All great points, but have you considered a National Counsel of Corporations?
The problems you raise have been solved before. The state takes over the management of the companies in order to keep the markets happy. It helps that 80% of the stock market is owned by one single bloc (https://welcometothemachine.co/)
Yes we are absolutely running up against physical limits, but again, that just means more innovation is going to be done. Sure hydrogen takes a lot to bring online, but Microsoft alone could probably fund bringing that fuel source online in a big way. To you point, they won’t because they aren’t saviors, but it’s not too far fetched to imagine the USG forcing companies to contribute to a strategic energy fund.
What’s happening right now is that people are building natural gas power plants on campus with the data centers. I can imagine coal plants coming back for the purpose.
Of course it will all run up against chip scarcity.
I think we’ve got at least 2 years before any one particular scarcity becomes a pin prick to the bubble. I think it’ll take 3 years at least given the current state of play, and in those 3 years a lot can change.
And as for profit, the USG is probably doing a lot of Keynesianisms right now paying defense companies to develop strategic artificial intelligence, so all of the startups going nowhere isn’t necessarily the bellwether of pin prick.
Also, I wasn’t saying that downward wage pressure would create the conditions for the same people to be rehired by the same companies for the same positions. I was just saying that downward wage pressure creates new economic opportunities for margins. In essence, downward wage pressure at scale creates upward pressure on the rate of profit. Certain labor jobs may become more viable if wages continue to fall. And we’ll need labor since clearly the US is way behind on factory automation.
I think China can keep labor prices low enough to make this difficult or impossible for the US. But that’s why the US keeps trying to decouple. In the meantime, I imagine the US will start doing a lot more exploitation of low wage labor in Latin America. But then, factories just can’t be built fast enough.
I think potentially what I am pointing to is that the USA might be 2 years away from a total economic collapse and there’s a large faction of the ruling class working to extend that time line via various means.
And the reason I think they are is because there is nowhere else for them to go. The only military potentially stronger than the US is China and China isn’t going to allow EuroBourgeois to setup shop fully in China (unless it’s a nice big trap).
So for better or worse, the owning class has to make it work in the US or it’s all over. And that means every single technique is going to be applied to get another 6 months and another and another.
The National Council of Corporations doesn’t really change anything I said above. The elephant in the room is that this tech is not living up to the expectations, and none of these companies have a viable business model. I mean it’s possible that the whole AI industry will be nationalized I suppose, but I can’t really see that happening myself. Furthermore, even if it did happen that would also lead to a crash because the government would be diverting already strained resources towards propping up an industry that produces no actual value.
There is no way to innovate your way out of this. It’s not a problem you can solve by just throwing money at it. Any serious innovation and infrastructure development is going to be a decades long project. The bubble is going to pop long before that. Again, read my article that I linked earlier. I discuss the specifics of the logistics involved, and it’ obvious there’s nothing that can be done to massively increase grid capacity in a way that would be needed.
Not only is the US behind in factory automation, it’s behind in having actual factories, and the manufacturing has only continued to shrink since Trump took over. There aren’t factories available to employ people, they would have to be built. But building the factories requires investment and skilled labor that itself doesn’t exist. The US economy has been increasingly financialized, and that means you don’t just have a readily available pool of workers to go out and build factories. Even if you did, then you’re still looking at at least a decade of figuring out the supply chains and all the other logistics needed to build and operate them.
Just look at how the attempts to ramp up ammunition production for Ukraine have fared. The US was unable to meaningfully ramp up basic things like artillery shell production, and that’s with state level funding being freely available.
I do think a 2 year timeline is very much a reasonable bet. We will likely see first tremors early next year, and then things will just continue to get worse from there.
In terms of military, it’s pretty clear that Russia is beating the US in Ukraine, and China’s military industrial strength absolutely dwarfs anything Russia can put out. At this point, DPRK likely has a more competent military than the US.
So, the owning class might be scrambling to make things work, but just like with Ukraine, simply wishing for things really hard can’t change material reality.
All great points, but have you considered a National Counsel of Corporations?
The problems you raise have been solved before. The state takes over the management of the companies in order to keep the markets happy. It helps that 80% of the stock market is owned by one single bloc (https://welcometothemachine.co/)
Yes we are absolutely running up against physical limits, but again, that just means more innovation is going to be done. Sure hydrogen takes a lot to bring online, but Microsoft alone could probably fund bringing that fuel source online in a big way. To you point, they won’t because they aren’t saviors, but it’s not too far fetched to imagine the USG forcing companies to contribute to a strategic energy fund.
What’s happening right now is that people are building natural gas power plants on campus with the data centers. I can imagine coal plants coming back for the purpose.
Of course it will all run up against chip scarcity.
I think we’ve got at least 2 years before any one particular scarcity becomes a pin prick to the bubble. I think it’ll take 3 years at least given the current state of play, and in those 3 years a lot can change.
And as for profit, the USG is probably doing a lot of Keynesianisms right now paying defense companies to develop strategic artificial intelligence, so all of the startups going nowhere isn’t necessarily the bellwether of pin prick.
Also, I wasn’t saying that downward wage pressure would create the conditions for the same people to be rehired by the same companies for the same positions. I was just saying that downward wage pressure creates new economic opportunities for margins. In essence, downward wage pressure at scale creates upward pressure on the rate of profit. Certain labor jobs may become more viable if wages continue to fall. And we’ll need labor since clearly the US is way behind on factory automation.
I think China can keep labor prices low enough to make this difficult or impossible for the US. But that’s why the US keeps trying to decouple. In the meantime, I imagine the US will start doing a lot more exploitation of low wage labor in Latin America. But then, factories just can’t be built fast enough.
I think potentially what I am pointing to is that the USA might be 2 years away from a total economic collapse and there’s a large faction of the ruling class working to extend that time line via various means.
And the reason I think they are is because there is nowhere else for them to go. The only military potentially stronger than the US is China and China isn’t going to allow EuroBourgeois to setup shop fully in China (unless it’s a nice big trap).
So for better or worse, the owning class has to make it work in the US or it’s all over. And that means every single technique is going to be applied to get another 6 months and another and another.
The National Council of Corporations doesn’t really change anything I said above. The elephant in the room is that this tech is not living up to the expectations, and none of these companies have a viable business model. I mean it’s possible that the whole AI industry will be nationalized I suppose, but I can’t really see that happening myself. Furthermore, even if it did happen that would also lead to a crash because the government would be diverting already strained resources towards propping up an industry that produces no actual value.
There is no way to innovate your way out of this. It’s not a problem you can solve by just throwing money at it. Any serious innovation and infrastructure development is going to be a decades long project. The bubble is going to pop long before that. Again, read my article that I linked earlier. I discuss the specifics of the logistics involved, and it’ obvious there’s nothing that can be done to massively increase grid capacity in a way that would be needed.
Not only is the US behind in factory automation, it’s behind in having actual factories, and the manufacturing has only continued to shrink since Trump took over. There aren’t factories available to employ people, they would have to be built. But building the factories requires investment and skilled labor that itself doesn’t exist. The US economy has been increasingly financialized, and that means you don’t just have a readily available pool of workers to go out and build factories. Even if you did, then you’re still looking at at least a decade of figuring out the supply chains and all the other logistics needed to build and operate them.
Just look at how the attempts to ramp up ammunition production for Ukraine have fared. The US was unable to meaningfully ramp up basic things like artillery shell production, and that’s with state level funding being freely available.
I do think a 2 year timeline is very much a reasonable bet. We will likely see first tremors early next year, and then things will just continue to get worse from there.
In terms of military, it’s pretty clear that Russia is beating the US in Ukraine, and China’s military industrial strength absolutely dwarfs anything Russia can put out. At this point, DPRK likely has a more competent military than the US.
So, the owning class might be scrambling to make things work, but just like with Ukraine, simply wishing for things really hard can’t change material reality.