Back in 2022, the United States was showing surprising signs of strength, after a lot of people (myself included) had lamented its seeming decline. Seemingly against all odds, the Russian invasion of Ukraine had been partially halted and rolled back, with U.S. military aid providing a crucial and timely lifeline (U.S. intelligence also managed to correctly predict the invasion well in advance). The U.S. had come out of the pandemic looking a lot more competent than people had initially thought, with a generous and effective financial relief program and a world-beating vaccine development effort that the Chinese were unable to match. Inflation was high, but the U.S. labor market recovered quickly from the pandemic (and the following year, inflation began to fall as well). ISIS was a memory, defeated at low cost by U.S. intervention. Meanwhile, the transatlantic alliance was stronger than ever, and China’s economy was in the dumps after a real estate bust.
Once again, America seemed to have beaten the odds and resisted decline. Then two years later, in a spasm of anger over immigration and inflation and woke culture, Americans ignored this amazing run of success, threw out the Democrats, and brought back Donald J. Trump.
As of 2025, I’m feeling distinctly less optimistic than I was in 2022.
A lot of investors seem to have been convinced — rightly or wrongly — that Trump’s tariffs are almost all talk and bluster, and that when push comes to shove he’ll back down before real harm occurs.
And Trump’s approval rating, while still a lot lower than when he took office, has rebounded a bit from its nadir:
OK, now for the bad news. Trump’s latest tariff pause is only a partial and temporary remedy for an economic problem he himself created out of thin air. It’s temporary because in 90 days we’ll be right back where we were before, and Trump will have to choose between pressing ahead with tariffs or doing another walkback. It’s partial because even after this walkback, U.S. tariffs are still higher than they’ve been in living memory:
But in fact there’s more bad news. Trump’s seemingly never-ending series of rapid-fire tariff policy changes — by one recent count, there have been over 50 now — is still creating uncertainty. Trade policy uncertainty has gone up and down, but is still far higher than at normal times:
But beyond simple uncertainty, Trump’s willingness to announce big tariffs and then concede on them without major concessions from trading partners makes both him and the United States as a whole seem deeply unserious — an object of international ridicule. Here’s the WSJ on China’s reaction:
On Chinese social media, opinion leaders portrayed the tariff truce as a resounding victory for Xi…“China fought a very beautiful ‘counterattack in self-defense,’” said Ren Yi, a commentator who goes by the pen name “Chairman Rabbit,” in an online post. Beijing showed the world that Trump is irrational and America is a paper tiger, while China offers stability and certainty, he wrote…Xi has made a show of defying U.S. pressure and leaned into his self-styled image as a staunch steward of Chinese sovereignty.
Here in the U.S., Trump’s faithful react with adulation and praise to every daily reversal and walkback. But internationally, Trump just looks erratic and weak. Obviously, it was better for Trump to back down than to stay the course. But the fact that he made threats he couldn’t back up in the first place leaves America looking like a deeply unserious country; Trump’s move is being widely mocked throughout China.
And in fact, this is far from the only arena in which America is looking less like a colossus and more like a clown show these days. Other examples include:
America’s continued military and industrial weakness
Trump’s $400 million gift from Qatar and other likely cases of corruption
The U.S. government’s turn against vaccines
Chaos at the FAA
The pointless destruction of U.S. scientific and technical capacity
The pointless degradation of the transatlantic alliance
Incompetence at the Defense Department
Unfortunately, this meme pretty much sums up how U.S. tariff policy looks to the rest of the world:
In recent years, I’ve read a bunch of people talk about a stagnation in American pop culture. I doubt that this sort of complaint is particularly new. For decades in the mid-20th century, Dwight Macdonald railed against mass culture, which he viewed as polluting and absorbing high culture. In 1980, Pauline Kael wrote an op-ed in the New Yorker entitled “Why Are Movies So Bad? or, The Numbers”, where she argued that the capitalistic incentives of movie studios were causing them to turn out derivative slop.1
So if I try to answer the question “Why has American pop culture stagnated?”, there’s always the danger that I’ll be coming up with an explanation for a problem that doesn’t actually exist — that this is just one of those things that someone is always saying, much like “Kids these days don’t respect their parents anymore” and “Scientists have discovered everything there is to discover.” To make matters worse, there’s no objective definition of cultural stagnation in the first place; it’s a fun topic precisely because what feels new and interesting is purely a matter of opinion.
With that said, I do think there’s some evidence that many forms of U.S. pop culture — music, movies, video games, books — are stagnating, at least as far as mass consumption is concerned. For example, back in 2022, Adam Mastroianni had a good post where he showed that an increasing percent of what Americans consume comes from franchises, sequels, remakes, and established creators. Here’s his chart for movies:
For what it’s worth, most Americans share this sense of declinism when it comes to movies, music, and TV, telling pollsters that these things peaked somewhere between the 1970s and the 2000s. Maybe this is because most of the poll respondents are middle-aged people nostalgic for their youth. But as Gioia points out, young people are listening to music from their parents’ generation nowadays; that’s not simple nostalgia.
Personally speaking, I’ve felt this stagnation in a number of areas. Movies, for example, don’t feel nearly as interesting or as vital of an art form as they did when I was younger, despite the fact that you can now shoot an indie film on your phone. A decent amount of good music is coming out, but a lot of the best stuff feels like refinement of what came before.
To name just one small example, young people have once again become fans of shoegaze, a micro-genre of dreamy, layered rock music that I enjoyed back when I was young in the 2000s. I love this revival. Here are two examples of recent shoegaze songs that I thought were absolutely excellent:
To be honest, I like these songs just as much as my old favorites by My Bloody Valentine, Tokyo Shoegazer, Oeil, etc. But they’re recognizably the same thing. I guess maybe it’s natural for a middle-aged guy like me to be a fan of things that sound like the music he loved in his youth, but what’s really striking is that the kids are into this too.
And nostalgia can’t explain why TV seems to me like it’s been in a golden age over the past decade. I loved Star Trek: Deep Space Nine and Seinfeld when I was a kid, but there was just nothing like Game of Thrones, or Andor, or One Piece. The Karate Kid movies were great2, but they don’t compare to the TV show Cobra Kai. Even in middle age, I’m perfectly capable of recognizing novelty and improvement in pop culture. It’s just that most types of pop culture don’t seem like they’re innovating and pushing the boundaries like TV is.
So anyway, let’s assume for the moment that the pop culture stagnation is real, at least across many domains. Why would that be happening?
Technology moves first
A lot of people who write about culture seem to see it as something autonomous — either a grassroots upwelling that just sort of comes about on its own, or something imposed top-down from the people in power. The implication of this tacit assumption is that if a bunch of bloggers and critics and tastemakers get together and yell enough, culture will simply change. Perhaps if we call modern American pop culture “stagnant” enough, artists will be shamed into making something new.
I just have trouble seeing the world like that. My instinct is always to trace changes in culture to changes in economics — and, ultimately, to changes in technology. Technology maps out the space of the possible — together with nature itself, technology sets the boundaries for what human beings can do. That possibility space is then filled by human initiative and institutions, until they bump up against the walls.
Despite his famous line that “The culture always changes first,” Ted Gioia basically believes that the root of cultural stagnation is technological. He thinks the advent of the smartphone and scrolling social media feeds has made it hard for young people to pay attention to anything except the next quick dopamine hit, thus destroying the audience for longer, more sophisticated works of art. He writes:
Twenty years ago, the culture was flat. Today it’s flattened…I still participate in many web platforms…But now they feel constraining…Instead of connecting with people all over the world, I now get “streaming content” 24/7…Facebook no longer wants me stay in touch with friends overseas, or former classmates, or distant relatives. Instead it serves up memes and stupid short videos…And they are the exact same memes and videos playing non-stop on TikTok—and Instagram, Twitter, Threads, Bluesky, YouTube shorts, etc…“Are we all beginning to have the same taste?” asks critic Rebecca Nicholson—complaining about her inescapable sense of repetition and sameness pervading music, TV shows, films, and everything else.
Like most people, he blames specific bad guys — the social media companies that serve people their soulless algorithmic feeds. But those folks are just trying to make money, and doing what the market incentives tell them to do; if they didn’t, someone else would, and the end result would be the same.
Once it becomes possible for everyone to have an internet-connected supercomputer in their pocket, everyone will. Once it becomes possible to smoothly and seamlessly deliver infinite feeds of short-form video content to everyone’s phone, someone will do that too. And if people keep tapping and swiping on it, that’s what they’ll get served.3 In the absence of laws or other forms of government power to stop the market from working, the market will give people what they demand.
Only within the constrained space of that market demand do artists and creators have choices about what to make — at least, not if they want to make a living doing their art, or get their art in front of a large number of eyeballs. Sure, plenty of people make art as a hobby, out of pure passion. There are plenty of people out there still composing symphonies even as their peers hum the latest TikTok jingle. But the twin desires for money and popularity are strong for most artists, and that means that their output will be constrained by the market — which in turn will be determined by the intersection of preferences and technology.
But technology doesn’t only determine what consumers demand; it also determines what kinds of creations artists are able to supply.
The low-hanging fruit
When I was a kid, there was a popular genre of music called “alternative rock”. The melody of this type of music would often consist of a sequence of distorted power chords. Examples include “Shine” by Collective Soul, “Freak” by Silverchair, “Machinehead” by Bush, “All Over You” by Live, and so on.
It’s a nice sound, but it’s pretty limited in terms of what you can do with it — there are only so many short sequences of power chords you can construct. And during the mid to late 1990s, when every suburban boy in the country thought he was going to make it big as an alternative rock star, there were probably hundreds of thousands or even millions of guitar-playing youths sitting in their garages or their bedrooms finding every possible sequence. It was a swarm intelligence doing a brute-force grid-search algorithm over a fairly low-dimensional space.
I don’t think the 1990s kids found every possible alt-rock song. There were still some great new ones left to be written. Here’s “Chokecherry” by PONY, released in 2021:
But by and large, the alt-rockers successfully mined out all the low-hanging fruit of their micro-genre. There just wasn’t much left to do in that vein, and so the canon of alt-rock is now just mostly complete.
The alt-rock example illustrates how a particular entertainment format has a finite amount of low-hanging fruit that eventually runs out. In principle, the same should be true of much broader categories of entertainment — like melodic music itself.
The number of melodies that it’s possible to write is very large, but finite. In 2020, two programmers algorithmically generated every possible MIDI tune and published them for free, hoping to head off IP lawsuits about melodic plagiarism. Of course, that set of melodies is so large that in practice, it’ll be impossible for humans to record and release songs based on all of them.
But in practice, the number of melodies that tugs at human heartstrings is probably far fewer. These days when I search for new rock songs on Spotify and YouTube, most of what I find sounds like tuneless slop; the sequences of notes are technically a melody by some simple mathematical definition, but they don’t sound like anything to me.
And the more of the good melodies we find, the more similar the new melodies will sound to something that already exists. The Flaming Lips’ “Turn It On” has a different melody from Hootie and the Blowfish’s “Let Her Cry”, but it’s similar enough that if you try to hum one, you might accidentally find yourself humming the other. Kurt Cobain thought “Smells Like Teen Spirit” sounded like the Pixies song “Gouge Away”. Long before we exhaust all the melodic possibilities, we find enough of them where the distance from any new melody to the nearest old melody starts to shrink, making novelty feel more and more incremental.
The more constraining an entertainment format is — i.e., the smaller the space that artists have to search for novelty — the quicker the innovations stop feeling novel. For alternative rock, the space was very small. For melodic music, it’s bigger. For music as a whole, it’s far bigger — there are many musical elements that you can add to melodies in order to make the whole arrangement sound new, and some songs have no melody at all.
But even for music as a whole, there are probably a finite number of things you can do. There are probably a number of ways you can make music that conveys a sense of dreamy, ethereal longing, but not an infinite number of ways — and so when you try to evoke those emotions, you’re reasonably likely to end up with something that sounds a bit like shoegaze.
I wonder if this is why movies have become more repetitive than television. As Adam Mastroianni’s graph shows, movies took only about 20 years to go from 25% remakes and sequels to over 80%. But television’s novelty has decreased at a much slower rate:
Movies are simply much shorter than TV series. This constrains them pretty severely in terms of plot and characterization. When we talk about why Americans have been moving from the big screen to the small screen, we usually talk about the increasing quality of TVs. But it’s also possible that movies themselves may have exhausted a large fraction of their available novelty, while longer-format TV series are still going strong.4 This also might be why TV seemed like it was in a golden age in the 2010s, even as films’ creativity flagged.
The solution to this, of course, is to explore new artistic forms. If movies are getting stale, see what you can do with TV. If rock music is getting stale, see what you can do with electronica.
Some optimists argue that American pop culture isn’t stagnating at all — it’s just shifting to new and different forms. In a post last year, Katherine Dee argued that old formats like books, music, and movies have simply become less important, as cultural output has shifted to new formats:
[T]here’s a new culture all around us…We just don’t register it as “culture.”…We’re witnessing the rise of new forms of cultural expression. If these new forms aren’t dismissed by critics, it’s because most of them don’t even register as relevant…The social media personality is one example of a new form….not quite performance art, but something like it…The same is true of TikTok…[T]here is a lot of innovation on TikTok — particularly with comedy…Creating mood boards on Pinterest or curating aesthetics on TikTok are evolving art forms, too. Constructing an atmosphere, or “vibe,” through images and sounds, is itself a form of storytelling, one that’s been woefully misunderstood…They’re a type of immersive art that we don’t yet have the language to fully describe.
The great media of the 20th century—the art-pop album, the feature-length film, the gallery show, the literary novel—may be fighting for their life, but that’s because of competition from new forms defined by a sense of immediacy: short-form video, chatty podcasts, video games, memes. Like the old media, these forms foster tons of mediocrity. But they also invite surprising excellence[.]
If you look at the history of pop culture, novelty has always been driven by changes in technology. Rock music was able to exist only after the amplifier and the pickup microphone were invented. Electronic dance music was only able to exist after synthesizers, mixers, and samplers were created. Movies and TV required cameras and a host of other technologies. Even books were very hard to make before the printing press.
And yet in the realm of technology too, we may eventually see stagnation. Innovation is getting more expensive, and the pool of potential researchers is set to shrink. Perhaps AI can save us and revive both technological progress and cultural novelty, but that remains to be seen.
Where did the avant-garde go?
Existing alongside the criticism that American pop culture has become repetitive, there’s also the subtly different allegation that it has become less artistic — that the avant-garde has disappeared, replaced by shallow consumerist masscult. One of the chief proponents of this idea is my friend David Marx. In a response to Katherine Dee’s post about new cultural forms, he wrote:
TikTok/Reels skits just feel like the glossy, expertly-edited versions of the inside jokes that kids make at summer camp talent shows…Most of the creators…are non-art minded amateurs working in templated formats…“[D]igital vaudeville” says it all — it's just not an "inventive creative practice that expands what is possible with art."
And in a response to Spencer Kornhaber’s long piece in The Atlantic, Marx wrote:
The only way to define "progress" in culture is to draw clear lines between entertainment and art, something that has become extremely unpopular…A new critical consensus [in the 2000s and 2010s] demanded that we stop thinking about creativity in a hierarchical way: there was no "high" culture and "low" culture — just culture…This ideology has become known as "poptimism"…
Poptimism…made mass culture the center of the cultural conversation, which was bound to disappoint us. And, second, poptimist criticism provided a false promise that "creativity" can happen anywhere, ignoring the fact that some creative endeavors and formats are much more conducive to the kind of cultural invention that provides lasting works of art…
The poptimist generation of critics in the 21st century rejected [the] separation of high and low art. They argued that there was no meaningful difference between Mariah Carey and Kurt Cobain…Not every creative endeavor provides the same degree of originality or formalistic mastery. A child's finger-painting is not equivalent to a Rothko. A work only verges towards art in challenging or playing with the existing conventions to create new aesthetic effects. Entertainment…just needs to provide enough stimulus to momentarily keep an audience's attention, and it can usually achieve this by tapping well-tested conventional formulas.
[A]udiences are not so easily fooled…They know when a song is just a jam and not a radical piece of transformative art.
Marx differentiates “art” and “entertainment” based not on their quality, but on the intent of their creators. “Art” is when creators try to push the boundaries of creative expression with new forms and new ideas; “Entertainment” is when creators just want to please the masses. When creators stop trying to make art and just make entertainment, you get a decrease in novelty, because people aren’t trying as hard to push the boundaries — there is no avant-garde.
That’s a reasonable definition, and a reasonable hypothesis. I don’t think things are nearly quite so cut-and-dried — plenty of entertainers work very hard and very creatively to find new lucrative ways to entertain the masses. I highly recommend the book The Making of Star Wars as a window into just how much effort and inventiveness went into the 1977 movie.5 But OK, I do accept that if you have fewer people intentionally trying to create novelty for novelty’s sake, you will probably end up with less novelty.
The question is why creators have moved from art to entertainment. Marx thinks of culture as something autonomous, so he blames the malign influence of “poptimism” for telling people that entertainment and art are the same. But I naturally tend to look for technological explanations.
When I think about the avant-garde, I think about artists making art for other artists. If you make a painting that’s just a bunch of colored squares or splashes of paint on a canvas, an average person might not be able to tell your art from the efforts of a small child. But other artists will know that you’re trying to subvert the paradigm they’ve been working in — to make a statement about what art is. That’s the kind of thing that only one’s artistic peers understand.
Some artists will always want to make things for other artists to see and react to and judge. But I think that in the old days, many did it out of technological necessity.
Discovering good artists in the old days was a very difficult endeavor. Production companies and publishers had to spend a lot of effort scouting around, and then make a guess as to how a creator’s work would perform in the commercial sphere. An easy way to separate the wheat from the chaff was to basically use a peer review system — to use a creator’s standing in the artistic community as a proxy for whether they would sell to a more general audience.
And so many artists tried to impress other artists because they had to — because other artists were always the first gatekeeper of their work. Standing within the artistic community was what got you discovered. When George Lucas pitched a Flash Gordon movie to Fox, the studio told him that it had to be directed by Federico Fellini — a guy they knew as a top arthouse director. (This was impossible, of course, so Lucas made Star Wars instead.)
Fast-forward to the 2020s, and the artistic community has been largely disintermediated. If you want to be a successful commercial creator, the way to get started now is not first to struggle to prove yourself in the closed and cosseted artistic community — it’s to simply throw your work up online and see if it goes viral. If it does, you’re in.
This means that any creator whose goal is to sell out can do so without spending years making art that impresses artists. Of course, some creators still just intrinsically want to impress other artists. But if the money-motivated creators have left the community, there are just fewer people in that community left to impress. It becomes more and more niche and hipster. And there are fewer crossovers from the art world to mass culture, because the people left in the art world are the ones who don’t really care if they get famous and rich.
So if this hypothesis is true, and if you wanted to bring back the avant-garde, how would you do it? One idea would be to follow the university model — to create fairly closed-off spaces where artists live in material equality with lots of public goods. The high baseline standard of living would reduce artists’ need to get rich. And the close proximity of so many artists would make them try to produce novel art in order to impress each other — just like in academia, professors try to impress each other with their research.
I doubt any new institution like this is in the offing; the university model itself is in trouble, and I don’t think the government is going to be willing to fund art schools just so the professors can make cool art.
But that’s the basic principle — if you want more novelty, I think you’ve got to make the artists work for each other more. How you do that, in a world where technology has made artists irrelevant as gatekeepers, is not something I have a concrete answer for. We may simply be in for a long period of artistic stagnation in America.
To sum up, I sort of believe that cultural stagnation is real, but I also think the root of the problem is probably technological — and therefore very hard to expunge.
I had AI (ChatGPT o3) find these examples for me, in case you’re wondering how I’ve incorporated AI into my writing process. I did have to check them thoroughly to make sure I wasn’t mischaracterizing them, as the AI also listed a whole bunch of examples that didn’t say what it claimed they said.
Note that when we talk about the toxic effects of social media, we usually talk about network effects that keep users trapped in an ecosystem because everyone else they want to interact with is trapped in there with them. TikTok and other algorithmic feeds just aren’t that. There’s very little interaction between the users. If I show you a video from Instagram Shorts, you’ll be just as entertained as if it had come from TikTok; there’s really no switching cost involved. Algorithmic feeds are really push media — a form of television. They may be addictive, but they probably aren’t network traps.
The theme of this week’s roundup is the fall of capitalism. With Trump going for price controls and tariffs, and anticorporate progressives savagely attacking Ezra Klein for wanting to build more houses, the political constituency for capitalism seems moribund for now. Meanwhile, Warren Buffett is retiring, hiring in the tech sector also seems dead, and the UK seems to have embraced degrowth. What’s a capitalist to do in times like these?
But first, an episode of Econ 102, about (what else?) tariffs:
Anyway, on to the list:
1. How did Warren Buffett invest so well?
An investing legend has passed into history. Warren Buffett, the chairman and CEO of Berkshire Hathaway, announced that he will step down at the end of this year — at the age of 95. Over the decades, Berkshire — the vehicle through which Buffett made his investments — has beaten the stock market spectacularly:
If you invested a thousand dollars in the S&P 500 back in 1964, you’d now have several million dollars. If you invested it in Buffett’s company instead, you’d now have over a billion dollars.
And in terms of his Sharpe ratio — the measure of his excess returns relative to the amount of risk he took — Buffett stands alone above all other mutual funds:
Buffett thus did something that finance theory says no investor should be able to do: He beat the market, consistently, by huge amounts. What’s more, his market-beating returns compounded — unlike most top investment funds, which will make you withdraw some of your money every year instead of reinvesting it into the fund, Buffett simply kept turning all of Berkshire stockholders’ money into more money at stupendous rates.
Well…almost. Buffett beat the market by a lot more in his early decades:
The simple explanation is that when Berkshire got big enough, it became harder and harder to keep finding as many mouth-watering overlooked investment opportunities for that growing pile of cash. Buffett’s returns took a heck of a long time to attenuate, but attenuate they did.
Another big question is how much of Buffett’s performance could be attributed to systematic approaches that any investor can copy, and how much was due to some ineffable individual talent. Books have been written about the “Warren Buffett Way”, but can regular people really be their own Buffett?
Frazzini et al. (2018) say yes, they can. They find that Buffett’s entire outperformance against the broader market can be explain by two systematic factors that they call “betting against beta” (BMJ) and “quality minus junk” (QMJ):
A loading on the BAB factor reflects a tendency to buy safe (i.e., low-beta) stocks while shying away from risky (i.e., high-beta) stocks. Similarly, a loading on the QMJ factor reflects a tendency to buy high-quality companies—that is, companies that are profitable, growing, and safe and have high payout…
Buffett likes to buy safe, high-quality stocks. Controlling for these factors drives the alpha of Berkshire’s public stock portfolio down to a statistically insignificant annualized 0.3%. That is, these factors almost completely explain the performance of Buffett’s public portfolio. Hence, a significant part of the secret behind Buffett’s success is the strategy of buying safe, high-quality, value stocks…Our statistical finding is consistent with Buffett’s own words from the Berkshire Hathaway 2008 Annual Report: “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
But I’m not so sure the story ends there. In finance theory, factors that explain returns are supposed to be risk factors — in an efficient market, the excess expected returns in the long run are supposed to compensate you for the risk you take in the short run. “Betting against beta” doesn’t sound like a risk factor, because beta (correlation with the overall market) is itself a risk factor — instead, it sounds like a market inefficiency, where investors take on too much beta for too little gain. Similarly, it’s hard to imagine why “quality” stocks — companies that are profitable and growing — would be systematically riskier than other stocks.
A likelier explanation is that in the 1960s, 1970s, and 1980s, the U.S. stock market was just somewhat inefficient — investors were just making a bunch of dumb bets. And Buffett, with his trademark approach of cool rationality and hunting for bargains outside the major stock indices, was one of the first investors to realize just how many mistakes the average investor was making — and to bet a huge amount of money on that realization. Eventually, as more investors learned to be cool and rational like Buffett, his advantage over the market decreased.
If that’s the case, then as Jason Zwieg writes, there will never be another Warren Buffett. His basic approaches are probably still sound, but they will never again produce such stellar outperformance. Buffett defined an age that is now over.
Whether Trump has the legal ability to do this is an open question; it could just be a populist move that gets blocked by the courts in a month or two.
Even if the move does go through, it’s more likely to just raise prices in poor countries than to reduce them in America. If Trump mandates that drugmakers have to charge the same price in America that they do in poor countries, they’ll probably just mostly raise prices in the poor countries instead of lowering them in America:
So even if it goes through, the policy is probably going to fail in its goal of making drugs cheaper for regular Americans.
Of course, if drugmakers were forced to lower their U.S. prices by a huge amount, it would certainly help a lot of people in the short term. In the long term, however, it would probably lower medical innovation, by reducing the incentive to do long, arduous, expensive pharma research. A larger literature shows that the more revenue pharma companies make, the more they spend on research. Limiting these companies’ market size by limiting the prices they can charge will result in less research spending, and ultimately fewer new medicines and treatments.
Ji and Rogers (2025) find what looks like a recent example of this actually happening:
We investigate the effects of substantial Medicare price reductions in the medical device industry, which amounted to a 61% decrease over 10 years for certain device types. Analyzing over 20 years of administrative and proprietary data, we find these price cuts led to a 29% decline in new product introductions and an 80% decrease in patent filings, indicating significant reductions in innovation activity. Manufacturers reduced market entry and relied more heavily on outsourcing to other producers, which was associated with higher rates of product defects. Our calculations suggest the value of lost innovation may fully offset the direct cost savings from the price cuts. We propose that better-targeted pricing reforms could mitigate these negative effects. These findings underscore the need to balance cost containment with incentives for innovation and quality in policy design.
Some biotech entrepreneurs are already worried that this could hurt their businesses:
The biotech folks shouldn’t be too worried. As Abaluck shows, the likeliest result of Trump’s policy, even if goes through (which seems unlikely), is for Americans to be mostly unaffected while people in poor countries suffer.
But the precedent of Trump calling for price controls — another idea he cribbed from the left — shows that we’re sliding ever farther away from free-market capitalism, and toward a sort of boneheaded Maoism where economic central planning is done by a few very foolish old men whose ideas about economics all came from watching CNN in 1992.
3. More bad critiques of Abundance
When Ezra Klein and Derek Thompson published Abundance, a number of progressives rushed to attack it. Initially, most of the critics on the left argued that the authors had given insufficient attention to corporate power and the need for a movement against monopolies.
In a recent discussion, Klein pressed two of his progressive critics — Zephyr Teachout and Saikat Chakrabarti — to tell him what concrete problems they think an antimonopoly movement would solve. Again and again, Teachout’s answer is “power”:
It’s a democracy vision…I think for 40 years…we basically stopped asking the power question…[B]oth Republicans and Democrats got on board with…this idea that we should just focus on outputs and not on power. So that’s part of the reason you hear some resistance from the antimonopolists to your [abundance] vision.
Here we see the fundamentally different goals of abundance liberalism and anticorporate progressivism. Abundance liberals care about what stuff people get, while anticorporate progressives care about who holds power in society. The progressives have trouble explaining exactly how changing the distribution of power would lead to better material outcomes for the masses, but that doesn’t phase them much; to them, reducing corporate power is an end in and of itself.
As I’ve noted before, this ideas smacks of class resentment — a professional class that cares more about dunking on the entrepreneurial class than about helping the working class. That’s why critics of Abundance, like Aaron Regunburg, tend to focus so strongly on accusations that abundance liberalism is being secretly supported by class enemies:
Our concern is that corporate-aligned interests are using abundance to head off the Democratic Party’s long-delayed and desperately needed return to economic populism…[W]ho are the villains we should be naming? A growing number of Democrats are coalescing around a simple answer to that question: oligarchy…[M]any Democratic elites still oppose any attempts to identify billionaires and corporations as villains…[T]hey are terrified of the prospect of a populist takeover of a party…that has for decades served as a comfortable partner to oligarchy…
Groups like Third Way, which are largely funded by billionaires and corporations, have been major boosters of the abundance framework, as have other key pillars of US oligarchy, including crypto, Big Tech, and Big Oil. These interests have a clear vested interest in derailing the growing Democratic turn toward economic populism. And they have found in abundance advocates—like Abundance coauthor Derek Thompson, who recently argued that oligarchy “does a terrible job of describing today’s problems”—a valuable tool for redirecting the anti-establishment rage building within the Democratic base away from themselves[.]
This also probably explains why critics who claim to address the substance of Klein and Thompson’s arguments often seem not to have actually read Abundance at all. For example, the progressive economist Isabella Weber claims that Klein and Thompson call for deregulation but ignore the importance of state capacity in getting big things done. In fact, Klein and Thompson spend most of their book arguing in favor of increased state capacity, and bemoaning how progressives have focused their energies on shackling the power of big government. The most likely explanation for this mischaracterization is that Weber simply assumes that abundance liberals are allied with her class enemies, and thus must be simple small-government libertarians.
These critiques will find some purchase among progressives, including among the all-important Democratic staffer class (who I’ve now started to think of as the main audience for most of these factional food fights). But the critiques are fundamentally bankrupt. Companies, including large ones, have a crucial and indispensable role in providing the material living standards that make life in a developed country so good. There are no rich countries without big corporations. Of course if they capture the government it can cause big problems, but America’s progressives seem to think that the simple fact that corporations are large and profitable means that government has been captured. This is wrong, but class resentment makes it a compelling idea.
4. The continuing tech job bust
One of the most overlooked economic stories in America is the multi-year bust in tech hiring. In 2022, tech stocks crashed, but then eventually recovered. But the wave of layoffs that accompanied that crash never reversed — or at least, it hasn’t yet. It’s a brutal job market for tech workers out there:
Last year, I argued that this was because the internet has been mostly completed, leaving much less work for software folks to do:
Of course, AI has replaced internet software as the Next Big Thing — the locus of hype, VC investment, and engineer excitement. But it’s not clear just how many humans are going to be needed to build the AI future:
This chart seems like it probably should have included OpenAI, Anthropic, and xAI. Their total employment is a bit less than 10,000, and most of those folks have been hired in the last three years, so including them will moderate this picture a bit. Still, there’s no gigantic AI hiring boom to match the giant software hiring boom of the 2010s. No one talks about OpenAI as an omnipresent reliable cushy gig that a smart person can always go get a job at if their startup doesn’t work out, the way they talked about Google in 2018.
One possibility is that AI is already coming for software engineers’ jobs.1 AI basically does for software production what machine tools did for hardware production. If overall demand for software rises as a result of AI, then we’ll see an employment boom and a wage boom, but if demand remains constant and production gets automated, the industry will simply need fewer engineers.
In any case, I wonder if this protracted quiet tech bust is a significant factor in the emergence of the Tech Right. With the boom times over, and AI threatening disruption without making it clear where profits will be made, the software industry has gone from a gold rush to a defensive crouch. That might have scared some tech people in to thinking that only Trumpian deregulation, crypto-pumping, and special favors might be able to restore their wealth to its upward growth path.
5. Why British productivity stagnated
Why is the British economy so stagnant? The Resolution Foundation’s Simon Pittaway has an interesting new report that tries to answer that question. (Here’s a thread where he explains the report’s main findings.)
Pittaway shows how the U.S. has led the pack in terms of productivity, while the UK is falling behind:
Pittaway finds a number of problems that are probably holding back UK productivity, but his three main culprits are health, energy, and information technology.
The UK’s health industry has been dragging the country’s productivity down like no other:
Of course, productivity in the health sector is notoriously hard to measure, because the market is so un-market-like — value-added depends on how much people pay for health care, rather than how much actual value they’re getting. But including alternative estimates of health care productivity changes the overall picture very little.
It may be that the UK’s National Health Service is becoming less efficient.
Anyway, Pittaway then notes that the U.S. has a lot more fossil fuel resources than the UK. This not only adds a big important industry to the U.S. roster, it lowers energy costs for American companies:
(As a side note, the fact that France’s energy costs have gone up as much as the UK’s, despite France mostly running on nuclear power, should serve as a wake-up call for people who think nuclear power can solve the UK’s problems.)
As for IT, Pittaway notes that U.S. companies purchase a lot more software than British companies do, for reasons that aren’t quite clear. To all this, add things like low business dynamism, disinvestment from Brexit, and so on. The problem of low British productivity is overdetermined — the country is just getting a lot of things wrong.
Although Pittaway is diplomatic in not pointing this out, a lot of these mistakes are probably politically driven. Brexit certainly was. The progressive antipathy toward fossil fuels, though rooted in very real concern over climate change, is probably overdone. And of course the NHS is probably shielded from reforms by politics. The UK, like the U.S., has fallen into a political equilibrium where popular ideologies push the country toward degrowth, and regular people just have to deal with it.
Correction: A previous version of the intro to this post stated that Warren Buffett is dead. He is not.
Derek Thompson argues that AI is already coming for the jobs of new college grads, noting that recent grads now have an unusually high unemployment rate:
I have to say I’m not convinced. AI wasn’t writing code in 2013-15, when the biggest rise in new grad unemployment occurred. A more likely story is that this chart reflects elite overproduction, though I suppose AI might have added a bit of fuel to the fire in the most recent year or two.
The big news of the last couple of days is that India and Pakistan are at war. A terror attack by a (possibly) Pakistan-sponsored group drew Indian airstrikes in response. But unlike in 2019 when something very similar happened, the two countries didn’t immediately cool things down. Instead, there has been an increasing cycle of escalation, with airstrikes, missile strikes, shelling, aerial dogfights, and so on. A lot of people are still calling it a “standoff”, but by now it’s pretty obvious that it’s a war; no one is actually standing off.
This post isn’t about the blow-by-blow of the conflict — if you want, you can follow the list that I made on X.1 Instead, I want to make a more general observation: We are slipping further and further toward a world of war.
It’s a popular trope to say that war is always with us, but that’s true only in the vaguest, least informative sense. If you just count up all the countries where any kind of violence is occurring, the rate has increased only modestly over the last decade. But most of those are minor skirmishes and simmering conflicts with gangs and terror groups and little bands of ineffectual revolutionaries. When you look at estimates of the actual deaths in state-based conflicts, you can see that it took a big jump after the pandemic:
A chart of ten of the deadliest conflicts of the 21st century shows that deaths have been concentrated in recent years:
But to me, this data is less convincing than a single terrifying fact: Out of the world’s nine nuclear powers, four — India, Pakistan, Russia, and Israel — are now at war. (Update: Actually, if you count North Korea as being at war in Ukraine, it’s five!)
Even if India and Pakistan manage to climb down from the brink and avoid a protracted conflict, we should all still be unsettled. Russia and Israel are fighting non-nuclear enemies, which suggests that nuclear weapons can stabilize regions. But the fact that India and Pakistan, which are both armed with nukes, can fight each other to the degree they have — instead of climbing down like they did in 2019 — should worry us deeply.
This episode only reinforces what has been apparent for several years now — war is returning to our world. We’re slowly exiting a world of guerrillas and gangs and petty border skirmishes, and returning to the days when great powers clashed with each other regularly.
Ultimately, the reason for this is the end of Pax Americana. The power vacuum created by the decline of the global hegemon is prompting a scramble for power.
The end of Pax Americana means the world is up for grabs
In Europe, three of the last four centuries featured some kind of big “crisis” — a massive outbreak of war that destroyed the old power equilibrium among nations and ushered in a new one. The Thirty Years’ War in the early 1600s featured all of the region’s powers, and devastated the population of Germany. In the late 1700s and early 1800s there were the Wars of the French Revolution and Napoleonic Wars. And then of course in the early 1900s there were the World Wars. Other regions of the globe didn’t have such regular contests among regional powers, but they did have crises of their own — the fall of the Ming Dynasty in the mid-1600s, the Taiping Rebellion in the mid-1800s, the American Civil War, the Pacific Theater of World War 2, and so on.
This isn’t some regular clockwork cycle. The point is that over time, the stability of power relations seems to decay, both between nations and within them. This decay eventually results in a military contest to see where the new power lies.
For years, I’ve been calling for the U.S. to promote manufacturing. When Americans started getting excited about reindustrialization, I cheered. I was a big supporter of Joe Biden’s industrial policy, and I even praised Donald Trump for smashing the pro-free-trade consensus in his first term.
Trump’s tariffs haven’t changed my mind about any of that. Yes, the tariffs are a disaster. But they’re not a disaster because they promote manufacturing; indeed, they are deindustrializing America as we speak, by destroying American manufacturers’ ability to leverage supply chains and export markets. When America has finally realized the futility of Trump’s approach, it will be time to turn once again to the task of reindustrialization — in fact, that task will be even more urgent, given the damage that Trump will have done.
And yet at the same time, I think there’s a misguided narrative about globalization, manufacturing, and the American middle class that has taken hold across much of society. The story goes something like this:
In the 1950s and 1960s, America was a smokestack economy. Unionized factory jobs built a broad-based middle class, and we made everything we needed for ourselves. Then we opened up our country to trade and globalization, and things started going downhill. Wages stagnated due to foreign competition, and good manufacturing jobs were shipped overseas. American cities hollowed out, and we became a nation of winners and losers. The college-educated upper middle class thrived in their professional jobs, while regular Americans were forced to fall back on low-wage service work. Eventually the rage of the dispossessed working class boiled over, resulting in the election of Donald Trump.
No one anymore, on the left or the right, denies that globalization has fractured the U.S., both economically and socially. It has hollowed out once-prosperous regions like the furniture-making areas of North Carolina and the auto manufacturing towns of the Midwest. It has been a driver of income inequality…Trump owes much of his political success to the fury that these realities aroused in working-class Americans.
“My dad ran factories in the Detroit supply-chain orbit,” Financial Times columnist Rana Foroohar told me recently. “In the 1990s, the factories started shutting down. And when I would go home in the 2000s, half of my high-school classmates were on opioids.” She added, “The economic theories didn’t connect with the real world.”
Which raises an obvious question: Why did so many economists, policymakers, and journalists like me refuse to acknowledge the problems with neoliberalism for so long? Why were we so quick to label anyone who even flirted with the idea that maybe the U.S. should be protecting its industrial base, just as other countries did, as a Pat Buchanan-like fool?
One big reason was the most basic one: It meant low prices. Companies could keep their costs low by using China’s (and Mexico’s) comparative advantage: cheap labor. At the same time, companies like Walmart and Costco could buy goods directly from Chinese manufacturers, which invariably had lower prices than comparable American goods.
Like all such narratives, this one consists of layers of myth wrapped around a core of truth. But not all grand economic narratives are created equal — in this case, the layers of myth are thick and juicy, while the core of truth is thin and brittle. Everyone knows about the China Shock paper and the collapse of manufacturing employment by about 3 million in the 2000s. That’s the core of the story, and it’s very real. But there are a lot of big important economic facts that place that story in perspective, which most of the people talking about this topic seem not to know.
Ultimately, the trade-driven collapse in manufacturing was only a small part of the economic story of America over the last half century.
America is not actually that globalized
Pundits and politicians alike talk incessantly about the flood of cheap Chinese goods into America. But overall, this is a small percent of what we buy. The U.S. is actually an unusually closed-off economy; as a fraction of GDP, imports are much lower than in most rich countries, and lower even than China:
Trade deficits are an even smaller amount of GDP. U.S. imports of manufactured goods minus exports are equal to about 4% of GDP per year. Our trade deficit with China is about 1% of GDP.
In terms of imported components, America manufactures most of what it uses in production. China’s exports to the U.S. are actually more likely to be intermediate goods rather than the consumer goods we see on the shelves of Wal-Mart — another thing the typical narrative misses. But even so, China makes only about 3.5% of the intermediate goods that American manufacturers need:
So if we eliminated trade deficits, would it reindustrialize America? Even assuming that we replaced the imports 1-for-1 with domestically made goods, the impact on manufacturing’s share of U.S. GDP would be fairly modest. Here’s Paul Krugman:
Last year the U.S. ran a manufactures trade deficit of around 4 percent of GDP. Suppose we assume that this deficit subtracted an equal amount from spending on U.S. manufactured goods. In that case what would happen if we somehow eliminated that deficit?
Well, it would raise the share of manufacturing in GDP — currently 10 percent — by less than 4 percentage points, because manufacturing firms buy a lot of services. A rough estimate is that manufacturing value-added would rise by around 60 percent of the change in sales, or 2.5 percentage points, implying that the manufacturing sector would be around a quarter larger than it is.
So even under the optimal scenario, if we totally eliminated the U.S. trade deficit, manufacturing would go from 10% of U.S. GDP to 12.5% — about the same as its share in 2007, and still far less than Germany, Japan, or China:
You can also see from this chart that other countries haven’t necessarily done an amazing job of protecting their industrial bases, as Nocera claimed; the manufacturing share of GDP is drifting down everywhere.
And this chart is also a hint that trade deficits and manufacturing aren’t as tightly linked as most people seem to think. France has become steadily less manufacturing-intensive since 1960, despite the fact that it historically had very balanced trade, and even ran big trade surpluses in the 90s and 00s. Meanwhile, out of all the countries on the chart, Japan has done the best job of preserving its manufacturing share since 2010, despite running a trade deficit over that time period.
So while we tend to focus a lot on the impact of trade on U.S. manufacturing, the truth is that there are much bigger forces at work there. Most of what the U.S. consumes is made here, and most of what the U.S. produces is consumed here, and eliminating trade deficits wouldn’t change either of those basic facts.
The American middle class was never hollowed out
Americans, as a people, are startlingly rich. This isn’t just true because a few very rich people pull up the average. If you take median disposable household income, the U.S. comes out way ahead of the pack:
Note that this includes taxes and transfers, including in-kind transfers like government-provided health care.
Other countries may have protected their manufacturing sectors, but middle-class Americans are richer than the middle classes in other countries.
And middle-class Americans’ income has not been stagnant over the years. Here’s real median personal income, which isn’t affected by the shift to two-earner families:
This is an increase of 50% since the early 70s. I wish it had been more, of course, and it has its ups and downs, but 50% is nothing to sneeze at.
As for middle-class wages, they’ve grown less than incomes, since some of the increased income has been in the form of corporate benefits (health care, retirement accounts), investment income, and government benefits. But they have still grown:
Wage growth has resumed since the mid-1990s, despite increasing trade deficits. Note that the China Shock, which threw millions of manufacturing workers out of their jobs, utterly failed to stop wages from resuming their upward climb. Wage stagnation and hyperglobalization just don’t line up, timing-wise. Jason Furman has another good chart that shows this very clearly:
A lot of commentators have gotten so used to the idea that incomes are stagnant that they have trouble believing this data is correct. But as Adam Ozimek points out, the Economic Policy Institute — a pro-union think tank that frequently complains that wages are too low — chooses a very similar measure for median wages. EPI writes that wages “have not been stagnant”, but “have…been suppressed”.
And when we look at the lower percentiles of the wage distribution — the working class and the poor — we see that they’ve grown even more strongly, by over 40% since 1996:
A $4/hr. raise (adjusted for inflation) might not sound like a big deal, but for a poor person it’s pretty huge.
Of course, as Autor et al. show in their famous “China Shock” paper, the harms from Chinese import competition were concentrated among a few workers in a few regions. 2 million workers were only 1.5% of the U.S. workforce at the time, but for that 1.5%, being thrown out of good manufacturing jobs was a heavy blow.
But even in those unlucky regions, the negative effects don’t look to have been permanent. Jeremy Horpedahl points out that wages for the poor in Flint, Michigan and Greensboro, North Carolina — two areas that Nocera claims were “hollowed out” — have actually increased, while middle-class wages have risen in the latter:
How are the American middle class and working class prospering, if the good manufacturing jobs of yesteryear are all gone? Talmon Joseph Smith scoffs at “service economy jobs”, and Autor et al. find that manufacturing workers displaced by Chinese imports often took crappier, lower-paid jobs in the service sector.
But that describes the 2000s. The 2010s and 2020s have been very different. Deming et al. (2024) show that over the last 15 years, the boom in low-skilled service-sector jobs has gone into reverse, and Americans are instead flooding into higher-skilled professional service jobs:
It took a couple decades, but we’re finding that Bill Clinton was right — the average American is smart and competent enough to do knowledge work. And it’s being reflected in wages and incomes.
Now, none of this is to say that manufacturing is unimportant. It’s important for national defense, obviously. I also think it’s important for building a balanced, well-rounded economy — adding high-tech manufacturing on top of America’s knowledge industries would make us even richer, and would help us pump up exports and take advantage of multiplier effects. Manufacturing is also ripe for a productivity boom after decades of stagnation.
But the master narrative of protectionism is simply much more myth than fact. Yes, Chinese import competition hurt America a bit in the 2000s. But overall, globalization and trade deficits are not the main reason that manufacturing’s role in the U.S. economy has shrunk. Nor has globalization hollowed out the middle class — because in fact, the middle class has not been hollowed out.
Once we accept that this common protectionist narrative is deeply flawed, we can begin to think more clearly about trade policy, industrial policy, and a bunch of other things.
Most discussions that I see about China these days are about U.S.-China competition, or the question of whether China’s economy will reign supreme (my answer: Probably, yes, because it’s really big). But there’s another strain of discourse that’s kind of interesting, which is whether China is the Country of the Future, in terms of technology and urbanism.
In my experience, these discussions are usually pretty vague and confused, jumping back and forth between architecture, transportation, consumer technology, production technology, art, pop culture, soft power, urban design, and a bunch of other topics. That doesn’t mean I think the topic is worthless; vague and confused discussions can be fun! But I thought I’d try to think about Sinofuturism a little more systematically.
As far as I can tell, the recent burst of Sinofuturism seems to come from four main sources:
China’s new high-tech industrial model
The legacy of China’s real estate boom
A charm offensive by China
The election of Donald Trump
In the early 2020s, the economic model that had sustained Chinese economic growth since 2008 basically collapsed. This model was based on massive real estate investment — the biggest development boom in the history of the world. Real estate sales funded local governments, so local governments basically approved and supported any and all development that would increase the value of land. Meanwhile the Chinese central government encouraged banks to lend to developers as a way of sustaining the macroeconomy through a series of shocks. This predictably led to an eventual financial bubble and crash when the loans used to finance this incredible development boom outran the ability of real estate to generate economic returns. There was a big bust in 2021-23, and growth slowed down:
China’s leadership responded to this slowdown by going all-in on high-tech manufacturing. At Xi Jinping’s behest, the country’s banks poured untold amounts of money into sectors like autos, semiconductors, machine tools, robots, electronics, batteries, aircraft, and all kinds of other stuff. The government supported the boom with subsidies as well, though I think we often tend to overemphasize its role relative to the private initiative of companies like BYD, Xiaomi, and DJI.
That lending boom has since cooled off a bit, but it was enormous during 2021-23, and industrial loans continue to grow at a fairly rapid clip:
All that lending fueled a wave of investment in the “technologies of the future”. Many of those were production technologies — the machine tools and robots in the highly automated Chinese factories that you can see in videos like this one:
And some are consumption technologies, like the high-speed rail network that’s bigger than all the networks in the rest of the world combined:
China’s lax regulatory climate — partly a result of cozy relations between local government and corporations, partly an intentional result of the central government’s high-tech push — has made the rollouts of these technologies faster and more widespread than in developed countries, where things like noise complaints and safety concerns predominate.
The electronics manufacturing boom (which actually predates the more recent high-tech push) has also resulted in a glut of cheap LEDs, which many Chinese developers have plastered all over their high-rise buildings and malls. This might be partly cultural and aesthetic, but it’s largely an attempt by cities and companies to advertise themselves to businesses and consumers both at home and overseas. Videos of these “cyberpunk” nighttime cityscapes have proliferated across the internet:
The second big reason for the boom in Sinofuturism is a government charm offensive. A number of aggressive Chinese actions in the late 2010s and early 2020s — the claiming of the South China Sea and pieces of Indian territory, the crushing of Hong Kong, the rise of “wolf warrior” diplomats, China’s soft support for the Russian invasion of Ukraine — led to a rise in negative perceptions of China throughout the world, in both developed and developing countries. This probably contributed to a massive exodus of foreign capital from the country, as multinational corporations scrambled to diversify and de-risk themselves.
China’s government has responded with a series of “charm offensives” to increase the country’s “soft power” around the world. Part of the message is that China is a positive force in the global economy, promoting free trade, fighting climate change, spreading high technology, and offering infrastructure investment to developing nations. And part of the message is that China is the country of the future — a technological and economic powerhouse whose rise is inevitable and should be admired rather than resisted.
This charm offensive is now getting a boost from a flood of pro-China content by Western influencers. Fewer foreigners are living in China, and the number of tourists visiting the country has returned to near its pre-pandemic level. Yet there has been a massive proliferation of videos, mostly by foreigners, saying “I visited China, and it wasn’t what I expected at all!”, or “I visited China, and America is COOKED!” Here are a couple of examples:
The most famous of these, by far, is the recent series of videos by the popular internet personality Darren Watkins, better known as iShowSpeed:
An obvious question is whether these folks are getting paid by the Chinese government to make videos that support a Sinofuturist narrative. In fact, some are, especially the ones made by Western expats living in China. The New York Times reported on this phenomenon back in 2021:
The videos have a casual, homespun feel. But on the other side of the camera often stands a large apparatus of government organizers, state-controlled news media and other official amplifiers…State-run news outlets and local governments have organized and funded pro-Beijing influencers’ travel, according to government documents and the creators themselves. They have paid or offered to pay the creators. They have generated lucrative traffic for the influencers by sharing videos with millions of followers on YouTube, Twitter and Facebook…With official media outlets’ backing, the creators can visit and film in parts of China where the authorities have obstructed foreign journalists’ reporting.
In addition, it’s possible that China is using its control of the TikTok algorithm to promote videos like this — or, more likely, that would-be influencers hoping to go viral simply think TikTok will promote them if they spout a bunch of wide-eyed Sinofuturism.
But government propaganda is highly unlikely to explain all, or even most, of the boom in Sinofuturist videos.2 It’s likely that these videos are just a meme, much like travel to Japan became a meme in the 2010s.
China’s big tech push helps the meme, since all those futuristic cars and robots and drones give foreigners more to fawn over. But the sudden perception of China as the “country of the future” probably owes even more to the property and infrastructure booms that just ended. Neither the forests of LED-covered skyscrapers, nor the endless miles of high-speed rail, nor the vast shiny new malls that dot China’s city centers would exist if China’s banks hadn’t gone on the mother of all lending binges after 2008. Robots and drones are cool, but the built environment is what dominates travelers’ impressions of any country:
In other words, China’s real estate era may have ended in tears for some developers and local governments, but it left behind the physical edifice of a very futuristic-looking country. When people go to China and see the future, what they’re really seeing is the country’s recent past.
The final tailwind for Sinofuturism is the election of Trump, and the geopolitical ructions that have resulted. Trump has very loudly and flamboyantly turned America against Europe — bashing European countries in his rhetoric, hitting them with tariffs and tariff threats, threatening to pull out of NATO, supporting right-wing opposition parties, cozying up to Russia, and so on.
A few European leaders have responded by trying to get closer to China instead, but most are still too wary of the CCP. But European intellectuals are a different story. Some European thinkers resent the smug American superiority that resulted from decades of Cold War patronage, and are overjoyed to see America eclipsed. That geopolitical backdrop can easily color perceptions of a country, making even the pedestrian seem sublime.
In turbulent and troubling times, people instinctively grasp for some sort of future to believe in — some positive vision to hold on to. The U.S. and Europe right now don’t have much of a futuristic vision to offer; America continues to inflict wound after wound on itself due to its intractable cultural and partisan divides, while Europe is mired in economic stagnation and is struggling to defend itself against a much smaller, poorer Russia. Sinofuturism might not have been Western intellectuals’ first choice for an alternative, but if it’s a choice between Sinofuturism and bleak nihilism/pessimism, some will choose the former.
But what will this Chinese future actually look like, two decades or four decades from now? Here, I think there’s less than meets the eye.
First, let’s talk about Chinese urbanism. Westerners who go to Asia and see a lot of high-rises and electric signs often simply assume that all Asian cities are basically the same. But the way China builds its cities is very different from how Japan does it. Japan’s cities are hyper-agglomerations of dense mixed-use neighborhoods packed with small businesses. China’s cities sprawl much more. Here’s what Peter Calthorpe wrote in 2016, when China was still in the middle of its massive building spree:
One thinks of the high-rise, high-density buildings in many Chinese cities as inherently urban, but they are not. Smart growth and urbanism is more about connections, human scale, walkability, and mixed uses than it is about gross density. China’s pattern of gated superblocks (often over 40 acres, or 16 hectares, each) and isolated uses is actually a high-rise version of the American suburb…
In China, single-use residential blocks of largely identical units are clustered in superblocks surrounded by major arterial roads. Vast distances separate everyday destinations and create environments hostile to pedestrians. Sidewalks rarely are lined with useful services, and crossing the street is death-defying. Job centers are distant and commutes are long, especially for lower-income groups. In major Chinese cities, the gridlock expands to all hours of the day…
In the last five years, China has built more than 30,000 kilometers of expressways…China’s love affair with the car has blossomed into a torrid romance…[L]ike the U.S. cities of the 1950s and 1960s, Chinese cities are working to accommodate the explosive growth of automobile travel by building more highways, ring roads, and parking lots.
Outside of Beijing and Shanghai (and sometimes even within), you can tell that these skyscrapers were put up by a country with a GDP per capita of $10,000…These endless rows of skyscrapers, put up in the construction frenzy of the last few decades, are ugly - boxes of mostly concrete with visible blight and discoloration all over them. If the great construction binge is indeed over, it'll be a shame that China's infrastructure was built out during a period of particularly uninspired architecture…The city is dominated by these enormous apartment complexes - blocks of 10 adjacent 30-story buildings demarcated by 8-lane roads…This layout seems designed partly for social control.
A recent article by the ever-excellent Alfred Twu explains China’s urban layout in more detail:
Despite their strong visual dissimilarities, new construction in China and the US share one basic feature: they each support roughly the same population density, as their floor area ratio is similar.
…In contrast to the mid-rises that abound in US cities today, Chinese cities favor what is known as the 小区 (xiaoqu) or microdistrict. These tower-in-the-park-style residential developments comprise several high-rises on roughly 15 to 20 acres, surrounded by wide arterial roads…[X]iaoqus are built as gated communities. While primarily residential, the microdistricts also provide stores and services for residents, including schools…However, they do not contain offices or industry, and retail is limited to neighborhood-serving services, such as convenience stores and restaurants…
The sunlight requirement results in large spaces between buildings, limiting the floor area ratio to around 2.0 to 4.0, even for high-rises…closer to 2.0 than to 4.0 once internal roads are factored in…[T]hese buildings are unique to the People’s Republic.
Twu points out that since this urban form is the result of regulation rather than culture,3 China could theoretically revamp its cities into something denser, more mixed-use, and more walkable, like Tokyo, Hong Kong, or Singapore. But since the big real estate boom is over, the financing or political will for such redevelopment is unlikely to appear. China has already built itself. And even more than the U.S., China has built itself into a highly suboptimal configuration.
America’s sprawling suburbs are the target of much derision from urbanists worldwide, but they have a charm that’s all their own — huge luxurious houses serve as social gathering places, cars provide mobility, lawns and parks provide the illusion of living close to nature. That lifestyle exerts a magnetic pull; Americans of all races and social classes still want to move (and are actually moving) out to the ‘burbs. And this pull is worldwide — newly developed outlying areas of Europe, Asia, the Middle East, and everywhere else look a lot more like American suburbs than they look like Tokyo or Paris. Like it or not, 20th-century America invented an urban future that came to dominate the world.
But China will not do the same. Who wants to live in a xiaoqu? You live in a smallish apartment, like you would in NYC or Tokyo, but instead of being within walking distance of some of the world’s most vibrant shopping and entertainment districts, you’re in a gated community. The only things close to you are a sanitized communal lawn and a couple of boring stores for basic necessities. To get to anything remotely interesting — which in China generally just means a shopping mall — requires walking long distances over huge arterial roads to a train station, or taking your car. You get all of the isolation of the American suburbs with none of the luxury. You’re basically in Cabrini-Green but without the crime.
I suspect that very few people around the world are going to want to live in Chinese-style microdistricts. And I suspect that in twenty years or so, the children of the current Chinese generation will see this urban form as sterile, cramped, and confining. Except it will be very hard to rebuild Chinese cities into either the American or the Japanese model.
As for the spectacular beauty of Chinese downtowns, I suspect that Chinese people themselves are going to get tired of the light pollution that wows the tourists. Already, residents of Shanghai, Chongqing, and other cities have begun to express a preference for fewer gratuitous displays of garish illumination.
China’s building boom will certainly leave behind plenty of interesting structures. But because the boom was driven by overabundant capital, many of these designs were created more as advertisements for the developers than as places that are actually nice to walk around in.4
And the buildings themselves won’t always look as nice as they do now, either. I’m no Brian Potter, but even I know that over the course of about thirty or forty years, reinforced concrete tends to weather, crack, and spall. Most of urban China is very humid, and pollution levels are still fairly high; this will damage many of the nice new surfaces of China’s buildings, most of which were built in the last two decades. Buildings that turn out to have been built with substandard materials — and there are some of those out there — will go downhill earlier.
At that point, China will have to choose between A) expensive upkeep and redevelopment to keep cities looking new, or B) patching up and painting over old buildings to save money. Japan actually chooses the former, which is why it still looks nice — but this eternal construction and beautification costs a lot of society’s resources. Hong Kong and Taiwan have chosen the latter, and as a result, people gush a lot less about the built environment when they visit those cities these days.
I know it’s fun to go to a foreign city, look around at the buildings, and make grand sweeping judgements about the relative strength of civilizations over the next thousand years. But next time you find yourself gaping at a sparkling new high-rise in Shenzhen or Chongqing or Dubai, remind yourself: “This too shall spall.”5
As for transforming global culture — a key part of soft power — China has yet to really do this. Their censorship regime — an inescapable part of their authoritarian system — is constantly hamstringing or deterring Chinese creatives. As China gets richer, its people will spend more on entertainment, and entertainment industries will emerge. But I suspect this censoriousness will hamper the emergence not only of truly deep and creative works of art, but also of creative new forms of popular entertainment.
20th century America invented 3D animated children’s movies and third-person action-adventure video games; China’s two most celebrated hit cultural products over the past few years have been a 3D animated children’s movie and a third-person action-adventure video game. And so far, global appeal has been elusive; Sinofuturists who trumpeted the fact that Ne Zha 2 earned more at the box office than any Disney movie failed to mention that over 98% of that revenue was earned inside China.
As for China’s technological futurism, there I have more confidence. China’s mastery of the core technologies of the electrical age — batteries and motors — will continue to produce wonders, especially because America has voluntarily forfeited leadership in these technologies for cultural reasons. Personal air taxis, ultra-fast car chargers, and humanoid robots that can do flips are not the last whiz-bang gadgets you’ll see come out of China. Nor will China’s innovation be limited to the electrical sphere. And China’s massive research spending spree, together with Trump’s deep cuts to American science funding, mean that the future has never looked brighter for Chinese scientific supremacy.
But here, too, I would be cautious about projecting out more than a decade or two. To the degree that scientific progress relies on human capital, China is going to start having a tough time in the late 2040s. After the big “Alpha” generation works its way through the system, population will relentlessly decline:
(Of course, AI researchers may replace human ones, but at that point China’s fundamental advantage — its incredibly huge population of talented engineers and scientists — starts to become less important.)
Also, much of China’s technological leadership has a darker side. All the tourists love the electric cars and the high-speed trains. But China is also the global leader in electronic surveillance, to the point where they’ve basically turned their whole country into a panopticon. China uses the internet to repress dissent, and AI will make that task easier. China’s government has also shown an eagerness to use the internet to spread dissension and stir up hatred in other societies around the world, I expect AI to make that much easier as well.
Is that a future worth putting our hopes in? Would we really trade our right to dissent and our last shreds of privacy for a ride in an air taxi and a delivery robot at our door? Why should we look forward to the march of science and technology if it doesn’t promise to empower the mass of humanity to live their lives as they see fit? Technological contrivances whose purpose is to enslave me, my family, and my friends do admittedly inspire a certain kind of dreadful awe, but I would rather read that science fiction novel than live in it.
This, ultimately, is what Sinofuturism is lacking — the promise of ennoblement. People now make fun of the American suburbs of the 1950s, or use them as an object of misplaced nostalgia. But if you were to look at that lifestyle — the house, the car, the TV, the telephone — you could see the seed of a way of life so appealing and so free that it would eventually become the global standard. Right now, China is a beautiful place to visit, but the Sinofuturists who gush about its neon cities and its magnificent technology demonstrate a notable reluctance to move there.
Interestingly, Japan did something a bit similar when its growth slowed after the oil shocks of the 1970s and again after the real estate bust of the 1990s. MITI, the industrial policy ministry, decided that the country needed to shift from heavy and chemical industries to knowledge-intensive industries, which included electronics, computers, and so on. This was somewhat successful — a decent amount of the futuristic Japanese stuff that wowed us in the 80s, 90s, and early 00s was the result of this push, or was the result of parallel efforts in the private sector. It probably led to William Gibson’s visions of a Japan-led cyberpunk future. But although the high-tech manufacturing push was enough to keep Japan at the global technological frontier for a long time, and may have given Japanese growth a minor boost, Japan never returned to the rates of growth seen during its catch-up phase.
We know it’s not culture because China’s unregulated “urban villages” and Chinese-descended places like Hong Kong, Taiwan, and Singapore all build much higher density and much more mixed-use spaces, while relying less on cars.
The art exhibition that the Sinofuturist VC David Galbraith described as “sublime” is a bare gray concrete rotunda situated beneath a bare white concrete tunnel pointed at an empty sky. It’s the kind of brutalism that hipsters and culture snobs love to sneer at in the West, but suddenly admire when it’s a foreign country. Then again, Galbraith is British, so this exhibit might simply conform to British tastes more than to American ones.
China’s massive high-speed rail network will also be an incredible challenge to maintain (read this Casey Handmer blog post to understand the details). Unless ridership stays very very high even on the secondary lines, China’s HSR will probably end up being a significant fiscal drag.
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