From the Chinatalk substack

by liberal japonicus

I like this substack newsletter, ChinaTalk by Jordan Schneider and I thought this piece was quite fascinating.There are a lot of competing points and it would be impossible to summarize them, but the introduction gives an idea

I recently hosted a 2-session reading club for Abundance, bringing together paid subscribers of my Chinese-language podcast CyberPink and those of our sibling podcast American Roulette. Ours was conducted entirely in Mandarin Chinese, which meant that the participants, by default, were like me: born and raised in China, educated in the West, and now navigating the cultural and ideological fault lines between the two. Among the attendees were academics, lawyers, consultants, AI investors in Silicon Valley, and engineers in big tech.

When you discuss American politics in a group like this, perspectives shift constantly. As we dissected Abundance, we toggled between the imagined readers in Brooklyn, the Bay Area, and D.C., and a more distant, more foreign vantage point — one grounded in the trajectories of China itself. In short, we examine the U.S. as foreigners, as immigrants, as Chinese.

Somewhere along the way, our Signal group of book club organizers — my podcast co-hosts and friends — jokingly named the group *Ezra Thought Study Group* (Ezra思想学习小组), a parody of Maoist-era “Marxism Study Group” or more recent “Xi Jinping Thought Study Group.” It was tongue-in-cheek, of course, but it also captured something real: we all sensed that this book was both a techno-optimistic manifesto from central-left, and a piece of strong political persuasion to the reconfiguring Democratic Party.

In this article, I’ve selected fragments from the 100-page (!) transcript of two book clubs, each lasting 1.5 hours — but not the ones you’ve probably heard before. I’ve deliberately cut the standard U.S.-centric book analysis and policy talks; this article is some curated moments that I believe offer some fresh takes. Consider this: Reading Abundance from China.

Very interesting stuff.

 

Comments

[russell]

This was a really interesting read, lj. Thank you for sharing it.

I haven't read Abundance so to some degree I felt like I lacked some context in following all what was being said - like I was hearing the response to a somewhat large statement, without having heard the original statement. So maybe I should read Abundance?

But even given that, it was a thoughtful and thought-provoking read. I've subscribed to the substack at the free level.

One thing in particular I was struck by came from the comparison of US vs. Chinese "manufacturing culture", for lack of a better term. A number of points are made in the discussion, but the thing that struck me most was more or less summarized in this para:

America definitely has advantages in excavating "innovation points" that have clear commercial value and market acceptance, but when it comes to those "1.1 improvements"—the continuous polishing and optimization—the gap compared to China is obvious. This actually reflects deep institutional design differences between the two countries: America's system encourages high-risk, high-reward winner-takes-all, while China's structure tends more toward stable returns and inclusive distribution. These institutional and cultural differences in risk appetite ultimately show up in the industrial realities and innovation models we see today.

If I were to try to boil this down and restate it in my own words, I'd say:

China is patient, the US is not

In other words, in the US we seem to always be chasing the next "unicorn" - the next disruptive thing that is going to give finance capital that magical 100 for 1 ROI. And we want to see that ROI in a relatively short window of time - 5 or 7 years? Whereas in China, they have the patience to build systems that improve over time through constant iterations to offer more modest, but stable returns, over longer time spans - 10, 20, 30 years.

And the patient, incremental approach is more effective in building out a robust manufacturing sector. Because, as others in the conversation note, while manufacturing processes are reproducible to a great degree (and therefore capable of scaling and moving from place to place), they often require what the contributor Afra calls "tacit knowledge" - information embedded in human minds about how to do things.

Which takes time to build and pass along, and is less amenable to scaling and relocation.

A really interesting - and relevant - read, thank you again for sharing.

[nous]

I, too, read the substack and found it interesting - probably more informative than anything I have read about Abundance which seems to me to be more of a work of mythology than one grounded in an understanding of technologies and practicalities that it champions. I think Klein has far too credulous a faith in the techbros and has not read widely enough in the literature to see where the silicon valley marketing buzz is all greed and ketamine.

I do agree that the US needs big public works, but those works need to constrain the techbros and aim for slower and wider prosperity. Instead, we have modernity as a casino.

[CharlesWT]

China's economy is looking a bit precarious.

China’s Debt Problem Is 300% Bigger Than America’s

[nous]

CharlesWT - who is behind the Economics Explained channel and where does their information come from? They don't seem to feature much information about who they are, what sort of educational background they have, or what sort of information literacy practices they use to verify their information, which leaves me wondering.

Hard to know how much trust to put into commentary when there is so little transparency.

Genuinely curious, marginally skeptical, but not going to dismiss it out of hand.

[CharlesWT]

nous, here's an overview of the Economics Explained channel. Perhaps the main criticism is that it oversimplifies economics to appeal to a broad audience.

Detailed Report on the Economics Explained YouTube Channel

[nous]

Thanks CharlesWT, but Grok's summary is not particularly helpful. Mostly it underlines for me that we don't know much about the author(s) or what sorts of institutional connections or outside funding may be influencing the commentary.

I get that this is true for a lot of popular media sources, but I tend towards sources that do a better, more careful job of practicing research transparency.

[wj]

America definitely has advantages in excavating "innovation points" that have clear commercial value and market acceptance, but when it comes to those "1.1 improvements"—the continuous polishing and optimization—the gap compared to China is obvious.

Most of us here are probably old enough to remember when Kaizen, the Japanese term for continuous improvement, was a hot topic. Japanese car manufacturers, especially Toyota, (and other Japanese manufacturers) were eating American manufacturers lunch. This was the explaination. A lot of American manufacturers even made a big deal about adopting it.

Of course, if you dig deeper, the originator of the whole concept was an American (W. Edwards Deming). But until the Japanese made spectacular use of his ideas, he had trouble getting a hearing in the U.S. From the sound of it, perhaps American manufacturers have lost the thread. Again.

[Snarki, child of Loki]

American industry has been inflicted with a plague of MBAs. Dim, fad-prone, and given far too much responsibility.

NASA is *far* too slow getting the B-Ark ready.

[Pro Bono]

The China Debt talk compares US to China 10-year government debt yields, without saying that the yield should be the inflation rate plus the credit spread plus something for time value. In fact, the different yields are almost entirely explained by the different inflation rates.

[russell]

Grok's summary is not particularly helpful

I know that this is just further proof that I'm an old man yelling at cloud, but I am learning to hate AI.

It's like mansplaining as a platform. Plus, an electricity hog.

Doesn't anybody read a book anymore?

I will now go yell at random kids to stay off my lawn.

[wj]

American industry has been inflicted with a plague of MBAs.

This

I'm willing to believe that someone who has actually worked for some years, including some years as a low level manager, could find an MBA curriculum useful. But someone right out of an undergrad degree program? No. And, sadly, that seems to be what we are mostly afflicted with.

We need a W.S. Gilbert to write an analog to "I am the very model of a modern major general". It encapsulates the situation so well.

[Pro Bono]

American industry has been inflicted with a plague of MBAs.
NASA is *far* too slow getting the B-Ark ready.
I am learning to hate AI

It seems to me that AI, at least as quoted on this site, could readily replace the MBAs and other B-Arkers, but not the people who actually know and understand stuff.

[liberal japonicus]

This will be broken into a couple of comments.

First, I got a copy of Abundance and made notes to make a post, but nous basically said what I would have said, only more succinctly. Klein is a wonk, which I say respectfully. However, I don't think his wonkiness serves him well in writing something which is essentially utopian. He writes as if all of the drag in the system is the result of progressives constantly screwing up the system. But a lot of it was trying to win over stakeholders and make sure they were included. That many of those procedures were hijacked to stymie progress shouldn't be blamed on progressives, unless you demand a level of cynicism from progressives that has never been apparent.

It's interesting that there was a flowering of interest in the book, but, afaict, it's all dried up. I'm not sure how any solution can gain a hearing, but the speed at which the book bloomed and then passed away is telling.

Second comment might take a while, I have to check some sources

[liberal japonicus]

About Charles' video, I share nous' hesitancy, but in this case, mine is less worry about astroturfing/misrepresentation, it is more that the assumptions of Western Economics may not apply to other societies and cultures in the same way. I've plowed through a shit ton of videos about economics related to China and Asia and while the balance seems to be very bearish on China, they all look at China through the lens of Western econ. I think one should consider that Western Economics is based on a number of cultural principles that may not be operating in China.

This might seem very strange if one thinks of Economics as a science, but I'm not totally convinced it is.

As folks here may know, there is no actual Nobel prize in Economics.
The prize initiated and awarded by the Central Bank of Sweden and falsely dubbed as the Nobel in Economics has acted as an institutional vehicle to endorse and establish Neo liberal ideas (mostly Free market fundamentalism) within Economics (Offer & Söderberg, 2016).

https://developingeconomics.org/2024/10/22/the-nobel-illusion-why-the-nobel-prize-in-economics-needs-to-be-abolished/

I probably wouldn't be as harsh, because, as I have often noted, I don't know economics very well. Call me agnostic. I do note that a loud vocal group that thinks Thomas Sowell should receive the Economics neo-nobel, which simultaneously suggests that if the whole enterprise is a scam, at least they have enough taste to keep Sowell out.

https://www.currentaffairs.org/news/2023/09/is-thomas-sowell-a-legendary-maverick-intellectual-or-a-pseudo-scholarly-propagandist

But it seems to me that some of the root cultural assumptions made in economics may not hold for China.

This is a typically bearish video, by Ken Rogoff, former chief economist of the IMF.
https://www.youtube.com/watch?v=P2b4TjQa4gk&t=3371s

and you could ask 'how could he be wrong? He's actually been to China and spoken to principals' Well, he does present a narrative that China has been moving from a model of competence to an authoritarian model. A couple of quotes

First I want to be careful to say that they listen to everybody. The Chinese are way better than we are at hearing a hundred different views. Mine would be one of many that they heard. I was very impressed by the competence of the Chinese leaders. I actually gave a lecture in the Party’s training school where, if you’re a mayor, a provincial governor, any bureaucrat on your way up, you go to this thing which for them is like Harvard Business School. They really looked for competence. Of course there were various loyalty things. But when you met the leaders—and I met a lot of them when I was at the school—they actually asked really raw questions too. They said things I couldn’t believe they were asking. And I was told that within the school, you're allowed to say anything. So they had that system for a long time. When you met Chinese technocrats—or even the mayor of Shanghai—they were impressive. I'm not saying ours aren't, but it's a mix. I think you know that.

I think Xi Jinping has really changed that. He’s been the president since 2013, and over time he’s pushed out that system and moved more toward loyalists, people who are less technocratic. Probably the most important talk I ever gave in China was at what's called the China Development Forum in 2016. It's this giant hall that had most of the top leaders in the party. A lot of the elite of the tech world, Mark Zuckerberg and many others were there. I said, “Okay, I'm looking at your housing. I'm looking at your infrastructure. It looks to me like you're going into a classical housing crisis problem. Your catch-up is over. Your demographics don’t look good.” I gave a list of things. “And by the way, it looks like power is becoming very centralized in the economy.” And I said, “I'm a Western economist. You're doing an amazing job. What do I know? But I don’t think that would be good for growth.” After I gave the talk—I just figured you only live once, you just have to say what you have to say—a couple of top leaders came up to me and said, “Professor Rogoff, we very much appreciated your remarks.” I was thinking, “Oh no, they’re going to put me in jail or something at the end of this.”

I’m less impressed by them now. And I’m worried. Let’s say they get into a crisis—which I think they’re in now. I think they're still in a deep crisis—or somehow hotter heads prevail between the United States and China and we get into some kind of entanglement nobody wants. I worry that we’re not as competent. I’m speaking about right now. We have some very good people, but the average quality at the very top, I think, has gone down. And China’s not as competent either. That’s a recipe for having bad things happen.

It's a story and it's a plausible one. But you go down a bit and Rogoff says this

The ticket to getting people to spend more is to provide more security than they have. First of all, there’s nothing like our Social Security system. You need to save for your old age. There’s nothing like our health system. If you work at one of the big state-owned factories, they give you healthcare, but otherwise you’re on your own. They’re not allowed to invest abroad. It goes in waves, but they’re not allowed to put their money abroad. So they’re trying to be careful about all of that and not do things suddenly. There’s nothing to do overnight. But fundamentally, if you’re looking at China and asking what’s wrong, it’s that the consumer isn’t spending enough.

And I hear 'make them just like us'.

Economists at least consider ourselves terrible at that. You go back and look at any of these commissions that were supposed to figure out what was going on. They happen periodically. Maybe Brookings puts one together, maybe the government does. My former colleague, the late Dick Cooper, had a whole list of these. So it is very hard to know. But my gut instinct is that what’s happening to China is what’s happened to Japan. It’s what’s happened to Asia, what happened to the Soviet Union. We have a more dynamic economy. We’re not perfect. Maybe we’re screwing it up right now with all the tariff wars and deglobalization. But we have this dynamism and creativity that other places—at least other large economies—just can’t replicate. They can build stuff. The French have better high-speed trains than we do. I hope you don’t ride on the train from Boston to New York. It’s nicer than it could be, but it’s no high-speed train. You mentioned China. Oh my gosh, their high-speed trains are just incredible. They’re good at that. But the really creative stuff? I don’t want to say they don’t have any. There are some amazing Chinese companies. But let me say that the US is really good at it. We’ve kept that in our DNA. I think it’s very important, to preserve it.

Getting in an argument about who is the most dynamic and creative is a mug's game.

It's hard to contest the points that Rogoff makes, but when he says 'they have to consume more', I have to wonder if at the heart of a lot of discussion about China's economy is the idea that they have to be us. Yes, the social safety net is nothing compared to western societies, but how do you factor in the fact that a society built on confucian values is going to take up a lot of that. Certainly, there is a lot of grumbling, and there are a lot of knock on effects. But given the way the US and UK safety nets are unravelling before our eyes, I have to wonder if we are just using different measuring sticks.

This resonates with some of the comments in the substack, like this one
There's this perfect example: a Democratic delegation visited Japan recently, and several congresspeople toured the Shinkansen—which, by the way, was built in the 1960s with American funding.1 What's almost laughable is that even today, this public transportation system—which isn't exactly cutting-edge anymore—still managed to "shock" American congresspeople. This tells you that even the highest-ranking political elites don't really have opportunities to experience or understand the kinds of lifestyles other countries have built.

[...]
I was talking to a professor at Columbia—one who’s knowledgeable, well-traveled, worldly person. He told me how impressed he was by Beijing's public safety: at 1 AM, he saw a woman in fur and jewelry walking alone on the street, eventually taking the subway home without any worry. He cited this as positive evidence of modern urban life.

I politely reminded him: if you want to use an example to illustrate good urban safety, you should really mention Tokyo or Seoul instead. Because these cities are equally safe, but they're less likely to be misunderstood as depending on "authoritarian order" for maintenance. When you use Beijing as an example, in the American context, it easily activates this "authoritarian scratch"— people who are culturally inclined to believe order can only be achieved through strongman rule will instinctively equate urban safety with authoritarian governance. They'll think only highly centralized power systems can achieve clean, safe, orderly urban life. This imagination further reinforces their pessimism about democratic countries' inability to govern cities well, providing psychological support for rationalizing some kind of authoritarian governance logic.

But this is actually a very dangerous misreading. We have to dismantle this binary thinking: cities can be both safe and free; public life can be both efficient and democratic. This kind of life exists not only in Tokyo, Seoul, Amsterdam, Zurich, but could absolutely be realized in America, provided we first culturally change our assumptions about what "ideal life" looks like.

I really like the point of 'authoritarian scratch'. It extends to Japan and Korea, and when you point out some aspect of life, it sends some scurrying to find counter examples.

I had to reconstruct this from last night, so I better stop here.

[wj]

I don't think I quite buy the thesis that (some? many?) Western economists want to make China "just like us.". For the simple reason that we are not "just like us". At least, not like the "us" that economists typically use to describe the populations whose behavior they are modeling.

To take just one example, economics, as I understand it, has no concept of "enough". It assumes that every individual will always act in order to accumulate wealth. Regardless of whether he already has more than he could ever spend. Certainly there are such people. But they are pretty clearly a) atypical, and b) seriously psychotic. Somebody spending the weekend volunteering in a soup kitchen, rather than hustling for another million? Unthinkable.

[liberal japonicus]

when I say 'make them just like us', it's less that economists can 'make' Chinese be like us, it is that they are assuming that they are just like us in those areas and by getting them to save less and consume more, it will 'fix' the problems of the Chinese economy.

It was either on this youtube video or another one, but someone pointed out that because the Chinese basically threw money at a number of problems, it actually was better because a more efficient distribution would have necessarily been more limited. Obviously, efficiency is a good thing, but if you think of it as superseding all other things, you may miss a lot.

[wj]

Obviously, efficiency is a good thing, but if you think of it as superseding all other things, you may miss a lot.

There is also the difficulty that "efficiency" can mean very different things to different people. And, in my observation, almost none of them are even aware that they are using the word differently.

[Pro Bono]

...economics, as I understand it, has no concept of "enough". It assumes that every individual will always act in order to accumulate wealth.

Economists are not necessarily stupid. They use a "utility curve" to describe how much an individual values increasing wealth. The standard assumption is that utility curves are increasing, i.e. people prefer more wealth to less, and concave, i.e. the curve gets flatter as wealth increases.

So it's entirely possible for a very wealthy person to prefer a weekend's leisure to another million dollars.

[liberal japonicus]

So it's entirely possible for a very wealthy person to prefer a weekend's leisure to another million dollars.

But would they prefer a person in Flint getting potable water from their faucet to another million dollars? That is a bit more opaque.

[Michael Cain]

So it's entirely possible for a very wealthy person to prefer a weekend's leisure to another million dollars.

But would they prefer a person in Flint getting potable water from their faucet to another million dollars? That is a bit more opaque.

So if I understand this correctly, they give up the weekend's leisure, get another million dollars, and then give it to whoever to is taking care of the lead pipes in Flint. Is that right? Would they prefer a weekend's leisure or fix the Flint pipes?

[liberal japonicus]

LOL. I guess there's a reason the Hippocratic oath is supposed to start with 'first do no harm' (a wikipedia check says it ain't so

Although it is often said that "First do no harm" (Latin: Primum non nocere) is a part of the original Hippocratic oath, no such phrase from which "First" or "Primum" can be translated appears in the text of the original oath, although a similar intention is vowed by, "I will abstain from all intentional wrong-doing and harm". Another related phrase is found in Epidemics, Book I, of the Hippocratic school: "Practice two things in your dealings with disease: either help or do not harm the patient". and it likely took shape from longstanding popular nonmedical expression.