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Watching nearly the entire software-financial complex burn to the ground when the vaunted "moats" dry up is going to be a hell of a sight. All this AI hype is just going to end up commodifying the very thing that the entire industry is built on: management of processes.

Places that understand that physical production cannot be abstracted forever will prevail.

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Agreed, and this is a somewhat recent phenomenon (see wtf happened in 1971)

For example, we have 100+ drone startups in the United States. But our overall drone production capacity (hammers in Civ) hasn't actually increased. We just have 100 companies buying grey market from Vietnam and Indonesia, many of which came from China originally.

The way the system should work is if you want to do a drone startup, you need to build a drone factory. That's what the money is for.

If the startup fails, maybe the market leader buys the factory for cheap. This is how the automobile industry was in the United States - a bunch of those companies went bust, but the factories were often kept online by the winners.

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> Well the problem is US wants to be the world's managers.

I think the problem is more nuanced than that. The US was effectively "the world's managers", in the sense that their economic might, entrepreneur culture, and push for globalization resulted in a corporate structure where the ownership and executive levels were US whereas non-critical business domains reflected the local workforce, whether it was the US or not.

This setup worked great while the US dominated the world's economy and influenced their allies and trading partners to actively engage in globalization.

Now that Trump is pushing for isolationism, of course things change.

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I would push on how well GDP measures "economic might".

If I were to tell you a country over five years grew its GDP 5% in 1900, that would mean houses and roads and factories and mines and a whole range of things were built.

In 2020, 5% real GDP growth could be an increase in the value of various services. In fact, you might not need to change the physical world at all to achieve that growth.

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GDP made sense in 1900, back when it took so much labor to keep us all alive and well that we could think of any economic activity as a proxy for progress towards that goal--a goal we could all agree was good. Our concept of value was mostly aligned with our values, so more = better.

Nowadays we're more in conflict, partly just because we can afford to be without risking immediate starvation. Billions get spent on swaying an election this way, more billions get spent on swaying it that way. Dollars spent in both directions count as GDP even though each one has another dollar on the other side pushing in the opposite direction. And it's not just elections, everywhere we're building moats instead of solving problems. It's a very busy way to not go anywhere.

We need to move from scalars to vectors--progress towards some goal--otherwise we're just patting ourselves on the back for working hard to no effect.

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Services are all basically a proxy for the physical world though. Other than things like art and media that people value for their own sake.
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Google and Facebook?
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The problem is that things like houses and boats became political tokens and/or don't have the same profit scaling as software. Housing is mostly restricted by political opposition that made it very hard or even illegal to build much. Building ships is labor intensive which is expensive here, but AFAIK at least construction of navy ships has become a bargaining ship that gets moved around to support senators rather than being allocated to the most efficient place. In general it also seems like unions in the US are somehow more of a problem than in Europe or at least Germany where I grew up. They seem less powerful here but somehow less reasonable.
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>we
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