#chips act

It's also the natural next step for an industry that hates workers so much that it will pretend that their work is being done by robots, and then outsource the labor itself to distant Indian call-centers (no wonder Indian techies joke that "AI" stands for "absent Indians"):

https://pluralistic.net/2024/05/17/fake-it-until-you-dont-make-it/#twenty-one-seconds

Contrast this with climate tech: this is a profoundly physical kind of technology. It is labor intensive. It is skilled. The workers who perform it have power, both because they are so far from their employers' direct oversight and because these fed-funded sectors are more likely to be unionized than Silicon Valley shops. Moreover, climate tech is capital intensive. All of those workers are out there moving stuff around: solar panels, wires, batteries.

Climate tech is infrastructural. As Deb Chachra writes in her must-read 2023 book How Infrastructure Works, infrastructure is a gift we give to our descendants. Infrastructure projects rarely pay for themselves during the lives of the people who decide to build them:

https://pluralistic.net/2023/10/17/care-work/#charismatic-megaprojects

Climate tech also produces gigantic, diffused, uncapturable benefits. The "social cost of carbon" is a measure that seeks to capture how much we all pay as polluters despoil our shared world. It includes the direct health impacts of burning fossil fuels, and the indirect costs of wildfires and extreme weather events. The "social savings" of climate tech are massive:

https://arstechnica.com/science/2024/05/climate-and-health-benefits-of-wind-and-solar-dwarf-all-subsidies/

For every MWh of renewable power produced, we save $100 in social carbon costs. That's $100 worth of people not sickening and dying from pollution, $100 worth of homes and habitats not burning down or disappearing under floodwaters. All told, US renewables have delivered $250,000,000,000 (one quarter of one trillion dollars) in social carbon savings over the past four years:

https://arstechnica.com/science/2024/05/climate-and-health-benefits-of-wind-and-solar-dwarf-all-subsidies/

In other words, climate tech is unselfish tech. It's a gift to the future and to the broad public. It shares its spoils with workers. It requires public action. By contrast, Silicon Valley is greedy tech that is relentlessly focused on the shortest-term returns that can be extracted with the least share going to labor. It also requires massive public investment, but it also totally committed to giving as little back to the public as is possible.

No wonder America's richest and most powerful people are lining up to endorse and fund Trump:

https://prospect.org/blogs-and-newsletters/tap/2024-05-30-democracy-deshmocracy-mega-financiers-flocking-to-trump/

Silicon Valley epitomizes Stafford Beer's motto that "the purpose of a system is what it does." If Silicon Valley produces nothing but planet-wrecking nonsense, grifty scams, and planet-wrecking, nonsensical scams, then these are all features of the tech sector, not bugs.

As Anil Dash writes:

Driving change requires us to make the machine want something else. If the purpose of a system is what it does, and we don’t like what it does, then we have to change the system.

https://www.anildash.com/2024/05/29/systems-the-purpose-of-a-system/

To give climate tech the attention, excitement, and political will it deserves, we need to recalibrate our understanding of the world. We need to have object permanence. We need to remember just how few people were actually using cryptocurrency during the bubble and apply that understanding to AI hype. Only 2% of Britons surveyed in a recent study use AI tools:

https://www.bbc.com/news/articles/c511x4g7x7jo

If we want our tech companies to do good, we have to understand that their ground state is to create planet-wrecking nonsense, grifty scams, and planet-wrecking, nonsensical scams. We need to make these companies small enough to fail, small enough to jail, and small enough to care:

https://pluralistic.net/2024/04/04/teach-me-how-to-shruggie/#kagi

We need to hold companies responsible, and we need to change the microeconomics of the board room, to make it easier for tech workers who want to do good to shout down the scammers, nonsense-peddlers and grifters:

https://pluralistic.net/2023/07/28/microincentives-and-enshittification/

Yesterday, a federal judge ruled that the FTC could hold Amazon executives personally liable for the decision to trick people into signing up for Prime, and for making the unsubscribe-from-Prime process into a Kafka-as-a-service nightmare:

https://arstechnica.com/tech-policy/2024/05/amazon-execs-may-be-personally-liable-for-tricking-users-into-prime-sign-ups/

Imagine how powerful a precedent this could set. The Amazon employees who vociferously objected to their bosses' decision to make Prime as confusing as possible could have raised the objection that doing this could end up personally costing those bosses millions of dollars in fines:

https://pluralistic.net/2023/09/03/big-tech-cant-stop-telling-on-itself/

We need to make climate tech, not Big Tech, the center of our scrutiny and will. The climate emergency is so terrifying as to be nearly unponderable. Science fiction writers are increasingly being called upon to try to frame this incomprehensible risk in human terms. SF writer (and biologist) Peter Watts's conversation with evolutionary biologist Dan Brooks is an eye-opener:

https://thereader.mitpress.mit.edu/the-collapse-is-coming-will-humanity-adapt/

They draw a distinction between "sustainability" meaning "what kind of technological fixes can we come up with that will allow us to continue to do business as usual without paying a penalty for it?" and sustainability meaning, "what changes in behavior will allow us to save ourselves with the technology that is possible?"

Writing about the Watts/Brooks dialog for Naked Capitalism, Yves Smith invokes William Gibson's The Peripheral:

With everything stumbling deeper into a ditch of shit, history itself become a slaughterhouse, science had started popping. Not all at once, no one big heroic thing, but there were cleaner, cheaper energy sources, more effective ways to get carbon out of the air, new drugs that did what antibiotics had done before…. Ways to print food that required much less in the way of actual food to begin with. So everything, however deeply fucked in general, was lit increasingly by the new, by things that made people blink and sit up, but then the rest of it would just go on, deeper into the ditch. A progress accompanied by constant violence, he said, by sufferings unimaginable.

https://www.nakedcapitalism.com/2024/05/preparing-for-collapse-why-the-focus-on-climate-energy-sustainability-is-destructive.html

Gibson doesn't think this is likely, mind, and even if it's attainable, it will come amidst "unimaginable suffering."

But the universe of possible technologies is quite large. As Chachra points out in How Infrastructure Works, we could give every person on Earth a Canadian's energy budget (like an American's, but colder), by capturing a mere 0.4% of the solar radiation that reaches the Earth's surface every day. Doing this will require heroic amounts of material and labor, especially if we're going to do it without destroying the planet through material extraction and manufacturing.

These are the questions that we should be concerning ourselves with: what behavioral changes will allow us to realize cheap, abundant, green energy? What "innovations" will our society need to focus on the things we need, rather than the scams and nonsense that creates Silicon Valley fortunes?

How can we use planning, and solidarity, and codetermination to usher in the kind of tech that makes it possible for us to get through the climate bottleneck with as little death and destruction as possible? How can we use enforcement, discernment, and labor rights to thwart the enshittificatory impulses of Silicon Valley's biggest assholes?

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

Speaking at Thursday’s press conference, Rosie Torres – cofounder of BurnPits360 and the wife of veteran Le Roy Torres, who has a rare terminal condition caused by burn pits – told the senator that more veterans will die because of him.

“Senator Toomey, how many veterans are going to die because of you?” she asked. “Please explain to us: what is an acceptable amount of deaths?”

Ms. Torres branded the Republican Senators who switched their votes “25 villains” as she said the veteran community “demands answers, we deserve justice."

Mr. Stewart, who has been lobbying the government to pass the bill, slammed the “abject cruelty” of the GOP lawmakers who had voted no and warned them that delaying passing the PACT Act is costing lives. He hit out at the Senators who plan to go on recess next week when the veterans who are sick and dying don’t have time to wait.

“They’re not on Senate time. They’re on human time. They’re on cancer time,” he said. “Don’t you have families? Don’t you have people who are deciding how to live their last moments?” he asked the lawmakers.

Mr. Stewart singled out Senators Toomey, Rick Scott and Mitch McConnell as he pointed out the hypocrisy of the lawmakers who claim they support veterans but voted against the PACT Act.

He read out one particular tweet posted by Mr. Scott on Wednesday where the Florida Republican showcased photos of him giving out care packages to service men and women – the very same day he voted against the bill.

“I was honored to join @the_uso today and make care packages for our brave military members in gratitude of their sacrifice and service to our nation,” read the tweet.

Mr. Stewart mocked the tweet saying “There’s a beautiful picture."

"Did you get the package? I think it has some M&Ms in it and some cookies,” he mocked.

He also impersonated Mr. McConnell’s voice as he revealed that one month earlier he had told veterans “we’ll get it done."

“Mitch McConnell yesterday flipped,” he said, referring to the Senator’s sudden decision to then vote no to the bill.

Mr. Toomey, meanwhile, “won’t sit down” with the veterans he is impacting while he claims that he has the backing of several veterans groups.

“Pat Toomey claims that he has veteran groups behind him,” he said.

“I call bullshit – these are the veteran groups,” he said gesturing around at the multiple veterans and representative from veterans groups who had gathered at the press conference to condemn the bill’s stalling.

“They’re all here. They don’t stand behind you in fact you won’t let them stand in front of you,” he said, branding Mr. Toomey a “fucking coward."

The TV host said that – after he has spent more than a decade lobbying the US government first for 9/11 responders and then for veterans – he is “used to the hypocrisy” and “lies."

“The Senate is where accountability goes to die. They’re never losing their jobs. They’re never losing their healthcare.”

He added: “This is an embarrassment to the Senate, to the country and to the founders and to all that they confess to hold dear. If this is America first then this is America fucked!”

When asked for his reaction to Mr. Stewart’s comments, Mr. Toomey replied: “That’s not worth responding to.” His office directed The Independent to his tweet on Wednesday where he said he was trying to solve a “budget gimmick."

“Tonight, the Senate voted to give us the chance to fix a completely unnecessary budget gimmick in the underlying text of the PACT Act. This gimmick allows $400B in spending completely unrelated to veterans care,” he said.

“We can easily fix this tonight, and there is no reason we cannot do so NOW. This simple fix would not reduce spending on veterans in the underlying bill by a single penny. It’s wrong to use a veterans bill to hide an unrelated slush fund.”

When asked for comment, Mr. McConnell’s office referred The Independent to his comments on the Senate floor where he said that he supports the “substance of the bill” but that lawmakers first need to “fix the underlying accounting issue."

In March, the bill was renamed after the late Sgt. Heath Robinson who died in May 2020 from a rare cancer caused by breathing in toxic fumes from burn pits while serving in Iraq in the Ohio National Guard. He was 39.

His mother-in-law Susan Zeier choked back tears on Thursday as she branded the Senators voting against it “reprehensible” while dresssed in her late son-in-law’s army jacket. Just one month earlier she had symbolically taken off the jacket saying that she no longer needed to “carry” Heath “on her shoulders” after the Senate passed the bill.

The 16 June vote had been celebrated by veterans, their families and advocates who have spent years battling for the US government to take the issue of burn pits seriously – as the passage meant it seemed certain that the bill was weeks away from becoming law.

The bill was sent back to the House for a final vote where it passed with a 342-88 vote on 14 July. Because of a minor technical fix the House made, the Senate was required to vote on it again before it could be sent to President Joe Biden’s desk to be signed into law.

But – between one month and the next – dozens of Republican Senators decided that they no longer supported expanding healthcare and disability access to US servicemembers and decided to change their vote.

Senate Veterans’ Affairs Committee Chairman Jon Tester slammed the move on the Senate floor on Wednesday night. “This eleventh-hour act of cowardice will actively harm this country’s veterans and their families,” he said.

“Republicans chose today to rob generations of toxic-exposed veterans across this country of the health care and benefits they so desperately need. And make no mistake, more veterans will suffer and die as a result.”

Under the legislation, 23 cancers, respiratory illnesses and other conditions will now be presumptively linked to a veterans’ exposure to burn pits while on deployment overseas. This means service men and women who have returned home from serving their country and developed one of these conditions will be given automatic access to healthcare and disability benefits.

It will also fund federal research on the impact of burn pits on the nation’s troops. An estimated 3.5 million servicemembers and veterans are estimated to have been exposed to burn pits and airborne toxins while serving the US overseas, according to the Veterans Affairs (VA).

During America’s post-9/11 wars in Iraq and Afghanistan, huge open-air pits were used to burn mountains of trash including food packaging, human waste and military equipment on US military bases. Thousands of US service members returned home from deployment and developed health conditions including rare cancers, lung conditions, respiratory illnesses and toxic brain injuries caused by breathing in the toxic fumes from the pits.

But, until now, the burden of proof has always been on veterans to prove their condition is directly caused by this toxic exposure. In September 2020, a senior VA official testified before Congress that almost 80% of disability claims mentioning burn pits were rejected between 2007 and 2020.

For this plan to work, the wealthy needed to engineer changes in both the rich world and the poor world. Obviously, they would have to get rid of the rich world's tariff walls, which made it impossible to competitively import goods made in the global south, no matter how cheaply they were made.

But free trade wasn't just about deregulation in the north – it also required a whole slew of new, extremely onerous regulations in the global south. Corporations that relocated their manufacturing to poor – but nominally sovereign – countries needed to be sure that those countries wouldn't try to replicate the American plan of becoming actually sovereign, by exerting control over the means of production within their borders.

Recall that the American Revolution was inspired in large part by fury over the requirement to ship raw materials back to Mother England and then buy them back at huge markups after they'd been processed by English workers, to the enrichment of English aristocrats. Post-colonial America created new regulations (tariffs on goods from England), and – crucially – they also deregulated.

Specifically, post-revolutionary America abolished copyrights and patents for English persons and firms. That way, American manufacturers could produce sophisticated finished goods without paying rent to England's wealthy making those goods cheaper for American buyers, and American publishers could subsidize their editions of American authors' books by publishing English authors on the cheap, without the obligation to share profits with English publishers or English writers.

The surplus produced by ignoring the patents and copyrights of the English was divided (unequally) among American capitalists, workers, and shoppers. Wealthy Americans got richer, even as they paid their workers more and charged less for their products. This incubated a made-in-the-USA edition of the industrial revolution. It was so successful that the rest of the world – especially England – began importing American goods and literature, and then American publishers and manufacturers started to lean on their government to "respect" English claims, in order to secure bilateral protections for their inventions and books in English markets.

This was good for America, but it was terrible for English manufacturers. The US – a primitive, agricultural society – "stole" their inventions until they gained so much manufacturing capacity that the English public started to prefer American goods to English ones.

This was the thing that rich-world industrialists feared about free trade. Once you build your high-tech factories in the global south, what's to stop those people from simply copying your plans – or worse, seizing your factories! – and competing with you on a global scale? Some of these countries had nominally socialist governments that claimed to explicitly elevate the public good over the interests of the wealthy. And all of these countries had the same sprinkling of sociopaths who'd gladly see a million children maimed or the land poisoned for a buck – and these "entrepreneurs" had unbeatable advantages with their countries' political classes.

For globalization to work, it wasn't enough to deregulate the rich world – capitalists also had to regulate the poor world. Specifically, they had to get the poor world to adopt "IP" laws that would force them to willingly pay rent on things they could get for free: patents and other IP, even though it was in the short-term, medium-term, and long-term interests of both the nation and its politicians and its businesspeople.

Thus, the bargain that makes me sympathetic to Dan Aykroyd: not cow lips for alien tech; but free trade for IP law. When the WTO was steaming towards passage in the late 1990s, there was (rightly) a lot of emphasis on its deregulatory provisions: weakening of labor, environmental and financial laws in the poor world, and of tariffs in the rich world.

But in hindsight, we all kind of missed the main event: the TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights). This actually started before the WTO treaty (it was part of the GATT, a predecessor to the WTO), but the WTO spread it to countries all over the world. Under the TRIPS, poor countries are required to honor the IP claims of rich countries, on pain of global sanction.

That was the plan: instead of paying American workers to make Apple computers, say, Apple could export the "IP" for Macs and iPhones to countries like China, and these countries would produce Apple products that were "designed in California, assembled in China." China would allow Apple to treat Chinese workers so badly that they routinely committed suicide, and would lock up or kill workers who tried to unionize. China would accept vast shipments of immortal, toxic e-waste. And China wouldn't let its entrepreneurs copy Apple's designs, be they software, schematics or trademarks.

Apple isn't the only company that pursued this strategy, but no company has executed it as successfully. It's not for nothing that Steve Jobs's hand-picked successor was Tim Cook, who oversaw the transfer of even the most exacting elements of Apple manufacturing to Chinese facilities, striking bargains with contractors like Foxconn that guaranteed that workers would be heavily – lethally! – surveilled and controlled to prevent the twin horrors of unionization and leaks.

For the first two decades of the WTO era, the most obvious problems with this arrangement was wage erosion (for American workers) and leakage (for the rich). China's "socialist" government was only too happy to help Foxconn imprison workers who demanded better wages and working conditions, but they were far more relaxed about knockoffs, be they fake iPods sold in market stalls or US trade secrets working their way into Huawei products.

These were problems for the American aristocracy, whose investments depended on China disciplining both Chinese workers and Chinese businesses. For the American people, leakage was a nothingburger. Apple's profits weren't shared with its workforce beyond the relatively small number of tech workers at its headquarters. The vast majority of Apple employees, who flogged iPhones and scrubbed the tilework in gleaming white stores across the nation, would get the same minimal (or even minimum) wage no matter how profitable Apple grew.

It wasn't until the pandemic that the other shoe dropped for the American public. The WTO arrangement – cow lips for alien technology – had produced a global system brittle supply chains composed entirely of weakest links. A pandemic, a war, a ship stuck in the Suez Canal or Houthi paramilitaries can cripple the entire system, perhaps indefinitely.

For two decades, we fought over globalization's effect on wages. We let our corporate masters trick us into thinking that China's "cheating" on IP was a problem for the average person. But the implications of globalization for American sovereignty and security were banished to the xenophobic right fringe, where they were mixed into the froth of Cold War 2.0 nonsense. The pandemic changed that, creating a coalition that is motivated by a complex and contradictory stew of racism, environmentalism, xenophobia, labor advocacy, patriotism, pragmatism, fear and hope.

Out of that stew emerged a new American political tendency, mostly associated with Bidenomics, but also claimed in various guises by the American right, through its America First wing. That tendency's most visible artifact is the CHIPS Act, through which the US government proposes to use policy and subsidies to bring high-tech manufacturing back to America's shores.

This week, the American Economic Liberties Project published "Reshoring and Restoring: CHIPS Implementation for a Competitive Semiconductor Industry," a fascinating, beautifully researched and detailed analysis of the CHIPS Act and the global high-tech manufacturing market, written by Todd Achilles, Erik Peinert and Daniel Rangel:

https://www.economicliberties.us/our-work/reshoring-and-restoring-chips-implementation-for-a-competitive-semiconductor-industry/#

Crucially, the report lays out the role that the weakening of antitrust, the dismantling of tariffs and the strengthening of IP played in the history of the current moment. The failure to enforce antitrust law allowed for monopolization at every stage of the semiconductor industry's supply-chain. The strengthening of IP and the weakening of tariffs encouraged the resulting monopolies to chase cheap labor overseas, confident that the US government would punish host countries that allowed their domestic entrepreneurs to use American designs without permission.

The result is a financialized, "capital light" semiconductor industry that has put all its eggs in one basket. For the most advanced chips ("leading-edge logic"), production works like this: American firms design a chip and send the design to Taiwan where TSMC foundry turns it into a chip. The chip is then shipped to one of a small number of companies in the poor world where they are assembled, packaged and tested (AMP) and sent to China to be integrated into a product.

Obsolete foundries get a second life in the commodity chip ("mature-node chips") market – these are the cheap chips that are shoveled into our cars and appliances and industrial systems.

Both of these systems are fundamentally broken. The advanced, "leading-edge" chips rely on geopolitically uncertain, heavily concentrated foundries. These foundries can be fully captured by their customers – as when Apple prepurchases the entire production capacity of the most advanced chips, denying both domestic and offshore competitors access to the newest computation.

Meanwhile, the less powerful, "mature node" chips command minuscule margins, and are often dumped into the market below cost, thanks to subsidies from countries hoping to protect their corner of the high-tech sector. This makes investment in low-power chips uncertain, leading to wild swings in cost, quality and availability of these workhorse chips.

The leading-edge chipmakers – Nvidia, Broadcom, Qualcomm, AMD, etc – have fully captured their markets. They like the status quo, and the CHIPS Act won't convince them to invest in onshore production. Why would they?

2022 was Broadcom's best year ever, not in spite of its supply-chain problems, but because of them. Those problems let Broadcom raise prices for a captive audience of customers, who the company strong-armed into exclusivity deals that ensured they had nowhere to turn. Qualcomm also profited handsomely from shortages, because its customers end up paying Qualcomm no matter where they buy, thanks to Qualcomm ensuring that its patents are integrated into global 4G and 5G standards.

That means that all standards-conforming products generate royalties for Qualcomm, and it also means that Qualcomm can decide which companies are allowed to compete with it, and which ones will be denied licenses to its patents. Both companies are under orders from the FTC to cut this out, and both companies ignore the FTC.

The brittleness of mature-node and leading-edge chips is not inevitable. Advanced memory chips (DRAM) roughly comparable in complexity to leading-edge chips, while analog-to-digital chips are as easily commodified as mature-node chips, and yet each has a robust and competitive supply chain, with both onshore and offshore producers. In contrast with leading-edge manufacturers (who have been visibly indifferent to the CHIPS incentives), memory chip manufacturers responded to the CHIPS Act by committing hundreds of billions of dollars to new on-shore production facilities.

Intel is a curious case: in a world of fabless leading-edge manufacturers, Intel stands out for making its own chips. But Intel is in a lot of trouble. Its advanced manufacturing plans keep foundering on cost overruns and delays. The company keeps losing money. But until recently, its management kept handing its shareholders billions in dividends and buybacks – a sign that Intel bosses assume that the US public will bail out its "national champion." It's not clear whether the CHIPS Act can save Intel, or whether financialization will continue to hollow out a once-dominant pioneer.

The CHIPS Act won't undo the concentration – and financialization – of the semiconductor industry. The industry has been awash in cheap money since the 2008 bailouts, and in just the past five years, US semiconductor monopolists have paid out $239b to shareholders in buybacks and dividends, enough to fund the CHIPS Act five times over. If you include Apple in that figure, the amount US corporations spent on shareholder returns instead of investing in capacity rises to $698b. Apple doesn't want a competitive market for chips. If Apple builds its own foundry, that just frees up capacity at TSMC that its competitors can use to improve their products.

The report has an enormous amount of accessible, well-organized detail on these markets, and it makes a set of key recommendations for improving the CHIPS Act and passing related legislation to ensure that the US can once again make its own microchips. These run a gamut from funding four new onshore foundries to requiring companies receiving CHIPS Act money to "dual-source" their foundries. They call for NIST and the CPO to ensure open licensing of key patents, and for aggressive policing of anti-dumping rules for cheap chips. They also seek a new law creating an "American Semiconductor Supply Chain Resiliency Fee" – a tariff on chips made offshore.

Fundamentally, these recommendations seek to end the outsourcing made possible by restrictive IP regimes, to undercut Wall Street's power to demand savings from offshoring, and to smash the market power of companies like Apple that make the brittleness of chip manufacturing into a feature, rather than a bug. This would include a return to previous antitrust rules, which limited companies' ability to leverage patents into standards, and to previous IP rules, which limited exclusive rights chip topography and design ("mask rights").

All of this will is likely to remove the constraints that stop poor countries from doing to America the same things that postcolonial America did to England – that is, it will usher in an era in which lots of countries make their own chips and other high-tech goods without paying rent to American companies. This is good! It's good for poor countries, who will have more autonomy to control their own technical destiny. It's also good for the world, creating resiliency in the high-tech manufacturing sector that we'll need as the polycrisis overwhelms various places with fire and flood and disease and war. Electrifying, solarizing and adapting the world for climate resilience is fundamentally incompatible with a brittle, highly concentrated tech sector.

Pluralizing high-tech production will make America less vulnerable to the gamesmanship of other countries – and it will also make the rest of the world less vulnerable to American bullying. As Henry Farrell and Abraham Newman describe so beautifully in their 2023 book Underground Empire, the American political establishment is keenly aware of how its chokepoints over global finance and manufacturing can be leveraged to advantage the US at the rest of the world's expense:

https://pluralistic.net/2023/10/10/weaponized-interdependence/#the-other-swifties

Look, I know that Eisenhower didn't trade cow-lips for alien technology – but our political and commercial elites really did trade national resiliency away for IP laws, and it's a bargain that screwed everyone, except the one percenters whose power and wealth have metastasized into a deadly cancer that threatens the country and the planet.

Image: Mickael Courtiade (modified) https://www.flickr.com/photos/197739384@N07/52703936652/