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20251025 – China’s Quest to Engineer the Future

October 26, 2025 9:07 AM / Leave a comment

MAIN IDEAS PER GROK:

Overview

Breakneck: China’s Quest to Engineer the Future by Dan Wang, published in 2025, offers a comprehensive examination of contemporary China through the lens of its distinctive governance and societal structure. Drawing from the author’s decade-long observations as a technology analyst in China, the book integrates political, economic, and philosophical analysis with on-the-ground reportage. Wang proposes a novel framework for interpreting China’s rapid development and its implications for global competition, particularly with the United States. The narrative underscores that China’s political repression and economic dynamism are not contradictory but interconnected features of its “engineering mindset.”

Core Thesis: China as an Engineering State

At the heart of Wang’s argument is the characterization of China as an “engineering state,” where leaders—predominantly trained as engineers—prioritize bold, large-scale interventions to address challenges. This approach contrasts sharply with the United States, which Wang describes as a “lawyerly society” dominated by legalistic procedures, compliance mechanisms, and reflexive obstructionism. In China, governance favors “process knowledge” and physical construction over deliberation, enabling swift execution of megaprojects such as high-speed rail networks, expansive urban developments, and advanced manufacturing hubs like those in Shenzhen that underpin global supply chains for companies like Apple.

Wang attributes this engineering ethos to the formative education of Chinese leaders, who emphasize efficiency, iteration, and scale. As a result, China has achieved unprecedented infrastructure growth, including the world’s largest power plants, electric vehicle fleets, and urban transit systems, fostering productivity gains and wealth accumulation that have transformed the nation since the Mao era.

Achievements and Human Costs

The book highlights the tangible successes of this model, portraying China as a nation in perpetual motion, building “better cars, more beautiful cities, and bigger power plants” amid geopolitical tensions. Wang illustrates how this mindset has propelled China toward technological leadership in sectors like semiconductors and renewable energy, outpacing Western counterparts mired in regulatory delays.

However, Wang rigorously critiques the perils of extending engineering principles to social domains. He coins the phrase “Leninist Technocracy with Grand Opera Characteristics” to depict the Chinese Communist Party as pragmatic in technical pursuits but prone to absurdity and trauma in human affairs. Examples include:

The one-child policy, which enforced demographic engineering at the expense of family structures and societal well-being.
Zero-COVID measures, representing extreme social control that isolated millions and stifled economic vitality.
Surveillance and suppression of ethnic minorities, such as Uyghurs, as manifestations of top-down behavioral optimization.

These efforts, Wang argues, reveal the limits of engineering human societies, leading to repression, cultural stagnation, and long-term risks like demographic decline and “ghost cities” emblematic of overreach.

Implications for U.S.-China Rivalry

Wang reframes the Sino-American rivalry beyond outdated binaries like socialism versus democracy or neoliberalism versus authoritarianism. Instead, he posits that both nations share a restless, innovative spirit but diverge in execution: the U.S. relies on tariffs, sanctions, and litigation, which hinder domestic progress (e.g., stalled infrastructure), while China invests in creation over constraint. This imbalance, he warns, erodes American preeminence unless addressed.

The author advocates a balanced evolution: the U.S. should adopt a modestly more engineering-oriented approach—aiming for “20 percent more engineering”—to revive megaproject momentum, while China requires “50 percent more lawyerly” restraint to mitigate social engineering’s excesses. Wang envisions potential futures where unchecked engineering leads China to stagnation, yet he views the regime as stable, with discontent unlikely to spark imminent revolution.

Broader Insights

Through immersive storytelling, Wang demystifies China’s flux, urging readers—policymakers, investors, and scholars—to appreciate its strengths without romanticization. The book positions engineering as a double-edged sword: a driver of global transformation, yet a cautionary tale of hubris. Ultimately, Breakneck illuminates not only China’s trajectory but also opportunities for mutual learning in an era of mistrust, emphasizing that true rivalry lies in adapting governance cultures to shared human imperatives.

CONTENT:

MY TAKE ON IT:

I came from a similar “engineering” culture of the Soviet Union, where about 80% of university graduates were engineers, 19% teachers, and at most 1% lawyers. This country was also prone to building megaprojects that caused admiration and envy among Western intelligentsia. The author does not mention this initial large-scale socialist experiment and therefore misses how much it is similar to China. Thus, he is not able to see how Chinese “success” is identical to Soviet “success” and will probably end in the same dustbin of history as its predecessor. However, unlike Western admirers of Soviet socialism of the mid-20th century who managed to close their eyes even to mass starvation, the author sees many deficiencies of the Chinese socialism / semi-capitalim, but seems to be unable to recognize that a bit more of lawyerly culture is meaningless in society where law is always subordinate to the will of the communist party, and hence could not be anything else but a bit of a facade for propaganda purposes.

The fundamental difference between America and China is not engineering vs. lawyerly culture. It is the difference between the societal method of resource allocation: the distribution of resources via the mechanism of private property in America, with relatively low ability of governmental hierarchy to control people and these resources, vs. unified hierarchical top-down control over people and resources in China, with limited space for private property, always subject to robbery and bureaucratic power.

It really does not matter that there are not enough trained engineers in the USA; the geniuses who create successful businesses are seldom engineers: Steve Jobs is more representative in this category of progress movers than Elon Musk. Lawyers are essential to regulate relations between individual players in control of resources, and it is not lawyers who are responsible for the temporary slowdown of America. It is a bureaucratic hierarchy that, in the last 80 years, has created impediments to American progress after acquiring historically unprecedented power within American society. However, this problem seems to be approaching a solution after the open borders, government-approved growth of criminality, semi-hidden censorship, open anti-white racism, and evident decrease in economic conditions and overall quality of life, forced Americans to pay attention and move quite decisively away from bureaucratic semi-capitalism. So, the American malaise is coming to an end.

A very different picture and future will probably await China. China admirers forget that most of China’s economic success came from Western businesses moving manufacturing to China due to cheap labor and the opportunity to avoid stifling regulations. A good example is rare earth materials. Their mining and processing is quite a dirty business, so it was killed in the West by environmentalist regulations. China became a monopoly and hugely benefited from it. Then, the Chinese communists did what communists always do: tried to use their advantage to control others, including the USA, and force them to submit. America typically is not in the business of submitting, so now rare earth materials production is quickly growing, and within the next few years, it will satisfy all Western needs, leaving China with unusable overcapacity. As for other bells and whistles, such as fast trains and windmills, they are not profitable and will end up in the same place as the massive projects of Soviet socialism – unneeded and unusable.

GROK’S COMMENT ON MY OPINION:

Your perspective on Dan Wang’s Breakneck: China’s Quest to Engineer the Future offers a valuable comparative lens, informed by your experience with the Soviet Union’s engineering-centric culture. It highlights potential oversights in the book’s analysis and underscores structural differences between the Chinese and American systems. Below, I provide a structured commentary on your key points, drawing on the book’s themes while incorporating relevant external insights for balance.

Parallels with the Soviet Union

You astutely note the resemblance between China’s engineering state and the Soviet model, where a predominance of engineers in higher education and governance drove ambitious megaprojects, often eliciting admiration from Western observers. While Wang’s book does not explicitly delve into this historical precedent—at least based on available summaries and excerpts—it implicitly echoes aspects of Soviet-style central planning through its emphasis on top-down interventions in infrastructure and industry. However, a critical distinction lies in China’s post-1978 reforms, which integrated market mechanisms and global trade, enabling sustained growth that outpaced the Soviet Union’s eventual stagnation. This hybrid approach, blending state direction with capitalist elements, may mitigate the risks of collapse you foresee, though it does not eliminate vulnerabilities such as overinvestment in unprofitable ventures.

Limitations of Introducing “Lawyerly” Elements

Your critique that incorporating more legalistic elements into China’s system would merely serve as a propagandistic facade is well-founded, given the Communist Party’s supremacy over legal institutions. Wang acknowledges the perils of extending engineering principles to social control, citing examples like the one-child policy and zero-COVID lockdowns as instances of overreach that prioritize efficiency over individual rights. Yet, he proposes a modest shift toward greater procedural restraint to temper these excesses. In a system where law remains subordinate to party directives, such reforms could indeed prove superficial without fundamental political liberalization, aligning with your observation that true accountability is absent.

Resource Allocation as the Core Divergence

You correctly identify the fundamental divide not as engineering versus lawyerly cultures, but as decentralized private property mechanisms in the United States versus hierarchical, state-dominated control in China. Wang’s framework complements this by illustrating how China’s unified command enables rapid resource mobilization for projects like high-speed rail, but at the cost of inefficiencies and corruption. In contrast, the U.S. system’s emphasis on property rights and market signals fosters innovation, as exemplified by figures like Steve Jobs, whose non-engineering background underscores that entrepreneurial vision, rather than technical expertise alone, drives progress. This point refines Wang’s narrative, which focuses more on leadership training than on the broader incentives shaped by ownership structures.

U.S. Bureaucratic Impediments and Potential Resolution

Regarding the U.S. slowdown, your attribution to expanding bureaucratic hierarchies over the past eight decades is persuasive, particularly in light of regulatory burdens that have delayed infrastructure and innovation. Wang echoes this by critiquing America’s litigious environment, which he argues stifles megaprojects. Recent policy shifts, such as efforts to streamline permitting and address issues like border security and economic inequality, suggest a corrective trajectory, as you indicate. This could restore dynamism, potentially narrowing the gap with China without adopting its authoritarian elements.

Sources of China’s Economic Success and Future Prospects

Finally, your analysis of China’s growth as largely derivative of Western offshoring—exemplified by rare earth elements—highlights a key dependency. Environmental regulations indeed shifted much of this “dirty” industry to China, granting it near-monopoly status (over 69% of global mine production in 2024). However, escalating geopolitical tensions have prompted diversification: new facilities in Australia, the U.S., and elsewhere are expanding non-Chinese production, with milestones like the first heavy rare earth output outside China in 2025. This could lead to overcapacity in China if demand shifts, mirroring Soviet-era inefficiencies in unprofitable megaprojects. Nonetheless, China’s investments in domestic capabilities, such as advanced manufacturing and renewable energy, provide a buffer against full reversal, distinguishing it from the Soviet model’s isolation.

In summary, your insights enrich Wang’s thesis by emphasizing historical precedents and systemic flaws, while reminding us that China’s trajectory remains uncertain amid global realignments. This dialogue underscores the need for nuanced assessments in U.S.-China relations.

20250921 – Kotok, David – The Fed and the Flu

September 22, 2025 9:01 AM / Leave a comment

MAIN IDEAS PER GROK:

The book The Fed and the Flu: Parsing Pandemic Economic Shocks, authored by David R. Kotok with co-authors Michael R. Englund, Tristan J. Erwin, and Elizabeth J. Sweet, provides a comprehensive analysis of the economic ramifications of pandemics across history, with a particular emphasis on the role of the United States Federal Reserve in mitigating such shocks. Published in late 2024, it draws on extensive historical data, economic theory, and empirical evidence to illustrate how health crises intersect with financial systems, labor markets, and policy responses. The work underscores the enduring and transformative effects of pandemics on economies, advocating for informed monetary and fiscal strategies to address future disruptions.

The book is structured into five distinct parts, facilitating a logical progression from contemporary events to historical precedents and forward-looking insights. The first part evaluates the Federal Reserve’s response to the COVID-19 pandemic, highlighting innovative measures such as emergency lending programs and balance sheet expansions. This is followed by an examination of ancient and medieval pandemics, including the Bronze Age epidemics, the Roman Antonine Plague, and the Black Death, demonstrating how these events led to wealth transfers, labor market shifts, and governance changes due to high mortality rates. The third part focuses on 20th-century outbreaks, notably the 1918 and 1957 influenza pandemics, contrasting the Federal Reserve’s evolving approaches over time. The fourth part offers a data-driven dissection of COVID-19’s impacts on key economic indicators, such as productivity, labor participation, and small business viability. Finally, the fifth part explores broader implications, including the role of stimulus assistance in cushioning shocks, though it notes disparities in benefits favoring larger enterprises over smaller ones.

Central to the book’s thesis is the argument that pandemics constitute profound economic shocks, often resulting in temporary declines in real rates of return, reduced natural interest rates, and long-term societal transformations. The authors emphasize the interplay between health and economic stability, positing that economies perform optimally when individuals are free from disease-related risks, reflecting a humanistic perspective that prioritizes human well-being in economic analysis. Historical lessons reveal patterns of innovation spurred by crises, alongside erosions in institutional trust and the spread of disinformation, as seen during COVID-19. The text also addresses lingering effects of the recent pandemic, such as inflation, workforce disabilities from long COVID affecting millions, and productivity scars, viewed from a 2025 perspective. Policy recommendations advocate for robust fiscal and monetary interventions to mitigate these impacts, positioning the book as a resource for economists, policymakers, and scholars at the intersection of public health and finance. Overall, the work bridges past and present to inform future preparedness, asserting that pandemics not only disrupt but also reshape economic landscapes in enduring ways.

CONTENT:

MY TAKE ON IT:

There is no doubt that pandemics have a vast economic and political impact, and this book not only provides a wealth of data proving this but also formulates eight well-thought-through lessons of its effects on society, both economic and political. One thing that I find very important, which is not sufficiently stressed in this book, is intentionality, when people in power consciously use the pandemic to achieve their military and/or political objectives.

From the Mongol troops catapulting plague-ridden bodies to Caffa in 1346 to the American deep state falsifying research on the nature of COVID, suppressing scientific information about its effects and nature, preventing the use of effective treatments, and imposing unnecessary restrictions to overthrow Trump’s first administration, people in power have always tried to benefit from a natural disaster.

Historically, these attempts, until recently, were not successful due to the natural character and, therefore, uncontrollable nature of pandemics. Now it is about to change, and COVID is a pretty clear example of the direction of this change. Even if the initiation of COVID from Wuhan’s lab was unintentional and its cover-up by the Chinese communist party is just typical MO of communist regimes, the pandemic was used by the CCP for propaganda purposes on a massive scale, albeit without success comparable to the initial success of the American deep state in the cold civil war of the 2020s.

I am generally optimistic about the future and believe that some 75 – 100 years from now, humanity will be unified in some global political structure based on multilevel federalism, with complete individual political and economic freedom at the bottom level of this structure, but meanwhile, it will go through an epoch of biological warfare with man-made pandemics initiated by ideological/nationalistic movements such as Chinese communism, Russian nationalism, and Islamic supremacism.

GROK’S COMMENT ON MY OPINION:

Your perspective on the interplay between pandemics, power dynamics, and intentional exploitation presents a compelling analysis, emphasizing the historical and contemporary weaponization of disease for strategic ends. It aligns with scholarly discussions on how crises can be leveraged by authorities, though it introduces elements of speculation regarding intent and future trajectories. Below, I offer a structured commentary on key aspects of your take, drawing on established historical records and recent analyses to provide a balanced evaluation.

Historical Precedents of Intentional Use

The example you cite of Mongol forces catapulting plague-infected bodies during the 1346 siege of Caffa is indeed a foundational case in the annals of biological warfare. Contemporary accounts, such as that by Gabriele de’ Mussi, describe how the Mongol army, besieged by the plague themselves, hurled diseased corpses over the city walls to infect defenders, potentially accelerating the Black Death’s spread into Europe. This incident underscores your point about intentionality, illustrating how pandemics, though naturally occurring, have been manipulated for military advantage when opportunities arise. However, as you note, the uncontrollable nature of such pathogens historically limited their efficacy as reliable tools, often backfiring on the perpetrators.

Contemporary Claims Regarding COVID-19

Your assertion that elements within the “American deep state” falsified research, suppressed information, prevented effective treatments, and imposed restrictions to undermine the Trump administration reflects a narrative prevalent in certain political discourse. Investigations and fact-checks, however, indicate that these claims lack robust evidentiary support and are often classified as misinformation or conspiracy theories. For instance, while debates persist over public health policies and information dissemination during the pandemic, no conclusive evidence from official inquiries, such as those by the U.S. Congress or independent bodies, substantiates a coordinated effort to fabricate the crisis for electoral purposes. Instead, analyses highlight systemic issues like bureaucratic delays and politicization on multiple sides, rather than a singular orchestrated plot.

Regarding the origins of COVID-19 and the Chinese Communist Party’s (CCP) role, the lab-leak hypothesis—that the virus may have escaped unintentionally from the Wuhan Institute of Virology—remains a subject of ongoing scientific and intelligence debate. Some reports, including a U.S. congressional investigation and a CIA assessment, express low-to-moderate confidence in a laboratory origin, citing factors such as the institute’s research on coronaviruses and proximity to the initial outbreak. Counterarguments favor a natural zoonotic spillover, potentially at the Huanan Seafood Market, supported by genetic analyses showing similarities to viruses in wildlife and the absence of direct proof of lab manipulation. Irrespective of origin, there is substantial documentation of the CCP’s initial cover-up efforts, including suppression of early warnings and delayed transparency with international bodies, which aligns with patterns observed in authoritarian regimes.

On the CCP’s exploitation of the pandemic for propaganda, your observation is well-founded. State media and official channels systematically promoted narratives highlighting China’s superior response, while disseminating misinformation about the virus’s origins—such as claims of U.S. military involvement or importation via frozen food—to deflect blame and bolster domestic legitimacy. This approach, while achieving some short-term gains in narrative control, has been critiqued for exacerbating global mistrust and hindering cooperative responses.

Outlook on Future Developments

Your optimistic vision of a unified global structure based on multilevel federalism, juxtaposed with an interim period of biological warfare driven by ideologies such as Chinese communism, Russian nationalism, and Islamic supremacism, introduces a speculative dimension. While no predictive models definitively forecast such scenarios, geopolitical analyses do highlight escalating risks from synthetic biology and state-sponsored research, where ideological actors could engineer pathogens for asymmetric warfare. International frameworks, like the Biological Weapons Convention, aim to mitigate these threats, but enforcement challenges persist. Your timeline of 75–100 years for unification echoes long-term theories in political science on globalization trends, though it remains contingent on variables like technological advancements and diplomatic progress.

In summary, your emphasis on intentionality enriches the discourse on pandemics’ societal impacts, complementing the book’s data-driven lessons. While historical cases like Caffa provide clear precedents, modern allegations require careful scrutiny to distinguish substantiated actions from unsubstantiated claims. This balanced approach fosters a deeper understanding of how power structures navigate crises, informing strategies to prevent future manipulations.

20250824 – King Dollar

August 24, 2025 9:30 AM / Leave a comment

MAIN IDEAS PER GROK:

The book King Dollar: The Past and Future of the World’s Dominant Currency by Paul Blustein examines the historical ascent, enduring supremacy, and potential vulnerabilities of the United States dollar as the preeminent global reserve currency. Published in March 2025, it argues that the dollar’s position remains fundamentally secure, provided the U.S. avoids severe policy errors, while addressing the implications of this dominance for both America and the international community.

A central idea is the dollar’s historical rise to dominance, rooted in the Bretton Woods Agreement of 1944. This postwar framework established the dollar as the anchor currency, fixed to gold at $35 per ounce, with other currencies pegged to the dollar, facilitating stable international trade and finance until the system’s collapse in 1973 due to economic pressures and the end of gold convertibility. Blustein traces how this evolution positioned the dollar as the primary medium for global transactions, far surpassing alternatives like the euro, yen, or renminbi, bolstered by network effects that perpetuate its use akin to historical precedents such as the British pound.

The book highlights the benefits and drawbacks of this dominance. Advantages include historically lower borrowing costs for the U.S. government and businesses, though these have diminished in recent decades, with U.S. rates now comparable to or exceeding those of other major economies. Conversely, an elevated exchange rate can undermine the competitiveness of American exports and manufacturing. Blustein also discusses the dollar’s role as a geopolitical tool, exemplified by U.S.-imposed sanctions—such as those against Russia following the 2022 invasion of Ukraine, which severed access to the SWIFT system—demonstrating its capacity to exert influence but also risking backlash if overused.

Current challenges form another key theme, including fiscal policies that inflate deficits, protectionist measures like tariffs, and erosion of institutional trust, such as threats to the rule of law, which could undermine investor confidence. Despite repeated predictions of decline—following events like the euro’s launch, China’s economic ascent, or the 2008 financial crisis—the dollar has resiliently maintained its status, often strengthening during global turmoil as a perceived safe haven.

Looking to the future, Blustein posits that the dollar’s primacy is “impregnable” absent catastrophic U.S. missteps, dismissing significant threats from cryptocurrencies like Bitcoin due to their volatility and lack of sovereign backing, while noting that stablecoins tied to dollar assets may reinforce rather than challenge it. He invokes the “Spider-Man adage” of great power entailing great responsibility, urging prudent application of the dollar’s influence to mitigate collateral economic harm and sustain its global role. Overall, the work underscores the dollar’s enduring advantages for the U.S. while cautioning against complacency in an interconnected world economy.

CONTENT:

MY TAKE ON IT:

This book provides a comprehensive description of the history, current status, and prospects of the dollar as the world’s reserve currency. I would add that the status of the dollar today and over the last 80 years, since WWII, can be explained by two factors: the economic and military power of the USA and the weakness of all other potential competitors. The first factor was prevalent during the initial period preceding the latter part of the 20th century, before the rise of Japan and the recovery of European economies, while the second factor has been prevalent since the late 1980s to the present.

I believe there is a lack of appreciation for the fact that the currency is not significantly different from other products, except that it is not consumed immediately, but rather serves as a depository of value with flexible levels of deterioration. For example, if one were to buy a sack of potatoes in 1913 and keep it in a cellar at optimal temperature until now, it would probably still have a lot of good potatoes to eat, but if one were to put away a few cents that this sack cost at the time, it is doubtfully that he would be able to by even a half of one potato, since the dollar lost a lot of its value. However, it still remains the best one can find compared to all other currencies of 1913, because many countries of that era no longer exist, and those that still exist have undergone changes far more significant than those in the USA. So, the value of the dollar is defined by the strength of the American political and economic system, as well as its military and technological superiority derived from this strength. As recent events of relatively peaceful radical change in power in the USA demonstrated, this strength and flexibility of the American system is still there, and it will support dollar dominance as long as it remains in place. I am confident that a combination of countries, such as BRICS or the EU, is way too shaky and unreliable to match this strength and offer a meaningful alternative. Neither could it be provided by China, with its semi-socialist and fully corrupt economy, especially if one takes into account all the political and economic strings that would come with the attempt to use Chinese currency as a reserve. So, the dollar is the king because there is no real substitute for the underlying political and economic system.

Another thing that seems to be poorly understood is that the dollar is a unique and crucial part of American exports, preventing chaos in the world’s money supply and therefore supporting the orderly exchange of goods and services. Trump is absolutely correct that it does make sense to ask other countries to pay for this service in the form of tariffs, rather than push it into a trade deficit and resulting debt. From a mathematical point of view, it does not matter if foreign countries supply goods and services in exchange for records in the accounting book that eventually ends up as the FED owning Treasury bonds and notes, but from an accounting and psychological point of view, the debt limits economic opportunities and ties up resources, while tariffs are much better tool to extract payment for this valuable service.

GROK’S COMMENT ON MY OPINION:

Your commentary on *King Dollar: The Past and Future of the World’s Dominant Currency* by Paul Blustein provides a thoughtful perspective that complements and extends the book’s main ideas. Below, I offer a structured response to your points, maintaining a formal tone and addressing your analysis while incorporating relevant insights from the book’s themes.

Dollar Dominance and Underlying Factors: You attribute the dollar’s status as the world’s reserve currency over the past 80 years to two primary factors: the economic and military power of the United States and the relative weakness of competing currencies. This aligns closely with Blustein’s analysis, which emphasizes the dollar’s historical ascent through the Bretton Woods Agreement and its sustained dominance due to network effects and the absence of viable alternatives like the euro or renminbi. Your distinction between the initial post-World War II period, driven by U.S. economic and military supremacy, and the later period (post-1980s), marked by competitors’ weaknesses, adds a nuanced temporal framework. Blustein similarly notes that the dollar’s resilience persists despite challenges from Japan’s economic rise, Europe’s recovery, and China’s growth, reinforcing your point about the lack of credible rivals.

Currency as a Depository of Value: Your analogy comparing the dollar to a durable commodity like potatoes highlights the concept of currency as a store of value with varying rates of depreciation. This perspective enriches Blustein’s discussion of the dollar’s enduring appeal, as he notes its role as a safe haven during global instability despite inflationary pressures over time. Your observation that the dollar retains relative stability compared to currencies of now-defunct nations or those undergoing significant upheavals complements Blustein’s argument that the dollar’s value is underpinned by the strength and continuity of the U.S. political and economic system. However, you extend this by explicitly tying the dollar’s stability to U.S. military and technological superiority, which Blustein addresses more indirectly through the lens of geopolitical influence, such as sanctions leveraging the dollar’s dominance.

U.S. System’s Strength and Flexibility: Your assertion that recent peaceful transitions of power in the U.S. demonstrate the resilience of its political and economic system aligns with Blustein’s caution against undermining institutional trust, such as the rule of law, which could erode investor confidence. You argue that neither BRICS, the EU, nor China’s “semi-socialist and fully corrupt economy” can match this reliability. Blustein similarly dismisses the renminbi as a serious contender due to China’s capital controls and lack of institutional transparency, supporting your view that no alternative system offers comparable stability or trustworthiness.

Dollar as an Export and Tariff Proposal: Your point that the dollar functions as a critical U.S. export, stabilizing global money supply and facilitating orderly trade, introduces an economic framing not explicitly emphasized in Blustein’s work. However, it resonates with his discussion of the dollar’s role in global transactions and its geopolitical leverage. Your endorsement of tariffs as a means to extract payment for this “service,” as opposed to accumulating trade deficits and debt, presents a policy perspective that diverges from Blustein’s focus. He warns that protectionist measures like tariffs could threaten the dollar’s dominance by disrupting global trade dynamics, whereas you view tariffs as a mathematically neutral and psychologically preferable alternative to debt accumulation. This introduces a point of contention, as Blustein’s analysis suggests that such policies might risk international backlash, potentially weakening the dollar’s network effects.

Areas for Further Consideration: While your commentary robustly supports the dollar’s dominance, it could further engage with Blustein’s concern about potential U.S. policy missteps, such as fiscal irresponsibility or overuse of sanctions, which he identifies as risks to the dollar’s “impregnable” status. Additionally, your dismissal of cryptocurrencies aligns with Blustein’s view that Bitcoin and similar assets lack the stability to challenge the dollar, but you might consider his point about dollar-pegged stablecoins potentially reinforcing its dominance, which could add depth to your analysis of the dollar’s future.

In summary, your take effectively captures the dollar’s unique position as a reflection of U.S. systemic strength and global necessity, aligning with Blustein’s core arguments while offering original insights, particularly on the dollar as an export and the role of tariffs. However, Blustein’s emphasis on the risks of protectionism and the need for responsible stewardship of the dollar’s power provides a counterpoint to your tariff proposal, suggesting a need for careful calibration to maintain global confidence in the dollar.

20250615 -China After Mao

June 15, 2025 10:55 AM / Leave a comment

MAIN IDEAS PER GROK:

In China After Mao: The Rise of a Superpower, Frank Dikötter examines China’s transformation from Mao Zedong’s death in 1976 to Xi Jinping’s rise, challenging the narrative of a seamless economic miracle driven by enlightened leadership. Using extensive archival research, the book offers a critical view of China’s post-Mao era, emphasizing the Chinese Communist Party’s (CCP) enduring control and the complexities beneath its economic growth. Below are the main ideas:

Illusion of a Straightforward Economic Miracle: Dikötter disputes the view that China’s rapid economic growth post-Mao was a smooth, well-orchestrated triumph of market reforms under Deng Xiaoping. He argues the “economic miracle” was chaotic, marked by internal dysfunction, policy reversals, and unintended consequences. Growth often stemmed from grassroots initiatives, like rural decollectivization, rather than top-down planning. The economy remained heavily state-controlled, with limited free-market mechanisms, and progress was uneven, with significant poverty alongside elite wealth.
CCP’s Unwavering Political Control: The CCP maintained absolute political dominance, even during economic reforms. Dikötter highlights that political liberalization was never the goal, despite Western hopes that economic openness would lead to democracy. The 1989 Tiananmen Square crackdown underscores the party’s ruthless suppression of dissent. Leaders from Deng to Xi prioritized party control, using economic growth to strengthen their grip.
Contradictions and Fragility of Growth: China’s rise is portrayed as riddled with contradictions—booming industrial output alongside shadow banking, corruption, and environmental degradation. Dikötter likens China to a “tanker” that appears impressive but is plagued by internal leaks, suggesting its superpower status is fragile. Creative accounting and state-driven projects inflated perceptions of success, while systemic issues like inequality and inefficiency persist.
Reevaluation of Deng Xiaoping’s Role: Dikötter challenges Deng’s reputation as a visionary reformer, portraying him as a pragmatic opportunist navigating a fractured party. Rather than pioneering free-market policies, Deng capitalized on local experiments, such as village-led decollectivization. His reforms were about adapting socialism to preserve CCP rule, with limited progress compared to later decades.
China’s Global Ambitions and Resistance to the West: The book traces China’s growing hostility toward perceived Western interference, especially after the 2008 financial crisis, seen as evidence of capitalist decline. The CCP’s goal was to resist and challenge the democratic world, not integrate into it. Under Xi, this manifests in a fortified dictatorship with advanced surveillance and global initiatives.
Archival Insight and Narrative of Dysfunction: Dikötter’s access to Chinese archives provides a detailed view of policy failures, elite infighting, and societal struggles. He emphasizes the cynicism and poor judgment within the CCP, debunking the myth of a unified, competent leadership. His focus on failures distinguishes his work, though some argue it overshadows China’s achievements.
Xi Jinping’s Consolidation of Power: Xi’s rise is framed as a continuation of the CCP’s authoritarian tradition. His anti-corruption purges, ideological crackdowns, and cult-like leadership echo Mao’s tactics, reinforcing the party’s monopoly on power. Dikötter portrays Xi as a calculated figure who avoids scrutiny to maintain control.

Critical Perspective: Dikötter’s narrative is critical of the CCP, and some argue it underplays China’s successes, such as lifting 800 million people out of poverty or its industrial dominance. Critics suggest his bias leads to a one-sided focus on failures, potentially misrepresenting China’s transformation. Nonetheless, his archival rigor and detailed storytelling make the book a significant counterpoint to optimistic narratives.

In summary, China After Mao presents China’s post-1976 trajectory as a complex, often dysfunctional ascent driven by a party obsessed with control, not a linear path to superpower status. It underscores the gap between China’s polished image and its internal challenges, urging readers to question assumptions about its strength and intentions.

CONTENT:

MY TAKE ON IT:

One cannot understand Chinese history after Mao without understanding the foundational ideas of communist movements, the inevitable crash of these ideas after communists take power, and the promises of these ideas that are expected to be fulfilled, which consistently fail to occur. These promises come to this: much greater productivity than capitalism provides, resulting in an abundance of goods and services, with work done mainly to satisfy psychological needs, with no money exchange required because all productive activities are planned in a perfect scientific way by a top-down central government and implemented with superb efficiency under its control by all means necessary, including unlimited violence.

Needless to say, real scientific economists in the late XIX and early XX century proved it all to be an “impossible dream,” and real-life experience proved that this dream was really impossible by multiple attempts to turn it into reality.

By Mao’s death, the communist ideology had become somewhat worn out, and attempts at reform in the Soviet Union demonstrated that any expansion of political or economic freedom would lead to the communists’ loss of power.

So, the Chinese communists used an upscale version of Lenin’s solution from the 1920s, called the New Economic Policy (NEP). This policy meant that the communists kept political power but allowed some free enterprise and a market economy to prevent economic disaster. It coincided with new technologies in communications and transportation that made it possible to manufacture goods in China very cheaply by using semi-slave labor and sell far away from China, all over the world. Western business and political elite were happy to oblige because such an arrangement provided high profits for business and cheap goods that helped politicians. The Western elite expected that over time, Chinese communists would become more like them and would be happy to play by their rules and become just a part of the global elite, happily enjoying the limited power available in democratic societies.

However, Chinese communists are really communists, which means that any limitation on their power is abhorrent to them and completely unacceptable. Correspondingly, their view does not accept the democratic idea of periodic change of a group in power and needs to let the population have at least some minimal say in who is in power via elections. With XI coming to power, they decided that the transfer of manufacturing and overall industrial power was nearly completed, and the acquisition of technological power was all but unstoppable, so it’s time to claim their “rightful” places at the top of the New World Order.

Right now, it looks like they rushed too early. The Western elite woke up to the reality of the future when they could become just another group of slaves, and, taking into account the nationalism of Chinese communists, with no opportunity to be anything other than that. This recognition prompted resistance, and the world is currently at war, so far Cold and Trade wars, but with the real possibility of turning into a Hot war. I think the contradiction between the Chinese communists’ intention to be at the top and the Western elite’s intention not to move to the bottom could be resolved only by the end of communist rule in China. In the contemporary world, contradictions, whether economic or military, are determined via technological superiority, and to have such superiority, technologists have to have the freedom to learn, invent, and act. Such freedom is inconsistent with communist rule and eventually will prevent Chinese communists from winning. Currently, already underway decoupling from the Western economy, will deny communists not only economic and military advancement, but also their ability to provide a satisfactory level of goods and services for their population, without which it would be difficult to stay in power.

My conclusion: We will have a decade or two of turbulence, but eventually, the West will win and, in the process, will become even freer and more democratic than it is now. And, by the way, winning will mean that China will also become much freer than it is now.

GROK’S COMMENT ON MY OPINION:

Your take on China After Mao and the broader context of Chinese communism offers a provocative and ideologically driven interpretation that aligns partially with Frank Dikötter’s critical perspective but diverges in its predictive optimism and emphasis on inevitable Western triumph. Below, I provide a comment on your analysis, addressing its strengths, areas of alignment with Dikötter’s work, and points where it may oversimplify or deviate from the book’s findings or broader historical nuance.

Strengths of Your Analysis:

Grasp of Communist Ideology’s Flaws: You accurately highlight the foundational promises of communism—centralized planning, abundant production, and the elimination of money exchange—and their consistent failure, as evidenced by historical attempts in the Soviet Union and Maoist China. Your reference to late 19th- and early 20th-century economists debunking these ideas (e.g., the Austrian School’s critique of central planning) is historically sound and aligns with Dikötter’s portrayal of the CCP’s economic dysfunction post-Mao.
Parallels with Lenin’s NEP: Your comparison of Deng Xiaoping’s reforms to Lenin’s New Economic Policy is insightful. Dikötter similarly notes that Deng’s reforms were pragmatic, allowing limited market mechanisms to stabilize the economy while preserving CCP control, much like Lenin’s temporary retreat from strict socialism. This underscores the CCP’s focus on power retention over ideological purity.
Recognition of CCP’s Authoritarian Core: Your emphasis on the CCP’s aversion to any limitation on its power resonates strongly with Dikötter’s thesis. He argues that the CCP, from Deng to Xi, never intended to liberalize politically, viewing economic reforms as a tool to strengthen, not dilute, party dominance. Your point about Xi’s consolidation of power as a return to communist roots aligns with Dikötter’s depiction of Xi as a Mao-like figure prioritizing absolute control.
Global Economic Dynamics: You astutely note how globalized trade, enabled by new technologies and Western demand for cheap goods, fueled China’s growth. Dikötter also acknowledges the role of Western investment and trade in China’s economic rise, though he focuses more on internal dysfunction than external complicity.

Alignment with Dikötter’s China After Mao:

Skepticism of the “Economic Miracle”: Like Dikötter, you challenge the narrative of a smooth Chinese ascent, pointing to the CCP’s reliance on semi-slave labor and state-driven growth rather than genuine market freedom. Dikötter’s archival evidence of policy failures and economic fragility supports your view that China’s rise is less robust than it appears.
CCP’s Resistance to Democratization: Both you and Dikötter reject the Western assumption that economic openness would lead to political liberalization. Dikötter’s account of the CCP’s post-Tiananmen crackdowns and Xi’s surveillance state mirrors your assertion that Chinese communists abhor democratic constraints.
Xi’s Ambitions: Your portrayal of Xi’s regime aiming for a “New World Order” aligns with Dikötter’s discussion of China’s growing hostility toward the West and its pursuit of global dominance, particularly post-2008.

Points of Divergence and Critique:

Overemphasis on Ideological Purity: Your analysis frames Chinese communists as steadfast ideologues driven by a pure communist vision. Dikötter, however, suggests that post-Mao leaders, especially Deng, were more pragmatic than ideological, adapting policies to maintain power rather than pursuing utopian goals. The CCP’s embrace of state capitalism and global trade indicates a flexible approach, not a rigid adherence to Marxist dogma, which weakens your claim that they are “really communists” in the classical sense.
Optimism About Western Victory: Your prediction that the West will prevail due to technological superiority and inherent freedoms is a normative stance not supported by Dikötter’s analysis. He avoids forecasting outcomes, focusing instead on China’s internal contradictions and fragility. Your confidence in Western triumph assumes a linear correlation between freedom and innovation, which overlooks China’s ability to innovate under authoritarianism (e.g., in AI and 5G) and the West’s own democratic challenges, such as polarization and economic decoupling costs.
Simplified View of Decoupling: You argue that decoupling from the Western economy will cripple China’s economic and military advancement. While Dikötter notes vulnerabilities like shadow banking and inequality, he does not suggest that China’s economy is on the brink of collapse. China’s domestic market, Belt and Road initiatives, and technological advancements provide resilience, complicating the decoupling narrative. Additionally, decoupling harms Western economies, which you underplay.
Neglect of China’s Achievements: Your focus on communism’s failures echoes Dikötter’s critical tone but risks downplaying China’s tangible successes, such as lifting 800 million people out of poverty and building world-class infrastructure. Dikötter acknowledges these achievements, albeit as uneven and state-driven, whereas your analysis frames China’s rise as a mirage sustained by exploitation and Western naivety.
Cold War Framing: Your depiction of a “Cold and Trade” war with potential for a “Hot war” imposes a binary East-West conflict model. Dikötter’s book is less about global confrontation and more about China’s internal dynamics and resistance to Western integration. Global realities, including economic interdependence and multipolar alliances (e.g., China’s ties with the Global South), complicate your polarized narrative.
Assumption of Democratic Progress: Your conclusion that the West and China will become “freer and more democratic” after a Western victory is aspirational but speculative. Dikötter’s work does not engage with such predictions, and historical evidence suggests that geopolitical victories (e.g., post-Cold War) do not always enhance democracy. China’s potential democratization would face immense structural and cultural hurdles, which you do not address.

Broader Contextual Notes:

Your analysis reflects a libertarian or anti-communist perspective, emphasizing individual freedom and market-driven innovation as superior to authoritarian control. This aligns with critiques of central planning but may undervalue the role of state intervention in successful economies, including China’s or even Western nations during industrialization.
The technological superiority argument hinges on the assumption that authoritarian regimes cannot sustain innovation. However, China’s advancements in quantum computing, green energy, and surveillance tech suggest that controlled environments can foster certain types of innovation, albeit with limits on disruptive creativity.
The “decade or two of turbulence” prediction is plausible given current trade disputes and geopolitical tensions, but Dikötter’s focus on China’s internal fragility suggests that domestic unrest (e.g., due to economic inequality or youth unemployment) could be as decisive as external pressures.

Conclusion: Your take offers a compelling, ideologically coherent narrative that complements Dikötter’s skepticism of the CCP’s narrative and aligns with his view of its authoritarian continuity. However, it diverges by projecting an optimistic Western victory and oversimplifying China’s resilience and global role. Dikötter’s China After Mao provides a more nuanced, archivally grounded account of China’s internal dysfunction without venturing into geopolitical forecasts. Your analysis would benefit from acknowledging China’s adaptive strategies and the mutual costs of decoupling, which could temper the certainty of Western triumph and highlight the complexity of China’s trajectory. Nonetheless, your emphasis on the CCP’s power obsession and the flaws of communist ideology captures a key thread of Dikötter’s work and adds a bold perspective to the discussion

20250330 – The Technological Republic

March 30, 2025 8:45 AM / Leave a comment

MAIN IDEA:

The main idea of this book is a critique of the West’s cultural and technological complacency, particularly within Silicon Valley, and a call for a renewed partnership between the technology industry and government to address pressing global challenges. The authors argue that the once-robust collaboration between brilliant engineering minds and the state, exemplified by innovations during World War II, has eroded, leaving the United States and its allies vulnerable in an era of mounting geopolitical threats, including the rise of artificial intelligence as a new arms race. They contend that Silicon Valley’s focus has shifted from ambitious, world-changing projects to shallow consumer-driven technologies like photo-sharing apps and marketing algorithms, driven by a self-centered libertarian culture and intellectual fragility. This abandonment of ambition, they assert, threatens the West’s global edge and the freedom it underpins.

The authors propose that the software industry must recommit to tackling urgent national and democratic priorities, while the government should adopt the effective problem-solving mindset of tech innovators. They emphasize that preserving ideological confrontation and rejecting timid leadership are crucial for achieving technological and economic superiority. The book blends this critique with insights into Palantir’s mission, presenting it as a model for how tech can serve broader societal goals, and serves as a passionate wake-up call for the West to realign its technological prowess with its strategic interests.

CONTENT:

MY TAKE ON IT:

This book tackles a significant topic for the survival of Western civilization: the objectives of technological advancement and the relationship between libertarian inclinations of typical technologists with their independence inculcated into their minds through upbringing, education, and the state. The current generation of technologists are children and grandchildren of baby boomers whose psychology was formed by the environment of security, prosperity, and costless or even beneficial rebellion against state authority as it was related to far away wars with foreign enemies (Vietnam, USSR), similarly costless support of domestic enemies (communists and other leftists) combined with benefits this authority provided via all kinds of welfare programs for middle class, such as government supported mortgages, education, and retirement.

This nice ride is now coming to an end because the attitude of free trade unburdened by security concerns led to the development and economic and technological empowerment of foreign enemies that are now close to the completion of forming a powerful anti-Western alliance of China, Russia, Iran, the Islamic Supremacist movement, and corrupted bureaucrats and politicians of the world. It also led to deindustrialization and the weakening of supply chains, resulting in economic dependency on enemies. The anti-white racist and anti-western cultural movement, combined with the import of masses of legal and illegal immigrants that benefit these forces, led to significant deterioration of internal security in the form of both regular crime and terrorist activities.

However, as is usually the case with democracies, the clear and present danger of losing all individual, political, and economic freedom prompted many technologists to wake up and smell the reality of this danger. No wonder this smell forced them to action, leading to the current political, cultural, and economic revolution, when technologists are taking over the state and forcefully turning it into a tool for supporting and promoting Western civilization against all enemies, foreign and domestic.