When drawing conclusions, it's a good idea to test theories against hard evidence - BOTH factual and counter factual.

Think tanks are notorious for cherry picking the factual evidence and ignoring inconvenient counter factual evidence due to the nature of their mission. That's the reason think tank reports don't make the grade of peer reviewed articles in prestigious academic journals.

From your on the ground experience, what do you think is the problem?

(1) Very rapid provincial/local government supported innovation and economic expansion across the board with little time for more "big picture" regulatory and risk management frameworks to catch up

(2) a large growth in the number of relatively inexperienced financial market investors created by the expansion who fuel boom and bust market cycles.

What you see is a bit of power balance struggle that is happening as the regulatory and risk management pieces of the government catches up to the expansion and innovation. It's happening across the board - financial, environment, safety, data privacy regulations (ie. companies buying/selling data) etc etc - these headline grabbing actions are one way to build popular support.. not too different from how prosecutors amd regulators operate in the West actually.

"Under non-executive chairman Matt Ridley and Chief Executive Adam Applegarth, Northern Rock had a business plan which involved borrowing heavily in the UK and international money markets, extending mortgages to customers based on this funding, and then re-selling these mortgages on international capital markets, in a process known as securitisation.

On 14 September 2007, the bank sought and received a liquidity support facility from the Bank of England, to replace funds it was unable to raise from the money market. Reporting of this complex scenario led to panic among individual depositors, who feared that their savings might not be available should Northern Rock go into receivership. The result was a bank run – the UK's first in 150 years – where depositors lined up outside the bank to withdraw all of their savings as quickly as possible, particularly since many others were doing the same."

Having said that, I think China's concern may at least partly really be regulatory in nature ... or I suspect they would have good reason to be concerned. (I really don't know their motivations)

Ant doesn't like / want to be a pawn shop... kinda makes you wonder what if anything their loans are backed by / what would happen if they grew even bigger and imploded.

Is this sarcasm?

If I am ambitious, why would I be an innovator in this system? Versus the person deciding who gets rich?

For the same reasons people build better lives for themselves in places even less hospitable to their personal aims. Lack of resources, family, lack of practical freedom... the list goes on. Hell, some people actually are patriotic.

But frankly, I do think this matters much less than people are making this out to be. Larger-than-life superhero CEOs are bullshit. I do not believe you needed Musk or Kalanick to get things that look like their companies. US culture just desperately wants to believe in their homemade gods, so you get conversations like this.

This is well written. Thank you.

If you believe in the exceptional, or believe you are exceptional, America will draw you to it. If you don’t believe in exceptionalism, America looks like it incurs costs for no gain. The Chinese system in contrast looks balanced.

I believe in exceptional people. Almost every measure of a variety of skills has long tails. In most cases, those tails are developed through working at a skill and are not the sole product of innate talent. Incentivising that development thus makes a civilisation more capable.

But I’m not so wedded to this belief as to claim it the only way. If exceptionalism is a fiction, freedom of speech doesn’t make sense: there are no special thoughts which, if extinguished, are unlikely to recur for a long, long time.

In undergrad one economic history prof basically argued America is just a wider bell curve you overly onto the Canadian bell curve. Left side of the distribution you might consider immigrating from USA to Canada because of the wider social net, very far right side of the bell curve you might do the opposite since the ability to generate and keep economic rewards is much higher in America. Obviously a simplified argument but it sort of makes sense. If you look at Mary Meekers appendix, a good chunk of founder CEOs are foreign or second generation foreign born.

This comment makes no sense at all. The threat which freedom of speech is designed to protect us from is not attacks on exceptionalism, but oppression and control by the hands of a dictatorship. It matters nothing if you feel you're exceptional or you just happen to disagree with anyone in power over any subject, be it critical or irrelevant. What matters is that no one should have the right to deny you the ability to freely express your ideas, because that would represent control over all aspects of your life and existence.

Replace “doesn’t make sense” with “isn’t competitive.” If exceptionalism is a mirage, freedom of speech incurs a cost on a country for no gain. Ceteris paribus others without that drag will have an advantage.

Is your correction supposed to be an improvement? I mean, the statement "If exceptionalism is a fiction, freedom of speech isn't competitive" makes even less sense. It makes no sense at all to talk about freedom of speech incurring a cost. There is absolutely zero cost in not persecuting anyone for having a different opinion.

Of course there is. If anti-vax and anti-mask advocates could be silenced by the state, public health would improve in the short term.

Freedom of speech is effortful to maintain. It takes effort and self control for a society to tolerate opposing views within itself. Forgetting this risks the freedom itself.

I think this only holds if you take a deeply communitarian outlook, which is somewhat difficult to mesh with a belief in the value of the exceptional individual.

I value freedom of speech for the same reason I value other freedoms, for the boringly baseline and everyone else, as well as for instrumental reasons - briefly, freedom is its own good because humans are wired for it; and suppression of speech leads to broken, damaging government.

In any case, small clarification - I do believe that exceptional people in the sense we're discussing exist. But they are far rarer, and the Superhero CEOs we're talking about are not those.

Right until the moment we saw how America (society and government) handles pandemics and school shootings.

Even a decade ago, what you said would have been true but now in the medium term, I'll pass :-)

It's a pity.. such an incredibly beautiful country.

It takes the right guy and the right environment to make that kind of magic happen.

With 1970s tech and only ten times the budget, the Soviet space program certainly innovated a lot more than SpaceX did, in all fields, from computer science to basic physics, to metallurgy, to jet engines, and built more ambitious missions.

Most of the technological achievements of the last century we're done by governments, the private sector was very good at productization of these acievements, but it's inherent shortermist thinking actually stifle innovation.

For example, the idea of reusable rockets with the first stage landing vertically actually originated at NASA in the 70s. It wasn't pursued because realizing it at the time would require a human to guide the descent, which makes it very impractical.

SpaceX applied modern tech to an old concept, a reusable first stage via powered landing. They didn't do that much innovation. Landing a booster was already a solved problem, now the matter was to scale it up and automate it.

It was solved on paper. SpaceX did it.

Note, too, that nobody else was thinking about solving this problem in 2001. Or 2011. Space had become a jobs program per ArianeSpace and ULA.

What SpaceX did was to put a second stage on top of that, scale it up, and make it automatically guided. You're going to have a very, very hard time arguing that this is anywhere even near the level of innovation that NASA or the Soviet space program achieved in a third of the company's lifetime.

As for the stagnation in space, sure. That's the issue with government programs in our current paradigm, they are heavy and the best course of action is seldom taken. Also, for some reason the US has an aversion for SoEs, so NASA, for ideological reasons, wouldn't have been allowed to make their own reusable launch vehicle and make a profit out of it.

Sure maybe multiple people could have taken Uber from $100M of revenue to whatever the current day performance is, but at the end of the day it was him and the other two dudes (from the book) that quit their jobs and did it (and raised money from an Internet forum, etc).

This is the whole man in the arena argument by Teddy Rosevelt. Easy to say from far, but probably harder to do; like that old saying that work gets harder the closer you get to actually doing it.

Respectfully.

Regardless of him being a founder or a usurper, I don't think Tesla or SpaceX would have been the businesses they became without Musk. He was the primary driving force behind the initiatives that led to their current day success.

It reminds me of the "but you didn't" argument, said in response to someone looking at a painting or piece of art and saying "I could have done that". Maybe many people could have done for Tesla what Musk has done, but they didn't.

Source: https://en.m.wikipedia.org/wiki/Citizenship_in_a_Republic

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” (1910)

hear, hear

This is terrible to say, but you have to (my belief) basically wait for that older generation to die and the newer one to mature to undo the effects of that regime.

There is a crazy game theory degradation when you lose trust and corruption rises. It’s hard to convey just how insidious and broken such a society is. And this is communism, not socialism which appears to be fine based on Western European experience.

One of Mitt Romney’s coworkers at Bain wrote a book a few years ago and France is actually more productive than America and has grown faster, as measured on GDP dollars per capita per hour. Aka they are more productive. Yet USA works like 2100 hours per year and France is closer to 1700, which is why you have the GDP per capita differential.

End of the day, institutions matter.

Most medium-big All companies have one or more board members coming from the “party”.

It’s not a secret they very calmly tell you the same thing when you visit them in China.

Agree this isn’t news to anyone familiar with China. What led Ma to make the alleged comments is beyond me.

That doesn’t invalidate discussing its effects.

Why would the person deciding who gets rich let someone else become such person? I mean, it's not impossible, but is certainly very hard, risky and needs some unique skillsets.

Sometimes you don't have the choice, no matter how you are ambitious.

No man rules alone. And no man is immortal.

If you are smart, ambitious and lucky enough to build a multibillion dollar company, you can put those faculties to work climbing the political ladder.

What else are you going to do, not try anything?

Example: you think lending to folks with low credit scores is a risk, but I evaluate credit in a different way that lets me discover that some folks with low credit scores really are credit worthy.

Note that I am not supporting Ant Financial with my comment. I have no clue how their business works. But your comment is missing a key point.

However, if you're playing with someone else's money, then you do not get the privilege to make arbitrary calls on what's risky and what's not; the society has to presume that you may be mistaken or lying (especially because there's an incentive to lie), we have to discard and ignore your novel, innovative evaluations, and evaluate the risk according to some conservative measure that other people trust. I mean, it's not about being allowed or disallowed to make the loans, it's about capitalization requirements to cover the risks i.e. the need to back up your assumption that these people really are credit worthy with your own funds.

Innovation on better credit evaluation can help you lose less money on bad loans, which directly impacts your profit as a lender; but it can't (or at least shouldn't) be used to justify that you deserve extra leverage so that you'd have lower capital costs; the capital requirements are there to protect others from your risk-taking.

100x typical risk is not something most investors recognize as real let alone a sane investment. A financial advisor would ask how the fund is making a 100x return and step faaaar back from that portfolio.

Jack Ma is right in pointing out and then proving to us how terribly financialized the world economy has become (it's not just China). The stock market has nothing to do with the economy, it's financial (and political) theatre.

I genuinely would not pay attention to one word he says or writes, it bewilders me that anyone does.

So yea ironically if you are a Chinese innovator at early stage you might find there’s much less restrictions in China to innovate (not necessarily from moral high ground as long as it’s lucrative ) than the US. Later you become big and draw more attentions but hopefully you know how to play by the rules. I personally don’t think it will make early stage innovation harder

So bribery? Is that what you mean?

I imagine those scenarios don’t go well for the early innovators unless they themselves have a party sponsor that out ranks the incumbent.

Fwiw that can happen in the US too. If a corporate exec says something unwise during the pre-IPO quiet period, the IPO can potentially be scrapped.

And there other consequences to unwise public statements, like when Elon Musk publicly claimed he had a major new deal, which moved markets and then turned out to be a lie. He got bitch-slapped by the SEC for that.

If it's things like free speech and a wide and colorful political spectrum, then yes, China basically has no freedom.

But if it's economic freedom, China has way more than most western countries.

Remains to be seen which kind matters for innovation.

and we have a situation where political freedoms a shrinking every where with different speeds and from different starting points, economic freedoms are moving in different directions all over the world even inside big countries.

without a very complex model of all of it it's nearly impossible to tell what combination is the most favorable to a particular kind of innovation(for example face recognition might be a lot harder to innovate in a country with great political freedoms regardless of economic freedoms).

Wait and see. This is just one week in a 20 year journey.

Ma hasn't lost anything.

How can that innovation justify the astronomical risks?