I just read the current issue of The Economist while flying to Washington, D.C. to speak on a panel about Ukraine on ethics and economic development during a war.
I found it aligned with our thinking about moral capitalism in three articles.
First, about the virtue of capitalism in bringing forth innovation and new technologies:
Two years after ChatGPT took the world by storm, generative artificial intelligence seems to have hit a roadblock. The energy costs of building and using bigger models are spiraling and breakthroughs are getting harder. Fortunately, researchers and entrepreneurs are racing for ways around the constraints. Their ingenuity will not just transform AI. It will determine which firms prevail, whether investors win and which country holds sway over the technology.
Large language models have a keen appetite for electricity. The energy used to train OpenAI’s GPT-4 model could have powered 50 American homes for a century. And as models get bigger, costs rise rapidly. By one estimate, today’s biggest models cost $100m to train; the next generation could cost $1bn and the following one $10bn. On top of this, asking a model to answer a query comes at a computational cost—anything from $2,400 to $223,000 to summarize the financial reports of the world’s 58,000 public companies. In time, such “inference” costs, when added up, can exceed the cost of training. If so, it is hard to see how generative AI could ever become economically viable.
There is no need to panic. Plenty of other technologies have faced limits and gone on to prosper, thanks to human ingenuity. The difficulty of getting people into space led to innovations that are now used on Earth, too. The oil-price shock in the 1970s encouraged energy efficiency and in some countries, alternative means of generation, including nuclear. Three decades later, fracking made it possible to reach oil and gas reserves that had previously been uneconomical to extract. As a consequence, America now produces more oil than any other country.
Already, developments in AI are showing how constraints can stimulate creativity.
Secondly, poverty needs good capitalism to put it out of its misery:
Since the Industrial Revolution, rich countries have mostly grown faster than poor ones. The two decades after around 1995 were an astonishing exception. During this period, gaps in GDP narrowed, extreme poverty plummeted and global public health and education improved vastly, with a big fall in malaria deaths and infant mortality and a rise in school enrolment. Globalization’s critics will tell you that capitalism’s excesses and the global financial crisis should define this era. They are wrong. It was defined by its miracles.
Today, however, those miracles are a faint memory. As we report this week, extreme poverty has barely fallen since 2015. Measures of global public health improved only slowly in the late 2010s and then went into decline after the pandemic. Malaria has killed more than 600,000 people a year in the 2020s, reverting to the level of 2012. And since the mid-2010s, there has been no more catch-up economic growth. Depending on where you draw the line between rich and poor countries, the worst-off have stopped growing faster than richer ones or are even falling further behind. For the more than 700m people who are still in extreme poverty—and the 3bn who are merely poor—this is grim news. …
As the world has turned towards intervention, so the chosen instrument for poor countries has become trade restrictions, as IMF research shows. This contains an uncomfortable echo of the failed development plans of the 1950s, built around freezing out imports rather than embracing global competition. Fans of industrial policy will point to East Asia’s “tiger economies,” such as South Korea and Taiwan. Yet, both embraced harsh global competition. And several African countries that tried to copy their industrial policies in the 1970s failed miserably.
The world will pay for its failure to learn from history. Rich countries will cope, as they usually do. For the poorest people, however, growth can be the difference between a good life and penury. It should not be a surprise that development has stalled as governments have increasingly rejected the principles that powered a golden era. Nobody will suffer more as a result than the world’s poor.
Thirdly, woke antiracism and DEI programs are losing their welcomed seat at the table for discussions of what Americans must rightly do. I argued 2 years ago that DEI, in particular, did not fit with the universalistic and humanistic ethics of moral capitalism:
The simplest way to measure the spread of woke views is through polling. We examined responses over the past 25 years to polls conducted by Gallup, the General Social Survey (GSS), Pew and YouGov. Woke opinions on racial discrimination began to grow around 2015 and peaked around 2021. In the most recent Gallup data, from earlier this year, 35% of people said they worried “a great deal” about race relations, down from a peak of 48% in 2021, but up from 17% in 2014. According to Pew, the share of Americans who agree that white people enjoy advantages in life that black people do not (“white privilege” in the jargon) peaked in 2020. In GSS’s data, the view that discrimination is the main reason for differences in outcomes between races peaked in 2021 and fell in the most recent version of the survey, in 2022. Some of the biggest leaps and subsequent declines in woke thinking have been among young people and those on the left.
The columnist, Lexington, ended that weekly commentary with these thoughts on white supremacy:
The left is due for a reckoning over the reckoning on race. The protesters have moved on, the book sales have dried up, the DEI departments are emptying and the elite white groveling and self-flagellation … have been, on the left, politely memory holed. Yet, a movement concerned with structural injustice has achieved little structural change, whether to policing or the black-white wealth gap. Was it all, in the end, just a performance?
