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Francis Fukuyama
Very happy to be here with Dan Wong. He is a research fellow currently at the Hoover Institution. He's just written a new book that's gotten quite a lot of attention called Breakneck Comparing China and the United States and a lot of other ideas too. It's a pretty rich book and I think some of the other reviews have focused on the kind of core argument, but have missed a lot of the points that I think are quite, quite interesting. Why don't you just summarize the base argument about how the United States and China differ?
Dan Wang
It's great to be chatting with you, Frank. And I think just as a preview for our readers, I will later on grill you a little bit about China. And so that's just a little preview. And the very simple idea that animates my book is that China's a country I call the engineering state because it's has leadership that is intent on engineering the physical environment as well as the economy as well as society. And the United States is a country I call the lawyerly society because all the elites are trained at the Yale Law School.
Francis Fukuyama
Yeah, well, most of them. And what are the consequences? The social and economic consequences?
Dan Wang
I think some part of China's economic success is due to a literal minded engineering approach to economic growth. In the days of Hu Jintao, before Xi Jinping, being a Communist Party official was relatively straightforward. You had two metrics to hit. One was that you would maximize the GDP growth in your jurisdiction. Second was that you would minimize the number of mass incidents, sort of their euphemism for protests in their jurisdiction. And if you are able to generate high economic growth without too many protests and demonstrate that you're able to build roads and bridges, bridges and subway stations and parks, that was a pretty straightforward program for advancement within the Communist Party. Now Xi Jinping has muddied the waters a little bit with all sorts of metrics. That's poverty alleviation this week and environmental protection the next week. But for a while it felt like an engineering exercise to just focus on economic growth. We think for the most part that has been broadly positive with China to demonstrate much greater growth than India or Indonesia, other near nearby countries. That was pretty positive. When it comes to social engineering, I think that it is overwhelmingly negative. They put the population into these boxes. You may have to go through the Hukou household registration program, which if you are a person living in rural areas, cannot very easily move to Shanghai or Beijing. Opportunities are much better if you are a Tibetan in Tibet or a Uyghur in Xinjiang. The Communist Party has put a lot of emphasis into sinicizing your faith. Then there are big social engineering projects which I write about in my book Zero Covid, which I lived through, as well as the one child policy.
Francis Fukuyama
We'll get into that further in a minute. But one thing I thought was interesting actually and underappreciated was your take on American politics. So you're a fan of the abundance movement, which is directly aimed at those lawyers that you say are really good at stopping stuff from happening. Maybe you could talk a little bit about that.
Dan Wang
Yeah, I would say it is maybe nicely aimed at the lawyers who are trying to stop stuff. I think that the abundance agenda as I understand it is that it is trying to do two things. The first is to increase state capacity, and then the second is to make supply a much greater focus of the left. The American left tends to deal with every problem through another subsidy program. And when supply is constrained, as it is in many big cities, you give rent subsidies to people. That simply drives up the cost of rent and the landlord's pocket, the entire difference. And so I see the abundance agenda as speaking mostly to the left, in which my view is that blue states like California, Massachusetts and New York have manifestly not built enough housing in their states. You get these absurd projects like it's taking 20 years to add a bus lane to Van Ness Avenue or having New York City subway extensions come in at costs at something like eight or nine times the levels in Madrid or Paris. So I am optimistic that abundance can speak a little bit more to the the degrowther leftists who have gummed up too many of the words. I think that their one criticism of parts of the abundance agenda, especially as embraced by Ezra Klein as well as Derek Thompson, is that they were a little bit too nice with so many of these interest groups. They can identify that there are interest groups as specified through folks like Mansur Olson, but they're not really punching hard enough at them. My view is that they have not been mean enough to the law schools as well as the law professors. There's now greater self consciousness among the law professors that there should be a little bit of a shift away from valuing social impact litigation as the core objective of law students and tying up the hands of the state as the core objective of lawyers to move away a little bit from that. But I think it is good to open with something softer and then think about harder reforms later.
Francis Fukuyama
No, it's interesting. I think young people interested in social justice these days in the United States tend to go to law school so that they can actually learn how to sue the government. Because in a way, the government is the big, you know, enemy that's been captured by corporate America and isn't paying attention to the social impacts of the programs it runs. And they don't want to go to work for the government. They don't want to add to the state capacity of the United States to actually do good. And that's a really big change from the days of the New Deal when you had all these, you know, brilliant people actually signing up to go work for the, for the state.
Dan Wang
There's a really excellent book, Public Citizens, by Professor Paul Sabin at Yale, who traced through, you know, there was kind of one figure that was really responsible for this change, and it was Ralph Nader. Ralph Nader, who led a lot of the consumer interest movement, decided to be a, quote, watchdog of the government, that he rallied other elite law students throughout the 1960s and 70s to say, sue the bastards. And the bastards referred to the US Government. And now they really shifted the mindset of a lot of these sort of students to constrain the ability of the government to do stuff. And it floats supernaturally into Ronald Reagan's dictum that government is the problem, not the solution. It would have been impossible to tell whether it was the left, liberal left of the seventies, or the right who was saying something like that. I want to get your view of abundance. What are its strengths? What are its weaknesses?
Francis Fukuyama
Well, I pretty much agree with the underlying analysis. I think that there's both a political and then a normative imperative behind it. So the political one is that, you know, I think the lawyerly gumming up of the ability of America to build stuff is actually what creates Trumpism. Because, you know, what are Trump and Elon Musk all about? It's like just bulldozing all these regulations and not listening to the law, breaking the law when necessary in order to get stuff done. And we need to get stuff done, but it shouldn't be, you know, simply by ignoring the law. You really need to reform, let's say, the permitting process and make it more, you know, effective. The part that I think needs to be fleshed out in that one, this group Reform for Results that I'm running at Stanford is trying to figure out is how to actually implement abundance. Because they're pretty light on the details. There's a political challenge which has to do with what they call the groups. Democratic Party is full of these sometimes single issue groups, you know, on abortion, women's Rights, workers rights, you know, environment. And you know, any candidate that runs in that party really they give a question error to and if you don't answer it the right way, you're never going to make it. And that's going to be one of the big challenges for any abundance Democrat that wants to run on this ticket is how do you deal with the groups. And they're not going to want power taken away from them. And it is a zero sum game. I mean, either the abundance agenda is going to actually succeed in getting stuff done or these groups are going to be able to stop it. So that's something I think that really needs to be fleshed out.
Dan Wang
I wonder about your view of California right now. I mean, California is the most anti growth state.
Francis Fukuyama
Hawaii is the most anti growth state.
Dan Wang
Hawaii, well, it's pretty near neighbors. But these two places which are obviously pristine and beautiful and then these people move in and then they pull up the ladder. I think that is. There's something very obscene about that sort of a behavior. Understandable, but I would say obscene. But there are certain ways in which California is reforming itself to build a little bit more. I'm not sure if this is through confrontation with the groups, but there is enough of a sense that things need to change.
Francis Fukuyama
There's a YIMBY movement, a yes in my Backyard movement that has chapters in many parts of California. Gavin Newsom, I think has been definitely trying to move to the center on some of these issues. So we have this wonderful law called ceqa, the California Environmental Quality act that allows any resident of California to sue any project they want anonymously. And they do. And so they've been trying to cut out certain projects from CEQA litigation. I think they actually need to do a much more fundamental revision, reduce the, you know, for example, only about 11% of CEQA lawsuits are actually launched by an environmental group. The others are launched by labor unions or business competitors or NIMBY neighbors that really don't care about the environment. They're just using this law as a way of stopping stuff that they, they don't like. And so there's ways that you can, I think more fundamentally change the application of CEQA to make it easier. So I don't think we need to get into all of those details. But I do want to talk about your discussion of a couple of issues. So let's just begin with the whole problem of outsourcing to China. I think you quoted this. It was Michael Boskin or some Reagan era official saying it doesn't matter whether you make computer chips or potato chips. You know, whoever does either one the most efficiently, that's fine in a international division of labor. And you make an argument that I think a lot of the free market economists in that period really got. They had a deep misunderstanding about the nature of the manufacturing economy, which many of them thought, you know, the United States is now into services, information. We could leave all that to somebody else. What was the problem with that?
Dan Wang
I think that Michael Boskin's remark, my dear colleague at Hoover, I think it was. It was a fun, but a little bit too glib of a remark to say that there's no difference between computer chips and potato chips. Well, I think there is a difference between computer chips and potato chips. That countries can grow moderately prosperous by producing crops like potatoes. And maybe this is kind of Argentina, the start of the 20th century, but, you know, if you are able to make computer chips, that really guarantees that you have the technological complexity to really advance into the front ranks of economic development in a way that Argentina has not achieved. And a lot of my thinking about this has been drawn from my six years of living in China. I started out in Hong Kong, then I moved to Beijing, and then I moved to Shanghai. And when I was in Hong Kong, I every so often took the train or the ferry over to the nearby city of Shenzhen just to kick the tires a little bit and see what it was like.
Francis Fukuyama
You were working then as a. I
Dan Wang
was a technology analyst at a firm called Golf Cow Dragonomics, thinking mostly about China's chip sector manufacturing, writing research notes for a predominantly finance hedge fund, pensions, endowments audience, trying to get a little bit deeper than the Wall Street Journal or Bloomberg headlines on China. And a lot of what I was seeing in Shenzhen was this frenetic pace of new product creation that felt vibrantly exciting to me. Now, Frank, I think you would appreciate this analogy. Shenzhen think is the hardware capital of the world. And it really feels like China's answer to San Jose is this set of boring office parks, parking garages everywhere. Not that much exciting culture, but absolutely the center of the technologically accelerating universe in terms of especially hardware. When I was going to Shenzhen, I was seeing the piece dividends of the smartphone wars, which was a phrase from Chris Anderson, came out how companies that started from Apple onwards, but also many other companies invested hundreds of billions of dollars into the smartphone supply chain, such that these cameras, which would have been military grade 30 years ago, are just exceptional objects we all carry around in our pockets. And what folks in Shenzhen were doing were taking all of these new components from the smartphone supply chain, these remarkable improvements in capacity as well as reductions in price for not only cameras but also batteries, all sorts of these little engines and reconstituting them into something like the consumer drone which is made up of battery, different sensors, propeller, obviously the camera as well that the Shenzhen was almost uniquely able to put together.
Francis Fukuyama
One of my hobbies is being an FPV drone pilot. DJI is one of the companies in Shenzhen that did exactly what you've just described.
Dan Wang
Indeed, DJI is making something like, you know, 80% of all the drones in the world, the American consumer drones have not kept up with this competition. Tell me about dji.
Francis Fukuyama
I started this actually when I first moved back to California in 2010 and actually Chris Anderson is part of the story because he had one of the only consumer grade drone company, American drone company, something called US Robotics. And I bought one of their drones and I bought a DJI drone way back then and basically the US robot. I'm sorry, if Chris Anderson hears this, I apologize, but we're going to send
Dan Wang
it to him afterwards.
Francis Fukuyama
It was not a good drone. It really was very hard to stabilize. I had a lot of trouble getting that thing working. The DJI drone all the way back 15 years ago flew right out of the box, very easy to control. They had obviously figured out the stabilization algorithm, you know, in it. And to this day there is not a US manufacturer of a sub thousand dollar consumer drone. And it's crazy because the entire war in Ukraine is now being fought between two sides using these very cheap consumer drones and we can't produce one. I mean even after all the political incentives to get this done. And so there's something really wrong I think in our industrial system that that can't supply that need.
Dan Wang
What are you using drones for, Frank?
Francis Fukuyama
Just for fun. One of my hobbies is photography and I've been moving into videography and I always wanted to be able to take, you know, aerial photographs of beautiful landscapes and you can do that with one of these. Except that the state of California won't let you fly over any part of the state that's actually you'd really want to photograph. But that was the objective.
Dan Wang
I am learning so many great things about you, Frank. Photography. You have been a woodworker. But we'll get into that, I think something I think you would appreciate with because that you are a hewer of wood that, you know, working with your hands is something quite important. I've been to several Apple contracting companies and you walk through these companies in which people are dressed up in uniforms. If I ever go into an. An Apple supplier, I would go through probably three to four levels of security to make sure that I haven't pocketed any of their new. Everyone is moving into the cafeteria at exactly the same time. You get these giant waves of people. Really feels like military precision over there in a way that I think, you know, the Chinese have been, you know, able to do quite well. And I was always struck, you know, walking through some of these factories that these people are labeled as unskilled workers, and I am labeled as a skilled worker. And this is completely ridiculous that these people are able to do such wonders with their hands. And all I'm able to do is email by typing on a keyboard. And so I'm much more impressed by people like that. It was hanging out in places like Shenzhen that really made me realize that, you know, there's different things that we need to understand as technology. I think the first part of technology is the hardware and the equipment, all of these things that we can physically touch and grasp and move around. And there's a second aspect of technology which is written instruction. Everything that includes patents and blueprints and recipes. But third, and the most important part of technology, technology is the process. Knowledge of everything that is impossible to write down, that exists in people's heads and between people's heads that are. That constitute communities of engineering practice. And I think this is. We are sitting here at Stanford University. I think this is abundantly clear to all of us at universities that teaching cannot be only through lectures, that there has to be some other component going on here, otherwise the students can just watch all of these on YouTube or wherever else that all of us who have essentially email jobs like mine, essentially, essentially, you know, it is really difficult to transfer skills even in these office workers. And I'm really struck that, you know, in places like Shenzhen. Another example that I bring up, the Issei Grand Shrine in Japan. You know, this is one of these core holy Shinto shrines in Japan that people tear down this shrine every 25 years, essentially one generation, and then rebuild it in the next spot, essentially to transfer knowledge of wood joinery as well as, you know, other parts of woodworking. And so I think that, you know, sort of explicit instruction where people are meant to observe and learn and then have a mandate to transfer skills in the future. That's something that. I don't know if this is just more common among East Asian culture. I don't know what sort of component there is here. But it also feels like something that the Americans don't prize enough because they are distracted by the shiny objects, sometimes quite literally, or they believe that they can write these exquisite manuals and then people just know what to do.
Francis Fukuyama
Yeah. It's funny that America prides itself as an egalitarian society, but actually there is a very strict social hierarchy and people that work with their minds are paid higher salaries, given much greater social status than people that know how to do things in the mechanical world. It's not true of all Western countries. Germany and Japan still have a tradition of manufacturing. So for example, in Japan they have this national treasure. There's like a hundred people that are single and you know, some of them are machinists, you know, that can do really very precise machining of parts on which, you know, any kind of precision manufacturing depends. Germans and the Swiss, you know, I think have similar kinds of. They've retained or they've tried to retain similar kinds of manual skills. In the United States, you know, we just said, okay, that's something that can be done by somebody else, you know, for lower pay in a foreign country. And we didn't really bother to hang on to those.
Dan Wang
So why don't we bring that idea to the U.S. i mean, there are people, the people who are really celebrated and feted in the US are these pop stars and influencers and maybe these business leaders who crave some degree of prestige. And that's all fine, but why don't we designate certain people as living national treasures? Whether that is a baker or whether that is some sort of a machinist or someone making, you know, wood joinery, whatever it is. Why, I mean, there should be some way to designate that. Honor the people here, craftspeople in America, right?
Francis Fukuyama
Yeah. There's a book by Matt Crawford called Shopcraft as Soulcraft. I reviewed it in the New York Times Book Review. I helped it become actually a bestseller at the time. But he makes a similar point that in high schools all over the United States, shop classes were being displaced by computer graphics under this theory that everybody had to move up the value added chain and abandon these manual kinds of skills. He himself is an auto mechan. He built this Volkswagen, he put a Mazda engine in it. And you know, and he describes, he ran a motorcycle shop because he became disillusioned with the kind of service, you know, intellectually based economy and repaired motorcycles for a number of years. But he has a really beautiful chapter in which he describes reboring a four cylinder engine and the kind of skill that's required that you can only do by actually having done it yourself and watching somebody else do it, because you have to feel for the tallest and, you know, and that sort of thing. So, yeah, that would be great if we could bring that back. But I don't see any inclination. You know, rewards go to people that write software and work with their, you know, work behind computer terminals.
Dan Wang
But I feel like this cannot be a lost cause. There are all sorts of strange reservoirs of prestige that exist all over America. I don't know, Pulitzer prizes here and MacArthur awards there, and Stanford itself has some sort of prestige. And so maybe this could just be something like the Stanford effort award for wood joinery. I think that should be something that's achievable.
Francis Fukuyama
No, that's. That's a revolution that you could imagine happening, and it would be a good thing if it did. All right, so we had a big problem with outsourcing because we kind of looked down on a certain set of skills that were involved in manufacturing, and now we're kind of stuck because it's very hard to recreate them. One of the things I thought was interesting was your description of the way a lot of these Chinese manufacturers could switch from doing auto parts to. To, you know, making masks for ppe, you know, during the COVID epidemic. And that seems to be a skill that has been lost in the United States.
Dan Wang
And that is something I feel like is something to do with the Chinese dispensation for being pretty pragmatic. I feel like Chinese can often be just a super pragmatic people. If the rules change, they just change with it without questioning why are the rules changing? And one of my. Maybe the best quote I've ever heard from someone in my six years of living in China and interviewing a lot of factory managers and business people is that I was speaking to a factory manager who worked for a Chinese affiliate of an American firm. And he told me that during the early days of the COVID pandemic, too many American firms were asking whether making masks and cotton swabs aligned with their, quote, core competence. And for most people, that answer is no. Among the Chinese, most factory managers decided that making money is their core competence. And they follow the market, and the market tells them to go make masks, and so they. They go make masks. And so I was wearing masks when I was living in Beijing and Shanghai. First from Foxconn, which is the maker of iPhones.
Francis Fukuyama
IPhones, yeah.
Dan Wang
And then JD.com, which is one of China's big E commerce platforms that directly is kind of like the Amazon basics masks that worked that I was using. And there's all sorts of these other kind of assumptions in China which seem quite different in the US. So Tim Cook is famous, famous for saying something like inventory is evil. You need just in time production. We learned from the Toyota production method in which everything moves like this well choreographed dance. And the challenge with that is that everything is exquisitely for perfection at all times. And if something breaks down, it becomes really difficult to retool a lot of these different processes. And although I wasn't listening, I wasn't living in America in the early days of COVID you know, people were complaining about whichever berries would disappear in their grocery store, depending on which part of California, California or Mexico was really ravaged by the pandemic at the time. And a lot of economists would make fun of Chinese state owned enterprises for being quote, quote, unquote inefficient, mostly because they have too much staff, too much spare capacity. And you know, yeah, I get it. A lot of these processes could be improved. They should use more software and maybe they should learn a little bit more about the Toyota Apple production method. But just having a lot of spare hands in place, which they can activate in a crisis, I there, there has to be something to that idea in which we are not always exquisitely poised for perfection.
Francis Fukuyama
Yeah, well, labor shortages have been a bane of a lot of American manufacturers at different skill levels. I mean, they don't have the production engineers that China does. But just people that are going to show up, you know, without having a drug habit or, you know, without a lot of absenteeism is also a big problem in the American labor market. So, okay, let's move on to what was one of the most difficult chapters to read, which was the chapter on the one child policy. So you are not a total fan of the engineering state, and in fact you argue that the engineering state has some real downsides. You've alluded to this already, so why don't you talk a little bit about what happened as a result of one child.
Dan Wang
Let's go to the year, roughly 1979, when Deng Xiaoping had inherited the country, or rather seized power as paramount leader via Hua Guofeng after the Mao Zedong years. Deng surveyed the wreckage of the country which was totally devastated by the Cultural Revolution under Mao. And he asked, what was Mao Zedong? Mao was first and foremost a poet, second, some sort of strange romantic. Third, he was a warlord that is responsible for the deaths of tens of millions of Chinese people. And what is the opposite of a poet. Well, surely the answer is engineers. And so this is when Deng Xiao started promoting a lot of people trained in engineering of a very Soviet style into the Central Committee as well as the Politburo, and who are some of the most prized people within the communist state. It wasn't so much the economists who were pointing out all of the problems with Mao's Marxist analyses of the economy. Rather it was the military scientists who were building the bomb for Mao as well as helping with other big projects to achieve deterrence or national greatness. So out of this keros charismatic set of military scientists was one particular guy named Song Jian, who was a missile scientist. He was a brilliant mathematician. He co authored one of the big cybernetics textbooks in China. And he whispered into the mouth, into the ears of China's leadership. Deng Xiaoping, who was the top leader as well as Chengying who managed the economy. There is a elegant solution to China's overpopulation problem. And Cheng Yun and Deng Xiaoping knew that China's population was large. But when they learned that China would have over a billion people, they were pretty shocked and they were fearful that so many mouths would ruin this economic modernization which the two of them were super interested in encouraging. Song Jian proposed the one child policy, which sounded so elegant, I think that there is some sort of bureaucratic appeal to both Chengying as well as Deng Xiaoping, who know how local officials react to central government edicts. If you tell them, you know, your target is one that's enforceable, nice round number, very little ambiguity. It's not, not 1.5, it's not 1.2.1, you know, some strange number like that. They know what to do. And so after you had this military scientist influence population policy, that's the first crazy part. The second crazy part was the actual enforcement of the one child policy, which I describe in my book as a campaign of rural terror meted out against overwhelmingly female bodies. So according to China's official statistics, over the 35 years of the one child period, from 1980 to 2015, China delivered about 300 million abortions, paralyzed 100 million women and 25 million men in often brutal processes throughout the countryside.
Francis Fukuyama
A lot of late term abortions, a
Dan Wang
lot of late term forced abortions, a lot of posses of essentially thugs going up to women and families, trying to, quote, persuade them to give up their pregnancies for the good of the nation. And a lot of these methods were anything but persuasive fact ended up being quite coercive. There are so many stories of little baby, almost overwhelmingly girls being left outside to die of exposure being given to other families. There is something like 40 million missing girls because of the male preference, son preference among Chinese families at the time. And so this was a just a super brutal process that the Chinese state meted out against the population that I think essentially left no family untouched for 35 years. And so, you know, this is one of these very strange things where in which they were seduced by some form of scientism, used an engineering approach, put a former major general of the People's Liberation army in charge of running the family Planning Commission, delivered vast traumas throughout family over the period of mostly a decade, but throughout 35 years.
Francis Fukuyama
And it's also a good argument against autocratic decision making because the autocrat doesn't really have to bounce ideas off of a whole lot of people and doesn't necessarily respond to criticism or setbacks and that sort of thing.
Dan Wang
And ironically it was bad cybernetics because cybernetics really has to incorporate feedback loops into the system. And there was essentially no feedback loops. It was just this one guy handing down this sort of a decision and then getting out of the way and being serenely untroubled by what was happening throughout the countryside. I'm glad that you picked up this chapter, Frank, because it was definitely my favorite chapter to research and write as an author. Why did it speak to you?
Francis Fukuyama
Well, I think I understood that one child was a really difficult policy to enforce, but I didn't really understand the depth of the suffering that had been created by, by the enforcement of that policy and just the intimate way the Chinese state was interfering in the lives of so many millions of women. And the scale of the thing is just mind boggling. Those 40 million missing girls and then the way it was implemented, I mean basically a lot of it was not abortion, it was an infanticide. And that's really a terrible idea that a modern state could be engaged in something like this. That. Yeah, well, those are a couple of the reasons why I think your book has been, you know, really valuable and I hope a lot of people read. But you said you wanted to ask me some questions.
Dan Wang
I wanna, I do wanna think about some of these issues of China right now. I. Over the weekend I reread the. The second volume of your big book, especially the parts concerning China or Origins of Political Order. The keep coming back to this phrase. The preco. Mostly modern state that was the Chinese state that I think was practicing absolutism way before any European monarchs whiffed this idea. Just give us your sense of what is the. How do you understand the contemporary Communist Party in your view, in the year 2025, successes and failures? Whether this is kind of tracking to a prediction that China cannot really be great and manage success under this sort of a political system, well, I'm not sure.
Francis Fukuyama
I wouldn't assert that it couldn't do it. I think the record they've piled up so far is actually pretty impressive. I guess what the conclusion I came to in writing those two volumes on China was that the Communist Party really was a worthy successor of the dynastic Chinese state in the sense that, that they did not have accountability mechanisms and they did not have kind of shared and balanced, you know, powers within the government that could check each other. What they relied on was a kind of top down monitoring system, but that those systems run into problems. So in Imperial China you had a bureaucracy, and that was the basic argument of the first volume, that China is the first world civilization to create a modern merit based centralized bureaucracy. The emperor then had a problem. How do you control the bureaucrats? And so he actually created a unit corps in the, you know, and, and the problem with the bureaucrats of course was corruption, that they would favor their sons and you know, how do you prevent, you know, those things from getting out of hand? So you had a unit corps that couldn't have sons and they would monitor the bureaucrats and they became a kind of, you know, watch, watchguard over the bureaucracy. But then how do you control the eunuch corps? And so you had an anti, anti, you know, unit that was meant to monitor the monitors. And so you keep piling these, you know, control mechanisms top down control mechanisms, one on top of another. And it seems to me that that is a system that eventually breaks down. And it seemed to me China was doing something similar with, you know, their anti corruption campaign that you had this broad perception that the party cadres were being very corrupt and you had to stop that. And so the way you do it is you create a, a body that's really outside of the regular party mechanism. The disciplinary, what was the name of it?
Dan Wang
Central Commission for Discipline Inspection.
Francis Fukuyama
For Discipline Inspection. And so that's like the unit core that's monitoring. But then how do you control that body? And so something.
Dan Wang
There was a body called the Central Patrol Group or something that was monitoring the ccdi.
Francis Fukuyama
Yeah, so everybody is kind of monitoring everybody else and a lot escapes notice because you can't monitor that large a society effectively, although maybe you can today. Today you know, with big data and the kind of surveillance state that China's built, I think probably top down control is more possible today than it's ever been because of technology.
Dan Wang
Tell us about someone that the press have reported is your BFF in China, who's the Grand Inquisitor, who is in charge of the Central Commission for Discipline Inspection. What your interactions like with him?
Francis Fukuyama
Well, I was invited to China ostensibly to attend a conference by a very well known Japanese economist who specialized in China and had a research center at Beidou. And he told me that, you know, Wang Qishan wanted to meet with us when we were there. So we went to, you know, the party headquarters on Lake Beiha in Beijing, kind of the inner sanctum where the top leadership met. And there was Wang Qishan. I do not understand why he wanted this meeting. It was a strange one because. Because it wasn't a conversation. He has a lot of American friends like Hank Paulson, a former Treasury Secretary. And I had been told that he'd be very curious about American politics. And he was very cosmopolitan, read a lot. He did talk about reading a lot of books. He talked about translating Tocqueville and bringing different Western books into circulation within the higher ranks of the party. But I didn't get a word in edgewise. I managed to ask him one question. I said, do you think, think that maybe someday China will try to stop corruption by having an independent judiciary that can actually look at, you know, wrongdoing within the party? He said, absolutely not. That'll never happen. The party can't give up control over itself in that, in that fashion. That was it. That was the only question I was able to ask. But when I got out, you know, somebody had obviously taped the entire interaction. There's a transcript of the whole meeting. And I don't know who did this, but obviously it was intentional because it was on the Chinese Internet for about four or five days and then taken down. And so obviously somebody wanted to broadcast the fact that I had had this, you know, had this meeting. So all my Chinese friends after I got back started all these speculations about why this meeting took place. And, you know, there's a kind of liberal interpretation that Wang Qishan wanted to show his independence and the fact that he was open minded and meeting with a, you know, a liberal intellectual from the United States. Other people thought he was actually trying to demonstrate his loyalty to Xi Jinping by not allowing a real conversation to take place. And to this day, I don't know what the answer to that is, but I Do get a very nice New Year's card from him every. Every year.
Dan Wang
That's still happening.
Francis Fukuyama
Yeah, that's still happening.
Dan Wang
Okay. Well, that is something quite worthwhile.
Francis Fukuyama
Yeah.
Dan Wang
We will never know why Wang Qishan decided to lecture to you, but the transcript was certainly produced by the Chinese side. Oh, yeah, that was him. And you could not get a word in edgewise. I. He's someone who seems to read a lot of Tocqueville and doesn't just hand out democracy in America. He hands out the ancien regime. And. Yeah. Do you feel like this is. This is kind of the designated barbarian handler within the Communist Party, where you were the barbarian and they try to give you something, or do you feel like actually, within the system, there is a lot of people reading Fukuyama and trying to understand what Fukuyama means?
Francis Fukuyama
Yeah, I don't. I don't know the answer to that. On an earlier visit to China, I went to the office in the Central Committee that handles speeches, leadership speeches, which is a really important office, because they basically control the ideological language that the party is using. And it was quite an interesting visit because you go in the lobby, there's a statue of Mao, and then they just published a new biography of Mao. So the director of this unit comes to greet me and gives me a copy of the biography. And then he says, but, you know, all of your books are in our library. And he takes me into the library and shows me Chinese translations of all of my books. And then after the meeting, after the lunch that we had, he says, you know, that he basically is the same generation as Xi Jinping. He was sent down to the countryside, and he said, you know, you'll never understand modern China if you don't understand how traumatic an experience that was. And so. So there are definitely people, you know, in the important positions in the party that really had a sense that they had a mission to liberalize the country and open it up and never allow Maoism to happen again? And one of the big mysteries to me is, how did Xi Jinping end up so you know where he is because he went through that process. Most of his colleagues that were sent down to the countryside were all in favor of a more open China. And he seems to remember that period with some nostalgia and, you know, wants to go back to it.
Dan Wang
Well, we have Joseph Turigian's excellent book, biography of Xi's Father. So that, I think, provides some really good suggestions for an answer. Have you ever spoken to Xi Jinping?
Francis Fukuyama
No. No.
Dan Wang
No.
Francis Fukuyama
Yeah. One message that did come through was that apparently Xi Jinping was not entirely pleased with the fact that Wang Shishan had met with me. I don't think I'm going to get an audience in the future, and I'm not allowed to travel there anymore any, anyhow.
Dan Wang
So let's talk a little bit about this. Why are you banned from traveling to China?
Francis Fukuyama
Well, I tried to get into Hong Kong a couple years ago, and they wouldn't give me a visa to go there. They wanted to know everything I had written about China. It's kind of funny because actually, especially the first volume of my Political Order series became a really big bestseller. And to this day, my Chinese publisher is the only international publisher that's published a collected works of me, including the End of History. And, you know, they do censor these books. And so the parts of on the Contemporary China in the second volume have all been taken out. But, you know, I have a big readership in that country, which I appreciate. And I think it comes from the fact that I appreciate China. I say this is the first country that ever invented modern bureaucracy, a modern state. You know, they did this 1800 years before any European, you know, country did this. And so it's something actually of an achievement that's been under recognized by scholars, you know, in the West. And so. So, you know, that actually has been a sort of gratifying thing. I've given, actually lecture. You know, one of the things that I thought one of the awful things about Mao, in addition to the human toll, was the fact that he suppressed Chinese knowledge of their own history because he condemned Confucianism and he did not think that there was anything worthwhile in the long cultural history of, you know, of China. And. And so people simply did not know the history of their own society. And I thought that was terrible. And I thought it was kind of ironic that, you know, me, a foreigner, you know, for certain Chinese people was a first introduction to their own history, you know, and that shouldn't have been the case. It should have been a Chinese person writing about it, but they didn't have the freedom to do that.
Dan Wang
What is pretty remarkable to me is how in spite of how many invocations so many Chinese have of historical greatness and grandeur and Qianlong Emperor this and Song Dynasty that, it is pretty remarkable how ahistorical I think modern China is. I mean, just the raw fact of so much cultural destruction throughout the Cultural Revolution, smashing beheading the Buddha and smashing so many of these historical records, smashing these sort of Houses and then the economic modernization that paved over these wonderful little alleyways which I still remember some of in the, in the early 90s before they were bulldozed, essentially. And then there is the active suppression of a lot of history in China, in addition to censored, boulderized parts of history that the Communist Party has an approved version of and doesn't want anyone to question. And so, you know, there is this sense in which there is, this is the most historically amnesiac country in the world. Maybe this is some sort of an advantage, but this is a country that so invokes history. Five thousand years, years of organized government, but they, they actually can't actually remember anything properly. Isn't that remarkable?
Francis Fukuyama
Yeah, and actually some of the really great historians of China are not Chinese. Like in Japan, you know, they did a lot of work on the, you know, different periods of dynastic history that had simply been ignored by Chinese historians. I think that's, that's too bad. And it's too bad now that I don't think you can again write honestly about Chinese history.
Dan Wang
How do you feel that China will solve the bad emperor problems after?
Francis Fukuyama
Okay, so this is the biggest, I think, defect of the current Chinese system that I think many Chinese themselves recognize, which is the bad emperor problem. We're seeing a version of that, a mini version of that in the United States. Right. That you, you designate of some, somebody to have a great deal of political power. And if they're a good emperor, they can do amazing things in a way that a liberal democracy would not be able to do. So I keep thinking of Deng Xiaoping, you know, actually changing the entire economic system from communism to some quasi market based. I mean, you couldn't have done that in a democratic society. You have that big a change just as a result of a top down decision. So you can do certain things, you know, more easily, easily. But the bad emperor problem is one that has plagued China throughout its history. That you can't guarantee that the guy at the top is actually going to have good intentions or good plans. And I don't think that there is any way of solving that problem other than by adopting a kind of liberal set of institutions. And by liberal, I mean law based and ones that distribute power. I mean the whole purpose of checks and balances is put in place to prevent a bad emperor from dominating the political system. System. We're going through a big test of whether that's working in the United States right now with Donald Trump. But I think that many societies as they've modernized have realized that if you don't distribute power to different stakeholders in the society, then you're going to have a bad emperor problem and one person is going to be able to do a tremendous damage to the society. And that as a matter of safety, you've got to have certain checks against the exercise. And I can, I guess when I think about Chinese futures, I don't really see how it's possible for China to democratize in the sense of having multiparty elections because the Chinese party is so dominant. We've had a lot of experience of countries that had one party dominance as authoritarian regimes transitioning to democracy and then not really having any kind of competitive party competition. And I just, in China would be, you know, the Communist Party has been the government. You know, there's no other group that has any experience in how to run this kind of complex system, in part
Dan Wang
due to the Communist Party clearing out any real semblance of opposition.
Francis Fukuyama
Yeah, but I can imagine a more liberal China in the sense of there being more checks on unbridled power. And that was a good thing about the Deng Xiaoping period, right. That you had like a 10 year term limit rule where the entire leadership stepped down after 10 years. That's just remarkable. There's not a single other authoritarian country that's come up with that kind of an institutionalized limitation on state power. And I thought one of the really bad signs about the direction Xi Jinping was going was when he eliminated that 10 year term limit.
Dan Wang
I'm slightly more of a revisionist on Deng Xiaoping. When Li Ray in his diaries here at Hoover called him half a Mao. I think that is the correct assessment because Deng Xiaoping also cycled through various successors. He turned against Hu Yaobang, he turned against Zhao Ziyang, and he was. Came close to turning against Jiang Zemin as well. You know, he may have his only official title, may have been the head of the Chinese Bridge association or something like that. This man loved playing bridge. But you know, was there effective power behind the scenes after people formally stepped down? Yes, there was. And, and he had all sorts of pretty autocratic methods in getting his way.
Francis Fukuyama
Didn't mean to over praise Deng Xiaoping. I'm just saying that if you want to do something like turn a centralized command economy into a market economy, you need a lot of political power. And the Chinese system concentrates power in such a way that you can do that. And there are a lot of things that we wish we could do in our democratic societies that our distributed form of government prevents. Us from doing.
Dan Wang
Okay, how do we introduce a little bit more liberalism into China in the year 2025 or beyond?
Francis Fukuyama
Well, I don't know that you can do it in the year 2025. I think it's probably going to be up to one of Xi Jinping's successors to do. You know, my perception of all of my friends who are mostly academics in China is they, they really hope for a more liberal system. And certainly among elites, you know, there Was this before 2013 that the next generation leaders would actually open the country further and instead the exact opposite happen. Unfortunately, we in the United States are not providing a good counterexample right now. And that's one of the big problems, I think, in the world is that the leading exemplar of liberal democracy is becoming less liberal and less democratic. So I don't know.
Dan Wang
A leading exemplar of liberal democracy, namely Canada.
Francis Fukuyama
Yeah, okay. Canada. Yes.
Dan Wang
I'm sorry, speaking to a Canadian, as a Canadian citizen, I have to bring that in. Although it is very strange in my view, that Canadians would voluntarily elect the IMF to govern themselves. That is very, very strange. What does liberalism look like to you in the present day? What do liberals even believe in anymore?
Francis Fukuyama
Well, I think liberals believe in limitations on state power to protect individual rights and to guarantee a certain quality of decision making so that a single person can't do something like enact a one child policy. That things have to be vetted, there has to be deliberation, has to be some ability of stakeholders within the society that are hurt by a particular policy to push back and to make arguments for different sorts of things. And so it's a very, it's a very broad definition of liberalism. I mean, ultimately what you want is a real rule of law where the state has to act in accordance with law. But you can also carry that too far. So this is the society of lawyers that you're criticizing, you know, in the United States. So there has to be law that protects against the worst depredations of state power, but still allows enough discretion and judgment in the way that elected leaders act that they can actually do things effectively.
Dan Wang
This is where I hope to push you a little bit more frank. Because when you say that liberalism means mostly a check on power. Well, you sound like Ralph Nader. Well, you sound like Ronald Reagan, don't you? So there has to be some decree of, combination of checks on government power. Power with the ability of the government to do the exercise.
Francis Fukuyama
The exercise of legitimate, democratically legitimated power. Yeah, that's very important.
Dan Wang
And when we say that we want a society of law. Yeah, I sign onto that. But then we have a lot of laws, statutes like Cequa, which are messing things up big time. And so this is where I'm, you know, part, part of the reason that I wrote my book is that, you know, we're reasoning through the world with these 19th century political science terms like liberal, conservative, conservative, capitalist, socialist. People slur you as both a neoliberal and a neoconservative in the same breath. And, you know, how can this be true? What do these things mean? And so these sports are not very stable. You know, Mimi, today I read a post from Noah Smith calling for liberal nationalism, which is how he understands FDR and the New Deal. But this is where I'm wondering, you know, these words like liberal, can they necessarily mean very much anymore anymore? Is there a scenario in which it makes more sense to jettison them and to have something that is not so freighted with that?
Francis Fukuyama
Well, yeah, a lot of Gen Z has given up on liberalism, so, yeah, we may need a new term. I just think we need to be clear on what that means. And you have to retain the core of what I mean by liberalism, regardless of what you call it.
Dan Wang
Yes, but then I think the task has to be calling it something that is sexy and that does grab people. I'm not sure if abundance quite fills that role. Yesterday I gave a book talk at Hoover in which I challenged my rabbi, Stephen Kotkin, a little bit about the future of US China relations. One of the things that Kotkin advocates for is a future of Cold War in which we have not hot war. I think that's the most important thing. And then we sort of compete on the level of the systems to see who delivers better for the people. Now that is a very attractive way for me to think about this, actually. But I think one can very legitimately object to the term of Cold War, because Cold War was not very cold for Vietnam, Afghanistan, whole bunch of other places. Right. The Biden administration tried to come up with this term managed competition, which is kind of a mouthful. I think this did not really capture things well. But rather than trying to maintain the underlying meaning and having the term, I don't think we should necessarily reason through the future with Cold War or with liberal. Let's use some better terms instead.
Francis Fukuyama
Okay, well, that can be the subject of your next book. You can devise the term and then fill out the meaning behind it.
Dan Wang
Tell us a little bit more about how you view liberal institutions Liberal democracy under Trump. Now, what is going to happen over the next three years, and crucially, in the fourth year, after Trump is constitutionally not allowed to serve his second term?
Francis Fukuyama
I will not speculate on that because you can imagine such a range of, you know, very good and very bad outcomes. And I just think at this point, it's very hard to say. I. I do think that American liberal democracy is in grave danger right now because for the first time, we have a pretty unapologetic authoritarian figure elected president, and he's doing a lot of damage to existing institutions. On the other hand, we still have some checks, the courts have some say, and we have elections. One of the big questions my mind is the midterm election next year, because Trump was willing to subvert one election in 2020, and if it looks like the Republicans are going to lose control of the House, he's perfectly capable of pushing his party to subvert the midterm election. If that doesn't happen and there's a fairly strong mandate against many of his policies and immigration tariffs, so forth, then I think, think the system, you know, there's a path through the system to correct itself. Because so much of what he's done is really crazy and makes no sense, you know, in terms of the common objectives that he claims he's trying to achieve. And that means that the system, you know, has some resources to, you know, to fix itself. But I'm not gonna. I'm not gonna bet one way or the other.
Dan Wang
Well, just want to say that when we edit this clip down to the shorts. Do you hear that, youths? Francis Fukuyama says liberal democracy is in grave danger. And so maybe we can serve that into the brain slop that all these kids are watching.
Francis Fukuyama
Good. All right, all right. So, Dan Wong, thank you very much. Great to talk to you. Thank you for listening to the Frankly Fukuyama Podcast. If you like this podcast, consider subscribing to American Purpose and my Frankly Fukuyama column at www. Persuasion. Com.
Host: Francis Fukuyama
Guest: Dan Wang (Hoover Institution Research Fellow, author of Breakneck)
Release Date: November 5, 2025
This episode explores the profound differences between China and the United States in state structure, elite formation, and approaches to economic and social organization. Francis Fukuyama is joined by Dan Wang, whose book Breakneck offers a provocative lens: China as an “engineering state” and the USA as a “lawyerly society.” They unpack how these paradigms shape everything from manufacturing and social policy to the challenges facing liberal democracy.
[00:36]
“Some part of China’s economic success is due to a literal minded engineering approach... But when it comes to social engineering, it is overwhelmingly negative.”
[03:05 – 05:51]
“Young people interested in social justice... tend to go to law school so that they can actually learn how to sue the government... They don’t want to add to the state capacity... That’s a really big change from the days of the New Deal.”
[08:35 – 09:58]
“Only about 11% of CEQA lawsuits are actually launched by an environmental group. The others... labor unions, business competitors, or NIMBY neighbors... just using this law as a way of stopping stuff they don’t like.”
[10:49 – 18:50]
“The DJI drone... 15 years ago, flew right out of the box, very easy to control. To this day there is not a US manufacturer of a sub thousand dollar consumer drone... there is something really wrong in our industrial system that can’t supply that need.”
“I was always struck... that these people are labeled as unskilled workers... and this is completely ridiculous. These people are able to do such wonders with their hands and all I’m able to do is email by typing on a keyboard.”
[25:41 – 30:36]
“It’s also a good argument against autocratic decision making... the autocrat doesn’t really have to bounce ideas off of... and doesn’t necessarily respond to criticism or setbacks.”
“Ironically it was bad cybernetics because cybernetics really has to incorporate feedback loops... There was essentially no feedback loop.”
[31:25 – 37:14]
“I managed to ask him one question... Do you think China will try to stop corruption by having an independent judiciary? He said, absolutely not. That’ll never happen... The party can’t give up control over itself in that fashion.”
[39:26 – 43:14]
“This is the most historically amnesiac country in the world... A country that so invokes history... but they actually can't remember anything properly. Isn't that remarkable?”
[43:14 – 46:49]
“Li Rui... called [Deng] ‘half a Mao.’ I think that is the correct assessment because Deng Xiaoping also cycled through various successors... was there effective power behind the scenes? Yes, there was.”
[47:14 – 50:59]
“We’re reasoning through the world with these 19th century political science terms like liberal, conservative... Are there scenarios where it makes more sense to jettison them and have something not so freighted?”
[52:10 – 54:01]
“When we edit this clip down to the shorts... Do you hear that, youths? Francis Fukuyama says liberal democracy is in grave danger.”
This episode offers a rich, comparative meditation on the nature and consequences of political systems in China and the US. Dan Wang and Francis Fukuyama discuss not only state structures and economic paradigms, but also how cultural values, political institutions, and unintended consequences have shaped the contemporary prospects for both countries. The conversation ends on a cautionary note about the fragility of liberal democracy in the face of rising authoritarian challenges—making “Why China and the United States are Different” a must-listen for anyone considering the future of global order.