Capitalism v. Capitalism

Tech arms race to the bottom- The real tech agenda in Davos- Plus: Yeah, market capitalism really is “the greatest thing that ever happened to mankind”

-Tech arms race to the bottom

Historian and philosopher Yuval Harari urged the U.S. and China to stop AI, surveillance and biometrics from converging before it is too late, Alison writes.

The big picture: In a world that is fracturing around economics and technologies, Harari warned of a new arms race.

  • “This is the race-to-the-bottom danger. If we enter an arms race situation in fields like AI, then it almost guarantees the worst outcomes in terms of privacy and many other issues,” he told Axios in an interview.

Humanity could become entirely subject to AI and biometrics, Harari told his Davos audience, with risks including «data colonialism» and «digital dictatorships» that could imprison someone if, for example, their biological data suggests they are not sufficiently loyal.

Warning of a world where algorithms analyze our biology and humans become “hackable animals,” he floated a scenario: Some countries may adopt an AI that analyzes your entire life — the parts you control and those you don’t — for hiring. Others may resist it as dangerous, stressful and discriminatory.

  • That could create an economic imbalance, leading corporations in the second set of countries to press their governments to act.

But it’s not too late to slow down or even stop the arms race, he says.

  • “Nothing is really inevitable.”
  • The Cold War threatened nuclear Armageddon but ended peacefully because the U.S. convinced enough people around the world to trust it had the best interests of people everywhere in mind, says Harari.
  • “This was maybe the most powerful weapon in the American ideological arsenal.”

Now, the U.S. and its rival powers are in every-man-for-himself mode.

  • The risk posed by these technologies requires the restoration of trust and leadership but also philosophical answers, Harari says, though he fears the world is facing «philosophical bankruptcy.»
  • “For thousands of years, philosophers have been preparing for this moment, and so to deliver, they need to engage with the new technology.”

-The real tech agenda in Davos

The Midd Tech leaders once were given a free pass (literally and figuratively) as the young darlings of Davos, but they’re now the established leaders, with a heightened role as well as added scrutiny, Ina reports.

  • While U.S.-China tensionswere high on tech leaders” lists, they also came to push their points on climate change, antitrust and AI regulation.

The public pronouncements:

  • Salesforce CEO Marc Benioff was pushing the World Economic Forum’s 1 Trillion Trees initiative, even managing to get the Trump administration committed.
  • IBM called for «targeted regulation» of AI. CEO Ginni Rometty was quick to point out that the company wants to see legislation focused on how specific technologies are used, rather than blanket bans, like Europe is considering with public use of facial recognition.
  • Google issued a broader call for regulation, including support for a temporary ban on facial recognition.
  • While other companies sought to make nice with critics, Palantir CEO Alex Karp defiantly defended his company’s work with the U.S. government —including immigration agencies — in an interviewwith CNBC.

But tech leaders spent much of Davos behind closed doors, meeting with top officials from across the globe.

  • About three dozen tech executives met with President Trump on Wednesday, though the discussion focused largely on the friendly turf of workforce training, with Apple’s Tim Cook and IBM’s Rometty delivering remarks.
  • Tech leaders also met privately with top officials from Europe, which is taking the lead when it comes to regulation.

Capitalism v. Capitalism

The heavyweights of Western-style capitalism in Davos don’t yet know how to deal with China’s authoritarian state capitalism, Bethany writes.

The big picture: For much of the past 70 years, the behavior of Western companies has been shaped by Western laws and regulations, and by the vagaries of Western markets.

  • Now China is the first non-Western, authoritarian country with both the market size and the will to reshape the behavior of multinational companies, and even Western governments, to better fit its own interests.

Why it matters: “The fact that the Chinese are not in any way aligning with or integrating with Western-style capitalism is something that these CEOs are having a hard time coming to terms with,” said Ian Bremmer, president and founder of Eurasia Group, in an interview at Davos with Bloomberg.

Case study: China telecom giant and 5G leader Huawei has received tens of billions of dollars in various forms of government assistance, according to a Wall Street Journal report.

  • This has helped it offer its products and services below market cost — and gives it an edge over competitors that top executives at Western companies are reluctant to acknowledge.
  • The U.S. government has urged allies not to use Huawei 5G because of security problems and the company’s close tiesto the Chinese government, even threatening to withhold intelligence sharing.
  • Despite the warnings, the British government looks setto allow Huawei into its telecommunications network, and Germany may follow.

The bottom line: Acting against the economic interests of companies is deeply unpopular among top Davos leaders.

  • Yet, with the rise of China’s authoritarian capitalism, that may be what is required to preserve the security of critical information infrastructure — and the fundamental freedoms of liberal democracy.



Yeah, market capitalism really is “the greatest thing that ever happened to mankind”

Two cheers for JPMorgan boss Jamie Dimon for saying he thinks “capitalism is the greatest thing that ever happened to mankind.” It kind of is. A secular miracle, really. Capitalism is why people in today’s advanced economies make $200 a day rather than $2 a day or less as they did back in 1800. It’s why there are even such things as advanced economies.

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