https://www.wsj.com/arts-culture/books/breakneck-review-lawyers-vs-technocrats-1aefcff8
‘Breakneck’ Review: Lawyers vs. Technocrats
The United States is a ‘lawyerly society’ that excels at obstruction. China is an ‘engineering state’ dedicated to technological supremacy.
By Tunku Varadarajan, The Wall Street Journal
…
Dan Wang asks the question in “Breakneck,” his brilliant book—equal parts gripping and depressing—about “China’s quest to engineer the future.” His question, distilled to its essence, is this: Can the success of China—with its dams and bridges, highways and high-speed rail networks, high-rise cities, world-altering factories and, increasingly, top-notch tech and military prowess—arouse or alarm America into rediscovering its soul and recovering the productive mojo that made the U.S. the most powerful nation in history?
A gloom quickly descends as we read this book. It’s hard not to conclude that the battle is already lost and that, in a generation or two, a hard-edged, hypernationalist, ruthlessly mercantilist and relentlessly revanchist China will have the world at its mercy. Mr. Wang hits us with the statistics: China has the capacity to produce 60 million cars a year out of an annual global market of 90 million; it has 100 million people working in manufacturing, as opposed to less than 13 million in the U.S.; in 2022 China had 1,800 ships under construction, compared to America’s five; by 2030 China will have 45% of the world’s industrial capacity, while the U.S. and all other high-income countries combined will muster only 38%…
Which leads us to the thesis of Mr. Wang’s book: Whereas the American elite is “made up of mostly lawyers, excelling at obstruction,” the Chinese state is run by a “technocratic class, made up mostly of engineers, that excels at construction.” China is “an engineering state,” Mr. Wang observes, “building big at breakneck speed, in contrast to the United States’ lawyerly society, blocking everything it can, good and bad.”… [end quote]
In 1957, the U.S.S.R. launched the first satellite, Sputnik, which shocked the U.S. establishment into launching STEM education programs that many METARs benefited from. In addition to academics, I remember practical hands-on classes (for boys) in metalworking, auto shop and woodworking. (Girls had home economics and sewing.)
The slow descent of the U.S. as a manufacturing superpower began in the 1980s when (I was shocked to read) M.B.A. economics books began to teach that the purpose of a company is to maximize shareholder value. (Not to invent, produce, market and service superior products and services.)
The greatest Macroeconomic trend change is the cyclic transfer of superpower status.
The habits and attitudes of the American public have changed to the point that the fundamental hard work needed to regain leadership may be impossible.
Coincidentally, both England and France are featured in separate stories about overwhelming government debt and possible government collapse due to political resistance to reducing budget deficits.
The U.S. is moving in the same direction on a larger scale and probably longer time frame.
As investors, how to we plan for the long term? I’m sure the usual answer will be to hold stocks in a low-cost S&P 500 fund in the expectation that it will grow faster than inflation. But this doesn’t necessarily work in the case of stagflation.
Wendy
