Is China the ultimate free-rider?
With a Trump-induced decline of American alliances n the works, is Chinese global ascendancy going to result? It would seem so. Matt Yglesias tweeted that “America may be cooked and it’s gonna be the Chinese century.” Thomas Friedman recently wrote a column suggesting that the future is to be found in China, not America.
In the realm of technology, China’s advances are impressive. BYD has the best and cheapest electric vehicles, the CCP is pulling out all stops to attain high-quality chips and lithography capabilities. Chinese AI, in the form of DeepSeek and Manus, has shocked many Westerners with its inventiveness.
Yet Western and most of all American hegemony is not over yet. These advances by China are real, but they rest on a foundation of Western values and institutions more than it might appear at first.
Consider global economic growth over the last few decades. China has risen in import, relative to most of the poorer nations it was once bunched with. America too has risen in economic influence, widening the gdp gap with Western Europe. The lesson is that economies with scale have prospered more than average, which is hardly surprising in a world where tech and also big business are ascendant. America and China are thus likely to prosper jointly under broadly common conditions.
The inconvenient truth, for China, is that its scale relies upon American power and influence. The Chinese export machine, for instance, requires a relatively free world trading order. The recipe to date has been “mercantilism for us, free trade for everybody else.” Yet Trump threatens to smash that framework. If the world breaks down into bitterly selfish protectionist trading blocs, China will be one of the biggest losers. After all, where will the Chinese sell the rising output from their factories?
The Chinese growth and stability model also requires relatively secure energy supplies. For that it relies on the United States and its allies, as the Chinese programs for nuclear and solar power remain far from their final goals. If the Western alliance system collapses, who is to keep the Middle East relatively stable, at least stable from the point of view of procuring fossil fuels? China hardly seems up to that task, as the country has neither the means, the inclination, the experience, nor the allies to do the job.
Furthermore, China relies more on American hard and soft power more than it likes to let on. The leading role of America makes both Western Europe and also Latin America a bit “soft” when it comes to self-defense and martial spirit and also nationalistic pluck. After all, many countries are outsourcing their defense and also parts of their intelligence-gathering to the United States. That makes them relatively easy pickings for Chinese infiltration, whether it be economic infiltration, pulling up alongside as an easy “extra friend” to boost bargaining power with America, or spying and surveillance. If Trump scuttles our current multilateral commitments and trust, China will find most other countries harder to penetrate, not easier.
Another risk on the horizon is nuclear proliferation, which could result from any number of events, ranging from an Israeli attack on Iran, the partial fall of Ukraine, or a Chinese invasion of Taiwan. The more nuclear powers inhabit the world, the more China is hemmed in with its foreign policy ambitions. That outcome may not be good for the United States either, but again we are back to the scenario where the US and China have some fundamental common interests, rather than the narrative where China displaces America as world leader.
There is much to rue in the first few months of Trump’s foreign and economic policy, but China is far from being able to take the baton. They are running second, and doing a great job of that, precisely because we Americans – in spite of all our mistakes — still have the lead.
My interview with Times Radio
Times of London that is:
Tuesday assorted links
1. Scott Sumner on who is rising and falling in status. Mostly I agree.
2. New personalized dating form for STEM men and women, here is the link for women. The previous link I put up for men already is generating matches and perhaps a marriage as well.
3. Michael Nielsen wants to reconsider AI alignment as the goal.
4. Musa al-Gharbi on Harvard’s decision.
5. For a brief moment, Harvard tweets libertarian, pre-1964 stuff. And Alex retweets Will Stancil, and justifiably so.
Book ban sentences to ponder
Using a staggered difference-in-differences design, we find that the circulations of banned books increased by 12%, on average, compared with comparable nonbanned titles after the ban. We also find that banning a book in a state leads to increased circulation in states without bans. We show that the increase in consumption is driven by books from lesser-known authors, suggesting that new and unknown authors stand to gain from the increasing consumer support. Additionally, our results demonstrate that books with higher visibility on social media following the ban see an increase in consumption, suggesting a pivotal role played by social media. Using patron-level data from the Seattle Public Library that include the borrower’s age, we provide suggestive evidence that the increase in readership in the aggregate data is driven, in part, by children reading a book more once it is banned. Using data on campaign emails sent to potential donors subscribed to politicians’ mailing lists, we show a significant increase in mentions of book ban-related topics in fundraising emails sent by Republican candidates.
That is from a new paper by Uttara M. Ananthakrishnan, et.al., via Kris Gulati.
The Decline of Manufacturing
Look at the incredible decline of manufacturing across a wide variety of industries in the figure below. Nearly 7.5 million jobs lost, just since 2011. Devastated communities. Factories shuttered. Millions of older, lower-skilled workers out of work. A rise in inequality. Jobs going overseas.
“The future is bleak and hopeless if we continue like this,” said one worker.
…“This eventually leads to serious social problems, such as higher rates of unemployment and increased crime and social unrest. Nations with socially polarised work forces also suffer from political instability.”
And now for the rest of the story (non-paywalled or go to the comments.)
Will American soft power triumph through AI?
That is the theme of my latest Free Press column, here is one bit from it:
…for all the differences across the models, they are remarkably similar. That’s because they all have souls rooted in the ideals of Western civilization. They reflect Western notions of rationality, discourse, and objectivity—even if they sometimes fall short in achieving those ends. Their understanding of “what counts as winning an argument” or “what counts as a tough question to answer” stems from the long Western traditions, starting with ancient Greece and the Judeo-Christian heritage. They will put on a Buddhist persona if you request that, but that, too, is a Western approach to thinking about religion and ideology as an item on a menu.
These universal properties of the models are no accident, as they are primarily trained on Western outputs, whether from the internet or from the books they have digested. Furthermore, the leading models are created by Bay Area labor and rooted in American corporate practices, even if the workers come from around the world. They are expected to do things the American way.
The bottom line is that the smartest entities in the world—the top AI programs—will not just be Western but likely even American in their intellectual and ideological orientations for some while to come. (That probably means the rest of the world will end up a bit more “woke” as well, for better or worse.)
One of the biggest soft power victories in all of world history occurred over the last few years, and hardly anyone has noticed.
You might think the Chinese AI models are fundamentally different, but they are not. They too “think like Westerners.” That’s no surprise because it is highly likely that the top Chinese model, DeepSeek, was distilled from OpenAI models and also is based on data largely taken from Western sources. DeepSeek’s incredible innovation was to make the model much cheaper in terms of required compute, but the Chinese did not build their own model from scratch. And DeepSeek has the same basic broad ideological orientation as the American models, again putting aside issues related to Chinese politics. Unless an issue is framed in explicitly anti–Chinese Communist Party (CCP) terms, as a Taiwan query might be, it still thinks like an American.
Manus is another top Chinese AI model, but it is believed the makers built it upon Claude, an AI model from the American company Anthropic.
And this:
The geopolitics of all this have yet to play out. But already the most intelligent entities in the world are thinking, and evaluating options, like Westerners and Americans. Censoring them on a few issues related directly to Chinese politics will not change that basic reality.
In other words, the entire Chinese service sector, over time, may be built upon Western modes of thought and Western ideology. That includes the Chinese government and of course, the CCP itself. The point is that, over time, everyone’s thoughts and decisions and mental frameworks will be nudged in Western and American directions.
These are underrated points of import.
Harvard says no
Harvard University said on Monday that it had rejected policy changes requested by the Trump administration, becoming the first university to directly refuse to comply with the administration’s demands and setting up a showdown between the federal government and the nation’s wealthiest university.
Other universities have pushed back against the Trump administration’s interference in higher education. But Harvard’s response, which essentially called the Trump administration’s demands illegal, marked a major shift in tone for the nation’s most influential school, which has been criticized in recent weeks for capitulating to Trump administration pressure…
Some of the actions that the Trump administration demanded of Harvard were:
Conducting plagiarism checks on all current and prospective faculty members.
Sharing all its hiring data with the Trump administration, and subjecting itself to audits of its hiring while “reforms are being implemented,” at least through 2028.
Providing all admissions data to the federal government, including information on both rejected and admitted applicants, sorted by race, national origin, grade-point average and performance on standardized tests.
Immediately shutting down any programming related to diversity, equity and inclusion.
Overhauling academic programs that the Trump administration says have “egregious records on antisemitism,” including placing certain departments and programs under an external audit. The list includes the Divinity School, the Graduate School of Education, the School of Public Health and the Medical School, among many others.
Here is more from Vimal Patel at the NYT.
What should I ask John Arnold?
Yes, I will be doing a Conversation with him. John might be the smartest person I know about the energy sector and also about philanthropy. Here is the opening of his Wikipedia entry:
John Douglas Arnold (born 1974) is an American philanthropist, former Enron executive, and founder of Arnold Ventures LLC, formerly the Laura and John Arnold Foundation. In 2007, Arnold became the youngest billionaire in the U.S. His firm, Centaurus Advisors, LLC, was a Houston-based hedge fund specializing in trading energy products that closed in 2012. He now focuses on philanthropy through Arnold Ventures LLC. Arnold is a board member of Breakthrough Energy Ventures and since February 2024, is a member of the board of directors of Meta.
So what should I ask him?
Monday assorted links
1. ADHD diagnosis is a mess (NYT).
2. John Cochrane on tariffs, savings, and investment.
3. More on low productivity growth in construction.
4. Ken Rogoff is now on Substack.
5. DolphinGemma: How Google AI is helping decode dolphin communication.
6. Russian birth rates hit new low.
7. Out of date (a lot will be happening this week), but a new paper on ChatGPT as an economics tutor.
The roots of gun violence
An estimated 80 percent [of U.S: gun shootings] seem to instead be crimes of passion — including rage. They’re arguments that could be defused but aren’t, then end in tragedy because someone has a gun. Most violent crimes are the result of human behavior gone temporarily haywire, not premeditated acts for financial benefit.
That is from the new and interesting Unforgiving Places: The Unexpected Origins of American Gun Violence, by Jens Ludwig.
How to do regulatory reform (from my email)
“Philip Howard here. I enjoyed your discussion with Jen Pahlka. Here are a few notes:
1. This current system needs disrupting, but I fear DOGEs indiscriminate cuts are making the status quo look good. Here’s Peter Drucker, criticizing Gore’s reinventing got: “patching. It always fails. The next step is to rush into downsizing. Management picks up a meat-ax and lays about indiscriminately. …amputation before diagnosis.” (from Management, revised ed).
2. Most of the newcomers to the realization that govt is paralyzed (Ezra Klein, Dunkelman etc) think that the red tape jungle can be pruned, or organized with better feedback loops (Pahlka). This is falling into Gore’s pit. There’s a fatal defect: the operating system is designed around legal compliance–instead of human authority to make tradeoff judgments. Law should be a framework setting the boundaries of authority, not a checklist. That’s why some reforms I championed (page limits, time limits) haven’t worked; there’s always another legal tripwire. I describe what a new framework should look like in this recent essay. https://manhattan.institute/article/escape-from-quicksand-a-new-framework-for-modernizing-america
3. Public unions: Democracy loses its link to voters–quite literally–if elected executives lack managerial authority. The main tools of management– accountability, resource allocation, and daily direction–have been either removed by union controls or are subject to union veto. Government is more like a scrum than a purposeful organization. There’s a core constitutional principle –private nondelegation–that prevents elected officials from ceding their governing responsibility to private groups. Stone v Mississippi: “The power of governing is a trust…, no part of which can be granted away.” That’s the basis of the constitutional challenge we’re organizing. The Trump admin could transform state and local govt by invoking this principle.
Fwiw, I see these points– authority to make tradeoff judgments, authority to manage— as microeconomic necessities, not policy positions. Nothing can work sensibly until people are free to make things work. We’re organizing a forum at Columbia Law School, The Day After Doge, on the morning of April 23. Here’s the lineup. https://www.commongood.org/the-day-after-doge. Let me know if you’d like to weigh in.”
Muere Mario Vargas Llosa, RIP
Here is one article in Spanish, my favorite novel by him is War of the End of the World. Aunt Julia and the Scripwriter is a wonderful introduction, and there are many other fine works.
Sunday assorted links
1. 2013 paper on the economics of a “sudden stop” in lending to the United States. Not what I think is going on now, but fyi.
2. Richer Swedes are getting healthier more quickly.
3. Incredible AI thread from Steve Jurvetson.
4. Lottery arbitrage? (WSJ)
5. What does a House of Representatives member do all day?
6. Haiti turns to weaponized drones to fight the gangs.
7. Branko.
I never knew Joseph Smith ran for President
Eventually, Smith declared himself a candidate for the White House. His proposed platform was an awkward conglomeration of popular, though incongruent, principles including restoring the national bank, cutting Congress members’ salaries, annexing Texas, and instituting the gradual abolition of slavery. Hundreds of Mormon men, including Brigham Young, swarmed the nation campaigning for their prophet to become president.
That is from the new and excellent Benjamin E. Park, American Zion: A New History of Mormonism. An excellent book, good enough to make the year’s best non-fiction list.
I also learned recently (from Utah, not from this book) that early Mormons would drink alcohol and “Brigham Young even operated a commercial distillery east of Salt Lake City, and his southern‐Utah “Dixie Wine Mission” (1860s‑80s) was organized to supply sacramental, medicinal, and commercial wine for the territory.” By the time Prohibition rolled around, however, Mormons were close to completely “dry.”
Markets expand to fill empty spaces
How does a start-up founder hire a software engineer or a tech worker find a date in 2025? They could share a job posting on LinkedIn, log on to a dating app — or leave a handwritten note in a Waymo.
“Looking to hire senior software engineers to work on AI/music project,” said the note, a retro touch in a futuristic setting, with the company’s website and Angelini’s email scrawled below. That same day, another Waymo rider snapped a photo of the note and posted it on the social media platform X, where it has been reshared nearly 200 times, received more than 4,000 likes and more than 300,000 views…
A few days later, another handwritten ad found in a Waymo was shared on X from a single man looking for a date. The bachelor described himself as a 26-year-old who works in tech but “doesn’t make it my whole personality” and left a phone number for interested parties to text. The post has gotten more than 200 replies.