Our world is about to become a lot more dangerous. While we have not seen outright conflict between major powers since World War II, a key technological change will make conflict between China and the U.S. more likely.
One important force sustaining world peace since the war is economic interdependence. Take the iPhone. Its parts are made in several countries and assembled in China. So, while Apple is an American company, its main factories are located in China. This global production method makes war less likely because a war between the U.S. and China means the U.S. will not only lose the Chinese market for iPhones, but also a large chunk of its production capacity. China, on the other hand, needs to maintain steady employment levels to avoid internal unrest, and since approximately 28 percent of its national income comes from exports, it works hard to make sure American markets stay open to its products. This interdependence is great for peace, because it raises the cost of war for both sides and thus makes leaders less trigger-happy. Unfortunately, automated manufacturing is about to bring this to an abrupt end by weakening economic interdependence.
Automated manufacturing may sound like science fiction, but it’s already transforming manufacturing. Robots using artificial intelligence and 3D printers, which can print out scaled objects, are replacing human workers. As the printers grow more complex, they will be able to print objects with moving parts like watches or smartphones. Intelligent robots can be programmed to do delicate work that could previously only be done by humans and can also be reprogrammed to do other types of work as new needs arise. Are they for real?
Yes. Tesla Motors, which produces 95 percent of its components in-house and uses less labor per car than traditional carmakers, builds its cars with multi-tasking robots. At General Electric, an engine fuel nozzle that was previously made by assembling 20 component parts from several countries, is being 3D printed as a single unit in the U.S. Other products already being 3D printed include bionic ears, guns and rocket parts for NASA.
Why does this matter? The happy trade relationship between the U.S. and China will collapse as manufacturing is automated for three reasons. First, once these technologies achieve scale, the cost and time lost in transport will make China redundant in the global supply chain. If you can “print” your smartphone in California, shipping it across the Pacific makes no sense. Second, these technologies are poised to take off rapidly because firms have incentives to embrace them: aside from lowering labor and transport costs, automated production helps inventory management — a key business problem. Machines can be switched on and off or reprogrammed faster and more efficiently than workers can be hired, fired or retrained. Finally, China will not be able to cope with this technological revolution because its education system is largely geared toward vocational training. As manufacturing is automated, human labor will have to shift toward design and innovation, and the Chinese will find themselves hard-pressed to learn these skills via rote learning.
Not only will automation hurt China-U.S. trade, it will also threaten stability within China. As masses of ill-trained workers find themselves unable to compete in a design and innovation economy, the Chinese Communist Party will have to adopt a more aggressive external posture by stoking nationalism to hold power. The Chinese leadership will likely become more aggressive to maintain control, and American leaders will have less to lose if they go to war with China. This seemingly far-fetched reality needs to be taken seriously for the simple reason that war has often come when it seemed least plausible. Before World War I, for instance, many thought a war was improbable.
There is a clear fissure emerging in the economic bonds supporting peace, and the world should take notice.
