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Leadership for the long strategic end game

January 17, 2011

I’ve been asked about my thinking around the PRC emergence and potential domination of the world economy moving forward.

It brought up an interesting comparison. “Guns Germs and Steel” talks about how the Han dynasty successfully pushed all other tribes to the side within China and then the long term impact of that outcome.

The good: the Chinese were able to implement many internal innovations. They were fairly homogenous in worldview and goals. Even today an article pointed out

With China’s new prominence in global affairs, the Han race, which constitutes 90 percent of the Chinese population, is suddenly the most dominant cohesive ethnic group in the world — and it is seeking to remain that way through strategic alliances, aggressive trade policy, and attacks on racial minorities within the country’s boundaries. ….

The country’s re-emergence as a great world power expresses the cultural ascendency not so much of Marxism or Maoism but of the Han race, which in only a few decades could control the world’s largest economy.

This represents a major shift in the identity of the Chinese tribe, a combination of political and economic power with a very homogeneous worldview. The best way to explain China’s economic and foreign policy  is most accurately seen as a tribal expression of what Friedrich Nietzsche called a “will to power.” 

I’ve always said that the Chinese were for the Chinese – communism was simply a 50-100 year blip on the roadmap to world pre-eminence, a means to the end, not the end itself. If capitalism works better in the end, they’ll stop the communist pretense.

This brings an interesting point about strategic change within a large enterprise or nation forward. Some companies manage to make a major turn in strategy because they are desperate – like IBM in the 1990’s.

 My hypothesis is that other companies (or nations) who make a major successful turn in strategy without being in despearate straights manage to do so because of the presence of a strong, authoritarian, visionary leader who unifies the corporate “will to power” in a manner similar to the Chinese Qin dynasty or the Han tribe itself. Examples

  • Qualcomm: the Jacobs family – from mobile trucking & an email app to a mobile power broker
  • Intel in the 1980’s: Andy Grove – from a small semiconductor company, one of many licenses to a $40B company
  • Apple: Steve Jobs – from a garage shop to pre-eminance to near disaster to overcoming “insurmountable barriers” in bringing seamless uses for new computing devices to market
  • Microsoft: Bill Gates – from DOS to the browser wars

There are sure to be examples to prove me wrong here – but when things are still working well, without that strong authoritarian hand necessitating change, it’s very easy to fight taking the preventitive medicine instead of the cure-that-might-kill-you-medicine when the situation is dire.

4 Comments leave one →
  1. January 18, 2011 8:13 am

    Communism works well for China, especially in terms of leadership. You can have an emperor and not necessarily have to follow the genetics all the way to the anomoly.

    I wonder what an emperor in a future capitalist China looks like, other than one that gets to set exchange rates for the world…?

  2. January 17, 2011 4:37 pm

    China’s odd mix of totalitarian government and tolerated capitalism (without the transparency) is backed by their huge population. For China to exceed the US’s GDP means that the average Chinese person’s share would be one-fourth of the average American’s share.

    But China balances a gargantuan market with the sort of arbitrary confiscation of businesses and assets that would be more at home in a tribal fiefdom. Even so, the number of companies willing to take the risk and keep pulling the trigger on this Chinese roulette is large.

    China has only half of the rate of men-at-arms (excuse the expression) as the US — but it still means that their military is over twice the size of the American one. And sheer size is no longer the basis for contest; it’s the willingness to use it. As you’ve pointed out on this blog recently, China’s leadership here has no qualms, only pragmatic restraint until the right time.

    I would guess that the phrase “Imperial China” will once again be prominent in the coming decade or so. It’s a pity, as the Chinese people individually are quite impressive and valuable partners — but they have vanishingly little say in their country’s decisions.

    ===|==============/ Level Head

    • Lynn Comp permalink*
      January 18, 2011 12:54 pm

      Interesting point. Neither the peasants in Russia or China ever had an opportunity to ‘have their say’ in reality. They are a much more homogenous population as well – the full article talks about how the EU tried to pretend that Europe was united. The reality is that for thousands and thousands of years Europe has been different tribes either fighting or uniting. While the ‘enlightenment’ thinkers attempt to enforce a global utopian view on everyone (their global view I might add), the resistance is mounting – most cultures identify with their group. We see it in Russia, we see it in China, we see it frankly in much of the Islamic – Western civilization tensions. People are tribal – a unified currency doesn’t take the humanity out of the human.

      • January 18, 2011 1:13 pm

        With a totalitarian government in power, the 1+ billion Han Chinese may as well be a minority.

        And the views of those in control are the ones we deal with. Certainly the Han heritage there counts for something, but their philosophy will be driven more by the management of power than the memories of a neighborhood in Chengdu where they grew up.

        Income inequality is often an indicator of overall prosperity, oddly enough — but in China the disparities are strange indeed. In the rich cities, you have women buying US$2,500 dresses to wear once, and shops that cater to such appetites. In the deep country are farmers who have not seen that amount of money pass through their hands in a lifetime.

        I think that the Han culture will be an issue, but filtered through the worldview of new power as much as old. And the proud-but-mostly-powerless population will not likely have much say for a while.

        One hope, perhaps, is that the rise of the merchants and capitalists in China might create a modern take on the Hanseatic changes, and change the balance of power in favor of, ultimately, a constitutional republic. But that is a distant hope, I think.

        ===|===========/ Level Head

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