Today my inbox alerted me to 2500 cogently penned words on the holy grail of AGI, artificial general intelligence, as pursued by the West. Having posted twice on AI in January, using the example of DeepSeek to contrast the approaches of US hyper-financialised capitalism with that of China, I read it immediately.
Author Warwick Powell opens with the “Dutch Disease” problem whereby:
the American AI boom reveals a contradiction that goes beyond economics, cutting into the thermodynamic reality of modern capitalism. The very technology heralded as an optimiser of systemic order is accelerating disorder, both physically and financially. In the language of the systemic value exchange framework, the viability of information itself becomes questionable when its production and use require disproportionate material and energy throughput
We might compare with the state of nuclear fusion: vast energy input for meagre energy output.
Powell then considers the nature of hyperfinancialisation. Without citing the DeepSeek upset, he invokes the 2000 dot com bubble, and real estate crisis of 2008. (Here too we can contrast Western responses, which printed trillions in QE to bail out institutions “too big to fail”, with Beijing’s refusal to help Evergrand; a refusal that quarantined – a truth grudgingly conceded by Indian outlet, FirstPost, and in a surprisingly fair assessment by US business channel, CNBC – an overheated property sector from China’s wider economy.)
But where the piece gets truly fascinating is in its consideration of philosophical underpinnings taking us to the heart of foundational assumptions implicit in 500 years of Western supremacy now drawing to a close:
Beyond material, systemic and conceptual constraints, the pursuit of AGI in the West reflects a deeper cultural and philosophical obsession. The drive toward creating human-equivalent intelligence can be read as a form of God substitution: the desire to assert mastery over intelligence itself, to reclaim a “fallen” status and prove that humanity can achieve omniscience or omnipotence through computation. This motif resonates strongly in Western thought, where theological and Enlightenment traditions valorise the conquest of nature and the assertion of human rationality as ultimate.
The U.S. AI landscape, with its emphasis on AGI as a horizon goal, mirrors this obsession. When the promise of AGI fails to materialise (or at the very least, quietly fades away from the attention of the markets), attention pivots to entertainment and ephemeral applications, creating cultural and informational noise rather than systemic order.
Contrast this with China’s approach to AI, which is less encumbered by metaphysical or theological ambitions. Chinese AI strategy is pragmatic and pattern-oriented: the focus is on computational speed, efficiency, and controlled application in domains like logistics, finance, and surveillance. There is no obsession with AGI or the replication of human consciousness. Chinese planners and developers are acutely aware of the limits of both technology and mathematics, and this shapes a culture of bounded and grounded ambition. AI is a tool for optimisation, control and systemic improvement, not a project to dislodge metaphysical constraints.
That last paragraph reminds me of a cognitive psychology riding high in the late 70s and early 80s on the back of airy assurances that artificial intelligence was about to change everything. By the late 80s its expectations were more modestly centred on the delivery of ‘expert systems’ in such narrowly specific domains as oil drilling and medical diagnosis.
The retreat was temporary though. As processing power and data storage grew more powerful, those grandiose goals returned in the West:
In systemic terms, this difference is profound. Where the U.S. approach channels vast resources into speculative AGI dreams and entertainment-driven LLM applications – at risk of generating financial, energetic and informational entropy – the Chinese model aligns technological capability with measurable systemic gains embedded in the thermodynamics of entropy and negentropy. The West pursues negentropy in theory but produces entropy in practice; China pursues bounded computation and pattern recognition and extracts practical value without overextending the system.
* * *
This part of Powell’s synthisis……
“According to an MIT survey, 95% of U.S. businesses have achieved zero measurable return on their AI investments. This staggering figure points to a profound productivity paradox. We are talking about massive capital allocation toward AI with the possibility of negligible impact on real economic output.”
….seems to break all the rules of Capitalism. Shovelling vast amounts of money – along with limited water* and energy resources – into an ROI (Return on Investment) black hole.
Which raises the question of why?
One possible scenario being that it’s not about money per se, but substitution.
Here’s a piece from earlier this year……
https://thenextrecession.wordpress.com/2025/01/28/ai-going-deepseek/
…….which provides an intriguing insight from Sam Altman himself:
“Sam Altman, the previous non-profit hero of Open AI, but now out to maximise profits for Microsoft, argues that yes, unfortunately there are ‘trade-offs’ in the short term, but they’re necessary to reach so-called AGI; and AGI will then help us solve all these problems so the trade-off of ‘externalities’ is worth it.
AGI? What’s this? Artificial generalised intelligence (AGI) is the holy grail of AI developers. It means that AI models would become ‘superintelligent’ way above human intelligence. When that is achieved, Altman promises, its AI won’t just be able to do a single worker’s job, it will be able to do all of their jobs: “AI can do the work of an organization.” This would be the ultimate in maximising profitability by doing away with workers in companies (even AI companies?) as AI machines take over operating, developing and marketing everything. This is the apocalyptic dream for capital (but a nightmare for labour: no job, no income).”
What are those ‘trade-offs’,’problems’ and ‘externalities’ which make such trade off’s ‘worth it’? With ‘it’ in this context being more money than apparent sense on one side of the trade-off ledger.
The other side of that ledger?
How about the elimination of the dependency of the 1% (or less) on the existence of the 99% to provide any and all of their requirements? With the ultimate objective being to substitute machine intelligence for humans, leaving the serf’s/deplorables totally surplus to requirements and thus expendable as far as the oligarchy and its everyday requirements are concerned.
Already, as Powell, among others, notices, vital energy and water resources are diverted away from humans to feed this quantitive based paradigm of machine “intelligence” (sic) development in which the entire approach is predicated on the exact opposite of the oft used management slogan of ‘working smarter, not harder’.
On which note, here’s another recent, relevant to the overall topic, food for thought piece from Powell……..
https://warwickpowell.substack.com/p/tick-tock-time-matters-and-pax-americana
……which, again, compares and contrasts the Western/US approach to that of the Chinese/BRICS approach.
“Industrial competition is not fought on a fixed battlefield. Time alters the terrain. The opportunity cost of delayed capacity results in lost production and, at the same time, means lost positioning in the moving hierarchy of global competence. Money may buy speed to some extent, but it cannot compress the physics, chemistry and institutional memory of complex production systems. Meanwhile, China continues to deploy time as a strategic asset by extending its industrial logic outward through training, finance and joint ventures.
The call to “localise” supply chains is intuitive, appealing. Resilience through proximity delivers a certain sense of comfort. But industrial resilience is not a static condition; it is a function of motion through time. The asymmetry between China’s compounding development and the West’s restorative industrialism ensures that every year of delay widens the structural gap.
Time, in this sense, is not neutral. It is the medium through which advantage accumulates. While the U.S. struggles to rebuild the factories of yesterday, China is building the industrial geography of tomorrow. And by the time America’s vertical integration is complete, the world will already be horizontally integrated through Chinese-supported industrial ecosystems that define the next global cost frontier.”
An analysis of the Western/US attempts to reverse deindustrialisation, which segues into his AI piece, whilst providing not only a similar critique but also painting a compelling picture of the abject failure of the Western paradigm and the philosophy upon which it is based.
A failure which is further compounded by the reality analysed in this almost eight-year-old piece……
https://www.harrowell.org.uk/blog/2018/01/31/in-the-eternal-inferno-fiends-torment-ronald-coase-with-the-fate-of-his-ideas/
…..from The Yorkshire Ranter** decrying an abandonment by the Western paradigm of basic systemic organising principles and what Powell recognises as (but, unfortunately, with little analysis of how and why it is so important and vital) “Tacit Knowledge”; which reverses systems reality by producing outcomes which are less rather than more than the sum of the parts.***
“Since the 1980s, there has been a global trend towards replacing organisations with networks of contracts. The idea that a firm could be considered as a network of contracts was taken up by the management consulting industry, and strengthened from a positive observation to a normative statement that firms should become more so……
……If you believe a lot of relevant knowledge in an organisation or market is implicit and tacit, well, that’s by definition the sort of thing you can’t write into a contract. Either the firm has to exist in order to be the vessel of this knowledge, or else we don’t care.”
Rendering the picture painted by Powell in his piece on the importance of Time in the US/Western reindustrialisation attempt even more dire than Powell details.
When it is clear that the paradigm has no use for the basic principles of organisational structure and processes, the US/West just ain’t going to see to hit the ball, never mind get to first base in attempting such a reversal.****
Little wonder there’s already a steady, albeit small at this stage, trickle of people from the West upping sticks and moving to Russia and China.
* Given that fracking also uses phenomenal amounts of water (which in this case cannot be re-used due to all the chemicals, radion’s etc which are part of the process) it will be interesting to see which of those two requirements folds first.
** This is part of a series. Type in “Coasian Hell” into TYR search box.
*** Which is why, as Ash Sarker lamented on Question Time the other night, “nothing works” in the UK (ditto for the Collective West in general).
**** It’s the bloody paradigm, stupid! Wings Over Scotland has a recent piece entitled “Your Enemy’s Mistakes”, which observes:
“the best way to get your opponents to keep making terrible mistakes is to tell them, with absolute honesty and sincerity, the mistakes they’re making.”
Whilst the context for this is Party Politics, the generic principle applies in the context being discussed in this SCS thread.
Although in this case it would be more appropriate to observe “the best way to get your opponents to keep making terrible mistakes is to demonstrate to them, with absolute clarity, a superior paradigm which highlights the mistakes they’re making by rubbing their noses in it.”