Over the past several decades, the West—especially the United States—has drifted into what anthropologist David Graeber termed a “big idea famine,” marked by a decline in transformative innovation despite abundant capital and talent. Military and strategic technological progress has slowed as ethical hesitation, bureaucratic inertia, and weak prioritization constrain experimentation, while the civilian tech sector has largely redirected entrepreneurial energy toward convenience-driven, low-impact services. The dot-com boom and subsequent startup culture, though lavishly funded, disproportionately rewarded derivative platforms for consumption and lifestyle optimization rather than breakthroughs in production, infrastructure, or hard science.
As Nathan Simington argues in “China Is Winning. Now What?”, this stagnation is reinforced by a structural bias in the U.S. political economy: a bifurcated workforce split between elite design, finance, and management roles and a vast, precarious service and gig economy. Productive, physical, and industrial labor is culturally devalued and financially marginalized, weakening the foundations of long-term innovation. Together, Graeber’s diagnosis and Simington’s analysis reveal how financialization, service-economy bias, and cultural preferences have narrowed the West’s technological ambition—helping explain why China has advanced rapidly in strategic and industrial domains while the United States struggles to generate and sustain new “big ideas.”
Financialization and the Asset-Light Illusion
In The Technological Republic: Hard Power, Soft Belief, and the Future of the West, Alexander C. Karp and Nicholas W. Zamiska diagnose a central weakness of contemporary Western capitalism: the dominance of financialization and the preference for “asset-light” economic models. Over recent decades, value creation in the United States has shifted away from building durable technological and industrial capacity toward optimizing balance sheets, extracting rents, and scaling intangible platforms. This transformation has rewarded short-term returns and capital efficiency while steadily hollowing out the material foundations—manufacturing depth, engineering ecosystems, and state-aligned research—on which strategic power ultimately rests.
The anxiety the authors describe regarding China is therefore not cultural or ideological, but starkly pragmatic. While the United States debates the ethical and political legitimacy of deploying AI in military and strategic contexts, China is already integrating such systems into state power. The problem, Karp and Zamiska argue, is not merely regulatory delay, but a deeper loss of conviction: a Western retreat from hard power enabled by decades of financialized thinking that treats technology as a tradable asset rather than a national capability to be built, defended, and sustained. In this environment, “asset-light” innovation appears efficient but proves strategically brittle, leaving democracies dependent on fragile supply chains and underdeveloped industrial bases.
The authors contend that the solution lies neither in containment nor in economic decoupling, but in rebuilding what they call a “technological republic.” This requires reversing the logic of financialization by reuniting engineering talent, state capacity, and national purpose around the deliberate construction of technological power. Only by escaping the asset-light trap—and restoring belief in the legitimacy of building, deploying, and governing hard technologies—can democratic societies ensure that the coming era of AI and advanced warfare is shaped by their values rather than ceded to authoritarian systems.
The Asset-Light Paradigm and the Financialization of Innovation
Since the 1980s, U.S. corporate strategy has increasingly been governed by financial metrics that privilege capital efficiency and shareholder returns over productive capacity. Under this regime, firms were encouraged to divest physical assets—factories, vertically integrated supply chains, and internal research laboratories—in favor of lean, flexible structures designed to maximize short-term valuation. Although this approach improved balance sheets and stock prices, it systematically discouraged long-horizon, capital-intensive innovation, precisely the kind required for advanced military systems, industrial renewal, and foundational technological progress.
As financialization deepened, the “asset-light” firm became an aspirational model rather than a situational strategy. The ideal enterprise was conceived as one unburdened by physical capital and capable of generating scalable profits from intangible assets alone. This logic redirected investment away from hard industries and toward software platforms, digital intermediaries, and lifestyle-oriented startups, where infrastructure costs were low and monetization was rapid. In the process, engineering depth and production capability were treated as liabilities rather than strategic advantages.
The consequences extended beyond corporate structure into the labor market. The U.S. workforce increasingly bifurcated between a narrow elite concentrated in finance, design, and management and a large base employed in low-wage service, retail, or gig work. Skilled, productive labor tied to physical systems and industrial processes was steadily devalued, contributing to a broader de-skilling of the economy. Financialization thus reshaped not only how firms create value, but what kinds of innovation the United States has been structurally willing—and able—to pursue.
The Erosion of Military Innovation: Ethical Debates and Deindustrialization
The erosion of the West’s military-industrial capabilities can be traced to a confluence of financial prioritization, cultural constraints, and strategic miscalculations. While the U.S. remains a leader in designing cutting-edge technologies—such as drones, advanced aircraft, and AI systems—the ability to produce and deploy these innovations at scale has significantly diminished. Decades of offshoring manufacturing and adopting asset-light policies have left the U.S. industrial base increasingly reliant on foreign suppliers, many of whom are in China. As a result, essential components like artillery shells, ships, and large-scale drones are difficult to produce quickly and efficiently, undermining military readiness.
Equally problematic are the ethical and regulatory debates that slow the deployment of these technologies. In contrast to China’s centralized, goal-driven approach to technological supremacy, the U.S. contends with a fragmented decision-making process in which ethical, legal, and public concerns often outweigh strategic necessity. The delay in adopting AI-driven warfare technologies, autonomous weapons, and advanced surveillance systems illustrates the friction between innovation and regulation. While these technologies could provide a decisive strategic advantage, the West’s hesitation to fully embrace them due to moral and legal concerns results in missed opportunities for military superiority.
This ethical paralysis is compounded by a broader strategic myopia in which defense production is often treated as a cost to be minimized, rather than as a vital national security asset. The emphasis on cost-cutting and financial efficiency has hindered investment in long-term, sustainable military production capabilities, leaving the West vulnerable to disruptions in supply chains and delays in scaling up critical technologies. The paradox is evident: the West excels in technological design and abstract innovation but struggles in transforming these advances into tangible, deployable military assets. As a result, its military readiness depends on fragile and increasingly unreliable supply chains, putting its strategic position at risk.
The Dot-Com and Startup Culture: Convenience Over Transformation
The dot-com boom of the 1990s and early 2000s played a pivotal role in shaping the modern startup culture, one driven primarily by venture capital and focused on low-capital, high-return models. This shift in priorities, however, favored convenience over transformative innovation. Startups flourished in sectors like food delivery, social media, and ride-hailing, where the emphasis was on enhancing daily convenience rather than building strategic industrial or technological capabilities. While these innovations revolutionized consumer lifestyles, they did little to address the deep-rooted needs of long-term industrial progress or national security.
The financial incentives of the era were misaligned with broader societal goals. Investors increasingly sought scalability and rapid exits rather than backing ventures that could deliver durable, high-impact breakthroughs. This mentality rewarded “asset-light” businesses that required minimal physical infrastructure and could grow rapidly, while ventures focused on hard industries like electric vehicles (EVs), robotics, advanced manufacturing, and battery technologies struggled to secure funding. As a result, the U.S. saw little investment in the types of foundational technologies that had historically propelled economic and strategic power.
David Graeber’s concept of a “big idea famine” captures the essence of this era. Despite massive capital inflows, the period between the 1990s and 2000s produced few innovations on par with the transformative breakthroughs of the mid-20th century—such as semiconductors, jet engines, or the Internet. Instead, capital flowed toward incremental, derivative products and consumer-oriented apps. Strategic innovation, particularly in sectors critical to national capability, was underfunded and undervalued, perpetuating a cycle where convenience-based ventures dominated and long-term industrial projects were neglected.
This trend also reinforced the growing bifurcation of the workforce. Elite engineers, designers, and entrepreneurs increasingly found themselves disconnected from productive, industrial labor, while millions of workers were relegated to gig, retail, or service roles. These jobs contributed little to the development of national infrastructure or the advancement of technological capabilities. The culture of convenience thus not only stifled transformative innovation but also deepened the divide between high-value design work and the critical industrial labor needed to sustain long-term growth and security.
Structural and Cultural Forces Behind the Innovation Slowdown
The slowdown in transformative innovation in the United States is not the result of a single policy failure, but of several intertwined structural and cultural forces that have reshaped corporate behavior and national priorities. Chief among these is an overriding obsession with capital efficiency and short-term returns. As shareholder value maximization became the dominant corporate doctrine—popularized and institutionalized by figures such as Jack Welch—long-term capacity building was treated as expendable. Investment horizons narrowed, and firms increasingly prioritized financial performance over sustained technological development, hollowing out the productive core of American business.
This financial logic reinforced a broader service-economy bias. Physical, productive labor tied to manufacturing, engineering, and industrial systems steadily lost social prestige and financial reward. As the economy tilted toward services, finance, and digital platforms, the skills and institutions required to build and maintain hard technologies weakened. Productive labor was no longer seen as a strategic national asset, but as a cost center to be minimized or outsourced, further eroding the foundations of industrial innovation.
Regulatory and cultural caution compounded these trends. Heightened ethical and legal scrutiny, particularly in areas such as artificial intelligence, biotechnology, and defense, slowed experimentation and deployment. While such scrutiny reflects legitimate democratic concerns, its cumulative effect was to diffuse responsibility and delay decisive action. In contrast to more centralized and goal-oriented systems, innovation in high-stakes domains became fragmented and risk-averse, favoring incremental progress over bold technological leaps.
Globalization and offshoring completed this structural transformation. Financial markets rewarded firms for relocating production abroad, accelerating the erosion of domestic manufacturing and contributing to the de-skilling of the workforce. Over time, fewer industrial teams remained capable of translating advanced designs into scalable, physical systems. Together, these forces produced an ecosystem in which transformative innovation is systematically underfunded: the United States excels at financial engineering and digital abstraction, yet struggles to sustain the physical and strategic capabilities that underpin long-term technological leadership.
State-Directed Industrial Power: China’s Strategic Contrast with the United States
A comparison with China underscores how sharply divergent institutional choices have shaped technological and industrial outcomes. As Simington notes, China has consistently prioritized hard assets over financial optics. Chinese firms invest heavily in factories, vertically integrated supply chains, and skilled industrial labor, treating production capacity itself as a source of strategic power. Rather than viewing physical assets as balance-sheet liabilities, China has built dense industrial ecosystems that enable speed, scale, and technical mastery.
This approach is reinforced by long-term, state-directed planning. Industrialization and technological development are framed not merely as commercial opportunities, but as matters of national security and geopolitical positioning. Government coordination aligns capital, talent, and infrastructure toward clearly defined objectives, allowing projects with long time horizons to proceed without being derailed by short-term profit pressures. In this system, industrial depth is cultivated deliberately, even when immediate financial returns are uncertain.
China’s technological focus further distinguishes its strategy. Rather than concentrating on consumer-facing applications or convenience-driven platforms, investment flows into physical and enabling technologies—robotics, electric vehicle batteries, industrial automation powered by AI, and advanced materials science. These sectors strengthen upstream capabilities and generate spillover effects across the broader economy, reinforcing industrial self-sufficiency and technological leverage.
Industrial policy discipline enables rapid prototyping and scaling, even in industries where labor costs alone cannot explain competitiveness. The automotive sector illustrates this dynamic clearly. By embracing the transition to electric vehicles, China bypassed entrenched internal combustion engine advantages held by Western firms and rapidly established dominance in lithium processing and battery technology. In contrast, U.S. automakers remain constrained by fragmented supply chains and slower adaptation in emerging strategic sectors. The comparison reveals not merely different economic models, but competing visions of how technological power is built, sustained, and deployed.
The Strategic Costs of the West’s Innovation Deficit
The systemic “big idea famine” confronting the United States and the broader West carries significant economic, strategic, and social consequences. Capital is increasingly drawn toward environments where long-term, productive investment is actively supported, including state-backed industrial sectors in China. As Western markets continue to reward short-term financial returns and asset-light models, they risk losing both capital and technological leadership to systems better structured to sustain large-scale innovation.
This shift exacerbates strategic vulnerability. Growing dependence on Chinese technologies and supply chains introduces national security risks, ranging from potential disruptions in critical materials to embedded technological dependencies that weaken autonomy in defense and infrastructure. What once appeared as efficient global integration now reveals itself as a source of fragility, particularly in high-stakes domains such as semiconductors, energy systems, and advanced manufacturing.
The societal consequences are equally severe. The erosion of productive jobs and industrial capacity has contributed to economic precarity, weakened family stability, and broader social malaise across much of the West. Communities that once relied on skilled manufacturing and engineering roles have seen opportunity drain away, replaced by insecure service employment that offers limited upward mobility or long-term security.
Taken together, these trends reinforce technological stagnation. Innovation increasingly manifests as incremental, derivative, and consumer-oriented, rather than as transformative advances with global or strategic significance. Without a reversal of these underlying dynamics, the West risks not only falling behind in critical technologies, but also losing the economic and social foundations necessary to sustain long-term national power.
A Hamiltonian Path to Industrial Renewal
In response to the erosion of industrial capacity and strategic innovation, Simington argues for a revival of a national industrial strategy modeled on the Hamiltonian tradition. This approach rejects the assumption that unfettered markets alone can sustain national power, instead recognizing that transformative technological capability requires deliberate coordination between the state, capital, and industry. At its core is a redirection of investment away from purely financial assets and low-impact startups toward the rebuilding of industrial capacity and productive infrastructure.
A central pillar of this strategy is the reshoring of critical production. Supply chains for essential goods and technologies—particularly in energy, advanced manufacturing, semiconductors, and defense—must be secured domestically to reduce strategic vulnerability. Reshoring is not merely an economic preference but a national security imperative, ensuring resilience against geopolitical shocks and foreign leverage. This requires sustained public investment and incentives that counter decades of offshoring driven by short-term cost optimization.
Simington further emphasizes the necessity of strategic protectionism. Industrial development and technological innovation must be insulated from the volatility of short-term market pressures and shareholder-driven cost cutting. Rather than treating defense production and advanced manufacturing as expenses to be minimized, a Hamiltonian framework treats them as long-term national assets. Temporary protections, state-backed financing, and coordinated planning become tools to nurture industries until they achieve scale, competence, and global competitiveness.
This model prioritizes genuinely transformative technologies over convenience-driven innovation. Public and private resources should be concentrated on breakthroughs in advanced manufacturing, artificial intelligence, robotics, energy systems, and defense technologies—fields that generate compounding strategic advantages. Only by abandoning a naïve free-market ideology that privileges asset-light efficiency and embracing a state-coordinated, capacity-building strategy can the United States restore its ability to generate and deploy the “big ideas” that underpin long-term economic strength and geopolitical leadership.
Summary & Implications
The United States and much of the Western world have gradually exchanged durable industrial and strategic capacity for short-term financial returns and technology centered on consumer convenience. A fixation on capital efficiency, combined with ethical hesitation and regulatory restraint, has constrained military innovation and weakened the industrial base, while the dot-com era and subsequent startup culture steered investment toward incremental, lifestyle-oriented products. Despite deep pools of capital and talent, this environment has yielded few truly transformative advances, producing what can be described as a prolonged deficit of foundational innovation.
By contrast, China has pursued technological and industrial dominance as a core national objective, committing resources to physical infrastructure, skilled production, and strategically vital technologies. The pressing task for the West is to reverse its misalignment of capital, labor, and policy and refocus on building tangible, high-impact capabilities—before the opportunity to shape the next phase of technological and strategic competition slips away.
References
- The Technological Republic Hard Power, Soft Belief, and the Future of the West. Alexander C. Karp, Nicholas W. Zamiska. 2025
- “China Is Winning. Now What?”. Nathan Simington. American Affairs Volume VIII, Number 3 (Fall 2024): 3–23. https://americanaffairsjournal.org/2024/08/china-is-winning-now-what/