Artificial Intelligence, Big Data, and the Return of the Plan

If you want to know the future, imagine a vast, centralized superintelligence, feeding on big data about all manner of production and consumption, allocating resources throughout the economy in accordance with the dictates of a class of somewhat pudgy old men who dye their hair jet black, smile with all the comfort of cats in a bathtub, and believe themselves to be enlightened.

Wang Huning, the fifth-most-enlightened (Xinhua)

Certain observers have claimed ever since 2012 that President Xi Jinping’s long-term intention is to further open up the Chinese economy, i.e., downsize China’s state-owned enterprises (SOEs) and allow more room for market competition, private enterprise, and free trade. According to this narrative, Xi has been accumulating the authority which will be necessary to overcome the bureaucratic vested interests who oppose free markets, waiting until his power is sufficient to push through the necessary changes. I feel that this claim is absurd, a naïve reiteration of the age-old myth of the well-meaning emperor surrounded by corrupt officials. It is no coincidence that the people making this claim are mostly Western businesspeople and financiers on the one hand and Communist Party members speaking to a Western audience on the other. I’m sure businesspeople are generally smart and all, but when it comes to China, they are too willing to delude themselves, tempted as they are by the prospect of a billion customers. And the Party is happy to string them along because it wants them to invest in China. Here’s my rule: if the Party says something directed at the foreign audience in a speech, disregard it; if the Party says something in internal documents, pay attention.

The party-state desires and has been implementing more control of the economy, not less. I would point to four pieces of evidence: one, the Belt and Road Initiative, China’s $4–8 trillion (allegedly) international infrastructure-building plan and Xi’s signature foreign policy initiative, is essentially a way of winning global goodwill while propping up China’s SOEs by providing them with markets to soak up their productive overcapacity; two, more and more enterprises in China are being required to host Party organizations inside their operations—now including jointly owned foreign-Chinese enterprises; three, the rollout of the social credit system represents a massive increase in party-state regulation of the economy; four, the Party has recently released a number of documents which explicitly call for increased planning in the economy—most intriguingly, the New Generation AI Development Plan.

Issued by the State Council on July 20, 2017, the New Generation AI Development Plan calls for the party-state to invest in AI research and nurture the AI industry, laying out various goalposts for its development. By 2020, China’s AI technology is to keep pace with the level of AI development globally, and AI and AI-related industries are to reach a value of $148 billion. By 2025, the goal is for AI to lead China’s economic growth and industrial transformation, reaching a value of $740 billion. By 2030, the target is for China to “occupy the commanding heights of AI technology” and become the world’s leader in innovation, with AI and related industries attaining a value of $1.48 trillion.

The plan also calls for the creation of laws, norms, ethics, and policies regarding AI, so don’t worry, friends, the Communist Party is going to be totally responsible about this. Of course, two of the big areas of planned use for AI are facial recognition and biometrics, but it will be, you know, responsible surveillance. It’s not like they intend to use it for prurient purposes—they just want the tools to track down thought criminals (by the way, thought-reading is also a thing now). The plan calls for AI to be “safe, reliable, and controllable,” but I can’t help but think that the Party’s concern here is not so much a Skynet scenario as the possibility that AI might enable disruption of China’s social order: they don’t want the AI to decide that the Party is an irrational factor in the equation.

Just as the CCP is banking on the potential of new surveillance technologies to address the trust deficit in Chinese society (via the social credit system), they hope that AI will enable China’s economy to escape the middle-income trap. As China’s economic growth slows down, the Party worries that the people will become restive, because ever since the 1979, the Party’s legitimacy has primarily rested on its ability to provide the people with higher material standards of living. If you buy the thesis that the Party’s only real goal is the perpetuation of its own power, then it is easy to explain the urgency of three initiatives which have been carried out under the aegis of Xi Jinping: the anticorruption campaign, the re-emphasis on socialist ideology, and now the push for AI-driven economic growth. These are all intended to boost the Party’s legitimacy.

It is entirely in keeping with the Marxist ideology that the Party should hope for technological solutions to its problems. Technological progress represents a disruption in the economic structure which lies at the foundation of society, and disruption and transformation of the economic structure is what brings about the movement of human society through the Marxist phases of history. More specifically, history is moved by technological breakthroughs which bring about productivity growth and economic growth (economic growth = population growth + productivity growth). According to orthodox Chinese historiography, farming brought about the transition from primitive communism to slave society, bronze-working brought about the transition from slave society to feudalism, the industrial revolution brought about the transition from feudalism to capitalism—and now, it is hoped, AI will bring about the transition from capitalism to socialism.

If this story strikes you as a bit lacking in detail, or omitting a certain socialist phase of Chinese society from 1949 to 1979, you’re right! The Party insists that at present, China is in the “basic stage of socialism,” a newly identified phase of history which it places between capitalism and socialism. The basic stage consists of a mixed economy: as a phase of transition, it includes both the market economy and the planned economy. Private enterprises “continue” to coexist alongside the SOEs, but eventually, the “socialist market economy” will have worn out its usefulness, and China will move on to socialism proper—that is, a fully planned economy. This narrative of course conveniently ignores the fact that there was already a phase under Mao in which there was no market, meaning China has already experienced the purely planned economy of socialism.

Certain thought leaders in China have now accepted the following explanation of the Soviet Union’s demise: the planned economy was less efficient than the capitalist economy because the capitalist economy was able to allocate resources in accordance with market signals (supply met demand), whereas the planned economy, in its attempt to process all economic signals through a central planner, was unable to identify the real needs of the economy. In other words, the planned economy couldn’t process data as well as the capitalist economy. Implicitly, the same critique applies to Mao-era China.

Jack Ma, for one, believes that big data will be able to replace market signals and allow for a planned economy more efficient than the market economy. As he told the China International Big Data Expo in May 2017: “With the help of artificial intelligence or multiple intelligence, our perception of the world will be elevated to a new level. As such, big data will make the market smarter and make it possible to plan and predict market forces so as to allow us to finally achieve a planned economy.”

Ultimately, the goal of socialism is to increase productivity to such a degree that economic growth nears infinity. This is because communism can only be attained when productivity is so great that humans are entirely free from want. Communism is an inherently utopian goal. It is the end of history. It is a society in which activity is entirely free from coercion. 

As Marx writes in The German Ideology, in all the phases of history after primitive communism and before communism—all the phases in which division of labor exists—a person “is a hunter, a fisherman, a herdsman, or a critical critic, and must remain so if he does not want to lose his means of livelihood; while in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticize after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman, or critic.”

That is communism. The CCP of course does not claim that this is the picture of China at present. Communist parties are named after their aspiration, not their means. The means is socialism. And in the case of the Chinese Communist Party, the means is the “socialist market economy” of the “basic stage of socialism,” at least for now. Wisely, no date has been set for the realization of communism, but the stated goal of the party-state is to attain true socialism by 2049.

Since taking power, Xi has repeatedly stressed the Two Centenary Goals: China is to become a 小康社会 (“moderately prosperous society”) by 2021, the one hundredth anniversary of the founding of the Chinese Communist Party, and “a modern socialist country that is prosperous, strong, democratic, culturally advanced, and harmonious” by 2049, the one hundredth anniversary of the founding of the People’s Republic of China. In the case of the first centenary, 2021, the Party has set some clear quantitative benchmarks: double China’s 2010 per capita income, achieve a 60% urbanization rate, and build a space station and an aircraft carrier. Such qualitative measures have not yet been set for 2049, but the transition beyond the basic stage of socialism and into socialism proper must by definition entail massive productivity growth; therefore, the Party is serious about the push for AI and, ultimately, an economy planned by AI. They believe (or at least Xi believes) in their own Marxist historiography and the incontrovertibility of its law: productivity growth advances human society through the stages of history. Hence, AI or some other, as-yet-unidentified supercharger of productivity is a necessity.

Xi himself has set this goal, so it is the standard by which he invites the Chinese people to judge him. Failure to reach this goal could represent a severe crisis of legitimacy for the party-state. On the other hand, it is entirely possible that by 2049, the party-state’s control of China’s information ecosystem will be so comprehensive that they could fully erase and rewrite the past with impunity (“Oceania has always been at war with Eastasia” and “China will be a modern socialist country by 2099”). But for now, I believe Xi is serious about the goals he has articulated. Whether the CCP are true believers or mere power-mongers, as they have staked their legitimacy to the Two Centenary Goals, it amounts to the same thing.