Graham Allison on the Global Realignment: Iran, China, Israel, Greenland
3/9/202663 mincomplete
0:00Welcome to another episode of the All In Interview.
0:02I'm really excited to be joined by, back to All In, Harvard professor Graham Allison.
0:07Professor Allison, welcome back to All In.
0:10Thanks for having me. We last had you at the summit in Los Angeles, so
0:15it's great to have a conversation.
0:16A lot's happened since we last got together.
0:19For the audience, Graham Allison is the founding dean of the Harvard Kennedy School.
0:23He's advised every secretary of defense since Kissinger.
0:27He's helped dismantle 12 ,000 Soviet nuclear weapons, and his book, Destined for War, remains
0:34the definitive framework for understanding the U .S.-China relationship.
0:38I think it's worth kind of bringing forward some of the things that have happened
0:42in the world since we last met.
0:43I'm going all in. If you were building a global financial system from first principles
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1:14Let's start with Iran. The U .S.
1:16and Israel are in the middle of an attack on Iran, and the supreme leader
1:20is dead, but the regime is still holding on to power.
1:23Where do you think this conflict will take us, and are we sleepwalking into World
1:29War III? Well, thank you again for having me back.
1:32I will have a great podcast.
1:34I enjoyed the summit, and I'm sorry we're not there in person to catch up,
1:39but I think about Iran, how much to say.
1:43So, this could be a long lecture.
1:45Let me just do four or five quick points.
1:46First point, most important point, is that there's more questions than answers.
1:51So, there's a huge level of uncertainty currently about what's happening and about what's likely
1:58to happen. Part of this is Auschwitz's famous fog of war, but there's a fog
2:05of war that's actually increased because we got two big fog machines adding to the
2:11confusion. Namely, Trump and the administration on the one hand, and Bibi on the other,
2:18and then we got all the chattering class around it.
2:21So, I would say, why did Trump decide to go to war now?
2:27There's six different reasons he and the administration have given, and each one they back
2:31around. What's the objective? There's five different objectives, backing around, and when is this war
2:38going to end? You know, a day, a week, a month, who knows?
2:44So, it's very uncomfortable to recognize how uncertain things are, and most of the conversation
2:50about it tries to make it more confident.
2:53I think the place to start is there's a huge amount of uncertainty.
2:57Having said that, I'll still give you my prejudices about a few of the points.
3:00Point two, this has been an extraordinary demonstration of supreme military power and supreme intelligence
3:10power. U .S. military and the intelligence community and the Israeli counterparts have been way,
3:17way, way off the charts, and I think this should make all Americans proud of
3:22what's been built over this decade, two decades of investment, but especially the past decade.
3:28And the third point, there's no tears to be shed for Khamenei and the Islamic
3:35Republic regime. It's an evil leader, an evil...
3:38regime, there's no bad thing that could happen to them that we shouldn't be cheering
3:42out of that. Next point, though, breaking something's a lot easier than building something.
3:49And destroying targets is something that our military knows very well how to do.
3:55Building a new regime, regime change, is something that we know historically doesn't work very
4:03well, at least in Iraq and Afghanistan.
4:06We had every word said that's been said in this case.
4:11And we then went in all in and spent more than a billion dollars of
4:17many, many thousands of American lives.
4:19And when we went to Afghanistan, the Taliban were ruling.
4:24When we left Afghanistan, the Taliban were ruling.
4:27So I would say, unfortunately, it's against a backdrop that's hard.
4:31The next point's slightly more controversial, but I think this is Beebe's war.
4:37If your reader or your listeners don't remember Moby Dick, they should go look at
4:41it again. Ahab had this fixation, obsession with the white whale and tried to find
4:47a way to kill the white whale whenever he could.
4:50For the last two decades, that's been Beebe's number one, number two, number three agenda.
4:54He's tried to sell that war to Obama, to Trump one, to Biden, and how
5:03he succeeded in mesmerizing Trump, whom I thought had his number.
5:07I was surprised. So I'm pro -Israel, but anti -Beebe in this respect.
5:12And I think that I understand he's brilliant politically, but I don't think this, the
5:20arguments that were made that Trump has actually repeated, that Iran was about to attack
5:28us. I see no evidence for that.
5:30That Iran was about to get a nuclear weapon.
5:32I see no evidence for that.
5:34That Iran was building an ICBM that was going to attack the U .S.
5:38I see no evidence for that.
5:39There's many, many bad things about the Iranian regime, but not most of the claims
5:44that were made. So I look at this and I hope it turns out well,
5:50but I remember that in wars very frequently, it's easy to get in and it's
5:55quite difficult to get out.
5:56Let me double click on that point.
5:59You mentioned there's multiple reasons that the administration has messaged for doing this, multiple views
6:03on what success looks like, multiple timelines on ending it, and that this is Beebe's
6:09war. How do you think Trump was motivated to do this?
6:15What is the real motivation?
6:17And I will ask this in the context of the big delegation and visit to
6:21China coming up next month.
6:23Is Trump motivated fundamentally to create leverage with China and use this as a tool
6:28to try and maximize his negotiating leverage going into the Chinese negotiations?
6:33That's a great question. And I wish that the answer was, this was all part
6:37of a grand strategy. That would make me feel hugely better.
6:42But I try to do Trumpology, and I was actually having dinner last night with
6:48Bill O 'Reilly, a former student who I think is one of the better Trumpologists
6:52for trying to interpret, and we were going back and forth through this.
6:56It's easy enough to see why the window, tactically, the window in which this attack
7:02occurred was chosen, because here you got 40, you got the supreme leader and 40
7:07of the other leaders of Iran out in public.
7:10So that's an opportunity as a target.
7:12And the best opportunity that's come along.
7:15The question is, why would you be attacked?
7:16And especially Trump, given his campaign and his previous views about not repeating the mistakes
7:26of the people that took us into endless, winless wars.
7:29And I think it's, I mean, I think Bibi is a magician.
7:34I think his single -mindedness is impressive.
7:39I think his agility in making arguments and developing arguments is impressive.
7:46How he managed to persuade Trump this was a good idea for the U .S.
7:51now, I don't have a good idea.
7:53And I think that, I think if I listen to the reasons why even the
7:58people closest around them have given, or that Trump have given, they don't seem persuasive.
8:04Now, partly, Trump is erratic.
8:08Partly, he sort of, you know, acts on the basis of instincts.
8:14Somehow, it came to him that this was, you know, something that could be done.
8:19I think, actually, Bibi painted a pretty, I mean, the upside of this picture, if
8:25it's successful, and I hope now that we've gone into what it would be, would
8:30be redefining security in the Middle East for a generation.
8:34So, getting rid of the Iranian regime as the Bibi and company have gotten rid
8:41of the proxies of the regime earlier, which, again, since October 7, been extremely impressive,
8:48could possibly, you could say, well, there's going to be a whole new Middle East.
8:52And if the Middle East were all like the UAE, that would be fantastic.
8:58Fantastic for all the human beings that live there.
9:00So, I think maybe he got excited by the upside, not quite careful enough about
9:07the risks or the downside.
9:09Because the number of ways in which this could go wrong, you know, if we
9:13woke up tomorrow or today and a couple of ships have been sunk or a
9:17couple of hundred of Americans have been killed, this is going to have a very
9:21different image. And you think that this is independent, then, of the action with Maduro
9:29and independent of the big delegation headed to China for a big negotiation next month?
9:36Well, I wouldn't say entirely independent.
9:39I would think with Maduro, so Trump, I think, again, this is my, whatever, armchair
9:45Trumpology, but I would say, initially, he thought tariffs were a magic wand.
9:50And every leader thinks, if you have a magic wand, that's fantastic.
9:55He's tried to tariff magic wand and discovered it.
9:59Didn't quite have all the effects that he imagined on Liberation Day.
10:04He then discovered the American military, which genuinely is a huge wand.
10:10And the Maduro operation was just spectacular.
10:15I mean, again, it's a military and intelligence operation.
10:18Brilliant. No other country in the world could even imagine doing something like that.
10:23And that actually, you know, makes all of us stand taller.
10:27It can also provide a little, or historically encourages hubris and an imagination that this
10:35magic wand can work in many other arenas.
10:38I don't mind at all the proposition that every other country should take account of
10:44the fact that the U .S.
10:45has the most remarkable military and intelligence community in the world.
10:50And that's not a bad backdrop for China and for a China trip.
10:55So I agree that things may not be completely disconnected, but I think in terms
11:00of the timing, I mean, right now, when is the war going to be over?
11:04If you talk about three or four weeks, we'll already, he'll be in China March
11:1029. So my inclination, again, if we were just doing prediction markets, is that he's
11:18going to find a way to declare this over before then, because he needs a
11:22little time to get his mind set on that.
11:24But if you ask the folks at the Defense Department, if you ask the people
11:28in Israel, they're thinking this is another month or beyond there's a war.
11:34So again, just things I don't think are quite, you know, in sync.
11:37Jason's joined us. Professor Allison, it's always a treat to have you here on.
11:40Nice to see you. Nice to see you.
11:41It's just amazing to have you on here and to give us this time.
11:44If things were to go extremely well, and Iran went from a monarchy to a
11:51dictatorship, and now in this third act here in the modern day to a democracy,
11:56and you actually had a democracy with 93 million citizens in the Middle East, what
12:02impact would that have on the region?
12:04We've seen the Gulf monarchies evolve, human rights, but they're still monarchies.
12:09You have one other, I guess, democracy in the region in Israel, but this could
12:14be extraordinary if it was a democracy.
12:15But what would that mean to the global chessboard?
12:19Well, it's a good question.
12:21I mean, if this could occur, it would be spectacular.
12:25Even, I think, but I would say this is way, way, way too ambitious.
12:30There's a hundred things that would be wonderful outcomes, better than what's likely, that would
12:38be short of that. I remember in Iraq, after Bush failed to find nuclear weapons,
12:45which was the initial, I would say, somewhat cucked up rationale for our going into
12:51Iraq, Condi Rice, who was the secretary, gave a speech about, well, how wonderful it'll
12:56be when Iraq is a democracy and market economy, quote, radiating stability through the Middle
13:03East. So we're pretty good at doing I Have a Dream, you know, in that
13:07version. I think that's a way, way, way stretch.
13:10I would be very happy with a regime there that simply was not about building
13:16nuclear weapons, was not about building missiles that threaten the U .S.
13:21and our friends and allies in the region, and not about supporting proxies.
13:27And if it's a pretty cruel regime, unfortunately, that's unfortunate for the Iranian people.
13:33Well, the Persian people, when I'm a student of history, I love Persia.
13:39You know, I remember Cyrus, and I remember the Peloponnesian War.
13:44I remember, you know, this is a fantastic culture and history.
13:48They've been hijacked by a terrible, terrible group of people.
13:51And if those people can be somehow ousted, you know, wonderful for Iranian people and
13:58wonderful for the world, if I were betting it, again, I'd say, go back to
14:04the first point. It's questions, uncertainty, finding signals in the noise, extremely difficult.
14:11But if I were betting it, it'll end up that the guys with the guns
14:15will, in some version, be the next iteration.
14:20And if they're tamer and less determined to threaten our interests, will this have been
14:31worth it? Well, I could.
14:33We'll have to look at, you know, over the longer run.
14:37I think the other thing that we know about wars is that they're unpredictable and
14:44that they have many unanticipated consequences.
14:47So I think as we watch what's happening now and see what impact does that
14:51have on oil and gas prices, predictable, so you can see, and going and going.
14:57Well, what impact does that have on other countries?
15:00Huge. So the number of countries now whose economies are being disrupted by this impact
15:07and therefore blaming us for it.
15:11I had a call from someone in Taiwan yesterday saying, wait a minute, did anybody
15:16think what it's doing for us?
15:18Since they had about half of their electricity comes from their natural gas that is
15:24now coming, you know, now not coming.
15:28If you ask about what is this meaning for Ukraine, all the patriots that were
15:35to hope to prevent missile strikes from Russia on Ukraine are now in the Middle
15:45East. So that's that many more target.
15:49So there's just, unfortunately, it unfolds in so many, so many different directions.
15:53Now, I don't want to seem too pessimistic about it because, again, I think we've
15:58been shocked, fortunately, on the upside by how professional our military has and intelligence folks
16:06have been and also how pathetic or hollow the Iranians have been.
16:12First day of the attack, I was at the defense department, and I gave them
16:16a list of 11 things that I would do and be capable of doing if
16:21I were playing the Iranian hand.
16:25And they seem to be, I mean, I hardly even want to say out loud,
16:32but they act like a paper tiger.
16:34Do you think there's more damage that can be done by being more successful?
16:40You know, if we think back to Iraq, Iran is twice as many people, 100
16:45million versus 50 million, four times the land area, a much better equipped military, and
16:52arguably the military system, the regime, is embedded in every aspect of industry.
16:59So the more successful the United States is in dismantling the Iranian regime, and as
17:08was advised by Condoleezza Rice, who apparently was just in the White House today and
17:11advising the president and publicly stated, it's time to finish them off, it's time to
17:17go all the way, etc.
17:19Does that not then leave a country with no infrastructure, no leadership, 100 million people
17:27in tatters, and that's the classic breeding ground for some of these extremist groups to
17:32seize control and seize power, and we don't have the resources to go in and
17:36have another multi -decade Afghanistan -Iraq problem?
17:39I'm afraid I agree, yes.
17:41I think that the uncertainties about that, I mean, you can do four or five
17:45different scenarios for how this might conceivably end.
17:49It could end up being an extended civil war in Iran among the various national
17:55groups, even some of them possibly seceding.
17:59So, again, fairly chaotic, look like Syria plus, okay?
18:04It could look like Iran or Afghanistan.
18:07Well, excuse me, we were there for more than a decade with unlimited resources.
18:12hardly any constraints on the number of people and how did that work out so
18:17i i i say that i'm a small c conservative and kind of think history
18:24is not always no it's certainly not the only guide but it's a good place
18:29to start oh i'm i'm i would say nervous yeah is it too late to
18:34have a venezuelan outcome where we've taken out the head of the snake and we've
18:38simply replaced it the snake can continue operating and living without too much destructive damage
18:43and effect but it seems like we may be a little too far gone now
18:46in iran and that to take this all the way might be very difficult to
18:50manage all right if i were again then we're all in the dark and all
18:55the uncertainty so back to point one but after that i would say trump is
18:59erratic impulsive but he has some coordinates and one of them is is his power
19:07okay november 3rd is a big day for him he's focused on that the economy
19:14is a crucial element of that that's part of the framing of the of the
19:19china relationship the impact of this on the economy is already evident okay and could
19:27become more evident the public opinion again i think he i saw today uh in
19:35the journal that he's sent hank's hankspeth out to sell the war good luck i'm
19:43not sure he can sell uh so public opinion of this it's about six to
19:48four unfavorable because they didn't make the case for the war in advance uh the
19:54impact of this on other parties including uh parties that we care about is negative
20:01uh so i i could easily imagine in the next week even and declare if
20:10you look at actually the way in which he's left himself room to declare victory
20:14at having as you say had a cut off the head of the stake destroyed
20:20their military their nuclear capabilities destroy their ability to project power or in the defense
20:27department we always say destroy or degrade degrade has a lot of dimensions as you
20:33would point out and uh now it's up to the iranian people to seize their
20:39own government and take advantage of the stuff the difficulty with that will be maybe
20:44wants to fight on till the regime is destroyed and that'll be an interesting struggle
20:50to see how that goes earlier trump demonstrated that when he thought it was in
20:56american interest he was prepared to pull bb's chain so we'll see this is uh
21:01i think and before we move out of the mina region a topic that's coming
21:06up there's obviously no support for this war in america most americans put foreign affairs
21:12today at one or two percent of their concern economy and many other issues are
21:17high on their list and he's been pretty clear hey we're not going to put
21:21boots on the ground and then there's this anti -semitic underpinning that's happening in america
21:26that's become pretty acute and you had uh rubia who we mentioned earlier say hey
21:33we did this because uh the israelis were going in anyway and we had no
21:38choice and then they walked that back explain to the audience how we should look
21:43at that turn of events where there's a group of people in america specifically people
21:48in the maga party who believe trump has betrayed them and that he's captured by
21:53the israeli um government in some way and he's doing their bidding i'm not saying
21:59that that's my perspective but that is a an undertone that we're seeing and that's
22:03something new in our lifetime i think it certainly is so this is a big
22:07topic but i'd say when i talk about it i i say i'm pro -israeli
22:13and anti -bibi so is bibi is not israel the people whom i know mostly
22:19and respect mostly in israel are the national security barons the people who've been the
22:25chief of staff or the head of mosad or the head of shin bet or
22:30the people that work in that in those structures and they believe that bibi is
22:36actually destroying the ben -gurion's israeli democracy that they cared about or if take tom
22:45friedman it's pretty hard accused him of being anti is you know anti -semitic uh
22:51but he's been i think very clear and very courageous in pointing out that what
22:57bibi's doing to israel's democracy is really destroying it and the impact of that on
23:04jewish kids in america i mean i say this on campus where they want to
23:09be proud of israel they they deserve to be proud of the country that has
23:14been built over these years but they look at the behavior of these crazy right
23:20-wing settlers and their activities in the in the occupied west bank or they look
23:25at some of the activities in gaza or they look at now the kind of
23:30unlimited uh uh war without any any even attempt to make arguments about proportionality and
23:37just say wait a minute that's not the country i want to be proud of
23:41i want to be proud of of robin's israel i want to be proud of
23:45ehud barak's israel i want to be uh proud of ben -gurion's israel and i'm
23:50i'm pretty much of that of that persuasion i think what what uh what bibi
23:56risks in this and risked earlier uh with uh citing i mean interfering in american
24:06politics in invites pushback so i think this could have a big long -term negative
24:15effect both in the democratic party and the republican party especially younger under younger people
24:20if you look at the polling for the under 30s on israel it's just like
24:25shocking yeah can we move to china because i think that again this is going
24:33to be the big story over the next month you've said publicly that ousting maduro
24:39from venezuela could embolden china to accelerate a taiwan takeover the cia it has been
24:46reported in media warned tim cook of apple and other tech companies about a possible
24:52invasion as soon as next year you've separately met publicly with chinese officials what's your
24:58view on the likelihood and the timeline of a china attempted takeover of taiwan and
25:04what are these kind of motivating factors that might make that happen sooner so uh
25:09let me clarify i i'm not sure or i may have been misinterpreted but obviously
25:14the chinese watch very carefully they study wars and they will learn lessons from what's
25:19going on here but i don't think that is i don't think the venezuelan operation
25:24other than making them feel envious about the case capabilities will impact their likelihood of
25:31attacking Taiwan. So Taiwan, number one, I think the likelihood of an attack on Taiwan
25:37this year or next year or even into 28, but let me just do 26
25:42and 27, absent some major provocation by Taiwan or some other third incident is very
25:51low. I put it at about where the prediction markets are, 5 % or something
25:57low. So I'm not counting on that.
26:00Why is that so low?
26:02I'm just curious. Why 5 %?
26:04Yeah. Okay. Because first, they have a theory of the case of what they call
26:11peaceful reunification and they think things are involving in that direction.
26:16The theory of the case is that the current government, which is a DPP government,
26:24which currently is stymied by its opposition in the parliament.
26:29So they can't even buy the arms sales that we previously gave them.
26:35There's $11 billion arms sales that the Chinese have complained about, but Taiwan, the legislature
26:42probably won't buy half of that.
26:44Okay. So the current president is struggling.
26:49There's going an election in January 28th and they think it's likely that the former
26:55party, the KMT will be elected.
26:58Somebody, they'll be much more sympathetic to China and to an evolving relationship.
27:04So that's number one. Number two, the Chinese have been engaged in a deep, deep
27:11purge of all of their military leadership.
27:14I mean, it's hard to believe.
27:15And you read about in the paper from time to time that he fired this
27:19guy, he fired this guy.
27:20He's fired the equivalent of every four star in our whole political system and every
27:27combatant commander and every commander who would be commanding the force, commanding the forces over,
27:34you know, to deal with Taiwan.
27:35So while they've been building up that military capability, it takes a long time to
27:40get that back into order in my view.
27:43So I would say that part makes me feel less likely.
27:47Third, I think he understands that if he were to do this, there's a risk,
27:52not a certainty, but a risk that the U .S.
27:55would become involved and that the impact of that either on China's economy, which he's
28:00got to worry about first, and also on its evolution, would be significant.
28:05So I'm looking for, and finally, in Trump, he has the most accommodating president that
28:16China's likely to see with respect to Taiwan.
28:19So Trump has made no secrets.
28:20I mean, he talks publicly of his views about Taiwan.
28:24And I think a couple of the memoirs, there's this discussion where he's in the
28:30Oval and he's talking about Taiwan and he picked, or somebody asked him about Taiwan,
28:35he picks up one of those Sharpies and goes, you know, on a spot on
28:39the Resolute desk. And he says, that's Taiwan.
28:43Then he draws his hand around the whole desk.
28:45He said, that's China. So I'd say, you know, I'm less worried about Taiwan in
28:52the, on the, on the current path.
28:55Now, over the longer run, the Chinese are absolutely clear, Xi and all the leadership,
29:01that Taiwan is an inseparable part of China and how that could be satisfied in
29:07a way. that allow the Taiwanese the degree or substantial degree of the freedom with
29:14both their economy and their society is the challenge that we've been struggling with for
29:20a long time. But the good news is we've been doing this for 50 years
29:24and Taiwan has never seen such circumstances.
29:30So I say to the Taiwanese friends, you know, basically, don't screw it up.
29:36Are we taking the right course of action, do you think?
29:39I guess the big question for you is what's the strategic imperative to keep Taiwan
29:46from falling under direct Chinese control for the United States?
29:51And are we taking the right actions to hedge our bets, if you will, against
29:56that happening, meaning on -shoring of semiconductor manufacturing, but also maybe from a defense perspective
30:01and positioning perspective, you can share a little bit about whether we're on the right
30:04track. Sure. That's a big question.
30:06So first, Scott Bessent, the Secretary of the Treasury, when he's asked about this, he
30:13says the biggest threat that he's ever seen is the fact that 96 % of
30:18the advanced semiconductors come from one small island that could become cut off.
30:23So TSMC, as you all have discussed before, produces the advanced semiconductors for essentially everybody
30:31of whom we're the principal consumer, and we prevent them shipping this to China.
30:38That's a pretty complicated situation to begin with.
30:42Secondly, Taiwan is halfway around the world, as President Trump says, and 90 miles off
30:49the shore of China, and we're far away and we have a lot of other
30:53things to worry about. So it's a little bit like Cuba.
30:57So inherently indefensible if China were seriously determined to either destroy it or to take
31:04it. Now, on the other hand, since the opening to China and the Shanghai communique,
31:13there's been an agreement of maintaining a status quo with the U .S.
31:19commitment being what's called strategic ambiguity in which the U .S.
31:25and China have been committed to Taiwan.
31:29Internal development is left to its own device, and China doesn't use military force to
31:35prevent that. But we say Taiwan is, there's one China, and the only China's capital
31:42is Beijing, and then we have a little bit of an ambiguous way to talk
31:47about the relationship between Taiwan and China, but certainly letting it evolve in any way
31:53that the parties would be prepared to live with.
31:55Most people expecting that over time, this relationship will work its way out.
32:01And when I talk to Chinese about it, I say to them, first, you've never
32:06seen 50 better years on either side of the straits.
32:10So this has been fantastic for both societies in terms of what they care about.
32:15And secondly, if they look at this situation, if China's core strategy is correct, which
32:23is the inexorable rise of China, and that continues, in another decade or two, Taiwan
32:31will look like a flea, and therefore we're not going to be an issue.
32:36If China's main narrative doesn't work, Taiwan is not going to be their biggest problem.
32:43So they should work on the other issues.
32:45Sure. Sure. It's... If you think about China projecting influence around the world, how important
32:50is it for them to continue to do that?
32:52There was recently an objective, I think, of a GDP growth in the 5 %
32:57range, 4 % to 5%.
32:58Is that right for China?
32:59Four and a half to five, yeah.
33:01Four and a half to five, which is a record low in recent history for
33:06them. Is it imperative for China to continue to extend geopolitical and economic influence around
33:14the world to grow its economy?
33:17You know, going back to the framing of the rising power, do they still need
33:21to do that to keep people happy at home?
33:24Or is China going to be able to maintain happiness at home in a multipolar
33:31world where China and perhaps the US and perhaps some other countries share influence around
33:37the world? This is one you raised and we talked about the last time, which
33:42is interesting. I think we agreed.
33:44So let me just, again, for people that don't remember, start.
33:48So first, China is a meteoric rising power.
33:53Never has a country risen so far so fast on so many different dimensions.
33:58If you take a snapshot of the year 2000 and the year 2025 and compare
34:04China on any metric of power, it's just dumbfounding, dumbfounding.
34:09So a country that I have compared it to kind of like a Formula One
34:16racing, a country that we couldn't find in our rearview mirror in 2020, or sorry,
34:222000, because it was so far behind, we have trouble finding in our rearview mirror
34:27today because it's beside us or in many races even slightly ahead of us.
34:31So that's GDP, it was less than 5 % of global, or it was less
34:40than a quarter the US in 2000.
34:43Today, by purchasing power parity, it's 25 % larger.
34:47In 2000, trading, it was 5 % of global.
34:52Today, and we were 15, today it's 35 and we're 25.
34:55If you do advanced tech in any arena, take 5G, my goodness, take EVs, my
35:04goodness, take whatever. Okay, so rapidly rising power.
35:09That's essential. That's the infrastructure for their grand narrative, which is the inexorable rise of
35:16China to its natural position in the international order, which they think is at the
35:22top of the pyramid. So they are absolutely determined to be number one in their
35:28own arena to begin with, and then after that, you know, maybe more.
35:33And they also, they have a second, the second proposition, there's the inexorable decline of
35:41the US. And they look at the various parts of the US and the components,
35:46including getting involved in unnecessary wars as part of that story, that part of their
35:52narrative. And that dynamic, the shifting of the seesaw, is what gives you this thucidity
35:59and dynamic that we discussed before, which most often, hard as it is to believe,
36:05but most often, discombobulates people so much that then some incident or accident, like something
36:11that happens over Taiwan, leads to a vicious circle of actions and reactions that drags
36:16them into a war, after which they think, my God, how did this ever happen?
36:21So that's a long story, but I would say.
36:24The economic piece is essential for this, and that economic piece means they want to
36:30be the manufacturing workshop for the world, and the foundry for the world, and the
36:35supplier for the world. There are two major challenges they have, I believe.
36:41One of them is population decline, the other is unemployment, and the AI that we've
36:46seen and what's hitting first could hit them in a major way.
36:51Manufacturing is moving to robotics at an alarming place.
36:54Then you have things like self -driving, which is a major job there for many
36:59people. So on those two axes, when you see the youth unemployment, which I think
37:04is 15 % or 20 % in some locations in China, and the population decline,
37:09is that she's two biggest challenges to deal with?
37:12And how does that affect this relationship?
37:18Good question. And this is more in your space than mine, because I've tried to
37:22follow, but Elon says there's going to be more robots than people, okay?
37:26Yeah. And if you ask him where are the most advanced robots in the world,
37:31the ones that are kicking his ass, or he worries about, they're China.
37:35So they've got a huge number of robot companies.
37:38When I was there in last, when was I last there?
37:43In January, I went to see a factory, a Xiaomi, the phone company.
37:52A Xiaomi, three years ago, decided they would make cars.
37:56After watching Apple spend $10 million, not able to make a car.
38:01Within three years, that factory is producing cars right now.
38:06And they have a huge demand for these cars.
38:09They have three lines. One of the lines is all robots, okay?
38:14So they're putting a lot of robots to work.
38:16More than half of the factory worker robots in the world are in China.
38:23And so some of the people are saying, well, you know, demographics is going to
38:28be not so big a problem, because if demographics is only a problem because of
38:32workers, you know, we're going to have workers.
38:35In fact, the American workers are more worried about, you know, taking our jobs.
38:39So that's a – now the issue for the impact on education, they have a
38:48number of people that have been educated in arenas that are now no longer, you
38:53know, high -demand jobs. And unfortunately, we have a lot of that too.
38:57I mean, if you look at people, college graduates now that graduated in, I don't
39:02know, DEI subjects, they're having trouble getting jobs.
39:06So I would say it's a little – there are more similarities there than differences.
39:11The other thing is Chinese have demonstrated a great – much greater capacity or readiness
39:16to adopt and adapt to new technologies.
39:21So if you look at the – I'm sure you have, or you all have
39:25probably had him on, Jensen or Wang.
39:28But when he went to China, he said, gee, I think I came to the
39:31future. You know, that – the people don't – you know, they don't use –
39:36not only do they not use coins, they don't use bills, they don't use checks,
39:43they don't use credit cards.
39:45They just have their face and then go through the store.
39:50Let's shift around to what some have described as the longer -term playing field, which
39:57is near the Arctic. Some have argued that much of the recent push.
40:02for Greenland by the United States is driven by the military threat coming over the
40:08Arctic from Russia and from China.
40:10I'm wondering if you could just help frame for our audience, why is Greenland so
40:16strategic to the United States?
40:18And is this effectively a proxy for defense against China and Russia?
40:25And why now? Another big question.
40:28So let me start with the bottom line.
40:30I think that at least from the judgments of the people whom I respect the
40:38most, we can, we the U .S.
40:41can get everything we want from Greenland without invading it or owning it.
40:46So Greenland has been an important base for missile defenses, a tool base.
40:52We had two other bases that we closed, but we can open as many other
40:58bases as we want, and they're very amenable to that.
41:01I think President Trump's right to say, well, yeah, but I don't want a short
41:05-term lease on these bases.
41:07I would say a 99 -year lease sounds like a pretty good lease to me
41:11for, you know, in 99 years, God knows what's going to be happening.
41:14But to the extent that missile defense is part of it, which it is, I
41:20would say that's a part.
41:21For the naval component, yes, I think that as the Arctic melts, you already now
41:30have an opening of sea lanes and the way that the territorial ownership, the abutters
41:40have their claim to the local and regional.
41:44And there, the main claims are Russian and Canadian.
41:48We have a chunk from Alaska, and then Greenland would be a piece of that.
41:52So I would say that's relevant.
41:54But those sea lanes, at least for the Navy people I talk to, are, they're
42:00not as important as they used to be, because now there's so many different ways
42:04to get it. But you're not going to try to blockade a, you know, a
42:10waterway with ships. You're going to do it with smart minds, or you're going to
42:15do it simply by attacking the ships on the, on the away.
42:19And if it's underwater, underwater is pretty much all the same.
42:24But it's good to have narrow places and shallow places for looking for things.
42:29But, uh, so I, I, I would say, I think Trump's, uh, uh, Greenland venture
42:36was more like for fun.
42:38Uh, plus, uh, I mean, I think, uh, one of the people that knows him
42:43well says, uh, remember he's first off a reality TV producer and star.
42:49So he just has fun starting with a drama, uh, getting people very excited, uh,
42:56letting the tension rise and then finding a resolution.
43:00And I think we're on track to a resolution there.
43:02Let me push back just on that point.
43:04What I have heard is that there's rising socialism in Western Europe, growing concern that
43:12over time, as socialism becomes more of the mainstay in the governing models in Western
43:18European nations, those nations fall more under the influence of China.
43:23And as a result, if you think about the influence that China could then have
43:26on, on Denmark and on Danish foreign policy, if the United States doesn't secure what
43:33it needs for the longterm, and it may not know what it needs for the
43:37longterm physically in Greenland today, we only know what we need to.
43:41that we're at risk of china having outsized influence over greenland tomorrow and that that's
43:48the real reason for the big push today for greenland how does that sit with
43:52you and does that align kind of with with what some folks are concerned about
43:57i have to think about it i hadn't heard that argument just that way again
44:01what is socialism is complicated uh certainly the chinese well yes they're socialists in some
44:09respect i would say capitalism is i mean they're autocratic and they're party -led but
44:16then their economy is essentially uh fiercely uh capitalists i mean you have a uh
44:22the uh on one of my friends has gladiatorial conflict that makes the competition in
44:33silicon valley look look tame as the you know as the parties fight each other
44:37uh so because you can't make money because the taxes are so high that's another
44:42and in their case you know they they they decide they're going into an arena
44:49let's say for example evs and so they give advantages to companies getting started even
44:56subsidies and then they let them fight it out and lo and behold at the
45:01end they'll be you know 10 or five but it's fiercely competitive in the meantime
45:06and a lot of guys will get you know trampled along the way and then
45:11those guys are excess capacity and they'll sell things off you know without any concern
45:17about the capex they're just as long as they can stay ahead of the game
45:21you know selling items or even selling out their inventory so i think the uh
45:26i think watching the way watching the evolution of other countries including europe and when
45:33i think uh and their relations with china as well as with us in this
45:39game is a very relevant point and i would say that uh one of the
45:46things that the trump administration has had trouble with is recognizing that if we're in
45:52a fierce rivalry with china they got four times as many people we need to
45:57have some allies with heft on our side of the seesaw to keep it from
46:03going the wrong direction and so yes kind of sometimes you need to give your
46:10ally a cold bath in order to get them to shape up but uh i
46:16think uh uh getting canadians to think of us as an enemy is a pretty
46:22wild idea uh uh i mean any treatment that comes to that conclusion and if
46:29you take carney whom i know from when he's a harvard college kid he's he's
46:35as american as anybody or he was but the idea if you go and threaten
46:40threaten a politician's survival that's a pretty good way to piss them off and if
46:47you threaten to take territory from people that's a pretty good way to make them
46:52feel hostile uh so this is an unusual treatment if we're trying to you know
46:58get guys with heft on our side of the seesaw at the world economic forum
47:02i wasn't sure if it was davos or another one of their forums were you
47:05at the davos one this year sure so as a total aside just bringing president
47:10trump's impact it was two and a half days of people wondering what he would
47:15say when he got there the town shut down as people watched heart risotto is
47:19two -hour stand -up delivery, and then another two days of people sort of trying
47:26to understand and figure out what happened there.
47:28So there's something really correct.
47:31It was a reality TV show, for sure.
47:34It took over the whole forum.
47:35This fellow, Mooch, who was his communication guy for a week or 10 days until
47:43he got fired in the first administration, said on the first night I was at
47:46an event, he said, remember, this is going to be a reality TV show.
47:50It's going to start with the claim that we're going to invade Greenland, which, my
47:55God, invading in a lie, that's a pretty big deal.
47:58He said, then you're going to watch the drama build.
48:00When Trump had a chance to speak, he's speaking this long reign back and forth.
48:05But he then had just a paragraph in which he said he basically took the
48:10gun off the table. But before that, he was doing a mafioso act, even some
48:15mafioso lines about you can either have it the easy way or the hard way.
48:20That's a godfather line. And so people were saying, yikes, what has been loose on
48:27us? So now you have all this drama.
48:29But then he says, I've decided we're not going to invade Greenland.
48:33He just passes that off.
48:35So now the temperature goes down.
48:37And now the third day, he does some other institute or board of peace.
48:43And he says, we now have a framework of an agreement.
48:47So I think half of the time, he's having fun.
48:52Yeah. You know, it's sort of, it does get people's attention.
48:57Sure, it does. You, on a substantive basis, shared a framework, 80 -89.
49:04And I think, you know, I've spent a bunch of time listening to the talk
49:07you gave and some people's reaction to it.
49:10Maybe you could share it with the audience and why it's important.
49:13Well, thank you. I'm glad you, so I think this is a big idea.
49:17So these are three numbers, each of which is the answer to a question.
49:23And if you can remember the three numbers and you can identify the question to
49:29which each one is the answer, you have the big picture about international security in
49:35the lifetime of yourself and even your parents.
49:40That's virtually everybody who's alive today.
49:42So the first 80 is the answer to what?
49:45How long it's been since a world war?
49:47How many years since a great power war?
49:49Since a world war? Yeah.
49:51Now, whoa, wait a minute.
49:5380 years? This is the longest peace in recorded history since Rome.
49:59This is not natural. This is very abnormal.
50:05This is, didn't happen by accident.
50:08This was what the people who founded the international order after World War II were
50:14trying to build a new world order because they had just lived through a terrible
50:18World War II. Simply one generation before, they remembered, hey, there was World War I.
50:25So if we just keep doing this, we should expect World War III.
50:29It should have already happened.
50:31If it could have happened at the Cuban Missile Crisis.
50:33So no great power war.
50:35Fantastic. But a fragile, a work in progress all the time, eroding, inevitably for many,
50:44many different reasons. Second 80.
50:47How many years? Since we've had a nuclear bomb go off.
50:51Fantastic. So think about that.
50:53If you had gone, if there'd been prediction markets and you had gone...
50:58in 1945 or 50, you would have got 10 ,000 to 1 odds against that.
51:02It's impossible. The weapon that ended World War II and you're not ever going to
51:07see any use of those weapons in war?
51:09Whoa. And then, nine? The number of countries, nation -states, that have nuclear bombs today.
51:17Fantastic. Okay, right. Now, how in the world could you have only nine countries having
51:23nuclear weapons? Nuclear weapons being your kind of ultimate security blanket.
51:28Again, John Kennedy in 1963 said, by the 70s there will be 25 or 30
51:35nuclear weapon states because he thought that as states required the capability to build nuclear
51:41weapons, they would do so.
51:43Today, 90, 95 states could have nuclear weapons in a year or two if they
51:47decided to build them. Actually, into the 70s, Sweden had a serious nuclear problem.
51:53South Korea had a nuclear problem.
51:55Taiwan had a nuclear problem.
51:57U .S. closed those down, created the so -called non -proliferation regime.
52:02That's accounted for this time.
52:05But I would say, again, fragile, eroding, not likely to be sustained.
52:11So, when I try to do my giving thanks for, you know, things that I
52:17should be thankful for, thankful for 80 years without a great power war?
52:23If there were a great power war, you and I, we wouldn't be here.
52:27And we wouldn't be having this conversation and all the other issues we have to
52:30deal with. So, I would say the 80, the 80, and 9, we should not
52:34take for great. We should give thanks for the work that was done to build
52:38them. And then we should notice what's going to be required to sustain this.
52:43And we almost had a 10th nuclear power in Iran.
52:46We did. And we had the latest two, if I'm correct here, you'll correct me
52:50because you're the expert, Pakistan and North Korea.
52:52And we had that one Dr.
52:55Khan, I believe his name was, from Pakistan, who was trying to spread and sell
52:59these. Absolutely. Did we make a critical error, we being the West, even the East,
53:05humanity, the leadership, of letting Pakistan and North Korea into this club?
53:11Well, I mean, not into the club, but allowing them to get nuclear weapons, which
53:15is right. The Israelis have had a different idea.
53:19And this goes back to the original attack on Iraq, Osirak.
53:29I call it affirmative non -proliferation.
53:32So they say, we're not allowing nuclear weapons in our neighborhood.
53:36And they've destroyed the nuclear weapon project in Iraq.
53:41They destroyed the nuclear weapon activity in Syria when the North Koreans were building a
53:47plant there half dozen years ago.
53:50And now, they've been the leaders in the destruction of the Iranian nuclear program, which
53:55we participated in. But I, however, I'm uncomfortable about the wars, even in Iran, I
54:03have to cheer for this because I fear additional nuclear weapon states.
54:07And I wish that we had managed somehow, let's take, the North Korean case.
54:13I've even said this to Chinese officials.
54:16I said, you know, we and you made a terrible mistake.
54:19Maybe we made a bigger mistake to let North Korea get nuclear weapons.
54:24but what we should have said to you is, hey, we have an idea.
54:29Nuclear weapons are either good for North Korea and South Korea or they're good for
54:35neither of them. Your choice.
54:38And that would have been hardball.
54:41But I think the idea of having Kim Jong -un have now more than 100
54:50nuclear warheads and missiles that can reach the American homeland is crazy.
54:56I mean, here we're talking about Iran and what it might be.
55:01Excuse me. It takes 20 minutes longer from Korea to get to Boston than from
55:09Iran, or maybe 25 minutes.
55:12So I think that that's a useful perspective to remind us that we let this
55:18thing happen. It's a ticking bomb as far as I'm concerned.
55:23If you ask me what to do about it, that makes me cry because Trump
55:29in the first administration focused on this problem very, very seriously and did everything that
55:36he thought he could. And I thought it was a good effort, even though it
55:40was not successful. But the 20 other ways we've tried to deal with that problem
55:45were equally unsuccessful. How does China feel about nuclear proliferation and North Korea having these
55:52bombs? Well, I think they feel a little ashamed, at least, about what happened in
55:57North Korea and kind of think, well, that wasn't really our problem.
56:01But now, when you say, well, if this keeps, if things on the current path,
56:07well, maybe South Korea or Japan will have nuclear arsenal in their backyard, they think
56:12that's a terrible idea. And we would be not very enthusiastic about a Venezuelan or
56:17Canadian nuclear bomb, yeah. So, Dr.
56:20Allison, just to kind of wrap our tour of the world here, come back to
56:25the United States. Since we last spoke, there have been a number of mayors elected
56:31in this country that are self -declared socialists or democratic socialists of America, PSA.
56:37And there's a rising populist movement in the United States that seems to be manifesting,
56:42in many cases, candidates that look and act like true, deep socialists and want to
56:49enact socialist policies. What is the risk to the United States if this continues to
56:56go the way it's going?
56:58And what is the risk to the United States, do you think, in 2028, if
57:03we have a Democrat -controlled House and Senate and a very populist Democrat candidate that
57:09looks like a DSA member?
57:10Where does this take us?
57:12Well, again, good for you all for thinking of uncomfortable, radical questions, but real.
57:20So, if you look at the numbers, I've been looking at them lately.
57:26They're hard to believe in terms of the split between wealthy and poor or rich
57:33and poor. If you look at who's benefited for the last generation in terms of
57:40the 0 .01%, the 1%, the 10%, the 20%, that's us and all the people
57:47that we know virtually. And therefore, when we say the market is, you know, third
57:51year in a bull market, and my goodness, here it's up 15 % or 16
57:59% or this 80 % or 70 % of people, this is not part of
58:03their lives. And when I look at the numbers about both what I think the
58:08facts are, and then even more people's perception, it's just not steady.
58:15In a democracy, if everybody gets a vote, and if the top 10 or 20
58:22percent are taking 80 percent or 70 percent of the pie, that's not stable and
58:29sustainable, I think. And it's a political invitation for a populist and demagogic, I mean,
58:39you don't even have to be a demagogue to say that's not fair, that's not
58:43reasonable. So I think that it's not, I mean, this is beyond my, I can
58:50hardly deal with the problems I focus on.
58:53This one is one that I look over my shoulder and think, gee, wait a
58:56minute, first this can't be true, but then whenever I've been looking into the numbers
59:01lately, they look as bad as they appear, and then this is extremely dangerous, and
59:08I would say yes. And so I haven't heard people talking about plausible ways in
59:17which this could be addressed, but I think it's an invitation for some more radical
59:28ideas. And so while I like very much the Trump accounts for kids to give
59:36them some stake, I think that's a fantastic thing.
59:40I could probably be persuaded that people, even at my level of income, should pay
59:49another 10 percent of taxes or whatever for some more adjustment.
59:57I think the kind of adjustments that are basically putting people on the dole or
1:00:04support for non -productive or semi -productive activity makes me very uncomfortable.
1:00:14I mean, unless they're lame or, you know, ill or aging.
1:00:18Or referring to UBI proposals, people getting a universal basic income, that takes motivation.
1:00:23It makes me less, I like incentive.
1:00:25I mean, I think that the stuff of America has been the opportunity for people
1:00:29to be incentivized to invent, create, and create wealth that's benefits for everybody.
1:00:37But if the jam is not getting spread to 70 percent of the people, that's
1:00:44not a sustainable political situation.
1:00:47And I think, I mean, I thought in the New York campaign, we got to
1:00:52see some preview of a bit of this.
1:00:55And in the primaries, you're seeing people going into this space.
1:01:00I haven't seen anybody with a coherent program yet, but I think for serious people
1:01:07thinking about what's good for the country, it's a good one to worry about.
1:01:12Well, it does seem, Freberg, that there's a couple of proposals here.
1:01:16Minimum wage, maybe some type of a wealth tax.
1:01:18There are things that people are talking about.
1:01:21We may not all agree with them, and they may be hard to execute.
1:01:24But one of them is for the people at the top, I think you would
1:01:26agree, Professor Allison. The people at the top have the most to lose here, and
1:01:32they should be thinking about it.
1:01:34And maybe there's generosity and, you know, maybe giving away wealth in a more thoughtful
1:01:39way, because there's so much wealth in this top 1 percent, 10 percent that they
1:01:44can't possibly spend. And so this might be something that that group of people should
1:01:49be thinking a little bit more about.
1:01:50In the State of the Union, Trump called out.
1:01:53you know, Dell and a couple of other people for having stepped up and say,
1:01:58okay, I'm, you know, I'm all in on this.
1:02:00I would say there's something quite, you know, that certainly got my attention and made
1:02:06me think maybe I should be doing something different.
1:02:08Yeah. Yeah. Right. Well, Professor Allison, you know, they say that you can measure a
1:02:14man's knowledge and thoughtfulness by his humility.
1:02:18I will say you have extraordinary depth and you've thought so deeply about so many
1:02:22of these issues that this world is facing right now.
1:02:26And yet you act with such humility and grace when you speak about them.
1:02:30I want to thank you for that.
1:02:31I want to thank you for taking the time to be with us today.
1:02:33Really appreciate it and look forward to doing it again in person soon.
1:02:37Yeah. Thank you so much on behalf of the audience and just on a personal
1:02:40basis. This is such a delight and privilege to be able to do this with
1:02:44you every year or two.
1:02:45And Ben, I hope we can just do it every year because it's the highlight
1:02:48of my year when we get to talk.
1:02:49Excuse me. It's an honor for me.
1:02:51Thank you so much. And thank you for what y 'all are doing.
1:02:54And thanks for thinking of such hard questions.
1:02:58Take me home tonight to think about socialism.
1:03:00Yes. Yeah. Okay. Thank you, sir.
1:03:03Thank you. I'm going all in.
1:03:19I'm going all in.