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Analyzing the Thoughts of a Modern Era Churchill

As an admirer of Newt Gingrich for over four decades, I picked up his new book Trump vs. China with ambivalent expectations.

I knew it would be sophisticated and well-researched. I knew it would contain Churchillian flourishes. Gingrich is our Churchill. I knew his book would exhibit a certain facile mastery of technology.

And I knew it would offer a wide-ranging and intelligent challenge to my view of China.

Newt joins most Republicans in seeing China as a threat. I see China as a huge opportunity.

You see, Newt sees China in a cold war idiom of “atrocities” and “totalitarianism.” He spends too much time in war colleges, too little time studying technology. I see China as a mostly peaceful society with a smaller government as a share of GDP than the US.

Newt sees artificial intelligence (AI), facial recognition, and new camera technology as vessels of a “totalitarian national surveillance state” perpetrating egregious crimes against the Muslim Uighurs and other minorities.

I have a different view of the Chinese Uighurs. In recent years, they perpetrated terrorist attacks that took the lives of some 500 Chinese, going about their business in railroad stations and cafes. Xi Jinping was responding to a bombing that killed 36 people closely preceding his visit to a railroad station in Western China. How would Trump respond to such an event in the US?

A better analogy is our response to Indian tribes. We create reservations rife with alcoholism and despair and devoted to casinos. For the Uighurs, the Chinese create “reeducation camps” that give instruction in Mandarin and offer vocational training. I think Gingrich and many others are outrageous to compare these facilities to death camps and gulags.

I see face recognition cameras and other AI technologies as a major advance with huge positive potential. These devices potentially obviate ethnic roundups and enable a targeted and individualized response to terror without categorical condemnation of national groups such as the US incarceration of the Japanese during World War II.

I wish there had been such technology available during World War II, the 2013 Boston Marathon, and before the 9/11 attacks.

These face recognition devices enable safe streets and airports without ham-handed Transportation Security Administration (TSA) gauntlets. Without personalized identification through bio-metrics and images, the US will not be able to respond to its problems of bioterrorism and other sophisticated threats.

If we want to have immigration of Muslims, we had better be able to tell them apart. And maybe a little re-education on the Israel Test would be appropriate rather than just ignoring the Middle Eastern (and American Muslim) plague of anti-Semitism.

China Versus the World

We shouldn’t be turning away from China. The country has a lot to offer.

Rather than barring US chips from such Chinese innovators as Hikvision, iFlytek, Sensetime, JD, and Huawei, the US should be buying their gear and learning from it.

Rather than constantly blaming the Chinese for “stealing” our technology, we should reconsider the defensibility of intellectual property that we can’t manufacture and which can be readily stolen.

China is just mimicking US entrepreneurs such as Edison, Carnegie, and Ford, who all incurred frequent charges of theft from the established European technologists of the day such as Faraday (electrical devices) and Otto (internal combustion engines). Bill Gates, Steve Jobs, and Bob Metcalfe were all charged with stealing from Xerox PARC, IBM, and other innovators.

Our patent laws are based on “non-obviousness” and “reduction to practice.” If without Chinese aid we cannot manufacture our inventions, they are not fully “reduced to practice.”

While the Chinese have educated millions in engineering and science, the US has devoted its universities to a Luddite climate cult deeply hostile to manufacturing. The new Harvard President is transforming the entire campus, including its science departments, into a climate change re-education camp. In an act of vandalism, our Environmental Protection Administration (EPA) even barred carbon nanotubes in consumer products.

As a result of EPA chemophobia, Silicon Valley has essentially given up on wafer-fabrication and committed itself to an ultimately crippling focus on software and virtualization, which is dependent on chips that increasingly can only be fabricated in Taiwan, Israel, and soon mainland China itself. Crucial to electronics, “rare earth” minerals are too “dirty” to be effectively mined in the US under EPA rules.

Our class action lawyers drove some 35 major chemical companies into bankruptcy through a crazed campaign against asbestos (when only 5% of the fibers were dangerous and then only after prolonged exposure). Class action lawyers are chiefly responsible for the destruction of GE as a manufacturing colossus based on of groundless claims about the toxicity of PCBs.

The US and Europe are currently paralyzing our leading technology firms with tens of billions of dollars’ worth of fines and fees and harassing them with subpoenas and monopoly charges. In a spurious and lucrative “privacy” campaign, government officials assume that technology is a threat rather than a solution. Personally, I would rather be followed by cameras than by cops.

The so-called privacy violations are mostly performed by computers and AI using metadata. While the Chinese get surveilled from the distance by lenses and computers, we will still have to submit to ill-informed police knocking on our doors and violating our homes, hard drives, and soft-tissues.

Now, even under Trump, the Equal Employment Opportunity Commission (EEOC) is making it illegal for Silicon Valley companies such as Google to pursue merit-based employment of computer scientists.

None the less, US companies such as Apple, Microsoft, Amazon, and Google, all dependent on manufacturing in China and Taiwan, became the world’s leaders in market cap, with huge profits, while Chinese manufacturers got by on narrow margins. The Chinese might ask: “Who is exploiting whom?”

Newt sees China as immutably Marxist-Leninist and Maoist. I recognize their socialist rhetoric as religious litanies and links to the Maoist legitimacy of a Chinese Communist Party that is still leading a capitalist transformation of the country. If I have to choose between economic freedom and political democracy, I will choose economic freedom. Political freedom is meaningless if the government controls the economy.

In other words, I see China, for all its well-advertised flaws, as far more an opportunity than a threat.

With Xi Jinping’s speech last week, it even became more hospitable to the Cryptocosm than the US is. The threat to the US, as Gingrich acknowledges in his final chapters, chiefly stems from ourselves.

Regards,

George Gilder
Editor, Gilder’s Daily Prophecy

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George Gilder

George Gilder is the most knowledgeable man in America when it comes to the future of technology — and its impact on our lives.

He’s an established investor, writer, and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance.

And he’s certainly no stranger to the financial newsletter...

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