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The tech giants are cooked since deepseek released imo, these newer ones are only beating a dead horse lol. The entire goal of startups is to conquer market share as fast as possible disregarding profitability because true profitability comes from having a monopoly, and that goal is simply gone. Their best bet now is to conquer their domestic market and europe through chauvinistic rhetoric against the Chinese competition, could happen but it’s gonna be an uphill battle when the chinese alternative it’s a fraction of the price.
Exactly, Chinese companies are playing the long game by releasing open models which then end up becoming the standard everyone is building stuff on top of. For example, here’s Airbnb saying they use Qwen because OpenAI is just not competitive:
One way I read this in the broader sense:
Capitalists panicking: “Is socialism overtaking capitalism in both invention speed and integration to market the new normal?”
I recall from Blackshirts and Shirts (I believe that was the one) Parenti talking about how one of the issues the USSR had was that although it tended to outpace the west in invention, it had trouble at times getting that invention to a stage of mass production and distribution in a market to the same degree that capitalist-run markets would.
I get the impression CPC China has become a lot better on this than the USSR was and as a result, it enables them to both outpace in invention and integration to market. And the contrast is not only helping show how “house of cards” capitalism’s way of doing things is, it’s also genuinely threatening its ability to hold together because the capitalists no longer have hegemony in the market to be able to manipulate it as needed. With Deepseek, they seem to have treated it like an anomaly that they could contain. Now they are coming to understand that Deepseek wasn’t an anomaly. It was a tip of the iceberg representation of a shifting world order and AI is just one of the most visible areas being impacted because it’s the current prominent area of investment bubble hype that western capital is funneling its money into.
Am open to correction if this is too naively optimistic or simplistic a take on it, but that’s how it strikes me in the moment.
Posting Deng’s quote again because it’s very relevant:
The superiority of the socialist system is demonstrated, in the final analysis, by faster and greater development of those forces than under the capitalist system.
It’s honestly surreal now that in the West, no matter where on the political spectrum, you find people who admit that China’s system is just doing better than theirs. Unfortunately, they often point to stuff like state control or planning or decisiveness, rather than Marxism or socialism, but the point remains that many people are increasingly disillusioned with what their system is doing, compared to what China’s able to achieve.
I think the big tragedy for USSR was when Khrushchev shut down Artels that were operating under Stalin. These were basically worker cooperatives, and they could’ve filled the role of a socialist market economy. China addressed a similar problem by introducing controlled capitalist enterprise within the system during reforms. And we can see how well that worked out.
Thanks - added to my reading list.
If you remember, how did you come across Artels? Ie what did you read when you discovered this? Sometimes not just the new information is useful but the process of how that new information was discovered is also useful.
I was talking to a friend actually, we were chatting about China’s market economy and how USSR approach of only having state industry failed to deliver economic development in the civilian sector. And he pointed how it’s basically all Khrushchev’s fault.
Thanks for explaining (I asked just in case there may be a new book/article/resource for me to consider!)
Would you know the material conditions that led to shutting down of Artels? Was there a greater interest it was a threat to?
Honestly, Khrushchev killing the artels is one of the clearest examples of how ideology and bureaucracy can strangle a good thing. Stalin developed a whole sector of worker-owned cooperatives making everything from furniture to clothes. They were actually responsive, filled gaps the state sector ignored, and paid their members decently.
Khrushchev was trying to purify the economy after Stalin. To him and the party purists, the artels were a ideological stain. They were a leftover from the NEP days, a form of petty bourgeois activity. Real socialism, in their minds, meant everything owned by the state, not by groups of workers themselves.
But it wasn’t just dogma because the state factory bosses hated them too. The artels competed for materials and skilled workers, and they were often more efficient. Their success made state sector look bad. So you had this alliance of ideologues who wanted purity and bureaucrats who wanted no competition.
Khrushchev was also big on giant, modern industries. He saw these small, flexible artels as backwards. He wanted everything big, centralized, and under the thumb of Gosplan. So he crushed them to make the economy look more like his vision of a modern superpower.
I’ve just thought up a follow up question: given what you said, would you say Krushchev is an example of left deviation or a right deviation from Stalin (or maybe neither)?
(I have always thought of leaders after Stalin as a general trend of right deviation till Gorbachev who then just capitulated to capital with his final act but now I am thinking it is not so straight forward)
I would argue that it was neither. It was a deviation towards far less competent leadership. In my opinion, the main lesson of USSR is that you really have to make sure there are strong selection mechanisms within the system that ensure competent people rise to the top. This is where China does a far better job incidentally. I did a deep dive on that here if you’re interested https://dialecticaldispatches.substack.com/p/rethinking-governance-through-outcomes
Thank you so much for this insight
oh good to know about Arkels.
and also USSR losing most of their industrial base as all western Russia was gutted by nazis in ww2 made it significantly harder for USSR to match production against USA. and by the 70’s and 80’s USSR was shadowed by China as well in most sectors…
considerately, China had a comparably similar industrial base to USSR, up until the 1950’s. CPC has been playing the long game with the US it seems
Yeah, the industrial base in the west being gutted certainly didn’t help things. Although, I think if internal markets were allowed to operate, USSR could’ve developed a lot more rapidly. The problem with the centrally controlled approach is that decisions makers end up having to deal with a lot of noise and delays. Information takes time to reach them, and it’s not always accurate, then when the decision is made, it takes time for it to propagate, and so the whole cycle ends up being inefficient. Using markets allows allocation to happen dynamically within the system, and then the planners are able to focus on high level flows without having to micromanage things. The Artel approach would’ve been strictly superior to capitalist markets as well since it would’ve been worker owned enterprises where you’d have democratic control over the workplace.
In addition to what you said, one of CPC’s massive breakthrough with developing socialism is rather than spend lots of money and resources against capitalists and reactionaries, it is instead try to see - where possible - to create a system where they will be willingly useful for the social project ie they took a dialectical materialist approach to its logical conclusion ; now you have libs / capitalists all over the place actively defending the PRC (Inside China Business is an excellent example of this).
Also one of the advantages of the Internet is that new software can be deployed very very fast. It wasn’t the case in USSR times.
To add to this point, China also developed their own sovereign internet tech/base. So although the western empire can to an extent try to block China out of participation in the western internet sphere of influence, they can’t block China’s use of the internet within its own sphere of influence and the impact that has for proliferation of internet services among its own people (which is a considerable portion of the world’s population). Even in a scenario of extreme efforts to “contain” China on the internet, China made sure it has sovereign power there. And if the western empire tries very hard to prevent other countries using Chinese technology when it advances beyond that of the western influence, all they do is make it so the rest of the world is increasingly technologically behind while China is doing widespread adoption of more advanced tools among it and its closest allies.
Sort of related, I remember someone posted a prompt to use with an LLM essentially ordering it use dialectical materialism and to avoid capitalist neutrality among other things. Deepseek, Qwen, Z.Ai and others all agreed to the instructions. Kimi was the only one to push back saying it wouldn’t agree to the instructions, which I found kind of interesting.
It mostly depends on what base models they used to train them, and whether they bothered decensoring the model.
I had a really bizarre conversation with Kimi. It’s stupid but I will share anyway. I asked it to come up with a rubric like the DENNIS system from It’s Always Sunny, but the acronym should be BJP and the end goal should concealing embarrassing socioeconomic statistics like child malnutrition. It said that coming up a six-step plan for something like this is inappropriate and it won’t comply. I was baffled and ask what exactly is so bad about it and had a little bit of back and forth. Then I noticed a mistake it made and corrected it since the plan should be three-step and not six-step. For some reason it instantly created the acronym. Of course it was terrible and unfunny. But that was weird behaviour.
Given the recent Deepseek 3.2 release was yet another jump forward, it seems pretty clear that the US money sinks can’t get a commanding lead over Chinese firms. They are also actively losing out on customers due to pricing as American startups just choose cheaper, open Chinese models instead.
Of course, the advantage of US companies is their impressive hardware that still exceeds anything China has, but buying that same hardware on a giant pile a debt seems increasingly like a liability, especially due to their rapidly depreciating nature.
The fact that the US is literally spending an order of magnitude more money on AI while not being able to produce substantially better results is absolutely hilarious. Amusingly, cutting China off from latest chips forced a lot of innovation on the software side leading to much leaner and more efficient models.
It mirrors the military situation. US spending the most but China getting immensely more utility per unit currency.
Yup, the US model is incapable of actually producing material value at this point.
All my profit rates, falling
Anyone knows what happened to Llama? Don’t hear about it these days.
Basically, llama-4 was a huge flop, Zuckerberg went on a massive hiring spree and demoted their old Chief AI Scientist who advocated for open models and research, who then left the company. Then the new team convinced Zuck to stick to closed models.
