BRIEFLY NOTED: For 2021-07-28 We
Things that went whizzing by that I want to remember:
First:
There are two and only two regions in the world that have successfully “converged” to leading-edge norms: Northwest and Southwestern Europe on the one hand, and the East Asian Pacific Rim on the other.
With respect to the Pacific Rim, originally the belief was that it was Japan that had done something special—had taken the Hamilton-List model of development, modified it, and applied it super-successfully. Then it was Japan and the Four Tigers that had the secret sauce. But now we have added coastal China; Vietnam, Malaysia, and Thailand; and—perhaps—Indonesia. It is region-wide, in spite of substantial differences in policies and starting points, with the Philippines being the very odd creature out in the region. This should give us pause, and should give us many clues as to what is essential and what is accidental in the full-convergence process:
Noah Smith: What Studwell Got Wrong: ‘My favorite book about economic development is Joe Studwell’s How Asia Works. If you haven’t read this book, you should definitely remedy that. In the meantime, you can start with Scott Alexander’s excellent summary…. How Asia Works… tells a coherent story about how countries get rich…. Land reform: Forcibly buy up tenant farms from landlords and give it to the tenants…. Export discipline: Push companies to export instead of just selling domestically. Cut off support to companies that try to export and fail…. Financial control: Push banks to support exporters instead of putting their money into real estate bubbles and the like…. Because it’s so hard to test, the theory serves less as a tried-and-true policy prescription and more as a launching point for ideas about how to manage a developing economy…. Studwell does make a few mistakes…. The time and effort that Studwell puts into coming up with reasons why South Korea has done a bit better than Taiwan is probably wasted; South Korea simply has a slightly more expensive currency…. Studwell’s biggest mistake, however, is writing off Malaysia….. How Asia Works may have made a more general mistake by focusing only on failures when it came to Southeast Asian countries and contrasting these with successes in Northeast Asian countries.…
LINK: <https://noahpinion.substack.com/p/what-studwell-got-wrong>
One Video:
Neil Lowenthal: ’PHYSICS 101 Newton’s first law… From Pascal Bournet <https://twitter.com/NeilLowenthal1/status/1408168056149274624>
Very Briefly Noted:
Wikipedia: Wei River <https://en.wikipedia.org/wiki/Wei_River>
John Stoehr: The Country Is Failing to Face the Rage of Donald Trump’s Supporters. The Result Is Mass Death: ‘We are afraid to hold the unvaccinated accountable for their choices… <https://www.editorialboard.com/p/the-country-is-failing-to-face-the>
Angelica Oung: Taiwan’s Cute Power Playbook: ‘How adorable Olympians, cat-warrior diplomats and Star Trek ministers give Taiwan outsized international clout… <https://taipology.substack.com/p/taiwans-cute-power-playbook?utm_campaign=post_embed>
Gareth Dale: Karl Polanyi in Budapest: On his Political and Intellectual Formation<https://www.cambridge.org/core/journals/european-journal-of-sociology-archives-europeennes-de-sociologie/article/abs/karl-polanyi-in-budapest-on-his-political-and-intellectual-formation/6C7B3D96D7FD8463C5DD5E6AA1E58732>
Jens Nordvig: ’Huge divergences between US states in the delta-wave. We have been using a global bubble chart for a while to track the global outbreak along several dimensions, in one chart. We will be using the same format (automated) for the US from tomorrow… <https:// twitter.com/jnordvig/status/1419753006145409028>
Paragraphs:
Adam Tooze: Chartook: ‘Chartbook started as a free newsletter and I want very much to keep it that way. If you need to read Chartbook Newsletter for free, you are welcome to do so. If you can’t afford a paid subscription, or if you read it in a context where paying subscriptions is inappropriate, I get it. You don’t have to do anything. You will continue to receive the newsletter as before. But, writing the newsletter takes a lot of time and effort. I have to juggle it with all sorts of other commitments. So, if you can afford to, if you think the Chartbook content is valuable, if you would like to support the mission, or, simply, to buy me the equivalent of a cup of coffee once a month, please click here…
LINK: <https://adamtooze.substack.com/p/adam-toozes-chartbook-28-china-in>
Laura Tyson & John Zysman: America’s Vital Chip Mission: ‘This year’s semiconductor shortages underscore the need for a comprehensive strategy to maintain a reliable supply of components that are now indispensable to both the economy and national security. A successful strategy will have four main components…. Competitive market conditions must prevail throughout the industry, because excessive market power in any one segment can jeopardize supply. The system must also be resilient to shocks like fires, droughts, earthquakes, and geopolitical tensions and upheavals. And it must be secure in two senses: the US must maintain reliable access to cutting-edge chips and the means of producing them, and chip supplies need to be protected from threats like counterfeiting, theft, cyberattacks, and espionage. Finally, the supply must be sustainable, accounting for the significant environmental and energy costs of chip production. CRSS does not mean national autonomy in the semiconductor industry. That goal would be neither feasible nor economically rational…. What CRSS does mean is that the US should cooperate closely with the European Union, Japan, Singapore, Israel, and others who form core parts of its secure supply base. CRSS also does not mean preventing China from purchasing or selling semiconductors on global markets, or from developing its own semiconductor industry in ways that do not violate global trade and investment rules. Weaponizing trade and investment restrictions to thwart China’s long-run semiconductor ambitions will be costly and counterproductive…. There is a danger that generous fiscal support will end up subsidizing private investments that are already being planned…. Both basic and pre-competitive research in semiconductors is an increasingly borderless process, which means that the effectiveness of US outlays will depend on cooperation with allies and participation by their companies…. Finally… US… ability to prototype and scale innovations has been hampered by the “lab-to-fab valley of death.” Breakthrough projects that may be viable in research labs are often prohibitively expensive to demonstrate, leaving them starved of the private investment needed to achieve scale. A promising approach to address this problem is a pre-competitive public-private R&D partnership…
Timothy Burke: Futures of Crime and Punishment (Part V): ‘The question of why people might oppose a better future is the political problem that matters. Sometimes that’s about a tangible, visible, relatively simple motive. Sometimes it’s about a century-long cultural formation that’s deeply nestled inside the everyday lives of some group of people. Sometimes it’s not a question about people but organizations. Sometimes, most of the time, it’s all of the above…
LINK: <https://timothyburke.substack.com/p/futures-of-crime-and-punishment-part>
Scott Lemieux: Why Toyota Supported Seditionists: ‘Toyota’s now-rescinded (for how long we’ll see) decision to support members of Congress who voted to make Trump dictator for life was sort of a compound evil. Because it made a bad bet on hydrogen technology and is facing the likelihood that GM and the other carmakers ahead of them in electric technology will do to Toyota what Toyota did to them in the 70s and 80s, it is now an active collaborator with climate denialists…
LINK: <https://www.lawyersgunsmoneyblog.com/2021/07/why-toyota-supported-seditionists>
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I am struck by these two paragraphs in the CRSS article:
"CRSS also does not mean preventing China from purchasing or selling semiconductors on global markets, or from developing its own semiconductor industry in ways that do not violate global trade and investment rules. Weaponizing trade and investment restrictions to thwart China’s long-run semiconductor ambitions will be costly and counterproductive. It will disrupt global supplies, increase semiconductor prices, exacerbate shortages, and strengthen China’s resolve to move faster to achieve autonomy.
A successful CRSS strategy does require the US and its allies to maintain a competitive edge vis-à-vis China, including through coordinated trade and investment policies to contain the mounting security threats that China poses within the semiconductor supply system."
Even if it is not already too late to change "China’s resolve to move faster to achieve autonomy" - and I suspect that it is, given the recent actions of the US, including extraterritorial actions such as the pressure on ASML - the argument here seems incoherent.
If the idea is "to maintain a competitive edge", then this means allowing ("not ... preventing") China to continue to produce inferior semiconductors. Why would anyone think that attempting to consign China to a permanent inferior status would not similarly lead to attempts on the part of China to become more autonomous? (This is, of course, apart from the strange idea that the US believes that it should be able to control the industrial and trade policies of other states.)
Re the vital chip mission --
This is truly terrible policy for a bunch of reasons.
Current chip production is tapped out; this is as far as VLSI can go. It takes the entire world to support one (1) TSMC. The PRC is spending money like water and they're not getting there and almost certainly cannot get there because the fundamental constraints are creating the community of practice, which requires a certain amount of dumb luck and another certain amount of not being mercilessly authoritarian, something neither the present US nor the PRC are capable of doing in an institutional context.
Important chips are not cutting edge. They're several generations back, they go into things like routers and engine management computers and so on. The US can perfectly well make those if it can manage to do something other than profit maximization. (Ha. Double Ha, even. If you want to regain credible imperial power you're going to have to put a lot of heads on stakes in the process of de-mammonizing.)
Thirdly, the place to put massive public investment (if you can figure out how to do it; that is, spend the public money in a way that is guaranteed to reduce the status, profits, and security of an incumbent oligarch) is into a _successor_ to VLSI. You can do that via something like direct electron beam lithography, you can do that via some other device mechanism -- spintronics is a terrible name but a real thing -- but you really need to do it so as to make the required economic size to make a chip on the order of five million people, not the uncomfortable "north of a billion, maybe everybody" it's currently at if you want any sort of "chip independence" to be possible.