Previously on We Bet On Unlimited Growth, the global financial meltdown of 2008. If I was even slightly less cynical I'd honestly wonder how many times they're going to stick a fork in the same outlet in my lifetime.
There was what? At least three boom and bust cycles involving railroads. Do we have any good reason to believe the computing revolution will be nicer? So far we've had one bust. We now know the topic for the second while the timing remains hard to guess.
Betting on economic growth exceeding the piling up of debt is something most governments around the world have been doing for about 40 years straight now.
I wonder about Japan and Europe these days. Back in the 80s, when Japan was pursuing the "Fifth-Generation Computers", EU and US scrambled to compete with Japan. Like, it was a big deal for strategists and decision-making high-level politicians of that era.
Now in 2020s, it seems only China is tailing US and in turn, US is wary of China. What gives?
> in the 80s, when Japan was pursuing the "Fifth-Generation Computers"
“The Fifth Generation Computer Systems…was a 10-year initiative launched in 1982 by Japan's Ministry of International Trade and Industry (MITI) to develop computers based on massively parallel computing and logic programming” [1].
Do you think Japan and the EU would be better off if our/their economies were centred around trillion dollar companies that make a product that is 20% better than the Chinese models at 1000x the cost?
The reality is LLMs are just tools, and not even close to as revolutionary of tools as computers themselves. Even Chinese companies understand that. It is the US alone that is in machine god mania, gambling their economy on this idea that the next model will let them rule the world if only we give it three more months.
>Do you think Japan and the EU would be better off if our/their economies were centred around trillion dollar companies that make a product that is 20% better than the Chinese models at 1000x the cost?
Why Japan and Europe don't develop a model that is 20% worse at 0.001x the cost?
1. Price of electricity is low because of China's excellent energy policy. Admittedly this should absolutely be a priority of Japan/EU, but it isn't, so first you'd have to start there...
2. Because of #1, China already had massive infrastructure in place for eg. crypto mining that was readily repurposed. Japan/EU never engaged in this fad, so they have to start effectively from scratch in building out the GPU infrastructure.
3. Chinese talent has a major advantage in being relatively isolated from the US economy. US-aligned economies must compete with the US for talent. It's hard to develop technology at a reasonable cost when all of your top talent is leaving to get paid 10x as much by speculative gamblers. If you don't have a very good reason to believe the gamblers are making a good bet, it's better to wait for them to go bust.
Added on to all of that... where is the upside? Chinese models are open anyways. There is nothing that merits this being a matter of urgent government intervention at all, it's basically pure downside.
A "bet" implies there's a risk of losing if it doesn't play out. As far as the individuals in the Govt and the involved companies are concerned, there is no risk for them. It's not their money, and the individuals will come out much better off regardless of outcome. It is simply a good investment.
Many. They did an overly generous self examination a few weeks ago.
Generally, they are a trailing indicator, like someone appearing on the Forbes millionaire under 30 list (Theranos, FTX). However, they are not always wrong.
Think of Economist writers as intelligent interns - people who couldn't make it in the world of finance, and with a particular ideological bent imposed on them by their editors.
The counterfactual was never "cutting pensions and medicare". That wasn't on the table and no government would ever commit suicide and pass it. It was either, spend until the economy completely collapses under the weight of debt and hyperinflation, or do exactly the same thing but pray for a miracle while doing so.
It's private companies making a bet on the AI boom.
What governments do (which is the actual content of the article) is betting on economic growth to exceed the growing debt.
Which is their dangerous bet on the AI boom.
Previously on We Bet On Unlimited Growth, the global financial meltdown of 2008. If I was even slightly less cynical I'd honestly wonder how many times they're going to stick a fork in the same outlet in my lifetime.
There was what? At least three boom and bust cycles involving railroads. Do we have any good reason to believe the computing revolution will be nicer? So far we've had one bust. We now know the topic for the second while the timing remains hard to guess.
Betting on economic growth exceeding the piling up of debt is something most governments around the world have been doing for about 40 years straight now.
I wonder about Japan and Europe these days. Back in the 80s, when Japan was pursuing the "Fifth-Generation Computers", EU and US scrambled to compete with Japan. Like, it was a big deal for strategists and decision-making high-level politicians of that era.
Now in 2020s, it seems only China is tailing US and in turn, US is wary of China. What gives?
> in the 80s, when Japan was pursuing the "Fifth-Generation Computers"
“The Fifth Generation Computer Systems…was a 10-year initiative launched in 1982 by Japan's Ministry of International Trade and Industry (MITI) to develop computers based on massively parallel computing and logic programming” [1].
That sounds an awful lot like GPUs and HBM.
[1] https://en.wikipedia.org/wiki/Fifth_Generation_Computer_Syst...
Except this time it works.
A lot of what's happening now is the (very) belated delivery of what everyone was talking about when they talked about "expert systems."
Do you think Japan and the EU would be better off if our/their economies were centred around trillion dollar companies that make a product that is 20% better than the Chinese models at 1000x the cost?
The reality is LLMs are just tools, and not even close to as revolutionary of tools as computers themselves. Even Chinese companies understand that. It is the US alone that is in machine god mania, gambling their economy on this idea that the next model will let them rule the world if only we give it three more months.
>Do you think Japan and the EU would be better off if our/their economies were centred around trillion dollar companies that make a product that is 20% better than the Chinese models at 1000x the cost?
Why Japan and Europe don't develop a model that is 20% worse at 0.001x the cost?
Chinese companies have three major advantages:
1. Price of electricity is low because of China's excellent energy policy. Admittedly this should absolutely be a priority of Japan/EU, but it isn't, so first you'd have to start there...
2. Because of #1, China already had massive infrastructure in place for eg. crypto mining that was readily repurposed. Japan/EU never engaged in this fad, so they have to start effectively from scratch in building out the GPU infrastructure.
3. Chinese talent has a major advantage in being relatively isolated from the US economy. US-aligned economies must compete with the US for talent. It's hard to develop technology at a reasonable cost when all of your top talent is leaving to get paid 10x as much by speculative gamblers. If you don't have a very good reason to believe the gamblers are making a good bet, it's better to wait for them to go bust.
Added on to all of that... where is the upside? Chinese models are open anyways. There is nothing that merits this being a matter of urgent government intervention at all, it's basically pure downside.
https://archive.is/VZbsS
A "bet" implies there's a risk of losing if it doesn't play out. As far as the individuals in the Govt and the involved companies are concerned, there is no risk for them. It's not their money, and the individuals will come out much better off regardless of outcome. It is simply a good investment.
Further, Uncle Sam can always service dollar-denominated debt.
Curious: Is there any technologies and their adoption that were successful that Economist was wrong, or right about?
Many. They did an overly generous self examination a few weeks ago.
Generally, they are a trailing indicator, like someone appearing on the Forbes millionaire under 30 list (Theranos, FTX). However, they are not always wrong.
Think of Economist writers as intelligent interns - people who couldn't make it in the world of finance, and with a particular ideological bent imposed on them by their editors.
So you don’t listen to the weather or use weather apps?
Link?
https://archive.is/VZbsS
It's not a bet.
The counterfactual was never "cutting pensions and medicare". That wasn't on the table and no government would ever commit suicide and pass it. It was either, spend until the economy completely collapses under the weight of debt and hyperinflation, or do exactly the same thing but pray for a miracle while doing so.
So, we're doing the second one.