DeepSeek, And Ye Shall Find.

 The East Is Red: Journalists and commentators are referring to the sudden and disruptive arrival of DeepSeek as a second “Sputnik moment”. (Sputnik being the name given by the godless communists of the Soviet Union to the world’s first artificial satellite which, to the consternation and dismay of the Americans, they successfully launched into space in October 1957.)

“DEEPSEEK” is a pretty good name for an artificially intelligent Chinese chatbot. Not as good as Douglas Adams’ “Deep Thought”, which, as all readers of A Hitchhiker’s Guide to the Galaxy know, was the name of the super-computer tasked with answering the Ultimate Question – i.e. the meaning of “Life, the Universe, and Everything” – and which came back, 7.5 million years later, with the less-than-helpful, “42”.

That said, the numbers associated with the arrival of DeepSeek are nothing if not compelling. One trillion, for example, is the number of US dollars knocked-off the collective value of the companies listed on the “tech-heavy” Nasdaq index. $US600 billion of that trillion is attributable to the plummeting value of America’s leading AI chip manufacturer, Nvidia – the greatest single one-day loss ever recorded by a US listed company.

To rub salt in the American tech-lords’ financial wounds, the Chinese creators of DeepSeek claim to have spent just $US6 million on perfecting their chatbot, which they are generously offering to the world free, gratis, and for nothing.

No wonder journalists and commentators are referring to all this as a second “Sputnik moment”. (Sputnik being the name given by the godless communists of the Soviet Union to the world’s first artificial satellite which, to the consternation and dismay of the Americans, they successfully launched into space in October 1957.)

The success of DeepSeek, like the success of Sputnik, throws into serious doubt a whole host of American assumptions. Not the least of these being the typically brash and overconfident American assumption that the United States enjoys an unassailable lead in AI and is, therefore, destined to be the prime beneficiary of the “Fourth Industrial Revolution” this crucial innovation will, inevitably, usher-in.

The future is, thus, an American “lock”. Too far ahead of its rivals to be overtaken technologically, the economic and military hegemony of the USA will remain incontestable – a “golden future” indeed!

“Meh!”, says China, “We shall see.”

Viewed from the other side of the Pacific Ocean, the future of the USA does not seem so golden. Yes, America’s big, powerful, and well-protected – but so was Goliath.

Beijing observes a blustering bully in the White House, throwing his weight around, and expecting the rest of the world to be intimidated. But the Chinese President, Xi Jinping, is not afraid of Donald Trump’s tariffs, seeing them as proof, not of America’s economic strength, but of its weakness.

Beggar-thy-neighbour economics will not keep America at the top of the global heap. A superpower that raises its drawbridge and hides behind its walls is no longer a superpower.

It is now more than two decades since the USA, in full control of the UN Security Council, thanks to the support of both the Russian Federation and the Peoples Republic of China, was able to unleash shock and awe upon any nation that dared to challenge, or simply got in the way of the “New World Order” Washington was fashioning out of its total Cold War victory.

But, the hyper-globalised world that American neoliberalism produced succeeded only in enriching China and hollowing-out the United States as a coherent social and political entity. Trump, far from being the apotheosis of American success is the tawdry emblem of American failure.

The only redeeming feature of the 47th president’s wrecking-ball administration is its determination to implement Trump’s populist agenda. In doing so, however, it will not make America great: “Promises made, promises kept” will only make America bankrupt.

Trump’s long and lurid career has left him supremely indifferent to the perils of debt. But, there is a big difference between a media-savvy paper billionaire shrugging off his financial failures and striking out in a new direction; and the world’s largest economy, fast approaching the limits of its ability to print its way out of irredeemable insolvency.

The timing of DeepSeek, like most Chinese moves, shows every sign of being carefully thought through. It speaks of a regime that is happy to demonstrate, rather than brag about, its technological prowess. Such seemingly effortless (and cost-effective!) competence is likely to play better than America’s punitive tariffs and sanctions, especially on those continents where Chinese capital and expertise are, increasingly, on display.

Perhaps the Americans should ask DeepSeek to predict the future of their once “indispensable” nation. The answer is, almost certainly, not 42 – or 47!

This essay was originally published in The Otago Daily Times and The Greymouth Star of Friday, 31 January 2025.

2019 - If We Get Lucky.

Sweet Dream Scenario:  As Vice-President Mike Pence is being sworn-in as the 46th President of the United States - following Trump's sudden resignation - he suffers a massive heart attack and dies. His constitutionally designated successor is the Speaker of the House of Representatives, Nancy Pelosi. By a strange twist of fate, the United States of America gets its first female president after all.

PREDICTING THE FUTURE is a mug’s game. If it could be done, then gambling would be impossible and stockmarkets would crash. Not that these and a host of equally strong objections ever prevented professional seers from giving us the benefit of their prognostications. Some of them, by the simple law of averages, will be correct. Most, however, will not. This is because, as a wise woman once said: “We do not see things as they are, we see them as we are.”

In that spirit, allow me to describe the coming year as it might look – if we get lucky.

If we get lucky, then Special Prosecutor Robert Mueller will present a report which damns President Donald Trump in ways unanticipated in even his worst nightmares. Republican and Democratic legislators, alike, conclude that his continuing occupation of the White House has become untenable.

Congressional leaders privately inform the President that there is more than enough support in both the House and the Senate to secure his impeachment. The President reaches for his cell-phone – only to discover that the Deep State has prevailed upon Twitter to shut down his account. Realising that the jig is up, the President resigns.

As Vice-President Mike Pence is being sworn-in as the 46th President of the United States he suffers a massive heart attack and dies. His constitutionally designated successor is the Speaker of the House of Representatives, Nancy Pelosi. By a strange twist of fate, the United States of America gets its first female president after all.

If we get lucky, then the House of Commons decisively rejects Theresa May’s Brexit Deal. Defeated and exhausted, the Prime Minister advises the Queen to dissolve Parliament and call an early General Election. May then resigns.

A Special Conference of the Labour Party votes decisively in favour of making a Second Brexit Referendum the centrepiece of its election manifesto.

With the Conservatives torn by all manner of political and personal conflicts, Labour cruises to a landslide victory. For the first time in forty years, the United Kingdom has a socialist prime minister and an unashamedly left-wing government. The Second Referendum records upwards of 60 percent of Britons opting to remain in the European Union.

If we get lucky, then the Russian President, Vladimir Putin, negotiates a general peace settlement and mutual defence pact involving Turkey, Syria, Lebanon, Iraq and Iran. The Kurds secure regional autonomy within the Syrian state, guaranteed by the Russian Federation.

If we get lucky, then the Politburo of the Chinese Communist Party, fearful that President Xi Jinping is about to launch a massive purge of senior party cadres, deposes him. A hastily-summoned National People’s Congress, in a climate of unprecedented independence, elects a moderate reformer as Xi’s successor.

If we get lucky, then the National Party responds to a sharp decline in public support by jettisoning its current leader, Simon Bridges, and replacing him with Judith Collins. The choice of Collins is itself a reaction to the rapid rise of the right-wing populist New Conservative Party. Collins, it is hoped, will staunch the flow of National support to the NCP.

Appalled by this dramatic shift to the far-right, thousands of moderate National Party supporters swing in behind NZ First and Labour, lifting their combined support to nearly 60 percent of voters.

The Coalition Government, buoyed by this sudden shift in its fortunes, decides to reject the Tax Working Group’s recommendation favouring the imposition of a Capital Gains Tax. The Prime Minister, Jacinda Ardern, is persuaded by Winston Peters that such a tax would turn every farmer, small business owner and landlord in the country into her personal enemy. Finance Minister, Grant Robertson, resigns in protest. Jacinda replaces him with David Parker.

If we get really lucky, then the leadership changes in the USA, the UK and China produce a sudden and radical shift in the global approach to anthropogenic global warming. Rather than relying on yet another international conference, the leaders of the five permanent members of the UN Security Council meet in secret and thrash out a concrete plan for keeping the planet’s remaining reserves of oil and gas in the ground while they co-ordinate a planet-wide “Green New Deal”.

According to the wise, the only sure thing about luck is that it changes.

I’m counting on that being true.

Happy 2019!

This essay was originally published in The Otago Daily Times and The Greymouth Star of Friday, 4 January 2019.

Dropping the Ball, or Saving the Game? A Response to Fran O’Sullivan.

Who's In Charge? That it was left to the Chinese President, Xi Jinping, to lead the charge against the rise in protectionism across the globe struck NZ Herald business columnist, Fran O’Sullivan, as particularly galling. Since the 1980s, it has been the West that has set the pace on trade liberalisation – particularly the United States. That this no longer appears to be the case clearly left O’Sullivan unimpressed.

 

THE DEEP ANXIETY of the “Free Trade” lobby was on full display in this morning’s NZ Herald (7/9/16). Fran O’Sullivan, that most indefatigable of the Herald’s free trade advocates, was so moved by the uncertainty currently surrounding the ratification of the Trans-Pacific Partnership (TPP) that she devoted a good chunk of her business column to the global fight against protectionism.

 

That it was left to the Chinese President, Xi Jinping, to lead the charge against the rise in protectionism across the globe struck O’Sullivan as particularly galling. Since the 1980s, it has been the West that has set the pace on trade liberalisation – particularly the United States. That this no longer appears to be the case clearly leaves O’Sullivan unimpressed.

 

Of President Barack Obama’s reticence on the subject – on display at the just concluded G20 meeting in Hangzhou, China – O’Sullivan is scathing:

 

“US President Barack Obama could hardly lead the charge given the two candidates fighting for election to president don’t have the bottle to even support the Trans-Pacific Partnership (TPP). The US previously argued TPP would enhance US economic supremacy and ‘contain’ China's ambitions.”

 

Those scare-quotes around the word “contain” indicate just how sceptical O’Sullivan has become of the United States’ capacity to any longer dictate economic terms to the world’s major economic powers – especially China. Her dismay at this turn of events is clear:

 

“Now Xi is driving the call for a more open economy, yet another sign of how badly ‘the West’ has dropped the ball in the post-Global Financial Crisis era.”

 

But if the West has “dropped the ball” in relation to the GFC, and if its political leaders no longer “have the bottle” to support free trade agreements like the TPP, then it is surely incumbent upon O’Sullivan to tell her readers why. Sadly, no such explanation is forthcoming.

 

There is, of course, a very good reason for O’Sullivan’s silence on the cause of the West’s failure. Even in the business pages of the Herald, blaming the world’s economic problems on democracy is a reputationally risky gambit. And yet, no other explanation suffices. That the very same international trends: free trade, globalisation; whose declining influence O’Sullivan so volubly laments; are also the root causes of the massive upsurge of populism across the USA and the United Kingdom is simply undeniable.

 

It’s not that Donald Trump and Hilary Clinton lack “the bottle” to back the TPP, more a case of them recognising that to do so at this juncture in American history would cost them the election. What O’Sullivan refuses to recognise is that free trade and globalisation have, over the past 30 years, imposed a tremendous economic and social cost upon the populations of the West. That the effects of free trade and globalisation were bound, eventually, to trigger a day of democratic reckoning was something their proponents preferred not to think about.

 

O’Sullivan offers a fine example of this political denial by quoting the words of the Chinese billionaire, Jack Ma. The founder of Alibaba (China’s equivalent of TradeMe) told CNN that: “We should keep on going along the path of globalisation ... globalisation is good ... when trade stops, war comes.”

 

Wa went on to dismiss the strongly antagonistic tone adopted by Donald Trump towards America’s Chinese competitors: “Every time there’s an election, people start to criticise China. They criticise this, they criticise that ... [But] how can you stop global trade? How can you build a wall to stop the trade?”

 

The answer, of course, is by erecting the very same protectionist trade-barriers that Wa’s President, Xi Jinping, was warning the G20 against. As boss of the Chinese Communist Party, Xi clearly struggles to fathom the West’s sudden falling-out-of-love with what used to be called the “Washington Consensus”. Perhaps his political empathy would be enhanced if his party’s policies were subjected to the judgement of the Chinese people every four years – like those of his Western counterparts.

 

2016 may prove to be the year in which the electorates of the West finally demonstrate to their political elites the democratic folly of pursuing trade policies that are free – but not fair. If that is what they do, then, far from dropping the ball, the voters of the West will have saved the whole capitalist game.

 

This essay was originally posted on The Daily Blog of Wednesday, 7 September 2016.