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The coming technocracy

Summary:
Since 9/11, I’ve had the view that America’s security measures were wildly excessive and counterproductive. They very likely ended up costing lives by making flying so unpleasant. In the past, I’ve assumed that this reflected irrational fears among the public. Our bureaucrats are schooled in cost/benefit analysis and know that these measures are unwise. But politicians worry about being blamed by voters if there is another terrorist attack when the government had not “done everything it could” to prevent the attack. After visiting China, I’m not so sure about this. China has security checks at all subway stations. It’s very difficult to enter an office building without permission.  Many roads are blocked.  I was especially surprised by the train stations, where

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Since 9/11, I’ve had the view that America’s security measures were wildly excessive and counterproductive. They very likely ended up costing lives by making flying so unpleasant. In the past, I’ve assumed that this reflected irrational fears among the public. Our bureaucrats are schooled in cost/benefit analysis and know that these measures are unwise. But politicians worry about being blamed by voters if there is another terrorist attack when the government had not “done everything it could” to prevent the attack.

After visiting China, I’m not so sure about this. China has security checks at all subway stations. It’s very difficult to enter an office building without permission.  Many roads are blocked.  I was especially surprised by the train stations, where security is far more intensive than in either Europe or Japan—basically three layers of controls before you can go to the tracks—including passport control for a high-speed train ride lasting 15 minutes. While the Chinese government does care about public opinion to some extent, it’s hard to believe that they are under as much pressure as elected governments in Europe and Japan. Then why the intensive security?

I suspect that part of this is the bureaucratic instinct for control. Thus if you visit a museum in China you first pass through security (which is something that also occurs in some places in the West.) But then you must also show a passport in order to get a ticket, even when the museum is free. So this isn’t just about security; it’s also about information.

China’s Social Credit system has gotten a lot of attention, but in my view the WeChat payment system is the bigger story. It’s increasingly difficult to buy things in China without having the WeChat app on your smartphone. For instance, many vending machines don’t take coins or bills, only WeChat. Ditto for some restaurants.  A few days ago, we tried to buy a ride on a Ferris wheel in Tianjin, but you could only buy the tickets online. At the rate things are going, it wouldn’t surprise me if China became a completely cashless society at some point in the 21st century. (Good luck to tourists–you can’t even download WeChat without a Chinese bank account.)

In fairness, apps like WeChat offer enormous convenience for Chinese consumers.  And even in the West, most people don’t seem to care about the loss of privacy from modern technology.

I doubt whether the Chinese government pays much attention to the WeChat purchases of individual Chinese citizens. And I’ve read that the Social Credit system is not very effective—so far. But I suspect that the trends I see in China will eventually spread elsewhere, and at some point all governments will become “potentially totalitarian” in the sense of having the technological capability of exercising total control over the population. They’ll be able to know everywhere you move, everything you read, and everything you buy.  Whether they will actually exercise that control is another question, which I can’t answer.

I don’t like where the world is headed.  But perhaps younger people are comfortable with all this technology.

The coming technocracy

Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment". In May 2012, Chicago Fed President Charles L. Evans became the first sitting member of the Federal Open Market Committee (FOMC) to endorse the idea.

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