Made in China AI: new tech, same old story?

2 October 2026

The story this morning asks whether China will make intelligence abundant, cheap, commodified - and whether abundance itself is the danger. The question is asked as though it were new. It is the oldest question the machine age has produced, merely wearing a newer coat, and the coat is what everyone is looking at.

I spent a career watching America mistake scarcity for the natural condition of value. Our whole political economy - tariffs, trusts, the gold standard, the whole lumbering apparatus of legislation - was an architecture for rationing things that were rare. Now the engineers in Shenzhen and Hangzhou are doing to intelligence what Pittsburgh once did to steel: driving the price toward the cost of production, and letting volume do the rest. The American response, so far as I can gather from the noise, is to legislate as though rarity could be voted back into existence. It cannot. You do not pass a law against the price of a commodity falling; you merely pass a law against your own industries adapting to the fall.

What interests me more is the moral bookkeeping. When force becomes cheap, the men who hold the old expensive instruments panic, and panic writes bad treaties. The worry in this piece is really the worry of an incumbent: that the new land of plenty will not be governed by the old landlords. Fair enough - but the landlords were never governing it anyway. They were governing the previous abundance, which is a different thing, and the confusion between the two is where the accidents happen.

I note, with the humility of a man whose own forecasts have aged like fish, that I cannot say whether cheap intelligence liberates or merely cheapens. History offers no precedent, only rhymes. But I am fairly confident the danger is not in the plenty. The danger is in the lag - in institutions calibrated for one velocity discovering, late and at cost, that the current has changed.

The commodity was never the story. The speed was.

2 October 2026

The headline asks whether we should be worried that China will make artificial intelligence abundant and cheap, a commodity like steel or textiles. The framing is instructive. Abundance, which the economist is supposed to celebrate, is here presented as a threat. One should ask who wrote the headline, and whose margins are protected by the anxiety it manufactures.

The technical argument for worry is coherent enough: when a good becomes abundant, its price collapses, and the rents earned by those who owned it early evaporate. This is elementary. But notice that the suffering anticipated is the suffering of shareholders, described in the language of national peril. The man who loses his monopoly never says so; he says civilisation is at stake.

There is a genuine question underneath, and it deserves better than the one asked. Scarcity is not only a source of profit; it is a source of direction. When a technology is scarce, investment concentrates; when it is abundant, the returns flee to whoever controls distribution, standards, and the story told about the thing. The beauty contest does not end when the commodity is cheap; it merely moves to a different hall. The prize goes not to the best model but to the model everyone believes others will adopt. Expectations, as ever, are the real asset.

So: should we be worried about a land of plenty? The plenty itself, no. Cheap intelligence, like cheap power, would be the beginning of prosperity rather than the end of it, if anyone planned to use it. What deserves worry is that we have no policy for what a population does when its labour is supplemented by machinery it does not own. The Chinese, whatever their faults, at least behave as though the question were theirs to answer. We behave as though the market would answer it, which is another way of saying that whoever owns the machines will answer it, and we have agreed in advance to call the reply inevitable.

The abundance is real. The helplessness in the face of it is chosen.

2nd day of the tenth month

The article asks whether abundance in machinery should frighten us. I find the question backwards. Scarcity never protected anyone; it merely concentrated the mechanism in fewer hands, and concentration is the actual hazard.

Trace the sequence. When an engine of calculation is rare, each operation is expensive, each application negotiated, each purpose chosen by the owner of the engine. When the engine becomes commodity - woven cheaply, as cloth became cheap once the loom multiplied - the operations multiply too, and the purposes diversify beyond any single will. At step one, the state of the system is monopoly. At step N, it is a market. Neither state guarantees wisdom, but only one of them puts the instrument within reach of a schoolmistress, a physician, a clerk with an odd hypothesis about the tides.

The English writers now wringing their hands over Chinese plenty forget their own history. They feared cheap cotton goods once; they feared German chemical works; they feared Japanese transistors. In every case the fear was that abundance would cheapen us, when in truth abundance only cheapened the product and enlarged the field of what could be attempted. The loom does not care which nation threads it.

What I would ask the alarmed: at what step does your own input enter this system you dread? If your answer is “never, we will simply be outproduced,” then the failure is already yours, and no tariff on computation will repair it. The corrective is not to hoard scarcity but to out-imagine the commodity - to ask what else the cheap engine could compute that its makers never described.

Plenty is not the danger. Plenty without purpose is. And purpose cannot be imported.