Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Tiresome Reminder Of China’s Tech and Industry Lead

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On February 25, 2025

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China has the lead in about 80% of tech fields:

China has a “stunning lead” in 37 out of 44 critical and emerging technologies as Western democracies lose a global competition for research output, a security think tank said on Thursday after tracking defence, space, energy and biotechnology.
The Australian Strategic Policy Institute (ASPI) said its study showed that, in some fields, all of the world’s top 10 research institutions are based in China.

There is every reason to believe this will be nearly 100% in a decade or so. China is now catching up in pharma, for example:

Among the drugs in clinical research worldwide, approximately 35% are original or co-developed by Chinese companies, ranking second globally.

 

Then there’s the universities:

It’s all over but the screaming. The US is, under DOGE, cutting science funding. Oh, administrative overhead needed to be reduced, no question, but you don’t do that by suddenly slashing it 75% or so, that leaves no time to adjust.

Tech and science, as I have tiresomely pointed out over and over again, always moves to the country with the manufacturing floor lead. There is a delay, but it is now past.

Meanwhile, as of 2024 China controls 35% of industrial output, up from 31% in 2022.

China is moving towards the sort of economic and technological dominance the US enjoyed after World War II. It’s that significant.

And notice that the tech and science lead is accelerating.

Everything in geopolitics, economics and trade needs to take this into account. Nothing is more important except ecological issues.

People talk about a multipolar world, but what is actually happening is a new cold war, with the American side weaker and more backward. The USSR lost not because of some mythical inferior system, but because it started behind and stayed behind, with less population and fewer resources. It competed in some techs for a while, but was never able to establish a sustained lead in any significant number.

People wonder why I suggest most countries should be cutting a deal with and at least slightly aligning towards China. It’s because they’ve already won, and being on the stronger, more prosperous side is superior to being on the weaker, less prosperous side. Further, the sooner countries cut a deal, the better that deal will be.

The US is flailing about with the remains of its power, but the closest analogy to its position is Britain in 1918. The Empire still exists, but everyone with sense can see that its days are numbered. The analogy isn’t perfect, there was no Great War, and America is a continental power, but the same power overhang without the ability to sustain exists.

This informs everything: the US withdrawal from Europe, which is underway. The French being kicked out of Africa, because China can supply everything they need. America’s attempts to cannibalize its vassals for as much tech and industry as they can get, and so on.

America’s currently pressuring Taiwan and TSMC to give them their 2nm fab tech. 85% of Taiwanese oppose this, but the US is piling the pressure on.

Thing is, in time, it won’t matter. China’s catching up anyway.

America’s burning down its old Empire to try and stay in the game. But its vassals are fools if they cooperate. There is nothing the US can offer at this point which is worth the long term cost of submitting to US looting. This is true of Ukraine as well, by the way, and it appears they’re going to sign a minerals deal with Europe instead of the US, which is not ideal, but at least they won’t be screwed both ways to Sunday.

Disentangling from a flailing declining Empire is dangerous and difficult. But it has to be done. By everyone with any sense. Give America its splendid isolation as it falls into decline, or join it.

 

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Germany’s Merz Is A Moron, But At Least He’s Got Some Guts

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On February 24, 2025

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So, Merz is likely Germany’s next Chancellor. He’s said one good thing:

“My absolute priority will be to strengthen Europe as quickly as possible so that, step by step, we can really achieve independence from the USA.

“After Donald Trump‘s statements, it is clear that the Americans, at least this part of the Americans, this administration, are largely indifferent to the fate of Europe.”

Excellent. The first step in recovery from being a slave, or vassal, is admitting the problem and deciding to stand up.

Problem is Merz is rabidly anti-Russia, pro-Israel and stupid. If Germany wants to re-arm, it has to stop its de-industrialization, and that means it needs cheap energy, which right now can only be supplied by Russia. Then it needs to massively invest in tech and science, because it’s far behind China, the US, Japan and South Korea. Its industry is almost all legacy 20th century industry.

If Europe’s going to re-arm, where it getting the weapons from? The US? China? Russia? It has to have its own arms industry.

Germany’s been doing a pretty good job of moving to electrification, but during the transition it’s going to need cheap oil and gas. It also needs to invest in new forms of nuclear power which are safer and cheaper to provide electrical backbone (and to catch up in tech.)

All of this is going to take a lot of money and forcing Germany companies to stay in Germany and invest in research and new products. That means raising taxes on the rich and corporations, and re-jiggering the tax code to force reinvestment of profits into research and new production.

Merz isn’t the sort of guy who’s going to want to put top marginal tax rates back up to 80 or 90%, end stock options, smash CEO and exec pay, and so on.

Still, at least Merz has got it thru his thick head that America is Europe’s overlord and something should be done about that.

But actually stopping Germany’s decline requires making Russia a trade partner, not an enemy. Same for almost all of Europe. Until Europeans get over their paranoid delusions about Russia, they’re going to continue their decline. Same with China. If they insist on being hostile to both Russia and China, even as the South doesn’t want to do business with them, there is no path to save the “garden.”

 

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Week-end Wrap – Political Economy – February 23, 2025

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On February 23, 2025

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By Tony Wikrent

 

Trump’s assault on the Constitution

Friday Night Massacre in the Military

Joyce Vance, Feb 22, 2025 [Civil Discourse]

[TW: The AP story on Fridaynight’s firing of Joint Chiefs of Staff chairman Gen. Charles Q. Brown Jr. did not include the crucial news that Trump also dismissed all the senior Judge Advocates General (JAGS) for the Army, Navy, and Air Force. In her Civil Discourse substack, Joyce Vance — a former U.S. attorney for the Northern District of Alabama from 2009 to 2017, and currently a professor at University of Alabama School of Law, as well as a legal commentator on  MSNBC — has raised alarms about what all these dismissals mean:]

Is Donald Trump trying to turn the military into a political weapon, just like he’s trying, and at least partially succeeding, in doing at the Justice Department?

….competent military leaders are being dismissed for no apparent good reason.

And that’s the heart of it, why dismiss them? Why on a Friday night? Why so many all and once? And why the Judge Advocates General?

Members of the Judge Advocates General Corps, for instance, respond to legal questions about rules of engagement, targeting, intelligence law, and detainee operations. They are military lawyers whose core functions involve military justice and law of war. They offer advice on questions including what constitutes an illegal order, what is a war crime, what is a constitutional violation. Replacing their leadership with Trump loyalists could have serious implications for how the military reacts in a number of situations, including assisting with mass deportations and policing protests, which they are currently prohibited from doing by the Posse Comitatus Act.

 

Ominous

Josh Marshall, February 21, 2025 [Talking Points Memo]

President Trump has abruptly fired the Chairman of the Joint Chiefs, Charles Q. Brown Jr., and is replacing him with a retired three star general, Dan Caine. This portends a future grave crisis as the President attempts to restructure the military into one personally loyal to him. Caine has not been a service chief or held a combatant command or been the head of the air forces of a combatant command. So basically he’s held none of the assignments which normally precedes elevation to Chairman of the Joint Chiefs….

In its own way equally ominous, Trump tonight fired the Judge Advocates General of the Army, Navy and Air Force. Among many other things it’s the military lawyers who determine what is a legal order and what’s not. If you’re planning to give illegal orders they are an obvious obstacle.

 

The Making of Emergencies

Caroline Elkins, February 16, 2024 [The New York Review]

…On January 20 Trump declared not one emergency but three. The first, applying to the southern border, echoed an emergency he had declared in 2019. This time, much like previously, the president can circumvent congress on multiple issues, including military spending. The second emergency designates “cartels and other organizations” as “foreign terrorist organizations” under the International Emergency Economic Powers Act (IEEPA), typically enacted for sanctions. The third is a “national energy emergency” under which Trump can conceivably bypass a host of legal and environmental regulations that had impeded his promise in his first administration to “drill, baby drill.”

In the United States, as soon the president declares a national emergency—a decision entirely within his purview, typically done through executive order—he lays claim to nearly 150 otherwise dormant statutory powers. In his declaration, he must identify which of those powers he is activating….

Most countries today have constitutional provisions for national emergencies, but neither the United Kingdom nor the United States are among them. Only in the past half-century did both countries pass legislation to narrow and regulate the executive’s power to declare a state of emergency: the US’s National Emergencies Act (1976) and the UK’s Civil Contingencies Act (2004)….

…as I was finishing this essay, Trump took to social media channeling Schmitt’s vision. “He who saves his Country,” he posted, “does not violate any Law.”

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Open Thread

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On February 22, 2025

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Use to discuss topics unrelated to recent posts. No vax/anti-vax.

Understanding DOGE’s War Against The 20th Century

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On February 21, 2025

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To understand DOGE it’s best to start with Reagan. Reagan reduced regulation massively, and where he couldn’t get rid of laws he and his successors just stopped regularly enforcing them. This took steam over time, so for example there was some anti-trust action up until George W. Bush. In fact without anti-trust actions there would be no Microsoft as we understand it. IBM had MS write the operating system for the IBM PC because they had been hit by anti-trust action repeatedly and wanted to avoid it. It’s not like IBM couldn’t write its own operating system

Gates himself engaged in repeated violations of anti-trust law, and most of it was allowed to slide, but eventually the Feds went after him. The case was going badly for him, but George Bush Jr. ordered it shut down.

Generally regulations do impose a cost, and in return the public receives a benefit. There’s also some benefit to corporations, because regulations increase trust. But as time goes by people assume companies are trustworthy, and regulations start seeming like pure cost.

Cut regulations, and you increase profits, it’s often that simple. The decay of trust which loses money takes decades and the profits are now.

Likewise when you cut government workers, the work usually still needs to be done. Contractors take over and they charge more, and usually do a shittier job, if not immediately, then after a while. Here in Toronto where I live, half the garbage collection was given to private enterprise. At first they were cheaper, but within ten years, why, they were more expensive than union work, though somehow the actual workers were getting paid less. Strange that.

Nor is the Federal bureaucracy in any significant way bloated:

The chart above is in absolute numbers, which means the size of the federal workforce, relative to population, has been declining. You wonder why you’re getting bad service? That, plus contractors, is why.

All of this, of course, doesn’t include the fact that Musk was under investigation by multiple agencies. This Grok (his own AI) generated list from February, amuses:

Before the election Musk said:

Billionaire Tesla and X boss Elon Musk suggested Monday that he will end up behind bars if Vice President Kamala Harris beats former President Donald Trump in next month’s election.

“If he loses, I’m f—ed,” Musk told Tucker Carlson of the Republican nominee in an interview broadcast on X.

“How long do you think my prison sentence is going to be?” the world’s richest man quipped. “Will I see my children? I don’t know.”

Perhaps more important is the larger picture of financial enforcement. Musk wants X to be an “everything app”, which includes making it a payment system and, in effect, a bank. Like Crypto-entrepreneurs and many others he wants the profits of a financial corporation without the oversight, including without the FDIC deposit insurance.

Tech bros have spent over 30 years staring at financial elites and seeing how rich they are, salivating for some of that easy money. Destruction of and intimidation of regulatory agencies is what is required to make it truly happen. Remember that Musk and other politically active tech-bros like Peter Thiel made their first bundle from PayPal.

Finance firms have been the most politically powerful special interest group since at least the 90s, but they are being replaced by politically connected tech firms: an industry they helped birth, and billionaires who would not exist without tax and financial law changes spear-headed by Wall Street.

DOGE’s purpose isn’t to cut costs. It’s to open up new profit profit opportunities, attack resisting parts of the deep state and to remove legal risk from breaking the law. That’s all. It’s why the second part of the government shut down entirely was the Consumer Financial Protection Bureau.

The idea, as always, is to end the reforms which ended with FDR’s New Deal and go back to the 1890s. Notice how obsessed Trump is with ending income tax and going to tariffs: that’s a 19th century political economy setup.

Welcome to the new Gilded Age, with even richer oligarchs.

 

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If You Go For The King #2: Romania

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On February 20, 2025

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So, the supreme court of Romania cancelled the previous Presidential election, ostensibly because of Russian interference.

The guy who won last time, however, will probably win the next elections in May. He recently stated:

Westerners don’t seem to get how you do lawfare. If Democrats and/or the deep state were going to prosecute Trump and his associates, they needed to make sure Trump wound up in jail and unable to run for President. The purges which have happened since his re-election are only logical: why wouldn’t he try and destroy the people and the mechanisms used to go after him?

Same thing with Romania. Cancel the election, then don’t lock Georgescu up? Were they smoking their own crack? Did they genuinely think something would change the numbers in the next election?

I think what Pakistan has done to Imran Khan is despicable, but once you break norms and go after someone who normally would be beyond bounds, you have to finish the job, which the Pakistani deep state (military) did: they threw him in prison on essentially bogus charges.

Western liberals are good at foreign coups and whatnot, but they haven’t quite figured out how to use lawfare properly against truly powerful people in their own countries. That, I suppose, is a good thing, but it is rather pathetic and it isn’t a weakness shared by their domestic opponents.

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Understanding the Russian-American Ukraine Peace Negotiations

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On February 19, 2025

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Let’s take a look at this in more detail. First, a summary of Secretary of State Rubio’s

  • Ending the conflict in Ukraine will require “difficult and intense diplomacy” over a long period of time.
  • Ending the conflict in Ukraine will require concessions from all sides and is only possible with their consent, the conditions must be “acceptable”
  • Trump wants to end the conflict in Ukraine fairly and not allow it to resume “in 2-3 years”
  • The EU must be at the negotiating table at some point, as it imposed sanctions against Russia
  • The future of the negotiation process on Ukraine will be determined by the willingness of the parties to “keep their promises”, this will be shown in the coming weeks
  • Ending the conflict in Ukraine will open the way for Russia and the US to cooperate in economics and geopolitics
  • There have been no significant US-Russia contacts for almost three years, the meeting in Riyadh laid the foundation for future interaction
  • Work to restore the activities of Russian and US diplomatic missions could be quite quick
  • Restoring the normal operation of the US and Russian diplomatic missions is the “next stage” of the negotiation process between the two countries, since the US considers it impossible to negotiate with Russia on Ukraine without the normal operation of diplomatic missions

This is all remarkably sensible, actually, and the idea that the two great powers with most nuclear weapons did not have regular diplomatic contacts was always dangerous and stupid.

As discussed here before, the American intention is to make Europe provide peacekeepers and pay for reconstruction, and America hopes to force Ukraine to sign over a large amount of mineral rights, though Zelensky has, quite rightly, so far refused to do so.

Meanwhile, there’s this piece of wishful thinking:

The United States is trying to “break up” Russia’s alliances with Iran, China, and North Korea. This was announced by Keith Kellogg, the US President’s special representative for Ukraine, during a conference in Munich, CNN reports.

Some commenters think that this is what America and Russia want, an end to the above alliances and:

What Putin wants: – No NATO membership (non-negotiable) – 4 oblasts in Ukraine and Crimea, including territories not currently occupied by Russia

What Trump wants: – Break ties with China (non-negotiable) – Join US sanctions on China

I’m reasonably certain ending the alliance with China and joining US sanctions on China is a non-starter, and if that’s non-negotiable, then there isn’t going to be a deal. China, North Korea and Iran all helped Russia when Russia desperately needed help. It is no exaggeration to say that if China had not supported Russia’s economy, the anti-Russia sanctions would have worked, and Iran and North Korea provided weapons and munitions the Russians desperately needed while they were ramping up domestic production.

At the same time as America is trying to cut this deal, Trump is turning on long term allies: threatening them with sanctions and in the case of Greenland/Denmark even saying he refuses to rule out using military force. America’s record of keeping agreements is abysmal.

Over the decades of observing Putin, I’d say that he values reliability more than almost anything else. The Iranians, North Koreans and Chinese are reliable. America is not.

In negotiations there’s a concept known as BATNA: your Best Alternative To A Negotiated Agreement.

Russia’s is simple enough: it’s winning the war. Unless America is literally willing to go to war with Russia, there’s nothing they can do to stop Russia from winning and then imposing a peace after a Ukrainian unconditional surrender.

What’s America going to do, impose more sanctions? The Russia economy has done better under Western sanctions than it did before the sanction regime? Send more military aid? Cupboards are damn near bare. The only real threat it has is to hit deeper into Russia, and that’s a real threat, but since such weapons are aimed and fired by Western specialists, that risks war with Russia.

What can America offer as an ally that China can’t? Only a removal of sanctions. That would be valuable mostly if it meant repair of NordStream and renewal of gas to Europe, but America wants to keep Europe as a captive customer for U.S. LNG (which is twice as expensive).

It’s hard for me to see why Russia would agree to get rid of reliable allies and turn on China in exchange for an agreement from America which Putin has to regard as unreliable. Sure, he’d like a negotiated peace and an end to the war, but Ukraine’s army looks close to collapse and when that happens, Russia will suddenly start taking huge swathes of Ukraine. And “no NATO” is entirely achievable in an unconditional surrender.

Plus Europe’s politics are changing. Parties which oppose hostility to Russia are coming on strong, and Europe is furious at Trump’s actions and the words of his proxies. Right now Europe is still full-on in support of Ukraine, and in its anti-Russian stance, but time is likely to break that unity of hatred.

It’s not that Trump is wrong to want to break up the Russia-China axis. Pushing Russia into China’s camp was one of the greatest unforced errors of post-Cold War diplomacy: one I’ve written about in the past. With Russia in China’s camp, anti-China sanctions cannot work, because Russia is a land-based supplier of the food and minerals and fuel which cannot be interdicted.

But the ship sailed. You can’t undo almost 50 years of anti-Russia policy overnight, because the last fifty years have proved to Russia that America can’t be trusted to keep agreements and, overall, China is far more reliable.

If Russia cooperates against China and America did manage to take out China, who do you think would be next? Who does Putin think would be next?

So if joining anti-China sanctions really is non-negotiable, then these talks will fail. My guess is that it isn’t actually required, and that Trump really wants this war over one way or the other. But if it is, the war will continue.

Meanwhile, restoring proper diplomacy between Russia and America is a good thing. We’ll see what comes of it.

 

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Understanding Canadians Reaction To Trump’s Threats

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On February 18, 2025

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Most Americans don’t understand why Canadians are so angry about Trump’s actions and his talks of annexation.

I think hockey illustrates it well. Back in 2014 the American anthem singer’s mic failed at a hockey game. Canadians finished the song:

Just recently, fans at a Montreal game booed the anthem.

Here’s the thing: ordinary Canadians thought that America was Canada’s friend. They really believed this.

Thus, hearing Trump’s threats and seeing how many Americans back them and how they deride and insult Canada, they feel betrayed.

The opposition to joining the US is in super-majority territory: over 80%. Canadians like being Canadian and think our society and form of government is better than America’s. They know Americans think the opposite, but it never occurred to most of them that America would try and force Canada to give up its sovereignty, or economically attack America.

Of course this is foolishness. America has never had friends, and never will. It’s an antagonistic nation of bullies, with a record of invading and bullying other nations. But ordinary Canadians, like ordinary people everywhere, don’t really think such issues through. Americans are a lot like Canadians and Canadians consume a ton of American media and tended to identify with America.

Personally I’ve always been worried that America would turn on Canada, and since the 90s I’ve pushed for Canadian policy to recognize that. So, if we can avoid an invasion, I’m somewhat pleased that Trump has torn off the mask and shown the barbarian beneath. Even if the political elite is still in denial, it pushes us towards understanding the world more realistically. There is only one country that can credibly threaten Canada, and it’s been that way for as long as Canada has existed. Hell, since before Canada was formed.

Oh, and Americans, America doesn’t protect us from anybody but America. For Canada, NATO is and always has been nothing but an American protection racket. A proper Canadian military wouldn’t be an expeditionary force designed to help American overseas wars: it would be naval and air, with a lot of icebreakers and an army primarily trained for insurgency and to defend against the only country in the world which has ever been a threat to us.

But I agree. Canada should spend a lot more on its military. We just shouldn’t spend it on US tech, as Canadians have begun to recognize:

The United States controls many of the key systems onboard Canada’s new warships, allowing the Americans to hold this country hostage over future upgrades or even the provision of spare parts, defence industry officials warn.Taxpayers are spending as much as $80 billion on a new fleet of Canadian Surface Combatants to be constructed at Irving Shipbuilding.

The heart of each of the warships is the command management system, which controls weapons, radars and other intelligence-gathering equipment.

Originally that high-tech system was supposed to be Canadian-made and under the full control of the Canadian government.

But that was switched out for made-in-the-U.S. technology called Aegis, allowing the Americans full control and oversight over the supply of parts, modifications or future upgrades, industry officials confirm.

“This is what happens when you exclude Canadian companies: You find yourself potentially being held hostage,” explained Alan Williams, the former procurement chief at the Department of National Defence. “We don’t control the (combat management) system; the Americans do. Who knows what they are going to demand from us?”

Other Canadian defence industry officials acknowledged the same concerns. They asked not to be named as they did not want to jeopardize ongoing contracts with the federal government.

You don’t make your military dependent on the good will of the country that is the primary threat.

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