Our So-Called Foreign Policy: Shocking New Findings on How Corporate America Keeps Strengthening China’s Military

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AI, artificial intelligence, Biden adminisration, Center for Security and Emerging Technology, China, export controls, Georgetown University, innovation, Intel, investment, national security, Nvidia, Orbcomm, Our So-Called Foreign Policy, semiconductors, Silicon Valley, software, tech, venture capital, Xilinx

Recent weeks have seen an impressive burst of new information about how U.S.-owned businesses are fueling the technological and military strength of China, a country whose armed forces American soldiers, sailors, and airmen and women could be fighting on the battlefield before too long.

The first source of this information comes from Georgetown University’s Center for Security and Emerging Technology (CSET) in an October report called Harnessed Lightning: How the Chinese Military is Adopting Artificial Intelligence.

The study focuses on China’s own efforts to develop artificial intelligence (AI) capabilities and incorporate them into its military operations and systems, and goes into fascinating detail about how much money is spent on these efforts, and how many Chinese entities of all kinds are involved in the campaign. The authors also make clear – just in case it wasn’t screamingly obvious already – how widespread these applications can be, and their incredible potential to revolutionize warfare and hand victory to the power possessing the best knowhow.

But as one of the team explained in a summary magazine article two days ago:

“Our research also highlights that U.S. companies are inadvertently powering Chinese military advances in AI. The overwhelming majority of advanced computer chips at the heart of China’s military AI systems are designed by U.S. firms like Intel, NVIDIA and Xilinx, and manufactured in Taiwan. We found that suppliers actually depicted NVIDIA-branded processors in photos of their products, providing clear evidence of the role U.S. technology plays in powering China’s advances. One company, which won a contract to supply chips for the PLA Strategic Support Force, even bought the domain ‘nvidiagpu.com.'”

Moreover, much more than simply semiconductors are involved. So is machine-learning and intelligent text-processing software, along with systems for “real-time monitoring” of “millions of global shipping and related users” with the help of 108 satellites from the American company Orbcomm.

My only objection: It’s inconceivable that these U.S. firms don’t fully understand the national security implications of their activities. The report itself notes that

“Because most institutions that supply AI-related equipment are new and not subject to end-use controls, the Chinese military is frequently able to access or acquire technology from abroad, including from the United States. Some Chinese suppliers make a business out of sourcing foreign data or components and reselling them to sanctioned Chinese defense companies or PLA [People’s Liberation Army] units.”

But the U.S. businesses must be aware that any of their products sold to any Chinese entity are going to be made available to the Chinese military simply because that’s the way China has operated since the Communists have been running the place. So this rationale can be easily laughed off.

The same cynical reaction is justified for claims that U.S.-owned firms don’t know that the capital they’re steering into the Chinese tech sector will also benefit the Chinese military. And these capital flows are both impressive and coming both from finance companies and from the huge semiconductor manufacturer Intel – which is hoping to receive billions in U.S. government subsidies and tax breaks to help restore its competitiveness in microchip production largely (of course) to bolster national security.

As reported by The Wall Street Journal this morning, Intel is “is among the active investors, backing a Chinese company now called Primarius Technologies Co., which specializes in chip-design tools that U.S. companies currently lead in making.” RealityChek regulars, moreover, know that Intel has been investing in other defense-related Chinese entities for years.

Not that American investment firms aren’t also doing their part to strengthen China’s tech prowess and therefore military capability and potential. Including the Intel deal, the Journal found, American companies “participated in 58 investment deals in China’s semiconductor industry from 2017 through 2020, more than double the number from the prior four years….”

And on top of these transactions, according to the Journal, “the China-based affiliates of Silicon Valley venture firms Sequoia Capital, Lightspeed Venture Partners, Matrix Partners and Redpoint Ventures have made at least 67 investments in Chinese chip-sector companies since the start of 2020….” In all, the sums involve run into the billions.

And in case you still doubt that these U.S. firms fully understand how valuable their investments are to a country that’s increasingly hostile to America, the Journal article quotes the head of one of these Chinese recipients as saying that his operation is working with the Chinese regime and other partners “to help our country get rid of its dependence on foreign high-performance chips.” Since the United States is still ahead in this sector, a China that no longer relies on American high tech products is going to be a China that’s caught up – and possibly grabbed the lead.

What’s the U.S. government doing about this dangerously unacceptable situation? It’s true that Washington has long maintained a system of export controls aimed at preventing China and other worrisome countries access to critical, militarily relevant goods and knowhow. But as the CSET study documents, this system is being completely overwhelmed – in part because of sorely inadequate funding and staffing, and in part because it’s never switched from a case-by-case approach to the kind of much broader denial strategy that’s clearly needed for a systemic threat like that posed by China.

There’s legislation in the works to plug some of the holes, and according to the Journal, the Biden administration seems supportive. Let’s just hope that the government gets its act together sometime before weapons powered by American technology and funded by American investors start killing American servicemen and women somewhere in East Asia.

BTW, thanks to friend Bill Holstein for calling my attention to these two items. 

 

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Our So-Called Foreign Policy: Why U.S.-China Tech Decoupling Needs to be Kept Simple

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AI, artificial intelligence, Biden, Biden administration, China, decoupling, National Security Commission on Artificial Intelligence, Our So-Called Foreign Policy, tech, technology

“Let’s you and him fight” is about the best expression of cynicism I know of. It’s also often great advice when dealing with a law-of-the-jungle-type situation like world affairs, where advancing your country’s interests without incurring much or any risk is a tactic that’s hard to beat.

As a formula for America’s response to the threat posed by China’s advances in artficial intelligence (AI), though? It’s completely unacceptable because it inevitably results in some portions of the population or the economy or the society or all three making all or most of any sacrifices needed to achieve an important national goal, and others getting off scot free or close to it.

And that’s a big problem with an otherwise very valuable new report from a federal government advisory committee on Chinese progress in this game-changing technology. On the one hand, the authors do a great job in explaining why permitting to narrow America’s lead in AI any further could be disaster for national security and prosperity, and for freedom around the world. As a result, they compellingly argue, grappling with this reality requires “comprehensive, whole-of-nation action.”

On the other hand, although they insist on a massive mobilization of U.S. energy and resources, they also maintain that “The United States can compete against China without ending collaborative AI research and severing all technology commerce.” Not only does this position make no sense whatever, given the Chinese ambitions for AI supremacy the Commission describes and the consequences of Chinese victory. It also means, conveniently, that the U.S. tech sector – from which many of the commissioners come – can keep making big bucks doing business with China.

More fundamentally, though, even if this square-circling policy framework wasn’t so sure to keep lining the pockets of many of the authors, it would still suffer from the intrinsically paralyzing qualities of the idea of “competition” as a guide to or aim for America’s approach to China. Simply put, the idea of competition is simply too complicated.

If you consider this perspective too cynical, or too dogmatic, or both, check out the following from the National Security Commission on Artificial Intelligence:

According to the commissioners, AI is more than “a single technology breakthrough” or even “general-purpose technology.” It nothing less than a “field of fields” that “holds the secrets which will reorganize the life of the world.’” And not surprisingly, “America’s military rivals are integrating AI concepts and platforms to challenge the United States’ decades-long technology advantage. We will not be able to defend against AI-enabled threats without ubiquitous AI capabilities and new warfighting paradigms.”

That’s because “AI applications will help militaries prepare, sense and understand, decide, and execute faster and more efficiently. Numerous weapon systems will leverage one or more AI technologies. AI systems will generate options for commanders and create battle networks connecting systems across all domains.”

Chief among these AI-progressing rivals is China, which the report says “possesses the might, talent, and ambition to surpass the United States as the world’s leader in AI in the next decade if current trends do not change.”

Specicifally, “China sees AI as the path to offset U.S. conventional military superiority by ‘leapfrogging’ to a new generation of technology. Its military has embraced ‘intelligentized war’––investing, for example, in swarming drones to contest U.S. naval supremacy. China’s military leaders talk openly about using AI systems for ‘reconnaissance, electromagnetic countermeasures and coordinated firepower strikes.’ China is testing and training AI algorithms in military games designed around real-world scenarios.”

Nor would Chinese AI superiority pose military threats alone:

“Authoritarian regimes will continue to use AI-powered face recognition, biometrics, predictive analytics, and data fusion as instruments of surveillance, influence, and political control. China’s use of AI-powered surveillance technologies to repress its Uyghur minority and monitor all of its citizens foreshadows how authoritarian regimes will use AI systems to facilitate censorship, track the physical movements and digital activities of their citizens, and stifle dissent. The global circulation of these digital systems creates the prospect of a wider adoption of authoritarian governance.”

Further, its AI push is such a priority for China that it’s determined to succeed by hook or by crook. The Commission reports that Beijing “is executing a centrally directed systematic plan to extract AI knowledge from abroad through espionage, talent recruitment, technology transfer, and investments.” Also crucial to China’s strategy: It “continues to pervasively steal American IP-protected technological advances through varied means like cyber hacking of businesses and research institutes, technological espionage, blackmail, and illicit technology transfer.”

Yet the AI report also observes that “The U.S.-China competition is complicated by the complex web of supply chains, research partnerships, and business relationships that link the world’s two AI leaders. Dramatic steps to sever these ties could be costly for Americans and reverberate across the world. The relationships between American and Chinese academics, innovators, and markets are deep, often mutually beneficial, and help advance the field of AI. Moreover, it remains in the U.S. national interest to leverage formal diplomatic dialogue about AI and other emerging technologies and to explore areas for cooperative AI projects that will benefit humanity.”

Worse, “Broad-based technological decoupling with China could deprive U.S. universities and companies of scarce AI and science, technology, engineering, and mathematics (STEM) talent, sever American companies’ efficient supply chains, and cut off access to markets and capital for innovative firms.”

Therefore, the report expresses confidence that “The United States can compete against China without ending collaborative AI research and severing all technology commerce” and that America’s goal regarding China should be “targeted disentanglement as just one element of its overall approach, which, if applied judiciously to key sectors, can help build U.S. technological resilience, reduce threats from illicit technology transfer, and protect national security–critical sectors.”

The Commission even goes so far as to recommend establishing “a high-level U.S.-China Comprehensive Science & Technology dialogue” that would

>”Identify targeted areas of cooperation on emerging technologies to solve global challenges such as climate change and natural disaster relief; and

>Provide a forum to air a discrete set of concerns around specific uses of emerging technologies while building relationships and establishing processes between the two nations.”

Unquestionably, seeking this balance and these mutual gains is appealing in theory, and it would certainly create the best of all possible worlds for U.S. tech companies that profit hugely from their current business with China and clearly envision much more to come, but whose every existence is threatened by the aforementioned predatory Chinese policies. But there’s no reason to believe that this panglossian result can actually be achieved.

In the first place, the report claims that “China’s campaign to explit U.S.-based research violates the research community’s core principles of integrity, openness, accountability, and fairness.”  That doesn’t sound like a terrific basis for mutually beneficial AI cooperation to me. 

Second, as the Commissioners note, “AI is the quintessential ‘dual use’ technology—it can be used for civilian and military purposes. The AI promise—that a machine can perceive, decide, and act more quickly, in a more complex environment, with more accuracy than a human—represents a competitive advantage in any field. It will be employed for military ends, by governments and non-state groups.”

In effect, they’re acknowledging that even the most seemingly benign AI progress fostered by Sino-American cooperation can and will be used by China for military and other threatening ends. It’s true that the reverse could hold, too. But who’s willing to take the chance that the Chinese would be as generous sharing any knowhow that could be used against it as the United States will be? And who seriously believes that a lobby-friendly Washington could exercise the kind of control over U.S. technologists that the dictators in Beijing will exercise over their Chinese counterparts – assuming that scientists and companies with long histories of enthusiastic voluntary tech transfer to China will end or even curb these activities outside this official dialogue setting?

And above and beyond these dual-use complications, the notion that the United States can successfully compartmentalize its China AI and broader tech policies so precisely and expertly seems bound to create a rerun of America’s approach to date. Even under the Trump administration, the diversity of interests and voices that inevitably shape decisions in a pluralistic, democratic U.S.-style political system kept blurring and otright undermining Washington’s focus. The product has long been much more incoherence and half-at-best-measures than either effective checks on China’s power or strong commitments to the kinds of government- and economy-wide tech promotion that’s rightly urged by this Commission – and by many others before it.

In other words, even years after China’s malign intentions became clear to a critical mass of American political and business leaders, they’ve continued to permit bilateral ties (in the Commission’s words) to be “complicated by [a] complex web of supply chains, research partnerships, and business relationships….” In turn, that’s the main reason why, to quote the report again, “The U.S. government is not prepared to defend the United States in the coming artificial intelligence (AI) era.”

In a previous post, I criticized the Biden administration for describing the U.S.-China relationship as a competition because the term is

“so intrinsically ambivalent (especially in the realm of world affairs) that its much likelier to confuse than to provide useful policy guidance. In addition, competition is a concept that evokes the playing field, where both victory and defeat have ultimately trivial consequences, rather than the fundamentally anarchic and much more dangerous international landscape. Consequently, its use tends to downplay even stakes otherwise defined more threateningly.”

This AI report greatly adds to the evidence that treating America’s dealings with China as a competition (including President Biden’s latest version: an “extreme competition”) can only lead Washington down a dangerous dead-end. It’s effectively contending that, even though China literally is seeking the United States’ defeat and domination, it’s still interested in helping Americans cure cancer or save the world from climate change, and that therefore current U.S. policy need only a large number essentially tweaks to keep safeguarding national security and prosperity adequately. And it assumes that American policymakers are skilled enough to achieve the needed “calibration” of rivalry and cooperation. (Watch this term turn into a favorite of U.S. officials and pundits – especially the globalists – going forward.)

I’m much more impressed with former boxing champion Mike Tyson’s observation that “Everybody has a plan until they get punched in the mouth.” In other words, what looks great on the drawing board – or on the word processor – tends to fall apart when it confronts reality.

The lesson to be learned isn’t that planning and strategizing isn’t necessary. Instead, it’s that particularly in high-stakes situations, the conceptually simplest plan will likely be the best. When it comes to the China challenge, including  artificial intelligence interactions between the two countries, that means spending much less time trying to thread needles, and more time figuring out how to shut down the transfer of superior U.S. knowhow to China as completely as possible.

Our So-Called Foreign Policy: U.S. Companies Keep Feeding the China Tech Beast

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AI, artificial intelligence, Bloomberg.com, China, hacking, Karen Weise, Microsoft, national security, Our So-Called Foreign Policy, Paul Mozur, technology, technology transfer, The New York Times, Trump

Wow! This was quite the revealing – and disturbing – nugget buried in a recent New York Times article about American tech companies’ trials and tribulations in China! According to reporters Paul Mozur and Karen Weise, Microsoft’s “long-established research and development center has turned out valuable products and launched the careers of a generation of artificial-intelligence experts who have started important new companies in China.”

Mozur and Weise mentioned this Microsoft activity in order to make the important point that even companies, like the Seattle software giant, that have bent over backwards to remain viable in China by keeping Beijing happy in various ways seem to be fighting a losing battle. For even these firms are falling victim to China’s persistent desire to replace them in the country’s huge market with Chinese rivals.

But the reference to Microsoft’s artificial intelligence operations could well matter more to the United States because it underscores a point I made several years ago in a Bloomberg.com op-ed that bears on American national security: For decades, U.S. tech companies have been transferring to Chinese entities cutting edge knowhow that has greatly strengthened Beijing’s ability to endanger key American interests. It’s the price they need to pay to keep playing in the Chinese market. But whatever the commercial justification, and whether these transfers are voluntary, coerced, or somewhere in between (including the training of China’s tech workforce), they’ve too long been neglected by American policymakers.

My Bloomberg piece focused on technologies related to cyberhacking – where transfers ironically were coming back to bite the U.S. tech firms themselves. Since then, in several posts for RealityChek, I’ve covered tech transfer that’s handing China more conventional advanced defense-related knowhow. (See, e.g., here and here.)

But artificial intelligence-related operations push the threat to an entirely new level. For these capabilities will likely be the biggest game-changers in national security for decades, and Washington is already so alarmed by the progress China has made that many specialists worry that Beijing could soon forge ahead. Nearly as troubling: The more such tech American companies keep handing over to the Chinese, the closer China gets to self-sufficiency – the point at which it won’t need American assistance anymore.

The Trump administration rightly keeps calling attention to China’s growing technological prowess and the resulting dangers to the United States, and even many long-time supporters of the reckless pre-Trump China engagement policies are starting to agree.

But tariffs to punish predatory Chinese policies aimed at building tech dominance, and curbs on Chinese tech investments in the U.S. economy are necessary, not sufficient responses. The above linked Financial Times article indicates the administration now recognizes need to staunch the flow of advanced knowhow to China by American companies. But every minute new curbs are delayed, the United States will keep feeding the beast.

(What’s Left of) Our Economy: A Pundit’s China Policy Delusions

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2016 election, artificial intelligence, big government, China, Holman Jenkins, incomes, Jobs, Jr., national security, offshoring, tech transfer, The Wall Street Journal, Trade, Trump, Welfare State, {What's Left of) Our Economy

Holman Jenkins, Jr. did make one important and useful point in his Wall Street Journal column yesterday on U.S.-China trade policy (which puts him far ahead of most of the punditocracy): He’s absolutely right to call on President Trump to “lay out for the American people just how thoroughly [he] intends to shake up the hugely important U.S.-China economic relationship.”

For weeks, I’ve offered Mr. Trump exactly the same advice – to explain his China end game comprehensively to the American people in a prime-time Oval Office address (though unlike the free trade-obsessed Jenkins, I believe such a speech would boost public support for the Trump China agenda by describing the compelling long-term stakes of what I view as an effort to disengage economically from the PRC – and why they’re more than worth short-term sacrifices).

As for the rest of his column? It’s useful only for reminding Americans how internally contradictory and dangerous (not to mention downright ditzy) the case remains for retaining most of the pre-Trump China policy status quo. Just a few key examples:

>Jenkins insists that rather than pursue a “shakeup” that would amount to “following [Chinese leader] Xi Jinping down the path of seeking foreign scapegoats for failure and heavy-handed intervention at home,” the United States should be “building up our military and alliances.”

But what would be the point of sending more troops and equipment to East Asia while Washington returned to trade policies that have transferred literally trillions of dollars to the Chinese state and helped fuel a rapid military buildup, and investment policies that have ignored the massive export of advanced defense-related knowhow to Chinese entities, and for too long overlooked Chinese acquisitions of similar assets in the American economy?

>According to Jenkins, “China’s avid pursuit of artificial intelligence” shouldn’t worry Western experts because it’s “likely to be employed mainly in destroying the creativity and initiative of its own people.” But capabilities even remotely that massive won’t threaten any major U.S. strategic interests?

>In Jenkins’ view, central to strengthening the U.S. economy sufficiently to meet the Chinese threats he doesn’t laugh off is “dealing with the fiscal challenge of our welfare state.” But good luck with the politics of shrinking social safety nets under an American approach to globalization that kept sending valuable opportunities to earn middle- and even living-wage working- class incomes to China and other penny-wage and regulation-free production and export platforms.

Jenkins isn’t entirely wrong in his overall conclusion that “American prosperity is still made at home.” But the impact of purely domestic reforms is bound to be seriously diluted after decades of Jenkins and his crowd at the Journal (along with most of the rest of the nation’s punditocracy, the pre-Trump Republican party, and the Clinton-ite Democrats) focusing like laser beams on building a truly globalized economy.

And finally – about that headline calling for a “vote on a China Cold War”  (even though the article’s body only glancingly mentions the point): During his successful White House run, President Trump made no secret of his determination to overhaul America’s China trade policy. From the standpoint of democratic legitimacy, the Trump 2016 election victory was all the mandate his administration’s China policy measures need.

Our So-Called Foreign Policy: Now the Establishment Media is Praising the Perps on China Policy

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artificial intelligence, Barack Obama, China, Eric Schmidt, Evan Osnos, Financial Times, Google, Jake Sullivan, John Reed, Our So-Called Foreign Policy, tech transfer, The New Yorker, Tom Mitchell, Trump

As RealityChek‘s slogan surely makes painfully clear, the interlocking worlds of politics and policy and media are so shot through with outright hogwash that producing it now looks like standard operating procedure. But every now and then, I come across items that, even by the debased standards of our time (which, contrary to establishment conventional wisdom, loooong predated the Trump era) belong in a class by themselves. And in the last week alone, that category has grown by two statements.

The first came in a January 3 Financial Times report on China’s growing power and influence in Asia and around the world. Authors Tom Mitchell and John Reed seemed bent on making the case that President Trump’s policies and statements had created or threatened to create vacuums around the world that Beijing is (brilliantly) moving to fill – an allegation that’s fact free but now so commonplace that it’s no longer newsworthy or comment-worthy.

Here’s what is – and jaw-droppingly so: letting a former senior Obama administration foreign policy adviser get away with making a statement like this: “There is a sense in Asia that Trump’s election may portend a dramatic power shift.”

The aide, Jake Sullivan, was not only a foreign policy adviser to Hillary Clinton’s presidential campaign and to Obama’s Vice President Joe Biden. He was the head of the State Department’s policy planning staff under Obama. So surely he had something of a hand in making U.S. policy toward China during the Obama years.

And what were the hallmarks of this policy? Doing nothing of consequence to halt the predatory Chinese trade policies that helped Beijing stockpile literally trillions in hard currency that have come in awfully handy for financing a major military buildup and government-sponsored research into advanced defense-related technologies. Doing nothing of consequence to stop China from stealing this knowhow from American companies, or to stop U.S. tech firms from handing it over voluntarily, in exchange for favorable treatment by Beijing. Doing nothing of consequence to stop China’s expansionism in the South China Sea. And doing nothing of consequence to halt or even slow North Korea’s drive to develop state-of-the-art nuclear weapons – including nuclear-capable missiles capable of striking American territory, and thereby of undermining Washington’s commitments to the defense of major allies like South Korea and even Japan.

And Sullivan has the nerve to insinuate that say that Trump’s election is responsible for tilting power balances in China’s favor? That’s like Neville Chamberlain blaming Winston Churchill for giving Nazi Germany the confidence to invade Poland.

The second example concerns the aforementioned U.S. corporate tech transfer to China, and comes from a ballyhooed January 8 New Yorker piece devoted to the same mission (#amazing!) as the Financial Times piece – blaming Mr. Trump for giving away the global store to China.

Catching my attention in particular was author Evan Osnos’ decision to quote the former chairman of Google follow-on company Eric Schmidt’s warning that (in Osnos’ words) “reductions in the funding of basic-science research will help China overtake the U.S. in artificial intelligence (AI) within a decade.” Osnos also let Schmidt speak for himself: By 2030, they will dominate the industries of A.I.”

I have no problem with Schmidt’s opposition to the funding cuts. In fact, I strongly agree. I also take especially seriously his prediction about China’s rapid tech progress. Why? Because under Schmidt, Google was a prime China tech enabler. As I wrote in a Bloomberg View column in 2012, Google products have helped China perfect its (highly effective) internet censorship programs, and its “China University Relations” program had by then established relationships with no less than 15 Chinese institutions. In addition, in 2005, it set up its own research and development center in Beijing.

In other words, Google (and most of the rest of Silicon Valley) has been actively helping China develop the tech capabilities about which its former head is now ostensibly worried.

But it gets much better: Somehow, Schmidt forgot to tell Osnos – and somehow the latter’s own wide-ranging reporting in China missed the fact that – Google has just decided to set up another research facility in China. And its focus? Artificial intelligence. According to its director,

“Besides publishing its own work, the Google AI China Center will also support the AI research community by funding and sponsoring AI conferences and workshops, and working closely with the vibrant Chinese AI research community.”

You’ve heard of “blame the victim?” These two articles could reveal a growing media tendency to “praise the perp.” And evidently if the result is to exalt the establishment, and discredit its critics (especially Trump-ian), so much the better.

Our So-Called Foreign Policy: A Narrow-Minded Wake-Up Call on China’s Tech Drive

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artificial intelligence, Barack Obama, budget, China, mercantilism, National Science Foundation, Our So-Called Foreign Policy, research and development, technology, technology transfer, Trade, trade surpluses, Trump

“#SMH” (Shaking My Head) is one of my favorite Twitter hashtags, and it’s the perfect reaction to a new post on FOREIGNPOLICY.com on the growing technological challenge being posed to the United States by China, and on its frightening national security implications. The post has me shaking my head, and should have you shaking yours, because for all the useful information it contains on this critical subject, it completely misses the much bigger, much more important picture. And it misses it because the authors are so transparently determined to lionize former President Obama’s record in this regard, and vilify President Trump’s – though few of the facts warrant this conclusion.

The post is useful mainly for calling attention to China’s intensifying effort to establish global superiority in artificial intelligence, and to the Trump administration’s budget policies, which look oblivious to China’s efforts because they don’t provide adequate resources for federal research efforts capable of keeping the United States ahead.

I say “look” because the budget situation may not be as dire as strongly suggested by the authors. Specifically, it’s true that the administration has proposed cutting funding for the National Science Foundation’s artificial intelligence programs by 10 percent. At the same time, as made clear by the source they relied on, “the proposed budget does call for more spending on defense research and some supercomputing.”

Much more misleading is the post’s portrayal of the Obama administration as nothing less than Churchillian in sounding the tocsin. After all, the Obama reports the authors cite as evidence of his foresight on the subject came out at the very end of his presidency. At least as important, they gloss over major non-budgetary developments crucial to understanding China’s progress.

As they themselves admit, for instance, Chinese tech companies have established presences in Silicon Valley because they believe that “by rotating Chinese staff to Silicon Valley and American staff to Chinese campuses, they can accelerate the timeline for reaching parity with the United States in AI technology and depth of talent.” Under whose administration do the authors believe this practice started? And why do they think the Chinese were confident they were so free to proceed?

Also completely ignored: Throughout his presidency, Mr. Obama did absolutely nothing as American companies continued their longstanding efforts to transfer advanced technologies to Chinese partners voluntarily, or were forced to share this knowhow due to Chinese threats to shut them out of its market. Nor did he move to prevent these firms from investing in Chinese companies working on tech products and services with clear defense implications, or to help them cope with Beijing’s demands that they pony up or else.

And let’s not forget: The Obama administration made only the most token efforts to combat the predatory Chinese practices that enabled Beijing to amass immense trade surpluses with the United States; therefore to further fuel the growth of its market and make it that much more difficult for American companies to resist tech extortion demands; and to finance its own multi-billion technology development efforts with these handsome trade profits. Indeed, Mr. Obama staunchly opposed Congressional efforts to punish China for its most important mercantile policy:  currency manipulation.  

So I share the authors’ view that federal research and development efforts have been crucial to establishing America’s intertwined global technology and military leadership, and their hope that President Trump will reject the conservative anti-government dogma that justifies virtually every type of budget cut outside traditional defense or law enforcement spending. But the idea that America’s approach to the Chinese tech challenged was remotely up to snuff before Mr. Trump’s election not only fails the test of historical accuracy. It has blinded them to all the other policy changes needed to ensure that the United States stays Number One.

(What’s Left of) Our Economy: Will Tech Kill Too Many Jobs?

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Alan Turing, artificial intelligence, automation, Financial Times, Gillian Tett, Jobs, Paul Wallace, Reuters, robots, tech, technology, Turing Test, work, {What's Left of) Our Economy

One of the biggest issues facing our whole human species is one that I have (uncharacteristically!) written on little: whether or not the latest and future generations of technology will kill off way more jobs than they will create. One big reason: I’m still trying to bone up on this question, and I’m still very much in the learning phase about the future of work – and especially work that will pay a living wage..

But despite my limited knowledge, I’m pretty sure that two recent articles on the subject are especially valuable for shedding light on dimensions that demand a lot more attention.

The first is a recent column on the Reuters site presenting a case for optimism that the new robots and artificial intelligence will turn out to be big net new jobs creators. Author Paul Wallace, a former editor at The Economist magazine, definitely makes some strong points. For example, he argues that too much of the research underlying the case for pessimism wrongly assumes that all positions in sectors considered highly vulnerable are equally vulnerable.

Indeed, Wallace spotlights a study finding that a focus on tasks rather than occupations can dramatically reduce the numbers of workers at risk – at least, it seems, for the time being. One big reason? Many seemingly vulnerable positions allegedly involve “crucial social interactions” that no hardware or software or combination (on the horizon?) can replicate.

Yet those possible qualifications I just mentioned point to one major potential vulnerability in Wallace’s argument – and in the study he cites. Both seem to assume that the technologies in question won’t advance much more – and possibly that they will never, or not for decades, reach the stage where they can interface adequately with human customers or colleagues. You don’t need to be a science fiction buff to understand the implausibility of that scenario.

In fact, recall that pioneering computer scientist Alan Turing displayed unmistakable confidence that such progress was at least theoretically possible. Why else would he have developed his famous test of whether machines could be genuinely intelligent, and even, by extension, conscious?

“Turing put forward the idea of an ‘imitation game’, in which a human being and a computer would be interrogated under conditions where the interrogator would not know which was which, the communication being entirely by textual messages. Turing argued that if the interrogator could not distinguish them by questioning, then it would be unreasonable not to call the computer intelligent, because we judge other people’s intelligence from external observation in just this way.”

The article also raises big questions about the quality of the jobs that Wallace (and other optimists?) are confident won’t be robot-ized out of existence. Some definitely seem desirable – like “designing smartphone apps that have only just sprung into existence” – although I still wonder whether sooner rather than later apps won’t be designing themselves much more efficiently.

But the other examples of safe jobs sound a lot like dead-end jobs – e.g., restaurant jobs, personal trainer positions, and tour guides. And I continue to struggle understanding why they’re thought to be especially safe, either, over any meaningful stretch of time.

Gillian Tett, the managing editor for U.S. news at the Financial Times, seems fairly upbeat about employment and automation, too, and also cites research purporting to undercut techno-alarmism. Like Wallace’s examples, it’s worth considering. Her summary of the message: “[P]eople are also working with robots in new roles.” But also like Wallace’s examples, it raises the question, “For how much longer?”

Much stronger is this point made by Tett: “[T]here is a burning need for policymakers to obtain much better data on what is really happening in the American workplace. Anthropological studies are small scale, while the macro-level data are surprisingly weak, partly because the Bureau of Labor Statistics tends to collect data through traditional channels.”

My contacts with the Trump transition team convince me that upgrading American government statistics bearing on trade and offshoring are due for a big rethink. The clearly surging importance of the latest actual and potential labor-saving technologies means that their actual and likely impact on the world of work demand the same treatment.

(What’s Left of) Our Economy: Be Careful What You Wish For on Labor Day

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AI, artificial intelligence, executive compensation, Jobs, Labor Day, productive investment, robotics, stock buybacks, technology, workers, {What's Left of) Our Economy

What better time than the run-up to Labor Day to lament the state of the American job market – including not just still-disturbingly high rates of un- & underemployment, but all the subpar indicators on the Federal Reserve dashboard? And what better time to blame corporate America’s recent splurge on unproductive spending of all kinds for the sorry state of so much of the nation’s workforce?

But here’s the funny (not “funny ha-ha”) thing about it. There does seem to be little question that unproductive uses of corporate resources are abundant. Two columns this week – from Harold Meyerson in The Washington Post and Paul Roberts in The Los Angeles Times — show that convincingly. The percentage of companies’ profits devoted to financing buybacks of shares of their own stock is especially outrageous, given how heavily executive compensation these days depends on stock prices.

But it could be seriously misguided to assume, in Roberts’ words, that a major answer, and probably the major answer, to U.S. workers’ woes is to “restore a broader sense of the corporation as a social citizen” and thereby encourage business to view “workers, communities and other stakeholders” as assets much more worthy of investing in.

I’m not doubting that more corporate spending on plant, equipment, technology, and worker training would expand employment. But given the continued rise of labor-saving technologies, it’s far from clear that such behavior would expand high wage employment by anything close to leaps and bounds – at least in the manufacturing and tech companies that Meyerson and Roberts obviously are thinking of first and foremost.

In fact, for what it’s worth, the academic and policy classes in America seem far more worried today that the current generation of business equipment and software, characterized by advanced robotics and artificial intelligence, will break the historic pattern and wind up displacing on net many more good jobs than it creates.

So let’s definitely use Labor Day as an opportunity to spotlight the need to make America’s economy much less of a casino focused tightly on enriching the already wealthy, and much more of an engine of healthy growth and rising living standards for the rest of the nation. But let’s not forget that, with so many massive demographic, social, and cultural as well as technological waves breaking over the economy, not to mention the (often but not completely policy-driven) globalization of production and investment, bashing the usual villains is bound to yield dramatically diminishing returns.

(What’s Left of) Our Economy: Media Misses Jackson Hole Trade and Jobs Angle

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artificial intelligence, automation, Federal Reserve, Jackson Hole, Jobs, machines, Mainstream Media, middle skill, polarization, robotics, Trade, wages, Yellen, {What's Left of) Our Economy

It’s been completely taboo in the national economic policy establishment to acknowledge that the freest possible trade flows might not always benefit the U.S. or global economies over significant stretches of time – so maybe it represents progress that one paper commissioned for the big Federal Reserve Jackson Hole conference mentioned the possibility prominently. But when you look at Fed chair Janet Yellen’s keynote speech to a gathering focused on employment issues, and in particular to the Mainstream Media’s coverage of the study, it’s clear that the progress has been minimal.

At least if Yellen’s treatment of the subject was confined to a single mention, it departed from the conventional wisdom. Research, she observed “suggests that the decline in real unit labor costs may partly reflect secular factors that predate the recession, including changing patterns of production and international trade….” That’s anything but a ringing endorsement of Washington heading further down the trade liberalization road, as President Obama and Congress’ Republican leaders seem determined to do with their pursuit of a Trans-Pacific Partnership agreement in particular.

The media’s treatment of MIT economist David Autor’s study of forces shaping labor markets in recent decades ignored the subject even more studiously. It’s true that Autor’s subject was the impact of technological change. It’s also true that his skepticism about the employment effects of recent advances in robotics and artificial intelligence contradicted the reemerging conventional wisdom in a newsworthy way. But what virtually no reporters told their readers was why Autor was skeptical that the latest stage in automation deserved so much blame in particular for destroying middle-skill American jobs, and for leaving labor markets polarized between very high-wage and –skill jobs and very low-wage and-skill positions.

As he stated in his conclusion, these developments seem “more closely associated with two other macroeconomic events. A first is the bursting of the ‘dot‑com’ bubble, followed by the collapse of the housing market and the ensuing financial crisis, both of which curtailed investment and innovative activity. A second is the employment dislocations in the U.S. labor market brought about by rapid globalization, particularly the sharp rise of import penetration from China following its accession to the World Trade Organization in 2001.”

Economists are often – rightly — accused of clinging to outmoded or just plain wrong theories long after the facts debunk them. But today’s Jackson Hole reporting makes clear that the Mainstream Media can be even more blindly dogmatic.