Is China hell-bent on a move against Taiwan, or does its saber-rattling not square with a military capability that’s perhaps overestimated? Frank Dikötter, a Hoover senior fellow specializing in the history of modern China, joins Hoover senior fellows Niall Ferguson, John Cochrane, and Lt. Gen. H.R. McMaster to discuss his reading of China’s desire and ability to project power, including its manufacturing capability and its suppression of individual liberties, plus the durability of Xi Jinping’s rule.
Recorded on May 23, 2025.
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>> Donald Trump (00:00):
Let's say China, China, China, China, I have to have my China.
(00:03):
I've been saying China, China, China,China, China, China, China, China, China.
People from China, they love me, China.
[MUSIC]
>> Bill Whalen (00:21):
It's Friday, May 23, 2025, and welcome back to Goodfellows,
a Hoover Institution broadcast examiningsocial, economic, political and
geopolitical concerns.
I'm Bill Whalen,I'm a Hoover Distinguished Policy Fellow,
I'll be your moderator today.
And I am honored to be joined by ourfull fleet of GoodFellows that includes
the historian Sir Niall Ferguson.
The grumpy economist John Cochran3, and
(00:42):
former presidential national securityadvisor, Lieutenant General H.R.
McMaster, Niall, John and H.R.are all Hoover senior fellows.
Gentlemen, we're going to go across thePacific to the other side of the rim and
talk about China today.
And joining us,making his Goodfellas debut,
an individual who spent considerable timein that corner of the world, Frank Dakota.
Mr. Dakota is a Hoover Institutionsenior Fellow and
(01:05):
chair professor of Humanitiesat the University of Hong Kong.
He's the author of a dozen books thathave changed the way the world looks at
the history of China,books we've mentioned on past shows.
And that's why he's here today, to agree,maybe disagree with how our three
Goodfellows view the People's Republicof China, Frank, welcome to Goodfellows.
And I have to ask, as you recently madethe move across the ocean to California,
what do you miss and what don't youmiss about everyday life in Hong Kong?
>> John H. Cochrane (01:28):
I miss so much about Hong Kong, I was spoiled for 20 years, but
I can tell you, to get straight to it,let's not waste any time.
The one thing I missedmost is the ability to
decide whether I wish tobuy Made in China or not.
From the cucumber to my hikingcap down to the washing machine,
(01:51):
in Hong Kong you can make that choicehere in America, you never know.
>> Bill Whalen (01:57):
Well, Frank, welcome to the USA let me begin the conversation,
Frank, in this regard,Donald Trump is an open book.
But he's also, I would contend,a very readable book, in this regard,
he's transactional.
His policy choices, his worldviewinvariably come down, the art of the deal,
the title of his bestselling book.
What about Xi Jinping, Frank,is he an ideologue, is he a realist,
(02:19):
as he looks at the world,is his mindset that wicked,
sinful capitalism is doomedto fall to communism?
As he looks at Taiwan, Frank, is histhinking one of manifest destiny and
reabsorbing a province?
Or is he bases calculations on morerealpolitik view of America's willingness
to fight, what say you, Frank?
>> Frank Dikotter (02:38):
Well, for starters, he's a dictator,
so you don't know much about what hethinks, and that's the key point.
It's not just us, it is number twoin that hierarchy and number three,
four, five, all the way down.
Who knows what a dictator thinks,a dictator lives between wavers,
between hubris and paranoia, andkeeps his thought very much to himself.
(03:00):
But we do know a little bit,we know that he is a Marxist Leninist.
He's a Marxist in the sensethat he is firmly committed
to the state having all power andcontrolling the means of production.
In other words, he sees the world asdivided into two camps, capitalism,
(03:21):
which he abhors, and a socialist economy,over which he presides.
He's a Leninist in the sense that hebelieves in a monopoly over power,
undivided power,no separation of powers there for
you, no freedom of speech,no independent judicial system.
And he's very keen to maintain thatsystem of Marxism, Leninism, and
that's the very premiseon which he operates.
>> H.R. McMaster (03:44):
Hey, what I'd like to ask you, Frank, first of all,
I would just tell of our viewers,read Frank's five volumes on the party.
I mean, make it a project for the summer,it's totally worth it, I've learned so
much from you, Frank, and I just wannaask you to maybe explain to our viewers.
What you told me [LAUGH] years ago,you said, hey,
the problem with ourunderstanding about China.
(04:06):
Is that people treat secondarysources like their primary sources and
primary sources likethey're secondary sources.
Can you talk about your research,what you accessed, and
then how important it is to payattention to primary sources.
Rather than secondary sources when tryingto understand the Chinese Communist Party?
>> Frank Dikotter (04:27):
Yes, I think this is a really good point about history generally
[LAUGH], you should be very carefulof books written by other historians.
Whereas if you dabbleinto a primary source,
say Anne Frank when I was young,you learn a great deal about what
happened during the Second World Warright away at a very young age.
(04:49):
And this is very true about the PRC,I spent 20 years in Hong Kong, and
that's where all the theoriesabout China come to crash.
That's where you encounter realities,Hong Kong, now,
it doesn't take a lot of work,it is extraordinary.
For instance, if you simply openthe pages of the the People's Daily to
(05:09):
see the extent to which you will encounterXi Jinping's image, Xi Jinping's sayings.
Articles about Xi Jinping, the cultof personality is splashed over every
newspaper andall you need to do is have a look at it.
Here's something else you could do,
you could actually listen to what the mansays rather than rush to the bookshelf.
(05:32):
And write the latest bookabout some China expert of
which there are a greatdeal more than plumbers and
electricians from what I can tell.
And what does the man say,well, for instance, in January,
he said very clearly, we mustuphold the four cardinal principles
(05:54):
of the People's Republic of China.
The four cardinal principlesthat were inscribed into
the constitution of the party by DengXiaoping in 1982, they are everywhere,
they're mentioned all the time.
Yet you'll find it very difficult tofind a China expert who can tell you
what these four principles are,but they're very straightforward.
(06:15):
They're about Marxism,they're about Leninism,
they're about upholding Marxism,Leninism, Mao Zedong Thought,
upholding the socialist way, upholdingthe dictatorship of the proletariat.
Now, of course you can dabble in theseprimary sources and scoff because they're
not real communists, but not reallya dictatorship of the proletariat.
(06:37):
They have to pretend this, but if you'regoing to start second guessing and
not listening to what they say,it will get you nowhere, and
there's a lot of primary stuff out there.
>> H.R. McMaster (06:50):
Frank, I think to quote Dr. Evil,
some people think that they'rethe Diet Coke of communism, but
what you're saying is they'reactually the real Coke of communism.
>> Frank Dikotter (07:02):
Listen to what they said, read what they write, and
you don't have to spend a lot of time.
>> John H. Cochrane (07:09):
Well, some of us have, have not read what they write.
And every time I try to understandwhat Marxism, Leninism,
Stalinism, Mao Dang thought isvery good for falling asleep.
So I would encourage you to give usa little sermon on it with the following
thought.
So Frank and I had a wonderfulconversation a while ago where he
(07:31):
impressed on me these peopleactually believe their ideology.
And that has opened my mind a bit,I realize, thinking about it,
I'm also reading the wonderfulKotkin book on Stalin.
He believed his ideology, not just in thesense of a interpretation of history and
(07:51):
victimhood and so forth,but also cause and effect.
He thought our grain is down,collectivized farms, they'll boom, so
there's a cause andeffect To the ideology there.
And looking around,I think our national conservatives,
they believe their ideology,
that there's a victimhood of China did badthings to us and tariffs will solve it.
The European Greens,they believe fundamentally and
(08:14):
we are sinful, we need to decarbonize andcause and effect,
electric vehicles willmake the weather cooler.
So people believe their ideologies,that was a big insight you gave me.
But you said things about the economics,so I'd like to understand how that works.
You said that they are stillMarxism-Leninism control the means of
production, but they don'tcontrol the means of production.
(08:36):
China is very differentfrom the old Soviet Union.
There is a vibrant private sector,semi-private, whatever it is, but
there's a market economy.
There isn't a five year plan.
>> Frank Dikotter (08:48):
Well, there isn't.
>> John H. Cochrane (08:49):
Well, this is what I want you to explain.
The other thing I learned from your book,which was a real
eye opener was we think of the 1970sas when the top said aha, go be rich.
But in fact your book said no,it was happening on the ground level and
they scrambled.
They knew they had to allow it orelse they would be kicked out of power.
(09:10):
So it was not a top down thing,it was in fact the limits,
it was sort of a new economic policy,we have to allow this.
But is that temporary?
Do they want to put backin five year plans and
government ownership of everything?
So how do they think cause andeffect in ways that can enlighten us,
both the strategic question andthe economic question?
(09:31):
And how does this square, if it's the samethought that produced five year plans in
the Soviet Union, how does it producethis very innovative, somewhat private,
supremely competitive, still moneyhanding around semi-market economy?
>> Frank Dikotter (09:46):
Yes, well it is a Marxist economy,
whether you like it or not.
And they have no desire to callit a capitalist economy or
to have a capitalist economy.
Take the banks forinstance, what is Marxism?
Marxism is the state ownershipof the means of production.
What are the means of production?
It is everything that goesinto the production process.
It means the land, which in Chinaas you know, belongs to the state.
(10:11):
Not a single farmer owns a plot of land,not a single landlord does anything.
It is about capital, who owns the capital?
0.5% of all banking assets belong
to private banks, 0.5%.
99.5% of all capital is in state banks,okay?
(10:33):
So compare that tothe United States of America.
The raw resources are indirectly ordirectly controlled by the state,
energy is directly orindirectly controlled by the state.
There's an enormous clout there.
What these people set off to do fromthe late 1970s onwards is not so
(10:54):
much destroy socialism ormove from socialism to capitalism,
is to make socialism work better.
But that's not really the key point,
it's not just about the abilityto provide subsidies,
it's the ability really tocontrol the population.
(11:15):
This is something that we tend to forget.
We complained about subsidies,we think that we
can't compete because we have too muchred tape, because they're better at it.
But in effect, what you have inthe People's Republic of China,
and you've had it since 1949,is an apartheid system.
(11:37):
An apartheid system in which a largeproportion of the population,
precisely 40% of the workforce, 300million migrant workers, have zero rights.
They're an underclass of people,they don't have access to welfare,
to health, to social security,to education for their children.
(12:01):
They can be removed at the beck andcall of the state.
The state has enormous powers, can crushdissent, can displace entire population.
>> John H. Cochrane (12:12):
I wanna push you just a little bit before and sorry, Niall,
you get your turn next.
Every other socialist plannedeconomy on the planet is a disaster.
>> Frank Dikotter (12:21):
Yes.
>> John H. Cochrane (12:22):
China is not yet a disaster, are you saying
the contradictions of socialismhead us inexorably to Cuba,
Venezuela, North Korea,East Germany, Soviet Union?
And there's a fundamental weakness therethat all the China is gonna ignores us,
(12:42):
or is it somehow different?
>> Frank Dikotter (12:49):
The best term for it, I mean, you can shop around,
is it a command economy?
Is it mercantilism?
The best way of looking at itis to call it a war economy,
W-A-R, for your American listeners.
So a war economy is when at onepoint a state decides that must turn
(13:09):
factories which produce, let's say washingmachines into factories that produce
armaments because the as an overridingtarget which must be met at all cost.
So it will curb rights, human rights,political rights, social rights.
This can work as it did forthe United States and
(13:31):
England during the Second World War.
Hayek produced a book called the Roadto Serfdom in 1944 to warn governments,
in particular the UK against thetemptation to continue that war economy.
What you have in the PRC is basicallya war economy all along, it never stops.
(13:51):
It can control the population,it can transfer people,
it can have them work in coal mines fornext to nothing,
it can harness resources of the state,it can crush the scent.
There's no separation of powers there,there are no unions.
>> John H. Cochrane (14:06):
War economies are stupendously inefficient.
It lasts for four years and then if youtry to run it permanently that way.
So are you saying the Chinese economyis gonna be stuck in a stupendously
inefficient state orhow is it producing stuff that's cheap,
that's technically innovative inways that war economies don't do?
>> Frank Dikotter (14:26):
War economies are not stupendously inefficient,
they achieved the goal quite wellduring the Second World War.
They can do it very well short term.
What happens is that as withall socialist economies,
it is incredibly expensive andincredibly wasteful.
Which is why the Chinese economyhas not been stagnant but
in recession since COVID,which is why it has a debt ratio
(14:51):
to GDP of 350% andGod knows how much hidden debt there is.
Which is why the unemployment is soenormous,
probably more than 20% for young people.
I mean you can look at the shine,the surface of this economy,
you could say, look at these cities,it's absolutely wonderful,
(15:15):
look at the bullet trains,isn't that just astonishing?
Well, yes, the China rail, the company
is $900 billion in debt, $900 billion.
You can applaud for instance,the peer-to-peer system that
(15:36):
appeared I think around about 2016,17, 18, 19.
Until, of course, it collapses withthat to the tune of $120 billion,
which makes the wholeMadoff Ponzischeme look like a walk in the park.
But the bicycle scheme,the bicycle, Go highest scheme was
(15:59):
applauded as a great Chinesetechnological breakthrough,
which could only possibly happen in China.
You can just pick up a bike andyou can bike around, subscribe to it for
next to nothing until thattoo collapsed in 2018,
producing mountains andmountains of bicycles.
(16:20):
So this, the waste of it is enormous.
Within that waste,uses to say there are achievements.
I mean,how could there not be achievements?
Stalin wanted the bomb,Ma wanted the bomb, they got the bomb.
Now Huinta always say,wanted the ballpoint pan.
(16:42):
And he got the Ballpoint[LAUGH] some 15 years ago.
Xi Jinping wants an electric car.
He's got it.
So the world is now applauding BYD but
remember what I just said aboutunfree labor being used in China?
(17:03):
It now turns out there is unfree laborused in BYD factories in Brazil also.
How long does it last?
How long will it ride?
How long an average Americancar will last 13 years.
How long will an average Chinese car last?
We don't know.
In fact, you should go to Russia,find out how it works,
because they have a lotof Chinese cars there.
>> John H. Cochrane (17:21):
So you're saying, paper tongue.
You're saying, like people worryingabout Japan was gonna overtake us.
Japan was actually a reasonableeconomy when it stopped growing.
But you're saying,China is going to stop and
run into the inherent contradictionsof socialism pretty darn soon.
>> Frank Dikotter (17:39):
I wouldn't want to predict the future, but
Japan had a pretty damngood working economy.
When you talk about a Japanese recession,
I wish we could have a Japanese economy.
>> John H. Cochrane (17:51):
It didn't overtake the U.S.
>> Frank Dikotter (17:53):
No, it did not.
And China never will.
Not with this present system.
It had three engines of growth.
Investment in infrastructure,where they pour zillions upon zillions
into infrastructure to the extentthat you have empty trains,
empty airports, empty railways,empty cities standing there.
(18:13):
So you can't do that forever,never mind local government debt.
Then the second engine of growth isreal estate, which is basically a Ponzi
scheme that has going on for solong that even that bubble had to burst.
Normally, in a socialist economy,you can control all of that.
You can constantly postpone the crisis andthe day of reckoning.
(18:36):
No enterprise has to go bankrupt in thePeople's Republic of China can always be
rescued.
But that bubble did burst in2020 with Evergrande and others.
So what you've got is one engine remainingwhich is manufactured and exports.
So precisely as the world wishes tosomehow become less entangled with
(18:59):
the PRC, the People's Republic doublesdown and wishes to export even more.
>> Niall Ferguson (19:06):
One can be skeptical about the economic achievement, of course,
Frank, andfind all kinds of structural problems.
Still, if one goes Back to the 1990s,the Chinese economy
is 7% the size of the US economyon a current dollar basis.
Now it's more like 70%.
(19:27):
That's an undeniable achievement.
But I don't want to talk about thatbecause I actually don't think that's
the interesting thing.
For me, the interesting thing iswhat do they do with this power?
They've acquired a greater manufacturingcapability than the United States.
(19:47):
It's now roughly two timesthe manufacturing value added of
the United States.
20 years ago we had twotimes what they had.
What do they do with that?
My big question for you, Frank,has nothing to do with GDP and
how many bicycles were left in a heapat the end of the cycle scheme.
It's do they go to war over Taiwan?
Because authoritarian regimes overthe last hundred years have this way,
(20:10):
as I suppose you've noticed too of goingto war, particularly if the economic and
social contradictionsbecome unsustainable.
Is that what we should beworried about and talking about?
>> Bill Whalen (20:21):
Yes, Niall,
can you actually add to yourtheory what your theory is and
what's going to happen with China andTaiwan?
You've been pretty specific about this.
>> Niall Ferguson (20:28):
Well, regular viewers know that I think we're in Cold War II and
we've been in it since about 2018.
And just as Berlin andCuba were crucial places in Cold War 1,
Taiwan is the crucialplace in Cold War II.
They think it's theirs.
We kind of acknowledge that itis have done since 1972 and
it just happens to be where allthe most sophisticated semiconductors
(20:51):
get manufactured for Nvidia andtherefore for all the big tech companies.
And so my hypothesis is at some pointvery soon the Chinese are going
to take advantage of their enormousmilitary build up which is a part of
their manufacturing boom, andtake that island, take over Taiwan.
That's the big question that I want tohear Frank's answer to because Frank knows
(21:14):
much more about China than any of us,Frank?
>> Frank Dikotter (21:16):
No, I don't.
And this is the key point, you see,
this is why you shouldn'tcall me a China expert again.
I'm referring to the proverbial plumber.
I'd rather be a plumber.
There are too many China expertswho seem to know everything.
But the point is we know very little.
We know very little about what theyreally do about the real economy.
What are the figures?
They're all being manipulated.
(21:37):
Their economy the last five years havebeen probably the numbers have been
inflated by about 3%.
>> Niall Ferguson (21:43):
But, Frank, you say, listen to what they say, and
I listen to what Xi Jinping says.
I just read the article that he publishedat the time of his visit to Moscow,
and it very explicitlyreferences Taiwan and
restates his intention to assertBeijing's authority over it.
So the question really is based on yourhistorical understanding of the CCP and
(22:06):
of the PRC, is it likely that they takethe kind of risk that we just saw Putin
take over Ukraine?
That's what I really want to figure out.
>> Frank Dikotter (22:16):
First of all, we're not in World War II,
when in Cold War I,that thinking has never changed.
The public declarations about taking over
Taiwan go back to probably 1949.
Deng Xiaoping, even before hecame back to Power in 1979, said,
(22:39):
we will not hesitate to usemilitary force to take Taiwan back.
Hu Yao Bang, who was seen to bethe great reformer in the 1980s himself
declared openly, we may not even wait andtake Taiwan back.
There have been endless missile crisis.
The first one, the first bombing ofan island that belongs to Taiwan,
started, of course,in 1957 under good old Chairman Mao.
(23:03):
So this has been going on fora very long time.
They are determined to take Taiwan.
There's absolutely no doubt about it.
So there are two separate issues.
One is that you must armTaiwan to the teeth.
And the reason for that is very simple.
(23:24):
You do not know what they will do.
You do not know whether it is huff andpuff or bluster.
You do not know what a dictatorwho teeters between hubris and
paranoia might decide to do one day.
So your only defense is to prepare forthe worst and hope for the best.
(23:46):
So that's one issue.
But the other issue istheir actual capabilities.
And here I'm a little bit worried because,of course,
you should neverunderestimate your opponent.
But it is also a strategic mistaketo overestimate your opponent.
And there is very clearlya cognitive war going on here.
(24:10):
Where day in, day out,the propaganda machine from the PRC tells
us about this weapon and that weapon andhow determined it is and
how powerful it is andhow it will never hesitate and
how it could take Taiwanfrom one day to the next.
That is called cognitive warfare.
(24:30):
And it is designed to instill into you and
all others a sense of resignation.
The idea that somehow, well,if they're so determined and
they're so powerful, why should we meddle?
It is designed to have potential allies ofTaiwan walk away from the Taiwan scenario.
(24:52):
That's the purpose ofthat cognitive warfare.
The last great military breakthrough.
Read the South China Morning Post,breakthrough every day.
A shoddy paper that has become.
It's called, I believe,the Drone Mothership.
That's the latest I read,I think, about three days ago.
It's a massive sort of floating soapboxwhich accompanies a whole fleet of drones.
(25:19):
What is it?
It's a drawing.
It's a drawing andit's an AI generated drawing.
It doesn't even exist.
But this goes on time and again.
What about that stealth fighter, the G20?
Maybe HR can tell us how manypeople have actually seen,
how much footage do we have ofa J20 actually firing a missile?
(25:43):
My understanding is thatthere's one photo on
the Weibo website run bythe People's Liberation Army.
I mean, the Shandong aircraft carrierpropelled by eight oil boilers.
Does it ever move awayfrom coastal airfields?
(26:04):
I think not, because it cannottake any planes in choppy weather.
What about the submarines?
Well, there's this huge effort tocreate this image of a stable,
powerful empire, militarily.
And of course, also economically thatgoes back to this whole tariff of war,
(26:26):
as if China couldn't be bothered andwill sit through it strong and confident.
But it is not, it is not.
>> H.R. McMaster (26:34):
Frank, I think this is a really important point.
And the cognitive warfare goesbeyond just sort of bolstering this
image of invincibility and power andfutility and resisting it.
There are signs of weakness in the PLA.
Of course, as a military officer, you'rekind of trained not to underestimate your
(26:55):
enemy, but as you mentioned, there'sa big cost in overestimating your enemy.
And the other signs I think of realtrouble in the PLA are a lot of these
purges that have happened ofsenior military officers,
which seems there are two schoolsof thought on this, Frank.
And I know of course,you're very humble and
reasoned about this because you know somuch.
(27:16):
You say that we can't predict thesethings, but do you think these weaknesses
that you see in the PLA senior leadership,or evidence of corruption?
Do you think this means that Xi Jinping isin a strong position because he's exerting
his authority?
Or do you think that it's showing somecracks in Xi Jinping's leadership?
>> Frank Dikotter (27:36):
I think it's a hugely important question and
ultimately it comes down to everything.
It comes down to what weknow about the economy,
what we know about fentanyl,what we know about the army.
And the question is the following.
How good is the center ableto control local governments?
(28:02):
That's what it boils down to.
So the broad history in a nutshellis quite straightforward.
Good old chairman Mao builds up a powerfulcentralized state during the 50s and
60s, which he then proceeds toundermine for all sorts of reasons.
Most of all, his fear that hemight be undermined by others.
(28:23):
And the cultural revolution prettymuch destroys the organization of
the Communist Party of China,which then has to be rebuilt for decades,
starting with Deng Xiaoping,Jiang Zemin and others.
So now Xi Jinping has at his disposala much more powerful centralized state.
But can the writ from Beijing go allthe way down to a local government?
Can he command a county, a province,
(28:47):
to actually followthe edicts from Beijing?
On for instance,stopping fentanyl production or
taking care of the environment andtackling pollution or
respecting whatever feeblerights there are for
migrant workers orget the army back in shape?
(29:09):
Can he do that?
I think the answer is no, he cannot.
No, he cannot.
I think the reality isthat since COVID 2020,
his grip on the population at large andlocal governments is slipping.
And the constant purges in the army,the last one was He Weidong,
(29:30):
which ironically meansprotect the East Weidong.
This number two in command of the army,that's pretty high up.
Well, that shows you thathe is deeply worried.
>> Niall Ferguson (29:44):
But Stalin purged his military elite too.
Stalin in many ways looked as if he wasrunning the Soviet Union into the ground.
And it turned out that the Soviet Unionwas better able to mobilize
forces in a large conventionalwar than Nazi Germany.
So I kind of wonder here if it's a goodidea to talk down China's capability,
(30:07):
especially if you want usto arm Taiwan to the teeth.
I mean, you're giving us lots ofreasons not to bother doing that.
I think I'd rather overestimate China anddeter China than underestimate China and
then have a 1941 moment, which after all,is what the US military worries about.
I mean, you're telling us a prettynegative story about the state of China's
(30:29):
capability.
But at the Office of Net Assessmentbriefed some Hoover Fellows earlier
this year when it still existed.
And told us that China was catching up ata formidable rate in almost every domain
of military capability.
If the US military thinks thatmaybe they're overestimating it.
But it certainly seems like a goodreason to bolster Taiwan's defenses,
(30:53):
which we haven't really done,certainly not to a sufficient extent.
But can I ask a totallydifferent question before
we get completely boggeddown in the present?
It's a historical question aboutsomething you mentioned a minute ago, and
that's the Cultural Revolution.
Because I think to understand Xi Jinpingand his entire generation of Chinese
leaders, you need to understandthe impact that that event had on them.
(31:17):
Now, you've written what I thinkis the best book on the subject.
I'm not sure how many Americans reallyget what the Cultural Revolution did
to Xi Jinping in particular, but perhapsalso to his generation more broadly.
Can you talk a bit about that?
>> Frank Dikotter (31:32):
I can, but not without mentioning that when Stalin went into
Finland, it didn't go all thatwell after all these purges.
And that tiny little country calledFinland put up a pretty damn good fight.
And Stalin was taken aback to the extent,of course, that Adolf Hitler thought,
(31:53):
look, this is a paper tiger thatwe have in the Soviet Union.
And he made that fatal mistake.
And American equipment did a lot for theSoviet Union in the in World War II, but
please go ahead.
But anyway, let's not getback to the Second World War.
Again, I wish to say that there isno contradiction between arming
Taiwan to the teeth because it'san extraordinarily unpredictable
(32:18):
situation in which peoplecan make massive mistakes.
And the attempt to have not just a moreaccurate understanding of what is
happening with the military, butnot go for the cognitive warfare in
which they portray themselves to befar stronger than they really are,
which will result in peoplejust walking away from it.
(32:41):
Anyway, back to the Cultural Revolution.
In a nutshell, what is it?
It sounds like a very confusing period.
But in a nutshell,it's Chairman Mao who is responsible for
having initiated the deathsthrough famine and
violence of well over 45 million people.
(33:05):
A chairman was seen to be responsible for
that disaster during the greatleap forward from 1958 to 1962.
And he is worried that he willundergo the same fate as Stalin,
namely that there will benot destalinization, but
denotification, and he will be a victim.
(33:26):
So what he does with the CulturalRevolution is that he allows, at first,
students to attack their teachers,but gradually just about any
ordinary person to take to task any partyofficial all the way to the very top.
He calls it bombard the headquarters.
(33:47):
What he wants is that ordinarypeople ferret out any
possible real imagined enemyof Mao Zedong and his project.
So the result is that people likeXi Zhong Xun, the father of Xi Jinping,
who is a very highly placed officialin the party hierarchy, and
(34:10):
others get attacked, get criticized,get occasionally interrogated,
paraded in front of other people,tortured in some cases to death,
as was the case with Liu Shaoqi,number number two.
So in effect, Mao is usingthe people to purge the party.
(34:31):
So the party members who manageto survive, like Deng Xiaoping,
like Xi Jinping,like pretty much all of them,
they are determined to nevermake that same mistake again.
They are determined never to allowordinary people to have a voice.
(34:53):
And that's what happenedin Tiananmen Square, 1989.
A display of sheer steel determination to
crush ordinary people andnot let them have a say.
So Xi Jinping is somebody who'sprofoundly anti-democratic.
>> John H. Cochrane (35:14):
I wanna follow up on the deterrence question cuz I hope we're
still deterring.
If we wanna deter, we know Chinawants to take over Taiwan, so-
>> Frank Dikotter (35:23):
Absolutely.
>> John H. Cochrane (35:23):
The question is what's their strategic calculation and
what is their calculation aboutthe military success of it?
But also I wanna probe the economicelement of deterrence cuz on the military
question since we're seem to be afterthree years we got tired of Ukraine and
are seem to be happy togive Crimea to Putin.
(35:45):
Will the US actually go fighta war 5,000 miles away over
a country that we actuallysay is part of China?
I think there's some ability is one thing,but will is another.
I like your military part of, well,
Taiwan should be armed to the teeth andalso trained to the teeth.
(36:06):
It's not just a question of weapons,it's their ability and
ability to use them becausethat's prepositioned.
We know they'll fight back.
It's not clear that we will.
But there's a great inconsistency betweenwhat you said about economics that things
are falling apart internally.
So, well, what we'll do is we'll havethis huge manufacturing thing and
we'll sell it around the world.
(36:26):
Of course, if they invade Taiwan and
if the rest of the world is with us,that gets turned off instantly.
And that strikes me as if they canput those two and two together,
the greatest possible deterrence.
Of course what that relies on is not justus turning off China trade the minute they
invade Taiwan.
It's the rest of the world beingwilling to go along with us to say no,
we don't care who makes them.
(36:47):
We will buy your $15,000 BYD cars,not $100,000 US cars, thank you very much.
So we need our allies on that.
But if that strikes me as one where wemight have a little more will than for
actual fighting andone where the Chinese might shrink, but
they have to add the two and twotogether that their own economic plan of
(37:09):
immense manufacturing saving us wouldfall apart if they invaded Taiwan.
Do they understand that, and is thata reasonable path towards deterrence?
>> Frank Dikotter (37:19):
I'm sure they do.
And even just the blockade ofTaiwan would be a self blockade and
60% of China's oil is imported.
Massive amounts of coal is important.
Energy depends still to about 50% on coal
with Weber forced laborworking in coal mines and
(37:44):
aluminum smelters foryour BYD cars, by the way.
>> John H. Cochrane (37:50):
Well, and Australian coal as well.
>> Frank Dikotter (37:52):
Yes, so, but the point I'm trying to make is that they depend
enormously on imports andnot just exports.
So a blockade of Taiwan wouldbe very difficult to sustain
without massive economicpain to themselves.
The point really is that wejust don't know a particular
(38:13):
decision might seem to be notjust irrational, but suicidal.
But there's no lack of dictatorswho have made such decisions.
>> John H. Cochrane (38:25):
That's why I was asking you about their sort of cause and
effect thinking.
Mao thought that the Great Leap Forwardwas gonna be wonderful industrial policy.
We pass the US in steel,every farmer will make steel.
He just had the cause andeffect wrong there.
So it's important to know whattheir cause and effect thinking is.
>> Frank Dikotter (38:41):
And the key point is also that at the end of
the Great Leap Forward, by 1962, tensof millions of people had been worked,
starved, beaten to death, andit didn't really matter all that much.
In other words, war economies,communist societies
are willing to bearan enormous amount of pain.
>> Bill Whalen (39:05):
I can shift gears, gentlemen, though.
HR traveled to China with President Trumpwhen he was the president's national
security advisor.
And I think we would agree it'd be a veryTrumpy thing to do a summit with Xi at
some point in the second term.
I'd be curious, Frank, as to where youthink Xi would optically wanna do this,
if he'd wanna host in Beijing,would he be willing to go to Mar-a-Lago or
the nation's capital?
(39:26):
But here's my question to the panel.
If these two got together and Trump,in Trump fashion, wanted to do a deal,
what's on the table in termsof talking about a deal?
Is it fentanyl, which HR has just writtenabout, Niall, is it Taiwan, John?
Is it issues with manufacturing atApple and others leaving China?
Niall, why don't you start this,what do you think would be on the table?
>> Niall Ferguson (39:45):
Well, first of all, I don't think it's happening at Mar-a-Lago,
because that was last time.
And we've just seen inthe game of tariff chicken
that China had escalation, dominance and.
Scott Beston had to standthe President down,
defer the reciprocal tariffs,go to Switzerland and
(40:08):
negotiate a kind of tariff truce,if not a full end to the trade war.
So I would imagine ifit's going to happen,
that it happens in Beijing andI could see Trump going for that,
as he does have a kindasecret Nixon fantasy life.
Trump in Beijing would rhyme withNixon in China, the question
(40:32):
is how broad would the range of thediscussions be, would it include Taiwan?
Would it include semiconductors?
The administration,as I've been saying all along this year,
has a huge tension within it betweenthose who are dealmakers, and
perhaps that would include the President.
And those who are really quite hawkish onChina and regard tariffs as just one of
(40:57):
a whole range of instruments we need touse to contain the Chinese challenge.
And I think if you were on the morehawkish side, you'll a little despondent,
see Mike Waltz leave the positionof national security advisor and
Alex Wong as number two.
You're hoping Marco Rubiowill stick to his guns as
a Secretary of State andmaintain a hawkish posture.
(41:22):
But I think there is a tension, andanybody in the administration who
takes the China threat seriouslywill be concerned that an open-ended
negotiation between Xi and Trumpmight lead to a concession on Taiwan.
After all, we know from anothernational security advisor, John Bolton,
in his memoir that Trump doesn't regardTaiwan as something worth fighting for.
(41:46):
So I could see a negotiation going in allkinds of directions that would greatly
worry those who are morehawkish on the issue.
>> John H. Cochrane (41:53):
Well, I would think first it would be fun on a personal
level [COUGH] Xi Jinping likes tomake people kowtow to him, and
Trump likes to try tohumiliate his opponents.
That's his way of the big handshake,what he did to Zelensky,
and that's his way of negotiating,so it would be very amusing
(42:15):
theater to see how these twowould try to one-up each other.
But I think the negotiations wouldgo badly [LAUGH], first of all,
it's important to understand whatreally is in your own interest and
what is not in these negotiations.
So I think it is in our interest to deterthe invasion or blockade of Taiwan,
(42:36):
though I think that's actually somethingwe should be a little clear about.
If we don't care about Crimea,why do we care about Taiwan?
But I think that's in our interest,don't blockade Taiwan.
Do we care about China not manufacturingingredients that go to Mexico that turn
into fentanyl?
Is this a cause-and-effect solutionto the fentanyl crisis in the US?
(42:59):
Now, on one end, that gives China an easyout, if you're asking for things that
really aren't in your interest and don'tmatter, they can say, sure, here you go.
And get a lot of whatever they,we get Taiwan, and
we'll promise to do something on fentanyl.
So don't ask for dumb stuff,similarly bilateral trade deficit,
does the bilateral tradedeficit really matter?
I'm sure we're gonna go in andsay, you have to buy American X,
(43:22):
Y, and Z, they can say, sure, and then youtrade away staff you're not asking for
things that are reallyin your own interest.
So let's be clear about really what ourown interest is in negotiations like that.
>> H.R. McMaster (43:36):
Well, there be a lot that's the same, right?
What Xi Jinping would want is he wouldwant the same kind of images that
China wanted to portray to itsown people when Lord McCartney
visited the Xing dynasty in 1790.
And they put up big billboardswith Chinese characters saying
he's come to pay homage to the emperor,and so
(43:58):
he wants these images of supplication anddeference.
And it will be a theater designed tocommunicate that message to the world so
he can bludgeon other countries with it.
But what he'll want that'smore substantive is for
Trump to accede to somekind of a G2 arrangement
where the United States grantsa sphere of influence to China.
(44:20):
Say, dominance over the Indo-Pacificregion in exchange for
his acknowledgment of our primacyin the Western Hemisphere.
To do that, what he'll do istry to manipulate history, and
I'd love to ask Frank about thisbecause I've heard it happen.
He gives this warped view ofhistory that emphasizes China's
victimization duringthe century of humiliation and
(44:43):
then portrays the Chinese Communist Partyas the savior of the Chinese people.
And then, of course, he highlightsthe brutality of Japanese occupation,
certainly, and creates this sorta sense ofa great aggrievement to try to generate
some sympathy for China and the ChineseCommunist Party with Donald Trump.
(45:06):
And so, President Trump is not a studentof history, so it was important for
us to really talk to him about howXi Jinping would try to manipulate
the past to influence Trump'sunderstanding of the present.
And I think that's not gonna change and
what he'll try to do is use kind ofTrump's impulse toward retrenchment and
(45:31):
try to reinforce that with this idea that,hey, we can get along well, we can
prevent World War III if you just grant usthis sphere of influence that is due us.
Because, we're a bigcountry here in Asia and
you're there all the way acrosson the other side of the Pacific.
>> Frank Dikotter (45:50):
Yeah, very much agree with all of it, Trump goes to Beijing,
anyone goes to Beijing,you pay tribute to the emperor, and
when I say emperor, I'm not really joking.
When we talk about the century ofhumiliation, the 19th century,
the biggest expanding empire is not theBritish one, certainly not the Dutch one.
(46:11):
It's the Qing Empire, the Chinese one,and the borders of the Qing Empire,
when it collapsed in 1911,
are the ones that have been maintainedby the People's Republic of China.
So it is, in effect,an empire that has not yet
decolonized, that's the geopolitics of it.
Now, when it comes to trade,what are you going to achieve?
(46:31):
There are two issues oneis what China can do, and
then there is what China would do, nowcan it curb the production of fentanyl?
I already said I doubt it very much,there were debates years ago about
how China should restrain North Korea,can it do that?
Obviously not, in fact,what China can do is quite limited, and
(46:55):
then there's what it wants to do.
When it comes to negotiations,it will always make promises and pledges,
history books to be writtenabout the number of promises and
pledges that have been broken.
It will stall, it will break a pledge,it will modify its conditions,
it will have you come back to thenegotiation table, it will drag it out,
(47:18):
it will tire you until the day you give upor think, there's another deal to be made.
And then the same scenario repeats itself,it's a soap opera.
>> H.R. McMaster (47:30):
Or until you accept the status quo as the new normal,
absolutely right, Frank,these dialogues that you have with
the Chinese Communist Partyare a complete waste of time I mean.
>> Frank Dikotter (47:40):
Exactly.
>> H.R. McMaster (47:41):
And there were people say, well,
there's no harm ever in talking, yeah,I guess there really is a harm in talking.
Because what it does is itallows them to string you along
with these false promises thatthey don't intend to keep at all,
so the fentanyl piece that Billmentioned was this report.
That I was asked to give Xi Jinpingon fentanyl cooperation, but
(48:05):
also law enforcement cooperation broadly.
And, and, you know,
the establishment of these policestations in the United States, right?
To intimidate Chinese American citizens,and of course, none of that changed.
We combated it,we began to compete against it, but
if anybody watched 60 Minutes a coupleof weeks ago, there's still this,
(48:27):
this to coerce Americancitizens on our soil.
>> Frank Dikotter (48:30):
And speaking of interest,
trying at least to limit Chineseespionage in the United States,
that's something that reallyis strongly in our interest.
And the less time we spend innegotiations, distracted with other things
that are sort of for show, the moreyou might make some progress on that,
the promises issue being,of course, a difficult one.
>> Niall Ferguson (48:53):
Frank, Xi Jinping is not immortal,
I don't think he looks to bein particularly great shape.
Who comes next?
What comes next?
Is there any way of imagininga change of direction?
There's no succession plan, clearly, andthat creates risks of its own, doesn't it?
>> John H. Cochrane (49:13):
If I could add to that, Xi Jinping was remarkable,
there was a tradition,not really a constitution, but
we don't have a single dictator for life.
There's a sort of a plan ofregular rotation of chairman, and
Xi Jinping took that back.
I would imagine there's a lot of old guysin China who are still rankling about,
wait, wait, wait, what do you mean?
You get it for life,are we going to go back to a system with
(49:37):
a little bit more scheduledtransitions on the top?
>> Bill Whalen (49:41):
And if I can build on this, as Niall and
John have both mentioned, the man, Frank,is it worth watching The Death of Stalin?
>> Speaker 1 (49:46):
Stalin's dead.
>> Speaker 2 (49:47):
He's dead.
>> Speaker 3 (49:47):
Stalin is dead.
>> Bill Whalen (49:49):
Which rather satirically shows the absolute mess that was dealing
with Stalin.
>> Speaker 4 (49:53):
The answer to that one is yes.
>> Speaker 5 (49:55):
Yes. When I said no problem, what I meant was,
no problem.
>> Frank Dikotter (50:01):
Yes, I, I thought it was, I mean,
I'm a great fan of Steve Buscemi, butI thought it was probably less amusing,
maybe because I'm a historian andI didn't laugh as much as others.
>> Donald Trump (50:15):
But yes, definitely, The Death of Stalin,
the paranoia around it,like Stalin and others,
Xi Jinping spends his day keepingtabs on the people around him.
Number two, three, four, five, six andseven lives in fear of a coup,
a stab in the back, a plot,a bullet that's been rigged, an accident.
The man lives in fear all day long,not to mention his health.
(50:39):
What can he eat?
What can he drink?
He won't approach him withoutgoing through a metal detector, so
that's the life of Xi Jinping.
Does he have time to payattention to anything else?
I doubt it very much, I doubt thatthey'll be able to place a medium sized
country on the map, that's what I think.
He's a caveman Marxist,as Stalin said, a MA, by the way.
(51:03):
Now what's a succession plan?
There isn't one,it's all a sort of struggle for survival.
All these counterfactual approaches tohistory are fascinating in that you
simply don't know.
Somebody you will have underestimated for
a very long time might very wellbe the one who takes the mantle.
(51:27):
But two things are, I think,reasonably well established.
First, like all dictatorships,China is a democracy because every
dictatorship wishes to projectitself as a democracy.
So in principle,it would take one decision
by one man to allow everybodyat every level to vote.
(51:50):
There is a People's Congress,people do vote at every level,
except they have to vote forthe people on the list.
And God forbid that you proposeyourself without being on that list,
you'll end up in jail.
So in principle, it could becomea democracy from one day to the next.
In practice,all of these leaders are deep,
(52:12):
deep into corruption,have family members who own billions.
This is like the Mafia,you run Chicago, I'll do New York.
That's what it is,it's a Mafia running the place.
Does the Mafia going to become democratic?
Maybe, maybe, but I would givehim a good push, I wouldn't wait.
>> Bill Whalen (52:35):
Right, well, gentlemen, we're gonna leave it there.
Frank, we kept you on extra-long,but it was a great conversation,
we could have kept you on foranother hour, I think.
This topic's not going away, so please,
by all means come back and let me addit's an honor to have you at Hoover and
join our formidable stable of historians,Frank.
So, thanks very much forbeing part of Hoover's life.
>> H.R. McMaster (52:52):
Thanks, Frank.
>> Niall Ferguson (52:53):
Thank you, Frank.
>> Frank Dikotter (52:54):
Thank you, it's been a pleasure.
>> Bill Whalen (52:57):
So, gentlemen, since we went along with Frank,
we're not gonna do a B block today,instead,
we're gonna move straightto the lightning round.
[SOUND] Lightning round.
Gentlemen, our first topic, the Trumpadministration has said it will halt
Harvard University's ability toenroll international students and
sponsor international scholars,
a move that impacts about onequarter of Harvard's student body.
(53:18):
Harvard, in response, filing fora temporary restraining order to block
the Department of Homeland Securityfrom carrying out said move.
Before I get your answer,gentlemen, I beg you, I beseech you,
Condoleezza Rice is comingon our show this summer,
you're gonna have a longconversation about universities.
So, in the spirit of the lightning round,just quickly off the top of your head,
your response to this story, Niall?
>> Niall Ferguson (53:40):
Well, I was a professor at Harvard for 12 years, I wrote not so
long ago Harvard brought this upon itself.
But I think that the Trump administrationis overreaching, they had a case,
a pretty good case, that racialdiscrimination had been going on
at Harvard,they should have focused on that case.
I think by firing somany bazookas at the university,
(54:03):
they've created a unitythat wasn't there before.
Heaven knows, even the disgruntled former
president Larry Summers israllying around the Veritas flag.
So, my sense is there's a little bitof James II vs Oxford going on here.
James II took on Oxford backin the 1680s and Oxford won.
(54:24):
So, remember, presidents,you get four years, universities,
they tend to last for centuries.
So, although this is going really,really badly for Harvard,
I would say the administrationhas probably overreached and
will lose in court atleast one of the cases.
>> Bill Whalen (54:40):
John, your quick take.
>> John H. Cochrane (54:41):
To be effective, you wanna do things to all universities,
not just Harvard.
So, publicized war on Harvardmight be good for ratings, but
I'm not quite sure what it does.
Taking international studentsis a wonderful export
that the United States does.
One of our great industriesis large universities,
it's not clear why you wouldwant to hamper those exports,
unless that's just one thing youcan do to be mean to Harvard.
(55:05):
And I think the more significant news wasthe lawsuit they have against Harvard.
But everyone else is guilty forracial discrimination in faculty hiring,
where it was just plasteredall over the websites.
We are violating the Civil Rights Act,look at our racial quotas.
I think that was a more effective one and
(55:25):
one that I would hope they would continueand generalize to other universities.
>> Bill Whalen (55:30):
HR? >> H.R. McMaster
idea, I mean,I think about the impact on individuals.
And these are people who, many of themcoming from developing economies,
had this great dream of goingto the United States for
university and going to Harvard,
which they had in their mind as kindof the ultimate academic experience.
(55:55):
And now that all those hopes are dashed,and that's terrible, and
I worry about the.
Reputational damage to the United States.
There are real issueswith Harvard University.
But as my colleagues here have said,focus on those issues.
Don't do damage toinnocent bystanders here.
Okay, moving on gentlemen.
The National Football League ownersearlier this week gave permission of their
(56:17):
players to play flag football inthe 2028 Summer Olympics in Los Angeles.
Niall, do we even bother asking you ifyou think this is an Olympic sport?
>> Niall Ferguson (56:25):
It's clearly not.
>> Bill Whalen (56:28):
Okay, let's take this a different direction.
Can the three of you name one Olympicsport you would like to eliminate?
I think I know where Niallis on this patellus, Niall.
>> Niall Ferguson (56:35):
[LAUGH] Lord.
I mean, just eliminate all the onesthat the ancient Greeks didn't do and
then the thing will be over sooner.
>> John H. Cochrane (56:47):
There's a whole bunch that 19th century Brits did that are just
maintained.
The only reason anyone does them isbecause they're Olympic sports like
Lusions and things like that.
>> Bill Whalen (56:56):
The Aussie used to do tug of war.
HR, one sport that you'd get rid of?
>> H.R. McMaster (56:59):
Well, I think they already got rid of it,
the breakdancing sport.
>> Bill Whalen (57:04):
There it is.
>> H.R. McMaster (57:06):
I think it's already gone.
I think it's already gone.
>> John H. Cochrane (57:10):
We need to bring sail plane competitions back to the Olympics.
It was gonna happen in 1939 and then someterrible things happened in Europe and
we didn't do it.
>> Bill Whalen (57:19):
Okay, item number three.
It's graduation season and
Forbes magazine has produced a listof worst paying college majors.
These all pay about 40 to $42,000 a year.
The list includes foreign languages,general social sciences, performing arts,
anthropology, early childhood education.
Did any of you three consider a differentmajor at one point in your college
(57:39):
years, John?
>> John H. Cochrane (57:40):
Well, I started off in aeronautical engineering and
moved to physics and only turned to myreal major, economics in graduate school.
So yeah, it's good to look around.
I think this is interesting.
Maybe where economics has had some damage,
there was a finding that goingto college raises your wages.
So we subsidized college, but it's notclear that general social sciences and
(58:00):
performing arts raises your wages.
So we're now in a situation wherewe've over subsidized a lot of fairly
unproductive degrees with allsorts of unpleasant economic and
social consequences.
>> Bill Whalen (58:12):
HR, did you make any lateral moves once you got to West Point?
>> H.R. McMaster (58:15):
I didn't have a choice, right?
When I went to West Point,
you got a Bachelor of Science inengineering whether you wanted one or not.
And then you could doa concentration in another field and
I chose international relations.
But it's a really solid,broad based curriculum at West Point.
I mean, I think that hasn't changed,but they have a choice now and
(58:35):
can choose a major.
So I had to suffer through, I mean, Idon't know how many semesters of calculus.
And they didn't really care aboutyour self esteem back then, Bill.
So they would section you after a test and
they would re-section youfrom section 1 to 13.
And if you were in section 13,seat 12, we called that the ejection
(58:57):
seat [LAUGH] because your GPA probably wasnot gonna allow you to pass that course.
>> Bill Whalen (59:04):
All right, Mr Niall.
>> Niall Ferguson (59:06):
I never considered reading anything other than history.
Perhaps I should have done.
I sometimes think that the Scottish andEnglish systems directed me away
from mathematics prematurely whenit had been a strong subject.
And I would have been better off ifI'd been able to somehow do a double
major in history and mathematics.
(59:28):
But that didn't exist.
I don't think it does to this day.
But most historians would benefitfrom being more numerate.
And most people who are good atmathematics would benefit from knowing
more history.
>> H.R. McMaster (59:41):
I don't wanna know any more math than they forced me to learn at
West Point [LAUGH].
>> John H. Cochrane (59:46):
There's only one time in your life you can learn math.
You can read history when you get old, but
there's only one time in yourlife when you learn math.
And everybody's education should includecalculus, differential equations,
linear algebra, statistics, probability.
Little bit of complex analysisis really good for you.
>> H.R. McMaster (01:00:02):
I got all that.
>> John H. Cochrane (01:00:04):
Universe runs by differential equations.
And once you see that, you'll never.
>> H.R. McMaster (01:00:09):
But John, I don't remember any of it.
I mean, I took it all.
I don't remember any of it.
That squiggly line that's gotlike a little number at the top.
I don't even know what that is.
>> John H. Cochrane (01:00:18):
How do you calculate where a tank shell goes?
>> Bill Whalen (01:00:23):
Niall could have cornered the market on being a math historian.
>> Niall Ferguson (01:00:27):
Yeah, it certainly wasn't very competitive.
>> Bill Whalen (01:00:29):
Well, that would have sold books.
>> Niall Ferguson (01:00:32):
I should say that in the new University of Austin,
we very deliberately makethe undergraduate program
a mix of classical books andhumanities and hard math so
that they have the kind of skillsthat John just referenced.
Sure, they may forgotten them allby the time they're in their 60s.
But HR, there was a time when it wasquite good that you knew something about
(01:00:54):
the physics and math of ballistics.
>> John H. Cochrane (01:00:56):
You at least know what's out there.
You know what it is you don't know.
And that's actually very important.
>> H.R. McMaster (01:01:01):
That is good.
It is good to know you don't know,absolutely.
>> Bill Whalen (01:01:04):
And our final item.
A Pew Research Center survey recentlyfound that 30 of Americans consult
astrology, horoscopes, tarot cards, orfortune tellers at least once a year.
But they do so for fun,not to make life decisions.
Are any of you are surprised or
did your fortune tellers alreadytell you about this, John?
>> John H. Cochrane (01:01:23):
Not surprised.
And I think actually more people aremaking decisions on that basis than you
might think.
But of course, listening to the expertsthese days doesn't necessarily get you any
better knowledge than the fortune tellers.
>> Bill Whalen (01:01:37):
Okay, HR is there a magic 8 ball somewhere in that office or?
>> H.R. McMaster (01:01:40):
No, no, I think this trend is like,
it's derivative of this kind ofsense of loneliness of some people.
I've just talked to your friends ormaybe the lack of spirituality.
Anyway, I just thinkit's kind of silly and
might be connected to kind of this revivalof a lot of writing about loneliness and
(01:02:01):
how people are disconnectedfrom a sense of community.
>> Niall Ferguson (01:02:07):
One of the more interesting predictions that
Henry Kissinger made late in his lifewas that as artificial intelligence
proliferated and more and more thingswent on around us that we didn't really
comprehend, superstition andmagical thinking would make a comeback.
The percentage you just quoted, Bill,surprises me because it's relatively low,
(01:02:27):
and I would guess it's probablyfairly stable over time.
There was always an astrology columnin the newspaper when I was growing
up as a kid, and
I always thought it bizarre that such athing should exist in the 20th century and
the fact that it still exists in the 21stcentury probably shouldn't surprise us.
We have a great propensity formagical thinking,
(01:02:47):
partly because we didn't do enough math,John?
Really, really good math.
They would understand a bit better howthe universe works and they would realize.
>> H.R. McMaster (01:02:57):
Enough with them.
>> John H. Cochrane (01:02:59):
Math is taught too abstractly.
Math, applied math.
You should take a physics one classwhere we see how the math moves
things around and explains.
I don't think it's anyhigher than it's been.
And you wanna see magical thinking.
There's magical thinking all overthe place and not just you may.
But if you're raised by a physicist asI was, you're just told all the time,
(01:03:22):
the laws of nature basicallyhave this covered.
>> Niall Ferguson (01:03:26):
And yeah, you can look at the stars, but
what you actually need to understandis astrophysics not astrology.
>> H.R. McMaster (01:03:33):
I'll tell you, physics was okay with for me.
So was thermal fluid dynamics, butman, I mean, calculus, probability,
statistics, all that stuff was just.
It was just unintelligible to me.
So anyway, enough with the math, guys.
>> Bill Whalen (01:03:48):
Speaking of magical thinking,
John, we owe you because our B blockwas gonna be the big beautiful Bill.
We were gonna have a conversationabout taxes and spending, and
if that's what magical thinking,I don't know what it is.
>> John H. Cochrane (01:03:57):
[LAUGH] The big beautiful mess?
>> Bill Whalen (01:04:00):
Big beautiful mess.
All right, gentlemen,we'll leave it there.
And I'm gonna miss your smiling facesbecause we're not doing a show until about
midway through June.
Our guest is going to be Rick Caruso.
For those not familiar with Mr Caruso,
he's a very prominent developerin Southern California.
He ran for mayor of Los Angeles in 2022.
He may run again, we'll see.
But we're gonna have a conversation aboutwhat exactly bedevils the City of Angels.
(01:04:23):
If, like San Francisco,it's in a doom loop.
And it's a very good conversationbecause LA is in a very bad spot.
By the way, the world is comingits way in 2028 for the Olympics,
which we talked about recently.
So, you don't wanna miss that and thesurest way not to miss it is to subscribe
to our show on whatever platform you'recurrently watching or listening to us.
You can also get to us through the HooverDaily Report, which you subscribe to.
(01:04:43):
You get that through hoover.orgcomes through inbox weekdays.
It means that every time Niall,John, or HR in the news,
it'll show up in the Daily Report.
I'd add, by the way, that Niall,John and HR are prolific writers.
John has the excellentGrumpy Economist blog.
Niall writes for a Free Press.
HR just started a subset column,so you wanna catch them there.
And our three good fellowsare also regulars on X.
(01:05:07):
They all have Twitter accounts as well,so you can get them there.
On behalf of the GoodFellows, Sir NiallFerguson, John Cochrane, HR McMaster.
I hope you enjoyed the conversation andwe will see you soon.
Till then, take care.
Thanks again for listening.
>> Presenter (01:05:23):
If you enjoyed this show, and
are interested in watching morecontent featuring HR McMaster,
watch Battlegrounds alsoavailable at hoover.org.
Let's say China, China, China, China, I have to have my China.
(00:03):
I've been saying China, China, China,China, China, China, China, China, China.
People from China, they love me, China.
[MUSIC]
>> Bill Whalen (00:21):
It's Friday, May 23, 2025, and welcome back to Goodfellows,
a Hoover Institution broadcast examiningsocial, economic, political and
geopolitical concerns.
I'm Bill Whalen,I'm a Hoover Distinguished Policy Fellow,
I'll be your moderator today.
And I am honored to be joined by ourfull fleet of GoodFellows that includes
the historian Sir Niall Ferguson.
The grumpy economist John Cochran3, and
(00:42):
former presidential national securityadvisor, Lieutenant General H.R.
McMaster, Niall, John and H.R.are all Hoover senior fellows.
Gentlemen, we're going to go across thePacific to the other side of the rim and
talk about China today.
And joining us,making his Goodfellas debut,
an individual who spent considerable timein that corner of the world, Frank Dakota.
Mr. Dakota is a Hoover Institutionsenior Fellow and
(01:05):
chair professor of Humanitiesat the University of Hong Kong.
He's the author of a dozen books thathave changed the way the world looks at
the history of China,books we've mentioned on past shows.
And that's why he's here today, to agree,maybe disagree with how our three
Goodfellows view the People's Republicof China, Frank, welcome to Goodfellows.
And I have to ask, as you recently madethe move across the ocean to California,
what do you miss and what don't youmiss about everyday life in Hong Kong?
>> John H. Cochrane (01:28):
I miss so much about Hong Kong, I was spoiled for 20 years, but
I can tell you, to get straight to it,let's not waste any time.
The one thing I missedmost is the ability to
decide whether I wish tobuy Made in China or not.
From the cucumber to my hikingcap down to the washing machine,
(01:51):
in Hong Kong you can make that choicehere in America, you never know.
>> Bill Whalen (01:57):
Well, Frank, welcome to the USA let me begin the conversation,
Frank, in this regard,Donald Trump is an open book.
But he's also, I would contend,a very readable book, in this regard,
he's transactional.
His policy choices, his worldviewinvariably come down, the art of the deal,
the title of his bestselling book.
What about Xi Jinping, Frank,is he an ideologue, is he a realist,
(02:19):
as he looks at the world,is his mindset that wicked,
sinful capitalism is doomedto fall to communism?
As he looks at Taiwan, Frank, is histhinking one of manifest destiny and
reabsorbing a province?
Or is he bases calculations on morerealpolitik view of America's willingness
to fight, what say you, Frank?
>> Frank Dikotter (02:38):
Well, for starters, he's a dictator,
so you don't know much about what hethinks, and that's the key point.
It's not just us, it is number twoin that hierarchy and number three,
four, five, all the way down.
Who knows what a dictator thinks,a dictator lives between wavers,
between hubris and paranoia, andkeeps his thought very much to himself.
(03:00):
But we do know a little bit,we know that he is a Marxist Leninist.
He's a Marxist in the sensethat he is firmly committed
to the state having all power andcontrolling the means of production.
In other words, he sees the world asdivided into two camps, capitalism,
(03:21):
which he abhors, and a socialist economy,over which he presides.
He's a Leninist in the sense that hebelieves in a monopoly over power,
undivided power,no separation of powers there for
you, no freedom of speech,no independent judicial system.
And he's very keen to maintain thatsystem of Marxism, Leninism, and
that's the very premiseon which he operates.
>> H.R. McMaster (03:44):
Hey, what I'd like to ask you, Frank, first of all,
I would just tell of our viewers,read Frank's five volumes on the party.
I mean, make it a project for the summer,it's totally worth it, I've learned so
much from you, Frank, and I just wannaask you to maybe explain to our viewers.
What you told me [LAUGH] years ago,you said, hey,
the problem with ourunderstanding about China.
(04:06):
Is that people treat secondarysources like their primary sources and
primary sources likethey're secondary sources.
Can you talk about your research,what you accessed, and
then how important it is to payattention to primary sources.
Rather than secondary sources when tryingto understand the Chinese Communist Party?
>> Frank Dikotter (04:27):
Yes, I think this is a really good point about history generally
[LAUGH], you should be very carefulof books written by other historians.
Whereas if you dabbleinto a primary source,
say Anne Frank when I was young,you learn a great deal about what
happened during the Second World Warright away at a very young age.
(04:49):
And this is very true about the PRC,I spent 20 years in Hong Kong, and
that's where all the theoriesabout China come to crash.
That's where you encounter realities,Hong Kong, now,
it doesn't take a lot of work,it is extraordinary.
For instance, if you simply openthe pages of the the People's Daily to
(05:09):
see the extent to which you will encounterXi Jinping's image, Xi Jinping's sayings.
Articles about Xi Jinping, the cultof personality is splashed over every
newspaper andall you need to do is have a look at it.
Here's something else you could do,
you could actually listen to what the mansays rather than rush to the bookshelf.
(05:32):
And write the latest bookabout some China expert of
which there are a greatdeal more than plumbers and
electricians from what I can tell.
And what does the man say,well, for instance, in January,
he said very clearly, we mustuphold the four cardinal principles
(05:54):
of the People's Republic of China.
The four cardinal principlesthat were inscribed into
the constitution of the party by DengXiaoping in 1982, they are everywhere,
they're mentioned all the time.
Yet you'll find it very difficult tofind a China expert who can tell you
what these four principles are,but they're very straightforward.
(06:15):
They're about Marxism,they're about Leninism,
they're about upholding Marxism,Leninism, Mao Zedong Thought,
upholding the socialist way, upholdingthe dictatorship of the proletariat.
Now, of course you can dabble in theseprimary sources and scoff because they're
not real communists, but not reallya dictatorship of the proletariat.
(06:37):
They have to pretend this, but if you'regoing to start second guessing and
not listening to what they say,it will get you nowhere, and
there's a lot of primary stuff out there.
>> H.R. McMaster (06:50):
Frank, I think to quote Dr. Evil,
some people think that they'rethe Diet Coke of communism, but
what you're saying is they'reactually the real Coke of communism.
>> Frank Dikotter (07:02):
Listen to what they said, read what they write, and
you don't have to spend a lot of time.
>> John H. Cochrane (07:09):
Well, some of us have, have not read what they write.
And every time I try to understandwhat Marxism, Leninism,
Stalinism, Mao Dang thought isvery good for falling asleep.
So I would encourage you to give usa little sermon on it with the following
thought.
So Frank and I had a wonderfulconversation a while ago where he
(07:31):
impressed on me these peopleactually believe their ideology.
And that has opened my mind a bit,I realize, thinking about it,
I'm also reading the wonderfulKotkin book on Stalin.
He believed his ideology, not just in thesense of a interpretation of history and
(07:51):
victimhood and so forth,but also cause and effect.
He thought our grain is down,collectivized farms, they'll boom, so
there's a cause andeffect To the ideology there.
And looking around,I think our national conservatives,
they believe their ideology,
that there's a victimhood of China did badthings to us and tariffs will solve it.
The European Greens,they believe fundamentally and
(08:14):
we are sinful, we need to decarbonize andcause and effect,
electric vehicles willmake the weather cooler.
So people believe their ideologies,that was a big insight you gave me.
But you said things about the economics,so I'd like to understand how that works.
You said that they are stillMarxism-Leninism control the means of
production, but they don'tcontrol the means of production.
(08:36):
China is very differentfrom the old Soviet Union.
There is a vibrant private sector,semi-private, whatever it is, but
there's a market economy.
There isn't a five year plan.
>> Frank Dikotter (08:48):
Well, there isn't.
>> John H. Cochrane (08:49):
Well, this is what I want you to explain.
The other thing I learned from your book,which was a real
eye opener was we think of the 1970sas when the top said aha, go be rich.
But in fact your book said no,it was happening on the ground level and
they scrambled.
They knew they had to allow it orelse they would be kicked out of power.
(09:10):
So it was not a top down thing,it was in fact the limits,
it was sort of a new economic policy,we have to allow this.
But is that temporary?
Do they want to put backin five year plans and
government ownership of everything?
So how do they think cause andeffect in ways that can enlighten us,
both the strategic question andthe economic question?
(09:31):
And how does this square, if it's the samethought that produced five year plans in
the Soviet Union, how does it producethis very innovative, somewhat private,
supremely competitive, still moneyhanding around semi-market economy?
>> Frank Dikotter (09:46):
Yes, well it is a Marxist economy,
whether you like it or not.
And they have no desire to callit a capitalist economy or
to have a capitalist economy.
Take the banks forinstance, what is Marxism?
Marxism is the state ownershipof the means of production.
What are the means of production?
It is everything that goesinto the production process.
It means the land, which in Chinaas you know, belongs to the state.
(10:11):
Not a single farmer owns a plot of land,not a single landlord does anything.
It is about capital, who owns the capital?
0.5% of all banking assets belong
to private banks, 0.5%.
99.5% of all capital is in state banks,okay?
(10:33):
So compare that tothe United States of America.
The raw resources are indirectly ordirectly controlled by the state,
energy is directly orindirectly controlled by the state.
There's an enormous clout there.
What these people set off to do fromthe late 1970s onwards is not so
(10:54):
much destroy socialism ormove from socialism to capitalism,
is to make socialism work better.
But that's not really the key point,
it's not just about the abilityto provide subsidies,
it's the ability really tocontrol the population.
(11:15):
This is something that we tend to forget.
We complained about subsidies,we think that we
can't compete because we have too muchred tape, because they're better at it.
But in effect, what you have inthe People's Republic of China,
and you've had it since 1949,is an apartheid system.
(11:37):
An apartheid system in which a largeproportion of the population,
precisely 40% of the workforce, 300million migrant workers, have zero rights.
They're an underclass of people,they don't have access to welfare,
to health, to social security,to education for their children.
(12:01):
They can be removed at the beck andcall of the state.
The state has enormous powers, can crushdissent, can displace entire population.
>> John H. Cochrane (12:12):
I wanna push you just a little bit before and sorry, Niall,
you get your turn next.
Every other socialist plannedeconomy on the planet is a disaster.
>> Frank Dikotter (12:21):
Yes.
>> John H. Cochrane (12:22):
China is not yet a disaster, are you saying
the contradictions of socialismhead us inexorably to Cuba,
Venezuela, North Korea,East Germany, Soviet Union?
And there's a fundamental weakness therethat all the China is gonna ignores us,
(12:42):
or is it somehow different?
>> Frank Dikotter (12:49):
The best term for it, I mean, you can shop around,
is it a command economy?
Is it mercantilism?
The best way of looking at itis to call it a war economy,
W-A-R, for your American listeners.
So a war economy is when at onepoint a state decides that must turn
(13:09):
factories which produce, let's say washingmachines into factories that produce
armaments because the as an overridingtarget which must be met at all cost.
So it will curb rights, human rights,political rights, social rights.
This can work as it did forthe United States and
(13:31):
England during the Second World War.
Hayek produced a book called the Roadto Serfdom in 1944 to warn governments,
in particular the UK against thetemptation to continue that war economy.
What you have in the PRC is basicallya war economy all along, it never stops.
(13:51):
It can control the population,it can transfer people,
it can have them work in coal mines fornext to nothing,
it can harness resources of the state,it can crush the scent.
There's no separation of powers there,there are no unions.
>> John H. Cochrane (14:06):
War economies are stupendously inefficient.
It lasts for four years and then if youtry to run it permanently that way.
So are you saying the Chinese economyis gonna be stuck in a stupendously
inefficient state orhow is it producing stuff that's cheap,
that's technically innovative inways that war economies don't do?
>> Frank Dikotter (14:26):
War economies are not stupendously inefficient,
they achieved the goal quite wellduring the Second World War.
They can do it very well short term.
What happens is that as withall socialist economies,
it is incredibly expensive andincredibly wasteful.
Which is why the Chinese economyhas not been stagnant but
in recession since COVID,which is why it has a debt ratio
(14:51):
to GDP of 350% andGod knows how much hidden debt there is.
Which is why the unemployment is soenormous,
probably more than 20% for young people.
I mean you can look at the shine,the surface of this economy,
you could say, look at these cities,it's absolutely wonderful,
(15:15):
look at the bullet trains,isn't that just astonishing?
Well, yes, the China rail, the company
is $900 billion in debt, $900 billion.
You can applaud for instance,the peer-to-peer system that
(15:36):
appeared I think around about 2016,17, 18, 19.
Until, of course, it collapses withthat to the tune of $120 billion,
which makes the wholeMadoff Ponzischeme look like a walk in the park.
But the bicycle scheme,the bicycle, Go highest scheme was
(15:59):
applauded as a great Chinesetechnological breakthrough,
which could only possibly happen in China.
You can just pick up a bike andyou can bike around, subscribe to it for
next to nothing until thattoo collapsed in 2018,
producing mountains andmountains of bicycles.
(16:20):
So this, the waste of it is enormous.
Within that waste,uses to say there are achievements.
I mean,how could there not be achievements?
Stalin wanted the bomb,Ma wanted the bomb, they got the bomb.
Now Huinta always say,wanted the ballpoint pan.
(16:42):
And he got the Ballpoint[LAUGH] some 15 years ago.
Xi Jinping wants an electric car.
He's got it.
So the world is now applauding BYD but
remember what I just said aboutunfree labor being used in China?
(17:03):
It now turns out there is unfree laborused in BYD factories in Brazil also.
How long does it last?
How long will it ride?
How long an average Americancar will last 13 years.
How long will an average Chinese car last?
We don't know.
In fact, you should go to Russia,find out how it works,
because they have a lotof Chinese cars there.
>> John H. Cochrane (17:21):
So you're saying, paper tongue.
You're saying, like people worryingabout Japan was gonna overtake us.
Japan was actually a reasonableeconomy when it stopped growing.
But you're saying,China is going to stop and
run into the inherent contradictionsof socialism pretty darn soon.
>> Frank Dikotter (17:39):
I wouldn't want to predict the future, but
Japan had a pretty damngood working economy.
When you talk about a Japanese recession,
I wish we could have a Japanese economy.
>> John H. Cochrane (17:51):
It didn't overtake the U.S.
>> Frank Dikotter (17:53):
No, it did not.
And China never will.
Not with this present system.
It had three engines of growth.
Investment in infrastructure,where they pour zillions upon zillions
into infrastructure to the extentthat you have empty trains,
empty airports, empty railways,empty cities standing there.
(18:13):
So you can't do that forever,never mind local government debt.
Then the second engine of growth isreal estate, which is basically a Ponzi
scheme that has going on for solong that even that bubble had to burst.
Normally, in a socialist economy,you can control all of that.
You can constantly postpone the crisis andthe day of reckoning.
(18:36):
No enterprise has to go bankrupt in thePeople's Republic of China can always be
rescued.
But that bubble did burst in2020 with Evergrande and others.
So what you've got is one engine remainingwhich is manufactured and exports.
So precisely as the world wishes tosomehow become less entangled with
(18:59):
the PRC, the People's Republic doublesdown and wishes to export even more.
>> Niall Ferguson (19:06):
One can be skeptical about the economic achievement, of course,
Frank, andfind all kinds of structural problems.
Still, if one goes Back to the 1990s,the Chinese economy
is 7% the size of the US economyon a current dollar basis.
Now it's more like 70%.
(19:27):
That's an undeniable achievement.
But I don't want to talk about thatbecause I actually don't think that's
the interesting thing.
For me, the interesting thing iswhat do they do with this power?
They've acquired a greater manufacturingcapability than the United States.
(19:47):
It's now roughly two timesthe manufacturing value added of
the United States.
20 years ago we had twotimes what they had.
What do they do with that?
My big question for you, Frank,has nothing to do with GDP and
how many bicycles were left in a heapat the end of the cycle scheme.
It's do they go to war over Taiwan?
Because authoritarian regimes overthe last hundred years have this way,
(20:10):
as I suppose you've noticed too of goingto war, particularly if the economic and
social contradictionsbecome unsustainable.
Is that what we should beworried about and talking about?
>> Bill Whalen (20:21):
Yes, Niall,
can you actually add to yourtheory what your theory is and
what's going to happen with China andTaiwan?
You've been pretty specific about this.
>> Niall Ferguson (20:28):
Well, regular viewers know that I think we're in Cold War II and
we've been in it since about 2018.
And just as Berlin andCuba were crucial places in Cold War 1,
Taiwan is the crucialplace in Cold War II.
They think it's theirs.
We kind of acknowledge that itis have done since 1972 and
it just happens to be where allthe most sophisticated semiconductors
(20:51):
get manufactured for Nvidia andtherefore for all the big tech companies.
And so my hypothesis is at some pointvery soon the Chinese are going
to take advantage of their enormousmilitary build up which is a part of
their manufacturing boom, andtake that island, take over Taiwan.
That's the big question that I want tohear Frank's answer to because Frank knows
(21:14):
much more about China than any of us,Frank?
>> Frank Dikotter (21:16):
No, I don't.
And this is the key point, you see,
this is why you shouldn'tcall me a China expert again.
I'm referring to the proverbial plumber.
I'd rather be a plumber.
There are too many China expertswho seem to know everything.
But the point is we know very little.
We know very little about what theyreally do about the real economy.
What are the figures?
They're all being manipulated.
(21:37):
Their economy the last five years havebeen probably the numbers have been
inflated by about 3%.
>> Niall Ferguson (21:43):
But, Frank, you say, listen to what they say, and
I listen to what Xi Jinping says.
I just read the article that he publishedat the time of his visit to Moscow,
and it very explicitlyreferences Taiwan and
restates his intention to assertBeijing's authority over it.
So the question really is based on yourhistorical understanding of the CCP and
(22:06):
of the PRC, is it likely that they takethe kind of risk that we just saw Putin
take over Ukraine?
That's what I really want to figure out.
>> Frank Dikotter (22:16):
First of all, we're not in World War II,
when in Cold War I,that thinking has never changed.
The public declarations about taking over
Taiwan go back to probably 1949.
Deng Xiaoping, even before hecame back to Power in 1979, said,
(22:39):
we will not hesitate to usemilitary force to take Taiwan back.
Hu Yao Bang, who was seen to bethe great reformer in the 1980s himself
declared openly, we may not even wait andtake Taiwan back.
There have been endless missile crisis.
The first one, the first bombing ofan island that belongs to Taiwan,
started, of course,in 1957 under good old Chairman Mao.
(23:03):
So this has been going on fora very long time.
They are determined to take Taiwan.
There's absolutely no doubt about it.
So there are two separate issues.
One is that you must armTaiwan to the teeth.
And the reason for that is very simple.
(23:24):
You do not know what they will do.
You do not know whether it is huff andpuff or bluster.
You do not know what a dictatorwho teeters between hubris and
paranoia might decide to do one day.
So your only defense is to prepare forthe worst and hope for the best.
(23:46):
So that's one issue.
But the other issue istheir actual capabilities.
And here I'm a little bit worried because,of course,
you should neverunderestimate your opponent.
But it is also a strategic mistaketo overestimate your opponent.
And there is very clearlya cognitive war going on here.
(24:10):
Where day in, day out,the propaganda machine from the PRC tells
us about this weapon and that weapon andhow determined it is and
how powerful it is andhow it will never hesitate and
how it could take Taiwanfrom one day to the next.
That is called cognitive warfare.
(24:30):
And it is designed to instill into you and
all others a sense of resignation.
The idea that somehow, well,if they're so determined and
they're so powerful, why should we meddle?
It is designed to have potential allies ofTaiwan walk away from the Taiwan scenario.
(24:52):
That's the purpose ofthat cognitive warfare.
The last great military breakthrough.
Read the South China Morning Post,breakthrough every day.
A shoddy paper that has become.
It's called, I believe,the Drone Mothership.
That's the latest I read,I think, about three days ago.
It's a massive sort of floating soapboxwhich accompanies a whole fleet of drones.
(25:19):
What is it?
It's a drawing.
It's a drawing andit's an AI generated drawing.
It doesn't even exist.
But this goes on time and again.
What about that stealth fighter, the G20?
Maybe HR can tell us how manypeople have actually seen,
how much footage do we have ofa J20 actually firing a missile?
(25:43):
My understanding is thatthere's one photo on
the Weibo website run bythe People's Liberation Army.
I mean, the Shandong aircraft carrierpropelled by eight oil boilers.
Does it ever move awayfrom coastal airfields?
(26:04):
I think not, because it cannottake any planes in choppy weather.
What about the submarines?
Well, there's this huge effort tocreate this image of a stable,
powerful empire, militarily.
And of course, also economically thatgoes back to this whole tariff of war,
(26:26):
as if China couldn't be bothered andwill sit through it strong and confident.
But it is not, it is not.
>> H.R. McMaster (26:34):
Frank, I think this is a really important point.
And the cognitive warfare goesbeyond just sort of bolstering this
image of invincibility and power andfutility and resisting it.
There are signs of weakness in the PLA.
Of course, as a military officer, you'rekind of trained not to underestimate your
(26:55):
enemy, but as you mentioned, there'sa big cost in overestimating your enemy.
And the other signs I think of realtrouble in the PLA are a lot of these
purges that have happened ofsenior military officers,
which seems there are two schoolsof thought on this, Frank.
And I know of course,you're very humble and
reasoned about this because you know somuch.
(27:16):
You say that we can't predict thesethings, but do you think these weaknesses
that you see in the PLA senior leadership,or evidence of corruption?
Do you think this means that Xi Jinping isin a strong position because he's exerting
his authority?
Or do you think that it's showing somecracks in Xi Jinping's leadership?
>> Frank Dikotter (27:36):
I think it's a hugely important question and
ultimately it comes down to everything.
It comes down to what weknow about the economy,
what we know about fentanyl,what we know about the army.
And the question is the following.
How good is the center ableto control local governments?
(28:02):
That's what it boils down to.
So the broad history in a nutshellis quite straightforward.
Good old chairman Mao builds up a powerfulcentralized state during the 50s and
60s, which he then proceeds toundermine for all sorts of reasons.
Most of all, his fear that hemight be undermined by others.
(28:23):
And the cultural revolution prettymuch destroys the organization of
the Communist Party of China,which then has to be rebuilt for decades,
starting with Deng Xiaoping,Jiang Zemin and others.
So now Xi Jinping has at his disposala much more powerful centralized state.
But can the writ from Beijing go allthe way down to a local government?
Can he command a county, a province,
(28:47):
to actually followthe edicts from Beijing?
On for instance,stopping fentanyl production or
taking care of the environment andtackling pollution or
respecting whatever feeblerights there are for
migrant workers orget the army back in shape?
(29:09):
Can he do that?
I think the answer is no, he cannot.
No, he cannot.
I think the reality isthat since COVID 2020,
his grip on the population at large andlocal governments is slipping.
And the constant purges in the army,the last one was He Weidong,
(29:30):
which ironically meansprotect the East Weidong.
This number two in command of the army,that's pretty high up.
Well, that shows you thathe is deeply worried.
>> Niall Ferguson (29:44):
But Stalin purged his military elite too.
Stalin in many ways looked as if he wasrunning the Soviet Union into the ground.
And it turned out that the Soviet Unionwas better able to mobilize
forces in a large conventionalwar than Nazi Germany.
So I kind of wonder here if it's a goodidea to talk down China's capability,
(30:07):
especially if you want usto arm Taiwan to the teeth.
I mean, you're giving us lots ofreasons not to bother doing that.
I think I'd rather overestimate China anddeter China than underestimate China and
then have a 1941 moment, which after all,is what the US military worries about.
I mean, you're telling us a prettynegative story about the state of China's
(30:29):
capability.
But at the Office of Net Assessmentbriefed some Hoover Fellows earlier
this year when it still existed.
And told us that China was catching up ata formidable rate in almost every domain
of military capability.
If the US military thinks thatmaybe they're overestimating it.
But it certainly seems like a goodreason to bolster Taiwan's defenses,
(30:53):
which we haven't really done,certainly not to a sufficient extent.
But can I ask a totallydifferent question before
we get completely boggeddown in the present?
It's a historical question aboutsomething you mentioned a minute ago, and
that's the Cultural Revolution.
Because I think to understand Xi Jinpingand his entire generation of Chinese
leaders, you need to understandthe impact that that event had on them.
(31:17):
Now, you've written what I thinkis the best book on the subject.
I'm not sure how many Americans reallyget what the Cultural Revolution did
to Xi Jinping in particular, but perhapsalso to his generation more broadly.
Can you talk a bit about that?
>> Frank Dikotter (31:32):
I can, but not without mentioning that when Stalin went into
Finland, it didn't go all thatwell after all these purges.
And that tiny little country calledFinland put up a pretty damn good fight.
And Stalin was taken aback to the extent,of course, that Adolf Hitler thought,
(31:53):
look, this is a paper tiger thatwe have in the Soviet Union.
And he made that fatal mistake.
And American equipment did a lot for theSoviet Union in the in World War II, but
please go ahead.
But anyway, let's not getback to the Second World War.
Again, I wish to say that there isno contradiction between arming
Taiwan to the teeth because it'san extraordinarily unpredictable
(32:18):
situation in which peoplecan make massive mistakes.
And the attempt to have not just a moreaccurate understanding of what is
happening with the military, butnot go for the cognitive warfare in
which they portray themselves to befar stronger than they really are,
which will result in peoplejust walking away from it.
(32:41):
Anyway, back to the Cultural Revolution.
In a nutshell, what is it?
It sounds like a very confusing period.
But in a nutshell,it's Chairman Mao who is responsible for
having initiated the deathsthrough famine and
violence of well over 45 million people.
(33:05):
A chairman was seen to be responsible for
that disaster during the greatleap forward from 1958 to 1962.
And he is worried that he willundergo the same fate as Stalin,
namely that there will benot destalinization, but
denotification, and he will be a victim.
(33:26):
So what he does with the CulturalRevolution is that he allows, at first,
students to attack their teachers,but gradually just about any
ordinary person to take to task any partyofficial all the way to the very top.
He calls it bombard the headquarters.
(33:47):
What he wants is that ordinarypeople ferret out any
possible real imagined enemyof Mao Zedong and his project.
So the result is that people likeXi Zhong Xun, the father of Xi Jinping,
who is a very highly placed officialin the party hierarchy, and
(34:10):
others get attacked, get criticized,get occasionally interrogated,
paraded in front of other people,tortured in some cases to death,
as was the case with Liu Shaoqi,number number two.
So in effect, Mao is usingthe people to purge the party.
(34:31):
So the party members who manageto survive, like Deng Xiaoping,
like Xi Jinping,like pretty much all of them,
they are determined to nevermake that same mistake again.
They are determined never to allowordinary people to have a voice.
(34:53):
And that's what happenedin Tiananmen Square, 1989.
A display of sheer steel determination to
crush ordinary people andnot let them have a say.
So Xi Jinping is somebody who'sprofoundly anti-democratic.
>> John H. Cochrane (35:14):
I wanna follow up on the deterrence question cuz I hope we're
still deterring.
If we wanna deter, we know Chinawants to take over Taiwan, so-
>> Frank Dikotter (35:23):
Absolutely.
>> John H. Cochrane (35:23):
The question is what's their strategic calculation and
what is their calculation aboutthe military success of it?
But also I wanna probe the economicelement of deterrence cuz on the military
question since we're seem to be afterthree years we got tired of Ukraine and
are seem to be happy togive Crimea to Putin.
(35:45):
Will the US actually go fighta war 5,000 miles away over
a country that we actuallysay is part of China?
I think there's some ability is one thing,but will is another.
I like your military part of, well,
Taiwan should be armed to the teeth andalso trained to the teeth.
(36:06):
It's not just a question of weapons,it's their ability and
ability to use them becausethat's prepositioned.
We know they'll fight back.
It's not clear that we will.
But there's a great inconsistency betweenwhat you said about economics that things
are falling apart internally.
So, well, what we'll do is we'll havethis huge manufacturing thing and
we'll sell it around the world.
(36:26):
Of course, if they invade Taiwan and
if the rest of the world is with us,that gets turned off instantly.
And that strikes me as if they canput those two and two together,
the greatest possible deterrence.
Of course what that relies on is not justus turning off China trade the minute they
invade Taiwan.
It's the rest of the world beingwilling to go along with us to say no,
we don't care who makes them.
(36:47):
We will buy your $15,000 BYD cars,not $100,000 US cars, thank you very much.
So we need our allies on that.
But if that strikes me as one where wemight have a little more will than for
actual fighting andone where the Chinese might shrink, but
they have to add the two and twotogether that their own economic plan of
(37:09):
immense manufacturing saving us wouldfall apart if they invaded Taiwan.
Do they understand that, and is thata reasonable path towards deterrence?
>> Frank Dikotter (37:19):
I'm sure they do.
And even just the blockade ofTaiwan would be a self blockade and
60% of China's oil is imported.
Massive amounts of coal is important.
Energy depends still to about 50% on coal
with Weber forced laborworking in coal mines and
(37:44):
aluminum smelters foryour BYD cars, by the way.
>> John H. Cochrane (37:50):
Well, and Australian coal as well.
>> Frank Dikotter (37:52):
Yes, so, but the point I'm trying to make is that they depend
enormously on imports andnot just exports.
So a blockade of Taiwan wouldbe very difficult to sustain
without massive economicpain to themselves.
The point really is that wejust don't know a particular
(38:13):
decision might seem to be notjust irrational, but suicidal.
But there's no lack of dictatorswho have made such decisions.
>> John H. Cochrane (38:25):
That's why I was asking you about their sort of cause and
effect thinking.
Mao thought that the Great Leap Forwardwas gonna be wonderful industrial policy.
We pass the US in steel,every farmer will make steel.
He just had the cause andeffect wrong there.
So it's important to know whattheir cause and effect thinking is.
>> Frank Dikotter (38:41):
And the key point is also that at the end of
the Great Leap Forward, by 1962, tensof millions of people had been worked,
starved, beaten to death, andit didn't really matter all that much.
In other words, war economies,communist societies
are willing to bearan enormous amount of pain.
>> Bill Whalen (39:05):
I can shift gears, gentlemen, though.
HR traveled to China with President Trumpwhen he was the president's national
security advisor.
And I think we would agree it'd be a veryTrumpy thing to do a summit with Xi at
some point in the second term.
I'd be curious, Frank, as to where youthink Xi would optically wanna do this,
if he'd wanna host in Beijing,would he be willing to go to Mar-a-Lago or
the nation's capital?
(39:26):
But here's my question to the panel.
If these two got together and Trump,in Trump fashion, wanted to do a deal,
what's on the table in termsof talking about a deal?
Is it fentanyl, which HR has just writtenabout, Niall, is it Taiwan, John?
Is it issues with manufacturing atApple and others leaving China?
Niall, why don't you start this,what do you think would be on the table?
>> Niall Ferguson (39:45):
Well, first of all, I don't think it's happening at Mar-a-Lago,
because that was last time.
And we've just seen inthe game of tariff chicken
that China had escalation, dominance and.
Scott Beston had to standthe President down,
defer the reciprocal tariffs,go to Switzerland and
(40:08):
negotiate a kind of tariff truce,if not a full end to the trade war.
So I would imagine ifit's going to happen,
that it happens in Beijing andI could see Trump going for that,
as he does have a kindasecret Nixon fantasy life.
Trump in Beijing would rhyme withNixon in China, the question
(40:32):
is how broad would the range of thediscussions be, would it include Taiwan?
Would it include semiconductors?
The administration,as I've been saying all along this year,
has a huge tension within it betweenthose who are dealmakers, and
perhaps that would include the President.
And those who are really quite hawkish onChina and regard tariffs as just one of
(40:57):
a whole range of instruments we need touse to contain the Chinese challenge.
And I think if you were on the morehawkish side, you'll a little despondent,
see Mike Waltz leave the positionof national security advisor and
Alex Wong as number two.
You're hoping Marco Rubiowill stick to his guns as
a Secretary of State andmaintain a hawkish posture.
(41:22):
But I think there is a tension, andanybody in the administration who
takes the China threat seriouslywill be concerned that an open-ended
negotiation between Xi and Trumpmight lead to a concession on Taiwan.
After all, we know from anothernational security advisor, John Bolton,
in his memoir that Trump doesn't regardTaiwan as something worth fighting for.
(41:46):
So I could see a negotiation going in allkinds of directions that would greatly
worry those who are morehawkish on the issue.
>> John H. Cochrane (41:53):
Well, I would think first it would be fun on a personal
level [COUGH] Xi Jinping likes tomake people kowtow to him, and
Trump likes to try tohumiliate his opponents.
That's his way of the big handshake,what he did to Zelensky,
and that's his way of negotiating,so it would be very amusing
(42:15):
theater to see how these twowould try to one-up each other.
But I think the negotiations wouldgo badly [LAUGH], first of all,
it's important to understand whatreally is in your own interest and
what is not in these negotiations.
So I think it is in our interest to deterthe invasion or blockade of Taiwan,
(42:36):
though I think that's actually somethingwe should be a little clear about.
If we don't care about Crimea,why do we care about Taiwan?
But I think that's in our interest,don't blockade Taiwan.
Do we care about China not manufacturingingredients that go to Mexico that turn
into fentanyl?
Is this a cause-and-effect solutionto the fentanyl crisis in the US?
(42:59):
Now, on one end, that gives China an easyout, if you're asking for things that
really aren't in your interest and don'tmatter, they can say, sure, here you go.
And get a lot of whatever they,we get Taiwan, and
we'll promise to do something on fentanyl.
So don't ask for dumb stuff,similarly bilateral trade deficit,
does the bilateral tradedeficit really matter?
I'm sure we're gonna go in andsay, you have to buy American X,
(43:22):
Y, and Z, they can say, sure, and then youtrade away staff you're not asking for
things that are reallyin your own interest.
So let's be clear about really what ourown interest is in negotiations like that.
>> H.R. McMaster (43:36):
Well, there be a lot that's the same, right?
What Xi Jinping would want is he wouldwant the same kind of images that
China wanted to portray to itsown people when Lord McCartney
visited the Xing dynasty in 1790.
And they put up big billboardswith Chinese characters saying
he's come to pay homage to the emperor,and so
(43:58):
he wants these images of supplication anddeference.
And it will be a theater designed tocommunicate that message to the world so
he can bludgeon other countries with it.
But what he'll want that'smore substantive is for
Trump to accede to somekind of a G2 arrangement
where the United States grantsa sphere of influence to China.
(44:20):
Say, dominance over the Indo-Pacificregion in exchange for
his acknowledgment of our primacyin the Western Hemisphere.
To do that, what he'll do istry to manipulate history, and
I'd love to ask Frank about thisbecause I've heard it happen.
He gives this warped view ofhistory that emphasizes China's
victimization duringthe century of humiliation and
(44:43):
then portrays the Chinese Communist Partyas the savior of the Chinese people.
And then, of course, he highlightsthe brutality of Japanese occupation,
certainly, and creates this sorta sense ofa great aggrievement to try to generate
some sympathy for China and the ChineseCommunist Party with Donald Trump.
(45:06):
And so, President Trump is not a studentof history, so it was important for
us to really talk to him about howXi Jinping would try to manipulate
the past to influence Trump'sunderstanding of the present.
And I think that's not gonna change and
what he'll try to do is use kind ofTrump's impulse toward retrenchment and
(45:31):
try to reinforce that with this idea that,hey, we can get along well, we can
prevent World War III if you just grant usthis sphere of influence that is due us.
Because, we're a bigcountry here in Asia and
you're there all the way acrosson the other side of the Pacific.
>> Frank Dikotter (45:50):
Yeah, very much agree with all of it, Trump goes to Beijing,
anyone goes to Beijing,you pay tribute to the emperor, and
when I say emperor, I'm not really joking.
When we talk about the century ofhumiliation, the 19th century,
the biggest expanding empire is not theBritish one, certainly not the Dutch one.
(46:11):
It's the Qing Empire, the Chinese one,and the borders of the Qing Empire,
when it collapsed in 1911,
are the ones that have been maintainedby the People's Republic of China.
So it is, in effect,an empire that has not yet
decolonized, that's the geopolitics of it.
Now, when it comes to trade,what are you going to achieve?
(46:31):
There are two issues oneis what China can do, and
then there is what China would do, nowcan it curb the production of fentanyl?
I already said I doubt it very much,there were debates years ago about
how China should restrain North Korea,can it do that?
Obviously not, in fact,what China can do is quite limited, and
(46:55):
then there's what it wants to do.
When it comes to negotiations,it will always make promises and pledges,
history books to be writtenabout the number of promises and
pledges that have been broken.
It will stall, it will break a pledge,it will modify its conditions,
it will have you come back to thenegotiation table, it will drag it out,
(47:18):
it will tire you until the day you give upor think, there's another deal to be made.
And then the same scenario repeats itself,it's a soap opera.
>> H.R. McMaster (47:30):
Or until you accept the status quo as the new normal,
absolutely right, Frank,these dialogues that you have with
the Chinese Communist Partyare a complete waste of time I mean.
>> Frank Dikotter (47:40):
Exactly.
>> H.R. McMaster (47:41):
And there were people say, well,
there's no harm ever in talking, yeah,I guess there really is a harm in talking.
Because what it does is itallows them to string you along
with these false promises thatthey don't intend to keep at all,
so the fentanyl piece that Billmentioned was this report.
That I was asked to give Xi Jinpingon fentanyl cooperation, but
(48:05):
also law enforcement cooperation broadly.
And, and, you know,
the establishment of these policestations in the United States, right?
To intimidate Chinese American citizens,and of course, none of that changed.
We combated it,we began to compete against it, but
if anybody watched 60 Minutes a coupleof weeks ago, there's still this,
(48:27):
this to coerce Americancitizens on our soil.
>> Frank Dikotter (48:30):
And speaking of interest,
trying at least to limit Chineseespionage in the United States,
that's something that reallyis strongly in our interest.
And the less time we spend innegotiations, distracted with other things
that are sort of for show, the moreyou might make some progress on that,
the promises issue being,of course, a difficult one.
>> Niall Ferguson (48:53):
Frank, Xi Jinping is not immortal,
I don't think he looks to bein particularly great shape.
Who comes next?
What comes next?
Is there any way of imagininga change of direction?
There's no succession plan, clearly, andthat creates risks of its own, doesn't it?
>> John H. Cochrane (49:13):
If I could add to that, Xi Jinping was remarkable,
there was a tradition,not really a constitution, but
we don't have a single dictator for life.
There's a sort of a plan ofregular rotation of chairman, and
Xi Jinping took that back.
I would imagine there's a lot of old guysin China who are still rankling about,
wait, wait, wait, what do you mean?
You get it for life,are we going to go back to a system with
(49:37):
a little bit more scheduledtransitions on the top?
>> Bill Whalen (49:41):
And if I can build on this, as Niall and
John have both mentioned, the man, Frank,is it worth watching The Death of Stalin?
>> Speaker 1 (49:46):
Stalin's dead.
>> Speaker 2 (49:47):
He's dead.
>> Speaker 3 (49:47):
Stalin is dead.
>> Bill Whalen (49:49):
Which rather satirically shows the absolute mess that was dealing
with Stalin.
>> Speaker 4 (49:53):
The answer to that one is yes.
>> Speaker 5 (49:55):
Yes. When I said no problem, what I meant was,
no problem.
>> Frank Dikotter (50:01):
Yes, I, I thought it was, I mean,
I'm a great fan of Steve Buscemi, butI thought it was probably less amusing,
maybe because I'm a historian andI didn't laugh as much as others.
>> Donald Trump (50:15):
But yes, definitely, The Death of Stalin,
the paranoia around it,like Stalin and others,
Xi Jinping spends his day keepingtabs on the people around him.
Number two, three, four, five, six andseven lives in fear of a coup,
a stab in the back, a plot,a bullet that's been rigged, an accident.
The man lives in fear all day long,not to mention his health.
(50:39):
What can he eat?
What can he drink?
He won't approach him withoutgoing through a metal detector, so
that's the life of Xi Jinping.
Does he have time to payattention to anything else?
I doubt it very much, I doubt thatthey'll be able to place a medium sized
country on the map, that's what I think.
He's a caveman Marxist,as Stalin said, a MA, by the way.
(51:03):
Now what's a succession plan?
There isn't one,it's all a sort of struggle for survival.
All these counterfactual approaches tohistory are fascinating in that you
simply don't know.
Somebody you will have underestimated for
a very long time might very wellbe the one who takes the mantle.
(51:27):
But two things are, I think,reasonably well established.
First, like all dictatorships,China is a democracy because every
dictatorship wishes to projectitself as a democracy.
So in principle,it would take one decision
by one man to allow everybodyat every level to vote.
(51:50):
There is a People's Congress,people do vote at every level,
except they have to vote forthe people on the list.
And God forbid that you proposeyourself without being on that list,
you'll end up in jail.
So in principle, it could becomea democracy from one day to the next.
In practice,all of these leaders are deep,
(52:12):
deep into corruption,have family members who own billions.
This is like the Mafia,you run Chicago, I'll do New York.
That's what it is,it's a Mafia running the place.
Does the Mafia going to become democratic?
Maybe, maybe, but I would givehim a good push, I wouldn't wait.
>> Bill Whalen (52:35):
Right, well, gentlemen, we're gonna leave it there.
Frank, we kept you on extra-long,but it was a great conversation,
we could have kept you on foranother hour, I think.
This topic's not going away, so please,
by all means come back and let me addit's an honor to have you at Hoover and
join our formidable stable of historians,Frank.
So, thanks very much forbeing part of Hoover's life.
>> H.R. McMaster (52:52):
Thanks, Frank.
>> Niall Ferguson (52:53):
Thank you, Frank.
>> Frank Dikotter (52:54):
Thank you, it's been a pleasure.
>> Bill Whalen (52:57):
So, gentlemen, since we went along with Frank,
we're not gonna do a B block today,instead,
we're gonna move straightto the lightning round.
[SOUND] Lightning round.
Gentlemen, our first topic, the Trumpadministration has said it will halt
Harvard University's ability toenroll international students and
sponsor international scholars,
a move that impacts about onequarter of Harvard's student body.
(53:18):
Harvard, in response, filing fora temporary restraining order to block
the Department of Homeland Securityfrom carrying out said move.
Before I get your answer,gentlemen, I beg you, I beseech you,
Condoleezza Rice is comingon our show this summer,
you're gonna have a longconversation about universities.
So, in the spirit of the lightning round,just quickly off the top of your head,
your response to this story, Niall?
>> Niall Ferguson (53:40):
Well, I was a professor at Harvard for 12 years, I wrote not so
long ago Harvard brought this upon itself.
But I think that the Trump administrationis overreaching, they had a case,
a pretty good case, that racialdiscrimination had been going on
at Harvard,they should have focused on that case.
I think by firing somany bazookas at the university,
(54:03):
they've created a unitythat wasn't there before.
Heaven knows, even the disgruntled former
president Larry Summers israllying around the Veritas flag.
So, my sense is there's a little bitof James II vs Oxford going on here.
James II took on Oxford backin the 1680s and Oxford won.
(54:24):
So, remember, presidents,you get four years, universities,
they tend to last for centuries.
So, although this is going really,really badly for Harvard,
I would say the administrationhas probably overreached and
will lose in court atleast one of the cases.
>> Bill Whalen (54:40):
John, your quick take.
>> John H. Cochrane (54:41):
To be effective, you wanna do things to all universities,
not just Harvard.
So, publicized war on Harvardmight be good for ratings, but
I'm not quite sure what it does.
Taking international studentsis a wonderful export
that the United States does.
One of our great industriesis large universities,
it's not clear why you wouldwant to hamper those exports,
unless that's just one thing youcan do to be mean to Harvard.
(55:05):
And I think the more significant news wasthe lawsuit they have against Harvard.
But everyone else is guilty forracial discrimination in faculty hiring,
where it was just plasteredall over the websites.
We are violating the Civil Rights Act,look at our racial quotas.
I think that was a more effective one and
(55:25):
one that I would hope they would continueand generalize to other universities.
>> Bill Whalen (55:30):
HR? >> H.R. McMaster
idea, I mean,I think about the impact on individuals.
And these are people who, many of themcoming from developing economies,
had this great dream of goingto the United States for
university and going to Harvard,
which they had in their mind as kindof the ultimate academic experience.
(55:55):
And now that all those hopes are dashed,and that's terrible, and
I worry about the.
Reputational damage to the United States.
There are real issueswith Harvard University.
But as my colleagues here have said,focus on those issues.
Don't do damage toinnocent bystanders here.
Okay, moving on gentlemen.
The National Football League ownersearlier this week gave permission of their
(56:17):
players to play flag football inthe 2028 Summer Olympics in Los Angeles.
Niall, do we even bother asking you ifyou think this is an Olympic sport?
>> Niall Ferguson (56:25):
It's clearly not.
>> Bill Whalen (56:28):
Okay, let's take this a different direction.
Can the three of you name one Olympicsport you would like to eliminate?
I think I know where Niallis on this patellus, Niall.
>> Niall Ferguson (56:35):
[LAUGH] Lord.
I mean, just eliminate all the onesthat the ancient Greeks didn't do and
then the thing will be over sooner.
>> John H. Cochrane (56:47):
There's a whole bunch that 19th century Brits did that are just
maintained.
The only reason anyone does them isbecause they're Olympic sports like
Lusions and things like that.
>> Bill Whalen (56:56):
The Aussie used to do tug of war.
HR, one sport that you'd get rid of?
>> H.R. McMaster (56:59):
Well, I think they already got rid of it,
the breakdancing sport.
>> Bill Whalen (57:04):
There it is.
>> H.R. McMaster (57:06):
I think it's already gone.
I think it's already gone.
>> John H. Cochrane (57:10):
We need to bring sail plane competitions back to the Olympics.
It was gonna happen in 1939 and then someterrible things happened in Europe and
we didn't do it.
>> Bill Whalen (57:19):
Okay, item number three.
It's graduation season and
Forbes magazine has produced a listof worst paying college majors.
These all pay about 40 to $42,000 a year.
The list includes foreign languages,general social sciences, performing arts,
anthropology, early childhood education.
Did any of you three consider a differentmajor at one point in your college
(57:39):
years, John?
>> John H. Cochrane (57:40):
Well, I started off in aeronautical engineering and
moved to physics and only turned to myreal major, economics in graduate school.
So yeah, it's good to look around.
I think this is interesting.
Maybe where economics has had some damage,
there was a finding that goingto college raises your wages.
So we subsidized college, but it's notclear that general social sciences and
(58:00):
performing arts raises your wages.
So we're now in a situation wherewe've over subsidized a lot of fairly
unproductive degrees with allsorts of unpleasant economic and
social consequences.
>> Bill Whalen (58:12):
HR, did you make any lateral moves once you got to West Point?
>> H.R. McMaster (58:15):
I didn't have a choice, right?
When I went to West Point,
you got a Bachelor of Science inengineering whether you wanted one or not.
And then you could doa concentration in another field and
I chose international relations.
But it's a really solid,broad based curriculum at West Point.
I mean, I think that hasn't changed,but they have a choice now and
(58:35):
can choose a major.
So I had to suffer through, I mean, Idon't know how many semesters of calculus.
And they didn't really care aboutyour self esteem back then, Bill.
So they would section you after a test and
they would re-section youfrom section 1 to 13.
And if you were in section 13,seat 12, we called that the ejection
(58:57):
seat [LAUGH] because your GPA probably wasnot gonna allow you to pass that course.
>> Bill Whalen (59:04):
All right, Mr Niall.
>> Niall Ferguson (59:06):
I never considered reading anything other than history.
Perhaps I should have done.
I sometimes think that the Scottish andEnglish systems directed me away
from mathematics prematurely whenit had been a strong subject.
And I would have been better off ifI'd been able to somehow do a double
major in history and mathematics.
(59:28):
But that didn't exist.
I don't think it does to this day.
But most historians would benefitfrom being more numerate.
And most people who are good atmathematics would benefit from knowing
more history.
>> H.R. McMaster (59:41):
I don't wanna know any more math than they forced me to learn at
West Point [LAUGH].
>> John H. Cochrane (59:46):
There's only one time in your life you can learn math.
You can read history when you get old, but
there's only one time in yourlife when you learn math.
And everybody's education should includecalculus, differential equations,
linear algebra, statistics, probability.
Little bit of complex analysisis really good for you.
>> H.R. McMaster (01:00:02):
I got all that.
>> John H. Cochrane (01:00:04):
Universe runs by differential equations.
And once you see that, you'll never.
>> H.R. McMaster (01:00:09):
But John, I don't remember any of it.
I mean, I took it all.
I don't remember any of it.
That squiggly line that's gotlike a little number at the top.
I don't even know what that is.
>> John H. Cochrane (01:00:18):
How do you calculate where a tank shell goes?
>> Bill Whalen (01:00:23):
Niall could have cornered the market on being a math historian.
>> Niall Ferguson (01:00:27):
Yeah, it certainly wasn't very competitive.
>> Bill Whalen (01:00:29):
Well, that would have sold books.
>> Niall Ferguson (01:00:32):
I should say that in the new University of Austin,
we very deliberately makethe undergraduate program
a mix of classical books andhumanities and hard math so
that they have the kind of skillsthat John just referenced.
Sure, they may forgotten them allby the time they're in their 60s.
But HR, there was a time when it wasquite good that you knew something about
(01:00:54):
the physics and math of ballistics.
>> John H. Cochrane (01:00:56):
You at least know what's out there.
You know what it is you don't know.
And that's actually very important.
>> H.R. McMaster (01:01:01):
That is good.
It is good to know you don't know,absolutely.
>> Bill Whalen (01:01:04):
And our final item.
A Pew Research Center survey recentlyfound that 30 of Americans consult
astrology, horoscopes, tarot cards, orfortune tellers at least once a year.
But they do so for fun,not to make life decisions.
Are any of you are surprised or
did your fortune tellers alreadytell you about this, John?
>> John H. Cochrane (01:01:23):
Not surprised.
And I think actually more people aremaking decisions on that basis than you
might think.
But of course, listening to the expertsthese days doesn't necessarily get you any
better knowledge than the fortune tellers.
>> Bill Whalen (01:01:37):
Okay, HR is there a magic 8 ball somewhere in that office or?
>> H.R. McMaster (01:01:40):
No, no, I think this trend is like,
it's derivative of this kind ofsense of loneliness of some people.
I've just talked to your friends ormaybe the lack of spirituality.
Anyway, I just thinkit's kind of silly and
might be connected to kind of this revivalof a lot of writing about loneliness and
(01:02:01):
how people are disconnectedfrom a sense of community.
>> Niall Ferguson (01:02:07):
One of the more interesting predictions that
Henry Kissinger made late in his lifewas that as artificial intelligence
proliferated and more and more thingswent on around us that we didn't really
comprehend, superstition andmagical thinking would make a comeback.
The percentage you just quoted, Bill,surprises me because it's relatively low,
(01:02:27):
and I would guess it's probablyfairly stable over time.
There was always an astrology columnin the newspaper when I was growing
up as a kid, and
I always thought it bizarre that such athing should exist in the 20th century and
the fact that it still exists in the 21stcentury probably shouldn't surprise us.
We have a great propensity formagical thinking,
(01:02:47):
partly because we didn't do enough math,John?
Really, really good math.
They would understand a bit better howthe universe works and they would realize.
>> H.R. McMaster (01:02:57):
Enough with them.
>> John H. Cochrane (01:02:59):
Math is taught too abstractly.
Math, applied math.
You should take a physics one classwhere we see how the math moves
things around and explains.
I don't think it's anyhigher than it's been.
And you wanna see magical thinking.
There's magical thinking all overthe place and not just you may.
But if you're raised by a physicist asI was, you're just told all the time,
(01:03:22):
the laws of nature basicallyhave this covered.
>> Niall Ferguson (01:03:26):
And yeah, you can look at the stars, but
what you actually need to understandis astrophysics not astrology.
>> H.R. McMaster (01:03:33):
I'll tell you, physics was okay with for me.
So was thermal fluid dynamics, butman, I mean, calculus, probability,
statistics, all that stuff was just.
It was just unintelligible to me.
So anyway, enough with the math, guys.
>> Bill Whalen (01:03:48):
Speaking of magical thinking,
John, we owe you because our B blockwas gonna be the big beautiful Bill.
We were gonna have a conversationabout taxes and spending, and
if that's what magical thinking,I don't know what it is.
>> John H. Cochrane (01:03:57):
[LAUGH] The big beautiful mess?
>> Bill Whalen (01:04:00):
Big beautiful mess.
All right, gentlemen,we'll leave it there.
And I'm gonna miss your smiling facesbecause we're not doing a show until about
midway through June.
Our guest is going to be Rick Caruso.
For those not familiar with Mr Caruso,
he's a very prominent developerin Southern California.
He ran for mayor of Los Angeles in 2022.
He may run again, we'll see.
But we're gonna have a conversation aboutwhat exactly bedevils the City of Angels.
(01:04:23):
If, like San Francisco,it's in a doom loop.
And it's a very good conversationbecause LA is in a very bad spot.
By the way, the world is comingits way in 2028 for the Olympics,
which we talked about recently.
So, you don't wanna miss that and thesurest way not to miss it is to subscribe
to our show on whatever platform you'recurrently watching or listening to us.
You can also get to us through the HooverDaily Report, which you subscribe to.
(01:04:43):
You get that through hoover.orgcomes through inbox weekdays.
It means that every time Niall,John, or HR in the news,
it'll show up in the Daily Report.
I'd add, by the way, that Niall,John and HR are prolific writers.
John has the excellentGrumpy Economist blog.
Niall writes for a Free Press.
HR just started a subset column,so you wanna catch them there.
And our three good fellowsare also regulars on X.
(01:05:07):
They all have Twitter accounts as well,so you can get them there.
On behalf of the GoodFellows, Sir NiallFerguson, John Cochrane, HR McMaster.
I hope you enjoyed the conversation andwe will see you soon.
Till then, take care.
Thanks again for listening.
>> Presenter (01:05:23):
If you enjoyed this show, and
are interested in watching morecontent featuring HR McMaster,
watch Battlegrounds alsoavailable at hoover.org.
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