Four years of Noahpinion

What happened to the world in 2024, and what I wrote about it

Art by GPT-4o

Today is the fourth anniversary of this incarnation of my blog. Noahpinion began on the old Blogger website in 2011, but I switched over on November 23, 2020. It’s hard to believe how far it’s come since then — Noahpinion now has over 280,000 readers and 14,500 paid subscribers! As always, I’m incredibly grateful to everyone who reads my blog, and I’ll do my utmost to keep delivering you top quality content. I do it all for you folks.

Anyway, every year, I do a roundup of seven big themes I wrote about (here’s last year’s). The links below are all links to other posts I wrote over the past 12 months, so you can use this post as a reference if you want to know what my main focus was in 2024.

The fall of progressivism and the return of Trump

The most important event of the year, at least from a U.S. perspective — and possibly from a global perspective as well — was the election of Donald Trump earlier this month. This probably shouldn’t have been much of a surprise, given that incumbent politicians and parties lost all over the globe this year, and also given the fact that Biden was too old to run again and the Dems had to quickly shoehorn in a replacement. Still, though, the election of Trump is, in my view, a very bad result, for a variety of reasons. Trump looks likely to accommodate America’s foreign adversaries, feud with key U.S. institutions, unleash divisive rhetoric, and hire a bunch of poorly qualified people of low moral character. A Democratic President would have done much better.

And yet this was the result Americans wanted, and we have to deal with that. Democrats need to spend a lot of time and honest effort grappling with the fact that the brand of politics they built up since 2012 just isn’t working very well. Identity politics — courting minority voters by offering targeted benefits and appealing to historical grievances — just ended up pushing away significant numbers of Latinos, Asians, and Black men. Prioritizing low unemployment over low inflation enraged the American people. Progressive cities are governance disasters — blocking new housing, being too permissive toward crime and urban disorder, and wasting city budgets on grifting nonprofits, expensive consultants, and thickets of red tape. And the educated professional class that forms the Democrats’ base is too out of touch with the values of the American majority.

In fact, it’s not really an exaggeration to say that progressivism itself — the ideology that replaced liberalism as the guiding light of the Democratic party — is experiencing an existential crisis. The DEI effort has yielded disappointing results and made a lot of people angry. Permissive attitudes toward crime and the border have created widespread backlashes among Americans of all races. The trans movement is losing the battle for public opinion. Americans don’t seem to be in the mood for expansions of the welfare state. Unions are turning away from the Dems due to cultural issues. The far left has gone all-in on supporting Hamas’ “decolonial” war against Israel, alienating most of America while forfeiting the moral high ground. Much of the tech industry has been alienated by pointless anti-tech sentiment. Woke culture has become a parody of itself. And so on. Almost every major pillar of the progressive movement seems to be creaking or crumbling at the same time, and the country is headed for a more conservative decade as a result.

If the Democrats can’t change course and move back from the progressivism of the 2010s toward the liberalism of earlier decades, I think Trump’s victory in 2024 will not be the last of its kind.

Dark times for global liberalism

Liberalism, put simply, is the idea that upholding individual human freedom and dignity is society’s core purpose. The election of Trump will probably be deleterious to this cause. Trump and his team are friendly toward Vladimir Putin, conciliatory toward Xi Jinping, and contemptuous of America’s democratic allies. The dream of a united front of democracies banding together to resist the united front of Eurasia’s authoritarian empires looks increasingly remote.

In Sarah C. Paine’s terminology, the continental powers are in ascendance as the maritime powers fall into disarray. The only reasonable move for democratic countries like Japan, South Korea, and Poland now is to acquire nuclear weapons as an insurance policy against the imminent end of Pax Americana. Meanwhile, America is in danger of repeating the isolationist mistakes that kept it from deterring World War 2.

But the threats to liberalism might run deeper than just Chinese manufacturing power or Russian aggression. Technology itself may have eroded the advantages that liberalism enjoyed in the 20th century, while shoring up authoritarianism’s weaknesses. Democracies may be obsessed with unproductive high finance and partisan shouting on social media, while authoritarian countries now have the tools to monitor and control their societies much more effectively.

In other words, liberalism, which seemed so triumphant and dominant just 25 years ago, may now be reduced to the status of an underground rebellion.

The Second China Shock

Over on the other side of the globe, China has been experiencing a major economic slowdown due to the collapse of its real estate bubble. Xi Jinping, China’s dynamic but often clumsy supreme leader, has been reluctant to respond to the slowdown by boosting domestic demand. Instead, he has doubled down on industrial policy, lavishing huge subsidies on manufacturing industries and directing banks to lend more cheap money to manufacturers. The combination of huge subsidies and weak domestic demand means that China’s producers have a huge amount of product they can’t sell domestically. They are thus attempting to sell much of this stuff overseas at cut-rate prices.

The result is the Second China Shock — a massive sudden flood of cheap manufactured goods that is threatening to devastate the manufacturing industries of every other country in the world. It was always unlikely that countries were going to take this lying down, so it’s no surprise that there’s a rising tide of trade barriers against Chinese goods. Biden slapped huge tariffs on a range of Chinese products, and Trump is likely to do far more than Biden. Other countries from Indonesia to Turkey to Brazil are putting up their own tariffs or other restrictions.

This is not just economic protectionism — there is a national security dimension here as well. If your country can’t make drones, batteries, chips, etc. — if you buy them all from China — then if a war breaks out against China, your country will be unable to make the weapons necessary to prosecute the war, and it will be forced to yield. China’s leaders certainly know this fact, even if critics of trade barriers stubbornly refuse to acknowledge it. The Second China Shock isn’t just an attempt to offload excess capacity — it’s an attempt to deindustrialize every country that could have a chance of standing up to Chinese power.

Industrial policy racks up some early victories

Tariffs aren’t the only tool for resisting China’s industrial domination — and in fact, they may not even be the most important. Industrial policy has made a comeback in developed countries, and nowhere more so than in the U.S. Biden’s signature bills, the CHIPS Act and the Inflation Reduction Act, committed the U.S. to supporting the strategically crucial semiconductor and green energy industries.

In 2023, this strategy looked wobbly. A sea of red tape got in the way of the green energy transition, blocking new power lines and solar plants. TSMC’s Arizona factory was delayed by a union dispute, and some people suggested that American workers are just unsuited to the kind of manufacturing work that gets done in Taiwan and China. But the CHIPS Act folks persevered, and eventually things started going right. The union dispute was resolved, and yields at TSMC Arizona ended up being even better than in Taiwan; the plant is now up and running.

And overall, the steamroller of U.S. industrial policy seems to be rolling right over the naysayers’ objections. Factory construction has soared, with every dollar of government subsidies crowding in twenty dollars of private investment. Most government-supported manufacturing projects are on track — an amazing result for a country used to massive delays on every major projects. The U.S. is actually forecast to gain market share in semiconductor manufacturing, for the first time in decades.

So far, America’s industrial policy seems to be working. And a lot of people are thinking and talking about how to generalize those successes into a new economic paradigm.

The U.S. economy powers onward

One of the reasons Trump was elected was a wave of anger about inflation. But by 2023, that inflation had been tamed — by the Fed’s rate hikes, and by a drop in oil prices. Meanwhile, employment and growth stayed high. This “soft landing” constitutes a remarkable achievement, and no one is quite sure how the Fed managed it. Most people expected that pushing down inflation would come at the cost of a slowdown in the real economy, but it just…didn’t. The result has arguably been the best economy since the 1990s.

The great economy failed to percolate into the consciousness of many Americans — instead, bad memories of the inflation 2021-22, and negative political “vibes”, kept consumer confidence low. That may now reverse. The election of Trump will let many Republicans admit that the economy is actually great, while the memory of inflation continues to fade.

But there’s also a danger that Trump’s policies could derail the goldilocks economy. Trump has promised quite a lot of tax cuts and tariffs, both of which are inflationary. And if Trump tries to avoid having interest costs on the debt overwhelm the government budget, he might pressure the central bank to keep interest rates too low. That could cause a painful resurgence of inflation.

Articulating techno-optimism

I wrote two essays this past year in which I tried to articulate why I’m optimistic about both future technological progress and technology’s power to improve human society. I’m pretty happy with both.

In “Toward a Shallower Future”, I argued that technological progress transforms the meaning of human life. As one form of natural human suffering after another is eliminated or ameliorated, life becomes less about battling adversity and more about discovering and exploring our possibilities. To some, that might seem to make existence shallower and emptier. But if a post-adversity future isn’t worth it, then struggling to eliminate adversity wouldn’t be worth it either. Personally, I think it has been worth it, and a life of self-expression and self-discovery is ultimately no less meaningful than a life of struggle.

In “The Elemental Foe”, I argued that the elimination of material poverty is humanity’s most important task. Industrial society is the only weapon humans have against scarcity and want — thus, preserving industrial society is a task of paramount importance. This means making industry sustainable, and it also means defending the idea of industrial society against toxic ideologies like degrowth.

Fortunately, I think the quest is going well. Even more than AI, I’m excited about progress in batteries and electrification — for the first time in a century, humankind has invented energy technologies that are better than what came before. In fact, physical technology is undergoing a major paradigm shift, with electricity replacing combustion across a range of applications. The rise of electric vehicles is just one manifestation of this broader trend. (As an aside, the U.S. needs to work harder to be a leader in this new energy revolution.) Cheap, portable energy is going to make us a lot richer as a species.

Doubting the AI job scare

The other big technological revolution, of course, is AI. But here, much of the discussion has been surprisingly negative in tone. Optimism about what AI can do for humanity is often overshadowed by worries that AI will make human workers obsolete — and in doing so, impoverish the human race.

Color me skeptical. First of all, even if AI gets better than humans at everything, the principle of comparative advantage says that humans will still have good-paying jobs as long as there’s some sort of aggregate constraint on the amount of AI that can be deployed — constraints on electricity use for data centers, shortages of specialized chips, etc. In fact, if you want to preserve humans’ economic value, you don’t really need to create a thicket of regulations designed to protect various jobs; all you need is one regulation limiting the fraction of society’s electricity that can be used for data centers. Comparative advantage will do the rest.

But there’s also the possibility that most people are simply wrong about how AI and humans will interact in the economy. It’s possible that AI will be better than humans at some tasks, but worse at other tasks — for example, telling truth from fiction. If this is the case, then AI will end up just like most past technologies — as a tool to make human workers more productive, rather than as a push-button solution that replaces them completely.

So far, the arguments in favor of intentionally slowing down AI’s progress seem very weak to me, even when they’re made by Nobel prize-winning economists. There’s just no sign of mass technological unemployment yet, and no compelling theoretical reason to think this will happen in the foreseeable future.

Looking ahead to 2025

The big question in 2025, at least for Americans, will be how Trump governs. Whether he goes for deficits or austerity is a big question, along with whether he pressures the Fed to keep rates low. Another question is how many tariffs he actually ends up imposing, and against whom. And the third question is whether Trump will try to cancel Biden’s industrial policies, or simply appropriate them and purge them of various progressive contracting requirements.

Culturally, Trump’s second term will probably be an extended backlash against woke culture and ideas, and the culture war fights will be fierce. He will probably try to do mass deportations of illegal immigrants; whether he’s more effective at this than in his first term remains to be seen. Still, I predict that America’s age of unrest will not make a full comeback.

Democrats, meanwhile, will probably spend much of the year in internal wrangling over the future of their ideology. The most interesting struggle to watch will continue to be in big progressive cities, with one faction promoting a pro-development, tough-on-crime, fiscally efficient approach, while the other side fights hard to defend the progressive maximalism of the 2010s.

Internationally, the situation will be dire. Russia will likely make progress in conquering more of Ukraine, whether or not Trump follows through on his promise to end the war. As soon as areas of Ukraine are secured, Putin will turn his attention to conquering the rest of it. If he manages to take all of it — or perhaps even if he doesn’t — he will turn toward the Baltics, toward Moldova, and inevitably to Poland. Meanwhile, China will continue its preparations to conquer Taiwan. Here, Trump may put up more resistance, though I remain unconvinced that he’ll take it as seriously as he should. The world stands on the brink of major wars that could bring a global rebalancing of power.

Regarding AI, there are some signs that scaling — the brute-force approach that brought generative AI as far and as fast as it has — is hitting some limits, including limited data and more incremental improvements in model performance. Strangely, if this is true, I expect it to help the AI industry in some ways — if progress in fundamental models slows down, companies will be forced to find ways for AI to complement humans instead of just assuming humans are there to be replaced.

Anyway, it’s likely to be a scary but interesting year, and I’ll be there to write about it all. Everyone hang in there, and enjoy another year of Noahpinion.

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