Thoughts in Between

by Matt Clifford

Matt's Thoughts In Between - Issue #86

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The beginning of the end of the American century?

This week saw a watershed moment in China’s ability to project power into the US. It started when the manager of a major US basketball team tweeted a pro-Hong Kong stance - and, after Chinese sports channels and other companies started to boycott the team, was almost immediately condemned by the club owner and the NBA. Not long after, Blizzard, the US makers of World of Warcraft, suspended a professional gamer for a pro-Hong Kong message (They’ve since reversed the decision). 

These are not isolated cases, just highly visible ones. As Noah Smith notes, lots of American companies appear to be taking censorship-like action against people who might anger China (In this context, the ongoing Huawei controversy assumes even more importance, as Elliott Zaagman points out). 

This seems like an important moment in the escalation a classic "Thucydides Trap" - Graham Allison’s term for the situation where a rising global power begins to challenge the dominant one (see his excellent book or summary article for more). One of the trigger points Allison identifies is when the new power begins to project its values into the dominant power’s sphere. As Derek Thompson argues in this excellent piece, every Western company that wants to do business in China has to pay the “values tariff”. The public seem relaxed, for now, but the post-WW2 settlement continues to unravel.

Elizabeth Warren and the Second Facebook Election

Some dubbed the 2016 Presidential race the “Facebook election” - but the social network’s role in 2020 is likely to dwarf the impact it had last time around. In a taste of things to come, Elizabeth Warren, by some measures the frontrunner for the Democratic nomination, ran a Facebook ad with a deliberately false headline (“Facebook just endorsed Donald Trump”) to highlight Facebook’s role in spreading disinformation - particularly Trump’s ongoing claims about Joe Biden.

Facebook’s response underlines the challenges it faces in navigating its outsized political impact. It responded to Warren via a corporate Twitter account and compared its actions in accepting Trump’s ads to those of TV stations who have aired similar spots. This looks like a tactical misstep, as Facebook has long argued that it is in a different category from broadcasters and so should not be subject to the same regulation...

That’s not to say that Facebook has any easy options here. As Julian Sanchez points out in this excellent thread, there are good reasons for Facebook to want to avoid policing political speech. And, as this New York Times op-ed notes, whatever it chooses by way of policy, it structurally benefits controversial and divisive figures. The deeper political problem for Facebook is that, as many on the left are already asking, if Facebook can’t help but sway elections, should it be allowed to exist? 

Can we create new markets to regulate AI?

Jack Clark (whose ImportAI newsletter is a must read) and Gillian Hadfield of OpenAI have an interesting new paper on creating new regulatory markets for AI safety. Overall, I don't buy the idea, but it's a stimulating read on an important topic. The premise is that we live in an increasingly machine learning-dominated world, but existing government regulators lack the resources and technical knowledge to effectively police AI companies. 

Clark and Hadfield propose creating a market for private regulators: governments would determine the desired outcomes; the private regulators would be free to develop inspection and enforcement mechanisms; and AI companies could shop around to choose their regulator (but could not opt to be unregulated!). The argument is above all about talent: they believe their proposal could draw great technical talent into the regulatory sphere, which they see as necessary for effective regulation in such a complex space. 

That's persuasive, but, as the paper acknowledges, lots of other problems remain. It presents several good case studies of private regulation - from the UK Legal Services Board (an interesting, but as yet unfulfilled, example of an attempt to create regulatory competition) to the credit rating agencies (whose role in 2008 was broadly disastrous). But if private regulators have to compete for business, isn’t the incentive to make life easy for the “customer” while obscuring systemic risk? And if governments lack the knowledge to regulate AI, they may also struggle to identify AI regulatory capture. "Who regulates the regulators?", as Juvenal didn’t say

Quick Links

  1. Your call is important to us... How, when he wanted to invest $5bn in Bank of America, Warren Buffett called their customer service line.
  2. Now you see me... now you see me. Striking new quantum experiment that demonstrated a large molecule in two places at once.
  3. What matters is what works. Superb repository of experimental results and randomised control trials in the field of innovation and entrepreneurship.
  4. Humans and incentives, part 1089. Amazing thread that shows endemic data-juicing in China's economic statistics.
  5. Gradually, then suddenly. Incredible video showcasing 10 years of progress in bipedal robotics.

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Until next week,