(Foundational) National Defense and Foreign Policy

By Carl Benedikt Frey July 31, 2026 – How does a country with such casual regard for the rule of law produce so much dynamism?…The answer is that the rule of law, in China …is not one thing. It has a liberal side—secure property rights, courts that constrain the state… It also has a regulatory side that can wall off competition… America used to be alive to this distinction. It is no longer…….CHINA’S DYNAMISM does not come from the absence of law. It comes from the sequence in which laws are enacted. The Communist Party allows firms to scale in regulatory gray zones, when a sector serves growth, employment or strategic competition….The pattern recurs: firms scale first; law and politics arrive later, often together…. Dynamism occurs when newcomers can innovate before lawyers—or regulators—arrive….…But every rule proposed today should be tested against a simple counterfactual: had it been on the books a decade ago, would the firm we are now regulating have ever been built? Read More