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Open Thread

By Ian Welsh

On December 20, 2025

22 Comments

Use to discuss topics unrelated to recent posts.

We Don’t Have To Live In Hell

By Ian Welsh

On December 18, 2025

29 Comments

A friend of mine once used the metaphor of “The Lords of Hell” to describe most of the world. There are a few people with lots of money and power, a few billion people who live in constant fear of not having enough, and a billion or so who don’t have enough. There is more than sufficient food in the world to feed everyone, but people go hungry. The entire western world has more empty homes than it does homeless people, yet there are increasing numbers of homeless. It costs less to give everyone health care than it does to “optimize returns” yet sick people go without medicine and help, and the disabled at left to rot with the least possible care in many countries. (Britain has literally stopped paying for wheelchairs for many disabled.)

Over the years my writing has had many themes, but they all boil down to one Ur-Theme.

We don’t have to live in hell. It’s a choice.

We have other choices. There are ways to make the economy work for everyone, and ways that we, the human species, can live well without driving mass numbers of other species to extinction. Indeed, by destroying the environment and extincting other species, we damage the very ecosystem which, long term, makes our own prosperity and well-being possible.

The worst lie in the world is always some version of “there is no other option. This is as good as it can be.”

It has many variants. “Capitalism is the only thing that can work.” “Some people must be homeless and poor for the economy to work.” “We need that oil no matter how many species die.” “People will only work if they’re driven by fear.” “Rich people are job creators”. “Human nature means we’ll always be evil and mean.” “Everything has to be owned by someone because commons don’t work.” (They have worked for hundreds of years at a time.)

Many, many more.

They are all lies. As humans we have an angelic nature as well as a demonic one. One of the most useful books to read in this regard is “A Heaven Made In Hell.” The author studied how people act after great catastrophes. Strangely enough behaviour like looting occurs far less than people helping each other, coming together and fixing things. In fact, people who go through this often find it was heavenly: for once almost everyone is taking care of everyone. Trust and community flourish.

There is great joy in helping. Great joy in care. Great joy in not being scared all the time. The best economies are always full of optimism and hope and have a rising tide that lifts all boats. (Rising tides don’t lift all boats unless we make sure that no boats have holes in their hulls.)

China has, recently, proved this yet again, despite some significant flaws. (FDR proved it before, and he was not the first.) We can take care of each other. We can live without fear that one bad bounce means homelessness, misery and death.

It’s a choice. We have made other choices far too often, but we can choose to be happy, prosperous and realistically optimistic because we take care of each other.

And while my writing often seems negative, this is the hope that underpins my criticisms. There is no point in criticizing something if some law of nature means that it must be so. But there is, despite claims otherwise, no law of nature which says we have to be bastards to each other or to the species we share this world with.

And in that is a genuine hope.

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Revisiting The Ivy League “Super Conformer” Thesis

By Ian Welsh

On December 16, 2025

22 Comments

Back in 2021 I wrote

What the Ivies have tended towards for generations now are “super conformers” — straight As and spent all their time in adult run extra-curriculars. People who spent all their time doing what authority wants. But in the past, they did seek out a few of the very smartest, too.

But, with the triumphal fall of the USSR and the “End of History” the Ivies decided that the system no longer needed smart people and stopped looking for them, they wanted nothing but super-conformers. But every system needs some smart people who aren’t entirely conformist.

This was anecdotal but fit everything I was seeing. Now here’s another data point:

This tracks my interactions with Ivy League grads exactly. Some of the older ones are brilliant, but anyone younger than their later 40s is a drone. Perhaps an intelligent drone, but a drone nonetheless.

People who are super conformers can’t actually be good analysts or creatives, because they can’t think original thoughts or challenge consensus views. And if you can’t do that, you can’t do paradigm changing real things or say “uh, boss, what we’re doing won’t work.”

American elites didn’t want any non-conformists any more. They wanted smart yes-men. So they lost Russia and sold their military, technological and industrial lead to China. They got filthy rich in exchange, in dollars that in 20 years won’t buy anything that matters internationally, leaving them as the equivalent of rich Indians in 1990. Yeah, you have servants and gold toilets and a mansion, but you run a country that doesn’t actually matter, and outside your gilded circle your society is a garbage dump. (If you visited India in those years you know that’s barely a metaphor. It’s just a description.)

What I have seen over and over again thru my adult life is that being right against the consensus is a career killer. (It sure did nothing for my career, but I’ve seen it in plenty of cases so this isn’t just “Ian is a bitter failure!” Heh.) I remember a study looking at media pundits who got the Iraq war right: people in the system already—fired, laid off or never promoted again. Pundits who got it wrong, but with the consensus? Their careers did well, thanks.

Incentives like this are picked up on quickly. You want everyone to be wrong with the elite consensus? You’ll get it! (See Matt Yglesias and Ezra Klein for the centrist pundit versions.)

And this is just as true in most corporations. Look at all the morons jumping on the AI train. Spending trillions rather than just waiting and buying the tech once it’s clear which models work (and probably just using a Chinese open source model.)

Now, of course, this “be wrong with the crowd” incentive has always been most of the case in the sense that being wrong against the crowd would get you fired, and being wrong with the crowd wouldn’t usually hurt your career. But there was a time when the mavericks who were right against the crowd were rewarded and glorified, and that mattered.

Post collapse of the USSR and during the “End of History” era (Fukuyama is the poster boy for “got everything wrong but said what elites wanted to hear so was rewarded far beyond his merits”) elites didn’t want to hear anything but how everything they produced, including their shit, smelled like roses. There was no competition, so they didn’t have to be competent or care about results.

Or so they thought. Turns out that Russia wasn’t down permanently, just for a generation or two, and that China was real competition, but being smart they followed Deng’s prescription “Hide your strength, bide your time” and sucked up to American elites, whispering “send us your industry and we’ll make you rich and you won’t have to put up with uppity American workers and unions!”

American elites got what they wanted. The pure peace of being able to smash anyone who contradicted them, the joy of forcing workers to work for less and less and shut the fuck up about wanting to share in profits, vast wealth, plus two generations of courtiers who were entirely yes men, telling them how wonderful they were. “Oh no my lord, your shit smells like lilacs! Yes my lord, I’d love to lick it up, it tastes like bacon!”

China got what it wanted: the tech and industrial lead and the end of American hegemony.

No leader worth his salt doesn’t have a few people around him saying “you know, Jack, I don’t think this is a good idea.”

It’s been a long time since America had any leaders worth their salt.

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Higher US Profits Are WHY The US Can’t Compete (American won’t re-industrialize)

By Ian Welsh

On December 15, 2025

14 Comments

A couple weeks ago we discussed why money still flows into America: returns are higher.

Generally US assets are highly valued and money tends to flow into the US over other countries. This is because US assets out-perform. The Chinese stock market, like the US market of the 50s and 60s, trades sideways. The US stock market since Greenspan never stops going up: crashes are just speed bumps. Likewise, US housing prices just keep going up, and so on.

On its face, money flooding into the US seems odd. After all, it’s not even close to the world’s most dynamic economy. China is ahead in 80% of technologies, the world’s largest manufacturer, and increasing its lead. In the last 3 years it has increased the numbers of cars it produces by five times, surpassing the US, Japan, South Korea and Germany, all of whom it was behind.

This is a good thing (sort of) if you’re rich and own a lot of assets in the US. It is a bad thing if you don’t, and you’re American. (Europe is similar, but in some ways better for ordinary people.)

American companies just aren’t competitive, because they are always seeking higher profits, which means higher prices, and they actively work to make sure there is no real competition inside the US. Everyone wants to be a monopoly or part of an oligopoly. They want a “moat”, something that means other companies can’t compete with them and government refuses to regulate price gouging.

That produces higher returns, but if you’re going up against a country which has actual competitive markets you’re screwed because they have lower prices and always will. This is the argument for tariffs, to keep American companies competitive in America against cheaper foreign goods. To re-industrialize it would have to be profitable, and it isn’t. The US market is increasingly only America and whatever allies can be convinced to tariff China (which many do, but will they continue to do so?)

Plus, even then, American companies won’t invest unless they can make profits higher than what Chinese companies would accept.

American companies are all financialized. They’re looking for unfair profits, they’re not actually competitive and worse, they don’t want to compete.

OTOH, a lot of Chinese companies are sharks. They compete savagely and they are willing to cut profits razor thin to gain market share.

Additionally the Chinese just move faster, and they have 90% of their own stack in China, while the US has less than 50%. America, ironically, needs China’s help if it wants to rapidly re-industrialize, it needs aggressive anti-trust enforcement, and it needs to change various laws to make financialization far more difficult.

Start with just outlawing PE. Get rid of stock buybacks. Stop pumping the stock market. Ruthlessly go after everyone deliberately raising real-estate, rent, food and other prices.

Slash, in general, all excess profits (like healthcare). Crash the cost structure. Free up consumer demand.

Everything’s being spent on AI, which is increasing energy costs for every other business in the country, and draining investment from anything actually productive. and the US cannot win the AI race, it’s impossible. At best it can get a draw and I doubt it’ll even get that. Chinese AI is open source and uses far less energy, plus the Chinese are building new energy like crazy.

To re-industrialize and compete with China is impossible for the time being. Not in theory, it’s possible theoretically, but it is impossible in practice.

Why? Because NO ONE in power or who can get into power wants to give up their outsized unfair financialized profits.

This is why it’s all Kabuki bullshit. China will keep pulling away. The US cannot compete, because the US refuses to compete. Its only effective policy is to loot its vassals, but that won’t save it.

To a large degree this is why I don’t bother with wonky analysis any more, except occasionally to show it’s pointless. The game is over. The US lost its last chance in 2009, everything since then has just been playing out a game the US cannot win because its elites will never allow the policies necessary to win.

The only way out is thru. The US economy will have to essentially collapse, this type of elite will have to be driven entirely out of power and replaced by industrial elites. Only IF and THEN will it be possible to re-industrialize. That is, best case, a decade in the future, and will start from an even worse position than now.

By then we’ll have even worse climate change and cascading environmental problems.

The next 40 years are going to be UGLY for most of the West.

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Open Thread

By Ian Welsh

On December 13, 2025

15 Comments

Use to discuss topics unrelated to recent posts.

The Rules Of Good Easy Writing

By Ian Welsh

On December 12, 2025

8 Comments

Every writer I’ve ever talked to knows that the best writing is the easiest. You get in the flow and the words spill out. You can barely keep up, and it feels like transcription. It’s a great feeling, too, one of the best in the world.

This is why there were and are so many alcoholic and drug using writers. We all know that the best writing comes when you turn off the filters; when you don’t give a damn and just write. Any anxiety kills the flow and destroys one’s best writing. (Please don’t take this as a suggestion to down a fifth of gin before writing. It’ll destroy you in the not very long run.)

Over the years I’ve read dozens of books on writing. Almost all of them were about craft: how to outline, the elements of style, grammar, story structure, etc, etc… At one point I used to teach essay writing. Only two of those books were about the psychology of writing. The first, which I read years ago, was “The War of Art” by Pressfield. To oversimplify, his advice is to push thru the resistance. It’s a popular book and its helped a lot of people, I think, but it didn’t work for me. If I’m pushing thru resistance, I’m not writing well and I’m not enjoying myself. Defeats the whole damn point.

The second was “Fearless Writing” by William Kenower. Kenower’s take on writing is the same as mine: you want to be in the flow. His approach to resistance is that if you’re feeling it, you know something’s off and your job is to find the effortless flow.

Now if you’re a long time reader you may be thinking “wait, you’ve written thousand of articles. Sometimes multiple articles a day. You have trouble writing?”

Mostly, actually, I don’t have trouble: not in writing writing essays. I know that even my bad essays are “OK”, I don’t fear the audience reaction and I know what I’m trying to communicate (“we don’t have to live in Hell. There are other options.”) But when I write fiction or longer non fiction, oh yes, resistance is there, so much so that I often don’t write.

This mostly comes down to fear of some sort. Kenower has 6 rules for getting into the flow in writing (they’re also, with slight alteration, great for things other than writing.)

I must have a willingness to be surprised.
I must trust where the flow takes me.
I cannot worry about the past or the future.
I must exert no effort, the correct path is always the effortless path.
There is no right or wrong in the flow. There is only what belongs in the story and what doesn’t.
I must not care what anyone else thinks about what I’ve written.

The moment you start wondering what other people will think of what you’re writing, while you’re writing, you will drop out of the flow.

The moment you start wondering “is this good?” you will drop out of the flow.

The moment you wonder “will an agent be interested” you’re out of the flow.

The moment you start second guessing what you’re transcribing while in the flow, you’re sunk. (You do pay attention to resistance. If a word feels wrong, it is wrong. But if your thought is “this is bad” which quickly cascades into “I am bad”, you’re toast.)

The secret of writing that all writers know (and I bet it’s the same for artists and whatever art they practice) is that when you’re in the groove nothing feels better. It’s amazing. This is what drives writers back to the desk, even writers who find nine out of ten sessions miserable: the memories of that one great session.

I think of all the rules the most important is to not care what other people think. It’s OK to think of who you’re writing for, and what you’re giving to them with your story, but not to wonder if they’ll like it or think it’s good. The truth, in my experience, and I have ludicrous amounts of experience with feedback, is that some people will love it and some people will hate it. You may write what you believe is the best piece in your entire career and someone will comment “I don’t get it” and another person will write, essentially, “this is bullshit, and you’re stupid.”

You can’t let that influence you while you’re writing or get to you after you’ve written. If you do, it will destroy your ability to get in the flow, to actually write well, and to enjoy writing, which, after all, is why you write. (Even writers who brag they write just for money are usually full of it. Heinlein said anyone who wrote for any reason but for money was a fool, but he once wrote an entire novel in under a month because he was so inspired. Bullshit that he wrote just for the money.)

If you enjoy writing (sometimes), and you’re having trouble because it often seems so hard to write, you might want to read Kenower’s book. I can’t guarantee it will help, but it’s certainly the book on the psychology of writing which was most helpful to me.

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Government As Helper vs. Government As Regulator

By Ian Welsh

On December 10, 2025

14 Comments

Stumbled across this story about how a Chinese province quickly built a facility based on tech discovered in Europe:

So a *European* startup called IB2 announced *in the US* the invention of an amazing new technology to upgrade low-grade bauxite – previously discarded as waste – into high-grade, which makes it usable to make aluminum and extract critical minerals like gallium, lithium, and rare earths in the process.

In the current context you’d think either Europe or the US would be all over it, right? Wrong. Somehow the first facility that startup ended up building is in Shanxi, China – built in 10 months flat (which, as you can guess, is almost impossibly fast)…

…How? Why? Speed and efficiency. According to the founder and CEO of IB2, Romain Girbal, they received “massive support” from the Shanxi government and were able to move at insane speed. As he puts it: “You could never go that quick anywhere else in the world – only in China. It is unique.”

And no, they didn’t do it by trampling on environmental regulations which, contrary to popular belief, are now actually quite drastic in China. As Girbal puts it: “Building a unit in China is very regulated – environmental and dangerous materials [are subject to] heavier regulation. Of course we followed everything but we had the support from the Shanxi province to help us move forward. Sometimes, being a foreign company, things can be slow with communication issues. When there were sometimes slowdowns, they were here to help and to push.”

The difference here is simple. China has regulations, and the government helps companies meet them. The government wanted this facility so they helped WITHOUT breaking the laws. Here in the West, we’d give them a tax break, and maybe we’d say “it’s OK to break the law this time.” That’s not what Shanxi did.

I am reminded of how US tax authorities built an auto-filing system which filled out tax forms for people, and helped them thru the process where it couldn’t fill them out. Unfortunately there’s a big business doing that already, so Congress, this year, forced the IRS to shut it down.

What the IRS was doing is helping people obey the law, but that threatened TurboTax’s profits, so…

This is how the Russians were able to ramp up weapons production so fast (or part of it.) They made it a priority and the government helped firms.

Safety and environmental regulations exist for good reasons. Most firms will cut every corner they can to make a profit, and those few with ethics will lose to those who say “who cares how many kids die of asthma due to pollution?”

BUT a properly run government doesn’t just make regulations, it helps firms meet those regulations. They aren’t, or shouldn’t be, meant to slow things down, but to make sure corners aren’t cut which will hurt consumers, workers or just the general population.

In most of the West regulators exist to say “no” and to ask for another report. They don’t much care if the business succeeds or not. In China (and, actually, in America before 1980 or so) governments want business to succeed so they help, but they also don’t want businesses to shove their negative externalities onto workers or citizens, so they also make sure they can meet the regulations intended to protect people.

As we’ve noted before, the US couldn’t do this if it wanted to, because contrary to propaganda, the US doesn’t have a ton of federal bureaucrats:

When you consider how much the American population has grown, you can see that the number of bureaucrats per capita has actually dropped significantly. In 1970 (which had about the same number of federal workers) the population was 205 million. Today it is 343 million. Most of that has been outsourced to contractors. Contractors who, of course, cost more than just doing it in house.

A friend of mine is in his early 80s, and he once told me how after Reagan came into office, the local Small Business Administration office, which had been very helpful to him in running his small accountancy business, got rid of half its employees and those who remained were no longer allowed to help as much.

Properly run nations want business to succeed and help them, but they don’t do it by letting them dodge regulations or cutting them for them, they help them by guiding them thru the process of meeting the regulations, and provide other aid as necessary to get the business going.

Once that was us. No more.

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The Loss Of American Dollar Privilege Is The Second Most Important Factor In US Decline

By Ian Welsh

On December 9, 2025

16 Comments

Dollar privilege: everyone using the dollar for trade, and the US controlling the system that moves currency around the world is important. When it goes away, and it will in the next five years, I’d guess, the US will take a huge hit to its ability to command the world’s resources and will lose most of its ability to sanction anyone outside the US vassaldom area. (And the vassals will find it easier to leave if they choose.)

But to see the loss of dollar privilege as primary is a huge mistake. It’s downstream from the only thing that really matters: actual national capacity.

Industrial output, tech, secure resource availability (people, food, energy, rare earths, oil, uranium, etc.)

Fundamentally everything flows from having the most industry and the tech lead, combined with enough resources to make use of that industry and tech lead. Dollar privilege happened because after WWII the US controlled over 50% of the world’s manufacturing ability and was the most powerful non-Soviet state in the world. As such, in a cold war situation, it took charge and created a “free” world in the image it wanted. That certainly included controlling money and money flows, and if you wanted or needed anything you either had to get it from the US and over time its allies (Europe, Japan, South Korea, Taiwan) or from the USSR. When the USSR went away, the US was able to go hog-wild with sanctions, because there was not alternative to using their system and buying from them and their allies.

Now there is. Almost everything you want you can get from China, Russia or some nation outside the “West”. There are exceptions, but they are small in number and that number is decreasing every year. It won’t be long before China delivers satellites to orbit cheaper than the US and had domestic jets that don’t have to buy jet engines (one of those last things) from the West. And hey, virtually everything the Chinese sell is cheaper than if you buy it from the West.

But this is not just about civilian stuff. The fact is that China’s military tech is now more advanced than America’s in most areas. Better missiles. Better drones. Better jets. On top of that they have far more capacity to build ships and drones and missiles and weapons and ammunition than does the West.

Industry/tech (and the resources to use them)=military power. America had a tiny army before WWII, but was able to ramp up seemingly overnight because it had more industry than anyone else. There is zero possibility of America winning a conventional war against China. Zero. Cannot happen. The last chance of doing it was a “resource choke” but that can’t be done now because Russia isn’t going to cooperate. It required Russia as an ally.

To return to our initial point, dollar privilege is a lagging indicator. You get currency domination after you’ve already won, and you lose it after you’ve lost. Once you are no longer the world’s leading industrial and technological state you will lose it, the only question is when. America could have kept it for quite a long time if America’s leaders hadn’t abused it with constant sanctions because while currency privilege has advantages it’s also damaging to the actual productive economy of whoever has it and China is going to great lengths to avoid this.

But as it stands everyone with sense wants out, so the US will lose dollar privilege soon thru most of the world, without, if China can manage it, China creating Yuan privilege. America may retain it in relation to the usual vassals: the anglosphere, Japan, South Korea, Taiwan and Europe, but once the alternative exists (and the Chinese and Russians have and are building those alternatives) and has reached critical mass, one by one even the vassals will move to using other systems in addition to SWIFT and will make themselves largely sanctions proof.

This is another “last days of the American Empire” thing, and thank God. Dollar privilege has been used, literally, to kill many millions of people thru the world, and to impoverish hundreds of millions. It will be a great day for every non-American when it ends.

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