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The GOP’s new path to the future

Presented by CTIA - The Wireless Association: How the next wave of technology is upending the global economy and its power structures
Nov 30, 2022 View in browser
 
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By Derek Robertson

Presented by CTIA - The Wireless Association

Todd Young is pictured. | AP Photo

Sen. Todd Young (R-Ind.), co-author of the original bill that would become the CHIPS and Science Act. | AP Photo

A new approach to tech policy is taking root in the GOP, and it's not what you might expect from the party of Alan Greenspan and Friedrich Hayek.

Led by a handful of ambitious, policy-minded senators, a group of conservatives is embracing the idea of subsidizing the tech industry and advanced manufacturing — with an eye toward building a competitive edge over China, and revitalizing the hollowed-out industrial centers that have given the party its Trump-era populist verve.

Their tolerance, if not thirst, for government intervention might have been anathema in years past (and to some of their current peers). But as the overall regulatory apparatus increasingly finds itself racing to keep up with industry, so too has the GOP. That's allowed technocratic conservatives like Indiana's Sen. Todd Young, a chief driver of what would become this year's CHIPS and Science Act, or Sen.-elect J.D. Vance, who ran his whole campaign as a sort of pilot project for tech-minded, statist Republican politics, to stake out new territory at the cutting edge of conservative think-tank world.

Wells King is the research director at American Compass, one of said think tanks, and a former policy advisor to Sen. Mike Lee (R-Utah). He wrote this week in a paper and adapted essay about what he calls "Silicon Valley's Public Garages," or the early computer-era tech innovators whose subsidized roots are now largely forgotten. I spoke with him this morning about why these conversations are happening now, what the future might hold beyond chip manufacturing, and where Republicans might find political support for a more hands-on industrial policy. A version of the conversation — condensed and edited for clarity — follows:

Why highlight this part of Silicon Valley's history now, in this particular moment?

At American Compass we're principally concerned with the blind faith in free markets that's existed on the right for decades, that not only obscures our thinking about the nation's economic challenges, but also has proved counterproductive for this moment in time when we're seeing stagnating growth, slowing innovation, and offshoring.

The slogan-filled non-arguments about "permissionless innovation" being the source of American power and of Silicon Valley's greatness are just fundamentally false, and this was one way to address that.

The CHIPS and Science Act, which 17 Republican senators voted for, was a huge moment for your wing of the party. What grade would you give the final bill, and what would you change about it?

We supported the Chips plus Science Act, and we thought it was an imperfect but necessary bill. If you want to produce chips domestically, you have to subsidize it. That's the lesson of every country that has a chip industry: If you want to fabricate chips domestically, you have to subsidize the foundries and protect that industry. So to the extent that the bill did that, I give it an A.

But the Act was also concerned with spurring American innovation and trying to get ahead of China, and on that front, I would give it probably a C. It was not the USICA bill that the Senate had passed months prior, which I thought was also imperfect but a much better approach, creating regional centers of innovation and putting really strong anti-China guardrails in place.

This is a policy area where there's lots of room for bipartisan agreement. What do you disagree with not laissez-faire Republicans, but with Democrats about?

One is the ultimate mission. We don't want to bring about a green energy revolution, and we don't think that should be the focus of industrial policy. Now, to the extent that we're building electric vehicle batteries and electric vehicles in the United States, I think that's very important — we're ultimately concerned with the power and prosperity of the United States, and confronting communist China, which is going to be a generation-defining challenge for the United States.

The second is that we all are well aware of the occasional follies of state intervention, and we acknowledge that there are often unintended consequences. We're conservatives at the end of the day, so we don't just want to take an all-of-the-above, reckless approach. That said, we understand the state plays a critical, essential role in channeling investment and ensuring that markets work for the American people.

What do you see as the potential political avenues by which to build support for this project?

The outcome of the midterm elections is forcing a self-reckoning within the Republican Party, not only with political operatives, but also with the donor class. I think they're realizing that running without a substantive, positive policy agenda just isn't going to work, and that you can't merely be the party of "no" in 2022, you actually have to offer a positive and constructive vision.

I think there are a lot of legacy donors and institutions that are beholden to the 1980s Reaganite playbook, and who don't know what time it is. But I think that the result earlier this month in the midterm elections is a wake-up call for them, and we will start to see a lot more movement and enthusiasm and interest in a distinctively conservative approach to the issues we're talking about.

What do you think brings certain Republicans to this project to veer away from Reagan-era economic orthodoxy?

We draw from two different blocs from the old three-legged stool of the Reaganite GOP. You have the national security hawks, who are very concerned with China's rise. Don't forget that someone like Sen. Tom Cotton was very involved in USICA, at least in the early stages.

The second group are social conservatives who are deeply concerned with family strength and community vitality. I think they look at the economy today and they say, wow, the economic preconditions for the type of America that I want to preserve no longer exist in many parts of the country, and maybe I have to rethink my economic playbook. That's not every social conservative, but there are a whole lot of them, and I've been consistently surprised.

There will still be room for the free-marketeers within our coalition on certain issues, but they aren't going to be in the driver's seat. It's time that we start to place our concerns around national security, and our concerns around family and community vitality front and center in our economic debates.

 

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5G is powering America's fastest growing home broadband service, bringing competition to cable and fast, reliable, affordable home and business internet to millions of Americans. The wireless industry needs a pipeline of exclusive-use, licensed spectrum to expand wireless broadband service, bridge the digital divide and bring real competition and choice to more Americans. Learn more at www.ctia.org.

 
Party foul

If you threw a party, and invited everyone you knew

And "you" were the European Commission… and the "party" was in the metaverse… you might have bigger problems than trying to shoehorn a joke about virtual reality into the meter of the "Golden Girls" theme song. As POLITICO's Tristan Fiedler reported for Pro subscribers this morning, the European Commission's foreign aid department did throw such a party, to educate young Europeans on the benefits the EU offers to its citizens.

And five people came. No, not 500, or even 50. Five. "I'm here at the "gala" concert in the EU foreign aid dept's €387k metaverse (designed to attract non politically engaged 18-35 year olds," tweeted Devex's Vince Chadwick. "After initial bemused chats with the roughly five other humans who showed up, I am alone."

The event might have been a failure, sure. But it also reflects how proactive the EU is being on metaverse policy, just as it's outpaced the US in other tech regulation: As Europe's Morning Tech newsletter reported earlier this month , European courts will soon decide whether or not the metaverse falls under the Union's new Digital Services Act. — Derek Robertson

 

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ai-ming higher

Also on the European front: The Mozilla Foundation hosted a virtual panel yesterday to wrestle with, well, the EU's wrestling with how to treat "general-purpose" AI models like OpenAI's DALL-E and GPT-3 under its impending AI Act.

The panel — featuring Green Party European Parliament member Kim van Sparrentak, of the left-wing Dutch GroenLinks party, Irene Solaiman, policy director at AI company Hugging Face, and Mozilla senior policy researcher Maximilian Gahntz — talked about their major concerns that the Act as currently constituted might not sufficiently fight human bias, as Solaiman noted, or that it might tilt the playing field too far in the direction of tech giants, as Gahntz has previously argued to DFD.

They also offered a wish list for AI legislation, with each panelist offering as their biggest hope:

  • Van Sparrentak emphasized her focus on getting a fundamental rights impact assessment mechanism into the bill (while wryly noting it might not be smart to narrow her list down to one amid ongoing legislative negotiations).
  • Gahntz offered the need for transparency measures to be built into the bill, along with clear "future-proofing" means of redress for those harmed by AI tools.
  • Solaiman wished for more investment in infrastructure that might assist smaller companies in their AI work, especially with regard to social impact. — Derek Robertson
 

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the future in 5 links

Stay in touch with the whole team: Ben Schreckinger ( bschreckinger@politico.com ); Derek Robertson ( drobertson@politico.com ); Steve Heuser ( sheuser@politico.com ); and Benton Ives ( bives@politico.com ). Follow us @DigitalFuture on Twitter.

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