Balaji and Steven Glinert on Network States, Supply Chains, and Allied Coalition Strategy

Summary

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The a16z Show: Balaji & Stephen Glinert on Network States, Supply Chains, and Allied Coalition Strategy

Date: June 3, 2026
Guests: Balaji Srinivasan, Stephen Glinert
Moderators/Hosts: Theo Jaffe & Sophia Puccini (for Andreessen Horowitz)

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Episode Overview

This episode delves into the evolving global landscape shaped by technological change, specifically the tension between traditional nation-states and transnational digital networks. Balaji Srinivasan and Stephen Glinert explore the geopolitical and economic implications of this shift, focusing on concepts like the network state, the fragility of Western supply chains, and the necessity (and difficulty) of building allied coalitions to counterbalance growing Chinese dominance.

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Key Discussion Points & Insights

1. Limits of Traditional Power and the Rise of Network States

[00:00–04:30]

• Balaji Srinivasan opens by critiquing both left- and right-wing political thinking:
  • The left tends to believe in “infinite money,” while the right believes in “infinite power.”
  • Both misunderstand the scarcity of resources, whether physical, monetary, or digital.
  • Quote: “Just like the leftist doesn’t understand scarce resources in the physical world, the rightist doesn’t understand scarce resources in the digital world … You can’t just point a gun at everybody. There are limits to just brute force.” (Balaji, 00:50)
• The rise of digital networks challenges old models of geography-based power.
  • Networks—online communities, organizations, blockchains—don’t correspond to national borders.
• The Network State: Balaji introduces his ideas from his book, explaining that tech communities are now globally distributed, and “capital formation” is already leaving traditional U.S. hubs like Silicon Valley.

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2. Internet First: Replacing Geography with Connectivity

[05:00–10:36]

• The “Internet first” philosophy:
  • Technologically, it echoes “mobile first/AI first.”
  • Politically, it’s a scaled alternative to both nationalism and socialism.
  • Quote: “Internet first is, in my view, the scaled alternative to both nationalism and socialism … millions of people are not really location first; the flags over here do not actually describe what your actual social network is.” (Balaji, 07:58)
• Importance of mapping digital social networks—these are the primary communities people belong to, not necessarily the people who live near them.
• The old paradigm—culture and law defined by geography—has ended; now, digital communities diverge in worldview while sharing the same physical spaces.

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3. States vs. Networks: Hard Power and Its Limits

[10:36–15:21]

• Moderators play devil’s advocate: Can networks really resist state power, which ultimately has “the guns”?
  • Balaji points out that the Internet was originally designed for resilience—including against nuclear attack.
  • Stephen Glinert: While networks can be disrupted (e.g., China’s Internet censorship), this is a struggle between two forms: "cloud and land."
• In the U.S., the “network” often dominates (“X is upstream of all politics”), while in China, the state wins (“state over network”).
• It's a shifting equilibrium—state and network constantly reposition for dominance, reminiscent of historical church/state tensions.

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4. Historical Analogy and the Illusion of Brute Force

[16:41–23:58]

• Stephen Glinert offers an analogy: The struggle between pope and emperor (church and state) in medieval Europe, particularly the Investiture Crisis, mirrors today’s network/state tension.
• Balaji:
  • The West has relied on coercion (taxation, military action) as a backstop, but this is breaking down in a multipolar, networked world.
  • Quote: “Coercion doesn’t work anymore and you have to use persuasion. Why does coercion not work? Because even the National Security Strategy of 2025 acknowledged it’s a multipolar world now.” (Balaji, 20:00)
• Example: The USSR didn’t collapse by invasion but by failure in coordination—a “nervous system” breakdown.
  • The network is the neural system; the state is the body.
  • Quote: “Blue jeans and rock and roll have more power than the Red Army. It’s not like the USSR collapsed due to invasion, right?” (Balaji, 19:00)

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5. Supply Chains: Fragility and Strategic Vulnerability

[23:58–38:38]

• China’s Industrial Overmatch:
  • China controls the vast majority of supply chains for critical technologies (e.g., 93% of world’s magnet manufacturing).
  • In a conflict, the U.S. would exhaust key military inventories (missiles, anti-ship tech) in a week.
    • Quote: “The US military exhausted its inventory of some types of long range missiles within the first week of a Taiwan conflict … so it just goes to zero very, very quickly.” (Balaji, 26:23)
• Coalition Strategy:
  • The only realistic U.S. response is to build deep relationships with allies (Japan, Korea, France, Germany) to pool industrial capacity.
  • Glinert: “If you want to maintain balance against China, you need to be creating an anti-hegemonic coalition, where you can use the industrial capacity of the rest of the world.” (28:27)
• Mapping the Supply Chain:
  • The West lacks a comprehensive map of its own supply chains; China probably does not.
  • Examples of failed U.S. industrial policy due to lack of information, short-sighted trade investigations (e.g., Singapore), and overactive nationalist “immune system.”
  • Quote: “They have made enemies out of friends and friends out of enemies … they’re basically retards in my view.” (Balaji, 39:05)

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6. Self-Inflicted Strategic Errors and Political Realignment

[38:38–46:17]

• U.S. political polarization is mirrored in networked echo chambers (Blues on BlueSky, Reds on X)—pointing to “digital secession.”
• Nationalists’ instinct to impose tariffs or go it alone (“America Alone”) is strategically self-defeating, driving away potential allies.
• Example: MAGA discourse about invading Canada alienated Canadian conservatives and empowered liberals, flipping political outcomes with “zero benefit.”
  • Quote: “It actually gives enemies new friends … turns friends into enemies.” (Balaji, 42:01)
• The American passport and “soft power” are in decline as the world reciprocates with more restrictions.

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7. Doomerism, Alternative End States, and Hopeful Counterbalances

[46:17–54:03]

• Glinert outlines possible geopolitical endgames:
  • “Chimerica” (U.S.–China duopoly, everyone else marginalized)
  • “China rules the world” with American global leadership receding
  • Possible “anarchy” or balkanization in parts of the world, especially Europe.
  • Quote: “The horror scenario … is the U.S. loses its coalition … Canada gets Chinese infrastructure, Chinese cars … looks like an African country … then we have a Chinese ally on one border.” (Glinert, 52:10)
• Balaji counters: There remains hope via decentralized networks, encryption, and “global techno-capitalism” as an organizing principle.
  • The fight is to balance—not beat—China’s model through innovation and coalitions anchored on the free Internet.
  • Quote: “I do believe the free Internet can, will be a balance to this. That’s why decentralization [and] encryption … if we organize around the free Internet.” (Balaji, 53:14)
• Both agree: The West's only real chance is honest self-assessment, pragmatic coalition-building, and avoiding “reality denial.”

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Notable Quotes & Memorable Moments

• Balaji: “The reason Google is so gigantic is it’s never fired a shot.”
• Stephen Glinert: “You can’t hit what you can’t see.”
• Balaji: “I’m a reality shill. Unapologetic reality shill. A shill for observed reality. Right. Numbers.”
• Stephen: “Good example: Silicon Pac Silica … The Singaporeans are confused by [the US’s] incompetence … they’re genuinely confused.”
• Balaji: “The ultra nationalists, the jingoists, have such an overactive immune system that they’ve tagged everybody who is non-American as enemy.”

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Important Segment Timestamps

• Scarcity and “push the button” fallacies: [00:00–04:30]
• Internet First, Network State, and the end of geographic centrality: [04:30–10:36]
• State vs. Network, hard power, and Internet resilience: [10:36–15:21]
• Historical analogy (Investiture Crisis) & persuasion vs. coercion: [16:41–23:58]
• China’s supply chain dominance & US vulnerability: [23:58–29:42]
• Building Allied Coalitions / Strategic errors in US policy: [29:42–43:50]
• Digital secession, MAGA alienation, passport/soft power decline: [43:50–46:17]
• Possible geopolitical endgames & balancing China: [46:17–54:03]
• Summary, hope for freedom/Internet, closing thoughts: [53:14–54:07]

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Concluding Thoughts

Balaji and Stephen Glinert paint a sobering picture of global power shifting away from simple nation-state control toward a more complex, multipolar world—one where digital networks, supply chain dependencies, and credible coalitions will determine outcomes. They caution against both utopian and brute-force thinking, urging a reality-based, data-driven approach to alliance-building and industrial strategy. While Glinert is more “black pilled” on U.S. prospects, Balaji maintains a sliver of optimism rooted in the organizational power of global, decentralized techno-capitalist networks.

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Bottom Line:
The network is the new nervous system of the world. Winning the future requires more than hard power: it demands global pragmatism, coalition-building, and honest reckoning with new forms of digital and economic dependency.

Transcript

[Balaji Srinivasan]

On the left, there's a lot of people who think you can just push a button to like, end homelessness, end poverty, just take all Elon's money. And they just don't do any math and they don't have any understanding of scarce resources. Scarce resources in the physical world. They don't understand scarce resources monetarily. Right. They just think there's a cornucopia, a bounteous mother. Government is gov is God, government is God, but the bounteous mother form of God which can just hand out everything right. And the rightist, while moralistic, often is subject to a different but symmetrical, somewhat symmetrical version of this, where they think if the leftist thinks there's infinite money, the rightist thinks there's infinite power. The right does not viscerally understand, oh, I need to work for votes, I need to get political support. Just like the leftist doesn't understand scarce resources in the physical world, the rightist doesn't understand scarce resources in the digital world. That they actually need to get all these people to agree with them that this is a good thing and you can't just point a gun at everybody. Right? And there's limits to just brute force.

[Podcast Host (a16z representative)]

Who has more power today? Nations or networks? For decades, the Internet has connected people across borders, creating new communities, markets, and institutions that don't neatly fit inside traditional states. At the same time, global power is shifting as China expands its industrial capacity and countries rethink alliances, supply chains, and economic strategy. The result is a growing debate about what comes next. A world organized primarily by nation states, or one increasingly shaped by digital networks that operate across them. Theo Jaffe and Sophia Puccini speak with Balaji Sreenivasam and Stephen Glinart about geopolitics, technology, and the future of global power.

[Moderator (possibly Theo Jaffe or Sophia Puccini)]

We are live in the Situation Room. Today is Thursday, May 28th.

[Balaji Srinivasan]

All right, so can I show some slides or should I. Yeah, get started. Go ahead.

[Stephen Glinert]

You should probably talk about where this came from and like, why we're both like, what, what the. The.

[Balaji Srinivasan]

The.

[Stephen Glinert]

The. The hell you've raised on online the last couple days.

[Moderator (possibly Theo Jaffe or Sophia Puccini)]

Helm and helmet, guys.

[Balaji Srinivasan]

You know, the thing is, so like, this guy actually had a decent TikTok, which I'll talk about in a second, by the way, which is funny. Basically, he has like a million followers on TikTok since 2022. He has never been a jingoistic nationalist on TikTok. In fact, I actually can't think of a single pro American thing he's. Or anti Chinese thing he's ever posted on TikTok. Right. So all the patriotism, uber patriots, whatever kind of thing, uber nationalism is only on X. Right. And the Persona on TikTok is a completely different person. And I didn't actually understand that until actually like, you know, a few hours ago or whatever when he has, he has like something where he's like, oh, edamine did nothing wrong basically. Right, yeah, that one was. But leave, leave. It just, you know, the problem is like, you know, and someone, a lot of people said, why are you being so nice? Blah, blah. And the, the way I approach things is, you know, tit for tat in game theory. Yep. Like basically there's a version of tit for tat where like you start out nice. Right. I will basically cooperate with someone who will cooperate with me. I always start out nice, Steve. I mean, whatever. You've seen me in business over the years. I always, always start going, you're also

[Stephen Glinert]

like a genuinely nice person. Like, like you're not that argumentative in person.

[Balaji Srinivasan]

I'm not and I try like basically I'm always looking for the win win. That is to say, how can that person win? You know, like empathy. It's funny, the problem is, you know, wokes weaponize the word empathy and they use it to mean give me all your money and die or whatever. Right. And you're evil, whatever. But the thing is, empathy in the sense of understanding the other person's incentive structure and how they get a win is important even if you're just a completely cold blooded business person. Right, right. In fact, the first thing I do when in any slide deck, any conversation before you go and do a presentation is how does that person win? Right. How did they get a promotion? How do you know? How did they, how does their business make money? How did they advance in life? They have like three, sometimes they even haven't even thought through their KPIs or whatever. Right. And you know, so it's like as an example, a concrete example, an academic, what is their number one thing they care about? They care about getting a first author paper on a study. What do they not care about so much? Maybe the IP licensing or something like that. So there's a win win where you can give them a grant, they do a study, they get a great new first author paper and then you have, you know, IP license, obviously subject to whatever other rules the university and so on has. Right. As an example. Anyway, so, so coming back up, like I always try to enter every discussion as win win as possible and try to seek common ground and that was basically impossible here. I was just, you know. But anyway, what I want to do is I want to actually show you what I'm thinking about here. Can we. Are the slides on screen or not? Yeah, yes. Okay, great. All right, so you see the thing where it says Internet first? Internet is not a place. But there will be Internet places. Yep, yep. Okay. Are those low screen? Yeah, well, those are all coins. Oh, cool. Okay. Yes, Coins, not companies. Right. So because their communities, not companies. Right. Do. Does it show the network state.com the book here? Yes. No. Okay, great. All right, so I wrote a book on this. I just want to briefly explain what I'm trying to do first and motivate it and then we can have a discussion perhaps. Okay, so I wrote the Network State. That was theory. And I open up the Network School. And that's practice. Okay. Basically to show that you can essentially print out the Internet, that you can actually build physical social networks. I think that's the next step for what we're doing in tech, where we are not simply building data centers with closed doors, but we're building tech communities. Think of it as, you know, look, all these people are leaving Silicon Valley. You know, you have Larry Page and Zuck and Sergey Brin Elon, of course, Peter Thiel, Travis Klanick of Uber all left California, Jeff Bezos left Washington. It's no longer the place for capital formation and unfortunately, largely talent can't get into the US either. And so basically Silicon Valley as we know it is actually over. This year of IPOs, in my view is like the last giant, you know, bang on the thing. And we need to decentralize Silicon Valley around the world. And in fact, that already exists in a sense where there's a network of these Silicon valleys, there's Silicon Valley of Uzbekistan and, and you know, Moldova. All these places want a Silicon Valley of X. They've wanted for many years, but now is actually the time to decentralize Silicon Valley. Just like we have Google offices and data centers around the world, we actually have the tech community all over the world. Because the TEC indeed draws from the world. Right, okay, so that's that you're behind network school. We did the first one here. Let me give a little bit more theory. The concept of being Internet first. What it means, what it means for our values, what it means for the world. So first. Internet first. So can you guys see the screen where it says the Internet century? Yep. Okay, so the single most important force on the entire world, yet still underestimated, is the rise of the global Internet. It is the first thing you see often when you wake up in the morning and the last thing at night. It is perhaps it's even monitoring your sleep or doing fitness tracking. Perhaps it's even doing, you know, some, you know, some sort of agent that's acting for you online, right? So it's completely ubiquitous and you know, you know, fish can't see water. As Orwell says, it takes a capital effort, a huge effort to see what's in front of one's nose. The Internet's in front of your nose all the time. Arguably the key moment was 1991. It wasn't just the fall of communism in the Soviet Union. It was also the rise of capitalism on the Internet. Because something called the NSF Acceptable use policy, that was repealed and that was actually the thing that was blocking capitalism on the Internet. Up to that point, the Internet was an educational and military network only. And all the guys said, hey, if you legalize capitalism on the Internet, you're going to get spam and scams and porn and malware. And of course they were right. But we also got all the dot coms and it was net good, right? So even despite the fact that the Internet is the single most important force on the world, it is still underestimated because we put every transaction and communication online. But there's still layers that operate offline, like the currency, the presidency, the military. That's all going to change. We're going to enter what I call an Internet first world. And what I mean by Internet first is a play on words. It means at least two things. It's both a technological idea. Like, you know, you say mobile first or AI first, right? You know, mobile first company, AI first company. But it's also political idea like America first or your country first. Internet first is in my view, the scaled alternative to both nationalism and socialism. And if I describe my ideology, I'd say I'm Internet first that say global techno capitalism and millions of people are not really location first. Like the flags over here do not actually describe what your actual social network is. If you take your WhatsApp group chat or your Twitter followers or whatever and you print them out on the map, it looks something like the thing below, right? The digital diaspora is the core feature of our online existence. The reason we don't see it is we don't have good maps of the Internet. Now by the way, to be clear, the mapping of the physical world was actually itself a technology because a straight line on a physical map is a very unnatural Thing you needed, you know, to establish not just the concept of latitude. Launch, you needed surveying techniques. Later, you needed, you know, aviation and overhead flights and all the kinds of stuff, GPS coordinates that we have today. We take maps for granted, but much of the world, for a long time, is unmapped. And really, the Internet right now, all this network over here is from Facebook, and that exists on Facebook servers, Twitter's network. You can map it on Twitter servers. We're just starting to have, with blockchains and open web, where we can actually map at least all the financial connections and with something like Farcaster or Lens, all the social connections. But it'll take a few years to eventually get there until we have a decentralized, you know, social media platform where we can make maps like the below. Okay. The point, though, is this is actually where you live. You live in the center of a network, not really in your location. And the reason I say that is, you know, if you take a. A circle of a hundred meters or, you know, 100 miles and. Or if you instead take your top 100 contacts, the latter is much more important to you. Typically. Right. Those could be remote workers, they could be Internet contacts. It could be vendors around the world. Essentially, geography is not the primary mechanism of organization. This changes something that was true for 400 years, since the Peace of Westfalia in 1648, which is that geography was upstream of both culture and law. So people who are near each other share the same culture, and therefore they share the same law. No longer the case. You can live in the same apartment building, have a totally different culture. That's why people disagree on law. That's why the fights are getting so bad. Okay, can I. Once we actually have something. Yes.

[Moderator (possibly Theo Jaffe or Sophia Puccini)]

Which is one of Roman helmet guy's points was that, you know, you have a physical location, and that location can be bombed. Like, the network state is physically located somewhere. All of the data centers that power the Internet are physically located somewhere. And if a global superpower like the United States or China wanted to destroy an Internet native community, they have the guns and you don't. So, like, what would your response be to that?

[Balaji Srinivasan]

So first is, the Internet was actually built in part to resist. Exactly that, to resist a nuclear attack. Look at the graph below. Can you bomb that? The entire point is that decentralized. Can you bomb Bitcoin? In theory, I suppose you could try to go and bomb every single data center around the world. Go ahead.

[Stephen Glinert]

That was not even like, sorry, I'm jumping in here.

[Balaji Srinivasan]

Like, that's not the Core point, by the way. Go ahead.

[Stephen Glinert]

No, but the coherent thing. There is a coherent point here which is like, you can seize control of the Internet for most people. China does that. Right? Like, there are plenty of people who VPN out of China, but, like, China has seized control of the Internet from 99% of people there. They, the U.S. you know, we have GDPR. Like, I know that's like, kind of a silly thing to bring up. Like, GDPR is like the EU asserting control. Like, you can assert control over the Internet in your country. Biology. There are many things in Singapore that I, I've searched like, Robitussin before, and like, you can get blocked for it in Singapore. Okay.

[Moderator (possibly Theo Jaffe or Sophia Puccini)]

In America, like, you have Anna's archive and all these pirated data websites that get, like, taken down by the government.

[Balaji Srinivasan]

So hear me out. The thing is, first you have to identify the pole of network and state, cloud and land. Like these are. It's like, you know, north and south poles, for example. It's two extremes, right? And then there's many intermediates between those two poles. What you're talking about are conflicts between the network and the state. And in China, yes, the state basically triumphed over the network and Xi, Jack Ma, Jack Ma before Jack Ma could Elon G. Okay, Meaning Xi went and basically expropriated Jack Ma before Jack Ma had any ideas of maybe doing something that could undermine G's power. Okay? But in, in America, the network has triumphed over the state. Why? At least up to this point, like, what's upstream of all politics? X. Right. What is. What is basically taking over the finish system? Crypto. Right. Stablecoins. Right. What is like essentially the center of the US Economy right now? AI and data centers. Right. So, and then obviously, who's the Russia? It's the top 10 tech companies and so on and so forth. Whenever anybody talks about what America is, they're only talking about if they're pointing to the success case, the tech star. Right. And you know, do politicians need their X accounts? Absolutely. When, when Trump was deplatformed in 2021, he wasn't politically powerful, but when he was replatformed, he was again. Right. Network over state applies in the West. State over network applies in the East. Now the thing you're talking about, yes, there are tensions between network and state, but first we have to. It's like capitalist and communist. Right. Like, it's something where there's a. There's a tension between the group and the individual, and you can, you can frame it in a few ways. I mentioned cloud and land. So you can put the network up here and the state down here. You could also say the state is top down and the network is bottom up. So. So you could put them like this. You could say the network is internationalist and the state is nationalist. So you can make them left and right like this. But you could also say the network is capitalist and the state is communist or socialist. And so you could flip them like this. Okay. So these are like two forces that, you know, kind of juxtapose. And, you know, Teal, I think, had in. In my view, obviously, I think is a precursor or forerunner. Um, he talked about technology and politics, but I actually think network and state are more precise ways of talking about the same thing because they're actually structures. Right. So it's not just technology in the abstract sense. The. The fundamental technology of our age is the Internet. Even the electric car revolution is in part driven by battery technology, which is improved due to smartphones, which of course driven by the Internet. So anyway, Net. Net is. It's not simply that the state can just. Right. This is something, you know, Stephen, I'll give you the ball back and I'll maybe get some more slides into the. It's like a state is not all powerful. Like, when an order is given, all kinds of people need to actually do it. Obviously, Trump was, in his first term, resisted by the deep state. Right. And they didn't actually do what he said. He would say something that wouldn't get done. And now actually everybody does what he's saying and they're building the UFC on the White House lawn or whatever. Okay. Um, so which is, you know, that's. That's a different failure mode. And so the. Which is, by the way, that you want third world ism. That is third world ism.

[Stephen Glinert]

Okay, right. I know.

[Moderator (possibly Theo Jaffe or Sophia Puccini)]

So tropical is, you know.

[Balaji Srinivasan]

Yeah. There's also lucid tropicalism. The thing is, with that said, there's actually some amazingly good things that are happening due in part to the administration, which is the absolute rampage of amazing biotech innovation. Right. That is in part due to the relaxation of approvals and so on and so forth. So we're getting these wonder drugs. So this is just a very high variance thing where we're getting the. It's the best of times and the worst of times. The best of times technologically, the worst of times, politically. Right, okay. The best of times network, the worst of times state. And so the more you are a Internet American, the more you are associated with the global network overall, things are good to find to great. Right. The less you are associated with that or the less you're associated with China, basically, I think, you know, people who are associated with either China or the Internet, like, like a, like an offline Chinese person, to the extent such thing exists, they've got an improving standard living. If you're associated with the Internet, you've got an improving standard living, which is lots of people in India, Malaysia, you know, the US and so on and so forth who are Internet people. But if you're, you know, antithetical or opposed or economically opposed to both, like a very offline person who's, you know, factory is disrupted by the Chinese, then you've got, you know, a bad time and you're going to be opposed to both. Right, all right, let me pause there more I can say.

[Stephen Glinert]

So I, I think the analogy I think of whenever I think about. It's probably a rough one, but I know, you know about this. Like, what's the, the complex between. It's. It's between Henry, the. Something in the Pope, like the walk to Canosa, right. Like the Pope had no terrestrial power, but he could impose his will on emperors, he could impose his will on the whole Emperor, he could dispose his will on kings. He had power. It just. He had no armies. Right. And then you. But I, I guess what I think about a lot is like you had this period where the Pope and the Emperor went back and forth in terms of the Pope could assert power over the Emperor in certain city states and in certain structural ways.

[Balaji Srinivasan]

There's a.

[Stephen Glinert]

It's the. It starts with an I. There's something. Investor investiture crisis. Yes. Like there's the investiture crisis where the Pope and the. And the Emperor basically came to a solution. The Pope was the network, the proto network that you're talking about. But Charles V eventually just came in and he sacked Rome. Right.

[Moderator (possibly Theo Jaffe or Sophia Puccini)]

The Pope.

[Stephen Glinert]

And like when Charles V became powerful enough, when the, when the state became powerful enough, you do have the failure mode of the network, right. Like the, the state. The state and the network. The Church were like tit for, you know, kind of like in a balance. And then.

[Balaji Srinivasan]

Exactly.

[Stephen Glinert]

Came in and he sacked Rome and that was it.

[Balaji Srinivasan]

I know, but. But the thing is, it isn't the case that the state always wins because you can have religious conversions. There's a reason people say the pen is mightier than the sword. There's reason Google is so gigantic is it's never fired a shot. Right. So the, the thing is, it is I, I Think we're in an age right now, do the rise of the right where there is a enormous over rotation on like people will constantly tell me something like biology, you don't understand hard power. Let me explain to you what a gun is or whatever, you know, this kind of thing, right? And in reality, often that person, not you guys, but that person doesn't understand hard power because I will start showing them that the US military is made in China, that the supply chains are there, that you can't fight your factory, that the tomahawk and the day jam jdam, all the US armaments depend on, on China, that it's number one in steel and cement and cars. And then they start crying, right? Then they get mad, right? Because what they thought they had, and this is actually my main point of departure from, you know, I have, you know, friends all over the west, obviously, but the, the, the Western leftist believes implicitly that if they lose the argument that they can always resort to coercion in the form of taxation. And the Western rightist believes implicitly that if they lose the argument they can all resort to coercion in the form of invasion. And that's been true for like 500 years. And it's particularly true for America for the last 35 years, since the unipolar moment of crowdhammer after right around the time of Gulf War one. But it's no longer true. And so coercion doesn't work anymore and you have to use persuasion. Why does coercion not work? Because even the NSS National Security Strategy of 2025 acknowledged it's a multipolar world now. Right? Like that's why, you know, there's a withdrawal from, you know, Asia. That's why there's, they're withdrawing from Iran. That's why, you know, there's at least a standstill of Russia, Ukraine. That's why there's, it's, it's a grudging schizo pullback, but it's happening. And so what, what that means is that having a gun is not everything. You know, like somebody quoted to me, they're like, oh yeah, well, Balaji, how many divisions has the Pope, you know, which is Stalin's quote, and I, and I said back to them, you know, as the other saying goes, blue jeans and rock and roll have more power than the Red Army. It's not like the USSR collapsed due to invasion, right? It collapsed due to essentially a dysfunctional, in a sense, nervous system. So that's another way of thinking about it. The network is like the nervous system and the state is the body, right? And if you're Christopher Reeve and you're like, you know, really muscular, or you're just like a. Like a big person, right? And you know, Christopher Reeve, you know, Superman, he fell off a horse, right? Tragic accident. And he had the body of Superman, but he fell off a horse. He's paralyzed. So if the network isn't coordinating the state or if there's two networks that are smashing the state against each other, which is what's happening in America, then it does it. It can't just. Right. Because to just do something means take away all constraints. Actually, I'll say one more thing on this and I'll give you the guys ball. So, you know, there's another meme that I critiqued recently which was, to be clear, I think it comes from a good place, but it's like the just push the button, you know, meme, right? Which is just restore law and order. Why don't, you know, don't ever think about pushing that button.

[Stephen Glinert]

The fix everything button, I think.

[Balaji Srinivasan]

The fix everything button, right, the fix everything button. Yeah, yeah. Now the thing about this is it's a great meme.

[Moderator (possibly Theo Jaffe or Sophia Puccini)]

It's so good.

[Balaji Srinivasan]

It's a great meme, right? The thing about it is, is there some truth to it? There is some truth to it, which is like, if we just had a button we could push that said, hey, enforce the law, restore law and order, you know, like, then everything would just work. And you know, the other people have stupid ideas and so on and so forth. What is missed in that is that the people who have those bad ideas, you have to uninstall those bad ideas via persuasion before the button is built like that is to say the, the. The reason that like, or another way of putting it is on the left, there's a lot of people who think you can just push a button to like end homelessness, end poverty, just take all Elon's money. He's so ungrateful. He's ungratitude. Blah, blah, blah. Take all the billionaire money, they owe it to us. And they just don't do any math. And they don't have any understanding of scarce resources. Scarce resources in the physical world. They don't understand scarce resources monetarily, right? They just think it was a cornucopia. A bounteous mother. Government is gov is God, Government is God, but the, The. The bounteous mother form of God, which can just hand out everything, right? And the rightist, while moralistic, often is subject to a different but symmetrical, somewhat symmetrical version of this where they think if, if the leftist thinks there's infinite money, the rightist thinks there's infinite power. The right does not viscerally understand, oh I need to work for votes, I need to get political support. Just like the leftist doesn't understand scarce resources in the physical world, the rightist doesn't understand scarce resources in the digital world that they actually need to get all these people to agree with them that this is a good thing and you can't just point a gun at everybody. Right. And there's limits to just brute force. I mean duh, but also not duh. You know, this is why like so many magas seem to believe that like there's like adamantium under the Appalachians that like America as a physical place has, you know, some, you know, super resource. Right. That like as if like the American empire with like a billion people globally and allies around the world isn't mostly held together by diplomacy, treaties, alliances. You're not firing the gun 99.999 whatever percent of the time, however many nines laws do not involve the firing of a gun. That is a very rare occasion edge case. And while the left can like not understand that force exists and it is the ultimate backstop, that's true. The right doesn't extend that it. It's not what you use all the time and you don't use it except in extremely, extremely infrequent circumstances. Let me pause here.

[Stephen Glinert]

I just want to. So I, I kind of want to come back to something you said. The I, I kind of want to put a fine point on the two, two things. I want to put a fine point on something you said, but I also kind of want to add a, a little bit. There's this thing about like it's not that the US military is made in China, it's that China's productive capacity. We don't know what supply chain looks like. We. I mean I think I've spoken a lot of people, they said we cleaned up the supply chain quite a bit. Who knows. But it's that China's productive capacity for a lot of what will be future warfare, which is all going to be autonomous, is unbelievably overpowered. I think they make 93% of the world's. It's like what it's like not Matt. It's like basically the, the, the, the, the, the magnet manufacturing which you need for like any autonomous warfare. That's all China. It's like 93% like go to any robotics startup and they'll tell you like oh my God, I can't get anything in the United States like PCB manufacturing. They do it faster, they do it better, they have incredible capacity. So like for all the things that we care about for modern warfare which is all economy. Yeah. Like China can scale up like in a long conflict we will lose like in a short conflict.

[Balaji Srinivasan]

Like it's not a long conflict. Go ahead. Yeah, you're saying. And I'll say something, go ahead.

[Stephen Glinert]

In a short conflict they we, I don't know, 50, 50, who knows that's what they say over Taiwan. But a long conflict, they will like crush us in production. And like I think that there's a lot of people in the Trump admin who have admirable ideas. I think Dave Copley for example has some really admirable ideas about how to get that to, to, to get at least claw our edge back. But it's hard. It's a 10 year effort and who knows how many years we have until like no, like who knows how much time we have. But like it, it, it's going to be very hard for the United States military to fight a long war against China. And you know, unless like you, you.

[Balaji Srinivasan]

I want to just give some numbers here. Okay, here's, can you see the screen?

[Stephen Glinert]

Yeah, yeah, I've seen these numbers. Yeah, it's insane.

[Balaji Srinivasan]

But here, here we are. So can you, can you guys see this? The CSAs.

[Stephen Glinert]

Yeah.

[Balaji Srinivasan]

So we're pulling up the US military exhaust. The US military exhausted its inventory of some types of long range missiles within the first week of a Taiwan conflict. Taiwan used up its entire inventory of anti ship. So it's not forget about a longbo. It's basically it like just goes to zero very, very, very, very quickly. Right. And so this is also, this is a graph I was saying with the US military is made in China. There's a jdam, the Tomahawk. The supplier, supplier is in China. Okay. And this dominance has been increasing over time. There's some like, you know, attempt to kind of stop this over here. But basically the, the thing about, so you know, the thing about a supply chain is I've actually managed supply chains in you know, biotech and genomics. It is, it is complicated for the following reasons. First is the very simplest is you've got a list of your parts in a spreadsheet and you've got Supplier 1, Supplier 2, Supplier 3 and Country A, country B, country C at price A, price B, price C. And the thing is what you first don't know is who their vendors. Vendors are. Right. Because those vendors change over time. Any supply chain is dynamic. Right. You're. Especially when you've got crazy tariffs and trade war and so on. You're constantly re. Optimizing it and so on. And I don't think that America has. Like, one of the things I actually did is, you know, just in. As an intellectual exercise, if you actually wanted a rational industrial policy. I actually did have a, A visual of this here, which is this on screen.

[Stephen Glinert]

I had another point. Because I have another point here.

[Balaji Srinivasan]

Yeah, please. The,

[Stephen Glinert]

the truth is that like. And I think this goes back to your. Actually one of the other things you said, kind of relating it a little bit full circle here. Like, the United States will struggle to fight a long war. And it's not just like we need, you know, 10 years to get there.

[Balaji Srinivasan]

We need.

[Stephen Glinert]

And I think. Do you know Rush Doshi?

[Balaji Srinivasan]

Biology? Yeah. The longer telegram guy.

[Stephen Glinert]

Yeah. Like he's, he wrote, he wrote a

[Balaji Srinivasan]

book on some of the US China stuff.

[Stephen Glinert]

Yeah, yeah, yeah. He's an amazingly intelligent person. And every time you talk to him, you should have him on the show. He's such a cool person, such an intelligent person. Really nice. And the thing he says quite a bit is like, the only way for the United States to feasibly balance against China, you know, because there's not going to be some, you know, wonderful, like, industrial renaissance that's going to come around in, you know, even in 10 years. Like, we'll, we'll claw our way back maybe if we do everything right. But like, the only way to really do it is have allied weight. You need to build relationships. The United States needs to maintain relationships with Japan, with Korea, with France, with Germany.

[Balaji Srinivasan]

And this detonated right now.

[Stephen Glinert]

Right. Like, admin has done a really, really bad job. So like, like, I think that this is the, like the, the core problem is like, if you want to maintain a co. If you want to maintain balance against China, you need to be creating an anti hegemonic coalition where you can use the industrial capacity of the rest of the world. Because frankly, like, there's no world. Maybe in a decade we get a lot of it back if we play our cards right. But there's no world in which we're able to actually have parity against them in 2036. Right. Like, that's not a thing you can get.

[Balaji Srinivasan]

The thing is the gap is growing wider because everything is becoming stupider. But let me just show you some graphics just to compliment what you're just saying, Steve. Right. Do you see this tweet? This photo changed my understanding of war. Do you have this on screen, Theo? Yep. Okay, this is, to me, this is a very, very important photo. Basically, World War II did not actually end with the nuclear bombs, the nuking of Hiroshima and Nagasaki. World War II ended with the signing ceremony a few weeks later. And this was actually no small thing because there was like a revolt within the Japanese military. Fundamentally what the nukes were about. Prior to the nukes. The question was, okay, America believes it can invade all of these islands and get to Japan, but it lost so many people on just like one of the islands or a few of the islands in the island hopping campaign that they just didn't want to go against these. You know, the Japanese were kamikazes. They were, they were totally just, just there to die for the emperor, right? And there would be an enormous bloodshed, a lose lose for both the Americans and the Japanese. So the whole point of the war of the nukes was to in a sense punch them till they signed, right? That's the point. The Pentagon punches them and the State Department offers a document to sign. And that's the reason that like, you know, Bismarck said war is politics by other means. Right? You have to have a document. Unless you're actually going to quote, genocide them, which is not a modern era thing. And why is that not? I actually explained this from first principles, but like if you go and actually truly end a civilization or whatever the hell it was that was tweeted, you know, a few weeks ago, then you get reverse bandwagoning against you because then you're just like a murderer, right? And every other nation, you know, cuts off trade and so on and so forth, right? So just glass them or whatever is retarded because it means actually a trade cut off and so and so forth, right?

[Stephen Glinert]

So but I think a lot of these MAGA people don't at the core.

[Balaji Srinivasan]

So they just in the limits of force, right?

[Stephen Glinert]

No, but the idea that we're going to on our own get the industrial capacity back to be a counterweight to China on our own is just dumb and it's just not true and it has no factual basis. If you want to build a anti hegemonic coalition to counter China, you need to build a coalition. And given that that like doesn't seem to be going better, going very well right now we either have to rely on like Xi Jinping just breaks China or like, like we should be playing,

[Balaji Srinivasan]

which I'm going to get to that's right. But, but, right, but we should be

[Stephen Glinert]

black pilling pretty hard right now. Like especially because like the chance that the United States had and has and maybe there's an opportunity here still. And I remain optimistic and I'm a fundamentally like patriotic optimist for the United States. I should establish that this is not me dooming or whatever or being pro China. Like people will accuse. I got accused of that the other day and I'm like, no, you, you've gotten me way wrong.

[Balaji Srinivasan]

Basically the problem is you have to be pro reality. Pro reality. The reality shill. Unapologetic reality shill. A shill for observer reality. Right. Numbers. Right. And, and so for example, let me just to your point, Stephen, this is what I would start with, okay. I actually posted this at the very beginning of all this tariff stuff or whatever. Basically the very first thing you needed if you had a rational industrial policy is you would collect the data structure of what the supply chain actually is. Right? Is a graph of this supplier, right. Produces, you know, these things which is purchased by this plant. Right? And it's literally a gigantic network. How about that? Right. And how would you get this? Well, there's various tax reporting forms and so on that you could ask to. Because it's a tax, right. You actually, you'd have to get this information from all these companies, format in a certain way and so on and so forth. Right? With this, however you could actually get reporting. It wouldn't be just a stupid paper chase. This would be something which would be strategically important.

[Stephen Glinert]

This. Sorry, can I, can I interrupt you biology and say this, this is, this is a dumb point. Let me like actually explain to you. Yeah, I'll tell you like, this is dumb, right? This is irrelevant and I'll tell you why.

[Balaji Srinivasan]

To know what that is before.

[Stephen Glinert]

Okay, no, let's make a chip, right? And I'm going to give you like a really good example here. Let's make a chip. We're making a chip. We now need to get the chip packaged. Every chip needs to be packaged. Okay, great. Well if you want to get a chip packaged, it has to happen in Malaysia or it has to happen in Singapore because the packaging houses, there's like five packaging houses in America and they all suck. They're all too expensive. There's like making a chip at scale, you can't do it. Okay, great. Now we have to go to Malaysia and get a package. By the way, all the OSAT guys, the packaging guys in Malaysia are owned by Chinese companies. The other pack, the, the other place you can get a package is China. But now you need the materials to do the packaging. You need the, the specialized materials. And fundamentally, the United States, it's just unprofitable for the, for many, most countries in the west to make the ceramic material, because I don't know, company United States is going to accept that margins, those, like, really low margins we're talking

[Balaji Srinivasan]

about with the screw factory. How's it go ahead?

[Stephen Glinert]

But so what I keep going back to is, okay, you want to solve that, you got to go to Mexico where someone will be able to get. Will accept those low margins. And if you blow up the relationship with Mexico, you can't do that. So, like, you want to build ships for military scale, you can't do that unless you, like, build relationships.

[Balaji Srinivasan]

So. So it's both. And I completely agree with you that. Well, actually, let me zoom back for a second in general before I try to solve a problem. I try to get the information on the problem to understand the.

[Stephen Glinert]

Sorry, sorry, I sounded like way more confrontational than I meant to be.

[Balaji Srinivasan]

Yeah, yeah, I agree with everything you just said. Yeah, so. So, like the very first thing, people talk about supply chain as an abstraction, but like, does somebody have a printout of the supply chain? I'm sure China does because they have a gigantic fully vertically integrated thing where they, you know, WeChat is century integrated. And so. And so they can probably do it as a database printout, right? So to speak. Like they can. Maybe it was one giant SQL query or something. I would not be surprised if. I'd be. I'd be shocked, in fact, if they don't have it. I don't think, to my knowledge, that the US has actually a visual into its supply chain. I think Google does, right? I think Apple does. I don't think. I think Amazon does. I think Elon certainly does, but only within their scope, which is only for their, you know, kind of thing. I don't think there is an overall visual, right? And you can't hit what you can't see. And the thing is that the actually successful version of what's called import substitution, this is in the context, by the way, of last year's conversation on tariffs, Sematech was actually rational import substitution. And the way it worked was as follows. Rather than slapping Broadbush tariffs on everything from, you know, French wine to, like, Canadian maple syrup, which. None of which is strategic, and it's just like the most retarded form of nationalism on the planet. Like the. Instead you say, okay, I can see my full Supply chain. This thing is really important. Therefore what Sematech did is they said, okay, rather than import from the Japanese, that's supplier A, we're going to stand up supplier B in America. And we're going to do that because since we know all the customers of supplier A, since we did the mapping of the social network, they can be investors in supplier B and it's in their interests. Right. To stand up a second supplier. And they can also make a profit if it does well. Right. And now the first guy can do price discounts. And so, so you take away their margin. That's the way you do surgery rather than butchery on a supply chain. Right. Let me, I'm going to, Can I,

[Stephen Glinert]

can I go back? I feel like I'm going to be a broken record for a moment. But like, good example, Silicon Pac Silica is this initiative by the State Department. It's a very intelligent initiative. Jacob Paulberg is, is, is, is running in and he's very intelligent and I don't know. Have you ever met him or know him?

[Balaji Srinivasan]

I know of him. I know Verboy. And you know, like, go ahead.

[Stephen Glinert]

He's very intelligent. He goes. And he gets, he goes to the. A certain Singaporean that you and I both know in common. And he goes, I'm like, let's go get together. Let's do this stuff. Let's, let's. Like, that's just.

[Balaji Srinivasan]

I think the guy you're talking about is a government official. It's all very up and up, but go ahead. Yes. Yeah, go ahead.

[Stephen Glinert]

Like, you know, we go and we, we, we, we, we. We're going to work together. We're going to collaborate on unpack Silica. And Singapore is like, hell, yeah, we want to be part of your military supply chain. We want to be part of the anti hegemonic coalition against China. And then the US goes and does a. It's a, not a, it was a. It's like a trade investigation of them for dumping. And the Singaporeans are like, what is going on here? Like, they're confused by this incompetence that the Trump administration has done by like, like there's people who seem to maybe understand allied weight. There's people who seem to understand supply chain and the international aspect of it. And they need to. An anti hegemonic coalition within supply chains. And then there's people who seem like, they just like, they don't get it. Like, you can't. The Singaporeans are sitting there like, what is. Like, I, I don't. They're like they're confused, they're genuinely confused and like, you know, it is, it's

[Balaji Srinivasan]

self, non self recognition. Right. Like basically the ultra nationalists, the jingoists, have such an overactive immune system that they have tagged everybody who is non American as enemy.

[Stephen Glinert]

Yes, that's right.

[Balaji Srinivasan]

But they're also tag Elizabeth Warren and so on as Americans. So therefore essentially friend. So they have made enemies of friends and friends of enemies. Right. And so they're basically retards in my view. Right?

[Moderator (possibly Theo Jaffe or Sophia Puccini)]

Have they done this? Are there like bag of groipers who think.

[Balaji Srinivasan]

Absolutely. Like literally. I just had a thread on this yesterday. Yes, because what they do is here's why and I'll, I'll save. Because I just literally just experienced this. You know how like Democrats will say like oh, our democracy. And Democrats define democracy as ruled by Democrats. Meaning they're always surprised when 50% of the votes roughly go to Republicans. Oh my God, that's a crime against democracy, right? Republicans do the opposite. Republicans define American as red American and so therefore they're always surprised that 50% of Americans are blue. Americans have a completely different conception of what America stands for and is especially today. Right. It's, you know, the proposition and the nation, the software definition and the hardware definition. Nation comes from natality and birth and so on and so forth. Blood and soil is like the hardware definition of a nation, much more applicable for let's say Japan, right. Which actually is a group of people that would be in the same place, speaking the same language, same culture, same genetics, whatever, for whatever number of years. Right. Japan might be the canonical nation where the Japanese nation and the Japanese, you know, state are very similar. But anyway, yes, absolutely. Like look, the reason is they're doing it in a way where when they say American they're just seeing patriotic flags waving and so and so forth. And then they get back and they argue with AOC or whatever in the next thread and the fun, actually a great example of this is when like Trump is trying to invade Canada, right? And what'd that do? That meant Pierre Paul Ivray, who is a Canadian conservative libertarian who is sympathetic to Trump, basically got destroyed in the election. He was, he was going to be a clear winner. All that had to do was maga, had to do was just not tweet about him. Instead, basically what happened was Carney completely won. It was like a 40 point flip. Do you remember that? Do you see that? Hold on. Right, that graph, I guess, like I

[Stephen Glinert]

don't understand how they have conceived of, of an America Alone world. And they don't, they don't think about it.

[Balaji Srinivasan]

They, they just, they, they've inherited power they could never build.

[Stephen Glinert]

Right. This is a, is, is this just a. It's a LARP in the purest sense of the word.

[Balaji Srinivasan]

It is a complete LARP because they like, you know, for example, actually, you know, Biden had this also, you remember the whole semiconductor thing in the 2021-2024 period. Oh, we're going to beat China in semis and so and so forth. Of course you remember that, right, Steve?

[Stephen Glinert]

Yeah.

[Balaji Srinivasan]

The way I knew it was a LARP is there's not a single tweet from the White House on, you know, like studying PNP band gap semiconductors. None. There's nothing on electrical engineering. Right. Like their bully pulpit had absolutely nothing on the actual concrete brass tax of study. This program at this school, you know, it's like the, there's a, it was

[Stephen Glinert]

a, it was a huge. I'll tell you what happened. It was a huge pot of money was given to a bunch of people and it never got spent because no one knew what to do with it.

[Balaji Srinivasan]

Well, okay, so, but, but here's, by the way, this is, this is what happened. Like, basically the conservatives were totally about to win and all MAGA had to do was not say anything. Instead, all the tweeting about invading Canada basically meant that the Canadian conservative was considered an enemy and the Canadian liberal won instead. Okay. Because maga, you know, basically, I don't know if you remember those, that period, but basically, you know, it's like, yeah, we're going to invade Canada, make it the 51st state. Woo. You know, and they were like joking, not joking. You know, they're also threatening to invade Greenland or whatever. And that stuff has extremely high cost with zero benefit because it turns friends into enemies and it actually gives enemies new friends. Right? Because all the Canadian conservatives were like, well, I guess Trump is my enemy now. That sucks. I guess, you know, it's one way praise, right? So, yeah, I think magas are magas. Magas genuinely think that. You know, it's like, it's actually similar to what happened with BLM where there was a spike of insane levels of identity and virtue signaling around something and then just totally collapse later. Right? That's what they're doing with the American brand. They're just spike. They're signaling around it like this. And what's happening at the same time, you know, like lots of countries, by the way, have imposed reciprocal passport restrictions. Did you see what happened on that

[Stephen Glinert]

you're not going to be able to go to Europe without like a visa basically.

[Balaji Srinivasan]

Now. Yes. The US password is actually crashed, unfortunately. Right. And here, let me bring up this graphic and the, this is, this is something here, but this is something that's going to go further now.

[Moderator (possibly Theo Jaffe or Sophia Puccini)]

It's like an EVA thing where you pay money and get auto approved, right?

[Stephen Glinert]

Yeah, it's like a, it's an S.

[Balaji Srinivasan]

The point is a trajectory. Right. Basically this passport is just crash over here to 12th place. Okay, but that was last year. This year, who knows where it's going to go. I think like a lot of countries,

[Moderator (possibly Theo Jaffe or Sophia Puccini)]

a lot of that is because like a bunch of like Sahel countries banned the U.S. like U.S. citizens from entering like Brazil. You can't go to like Mali and Niger and like Burkina Faso anymore. And North Korea.

[Balaji Srinivasan]

It's also Brazil. It's Brazil.

[Stephen Glinert]

But it's also, But Europe is imposing certain.

[Balaji Srinivasan]

No, no, not, not, not just Europe. Yeah, yeah, go ahead. Sorry.

[Stephen Glinert]

No, I, I, I, I, I. Listen, this is kind of, I think we're tangenting a little bit because I think, I guess like there's, there's a few resolutions that I see and like one resolution that I've kind of nihilist come to that might be the Maga game actually, but I don't know, is like Chimerica and everyone else, like, because, you know, everyone else basically becomes like, we get a Chimerica. We, we divide the pie in half and then everyone else becomes irrelevant and we dominate our head. You know, we dominate our hemisphere again in a way that we haven't for a hundred, you know, like a, you know, in, in a, in a more aggressive fashion. Like that's what's going on with Cuba, that's what's going on with Venizel when it. Venezuela and we just do a Cherica. We, we, we, we hand him Taiwan because it doesn't make sense to, to do it anymore. And we just, we go from there and like we, we, we, we like live in that world where Europe gets fed to the Russians. And like, you know, like, not really because Europe can like Russia's pretty irrelevant now, but like Europe kind of fades into Islamic republicanism becoming an Islamic republic. And maybe the Baltics get eaten by the Russians. And then we divide the world of China and that's the res. That's the Maga end of the story. Right? Like that might be it. Maybe that's the ending of this, of this tale. But you seem to have like, there's no like that's the ending of the tale that I'm like nihilistically looking at right now.

[Balaji Srinivasan]

Okay. It's gonna, I think, be a lot worse than that. So here's why I don't think that's by the way.

[Stephen Glinert]

But hold up. Is that so bad, what I just said? Is that so bad? It's kind of, I think like it's an okay ending.

[Balaji Srinivasan]

The, the prob. Yeah. The problem is I would start with, you know, this is saying goes like, who's we? Kimasabe. Right. Like, you know, the, the old tanto. I mean that's a really old reference. But who's we?

[Stephen Glinert]

What are you referencing? It's.

[Balaji Srinivasan]

Yeah, that's why it might be so old. You guys don't get it. But let's start with who's we? Right. Democrats and Republicans. This is from almost 10 years ago. This is 2017. And it showed that Democrats and Republicans have come apart on social media. They weren't friends with each other anymore. Okay. They're basically just there to fight. Blues were friends with blues, reds friends with reds. Okay. And you know, now like, basically, you know, that's. There's all these graphs of polarization and so on. You've probably seen this as well, where blue is its own group and there's all these red tribes. Okay. Like blues are in blue sky and reds are on X or gab or whatever other places. Right. And so the digital secession is already here. Literally millions of blues left digitally for blue sky. Right. Twitter is basically, you know, like Tower of Babel moment. Twitter doesn't exist. There's blue sky and X and all these other Twitters. Right. You see that migration between states as well. Right. The great sort with all kinds of reds leaving blue states and you, you essentially, you know, I, I think the issue is that without actually understanding the history of the rest of the world, right. What happened to Korea? Is there a Korea? Korean say we. No, there's North Korea and South Korea. Right. What happened to China? It was communists and nationalists. Right. What happened to India? There was partition all around the rest of the world. What happened to Russia? They had the Russian civil war and the capitalists had to leave or be murdered, obviously. What happened in Germany? Right. This is, this is something where in much of the rest of Eurasia they just lost their minds and they just had a serious all out fight between left and right or whatever factions, often multiple factions. And that's obviously coming here, this coming to the US and it's like you're in the middle of it and it's a cold civil war that's ramping up.

[Stephen Glinert]

So I don't associate. So I know you. We've, we've, we've debated this before, but I actually like the more salient power structure shift that I, I see is like a resorting of global power and then I see that a secondary. Like I don't know what happens to America. Like I'm not my, not my expertise and I don't want to weigh in it. But like there is a resorting of global power and like I see an ending in which China rules the world. I see a chain in which I'm very scared of. I see a chamerica ending right. When we come to some resolution with them. And I, I don't know what happens to the rest of the world. I don't know what happens to Europe. I don't know what happens in the Middle East.

[Balaji Srinivasan]

Let me.

[Stephen Glinert]

And like, let me give. It might just be anarchy, right?

[Balaji Srinivasan]

Well, so, so let me give a thesis on that. And actually there's something slightly more cheery, okay. Which is as follows. The most. Okay.

[Stephen Glinert]

The most doomerism going on in the show today.

[Balaji Srinivasan]

Well, I am, I, I'm, I think of myself as a total like, you know, you know, you do at a company. Bad news first, right? Bad news first. Be an adult. Rip the band aid. Give it to me straight. Right? That is, that's the only way you can manage any numerical operation. Right? Like basically as a CEO, you're, you know, founder, CEO. Every day you wake up, all right, what blew up today? But would somebody be an anti. Like imagine if Google's like some, their website was down and someone. Google's website is down. They said, what are you, a Facebook shill? Why are you saying something bad about Google?

[Stephen Glinert]

You know?

[Balaji Srinivasan]

Right, right. Like complete and total realism is absolutely necessary for self improvement. Okay, so with that said, let me, let me lay the stage here. I think what's going to happen first? Have you followed what's going on with Mark Carney?

[Stephen Glinert]

I, I mean I think that he's. This is like, yeah, this is, this is the bad ending, right? Like, you know, my, my Rush Doshi, quoting him again calls it the heroin ending. Right? The heroin like Europe and Canada get like basically deindustrialized by China. They bleed out like a heroin addict and like we're really left alone. And that's a. China rules the world. Yes, this is exactly it. Like this is the China rules the world scenario.

[Balaji Srinivasan]

Well, it rules the world because I think it's a little more Complicated than that. And here's how I think about it. Okay? The. So this is a really, really, really important event because, you know, in 2016, Trump came down the escalator and really what he was saying though, this was not played up. It was somewhat played up in, in like a mainstream media. But, but actually it was one of his core things. What Trump was saying was America's losing and China's winning. That's why he said China, China, China. In 2015 and 2016 before that was a thing. Right? And McCarney did, in his own way is iconoclastic. He said America's lost in China's one. And that's why Carney got the first and best terms by surrendering to China first. And what is he getting for that? Carney and Chinese Canada are getting electric cars. They're getting their electrical grid built out by China. That's something that was underappreciated in the announcement. They're probably getting maybe drones. Why? Because Carney said something like if Trump invades Greenland, then, you know, we'll fight or something along those lines. And I was like, that's interesting. And I wouldn't be surprised. They're getting drones or something. And Vancouver becomes the drop off point for all this kind of stuff. And the thing is, in a sense, I mean, Carney's a very high IQ guy. He's much higher IQ than Justin Trudeau. Even though they're nominally Democrats, Carney may be the single smartest person on the left. Carney is actually the, in a real sense, Mark Carney is the most important American Democrat despite being Canadian and naive. Bukele is the most important American Republican despite being Latin American. In fact, the political innovation for Canadian for, for the left and the right is coming from outside America because Carney and Bekeli are both running their own countries and they're not locked within the, oh, we need to solve it within the American system constraint.

[Stephen Glinert]

But this is the thing like if you have. So let me. The, the horror scenario, I don't want, Sorry, I'm using a lot of big words here, like loaded words here. But the horror scenario is the US Loses its coalition. And actually what happens to China, what happens in Canada is the following. Canada gets Chinese infrastructure, Chinese cars, Canadian domestic manufacturing dies. They are a resource exporter to China. They become like, they send their raw materials. China owns the grid, China owns all the infrastructure in Canada. It looks like an African country. And then we have, you know, we have, we have basically a Chinese ally on one border. God knows what happens in Mexico, probably a similar thing eventually. And you know, we have a failing Europe and then, then we're surrounded and that is the ending in which like we have to bend the knee and we bend the knee last. Well, and that will be the worst ending of all.

[Moderator (possibly Theo Jaffe or Sophia Puccini)]

I hate to cut you guys off, we're coming up on time, but it's been great having you both on. We'll have to have you back eventually pretty soon, I hope. Thanks so much for coming on everyone.

[Balaji Srinivasan]

I'll just say one thing, one thing is which is I do believe the free Internet can, will be a balance to this. That's why decentralization encryption. You know, I think that we can build a coalition of global techno capitalism on the other side to balance as opposed to beat. But we just have to be absolutely realistic about like, you know, what time it is, right, like where the numbers are and just I'm a reality shill and you know, doc, give it to me straight, you know, that kind of thing, right? And I think there can be hope and a positive sign on the thing on their side if we organize around the free Internet.

[Stephen Glinert]

And I disagree with you. I want to make America actually make get that anti hegemonic coalition together. But I feel a little black pilled but we're both pulling for the same thing, which is not a Chinese old world freedom. Yeah, we both love freedom here. All right, bye bye.

[Moderator (possibly Theo Jaffe or Sophia Puccini)]

Thanks so much for coming on.

[Stephen Glinert]

Thanks so much, guys.

[Podcast Host (a16z representative)]

Thanks for listening to this episode of the A16Z podcast. If you like this episode, be sure to like, comment, subscribe, leave us a rating or review and share it with your friends and family. For more episodes go to YouTube, Apple Podcasts and Spotify. Follow us on X16Z and subscribe to our substack@A16Z substack.com thanks again for listening and I'll see you in the next episode. This information is for educational purposes only and is not a recommendation to buy, hold or sell any investment or financial product. This podcast has been produced by a third party and may include paid promotional advertisements, other company references, and individuals unaffiliated with A16Z. Such advertisements, companies and individuals are not endorsed by AH Capital Management, LLC, A16Z or any of its affiliates. Information is from sources deemed reliable on the date of publication, but A16Z does not guarantee its accuracy.

[Balaji Srinivasan]

Sam.