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Podcast Episode Notes: The News Agents - How Lawyers Ruined Britain
Episode Overview
- Podcast Title: The News Agents
- Episode Title: How Lawyers Ruined Britain
- Description: In this episode, tech analyst Dan Wang discusses how the West, particularly the UK and the US, has become "lawyerly societies" that hamper progress with legal constraints, contrasting it with China's engineering-focused approach.
Key Themes The State of Infrastructure in the UK and US
- Long Delays in Infrastructure Projects:
- Average time to build significant infrastructure in the UK is 12.5 years, with 10 years often spent in the planning phase.
- Examples include:
- Crossrail: 30 years from conception to completion.
- Hinkley Point Power Station: Over 17 years.
- HS2: Ongoing delays.
- Environmental Assessments:
- Environmental impact assessments reaching 30,000 pages and taking seven years to approve.
- Societal Implications:
- The issue of slow infrastructure development is linked to broader economic and political malaise in the UK and US.
The Concept of "Lawyerly Society"
- Definition: Societies where legal frameworks dictate outcomes and impede progress.
- Comparison to China:
- China is described as an engineering state, with leaders often having engineering backgrounds, focusing on building infrastructure effectively.
Dan Wang's Insights
- China's Engineering Ethos:
- Chinese leaders prioritize engineering and technical expertise in governance.
- They approach the economy with a pragmatic, engineering mindset, favoring construction and technological advancement.
- Western Legal Systems:
- The predominance of lawyers in politics leads to obstructionist attitudes towards infrastructure and development.
- A historical shift occurred in the US during the 1960s and 70s, where legal activism began to prioritize stopping undesirable projects rather than fostering development.
Historical Context
- Transition from Engineering to Lawyerly Society:
- The US and UK were once engineering societies, facilitating major infrastructural projects (e.g., railroads in the 19th century) without the current legal constraints.
- The modern era is characterized by legal complexities that inhibit growth and development.
The Role of Population and Economic Growth
- Population Dynamics:
- The one-child policy in China is highlighted as a brutal example of state control over individual lives, showing the darker side of a strong state-engineering approach.
- Economic Growth in the West:
- The UK and US need a paradigm shift to embrace growth and infrastructure development rather than stymie it through legalism.
- Concerns exist that established homeowners and vested interests are often against new developments.
Future Outlook
- Global Competition:
- There is a dynamic competition between the US and China, with both nations facing distinct challenges and advantages.
- The balance of power is fluid, and neither country is expected to collapse imminently.
- Need for Reform:
- The conversation emphasizes a desire for the UK and US to reassess their legal frameworks to foster a more constructive environment for growth and innovation.
Key Quotes
- "What if our society has become, in effect, government of the lawyers, by the lawyers, for the lawyers?"
- "The fundamental difference between the two societies is that legal means always determine the ends, the legal tail wagging the economic and political dog."
Conclusion This episode highlights the critical examination of how legal frameworks in the UK and US hinder infrastructure development and economic growth. It contrasts these societies with China's engineering-focused governance, suggesting that a shift towards more practical, growth-oriented policies may be essential for overcoming current malaise in the West.
Further Listening
- For more insights from Dan Wang, consider reading his book, Breakneck: China's Quest to Engineer the Future.
Production Credits
- Hosts: Emily Maitlis, Jon Sopel, and Lewis Goodall
- Production Team: Natalie Inge, Michaela Walters, Mikey Baggs, Jess Williamson, Anna Georgievicz, Shane Fennelly, Arvin Baddowell
- Executive Producer: Louis Dagenhart
- Editor: Tom Hughes
References
- [The News Agents Official Website](https://www.thenewsagents.co.uk/)
Feel free to share these notes or use them as reference material for discussions regarding infrastructure, legal frameworks, and economic policies in the UK and US.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:02Lewis Goodall:This is a Global Player original podcast. What do you think's wrong with Britain? What do you think's wrong with the United States? Now I know your initial reaction is, how long have you got? But there is something which is common, especially in the English speaking world overall actually. We take so long to build anything. Look around you and the chances are you will see in the lived environment of wherever you live, of wherever you are right now more of the 19th century than the 21st. In the UK we take an average of 12 and a half years to build any significant piece of infrastructure with 10 years usually just in the planning process.
0:47Lewis Goodall:Think of it crossrail 30 years end to end. Hinkley Point Power Station 17 years and counting. Don't even mention HS2. Housing hasn't been built in enough volume for decades. Environmental impact assessments now run to 30 ,000 pages, taking seven years to write and approve. We spent 100 million quid on a bat tunnel. None of this happened by accident. And what if that lack of ability to build anything explains so much, not just of our economic problems, but of our political ones too? What if our society has become, in effect, government of the lawyers, by the lawyers, for the lawyers? What if our problem is that we are now a loyally society rather than a building one, where legal means always determine the ends, the legal tail wagging the economic and political dog?
1:45Lewis Goodall:And what does it mean when our principal economic competitor, China, is none of those things? That's the question, the descent into the loyally society that Dan Wong, an American academic, has posed in his extraordinary new book, Breakneck, China's quest to engineer the future. It's receiving rave reviews as a new way of understanding the malaise which has gripped the West. So we asked him into the Newsagent studio to explain what we don't understand about what is happening right now in China, why Europe threatens to turn into a mausoleum continent and whether China and the US are destined for a titanic confrontation.
2:25Lewis Goodall:Welcome to the Newsagents.
2:32Lewis Goodall:The Newsagents. Well, we're joined now by Dan Wong, who has written this extraordinary book. Dan, thanks so much for coming in. What made you want to write the book?
2:41Dan Wang:I spent six years living in China when it was a time where it felt like I was witnessing a pretty extraordinary time period. So when I was living in China between 2017 to 2023, that was the time of Donald Trump's first trade war. That was a time when Chinese technology companies were shooting up in levels of ambition. That was a time when Xi Jinping grew more darkly repressive in all sorts of ways. And I, working as a technology analyst for a financial services firm, decided that we needed new ways to understand China beyond these capitalist, socialist, neoliberal terms that are pulled from the political science textbooks.
3:20Dan Wang:And I wanted to have a fresh and new framework for thinking about this big country.
3:24Lewis Goodall:You talk in a book about how, you know, obviously it's sort of common in the West to talk about China being communist or socialist or whatever. But actually, in so many ways, you know, so many of the policies pursued by the Chinese Communist Party would be a sort of conservatives' absolute fever dream in the West.
3:40Dan Wang:Absolutely. This is a regime that really limits immigration, that really promotes manufacturing, where the political bosses really try to enforce traditional gender roles, where there's pretty minimal redistribution. This looks much more like a right-wing Ronald Reagan Thatcherite country to me.
3:56Lewis Goodall:A way of sort of illustrating the kind of premise of the book is something you talk about early on, which is this bike ride that you undertook when you were living there from Jiang to Chongqing, which kind of, I think, gave you the idea. Could you describe kind of what happened to you there and why that did plant that seed?
4:13Dan Wang:In 2021, I was feeling a little bit cooped up in the city of Shanghai where I was living. This was sort of the peak of the zero COVID enforcement as well as success. And so what I decided to do was to scare up two of my friends to go on a pretty lengthy bike ride with me in the mountains of southwest China, mostly in Guizhou province. And so over five days, we cycled across Guizhou province, heavily mountainous, pretty far away from the coasts. It is China's fourth poorest province. What we saw there was a level of infrastructure much more developed than California or New York, two of America's richest states.
4:50Dan Wang:So Guizhou province has these superb airports. It has not only the 50 tallest bridges in China, but 50 of the world's tallest bridges. And what we saw there was just, you know, the superb infrastructure, including high-speed rail, that really surpasses all sorts of infrastructure in developed world levels.
5:08Lewis Goodall:Something that California has been talking about for 20 years and has, I think, built a sort of, you know, tiny number of miles.
5:14Dan Wang:You're absolutely right. It's been a small section of viaducts as well as concrete and steel in a section of the desert, which is not too difficult at all. And so I think that, you know, the California high speed rail, which is meant to connect San Francisco in the north and Los Angeles in the south, probably will not see any real trains running through it. about three decades after the completion of the referendum that California voters decided to say, well, we need high speed rail between our two biggest cities, whereas the Chinese are absolutely building so many of these, mostly under budget and totally at time.
5:47Lewis Goodall:And the way that you sort of explain this difference, which is, I think, the sort of novel conceptual thing about the book, is you try and explain why that is. It's well known, obviously, that China has made extraordinary leaps in terms of its economic development, its infrastructure development. Although, as you say, I think because China is a relatively close society still, most of us in the West are probably not aware of just how sophisticated and just how advanced that infrastructure has become vis-a-vis our own. But you explain that difference by talking about the different sort of society that the United States and actually most of our Western societies have become versus China.
6:24Lewis Goodall:And you talk about China being engineering society or an engineering state and the American society being a loyally society or a loyally state.
6:32Dan Wang:Just explain what you mean by that. I call China an engineering state because at various points in the recent past, the entirety of the senior leadership had degrees in engineering. And this was engineering of a very Soviet sort in which the last general secretary had a degree in hydraulic engineering. The present general secretary, Xi Jinping, has a degree in chemical engineering. And I think the issue with engineers is that they really like to build a lot of stuff, whether these are roads or bridges or high-speed rail throughout the vast countryside. They also treat the economy as an engineering exercise.
7:03Dan Wang:So they will try to really prompt some of the smartest kids graduating from top unis away from working in, let's say, finance or journalism or something like the consumer internet into working in aviation or semiconductors or really strategic sectors. So it's directed from that level of the Chinese state. That's right. And they really try to reorient people's, all of their directives. And they do this in part by smacking around big tech founders like Jack Ma, or telling the finance industry, you cannot pay workers more than$300 ,000 a year, which was a directive from Xi Jinping last year. And they're also, unfortunately, engineers of the human soul, which is a phrase from Stalin that Xi Jinping has repeated in the last few years, in which they can be awfully literal-minded about treating society as a giant math exercise.
7:51Dan Wang:So I spent a lot of time thinking about the one-child policy, as well as zero COVID, which I lived through, which the number is right there in the name, no ambiguity about what these things could possibly mean. I contrast that with the United States, which I call the Lawyerly Society, because so many U.S. presidents went to law school. If we take a look at the early American presidents, everyone from George Washington to Abraham Lincoln, 13 of America's first 16 presidents had all practiced law. Five of the last 10 U.S. presidents went to law school. Indeed, one was a respected constitutional law professor in the form of Obama.
8:25Dan Wang:Yes, exactly. And so when Obama lectures at the University of Chicago Law School and then becomes president, actually he's treading on a very well trod path. And the issue with lawyers... There have only been two engineer presidents of the United States. One of whom was Herbert Hoover, the other of whom was Jimmy Carter, both of whom are, I think, better remembered for their political failures than their, you know, rousing successes. The issue with lawyers is that they block absolutely everything. And so you don't have stupid ideas like the one-child policy. You also don't have functional infrastructure almost anywhere in the US.
8:57Dan Wang:Now, if I could sneak in a word about the United Kingdom, maybe the only thing stranger than the lawyerly society is the ppe society you've got over here isn't it very strange that all the prime ministers study ppe at oxford university especially at baliol college i find that very very strange how concentrated that is well as a history and politics graduate
9:16Lewis Goodall:i'll leave that to one side although we should return to it because i think it is an interesting distinction but i think this is the fascinating thing like the idea of a lawyerly society is one where, as you say, limits are placed upon things. The opposite of China, right, is that legal regulatory constraints in order to stop doing things. But the fundamental difference is as an engineering society, the objective is to unlock how to do things. And that's the different direction that the two kind of models have gone in.
9:46Dan Wang:That's right. You cannot build a bridge or a subway line without some degree of rationalism. The bridge really has to stand. And in that case, I think you really want engineers to take all of the science, engineering, technology very, very seriously. The problem with China is that they're not all only a bunch of physical engineers. The fundamental problem with China is that they're also social engineers who treat the population as yet another building material to be torn down or remolded as they wish.
10:17Lewis Goodall:I suppose the interesting thing is to consider, I mean, you're right. I mean, obviously, the United States has had a long history because of its particular form of political evolution. It's had a long history of chief executives of presidents who have been lawyers or at least have, you know, however briefly practiced law, which obviously China does not have a totally different legal system, different political system. But it's true to say, though, isn't it? I know you talk about this, but it is true to say that societies like the United States, indeed, like the United Kingdom, they were once engineering societies in a way that's roughly comparable to China.
10:45Lewis Goodall:I mean, you know, in the 19th century, either in the UK or in the US, I mean, you know, zoning law, planning law virtually didn't exist. It was possible, indeed, not just possible, but huge engineering advances took place, whether it was railroads or whatever it happened to be. So it's something that we've lost. It's not something that we never had.
11:02Dan Wang:That's absolutely right. I think that the United States was absolutely an engineering state. I date roughly between the middle of the 19th century to the middle of the 20th century. So over this about 100 plus year stretch, the United States built these canal systems and railway systems and highway systems, as well as these instances of the technological sublime like the Manhattan Project or the Apollo missions that really inspired the world. And I think something really shifted throughout the 1950s and 60s in the United States when the United States absolutely overbuilt. We had urban planners like Robert Moses ram big highways.
11:39Lewis Goodall:It worked in the city of New York.
11:40Dan Wang:Yes, in the city of New York, but also further throughout the American countryside, the U.S. Department of Agriculture was spraying DDT as well as other pesticides throughout the entire farmland. You had the Army Corps of Engineers dam essentially every river in the American West. In the United States, I think one could accurately say overbuilt. And there was a correction, especially among law students at the time, where the students at elite law schools like Harvard Law or Yale Law, where I used to be a fellow, decided that what they were most interested in doing was less the sort of creative deal-making of the sort that many lawyers were in the New Deal cabinet working with Franklin D.
12:22Dan Wang:Roosevelt to implement a lot of ambitious projects. A lot of lawyers' highest callings became stopping projects, stopping projects from both the government as well as corporations. And I think that this was absolutely a necessary corrective in the 60s and 70s to really stop a lot of overbuilding in the U.S. And I am thinking that what we have in 2025 are not exactly the same problems as we had in the 1960s. Right now, the U.S., and I dare say the U.K., suffers from way too little housing construction. People don't have enough homes, that people really need new energy sources, especially clean ones, that the manufacturing base has pretty substantially rusted.
13:01Dan Wang:And I think that what we need is a new governing paradigm in which the elites embrace a little bit more construction and engineering to meet the needs of today.
13:09Lewis Goodall:So what you're saying is, is that part of the problem of our malaise, because I think it's fair to say we have, particularly in the UK, a lot of these problems are even more acute than they are in the United States. part of our problem in terms of sort of relative economic underperformance and a way to understand this malaise which is affecting our economics also our politics as well because the two are obviously interwoven is to say that we basically have still got a kind of paradigm or conception of politics and law which it was designed to deal with the problems of the 1960s and 1970s of overdevelopment whereas actually we have the exact opposite problem now which is underdevelopment but we haven't changed our kind of legal mindset and political mindset.
13:50Dan Wang:That's right. I think that too many of the people who really were activists and changing a lot of the ground rules of a society have now aged and they are now very substantially homeowners. They're at the top of various ladders and they're still more interested in pulling up ladders rather than bring the ladder down so that kids and grandchildren can have economic opportunities. That there are too many people who are citing environmental laws which are absolutely good in many, many ways, but are citing environmental laws in order to stop construction because they have often some sort of vested interest in making sure that their lives are still as good as they expected them to be.
14:29Lewis Goodall:Is there something sort of, is this a sort of continuum? I mean, you describe as the sort of, you have a society which have had an engineering phase and then a sort of loyally phase. Is that a sort of, is there something almost like teleological and inevitable about that? I could China end up in a kind of loyally phase? Or is it something that's more sort of particular to different societies and their own sort of paths of development, do you think?
14:53Dan Wang:Yeah, I love the word continuum. And I think that the word continuum would work very well if we could slide up and down through this continuum. Unfortunately, what it looks like is that we are a little bit stuck. And I am skeptical that the Chinese will end up looking quite like the British or the Americans in terms of having a loyally society. In part because I think that there are very few Chinese emperors or Chinese leaders that have had very substantial training in law. That the law is not quite so respected. That there is quite a lot less autonomy and individual freedom in China. That there is much more a sense of the practice.
15:30Lewis Goodall:Well, there's less of a concept of individual rights by comparison to the Western tradition.
15:33Dan Wang:That's absolutely right. The practice of absolutism has been in place in China for hundreds of years before the European monarchs ever whiffed the idea. And so I see that the Chinese are much more interested in increasing the discretion of the state relative to the individual. And so I think that it will not really be quite ruled by lawyers. Maybe China will get stuck in some ways, but I also think that they are going to continue overbuilding in all sorts of ways.
15:56Lewis Goodall:I want to come back to that and the trade-offs with the China model, because we shouldn't pretend as if, and you don't in a book, in fairness, that, you know, the model is entirely rosy and something that we should completely emulate. But just to push back on the idea of the Loyalist Society a bit, I can completely get that, funnily enough. And I know Britain wasn't your, you know, wasn't what you were thinking about when you were writing this, you think about the United States. But, you know, as a Brit reading this, the lessons from it and the analysis of it, I think, are even more acute and pronounced perhaps than the US for various reasons.
16:23Lewis Goodall:I mean, I suppose with the US, from an outsider's point of view, you know, when I go to the US, I go a lot. Two things. One, the development which does and is taking place, particularly in certain states in the south and the Sun Belt and so on, huge data centres being built, you know, hugely new parts of the economy emerging. plus the fact that when we do think of technological development, engineering, I mean, the US has been responsible for so many of those advances, particularly in terms of technology and the internet since the 1990s, that we have transformed our society. So the Americans, they're not doing too badly, are they, in terms of being an engineering state still?
17:00Dan Wang:No, no, I think that the Americans are still doing very, very well. And I want to praise the lawyers, at least in one respect, which is that lawyers are pretty good at protecting wealth. And I think that is an important thing. IP and so on as well. That's right. I spend a lot of time in Silicon Valley as a fellow at the Stanford University's Hoover Institution. And I think that the West Coast of America is remarkable for being the only region of the world that has not only created a company worth over a trillion dollars, but it has created several companies worth over several trillions of dollars.
17:30Dan Wang:But no equivalent of that in Europe? Not at all. And so when you have, you know, these very rich companies, what it indicates is that the rich feel comfortable about creating big companies in America. They have the protections, they have IP protections. And, you know, somewhat distressingly now, I think that we're able to see that they have political protections if they're able to have dinner with Donald Trump in the White House and fulsomely praise him. I think there's no better country in the world to be a member of the rich, because you can easily transmute that into political influence. In China, if you're a member of the rich, there's a pretty decent chance that Xi Jinping will come around and smack you here and there.
Read the full transcript
18:08Dan Wang:In Europe, one can't even build very much wealth anymore. Most of the wealth in Europe is simply passed down through inheritance. Now, Lewis, you brought up the UK a little bit. I didn't get that much into the UK in my book, mostly because I haven't spent enough time here. Mostly also because I didn't want to be too mean. But let me... Please be mean. Thank you. I have license then to pile on. I think that this is not only the PPE society. What I've been glad to have been able to mention in the pages of the FT that what the UK is really good at is the sounding clever industries. So, you know, these are everything that includes...
18:41Dan Wang:You're saying this on a political podcast. It's very much our speciality. No, no, absolutely. And you're so good at it. So, you know, the sounding clever industries include podcasting and journalism and finance and consulting and universities. He's going for the jugular now. When I said be nasty, I didn't mean this nasty. Jesus. Well, here we go. If we can swear even a little bit, then that's really good. So the UK has very substantially de-industrialized. And I have not quite appreciated how high the housing costs are here and how high the energy costs are here as well. Highest in Europe, pretty much.
19:10Dan Wang:Highest in Europe. And the rule of thumb is that the Germans have, I believe, something like six times as much greater energy costs than the Chinese do. And I think the UK is on par with that. And so there are all sorts of ways in which this doesn't feel like a robust picture of health.
19:26Lewis Goodall:Right. We'll be back with more from Dan Wong just after this.
19:41Lewis Goodall:Here in Edinburgh. I'm Simon Marks. My American Week is next. Reporting from the heart of Cardiff. Discover how today's story affects your life. Listen on our free Global Player app or the new LBC app. LBC, leading Britain's conversation.
20:01Lewis Goodall:The News Agents. When you talk about the PPE Society, do you think that's different from the Laura Lee Society?
20:07Dan Wang:I think that it might be an even worse case because I think that, you know, one criticism I will absolutely concede with the Lawyerly Society is that this is not unique to the United States, that a lot of the difficulties with construction flow from the common law system, which is an inheritance that the Americans picked up from the British.
20:25Lewis Goodall:And just in case people don't know, this is basically, as you say, an English or British legal, particular legal system, as opposed to a sort of codified system that they tend to have in European countries. And so it is something that we've sort of bequeathed to different parts of the Anglosphere world, the US, Canada, Australia, etc.
20:40Dan Wang:And one way to understand the common law system is that citizens or activist groups are able to convince a judge to put a hold on a new housing development, a new infrastructure development. The judges are much more empowered to do something like that. And my view now is when it comes to building public works, never trust anyone who speaks English. Explain why you think that. Well, this is the bequest of the British on the entire Anglosphere, because the Kiwis, the Australians, the Canadians and the Americans generally have not been very good at building. In fact, the Europeans have been much more impressive at building something like high speed rail in Spain or subway lines in Denmark.
21:18Lewis Goodall:Well, again, they have a little bit more of the, I mean, it's nowhere near as much, but they have some of the tendencies that you were talking about in the Chinese system. not so much that they have no regard for individual rights and so on, but in British Anglosphere systems, that kind of Lockean conception of kind of rights, of property rights is so central, as opposed to, you know, most European states have a bit more history of a bit of, you know, dirigisme, right? Like dirigisme, central states, planning and directing. You know, the French built high-speed rail in a way that they did in the 1960s, in a way that, you know, we have never got anywhere close to, partly because the French central state dictates that it will happen and it happens.
21:53Dan Wang:And the French have been excellent engineers as well. their nuclear plants are some of the best run in the world. Some of their smartest people go work in the nuclear plants. And I think that this is something that I hope the British can pick up a little bit from the continent.
22:04Lewis Goodall:I suppose in terms of looking at China, though, I mean, isn't it the case that we wouldn't want that model, would we? As much as a problem, as you say, that the loyally society might be, although, as you say, as well, that can generate its own economic return, because, you know, legal stability is really important. IP that we've talked about, all of those things is a reason so many engineers and people want to come from China to work in places like the US. But nonetheless, as you say, there is something central and much darker to those extraordinary infrastructure projects that we see in China, which is a pretty wanton disregard for individual life, individual rights.
22:38Lewis Goodall:And as you say, a government which is quite happy to basically use its population as just yet another input into the machine and see what comes out at the end of it. We wouldn't want to have that sort of attitude, would we?
22:50Dan Wang:No, absolutely not. And so I spend a lot of time thinking about the brutalities of the one-child policy. This is one of the most central chapters of my book. And I don't know if an author is allowed to have a favorite chapter, but my favorite chapter was writing about the one-child policy. The scale of the brutality that the Communist Party visited upon, especially the countryside, I describe it as mostly a campaign of rural terror meted out against overwhelmingly female bodies. According to China's own statistics, these are the official statistics released by the government. China, over the 35 years of the one-child policy period, conducted about 320 million abortions.
23:27Dan Wang:It sterilized about 100 million women and sterilized about 25 million men. Writing about this chapter was really examining this parade of horrors that the party delivered. And also thinking a little bit about, as a resident and an admirer of Shanghai, that Shanghai suffered one of the most ambitious lockdowns ever attempted in the history of humanity in the year 2022, when for a period of 8 to 10 weeks, 25 million people could not leave their apartment compounds. Many people went food insecure because the engineers were so literal-minded about targeting a number, zero COVID, that it really didn't allow people to go outside and fend for themselves in any sort of meaningful way.
24:10Dan Wang:And I think that it is absolutely not the case that we should adopt almost any part of the social engineering program. But I want to say that there are some things that we can not learn from China, but at least study from China. And China isn't necessarily the only model here. We should study a little bit of the French development, for example, on nuclear, the Spanish development on high-speed rail, some of these Chinese developments on building new bridges, let's say. So let's study from the rest of the world and let's make the West much better through pluralism.
24:39Lewis Goodall:What do you think, which obviously pluralism is not something that is enjoyed in China, and that is ultimately what you're describing, to go back to the continuum, there is a trade-off between pluralism, individual rights, and the ability of central states to direct economic development. There probably is just a trade-off there. I think clearly in your book you're making the argument, and others make the argument as well, that that has become too weighted in one direction, which has particular generational consequences as well. But let's just think about the China model for a moment. Do you think that there's been so much speculation over the years as to whether the Chinese are creating huge problems for themselves over the long term?
25:18Lewis Goodall:Do you think that the Chinese model as it has existed will eventually come undone?
25:24Dan Wang:I think that there are absolutely self-limiting aspects of the Chinese model, in part by thinking about something, for example, like the one-child policy. The Chinese felt that they had a crisis of overpopulation when China's population crossed over a billion people in the year 1980, and so they imposed what they thought was an elegant solution. And what is the problem today? Well, very many women have no desire to have children, in part because the state has told them one child is best. And China's TFR, the total fertility rate, is 1.0 right now, one of the lowest in the world, far lower than Japan.
26:00Dan Wang:And so one can cite all sorts of these instances in which the Communist Party has made pretty substantial mistakes that looked perhaps reasonable at the time. And they have, for example, crushed the property sector. And that is one of the great problems of China's economic malaise right now. I think there are absolutely self-limiting aspects of China's system. And what I want to caution against is feeling like the system will collapse of its own accord in exactly the same way that the Soviet Union, for example, did. I think that China is not exactly the same as the Soviet Union. It has a much more functional economy than the Soviets ever did.
26:34Dan Wang:It is not exactly like Japan, because I think that there is also a more functional economy with a much more greater focus on catching the next technological wave that the Japanese were not able to accomplish. My view is that if we take a look at only the negative side of the ledger sheet, if we take a look only at the worst aspects of the United States or the United Kingdom, it can be a pretty ugly picture. And what we have to do is also balance that with the strengths of which the Chinese also possess quite a lot. And my view of U.S.-China competition over the longer term is that this is something that's going to last for years and decades to come.
27:12Dan Wang:And we shouldn't expect either the United States or China to collapse. that either system will simply dissolve. The country that's ahead, I think, will make mistakes of hubris as well as overconfidence, much as he did by smacking around entrepreneurs or having this controlled demolition of the property sector. The country that's behind will feel the crack of the whip really to try to reform. So I think that this is going to be a dynamic race over the longer run. Who do you think is ahead right now? Very hard to say. I think that, you know, coming to you from the United States, I would not say that President Donald Trump has covered the country in glory, that there are all sorts of problems right now that are completely self-inflicted, I think, by Donald Trump.
27:51Dan Wang:There's economic problems. There's the tariff issue, cost of living issues. He has completely blown up the diplomatic goodwill that many people feel have felt disposed, well disposed towards the United States.
28:05Lewis Goodall:There's war against American higher education institutions, which have been the motor of American economic dynamism for a long time.
28:12Dan Wang:Speaking to you, as a scholar at Stanford University, I don't like feeling quite attacked in a general way by Donald Trump. And so, you know, there is this odd retribution that Donald Trump is visiting against his political enemies. There's all sorts of issues with rule of law, you know, flagrant corruption.
28:29Lewis Goodall:I was going to say, I mean, on that, I mean, is Trump, I mean, not in a way that you, I'm sure, would approve of, is Trump moving America away from the Loyalist Society in the sense that we have an administration and at least for now a Congress and a judicial branch, which is relatively unwilling to impede his power, which compared to most American administrations has been pretty disregarding of the rule of law in all sorts of ways. I mean, is he moving America away from the Loyalist Society?
28:57Dan Wang:No, I would not say so. First of all, I would say that Donald Trump is fundamentally a product of the lawyerly society. We cannot understand Donald Trump's business career without seeing how central lawsuits are. This man has sued absolutely everyone. He has sued his former business partners. He has sued his political opponents. Is he suing the BBC yet? I'm not sure if that has been filed.
29:17Lewis Goodall:Well, he threatens you, but curiously enough, it hasn't materialized as yet.
29:20Dan Wang:Well, maybe after this interview, we'll see that case in court. Maybe he'll see us. Yes, indeed. So, and there is a way in which Donald Trump is very lawyerly in terms of intimidating people, flaying accusations left and right, and trying to establish guilt in the court of public opinion. And there was a time, I think there was a flicker of a moment when we might have thought that Elon Musk and Doge could have brought some engineering ethos into the U.S. government. Unfortunately, Elon himself has gone kind of crazy himself. I think that is generally acknowledged. And Elon Musk quickly fired as co-president six minutes after his tenure.
29:55Dan Wang:And so I think that there might have been a flicker of a moment in which Donald Trump really did sort of try to do the sort of reforms that would be necessary to move the United States forward. They also think that Donald Trump is a product of the lawyerly society in another way, that too many people have not felt that their lives have gotten substantially better, that manufacturing losses have been very substantial, cost of living has really gotten up, especially in housing. And I think that when the economics aren't really good, people turn towards populist politicians like Donald Trump, as well as maybe others we can name in the UK as well as Europe.
30:29Dan Wang:And I'm not really sure that these populist solutions will really meet the needs of the moment.
30:32Lewis Goodall:But indeed as well, so often more liberal political forces have tended to intellectually and conceptually seem unable to break free of the kind of intellectual shackles of the period that you're talking about, of this sort of long period from the 1960s and 70s, to save the system from itself against these populist forces.
30:53Dan Wang:Something I'm optimistic for, because I'm always a sunny optimist from California, is that, you know, the United States will be able to have some form of reform. That I think that there is a need among especially the Democratic Party to be less lawyerly. The Democratic Party is far more lawyer than the Republicans.
31:09Lewis Goodall:I think it's possible because it is possible, of course, again, I mean, because this is, you know, we haven't seen this play out before. Let's assume your conception is right. We are anchored in this kind of loyally society. Obviously, the very fact of that presumably makes it very difficult to reform the system because actually what you require, it's a sort of slight catch 22, which is you need to break the system. And in order to break the system or at least substantially reform it, you need to break out of that kind of loyally kind of black hole that you're stuck in.
31:35Dan Wang:So is it actually possible? Well, Donald Trump is breaking parts of the system, and we need to put it back together again and accept in a much better way. I think that there is much of a conversation among the Democratic Party of, you know, how do we actually build more housing? How do we actually build more clean energy? And that is represented very well by the book Abundance.
31:54Lewis Goodall:And I think that there is also as well as Derek Thompson.
31:57Dan Wang:And I think that there is also much more energy within the Democratic Party to think about how to properly do industrial policy, how to, you know, build a lot more manufacturing jobs. how to build a lot more clean energy. And in some sense, I still feel that, you know, Donald Trump is always the wrong answer, but he often asks good questions. And once you break a lot of things, you know, the one thing that I'll say to be kind to Donald Trump and to get this lawsuit off our backs is to say that Donald Trump is disruptive. And often it changes, shakes out in bad ways, but one could always hope that it shakes out in a better way this time.
32:32Dan Wang:Our lawyers will take note.
32:33Lewis Goodall:So if you had to, let's talk not just about the US, but the UK as well here, practically speaking, to break out of this malaise, to break out of the lawyally society, what do we have to do?
32:44Dan Wang:Well, my big hope is that as the UK, as well as the US, let's say, do simple pro-growth things like build a little bit more housing in places that need a little bit more housing. More young people will move in, more businesses will move in, the neighbors will feel that, oh, isn't it kind of nice to see a few more baby strollers on our street, to have a few more bookstores or bakeries on our street? And that triggers a little bit of a positive cascade of being excited for growth. And I think that this excitement for growth is something that China as well as the United States really share, that you don't really need to convince the people or the elites that growth is good.
33:24Dan Wang:Whereas here, what I find in Europe as well as the UK is that it's a little bit tougher sleds to really try to convince people that growth is good. They kind of view it as abstract. They sort of fear it. There's maybe 10 to 20 percent of the population that really believe in degrowth, which I find a very strange ideology.
33:43Lewis Goodall:Well, I think one of the things that you don't get in the US, but you definitely get, and I've got this a lot from different politicians, and certainly on that part of the spectrum, is if you start talking about growth, the instant thing. And I can understand it, but it's interesting. The instant thing that you get is to say, well, growth for whom? You know, i.e., what's the point in having growth if the top 1 % are taking it all?
34:02Dan Wang:Well, let's have growth for everyone. And I think that has to be the response that we have growth much more for, let's say, the bottom few quintiles of society, that I think what we can achieve is growth for all, that what many people need are more houses, better mass transit, better jobs. And so I don't think that we should necessarily preclude that growth is something that can only exist for the top 1%. And I think that if we are able to have a few of these positive flywheel effects and to have lower energy costs, lower housing costs, I think that people will demand more of it. And something that I think that the Americans and the Chinese are both really good at is that the governments have this raw craving for geopolitical power that they really wear on their sleeves.
34:47Dan Wang:And I think for the most part, that is making the country more sovereign and more autonomous in various crucial ways. The American entrepreneurs and Chinese entrepreneurs really care about making donuts. You know, they want to hustle. They care about the money. Whereas here in the UK and Europe, it just becomes really, really difficult for people to imagine building really big businesses at all. I'm still often struck that what's really holding up the European equity markets are Asian consumers buying French handbags. That doesn't sound very sustainable to me.
35:15Lewis Goodall:When you come to Europe, come to the UK, do you get the sense of a realized sense of what some people talk about now, which is a museum continent, continents just out of the race?
35:25Dan Wang:Oh, well, I find that way too nice. In my opening pages, I call Europe a mausoleum economy. And so, you know, it is very beautiful, but feels quite stagnant and dead. And I do spend quite a bit of time in Europe. My wife is Austrian. And over the summer, we spent quite a bit of time in Denmark, which is one of the great economic successes of the EU so far, mostly because of Novo Nordisk. But it just happened to be the case that while we were living in Copenhagen over the summer, I cracked open the newspaper and I saw that Novo Nordisk's share price fell by about 30%. They had to fire the CEO, in part because of competition from the American side of Eli Lilly.
36:01Dan Wang:And what I really, really worry about with Europe is that, on the one hand, their top firms are not quite as competitive as American firms in biotech and financial services, in software as well as AI. And on the other hand, they're clearly being de-industrialized by the Chinese right now, that the Germans especially are losing a lot of their automotive and industrial expertise to the Chinese. And so when you're sort of being squeezed on both sides, I think that as the economy weakens, I suspect the politics will not get better. And if these populist parties all win, I'm a little bit skeptical that they will be able to deliver all of these solutions that make the economy more competitive and more growth-friendly.
36:40Lewis Goodall:And as you say, what's extraordinary about it, and we've got that exact malaise in Britain as well, and in the EU, the kind of lack of urgency that there is. People here don't want to make donuts. What's up with that? Just finally, do you think there is a lot of speculation about, and obviously there's been much analysis about whether, you know, the US and China are destined for conflict? I mean, clearly they're in the midst of some economic conflict right now. You talk in the book, actually, and you've alluded to it there about how similar the two countries are in a weird way in terms of the public and public attitudes in a way that is not commonly appreciated.
37:13Lewis Goodall:Do you think that they're destined for conflict?
37:15Dan Wang:No, I don't think that it is inevitable. But, you know, this is something that I hope that all of us spend a little bit of time thinking about to prevent the next great conflagration in the world. World War I caused several millions of deaths. World War II cost several tens of millions of deaths. And we really don't want to get into the next order of magnitude in anything like World War III. And what I'm really hopeful for is that people become a little bit more curious about everyone else. I think that especially writing as a Canadian, spending most of my time in the United States, I very clearly choose the United States because I prize pluralism, because I prize freedom of speech.
37:52Dan Wang:I prize the ability to buy books when I can. What I'm really trying to do is to write for people living in, let's say, a lawyer in Indiana or someone living in, let's say, rural Sussex in the UK. Many of these people will never actually visit China. And what I'm really hopeful is that people can be at least a little bit more curious about what is going right in China, what is desperately going wrong. And I think that the Chinese should absolutely also be more curious about Europe as well as the United States. And I think that if we're all adopting an attitude of mutual curiosity, that's the best way to keep us all out of trouble.
38:28Lewis Goodall:Well, we may be good at sort of sounding clever, but we're even better at sounding curious. The best at it. Hey, at least you've got a growth industry. Indeed. Thank you so much for coming. Thank you very much.
38:47Lewis Goodall:The News Agents Well I found that absolutely fascinating A reminder that his book Breakneck by Dan Wong is out now I really can't recommend it enough No John or Emily this week of course They're off watching Zed Car reruns with Nigel Farage At the Bletchley Park Airshow But of course they'll be back next week Thanks as ever to our production team On the news agents Natalie Inge, Michaela Walters, Mikey Baggs Jess Williamson, Anna Georgievicz, Shane Fennelly And newly promoted Arvin Baddowell You really can't get the staff these days Our exec producer is Louis Dagenhart Our editor is Tom Hughes A reminder to listen to my imaginatively titled Sunday show on LBC Sunday with Lewis Goodall from 10 for the best political interviews at the weekend.
39:23Lewis Goodall:We though will be back on Monday. Have a lovely weekend. This has been a Global Player original production.
From the publisher
While China is an engineering state, tech analyst Dan Wang says the America and the West are "lawyerly societies", reflexively blocking everything - good and bad - and it's halting real progress.
Dan joins Lewis in the studio this Friday to discuss why Europe stopped building, how lawyers contribute to a slow in progress, and what all this means for wider geopolitivs and the rise of the far right.
The News Agents is brought to you by HSBC UK - https://www.hsbc.co.uk/