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Paul Jay
Hang on a sec. Say it again in a little easier way to get.
Mark Blyth
For the past 30 years, American firms have been globalizing, integrating U.S. and global supply chains, moving stuff to China. But how do you really make money is through the protection of their intellectual property rights? Think about Apple suing Samsung all the time. Think about the fact that when Apple sees a competitor, Google sees a competitor and buys it. It doesn't like the competition. This gives them huge profit margins and also means they control most of the value in these big global supply chains.
And the way you protect this is with legal protections. Now, at the end of the day, China wants to develop. China wants to be rich. China basically doesn't really care that much about those legal protections and goes out of its way to either buy tech, acquire tech, steal tech, spy on tech, paints concerns at universities in the United States about PRC of Chinese army representatives and labs, and so on and so forth. So not all of this is hysteria.
There is a direct threat to the American business model, which is heavily dependent upon global supply chains and the protection of intellectual property rights. This spells through to American capitalism were at large because the reason you want to buy American stocks is because American stock markets grow faster than everyone else. Why? Because they have the companies that have these intellectual property rights that make the outsized profits. China is a direct threat to that. So. there is conflict built into the system.
In terms of cooperation, China will cooperate with the E.U. If the United States continues to fractionalized politically. And now just basically as a kind of damage quasi autocracy that refuses to accept basic science on climate change, the world has already moved on, in many ways. There will be exactly those types of state-backed investments and very large scale projects that will take place in China on the E.U. and possibly between and across them. And they will be the ones that reap the returns on those new assets and those new inventions and those new intellectual property rights that everyone needs to deal with the already big scientific effects of global warming.
One example of how to think about this inclosing again, going back to these little finance talks, I would go from time to time. I would always say to financial audiences; I don't understand why you folks don't invest everything in green tech. And I would get these answers; about we don't know, it's incomplete, the government is exposing us to the risk, its too big, etc.. And I would say that you don't understand, this is what bankers call a free option. And this is the one contract that you want. And here's how it works. If you don't invest and it doesn't work, you still die. If you invest half of what you've got wisely and one thing works, and that helps, you're going to make more money than God. If everybody collectively thinks the same way, then we might just get out of this mess. But if you only look after your own interest, you are guaranteeing your own extinction. And again, it's that collective action problem at the base of capitalism.
What's rational for any one firm to do or one company to do, it's oftentimes collectively disastrous. And that's what's going on.
Paul Jay
Well, that's a pretty good place to end, unless you want to add something, Rana?
Rana Faroohar
No, I think that's perfect.
Mark Blyth
Do we have anything good to say? And can be like, can we go come on is there any light at the end of the tunnel?
Paul Jay
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