Will the Internet Destroy Cuba’s Communist Dictatorship?

“On Sunday, July 11, thousands of Cubans in dozens of cities around the island nation took to the streets to protest the country’s communist dictatorship and persistent shortages in food, energy, and medicine, all of which have been made worse by the pandemic.

The demonstrations have been enabled by social media and the internet, which only came to Cuba in a big way in late 2018, when President Miguel Diaz-Canel allowed citizens access to the internet on their cellphones.”

Don’t Try To Fix Big Tech With Politics

“I don’t know the correct level of content moderation by Facebook, Twitter, Google, or Amazon. And neither do you.

Sometimes I can pinpoint what looks to me like an obvious misstep”

“But I also know deciding what and whom to allow on your platform is a hard problem. Scale is hard”

“The difficulty of this task hasn’t stopped everyone from elected politicians to think-tankers to pundits from looking for ways to punish tech companies for doing it wrong. These folks disagree about what is broken in the status quo, but the calls to action are no less strident for all that.

For every person arguing against moderation on the grounds of ideological bias, there is someone else pushing for more aggressive moderation to control rampant hate speech or “disinformation”—which can mean everything from objectively false claims to arguments that some users consider subjectively offensive. There are those who find the profit-making aspect of the whole industry distasteful, and there are those who fret about the difficulties faced by would-be competitors due to the sheer size of the companies in question.

The push to crack down on Big Tech is both bipartisan and fiercely politically tribal—the worst of both worlds.

The proposed solutions are numerous, and nearly all involve aggressive government action: break up some or all Big Tech firms via antitrust, remove longstanding liability protections by rewriting Section 230 of the Communications Decency Act, treat social media platforms as public utilities or common carriers with all the constraints that entails, reinstate the Fairness Doctrine, and much more.”

“Any legislative or regulatory restriction on Big Tech will not be a triumph of the oppressed over the powerful. It will be yet another instance of the already powerful wielding the state’s machinery to compel private companies to do what they want, likely at the expense of their market competitors or political enemies. Such reforms are far more likely to be censorship than to reduce censorship, in the strictest sense.

It has become fashionable on both the left and the right to argue that Big Tech is now more powerful than a government or perhaps indistinguishable from one. Here is a list of things governments sometimes do if they dislike what you say or how you say it: lock you up, take your property, take your children, send you to die in a war. Here is a list of things tech companies sometimes do: delete your account.

Twitter, Facebook, Amazon, and Google do play a huge role in many people’s lives. To be kicked off a popular platform can be deeply unpleasant and unnerving. But the notion that political interference will result in broader access to a better product is naive at best and dangerous at worst.

On platforms that do any moderation or curation at all—both functions that are necessary for a pleasant or even comprehensible user experience—there are going to be many thousands of borderline calls each day, by humans and robots alike. And those decisions get more plentiful and complex over time. That, in turn, generates more room for error, and more consumer demand for clarity.”

“Every single one of these sites is entirely or primarily free to use. Yes, they make money, sometimes lots of it. But the people who are absolutely furious about the service they are receiving are, by any definition, getting much more than they paid for. The results of a laissez-faire regime on the internet have been remarkable, a flowering of innovation and bountiful consumer surplus.

The question of the correct level of content moderation by Facebook, Twitter, Google, Amazon, and their would-be rivals is not a question that needs to be answered in the sphere of politics. We do not need to agree on a single answer. Which is good, because we never will.”

America’s Semiconductor Industry Doesn’t Need $52 Billion in New Subsidies To Stay Ahead of China

“Rather than countering a perceived threat from China, lawmakers risk bogging down one of the most innovative and successful parts of the American economy with an industrial policy that will force chipmakers to care more about what makes Washington happy than what is best for their own businesses.”

“Companies that, by the way, admit they don’t need the cash to be competitive. Intel, one of the world’s biggest chipmaking companies, is in the process of building a $20 billion fabrication facility in Arizona. In March, CEO Pat Gelsinger said the project “would not depend on a penny of government support or state support.” (Though he immediately followed that comment by saying that “of course…we want incentives” and it appears that Congress is prepared to dutifully provide them.)”

“According to the Semiconductor Industry Association, a trade group, American-based firms control 47 percent of the global share of the semiconductor industry—a far cry from congressional concerns about the U.S. losing its competitive edge.”

“The trick that lawmakers are trying to pull here is to focus on where semiconductors are made. But this doesn’t really matter. It’s true that a smaller share is manufactured in the U.S. today than 30 years ago, but that’s the result of natural shifts in the market, not evidence of a collapse in American technological prowess.
Indeed, American companies are still at the forefront of semiconductor development—earlier this month, American-based IBM announced a breakthrough in the development of the world’s first two-nanometer chip.”

“It takes a long time to make semiconductors—up to 26 weeks, in some cases—and production is still ramping up again in the wake of last year’s disruptive pandemic. This isn’t a nationalist issue in which some evil foreigners are cutting off America’s share of semiconductors, but a market-based issue that will be resolved as chipmakers increase production capacity to catch up to increasing demand.
But what about China? Yes, the Chinese government is investing heavily in semiconductor-making technology, but it remains far behind America in terms of technological know-how. A recent Nikkei report shows that China mostly manufactures nothing smaller than 14-nanometer chips, which are several generations behind the most advanced chips being made elsewhere—remember, IBM just announced plans for a two-nanometer chip. Closing that gap will be difficult now that America has banned the sale of semiconductor-manufacturing equipment to China (and enforced that ban even when the sale involved other countries).

If there is one major worry for the global supply chain of semiconductors, it is the island of Taiwan. The majority of the world’s semiconductors are made in Taiwan, which is home to the Taiwan Semiconductor Manufacturing Company, by far the world’s largest chipmaker. There are obviously many complicated geopolitical issues involving Taiwan that America and the world’s semiconductor industry will have to navigate in the coming years—but it is downright foolish to believe that $52 billion in subsidies will make a meaningful impact in that complex situation, or in a global market that was worth $425 billion last year alone.”

“All it will do is shovel $52 billion of taxpayer money (some of it probably borrowed from China, ironically enough) to successful businesses flush with cash.”

The Trump administration forced Apple to turn over lawmakers’ data. Democrats are outraged.

“That the Department of Justice sought the private phone data of US lawmakers without their knowledge is remarkable and disturbing. While details are still emerging, the exchange sets a concerning precedent about the ability of the executive branch to obtain the digital records of lawmakers as well as tech companies’ roles in complying with such orders.”

“The DOJ’s inspector general, Michael Horowitz, announced on Friday that he will start a review of the agency’s actions under the Trump administration and will look at “whether any such uses, or the investigations, were based upon improper considerations.””

Is the Great Stagnation Over?

“Cowen argued 10 years ago that the previous set of general purpose technologies—machines and factories powered by fossil fuels and electricity—had run their courses, at least in the United States and other developed economies. When eventually nearly everyone had a car, electric appliances, and indoor plumbing, technological improvements were being made just at the margins. The result was a significant slowdown in the rates of productivity growth and incomes.

The online crew assembled by AEI expressed some optimism that a whole bunch of new technologies were on the verge of jumpstarting our sluggish economy. Strain declared himself very confident that the Great Stagnation is not permanent. He suggested that entrepreneurs were even now exploring how to adapt a whole suite of new technologies—batteries, vaccines, artificial intelligence, driverless trucks—to their best economic uses and whose benefits will become increasingly evident over the coming decade.

Tucker chimed in that it takes a while for entrepreneurs and innovators to figure out how to profitably apply ideas and new technologies. She noted that her fellow economists have been offering two excuses for why advances in digital technologies were not showing up in productivity figures. The first is that the enhancements were not being measured properly. The second is that the elaboration of general purpose technologies, e.g., steam and electricity in the 20th century, needs 20 to 30 years of experimentation before businesses can figure out how to really rev them up to boost productivity. She pointed out that people initially thought electricity was about the light bulb, but what really promoted economic growth was powering machinery in factories and electric appliances at home.

Cowen cautioned that many technological advances would doubtlessly improve human welfare but still might not show up in U.S. gross domestic product (GDP) and productivity statistics.”

Remote work is overrated. America’s supercities are coming back.

“If you are a biotech engineer who specializes in a certain branch of biotech and you move to Silicon Valley, where at any moment in time there’s a thousand biotech firms looking for biotech engineers, you might be able to find biotech firms that really value your branch of biotech. That same person moves to Chicago, when at that moment in time there’s a handful of firms looking for employees in biotech; well, you might have to settle for a less good match, a biotech firm that is not really looking for your area of specialization. Notice that it really favors both the firm and the worker. Firms move to the Bay Area and they’re really looking for somebody that is specialized in a certain branch of biotech; and vice versa, it’s much harder for them in Chicago.

And also notice this advantage is not there for unskilled or non-specialized labor. If you are a janitor or a secretary or a welder, the advantages of agglomeration don’t really mean much for you — but if you are a specialized scientist or mathematician or engineer or an innovator, that market thickness will provide a better match. So that’s one important channel that has been documented to improve the productivity both of the firm and the work.”

“for the innovation sector broadly defined, I think they’re going to see quantifiable losses in productivity as measured by quantifiable losses in the amount of innovation these types of workers will be able to create. A lot of the existing research points to the fact that by clustering geographically, these inventors, before Covid, were significantly more productive in quantifiable ways. I have a paper where I quantify the number of patents that an inventor could gain by moving to a tech cluster and the quality of those patents as measured by patent citations. So we’re talking about quantifiable causal effect on productivity and creativity; the moment you start losing that creativity and productivity, that’s when both the employer and employee have something to lose from this decentralized application.”

“some occupations can be probably managed in the long run remotely without huge losses in productivity. Probably that depends, from industry to industry and employer to employer.”

“So we’ve been talking a lot about labor demand — people moving to superstar cities to get these good jobs. There’s another facet, which is labor supply. A lot of young people actually want to live in these places — a lot of young people were attracted by the urban amenities. Right now it’s not too surprising that places like San Francisco and New York are deserted by a lot of these same people, because right now a lot of these urban amenities are shut down.
Assuming that we can go back to feel safe around each other and the vaccines can manage our safety effectively, I think it’s fair to assume that urban amenities will come back pretty much at the same level that existed before, so [the] labor supply of well-educated workers will keep flowing to these places.”

‘See Something, Say Something Online Act’ Punishes Big Tech for Not Snitching

“The legislation says any interactive computer service provider—that means social media giants, small blogs, podcast hosting services, app stores, consumer review platforms, independent political forums, crowdfunding and Patreon-style sites, dating apps, newsletter services, and much more—will lose Section 230 protections if they fail to report any known user activity that might be deemed “suspicious.”

“Suspicious” content is defined as any post, private message, comment, tag, transaction, or “any other user-generated content or transmission” that government officials later determine “commits, facilitates, incites, promotes, or otherwise assists the commission of a major crime.” Major crimes are defined as anything involving violence, domestic, or international terrorism, or a “serious drug offense.”

For each suspicious post, services must submit a Suspicious Transmission Activity Report (STAR) within 30 days, providing the user’s name, location, and other identifying information, as well as any relevant metadata.

Those submitting the user surveillance reports would henceforth be barred from talking about or even acknowledging the existence of them. STARs would also be exempt from Freedom of Information Act (FOIA) requests.

The bill, which comes amid renewed calls to stamp out domestic terrorism after the Capitol riot, is impressive in managing to be both completely invasive and utterly unconcerned with even appearing to be about protection, since the remedy—report within 30 days—would hardly help stop the commission of crimes”

“The bill would set up a massive new system of intense user monitoring and reporting that would lead to more perfectly innocent people getting booted from internet platforms. It would provide the government with a new tool to punish disfavored tech companies, and it would enlist all digital service providers to be cops in the failed post-9/11 war on terror and the drug war.”

“Worse than simply overloading the system, it would make federal agents investigate all sorts of ordinary Americans for harmless comments. It also seems likely to make finding actual terrorists and violent criminals even more difficult.”

The Air Force has already built and flown a prototype of its first new fighter jet in two decades