143B. The Importance of Supply Chains

Part 2 (of 2) on my series explaining how "Globalisation" ended up putting the West in a very undesirable economic situation that is bad now, and about to get much worse.

In part one, Understanding China, I explain the story of how the West created the motivation for China to crash the Western economy. Here I focus more on how the West created the means for China to crash or even dominate Western economies.

In part one I explain that the West started a war with China in 1839 that has never really ended. Western governments don’t want their people to be educated on the subject because the cost of those wars was born by their people, but the wealth generated went to just a handful of people. This is the Western economic model created by Adam Smith in 1776, which I’m not a fan of, which channels all the The Wealth of Nations into the hands of a few people.

Because it wouldn’t benefit you to know, you would not know there has been an almost 200 year war between the West and China unless you went out of your way to learn about it. Or, now that I’m talking about it, reading my substack. The fact that less than 1% of Americans is educated on the subject, and 100% of Chinese are aware of the war, has not worked in America’s favor.

In my series on building better Strategy MMOs, I explain how critical supply chains are to military victory. That series has three parts, with part 1 explaining the problems with modern strategy games, part 2 reveals my motivations to study military science, and part 3 gives solutions to strategy design problems.

Here I will explain why the USA has already lost the “Cold War” against China, but at least seems to be waking up to the situation. The options left to the USA are to move to a “Hot War”, which they might win but which everyone would lose, or to take accountability for their failures and try to turn things around. That really isn’t the American style, and not really China’s thing either. Thus the options for a non military solution here are rapidly disappearing.

In my series on strategy, I explained that wars are won by breaking the morale of the enemy, or breaking their supply chains. Annihilation of your enemy is a luxury few can afford, even though the richest countries do indulge in it. Here I will break my analysis down into a short section on Morale (not the focus of this paper), a third section on supply chains, and a middle section on how the American government transitioned twice over the last 30 years for political reasons that left the USA completely militarily exposed.

Note that while I was born in California and grew up very patriotic, even assisting the War Hawks there in my youth, I was excluded from academic and professional opportunities due to my perceived ethnicity. So no loyalty was earned or granted. Likewise, I’m not pro-Chinese despite being sympathetic to their situation. Thus I’m comfortable exposing the strategic situations of both countries even if this causes some backlash to me, and what’s left of my family is psychologically prepared in case they are targeted.

Thus the three sections of this paper will be:

• Mortal Morale Combat in the Age of AI

• Decentralization of Authority in the USA

• Supply Chain Suicide

Mortal Morale Combat in the Age of AI

In 1985 KGB defector Yuri Bezmenov bravely and nonchalantly explained on camera how a demoralization campaign works, how long it takes, the various stages, and the end goals. He’s the expert and everyone should watch this at least once. For ~40 years since I first saw it, I’ve been watching his predictions become reality in slow train-wreck fashion. The changes you see in American society, with brother against brother and brother against sister, have been carefully engineered.

These changes could have been prevented, but again that would require the USA government to educate their population on propaganda campaigns in order to resist them. But the USA has been using this tech for long before 1985 and doesn’t really want the population to be qualified to resist it.

Going back to the Chinese/American proxy war in Vietnam which I touched on briefly in the last paper, both sides developed this tech rapidly. On the American side we had the pleasant sounding “Voice of America”. On the other side we had the even sweeter sounding “Hanoi Hannah”, real name Trịnh Thị Ngọ. Ngo was quite a seductress and did a great job of educating our troops about their situation in a way adverse to American interests. She was trained by the West to do this work, but then used her skills against the American troops after the French occupiers were replaced by American occupiers.

“Hanoi Hannah” was taunting American troops 60 years ago. Part of her popularity, even with the troops, was that the USA propaganda was so obviously false that they felt better informed by listening to Hannah. Over the decades since, the USA has relied less on mass deployments and more on “Proxy Wars” where we supply a side in a conflict but use the domestic people to do the actual fighting. This insulates the public back at home from inconvenient information, but leads to the domestic population becoming much more sophisticated militarily as they learn our weapons and tactics. This became a problem when we trained Afghani partisans to resist the Russian occupation, and then later decided to occupy the country ourselves (similar to the French to American occupation swap in Vietnam 50 years earlier). The USA ultimately had to pull out of both conflicts.

None of this is strange to me since I created a misinformation campaign in my home town to help get “Bomber” Bob Dornan elected when I was 14 years old, to help ensure that the B-2 bomber got funded.

Note that the USA has not technically gone to war since 1941. By just having special military operations (like Russia does) the USA government can bypass Congress and the public by just deploying without a war declaration. The USA is always colonizing someone, either directly or through a proxy. These Proxy Wars are not official wars, but are no less brutal.

Today the war of Morale has been automated. Algorithms on both sides of the conflict decide what can be shown, what is promoted, and what/who is censored. TikTok is an example of a cleverly disguised propaganda tool aimed at the West. Since it has been weaponized, it’s banned in China where it was made. It’s purpose is to demoralize the audience, just as Yuri Bezmenov described. That’s why it promotes sexist and racist content, promotes and teaches crime (like how to steal cars), promotes self-harm (a lot of children have died from “challenges”), and generally promotes division. To anyone that understands what a demoralization campaign looks like, this is blatant. The USA government has even tried to ban TikTok or get them to reveal their algorithm (that’s definitely not going to happen), but then TikTok was used to mobilize users against the government just as you would expect. It’s a very effective tool.

Of course the government could protect itself and the public about how social media is being used to brain wash people. The problem is, social media is big business in the USA and abroad and company profits are more important than public safety.

Which, brings me to the next section…

Decentralization of Authority in the USA

Running a war is a very complicated logistics problem, especially if the war is global. One of the most important things America did to win World War 2 was to transfer authority from the military to an economist. Here I’m primarily crediting Robert McNamara. If wars are won by protecting and creating your supply chains, and disrupting those of the enemy, then the importance of McNamara’s contributions to the war cannot be overstated.

I used to play a lot of wargames before they became computerized. Back around ~1980 I played a game of Avalon Hill’s Luftwaffe with a friend that had just bought it. I got cocky and didn’t read the rules carefully. I ended up losing this game, the first time in my life that had ever happened. I didn’t take the situation very maturely, something I regret to this day as I lost a friend. But the reason I lost was because I was trying to kill as many of her planes as I could. She was focused on the goal of protecting her supply chains at all costs, and that was the victory condition. It’s often said that Hitler was more focused on combat victories than supply chain victories and this was one of his greatest weaknesses militarily.

Under McNamara we didn’t make the best planes or tanks. Some would say the B-17 bomber was trash. But the USA filled the sky with them and just overwhelmed all opposition. Quantity versus quality. And the USA was not as worried about casualties as it was about neutralizing enemy supply chains. This was the winning strategy that ground the German war machine to dust. America’s proxy Ukraine is doing the same thing to Russia right now, while Putin targets civilian infrastructure (housing, schools, hospitals, energy infrastructure) to try to destroy Ukrainian morale. Two different ways to win a war. It is very difficult to break the morale of a country when it is the people in that country defending themselves. The USA couldn’t do it in Vietnam or Afghanistan, and it’s not going to happen in Ukraine or in the Middle East.

During this period from WW2 to the 1960s, the USA was in their golden age. The entire world respected them, despite their unfortunate taste for colonization campaigns. No one produced more engineers or scientists and the American economy was primarily under centralized authority. During WW2 if you had doubts about the loyalty of Japanese Americans, then you just rounded them all up and put them in concentration camps. I’m not advocating for this, but that was the reality.

Then as president Eisenhower was warning about the threat of the military industrial complex, things were changing in the USA. The idea that a sitting president, who had previously been the most powerful general in USA history, was warning about defence industry companies, was just totally bizarre to people of the day. Even today it seems bizarre. The implication was that the companies were more powerful than the president. Even that president. Eisenhower struggled with the preparation of that speech for two years, and waited until the last day he was in office to drop it. That was a bit cowardly for a man that was certainly no coward.

I think that marked the point in American history when America turned into what my economics professors 50 years later would describe as a Corporate Oligarchy. A country run by companies. The problem here, which Eisenhower struggled with but didn’t know how to articulate, was that companies don’t have any loyalty to country, citizens, or public welfare. Their goal is to improve the next quarterly earnings. In the pursuit of that, they aren’t even interested in the company’s long term welfare.

Companies are in competition with everything that isn’t them. They have no loyalty to the citizenry, and the less employees they have the higher their stock values will be since employees are a fiscal liability. They have no loyalty to their country, and in the case of the largest companies they are multinational. Their production and supply chains might be mostly outside the USA.

If another country made an American company an offer it couldn’t refuse, it wouldn’t refuse. Eisenhower must have understood this. China certainly did. Even though the technology used by these companies was almost surely government funded, these companies could sell it to China at a handsome profit. They could also move almost their entire supply chains overseas where they could be casually compromised without firing a shot. This sets up an auto-surrender situation. I would put this period from the 1960s until about 1990.

In 1980, the year I helped “Bomber” Bob Dornan and Ronald Reagan get elected (because I was still a War Hawk in 1980, I would not flip and become a pacifist until 1984), Reagan and the Republicans were pushing school prayer. I torpedoed school prayer in California around 1982 by organising the honors students at Santa Monica High School to walk into the principal’s office together holding books on Satanic Worship. Without mentioning or looking at our books, we expressed how eager we were to practice our faith in homeroom. When the principal realized what we were doing, and knew I don’t make idle threats, he knew his school was about to be ground zero for one of the biggest political firestorms in USA history.

So a call went out to Sacramento and Governor Pete Wilson and school prayer quietly died.

In 1990 I played Sid Meier’s Civilization , and my world changed. I went from seeing economics as a bad thing to being very very important. Oddly, that game did a very good job of modelling global warming. 35 years ago. Movies like Soylent Green, which I saw in the Fox theater on Lincoln Boulevard in 1973, predicted it even earlier. A strange thing happened in later iterations… that feature was removed. It disappeared until 2019. I’ve had the pleasure to work on two Civilization games, which was a bucket list moment for me.

But the removal of global warming was a symptom of more than the atmosphere.

The corporate oligarchy didn’t like it because that smelled like Responsibility, and they didn’t want to be responsible for their actions. The Christian evangelicals seemed similarly alarmed by it, perhaps this was an echo of when the Roman Inquisition found Galileo Galilei guilty of heresy for saying the Earth revolved around the sun 350 years earlier.

Whatever the reason, America shifted some time between 1980 and 1990. The corporate oligarchy was still there, but science was becoming vilified again. Even companies became light on scientists, and they were increasingly being purged from government while education was getting defunded.

Even as China put so much effort into transferring technology from the USA and its allies to itself, as the years go by they are running out of things to copy because innovation is dying in the USA. A few key sectors are still getting funding but increasingly they have to be staffed from scientists of other countries that still value them.

I don’t know what to call this other than Theocracy, and our “this isn’t a war” wars seem to increasingly be returning to religious wars instead of wars of economics. This was pretty normal during the Crusades, but dang you’d think we’d have moved on from that.

So the result now of decentralization of authority and the successful demoralization campaigns against the USA is that the USA is split across company and religious lines with little ability to defend itself from subversion.

Supply Chain Suicide

Under McNamara the USA built almost 13,000 B-17 bombers and they dropped 640 kilotons of bombs on Germany and it’s occupied territories. The fission bomb dropped on Hiroshima had a yield of 15 kilotons. So B-17s dropped the equivalent of 43 Hiroshima atomic weapons on Germany, primarily targeting German supply chains. That was a lot of work, and more importantly, a lot of logistics.

But under the American corporate oligarchy our most critical supply chains were just merrily moved to China. China dreams of another Century of Humiliation, but not for China. They don’t have to drop a single bomb to do that.

When China said “we can make your products cheaper and you will make more profits”, CEOs across the USA were tripping over themselves to hand their balls to the CCP.

CEO’s: “These are really important to us, so please take good care of them!”

CCP: “Oh we will, we promise!”

So when Trump began trying to defend USA supply chains for the first time in my lifetime (Which I very much appreciate, even though it would be better from someone less criminally- and Epstein-encumbered), Xi just had to tap those balls lightly by stopping rare earth and magnet shipments for a moment and all of a sudden CEOs across the country were like “I can’t live without my balls, I’m screwed!”

Yes. Yes you are. Don’t worry, castration isn’t the end of the world.

This happened because defending supply chains is the job of the military, which is paid for by the public. Which is being laid off by companies. And companies are putting the supply chains in places our military can’t defend them. Because the welfare of their country, and even their own operations, is secondary to profits. If they kept their supply chains in friendlier countries (still probably outside the USA since they don’t care about their American workers) they might be less competitive versus other companies and get abandoned by investors. So they were pre-screwed automatically under this new corporate oligarchy that Eisenhower warned about.

If Eisenhower was the first and last president to see the danger, he should have done something about it in 1959, not wait until his last day in office in 1961 to say something. I wish Americans all the best in their efforts to claw back their economy from it’s outsourcing that Adam Smith said would not happen because of the “Hand of God” (he was referring to nationalism, not an actual God). Thus good old Adam left us with no solutions other than prayer, and I don’t think God is going to bail us out of this one. A lot of religious people feel the approach of Armageddon and have their foot on the gas pedal to experience Rapture. I’m not religious other than Buddhist leanings. But I mention The Rapture for the benefit of my Eastern and non religious readers who may not be aware that this is happening in the USA. The concept was crystalized in the 1830s, at the same time the West started the Century of Humiliation against China. The Boxer revolution would later be an attempt to repel Christian missionaries from China.

There is a lot going on right now, many groups are positioning themselves for inevitable conflict even as our ecosystem is becoming destabilized. Technology, and especially AI, is a huge wildcard. Ballistic missile and nuclear weapon technology is proliferating, often with the blessing of the West.

The only thing that is certain is chaos. Every country, company, and family should be hardening their own supply chains right now following the advice I gave in my Moneyball 2.0 paper. All of us are pawns of someone, but realizing that sooner not later could save you a lot of pain.

My Role Here

I’m not proud of my involvement in B-2 bomber production. Two wrongs do not make a right. I am proud of stopping school prayer in California. I can’t say that China is wrong in what they are doing to the USA. I’m a bit shocked that the USA has allowed it to happen. China has what us grognards call a Casus Belli, which gives them a moral right to retaliate against the West. But just as I decided that two wrongs do not make a right when I was 18 and became a pacifist, I hope that China will not hand in that John Wick universe “Continental Gold Coin”. They are being provoked and are so close to doing it.

I’m not on either side, I moved to Australia six years ago so that I’d be in relatively neutral territory when things go to shit. Even without hot conflict both the West and China are going to go through periods of mass unemployment despite the looming Demographic Collapse (which I address in papers 92A to 97F). This was predicted way back in 1973 in Soylent Green. My technology, which I’ve been developing since at least 2005, is meant as a remedy for the social ills of mass unemployment.

Some might call this tech a blueprint for infinitely scalable mass entertainment. Others might call it technology for social control. Of course this all depends on who deploys it. In 2010 I described this as what would become a future global metaverse by 2030 in my Third Tier of Game Development. Unfortunately, I think the window of opportunity for a future Utopia has closed and I’ve been mostly side-lined while the world slides further into Dystopia. Use of my digital drug designs could be used as a Soma Holiday in a future dark Dystopia like A Brave New World which feels uncomfortably real despite having been written almost 100 years ago.

I don’t have much confidence that the USA or China would use the tech to help people. It would do wonders for social control of course. Infinitely scalable weightless mood altering drugs that can be produced at a relatively tiny price point that might actually be healthy would revolutionize entertainment. I still hold out hope that Europe or the new Middle East tech hubs will step in and develop the tech, as it’s going to be sorely needed. If we can’t manage our unemployed and keep them happy, then the alternative is to turn them into Soylent Green crackers. Those are the best case scenario options, because if AI takes over we won’t even need crackers.

A CCP operative invited himself onto my last project over my objections. His intentions were obvious. He immediately started copying all of our documentation. When the founders finally accepted what was happening they finally ejected him. But even weeks later he was trying to get hold of our tech both from the main company and also all of our vendors.

I generally attempt to disable my tech until right before it launches because someone’s always trying to help themselves to it improperly, so I don’t think enough was transferred to allow reproduction. I’m well aware my tech is dangerous in the wrong hands, and I’m trying very hard to not be a pawn in the looming war I’m describing here.