Artificial Intelligence is the Crack Cocaine of the Digital Age

The rise of artificial intelligence may be rescuing the tech oligarchy, but its current trajectory could hasten our steps towards what virtual reality guru Rony Abovitz calls ‘computational autocracy’. The new possibilities posed by AI represent a force multiplier for the large tech firms. Musk, Apple, Meta, Google and Microsoft already seem poised to dominate the field.

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Bidenomics Isn’t Working

With the announcement that inflation fell to 3% in June, the US President will no doubt be emboldened in his claim that Bidenomics — essentially a green-tinted government-led economy — is working. Read more

The New Corporatism That’s Killing Capitalism

Over the years since the financial crisis, economic power and wealth has become ever more concentrated in fewer hands. This is something leaders have acknowledged, and policymakers have tried to do something about. And yet, despite brave talk of breaking up mega-giant companies, anti-trust efforts have been anemic Read more

The Luckiest Country

“There is a Providence that protects idiots, drunkards, children, and the United States of America.”
Otto Van Bismarck

America, the proverbial lucky fool, remains, despite itself, the world’s leading military power and largest economy. This has little to do with the genius of our leadership, but largely despite them. This failure is reflected in part by the fact that most Americans reject the political establishment forcing them to choose between unpopular President Joe Biden and his equally despised likely opponent, Donald Trump.

Mike Barone, arguably the most knowledgeable political commentator of the last half century, suggests we are experiencing a political “doom loop” of historic proportions. But despite this, the U.S. is so powerful, compared to its key geopolitical rivals, it could even survive four more years of Joe Biden (or God forbid, Kamala Harris) or even the vengeful incoherence of Donald Trump. Indeed despite  these poor leaders, the U.S. increasingly dominates as the largest recipient of foreign investment.

Notions of inevitable American decline, of course, remain popular, particularly in Europe, where such notions have been popular since at least the early seventies. Yet it is not Europe, or even China, that threatens American preeminence, but our self-absorbed and increasingly feckless elite class, extending from Wall Street and Silicon Valley to academia, the media, the arts, public school education, and the state bureaucracy. All hold a generally disdainful view of the country, its heritage, as well as its prospects.

Why America remains on top

America’s long-term prognosis turns on three things:  the self-correcting nature of the Constitution, its enormous physical endowment, and the innovative nature of its people. The political system may get bent by the depredations of the federal nomenklatura or the iconoclastic impulses of the Left, but the courts, Congress, and public opinion usually work to restrain the the worst excesses of would-be authoritarians.

Much of our providential advantage rests also on physical resources. America dominates the physical world—largest oil and gas producer, a nation blessed with natural ports, and large reserves of freshwater. It has the world’s largest expanse of arable land and a variety of climates that allow for a remarkable range of economic activities from the icy north to the semi-tropical south. In the aftermath of the Russian invasion of Ukraine, the U.S. resources base, for example providing fossil fuels to Europe, has become ever more critical.

Then there is the human edge. Despite all our well-recognized flaws in education, declining life spans, depressed teenagers, and widespread social unrest, Americans still churn out innovations at a level unmatched anywhere. America is home to all seven of the world’s top tech firms and all but five of the top 25. In terms of venture capital investment, a key factor in creating new companies, the U.S. leads easily, with over four times as much as China, and almost ten times as much as third-place Britain. No large country comes close to the U.S. in creating “super entrepreneurs.”

Confronting “monsters”

Early in its history America did not seek to impose itself on other countries. As Secretary of State John Quincy Adams suggested in 1821, America “goes not abroad, in search of monsters to destroy.” But over the last century, America’s leaders have felt compelled to confront “monsters,” sometimes necessarily, as in World War Two, but also stupidly, as with the First World War, Vietnam, and the most recent interventions in Iraq and Afghanistan.

America still confronts genuine threats, but we sometimes fail to recognize that our biggest rivals are plagued with fundamental weaknesses far more profound than our own. Over the past century America has seemed, and has been widely portrayed, as overmatched by competitors like Germany, Russia, Japan, and now China. Yet in each case, the U.S. turned out to be far stronger and resilient. To paraphrase Mark Twain, news of America’s demise is often declared far too prematurely.

Europe has often been seen by many American intellectuals, both right and left, as superior and to the U.S. Yet today Europe’s pretense of world leadership is something of a sideshow, even as leaders like France’s Emmanuel Macron and Germany’s Olaf Scholz seek influence in “a multipolar” global order. The dirty secret is that Europe is getting weaker; Germany, its dominant economic power, has awful demographics and, largely due to energy policies, is experiencing a self-inflicted industrial collapse. France appears to be on the verge of anarchic collapse. Nor can Europe count on emerging industries. The continent is home to only one of the world’s 25 most valued tech firms, and boasts a barely functional space program. After trailing the European Union’s economy as recently as 2008, the U.S. economy is now almost one-third larger.

Similarly, Russia, a specter for generations, has turned out to be a far weaker than expected, both during the old Soviet Union and the current neo-Tsarist Putin regime. Russia’s weakness has been particularly evident in the botched invasion of Ukraine, its shrinking population intensified by the current mass out-migration of talented people from that troubled country. Russia, with a GDP smaller than South Korea’s and barely a tenth of China’s, is today more an irritant than a global rival, outside its nuclear arsenal.

Finally, there’s Japan, the great bogeyman of the late twentieth century, now retreating on the global stage. Not only has its economic growth slowed, but it has been relegated to the backbenches of the digital age. Indeed the country now boasts not one of the top 25 tech firms by market value. Its future prospects are clouded by a demographic implosion that will see rapid aging and a shrinking labor force, something also eclipsing the prospects of Japan’s close followers, South Korea and Taiwan.

Read the rest of this piece at American Mind.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: Win-Chi Poon via Wikimedia under CC 2.5 License.

The Greatest Generational Conflict of All

Ever since the phrase “the generation gap” was minted — by a headline writer at Look during the youth rebellion of the Sixties — trouble has been brewing. Today, there are two generational conflicts in play around the world: one within the depopulating wealthy countries, and another within the more fecund, but far poorer, countries of the developing world. Read more

Nvidia’s Boom is Not a Straightforward American Success Story

In what has been a bleak year for Silicon Valley, the sudden surge in the value of tech company Nvidia, driven by its mastery of chips used for artificial intelligence, may seem like a ray of hope. Yet if this success may reward the firm’s owners and employees, as well as the tech-oriented financial speculators, the blessings may not rebound so well to the industry’s workforce overall, or to the broader interests of the West.

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Things Are Different Downtown

We are entering a new urban epoch, with the potential to disrupt city life in ways not unlike that created in the shift from an industrial to what Jean Gottman described in 1983 as the “transactional city.” Based on finance, high-end business services and information technology, transactional cities were defined not by production and trade in physical goods, but by intangible products concocted in soaring office towers.

For years, academic researchers, both on the Left and Right, envisioned a high-tech economic future dominated by dense urban areas. Yet when viewed through the lens of migration and employment, London, New York, San Francisco, Chicago, and Los Angeles have all been suffering relative declines for at least the last decade. The ultra-tall towers that once symbolized urban greatness are now as anachronistic as the Cathedrals of the Middle Ages. Office occupancy has been declining since the turn of the century, while construction of new space has also fallen. In 2019, before the pandemic, construction was one-third the rate of 1985 and half that of 2000.

More serious still has been the movement of people. Migration to dense cities, already a small share of all moves, started to decline as early as 2015.  But it accelerated during the pandemic. Dense centers — what historian William McNeil described as the “confluence of the civilized disease pools” — have historically suffered the worst during pandemics. Ancient Rome did, as did the great cities of the Renaissance, the Islamic Caliphate, and China. During the COVID-19 pandemic, the dense urban centers of today met the same fate, suffering generally the worst fatality rates.

Migration to dense cities, already a small share of all moves, started to decline as early as 2015. But it accelerated during the pandemic.

The pandemic clearly accelerated a devastating rise in crime and lawlessness, perhaps most notably in London, Paris, Washington, New York, Los Angeles, San Francisco, Philadelphia and Chicago. In some parts of Chicago and Philadelphia, young men now have a greater chance of being killed by firearms than the American soldiers who served during the wars in Afghanistan and Iraq.

Yet it is misleading to blame this on the pandemic alone. Indeed, despite the pre-COVID talk of people moving “back-to-the-city,” suburbs have accounted for about 90% of all metropolitan growth in the United States since 2010, gaining 2 million net domestic migrants, while the urban core counties lost 2.7 million. This process is likely to be impacted over the long term as more workers choose to work at home, at least two to three days a week. Stanford economist Nicholas Bloom has suggested that even after the pandemic, remote workers will constitute at least 20 percent of the workforce, more than three times the pre-pandemic rate.

All this accentuates a mounting crisis for urban governance. Even before the pandemic the transactional city had undermined the middle and working class as costs rose, schools deteriorated, and regulation flourished. Cities like New York, London, and Paris may continue to attract the ultra-rich who buy properties there, even if they live there only intermittently. But they are steadily losing the middle class.

Read the rest of this piece at The Ripon Forum.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Homepage photo: Sean Pollock, via Unsplash

Restaurant Revolution

Nokmaniphone Sayavong started her business, Nok’s Kitchen, during the worst of times—the Covid pandemic—and in a state that often treats small businesses with the delicacy of a cat torturing a mouse. Yet she has found a way to thrive. Read more

The Silicon Valley Bank Collapse Will Hurt Joe Biden

The rescue of Silicon Valley Bank and its large depositors has drawn together unlikely bedfellows. Both the Right-wing Free Beacon and the Leftist Stranger magazine, to give two examples, have denounced this federal largesse as “socialism for the rich”.

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The Rich Are Eating Themselves

Beware of plutocrats bearing gifts. The annual clown show at Davos epitomises how today, the global elites have embraced an unholy trinity of ‘progressive’ doctrines: climate-change apocalypticism, a belief in systemic racism and racial ‘equity’, and radical gender ideology. The super-rich hope that by genuflecting to these causes, they can buy themselves political protection and fend off the activists lurking in the ranks of their own companies. Yet, in the long run, this could end up fueling their demise.

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