Invest Like the Best with Patrick O'Shaughnessy
00:40:38 · Walter Russell Mead
[00:40:38] S2: the biggest things that happened in modern American history is the mutual discovery of tech and government. In the 1990s, which was back in the old end of history, end of nations, companies would say, oh I'm not an American company, I'm a global company, right? And nowhere was that stronger than in the world of tech, where Google has no boundaries, the cyber world is completely different, all of that stuff is irrelevant to us, Washington, they don't even understand us, and we will just do what we do. Today, tech is actually the locus of international great power competition, and China's attempt to build a technosphere that can dominate the American technosphere to American tech companies, this is really critical to your business, but also to the American state, American government, it's critical to power and independence. Much I think to the surprise of both the tech world and the political world, they've been driven in on each other and there's a kind of renationalization of tech and of the economy that we see. And the tech folks, and you may know better, certainly Jeremy understands them a lot better than I do. But my sense is that when the tech folks think about what are their economic interests, they're different from what you might call a legacy multinational, the post World War II, that are basically global trading and manufacturing companies. I make cars from things I import from all over the world, I have factories all over the world that make cars, so for these companies, free trade is the essence of their business. I need financial markets, I need labor markets, and I need manufactured good markets that are seamless and open. As Tom Friedman put it, I need a flat earth. But if you're a tech company, you don't. Alphabet is not importing and exporting a lot of goods. Even something like immigration, which is if you're a hotel company or a construction company, having hard working cheap migrant labor is pretty important to your business model. If you're a Silicon Valley company and suddenly there's no more unskilled labor crossing from Mexico, the cost of your janitorial and gardening services rises 30%. So what?
00:43:09 · Walter Russell Mead, Patrick O'Shaughnessy
You're much more concerned about security of supply chain, security of intellectual property, and I think increasingly companies are starting to realize that they need their employees to be patriotic, that is, your employees need to think it's an evil sin to sell IP to China. Your coworkers will rat you out in a heartbeat if they think you're doing something like that. Both the economic agenda of the tech sector of the business world and the kind of cultural political attitude is changing. Because again, with the legacy multinationals, I want to have a completely international workforce. I don't want it to matter whether my employees are from Sri Lanka, or Taipei or, you know, wherever. I need interchangeable units that I can plug in anywhere. [00:44:02] S0: If you take a big step back with all of this context and just think about global power, I feel like almost the whole world has decided that it's the Americans and the Chinese that have any real power or are contenders to be the powerful nation of the next period of time. What are the other interesting sources of power that have your interest and curiosity like with all the attention on just these two? We'll keep talking plenty more about these two as well, of course. But what other areas of power are most interesting to you right now?
00:44:30 · Walter Russell Mead
[00:44:30] S2: Well, I've gotten very interested in India. I've been lucky enough to get to know a number of the folks that are close to the BJP and the RSS, which is the kind of Hindu nationalist group that helped to create the BJP. And this is a group of people who, a hundred years ago, was basically five guys in a house, and they've now built this mass movement that has something like 86,000 small groups around India that meet weekly. They're an incredibly dynamic political force, they powered Modi, and they have very strong ideas about what India should be, what makes a country. India is now the most populous country in the world. India has been pretty successful at developing a tech industry, it's not in the frontier of AI, I think it may get there faster than people think, And it has its own sharply different view of what the world should be like. Which is what? Multipolar, but not in the Chinese way. Jaishankar, who's the foreign minister of India, once said that China is a revisionist power, India is a reformist power. That India is not really happy with the global status quo. In the United Nations system, India with 1,400,000,000 people in nuclear weapons has exactly as many votes in the general assembly as Liechtenstein or Luxembourg. One vote. It's ridiculous and there's a certain kind of Western domination to the way a lot of international life is organized, because it was basically organized by the Europeans and the Americans at a time when nobody else really had much of a standing. There are a lot of changes they want to make, but they really don't see the kind of Chinese autocratic top down approach as possible for India or also good for the world. They're an interesting power with different ideas and I'm very much looking to see how that develops. I think the Islamic world, again, we are seeing the world of Islam, it ranges from super sophisticated scholars and intellectuals and writers to jihadis in North Africa with machetes torching huts or something. All of this range, it's an immense civilization but as a force in the world, there's more of it, it's becoming stronger. Understanding how it's changing, how the culture in The Gulf States and Turkey is changing and developing.
00:47:16 · Walter Russell Mead, Patrick O'Shaughnessy
I think the industrial revolution forced societies to become similar to each other because if you're going to have big manufacturing plants, big infrastructure, trains, highways, airports, all of this, there are certain things you just have to do institutionally and organizationally that tend to kind of force you toward what we would think of as a European Western way of life and politics. The information revolution enables countries to use their own cultures, languages and so on as platforms. And Turkey is more Turkish. It's less like Europe now than it was twenty five years ago. India is becoming more, think Japan is becoming more Japanese so that in the industrial revolution there was a tendency toward convergence of the great civilizations. Now I think we're seeing a divergence. [00:48:15] S0: I'm not sure I fully understand the reason why that is. Can you explain it a little bit more? [00:48:20] S2: MTV, when it first went into Latin America, it was showing American rock videos on there and everybody says, Oh, is gonna, you know, it's the end of indigenous Latin culture and so on. But before long they weren't showing many American videos at all because local artists were able, really in a pretty cheap way, to have their own music, their own videos that responded to those sensibilities. So I think we're seeing a lot of that now, where instead of having to be on the mainline programming of global programming, you're much freer to go off into your own
00:48:20 · Walter Russell Mead, Patrick O'Shaughnessy
[00:48:20] S2: MTV, when it first went into Latin America, it was showing American rock videos on there and everybody says, Oh, is gonna, you know, it's the end of indigenous Latin culture and so on. But before long they weren't showing many American videos at all because local artists were able, really in a pretty cheap way, to have their own music, their own videos that responded to those sensibilities. So I think we're seeing a lot of that now, where instead of having to be on the mainline programming of global programming, you're much freer to go off into your own [00:48:59] S0: civilization. In that structure, I'm sure AI just pours fuel on that fire. What scares you the most? Like as you think about the global power dynamics and I'm assuming your vision of the future that's optimistic would be progress and prosperity or something, What most would get in the way of the kind of future that you'd want [00:49:16] S2: to Oh, a lot of things. The industrial revolution was in the long run a pretty good thing, but it had little side effects like the communist party, the killing of one hundred million people, World War I, World War II, reign of terror. [00:49:31] S0: Why were those necessarily side effects of
00:49:31 · Patrick O'Shaughnessy, Walter Russell Mead
[00:49:31] S0: Why were those necessarily side effects of [00:49:33] S2: the industrial revolution? Because I think the social stresses that come with these new technologies uprooting millions of peasants from the farms where they've lived forever and now they're in cities and they're getting exploited, yet discontent and the old social institutions that used to manage discontent, legitimate the stay, don't work as well in this new context. Everything is changing, everyone's heads are scrambled and things happen. So I think the information revolution, [00:50:04] S0: which is Fat on steroids.