The Most Efficient Society?
Will China become the world’s most efficient society?
Few introductions are needed to the economic powerhouse that is China. It is also the arguably one of the most successful modern autocracies. Few autocracies exist and even fewer prosper the way China has. Obviously, it has advantages in terms of natural resources and cheap labour — much like the US once did — but it is also a testament to vast amounts of social manipulation and engineering. But as China prepares to move away from a manufacturing and infrastructure driven economy and compete with the US and EU on emerging technologies, does it possess unique advantages that will propel it to a position of global domination?
China Today
China’s double digit growth for much of the 90s is attributed to a finely balanced economic, political and social policy. It combined an open, export and infrastructure driven economy with dictatorial political control. The formula has worked for the most part. It’s GDP has exploded and it is home to some of the largest metropolises in the world. Traditional economic indicators chalk up China as a huge success. The “industrialised West” has benefitted from cheap Chinese labour during this time and transformed itself to benefit from the information revolution while offshoring manufacturing.
However, China’s ambitions have extended far beyond being the world’s factory. And this has been apparent for a while. Climate change, AI and evolutions in the world of bio-engineering provide a field for China to compete with the “West” on its own terms. And it is doing an excellent job in a lot of ways.
Unlike most autocratic regimes, a relatively unique feature of the CCP in China is its intense commitment to making the Chinese richer(in the base economic sense), more productive and generally better off. Most regimes fall apart due to corruption, treachery or poor societal progress. China has (more or less) efficiently managed these challenges by investing in its economy and its people.
The other side of the coin is China’s extremely rigid, authoritarian society. Values and freedoms taken for granted in the “West” are virtually non-existent and China’s Great Firewall is an extremely potent barrier to information from outside the country. The regime utilises information control, political manipulation and outright suppression to keep the population in check.
But what does this have to with China’s future?
The 21st Century Outlook
Economies are highly complex. Economists wrong more often than not. Physicists happily embrace criticisms of their theories and even acknowledge them. Biologists admit to the shortcomings of their prowess. Economists continue to ignore behavioural impacts in favour of the ironically called rational economics. It is clear that rational economics don’t work. But can they?
Often, the largest obstacle to the rational model is a lack of information. It is impossible(so far) to know what utility people place on goods and services and hence impossible to estimate a market demand. Adam Smith’s hypothesised “Invisible Hand” takes time to “find” the right market price. It also captures only a snapshot of society. But what if the data was available? Would an economy reach — theoretically — the maximum possible economic efficiency?
AI such as ChatGPT3 and DALL-E have sent waves through society as they demonstrate immense(though arguably still rudimentary) capabilities. In the future, will we see an AI capable of manipulating and controlling the economy as Marx envisioned the social planned would one day? It isn’t entirely possible to rule it out.
China poses an interesting case study in this regard. It collects almost unprecedented data on citizens. Communications, movements, purchases, interactions are all tracked. With the largest(for now) population in the world, this is an incredible amount of data. The kind that complex AI leverage effectively. Can China leverage it’s data on interactions, preferences and spending to build an AI that maximises efficiency?
The experiment is hardly plausible in the US or Europe where such an intrusive AI will face significant opposition nor India, which has years — if not decades — of catching up to do to get where China is and is significantly more democratic and yet again, will face significant resistance to experiments.
If such an intrusive AI could bring immense economic gain, aren’t China and Chinese people best placed to accept this society? Even today, opposition to the CCP remains low as people continue to embrace economic growth. The trade-off is clearly acceptable to a majority of the Chinese people. Besides, China has had the same party since 1949 but never the same policies. It is deceptively flexible. It embraced capitalism but tinged it with Chinese characteristics. It is a market economy but not a capitalist economy. And it continues to evolve. What Americans view to be an alarming rise is easily comparable to the “fairytale” creation of the middle class in the 60s in America. China is living it’s own fairytale and it shows no sign of stopping.
In theory, China could then become the most efficient economy. But will that really turn into into the most efficient society? Unlikely. Economics barely scratch the surface of social efficiency. Inequality persists — even grows — with economic growth. Can this AI also be entrusted to sacrifice efficiency gains in favour of distributional ones? Perhaps.
Ultimately, this experiment will likely only work in a society where citizens are essentially willing to be tracked all the time. China may be the only society with the political, social and technical ability to try.
The consequences are impossible to foresee but unlikely to be too far away.
