Suppose Elon Musk proposed to cover a chunk of Nevada’s Mojave desert with a gargantuan solar project, then build a cross-country ultra-high voltage transmission line to bring that power to datacenters in Virginia and communities in Florida.
No one but die-hard Elon fanboys would take it seriously. The legal barriers of dozens of jurisdictions plus years of litigation and restraining orders would be piled onto nearly insuperable challenges of financing, engineering, and logistics. Not to mention the need to train thousands of people in industrial skills and technologies that are not exactly mainstream in America. It would be easier to send humans back to the moon.
You may already have guessed where this is going, but bear with me. There is a point.
In 2019, China inaugurated a 1.1-megavolt transmission line to carry power from the Talatan Solar Park, located in northwest China, 2,000 miles across the country to grids serving cities in the southeast.
Linemen for State Grid
China has dozens of these ultra-high voltage transmission lines, in fact around 90% of the world’s total.
In 2011, Talatan Solar Park was opened, and today covers 162 square miles of the Tibetan Plateau. It can deliver in excess of 15GW of clean power, and is augmented by nearby wind farms.
162 square miles of solar atop the world’s highest plateau – the Talatan Solar Park
Projects like these seem almost commonplace in China.
Chinese researchers recently published proposals to mitigate the shockwave that results when an experimental 600 km/h (360-mph) maglev train exits a tunnel at speed. Interesting problem to have! And something to think about, when you operate 30,000 miles (and counting) of high-speed rail:
The acceleration is instant, but eerily silent. One moment you’re sitting in what feels like an airplane cabin, the next you’re watching the digital speedometer climb past 300 km/h [180 mph], and you can barely feel it. Welcome to the Shanghai Maglev, where magnetic levitation makes 430 km/h [260 mph] feel like floating on air.
From civil infrastructure and advanced manufacturing, to life sciences and innovative pharmaceuticals, to brand new mega-cities, the scale of both social change and economic development in China, during 30 years of ongoing economic transformation, can be hard to comprehend. Large parts of China today would be unrecognizable to a countryman from the year 2000, and futuristic-seeming to someone from even a developed nation in 2025.
The Chinese economy is run by planners, engineers, and builders; our American economy by financiers, hedge funds, and lawyers. The path to business success in China is to do a better job delivering a working product to a paying customer, then plow back every yuan of profit you can wring out of it; in America, it’s often to sell the best story to Wall Street analysts, then generate lots of cash to buy back shares. For thirty years we’ve been telling China they’re doing it all wrong and need to be more like us, and for thirty years they’re ignored our free advice. Both countries have been successful, yet both have a rocky road ahead. But only one has lifted 800 million human beings out of dire poverty and built fleets of container ships to carry its floods of low-cost goods, from toys to glitzy cars, around the world.
Gross oversimplification, I know. But it’s not to bash America or glorify a rival. There is a hard kernel of truth in this – yet many people continue to ignore or deny it. And this is the point.
I believe America’s most dangerous enemy is our own stubborn habit of self-delusion. And our chief delusion, it seems to me, is our certainty that we are still the world’s role model, politically, economically, and socially. Our governance sets the bar for self-rule, our culture for popular taste, and our model of capitalism is the sine qua non. In short, there is nothing about our system we should want to change.
Very comforting. Like fentanyl. And as dangerous.
It’s delusional to think that China has not created a real capitalist market economy. Her domestic markets are more market than many Western capitalists have stomach for, markets with cut-throat competition, relentless innovation, and brutal price erosion. As capitalists, the Chinese do what capitalists have always done, which is to exploit foreign markets in search of growth. Yet leaders of Western capitalist economies complain that China unfairly “exports her over-capacity”, to the detriment of other nations – which might be true, but ironically reads more like Karl Marx. It was Marxists, you may recall, who long argued that capitalism’s unending need for growth and new markets was the chief cause of imperialism and war.
It’s a dangerous mistake to think that China is the chief villain in the long decline of American manufacturing. American industrial firms were shuttering factories and moving jobs out of what would become the Rust Belt, when China was still in the throes of Mao’s Cultural Revolution. The jobs went to the union-hostile South, then to maquiladoras across the border, to Bangladesh, Indonesia, and Malaysia, when China was still weaning herself from collective farms. I’m old enough to remember when electronics assembly meant rows of low-paid women laboriously cutting and soldering electrical component wires. China was just emerging from widespread food rationing when those jobs were being replaced by machines. Today, the descendants of those machines can be found in the latest factories where humans do little more than approve orders and guard the gates.
When you run a business, especially under the pressure of Wall Street, any job is a potential target for cost reduction – and those millions of American manufacturing jobs were juicy targets. They were always going to be on the chopping block, if not through low-cost labor substitution, then through automation. It’s delusional to think otherwise.
It may be a monumental irony that a communist party built and runs China’s uber-capitalism, but there should be lessons in it as well – although they won’t occur to anyone who thinks of American Exceptionalism like a book from the Gospel: Matthew, Mark, Luke, John…Friedman.
We have a genius for building elaborate economic theories, then dismissing evidence that calls them into question or complaining that we aren’t sufficiently orthodox. Theorists at the beginning of the twentieth century held as an article of faith that Adam Smith’s ‘invisible hand’ would eventually lead to a better place, if only governments would stay out of economic affairs and wait patiently for it to work. They continued preaching even as the Great Depression felled economies around the world. Eventually, it all began to sound too much like a biologist claiming that the invisible hand of natural selection would one day solve the problem of communicable disease, if only governments would stop meddling in public health. And don’t think there weren’t people who preached that!
Since the Industrial Revolution, capitalism everywhere has been a work in progress, even if that progress came in fits and starts. From innovations like national currencies, limited liability companies, and intellectual property monopolies, to bank deposit insurance and a managed money supply, to tax subsidies, tariffs, and trade wars, it’s difficult to argue that capitalism is any one thing. The world has had markets and capital for as long as there has been enough enterprise to support trade and credit, with a relatively few notable exceptions, such as China under Mao or the Soviet Union, where markets and private capital were nearly completely suppressed. And while we know why these ill-fated experiments failed, we know also from long and sometimes calamitous experience that Smith’s invisible hand is far from being the infallible hand.
There is no human construct that does not require maintenance and management. Neither democracy nor capitalism is an exception to this. And by management, I include the essence of the scientific method: observe, interpret, test, learn – and repeat. This is the nature of China’s economic and social management. It is how we in the West have often responded in times of necessity, whether to a bout of inflation or a banking crisis. It is how Deng Xiaoping launched China on it’s way, a half-century ago, declaring to ideologues who resisted reform: “I don’t care if the cat is white or black, so long as it catches mice.”
Innovation is not just for Big Tech. Economic systems are human constructs too, and innovations must be applied to the systems themselves, over and over. That’s how progress is made, and it’s how China has succeeded.
But the enemy of innovation is prejudice, whether ingrained bigotry or zealous ideology, and here our own political system is now working against us.
The seat of the nation’s lawmaking, the US House, has become a hotbed of bigotry and ideology. But the problem is more structural than it is political. Decades of gerrymandering have left barely a tenth of House seats competitive, meaning that nine-tenths are almost permanently in the hands of one party or another. Meaning 90% of House seats are decided in primary elections, where voter turnout is driven more by emotion – prejudice, fear, outrage – than by informed choice. And this pattern repeats in state legislatures.
Social media coupled with louder and more extreme political actors of course amplifies the prejudice among susceptible voters, which drives the vicious cycle. Even the Senate is infected. And the consequence is that centrist lawmaking is not just extremely difficult, centrists themselves are attacked from both political wings, if not primaried right out of their jobs.
Truly practical policy, policy that can benefit the nation as a nation, is almost always centrist. Not ideological. The process of observe – interpret – test – learn requires clear thinking and a respect for facts. The fire and smoke of radical rabble-rousing destroys that process. But it does win primaries.
The US Congress now perfectly embodies that most dangerous enemy, delusion. So do many, if not most, state legislatures. And we’ve done it to ourselves, decade by decade gaming our political system to its most extreme logical outcome. If this were a case of arson, social media would be the accelerant, but the structure of our democracy would be the kindling.
Realistically, anything this self-perpetuating is probably at a dead end, where the only way out may be a massive catastrophe. Such as default on some portion of $38 trillion in US debt. Or engineered inflation destroying the savings of older Americans and the incomes of younger wage-earners. Or the collapse of a subterranean part of the shadow banking system, pulling down everything else. Or a shooting war that exhausts stocks of conventional munitions and goes nuclear.
The outcome of such a crisis is something no one can predict. So maybe it’s worth thinking about whether we want to wait for it. Because the better way out of a dead end is through that much-derided center.
That Much-derided Center
Suppose Elon Musk proposed to cover a chunk of Nevada’s Mojave desert with a gargantuan solar project, then build a cross-country ultra-high voltage transmission line to bring that power to datacenters in Virginia and communities in Florida.
No one but die-hard Elon fanboys would take it seriously. The legal barriers of dozens of jurisdictions plus years of litigation and restraining orders would be piled onto nearly insuperable challenges of financing, engineering, and logistics. Not to mention the need to train thousands of people in industrial skills and technologies that are not exactly mainstream in America. It would be easier to send humans back to the moon.
You may already have guessed where this is going, but bear with me. There is a point.
In 2019, China inaugurated a 1.1-megavolt transmission line to carry power from the Talatan Solar Park, located in northwest China, 2,000 miles across the country to grids serving cities in the southeast.
China has dozens of these ultra-high voltage transmission lines, in fact around 90% of the world’s total.
In 2011, Talatan Solar Park was opened, and today covers 162 square miles of the Tibetan Plateau. It can deliver in excess of 15GW of clean power, and is augmented by nearby wind farms.
Projects like these seem almost commonplace in China.
Chinese researchers recently published proposals to mitigate the shockwave that results when an experimental 600 km/h (360-mph) maglev train exits a tunnel at speed. Interesting problem to have! And something to think about, when you operate 30,000 miles (and counting) of high-speed rail:
From civil infrastructure and advanced manufacturing, to life sciences and innovative pharmaceuticals, to brand new mega-cities, the scale of both social change and economic development in China, during 30 years of ongoing economic transformation, can be hard to comprehend. Large parts of China today would be unrecognizable to a countryman from the year 2000, and futuristic-seeming to someone from even a developed nation in 2025.
The Chinese economy is run by planners, engineers, and builders; our American economy by financiers, hedge funds, and lawyers. The path to business success in China is to do a better job delivering a working product to a paying customer, then plow back every yuan of profit you can wring out of it; in America, it’s often to sell the best story to Wall Street analysts, then generate lots of cash to buy back shares. For thirty years we’ve been telling China they’re doing it all wrong and need to be more like us, and for thirty years they’re ignored our free advice. Both countries have been successful, yet both have a rocky road ahead. But only one has lifted 800 million human beings out of dire poverty and built fleets of container ships to carry its floods of low-cost goods, from toys to glitzy cars, around the world.
Gross oversimplification, I know. But it’s not to bash America or glorify a rival. There is a hard kernel of truth in this – yet many people continue to ignore or deny it. And this is the point.
I believe America’s most dangerous enemy is our own stubborn habit of self-delusion. And our chief delusion, it seems to me, is our certainty that we are still the world’s role model, politically, economically, and socially. Our governance sets the bar for self-rule, our culture for popular taste, and our model of capitalism is the sine qua non. In short, there is nothing about our system we should want to change.
Very comforting. Like fentanyl. And as dangerous.
It’s delusional to think that China has not created a real capitalist market economy. Her domestic markets are more market than many Western capitalists have stomach for, markets with cut-throat competition, relentless innovation, and brutal price erosion. As capitalists, the Chinese do what capitalists have always done, which is to exploit foreign markets in search of growth. Yet leaders of Western capitalist economies complain that China unfairly “exports her over-capacity”, to the detriment of other nations – which might be true, but ironically reads more like Karl Marx. It was Marxists, you may recall, who long argued that capitalism’s unending need for growth and new markets was the chief cause of imperialism and war.
It’s a dangerous mistake to think that China is the chief villain in the long decline of American manufacturing. American industrial firms were shuttering factories and moving jobs out of what would become the Rust Belt, when China was still in the throes of Mao’s Cultural Revolution. The jobs went to the union-hostile South, then to maquiladoras across the border, to Bangladesh, Indonesia, and Malaysia, when China was still weaning herself from collective farms. I’m old enough to remember when electronics assembly meant rows of low-paid women laboriously cutting and soldering electrical component wires. China was just emerging from widespread food rationing when those jobs were being replaced by machines. Today, the descendants of those machines can be found in the latest factories where humans do little more than approve orders and guard the gates.
When you run a business, especially under the pressure of Wall Street, any job is a potential target for cost reduction – and those millions of American manufacturing jobs were juicy targets. They were always going to be on the chopping block, if not through low-cost labor substitution, then through automation. It’s delusional to think otherwise.
It may be a monumental irony that a communist party built and runs China’s uber-capitalism, but there should be lessons in it as well – although they won’t occur to anyone who thinks of American Exceptionalism like a book from the Gospel: Matthew, Mark, Luke, John…Friedman.
We have a genius for building elaborate economic theories, then dismissing evidence that calls them into question or complaining that we aren’t sufficiently orthodox. Theorists at the beginning of the twentieth century held as an article of faith that Adam Smith’s ‘invisible hand’ would eventually lead to a better place, if only governments would stay out of economic affairs and wait patiently for it to work. They continued preaching even as the Great Depression felled economies around the world. Eventually, it all began to sound too much like a biologist claiming that the invisible hand of natural selection would one day solve the problem of communicable disease, if only governments would stop meddling in public health. And don’t think there weren’t people who preached that!
Since the Industrial Revolution, capitalism everywhere has been a work in progress, even if that progress came in fits and starts. From innovations like national currencies, limited liability companies, and intellectual property monopolies, to bank deposit insurance and a managed money supply, to tax subsidies, tariffs, and trade wars, it’s difficult to argue that capitalism is any one thing. The world has had markets and capital for as long as there has been enough enterprise to support trade and credit, with a relatively few notable exceptions, such as China under Mao or the Soviet Union, where markets and private capital were nearly completely suppressed. And while we know why these ill-fated experiments failed, we know also from long and sometimes calamitous experience that Smith’s invisible hand is far from being the infallible hand.
There is no human construct that does not require maintenance and management. Neither democracy nor capitalism is an exception to this. And by management, I include the essence of the scientific method: observe, interpret, test, learn – and repeat. This is the nature of China’s economic and social management. It is how we in the West have often responded in times of necessity, whether to a bout of inflation or a banking crisis. It is how Deng Xiaoping launched China on it’s way, a half-century ago, declaring to ideologues who resisted reform: “I don’t care if the cat is white or black, so long as it catches mice.”
Innovation is not just for Big Tech. Economic systems are human constructs too, and innovations must be applied to the systems themselves, over and over. That’s how progress is made, and it’s how China has succeeded.
But the enemy of innovation is prejudice, whether ingrained bigotry or zealous ideology, and here our own political system is now working against us.
The seat of the nation’s lawmaking, the US House, has become a hotbed of bigotry and ideology. But the problem is more structural than it is political. Decades of gerrymandering have left barely a tenth of House seats competitive, meaning that nine-tenths are almost permanently in the hands of one party or another. Meaning 90% of House seats are decided in primary elections, where voter turnout is driven more by emotion – prejudice, fear, outrage – than by informed choice. And this pattern repeats in state legislatures.
Social media coupled with louder and more extreme political actors of course amplifies the prejudice among susceptible voters, which drives the vicious cycle. Even the Senate is infected. And the consequence is that centrist lawmaking is not just extremely difficult, centrists themselves are attacked from both political wings, if not primaried right out of their jobs.
Truly practical policy, policy that can benefit the nation as a nation, is almost always centrist. Not ideological. The process of observe – interpret – test – learn requires clear thinking and a respect for facts. The fire and smoke of radical rabble-rousing destroys that process. But it does win primaries.
The US Congress now perfectly embodies that most dangerous enemy, delusion. So do many, if not most, state legislatures. And we’ve done it to ourselves, decade by decade gaming our political system to its most extreme logical outcome. If this were a case of arson, social media would be the accelerant, but the structure of our democracy would be the kindling.
Realistically, anything this self-perpetuating is probably at a dead end, where the only way out may be a massive catastrophe. Such as default on some portion of $38 trillion in US debt. Or engineered inflation destroying the savings of older Americans and the incomes of younger wage-earners. Or the collapse of a subterranean part of the shadow banking system, pulling down everything else. Or a shooting war that exhausts stocks of conventional munitions and goes nuclear.
The outcome of such a crisis is something no one can predict. So maybe it’s worth thinking about whether we want to wait for it. Because the better way out of a dead end is through that much-derided center.
Third political party, anyone?
Only, hold the primaries.
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About The Author
D M Smith