A (3:37)

Well, I've worked on a bunch of different things. Mostly I've worked around kind of three broad themes and then a fourth addition to that. So the three broad themes are labor, law and land, all things related to politics of labor, politics of law and politics of land in China and also in Indonesia, increasingly also in Taiwan and Malaysia. What I've also started to look at a lot as kind of a separate area from that is international relations of China and of sort of the Asia Pacific region more broadly. That's what I've been looking at mainly through what you could call qualitative or historical methods. So mostly through in depth on the ground field work, observations, interviews, not quite on the level of what an anthropologist would call participant observation, but sort of extended conversations is more what I would think of it as what you might call focused interviews in iterative forms as well as then document based research, archival research and so on. That's mainly where I've come from on this. And what ties all this together is, I think, looking at the politics of institutions as opposed to the politics of individual leaders. Institutions as a kind of social facts and also institutions as rules and guidelines that structure social, political or economic behavior.

B (5:05)

And how does the work of James Scott relate to your work?

A (5:10)

Well, I like to think in lots of ways. Scott was one of the first major political scientists who I encountered when I started getting into the field about 30 years ago. And through reading his work, I came to understand a powerful counterpoint to the kind of theories that in those days were really hegemonic, or I thought were hegemonic, at least, which were mostly rational actor models of the world. So the kind of classic, often game theoretic models coming originally out of economics, but also very pervasive in political science and even some parts of sociology that assume that we can essentially reduce all actors to individuals methodologically, kind of methodological individualism, even if we're talking about countries or large institutions, that they behave as if they were individual human beings and that human beings also individually do behave this way, which is to have consistent preferences in any circumstance and then based on what information they're able to glean or think they know from the situation, they will seek to maximize those preferences. And therefore we can understand each individual's behavior with a kind of utility function. Now, even in economics, more recently, strands of economics like behavioral economics have tried to relax some of those assumptions, particularly around constant preferences or even around the ability of individuals to interpret the information accurately. They may know quite a lot, but they don't always interpret it in a way that will lead them to effectively maximize their preferences, even if their preferences don't change and people's preferences do change. But in the 1980s and 1990s, there really was this kind of assumption that we could model the world this way and that through doing so, we could arrive at clearer understandings of how people strive for greater efficiency and maximization of returns for themselves or their organizations. And I think what Scott challenges powerfully is the notion that this is a good idea, that even by doing that, individuals, organizations, or states frequently undermine exactly what it is that they're seeking to achieve.

B (7:28)

And he has two big sides to his work that I'm aware of. And part of that is he studied peasants. And so he went out and he seems to be one of the first people to do this. What he said in one of his books was, the history of political science is about studying revolutions, whenever it talks about the people. But the truth is, most of history is not a history of revolution. It's a history of much subtler resistance, I think. And then he has the flip side, which is, how do states see the people and how do they govern? And so I think the first work that he did was around studying peasants. But I want to talk about seeing, like, a State, which is one of the books that you've written about. How do you summarize seeing as a state?

A (8:19)

It's a big book, and it's got a lot of big ideas inside of it. But I think that the fundamental purpose of the book is to critique what Scott characterizes as a kind of authoritarian high modernism. That he talks about the German foresters who plant forests of pine trees or other kinds of trees in neat lines, and that planting the trees in neat lines leads to unhealthy forests, for example. Another example is building highways in the American Midwest. If you build them completely straight, as they started to do, truck drivers would fall asleep and run off the road or crash into each other. So they had to put in jags here and there just to make them even, intelligible and navigable, which is, I believe, what's on the COVID of that book. And so there's this sense that the state will seek to draw simple straight lines or clear bright lines around categories in order to make up for its inability to understand but it's desire to know something. So a good example from early in the book is the window tax, which is common in lots of countries, including in the UK where I live now, was common. It's not really the way it's done anymore, but because they couldn't assess accurately the square footage of housing and they wanted to tax big houses at higher rates than smaller houses, they said, all right, we're going to count the number of windows facing the street. Because anybody can do that. You walk by and say, okay, your house, house only has one window, will tax you at one rate. If your house has six windows, we'll tax you a much higher rate. And so what people started to do once the window taxes came in is they built houses with very, very narrow doorways that expanded out like sharply sided trapezoids, right coming back from the street. So there'd only be a couple of windows on the street, but then the house in the back was much bigger. Or you don't put any windows in the front and just have a solid wall, but you have all the windows in the back. Or you have various games to get around this to fool the state at assessing the tax because it was very easy to do so. And the state thinks it knows quite a bit and ends up behaving this way and actually distorting behavior in all kinds of other ways. Lots of states do this, from the Soviet Union to the US to all different kinds of other regimes. And by doing that, they actually occlude more than they illuminate and end up behaving highly suboptimally for themselves and causing all kinds of problems for their citizens as well.

B (10:52)

Hey everybody, here's some upcoming events. On March 5, 2026 in Oakland, Robin Zander, the organizer of the Responsive Conference, is launching the first of a new series, the SNAFU Conference. It's about something that's important to all of us who are mission driven, which is how to sell yourself without selling out. Remember to use promo code 11fold. That's one one fold to get a significant discount for tickets to SNAFU. Also big event. On March 20th, I'll be speaking at PX Live in London. Luc Omani and his remarkable community of PX leaders are getting together for a one day event. If you want to deliver an extraordinary people experience, this is the single best opportunity to meet kindred leaders. Thanks and watch this space for announcements about my future speaking events. Yeah, there were a couple things I learned first about the forest example, which is that the Germans said, look, it's going to make so much sense. What do we want from forests? We want wood. And so we're going to measure the success of the forest based upon board feet of spruce. And so they said, well, great, but it's going to be so much easier. If we plant the trees in rows, we're going to be able to say exactly how many board feet per acre we can produce. It makes so much sense. It's so logical. And we're going to get rid of everything else. All that shrubbery underneath. We don't need that stuff. And two things happened. One is everybody who lived around the forest said, hey, wait a sec, we were using that stuff that was under those trees. We were feeding our cattle, we were thatching our roofs, we were doing all this stuff, getting herbs. And the lesson there is, if you optimize any system for one outcome, it comes at the cost of other outcomes. The first generation of spruce did great, but the second generation didn't grow. And the second lesson there was, if you optimize any system for one outcome, you don't get the other outcomes, but you may not even get the first outcome. And I want to dig into the idea of authoritarian high modernism. I'm not sure that's a concept I could have described three, four years ago. It's got two pieces, high modern and authoritarian. I think we get authoritarian. What's the high modern part?

A (13:06)

High modern in the sense that we could rationalize something and that that would produce a positive result. That's how I read that. At least that if we think of what is modernism or high modernism, it's a quest for rationalization and efficiency. So it's something that I think many engineers are trained to think this way, because that's what makes a good system. But when designing institutions that have to be used by nature or by humans, the good system sometimes crowds out what's actually making it effective. Right. So creating, for example, cities on the model of Le Corbusier creates cities that are unlivable. Right. Which is why Bruges is so much nicer than Brasilia, supposedly. I've never been to Brasilia, and I've only once visited Bruges, so I can't really say if that's true. But if you create a city that has exactly straight streets and clear lines of buildings and is all organized exactly according to a master plan, it will be less organically thriving than a city that comes together as a hodgepodge of footpaths trodden over hundreds of years, even though that hodgepodge city is far less rational and far less efficient. So the idea of modernism, I think, is that there's one thing which is true, we can find out what it is. Once we know that truth, we can design systems around it that will be rational and maximizing, pursuit of whatever goods follow from the idea of that truth. And the critique is that we can't really know a singular truth that way. That's a fundamentally hubristic assumption. And then it is naive to think that even if we know what the singular truth is, that we could design an efficient system that would lead us there with no wastage. And so we have to be more tolerant of all of the messy bits at the bottom of the forest or the winding streets of a city that wasn't rationally planned from the get go in order to reap the benefits that they actually provide that we may not notice if we're not looking for them. Because states are very good at looking for what they can see, but not very good at understanding that there's a lot that they may not see. And so sometimes they'll leap to that in order to cover up weakness in other areas.

B (15:31)

And I noticed a pattern in what Scott described in seeing like a state, which is that step one was, look, I need to govern this complex system, and usually frequently from the best of intentions, which is I want to make a better place for people to live, but it's complex and I need to understand it. So I'm going to come up with some simplified model of how I think it works and I'm going to try to measure that. The next step is, oh, it's messier than I thought. And I'm going to force it. I'm going to try to force it into my idealized model. I'm going to make it measurable. And that's, I think, where the authoritarian comes in, which is, you're not fitting my model, I'm going to make you fit my model. You know, and so there's this crossover from understanding the system, which is legibility is the word that Scott used, is I'm trying to make this complex system legible. And then there's this crossover into. It's not just about understanding it, it's about making it fit my understanding.

A (16:35)

Yes, yeah, that's true. If you've got a sort of standard bin in which to measure odd shaped things, if they don't fit in the bin, you Start cutting off bits of them or twisting them in order to fit them into the bin. So, I mean, Scott seems to love, at least in this book, Greek mythology. And the character that therefore comes to mind is Procrustes in the sense that or travelers would meet him along the road and ask to stay in his little lodge. And if you wanted to stay in his lodge, you had to fit in his bed. And if you didn't fit in the bed, if you're too short, he'd stretch you. If you're too tall, he'd cut your legs off. If you're too fat, you'd get trimmed on the sides. If you're too thin, you'd get stretched out to the sides. And in any case, the travelers would almost all end up dead because he was intent purely on fitting them into that bed. And it in the same way, an authoritarian, high modernist state will design the bright lines of the categories and the straight contours of the system. And if you don't fit within that, you'll be shaven down in order to make it fit.

B (17:38)

Now, I'm going to tie that to work. Since this is a podcast about work, I'm going to talk about how companies do that, which is the company's complex, especially if it's big. And we need to understand what's going on in there. So we create job codes and role descriptions and we say, here's a role description. It's necessarily over broad because I can't understand the true complexity. So I'm going to make large categories, and then these large categories I'm going to tell people, look, your performance is going to be measured based upon how well you work inside that category, inside that job role. And we're actually going to reward you if you look more like what you're supposed to look like in there. And if you're bigger than that role, we can't really see that. All we can do is measure you against that role. And it's exactly that kind of high modernist mistake. Let me ask something about authoritarianism first. I don't know if political science crosses over into psychology, but there's this assumption that some people seem to have that I can make the world conform through coercion if necessary. As we're recording this, Musk has taken over Twitter and is doing these sorts of things which is trying to force it into a particular shape. I guess my question is, why is that so tempting? But maybe that's not the realm of political science.

A (19:11)

Well, I think if we consider the most basic definition of What a state is any kind of state democracy, authoritarian, anything else? A state is some kind of an institution that has a monopoly on the legitimate use of violence or coercion within some defined territory or over some set of people. Even if we imagine a kind of idealized democracy where everyone has exactly equal rights and equal freedom and the state is not overbearing, so what we could conceive of as civil liberties in a very liberal sense, are completely protected, there still is one aspect, two aspects of the state actually, which would involve violence or coercion. One of those is war. If another state attacks us, even if we're living in the perfect sort of libertarian democracy, another state attacks us. The state, our state, we hope, is going to use violence to repel that attack. And that would be a kind of violent, coercive action of the state. Even in this perfect realm. The other is criminal law. So if someone engages in an infraction of whatever we decide are the criminal rules, you know that they've committed a crime according to whatever the rules we've set for that are, that person will have their rights restricted coercively in some way. Right now, that might mean they're not allowed to do something, and if they try to do that, they'll be stopped. It might mean they're incarcerated in some sort of form. It might even mean that they're physically harmed or even killed in some way, depending on what the rules and punishments we've set up are. So any kind of a state is almost by nature going to be coercive and violent in at least some forms. And this is actually where I have some slight departure or disagreement with some of what Jim Scott argues, and that I think he sometimes undervalues the coercive capacity of states in that if you're a vulnerable person, there are times where you might want the state to protect you from your neighbors. If you're a member of a vulnerable group or a minority in an otherwise completely free and open libertarian democracy, you want to know that the state will prevent you from just being run over by the majority. And that can require coercion to prevent the majority from doing that. And that's not a function which is necessarily by nature authoritarian or high modernist, even though it is coercive. And it does require a kind of rollout of state authority. So there are times where states are always coercive or violent, or where all states are coercive or violent. But I think we could then talk about different types of states and why they do that and why they don't

B (21:51)

can you describe the difference between and I'm going to mispronounce this probably because it has an accent over the E. Metis and Dolos.

A (22:01)

Oh yeah. I mean, I'm not an expert on Greek mythology, really. It would be better to have a classicist comment on this, truly. But Metis is, I believe, the mother of Athena, if I'm not mistaken. And also, if I recall correctly, she helped Zeus to free his siblings from the stomach of Kronos by supplying him with some agent that would make his father fall asleep or not feel him sort of opening up his stomach and freeing his siblings. And so she's sort of a helper of good things and a purveyor of wisdom in a sort of non systematic sense, especially as Scott conceives of her. And again, not being a classicist, I'm not really the expert on exactly who Medis is or, or how we should think about her. But Scott thinks of her as a personification of, I think, a kind of folk wisdom of sort of unsystematic traditional knowledge that can often be superior to what we think of as systematic or scientific knowledge or understanding of the world. And so he calls upon wise leaders or wise social actors to search for Medus and to acquire this kind of more holistic understanding of reality and of social relations that would enable, for lack of a better term, more inclusive governance and more perceptive understanding of how the world really works. Now, if we think about Dolos, Dolos tried to create a fake statue again, if I remember correctly, tries to create some fake statues. And people were fooled by this. And this was deemed by others in sort of the pantheon to be a bad thing, except for Prometheus, who took him on as his servant because he thought, that's really clever. You can fool people with those statues. That's a really good copy made. And so Dolos then takes on this role of being kind of purveyor of false wisdom and engaging in trickery and fraud throughout the mythological world. The point I was trying to get at in that little essay I wrote about Scott's book is that we could go out looking for Metis and get fooled by Dolos and end up actually taking on the position not of purveying real wisdom about the world, but of in fact engaging in a kind of shysterism without even necessarily knowing it. And so it's difficult to do what Scott advises rather than easy, at least authoritarian high modernism. We can have a rulebook by definition, that we can have a set of procedures that we follow. We know how to do it and do it potentially extremely efficiently. But if we decide we don't want to do that, it's harder to know where to go, and it's easier to get sidetracked or fall into pitfalls.

B (25:01)

Yeah. A lot of what I get in the description of Metis is the idea that there's a lot of embodied wisdom in how things are working today that is very detailed and it's held by the actors and it's down on the ground level. And Scott puts a lot of faith in that. That high modern ism is going to disrupt that. But your point is, if you let it rain sometimes Metis is harmful to certain populations, or it's. It's corrupt, or it's chaotic, or it's not a perfect Eden either.

A (25:41)

No, I mean, there are plenty of scenarios in which we can imagine a traditional society that's very, very close to the experience. I mean, I think that the point about sort of down in the ground or up much further from it is a good one. But another way to conceive of it is sort of experience near versus experience distant. Right. That there's a value in listening to the people who are actually doing something and working with this every day, inevitably. I mean, if we go back to the sort of work analogy, if you talk to people who do a job, one of the biggest things that anybody will complain about, from the staff in my local pub to the railway workers on the train I took the other day to people in my own department, including sometimes myself, is this idea that whoever's making these rules for us doesn't understand what we actually have to deal with and what it's actually like to do this job. Right. That when we're actually in the process of doing something, we gain an understanding that we don't get when we look at it from a more distant perspective, and I think that's a big part of what Scott is calling for, is that the state needs to recognize that it doesn't know everything. And that if it walks into the pub or gets on the train or walks in the hallway of the department, it's not going to get sufficiently clear understanding of what's really going on. And when it imposes its sort of simple rules, it won't necessarily have the effect that it's seeking to have. Whereas the other point I would make is that sometimes what's really going on isn't the best way to do things. Sometimes it's not the most efficient way. Sometimes it's actually hurting somebody who may not even realize that they're being harmed or discriminated against, or in other ways excluded or undermined, undervalued. And sometimes it takes somebody coming in from the outside and saying, hmm, maybe that's not the best way to do things. Maybe you're doing something bad, maybe you're actually mistreating somebody, or maybe you're hurting yourself by doing this. And you could actually do things very differently. So to me, a better use would be more of a dialogue. But the dialogue is hard. It's very difficult to sort of see when is it useful. Because the other thing to remember, the state can't be there every day. No state can be. And this is why I think the authoritarian aspect really comes in, is not just trying to force the world to conform, but eventually, if the state recognizes, okay, I don't understand what's going on in this market. People are doing all kinds of things. I wouldn't predict that they would be doing something is wrong. Let me try to find out what's happening. So how are you going to do that? You have to send people into the market to inspect it and figure out what's happening in different parts of the market and who's doing what and why, and require them to give up information. And eventually you end up extending further and further these sort of tendrils of state control into the market. In order to get the information, you need to understand what rules you should make, how the rules should be implemented and why the rules are not being followed, and figure out who's not following them and make them do it. And you get more and more and more state control, but no state is there every single time. Another point that Scott makes is that people will evade those increasingly tight areas of state grasp and sort of run through the fingers of the state wherever they can into other little areas that are less regulated. And no state wants to be there every day. No state can be there every day in every transaction. So recognizing that, where should the state prioritize actually looking? Where are those jobs where somebody who's experienced, distant should actually come in and try to figure out what's going on or do something about what's going on? To me, there's no easy answer for that. I'm sure Scott wouldn't have an easy answer either. I think he would probably be more likely to say, well, they should stay out of it. The state should stay out of this situation. The more it tries to get involved, the more it's going to mess it up in some way, even if the best of intentions are present. But sometimes I think that involvement is needed and when it is, it's not always obvious. In other words, it's a bit of a paradox. How would the state understand when it should get involved and when it should not without being the sort of all pervasive, all controlling state that I think we all agree we don't want?

B (30:07)

You started to talk a little bit about what it's like when you are close versus distant and the distant actor comes in and starts to affect your world. When one of Scott's other book was Weapons of the Weak, and he has a couple of others which I have here on the shelf, but I can't remember their name off the top of my head.

A (30:26)

There's the Moral Economy of the Peasant and Against the Grain.

B (30:29)

Yeah, Hidden Transcripts. There's a whole bunch of work around what it's like there. And what are the forms of resistance that are available to those being affected from above?

A (30:43)

Well, there's lots. I mean, you can try to avoid the attention of the state, right, or of whoever looking from above. You can run away. You can stand up and resist directly and face music of whatever consequences might be imposed. But the one I think that Scott is really kind of obsessed with throughout all of his work, and that I think is really common, the more authoritarian a system we look at, I mean, it's absolutely pervasive in Chinese politics, for example, is what we could call feigned compliance. This idea that you do what it is that's necessary to check the right boxes according to the job description or the key performance indicators or whatever it is that's being measured. You do what's necessary to have a satisfactory measurement on those dimensions, and then you do whatever you can outside of that to undermine what it is that's being measured or what it is you're being asked to do in a way that lets you resist what the state is, or the state or whoever is in a position of authority is trying to get you to do without them seeing it. Or maybe they do see it, but because they've laid out the rules of how this is going to be measured and judged. They can see what you're doing, but they can't do anything to you for it. They can see you're not really following the rules, but you are in at least enough of a superficial way that they can't punish you for breaking them.

B (32:13)

Can you give an example of that?

A (32:15)

Well, there's lots of examples in Scott's work and Weapons of the Weak, for example, or in hidden transcripts about sort of foot dragging or Famously, the servant who spits in the soup before serving it. And then sometimes the question to me is, if the person in authority doesn't see it right, if the person who then eats the soup didn't see that you spat in it before you served it to him or her, does it matter? Is that really resistance, or is that just for your own kind of sense of fulfillment that you did something that you feel was subversive? But other examples that I could draw on, from what I've seen, let's say that the state tells the lower official that you have to make absolutely sure that certain resources are deployed to finish a certain project. You might do that, but you might do it in a way that you put only the minimum resources into that project, or you finish the project, but this doesn't really work, right? So it could be, you know, you have to build the building and they're going to look at the outside of the building. So you build the building, but you don't finish the inside and you spend the other resources on something else. Or you have to get everyone to pay a certain fee. So you get everyone to pay that fee and then you go and you create a benefit on the back end that pays back that fee and more to all the people who paid it. You might do something like that in response to being measured on something. I can't think off the top of my head of other examples, but there are lots and lots.

B (33:51)

It's interesting because I think a lot of those things can be sort of seen as pursuing a different objective than what the state has. And let me explain what I think that is, which is that the idea is, hey, we're trying to do something for the greater good. That's what the state's thinking and the people are thinking, no, I want to do something selfish. But what I find is that frequently what the governance of a corporation wants is they're saying, look, do these things. And I'm saying, or people I know, yeah, no, it's me. Which is that they're saying, do A. And I'm like, yes, I agree with A, but B and C are also necessary for the good of all, for the good of the whole. You can't see B and C, or you don't value B and C. But I think if we just do A, it's not the best thing for the company. And so I'm going to sandbag a little. I'm going to tell you it's going to take all of my resources to do A, but I'm going to hide some resources so I can do B and C because that's the best thing for the company. And that's an example. It's not resistance, but it is evasion of the letter of the law. Because I think, you know, sometimes you have to look. We have to look past the letter of the law to the spirit of the law and try to do the right thing. So it's not necessarily even resistance.

A (35:14)

Well, in that sense, in the example you just gave, which I think is a really good way of thinking about some aspects of this, at least, it's not really about resistance at all. It's about saving the state or the authority from its own sort of best actions. Right. Saving from itself. Because the people above are kind of being too clever by half in thinking they know what's needed and saying we really want A and only A, because we only understand A. We either can't see B and C, or we don't understand them, or we've undervalued them, or somebody else has told us they're not worth doing or whatever it is. And so if you're actually committed to the idea of doing B and C as well as A, and you know that that's better for the organization if you succeed in doing it and it makes everything better, the question then would be, does that change the perception of the person in charge? And whoever said originally, do A, do they get it after you've done B and C?

B (36:18)

No, generally it takes a long time anyway. I mean, often not, I'd say. And I think there's a related idea here that's worth discussing, which is the degree to which some political organizations have a tendency to concentrate power more completely centrally. And the dangers of that, which is that maintaining the balance of power between those who are close to the problem and those who are far from the problem. We were discussing earlier that there's this dialogue that needs to happen, but if it gets overbalanced in one direction, it seems like there's an enormous hazard. And maybe that's one of the most central things that a governing system needs to manage.

A (37:01)

Oh, I think absolutely. I mean, there's some extreme examples of that that I can think of immediately. Like the great leap forward in China in the late 1950s, early 1960s, in which collectivization of agriculture was pushed from the top down. And then the idea was that this would lead to economies of scale and much greater efficiency of agricultural production. And local authorities then started reporting that it was doing so. They started saying that, yes, of course, this is a great Success, we're growing much more, and we're very happy with this program. And in some cases, they actually were doing better than they'd been doing before. But they overclaimed, and when they overclaimed, and in some cases, they were actually doing much worse. But when they overclaimed, what that meant is that the center believed them and said, okay, if you're producing 50, 60% more, then you need to give us at least 50, 60% more of your yield to distribute through the state planning system in the center. And they would do so, because, of course, that's what they're supposed to do, and that's the rule. And eventually it came to a situation in which two problems occurred. Well, there are many problems, but two that were related specifically to this aspect. One was that everyone was overclaiming, and the local authorities would compete with each other to claim even more, to the point where some were claiming yields per hectare that were just unfathomably large. No one ever could possibly grow that much food on that much land, no matter what. And so it became almost absurd, the figures that were being reported. And so what was being taken was everything. And then some they'd say, you're in arrears and giving the center its allocation of grain because you've reporting all this yield and you're not paying what you should be paying. And then the other thing that started to happen is that the central government and the central planning apparatus didn't have the capacity even to deal with what it was taking in, right? So all of this food was paid in, and it ended up rotting in granaries because they didn't have the capacity to move it around or do anything with it. And the end result, of course, is that 35 million people starved to death because all the food went into this system that couldn't process it, and it was taken into large requisitions from local authorities that didn't have it. And the new processes that were imposed for supposedly improving yields, often, sometimes they did work, but very often they didn't. And they actually reduced yields greatly or destroyed crops. And that's kind of a great tragedy, I think, of how this can occur, where all the information goes in one direction. And so, really, famously, about a year into this process, this went on for about five years. And about a year into the process, there was a central government conference called the Lushan Plenum. And at this conference, one of the top leaders in the Chinese Communist Party, who had been the top general during the Korean War and was a kind of national hero for having fought the United States to a stalemate. That's how he was portrayed and perceived. He wrote a letter to Mao Zedong and said, you need to understand this is really not working. What's happening on the ground is dire, and this is what's happening. This is what's going on. And Mao received a letter and then he took it in front of the meeting of the Congress, and he said, we have somebody who is broken from the Party center. This is a tantamount to treason, but if all of you are with him, that's fine. Send me away. I'll go back to the mountains and come back with a guerrilla army to defeat you all. And there was a big standoff, and the general who wrote the letter was pushed out. He'd been the Minister of Defense. He was pushed out of those positions. New people were appointed, a couple of whom later ended up leading the Cultural Revolution. In about six or seven years after that, or at least in playing very important leading roles in the Cultural Revolution. And the policy went on for another several years, and many, many more people died because of it. So when someone in the center doesn't get the information from the periphery and won't hear it when it does come, the results can really be disastrous. That's an extreme example of it, but it is something I can believe we'd see every day in a much smaller, lower stakes form all over the world.

B (41:39)

Yes, and in fact, wise. I've been in this business long enough. I have a rule. Never admit to exceeding expectations. Because if you want to leave enough capacity to do B and C, not just A, if you do a times 10, people will want 8 times 10 next time, and it won't leave you any capacity to do B and C. That's like one of those sort of. I don't know exactly what to call it. People in this position like I'm in, are doing it for the greater good. We may be wrong, right? We may be wrong about B and C, but that's a really interesting situation that they probably learned through those five years is, oh, stop saying we're exceeding capacity.

A (42:21)

Well, if we go back to your question about A, B and C in that sense, I think that's a really interesting insight of not admitting to exceeding expectations with regard to A, because otherwise you won't have the capacity ever to do B and C, and you'll just end up being sort of the point person on A forever and ever. But wouldn't it be the ideal? And I think Scott would say it would be an ideal situation for all of us to sit down and have a kind of open conversation about A, B, C and maybe D, E and F and what's really the best thing to be doing and how does this really play out in different kinds of scenarios or situations? Is there any kind of an organization that does that or any way that we could do that?

B (43:05)

The answer is yes. And the teams that I lead are often in the middle. We're often in the middle of trying to implement the larger purpose and doing that in partnership with people who are very close to the problem. And one of the things that you do is you bring those people together by bringing them together and having them talk about it in a more general sense. You elevate them so that they can see it from at least halfway up the altitude of the larger body. But then they inform, they say, no, there's B and C here that we've got to think about. And everybody agrees. And you say, okay, didn't know about B and C. And then what you try to do is you're essentially elevating because everybody's stuck in their local problem space. But by elevating them up so that they can see the larger problem space, sometimes you can get everybody to understand that bigger picture and collaborate around it. But like you said, that's hard. That's very labor intensive to the point where my team exists to do it. You know, I want to start going into your work because there's this opportunity to talk about labor in China. And in fact, China is just unbelievably fascinating and often bewildering to me. Like, I look at it and I can't understand it. What are the big trends that are going on today in labor in China?

A (44:29)

Wow, that's a big question. But I would.

B (44:32)

Huge question.

A (44:32)

I know, right? I mean, I would say that the big, big story forever in terms of labor in China is fragmentation or segmentation of the labor market or of labor regimes. So I think in really broad brushstrokes, we see two different worlds of work in the Chinese political economy. One in the state sector and the other outside the state sector. Right. So inside. Most of my earlier research actually was on the state sector and the way that labor functioned inside of it. And I could talk a lot about that if you want. But I think what's actually more interesting today, and we can come back to the state sector because there is some interesting stuff there. But right today, what's really also interesting is in the non state sector, we can see sort of at least two different kinds of employment worlds in that area. One for kind of white collar professionals who are urban residents, usually quite highly educated, very often fairly young, sort of young to middle aged, not very young. Usually we're not talking about people in their 20s who actually have a really hard time breaking into that labor market, but we're talking more about people kind of in their 30s, 40s, even early 50s who have fairly stable jobs and in fact tend to hop jobs all the time. I mean, it's I guess the same kind of thing in some sectors in the U.S. but people who will stay for 8 months, 9 months, 12 months, and then for 5% more money hop to a different job, even though it's not really that much of an improvement, or that's obviously much more of an improvement. Sometimes they won't even go back and negotiate with their former employer that just hop jobs like that and keep going around. And there's this other sort of lower tier work world of the non state sector, which is dominated by people who've migrated from rural areas into the cities. And that's, you know, most manual labor jobs, many, many jobs in the service industries. And those people exist in a kind of semi regulated market that when I've taught undergraduates about it, I often try to use the analogy of undocumented workers in the United States, that they're filling a lot of the same sorts of jobs and treated in many ways in similar fashion. They're not given full rights of citizenship in the city, they're very often discriminated against, looked down upon by their employers and others in the city. And because they don't have urban residency, they don't have claim to sort of the capacity to engage in formal work or formalized regulated work work. And so they're not given basic labor protections. Now the other big story around this though, is that across the board, labor in China has become more expensive relative to other developing countries. And as the overall sort of population shrinks and especially younger cohorts of people become smaller and smaller, it seems likely that this trend is not going to slow down. And in conjunction with that, we've seen all kinds of other issues in the Chinese economy since about 2010 that have led much of the engine of GDP growth, which has been export processing, manufacturing, to move offshore to other countries. And so this story of outsourcing not to China, but from China, I think is really the big story of a big section of labor studies with regard to China over the last decade or so. And so the manufacture of lots of lower value added goods that had been mainstays of the Chinese economy, increasingly is moving to Southeast Asia, to South Asia, to East and Southern Africa and to other places. So if we look at the markets for things like shoes and apparel, lower end sort of accessories for electronics, things like cell phone cases, all the other kinds of consumer goods, a lot of this is moving out of China and often still produced by Chinese contractors. So the way a lot of these things work, as I'm sure you know, is you'd have a brand that might be European or American or Japanese, and they would use intellectual property or designs from those countries often, or sometimes from Korea or Taiwan or other European or North American countries, and then usually contract with a Korean, Taiwanese or Hong Kong intermediary. Something like, say, for example, Foxconn is a famous example. It's not the only one by any means. There's hundreds of these, right, who would then either set up factories themselves in China or work more commonly with Chinese subcontractors to actually do the production with components that might be sourced from other parts of China or from other countries, anywhere in the world. And then it would be exported from China and it'll say made in China on it. But you know, famously, you've seen, I'm sure, those charts of the iPhone and how much is really coming from China and how much is coming from all these other different countries. That's common with everything. The shirt that I'm wearing now, I'm sure is similarly sourced from all over the place, even though the label in the back of it says it was made in China. So that end stage, final assembly or final production now is also moving out of China. And the Chinese subcontractor is now going to a sub subcontractor in countries like Vietnam, Indonesia, Philippines, Bangladesh for textiles in great amounts, Ethiopia, Lesotho, South Africa, all over the place. And this seems to be a new pattern. So just as we see a couple of problems in China, for example, that the economy's not growing fast enough to absorb new entrants into the labor market, this has been a worry for about 10 years, and it's really sort of coming to a head now, just as that's happening. Jobs are also disappearing at the lower end of the labor market overseas as more and more of this production is outsourced. And then of course, the other sector of lower end employment that has great danger of declining is construction, because there's been this phenomenal construction boom for 30 years in China that might very well be coming to an end, but that's harder to predict because the Easiest response of the state to an economic slowdown is stimulus. That will really boost construction. The particular kind of stimulus will boost construction and real estate development. So that will be possibly still ongoing.

B (51:26)

My brother was in China and he said you could drive for miles seeing these high rises, that you were completely transparent. They had nothing in them. They were just empty space. You know, it's interesting. It was Keynes who said sometimes if you were just to take money and bury it underground in bottles and force people to dig it up to get it, that's enough to fuel the economy. Right. It doesn't necessarily have to be productive in any way to actually sustain an economy.

A (52:00)

Well, that's true if what you're looking for is just boosting aggregate demand.

B (52:04)

Just boosting demand, if that's what you're after. Yeah.

A (52:07)

But you can't do that forever, because another insight from Keynes is that the economy is cyclical. Right. And so you can't have an endless boom by constantly stimulating demand. There has to be some point at which boom recedes. Where you really should be stimulating demand is not in the boom, but in the bust. Right. So during the Great Depression, it makes sense to pay people to dig deep ditches and then other people to fill them up again. Right. Because just having people working and doing something will prevent this sort of death spiral of unemployment and reducing prices. Unemployment reduce and lead to some greater prosperity. But if things are booming, you shouldn't keep doing that.

B (52:53)

Yeah. So it sounds like this is a huge story, because first of all, I was not aware of the outsourcing of labor from China. I was not aware of that. That's a new story to me. But also this sense that China is sort of building out farther and farther onto a ledge in a demographic situation where their economy is, as you said, it is not large enough to ingest new capacity of labor.

A (53:21)

Well, the other issue on construction and development and real estate is that a while ago, the government painted itself into a corner around this. And it's very, very hard to get out of it, because what happened in the 1990s, after a whole bunch of other things changed in different ways from the earlier period in, say, the 70s or early 80s, when you get to the mid-1990s, there were two really fundamental reforms in 1994. There was a fiscal reform and a monetary refor reform. And the monetary reform people seldom talk about when they study Chinese politics, but it's actually vitally important because it made the renminbi convertible for the first time and it allowed for people to transfer capital into China and to take profits out of China. And so right after that happened, we see just the floodgates of foreign direct investment take off. And by the end of the decade, China's getting more foreign direct investment than any other country. Country. It's building up all these foreign currency reserves. The great boom of the Chinese economy that goes from about 1994 to about 2008 really couldn't have happened without monetary reform. But the fiscal reform centralized revenue collection. It created a kind of a tax authority, the State Administration of Taxation, the SAT, as it's often abbreviated, which sounds even worse than irs. But that agency then has branches all the way down to the county level and collects all the revenue into the center. And so previously about 80% of revenue is being collected by local authorities. After the fiscal reform, 80% of the revenue goes into the central government who then are supposed to distribute it down. And so it kind of speaks to this, seeing like a state problem and that they distribute it downward according to different formulae that are not always accurate as to what the needs further down the pyramid are. And each level going from the center to the province, the province to the prefecture, the prefecture to the county, the county to the locality, the neighborhood of the village. That trickle down process leaves the people further and further down, more and more left out in terms of the funding they needed to do basic things. When we're talking about local government governments, not even individuals, right? And then at the same time, what the state started to do is it started to pass legislation that said all local governments need to build paved roads out to a certain distance from the city. All local governments need to make sure the hospitals are up to snuff and that people can access medical care. All local governments need to make sure they're providing quality education for all children that lived. And these are not bad things, right? These are good things. All local governments should have covered sewers and clean water and all these kind of basic hygiene and public health and social benefits programs. But they didn't give them any money. So they created these massive unfunded mandates at the same time that they were taking away all of the revenue streams. And then as we get into the later part of the decade, the state sector labor reforms and other reforms of state owned enterprises caused massive unemployment in many cities. They also weren't given money to deal with that. And so local governments were essentially broke and having really difficult times. And so what they started to do was collect illicit fees. They actually had this extra budgetary fees is what they called them. This caused tremendous Public resentment, of course, right? Because the government would suddenly show up saying, oh, in addition to the taxes you've paid, now we want this fee and we want it from you right now. And it's this much. And I can't point to any written rule that says why you should pay it or how much it should be. So of course people didn't like that at all, right? There's a lot of resistance to that. The central government saw that resistance. And in 2006, Hu Jintao, who's been in the news recently for less illustrious reasons, pushed through new rules that said, you can't do that anymore, stop doing that, right? Stop shaking people down for all these illicit fees. And by the way, if you live in the countryside, you should be able to go to school for free. So local governments can't charge school fees anymore. You should be offering free school to rural residents. Again, these are good things, right? But then the local governments, particularly in the rural areas, reacted to this by saying, all right, we've got to do something. We can't pay teachers without the school fees. We can't engage in any of these sort of health, welfare and infrastructure projects without more revenue. We've lost the only source of revenue that was backfilling the hole. So we got to do something. And the one thing they could think of doing was requisitioning land from farmers, paying the farmers compensation at a very low rate, and then selling that land use right or the rights to develop that land to real estate developers. And at exactly the same time, the failing state owned enterprises in cities, a number of them, this I haven't really done the research on yet. I'm starting to look at this in more detail, but it looks like a number of state owned enterprises in the city essentially transformed themselves into real estate development companies because they weren't any longer engaging in sort of productive capacity or useful production, and they were losing all their workers and they couldn't pay their costs. And so they, they go into real estate as a way out of unprofitability. Other firms come in, local governments set up their own real estate developers, and the real estate sector just starts to boom. And so we get to a point by 2010, 2011, where about 70% of local government revenue is coming from real estate development in some form, and the

B (59:15)

real estate development is in part funded by investment from individuals.

A (59:20)

Well, real estate development, the problem in terms of the funding is, yes, so basically when the two aspects are you get about 70% of local government revenue comes from real estate development. About 65% of household wealth ends up in real estate by about that time. And the relevant comparator figure that I know of, and I'm not an expert on this aspect of economics by any means, is that if we look in the United States in 2006, there was a report from the Federal Reserve bank of New York that warned of an impending crisis in real estate because 35% of American household wealth was in real estate. In China, it was almost twice as high by 2010, and it's still getting higher rather than lower. So people are buying real estate at a prodigious pace in order to park wealth into it, essentially. And the reason they're doing that is because there's no other place to put your money. If you have some money in China, what are you going to do with it? Capital controls mean you can't really move it out of the country, which is what a lot of people would like to do. And the more desperate measures, like buying bitcoin, a lot of people will do that. They'll buy bitcoin in China, take a trip abroad, cash in the bitcoin, and buy a house in Vancouver or San Francisco or wherever in order to move money out of China to engage in more productive investment. Because if you keep it in China, if you put it in the bank, it's going to make negative real interest. If you hold it in cash, what's going to depreciate as cash? Always depreciate. If you're going to buy a government bond, it pays even worse interest than the bank savings account. If you invest in stocks in the Chinese stock market, the A share market, it's incredibly volatile because no one's got any accurate information on these companies. And so real estate became extremely attractive as a place to park your money. Oh, yes, everybody needs a place to live, so people are going to buy a house. But people with more than a bit of money often would own, you know, seven, eight, nine, ten apartments. And mostly they weren't even renting them out because the secondary market and the rental market are not that good. So they were just buying them as stores of value, which is also problematic. But this boom in real estate was indeed fueled by people rushing in to buy real estate because they were looking for someplace to store value. Now we've got a situation where the economy is slowing. It's harder and harder to get a mortgage. A lot of banks are having difficulty extending more credit because they want to pull in. They're calling in loans more than extending new ones. And the Government's trying to crack down because they've realized it's a terrible bubble and so on, but at the same time, they don't want the real estate companies to collapse because if they do, the local governments will have no revenue and there'll be a lot of people who bought real estate that will be left holding the bag.

B (62:17)

So in the face of this, China seems to have gotten more authoritarian. I actually see this in my own work sometimes, which is that people with positional authority sometimes feel that that gives them actual control, but there's a big gap between positional authority and actual control. And so this is a hurricane. It sounds like a building hurricane, and it sounds like the instinct of the state in this particular case is to try to put its arms around that hurricane and control it. But there's a limit to that. And that seems to be the future story.

A (62:58)

Yeah, there's a huge limit to it, and there's a limit to the states. I mean, what I think is interesting in terms of Chinese politics in general when it comes to this specifically in this instance, and then in more general terms specifically in this instance, there's an instinct to want to control it, to want to rein in the bubble, to rein in the banks, to prevent everything from exploding. But at the same time, there's a realization that doing that will kill the economy. If you do that, the economic growth is going to turn negative. You're going to have all of these bankrupt firms, you're going to have lots of people who bought apartments that never got built are going to be very angry. Local governments will all be broke. What's going to happen then? And I think you get this tension back and forth. And I'm fairly confident this is playing out behind the scenes pretty dramatically inside the system between those who want to crack down and control and those who want to sort of fuel the boom more so because they're afraid of trying to control, because they realize they don't know. Right. And so there's this kind of authoritarian, high modern reaction. And then there's a different reaction, which isn't necessarily not authoritarian high modern, but it's sort of recognizing what the limits of information or capacity really are even within that. And I think the more general formulation of this in Chinese politics is to say that, yes, things have been getting more authoritarian in many ways over about the last 15 years after a period in which they were loosening. They've been tightening since about 2007, and sort of increasingly so kind of going up this spiral. But at the same time, we've seen a reinvigoration over the last 10 years of a concept by Xi Jinping called the mass line. And the Mass line can be called criticized as kind of a hollow concept. But if we take it at face value, it's exactly this idea that those who sit atop the system or in positions of leadership need to understand the reality that is experienced near for those who are at the bottom of the system. So it's important to regularly engage in a meaningful way with farmers and workers and ordinary people and not to lose sight of what the on the ground reality is. Of course, if. Is that just lip service, is it done effectively? Can you be fooled when you're doing the inspection visit? Yes, of course. But I think it isn't just a facade. There is something behind that that is genuine. And it comes, I think, from an understanding that it is far too easy to lapse into patterns like the ones described in seeing like a state. And they don't want to do that, but this is their authoritarian method of coping with that is not always effective either.

B (66:04)

Yeah, that's very interesting. This actually makes me want to turn. Turn this show into a general analysis show instead of a show on work.

A (66:11)

I'm sorry, I've gotten too sidetracked from work.

B (66:13)

No, no, no. Because I always want the conversation to go where it wants to go and this is where I want it to go. Because it is a little bit like watching a, I don't know, a disaster movie or something. It's scary and it's thrilling and it's. But it's not. It's deadly serious, you know, so there's a question I normally ask at the end of this show which I haven't prepared you for. So I'm going to give you a little bit of a preface for this. The reason I ask this question is that a lot of the premise of the show is that we have misunderstood our business models. And in particular, what we've misunderstood is that employees are not an input to production as normally framed, but are actually customers of enterprises. And from a business model perspective, that means you have, like a lot of businesses have more than one customer. But I'm saying that all businesses have more than one customer and one of them people who work there at the company. And this has really not been the traditional way of thinking about workers. Workers are considered inputs to production. So because I believe that they are, I've been doing market research into what people want from work. Because if employees are customers, then work's a product and it's a Product that we're selling as companies to the workforce? Well, what are they buying? Is the question. And so at the end of the show, I ask a marketing question about work. And the question I usually ask at the end of the show is what do you, bill, hire your job to do for you? Your work hires you to do something for it. What do you hire it to do for you?

A (67:55)

Let me make sure I understand the question because it's not a trick question. But it's tricky in that it's not something most of us have thought about in great detail on a day to day basis. So I think if I understand it, what you're asking me is what is it that I'm buying if I think of myself as the buyer, not seller, of my own labor power in that sense? So what am I buying from that? Or what am I trying to get for myself out of taking this job versus a different job versus something else? Is that about idea?

B (68:29)

Yeah, that's exactly it. That's exactly it. If I'm somebody who's designing work for you, I need to know what you're trying to get done with work so that I can design it better.

A (68:40)

Right. I think famously I've had this conversation and others have as well with in fact, Jim Scott, to bring it back to him about how do you measure success as an academic or as anything, how do you deem yourself to be successful in your job? And what he's always said pretty consistently from what I can tell from talking to other people who've also had the same conversation, is that he measures success by the percentage of his work from which he does not feel alienated. And the more work that one does that is not alienating or from which you don't feel alienated, the better. Now, I think what that would mean would be that like everyone, there's a lot of things I have to do for my job that I don't find especially meaningful. Not that I don't find them pleasurable. Some of those things can be fun, and some things that aren't fun or that are really unpleasant can still be meaningful. And it's a question of is this meaningful or not. Let me think about it from another angle. This is a really hard question. Actually. It really sort of makes you think in an interesting way. A different angle would be to say I often think about different kinds of work and different kinds of tasks. And I think it's useful to divide them along two attributes, sort of what is difficult and what is tedious. If we think in sort of negative terms about it. On the one hand, I'd like to do things that are really meaningful, but then think negatively what's difficult and what's tedious. And I think something that is tedious but not difficult is bearable but not meaningful in that sense. It's fairly easy to fill in some forms or do whatever it is that I've got to do to sort of pass the benchmark markers of whatever it is, but it's boring, it's not interesting at all. Something that is really difficult but not tedious is the stuff that I really like to do. That's what I find really meaningful. When I can sit down and actually work on something that I want to be working on, that's what I would gravitate towards. Towards is working through a problem, doing research about something, gaining information, thinking something through that could be really fun and meaningful. But it is difficult because if it's not difficult, it's not interesting. And then the things that I always would really want to avoid are the things that are both difficult and tedious. And so I always think the best analogy for that is filing tax returns. I find that fairly difficult because I don't know much about it. I'm not an accountant or an expert on tax law or anything like that. So every year I have to study a fair bit to learn how to do it and figure out how to do it correctly. And that's not easy, that's quite difficult. I also find that intensely boring, which is is why I'm not an accountant or a tax lawyer. Right. So for me it's also very tedious. So that combination of being tedious and difficult I think is drudgery at work, which is what I would run from. I think if I ever found myself in a job that I found both difficult and tedious, I'd want to be out of it. And then I think the final category of neither difficult nor tedious is that's a hobby. I wouldn't do that for work because it wouldn't really be meaningful. If there's something that was fun and easy and enjoyable and somewhat interesting, that's playing more than working in a sense, because work has to have an element of difficulty, at least in my mind. I don't know if that answers your question at all.

B (72:46)

Totally. By the way, you've created a whole new two by two, which is great. Now I can see it. It's got difficult and tedious.

A (72:52)

It's hard for me to think without two by twos.

B (72:54)

Actually, it's a two by two Right. And so I'm trying to figure out what pushes something from tedious to difficult.

A (73:04)

Like, at least in my mind, I see the categories as independent of each

B (73:08)

other and that, yeah, they are independent. Yeah. I guess I'm trying to understand the tedious scale, which is some people would think that field research in China, talking to a hundred people is tedious.

A (73:18)

Yes.

B (73:19)

So there's something that pushes that, for you, into difficulty.

A (73:24)

I honestly think for each person, this is going to be different. Right. In the sense that what you find tedious, I might not, and what I find really difficult, you might find very easy. It would depend on each individual person's skills and proclivities. And I also suspect that different people would have a different tolerance level. I think if I look at other people that I know, if I've known them for a long time or if I think I understand them at least a little bit, I would say that compared to most of them, I have a pretty low threshold for tolerating tediousness, whereas a lot of people seem to have a very, at least from my perception, very high threshold for it. They don't mind doing something over and over that isn't particularly challenging or interesting, at least from my perception. Whereas some other people probably have an even lower threshold for tediousness, and some may have a lower or higher threshold for difficulty. There's always a point where I think anybody, when facing something that they find difficult, will say, I give up. It's just too hard. Why bother? This isn't worth it. No matter how meaningful, no matter how interesting, this is just too difficult. I'm not enjoying this, but I think where one hits that is going to be different for each person and maybe for each thing. Like, you might have a different degree of difficulty that you can tolerate when doing X versus doing Y. I don't know. I haven't thought about this systematically enough, but

B (74:57)

most of us don't, which is why it's an interesting question. So we're at time, and I just have so enjoyed this conversation. I really have appreciated talking to you.

A (75:07)

It's been great. Thank you very much. I've really enjoyed it as well.

B (75:10)

I feel like, you know, part of what I do in the show is I bring in people from radically different disciplines to talk about this space of work. I feel like political science is largely untapped by businesses, not appropriately tapped into by business leaders.

A (75:28)

I think that's probably true. I think the reverse is also true. I think to the extent that political scientists or academics generally have tried to tap business. They've tapped exactly the right, wrong aspects of business.

B (75:42)

Well, thank you. I hope we talk again. I would love to, actually.

A (75:45)

That'd be a lot of fun. This was great. And it would be really good to do that, whether in a more focused way about work, if you want, or in a more general way or about something else. That'd be a lot of fun.

B (75:55)

Well, thank you very much.

A (75:57)

Fantastic. Thank you. Thank you very much.

B (76:01)

Thanks for joining me for another episode of Work for Humans. If you enjoyed this video episode, please give us a five star rating. Wherever you listen to podcasts and share the show with one person you think would get value from it, believe it or not, this really helps us grow the show and reach more people who want to build the kind of work that people really want. As always, thank you to my producer Jason Ames at 9th Path Audio for his insights into content and his high standard for quality. Final note, the opinions shared here are my own and not the views of Google or Cisco Systems. Thanks again for listening. See you next time.