There’s this quote from the Italian theorist Antonio Gramsci that has been making the rounds a lot over the past few years. It goes: “The crisis consists precisely in the fact that the old is dying, but the new cannot be born; in this interregnum, a great variety of morbid symptoms appear.” There’s also a looser translation of that last line that you hear sometimes. “Now is the time of monsters.” “We live in a world — the real world, Jake — that is governed by strength. That is governed by force.” “It’s hard to call it land. It’s a big piece of ice.” “We are in the midst of a rupture, not a transition.” Davos last week seemed to be this wake up moment for the world. You then turn on the TV and you watch agents of the American government killing protesters on the streets of Minneapolis. That is the definition of domestic terrorism. That’s the facts. I cannot think of a week when it has felt clearer that not just the old order is dying, but the old order is dead. I cannot think of a week where it has been more obvious that there are monsters. In our last episode, I spoke to the foreign affairs scholar Henry Farrell about what we have done to rupture this order. But for this episode, I wanted to turn to the forward-looking question: What, if anything, is struggling to be born here? Adam Tooze is a historian at Columbia University. He is a thinker and chronicler of crisis. He’s written a number of books about moments when systems fall apart and new orders emerge. The Guardian recently dubbed him the crisis whisperer, and he had a front row seat to the chaos at Davos last week, even moderating this panel with among others, Howard Lutnick, the Commerce Secretary. But Tooze has also been on a personal quest — I’ve been watching and reading along — to try to understand the role of China in all this. And I really think you cannot understand what has been happening in American politics over the past 10 or 15 years without getting a better, clearer sense of the pressure China’s rise is exerting on both the reality of our country, but also the minds of policymakers and leaders. So I want to talk to you about what he saw at Davos and how he’s making sense of this moment. As always, my email ezrakleinshow@nytimes.com. Adam Tooze, welcome back to the show. A pleasure to be here. So watching Davos last week, it felt to me like a moment in which the world was collectively recognizing that some old order of America, some old conception of what America was over and something New was beginning. You were at Davos to. To what degree did it feel like that to you. I think there was definitely a sense of that. I mean, most people in the world see American politics only through television clips, even foreign business people, for instance, they don’t get a lot of face time with senior American politicians. And Davos this year was different because the entire Trump cabinet, if we can call it that, was there. So there was a lot of interaction. And the more interaction there was, the more dismaying and devastating it was. I think for everyone, everyone involved. It was truly shocking. I mean, I have as a historian, I have a thesis that this was the first real global showcase of the Trump administration on the global stage, really doing its thing. Uninhibitedly like lashing out. I couldn’t bring myself to join the horde of people that were queuing up to actually get into the room. So with quite a lot of other people, I sat in the journalist kind of lounge in the conference center, and we all just solemnly sat and watched this crazy speech. Well, thank you very much, Larry. It’s great to be back in beautiful Davos, Switzerland, and to address so many respected business leaders, so many friends, few enemies. And all of the distinguished guests. It’s a who’s who. I will say that. And now you’re used to I mean you go to Davos. It’s one of the places in the world where you can see, politicians stacked up and you can literally do a beauty contest of who can give a speech. And so everyone all day had been rating, wasle of under Leon versus Macron versus the Chinese vice premier versus Carnegie and then this then this. I know by the standards of Trump’s speeches, I think it was pretty routine. Maybe you’re more of an aficionado than I am. The thematic seemed weird. He was very uncomfortable with the script he started delivering, he seemed almost as though he was going to fall asleep. Venezuela has been an amazing place for so many years, but then they went bad with their policies 20 years ago. It was a great country and now it’s got problems, but we’re helping them. Then he kind of got going, did some ranting, came back after the war. We gave Greenland back to Denmark. How stupid were we to do that. But we did it. But we gave it back. But how ungrateful are they now. But the whole thing was just. It just left you. There was no way out after that. After the letter to the Norwegian prime minister the weekend, which I still think we don’t spend enough time on because the letter saying you did not give me the Nobel Prize, the Nobel Prize, which, of course, no. Norway’s prime minister does not manage, doesn’t do. And then now I feel, free from any obligation to think about world peace. And now I’m going to do America first. I mean, even in its own terms. It’s crazy. This, to me, is why what I saw happening there it seemed, very substantive. I mean, Davos was happening in the context of the Trump administration threatening possible military action. Definitely tariffs over Greenland. And to me, it was in part Mark Carney’s speech where another world leader stood up. And rather than trying to placate Trump, rather than trying to soften the edges of it, it’s a negotiating posture. We’re all one Alliance just stood up and said, the old world is over. There has been a rupture Yeah, let me be direct. We are in the midst of a rupture, not a transition. What was Mark Carney saying had ruptured. Well, I actually went back and looked at Carney’s speeches when he was Bank of England governor in the late 2010s, during the first Trump administration. And why that’s interesting is that makes sense of the transition phrase because at Jackson Hole in 2019, the big central bankers gathering because he’d been head of the Canadian central bank, then he did the British bank of England. And what was really interesting. He was describing transition there, which is the world is becoming increasingly multipolar. We need to move away from dollar centricity. There’s a fundamental asymmetry in the world, which is the financial system is dollar centric and the actual real economy isn’t. And so there is a transition. We need to prepare for it. We need to enter into more complex geometries. Much of what he actually ended up saying in Davos in 2026 was prefaced there. So for me, the significance of this speech last week was, folks, it’s been more like an earthquake, right. The transition, if you think of the tectonic plates of the world economy, has Joe, and that is what we now have to reckon with not just the shift which we can all agree on and think hard about, but we need to reckon with this shock, which doesn’t so much consist, I think, simply in America repositioning itself geopolitically and I don’t maybe retreating in various ways from various positions, accepting spheres of power, of division of the World into spheres of power, New Monroe Doctrine, but actually something more. It has something more to do with if you the culture of international community, of International Society. And that’s amongst the violence of the use of force, the use of threats, the bullying, the Thucydides the powerful do as they will and the weak must just simply accept the circumstances that shift and the stripping away of the hypocrisy. That’s the real. That’s the rupture. You called a culture. It struck me what was being described was almost characterological. It was people in a family, people in an organization, in a company saying, dad or the boss or whomever isn’t just getting angry sometimes times know there’s something going on here. Dangerous yeah. And we have to prepare to be endangered. And they’re like, now other bad guys. So one of the really interesting things about the speech is he doesn’t really talk about Trump or America directly. The hegemon, he just talks about hegemons and great powers. And this is crucial. Because to go back to old order, after all, there was the Biden interlude. There were four years of the return of a kind of supercharged retro atlanticism. And what Carney is saying is, oh God, no, that isn’t a world at all. Actually there are. He doesn’t say it, but he clearly means there are three major powers the United States, Russia, and China, who have to be from the vantage point of middle powers, of a liberal disposition regarded as essentially equivalent. They may not in detail be equivalent, but in general they’re equivalent because they all essentially are going to rely on power to get what they want. And that’s what we have to reckon with. You mentioned the Biden interlude. You’re a historian. You covered Biden. You were talking to a lot of people in the administration. How now do you regard what the Biden administration meant in the sweep of the history of this era. I think there were two wings, right. I’m sure you have a more detailed analysis of this than me, but there was the old atlanticism of the president of Nancy Pelosi whose dad did lend-lease in 1941. I mean, it’s crazy. That generation. And then there were the people whose world was turned in 2016 by the loss, Hillary’s loss to Trump and the Jake Sullivan’s, basically, and the Blinken’s. And they converged on this, what I think many of them thought of as a kind of last ditch effort to restore both domestically and internationally. A version of American liberal hegemony. Shall we put it that way. Limited Cold War style, because it no longer encompasses the whole world. This isn’t the 90s, but something like that. And it made a lot of promises. It issued a lot of checks. It couldn’t really cash in the end. It couldn’t deliver the domestic bargains to do, for instance, trade deals. It couldn’t do market access that was just off the table. The only way they could get the IRA done. The big climate bill was by various types of economic nationalism, which offended their allies. So even they were straining to get this done. But critically, the Europeans, notably the Canadians as well, love this. This is like they just got straight back on this bandwagon because it solves a lot of problems for them. If this is what America is going to be, then they don’t have to face a whole bunch of complicated domestic questions about military spending. The promises we could go back. Yes, exactly. America can turn the clock back to what you thought we were. Some idealized version of it was a mega. It was a Make America Great Again, but just nice and positive and liberal and all of that. But the Biden administration had a theory of American power. It’s an older theory. It’s a theory of America as the leader of this international order that is rules based. And to McCartney’s point, sometimes America slips out of those rules. But fundamentally, America’s strength comes out of a structure of alliances that is both dependent upon our power and dependent upon our restraint, and also not just strength, but also in that manifests, I mean, they have a manifest destiny. They were exceptionalist in their own way. They believe America is special in its capacity to do that. And they will endlessly point to the fact that China can’t do that and Russia can’t really do that. And America, there’s something in this is part of the special sauce of American liberalism, the Democratic project, that it may not fully generalize, but it generalizes more than other such projects. How would you describe what the Trump administration’s vision of American power is. It’s much more modest at some level. They don’t believe in manifest destiny at a kind global level. They may have some vision of American greatness and certainly a kind of blunt patriotism. But I had a chat with Ivan Krastev, the brilliant Bulgarian thinker modern politics. And he said, the thing about Trump is he’s not really even a proper nationalist. He doesn’t even really believe it. He’s actually kind of rather put off by the reality of the actually existing America of the present, because they don’t do golf clubs as well as he’d like, and their palaces aren’t as good as the ones in the Emirates. And really, it’s a bit of an embarrassment. So anyway, to get to a more serious kind of vein, no, I think they think of America as embattled. They also have this extraordinary narrative of the United States as the loser in globalization. And it isn’t. I mean, you can break that down after all a Sullivan or so on will tell a story about the American working class as having been victimized. And the Trump people will talk, but it’s not very plausible because that’s not who he in any reasonable sense represents. I had the dubious pleasure of chairing a panel with the CEO of Bank of America and CEO of Ernst young and Rachel Reeves of the British government, Howard Lutnick, the US Commerce Secretary, the key guy behind the tariffs, he in fact referred to himself as the hammer, gleefully the enforcer of the Trump administration. Journalists had the temerity to ask the chairman of Bank of America. It’s like the CEO of Bank of America, sir, do you really can you really agree with the Commerce secretary’s characterization of globalization as having been bad for America. And the obvious answer is, who are you kidding. Like, no one has benefited more. They genuinely seem to believe that in some sense, the American state, because they’re very confused about budgets and who earns what money for where and what tariffs do. And the relationship between the private sector and the public sector is quite blurred in their mind. So I think they think that in some general sense, the vital bodily juices of America were sapped by entering into an openness to the world that extends from trade to globalized universities to large scale migration. And all of those things were kind of a threat to the containment of American power and American wealth. But inside the Trump administration’s worldview, if America’s been the loser in globalization, if our infrastructure sucks, our airports aren’t up to scratch. Our palaces are tacky. Where does power come from. If we were powerful. What would the pillars of that power be. What do they think the structure of the power competition actually is. I mean, I wish I thought that it depends really like there are bits of the Trump team. If you look at the National security strategy, their defense strategy documents, there you get a relatively conventional foreign policy, defense policy establishment read. They do the obvious things. They count up military capacities. They look at overextended lines, they look at supply chains, all this kind of stuff. If you’re trying to characterize the position of the leading figures in the Trump administration, it’s much less obvious, I think. And what was really extraordinary about the speech was that amongst many passages, was that one where Trump, starts going off about the big battleships? These ships are hundreds. Think of that 100 times more powerful than those big, big, magnificent pieces of art that you saw so many times ago that you still see on television. You say, wow, what a force. Hundreds times each. Hundreds times more powerful than the big battleships of the past. Big, powerful artifacts seem to be an important part of their understanding of what power is. I think they believe in industrial production as an indicator, but they’re not even remotely serious about this. Isn’t the Biden administration actually pursuing an industrial policy. I think that was quixotic in the end. But at least you would have to say they were intensely serious about it. These people aren’t like the tariffs are not an industrial semiconductor factories. I mean, there were things that were happening. So you mean the Biden people. The Biden people. And Trump will say the same thing. So one of the things they measure American power by is and it was full of this. As he bounced into the green room, trillion and a half, he started saying, and what it’s about is a twisting the world’s arm to invest in a really large scale in the United States. That’s a measure of power. Like, will people put money into the US because they understand globalization as having drained money out. So they want to bring money back. But could you say that these are people who are really articulating, the AI strategy documents that the Biden administration was organizing itself around. Obviously not. No, they’re not in that game at all. And furthermore, they’re pursuing strategies that seem to be dictated rather more by NVIDIA’s corporate interests to just sell chips to everyone in the name of AI sovereignty than the careful effort by the Biden team to actually map out which chips should go where and who should have them. And this incredibly arcane, in the end, effort to penetrate the supply chains of the modern economy and target the really careful bits. This weaponization of interdependence, which that’s a very long way removed from how the Trump people are thinking about it, who are just using tariffs like these big blunt instruments. So America was at Davos. Our message there was we own this. We do what we say. Oh you mean Davos in general or we just Yeah yeah. But we own the people here I think they definitely like to own the city Yeah the Chinese were Davos too in a very different configuration Yeah tell me a bit about what their message seemed to be and what their configuration was. So I mean, the vice premier spoke, it gives me great pleasure to join you in Davos for the World Economic Forum annual meeting under the theme of spirit of dialogue. It is timely that we listen to each other, learn from each other and build stronger trust with each other. And what was astonishing about it was that, if anyone still speaks pure Davos, it’s the Chinese like. And it’s even more pronounced than the summer Davos that they have in Dalian and Tianjin. And I was like I sit and watch people like Tony Blair. Of course he’s always these fossils of the 1990s show up, and it’s as though you’re in this retro time warp where we’re in intelligent industrial policy, joined up government. All of those buzzwords of the 90s just circulate in Chinese technocratic discourse. I’ve watched the Chinese prime minister no less pause to explain that the units in which he’s giving a GDP number are purchasing power parity adjusted dollars of 2015. Have to understand this number I’ve just given you the unit is in. Is this one because otherwise what I’m saying wouldn’t make any sense to anyone in the room. If you thought I was just using it, purchasing regular currencies, you’d think I was mad. But that is the contrast. It is so, so watching. Ursula Von der Leyen, who’s the president of the European Commission, followed by the Chinese vice premier, was of like a study in contrast, because the Chinese play down their wolf warrior position to do the lovely multilateralist kind of thing at Davos. China advocates a universally beneficial and inclusive economic globalization. We are committed to building bridges, not walls. Multilateralism is the right way to keep the international order stable and promote humanity’s development and progress. And Ursula Von der Leyen, the EU is really structurally dependent on multilateralism is itself. You could say a multilateral institution plays up I’m the European Patriot and we can stand up for ourselves. If this change is permanent, then Europe must change permanently too. It is time to seize this opportunity and build a New, independent Europe. But in fact, they converge. I mean, it’s so astonishing. And speaking to the Chinese and the ones that know Europe really well, they know there are two neuralgic issues in the relationship between Europe and China. It’s a cause it’s the fact that the EV car industry matters much more to Europe than it does in the US. Ironically, historically, of course, Fordism and everything. But America has moved on in Europe. The car industry really is, as the Chinese would say, a bottom line issue. 12 million workers corps about the whole popularising populism, the employment of the working class and the Chinese EV invasion is killing the Germans. That’s issue number one. They need to have some politics around that. And the other one is Ukraine. And Beijing’s alignment with Putin over Ukraine is the wedge, without that, without Ukraine, Europe would not be at Trump’s mercy. It’s Putin’s it’s Putin’s threat by way of Ukraine and China’s willingness to line up both politically and facto on the Russian supply chains just drives the wedge, the wedge in. And if you speak to Chinese who know Europe well in Beijing, they don’t really get it. If you speak to Chinese who know you’re it, well, they will come up to you and say, yeah, I totally was. They’ll say, I spent five years in Munich at the Technical University. It was so eye opening I finally understood they feel about Russia the way we feel about Russia, which is it’s a scary neighbor to have. You need to have a policy. Do you buy the theory of Trump that you sometimes hear, which is that Trump and the people around him are correct in sensing, maybe even in some ways, diagnosing the end of the old era, the weakening of America, the passing of American period, even if they don’t know what to do about it, that they are somehow reflective of something real, even if they are a somewhat pathological response to that thing. I mean, at that level. I think there may be more realistic than some moments of the Biden administration. But, I mean, we have to hold up the Obama administration as the team that really, I think, got this at a much deeper level. And this is also true from a European point of view. If the moment where atlanticism frayed is not, after all, with Trump. It frayed, 2003. There was huge enthusiasm for Obama in 0809, as he came in on the part of some three around Iraq or Iraq, and then 0809 on the part, at least to some Europeans, there was enthusiasm because Europeans also like McCain, he was a regular at the Munich Security Conference. He was their kind of conservative. But then the actual disillusion around the Nsa, the big struggles that were kept below the radar over the eurozone crisis and then America’s very hands off approach to Ukraine already, I think, should have been the wake up call for Europe. And the Obama administration was already thumping the table and saying, guys need to spend more on defense, especially after Ukraine. So this week’s summit is the moment for every NATO nation to step up and commit to meeting its responsibilities to our Alliance. Estonia does it. Every ally must do it. So I think of this as a progression. And so I’m not really going to credit Trump with the original insight that things are shifting. I think this has been if you look at Obama, he already had a very stressed view of the fundamental problems of this society and the limits it imposes on what the priorities of any sensible government should be in a much more coherent and reasonable way, focusing on things like health, for heaven’s sake, maybe that’s what we should really do than Trump will ever do. One thing that I have come to believe is that China has been exerting a much larger pressure on American politics and American Society for much longer at this point than we give it credit for. We’ve conceptualized it in weird ways, or just stealing, it’s all just low wage labor. That’s clearly not been true now for some time. And so when we talk about end of one order. When we talk about transition to another, let’s start before this Trump administration to you, what has China’s role been in. Not just like the world economy, but in America’s changing conception of itself. Yes I mean, I’m finishing a book right now about climate politics. And one of the astonishing things you realize about the Kyoto, the famous 1997 climate treaty which America signs but then famously never ratifies. Is that the main objection in the Senate to the treaty on climate in 97 is not that it’s climate denying climate skeptics who don’t believe the science, it’s that Kyoto exempts China from doing anything about its emissions. And there is literally unanimity in the Senate. The byrd-hagel resolution is literally unanimous that America will not sign a treaty like that. Why Because of China. And if you look at the American domestic politics, this shadow that’s being cast, I think the combination of NAFTA followed by WTO, followed by Kyoto, was already really stressing out American congressional politics in the 90s. And it hangs there such that the Bush administration, which is very, very business orientated, really wants to keep the Dynamo of Chinese growth going has to put a Hank Paulson in there as Treasury Secretary. Why Because he’s like a bona fide China hand. The guys in China all the time, all the way now still and he’s managing this strategic partnership with China. What that consists of is actually tamping down Congress, which already then wants to do protectionist strikes on China because the China threat is there. So I think you’re right. To my mind, it’s a generational, even a long generational challenge for the US, which has been held at Bay by elite consensus around trade and finance and by optimistic assumptions about political convergence. And if you view it from the other side. From the Chinese side, at least by 2003, they already have mapped all this and they are very concertedly pushing back. So what this does is to shrink our sense of the unipolar moment right down. I think it’s much narrower than we generally think. We generally have this kind of idea. We slip over Iraq, and we have a unipolar moment that goes from 89 maybe to 2008 or something like that in the Obama era. I remember a piece, I believe it’s by George Packer in the then in the New Yorker, and it’s about the Senate and the paralysis and sluggishness of the US Senate. I remember Michael Bennett, still a Senator from Colorado, saying in that piece, and I’m paraphrasing him here, but not by much that he sits in the Senate and looks around at all that they are not doing, and he thinks, I wonder what China is doing right now. And I felt in that period and then escalating from there, we can’t build a train. Think about how many trains China is building right now. A sense that our society was becoming sclerotic. And yet you could see this incredible rapidity. Like cities coming up in China, what felt like overnight. Now the thinking is about, from a standing start, how rapidly advanced manufacturing companies can change pace and change what they’re doing. But a sense that China is fast and now we are slow. China makes things. And now we just skim money off of the top that China can govern, even if brutally. And we just argue with each other that fundamental insecurity corroding America’s confidence in itself has actually been around now for quite some time Yeah I mean, I felt it hanging over your book, if I may. I thought we said it explicitly. I say it in the conclusion Yeah, exactly. I felt it in the first page. Yes like I couldn’t wait to get to the conclusion where you said it, because that whole book felt like a question about what happened to the future and why is it that other people are making it. But to go back to go back to your original point, I think this is it’s very interesting, though, when you talk to people in Beijing, they will push back hard on this idea because they will point to two things. Two sources of really extraordinary dynamism in the US economy. One is tech and the other one is fracking. And these are. And the other one, you might add, thirdly would be financial engineering. And these are all zones in which American capitalism unfolds an extraordinary dynamism and doesn’t encounter much regulation or obstacle and is world changing, or at least has pretensions to be world changing. So that’s what you’ll hear in Beijing. What are you talking about. We’re still learning. Well, the answer you often hear about this in America. Put aside fracking for a minute, which has some distinctive qualities, but tech and financial engineering reflects this reality of our system. Now, which is that we move very freely with bits and bytes and very sluggishly around atoms. So the Dan Wang kind of thesis also about we’re very good at lawyering because financial engineering is sophisticated lawyering with maths. Basically you find a legal wrinkle and then you do the math work or the other way around do the math, and then find the legal wrinkle. So I think that seems plausible. And after all, then the Apple Apple designed in California, made in China is emblematic of that kind of distinction. The other thing is, and this is a point that I think about a lot also as a European, is that American politics in its deep fabric is so static, so afraid of change. So you could say, traumatized by the last big change, which was the Civil Rights movement of the 60s. Whereas Chinese government, though the CCP ECCP governs. It continuously reinvents what the party is and how it governs. They have this churning innovation around the cell structure that goes down right into literally to household level. Now, the reason why they were able to do COVID lockdowns in the way they were able to is they’ve built out in private housing estates like you think of this as the heart of the Chinese bourgeoisie. Why is the CCP there. Because the CCP is the beating heart of a large part of the Chinese bourgeoisie. So they’ve managed to continuously innovate. It isn’t just a kind of fossilized brezhnevite static party structure. It’s very dynamic. And as a European, I have to say, there’s elements of the EU system which in all of their frustrated, are also open for change. When for instance, responded to COVID with a really big green and tech stimulus, they had to invent common debt issuance to be able to do that. And broadly speaking, I think it’s healthy for a polity to have to constantly rethink, whereas in the US we did a great big stimulus, but basically it was a simple sugar high because that’s the only thing you could politic, and it’s the only thing you could administratively engineer because it had to go out basically via the IRS or checks something as simple as that. You weren’t able to do the complex governance architecture that the Europeans and the Chinese produced during the COVID crisis. When this goes wrong in Europe, you get the eurozone crisis, but in good moments, it’s politically dynamic in the way that we don’t see in the US. Tony, I that’s in a way too harsh on the US. O.K fair enough for two reasons. One, I think about Donald Trump, who has reinvented an entire political party and is governing in a very different way. But during the financial crisis and after and you’ve tracked a lot of this. I mean, we did some very aggressive things in terms of debt issuance and what the Fed is doing. But I used to say, I think there are zones of innovation and dynamism in the US. Where was the unemployment insurance innovation that should have happened during the COVID crisis. We both know they couldn’t do it, so they ended up just doing checks. Whereas what America actually needs to do is to build a national unemployment insurance system worthy of the name, instead of having this extraordinary hodgepodge where New York has a system that Florida really doesn’t like, that’s unbecoming of 330 million people in an affluent society. But why would you burn the political capital to try and get that done. If you’re the Biden administration, when you’ve got so many other things to do. So, so there’s something strange about this conception of China, because it has moved very fast back and forth in the last couple of years. You just mentioned Biden and the Biden administration, after many years of China hype and China fear, there is a sense that actually China might now be in decline. She is wielding terrible authoritarian power. You see Chinese tech CEOs and startup founders, suddenly disappearing like Jack Ma, who ends up coming back. But you have parts the upper echelons of the Communist Party being marched out of meetings. In fact, just now the other day, we saw the top general functionally defenestrated. There is a sense that China had effective authoritarian government for quite some time. But now the thing that always happens with authoritarian government is happening and the leadership is out of touch, and it’s turning on itself and the capacity to continue governing this very, very complicated state. Well and as a demographics change is going to weaken. And I remember doing interviews with Jake Sullivan and others at the end of the Biden era. And one of their big things they would say is, look, America has never been stronger in our opponents and antagonists and competitors have never been weaker. And all of a sudden literally said, don’t worry about the Thucydides trap because we’re not declining. So we won’t start war with you. If you were going to overtake us and we were declining dot dot. You might very well have reason to be concerned. But since we’re not relaxed, there isn’t going to be a war. This is a rapid change around in the conventional wisdom on how to think about China, which is why you should never trust conventional wisdom on China in this country. But now this is a conventional wisdom. It’s a bear. Should I not. No it’s now that they’re great and they know what they’re doing is now the conventional wisdom. Well not great morally but it’s AI think it’s capacity wise. I think it’s truly difficult for any of us. And I absolutely include myself coming from the West to steady a stable, analytical position on China. And we are torn between a kind of fascination and indeed infatuation with it. And it is, after all, the single most dramatic, transformative socioeconomic transformation in the history of our species, bar none. Full stop in history. And, on the other hand, a kind of oh, but it can’t possibly work because. And you can make the list and I can sit with my liberal colleagues at Columbia, and we can all make the list. And I think we basically need to check all our prejudices at the door. And an even deeper level. I think we need to recognize the fact that what’s happening in China, one way or the other, it’s the big N. All of our history today is small n in terms of sample size by comparison with what they’re doing there. This is the fundamental foundation of their belief in what they call 21st century Marxism is that if politics is experimental and driven, they believe by experience and success and failure, and they right now think they’re succeeding, then doing that in a society of 1.4 billion, raising yourself out from the poverty that they were in 50 years ago to where they are right now, is simply the experiment. This is the actual historical test of all theories about the world. So all of our theories that we have are middle income trap theory. All of this is really just a kind of minor preface. And where do we even get off placing them. Alongside some small European country in the data set where we say, oh, well, you could end up like Italy. Famously, Mao said to the Italian Communist Party when they were talking about nuclear war. There’s nothing in the scripture that says that Italy survives into the 21st century. So I think we have to be willing to be humble, frankly, in relation to this experience and not quickly extrapolate one way or the other, either our disappointments or ourselves and our glamorization of what they’ve done or the converse, namely our scorn, our fear, our contempt, even mistrust of their politics, and turn that into a kind of social, scientific necessity. It’s really difficult to do. There’s no safe space here. To me, it’s deeply analogous to the dilemmas that many progressives faced in the 1930s and 1940s when faced with Stalinism, which in the end ended up being utterly decisive for the history of the World War 2 and the aftermath. The good world that we built. That is the West built. We think good after 45, depended critically on a war fought with huge sacrifice by both Stalin’s Soviet Union and the Chinese. You spent a fair amount of time traveling China in the past couple of years, and as I’ve tracked your commentary coming back from it, and people can hear it in what you just said, I feel like it has been a bit of a mind bending experience for you. Oh, for sure. And I’ve heard you say things the whole prehistory modern industrial organization is just prelude to what is happening there right now. So there’s some way in which I’m watching you try to grapple with scale. That feels very inhuman. You sometimes sound to me like somebody who’s just on psychedelics. Yes I mean, all this summer, I had this moment where I realized, we’re in the position of people watching the pyramids being built, not afterwards. So describe to me what from where you were four or five years ago, the Adam Tooze writing deluge and crashed and your pandemic book. What are some things you saw or some numbers and that have passed through your chart book. What helps you convey the portal your own thinking has gone through on China’s centrality and power, and what it means to absorb that into your view of the world and its order. I mean, when it comes to 0809, it’s just the scale of the stimulus. I mean, you were referring to the electric the high speed rail is built in the aftermath of 0809. That’s when they look back at the stimulus, famously, if you look back at the Obama stimulus, though, it was large. And by historical standards, highly significant, larger than the New Deal. And we think really did make a positive difference. What could you point to in America that resulted from the Obama stimulus. You’d have to be an expert to know in China, it’s a railway system unlike any in the world. So there’s a drama and scale. I think I have this number in my book. They’ve built something like 23,000 miles of high speed rail. While we were failing to build the 500 miles of the California project. And when we say high speed, we’re talking 200 plus miles an hour, and you can sit with a cup of coffee and it will not move like it’s smooth as silk. I mean, the Europeans can do this too, but the China and the Japanese, but the Chinese have acquired their technologies and done it even larger. Then there’s the stimulus of the early Tens, when they built more concrete in three years than the United States in the 20th century. And when you go there, you see it. You see the extraordinary fact that 88, I think maybe 89 percent of all homes that Chinese people today live in have been built since the early seconds of every home, every house like place where people live and reside. All in 30 years, essentially. I mean, there’s also the destruction that’s implied by that. The erasing of the traditional Chinese city, the thirst and the hunger that you see in Chinese tourists when they come to Europe to actually see something old. And then more and more, for me, it’s all about climate and the just staggering speed with which China has begun to build out green energy such that now, and this is The thing that the Biden administration, for my mind, this is the central question. China, by the early 2020s, was in a position to roll out enough solar and increasingly also battery backup to actually get the world onto a climate stabilization track. The Chinese have created the industrial capacity to actually get a key component, not the whole thing, but a key component of climate stabilization on track for the entire planet, and the fundamental failure of Western politics in the face of that is to say, no, thank very much. We’d like to argue about this, that and the other. We don’t really like this too much subsidy, and you’ve got Brian Deese and people like that talking about green Marshall plans, and they’re talking about geothermal engineering and small, small nuclear reactors. And it’s just like, no, in front of your nose, there is the capacity to do about 1000gw of New solar panels every single year. And that’s without us even helping in any way. That’s just the local Chinese effort that’s utterly transformative. That is industrial policy. That’s literally providing what we need to farm solar, electric, solar power for the entire planet. So the analogy you’re making here, you mentioned the Russians in World War two. As people there is no winning World War two without the Soviet Union. Well, there is, but it’s really ugly. And it would not have left us feeling good about ourselves because it would involve nuking a large part of Germany. So you hear the analogy here is to climate. And if you want to quote unquote win the climate change fight, it would require making China central. Well, who knows. But we’re certainly not making a concerted effort to explore other options. And this one is literally the $100 bill on the sidewalk. And we’re heavily tariffing. Well, America doesn’t import any Chinese solar panel. The Europeans, to their credit, take 90 percent of their solar panels from China, because where else are you going to get them from. And they are pushing. And I mean, you speak to Biden administration veterans, and the honest ones will admit that they knew exactly what they were doing, which was retarding America’s energy transition for a political reason, because they didn’t think there was a political bargain to be done any other way. Well, wait, wait, wait, that’s not I think, what they think they were doing. I spoke to one just the other day, and that’s exactly that’s the way they describe it to me is not that they don’t think there’s a political bargain to be made that they actually believed, I think going up to Joe Biden, that it would be losing a key level of geopolitical power to see this to China. That they think there was power in this. You don’t buy that. I think there are two different versions, and it depends whether you’re a more climate centered person or whether you’re ultimately in the Jake Sullivan camp. I totally agree with you. There is the even narrower version, which is that we actually need to compete in this technological space. I think the Jake Sullivan camp had a view that it was more important to maintain power over China than to accelerate the green transition. And they always saw the green transition. They basically got it from Asia too, right. So the idea is you need missions around which to organize policy and motivate coalitions. And this was a great mission. Yes it wasn’t in and of itself, I think if you think about Podesta and people like that who have a much longer track record in the climate space, they’re the people who articulate the trade offs. But they were not the ones. They were not calling the shots. And so this brings me to something I was asking you at the beginning, which is I was asking, what do you think the Trump administration believes power to be based on. And one of the things that I think we can all agree power is based on is energy. They think oil, fracking. But for the Trump administration, it is Petro fuels Yeah hydrocarbons. Hydrocarbons yeah. And for China which is nevertheless doing a lot of hydrocarbons. But it is in the future. I mean you describe them as an electro state. Part of the fight is going to be energy. That’s true on AI, which is going to be rate limited by energy. No matter what you look at. Energy is going to be key here. And one of the things that is so striking to me about Trump is that they talk a lot about energy, but they are kneecapping the energy sources of the future, even as they are trying to increase the amount of oil we have access to. China seems to be doing something else. It’s fundamentally contradictory, and it’s not helped by the concept of energy, which is in practice. We need oil for one set of issues, mainly transport and some petrochemicals. We need gas for petrochemicals, heating and power generation. And then we’ve got solar and coal competing head on in the electricity generation space and furthermore, Americas in this profoundly conflicted position, which is that it’s both a huge oil consumer and a huge oil producer. And so unlike the Saudis, who unambiguously have an interest in high oil prices, the only thing that would dial that down is they’re worried they put their consumers off. America is like betwixt and between. So you unlock Venezuela, quote unquote. And who complains. It’s the shale people that complain because the last thing in the world they need is more oil on the market, which would cut the price even further than it currently is at. So there’s that dimension of conflict and incoherence. And then on the other side, you have the whole dilemma of I is your big play, or just tech is your big play in the industrial policy tech space. The single common denominator is electric power, and it’s just a fantasy to think that gas, let alone nuclear, is going to fill that gap because we can’t get the turbines, the gas turbines quickly enough. So the pipeline, quite reasonably, everywhere around the world, is full of the thing which the Trump administration is trying to anathematize like solar and wind and battery backup now, which is also Affordable. So it’s deeply contradictory. And around the edges you see them shifting. I mean, the times had a rather good report on the way in which a quiet battery diplomacy has actually emerged in the Trump administration, because if you talk to the military people modern army guys, carry 20, 30 pounds worth of batteries, the actual effective operational range of the special forces is largely determined by when they need to recharge their battery packs. So high tech battery technology is just crucial increasingly for every dimension of power. And you can’t really sustain an economically viable battery industry without the big source of demand, which are electric vehicles. During the Biden administration, one thing you began to hear a lot from foreign policy hands was that we should understand the world, a split into an axis of democracies and in axis of authoritarians. And you have this. Russia, China. Then sometimes it would be expanded to Iran, sometimes beyond that even a little bit. Sometimes you would hear North Korea, Syria as well was thrown in at times. So to what degree do you think that tells you something real about China, that it should be understood as an ideologically authoritarian project, and that’s what the alliance with Putin is about. And to what degree is that of self-comforting way for at least American liberals to view the world that is not helping you understand what the incentives are back and forth. It’s definitely an unhelpful way to understand the world because essentially it defines the world in negative terms. The only thing those people have in common is they’re not like us. And so then they must all be the same. And that’s just the profoundly unhelpful place to start from. Is it true that Russia and China align and that they will be hard to break apart. Absolutely but it’s really not a relationship of identity. It’s a relationship more of like a common perception of problem. And I was speaking to a Central Committee Member in Beijing, and he was going on about the Putin Xi relationship. And at some point I interrupted him and said, don’t you think the fundamental thing they have in common is their understanding of 1989 and what happened there. And the conversation stopped and he just said, nodded. O.K, fine, we get it. We’re on the same page. That’s the common thing. Why don’t you describe what that is. So the common thing is that Putin and the Chinese regard the collapse of the Soviet Union as an absolute world historic disaster. Putin has said as much. It’s the most catastrophic, greatest catastrophe that’s happened in modern history. And the Chinese agree. And, of course, the Chinese have a diagnosis of the degeneracy of the Soviet party that goes all the way back to Khrushchev’s speech, where he denounced Stalin’s violence. And this, for them, is what they call historical nihilism, which means a rejection of your own history, even if that history is bitter and violent. The Chinese don’t deny that it was. You can’t just distance yourself in a moralistic way from it. And so Xi Jinping and his cadres are fundamentally committed to this idea that there was a degeneracy inside the Soviet regime that led to that moment in 89 that somebody like Gorbachev, as weak as him, so infected by Western thinking, could be in power and collapse. By contrast, of course, what happened in China is that in 1989, Deng Xiaoping and the cadre around him had in their view, guts to oust the party people that were aligned with the Tiananmen Square demonstrators and do what was necessary. It was a disaster that you ended up in that point, not from the point of view of humanitarian loss of life, but because the party had to turn the guns of the PLA, which is the party’s army, on the people, which you never want to have to do. But it was the right thing to do under those circumstances. And that common understanding of the world and its subsequent consequences unites China and Russia, because what it does is to create the unipolar moment, the increasing unhinging of American power, which runs by way of Kosovo and the bombing of the Chinese embassy in Serbia, and then to 2003 and then on from there, that in their common opposition to that world that emerges from 89, they are deeply, deeply bonded. Beyond that, it’s largely pragmatic. And China has deeply ambiguous feelings about the Soviet Union and Russia. The Soviet Union was, after all, highly aggressive towards China at various points. Mao was very serious in his suspicion and fear of the Soviet Union. So it’s not and no one in the CCP indulges in liberal nonsense about, well, Putin’s the same as us because he’s also not liberal. This is like, does Putin have a CCP 100 party of 100 million people organized in the incredibly powerful cadre apparatus, where there is literally a party official in every single major organization. Of course not. Not even close. Like no one in the world has that. So China is unique and they regard Russia increasingly, I think, as a useful wedge. I don’t think they really, really need Russia’s energy, but it certainly helps to have it there. You were mentioning earlier on, of course, China is hugely advanced in green tech, but it still is a massive it’s the largest fossil fuel consumer we’ve ever seen, mainly reliant on its own coal. But gas and oil are helpful. And if you can get them via Russia, you get them cheap and you get them without Western strings. Not that they would buy from the West anyway. They go shopping in the Gulf and they’re only too happy to provide. But I think that’s the level at which that alliance sits tight. And it’s not a US. They have a sufficiently capacious and coherent and independent view modern history not to need to define themselves as Putin, cause not like America. So if Communist, authoritarian, industrial juggernaut is, rightly or wrongly, the way America often sees China, who’s taken our jobs. How does China see America. I mean, it’s a continuously evolving. So on the one hand, as I was saying earlier, they see strength. And it’s very difficult to persuade them to see anything else. They see strength. They believe America. I mean, this is I mean, I’m speaking from talking to from a sample of one the Central Committee members say top 200 or so type person highly placed in the party structure and think tank organization, deeply convinced that America has its finger in every pie. Deeply convinced of the most conspiratorial views of the Ukraine war like that this is America’s doing, ultimately, and they are orchestrating this to tie the Europeans closer to them and all this thing. And on the other hand, bemused, and they literally said they had a think tank working for the State Council that was trying to track Trump on a daily basis. And after a couple of months in term 2, they gave up and they just used these really crude psychologizing rules of thumb about what makes him tick. And so far, after all, it’s kind of worked well for them. Like, you’d have to say that China has come out of this. By contrast with the disciplined, I would say, highly ideological kind of position the Biden administration was rolling out on China. They’re getting a level of pragmatism and dealmaking that even a tariff level, which is lower than India’s like, they don’t think they imagine that that’s how this would play out for them. Why do you think that is. I would not have imagined the tariff on India would be higher than the tariff on China. I mean, I think there’s always been two theories of a Trump administration, and we saw them both again. I always go back to 2020 because that’s where I think we see the seeds of this second Trump administration. And one is the boss wants to do deals, and he loves doing deals with a big guy with a nice palace. And Xi Jinping ticks the box. He’s the other really big guy. So if you go do a deal with him, it’s the biggest deal you can do by definition. And that’s I really think I mean, it sounds ridiculous, but I think that’s an absolutely fundamental motivation. And we saw it in the phase I deal the last time around. Like utterly crude, bizarre trade, economists can’t even fathom it. It’s like soybeans and pigs. Like it’s bonkers compared to modern trade policy. And then there’s another element in the Trump administration which is more hawkish, more classically neocon say it’s a kind of Marco Rubio group. And then I think there’s a retrenchment kind of JD Vance, let’s get the hell out of dodge, settle back into the Western hemisphere. Military people I know who have been reading these documents in the US that is a struggling to figure this out as well. They can’t quite figure out what the position on Taiwan actually is at this point, but we are not seeing the long range, highly strategic industrial economic warfare, I called it. I still think it’s essentially that the Biden administration was engaged in against China. They really thought they could wonk the hell out of this and figure out which chips not to give the Chinese so that we’d written the AI race. They think they really believe that. Oh, they believe that Yeah and lots of people at the time said, that’s silly because you can’t because people will innovate around whatever a blockage you put there. I think that there. But anyway, that’s a lot of things. But the Trump administration then just come in and be like, here are the chips Yeah, with some chips. And then they argue amongst themselves whether they’ve done a really cunning deal and only giving them the rubbish ones. Well out loud Yeah it’s wild to watch. One of the things I began by asking you was the degree to which Davos this year it’s not that something that happened at Davos ended the old order. It’s more that it was a moment I think when Trump’s performance Carney’s performance, it was a moment of recognition of a thing that had happened. Do you feel that what is coming has shaped there is another order visible, or are we just in a possibly quite dangerous interregnum where nothing is quite structured or stable. I think I mean, I’m on, I’m like, I’m dying on the Hill that we’re not even not even in an interregnum like as an interregnum implies interregnum afterwards, it implies a vision of history, which has this as an ellipse between two. And I don’t see why we would feel that we’re entitled to make that assumption in terms of global financial hegemony to make it more concrete, we have one example of the transition from a British centered model to the US model. Why do we assume that we something follows. You can do these weird things where you extend this back to the Dutch and the Genoese, but I just don’t buy it. Look at the curve on which we think climate politics. Does it look on that curve. Because it’s one way and it’s just going to more extreme levels of disturbance. Like, what if we take that vision of history seriously and link it to the fact we have one instance of a financial transaction that went reasonably well, why would we think that the most obvious way of thinking, what comes next is, oh, well, 20 years down the line will somehow have some kind of New order. I don’t get it. Well, I think the reason people would think it is that there is a desire among many different players simultaneously in a globalized world, to have rules that they roughly understand how to play by. Lots of people have their profits bound up in that. Lots of people have their political stability bound up in that. And so you see it with Mark Carney, in a way. You see it with China, which has wanted things to be fairly predictable, that there is a desire for predictability. What makes Trump and in some ways Putin, but I would say specifically Trump, quite unique as a world leader of a major power is he has no desire for predictability. But most of the global economy and you talk about the Chinese officials who speak Davos better than even the Davos officials now Do they have a desire, as many others do as Mark Carney, going back to his days as a central banker does, to say, well, we got to figure out some way of making the transactions make sense. But, I mean, I like the way you put it. Like, I would definitely think it’s literally desiring thinking like it’s literally based on the idea that there’s some philosophical anthropology that says people need or a sociology that says people need stability. So therefore stability will somehow emerge. Or there’ll be very powerful people motivated to make it. If that’s the level at which you pitch the argument, it’s hard to disagree with. I just don’t know what follows from that. What Carney himself argued back in 2019, in this very interesting Jackson Hole paper, you should maybe link it in the show notes or something. It’s really worth going back to is that it could be the case that a multi-polar order, which isn’t a single order, but is multiple different orders that are overlapping. So very unlike a simple hegemony, more like a kind of mesh could have stability properties that, say, a bipolar order doesn’t have. That’s how he argues in that paper, is that the interests of the future will be best served not by looking for a New unipolar actor or perpetuating a bipolar system, but in the proliferation of networks of stability and ordering. So, when Germans ask me, Germans are really addicted to this order, thinking there’s an even a school of German economics called ordoliberalism. I always try and push back on this and say, if you’re looking for order, you’ll never see it. But if you’re looking for ordering attempts, actions, the pragmatic approach, as you say, it’s all around us already, all the time. So I think that kind of image of the world, I do find a world full of ordering attempts without necessarily any promise that they all add up to a coherent New mesh, and that I actually find almost attractive, because surely, I mean, we have never been in a planet like this before. We have never had 30 or 40 incredibly highly competent nation state players. This is really novel stuff. Given your sense of awe at what China is doing industrially Yeah, right. The speed with which they’re moving, the creation of the electro state they’re building. You do not. Your view of the situation is not that we are in a mechanical transition from an American order to a Chinese order, it’s that I think that’s not just wrong and implausible. It’s also dangerous because it immediately sets the American alarm bells off. If we speak in those terms, that’s what motivates all of the ultra hawkish position. And if that is the option, then this spheres of influence model that maybe some people in the Trump administration approve of may be a third or fourth best alternative to the sixth or seventh worst kind of option, which would be flat out confrontation over this question. No, I don’t see that pervasive influence. Sure individual network efforts. Absolutely Chinese have got these extraordinary visions of ultra long distance electricity transmission wiring up ASEAN in a single electricity system. But it isn’t. It doesn’t add up to global hegemony, to my mind Apart from anything else, simply. I mean, I’m in the business of learning Chinese and that it is not an obvious lingua Franca. It’s not liking this. I mean, American hegemony is in the mid 20th century is an extraordinarily unique and even more the unipolar moment or extraordinary unique formations in historical terms. I don’t see any reason to derive from that, some historical model of where we go next. Then ask a final question what are three books you’d recommend to the audience. So my first is a Chinese classic. Not an ancient classic, but a modern classic. Arguably the first, maybe the first modern Chinese novella. Lu Xun’s “Diary of a Madman,” which is the most extraordinary kind of first person account of the delirium of a person waking up into a world where they begin to convince themselves that it is a world of cannibalism. And it’s a complex metaphor about Chinese society in the early 20th century. Very short, but utterly brilliant and psychologically compelling. My second suggestion is sorry, is Jonathan Chatwin’s book “The Southern Tour,” which is an extraordinary account of Deng Xiaoping’s tour of Southern China in 1992, in the moment when after the repression of Tiananmen square in ’89, he revives the reform and opening up project. So this legendary moment in the economic reform process that has made modern China. And the third suggestion is poetry. I love poetry, I struggle to find time to read novels from start to finish. And I like the compressed power and energy of poetry. And this is by a friend of Berlin friend Ryan Ruby. It’s called “Context Collapse,” and it is literally a poem containing a history of poetry. So it is an extraordinary long form poem in which he in AI was asking about over drinks the other night. Why did he do it. It’s this delirious effort to write in poetry, a history of the form and the collapse of its context in modern culture. It’s truly a tour force. Adam tuss, thank you very much. Thank you for having me.
