DeepSeek: capitalism at its finest!

Trump is right that DeepSeek is a wakeup call.  For a very long time many on the capitalist side of the argument (including myself) have taken a degree of complacent comfort in the highly derivative nature of Chinese technology.  One of out BTL commenters even went so far as to say that reports of a Chinese stealth fighter couldn't possibly be true.  Of course, we've long noted the undeniable, gargantuan successes of China's mercantile strategy, but hey, that's how Japan, S.Korea and Taiwan joined the club. 

And now, DeepSeek!   Assuming it isn't a fake - and I think we may - it represents an all-time classic example of capitalism at its finest:  people with strong commercial motivation, creativity, and sufficient political freedom - highly qualified, but sufficient - to give rein to it;  and the innovations flow!

And of course in a frontier space like LLMs, random disruptions and breakthroughs are to be expected.  We just need to recognise that a western cultural backdrop is not the only fertile context.  

So 'wakeup call' is all we need to say.  Provided that those who hear it are not just the complacent, comatose denizens of Silicon Valley.  Now, what was it about that stealth fighter again?

ND

Define Capitalism! - holiday homework for C@W

I've recently come across a book called The Ethics of Capitalism (Daniel Halliday and John Thrasher, OUP 2020).  Unsurprisingly, it starts by groping for a definition.

... Treating the relationship between markets and freedom as all or nothing tends to be a mistake of both the “purest” defenders and opponents of capitalism. It is better, then, to think of capitalism as a certain approach to harnessing and promoting markets, in part with the help of government and civil society, not a deference to markets as such... Market forces and markets are ubiquitous, and yet the existence and promotion of markets alone are not the “essence” of capitalism. What, then, is? ... In many respects, no two capitalist societies are entirely alike, so there is limited value in generating an exhaustive, philosophically precise definition of capitalism.  

... We need to make sure that any definition of capitalism, however flexible, at least captures most existing societies that are seen as more or less capitalist.  One crude way to do this is to use a proxy measure like the Economic Freedom of the World Index, which is produced annually by the Fraser Institute.  Their methodology measures size of government, legal system and security of property rights, sound money, freedom to trade internationally, and regulation.   

... A country’s economic freedom score is highly correlated with its per capita income.  Countries that are unfree, like Venezuela, have very low per capita incomes, while countries that are very free, like Hong Kong or Canada, have very high per capita incomes.  The ranking on the list also correlates well with where people around the world are trying to enter as immigrants and from where they are trying to escape. This gives us one way of arriving at an approximate and preliminary definition of capitalism. Although we will expand on this somewhat, we should think of capitalist societies as those that rank highly on most of the measures that the Economic Freedom of the World Index highlights.  In particular, capitalist societies will have: 

A. Strong legal protections for private property 

B. Wide dispersion of private property across their population 

C. Extensive international trade 

D. Consumer sovereignty (including competition in the provision of goods and services) 

E. Diversity of employment contracts 

Existing capitalist countries will have these features to greater or lesser degrees, but without at least meeting these (admittedly broad) conditions, it is unlikely that we would consider the society in question capitalist.

And that's as far as they go in their build-up.  Even if it's a useful background discussion (and there's plenty more of interesting stuff in the book), as regards essaying a definition of capitalism this is a pathetic cop-out.    

Eventually they get to this: 

...“pure” capitalism [is] the economic arrangement in which power is de-centralised, property is widespread and employment options are diverse.

Feeble.  I've occasionally shared a few definitional ideas of my own here in the past.  What do dedicated C@W readers say?   We want a definition in no more than a couple of sentences, even if you need to add an explanatory paragraph or two. 

ND

BS Britain, part 2

to continue on BE's thread of yesterday with a view of a different C@W contributor...


With the UK, it is not the overall level of life, which is great (try travelling to non-first world countries, does the trick for me everytime!), but the BS re politics is related to the fact that the class gaps are much wider now than they were.


By way of example, my retired in laws live in a much nice house than I do, despite me earning in a year what they only ever did in about 5. This grates a little. My father in law, a sensible and numerate man, has saved more into his pension than I will ever manage, plus his went up in value whereas mine would be better in cash than with the rapacious fund managers.


Indeed, 'nice' places to live in the South East and London are now £1 million plus...even on a Prime Minister's salary you are not having it. It is not all about jets, or coke and hookers (desirable though these may be) or even as I saw some nice Arab lady do before Xmas spending £700 in Hotel Chocolat on a whim. It is achieving something for the toil of labour and learning


It is just the 'middle' is dropping away and the achieving group accelerating away. Look at public schools, previously full of sons and daughters on accounts, doctors, lawyers. Now only very senior bankers, foreign billionaires and what are euphemistically known as 'property developers' can attend.


This is why over the past decade we see lots of nonsense about 'Alarm Clock Britain' (remember that!) or March of the Striving Makers etc and other such fatuous dog-whistling. The fact is the both blue collar and white collar classes have had a big downgrade over the past 30 years, in line with the Country. With the collapse in oil revenues this last few years, it is really coming home to roost in our national accounts too.


At the same time the world's leading financial minds have had much success in attracting tax-evaders of all sorts to London and our cultural superpower excellence has acted as a huge magnet for the growing peoples' of the world. Thus the Country appears to be full of both rich foreigners - which it is and a multitude of poor immigrants. No wonder the debate on immigration gets so complicated and tetchy.


We can see that the politicians, perhaps like ourselves, have no answer to these events or even ideas on what to do about it. Hence Labour having no policies at al and May insisting on more fatuous dog-whistling only yesterday.


The biggest point though is the whinge-fest above is just that. A whinge, there is little to stop people trying harder, taking risks, going for new jobs and trying new things. The animal spirit is needed for this and you see it in abundance in the Far East, socialism is killing it in UK and Europe. Perhaps with Brexit it can be re-kindled. Blaming the Government and everyone else for your own predicament gets you nowhere - reaching out yourself is the key.


Of course this problem is getting worse as technology means services will not need human labour either. At least blue collar people can build the robots and maintain them, white collar workers will suffer even more in the future and currently this is 80% of the UK economy. So a need for capitalism to be at the heart of what we do net to make sure it is successful transformation is key for the future.


It will be very interesting to see how it all turns out.