The China Model’s Challenge to Democratic Capitalism

China has surpassed or will soon sur­pass the United States in many key dimensions, including economic growth, health care, education, 5G network rollout, and the development of artificial intelligence.

Today, 103 years after the Russian Revolution, central planning can finally be effective and strategic, thanks to the volume of available data and—even more important—the models and algorithms available to make sense of those data. Data‑dependent algorithms today schedule buses and trains, select medication based on patients’ genetic markers, set time-of-day elec­tricity prices, and much more.

No less liberal and market-oriented an authority than the editorial staff of the Economist has admitted that Big Data may well have changed the prognosis for “socialism”:

“The operations room of “Project Cybersyn” (short for “cyber­netics synergy”) was created by Chile’s president Salvador All­ende in the early 1970s as a place from which the country’s new­ly nationalised and socialised economy could be directed. . . . Allende had thought that, with state-of-the-art 1970s communications and computers, it would be possible for government to optimise an industrial economy. . . . The success of market- and semi-market-based economies since then has made the notion of a planned economy seem like a thing of the past. But were a latter-day Allende to build a Cybersyn 2.0 it could now gather data via billions of sensors rather than a few telex machines, and crunch them in data centres with tens of thou­sands of servers. Given enough power, might it not replace the autonomous choices on which the market is based?”

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