The big news of the last couple of days is that India and Pakistan are at war. A terror attack by a (possibly) Pakistan-sponsored group drew Indian airstrikes in response. But unlike in 2019 when something very similar happened, the two countries didn’t immediately cool things down. Instead, there has been an increasing cycle of escalation, with airstrikes, missile strikes, shelling, aerial dogfights, and so on. A lot of people are still calling it a “standoff”, but by now it’s pretty obvious that it’s a war; no one is actually standing off.
This post isn’t about the blow-by-blow of the conflict — if you want, you can follow the list that I made on X.1 Instead, I want to make a more general observation: We are slipping further and further toward a world of war.
It’s a popular trope to say that war is always with us, but that’s true only in the vaguest, least informative sense. If you just count up all the countries where any kind of violence is occurring, the rate has increased only modestly over the last decade. But most of those are minor skirmishes and simmering conflicts with gangs and terror groups and little bands of ineffectual revolutionaries. When you look at estimates of the actual deaths in state-based conflicts, you can see that it took a big jump after the pandemic:
A chart of ten of the deadliest conflicts of the 21st century shows that deaths have been concentrated in recent years:
But to me, this data is less convincing than a single terrifying fact: Out of the world’s nine nuclear powers, four — India, Pakistan, Russia, and Israel — are now at war.
Even if India and Pakistan manage to climb down from the brink and avoid a protracted conflict, we should all still be unsettled. Russia and Israel are fighting non-nuclear enemies, which suggests that nuclear weapons can stabilize regions. But the fact that India and Pakistan, which are both armed with nukes, can fight each other to the degree they have — instead of climbing down like they did in 2019 — should worry us deeply.
This episode only reinforces what has been apparent for several years now — war is returning to our world. We’re slowly exiting a world of guerrillas and gangs and petty border skirmishes, and returning to the days when great powers clashed with each other regularly.
Ultimately, the reason for this is the end of Pax Americana. The power vacuum created by the decline of the global hegemon is prompting a scramble for power.
The end of Pax Americana means the world is up for grabs
In Europe, three of the last four centuries featured some kind of big “crisis” — a massive outbreak of war that destroyed the old power equilibrium among nations and ushered in a new one. The Thirty Years’ War in the early 1600s featured all of the region’s powers, and devastated the population of Germany. In the late 1700s and early 1800s there were the Wars of the French Revolution and Napoleonic Wars. And then of course in the early 1900s there were the World Wars. Other regions of the globe didn’t have such regular contests among regional powers, but they did have crises of their own — the fall of the Ming Dynasty in the mid-1600s, the Taiping Rebellion in the mid-1800s, the American Civil War, the Pacific Theater of World War 2, and so on.
This isn’t some regular clockwork cycle. The point is that over time, the stability of power relations seems to decay, both between nations and within them. This decay eventually results in a military contest to see where the new power lies.
For years, I’ve been calling for the U.S. to promote manufacturing. When Americans started getting excited about reindustrialization, I cheered. I was a big supporter of Joe Biden’s industrial policy, and I even praised Donald Trump for smashing the pro-free-trade consensus in his first term.
Trump’s tariffs haven’t changed my mind about any of that. Yes, the tariffs are a disaster. But they’re not a disaster because they promote manufacturing; indeed, they are deindustrializing America as we speak, by destroying American manufacturers’ ability to leverage supply chains and export markets. When America has finally realized the futility of Trump’s approach, it will be time to turn once again to the task of reindustrialization — in fact, that task will be even more urgent, given the damage that Trump will have done.
And yet at the same time, I think there’s a misguided narrative about globalization, manufacturing, and the American middle class that has taken hold across much of society. The story goes something like this:
In the 1950s and 1960s, America was a smokestack economy. Unionized factory jobs built a broad-based middle class, and we made everything we needed for ourselves. Then we opened up our country to trade and globalization, and things started going downhill. Wages stagnated due to foreign competition, and good manufacturing jobs were shipped overseas. American cities hollowed out, and we became a nation of winners and losers. The college-educated upper middle class thrived in their professional jobs, while regular Americans were forced to fall back on low-wage service work. Eventually the rage of the dispossessed working class boiled over, resulting in the election of Donald Trump.
No one anymore, on the left or the right, denies that globalization has fractured the U.S., both economically and socially. It has hollowed out once-prosperous regions like the furniture-making areas of North Carolina and the auto manufacturing towns of the Midwest. It has been a driver of income inequality…Trump owes much of his political success to the fury that these realities aroused in working-class Americans.
“My dad ran factories in the Detroit supply-chain orbit,” Financial Times columnist Rana Foroohar told me recently. “In the 1990s, the factories started shutting down. And when I would go home in the 2000s, half of my high-school classmates were on opioids.” She added, “The economic theories didn’t connect with the real world.”
Which raises an obvious question: Why did so many economists, policymakers, and journalists like me refuse to acknowledge the problems with neoliberalism for so long? Why were we so quick to label anyone who even flirted with the idea that maybe the U.S. should be protecting its industrial base, just as other countries did, as a Pat Buchanan-like fool?
One big reason was the most basic one: It meant low prices. Companies could keep their costs low by using China’s (and Mexico’s) comparative advantage: cheap labor. At the same time, companies like Walmart and Costco could buy goods directly from Chinese manufacturers, which invariably had lower prices than comparable American goods.
Like all such narratives, this one consists of layers of myth wrapped around a core of truth. But not all grand economic narratives are created equal — in this case, the layers of myth are thick and juicy, while the core of truth is thin and brittle. Everyone knows about the China Shock paper and the collapse of manufacturing employment by about 3 million in the 2000s. That’s the core of the story, and it’s very real. But there are a lot of big important economic facts that place that story in perspective, which most of the people talking about this topic seem not to know.
Ultimately, the trade-driven collapse in manufacturing was only a small part of the economic story of America over the last half century.
America is not actually that globalized
Pundits and politicians alike talk incessantly about the flood of cheap Chinese goods into America. But overall, this is a small percent of what we buy. The U.S. is actually an unusually closed-off economy; as a fraction of GDP, imports are much lower than in most rich countries, and lower even than China:
Trade deficits are an even smaller amount of GDP. U.S. imports of manufactured goods minus exports are equal to about 4% of GDP per year. Our trade deficit with China is about 1% of GDP.
In terms of imported components, America manufactures most of what it uses in production. China’s exports to the U.S. are actually more likely to be intermediate goods rather than the consumer goods we see on the shelves of Wal-Mart — another thing the typical narrative misses. But even so, China makes only about 3.5% of the intermediate goods that American manufacturers need:
So if we eliminated trade deficits, would it reindustrialize America? Even assuming that we replaced the imports 1-for-1 with domestically made goods, the impact on manufacturing’s share of U.S. GDP would be fairly modest. Here’s Paul Krugman:
Last year the U.S. ran a manufactures trade deficit of around 4 percent of GDP. Suppose we assume that this deficit subtracted an equal amount from spending on U.S. manufactured goods. In that case what would happen if we somehow eliminated that deficit?
Well, it would raise the share of manufacturing in GDP — currently 10 percent — by less than 4 percentage points, because manufacturing firms buy a lot of services. A rough estimate is that manufacturing value-added would rise by around 60 percent of the change in sales, or 2.5 percentage points, implying that the manufacturing sector would be around a quarter larger than it is.
So even under the optimal scenario, if we totally eliminated the U.S. trade deficit, manufacturing would go from 10% of U.S. GDP to 12.5% — about the same as its share in 2007, and still far less than Germany, Japan, or China:
You can also see from this chart that other countries haven’t necessarily done an amazing job of protecting their industrial bases, as Nocera claimed; the manufacturing share of GDP is drifting down everywhere.
And this chart is also a hint that trade deficits and manufacturing aren’t as tightly linked as most people seem to think. France has become steadily less manufacturing-intensive since 1960, despite the fact that it historically had very balanced trade, and even ran big trade surpluses in the 90s and 00s. Meanwhile, out of all the countries on the chart, Japan has done the best job of preserving its manufacturing share since 2010, despite running a trade deficit over that time period.
So while we tend to focus a lot on the impact of trade on U.S. manufacturing, the truth is that there are much bigger forces at work there. Most of what the U.S. consumes is made here, and most of what the U.S. produces is consumed here, and eliminating trade deficits wouldn’t change either of those basic facts.
The American middle class was never hollowed out
Americans, as a people, are startlingly rich. This isn’t just true because a few very rich people pull up the average. If you take median disposable household income, the U.S. comes out way ahead of the pack:
Note that this includes taxes and transfers, including in-kind transfers like government-provided health care.
Other countries may have protected their manufacturing sectors, but middle-class Americans are richer than the middle classes in other countries.
And middle-class Americans’ income has not been stagnant over the years. Here’s real median personal income, which isn’t affected by the shift to two-earner families:
This is an increase of 50% since the early 70s. I wish it had been more, of course, and it has its ups and downs, but 50% is nothing to sneeze at.
As for middle-class wages, they’ve grown less than incomes, since some of the increased income has been in the form of corporate benefits (health care, retirement accounts), investment income, and government benefits. But they have still grown:
Wage growth has resumed since the mid-1990s, despite increasing trade deficits. Note that the China Shock, which threw millions of manufacturing workers out of their jobs, utterly failed to stop wages from resuming their upward climb. Wage stagnation and hyperglobalization just don’t line up, timing-wise. Jason Furman has another good chart that shows this very clearly:
A lot of commentators have gotten so used to the idea that incomes are stagnant that they have trouble believing this data is correct. But as Adam Ozimek points out, the Economic Policy Institute — a pro-union think tank that frequently complains that wages are too low — chooses a very similar measure for median wages. EPI writes that wages “have not been stagnant”, but “have…been suppressed”.
And when we look at the lower percentiles of the wage distribution — the working class and the poor — we see that they’ve grown even more strongly, by over 40% since 1996:
A $4/hr. raise (adjusted for inflation) might not sound like a big deal, but for a poor person it’s pretty huge.
Of course, as Autor et al. show in their famous “China Shock” paper, the harms from Chinese import competition were concentrated among a few workers in a few regions. 2 million workers were only 1.5% of the U.S. workforce at the time, but for that 1.5%, being thrown out of good manufacturing jobs was a heavy blow.
But even in those unlucky regions, the negative effects don’t look to have been permanent. Jeremy Horpedahl points out that wages for the poor in Flint, Michigan and Greensboro, North Carolina — two areas that Nocera claims were “hollowed out” — have actually increased, while middle-class wages have risen in the latter:
How are the American middle class and working class prospering, if the good manufacturing jobs of yesteryear are all gone? Talmon Joseph Smith scoffs at “service economy jobs”, and Autor et al. find that manufacturing workers displaced by Chinese imports often took crappier, lower-paid jobs in the service sector.
But that describes the 2000s. The 2010s and 2020s have been very different. Deming et al. (2024) show that over the last 15 years, the boom in low-skilled service-sector jobs has gone into reverse, and Americans are instead flooding into higher-skilled professional service jobs:
It took a couple decades, but we’re finding that Bill Clinton was right — the average American is smart and competent enough to do knowledge work. And it’s being reflected in wages and incomes.
Now, none of this is to say that manufacturing is unimportant. It’s important for national defense, obviously. I also think it’s important for building a balanced, well-rounded economy — adding high-tech manufacturing on top of America’s knowledge industries would make us even richer, and would help us pump up exports and take advantage of multiplier effects. Manufacturing is also ripe for a productivity boom after decades of stagnation.
But the master narrative of protectionism is simply much more myth than fact. Yes, Chinese import competition hurt America a bit in the 2000s. But overall, globalization and trade deficits are not the main reason that manufacturing’s role in the U.S. economy has shrunk. Nor has globalization hollowed out the middle class — because in fact, the middle class has not been hollowed out.
Once we accept that this common protectionist narrative is deeply flawed, we can begin to think more clearly about trade policy, industrial policy, and a bunch of other things.
Most discussions that I see about China these days are about U.S.-China competition, or the question of whether China’s economy will reign supreme (my answer: Probably, yes, because it’s really big). But there’s another strain of discourse that’s kind of interesting, which is whether China is the Country of the Future, in terms of technology and urbanism.
In my experience, these discussions are usually pretty vague and confused, jumping back and forth between architecture, transportation, consumer technology, production technology, art, pop culture, soft power, urban design, and a bunch of other topics. That doesn’t mean I think the topic is worthless; vague and confused discussions can be fun! But I thought I’d try to think about Sinofuturism a little more systematically.
As far as I can tell, the recent burst of Sinofuturism seems to come from four main sources:
China’s new high-tech industrial model
The legacy of China’s real estate boom
A charm offensive by China
The election of Donald Trump
In the early 2020s, the economic model that had sustained Chinese economic growth since 2008 basically collapsed. This model was based on massive real estate investment — the biggest development boom in the history of the world. Real estate sales funded local governments, so local governments basically approved and supported any and all development that would increase the value of land. Meanwhile the Chinese central government encouraged banks to lend to developers as a way of sustaining the macroeconomy through a series of shocks. This predictably led to an eventual financial bubble and crash when the loans used to finance this incredible development boom outran the ability of real estate to generate economic returns. There was a big bust in 2021-23, and growth slowed down:
China’s leadership responded to this slowdown by going all-in on high-tech manufacturing. At Xi Jinping’s behest, the country’s banks poured untold amounts of money into sectors like autos, semiconductors, machine tools, robots, electronics, batteries, aircraft, and all kinds of other stuff. The government supported the boom with subsidies as well, though I think we often tend to overemphasize its role relative to the private initiative of companies like BYD, Xiaomi, and DJI.
That lending boom has since cooled off a bit, but it was enormous during 2021-23, and industrial loans continue to grow at a fairly rapid clip:
All that lending fueled a wave of investment in the “technologies of the future”. Many of those were production technologies — the machine tools and robots in the highly automated Chinese factories that you can see in videos like this one:
And some are consumption technologies, like the high-speed rail network that’s bigger than all the networks in the rest of the world combined:
China’s lax regulatory climate — partly a result of cozy relations between local government and corporations, partly an intentional result of the central government’s high-tech push — has made the rollouts of these technologies faster and more widespread than in developed countries, where things like noise complaints and safety concerns predominate.
The electronics manufacturing boom (which actually predates the more recent high-tech push) has also resulted in a glut of cheap LEDs, which many Chinese developers have plastered all over their high-rise buildings and malls. This might be partly cultural and aesthetic, but it’s largely an attempt by cities and companies to advertise themselves to businesses and consumers both at home and overseas. Videos of these “cyberpunk” nighttime cityscapes have proliferated across the internet:
The second big reason for the boom in Sinofuturism is a government charm offensive. A number of aggressive Chinese actions in the late 2010s and early 2020s — the claiming of the South China Sea and pieces of Indian territory, the crushing of Hong Kong, the rise of “wolf warrior” diplomats, China’s soft support for the Russian invasion of Ukraine — led to a rise in negative perceptions of China throughout the world, in both developed and developing countries. This probably contributed to a massive exodus of foreign capital from the country, as multinational corporations scrambled to diversify and de-risk themselves.
China’s government has responded with a series of “charm offensives” to increase the country’s “soft power” around the world. Part of the message is that China is a positive force in the global economy, promoting free trade, fighting climate change, spreading high technology, and offering infrastructure investment to developing nations. And part of the message is that China is the country of the future — a technological and economic powerhouse whose rise is inevitable and should be admired rather than resisted.
This charm offensive is now getting a boost from a flood of pro-China content by Western influencers. Fewer foreigners are living in China, and the number of tourists visiting the country has returned to near its pre-pandemic level. Yet there has been a massive proliferation of videos, mostly by foreigners, saying “I visited China, and it wasn’t what I expected at all!”, or “I visited China, and America is COOKED!” Here are a couple of examples:
The most famous of these, by far, is the recent series of videos by the popular internet personality Darren Watkins, better known as iShowSpeed:
An obvious question is whether these folks are getting paid by the Chinese government to make videos that support a Sinofuturist narrative. In fact, some are, especially the ones made by Western expats living in China. The New York Times reported on this phenomenon back in 2021:
The videos have a casual, homespun feel. But on the other side of the camera often stands a large apparatus of government organizers, state-controlled news media and other official amplifiers…State-run news outlets and local governments have organized and funded pro-Beijing influencers’ travel, according to government documents and the creators themselves. They have paid or offered to pay the creators. They have generated lucrative traffic for the influencers by sharing videos with millions of followers on YouTube, Twitter and Facebook…With official media outlets’ backing, the creators can visit and film in parts of China where the authorities have obstructed foreign journalists’ reporting.
In addition, it’s possible that China is using its control of the TikTok algorithm to promote videos like this — or, more likely, that would-be influencers hoping to go viral simply think TikTok will promote them if they spout a bunch of wide-eyed Sinofuturism.
But government propaganda is highly unlikely to explain all, or even most, of the boom in Sinofuturist videos.2 It’s likely that these videos are just a meme, much like travel to Japan became a meme in the 2010s.
China’s big tech push helps the meme, since all those futuristic cars and robots and drones give foreigners more to fawn over. But the sudden perception of China as the “country of the future” probably owes even more to the property and infrastructure booms that just ended. Neither the forests of LED-covered skyscrapers, nor the endless miles of high-speed rail, nor the vast shiny new malls that dot China’s city centers would exist if China’s banks hadn’t gone on the mother of all lending binges after 2008. Robots and drones are cool, but the built environment is what dominates travelers’ impressions of any country:
In other words, China’s real estate era may have ended in tears for some developers and local governments, but it left behind the physical edifice of a very futuristic-looking country. When people go to China and see the future, what they’re really seeing is the country’s recent past.
The final tailwind for Sinofuturism is the election of Trump, and the geopolitical ructions that have resulted. Trump has very loudly and flamboyantly turned America against Europe — bashing European countries in his rhetoric, hitting them with tariffs and tariff threats, threatening to pull out of NATO, supporting right-wing opposition parties, cozying up to Russia, and so on.
A few European leaders have responded by trying to get closer to China instead, but most are still too wary of the CCP. But European intellectuals are a different story. Some European thinkers resent the smug American superiority that resulted from decades of Cold War patronage, and are overjoyed to see America eclipsed. That geopolitical backdrop can easily color perceptions of a country, making even the pedestrian seem sublime.
In turbulent and troubling times, people instinctively grasp for some sort of future to believe in — some positive vision to hold on to. The U.S. and Europe right now don’t have much of a futuristic vision to offer; America continues to inflict wound after wound on itself due to its intractable cultural and partisan divides, while Europe is mired in economic stagnation and is struggling to defend itself against a much smaller, poorer Russia. Sinofuturism might not have been Western intellectuals’ first choice for an alternative, but if it’s a choice between Sinofuturism and bleak nihilism/pessimism, some will choose the former.
But what will this Chinese future actually look like, two decades or four decades from now? Here, I think there’s less than meets the eye.
First, let’s talk about Chinese urbanism. Westerners who go to Asia and see a lot of high-rises and electric signs often simply assume that all Asian cities are basically the same. But the way China builds its cities is very different from how Japan does it. Japan’s cities are hyper-agglomerations of dense mixed-use neighborhoods packed with small businesses. China’s cities sprawl much more. Here’s what Peter Calthorpe wrote in 2016, when China was still in the middle of its massive building spree:
One thinks of the high-rise, high-density buildings in many Chinese cities as inherently urban, but they are not. Smart growth and urbanism is more about connections, human scale, walkability, and mixed uses than it is about gross density. China’s pattern of gated superblocks (often over 40 acres, or 16 hectares, each) and isolated uses is actually a high-rise version of the American suburb…
In China, single-use residential blocks of largely identical units are clustered in superblocks surrounded by major arterial roads. Vast distances separate everyday destinations and create environments hostile to pedestrians. Sidewalks rarely are lined with useful services, and crossing the street is death-defying. Job centers are distant and commutes are long, especially for lower-income groups. In major Chinese cities, the gridlock expands to all hours of the day…
In the last five years, China has built more than 30,000 kilometers of expressways…China’s love affair with the car has blossomed into a torrid romance…[L]ike the U.S. cities of the 1950s and 1960s, Chinese cities are working to accommodate the explosive growth of automobile travel by building more highways, ring roads, and parking lots.
Outside of Beijing and Shanghai (and sometimes even within), you can tell that these skyscrapers were put up by a country with a GDP per capita of $10,000…These endless rows of skyscrapers, put up in the construction frenzy of the last few decades, are ugly - boxes of mostly concrete with visible blight and discoloration all over them. If the great construction binge is indeed over, it'll be a shame that China's infrastructure was built out during a period of particularly uninspired architecture…The city is dominated by these enormous apartment complexes - blocks of 10 adjacent 30-story buildings demarcated by 8-lane roads…This layout seems designed partly for social control.
A recent article by the ever-excellent Alfred Twu explains China’s urban layout in more detail:
Despite their strong visual dissimilarities, new construction in China and the US share one basic feature: they each support roughly the same population density, as their floor area ratio is similar.
…In contrast to the mid-rises that abound in US cities today, Chinese cities favor what is known as the 小区 (xiaoqu) or microdistrict. These tower-in-the-park-style residential developments comprise several high-rises on roughly 15 to 20 acres, surrounded by wide arterial roads…[X]iaoqus are built as gated communities. While primarily residential, the microdistricts also provide stores and services for residents, including schools…However, they do not contain offices or industry, and retail is limited to neighborhood-serving services, such as convenience stores and restaurants…
The sunlight requirement results in large spaces between buildings, limiting the floor area ratio to around 2.0 to 4.0, even for high-rises…closer to 2.0 than to 4.0 once internal roads are factored in…[T]hese buildings are unique to the People’s Republic.
Twu points out that since this urban form is the result of regulation rather than culture,3 China could theoretically revamp its cities into something denser, more mixed-use, and more walkable, like Tokyo, Hong Kong, or Singapore. But since the big real estate boom is over, the financing or political will for such redevelopment is unlikely to appear. China has already built itself. And even more than the U.S., China has built itself into a highly suboptimal configuration.
America’s sprawling suburbs are the target of much derision from urbanists worldwide, but they have a charm that’s all their own — huge luxurious houses serve as social gathering places, cars provide mobility, lawns and parks provide the illusion of living close to nature. That lifestyle exerts a magnetic pull; Americans of all races and social classes still want to move (and are actually moving) out to the ‘burbs. And this pull is worldwide — newly developed outlying areas of Europe, Asia, the Middle East, and everywhere else look a lot more like American suburbs than they look like Tokyo or Paris. Like it or not, 20th-century America invented an urban future that came to dominate the world.
But China will not do the same. Who wants to live in a xiaoqu? You live in a smallish apartment, like you would in NYC or Tokyo, but instead of being within walking distance of some of the world’s most vibrant shopping and entertainment districts, you’re in a gated community. The only things close to you are a sanitized communal lawn and a couple of boring stores for basic necessities. To get to anything remotely interesting — which in China generally just means a shopping mall — requires walking long distances over huge arterial roads to a train station, or taking your car. You get all of the isolation of the American suburbs with none of the luxury. You’re basically in Cabrini-Green but without the crime.
I suspect that very few people around the world are going to want to live in Chinese-style microdistricts. And I suspect that in twenty years or so, the children of the current Chinese generation will see this urban form as sterile, cramped, and confining. Except it will be very hard to rebuild Chinese cities into either the American or the Japanese model.
As for the spectacular beauty of Chinese downtowns, I suspect that Chinese people themselves are going to get tired of the light pollution that wows the tourists. Already, residents of Shanghai, Chongqing, and other cities have begun to express a preference for fewer gratuitous displays of garish illumination.
China’s building boom will certainly leave behind plenty of interesting structures. But because the boom was driven by overabundant capital, many of these designs were created more as advertisements for the developers than as places that are actually nice to walk around in.4
And the buildings themselves won’t always look as nice as they do now, either. I’m no Brian Potter, but even I know that over the course of about thirty or forty years, reinforced concrete tends to weather, crack, and spall. Most of urban China is very humid, and pollution levels are still fairly high; this will damage many of the nice new surfaces of China’s buildings, most of which were built in the last two decades. Buildings that turn out to have been built with substandard materials — and there are some of those out there — will go downhill earlier.
At that point, China will have to choose between A) expensive upkeep and redevelopment to keep cities looking new, or B) patching up and painting over old buildings to save money. Japan actually chooses the former, which is why it still looks nice — but this eternal construction and beautification costs a lot of society’s resources. Hong Kong and Taiwan have chosen the latter, and as a result, people gush a lot less about the built environment when they visit those cities these days.
I know it’s fun to go to a foreign city, look around at the buildings, and make grand sweeping judgements about the relative strength of civilizations over the next thousand years. But next time you find yourself gaping at a sparkling new high-rise in Shenzhen or Chongqing or Dubai, remind yourself: “This too shall spall.”5
As for transforming global culture — a key part of soft power — China has yet to really do this. Their censorship regime — an inescapable part of their authoritarian system — is constantly hamstringing or deterring Chinese creatives. As China gets richer, its people will spend more on entertainment, and entertainment industries will emerge. But I suspect this censoriousness will hamper the emergence not only of truly deep and creative works of art, but also of creative new forms of popular entertainment.
20th century America invented 3D animated children’s movies and third-person action-adventure video games; China’s two most celebrated hit cultural products over the past few years have been a 3D animated children’s movie and a third-person action-adventure video game. And so far, global appeal has been elusive; Sinofuturists who trumpeted the fact that Ne Zha 2 earned more at the box office than any Disney movie failed to mention that over 98% of that revenue was earned inside China.
As for China’s technological futurism, there I have more confidence. China’s mastery of the core technologies of the electrical age — batteries and motors — will continue to produce wonders, especially because America has voluntarily forfeited leadership in these technologies for cultural reasons. Personal air taxis, ultra-fast car chargers, and humanoid robots that can do flips are not the last whiz-bang gadgets you’ll see come out of China. Nor will China’s innovation be limited to the electrical sphere. And China’s massive research spending spree, together with Trump’s deep cuts to American science funding, mean that the future has never looked brighter for Chinese scientific supremacy.
But here, too, I would be cautious about projecting out more than a decade or two. To the degree that scientific progress relies on human capital, China is going to start having a tough time in the late 2040s. After the big “Alpha” generation works its way through the system, population will relentlessly decline:
(Of course, AI researchers may replace human ones, but at that point China’s fundamental advantage — its incredibly huge population of talented engineers and scientists — starts to become less important.)
Also, much of China’s technological leadership has a darker side. All the tourists love the electric cars and the high-speed trains. But China is also the global leader in electronic surveillance, to the point where they’ve basically turned their whole country into a panopticon. China uses the internet to repress dissent, and AI will make that task easier. China’s government has also shown an eagerness to use the internet to spread dissension and stir up hatred in other societies around the world, I expect AI to make that much easier as well.
Is that a future worth putting our hopes in? Would we really trade our right to dissent and our last shreds of privacy for a ride in an air taxi and a delivery robot at our door? Why should we look forward to the march of science and technology if it doesn’t promise to empower the mass of humanity to live their lives as they see fit? Technological contrivances whose purpose is to enslave me, my family, and my friends do admittedly inspire a certain kind of dreadful awe, but I would rather read that science fiction novel than live in it.
This, ultimately, is what Sinofuturism is lacking — the promise of ennoblement. People now make fun of the American suburbs of the 1950s, or use them as an object of misplaced nostalgia. But if you were to look at that lifestyle — the house, the car, the TV, the telephone — you could see the seed of a way of life so appealing and so free that it would eventually become the global standard. Right now, China is a beautiful place to visit, but the Sinofuturists who gush about its neon cities and its magnificent technology demonstrate a notable reluctance to move there.
Interestingly, Japan did something a bit similar when its growth slowed after the oil shocks of the 1970s and again after the real estate bust of the 1990s. MITI, the industrial policy ministry, decided that the country needed to shift from heavy and chemical industries to knowledge-intensive industries, which included electronics, computers, and so on. This was somewhat successful — a decent amount of the futuristic Japanese stuff that wowed us in the 80s, 90s, and early 00s was the result of this push, or was the result of parallel efforts in the private sector. It probably led to William Gibson’s visions of a Japan-led cyberpunk future. But although the high-tech manufacturing push was enough to keep Japan at the global technological frontier for a long time, and may have given Japanese growth a minor boost, Japan never returned to the rates of growth seen during its catch-up phase.
We know it’s not culture because China’s unregulated “urban villages” and Chinese-descended places like Hong Kong, Taiwan, and Singapore all build much higher density and much more mixed-use spaces, while relying less on cars.
The art exhibition that the Sinofuturist VC David Galbraith described as “sublime” is a bare gray concrete rotunda situated beneath a bare white concrete tunnel pointed at an empty sky. It’s the kind of brutalism that hipsters and culture snobs love to sneer at in the West, but suddenly admire when it’s a foreign country. Then again, Galbraith is British, so this exhibit might simply conform to British tastes more than to American ones.
China’s massive high-speed rail network will also be an incredible challenge to maintain (read this Casey Handmer blog post to understand the details). Unless ridership stays very very high even on the secondary lines, China’s HSR will probably end up being a significant fiscal drag.
Last July, as the presidential campaign was nearing its climax, I wrote a post trying to explain why some people in the tech industry had turned to the right:
Now, in the wake of DOGE, the whole country knows about the Tech Right. Most recently, Semafor’s Ben Smith wrote a story about the group chats that many of the folks in the Tech Right — including my podcast co-host Erik Torenberg and my college friend Balaji Srinivasan — use to talk to each other.
It’s an interesting story about how the internet has fragmented. In the 2010s, discussions like this might have happened on Twitter or other public forums; now, they’re held in the modern-day equivalent of a smoky back room.1 Ben’s article presents group chats as an important, world-changing phenomenon, but really I think they’re a return to the way the world used to be. In 1935, conservative business leaders would gather at a house, or club, or other private space to rail against the labor movement or the New Deal. Tech Right group chats are not really any different than that.
In fact, I see the return to small private forums as a healthy development for public discourse; public discussions almost always devolve into shouting matches between tribes of strangers, exacerbating social divisions. Filter bubbles aren’t so bad.
But like the conservative businessmen who railed against the New Deal in the 1930s, the Tech Right seems to be making little headway on their policy objectives. This might be because tech people are just bad at politics.2 But I think the Tech Right’s objectives simply didn’t align very well with the mood of the nation — or the priorities of Trump’s loyalists and his activist base.
What the nation wants doesn’t appear to be that similar to what the Tech Right wants, and those differences are proving more important as the euphoria of Trump’s victory fades.
Elon Musk’s foray into politics flamed out
The most prominent figure of the Tech Right, of course, is Elon Musk. In the days following Trump’s election, Musk emerged as a powerful and dynamic figure. Some even saw him as a co-president, a “shadow president”, or one of two “consuls” — basically, ruling alongside Trump as an equal. Musk’s peerless record as America’s most brilliant industrialist promised to give the MAGA movement a degree of competence it hadn’t enjoyed during Trump’s first term in office. And as Musk’s DOGE began to purge the government of progressive ideology and fire civil servants en masse, popular attention shifted to Elon as the administration’s main mover and shaker.
But the last two months have seen Elon’s star fall substantially, at least as far as this administration is concerned. First, DOGE’s firing blitz was largely stymied in the courts; government workers are mostly under contract, so they can’t just be fired at will. Musk’s calls to impeach the judges ruling against DOGE fell on deaf ears.
Then it turned out that DOGE hadn’t actually been able to cut government spending by an appreciable amount. Early promises of trillions of dollars in DOGE savings were cut down to a paltry $150 billion, and even that number will probably shrink more. In fact, the U.S. government is actually spending more this year than it did last year under Biden:
Even though Elon’s signature initiative mostly floundered, it tanked his reputation with the public. Protests against Tesla mushroomed all over the world, and some Teslas were even attacked and burned. Bernie Sanders started a “Fighting Oligarchy” tour, building grassroots energy against Musk. Tesla’s sales suffered globally, and absolutely cratered in much of Europe:
Economics journalists, like any writers, aren’t perfect. Perhaps in a previous age, people thought that everything they read in the news was exactly true; perhaps some still do. But reporting is a human activity, and humans make mistakes. In order to get the true story, you have to read multiple sources, and be skeptical of what you read — and even then, mistakes will slip through.
So the purpose of this post isn’t for me to be a pedantic know-it-all, or to insult the economics journalism profession as a whole, or to call out specific writers. But there’s one simple, elementary mistake that almost all econ reporters make very consistently, over and over. And unlike most mistakes, this one has probably had serious negative consequences for American economic policymaking. Therefore I feel like I have to speak up here, and express my frustration a little.
The mistake econ reporters are making is claiming that imports subtract from GDP. Imports do not subtract from GDP. And yet again and again, economics journalists say that they do.
This week, U.S. GDP data for the first quarter of 2025 (January through March) was released. The data showed that the U.S. economy shrank at an annualized rate of 0.3%. But almost every economics journalist and columnist reported that this decline was due to a surge of imports, as American companies rushed to stock up on foreign-made goods ahead of Trump’s tariffs.
[T]he main driver of the first-quarter contraction was Trump’s trade war…Businesses rushed to get ahead of tariffs…Imports rose at the fastest pace since the third quarter of 2020…Imports subtract from the Commerce Department’s calculation of GDP, since they represent spending on foreign-made goods and services. [emphasis mine]
The GDP figures showed imports surged an annualized 41.3% — the biggest advance in nearly five years. Because these goods and services aren’t produced in the US, they are subtracted from GDP. [emphasis mine]
Imports subtract from GDP, so the contraction in growth may not be viewed as negatively given the potential for the trend to reverse in subsequent quarters. [emphasis mine]
This economic slowdown came primarily from a dramatic increase in imports — which count against GDP — as businesses rushed to purchase foreign goods ahead of President Donald Trump’s promised tariffs. [emphasis mine]
All of these writers — and many, many more that I didn’t cite here — got it wrong. Imports simply do not subtract from GDP. That is not how GDP works.
Last September, I wrote a post explaining why imports don’t subtract from GDP. I don’t want to just write that post all over again, so here it is:
The short version of the story is this: GDP is a measurement of everything produced within a country’s borders. Imports are produced outside a country’s borders. So imports don’t add to or subtract from GDP. Imports simply aren’t counted in GDP at all.
Let’s think about some examples. Suppose an American buys a TV made in China for $1000. Remember that GDP can be calculated as the sum of consumption, investment, government purchases, and net exports:
GDP = Consumption + Investment + Government Purchases + Net Exports
When the American buys the $1000 TV from China, U.S. consumption goes up by $1000. And U.S. net exports go down by $1000, since “net exports” means exports minus imports. The increase in consumption exactly cancels out the fall in net exports. So the total contribution of the imported TV to U.S. GDP is zero.
Let’s take another example, which is more like what actually happened in Q1. Suppose an American company, Best Buy, decides to buy a Chinese TV and put it in a warehouse, because it knows that tariffs are coming soon. That purchase counts as inventory investment. So investment goes up by $1000. And just like in the previous example, net exports go down by $1000. The two cancel out, and the total contribution of the imported TV to U.S. GDP is zero.
In other words, if a bunch of U.S. companies were trying to stock up on imports ahead of the tariffs, that should register as both an increase in (inventory) investment, and as a decrease in net exports. The two should exactly cancel out. Those imports should not subtract from GDP, since they add to investment even as they also subtract from net exports.
Here’s a simple analogy: Does putting on shoes make you lose weight? No, it doesn’t. And yet when you weigh yourself with your shoes on at the doctor’s office, and you want to know your actual body weight, you subtract the weight of your shoes afterwards. Imports are to GDP what shoes are to your weight on the scale at the doctor’s office — just something superfluous that gets added in for the sake of measurement convenience, and which has to be netted out again later to get the true number.
Putting on heavier shoes doesn’t make you a thinner person, and importing more goods from abroad doesn’t make your country’s economy any smaller.
So it’s just not true that America’s economy shrank in Q1 because “imports are subtracted from GDP”. That’s false. Every time an economics reporter writes those words, it’s an error that should be corrected.
(I should note that The Economist, alone out of all the major news outlets I looked at, got the story completely correct. Good job, guys!)
Why does almost everyone keep getting this wrong? And why does it matter?
Why does almost every economics writer get this wrong? The simplest answer is herd behavior.
Back when IBM was the biggest, most important tech company, there was a saying in stock trading: “Nobody ever gets fired for buying IBM.” Similarly, practically everyone in econ journalism writes “Imports subtract from GDP,” so if you write that too, no one is going to give you grief about it. There’s safety in numbers; you won’t be singled out.
It’s easy to trace the origins of the mistake, too. The basic formula for GDP, which government agencies report and every econ writer knows, is just GDP = C + I + G + NX. So when government agencies report this breakdown, it’s pretty much automatic for econ reporters to write “Consumption increased by this much, investment by that much”, and so on. So if the trade deficit widens, it’s just standard practice to say “Net exports contributed negatively to GDP this quarter.” You’re just dutifully reading off each of the standard components.
And because net exports are just exports minus imports, it’s the tiniest of hops from saying “Net exports subtracted 5% from GDP growth” to saying “Imports subtracted 5% from GDP growth”. And if you say it that way, it must mean imports subtract from GDP, right? Right?
In fact, I can’t entirely blame econ journalists for making this mistake, because sometimes the government makes it too!
When the Bureau of Economic Analysis (BEA) measures economic output, it categorizes spending with the National Income and Product Accounts (NIPA). Some of this spending, which is counted as C, I, and G, is spent on imported goods. As such, the value of imports must be subtracted to ensure that only spending on domestic goods is measured in GDP. For example, $30,000 spent on an imported car is counted as a personal consumption expenditure (C), but then the $30,000 is subtracted as an import (M) to ensure that only the value of domestic production is counted…[T]he purchase of imported goods and services has no direct impact on GDP.
Except not everyone who works for the government gets this right. Whoever wrote the most recent data release for the Bureau of Economic Analysis got it completely wrong:
The decrease in real GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP. [emphasis mine]
And they included this misleading chart, with the mistake repeated in the captions below the figure:
Why did whoever wrote the release for the BEA get this so wrong? I don’t know. But if the government is putting out data releases saying “Imports subtract from GDP”, you can hardly expect the average econ journalist not to do it, can you? Ultimately, the buck stops with the BEA; it’s their job to educate reporters about how to report on the data they release.
Anyway, some econ writers are sort of tacking in the direction of getting things right, but aren’t quite there yet.1 Here’s Jonathan Levin of Bloomberg Opinion:
The latest numbers were overwhelmingly dragged lower by a surge in imports…GDP math seeks to measure the total production within a country’s borders, so statisticians add exports and subtract imports[.]
This is self-contradictory. If GDP math measures the total production within a country’s borders, why should a surge in imports drag GDP lower?
[T]he decline in G.D.P. in the first quarter was driven almost entirely by a huge increase in imports as consumers and businesses tried to front-run Mr. Trump’s tariffs. That surge shaved nearly five percentage points off G.D.P. growth in the first quarter…
G.D.P….is meant to measure only goods produced domestically, not imports, which are produced abroad. But rather than measure production directly, the government counts all the goods and services sold in the country, and then subtracts the ones that were made overseas. (It also adds in exports, which are produced domestically but sold to foreign buyers.)…That means that, in theory, imports neither add nor subtract from G.D.P. Anything that is imported to the country should show up elsewhere in the quarterly data either as consumer spending or as an unsold product held in inventory — both of which are counted as additions to G.D.P.
The second paragraph here gets it right, but it directly contradicts the first paragraph. If imports aren’t counted in GDP, then how could a surge in imports “[shave] nearly five percentage points off G.D.P. growth in the first quarter”? It cannot.
Anyway, I asked AI this question, just to see if all the people getting it wrong had poisoned the training data. Google’s AI search assistant got it right:
But OpenAI’s top-of-the-line o3 model gave a confused, muddled answer that contradicted itself:
So there’s still a lot of work to be done in terms of expunging this common error from the world of econ reporting, but I do see some hopeful signs of progress.
The next question you may ask is: Why does any of this matter? As an angry graduate student thirteen years ago, I would have written this post out of pure pedantry, but I’m long past that. The only reason I care so strongly about this is that this common error seems to be influencing national policy in a fairly disastrous way.
The St. Louis Fed’s explainer on imports and GDP warned us about this:
[T]he [GDP] equation, as [typically] stated, can lead to a misunderstanding of how imports affect GDP. More specifically, the expenditure equation seems to imply that imports reduce economic output. For example, in nearly every quarter since 1976, net exports (X − M) have been negative…which seems to imply that trade reduces domestic output and growth…This can influence people’s perspective on trade.
Well, yes. Trump’s top economic advisor, Peter Navarro, claims that imports subtract from U.S. GDP. Trump doesn’t speak in such clear terms, but routinely says that countries that run trade surpluses with the U.S. are “ripping us off.”
It’s based on this very idea that Trump and Navarro have saddled our country with boneheaded tariffs that are going to hurt the American economy. And when MAGA types want to defend the tariffs, they often trot out the mistaken idea that trade deficits make our country poorer.
If econ reporters hadn’t continuously said that “imports subtract from GDP” for decades on end, this mistaken idea might not have embedded itself so strongly in the MAGA people’s heads. The tariffs are based, at least in part, on a simple accounting mistake. The least econ writers could do is to not reinforce this mistake every time a new quarterly GDP release comes out.
So what’s really going on with imports and GDP?
At this point, if you’re an econ writer, you might be reading this and asking: “So, what should I report about imports and GDP?” It’s a fair question. When you see imports surge and GDP drop, you get the strong inkling that there’s some kind of important relationship between the two. So what is it?
In fact, there are three plausible candidates for what’s going on there:
Measurement error
Companies diverting resources from domestic purchases to import stockpiling
Imports clouding up the forecasting picture
Let’s talk briefly about each of these.
First, measurement error. A lot of people are arguing that a last-minute surge of imports is failing to show up in inventory investment or consumption yet, so that it looks like imports are subtracting from GDP, even if they’re really not. For example, here’s Ben Casselman:
In practice…the government is good at counting both imports and consumer spending, but often must rely on rough estimates for inventories, especially in preliminary data. The first quarter figures showed only a modest increase in inventories, despite anecdotal reports of companies stockpiling products and materials ahead of tariffs.
Why, then, did GDP fall? It may have been because of measurement problems. Inventories and consumption are harder to keep track of than imports… The Census Bureau tracks trade as it flows through customs; it estimates consumption and inventories using less precise sources, including voluntary surveys. Mr Trump’s “Liberation Day” tariffs loomed right at the end of the quarter. Perhaps a last minute rush to beat the deadline was picked up at the border but nowhere else. If so, then the GDP figure is likely eventually to be revised up.
Second, even though imports and GDP have no accounting relationship, it’s possible for them to have a behavioral relationship — which is a very different thing. The economic forces that cause a surge in imports could also cause domestic production to fall at the same time.
Suppose American companies wanted to stock up on foreign goods in Q1 before Trump’s tariffs hit. They might do this by temporarily stocking up on fewer domestically made goods that quarter. Or they might install foreign equipment, and pause their capital expenditures on domestically produced equipment. Either way, this would mean that investment in domestically produced stuff would fall. And that would reduce GDP that quarter.
[I]t’s important to clarify that [an] import surge does not itself shrink the economy—GDP is an estimate of domestic production, and is not affected by purchases from abroad…consumers rushing out to buy foreign-made clothes will show up as an increase in imports (a negative “contribution” to GDP) and an increase in consumption (an equal-and-opposite positive “contribution” to GDP) and have no net effect on economic growth.
In [the first quarter of 2025], however, the surge in imports primarily manifested as a surge in business inventories—it was corporations, not consumers, doing most of the stockpiling. The positive contribution from inventory growth was the highest since late 2021, “offsetting” a bit less than half the jump in the trade deficit. Fixed investment of foreign equipment also helped significantly “offset” the increase in imports at the start of this year…
If a construction company rushed to buy a bunch of wood from Canada ahead of tariffs, that would show up as an increase in imports and an increase in inventories which cancel each other out. But if that company slowed down construction so it could afford to stockpile inputs, that would show up as a hidden drag on GDP in the form of lower investment. In other words, tariff front-running can indirectly slow the economy.
Joey is exactly right, and I think this is the most plausible theory for why GDP shrank in the first quarter. The Economist also mentions this possibility.
Note that this isn’t typical behavior, and — as Joey points out — it can’t explain all of the slowdown in Q1. So it’s still not right to say “imports subtract from GDP”. Behavioral effects and accounting identities are very different things.
Finally, Q1 is just one quarter. What we really probably want to know is whether there’s a recession coming, or whether this GDP decline was a one-off. Jason Furman likes to use an alternative measure called Final Sales to Private Domestic Purchasers — basically, consumption plus investment — to forecast future growth.
FSPDP takes GDP, removes government spending, removes exports, and then adds imports in. It’s just consumption plus investment — both of which include imports. In other words, the surge in imports this quarter might predict higher GDP growth in the quarters to come.
On the other hand, the reason FSPDP is a good forecaster of the future economy is that it’s basically just an indicator of underlying aggregate demand. If Trump’s tariffs cause a supply shock instead, FSPDP might fail to forecast the recession that results.
So anyway, here are three useful and informative things econ reporters can say about the effects of imports on the Q1 GDP data:
“Inventory investment is slow to measure, so we might see big upward revisions to Q1 GDP, when the last-minute surge in imports finally gets reflected in inventories.”
“Companies eager to stockpile imported goods ahead of Trump’s tariffs probably diverted spending away from domestically produced goods and services, which hurt GDP.”
“Strong imports are typically a sign of strong underlying demand in the economy, so we could see the economy bounce back strongly in three months.”
These ideas are all somewhat theoretical, but they’re all on a lot more solid ground than “Imports subtract from GDP”, which is just plain wrong.
Richard Feynman remarked on a similar phenomenon among early 20th century physicists, who were trying to measure the charge of the electron:
Millikan measured the charge on an electron by an experiment with falling oil drops and got an answer which we now know not to be quite right. It’s a little bit off, because he had the incorrect value for the viscosity of air. It’s interesting to look at the history of measurements of the charge of the electron, after Millikan. If you plot them as a function of time, you find that one is a little bigger than Millikan’s, and the next one’s a little bit bigger than that, and the next one’s a little bit bigger than that, until finally they settle down to a number which is higher…Why didn’t they discover that the new number was higher right away? It’s a thing that scientists are ashamed of—this history—because it’s apparent that people did things like this: When they got a number that was too high above Millikan’s, they thought something must be wrong—and they would look for and find a reason why something might be wrong. When they got a number closer to Millikan’s value they didn’t look so hard. And so they eliminated the numbers that were too far off, and did other things like that.
When the standard consensus is wrong, people realize it’s wrong, but they tend not to break radically from that consensus; instead, they take small steps in the direction of the right answer.
The years of my youth must have been such a disappointment for sci-fi fans of my parents’ generation. They were raised on stories of spaceships soaring between the stars, and they grew up to see the space shuttle explode and humankind abandon the moon. They grew up expecting flying cars and robot servants, but as they reached middle age they were still trundling along the ground and doing their own laundry.
What happened in the 1970s that seemed to rob the future from the Boomer generation? Energy. With the end of cheap oil in 1973, and the failure of nuclear power to get cheaper as volumes scaled up, the dreams of the sci-fi authors of the mid-20th century failed to materialize. Those dreams had partially been based on fantasy physics (faster-than-light travel, gravity control, time travel),1 but partly they were based on the expectation that energy would keep getting more plentiful and engines would keep getting more powerful and compact. But in the 1970s, humanity suddenly stopped being able to harness more and more energy per person:
Limited by energy scarcity, humanity’s innovative efforts switched from atoms to bits; “technology” in 1970-2010 was defined by computers, software, and the internet. In 2011, Paul Krugman and Tyler Cowen were writing that the appliances in their kitchen hadn’t changed since they were children.
Science fiction writers anticipated this shift quite early on. The “cyberpunk” writers of the 1980s and 1990s — William Gibson, Neal Stephenson, Masamune Shirow, Bruce Sterling, Mike Pondsmith, Kojima Hideo, Konaka Chiaki, Vernor Vinge, and many others — didn’t envision a future entirely devoid of hardware innovations, but most of what they envisioned for the 21st century centered around advances in the internet, AI, robotics, and biotech.
That was the future I grew up expecting — a neon-drenched, mostly earthbound world where humans would mingle with robots, escape into digital fantasies, and modify their bodies. Instead of bold space explorers firing ray guns at alien conquerors, the heroic figures of my fantasies were hackers and street samurai, battling the nefarious plots of shadowy corporations, insane billionaires, and dystopian surveillance states.
Unlike my parents, I actually lived to see the future I imagined as a kid. Beginning in the 2010s, and accelerating in the 2020s, reality began to conform to the cyberpunk visions I grew up with.
We are living in the cyberpunk future
Though I’ll still go back and read some stuff from the 80s and 90s, I stopped reading new cyberpunk about a decade ago. Around that time it became clear that the pace of real technological change had overtaken authors’ imaginations; newly written cyberpunk fiction began to feel retrofuturistic, like someone writing about the present and getting it wrong. Meanwhile all I had to do to see fantastic techno-futures unfold around me was to read the news.
For the last two years, a giant animated sphere has loomed over the city of Las Vegas, occasionally taking the form of a titanic blinking eyeball:
Open up the video app on your pocket computer, and you can see videos of humanoid robots shooting machine guns at a metal-coated “cybertruck”:
Meanwhile, self-driving robot cars increasingly fill our streets. Here’s a photo I shot from the window of my own robot car, of a very different-looking type of robot car that I had never seen before:
It has become absolutely normal to see security robots of all shapes and sizes rolling through parks and shopping centers, mute sentinels with their camera eyes spinning. Police departments are beginning to use robots too — the Denver Police Department has a bomb-sniffing robot dog that also tries to get criminals to surrender to it:
Except in a few cities, robots aren’t ubiquitous yet, but they’re already generating some pretty cyberpunk stories. In Moscow, there were reports of a dog robot that was found selling drugs on the street, and shut itself down and wiped its memory when the police grabbed it . And here was an alert from a couple of years ago:
Meanwhile, the skies of our world have come alive with new kinds of low-flying aircraft. People are getting packages delivered by drones:
And just as the cyberpunks foretold, drones are taking over warfare. Finding themselves at a tremendous disadvantage in men and materiel, and facing a cutoff of American aid, the Ukrainians have responded by innovating furiously in the military drone space. Drones are increasingly replacing infantry, artillery, reconnaissance, long-range bombers, and everything else on the battlefield.
I’m not sure I’ve ever seen a more cyberpunk video than this documentary about a Ukrainian drone pilot:
(Meanwhile, I don’t know if they’ll be useful, but China has military drones that look like birds — something right out of the opening scene of John Shirley’s Eclipse.)
And the new aircraft are carrying humans around as well. Air taxis are soaring across the skyscraper forests of Chinese cities:
And at least one company will sell you a hoverbike that you can pilot yourself:
Even more than with robots, when drones are involved, the cyberpunk storylines just write themselves. There are rumors that Russian gangs, or perhaps just normal businesspeople (sometimes it’s hard to distinguish) have been using drones to assassinate their rivals. The threat of drone assassination, blackmail, and espionage has prompted some rich people to start installing anti-drone systems on their superyachts.
But if robots and drones are bringing cyberpunk to life in the streets around us, the advent of AI has turned the online space weirder than any except the most creative among us could have imagined.2
The proliferation of deepfakes has caused shared reality to crumble, and have opened up a Wild West of opportunities for political meddling, cybercrime, disinformation, pranks, and revenge. There was the case of the man who used AI to impersonate a high school principal and frame him for making racist remarks. In India’s democracy, deepfakes have become a common, widely accepted electioneering technique. In Indonesia, a political party created a deepfake of the dead dictator Suharto.
Deepfakes are only one small part of how AI is making cyberpunk a reality, just a couple of years after the first high-quality LLMs came out. People now walk down the street talking to AI companions. Scarlett Johansson has sued OpenAI for allegedly using her as the basis for a voice assistant. Artists have tried to “data poison” AI art programs using a program called Nightshade. And the Russians are trying to pour disinformation into search results in the hope of getting AI to learn and spread the disinfo for them.
But the most cyberpunk AI story I’ve seen so far is probably when a man’s AI girlfriend was named as his accomplice in a plot to assassinate the Queen of England.
As for body modifications, those are arriving more slowly than cyberpunk predicted. But a paralyzed man has a Neuralink implant that lets him multitask with a bunch of brain-controlled devices:
And an engineer named Ian Davis made himself a prosthetic hand:
It’s not just that cyberpunk predicted the ways we’d use technology. It did an amazing job at anticipating the aesthetics and the feel of a world in which, in William Gibson’s famous phrase, “The future is already here, it’s just not evenly distributed.”
Anyone who read cyberpunk as a kid probably knew, deep down, that there would be people who looked like this (I recommend clicking through to the video):
In the 1980s novels, of course, it was Japan that was the neon-drenched “country of the future”. But for a combination of electric lights, urban canyons, ubiquitous smog, maze-like layouts, and other staples of cyberpunk aesthetics, it’s hard to beat 21st-century Chongqing:
The future I expected to live in arrived, right on schedule, and I got to live in it. Not since the days of H.G. Wells and Jules Verne have science fiction fans gotten to live to see their dreams come alive like this.
That’s pretty amazing, if you think about it. For that world to materialize required a lot of key breakthrough inventions — deep learning, generative AI, lithium-ion batteries, rare-earth magnets, and others — that were in no way preordained. The cyberpunk writers got very lucky — and they also probably got some help from technologists themselves, who strove to create the wonders they read about as kids.
But while I’m grateful to be able to see all of those marvels come to life, the real world isn’t like a storybook.
The monsters of the Future
The “punk” in cyberpunk comes from the gritty, compromised feel of the future the writers envisioned. Mid-century authors had usually imagined an “onward and upward” path of ever-increasing state capacity — galactic federations and empires, a united Earth, and so on. But the cyberpunks usually depicted worlds where governments were either hapless and weak — sharing power with corporations, cults, wealthy individuals, and AIs — or domineering and totalitarian. And where mid-century authors often depicted thriving middle classes who could afford to access futuristic wonders, cyberpunk worlds are typically rife with inequality, where the best tech is only available to a select few.
Cyberpunk worlds are not necessarily fun ones to live in, even if you’re an ace hacker with a trenchcoat and mirrorshades.
The cyberpunks authors’ social extrapolations were a bit more hit-or-miss than their technological visions. Modern corporations aren’t exactly weak, but Google, Huawei, Apple, and BYD don’t resemble the lawless, heavily armed quasi-state actors of 80s/90s fiction. Instead they’re all under the thumb of national governments.
And inequality, while certainly a problem, isn’t as pervasive as the cyberpunks envisioned. Only the rich can afford embryo selection, but the middle class has all the latest gadgets, and poor people in America have smartphones and can use ChatGPT for free. The world, too, has become much more economically equal and much more prosperous; some developing countries are still mired in squalor, but most are not.
But there are still plenty of ways in which new technology has disrupted the institutions that got us through the 20th century. For example, ubiquitous networked technologies have become a de facto surveillance state — Apple or Google or some other company always has your current location, and the government can probably have it if it wants. Cyberpunk heroes might be able to hide out in the anonymous darkness of cities, but in the actual future, true privacy is pretty much dead. In the hands of unscrupulous governments like China’s, digital surveillance has become an unprecedented tool of fine-grained social control.
Meanwhile, social media has proven to be an incredibly disruptive force in modern liberal societies. In the 20th century, the free flow of information allowed pluralism, inclusion, and new ideas to flourish, giving liberal democracies an advantage. But in the 21st century, social media often creates destructive status wars, as society’s worst agitators seize the microphone and whip up hatreds among the polity. And the ultra-low cost of information also means that disinformation is basically free, meaning that politics becomes a tournament to see who can put out a more massive flood of lies, stupid memes, and deepfakes.
Worryingly, only authoritarian governments like China seem to have been able to keep a lid on the roiling social conflicts and meme wars that social media has given rise to. That raises the disturbing possibility that the information technologies of the cyberpunk age tip the scales of power toward authoritarianism. The dark visions of future politics common to so many cyberpunk novels — weak, compromised, and ineffectual government in democracies, strong effective government in autocracies — might end up coming to pass after all.
There are plenty of other ways in which new technologies might lead to dystopian outcomes. Beyond the obvious ones — rogue AGI and bioterrorism — there’s the possibility that modern technology might make replacement-level fertility impossible, leading to a grim, gray, shrinking world where working people have to toil ever longer and harder to support vast armies of the aged. Smartphones equipped with social media might also be leading to an epidemic of depression, loneliness, and reduced cognitive skills.
Of course, being humans, we’ll do our best to fight against all of these modern challenges, just like we fought against the totalitarian governments, cult-like mass movements, pollution and alienation of the 20th century. But unlike in a Hollywood movie, there’s no guarantee we’ll win that struggle. Despite our best efforts, the Future might end up being just as gritty, chaotic, and nihilistic as the cyberpunks’ darker visions. We just don’t know yet. We lived to see the Future, but there’s always another future that comes after that.
P.S. - It’s kind of spooky how much the photo of the Ukrainian drone pilot from the top of this post looks like the cover art from William Gibson’s Neuromancer:
AI — specifically, OpenAI’s o3 model — also helped me write this post. It summarized the cyberpunk literature, in case there were any key works I hadn’t read. It helped me do a search for cyberpunk-esque stories in the news. And it helped me map various new technologies to the authors who first predicted them.
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