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…o make calcium oxide, which is the active ingredient in cement. So that's 60% of the difficulty of making cement there. Then having a shiny demo of something that works but is not commercially viable. Even that is impressive in itself. I mean, Rivian for example, they make a beautiful product but they're yet to make money with it. But just getting a product to market that people like… That in itself is worthy of admiration. Beautiful car. They've just got to figure out how to delete about 30% of the components and they'll be in business. And far be it for me to criticize. But if you are able to make cement with a carbon neutral process and you're like 60 bucks, you probably have an argument that you could find enough off-takers who want to pay for the carbon credits or whatever. Then you can stay in business. But if it's $6,000 a ton, it's very slim. How causal were the solar subsidies along the way, like Germany's, to solar success on the current cost curve? That's a good question. I think it's very hard to run the counterfactual. I think that the Germany solar subsidies did not accrue the appropriate reward to Germany that they probably should have. But I don't think they were intending to— But it would've been nice if they had. Sure. Yeah. But I think they were more motivated by do-goodery than… Well, these things are always bootleggers and Baptists. The total amount of money they spent on, it was not all that much in the grand scheme of things. But I guess what I mean is, learning rates are about the idea that with increased volume comes lower cost and you get to be competitive. And again now— So in the counterfactual where Germany didn't do it, right? Well, Spain still did it a little bit and Australia did a little bit. Maybe it would've delayed things by a year or two. But as soon as, say China, started to do it at scale, they would've slurped up that time difference and we'd be where we were today. Well, and then how impactful were the Chinese interventions in the market— Enormously. Enormously, right? So Chinese subsidies accelerated solar. that time difference and we'd be where we were today. Well, and then how impactful were the Chinese interventions in the market— Enormously. Enormously, right? So Chinese subsidies accelerated solar. China has deployed more solar in the last three months than the United States has ever deployed, ever. They're becoming an electro-state, and this is an important point that I think is widely underappreciated. The United States has formed an alliance with Australia and Japan, and I believe India—I can't remember exactly—to basically try and control oil transiting through the South China Sea and adjacent areas, because they believe that will give them the political leverage they need to force China to play nice. And China currently imports something like 12 million barrels a day from the Middle East across sealands they don't control and can't control. Past countries who are not all that friendly to them in general. And they understand this. And the Virginia-class nuclear submarine is being built in part to service the needs—allied needs—to police the Strait of Malacca. That submarine is due to be delivered to Australia in 2035. Do you think by 2035 China is still going to be as dependent on oil through the Strait of Malacca? I don't. At the rate that they're deploying right now, they could cut off that supply if they needed to. In the same way that Germany was ultimately able to cut itself off from supplies in 1939. And it didn't really kill them until 1944. But it did kill them. Ultimately, yes. But that was mostly the combined bomber offensive delivered by a fleet of hyperloops flying from—oh no wait, they were planes. And so the way that China reduced its oil dependence is via electrification or via Terraform-style synthetic fuels? As far as I know, they're not working on synthetic fuels, at least not Terraform-style, but it is not rocket science. And I'm sure they'll figure it out sooner or later. I mean, it's a little bit rocket science, a lot of meat in there. Actually yeah, it's probably rocket science. Going back to the subsidies, how did the Chinese subsidize solar panels? I actually don’t know the specifics. Okay. What I do know is that they basically offered government-backed, zero-interest loans to manufacturers, for example. And they also— Cheap capital. That's right. Yeah. Cheap capital. So a lot of these technologies are developed in Australia. I would like a government-backed, zero-interest loan. That sounds lovely. Yeah, it'd be great. Actually, to be fair, the financial and legal situation in the United States, as much as we complain about it, would you rather have built Stripe in Hong Kong or something? Oh no, no I agree. The US is a fabulous business environment. It’s a great business environment. The capital is cheap enough. That's the important thing. r have built Stripe in Hong Kong or something? Oh no, no I agree. The US is a fabulous business environment. It’s a great business environment. The capital is cheap enough. That's the important thing. Where I'm going with this is, if the German subsidies were somewhat impactful and if the Chinese subsidies were very impactful to the development of solar, what are the implications here for your grand theory of industrial policy and intervention? Where, if we want to be able to have nice things like solar panels and things like that, Silicon Valley tends to have this libertarian bent, you know, keep the government out of our innovation. But it seems like top-down government intervention was impactful in bringing solar to us sooner. It would've happened anyway, but it would've happened slower. And so, what do you think sensible industrial policy is for the US or for whatever government with lots of stake— A bit above pay grade there. I mean, it's an interesting point. You say, well, the counterfactual surely would be if China was a Western liberal democracy that was also grappling with the fact that it was enormously dependent on oil imports and it was unable to deal with the Middle East and maybe wasn't totally friendly with the United States. But they were Western liberal and they had the same business freedom we take for granted here. Would they have been able to mobilize the same amount of capital to go and build solar panels? And I think the answer is probably yes. But no, the counterfactual is just, the Germans never get around to doing the subsidies. The Chinese never get around to doing the subsidies. All the other subsidies are too small and solar happens much more slowly. Maybe. But at the same time, actually, I kind of sit on both sides of this issue. You can look at the process of Soviet industrialization. There's a fabulous book called Red Plenty by Francis Spufford that is kind of a fictionalized account of this. And you can say, “Isn't it amazing that the Soviets managed to go from this kind of desperately underdeveloped backwater then level up prior to and during World War II?” And then World War II, having lost 20 million people or something, put the pieces back together and then execute a five-year plan after five-year plan after five-year plan. And then by 1980 they were more or less at parity with the poorer parts of the West. “Isn't that amazing?” You say, “Yes it is. But if you look at GDP growth over that time, it's actually slower at its fastest point than the United States was at its slowest point,” which indicates to me that miracles were achieved in the Soviet system. But even so, it would've been more efficient had they had a freer market, for example. Sure, yeah. But I think we can have something between “no intervention at all is bad” and “communism is bad.” Somewhere along that spectrum. Somewhere between? Yeah, yeah, yeah. I don’t know. I feel like you’re— I'm baiting you, yeah.…

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