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

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. 

“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. 

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

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.

Beijing has policy options.

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

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

"This package is also focused on protecting people from volatile gas prices, and advancing clean transportation," Newsom said.Rebates like the ones Newsom is proposing take time to deliver, with the governor's office saying people could see the money by July.Rising fuel prices are a tricky policy issue for Newsom, who is trying to wean the state off fossil fuels. He has signed executive orders aimed at banning the sale of new gas-powered cars in the state by 2035 and halting all oil extraction by 2045.He has proposed a total of $10 billion in funding over six years to boost zero-emission vehicle production and build charging stations.

Newsom's plan must be approved by the Legislature, where Democrats dominate both the Assembly and the Senate. Democratic leaders, however, don't like the idea of giving money to rich people.They have been discussing their own rebate proposal, one that would give $200 rebates to every taxpayer and their children with taxable income less than $125,000 for single filers and $250,000 for joint filers. That means a family of five would get $1,000 while a single parent with two children would get $600.

A spokesperson for Democratic Assembly Speaker Anthony Rendon called Newsom's idea "consistent with the Speaker's goal of providing targeted financial relief to Californians most in need" but stressed the idea is "in the very early stages."Newsom's plan is similar to a separate proposal floated last week by more moderate Democrats in the state Assembly that would give every taxpayer $400, regardless of income.

"People need relief now," said Assembly Republican Leader James Gallagher. "We've got now, like, four different competing plans amongst the Democrats. These guys are going to negotiate against themselves for weeks to months and who knows what we're going to get."

But Ukrainians never thought that the alliance and the allies were different."Zelenskyy told NATO that his country still needs more military equipment, specifically tanks and fighter jets, and chided them for not establishing a no-fly zone.

Biden has committed $2 billion in military assistance to Ukraine since the start of his presidency, including an $800 million military package last week.

The NATO summit was followed by a meeting with leaders of the Group of Seven leading industrial nations and an address to European Union leaders, the White House said.

The U.S. also said that international organizations and multilateral corporations should no longer conduct their activities with Russia in a business-as-usual manner, the second official said. “Our purpose here is to methodically remove the benefits and privileges Russia once enjoyed as a participant in the international economic order,” the official said.The new sanctions include 328 Duma members; Herman Gref, the head of Russia’s largest financial institution Sberbank and a Putin adviser since the 1990s; member of the Russian elite Gennady Timchenko, his companies and his family members; 17 board members of the Russian financial institution Sovcombank; and 48 large Russian defense state-owned enterprises

As the biggest conflict in Europe since World War II enters its second month, the discussions here could be among the most consequential of Biden’s presidency. When Biden was asked as he was leaving the White House for Brussels how likely he thought the threat of chemical warfare was, he said, “I think it’s a real threat.”  

“We are united in condemning the Kremlin’s unprovoked aggression and in our support for Ukraine sovereignty and integrity," NATO Secretary-General Jens Stoltenberg said ahead of the meeting. The group would also discuss efforts to strengthen the military alliance's defenses in the short and the long term, he said.

Biden plans to travel to Poland on Friday to offer support as it deals with millions of refugees who are fleeing the conflict and to thank U.S. troops stationed there.

Leaders in the deeply conservative Utah say they need the law to protect women's sports. As cultural shifts raise LGBTQ visibility, the lawmakers argue that, without their intervention, more transgender athletes with apparent physical advantages could eventually dominate the field and change the nature of women's sports.

he team is also partially owned by NBA all-star Dwyane Wade, who has a transgender daughter.

The looming threat of a lawsuit worries school districts and the Utah High School Athletic Association, which has said it lacks the funds to defend the policy in court. Later Friday, lawmakers are expected to change the bill so state money would cover legal fees.

The group Visit Salt Lake, which hosts conferences, shows and events, said the override could cost the state $50 million in lost revenue. The Utah-based DNA-testing genealogy giant Ancestry.com also urged the Legislature to find another way. The American Principles Project is confident that states with bans won't face boycotts like North Carolina did after limiting public restrooms transgender people could use. It focused on legislation in populous, economic juggernaut states like Texas and Florida that would be harder to boycott, Schilling said.

Friday's deliberations came after more than a year of debate and negotiation between social conservatives and LGBTQ advocates. Republican sponsor Rep. Kera Birkeland worked with Cox and civil rights activists at Equality Utah before introducing legislation that would require transgender student-athletes to go before a government-appointed commission.

The proposal, although framed as a compromise, failed to gain traction on either side. LGBTQ advocates took issue with Republican politicians appointing commission members and evaluation criteria that included body measurements such as hip-to-knee ratio.

But the ban won support from a vocal conservative base that has particular sway in Utah's state primary season. Even with primaries looming, however, some Republicans stood with Cox to reject the ban.

Ready for more bad infectious diseases news? There's an outbreak of bird flu making its way into U.S. poultry flocks. If the virus continues to spread, it could affect poultry prices — already higher amid widespread inflation. The price of chicken breasts this week averaged $3.63 per pound at U.S. supermarkets — up from $3.01 a week earlier and $2.42 at this time last year, the Agriculture Department says.

The latest data from the USDA show 59 confirmed sites of avian flu across commercial and backyard flocks in 17 states since the start of the year. That figure includes chickens, turkey and other poultry. The USDA identified a case of avian flu in a wild bird in mid-January, the first detection of the virus in wild birds in the U.S. since 2016. Wild birds can spread the virus to commercial and backyard flocks. By Feb. 9, the virus had been identified in a commercial flock in Indiana.

The last major avian flu outbreak in the U.S. was from December 2014 to June 2015, when more than 50 million chickens and turkeys either died from highly pathogenic avian influenza (HPAI) or were destroyed to stop its spread.

Whether the 2022 avian flu will affect the price of eggs and poultry depends on how widespread it becomes, says Ron Kean, a poultry science expert at the University of Wisconsin-Madison Department of Animal and Dairy Sciences. "In 2015, we did see quite an increase in egg prices," Kean told Wisconsin Public Radio. "The chicken meat wasn't severely affected at that time. We did see quite a loss in turkeys, so turkey prices went up. So, we'll see. If a lot of farms contract this, then we could see some real increases in price."

For producers who suspect their flock may be affected by avian flu, the USDA has a guide to the warning signs, including a sudden increase in bird deaths, lack of energy and appetite, and a decrease in egg production. If a flock is found to be infected by bird flu, the USDA moves quickly — within 24 hours — to assist producers to destroy the flock and prevent the virus from spreading.

A new Virginia state law prohibiting mask mandates in public schools does not apply to 12 students with disabilities whose parents challenged the law, a federal judge has ruled. Last month, the parents of 12 students across Virginia asked the court to halt enforcement of the law, saying it violated their rights under the federal American with Disabilities Act. The law, signed by newly elected Republican Gov. Glenn Youngkin, went into effect March 1; it gives parents a say over whether their children should wear masks in school.

The group of parents have children whose health conditions range from cystic fibrosis to asthma that put them at heightened risk for COVID-19.

The American Civil Liberties Union, which was one of several legal organizations that filed on behalf of the plaintiffs, said the injunction served as a "blueprint."

In a statement, Virginia Attorney General Jason Miyares said the ruling affirms that "parents have the right to make choices for their children."

When Judge Katanji Brown Jackson entered the Senate chamber this week to face questions on her readiness to join the Supreme Court, she did so as the first Black woman in the nation's history to be nominated to that position. For many Black law students and professionals, including a group of 150 who traveled from across the country to watch the historic hearing, Jackson's rise to likely associate justice gives a message of profound hope for what they too might one day be able to accomplish.

Dudley was one of 100 law students selected nationwide to attend a series of events and watch parties for Jackson's nomination, hosted by the progressive organization, Demand Justice. The group also included 50 public defenders — a nod to Jackson's own background in that field. "I see a lot of myself in her. I see a lot of my friends in her, and I wanted to be there to support," Dudley said, calling Jackson "overly qualified to sit on the Supreme Court."

The cohort of legal professionals cheered on Jackson as she faced questions from Republicans about her past cases, particularly those relating to child sex abuse, and on what school of thought she would bring to determining the constitutionality of high-profile cases. Republicans had vowed to oppose President Joe Biden's nominees to the court, and when news of Justice Stephen Breyer's imminent retirement broke, the GOP quickly mobilized to attack potential nominees who might replace the longtime liberal justice on the bench.

Particularly, some sentencing decisions in child pornography cases drew GOP fire. But Jackson's measured responses throughout the three days of questioning solidified the support of many onlookers, who reveled in what it would mean to have a Black woman sit on the bench for the first time in the court's 233-year history. "The fact of the matter is that I'm the father of three black girls, right? And to be able to tell them that finally, someone who is Black — female nonetheless — is finally on the precipice of a mountain that has never been climbed before by any other Black woman, is huge," said Edrius Stagg, a third-year law student at Southern University Law Center in Baton Rouge.

Sen. Joe Manchin of West Virginia — whose break from Democrats on a number of politically fraught votes had worried some as to whether he would support Biden's nominee — announced on Friday he would vote in favor of Jackson's confirmation, all but assuring her path to join the bench.

For some, the optics of seeing Jackson — a Black woman — defend her credentials to a group of largely white, predominantly male detractors, was a familiar scene. It has played out, students said, in workplaces the world over and across the socioeconomic spectrum.

Booker called the attacks on Jackson's record "dangerous" and "disingenuous," noting the complexities of cases that had been boiled down to their basest points in order to damage Jackson's image.

"I'm not gonna let my joy be stolen," he continued. "Because I know, you and I, we appreciate something that we get that a lot of my colleagues don't." And while Jackson's opponents peppered her with politically polarizing questions, her supporters grew even more convinced that Jackson was qualified for the job. "To see her hold her composure and just answer the questions just to the best of her capabilities was just really great to see," said Jasmine McMillion, a third-year law student at Florida Agricultural and Mechanical University College of Law.

There is, needless to say, no escape route into social housing. There are reckoned to be about 1.2m households on local waiting lists in England

thanks to post-2010 austerity, 40 local authority areas – including Peterborough, Luton, the Isle of Wight and parts of Greater Manchester – had neither built nor acquired any new social housing between 2016 and 2021

: it was just a mundane and reassuring reality, and the foundation of millions of lives.

The private rented sector is what it has always been, only more so: a repository for people held back from either home ownership or social housing, where lives are often damaged by the rawest kind of business practices.

56% of first-time buyers aged under 35 needed a “financial gift” from their parents to buy a flat or house. Even if prices slowly fall, the old Tory vision of the property-owning democracy seems to have shrunk into a rigid oligarchy, built on very familiar foundations of class, age and wealth.

Recent(ish) history suggests there might be an alternative: council housing with lifelong, secure tenancies. Fifty or so years ago, thanks to investment by both Labour and Conservative governments, about a third of us lived in homes like that

even if access to the bank of Mum and Dad means you can just about afford to buy, isn’t the current reality of shoved-up interest rates and declining property prices a reminder of what that may well entail? Chasing security now means being at the mercy of its complete opposite: the hurly burly of financial markets, and fears of negative equity and repossession.

The foreground of Labour policy, however, is all about home ownership. Not unreasonably, Keir Starmer sees buying a house as “the bedrock of security and aspiration”, and often makes glowing references to the pebble-dashed semi in which he grew up

Given the chance, he will apparently lead a government set on pursuing a 70% target for home ownership, up from England’s current figure of 64%. Th

the party’s first actions in government will include “helping first-time buyers on to the housing ladder and building more affordable homes by reforming planning rules”. Labour, we are told, “is the party of home ownership in Britain today”.

There are signs that Labour has at least the beginnings of an answer. Lisa Nandy insists that she will be the first housing minister in decades to ensure that social housing provides for more people than the private rented sector; her mantra, she says, will be “council housing, council housing, council housing”

Even healthy and influential private companies can be ordered to undergo painful restructuring or curtail certain business operations

When nearly every renminbi borrowed is domestic — lent by a Chinese creditor to a Chinese borrower — it gives regulators a degree of control over debt problems that their Western counterparts can only dream of.

Even the makeup of China’s high debt levels has a silver lining for regulators. China’s aggregate ratio of debt to gross domestic product was almost 300 percent (or around $52 trillion) in September 2022, compared to 257 percent for the United States.

But less than 5 percent of China’s debt is external, amounting to $2.5 trillion, one-tenth of the U.S. level.

Ultimately, all of this serves the party’s absolute priority of maintaining social stability; there is zero tolerance for financial distress or major corporate failures that could trigger street demonstrations

instead of introducing reforms to establish a healthy market-based economy in which inefficient businesses are allowed to fail, China’s Evergrande-style fixes — while defusing short-term crises — reward irresponsible behavior and perpetuate the excessive borrowing and wasteful use of funding that leads to recurring financial distress.

Soft landings may become harder to achieve. China faces perhaps its greatest array of economic challenges since it began reopening to the outside world in the late 1970s: high debt, an ailing real estate sector, a long-term economic slowdown, rising unemployment, an aging and shrinking population and worsening trade and diplomatic relations with the United States.

There is a very real risk that China could suffer the same fate as Japan, which is still struggling to emerge from an extended period of economic stagnation that began in the 1990s. Japan’s troubles were caused, in part, by a burst real estate bubble and financial-sector problems similar to what China is now facing.

China’s regulatory troubleshooters have proven the financial doomsayers wrong again and again. But their biggest test may yet lie ahead.

The Tesla Inc. CEO tweeted in February that OpenAI had been founded as an open-source nonprofit “to serve as a counterweight to Google, but now it has become a closed source, maximum-profit company effectively controlled by Microsoft. Not what I intended at all.”

Backers say his brand of social-minded capitalism makes him the ideal person to lead OpenAI. Others, including some who’ve worked for him, say he’s too commercially minded and immersed in Silicon Valley thinking to lead a technological revolution that is already reshaping business and social life. 

In the long run, he said, he wants to set up a global governance structure that would oversee decisions about the future of AI and gradually reduce the power OpenAI’s executive team has over its technology. 

OpenAI researchers soon concluded that the most promising path to achieve artificial general intelligence rested in large language models, or computer programs that mimic the way humans read and write. Such models were trained on large volumes of text and required a massive amount of computing power that OpenAI wasn’t equipped to fund as a nonprofit, according to Mr. Altman. 

In its founding charter, OpenAI pledged to abandon its research efforts if another project came close to building AGI before it did. The goal, the company said, was to avoid a race toward building dangerous AI systems fueled by competition and instead prioritize the safety of humanity.

While running Y Combinator, Mr. Altman began to nurse a growing fear that large research labs like DeepMind, purchased by Google in 2014, were creating potentially dangerous AI technologies outside the public eye. Mr. Musk has voiced similar concerns of a dystopian world controlled by powerful AI machines. 

Messrs. Altman and Musk decided it was time to start their own lab. Both were part of a group that pledged $1 billion to the nonprofit, OpenAI Inc. 

Mr. Altman said he doesn’t necessarily need to be first to develop artificial general intelligence, a world long imagined by researchers and science-fiction writers where software isn’t just good at one specific task like generating text or images but can understand and learn as well or better than a human can. He instead said OpenAI’s ultimate mission is to build AGI, as it’s called, safely.

“We didn’t have a visceral sense of just how expensive this project was going to be,” he said. “We still don’t.”

Tensions also grew with Mr. Musk, who became frustrated with the slow progress and pushed for more control over the organization, people familiar with the matter said. 

OpenAI executives ended up reviving an unusual idea that had been floated earlier in the company’s history: creating a for-profit arm, OpenAI LP, that would report to the nonprofit parent. 

Reid Hoffman, a LinkedIn co-founder who advised OpenAI at the time and later served on the board, said the idea was to attract investors eager to make money from the commercial release of some OpenAI technology, accelerating OpenAI’s progress

“You want to be there first and you want to be setting the norms,” he said. “That’s part of the reason why speed is a moral and ethical thing here.”

The decision further alienated Mr. Musk, the people familiar with the matter said. He parted ways with OpenAI in February 2018. 

Mr. Musk announced his departure in a company all-hands, former employees who attended the meeting said. Mr. Musk explained that he thought he had a better chance at creating artificial general intelligence through Tesla, where he had access to greater resources, they said.

OpenAI said that it received about $130 million in contributions from the initial $1 billion pledge, but that further donations were no longer needed after the for-profit’s creation. Mr. Musk has tweeted that he donated around $100 million to OpenAI. 

Mr. Musk’s departure marked a turning point. Later that year, OpenAI leaders told employees that Mr. Altman was set to lead the company. He formally became CEO and helped complete the creation of the for-profit subsidiary in early 2019.

A young researcher questioned whether Mr. Musk had thought through the safety implications, the former employees said. Mr. Musk grew visibly frustrated and called the intern a “jackass,” leaving employees stunned, they said. It was the last time many of them would see Mr. Musk in person.  

In the meantime, Mr. Altman began hunting for investors. His break came at Allen & Co.’s annual conference in Sun Valley, Idaho in the summer of 2018, where he bumped into Satya Nadella, the Microsoft CEO, on a stairwell and pitched him on OpenAI. Mr. Nadella said he was intrigued. The conversations picked up that winter.

“I remember coming back to the team after and I was like, this is the only partner,” Mr. Altman said. “They get the safety stuff, they get artificial general intelligence. They have the capital, they have the ability to run the compute.”   

Mr. Altman disagreed. “The unusual thing about Microsoft as a partner is that it let us keep all the tenets that we think are important to our mission,” he said, including profit caps and the commitment to assist another project if it got to AGI first. 

Some employees still saw the deal as a Faustian bargain. 

OpenAI’s lead safety researcher, Dario Amodei, and his lieutenants feared the deal would allow Microsoft to sell products using powerful OpenAI technology before it was put through enough safety testing,

They felt that OpenAI’s technology was far from ready for a large release—let alone with one of the world’s largest software companies—worrying it could malfunction or be misused for harm in ways they couldn’t predict.  

Mr. Amodei also worried the deal would tether OpenAI’s ship to just one company—Microsoft—making it more difficult for OpenAI to stay true to its founding charter’s commitment to assist another project if it got to AGI first, the former employees said.

Microsoft initially invested $1 billion in OpenAI. While the deal gave OpenAI its needed money, it came with a hitch: exclusivity. OpenAI agreed to only use Microsoft’s giant computer servers, via its Azure cloud service, to train its AI models, and to give the tech giant the sole right to license OpenAI’s technology for future products.

In a recent investment deck, Anthropic said it was “committed to large-scale commercialization” to achieve the creation of safe AGI, and that it “fully committed” to a commercial approach in September. The company was founded as an AI safety and research company and said at the time that it might look to create commercial value from its products. 

Mr. Altman “has presided over a 180-degree pivot that seems to me to be only giving lip service to concern for humanity,” he said. 

“The deal completely undermines those tenets to which they secured nonprofit status,” said Gary Marcus, an emeritus professor of psychology and neural science at New York University who co-founded a machine-learning company

The cash turbocharged OpenAI’s progress, giving researchers access to the computing power needed to improve large language models, which were trained on billions of pages of publicly available text. OpenAI soon developed a more powerful language model called GPT-3 and then sold developers access to the technology in June 2020 through packaged lines of code known as application program interfaces, or APIs. 

Mr. Altman and Mr. Amodei clashed again over the release of the API, former employees said. Mr. Amodei wanted a more limited and staged release of the product to help reduce publicity and allow the safety team to conduct more testing on a smaller group of users, former employees said. 

Mr. Amodei left the company a few months later along with several others to found a rival AI lab called Anthropic. “They had a different opinion about how to best get to safe AGI than we did,” Mr. Altman said.

Anthropic has since received more than $300 million from Google this year and released its own AI chatbot called Claude in March, which is also available to developers through an API. 

Mr. Altman shared the contract with employees as it was being negotiated, hosting all-hands and office hours to allay concerns that the partnership contradicted OpenAI’s initial pledge to develop artificial intelligence outside the corporate world, the former employees said. 

In the three years after the initial deal, Microsoft invested a total of $3 billion in OpenAI, according to investor documents. 

More than one million users signed up for ChatGPT within five days of its November release, a speed that surprised even Mr. Altman. It followed the company’s introduction of DALL-E 2, which can generate sophisticated images from text prompts.

By February, it had reached 100 million users, according to analysts at UBS, the fastest pace by a consumer app in history to reach that mark.

n’s close associates praise his ability to balance OpenAI’s priorities. No one better navigates between the “Scylla of misplaced idealism” and the “Charybdis of myopic ambition,” Mr. Thiel said. 

Mr. Altman said he delayed the release of the latest version of its model, GPT-4, from last year to March to run additional safety tests. Users had reported some disturbing experiences with the model, integrated into Bing, where the software hallucinated—meaning it made up answers to questions it didn’t know. It issued ominous warnings and made threats. 

“The way to get it right is to have people engage with it, explore these systems, study them, to learn how to make them safe,” Mr. Altman said.

After Microsoft’s initial investment is paid back, it would capture 49% of OpenAI’s profits until the profit cap, up from 21% under prior arrangements, the documents show. OpenAI Inc., the nonprofit parent, would get the rest.

He has put almost all his liquid wealth in recent years in two companies. He has put $375 million into Helion Energy, which is seeking to create carbon-free energy from nuclear fusion and is close to creating “legitimate net-gain energy in a real demo,” Mr. Altman said.

He has also put $180 million into Retro, which aims to add 10 years to the human lifespan through “cellular reprogramming, plasma-inspired therapeutics and autophagy,” or the reuse of old and damaged cell parts, according to the company. 

He noted how much easier these problems are, morally, than AI. “If you’re making nuclear fusion, it’s all upside. It’s just good,” he said. “If you’re making AI, it is potentially very good, potentially very terrible.” 

Teachers are not only burnt out and undercompensated, they are also demoralized. They are being asked to do things in the name of teaching that they believe are mis-educational and harmful to students and the profession. What made this work good for them is no longer accessible. That is why we are hearing so many refrains of “I’m not leaving the profession, my profession left me.”

We find there are at least 36,000 vacant positions along with at least 163,000 positions being held by underqualified teachers, both of which are conservative estimates of the extent of teacher shortages nationally.

“The current problem of teacher shortages (I would further break this down into vacancy and under-qualification) is higher than normal.” The data, Nguyen continued, “indicate that shortages are worsening over time, particularly over the last few years

a growing gap between the pay of all college graduates and teacher salaries from 1979 to 2021, with a sharp increase in the differential since 2010

The number of qualified teachers is declining for the whole country and the vast majority of states.

Wages are essentially unchanged from 2000 to 2020 after adjusting for inflation. Teachers have about the same number of students. But, teacher accountability reforms have increased the demands on their positions.

The pandemic was very difficult for teachers. Their self-reported level of stress was about as twice as high during the pandemic compared to other working adults. Teachers had to worry both about their personal safety and deal with teaching/caring for students who are grieving lost family members.

the number of students graduating from college with bachelor’s degrees in education fell from 176,307 in 1970-71 to 104,008 in 2010-11 to 85,058 in 2019-20.

We do see that southern states (e.g., Mississippi, Alabama, Georgia and Florida) have very high vacancies and high vacancy rates.”

By 2021, teachers made $1,348, 32.9 percent less than what other graduates made, at $2,009.

These gaps play a significant role in determining the quality of teachers,

Sixty percent of teachers and 65 percent of principals reported believing that systemic racism exists. Only about 20 percent of teachers and principals reported that they believe systemic racism does not exist, and the remainder were not sure

“We find,” they write, “that teachers’ cognitive skills differ widely among nations — and that these differences matter greatly for students’ success in school. An increase of one standard deviation in teacher cognitive skills is associated with an increase of 10 to 15 percent of a standard deviation in student performance.”

teachers have lower cognitive skills, on average, in countries with greater nonteaching job opportunities for women in high-skill occupations and where teaching pays relatively less than other professions.

the scholars found that the cognitive skills of teachers in the United States fell in the middle ranks:Teachers in the United States perform worse than the average teacher sample-wide in numeracy, with a median score of 284 points out of a possible 500, compared to the sample-wide average of 292 points. In literacy, they perform slightly better than average, with a median score of 301 points compared to the sample-wide average of 295 points.

Increasing teacher numeracy skills by one standard deviation increases student performance by nearly 15 percent of a standard deviation on the PISA math test. Our estimate of the effect of increasing teacher literacy skills on students’ reading performance is slightly smaller, at 10 percent of a standard deviation.

How, then, to raise teacher skill level in the United States? Hanushek and his two colleagues have a simple answer: raise teacher pay to make it as attractive to college graduates as high-skill jobs in other fields.

policymakers will need to do more than raise teacher pay across the board to ensure positive results. They must ensure that higher salaries go to more effective teachers.

The teaching of disputed subjects in schools has compounded many of the difficulties in American education.

The researchers found that controversies over critical race theory, sex education and transgender issues — aggravated by divisive debates over responses to Covid and its aftermath — are inflicting a heavy toll on teachers and principals.

“On top of the herculean task of carrying out the essential functions of their jobs,” they write, “educators increasingly find themselves in the position of addressing contentious, politicized issues in their schools as the United States has experienced increasing political polarization.”

Teachers and principals, they add, “have been pulled in multiple directions as they try to balance and reconcile not only their own beliefs on such matters but also the beliefs of others around them, including their leaders, fellow staff, students, and students’ family members.”

These conflicting pressures take place in a climate where “emotions in response to these issues have run high within communities, resulting in the harassment of educators, bans against literature depicting diverse characters, and calls for increased parental involvement in deciding academic content.”

Forty-eight percent of principals and 40 percent of teachers reported that the intrusion of political issues and opinions in school leadership or teaching, respectively, was a job-related stressor. By comparison, only 16 percent of working adults indicated that the intrusion of political issues and opinions in their jobs was a source of job-related stress

In 1979, the average teacher weekly salary (in 2021 dollars) was $1,052, 22.9 percent less than other college graduates’, at $1,364

Nearly all Black or African American principals (92 percent) and teachers (87 percent) reported believing that systemic racism exists.

White educators working in predominantly white school systems reported substantially more pressure to deal with politically divisive issues than educators of color and those working in mostly minority schools: “Forty-one percent of white teachers and 52 percent of white teachers and principals selected the intrusion of political issues and opinions into their professions as a job-related stressor, compared with 36 percent of teachers of color and principals of color.

and opinions into their professions as a job-related stressor, compar

A 54 percent majority of teachers and principals said there “should not be legal limits on classroom conversations about racism, sexism, and other topics,” while 20 percent said there should be legislated constraint

Voters, in turn, are highly polarized on the teaching of issues impinging on race or ethnicity in public schools. The Education Next 2022 Survey asked, for example:Some people think their local public schools place too little emphasis on slavery, racism and other challenges faced by Black people in the United States. Other people think their local public schools place too much emphasis on these topics. What is your view about your local public schools?

Among Democrats, 55 percent said too little emphasis was placed on slavery, racism and other challenges faced by Black people, and 8 percent said too much.

Among Republicans, 51 said too much and 10 percent said too little.

Because of the lack of reliable national data, there is widespread disagreement among scholars of education over the scope and severity of the shortage of credentialed teachers, although there is more agreement that these problems are worse in low-income, high majority-minority school systems and in STEM and special education faculties.

Public schools increasingly are targets of conservative political groups focusing on what they term “Critical Race Theory,” as well as issues of sexuality and gender identity. These political conflicts have created a broad chilling effect that has limited opportunities for students to practice respectful dialogue on controversial topics and made it harder to address rampant misinformation.

The chilling effect also has led to marked declines in general support for teaching about race, racism, and racial and ethnic diversity.

These political conflicts, the authors wrote,have made the already hard work of public education more difficult, undermining school management, negatively impacting staff, and heightening student stress and anxiety. Several principals shared that they were reconsidering their own roles in public education in light of the rage at teachers and rage at administrators’ playing out in their communities.

State University of New York tracked trends on “four interrelated constructs: professional prestige, interest among students, preparation for entry, and job satisfaction” for 50 years, from the 1970s to the present and founda consistent and dynamic pattern across every measure: a rapid decline in the 1970s, a swift rise in the 1980s, relative stability for two decades, and a sustained drop beginning around 2010. The current state of the teaching profession is at or near its lowest levels in 50 years.

Who among the next generation of college graduates will choose to teach?

Perceptions of teacher prestige have fallen between 20 percent and 47 percent in the last decade to be at or near the lowest levels recorded over the last half century

Interest in the teaching profession among high school seniors and college freshmen has fallen 50 percent since the 1990s, and 38 percent since 2010, reaching the lowest level in the last 50 years

the proportion of college graduates that go into teaching is at a 50-year low

Teachers’ job satisfaction is also at the lowest level in five decades, with the percent of teachers who feel the stress of their job is worth it dropping from 81 percent to 42 percent in the last 15 years

The combination of these factors — declining prestige, lower pay than other professions that require a college education, increased workloads, and political and ideological pressures — is creating both intended and unintended consequences for teacher accountability reforms mandating tougher licensing rules, evaluations and skill testing.

Education policy over the past decade has focused considerable effort on improving human capital in schools through teacher accountability. These reforms, and the research upon which they drew, were based on strong assumptions about how accountability would affect who decided to become a teacher. Counter to most assumptions, our findings document how teacher accountability reduced the supply of new teacher candidates by, in part, decreasing perceived job security, satisfaction and autonomy.

The reforms, Kraft and colleagues continued, increasedthe likelihood that schools could not fill vacant teaching positions. Even more concerning, effects on unfilled vacancies were concentrated in hard-to-staff schools that often serve larger populations of low-income students and students of color

We find that evaluation reforms increased the quality of newly hired novice teachers by reducing the number of teachers that graduated from the least selective institutions

We find no evidence that evaluation reforms served to attract teachers who attended the most selective undergraduate institutions.

In other words, the economic incentives, salary structure and work-life pressures characteristic of public education employment have created a climate in which contemporary education reforms have perverse and unintended consequences that can worsen rather than alleviate the problems facing school systems.

If so, to improve the overall quality of the nation’s more than three million public schoolteachers, reformers may want to give priority to paychecks, working conditions, teacher autonomy and punishing workloads before attempting to impose higher standards, tougher evaluations and less job security.

To the uninitiated, the fact that Bankman-Fried saw a special urgency in preventing killer robots from taking over the world might sound too outlandish to seem particularly effective or altruistic. But it turns out that some of the most influential E.A. literature happens to be preoccupied with killer robots too.

Holden Karnofsky, a former hedge funder and a founder of GiveWell, an organization that assesses the cost-effectiveness of charities, has spoken about the need for “worldview diversification” — recognizing that there might be multiple ways of doing measurable good in a world filled with suffering and uncertainty

The books, however, are another matter. Considerations of immediate need pale next to speculations about existential risk — not just earthly concerns about climate change and pandemics but also (and perhaps most appealingly for some tech entrepreneurs) more extravagant theorizing about space colonization and A.I.

there’s a remarkable intellectual homogeneity; the dominant voices belong to white male philosophers at Oxford.

Among his E.A. innovations has been the career research organization known as 80,000 Hours, which promotes “earning to give” — the idea that altruistic people should pursue careers that will earn them oodles of money, which they can then donate to E.A. causes.

each of those terse sentences glosses over a host of additional questions, and it takes MacAskill an entire book to address them. Take the notion that “future people count.” Leaving aside the possibility that the very contemplation of a hypothetical person may not, for some real people, be “intuitive” at all, another question remains: Do future people count for more or less than existing people count for right now?

MacAskill cites the philosopher Derek Parfit, whose ideas about population ethics in his 1984 book “Reasons and Persons” have been influential in E.A. Parfit argued that an extinction-level event that destroyed 100 percent of the population should worry us much more than a near-extinction event that spared a minuscule population (which would presumably go on to procreate), because the number of potential lives dwarfs the number of existing ones.

If you’re a utilitarian committed to “the greatest good for the greatest number,” the arithmetic looks irrefutable. The Times’s Ezra Klein has written about his support for effective altruism while also thoughtfully critiquing longtermism’s more fanatical expressions of “mathematical blackmail.”

In 2015, MacAskill published “Doing Good Better,” which is also about the virtues of effective altruism. His concerns in that book (blindness, deworming) seem downright quaint when compared with the astral-plane conjectures (A.I., building an “interstellar civilization”) that he would go on to pursue in “What We Owe the Future.”

In both books he emphasizes the desirability of seeking out “neglectedness” — problems that haven’t attracted enough attention so that you, as an effective altruist, can be more “impactful.” So climate change, MacAskill says, isn’t really where it’s at anymore; readers would do better to focus on “the issues around A.I. development,” which are “radically more neglected.

In his recent best seller, “What We Owe the Future” (2022), MacAskill says that the case for effective altruism giving priority to the longtermist view can be distilled into three simple sentences: “Future people count. There could be a lot of them. We can make their lives go better.”

“Earning to give” has its roots in the work of the radical utilitarian philosopher Peter Singer, whose 1972 essay “Famine, Affluence and Morality” has been a foundational E.A. text. It contains his parable of the drowning child: If you’re walking past a shallow pond and see a child drowning, you should wade in and save the child, even if it means muddying your clothes

Extrapolating from that principle suggests that if you can save a life by donating an amount of money that won’t pose any significant problems for you, a decision not to donate that money would be not only uncharitable or ungenerous but morally wrong.

Singer has also written his own book about effective altruism, “The Most Good You Can Do” (2015), in which he argues that going into finance would be an excellent career choice for the aspiring effective altruist. He acknowledges the risks for harm, but he deems them worth it

Chances are, if you don’t become a charity worker, someone else will ably do the job; whereas if you don’t become a financier who gives his money away, who’s to say that the person who does become a financier won’t hoard all his riches for himself?

On Nov. 11, when FTX filed for bankruptcy amid allegations of financial impropriety, MacAskill wrote a long Twitter thread expressing his shock and his anguish, as he wrestled in real time with what Bankman-Fried had wrought.

“If those involved deceived others and engaged in fraud (whether illegal or not) that may cost many thousands of people their savings, they entirely abandoned the principles of the effective altruism community,” MacAskill wrote in a Tweet, followed by screenshots from “What We Owe the Future” and Ord’s “The Precipice” that emphasized the importance of honesty and integrity.

I’m guessing that Bankman-Fried may not have read the pertinent parts of those books — if, that is, he read any parts of those books at all. “I would never read a book,” Bankman-Fried said earlier this year. “I’m very skeptical of books. I don’t want to say no book is ever worth reading, but I actually do believe something pretty close to that.”

Avoiding books is an efficient method for absorbing the crudest version of effective altruism while gliding past the caveats

For all of MacAskill’s galaxy-brain disquisitions on “A.I. takeover” and the “moral case for space settlement,” perhaps the E.A. fixation on “neglectedness” and existential risks made him less attentive to more familiar risks — human, banal and closer to home.

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.

a “builder class”—a brains trust of youngish idealists, which includes Patrick Collison, co-founder of Stripe, a payments firm valued at $74bn, and other (mostly white and male) techies, who are posing questions that go far beyond the usual interests of Silicon Valley’s titans. They include the future of man and machine, the constraints on economic growth, and the nature of government.

They share other similarities. Business provided them with their clout, but doesn’t seem to satisfy their ambition

The number of techno-billionaires in America (Mr Collison included) has more than doubled in a decade.

ome of them, like the Medicis in medieval Florence, are keen to use their money to bankroll the intellectual ferment

The other is Paul Graham, co-founder of Y Combinator, a startup accelerator, whose essays on everything from cities to politics are considered required reading on tech campuses.

Mr Altman puts it more optimistically: “The iPhone and cloud computing enabled a Cambrian explosion of new technology. Some things went right and some went wrong. But one thing that went weirdly right is a lot of people got rich and said ‘OK, now what?’”

A belief that with money and brains they can reboot social progress is the essence of this new mindset, making it resolutely upbeat

The question is: are the rest of them further evidence of the tech industry’s hubristic decadence? Or do they reflect the start of a welcome capacity for renewal?

Two well-known entrepreneurs from that era provided the intellectual seed capital for some of today’s techno nerds.

Mr Thiel, a would-be libertarian philosopher and investor

This cohort of eggheads starts from common ground: frustration with what they see as sluggish progress in the world around them.

In the 2000s Mr Thiel supported the emergence of a small community of online bloggers, self-named the “rationalists”, who were focused on removing cognitive biases from thinking (Mr Thiel has since distanced himself). That intellectual heritage dates even further back, to “cypherpunks”, who noodled about cryptography, as well as “extropians”, who believed in improving the human condition through life extensions

the rationalist movement has hit the mainstream. The result is a fascination with big ideas that its advocates believe goes beyond simply rose-tinted tech utopianism

A burgeoning example of this is “progress studies”, a movement that Mr Collison and Tyler Cowen, an economist and seer of the tech set, advocated for in an article in the Atlantic in 2019

Progress, they think, is a combination of economic, technological and cultural advancement—and deserves its own field of study

There are other examples of this expansive worldview. In an essay in 2021 Mr Altman set out a vision that he called “Moore’s Law for Everything”, based on similar logic to the semiconductor revolution. In it, he predicted that smart machines, building ever smarter replacements, would in the coming decades outcompete humans for work. This would create phenomenal wealth for some, obliterate wages for others, and require a vast overhaul of taxation and redistribution

His two bets, on OpenAI and nuclear fusion, have become fashionable of late—the former’s chatbot, ChatGPT, is all the rage. He has invested $375m in Helion, a company that aims to build a fusion reactor.

Mr Lonsdale, who shares a libertarian streak with Mr Thiel, has focused attention on trying to fix the shortcomings of society and government. In an essay this year called “In Defence of Us”, he argues against “historical nihilism”, or an excessive focus on the failures of the West.

With a soft spot for Roman philosophy, he has created the Cicero Institute in Austin that aims to inject free-market principles such as competition and transparency into public policy.

He is also bringing the startup culture to academia, backing a new place of learning called the University of Austin, which emphasises free speech.

All three have business ties to their mentors. As a teen, Mr Altman was part of the first cohort of founders in Mr Graham’s Y Combinator, which went on to back successes such as Airbnb and Dropbox. In 2014 he replaced him as its president, and for a while counted Mr Thiel as a partner (Mr Altman keeps an original manuscript of Mr Thiel’s book “Zero to One” in his library). Mr Thiel was also an early backer of Stripe, founded by Mr Collison and his brother, John. Mr Graham saw promise in Patrick Collison while the latter was still at school. He was soon invited to join Y Combinator. Mr Graham remains a fan: “If you dropped Patrick on a desert island, he would figure out how to reproduce the Industrial Revolution,”

While at university, Mr Lonsdale edited the Stanford Review, a contrarian publication co-founded by Mr Thiel. He went on to work for his mentor and the two men eventually helped found Palantir. He still calls Mr Thiel “a genius”—though he claims these days to be less “cynical” than his guru.

“The tech industry has always told these grand stories about itself,” says Adrian Daub of Stanford University and author of the book, “What Tech Calls Thinking”. Mr Daub sees it as a way of convincing recruits and investors to bet on their risky projects. “It’s incredibly convenient for their business models.”

Yet the impact could ultimately be positive. Frustrations with a sluggish society have encouraged them to put their money and brains to work on problems from science funding and the redistribution of wealth to entirely new universities. Their exaltation of science may encourage a greater focus on hard tech

Silicon Valley has shown an uncanny ability to reinvent itself in the past.

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.”

For instance, when a Harvard scholar such as Steven Pinker speaks of “disempowering D.E.I.” as a necessary reform in American higher education, he’s not opposing diversity itself. Pinker is liberal, donates substantially to the Democratic Party and “loathes” Donald Trump. The objections he raises are shared by a substantial number of Americans across the political spectrum.

, the problem with D.E.I. isn’t with diversity, equity, or inclusion — all vital values.

First, it is a moral necessity for colleges to be concerned about hateful discourse, including hateful language directed at members of historically marginalized groups. Moreover, colleges that receive federal funds have a legal obligation

I’ll share with you three pervasive examples

In the name of D.E.I., all too many institutions have violated their constitutional commitments to free speech, due process and equal protection of the law.

Yet that is no justification for hundreds of universities to pass and maintain draconian speech codes on campus, creating a system of unconstitutional censorship that has been struck down again and again and again in federal court. Nor is it a justification for discriminating against faculty members for their political views or for compelling them to speak in support of D.E.I.

There is a better way to achieve greater diversity, equity, inclusion and related goals. Universities can welcome students from all walks of life without unlawfully censoring speech. They can respond to campus sexual violence without violating students’ rights to due process. They can diversify the student body without discriminating on the basis of race

Second, there is a moral imperative to respond to sexual misconduct on campus.

that is no justification for replacing one tilted playing field with another. Compelled in part by constitutionally problematic guidance from the Obama administration, hundreds of universities adopted sexual misconduct policies that strip the most basic due process protections from accused students. The result has been systematic injustice

The due process problem was so profound that in 2019 a state appellate court in California — hardly a bastion of right-wing jurisprudence — ruled that “fundamental fairness” entitles an accused student to cross-examine witnesses in front of a neutral adjudicator.

Third, it is urgently necessary to address racial disparities in campus admissions and faculty hiring — but, again, not at the expense of the Constitution.

it is difficult to ignore the overwhelming evidence that Harvard attempted to achieve greater diversity in part by systematically downranking Asian applicants on subjective grounds, judging them deficient in traits such as “positive personality,” likability, courage, kindness and being “widely respected.” That’s not inclusion; it’s discrimination.

Our nation has inflicted horrific injustices on vulnerable communities. And while the precise nature of the injustice has varied — whether it was slavery, Jim Crow, internment or the brutal conquest of Native American lands — there was always a consistent theme: the comprehensive denial of constitutional rights.

But one does not correct the consequences of those terrible constitutional violations by inflicting a new set of violations on different American communities in a different American era. A consistent defense of the Constitution is good for us all,

The danger posed by D.E.I. resides primarily not in these virtuous ends, but in the unconstitutional means chosen to advance them.

Virtuous goals should not be accomplished by illiberal means.

Since 2016, there have been two competing visions for the Democratic Party. One is the promise that began with Barack Obama of a multiracial coalition that would grow stronger as America’s demographics shifted; the other is the political revolution championed by Bernie Sanders as a way to unite nonvoters with the working class

Ms. Ocasio-Cortez bridges the gap between the two

what’s clear is that at a time when Democrats are struggling, she is quietly laying the groundwork to build a coalition broader than the one she came to power with, unafraid to take risks along the way.

After five years in Congress, she has emerged as a tested navigator of its byzantine systems, wielding her celebrity to further her political aims in a way few others have.

Three terms in, one gets the sense that we’re witnessing a skilled tactician exiting her political adolescence and coming into her own as a veteran operator out to reform America’s most dysfunctional political body.

To grasp what sets Ms. Ocasio-Cortez apart from many of her colleagues, you have to understand where she finds allies

In 2019, she and Senator Ted Cruz of Texas considered joining forces to write a bill that would bar former members of Congress from becoming lobbyists. Asked why she would consider an alliance with someone so loathed by liberals, she said, “I will swallow all of my distaste in this situation because we have found a common interest.”

It was a window into the politician she would become: pragmatic and results-driven, willing to work with people she considers her political adversaries, at least on legislation that appeals to her base

She has attributed the success of these efforts at least in part to her role as the second most powerful Democrat on the House Oversight Committee, which she said has “opened many windows” for collaboration.

while these bills may seem like small victories, they are more than that because, in a sense, she is redefining what bipartisanship looks like in Washington.

For decades, bipartisanship has meant bringing together moderates, lobbyists and establishment insiders to produce watered-down legislation unpalatable to many voters in both political partie

What Ms. Ocasio-Cortez is doing is different; she’s uniting politicians on the fringes of American politics around a broadly popular set of policies.

Americans in both parties overwhelmingly say that they don’t trust the government to do the right thing and that donors and lobbyists have too much sway over the legislative process.

more than 8 in 10 Americans believe politicians “are more focused on fighting each other than on solving problems.” One-fifth of respondents said lack of bipartisan cooperation was the biggest problem with the political system.

Ms. Ocasio-Cortez’s efforts to reach out to Republicans are offering what a sizable portion of Americans want from Congress: a return to getting things done.

The few policy matters on which progressives and conservatives align often boil down to a distrust of politicians and of big corporations, particularly technology companies and pharmaceutical giants.

Ms. Ocasio-Cortez has shrewdly made those causes her passion, building alliances with conservative colleagues interested in holding these industries accountable.

Last spring, she cosponsored a bill with, among others, Brian Fitzpatrick, a moderate Republican from Pennsylvania, and Matt Gaetz, the Florida rabble-rouser who has become one of Mr. Trump’s most steadfast allies. The legislation would bar members of Congress from trading individual stocks, a measure that as of the fall of 2022 was supported by nearly 70 percent of voters across party lines.

On Gaza, too, she has been willing to buck other members of her party to pursue an agenda that a majority of voters support. She was one of the first Democrats to call for a cease-fire; within weeks, nearly 70 percent of Americans said Israel should call one and try to negotiate with Hamas.

In March, Ms. Ocasio-Cortez was accosted by a handful of protesters who demanded that she call Israel’s war in Gaza a genocide.

Less than three weeks later, Ms. Ocasio-Cortez did accuse Israel of genocide and chastised the White House for providing military aid to the country while it blockaded Gaza. “If you want to know what an unfolding genocide looks like,” Ms. Ocasio-Cortez said in a speech on the House floor, “open your eyes. It looks like the forced famine of 1.1 million innocents. It looks like thousands of children eating grass as their bodies consume themselves, while trucks of food are slowed and halted just miles away.”

Last month, she voted against providing additional funding for Israel. Those were unpopular positions in Congress, where unconditional support for the country remains the norm, but they put her in line with a majority of Democratic voters.

These stances haven’t been enough to quell the doubts from a faction of the left that helped get her elected. Over the past few weeks, some have accused her of caving in to pressure from moderate Democrats

. Ms. Ocasio-Cortez has taken much of the heat from leftist activists who see her as a symbol of the contradictions and compromises inherent in the political system. It may not be realistic to expect absolute purity from her; she is, after all, a politician. But these critiques overlook the promise of what she’s doing behind the scenes.

Democratic pollsters and strategists are searching for ways for Mr. Biden to win back Muslims and Arab Americans in swing states such as Michigan and Georgia, recent college graduates who hoped to have their student debt forgiven, immigrant-rights activists and Latinos.

Some of the betrayal these voters feel was hardly the president’s fault; he was hampered on student loan debt by a federal judiciary stacked with judges sympathetic to conservative legal arguments, and Congress refused to pass the comprehensive immigration bill he supported in 2021, which would have provided legal status to as many as 11 million undocumented immigrants.

A more gifted orator might have been able to make the structural impediments in his way clear to voters, while also putting forth a proactive vision for dismantling the core problems baked into our politics.

In that, someone like Ms. Ocasio-Cortez, who endorsed Mr. Biden for re-election in 2023, may be able to help. She’s the Democratic Party’s most charismatic politician since Barack Obama and its most ardent populist since Bernie Sanders.

she can offer voters something more substantial than a hollow rebuke of Trumpism

Last month, when the journalist Mehdi Hasan asked her how she’d respond to “a young progressive or Arab American who says to you, ‘I just can’t vote for Biden again after what he’s enabled in Gaza,’” Ms. Ocasio-Cortez said a vote for Mr. Biden didn’t necessarily mean an endorsement of all his policies. “Even in places of stark disagreement, I would rather be organizing under the conditions of Biden as an opponent on an issue than Trump,” she said. It was a shrewd political maneuver, designed to distance herself from Democrats who support Israel unconditionally, while meeting voters — some of whom have lost family members in Gaza — where they are

There are, of course, limits to this strategy. Some on the left see Ms. Ocasio-Cortez’s endorsement of Mr. Biden as a betrayal of progressive values, particularly in the wake of the climbing death toll in Gaza.

The moderate Republicans who turned out for Mr. Biden in 2020 might shrink from a Democratic Party led by someone they consider an outspoken progressive.

But for every moderate or leftist voter lost with a strategy like Ms. Ocasio-Cortez’s, the Democratic Party may be able to win someone new — from the pool of disillusioned Americans who feel shut out of the political process.

And if divestment against Israel is carried out, when should it end?

Oil and gas divesting is meant never to end; oil and gas consumption is meant to end. Divestment from South Africa ended with apartheid.

So university leaders will be forced to ask an often heterogeneous group of students what would earn Israel its social license back. A cease-fire? A new Israeli government? A two-state solution? The end of Israel as a Jewish state?

But even if an endowment could provide a list of every underlying investment, it would likely then be inundated for more calls to divest, for more discovered connections — however small — to Israel, and for reasons related to other offenses discoverable with an online search

The answer, of course, is that endowments can’t be in the moral adjudication business — and they should never have headed this way

This does not mean that investing should be a returns-at-any-cost exercise. But it does mean that the real world does not always provide objective answers to how to balance benefits and consequences of companies providing products and services: