Sunset in Norfolk
Walking back from the beach late Friday afternoon, I saw this through the trees on the path.
Quote of the Day
“To paraphrase Gramsci, crypto is the morbid symptom of an interregnum, an interregnum in which the gold standard is dead but a fully political money that dares to speak its name has not yet been born. Crypto is the libertarian spawn of neoliberalism’s ultimately doomed effort to depoliticize money.”
- Geoff Ingham in his book, The Nature of Money.
Musical alternative to the morning’s radio news
Little Village | She Runs Hot
I once heard a marvellous performance of this by Ry Cooder and David Lindley, but can’t find it anywhere now. So this one will have to do.
Long Read of the Day
Dan Wang’s 2021 letter from China
If you’re interested in China (and who isn’t, just now), then Dan’s annual letter is a must-read. The current edition, which sums up his impressions of the most important things that happened last year, is characteristically fascinating and thought-provoking.
It’s very long (15,200 words) so you need to make an appointment with it. What I value most about it is the way Dan tries to intuit how the ruling regime is thinking, and therefore come closer to understanding what Xi Jinping & Co are trying to do, rather than viewing their a actions through the distorting lens of Western hegemonic anxiety.
For at least a year, for example, I’ve had the feeling that the Xi regime has seen through the delusion that social media companies are technological innovators. Dan’s letter confirms that, as the following long excerpt suggests:
While Beijing has restrained internet companies, it has done nothing to hurt more science-based industries like semiconductors and renewables. In fact, it has offered these industries tax breaks and other forms of political support. The 14th Five-Year Plan, for example, places far greater emphasis on science-based technologies than the internet. Thus one of the effects of Beijing’s squeeze has been prioritization of science-based technologies over the consumer internet industry. Far from being a generalized “tech” crackdown, the leadership continues to talk tirelessly about the value of science and technology.
In nearly all of my letters over the years, I’ve lamented the idea that consumer internet companies have taken over the idea of technological progress: “It’s entirely plausible that Facebook and Tencent might be net negative for technological developments. The apps they develop offer fun, productivity-dragging distractions; and the companies pull smart kids from R&D-intensive fields like materials science or semiconductor manufacturing, into ad optimization and game development.” I don’t think that Beijing’s primary goal is to reshuffle technological priorities. Instead, it is mostly a mix of a technocratic belief that reducing the power of platforms would help smaller companies as well as a desire to impose political control on big firms.
But there is also an ideological element that rejects consumer internet as the peak of technology. Beijing recognizes that internet platforms make not only a great deal of money, but also many social problems. Consider online tutoring. The Ministry of Education claims to have surveyed 700,000 parents before it declared that the sector can no longer make profit. What was the industry profiting from? In the government’s view, education companies have become adept at monetizing the status anxieties of parents: the Zhang family keeps feeling outspent by the Li family, and vice versa. In a similar theme, the leadership considers the peer-to-peer lending industry as well as Ant Financial to be sources of financial risks; and video games to be a source of social harm. These companies may be profitable, but entrepreneurial dynamism here is not a good thing.
Where does Beijing prefer dynamism? Science-based industries that serve strategic needs. Beijing, in other words, is trying to make semiconductors sexy again. One might reasonably question how dealing pain to users of chips (like consumer internet firms) might help the industry. I think that the focus should instead be on talent and capital allocation. If venture capitalists are mostly funding social networking companies, then they would be able to hire the best talent while denying them to chipmakers. That has arguably been the story in Silicon Valley over the last decade: Intel and Cisco were not quite able to compete for the best engineering talent with Facebook and Google. Beijing wants to change this calculation among domestic investors and students at Peking and Tsinghua.
So here’s a regime believing that the best talent in the country should work in manufacturing sectors rather than consumer internet and finance. This is heresy to Western political elites who think it’s fine that so many bright physics PhDs have gone to work in hedge funds and Silicon Valley where they contribute little of value to most of the people in the country — not to mention the world — while at the same time powering the insane enrichment of a small tech elite and venture capitalists.
Dan is also very good on Xi’s new-found enthusiasm for “common prosperity”, i.e. some kind of official backlash against the rising social inequality engendered by the rise of tech and related industries.
“If Beijing were only brutal or unpredictable,” he writes,
then people wouldn’t be so on edge. But it is both. No one is sure how far the state will prosecute its values-based agenda. A lot of things happened this year that remain too bizarre for belief. For example, the end of the summer was the time when everyone’s nerves were most short, as they wondered what “common prosperity” will herald and whether the state will ravage other industries with the ferocity it brought to bear on online tutoring. The organs of state media chose that moment to publicize the ultra-left ravings of an obscure blogger. To the author’s own astonishment, he found his celebration of the crackdown splashed onto the homepages of state media and pushed into newsfeeds. The rest of us were left feeling bewildered that the propaganda officials selected such fringe view for a news push.
Government officials subsequently emerged to assure people that common prosperity will not mean egalitarianism. Still, precisely what it will mean is still not scoped out. Beijing reined in its control tendencies only after it had thoroughly terrified people. The essential bet of top leader Xi Jinping is that there will always be a large stock of dynamism in the country, and the job of the party-state is to steer that energy in the right directions. That bet might turn out to be successful, but this push is also demonstrating the odium of never-ending restrictions on personal liberty.
There’s lots more interesting stuff here. Worth your time.
How do we make the move to electric cars happen? Ask Norway
Two-thirds of all new cars bought by Norwegians last year were electric. Turns out you just need a government with a clue.
Yesterday’s Observer column:
So that’s how to do it. You just need lashings of money, a political system that responds to public opinion and a government that knows what it’s doing. Which is why it would be unwise to bet on the UK meeting its deadline of being an EV-only society by 2030 – a failure that would have pleased Douglas Adams (of blessed memory). “I love deadlines,” he once said, “I love the whooshing noise they make as they go by.” And the great thing about EVs is that they don’t growl, they merely whoosh.
My commonplace booklet
If, having read this, you thought it was April 1st, then join the club.
This Blog is also available as a daily email. If you think that might suit you better, why not subscribe? One email a day, Monday through Friday, delivered to your inbox. It’s free, and you can always unsubscribe if you conclude your inbox is full enough already!