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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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