The Future of China: Balaji Srinivasan on What Might be Next

What are some of the most interesting attempts at anything related to network state that you could mention? And the reason I bring it up is for a while, I remember in Silicon Valley, there was a lot of talk of seasteading, seasteading, seasteading, seasteading. And people can look this up. And certainly there are experiments being run and have been run for a long time with intentional communities that have, on some level, let's just call them, tenets of a doctrine or agreements or commandments. So where would you point? What are some interesting things that you're seeing that you think are worth mentioning?

One important thing I just want to say is that in the book, I make a distinction. I talk about startup societies and network states, and I define a network state as actually one that has diplomatic recognition from an existing sovereign, which is an unusual definition because you might say, wait a second, why do you care whether Florida or Denmark or the United nations recognizes you? Why should that matter? You should be able to just do it totally from scratch. And the reason that I have that, that's a very high bar for diplomatic recognition. The analogy would be bitcoin starting as a pure Internet phenomenon and then eventually getting listed on Bloomberg and eventually, eventually becoming the sovereign currency of El Salvador. It attained diplomatic recognition, but it took like 10 years, right? The reason is that that as I can get into diplomatic recognition is actually very important because it means the existing. It's almost like the crypto fiat exchange, okay? Like the exchange between crypto and fiat, the ability to be halfway dollars or 95% dollars and 5% crypto. That exchange turns out to be like a critical part of the entire transition to crypto. In the same way, the exchange or the interface between crypto countries and fiat countries is the diplomatic recognition of a network, okay? So that portability is one dimension of it. Another dimension is the one you're talking about, which is physical migration. And the thing is that there's several things I can say. So first is if somebody plans poorly, you can't be their keeper. You can't necessarily look out for them on everything. What you can do is you can try to reduce the cost or the barriers to exit. And one of the things I mentioned when I talked about earlier, I said American anarchy on the other side of the world. What's burgeoning is the opposite of that, which I call Chinese control. And the scenario that I think might happen in China is there's this book by Roger Garside called China Coup, and various guys, George Soros has kind of hinted at this there's this group, the cywar group in the US that put out a video about a month ago that's talking about Cyborg and has photos of China and how they're doing Cyborg in China. Do you see this video, this ghost video?

No, but I would love a link. We'll put it in the show notes as well.

So short answer is, or short version is I think it is possible, I can't say 100%, but that some kind of China coup will be attempted against Xi Jinping or the Chinese Communist Party. But I don't think it's going to. So whether it's actually US backed or not, I don't know. But for Garsay to put out a book like this, for Soros to make the comments he has, for this JSOC to put that video out there, for all the talk about, oh, they're not a democracy, and so on, and a lot of the same energy versus Russia. It's quite possible that some kind of China coup will be attempted. I don't think it's going to succeed for a variety of reasons, but that's the thing that the Chinese system is armored against. And I think that the response to an attempt like that would be an AI eye, okay? The AII of the Chinese state ripping out any piece of civil society by the roots that possibly collaborated with that. Okay. And the kinds of consequences of that I couldn't imagine. But it'd be like that. It could do cutoffs of physical goods as targeted, reverse physical sanctions like, okay, we'll sell you chairs, but not these key screws that you need for certain military things. It would be viewed as this insanely hostile act. And you might say, well, I mean, the US Government is smart enough that it won't try that. The US Establishment is smart enough it won't try that. I'm like, have you noticed nuclear brinkmanship with Russia? Have we seen some of the stuff? Even if you agree, as I do, that the Ukrainians deserve freedom and so on, I don't think that some of the stuff where it's being very casual about nuclear war is smart. And I also think that the fact that they're still poking on things like Taiwan and so on while they're in the middle of the Russo Ukrainian war, there's various statements that are being put out on Taiwan. I think Biden put out some statement and pulled it back and put out some statement. This does not show a degree of caution on this topic. My point is, I think while American anarchy is happening, or before it gets underway. Chinese control could follow a Chinese crackdown. And what does that happen? What does that mean? It means Chinese people can't leave the country. It's already happening. Where passport issuance is like down 95% over there. They're using the QR codes that they set up for the COVID stuff for internal lockdowns. There's already the pre existing Hukou system of internal passports. They know that lots of Hong Kong people want to leave, but they don't want people to leave with their money. And a lot of Chinese people now want to leave with their money. It's called runzu R U N X U E. Okay or run philosophy. It's like basically there's three responses for the upper middle class, middle class Chinese liberal and those are rat race, lie flat, get out or runzu. Okay, so runzu will. The problem is there's reactivity on everything and the more popular that becomes, the more it's going to be portrayed as some combination unpatriotic, some combination like trying to take your money and leave after all China has done. So they're cutting off the exits in their own way. To your point, right? So Chinese control is on their side of the world. And you know what they're going to say is they're going to say look, we just stopped this American style anarchy and they're going to export that surveillance state to lots of countries and they'll say look, this is just total stability and you will never have anarchy and you will just be able to rule forever because our AII will pick up every possible form of organization against you, any possible form of dissent and that's just total order without any feedback signal whatsoever on power. Whereas anarchy is the total opposite of that. So you're going to get, I feel this world that I'm seeing things tracking towards that where you have just total disorder over here which will be justified by saying it's not the Chinese all seeing eye and you'll have the Chinese all seeing eye justified by the fact that it's not the total disorder here. And it's like the Nazism versus communism thing, except it is total decentralization versus total centralization. And the alternative to that is many different examples of recentralization. And what I mean by that is you said pick El Salvador, pick another country. The thing is that if you didn't like GM and you didn't like Ford and you didn't like Chrysler, well you could found Tesla, you could found something that actually, I mean it's very hard. You have to be a lawn maybe, but it was possible to do so. And if it's software, if you don't like some, a software company, even like Google Docs, people could found notion even a big company you could tackle like this. So the thing is that that ability to start that startup society, even if it doesn't have the full diplomatic recognition of a network state, is how those options actually increase. Because you mentioned, oh, if you don't like the current options, go to El Salvador. But El Salvador is fine. I'm just too clear.

No, I didn't say that. And I'm fine with El Salvador. I don't have personal issues with El Salvador. I'm just saying that most of the experiments we're talking about, what I mean.

Is of the menu.

Yeah, the menu. I'm just like, it seems like the crypto tale is wagging the dog a bit in the same way that the tax tale wags the dog. When people are like, yeah, it's great in this place. And I'm looking at them in zoom and there are tires on fire in the street behind them with razor wire around their compound. And I'm just saying what the fuck are you doing man? To save whatever you're saving anyway, that's all I'm saying.

Yeah, so that's the thing is also one of the big things about what I'm talking about here is it's absolutely morality first and money second. That saying missionary over mercenary. So there's this great interview from several years ago. Charlie Rose had an interview with this historian called Paul Johnson and he essentially points out that the for profit colonies in America mostly fail, but it was the religious ones that the cohesion and commitment to make it through the brutal winters, okay, just like the religious maximalist community has the cohesion and commitment to make it through the brutal crypto winters, right? Bringing it back around to what we were talking about earlier. And just like the situation that we're potentially entering in the U.S. it could be like the next Great Depression. It could be the great stagnation or the great stagflation or the great inflation. It could be not something that bounces back in a year or two years like our previous experience, but something where the government cannot print money and cannot fix it. And it has to actually be fixed with genuine innovation and not top down control and silencing of all dissent and not anarchy and shooting people, but actually innovation that could be by the way, very non consensus. The reason, by the way, I bring up something like carb free or sugar free. Rather is if you think about great startups, some of them are very ambitious, sounding like SpaceX, and others sound incredibly stupid and trivial, like 140 characters. But now, today, both Twitter and SpaceX are big companies, and a lot of startup societies will be similar. They'll either sound totally trivial like carb free, or insanely ambitious like FDA free.

Right?

And the thing is, you don't necessarily know which startup societies are going to work. You just have to run the experiment and allow people to set them up. Society as a service and allow people to opt into them. And that's what a lot of this book is about.

Sam.