Pradyu Prasad - Imperial Japan, the God Emperor, and Militarization in the Modern World

Okay, today I had the pleasure of speaking with Pradyumna Prasad about the book, Hirohito and the Making of Modern Japan by Herbert P.

Figgs.

Pradyu is an incredibly smart young guy.

He has a blog and a podcast called Bretton Goods, which you can find at brettandoods.supstack.com.

Just some context.

In the last quarter of the the conversation, we were discussing our budding blogs and podcasts.

And that discussion was recorded before the crazy events of the last week or two happened.

But, you know, it might give you some interesting window into how we were thinking about these projects of ours before, you know, the crazy shit started happening.

But yeah, I hope you enjoy and thanks for watching.

Cool.

All right.

Today, I have the pleasure of speaking with Pradyumna Prasad,

who is recently graduated high school in Singapore.

And now he just received an emergent ventures grant very recently to continue work on his great podcast and blog.

Excellent, excellent.

So yeah, you got the emergent ventures grant.

What are your plans?

What are you doing?

What am I going to do with it?

At the moment, I'm working on a bunch of stuff on reserve currencies.

It has been an obsession of mine for a very long time.

So it's all the all the reading is going to end up in writing at some point.

On the longer term, I want to have a blog where I can answer every single economic history question or economics question I don't know the answer to, and nobody else has the answer to, I can answer it here.

So

pretty much going to be a mini encyclopedia of questions I'm interested in.

Excellent, excellent.

Okay, yeah, I'm looking forward to what you produce.

And for the time being, today we're discussing this book you recommended to me, Hirohito and the Making of Modern Japan by Herbert P.

Bix.

And so just to give a little bit of context, well, actually, so let's just say who Hirohito was, right?

He was the Japanese emperor.

He was the third emperor after the aftermath, I mean, third emperor after the Meiji restoration.

He was the first one to see Japan as an international power.

He was the first and last one to handle it as an international power.

And yeah, Hirohito was a guy responsible for a lot of stuff that happened in East Asia across the mid-20th century.

Right, including, by the way, World War II, right?

So he was a Japanese emperor during World War II.

And

there's a big controversy around Hirohito because

he was in charge of Japan.

during the time that Japan invaded China and committed all the atrocities that

we know happened there, including the rape of Nanping.

And he was also the Japanese emperor during World War II, during Pearl Harbor, obviously.

So the book takes a very critical stance on Hirohito.

It claims that Hirohito could have stopped or at least in many ways dulled these atrocities.

He had that authority.

The opposite view, I guess, which is the conventional view, is that Hirohito was kind of a constitutional monarch, much like a British monarch, and that he didn't really have the authority to intervene in politics.

And then, to the extent that he did, he did his utmost to like lessen the impacts of the war, for example, by surrendering in 1945.

So, now, what were your overall impressions of the book, of how well he did defending the ceaseless that Hirohito should have been tried as a war criminal?

Yeah, no,

I think the book sort of goes like a synthesis of these two.

It says that Hirohito was a constitutional monarch, but he was a constitutional monarch because he chose to be a constitutional monarch.

So, yeah, he he in theory on paper, he couldn't do it.

It's one of those things where Japanese constitutional law wasn't very well done.

I mean, it for any uh

anarchy, constitutional law isn't well done, and much more so for Japan.

But uh, Hirohito could have done something he did not, he chose to be a constitutional monarch.

So, anyways, the book was

well written towards the end, poorly written towards the start.

I think

the difference between a collection of events and a biography is a story, and there was no story at the start.

So, I think that probably could have been much improved.

But I also think that it's very hard to find people who read through original language sources, in this case, Japanese, and to a small, very small extent, Chinese and English, and then put it into English.

So, I think the author deserves a lot of commendation for that.

Okay, excellent.

Yeah, yeah.

So, I agree.

The most interesting part about the the beginning, and I agree it was pretty dull,

was

the author talking about how much the Hirohito was influenced by his grandfather Meiji.

So, you know, like

Meiji was the emperor during the time where Japan rapidly, rapidly, rapidly industrialized and kind of became a, went from being a kind of like a semi-colonized power to becoming a colonial power itself, you know, having colonies in Korea and Taiwan under Meiji.

So

it's very interesting.

You know, I have friends who kind of think that, I have one friend who thinks that many of the differences you see between countries can be explained largely by genetic differences.

And I think one of the strongest like counter arguments to that is just like how different

Japan has been over like the last 150 years, like how many different evolutions it's gone through.

And whenever you see these stories of rapid industrialization, it's just very, like,

you can kind of understand how it can happen over many hundreds of years.

How it happens in the case of Japan during the major restoration so fast, it kind of stuns me.

So, I know you've been doing a lot of reading on Chinese industrialization as well, as well as like industrialization in many rapid industrialization in many other East Asian countries.

Can you explain what happened during the major restoration?

Like, how did they get everything up and running so fast?

Right.

The main difference between the pre-1868 Japan, which was the word called the Tokugawa Shogunate and the Meiji, and the Meiji era, was that Japan had a lot more centralized power, there was one king running the place instead of feudal lords all over.

Japan was a lot more open to the rest of the world, you know.

There was the death penalty for Japanese who interacted outside of Japan during the Tokugawa shogunate, very, very uh, brutal in today's words.

And um, Japan basically did what would be called the holy utility of industrialization.

It had open labor markets, government investment, and basically allowed foreign capital to come in.

And so you

across East Asia and across parts of Africa, like Botswana and to a smaller extent, South Africa and Nigeria, the best way to get rich historically for countries when they're already other rich countries is to take all capital from

the rich countries, copy their innovations, and use all their knowledge on how to get rich to get rich yourself and then start to slowly push away on their hegemony.

And the results of it are somewhat mixed.

The US did okay-ish well, Japan didn't do well, and we're seeing it with China now.

Is there any particular reason it happened first in Japan as far as East Asian countries go?

I mean, okay, that is, uh,

I'm not a I'm not a very good um source on this because I try to avoid the histogram of this because it's it's it's full of too many uh details.

Historians haven't done a very good job of it.

But my take on it is that

I think it's very much elite dependent.

As in the first is that the Japanese elite didn't have as much of a rent-seeking class as the Chinese elite did.

In China, because the country was so big, they invented a whole bureaucracy to administer it.

The problem was you end up leaving too much power to the people in between you and the general public.

So they

ended up being sort of the barriers to modernizing and opening up.

But in Japan, that was less so.

The second thing is, Japan already had a small tradition of worshiping the emperor's god and became politically convenient for the shogunate to now re-emerge.

They actually had a small civil war and it so happened.

I mean, this is just an accident of luck that the winners of the civil war happened to be the ones who wanted to open up and make Japan great again.

So one part is that.

The second thing is being a small island nation really

makes you see the realities of life much easier.

One explanation for why small countries would have better economic policy than large countries is that if you're a small country,

the realities of life are very often more in your face.

So when Japanese elites saw the saw the American ships coming, they're like, whoops, you know, we can't afford to be irrational anymore about about it.

And they were forced to modernize.

Compare that to

a lot of East Asia, where they either could live in their own alternate reality, for example, Indian kings and the Qing dynasty in China.

You know, the Japanese were just forced to deal with reality a lot faster.

Yeah, yeah, yeah.

That makes a lot of sense.

Yeah, I also read on your recommendation, Li Kan Yu's biography.

And

so this is not the book we're discussing now.

But just to just to tie it with this, it was really interesting to read him just go over all the different issues Singapore had to deal with at when it got started.

Like, you know, the fact that it had hostile neighbors, the fact that

basically it was going to lose like 25% of its GDP once the British left for their naval bases.

And there's something about the fact that you're just like on an island, you know, open to any sort of

open to all the elements, basically, that I guess concentrates the mind.

Exactly.

A very unrelated measure of leader competence is how close to reality are you.

And you see it like to skip to 2022 today, right?

You saw it over the last two years where leaders were more in touch with reality, respond faster to COVID, got better vaccines, tightened up faster, but also opened up faster.

So basically

the Japanese elite in the 1860s was a lot more in touch with reality than other countries.

And so they knew they were forced to open up.

And the next part of it was

they opened up and

they opened up quick, quick, they got American

industries to come set up in Japan.

And they basically, a lot of the history

of economic development is also the history of intellectual piracy.

They just

had what is euphemistically called forced technology transfers so they could learn how to make all the pool gaps that the Americans had.

And by around the 1910s and 1920s, they got rich enough to project their power onto the rest of East Asia.

By 1905, they fought a war with Russia.

And then, you know, in 1950, around the same time, they invaded China.

And then later, they invade China again.

They just didn't deal with the sudden transition from being a power that is coerced by the Americans

to a power coercing other countries.

Right.

Now,

I mean, there's a way you can view this where, I don't know, if you have that kind of transition happen slowly in a country, you can have norms evolve from,

I don't know how to put this in a way that's not derogatory, but norms that are very kind of brutish and very much geared towards like traditional norms of war, which is like you destroy the enemy, you pillage, and you loot, which is like, which might make sense if you can like loot a village, right?

But when you're talking about the capacity in a modern history of war and you can do that to like millions of people, people that can become extremely brutal and i don't know it seems like in the west uh once industrialization happened there was like enough time for things to simmer down before these countries were introduced to the worst weapons and i you could argue that the world wars are a counterexample but even still um

on the on the um on the eastern theaters uh the sorry i mean the western theater the the

the

there just weren't the kind of atrocities that you saw the japanese uh make in the pacific theater and in china so i

like one of the downsides of rapid industrialization is your cultural norms don't catch up to your technology and so you have like almost these these people who have like uh very

very traditional norms around war with very modern weapons and it gets pretty scary

and gurr of scholars stage has a very good essay on honor culture versus respect versus justice.

I'm paraphrasing here.

But overall, less industrialized societies societies have strong patriarchal cultures because, for better or worse, it's the men who end up doing the work and they got more of the respect.

And there's a lot of debate and literature about this, but that's more or less my understanding of it, right?

So, you're right that the norms don't catch up, but I think you're wrong that even in the West, the norms didn't catch up for a long time, right?

Uh, think of colonialism: only very, very few people in the House of Commons thought they should impeach one Hastings for his atrocities in East India or through the East India Company.

So it's not only in Japan that norms didn't catch up.

It's almost everywhere that norms did catch up.

Norms take a lot of time to catch up.

And in Japan, well, the first thing is that the Japan you see today is mostly is artificial in the sense that it is an artifact of America of the of the Americans jumping in and putting a gun to the Japanese cabinet and saying you better accept the constitution we make.

And some some parts of the Japanese left really liked it, some parts didn't.

But they basically forged a coalition of only people who liked it and old people,

people from the old regime who were willing to accept the new reality.

So norms can change quick, but when they do, they change with the battle of a gun, not by some internal organic process.

As to a question of why was there so much atrocity, you are correct in saying that norms didn't change, but I also think that public choice theory is what explains a lot of Japanese war crimes across the 1900s, I mean, the entire early 20th century, right?

My entire understanding of the book was that it could have been written by any public choice theorist and

would have ended up the same.

So let's think of it this way.

The Japanese army was powerful historically from the 1860s.

They fought a war in 1905.

They were always scared the Soviet Union

after it was formed was going to invade them and as historical vengeance also because it was just a lot better run than the tallest russia but the problem was the depression hit and then the army and navy got mad that their that their spending was cut so they just kept inventing problems in east asia for them to have their budget increased and uh some part of inventing problems involves in uh involves lying about them all all all a large bureaucracies exaggerate their problems but the army took the more extreme step of creating problems itself and then like they're like uh we created this mess and we need money to solve it or else you're going to die and then the japanese government was weak enough to give them money and uh got brown into world war ii yeah so let me just um let me just like fill in the details for the audience so in 1931 um in in a japanese-controlled nanchuria the japanese military stages a sort of attack on uh one of their railroads if i'm if i remember correctly and it's like pretty obvious it's staged by the military.

It's not even that big of an attack.

Or sorry, it's staged by the Japanese military.

And it doesn't cause major damage, but the military then uses it as justification to invade the rest of China without permission from the emperor or with the rest of the civilian government.

But yeah, so basically

what you have, and then so public source here comes in because you have like these

political factions in Japan who are like trying to control Japanese policy, not in the best interest of Japan itself, but because of

what is in the best interest of themselves as a faction.

In fact, I interviewed Richard Hinania recently on my podcast.

And as you know, he has a book out called

Public Choice Theory and the Illusion of Grand Strategy, where he makes exactly this point where

he's arguing that the unitary actor model does not apply to nation states

because they're very influenced by these sorts of um factions and individuals and special interest groups like for example the military in um

the military, and then specifically the Imperial Way faction in Japan.

But so, there's many examples of this where, like,

army officers just like killed the prime minister at one point.

And I think it was 1936.

And when they go to trial, they just say, Yeah, we did this war because we're like loyal to the emperor.

And the prime minister was, you know, he wasn't nationalistic enough.

And they get like very light sentences.

So you, you, you know, it's called the government by assassination,

what the government was like at this time.

I agree.

A few things here, right?

The first thing is that Japan had a very unique constitutional model, as far as it could be called a constitutional model.

It was just ad hoc.

A big problem in people's understanding of history is that they just don't realize that a lot of times big events are just some guy deciding things.

And so a lot of these things end up exactly as you would expect, some guy who ends up deciding them.

And so the big problem here is that, well, the way the Japanese constitution was designed was that the civilian government,

I mean, elected by men with property, I don't remember the exact details, they had control only over every part of the government except the military.

And most countries, like in the US, you have a requirement that all defense secretaries should not have served in the military.

Or if they have served,

there has to be some, I think, a five-year or seven-year gap to ensure that you have civilian control on the military, right?

Defense secretaries can't have sort of uh no no you have to have a a five-year gap or something and and if you don't meet that gap you have to get away from conquest okay yeah okay i didn't know that yeah okay so that's to maintain civilian control on the military and a lot of countries don't do very well on that right to go as sort of a tangent pakistan is now is one of those places where you have very poor civilian control on the military so the military just keeps like doing stuff and the government is forced to react to it then then in most western democracies it's the other way around The crazy pester does something, and the military is like, whoops, now we're in this war, and we've got to deal with it.

In Japan, the problem was your army ministers were, well, part of the army.

They weren't representing the civilian government.

They were representing

the army.

Give an example.

It's a funny thing.

The Indian ambassador, so in the 1960s, India was having a,

was having high tensions with China, which ended up in a war in 1962.

I think it was V.K.

Menon, who was India's ambassador to to China.

And, you know, VK Men came and told Nehru, you know, this happened, that happened, Chinese won this, and Chinese won that.

And Nehru asks him, quite annoyed,

are you our ambassador to them or are you their ambassador to us?

And it's the same problem with the army minister being part of the army.

Is he representing the civilian government or the army?

Nobody knows.

And that led to a sort of elite capture of the civilian government by the army.

There's another great book.

I forgot the title, but it was discussed

on China talk a lot.

And basically explains that the army took control of the entire civilian government, basically said, you got to prepare for total war.

Why?

Because we said so.

And

they reorganized the functions of government a lot to

achieve this objective.

Yeah, yeah.

There's like a pretty well-known quote about the Pakistani military, which can be applied equally as well to Japan in this era, which is that in most countries, the government has a military.

In Pakistan, and I guess in this case, Japan,

the military has the government, right?

So

that's what's playing into here.

And now, the claim of the author is that at various points where the military's power is growing and it's doing more and more audacious things, it's like directly contradicting the will of the civilian government.

The civilian government says, like, hey, what are you doing like invading these other parts of China?

Like, you know, stop this.

And the the military leaders are just like uh yeah fuck it we're going in and so at this point the um

um oh bigg is like uh the author he's like um the emperor who's because like he has a unique role here where he has such moral authority because the army is claiming to like

in the us it's not like if there was um if there is a sort of like military coup the government um assuming the president's not in favor of it the government the army military is not going to be like we're doing this in the name of the the president, right?

Uh, whereas in Japan, it was like, Well,

for the glory of the emperor and the empire, we're you know, we're gonna invade.

So, the VIX is like, Yeah, he could have just been like, Yeah, this is not in my name, right?

And he doesn't do that, he issues like these very mild, if at all, condemnations

whenever these kinds of things happen.

And so, they keep escalating and escalating.

Um, and so, yeah,

yeah, so a few things about that, right?

So, a lot of it, um, there's a question in way thinking about history is how much of it is contingent on,

you know,

structural forces and how much of it is contingent on actual people.

And foreign policy is one of the three places of history where things are contingent on actual people.

And one of those actual people was Hirohito.

The problem with Hirohito was that even as a child, he was very mild-mannered.

His tutors described him as, you know, he wouldn't win any debates, wasn't very good public speaker.

And

the Japanese government and Japanese state, very different than the Japanese government, very concerned that the public support for the emperor was going down.

So

they went to England to learn how England did it.

And the problem was that Hirohito was not the right person for this job because the job demanded

a little closer to what a modern-day politician's job demands, a lot of public opinion formation, a lot of, how do I put it, dealing with various factions inside and,

you know, lying to a lot of people and

keeping them quiet.

But he or you were just not politically suave enough to do it.

And that was the clear problem here was that he didn't understand, even if he understood, he didn't, he didn't understand clearly the level of impact he had.

And he had this personal team's mindset of, we've probably linked to this,

this, this personal team's mindset of like

it's not worth it let's but then you know that's what led to his downfall in the end to what extent was Hirohito the responsible for this my my answer is um it depends on your definition of responsible could he have stopped it probably could he have lessened it definitely could he have led to

have it have lesser have it have a less stupid direction of the of the war right one of my biggest beliefs is that the entirety of japanese military strategy across the world war was completely stupid.

They were shooting themselves in the head.

I'm going to go on a rant here if that's fine with you.

Yeah, please do.

Okay, so

basically, Japan was really, really scared of a war with the Soviet Union for obvious reasons.

They're their largest neighbor and

they were getting richer and richer under Lenin and Stalin because, you know,

transformations from agriculture to industrial mass made every single country richer.

Okay.

The problem was Japan was smaller with lesser people, and obviously they would have lesser ammunition and military power during a war.

So Japanese war planning said, okay, we're going to plan for a war with the Soviet Union.

Naturally, if you're going to plan for a war with the Soviet Union, you should plan for a war with the Soviet Union.

You should not plan for a war with China or with the Philippines or with America or with Malaya, right?

But what they did in the 1930s was they said, oh, we have this, and public choice problems forced them into entering

China.

And so, you know, the Japanese army wanted to be relevant, the Japanese Navy wanted to be irrelevant.

They just kept like nudging, provoking the Chinese into attacking them.

So, what the original plan was: we will use our assets in Manchuria to fight the Soviet Union.

And we need Korea, and we need Manchuria

to protect our assets in Korea.

A sort of

early 20th century version of domino theory.

And then they did that.

Sorry, sooner, for the audience.

Manchuria is this region in China and like the northeast.

Yeah, in the northeast of China.

Yeah,

it's very rich in iron and minerals and so on.

And the original plan was that they would use their resources in Manchuria for doing it.

Now, why did they want to use their resources in Manchuria in general?

The answer is that Japanese military planners saw this.

The model they built their government was, the government did, the entire thing, including trade policy and everything, was imperial germany the problem was imperial germany lost world war ones so they did this entire sort of like self-reflection period why did they lose world war one the answer was imperial germany really never had the resources to win world war one they were blockaded by the by the british and so on right so their answer was we're going to get manchuria and we're going to use it so that any future wars we don't wait we don't lose it finally uh if you don't want to lose any future wars a good way of not losing wars is to not get into ones you can't win and and so but they did do that they just walked into japan that was mistake number one the problem with walking into into into into into china in the 1930s i said japan earlier my bad yeah problem with with walking into china in the 1930s is that it's a it's a war that pisses off a lot of people right so uh hiro ito mieto of modern japan mentions it the americans were quite outraged by it because it was the uh what would be called the neutral china principle all colonial powers would be completely uh fair in using Chinese resources for their own industrialization.

You know,

a very moderately poor thing to say, but that's how morality was back then.

Whatever, okay.

And so the point was this pissed off the Americans and the British and the French.

And,

you know, that

it's useful to have powerful friends, especially when your end goal is world domination, right?

So they did that.

And then the problem is you can't really,

China doesn't have much oil.

Japan doesn't have much oil and all their oil was imported from the US.

All the atrocities in China led to very bad publicity in the US, you know, American public opinion on China, especially because the answer historically for governments has been don't pitch out, don't piss off the church too much.

And Japanese governments didn't know about that because, well, they were their version of the church.

But the Japanese atrocities in East China led to American missionaries in China going to America and reporting it to the American public.

The American public got very outraged by it.

So by the 1930s, you had this sort of like mini-movement among the more religious people saying, we should not have American resources involved in the Japanese pillage of China.

And so there was a lot of domestic pressure on the American end trying to stop them.

But Japan, so mistake number two was pissing off the Americans, right?

The problem with pissing off the Americans almost all the time is that almost all of japanese oil imports came from america right saudi arabia wasn't a thing back then so all of a lot of japanese oil imports came from america like it's like 97 or something like that yeah yeah like

almost literally yeah in in the in the high 90s and they and it's not like wanted to make um synthetic oil but that didn't didn't work very well the history of oil of like countries thinking they can they can make their own oil is kind of funny because deng xiaoping almost like 30 for 40 years after this thing uh told his cabinet that china would finance its industrialization because it had some oil plants and it kind of didn't work out because you know it takes a lot of

resources to make oil which china didn't have and japan doesn't didn't have it at that point of time anyways that aside that that aside aside you basically have mistake number uh two was pissing off the the us

and so you know ito you know to what extent was the emperor responsible for this?

I don't.

Here's where I will put my structural hat on and tell you that Hidohito was not prepared to deal with these challenges.

The first thing was: no country had ever dealt with total war before in East Asia, right?

Wars used to happen in East Asia, obviously, but they were sort of like the European wars before World War I.

You send a few people to fight, and then you fight with them and you can lose.

Well, it sucks, but you never mobilize your entire economy.

There will be a new type of war, which Huhito didn't know of he you you could model it but the guy wasn't kind of smart you know he he wasn't the the sharpest tool in the in the in the shed so he really wasn't prepared to model it this this sort of war huh i mean wasn't the typing rebellion like one of the deadliest things in history or something like that yeah

it's a it's a civil war but the difference between a conventional war and and a civil war is that in a conventional war the the the typing rebellion didn't have much organization.

It was just people going and killing each other.

There was no ammunition factory that said this month we were going to make X thousand guns because the soldiers need to fight it.

Compare that to World War II, where you know, you had the price, couldn't you have a bunch of lots of economic planning in the US?

Very successfully managed to say, we have to make these many guns and these many bombs to fight the German and Japanese, right?

But that sort of thing was very underdeveloped.

In a very different aside, a big problem with having your

in not having high-level manufacturing like America had with automobiles is that you don't, in wartime, what is useful is being able to coordinate large amounts of resources to their desired purpose.

And people like

people make the joke that Amazon and Walmart are centrally planned economies.

And it's

half a joke because in World War II, when the US needed central planning,

it didn't go to the Department of Commerce.

It went to Ford and GM and said, we have

a five times bigger version of you and we need your managers to run this because you're the only people who know how to.

But Japan didn't have that sort of experience.

The Japanese planning board, you know, it talks about there were various problems, suppliers didn't come.

And

is Hirohito responsible for this?

And he didn't hit it.

In the end, the Miller is responsible.

But also because the guy couldn't do it.

He didn't have the tools to do it.

And the reasons for that are much deeper than Hidohito himself.

It's that if you read through the first part of the book, Hidohito didn't have much of an education in economics or science or, I mean, science to a small extent because it was considered a noble subject or engineering, right?

If you asked him a question, which

the answer to which I learned in seventh grade, how do you extract islands?

He probably wouldn't know it.

He wouldn't be able to think to model through those things.

So the problem was no economy was prepared for a total war because it'd never done it before.

But Japan was the first country to say, Yeah, let's do it.

And they paid the price for it.

Yeah, yeah.

Okay, so you bring up the, you bring up pissing up America.

I think, so we picked this war before the Ukraine, we picked this book before the Ukraine thing happened, but people have been making this analogy, so we might as well talk about it.

So, as you know, that people have been making this analogy between Ukraine today, the decision in Ukraine today, and what was happening with China and Japan before World War II.

So the idea is that

what happened with Japan was

they invaded China, they did all these atrocities, they invaded different parts of Indochina, and this was tough America.

So America embargoed iron, steel, copper, and most importantly, oil exports to Japan.

They froze their assets in the U.S., which basically prevented it from buying oil.

And the Japanese war machine required oil.

So then basically, Japan decided we're going to have to invade other parts of Indochina to get this oil.

But to do that,

we're going to need to invade America's sphere of influence, like places like the Philippines.

And to do that, we're probably going to first need to disable America's ability to wage war in the Pacific.

And to do that, we're going to add a bomb per harbor.

So the analogy goes.

that what we're doing with Russia is similar in the sense that we're, you know, just as Japan invaded China and we responded, the U.S.

responded back then,

Russia has invaded Ukraine and we're responding very strongly with sanctions now.

And maybe Russia feels like it's going to become backed up in a corner and therefore it decides to launch like a conventional attack against, I don't know, NATO headquarters in Europe or something.

And from there, you have an all-out war.

So

what do you think of this analogy?

Do you think it's valid or applicable?

They'd be very stupid to do that, but historically, Putin's actions have been more stupider.

So

you can't model him to your actual actor models.

To what extent does the analogy apply?

To much less extent.

The first thing is Russia can, okay, actually, it does apply, but in a different way.

Russia is dependent on the Western world in not in terms of oil.

They have a lot of that themselves, but in terms of things like...

you know, dentist shops in Russia have shut down because the crowds and ditches and the sort of stuff you need to do to make fillings are made in Germany and the US.

They really depend on these sort of like highly specialized small-scale things.

And you can't find that

outside the West.

So yeah.

Are they going to have another war?

Are they going to escalate it?

Base rate says very low.

I'm going to go with slightly higher than the base rate, very low, but small possibility.

So does the analogy apply?

Probably not.

Japan

was a militant country in the sense that

you don't see the level of elite capture you had in Japan today in Russia, right?

It just didn't exist back there, exist as it as it is now.

So that's your first problem.

The second problem is Russia wants Ukraine and it knows through historical experience, right?

Putin was your KGB lieutenant colonel.

He knows that

what are the costs of a protracted level of

military tension with the US.

And it's very, very obvious to anyone watching here right now that if the EU decides to rearm and the US continues, it just continues its current level of armament.

I'm not even predicting a level of armament towards the 1980s, right?

They will overpower Russia in every single margin.

So will he do that?

I don't think so.

But I think the main objective right now for Western Polynesia should be get Putin to save face and back out without, you know, pushing him into a corner.

Are they going to push him push him into a corner i i don't think so it can be very bad for people living in russia now but

so far he's not as stupid as to go and invade uh poland or estonia or uh literally go to the netherlands and kill the nato secretary general that'd be that would suck a lot because uh

Well, it's World War III.

I'm stuck in Singapore, sort of halfway between the East and

the West.

Sucks for me.

But I doubt the analogy applies because they're not captured enough by the military for the rest of the government to care.

Yeah, I mean, as far as the stupidity goes, you could continue the metaphor by saying that it was very stupid of Japan.

People were saying this back then.

I think Hirohito said it himself, right?

Which was like, listen, the US has like a much higher GDP per capita.

It even has a higher population.

So

that the idea that we're going to be able to win a war against them is,

you know, it's very stupid.

And even if you like plan out everything, everything, like, we're going to have this offensive that in a few months, we're going to capture all these islands in the Pacific and we're going to destroy their Pacific fleet.

Even then, it's like it was just such a

daring scheme.

Like,

I don't know what it would have taken for the whole scheme to work.

But, you know, so like,

I don't know.

I don't think we should underestimate the stupidity of nation states.

I was doing some work on this last week.

Allied GDP

was almost always greater than Axis

GDP for the entire of the war, not counting colonies of either.

And for the majority of the war, the Allies had a GDP twice that of the Axis powers.

So they were very stupid.

It would be like,

what's a good analogy here?

It would be like Denmark going to war with the UK.

Like maybe you will,

maybe you'll capture a bit of Scotland.

But swear to God, once the UK starts rearming, there's no way you could quit.

Right.

So, you know, reading this, because I was looking at the same numbers earlier today, or not the same, but those kinds of numbers, where, like at the time, Japan had in 1935, it had a GDP per capita that was like almost a tenth of the US's.

And, you know, I was thinking about this and I was thinking about in the future, like, let's see.

It wasn't a 10th, actually.

I'm not sure where you got your numbers from, but I have a book open called The Excellence of World 2.

And it's around 40%.

Yeah.

The US was 5,800 something.

Japan was 2,700 something.

That sounds way more reasonable.

Yeah.

Okay.

That makes sense.

But then it also had a bigger population, right?

So it's a bigger total.

Yeah, yeah.

It's easy to be that bad is here.

Yeah, yeah.

So I was thinking about this,

like with the potential that in the future, if there's a conflict between the US and China.

um you know like the analogy is like oh we have we have a bigger current military like we spend way more on uh the military now than china does but if it has a higher industrial capacity if it has a a higher GDP,

maybe in like a year or like a couple of months of conflict, all the stuff you have so far is kind of useless.

Or, you know, like it doesn't matter as much as your capacity as India, as I'm sorry, as the US had during World War II to just like produce more stuff.

Yeah, no, I agree.

So to what extent or like that, I think the first thing is that in a short-term conflict, you would have the US outmatch China in like every single thing, right?

Not because of the US, but it's US plus EU.

And the thing is, it's so if you told somebody in 1922 and 100 years later, the EU is like what we call Europe today is disarmed, they will laugh at you.

It's historically not the norm for European countries to not spend illogical amounts of their economy on defense, right?

Just because like they fight a lot.

and now they're fighting a lot again.

So it's a conflict

pro-continent.

So basically, I find that very

like the moment you attack the US, you are also

more or less attacking with or without NATO, a lot of countries dependent on the US.

So

a lot of those countries, so in a short-term conflict, you would obviously be depending on only American defense because the only power ready to wage war in like 15 minutes time.

But in a 15 months span, you would,

no other grouping of countries can match what the West has now, just because the West is technologically superior.

So maybe in the time span of like six months to 12 months, you'd see a lot of Chinese advances.

But in the time span of 12 months plus, it would be very quick for the West to rearm.

And, you know, because the West has a sense of competence here

about wars.

All the wars that they fought are in the Middle East, very far away, right?

So

the moment it starts hitting you, right?

The moment you have bombs flying on your head, you're like, it becomes a lot more real to people.

So

there's no question that you would have a similar scenario.

UK plus EU, so US plus EU GDP is like 31 trillion.

And China plus Russia

is like 40 trillion, maybe?

I don't know.

I'm just ballparking numbers here.

But China plus Russia's GDP is like maybe 30 trillion i can guarantee you this 40 trillion is a lot more productive than this 30 trillion because a lot of it is just you know for all the chaos that the american economy goes through the chaos makes it more productive so you're gonna have you have a lot less ghost cities and a lot less corruption on on this end of the uh new cold war yeah yeah i guess one concern is um i don't know how true this is i just hear it from like the zeitgeist is the idea that we we don't have the industrial capacity that we used to so the gdp GDP is higher, but it's the industrial capacity we've shipped elsewhere.

I don't know how true that is.

I think that industrial capacity is overrated.

Please, it's 2022.

First thing being, right, a lot of initial war is going to be very high-tech.

You've got to have underwater drones.

What is an underwater drone?

It's exactly what it sounds like.

It's an autonomous vehicle that's underwater.

It's like a, you take a drone that can swim.

Okay.

It's very contract, right?

You get drones and you have a lot of satellite target, like the satellites targeted for you, and then you bomb them using the satellite imagery, right?

Initially, in the war, human intelligence is going to be very important.

And now there have been some pretty embarrassing parts for the US on this.

Like in 2015, there was a China, the Chinese hack of the DHS employee database, which is very embarrassing because, yeah, and then, you know, a lot of CIA assets in China mysteriously disappeared in the years after that.

So sucks.

But I also think that the industrial capacity argument goes like this.

You know, America is outsourced manufacturing to China.

If you have a war with China, they're not going to sell it to us and they won't be able to do it.

And my answer is...

uh this sort of like the story where you know the two guys running and there's there's a pair and only one guy has to outrun the other.

The first thing is the nice part of being the largest consumer for your largest trading partner is if you cut your taps off, it will hurt you a little.

It's going to hurt them a lot.

Where are they going to get the resources to start to re-industrialize again, right?

The Chinese state-run economy is not known for its efficiency.

Okay, the second thing is, if we need to, if the West needs to, they can absolutely always rearm very, very quickly.

It will be painful, right?

Your software engineers who spend maybe 40% of their time working will be forced to work in some stupid factory that makes javelins.

But regardless of the annoyance of it, it will happen.

Okay.

Finally.

Dan Wang has the best critique of this.

He says that CAD apps don't win wars and he's right about it.

Semiconductors conductors win wars, and the US has the nice advantage of being the only and largest ally of Taiwan.

And, you know,

the thing with the US is a lot of its economic potential is put into stop by stupid regulations, zoning, nuclear regulations.

And, you know,

there's a whole Twitter universe.

dedicated to exposing them.

I'm going to spend time on those.

The thing is,

once you get into the, once you have Bobs dropping across London, it's going to be very obvious that these things have to go.

So, you know,

these sort of things are a luxury belief for vested countries.

They can believe in it because, yeah, sucks.

These guys couldn't get a house in New York, but it's not materially harming us in a way that it's obvious to us now.

I want to start becoming obvious.

You know, no elected leader

is going to listen to the people who are currently harming American or British or German industrial capacity.

They're going to say, sucks about the pollution, but we've got to walk away.

So

it's going to rearm very, very quick.

And

one of the reasons I'm very optimistic about the future is that we have a lot of spare capacity left like this because of stupid rules.

And once we start removing those stupid rules,

it's

just

rocket takeoff.

And

I'm being animated because it is going to be very animated like that.

People fundamentally underrate the benefit of like

liberal-ish democracy, which is that you can change very quick and not blow up

while doing it.

A good historical example is that America had a lot of mess-ups early in World War II, right?

So, there, so, during the Pony War, the Phony War was this sort of like lull in

the 1939 or 40, I can't remember, in Yoruba, where it was, they were sort of fighting, but they sort of were sort of like a tailman.

This was called the Phony War for that reason.

And American

Congress didn't want America to get involved in it because they were isolationists, and there are some good reasons, right?

And FTI wanted to.

But once it became clear that American interests in Britain were going to be harmed by it, even the most isolationist Congress members changed their mind because of overwhelming public support.

So it is going to happen.

And the thing is, people just

are right to assume that

the US doesn't have industrial capacity, but they're wrong to assume that it will never have industrial capacity.

Yeah,

I hope you're right.

I hope you're right.

I know I'm right.

That's okay.

I know I'm right.

That's okay.

So

you brought up earlier that

we look at the failures of

we look at the failures of

American military and Western military in the Middle East, but we weren't as seriously invested because it didn't directly threaten us.

But, I mean, speaking in the Middle East,

our occupation in Japan, like, Japan was a country with 100 million people.

It had a very serious and very,

like, a very,

like, very propaganda,

like, just

a supremely convinced public that was like supremely hardcore about the ideology of the imperial way and stuff like that.

And, you know, this public,

it didn't take that much at all for

the Western occupation to be able to put in a liberal democratic constitution and basically just turn around the entire trajectory of the country.

And whereas if you look at countries that are way weaker, like, you know,

Afghanistan has like

1,000th of the GDP of America or something like that, and

we can't occupy it, right?

So, like, what was it about Japan or about our military at the time that made it such a successful occupation?

You could say, of course, one major factor is that we had Hirohito with somebody they viewed in such a almost as a deity.

We had him basically surrendering and cooperating.

And that counts for a lot.

But

it also explains why he wasn't tried as a war criminal afterwards.

Yeah.

Yeah.

Yeah.

But is there anything else?

Like, well, why was the occupation in Japan so successful?

Okay, I...

I've thought a lot about this.

There's a great book in this called Embracing Defeat, which you should read because it's about the exact thing.

It's about Japan after World War II and how the Americans did.

So, why was Japan a lot more successful than Afghanistan?

The first thing is,

stability is sort of like Lindy, you know.

Once you have stability under these relatives, stability against under the imperial government, they just change the people at the top.

Okay, you can't really compare it to Afghanistan because there was chaos before, chaos after.

You aren't solving the root problems of chaos, which is like

you have ethnic tensions.

In Japan, the the thing was there was a lot of stability.

People were really tired of the war.

After, when Hirohito had his surrender address,

a concern among imperial household, the imperial household was that there would be protests ahead of the,

outside the

palace.

The problem was, I mean, like that was the most, in their view, that was the optimal end that people would be angry with them that they were at the end of the war.

Thing was, there were no protests.

A few people were happy because

the war ended.

A few people were sad that they lost.

But

the Japanese public in general had a very, very difficult war.

Fun fact, Japanese GDP per capita in 1937 was only achieved back again in 1952.

So you can imagine how bad the Japanese public had it.

So in some sense, they were very much happier under the Americans.

I mean, it's kind of a fun fact.

It's an interesting fact.

When the war was ending, right, you had large-scale looting of a Japanese military supply because they knew food would be scarce for the next few months or so.

And so you had army colonels and majors just stealing food.

It was completely lawless for a few months till the American military police came and they were sort of calm things down.

The American army in Japan was successful because even the Japanese government was like, yeah, we're going to get done with this.

We're going to get back to making Japan great again, again.

And

that was the most important.

Also, very interesting, not fun, but interesting.

MacArthur spoke no Japanese.

MacArthur, I don't think he addressed the Japanese public ever, okay?

That's very rare.

If you're an occupying force, they worked through the mechanisms of the previous Japanese government.

So also interesting.

A lot of Japanese, so I think I made this joke on Twitter a while ago.

I have a Japanese political family.

Grandfather was a war criminal, not executed because Hirohito asked Mikado not to.

Father was

finance minister in the 80s.

Kalin Kid is

number five in the LDP leadership election.

And like the answer is the elite of Japan was not changed after the war.

It made it very easy, made it very convenient to continue.

They had this mass hallucination that, oh no, the,

what is it?

I'm blanking on

the guys.

And yeah, Toji made us do it, and

the army made us do it.

And just continued with the old elite again.

It didn't change much.

So you see a lot of these.

It is also very interesting that

elites don't change after revolution.

It is not a well-appreciated fact, but after the, so this is a great paper,

let me find it, but it basically shows that the Chinese elite in 1980s when the country was reformed was the same as Chinese elite in 1920s when the country was having economic growth.

The same thing with Japan in 1960 and 70s, the same family connections made them, you know,

were powerful again, right?

The next thing is that America didn't really change another really big part of Japan.

Japan was occupied, as in its formal structures were changed.

But it would be, you would be

a little crazy to call it a democracy till like 1990 or something.

It was just, uh, Bern Hoer has this great post about East Asian industrialization.

I think it's it's it's on medium, it's quite popular.

And one part of it was uh the Ministry of Industry and Trade,

MIT, I forgot their

full form, and their policies were basically rubber stamped by the lower house of the D.

And you know, he's like, there wasn't much difference between

those guys and the soviets up north so yeah japan was a democracy but it was a democracy it didn't it didn't change much right yeah okay so and the fact that the elite to begin with was i guess open to western ideas uh it kind of raises the question of why this elite where where was this elite during the 1930s and the 19 Many of them were suppressed.

The first Japanese prime minister after World War II, I'm lying on his name again, but like he was a left-wing leader, and you know, he's basically always, and we shouldn't have war, we shouldn't have war, the Japanese equivalent of the girl offering the flower to the American police guy during the Vietnam War, and those guys were obviously suppressed because it was inconvenient for them.

But the a lot of the a lot of the Japanese

also interesting, the Japanese Communist Party welcomed the American occupation.

So

yeah,

so they were seen as the anti-theses of this.

But Article 9 of the Japanese Constitution, which would listen to Tony, it says that Japan conquered the arm again, roughly, right?

It says that

the Japanese state gives up war as a means of policy.

So that basically like guarantees, I don't guarantees, but

gave the

new elite a good excuse to stop fighting, to stop with that.

But the problem is where were those people?

The ideology is fake.

It just what helped them

get them into power.

So now it's if fascism helped them get into power, I guarantee you, Hideki

Toji would have become mother Teresa.

That that that that that's that's not the the give you a total.

I don't think many of them really believed in what they in what they did, given that they all switched like six months later after 1945.

Very hard to make the case they were ideologists, they were just opportunists.

Yeah, yeah, I'm not sure about that.

I mean, um,

maybe this is specific to those elites.

But if you look at like the actual soldier class,

there you cannot question that you had like just ridiculous levels of devotion.

That's true.

Yeah.

That's true.

But the soldier class was like sort of like

selected out of the Japanese elite.

Yeah, yeah.

So I was just thinking about this earlier, which was that

one of the ways you could explain this,

like why, where does all this nationalistic fervor go, is that it died in the Pacific, right?

Like, all the most nationalistic people were sent out to the front lines and they were just like massacred in some cases, like, literally by their own superiors.

Like, there's, there's so many examples where

the Japanese generals just send out their

soldiers for these

useless charges, like, direct charges, like suicide missions, basically.

I'm not talking about kamikaze, I'm talking about like Diana charges.

Um, like they're having it bowed down, and it just like the defense of uh of Okinaw was a great example of that.

More people died in that than the atom bombings.

Right, it was 150,000 in Okinawa.

Yeah, 150,000 people.

There's almost half the population of Okinawa.

Right.

Yeah, yeah, yeah.

So it was like very, very blue-to-there's a great quote that

what was his name?

The guy, you know, one of those like famous one of those legends that he was the guy in one of these Pacific islands and a Japanese soldier and he didn't realize that Japan has surrendered and And it was like two decades later, and he's still like killing like random civilians because he doesn't know that Japan has surrendered.

And they like dropped down leaflets and then like newspapers to show him that, oh, you know, Japan today, this is what it looks like.

We've surrendered.

He still wouldn't believe it.

And so eventually they got him, they got him back to Japan.

And later on, he wrote a book about it.

And he's like, the reason I didn't believe Japan could have surrendered is that the motto at the time was that 100 million souls will die for the empire.

And so

Japan could not have lost the war because if Japan had lost the war, there would be no Japan, right?

Yeah, there would be no Japanese left, right?

Yeah.

Yeah, yeah, yeah.

But like, so then, but why do you think the elites were cynical?

Do you think like the elites are generally more cynical when it comes to ideology than the average person?

I mean, yeah, it's all like self-selects for that because to get the top, you gotta lie and you gotta move around and you gotta be within the things of the day.

And yeah.

So

that's pretty much the main point, which is that the elites knew that they couldn't remilitize a game.

It's kind of pointless to remit again to bite who.

And so you can, they just basically

decided not to do it.

But like the last 10 minutes is more just speculation for my part because I have not read into the elite mechanics of Japan before and after World War II to a good level of detail.

Right.

So like my kind of

prior on elites is not not that they're not ideological.

I do agree that often their ideology is cynical, but like, well, if you look at like elites in America, for example, like I think many of them are like genuinely very, well, you know, like put in all the stuff you can put in the bucket of left wing, right?

But like they genuinely believe those things, right?

Like in ways that are even counterproductive to them.

No, but it never gets passed, right?

Even they don't pass it.

Like even if you there's probably like one senator who believes that you should nationalize the oil companies, but they never introduce it onto it.

They never never make the never make the arguments for it.

They never, I mean, like

there are people who are ideologically left-wing, they'll just never stay elected for too long.

They'll just the thing is, you the competitive nature, I mean, to whatever extent is competitive of American democracy forces you to temper your

views.

And the only way to get ahead is you were the

public for the already defined ones.

So, yeah.

Yeah.

Okay.

So to bring it back to Hirohito, one thing,

one thing that I found like very interesting, very confusing is how this guy got so much fucking adoration.

Because, you know, physically, he was not so imposing.

Interpersonally, he was not that charismatic from what it seems.

Like, he just wasn't that

communicative.

He wasn't like his grandfather, Meiji.

There's a actually funny picture of him on the internet where you can see him next to MacArthur, you know, the general that was in charge of occupying Japan after the war.

And, you know, like MacArthur is like two feet taller than him.

He looks like a midget in comparison to MacArthur.

Yeah.

Yeah.

So like, I don't understand like, how are all these like super right-wing militaristic guys and the entire nation really, like,

they're willing to like die for the empire?

You know,

one of the things that like really made him not like him was, uh, not like Hirohito was when the book is talking about how these Japanese soldiers are, you know, like the last few years of the war, they knew that Japan was going to lose.

The reason that these Japanese soldiers are dying is so that the idea is instead of an unconditional surrender, we'll try to like,

we'll try to show the

West that we can

we can basically sustain,

we can basically sustain this kind of

war for a long time, even if we're going to lose.

And so if you want to avoid this, we won't do an unconditional surrender.

And the purpose of that was so, one of the purposes of that was so that to make sure that that in this unconditional, in the conditional surrender, rather, that Hirohito is not tried as a war criminal.

Like, that's, that's one of the things that these, uh, you know, like these millions of, what was it, more than a, how many 1.5 million, no, three million Japanese died, but 1.5 million of Japanese died in the last year of the war.

Yeah.

Um, and a lot of them died so that the emperor wouldn't be tried as a war criminal, right?

Yeah, like, I don't know, the idea that he could have stopped the war earlier, or at least potentially could have stopped the war earlier, but he didn't.

And these people are just dying for him in his name.

I didn't like it.

Yeah, people aren't dying in his name.

There's this great,

I don't know,

you should read the other book, which is Japan.

So I talk about let me find Japan prepares for, yeah, the book is titled Japan Prepares for Total War.

Okay.

The thing is,

nobody thought the emperor was God.

They thought he was godlike.

But it's not like he was like a, it's easier to imagine for Hindus, I guess, he was a god-like figure.

He's not God.

And they sort of saw him as their model leader, right?

The first thing is that they were dying.

They went into war because the army paid a lot of money with a lot better.

Then vegan, declining Japanese firms at the time, quantified pretty low.

So they didn't have much of a thing.

They didn't have much of

things to do otherwise, you know.

Also interesting,

the first original, the first public health system in Japan was encouraged by the military because they would saw all their conscripts being so undernourished and

ill that they're like, oh, we can't solve this on a military level.

We have to have a systemic response to this.

Okay.

The second thing is really that

why did they die for the emperor?

A lot of them believed it.

And so they died for it.

Why did they believe it for such an unconvincing persona?

Because he was not a politician.

He was his persona,

his stature derived from the fact that he was the descendant of the gods.

So, you know,

it's not a charisma thing.

Authoritarian systems, people don't derive their power from the consent of the governed.

They derive it from something else.

In this case, something else was, I'm the descendant of the sun goddess.

Yeah.

Doesn't that contradict what you said earlier, where you said

didn't believe that he was like a literal deity or the yeah, yeah, no, no, he didn't believe okay.

See, there's a god-like figure, and there's a god.

So, the sun goddess, her name starts with A, I forgot it.

She's the god, but he's a god-like figure,

right?

So, you know, yeah, yeah, but

no, I mean, I understand that.

I, I, I, I guess it kind of feels like semantics to me, but uh,

it wouldn't be semantics.

I mean, if it if it was semantics, they shouldn't have been happy about the surrender,

But many of them weren't, right?

No, no, but a large portion of the Japanese public were just meh, okay, fine, move on now.

Which there was a, okay, so let me put you in like very economic terms.

There's a,

there's a reservation price they have.

for a god and they have a there's a reservation price they have for the godlike figure and for the godlike figure the reservation price was pretty low it was two years of starvation which for a god two years i mean look at the look at the like

they weren't prepared to fight the americans for very long

if hiroito was a real god figure they they would have been prepared to fight him for fight the american and british for much longer yeah okay

i guess my point my original point is that because they believed him to be a godlike figure yeah uh they've made many sacrifices for him as a person as an individual person, yeah, separate and apart from the sacrifices they made for Japan as a nation.

Um, but but but he was inseparable from Japan as the nation, right?

Right.

Oh, I mean, which is another thing you can critique, though, right?

Uh, but yeah, yeah, yeah, too.

Um,

uh, yeah, yeah, uh, so like, like,

to make it clear, though, it would be like they were prepared to make the initial sacrifices.

First, it was convenient for them to make, and you know, you didn't have the Japanese economy was really, really bad across the 30s.

And the second thing was it was sort of like a

how do I put it?

So sort of like a not signaling, but like quasi-signaling thing where I'm willing to fight for the employer.

But when the fighting got bad, like, ah, wait, the employer is not worth that much.

It's okay.

All right.

So yeah, so let's continue talking about what happened after the war.

So

you probably know much more about the post-war economy in Japan than I do.

I actually know closely nothing about it, except where

there is

Mansur Olsen very famously explained why Japan and Germany had growth rates that were so high after the war and were able to catch up relatively fast.

Is his claim, I mean, bringing back public choice theory, his claim was all these factions that accumulate in democracies were

abolished in the war.

And so they basically got a fresh start without all this accumulative crudge.

And because of that, they had extremely high growth rates.

And as you you know, in the 1980s, um, they you there are fears like Japan, this economy would like overtake America's.

Um, and in fact, if they had to have a population collapse, uh, you know, who knows whatever would happen, but yeah, more or less correct.

All the uh interest groups were destroyed, and so they could.

I mean, actually, all the industry groups weren't destroyed, they just replaced with better ones.

Their industry groups are bad, but they're good industry groups and bad industry groups, and they're sort of like the Japanese, the new

industry groups in Japan were the Biaca

and the trade industry i haven't i know i know a little about it's not too much but there are a few big things here right one of the problems the americans saw in japan was that uh well there were too many

the biggest interest group was these zaibatsus the uh japanese conglomerates that no like the war because it gave demand for their goods they they tried to break them up okay and here's where the intersection between that and the

new Japanese industrial policy comes the Americans put a sort of like an FTC thing where they said, you know, you're going to get too big and otherwise this commissioner is going to sue you in court and the court is going to be independent and the prime minister can't drag the judge and whatever.

Okay.

The thing is, the Japanese kept the form of this antitrust law, but just made enough loopholes in it for it to be like, yeah, we have antitrust law, but and we have a great commissioner, but nobody enforces it because

it's convenient not to.

And then so the Japanese economy changed, they sort of used these previous zaibatsus they reformed themselves into kiritsus which is you know probably just a more financialized version of a zai of a zaibatsu and then they uh so for those of you who don't know a zaibatsu was just this huge conglomerate that emerged in japan over the 19 the early 1900s that was one of the biggest um

it was one of the entities that benefited the most from the war because they were mining and industrial one that wars required a lot of mining and industry so they made a lot of money.

And

the Americans try to break up the Zaibatsu, but like almost all the Zaibatsu still exist today in the form of Kiritsus.

And the Kiritsu guys get really mad when you ask them about it because they don't want to be associated with the Rape of Nanking.

They want to be

associated with nice Toyota cars.

So that's the thing that the Japanese post-war economy was very much influenced by the fact that

the Americans were semi-incompetent at breaking down these Zaibatsu.

they just re-emerged again.

Standard economic growth theory tells you when you have a lot of broken buildings,

it's very easy to repair them back to where you got.

So that's where a lot of the initial growth came from.

But sorry, maybe you're going there, anyways.

But there's almost a super

compensatory mechanism here where it's like you damage the thing to get more benefit than you would.

Yeah,

that's true.

No, I mean, obviously, it is suboptimal.

It is obviously worse than not damaging them.

But once you damage them, like, it's not like Bastia's broken Windows thing, right?

If you break the Windows, it increases consumption.

Basque has like, but it increases consumption here, but they're going to spend the money on something else and those guys are hurt.

I'm like, yeah, that's true.

And the same thing over here.

Obviously.

I'm making the opposite point.

Then

the damage,

counterfactually speaking, in the long term, the damage actually causes a benefit in the long term because

you're getting rid of these special interest groups that would have hampered growth for a long time.

Yeah, probably, but I mean, yes, but also no, because special interest groups in Japan didn't really disappear.

I mean, yes, in the sense that the bad ones went and slightly better ones came up, which is true.

But

that should not be your main explanation because a lot of Japanese growth in the 50s

was just catch-up.

They're rebuilding the broken buildings and the bomb cities and burned houses.

So,

partly through

my smoke fact check rating, no.

And the other thing is, like,

Japanese industrial policy was very much a feature of the war.

Without the war, you would have had this level of government control of the economy, which led to a higher level of,

how do I put it, a higher level of

planning.

I don't think planning is the right word.

It's too many connotations of planning.

But basically, they

got export-driven growth because of this, because they had lots of social capital between the planners and the company executives.

And it was really easy for them to say, okay, I'll give you a few billion yen.

You're going to use this to sell cars in the US.

But in three years,

if your cars don't sell well enough, you're going to shut down and merge with your rival who will be more successful.

So, that was one of the drivers of Japanese growth.

That's one of the reasons why the Kiritsus and the

industrial policy systems existed.

So, that's one of the parts of growth after the war.

And also, having trade with America just makes you better off for the obvious reason that Americans are rich and they buy a lot of your stuff.

Right, yes.

Um, all right, yeah, yeah, okay.

This was a very, very interesting.

Uh, this is extremely interesting.

Uh, and then, yeah, I'm really glad we did this.

I, I, hope we do this with more books because this was actually like a very good way to

you happen to know a lot about the technological topics, so this is um, it's very useful.

Um,

I don't know if you feel is there anything else we're talking about with regards to uh Japan and um uh Hirohito or no, nothing else.

I'm probably hitting some edge of my knowledge in like one more question, so let's not go there.

Okay, um, all right, so we're done with that topic.

I guess we can talk about uh general things, uh, which is that uh, we're kind of doing similar things, at least for the time being.

I guess we're both doing it part-time.

So, like,

what's your age?

I'm 18.

I turned 18 last October.

Okay.

So, I mean, how are you structuring your reading, writing, what podcast?

Oh, man, man.

Oh, my God.

Okay.

So,

mornings in when I travel, I get a lot of my Twitter time done, right?

Because Because Twitter is like my biggest source of things that go on.

It's not a good source, but it's my good source.

So yeah.

How does

my reading?

Right now,

I think a lot of my reading is,

I go for deep dives in books.

I was doing Japan.

So I read Hirohito, I read Embasing Defeat, I read Japan Preferred Total War, I read Mark Harrison's The Economics of World War II.

Not a very detailed book, but a very good book in terms of the statistics it gives you, right so i'm going to do that and i'd like to have my stuff um

to combine the learning data visualization in pythons i'm going to do that with a bunch of world war ii economic numbers so like i both like learn how to use the very difficult map plot lab and you know this and that a lot of my reading is ad hoc i have this set of pdfs i read which is uh a lot of times you just spent staring at my phones i just it's it's second nature a lot of my writing is a lot more difficult to structure because, first, because it requires a level of calm that I usually don't get apart from weekends.

So, that is much harder.

And as for your question of how do I get my reading,

all the usual sources, the listeners of this podcast will know, Marginal Revolution, Econ Log.

I read a lot of Dohi Krishnan, Matt Clifford.

I read a lot of,

I don't know, Lesla, EA Follerman, please, and actual codex 10.

But

really, a lot of my stuff comes from just going through the bibliographies of books I like to read.

So that is where a good, so luckily, don't pilot books.

Pirating books is bad, but yeah,

it's the cheapest way for most people.

So basically that.

What else?

I think being in World of Manchester thing gives me a better sense of ideas for getting talked to other people my biggest source of like things i should work on is talking to people like you or other people or um other things

i also have a lot of time staring at a wall doing nothing because of nature of my work that gives me a lot of time to contemplate finally i'm applying to college so i have to you know figure out how to legible how to make my achievements legible to a college uh admissions person a lot of my time goes around doing that yeah what are your long-term plans I nerd.

What are my long-term plans?

I have no long-term.

Okay, I have no long-term plans.

Trust me.

You're good for computer science?

Go to college?

Probably.

So my next thing is, okay, computer science is a compromise because it's the, I want to do CS.

I want to do like econ related, econ plus like quant related things.

The best end of that in Singapore is computer science plus econ because computer science because the government puts a lot of money into computer science and it might as well add econ because it's my interest.

So, yeah, CS plus e-con at NUS is what I'm aiming for.

They already got accepted for CS there.

I'll be applying to the UK with my, because, okay, let me go, let me tell you one thing.

The, uh, for all that I like to criticize America, the British are infinitely worse.

So, uh, British college courses haven't changed since like 1970 something.

In America, you can pick and choose with your major.

In Singapore, you can get a lesser extent.

But in Britain, you have the same courses since 1620, I guess.

And the big problem is no course there.

I'm looking for LSE, math, and econ if I can get in and I find and I find a pot of money somewhere.

Have you not already with the immersion ventures grant?

It's like, yeah,

college in the UK costs like 200,000 Singapore dollars.

I regrettably, my wallet's in my pocket, I don't have 200,000 Singapore dollars there

for American listeners.

That's like 180,000 USD or

on that range.

But honestly, I would not be surprised if you were somehow able to, if you managed to come up with a lot of sponsorships and grants,

enough to sustain yourself.

So, if I was more into it, I would do macro econ and make my newsletter pay.

It's kind of obvious.

Like, even 500 bucks a month makes my life super easy.

So,

yeah.

But that would be like if, if and when I finish my current,

how do I put it, self-imposed military time.

Yeah.

And

by the way, what is the topic you're reading about now?

I'm doing a bunch of, I mean, I'm not reading about this.

I knew about it before, but when I'm writing about the US dollar reserve system like a primer, I tweet about yesterday.

It's like, why do countries hold US dollar reserves?

And the answer is, they hold US dollar reserves because central banks like the US dollar reserve for insurance reasons.

Like, wait, why do central banks need US dollars for insurance?

The answer is

the US dollar is the main currency used in trade.

So it is really, really important to have it in case your currency depreciates too much or appreciates too much.

And you can sell it and get USD.

The other reason is that the number one source of

financial crises for developing countries in the last few years, in the last few decades has been we need dollars to pay our dollar debts.

We don't have enough dollars.

So

we're broke.

And central banks keep it for that very specific insurance reason of

financial crises.

And next comes the question: well, why can't the remnant be or the normally called the yuan replace this?

The answer is nobody use it for trade.

Nobody use it for trade because you can't use it outside China, the capital controls.

So, like, wait, till China takes out its capital controls, we can't do it.

Yeah, pretty much.

Next question comes, why can't we use Bitcoin?

The answer is you would be very crazy to structure international trade with Bitcoin.

You know, it's too volatile.

Saudi, next month your price doubles

and your income doubles, your debt cost doubles.

So it's never going to happen.

And most importantly, Bitcoin is a risk asset.

You can't use it as insurance.

When your Nasdaq falls 10%, Bitcoin falls 25%.

The US dollar falls like 1.5%

or even goes up.

So you can't really do that.

That's like my current

writing.

But as of 2020 March, it's going to change as and when I find interesting things to write about.

Now, I have a question for you.

What is one good thing I should be doing, but I'm not doing?

I don't know what you're doing, so I'm not sure.

I told you what I'm doing.

I'm just writing about it now.

Okay.

That's all I'm doing.

The answer to that question is probably something I should be doing as well.

It sounds like you have been on the side, like just doing some computer science from what I've talked to you

separately about.

So if you're doing that anyways, yeah, that's fine.

One thing that I haven't done enough, but like when I have done it, it's been like super useful.

Like, it's just that

if I just randomly network with people over Twitter or something, if I just like just send them a Calendly link or something,

and you just like learn, oh, this person is like way more,

it's just like way more connected than I thought he was.

He's just super interesting.

That has led to some really, really cool things.

Super fun.

Yeah.

I average start admitting loading this like one zoom call a week with like friends and and we perform for the and make it to like five or seven it's it's very very fun more people should should do it it's it's my cheat code to life yeah yeah

and what is one thing i should be doing that i'm not doing i think you should scale this up very much what is your estimate of your of your impact via podcast versus writing

um roughly zero both ways by impact do you mean the audience or yeah i mean like like like like like like like, like, like, how much, like, vaguely defined, how, uh, do you think your podcast gives you more impact on your writing?

I think they're both like zero impact as far as like impact as an I don't know, like, improving the world in some way.

No, I mean, for impact on you, like, a very inclusive approximation is views.

For time spent, uh, like how much I'm learning and so on, I think, uh, writing probably I'm learning more than I'm doing, learning podcasting.

Although, I think it depends on the guest.

So, I, I,

what did you mean when you said scale it up a way more?

Okay, what would a

self-sustaining Lunar Society podcast look like?

Self-sustaining, meaning like

you could work on this full-time without any outside capital.

It would have to be way more regular and it would have to be way more broadly appealing.

Yeah.

That sucks because broadly appealing stuff is almost always dumbed down.

So

like nobody can do broadly appealing.

So yeah.

my friend,

just recently discussing this, like, you know, Lex Friedman's podcast, yeah, um, like, he's clearly a three-story guy, but uh, at least in his, whatever his research area is, like, he must be right, or at least I'm told so.

Uh, but

um,

but yeah, you can clearly see

that

to reach his million subscribers or whatever, and this is not to just like um, this is not just to take copium by the spoonful, but um, but

there is a little

to, but I mean, by definition, to appeal to the majority of the population, you had to appeal to midwits, right?

By definition, what a midwit is.

And

there are exceptions to this, right?

Like, for example, there's a conversation with Tyler, which actually does appeal to a lot of people, and it's not midwitted.

That's right.

But he started off with a lot of social capital.

So you can't compare that.

No, that's true.

That's true.

Like in my case, it's ended up being the case that the money you make, like you make, I could have like started Patreon or something, but it would be like so much less money than just like random grants people offer you.

Yeah,

which is like very nice of them, extremely, extremely nice of them.

And

I'm very grateful for it.

And then they like,

and that is like, that's orders of magnitude more than I could make if I had a Patreon.

You know what I mean?

Yeah, no, no, I

agree.

I think like an easier way of this is

I'm going to plug in my friend Krish Koopcham here, who has this very cool thing called a, I don't know

learning public offering where you tell people I'm gonna

I'm gonna learn about this and

six months later later I will teach you everything you need to know about this or I'll have zoom calls with you I'll give you an NFP or whatever your preferred model is and you basically say you pay me enough money to cover some part of my expenses now and we can and six months later i'll i'll teach you everything you need to know and if you're popular enough you would probably do that it's it's like open source should work like this.

It doesn't, but it's not like a model of how these things should work.

And another easier way is to have, it's much easier if you do only econ, like I do, where

I can just have an econ news that are focusing on normie things like where will the interest rates go next month?

And what does that mean for stocks?

And have a better news that are doing things I like to do.

So very,

I don't know how to put it.

The other thing, like more people, my emergency application, like the thing I felt most strongly about, more people should do company-level analyses.

So, I am

because it one, it pays, and two, because it's underrated by econs and overrated by stock people.

And I consider you very much in ball econ, that stock person.

So, uh, yeah, I think it's very, very useful to sort of like uh commercialize it, dumb it down,

cross-subsidize your intellectual pursuits by the commercial part.

Yes, yes.

Yeah, yeah.

The thing is, I don't think I want to do the intellectual pursuits thing as a main thing for my career.

So it's not,

and I don't need like a lot of money.

It's not like

I'm, you know,

I need to make the rent this month or something.

So

I think it would just make more sense for me to like not worry that much about monetization of this kind of stuff and then just make my money as a software engineer or like whatever else I decided to do, right?

True.

Yeah.

So,

but there's a separate question about

like having

because

I think the much harder question is like, how do you actually be a good public intellectual?

Public intellectual is like a kind of cringe word to use, but you know what I mean, right?

Like, how do you actually

produce content that's original and interesting, especially when you're young like us, where you don't have that much life experience or just general knowledge about the world.

Public

intellectual is strange, but thought leader is worse than

built into

that.

Yeah, you the first thing is if you do a bad job, you'll come to know pretty obviously.

Like every time I post my mind's bad, it gets like low engagement.

People are like, Yeah, it's me.

I'm like, oh, that sucks.

But you come to know that obviously.

The second thing is to

have a circle of competence and be great.

So you can be, be,

I have a friend who's friendly with a guy who's actually who's the ex, you know who's all the post or do you?

He's a former New York Fed guy who works at, I don't know, Fred Schwartz or Dosh Bank now, where he knows every single thing about Fed plumbing.

So how do

excess reserve gets get transported,

how do touch the bond sales happen, et cetera, et cetera.

He knows every single thing about that.

And if you want to be a good public intellectual, public, whatever it is, whatever your placement for that word is, be very good at one thing and draw on your credibility from there.

It's not very hard.

If you're coding, it is very easy to demonstrate you're a competent at something.

Just, you know, build something cool.

And people are like, oh, this is really interesting.

You're proof of work.

But if you are writing or speaking, it is much harder.

It is obviously an open problem.

But I mean, a podcast is like one way of demonstrating you're good at it it because people you people whom other people respect say, Oh, I like talking to you for one hour, we should do a second like, oh, super cool.

But the other, like,

you have to basically somehow build a proof of work and show it to people.

My answer to that is do econ stuff people like, and at some point of time, if possible, monetize it, which only works if your thing is commercially oriented.

So, I can't do a history of the gold standard.

That's that sucks,

yeah, yeah.

And uh but even

even like you

the proof of work thing i i mean you could say that the proof of work is like the amount of engagement you get but i've noticed in like things i've gotten a lot of engagement on even when it's like on a specific topic like for example i'd like some post on like talent that got some attention right on like spotting talent and i i could tell you that i i know less about spotting talent than like the median uh manager at best buy right i know close to nothing about uh uh finding talent and you know you can have blog posts posts that get attention.

I'm not saying that, like, you know, they got viral in anything, but they did get like one of them was on Marginal Revolution.

Um, right,

and so, like, that's another thing that kind of makes me skeptical about the value of being a public intellectual in the first place.

Is that like, I actually generally don't know

anything about practically identifying talent, but then you can get you can like just put out these like sort of insight-porn things and you get that get attention.

And I don't know what kind of value that's generating for the world, or you know what I mean?

No, I agree, but I also joke to my friends that

among our circle, I'm the best at evaluating talent because all my tutor mutuals end up getting famous.

So, like,

yeah,

so like

on the object level issue, uh, it doesn't matter because you're not, you know, you're not

selling your fish to fish, you're selling it to fishermen.

But on the on the meta level, um, the thing with a writing about

like these sort of general things is that nobody knows how to do it unless you have 30 years of experience.

So, like, don't worry about it.

If they liked it, you can do it.

Okay.

The second thing is people are not appreciating your object level thing on talent.

That's okay.

Nobody's going to make you the head of McKinsey's recruiting thing.

There's a very big difference in knowing something, in doing something, and being able to explain it.

And your, like, um,

it's okay, as in

your personal talent, or like anything you like about

the power

strategy, the value you provide to people is not the purple strategy, it is explaining it in ways they can understand.

I'm sure, I'm sure they knew it, right?

Everyone has the idea that, like, this month I'm going to super fit, and next six months I'm going to do nothing.

Everybody has that, those things, but the point is giving it some sort of form and structure.

Yeah, you know, it's kind of funny on that post in particular because it was it was just like hanging out in my Google Drive.

I think I'd written this uh like a few weeks or months ago.

It was just like almost like a throwaway thing.

Uh, where

these things seem kind of like Marvel strategies, and then uh, and it compared to like other posts where I've like put in way more effort, it was just it was literally just kind of a throwaway, right?

But then, um, but then

Alexi, like really, yeah, yeah, he said something very nice about my blog, and but But he used that blog post as the thing to retweet to say the nice thing about my blog.

And so now this random blog post has like 150 likes or something.

And it was just like your throwaway thing, right?

Like a load of flour.

And these other ones are spent a lot more effort on.

They're like five likes.

Super,

you know, Applied Divinity studies had you know that blogger by the way.

Yeah, yeah, yeah.

Yeah, he had a similar point where he's like talking about,

he just goes through like how many subscribers he has, a graph.

And he's like, you see these big jumps?

They're not like posts I spent a lot of effort on or something.

They're just posts that happen to get featured on MR.

Yeah, I know.

Yeah, yeah.

Yeah.

Like my anger is like, I shouldn't be worrying too much about distribution.

I mean,

the question is, if you, like, one part of me is like, oh, maybe I could, I, I, because

every single time I read financial news, I'm like, no, I could improve on this.

I could, I could, I could, I could do a 5x better job at explaining this.

Because I know a lot of financial jobs, and they're like, yeah, the, the, the job requires me to dumb things down.

I'm like, No, no, you could an intelligent one.

I'm like, Yeah.

So, every time I see these sort of things, I realize that you have a pretty clear trade-off between writing.

I'll put it in a different way.

When you grow on the internet, your audience shapes you as much as you shape them.

So, it is important not to write too many stupid things that go viral because you will be incentivized to write stupid things that go viral.

You have to play that meta game of not writing writing stupid, vile things.

And so like, I refuse sometimes to lie about popular things because I don't want to,

I don't want it to go viral.

It is a liability than an asset because it's going to be stupid.

And I'm going to be known as the guy

who did this, which is like, people say I'm wrong, but because they say, you know, any

attention is good attention or something like that.

But I'm like, no, it's.

you've got to be known for the right thing.

So I don't know how to deal with that.

I deal with it with not, with, with forcing myself to not put stupid things that go viral.

Joe Biral Strategy wasn't stupid things that went viral, but I know that you know that you can let stupid things that go viral.

Don't do it.

I've done it myself.

Yeah,

yeah.

They didn't go viral exactly, but they were stupid.

They ended up being a little more popular than my more thoughtful things.

Yeah.

So, what is your long-term plan as far as the intellectual stuff goes?

Like, are you planning on keeping up the blog and podcast?

Yes, yes, yes.

At least for the next two years, at least till august 2023 i will i'll keep doing this and then it's like i'll be i'll be in college then and it depends on the amount of the amount of free time i have and i'll probably keep it because it's my only way of socializing with people so yeah it better stay

yeah yeah um yes you have you have like um a surprising amount of leeway in

like

I guess in my experience and like at least US college is just like,

if you want to spend like 60 hours a week on your college work, you can.

If you want to spend 20 hours, you can.

And the difference is not going to be,

or maybe

there's maybe a smaller gradient, but there's ways to compress the amount of time you have to spend in college so you can work out the other stuff.

Yeah, that's true.

I don't know.

I want to go to the UK for the fact that one, you have pretty short terms, you have a lot more fleet time.

And two, I find it very humiliating to describe my entire life story to get into college.

I'm sorry, please, just ask me why I do math and

then let me in.

Right, no, no, no.

They're asking you to be cynical.

And when they ask those, like,

you know, vague questions about, like, oh, well, yeah, just to tell us about what led you to this point in life.

Why are you applying here?

And what is your life story?

It's like,

but the honest answer is you have a lot of, you have a strong credential, and I want that strong credential, right?

The answer is, I like money.

Here we go.

I was born.

Yeah.

Dan says, I like money, and you're my nicest passive part of getting that.

And nobody likes that.

And so, I don't like the selection effect of selecting for people who can lie well.

So, it's not an end up well.

Yeah, yeah.

Yeah.

So, like, on a model level, I refuse to engage it.

Well, did you not apply?

Like, what did you do for those kinds of questions?

I'm going to apply this September, so I'll find out.

Yeah.

Yeah.

Yeah.

But also, like, I optimized my life in high school for doing things I like.

I was a guy who was in lunch and sitting in a corner with six books, and I read six books a week.

So

I wish I'd done that because, like, I

in middle school, like, my mom was convinced I needed to become an Eagle Scout or like become a Boy Scout in order to, like, yeah, I know, right?

I was like, and I pretty much fed off all those critics.

Like, no, I can't play a Tabla, I can't play the piano.

I've probably murdered, please, no, no, no, just being incompetent at anything else is a good advantage, keeping your time, right?

Yeah.

No, I

could say,

like, what you ended up doing in high school, I ended up doing in college.

Basically, you got like a three or four year,

I'm 21, you're 18, so three-year advantage on me in terms of this stuff, right?

Yeah, which I, which I wish I'd just done earlier.

Um,

no, that's okay.

You have a lot of time, a lot more of luxury work.

Yes, yes, let's go for that.

Yeah, I'm not sure if it's supposed to be taking some kind of drug right now, like menformin' or something.

Yeah, I think you there, but it's like kind of awkward and justified of a farmer.

Since they're like, this is a controlled drug.

I'm like, yeah, I know.

And it's like, do you have diabetes?

Not exactly.

What do you want it?

Why do they set in time that he takes it?

You know.

Yeah.

Yeah.

So that's okay.

My answer is just run a lot and do weights and eat and eat healthy and whatever.

Right.

Which I think I'm doing to at least some sort of reasonable extent.

Yeah, dude, Brenda, this was really interesting and fun.

I mean,

if there's a

I'll keep a track on your Twitter and see what you're reading.

And if

another title comes up that I find interesting,

maybe we can do this again.

Oh, yeah, definitely.

I'd love to do it.

Yep, yep.

Awesome, man.

Thanks a lot for your time.

See you.

See you.

Bye.

Yeah.

Oh, hey, hold up.

Sorry.

Sorry.

Before we go, just to plug your stuff again.

So you're on Twitter,

your handle, and obviously this will be in the

description.

Yeah, it's at 20%.

Okay, and then with the p both p's capital,

I mean, it doesn't matter, it doesn't okay.

I didn't know that.

Um, and then, um, and then the bread and goods that's with two t's, uh, dot substack.com, um, and the same name for the bread and goods podcast, right?

Yep, yep, yep, and you've had some pretty notable guests on, right?

So, Matt Clifford, Bern Hobart, um,

um, they're definitely worth checking out.

Highly recommend.

Thank you so much.

Yep, yep, awesome, man.

Uh, yeah, thanks for time.

Thank you, Mike.