Arthur Kroeber

And basically, the morality play of World War II and the Cold War, which has really been the crucible in which US foreign policy has been formed, is that you had an alliance of democracies that fought back first against fascism, then against communism.

They won.

And the result was that you created a world where

Most major countries were democratic.

They operated on market economic systems, and we were heading towards sort of a world of convergence of systems where everyone's essentially playing by the same rules.

And China really gets in the way of that narrative because it is an incredibly successful authoritarian system where the ruling party still calls itself communist.

U.S.

elites have never to this day really gotten comfortable with the idea that the Chinese political system is legitimate, right?

And as long as you have that kind of underlying problem, I think it's going to be very difficult to erase these difficulties.

And then on the economic side, I think it is a problem the way that China has chosen to organize its economy.

Yeah, in a strictly financial sense, if you will, the rest of the world comes out ahead in the sense that China is willing to subsidize a lot of low-cost production.

So the rest of the world gets a lot of cheap goods and the overall welfare of the world improves a lot.

I think that's clearly true.

But I think if you look at what has happened to the U.S.

politically over the last 20 years –

There are a lot of flies in that ointment.

And the fly is that it is important for large countries to be able to maintain a diversified production structure and maintain kind of social cohesion.

And if you lose the capacity to run a manufacturing economy that employs large numbers of people, there's a lot of disruptions that come as a result of that.

And the purely financialized economy that we had grow up in the United States in the early 2000s as a result of this bargain with China wound up being pretty bad for the social compact.

So I think there is a legitimate question about how do you integrate China's growing power, wealth, industrial might into a world in a way that societies around the world can tolerate.