English Language And Literature By Helen Toner Pdf 11
Marie Ota
James: Hey, everyone. Welcome back to Browser Bets. Today I'm with Helen Toner, the Director of Strategy at Georgetown Center for Security and Emerging Technologies. She's also on the board of OpenAI and has a wealth of knowledge and experience both about China, technology and artificial intelligence and we're so excited to have her on the show with us today. Anything I missed in your bio there?
Helen: Yeah, I am a huge fan of forecasting and using bets as a way to make our opinions, beliefs and ideas about the world more concrete and make it easier to engage with them. I work in Washington so there's a lot of social pressure to be an expert on everything.
James: Fair enough. Let's dive into the first one and talk about Chinese economics. I'm a lay observer but what do you think people should know? What are the trends that are interesting to predict?
Helen: My day-to-day work is national security focused, so the big one that comes up here is just the relative power of the US and China, the rise of China, and China becoming economically and militarily much more powerful than it has been before.
There's some stuff we can already see there. If you're just looking at straight up GDP numbers, for instance, the US has its line that's been going up and China's line has been going up. And, not to get too nerdy, but if you look at one measure of GDP which is adjusted for purchasing power -- so saying, "Well, it turns out lots of stuff is cheaper in China so their GDP is effectively higher" -- if you adjust for purchasing power, China already passed the US in terms of GDP, around 2016, somewhere in that vicinity.
If you don't adjust your purchasing power and you just look at nominal GDP, which is literally the number of US dollars without any adjustments, then the US still has higher GDP and China's slowly closing in and I think is expected to crossover in the next 10-ish years. Again, this would be something I think various statistical agencies would have very high quality projections of.
I'm not sure what could be interesting to try and bet on there. I think literal GDP forecasts, I would just go look at the statistical agencies and see what they say and be like, "Yeah, probably that's right." Like the World Bank or, I'm not even sure who would actually have the right stats there, but experts have done that.
Helen: I think in nominal GDP, they probably will. Then there's this whole other question, I don't know how much of an international relations theory deep dive you want to do, but there's a whole other question of if we're thinking about China's rise in a holistic sense.
Obviously, GDP is just one measure and so there's lots of different ideas about if we want to talk about China rising to the level of great power that the United States is. People will give all kinds of different metrics. One that I think is interesting, which I think is due to Michael Beckley, is taking GDP and multiplying it by GDP per capita, the basic idea being that the total size of an economy matters but also the GDP per capita matters because that's about how much wealth each individual citizen has, how much spare money does the government have to use for things and so on and so forth.
And then, the GDP per capita starts getting all entangled with demographic factors, like: are China's fertility rates slowing too quickly? The Chinese goal is to get rich before they get old, meaning to reach a higher income level before the population is an aging population in the way that you see in Japan or even the US to some extent.
James: Well, which ones are most interesting to you? I love that stuff, by the way, it reminds me of OBPS, on-base plus slugging percentage in baseball, where they take these stats and they combine them together to give a fuller picture, I think that's really clever.
Where do you see the biggest gap? You're in Washington every day and you're having, hopefully, very sophisticated versions of this conversation. What do you think is the biggest gap between what you see on the front page of the paper versus what might be worth making a bet about?
Helen: Yeah, I think in Washington, there's lots of different opinions. So, I don't feel like there's an expert consensus here that is different from what you would see on the paper. To state it in simplified terms, the big debate would be is China just rising so the US is at, maybe, the peak of the relative power it's going to have for this foreseeable future? Or, is it more the case that China is currently rising but the wave is going to crest and fall in some sense and how could we tell and what did that depend on?
Helen: I don't know if we can take a Googling break to go check out some stats. My best guess is that I have a hard time seeing China continue to just eclipse the US more and more. I do think they're going to face some really significant challenges escaping what gets called the middle income trap which is, essentially, you see lots of countries that were poor, managed to industrialize somewhat but really struggled to get out of the middle income range where you don't have serious problems of extreme poverty but you're not at the industrialized wealthy nation level that you see in the OECD, for instance. So, my sense, having never actually dug into this that closely, is that I do expect China to start to struggle a little more in, say, the 2030s.
James: Well, what better time to do it than live with the Browser? I think it's really interesting. What would drive the slowing down? What keeps China from just continuing on to become like, I don't know, Europe?
Helen: Yeah, so a huge issue is this whole thing of can you get rich before you get old? Meaning what proportion of your population is working in the labor force, producing economic value which, in the simplest form, can be used to socially support your elderly population. So, the really simple version of this is you have to collect taxes from people who are working and so, if you have a ton of people working and a very small age population, then it's very easy to use your taxes to support the elderly. But China in the '70s instituted the one child policy because they were very worried about excessive population growth.
And so, since then, fertility has really cratered deliberately, they did that to themselves. Now they're facing this demographic time bomb, which is what it gets called if the number of people who are in full-time work, who are producing that economic value that can create a tax base that can be used to support the elderly but, also, to support everything else, right?
You use your tax base to build your military or to fund education or technology development as well. So, you can look at different curves of the total working population or the ratio of working population to non-working population or things like that and my impression is that, sometime in the 2030s, that's likely to peak and start to give them problems.
James: As a relative normie who sometimes lurks in China-watching communities, I feel like the biggest thing that is known in China-watching communities that is unknown in the rest of the world is that demographic chart. I remember the first time I saw it, just being like, "Whoa, how is this not framing every thing ... " Because periodically, there's angst in the United States around the relative competition between US and China and the demographics for the US are quite favorable in comparison to China. China's are the worst around.
Helen: It's tough. And the US does way better than a lot of comparable countries because the immigration levels are so high. We just let in younger folks and that actually really helps, it has been a huge advantage for the US.
I should say predicting what's going to happen with the future of the Chinese economy has been a fun game that folks in Washington played for decades and don't necessarily have a great track record on, so it could well be that we're mistaken again. They're definitely very serious, thoughtful analysts who think it's very possible that the Chinese government is going to find ways to steer their economy carefully through this and end up with the growth that they need to emerge out the other side. So, I think that's definitely possible, it's just not, not necessarily what I would bet on.
Helen: I think that would be the most straightforward way. We could also go into an hour's long discussion of the right methodology and metrics but I'm guessing that picking a straightforward existing stat is the way to go. Yeah, I'm pretty sure the World Bank has categories of low income, middle income, higher income. They might have more than three categories, I'm not sure but we could maybe look at what that count is, look at where China is now and see if there's a date by which it's predicted they'll exceed that or if we want to predict that they'll never exceed it.
James: Well, let's bring this back in and we'll talk it through because I think this would be the interesting part. The Googling break is done, we've now figured out what data we want to use. Helen, walk us through how we're going to structure it and then we'll figure out where we stand on the bet.
The thing that we thought might be interesting would be to compare them to a country that is generally considered to have gotten rich before it got old, for instance, South Korea. And so eyeballing South Korea's trajectory here, it looks like they were where China is now in 1999 or so. And then, say, 10 years later, they were up at about 20,000 USD.
Helen: These predictions are always totally subjective, right? Intuitively, I feel like I would give them about a 50/50 chance which might sound like a cop out answer but I don't think it is. Because if we were saying like, "Oh, yeah, they're on the path of South Korea then they would have a really good chance of being up there." And I would expect them to have a harder time than South Korea, but I don't feel sure of that. I could definitely imagine them managing it. I would be about a coin toss that they're going to make it. What do you think?
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