Popular Chinese economist Lu Qiyuan recently claimed the US has four years to prevent a major political, social and financial crisis. It must do at least one of three things: implement structural political reform; prevent the dollar from losing its role as the global reserve currency; or create a new wave of economic growth driven by artificial intelligence (AI).
If Lu Qiyuan is right, the US is facing a Herculean task. Structural reform of the US political system would meet strong opposition from America’s corporate and financial giants, the main beneficiaries and sponsors of the current political system. They are firmly in control of the national media and ensconced in the national bureaucracy.
Preserving the role of the dollar as the world’s reserve currency will also be an uphill battle, all the more so after the West banned Russia from the global financial system. The extrajudicial weaponization of the dollar system spooked the rest of the world and had the opposite of its intended effect. De-dollarization has become a global buzzword.
The third option, an exponential increase in productivity driven by AI also faces major hurdles. The world is in a generational transition from the Third to the Fourth Industrial Revolution. The US launched the Third Industrial Revolution – the ICT and Internet revolution – but China is set to lead the Fourth Industrial Revolution.
Industry 4.0 is the fusion of digital, biological, and physical technologies and the large-scale deployment of AI, robotics, nanotechnology, biotechnology, and the Internet of Things (IoT). As the factory of the world, China makes nearly all of the hardware that is needed for Industry 4.0 and has the required infrastructure.
Mystical aura, ambivalent feelings
AI still has a mystical aura. The general public, especially in the West, has ambivalent feelings about AI. Many fear AI will lead to a loss of privacy. Others believe AI will be monopolized by a handful of tech companies while experts have argued that AI could outpace human intelligence and pose an existential danger to humanity.
The more extreme concerns about AI can be traced to science (cyber) fiction. Some cyberfiction depicts AI as a global brain that has a mind of its and evil intentions: taking over the world, enslaving humanity, or worse – eliminating humans. It is never made clear which company, country or other entity would or could build an AI system that can take over the world.
Moreover, AI alarmists tend to overlook the fact that AI systems operate in clearly defined areas. They are designed to perform specific tasks in a specific domain. An AI system designed for a self-driving vehicle cannot analyze medical X-rays or play chess. No car maker would build a self-driving car with a mind of its own.
AI is not only domain-specific, it is also culture-specific. When we ask large language models (LLM) like ChatGPT and its Chinese counterpart ERNIE to list the most important philosophers in history, or what the best economic system is for the 21st century, we will get two very different answers. Any LLM will reflect the worldview of its creators.
AI looks less complicated when it is seen as a subset of cybernetics, the first comprehensive theory for binary computing developed in the 1940s. AI is built on the same (binary-Boolean) platform as Cybernetics. It is technically a form of cybernetics with a self-learning algorithm and could have been called Cybernetics 2.0.
The first generation of computers were analog machines. They performed calculations using variations in continuous electrical current rather than discrete binary values. Improvements in circuit technology in the 1940s made binary computing feasible, and most computer scientists agreed that binary systems were more stable and easier to program.
In the 1940s, the American scientist Norbert Wiener developed a theoretical framework for binary computing, which he called Cybernetics. Wiener showed that binary computers are ideal for the control or regulation of complex systems using binary choices (yes or no) and Boolean logic (IF/THEN/AND/OR, etc.).
A textbook example of a cybernetic system is the autopilot used in airliners. Using Boolean operators, the autopilot guides the aircraft from A to B within the parameters set by the navigator. If the aircraft encounters strong side winds, then the autopilot initiates a course correction. If it encounters strong headwinds, it may rev up the engines to stay on schedule.
Cybernetic theory played a crucial role in the development of automation and other production technologies after WWII. It enabled engineers to model complex systems, predict their behavior and develop control strategies for efficiency and reliability. Cybernetics also provided the theoretical framework for modern robotics.
In the 1950s, the humanities embraced cybernetics. Among others, it was used to study social systems, organizations, and management processes. Cybernetics provides tools for decision-making processes, organizational behavior, management science and systems thinking.
The cybernetic method is based on three steps: plan, quantify and steer. The plan defines the goal or destination; the quantification determines the required resources; and the steering, using a feedback mechanism, guides the system to its destination. The method can be applied to any system, whether an autopilot, a factory or an entire country.
Norbert Wiener called this new science cybernetics to express its basic function: steering. The word cybernetics derives from the Greek kybernētēs, meaning “I steer, drive, guide, act as a pilot.”
Plato used the word to refer to the captain of a ship. (The rudder of a ship was the first human use of a causal feedback mechanism.) The Latin corruption, gubernātor, is the root of the modern word government or to govern.
Cybernetics also spread to the social, political and economic domains. The Five and Ten Year Plans used in socialist countries after WWII were informed by cybernetic principles. They met with mixed success but China continued the practices of long-term planning even after its market liberalization of the 1970s.
Deng Xiaoping’s first Five-Year Plan called for laying the foundation for industrialization, infrastructure development, and agricultural modernization. The goal was to transform China from an agrarian economy to an industrialized country.
The current Five-Year Plan under Xi Jinping also set clear goals. Among others, it calls for “a society in which no one is poor and everyone receives an education, has paid employment, more than enough food and clothing, access to medical services, old-age support, a home and a comfortable life.”
For China, planning is an imperative. The country is facing serious demographic decline. A shrinking population of young people will have to provide physical and financial care for a growing population of elderly people. Industry 4.0 technology will have to come to the rescue.
Cybernetics is an interdisciplinary science. It offers a framework for all aspects of human development – social, ecological, political, and technological, even psychological and philosophical. Moreover, cybernetics is neutral, a-political, universal and based on binary logic.
The only thing cybernetics requires is a plan. Without a plan, as Plato pointed out, society is like a ship at sea without a destination, a captain or a rudder. Cybernetics requires that we state our intentions, allocate the needed resources and select reliable navigators.
The primacy of a plan explains the fundamental difference between cybernetics and AI. In the cybernetics framework, AI is “merely” a tool in a larger context. It can help us to navigate to our destination more efficiently but it can’t make a plan. Only humans can make a plan and develop a consensus on the destination.
Chinese economist Lu, in his advice to the US government, argues that the US urgently needs a plan. The country has traded places with China in the past 40 years. China industrialized; the US de-industrialized. Millions of Chinese joined the middle class while millions of Americans dropped out of the middle class. China had a plan; the US did not.
The fate of the US is a global concern. Without dealing with its debt, the US faces a financial death spiral. Interest payments on the national debt have become the biggest item in the national budget. Unless the country initiates a drastic and painful course correction, the cost of servicing the debt could exceed all other government expenditures.
Economists claim that a country able to print its own money can never go bankrupt. That may be true technically but it does not explain why a country that can print its own money also has to borrow US$34 trillion to fund its government. BRICS and the growing de-dollarization coalition will put this contradictory system to the test.
Global debt is approaching now over $300 trillion, or 235% of global GDP, the highest since the Napoleonic Wars. Every country in the world would be affected by an implosion of the dollar, which would mean the implosion of the global fiat system. Navigating the world to the other side of the debt crisis will require skilled navigators.
New Thinking
The word cybernetics was first used in the modern political context by André-Marie Ampère, the French scientist and philosopher who discovered electromagnetism. Ampère, who also studied social and political systems, argued that “the future science of governance should be called cybernetics.”
Physicist Bruce Lindsay, author of the 1970 paper “The Larger Cybernetics,” speculated on Ampère’s reasoning for using the term cybernetics. He wrote:
“It was in this memoir that Ampère first introduced the term cybernetique to refer to the science of government. He evidently felt that this was appropriate terminology since κγβερντεσ is the Greek for helmsman or governor, the one who controls the direction of the ship.
“This may be considered the beginning of the formal recognition of the science of control, though it does not appear that Ampère’s definition gained much attention in the nineteenth century, nor in our own century for that matter, until Norbert Wiener resurrected the term in his book called Cybernetics, published in 1948, and attempted to put the subject on a more formal basis.”
Ampère may have influenced German philosopher Martin Heidegger, who studied the human relation to technology (he spoke of “technicity.”) In an interview with the magazine Der Spiegel in 1966, Heidegger argued that European philosophy was not equipped to deal with technological changes and had reached a termination point with Friedrich Nietzsche’s nihilism. Asked what comes after philosophy, Heidegger replied: “Cybernetics.”
Heidegger called cybernetics “another kind of thinking,” adding: “The manner of thinking of traditional metaphysics that reached its term with Nietzsche offers no further possibility of experiencing in thought the fundamental thrust of the age of technicity that is just beginning.”
interesting perspective and I learn a little about history.