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HALF-FULL REPORT 04/06/18

artificial-intelligenceTrade Wars
A $100 Billion Trade War with China?
Whoa, Nelly. Why now? What is the bigger picture?

Long-term problems are being addressed in unconventional ways. Let’s start with economic freedom and the future of the private enterprise system.

The Obama White House produced studies of the impact of artificial intelligence on the American workforce. An example is Artificial Intelligence, Automation, and the Economy.

The recommendations produced the usual leftist talking points calling for more education funding, more welfare, an expectation of reduced growth as 83% of the workforce now earning below $20 per hour is expected to be replaced with automation. They were to become a permanently unemployed or underemployed class.

The White House report called for the United States to fund the lion’s share of AI research through DARPA, but not to secure the results for use by Americans.

Artificial Intelligence, the future of intelligent systems, the intellectual property rights, and the future of the United States’ modern, Western, market-based economy are the far more important reason for trade conflict with China than the chattering class’s explanation of payback to red states.

 Let’s see why…

The Chinese are attempting to control Aristotle’s Logos, the sum of all knowledge and knowledge tools through their requirement for foreigners to forgo intellectual property rights in exchange for access to their market.

President Trump has apparently thrown out the Obama era reports which concluded the American economy to be obsolete and rapidly being replaced by command economies through controlling central AI systems.

Trade barriers with China are about the future of information in the economy, whether Americans will have control over their intellectual systems or whether China will. Trump’s decision to fight the battle now, at the present level of AI development, has an analogy in the defense of Sparta at Thermopylae.

The long-awaited dream of central planners has been the arrival of computer systems sufficiently complex as to determine the allocation of resources and pricing according to the will of the leaders. Free markets allocate resources through billions of small experiments. AI proposes to replace these with self-learning algorithms.

It remains interesting that the Obama reports recognized the United States as the innovation leader without offering the slightest reason why China lacks the creativity to develop the new technologies.

Just a hint, it has nothing to do with the number of degrees granted to STEM majors. The answer is in the Ethos, the spirit behind the organization of society.

What does President Trump know about AI? Apparently a great deal. He was able to defeat the Hillary campaign by reverse engineering the democrat AI algorithm designed to track campaigns and optimize Hillary.

No further proof of his comprehension of automated decision systems should be needed. To this day, Central Planning Hillary is unable to accept that her engineered algorithm was defeated by entrepreneurial spirit and insight. Her entire existence is made irrelevant and a waste of time by this vindication of entrepreneurial spirit.

 A trade war is being viewed by the chattering class as a return to Mercantilism and President Trump’s profound ignorance of free-market theory.  Some see it as a disposable negotiating first offer.

Few see the second order problem of ceding intellectual property rights to a potentially hostile command and control economy. Such a surrender would assure an American economy in line with the Obama vision of perpetual decline and the eventual death of the West.

Artificial Intelligence

The world is on the verge of a rapid increase in machine learning called Narrow AI.

Narrow systems control production machinery; sort Google searches to favor leftists like Hillary Clinton, recognize voice messages, and select Facebook data feeds based on various algorithms. Narrow systems react to machine inputs and produce an output without producing memories of events.

Examples include self-learning machines such as IBM’s Deep Blue mastering games and the more recent versions utilizing the same basic concept. These machines work by considering a vast distribution of possibilities and then eliminating most as determined to be less than optimal via a scoring system.

Google’s AlphaGo is a newer computer neural network and confined to specific tasks. President Trump’s election established that it is easily fooled. Neural networks perform the same way each time they encounter a given situation and appear to be useful in both pushing selective advertising and optimizing searches.

The 2016 election demonstrated that bump-testing neural networks could be performed to reverse engineer their programming. The methods are the same in politics and in systems analysis to look through opacity.

The Clinton campaign began to commit gross errors after they had developed trust in their algorithm without realizing that President Trump was intentionally leading it astray.

The over-the-top response from the intelligence community after the defeat of the neural network suggests a level of emotional investment in these systems deep in the government.

The next generation of AI is now being fleshed out with autonomous vehicles and includes learned memory of prior events by the computer systems. This new level of AI is able to pull priors from memory and score them with Bayesian techniques to determine which solution residing in the system memory should be used.

The algorithm President Trump defeated did not appear to be pulling priors from memory, but the next campaign will pit President Trump against a much more capable AlphaGo. It will be David vs. Goliath once again, Bigly.

AI with the ability to learn and build priors has the potential to target information directly to voters via social media in such detail and with so many levels of “verification” that the notion of free will becomes a real question. We have yet to see the rollout of fake news driven by the technology that allows self-driving cars to navigate unpredictable highways. Soon.

Artificial Intelligence needs the next level of computing, Quantum Computing, and a vastly greater understanding of the science of knowledge and learning to reach the ultimate goal of artificially thinking machines.

We are a long way from the artificial intelligence of science fiction. We will be dealing with the autonomous vehicle level of AI in the 2020 election, and we had best be ready.

Iranian Protests

Regime change appears to be underway in Iran and is being led by minority groups.

Non-Iranian messaging apps such as Telegram appear to be difficult for government agents to throttle. Iran has ordered all messaging apps be closed and deleted from phones except for state-owned and monitored services. It appears that the population is refusing en-masse.

telegram
What makes the current attempt at regime change interesting is the non-violent and in some cases fake-violent nature, and the determination by Iranians to do the job without outside interference.

The key point stressed by increasing large crowds is the insistence that regime change is to be authentically Iranian. Not necessarily Persian, not necessarily Shi’ite.

An example is the fake brutality of a non-Iranian Arab by Iranian Arabs at a demonstration. It looks like the guy on the ground is getting his clock cleaned. He is not. It is a show for the government.

The crowds are declaring that they want self-determination but without the Mullahs. The violence is fake allowing even the beta males to feel allegiance to the cause. Iranian anger is focused on the clerics, not the civil apparatus.

https://youtu.be/-dbFajKR0LQ

Most often, crowds suddenly appear as a flash mob and participants simply walk around in circles and shift places. Then they disperse. It is a sign that they do not fear the security forces.

Flash mobs are an interesting form of protest. They arise and vanish so quickly that the government can barely get their duty teams to recognize an event before they disperse. The flash mobs embolden participants as they suffer few consequences leading to a cult-like experience. Large ones can cause all sorts of mischief.

For example, 50,000 people switching electrical devices such as lamps or heaters on and off at the same time can cause a power station to alternately vent steam and then brownout as it tries to follow the load. More fun can be had by flushing 50,000 toilets at exactly the same time.

A cult of rebellion can easily transform into a fifth column secretly acting at every hub and spoke of society.

Maybe this time the regime change will be the real deal. President Trump has been offering support for a while now including his show of direct military action against a force of Russians and Iranians in Syria back in February. Note the wording. He offers respect, he knows how to stoke a cult. And he is doing it through AI equipped social media.

trump-tweet-010318 Some more example of recent protests with police standing down.

https://youtu.be/nPiN03bxMKw

President Trump just advised the players in Iran and Syria that the United States might pull out. In other words, the US might have something else to do with its forces and the gap might be filled by another. Someone like MBS and the Gulf Cooperation Council. Iran does not want this to happen, nor do they want US forces to be available for reassignment. Hence a meeting with Putin and Erdogan.

https://youtu.be/AhGdA7cN5cQ

Enter John Bolton into the White House next week, an expert on Iran, and a guy with a track record of standing up to the America haters. Ambassador Bolton is just the guy to exert soft power as needed, hard power if it comes to that, to accelerate and embolden Iranian minorities.

Minorities make up much of the Iranian population with the Iranians of Arab and Ahwazi decent appearing to take the lead at many protests.

Young Persian women appear to be the second most defiant group. The government’s failure to crack down suggests that peaceful mass protests without much property damage, coordinated as flash mobs through messaging apps, are difficult to control.

It also means that that the clerks and cops that make the bulk of the Iranian government are not afraid of losing their jobs. The government and civil society will survive without the Mullahs.

A word on the Gulf Cooperation Council: Seventeen years of training alongside coalition forces has produced a new type of Arab soldier.

Their experience in Yemen has shown the GCC to have courage under fire and competency with modern weapon systems. They are fully capable of engaging Persian armies, or Russian forces, and securing victory on the battlefield.

MBS has proven himself to be a competent military leader employing the unique tactic of blowing targets away that are near but not directly at enemy positions. This allows enemy combatants to save face yet disregard orders from the Mullahs, eroding the will to fight.

Photographs of enemy forces engaged by the GCC in Yemen and Syria show surprisingly little wear and tear after bombardments. Forces engaged by the United States are utterly destroyed. Good cop bad cop, and the Iranians, Hezbollah, and the Houthis lose their will to fight.

Regulatory Capture

Mark Zuckerburg is expected to ask the Congress to regulate his industry. He will be speaking to Congress next week. This will be worth watching as much is on the line.

Facebook regulation

What is his game? Has he suddenly found an altruistic and civil spirit or is Zuck asking for the government to issue rules that protect Facebook from liability while locking themselves into a permanent market share?

Regulatory capture occurs when large companies or industries support a regulatory environment that creates a headwind against which new competitors can not sail.

At risk is the advertiser-sponsored model in the age of AI.

Zuck wants immunization from bad press, and possible class actions yet continue to sell personal information. Most importantly, he wants to continue to sell influence and opinion shaping psyops like experiences customized to individual users.

As a regulated utility, Zuck wants to be a quasi-government agency, and this bothers me.

Elon Musk is also suggesting regulation of distributed networks; meaning placing them under political control. There must be some confidence that their team will be in perpetual control and confidence that social media will thrive.

This week’s example from Iran of attempted messaging app throttling is a warning to avoid passing too much regulatory oversight to the government.

Communications should be protected as Constitutionally protected freedom to assemble. There is a sinister side to Zuck’s argument, and it erodes the Bill of Rights.

We need to be concerned when powerful organizations seek “reasonable regulation” to align the legal environment in the United States with other governments.

President Trump appears to be standing up to China and intellectual property rights. Zuckerberg appears to be capitulating. He does not speak for me.

Mike Ryan is an engineering consultant serving the global minerals, fibers, and chemical industries.