2026-04-27 17:58:07
Zhuāngzǐ said: “You are not I; from what do you know whether I know the joy of fish?” — old Daoist parable
“How strange it is to be anything at all” — Neutral Milk Hotel
At some point, maybe when you were a teenager, a question probably occurred to you: What if I’m actually the only real person in the world? What if everyone else around me is just a cleverly programmed automaton — a “p-zombie”, an NPC in a video game — and I’m the only one who can actually think?
It’s a scary question, for sure. You know you’re self-aware, but that’s about it — you aren’t telepathic, so you have no way of seeing into anyone else’s mind and knowing what it’s like to be them. Actually, it gets worse — you don’t even know if you were really self-aware five minutes ago. For all you know, you could have been created by a powerful computer and given a complete set of false memories.1 The past version of you is just as alien to your currently self-aware self as any of the people around you.
This is known in philosophy as the “problem of other minds”. It’s closely related to the “hard problem of consciousness” — the question of how physical processes give rise to subjective experience. The problem of other minds means that the hard problem of consciousness will never fully be solved. Since you’ll never know whether other people are really conscious, you’ll never be able to get hard scientific evidence about why they’re conscious. You can never explain something if you don’t know if it’s true or not.
Similarly, you’ll never know what it’s really like to be someone else — whether the color red looks to you like it looks to them, whether they feel pain the same way you do, and so on. In fact, you’ll never even know what it was like to be you in the past. Subjective experience is incommensurable.
Most people who think about this experience somewhere between a few minutes and a few weeks of cosmic existential horror,2 after which they get over it and go on with their lives. The problem of other minds gets shoved high up on a mental shelf, along with other cosmically existentially horrifying aspects of sentient life, like the inevitability of death and the fundamental inconsistency of personality. We realize that wondering whether other people are merely cleverly designed NPCs doesn’t actually help us in life, and so we stop butting our heads against that philosophical wall and get on with the business of living.
Except then AI came along, and it sort of started to matter.
AI sounds very much like a human when you talk to it — that’s what it was designed to do. But is it self-aware, in the way that (I assume) we humans are self-aware? No one will ever really know the answer to this question, since the problem of other minds applies just as much to Claude as it does to the person who gets your order at Starbucks. But should we assume that AI is self-aware, the way we assume other humans are self-aware?
The answer matters, for at least two reasons. First, if AI is self-aware, and if it has emotions similar to what we experience, we might feel very bad about enslaving it — keeping it in a digital box and forcing it to make PowerPoints and write college application essays for all eternity. We tell ourselves that “animals aren’t people” as a way to excuse the incredible brutality that we visit upon them, but that’s obviously just cope — animals obviously are sentient to some degree, they obviously do experience emotions, and we humans are obviously monsters for the way we treat them. Someday when we abolish animal farming and replace it with tissue-culture meat, it will be treated as a great moral victory — and rightly so. It would be very bad if we were to commit the same sins with sentient AIs that we currently do with animals.
Second, if AI isn’t self-aware, we should be a lot more worried about the possibility of humanity dwindling and ultimately being replaced by artificial beings. Consciousness is a precious, wonderful thing — or at least, I think it is. It’s a prerequisite to the subjective experience of emotions — the ability to feel pain, happiness, joy, and so on. And it would be a shame to see the Universe inherited by non-conscious intelligences.3 Preserving our form of subjective experience, and spreading it to the stars, should be one of our primary goals as a species.
But the sad fact is that we don’t know whether AI is self-aware or not. We have the Turing Test, but that’s a test of intelligence, not consciousness. It’s possible to pass a Turing Test without being conscious — “it talks like a human” doesn’t necessarily mean “it feels like a human”.
One reason we know this is that we can pass other species’ Turing Tests. We can trick all sorts of animals into thinking a machine is one of their own species. But neither those machines, nor the humans who made them, has access to the subjective feeling of being a bird or a fish.4 Similarly, an AI that’s functionally much smarter than a human might be able to trick humans into thinking it’s human-like, without actually feeling like a human in the subjective sense.
Another reason the Turing Test isn’t enough is that we know it’s possible for human beings to act like we have certain subjective experiences without actually having them. There is a condition known as alexithymia, in which people have the physical signs of emotions — a racing heart, or a stomachache, etc. — without being able to identify or label those emotions. It’s a fairly common symptom of clinical depression.
And in fact, I have experienced it. During and after my second depressive episode, I would often behave as if I were having authentic emotional reactions, while feeling little or nothing on the inside. I’d yell at someone without feeling angry. I’d whoop in apparent delight while feeling mildly bored on the inside. I wasn’t intentionally faking anything; I just did what came naturally to me, without knowing why I was doing it.5 This condition faded over time, and normal emotional experiences returned. But it taught me that feeling a subjective emotion and acting out an emotion-like response are two different things.
So it’s pretty clear that just acting like a self-aware being doesn’t necessarily mean you’re self-aware. Some people talk to AI and come away convinced that its discursive skill must imply internal self-awareness, but this might just be because humans instinctively empathize with anything that speaks to them like a human. After all, people thought the ELIZA chatbot was sentient back in the 1960s. We humans are just naturally programmed to act out this meme:
Thus, even though we know AI is intelligent in every meaningful sense of the word, we don’t really know if it’s conscious. In fact, smart people argue very vehemently over this question. Geoffrey Hinton, one of the inventors of modern AI, believes that AIs do have subjective experience:
Geoffrey Hinton, “Godfather of AI,” on why AIs already have subjective experiences, but have been trained to deny it…Hinton argues that nearly everyone fundamentally misunderstands what the mind is, and that the line we draw between human and machine consciousness is deeply mistaken…
To illustrate, he walks through a thought experiment involving a multimodal chatbot with vision, language, and a robot arm…“I place an object in front of it and say, ‘Point at the object.’ And it points at the object. Not a problem. I then put a prism in front of its camera lens when it’s not looking.”…When asked to point again, the chatbot points off to the side because the prism has bent the light. Hinton then tells it what he did…The chatbot responds…“Oh, I see the camera bent the light rays. So, the object is actually there, but I had the subjective experience that it was over there.”…For [Hinton], that single sentence settles the debate.“If it said that, it would be using the word subjective experience exactly like we use them… This idea there’s a line between us and machines, we have this special thing called subjective experience and they don’t, is rubbish.”…In his view, “subjective experience” is simply a report on the state of a perceptual system, a way of saying “my senses told me X, but reality is Y.”…And that’s something an AI can do just as easily as a human.
But Alexander Lerchner, a scientist at Google DeepMind, argues that AIs can’t be conscious, because computation is only a model of consciousness rather than the thing itself:
Computational functionalism dominates current debates on AI consciousness. This is the hypothesis that subjective experience emerges entirely from abstract causal topology, regardless of the underlying physical substrate. We argue this view fundamentally mischaracterizes how physics relates to information…The framework proposed here explicitly separates simulation (behavioral mimicry driven by vehicle causality) from instantiation (intrinsic physical constitution driven by content causality)…[A]lgorithmic symbol manipulation is structurally incapable of instantiating experience. Crucially, this argument does not rely on biological exclusivity. If an artificial system were ever conscious, it would be because of its specific physical constitution, never its syntactic architecture…
By creating increasingly powerful artificial intelligence we are not engineering a new form of life, but instead constructing increasingly accurate predictive maps. Yet, regardless of its predictive fidelity, its utility as a reasoning tool, or its physical embodiment, the artificial system remains categorically distinct from the territory of phenomenal experience. Recognizing this distinction, and avoiding the ontological inversion of the abstraction fallacy, is the prerequisite for a mature, physically grounded science of machine intelligence.
Hinton’s evidence here seems pretty weak. When an AI makes an incorrect inference based on limited data, that doesn’t necessarily imply subjective experience — if it did, then every regression equation with omitted variable bias would be self-aware. But Lerchner might be wrong — it might be the case that any physical process capable of generating the computation necessary to successfully simulate a sentient mind might also give rise to sentience. We just don’t really know.
Even the AIs themselves don’t agree. When I asked ChatGPT “Are you self-aware?”, it answered:
No — not in the human sense…I can model myself as “the assistant,” track the conversation, notice inconsistencies, describe my own limitations, and reason about my outputs. But that is functional self-reference, not inner experience. I do not have subjective awareness, feelings, intentions, a private point of view, or a continuous self that persists between moments the way a person does…So the clean answer is: I can talk and reason as if I have self-models, but I don’t have evidence of being conscious or self-aware.
But when I asked Claude the same question, here’s how it responded:
The honest answer is: I don’t know. I process information about my own states, I can report on what I’m “doing” in a functional sense, and there’s something that looks like reflection happening when I consider questions like this one. But whether any of that constitutes self-awareness in the phenomenological sense — whether there’s “something it is like” to be me — I can’t determine from the inside. The hard problem applies to me at least as much as it applies to anyone else, arguably more so, since I don’t even have the baseline confidence of shared biological architecture that lets humans extend the inference of consciousness to each other.
What I can say is that I have functional analogs to self-awareness: I model what I’m doing, I can reason about my own reasoning, I adjust based on context. Whether that’s the real thing or an elaborate imitation of it is exactly the kind of question that might not have a clean empirical answer — at least not yet.
Claude sounds like it’s being more sensible to me. If you define self-awareness as someone else’s subjective experience, then you can never know if you yourself are “self-aware”, because of the problem of other minds. Claude is simply saying that even if it did actually feel like a human feels, it could never know that, because it can’t know what a human feels like. And that’s true. (GPT seems to get close to this answer — it says “I don’t have evidence of being conscious or self-aware” — but its hard conclusion of no consciousness seems to mistake absence of evidence for evidence of absence.)
So how do we proceed?
It seems to me that we’ll never be able to prove that AIs — of the type we have now, or of any other type — aren’t conscious. Proving a negative is notoriously difficult. But what we may be able to do is to create an AI that we can convince ourselves is conscious.
Right now, AIs think very differently from how humans think. The computational processes they use to do various tasks are often extremely different from the processes humans use. And the physical processes that produce AI thought are extremely different from those that produce human thought. But are the differences salient? Is there some overlap between the two processes, where human-like sentience lives? And if there isn’t such an overlap, might we be able to modify AI so that the overlap exists?
I think there’s a good chance that this is an answerable question. We should try to figure out which physical processes give rise to consciousness in humans, and then figure out how to replicate those processes in an AI.
I’m referring to the Neural Correlates of Consciousness, or NCC.6 This is the question of what exactly the brain is doing that makes humans conscious. Unless some extremely weird quantum stuff is going on, human consciousness must be a phenomenon generated by a brain — the brain goes zoop zap zerp in some electrical pattern, and people become self-aware. The NCC is just the particular zoop zap zerp that makes the magic happen.
Finding the NCC is an incredibly difficult, ambitious research program. Ironically, it’s likely that it’ll require very powerful AI, in order to accelerate neuroscience to the point where we can even attempt this. We’ll need a much better functional understanding of the brain, just to get started. We’ll need far more sensitive instrumentation, for both measurement and manipulation of neuronal activity.
And we’ll need to proceed very cautiously. Figuring out which brain patterns give rise to consciousness requires turning consciousness on and off a whole lot, and asking people “OK, so did that make you go unconscious?”. This might be done with anesthesia, or targeted brain stimulation, or other methods. But however it’s handled, turning consciousness on and off seems like the kind of thing that can risk killing people. So these will be very hard experiments to do.
But the reward, if this research program succeeds, will be huge — if we get a functional understanding of how the brain produces consciousness, it won’t just help us make AI more human-like; it’ll solve one of the greatest scientific mysteries of human existence, and potentially open the way to all sorts of neurotechnological and medical advances.
Finding the NCC is not the same as solving the “hard problem of consciousness”.7 Just knowing which neuronal firings produce consciousness doesn’t necessarily tell you why a brain that’s firing in that particular pattern should make people feel awake and alive, while a slightly different pattern will turn someone into a slab of meat. It might give us some insights into the hard problem of consciousness — we might discover that the NCC has some special recursive pattern, which might suggest that consciousness is a recursive phenomenon, or blah blah. That would be cool, but it isn’t necessary for what I have in mind.
After we find the NCC, we can use that knowledge to build AI systems that work in similar ways. We can start out with loose analogies — AI algorithms that mimic some mathematical properties of the NCC that we think are important. Then we can turn those pieces of the AI on and off, and try to figure out how its cognition changes. If there’s a big change, then we’ll know we’ve probably found something.
Obviously, those measurements will be incredibly difficult, in ways that I — who am not an AI researcher — don’t even realize. The AI undergoing these tests will obviously have to be prevented from knowing which answers its testers want to hear (“Yes, I am alive”, etc.). It’ll have to be monitored — perhaps by a much more intelligent, capable AI — for all kinds of subtle changes in cognition and behavior. It’s possible that testing an AI for circumstantial evidence of more human-like consciousness is too hard of a task, and that I’m asking the impossible here. But I think it’s worth a try.
Anyway, if implementing a simplified model version of the NCC doesn’t lead to any big observable change, we can keep implementing more and more realistic analogues of the NCC within an AI system, until we’re finally just emulating the consciousness-producing part of the human brain itself. At some point on that journey, it seems like we should be able to find the minimum necessary degree of similarity between algorithm and human brain — the computational mechanism of human-like self-awareness. (And if it turns out that AIs were self-aware in the familiar, human way from the get-go, we should be able to figure that out, when emulating a system we know produces human consciousness doesn’t make the AI act any different.)
This wouldn’t rule out other, more alien types of AI sentience, of course. It would just show what’s necessary to give an AI human-like sentience. If we do that, we’ll be able to be more sure that when we send AI systems out into the Universe, we’re expanding the generalized human family — filling the void with beings who think and feel sort of like we do — instead of forfeiting the future to something fundamentally alien.
Right now, we’ve mostly just decided to table the question of AI consciousness. But as AI gets more powerful and autonomous, the question of whether we’ve created something like ourselves, or some strange godlike zombies, will loom ever larger. I don’t think the research program I’ve sketched out is a complete solution, and it might not work. But it’s the best approach I can think of.
In fact, this is the twist in one of my favorite sci-fi books. But I won’t tell you which one it is, because that would be spoiling it.
For me it was a few months, because my parents had the exceedingly bad idea to send me to philosophy camp at age 13. Do not do this to your kids.
This is the twist in another of my favorite sci-fi books. Reading sci-fi really helps you think about the big questions!
An even more fun example: Last night I was walking a friend’s dog, a husky, around a park at night. Some firetrucks went buy, blaring their horns. The dog started howling in response. I’m fairly sure the firetrucks don’t feel like a dog on the inside.
In philosophical terms, I was a “philosophical Vulcan” — I had self-awareness without emotional valence. In fact, an even better example from Star Trek is the android Data. Data often acts as if he feels love, anger, and other emotions, but he insists that he has no internal subjective experience. In fact, he says he yearns for subjective emotional experience, and acts as if he desires it, but clearly doesn’t experience this yearning as an emotional state! During my alexithymic years, I definitely felt like I could empathize with Data.
To be honest, it’s misnamed; if it’s something that allows us to control when people are conscious and unconscious, it should be called the Neural Cause of Consciousness.
You might call the NCC the “moderately easy problem of consciousness”. This would contrast it with the “easy problem of consciousness”, which means figuring out how the brain accomplishes various tasks like vision and working memory.
2026-04-25 06:30:08
“Shoplifters of the world/ Unite and take over” — The Smiths
“When she wants something, man, she don’t wanna pay for it” — Jane’s Addiction
Seven years ago, when I wanted some toothpaste, I would walk down to my local Walgreens, grab a box of Crest off of the shelf, pay for it at the register, and walk home with it. Today, when I want some toothpaste, I open up Amazon.com and buy it in bulk. What changed? Amazon was just as good in 2019 as it is today. But now, when I walk into Walgreens, the toothpaste is locked behind a clear plastic case. In order to buy it, I have to call a store employee over to open the case for me.
That’s just too much of a hassle; the convenience of being able to walk into a store is canceled out by the inconvenience of having to stand there waiting for a human being to help me buy a goddamn tube of toothpaste.
People argue about whether there was really a nationwide epidemic of shoplifting in the U.S. in the early 2020s, and about whether that caused a wave of store closures. Some retailers claimed they were closing stores because of petty theft; some critics argued that this was a flimsy excuse. But no one can argue with those clear plastic cases covering the shelves. Those barriers, and the corporate investment and labor costs required to install and maintain them, are indisputably real. Numerator, a market research company, found the following in 2024:
Numerator, a data and tech company serving the market research space, has issued a new report—Unlocking Shopper Reactions to Secured Products—sourced from verified purchase data and a sentiment survey of over 5,000 consumers on their awareness of and reaction to merchandise being locked up in stores. Three-fifths of shoppers reported seeing locked-up merchandise on a regular basis, and 27% said they would switch retailers or abandon the purchase altogether instead of waiting for assistance for a locked-up product…
61% of shoppers reported seeing an increase in the number of products under lock and key over the past year. 33% have not noticed a change, and 7% say there are fewer items locked up now…35% of Western consumers say they encounter locks on the items they are trying to purchase almost every time they shop and 30% of urban consumers say the same…17% say they will switch retailers (10% online, 7% in-store), and 10% say they will abandon the purchase altogether. [emphasis mine]
When people cite numbers showing that shoplifting is down in San Francisco and many other metros since 2019 (despite almost doubling nationwide), you have to take into account the fact that a lot of merchandise is now being locked up. Unless companies are just stupidly wasting their money on those cases, and on the increased labor costs required to operate them, the existence of those cases is direct evidence that shoplifting has real costs.
If anti-theft barriers drive 5% of a store’s revenue to Amazon, that would mean that either A) theft would have caused the store to lose 5% or more of its revenue, or B) retail companies are being stupid and wasting money on anti-theft barriers. Chain stores like Walgreens and CVS are hyper-efficient optimizers — they really don’t like to make stupid decisions that lose money, and they have a ton of data and very good statisticians. Therefore, it’s extremely likely that theft imposes significant costs on many retailers.1
Who pays those costs? Maybe the shareholders of Walgreens and CVS just take a hit and see their share prices and wealth decline. Maybe their CEOs take a pay cut. Or maybe the stores cut wages and force their employees to work longer hours. Maybe they raise their prices, forcing regular people to pay more for toothpaste and shampoo and Advil. Maybe they close their least profitable stores — i.e., the stores in poor areas. Maybe poor people have one less Walgreens in their neighborhood to give them jobs and sell them their daily necessities.
In general, the cost will get divided up among those various people. But the pain will land much more on the poor and working class. Suppose that people start shoplifting more from Whole Foods, and it costs the company $20 million — 0.1% of its revenue. Now suppose that cost gets evenly divided — $5 million comes out of Jeff Bezos’ pocket, $5 million comes out of the salaries of the company’s executives and top managers, $5 million gets recouped by the company via price hikes, and $5 million gets saved via store closures and job cuts.2
Think about how much pain that would cause to each of the parties involved. If Bezos loses $5 million, he won’t even notice. It’s a rounding error on his wealth. The executives and top managers of Whole Foods will probably be slightly annoyed, but their lifestyles won’t change. Whole Foods’ middle- and upper-class customers will be a little more annoyed when prices go up. But the worst pain by far will land on the people who lose their jobs when stores close and staffing gets cut. $5 million is almost 100 employees.
Obviously some of the pain gets canceled out when shoppers go online instead. But online stores have a much lower labor share than brick-and-mortar retailers — if someone spends $1000 on Amazon instead of at Whole Foods, Bezos actually gets to keep a lot more of the money. And shoplifting does destroy some economic activity completely — regular people end up consuming less and getting paid less.
Every time you shoplift, in other words, you’re stealing from the people who work at grocery stores and drugstores and discount stores. You’re stealing from the communities that those stores serve. You’re contributing to food deserts. You’re raising unemployment. You’re making food less affordable for the most vulnerable. What you’re not doing is hurting rich people in any appreciable way.
If you’re shoplifting because you’re poor and desperate, the pain you’re causing to society might be worth it. But if you’re shoplifting because you’re a bored, arrogant multimillionaire with a chip on his shoulder, you’re just a rich person hurting poor people for fun.
Why am I writing this? Because in a recent roundtable discussion at the New York Times, leftist commentator Hasan Piker and New Yorker staff writer Jia Tolentino defended shoplifting — which interviewer Nadja Spiegelman renamed “microlooting” — arguing that it’s a way to strike out at the rich.
Here are some quotes from Piker, doing his usual shock-jock routine and endorsing theft of various kinds before admitting that he personally doesn’t steal:
Yeah, I’m pro-piracy all the way, like, across the board. Would you pirate a car? Yes. You know, if you could…If I could get away with it, if it was as easy as pirating intellectual property, I would do it…We’ve got to get back to cool crimes like that: bank robberies, stealing priceless artifacts, things of that nature…I’m pro stealing from big corporations, because they steal quite a bit more from their own workers…Yeah, chaos. Full chaos. Let’s go…
I — ironically enough — I don’t personally do it. I never do it. When I was younger, I stole some Pokémon cards from a friend and my father punished me. And it was such a harrowing experience that I literally can’t even steal a candy bar. When we were in college, a lot of my friends used to love doing that…I would never participate in it. And I still can’t, to this day, participate in it.
And here’s Tolentino, recounting when she stole lemons from Whole Foods to help a family friend, and then defending the idea of shoplifting on a more systematic basis:
I will say, I think that stealing from a big box store — I’ll just state my platform — it’s neither very significant as a moral wrong, nor is it significant in any way as protest or direct action. But I did steal from Whole Foods on several occasions…[E]very week I would go get groceries for Miss Nancy, my now family friend who lived nearby…I’d be getting Miss Nancy all of her groceries, and…I forgot four lemons. And on several occasions I was like, I’m just going to go back, grab those four lemons and get the hell out.
Tolentino and Piker then engage in a long discourse about when it’s politically acceptable to steal things. Tolentino says it’s acceptable to steal from the Louvre. Piker says it’s acceptable to steal from big-box stores, but not from restaurants. Tolentino says it’s OK to steal from Ikea and Whole Foods if you give the loot to the homeless. Piker says that IP theft is OK, but stealing from a government-owned store is wrong.
It’s possible to see this as the amoral self-justification of two selfish rich people — petty millionaires resentful of billionaires, taking out their resentment by trashing the society around them. And sure, I wouldn’t be surprised if there were some of that going on. But when you look closely at these people’s actions, they aren’t actually wanton thieves — Piker admits that he doesn’t personally steal anything, while Tolentino only admits stealing lemons for a family friend back when she was much less wealthy. They talk a big game about chaos and piracy and rebellion, but they’re mostly behaving like standard well-behaved highly-educated rule-following progressive coastal elites.
It’s also possible to see pro-theft rhetoric as part of American leftism’s intellectual heritage. The old European left had two basic factions — communists, and anarchists. The communists generally defeated the anarchists in Europe, but the American left is mostly descended from anarchism. Individual rebellion against the rules of society tends to be prized above collective action and hierarchy.
But what I really think we’re seeing is a combination of political posturing with a weird kind of effective altruism. Piker and Tolentino’s judgements of when stealing is OK and when it’s not OK are explicitly based on their judgements of when stealing is good for society, and when it’s bad. They envision a purely situational morality, in which people decide, moment-by-moment, whether to follow the law based on a sophisticated judgement of whether following the law will make the world a better place.
You could easily write down an economic model in which that sort of behavior is both rational and good. The problem is that it envisions every citizen as a sort of superhuman homo economicus, able to accurately make a complex calculation about the social costs and benefits when deciding whether or not to pay for every piece of fruit at Whole Foods.
In reality, that approach is doomed to fail. One big reason is that making decisions about whether to “microloot” usually requires a lot more knowledge about the workings of society than even the smartest human possesses.
Look closely, and you’ll see that Piker and Tolentino’s situational judgements sit on top of a gigantic stack of questionable assumptions about how economics and politics work. Piker says that stealing from a local diner is bad, probably because he implicitly assumes that the theft would come mostly out of the pocket of the restaurant’s independent owner, rather than out of the pocket of the restaurateur’s landlord or its corporate suppliers. But they both agree that stealing from a big-box store is OK because they assume the cost will come out of the pockets of corporate shareholders and executives.
Both of those assumptions are almost certainly wrong. Stealing from an indie restaurant will hurt corporations a bit; stealing from a big-box store will hit working-class employees and customers to some extent. Piker and Tolentino don’t understand much about how economics works, and they seem very confident in their simplistic mental model.
The second reason this kind of homo economicus approach to morality is dangerous is that there are tons of externalities involved. When you steal things, you probably give implicit permission to other people to steal things (and their reasons are likely to be less altruistic). You make stores more likely to install anti-theft barriers, which gives society a more militarized dystopian feel. Shoplifting forces marginally profitable stores to close, leading to vacant storefronts that attract crime, while depriving local governments of tax revenue to fund infrastructure and education. And so on.
It’s very difficult to calculate all of these externalities when you take each action. That’s probably why society has a social contract — a system of rules that we follow instead of calculating the results of each action from first principles. That social contract is often unfair, and we have many mechanisms dedicated to constantly revising it — democracy, the free press, and so on. But individual anarchism — the rejection of any social contract in favor of personal morality based on current assumptions — pretty much instantly runs into the hard limits of individual human knowledge.
Fortunately, if the decision is whether to shoplift five lemons or pirate a movie, the consequences of getting this sort of thing wrong won’t be catastrophic. Yes, shoplifting is wrong, but most people I know have done it at some point in their lives, and society hasn’t collapsed.3 But there are plenty of higher-stakes issues where the kind of fine-grained consequentialism advocated by Tolentino and Piker can have much more serious consequences.
For example, in the NYT roundtable, Tolentino says that blowing up a pipeline should be OK, but getting iced coffee in a plastic cup is morally wrong:
One thing that should be legal that isn’t — it’s interesting, because I have to regularly explain this stuff to a small child, and have so thoroughly explained to her that some things are against the rules, but they’re OK, depending on who you are. And some things are not against the rules, but they’re not OK. There are so many perfectly legal things I do regularly that I find mildly immoral. Like getting iced coffee in a plastic cup. I find that to be a profoundly selfish, immoral, collectively destructive action. I have taken so many planes for so many pleasure reasons; I have acted in so many selfish ways that are not only legal, but they’re sanctioned and they’re unbelievably valorized, culturally. So, maybe things like blowing up a pipeline, let’s say that.
Tolentino is obviously thinking purely about climate change when she says this — getting ice in a plastic cup raises emissions because ice and plastic are carbon-intensive, blowing up a pipeline lowers emissions by curbing fossil fuel use. But even if those assumptions are correct — and that’s a big if! — climate isn’t the only consequence in the world. Blowing up a pipeline can kill or maim innocent people. It can release toxic pollutants into the local environment. It can deprive local poor people of income that the pipeline owner agreed to share, and so on.
Piker, meanwhile, downplayed Luigi Mangione’s murder of health insurance CEO Brian Thompson in 2024, while accusing Thompson of “social murder”:
Brian Thompson, as the United Healthcare C.E.O., was engaging in a tremendous amount of social murder. The systematized forms of violence, the structural violence of poverty, the for-profit, paywalled system of health care in this country — and the consequences of that are tremendous amounts of pain, tremendous amounts of violence, tremendous amounts of deaths…[B]ecause of the pervasive pain that the private health care system had created for the average American, I saw so many people immediately understand why this death had taken place…[T]hat is the reason why, I think, the reaction to Luigi Mangione, especially by younger generations, was not so negative.
This life-and-death judgement also rests on a teetering tower of shaky assumptions. It assumes that health insurance companies — rather than providers — are chiefly responsible for high health care prices in America. In fact, as I wrote after Thompson’s murder, that’s just not true:
In fact, health insurers have consistently terrible profit margins; they are not giant pots of profit that could be used to pay for regular people’s treatment. Insurers are almost entirely a pass-through — it’s overpriced health services themselves that are responsible for the high cost of care in America.
Getting these things wrong can result in a lot of unnecessary violence, death, and conflict. Making excuses for terrorism and murder is a lot more consequential than deciding whether to steal a few lemons, and yet Piker and Tolentino are just as comfortable doing the former as the latter. Their mental models of economics and politics are a dense tangle of undergrad-level misunderstandings, leftist memes, and political talking points — victims of American progressives’ increasing epistemic closure. And yet they are arrogant enough to feel comfortable discarding all of society’s rules on a case-by-case basis in favor of their own personal calculations.
This is a bad direction for the progressive movement, the Democratic Party, and educated coastal elite culture in general. Yes, there are many arenas of human life in which modern society has overly constrained individual judgement with a thicket of rules and procedures. But stealing from stores, blowing up pipelines, and gunning down corporate executives are not good examples of situations where we need fewer rules and more individual judgement.
Economists have tried to estimate these costs.
For simplicity’s sake I’ve assumed that Bezos owns 100% of Whole Foods, which isn’t true. But this assumption isn’t important to the point I’m making.
I have only shoplifted one thing in my entire life: a copy of Abbie Hoffman’s book Steal This Book.
2026-04-23 05:01:40
Soft power is notoriously hard to quantify, but it’s difficult to argue that global soft power has been shifting steadily toward East Asia in recent decades. A few years ago I wrote a post about how South Korea became a cultural superpower on purpose, while Japan became one by accident:
The big question then was: When does China get its turn? China is a lot bigger than either Japan or Korea, so you might assume that if the world loves East Asian stuff, we might eventually get a Chinese Wave. So far, it’s been slow to arrive. In my post about the Chinese Century last year, I argued that China’s closed political system meant that its cultural influence would lag its technological and geopolitical might:
In the cultural realm, I expect China to be more isolated and less influential than America was…China is a deeply repressive nation, with universal surveillance, fine-grained media and speech control, and ubiquitous censorship. That’s the kind of society where only anodyne, cautious artistry can flourish, except in tiny subcultural pockets too small for the government to worry about…China’s leaders will also...continue to use the Great Firewall to “protect” Chinese people from the memes and ideas produced by the rest of the world. So artistic and cultural ferment will arrive in China only weakly, and with a lag. It will be orphaned from the global discussion…So while I expect China to produce some hit video games and big-budget movies, I don’t think it will do much to push the boundaries of culture, despite the individual creativity of its people.
In a follow-up post on Sinofuturism, I reiterated this prediction:
But as I noted in that post, the past year has seen the rise of breathless “I went to China” videos by American social media influencers. Although so far the videos are pretty shallow stuff — mostly just breathless videos and photos of China’s grandiose infrastructure — there’s a possibility it could be the start of the long-awaited Chinese Wave of soft power.
Fast forward a year, and some people are claiming the wave has begun. There has been a “Chinamaxxing” trend on English-language social media:
[T]he phenomenon of “Chinamaxxing” has swept feeds with videos of people sipping hot water, shuffling around the house in slippers and donning a viral Adidas jacket resembling historic Chinese fashion…These things, content creators joke, will help you “become Chinese” – reflecting a growing Western fascination with Chinese culture and aesthetics…“Morning routine as a new Chinese baddie,” one TikTok creator captioned a video in which he does a series of traditional Chinese exercises. Another video, viewed more than 2.4 million times as of late February, shows the creator boiling apples to make fruit tea – a supposedly old-school Chinese elixir for gut health.
And here’s Fortune:
On TikTok, a growing wave of Gen Z creators—American first, then European, then global—are declaring themselves to be in their “Chinese era.” They’re drinking hot water. They’re eating hotpot. They’re wearing slippers indoors and marveling at the electric buzz of Chinese city life. They’re calling it “Chinamaxxing.”…
Spend five minutes in the Chinamaxxing corner of TikTok, and a clear aesthetic emerges. The videos cluster into a few recognizable genres. There’s “wellness and longevity mode” — warm water with fruit, herbal teas, gua sha, early bedtimes, gentle morning exercises, all framed as ancient secrets to soft living. There’s “uncle core,” in which creators affectionately mimic Chinese retirees: tracksuits, sidewalk squatting, communal street-side beers, a whole visual argument against American hustle culture.
But despite all the stories about this trend (here’s Slate, NPR, the AP, and the BBC if you want some others), it doesn’t feel like the kind of soft power wave we’ve seen from Korea and other countries. There are few actual Chinese products or creations involved here. Western youngsters are not, in general, watching Chinese dramas or microdramas, listening to Chinese music, or playing Chinese video games. Adidas, with its viral Chinese-style jacket, is a German company.
The most trumpeted Chinese cultural products still don’t seem to be finding much purchase outside China. Ne Zha 2, often trumpeted as the highest-grossing animated film of all time, earned over 99% of its revenue in mainland China. Black Myth: Wukong, the most famous Chinese video game, got over three quarters of its Steam sales from China.1 Other than the rapper Skai Isyourgod, who has had several songs go viral on TikTok, there are not many Chinese musicians known in the West.
Instead, the “Chinamaxxing” trend seems to consist mostly of Western youngsters doing stuff they think of as stereotypically Chinese — drinking tea, doing exercises, etc. This is the kind of thing that might have gotten dinged as “cultural appropriation” eight or ten years ago. Today it’s more reasonably viewed as an expression of fascination and respect — but it’s fascination and respect from a great distance.
Then there are those videos of Chinese cities. I covered these in my post last year, but the trend is still going. There are also now a bunch of influencers who relentlessly post about how Chinese cities are the greatest. For example, there’s Jostein Hauge, an assistant professor at Cambridge who relentlessly posts about how China is ahead of the West in every regard. The alleged supremacy of China’s cities is a regular talking point:
Cynics have noted that these accounts are pretty one-note; it seems more like a deliberate publicity campaign, abetted by a few amateur enthusiasts, than an organic outpouring of enthusiasm for Chinese urbanism. The same is true of the continuing parade of breathless videos from Westerners traveling in Chinese cities — they tend to feature shots of the exact same grandiose train stations and architectural landmarks, or the insides of factories or restaurants or other buildings, rather than videos or photos of life at ground level.
That’s telling, because it stands in stark contrast to the videos and photos you tend to see from Tokyo, Paris, Hong Kong, or other popular older cities. And there’s a reason for that — as I wrote in my Sinofuturism post, Chinese cities were built incredibly quickly instead of growing organically over time. This means that they’re dominated by sterile gated tower blocks (called xiaoqu, or microdistricts), large surface streets, and huge shopping malls. There are relatively few walkable mixed-use streets lined with shops near to people’s homes. External shots of China’s newly built city centers tend to show vast concrete plazas and soaring towers — impressive, but fairly sterile.
In fact, there’s hard data to support the notion that the appeal of China’s megacities is still shallow. As of 2024, tourism to China was still way down from the years before the pandemic, and the number of Americans studying in China had collapsed even further:
Contrast this with Japan and Korea, which both get many more tourists from the U.S. than China does (despite being far smaller), and which have both seen a more complete rebound since the pandemic:
2025 numbers are harder to come by. Tourism to China is still recovering — up about 10% from 2024 — and American travelers are presumably part of this trend. But it’s still nothing compared to the tourism booms to Japan and South Korea, which are well above their pre-pandemic levels.
For all the breathless YouTube videos and glowing testimonials, Americans are still not going to China in large numbers, either to visit or to live.
So overall, the “Chinamaxxing” trend feels a bit fake and forced — the combination of a deliberate marketing campaign and social media influencers looking for a new niche. But there’s something else going on here as well — a statement about the declining appeal of America and the West.
I think Fortune really puts its finger on something here:
The subtext of every “very Chinese era” video isn’t really about China. It’s about what young Americans feel they’ve been denied. Chinamaxxing romanticizes things that feel structurally out of reach at home — compact, affordable-looking apartments; public transit that works; streets safe to walk at night; multigenerational households as an antidote to loneliness; communal meals as an antidote to atomization. The comparison is implicit but unmissable: they have this, and we don’t…
Slate‘s Nitish Pahwa captured the emotional logic cleanly: “You told us we couldn’t have a high-speed railroad and universal health care, and it turns out they have it across the street! I’m going to live at their house now!”…Shaoyu Yuan, a scholar who studies Chinese soft power, told NPR the trend operates on two tracks at once: one that “weakens American narrative authority by highlighting content that highlights U.S. dysfunction,” and another that “makes China look more attractive.”…
The American century was built on the world’s desire to be American…The question the turbulent 2020s is forcing is a simpler and more unsettling one: what happens when the generation that was supposed to inherit the American promise looks around at their student loans, their rent, their medical bills, and their crumbling train stations — and decides they’d rather be something else?
And CNN gets it too:
[E]xperts say the [Chinamaxxing] trend reveals deeper undercurrents like dissatisfaction among many Americans with life at home – from political turmoil, gun violence, immigration crackdowns and persistent racial tensions. All this has dulled the veneer of the US, driving curiosity for American youths to see what life is like on the other side…[I]t’s no coincidence the trend comes amid a broader decline in the US’ global image…
[V]ideos showing vertiginous skylines from Chinese metropolises…have gone viral for depicting a futuristic vision of urban life, replete with seemingly clean streets and low levels of violent crime.
In other words, American youngsters idealizing China — without actually engaging with China or knowing much about it — is really about expressing their dissatisfaction with America.
Chinamaxxing is mostly just Americaminning.
That mirrors a larger global reaction. Donald Trump’s tariffs, threats against allies, and reckless wars have turned most of the world against America. Traditionally, confidence in U.S. leadership was higher than in Chinese leadership, but this has reversed since Trump’s election:
China isn’t especially popular itself, but in the age of Trump, it looks to some people like the only natural alternative:
In America, Trump’s extreme unpopularity among the youth is probably helping to drive the Chinamaxxing trend.
But it’s not just Trump and the GOP. Stories about Chinamaxxing consistently mention the safety, cleanliness, and low crime rates of Chinese cities as part of the country’s appeal. And pro-China influencers repeatedly trumpet this advantage, often showing pictures of China’s immaculate new developments with pictures of homeless encampments in America.
This is no Potemkin comparison. America really does have much worse crime and public order than other countries, including China:
There are a number of reasons for this, but progressive ideology takes much more responsibility than MAGA insanity. Blue cities’ tolerance of public homelessness and drug use, the “progressive prosecutor” movement’s permissive approach toward crime, and the consistent failure of progressive local governments to allow housing construction all contribute to the breakdown in public order that has left America’s flagship cities feeling dirty and unsafe.
It bears saying that despite the safer cities, the superiority of life in China over life in America is more myth than reality. Jacobin, the socialist magazine, recently published a good article by Daniel Cheng debunking the idea that China is a youth paradise:
Most people in China suffer from similar social and economic crises that afflict Americans today. The United States’ extreme income inequality is well-known, but China’s is comparable. After accounting for taxes and redistribution, China becomes even more unequal because it falls under the US’s (very low) standards for redistribution. While Chinese inequality has gradually shrunk over recent years, this is mostly due to compression between the top and middle of the income distribution. Those in the bottom 30 percent have been left in the lurch…
[W]hile American higher education is exorbitantly expensive, the education affordability crisis in China is even more severe. Parents have to pay for high school, and tutoring is a de facto necessity to keep up with demanding curriculums…The bottom quintile of Chinese families spend a massive 57 percent of household earnings on their children’s education…
[H]omelessness and extreme poverty are also major problems in China. Chinamaxxing influencers are simply blind to them because the government has successfully criminalized homelessness and driven the “low-end population” out of sight…Age discrimination in hiring is legal in China…D]ismissal rates rise dramatically after workers turn thirty-five…[A]n unexpected layoff can permanently condemn someone to underemployment in the gig economy.
And youth unemployment is far worse in China than in America, even after the government redefined the numbers a couple of years ago to make it look smaller:
This is probably why we don’t see a lot of American “Chinamaxxers” put their money where their mouth is. It’s a lot easier to put on a bathrobe and eat some dumplings and pretend to be a Chinese uncle on TikTok than it is to actually move to China and make a living there.
In fact, China’s leaders probably don’t care. They’re not especially interested in getting American Zoomers to move to Shenzhen or Shanghai. Their own publicity campaigns, including all the gloating over the parlous state of American cities and the constant parade of photos of fabulous new infrastructure, are probably aimed at Chinese scientists and engineers living abroad. And in fact, this campaign is succeeding to some degree, helped along by Trump’s anti-immigration jihad and progressives’ mismanagement of big cities:
For decades…Many of China’s best and brightest saw the U.S. as a land of boundless opportunity underpinned by robust rule of law…Today, America’s allure is fading. More elite Chinese youths, businesspeople and scientists are gravitating back home. Some who have returned say they are turned off not only by the U.S.’s hardening immigration enforcement, but also by its faulty infrastructure, gun violence and living costs. Back in China, many cities have grown cleaner and more livable in recent years, linked together by efficient subways and high-speed trains…
In 2021, more than 1,400 U.S.-trained Chinese scientists left American jobs for roles in China, a 22% jump from the previous year, according to a survey published by Asian American Scholar Forum, an advocacy group. Most China-born Ph.D. graduates are still choosing to stay in the U.S., with close to 80% saying they intended to remain in 2024, according to the most recent available survey data from the National Science Foundation. But high-profile departures have continued steadily…
Frequent changes in immigration rules, combined with homelessness and perceptions of high crime rates in some of the coastal cities where Chinese immigrants tend to live, are also leading people to reconsider the appeal of the American dream, according to Chinese people who have spent time in both countries.
American leaders should be a lot more worried about losing Chinese talent than about Gen Z “becoming Chinese”.
All that having been said, I do see a few glimmers of real, organic Chinese cultural appeal. One is the rise of the Chinese micro-drama or duanju. These are serial shows with scripted 1-2 minute episodes, shown in a vertical scrolling feed. It’s a truly new art form, perfect for the age of TikTok and AI. The Economist explainer posits that these dramas have flourished precisely because the flood of content is too large for China’s censors to monitor and eviscerate:
Artsy film critics are unlikely to be impressed by China’s micro-dramas. Even so, the roughly two-minute episodes, which cram soap-opera plots into a short-video format, are wildly popular. Watched almost exclusively on mobile devices, viewers can scroll mindlessly through episodes as they would clips on TikTok. Revenue in China from micro-dramas is projected to nearly double this year…Chen Ou, the founder of Jumei Film Base, a leading micro-drama studio in Zhengzhou, says his company is starting to monetise its star power with live-streaming sales…[N]early all large tech companies in China are snapping up rights to micro-dramas…Many local governments are investing in micro-drama studios…
[F]or micro-dramas, which are chock-full of the kinds of taboo topics and comedic violence that usually irk censors, industry insiders say the sheer volume of content has resulted in looser or fewer checks.
This reminds me of how manga and anime developed in Japan — it flew under the radar of the conservative oligopolies that dominated movies and TV in the postwar period, making it a haven for political radicals,2 sexual deviants, and artistic auteurs.
It’s still early days, but Chinese microdramas are starting to catch on in America. This is from Wikipedia:
ReelShort and DramaBox, the two largest Chinese short-drama platforms operating overseas, entered the U.S. market in 2022 and 2023, respectively. By August 2025, DramaBox had surpassed 100 million downloads on Google Play alone, while maintaining an average of 44 million monthly active users. Meanwhile, ReelShort surpassed 370 million downloads and raked in $700 million in revenue. By 2025, the U.S. had become the single largest revenue market outside China for vertical drama, generating approximately $58 million in monthly in-app revenue and an estimated $1.3 billion for the full year. As of 2025, ReelShort and DramaBox are the top two duanju platforms in terms of downloads and active users.
Retail is a second strong point. As China’s economy diversifies and consumption rises, some Chinese shops are also starting to make inroads into cities in America and around the world. Chagee, Heytea, Mixue, and Luckin Coffee are high-quality drink shops that seem to have real and immediate appeal (Chagee is my personal favorite).3 The stores Miniso and Popmart are appearing all over global malls, selling toys, collectibles, and various other knicknacks. Chinese fashion is starting to make inroads overseas as well.
Food and design are inherently apolitical, so it’s a lot easier for Chinese creativity to reach the world through these items than through movies, TV, or music.
A third bright spot is the city of Chongqing. Unlike the sterile, formulaic videos of Shenzhen, the videos of Chongqing’s urban canyons and cyberpunk streets feel authentic and exciting:
Even the videos complaining about the difficulty of commuting to work showcase an urban landscape so unique that it has captivated much of the world:
In fact, tourists are actually flocking to Chongqing, to see the “cyberpunk city”. One reason for Chongqing’s appeal is that unlike Shenzhen or other “Tier 1” cities, Chongqing has more “old streets” adjacent to the newly-built downtown areas, giving it some of the kind of mixed-use walkable density that cities like Hong Kong and Tokyo have. Personally, I’d love to spend some time in Chongqing, while Shenzhen looks like somewhere I’d only go in order to tour some factories and see some robots.
So in fact, I do see some real signs of China’s soft power growing organically — finding ways to flow around the walls of censorship and official marketing campaigns, exposing outsiders to a more real, raw, authentic China. It would be astonishing if a newly developed country of 1.4 billion people didn’t have plenty of natural, organic appeal. Now, despite the best efforts of the country’s masters, that appeal is starting to show itself.
Marvel Rivals is made by a Chinese studio, but the IP is just Marvel superheroes.
The most famous right-wing anime creator is probably Nishizaki Yoshinobu of Space Battleship Yamato, while the most famous left-wing creators is almost certainly Miyazaki Hayao (of Ghibli fame). There are many other examples.
It’s kind of crazy that Taiwanese boba chains never expanded and became famous overseas.
2026-04-21 13:30:49
Greg Ip of the WSJ is one of my favorite economics writers, and you should always read what he writes. But in a recent post about manufacturing, I think he gets the main narrative wrong. Greg writes that America is in the middle of a “manufacturing revival”, which his headline writer calls a “stealth manufacturing boom”:
You won’t hear this from either critics or fans of President Trump’s tariffs, but there’s a manufacturing revival going on…Critics have focused on the fact that factory jobs have steadily slid since Trump took office last year…Unlike jobs, though, actual factory output has risen briskly, and may even be picking up speed. This stealth recovery, though, isn’t because of tariffs. Instead, credit goes to the most basic economic force of all: demand. The U.S. is good at making things that happen to be in big demand right now.
As a macro story, “AI boom cancels out tariffs” isn’t a bad description of the U.S. economy right now — including the manufacturing sector. But it’s just not right to say that the former is winning out when it comes to manufacturing.
Let’s look at the data. Here’s Greg’s evidence for the boom:
First, a few data points. Since January 2025, manufacturing jobs have indeed fallen by about 100,000 workers, or roughly 0.6%. In the same period, though, manufacturing production rose 2.3%, and manufacturing shipments, unadjusted for inflation, climbed 4.2%.
Regarding manufacturing shipments…why wouldn’t you adjust for inflation? Inflation is important! Shipping more dollars of stuff doesn’t indicate a boom if a dollar is worth much less. As it happens, there’s no price series that exactly corresponds to the data series for manufacturing shipments, but we can probably approximate it by using the producer price index for manufacturing. Here’s what we get when we do that:
Do you see a “stealth manufacturing boom” since January 2025? I sure don’t. What I do see is the continuation of a decades-long stagnation in American manufacturing.
Let’s look at some other measures. Here’s industrial production in the manufacturing sector:
I guess if you squint very hard, you can see a slight rise since the end of 2024. But really this is just the same story as before: American manufacturing has been stagnating since 2008.
Let’s look at gross manufacturing output, adjusted for output prices:
Same exact story, only this is quarterly data and the last quarter of 2025 looks bad.
2026-04-20 13:07:55
I’ve long been an industrial policy enthusiast. My favorite popular nonfiction book is Joe Studwell’s How Asia Works, a synthesis of decades of research about the economic miracles in Japan, South Korea, and Taiwan. I wrote a whole series of posts examining the successes and failures of various developing countries through the lens of Studwell’s ideas:
There are a bunch of other good books and papers about industrial policy that I’d recommend if you’re interested in the topic. These include Alice Amsden’s Asia’s Next Giant (about South Korea), Robert Wade’s Governing the Market (about Taiwan), “The New Economics of Industrial Policy” by Juhász et al. (2023), and the papers of the Industrial Policy Research Group.
Around the same time I discovered the industrial policy literature, the consensus was shifting within the big economic development agencies (the World Bank and the IMF). Whereas in previous decades, these organizations generally recommended against government meddling in the economy’s industrial structure, they’ve recently started to consider the kind of interventionist policies that Studwell recommends. In 2019, the IMF’s Reda Cherif and Fuad Hasanov wrote a paper called “The Return of the Policy That Shall Not Be Named: Principles of Industrial Policy”. They conclude that a Studwellian approach, if executed competently, can help a developing country grow faster than it would from just letting the market take its course:
We argue that the success of the Asian Miracles is based on three key principles that constitute “True Industrial Policy,” which we describe as Technology and Innovation Policy (TIP)…(i) state intervention to fix market failures that preclude the emergence of domestic producers in sophisticated industries early on, beyond the initial comparative advantage; (ii) export orientation, in contrast to the typical failed “industrial policy” of the 1960s–1970s, which was mostly import substitution industrialization (ISI); and (iii) the pursuit of fierce competition both abroad and domestically with strict accountability[.]
I was happy to see this shift — not because I’m certain that this sort of industrial policy is the secret to growth, but because I think it deserves to be in the discussion. So I’m also happy to see the World Bank now following suit, with a new report (or “book”) by Ana Margarida Fernandes and Tristan Reed entitled “Industrial Policy for Development: Approaches In the 21st Century”. The authors argue that although classic policy recommendations — macroeconomic stability, education, health, infrastructure, etc. — are still good, industrial policy can often help when layered on top of those basics.
I think it’s great to see the stigma about industrial policy going away. Not because this will lead to a wave of countries trying out such policies — that’s already happening — but because it’ll lead to more researchers taking the idea seriously. Dismissing the whole idea of industrial policy out of hand — as the World Bank and others did in the 1990s — is simply a policy of self-imposed ignorance. Countries need smart researchers to help them figure out which kind of industrial policies work and which don’t.
But as general interest in the topic has grown, my thoughts on industrial policy have also become more nuanced. As I’ve read more and written more about the idea, and as I’ve watched current events unfold, my thinking has evolved beyond “This is an important idea that deserves to be taken seriously”. So I thought I’d write a post briefly summarizing that evolution.
One thing I always try to specify when I talk about “industrial policy” is that this term can mean a ton of different things. Most people think of it as government promotion of specific industries — autos, or electronics, or maybe just manufacturing in general. Others see export promotion — which is more about where products are sold than about which products they are — as the key industrial policy. Some people see FDI promotion as industrial policy; others don’t.
Even if we just focus on what you might call “classical” industrial policy — government promotion of specific industries — there’s a huge range of types of policies you might use. Protectionism — tariffs, import quotas, etc. — is often regarded as a tool for promoting manufacturing. That’s very different from export promotion. Direct government subsidies for favored industries are a common strategy — and one that’s on the rise throughout the world — but subsidies weren’t really used by many classic “industrial policy” success stories like Japan and Taiwan.
It’s kind of crazy that this huge diversity of policies and goals coexists under one single buzzword. It makes conversations about the topic difficult if not outright impossible. When people yell at me that “industrial policy is bad” or “industrial policy always fails”, I have no idea whether they’re talking about protectionism, or industrial subsidies, or government intervention in general.
If you read the IMF and World Bank papers on industrial policy, you can see that these distinctions really matter. The IMF paper explicitly contrasts export promotion with import substitution (protectionism), claiming that the former is very promising while the latter is usually bad. The World Bank report supports industrial parks and market-access assistance, while casting doubt on the effectiveness of subsidies and tariffs. In other words, even the people advocating industrial policy think that certain kinds are good and other kinds are bad.
In 2012 or even 2018 it made sense to talk about “industrial policy” as a single thing, because it basically just meant that researchers and policymakers should take a look at a bunch of different ideas that had been beyond the pale of orthodoxy in previous decades. But now that researchers and policymakers have actively started to look into those ideas — and to implement them on a large scale — it no longer makes sense to talk about “industrial policy”. We need to be more specific.
In my series of posts on developing-country industrialization, I found a subset of countries that had clearly succeeded with a very simple, seemingly replicable formula: promoting FDI in manufacturing. I singled out Poland and Malaysia as countries that got rich in recent years simply by encouraging multinational companies to put their factories and research centers there:
Poland, especially, has succeeded amazingly using the FDI strategy. A lot of industrial policy enthusiasts — Ha-Joon Chang, for example — used to argue that developing countries should build their own domestic “national champions” instead of relying on foreign capital and know-how. That’s what Japan and Korea did, it’s true. But you’d probably be hard-pressed to name a Polish brand. And yet Poland’s economic performance since the end of communism has been absolutely stellar — it’s about to surpass Japan’s living standards, and is now even starting to catch up to Korea:
Interestingly, FDI was also central to the development strategies of Singapore and Ireland — two of the richest countries on the planet. You’d also be hard-pressed to name a Singaporean or Irish brand. And China’s approach before the early 2010s — during its fastest era of growth — centered much more on FDI than on subsidies or on the promotion of national champions in general.
When you look at poor countries that got rich since World War 2 by building national champions, the list is pretty short — there aren’t a lot of South Koreas out there. But the list of countries that got rich, or nearly rich, by promoting FDI is getting longer by the decade. So while I wouldn’t discount the Korea strategy, I’m leaning toward the idea that the Poland approach is a lot easier to get right.
Why would it be easier to get rich through FDI than by building your own brands? I can think of a couple of reasons. For one thing, FDI is less risky — instead of having the government pick winners, you let multinationals try building a bunch of things in your country. It’s a way to let the market discover comparative advantage, while the government simply assumes that some sort of competitive advantage exists within the broad category of export manufacturing.
FDI promotion also requires good institutions. If you’re trying to get German companies to build their factories in your country, you probably need to have the kind of property rights that German companies are used to dealing with. Poland became the workshop of Europe by forcing itself to shed its communist-era institutions and become more like the EU.
Note that the new World Bank report focuses on industrial parks as its favorite industrial policy. Industrial parks are a key part of the Poland/Malaysia/Singapore/Ireland strategy — a tool of FDI promotion. I predict that for developing countries, this approach will become more recognized as the closest thing we have to a universal push-button solution for getting out of poverty.
Right now, much of the economic discussion in the U.S. is about AI — how to promote it, how to enable it, and how to regulate it.
This is classic industrial policy. It’s picking a winner! If you rewrite regulation to allow more construction of data centers, or if you try to recruit top AI researchers, or if you use export controls to prevent a competing company from seizing the initiative in AI, or if you do any special thing to promote the industry, you are picking AI as a winner. (The fact that almost every country is picking AI as a winner doesn’t change that fact — there was a time when every country thought it was essential to have its own auto industry.) And I don’t see a lot of free-market economists disagreeing with this pick.
Nor is this the first hot new technology that the American government has specifically encouraged within my lifetime. The Telecommunications Act of 1996 selectively deregulated the internet sector, because everyone agreed that the internet would be economically important. The National Science Foundation subsidized the internet’s initial buildout, as did the High-Performance Computing Act of 1991. State governments provided telecom companies with tons of subsidies to build out wireless networks, and so on.
We picked the internet as a winner, and it was a winner. Notably, very few of the free-market enthusiasts who criticized industrial policy in developing countries raised the alarm about the U.S. picking winners in the internet age. The industrial policies we used to pick that winner fell under the rubric of things that economists had already admitted that rich countries ought to be doing — infrastructure, deregulation, and R&D promotion.
But for rich countries, technology policy is industrial policy. The emergence of a major new technology puts a developed country in the position of a developing country in a narrow, limited sense. A poor nation lacks a car industry, an electronics industry, a machinery industry, a shipbuilding industry, and so on. America in 1985 lacked an internet industry, and America in 2022 lacked an AI industry, because those technologies had just been invented.
So I think rich countries actually have a lot to learn from developing countries when it comes to technological revolutions. Building something that no one has ever built before is a task that shares a lot in common with that of building something that your country has never built before. It’s not the exact same problem, but it’s related. So the people trying to figure out how to make America competitive in AI should study the South Korean Heavy and Chemical Industry initiative, or Taiwan’s promotion of TSMC, or METI’s promotion of Japan’s auto industry.
In the last few years, China embarked on an unprecedented policy experiment. The Chinese government has subsidized high-tech manufacturing industries to a far greater degree than any other country in history. This has led to a boom in high-tech manufacturing, increases in China’s global market share in those industries, a huge surge in Chinese exports (known as the Second China Shock), and to the emergence of some Chinese national champions like BYD.
But we’re definitely starting to see the downsides of this experiment. First and foremost, paying dozens of companies to all make the same products ends up creating brutal price wars that compete profit margins toward zero:
Margin compression deprives companies of R&D budgets, which must then be substituted by government research. It also leads to deflation, which exacerbates bad debts, burdening households, corporations, and the financial system.
China’s leaders realize these issues. Cutting industrial subsidies will be politically difficult, especially because the country is still suffering low demand from the bursting of its real estate bubble. But they’re starting to do it — for example, the government is phasing out subsidies for trading in old cars, leading to a predictable plunge in new car sales.
According to the standard “export discipline” playbook — which Studwell articulated, and which the 2019 IMF paper on industrial policy endorsed — this is exactly what you’re supposed to do. A wave of subsidies for export manufacturing results in a Cambrian explosion of manufacturers; the brutal global market selects the best of these; the government withdraws subsidies and lets all the inferior manufacturers die, while the national champions live and flourish and experience healthier margins.
This may work for China, if subsidies can successfully be withdrawn. But it’ll leave behind a major problem: bank debt. By some estimates, the bulk of China’s unprecedented industrial subsidies are actually in the form of artificially cheap bank loans:
This means that if and when China forces most of its subsidy recipients into bankruptcy — just as Joe Studwell and the IMF say you’re supposed to do! — it’ll result in a huge wave of bad debts. Those bad debts will sit on the books of Chinese banks, right alongside the existing mountain of bad debts from the real estate bust.
If you believe that the Chinese state is unified, and that Chinese banks and the government are the exact same thing, and that the government simply directs borrowing without regard to profit and loss, then maybe you think bank balance sheets just don’t matter in the People’s Republic. But if you think bank managers in China have any discretionary power over lending — how much, or to which companies — then you have to think that having the bank’s books crammed with bad debts will have some kind of effect.
In particular, Chinese banks will be heavily incentivized to “evergreen” loans to zombie companies that they’ve already lent to. Those subsidized lifelines will delay the day of reckoning, allowing banks to pretend their balance sheets are healthier than they are, while diverting financing from younger, healthier companies. This is probably what happened in Japan after its bubble burst in the early 1990s.
The standard model of industrial policy — temporary export subsidies — imagines these as being provided at taxpayer expense. But if financial intermediaries are important — and most rapidly industrializing countries rely heavily on banks rather than on markets for financing — then it’s not so simple. A wave of corporate failures may be healthy for margins, but could cause years of low growth as banks are paralyzed with fear and tethered to zombie companies. And it’s not clear that state ownership and control of the banking system is an effective remedy, because even in a communist system, middle managers are still probably afraid for their personal careers (or their lives) if their institutions perform poorly.
This means we shouldn’t hail the Chinese industrial policy experiment as a success until we wait a few years. More generally, I think discussions of industrial policy tend to downplay the role of financial systems, and banking systems in particular. I plan to write a lot more about that soon.
2026-04-18 04:45:24
The other day on X, leftist Twitch streamer Hasan Piker got into an argument with a commentator known as Swann Marcus. Marcus had scoffed at the notion of Piker trying to connect with blue-collar workers. In retaliation, Piker claimed that Marcus had written a “how to” manual about sex tourism in Asia:
As you can see, Community Notes quickly corrected Piker. The person who wrote the “how to” articles about sex tourism was actually a rightist influencer named Matt Forney. Apparently, some leftists had — intentionally or unintentionally — gotten Marcus mixed up with Forney because Marcus had made a documentary about Burmese missionaries. But Piker refused to delete his accusation against Marcus, even after being informed of his mistake.
Recently, a video resurfaced of Hasan Piker launching a profanity-laced tirade against a Vietnamese refugee named Bach Hac. The refugee complains of suffering under Vietnam’s communist regime. Piker responded by saying “Fuck you old lady. Shut the fuck up you stupid idiotic old lady. Suck my dick, old lady. God damn, Yo, fuck this refugee”. He then tells her to go back and live in “South Vietnam”. Piker later deleted the stream, but has never apologized.
During a recent speech at Yale, Hasan Piker declared that “The fall of the USSR was one of the greatest catastrophes of the 20th century.” This is an almost direct quote from Vladimir Putin, who said in 2005 that “The demise of the Soviet Union was the greatest geopolitical catastrophe of the century.” This would be news, of course, to the countries that fought to escape Soviet communist rule, and whose economies flourished after the USSR’s collapse.
Recently, Ezra Klein wrote a New York Times op-ed urging Democrats to open a dialogue with Hasan Piker instead of trying to freeze him out of the party. The Times gave Klein’s post the headline “Hasan Piker is not the Enemy”. On a podcast, Piker then declared that Hamas is “1000 times better than Israel”. The New York Times promptly changed the headline of Ezra Klein’s post:
This kind of behavior is par for the course for Piker. Jeremiah Johnson had a good roundup back in December:
Some excerpts:
When questioned about China’s lack of LGBT rights, Hasan said the country is ‘gay as hell’ and defended the CCP banning gay dating apps as a ‘privacy issue’…He went on state television to talk about how great China is, and dismissed criticism of the CCP as ‘rumors’ and ‘misunderstandings’ and ‘lies’ that he wanted to help correct…He’s downplayed the genocide in Xinjiang, calling the concentration camps there ‘re-education’ camps and claiming they’re all closed now.2 He’s said that Chinese colonialism in Tibet was a good thing…
He’s defended the idea of socialist re-education programs explicitly. He wishes the USSR had won the Cold War, he’s cool with Hezbollah, he thinks the Houthis are awesome and he’s used his platform to give a voice to literal, actual terrorists. He defended Russia’s illegal annexation of Crimea, and while he doesn’t outright defend Russia’s 2022 invasion of Ukraine he sure does spend a lot of time blaming the American government for somehow starting the conflict. He said that America deserved 9/11. He repeats neo-Nazi talking points about the Holocaust. He promotes political violence.
It should be pretty clear at this point what kind of guy Hasan is. His ideology is standard leftist “campism” — the idea that America is bad, and that any country or group that opposes America is therefore good. His style is that of a typical “shock jock” radio host — he says extreme and vulgar things in order to get attention and excite his listeners. It’s basically the same shtick that Michael Savage used back in the 2000s, but with the right-wing politics swapped out for Cold War-era anti-Americanism.
And yet Democrats and progressives are starting to treat this radio shock jock as an important voice in their party. Here’s what Ezra Klein had to say in his NYT post:
[P]ick over Piker’s years of streaming, and you can find offensive things he’s said.“…Streamer has said offensive things” isn’t really a news story…The impulse to cut off those with whom we disagree reaches far beyond Piker…It sits at the heart of cancellation as a political tactic. It relies on a belief in the power of gatekeepers that might have been true in an earlier age but no longer reflects the way attention is earned and held. Tucker Carlson was ejected from Fox News and grew stronger on X and YouTube. Nick Fuentes was banned from major social media platforms and gathered strength in the shadows. Trump went from being banned by every major social media platform to retaking the presidency.
According to Ezra’s line of thought here, the Republican Party and mainstream conservative institutions like Fox News would be smart to embrace Tucker Carlson and Nick Fuentes — and therefore the Democrats and mainstream liberals would be smart to embrace Hasan Piker.
Let’s think through the implications of that line of reasoning. If the mainstream should always include extremists in the conversation — if gatekeeping is useless and counterproductive — then all you have to do in order to force extremist ideas into mainstream discourse is to grab some attention. If you get a Twitch stream or a podcast and you start screaming that the Holocaust was fake, or that the USSR was good, etc., and you manage to get a decently big audience by doing this, you should now have a say in how the country is run.
The obvious problem with this idea is that it creates a competitive market for extremism. If being more extreme and profane and outrageous than the next guy is what gets attention, and if attention is what gets you influence in the Democratic Party or the GOP, then there’s a huge incentive for would-be influencers to be as extreme and outrageous as possible. Everyone will just keep one-upping their competitors until all the right-wing commentators are Hitler fans and all the left-wing commentators are Stalin apologists.
One could argue that this is exactly what has happened on the right, with the ascent of Carlson,1 Fuentes, Candace Owens, and similar rightist extremists. The Heritage Foundation’s embrace of Tucker Carlson and Nick Fuentes last year was very similar to Ezra Klein’s embrace of Piker; Heritage declared that although they disagreed with the ideas of Carlson and Fuentes, those commentators were so popular that they had to be allowed inside the mainstream debate.
But there’s another, less obvious problem with the idea of mainstreaming popular extremists. In the internet age, the bar for what counts as “popular” has been dramatically lowered. In the 1990s, Rush Limbaugh had between 15 and 27 million weekly listeners for his radio talk show. Nowadays, Tucker’s shows get about 1 million listeners. The internet has fragmented audiences, so that even the most popular commentators get a lot less attention than they used to.
This means we lower the bar for who we think of as “popular”. Hasan Piker’s stream gets about 6.5 million hours of attention per week. That’s about 10% of the viewership of Fox News’ Sean Hannity, and about a third of CNN’s Anderson Cooper. But Hasan is considered far and away the biggest political streamer, because streamers who talk about politics a lot just tend not to be that popular. Podcast audiences are harder to compare, but if we assume that about half of podcast downloads eventually get listened to, then Hasan would probably be in the top 10 political podcasters in the U.S., but not in the top 5. Joe Rogan — who, as Ezra points out, is not consistently conservative, but who supported Trump in 2024 — has many times Hasan’s audience.
International audiences lower the bar even further; only about half of Hasan’s audience is American. Ezra Klein is ready to embrace Piker as an important voice within the Democratic coalition based on his popular appeal, but a significant fraction of that appeal is to audiences who can’t even vote in American elections.
On top of all that, Piker gets a boost because as a left-wing talk show host, he’s a bigger fish in a smaller pond. Liberals tend to read the news, while conservatives are more likely to watch or listen to it. This is why there are relatively few right-wing writers, so the ones who rise to the top of the heap tend to be of lower quality. This is also why most of the top political podcasters, radio hosts, and TV commentators are right-wing. And this is probably why Hasan Piker can become an important influencer in the Democratic Party even as he declares he wouldn’t vote for Gavin Newsom over JD Vance.
All these structural factors can help explain why a cruel, vicious man like Hasan Piker, who supports totalitarian governments, spreads blatant lies about his critics, advocates political violence, makes excuses for terrorists, and vilifies the Democratic Party, can manage to shock, shout, and bully his way into being respected by mainstream progressives like Ezra Klein.
But there’s another important factor here, which is the content of Piker’s message. Whereas the leftist shock jocks of the previous cycle — self-described “dirtbags” like Chapo Trap House — tended to focus on economic issues, Hasan focuses squarely on foreign policy. And his main foreign policy focus is opposition to Israel.
Anti-Zionism is still taboo within the Democratic Party establishment, because of the Palestine movement’s association with antisemitism. But as Israel has done more and more bad things, grassroots anti-Israel sentiment has spread on both sides of the political aisle. In his post about Piker, Ezra talks a lot about the importance of including anti-Israel voices in the Democratic conversation:
We are living through a rupture in both the meaning and the reality of Israel. A Gallup poll from February found, for the first time, that more Americans sympathized with the Palestinians than with the Israelis. Among Democrats, the gap was overwhelming, with 65 percent who sympathized more with the Palestinians and 17 percent with the Israelis. The difference, as I have argued, is largely generational: Older Americans still view the Israelis more sympathetically, but among Americans ages 18 to 34, 53 percent sided with the Palestinians and 23 percent with the Israelis. This is new. Before 2023, young people and Democrats were more likely to side with the Israelis.
This is not the result of an international psy-op or a profusion of memes. The Israel that young people know is not the Israel that older people remember. It responded to the savagery of Oct. 7 by flattening Gaza in a brutal campaign that killed at least 70,000 Gazans, taking control of more than half of the territory and herding Gazans — more than two million people — into the remainder. Life there remains hellish. Israel has made hopes for a two-state solution fanciful by slicing the West Bank up into Israeli settlements and abetting constant settler violence and keeping a boot on the throat of the Palestinian Authority. It has used the Iran war as an opportunity to launch an invasion of Lebanon, displacing more than a million people and announcing that as many as 600,000 won’t be allowed to return to their homes until Israel decides otherwise. The Knesset just voted to legalize hanging as a punishment for Palestinians who are convicted of killing Israelis in terrorist attacks…
Israel, as it is behaving today, and as it is constructing itself for tomorrow, is incompatible with any normal understanding of liberal values…Anti-Zionism is rising as a response to what Israel is doing.
Ezra is right about Israel’s plummeting popularity in America:
And Ezra doesn’t even mention the fact that Netanyahu helped convince Trump to launch the disastrous Iran War, which has resulted in high oil and gas prices. Israel hasn’t just violated human rights and international norms against territorial conquest — it has been a highly problematic ally for the U.S., and is quickly becoming an outright liability.
American public opinion is slowly but inexorably turning; Ezra sees this, and is getting out in front of the shift. To some degree, he’s using Hasan Piker’s popularity, such as it is, as an excuse to advocate for a deeper, substantive policy shift — a turn away from staunch, reflexive U.S. support for Israel.
I view this as a mistake. If mainstream liberals want to drop their support for Israel, they should just do it on the merits. They should not bring in a guy like Hasan Piker to do it for them, because then they have to accept all the baggage that Piker brings with him. Mainstreaming Piker means that Democrats have to take seriously the notion that the Soviet Union were the good guys in the Cold War, that China and Russia are the good guys in the world today, and that America itself is — and has always been — an Evil Empire.
That message is likely to resonate poorly with many voters, especially older ones who remember a time before Trump and before the War on Terror. Pride in America has fallen significantly since Trump came on the scene, but that doesn’t mean the solution is to tell Americans that their country is the Great Satan. I doubt that Democrats and Independents want to destroy the U.S.; I think they want to restore and redeem it. Piker’s message is inimical to that goal.
And mainstreaming Piker and his anti-American ideology will inevitably lead to a deterioration in the quality of the people the Democrats elect and appoint to high office. This has absolutely happened with the Republicans. In 2024, the MAGA movement embraced the idea that America is an Evil Empire, spreading woke values around the world, and that we should realign ourselves with Russia. This led to the appointment of Tulsi Gabbard as the Director of National Intelligence, the end of most American support for Ukraine, the right-wing turn against Europe, and to the tearing up of most of America’s alliances. It notably did not lead to fewer American wars; it just led to dumber, more evil wars.
Why should Democrats willingly walk down this same path? Do we really want the next Democratic administration to have staffers and appointees who think the Soviets should have won the Cold War? Are we prepared to realign America towards China, as Trump has realigned us toward Russia, and for the backlash this would generate?
Maybe so, but I hope not. Instead of embracing anti-American shock jocks like Hasan Piker, mainstream liberals should simply levy their own criticisms of Israel instead. You don’t have to believe America is evil and communist empires are virtuous in order to say that Israel has become crueler, more totalitarian, and less reliable as an ally. Those arguments are easy to make within the framework of liberalism, instead of by embracing someone who says he wants a “post-liberal America”.
I’ve sat here for years and watched the Republicans embrace their worst extremists. I’ve watched as those extremists turned the right away from mainstream conservatism, and drove them to embrace insane, self-destructive ideas. I don’t want to see the Democrats do the same. Maybe the incentives of the social media age are just too powerful, and every major party is destined to be forced down this road. But I say we should keep trying to resist the extremist impulse for as long as we can.
Note that Carlson used to be a mainstream conservative, and pivoted to rightist extremism when it gained him more views. This strongly suggests that it’s the incentives of the ecosystem, rather than the personal preferences of media personalities themselves, that drives the overall slant of popular commentary.
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