A New Type Of Civilization
Industrial Civilization Rising - With China As An Entirely New Model
In a previous article, I explained that you can understand the root cause of the Great Power conflicts, and how they play out, by distinguishing the Land Powers vs the Sea Powers:
You can read the full analysis in the link above, but as a quick reminder, this is how it can be synthesized:
Considering the current conflict with Russia is an ultra-archetypal land vs sea conflict, this is highly relevant:
The autocratic & hierarchical Russia, preferred infantry and mass artillery to fight trench warfare to control people closely related ethnically
Fighting the democratic trade hegemon of the West relying heavily on mercenaries & proxy forces, and leveraging financial sanctions, and high-tech solutions to subdue its perceived enemies.
An Old Idea Becoming Outdated
This framework of the sea (thalassocracy) versus land (tellurocracy) is a centuries-old framework that has proven to be very useful.
But these archetypes are all as ancient as at least the Roman Empire and Carthage.
And I am convinced that a new model is slowly emerging which differs from both land and sea power, due to the growing importance of innovation, infrastructure, and industry.
One that has been aborted several times in the 20th century, but is now coming to fruition in China.
While quite intellectual, the idea discussed in this article will have extremely useful applications for investors who want to predict the Chinese (and the world’s) economy in the coming decades.
And accurate predictions cannot rely on outdated models.
Industrial Powers Geopolitics
Land/Tellurocratic societies offer a lot of meaning, identity, and cohesion. They are also remarkably sturdy and excellent at monumental buildings and “civilizing” hard lands. But they tend to be less free, less flexible, and often less prosperous.
Sea/Thallasocratic societies are more meritocratic, prosperous, and innovative. They are also more divided and offer little meaning to life beyond the accumulation of money and social status.
A good tellurocracy offers stability and meaning to its citizens and will build a cultural legacy lasting millennia (Rome). A bad one is a 1984-like Orwellian nightmare (the Soviet Union or Maoist China).
A good thallasocracy is innovative, rich, and free (think post-war America). A bad one is an oligarchic decadent nightmare straight out of Brave New World by Huxley.
Both paradigms operate with a few common assumptions that were un-discussed in the pre-industrial world:
Wealth is mostly stable over time, and a zero-sum game between powerful nations.
Wealth either comes from land (to be conquered) or trade (extracting wealth from the land owners and other nations)
Societies are relatively unchanging, and so are the economic models of nations.
The wealth of a region is mostly stable and caused by a mix of stable cultural traits and geographical features (navigable rivers, natural resources, climate, etc.).
Of course, these assumptions have gotten increasingly shaky since the onset of the industrial revolution.
Wealth is now much more a factor of education, innovation, and the rule of law. The scale of production and specialization become other key factors, much more than in the pre-industrial economies.
This means that a country can now become wealthy or even a great power despite missing key features like a friendly climate or a large population.
With the rise of industrial warfare, the key feature to being a great power is not anymore how many men you can conscript, nor how many vassal states are part of your trade network.
Instead, how many tons of steel per day you produce, how many barrels of oil you refine, and how many tons of explosives can be put into shells become the king makers.
The geopolitics of industrial powers do not have to be the same as pre-industrial societies.
The Repeated Abortion Of Paragocracy
As both nomenclatures for sea and land power use Greek (telluro=land, thalasso=sea), I will keep this system to describe what is in my opinion a new emerging model.
I named it paragocracy, from the Greek “paragogí” which apparently stands for industry/manufacturing (if any Greek speaker has a better option, please tell me, languages are not my strongest skill).
There have been several industrial powers emerging since the mid-19th century already. But CULTURALLY, they have all stuck so far to the pre-established patterns of land or sea-based power.
The UK was definitely a massive industrial power, but kept focusing its geopolitical attention on a vast network of vassalized nations and a trading empire “on which the sun never set”.
The Soviet Union was definitely an industrial powerhouse but stuck to the previous pattern of tellurocracies: focus on autarky, authoritarian leadership, and strong ideological control.
The USA is a more interesting case, as it is a country that started as a land power and acted as such: isolationist, expansionist through constant land wars of conquest against its neighbors, highly religious, etc. Its foundational model was Rome and it showed.
However, through a combination of English cultural heritage, historical accidents, and conscious decisions by an elite more interested in the sea-based English oligarchic civilization, it slowly changed.
It is today an archetypal thalassocracy, ruling over a vast trade/monetary empire of tributaries, vassals, and allies, with a focus on crushing or breaking apart all potential rising land-based empires (Germany twice, the Soviet Union, China, etc.).
To this day, the US is still a land torn apart between these 2 civilizational directions, today manifested by the Heartland fly-over-country Trumpers tellurocrates versus the coastal and urban Democrats thallasocrates.
The Rise Of Chinese Paragocracy
It is maybe logical that a new model for the industrial and scientific age would emerge from out of Western civilization.
China is a nation that has an extremely long history, but also a model that utterly failed by the 1900s. What is still remembered in China as the “century of humiliation” caused a complete breakdown of the ancient Chinese civilization model.
And a rebirth from these ashes.
It was a different model than the sea-based trade focus and the land-based military-religious focus. Instead, for millennia, China has been highly dependent on a bureaucratic meritocratic system to organize its society, with the foundational ideas of Legalism, Confucianism, and Chinese Buddhism.
I described in a previous article a year ago the new Chinese economic model. In many ways, this article is a systematization and expansion of the observations I did back then.
To resume it briefly, I argue that China was none of what it is usually described by clueless Western commentators.
Instead, its pillars are:
A Millennia-Old Culture: providing not only the 3 main influences mentioned above but countless other complex philosophies like the Hundred Schools of Thought. Or Taoism.
Decentralization: most is decide at the region level, to the point that the Chinese Communist Party sometime struggle to get its policy implemented.
Meritocracy: Officials go up in rank only after having achieved good results in small scale posting, like a town, a state-run company or a region.
But none of these pillars are sufficient to understand the direction the Chinese economy is taking.
For this, the framework of Paragocracy I am establishing is needed.
Paragocracy 101
At the core of every society are the key collective values and goals.
Tellurocracies highly value a sense of identity and safety. For this they leverage religion, military power, demography, and social control.
Thalassocracies highly value individual freedom and wealth. For this they leverage trade, finance, ideology, and informal networks.
Paragocracies highly value production and science for their own sake. It is a society obsessed with material progress and mass production, in contrast to tellurcracies’ obsession with stability/safety and thalassocracies’ obsession with social/ideological progress.
This also reflects in which social class ends up dominating their respective civilization.
If land power archetypal leaders are a military man, a priest or farmer and sea power’s a trader, politician, or an academic thinker, industrial powers’ leaders are engineers and builders.
It is not an accident that almost all the CCP top leaders are chemists, rocket scientists and other technical profiles, instead of the usual generals, intelligence, lawyers & bankers.
I think such a society was somewhat emerging in Germany pre-WW1, but got instead taken over by the Prussian military aristocratic class, and further destroyed in the economic disaster of the Weimar republic.
The Positive Sides of Paragocracy
The obvious positive aspect of such a system is that it can accomplish A LOT.
It avoids both the stagnant conservatism of farmers/soldiers/priests and the parasitic/self-destructive tendencies of the merchant & intellectual classes.
Looking back at China, it is clear that it is currently a society obsessed with production.
And it gets things done like no other.
28.4% of global manufacturing output is Chinese.
Its high-speed railroad network of 45,000 kilometres is 2/3 of the world’s TOTAL.
It produces:
54% of the world’s steel production.
51% of cement.
77% of batteries.
80% of solar panels.
largest car exporter since 2022.
etc.
And soon the country is already or looking to become the leader in semiconductors, nuclear power (4th generation, thorium), robotics, automation, space technology, EVs, supraconductors, AI, quantum computing, etc.
Considering the millions of engineers and scientists the country trains every year, this is actually a realistic goal. Especially with the bulk of the “Global South” ready to absorb this production by ditching more costly Western alternatives.
(see for example what is quickly happening in the car industry and BYD’s expansion in SE-Asia and South America)
By focusing on production, this is also a society that is progress oriented, but with a focus on material conditions instead of increasingly weird social progress ideology of thalassocracies.
But it is also more optimistic and potentially more pacifist than the militaristic and religious tellurocracies.
I also truly believe such society is incredibly good at scientific advancement. Simply because once in position of power, engineer-types tend to favor big projects, fancy engineering and interesting technical concepts.
Imagine instead trying to convince a religious person or a banker to finance a space station, a particle accelerator or a nuclear power plant.
The Negative Sides of Paragocracy
Social Imbalances
One problem of the obsession with production is that it can quickly become something for its own sake.
This results in borderline inhumane work conditions, with a good example being the dreadful 996 work culture in coastal China (9am to 9pm, 6 days a week).
It also results in terrible social pressure to “succeed”, with long hours of study for children and students causing poor social skills and mental health problems.
Working all the time, social isolation, an ultra-competitive society, cause a plumetting demography.
IF this problem can be solved will be a key part of deciding if paragocracy is a viable civilizational model. The jury is still out here.
Ecological damages
Another problem is that rising production for its own sake comes at a price. You can only have so many megaprojects and mass manufacturing before pollution catches up with you.
This is something that was becoming a serious problem for China 10 years ago.
I think it is solvable however, as the same systemic engineering thinking can be applied to ecosystem restauration.
Last year, I also predicted that a millenia-old philosophy, Taoism, would be needed to balance out the other current pillar of Chinese civilizational model.
The focus of Taoism is on the individual within the natural realm, rather than the individual within society. Accordingly, the goal of life for each individual is seeking to adjust oneself and adapting to the rhythm of nature (and the Fundamental) world, to follow the Way (tao) of the universe, and to live in harmony.
In many ways the opposite of Confucian morality, Taoism was for many of its adherents a complement to their ordered daily lives. A scholar serving as an official could usually follow Confucian teachings, but in retirement might seek harmony with nature as a Taoist recluse. Politically, Taoism advocates for rule through inaction, and avoiding excessive interference.
This concept is now being kicked in high gears under the label of “ecological civilization“.
The concept is described in further details in this interesting paper titled “Ecological Civilization in the making: the ‘construction’ of China’s climate-forestry nexus“.
Overall, this is starting to paying off, with China leading in reforestation, restauration of wetlands and having radically improved its air quality in just a decade.
Excess Production?
The last question standing before considering paragocracy a successful system is the debate around “excess production capacity”.
Be ready to hear A LOT about it in the next 10 years.
Especially as China will “flood markets with its excess capacity” according to the US press, for example in some headlines just in March 2024:
Washigton Post: Flood of Chinese imports could renew trade tensions, threaten U.S. jobs
CNN:A glut of cheap Chinese goods is flooding the world and stoking trade tensions
U.S. nervous about 'flood' of older-generation chips from China
China flooding foreign markets with cheap goods is ‘a situation structurally primed for war’
The last one included a quote from warmonger Elbridge Colby, that is rather worrying about the US’ mindset:
“Why? China has vast overcapacity it must export,” Mr Colby, founder of The Marathon Initiative think tank, wrote on X. “Now countries don’t want to import so much from it. Where will it export to? It needs markets. Markets can be gained by force.”
“Excess production” is absurd!
This is a pet peeve of mine that stem from a complete inability of Keynesians to understand how the economy works.
What matters to grow an economy is production, not consumption. If you produce something useful at least.
The same way that “deflationary spiral” is a dishonest concept we are yet to see in action in real life (and no, the Great Depression does not count, but this a topic large enough for a full article).
Contrary to the opinions pushed by mainstream economists, it is hard to find such a thing as “excess savings”, something the Chinese population is often accused of.
These savings are going to be used in the future. Likely when people retire (like Chinese women at only 55 years os age) or for their children. I doubt there are many people wanting to save money until the end of times, with their descendants doing the same, like dragons on a pile of gold.
Human nature is such that their is no limit to demand. The history of the last century is that if you give people enough money and productivity, and they will want more.
More housing space, more cars, more plane travel, more luxury bags, more powerful gaming computers, more meat, MORE!
In addition, such “excess saving” can be called under another name: capital.
We are at the point where most capitalist nations despise the steady and cautious accumulation of capital, preferring mounting piles of debt instead.
Are we really that far in cultural decline that we believe spending less is bad, and that making more things at a cheaper price is bad as well?
You can read the response to the “dumping shock” discussion published in Chinese media here: “China’s economy creates development opportunities, not ‘dumping shock,’ to world”.
Ressource Limitations
One hard limit that paragocracy could struggle with is ressource limitation.
Energy is not that hard a limit, as we master nuclear power and have enough thorium & uranium for tens of thousands of years, if not millions of years. Space-based solar or geothermal could be another option for a en even longer-lasting supply of energy.
Metals are a bigger limit as well as other natural ressources. At some point, all these cars and high-speed trains need more iron, copper, etc.
One way for a production-obsessed society to deal with it is to become more efficient. Produce more, but with less. This is a solid direction for R&D efforts.
Expansion At All Costs?
Another obvious venue for directing the “excess production” (authors in the 19th century would have called it vitality) is expansion.
Historically, such expansion driven by excess vitality of a young or rejuvenated nation have been directed in 2 direction:
conquest
settling wilderness.
And this is certainly a potential dark side of the paragocracy, which was expressed in an extreme form in the first prototype of this civilizational model, early 20th century Germany.
Constrained by its geographical limits, the newly unified German empire looked to use it industrial might to acquire its own colonial empire (WW1) and then Lebensraum (”living space”), both at the detriment of other nations and people.
When the target is unlimited production from unlimited resources, unlimited and amoral expansion can be a logical conclusion.
It did not go well for anybody involved…
Looking Up
Luckily, we are not anymore in 1900 and limited to the confinement of Earth.
I think in the long term, the passion for mega projects and “MORE!!” of the paragocracy can be directed toward an expansion outward into space.
This also answers the dilemma at the core of such a philosophy. If the goal is not conquest, wealth concentration, comfort or religion, but just MAKING MORE, why doing it past a certain point?
I imagine that turning desolate rocks or empty voids into verdant worlds, brand new “ecological civilizations“ forever expanding in an Universe that is infinite for all practical purposes (just our galaxy is 400 BILLION stars) could be the answer.
And it would give meaning to industrial societies increasingly struggling with finding a reasons to keep going, individually and collectively.
(on a somewhat related note, I will probably give a speech next summer about the potential future Martian economy, and will share it with my readers later on)