Category Archives: Web Article Review

Is China going through an economic slump or a second industrial revolution?

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The rate of GDP growth in China is slowing, and prices for consumer goods are dropping. This article from Warwick Powell argues that the situation is not an economic problem at all, but rather caused by a sudden acceleration of productivity analogous to a period of rapid industrial progress in the west from about 1870 to 1890.

The period from roughly 1870 to 1890 in the industrialising world is often called the Great Deflation because consumer and producer prices fell steadily for nearly two decades. Yet this was simultaneously a period of rapid industrial expansion: steelmaking, railways, shipbuilding, chemicals, and textiles all experienced extraordinary increases in output, fixed capital formation, and labour productivity. Real wages also rose, even as nominal prices and, in some cases, nominal wages remained flat or declined. Conventional monetary interpretations – where deflation is associated with falling demand, recession and financial stress – don’t explain this apparent contradiction.

The key is that this deflation was supply-led. Massive technological change (Bessemer steel, open-hearth furnaces, mechanised weaving and rail distribution networks), dramatic extensions of energy inputs (coal and steam), and economies of scale fundamentally changed production cost structures. Unit costs fell faster than aggregate demand could absorb the increased output. Prices therefore declined not because the economy was weak, but because the production system became structurally more efficient. This is what we could call “good deflation.” An excellent paper by Borio et al., (2015) explores this in more detail…

China’s current economic conditions – marked by soft consumer prices, prolonged factory-gate deflation and extraordinary expansion in clean-energy and advanced-manufacturing output – mirror the paradox of the Great Deflation of 1870–1890. Then, as now, falling prices were not signs of contraction, but the surface expression of deep productivity shifts and sectoral transformation. China today is experiencing a similar structural reconfiguration.

In our high school (U.S.) history classes, we tend to learn that the late 19th century was a time of rapid technological and industrial progress, but that was also coupled with rapidly growing inequality, labor unrest, and unregulated pollution. Maybe China’s system and leaders will be able to reap the benefits of progress while keeping these problems under control. My thinking is authoritarian political and economic systems can appear to work better than democratic capitalist systems when they have leadership in place that is rational and genuinely has the citizens’ best interests at heart. This might actually describe the majority of authoritarian places and points in time. But then they don’t have the safeguards in place to stop bad leadership from metastasizing if and when it does pop up, and that is how you get history’s worst and longest-lasting geopolitical disasters. I’m not guaranteeing the U.S. has the immune system to successfully fight off our currently spreading political and economic cancer, only time will tell.

“dark factories”

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The first time I heard “dark factories”, I pictured the orcs toiling underground at Isengard (that’s Lord of the Rings for any readers who are not the right type of nerd to know that). I also think of Philip K. Dick’s story Autofac, one of my all time favorites. But no, the idea is that factories are emerging in China that are so automated that the lights don’t need to be on most of the time, because no humans are present. Naked Capitalism has a ton of links describing this phenomenon in China. Apparently U.S. industrialists are touring these Chinese factories and are shocked at how advanced they are and how far behind they (i.e., western industry) are.

The fact that western industrialists are invited to tour these factories would suggest that the technology is not secret. So maybe we should not feel threatened but rather look for opportunities to partner and learn. No doubt, there are similar factories churning out military and security hardware that are secret.

Ray Kurzweil speaks

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In this Peter Diamandis podcast, Ray Kurzweil says he gets 5-10 interview requests every day, almost all of which he turns down. He took this one, and talked to a panel of tech bros for over an hour, which is pretty cool. I forget Ray sometimes – amid all the doom and gloom, he is a relentlessly and consistently positive voice over decades. And he has credibility as a sort of renaissance man and public purveyor of forecasts which have turned out to be pretty accurate. Here are a few things I remember him saying in the podcast (no transcript – come on, that is something AI can do easily right?)

  • robots that can do my dishes within two years!!! This may be the most exciting prediction ever.
  • He sticks to his prediction, made in 1999, that artificial general intelligence will be achieved in 2029. He acknowledges that there is a lot of debate about the definition of AGI and therefore there will be a lot of debate over whether it has arrived. But over time he has refined his own definition of it to be more precise and in fact, more stringent. First, he says his definition is that AGI will be able to match the abilities of the top human expert in every field. Second, he says that while a few people believe we have achieved AGI already (it’s January 2026 as I type), by 2029 there will be near consensus that it has arrived.
  • He predicts that 2032 will be the year humans achieve “longevity escape velocity”. In other words, life expectancy will increase by more than one year for each year we live. So in his view, we all just need to “hold on a few more years” and maybe death and aging will be become optional.
  • He predicts that sometime in the 2030s (not so precise on this one), we (most countries?) will have some form of universal basic income.
  • The arrival of AGI is not his definition of the singularity. He has refined his definition of the singularity to be that artificial intelligence is 1000 times smarter than (biological) human intelligence. He forecasts this for 2045. Again, he is relentlessly positive and sees humans tapping into this rather than being left behind.

I definitely think Kurzweil has credibility, and I have never felt that he has any political agenda. I read The Singularity is Near around 2012 or so, and I think it is a mind-blowing book absolutely everyone should read. (I haven’t read the sequel/update The Singularity is Nearer yet, so I don’t know if I would recommend that as a replacement or addition to the original.) Everyone should know this point of view is out there, backed by evidence and math, and give it some consideration. That said, if I were really 100% confident that Ray’s predictions are right, I would not go back to work on Monday morning. I would start drawing down my savings and enjoying life from now on, knowing that the age of scarcity will be over before my savings are gone. I could also abuse my body up to just short of the point of death, knowing that any damage I cause will be easily cured. I am way too risk averse to do any of these things, of course, nor do I recommend them to the reader. But maybe when the doom and gloom seems particularly thick around us these days, we can take some comfort in knowing that at least the possibility of a better future exists.

climate refugees

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This Common Dreams article goes into the existing legal framework governing refugees and how it could be extended to define and benefit climate refugees. For example:

  • The Refugee Convention of 1954 was set up in the wake of WWII and addresses “those who must leave their home countries due to war, violence, conflict, or any other kind of maltreatment”. So it doesn’t address environmental displacement or internal displacement, but it could be adapted to address these things.
  • The “1998 Guiding Principles on Internal Displacement” are what they sound like – they have not been formally adopted and are not legally binding. They could be developed into a treaty and/or countries could just adopt the principles as part of their own internal legal frameworks, hopefully also offering aid to neighbors experiencing hardship.
  • A “Global Compact for Migration” was adopted by the UN in 2018. It “promotes safe, orderly pathways for migrants, including planned relocation, visa options, and humanitarian shelter”. “Adopted” means the general assembly adopted it as another voluntary, legally non-binding set of principles. This also could be developed into a treaty and/or countries could incorporate the principles into their own internal legal frameworks.
  • The United Nations Framework Convention on Climate Change is an actual treaty ratified by many countries including the United States Congress. Trump has announced the US is withdrawing from the treaty – which I don’t understand. I naively thought that if Congress ratified a treaty (which is extremely rare nowadays when win-win agreements are viewed by our cynical politicians as a loss of sovereignty), the executive branch didn’t have the right to unilaterally withdraw.
  • “The Loss and Damage Fund was established in 2022 at COP27 to address the financial needs of communities severely impacted by climate change. The money would support rehabilitation, recovery, and human mobility.” It is underfunded of course.

I don’t want to be cynical, but the global political mood is just cynical at the moment. US politicians in particular are not in the mood to sign international agreements or even cooperate informally. So while I think it is good to pursue all of these ideas, I do not think it is a good idea to put all our eggs in this basket.

Climate crisis-fueled migration is already a driving force behind the rise of right-wing parties in the US and Europe, and this ugly feedback loop looks to just keep accelerating over time. As economic conditions in the destination countries deteriorate, the right-wingers are able to scapegoat migrants and that accelerates the feedback loop even more. The most rational way I can see to try to break the feedback loop is to address the environmental and economic conditions in the source countries. Aid and trade are the consensus center-left and center-right ways to do that. The right-wingers are probably aware of this, and so they sabotage both, which accelerates the feedback loop again. So they have no incentive to solve problems, because increasing problems fuel their agenda. Meanwhile more rational politicians can point to the rational solutions, but then when they can’t deliver them within a political cycle, real peoples’ real economic pain again accelerates the feedback loop. We could try to deliver the best economic performance possible as a strategy with some chance of success. Here, the current US administration is unpatriotically sabotaging the foundations of economic success such as R&D, education, and a strong central bank. Sorry for the doom and gloom as I am not seeing an easy way out of this political conundrum. Sit back and hope AI raises productivity in spite of our currently incompetent government and institutions?

Where are the Small Modular Reactors?

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Small modular nuclear reactors might be a key part of the solution to the climate crisis, or they might not. They seem to be near the end of the R&D stage (although doubtless they can and will continue to be improved) and at the very beginning of pilot testing/proof of concept. They are not yet economically competitive with other forms of power generation (including traditional large nuclear reactors), which you could say about pretty much any new technology. There is a chicken and egg problem where you have to implement it and scale it up for the unit price to come down, and it is hard to get the private sector (and public sector, if they are short-term financial return focused) to take the chance on implementation of something that might end up not working out. Of course, the idea is to invest in a portfolio of things that have some chance of working out, such that there is a high chance at least one of them will pay off. Anyway, some facts and figures in this Physicsworld article (isn’t that name slightly redundant?):

  • Nuclear power generated 17.5% of the world’s electricity in 1996, vs. only 9% today (2026 if you are a future historian reading this).
  • I somewhat naively thought US firms might be leaders in this technological knowledge (if not in implementation of anything at scale, where I would never be that naive). But it turns out that there are two of these reactors currently operating in the world, and they are in Russia. Two are being built in China.

Sure, there are mining, supply chain and waste problems, but in my view you have to balance them against the unfolding global ecological catastrophe caused by burning fossil fuels for two centuries and counting.

WEF Global Risks Outlook 2026

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I think of this thing as not so much a prediction but an indicator of what political and business leaders are thinking and talking to each other about. The results seem to be very sensitive to whether people are asked about a 1-, 2-, or 10-year horizon. So I don’t know that the rankings make a lot of difference. Rather, it makes sense to look at a “top 10” or so. Chillingly, more than half of poll respondents seem to think there is an “elevated” to “looming” risk of “GLOBAL CATASTROPHE” within the next 2-10 years. Within 2 years, they are most worried about “geoeconomic confrontation” while within 10 years they identify environmental disaster as the top 3 worries – “extreme weather events”, “biodiversity loss and ecosystem collapse”, and “critical change to earth systems”. “State-based armed conflict” (would it be simpler to just call this WAR?) is also up there somewhere near the top. “Inequality” doesn’t rank as high, but the analysts identify it as the risk that is most “interconnected” with the others.

How pathetic for our species and civilization that our leaders believe environmental disaster is looming a decade out, and yet they are starting wars with one another on our behalf in the present, when they know damn well they need to be cooperating to head off the environmental disaster that is going to affect all of us, the winners and losers of today’s useless wars alike. People don’t want war, so how are we putting people in leadership positions over us who are failing us so utterly?

https://www.weforum.org/publications/global-risks-report-2026/infographics-global-risks-report-2026/
https://www.weforum.org/publications/global-risks-report-2026/infographics-global-risks-report-2026/

what to eat, or you can take my cheese…WHEN YOU PRY IT FROM MY COLD DEAD HANDS!

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Harvard School of Public Health explains how the new U.S. government nutrition guidelines were developed without proper scientific oversight. The normal process is a transparent one where an expert panel reviews the latest evidence and submits a report with recommendations, supposedly without any bias or industry influence. (A cynic could probably look at these highly credentialed experts at leading universities and show that they receive research funding from industry and from government agencies being heavily lobbied by industry, because where else would they receive funding from? But they can at least channel any propaganda through some scientific and ethical guardrails you would hope.) USDA employees aren’t obligated to follow these recommendations to the letter, but they at least give them some weight and balance them against the economic and political factors. This time the panel submitted their report as usual, but USDA then cherry-picked a separate set of experts to produce a “supplemental report” without the transparency or adequate documentation. And the guidelines are then based on that. So they are not credible.

Even though the process was not credible, the consensus seems to be that the new guidelines are not really all that different. The main issues have to do with how they are being (badly) communicated, including an apparent emphasis on more saturated fat (which is not really what the technical guidelines say at all, but the concern is that very few people will drill into the technical guidelines). If I can try to clarify the saturated fat issue, it seems to be that a portion of the population that has no cholesterol issues may be able to increase saturated fat intake with no ill effects, but a portion of the population that has cholesterol issues will have more heart attacks and strokes and early death if they do so. Nutrition advice really should be more personal in an ideal world, but with public health guidelines, broad, simple, clear statements that benefit a majority of the public on balance seem to be the way to go. And replacing saturated fat with healthier plant-based fats and oils definitely seems to fall in this category. If people who are eating a lot of sugar and processed garbage were to replace it with meat, that might actually benefit them which may be what the guidelines are trying to say. Of course, they should be replacing it with fruits, vegetables, beans, nuts, seeds, whole grains, healthy fats and proteins. And I want to state that I support vegetarians and vegetarianism on ethical and environmental grounds. These considerations are missing entirely from the government’s concept of “nutrition”, and they should not be.

Another criticism I have always had of these guidelines is the use of weight, like eat so many grams of fat per day, or fat should be X% of your calories. Even those of us who might consider ourselves reasonably quantitative and logical think in volume or area, not weight. If you told me to aim for X tbsp of vegetable oil per day or Y slices of cheese, I could do that. Tell me Z grams or ounces, and I have no idea what to do, and then I am supposed to convert that to energy units (calories) and determine what percentage it is of my total calories for the day. But people don’t pay much attention to these guidelines anyway. They need to be getting this information from “trusted messengers” like teachers and doctors, and if these messengers had simple clear messages from the government that they themselves understood and trusted, they could just pass them along. Something like a point system that approximates the weights and calories involved could work.

I don’t think these guidelines have much short-term impact just because us laypeople don’t pay attention, and the professionals that could help us eat better don’t get clear communication materials out of these guidelines that they can work with.

But the longer-term damage here is the damage to the credibility of government health and medical advice. When I tell my kids “not to believe everything you hear and read on the internet”, I tell them to be aware of the source of the information. And one source I would have considered credible in the past is a major federal agency like USDA, CDC, etc. If major government, academic, and professional journalistic sources are telling you the same thing and it matches what that social media influencer or your friend are telling you, it’s still not 100% guaranteed to be true but you can start to have some confidence. But the credibility of federal agencies has really been significantly damaged by this administration and it may take a long time to recover, even if the past norms are ever put back into place.

my “top 10 U.S. political/geopolitical events of the 21st century”

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This Silver Bulletin post is called “The 51 biggest American political moments of the 21st century”. I liked it because it made me think. I found that the non-chronological nature of it threw me off a little bit. So I decided to come up with a “top 10 (U.S.) political/geopolitical moments of the 21st century” of my own. I picked some events off Nate Silver’s list, thought of a few extra of my own, and then put them in chronological order. Limiting it to 10 forced me to really think about what was most important, although like Nate I occasionally cheated by putting things together. I leaned towards events that were true “watershed moments” in the sense that they could have gone differently and the outcome for the U.S. and possibly the world might have been very different. I also leaned towards events where I remember where I was or what I was doing at the time, because I suspect those are important. I included 2000 as Nate did.

  • December 12, 2000: Bush v. Gore. I remember literally falling on my knees when CNN “called Florida for Gore” (the floor of my rental apartment in New Jersey was carpeted). Where would we be if this had gone differently? In general, you may see a theme below that I see Democrats as basically protectors of the pro-big-business, pro-low-profile-foreign-wars center-right consensus in the U.S. George W. Bush was on the right edge of this consensus, while Gore likely would have been on the left edge. I suspect 9/11 and the Afghanistan invasion would still have happened exactly as they did, but I don’t think the Iraq invasion would have happened. Who knows if other aspects of the 20-year “war on terror” would have unfolded as they did? We would have seen more action and progress on climate change and more standing up to fossil fuel industry propaganda for sure.
  • September 11, 2001. I was in my office building in Philadelphia. My mother called me on my desk phone (I didn’t yet have a cell phone) and told me what was happening. We turned on a small black and white TV with rabbit ears we had in our conference room at the time and watched the events unfold. The streets filled with panicky people and you couldn’t get on a train or highway for hours. There were rumors of additional planes in the air over Pennsylvania (which turned out to be true), but in the end nothing happened to us in Philadelphia directly. When I finally got back to my apartment in New Jersey, there were highway signs saying all roads to New York were closed.
  • March 20, 2003: Iraq invasion. A weird thing I remember is Dan Rather updates on the invasion during halftime of NCAA basketball tournament games. We aren’t used to mixing sports and serious news like that.
  • September 15, 2008: Lehman Brothers collapse. This is a stand-in for the larger financial crisis, surely one of the most important world events of my life time (I might pick the Berlin Wall as the single most important, but now we are going back to a previous century). The sub-prime mortgage derivative collapse might have been inevitable, but letting a major institution collapse was a key decision by the Bush administration that led to panic. It certainly played a large role in the Obama election. Obama understood that however distasteful, avoiding panic was the single most important thing he had to do, and he did it. I am an Obama fan, as I was a Bill Clinton fan and fan of the first 2-3 years of Joe Biden. He was just an effective keeper of the pro-big-business, pro-low-profile-foreign-wars center-right consensus. All these leaders pushed to accomplish the most incremental progress that was politically possible in their moments without blowing up the system.
  • January 21, 2010: Citizens United decision. No, I don’t remember where I was or what I was doing. I probably wasn’t even aware of this in real time. But this was crucial and the U.S. and maybe the world could be different without it. Maybe a marginally less corrupt election system would have delivered different results in 2016, and climate change and health care among other issues could be on a very different track.
  • October 28, 2016: the “Comey letter”. I picked this to represent the catastrophe of the 2016 election (which took place on November 8, 2016). The situation was on a knife edge, and without this “October surprise”, which turned out to be a complete hoax, maybe history would have unfolded differently.
  • November 4, 2016: Paris climate change accord takes effect. Obama really pushed and deserves a share of credit for getting this one done. It could still be in effect if Hillary Clinton or Bernie Sanders had won the 2016 election, OR if the U.S. Congress ever did its job of considering and ratifying treaties. Because none of these things happened, the U.S. never gained any momentum on climate action, and generations of our descendants are going to suffer as a result.
  • Friday, March 13, 2020: Covid shutdown. I picked this date because it is the date the Philadelphia public school system, where my son was in first grade at the time, insisted it would not shut down, and then announced late morning that it would shut down for two weeks, which turned into about a year. It was also the day my employer told me I wouldn’t be coming back to the office on Monday. I picked this date to represent the Covid-19 pandemic as a whole, but I could also have picked the date the first vaccinations were approved by the FDA, which was December 11, 2020.
  • November 30, 2022: Chat-GPT goes public. Not on Nate Silver’s list, but seems important no?
  • June 27, 2024: Biden-Trump debate. Of course, the real watershed moment was whenever Biden and his team decided he would run for re-election. Had he announced sometime in 2023 that he would be walking off gracefully into the sunset and allowing a real primary process to play out in 2024, maybe history and our present moment would be very different.

what’s new with learning curves?

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At least since reading some early Singularity-adjacent publications by Vernor Vinge, Ray Kurzweil, and Bill Joy, I’ve been interested in learning curves. (And for the record, the topic and these authors were were not considered politically “right wing” or even political at all at the time.) Progress, at least in certain technologies, tends to be exponential over time. This clearly applies to computer technology, where there are short product cycles, the needed infrastructure is more or less in place and/or can adapt as the technology is scaled/commercialized, and legal and institutional barriers to change are relatively low. Technologies with “recipes”, like chemicals, drugs, seeds and other agricultural technologies, might be other examples. For these we have the patent system to actually try to slow down scaling and commercialization to the pace of innovation. With energy technology, learning curves seem to play out over much longer periods of time because while available technology changes rapidly, our system tends to be locked into long-lived infrastructure that can only change slowly. So new energy technology rolls out slowly as it is scaled up and commercialized over decades. There are also entities with enormous political and propaganda power that fight tooth and nail to keep us locked into obsolete technologies and infrastructure that fit into their historical (and profitable) business models. Now when you get to other technologies, like transportation and housing, public policy, legal and institutional barriers are dominant and tend to retard or even prevent progress. Rollout is so hard that while there are pockets of innovation, many don’t see the light of day or don’t spread from the local/pilot scale, even if they are successful at this scale. These also vary by location and jurisdiction, so that progress is very uneven geographically. These are my thoughts anyway. As for what’s new, here’s a journal article from Advances in Applied Energy.

Variability of technology learning rates

Climate and energy policy analysts and researchers often forecast the cost of low-carbon energy technologies using Wright’s model of technological innovation. The learning rate, i.e., the percentage cost reduction per doubling of cumulative production, is assumed constant in this model. Here, we analyze the relationship between cost and scale of production for 87 technologies in the Performance Curve Database spanning multiple sectors. We find that stepwise changes in learning rates provide a better fit for 58 of these technologies and produce forecasts with equal or significantly lower errors compared to constant learning rates for 36 and 30 technologies, respectively. While costs generally decrease with increasing production, past learning rates are not good predictors of future learning rates. We show that these results affect technological change projections in the short and long term, focusing on three key mitigation technologies: solar photovoltaics, wind power, and lithium-ion batteries. We suggest that investment in early-stage technologies nearing cost-competitiveness, combined with techno-economic analysis and decision-making under uncertainty methods, can help mitigate the impact of uncertainty in projections of future technology cost.

This blog in Construction Physics has a deeper dive across more industries, and discusses at least one large data set that is available for analysis. If you could accurately predict learning rates (and successful scaling/commercialization rates) for specific technologies based on known factors, then theoretically you could fine-tune policies and incentives to increase the rate of progress in the technologies you want. So this is an area of research that could boost all other areas of research and progress.

evidence for the return on (U.S.) government non-defense R&D

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This 2024 report from the Dallas Fed provides very clear evidence of the positive returns from past U.S. government research and development funding.

Total factor productivity is a noisy but generally accepted measure of the amount of GDP/productivity growth that is due to innovation rather than increases in inputs. Summary: The return CAUSED BY non-defense R&D spending is 140-210% over 8-12 years, which is higher than investments in infrastructure (which still provide a positive return) and defense R&D (NO CAUSAL EFFECT IDENTIFIED).

Since it’s noisy, maybe I would smooth it in the graph above, but nonetheless there is a very clear relationship between falling R&D spending and falling economic growth. Conversely, if you wanted to intentionally reduce growth and innovation in our economy, a good way to do that would be to reduce R&D spending. Another implication is that if R&D spending on weapons and war does NOT provide as great benefits, there is an opportunity cost to spending your R&D money on weapons and war rather than peaceful or at least dual-use technologies. So it’s pretty clear the actions of the current US administration (drastically cutting R&D spending and shifting it from civilian to military applications) do not match their stated intentions to boost economic growth.