Dan Wang — China, US and our Collective Future (EP.284)

Summary

Infinite Loops: Dan Wang — China, US and our Collective Future (EP.284)

Date: October 2, 2025
Host: Jim O'Shaughnessy
Guest: Dan Wang, author of Breakneck: China’s Quest to Engineer the Future, research fellow at Stanford’s Hoover History Lab

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Overview of the Episode

Jim O'Shaughnessy hosts Dan Wang for an in-depth exploration of the contrasting societal models of China and the United States, focusing on Wang’s “engineering state vs. lawyerly society” framework. Through anecdotes, historical context, and cultural critique, they dissect how these approaches shape policy, innovation, infrastructure, and human flourishing in both countries. The conversation ranges from the historical roots of each model to prescriptions for improvement, with a continuous thread questioning what it would take for the US to build optimistically and for China to embrace greater pluralism.

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Key Discussion Points & Insights

The Lawyerly Society vs. the Engineering State (02:04–15:46)

• Wang’s Framework:
  • China as the Engineering State: Sees every societal, economic, or political problem as fixable by a new megaproject (e.g., roads, subways, tech sectors). Heavily driven by leaders with engineering backgrounds.
  • The US as the Lawyerly Society: Laws and legal barriers dominate, often leading to stagnation and preventing necessary progress. Legalism is entrenched both in government and broader culture, dating back to the Founding Fathers.
    • “The issue with lawyers is that they block everything good and bad.... The US wouldn’t be so wealthy...if the lawyers weren’t around defending the rights of companies like Nvidia. But…the country works very well for the wealthy.” — Dan Wang [07:39]
  • Anecdote on Trains: Both compare current New York–Connecticut train travel to schedules a century ago, noting slower times today due to legal obstacles and lack of ambitious engineering.

The Cost of Stasis and Loss of Optimism (11:30–15:46)

• America’s past as a building society:
  • Built transcontinental railroads, skyscrapers, massive public works (Manhattan Project, Hoover Dam, Interstates, Apollo).
  • “What America has lost...is that once you have physical dynamism, people really do have a sense of optimism about the future.” — Dan Wang [13:10]
• Physical Dynamism: In China, visible change (new subways, railroads, bridges) fosters optimism, political resilience, and pride. US's inertia breeds frustration and a sense of decline.

Gilded Age Parallels and Cultural Mirrors (15:46–21:33)

• China’s current Gilded Age:
  • Entrepreneurial mania, wealth-building, some corruption—echoing the US's own Gilded Age.
  • The “Progressive” solution: Technocratic reforms (sometimes overzealous, e.g. early US eugenicists), followed robber baron era in the US; Wang hints China may need its own.
• Housing and Infrastructure Crisis:
  • Wang emphasizes America’s decades-long underbuilding—housing shortages, outdated transit, inability to respond to disasters—as symptomatic of legal paralysis.
  • “California high speed rail fails. Nobody really cares.” — Dan Wang [18:36]

The Abundance Movement and Frustration with Legal Paralysis (21:33–27:37)

• Common Good and Legal Reform:
  • Both discuss the work of lawyer/philosopher Philip Howard on America’s "ruins of an industrial society" and the “drowning” in rules and regulations.
  • Bipartisan interest in fixing things exists, but law and entrenched interests continually stall progress.
    • “It is not only an authoritarian system that is able to build pretty good mass transit. The US should study China...but doesn’t have to become China...Let’s only get to European and Japanese levels of construction.” — Dan Wang [23:25]
• Authoritarianism without “the good stuff” (e.g., effective infrastructure):
  • Wang quips on the current US political moment: "What we're getting right now is authoritarianism without the good stuff, authoritarianism without the highly functional trains that authoritarians are legendary for." [24:54]

Prescriptions for Progress: Synthesis, Pluralism & the Role of Elites (27:37–36:26)

• Need for balance:
  • Both advocate for America to adopt both openness and discipline, pluralism and engineering spirit ("Athens and Sparta," "Apollo and Dionysus").
  • “Let’s have a few more engineers, a few more scientists, a few more economists in the U.S. senate.... The world would be a lot better if the US could be say 20% more engineering.” — Dan Wang [29:05]
• Immigration & Talent:
  • O’Shaughnessy shares the bipartisan but inert consensus on “stapling a green card to every advanced STEM degree” as an example of ideas everyone agrees on but can’t implement, due to lawyerly stasis and NIMBY-ism.
    • “The yesing is not the doing.” — Jim O’Shaughnessy [33:58]
• Stuck in Debate, Not Delivery:
  • Wang: “America has this perpetual ineffectualness...anytime you want to do something, there are just so many checklists....” [38:04]

The Two Elites: Rebel Alliance vs. Death Star (39:26–45:36)

• Metaphorical framing:
  • O’Shaughnessy describes the conflict as “Rebel alliance” (pro-abundance, anti-stasis) vs. “Death Star” (entrenched lawyerly system, NIMBYs, pessimists).
• Cultural and Legal Obstacles:
  • Wang: “So long as homeowners really do have access to lawyers to block whatever they don’t like...the odds are stacked against the Rebel alliance, but then they always will be.” [41:54]

Overcoming NIMBYism & Cultural Leverage (45:36–54:51)

• Procedural Solutions:
  • Limiting standing to sue (as in Japan/Canada, with only one round of legal challenges); state-level planning to override local anti-development sentiment.
• Cultural Flywheels:
  • Prodevelopment cultural messaging: “Neighbors for more neighbors.” — Dan Wang [51:41]
  • The need to persuade Americans that new construction is life-giving and revitalizing, not a threat.

The Evolution of the American Lawyer (54:51–62:36)

• From Dealmakers to Regulators/Litigators:
  • Wang tracks how lawyers shifted from enabling growth (for the robber barons, FDR’s New Deal) to restraining it (in response to ’60s/’70s excesses).
  • Calls for a new generational mindset among legal elites to support creative, constructive outcomes, not just perfunctory obstruction.

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China: Restrictions, Diaspora, and the Precarity of Power (62:36–74:39)

• Emigration of Talent and Elite:
  • Wang describes the exodus of Chinese millionaires, creative professionals, and even ordinary citizens—a diaspora seeking more freedom and opportunity.
    • “So many Chinese who are willing to depart from the great rejuvenation that is undertaken in their name.” — Dan Wang [66:23]
  • Systemic precarity: party elites, entrepreneurs, and even average citizens have little security against unpredictable, top-down rule.
• No Pluralist Tradition:
  • China lacks the lawyerly/individual-rights tradition that exists in Europe or the US, making shifts toward pluralism difficult.

America and China: Which Has the Greater Capacity for Change? (71:50–74:39)

• If forced to bet:
  • Wang: “I bet on America.... America has, it’s own heritage to draw on with respect to having been a former engineering state...There’s robust debate...movements trying to get America back on track.” [71:50]
  • China, lacking a liberal or lawyerly tradition, is less likely to self-correct toward pluralism.
  • Yet, Wang insists, the US must deliver tangible results to out-compete China, not just claim moral or systemic superiority.

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Notable Quotes & Memorable Moments

• On Ribbon Cutting Ceremonies:

  • “Americans have lost the sense that ribbon cutting ceremonies represent something thrilling...opening up new possibilities....This is something that China has and I think this is something...we have lost.” — Dan Wang [13:16]

• On the challenge of legal inertia:

  • "The yesing is not the doing." — Jim O’Shaughnessy [33:58]
  • “America has this perpetual ineffectualness that is unable to do the sort of things that pretty much everyone wants." — Dan Wang [38:04]

• On Authoritarian Envy:

  • “What we’re getting right now is authoritarianism without the good stuff...without the highly functional trains that authoritarians are legendary for. We don’t have the public order in the streets, we don’t have the functional logistics.” — Dan Wang [24:54]

• On legal remedies:

  • “I think there has to be some way to remove the ability of people to continuously tie up projects in court.” — Dan Wang [46:34]

• Cultural interventions:

  • “Everything is downstream of culture.” — Jim O’Shaughnessy [48:38]
  • “Neighbors for more neighbors.” — Dan Wang [51:41]

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Timestamps for Important Segments

| Timestamp | Topic / Segment | |------------|--------------------------------------------------| | 02:04 | Wang introduces “engineering state” vs. “lawyerly society” framework | | 06:45 | Train anecdote: US infrastructure stasis | | 11:30 | Loss of America’s builder spirit, optimism | | 15:46 | Comparing China’s Gilded Age to US history | | 21:33 | Frustration with legal blockages and regulation | | 27:37 | Synthesis vs. separation: “and” instead of “or” | | 36:26 | The inertia of debate vs. decisive action | | 39:26 | “Rebel alliance” vs. “Death Star” metaphor | | 45:36 | Legal reforms, standing to sue, procedural fixes | | 48:38 | Culture as primary lever for change | | 54:51 | Evolution of the lawyer class in the US | | 62:36 | Emigration from China and the challenge of pluralism there | | 71:50 | Wang’s bet: US is more likely to change than China| | 80:39 | Forgotten US “builder” archetype: Hyman Rickover | | 86:04 | Wang’s most uncertain China forecast | | 88:42 | Speculative outlook: US and China 2035 | | 94:21 | “Emperor for a day” — Wang’s two inceptions |

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Closing Reflections & Prescriptions

Synthesis, Not Exclusivity

• Both agree the answer is not either/or (lawyerly or engineering, pluralism or power), but a creative combination leaning into each country’s strengths and correcting for their pathologies.

Wang’s “Two Ideas” for Humanity ([95:06])

• “Make the US slightly more engineering and China to be much more lawyerly.... That would create a thriving world in which much more of the world would be better off if these two superpowers were not increasingly deepening their own pathologies.”

Closing Recommendations

• Read Dan Wang’s Breakneck: China’s Quest to Engineer the Future for more.
• Seek to inject engineering, optimism, and action-orientation into US policymaking.
• Encourage legal and cultural reforms that value building while safeguarding rights.
• For China: aspiration toward pluralism, respect for individual flourishing.

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This episode is an essential listen for anyone interested in the intersection of technology, society, and cultural destiny, offering concrete insights into not just what divides China and the US, but also what each can learn from the other for a more abundant, pluralistic global future.

Transcript

[Jim O'Shaughnessy]

Hi, I'm Jim o' Shaughnessy and welcome to Infinite Loops. Sometimes we get caught up in what feel like infinite loops when trying to figure things out. Markets go up and down, research is presented and then refuted, and we find ourselves right back where we started. The goal of this podcast is to learn how we can reset our thinking on issues that hopefully leaves us with a better understanding as to why we think the way we think and and how we might be able to change that. To avoid going in infinite loops of thought, we hope to offer our listeners a fresh perspective on a variety of issues and look at them through a multifaceted lens, including history, philosophy, art, science, linguistics, and yes, also through quantitative analysis. And through these discussions, help you not only become a better investor, but also become a more nuanced thinker. With each episode, we hope to bring you along with us as we learn together. Thanks for joining us. Now, please enjoy this episode of Infinite Loops.

Well, hello everyone, it's Jim o' Shaughnessy with yet another Infinite Loops. I am very excited about today's guest because we're going to be asking the question, what happens when a lawyerly society confronts an engineering state? My guest today, Dan Wong, has lived the paradox as he writes about in his new bestselling book, China's Quest to Engineer the Future. Dan is a research fellow at Stanford's Hoover History Lab who spent years in Hong Kong, Beijing and Shanghai and talked with factory managers, coders and party theorists have developed this powerful framework between loyalty and engineering. Dan, welcome.

[Dan Wang]

Jim, It's a pleasure to be here.

[Jim O'Shaughnessy]

So let's start at the beginning. I love your framework. China can build, the US can block. How did we get here and explain for our listeners and viewers the broader picture of that framework?

[Dan Wang]

Well, the broader picture and the way that I arrived at this framework was, as you say, I spent a few years living in China, mostly between Beijing, Shanghai as well as Hong Kong. And the years that I was in China between 2017-2023 felt like a pretty momentous period of time. I lived through the first trade war that President Donald Trump launched, something that quickly morphed into a technology which I was studying when I was working as a technology analyst at an economic research firm. I was living through China's stunning successes in new types of technology development, including things like solar as well as electric vehicles. And I was living through part of the growing repression under top leader Xi Jinping. And a lot of what I had been thinking about was that we're using these 19th century political science terms like socialist, capitalist, autocratic, neoliberal, whatever that means, to reason through this relationship. And I thought that let's have a 21st century understanding of what these two superpowers who are sometimes friendly and more often not these days, and how they are trying to confront each other. And so that's when I, after the start of 2023, and I should say that the centerpiece of my experience living in China was to to have lived through all three years of zero Covid, which I was more or less stuck inside the country. I decided that I needed greener masters, at least for a little point, which is why I moved to a Yale Law School in New Haven, not too far north of where you are in Connecticut right now, Jim. But I was a fellow at the Yale Law School's Paltai China center, where I substantially wrote this book. So the way that I'd thought, thought of China is as an engineering state, which is a country that treats building another megaproject as the solution to all of its problems. So whenever China's economy trembles, the Central Committee, the Politburo, the State Council, will announce the big new project to build a new spate of roads or bridges or hyperscalers or coal plants or homes throughout the country. They are also fundamentally social engineers, people who treat the society and people as yet another megaproject, as yet another building material to be torn down and remolded as they wish. And they are also economic engineers, people who are willing to push people out of Wall Street, China's financial system, as well as its tech sector, in order to make kids work in semiconductors or aviation or more strategic industries instead. And a lot of this is driven by the fact that at various points in recent history, most of China's top leaders online, members of the Standing Committee of the Politburo, had degrees in engineering then. I contrast that with the United States, which I call the Lawyerly Society, because it seems like all the presidents have to go to Yale Law School. If you take a Look at the U.S. senate right now, there are 47 U.S. senators who have law degrees. One of them studied anything resembling STEM. Among the founding fathers, most of them were lawyers. First 16 presidents all the way from Washington to Lincoln, 13 of them were lawyers. The issue with lawyers is that they block everything good and bad. So you don't have stupid ideas like the one child policy. You also don't have functional infrastructure anywhere. Make just one more quick point about Connecticut, since you and I are both quite familiar with the state. When I was in New Haven, I confess I was sometimes seduced by the pleasures of New York City. And so I would take the Metro north train down to Grand Central in New York. And the train is good. It takes about two hours to get from New Haven to New York. It is a bit of a slow train, but it is a steady and reliable train. And I was quite satisfied with it until one day I came across a timetable from 1914, which I found that the trains about 100 years ago were slightly faster getting between Grand Central and New Haven than they are today. And I think that it's not quite an apples to apples comparison because the trains make many more stops now, including Greenwich, when it didn't in the past. But at a first approximation, we're moving slower than 100 years ago, and this is not the direction that I want things to be moving.

[Jim O'Shaughnessy]

I literally just gave that example last week when having a conversation with a friend and because I discovered an even earlier train schedule and I was shocked in very much the same way you are. And then I looked at pictures of the trains back then, their interiors, they were much, much nicer, much more comfortable. The services provided on the train or that less period of time 100 years ago were better.

[Dan Wang]

And.

[Jim O'Shaughnessy]

And can we lay all of that at the feet of our lawyers? There are so many lawyer jokes, right? I'm reminded of, I think it was Abe Lincoln who said, one lawyer in a town will starve. Two lawyers can make a good living. Is that really kind of foundationally why we are seeing this in America?

[Dan Wang]

No, I think that we cannot pin all of America's problems on the lawyers. There's plenty of blame to go around. I think that if we're thinking about the Metro north trains in particular, I would say that the mechanism of the lawyers hurting things has been that a lot of homeowners around Connecticut have put up their hands to say, well, we don't like a rail line in our backyard. And by repeatedly emphasizing this, they managed to sue Amtrak and the other rail authorities to take slightly more suku at its roots, such that we're adding about 25 minutes into the train schedule, even for the high speed trains. I think that is a feature of the lawyerly society in which individual homeowners are able to put up their hands, hire some superbly well paid lawyers, and then do things that I would say defensibly subvert the public interest in some big way. I would also lay some blame upon America's mass transit agencies. A lot of the mass transit agencies, including the mta, have outsourced a lot of their engineering expertise out to contractors such that, you know, there aren't even that many engineering experts working inside these agencies. A lot of it is coordinating work with outside contractors as well. And I think that there is also some blame to go around for the society, not so much necessarily valuing a lot of these mass transits. America likes to drive, and there's no way around that problem. But I think the fundamental issue, I think with the lawyerly society, if we accept that lawyers are to some extent a cause of the problem, I think the fundamental problem is that lawyers are for very large part handmaidens of the rich. They're very good at defending. Well, part of that is positive. The US wouldn't be so wealthy, wouldn't have created so much, so many companies worth trillions of dollars if the lawyers weren't around defending the rights of companies like Nvidia. But I think the problem with America today, one of the many problems, is that the country works very well for the wealthy. You know, the wealthy in New York don't have to deal with affordable housing problems. They buy these skinny skyscrapers in the middle of Manhattan. They don't take the subway to work. They have much more comfortable options to get to work. And I think what I would like is for the lawyers to step out of the way a little bit such that we are able to build mass transit for the many. We are able to build homes for the many, that we are able to build all sorts of projects that people desperately need, and it is not a few individual homeowners that are able to prevent this construction.

[Jim O'Shaughnessy]

Yeah, I think that that is an incredibly valid point.

[Dan Wang]

Point.

[Jim O'Shaughnessy]

You know, the merit, which is the other way to get up to New Haven actually bends out around Greenwich. And I always wondered why that happened. And so I started digging into it, and it turned out if it went straight, it would have went straight through a Rockefeller estate. And that's why it doesn't go straight. And so there's this constant tension. Yeah, but in my opinion, between, as you say, the wealthy who have access to lawyers can pretty much paper anything to death versus, like, progress versus not sitting in stasis. Do you think another byproduct of this is just the fact that we lose that knowledge and maybe that urge to be a little more accommodating to an engineer's mindset?

[Dan Wang]

Yeah, I think an urge is a good way to think about this, because I think that the United States wasn't always like this in not being able to get anything done. I think that the US used to be an engineering state itself for about 100 years, 150 years in between the middle of the 19th century to the middle of the 20th century, in which in the earlier times, the US built a train system that knit the coasts. There were skyscrapers in Manhattan, Chicago, there were canal systems. And then in the 20th century, the US built big projects like the Hoover Dam, as well as the Manhattan Project and interstate highway system and the Apollo missions. And in the earlier days of New York, I think there were, you know, it used to be common for mayors and governors to go to these ribbon cutting ceremonies and to open up a big new bridge, to open up a big news set of subway stations. New York opened a whole string of subway stations in the year 1925, about 100 years ago now, and also, I think, another big state in 1905. So it's been quite a. Subways are not exactly a new technology, even though our trains and even though our tunnels seem to not have been so substantially updated since that time. And I think what America has very substantially lost, and this is something I observed pretty extensively in China, is that once you have physical dynamism, people really do have a sense of optimism about the future. If you see that your city around you, as many people do in China, did not have a subway system in the past, now you have a thriving subway system system. If it did not have a high speed rail system in the past, now it has high speed rail. If it didn't have roads and bridges, if it did not have parks, these are all things that China is building in abundance. And it really gives people a sense that their country is growing better and better. And there are still things like ribbon cutting ceremonies. And I think that, you know, Americans have lost the sense that ribbon cutting ceremonies represent something through drilling, the opening up of new possibilities where you didn't previously expected. And this is something that China has. And I think this is something, you know, building a new subway system isn't just only a measure of, you know, some sort of economic stimulus for all of the builders involved in the project. I think that the Communist party has also built, to some extent, political resilience through these bridges and subways, because people feel a little bit better, better about being in a society that is visibly changing and visibly improving year by year, rather than a country that is moving more and more slowly, as folks do in Connecticut.

[Jim O'Shaughnessy]

And how much of this do you think is a sequencing problem? It's a bit like the argument that we got leapfrog in the United States with cellular technology, cell Phones, et cetera. Because a long time ago we built a pretty antifragile landline system. And we were like, ah, yeah, that's great. We've got this great system. Meanwhile, we got out, competed out, installed on the cellular front. I remember going to various places in Asia and Europe and being kind of marveling at the fact that my phone worked vastly better over there because they had far more stations, et cetera. We built the subways a long time while we were still a building society. Right. And then it's the shrug. I'm very taken by your idea of the ribbon cutting, demonstrating, physically demonstrating progress to the citizenry. Another one of your themes that I really like is the whole China and America are mirrors of one another. Sort of crass materialism, hustlers, pragmatic, get it done attitude in both cultures. In what specific ways does contemporary China rhyme with America's Gilded Age? And where does that rhyme break down, become dissonant?

[Dan Wang]

I think it is very defensible to say that China might be in a Gilded Age of its own, in which you had a lot of robber baron types who were building like maniacs and running roughshod over a lot of people. You had plenty of corruption in both systems. And China has mostly substantially limited a lot of the most obvious cases of corruption. But it was also a time of building tremendous wealth among very hungry entrepreneurs. What came after the robber baron age? What came after the Gilded Age? Well, the progressives in the United States took over. People who wanted to bring about some sort of better civil service, people who wanted to bring about some less of an element of corruption, people who are very interested in governing society technocratically. And actually, there is a more direct rhyme in which the early Progressive era folks in the United States considered themselves to be social engineers, and they were also prominent eugenicists as well. And that is something that I think rhymes very slightly with parts of the engineering state in China today. And I think that I agree that for very large part, the US has not so much needed a lot of infrastructure for quite a while that people were able to afford shrug with some of its problems because the country felt like it was relatively well built out. But I think the longer that the United States has failed to build, and I think that it has been going on decades now for the US to have not built, I think it is less and less of a tenable position that the country could get away with not building substantial amounts of projects, because right now it is really obvious that we have a housing shortage in a lot of the richest parts of the country, especially in a lot of big cities like New York, Boston, San Francisco, Los Angeles. When big parts of Los Angeles burned down just earlier this year, there has not been a vigorous building effort back, in part because homeowners as well as city council has blocked a lot of redevelopment efforts. I think the country desperately needs new housing. I think we need a lot more mass transit. It does not make sense that we are relying on subway systems that were mostly built out over 100 years ago. The New York subway, which I take all the time, is screechingly loud. And the system does not work all of that well relative to other subway systems in Asia or Europe. And we need to build a lot more infrastructure, to say nothing of the vast solar, wind and transmission deployment that we need to decarbonize our economy. And I think that it is insufficient to greet a lot of these failures with a shrug. And I think that I think a lot about the California high speed rail project. I'm a fellow at the Hoover Institution. We think a lot about California high speed rail over there. Where is our California high speed rail line that was promised by referendum in 2008 to connect Los Angeles as well as San Francisco? And right now, how many people have ridden California high speed rail? The number is zero because the first stretch is supposed to be open between 2030-2033 connecting two minor points, Merced and Bakersfield. And so the voters have actually delivered this state of affairs only a shrug. And I find that quite odd that California high speed rail fails. Nobody really cares. We have all these insane cost overruns with New York subway or a bus stop in Los Angeles or the $1.3 million toilet in San Francisco. People kind of greet it with a shrug and move on. And I say that's not good enough. Let's be a little bit like the Progressive era politicians who did try to deliver a more effective, efficient government that did try to hold government accountable to many of its promises. And I say let's get back to having some ribbon cutting ceremonies once more.

[Jim O'Shaughnessy]

Yeah, the Progressive sans the Eugenetics, right? Because the social engineering is, you know, I'm very difficult to pigeonhole politically. I guess the closest definition would be that I'm fiercely anti authoritarian. But by the same token, as I'm listening to you, you sound incredibly erudite and are making very straightforward suggestions that I would very much support. I don't know if you're familiar with the work of my friend Philip Howard. I'm a trustee on a board called Common Good. Philip has been writing book after book after book about the fact that we are drowning in rules and regulations that essentially paralyze us. And I think one of your terms was that America is living amid the ruins of an industrial society. And I've been on the board at Common Good for more than a decade. And I'm very frustrated by the fact that as compelling as Philip's arguments are, as compelling as your arguments are, we nevertheless find ourselves in this mired in this stasis. If you were given the shot to go convince a mayor somewhere or a governor somewhere to make this a campaign platform and actually come through and deliver on it, what would the advice be? What would that program look like?

[Dan Wang]

Yeah, well, I think the challenge with America is that the mayors and the governors, as best as I can tell, have not spoken to a high number of them. But the mayors and the governors are just as frustrated as I am that critical things that people need do not get built. Two weeks ago I was speaking at the Abundance conference in Washington D.C. where there's a lot of people very motivated by these same concerns. And there was, to the abundance movement's credit, big bipartisan numbers of both Democrats as well as Republicans coming over. And many of them were local government officials who were saying that we want to build more homes, we want to build better mass transit. And they were mostly unable to do so. I think the tragedy of a lot of this is that the rules are in place, the culture is in place, entrenched homeowners are in place who are able to put their hands and in a thousand and one small ways frustrate the wills of the mayors as well as the governors in order to actually build anything. And this is why I am pretty deliberate deliberate in saying that the problems are of America are the problems of the lawyerly society. It is the problems are you and me and everyone else who object to some aspect of change or development that might hurt any individual. But you know, they also don't find compelling this argument that on average over the longer run, we have greater benefits if we have some element of change. I absolutely want to sign on to your agenda to be against authoritarianism. I left an authoritarian country and here in the US And I'm very glad for that. The challenge, I think, is that I would say that, you know, it is not only an authoritarian system that is able to build pretty good mass transit. What I'm always saying is that the US should study China because the US should study a lot of best practices around the world, but the US doesn't have to become China. The US doesn't have to emulate China. The US does not have to copy China. Let's only get to European and Japanese levels of construction. The data coming out of Paris and Madrid and Tokyo are that these cities are able to build subway Systems at about 18 or 1/9 the levels of New York City. And arguably, you know, it is much more difficult to dig a tunnel in Paris or Madrid because there's just much more archaeology involved in these places than New York City. And so these countries are also not really known for trampling on the rights of its people. So let's just get we don't have to be China levels here. Let's just get to Paris, Madrid, Tokyo levels of construction. And the other point I'll say about authoritarianism is that I think one of the great tragedies of the past few months we're recording in September of the past eight months, is that every time I take a look at the White House right now, Donald Trump seems to be shooting admiring glances at authoritarians around the world. He's always talking about what a great head of hair his buddy Xi Jinping has. And I find that certainly pretty bizarre. But there's increasing convergence between Trump and Xi. I think that Trump and Xi are visiting misfortune upon the downtrodden. Trump has made now intel in state owned enterprise with American characteristics. There's a lack of data probity inside the Trump administration now. And what we're getting right now is authoritarianism without the good stuff, authoritarianism without the highly functional trains that authoritarians are legendary for. We don't have the public order in the streets, we don't have the functional logistics. And so right now it's kind of authoritarianism with a lot of bizarre characteristics. But I would wish that we had, say, better trains and infrastructure.

[Jim O'Shaughnessy]

As would I, and I love it. Authoritarianism without any of the good stuff. They always said, even though it was incorrect, they always said, well, at least Mussolini made the trains run on time, which he didn't. But it was a great analogy. My personal view on this is that I often frame things as people are going either or instead of and. Right. So I'm kind of a. We need both Athens and Sparta, right? We need open inquiry, civic flourishing, but discipline and capability. We need Apollo and Dionysus, right? Form and clarity, energy and information. These are enduring tensions. And as you note, our form of government was kind of designed to muck up the works, the separation of powers and everything else. What prescriptions would you offer for getting us to the point where we don't have to be authoritarian at all. What are the prescriptions that you would give to, hey, here's how we can achieve these goals and stop letting the common public areas just disintegrate into shabby versions of what they used to look like. Again, Grand Central, that used to be like when still, whenever I go into Grand Central, it's an incredibly beautiful place. Look at all the Carnegie Libraries around the country. They're gorgeous. What is the catalyst to get. And I think that there's a movement afoot. I'm kind of part of one that, that is really gunning for. Come on, let's, let's return to fixing what we got, building what we need, etc. But what would your prescription be?

[Dan Wang]

First, I want to sign on to your idea of synthesis that we don't have to always be choosing or let's choose. And I strongly believe that part of the reason I moved from China to the US was because I craved pluralism. China does not have much of a measure of pluralism. What China has is one official voice that is meant to speak above the register of absolutely everyone else. And I think that the US does embody very significant aspects of pluralism. And I would like for there to be, frankly, a little bit more pluralism in the American state, because right now it seems like the American government is made up of the lawyers, by the lawyers and for the lawyers. Again, I think that it is pretty striking that the US Senate is mostly lawyers. Yes, we should have some lawyers among them because they're a legislative body. But let's also have a few more engineers, let's have a few more scientists, let's have a few more dentists. I don't even mind a few more dentists in the U.S. senate. That's totally fine with me. I want to have a few more economists in there as well. But it does not make sense to me that so much of America's elite government class is extremely lawyerly. And so as a first cut, I would like to say let's have a few more economists and engineers within the government. I would like for many, for fewer of the most ambitious kids who are coming out of American colleges to default to going to the Yale Law School or the Harvard Law School or any of these big law schools. There's other ways to get into public service. Rather than studying at very prestigious law schools, I would like for there to be more people from Silicon Valley also entering government as well. And so my message on this is that I think that the world would be a lot better if the US could be say 20% more engineering. We do not need to return to the Robert Moses years. We do not need to be like the Chinese. Let's just have a little bit of reasonably priced construction, those things that we desperately need. That's, that's my simple message. And I would love for China to become 50% more lawyerly because I think that everyone around the world, especially many Chinese would feel would have enjoy much more flourishing if they lived with a state that actually respected individual rights. They think that Chinese are creative, they are funny, they're marvelous in all sorts of ways, and they are facing an overbearing government that is uninterested in letting them give full play to their own talents. And I think I am slightly more optimistic about the United States than I am about to turn more engineering than I am about China turning more lawyerly in part because I think there are various movements bubbling up. Abundance conference in D.C. two weeks ago felt the dynamic had a lot of good energy. People are laughing. We contrasted ourselves with the Scarcity Conference which just took place in dc, which otherwise known as the National Conservative Conference. But I think there are good movements. I think that Philip Howard is doing really important work. But Jim, which movement are you pressing to help us get a little bit better at government?

[Jim O'Shaughnessy]

My movement, as I mentioned, I'm on the board of Common Good. I lean very heavily toward the let's build but let's keep the rule of law, let's keep our pluralistic society. And I worry with a lot of the new innovations that I'm fully taking advantage of that, that becomes kind of a cognitive chasm if we, if we keep them in the hands of only elites, whatever country we're talking about. Okay. And you know, I, I, AI, for example, I think is a innovation right at the level of Gutenberg. And I would hate to see a centralized Panopticon controlled by a few take over the, that incredibly important and powerful technology. One of the reasons I support open source AI, I'm not opposed to others having closed source as long as there is a continuum and as long as the open source gives users the ability to maybe train the model on different data, for example, you know, the large language models we have right now have been trained mostly on the pile, which everybody knows. My immediate thing when I hear pile, I fill in shit. Pile of shit. And one of our projects here at o' Shaughnessy Ventures is to train it on some of the earlier American writings and European the can do attitude that you're advocating for a lot of people in this country are very unaware of, of the fact that as you pointed out earlier in our conversation, America was one of the greatest engineering countries in the world for a long period of time. And if you go back and you look at the writing of that era, not just about engineering, but about life, about all of those types of things. William James, for example, we're converting a lot of his non digitized writings into digital format so that we can fine tune models on it as long as the continuum. And we're back to that. I don't want either or I want and I want the ability for people to see their great ideas through, to have the ability to allow for a plurality. I'm very big on cognitive diversity. I think some of our movements here in the country kind of went down the wrong path. Diversity by color or sexual or whatever. Whereas to me, cognitive diversity is the king of what you want to be diverse in. And I advocate simple things like anytime we give an advanced STEM degree or my goodness, let's say advanced degree in any of those disciplines, we should staple a green card to is bizarre to me that even with all of our dirty laundry, even with all of the things that are not right in this country, people like you, some of the smartest people in the world still want to live and work here. And my attitude is we should let them. And what's really interesting is I used to do a lot of media when I was in asset management and I found myself in two different green rooms during the same week. This is about 15 or 20 years ago, whenever Hillary Clinton was Secretary of State. And so first green room I was in was Bloomberg's and there she was. So I went over and I'd better before and I said, I have one question for you, like why don't we staple a green card? And her reply to me was interesting. It was like, oh, I'm, I'm absolutely in favor of that. And then a week later I'm in a green room at CNBC and the speaker of the House is there, Paul Johnson, I believe it was at the time time asked him exactly the same question. He goes, oh, I'm entirely in favor of it. And it just made kind of my blood boil. The yesing is not the doing. And so I do believe that there are a lot of pretty simple things that maybe a majority of people in this country would say, yeah, that's probably a good idea that just are getting killed dead in their tracks for reasons that are either lawyerly or in Some way NIMBY trying to prevent or trying to retain. No, this is mine. Like Rockefeller, you can't build that highway through my property. And it frustrates me that I've been at this and supporting these kinds of initiatives for a long time and you know, they creep along at a petty pace.

[Dan Wang]

Yeah, well, I think the, this is, I think you put your finger on one of my core frustrations that I've realized over the last few months, really, which is that the, you know, when I wanted to get pluralism and debate in the United States, let me tell you, I got it in spades, Jim. I think that the boy did I get all of the debate that I want. And all of this is important. And it makes me optimistic that the conversations that I am part of as a result of this book right now, as a result of being tied up with some of the abundance folks, as a result of being at the Hoover Institution, there is tremendous energy and debate in trying to improve the country and make it much better. And that is all really good, but the problem is that America has this perpetual ineffectualness that is unable really to do the sort of things that pretty much everyone wants. Hillary Clinton was a Democrat or is a Democrat and former speaker of the House, Paul Ryan was a. Thank you.

[Jim O'Shaughnessy]

Paul Ryan. Yeah, I got his name wrong.

[Dan Wang]

If Democrats and Republicans agree on, you know, stapling a green card to a diploma, I think that, you know, you know, if anything we are further away from that paradigm because the present administration is not very thrilled about that sort of idea. And you know, this is also one of these things where, know, I'm thinking about something like the defense industrial complex. Let's say the US shipped a lot of munitions to Ukraine and its self defense against Russia, rightfully so. But the US hasn't been able to rebuild a lot of its stockpiles because it can't get production up. It hasn't been able to build a lot of drones. Every class of US naval ships has been behind schedule for 18 months to 5 years according to the Government Accountability Office. And you know, these are only critical national security goods that our defense industrial base is unable to produce in sufficient quantity. And so, you know, this is, this is what I'm always very puzzled by in America. A lot of good energy, a lot of good debate. But you know, there's 1,001 little tugs that help to dissipate the energy of a movement such that nobody ever feels like they have the ability or the power to get anything done. Because anytime you want to do something. There are just so many checklists that you have to go through in order to prepare yourself for a future lawsuit. And I think this is the sort of thing that I would really like for the US to get a lot better at, to actually do the things that it wants to do.

[Jim O'Shaughnessy]

Yeah. My spidey sense is telling me that we're probably in the beginning innings of a, I guess you could call it, battle of elites themselves. And I sort of, just for fun, say that on the one hand, there's the Rebel alliance, which I tend to identify with, and then there's the Death Star. And the Death Star is very lawyerly. It has a million ways to stop you in your tracks. It is, in my opinion, pessimistic in its very nature. And it is. I don't want to get too dramatic here, but stasis is death, in my opinion. Movement is life. And to be on the side of stasis and mucking up the gears just seems to me to be incredibly misguided. I always try to take any argument that I'm really opposed to, and large language models have been very helpful here. Create a steel man that supports that argument. And I must say, like, you know, that it's very helpful in coming up with all sorts of things I might have missed. But, I mean, does that resonate with you? This sort of. There is this fight that is going on right now, maybe early innings, but, like, where this group of elites in what I call the Rebel alliance is like, okay, negotiations are pretty much over. We might be fighting for, you know, kind of the ultimate control here. Does. Does that resonate with you at all?

[Dan Wang]

Yeah. I mean, first image that you're introducing to me is, let's take a look at the Yale Law School alumni list and see if Darth Vader is among them. Quite possibly, yes. Huh. I would love for. I think that the challenge with. With the Rebel movement, with the Rebel alliance movement, is that the challenge is that I think that the, you know, maybe that Death Star is kind of the right image because it is really difficult for even some really motivated rebels to take many swipes at this Death Star because it's just so big and it's just so entrenched and there are still a million ways or, you know, entrenched homeowners to put up their hands and say, no way. So. So I think fundamentally what we have in the United States is a culture where people feel like there is enough of a degrowth, anti development mindset as well as a not in my backyard mindset that, you know, many people would like to have more homeless shelters, but nobody wants to have the homeless shelter in their neighborhood or in their street or in their district. And so I think so long as that attitude of being against development is there, so long as the, you know, it is true that America is very bad at building a lot of things, and people don't want to put up with the scaffolding and the noise and the extensive construction that is involved in lengthy construction processes, in part because lawyers make it so. And so long as homeowners really do have access to the lawyers to block whatever they don't like, whether that is, you know, a highway through a Rockefeller property or something like, you know, wind turbines off the coast of Nantucket, so long as people have access to these sort of things, I think the odds are stacked against the rebel alliance, but then they always will be. So I think that the rebels should not lose heart and should still try to figure out how to. How to get the. Get stuff done in the way. That's because we need a lot of these things.

[Jim O'Shaughnessy]

So my thesis is, you know, the Soviet Union looked like a big, bad Death Star too. And it looked like there was no way you could ever, ever dislodge their control over Eastern Europe, over society, et cetera. But if you looked at the underlying structure of what and built, what the edifice was built upon, it was beginning to rot, terminally rot, in the kind of the mid-1980s. And maybe it's just that I, and I in no way want to be Panglossian, but I think we're seeing some rot in the Death Star right now and at least some hesitancy. And as an example there, I would say that there are these growing abundance conferences. There are these much less consequential but important symbolically. I don't know if you're following the fellow who is building statues again.

[Dan Wang]

A little bit. Yes.

[Jim O'Shaughnessy]

Yeah. So I think we might have contributed. Well, we did. We did contribute to one of his efforts. And that's at least in my experience. I'm seeing a lot of activity on the ground that was really absent, say, 10 or 15 years ago. It's always tempting to try to simplify and say, yeah, then if we get this, this and this, that will happen. I don't want to do that because I think this is an ongoing thing. As you note, as long as homeowners are NIMBY and they say no way, my next question would be, then, okay, let's assume, let's stipulate they're not going to change. Homeowners are not going to change. What is what procedural, what lawyerly way could you make that change where they couldn't block it?

[Dan Wang]

Yeah, well, I think that is a good question. And I think this is where things get sort of thorny because event it often involves doing things like removing a rich person standing to sue. And I think that is something that plenty of rich people have objections over.

[Jim O'Shaughnessy]

I might object to that one.

[Dan Wang]

Yes, yes, indeed. I think, you know, the way, the way that I think the, the thing to always keep in mind is that it is impossible to build almost anything without upsetting someone. There are homeowners who have objected to an expansion of the UC Berkeley building up a dormitory and they used environmental laws to say UC Berkeley did not sufficiently study the idea of students constituting noise pollution as such. And to use environmental laws to block something like that feels quite perversely. And so I would like to see some changes in the law, I would like to see some changes in the culture where people recognize that we need some important pieces of infrastructure and there's no way to build anything without upsetting someone, some little person who objects to his or her light being slightly reduced or noise being slightly increased. And I think there has to be some way to remove the ability of people to continuously tie up projects in court. So if we take a look at some other democratic countries like Canada as well as Japan, there are authorities that have stepped in to say, okay, maybe you have one round of objections possible to block this project, but then after that you can't keep tying up a transit project and lawsuits. A lot of the environmental determinations in Japan are made by the Ministry of Environmental Protection. Once it's made its determination by mostly bureaucrats who listen to public input, their decisions cannot be challenged afterwards in court. And so, I mean, it is going to be a difficult pill to swallow to remove people's ability to sue. But I think there has to be some statute of limitations to prevent rich people from tying things up endlessly in lawsuits. And I think there has to be a little bit more recognition that infrastructure homes is a little bit more central. And so I would like for there to be more cultural change as well. And the way that some American states have done this was that is that it has elevated planning authorities beyond the local city level, which tends to be dominated by NIMBYs. It has elevated that more to the state level, which is a little bit more development friendly because states need tax revenues and cities want to keep their own neighborhoods unchanging. And so there's various ways to tweak some of these, but I think there's no way to do everything that we need to do through the status quo.

[Jim O'Shaughnessy]

You said something that reminded me of a thesis that I've been exploring, which is very simple. Everything is downstream of culture. And so, you know, if that thesis is correct, and I'm not asserting that it is 100% correct, but if that thesis is correct, then you would want to be operating at the cultural level, at least as one of your attack vectors. And again, back to my buddy Philip Howard. He suggested that one way around this, a very lawyerly suggestion, by the way, because Philip himself is a lawyer.

[Dan Wang]

Was.

[Jim O'Shaughnessy]

Why don't we experiment with specialized courts? And the argument that I discussed with him was medical courts, you know, because we also have a big problem of people suing doctors and care providers endlessly, which adds to the malpractice premiums. And it's just, it's. People forget that things can compound negatively too, but then also maybe establish that type of court for building projects, or like you mentioned in Japan, there's that final authority. And once they have ruled, that's it, you're done, you move on. What kind of effort do you think would it take at the. If we were. If we were agreeing that at least for the sake of this argument, that we would be better off trying to impact the ability to get those things at the cultural level, what would you advocate?

[Dan Wang]

I think there would be some sort of a program to really give people a sense that there should be more homes. I think that is an obvious one. And what are the benefits of having new homes? That's part of the problem of America right now. Are concentrated benefits and diffused costs, or concentrated costs and diffused benefits in which homeowners don't really appreciate that, oh, if we have a few new homes, they see a lot of temporary costs, namely noise construction, new sewage lines, and all that rest, but they don't necessarily appreciate how their community, communities could get a lot better if it were not frozen in ember. That development, to some extent feels good. Having new transit options feels good. Having new parks and having a more robust tax base in your community also feels good in all sorts of important ways. And so I think there has to be an element of persuasion going on in order to try to convince people that development is good. And then you should hopefully expect a bit of a flywheel impact to kick in, in which people, and you do see these in certain communities in the US which do grow places, especially like American South Texas, where people do feel good about new construction around them and new neighbors and new life around them and revitalizations of their communities that they haven't seen before. And so I think that the important part of culture to transform is to make people be a little bit more pro people again. That's how I would put it. I spend most of my time living in Ann Arbor. My wife is a professor at the University of Michigan. And Ann Arbor for a while has been a pretty nimby town. It's pretty anti development held up by a lot of aging hippies who want nothing to change. And you know, I like this little slogan that I've seen at least over there. I'm not sure if it is wider than Ann Arbor, but neighbors for more neighbors. You know, I think that is a very positive message that is inspires people about some level of development, that neighborhoods aren't simply aging and that there is a little bit more new life. That's the sort of messaging that I would like to see.

[Jim O'Shaughnessy]

You know, o' Shaughnessy Ventures gives fellowships and grants to people who we think are doing and working on interesting things. And this year we gave one to a person who's doing exactly what we're describing here. But in Japan, they are going in and they are taking dilapidated housing and rebuilding it, reimagining it, making it more beautiful and sort of the effort there is kind of exactly what you were just suggesting. I'm more action oriented in terms of I think if I could find somebody here in the United States who submitted a very similar application as the one that we got from Japan, I would fund that. And I think that you've got to. Jung has that great line, you are not what you say, you are what you do. And we can talk, talk, talk about things endlessly, but if nothing's happening, if no actions are taking, if you don't have that new housing built, if you don't. Right. It's just that actually probably leads to more despair, like, oh my God, we can yap, yap, yap, yap yap. But if we don't take take real action, nothing's going to ever change. And I wonder whether a project, I wonder if you could get a project through more at the state level or even the local level where it's outside of government, where you take philanthropists and you get together a fund and that fund works with the mayor or the governor or whatever to do more building to put up the housing for the homeless that you were talking about. Is that destined too to get Lawyered out of the way?

[Dan Wang]

Well, I'm afraid so. I'm afraid so, Jim. The lawyers are going to gum it up once more. And I think what we will need is for the lawyers themselves to shift in character. I mean, the first and most important thing is that I think for a lot of listeners. So this podcast right now, Jim has already declared what sort of fellow he would like to have solicit him. So we know it will get funded, everyone. So send in your pitches. And I think what I would like to see is a culture, cultural shift not just within the broader American public, but also a cultural shift within the lawyers themselves. You know, 100 years ago, Jim, a lot of the lawyers were Wall street types. They were dealmaker types. They were working on behalf of some of the robber barons, were building their railways, they were raising bonds for the robber barons, and they were using eminent domain to turf homeowners out of their land. Some of that is negative, but that was a lot of what the lawyers were doing. And even throughout the Second World War, Franklin D. Roosevelt stacked his cabinet with lawyers. And lawyers were the people who carried out many parts of the New Deal as well. But that was in part because lawyers used to be creative deal making types of. And right now what we have is a remnant of the 1960s in which lawyers followed the lead of someone like Ralph Nader, who I think is responsible for a substantial part of the lawyerly society in which lawyers, for excellent, excellent reasons, decided to turn against development because Robert Moses have been ramming highways through their neighborhoods. People were exhausted about them, technocrats in charge of the Vietnam War. People were upset with the Department of Agriculture spraying DDT as well as pesticides throughout the entire country. And then the lawyers decided to shift away from being deal makers into more regulators as well as litigators. And that was exactly what the United States needed in the 1960s to confront the problems then. But I think we in the 2020s are confronting a new set of. Of problems such that we don't have to be still so obsessed with all of the problems of the 1960s. We don't need to keep fixing all of these old problems that have pretty substantially been fixed. And I think what we need is for I think America will always be a lawyerly society as it has been since its very founding, as I established. But we can maybe get the public to demand new things, and we can maybe hope that the elite law schools like Yale and Harvard and Chicago and whatever, that will start training people to recognize that the law has gotten in the way of a lot of things that people desperately need. And maybe the law can be jujitsu in a way to shift in order to deliver things rather than purely abstract things.

[Jim O'Shaughnessy]

And that's a wonderful point in that the pendulum always is swinging and it often swings too far. I think, by the way, that you are absolutely right that back in the 60s our rivers were horribly polluted, our air was horribly polluted and those changes were necessary at that time. But then to get that mental framework institutionalized, it's one of the reasons why another thing that I support, where I got the idea from the common good folks was why don't we just build sunsets into every regulation and law that we promulgate. A ten year sunset. It doesn't mean they can't renew that law. It just means that unless there's a huge effort made to renew that law, it sunsets out of existence. Right? Because we, you can't. And I see this very much in business as well, right? Like we have a publishing company and I owe a lot of my success to publishing four books with the traditional publishers. I think they're great at what they do, but I think that a lot of their procedures and processes and everything else are stuck in best practices circa 1925 as opposed to 2025. And I saw an arbitrage opportunity there, right? Like, well, if, if they're not going to change, I can start a publishing company that uses all these new technologies and innovations that writers are going to love. The company's run by writers, right. My CEO Jimmy Sony is a well known author, excellent author indeed, and, and advocate for, for the authors. And it seems to me that this isn't just a problem at the governmental level. By that I mean that you have these entrenched systems everywhere and they're getting old and they're getting long in the tooth. And my view is, at least on the business side, market forces are a hell of a drug. And if you don't like the way that the traditionalists are doing it in this country, you can start your own company and take your chances. Now, 90% of startups fail, but I'm okay with those odds. Is there any way to bring that to the far less innovative governmental structure?

[Dan Wang]

Yeah, I would like to hope so. But then now we are really wading into the den of lawyers, the that it is really. This is where lawyers really rule. And you know, I have been a fan of various initiatives run by folks like Jen Palka of the US Digital Service, which has, you know, been for better or for Worse, taken over by Elon Musk's Doge. And, you know, for the most part, I would say that you can point to some successes here and there, but for the most part, you know, the US Digital Service as well as Doge have not been able to really cut down the thicket of rules that are really, you know, governing a lot of these crucial processes that, that startups and businesses should be afraid very rationally to not get wrong. Otherwise you will have broken laws, and you don't want to do that. And so we have to fix our laws. We have to apply some degree of regulatory reform that isn't quite like Doge, which was just so much focused on government headcount, as if headcount was the greatest expenditure of the US Government, which it is not. It is mostly defense and entitlements. But I think that, you know, there, there, there could be a more vigorous effort here. And so far, we have not yet seen the super vigorous effort that is really cutting down the thicket of rules that really helps lawyers, you know, have, have their meal. Right now I feel like now everything is a full employment for lawyers program, and the lawyers are very busy having their fill suing each other. I think we can do better. We can do better than this.

[Jim O'Shaughnessy]

I once had an idea for a predator agency. The predator agency derived its budget from finding all of the antiquated regulations, all of the misguided laws that were no longer useful, et cetera, and closing them down. And then when it had done as much of that as it possibly could have, it itself would die because its budget was derived from finding those inefficiencies. I guess that will probably work better in fiction than in nonfiction, but know, we spent a lot of time in America and our problems. Let's, let's turn to China for a minute. You know, right before I signed on to have this wonderful conversation with you, I saw the news that China had banned their tech companies from buying Nvidia chips. And I also was kind of enthralled by your, your very cinematic presentation of Zero Covid and what happened at Disneyland in China. And then to that. We have this diaspora of the creatives and people. And you I think of as a very brilliant creative. You're here, you're not there. And watch people boat with their feet. Right. And what could China do to make super creative, dynamic people like you? Stay there or want to go there?

[Dan Wang]

Yeah. Well, my story is that my parents and I emigrated to Canada when I was little. I mostly grew up in Ottawa. And you don't have any Canadian in you, do you, Jim? No.

[Jim O'Shaughnessy]

I had a 25 year relationship with the Royal bank of Canada. I managed the o' Shaughnessy funds up there for them. I've been in every province of Canada. And when I was giving one speech, a fellow came up to me afterwards and said, how long have you been an expat? And I went, I'm sorry. And he goes, you're Canadian, right? I went, no, actually, I'm an American. And they hate it when you call yourself an American in Canada. They want you to say, I'm from the United States because they're part of America too. Anyway, I said, yeah, no, I'm an American. He goes, no, no, no, you're not. I am, Honestly, I am. And he goes, where did you grow up? And I said, minnesota. And he relaxed and he goes, oh, that's a nice Canadian province.

[Dan Wang]

Yeah, indeed, indeed. That is. That's what we consider the Deep South. But that is that. That I do hear when the way that you say process and a few other words, it sounds quite Canadian to me. So we left for Canada and where I mostly grew up in Ottawa. And I decided to return to China as an adult when I was around the age of 25 to study technology. I'm 33 now. And it is one of these pretty striking things that, you know, China calls itself to be, you know, enacting the great rejuvenation of the Chinese ethnostate. And I think there are so many Chinese who are willing to depart from the great rejuvenation that is undertaken in their name. I think about, let's say, three categories of people. There's plenty of rich people. There's an estimate out there by some consulting firms that in 2023 and 2024, something like more than 15,000 Chinese millionaires have taken themselves out of the country and moved to places like Japan, Singapore, the uk, the us, Canada, wherever else. A lot of creative types are smoking dope in Thailand or they're moving to New York. There's a big feminist standup comedy show in New York City in Mandarin that takes place once a month. And I've been privileged to hear some of these people who are doing their bits over in these places. And there's also plenty of people who are not so wealthy, who are not so educated, who have decided to show up on the US Mexican border in the southwest by flying to Ecuador, where they don't need a visa from China, and then walking across Darien Gap to try to cross over into the United States between 2023 and 2024, the U.S. customs and Border Patrol were apprehending something like up to 40,000 people at its peak of Chinese nationals trying to cross into the border. And I think there's a story out there in which a lot of Chinese have wanted to move out of China forever. There's a long story of the diaspora and immigration and expats among them. But I think at a first approximation, it gives me a little bit less confidence that China will be the great power it aspires to when so many people, rich, educated, not so rich and not so educated, all want to depart. And I think this really has to do with a lot of the sins of the engineering state. They have really smashed a lot of companies, especially those in Internet platforms, that Xi Jinping does not really value things in E commerce companies working in online education. A lot of rich people in China feel pretty precarious. If you're an elite in Beijing, maybe you're working in the financial industry. Well, last year China announced that it was going to have a $400,000 pay ceiling on anyone working in finance. And maybe you're working in the E commerce or online Internet industry. And maybe you were working in an industry that the Politburo decided to strangle. And even if you're in an elite inside the party or the military, you never really know when your patron might be ensnared in some sort of a corruption scandal, in which case his entire network would unravel and collapse. So there's something pretty precarious about living in these authoritarian regimes. This is, I think, pretty endemic to authoritarian regimes. They're not going to really be able to fix these sort of problems. They are still delivering some degree of wealth creation. They are creating more and more exciting technology companies, but they are also becoming more restrictive on all sorts of cultural production. And so I wonder the extent to which China really could succeed fully to be a great power if it is so restrictive. Maybe it is enough for China to figure out advanced manufacturing which will create more world leading companies and de industrialize other parts of the United States. But I think that what I would really love is for China to become a little bit more lawyerly or a lot more lawyerly and actually respect the individual flourishing with its own people.

[Jim O'Shaughnessy]

Yeah, and I think back to Deng's opening up markets. And am I correct in assuming that a lot of the China we see today was really a result of of Deng's reforms? And then of course I vividly remember watching Tiananmen Square et Cetera, we talked earlier about Apollo and Dionysus, Athens and Sparta. Is there some limiting factor that just closes down the tension? Because like I think of South Korea, for example, they used to be a very authoritative country and then they opened up the economy that created a vibrant large middle class. And away went the, for the most part, not speaking in absolutes here, but the, the worst excesses of South Korea's authoritarian government. And I kind of was seeing and hoping that that was what was happening when DAG was opening up China as well. Are we doomed to like is. Let me rephrase this as a question. If I made you bet and we were going to do a bet, and I'll take the other side of the bet, who are we going to bet can change and move the pendulum back a little? Is it the engineering state of China as it is currently comprised, or is it America?

[Dan Wang]

I bet on America. I think that I am here and I prefer to be in a pluralistic world. I think what America has, it's its own heritage to draw on with respect to having been a former engineering state, because it's certainly built and built and built and built and overbuilt. And I think that there is robust debate. There are movements that are trying to get America back on track again. And I think the reason that I think that the engineering state of China will not substantially change in a much more friendly direction is that China doesn't so much have a lawyerly tradition to draw. China has never had that many lawyers in the first place. It has, you know, I think about the sort of absolutism that the Chinese emperors practiced way before European monarchs chanced upon this term absolutism the Chinese emperors had been practicing. I think it is not much of an exaggeration to say that there's been a minimal liberal tradition emerging out of China. And there's no liberal tradition really defending the rights of individuals or corporations or families against the predations of the state, mostly because the state created an intelligentsia by administering an exam to all of the aspirants in the court. And you don't get very far in court by advocating for constraints on the power of the emperor. And so given that there wasn't so much of this liberal tradition in China, it has less of this tradition to draw on. Whereas the US does have this tradition, does have the pluralism, it does have the energy and movement to try to get to this stage. But what I want to say is that let's get to that stage of development where the US is able to build and meet the needs of its citizens. Because it is not entirely wrong for the Chinese Communist Party to say that they have in some ways met the expectations of the citizens better than the Americans have, that they have delivered much more compelling income growth, physical dynamism, and all sorts of these material ways that people do value delivered greater public order in the streets. When they point over to the United States and say, look at what a lot of buffoonery is going on inside at Washington D.C. they're not fully wrong about stuff like that. And so what I would love to see is for the US to stop the buffoonery, get a little bit more serious about delivering for the needs of its people, and then prove that it is the United States that has the much better system than China.

[Jim O'Shaughnessy]

Yeah, well, I like you. I said I'd take the other side of the bet, but I'm going to have to hedge because I would never short the United States of America. And primarily because of all the things that we've been discussing. You know, just a simple thing occurred to me. What are the chances that this podcast, our conversation could be broadcast in China unedited?

[Dan Wang]

Well, I actually wonder how Chinese are able to sign on to foreign platforms if they're, you know, they're blocked from watching YouTube, they're blocked from many aspects of podcast that's hosted by Apple podcasts. So I, depending on your means of distribution, if you, if you have a means of distribution in which Chinese people can access. I'm not sure if the state listens in on every podcast conversation. That would be too many, Jim. That would be insane.

[Jim O'Shaughnessy]

You know, we now have, we have an AI that can listen to all of them.

[Dan Wang]

Yes, perhaps. So the AI makes a lot of mistakes. I cannot imagine a lot of sensors in Beijing listening to every aspect, every element of these five hour long troll Rogan conversations. They would go nuts. So I think it is not a, it is not an minimal task that people in China might well stumble on this conversation and might well enjoy it. Maybe they'll stumble on it. I don't know if they'll enjoy it. But hope is always present.

[Jim O'Shaughnessy]

Hope springs eternal. Before entering asset management, I had a frustrated hobby of fictional treatments. I'm actually right now writing my first fictional book, which is really hard. But, but one of the fictional treatments that I did during the Paleolithic era of the early 1980s was it was a thriller and the basic plot was that it was American policy to try to keep China communist because if they ever embrace pluralism and open Markets, they would bury us.

[Dan Wang]

Yes, possible indeed. I think that Chinese society is really, really strong and is really being strangled by a Leninist system. And I hope that more Chinese people could just be left alone by the engineers for a little bit.

[Jim O'Shaughnessy]

You would rock and roll. Because I like to joke, my CFO and my PA are both Chinese and I'm like, my entire life is ruled by two Chinese women. But they do such a good job that I'm not complaining. What do you think? I had a thought as I was reading your stuff and getting ready for this, that the kind of pattern, the primitive pattern, America started as an idea, right? China started with dynasties and with that command and control structure just right there. As you yourself mentioned a moment ago, the whole idea of the absolute rights of monarchs, that's a Chinese concept. Like are. Are we trying to fight, you know, the, the base pattern of cultural DNA if we are hoping for a more liberal or pluralistic China? Another reason, by the way, I won't pull my punch that I think America probably has a better shot of adding a little more of the engineering, what we used to do quite well, than China becoming pluralistic and adding a little more of the lawyerly.

[Dan Wang]

Yeah, I think that I am, I am a little bit reluctant to say that the cultural DNA must be immutable because you're right that China started as a. With a national conception of language, heritage, race and political traditions and ideological traditions. But so then did most countries in Europe. They have their own conceptions of, you know, this is. This is what the French are, this is what the British are, Germans are a little bit more complicated, but this is what the Italians are. And I think that all of these European countries have to some extent moderated their essentialist impulses to become quite, you know, liberal democracies in much better ways. And you're right that the US has a more fundamental ideology of a nation. It's not so much defined by race necessarily, or language. Although if we ask some people like J.D. vance today, they would like for America to be more defined by race and heritage. But I think that as the Europeans have been able to transition out of this to some extent, perhaps the Japanese and the Koreans have also transitioned out of this mindset. Hope springs eternal that over not years, but decades, that China could also have this sort of a ship.

[Jim O'Shaughnessy]

Back to America for a minute. Can you give us one historical American builder archetype by name who we forgotten about and like, maybe should remember that person?

[Dan Wang]

I offer the name of Hyman Brickover, former US Naval admiral, also Known as Father of the Nuclear Navy. He is someone who's not much discussed if at all today, but he Rickover achieved this amazing feat of turning all American naval submarines into being nuclear powered. And by turning it into nuclear powered submarines rather than diesel powered submarines, it makes the submarines much more quiet and more importantly able to stay underwater essentially at this point now for the duration of the submarine's lifetime, they do not need to be refueled for many, many years. And that is an astounding feat of engineering. Rick Hover had all sorts of problems, personality problems, he made a lot of people very mad. But I still feel like it's a lost opportunity for Elon Musk to start doge and take a pair of shears into the US government, right? Rather than building incredible feats of engineering inside the government, Elon Musk, to the extent that he was co president, really tried to take down a lot of crucial functions of the US government such that I think it has become much less effective for the FDA to lose a lot of staff, such that it is no longer able to approve a lot of critical life saving drugs. And so I wish that Elon Musk could have devoted his considerable talents into building inside government as Rickover has.

[Jim O'Shaughnessy]

Musk aside, are there other candidates that are living today who could assume a kind of a Rickover role?

[Dan Wang]

Oh, I wonder. A lot of the VCs are much more interested in tweeting than governing. For taking a look, if we're thinking a look around the table of the, you know, Silicon Valley folks who recently dined with Donald Trump inside the White House, I think that it is a little bit difficult to imagine that these Silicon Valley titans, folks who are running Meta or Alphabet or Microsoft or whatever else to really Nvidia, to step away from their lucrative purchase, running very big powerful companies, to be relatively powerless member of the bureaucracy to do God knows what inside the government. I think this is one of these other big problems of the lawyerly society that it becomes really difficult for talented people to imagine themselves to be doing a lot inside the government because it is so difficult and it is so thankless. And so that is also something I would like to change, that we should increase the prestige of working within the government, pay civil servants a lot better rather than trying to cut their jobs as Musk has and try to draw in some really ambitious people back into the government once more.

[Jim O'Shaughnessy]

Well, and that's the old there's all sorts of shading that you need to do, right? Because back in, in kind of America's golden era, if you will, when we were still building and still doing all that. We had a WASP culture, white Anglo Saxon, Protestant culture. And part of that culture was you've got to give back. And so you saw a lot of incredibly prominent people who had made their careers in business and other endeavors go into government because they felt it's our turn now to give back. And I wonder. So maybe not Silicon Valley, but how about coming over to this coast? Is there anyone that you could name or a group that you could name who might be able to do that, to go into government and actually make it function better, engineer it better?

[Dan Wang]

Well, I am pro abundance movement, and I am pro common good movement. And, you know, maybe. Maybe the people holding the answers can be found in these. In these movements. Maybe, maybe Philip Howard, maybe we can enlist him and a lawyer who knows about the sense of the lawyerly society. What do you think? Maybe you can put in an ask and see if Philip can run the government for a little while.

[Jim O'Shaughnessy]

I will put in the ask because the thing I love about that, it's like I think it was Douglas Adams. Anyone who aspires to be the President of the United States should in no circumstance be allowed to be the president. Philip does not aspire.

[Dan Wang]

Yeah.

[Jim O'Shaughnessy]

So I think he definitely would disqualify. Yeah, he's qualified. He's definitely qualified. We're winding down here. This has been so much fun talking to you about all of this. What's your most uncertain forecast about China?

[Dan Wang]

I think that there is always a question of what is going on inside the political system, inside the bureaucracy. I mean, I think one of the challenges of doing a lot of China analysis over the last couple of years really comes down to a single person. What is going on in the mind of Xi Jinping. And it is kind of an unintellectual question because nobody will ever know. And Xi Jinping won't tell me, and he won't tell really anyone. And there's plenty of, you know, even if you're inside the highest echelon of the Communist Party, the Standing Committee of the Politburo, there's seven men who are in this committee, and they very rarely know what's going on in Xi's mind. And they don't know what other people are thinking about either as well. And so I think there's a. There's profound uncertainty about what she might be doing next. Usually I would say that Xi's character is generally pretty cautious. He is not about to start a conflagration over Taiwan. That's not one of the things that really keeps me up at night in a big way. It does not seem to be. Appear to be super confrontational, at least right now with Xi Jinping. But so much of it comes down to what Xi is thinking, and that is relatively difficult to predict. And you know, the course of the economy, the course of politics, the course of diplomacy, of geopolitics, a lot of it rides on understanding him. And so that, that, that man, a mystery, is the person that is the greatest source of uncertainty for most things in China.

[Jim O'Shaughnessy]

Yeah, I think that when you get it down to a single person, you got trouble. If a single person can affect the outcome of such a vast and storied country, whatever the country. By the way, let's not just pick on China.

[Dan Wang]

Sure.

[Jim O'Shaughnessy]

That is not an optimal situation. Well, so one last speculation before I give you our final question that we give all our guests. And I say speculation intentionally. I'm not asking you to make a forecast. I'm asking you to speculate. America and China are both in a state of becoming. Which way do you see each tilting? And let's not put it into the the way future. Let's put it to 2035. Speculate for me. America 2035. China 2035.

[Dan Wang]

Well, I expect that China will have still a fairly dysfunctional economy, fairly dysfunctional economic system, as well as a fairly dysfunctional political system. I don't think that she will be around. Xi right now is aged 72. In 10 more years, he would be old enough to qualify to run for U.S. president. So. But I hope very much that he is not still running China at that point. And though China will be economically dysfunctional and politically dysfunctional, I expect that China will continue gaining strength to strengthen a lot of advanced manufacturing. Right now, I think that China is already making some of the best manufactured products in the world. And I do strongly believe now that made in China is a mark of quality in much a way that made in Japan has become a mark of quality as well. I'm hopeful that the United States can get through the turmoil of the next few years, that as voters react to current events, they deliver punishment to the ruling party, as they tend to do just naturally throughout midterm cycles as well as presidential cycles. And I'm hopeful that we get to a better place where there are not super strong disagreements with each other, that disagreements are kept civil. And I'm hopeful that we are able to have a degree of pluralism such that we have a little bit more engineering again.

[Jim O'Shaughnessy]

Amen. To that. I am a big believer in conversation, especially if you disagree with the other person. If you, if you lose the ability to have good faith. Conversations and debates where people of very different outlooks are still willing to civilly chat with each other. That's how we go forward in my opinion. And the tiny contribution I try to make is to try to embrace as many goodwilled people that I might not entirely like. I don't think I entirely agree with anyone or disagree with anyone, but I think the more substantive conversations that people can listen to and you know, expand the way they look at the world. This, this idea of us versus them, of tribal identity is poisonous in my opinion. And I just think your average American does not resemble either one of those polarities. I think your average American is still basically a kind of go along to get along helpful, optimistic type person. And that the intense desire of what I think are not well intentioned players to divide us and create these tribes doesn't end well in my opinion. So I'm 100% in favor of what you're advocating. I said last question. But what you said made me think of another question. Is there, is there a way where we could have kind of designed in California but manufactured in Pennsylvania? Is, is that something that we could work towards as we hope so. Get a little more engineers?

[Dan Wang]

I hope so. But first we need to get a little bit more engineers. And that that premise has not been established yet. I would like for there to be more of that. And unfortunately I think that right now the direction hasn't been entirely positive that since Liberation Day in April, the United States has lost about 40,000 manufacturing jobs. Manufacturing production has contracted for the last six months. And I think it is not the right move to strengthen America, America's science by slashing in half the funding for the National Science foundation and attacking the universities. Though I know there's plenty of problems with universities. This is not going to make America much more of a scientific superpower. And it is especially not to put into chains and deport a lot of South Korean engineers trying to build a factory in Georgia. And I think that this is going to deter this action in particular against the South Koreans is going to deter a lot of people from sending over Taiwanese, Japanese, German, whatever nationals into the US Try to invest in the US and get these programs started. And so I would like for the US to re industrialize presently. All trends that we can see in the data have been negative.

[Jim O'Shaughnessy]

All right, this has been an absolutely fascinating conversation. We have a tradition here of asking our Guests, we say okay, we're going to make you emperor of the world but only for a day and you can't kill anyone, you can't put anyone in a re education camp. But we are going to hand you a magical microphone into which you can say two things and the entire population of the earth is going to wake up whenever their next morning is and they're going to say oh my goodness, I've just had two ideas and unlike all the other times, I'm actually going to act on both of these ideas starting now. What are you going to incept in the world's population?

[Dan Wang]

Well I think the inception is to make the US slightly more engineering and China to be much more lawyerly. I think that would do a lot of good for everyone, not least the populations but also I think that would create a thriving world which much more of the world would be better off if these two superpowers were not increasingly deepening their own pathologies. I think that they need to fix themselves and stop delivering so many self beatings against themselves and deliver the things that their people need.

[Jim O'Shaughnessy]

Great answer. I was kind of expecting that one to be honest.

[Dan Wang]

Sorry to be predictable there.

[Jim O'Shaughnessy]

Well I guess I'll end on where we we started in the beginning I think. Let's think. And as opposed to or right. Because Athens and Sparta contributed to a thriving culture as different as they were. You don't want to go full Apollo, you don't want to go full Dionysus. You don't want to be only left or right brained. It should be. And Dan, this has been really really fun for me. Tell our viewers and listeners, obviously you're already on the New York Times bestseller list. They can pick up your book anywhere. Where can they find out more about you?

[Dan Wang]

You can check out my website Danwalin Co. And then my book again is called Breakneck China's Quest to Engineer the.

[Jim O'Shaughnessy]

Future which I highly recommend all of our listeners and viewers buy and read. It's a great read. Thank you so much for your time Dan and best of luck. Oh, final one, what's next? Are you writing another book?

[Dan Wang]

I hope not. It is now time for me to read a few more books again. Maybe I would like to read some novels again. So whenever Jim, you finish your novel please send it to me so I can have a bit of a beach read please.

[Jim O'Shaughnessy]

I shall. And that is what I'm designing it to be. A fun beach read thriller. Dan, thanks so much.

[Dan Wang]

Thank you very much Jim Sa.