VALUE: After Hours (S07 E36): Engineers vs. Lawyers: Why China Builds and America Debates

During their recent episode, Taylor, Carlisle, and Colin King discussed Engineers vs. Lawyers: Why China Builds and America Debates. Here’s an excerpt from the episode:

Jake: I was just going to say, there’s an interesting book that came out recently on comparing China and the US. A lot of it was about the leadership styles. China being primarily run by engineers. The CCP is made up of, I don’t know, whatever 95% of them have engineering degrees, and so they’re really good at building things. They just get things built there. The consequence of that then is that the– There’s KPIs for things. And so, when you boil humanity down to one number, you end up with some very– I don’t want to make moralistic judgments, but short sighted when it comes to human liberties and freedom and happiness get sacrificed often.

And in comparison, the US, has been run by lawyers, like we have– Basically every president has a law degree, and all the Congress is all made up of lawyers. They’re really good at stopping things from getting done. [Colin laughs] And so, that’s what we end up with is a lot of– Well, up until recently, we do a pretty good job of protecting civil liberties, but at the expense of just getting shit built.

Colin: Being practical. Yeah.

Jake: Yeah, yeah. You lose a practicality to it. And so, probably the middle path like always is the correct answer, but it’s interesting to see those two societies.

Colin: You wind up having two types of person at odds with each other, the formulaic data driven people fundamentally don’t like creative and loose cannon type people and vice versa. Yeah, if you’ve got one cohort leading it, then they’re going to want to have all people that are homogenous to them, right?

Jake: Yeah. So, you over index to that, and then you end up with one child policy or zero COVID. There’s some pretty extreme social consequences from that.

Tobias: I forget who said this exactly, but there was a– I think he was an Australian mining engineer by the name of Lang Hancock. He used to say that when he would buy these mining companies and they have an exploration budget which consumes a lot of the money that the mining companies make. And so, he would shut down the exploration. But the moment that you shut down the exploration, you lose all of your blue-sky optionality in the business. And so, the multiples that people would pay for these businesses would sink to basically they were like financial acquisitions at that point.

Colin: Yeah. So, he basically– [crosstalk]

Tobias: He figured it– [crosstalk] Yeah, you figured out that you had to have some blue sky optionality in the guys’ going out and looking for new discoveries which I guess is like a tech company having R&D or that you’ve got to have that wasteful spend at the limit.

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VALUE: After Hours (S07 E36): Engineers vs. Lawyers: Why China Builds and America Debates

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