Bannon vs Frum debate on populism

Be it resolved: The future of Western politics is populist, not liberal.

Steve Bannon says yes, David Frum says no. Full debate here:

The moderator expands on the topic a bit: “Is the West living through a populist sea-change that will irrevocably transform our politics? And can these longstanding liberal values – liberal values of trade, society and politics – push back against this populist surge and reassert their primacy in the 21st century?”

It’s a spirited argument and worth watching in full. Bannon achieved a decisive victory in this one. Before the debate, only 28% of the audience agreed with the resolution, while 72% disagreed. After the debate, 57% agreed while 43% disagreed. [UPDATE: Munk Debates screwed this up. The actual, corrected post-debate figures are 28% pro vs 72% con. Thus, audience opinion was unchanged.]

The debate was held in Toronto. Twelve people were arrested in a protest outside the venue, during which one police officer was hit with a stick and another was punched in the face.

“These people are complete narcissists”

Google leadership seminar

Google leadership seminar (source)

I enjoyed this rant against Big Tech, which besides being funny, also contains the kernel of a very interesting idea for how to address the growing crisis around data privacy and ownership:

Bannon also added this gem about Tesla:

I do not have a dog in this fight, but Musk seems increasingly unhinged to me, and the little stunt he pulled with his abandoned buyout plan was undeniably shady. But… are you not entertained?

American serfs

Steve Bannon provides a useful metaphor for the economic state of current-day Homo Americanus:

All the economic textbooks you’ve got before 2008? Throw them out. They’re totally irrelevant.

Your generation, the readers of New York Magazine, you’re nothing but 18th-century Russian serfs. You’re better fed, and you’re better dressed, and you’re better educated. But you don’t own anything. And you’re not going to own anything.

The state capitalism of the big technology companies has taken away your digital, your data sovereignty. They’ve totally taken it away. You generate intellectual property all day long, and they don’t pay you for it. They take it for free, they monetize at huge margins.

The quote is from a fascinating interview regarding the aftermath of the 2008 financial crisis. There is surely a connection between the decline of private ownership in the US — ranging from homes and cars to technology and books — and the rise of a permanent class of social media serfs who create content for free. The collapse of ownership is also a useful framework for measuring the actual wealth and economic well-being of Americans. Are you wealthy if you have access to everything you want, but you own nothing? Obviously not, because access can be revoked, whereas property can only be taken away with difficulty, if at all.

On a more practical note, Bannon sees big economic policy changes ahead:

But now McMaster is gone, Cohn is gone, Tillerson’s gone. Look what Trump’s done in six months. He’s reorganized the world’s commercial system. We’re very close to having a massive reorganization in six months. The Wall Street stuff will all come. Trump wants to make sure first, get the economy revved back up again —

What if it doesn’t?

Well, the economy is going to be at 4 percent growth. Wages are going to start to follow. We’ve got time. You can’t do everything at one time. Let’s change the world’s commercial relationships and change the supply chain away from China, okay? First off, that would be Herculean, because for 30 years we looked the other way and exacerbated and we helped its growth.

Bannon’s dark valley

Former White House chief strategist Steve Bannon offers a perspective on the great geopolitical issue of our time:

But what he really wanted to discuss what how the obsession with Russia was a giant red herring from the bigger looming threat of China’s economic dominance. He pointed to Australia as ‘an object lesson to Great Britain and the United States’ for what happens to a country when it lets itself be dominated by China’s economic might.

He said: ‘The people in Australia thought they were playing by the rules, and what they found out ten years later is that the Chinese had gone in and bought minority stakes in companies and bought natural resource companies – next thing you know, with the investments they made in real estate and real assets et cetera, they took control of companies. Next thing you know they’ve got political power – they’re being politicians. And now Australia is in a situation of creeping control by an independent Republic like China – it’s dangerous. That’s happening in the United States and it’s happening in Britain.’ […]

But Russia, he argued, is distraction from the great evisceration of America, Britain and Europe’s power, which is down to the ‘axis of the 21st century’– China, Persia, Turkey, or ‘the Asian landmass’ and China’s one belt one road.

Is it too late for the west, though? Has China’s economic power now grown so great, and our economies so weak, that the Chinese takeover is inevitable?

‘Up until Donald Trump came on the scene, we were told by everybody in the city of London and on Wall Street that the inexorable rise of China is the second law of thermodynamics. It is the physics of the universe.’

But Trump, he insisted, through the threat of tariffs, and the aggressive limiting of Chinese investments in western countries, can reverse the advance of China’s economic advance: ‘If we were to go full on, and pull the trigger on that, you bring ‘em to their knees.’

What are the chances of America actually doing that, even with Trump? ‘Low,’ he says, ‘but the stakes are too great not to try.

‘We are going through a dark valley. People say I’m apocalyptic – I just look at facts, and I’ve been saying this for years and now it’s all coming to fruition. That’s why with Russia, the kleptocracy are not good guys, but eventually, we have to end the Cold War and we have to bring Russia into some sort of alliance or rapprochement with the west.’

If the west allows Russia to partner ‘with this [China-led] axis, the 21st century will be quite different.’

Even if you’re not inclined to agree with Bannon, it’s a fascinating interview and I recommend listening to the whole thing.

UPDATE: As I commented here, starting at 24:00 Bannon goes into some detail about the various weapons Trump has put on the table to wage economic war on China. Summary:

  1. Take China off the banking system or limit their access to capital markets – too much of a blunt instrument
  2. Scale of the tariffs – half a trillion dollars
  3. Section 301 investigations – no more forced technology transfers through joint ventures
  4. Executive actions on ZTE – “There’s 50 ZTEs. You could liquidate all of them in 30 days.”
  5. Proposal to ban investment in sensitive US technologies by companies with 25% Chinese ownership – limiting Chinese access to technology

Bannon:

If we were to go full on and pull the trigger on that, and converge those all in a point, you bring ’em to their knees right now.

Thanks to 罗臻 for highlighting this on his blog. His reflections on the unfolding situation are very interesting.

Edward Luttwak’s book The Rise of China vs. the Logic of Strategy is proving rather prescient.