Fracturing the Internet

The battle between the United States government and Huawei is a battle between the United States and China for control over the development and direction of wireless technologies. The Internet may not be forever, political moves in the game between the United States and China guarantee that the Internet will mutate in coming years as a result of this infrastructure conflict and future conflicts at every control point.
In telecommunications technology there are five major players of note, Ericsson, Nokia Networks, Huawei, ZTE and Qualcomm. Respectively, these companies are proxies for the economic ambitions of Europe, China and the United States. Holding a key position above the others the United States, represented by Qualcomm, provides intellectual property which underpins all the other offerings. This has worked out well for Europe which though jealous of Silicon Valley's success has always embraced its innovations, but China chafes under the influence Qualcomm's intellectual property provides the United States as it allows the US to dictate terms. Making Qualcomm irrelevant is a Chinese strategic objective.
In 2018 the United States, having discovered that China's ZTE had shipped products to Iran and North Korea containing Qualcomm technology, banned all US technology exports to ZTE with the result that ZTE faced ruin. At the time China was refusing to sign off on Qualcomm's $39 billion acquisition of European semiconductor provider NXP, the ZTE ban had the upside of being a potential lever to get the deal moving again. When the US lifted the ban on exports to ZTE it was expected that China would reciprocate by allowing the NXP acquisition to take place. China did not reciprocate forcing Qualcomm to scrap its acquisition plans, much to the consternation of the United States government.
With the extradition of Huawei's CFO from Canada to the United States in process, again for shipping products to Iran and North Korea containing Qualcomm technology but also for hiding the money trail, we see the political game escalate but might ask the question should the United States be allowed to decide who gets 5G wireless? China appears to be asking that question, a lot, and if it develops its own answer to Qualcomm what might happen to standards?
The Internet was a US phenomenon that spanned the world, everyone got in line behind technology decisions made in the United States but would the United States and its Western allies get behind technology decisions made in China? If they would not could we see the beginning of a fracture in infrastructure which will lead to a split in the Internet? A United States led alliance facing off against a Chinese led alliance, the primaries of both engaged in battles for control over all layers of infrastructure and at every software control point.
Qualcomm is now considered to be such a strategic part of long-term United States objectives that the Department of Defence has begun intervening in domestic investigations of Qualcomm's business practices. Likewise China's commitment to Huawei is clear. Two sides have chosen their champions, as per usual Europe has no plan to put the wood behind one arrow but soon enough it would not be surprising to see an Ericsson – Nokia Networks merger slide on through the European Commission without an eyebrow raised by the Commissioner for competition. Stability is something the EU always prefers.
After decades of use it would be a mistake to assume the Internet is stable because it is successful. The fact it is so successful makes it of interest to those looking to further their own political, economic and social goals. If those goals require that the Internet be split into incompatible pieces you should assume governments are working towards that relentlessly.

Why is Venezuela starving?

The idea that a developed nation like Venezuela can be undergoing a famine is bizarre. There has been no natural disaster which has interrupted Venezuela’s food supply. There has not been a sudden and unexpected failure of crops and yet people starve.

If the food supply was not damaged is it the case that Venezuela has no money? Venezuela is a petro-nation with close to 300 billion barrels of crude oil reserves and oil sands as large as those present in Canada. Those Venezuelan oil sands are of a higher quality than those in Canada allowing for easier extraction and greater oil yield for the effort expended. Money can be felt between your toes if you walk bare foot on the coast but the Venezuelans are still starving.

While Venezuela has money locked away under its feet and across its shorelines the economic circumstances of its people changed suddenly. Venezuela had wealth but was never a wealthy country as it lacked indigenous industry. Hugo Chavez spent oil revenue heavily at a time oil prices were high and when the price of oil fell that spending became quickly became unsustainable.

The connection between wages and what a wage could buy became uncoupled when inflation rose to 800% due to the inept economic decisions made by its leaders. Venezula Prices spiked rapidly while wages did not, people looked at where they should spend their money and decided they could do without things, pushing the people selling or making those things into poverty as their customers dried up.

When you beggar the nation to the extent it cannot afford to eat there are two knee jerk reactions both of which are disastrous. On one hand you can assume the market will sort itself out if given enough time. In a functioning system when you go to the shops there is bread on the shelves and how it got there is an example of the beauty of decentralised decision making. No bread authority sets the pricing from wheat to store shelf nor decides how many and what type of loafs are delivered.

While bread still gets made and delivered to places people can buy it it should be remembered that the market operates on the principal that you sell to those who can afford it. If a nation is crushed by inflation resulting from bad government policy you can expect the market to look to sell its product elsewhere. The market is not benevolent.

State intervention is the other option and the one the Venezuelan government chose as it fit with the political ideology of the leadership. With prices of products soaring famers and food producers were instructed to sell their produce to the state at a set price. This financially wiped out many farmers and detrimentally affected their motivation to go back to the hard work of farming when the state could decide their effort was worth a flat fee regardless of the quality of their produce.

In Poverty and Famines Amartya Sen casts modern famine as an economic disaster rather than a food availability disaster, Venezuela is an economic disaster which has priced food beyond the reach of its citizens and created ongoing shortages by demotivating farmers. The solution to future Venezuelan starvation is not in taking from farmers, or nationalising whatever the state takes an interest, but in creating an open democracy with a free press. It is the ideologues of the Venezuelan government that created the conditions for rampant inflation thereby spiking prices as it pushed people in discretionary spending jobs into poverty.

A starving Venezuela is a product of ideology over concern for citizens and where a free press would have highlighted signs of impending disaster over the past two decades press freedoms in Venezuela have eroded as self-censorship has increased. Venezuela is not a democracy its elections have been declared shams by observers and pro-government thugs routinely attack those they see as in the way of fulfilling the dreams of the now dead Hugo Chavez. So long as Venezula is an anti-democratic state which promotes the ideology of its rulers over the needs of its people starvation will continue and food shortages will re-occur.           

Food shortages can happen but they are not as frequent as in previous centuries as the application of mechanisation by even the smallest farmers across Asia and Africa has increased the global food supply overall. With the developed nations in the west having less children in the next 30 years we will have a global population decline while automation makes food production even more efficient. The world already has food in abundance, Venezualan’s cannot afford to access it due to the ineptitude of their rulers.

Moving away from Venezuela the horrifying situation in Puerto Rico shows you what happens when a natural disaster does occur. One thing I took note of was the collapse of the communications infrastructure. It does not matter if you have Bitcoin, Apple Pay or an ATM card unless you have folding cash in your pocket you currently have nothing to buy anything with.

A cashless society depends on the ability to communicate and authorise your transactions, you might want keep some bills under the mattress just in case a disaster takes out your channels of communication.