Balaji - This country will win the future (and how they'll do it)

If you had to bet on one country to dominate the future, and I know it's not sort of country specific, but if you had to pick one and go all in, which country would it be? One, China, two. It'll be, I think by 2040 there's a chance, I'm not saying 100%, but I think that if the last century ended up, at least the second half was USA versus ussr, right? The first, I think this century may end up as being China versus Indians, not India. Okay. And I think that's where it might land up by like 2040 or so. Centralized China versus, you know, like the, the international India or international Indians. Okay, and why do I say that? So it's not. This is just a historical analogy and it may be completely wrong. And so just I'm giving a scenario, so I'm putting not extremely high weight on this. Okay, but at the beginning of the 20th century, or you know, you had the British Empire, it was, you know, the big deal. It was like the American Empire, but it was rickety. But in 1913 it was the big dog, right? And then like a, effectively a 30 years war arose starting in 1914. You can think of the next 30 years as just being like a giant conflagration. Even though there's a break between World War I, World War II in the west, there's invasion of Manchuria, other stuff that was happening in the East. So it's like this giant bar brawl across continents. Right? And in this sort of Final Four showdown, you had Japan, Germany, the US, the USSR also, you know, France and, and the UK and the guy who's in number one, you know, the number one spot, the UK got knocked out and reduced to basically like number four or number three, you know, by 1950. Right. Certainly way down after the US and USSR. And that's not necessarily what people would have predicted in 1913. Right. And you know, but, but talk Talkfield did. Alexis de Tocqueville did. He saw that both the US and Russia were rising and he was like, you know, these two may divide half the world between them. Do you know that famous quote, 1835. Okay, I mean talk about like 100 years before, but Tocqueville conclude the first two volumes of Democracy and 1830 with this prediction. Today there are two great people on earth who, starting from different points, seem to advance towards the same goal. These are the Russians and the Anglo Americans. All other peoples seem to have almost reached the limits drawn by nature. Nothing more to do except maintain themselves. But these two are growing he's like the. Of course, he talks in this 1800 style, right. And he basically is pointing at population growth, right. And he commented, the American struggles against obstacles that nature opposed to him. The Russians grappling with men, the one combats of wilderness and barbarism, the other, civilization clothed in all its arms. Consequently, the conquests of the American are made with the farmer's plow, those of the Russian with the soldier's sword to reach his goal. The first relies on personal interest and without directing them, allows strength and reason of individuals to operate. The second, in a way, concentrates all the power of society in one man. Their point of departure is different. Their paths are varied. Nonetheless, each of them seems called by a secret design of Providence to hold in its hand one day the destinies of half the world. Pretty amazing quote for night, for 1835, right. And he was essentially extrapolating from their growth trajectories and just sheer amount of land they had. That's a pretty good thing to extrapolate from. Now, as I mentioned, you know, maybe Russia without communism might have had like 500 million people by now. It looks a huge hit to them. But yes, basically the, you know, Russia and the US did have that kind of thing. So in a similar way, the civilizations that are on the rise today after generations of being, you know, laid low, are China and India and, you know, the. The U.S. i think, is in the state of the British Empire where it's going to. It. It's like the British Empire. You can also analogize it to the Soviet empire in the 80s, you know, where in the Soviet Union, like, the strikes, like Solidarity and stuff like that started in like the early 80s, and you just had rattling, nationalist rattling of the whole thing, and then constant pressure from the outside and so on and so forth. And you, you know, eventually you had Gorbachev who tried, you know, perestroik and Glasin tried to reform it. And there were fits and starts, by the way. Like, they sent the Spetsnaz into, you know, the Vilnius Tower in Lithuania to, like, shoot people in, like the late 80s. So there were times where the Soviet Union was trying to crack down or loosen up. It was just like. Like this. And then the whole thing just kind of fell over post Berlin Wall or what have you, right? And I think that the Western system is like that, where, you know, the hyperinflation, if and when it does come, and I'm not saying it's 100%, but it's possible, or military defeat, if this, you Know, Ukraine thing goes through or whatever, we'll see something like that, or both, or all of the above is something where it feels like this thing that's a very rickety edifice that is cracking inside and outside. And they're trying these crackdowns, but it's like, you know, this. It might just kind of break apart. And one scenario is financial secession where individual cities and states don't want to be saddled with the debts of the former US and they decided to just kind of break away. And you're seeing this with these states, all these attorney generals and so on that are constantly suing the federal government together. Like there's. They're kind of building muscle, you know, to do things. The interstate compacts thing that was rolled out during the pandemic. Also, if you look at interstate compacts, there was like Western states compact, Northeastern states compact. That's something that was actually in the Constitution. And the interstate compact clause was rolled out. But. Or I'm not sure if it's clause, but interstate compact's provision or section of the law was rolled out because the states didn't feel the federal government was working on the pandemic hard enough. Right. So. So you can analogize the US to the British Empire or this, the late Soviet Empire. And what I think is I'm definitely not a bull on the American empire. I do think there's individual pieces that will do potentially quite well, like, you know, Texas and Florida and Colorado and Wyoming, those things that are leaning into the future rather than trying to fight it. Right. It's possible. Even NYC under Eric Adams does fairly well. You can sort of start to see that kind of leadership. But that's different than a world empire that runs the whole thing. As an analogy with when you went from the USSR to Russia, okay. All these people who were there for the great game, you know, the great game. You've heard that concept? Yeah. Like, it's like playing Risk on the world. Right. All those people who are in the USSR for the great game of like, global communist domination and like, moving pieces on the board in Cuba and the. All those people are like, okay, I mean, I'm out now. Right. Like an ambitious person. You know, you were still in Russia. If you love the culture and, you know, Borscht and Pushkin, they have. They do have a glorious culture. But you're in Russia for like, Russian culture or whatever, right after that because it was no longer an empire. And. And it didn't make pretenses to that. I mean, it does. Still tries Some stuff, but it's clearly nationalist, it's not universalist in its pretenses. And I think the transition from just like the USSR became Russia, I think the usa, after whatever collapse becomes America. That say it's, it's like American culture, it's baseball, it's hot dogs, but it's not global empire, right? And in fact America was not always global empire. It was a commercial republic, but it wasn't like it didn't have like hundreds of military bases around the world. That's like a mid century thing. It's more like the late 1800s America, which was its own thing. And different people are predicting this in different ways. Folks, I, you know, folks on the left, folks on the right, there's different views of isolationism. One is the US is harming the rest of the world, so it needs to pull back. The other is the US is helping the rest of the world should pull back. But that's growing stronger and stronger. And so I think that pullback means, you know, an empire is either expanding or it's contracting. And so, so I think that the U.S. breaks. And now let's talk about China and India, right? So with China, you know, I think China plays the world's best home game and India arguably plays the world's best away game today. Okay, why do I say that? India and so China playing the world's best home game, if you've just seen what they've done with the country. This is the thing is when I say this stuff, a lot of people are like, oh my God, you're like a China shill or blah, blah. I'm like, look, I have no investments in China to my knowledge. The, you know, in the sense of like there's probably some crypto thing or some in some fund of a fund may have something, right? But the thing about China is if you just look at the cities there, if you look at Shanghai before and after, if you look at Shenzhen before and after, you look at the bullet trains, you look at the, a lot of infrastructure. They just built the entire country in 40 years. They made it like the world's manufacturing powerhouse. They essentially, you know, kept their heads down and took all kinds of abuse for many years. Like, you know, they're making plastic stuff in the warehouses. You're never going to get anywhere. You're uncreative, all that stuff. And they just leveled up and they became, they built up a massive treasury and they also went and built up like Africa and so on and they built up a huge military like just you know, look, there's lots of things that, you know, one can and should criticize about the Chinese government. They've been extremely restrictive on human rights, and they've gone after everybody from Falun Gong to, you know, Tiananmen to the Hong Kong protesters to the Uyghurs to the tech people, to Taiwan. Like, long list, right? What they have accomplished for their people and is far better than what Mao did. Like, on balance, you just have to say that the, and that's, that's reflected in the polls, reflecting the visuals. Like, people can't seem to hold two ideas in their head at the same time, which is they've done bad things, they've also done good things for their people. They've built a lot. You just, you have to actually respect a rival and be realistic about them before you can hope to compete with them. If instead it's like, ha, they're so weak, they're going to fall into a ditch. The US Navy is like the most powerful thing in the world. China doesn't even have a blue water. This kind of like this guy, you know, like this guy Zion makes these kinds of points and so on, and I have no beef with him, honestly. I, I, I, it's, I, I do disagree with a lot of his arguments. Okay, I agree with some things that the US Will withdraw from the world, that shale oil is important. I think he's also bullish in India, whatever. But on China, you know, they ship things to everywhere in the world. Do I think they can roll out a blue water navy? Absolutely. They're like, they are like the shipping operation of the entire world. They have probably more experience with that than anybody else. Do I think they can do logistics? Absolutely, I think they can do logistics. And that's a huge part of what a military is. Do I think that they can innovate? Well, you know, people have knocked them on that for a long time. But if you follow the Chinese Internet over the 2010s, their quote, Groupon equivalent is way more innovative than Groupon. They're their Facebook equivalent. WeChat is better than Facebook. And some of those properties basically are. You can argue it's not innovation per se, but coordination that enables innovation. They are simply able to coordinate across society, to build things in the physical world especially, but across things that Western society is not. And immediately people will say, oh, that's because they're an authoritarian country, and so on. And that may be part of it for sure. But the US was also able to build things when it was democratic in you know, the, the mid, you know, 1900s, like the 1950s is, it's not considered a time when the US was not a democracy. You can argue is a very different thing because distribution was actually very concentrated. And so it wasn't the same kind of thing it is now, which is chaotic thing, but at least formally the laws weren't that different. Okay. And so, you know, you saw the president like a lot of the forms were the same. Right. And so why was it that a democracy was able to build things then? It's not able to build things down. Why are you attributing it to authoritarianism? I'd argue that it's actually in part due to the fact that the entire culture of the US and much of the west revolved around the assembly line. And people would come in to work and they would punch a clock and they would take orders from a foreman. And even when they protested in a union that was still organized the same way of like all folding in, listening to the forum and taking instructions, executing the physical world, that subroutine was there and everybody was acculturated doing that. That is a complete opposite. What do you and I do all day? What, what do all everybody in the west do? We hit keys on keyboards and phones. Right. We are not acculturated to working in a factory setting. The Chinese are. They're basically the only people in the world arguably who are to first order. Okay. They're still manufacturing in Germany and other places. I'm not saying none. Okay. But because of that they have a culture that is because it's able to build in the physical world on the small. They're able to build in the physical world on the large. If you cannot build the physical world on the small, you're not able to build in the large. This may be a super obvious point, but it's basically something where pushing out the manufacturing base has knock on consequences that are less obvious. Right. And people think, oh, it's just about money. But why is it that, you know, like you can allocate billions of dollars and you can't build a bus lane or a bull train because nobody in the government, nobody on the ground understands how hard it is to build things. They've never actually built something before. They all think they can outsource to some subcontractor. Subcontractor. There's 15 levels of graft. It's like, you know, it's like hiring somebody to do software and not knowing how to do software. Like you can easily get bit up massively by these people who tell you, wow, it's going to take a million dollars to frobnicate that. And you don't know what that is. And so you can't diligence it or call BS on it. Right? So there's no experience in any building. These people can't call BS on it. So coming back up with China, the Chinese state has just executed phenomenally well over the last 40 years. I do think that there's. They have a huge weakness. And you know, Ross Duda has this concept of the Chinese decade, not the Chinese century. I think that's roughly right. But their huge weakness is they suck at English pr. Okay, I know that sounds like a cynical way of putting it or whatever, right? But they are just absolutely terrible at making their moral case to the world. You know, they're actually really good at it. On the Chinese Internet and essentially the Chinese state, the big difference between the Chinese Internet and the English Internet is the Chinese Internet has root and the English Internet does not. The Chinese Internet is centralized and the English Internet, while they're trying to centralize it, is still fundamentally decentralized overall. And that fundamental topological difference where basically every node on the Chinese Internet folds into CCP and they can just flip them off and on, that's a topological difference of how the networks are constructed. Every peer to peer thing in the Chinese Internet is ultimately very provisional. Right? Whereas the huge energy in the west is on Web3, which is not provisional. Right? Okay. So the Chinese state is basically like ultimate centralization. Just like when we're talking about, you know, post Trump, you get that censorship leads to both national protocols and national stacks and neutral protocols. You have like China, which is like ultimate centralized manufacturing, top down command and control, etc. Right. And it's going even harder in that direction under Xi Jinping. Okay? And that's the thing about that though is it's obvious power. Obvious power causes fear, causes bandwagoning. All of China's neighbors are as nervous about China as like Russia's neighbors are nervous about Russia. But to 10x because it's China, right? They're massive. I mean, one thing by the way, about like World War II, Nazi Germany was only like 70 million people, right? And the US plus UK plus USSR it was like, you know, the UK I think was like 50. In the US are like 150. So it's like 350 to 70. So like a 5 to 1 ratio. Okay. China versus the US is like 4 to 1 the other way, right? So like 1:1.3, 1.4 bill to, like, 330. Right. So, like, and they've got the manufacturing base and they've got the, like, sense of themselves as a civilization on the rise. And like, you know, they've got the censorship dialed in. They attack all these problems when they're at the seed level. For the most part, tech is one of the few that they're attacking at the series E series F level. So they're pretty formidable. I would. You know this book called the Kill Change? You know it? By Christian Bros. Yeah. Okay. Worth reading that in 2034. Basically, just looking at, like, the Chinese military and, you know, essentially he's like, in war games, you know, between the US And China, the US military has a perfect record. We've lost almost every single time. Have you heard that one? No. But yeah, that's how he opens his book. And this guy is. He's on the Senate. He was basically is McCain's aide on the $700 billion budget, Senate Armed Services Committee. He saw the entire budget, including the black budget. You know, because everyone will say, oh, yeah, the F35, that's a failure. And Zumwalt, that's a failure. The rail gun on it, the combat elevators, Fat Leonard, the woke military, all that's a failure. Sure, okay, fine. But the black budget, we've got all the secret stuff, dude, Just believe me, there's stuff there. You know, it's really strong behind the scenes, right? And maybe it's not. Right? And so he makes the case that maybe it's not. He actually went and left the government and joined Anduril because he actually wanted to do something that might work. Right? And I think that, by the way, is a long term. I think the future of defense is decentralized defense. You know, one thing that people might say is, oh, tech bro, why are you, you know, even talking about this? Stay in your lane, blah, blah. And, you know, the thing is that when Thiel went in from payments into, you know, national security, he did Palantir, and then Palmer Lucky went from VR into drones. He's pushing the frontier of that. So this is quota R culture. Moreover, by the way, anybody who says tech bro is usually a word cell. So you can just kind of flip it on them, right? Like, and, you know, because it's. It's like a sub. It's a substanceless insult. So when you. When someone throws that, you just throw one back. And then they're always, oh, my God, I can't believe you're insulting me. Oh, my God, this is a derogatory thing without any introspection. Right. All right, but coming up the stack. So China's medium term problem is that they are terrible at English pr. And so essentially they're just. It's just all about hard power for them. Hard power and money. Right. And, you know, that's explicit. It's basically something where there's a certain code that you need to follow if you're in Chinese controlled territory or a Chinese protectorate, whatever, and you can't criticize, you know, Xi or whatever, but it's like sort of explicit. It's like just. You cannot criticize a party. Okay. Keep your head down. Anything that's politically controversial, keep your head down. Okay. It is kind of like the US in terms of, you know, watching what you say constantly, but it's just more explicit as to, like, there's a list of phrases you can't say and so on and so forth. Okay. So China's easy to understand. It's a legible one. Okay. India is more. I shouldn't say more interesting. It's just different. India, the state is, in my view, it's certainly improved dramatically. Like to, To. To an extent that I would not have believed. Like, the infrastructure, there's traffic lights. Chennai is cleaner than San Francisco. It's not close. Okay. Like, there's no question. Yeah. You haven't visited recently? No, man. Or you have? No, no. Yeah, go, go into. I mean, I was shocked by this myself. Right. Like, I mean, blue cities are just. That's why I call them the descending world and the ascending world. Right. Go and check it out. Don't believe me, right? Just look at, you can look at Instagram, you can look at people do drives around the city. I'm not saying everything is completely spotless, but the sense of things cleaning up and roads getting paved and, you know, like, you. You couldn't used to be able to drive in India without Hong Kong Beaver, you know, like the dirt roads and bullock carts and all this stuff there. They've got modern highways now. Everything is. It's like, you know, this is the kind of thing which sounds patronizing, but it's not because it's like it happened really fast over like basically the last 10 years. It's like this, this really impressive thing is happening and India's just getting it together. And, you know, it's weird in a sense. Like the US and India are like almost switching places or converging, you know, the. It's the US that is now the country that's sort of got a lot of smart people who just can't seem to get it together as a society and they're driven by ethnic and communal hatreds and so on. Whereas India has like a sense of itself and togetherness and for its flaws is able to put it together and is now exporting talent over the world and building up, you know, like in this way. But here's the big thing. India's strength actually may be that China is dangerously competent and the US state is dangerously incompetent and India is in the middle. It's a Goldilocks. It's competent enough to provide a base, okay, for Indians to operate. It's competent enough to keep the lights on, to keep the Internet on. 4G. LTE has got rolled out to almost a billion people across the country in the last five years, six years. Do you know that? No. Yeah, it's like this insanely important story that should be part of, you know, like the implications of it are so profound. For example, most English speakers on the Internet are going to be Indian. But basically like most followers on social media will be Indian. Most likes on social media will be Indian. Like on the English Internet, at least like the full implications of that I don't think people have fully understood. This is why I think if China becomes, has become a tech and manufacturing superpower, I think India becomes a tech and media superpower. Okay. The tech part is relatively obvious in the sense of they're, they're actually number three in tech unicorns now. They've exported a lot of tech CEOs, they've exported a lot of tech founders doing pretty well on tech and pure software. That part is I think, easy for people to get on the media side. That's where people will say what are you saying? Biology. Bollywood is going to take over the world. I don't think so. Right. It's nice, but it's not at the quality level. Right. And that's not what I mean. I'm saying Bollywood is fine. It just provides a proof point of production values that are possible there. But if you actually add up other things. So a lot of the animation for movies like Tenet, for example, all these Hollywood movies, if you look at the credits, it looks like a New Delhi phone book. And because it's being done in New Delhi, okay, a lot of the back end animation for things, computer graphics as well as like hand drawn pixels has been done in India for a long time and that's ramping up. You have obviously things like Saja South Asian Journalist association. You have Lots of Indians who have done well overseas in media, politics, a lot of the verbal stuff, law, those kinds of professions. And you have quite a few now in show business, like not just M. Night Shyamalan, but you know, like Hasan Minhaj and all these other folks. Right. He's from Pakistan, but let's say broadly South Asian. Right. And you know, Ziz Ansaria, these various folks. Right. Mindy Kaling, probably long list I could go through. And so if you add all that up, there's like talent in media. But now we're actually in like a maybe once in a century opportunity, which is a. The US media has just lost the plot. And whether it's Teen Vogue or Sports Illustrated, it's all just wokeness 247 and you know exactly what they're going to say before they say it. And they've abandoned their previous niches. Right. Teen Vogue is not about teens and Vogue, it's like Marxist claptrap. Right. It's like, you know, and Sports Illustrated is going to lecture you about something. There's a tone where it's almost like whatever outlet you look at, you know, kind of exactly what they're going to say before they say it. There's not like a surprise or a differentiation. Part of that has led to substack where now those things are actually different and they're saying different things. But all those legacy media outlets, those niches still exist in some form. They're going to be taken over, I think, by new players, number one. Number two is we have, you know, I know it's over. Like people, you know, years ago I would say VR and crypto, now I'd say the metaverse and web3. Haha. But it is a thing. And I think authoring content for VR is a whole new media environment and becoming a crypto creator is a whole new opportunity. Crypto creators are as big a deal over Internet influencers as Internet influencers were over offline. Because now you have full control over distribution. You can monetize much better. You can basically, you can make millions and millions of dollars as an influencer in a way that you couldn't before. It's going to be a huge deal and I think India is going to do extremely well in that because they've got a lot of people who are good verbally as well as visually and whatnot. Right. So I think India, this is basically the reason why I think India is underestimated. But India as a country is not. It'll probably have a strong enough military to be like Defensive. It's got nuclear weapons and so on. It's got it together enough that it can kind of defend against China, but nobody's going to be worried about India like, invading them. Okay? So it's comp. Do you see what I'm saying? It's competent enough to be a base, but it's not so competent like China that it's a threat. Right? And it's got this diaspora that can migrate around the world. It can code, it can do media, it can do finance. And one way I sort of think about it is as the US is just sort of like messing up. This is India and then more generally India plus Israel plus this sort of international intermediate, right? There's this liminal Anglosphere, right, of folks who speak English but have taken the UK code base and places like India, but also Israel, Singapore, Nigeria, they've taken that UK code base and they've kind of forked it in a different way than the US code base. You know what I mean? So there's still a commonality there, right? These are still people which share cultural reference, right? You know, if you, if you have like a Nigerian tech person, Singapore tech person, Israeli tech person, Indian tech person, you can immediately just understand each other very quickly. Of course you can for other cultures as well. But there's like English common law and stuff that applies, right? And so I have a feeling that that group is going to become much more influential on the English Internet, in part because they have the civilizational confidence of folks that are rising and that offsets the woke group that's falling and it complements the Texas, Florida, Colorado pragmatic folks within the West. So that is kind of this coalition that I see rising on the English Internet, which is 60, 40 or 70, 30 versus the like Brooklyn woke establishment.