Lend me a beam of light to illuminate the future: Can AI trigger the fifth technological revolution?

Can AI cause the fifth tech revolution?

[Preface] This article has no wealth password, no project case, and I don’t even know which battle sequence it belongs to after writing it. Later, I thought of a “Chain Game Evolution History” that I wrote when I was bored a long time ago. The style is based on real stories. It’s a bit of a mess. Just read it roughly.

1. Moscow’s Old Classmates

On a snowy weekend in early 1926, two men and two women wandered around Red Square, laughing and chatting. These were two couples from the ancient eastern country, and they had just come out of the Hotel National. Both men were about twenty years old, similar in stature, not tall but sturdy, and their young eyes gleamed with an unstoppable light. They had drunk some Russian special vodka, and their faces were flushed, and they were passionately discussing something, interspersed with some mispronounced Russian words: ism, class, revolution, Bolshevik, etc. And the two beautiful girls holding their hands were just looking at them with a smile, full of love.

The carefree youth and soaring passion melted the goose feather snow that fell on them. They were all classmates from Zhongshan University in Moscow, and the two girls were named Zhang Xiyuan and Feng Funeng (the daughter of Feng Yuxiang). The names of the two good friends who were speaking confidently and eloquently were Deng Xiaoping and Jiang Jingguo.

Who would have thought that fifty years later, these two young men who were just at the prime of their lives would begin to govern on both sides of the Taiwan Strait on the Chinese mainland, and they would really start to fulfill their dreams when they were young: to save the country and make it prosperous. Although fifty years of ups and downs have made the two people have completely different beliefs, one thing has not changed, they are both pragmatic and hope to lead the common people on the land of China to live a good life.

In the early 1980s, Deng Xiaoping’s advocacy of reform and opening up and market economy gave the Chinese people who had been suffering for more than 100 years the opportunity to experience the great richness of material life. After all, socialism is not synonymous with poverty. Several subsequent leadership teams have steadily promoted this set of good methods that have been proved to be able to “strengthen the country and enrich the people”. Currently, China’s GDP ranks second in the world, and its core principle is also in line with Marx’s theoretical system: production relations must be in line with the development of productive forces. When the potential of the productivity of one billion people begins to burst, holding onto the set that ideology is the main theme and class struggle is the mainstay is like using a Ponzi economic model to fit a game of strategy, which is completely irrelevant.

As we all know, the establishment of a market economy has mobilized the enthusiasm of private enterprises. A huge amount of commercial vitality began to sprout from the wild towns of China. At the central level, the reform of state-owned enterprises, the introduction of the tax-sharing system, and financial reforms, among other supporting measures, also appeared in a timely manner, and everything was active.

Jiang Jingguo, who is six years younger than Deng Xiaoping, also made remarkable achievements in Taiwan. Comrade Jianfeng (Jiang Jingguo’s nickname), who had governed a corner of Jiangxi Province in mainland China and realized the “Gannan Miracle,” had the most popular support among all the presidents who had stepped down or were in office in Taiwan, thanks to his populism and diligence. The ten major projects that started in 1975 built the framework of Taiwan’s entire infrastructure, and his footsteps were also all over all the towns and villages in Taiwan. In 1986, the average household income in Taiwan reached $5,000, entering the stage of a well-off life. Unexpectedly, Jiang Jingguo pushed the transformation of the production relations even more aggressively, directly lifting the ban on the party and the press and entering the deep waters of political reform. Feeling that his time was running out, he laid the foundation for the development environment of Taiwan’s future productivity. In response to the conservative resistance within the Kuomintang, his reply was, “Times are changing, the environment is changing, and the tide is changing. It is easy to use power, but it is difficult to know when not to use it.” In order to consolidate the consensus within the Kuomintang, he unceremoniously exiled Wang Sheng, the island’s second-in-command who represented the conservatives, abroad. Wang Sheng had been with Jiang Jingguo for forty-five years and had been responsible for intelligence and espionage work. Jiang Jingguo’s last words to the grieving Wang Sheng were: “If you don’t get into the swimming pool, you’ll never learn to swim.”

At this time, Deng Xiaoping in Beijing also conveyed a greeting to Jiang Jingguo through their mutual friend, Singapore’s Prime Minister Lee Kuan Yew (the third outstanding Chinese politician of that era, see the figure below of Deng Xiaoping meeting Lee Kuan Yew). The opening of the greeting was “the old classmates from Moscow.” The two classmates who had been separated for more than 60 years since Moscow had not seen each other again. Now they are both thinking about the reunification of the two sides of the Taiwan Strait. But can the love and hatred between the Communist and the Kuomintang for nearly 100 years be easily resolved with a simple greeting?

In 1987, when Chiang Ching-kuo felt that he was about to run out of steam, he entrusted three matters, the last of which was “both sides of the Taiwan Strait must embark on the road to unification.” In 1988, Chiang Ching-kuo passed away in Taipei. Deng Xiaoping in Beijing was silent for a long time after hearing the news and slowly said, “I don’t believe that there won’t be a third cooperation between the Kuomintang and the Communist Party. Unfortunately, Ching-kuo died too early.” Alas, this is the misfortune of the Chinese nation.

Whether it is political reform or cross-strait relations, Chiang Ching-kuo was farsighted in laying the foundation for Taiwan’s future economic and social development, that is, establishing a production relationship framework that can match the next round of productive forces development. In terms of productive forces, Chiang Ching-kuo also formulated an economic development direction dominated by the electronic manufacturing industry, modeled after Silicon Valley in the United States, and planned and developed the Hsinchu Science Park, which is now the famous “Asian Silicon Valley.” Tech giants such as TSMC, and UMC, and other high-tech companies were born. With such a strong R&D background and application market, the tech giants born in Taiwan have been able to dance gracefully on the world stage for the next fifty years, including AMD’s current leader Su Zifeng and the founder of Nvidia, Huang Renxun, who has been hot around the world these days.

2. Nvidia, a trillion-dollar market cap, and the Industrial Revolution

As for Nvidia’s story, this article will not go into too much detail. Interested readers can read another long article series “The AI Revolution of Chain Game” by Guatian Laboratory (III) Electronic Games and the Hidden Engine of Technological Development.”

On May 30, 2023, Nvidia’s stock price reached $418, becoming the sixth technology company to break through a trillion-dollar market cap. The reason for the stock price surge was mainly the AI ​​that began to be popular again this year, especially on May 29 (see below) at a demo, Huang Renxun released a video in which an AI-simulated NPC character in a cloud game can speak smoothly to the player, which made my throat dry and my hands sweaty after playing games for 30 years. In the excitement, there was a faint fear, after all, for decades, the output of Hollywood sci-fi movies such as the “Terminator” and “Matrix” series has planted an idea in our heads: Is this the last wave of earth productivity development? Will AI robots generate self-awareness and then become the masters of this planet, and carbon-based humans will become the previous generation of earth overlords like dinosaurs, replaced by silicon-based AI robots?

Concerns like this come from the ultra-high-speed development of human technology over the past 300 years. It seems a bit too FOMO. Look at the chart below, which shows the development of Eastern and Western civilizations since the birth of humanity 16,000 years ago. For the previous 99% of that time, the level of development was basically a flat line until Watt invented the steam engine in 1776, marking the beginning of the first industrial revolution. From then on, the speed of technological advancements skyrocketed at a 90-degree angle.

It is important to emphasize that two other epoch-making events occurred in 1776 that are on par with the steam engine: the publication of the U.S. Declaration of Independence and Adam Smith’s “The Wealth of Nations.”

These three events laid the foundation for human entry into modern technological civilization: the steam engine represented the beginning of the replacement of manpower by machinery, and human productivity was geometrically released; “The Wealth of Nations” provided the theoretical basis for how the surging productivity could be applied: a free-market economy; and the Declaration of Independence established a new form of regional governance: the three powers of democratic constitutionalism and small government, to ensure that the fruits of productivity transformation would fall into the pockets of those who contributed to it. All three are indispensable, with the latter two being the practical embodiment of the productive relations that complement the productive forces.

In my opinion, productivity is like a precious sword, and productive relations are like a scabbard that not only maintains the blade but also restricts it from causing harm to others. If the two are paired well, with the sword drawn, the hand is like lightning, and cutting meat and vegetables is a breeze, certainly stronger than the “rat’s tail juice” of Teacher Ma Baoguo’s lightning five-whip.

According to textbooks, there have been three more industrial revolutions in the two centuries since the first industrial revolution: the second industrial revolution, which began in 1850 and was represented by the internal combustion engine and power systems; the third industrial revolution, which began in 1950 and was represented by biological and aerospace technologies; and the fourth industrial revolution, which began in 1975 and was represented by new energy, information technology, and the internet, among other things. Currently, we are still in the process of the fourth industrial revolution.

From the definition of the “Industrial Revolution,” I have always believed that the first and second ones count as such, while the third and fourth ones should be considered “tech revolutions.” In terms of the development of productivity, the first two industrial revolutions liberated people’s legs and hands with efficient machines, allowing people to satisfy their material needs and enter the era of mass production, which gave rise to the emerging industrial working class. Marx, an astute observer, captured this information and deduced that the growing working class would inevitably have fundamental conflicts with the capitalist class over the distribution of labor surplus value and would fight to the end. The revolutionary Lenin adopted Marx’s theory and conducted a social experiment on the Russian land, establishing the world’s first socialist country, the Soviet Union. In order to distinguish it from the market economy of Western capitalist countries, he adopted a planned economy to promote the development of productivity.

The planned economy of the Soviet Union emphasizes the public ownership of all property, which is convenient for centralization and allocation of resources. When an economic system is ready to rebound from the bottom up, this production relationship, which concentrates power to accomplish great things, is obviously conducive to the development of productivity. The Western market economy school also emphasizes the need for “big government” to participate more in the market with “Keynesianism.” In fact, the Roosevelt New Deal in the United States and the Kishi Nobusuke New Deal in Japan after World War II both copied the Soviet Union’s homework and had a good effect on improving productivity at the time.

Therefore, during the first two industrial revolutions, with the help of machines, productivity developed rapidly from the bottom up, and different production relationships could play a good role in promoting productivity. This led to the existence of two ideological superpowers in the world at that time: the United States and the Soviet Union.

The fourth technological revolution we are currently experiencing is using technological products to liberate people’s eyes and ears, allowing people’s spiritual needs to be further satisfied and aiming to satisfy the higher-level hierarchy of Maslow’s hierarchy of needs. Various sub-sectors, such as artificial intelligence, clean energy, robotics, quantum information technology, virtual reality, and biotechnology, are blossoming. The planned economy in the original production relationship is no longer applicable.

The collapse of the Soviet Union was largely due to the failure of the planned economy system. The top-level planned economy experts no longer had the ability to use tables to allocate production materials between the various new industries that emerged like spring bamboo. It’s like designing the economic model of a game. Adding a few nested values can make the token flow run smoothly, but if you add a hundred nested values, even the designer probably can’t figure out the flow rules.

Meanwhile, another side effect of planned economy has emerged. As time goes on, more and more control nodes (privileged departments) have been defined, and there must be relevant teams and departments to operate them. Decision-making power is becoming increasingly decentralized, and the number of people to be supported is increasing. Rent-seeking and laziness have not only appeared in the economic circulation system, but even the production materials are not enough to share: the production speed of the cake is slower than the chef’s entry speed, and the cake is given to the chefs as wages. What do diners eat? The two most powerful dynasties in Chinese history, the Tang Dynasty and the Song Dynasty, perished because of excessive production of military governors and three redundancies: redundant soldiers, redundant officials, and redundant expenses. These lessons from history are vivid examples.

In this way, the biggest highlight of planned economy-simple, direct and efficient-slowly disappeared. The western free market economy emphasizes the self-repair function of the market and the invisible hand that secretly regulates, trying to correct rather than overcorrect. In the decades of the fourth technological revolution, the free market economy has won. So still grateful for Deng Xiaoping’s keenness and vision. At the beginning of the reform and opening up in 1980, he set the tone that “market economy is also a part of socialism” and “the cat that catches mice is a good cat whether it is black or white”.

What everyone may not have thought of is that China’s reform and opening up did not initially set clear goals and steps. In fact, it was also a social experiment. China’s initial reform was to learn from the “birdcage model” of those Eastern European countries, where all enterprises were still state-owned, the power was not released, and the small power was given to the enterprises to improve their operations (this was advocated by another leader at the time, Chen Yun). As a result, the results of several Eastern European countries have proved that this approach is still ineffective.

What to do? Deng Xiaoping, who was more pragmatic, advocated taking a road that no one had ever taken before, announcing that this reform had no timetable, no specific roadmap, only one direction: to make the people rich. And he made it clear that it was “crossing the river by feeling for stones,” “doing things first, correcting mistakes later.” The socialist market economy with Chinese characteristics began to set sail. Once the supporting production relations were established, private enterprises emerged in large numbers, freeing hundreds of millions of peasants who had been bound to the land for thousands of years and igniting China’s productivity. In 1987, Deng Xiaoping himself summed up: The rise of township and village enterprises was something I personally did not anticipate, and many comrades did not anticipate, and it was not the credit of our central government.

If the definitions of the previous industrial revolutions were to gradually liberate different human functions (machines liberated human hands and feet to meet the rigid needs of material life, and high-tech products liberated human eyes and ears to meet people’s spiritual needs), could the emergence of AI be defined as the fifth technological revolution? That is, general artificial intelligence will liberate the human brain, freeing human brainpower from dull repetitive training to pursue higher levels of scientific theory, art, or creative peaks? Or will humans become slaves to AI? Is there a more suitable production relation scabbard that can accommodate AI, this new productive cutting edge?

To be continued.