I spend most of my time thinking about China’s technology trajectory. The main ideas can be summed up in two broad strokes. First, China’s technology foundations are fragile, which the trade war has made evident. Second, over the longer term, I expect that China will stiffen those foundations and develop firms capable of pushing forward the technological frontier.
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We should think of technology as a living product, which has to be practiced for knowledge even to be maintained at its current level. I offered the example of the Ise Grand Shrine, which Japanese caretakers tear down and rebuild anew every generation so that they don’t lose its production knowledge. Here’s an example I came across more recently: Mother Jones reported in 2009 that the US government forgot how to produce “Fogbank,” a classified material essential to the production of the hydrogen bomb, because relevant experts had retired. The government then had to spend millions of dollars to recover that production knowledge. I believe that the hard-to-measure process knowledge is more important than the more easily observable tools and IP. We would be capable of making few meaningful advancements if a civilization from 2,000 years in the future were able to dump blueprints on us, just as the Pharaohs and Caesars from 2,000 years in the past would have been able to do nothing with the blueprints of today.
Today, Chinese workers produce most of the world’s goods, which means that they engage more than anyone else in the technological learning process. Few Chinese firms are world-leading brands. But workers in China are using the latest tools to manufacture many of the most sophisticated products in the world.
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[Philip K. Dick's] novels are good at depicting the frustrations of elites, whose only satisfaction comes from toying with the fates of smaller characters. They have good reactive instincts and can manage problems that flare up, but lack the confidence that they can affect larger outcomes, and thus have no real sense of initiative beyond petty matters. That’s the story of an elite in Hong Kong, and I worry that US elites are giving in to the same tendencies.
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There were essentially two manufacturing principles in the 19th century: the British focused more on cultivating highly-skilled master craftsmen; the US placed greater emphasis on mechanization and the interchangeability of parts. Its prime mover was the United States Ordnance Department, which insisted on machine-made interoperable parts production of small arms. The department practiced this principle at its national armories in Springfield and Harpers Ferry, and also required its private contractors to adopt interchangeability. It wasn’t easy to do. The principle was more of a political and aesthetic ideal until the end of the century. It took two generations of skilled mechanics to perfect interchangeability, after having developed gauges capable of precise measurements and machine tools to produce fine enough components that could be assembled with little fitting.
From the article:
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