EVERY SPOKEN WORD
145 min read · 28,968 words- 0:00 – 6:19
Is China Really on the Brink?
- CWChris Williamson
"America doesn't win the next era because it's brilliant. It wins because everyone else is screwed." What's that mean?
- PZPeter Zeihan
Doesn't exactly fit on a bumper sticker, but yeah, that broadly works. Uh, you got two big things that are going on. Uh, number one, in the globalized world, it's all about who you can access safely, and in the Western hemisphere, we really don't have to worry about any security threats from a trade point of view. So people always talk about, "Oh, if the US and China get into a war, won't that be bad for X, Y, or Z?" It's like, I don't mean to suggest it would be a piece of cake. But the, the Chinese are dependent on trade and we're not, uh, it's really that simple. And if we can nail down Canada and Mexico in a productive relationship, you know, we used to call that NAFTA or NAFTA 2, we're now having second thoughts. Uh, that's half the hard work right there. Uh, in addition, we export food, we export energy. The Chinese import both, biggest in the world, in fact. Uh, and so maintaining supply chains for us is an issue of building the industrial plant, and while you can't just wave a magic wand and make that happen overnight, we've done this several times before. Every country on the planet has. Of course we can do it again. It would just be nice if we started sooner rather than later. Uh, the other piece is that the Chinese stopped having babies about 45 years ago, and they're now on the verge of running out of 50-year-olds. And there is not an economic model that humans have yet to dream up that will work with where they will be demographically in less than 10 years' time. So we are living in the equivalent of, like, 2006 subprime where everyone's like all "ooh" and "aha"-
- CWChris Williamson
(laughs)
- PZPeter Zeihan
... and it's all about to go tits up.
- CWChris Williamson
(laughs) S- uh, appropriately apocalyptic from you, uh, to start. Um, the stuff about China, is, is that a challenge of just geography, uh, virome, biome, topsoil, like, just sort of the, the constitution of where they are? Is that, that sort of one of the fundamental problems?
- PZPeter Zeihan
All of that, all of that is legitimate concerns. Uh, the river where most of them live on, uh, the Yellow isn't navigable. They have never been able to use it for trade, so they've never internally traded among themselves. Uh, the one river they have that is navigable, the Yangtze, has always been an independent pol- well, I shouldn't say always, but often been a political, uh, an independent political entity going back for 3,000 years of Chinese history. And down in the south in the tropics where you've got Hong Kong, you've got city-states in little enclaves of flat land that have always looked to the outside world rather than to the Chinese. Uh, the soil sucks. Uh, the northern part where 70% of the population lives, it's loess soil in a drought zone. So if anything ever happened to logistics or distribution, what would go down in Northern China would be what has gone down in Northern China 27 times before, and that's civilizational collapse. If we were talking about any country that had fewer people than the Chinese have always had, you know, that would just be the end of them. It's just that there have always been enough Chinese in the past to pick up the pieces and move forward on the other side of the break. But that requires you having children, and so this really is an end to the concept of China and the concept of even the Han Chinese, because we're in a situation now, well, where probably they have more people over age 4- 54 than under. And, I'm sorry, that just doesn't work, uh, and very soon it will be over. That's before you consider the broader geography of China versus the rest of the world. You got the first island chain off the coast, so the Chinese have never, ever, ever been able to be a global commercial power except when the United States, when it created the global system, told everybody that they couldn't bring guns to trade talks. And that one decision that we made allowed the Chinese to play on the global field in a way that they just never could until that point. And so lo and behold, this is the one era of Chinese history where they're unified and successful.
- CWChris Williamson
Tell me more about the guns to the meetings rule and how that helped.
- PZPeter Zeihan
Sure. So before World War II, it's a good break, um, we basically had an imperial system where if you wanted links to resources and markets and populations that were outside of your home country, you had to build a navy and you went and took it. You built your empire, and those empires attempted to not trade with one another if they could help it. They just traded within their own network. Uh, that model generated what we like to call history, and it led to World War II when all the empires crashed and burned at the same time fighting for dominance. Well, at the end of World War II, the only navy that was left that was worthy of the name was the American Navy, and we had never been a trading power because we more or less had a continent to ourselves and were still digesting the continent. So we had this idea that we will use our navy to protect everyone, and we will allow everyone to trade with anyone else, and we will allow our market to be open to your goods if, if in exchange we get to write your security policies so we don't get another conflict like this again. And so one of the things that people want to break down the trade relationships and say that it's unfair for the United States, what they forget is it was supposed to be unfair to the United States. From an economic point of view, we bribed up an alliance, and if you remember your history, it wasn't just Britain and Germany and Japan and Korea and Taiwan and Italy that were allies during the Cold War. It was China too, because it was all about boxing in the Soviets, and it worked beautifully. Uh, the idea that this should be recalibrated in a post-Cold War environment, perfectly reasonable, but if you don't want to pay people to be on your side, they need another reason to be on your side. And so what we're seeing in American politics right now is this kind of, um, cognitive disconnect where we still want everyone to do everything we say, but we also don't want our market open, and that is-
- CWChris Williamson
Ah.
- PZPeter Zeihan
... not a viable long-term plan.
- CWChris Williamson
Okay. So Chinese demographic collapse, you've said China will be gone in 10 years.
- PZPeter Zeihan
China as we currently understand it, yeah. There'll still be some Han. Give it 50 years, there might not be.
- 6:19 – 11:08
Has China Been Lying About Their Data?
- CWChris Williamson
Uh, so China very populous. Uh, people would- might say, "Well, if I just look at the numbers," you said before that numbers were the solution last time. There's more numbers now. I'm going to guess that the issue is that the numbers are trending in the wrong direction, that it wasn't-
- PZPeter Zeihan
My God, so bad, so bad. (laughs)
- CWChris Williamson
Yeah.
- PZPeter Zeihan
So, um, since I talked to you last, there, there seems to be this reckoning that's going on in the statistical community in Ca- in, uh, I said Canada. Where'd that come from? Sorry. You picked me up right after doing another project in China. Uh, the issue appears to be that, um, they now believe, the stat- statisticians now believe that the local and regional governments have been lying about their demographic data for over 25 years. Uh, and so after, let me back up. Um, after Tiananmen Square, you know, 10,000 people killed by tanks in the- in downtown Beijing. The Chinese Communist Party's like, "Well, that was no fun whatsoever. Let's try to not to have to- ever have to do that again. Uh, one of the ways we're going to make sure that happens is we discovered that, you know, there were kind of two kinds of protesters. You had the white-collar workers that just made signs, and they were really easy to run over with tanks. And then you had the ones that were kind of scary that brought wrenches and guns. So you had white-collar, and you had blue-collar." So why don't we move our entire economy from a blue-collar economy to a white-collar economy? Problem solved, 'cause white-collar folks live in high-rise apartments. You can cut off their water. You can bolt them into their house. You know, there's lots of ways you can deal with white-collar protesters. Blue-collar, little different. So they started advancing their STEM work. They started secondary and tertiary education systems. And, you know, well, this wasn't a stupid plan. Uh, we can critique how successful the transition was and why they were a manufacturing economy and still are, and really weren't ready for that kind of fast transition. Different topic. But the thing is, when you go to primary school and secondary school and tertiary school, the first time you pay taxes is typically when you're 21, 22 or 23. So there's a delayed gratification here, which as Americans like to say, the Chinese have no problem with. It's false, but whatever. So the first big crop of these new white-collar workers who were supposed to be working in high-paid jobs and paying lots of taxes, that was supposed to manifest in calendar year 2019. But then there was COVID. And in China, COVID lasted a lot longer, and they really didn't get recovery until 2023, maybe even early in 2024, and so they didn't get any good data. And then when they did get the data, they're like, "Whoa, tax receipts are down." That's the opposite of what's supposed to be happening. And when the statisticians in Shanghai went and looked back at everything, they're like, "Okay, here's the problem." In a first world country, there are dozens, hundreds of touch points where the government becomes convinced that you're a real person. You know, you- your mom goes to neonatal, you're born, every immunization, matriculation for every grade level, you pay taxes, you, you get your driver's permit, you get your driver's license. There, there's thousands throughout your lifetimes. The first three in China, not birth, 'cause until recently, not all Chinese were born in hospitals. The first one was when you get a single battery of immunizations at some point around six months old. What they discovered was that the doctor who was giving the shots got paid per shot, so the doctors lied about the amount- number of shots that they got. The second point is when you enroll in kindergarten. Well, local governments get subsidies from the federal system based on how many students matriculate. So the local governments lied about that. The third point is when you pay- pay national taxes for the first time, which is typically 17, 18, 19, unless they switched to tertiary education, then it's 21, 22, 23. So you get to calendar year 2024, and the Chinese realize that the children that they thought started to be born in the late 1990s were never born at all. And so the question they have, and there's no way to get the data, is, um, "Did we over-count our population by 100 million people? Or did we over-count by 300 million people or more?" So even according to the official statistics, China is no longer the most populous country. That's India. It has been for a while, probably has been since about 2006. The Chinese are now publicly admitting that their birth rate has been lower than the United States' since 1991. And it looks like it might be significantly worse than that. So yeah, 10 years, high confidence.
- CWChris Williamson
Wow.
- 11:08 – 17:21
Can AI Save Us From Population Decline?
- CWChris Williamson
Um, since the last time that we spoke, AI has taken on even more of an important role. Uh, yeah, I'm aware. I'm aware.
- PZPeter Zeihan
(laughs) .
- CWChris Williamson
Like, uh, just- I think one of the... It's- it's an odd, uh, it's not happening and it's good that it is, uh, sort of scenarios that happens, especially when it comes to birth rate decline, is g- whether it's- we don't need more people on the planet, we're a scourge on the earth, fragile world hypothesis, climate change in future, it doesn't matter in any case, capitalism, life's miserable and I don't want kids or young people to be born into a world where-
- PZPeter Zeihan
Everyone's trying to shoehorn it into their existing worldview, sure.
- CWChris Williamson
Correct.
- PZPeter Zeihan
Yeah.
- CWChris Williamson
Yeah, yeah, yeah. The demand for answers outstrips their supply, so they repurpose old answers into a new problem. Um, one thing that I am interested about is, uh, some of the losses in productivity, uh, being offset by increases in efficiency enabled through robotics and AI. China seems to be pushing pretty hard on this stuff, and not bad at stealing-... AI technology when push comes to shove and repurposing it?
- PZPeter Zeihan
It's, uh, I mean, honestly, it's, it's software. It's really easy to steal. You just need a jump drive.
- CWChris Williamson
Yeah. Um, how much could that be a lifeline, uh, for somebody like China, and then also for the rest of the world when we think about demographic decline, uh, more broadly?
- PZPeter Zeihan
Sure. Well, let, let's start with the obvious. Um, 80% of applications for AI that I have seen, and the other 20% are not a different category, they're just in- in flux, but 80% I've seen, i- it's not about where we have the work shortage. It's about white-collar workers. It's about making white-collar workers either redundant or more productive. And if you're into some degree of data collation and assessment, uh, you're in real trouble. Uh, if you have the brain power to take the data in front of you and make something of it, you're probably fine, at least for now. So right now, if you're, like, say, a paralegal, oh, God, you're screwed. That whole job category is gonna go away 'cause your job is basically to research multiple cases and bring the information together for someone who will then take it and do value-add. Your job is to collate, and AI can do that in seconds. Um, once you start doing the value-add, uh, by the way my doctor put it, it's kinda like 80/20. It's like 80% of it's pretty good and 20% of it is really not, and when you're prescribing medications, the 20% really matters. So doctors are fine, but the people who do the research for them, maybe not so much. That's not where the job shortages are. The job shortages in the advanced world, especially United States, are all blue-collar. They're welders. They're electricians. They're not coders. Uh, so it's not that this is a negative from my point of view. It's just, it's getting a little overhyped, and most of the people who are doing the, the writing and the panicking about it are, of course, white-collar workers, um, and that colors the discussion. Uh, it doesn't mean that it will always be like that, but that's where we are now. And the pace of improvement, while it's very noticeable, I would yet... I would not yet call it revolutionary or particularly impressive. Uh, I mean, I use it, but I'd like to think I'm pretty good at that 20%.
- CWChris Williamson
Mm-hmm.
- PZPeter Zeihan
All right. That's piece one. Uh, piece two, the Chinese. Um, the Chinese problem is that they've run out of people under age 50, and it's people under age roughly 45 that do the consuming and have the kids, and there is no way that A can- AI- uh, AI can help with consumption or child-rearing. So the robotic systems that the Chinese are working on, not that they're not important, but AI only helps to a degree there. Uh, AI is- cannot physically move things. Um, it can learn from systems. It can design systems even to a degree, again, 80/20, uh, but it can't actually produce. Artificial intelligence is a completely different technological suite from automation, and even if automation could sol- solve the production side of the equation as the Chinese run out of workers, robots don't pay taxes-
- CWChris Williamson
Mm-hmm.
- PZPeter Zeihan
... and they can't raise kids and they can't consume product. And so even if the Chinese could maintain their production levels without people, they'd still be dependent on international trade that they can't guarantee and on the largesse of the United States in the long term. It doesn't change their core problem.
- CWChris Williamson
Yeah, AI isn't going to be able to fix the topsoil.
- PZPeter Zeihan
No, no. I mean, not as we understand it.
- CWChris Williamson
Yeah. Well, may- you know, g- give us 50 years, we'll see.
- PZPeter Zeihan
Yeah, we'll see.
- CWChris Williamson
Um, uh, Japan, South Korea-
- PZPeter Zeihan
But 50, 50, 50 years, that is the right timeframe. I, I haven't talked to anyone who's involved in Silicon Valley at all who expects us to get general-thinking AI before the 2040s. And based on what's going on with the large language models, that date keeps getting moved back. This is not a technology that's leading us in that direction.
- CWChris Williamson
Interesting, the sort of, uh, technological progress that typically you see at this exponential curve, with AI, seems to be doing what history does, crawling and then leaping and then crawling and then leaping, and it makes it kind of inherently unpredictable. I don't think many people saw what was gonna happen with LLMs in advance. I remember reading, and' an- and Nick Bostrom's Superintelligence, what, a decade ago, I think, that came out? Maybe... Yeah, a decade, let's call it 10 years ago, something like that. And, uh, that was, uh, the best minds on the planet contributing to the best mind on the planet trying to work out whether or not... At no point was it like, "Well, you know, these sort of things are gonna predict what you're gonna say next, and then if you just scale that up enough, and NVIDIA becomes a $3 trillion company, maybe it'll be fi- maybe, maybe we're gonna get it that way." Nobody saw it coming. Um, so yeah, there were some-
- PZPeter Zeihan
Yeah, I mean, considering, considering that you can fit the entire algorithm set and training data for ChatGPT on a thumb drive that's about half the size of this, no. It's like, (laughs) it's like I look at NVIDIA's, uh, valuation, like, you know, this, I mean, great for them, but, you know, this is, this, this is the very definition of a bubble. All it takes is a sh- couple of corporate thefts and everything that's special about them goes away.
- CWChris Williamson
Wow, yeah, the, uh, the security
- 17:21 – 25:19
Can We Survive Demographic Collapse?
- CWChris Williamson
must be intense for that. Okay, so, uh, Japan, South Korea, Italy hitting new fertility lows, even more than in the past. Interesting that this has now sort of come across into, into Europe. When, when will the media and sort of the wider world accept that birth rates are as big of a priority as they are?
- PZPeter Zeihan
I mean, everything with demographics is glacial. It takes decades for it to arrive, and so everyone just like, you know, hurry up and wait, hurry up and wait, and then the day it arrives, it's too late because you are now a bloody smear under the glacier. Um, in the case of Japan, we actually have a culture that saw this coming, and they have done a number of things over the last 30 years to make it easier to have children, to stay in the workforce longer, and so their birthrate has actually ri- risen quite a bit. Nowhere near replacement levels, so I don't want to oversell it, but it's now higher than not just China and Japan and Taiwan and Germany and Italy, but also the Netherlands and India (laughs) and Thailand. Yeah, India, India's aging. Uh, so the, the math is going in a different direction. Um, everyone is still sliding, but we're all sliding at a little bit different rates, and you play that out over decades, and it really matters. So China probably, with the de- data we have right now, is in the worst shape.
- CWChris Williamson
Mm-hmm.
- PZPeter Zeihan
And after that, it's, uh, kind of a three-way tie between or among Germany, Italy, and Korea, most likely.
- CWChris Williamson
... the fact that this, uh, bleeds across into Europe, sort of, west, west, is, um, I know, it- it- it feels, it- it definitely feels like it's coming home to roost, in a way. It- it- it's way less theoretical, uh, with the fact that it's- it's already spread over here.
- PZPeter Zeihan
Yeah. At- at the moment, most people are, when they think about demographics at all, they think about it in terms of federal budgets and the baby boomer retirement and how much it costs to pay for pensions, and, you know, that's- that's part of it, but that's just the leading edge. Uh, the baby boomers are aging out. The last of them are gonna be retired in five years. Uh, and in most of the world, there wasn't an echo generation like the millennials in the United States, so we really are at the beginning of the end here.
- CWChris Williamson
Are we entering a labor shortage that no one's ready for? Is there, is there any country that can handle demographic collapse the best, better?
- PZPeter Zeihan
Uh, the bottom line is, if you still have people in thirty, in your thirties, uh, then you still have a chance to have kids. So when I look at countries like, say, you know, not just the United States, but Germany... No, excuse me, not just the United States, like India or Mexico or Poland or Brazil, you know, these are all places that have not passed that Rubicon just yet. And so with the way we understand economic theory and the way that we understand biology and parenting, they don't require reinvention. They just need to encourage their young people to have kids for some, in some way, for whatever reason they wanna m- modify, uh, the language. But once you pass that, once your average age slips past 40, and especially, uh, past 45, there's no longer a traditional biological path.
- CWChris Williamson
Mm.
- PZPeter Zeihan
It's about smoothing the decline, stretching it out, and a number of European states have proven to be very good at that. Japan has proven to be surprisingly good at that. But it's still a bit of a starvation diet in the long run, unless you change the economic model. So whether it's fascism or socialism or capitalism, everything is based upon the balance between labor and capital and supply and demand. That's how we understand ano- economics, how we have understood them for a millennia, half a millennia. If you can come up with something new, and I'm all ears, then maybe it will work in a different demographic profile. Um, at the moment, the leading theory, and it's, it won't work, is, of course, um, modern monetary theory. Uh, that just shuffles those four factors. It doesn't really change the math. What the Trump administration seems to be trying, whether or not they're doing this consciously or not is the question, uh, is some sort of, um, metered demand, a restricted demand model, where your demand is only met if the government greenlights it, and other people's demand, that just doesn't count, that doesn't factor in. I'm not saying I think this is a good idea. I'm saying it's like the only thing that I've seen in the last decade that might theoretically apply to a future society.
- CWChris Williamson
I- I keep on hoping for some sort of fantastic hopeful leg up, some lifeline that's going to be thrown, and every time that I do deeper and deeper research into it, it- it just gets kind of worse. What, I guess what I'm interested from a geopolitics standpoint is how a shrinking workforce changes the relationship between countries. We understand sort of what it does within countries, um, but how does that change the geo part of the geopolitics?
- PZPeter Zeihan
Countries that are aging out but haven't yet crossed that line, they've run out of consumption but they're not yet a retirement home, those countries are really, really dependent upon exports. And Korea's probably the poster child for that. China is very close second. They need an open globalized world 'cause they can never consume what they produce. And so if they're gonna have any income and any long-term tax capacity, it's going to come from selling stuff to other countries. The thing is-
- CWChris Williamson
Ah, of course.
- PZPeter Zeihan
... the cou- the countries that have the youth, India, Brazil, Indonesia, Turkey, haven't risen in wealth to a level to absorb global manufacturing capacity. The only first-world country of size that's left that is still a net consumer is the United States. And while I can say a lot of negative things about the Trump administration, one thing that they really do understand is the consumer base of the United States is a tool of geopolitical power, and extending or denying that to other countries is a very powerful negotiation tactic. I mean, we- we needed to negotiate a second round of Bretton Woods, a second round of globalization. This is one way to do it.
- CWChris Williamson
Wow. I totally... Yeah, that- that- that makes complete sense. If you have a shrinking population internally, and you don't want your GDP to just fall through the floor, you need to get people who do have spare people, you do have countries that have spare people, to buy your stuff. Buy your stuff.
- PZPeter Zeihan
The alternative is absolutely limitless mass immigration, which from a cultural point of view, no one's real fans of.
- CWChris Williamson
No. Uh, how much of a solution versus a crutch is immigration when it comes to stemming the tide?
- PZPeter Zeihan
At this point in time, it's at best a, like a really thin cane. Uh, if you-
- CWChris Williamson
(laughs)
- PZPeter Zeihan
... if- if your goal is to use someone else's young people to pad your demographics so you don't fade away, you need to start before you have a problem. And this is one of the reasons why the subtler societies have always had faster growth than the rest of the world. So the Aussies, the Kiwis, the Americans, the- the Canadians, uh, this has been less of a problem for us 'cause none of us are from where we're living now, and we've been bringing in waves of people over and over, decade and decade, uh, into the centuries. Um, but if you started today, so let's- let's just take Germany 'cause the numbers there are really clear, and the Germans are great with numbers, so we can trust them. You know, the Germans, just to hold where they are, average age of like 50-... just to hold here, already export depend- just, just to not slide anymore, they need to bring in two million people a year that are under age 25 forever, in a country that only has 80 million people.
- CWChris Williamson
Wow.
- PZPeter Zeihan
You fast-forward 20 years and the Germans are less than a third of the population. It's not viable anymore. Had they started back in the '50s, be a different conversation.
- CWChris Williamson
Yeah, that's crazy. I didn't realize the numbers
- 25:19 – 34:23
How Politics is Impacting Population Data
- CWChris Williamson
were that bad. Okay, you mentioned, uh, Trump administration, uh, what do you make of Mamdani's New York win? Is it remarkable? Is it indicative of some important trend?
- PZPeter Zeihan
No. I mean, (laughs) if, if there is a trend for Mamdani, it's the same trend for, from Trump. These are two people who never had a real job in their lives and all of a sudden are now political leaders. We should not expect this to go well in New York, just like it hasn't exactly gone well in Washington.
- CWChris Williamson
I'm, I'm interested in whether or not there is something remarkable or, or unique, noteworthy, uh, happening with elections and, and populism and sort of rising nationalism. You've got, uh, US election cycle volatility, little bit of that. You've got, uh, farmer protests in Europe, uh, m- you mentioned migration and a ton of people having problems with that. I wonder whether that could be driving some political change-
- PZPeter Zeihan
Of course.
- CWChris Williamson
... not just inside the US but, yeah, I'm, I'm interested in what you think about, um, those dynamics and the others impacting how the world at large generally thinks about populism, nationalism, internal politics.
- PZPeter Zeihan
Well, a couple broad demographic thoughts. As a rule, the younger cohort, 25 and under, tends to be more politically radicalized, more classically, excuse me, not classically liberal, more pejoratively liberal, woke, whatever you wanna call it, uh, and, uh, much more in favor of things like redistributed economic policies because they don't have anything to lose, they only have the possibility of gains. It's, it's just, it's age math and that has been true in every part of the world throughout the entire modern era. Nothing's weird there. Flip it. When you turn 65, your income goes away. You're now either on a fixed income or the assets you've accrued over your life, that's all you have, that's all you will ever have, and so you get a little crotchety. And so the environment we're in today, in most of the world, the young cohort is getting smaller and smaller and smaller and more brittle and more desperate, whereas the older cohort is getting larger and larger and larger and more ossified and more unwilling to make any compromises through that against the globalization. We have the time where we're looking through some of the most radical economic transformations because of what's going on with globalization and de-globalization, at least in our lives, certainly since the '70s, I'm sorry, certainly since the '40s, probably since the 1870s, and based on definition, maybe since the 1500s. At the same time, we have our first ever, as a species, demographic inversion. Of course it's gonna be a shit show.
- CWChris Williamson
Mm. Mm-hmm. Yeah, I wonder whether, I wonder whether the increased radicalization will have some sort of a bump when those young people become slightly older if their economic, uh, situation doesn't improve by... as much as they'd hoped, as much as their previous generations has hoped. I wonder whether that will hold on to some of that sort of progressive radicalization, uh, o- or tamp down-
- PZPeter Zeihan
It would be the first time in history if it happens.
- CWChris Williamson
Yeah, tamp down the inevitable trajectory that goes from higher openness to lower openness, higher sort of liberal worldview to more conservative worldview. Um, but yeah, I mean, the, the prospect that the future is going to be owned by the people who have children and the only people who are having children, it... The really fascinating stats, I'm sure that you saw, um, looking at where the birthrate decline has come from if you organize it by political cohort inside of the US, and from 1990, it's almost exclusively been taken out of people that are left-leaning. So that-
- PZPeter Zeihan
Uh... (sighs)
- CWChris Williamson
No?
- PZPeter Zeihan
A couple, there's a couple problems with that data point. Um, I saw the same study. Number one, they, the way they defined left-leaning, okay, the, um, the, the classic Democratic Party in the United States, there are three clusters to it. You've got racial minorities, you've got organized labor, and you have the, the educated coastal elites. The way that study defined it, it was just that third group. (laughs) And the first-
- CWChris Williamson
Interesting.
- PZPeter Zeihan
... the first two groups tell us something different. Uh, number one, the, uh, the middle group, the organized labor, they're socially conservative, always have been, and now they're voting that way, and they really like... I won't... Well, really like Trump might be a bit of a stretch, but Trump is not a pro-business guy. He's probably the most anti-business president the US has had in my lifetime. And the unions love it. Then you've got the racial minorities, and Blacks and Hispanics and Asians agree on nothing. Um, Asians tend to be much better educated, much more wealthy, not necessarily politically conservative or liberal, more likely to be independent.
- CWChris Williamson
Mm.
- PZPeter Zeihan
African Americans tend to have been lock stop into the Democratic Party for quite some time, but they voted for Trump in the biggest m- uh, percentages we've ever seen in modern history, and the Hispanics split right down the middle this last election. Uh, they are economically for a degree of redistribution, not anything like, uh, the coastal elites. Um, they tend to be the most up-and-coming part of the United States, so they're most likely to shift economically conservative, which doesn't put them in the Republican Party either anymore 'cause that's not what the Republican Party is today.But at the same time, they're the most anti-immigration group we have. They want family reunification for their family and no one else. So, the Democratic Party has shattered as an institution, and when people start talking about conservative or liberal, you really have to ask what it is they're... how they define those terms 'cause the way America defines those terms has changed radically in just the last five years.
- CWChris Williamson
It is crazy. The, the top line of data that we're seeing at the moment, I'm seeing more and more graphs from stuff like Our World in Data and, and like We Got The Stats, et cetera, uh, being posted on social media. There's a great, great guy from the FT that's doing a load of stuff in terms of data visualization. His stuff's getting shared around a lot. Uh, but there always are nuances, and when you dig into those, you find out that the story might not be the story as is ............................
- PZPeter Zeihan
I mean, politics has always been messy and now we're in a time of change, so it's really messy.
- CWChris Williamson
Mm. Uh, speaking of Trump, Trump elevates Saudi Arabia to major non-NATO ally status.
- PZPeter Zeihan
(laughs)
- CWChris Williamson
That sounds like the, the most litigious slap on the wrists that I can think of. Uh, but is that a big deal? Like, what, y- ... U.S.-Middle East tensions, are they important? How, h- how much should we be concerned?
- PZPeter Zeihan
Uh, (sighs) I'm not gonna say they're unimportant 'cause that would just be rude, but, um, the idea that Saudi Arabia's an ally is a real stretch. And I'm not just saying that because, uh, Mohammed bin Salman ordered the dismemberment and cooking of a journalist and then used the same barbecue pit for a diplomatic party for 300 people later that day.
- CWChris Williamson
Hang on. They cooked Jamal Khashoggi as well?
- PZPeter Zeihan
They... Well, I mean, they didn't eat him. I wasn't-
- CWChris Williamson
Yeah, yeah, yeah. Yeah, yeah, yeah.
- PZPeter Zeihan
I mean, okay. (laughs)
- CWChris Williamson
But cooked him.
- PZPeter Zeihan
Yeah. They dismembered him, they put him in a giant barbecue pit, they burned all the evidence, and then later that day, they held a diplomatic barbecue event using that barbecue pit to make sure they could destroy all the forensic evidence. So-
- CWChris Williamson
So there was little, little particles of Jamal Khashoggi probably inside of a little bit of the barbecue?
- PZPeter Zeihan
Yeah. Yeah. Let's just put that to the side for the moment. (laughs)
- 34:23 – 41:03
The Future of Global Energy
- CWChris Williamson
What do you make of the future of energy? EV demand slowing a little bit. Shale production and stuff's going on. Nuclear renaissance. What's the future of energy look like in your opinion?
- PZPeter Zeihan
Uh, any country where EVs are not subsidized, there are no EVs. So, uh, that hopefully will tell you everything you need to know about that supply chain. Um, that doesn't mean that all green tech is stupid, just that one piece. As for green tech writ large, if you're in a sunny place, put up solar. If you're in a windy place, put up wind. Uh, you know, I would like to think that that's not a particularly complicated conversation. If you're not in a sunny place, maybe you shouldn't put up solar. Why people have trouble with that statement bothers me. I mean, I- I- I live 7,500 feet above Denver. I get 330 days of sunshine a day. Of course I have solar panels on my roof. But if I lived outside of Toronto, I would get one-fifth the solar radiation per year. Why would I be so stupid as to put solar panels on my roof in Toronto? It's like this-
- CWChris Williamson
Mm.
- PZPeter Zeihan
... this idea that the technology works everywhere is really a problem. Uh, and that goes for the others, too. N- natural gas, oil, nuclear, all of them. Um, because if you... you have to have the infrastructure that goes with it, and if that infrastructure is there, why would you burn that power source? Nukes are getting interesting. Uh, the United States seems to, in bits and pieces, being moving on from 1973 finally. It's only been 51 years. Two? 52 years? (sighs) Uh, the hope is that the small modulars will work. But right now, we still have yet to build a prototype. And so until there is a prototype, I can't tell you what the supply chain might look like. But the, the sexy nature of it is if you can fit a nuclear reactor into a 10, 20-foot container unit and just plug it into a decommissioned coal plant's transformer network and basically produce as much power as the old coal plant did for 5% of the cost of building a new power plant, well, that, that sounds great if the technology works. Let's build it once, and then we'll talk about it.
- CWChris Williamson
How far away from that technology are we?
- PZPeter Zeihan
(sighs) We were supposed to get the prototype up last November, and then the company doing it, and it went bot- uh, belly up. We've had three more countries, excuse me, three more companies say that they're working on it. Uh, I have not seen what I consider to be a reliable timeframe for when their prototype will come online.
- CWChris Williamson
Mm. So without that-
- PZPeter Zeihan
The national labs are involved. People are working on it, but I'm sorry. What was that?
- CWChris Williamson
Without that, is nuclear dominance not as inevitable?
- PZPeter Zeihan
Yeah. Nuclear, if you're going to build a large plant, let's just put the regulatory and the NIMBY concerns to the side for a moment. From the day that you put a shovel in the ground and you have every dollar that you need to get it set up, you're talking about four to eight years, probably closer to eight, and that assumes that the power grid can take the power. One of the problems we have in the United States is, because the period from roughly 1985 until roughly 2020, was a period where we were moving towards higher and higher end industry that used more precision labor and more equipment, uh, but less smelting and electrical work. Uh, it meant that the amount of stuff that we were producing was actually going up in value, but the amount of power that we needed to do it was going down in value. And as we moved from manufacturing and agriculture to a services economy, same thing, power demand stagnated or dropped until very, very recently, largely because of AI, but also because of the re-industrialization effort we're now going through because of the Chinese problems and de-globalization. So for 35 years, we really didn't build out the grid because we didn't need to. Now we need to. And the biggest thing that is missing is high voltage, long range transmission line, something that's like 70 kilovolts or higher. The only part of the country right now that has spare transmission capacity is this little triangle from Pittsburgh to St. Louis to Chicago, uh, Appalachia, coal country. Because in the '60s, '70s, and '80s, we had a number of administrations who realized, "Here's where the coal is. It's cheaper to move electricity than coal, so let's burn the coal locally and send the power out to the population centers." You know, basic math. Uh, so the federal government stepped in and helped push through all of this development work. And so now this zone has like quadruple the long range transmission that they're using, in some places less than a fifth. Uh, it's the only place that could really build out what we need quickly. Um, everywhere else in the country needs to build those lines before they think about things like nuclear power. Because if you build nuclear power, you might be able to supply your city right there, but you're not going to be able to ship it anywhere else.
- CWChris Williamson
Mm-hmm.
- PZPeter Zeihan
Uh, that's in part a regulatory issue, but it's mostly just hardware.
- CWChris Williamson
How effective is nuclear when it comes to the, um, excess capacity from the grid? I have a friend who helps to build, uh, crypto mining facilities in West Texas.
- PZPeter Zeihan
(laughs)
- CWChris Williamson
And one of the things that they do, which is, uh, supposedly of a massive benefit to the grid, is they are able to turn on and turn off their requirement for buying energy. So there is additional energy that's available on the grid and he pushes a button or the people that he builds the plants for push a button and they go, "We'll take your cheap energy. Fantastic, we'll go and mine at some more Ethereum." Um, how, uh, how much tolerance, how much foot on, foot off gas do you have with nuclear plants? Do you know?
- PZPeter Zeihan
Uh, from a technical point of view, you can go up and down whatever you want. But going up looks a lot to the Nuclear Regulatory Commission like a meltdown. So functionally, no, not at all. So nuclear is only for baseload in the United States, and I think that's broadly a good way to look at it. Uh, so for data centers, nuclear is a good match because data centers churn 24 hours a day, nuclear goes 24 hours a day. Solar and wind for data centers are some of the stupidest things I've ever seen people put on paper. Uh, because to make that work, you need to build five times the solar and wind that you would need to power the center, and then build a massive, at least 24-hour duration battery system. By the way, no one in the country has more than 10 minutes, and just the cost is just extreme and even then it wouldn't be stable or reliable. Uh, so nukes, yeah, nukes would work for that.
- 41:03 – 51:24
Are Electric Vehicles Truly Sustainable?
- PZPeter Zeihan
- CWChris Williamson
You mentioned EVs when they're not subsidized, no bueno. Wh- what are the underlying dyna- is that consumer demand? Is that cost? Is that prohibitive ability to produce? Like what, what, what are the underlying dynamics?
- PZPeter Zeihan
It's e- it's, it's, it's, it's electricity. I- it's really simple. Electricity is easy to generate, it's kind of squirrelly to transmit, and it's almost impossible to store in an economically viable manner. You need a supply chain that is among the most sophisticated that humanity has ever produced, that produces and processes a dozen major elements. And o- in order to do the transition the United States under the Biden administration said that it wanted to do, get to a majority EV situation in less than 25 years, we would need every scrap of lithium and copper and molybdenum and tantalum, oh, and graphite and all the rest from the entire planet, and no one else could have any at all, just to do EVs just here. So no, it was always fucking moronic. Uh, that, and the cost that's attached to it, is onerous. So of course if you aren't, if you have to pay for it all yourself, sales are basically dropping to zero. Um, Tesla, Musk talked a good game. Not viable economically, not vile geopol- file- viable geopolitically, and we don't have the processing materials, uh, here in the United States to do it anyway.
- CWChris Williamson
So that suggests, uh, uh, assuming that Elon isn't ignorant of this, I, I have to assume that he isn't. He tends to do his research-
- PZPeter Zeihan
He's a marketer, you should think of everything that he says in that light.
- CWChris Williamson
But th- that, the knowledge that this is the future of the EV market, that in order to be able to make this work within the US you need this absurd volume of rare earth minerals processed in the right way, capacity, all the rest of the thing, not only do the stars need to align but you also need to align a bunch of weird rocks in one of those rock towers on the ground.That is betting the entire future of the com- company on the direction of the country. And, uh, d- is he basically, in your opinion, is he making an assumption that the subsidies will continue to roll in? Because that makes Tesla very, uh, f-
- PZPeter Zeihan
It's a non-viable company by any normal math.
- CWChris Williamson
But if you get continuing support because there is a push toward green, because EVs is seen as the best way to help climate change, so on and so forth, i- it is riding, te- th- that, the EV revolution is riding off the back of subsidies coming from any government. Is that the way-
- PZPeter Zeihan
Nope.
- CWChris Williamson
... to look at it?
- PZPeter Zeihan
Uh, for, for, (sighs) for Tesla at this moment, as we understand physical chemistry, yes. Uh, there's nothing viable at Tes- there, there's very little that's viable at EV writ large anyway, even before you consider the cost of the supporting infrastructure build out, (sighs) which is a couple of trillion dollars on top of everything else. Uh, just the vehicles don't do what they were a- had been advertised to do. Uh, they're also net dirtier than gasoline because of the production cycle on the front end. Now, if you change the electrical system in a way that I don't understand today, I reserve the right to change my mind. If you move away from lithium as the core component of battery storage into something that is less environmentally damaging in its production and more energy dense and can take the vibrations better, I reserve the right to change my mind. But in the last five years, I haven't even seen a prototype system for, suggested for any of this. The closest I would say would be the slow motion move from lithium-cobalt batteries to lithium-iron batteries. That might help with energy storage at the grid level, might really make a difference. But for transport, no. Uh, it's less dense than what we had.
- CWChris Williamson
Where does the net dirty come from? What, what is the dirty?
- PZPeter Zeihan
Well, people always forget that the electricity comes from somewhere. And if, let's say, I, I've got an 11 kilowatt system on my house. If I had a Tesla and the sun shone for 24 hours d- a day at my high altitude noon peak, take me two and a half days to charge the car. So you're not using solar and wind to charge your car. You're using fossil fuels, and so the only potential gain that you're getting is that an EV engine is more energy efficient than a gas engine on a mile per mile basis. But the cost, the carbon cost of generating the vehicle and the ba- especially the battery and the front end is just so much more. Uh, and if you're living in a place that's predominantly coal and you're driving an American style sedan, you're at, over the long term, generating a lot more carbon than anything before. Now, those are some very broad statements and there are a thousand exceptions to them based on local situations. So for example, the Chinese vehicles, uh, from a weight basis are less than half that of the American va- vehicles. They would never pass our safety tests, but they're smaller and they kill a lot of people, but because they're so much lighter, a lot of what I just said does not apply to the Chinese situation. So a Chinese, Chinese EV can break even on a carbon cost basis within a ten years maybe.
- CWChris Williamson
But at the price of a few pedestrians.
- PZPeter Zeihan
Societies make choices when they start crafting policy.
- CWChris Williamson
(laughs) Okay. Um, what are the, what are the other sort of damages with, with regards to production when it c- I kn- I understand about the, the lithium. Uh, I, I remember Joe had some guy on his show talking about cobalt mining and it was fucking disgusting. It was insane. Um-
- PZPeter Zeihan
It's disgusting in every sense of the word, yeah, environmentally, chemically, and socially.
- CWChris Williamson
Yeah. Um, what, what else, what else is there going into EVs which are a little, uh, a byproduct we wouldn't realize?
- PZPeter Zeihan
I di- I didn't top off my study for this. A big one's graphite. Uh, graphite's basically a synthetic form of carbon. Uh, there is a natural graphite which is vastly preferred, but the chemical structure is very limited to a few specific mines so the cost goes up as it's, more of it's used. There's a synthetic version. Uh, basically you're using it for the electrici- tr- regulating the electricity flow in a battery. And if the graphite is not the right kind, you basically get the electricity starting to leak out into the battery itself, which can get a little blammy, but more likely it's just going to be a huge efficiency loss. Um, copper obviously, anything that uses electricity is going to use a huge amount of copper. Lithium we've already covered. Cobalt's a mess. Uh, manganese, using a lot of alloys for both copper and steel. Um, sometimes you're going to put this in the electrodes as well.
- CWChris Williamson
Mm-hmm.
- PZPeter Zeihan
There's just, there's a lot of moving pieces. Um, and that's one of the reasons why I'm a little hopeful because a lot of people are playing with a lot of different chemistries to see if they can come up with something better. We just haven't hit it.
- CWChris Williamson
Isn't there a rule in the UK that they want to go completely gas-powered vehicle free by 2030, that there's no more... Or is that, is that elsewhere?
- PZPeter Zeihan
Lots of countries have announced that either for their cities or for their countries, and unless they're willing to subsidize it to a huge degree, it's not going to happen anywhere. Um, that doesn't necessarily mean that I have a problem with those goals. I mean, lots of time... Well, you know, let me use the California example. California gets a lot of shit. California deserves a lot of the shit that they get. But when it comes to regulation, uh, the state legislature has empowered their regulatory bodies to create these regulations to say, "You know, we want to be carbon free, or we want to, uh, on the grid by this year. We want to have no non-EVs sold in the state by this year." And as time moves on, if the technology is not manifest to make that policy, the regulator has the authority without going back to the state legislature to move the date or change the mandate. Uh, it's a little bit more intelligent than most people give California credit for, and we're going to probably see a lot of places climbing down. Uh, we've seen a lot of countries in the last f- couple of years back away from a lot of-... what they've done with EVs 'cause it's just not working out.
- CWChris Williamson
Which country do you think is closest to being wiped out by energy shortages? Which one is the most precarious?
- PZPeter Zeihan
At scale, the Chinese are the ones in the, in the biggest pickle. Uh, they import about 70% of their oil, about similar number for natural gas, and the majori- vast majority of that comes through the Strait of Malacca, probably or- originating in the Middle East. And so if you ever have a real dustup with either Japan or the United States or India, Vietnam, or Australia, or Sri Lanka, or Pakistan, or Oman, that all stops. It's really easy to cut completely. Um, for more traditional places, uh, the Europeans are getting clever. Uh, I'm not as worried about the Europeans as I used to be. Uh, three years ago-
- CWChris Williamson
Hmm.
- PZPeter Zeihan
Uh, there's plenty of reason to be worried. (laughs)
- CWChris Williamson
(laughs)
- PZPeter Zeihan
Uh, three years ago when the Ukraine war started, uh, the Europeans were in the situation where they thought that if they didn't side with the Russians, that the lights were gonna go out. But in the three years since, they've built a lot of infrastructure to bring in carbon energy from other places, and it has been-
- CWChris Williamson
Hmm.
- 51:24 – 1:03:40
Where the Green Movement is Really Headed
- PZPeter Zeihan
- CWChris Williamson
I'm interested in sort of what the future of the green energy movement looks like, this sort of green transition and it's... H- how possible it is at the current levels of stability and technology and rollout and instability.
- PZPeter Zeihan
Well, there, yeah, there are no EVs, there are no battery chassis, there is no solar, there is no wind, there is no nuclear without globalization. Too many of the parts, too many of the materials come from a different continent. And so if we're not all doing this together, none of that happens, and so you should move on. Uh, if you're in the Western hemisphere where there is more mining than consumption, that's probably gonna be a little easier. But for the Eastern hemisphere, hard pass. It's just not gonna work. Now, again, if you change the technology on me, I reserve the right to change my mind, but that's where we've been for the last 25 years.
- CWChris Williamson
How much of the Eastern hemisphere being card carrying, flag waving, we are going green people? It seems to be mostly a Western thing in any case now.
- PZPeter Zeihan
For the most part, yeah.
- CWChris Williamson
How hopeful are you for a green transition in the West?
- PZPeter Zeihan
If the technology is not ready and if Westerners are not living, living in places where the technology can be applied in a way that actually drops your carbon... Putting up a solar panel doesn't make you green. Putting up a solar panel that reduces your carbon footprint, that makes you green. And most people who live in the West don't live in a place where that is true.
- CWChris Williamson
I think that's one of the reasons why, uh, there is a lot of criticism in the UK around the sort of green movement that we've had a very vociferous government, uh, pushing hard toward this is an outcome that they want. And a country that really doesn't seem to be particularly well-suited for most of the technologies, like I, I, you mentioned Toronto's sort of one-fifth of the amount of sun that you get. I, I have to assume that the UK's maybe even worse. We have to go do- we have to go south in order to get to Toronto if you fly from the UK. We're further up, um-
- PZPeter Zeihan
Believe it or not, London actually gets a little bit more sun than Toronto, but like just minuscule. Glasgow though, God no. (laughs)
- CWChris Williamson
Yes. And I was from three hours away from Glasgow, so yeah, I, uh, I feel you.
- PZPeter Zeihan
Now wind, offshore wind in the North Sea is brilliant. Look at Norway. I mean, Norway has been subsidizing. I don't want to suggest that they're not, but they get over half of their electricity from wind now. Now, because of the dispatchability issue, they're probably pretty close to peaked on that. They probably can't do much more but-
- CWChris Williamson
What's dispat- dispatchability?
- PZPeter Zeihan
The avail- ability just to flip a switch and more electricity surges into the system. You can't do that with green tech at all. You can do it with batteries, but batteries are not good enough to store more than a few minutes of power on a grid level for most places. So the first half for the, for the Danes was easy. The second half I have no idea how they're gonna do that.
- CWChris Williamson
How interesting. What is, uh, what's an important mineral? What's the most important mineral that, uh, no one's paying attention to?
- PZPeter Zeihan
So I mean, it, it's really unsexy, but copper. (laughs) It's like you want to expand your grid, you need copper. You wanna do more industry, you need copper. You wanna do anything with green tech, you need copper and you need a lot of it. Uh, the United States wants to double the size of its industrial plant. The United States, in order to do that, needs to increase its grid by half. That means we need to consume about 12 times as much copper for the next 30 years as we have for the last 30. That's a lot of copper.
- CWChris Williamson
Where does that come from? Where, where is most of the copper in the world?
- PZPeter Zeihan
The only country in the world that has what you would consider maybe surge capacity to increase output on anything less than a five-year timeframe is Chile. Uh, the Atacama Desert. Uh, number two is the United States. Uh, number three is Canada. Number four is Mexico. But that-
- CWChris Williamson
So it's good for the US then that all of it is-
- PZPeter Zeihan
That's great.
- CWChris Williamson
... yeah.
- PZPeter Zeihan
That's great. But that's the ore, then you gotta turn it into copper metal. That's China and India. So either-
- CWChris Williamson
Oh, fuck.
- PZPeter Zeihan
... either we build it-
- CWChris Williamson
So you can't keep it-
- PZPeter Zeihan
... Yeah.
- CWChris Williamson
We can't keep it domestically and then convert it over here.
- PZPeter Zeihan
I mean, we could-... we've chosen not to. But, um- and, you know, it's not a new technology. This dates back to, like, the early 1800s. You basically heat it up, you boil off the sulfur, uh, you heat it up some more, you purify it into metal, and then you turn it into other things. Uh, there's nothing that- to stop us from doing that except for the cost, the footprint, the pollution.
- CWChris Williamson
Mm.
- PZPeter Zeihan
These are real things, and to this point, America has chosen to just let someone else do it.
- CWChris Williamson
Isn't it an interesting ouroboros thing that in order to be able to increase the capacity of the grid, to be able to move to something like nuclear which would be a cleaner fuel, you need to do something which on the front end would look like pissing out more pollution into the atmosphere and would cause an awful lot of protests because look at these big, "We shouldn't be doing our copper ore at home. Look at the big black clouds." It's perspective, being able to see over big timelines is, uh, is- is tough.
- 1:03:40 – 1:08:40
How Technology is Impacting Modern Warfare
- PZPeter Zeihan
news.
- CWChris Williamson
Yeah, well, look, you mentioned, you mentioned Russia there. Uh, the last time that we spoke, that was, that was sort of front-page news. What is happening with the Russia-Ukraine conflict? Is it entering a new stage at the moment? What's going on?
- PZPeter Zeihan
E- Every three months we're in a new stage. Uh, we're in something called the Second Revolution in Military Affairs, which is applying digital technologies to warfare. Uh, the first phase was in the 1980s and '90s when the United States started making things like smart bombs and cruise missiles. Now it's going on to much cheaper platforms, because, uh, low-cost semiconductors are ubiquitous around the world and anyone can make a drone. And so we've got Ukraine, which inherited part of the old brain trust from the Soviet missile and aerospace things, combined with a country that's desperate to survive, combined with these new inputs that they can bring in from abroad and making thousands of drones a day. So every three months, there's a new page. Uh, first it was single-person drones, then it was jamming, then it was drones with missiles, then it was water-based drones, then it was mast drones, then it was Shahed drones, then it was Shahed drones that could do a limited amount of target selection. Now, uh, it's something called the, uh, the Octopus drone, which the Ukrainians are just starting to use, which is a drone interceptor. Uh, it's a new day every day, and I have no idea how this is gonna play. I can tell you, with the technologies that existed pre-war, exactly how this war would've gone.
- CWChris Williamson
Mm.
- PZPeter Zeihan
Those aren't the technologies that are being used in the war anymore.
- CWChris Williamson
Isn't that so, uh, so interesting, though, all of the dangerous assumptions people had about modern warfare, all of the predictability... I mean, war, war is unpredictable enough, uh, but when you apply the, uh, growth curve of technology to warfare, uh, you just end up with... I mean, uh, that, that weird evolution between, uh, offense and defense that we saw happ- well, drones have come out, and this is better than using a Hellfire missile, and then instead of using that, you get a net, and these drones are defeated by a net, and now the drones have a little thing on the front that cuts the net, and now the nets are made of this material, and now there's an EMP that blasts them out of the sky, and now there's... I mean, the-
- PZPeter Zeihan
Nope. Just...
- CWChris Williamson
... uh, pace of innovation with, uh, kinetic consequences is, it's mad. It's re- it's been absurd, uh-
- PZPeter Zeihan
Right. But this is why it's called the Revolution in Military Affairs. Um, if you go back to roughly 1935, the technologies we were using then, up until 2022, with the exception of the introducit- introduction of the jet, really hadn't changed. I mean, it was guns, it was artillery, it was tanks, it was ships, it was subs, it was helicopters. The jet was the only one that was introduced, and that was introduced late in World War II, in 1944. We've had more technological evolutions in the last three years just in Ukraine, than the rest of the world combined has had since 1960.
- CWChris Williamson
Wow.
- PZPeter Zeihan
And so the rules, we don't know. We are only in the very, very early stages of developing the weapons, much less the doctrine, much less-
- CWChris Williamson
Mm.
- PZPeter Zeihan
... being able to play that against a battlefield. Um, and we are very fortunate in the West that the Ukrainians will want to partner with us, because they are doing, in real time, uh, the sort of experimentation that is costing lives, that if we were doing this in a broader conflict, would have already claimed a million people.
- CWChris Williamson
Yeah, I was gonna say, I wonder how many countries are, uh, watching...
- PZPeter Zeihan
... all of them.
- CWChris Williamson
Ukraine and Russia almost like a lab-
- PZPeter Zeihan
Yeah.
- CWChris Williamson
... almost like a-
- PZPeter Zeihan
The last time something at this scale happened, a, a major conflict in which people were watching, y- it was either the Crimean War or the American Civil War, because those were the two conflicts where industrialized technologies first really hit the field, whether it was a Gatling gun or penicillin or the railway.
- CWChris Williamson
And people are watching and thinking, "Well, this is a good explainer, uh, a, a, a good, um, uh, sandbox for us to observe what these new technologies are going to be like." How, how would these-
- PZPeter Zeihan
You say I'm dark. (laughs)
- CWChris Williamson
Well, look, I mean, yeah, I'm not saying that, uh, Russia and Ukraine is, uh, being used as a, an experiment for the rest of the world to watch, but that's what the people who are not invested in it directly will be, will be thinking, right? "Look at this."
- PZPeter Zeihan
Gotcha. Yeah.
- CWChris Williamson
"Look at, look at, look at the way that this goes forward." I ... That seems to me ... I was interested in what the most dangerous assumption about modern warfare was, but the, uh, the, the assumption that it is predictable or that it follows any of the rules that have been established in the past seems to be a pretty fucking good one.
- PZPeter Zeihan
Yeah. Now, we still need energy. We need silph- still need food. When you're talking about drones, you need electricity specifically, so that adds another layer of things to it. But yeah, uh, the rules are changing very quickly.
- 1:08:40 – 1:15:09
Could China Ignite the Next Global Conflict?
- PZPeter Zeihan
- CWChris Williamson
What conflicts are more important than Ukraine at the moment?
- PZPeter Zeihan
At the moment, that's really the only one that matters, because that has the nuclear question because of the Russians. That deals with the Northern European Plain, so automatically draws in all the Europeans. Uh, it has the issue of uniting Eurasia under a single power, so the Americans get interested. Uh, and then, of course, the Chinese are providing the industrial base that's necessary for the Russians to carry out the war in the first place. So everyone's involved, uh, in some way. Uh, it is by far the most critical one out there. Uh, we'll probably have a few new ones in the next few years. Um, whenever you break the economic model, politics gets all wonky, and security issues naturally bubble up from that. And that's before you consider technological change. So, you know, maybe we figure out whatever the next energy technology is. We have something fresh to fight over in a world where all of a sudden oil is not as reliable. It's one of many ways this could go.
- CWChris Williamson
Mm. What about South China Sea stuff? That was big deal for a while. Are we still-
- PZPeter Zeihan
I have never found that sexy. Never. (laughs) It's just ... I mean, just ... It's ringed by hostile countries, Vietnam, Philippines, Indonesia, Malaysia. Um, it's not that deep, so subs don't play a big role. The energy in it, the reserves are not all that interesting. And the sand islands that the Chinese have built are, as the name suggests, built of sand. And so the Chinese have already stopped stationing aircraft on them, because the runways aren't functional. And if you see this as a naval projection issue, projecting through e- an area rung by- ringed by a half a dozen countries who hate you, you put a few of the new Tomahawks that the United States is developing that are truck-mounted, and you can't do anything with that except for lose ships. And even if you could secure it, you have now made it one seventh of the way to the Persian Gulf. Big fucking deal. Uh, the Chinese are boxed in. I've, I've never found the South China Sea interesting.
- CWChris Williamson
Wow. I, you know, I've seen so many, uh, video documentaries and stuff talking about these land grabs that expand-
- PZPeter Zeihan
The Breathless. The Breathless. (laughs)
- CWChris Williamson
Yeah. Yeah. This is, you know, it's this sort of, um, odd geopolitical red tape loophole which is permitting China to expand the size of its country by saying, "This is us, and this is us, and this is us, and this is us, and it's slowly gonna engulf the entire South China Sea." Uh-
- PZPeter Zeihan
Yeah. When public relations is your strategic policy, it's not a very good policy. Uh, if you want to take it seriously, the Chinese have to conquer Vietnam first, then we'll talk. 'Cause if they don't control the coasts, there's no point in controlling the water.
- CWChris Williamson
Mm. Surely, based on your theory about China being in a lot of shit over the next decade and a, a metric ton of shit over the next 50 years, is there not the potential for them to do something desperate, whatever that means? Silly, more aggressive, more unpredictable?
- PZPeter Zeihan
I won't, I won't rule it out, but there's nothing that they could do would, that would fix their underlying core problems. They can't change their geography. They'd have to conquer the entire first island chain to have a chance to project beyond, and even then, they're not gonna have a two-ocean navy because there's only one ocean. Um, they're not going to solve their demographic problems with a war. The only country where you could maybe turn enough people into slaves to round up your demographic structure would be India. The Himalayas are in the way. Independent of the fact that that would be really hard. Uh, so there's nowhere they can go. Uh, the resources aren't within easy reach. Their demographic situation requires Star Wars-style cloning. And the strategic situation can't be solved with a navy that is anything less than five times the powerful, power of the American Navy, and they're nowhere close. They, they have a lot of ships, but whenever you see like a tonnage-per-tonnage comparison for a ship, keep in mind that their ships suck and are a lot heavier. So, a 40,000-ton Chinese carrier and a 40,000-ton American carrier, this one is an order of magnitude more powerful than this one.
- CWChris Williamson
Hm.
- PZPeter Zeihan
They're slower. They can't maneuver. They need too much fuel. Uh, before you consider things about the hardware that they might launch.
- CWChris Williamson
Okay. That does not necessarily preclude them from doing something silly, or something-
- PZPeter Zeihan
Yeah, if they do something-
- CWChris Williamson
... kinetic or aggressive.
- PZPeter Zeihan
Exactly. Just purely out of desperation, shape the environment on their way out the door, I can't rule it out. But generally, countries don't die that way. There has to be something that they think that they can achieve.
- CWChris Williamson
Hm.
- PZPeter Zeihan
The reason that I don't dismiss it completely-... is that, um, Chairman Xi has basically gotten rid of all of his advisors. Uh, his last real one was seven years ago now, and when you eat nothing but the propaganda all day, you know, it kind of messes with your head. I mean, this is a guy who has written 30,000 pages of ideological treatises in the last 10 years. That doesn't leave a lot of time to govern, and it may be that his mind is just mush now and that yes, he pulls the trigger. Uh, it's not a very satisfying explanation, but that's really the only way I see it happening.
- CWChris Williamson
Yeah. Wow. Wow. I- it really does sort of go to show the- the issues of intense isolation, uh, you know, you've- it's one of the reasons that supposedly Japan has a- a particularly unique culture, which is what happens if nobody's allowed to leave or enter for half a millennia, and look at this, it- it- it's- it formed into this place that's as close to an alien planet as you can whilst staying on Earth, and i- i- isn't-
- PZPeter Zeihan
Yes.
- CWChris Williamson
... that interesting? Um, but it also doesn't have the, uh, corrective mechanisms for stress testing your ideas. If all of the people around you and all of the country around you basically is sort of a yes country, like a yes men, uh, you can end up with some pretty squirrely ideas that you start believing in, I suppose.
- PZPeter Zeihan
That's one of the reasons why I really like countries like the United States or Germany or Australia, uh, or Brazil, because the states have as much power as the national authorities, and so you get a lot of policy experimentations on everything from labor policy to tax policy to culture policy, uh, throughout the entire system. And we- we make some bad decisions, no argument-
- CWChris Williamson
Mm-hmm.
- PZPeter Zeihan
... but we also make some good ones, and then we learn from one another.
- 1:15:09 – 1:18:50
The Power Alliances Reshaping the World
- PZPeter Zeihan
- CWChris Williamson
Which- which country is quietly becoming, uh, a greater power than most people might realize, do you think?
- PZPeter Zeihan
Mexico. If Mexico was located anywhere else in the world with the industrial plant that it is, we would already talk about it as being more powerful than Germany or France.
- CWChris Williamson
Wow.
- PZPeter Zeihan
But all that trade relationship was with the United States, so it skews everybody's perspective. Doesn't mean that they don't have very real problems, they do, but f- as an industrial power, they're already massive.
- CWChris Williamson
What- what is their advantage?
- PZPeter Zeihan
They're right next to the United States.
- CWChris Williamson
(laughs)
- PZPeter Zeihan
So, you- you've got the technology, you've got the infrastructure, you've got the- the consumption base, and they can complement what they do with what we do. Uh, it's a great relationship. I wish-
- CWChris Williamson
Wow, so it's literally a trickle-down effect.
- PZPeter Zeihan
... we appreciated it more.
- CWChris Williamson
Yeah.
- PZPeter Zeihan
Eh, that's a little harsh. The Mexicans are very good at what they do too, but if Mexico hadn't been to the next- next to the United States, it probably wouldn't have the trade or economic path that it has, but if you could take this somehow and move it somewhere else?
- CWChris Williamson
Mm-hmm.
- PZPeter Zeihan
Yeah, massive, massive.
- CWChris Williamson
Wow, okay. And i- when it comes to alliances, tenuous ones, which is... What's the one that you're concerned about in terms of fragility? What's- what are the- or what are the alliances that you think are more fragile than they seem?
- PZPeter Zeihan
Sure. Um, let me give you two, one that's up and coming and one that I thought we had solved and now I'm not so sure. So up and coming is Vietnam, uh, huge population, very young, excellent educational system, uh, 40% of their college grads are STEM, uh, and they're now at a higher average technical skillset for their workforce than the Chinese are, and they're now trying to catch up with the industrial workforce, or I'm sorry, with the industrial infrastructure. Um, long term, they're absolutely going to be a top five trading partner for the United States unless we absolutely muck it up. Uh, they're fascists, so we have to keep that in mind. Um, just because they're- they're good at what we need them to be good at doesn't mean that they're wonderful people. Their government's kind of cuckoo. Um, the one- the other one is Japan. Now, Japan is a country that I used to be concerned about because it was another naval power. Uh, most of the resources they need are not local, so they have to go out and get them, and in a world where the United States cares less about globalization, that means that the Japanese by default have to be more aggressive. That doesn't mean a fight is inevitable or much less imminent, but all of a sudden it is a possibility. And the Japanese under Trump one came to the United States to cut a deal on the future and basically signed a deal that was mixed economic and security, uh, needs, and basically gave in to Trump on everything that he cared about. And so they thought that if they could sign a deal with Donald Trump that they were in, because he was the most reactionary, erratic American president we've ever had, and they're like, "If we can cut a deal with him, we're good." Reasonable. Trump Two comes along, bad mouths the deal that Trump One cut, and all of a sudden the Japanese are in the wind again. The difference between eight years ago and now is now the Japanese have two super carriers that they didn't have eight years ago, and all of a sudden they are a naval superpower, and they were already the second most powerful naval power in the world. And so now it matters a great deal if this relationship falls on the rocks.
- CWChris Williamson
Wow.
- PZPeter Zeihan
I'm still hopeful. The Japanese would rather have a deal than not have one, but a lot of hard work was done by Trump to get that deal, and it worked, and it stuck, and then he burned it.
- CWChris Williamson
Trump versus Trump.
- PZPeter Zeihan
Yeah.
- 1:18:50 – 1:19:27
Where to Find Peter
- CWChris Williamson
Peter, you're great. I love speaking to you. It's great to get an update, apocalyptic as it may be. Uh-
- PZPeter Zeihan
You're welcome. (laughs)
- CWChris Williamson
Let's bring this one into line. Where should people go to keep up to date with everything you've got going on?
- PZPeter Zeihan
Uh, zeihan.com, Z-E-I-H-A-N.com. That's where you sign up for the newsletter and the video logs and the Patreon system, and there's a new book in the works. It'll be out in about a year.
- CWChris Williamson
Fiction one. Congratulations.
- PZPeter Zeihan
Fiction!
- CWChris Williamson
Yes.
- PZPeter Zeihan
Yeah. The end of the world, fiction, hopefully. (laughs)
- CWChris Williamson
Awesome. Peter, I appreciate you, mate. Congratulations, you made it to the end of an episode. Your brain has not been completely destroyed by the internet just yet. Here's another one that you should watch. Go on.
Episode duration: 1:19:27
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