The events of Tuesday have forced me to change my views about history, my country, and mankind’s future. It’s better to be honest than to pass around fairy stories. This is my effort, at the end of my career, to adjust you to reality.
The 20th century belonged to America. The first half of the 21st century belongs to China.
If you still have wealth and want to keep it, spread it around but put most of it in China.
China’s system, it turns out, is better adapted to the demands of our time than that of America.
Please stop calling it Communist. It’s the same system China had for 2,000 years, with the President as Emperor, with the party as Mandarins, and with absolute loyalty being the first rule of all its people.
The American system failed because its people did. China has fewer people who can fail. You don’t get into a position of authority in China today without proving yourself worthy. That can be through ruthlessness within the bureaucracy, ruthlessness in the conduct of business, or sheer bloody ruthlessness. But you do have to prove yourself if you’re to get the freedom to know reality and to act with full knowledge.
On the same day America was committing suicide on the altar of Donald Trump, China was proving its system sound. Jack Ma had created a huge technological machine in Alibaba, and an even greater financial one called Ant Financial. At the heart of Ant was cloud technology that could write an infinite number of loans and spread all that risk to others.
This week the government told Ma that Ant threatens stability, and it does. Giving loans without taking risk is precisely what caused the 2008 financial crash. The government told Ma that Ant had to accept, at minimum, 30% of its loan risk. Western reporters are calling this a showdown between Ma’s capitalist power and China’s Communist authority. In fact, it’s a Mandarin system exercising care for itself.
China’s strength is built on real hunger, the kind most Americans can’t imagine. We talk about the Great Depression, but it was luxury compared with the way China spent most of the 20th century. In John Steinbeck’s novel The Grapes of Wrath, the Joads had a truck to go from Oklahoma to California. No Chinese family did. In its first quarter century under the sole authority of Mao Zedong, who was China’s Trump, Chinese people were murdered in the tens of millions, solely to satisfy one man’s desires for “discipline.”
In the 1968 film The Shoes of The Fisherman, China is portrayed as a starving nation willing to blow up the world so that its people might have a crust of bread. That’s what China was like just 50 years ago. The forge did indeed instill discipline, a willingness to work hard, and obey the system, which is what every political system needs to succeed. Not consent, obedience.
Once the economy was re-opened in 1978, adapting the American system of capitalism to the needs of the Mandarin state, China’s people achieved a comfort their parents could not imagine. In the same way our grandparents suffered during the Depression and World War II, so China’s parents suffered during the Great Leap Forward and the Cultural Revolution. They are now getting their reward.
None of this was about law or ideals, either capitalist or communist. It was about boundaries. Once boundaries were established around human action, and incentives applied, people could be channeled into building great societies. Without boundaries you can’t scale a company or a nation.
China’s reign is destined to be brief, due to an artifact of Mao’s Cultural Revolution meant to fight that famine. The One Child Policy means China is now facing a demographic cliff, as deep and as yawning as the one that took Japan at the start of the century. The same cliff is now before America, because in our greed and our selfishness we’ve forgotten that what builds any great nation is the hard work of youth, and abundant supplies of it. Wealth isn’t created by age. It’s only managed by it. Only a high birth rate, or a willingness to accept immigration, can keep the cliff at bay. Having closed that solution off, we and China will go down together.
