Join Lux Riskgaming in NYC this month
We’re hosting the third and final runthroughs in NYC for our debut Lux Riskgaming Initiative scenario, “Hampton at the Cross-Roads.” All of these runthroughs will be hosted at Lux’s NYC offices in the Flatiron District. If you’re interested in joining, fill out the short Google Form linked below to sign up for slots and I will confirm attendance by email. We’ve had more than 100 people stop by to beta test in the past two months, and we’d love to have you join us!
Feel free to reply to this newsletter if you have any questions.
The frozen actions of systems under fire
Human inertia in the face of extreme systemic change is a most vexing phenomenon. It’s often analogized to the “deer in headlights,” where the proverbial ruminant freezes in terror as bright strobes come racing for its life. That’s visually apt but faulty: we debate how to handle systemic change endlessly, exhaustingly, and in the end, only galvanize ourselves for action when all other paths have been excluded.
Take last week’s “Securities” podcast interview with retired lieutenant general Jack Shanahan. Shanahan stood up the Defense Department’s Joint Artificial Intelligence Center (JAIC pronounced “Jake”) as its inaugural director, and almost immediately walked into a maelstrom while working with Google on Project Maven, a program to connect Google’s engineering expertise into the Pentagon’s defense systems. Concerns flared over whether software engineers were plotting the deaths of civilians around the world from remote-controlled drone strikes optimized with machine learning. Google’s participation in Maven ended by mid-2018.
Fast forward five years, and one now sees broad agreement that autonomous drones are crucial in the asymmetric warfare between resource-strapped Ukraine and militant Russia. Drone strikes have become frequent on the battlefront as well as behind the lines, and Ukrainians (among others) can’t seem to get enough of Turkey’s Bayraktar TB2 UAV and other affordable and highly-effective drones. Even Google is back at the autonomous defense table, engaging with the Pentagon as if the Maven saga never happened.
The sudden demand for drones belies years of discussions around autonomous weapons and machine intelligent battlefields. I wrote a review of Paul Scharre’s book Army of None: Autonomous Weapons and the Future of War back in 2018 for TechCrunch, and the thinking around autonomous warfare and defense go back at least a decade earlier (and really decades if one includes science and speculative fiction). Scharre updated his thesis for his new book Four Battlefields: Power in the Age of Artificial Intelligence this year, which he discussed at the Lux AI Summit in May. Despite the acceleration of these technologies though, the core thesis behind them remains the same. The question is whether the Pentagon can adapt toward the impending future.
This week, Lux portfolio company Anduril announced the acquisition of Blue Force, a company developing autonomous fighter jets. Per the TechCrunch article by Aria Alamalhodaei:
The new acquisition positions Anduril to take advantage of what chief strategy officer Christian Brose called “the most important space with regard to autonomous aircraft.”
Autonomous fighter jets have “the attributes that you’re going to need to be relevant to what everybody is focused on right now: the pacing threat of China, competition in the Indo-Pacific theater,” he said.
We all know that autonomous fighter jets are coming. Their benefits are legion, and while the potential downsides are real — hacking and bugs causing irreparable harm — the reality in an internationally competitive environment is that they are going to come sooner rather than later. An arms race is an arms race, after all.
The Air Force’s cultural obsession with the best and newest technology will hopefully (and ironically) keep it grounded to the future, even as it can’t quite let go of the pilot-in-the-cockpit model. The Navy, on the other hand, seems to live in a fantasy land.
Over the last few months as I was researching our riskgaming scenario “Hampton at the Cross-Roads,” I kept returning to inertia. Why are we so unprepared for climate change at the Navy’s littoral facilities that are among the most vulnerable to rising sea levels in the world? Why are we not prepared for so-called carrier killers that China and other countries are developing? Why haven’t we rapidly migrated to a hybrid human-machine naval fleet that encompasses the best autonomous technologies that America has to offer (for instance, Lux’s very own Saildrone)?
The answer is human inertia. Patterns. Habits. Doing the same thing rather than fighting to change the process. Defaults. Avoiding relearning how something is done even though how it used to be done no longer suffices. Taking the path most taken. Playing it safe. Putting one’s head down lest it get chopped off.
The latest reporting highlighting the subject comes from The New York Times this week, where Eric Lipton writes on many of the themes from our riskgaming initiative in “Faced With Evolving Threats, U.S. Navy Struggles to Change.” He gets at some of the powerful domestic constituencies that prevent the Navy from adapting to the future it knows is coming:
The Navy’s top brass talks frequently about the need to innovate to address the threat presented by China. The Defense Department’s own war games show that the Navy’s big-ship platforms are increasingly vulnerable to attack.
But the Navy, analysts and current and former officials say, remains lashed to political and economic forces that have produced jobs-driven procurement policies that yield powerful but cumbersome warships that may not be ideally suited for the mission it is facing.
In short, major shipyards and their workforces in states like Virginia and Mississippi drive Pentagon procurement policies through electoral influence.
Autonomous technologies are a classic case of Clayton Christensen disruption theory: new ships are significantly cheaper and faster to build, but often can’t match the extensive capabilities of a fully-manned ship. They certainly don’t require the extensive workforces that keep America’s shipbuilders in business. So officials keep their hold on the past while ignoring the future.
There are exceptions, even within the Navy. The Fifth Fleet based in Bahrain sees things differently:
The Navy had already contracted with traditional suppliers like Boeing and L3Harris to develop unmanned vessels with names like Orca, Snakehead and Sea Hunter. But several of those projects were already years behind schedule and tremendously over budget — or had such severe problems they were quietly canceled.
The team in Bahrain took a very different approach, turning to smaller, more entrepreneurial companies and sidestepping the bureaucracy that slows and complicates big weapons programs. It found partners in companies like Saildrone, Anduril, Shield AI and Martac, which had never built a major Navy ship.
As I described a year ago in “Laborious Iranians,” Saildrone has been piloting a fleet of unmanned, long-endurance ships for intelligence collection in the Persian Gulf in spite of persistent Iranian threats. These vessels are ridiculously cheap and expendable for the U.S. Navy compared to its traditional reconnaissance assets, affording officers more operational flexibility while vastly saving capital and maintenance costs.
But, as Lipton continues:
Capt. Alex Campbell of the Navy, whose job this year has been to find ways to buy cheaper, faster, more innovative technology, said the amount of money that had been allocated to the effort so far was minuscule.
“It’s the dust particle on the pocket lint of the budget,” he said.
First, Alex Campbell wins the line of the week for quotable quotes.
More seriously, the power of human inertia, or more sympathetically, bureaucratic inertia, really beguiles. We all know that cheap, autonomous ships will form the backbone of the Navy’s intelligence and surveillance efforts this decade. There is no one who thinks otherwise — not flag officers, not congressmen, not think tankers, certainly not anti-war activists. The military loves the concept of the “common operating picture” and this is a rare moment when there is broad consensus on where technology is going. That common operating picture has a penchant for blurring and distending during appropriations, however. In front of Congress, we all have to pretend that the human-operated fleet will exclusively remain the mainstay, against all evidence to the contrary.
So as usual, crisis will be the salve. The Navy has to lose ships — and the sailors operating them — before Congress and Pentagon leaders will feel the pressure to take decisive action. We see the future, understand it, comprehend its implications and what must be done next. It’s not a bet, it’s not a stochastic future. It’s reality, and it’s already here. That’s why the “deer in headlines” is such an inappropriate metaphor. We haven’t lost our cognitive function with rapid change approaching us — we only lose our stamina and audacity to confront change on our own terms.
I’ve focused on the defense world, but extreme systemic change is all around us. Organizations are fighting over return-to-office policies, despite ample evidence from the pandemic that with the right tools, most office personnel can effectively work remotely. Climate change is eviscerating human infrastructure, but spending on resilience is paltry compared to the challenge in front of us. Then there’s America’s supply chains and redundancy. I don’t need to explain to the “Securities” audience why it’s good to be able to make things at home rather than import everything from abroad.
I wish I could say that this is cynicism or nihilism, but inertia is a far worse theory, a theory of disengagement and absence. It’s about being frozen in amber even in the embers of the ferocious wildfires of change. Nihilism — trust me — requires a commitment, in the same way that atheism requires a purposeful commitment to oppose higher beings. You have to try, and you have to mean it. Inertia is about doing even less than that.
Maybe that deer, blinded in the headlights, understands something I don’t. Maybe it accepts death and the terminal fate of the roadway. Maybe it doesn’t even oppose its own demise. It accepts that the end is near, and that the end is better than action. For change is hard, and the abyss is so simply dark.
“Securities” Video: The Unseen Forces Shaping America's Labor Market
We are continuing our video adaptations of previous “Securities” columns, this time on “Striking Employment” from July. I discuss labor unrest in the context of two classic economics papers, Sherwin Rosen’s 1981 paper on superstar labor markets as well as William Baumol’s 1967 theory of cost disease.
Even though two months have passed, the Writer’s Guild of America and SAG-AFTRA continue to strike as the United Auto Workers leadership is about to overthrow the status quo among Detroit automakers. The unrest simmering in our labor markets remains abundant, and the underlying factors are as present as ever.
- If you are looking for a great piece on science and technology connecting into society, Harper’s has a great piece with Krithika Varagur’s meditation on the meaning of dating, marriage and life in the context of sickle-cell anemia in “Love in the Time of Sickle Cell Disease.” “The age of relatively cheap genetic testing has created a new term for those in Nkechi and Subomi’s situation: 'genetically at risk.' 'Genetic risk does not imply resignation in the face of an implacable biological destiny,’ wrote the sociologists Carlos Novas and Nikolas Rose in 2000; ‘it induces new and active relations to oneself and one’s future.’ Such thought also ‘reshapes prudence and obligation,’ because those who are genetically at risk must make the right choices, both for their own sakes and for those of their families.”
- Our scientist-in-residence Sam Arbesman recommends an interesting note about the capabilities of the James Webb Space Telescope (which we talked about last year in “Scientific Sublime”) and how it would be possible for it to identify life on an exoplanet based on observations of Earth. "The goal was to determine if enough data could still be captured to identify atmospheric models, even when the observations are faint and noisy. Sure enough, the signal-to-noise ratio was strong enough to identify many of the molecules for an Earth-like exoplanet within 50 light-years of Earth.”
- I enjoy reading Gérard Araud, the former French ambassador to the United States. In an op-ed in The Telgraph, he writes about Europe’s present challenges. “When travelling in America, everywhere I went I met European researchers, surgeons, teachers and entrepreneurs. It was difficult not to feel sadness that these young people, who our countries had educated at a high cost, were instead enriching the US. But their explanation was always the same: better financing, more opportunities, less regulation. Unfortunately, ageing countries have less money and tend to love regulations.”
- I’m a long-time connoisseur of the sociology of quantification, the study of how numbers and metrics come to be and the political forces behind them. The Financial Times had a great example of the subject on “How the UK’s radical data revisions shattered its economic narrative.” “The bigger revisions come in 2021, where [the **office for national statistics**] has looked in more detail at each sector’s inputs and outputs rather than simply looking at turnover, which guides the initial statistical release. This is why some industrial sectors such as steelmaking perform so much worse in the new data. The ONS found that far more of the added value from producing iron, for example, was coming from the energy the sector used and there was much less additional value generated by turning it into metal.”
- Finally, a personal note. I worked as a managing editor at Yahoo-owned TechCrunch for four years before joining Lux, working with a sterling team of reporters and editors constantly surviving and thriving in the always … let’s call it interesting … world of media. Last week, it was announced that editor-in-chief Matthew Panzarino was stepping down after ten years along with general manager Joey Hinson. TC’s Silicon Valley Editor and the publisher of StrictlyVC Connie Loizos are replacing both in a major shakeup. TechCrunch has long been a survivor in an industry that has seen publication after publication devoted to tech displaced. I still have extensive friends at TC, and wish them and Connie godspeed in their next stage of success.
That’s it, folks. Have questions, comments, or ideas? This newsletter is sent from my email, so you can just click reply.