Against WALL-E-fication

And more from this week…

Daniel is on assignment in Europe, so just Oren this week.

I was having dinner with a group of students at an elite university recently, when the conversation turned to social media. They felt it was terrible for them, but also that they could not resist it. They knew it was more-or-less brainwashing them, delivering products designed to “engage” them with rage-bait and conspiracy theories, but they saw this as an excuse for why they were now brainwashed, not a reason to log off. In short, they had surrendered their personal agency. The algorithm had not only hijacked their attention, it had worn down their ability to fight back.

One student was fighting back, in a sense. He had noticed his attention span waning to the point where he could no longer enjoy a movie, or even watch YouTube videos at 2x speed. He’d then found a way to boost that to 4x. With genuine pride, he described determinedly rebuilding the necessary mental muscles until he could again sit through an entire movie. That’s what passes for progress.

The problem is neither anecdotal nor limited to particular age groups. The much-discussed report issued this week by Yale University on “Trust in Higher Education” (of which more is below) has a remarkable paragraph on the issue in its discussion of failures in the classroom:

These challenges are compounded by the technologies that now pervade campus life. In our conversations with faculty and students, few concerns came up more consistently than the problem of sustained attention. Faculty described classrooms in which students are physically present but mentally elsewhere: scrolling, messaging, emailing. Students themselves largely acknowledged the problem. Few disputed that devices in the classroom undermine the learning experience, and many described feeling unable to resist the pull even when they wanted to.

That’s at Yale, mind you, a collection of the most driven and focused and academically inclined young people in the country. How do you think the typical 20-year-old is doing? Or how about the typical 70-year-old? An especially depressing piece in the Wall Street Journal asks “Where Does Our Free Time Go in Retirement? Too Often, It’s Social Media.” Stephen Yoder, a recently retired Journal editor, writes:

Let’s have a show of hands: How many retirees have ended a day looking up from the phone, wondering where the time went and feeling the mental equivalent of having finished off a family-size bag of potato chips?

Yeah, that’s what I thought.

On the job, I did my share of surreptitious video-watching and Twitter-scrolling and e-commercing. But deadlines and bosses drew me back into the real world, much as the schoolday and homework and parents broke my TV trance as a kid.

As a retiree, I have little to rely on but self-control, of which I have little when my phone is in hand.

Recently, Clare Morell wrote an outstanding essay for Commonplace that you should read in full, on “The Adult Side of the Tech Exit,” in which she marshals the overwhelming evidence that the smartphone culture is as bad for adults as for children. We’ve all chosen to focus on “protecting” kids and improving academic achievement, because we are mostly comfortable with the idea that kids can’t be expected to make good decisions for themselves and nanny-state interventionism is in fact common-sense governance, not to mention the obvious table stakes for a public school system. But what if, when it comes to human flourishing, adults are in need of at least as much help? And what if, when it comes to their participation as citizens in a republic, the damage being done by the smartphone and its ecosystem are in fact much more costly?

This is where the debate often devolves into one over the definition of “addiction.” On the side inclined to at least contemplate some sort of intervention, but constrained by the strong assumption that only the physical compulsion of addiction justifies constraining the choices that otherwise-consenting adults might wish to make, people find themselves trying to make the case that the logic of heroin should apply. On the other side, suspicious of any attempt to intervene, people argue that this does not meet the biological definition of “addiction” at the level of brain chemistry.

But so what? Who cares if the challenge is technically “addiction,” or if the challenge has any analog in the annals of public policy? To the contrary, the case is stronger if one starts by stipulating that technologies like the smartphone and social media are sui generis and the effort to reason toward a response by analogy is thus unhelpful. Fundamental transitions in our production system and consumption patterns, from the Industrial Revolution of the 1800s to the mass market of the 1900s, have necessitated entirely new roles for government and modes for policy. As Teddy Roosevelt said in his famous “Man in the Arena” speech (actually titled “Citizenship in a Republic”) in 1910:

We can just as little afford to follow the doctrinaires of an extreme individualism as the doctrinaires of an extreme socialism. Individual initiative, so far from being discouraged, should be stimulated; and yet we should remember that, as society develops and grows more complex, we continually find that things which once it was desirable to leave to individual initiative can, under the changed conditions, be performed with better results by common effort. It is quite impossible, and equally undesirable, to draw in theory a hard-and-fast line which shall always divide the two sets of cases. Thus every one who is not cursed with the pride of the closet philosopher will see, if he will only take the trouble to think about some of our commonest phenomena.

One rule that does hold in every case: the time it takes to realize the need for adaptation is a period of worsening outcomes and outlandish abuses that seem both horrifying and puzzling in hindsight. No one reads The Jungle and thinks, well that makes sense, after all, it’s pretty much how Ezekiel used to butcher cows on his farm. In every case, the people who are driving the change, profiting from it, and insulated from its costs also hold most of the economic, cultural, and political power. Change happens when everyone else becomes sufficiently outraged to demand it. You might call it populism.

For the modern technology ecosystem, that moment may be upon us, and if not we had better get there quickly. Because unlike with those prior challenges, this one directly undermines our ability to respond. We’ve entered a vicious cycle where institutions are accommodating rather than confronting the consequences of the transformation. As covered here previously, universities are lowering standards rather than holding students accountable for being able to read whole books, or even watch whole movies. Schools are “gamifying” the math lesson on the Chromebook the students all stare at, in hopes of recapturing attention by reinforcing its absence. Newspapers are investing in short-form video, other media optimizes output for “the clip,” political campaigns fight to win the meme battle.

Simultaneously, we are beginning to adopt a form of artificial intelligence that will compound the problem: sycophantic chatbots that will tell you whatever you want, services and devices that promise convenience and efficiency but only if you’ll reorganize your entire life around generating data for them to process, outright “cognitive surrender.” At American Compass, we’ve started referring to all this as “WALL-E-fication,” in reference to the state to which humans reduced themselves in the Pixar film: blobs on floating recliners staring at personal screens. If someone watching the movie today looks up, instead of just down at their phone, they’re likely to see the same thing all around them—except that our recliners don’t float.

That we all know people will inevitably find themselves falling into this kind of life if given the choice, that we see ourselves in fact falling into it right now, is not an argument in favor of letting it proceed as fulfillment of a free people’s revealed preference, but rather an argument for stopping it now, whatever the cost, before the muscle atrophy deprives us of the ability to fight back at all. In WALL-E, the human blob who must literally take initiative to wrest control of the ship back from the AI barely has the strength to hold himself upright. Do we?

If so, we’ll need to transform our educational institutions from pre-school through graduate-level professional school quickly—pretty much rip the technology out at the roots. Even if that were to harm test scores or conventional measures of academic achievement, those outcomes would need to take a back seat to forming citizens capable of self-government. Fortunately, test scores were also better when screens were too expensive to put anywhere but the computer lab. It’s not clear what the cost is for removing them now, except to the purveyors of Ed Tech.

For children and grown-ups alike, we’ll need to build from first principles of human flourishing and communal life. Those, not click-throughs, are the nonnegotiable. The analogy from which to reason is not about how we’ve treated a particular challenge, but rather the meta observation that for each new challenge we’ve needed new answers: organized labor after industrialization, antitrust and strict product liability in a national market, environmental standards when the air really did become unbearably dirty, the public health campaign in response to cigarettes. We should ask ourselves the extent to which it is the devices versus the applications versus the content that are the root of the problem. And then we should figure out how best to alter economic incentives, cultural norms, and legal constraints in response.

None of this is an argument against technological progress. The printing press, industrialization, electricity, the internal combustion engine, the digital age, a device that provides instant access to humanity’s knowledge and instant communication with friends and family around the world—these are good. Artificial intelligence can be good. But they are good only to the extent that the technology is serving people, not the other way around.

The same goes for liberty, and innovation, and efficiency—all are important, none are necessarily served by blind faith in the free market and unquestioning deference to individual choice. A useful question to ask defenders of the status quo is: How would their arguments apply to the Buy n Large Space Ship experience? Are those blobs enjoying the fruits of extraordinary freedom and progress? And if not, at what point would our “closet philosophers,” to use Roosevelt’s term, have stepped in and said no, this has gone too far? A worldview that has no case or vocabulary for resisting WALL-E-fication is a dangerous one for this moment. Anyone who would want our civilization to stop short of that point should be slamming the brakes now.

WHICH BRINGS US TO OUR INSTITUTIONS OF HIGHER LEARNING

The aforementioned Yale report is worth a perusal. As the New York Times reports, it offers “a brutal assessment of academia’s role in creating the forces challenging American colleges and universities,” for which a panel of Yale professors should be given their due. That said, the framing around “trust” underscores the distance left to travel. Focusing on “trust” is what you do when you don’t want to address your substantive failures—kind of like a political party attributing its losses to a “messaging problem.” Universities don’t have a trust problem, they have a trustworthiness problem. As elite institutions, their goal should not be figuring out how to keep the public on board with their own agenda, it should be serving the public well.

(For more, I wrote about this at length last year, in “Of the Elite, by the Elite, for the People,” one of the most popular things we’ve published in Understanding America.)

Among the other things going poorly, the Wall Street Journal describes “The Small Private Colleges Dying in a Winner-Take-All University Marketplace.” Just days after that story went to press, Hampshire College (a small, private, and, it should be said, radically progressive college) announced it would be closing its doors next semester after 50 years (New York Times). Meanwhile, reports Bloomberg, “Anxious Parents Are Spending More Than $50,000 to Land Their Kid a Job”:

Her six-month programs run from $4,000 to $15,000. “I call it part two,” says Hendler-Grunt, who advertises a placement rate of more than 80% for her clients. “You make all of this investment with college advisers and SAT prep to get them in. Our goal is to get them out.”

Across the pond, they seem still to be making things worse. The European Conservative reports, “King’s College London Urges Lecturers to Overlook Poor Grammar to ‘Embrace Diversity.’”

GOOD READS FOR YOUR WEEKEND

Let’s stick with Europe for a moment, because the New York Times has a remarkable story on the wonderful Sam Samson, “The 27-Year-Old Diplomat Waging Trump’s Cultural War With Europe.” Seems like they were going for a hit piece, but it comes out mostly illustrating the embarrassing inability of elite progressive institutions to comprehend that their own preferences are neither the neutral baseline nor the permanent state of the world:

The memo’s subtext appeared clear — and alarming — for mainstream leaders in Europe. In country after country, the United States was drastically shifting its approach. Groups fighting for gender equality, women’s rights, gay rights and electoral reform were out. Organizations dedicated to religious freedom, right-wing speech and fighting abortion rights were in.

The United States, under Mr. Trump, was preparing to loosen its support of the continent unless its politics shifted rightward.

Yes, if you impose the White House’s domestic political preferences on relationships with countries around the world, then when the White House changes hands, those preferences will change dramatically. Would it be more sensible not to use diplomatic pressure to export our domestic fights? Absolutely. In part for this exact reason. Is that something that seems every to have occurred to a left-leaning State Department and commentariat before this Trump administration? Apparently not.

Good research on family policy from Jonathan Hartley and Benjamin Jaross: Do Baby Bonuses Increase Fertility? Evidence From Michigan. They find a substantial effect with one additional birth per approximately $100K spent.

Some conservative economics in the Wall Street Journal from Senator Bernie Moreno: “This worker-first conservatism demands guardrails. Being pro-business doesn’t mean giving corporate bad actors a free pass to prey on the people who make their profits possible. Corporate greed that kneecaps American workers—whether through offshoring, union-busting or wage suppression driven by an excess of H-1B visa workers—undermines the free-enterprise system.”

Sohrab Ahmari in UnHerd on “The Pope Versus the President.”

And, on one of Daniel’s favorite recurring themes, capitalism is once again surviving a tight labor market! The Wall Street Journal reports, “Restaurants Are Finding It Harder Than Ever to Hire Someone to Wash the Dishes.” Owners say “immigration crackdown and tepid interest among teens make it tough to fill jobs marked by grueling work, low pay and high turnover” and suggest, you guessed it, “a visa program for lower-skilled immigrant workers”! What happens when they don’t get that? “Sushi chain Kura Sushi is going so far as to import robotic dishwashers from Japan for $15,000 each to ease the strain.” At John’s Food and Wine in Chicago, which “charges a 20% service fee across all orders, divided up among hourly staff”:

…the restaurant’s dishwashers averaged earnings of $70,000 as a result.

“They are highly valued and their value comes with being paid well,” said Tom Rogers, the restaurant’s co-owner. The restaurant has had two of its three dishwashers since around the time it opened two years ago.

Looks like they found some essential jobs Americans will do.

SPECIAL BONUS GOOD READ FOR THE WEEKEND

The Financial Times has a great series on China Shock 2.0.

Part One: The Flood of High-Tech Goods That Will Change the World

Part Two: Should Europe Welcome Chinese Investment?

(Answer: No! And neither should the United States, as we wrote to President Trump last month.)

Part Three: The Countries Feeling the ‘Chinese Squeeze’

(No kidding. Read Daniel on why, “On China, Our Trading Partners Have Only One Choice.”)

WHITHER THE FREE TRADERS

As the FT series indicates, the transformation of the economic consensus on free trade, its limitations, and the importance of balance is almost complete.

In the Wall Street Journal this week, you could read “There’s a Case for Tariffs,” by Hillsdale College’s Paul Rahe: “Tariffs, if well designed, can promote and protect domestic production. When they are deployed to forestall disruptions, the U.S. sacrifices some efficiency for economic protection. This is a price we should be willing to pay.”

In The Atlantic, you could learn, “A Pillar of the Economics Establishment Admits That It Was Wrong.” (“In a new report, the World Bank thinks better of its old free-market absolutism.”)

And at the same time, the IMF admits domestic policy does drive trade imbalances: “Against the backdrop of persistent and recently widening global imbalances, the paper presents a structured framework for understanding how domestic policies can influence current account positions by altering domestic saving and investment decisions.” Brad Setser and Michael Pettis both provide good context for the significance of this shift.

As Bloomberg’s Anna Wong highlights: “Bank fund meeting this week in DC…very interestingly the topic is ‘Global Imbalances is back.’ Even more interestingly, France is pushing this topic at G7. (For once, it is not just US.) This is an entirely forecastable outcome after Liberation Day.”

Anna and I discuss the year since Liberation Day, the results far better than what economists had predicted, and the work still to be done, on this week’s Trumponomics podcast.

REINDUSTRIALIZATION, TODAY AND TOMORROW

One of the key debates about the Trump administration’s tariff regime is whether the intermediate inputs to manufacturing should be tariffed (to encourage reshoring of those inputs as well) or exempted (to lower input costs for manufacturers that are reshoring). We prefer the broad-based tariff and a focus on reshoring all stages in the supply chain, in part because the key opportunity for reshoring producers is not exports but servicing the domestic market. I wrote about this last year in the tastefully titled “Don’t Cry for Me, Argentinian Import Substitution.”

A good example of the benefits of this approach is aluminum. The Wall Street Journal reports on “How Oklahoma Landed America’s First Aluminum Smelter in Half a Century: Aluminum makers EGA, Century plan to break ground later this year on facility that would more than double U.S. smelting capacity.”

Conversely, our failure to attend to industrialization is now creating an enormous obstacle for a technology on which we’re determined to lead: “The US Data Center Boom Is Hitting a Transformer Crunch: More than half the US data centers planned for this year are expected to be delayed,” reports Bloomberg. Transformers are a great example of a technology we decided we could just import from China, creating enormous security vulnerabilities and leaving us unable to expand output when the race is on to build AI infrastructure. Oops! Perhaps our policy going forward should aim to prevent rather than entrench that dynamic.

One place where we have learned our lesson and are making progress is critical minerals. Even the Europeans seem to understand this one.

• EU, US Near Critical Minerals Deal to Combat Chinese Control (Bloomberg)

• EU Launches Critical Minerals Procurement Platform to Cut China Dependence (SCMP)

AS USUAL, IT ALL COMES BACK TO CHINA

The supply chains really are moving. “The US Supply Chain Shakeup After Tariffs, in Five Charts,” from Harvard Business School provides some good data. “Last year’s US-imposed tariffs sped up significant trade shifts,” they report, “toward Mexico and away from China.”

China is not pleased. “China Imposes New Rules to Block Foreign Companies From ‘Decoupling’” (New York Times):

As China’s mammoth trade surplus stokes global tensions, Beijing has enacted sweeping new regulations to investigate and punish foreign companies that stop using Chinese suppliers in response to political pressure at home. Foreign business groups expressed strong concern about the vaguely worded rules, which took effect when Premier Li Qiang signed them last Tuesday. Analysts warned that the regulations could make it harder for foreign companies to divest from joint ventures in China or shift orders to overseas suppliers. The new regulations are part of Beijing’s broader effort to counter what it sees as rising protectionism in the West, driven by a surge in Chinese exports and growing concerns about trade imbalances. China’s exports exceeded imports by almost $1.2 trillion last year, and the country notched another large surplus in the first quarter.

Not a good look for the CCP. The Brookings Institution’s Kyle Chan notes, “the thing is this may cause foreign firms to hesitate before moving supply chains out of China, but it will really cause foreign firms to think twice about investing in China in the first place going forward.”

Separately, Chan highlights that the China export machine continues to run full throttle: “I normally don’t comment on China’s quarterly data, but these numbers are mind-boggling. Q1 2026 year-over-year export growth: All exports: 14.7%; Semiconductors: 77.5%; Auto: 58.5%; Laptop & tablets: 26.7%.” Where’s it going? Europe. SCMP’s Finbarr Bermingham notes that year-to-date Chinese exports to the EU are up more than 20% from last year. Not to worry, we have Daniel over there explaining this to them.

And what do you do once you’ve established export dominance? You start using more export controls! “China Flexes Trade Power with Soaring Use of Export Controls” (Financial Times). But that’s irrational, say the free traders. Isn’t profit maximizing. Won’t happen. Wrong again.

Clean-up on aisle Detroit. Not the headlines you want to see from Bloomberg less than two days apart:

• “Ford CEO Farley Says Chinese Carmakers Should Be Kept Out of US”

• “Ford CEO Seeks to Expand Partnerships With Chinese Automakers”

Finally, watch this terrific video from Kite & Key about “Foreign Influence on Universities” (from, yes, China).

DID SOMEONE SAY UNWISE ENTANGLEMENT WITH CHINA?

I picture Nvidia’s Jensen Huang bursting through the wall like the Kool-Aid Man right here.

As has been well documented at Understanding America, particularly in “More Like Jensen Wrong, Amirite?”:

Nvidia and its CEO, Jensen Huang, have consistently said things that are, well, just not true, in an obvious, “we know they’re not true, and you know they’re not true, and you know that we know, and we know that you know, and yet you’re still saying them” sort of way.

Jensen’s PR tour has generally steered clear of any interview that might turn even slightly adversarial, or any interviewer who might be prepared to challenge him on basic facts, but even that hasn’t gone especially well. There’s no protecting him from himself when he believes H-1B visa reform is a way to tackle illegal immigration, or blurts out assertions like, “They want companies to come to China and compete in the marketplace and I believe that. … I do hope because they say it—their leaders say it. And I take it at face value.”

Still, his sitdown this week with podcaster Dwarkesh Patel was going to be a more serious test for him and, well, he failed about as badly as you’d expect. Dwarkesh excerpts the exchange on export controls here. The Institute for Progress’s Alec Stapp goes right to the heart of the issue. Dwarkesh asks Jensen:

If Chinese companies and Chinese labs and the Chinese government had access to the AI chips to train a model like Claude Mythos with these cyber-offensive capabilities and run millions of instances of it with more compute, the question is, is that a threat to American companies, to American national security?

Jensen responds:

First of all, Mythos was trained on fairly mundane capacity, and a fairly mundane amount of it. By an extraordinary company. The amount of capacity and the type of compute it was trained on is abundantly available in China. So you just have to first realize that chips exist in China.

They manufacture 60% of the world’s mainstream chips, maybe more. It’s a very large industry for them.

Nope. Sorry. The “world’s mainstream chips” that China manufactures bear no resemblance to the “the AI chips to train a model like Claude Mythos.” Jensen knows this. Dwarkesh knows this. Dwarkesh calls him out a moment later. That’s why Nvidia’s expertise is not a basis for trusting its analysis, and indeed why its arguments are not entitled to a presumption of good faith.

AND FINALLY, HAPPY 249th BIRTHDAY HENRY CLAY!

The White House proclaimed a “Day of Celebration in Honor of the Life of Henry Clay.” Well deserved! You can watch Secretary Marco Rubio deliver American Compass’s own Henry Clay Lecture, back in 2021, here.

We were especially pleased to see the White House “redesignate Room 208 of the Eisenhower Executive Office Building, the historic office of the Secretary of State, as the Henry Clay Room.” Previously, it had been called the Cordell Hull Room.

For more on Henry Clay’s rejection of free trade and centrality to the robust policy agenda that fostered American economic dominance, read Wells King’s seminal essay on “Recovering a Genuine American System.”

For more on Cordell Hull’s blinkered embrace of free trade and centrality to building a global economic system that eroded American economic dominance, read Mark DiPlacido’s likewise seminal essay on “Ideology Over Interest.”

Enjoy the weekend!