⚔ Are China and America destined for war?
Also: Which party is more pro-progress, Democrats or Republicans? ⤴
🚀 50% off sale for annual Faster, Please! subscriptions!
First things first! Between right now and tomorrow, October 20, all my wonderful free Faster, Please! subscribers can become annual paid subscribers at a monster 50% discount from the regular annual price. I think it’s a really great deal.
With a paid subscription, you get full and timely access to all my essays, podcasts, as well as the great 5 Quick Question Q&As with leading economists, technologists, policy analysts, and other smart people who also want to discover, create, invent, and build a better America and world. Click the big blue buttons for more details!
Melior Mundus
In This Issue
The Short Essay: Are China and America destined for war? Trade vs. the Thucydides Trap.
The Long Essay: Which party is more pro-progress, Democrats or Republicans?
Micro Reads: decarbonization and land; mercantilism and trade blocs; carbon capture; and more
Quote of the Issue
"Nothing hinders the progress of things, nothing sets such bounds to the intellect, so much as the excessive admiration for the ancients." - Bernard Le Bovier de Fontenelle
The Short Essay
⚔ Are China and America destined for war? Trade vs. the Thucydides Trap.
In the 2017 book Destined For War: Can America and China Escape Thucydides's Trap?, Harvard University political scientist Graham Allison warned about the significant potential for military conflict between the two countries. History suggests a tendency toward war when an existing great power is challenged by an emerging power. In Thucydides’ account of the Peloponnesian War, the ancient Athenian historian famously wrote that “it was the rise of Athens and the fear that this instilled in Sparta that made war inevitable.” Allison highlights 16 historical examples of this dynamic with an alarming 12 ending up in military conflict.
The baseline case against this scenario posits that the deep and unique economic ties between China and America make war so economically costly as to be highly unlikely. In 2018, Michael Cembalest, chairman of Market and Investment Strategy for J.P. Morgan Asset & Wealth Management, published this chart detailing those ties — trade, direct investment, central bank holdings — and supporting the thesis, with which he agreed:
But now Celembast is having his doubts. Yes, these two nations are still doing lots of business. He points out in a new research note that imports from China in 2021 reached $540 billion — near the pre-trade war peak in 2018 — and China still holds roughly $1 trillion of US government debt. But the sweeping restrictions issued by the Biden administration on selling semiconductors and chip-making equipment to China, Celembast concedes, don’t support a view that the Thucydides Trap can be avoided this time. From that note:
The Trump administration took steps against ZTE and Huawei but left open the possibility of future engagement, perhaps in exchange for Chinese cooperation in other geopolitical areas. The latest moves by the Biden administration appear to close those doors, and for a very long time. The scale and scope of these restrictions do appear to be unprecedented. While they only apply to a subset of high performance AI-related chips right now (such as those sold by NVIDIA which accounts for 95% of AI chip sales in China), the new chip performance benchmarks are being held constant. In other words, over time, more and more of the semiconductor market will be subject to these restrictions.
The current political reality in Congress is one of bipartisan alarm about China over everything — its military might, technological prowess, economic predation, and human rights record. The chip restrictions are strong evidence of the power of this perception. From Financial Times columnist Edward Luce:
The hit to China’s economy will be far bigger than the word “semiconductor” implies. Biden’s move draws on the premise that any advanced chip can be used by China’s military, including for nuclear weapon and hypersonic missile development. It is also meant to undercut China’s goal of dominating global artificial intelligence by 2030. But all such chips are dual use, which means that the US is now committed to blocking China in all kinds of civilian technologies that make up a modern economy. … The more imminent risk is that Biden’s gamble could prompt Xi Jinping, China’s president, to accelerate his timetable for Taiwan reunification. The island state is by far the world’s largest maker of high-end chips.
I don’t have a thesis about the Thucydides Trap. But I am concerned about potential hot war, including one that expands beyond a brief skirmish over Taiwan. As AEI scholar Hal Brands argues, “The United States may be planning for the wrong sort of war with China. A Sino-American conflict is likely to be long rather than short; it is likely to sprawl geographically rather than remain confined to the Taiwan Strait.”
The silver lining here is that the China threat could make it easier to promote pro-progress policies given the rise of an economically powerful and technologically adept rival. When America has accomplished big things in the past — the GI Bill, the National Highway System, the Apollo program — they were typically enabled by various special circumstances, such as national security or some crisis. The Great Depression, World War II, and the space race against the Soviet Union are obvious examples. (Journalist James Fallows gives an insightful elaboration in a 2015 talk to the Long Now Foundation.) Rising China would seem to qualify.
The Long Essay
⤴ Which party is more pro-progress, Democrats or Republicans?
For those who think America is a dysfunctional or even “failed” state, they might be surprised at how few of their countrymen want more political choice. Earlier this month, Gallup released a poll finding that 56 percent of respondents think Democrats and Republicans "do such a poor job that a third major party is needed." That’s down from a nearly two-decade high of 62 percent in January 2021 and matches the average 55 percent holding this view across Gallup's trend, since 2003.
So no big, new groundswell of support for a third party, though obviously there’s some level of long-simmering dissatisfaction. But maybe not much, really. As New York Times journalist Jane Coaston notes in a new episode of “The Argument” podcast, “Roughly three out of four independents still lean to one of the two major parties. Independents who lean towards a party also tend to back that party at the same rate as openly partisan voters.” So we like to gripe, but overall we keep gripping to the current system.
I was listening to that podcast because Coaston was interviewing third-party proponents Andrew Yang and David Jolly, both representing the new Forward Party. During the chat, Jolly, a former Republican member of Congress, made an interesting point about the dynamic of electoral dissatisfaction:
I often say, there are three lanes to this space. There are the “we should all get along,” I’ll say, no-labels space, which are Republicans and Democrats need to work better together — fantastic mission, aspirational. Let’s do it. The second lane is electoral reform. Can we open up primaries? Can we have ranked-choice voting? Can we have fusion voting, all of those procedural issues? And the third lane is the new party space. Why is a new party needed? Well, first, as we’ve established, you have a plurality of Americans who are actually looking for something other than the major parties. So within this broad movement, you need that third lane of a new party that can actually effectuate change.
It should be noted that the Forward Party doesn’t really yet seem to be for anything much. Asked about his ideal candidate, Yang said it would be “someone who just wants to make things better for their community, is all about results, solutions, policies, doesn’t demonize anyone.”
Forward Party or Faster, Please! Party
Maybe it should the Nice Party, then, though to be fair I should note that the Forward Party does have a platform, albeit one focused on process issues: implementing ranked-choice voting, non-partisan primaries, and independent redistricting commissions in every state. So based on that, the Forward Party is not the Faster, Please! party. Not a single mention of making America a multi-planetary civilization or generating exponential growth. (Look, if you start a new party and “planetary defense” isn’t in your platform, what are you even doing? The continued existence of humanity should be fairly uncontroversial.)
But that’s OK. I started this newsletter to project and push my pro-progress “Up Wing” ideas, but not with the assumption they would form the policy core of a third party. That, if for no other reason than the historic lack of success of third parties and the long road for electoral reform that might make such efforts more likely.
Which leaves us with the current two major parties. I find both falling far short of being strongly Up Wing, at least as I have defined it. It’s super frustrating. Of course, both have Up Wing and Down Wing attitudes and policy positions. But they don’t seem dominant.
Which party definitively says that we don’t have a climate change problem, we have a lack-of-abundant clean energy problem?
Which party definitively says we need a tax code that both pays the bills and minimizes the burden on investment and entrepreneurship?
Which party definitively says that half-century-old regulations make it too hard build?
Which party definitively says that rapid economic growth is a top national priority, that we should grow at least as fast in the future as we have in the past?
Again, there are pro-progress elements to both parties. There are both Ds and Rs who value immigrants, open trade, nuclear energy, housing reform, among other Up Wing issues. Back in August, I rated the Up Wing quality of various components of the Biden economic agenda: American Rescue Plan, Infrastructure Investment and Jobs Act, CHIPS and Science Act, Inflation Reduction Act, and energy permitting reform. My tally was Up Wing 3 (infrastructure, chips and science, permitting), Down Wing 1 (ARP), Up-Down 1 (IRA).
Had I done this during the Trump administration, I would have given Down Wing ratings to much if not all of the trade and immigration agenda. The Trump tax cuts would have received a mixed grade: I like the big reduction in the corporate tax rates, but not that the plan wasn’t paid for.
It’s not just policy that’s important, however, it’s attitude. I’ve frequently referenced and quoted Dutch futurist Frederick Polak when making a point about the importance of creating optimistic images of the future — and our culture’s frequent failure to do so. This Polak quote in particular:
The rise and fall of images of the future precedes or accompanies the rise and fall of cultures. The image of the future can act not only as a barometer, but as a regulative mechanism which alternately opens and shuts the dampers on the mighty blast-furnace of culture. It not only indicates alternative choices and possibilities, but actively promotes certain choices and in effect puts them to work in determining the future. A close examination of prevailing images, then, puts us in a position to forecast the probable future. Any culture which finds itself in the condition of our present culture, turning aside from its own heritage of positive visions of the future, or actively at work in changing these positive visions into negative ones, has no future.
What quadrant of future-thinking are you in?
In Polak’s book The Image of the Future, a core futurist text, he creates four categories of belief about the future, divided on two axes: things are improving/worsening; and people can/can't do something about the future. From that comes the "Polak Game” meant to help clarify views about the future:
The upper-right quadrant is the Up Wing quadrant. Which political party does that view best described? Lots of Democrats think the economy has been stagnant for a half century, while Trump Republicans want to make 1960s America again. Too many folks on the left are unable to see value in a space economy, while too many on the right worry, apparently, that they’ll be forced to eat bugs. And how many of us across the political spectrum are unaware that we’re actually not running out of Earth, that we’re not experiencing a global population explosion, that global poverty is falling not rising.
Which party is more pro-progress? We can disagree. But we all can agree that neither is Up Wing enough.
Micro Reads
▶ Decarbonization Won’t Require As Much Land As You Think - Austin Vernon, Institute for Progress | If we dig into the projections, we find a wide range of energy scenarios that don’t require such obscene amounts of land. While the maximalist projections assume a special focus on wind and solar, there are far more tools available to us that can reduce both cost and land use. And innovation in heating technologies could also change the calculus. In other words, our likely energy future won’t necessarily rely on wind farms covering the Great Plains.
▶ Making research funding a lottery could help tackle ‘status bias’ - Anjana Ajuja, FT Opinion | Random allocation, he maintains, can be fairer — and easier on those who miss out. Unlucky applicants can be reassured that they were just that: unlucky, not undeserving. The potential downsides are that abandoning merit-based rankings could undermine the credibility of the research enterprise and foster public mistrust. Shah said the scheme would be evaluated over the coming years and that, so far, the reaction had been surprisingly positive.
▶ Why Another Xi Jinping Term Might Be in U.S.’s Interest - Greg Ip, WSJ | First, while the U.S. doesn’t want China to be poor, it is no longer as supportive of it becoming rich—since this would make it a more potent competitor. So while the Biden administration says it isn’t trying to contain China, its sweeping new restrictions on Chinese access to semiconductors, equipment and talent have that intent. The restrictions go beyond simply maintaining a U.S. technology lead to “strangling large segments of the Chinese technology industry—strangling with an intent to kill,” wrote Gregory Allen of the Center for Strategic and International Studies. Second, the consensus of Western experts is that China’s long-term prospects have, on net, suffered under Chinese leader Xi Jinping, so a third term, which he is expected to receive at the end of the current party congress, could serve U.S. interests—at least in an economic sense.
▶ Let’s go back to mercantilism and trade blocs! - Branko Milanovic, Global Inequality and More 3.0 | The Western narrative has, since 1945, been built precisely on the opposite view: open trade helps all the countries and leads to peaceful coexistence. While one need not subscribe to the Montesquieu-Bloch-Doyle view of trade as an engine of peace, the economic arguments in favor of open trade were always strong. China and India and Indonesia and Vietnam and Bangladesh made them even stronger. Now, the West that was the principal ideological champion of free trade has soured on it because it no longer works in its favor. But whether it does or does not, is, from a global perspective, immaterial: the idea of open trade was not based on particular benefits to one side—as mercantilism was—but to the mutual benefits for most. The gains were not, ever, thought to involve absolutely everybody, but the idea was that the losing parties would be compensated domestically, or at least that their particular losses will not be allowed to derail the entire process.
▶ Is Carbon Capture Here? - Peter Wilson, The New York Times | Tarek Soliman, a London-based climate change analyst at HSBC Global Research, says the launch in Reykjavik is not the sort of “quantum leap” that would prove the technology can reach the scale and cost required to have a real impact on climate change. “But it is a step in that direction,” Mr. Soliman said. “Given that direct air capture has been seen by many people as a nonsense, this is something you can see and touch that puts it on a pathway to credibility.”