Arthur Kroeber

And the answer in the United States historically has been we're just going to have this great consumer economy, right?

We're essentially going to be demand-driven.

And so consumers will tell us what they want and companies will arise to make what they want, which is increasingly not stuff, but services, experiences, and so forth.

And we will create a financial system that produces very good financial rewards.

for the companies, for the people that produce these kinds of services.

And then you generate huge amounts of actually very high paid employment in the services economy.

And I think the Achilles heel of any sort of industrial policy driven growth model like China, but you can see variants of this basically throughout East Asia.

is they're very materialist.

They're convinced that it's only really the physical stuff that matters.

So you get really good at making the physical stuff, that will somehow magically spill over into the rest of the economy.

And I think the evidence that we have is that that actually doesn't work that much, that most of the demand in a modern industrial economy, the really high wage

high income economies comes from intangible services.

And so there's a more complicated interaction between this high tech core and wider economic growth.

And I don't see in China how they set up the linkage between all these great high tech industries that they have and the 90 or so percent of the economy, which is doing something else.

Well, it doesn't have to.

But the way that they have, in fact, executed this tends to lead in that direction.

And so here's why.

So at the same time that they have been doubling down on industrial policy –

They have also been much more tightly regulating their service sectors.

So a few examples.