some rough thoughts on how we got to this place in the world:
America made a bad deal with unrestricted free trade at the turn of the last century at the behest of multinational corporations, mostly born in America, but not necessarily "loyal" or exclusive to it. for a time, it was a win-win. corporations gained access to global markets and dominated, and it made the American consumer wealthy in purchasing power
but it eroded the American industrial base relative to global output, and it left a generation of workers stranded. knowledge work and a services-based economy were the future, or so we were to believe. this was little comfort to the laid off factory worker in the "rust belt," who lived in a town consumed by decline and drug abuse for the next 30 years. the seeds of MAGA were planted then there and there, though i don't believe slap-dash tariffs fix the problem
and in this industrial abdication by the US, China saw an opportunity to take on the reins and became the world's factory. they won some of it by being the lowest cost, but the government kept the yuan undervalued and by many estimations "cheated" at trade in ways deemed illegal by the WTO. it doesn't matter now- they won that battle
so now we have two approaches moving forward:
America is betting on intelligence- not of its population, but the kind created by data centers. this may extend services dominance for a time, but it's not a moat as other countries will build AI capacity needed for "everyday" use as well. and even for AI, we cannot manufacture what's needed to produce it. almost all of the hardware comes from Taiwan (off the coast of China and is subject to cultural/territorial claims by them), and many of the industrial inputs used to manufacture that hardware come from China
meanwhile, China continues to bet on manufacturing and the entire supply chain which supports it. but this is vulnerable to global spending power by other countries. but as the country is authoritarian, they can simply end the capitalist experiment at some point and nationalize everything. it would be messy, but it's probably their final goal once the worker-capitalist model collapses
eventually, most knowledge/services work will be automated by AI, and then, at some point later, all physical/manufacturing work will be automated by robots
and ultimately, i believe both approaches in both countries will end up being captured by the state- which will either represent the people or be captured by elites/corporations
i have to think America may be making the wrong bet again to some extent if AGI does not pan out quickly, but perhaps it's the only bet we can make now. and there are big issues with whether or not we have enough electric power to drive it and how quickly new capacity can be brought online
data center capacity is probably good regardless, but it's really a bet on AGI leading to exponential technology advancement. anything short of that and the manufacturing approach probably still wins
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