marginally affected Russia’s economy.

Back in 1991, President George H.W. Bush viewed Ukraine’s desire for freedom as a dangerous nuisance. That year, just months before the Soviet Union’s collapse, he delivered to the Ukrainian parliament his infamous “Chicken Kiev” speech, urging Ukrainians to abandon “suicidal nationalism” and permanently remain under the Kremlin’s rule.

Other analysts and policy makers argue that the true danger lies in excessive caution over accelerating Western military involvement. “We have been slow in delivering certain capabilities. We keep climbing the stairs, but it goes through a tortuous process, and in the meantime Ukrainians are dying,” said ret. Lt. Gen. Ben Hodges, a former commander of the U.S. Army in Europe. “It has taken the Pentagon a long time to come to the realization that Ukraine can win, and will win, especially if we give them what they need. There has been all too much defeatist hand-wringing.”

At the time, President Barack Obama resisted calls to help Ukraine militarily as he sought Mr. Putin’s cooperation on his presidency’s main foreign-policy priority, the nuclear deal with Iran

Ukraine, Mr. Obama said in an interview with the Atlantic in 2016, “is going to be vulnerable to military domination by Russia no matter what we do.” All the evidence of the past 50 years, he added, suggested that Russian (and Chinese) decision-making wouldn’t be influenced by “talking tough or engaging in some military action.”

Mr. Biden, speaking in front of U.S., Polish and Ukrainian flags to a cheering crowd in Warsaw on Tuesday, had a different message. “Ukraine will never be a victory for Russia,” he pledged. “Appetites of the autocrat cannot be appeased. They must be opposed.”

Now with Putin’s recognition of the separatist regimes, he has, perhaps, set the stage for a wider conflict; and the United States and its allies in NATO would have no choice but to respond with sanctions. But sanctions, such as those imposed after Russia seized Crimea, are unlikely to deter Putin. And really draconian sanctions, such as those used against Iran, could plunge Europe and the U.S. into a recession.

On the basis of this entirely unrealistic view of the world, the U.S. has stumbled into crises that it didn’t know it was creating.

The conflict with Russia over Ukraine would seem to have called for what Richard Nixon called “playing the long ball.” Nixon had played the long ball — defied prevailing opinion — by going to China

The United States might have stepped back from the years of provocations and resets to propose a “grand bargain” with Russia that would resolve or at least ease the conflict — one based, perhaps, on a neutral Ukraine or on the enforcement of the Minsk II agreement.

it seems to me that without such a bargain, we could be headed for another foreign policy disaster — one that will have repercussions in the United States and Western Europe as well as in Russia and Ukraine. Think war, skyrocketing energy prices, recession, refugees and a Russian-Chinese alliance against the United States and its allies.

It produces economic distortions as high IQ types get jobs as “money butlers.” (Chuck Collins, the author of “The Wealth Hoarders,” estimates that at least 90,000 people are employed in what he calls the “wealth defense industry.”)

Today the educated are losing their faith in upward mobility.

if we are agreed that Beijing looks set to stop the largest property boom in history without unleashing a systemic financial crisis, it is doing something truly remarkable. It is setting a new standard in economic policy.

Is this perhaps what policy looks like if it actually takes financial stability seriously? And if we look in the mirror, why aren’t we applauding more loudly?

Add to real estate the other domestic factor roiling the Chinese financial markets: Beijing’s remarkable humbling of China’s platform businesses, the second-largest cluster of big tech in the world. That too is without equivalent anywhere else.

Beijing’s aim is to ensure that gambling on big tech no longer produces monopolistic rents. Again, as a long-term policy aim, can one really disagree with that?

we have two dramatic and deliberate policy-induced shocks of the type for which there is no precedent in the West. Both inflict short-term pain with a view to longer-term social, economic and financial stability.

Ultimately political economy determines the conditions for long-run growth. So if you had to bet on a regime, which might actually have what it takes to break a political economy impasse, to humble vested interests and make a “big play” on structural change, which would it be? The United States, the EU or Xi’s China?

Beijing’s challenge right now is to manage the fall out from the two most dramatic development policies the world has ever seen, the one-child policy and China’s urbanisation, plus the historic challenge of big tech — less a problem specific to China than the local manifestation of what Shoshana Zuboff calls “surveillance capitalism”.

no, Xi’s regime has not yet presented a fully convincing substitute plan. But, as Michael Pettis has forcefully argued, China has options. There is an entire range of policies that Beijing could put in place to substitute for the debt-fuelled infrastructure and housing boom.

demography is normally treated as a natural parameter for economic activity. But in China’s case the astonishing fact is that the sudden ageing of its workforce is also a policy-induced challenge. It is a legacy of the one-child policy — the most gigantic and coercive intervention in human reproduction ever undertaken.

China needs to spend heavily on renewable energy and power distribution to break its dependence on coal. If it needs more housing, it should be affordable. All of this would generate more balanced growth. 5 per cent? Perhaps not, but certainly healthier and more sustainable.

If it has not so far pursued an alternative growth model in a more determined fashion, some of the blame no doubt falls on the prejudices of the Beijing policy elite. But even more significant are surely the entrenched interests of the infrastructure-construction-local government-credit machine, in other words the kind of political economy factors that generally inhibit the implementation of good policy.

The problem is only too familiar in the West. In Europe and the US too, such interest group combinations hobble the search for new growth models. In the United States they put in doubt the possibility of the energy transition, the possibility of providing a healthcare system that is fit for purpose and any initiative on trade policy that involves widening market access.

First and foremost China needs a welfare state befitting of its economic development.

On balance, if you want to be part of history-making economic transformation, China is still the place to be. But it is undeniably shifting gear. And thanks to developments both inside and outside the country, investors will have to reckon with a much more complex picture of opportunity and risk. You are going to need to pick smart and follow the politics and geopolitics closely.

If on the other hand you want to invest in the green energy transition — the one big vision of economic development that the world has come up with right now — you simply have to have exposure to China, whether directly or indirectly by way of suppliers to China’s green energy sector. China is where the grand battle over the future of the climate is going to be fought. It will be a huge driver of innovation, capital accumulation and profit, the influence of which will be felt around the world.

it is one key area that both the Biden administration and the EU would like to “silo off” from other areas of conflict with China.

I worry that we may be too focused on the medium-term. Given the news out of Hong Kong and mainland China, Covid may yet come back to bite us.

Here too China is boxed in by its own success. It has successfully pursued a no-Covid policy, but due to the failing of the rest of the world, it has been left to do so in “one country”.

Until China finds some way to contain the risks, this is a story to watch. A dramatic Omicron surge across China would upend the entire narrative of the last two years, which is framed by Beijing success in containing the first wave.

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

Fredrick Douglass drew on both strands of this debate, arguing in 1850 that “Liberty and Slavery” were both in the Constitution, giving us a constitution fundamentally “at war with itself.”

the First Inaugural where Lincoln argued that the states did not have a constitutional right to secede, particularly on the grounds that they did not like the results of the election of 1860. The states might have a revolutionary right to dissolve the constitutional order and create a new one, but to secede because Lincoln was elected president when he had in no way altered the terms of the social contract was to evade the rules and break the constitutional order he was obligated to defend.

I think Lincoln’s First Inaugural is a powerful and compelling work of constitutional analysis. Lincoln’s message in the First Inaugural was twofold. First, he reiterated the compromise. Each state had a right to “control its own domestic institutions” (meaning, of course, slavery). All representatives had sworn an oath to support “the whole Constitution,” which obligated them to adhere to the fugitive slave clause as part of the compromise and not try to evade its terms by “hypercritical rules” of interpretation

But Lincoln went on to insist that no part of the Constitution had been violated. Given this, he argued that secession against a constitutional majority would be “the essence of anarchy.” If states could secede after an election rather than “acquiesce” to a free and fair election, then democratic government by a constitutional majority was no longer possible.

Once ballots had settled the issue, states were constitutionally bound to oblige. Appealing to bullets was, as Lincoln put it, a “revolutionary” act that broke the constitutional order he had sworn an oath to uphold.

Feldman points out that Lincoln’s insistence on a majority as the sovereign was quite different from the Framers’ understanding of the sovereign, which they tended to treat as the whole people.

We might best understand this as a question of who is sovereign within the constitutional order, which is separate from who can act to dissolve the constitutional order itself

The most visible element of this debate was whether individual states were sovereign in the latter capacity: Could they exit the constitutional order? And if they could not constitutionally leave, did the national government have power to keep them in?

Whether America was a union founded by We the People or was a union founded by sovereign states was the subject of fraught debate in the antebellum period.

the prolonged struggle forced Lincoln to confront the fact that the Union could not be brought back together on the terms of the old compromise.

Feldman also highlights Lincoln as a theorist of constitutional necessity, as he is forced to confront thorny constitutional issues with no easy answer, which includes a detailed examination of Lincoln’s occasional overreach. Not only was his suspension of the writ of habeas corpus wider than necessary, but it included, Feldman writes, suspending “the basic constitutional right to free speech” and locking up critics of the war far more extensively than is usually acknowledged

Emancipation would be made permanent with the Thirteenth Amendment, abolishing slavery and destroying the compromise at the heart of the original Constitution: “The greater drama of the passage of the Thirteenth Amendment was its transformation of the prewar, compromise Constitution into a new Constitution that repudiated the very core of that compromise as it had existed from 1787 to 1861.” This second founding culminated in the Fourteenth and Fifteenth Amendments, inscribing the principles articulated in the Declaration and reaffirmed by the Gettysburg Address into constitutional text.

Americans—particularly those Americans who think patriotism depends on a belief in an infallible founding and a perfect Constitution—too easily gloss over how “complicated, contradictory, and fraught it was for Lincoln and the nation to overcome [the old] Constitution and remake it.”

That’s no accident. In the three decades since the end of the Soviet Union, those men have faced industrial collapse, the disappearance of millions of jobs and declining life expectancy. The war promises to change that downward trajectory, transforming the losers of the past three decades into new heroes

For many Russian men and their families, the war may be a horror. But it’s also the last opportunity to fix their lives.

First, there’s the money. The federal base salary for a soldier is about $2,500 a month, with payment of $39,000 for wounding and up to $65,000 in the case of death. Compared with a median monthly salary of $545, this is a handsome reward — even more so for the approximately 15.3 million Russians living below the poverty line.

there’s much more on offer, too. For those coming back from the front, the state promises fast-tracked entry into civil service jobs, health insurance, free public transportation, as well as free university education and free food at school for their children. And for those who were imprisoned and joined the Wagner private military company, the state grants freedom.

Today’s soldiers live in the shadows of the generation that won the war against Nazism. In Russian public culture, no honor is higher than to be a veteran of the “Great Patriotic War,” something the regime has capitalized on by framing today’s war as a kind of historical re-enactment of World War II.

As one soldier wrote on Telegram in February, the war confers “a sense of belonging to the great male deed, the deed of defending our Motherland.”

By allowing men to escape the difficulties of everyday life — with its low pay and routine frustrations — the war offers a restoration of male self-worth. These men, at last, matter.

Feelings of inferiority, too, are swept aside in the fraternal atmosphere of the front. “It doesn’t matter who you are, how you look,” as one soldier put it. In the communal life of conflict, many of the distinctions of civilian life dissolve. War is an equalizer.

Mistrust of the rich, belief that sanctions actually strengthen the economy and disdain for émigrés all attest to a class-based experience of the conflict. By participating in the war, millions of Russians at the bottom of the social ladder can emerge as the country’s true heroes, ready for the ultimate sacrifice. The risk may be grave and the financial reward uncertain. But the chance to rise in esteem and respect makes the effort worthwhile.

The longer the war drags on, bringing more casualties, loss and broken promises, the harder it may become to sustain such levels of acceptance

it may not. Collective emotional turmoil could deepen the feeling that the war must be won, no matter what. In the absence of an alternative vision of the future, Vladimir Putin and his war will continue to hold sway.

an "ACA for All" system would prevent government from operating health insurance while allowing it to regulate and finance health insurance for most Americans. The ACA for All would not be "socialized medicine" -- where government not only finances healthcare but supplies it through public hospitals, clinics, and the direct employment of clinicians. ACA for All would continue to rely on private industry (private doctors and private hospitals) and personal responsibility, and would limit the government's role in healthcare delivery.

A Republican plan for universal healthcare would offer those with non-employer-based coverage an adequately sized tax deduction, big enough to cover the cost of a family health insurance plan. And, for the first time since the 1940s, individuals would pay taxes on the value of employer-based health insurance above a certain threshold (based on the average costopens in a new tab or window of a family health insurance plan).

It certainly informed his libertarianism, which inclined in the direction of an Ayn Rand-inspired valorization of entrepreneurial superman-geniuses whose great acts of capitalistic creativity benefit all of mankind. Thiel also tended to follow Rand in viewing the masses as moochers who empower Big Government to crush these superman-geniuses.

Thiel became something of an opportunistic populist inclined to view liberal elites and institutions as posing the greatest obstacle to building an economy and culture of dynamistic creativity—and eager to mobilize the anger and resentment of “the people” as a wrecking ball to knock them down. 

the failure of the Trump administration to break more decisively from the political status quo left Thiel uninterested in playing a big role in the 2020 election cycle.

Does Thiel personally believe that the 2020 election was stolen from Trump? I doubt it. It’s far more likely he supports the disruptive potential of encouraging election-denying candidates to run and helping them to win.

Thiel is moved to indignation by the fact that since 1958 no commercial aircraft (besides the long-decommissioned Concorde) has been developed that can fly faster than 977 kilometers per hou

Thiel is, first and foremost, a dynamist—someone who cares above all about fostering innovation, exploration, growth, and discovery.

the present looks and feels pretty much the same as 1969, only “with faster computers and uglier cars.” 

Thiel’s approach to the problem is distinctive in that he sees the shortfall as evidence of a deeper and more profound moral, aesthetic, and even theological failure. Human beings are capable of great creativity and invention, and we once aspired to achieve it in every realm. But now that aspiration has been smothered by layer upon layer of regulation and risk-aversion. “Legal sclerosis,” Thiel claimed in that same book review, “is likely a bigger obstacle to the adoption of flying cars than any engineering problem.”

Progress in science and technology isn’t innate to human beings, Thiel believes. It’s an expression of a specific cultural or civilizational impulse that has its roots in Christianity and reached a high point during the Victorian era of Western imperialism

Thiel aims to undermine the progressive liberalism that dominates the mainstream media, the federal bureaucracy, the Justice Department, and the commanding heights of culture (in universities, think tanks, and other nonprofits).

In Thiel’s view, recapturing civilizational greatness through scientific and technological achievement requires fostering a revival of a kind of Christian Prometheanism (a monotheistic variation on the rebellious creativity and innovation pursued by the demigod Prometheus in ancient Greek mythology)

Against those who portray modern scientific and technological progress as a rebellion against medieval Christianity, Thiel insists it is Christianity that encourages a metaphysical optimism about transforming and perfecting the world, with the ultimate goal of turning it into “a place where no accidents can happen” and the achievement of “personal immortality” becomes possible

All that’s required to reach this transhuman end is that we “remain open to an eschatological frame in which God works through us in building the kingdom of heaven today, here on Earth—in which the kingdom of heaven is both a future reality and something partially achievable in the present.” 

As Thiel put it last summer in a wide-ranging interview with the British website UnHerd, the Christian world “felt very expansive, both in terms of the literal empire and also in terms of the progress of knowledge, of science, of technology, and somehow that was naturally consonant with a certain Christian eschatology—a Christian vision of history.”

JD Vance is quoted on the subject of what this political disruption might look like during a Trump presidential restoration in 2025. Vance suggests that Trump should “fire every single midlevel bureaucrat, every civil servant in the administrative state, replace them with our people. And when the courts stop [him], stand before the country, and say, ‘the chief justice has made his ruling. Now let him enforce it.’”

Another Thiel friend and confidante discussed at length in Vanity Fair, neo-reactionary Curtis Yarvin, takes the idea of disrupting the liberal order even further, suggesting various ways a future right-wing president (Trump or someone else) could shake things up, shredding the smothering blanket of liberal moralism, conformity, rules, and regulations, thereby encouraging the creation of something approaching a scientific-technological wild west, where innovation and experimentation rule the day. Yarvin’s preferred path to tearing down what he calls the liberal “Cathedral,” laid out in detail on a two-hour Claremont Institute podcast from May 2021, involves a Trump-like figure seizing dictatorial power in part by using a specially designed phone app to direct throngs of staunch supporters (Jan. 6-style) to overpower law enforcement at key locations around the nation’s capital.  

this isn’t just an example of guilt-by-association. These are members of Thiel’s inner circle, speaking publicly about ways of achieving shared goals. Thiel funded Vance’s Senate campaign to the tune of at least $15 million. Is it likely the candidate veered into right-wing radicalism with a Vanity Fair reporter in defiance of his campaign’s most crucial donor?

As for Yarvin, Thiel continued to back his tech start up (Urbit) after it became widely known he was the pseudonymous author behind the far-right blog “Unqualified Reservations,” and as others have shown, the political thinking of the two men has long overlapped in numerous other ways. 

He’s deploying his considerable resources to empower as many people and groups as he can, first, to win elections by leveraging popular disgust at corrupt institutions—and second, to use the power they acquire to dismantle or even topple those institutions, hopefully allowing a revived culture of Christian scientific-technological dynamism to arise from out of the ruins.  

Far more than most big political donors, Thiel appears to care only about the extra-political goal of his spending. How we get to a world of greater dynamism—whether it will merely require selective acts of troublemaking disruption, or whether, instead, it will ultimately involve smashing the political order of the United States to bits—doesn’t really concern him. Democratic politics itself—the effort of people with competing interests and clashing outlooks to share rule for the sake of stability and common flourishing—almost seems like an irritant and an afterthought to Peter Thiel.

What we do have is the opportunity to enlighten ourselves about what these would-be Masters of the Universe hope to accomplish—and to organize politically to prevent them from making a complete mess of things in the process.

this global fur trade coincided with what American geomorphologists call “the great drying,” the three centuries between 1600 and 1900 when the country’s rivers and wetlands shrank and in some cases disappeared.

The Europeans, however, knew that rich aristocrats back home in drafty stone castles were willing to pay huge sums of money for warm beaver pelts, and so upon their arrival in the New World the fur trade proceeded accordingly — decimating the beaver population nearly to the point of extinction.

dams are also why some ecologists insist that beavers may be able to help remedy the effects of climate change. Beavers build dams, which create ponds, which create ecosystems. They move water, and so could help alleviate both droughts and floods. They create “beaver meadows,” in which flowing water isn’t necessarily visible but is nevertheless there, as if absorbed by a giant sponge.

Until recently, the people said, Meta executives viewed the company’s reliance on China to make Oculus virtual reality headsets as a relatively minor concern because the company’s core focus was its social media and messaging apps.

All that has changed now that Meta has rebranded itself as a hardware company

“Meta is building a complicated hardware product. You can’t just turn on a dime and make it elsewhere,”

Facebook’s public criticism of China began in 2019 when Zuckerberg warned, in a speech at Georgetown University, that China was exporting a dangerous vision for the internet to the rest of the world — and noted that Facebook was abandoning its efforts to break into that country’s market.

The anti-China stance has since extended into a full-blown corporate strategy. Nick Clegg, the company’s president, wrote an op-ed attacking China in The Washington Post in 2020, the same year Zuckerberg attacked China in a congressional antitrust hearing.

At the antitrust hearing in Congress in 2020, Zuckerberg used his opening remarks to attack China in terms that went much further than his industry peers. He said it was “well-documented that the Chinese government steals technology from American companies,” and repeated that the country was “building its own version of the internet” that went against American values. He described Facebook as a “proudly American” company and noted that TikTok was the company’s fastest-growing rival.

“They were trying to find things that [Zuckerberg] could agree with Trump on, and it’s a pretty slim list,” said one of the people, describing how the company landed on its anti-China strategy. “If you’re not going to try to be in this country anyway, you might as well use it to your political advantage by contrasting yourself with Apple and TikTok.”

Today, China’s economy is roughly five times the size of India’s. The average citizen of China has an economic output of almost $13,000 a year, while the average Indian’s is less than $2,500

In human-development indicators, the contrast is even sharper, with infant mortality rates much higher in India, life expectancy lower and access to sanitation less prevalent.

The divergence, analysts say, comes down largely to China’s central consolidation of policy power, an earlier start in opening up its economy to market forces starting in the late 1970s, and its single-minded focus on export-led growth.

China took the first-mover advantage and then compounded its dominance as it pursued its plans relentlessly.

India started opening its quasi-socialist economy nearly a decade later. Its approach remained piecemeal, constrained by tricky coalition politics and the competing interests of industrialists, unions, farmers and factions across its social spectrum.

“There is that element where China is a natural role model — not for its politics, but for the sheer efficiency,”

The world now has a radically different power structure than it did in 1990. China has already made itself the world’s factory, all but closing off any path India could take to competitive dominance in export-driven manufacturing.

A “Make in India” campaign, inaugurated by Mr. Modi in 2014, has been stuttering ever since. Wage costs are lower in India than in China, but much of the work force is poorly educated, and the country has struggled to attract private investment with its restrictive labor laws and other impediments to business, including lingering protectionism.

service-sector growth can go only so far in reaping India’s promise of a demographic dividend, or blunt the peril of an unemployment crisis. Hundreds of millions of people can’t find jobs or are underemployed in work that pays too little.

the employment entrance exams at government agencies. These jobs are still coveted as private sector work remains limited and less stable.

650,000 students will apply for just 600 or 700 jobs in the national civil service this year.

The civil service is a tiny part of the work force, but it is prestigious — in part because it comes with job security for life. Most applicants spend years, and a big chunk of their family’s savings, and still fail to make the cut.

“Here there is no enterprise, no companies,” Mr. Kumar said. For any young person, “the question comes, ‘What next? What can I do?’”

The lessons Mr. Modi is taking from China are most apparent in his push for infrastructure development, investing heavily in highways, railways and airports to improve supply chains and connectivity.

India has quintupled its annual spending on roads and railways during Mr. Modi’s nine years in power

As Mr. Modi has boxed in opponents, cowed the press and overwhelmed independent elements of civil society, his government has lashed out at expressions of concern from abroad as evidence of a colonial plot to undermine India or a lack of understanding of India’s “civilizational” approach — both elements that diplomats had long heard in China’s own defensiveness.

All the while, the increasing militancy of his Hindu nationalist supporters, as arms of the state hang back and give perpetrators a free pass, exacerbates India’s religious fault lines and clashes that threaten to disrupt India’s rise.

Even as India tries to align its growing technological and economic capacity to capitalize on the Western tensions with China, it is determined to stick to its neutrality and maintain a balancing act between the United States and Russia. There is also the question of whether the West’s shift from China, the linchpin of the global economy, is a temporary recalibration or a more fundamental one.

“China took advantage of a favorable geopolitical moment to really transform itself by having access to technology, to capital, to markets led by the United States. It took advantage of that to build itself up,” Mr. Saran said. “This could be that moment for India.”

But it starts an ocean away, during the Crimean War, 169 years ago.

Almost as soon as the phrase was coined, its definition was broadened to become shorthand for the British military more generally, particularly its courage in the face of long odds or superior numbers.

“Between the law-abiding elements of society and the criminals that prey upon them,” Mr. Parker said, “stands a thin blue line of defense — your police officer.” The police, in his vision, weren’t just protecting public safety; they were combating the decline of Western civilization, the rise of Communism, the moral laxity of postwar America, the decay of the nuclear family, and so on.

Like other mash-ups of identity flags with the American flag, the thin blue line flag is a rallying point for a marginalized identity, a way to lay claim to the American birthright, a demand for long-denied respect

Mr. Parker’s vision went beyond policing as a profession. In 1965, he told a civil rights commission investigating the Watts riots that “the police of this country, in my opinion, are the most downtrodden, oppressed, dislocated minority in America.” This belief, a half-century later, would animate an identity politics that blurred the blue line.

Blue Lives Matter is not just an expression of support and solidarity for the police, but a response to and rejection of Black Lives Matter. It suggests that it is not Black people whose lives are undervalued by society, but police officers.

The thin blue line would become the dominant metaphor for the police. In 1981, President Ronald Reagan said the thin blue line held back “a jungle which threatens to reclaim this clearing we call civilization”; in 1993, President Bill Clinton called it “nothing less than our buffer against chaos, against the worst impulses of this society.”

As the L.G.B.T. American flag does, it exploits a visual pun, but much less playfully: The blue line divides America against itself.

Blue Lives Matter is a movement that belies the simplicity of its name: It can certainly mean that the police deserve respect for doing a critical and dangerous job. But it can also mean that overzealous racial politics have inverted the criminal justice system, punishing the peacekeepers, coddling the criminals and turning those who carry a badge into the most embattled and victimized group in the nation. Blue Lives Matter transformed policing into a tribal affiliation.

This blossoming identity was an opportunity for any politician bold enough to take it. While trust in the police was dropping among Black and Hispanic Americans, it actually was rising for white Americans

Donald Trump was particularly well suited to take advantage of the rise of policing as identity politics. His entrance onto the political scene in the 1980s was his call for the reinstatement of the death penalty and less oversight of police.

The Trump campaign cast the Democrats as enemies of law and order who sought to incubate riots in American cities and chaos at the border.

Mr. Trump claimed that while the Democratic ticket stood with “rioters and vandals,” he stood with “the heroes of law enforcement.”

After Mr. Trump’s prophecy came true and the soft coup of representative democracy denied him a second term, when his supporters rallied for one last stand on the grassy field in front of the Capitol, it was inevitable that they would see themselves as bearing the mantle of law and order, a thin blue line smashing through a thin blue line.

In the aftermath of Jan. 6, when the nation saw that flag held aloft by the rioters who attacked the Metropolitan Police officer Michael Fanone (he says they literally beat him with it), the thin blue line flag has become increasingly controversial among police officers. In 2023, the Los Angeles Police Department banned its public display on the job. In an email explaining his decision to his officers, Chief Michel Moore lamented that “extremist groups” had “hijacked” the flag.

Looking through a political lens, James Piereson in “Shattered Consensus” observes a collapse of the postwar understanding of government’s role, namely to promote full employment and to police a disorderly world. He expects a “fourth revolution” around the end of this decade, following the Jeffersonian upheaval of 1800, the Civil War and the New Deal. Such a revolution, he writes, is required or else “the polity will begin to disintegrate for lack of fundamental agreement.”

In “The Fourth Turning Is Here,” published this summer, demographic historian Neil Howe arrived at a similar conclusion. His view springs from a conviction that human history follows highly predictable cycles based on the “saeculum,” or typical human life span of 80 years or so, and the differing experiences of four generations within that span. The next “turning,” he predicts, is due in about 2033

It will resemble those in the 1760s, 1850s and 1920s, Howe writes, that produced “bone-jarring Crises so monumental that, by their end, American society emerged wholly transformed.”

Others see disaster’s origins in economics

Failure to resume strong growth and to produce greater economic equality will bring forth authoritarian regimes both left and right. This year, in his book “The Crisis of Democratic Capitalism,” Financial Times editor Martin Wolf advocated for an array of reforms, including carbon taxation, a presumption against horizontal mergers, a virtual ban on corporate share buybacks, compulsory voting, and extra votes for younger citizens and parents of children. He fears that, absent such measures, “the light of political and personal freedom might once again disappear from the world.”

Unsettling as these forecasts are, the even more troubling thought is that maybe a true crisis is not just inevitable but also necessary to future national success and social cohesion.

Now, I’m grudgingly ready to surrender and accept that the cliché must be true: Washington will not face up to its duty except in a genuine crisis. Then and only then will we, as some would say, focus on the existential threats to our iconic institutions.

Now, market guru John Mauldin has begun forecasting a “great reset” when these unsustainable bills cannot be paid, when “the economy comes crashing down around our ears.” Writing in August, he said he sees this happening “roughly 7-10 years from now.”

Encouragingly, if vaguely, most of these seers retain their optimism. Piereson closes by imagining “a new order on the foundations of the old.” Confessing that he doesn’t “know exactly how it will work,” Mauldin expects us to “muddle through” somehow.

Howe, because he sees his sweeping, socially driven generational cycles recurring all the way back to the Greeks, is the most cavalier. Although “the old American republic is collapsing,” he says, we will soon pass through a “great gate in history,” resolve our challenges and emerge with a “new collective identity.”

Paradoxically, these ominous projections can help worrywarts like me move through what might be called the stages of political grief.

A decade ago, an optimist could tell himself that a democratically mature people could summon the will or the leaders to stop plundering its children’s futures, and to reconcile or at least agree to tolerate sincerely held cultural disagreements.

For a while after that, it seemed plausible to hope for incremental reforms that would enable the keeping of most of our safety-net promises, and for a cooling or exhaustion of our poisonous polarization.

Bowles called what’s coming “the most predictable economic crisis” — there’s that word again, aptly applied — “in history.” And that was many trillions of borrowing ago.

So maybe we might as well get on with it, and hope that we at least “muddle through.” I’ve arrived at the final stage: Crisis? Ready when you are.

This is May 2024: Humanity is in the early stages of a standoff with generative AI, which offers methods through which visual art, writing, music, and computer code can be created by a machine in seconds with the simplest of prompts

Most of us are still in the sizing-up phase for generative AI, staring warily at a technology that’s been hyped as world-changing and job-disrupting (even, some proponents argue, potentially civilization-ending), and been foisted on the public in a very short period of time. It’s a weird, exhausting, exciting, even tense moment. Enter: THE CRUSHER.

There is about a zero percent chance that the company did not understand the optics of releasing this ad at this moment. Apple is among the most sophisticated and moneyed corporations in all the world.

this time, it’s hard to like what the company is showing us. People are angry. One commenter on X called the ad “heartbreaking.

Although watching things explode might be fun, it’s less fun when a multitrillion-dollar tech corporation is the one destroying tools, instruments, and other objects of human expression and creativity.

Apple is a great technology company, but it is a legendary marketer. Its ads, its slickly produced keynotes, and even its retail stores succeed because they offer a vision of the company’s products as tools that give us, the consumers, power.

The third-order annoyance is in the genre. Apple has essentially aped a popular format of “crushing” videos on TikTok, wherein hydraulic presses are employed to obliterate everyday objects for the pleasure of idle scrollers.

It’s unclear whether some of the ad might have been created with CGI, but Apple could easily round up tens of thousands of dollars of expensive equipment and destroy it all on a whim. However small, the ad is a symbol of the company’s dominance.

The iPad was one of Steve Jobs’s final products, one he believed could become as popular and perhaps as transformative as cars. That vision hasn’t panned out. The iPad hasn’t killed books, televisions, or even the iPhone

The iPad is, potentially, a creative tool. It’s also an expensive luxury device whose cheaper iterations, at least, are vessels for letting your kid watch Cocomelon so they don’t melt down in public, reading self-help books on a plane, or opting for more pixels and better resolution whilst consuming content on the toilet.

Odds are, people aren’t really furious at Apple on behalf of the trumpeters—they’re mad because the ad says something about the balance of power

it is easy to be aghast at the idea that AI will wipe out human creativity with cheap synthetic waste.

The fundamental flaw of Apple’s commercial is that it is a display of force that reminds us about this sleight of hand. We are not the powerful entity in this relationship. The creative potential we feel when we pick up one of their shiny devices is actually on loan. At the end of the day, it belongs to Apple, the destroyer.

consider extreme poverty. It too has reached a record low, affecting a bit more than 8 percent of humans worldwide,

All these figures are rough, but it seems that about 100,000 people are now emerging from extreme poverty each day — so they are better able to access clean water, to feed and educate their children, to buy medicines.

If we want to tackle problems — from the war in Gaza to climate change — then it helps to know that progress is possible.

Two horrifying diseases are close to eradication: polio and Guinea worm disease. Only 12 cases of wild poliovirus have been reported worldwide in 2023 (there were also small numbers of vaccine-derived polio, a secondary problem), and 2024 may be the last year in which wild polio is transmitted

Meanwhile, only 11 cases of Guinea worm disease were reported in humans in the first nine months of 2023.

the United States government recently approved new CRISPR gene-editing techniques to treat sickle cell disease — and the hope is that similar approaches can transform the treatment of cancer and other ailments

Another landmark: New vaccines have been approved for R.S.V. and malaria

Blinding trachoma is also on its way out in several countries. A woman suffering from trachoma in Mali once told me that the worst part of the disease wasn’t the blindness but rather the excruciating pain, which she said was as bad as childbirth but lasted for years. So I’m thrilled that Mali and 16 other countries have eliminated trachoma.

“I could not have done it sooner,” he says. “I don’t think anybody could have done it sooner. Because I was the first one.” 

By the late 1960s, he was managing TI’s integrated-circuit division. Before long, he was running the entire semiconductor group. 

He transferred to the Massachusetts Institute of Technology, where he studied mechanical engineering, earned his master’s degree and would have stayed for his Ph.D. if he hadn’t failed the qualifying exam. Instead, he got his first job in semiconductors and moved to Texas Instruments in 1958

he came along as the integrated circuit was being invented, and his timing couldn’t have been any better, as Chang belonged to the first generation of semiconductor geeks. He developed a reputation as a tenacious manager who could wring every possible improvement out of production lines, which put his career on the fast track.

Chang grew up dreaming of being a writer—a novelist, maybe a journalist—and he planned to major in English literature at Harvard University. But after his freshman year, he decided that what he actually wanted was a good job

“They talk about life-work balance,” he says. “That’s a term I didn’t even know when I was their age. Work-life balance. When I was their age, if there was no work, there was no life.” 

These days, TSMC is investing $40 billion to build plants in Arizona, but the project has been stymied by delays, setbacks and labor shortages, and Chang told me that some of TSMC’s young employees in the U.S. have attitudes toward work that he struggles to understand. 

Chang says he wouldn’t have taken the risk of moving to Taiwan if he weren’t financially secure. In fact, he didn’t take that same risk the first time he could have.

“The closer the industry match,” they wrote, “the greater the success rate.” 

By then, Chang knew that he wasn’t long for Texas Instruments. But his stock options hadn’t vested, so he turned down the invitation to Taiwan. “I was not financially secure yet,” he says. “I was never after great wealth. I was only after financial security.” For this corporate executive in the middle of the 1980s, financial security equated to $200,000 a year. “After tax, of course,” he says. 

Chang’s situation had changed by the time Li called again three years later. He’d exercised a few million dollars of stock options and bought tax-exempt municipal bonds that paid enough for him to be financially secure by his living standards. Once he’d achieved that goal, he was ready to pursue another one. 

“There was no certainty at all that Taiwan would give me the chance to build a great semiconductor company, but the possibility existed, and it was the only possibility for me,” Chang says. “That’s why I went to Taiwan.” 

Not long ago, a team of economists investigated whether older entrepreneurs are more successful than younger ones. By scrutinizing Census Bureau records and freshly available Internal Revenue Service data, they were able to identify 2.7 million founders in the U.S. who started companies between 2007 and 2014. Then they looked at their ages.

The average age of those entrepreneurs at the founding of their companies was 41.9. For the fastest-growing companies, that number was 45. The economists also determined that 50-year-old founders were almost twice as likely to achieve major success as 30-year-old founders, while the founders with the lowest chance of success were the ones in their early 20s

“Successful entrepreneurs are middle-aged, not young,” they wrote in their 2020 paper.  

Silicon Valley’s venture capitalists throw money at talented young entrepreneurs in the hopes they will start the next trillion-dollar company. They have plentiful energy, insatiable ambition and the vision to peek around corners and see the future. What they don’t typically have are mortgages, family obligations and other adult responsibilities to distract them or diminish their appetite for risk. Chang himself says that younger people are more innovative when it comes to science and technical subjects. 

But in business, older is better. Entrepreneurs in their 40s and 50s may not have the exuberance to believe they will change the world, but they have the experience to know how they actually can. Some need years of specialized training before they can start a company. In biotechnology, for example, founders are more likely to be college professors than college dropouts. Others require the lessons and connections they accumulate over the course of their careers. 

one more finding from their study of U.S. companies that helps explain the success of a chip maker in Taiwan. It was that prior employment in the area of their startups—both the general sector and specific industry—predicted “a vastly higher probability” of success.

Chang was such a workaholic that he made sales calls on his honeymoon and had no patience for those who didn’t share his drive

Morris Chang had 30 years of experience in his industry when he decided to uproot his life and move to another continent. He knew more about semiconductors than just about anyone on earth—and certainly more than anyone in Taiwan. As soon as he started his job at the Industrial Technology Research Institute, Chang was summoned to K.T. Li’s office and given a second job. “He felt I should start a semiconductor company in Taiwan,”

“I decided right away that this could not be the kind of great company that I wanted to build at either Texas Instruments or General Instrument,”

TI handled every part of chip production, but what worked in Texas would not translate to Taiwan. The only way that he could build a great company in his new home was to make a new sort of company altogether, one with a business model that would exploit the country’s strengths and mitigate its many weaknesses.

Chang determined that Taiwan had precisely one strength in the chip supply chain. The research firm that he was now running had been experimenting with semiconductors for the previous 10 years. When he studied that decade of data, Chang was pleasantly surprised by Taiwan’s yields, the percentage of working chips on silicon wafers. They were almost twice as high in Taiwan as they were in the U.S., he said. 

“People were ingrained in thinking the secret sauce of a successful semiconductor company was in the wafer fab,” Campbell told me. “The transition to the fabless semiconductor model was actually pretty obvious when you thought about it. But it was so against the prevailing wisdom that many people didn’t think about it.” 

Taiwan’s government took a 48% stake, with the rest of the funding coming from the Dutch electronics giant Philips and Taiwan’s private sector, but Chang was the driving force behind the company. The insight to build TSMC around such an unconventional business model was born from his experience, contacts and expertise. He understood his industry deeply enough to disrupt it. 

“TSMC was a business-model innovation,” Chang says. “For innovations of that kind, I think people of a more advanced age are perhaps even more capable than people of a younger age.”

the personal philosophy that he’d developed over the course of his long career. “To be a partner to our customers,” he says. That founding principle from 1987 is the bedrock of the foundry business to this day, as TSMC says the key to its success has always been enabling the success of its customers.  

TSMC manufactures chips in iPhones, iPads and Mac computers for Apple, which manufactures a quarter of TSMC’s net revenue. Nvidia is often called a chip maker, which is curious, because it doesn’t make chips. TSMC does. 

Churning out identical copies of a single chip for an iPhone requires one TSMC fab to produce more than a quintillion transistors—that is, one million trillions—every few months. In a year, the entire semiconductor industry produces “more transistors than the combined quantity of all goods produced by all other companies, in all other industries, in all human history,” Miller writes. 

I asked how he thought about success when he moved to Taiwan. “The highest degree of success in 1985, according to me, was to build a great company. A lower degree of success was at least to do something that I liked to do and I wanted to do,” he says. “I happened to achieve the highest degree of success that I had in mind.” 

“We have an outstanding mayor, who is committed to tackling climate change. She said the 15-minute city will be the backbone for creating a new urban plan. The last time Paris had a new urban plan was in 2000, so this road map will be relevant for the next 10 or 15 years at least,”

“I said to Hidalgo, the 15-minute city is not an urban traffic plan. The 15-minute city is a radical change of our life.”

He also thinks office should generally be closer to homes, as well as cultural venues, doctors, shops and other amenities. Shared spaces such as parks help the people living in the areas to form communities.

They have also often been segmented into wealthier and poorer areas; in the less prosperous area to the north-east of Paris, Moreno says up to 40% of homes are social housing. In the wealthier west of Paris, this drops below 5%.

“My idea is to break this triple segregation,” he says.

Moreno thinks this segregation leads to a poorer quality of life, one designed around outdated “masculine desires”, so his proposal is to mix this up, creating housing developments with a mixture of social, affordable and more expensive housing so different social strata can intermingle

He also wants to bring schools and children’s areas closer to work and home, so caregivers can more easily travel around and participate in societ

When many modern cities were designed, they were for men to work in. Their wives and family stayed in the suburbs, while the workers drove in. So they have been designed around the car, and segmented into different districts: the financial district (think Canary Wharf), the cultural area (for example, the West End) and then the suburbs

The city has also been regenerating the Clichy-Batignolles district in the less prosperous north-west of Paris to have a green, village-like feel. About a quarter of it is taken up by green space and a new park.“As a 15-minute district, it is incredible,” says Moreno. “It is beautiful, it has proximity, social mixing, 50% of the inhabitants live in social housing, 25% in middle class and 25% own their homes.”

Many of his proposals are dear to the culture of the French. In a large, wealthy metropolis such as Paris, it is easy for small shops to be choked out by large chains. The city of Paris, in its new plan, has put measures in to stop this.

“We have a commercial subsidiary of the city of Paris which has put €200m into managing retail areas in the city with rates below the speculative real estate market. This is specifically to rent to small shops, artisans, bakeries, bookstores.

This is not only a good investment because it creates a good economic model, but it keeps the culture of the city of Paris,”

This is in keeping with the 15-minute city plan as it keeps local shops close to housing, so people can stroll down from their apartment to pick up a fresh baguette from an independent baker. “It creates a more vibrant neighbourhood,” he adds.

Hidalgo inevitably faced a large backlash from the motorist lobby. Stroll down the banks of the Seine today in the new protected parks and outdoor bars, and it is hard to imagine that it was recently a traffic-choked highway

“The drivers were radically very noisy, saying that we wanted to attack their individual rights, their freedom. The motorist lobby said she cannot be elected without our support, that they are very powerful in France,” Moreno says. But Hidalgo called their bluff: “She often says ‘I was elected two times, with the opposition of the automotive lobby’. In 2024, nobody requests to open again the highway on the Seine, no one wants the Seine urban park to be open for cars.”

Moreno talks about the concept of a “giant metronome of the city” which causes people to rush around. He wants to slow this down, to allow people to reclaim their “useful time” back from commuting and travelling to shops and cultural areas.

“I bet for the next year, for the next decade, we will have this new transformation of corporation real estate,” he says. “Businesses are choosing multi-use areas with housing, schools, shops for their office space now. The time of the skyscrapers in the masculine design is finished.”

he trickiest question may be how to prevent abuse. AI generators have technological boundaries, but not morals, and it’s relatively easy for users to trick them into creating content that depicts violence, rape, sex with children or a celebrity — or even a crush from work who never consented to appear

In some cases, the engines themselves are trained on porn images whose subjects didn’t explicitly agree to the new use. Currently, no federal laws protect the victims of nonconsensual deepfakes.

Adult entertainment is a giant industry accounting for a substantial chunk of all internet traffic: Major porn sites get more monthly visitors and page views than Amazon, Netflix, TikTok or Zoom

The industry is a habitual early adopter of new technology, from VHS to DVD to dot com. In the mid-2000s, porn companies set up massive sites where users upload and watch free videos, and ad sales foot the bills.

At last year’s AVN conference, Steven Jones said his peers looked at him “like he was crazy” when he talked about AI opportunities: “Nobody was interested.” This year, Jones said, he’s been “the belle of the ball.”

He called up his old business partner, and the two immediately spent about $550,000 securing the web domains for porn dot ai, deepfake dot com and deepfakes dot com, Jones said. “Lightspeed” was back.

One major model, Stable Diffusion, shares its code publicly, and some technologists have figured out how to edit the code to allow for sexual images

What keeps Jones up at night is people trying to use his company’s tools to generate images of abuse, he said. The models have some technological guardrails that make it difficult for users to render children, celebrities or acts of violence. But people are constantly looking for workarounds.

So with help from an angel investor he will not name, Jones hired five employees and a handful of offshore contractors and started building an image engine trained on bundles of freely available pornographic images, as well as thousands of nude photos from Jones’s own collection

Users create what Jones calls a “dream girl,” prompting the AI with descriptions of the character’s appearance, pose and setting. The nudes don’t portray real people, he said. Rather, the goal is to re-create a fantasy from the user’s imagination.

The AI-generated images got better, their computerized sheen growing steadily less noticeable. Jones grew his user base to 500,000 people, many of whom pay to generate more images than the five per day allotted to free accounts, he said. The site’s “power users” generate AI porn for 10 hours a day, he said.

Jones described the site as an “artists’ community” where people can explore their sexualities and fantasies in a safe space. Unlike some corners of the traditional adult industry, no performers are being pressured, underpaid or placed in harm’s way

And critically, consumers don’t have to wait for their favorite OnlyFans performer to come online or trawl through Pornhub to find the content they like.

Next comes AI-generated video — “porn’s holy grail,” Jones said. Eventually, he sees the technology becoming interactive, with users giving instructions to lifelike automated “performers.” Within two years, he said, there will be “fully AI cam girls,” a reference to creators who make solo sex content.

It costs $12 per day to rent a server from Amazon Web Services, he said, and generating a single picture requires users to have access to a corresponding server. His users have so far generated more than 1.6 million images.

Copyright holders including newspapers, photographers and artists have filed a slew of lawsuits against AI companies, claiming the companies trained their models on copyrighted content. If plaintiffs win, it could cut off the free-for-all that benefits entrepreneurs such as Jones.

But Jones’s plan to create consumer-friendly AI porn engines faced significant obstacles. The companies behind major image-generation models used technical boundaries to block “not safe for work” content and, without racy images to learn from, the models weren’t good at re-creating nude bodies or scenes.

Jones said his team takes down images that other users flag as abusive. Their list of blocked prompts currently contains 1,000 terms including “high school.”

“I see certain things people type in, and I just hope to God they’re trying to test the model, like we are. I hope they don’t actually want to see the things they’re typing in.

Peter Acworth, the owner of kink dot com, is trying to teach an AI porn generator to understand even subtler concepts, such as the difference between torture and consensual sexual bondage. For decades Acworth has pushed for spaces — in the real world and online — for consenting adults to explore nonconventional sexual interests. In 2006, he bought the San Francisco Armory, a castle-like building in the city’s Mission neighborhood, and turned it into a studio where his company filmed fetish porn until shuttering in 2017.

Now, Acworth is working with engineers to train an image-generation model on pictures of BDSM, an acronym for bondage and discipline, dominance and submission, sadism and masochism.

Others alluded to a porn apocalypse, with AI wiping out existing models of adult entertainment.“Look around,” said Christian Burke, head of engineering at the adult-industry payment app Melon, gesturing at performers huddled, laughing and hugging across the show floor. “This could look entirely different in a few years.”

But the age of AI brings few guarantees for the people, largely women, who appear in porn. Many have signed broad contracts granting companies the rights to reproduce their likeness in any medium for the rest of time

Not only could performers lose income, Walters said, they could find themselves in offensive or abusive scenes they never consented to.

Lana Smalls, a 23-year-old performer whose videos have been viewed 20 million times on Pornhub, said she’s had colleagues show up to shoots with major studios only to be surprised by sweeping AI clauses in their contracts.

“This industry is too fragmented for collective bargaining,” Spiegler said. “Plus, this industry doesn’t like rules.”