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A billion-person Chinese superstate. And a thousand million-person network states. China is the exception to every rule. They can afford nationalism, because they are at billion-person civilization scale rather than million-person nation scale. They can actually afford autarky, because they already produce billions of widgets not just for themselves but the world. And they can even afford communism, because in reality they practice capitalism. Finally, China can ride the tiger in the AI Era by just centralizing everything and creating the largest walled garden in existence. The infrastructure already exists, in the form of the Great Firewall and the Chinese Internet ecosystem. So China can just mandate that every WeChat user do whatever proof-of-human that the government wants, and that the top tech companies filter any AI content the party doesn’t want. And then…they’re done. China already has the social and technical infrastructure for centralized control. AI fakes won’t be that big a problem for them. However, for a variety of obvious reasons, the Chinese system will be hard to export globally without encountering enormous resistance. So rather than top-down communist control, the alternative to the billion-person super state may end up being a thousand million-person network states, where everyone has chosen to be there, democratically chosen the government, and voted for that community with their feet, ballot, and wallet. And those are the two poles we can see emerging on the horizon, after the postwar order breaks down and the post-Internet order boots up. Centralization vs decentralization. Top-down vs bottom-up. Scaled up vs startup. Homogeneity vs variety. Nationalism vs internationalism. Communism vs capitalism. Physical vs digital. China vs the Internet. Doing industrial policy is a lot like doing venture capital. It is not simply enough to spend the money. You need to spend it well. And it’s nontrivial to get return on large investments. That’s the problem with Westerners who think just cargo-cult copying the East will work. Because the best capital allocators in the West are in the private sector. Those are the tech founders and VCs. But in the East, some are actually also in the public sector. They have officials who can do math, know engineering, and take calculated risks. The reason is because the entire Chinese system is organized like a giant tech company where you need to post growth numbers at the level of a prefecture to get the promotion to run a province. The Internet is the only Western “institution” (though we don’t yet think of it that way) that has a similar numerically-oriented promotion mechanism. But we call it Seed, Series A, Series B, Series C, and so on. So, the Internet is like an embryonic capitalist, decentralized, internationalist alternative to the communist, centralized, nationalist system that built China. Though both of them have technical/economic/numerical criteria for leveling up, you need to be a Chinese speaker of Chinese descent to level up in the Chinese system…but anyone can level up in the Internet system. In fact, we can enable 100% of the world to become president of a network state, as opposed to the ~2% of the world who is a 35+ year old native-born American, and who therefore qualifies for the presidency of the United States. As an example, the billionaire founder of Calendly is Nigerian was born in Lagos, yet is clearly more competent than the vast majority of elected US-born officials, many of whom are innumerate nepotists of one variety or another. The Internet allows us to source, fund, and elevate dark talent of this kind, from India to Indiana, from the Middle East to the Midwest. At least, the Internet is a prototype of such a system. It currently creates digital entities of enormous scale. It hasn’t yet been printed out fully into the physical world in the form of 1,000 startup societies and network states. But it will be. PS: this book has a boring cover, but is actually quite well written. It explains how China’s numerically-oriented public sector actually works. https://t.co/oXecfpAn7W