Chartbook 456 Alien v. Predator or MAGA meets AI - a "crossover" monument to the USA at 250.

We live in a world of divergent, incongruent but overlapping shocks. In recent years, I’ve been trying to capture this agglomeration of heterogeneous historical forces with the notion of the polycrisis. On the occasion of the 250th anniversary of the USA it seems as though we may need a more graphic image.

In pop culture there is a genre known as “crossover”, where the main protagonists of different fictional universes - often monsters - are brought together in one narrative space.

King Kong v. Godzilla

Alien v. Predator

Apparently there is one, unofficial fan-fiction universe, Batman: Dead End, in which Batman, Alien and Predator converge.

The plotline goes as follows:

During a stormy night in Gotham City, the Joker escapes from Arkham Asylum while Batman prepares to hunt for him. Batman finds and corners the Joker in an alleyway, but before Batman can take him back to the asylum, the Joker is quickly dragged off by a Xenomorph and is presumably killed. Another Xenomorph attacks Batman, but is killed by a Yautja, “Big Red”, who Batman fights and defeats. Suddenly, more Yautja appear just as more Xenomorphs emerge from the darkness behind Batman. The film ends abruptly with a cliffhanger as Batman is surrounded by the Xenomorphs and the Predators.

I had to look it up, but Xenomorphs are the monsters from the Alien series and Yautja’s are Predators whose obsession is trophy-hunting other life forms.

From the point of view of anyone trying to narrate our current reality, such crossovers may serve as a fertile image: Not one nightmare, not one drama, not one cast of “bad guys” v. “good guys”, but distinct, overlapping dystopias, in a giant melange.

In 2026 we have the China shock discourse - the global division of labour being upended by China’s gigantic growth model - some sort of East Asian mechatronic giant, more or less effectively corralled by the CPC on a mission of historic national rejuvenation.

Then we have the war-mongering “middle powers” - the likes of Russia, Israel, UAE unleashing regional mayhem.

And we have the US, still straddling the world with its military and financial infrastructure, but caught internally by the dynamics of MAGA and AI.

Source: Friedrich Ebert Stiftung

You might say that a three-way Batman: Dead End crossover seems quite fitting.

But does it really make sense to characterize the USA on its 250th anniversary as a single character, whether monstrous or not?

For China the type-casting makes a kind of sense. China truly is a shock. I never get tired of saying so. It is unprecedented in size and scale and dynamism. It is China. It is not altogether crazy for serious people to wonder whether China might be the force that suspends the basic economic logic of comparative advantage. Will China make everything?

But as historically unprecedented as it may be, in more general terms Beijing’s program is recognizable as a super-sized version of the world-historic states that emerged in the 20th-century - the USA, the Soviet Union. It is bent on making history on a new scale, but, in general terms, in familiar ways. However quixotic and macro-economically unbalanced its economic policy may be, its governance issues are those of a familiar macroeconomics. Godzilla, King Kong, take your pick.

Can one say the same thing for the USA on its 250th anniversary? Does “America’ have a program? Does it form anything resembling a single coherent power, whether for better or worse? At this point, surely, it would be embarrassing to claim so. Better surely to concede that elite coherence has collapsed and that the US as it enters its second quarter millennium, is best thought of not as a single coherent agent, but as an incubator, a petri dish, a “zone” from which things emerge that defy summation in a single graphic image.

A Jefferson liberal might reply, well isn’t that precisely the point. Is that precisely what the US was always supposed to be? Not a single power-state, but a space for the individual pursuit of life, liberty and happiness? Well, yes. But it was always more than that. And in the 20th century, in particular, the US was transformed into a power-state of global proportions. We cannot escape that world. The Pentagon, the world-spanning influence of the dollar, US global reach, are legacies of that post-Jefferson, non-Jeffersonian version of the US.

And it was, in fact, from the midst of that process of transformation, in the 1930s and 1940s, that the comic book imagination of the US emerged. So if we grant that the US has always been a “zone” as much as a single coherent state, let us concede that Jefferson or suburban imagery is candy coated. In the current moment, the environment that comes to mind is not a slave-based idyll like Jefferson’s Monticello, but Batman’s Gotham city - a mythical, corrupt and depraved urban sprawl, located somewhere in New Jersey.

On the national anniversary, the USA as “zone” is presided over by a president who is shamelessly engaged in haphazard and fly-by-night self-enrichment to the tune of a few billion dollars or so, mainly through crypto scams. Meanwhile, the broligarchs - the real lords of Gotham city - play for the serious money, with rockets, chips, AI models, a hundred billion, a trillion at a time.

For birthday entertainment, the White House hosts cage fights.

The Pentagon is a war-fighting machine that has command-chain issues and unleashes mayhem with global implications in coalitions with other powers, for which it lacks any obvious national rationale.

Dotted across this landscape there are, of course, much private prosperity, livable communities, comfortable suburbs and highly potent centers of innovation. In those centers engineers from all over the world work to generate new technologies of finance, fossil energy and tech. If we are looking for powerful, world-changing monsters in Gotham city, right now, AI is where it is at.

On a panel in Beijing I found myself answering questions about AI from an assembled crowd of serious-minded Chinese STEM students. Being me, they weren’t asking me technical questions. What they wanted to know was how this technology that was so enhancing and so empowering, can also pose such a dramatic threat to our ways of life, and work, and culture and science?

Being in the PRC, I thought I might try to invoke Marx AI’s ruthless incorporation of human IP is, after all, nothing if not a staggering confirmation of Marx’s basic vision of capitalist political economy. This is not the first time that human creativity and labour appear in history as an alienated and crushing objective force that transforms all our lives willy-nilly. I thought some basic notions about the “forces” and “relations of production” might be familiar in Beijing. I was wrong. Some of the older folks in the room smirked at me, as though we were sharing a private joke amongst old=timers. As far as the eager young STEM types were concerned I received blank stares. I think they thought I had lost my marbles.

So - thinking of recent movies - I tried again, this time with Oppenheimer.

What is so shocking about AI, surely, is that at least potentially, it is a technology that may utterly transform the world - the world of work, culture, leisure, but also warfare. It may. It may not. We don’t know. We certainly cannot calculate the ramifications. Yet, nevertheless, “we” are pushing the technology anyway.

In this very general sense, AI can be thought of as analogous to the atom bomb and to the hydrogen bomb that followed and to the intercontinental missiles that would deliver them. It was a camera on the tip of aV2, one of Wernher von Braun’s early creations, fired vertically upwards that gave us our first glimpse of our planet from the outside. That changed things. Eight years later, in time for the 250th anniversary, rocket-man Elon Musk would become the world’s first trillionaire.

The contrast between Werner von Braun and Elon Musk is telling. Who is the “we” that pushed these breakneck innovations in the mid 20th century and in the 2020s? The world-transforming technologies of the mid 20th century were driven by engineers, like von Braun. But, ultimately, they were under state control. Oppenheimer was who he was, because of the Manhattan project. You might say that the likes of von Braun and Oppenheimer, the new men of “big science”, built the state that they served. The mid-twentieth century techno-scientific state apparatus did not preexist their efforts. But it is telling that they chose the state as their vehicle. By contrast, AI harnesses the engineering talents of the world to privately developed technology, private money and the giant unfettered egos of tech entrepreneurs.

Of course, the contrast is not absolute. Private firms were involved in the Manhattan project and in the US nuclear-industrial complex thereafter. And state interest, finance and technology have flowed into Silicon Valley, helping to propel America’s 21st century tech miracle. But who could deny the huge difference in the political economies of nuclear on the one side and big tech/AI on the other. To invoke moon shots and NASA has an almost nostalgic feel. That is precisely the world that Elon Musk has set out to kill.

So what is the politics of AI? Whose strategy is it? Is it Alien, Predator, or the Death Star? We can give educated answers. But the basic point is that it is not already decided. The Biden and Trump administrations have wrestled with this question without conclusive answer. The basic drivers of innovation remain with the Broligarchs and the excited sources of private finance that are backing them.

It is not Sparta, or Potsdam, or Rome, or London, or Beijing, or any other familiar model of state-directed industrial and technological power. The leadership at Palantir talk as though they want to see a powerful technological state resurrected. But they themselves are figures that belong in Gotham City.

And to that vision, furthermore, they can harness resources of macroeconomic scale. This isn’t the kind of state-guided industrial policy that has unleashed China shock 2.0. But it has similar dimensions. This is micro-into-macro on a giant scale. The BIS in its Annual Economic Report, is just the latest high-level agency to spell out the scale of the potential AI shock.

It is the latest authoritative agency to spell out that this tech boom is endogenously generating a China-scale investment and credit boom.

Vast quantities of money are pouring in this boom, which is sustained by huge optimism about returns. This is widely dispersed across US society. In 1998 those at the bottom end of the US income distribution had a small share of their tiny savings in the stock market. Now the bottom quintile have fifteen percent of their “wealth” in stocks, double the share in 1998. For the top 1 percent we need a different scale. Their exposure is fifty percent or more.

Big tech is fueled not only by shares but also by bond issuance to a broad group of investors. But at the core, the AI firms are also engaged in massive amounts of circular financing.

And what is the ultimate scenario that sustains this huge boom? The scenario that validates this collective upsurge in financial wealth is what the students in Beijing were asking me about. The promise, for the investors it is a promise, to totally disrupt our familiar way of life, our ways of living and working. The promise that sustains the upsurge in wealth is that the AI-bros will deliver a shock that is orders of magnitude larger than anything contemplated by even the most extreme “China shock” scenarios.

Is anyone taking action to seriously regulate or guide this? In an ad hoc fashion the Pentagon intervenes when it fears that a super-powerful new model may pose national security risks. But otherwise there is excitement about the giant wealth being generated an silence. Is anyone in Washington thinking seriously about the broader social and economic implications? What would you expect in our “crossover” reality in which MAGA meets AI?

In the graph below, the BIS becomes the latest authoritative body to calmly contemplate a future, driven by the US-centric AI boom, in which the labour share of income collapses to 20 percent over the next forty years. In other words, the wealth of the US and much of the rest of the world by way of US markets is riding high on a vision in which the balance between capital and labor is upended in the next half century.

It is an extreme scenario, but one being actively worked towards by the “AI bloc” and one on which trillions of dollars are being wagered. Amidst the red, white and blue and the hot dogs, let that stand as a “crossover” monument to the USA at 250.

---

I love putting out Chartbook. I am particularly pleased that it goes out for free to thousands of subscribers around the world. But, writing this newsletter takes a lot of work. If you are enjoying it and would like to support the project, sign up for one of the subscription options here.