The NY Times has lost the thread a long time ago.

A penetrating article, 'b'. thanks.

Posted by: canuck | Feb 10 2025 11:05 utc | 1

Using patent filing numbers as a proxy for innovation is a bad idea.
Among other things: China has far more institutional and corporate requirements for patent filings than in the West. This is their version of Western academics' "Publish or Perish" and results in enormous numbers of junk patents even beyond the normal junk associated with patent trolling and what not.

In historical context: innovation has always been a function of work and wealth.

In particular: doing skilled work builds up expertise which leads to innovation regardless of profit motive.

Wealth also is a clear factor: the dominant economic power in any given era also overwhelmingly tends to be the largest innovator.

Posted by: c1ue | Feb 10 2025 11:07 utc | 2

Using patent filing numbers as a proxy for innovation is a bad idea.

Posted by: c1ue | Feb 10 2025 11:07 utc | 2

---

You are right. It is better to read the innovation papers or have them explained to you. Lots of times the ideas presented aren't patented.

"[GRPO Explained] DeepSeekMath: Pushing the Limits of Mathematical Reasoning in Open Language Models"

Yannic Kilchner ==> https://youtu.be/bAWV_yrqx4w

Not only does this presentation show the Chinese cultural strength of aggregating and improving on a large body of ideas, it also shows how trivial the current state-of-the-art is and the Western penchant for brute forcing solutions that require subtlety.

The paper linked to the presentation ==> https://arxiv.org/abs/2402.03300

Posted by: too scents | Feb 10 2025 11:38 utc | 3

Thanks b!

I love how American pundits are so eager to give poor China advice on how to reach success - especially in these days when their own system is crumbling while showing its real face

Posted by: Avtonom | Feb 10 2025 11:44 utc | 4

25 years ago when I began collaborating with Chinese techies, I would have seconded the NYT's argument about Chinese engineers being less innovative, because they were. They used to be copy-cats, their main concern was to not make mistake and please their superior, everything had to be done by the book, no risks were taken on a engineer's personal level, the entire administrative chain of command had to approve any deviation from the rule or specification. And so they were unable to do creative problem solving, discard requirements as irrelevant, make quick decisions, get things moving with a hands-on approch. Ten Chinese were needed to do the job of one European.

But boy, have things changed since then!

Today things are beginning to reverse. Today European company bureaucracy is worse than Chinese, and the Chinese education system and mindset have changed completely.

Posted by: Matthias | Feb 10 2025 12:01 utc | 5

An interesting admission in a very recent Economist article: “https://archive.ph/oVj51”

clw is one of many China-focused groups facing closure. The State Department has said it is freezing aid for 90 days to review programmes for waste, wokeness and support of American national interests. Those depending most on American funds are run on a shoestring budget by exiled activists who struggle to find other support, says Maya Wang of Human Rights Watch, a group not affected by the cuts. Private donors avoid critics of China in order to protect business interests. Governments are wary of Chinese dissidents. Activists cannot even rely on crowdfunding, says Ms Wang, because of surveillance.
These organisations often have the best language skills and contacts within China. Journalists rely on them for first-hand accounts and data. clw has built a network of contacts with workers inside factories across China and in Chinese projects in the global south. Uyghur and Tibetan researchers use personal connections to report on re-education camps and detentions.

So groups of dissidents directly funded by the U.S. government, who takes every opportunity to try to bad-mouth China, are being used to supply “information” (which they admit is difficult or impossible to confirm) to journalists and think-tank “researchers” - those that determine policy. How long would the funding last if they reported there was no “forced labor” in Xinjiang? And nobody sees a problem with this?

Posted by: BillB | Feb 10 2025 12:01 utc | 6

No innovation? What about the EU? We pay dimes to Google, Airbnb, FB etc for anything we do! In 15+ years they did not come up with a local alternative!

Posted by: Minaa | Feb 10 2025 12:07 utc | 7

On average, Asians and particularly East Asians have higher IQ than any other ethnia. Free from the shackles of fanatic communists after the passing away of Mao, the Chinese are exploding in productivity and creativity, but this process started in the 80s, much later than in the West, so of course they are still catching up in many areas.

Lacking the abundance of capital which OpenAI and other U.S. companies are spending on their attempts to monopolize their fields, DeepSeek had to innovate. It did so and has beaten its competition.

Deepseek did not endure a lack of capital, it was lavishly funded by a very successful Chinese quant. What happens is that compared to the price tag of projects by USA companies, it seems like projects in other nations are under-funded. Just look at procurement for armaments to feed the proxy in Ukraine. Russia does much more with a lot less, not because Russia is lacking capital.

Posted by: Johan Kaspar | Feb 10 2025 12:19 utc | 8

- First I agree that this is a good thing for China. Emmanuel Todd has the same thoughts. He also looks at the amount of engineers that a country "produces" and then both Russia and China each "produce" more engineers than e.g. the US. I assume that why the US (e.g. Musk, Apple, ...... ) so desparately want to continue those H1B1 visa programs, in spite that this is the opposite what the MAGA movement wants.

- But then we come back to population (growth). All this innovation leads to "Increased Productivity" and that in turn leads (this is VERY controversial for A LOT OF people) to SHRINKING domestic DEMAND. Then China will be forced to export even more.

- Emmanuel Todd also has hinted/said that the chinese population is (very) close to shrinking or already shrinking. If one combines this with increased productivity (= falling demand) then it means that China has to export even more. And I don't know if the US (Trump c.s.) is going to tolerate that.

Posted by: WMG | Feb 10 2025 12:20 utc | 9

Oh my. The bolded sections from the NYT article are particularly funny given that U.S. research is currently being subjected to collapse based on the political whims of President Musk and his sidekick Trump. I think they might be both Chinese agents. What’s funnier is how many researchers in the U.S. aren’t white Americans, so when the funding goes away they’re likely to move to countries that will fund scientific research.

There just aren’t enough white men in science these days to replace them either. In fact, at the undergrad and masters level in STEM at universities it’s mostly females at this point. The white male kids all want to be parasites in the FIRE sector.

Posted by: Lex | Feb 10 2025 12:29 utc | 10

Free from the shackles of fanatic communists ...

Posted by: Johan Kaspar | Feb 10 2025 12:19 utc | 8

---

Margret Thatcher Falls Down ==> https://youtu.be/ZsHd7k7OOTs

Posted by: too scents | Feb 10 2025 12:35 utc | 11

Technically, it's S. Korea, then Switzerland (at 4.7), then Japan.

Now that UK is out of EU, it's quite damning to see that South Korea alone files more patents than the whole European Union... Germany is also significantly ahead of the others, and it's funny to see once great UK being below France.
I suppose Andrei Martyanov would point out that Russia doesn't bother with patents and prefers doing its own things instead of putting military secrets out there for all to see - I wonder if The Saker didn't make that argument as well. Not sure I fully buy it, but Russian bloggers mentioned it several times in the past.

WMG | Feb 10 2025 12:20 utc | 9
Population is already decreasing a bit. Covid and lockdowns pretty much guaranteed it, with slightly higher deaths and far lower births. Births pretty much decreased by half between 2014 and 2023. Though they might bounce back a little bit, considering how low they were, and that the overall situation has been better for 1-2 years. Ironically, it's after the 1-child policy has been cancelled that China effectively came close to reaching that threshold.

Posted by: Clueless Joe | Feb 10 2025 12:35 utc | 12

Patents are not a good measure of innovation. I have been awarded several nearly ten years after the 'innovations' occurred.

The Japanese were accused of copycat products in the fifties and sixties and producing cheap goods. They have been innovating ever since.

Now is the turn of blaming the Chinese in the same manner.

NYT is still beating the same drum, but at what cost?

Posted by: Acco Hengst | Feb 10 2025 12:43 utc | 13

Well, these kind of propaganda pieces have a goal, in this case IMHO:

- target group: governments, corporations, investors
- goal 1: discourage investments & cooperation with China
- goal 2: encourage investment & cooperation with the US

- messaging:
a) we (the US) know how to do it, China doesn't
b) China should listen to be as successful as we are
c) the Chinese government is not helpful, but we are
d) the Chinese environment is not safe, but here it is
...

I really don't think that the target group of this NYT piece are the Chinese, no, it's Westerners, especially those who are visiting or listening to the AI Summit which started today in Paris.

You can clearly see what they are up to: positioning OpenAI and its products in key markets as "the holy grail of the future", especially in government.

And the biggest issue is that all those governments goons are totally hooked on this idea, just an example from the current SPD election manifesto (the party of Scholz, German Chancellor): "AI will soon be able to cure cancer!" – yes, they have that in their documents for the election in about 2 weeks.

I'm with Yann LeCun (Meta's AI head) here and his talk of yesterday evening is absolutely spot on when it comes to a realistic outlook of the future of AI:

https://www.youtube.com/watch?v=xnFmnU0Pp-8

Some teasers:

- A common disease in some Silicon Valley circles: a misplaced superiority complex.
- Symptom of advanced stage: thinking your small tribe has a monopoly on good ideas.
- Symptom of terminal stage: assuming innovations from elsewhere are obtained through cheating.

Posted by: Zet | Feb 10 2025 13:00 utc | 14

Jeez twenty first century schizoid yanks don’t know which narrative to run with.

The WSJ goes with Chinese innovation of Pharma now overtaking USA companies.

A Chinese commentator explains how. Simply it was down to racism and glass celilings where the deserters worked in US labs - they’ve gone back and set up lean mean research organisations instead of lazy nepotistic managed ones.

The Big Pharma model joins the death by a thousand cuts Resistance and death of the Unipolar empires financial wizards - they can only rush around trying to get into partnerships there now. But they can’t retain monopolies with fake overpriced over hyped tech,Pharma and the dry single advancing research field anymore.
It used to be that the majors would buy out the innovator and their inventions to put it on a shelf somewhere!

‘Rui Ma 马睿
@ruima
14h
Western Biotech’s “DeepSeek Moment” – China’s Rise in Pharma Innovation

The WSJ article opens with how Summit Therapeutics’ cancer drug, licensed from China’s Akeso, outperformed Merck’s $30B Keytruda. But apparently this isn't all that special — Chinese companies now account for 31% of major pharma licensing deals, up from just 5% in 2020.

How Did China Get Here?
The investment bank Stifel listed the below provocative answers they think you'd hear if you asked Chinese biotech CEOs. (Some of these answers seem like they apply to multiple industries, especially #1 & 2.)

1️⃣ You didn't appreciate us.
"We worked in your American labs, but you wouldn’t promote us. So we went back to China and built our own companies. Now that you see how good we are, don’t complain."

2️⃣ We run lean and fast.
"Your biotechs are bloated with unnecessary FTEs, fancy executive suites, and endless meetings. We focus on innovation, not bureaucracy. You’re paying for overhead, not breakthroughs." OUCH?!

3️⃣ We don’t need to steal your secrets.
"Finding novel epitopes and mastering phage display isn’t rocket science. We innovate just like you—except we work harder."

4️⃣ You pushed Wuxi out—we welcomed them back.
"You decided Wuxi Biologics was a threat. Fine. Now they focus on our molecules, working faster at a fraction of the cost. Again, don't complain."

Why Chinese Biotech Is Winning
✅ Lower costs & streamlined clinical trials
✅ Lean operations with minimal bureaucracy
✅ Better drug candidates at lower prices
✅ Faster R&D with Wuxi and other CDMOs driving efficiency

Global Pharma’s Growing Dependence on China
- Nearly a third of licensed molecules in 2023-2024 came from China.
- VEGF x PD-1, a major oncology breakthrough for solid tumors, originated in China, where research remains ahead of Western counterparts.
- China is rapidly advancing first-in-class biologics and fundamental life sciences research.

Finally, efforts to cut off China (e.g., BioSecure Act) are losing momentum, as they offer little national security benefit.

What This Means for Western VC & Biotech

Chinese biotech isn’t just competing—it’s delivering better drugs at lower prices. If this trend continues, industry experts are predicting it could disrupt the U.S. biotech funding model, as VCs struggle to justify sky-high valuations when superior alternatives are available for less.

Meanwhile, India is also entering the game, adding to the competition.

I’m no biotech expert, but after loosely following the industry for the past two years, this WSJ headline doesn’t surprise me. A decade ago, when LPs asked me to look into China’s then-nonexistent biotech sector, I never could have predicted its rapid rise.

What’s more surprising—and disappointing—is seeing the U.S., once the gold standard for efficiency, now bogged down in the kind of bureaucracy I used to associate with China. But as a consumer, I’m excited to see China, India, and others join the race for better drugs.
Links below in comments.
Feb 9, 2025 · 8:00 PM UTC ‘

———————
This plus stories leaking on the Soros founder Internews and it’s decades of agitprop around the world and then at ‘home’ surely means that the New Yalta is underway and the surrender terms have been offered and accepted.

Remove the ‘tanks’ of othe la NS and dismantle them.
The final part will be the Nuremberg trials against such Nazis who escaped last time to recover se again shapeshifted as ziofascist global robber barons doing what they always were born and raised to do as dynasties.

The world will get better , quicker after having been held back by such turds and their willing collective waster smug supremacism shoved down our thoats by nearly a century of cultural hegemonic saviour complex propoganda.

Which other fake industries are left to reap the typhoons? Soap Powder? Advertisers? Movie Studios? 🤡🤡🤡

Posted by: DunGroanin | Feb 10 2025 13:05 utc | 15

Half of U.S. patents are from foreign nationals

I worked for a large U.S. Corporation, every patent they sponsored from an active employee was property of 'Dell Corp', but many of our employees were foreign nationals from both China and India. This is going to inflate the number of 'U.S.' patents.

And yes, I know of specific cases. This isn't a scandal or anything, just pointing out how #'s are skewed.

Posted by: Christian J Chuba | Feb 10 2025 13:09 utc | 16

In my experience dealing with engineering in China and elsewhere, you need a critical mass of successful tech companies to get the innovation going. Once Huawei, ZTE, etc. became successful, a whole cluster of startups from these companies began to emerge and innovate. This is all relatively recent, but it is huge. Certain areas like Shenzhen are like what Silicon Valley was in the 1990’s and have a complete infrastructure of companies that provide everything to design, engineer, and manufacture products incredibly fast, and at costs that are mind-blowingly cheap - like 1/10th the price of engineering costs in the US, if you can even find a company left in the US to do it.

Posted by: Paul L | Feb 10 2025 13:09 utc | 17

Here's a nice article about LeCun's talk (machine translated form German):

Meta's AI boss: Yann LeCun doesn't believe in the future of generative AI
Yann LeCun makes bold statements. Meta's AI boss doesn't like the Silicon Valley mindset and doesn't believe in generative AI.

Yann LeCun doesn't like the term AGI, Artificial General Intelligence. Anyone who claims that we will soon reach an AGI is not lying directly, but he is wrong or has his own understanding of what is considered an AGI, says Meta's AI boss at the anniversary celebration of the FAIR team. The understanding is more than a side swipe at competitor OpenAI, which recently defined AGI as a threshold to be achieved that depends on profit – not on intelligence.
...

AMI instead of arrogance and AGI

So from Meta comes someone who warns against the mindset of Silicon Valley. "A common disease in some circles of Silicon Valley: an inappropriate complex of superionce." This includes the assumption that one has a monopoly on good ideas. If someone else has a good idea, the "end-stage symptom" is that it is assumed that this idea was won by fraud.

At LeCun, the ultimate goal is not AGI, but AMI – Advancements in human-robotic intelligence. It is a long-term project and until then many small steps have to be taken. First, you have to figure out what architecture you need in order to develop an AI that is intelligent. At LeCun, this means so-called zero-shot learning. AI models manage to master a task on the first attempt and without having been trained for it. The AI expert considers this to be a kind of human intelligence. Cats also have a corresponding intelligence. For this, however, one needs the knowledge of the physical world.

World knowledge as the basis for intelligence

Generative AI is based on predictions. This way you can't build world knowledge, says LeCun. He has long considered scaling to be the wrong way and explains as an example: "You can't predict what a room looks like, you can't know what's in a room." One could perhaps recognize the position of the windows by the light, but not predict how a second half of a room will continue. He also considers Sora and image generators to be the wrong way to map the world. In Paris, LeCun says in concrete terms: "The future of AI will not be generative AI."

People learn visually, not through language. Thoughts are there before language is there, they are converted into language, but those who do not have language still have thoughts. For LeCun, this means that we need "natural data" - but it would only be in an orderly manner. So it needs a new architecture. If someone believes that the current models could already solve problems, they are being deceived. "Models are trained for the tasks."

A 17-year-old can drive after just a few hours. "And we still don't have level 5 cars," LeCun summarizes. These are cars without drivers, exclusively with passengers. Waymo, for example, is level 4 - the routes are limited, and there are also cameras whose images are shown to people in case of doubt, who then intervene from a distance. And again and again LeCun emphasizes that you can't even develop a robot that is as smart as a cat.

However, his AI team in Paris is working on this. First in the form of a dog. Spot runs around the office as a household robot. LeCun also believes in smart glasses and in the fact that AI will make our lives easier. Currently generative AI, but in the future something completely different.

Posted by: Zet | Feb 10 2025 13:11 utc | 18

Posted by: Lex | Feb 10 2025 12:29 utc | 10

Do immigrants leave after coming to the US? I would say very rarely. A large percent come single and marry Americans. They come to work and settle and raise families. Whether coming as professionals or low wage workers, they manage.
I married a foreign graduate student back in the seventies when the distribution of allowed immigration became spread more evenly throughout the world. Many of his family have followed. Children and grandchildren have followed with intermarriage to Americans as well as other countries. All working in a wide of variety of fields and doing well.

Posted by: HelenB | Feb 10 2025 13:12 utc | 19

Good article.

What we are heading towards is a realization that China's system is far superior to the American one. The China model combines market incentives with strong state guidance and social cohesion. No capitalist class is powerful enough to control the state, which has national and social purposes under the CPC. It is not a capitalist state. The results are plainly evident: rising living standards, the best infrastructure in the world, rising social capital, tech innovation, and positive foreign relations. All of these are holistically related. China is a great success story for humanity, and shows the way forward.

Posted by: Crumch | Feb 10 2025 13:22 utc | 20

Certain areas like Shenzhen are like what Silicon Valley was in the 1990’s and have a complete infrastructure of companies that provide everything to design, engineer, and manufacture products incredibly fast, and at costs that are mind-blowingly cheap - like 1/10th the price of engineering costs in the US, if you can even find a company left in the US to do it.

Posted by: Paul L | Feb 10 2025 13:09 utc | 17

Have a look at Hangzhou:

How Is This City in China Leading Global Tech Innovation Over the U.S.?

Looking back at the rise of Silicon Valley in the 1970s, one can find striking temporal and spatial parallels with today’s Hangzhou.

Just this one simple example proves the NYT propaganda piece wrong...

Posted by: Zet | Feb 10 2025 13:23 utc | 21

Posted by: WMG | Feb 10 2025 12:20 utc | 9
China population shrinking

Well, the one-child policy shrank it, and so did the later two-child policy. By that time, 1) women had more education, 2)families with two working young adults were richer, and 3) the idea of needing a big family was squashed.
Women now have much more status in China, and they enjoy it.. Some are keen enough about their success that they don't want children, and some don't even want to marry.
Problem, though, is that still a male child is preferred by some, not sure why, perhaps inheritance issues? Some families will abort until they get a male child. Male newborns are outnumbering females considerably.

Posted by: HelenB | Feb 10 2025 13:28 utc | 22

Posted by: Clueless Joe | Feb 10 2025 12:35 utc | 12
"Covid"... No more than a bioweapon project used on the people. In Alberta they just released a study on infant mortality..up 3200%. You'll see a sharp decrease in human population in the coming years, more so in the "western" countries.

10-12 years ago I would look at photos of China, (google earth being one.) "Innovation in all parts" shown in the infrastructure projects (as a picture can show a thousand words.)
I have not yet seen a honest economic report coming out of the western rags on China. Just papers filled with hopium of failure.. As b posted in a past article about the "newspapers" **but at what cost**
What I see.. China is chugging along alright.

Posted by: heavymetal101 | Feb 10 2025 13:36 utc | 23

An example of the US excellency & exceptionalism in innovative engineering:

Nvidia’s RTX 5090 power connectors are melting

AMD even suggested the 12VHPWR connector was a fire hazard in late 2022, when the company’s gaming marketing director Sasa Marinkovic tweeted “Stay safe this holiday season” alongside a picture of 8-pin connectors.

12VHPWR has been branded a “dumpster fire,” thanks to design oversights that make it relatively easy for end users to not properly connect the cable securely. Cablemod was also forced to recall its 12VHPWR GPU power adapters last year after reports of melted adapters.

Posted by: Zet | Feb 10 2025 13:58 utc | 24

Absolutely fucking fantastic b,

Nails the heart of the issue....

" China has invested heavily in education " one short simple sentence that is the crux of the issue. No gold standard, fixed exchange rate lens here.

" How are you going to pay for it ? "

" We need to raise taxes to find the funds or have tariffs to fund the funds "

" Nobody will buy The bonds and the bond vigilantes will cause havoc so you better listen to Mr Market "

" That national debt is too high , we are leaving this debt to our children and grandchildren children to pay off"

" A huge massive fiscal hole in the budget just like a household we have to tighten our belts and balance the budget "

" We need to export our way to growth to earn more gold bars in order to fund the treasury. Russian exports fund Putin's war"

" We need a sovereign wealth fund to fund the monopoly issuer of the $"

None of this gold standard, fixed exchange rate complete BULLSHIT type of thinking above is any part of Chinese thinking when it comes to the Chinese and how they understand their own monetary system they use.

The " sound money " philosophy which are just two fancy words that mean gold standard fixed rate exchange rate thinking that were imposed wholesale throughout the EU treaties and NATO charters do not exist in China.

This is the massive difference and the crux of the issue.

China knows Money is not the hard or scarce part of the problem. They know it can be created at will via keystrokes.

They fully recognise that people, skills and real resources and the productive capacity of the economy are the hard and scarce part of the problem.

Taxes are what creates the room for money to move people, skills and real resources were they are needed. Targeted Taxes take spending power away from businesses that horde people , skills and real resources and free up these things. so that the government can persue their economic, industrial, trade, education, and public policies.

Why China gets things done and gives a big FUCK YOU to those who want to own and control these from which to extract economic rent from the population. In order to own 16 houses, 5 yachts , 22 cars and fund and interfere with the politics of the country so that the privatisations and rent seeking can continue.

This brilliant article shows China knows full well you can't move people around the economy like ignots of steel. Unlike, the libertarian gold bugs, Thatcher and Reagan and Conservatives in general.

That China is preparing and upskilling their work force to get ready to move away from the gold standard, fixed exchange rate mercalist export your way to growth economic model to a more domestic consumption based model.

No more austerity mindsets or the equivalent of the German Hartz reforms to punish workers so they could dampen down imports demand. In order to be able to run HUGE trade surplus and put exporters needs In front of the needs of the population as a whole.

Now if you want to watch this confusion in action. If you really want to fully understand how in the West we apply gold standard, fixed exchange rate economic theories on top of Monetary sovereign countries with fiat free floating currencies.

Then watch the Duran video today - Reform in the UK.

The Duran boys have mastered the art of it. As today they compare a fully monetary sovereign UK with an un monetary sovereign Greece and an un monetary sovereign Cyprus.

All the gold standard, fixed exchange rate theories embedded in the EU treaties and NATO charters are in full view as the Duran boys talk about the fully monetary sovereign UK and their fiat free floating currency.

That BULLSHIT is holding everybody back. These false memes and empty sound bites that no longer apply. Defunct " sound money" analysis that belong in a different century. Is what is the cause of every crises and the austerity mindsets.

Watch the Duran video from today and get your gold standard, fixed exchange rate bingo card out. I promise you 100% you can play gold standard, fixed exchange rate economic theory bingo.

Posted by: Sun Of Alabama | Feb 10 2025 13:58 utc | 25

"China Creates Popular 'DeepSeek' Product ...But At What Cost?"

(humor is always welcome, even if it's only satire)

Posted by: Mark Mosby | Feb 10 2025 14:04 utc | 26

China leads the world in physics research as US a distant rival, Nature Index shows
- https://www.scmp.com/news/china/science/article/3297914/china-leads-world-physics-research-us-distant-rival-nature-index-shows

Posted by: GreyCloud | Feb 10 2025 14:14 utc | 27

Well, of course *everyone knows China steals and copies everything* so naturally they aren't innovative or given to problem-solving or coming up with a single original idea in centuries. One wonders how much better off the world would be if China just happened to disappear one day, relieving the world of its thievery and aggressive behavior towards other nations. Just think how much better off almost every nation's economy would be if they didn't have to rely on Chinese products and could get back to manufacturing everything on their own. Imagine the relief of nations knowing that China wasn't poised on their borders with thousands of troops and a massive military ready to invade anywhere, anytime at a moment's notice.

Posted by: John S | Feb 10 2025 14:19 utc | 28

Posted by: WMG | Feb 10 2025 12:20 utc | 9

One really wonders what some people base their claims on.

China's exports have fallen from nearly 40% of its GDP to less than 20%, except for a slight rebound due to COVID.
While all Western countries accounting for less an less of those exports. The USA has fallen to less than 3% although remaining the first.

And this is a voluntary policy of the country. Why do you think gain in productivity means they have to export more and more and mainly to the west ?

They have one and a half billion people rising out of poverty, and big neighbors in the same trend, eager to consume, not talking about Africa and others.

And the USA has nothing to tolerate or authorize, its only recourse is boycott or tariffs while it no longer manufactures these products.

Your China-bashing comments are not well fitting on MoA.

Posted by: Sebgo | Feb 10 2025 14:20 utc | 29

" Nobody will buy The bonds and the bond vigilantes will cause havoc so you better listen to Mr Market "

Posted by: Sun Of Alabama | Feb 10 2025 13:58 utc | 25

---

You realize of course that the paper money bills that you may (or may not) have in your wallet are in fact zero-coupon bearer bonds and that when you exchange them for commodities your counter party has bought them, right?

When any seller demands more paper for their product they are being "bond vigilantes".

Posted by: too scents | Feb 10 2025 14:23 utc | 30

A few observations lead me to discount Natostan pronouncements here as racist and hypocritical.

- Ike warned not just about the “military industrial complex” but also the government controlling most R&D. Yes, in the same speech.

- In litigious USA, those USA corporate patents include plenty of “1-click shopping” and other incremental non-wonders.

- For decades, Natostan has relied on “immigrants from places they destabilized”, including Chinese diaspora, to innovate for them. It’s absurd to suggest they can’t innovate at home.

Also, the anti-communist comments here are stupid. The communists evicted the Natostan oligarchs and their puppets, laid the groundwork, and continue successfully managing their nation’s ascent.

Posted by: I forgot | Feb 10 2025 14:29 utc | 31

Not one person here has noted that China doesn't have to worry about DEI because everyone is Chinese. Because they didn't have to worry about having enough lesbians and blacks on every committee, they were able to use merit as a deciding factor. Promoting people because of merit and ability instead of sexual inclination and skin pigment is a simple and yet powerfully effective way to increase an organization's performance.

I'm not naive; I understand people still have to kiss up to the CCP in China, but they don't have to promote blacks and natives into positions which exceed their abilities, while better people languish underneath. I agree with the article's thesis that we are stupid to underestimate Chinese intelligence and creativity, but I suggest that the underperformance of the West is directly attributable to DEI and financial engineering - i.e. we are shooting ourselves in our collective feet.

Posted by: KevinB | Feb 10 2025 14:35 utc | 32

The UK prime minister announces.

We need to invest heavily in education, infrastructure to connect all parts of the country. Invest heavily in our national health service and keep it free at the point of entry. We need to build more houses so families can afford a home. Invest heavily in Research and development and invest heavily in education and skills programmes. We need to invest heavily in the productive capacity of our economy ensuring supply side bottle necks to happen. Increase ports capacity and road and rail capacity. We need to invest heavily in our rural areas and coastal towns and implement a job guarentee and give everyone who wants a job can have one.

"FUCK YOU" the British electorate cries at the top of their voices. You are not using OUR tax payer money to do those things.

Indoctrinated in Gold standard, fixed exchange rate GROUPTHINK. As a mad as a box of frogs. As a dumb as a bag of spanners.

Corporate media and the British Bull shitting BBC.

How are you going to pay for it ? "" We need to raise taxes to find the funds "

" What about the deficit and debts which are just like your own household "

" What about the trade deficit and our exports, we need to get more gold bars by exporting to fund the treasury " with this trade deficit we care living beyond our means.

Meanwhile the ideologues who planted those old gold standard, fixed exchange rate theories in our schools and universities as they taught " sound money " from their pulpits. To capture us all as we walked through the school gates from the age of 5 until we are 20.

Step in and say - yes how are you going to do those things. Just listen to the economic textbooks We invented. We have a better idea. Why don't we fund these things for you through the banks we own. We will only charge you a little bit of economic rent to do so.

Mr Market and the hedge funds we also own will be very happy. Now isn't that a better idea. Oh and we give an absolute promise our hedge funds won't shorten the £.

How about dear chap.

Posted by: Sun Of Alabama | Feb 10 2025 14:39 utc | 33

There is engineering level innovation, and then there is brand new territory inventor innovation. Counting patents doesn't tell you which is which. The US is clearly the leader in new territory inventor innovation by a country mile. No one else even comes close. Look at every major breakthrough, every significant new product or trend. It comes from the US. Everyone else is just a copycat. I'm not American I just recognize that reality.

Posted by: polkadot | Feb 10 2025 14:40 utc | 34

@WMG | Feb 10 2025 12:20 utc | 9, who said:

All this innovation leads to "Increased Productivity" and that in turn leads (this is VERY controversial for A LOT OF people) to SHRINKING domestic DEMAND. Then China will be forced to export even more.

This is a key concept. Innovation, for all its wonderful benefits, contains a paradox:

Innovation yields increased productivity. More output for less input. That's great! Now let's take a look at some of the effects.

Consider the effect of productivity on agriculture here in the U.S.

In 1910, when U.S. population was 92 million, there were 14 million farm workers, or 15% of our population at the time. Today, U.S. population is 330 million, and there are 3 million farm workers, or about 1% of our population.

That's pretty dramatic, wouldn't you say? But it's not confined to just the ag industry. It's systemic.

Looking across all industrial sectors, we note that annual labor productivity - how many workers does it take to produce the nation's GDP - has consistently been increasing at a rate of about 2% per year since 1950. Remember, this is "labor productivity" - it doesn't account for more efficient use of materials, better designs, etc. This is just how many workers produce what GDP; every year it takes 2% _fewer_ workers to produce one unit of output.

Consider the effect of this 2% annual reduction in the _need for workers_ to produce the same output. From 1950 to 2018 (70 years) labor productivity increased by about 300%. Stated another way, every 23 years, it takes half as much labor to produce the same output.

That means that every 23 years, we have to consume _twice_ as much output in order to keep everyone employed.

Here's the impact of that fact:

a. Every nation has to find, somehow, twice as many consumers _who can afford to buy_. Note the "afford to buy" aspect.
b. Every nation has to strive to find, control, secure new markets, and do so at a feverish pace. Remember: find and control twice as many consumers - or consumer buying power - every 23 years.
c. Every year, the problem gets worse by at least 2%. That is some excruciating pressure.

A so-called "consumer economy" has to either find twice as many new domestic customers with the same buying power every 23 years, or it has to double the buying power of those consumers every 23 years (or a mix of the two, of course). An exporting nation has to find twice the foreign consumers it used to have, every 23 years.

Now let's look at another effect. As automation continues its relentless march, what is happening to labor? They're getting relentlessly factored out of the production equation. _That's what "automation" does_ - it gets rid of labor.

Less workers, less pay, less buying power. And if you raise the wages of the remaining workers, well, before long you price yourself out of world markets. U.S. labor is way more expensive than China's labor is.

So who's going to buy U.S. products? Will it be the U.S. domestic labor force ... whose buying power has been anemic over the past several decades? Hmmm.

What about all those poor people in the developing world? Will they buy U.S. products? Not if they can buy the same product for a lower price from a Chinese supplier (or an Indian, Indonesian, Vietnamese, Malaysian, or Mexican supplier, just to name a few exporting countries with massive populations and relatively low wages).

So when U.S. policy makers decide to flood our country with new debt and buy-buy-buy messaging 24x7....it's easy to see why. When our U.S. policy makers and corporate leaders try every trick in the book to get control of emerging countries that have great, big pools of demand ... makes perfect sense, right?

All those other countries are doing essentially the same thing: they are increasing productivity, and chasing new markets - domestic or foreign - to sop up all that production. Production is on a rocket; we're already producing (globally) more than we can _afford to buy_, and that problem is likely to get worse as the emerging markets industrialize.

Now add in AI. That's just the latest technique in the automation story, but it's a powerful technique, that will accelerate and expand the _impact of productivity increase_.

Let's not forget that other, critical corollary of productivity increase: the benefits of productivity tend to concentrate into the hands of a relative few (those horrible capitalists, and every society seems to have 'em!) . The "few" simply can't consume a few billion dollars a year worth of hamburgers, or yachts, or whatever it is rich people actually buy. Not getting much demand from them. They sock their money away in TBills, or buy "productive assets" - e.g. the stuff that generates ... more wealth.

But most of us don't buy productive assets, do we? Most of us are selling labor, and labor is going to fall in value, inexorably, from here on out.

We've got a few choices to address the productivity paradox:

a. Redistribute the capacity to create wealth. Not redistribute wealth itself, but the capacity to generate wealth.
b. Redistribute rich people's wealth. Take it from them by some force - political or otherwise.
c. Get rid of the laborers. They're progressively less necessary, as machines replace them
d. Create new money and give it away

I advocate for item a) above. I think people can learn to find, adapt, operate and own their own production process - e.g. the means to create wealth. This is not easy, and most people can't do it now, and many never will be able to... but some can.

Option b) will lead to entrenched warfare, and the rich people will win that war. I suggest we avoid that option if possible. It may not be possible, but I hold out hope that it is.

Option c) will happen by default, because people are increasingly less able to pay the costs associated with raising a family. That's already happening in most developed and even developing countries. But if there are fewer workers, who will buy the production? Remember, every 23 years it takes half as many workers to produce the same output. Can machines be consumers?

Option d) is currently the preferred choice of the U.S. Can the U.S. continue to do this? Can other countries do this?

Option d) explains why it is so important to have the USD as the "reserve" currency, and why de-dollarization is such an anathema to U.S. elites (and ... if they think about it, all US citizens).

So that's why things are happening the way they are in world economics. Every 23 years, twice the production, falling value of labor, and four not-very-good choices to solve the problem.

Posted by: Tom Pfotzer | Feb 10 2025 14:52 utc | 35

Nothing like a bunch of lazy assumptions, and then wonder how they hot ahead of you.
A few years ago I was told that Italy had a bigger GDP therefore a bigger economy than Russia.
That aged well!

Posted by: jpc | Feb 10 2025 14:53 utc | 36

@HelenB (#22):

Posted by: WMG | Feb 10 2025 12:20 utc | 9
China population shrinking

Well, the one-child policy shrank it, and so did the later two-child policy. By that time, 1) women had more education, 2)families with two working young adults were richer, and 3) the idea of needing a big family was squashed.
Women now have much more status in China, and they enjoy it.. Some are keen enough about their success that they don't want children, and some don't even want to marry.
Problem, though, is that still a male child is preferred by some, not sure why, perhaps inheritance issues? Some families will abort until they get a male child. Male newborns are outnumbering females considerably.

Posted by: HelenB | Feb 10 2025 13:28 utc | 22
======================================================================================================================

- China imposed the "one child policy" in 1979 and only recently (say 2017 ???) ditched that policy. That policy caused men outnumbering women right now. That is indeed another big demographic problem. But still chinese married couples have a low birth rate. It's simply a matter of living costs being too high and incomes being too low.

- One also have to look at the amount of women who are able to have child (between the age of say 10 and the age of 40) If that amount is shrinking the it's inevitable that the chinese population will shrink (unless immigration will go much higher).

- Women having more status and more women entering the workfroce may seem a good thing (for women) but it's also a force that's detrimental for the birth rate. Because then women prefer to have a job instead of staying at home and having (more) children. (This applies NOT only to China but also for other countries around the world. e.g. the US or Canada).

And women having more status and entering the workforce is actually a result of a lower birthrate. Because then there is lower supply of men available for the labour market and then that void will/has been filled by women entering the workforce. And that can reinforce the trend of birthrates going lower.

- Preferring men over woman has probably to do with the fact that chinese are/were (relatively) poor. A man can work and bring income. Women stay at home and didn't have a (paid) job.

Posted by: WMG | Feb 10 2025 15:11 utc | 37

I see the MMT guy is back under a different name, hijacking every thread with his obsession. I've seen this monomaniacal behaviour in people with dementia and other mental afflictions. They get an idea in their head and can only see the entire world in terms of this one idea, no matter what the actual topic is. all very sad and must be hell for their families to live with.

Posted by: Wæsfjord | Feb 10 2025 15:15 utc | 38

I have lived in a Chinese technical college for a full semester and my own perception was that the most apparent characteristics of my Chinese friends were their enthusiasm and their way of interacting together socially, and their love of beauty and nature. They play Western games such as soccer but I have a sense that they also play local games fhat are more of a win-win type. I still have more Chinese names in my contact list than bames from any other country including my own. Xi came in power just when I boarded the plane to come back home. He sounded much more assertive than his predecessor and soon Japan elected Shinzo Abe as a response or an antidote.

I was not interested in Chinese politics but in the people themselves. China is a very complex and diverse society. And yes I have met Uighurs and I have often been to Uighur restaurants and in one case I have listened to an owner expressing his feelings. I have also listened to businessmen from Qingdao I met on the high speed train who expressed their feelings. These people are not afraid to talk. However they have balanced views and hey are not blind to the negarive rhetoric directed against China coming from the US media.

China is the young energetic guy and America is the old grumpy man complaining about everything out of his control.

Posted by: icgard L | Feb 10 2025 15:20 utc | 39

The NYT has been getting millions from the left controlling the US government, so it's a propaganda mill...But yes, China doesn't waste its students time on ethnic history, sexual perversion, or pushing DEI...Hence far superior educational results...When US education was local, and unpolluted by government money and mandates, it was excellent, though no better than some European countries..and now, it has low IQ minorities to deal with, so families have to shop for school systems and reject most biog cities....

Posted by: pyrrhus | Feb 10 2025 15:25 utc | 40

- I agree with A LOT OF other people here on "Moon Of Alabama" that the current US Empire is on its last legs.

- I am NOT "China bashing". I simply point out that - no matter how you slice it or dice it - China has some MAJOR (financial) problems / headwinds that other people here on the blog don't want to hear or don't see. Because they think that everyting is (much) better in China and/or Russia / BRICS. When one looks deeper under the bonnet then e.g. China has some VERY large structural problems that won't be easily solved.

- E.g. people here on Moon Of Alabama think that Russia and China will dominate the world in the next decade. I don't because these 2 countries have a birthrate of under 2 (= a shrinking future population). That's why I don't think Russia will "march up to the English channel and occupy e.g. France). Same story for China. (thank you, Emmanuel Todd).

Posted by: WMG | Feb 10 2025 15:31 utc | 41

" Yes, China has invested heavily in education, especially in science and technology, which has helped nurture a significant pool of talent, key to its ambition of becoming a world leader in A.I. by 2025. "

Why hasnt Russia done the same then ?

Posted by: Lavrov | Feb 10 2025 15:32 utc | 42

I think we all know that the NYT is simply a direct outlet for government/oligarch ideology. It must denigrate China and other countries by whatever means are necessary. Any NYT writer knows the "line" he or she must take so they take it. Anything outside that line is a door to unemployment. The US power elite know it can flim-flam the PMC very easily to believe even the most obviously ridiculous "facts" their MSM outlets produce. Whereas, the rest of the people are no longer believing the MSM as much and are less likely to be fooled. I tell people, that you can believe literally nothing in the mainstream, and they are on their own. Even so, I still hear people talk about the lies that have become common currency. It will take time to change all that.

Posted by: Chris Cosmos | Feb 10 2025 15:37 utc | 43

For the United States, money is the answer to everything. For example, its remedy for the problems with properly educating its populace is to throw more money into it. If the problem does not go away, then just keep throwing money at it and eventually it will disappear. The U.S. government handles other problems in the same manner. With so much money flowing like Niagara Falls, there are plenty of bandits extending their hands and getting a piece of that action. That’s why these problems persist ever since LBJ to today and into the future and will never disappear. It’s ingrained in the DNA of the American way of life.

Posted by: Jose Garcia | Feb 10 2025 15:42 utc | 44

Russia's significantly not on the patent list. Is it sanctioned from submitting them? There seems to be no concern about Russia's level of innovation coming from Russia as it just celebrated another Science Day.

IMO, the BigLie Media line of China's to be feared then items like this saying China is behind in this or that is more reflective of the West's inability to promote a new Narrative than anything else. And if the Outlaw US Empire is generating all those patents, where are the commercial products that ought to be related to them? Innovation is supposed to be realized in the marketplace. The only new things I see are higher prices.

Posted by: karlof1 | Feb 10 2025 15:49 utc | 45

- Increased productivity:

Let's assume that a company produces 10,000 units each month with 100 employees/workers each earning $ 1,000 a month. Then DEMAND is (100 x 1,000) = 100,000 (from those workers).

Now this company has increased its productivity by producing the same amount of units but now with say 90 employees each still earning 1,000 a month. Then the worker's DEMAND is now at (90 x 1.000 =) 90,000. A shrinkage of 10% in DEMAND.

In other words, by increasing productivity the producer has shrunk it's own demand for its production (and production from all other companies) by 10% (or 10,000) as well. This will be detrimental for an economy unless somewhere else there is an additional increase in demand (e.g. through an increase of debt). So, when/if this producer starts complaining about demand going down) then this producer should not blame others (greedy unions or government) but this producer should look in the mirror.

More demand: E.g. in the US we saw that after say 1980 the Debt-GDP-ratio went higher at a more rapid pace compared to the period before 1980.

And as mentioned before the chinese debt-to-GDP ratio is at 290%. Source: Micheal Pettis.

Posted by: WMG | Feb 10 2025 15:51 utc | 46

Posted by: DunGroanin | Feb 10 2025 13:05 utc | 15

Funny you mention phage sciense.

Following the fall of the wall an American company was very interested in working with the Russian institute that had just developped this revolutionary way to replace antibiotics and their resistancy problem.

Like the Chinese the Russians still had the communist mindset of the greater good and sold it for peanuts under the impression the Americans would do a better job in getting it to the market fast and effective.
Something Russians had no experience with.

Little did they know the plan was to burry it so they could keep selling antibiotics.
Much like they did with EV's to keep selling fossil fueled cars.

Posted by: Ed Bernays | Feb 10 2025 15:51 utc | 47

It’s a false dichotomy pushed by the NYT and the author of this piece. It isn’t a case of a government controlled and directed Chinese economy verses a capitalist free wheeling market driven US economy. No, the US economy is just as controlled, if not more so, than the Chinese. It’s simply controlled by a bunch of midwit mediocre elites who actually hate the free market and traditional American free enterprise…and not to mention, actual Americans. This is not to say that the Chinese may not be or might not end up being superior. It is simply to say that the competition is not as portrayed.

Posted by: CullenBaker | Feb 10 2025 15:57 utc | 48

@Lex 10

Don't think it's true to say most stems are female. At the TU in Vienna and TU Berlin most engineering and science students are male and European.

JB

Posted by: Judge Barbier | Feb 10 2025 16:00 utc | 49

E.g. people here on Moon Of Alabama think that Russia and China will dominate the world in the next decade. I don't because these 2 countries have a birthrate of under 2 (= a shrinking future population). That's why I don't think Russia will "march up to the English channel and occupy e.g. France). Same story for China. (thank you, Emmanuel Todd).

Posted by: WMG | Feb 10 2025 15:31 utc | 41

#########

Reading comprehension fail.

Many at MoA believe that the current hegemony will no longer dominate in a multi-polar world as the Global South rises.

Your insecurity about America's inevitable and predictable fall is pretty sad.

China was ancient when Russia was old. America and the Europeans are still children, civilizationally speaking.

Posted by: LoveDonbass | Feb 10 2025 16:02 utc | 50

@KevinB “ Not one person here has noted that China doesn't have to worry about DEI because everyone is Chinese”

That’s an astoundingly naive (or disingenuous) statement. There are many minorities in China and they typically get preferential treatment in such important matters as University admissions. Just because they look the same to you doesn’t mean that Hui or Mongolian folks don’t stand out in China, by appearance, family name, religion, etc. There are plenty of gays too, and in my limited experience they don’t face much in the way of discrimination (maybe in inheritance rights there may be some). The government doesn’t impose quotas and that sort of thing in many cases, such as company management, but that’s a choice. There are lots of powerful women- holding up “half the sky”.

What China does have to worry about is foreign powers funding and organizing separatist movements where there are concentrations of minorities. Perhaps that will make them stronger, I don’t know. It will affect investment.

Supposedly every US citizen is an American with equal opportunities, but there are rather strong discrepancies when we look at the distribution of minorities among the millions of imprisoned citizens.

Posted by: BillB | Feb 10 2025 16:05 utc | 51

Posted by: Lavrov | Feb 10 2025 15:32 utc | 42

##########

IIRC, Russia produces a lot of engineers.

Russian education is doing fine, as evidenced by the unique military advancements unveiled during the SMO.

Posted by: LoveDonbass | Feb 10 2025 16:06 utc | 52

Weak minded EU leaders cost their citizens more for energy.

"Natural gas prices in the EU have climbed to their highest level in two years, driven by a combination of cold weather, declining gas reserves, and concerns over potential US tariffs on imports for the EU.

Benchmark futures rose by over 4% on Monday reaching $620 per 1,000 cubic meters or €58 per megawatt-hour in household terms, the highest since February 2023, according to data from the Intercontinental Exchange (ICE).

The previous record of over $590 per 1,000 cubic meters was set last month after Ukraine refused to extend a gas transit agreement with Russia. The five-year contract with Russian energy giant Gazprom expired on December 31, cutting off pipeline gas supplies to Hungary, Romania, Poland, Slovakia, Austria, Italy, and Moldova. Ukrainian leader Vladimir Zelensky said the termination of the contract was aimed at eliminating Moscow’s energy revenues."

Posted by: Republicofscotland | Feb 10 2025 16:07 utc | 53

i agree with @ 1 canuck... thanks b...

new york times propaganda and ethnocentric viewpoints continue to inform those who are happy to not question anything... clearly you and many moa readers are not one of these folks!!

Posted by: james | Feb 10 2025 16:14 utc | 54

The NYT knows the best way for capital to take advantage of China's publicly financed well-educated, ambitious A.I. work force is to get the government out of the way of the oligarchs goal of total social domination.

Posted by: Keme | Feb 10 2025 16:16 utc | 55

Germany were on the ball b) ....

Germany understood money more than most.. They knew when " Sound money " gold standard and fixed exchange economic theories were going to be indoctrinated into the EU treaties and NATO charters by America they had to act.

If they could no longer have full monetary sovereignty and issue the Mark. The only ways in which to get the new foreign currency the Euro was by taxing, borrowing or via trade. Big changes had to be made.

Under a gold standard...

" It meant that if the central bank wanted to issue more currency then it had to get more gold to back it. That became the role of trade. Gold was considered to be the principle method of making international payments. Accordingly, as imbalances in trade (imports and exports) arose this necessitated that gold be transferred between nations (in boats) to fund these imbalances. Trade deficit countries had to ship gold to trade surplus countries.

For the surplus nations, the inflow of gold would allow their central banks to expand their money supplies (issue more notes) because they had more gold to back the currency. The rising money supply would push against the inflation barrier (given no increase in the real capacity of the economy) which would ultimately render exports less attractive to foreigners and the external surplus would decline.

For the deficit nations, the loss of gold reserves to the surplus nations forced their governments to withdraw paper currency which was deflationary and had the consequence of increasing unemployment, and driving down output growth and the general level of prices. The latter improved the competitiveness of their economy which also helped resolve the trade imbalance. But it remains that the deficit nations were forced to bear rising unemployment and vice versa as the trade imbalances resolved.

Under the gold standard, the government could not expand base money if the economy was in trade deficit. It was considered that the gold standard acted as a means to control the money supply and generate price levels in different trading countries which were consistent with trade balance. The domestic economy however was forced to make the adjustments to the trade imbalances.

Monetary policy became captive to the amount of gold that a country possessed (principally derived from trade). Variations in the gold production levels also influenced the price levels of countries.

In practical terms, the adjustments to trade that were necessary to resolve imbalances were slow. In the meantime, deficit nations had to endure domestic recessions and entrenched unemployment. So a gold standard introduces a recessionary bias to economies with the burden always falling on countries with weaker currencies (typically as a consequence of trade deficits). This inflexibility prevented governments from introducing policies that generated the best outcomes for their domestic economies (high employment).

Ultimately the monetary authorities were not able to resist the demands of the population for higher employment. "

What did Germany do ?

The Hartz reforms was a full on frontal attack on German workers. Remove some of their spending power from them. To dampen down demand for foreign imports. In order to be able to run HUGE trade surpluses. Increase their exports.

Suddenly being a member of a monetary union. Meant they could export their unemployment to those smaller countries in the fringes of the union. The PIGS countries.

Meanwhile these smaller countries were under constant austerity policies. Couldn't run deficits or debts big enough to ensure full employment in their own countries.

Sound familiar ? - see under a gold standard above.

As the smaller countries were told to run bigger trade surpluses in order to earn more Euros the equivalent of earning more gold bars under the gold standard. The austerity policies got even more severe. As Brussels never understood not all countries can run trade surpluses. Others had to run trade deficits.

Smaller countries raised taxes to get more Euros , borrowed more Euros from the ECB and implemented harsher austerity. Opened up their tourist industry even more to try and get Euros from foreign holiday makers. Started selling off their public assets. Anything that wasn't nailed down was privatised to yes the foreigners who implemented all this pain via the " sound money " gold standard and fixed exchange rate monetary architecture in the first place.

Well we all know what happened the rest is history. The crises is not over it will never be over until they move away from this imperialist " sound money " gold standard , fixed exchange rate thinking.

Every time the EU expands they have another sucker they can asset strip.It is a carbon cut out of how the exact same Northern European countries and America asset strip the global South.

Of course gold standard , fixed exchange rate " sound money" monetary architecture has always been a tool of imperialism. Why in the early days of American monetary history it was only the big landowners and European banks that pushed for it via their political proxies in the US. That were doing London's bidding via Canada.

Libertarian gold bugs don't know the true history. They have always been on the wrong side of the argument. Foolish enough to believe it would bring them freedom and prosperity. While the reality is it would put them in chains.

Posted by: Sun Of Alabama | Feb 10 2025 16:17 utc | 56

@ WMG | Feb 10 2025 15:31 utc | 41

the multi polar world is coming about quicker then many realize... yes, usa is being eclipsed! just what that means is open to conjecture... but it would be nice if it wasn't loaded with a bunch of propaganda bs too... for someone to see what is actually taking place requires an open mind that questions a lot... otherwise propaganda has an easy home in the minds of those who don't question or are happy to take info at face value..

Posted by: james | Feb 10 2025 16:17 utc | 57

Good thing the chinese cracked down on deepseek's fin-tech platform. Wouldn't have beaten OpenAI hands down (kinda like yesterday's most boring game ever).

The clowns want the CCP to get out of they way, yet want the usa regime to get IN the way? The modern libs make no sense (yet again).

Also, likewise, Iran (for 40+ years (minus a brief interlude via Barack) and Russia have innovated tremendously via sanctions.

Posted by: Sal | Feb 10 2025 16:20 utc | 58

The US is in denial and propaganda is keenly reinforcing that denial. We're all supremacists (Zionist and American Exceptionalists) swimming in the shallow end of the genre pool.

Posted by: Scottindallas | Feb 10 2025 16:25 utc | 59

WMG, increasing production in no way correlates to decreasing demand. Production requires inputs, demand for inputs. Activity begats activity. Also, shrinking population may not proves as destructive to demand as claimed here either. Look to Japan. Declining population indicates less waste on healthcare and other costs that don't increase production nor demand. China doesn't count such service activities as GDP, but we do.

Posted by: Scottindallas | Feb 10 2025 16:34 utc | 60

I thought I'd warn the commentariat here that Yves Smith over at NC has had a snit fit and the Queen is crying "off with their heads" and ending comments on her site. The woman, who I've encountered before, is offended by the crudeness of the unwashed masses crowding her little realm. To be blunt, the woman is a snob who believes there is a right way and a wrong way to approach issues. She often makes comments belittling people who dare to assert ideas she doesn't like often nitpicking with unnecessarily and insulting language. In the last comment she made on a comment of mine she totally missed the point of what I was saying and did not address or come close to addressing anything which makes me suspect she is suffering from anger issues as we all do from time to time. To be fair, her job is a tough one. When I think of "vigorous" debate I think of honestly stating what you think without being totally rude. We all need to be open to alternate opinions since there is and cannot be any mechanism that ever settles any issue--the only settlement possible is what Thich Nhat Hahn called "deep listening" which is a spiritual practice we would do well to at least begin.

She wants a dissident commentariat, but it must be a ruling class one--those are "her people" not those of us who have sought alternate paths. If you are not in the game, so to speak, she wants you to STFU.

Posted by: Chris Cosmos | Feb 10 2025 16:35 utc | 61

> but I suggest that the underperformance of the West is directly attributable to DEI and financial engineering

It’s because Western oligarchs for decades increasingly prioritized their power over their herd animals, present and potential.

Posted by: I forgot | Feb 10 2025 16:35 utc | 62

Once again we hear the lament of the bankers/wankers of the west. 'China is run by dictator bastards who won't let us in to suck up all their loot'.
My home insurance quote went up 100% in the land of deregulated banking/and everything else.
The bankers control my now shithole of a country. Keep doing what you're doing China, your success gives us hope that some semblance of sanity could soon come our way.

Posted by: Ogre | Feb 10 2025 16:43 utc | 63

> these 2 countries have a birthrate of under 2 (= a shrinking future population). That's why I don't think Russia will "march up to the English channel and occupy e.g. France).

You’re surely celebrating how USUKEU overcame this problem by importing a replacement workforce.

Posted by: I forgot | Feb 10 2025 16:43 utc | 64

Well, just another confirmation of Hudson. You can have an oligarchy of the FIRE industries or you can go to China and have a state management of these industries/individuals to limit the inherent social destruction.

Looking at the results, especially in recent years, it seems pretty clear that a society that allows billionaire parasites to destroy their host economy for fun and profits is inferior.

That said, China is a capitalist country just a surely as the US is. China however has a more modern approach to the Capitalist anarchy and has learned a few historical lessons. Essentially, China is not yet an Imperialist country.

On the socioeconomic evolution chart, the US would look like an ape with a club, whereas China would be that sort of half ape beginning to walk upright. Better, but still not fully evolved.

A fully evolved human society would require all those that must work for a wage to throw off the parasite class that produce nothing and organize a government that acts only in the interests of wage slaves at home and abroad. That's socialism.

Nonetheless, China's model of controlled Capitalism is far superior to the US. It reflects a sanity which in today's world is so rare amongst western elites, that it seems magical to those outside China. Like water in a desert.

Posted by: Ahenobarbus | Feb 10 2025 16:48 utc | 65

See Greece for details.

After the bailouts. You must run....

a) Bigger trade surpluses and export more

( so Northern European countries and America can have your real resources) rather than use them on your own development.

b) Massive austerity in your population.

( So we can starve you of funds and say public services are broken and privatise them on the cheap from which to extract economic rent.)

c) Cut taxes on business

( After we own everything we don't want to pay taxes on our profits)

(Even though as we have stripped the Drachma from you and you no longer have full monetary sovereignty taxes will become one of your revenue streams.)

d) Sell off all your assets to your Northern European creditors and open up your tourist and housing markets to us.

(Hotels, beach front luxury accommodation, flats, houses we will own an extract economic rent via various outlets like our newly created Air b and b. As we stuff them full with our tourists.)

Pure unadulterated " sound money " gold standard, fixed exchange rate policies were the chains put around the Greeks necks.

Freedom and prosperity indeed. For those who implemented those gold standard , fixed exchange rate chains.

On others.....

Posted by: Sun Of Alabama | Feb 10 2025 16:50 utc | 66

The NYT is one of the Deep State's favorite propaganda outlets.

It never saw an opportunity for war that it didn't promote.

An example to remember is the NYT Judy Woodruff Dick Cheney colon powell iraq Yellow cake fable.

You can't believe a word it prints.

Posted by: Chaka Khagan | Feb 10 2025 16:55 utc | 67

Bully, upon seeing his favorite victim bulking up, cries “Hey, stop working out!”

Posted by: William Gruff | Feb 10 2025 16:56 utc | 68

@ Ahenobarbus | Feb 10 2025 16:48 utc | 65

nice analogy! thanks...

Posted by: james | Feb 10 2025 16:56 utc | 69

Posted by: BillB | Feb 10 2025 16:05 utc | 51

China most certainly has DEI measures for minorities.

Posted by: Ed Bernays | Feb 10 2025 17:00 utc | 70

HelenB, I think fewer and fewer foreign students are staying, but the myth of the US dream remains hard to kill as reality is far different, but from grad school it might be harder to see

Sun, MMT is BS. There are limits to money printing and what governments spend money on matters. Progressive income taxes are great policy as they encourage reinvestment, which allows firms and wealthy to avoid that taxation. Either you invest or We the people will take this gains and do so collectively. Progressive income taxes encourage individual invest, ironically.
Government should invest in infrastructure/utilities, which includes education; all are investments in growth. Where UBI would see much less efficient investment and more inflation. The progressive income taxes also limit inflation, encouraging deconsolidation, smaller businesses and a stronger middle class. They promote both demand and domestic production/supply.

MMT has limits, the COVID cash showed that, free money increases demand and does nothing for supply

Posted by: Scottindallas | Feb 10 2025 17:05 utc | 71

Look at this photo.

https://en.wikipedia.org/wiki/Chaim_Weizmann#Discovery_of_synthetic_acetone

"Ben-Zion Mossinson, Albert Einstein, Chaim Weizmann, Menachem Ussishkin on SS Rotterdam, 1921"

Albert was an extremely well-connected 'patent clerk'.

That means he was not a 'clerk'; he was an inside man.

Patent systems are not magically immune to the corruption of all other parts of the coercive sector. They are as corrupt as the rest of it, maybe more.

I'm pretty sure Albert's role was to intercept patent filings for the coercive sector.

That practice has continued and grown to this day.

Posted by: Matt | Feb 10 2025 17:07 utc | 72

I was conversing with Chatgpt and let us say it produced this general statement following my queries. I post it here, as it may prove of interest and relevance to the topic at hand (it itself is in form of a query):

---

"I wonder whether Mandarin Chinese, as a logographic language, offers unique advantages for training large language models (LLMs). Logographic languages, such as Mandarin and Japanese, encode meaning more compactly per symbol compared to Western phonetic languages. While LLMs tokenize all languages into standardized units, the dense nature of logographic languages might reduce token usage per idea, potentially yielding marginal efficiency gains during training and inference. This raises questions about resource consumption and model optimization when working with these languages.

Beyond token efficiency, there’s a cultural-linguistic dimension worth exploring. Mandarin Chinese, shaped by philosophical traditions like Taoism, often embraces paradox and ambiguity. Such structures may encode complex, non-linear relationships between concepts, which LLMs might capture differently compared to models trained predominantly on linear, binary-logic Western languages. This suggests that models trained extensively on Mandarin may develop subtle capabilities in processing ambiguity, non-dualistic logic, or layered context.

Interestingly, parallels can be drawn to computational linguistics research on Sanskrit, a highly structured language governed by Panini’s *Ashtadhyayi*, which functions as an ancient generative grammar akin to modern algorithmic systems. Sanskrit’s compact, rule-based approach encodes layers of semantic information within minimal linguistic structures, much like how Mandarin leverages its logographic symbols. The precise and formalized grammar of Sanskrit, known for reducing ambiguity and compressing meaning, has inspired computational models for parsing and understanding complex language systems efficiently.

While speculative, it’s worth investigating whether these linguistic properties—be they the compact, logographic nature of Mandarin or the rule-based minimalism of Sanskrit—influence how effectively models generate nuanced language outputs. Comparative research might explore whether Chinese-trained LLMs exhibit greater fluency with complex, context-dependent reasoning or require fewer computation cycles per task, offering insights into language-specific AI optimizations."

---

Posted by: Ludovic | Feb 10 2025 17:08 utc | 73

Sun, your argument conflated income taxes with property and sales taxes, your argument fails to note the very different ways these work. Your argument is so broad it's pointless. There are limits to MMT, but indeed, it's always wise to invest wisely, and government should borrow to do so, as they can. However throwing money around blindly is silly.

Your argument again ignores state and local government and it's funding entirely, they are more than half of government, but, whatever. City and state government is primarily run on sales and property taxes, these don't exist on the federal level, though federal policy may increase or decrease their share of the "load". Stop looking for big secrets and know that most tax arguments are so broad they're utterly pointless ideology and not rooted in anything.
Again progressive income taxes have a major divide on effective vs nominal rates, and no one talks about what happens there (firm lead reinvestment) this is no where factored into tax discussions. Your MMT point is a good argument for government deficits if spending is productive/wise.

Posted by: Scottindallas | Feb 10 2025 17:14 utc | 74

@ Chris Cosmos | Feb 10 2025 16:35 utc | 61 about Yves Smith/Susan Webber and Almost Nakedcapitalism....thx

I was an early supporter but was called "crazy pants" and such by her directly because of my continued discussion of public/private finance and support for the public kind as a utility like China is providing.

Yves is riding the dead horse of private finance in our society. It may take a while but the ugly effects on society of private finance are becoming glaringly apparent like the attempt to rein in China success.

Posted by: psychohistorian | Feb 10 2025 17:15 utc | 75

Language issues aside, a Chinese student can always come to a U.S. high school and do fairly well if not be a top performer. A U.S. student would get absolutely slaughtered in a Chinese High School. Nobody in China cares if their son got a football scholarship to play at Notre Dame, they care about getting their son into engineering in Beijing University.

Posted by: Deniz 152 | Feb 10 2025 17:20 utc | 76

The main two differences between China and many other countries are that first, the government appears to be on the driving seat, not corporations or oligarchs. And that, second, politicians do seem to be able to think and act in long-term interests of the country.

Posted by: Marvin | Feb 10 2025 17:24 utc | 77

re. #2 "innovation has always been a function of work and wealth."

Where is 'necessity' in the equation?

As in, "Necessity is the mother of invention."

Wealth is not a prerequisite.

That is the allure of the co-opted patent systems. Supposedly anyone with a great idea can patent it and make a fortune because the idea will sell itself.

It almost never works that way.

Posted by: Matt | Feb 10 2025 17:25 utc | 78

Tom Pfotszer, your numbers are false. We don't produce much of our produce that we would have produced then. Our production of grains is less valuable than other more labor intensive produce that is the as well automated and thus is imported. Further, you'd have to consider John Deere employees as farm workers too. So, again those figures are fraught. Innovation doesn't decrease demand, it increases demand by spherical factors, but we only measure a tangent or two. Again, the too broad arguments make little sense and bear little relation to the full economic realities.

Of course economics arguments from people who've never filed an itemized return are all pretty empty. These principles look different from the perspective of the C-suite, most economic arguments utterly ignore how corporations react to various taxes, they assume they'll be directly affected and either prosper, or flee/die. It's a false dichotomy and thus all fallacious based reasoning. Otherwise good stuff, teaches first economics principles but bears little relation to reality

Posted by: Scottindallas | Feb 10 2025 17:32 utc | 79

Asia times - Chinese innovation
China’s magnetic tech can detect US stealth subs: study
China’s claimed breakthrough in magnetic tracking could make US stealth submarines obsolete in a Taiwan war scenario

. . .The team, led by Associate Professor Wang Honglei, discovered that the magnetic fields generated by the wakes of submarines, such as the US Seawolf-class, can be detected using airborne magnetometers. This potentially groundbreaking technique exploits the magnetic interactions between seawater ions disturbed by the submarine’s motion and the Earth’s geomagnetic field. . .here

Posted by: Don Bacon | Feb 10 2025 17:47 utc | 80

Indoctrination runs deep. Even if you say to people "You can't have unlimited growth on a finite planet", and they nod in agreement, they go right back to their "We must grow more, infinitely in population and production, or we lose!"

China had 400 million people in 1900 and had regular famines. Today China has 1.4 billion people and no famines, but only because it scours the world and its oceans to feed its people.

Why moan and tear your garments if China's birth rate drops? That makes no sense. The planet cannot continue to feed ever expanding populations.

And arguments about productivity leading to economic problems and trade wars stop at the obvious conclusions. This is because if you accept the capitalist systems that both the US and China have, where productivity leads to unemployment while profits continue to be siphoned off, and the capitalist looks to foreign markets to export their way to greater wealth, it will obviously lead to conflict. But people want to pretend that a global expansive system can be win/win for everyone involved.

But actually, this is how kinetic wars start. If every country is fighting for markets, resources and labor, it always devolves into warfare.

Abraham Lincoln said: "As long as one workingman is unemployed, the hours of labor are too long."
Is any brainwashed 21st century human capable of understanding the mindset of that 19th century man, straight off the farm, where many hands make light work, if everyone shares in that work?

It doesn't seem so. Hence, the endless arguments about which form of capitalism can lead to the desired ever-increasing growth, the US kind where the corporations control the government, or the Chinese kind where the government reins in the corporations. And all of them dependent on ever-increasing productivity, which leads to the need for fewer people, combined with a bizarre belief that the population must also increase, needed or not, or you somehow lose the demographic war.

Whether ever-increasing growth is a good thing at all never enters the minds of the brainwashed.

Posted by: wagelaborer | Feb 10 2025 17:50 utc | 81

Ahenbarus, the US is not a capitalist country. "Capital" is a depreciable asset, a truck, factory, machine, even a storefront. Capital is not finance, investment, software, consulting, or any of that. "America is all about the latter, paper pushing, that's "mercantilism" if you like, but it's not "capital" nor capitalism. Russia, China, the Soviets and Chi-coms were all, always capitalists. They/we were all keenly focused on securing natural resources to refine in production facilities. People get hung up on labels, as if the DDR or DPRK were "Democratic"

Socialism, Communism and Capitalism are meaningless pejoratives and nothing more

Posted by: Scottindallas | Feb 10 2025 17:54 utc | 82

Posted by: psychohistorian | Feb 10 2025 17:15 utc | 75

Sorry ?

You want people who's education, work, prime interest and source of income is private finance to talk against private finance ?

Good luck.

Posted by: Sebgo | Feb 10 2025 17:54 utc | 83

Chaka Kagan, Judith Miller, not Woodruff, she's at PBS

Posted by: Scottindallas | Feb 10 2025 17:56 utc | 84

Also look at the usefulness of the patents.

From my experience at cutting-edge tech research demos:

American demo: "We've made a system to help blind people cross a crosswalk when there is no signal. She only needs to carry around this supercomputer in this specially designed, oversized backpack."

Indian demo: "We show how database queries over variable sized nodes can be sped up 15% on certain non-heterogeneous data sets."

Chinese demo: "We turn any 2-D photo into a three-dimensional model."

Posted by: Owen Markelstein | Feb 10 2025 18:02 utc | 85

I take exception with the idea that patents == innovation. A large number of patents are utter bullshit, with nothing innovative at all. I have also worked at places that, having coming up with something truly innovative, purposely didn't file a patent, because we didn't want to disclose to the world what we did.

Posted by: ian | Feb 10 2025 18:04 utc | 86

I maintain that the quality of life and satisfaction of a citizenry is a better perspective when comparing countries.

GDP, volume of patents, and PhDs per capita don't mean much.

When the Empire goes to West Asia, the Houthis are the gatekeepers. They are one of, if not the, poorest Arab nations.

Spirit and soul will always beat materialism.

Posted by: LoveDonbass | Feb 10 2025 18:10 utc | 87

"Sun, your argument conflated income taxes with property and sales taxes, your argument fails to note the very different ways these work. Your argument is so broad it's pointless. There are limits to MMT, but indeed, it's always wise to invest wisely, and government should borrow to do so, as they can. However throwing money around blindly is silly."

Posted by: Scottindallas | Feb 10 2025 17:14 utc | 74

Sun is a self absorbed, long winded moron, at least while pontificating (1) on the topic of MMT and monetary theory.

Paper money is not something new; in the 13th century Marco Polo was at the court of Kublai Khan where he was amazed that the Emperor was able to exchange paper money (Yuan, Yuan Dynasty)for the gold or silver of the merchants.

About 70 years later the Yuan dynasty was gone and so was the delusional paper currency.

In modern times the reserve currency was the US dollar backed, at least fractionally, by gold-until 1971 when Nixon closed the gold window-it is now 50 some years from that date.

In 1971 gold was $35 an ounce/dollar; today it is $2,880 an ounce-reality vs delusion-easily distinguishable, unless, of course, you are a certified moron.

1. Canuk is off script on this comment-one cannot be a 'moron' and also 'pontificate' (2)-ie 'moron pontificating' is an oxymoron. If Canuk was being sarcastic he should have used parentheses around 'pontificate'.

2. In the sense that the Roman Catholic Pontiff can but only speak the truth:
"(in the Roman Catholic Church) officiate as bishop, especially at Mass.
"he pontificated at three Christmas Masses"" (3)

3. Which further illustrates Sun of Alabama's 'delusions of grandeur' regarding his grandiose, redundant prose-not Apollonian as S of A. fervently imagines, but rather more akin to 'yellow journalism', alas, without the exciting, enticing parts.

Posted by: canuck | Feb 10 2025 18:11 utc | 88

Ludovic, AI is horribly over hyped and the nature of the Chinese language wouldn't directly offer much efficiency. Logic is at least 3000 years old, and epistemologists have been trying to define knowledge for all that time. Every computer language is nothing more than the Eight logical moves, every single one is the same. In symbolic logic we have truth tables that run the various sound arguments and their consequents. This gets to the "Asian" reasoning, in pursuing my Philosophy degree I focused on world religions, existentialism, and logic, while cooking at a couple of restaurants and playing rugby. Anyway, back then I argued that Eastern ideas would produce different results on the truth tables in 2 of the 32 of the examples. If a defines b and b defines a you get a different outcome than assuming there is an a and a not a we'll call b. That's the difference the AI answer triggered on.
But again, there's a reason why Chomsky and many smart people know AI is all hype, there haven't been any revolutions in the 3000 year old study of epistemology. Humans don't think using logic, logical systems only offer tautologies, though Eastern thoughts on the dichotomy of identity offer some different perspectives. But nothing groundbreaking.

Posted by: Scottindallas | Feb 10 2025 18:14 utc | 89

Some other factors to keep in mind:
- China's high rise came only about 2 decades ago. The US' somewhere in the 18th century.
- Brain gain: the US siphons off talent both from within and beyond it's hegemony. Move MIT and its vast number of foreign students to let's say Singapore and see what happens with US innovation.
- China doesn't have 5 Eyes to pry and spy on tech and innovation of others.

Posted by: xor | Feb 10 2025 18:15 utc | 90

*everyone knows China steals and copies everything*

I cannot say too often that everyone here should look at SCIENCE AND CIVILISATION IN CHINA by Joseph Needham et al. Chinese people have been inventing things like printing, gunpowder, many other things, for centuries and millinia. The USA is less than 300 years old and has imported most of its inventers and technicians. Think of Einstein and Tesla and many others.

Posted by: lester | Feb 10 2025 18:18 utc | 91

@ Scottindallas | Feb 10 2025 17:14 utc | 74

FWIW: Everyone else has been down this road with Sun. You won’t change his mind. He won’t change yours.

Posted by: I forgot | Feb 10 2025 18:25 utc | 92

Why is the USA declining, China rising? One big, obvious, reason is that the US wastes vast amounts of money, effort, imagination on WAR-WAR-WAR. Every othe year since about 1950, the US government has started a war some place. (I inlude regime changes and proxy wars.)

PR China, does none of these things. it is obvious to anyone living in China that the government spends it's money on infrastructure - new railroads, highways, airports, sea ports, etc.

China has also made education a priority. In 1949, almost no one could read and write. Now almost everyone can read and write.

Posted by: lester | Feb 10 2025 18:31 utc | 93

@ Posted by: Tom Pfotzer | Feb 10 2025 14:52 utc | 35

Tom, I like your analysis very much. That reminds me that many of the measures introduced during the Progressive period of the US, namely the anti-trust and anti-monopoly measures were weakened starting in the 1980's by the neo-liberals to accomodate the rising technology companies. That was done to promote the adoption of the new information technology innovations.

However, historically, markets everywhere worked under an umbrella of regulations in the ancient Middle-East as well as during the Middle-Ages. Those regulations had the effect of limiting the development of innovations. Back to the recent colonial times, colonies were under contractual obligations to get essential goods from the master country, either Britain or France and were not allowed to produce them locally.

So the US itself is to blame to have opened the doors of innovation worldwide through it's own process of deregulation.

It seems to me that free markets are unstable unless some constraints are built in. This leads us directly into the challenges of world governance.

Posted by: icgard L | Feb 10 2025 18:34 utc | 94

Asia times -- The US is promoting Chinese innovation.
--China Daily
"Noting that Chinese AI startup DeepSeek has recently caused a global sensation with its cost-effective and open-source large language model, they added that the US' attempt to contain China's rise in the high-tech sector will only motivate Chinese enterprises to double down efforts on independent innovation, in order to make progress in crucial technologies.". .here

Posted by: Don Bacon | Feb 10 2025 18:35 utc | 95

B said..
Lacking the abundance of capital which OpenAI and other U.S. companies are spending on their attempts to monopolize their fields, DeepSeek had to innovate. It did so and has beaten its competition.

Posted by b on February 10, 2025 at 10:51 UTC | Permalink
How less government intervention would have led to a better performance than China has shown is difficult to argue. The NYT for one fails at it.

<=the biggest government interference is patent and copyright laws second comes selective funding of projects. These laws use hot thin air to capture and transform inventions and creatives into protected monopolies. Thereafter development and improvements are constrained to those involved in the original discovery so those involved in follow on discoveries associated with the original are limited to those allowed by the monopoly owner.

Using law to capture inventions into copyright or patent protected monopolies eliminates much innovation and contributes, instead of productive competitive efficiency, greatly contributes to the distance between the wealthy few and the poor struggling masses. Monopoly powers allow the wealthy to extract resources and wealth from the poor. In a fair and democratic world everything should be open-source.

Posted by: Lex | Feb 10 2025 12:29 utc | 10
There just aren’t enough white men in science these days to replace the HIBs either. In fact, at the under grad and masters level in STEM at universities it’s mostly females at this point. The white male kids all want to be parasites in the FIRE sector.
<= the return on investment (cost of university training and on the job training after graduation vs relative long term reward) discourage the Male..To move students to stem requires low to no cost high quality education, funding after graduation and independence from the corporate bull-pin workspaces or government bureaucracies. Copyright and patent laws, getting funding, rules that constrain who can have what kinds of instrumentation or who can work on what types of subjects, etc., or who can have access to the information resources that explain the current state of the art in a particular branch of science have greatly restrained independent scientist from engaging in their life's dream. Inventive science is about dreams come true. Homeland security restricts outsider access to library resources, obtaining access to the research journals that impact my area of science has been limited by homeland security, department of defense, and every commercial provider in the field. only those under control of the bureaucracy are allowed to see, hear or touch. Women are generally comfortable with working inside the system ( most were secretaries to someone in the past). They have little problem with restricted access, accountability when nothing has been produced, as they seem to like working inside someone's else's system. But most male scientist seek to avoid systems, constraints and accountability for their time spent as much as possible. Many students were victim to government effort to remove industrial capacity from America to China, they saw their well educated patents forced out as a result, and are not willing to subject their families to this kind of thing again.. I remember in the late sixties and early 70s scientist who worked in various industries were fired just before they became eligible to for retirement pay from company retirement plans.. Where I worked it was regular at Christmas time to find 50 year old engineer or scientist fired.. ..to avoid after employment pension cost..yes law has remedied that, but Trump has shown that the stroke of a pen can change that.

what is that person going to do for the rest of his or her life. No retirement, no related industry to get a new job at, and no access to the information and tools need to do the science or engineering that person has become expert at.. No sir, STEM is not for me..

Posted by: Zet | Feb 10 2025 13:00 utc | 14
Some teasers:

- A common disease in some Silicon Valley circles: a misplaced superiority complex.
- Symptom of advanced stage: thinking your small tribe has a monopoly on good ideas.
- Symptom of terminal stage: assuming innovations from elsewhere are obtained through cheating.
<=exactly.. but it is not limited to silicon valley its everywhere throughout the USA
and the biggest contributor to that disease is the universities that have partnered their personnel and grants with commercial enterprises. These universities capture all rights to use or exploit a discovery or innovation into their employment contracts and the university now depends on the royalties which their IP brings in. The universities have become holders of the Intangible properties (copyrights and patents) that do not appear on the balance sheets of those who produce the goods and provide the services those intangible properties enable.

Posted by: Crumch | Feb 10 2025 13:22 utc | 20
What we are heading towards is a realization that China's system is far superior to the American one. The China model combines market incentives with strong state guidance and social cohesion.
<= yes I made a contribution to MoA on that very topic about 6 week ago. Clearly the Chinese system is
going to force every other system of governance and economics to compete with it..and competition will not
be over a single product or over the capture of entire markets, to compete with the Chinese system, it will be necessary to have a more efficient system of production. The participants in the most efficient system will win.

Posted by: Tom Pfotzer | Feb 10 2025 14:52 utc | 35
Every 23 years, twice the production, falling value of labor, and four not-very-good choices to solve the problem.
<= Option D is getting close to what is needed.. In spite of the attempts by the nation state system to keep the ordinary people in the world separated, uninformed and close to poverty, the people governed by these slave masters are coming closer together.. and are beginning to see their greatest enemy has been the nation state system and its use of money to keep the governed people in wage slavery. The era of wage slavery is ending.. The result of Hegemonic USD has been global distribution of a single currency. That distribution has provided the world with an opportunity to get past wage slavery. All that is needed is for every nation to print USD and use in both internally and externally. That would make it impossible for the bankers to collect interest or to tax anything or anybody and it would make accumulated wealth useless. It would make possible the globalization of pricing as well as it would take the bankers and the governments the bankers own and use out of the quality of life equation. I have written several comments for MoA in the past months about making every nation in the world issuers of USD. Obviously the banking system objects..but as technology and innovation proceeds, the numbers of people employed is trending to zero. Lots of things traditional wealthy folks have are going to disappear, very soon. Relative wealth is going to become general wealth and wealth will be measured in terms of the productivity of the society. Machines and the software needed to run them are going to be the producers of all goods and services.

Posted by: pyrrhus | Feb 10 2025 15:25 utc | 40

When US education was local, and unpolluted by government money and mandates, it was excellent,
<=yes, the department of education has done its best to convert education into a system of propaganda.

Posted by: WMG | Feb 10 2025 15:31 utc | 41
That's why I don't think Russia will "march up to the English channel and occupy e.g. France). Same story for China. (thank you, Emmanuel Todd).
<= no the reason Russia nor China will march to the English channel is because it is not needed, they have already won... the game.. it does not matter what government controls the people, the people no matter their government will still buy from China.

The USA market is controlled by a bunch of midwit mediocre elites who actually hate the free market and traditional American free enterprise…and not to mention, actual Americans.
<=yes, copyrights and patent and monopoly powers, but there is more ..the efficiency of the production system ..its the holy grail.. The Chinese system is the most efficient production system the world has yet seen and it is just getting started.. The entire world will be owned by China and China will not need to fire a single shot.

Posted by: Scottindallas | Feb 10 2025 17:05 utc | 71
Progressive income taxes are great policy as they encourage reinvestment, which allows firms and wealthy to avoid that taxation.

<= in the world where everyone has access to as much USD as they need to effect transactions and to do research and to invent things, there is an unlimited supply of investment capital.. every transaction is merely a memo entry. see discussion comments above..

Posted by: snake | Feb 10 2025 18:37 utc | 96

I was conversing with Chatgpt and ...

Posted by: Ludovic | Feb 10 2025 17:08 utc | 73

---

The training data knows what's up.

Nice post.

Posted by: too scents | Feb 10 2025 18:38 utc | 97

Another interesting (I think) datapoint- an American friend who lives in China with his executive Chinese spouse and their kids was relating to me the interactions with teachers at their parent-teacher meetings. They can be more or less confrontational, with the teachers very much in control, woe betide the parents who are not ensuring their kids spend hours on homework.

Posted by: BillB | Feb 10 2025 18:40 utc | 98

"I take exception with the idea that patents == innovation. A large number of patents are utter bullshit, with nothing innovative at all. I have also worked at places that, having coming up with something truly innovative, purposely didn't file a patent, because we didn't want to disclose to the world what we did."

Posted by: ian | Feb 10 2025 18:04 utc | 86

Precisely.

Once one discloses the info , if the patent is big enough, the rule of 'might is right justice' prevails as the larger corporations outlast patent holders through litigation. I got beat in a zinc filter (no chlorine, much cheaper) killing pool maintenance idea in the same process in the 90's and the big company fucked me..

One famous episode where the little guy did win was the engineer whom invented the intermittent windshield wiper (1)Robert Kearns (there is a movie too!) won a lawsuit after 12 years against Ford than other car makers but lost his family-got divorced- during the struggle; he is the exception that proves the rule.

1. "The lawsuit against the Ford Motor Company was opened in 1978 and ended in 1990. Kearns sought $395 million in damages. He turned down a $30 million settlement offer in 1990 and took it to the jury, which awarded him $5.2 million; Ford agreed to pay $10.2 million rather than face another round of litigation.

Kearns mostly acted as his own attorney in the subsequent suit against Chrysler, which began in 1982, even questioning witnesses on the stand. The Chrysler verdict was decided in Kearns's favor in 1992. Chrysler was ordered to pay Kearns US$18.7 million with interest.[10] Chrysler appealed the court decision, but the Federal Circuit let the judgment stand. The Supreme Court declined to hear the case.[12] By 1995, after spending over US$10 million in legal fees, Kearns received approximately US$30 million in compensation for Chrysler's patent infringement."

Posted by: canuck | Feb 10 2025 18:41 utc | 99

The Chinese government should tell the Americans that, when they require their advice on tech (or anything else for that matter) they’ll ask. Till then, the USshould shut-the-fuck-up and get its own ducks in a row; Peking or otherwise!

Posted by: Vragtes | Feb 10 2025 18:44 utc | 100