War Without Rules ft. General Robert Spalding

[00:00:07] Robert

Okay, I’m going to go fight the Chinese Communist Party, which I kind of did with my books. In the information space, I’m trying to offer an apology for the world that we find ourselves in now. I’m proselytizing the democratic way of life and how I think we need to preserve it. It’s a difficult thing to do. But I also think that it’s very rewarding.

I am surrounded by people that believe in the same thing that I do, and I think it’s going to make a difference over time. If it’s not us, if it’s not SEMPRE, it’ll be another company that recognizes all of these truths that we have found over the last six years in trying to disrupt a very isolated industry.

[00:00:53] Intro

Imagine spending an hour with the world’s greatest traders. Imagine learning from their experiences, their successes and their failures. Imagine no more. Welcome to Top Traders Unplugged, the place where you can learn from the best hedge fund managers in the world so you can take your manager due diligence or investment career to the next level.

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Here’s your host, veteran hedge fund manager, Niels Kaastrup-Larsen.

[00:01:49] Niels

Our guest today has written one of the most interesting books I have read in a long time that essentially gives us a firsthand look into how the Chinese, for more than two decades, have had a playbook in place in terms of how they aim to dominate the world. This is truly fascinating and far more widespread than you can imagine. So please enjoy our conversation with Rob Spalding, Brigadier General, United States Air Force, Retired.

General Rob Spalding, welcome, and thank you so much for joining Cem and I for what I’m sure will be an eye-opening conversation as part of our Global Macro series. It’s really great to meet you. How are you doing?

[00:02:27] Robert

Great. It’s a wonderful day.

[00:02:30] Niels

Good stuff. Now, a lot of our focus today will be based on your book called “War Without Rules”, a book that I would encourage all of our listeners to read. But I want to start out by talking about another book that you came across back in 1999. What were you doing back then and why did this book attract your attention?

[00:02:53] Robert

Well, back then, I was flying B-2s and I was studying war. That was my profession at the time. I heard about this interesting book and read it. It was kind of dense, it’s still dense. If you pick it up and try to read it, it’s kind of hard to get through. I thought it was a little bit weird quite frankly. There were a lot of people that I think maybe understood the implications of the book a lot sooner than I did. I just really discounted it because it really didn’t fit into my paradigm of what war was or how to think about war.

[00:03:38] Niels

Now, I’m curious, and maybe I should let our audience in on the fact that the book we’re talking about is called “Unrestricted Warfare”. I’m curious how the book influenced your career path from there and what you did after you stopped flying the B-2 stealth bomber, which I think most of us visually know as a wing-shaped plane. Just give us and our listeners a little bit of context for our conversation. Also, I’m kind of curious what perhaps you learned about yourself from flying these sophisticated airplanes.

[00:04:15] Robert

The book really didn’t influence me until much later on. Like I said, I discounted it almost completely. In the B-2, we had something called the Kosovo War, which you may remember was essentially the Serbians going to war with the Kosovans. President Clinton at the time wanted Milošević to stop and we were the instrument of that political decision.

In fact, General Wesley Clark, who was running the war at the time, really felt that he wanted ground troops to be a part of that war. The B-2 flew every single night of that conflict. Initially, we were taking out ammo dumps and empty barracks and really setting the conditions for inserting ground troops. I think about 30 days or 45 days into it, I think it a was total of 75 days into the conflict, Clark had a briefing at the White House, and he said, hey, I think we need to put ground troops in, and President Clinton said, no, we’re just going to do it with air power. So then the war changed.

I know the day it changed because I was coming in for a mission planning effort. I was on the night shift, and I come in and we’ve got a new set of targets that were unlike anything that we had received before. And I said, oh, this is going to change things. It was things like Milošević dacha, various things that you could tell what we were going after was going to mean something to the elites in Serbia.

So soon thereafter, the war was over, and of course, Milošević had gone to the International Court in Hague. So I think one of the big things I learned, when I got to Whiteman, was that my concept of war was decidedly shaped by the aircraft I had come from, which was the B-52. It was, how do you survive from IP, initial point to target, and strike the target and get home? Of course, I always thought about why are we striking this target, what is the importance, what are we trying to achieve?

When I went to the B-2, it was much more an aircraft that was designed to be completely unobserved. You worked really hard in mission planning to make sure that was a case. It required that you thought differently about warfare. So flying the B-2 shaped the way I thought about how you conducted a war and really changed my perception of what was achievable using airpower.

Of course, really, I think, the coming of age of that technology was the Kosovo War. It was the one where Serbia had, from day one all the way up to the end of the war, a pretty sophisticated integrated air defense system. We didn’t really take it out. Of course, it didn’t stop us from what we were doing, but it just showed the limits of that capability in terms of stopping airpower, and then of course what you could do with airpower in terms of convincing a sovereign nation to stop doing something that the international order, or at least the ones that the United States had assembled, had decided that it shouldn’t do.

When I think about war, I often think about the Kosovo War as being one that encapsulates the way the West thinks about warfare. There’s a political problem, they use the military, and there’s a political outcome that’s favorable to the victor. I think it was in this context reading “Unrestricted Warfare” just did not make any sense to me.

[00:08:32] Niels

Yeah. It’s interesting you mentioned the Kosovo War. I certainly remember it. I’m old enough for that. But also at a time now where of course we have war again here in Europe. Now, before we get into some of the concerns that you write about, perhaps I should make something clear, at least what I got from the book. You can correct me if I’m wrong here, but I got the impression that your criticism is not really pointed at the Chinese people, but it’s specifically pointed at the leadership and the CCP. Is that correctly understood?

[00:09:06] Robert

Well, I would say partially. I would also say that the criticism is towards the West, not just the United States. Just from a professional perspective, how is it that we can only have one concept of warfare? It can almost be what’s the caricature of what warfare is? Because when you look at that book, and when you look at what I was trying to say, it was war is a political act, and in many respects, we in the West have made war all about just war from the application of force, but not what are we trying to get out of it?

I think in that respect, I think we’ve gone far astray from really understanding, in the same way that the Chinese Communist Party does in the People’s Liberation Army, the use of warfare and when it’s appropriate and when it’s not appropriate. I think we see examples of that all the time. But the criticism was not just towards the Chinese Communist Party and the People’s Liberation Army. It was also to the west for not really recognizing a completely different way to conceptualize warfare in the context of a modern, connected global world.

[00:10:34] Niels

Absolutely. You’re absolutely right. I appreciate you pointing that out. Now, you write in the introduction (just to set the scene for our audience), you write in the introduction of your book about “Unrestricted warfare”. You say it is the single most important book for understanding the China of today. You also write, “The only rule in unrestricted warfare is that there are no rules.” That certainly becomes evident when you read it.

There are so many places we could start, but I’d like to start out with an area that I think was maybe very much underrated back then because it was published many years ago. I don’t know if it was 1999. I think this is when you picked it up. Back then, you would say that yes, the internet had been invented, but technology was not necessarily what you would fear the most, I imagine. Yet when you look back and you look at the world today, maybe that’s actually what has been having the most impact, so to speak.

Could you talk initially about what the two colonels back then, and I’m not going to try to pronounce their surnames, suggested to the Chinese leadership, and how this actually relates to the current debate about TikTok and perhaps other Chinese technology companies?

[00:12:04] Robert

What’s amazing about the book, they wrote it in ’97. It got translated by the CIA in ’99, and that’s when I read it. I think I got on Google for the first time in 1998 or ’99. When you think about the Internet back then, at least for me, I was maybe up to like 56k baud modem. It was not the internet of today. And yet, these guys, the concepts that they were describing, we would not begin to see them until we had iPhones, and then shortly thereafter, Android phones, and then shortly thereafter, 4G networks, and then shortly thereafter, it wasn’t the first dot-com boom and bust. It was kind of like what followed after.

It was really when Steve Jobs introduced the iPhone that I think we really got into the beginnings of the world that they were articulating in the book. The iPhone doesn’t come out until like late 2007. So they were a full decade ahead of the curve just in terms of visualizing where the world was going to go. If you think about it, you had people like Giulio Douhet and Billy Mitchell talking about the airplane long before it became what it became on the battlefield. These guys were visionary.

But I think in order to be visionary in the way that they were visionary about technology, you had to have the perspective that they did of war, which is, to quote Mao, “War is politics with bloodshed. Politics is war without bloodshed.” To the People’s Liberation Army and the Chinese Communist Party, the latter is really where their expertise lies. So I think it shouldn’t be lost on anyone that these two PLA Lieutenant Colonels who were fully versed in political warfare, because that’s what they’re taught, were able to grasp the implications of a fully globalized world where all the controls that had been put on separating economically, financially, academically, the Soviet Union and all its satellites and proxies in various countries like China and the Western world and how all those controls had been basically broken down by the end of the Cold War, and then how this fact and the introduction of the internet was going to transform the ability for political warfare to be as globally effective as the Western way of war, which is using planes and ships and networks and stealth and precision weapons to use force to achieve a political outcome. The idea that politics itself could be globalized in a way that was maybe equally if not more effective than warfare as a means for gaining advantage internationally.

[00:15:37] Niels

As I was preparing for our conversation today, I came across someone. I asked you in an email if you have heard about him. Matt Pottinger, I think his name is. He also worked for one of the, I don’t know what you call it, intelligence services, I guess, or in the White House. I don’t remember his title right now. He’s also, like yourself, someone who speaks Chinese.

What he had picked up was that Xi Jinping had been very specific, in recent times, talking about how they would use short-form video, i.e. TikTok, as part of their tactics to win this global majority. I think initially when the debate about TikTok started, a lot of people thought maybe the danger would be tracking, that they would know where we’re going, etc.

But what he said, and you may obviously have the same opinion, but what is so extremely surprising to me is that the West is essentially letting the whole generation of youth be educated by a platform that is essentially controlled by the CCP. Because what he found, and I just saw that he’s a former US deputy national security adviser, what he had been able to dock out was that in fact, the real controllers of TikTok, not the figurehead that we see, or the editor, is the Communist Party secretary, who had been placed there by Xi Jinping to babysit, and his deputy is actually the deputy of the CCP.

So it’s really surprising that this technology has not really caught enough attention. I think you’ve tried to make people aware of the dangers of these things, but that we’ve been so ignorant to what it’s doing to a whole generation of young people around the world, not just in the West.

[00:17:34] Robert

I just think it’s hard for people to conceptualize, particularly in the United States. Let’s just look at the United States. One of the things that we frequently say is we have two large oceans; two large oceans and two friendly borders. Essentially, it’s a very hard to target. I think what these two PLA Lieutenant Colonels realized is that those two friendly borders and those two great oceans don’t really mean a hill of beans when it comes to globalization and the Internet.

In fact, we’re across the world from each other but we’re here together right now, in real time, with these tools. What they recognize is it would basically shrink the world, and where military forces were required to deal with borders, the internet and globalization could just completely bypass that as a way for implementing sovereignty. Further, social, cultural, political, economic norms within any given society therefore could be under the sway of tools that are meant to basically go across these ports.

When we think about warfare now, we think about, okay, we need to get planes and ships and tanks, and go over there and do something, where in reality, what you have now is a platform, particularly if it’s used correctly, that you can shape the world in the way that you want it to be shaped just through day-to-day activity.

So when the “Unrestricted Warfare” says take things of every day and make them weapons, that’s what they’re talking about. Being able to use the everyday to slowly change the social, political, cultural, and economic norms of a society so that they mirror the conditions that you want to see everywhere.

After World War Two, the United States went to work with its allies and partners. We had the industrial base, Europe had been destroyed. All our Asian allies, their industrial base had been destroyed and we helped to rebuild those. But at the same time, we used that connective tissue to also build civil society around the norms that the United States thought would be most in its interests.

I think what has been effective by the Chinese Communist Party is the ability to take that overarching system that was created and then slowly, within the contours of that system, begin to change the underlying social, cultural and political and economic norms that underpin it, and thereby create a whole different world order that is far more enticing to your average youngster because it’s talking about how democracy or our democratic republic no longer looks after your interests in the way that say a Chinese communist party might look after your interests if you were in China.

So where were we had this very attractive system, now it’s become very unattractive and this other system has become more attractive because it’s meant to protect and promote the interests of the other side, at least how it’s portrayed by platforms like TikTok. So I think you have to give credit to the Chinese Communist Party, not just strategically, but also technologically in that they not only understood the tools but began to adapt them for their brand of warfare. Consequently, you have to basically criticize the West for not waking up to this reality.

[00:21:36] Niels

Before I turn it over to Cem, and I appreciate you Cem for your patience, I just wanted to throw in a few questions here on technology before we turn to another topic.

Rob, people who listen to our conversation today, they might say to themselves, well, hang on, as far as they know, all these platforms were initially invented in Silicon Valley. TikTok is not that old. So is the West not using the same tools maybe in different ways? How do you see it?

Because I think it’s fair to say that, for example, during COVID, there were certain, how should I put it gently, restrictions put on what people could say and not say on the platforms of the West. I don’t know how to phrase it, but it just seems like either we are just the good guys and we’re not doing anything bad with them or we are maybe using them as a tool as well, even though, and I’m fully aware that there is this firewall whereby Western tools may not be able to read the Chinese at least.

[00:22:42] Robert

The other thing that happened while the world was presenting these opportunities for warfare to change, at least in the way that the Chinese Communist Party and the People’s Liberation Army saw as beneficial to their style of warfare, at the same time, those same internal forces were destroying what I would call the decentralized fabric of knowledge in the West. So, where you had local newspapers and editors who were highly opinionated and then would take the media that came from DC or where have you and would filter it through their own perspective, for their own audiences.

All of those news media kind of went away. They went bankrupt, they went broke, they went under, and media became consolidated in a very highly corporatized structure where now you’ve got five major corporations that own most of the media, at least for the United States. So if I was an alien coming to the world and then looking down on the population, and saying, okay, there’s China and there’s the United States, fundamentally, from a messaging and narrative standpoint, I would say, okay, well, the two systems are similar.

In the Chinese system, you have a single party that controls all the media and then that gets distributed locally. That’s how it works. United Front work group basically disseminates all the media and that’s what gets sent out by all the local channels. In the United States, it’s just five major news organizations that are highly corporatized. By the way, they have very large investors in them, companies like BlackRock. But you also have the Chinese Communist Party invested in them, and then they send out their messages to local media, and that’s what gets disseminated.

So when you look at COVID, you’re like, oh, my gosh. This is what was happening. I was sitting back and I’m like, okay, well, we’ve converged. Because we’re global now and because the Chinese Communist Party is plugged into this corporate media system, basically, we’ve got one system, and those narratives are pervasive in the Chinese system and our system.

You have to realize, not only did these technologies and globalization make it very simple for the Chinese Communist Party and the People’s Liberation Army to really use this as a method of war, at the same time, all the things that might have basically made the West a hard target. Decentralized media, this idea that we were, in terms of media, very libertarian in ideals.

In fact, the concept of the Fourth Estate where the media will attack the government relentlessly, trying to get out what are you hiding from us, and there’s constant mistrust of the government. That was the whole idea behind the Fourth Estate. That would completely disappear, be replaced by this corporate system that is by the way very plugged into Washington, DC and our political system, because quite frankly, the corporate and financial systems influence the political system.

So now you’ve got those basically tied at the hip, and then you have this new whole technological system where all these large tech companies represent 25% of the S&P 500 and are the most powerful companies in the world. Like I said, from an alien looking down, the two systems are the same. In many ways, the West created a media system that actually helped the Chinese Communist Party do their job.

You can’t even really rely on the media for anything resembling the truth because they can’t do it anymore. Now it’s really about propaganda, 24/7 propaganda. The only way that you can find to get out from it is to find those sources that are questioning everything.

People make fun of Tucker Carlson because he has these different views on UFOs. But I think the point he’s trying to make is, okay, there’s these things that I accepted as truth because I was being told them, now I must question every single thing I’m told because I don’t know which of these are actually fake and which of them are real. I think that’s the right perspective to have. Even on social media, you have to ceaselessly examine everything that you’re told because it can be literally coming out of left field in terms of who is it supporting and what their motives are for what they’re doing.

So I think it’s a really, really difficult world to navigate. Certainly, if you’re just sitting there taking it all in and you’re not turned on to what’s happening, you basically become one side or the other. You’re just like a fish and you’re following a stream. We use sheep, but it’s more like a fish. You’re just following where the other fish are swimming. There’s no plot, and to me, far more dangerous than the Chinese Communist Party, which hates the idea that an individual can have a point of view that has to be honored by the system because you’ve kind of baked in for the protection of those rights.

You don’t have to hate that. You just have to basically totally disregard the fact that these rights were given to you, bequeathed upon you by virtue of birth, and now you’ve just basically given them up because somebody’s told you, well, COVID is really dangerous, if you listen to us and do what we say, we’ll keep you safe. So I think you’re very right in that we the people have ourselves to blame because we’ve become a bunch of fish and we’re swimming in one stream or the other.

[00:29:23] Niels

It’s incredibly important to hear you talk about this, Rob, because obviously, you have had access to information that none of us probably have had. So I really appreciate that. The three of us talking today are probably all old enough to remember the world before all of this technology. I have to say, it’s very sad to see this evolution and it’s very sad to think about how our kids will have to deal with that. But as promised, I’m going to be quiet now because Cem, you’ve been very patient. Thank you for that.

[00:29:56] Robert

Just one other thing. I would call your attention to the speech made, I can’t remember the guy that made it on Berkeley’s campus, where he said, you’ve got to throw yourself against the gears of the system to make it stop. You look at that speech, in the time that it was given, and you realize that the average Berkeley student basically now is supporting the machine that the Berkeley students back then were saying they needed to be stopped.

It’s so crazy to see just that one campus, how the students have changed from actually questioning their government to, oh, the government is absolutely honest and truthful all the time and I need to do everything they say. It’s just crazy.

[00:30:50] Cem

I don’t think there is a topic that is more important. I really don’t. I love the fact that we’re at 30,000 feet. You said if you were an alien looking down, if you were in a B-2 bomber looking down, this is the big story. I’m going to take it even further back. In 2 million years of human history, autocracy or power, going to the top has always been the way the world. Actually, I think you could say in 4 billion years of animal history. That is the natural state of affairs, unfortunately.

But we had an opportunity, 250 years ago, to create a democracy and an attempt, and this really is an experiment, to give individuals human rights and equality and liberty and all those wonderful words that we now often take for granted. But 250 years is a second in history. This is so fragile, so rare, this experiment we have. We take it for granted. But autocracy; what you see in China, what you see in Russia, what you see all around the world, is actually the natural state of things.

I don’t think it’s the US or the West broadly. This is decay. This is entropy into what is the standard state of things. Our founding fathers here in the US that wrote the Constitution knew that it would take work and that we would need crises to reinvigorate, to maintain the structures, the checks and balances that we have to maintain this actually an artificial system, but incredibly powerful.

So the question is, how do we, the West, compete on a level playing field against autocracy? Autocracy has more efficient decision-making in a world of technology, data centralization, automation, forced mechanization of human capital. It is able to optimise at the top level, at the country level. The truth, in my opinion, is that you can’t compete with those rules. You need to force a protection of human rights, of individual freedoms. Without that, you’re not competing on the same playing field. It’s not level.

Those are ideals that we believe in. If we believe in them, then we need to enforce those rules and play on a level playing field. We’ve allowed China for 40-plus years to compete on an unlevel playing field in many, many ways. I think what we’re beginning to do is stand up and try and enforce those and create a more level playing field.

We have a ton of embedded advantages that are not related to autocracy or democracy. You mentioned the geographic benefits, but there are other benefits of that are pretty clear. We have an upper hand, so we are still able, in my opinion, to preserve the blessings of liberty for ourselves and our posterity. But it’s slipping away. Again, this is much more, as you said, than warfare. It’s politics, it’s policy.

The question is, what other things can we do at this point to reinvigorate the people to make them appreciate democracy? Personally, I think a crisis is good. I think getting to a point where conflict is here as much as I am against war and the destruction, everything that came from it, without World War Two, where would we be? I think there are things that given a continuation down this entropy that we are on, the natural state of things is for democracy to descend into autocracy again.

So I’d love to hear your thoughts on all that. I’d love to hear what we can do as a people to re-instill the blessings of liberty? Are there ways to accomplish the preservation of human rights and freedom and democracy without war at this point?

[00:35:11] Robert

Yeah. So there’s a lot of tools quite frankly that we have stopped using in the West which have allowed this entropy to occur. There are ones that we realized are needed to be unveiled, at certain times in our history, that you talked about. One of them is antitrust. I think we have basically stopped using antitrust as a tool to basically break up the consolidation of economic power. Specifically here, I’m talking about the tech companies, but I also would be talking about media. So that’s one.

I think Matt Stoller’s book “Goliath” really gets to this ebb and flow of consolidation and decentralization. So I think that antitrust is one thing that really comes to mind as something that’s needed to happen. I think alongside of that, we really have to begin to figure out how we promote the decentralization of media in the United States and other democracies because I really think that having a single voice for the media that is highly tied to corporate interest is very, very bad for our democratic republic.

That antitrust I think has to be tightly tied to the technology platforms that are dominating the information space today in the West. I think you need decentralization of information, and you need to get out of this idea where states have total control over the media environment because it’s really bad for promoting those rights that you say we were endowed.

I think first and foremost, it’s just that. There are other things that we’ve done to ourselves. The Patriot Act I think is one huge one. I think we’ve become comfortable with the government having information about the citizens, and I don’t think that’s anything that our founding fathers would ever have agreed with.

There’s also, believe it or not, centralization in our intellectual property. In 2011, we passed something called the America Invents Act. We’ve destroyed the US patent system as a source of value for the United States. It used to be the most valuable patent system in the world. It’s now like on the level of Romania, and that’s because almost 86 or so percent of patents get invalidated by the IPR process, which is basically an administrative court that was created by the 2011 America Invents Act that was basically a ploy by the tech companies to steal technology and not have to pay for it.

So there’s a whole host of things that we did. But ultimately, we have to come to grips with the fact that the internet is a place where warfare takes place. Often, our enemies invoke freedom of speech as a reason for allowing that to take place. That really doesn’t make any sense. Freedom of speech was never meant to enable a foreign power to propagandize the population. It was really meant for allowing dissent within the society to break apart those power structures.

So what am I talking about here? I’m talking about a forced decoupling between the two systems. You cannot have China as a part of the global trading system, the global financial system, the global information system, and not expect that any connection that it has will be used to propagandize and move the population away from supporting the principles and values that uphold our constitutional republic.

So I think repealing some of these things, dusting off antitrust, forced decoupling from China. I think once you start to break apart the power structures that dominate the corporate and financial sector in the United States, then you’re going to start to see healing begin. I think we have to recognize the internet has fundamentally changed the world from when the Founding Fathers conceived the Constitution.

When you take into account the internet and the globalization of information, there is a Bill of Rights. There’s an additional component of it that really talks about digital privacy and sovereignty and how do you preserve that in the technology environment of today. So I really think encryption should be a human right and your ability to control and secure your data and prevent that from being used or touched by anybody.

Anybody that’s involved in going after criminals, of course they wouldn’t agree with that. But yet in reality, the principles of liberty that are embedded in our Constitution are far more powerful and are supposed to be more powerful than any tactic the State might use to solve crime. So I think that our democracy is healthy enough, and our society is healthy enough and strong enough to deal with the fact that the government doesn’t have an ability to rewind your life just so they can catch some criminals.

By the way, they still have the ability to go out and set bugs, get a warrant and tap into your place some kind of recording device near you. That’s still available to them. You need to also give them access to all the digital information that’s out there and collected about you just so if at some point you break the law, they can go back and catch you really easy. That’s China.

So we need to basically repeal a lot of these laws, dust off antitrust, stop getting into America’s business, and then forcibly decouple with China. When we start to do that, you’re going to start to see a whole resurgence in what it means to be American. I think you’re going to tap back into that magic where so many other people from around the world want to be a part of that. I think our republic is strong enough for that.

So, there are a lot of people that would say, oh, my gosh, you’re cats and dogs living together. But that’s what America has been. We’ve been this very decentralized society where the government just didn’t have that much power to go and do things. But still, what people want to do is reach their potential.

Most people, and this is the same whether you’re in China or whether you’re in the United States, most people just want to live their lives. They want to have families. They want to aspire to meet their goals in life, and they want the government to leave them alone in that. The way you do it in China is basically not to challenge the government. Increasingly, in the United States, it’s the same thing.

[00:42:28] Cem

I couldn’t agree more. An incredibly appropriate response. I agree, those are the things that are necessary. Tech magnifies power. It can be a means of control, as we see in China, but it can also be a means of freedom. It can be a means of resting control or making it decentralized. Right now, it is trending, as you’ve stated, towards autocracy, towards control. I think we need to rest that control from the powerful entities that are out there and continue to provide the town square.

I think that’s one of the most essential things that will keep government and autocracy in check. So I think that’s incredibly thoughtful and insightful. I agree. I think antitrust should be one of the biggest focuses going forward. I agree. To more practical matters, if we continue to do what we are starting to now do, which is to hold China increasingly accountable and try and level the playing field. Again, there’s a long way to go here on those things, but we’re at least beginning to do those things.

I think it becomes inevitable at some point that there’s a conflict between the West and China and Russia combined. It seems to be heading in that direction. China obviously has teamed up with Russia to try and limit some of their structural weaknesses, their lack of internal commodities, their access to markets, because they’re constrained in the South China Sea. There are several reasons they need that alliance in a global conflict.

The most natural place that this will occur, and they’ve said as much, is in Taiwan. I know your view is that it’s essentially inevitable as well that China will at some point move on Taiwan. They’ve said as much. I know you haven’t laid out a timeline and you’ve said it could happen any day, but likely in the next five to seven years. I’d love to hear your thoughts more specifically about how that plays out, if you do think it’s going to continue to play out.

You’ve also mentioned that they really just care about the land. I don’t know if I fully agree with that. Obviously, Taiwan’s biggest defense has been that its chip infrastructure is essential to both China and the West. That’s allowed it to exist. The loss of that would be so significant to China that the thought has been that China wouldn’t dare do that. But I would love to hear your thoughts about that and talk a little bit about what you see happening there.

[00:45:26] Robert

There are all kinds of people talking about war, war in Europe and war over Taiwan, and they invoke a lot of the lessons of World War Two. That’s a favorite one I think people like to tie kind of historical analogies to. I think the major problem is nuclear weapons. Nuclear weapons came out at the very end of the war. They were used, sadly, in Hiroshima and Nagasaki, and then the horror of nuclear weapons was laid bare for all to see.

I think in that horror, it galvanized people on the democratic side of politics, and then the authoritarian side of politics said, well, both systems are going to be destroyed if we allow this to go to its natural conclusion, which is where World War Two went. It went to total war. One of the additional things that have happened with the rise of technology in the way it’s risen was also the end of the Cold War.

The end of the Cold War brought forth this new style of warfare that was totally unopposed and totally high-tech, and totally dominated by the United States. I think that contributes to our problem here in that, that fear, that palpable fear that came out of the aftermath of Hiroshima and Nagasaki is gone. Now you have politicians, and I fear there are politicians both in the authoritarian systems and the democratic systems saying, oh, nuclear war, if that’s where we got to go, that’s where we got to go.

That was my profession for 30 years, and I’m like, okay, those weapons are still there. They’re not bad. They’re not Hiroshima and Nagasaki bad. They’re 10 times, 100 times Hiroshima and Nagasaki bad. The fact that you guys are talking about them like they are no problem just indicates that there’s no real thinking going on here. So I think the one thing that nuclear weapons brought to humanity was something that I think was it’s a very, very important concept. That is this idea of something called a Cold War.

Why is it cold? Because we’re not shooting each other. Somehow, we’ve gotten into this idea that we can have a hot war that stays on this side of the nuclear line, just conventional and never strays into the nuclear. Everything we know about war is that it progresses, and it progresses as passions are inflamed. So I still believe that nuclear weapons are absolutely material to the national security landscape. They’re used to basically establish a red line that you articulate very clearly to your adversary that is not to be crossed.

They’re meant for preserving the system in place without having the fear of military force being used to overthrow that system. So it moves war into a completely different area and space, and that’s the area that we’ve been talking about up to now. It’s out of the military. It’s in more of the politics. The Maoist idea of people’s war or politics is war without bloodshed. You don’t go into bloodshed because then you’re talking about the end of the world, the end of civilization, the end of certainly China’s system and Russia’s system and America’s system.

It takes us back to this place where I think is the right place for us to seek out, and that is the Cold War. If we’re in a Cold War, then we can establish that we are already at war with China and Russia and North Korea and Iran. It’s a war of ideas. Right now, it appears that those nations are winning. They’re winning the war of ideas. If it’s a Cold War and it’s a war of ideas, that really lends itself to centralized authorities because they can muster all the resources of the state and use these new tools of globalization and the Internet to begin to fight that war.

That’s what they’ve been doing very effectively. It’s much harder for the West to have to fight that because we don’t have centralized systems. We don’t want them. So you almost have to basically say, okay, we recognize that we can’t go to war because we never want cold to become hot when nuclear weapons are involved. But because, in this type of ideological war with technology and globalization, these systems because they’re centralized have the predominance of power, we have to separate them too so that our population can’t be exposed to that.

So we just have to basically take them out of the question and then let those two systems compete on the basis of social, political, cultural, and economic factors, and then over time, see which of those thrive. I think once we get into that space and we can focus, and this is where I think Eisenhower did such a fantastic job in saying, okay, we’re going to put some red lines out there for these guys, we’re going to separate, and then we’re going to run our race.

We think if we run our race and we run it for longer, that over time, this other system will be proven to be not as effective. That’s what happened. A lot of people credit Reagan for having won the Cold War. Reagan won the Cold War on the basis of a strategy developed and instantiated by President Eisenhower. Eisenhower basically created the strategy that led to the end of the Cold War, but it took 40-something years to happen.

The same thing is going to have to happen now. We’re going to have to separate the two. We’re going to have to establish some clear red lines, both on their side and ours, to say what are we willing to burn the thing up over, and then let the two systems run their races independently.

I think in turn, when it comes to Taiwan, we have to make a decision not just as the United States but as the free world. Do we leave Taiwan to the Chinese, the 23 million people there or do we basically do the same thing that we did during the first Cold War, where we made it very clear that Western Europe was off limits? And then if, in fact, the Soviet Union came through the Fulda gap, they would be burned to the ground. The West may be burned to the ground, but we were not going to allow them to do that. That’s the red line that the West held.

Is there a similar red line in Asia? That’s one of the things. I think that’s the only thing that will deter the Chinese from militarily attacking Taiwan. I do think that the Taiwanese people (by the way, there’s a lot of Americans on their island) deserve that protection. But what it requires is it requires the same kind of conviction in the West that existed during the first Cold War, and that’s the piece that I don’t know exists.

When the first Cold War happened, Churchill was still alive. He came over to America, and he said, hey, we’ve got an Iron Curtain falling across Europe and you guys have to get in the game, and we got in the game. And then Eisenhower I think put together a very good strategy for long-term competition. Ideological war and the way we won that is by not allowing active measures to come to our shores.

I think the same thing can happen, but what we have to determine is, are the Taiwanese people worthy of the same red line we drew in Western Europe during the first Cold War? I think they are. But ultimately, it’s going to be for democratically elected officials to come up with the policies and then have the systems basically make up their mind because, to me, that’s the only thing that’s going to stop Taiwan from falling into China’s hands.

[00:54:28] Cem

Unfortunately, the US, because we are isolated on the other side of the world and people are comfortable, I guess I would say, we have historically not acted at the beginning but acted only when it was essential. Unfortunately, that’s the most likely outcome here. But you could argue that that’s not optimal, that we were forced to deal with a much bigger, worse war in World War Two because of that.

I agree, there needs to be a red line because this will just become harder and worse. You don’t stand up in Crimea, so what happens next? These are the same types of things that will happen, in my opinion, in China. At the end of the day, it’s nice to say we can draw red lines and not go to that unthinkable next step. But unfortunately sometimes, if you draw a red line, what happens when somebody steps over it?

In a world of domination and subjugation, which is the way of the world, unfortunately, when certain entities become what they feel is subjugated, they can do desperate things, and it can lead to desperate outcomes. None of us want to think of the unthinkable, but the world has gone and will continue to in the next 100,000 years. Who knows? We will have unthinkable things continue to happen. That is the way of the world.

So the key is to try and not get there, and to do everything we can to avoid it. But at some point, the competition leads to outcomes and differences of use. So there’s no right answer. The other thing is there are gray lines. We’ve been talking about nuclear, that seems like a clear red line. But what about cyber warfare? What about bio warfare? What about the ability where you can take technology and take a whole country off the grid for years. Those might be worse in terms of life loss than even nuclear.

So, the question is, where are those red lines? I think the next war is going to be… Yes, I agree, we’re already in one. But how hot can a Cold War get? What is hot? What is cold? I think those lines will be very much tested.

[00:57:03] Robert

I think that the Chinese were right in one thing, and that is, in a world that you just described, you need to be far more insistent on the defense. Understanding, making your society resilient and secure, is very, very important. I think that’s what the Chinese have done. I think the West has kind of like just given up all of these things like digital infrastructure, like the power grid, they’ve all been privatized, and there’s no requirement of those private organizations to build that to be resilient and secure.

I think that’s one of the things that I saw when I was at the White House. If you don’t make your systems resilient and secure, yeah, an EMP, a cyber-attack can take you offline, and that can be just as devastating, but it might not even be attributable. And then where are you?

So I think, because of money, because it’s an inexpensive way to do things, we’ve highly centralized our infrastructure when it comes to power and when it comes to communications, and highly centralized means highly vulnerable. We know that every single time. So I think that’s one of the reasons that I got out of the military is because I wanted to focus on, at least on the communication side, decentralizing. But absolutely, we need to be focused on the defense in that scenario.

[00:58:32] Cem

I completely agree. At the end of the day, the Western system of democracy was purposely created to make it difficult to pass laws because they didn’t want the absolute power corrupting absolutely. That was the checks and balances to keep the system in place, and it’s broadly worked. The problem is without a crisis, nothing gets resolved. You need unanimity, you need crisis here in the US.

The great irony is we created a Federal Reserve and a system to try and smooth the business cycle and avoid crisis. Part of why we’re here is because we haven’t had a crisis. We haven’t had a crisis because we didn’t want it. So we’ve tried to eliminate the burning of the underbrush and the cost is a forest fire. So I think that’s one of the biggest things that people don’t realize.

The founding fathers of the US would be turning in their graves if they know we created the Federal Reserve, that we created something that was essentially out of the checks and balances of the system, because ironically, it smoothed the business cycle and avoided crisis and now has built up a massive set of pressures. Again, these structures of liberty are in entropy as a function of it. So quite ironically, a crisis is probably the thing we exactly need to fix things.

[00:59:58] Robert

Yeah. It’s funny because I think I actually tweeted something to (actually, now we call it X), something to the exact same thought, which is if we survive, it’s going to be because we’ve gone through some trials and tribulations and actually came out of the other side and survived. We can’t continue like this. We’ve become intellectually lazy and morally bankrupt.

[01:00:24] Cem

I completely agree. So the great irony here is if we try to not engage or to avoid conflict in all its forms, I think eventually, the fire will be too big. Nobody wants to be arguing for crisis or war or anything of the sort. But unfortunately, I think without it, we are heading towards a very bad place.

[01:00:53] Niels

Cem, I’m just going to jump in here because we’ve already been going for an hour. I want to allow a little bit of time at the end to Rob to talk a little bit about some of the things he’s working on right now. But of course, what you two have just been talking about and what you just mentioned there Cem obviously is very much in line with, and I don’t know if you’re familiar with the book “The Fourth Turning”, Rob, where essentially, every fourth turning is a crisis. I think we’re in the middle of one.

Before I ask you a little bit, because I think the audience will be interested in what you’re working on right now. But there are so many crises we could have talked about. We talked about technology. You and Cem have been going back and forth in terms of hot war, cold war. There is a drug war that you write about, that people may not really be aware of the fact that China seems to be the ones fueling the deadly fentanyl drug crisis in the US and maybe in other places.

We had a health war, potentially a war with COVID. We have financial terrorism. We have trade wars. We have climate wars. There are so many of them. We even have, as you I think alluded to, an economic system where a lot of the Western capital actually funds Chinese companies to compete and basically take out our own companies and all of that good stuff.

What I’m trying to ask you here is two things. One, is there one of those many types of war or conflict that you have written about that worries you more than another one? With regard to the economic war, if we call it that, I want to just play devil’s advocate for a second, because I listened to one of our previous guests on the show, a gentleman called Louis Vincent Gave, who has offices in China and knows the system very well. So there may of course be some biases in that. But I heard him argue very, very recently that, and you may actually agree with this completely, the West basically gave up everything to do with production. We just outsourced it to China, and they just became very good at it. They educated lots more engineers, and so on and so forth. So in his view, is it the fault of China that they just did what we didn’t want to do and became very, very good at it?

There are obviously different angles to look at all of these things. But back to my main question, if there’s any of these topics in this war without rules, so to speak, that you’ve written so eloquently about that concerns you more than others, and then I’d love to hear about what you’re doing on the data protection side.

[01:03:47] Robert

Let’s attack the argument that China is so much better at things. No, they’re not. They don’t play by the same rule. Seventy-five percent of the country is state-owned enterprise. They’re far less efficient than a private sector company operating in a true free trade environment. So they’re insulated from a lot of the challenges whether it’s funding or whether it’s taxes or whether it’s resources for production.

You can do chapter and verse on how the state-owned enterprise system within China is less efficient but still able to do what it does because China doesn’t play by the rules. That being said, it is absolutely true that we gave them our means of production. That was probably the stupidest thing that we could have done. But yes, we did that. So I totally agree with that sentiment.

In terms of what I think is the most damaging and the most dangerous is just information, the ability to manipulate information in the way that the digital space has enabled. I think providing protection from that is something that we need to do. If you look at the introduction of rural power in the United States, it was really about recognizing that electricity was a life-changing capability and that it needed to be extended to all Americans.

So, we’re starting to recognize that the internet is a life-changing system like energy was and needs to be extended to everywhere. But in so doing, what’s different between energy and information is information really needs the sovereign protection of the state in terms of preventing foreign entities from misusing that. In our Constitution, we said we’re going to have an army and a navy.

Well, something similar needs to occur in the digital space to protect our population from being propagandized. So to that end, as I start to look at the changing nature of warfare, and I looked at myself as a uniform member of the US military recognizing, okay, well, we’ve been outflanked. Just like the Germans outflanked the French by going around the Maginot Line, we’ve been outflanked by our adversaries coming directly at our homes, our children, our communities.

It would be much better for me to be outside of that system, that uniform system, and spread the word, number one, but number two, begin to work on what I think is a huge technology problem, and that is how un-resilient and unsecure our digital infrastructure is and can we do something about it. So for us, you know, our company SEMPRE, we spent about a year just looking at infrastructure.

Like I said, it’s highly centralized. How do you create decentralized infrastructure using innovation and technology? That’s what we’ve set about to do. The reason I felt that was a worthwhile endeavor and worth my time to invest in is because I believe in the American dream, I believe in the American spirit, and I believe really, if you’re going to harness that, it has to happen in the private sector where individual initiative is leading to an opportunity that other people see and can get behind.

So it’s not just about protecting our way of life, it’s also about exploiting and taking advantage of the capitalist system that allows you to make money while you’re doing it. That’s the only way to get people in our system motivated around something is to show them a way that they can make money doing it. So I think for me, going after this problem of resilience in security was the way to do it.

Along the way, we’ve just learned some incredible things that I think people that are smart about technology may have known, but because of business the way it is, it hasn’t been implemented. I’ll just give you one example. In trying to figure out how you decentralize infrastructure, one of the challenges today, in communications, is just like in America, we had a couple of OEMs.

Huawei was starting to grow dominant in the space, but then you have Ericsson, you have Nokia, and in some respects, Samsung, but Samsung is kind of a very small player. So predominantly, it’s Ericsson, the biggest, Nokia a distant second, and then we’ve basically made it illegal for Huawei to participate. So, you’ve got to OEMs and you’ve got three, some would say four major carriers, but the fourth dish not really there yet as a really usable network.

So you have three carriers, two OEMs, and you have this very, very isolated economic sphere of influence, if you will, or environment where these three carriers and two OEMs set the conditions. The way that the OEM sell to the carriers is OEMs make their equipment such that it’s not like a Windows computer or a Wi-Fi router you buy on Amazon. It’s actually incredibly complex. Sometimes it’s so complex that not even their own engineers know how to configure their equipment.

So certainly the carriers could not build their networks, operate and maintain and upgrade their networks without the support of the OEM. So a lot of their profit comes from services in support of running that network; building, operating, and maintaining that network. So that does not lend itself to changing the nature of the industry.

I think one of the things that you find out in that environment, the other problem we have is populations tend to not want to have giant towers near them. They’re concerned about RF energy being blasted in space, so they constantly fight against that, yet they want connectivity. So there’s pressure for building the towers and there’s pressure for not building towers? What does that mean? That means permitting takes forever.

So by the time you’re done, you’ve got this very complicated complex network that took forever to build a tower to put your radios on. Because of that, now we want to pump as much power out of that location as possible, 50,000 watts of power for a typical macro tower that you see along the road. Well, it just so happens that as you increase the power of the radio, you increase it 10 times, the range only goes out three times.

What that means is, in your networks today, you’re pumping out far more heat than you are radio energy. So what does that mean? You’re basically wasting a lot of it and heating the environment. So, I think one of the things that we realized is simple, smaller, faster actually could be more resilient and more secure but also could be more energy-efficient.

Now, how do you get around those problems of the complexity of deploying infrastructure? Well, you use software to do that. You use automation, something that we’ve done in things like the smartphones, but we haven’t done on the infrastructure side.

So, we spend a lot of time on the software to automate everything. But then you have this other problem, like, how do I get permits to deploy infrastructure? Well, it turns out that if you’re not obtrusive and you’re kind of lower power, well, then you have all the permitting you need in the world. You don’t need a permit because you can deploy in real estate.

So you can deploy in somebody’s structure, building, whatever, tower, water tower, you name it. If it’s small enough, it’s light enough, and it’s low power enough, you can do this pretty quickly; in fact, quicker and cheaper than just about anybody else. So you start to get into these dynamics that the industry is not really built around. Right now, it’s really big, heavy, billion-dollar contracts, pumping a lot of power out. That is not what SEMPRE is. SEMPRE is about really light, efficient, fast, and low cost.

If we can do that, we think that not only will we be able to get to those places that the industry has completely left behind because the economics aren’t there, but also, our infrastructure is going to survive. The one thing that you see in flooding is that the rooftops typically make it through the flood. Well, our intent is to have our entire infrastructure powered and operated on a single rooftop, a single solar power operating a single node that gives you the communications and computing that provides you the connectivity that allows you to call first responders to come and help.

When you have satellite as the backhaul medium, you have the ability to connect all these things. So that’s a very decentralized architecture. It’s the same kind of vision for a smartphone that I think Apple had. But we’re just taking that device strategy and putting it on the infrastructure side and saying, okay, rather than dividing all these things, let’s put them all together. A computer like the cloud, a network like a cell network, and then a satellite gateway, let’s smash them together. Let’s make them hard. Let’s make them survivable for EMP.

By the way, your phone survives in the EMP and operates through it just fine, but the equipment on top of a cell tower doesn’t, so let’s make an EMP hard. Let’s make it tamper-proof so if somebody tries to get into it, they can’t get the data. Let’s make it operate at extreme temperatures like cellular equipment can, and then let’s make that almost autonomous and self-healing and all the things that you need for equipment that is out on the battlefield, and then let’s do it over and over and over again very cost effectively and simply.

So that’s where I thought I can add something. Because the other way to go is, okay, I’m going to go fight the Chinese Communist Party, which I kind of did with my books. I’m in the information space, I’m trying to offer an apology for the world that we find ourselves in now. I’m proselytizing the democratic way of life and how I think we need to preserve it, but I really thought that I could get into technology and make a difference, and that’s why I focused on what I did.

It’s a difficult thing to do, but I also think that it’s very rewarding. I am surrounded by people that believe in the same thing that I do, and I think it’s going to make a difference over time. If it’s not us, if it’s not SEMPRE, it’ll be another company that recognizes all of these truths that we have found over the last six years in trying to disrupt a very isolated industry.

[01:15:07] Niels

This was great. Good to know that there are people working on solving some of these challenges. I did not know about the enormous amount of heat that you just mentioned. I wonder, and I’m not joking, we all think that global warming comes from one place. But the fact that we’re putting up all these towers and we feel it’s getting warmer, maybe there is something to look into there. We will link to all of these things.

General Rob Spalding, this has been an incredible conversation. So many unique insights into how the CCP plans to dominate the world and some of the shortcomings in our own system as well. Let me just say that you should definitely make sure you go and subscribe to Rob’s work and also get a copy of his current book “War Without Rules”, but also his first book, “Stealth Wars”.

You can of course find all the links in the show notes of today’s episode. As you can tell from this conversation, we are truly living in a global macro driven world and it is perhaps more important than ever before to stay well-informed. From Cem and me, thank you so much for listening. We look forward to being back with you as we continue our global macro series. In the meantime, take care of yourself and take care of each other.

[01:16:30] Ending

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