0:00

Just how serious is the emerging

0:02

conflict with China? It has

0:04

already turned into Cold War II. Historian

0:08

Neil Ferguson on Uncommon Knowledge,

0:11

now.

0:16

Uncommon Knowledge

0:21

Welcome to Uncommon Knowledge, I'm Peter

0:23

Robinson. A fellow at the Hoover Institution,

0:26

Neil Ferguson received his undergraduate and

0:28

graduate degrees from Oxford. Before

0:30

coming here to Stanford, he held posts at Oxford,

0:33

Cambridge, New York University, Harvard,

0:36

and the London School of Economics. Dr.

0:39

Ferguson is the author of more than a dozen

0:41

major works of history, including The

0:43

Pity of War, explaining World War I,

0:46

The Ascent of Money, Empire,

0:48

How Britain Made the Modern World, and,

0:51

we come now to today's topic, Kissinger,

0:53

The Idealist, the first volume of his

0:56

two-volume biography of Henry Kissinger, one

0:59

of the most important figures of the first

1:01

long Cold War. Dr. Ferguson

1:04

is now completing his second

1:05

volume of the two-volume biography

1:08

of Henry Kissinger. Completing it, yes, Neil? Yes,

1:10

that's the plan. Got it. All right. Neil

1:13

Ferguson in National Review.

1:16

There was a first World War,

1:18

then there was a second. They were not identical,

1:20

but they were sufficiently similar for

1:22

no one to argue about the nomenclature.

1:25

Similarly, there was Cold War I, and

1:27

now we

1:27

are in Cold War II. All

1:31

right. Here's what I take the term Cold War

1:33

to mean. The conflict

1:36

with China will last two

1:39

or three generations, generational

1:42

conflict. We'll find ourselves

1:44

living under nuclear threat again, and the

1:47

very existence of our civilization is at stake.

1:51

Am I being melodramatic, or is that

1:53

a fair summary of what Cold War is? Oh,

1:56

it's much worse than that, because

1:58

you're assuming that it's going to be…

1:59

be very protracted. Cold

2:02

War I was really a four decade

2:05

affair. It ended

2:07

actually rather sooner than most experts

2:10

anticipated. But there's no guarantee

2:13

that Cold War II will last as

2:15

long because China

2:17

is a far more formidable adversary

2:20

than the Soviet Union was. Economically

2:23

it has all but caught up by

2:25

one measure, a gross domestic

2:27

product based on purchasing power parity.

2:30

China overtook the United States in 2014.

2:32

The Soviets never got close. By that measure their

2:35

peak was 44 percent the size

2:38

of the United States. So purely from an economic

2:40

vantage point, Cold War II

2:43

is worse. From a technological vantage

2:45

point it's also worse because we have

2:47

the nuclear weapons of Cold War

2:49

I. Of course we have superior weapons,

2:52

the weapons they had at the beginning of Cold War I.

2:54

But we also have a lot of things that they

2:56

didn't

2:56

have in Cold War I, from

2:59

artificial intelligence to maybe quantum

3:01

computing. And so Cold War II

3:03

is taking place with a great deal more

3:06

technology, a great deal more firepower

3:08

than Cold War I. And do you want me

3:10

to keep going? Go ahead. I'll give you one

3:13

more reason for being worried. I'll spend the rest

3:15

of the show trying to find a note of cheer. Well,

3:17

let's stay a reality in the face.

3:20

In Cold War I it was really quite

3:22

hard for the Soviets to find

3:25

out things about the United States because

3:27

the number of Soviet citizens in the United

3:29

States was pretty small throughout and we

3:31

knew who they were and where they were. And

3:34

there was some penetration of American institutions.

3:38

But by comparison with Cold War II,

3:40

it was nothing. In Cold War II you have massive

3:43

social and economic interpenetration.

3:46

There are all kinds of ways

3:49

in which the Chinese can find out things

3:51

about our relatively open access

3:54

society and economy. And not just by

3:56

being here, though they certainly are here in much

3:58

larger numbers than the Soviets were.

3:59

but also electronically. So I do think

4:02

before we just assume, oh,

4:04

Cold War II will be a bit like

4:06

Cold War I in terms of duration. I don't think that's

4:09

guaranteed. Nor is it guaranteed that we win, because

4:11

of course we won Cold War I. We shouldn't assume that

4:13

we'll win Cold War II. All right.

4:15

We'll come back to this. Whose

4:18

phrase is it, the correlation of forces? That

4:21

was a

4:22

Stalin phrase. It

4:24

was certainly a Marxist. But Jim N. Kissinger,

4:26

it's actually a sensible analytical starting

4:29

point. Their economy, our economy.

4:31

You've just taken us through that. We'll return to that. It's

4:34

a Marxist-Leninist concept that you

4:36

can think of power in those terms.

4:39

I mean, if Henry Kissinger were sitting

4:41

here, he would say that there was always

4:44

a moral dimension in

4:47

addition to the material dimension. That's one of the reasons

4:49

I called Volume 1 of that biography, The

4:51

Idealist.

4:52

But it's good that we've brought

4:54

him up, because you

4:56

don't need to take it from me that we're in Cold War

4:59

II. Just ask Henry

5:01

Kissinger, who

5:02

at the age of 99 knows a thing or

5:04

two about Cold Wars. I'll tell

5:06

you a little anecdote piece.

5:09

When I first started thinking about this in 2018,

5:13

I had to summon up the courage to

5:15

ask Kissinger, are we in

5:17

a Cold War? And I asked him, actually

5:19

in China at a conference in

5:22

late 2019, and he gave a great reply.

5:25

He said, we're in the foothills of a Cold

5:28

War. A year later, he

5:30

upgraded that in 2020 to

5:32

the mountain passes of

5:34

a Cold War.

5:36

When I asked him about it last year,

5:38

he said almost taking it for granted

5:41

that we're in Cold War II, that

5:43

the new Cold War would be worse,

5:46

would be to be precise, more dangerous

5:48

than the first Cold War. So I'm not just winging

5:51

this. I'm basing this partly on

5:53

his insights.

5:55

But I take

5:57

you as an authority in your own right. but

6:00

now, now, now, now, now I'm

6:03

truly staggered by this. Taiwan.

6:07

Just off the coast of China, an island about

6:09

the size of Maryland, half the size of Scotland,

6:12

population 23 million, a

6:14

genuine functioning democracy with

6:16

a thriving free market economy.

6:20

The position of the Chinese Communist Party

6:23

is that Taiwan is not independent,

6:26

but properly speaking, a part of

6:28

China that therefore should be

6:30

under the control of the Chinese

6:32

Communist Party.

6:34

An event and a quotation. Here's

6:36

the event. Last month, the president of Taiwan

6:38

visited the United States. No

6:40

one in the Biden administration

6:42

met her, but House

6:44

Speaker Kevin McCarthy did.

6:46

China responded with military

6:49

exercises around Taiwan that included,

6:51

and now I'm quoting from a Chinese release,

6:54

quote, nuclear capable bombers armed

6:57

with live missiles and

6:59

warships staging drills to form an island-encompassing

7:02

blockade situation, close

7:04

quote. I'm not sure what an island-encompassing

7:06

blockade situation is, but it doesn't sound

7:09

good. Here's the quotation. You,

7:11

in your regular column for Bloomberg

7:13

News, this is a couple of years ago,

7:16

losing or not even fighting

7:18

for Taiwan would be seen all over Asia

7:21

as the end of American predominance in the region.

7:23

It would surely cause a run

7:24

on the dollar and US Treasuries. It

7:27

would be an American Suez.

7:29

Suez, the 1957

7:32

British failure to keep the

7:35

Egyptians from taking Suez, and that's the moment

7:37

when everybody included the British themselves realized

7:41

Britain is no longer a global power. OK,

7:43

correct. And Americans,

7:45

why should we have so much at stake? Why

7:48

should we be risking an American

7:50

Suez with an island

7:53

on the other side of the world? Well, it's

7:55

a great question, because

7:59

going back to some

7:59

something you said a moment ago, we used

8:02

to accept that Taiwan was

8:04

part of China. And

8:06

indeed, we still officially do have a one China

8:09

policy. So one of the oddities about

8:11

Taiwan is that it's not really controversial

8:14

that China claims it. And

8:17

we do not recognize it as an independent

8:20

state. In fact, you'll get told off even

8:22

for referring to it as a country in

8:25

some circles. So what's changed?

8:28

Because for the better part of half a century,

8:30

really since Henry Kissinger

8:33

and Richard Nixon figured

8:35

out the Shanghai communique with

8:38

Mao Zedong and Zhou Enlai,

8:40

we have gone along with the

8:42

fiction that Taiwan is part of

8:45

China. We've had something

8:47

called strategic ambiguity since

8:49

the late 1970s. And that ambiguity

8:52

was that people in Congress

8:54

who weren't so sure about what

8:56

Kissinger and Nixon had done said, well, we have to

8:58

have some commitment

8:59

to Taiwan. And the commitment

9:02

was an act of Congress

9:04

that said, if China tried to

9:07

change the status quo by force,

9:09

we essentially reserved the right to

9:11

take military action. But this is the

9:14

ambiguity of our policy for 50 years.

9:17

We kind of accept the Chinese claim that Taiwan's

9:20

part of China. But we also say that if they try

9:22

to assert that claim by force, we

9:24

may do something about it. What's

9:28

changed in the last few years

9:29

is that Cold War II has begun,

9:32

even if Americans don't call it by that

9:34

name. Increasingly,

9:37

since around 2018, the United

9:39

States, and this is true of both Republicans

9:42

and Democrats, has taken

9:44

a tougher stance on China

9:46

generally and on Taiwan specifically.

9:50

President Biden on at least three, maybe four

9:52

occasions, has seemed to repudiate

9:55

strategic ambiguity. A number

9:57

of leading policy intellectuals, Richard Hine, have been

9:59

a very good leader. former grand

10:01

panjandrum of the Council on Foreign Relations

10:03

said in 2020, why do we carry

10:06

on with this strategic ambiguity nonsense?

10:08

Let's be unambiguous in

10:10

our commitment to Taiwan. Nancy Pelosi,

10:12

the former Speaker of the House, paid a visit

10:14

to the island in which she acted

10:17

to all intents and purposes as if Taiwan

10:20

was an independent state she was visiting. So I

10:22

think there's been a significant shift

10:24

in our general attitude towards China and

10:27

our specific attitude towards Taiwan

10:29

and the Chinese

10:29

in turn have been upping

10:32

the ante and you gave one

10:34

example there the recent blockade exercise

10:38

at the time of Speaker

10:40

McCarthy's meeting with the Taiwanese

10:42

president but they did something very similar when

10:45

Nancy Pelosi was in Taiwan. So we are moving

10:47

quite fast in the direction

10:49

of a showdown over Taiwan after more

10:52

or less half a century of strategic ambiguity.

10:54

So let me ask this,

10:57

let me give you a couple of scenarios and see what you do

10:59

with them. Here's one. Here's

11:03

the example of Hong Kong. China

11:06

just took Hong Kong and

11:08

here's what we did about it. A couple

11:11

of sharpish statements from President

11:13

Biden and nothing else, nothing

11:15

else. How did people in Hong Kong

11:17

respond? Well students demonstrated,

11:20

the demonstrations are over, they've been suppressed

11:22

and interestingly enough to me at least

11:25

as best I can tell in the business community

11:28

exactly two Hong Kong

11:30

people stood up against it. Jimmy Lai

11:32

is in jail and then Martin Lee, if I

11:34

have his his first name correct,

11:37

there was a prominent lawyer and businessman who

11:39

also stood up against him, not sure of his status but you

11:41

have this large Hong Kong community

11:44

of

11:44

very wealthy, almost overwhelmingly

11:46

men

11:48

and they permit

11:50

the deal to go forward. Now

11:53

we come to Taiwan. China

11:55

is upping the ante, surely

11:58

they're talking to each other.

11:59

think of another small country surrounded by

12:02

hostile powers, Israel. Israel devotes

12:04

more than 5% of its GDP

12:07

to its defense.

12:08

Taiwan, barely over 2%. There's

12:11

some sense in which it feels as

12:13

though there's a lack of seriousness, a

12:16

willingness one way or another to do the deal.

12:20

We in the business community here

12:22

can, we can get along. We can sort this

12:24

out. What we're interested in after all is commerce

12:27

and Beijing understands commerce these

12:29

days.

12:30

So it happens one way or another

12:32

by slow degrees and we do nothing

12:34

about it. Is that a Suez for

12:36

us? It's not the same as Hong Kong.

12:39

Let's just be clear about that. Correct

12:41

the whole analogy. Well, the status

12:43

is completely different. As

12:46

a former British colony, Hong

12:48

Kong was not a democracy,

12:52

never had democracy. And

12:54

what's happened is that Xi

12:56

Jinping, the Chinese president, has simply expedited

12:59

the takeover of Hong

13:01

Kong, which was

13:02

supposed to happen somewhat later

13:04

this century. There's no

13:06

acts of Congress that obliges the

13:09

US government to give a hoot about that.

13:11

And that's why it was always pretty much a

13:14

very faint reflex action when

13:17

Americans complained about what was happening in Hong

13:19

Kong. Britain should have been complaining a lot louder

13:21

because it was actually an agreement with Britain

13:24

that the Chinese were violating. Taiwan's

13:26

different. I mean, Taiwan has been a successful,

13:28

vibrant democracy since the end of the military

13:31

dictatorship there. It's one of the most

13:32

successful economies in the world. Part

13:34

of its success is due

13:37

to its being now the leading center

13:39

for the production of the most sophisticated semiconductors.

13:43

TSMC, the Taiwan Semiconductor

13:46

Company set up by Morris Chang there,

13:49

has become the world leader. And

13:52

so economically, control

13:54

of Taiwan matters a lot,

13:57

much more than the control of Hong Kong

13:59

in terms of the global economy.

14:02

Now, the critical point to

14:04

notice here is that Taiwan's not Israel,

14:06

nor is it Ukraine. You haven't mentioned

14:08

Ukraine. I'm about to. But we need to get

14:11

to that because it is an important

14:13

subplot in Cold War

14:15

II. But just in the short run,

14:18

think of the following sequence of events. There

14:20

is an election coming up in Taiwan

14:23

in January of next year. It

14:25

is not at all clear who is going

14:28

to win. The Chinese are already

14:30

calling

14:30

one of the candidates a pro-independence

14:32

candidate. There is therefore

14:35

a non-trivial scenario in which

14:37

in the course of that election, China

14:39

interferes even more than it did in

14:42

the election of 2020. I was in Taiwan

14:45

in January of 2020, and it was extremely

14:47

striking to me how much the Chinese were trying

14:49

to do to influence that election

14:51

and how little they achieved. Why? Because

14:54

the Taiwanese population over the

14:56

years has moved steadily away

14:59

from the mainland.

15:00

Remember, at one point, a very

15:02

large number of people had come there from the mainland.

15:04

Yes, of course. There were Chiang Kai-shek's

15:06

people who'd lost the Chinese Civil

15:08

War, lost the revolution in 1949, retreated to Taiwan. They

15:12

still retained strong affinities

15:14

with the mainland. Well, time has passed.

15:17

Today's Taiwanese, particularly young

15:19

Taiwanese, have no real affinity with

15:21

the mainland, controlled as it is by the Chinese

15:24

Communist Party. They have a lot of affinity with

15:26

the very successful and vibrant democracy

15:29

that they have come to enjoy

15:31

there. And so I think a big

15:33

problem from the vantage point of Beijing

15:35

is that Taiwan is drifting away

15:38

in ways that nobody in the 1970s foresaw. I

15:40

think many people in the 70s thought it would only

15:43

be a matter of time before Taiwan was

15:45

folded in to the embrace of the mainland.

15:47

That is not happening. And the Chinese haven't

15:49

been able to devise any political

15:52

way of stopping this divergence

15:54

from happening. And I'll say one final

15:57

thing that is very important to understand.

15:59

Xi Jinping has broken

16:02

with convention by extending his

16:04

time as president, as leader of

16:06

the CCP and of the Chinese state.

16:09

Why? His main argument for having

16:12

that extension of term was

16:14

Taiwan. Xi Jinping has said

16:16

to those close to him, and it's pretty

16:19

clear from public statements too, that he

16:21

regards bringing Taiwan

16:23

under the control of the CCP as

16:26

the keystone, capstone, the crowning

16:28

achievement of his career,

16:29

the reason that he's staying

16:32

in power for longer than his predecessors.

16:34

So it's a very high stakes issue

16:36

for him. And we of course, in

16:39

turn have made it a high stakes issue for

16:41

us. The more unambiguous we are about

16:44

our commitment to Taiwan, the more

16:46

of a problem that is for Xi Jinping. So I

16:48

just gave you a scenario under which we could sort of diffuse

16:51

it all and turn our heads and let it

16:53

all go away. And you said, no,

16:55

no, no, no, no. Taiwan is not at all like

16:57

Hong Kong. And also Peter may

16:59

bear in mind that on polling, Americans

17:03

now care about this issue way

17:05

more than they used to. Yes. The

17:07

Chicago Council did a poll in 2021 that showed

17:09

that for the first time more than half of Americans

17:12

thought that if the Chinese moved

17:14

against Taiwan, the US should deploy

17:17

its military in response, 52%. Okay.

17:20

So that brings us to this question of Xi Jinping

17:23

is now

17:24

in beginning his third term

17:27

of eight years. Is that, have I got that right? Wait.

17:31

Is there, is there, no, that

17:33

can't be right. He's not term limited because he gets to

17:35

do more or less whatever he wants to do. But

17:37

there is an expectation. Five years.

17:40

Five years. Five years.

17:42

Okay. Single digit number of years. However, let

17:45

me quote to you from this leaked memorandum leaked

17:48

last year, Air Force General Mike Minahan.

17:53

My gut tells me, and this is to his own officers, this

17:55

past, excuse me, it was this year in January.

17:57

My gut tells me we will fight in 2021.

17:59

The United States presidential elections

18:02

are in 2024 and will offer Chinese President Xi Jinping

18:06

a distracted America. Taiwan's presidential

18:09

elections are in 2024 and will

18:11

offer Xi Jinping a reason

18:13

to attack. To which you add,

18:16

he's now in a single digit third term,

18:20

we're now talking about one, two, three,

18:22

four, five, six or if Minhan

18:24

is to be believed two years or less.

18:27

Does it feel that urgent to you? Yes.

18:30

I'm still adjusting to the idea that we're in the mountain passes

18:33

of a Cold War and now you're saying, wait

18:35

a moment, there could be, we have to make a decision whether

18:37

to defend Taiwan

18:39

in some small number of years. Well,

18:42

I think Cold War two is happening faster than

18:44

Cold War one. Let me try and illustrate the point. When

18:48

George Orwell first used the

18:51

term Cold War in 1945, almost nobody

18:53

got

18:56

the point. Orwell's extraordinary

18:58

essay about the future in

19:01

which there would be nuclear superpowers nailed

19:04

it. He defined Cold War as a peace that

19:06

is no peace and predicted that

19:08

nuclear armed superpowers, he said there would be

19:10

three, the United States, the Soviet

19:13

Union and China. And he said in

19:15

this world, this is of course is an anticipation

19:17

of his great novel 1984, there

19:20

would be this permanently armed

19:23

peace that is no peace. It

19:25

took years for Americans to get the point. When

19:27

Winston Churchill gave the famous Iron

19:29

Curtain speech in Fulton,

19:32

Missouri, the New York Times was highly critical

19:34

of the speech and accused him of being a warmonger.

19:37

Most Americans didn't get it until

19:40

North Korea invaded South Korea

19:42

in 1950. And that's

19:44

the analogy I'd like to suggest to you

19:47

with Ukraine. The war in Ukraine is

19:49

the first hot war of Cold

19:51

War two. And just

19:53

as the Korean War was the first hot

19:55

war of Cold War one, it's the

19:57

moment of revelation in which people

19:59

in the United States begin to see

20:02

that this is serious. Remember,

20:05

Putin would not have invaded Ukraine

20:07

without a green light from Xi Jinping. He

20:10

would not still be able to prosecute his

20:12

war without the substantial economic

20:14

support he gets from trade

20:17

with China. So I think we should imagine

20:19

the Korean War, Ukraine War

20:21

analogy. That gets us to the 1950s.

20:25

That's the sort of early 50s. And the war is going

20:27

to play out pretty much like the Korean War did.

20:29

A year of really serious fighting and back

20:31

and forth and then attrition and it all gets

20:34

bogged down and stalemate. And then

20:36

eventually you start some kind of armistice

20:38

process, you never actually get to peace. I

20:40

could see all of that playing out. But

20:42

what we're talking about with respect to Taiwan

20:46

is the equivalent of the Cuban missile crisis,

20:48

which happened as you know, Peter, in 1962. I

20:51

think we could get to 1962 a lot

20:53

faster than they did in Cold War

20:56

I. And we'll call it the Taiwan

20:58

semiconductor crisis.

20:59

And here's the interesting thing about this crisis.

21:02

I do not know if it happens next year,

21:04

if it happens in 2025, if it doesn't happen until

21:08

2028, but it is highly likely to happen this decade.

21:11

The variables that are crucial here are the

21:14

Chinese are not ready

21:15

militarily to achieve

21:19

a successful amphibious invasion. They

21:22

would be taking immense risk if they did that now. And

21:24

I don't think they will. I think they're in a position

21:27

to blockade the island, but I'm not

21:29

sure they're ready for the consequences if

21:31

we decide to run that blockade

21:34

and take them on. So I think

21:36

they're not quite ready for prime

21:38

time, but they cannot wait indefinitely. Why?

21:42

Because to go back to our earlier discussion,

21:44

every passing year

21:45

gives the United States time to

21:48

get Taiwan ready to defend

21:50

itself. It's not now, but we know

21:52

that this is the issue and we have

21:55

got a coherent strategy which

21:57

we could execute to make Taiwan

22:00

much harder to invade than it currently

22:02

is. And that's why I think the time frame is

22:05

measurable in single digit years.

22:07

It's not something that Xi Jinping can say,

22:09

oh, I'll take care of it in 2030.

22:13

That is just not an option for him. So

22:17

I return though to the, to the, you're saying

22:20

all kinds of fascinating things about the people of Taiwan.

22:22

I understand that we consider

22:24

Taiwan part of China, China obviously considers

22:26

Taiwan part of China. But what you're saying is

22:29

that whatever this diplomatic,

22:32

I won't go so far as to call it a fiction,

22:34

but this diplomatic form of words,

22:37

even as we now know,

22:41

as a result of the Russian invasion, Ukraine

22:43

has become a real nation. It exists

22:46

in people's minds. They now think of themselves

22:48

as Ukrainian in a way that may have been ambiguous

22:50

before.

22:52

Taiwan has some kind of entity.

22:55

I don't know that the word to use is

22:57

nation, but in the minds of the Taiwanese

23:00

people,

23:02

they are not Chinese. Question

23:05

then,

23:06

why aren't they spending more time

23:08

and resources? Why aren't they spending quite a lot more

23:10

resource making themselves harder to take on?

23:13

This is the piece of the puzzle I cannot, the

23:15

president Xi comes over here. She

23:17

seems courageous. She insists

23:20

on democracy, insists on free markets, takes

23:23

that meeting with Kevin McCarthy knowing that it's going to

23:25

cause all kinds of mayhem back at home,

23:27

and indeed it does. And yet

23:29

they only spend 2.1% of defense. The

23:32

strategist Edwin Lutvak says apparently

23:34

the Taiwan strategy is to let

23:36

us defend them while their children play video

23:38

games. I mean, this doesn't fit.

23:41

Well, it's worked for Germany. I mean,

23:43

think of all the countries that have been free

23:45

riding on a US

23:48

security guarantee since Cold

23:50

War I. I mean, this is not

23:53

a bug. It's a feature of Cold

23:55

War that the United States is overwhelmingly

23:58

the dominant supplier of security.

23:59

And it's only in a country like Israel

24:02

that discovered the hard way that

24:04

it couldn't rely entirely on the United States. In 1973

24:07

when the United States was, well, we'll kind of help you,

24:09

but first you have to negotiate. I

24:12

think for the Israelis, 73 was

24:15

the moment of truth when they realized that the

24:17

US might be an important

24:19

part of their future security, but they'd

24:21

have to be able to fend for themselves because

24:24

Uncle Sam is not entirely reliable. Ukraine

24:27

isn't that different. Ukraine was not ready

24:29

for prime time on the eve

24:31

of the Russian invasion. It had to scramble

24:35

and only barely survived the

24:37

initial assault on Kiev. It surprised

24:40

everybody by its

24:42

ability to withstand that initial assault.

24:45

But I think you have to... Zelensky made the difference there,

24:47

didn't he? I don't know if it was really old

24:49

Zelensky. I think ordinary Ukrainians... I

24:52

was in Kiev late last year and I was very

24:54

struck by the fact that wherever I went, ordinary

24:56

people were wholly committed to

24:58

resisting the Russian invasion.

24:59

So we don't know how Taiwan

25:03

would respond to a blockade

25:05

by China. We don't know how the Taiwanese would respond

25:08

to an attempted amphibious invasion. Most

25:10

people before February 22nd

25:13

last year would have predicted that Ukraine would

25:15

fold quite quickly. So I don't think what you'd

25:17

assume that Taiwan is somehow

25:19

untypical. It's actually behaving

25:21

quite rationally as

25:23

something, as a country that

25:26

the US has made a security

25:28

commitment to. Having

25:29

traveled in both Ukraine and Taiwan, I would

25:32

say it's hard to imagine the Taiwanese fighting

25:35

as tenaciously and sustaining as heavy

25:37

costs as the Ukrainians have in

25:40

the past year. But there's no doubt

25:42

in my mind that they see themselves

25:45

as on a road to independence. And

25:48

that's something that is quite

25:50

important, I think. There's considerable

25:52

unity actually when you look at Taiwanese polling

25:55

about where the country's future lies. Very,

25:58

very few Taiwanese think it lies.

25:59

as being subjugated by the CCP.

26:02

So

26:04

the Ukraine-Taiwan question here, there

26:06

are some commentators,

26:08

our mutual friend Elbridge Colby perhaps

26:10

is the most notable, who worries

26:12

that Ukraine is a distraction.

26:14

The United States has only so many resources,

26:17

including mental resources. You ask

26:19

the Pentagon to worry about Taiwan and Ukraine,

26:21

and the Pentagon says, and they won't say it formally,

26:24

but they'll say in effect, wait a minute, which is the real battle?

26:27

All right. So Ukraine is

26:29

a distraction,

26:31

possibly. And then others argue, our

26:33

colleague here at the Hoover Institution, Steven Kotkin,

26:35

would argue that the defense

26:37

of Taiwan runs through Ukraine,

26:41

which is it? Well, the thing about cold

26:43

wars is that you don't get to choose.

26:46

You have in fact, what I call

26:48

the three body of water problem, namely

26:50

that you have to be ready to

26:53

go to war, or at least to deter

26:56

your foes in Europe,

26:58

the North Atlantic, you have to be able to deter

27:00

them also in the Pacific and

27:03

East Asia, and let's not forget the Persian

27:05

Gulf. And the US doesn't have the option

27:07

to say, oh, I'm just gonna pivot to Asia, can

27:10

you guys all just behave yourselves

27:11

in Europe and the Middle East, any more

27:13

than it did in Cold War I. The problem

27:16

about Cold War is it's global.

27:18

China can now play globally. It is now

27:21

a player in the Middle East. So the US

27:23

doesn't have the luxury of being able to

27:25

choose, it has to be ready to contain

27:27

Chinese expansion in all

27:30

three at once.

27:31

That's my answer to this question.

27:34

It's not a choice. Now, I think

27:36

Elbridge Corby is right about one thing, and here

27:38

he and I agree entirely. The

27:41

more resources the United States puts

27:43

into the Ukraine war, the more it runs

27:45

down its stocks of

27:47

javelins and stingers and highmars,

27:51

the less it has available for any showdown

27:53

in East Asia, because

27:55

we don't have the military industrial

27:57

complex we used to have.

27:59

That's to say, it takes a long time

28:02

to replenish these stocks. There's

28:05

an extremely interesting report on empty

28:07

bins that came out recently from one of the Washington

28:10

think tanks, pointing out that if there

28:12

were to be a war over Taiwan now,

28:14

we would run out of stuff very rapidly,

28:17

particularly the precision missiles, which are

28:19

such a crucial part of the American way of war

28:22

today. The problem about a war over

28:24

Taiwan, Jim Stavridis makes

28:26

this point very well in a book he

28:28

wrote in the subject, is that it could

28:29

get very big, very fast. A

28:32

limited war over Taiwan is a little hard to imagine,

28:35

just as a limited war over Cuba was very

28:37

hard to imagine. I want to try

28:40

and suggest to you a very important

28:42

part of my analogy. Remember,

28:45

we said Cold War I and Cold War II are not exactly

28:47

the same any more than World War I and World War

28:49

II are exactly the same, but you didn't really

28:52

argue about there being world wars. So

28:54

in Cold War II, there's a very important

28:57

difference between the Cuban missile

28:59

crisis and the

28:59

Taiwan semiconductor crisis, and

29:02

that is that in Cold War II, we

29:04

are the Soviet Union,

29:05

because in Cold War II, it's

29:08

the Communist Party that gets to impose the blockade,

29:10

whereas it was John F. Kennedy who blockaded

29:13

Cuba. We called it a quarantine, but

29:15

it was essentially a blockade, and it was

29:17

the Soviets, it was Khrushchev who had to send

29:19

a naval force to Cuba. That

29:22

was the most risky moment in the whole of Cold War

29:24

I. Only this time around,

29:26

the Buddha's on the other foot. It's China

29:28

that has the option to blockade

29:31

Taiwan. We would then have to send

29:33

a naval force to run

29:34

that blockade. We would

29:37

be in the Khrushchev situation,

29:39

and that's what makes me the most nervous about

29:41

this. I mean, generally speaking, rerunning

29:44

the Cuban missile crisis is a bad idea.

29:46

It was the most dangerous moment, the nearest

29:49

we came to World War III in the whole of the Cold

29:51

War, and in many ways it was just luck,

29:54

sheer luck that it didn't become World

29:56

War III. There was a Soviet submarine

29:58

commander who gave the...

29:59

order to fire a nuclear torpedo

30:02

at US naval surface ships.

30:05

And it was only because by

30:07

chance a superior officer was

30:09

on the submarine and able to

30:12

overrule him that that didn't happen. If

30:14

it had happened, we would have had Armageddon.

30:17

Why would you want to rerun that game

30:19

and expect the outcome always

30:22

to be good? So we shouldn't be running

30:24

the Cuban Missile Crisis again. But

30:26

we certainly shouldn't be rerunning it when

30:29

we get to play the Soviet Union. Because

30:31

remember what happened. In the end, Khrushchev

30:33

had to back down. He

30:35

took a deal with the Kennedy

30:37

brothers. But it wasn't public.

30:39

And so it looked like he'd been humiliated.

30:42

And it was pretty much curtains for his

30:44

career at that point. But it was also a major setback

30:47

for the Soviets. We don't want to put ourselves

30:49

in that position. So my view

30:51

is we have to follow

30:54

through with the commitment we made to Ukraine.

30:56

We are now in a position where we cannot afford

30:59

for Ukraine to lose. Problem is, China

31:02

can't afford for Russia to lose. That's why this

31:04

war is going to keep going. Because both superpowers

31:06

are essentially now backing

31:09

one of the dogs in the fight. While

31:11

that carries on, we have got to come

31:13

up with a good answer to the question, how

31:16

do we deter China from invading

31:18

or blockading Taiwan? Because right now,

31:20

what we've got is some good rhetoric and

31:23

some very poor strategic options. The

31:25

war games don't always turn out very well.

31:28

There was a recent one which strongly suggested it

31:30

would go very

31:30

badly for the United States. I

31:33

think we've got a very short period of

31:35

time to come up with a good answer to that question.

31:37

If we don't, then we run the risk

31:41

of having our bluff cold. I

31:43

mean, right now, we're basically talking loudly

31:46

and carrying a small stick when it comes to Taiwan.

31:48

And everybody knows that that's the wrong way around. All

31:51

right. Step back from Taiwan.

31:53

Three big questions, each

31:56

one of which we could devote an entire program to. I

32:00

keep your answers short. I suppose so. I suppose

32:02

I am saying that, although...

32:05

What do they believe? Couple

32:07

quotations here. Guy Sorman in the City Journal. In what

32:09

sense is the Communist Party of

32:11

China still communist? It represents a Marxist

32:14

liturgy that everyone recites

32:16

and in which no one believes. Stephen

32:19

Kotkin, seated right there

32:21

on this program, quote, we all thought

32:24

they were cynics,

32:25

that they just mouthed communist ideology.

32:28

But some of them believe it.

32:31

Not only do some of them believe it, but

32:33

communism is inherent in the

32:35

system. Okay. So

32:38

even as during Cold War I, there's

32:40

this constant back and forth

32:42

between no, no, no, it's just

32:44

another imperial power. This is another iteration

32:47

of great power struggles. We know

32:49

roughly what to expect of them.

32:52

As against no, no, they're

32:55

communists. They have a fundamentally

32:57

different view of the relation of

33:00

man to government, of man to God,

33:03

of one society to another.

33:05

And their ultimate aim, do

33:07

them the courtesy of taking them seriously. It's in writing.

33:10

They want communism to triumph throughout

33:13

the world.

33:14

We have the same back and forth today with

33:16

China. What do they believe? Well,

33:19

Professor Kotkin is always right. That's

33:22

rule one and rule two is see rule one

33:24

on this issue. Of course, he's right. They are

33:27

Marxist Leninists to be precise.

33:30

I think Xi Jinping in particular should

33:32

be understood both seriously

33:35

and literally as a Marxist Leninist. But

33:38

again, I spent time in China prior

33:40

to the pandemic. I was a visiting professor at Tsinghua.

33:42

I remember having a meeting with the director

33:44

of research at the Chinese Communist Party,

33:46

who's really rather an important figure. And

33:49

he said in the course of that meeting, oh,

33:52

by the way, the standing committee of the Politburo

33:54

is rereading Marx and Engels.

33:58

And so I think you should assume. that

34:00

there is an ideological peace to Cold

34:02

War II. Many naive people think

34:05

that that is not the case because they pay a visit

34:07

to Beijing or Shanghai and

34:10

they see what appear to be business

34:13

tycoons behaving much as business tycoons

34:15

do. They see tower blocks. It looks familiar.

34:19

But you really need to understand that

34:21

behind this patina of

34:24

capitalism, there is

34:26

still a Communist Party in charge. And

34:29

if you look at what Xi

34:29

Jinping says, not at Davos,

34:32

but in Beijing, or just look

34:34

at other Communist Party propaganda,

34:38

it's very striking how ideological things

34:40

have become. He has explicitly

34:43

prohibited the teaching of democracy,

34:45

rule of law, Western ideas like that

34:48

at Chinese universities. In the time

34:50

I was at Tsinghua, there was a noticeable change

34:53

in the atmosphere. It no longer became easy

34:55

for me to talk in the classroom about the

34:57

cultural revolution. So let's later

34:59

rest

34:59

the idea that they're just pretending

35:02

to be Communist, that it's just the

35:05

Chinese capitalist party. That's nonsense.

35:07

And the ideological piece explains

35:10

the belief that there is an inevitable collision

35:13

coming with the imperialist West,

35:15

which I think does underlie

35:18

Chinese strategy. Xi Jinping,

35:20

I think it's pretty clear, has

35:23

told the party and the country to prepare

35:25

for war. I've done a fair

35:27

amount of reading in the kind

35:30

of policy intellectual

35:32

space, the sort of Chinese equivalents of

35:34

me and Stephen Kotkin. They talk

35:36

a lot about China's role to displace

35:38

the United States as the dominant empire.

35:42

So remember, Marxism-Leninism

35:44

is an ideology of conflict. It's an

35:46

ideology with a historical, determinist

35:50

operating system. And that's a reason

35:52

to expect them to expect

35:54

conflict.

35:56

Peter Thiel in his book Zero to One.

35:59

a book that's now a decade old. So I don't

36:02

even know whether Peter would

36:03

restate this today. But

36:06

here's what he said in Zero to One. The Chinese have been

36:08

straightforwardly copying everything

36:10

that has worked in the developed world. 19th century

36:12

railroads, 20th century air conditioning, and

36:15

even entire cities. They might skip a few steps

36:17

along the way, going straight to wireless

36:19

without installing land lines, for instance. But

36:22

they're copying all

36:24

the same. OK,

36:27

this is an important point

36:31

because there is an argument that what we have,

36:34

they outnumber us. You've just explained

36:36

that by at least one measure, their economy is already

36:39

bigger than ours. They outnumber us. If

36:41

they choose to do so, they can outspend us on defense.

36:44

Here's what we have.

36:48

Democratic capitalism,

36:50

which means the ability to

36:52

innovate, we can stay a step

36:55

ahead of them. That's the strategic

36:57

fallback that we have.

37:00

Emily Weinstein of the Brookings Institution. Discussions

37:03

surrounding China as a strategic competitor have

37:05

been shaped by the notion that only democracy can

37:07

promote innovation.

37:09

Every day, China is disproving

37:11

this line of thinking. Close quote.

37:14

They're a lot more innovative than the Soviets

37:17

were because they have a substantial part

37:19

of their economy that is a market economy. There's

37:21

a reason why Chinese internet companies

37:24

are after American internet companies, the world's

37:26

biggest. And there are no European internet

37:29

companies worth talking about. And

37:31

that's because the market operated when

37:33

it came to developing the internet, particularly commercializing

37:36

it. If one looks at the research

37:38

that goes on in fields like artificial

37:40

intelligence or quantum computing, it's

37:43

the US v. China.

37:44

There are no other players in

37:47

this race. They won't even award a bronze

37:49

medal. And that's one of the reasons it's

37:51

recognizably cold war two because there

37:53

are two superpowers technologically.

37:56

Now, I think the Chinese are still

37:59

silver medalists.

37:59

look at vaccines, they utterly failed.

38:02

Despite their boasts in 2020

38:04

that they would develop the vaccines

38:07

against COVID, they didn't, and we

38:09

did. And that's encouraging. And I basically

38:12

agree with your view that our

38:14

system is likely

38:16

to win the innovation race.

38:19

But I have a couple of caveats. Number one,

38:21

we have to mean it. What made Cold War

38:24

I go well for the United States was

38:26

that we understood we were in a technological

38:29

race with a communist superpower

38:31

that was determined to steal our technology

38:34

and ultimately to bury us. When I

38:36

started talking about Cold War II back

38:38

in 2018, at the time when Huawei

38:41

was the talk of the town, I

38:43

elicited initially skeptical reactions.

38:45

I can remember Eric Schmidt's face when I first

38:48

said this at a meeting in San Francisco.

38:50

I said to him, look, the reason I'm saying this is we

38:53

have to understand that we're in a Cold

38:55

War or we will lose it. If we

38:57

have open access research, if the AI

39:00

labs at Google or for

39:02

that matter at Stanford are freely accessible

39:05

by CCP operatives, then

39:07

we're done. So one reason for talking

39:09

about this is to make Americans realize

39:12

that we are in a race and we can't

39:14

simply post it all online and

39:17

not worry. We have to protect

39:20

our intellectual property. They will

39:22

steal it. They have been stealing it because

39:24

as you said, that's the communist

39:26

way. Copy the technology and

39:28

then paste it, whether it's

39:29

electric cars or

39:32

for that matter, giant online

39:35

markets. I mean, what is Alibaba,

39:37

if not an Amazon knockoff at

39:40

some level, but there's a second caveat. About

39:42

half the billion dollar unicorn

39:44

companies created in this country

39:47

since the mid 1990s were founded by,

39:49

that's right, immigrants. Elon

39:52

Musk, not homegrown and

39:54

the list goes on. If we

39:57

don't keep the channel open for...

39:59

legal immigration of very talented,

40:02

ambitious people, we will not

40:04

win the technological race. That's our

40:06

superpower, importing talent and giving

40:08

it capital. That's the real magic

40:11

of the United States. I mean, you can talk about democratic

40:13

capitalism and all of the rest of it. You

40:15

know, the real secret sauce

40:17

of the United States is magnet for talent.

40:20

Here are the resources that you couldn't get

40:22

Elon in South Africa or Canada.

40:25

Only here is it possible for you to build

40:27

those dreams. The United States,

40:29

and

40:29

I blame both the Trump and the Biden administrations

40:32

for this, has really screwed up its system

40:34

of legal immigration. The Democrats seem

40:36

to have decided that illegal immigration will

40:38

do, and we've effectively opened

40:41

our southern border. It's the worst kind of immigration.

40:44

We need to get back to the system

40:46

we had, and

40:48

which really served as well from the 1980s, of

40:51

being the country open to talent.

40:53

If we don't do that, then I think China has a decent

40:55

chance. If we can get the talent

40:58

flowing back into the United States,

40:59

they're done because nobody wants to immigrate

41:02

to China. You just ask people all over the world,

41:04

where would you like to go? It's essentially the United

41:06

States or the most developed European countries or

41:08

the UK. Okay, okay, so that brings me,

41:10

this is another one of these big thing questions.

41:13

Francis Fukuyama writes the end

41:15

of history after the end of the First

41:18

Cold War,

41:19

and he's been misinterpreted in all kinds

41:21

of ways, but there is this notion that

41:23

democratic capitalism is a natural

41:26

end point. Once you get there,

41:29

you've gotten

41:30

to the best kind of society of which we know.

41:32

All right, now the Chinese come

41:34

along, and they seem to have something.

41:38

They seem to have a new model of some kind. They

41:40

seem to have invented a way of combining

41:43

authoritarian central control with

41:46

at least enough free markets to lift hundreds

41:49

of millions of people

41:50

out of poverty to achieve world

41:53

standing, which they did not have just 20

41:56

years ago.

41:57

So in Cold War I, One

42:00

of the dangers, one of the threats to

42:03

us was that the Soviet system

42:06

was intellectually attractive.

42:09

There were communist fellow travelers throughout

42:11

the United States. Sympath, I don't know, I'm

42:14

trying to avoid McCarthyite terms, but they

42:16

were appealing.

42:19

China doesn't seem to be appealing, just as you

42:21

said, nobody wants to immigrate to China. But

42:24

then again, we have the third world, Saudi Arabia

42:26

and Iran just did a deal together through China.

42:30

Do we have,

42:31

China has wealth and it has

42:34

brute power. Does

42:36

it have intellectual appeal?

42:40

Is it creating a new

42:42

model that will be of real appeal

42:46

to the third world? Well,

42:48

we don't call it the third world anymore. We don't.

42:51

What do we call it now? We call it the global south. Thank

42:53

you. A term I rather abhor since hardly any people live in fact in the

42:55

southern hemisphere, but you know what we mean. Look,

42:58

there are two answers to that question. One, there are

43:00

fellow travelers today. There are people who find

43:02

the Chinese Communist Party system attractive,

43:04

many of them the former Marxists or current

43:06

Marxists. Not all of them are. I

43:09

mean, read Martin Jakes' book When China Rules the

43:11

World or read Daniel Bell's recent writing on the

43:13

Chinese system, which he openly admires.

43:16

So

43:16

let's not assume that there are no

43:18

people attracted by the Chinese

43:20

model. It gets worse and worse.

43:22

There weren't that many people actually in the United

43:24

States attracted by Soviet communism.

43:26

You can see that from voting. It's really quite

43:29

a small number of people, even if some of them were

43:31

in influential positions. So I don't think the situation's

43:33

that different, but the really critical point,

43:36

the second point is the appeal of the

43:38

Chinese model in Sub-Saharan

43:41

Africa, in Latin America,

43:43

in the Middle East, in

43:45

Central Asia,

43:46

indeed all over the so-called

43:48

developing or emerging world. If

43:51

you are running a chaotic

43:54

African country, which is

43:57

poor economically, the Chinese

43:59

offer

43:59

you a solution to the crowd control problem,

44:02

which is better than anything yet available

44:05

prior to this time. You have

44:07

surveillance technology. You have

44:09

the A.I. You have the cameras.

44:12

You can nail down

44:14

your civilian population. And the Chinese have

44:16

a second thing to offer you and that is infrastructure.

44:19

You don't have roads. We'll do roads. You don't have telecoms.

44:21

We have Huawei. If you look

44:23

at a map of the world, according to Huawei,

44:26

you can see where

44:29

the Chinese

44:29

appeal is strongest. It's

44:32

it's in the relatively poor parts of the world that

44:34

need to have Huawei's

44:36

hardware because it's cheaper than any other hardware

44:39

and they need the financing that Huawei can offer

44:41

them. The reason I started talking about

44:43

Cold War two was that I saw that map,

44:46

the map of the world, according to Huawei, back

44:48

in 2017 or 18 at a time when the U.S. was

44:51

decided to shut Huawei out and some

44:53

other countries were following our lead like Australia.

44:56

I looked at the map of the world and there were the countries

44:58

that were saying no to

44:59

Huawei. That was the U.S. and

45:02

its close allies. There were the countries

45:04

that were saying yes to Huawei and that was what you

45:06

call the third world. And then there were the

45:08

non-aligned countries were like, you know, can

45:10

we maybe have a little bit of both. That's

45:12

a very Cold War map. As soon as you see

45:14

it, you think, oh man, this looks really familiar. OK.

45:18

What difference does it make?

45:20

Give me give me the world a decade

45:22

from now. If I'm fast forward, Cold

45:24

War end, Cold War two ends. What

45:29

would a Chinese let me step

45:31

back.

45:32

We knew throughout Cold War one

45:36

what life would look like

45:39

if the other side won

45:41

because we only had to look to Eastern Europe.

45:43

You only had to stand at the Berlin Wall in

45:45

West Berlin and look over into East Berlin.

45:48

You only had to look at North Korea versus South

45:50

Korea. It's

45:53

trickier to know what it would mean. Suppose

45:56

they did win. What would a Chinese victory

45:58

look like?

45:59

How would life for your children? Well,

46:02

no, we're talking about something happening so quickly that it's

46:04

not just our children, it's us. How would life

46:06

be different

46:07

if they won? What's at risk? Well, first

46:10

of all, let's remember that there are kind

46:13

of three paths to think about. There's

46:15

the disastrous

46:16

path, the World War III path, where

46:19

we go head to head over Taiwan or somewhere

46:21

else, and things escalate, and before you

46:23

know it, those nuclear weapons are flying. That

46:26

is not to be dismissed out of hand. I think

46:28

one of the big dangers about a U.S.-China

46:30

war is that there would be no stopping

46:32

it from escalating. So that's a future

46:34

we certainly want to avoid, just as we

46:37

wanted to avoid it in Cold War I. And

46:39

there's a second plausible scenario in

46:41

which there's a showdown and we fold. That's

46:43

my American sewers. That's the moment

46:46

when we suddenly discover,

46:46

oh, United States is not

46:49

numero uno anymore. It can't actually uphold

46:51

its dominance in the Indo-Pacific

46:53

region. And I think that is also something that

46:55

would be undesirable. By

46:57

the way, and after the British sewers, after

47:00

the sewers sewers,

47:01

life went on in Britain. Living standards

47:03

continue to rise.

47:05

Well, let's not get carried away here because

47:07

there were significant prices

47:10

to be paid for the end of empire. One

47:12

of the most enjoyable features about

47:14

being an American is that you

47:17

are the issuer of the world's reserve

47:19

currency and the currency that is favored

47:22

in almost all international transactions. And you can

47:24

sell your 10-year treasuries to

47:26

the rest of the world. And the rest of the world will buy them because

47:29

they foolishly think it's a risk-free asset. So

47:32

if you lose geopolitics,

47:34

as Britain did

47:35

in the late 1950s, it's amazing how

47:37

rapidly your currency can depreciate. I mean,

47:39

it's not that long ago that it was $1.7

47:41

to the pound, that

47:44

was during the Lisztros fiasco. It

47:46

was $4.86 when

47:48

Britain's empire was up

47:51

and running. And that's to

47:53

be taken very seriously. The United States

47:55

would find it expensive to be

47:57

a second-tier power.

47:59

is not a convertible currency. But

48:02

as I just pointed out in a new piece for Bloomberg

48:04

Opinion, it is a currency that is being used

48:07

more and more in transactions by

48:10

China's trading partners. We should not

48:12

underestimate how quickly

48:14

the structure of the international financial system

48:17

would change if the US was

48:19

no longer the credible

48:21

number one global superpower.

48:25

But then there's a broader question, which I think is what you're

48:27

really getting at, Peter. And what's the world

48:29

like

48:29

if China is number

48:32

one? I think that's not

48:34

a very agreeable world to live in because

48:37

China's attitude towards individual

48:39

rights, human rights, is on display.

48:41

And you don't need to go

48:44

to another planet. You just need to go and see

48:46

the way in which the Uyghurs are

48:48

treated in Xinjiang, where there are labor camps,

48:51

where perhaps a million people are under

48:53

detention. There are reeducation programs.

48:56

There are policies with respect to fertility

48:58

that could easily be characterized and have been characterized

49:01

as genocidal. So let's not

49:03

forget

49:03

that at the heart of the

49:06

system is the old totalitarian

49:09

devil, the old dark

49:11

force that we once

49:13

understood so well in

49:15

Cold War I, when we had to stare

49:17

the Soviet system in the face and imagine

49:20

what its extension would be like. I'm not sure

49:22

the expansion of Chinese power would

49:24

be significantly different wherever

49:27

it encountered resistance. If

49:29

China is in a position to export its model

49:31

of social control and state surveillance

49:33

to Africa, where

49:36

almost all the population growth is going to be

49:38

for the rest of this century, then a rising

49:41

share of humanity finds itself under

49:43

the great Beijing panopticon.

49:47

So I think we need to regard

49:49

that the future, that the world under

49:52

Chinese dominance, with

49:54

at least some of the frado

49:56

with which we used to regard a Soviet

49:59

dominated world. But can I come to my third scenario?

50:01

Of course. The third scenario, which

50:04

I think is the plausible one, is that

50:06

we find ourselves trying

50:08

to prevent the expansion

50:10

of Chinese power in multiple

50:12

theaters. Containment is not

50:15

the word we necessarily use, because

50:17

that was George Kennan's word, but we're already

50:19

doing it. And it's funny, really, to be

50:21

engaged in a Cold War without

50:24

acknowledging that. But if you look at the Biden

50:26

administration's national security strategy

50:29

that just came out,

50:29

it says we're not in a new Cold

50:32

War, no

50:32

new Cold War. But everything in it

50:35

implies that we're in a Cold War. What is the

50:37

goal that they're currently pursuing? To

50:40

limit China's ability to catch up

50:42

with us technologically by cutting

50:44

it off, that's what the Commerce Department did last

50:46

year, from the most sophisticated semiconductors

50:49

and the people and technology you need

50:52

to make them. So we kind of put the sanctions

50:54

on China ex ante rather than waiting

50:57

for a showdown. That's a really

50:59

important part of Cold War, the

51:01

effort of the leading power to preserve

51:04

its technological leadership by

51:06

preventing the rising

51:08

power from catching up. I think that's the

51:10

plausible future, that we have

51:12

to fight in multiple geographies,

51:16

but above all, we have to fight to maintain our technological

51:18

leadership. That's the future I think we're in. Okay,

51:21

last...

51:26

I'm sorry, before we leave

51:28

that, why don't they call it a Cold War?

51:30

I mean, I just think... I know why. I think of John

51:32

Kennedy's inaugural address, we

51:34

will bear any burden, oppose any foe

51:37

in his ratings.

51:38

It was, in some ways,

51:41

it was beyond bracing, it was thrilling

51:43

to the country to feel that it was defending

51:45

itself and liberty. So why

51:48

not? Why wouldn't Biden go before

51:50

Congress and say, my fellow...

51:52

this is the moment? We will, at

51:54

some point, get a president who does that, but we

51:56

currently remember in that early phase

51:59

of the Cold War.

51:59

when we don't want to face it and

52:02

we think that if we call it by its real name we'll

52:05

somehow make matters worse because we'll upset

52:07

Xi Jinping and I think that

52:09

sense that it'd be rather undiplomatic to call

52:11

it a Cold War in public is very widespread you

52:13

talk to people in the State Department or in

52:15

the European particularly in the European foreign ministries

52:18

and that's what you'll hear oh don't call it that Neil you'll

52:20

really upset them and that's classic early

52:23

Cold War remember how we used to worry about Uncle

52:25

Joe in the period between 1945 and 1950

52:27

that that sense that you got

52:29

from the New York Times reaction to Fulton

52:32

the Fulton yes exactly we're in that

52:34

state of mind so the next president

52:36

I hope will be able to speak more candidly

52:39

about where we are but there's another reason yeah and

52:41

the other reason is that this administration is

52:43

much more interested in going after the enemy within

52:46

the MAGA Republicans whom

52:49

they like to portray as the existential

52:51

threats to America they far rather focus on that

52:53

for political reasons than focus on the threat

52:56

posed by China I think that's unfortunate because

52:58

one of the lessons of Cold War one is our vulnerability

53:02

is our capacity for internal division things

53:04

weren't most wrong in the Cold War when the

53:06

United States was most divided over Vietnam

53:09

in that period from the late 60s

53:12

to the early 70s when the country was really very

53:14

very deeply riven that is not a problem

53:16

they have in China and

53:18

that's I think something to say it remind so

53:20

last question

53:23

the

53:25

last question

53:26

give me a moment to set this up and

53:28

then I'll just toss it to you but

53:30

but I'll need a moment to set it up here's George Kennan

53:33

you mentioned George Kennan a moment ago George

53:35

Kennan writing in 1953 we're not talking about

53:37

the long telegram in 46 this

53:39

is 1953 the Cold War is now underway Korea's already

53:42

happened George Kennan the thoughtful

53:44

observer will find no cause

53:46

for complaint in the Kremlin's challenge

53:48

to American society he will rather

53:50

experience this nobody writes like this anymore

53:53

he will rather experience a certain gratitude to

53:55

Providence which by providing the American

53:57

people with this implacable challenge has

54:00

made their entire security as a nation

54:02

dependent on their pulling themselves together

54:06

and accepting the responsibilities of

54:08

moral and political leadership that

54:10

history plainly intended them

54:12

to bear." Close quote. All

54:15

right.

54:15

You look back at the history of Cold War I and

54:18

you can see at least a couple of moments when the United

54:20

States really did pull itself together.

54:23

One is when Kenan is writing, Truman

54:25

has stopped the Communists

54:28

in Korea. We've invented NATO

54:30

on it goes,

54:32

a moment of enormous diplomatic

54:35

and creativity and ramping up the military

54:37

as well. And then again, we pull ourselves together

54:40

during the 1980s. Okay. So

54:43

the thought there is if we did it before, we

54:46

can do it again. One more quotation,

54:48

this time from investor Ray Dalio who

54:50

has billions of dollars at stake in

54:53

China. And one tends to listen

54:55

to a man who has something at stake, Ray

54:57

Dalio quote. The United States

54:59

is having financial problems. It is having internal

55:02

conflicts and it is facing outside

55:04

challenges. The Chinese are

55:07

earning more than their spending. They have domestic

55:10

order and they've had rapid improvement

55:12

in education, productivity, trade.

55:15

I can't say whether democracy is better than autocracy,

55:20

rather breathtaking admission right there. I can't

55:23

say whether democracy is better than autocracy,

55:25

but China is not like the United States which

55:28

is at risk of a type of civil war,

55:30

close quote. And the argument

55:32

there is

55:34

maybe we used to be able to pull ourselves together, but

55:36

that was a different America. Well,

55:40

before we bow down before our new Chinese

55:42

overlords, let me offer two thoughts

55:44

about those two very different quotations

55:47

from two very different men. First of all,

55:50

Kennan was right. The Cold

55:52

War, at least for a time, united

55:55

Americans. There was nothing

55:58

about which there was remarkably little dissent.

55:59

in the 1950s and right

56:02

through until the late 1960s. There

56:04

was a period of deep division, as I mentioned

56:06

already, and then to an amazing

56:08

extent Americans came back together. And

56:11

even before the 1980s, one reason Ronald

56:13

Reagan became president was that his critique of

56:15

Détente really struck home. I'm

56:17

very, very struck by, as I read my way

56:20

through the materials for Kissinger Volume 2,

56:22

how quickly, by 1976, Americans

56:26

were convinced that Détente had turned

56:28

out to be a mistake over Angola,

56:31

for heaven's sake. It was Soviet and Cuban

56:33

intervention in Angola that caused Kissinger's

56:36

ratings to plummet, and Reagan, too,

56:38

emerges as a national figure, a credible potential

56:41

candidate for the Republican Party. So, one

56:43

reason that I'm talking about Cold War II is that I do

56:45

think this country needs an external

56:48

foe. It really helps. If we don't

56:50

have one, we just fall apart. We just tear one

56:52

another to pieces. And it's very interesting

56:54

to see how in periods in the past

56:56

hundred years when Americans haven't

56:58

had a clear geopolitical

56:59

project, haven't had a clear geopolitical

57:02

rival, tends to be the period when the

57:04

division gets nastiest. It was when

57:06

we stopped believing in the Soviet

57:08

threat and decided in the late 60s that

57:10

we were really the problem. We were really the problem in

57:12

Vietnam, that things became most toxic.

57:15

So, maybe this is just the immigrants I view, but

57:17

I do think my fellow Americans, you

57:19

do play better when there

57:21

is a clear external

57:25

threat. So, let's not underestimate how much that probably

57:27

helps. Notice,

57:29

bipartisanship is back on one

57:31

issue and one issue alone. And that's China. It's

57:34

a quite extraordinary thing that when you

57:36

meet with members of Mike Gallagher's new

57:38

House committee on the Chinese Communist

57:40

Party, the Democrats and Republicans

57:43

agree on a surprisingly large number

57:45

of things, not on everything. But there's a

57:47

real bipartisan sense that

57:50

China is the major strategic

57:52

challenge. So, if it's a polarization

57:55

you worry about, I have good news for you, because

57:57

if you put against China

57:59

in the... title of your bill, it'll

58:01

get through the Senate and the House. That's why we have

58:03

to do immigration reform. As long as

58:05

it's against China, it can be done. So

58:07

that's my first response. We can definitely

58:10

revive the Kennan spirit. To

58:13

Ray Dalio,

58:14

I have this to say. China

58:17

will lose Cold War II if

58:20

we can play a long enough game because

58:23

it's demographics a disaster. You

58:26

know, it's quite possible, Peter, that the population

58:28

of China could half between

58:30

now and the end of the century. It will certainly fall

58:32

by at least a third. The fertility

58:34

rate is well below replacement. And

58:37

that's a sign not of a healthy

58:39

society, I think, but one that has a very

58:43

foreshortened future. Secondly,

58:45

the economy is in deep trouble. Around 29%

58:49

of Chinese economic activity is real estate.

58:51

The whole thing sucks because terror blocks

58:53

for nobody are not a good business proposition.

58:57

Thirdly, I think there's a major problem of legitimacy

59:00

which Xi Jinping understands. And that is precisely

59:03

why they're striking

59:05

hawkish postures in Taiwan. It's one of

59:07

the few things they know they can really mobilize their

59:09

population behind if growth is

59:11

going down to the low single digits. The

59:13

key to Cold War, as you said earlier,

59:16

is that the US as a free society ought

59:18

to out-innovate the totalitarian

59:20

regime. So ultimately, the

59:23

US is the favorite to win a technological

59:25

race if we can avoid

59:28

a reckless showdown when

59:30

we're not ready for prime time in

59:32

the next few years. And this seems to

59:34

be an argument actually for Détente.

59:37

Ronald Reagan made Détente into a dirty word. But

59:39

you know what? Détente served the United States pretty

59:41

well after the Day Battle of Vietnam. You

59:44

couldn't have been Ronald Reagan in 1970. You

59:47

could only be Ronald Reagan in 1980. And

59:49

what had happened in that decade?

59:51

Actually the US had done a lot to recover from

59:54

the disaster of Vietnam. I think we need to

59:56

take our time right now for the same reason.

59:58

Henry Kissinger bought a decade.

59:59

and it was a decade we needed. Absolutely.

1:00:02

Is that correct? Absolutely. And that will be the key

1:00:04

argument that volume two of my biography makes.

1:00:07

That in that time, not only does the US

1:00:10

kind of get over the terrible trauma

1:00:12

of Vietnam, it's also the decade where

1:00:15

Steve Jobs and Bill Gates invent

1:00:17

little companies by the names

1:00:19

of Apple and Microsoft. It's when Silicon

1:00:22

Valley really begins. And

1:00:24

the US starts in the 1970s

1:00:26

to get its mojo back, even if it's not

1:00:29

until the 80s that it

1:00:29

politically manifests itself. And

1:00:32

that's because Dayton bought time. And

1:00:34

I strongly believe we should be buying

1:00:36

time right now and not racing for

1:00:38

a showdown over an island

1:00:41

that is a long way away from the United States

1:00:43

and very close to China.

1:00:45

But that which we must somehow

1:00:48

avoid surrendering at the same time. I

1:00:50

think the lesson from the British experience is

1:00:53

do try and deter your

1:00:55

great power rival. The Britain tried

1:00:57

and failed twice to deter Germany

1:01:00

from starting the World War. And I

1:01:02

think the United States has to learn that lesson.

1:01:05

It's very tempting not

1:01:07

to pay the upfront costs of deterrence. Defense

1:01:10

budget is projected to shrink

1:01:12

below the interest

1:01:13

payments in the federal debt at some

1:01:15

point later this decade on current fiscal

1:01:17

projections. When a superpower

1:01:19

is spending more on debt service than defense,

1:01:22

I think its days are numbered. You have

1:01:24

to invest in deterrence. It's cheaper

1:01:27

than fighting a world war. That's the lesson

1:01:29

of British history. Americans need to learn it.

1:01:32

Neil Ferguson.

1:01:33

Thank you very much. Thank you, Peter. For

1:01:36

Uncommon Knowledge, the Hoover Institution, and

1:01:38

Fox Nation, I'm Peter Robinson.