Anthropic, the Pentagon, OpenAI, Corruption and Tyranny

 Meet Dario Amodei and Daniela Amodei, the brother & sister who are CEO and President of the artificial intelligence company Anthropic.  They look like the kids who ran a lemonade stand down the street about five years ago.  Instead of a lemonade stand, five years ago they left the company OpenAI and founded Anthropic.  While at OpenAI, Dario was a product developer, and Daniela was head of the safety division.  Anthropic is a privately-held company which produces Claude, widely regarded as the best AI engine on the market.  Anthropic was recently valued at 380 billion dollars, in proportion to its most recent private equity offering.
 
The Pentagon has been in a public dispute with Anthropic regarding a $200 million contract for the use of an advanced version of the Claude AI.  Anthropic insisted that the program not be used for two purposes: 1) mass Surveillance of US citizens, and 2) fully autonomous weapons targeting.

“We support the use of AI for lawful foreign intelligence and counterintelligence missions. But using these systems for mass domestic surveillance is incompatible with democratic values. AI-driven mass surveillance presents serious, novel risks to our fundamental liberties. To the extent that such surveillance is currently legal, this is only because the law has not yet caught up with the rapidly growing capabilities of AI.”

“Partially autonomous weapons…are vital to the defense of democracy. Even fully autonomous    weapons…may prove critical for our national defense.  But today, frontier AI systems are simply not reliable enough to power fully autonomous weapons. We will not knowingly provide a product that puts America’s warfighters and civilians at risk.”
https://www.anthropic.com/news/statement-department-of-war

The Pentagon insisted that Anthropic could put no restrictions on its use of the technology, and cancelled the contract.  Further, in an act of retaliation, the Pentagon declared the Anthropic was a “Supply-Chain Risk”.   President Trump issued an executive order calling on all U.S. government agencies to begin a 6-month’s phase-out of Anthropic’s products.  If the designation of “Supply-Chain Risk” is formalized, it would also block companies with any Federal contracts from using Anthropic’s products.  

Most large corporations perform some kind of service for the Federal Government.  Blocking all of those companies would have a throttling impact on Anthropic’s ability to compete with OpenAI.  Trump’s former AI advisor Dean Ball described the Trump administration's actions against Anthropic—specifically the Pentagon's supply chain risk designation—as "attempted corporate murder".

Within hours of cancelling the contract with Anthropic, the Pentagon signed a new contract with OpenAI to provide the same services.  Incredibly, OpenAI issued a public statement that it would also refuse to provide services for autonomous weapons targeting or mass surveillance of Americans.  Apparently, these issues were only pretexts for cancelling the  Anthropic contract, and subsequent blacklisting of the company.   OpenAI’s public statement included the following text:
    “We have three main red lines that guide our work with the DoW, which are generally shared by several     other frontier labs:
        No use of OpenAI technology for mass domestic surveillance.
        No use of OpenAI technology to direct autonomous weapons systems. 
        No use of OpenAI technology for high-stakes automated decisions (e.g. systems such as “social                 credit”).”
https://openai.com/index/our-agreement-with-the-department-of-war/

Oligarchy
There’s little doubt in my mind about the reason for the repression of Anthropic is the political orientation of their leaders.  Sam Altman donated $1 million to Donald Trump’s Inauguration Committee.  In 2024, Dario Amodei donated $214,000 to Democratic candidates, including Kamala Harris.  

There is a class of oligarchs emerging in the United States, consisting of billionaires to centibillionaires.  The oligarchs have taken control of a dismaying range of facets of American society.  In media alone, oligarchs have taken control of a large portion of America’s major newspapers, news organizations, popular entertainment and social media sites.  

In Russia in the early 2000s, the price of great wealth was allegiance to the political authority of Vladimir Putin.  Mikhail Khodorkovsky, head of Russia’s largest oil company, had his company dismantled, his lawyers imprisoned and was himself imprisoned for a decade for politically opposing Putin.  

Today, in the U.S., it appears that Trump and the Republican Party are acting as gatekeepers to the accumulation of great wealth.  Jeff Bezos, Mark Zuckerberg, Elon Musk, Larry Ellison, and Patrick Soon-Shiong have all publicly aligned themselves with Trump, as well as other billionaires, such as Peter Theil, Miriam Adelson, Howard Lutnick, Steve Witkoff, Jared Kushner, and others who were already politically aligned.   A dozen other billionaires have been appointed to high-level positions in the Trump administration.

The notion that political allegiance is necessary for business success is antithetical to the idea of American freedom.  When one of America’s most promising businesses is crushed because of political donations, we have lost American freedom, and become a tyranny.  

"Abundance" Book Review

 

There is a widespread feeling that the American economy is broken.  Data shows that the percentage of families living paycheck to paycheck has risen from around 30% in the late 1990s to 50% to 60% today.  Rising costs and stagnant wages have lowered the standard of living for working families, even as per-capita GDP has reached new records in a linear ascent.  In many aspects of society, we are acting as if we are impoverished instead of wealthy.  Both federal and state government agencies have laid off workers, services are impaired, maintenance of infrastructure is declining, homelessness is rising, etc.  What is wrong?

Ezra Klein and Derek Thompson recently wrote the book “Abundance”, published in 2025 to address issues with the broken economy.  The book expresses the core ideas of supply-side progressivism, a movement originating in about 2010 and building momentum until today.  There's a Wikipedia Page for supply-side progressivism; check it out.

The term “Abundance” is now being widely used by Democratic candidates for Congress, though I suspect few of them have actually read the book.  “Abundance” may become the main campaign theme for the 2026 mid-term elections, particularly for centrist Democrats.  Abundance seems an odd choice as the unifying rallying cry for Democrats – because the main message is a confession that Republicans were right when they said that government regulations were strangling the economy.  

The central thesis of Abundance is that limitations in the supply of goods and services have driven prices higher and impaired American prosperity.  Klein and Thompson lay out the argument that excessive government regulation has been the root cause of those shortages.  Specific examples include goods and services which have increased in price more than the rate of inflation – housing, health care, higher education, and other key necessities, including energy, food and transportation.  For me, there’s an uncomfortable echo of Reagan-era supply side economics, which proposed that lower tax rates, in combination with reduced regulation, would bring prosperity to consumers and higher government revenue.  The theory is largely discredited by current day economists.  

Klein and Thompson title their chapters Beyond Scarcity, Grow, Build, Invent, and Deploy.  The first chapters examine the impact of regulatory over-reach on particular aspects of the American economy.  The final chapter, “Deploy”, emphasizes the role that government should play in encouraging the development and commercialization of new technologies, after invention.  

Klein and Thompson give short shrift to the societal benefits of the last 60 years of government regulations.  We now have cleaner air and water; fatalities per air-travel passenger-mile have fallen by a staggering 99%; fatalities per vehicle-travel passenger-mile have fallen by about 66%; worker safety is greatly improved across many industries; food and medical safety is far better in the United States than in other nations; etc.   But they are correct that there is a cost to regulations, and those costs have not always been weighed accurately against the benefits.

To use a Millennial idiom, one could say that Klein and Thompson are *not wrong*, damning them with faint praise.  I believe the book is correct that policy choices about some regulations have led to scarcity, which then led to rising costs.  Housing and medical treatment are the best examples.  On the other hand, abundance theory is woefully incomplete in describing or remedying the problems with the economy.  

The primary problem with the economy is demonstrably not on the supply side.  Adjusted for inflation, personal earnings (wages and salaries) have increased by only about 12% since 1980, while per capita GDP has more than doubled, according to data from the Federal Reserve Database.  Wage stagnation is the primary reason that working-class Americans are being left behind, not limited supplies of needed goods and services.

The reason for wage stagnation is also pretty clear.  Over the course of my career (1980 – 2026), I saw computer automation eliminate many good-paying jobs.  Managers were issued PCs to do correspondence and clerical work, and secretaries were re-assigned or fired.  A geologist with a workstation could do the work of three to five geologists working with pencils and drafting tables, so 2/3rds of the geologists were fired.  Workstations produced high-quality graphics, so the entire drafting and reprographics departments were fired.  Enterprise-wide accounting software reduced the number of accountants in my department from 28 to 1; the other 27 were fired.  The Internet and internal information archives eliminated the need for information specialists.  In the 1980s, management set a goal of reducing professional headcount from 3000 to 1000, and achieved that goal; also in 1980, there was an aspirational goal to reduce the headcount to 300.  The company has now been sold, so it appears that they achieved that goal as well.  As Thomas Piketty wrote, technology and capital replace labor.  

There is a belief, often cited in articles about economics and technology, that new technologies *always* produce new jobs.  I saw another article citing that dogma two days ago, in an article about the Davos conference and AI.  The argument is empirical, and to my mind, began to break down with the introduction of the PC in 1980.  It may be true that the introduction of the automobile created more jobs for buggy-whip manufacturers, but that will not necessarily be true about the replacement of lawyers by AI.  Empiricism is the weakest scientific argument, because it provides no fundamental explanation for why it is true, and it provides no predictive power for situations outside of the envelope of prior experience.  And the future is always outside of the envelope of prior experience. 

The goal of many Democratic policies of the past 60 years has been to address the symptoms, rather than the cause, of economic dysfunction.  Higher minimum wage, pro-union regulations, food assistance, rental assistance, child-care tax credits, health insurance subsidies, etc., are all band-aids, not solutions to our economic problems.  Neither party has been able to develop policies that improve the fundamental productivity of all individual workers, and the power of those workers to demand greater compensation for their work.  

My employer’s view is that employees were a cost, not an asset.  For 45 years, the pathway to improve corporate profitability has been to employ fewer people.  That put relentless pressure on employee compensation.  

There are a few obvious possibilities.  Nationalized health care would remove the burden on businesses of providing health insurance for employees.  Higher minimum wage might help, but also provides an incentive for businesses to automate low-paying jobs.  It might be possible to tax companies based on the number of good-paying jobs they provide, relative to profits.  But this might put American companies at a disadvantage in global trade.  

Government policies have long been tolerant of the gimmicks that employers (even government employers) use to avoid paying benefits to employees, such as restricting weekly hours, or periodically laying off worked, only to hire them again shortly afterwards.  But as well as ensuring that workers are paid benefits that they deserve, government should help to improve their productivity and value to employers.

In my opinion, there are no clear policy fixes for the problems plaguing the 21st century economy.  Abundance, as a book and as a policy goal, is a good start.  But after 2028, Democrats must not fail to deliver on the idea that Americans deserve prosperity, or we will face a return to the populist politics of grievance and blame which characterizes the Trump administration.