Of course, A.I. does not just run on metaphors. It runs on hardware. This is where Chris Miller’s “Chip War” is essential. The chips that power our iPhones and allow A.I. systems to carry out their calculations are magnificently intricate. “Unlike oil, which can be bought from many countries,” Miller writes, “our production of computing power depends fundamentally on a series of choke points: tools, chemicals and software that often are produced by a handful of companies — and sometimes only by one. No other facet of the economy is so dependent on so few firms.”
The iPhone 12 runs on a chip with 11.8 billion transistors etched into its silicon. Only one company in the world can make that chip. That company relies, in turn, on machines and materials that are also made only by singular firms. Those machines and materials rely on similarly complex and fragile supply chains. If any node in this supply chain breaks, so too will much of the global economy break. If a country or alliance of countries can control these advanced supply chains, locking others out, they will have a powerful advantage in both war and commerce.
“Chip War” is a reminder of the physical artifacts that underlie what we so wrongly describe as the cloud. It illuminates why the United States and China are at such loggerheads over chips, the reasons our interests in Taiwan go beyond the defense of a fellow democracy and how hard it will be for any country or firm to compete in the future if it does not have secure access to these minuscule miracles. The title of Miller’s book is, for now, rhetorical, but I found myself wondering how long that would remain the case. When will we see the first true war over chips? (I discussed some of these questions with Miller on my podcast.)
China has loomed large in my thinking this year. The three signal legislative achievements of the Biden administration — the bipartisan infrastructure deal, the CHIPS and Science Act and the Inflation Reduction Act — were largely or partly about competing with or strategically decoupling from China. Outmaneuvering China is one of the few bipartisan paths left for legislation in Congress, which has led to way too many bills being framed and written as anti-China bills. Hawkishness toward China is the clearest through line from the Trump to Biden administrations. Biden kept Trump’s tariffs and began limiting China’s access to key technologies. The rhetoric cooled but the policy heated.
That’s the background for why I keep thinking about Gary Gerstle’s “The Rise and Fall of the Neoliberal Order.” Gerstle’s key concept is the idea of a “political order,” which he defines as “a constellation of ideologies, policies and constituencies that shape American politics in ways that endure beyond the two-, four- and six-year election cycles.” Gerstle sees only two in the past 100 years: the New Deal order, which lasted roughly from the 1930s to the 1970s, and the neoliberal order, which spanned the 1970s to the 2010s. There are more histories of this era of American politics than any bookshelf can hold. What sets Gerstle’s book apart is his attention to the way domestic politics were shaped by fear of, and competition with, the Soviet Union:
Countless progressive movements, it has been argued, trimmed their political sails rather than risk being tagged with the kiss-of-death label, “soft on communism.” But the threat of communism, I argue, actually worked in a quite different direction: It inclined capitalist elites to compromise so as to avert the worst. American labor was strongest when the threat of communism was greatest. The apogee of America’s welfare state, with all its limitations, was coterminous with the height of the Cold War. The dismantling of the welfare state and the labor movement, meanwhile, marched in tandem with Communism’s collapse.
Gerstle got me thinking about the way that envy of China’s manufacturing prowess and fear of being economically outpaced have permeated American politics, driving everything from the return of industrial policy to a renewed focus on infrastructure and supply chains and the speed with which public projects get built. Gerstle does not speculate on the political order that we are in now. But I believe a new one has already begun, and it is being shaped more by China than by any American politician, including Trump or Biden.
