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Tyler Cowen had Dan Wang (author of Breakneck, originator of the 'China is run by engineers, US is run by lawyers' meme) on his podcast last week. IMO, Tyler's podcast is at it's best when he's debating rather than interviewing, part of why his year-end reviews are some of his best episodes. It's particularly interesting watching someone intelligent actually defend America and moreover champion causes that inevitably would code as lower-status to the intellectual class.
tl;dr, Tyler's views —
Massive quotes incoming. Skip ahead if you don't want to read Tyler's arguments:
And honestly, this seems to me to be the revealed preferences of most people. Europeans and Chinese who move to the US largely move to the burbs and buy the big car even while (at least the former) tut-tutting about how barbaric it all is. People, at least once they hit a certain age, want the SFH and the big yard with the fence and the space to raise their children.
On the pandemic and vaccines:
And yet. And yet! At one point we have this brief exchange:
I can buy some of Tyler's takes, and as I mentioned it's refreshing to see an actual contrarian take about the competence of America. But at some point, it just transcends a contrarian take into cope territory. Why are we complacently accepting that China is going to be the global center for auto manufacturing on top of drones and everything else? Life might be good now, but if China is just 1950s America, and 1950s America was just 19th century Britain, aren't we headed for the same stagnation and broad irrelevance of the UK today?
Maybe some of the catastrophizing about China is overwrought and some of America's apparent weaknesses are just the invisible hand of the market moving in mysterious ways, while the gleaming bridges and HSR to nowhere are albatross projects and a drag on growth. Maybe our apparent decadence and vice are really just the product of a system optimized for giving it's people a good life, while Chinese grind 996 work weeks for shit wages to stroke Xi Jinping's ego. But man, I don't want to get hit with the rare earth metals stick whenever the POTUS doesn't kowtow to the emperor. I'm still torn between whether the economists should be running the show or whether we should keep them as far away from the levers of power as possible.
Make some actual tariffs that bite and laws that promote onshoring; and if consumers don't even notice an increase in prices it ain't working. If your argument is that we can't match the Chinese in whatever way, deregulate or bring Chinese companies here so we can learn from them or do whatever it takes to compete. Instead, we just decided to sell them H200s and erode one of our few remaining advantages (maybe someone more plugged in can comment on how significant this is?).
While there is a population difference, I think the primary reason China is so much more capable than the west isn't cultural but economic. They have a much more potent economic model than the (more or less) free market capitalism that exists in the west. They limit the places their citizens can store money to largely just banks and real estate. They then hyper focus that pooled capital towards very unprofitable ventures in order to super charge industries. While this model is not particularly pleasant for the individuals involved, it is highly competitive on the national scale. The west, with its focus on individual rights, just can't compete.
I think a lot of the cope on this comes from people that have internalized the whole "capitalism is optimized asset allocation" thing. I don't see why that's necessarily the case. Clearly it outperforms feudalism or true centralized command communism, but why should we believe that it's the best possible economic system with so few data points. It seems to me like the Chinese have threaded the needle between communism and capitalism and created something better. Is it sustainable? Who knows. Centralizing economic authority can lead to some catastrophic failures when that authority becomes incompetent. But for now, being able to focus a country's pooled resources into any industry looks a hell of a lot better than the western economic model, where our best and brightest are incentivized to spend their prime years shuffling assets from one pile to another to make a buck.
Define "potent"? GDP growth? Per Capita / PPP? If we're talking economics, your terms should be defined and quantitative.
So they're more "potent" (however that is defined) by generating a negative return on investment? That doesn't make any sense. To be as charitable as possible, perhaps you mean the investments are high CAPEX and have long cycles towards net ROI benefit? If they are by definition unprofitable, they are by definition bad investments that will guarantee that the given industry fails.
You have to mean international scale, right?
This post is so poorly written and argument by assertion that I debated even posting a reply. But, I think the spirit of the Motte is often best exemplified by being hyper charitable to the other side, steelmaning poor arguments, and then presenting the opposite view.
My argument against China is the theses in The Great Demographic Reversal combined with an obvious failure mode of the Chinese tech innovation system.
The TLDR, for brevity:
China's demographics SUCK. They're going to have more olds than they know what to do with. The one child policy was a disaster. People aren't having children together now. And there's a semi-nomadic horde of about 50 - 100 million men who work seasonal migrant jobs from place to place. Their middle class isn't nearly large enough.
This means that China has no choice but to rigidly control their population. But at their scale, that's incredibly expensive to do. The social credit score system is an experiment; can we pay one half of our population to spy on the other half, and then use computers to spy on the first half? In a perverse irony, China, that does not have nearly the same social security safety net that the US does, is perhaps (the budgets are secret) spending more to not have one!
Technology wise, the Chinese model has been to find / steal western tech, reverse engineer it to the best of their ability, and re-deploy. People can quibble over if this is real innovation or not, the extent to which China has produced any new and meaningful "inventions" but it doesn't matter. This style of technological management eschews what has been the real engine of tech development over millenia; lots of compounding, happy accidents shared across a large population. An interesting quirk of history is that from about 800 - 1200, the Muslim world of MENA was the most scientifically advanced on the planet. But they fell behind technologically; they knew how stuffed worked and were very smart, but lacked the infrastructure to actually build and disperse scientific knowledge into material things that normies could use to improve their life. Starting at about 1200, Europe starts to overtake in both science and tech because they deploy tech more broadly, and science and tech have a mutually re-inforcing feedback structure.
Chinese GDP per capita is about $15k. Even with the CCP trying to shit out new tech as fast as it can, most of their own people can't really afford it. Secondly, most of their people don't have a cultural aptitude for tinkering, exploring, developing in a truly creative sense. When the high esteem strategy in life is to grind 996, be an excellent bureaucrat, and a cold bug person, you're not going to get weirdo genius inventors and you're especially not going to get weird genuis asshole corporate leaders --- Jobs, Musk, Bezos, Gates et al would've been hammered into shit in childhood in China because they're non-conformity is off the charts. Jack Ma is the only homegrown Chinese "visionary" who didn't leave, and he was either some sort of plant by the CCP or became a permanent political prisoner because he did a good job and built a compelling tech company.
The tension at the core of all Chinese history is balancing a pathological need for control of a giant population and a giant geography against the economic growth potential of ceding some control. If the CCP let their people just do their thing, I would be a lot more worried about a Chinese Century because of the sheer numbers. But the CCP has not only chosen, but accelerated toward clamping down harder and "controlling" more.
If you oppose China, you should be scared and try to actually learn about it instead of repeating comfortable copes. Chinese capacity and progress is truly impressive - reassuring for human industrial civilization, but horrifying for me as a Christian who wants true freedom.
People have been repeating these same copes for hundreds of years, about the US then Germany then Japan and... 40 years already about China. The Chinese market is freer than the US and US government spending is a higher percentage of GDP than China's. Even with rather high (new) environmental regulations, Chinese companies can just do things, build factories quickly etc. which take 5+ years to receive planning permission in most of the US.
China has much more competition than in the West. Even when the government directly orders something, it's just broadcasting goals which many smaller governments try to reach in many different ways. Once an effective method is found, the people behind the effective method are promoted to try to implement it elsewhere while new competitions are started. In the US the 50 states have long since stopped experimenting with weird policies and the federal government offers many carrots and some sticks to standardize everyone on mediocre stagnation.
You repeat copes like "China just steals" but China has been inventing leading technology for at least a decade. Materials science, engineering, chemistry, mathematics etc. high impact papers have 60-80% Chinese authors.
Chinese demographics don't matter, because those old people don't have much wealth and won't bend half the economy to care for them. Those old people were also poorly educated. They are being replaced more educated people, who grew up with better nutrition. 1.4 million engineers graduate per year vs 200k in the US. Their factories are also heavily automated. Their elites have no need to replace the people - indeed, they even emphasize traditional culture and architecture in a way we can only envy.
The truth is somewhere in the middle. What you see is a project, the same as everything else. What you don't see is also a project.
In China, while innovation has definitely gotten much better, the method of thinking and philosophy seem better suited in America, because Americans will rake themselves over broken glass for that one 0.001% of optimization. They are obsessed with it. Silicon valley breeds techbros by the boatload who want to move fast and break things so they can "disrupt the market" or optimize even the act of drinking a smoothie. And they have all the money, so there's a market and funding for these things.
On the other hand, China absolutely dominates speed of deployment and iteration. Time to market, time to launch, time to prototype. This is partly a result of having all the manufacturing clustered so tightly together, and partly a result of the wonky path of development they went through, where they skipped entire fields and built newer, different infrastructure without the problem of having to deal with creaking legacy. Greenfield will always be easier than brownfield.
The biggest problem China has is systemic corruption. The biggest problem I consider the West to have in comparison is bureaucratic apathy and a lack of political will. These manifest in different ways in the society they are in. The Chinese failure mode is naked power law; the corrupt can win every time, so you either have to be even more corrupt or even more powerful than the corrupt (this usually ends up in winner-take-all Politburo games). Smarter Chinese governments work around this by playing smaller factions against each other. The Western failure mode is abdication of responsibility; an endless chain of committees, regulation and lawsuit risk management so nobody bothers anymore, and real power isn't in the political organs so why bother? Put me in government, so I can draw a salary without governing.
Meanwhile, in China, Xi can just say "I want that mountain gone" and everyone will fall over themselves to get it done ASAP, by whatever means necessary. Blasting powder, industrial equipment, artillery, slaves with pickaxes. The method (and potential fallout) doesn't matter anywhere near as much as the result. But hey, that's the benefit of an autocratic system.
Chinese demographics really, really matter. The thing is, that problem is the same problem everyone else has, and China is unwilling to import foreigners by the boatload. The state is really concerned about the demographic problem, because it keeps them paid. My worry is that if they throw their entire state apparatus at "solving" this, I don't know what that solution looks like. I do have a sneaking suspicion that it's something nobody from the West could stomach, even if Western governments may privately wish they had the same level of power over their citizens.
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Yeah, I'm not going to bite.
"But muh state capacity!" is just another variety of cope that technocrat loving Lee Kuan Yew fanboys use to hand wave away pesky little things like civil liberties, the concept of federalism, and actual free markets. "State direct capitalism can totally work, man." There's a joke in here about how just a little, teeny bit of authoritarianism will be really good for us, like a teaspoon of arsenic to boost the immune system.
I wonder if this leads to gamification of easy to quantify objectives like GDP, but fails for other things, like, I don't know, food safety.
From this article and interview:
Coordination problems! Ah, so easy to fix, those.
All
livesdemographics matter. As does geography. My geopolitical worldview and formula is pretty much demographics + geographic determinism / naval warfighting and sustainment ability. China's prospects in all three of those are ... suboptimal.Also from the article I linked to above:
200 to 300 million small scale farmers who haven't leveled up meaningfully since maybe the 1950s.
Hey, but they do have cool lookin' EVs.
This is a funny callout given the fact the PLAN is quite literally doing the part of the movie where the protagonist does a training montage to "the eye of the tiger"
What do you think about the Type 003 EMALs, the pending type 004, and the fact they're launching type 054x and type 055s at a pretty hefty clip?
Put another way, why do you think basically every INDOPACOM leader sounds like they're shitting their pants in interviews and press releases?
There's a pretty large difference between production of new combat systems and experiencing in highly complex naval operations in combat.
China hasn't done the latter since 1979. Even basic seamanship atrophies quickly without constant training and re-training. Ask the U.S. Navy's 7th fleet.
Aquilino and Paparo - both aviators, by the way - mostly make noise about the issues of sustainment in the event of a crisis with taiwan. Amateurs talk about strategy, professional talk about logistics. The biggest issue is that China is like, really far away and shit. Our sealift capabilities plus ammunition, refit, maintenance, repair in theatre isn't enough to keep pace when PLAN has all of their naval industry right there. In strict force-on-force, the US is still winning, hands down. The problem, again, is when timetables stretch.
But that's just talking about a hypothetical right off the coast of mainland China. In terms of true ocean going naval fore projection, what has China done more than park a flotilla in the Gulf of Aden (after getting lost one time, lol) and then doing weird joint floats with the Russians sorta-kinda near Japan?
Running a truly global Naval force is shit crazy expensive, hyper complex, and requires a training pipeline and practice that you have to develop through decades of trial and error. Human capital, culture, and experience still matter far more than sleek new hulls and neato weapons.
Why do you think US would win when a carrier group doesn't have enough interceptors to even get close to China?
Getting into a shootout with a small continent sized landmass isn't what a admiral is looking to do.
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Nice to talk to someone who knows their shit!
While I agree, "X country hasn't done real combat since Y" is kind of a tired trope. The US Navy hasn't fought a peer opponent since 1945 but we all agree they could wipe the floor with any other navy, and debatably could take on a large fraction of the world simultaneously.
Experience is great, but training is so close to as good it almost doesn't matter? And basically everything I see about China is they're getting in more and more training hours, and running bigger and bigger exercises.
Yes, that's why I said it's the "training montage" part. They're not there yet, but they're fucking grinding to get there. They have a CATOBAR carrier to git gud on, they'll soon have more. Eventually they'll have nuclear powered ones so they can learn that too. There in the middle of the "decades of trial and error" part, meanwhile the US Navy is now 3/3 on failing to acquire new major surface combatants, and even if they could procure worth a damn, they barely have the shipyard capacity to make them.
I'm Canadian, I love Pax Americana, I do not want a world in which China is strong. I am scared because it seems like my team is eating crayons, going to lobbyist dinners, and laughing at the Chinese for being "IP theft bugmen who can't innovate" while the Chinese are hitting new deadlift PRs every month (still smaller than us, but growing!) and drinking a river of creatine.
Yes. But their naval exercises keep getting bigger and better. They're slowly expanding their global base network. Their recent "totally not practicing to cut Taiwan off" drills continue to expand.
Also, the unfortunate reality is that the fight, if it happens, will be in the first island chain, and maybe tickling the second (I'd imagine that would be a round #2 some years later depending on round #1).
The PLAN won't be forcing the straits of Magellan, where both navies have to bring their shit with them. It'll be in China's backyard.
Will Chinese Type 055s ever sail off the coast of LA? Absolutely not.
Is the PLAN on a trajectory that results in the US being pushed back deeper into the Pacific? It's looking increasingly likely, and I don't like it.
Okay, so we actually agree on more than we disagree on. And we're probably 99.9999% aligned on the current state of affairs.
The difference is just in the prognosis of the outcome.
I'll combine these three things from your last post:
Time and timing are the big issues here. We've all heard the 2027 deadline / prediction for shit popping off. I don't really think it matters if that's actually 2026, 2028, 2030. But I think it's true that the CCP has a closing window of opportunity before (a) They experience something live COVID again (b) Power struggle at the top after Xi dies or (c) The demographic wave breaks and they actually HARD lose for another century. Truly, I think it's no later than 2035 (that's stretching it) before CCP has to shit or get off the planet.
Will their eye of the tiger training montage be complete in that amount of time? I'd argue no. Again, multiple decades of naval experience really are necessary. Maybe you can shave it down to 20 years starting from .... 2009? 2013? But I don't think you can just fuck around and find out how to do large scale amphibious work in 5 - 10 years.
Note to the Mods (@amadan, just tagging you off the top of my head) -- can we self-submit this as a "understanding actually developed out of some initial rounds of shouting" award?
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Americans counter that in case of Taiwan invasion they're just going to keep sinking and stealing Chinese cargo ships everywhere else and that PLAN is too small to stop them.
They're also talking about allowing privateering again.
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I didn't praise state capacity once but argued the opposite: China is not state directed like you describe.
My recent post history is full of criticisms of such metrics! You literally have no idea what I'm talking about and recycle the same copes.
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