Book Reviews 83

Book Reviews
Book: How Nations Succeed: Manufacturing, Trade, Industrial
Policy, and Economic Development
Author: Murat A. Yülek
Publisher: United Kingdom, Palgrave Macmillan: 2018, 284.

N ews bulletins in 2018 have been occupied by the forty-fifth

President of the United States’ (POTUS’) contempt for free trade
agreements and imposition of tariffs on both foes and allies. The
pretexts range from national security to de-industrialization and loss of
jobs for American workers, undoubtedly placing the global economy
premised on the liberal tenets of free market and trade in jeopardy. With
the rise of Chinese economic juggernaut, skeptics have regularly criticized
its predatory practices and raised the fears of its susceptibility to get
caught in the middle-income trap. Automation adds to the quandary. In
this milieu, Murat A. Yulek’s book ‘How Nations Succeed’ traces the
developmental trajectory of select countries, placing manufacturing and
industrial policy at the core of a nation’s prosperity. Director of the Center
for Industrial Policy and Development at the Istanbul Commerce
University, Professor Yulek has an extensive teaching career at renowned
institutions such as Georgetown and Yale and advisory experience with
international organizations including the International Monetary Fund,
World Bank, and the Islamic Development Bank. His proficiency in the
subject is thus, self-evident.
The first part of the book deals with the evolution of industrial
societies which was indeed no marvel but rather a result of carefully
calibrated schemes to support manufacturing over long periods of time.
Perhaps the most riveting section, it speaks volumes about the pillage and
bloodshed by European colonial powers. Beginning in the fifteenth century
in the name of Christ and the quest for lands and valuables, colonization
heralded a new world order and shifted the balance of power from the
east to the west and from Mediterranean Europe to the rim of the
continent. Fulcrum of civilization and riches in the past, the territories
adjoining the Silk and Spice routes became a specter of subjugation and
the grisliest of human and economic exploitation. Same holds true for the
Americas where indigenous people were almost wiped out with utmost
hauteur. Slave trade flourished. Symbols of grandeur were made out of
precious metals extracted from colonies which also provided raw
materials to run factories in the motherland and markets for their finished
goods. Moreover, industrial manufacturing was outlawed in the colonies.
At the zenith of imperial power, weaker countries were forced to open up
to superior European products, virtually handing walking papers to local
businesses. At times, these unequal ‘free trade’ agreements were agreed to
84 Journal of Contemporary Studies, Vol. VII, No.2, Winter 2018

by the weaker nations while looking down the barrel of a gun; those eons
are still decried as periods of humiliation by affected nations.
Colonization granted the hegemonic powers mastery over the
trade routes and generated enormous wealth for them. While it facilitated
industrialization in some countries, it did not do so in others. As the study
explains, countries that successfully industrialized did so at the back of
policies extended over centuries to support the manufacturing sector.
Manufacturing not only creates jobs but enhances productivity in other
sectors too through linkages, creating an overall positive impact on the
society. It enables developing economies to graduate from the category of
low-income countries to the cadres of developed countries and abridge
disparities between nations. Mechanization does not simply entail the
operation of factories but is an intricate process of capacity-building by
experience and acquisition of technology. This process is steered by state
and private finances, skilled labor and innovative attitudes to foster
economic growth over long periods of time. It is complemented by trade
policies focused on maximum exports of competitive value-added
products and only necessary imports to maintain a healthy current
account. Trade surplus generates prosperity whereas large deficits retard
economic growth and employment.
Yulek goes on to emphasize the centrality of succinct state policies
and efficient industrial layer to the progress of a country. This layer
comprises of finance, firms, entrepreneurs, managers and labor. The
appropriateness of policy to the stage of industrialization is crucial. During
the first two stages which involve the import and better utilization of
machinery, a general strategy would suffice to increase the firms’ and the
country’s productivity. Moving on from technology adaption, stage three
and four consist of replication of existing and generation of new scientific
knowledge and equipment. Most countries fall into the low or middle
income trap due to their failure to move past stage two or three. At this
stage, focused policies are necessary to target select sectors that can
engender more value to the economy, have additional backward linkages
and greater potential for research and learning. The book lays out several
examples of countries providing direct and indirect incentives to chosen
winner enterprises that assist them to climb up the industrial ladder. The
United Kingdom, Germany, Japan, South Korea and other industrially
advanced states have successfully employed these policies at different
stages of their development.
Dr. Murat Yulek’s book ‘How Nations Succeed’ touches important
themes such as protectionism, technology transfer and the national
security implications of economic policies. As such, it is very informative
and relatable to contemporary international events. A conversely
captioned book ‘Why Nations Fail’ similarly regards national policies
critical to the industrial development of a country. Unlike Murat, Acemoglu
and Robinson place inclusive political and economic institutions and not
Book Reviews 85

manufacturing at the heart of economic prosperity. As such, it is guided by

democratic practices and rule of law. Besides, the itinerary of
industrialization runs through state patronage, mercantilism and at times,
theft of technology. All of this sits at odds with the liberal fundamentals of
market-driven economy, free trade and intellectual property rights
presently in vogue, depicting a palpable paradox in discourse and deeds.
Furthermore, it is very trying to define success in our times.
Industrialization has undoubtedly benefited mankind immensely but the
environmental impact of the process has been catastrophic and ironically,
poorer, less developed countries have to bear most of the brunt of it. With
no tangible concerted efforts to contain rising temperatures of the planet,
upheaval and displacement is certain, if not the scale of it. At the same
time, advances in artificial intelligence threaten the relevance of human
beings and nuclear weapons hang like Damocles’ sword on the continued
existence of Homo sapiens. One may then, not be able to determine success
by the measure of industrialization.

Reviewed by Ms. Saria Benazir, M. Phil scholar, Department of IR, NDU,

Islamabad.
86 Journal of Contemporary Studies, Vol. VII, No.2, Winter 2018

Book: AI Superpowers: China, Silicon Valley, and the New

World Order
Author: Kai-Fu Lee
Publisher: New York: Houghton Mifflin Harcourt, 2018. 272.

W e live in the most exciting times in world’s recorded history and

yet they are, by their very essence, the most frightening times
too. The onslaught of technological advancement that makes life
so enjoyable also uncovers new risks to the human civilization that
hitherto have been confined to the realm of science fiction. One such
opportunity that can easily transform into a man’s worst nightmare is the
rise of Artificial Intelligence (AI). The discussion in the academic circles
mostly revolves around the existential nature of the opportunities and
challenges presented by AI. However, the discourse among policy circles is
largely centered on each nation’s competitive advantage in the field.
The slim volume under discussion penned by Taiwanese-American
venture capitalist, ex-Google China chief and AI expert Kai-Fu Lee seeks to
do justice to both aspects. Looking at the rapid competition between China
and the US Silicon Valley, and overall economic scope of the technology,
the author purports that the nation leading in this field will also take a lead
in the emerging world order shaped by the AI. He weighs both economic
and cultural aspects of Chinese and American societies and through a
nuanced look at various dimensions of the technology, attempts to predict
which country will lead in a given dimension. Written in a very accessible
manner, the author simultaneously focuses on the evolution of the
technology, what makes it evolve, and its future impact on human society.
He also attempts to suggest possible ways in which AI and human society
can co-exist in a mutually beneficial way.
The book is divided into nine chapters, all of which have intriguing
titles: China’s Sputnik Moment; Copycats in the Coliseum; China’s
Alternate Internet Universe; A Tale of Two Countries; The Four Waves of
AI; Utopia, Dystopia and the Real AI Crisis; The Wisdom of Cancer; A
Blueprint for Human Coexistence with AI; and Our Global AI Story.
Together these chapters narrate a breathtaking tale of AI evolution and
competition with a personal touch.
The author believes that AI as a technology has seen quite a few
cycles of ebb and flow since scientists started working on it in 1950s.
When the technology was first conceived, two approaches were devised to
teach computers to think. One method called the rule-based approach
offered basic definitions to the technology to process data. For instance, in
order to make it identify a living creature, its characteristics were defined
and then the technology was expected to recognize the creature based on
those characteristics. This needed a lot of time and energy. The other
approach, and ostensibly the better one, was through what is now known
as the neural networks. In this approach the computer network is
Book Reviews 87

organized in a neural pattern and offered more and more data and through
a trial and error method it learns to think. And it is obvious here that the
more data it has access to, the more it can learn from it.
Now, to the competition between the US and China, this is where
the author’s understanding of the Chinese culture and economy helps us
comprehend the country’s strides in the field. At the beginning of the book
the author identifies what he calls China’s Sputnik moment. Like Sputnik
propelled America into a race to put a man on the moon, a widely televised
Go competition between Lee Sedol, the world Go champion, and Alpha-Go,
an AI programme, in 2016 was viewed by 260 million Chinese viewers. In
this 2500 years old board game, with virtually infinite positions, the AI
managed to beat the human champion. This was China’s sputnik moment
in AI, and the government immediately started encouraging interest the
field.
Here, another very important nuance is also highlighted. The
author distinguishes between what he calls the light touch and the heavy
touch approaches. The US and the Silicon Valley approach technology with
a light touch. An example is ride-sharing technology called Uber, which
only engages drivers and cars, not gas stations or workshops to ensure
smooth service. The Chinese version of the service is called Didi which also
owns gas stations and workshops. Since the Chinese approach is the heavy
touch, it generates more data which is more useful for the computer
learning.
Lee then identifies four waves or categories of AI. He calls them
internet AI, business AI, perception AI and autonomous AI. The internet AI
is visible in the shape of software like YouTube, offering suggestions
extrapolated through complex algorithms based on your consumption
data; this is where China has competitive advantage because it generates
more data. However, business AI, where sound profit making advice and
decisions are generated, sees the US leading due to the meticulous long-
term record keeping practices. In perception AI characterized by facial
recognition technology China again has more advantage, that too in sheer
numbers, as the US customers are inherently wary of technologies spying
on them. In autonomous AI where AI meets robotics, the US for now has
advantage because of the heavy investment in drones and autonomous
cars. This can of course change as China also is investing heavily.
Looking at the future of AI-human interaction, the author
recognizes two schools of thought, the dystopian and the utopian schools.
The dystopian outlook sees AI jeopardizing human life while the utopian
worldview sees it as a universal remedy. Since a wide range of
assessments on the impact of AI exist, ranging from minimal impact to
almost total displacement, the author does not make it a big deal. He calls
himself a techno-optimist and frankly admits that his view is colored by
his recent cancer experience. He believes that while high profit making
jobs can be taken by AI, jobs on the lower spectrum can be offered to
88 Journal of Contemporary Studies, Vol. VII, No.2, Winter 2018

humans after enhancing the pay scale. This however seems a view borne
out of his self-confessed optimism and bout with his medical condition.
In conclusion it is a book worthy of the readers’ time and while it
does not debate more pressing ethical and existential issues in greater
detail, it brings in a unique perspective that is a feast for a thinking mind.

Reviewed by Mr. Farrukh Khan Pitafi, M. Phil scholar, Department of

IR, NDU, Islamabad.