China Will Defeat The USA Unless….

fall 1993 Executives from America's topdefense contractors were invited to thePentagon the Cold War was over and theywere anxious to hear about the futurethe Secretary of Defense didn't wastehis words defense spending would bereduced and fast and many of thecompanies represented in the roomwouldn't survive and they didn't fastforward to October 2020 deep in theheart of the same building while therest of the world is reeling from thecovid-19 pandemic U.S military plannerswere running a war game on paper theenemy didn't have a name but everyone inthe room knew it was meant to be Chinathe US didn't just lose it had its clockcleaned the vice chairman of the JointChiefs of Staff said that the enemy knewexactly what we were going to do beforewe did it and they took advantage thewar game proved that the U.S militarywas struggling to cope with the new wayof war and it showed everyone that Chinacould actually win if you care aboutthings like democracy and Free Speechthis should scare you but the UnitedStates has an ace of its slaves anuntapped source of talent that can helpits military reclaim its status as thebest in the world and in this video I'mgoing to tell you about it to fullyunderstand this story we've got to goback to the 1940sduring his presidency Franklin DelanoRoosevelt would often talk to theAmerican people via scripted FiresideChats these were significant eventsfamilies would huddle around the radioto hear what the president had to sayRoosevelt delivered one of his mostimportant in the final days of 1944.World War II was raging in Europe theU.S hadn't entered the war but FDR wasstill determined to help he explained tothe American people that they had a jobto dowe must be the great arsenal ofdemocracy for us this is an emergency asserious as War itself we must applyourselves to our tasks with the sameresolution the same sense of urgency TheSame Spirit of patriotism and sacrificeas we would show were we at War to helpthe war effort and maintain NationalSecurity at home the United States woulduse its unmatched industrialmanufacturing capacity to help itsallies fight off the Nazis the Japaneseattacked Pearl Harbor less than a yearafter he gave this speech and despitewanting to stay out of the war the U.Swas dragged in but the arsenal ofdemocracy remains a powerful concept wewould all prefer to live in a peacefulworld that doesn't require armiesinstead we live in a dangerous world andin a dangerous world the best way tostay safe is by becoming so strong thatno one will ever threaten you thatconcept is called deterrence deterrencethat's what it's about is you scaresomebody awaydoing something you don't want them todo by making them fear the consequencesto do that they must know what theconsequences arelet's go from the middle of one war tothe aftermath of another after bothNations played a leading role indefeating the Nazis the U.S and SovietUnion locked horns in the Cold War thisepic battle of ideology and Technologyspanned 45 years but the pressure ofkeeping up with the U.S eventuallyproved too much for the Soviet Union itcollapsed in December of 1991 under theweight of a stagnant economyunsustainable military spending andcivil unrest for most people the end ofthe Cold War was great news but it wasbad news for America's defense companiesa world with an unchallenged superpowerwas not a world with big demand forAmerican Military Hardware people evenstarted talking about a peace dividendbasically taking money which used to bespent on National Security and puttingit into health education or tax cutssounds pretty good in theory even DickCheney who would go on to become GeorgeW Bush's vice president talked aboutcutting costs because we now faceneither a global threat nor a hostilenon-democratic power dominating a regioncritical to our interest we have theopportunity to meet our requirements atlower levels and at lower costbetween 1991 and 1996 defense spendingfell by more than 15 percent an in-housePentagon study came to the conclusionthat the United States didn't need somany companies making Fighters bomberstanks submarines and missiles that wasthe context which led to the Secretaryof Defense Les Aspen and his DeputyWilliam Perry inviting defense industryExecutives to the Pentagon on thatfateful night in 1993. one industryleader called it the Last Supper theadministration officials wanted theindustry to become leaner and more costefficient again sounds great in theorythey encouraged the executives toconsider mergers he even said later thatwe expect defense companies to go out ofbusiness we will stand by and watch andthat's exactly what happened dozens ofprime contractors merged or wereabsorbed into Mega corporationsvenerable names like Hughes electronicsand McDonnell Douglas ceased to existfirms like General Electric and Chryslersold their defense subsidiaries at onepoint the industry was shedding onethousand jobs a day it was great newsfor the executives and shareholders thatthe companies that survived their marketshare went up and so did their marketcapitalization but the defense sectordidn't become leaner it became lesscompetitive and the remaining defensecrimes learned how to charge More ForLess the US government was happy to takesome of its battleships off the boardbut back then in the Carefree andoptimistic 1990s it didn't seem like aproblem after all it was the 90s nothingwas a problem former Eastern Bloc stateswere slowly but surely traveling thelong road to democracy Bill Clinton wasthe first baby boomer president moneywas easy and so was life the U.S feltInvincible 911 the great financialcrisis the war on terror these were allspecs on the horizon in the words of thepolitical scientist Francis fukuyama itfelt like living in the end of historybut history hadn't ended it was justtaking a deep breath and around the sametime that the United States was takingits battleships off the board on theother side of the Pacific Ocean Chinawas building hundreds of themthroughout the 1990s China experiencedthe biggest economic boom in historyhundreds of millions of people werelifted out of poverty and the countrywent from being a relative economicBackwater to a manufacturing Powerhouseand full-fledged member of theInternational Communitythe prosperity created by the boom gavethe Chinese Communist party's leadersthe means to reclaim what they saw isChina's rightful place in the worldorder no leader has gone about that taskwith more Vigor than season pair weshould strengthen National Defense andarmy modernization building the People'sArmy into a great wall of Steel underhis one-man rule China has adopted anincreasingly aggressive foreign policyhe wants to cement his own authority andenhance the legitimacy of the CommunistParty the best way to do that is byshaping the International System so itmore closely aligns with China'sgeopolitical interests and the best wayto do that is by modernizing China'sArmed Forces to the point where they canrespond to any perceived provocationcoerce their adversaries into doing whatChina wants and take on the UnitedStates in the asia-pacific region so howexactly has Xi Jinping expanded themilitary capabilities of the people'sLiberation Army or pla there's Lukeconcern tonight about China's militarycapabilities amid a report the countryrecently tested a new nuclear-capableHypersonic missile and it's understoodthat U.S intelligence had no idea thatChina had moved this far ahead in late2015 as part of a sweepingreorganization of China's Armed Forces Celevated the missile Force to the samelevel as the Army Navy and Air Force ina grand ceremony he even renamed thesecond artillery Corps to the pla rocketForce but it's not just theater Chinahas made huge strides in three differentmissile classes the first isanti-carrier ballistic missiles such asthe df-21d these are designedspecifically to destroy the aircraftcarriers and bases that have formed thebackbone of U.S military dominance inAsia for decades U.S military plannersnow have to Grapple with what waspreviously an unthinkable scenario whichis that U.S aircraft carriers could becompletely obsolete in a conflict nearthe Chinese Mainland the second island-based intermediate ballistic andcruise missiles China has achieved anear Monopoly in this type of missile itdid so by not signing up to theintermediate range nuclear forces treatythis agreement signed in the Cold Waraimed to reduce the threat of nuclearconflict it banned the U.S and Russiafrom deploying these missiles andalthough the United States withdrew fromthe treaty in August of 2019 China stillhad a 30-year Monopoly on making themChina is also believed to have theworld's biggest stockpile of hypersonicmissiles because of the name peoplefocused the Hypersonic part on how fastthey go but actually the biggest issuewhen it comes to defenses is that theycan fly very low because of the circularnature of the earth if you have a radarsystem you don't see it until close tothe last minute which makes it difficultto intercept as of today the U.S doesn'thave Hypersonic missiles at all nor doesit have any reliable way of shootingthem down China's missile capabilitiespose huge threats to the U.S Navy andthe Pacific and U.S allies in theasia-pacific region so does its Navy Ithink it's important to understand listshipbuilding capacity today if China wasto lose half of their Navy today itwould take them two to three years torebuild their surface Navy if we were tolose half of our surface Navy it wouldtake us probably 20 years what's morethe U.S Navy predicts that between 2020and 2040 the total number of ChineseNavy ships will increase by 40 percenttoday China is one of the few countriesthat has successfully achieved thenuclear Triad the ability to launchnuclear missiles from the air land andsea that gives Beijing somethingpowerful a reliable second strikenuclear capability it can use to deterand coerce its enemies Xi Jinping hasput hundreds of new battleships on theboard at the same time he's also seekingcontrol of new technologyone of the most worrying areas ofChinese development has been cyberwarfare as much as we know the Chinesehave the biggest cyber forces in theworld China is investing hundreds ofbillions of dollars in emerging dual useTechnologies so that the people'sLiberation Army can achieve Battlefielddominancespecifically the pla is pursuing aconcept known as multi-domain PrecisionWarfare fundamentally this is aboutlinking command and controlCommunications intelligence surveillanceand reconnaissance to quickly coordinateFirepower expose enemy vulnerabilitiesand then exploit them at the heart ofmulti-domain precision Warfare sit dualuse Technologies such as AI roboticscyber infrastructure and automation whenit comes to modernizing its militaryChina's leaders have a key advantageover the West there are simply no checkson their power every institution inChina is subordinate to the CommunistParty The Party can steal whatevertechnology it wants and then imprisonanyone who complains and no one can stopthem the Chinese started to prioritizecyber warfare and information Warfare ingeneral very early in 1990s thenunderstood that the key of AmericanAdvantage was the information advantageand to win they needed to destroy thethis American Advantage China now leadsthe world in 37 out of 44 keyTechnologies covering a wide range ofcritical Fields such as space roboticsAI biotech and Quantum Computing theseare of the technologies that willdetermine the balance of power in the21st centurynow we don't know much about thatOctober 2020 war game but we do knowthat the red team attacked clustered U.Sforces with hypersonic missiles whilealso disrupting satellite Communicationsin other words the red team waited forthe U.S commanders to do exactly whatthey expected and then they destroyedthembuilt a military that can take on anddefeat the United States but but that'sstill only half the story to trulyunderstand how the US military lost itsAdvantage we have to go back to themiddle of the 20th century and a timewhen many of the West's most brilliantscientists happily worked hand in handwith their governments Kelly Johnsonbuilt entire generations of new aircraftat Lockheed Alan Turing devisedtechniques that crack German ciphersduring World War II John Von Neumann wasan integral part of the ManhattanProject and many of the Technologiescreated in the furnace of War becamehousehold Staples the internet personalComputing GPS and commercial air travelall are integral to the modern world andthey all began as military r d projectsincredibly in 1960 the U.S Department ofDefense accounted for 36 percent of allr d spending and I don't mean in the U.SI mean in the world but then somethingbegan to change a lot of it can betraced back to one man Robert McNamaraMcNamara was a new kind of bureaucratbefore he became JFK's secretary defensehe was the first ever president of theFord Motor Company who wasn't a memberof the Ford family simply put McNamarawas brilliant as a dedicated disciple ofScientific Management he was constantlybuilding models to find the mostefficient way of doing things he broughtthat technocratic Spirit to the Pentagonin the early 1960s McNamara institutedthe planning programming and budgetingsystem McNamara was driven by a concernthat individual military departments hadto set their own budgets and his time atFord made him confident he could improveefficiency and reduce waste in anutshell his reform meant funding wouldbe allocated based on strategicobjectives set by the dod's military andcivilian leadership it fundamentallyaltered the incentives faced by MajorU.S defense contractors and itinadvertently sowed the seeds of notjust the Last Supper but the problemsfaced by the U.S defense industry todaylet me explain McNamara believed thatthe U.S already had the technologicaladvantage it needed to defeat the SovietUnion all it needed to do to win wasallocate its resources efficiently whenit came to the Cold War McNamara wasright the U.S used its unmatchedindustrial manufacturing base to buildthe world's strongest conventionalmilitary but technocrats like McNamaraare much better at seeing the world asit is instead of seeing how it could bedifferent in the future thanks partly toreforms he implemented the U.S defenseindustry became obsessed with efficiencyand adhering to process became moreimportant than achieving realtechnological progress in hisbest-selling Memoir about Lockheed SkunkWorks division Ben Rich wrote in my 40years at Lockheed I worked on 27different airplanes today's Youngengineer will be lucky to build even onehe was right in the 1950s the U.S builtfive generations of fighter jets threegenerations of bombers and two entirelydifferent classes of aircraft carriersand that's just in 10 years just the1950s but the United States hasn'tfielded a new bomber plane since the endof the Cold War not only are new systemsrarely being built the costs of buildingthem in the first place have skyrocketedin 1969 an analyst in the office of thesecretary of defense gave someinteresting testimony about 90 percentof major weapon systems bought by thedod wound up costing at least twice asmuch as the original estimate the F-35 afighter plane which was meant to be aone-size-fits-all solution for the AirForce Navy and Marine Corps is nowexpected to cost taxpayers 1.6 trillionover its lifetime in fact the cost ofdeveloping fighter planes increased by ahundred X from the 1950s to the 1990sBen Rich's Memoir was published in 1994the year after the Last Supper theproblems he described have only becomeworse since thenlast year the dod released a reportabout the state of competition in thedefense industry you wouldn't expect agovernment document to read like athriller but this one does the reportfound that the U.S military isincreasingly dependent on a small numberof contractors for Critical Defensecapabilities ninety percent of America'smissiles come from just three providersevery nuclear-powered aircraft carrieris designed and built by one companywhen Les Aspen and Bill Perry invitedthe leaders of U.S defense companies tothe Pentagon for the Last Supper therewere more than 50 defense primes todaythere are just five Lockheed MartinRaytheon General Dynamics Boeing andNorthrop Grumman and they have learnedto operate in ways that wouldn't betolerated in other Industriesunder the current system of procurementcreated by Robert McNamara the U.Sgovernment spends years definingrequirements before ever putting out arequest for a new system that approachis increasingly out of step with a worldwhere our Rivals are aggressivelyinvesting in new technologies in orderto catch up in 2018 the U.S undersecretary for research and Engineering aman named Mike Griffin said that onaverage it takes the United States 16years to deliver an idea to fulloperational capability compared to justseven years in China that kind ofAdvantage compounds incredibly quicklyeven if your adversary starts with afraction of your power if they grow attwice the speed you do soon they willovertake and overpower you meeting thethreats of today requires developing theTechnologies of tomorrow if we canreturn to what used to be this country'sAce in the Hole our ability to try outnew ideas that is the best of thiscountry we have let our legal andContracting processes get in our wayunder investment is also a huge problemwhen people get out of line we've beenable to redirect that through acombination of military force economicsanctions and diplomatic right it'salways going to be those three thingsthe US falling behind on Military theU.S having an equal on this will changethe game substantially today theindustry spends an average of just oneto four percent of its revenues oninternal r d by way of comparisonalphabet reinvested 15 percent of itsrevenues into r d in 2020. there's moreAI in a John Deere tractor than there isin any system that the U.S DOD isFielding until 2019 the United Statesnuclear Arsenal was still operating offof floppy disks okay now that we have ahandle on the problems what's thesolutionin China absolute power has beenconcentrated in the hands of one man XiJinping but not only does that runcounter to American values what'shappened to the United States defenseindustry over the last few decadesshould serve as a warning againstconcentrating power instead to rebootthe arsenal of democracy we should lookto the lessons of the 1950s and 1960s weshould harness the talents of thenation's best scientists and engineersin other words we need to look toSilicon Valley[Music]Decades of unquestioned U.S militarysuperiority were underpinned by anetwork of Defense contractors thatdesigned and manufactured best-in-classmilitary hardware but that model isabout to become obsolete becauseeverything about war the way it's foughtinitiated and even prevented fromhappening is changing to see glimpses ofthe future let's go to Ukraineeven before any of its soldiers marchedonto Ukrainian territory Russia launchedits Invasion with repeated DDOS attacksand a trojan horse malware protocolaimed at paralyzing Ukraine's commandand control structures both sides aremaking extensive use of commercialdrones to spot enemy combatants andimprove the performance of theirartillery the war in Ukraine is theperfect Showcase of what the nextgeneration of combat will look liketoday's big defense companies may notlike it but software is finally eatingthe battlefield the once clear linesbetween different terrains and differentbranches of the Armed Forces will becomeincreasingly blurry this is a future wecan't avoid China and Russian oradversarial nations are not waiting andhave in many ways been much moresuccessful at adopting commercialtechnology into their military processXi Jinping has publicly pledged to makeChina the world leader in AI technologyby the end of the decade and VladimirPutin once said resources[Music]thankfully there are companies thatunderstand the scale of the challengeahead of us and they're building thenext generation of software-enabledweaponsokay let's shift our Focus to NorthernPoland in late 2021. NATO forces knowingthat Russia's invasion of Ukraine isimminent are running a military exercisecalled project Artemis but they're notjust working with each other they'realso working with a Californian defensestartup named anderol anderol isn't atypical defense company and Palmer luckythe guy who started it isn't yourtypical defense company founder hethinks that to modernize the US militaryyou have to first modernize the U.Sdefense industry think about any greatTech entrepreneur people like Jeff BezosSteve Jobs Elon Musk Etc they all carrydistinct images of how the future couldlook and they have a deep drive to buildthe products that bring that future tolife that is really the reason that Istarted thinking about what a NextGeneration defense company would looklike what would it look like to build acompany they could take those brightpeople out of the advertising industryout of the search engine optimizationindustry out of the augmented realitymustache and Emoji industry and put themto work on things that were moreimportant but he also understands thatin order for that to happen the defenseindustry will have to change traditionaldefense contractors struggle withsoftware they struggle because theycan't compete with Silicon Valley forengineering talent but they alsostruggle because modern softwaredevelopment practices run totallycounter to how they operate the USSGerald R Ford cost almost five billiondollars to design and took eight yearsand 13 billion dollars to build that'shardware software on the other hand isdeveloped by shipping a minimum viableproduct as quickly as possible seeingwhere it fails and improving it to keepup with today's threats the U.S defenseindustry will have to move fasterluckily there's a model for how amodernized defense industry couldoperate every other industry in theworld most companies whether they makesoftware cars or Furniture invest theirown Capital into designing and buildingtheir products and they don't get paiduntil they sell a finished product outthere's actually a great example of acompany that quickly Engineers newproducts and sells them off the shelf togovernment Partners SpaceX and SpaceXspends billions of dollars of privatecapital on research and development andaccording to NASA's own analysis itdesigns Rockets three times cheaper thanNASA designing products this way canalso improve how the military spends itsmoney historically defense technologyprecedes one long detailed projectproposal at a time these proposals aredriven by Good Intentions efficient useof taxpayer money to meet military needsbut often many of the savings areactually an illusion because althoughthis process does a great job ofanswering the question of what the nextBattleship should look like it neverasks the question of whether a newbattleship is needed at all that's whyinstead of competing with the defenseprimes for the biggest contracts annualstarts by thinking about the problem themilitary should be trying to solve andthen goes away and develops it withoutbeing told to we're not saying Hey giveus a million this year a million thenext year a million the next year infive years we'll have something we cantest we're saying you know what we'rejust gonna spend 10 million dollars ofour own money we're going to prove toyou that this can be done in six monthsnot six years this helps it avoid one ofthe biggest pitfalls of Defenseprocurement while channeling theBrilliance of the people who solve hardproblems for a living scaling up thisapproach could drastically cutdevelopment times Apple puts out a newiPhone every year now I'm not sayingthat the iPhone is as complex as anaircraft carrier but I am saying thatthe U.S defense industry could be doingmuch more to study the world's biggestconsumer tech companies and learn somevaluable lessons about moderndevelopment and Manufacturing techniquesencouraging the greater adoption ofcommercial technology in the defenseindustry is also an ideal way tointroduce something that's been sorelymissing for decades real competition thewave of mergers and consolidations inthe wake of the Last Supper created anindustry where companies don't trulycompete with each other by lowering thebarriers to entry the U.S governmentcould tap into a huge source of newideas while actually restoringcompetition and putting downwardpressure on costs after years ofwillingly taking some of our biggestbattleships off the board anderol couldhold the secret to putting them back andregaining the upper hand in a dangerousworld but there needs to be hundreds ofAndrews competing hard with each otherin service of a shared goal protectingthe Western world and everything itstands for that's something we'reworking through right now it comes backto you how do they look at this so it'snot a cost but but it's a profit forthemNavy's aircraft andbut the wars of Tomorrow Will Be won bysoftware and Hardware working in PerfectHarmony that means the future willbelong to the Nations that Embraceemerging Technologies and Empower theirscientists and Engineers to create thenext generation of weapon systems we'reliving in the most unstable anddangerous geopolitical environment sincethe end of the Cold War the world is apowder keg one spark could set it alloff the best way to credibly deter waris through Superior technology butinstead of preparing for new threats theUS government took its pieces off theboard and told our defense industry itwas okay to stop innovating we no longerhave the luxury of time but by applyinglessons from Silicon Valley andembracing the potential of Founders andcompanies that break the mold the U.Smilitary can regain its Edge if you wantto learn more about the military originsof Silicon Valley then just watch thisvideo next thanks a lot[Music]