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15/ Profitability should be ignored when there is growth potential. When there are lands to conquer, you want to give the generals more so that they can do more conquering. If you try to micro-manage the generals, you lose the war.

16/ This empire building mentality requires individuals with large appetites. People who can actually wield these giant streams of money. They're often very different people who want to manage razor thin margins of a factory or do social good. They're conquerors.

17/ In China's systems, these generals can be reigned in because there are fewer sources of easy debt. Generals run out of money faster. VS in the U.S. where they can access Saudi Arabia's money or a collectivized pool of dumbasses who overextended on credit-card/mortgage.

18/ In China, it's much harder to maintain your mandate of heaven and make it permanent by becoming a flywheel. E.g. tech companies have so much money that they don't NEED to print money, it just flows in. This erodes the influence of the central authority.

19/ Pawnbrokers are a source of debt in China but the market is small.https://twitter.com/doctorow/status/1324392326580432897?s=20 …

20/ What Ant financial is doing is that it's providing an alternative source of capital that is not under control of the central government.https://twitter.com/doctorow/status/1324392328207888384?s=20 …

21/ This makes it more difficult to reign in the generals who are hellbent on continuing their empire building. It's like creating a Bank of Braavos. If I am a general that wants to create a coup, I WANT the existence of sth like the Bank of Braavos to hire my mercenaries.

22/ The creation of this BoB is exactly what regulators are supposed to prevent.https://twitter.com/doctorow/status/1324392336843972608?s=20 …

23/ Note that the U.S. does NOT have a the moral high ground on this. Uber and Postmates don't provide value because their empire driven mentality can't be reigned in due to life support by BoB.https://twitter.com/doctorow/status/1324392349540102145?s=20 …

24/ To sum up. Giving agency to the private sector avoids the economy being micro-managed to death soviet union style. However, Banks of Braavos often become arms dealers, selling to both sides while growing in power to rival the central authority.

25/ The central authority isn't "good". After all, it came to power via various forms of warmongering. However, it leaves a useful skeleton of behaviors and ideas (like money) that require centralization and often is the only thing that can prevent market failures.

27/ It's kinda hard to trust the existing centralized behemoths though. China can't keep baby milk formula from killing its babies. Big tech seems to have its hands full.. Who knew generals sucked at peace.

28/ Addendum: To understand capital flight from China understand that generals can ONLY conquer. They can do nothing else. A restricted general will naturally find greener pastures to maintain their sense of freedom and power.https://twitter.com/doctorow/status/1324391667739226112?s=20 …