Innovation is power, which drives major breakthroughs and, once in a while, the industrial revolutions even change the course of world politics.
The four industrial revolutions as cited by mainstream historians were coal in 1765, which set in motion Western imperialism; mass production and transportation in 1870, which propelled the US to become a world superpower; consumer and digital electronics and automation in 1969, which drove the breakup of the Soviet Union, an incompetent consumer market; and — less well-defined, but equally consequential — the Internet, social media and biotech in 2000, which led to the Arab Spring and former US president Donald Trump.
This year is the beginning of the ultimate industrial revolution: artificial intelligence (AI).
Its capability would first and foremost be demonstrated in the world’s cold and hot wars.
It is not hard to imagine AI-assisted espionage, or swarms of drones orchestrated by AI with satellite and human intelligence carrying out attacks on military targets with laser precision.
Human response time can hardly compete with machines. On top of that, using machines for war is much easier than increasing military recruitment.
AI would also have a far reaching impact on the world economy and politics.
Societies value personal ingenuity and individual creativity, and human originality would benefit from the AI revolution.
AI-assisted services, transportation, production, research, learning and teaching, healthcare, security and so forth would take human civilization to a new level.
On the other hand, authoritarian countries that restrict personal freedom, private industry and information flow would fall behind.
Communism is hostile to private enterprise in its attempt at “fair” wealth distribution, but that ultimately turns off innovation, the engine for economic growth.
While capitalism is incapable of eradicating wealth disparity fair and square, it does enable wealth creation through innovation.
Democratic states with free enterprise provide the right incubator for innovation in every walk of life to flourish, and would continue to improve lives and livelihoods through the AI revolution.
However, the wealth divide for countries and people of haves and have-nots would undoubtedly worsen.
Organizations of all shapes and sizes would be affected by the AI revolution.
Homes would have AI assistants. Tools, machines and vehicles would be more accommodating, friendly and intelligent.
The power of “creative destruction” — in which innovation replaces the obsolete — would be most formidable. Business entities that fail to adopt AI and do not grow smarter might easily go under.
This “creative destruction” from AI would likewise bring the inevitable to communist societies.
When the AI economy takes hold in democratic countries, it would become evident that authoritarian countries are being left behind and that communism is a total failure by contrast.
China’s economic woes, reflected by youth unemployment, a housing bubble, defaults, fleeing capital and deflation might even be enough to cause the demise of the Chinese Communist Party (CCP).
An average Chinese dynasty lasted about 200 to 300 years, but any more unified regime reigned shorter by governing a war torn society. The Qin Dynasty’s rule lasted only 15 years.
The CCP was established in 1921 and has ruled China since 1949.
To think that it would rule China for another 100 to 200 years would be overly pessimistic, but to expect it to fall in one to two years would also be optimistic.
It might be rather realistic to plan the collapse of CCP in 10 to 20 years.
While the least liquid money supply (sometimes called M4) — real estate, private equity and collectibles — does not drive the economy as swiftly as M1 or M2, it does provide stability to the economy and reinforce consumer confidence.
M4 can always be the last resort for life-saving measures and is the rock for a family to bank on.
The Communist Manifesto prohibits private property.
The collapse of the real-estate market in China has vaporized the wealth of most Chinese. As a result, individuals and families in times of despair have to rely on help from the government or the community, and that can hardly be assured.
This spells trouble for the Chinese economy to restore consumer confidence to break ever-spiraling deflation.
Similarly, the Russian economy after two years of the Ukraine war has reached a breaking point.
As Ukraine hits nearly half of Russia’s biggest oil refineries, the economic chaos and the political unrest of Russian society would surely become ever more serious.
With or without the military and political forces, the economic force of an AI revolution would cause communist regimes to implode and break up into smaller pieces.
The triumph of capitalism through the AI revolution would hopefully give the economic system another opportunity to eradicate its shortcomings.
James J.Y. Hsu is a retired professor of theoretical physics.
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