Editor’s Notes: In this episode of Think School, host Ganeshprasad Sridharan sits down with entrepreneur and author Balaji Srinivasan to discuss the potential decline of the “American Dream” and the significant geopolitical shift toward the East. Srinivasan explores how historical cycles of empires, the rise of digital technologies like Bitcoin, and the growing economic power of nations like India and China are reshaping the global order. The conversation provides a deep dive into why the 21st century may belong to Asian giants and how individuals and nations can navigate this volatile future. (April 20, 2026)
TRANSCRIPT:
Introduction
GANESHPRASAD SRIDHARAN: In 1976, a British general named John Clubbe published a study of 11 empires, from the Persians all the way to the British Empire. And he found that every single one of these empires lasted approximately 250 years, regardless of their geography, technology, or political systems.
Now, what’s interesting is that the United States was founded in 1776, and in 2026, it has been exactly 250 years. And as we all can see, America’s grip over the world has started shaking. In the last 2 months, Iran has destroyed American bases very easily, China has ignored Trump’s warning to cross the Strait of Hormuz, and Donald Trump has been acting like a kid who wants attention from the world.
And this points towards a very big geopolitical shift in the 21st century. So I sat down with a man who saw a global shift before it hit the headlines. Meet Balaji Srinivasan. He’s the author of The Network State and the founder of The Network School. Balaji has spent his entire career predicting the next big move in history, and today in this episode, Balaji breaks down why exactly is the American dream moving towards the East and why the next century belongs to Asian giants like India and China.
So if you want to know how this volatile geopolitical shift will change the future of our generation and present new opportunities, this episode will be a delight for you.
Setting the Agenda
GANESHPRASAD SRIDHARAN: So today I’m here to discuss a very interesting thesis that you’ve put out that I firmly believe in. I’m just trying to understand how is that possible.
BALAJI SRINIVASAN: Sure.
GANESHPRASAD SRIDHARAN: You’ve constantly spoken about the fall of America in the near future, and America has committed every sin possible to betray the trust of the world, unfortunately. But even then, United States controls the technology, military, and the currency of the world to a large extent. And what I’ve seen is that every time they commit a sin, they somehow get away with it. In fact, the world kind of supports them to get away with it.
For example, they printed $3.3 trillion since 2020. The dollar appreciated in value. They invaded Iraq for something absolutely absurd, and 40 nations cheered for America while they did so. And now they just got into Venezuela and nobody seems to be bothered. So what I’ve seen consistently is that America seems to betray the trust of the world, but somehow the dollar still gets powerful. They export inflation and the world cheers them on.
So I want to understand 3 things. Number 1, with so much leverage that United States has over technology, military, and currency, how is it going to fall? Number 2, if at all that happens, how are we positioned as individuals to take benefit or incur the loss because of that happening? And lastly, India as a country, how can it benefit from this massive geopolitical shift?
BALAJI SRINIVASAN: Sure.
GANESHPRASAD SRIDHARAN: That’s the agenda for today’s podcast.
The Rise and Zenith of American Power
BALAJI SRINIVASAN: The thing to understand is that I think on balance, from at least 1945 to 1991, the US was on balance a force for good, which is to say of the US and the USSR, if you looked at the countries that the US backed, West Germany had a better standard of living than East Germany. South Korea had a better standard of living than North Korea. Chile had a better standard of living than Cuba. And on down the list.
In general, it was a win-win relationship where when you had free markets and capitalism and the Western alignment, your society was better off. And that also gave you the strength to resist communism.
And what happened was, by degrees, after the end of the Cold War in 1991, when the US became — it was at that moment that Charles Krauthammer wrote an essay called “The Unipolar Moment.” And 1991 was a very important year. It was the year the Soviet Union ended. It was the year that the internet actually had legal commercial traffic — the NSF Acceptable Use Policy was repealed. It was the year that India liberalized because it had the balance of payments crisis and went towards capitalism. And it was also the year that Gulf War I happened, in 1990 and 1991.
And basically the huge victory in Gulf War I had the Soviet Union basically just standing back from the whole thing. And the US at the time under George H.W. Bush showed that it was just a completely dominant military. The desert was completely different than the jungles of Vietnam. This sort of erased a decade of malaise. And it was like, wow, the US military is just this global hyperpower. Everybody had underestimated it.
And then over the ’90s in general, America had a vacation from history. And at its zenith, the American Empire had not just beaten and flipped Germany and Japan. It had the Russians, the Chinese, the Iranians, Indians — all sending their elite, in many cases, to American schools to be educated. In the ’90s, to Harvard, to MIT, and so on and so forth. This was a level of dominance that’s basically unparalleled in history. Not even the Roman Empire at its peak, not the British Empire at its peak.
If you’ve ever done a business deal of any kind, to get 193 investors to sign a document is quite challenging. That’s just a business deal. Now imagine it’s 193 countries. That is the scale of diplomatic accomplishment of the American State Department over the 20th century. So at its zenith, the American left and the American right built the greatest empire of all time.
The thing about all of this, once you kind of understand this broad sweep of history — there’s a post I recently wrote called “Zeihan is Wrong, China is Strong.”
GANESHPRASAD SRIDHARAN: Okay.
Peter Zihan’s Thesis and Where It Goes Wrong
BALAJI SRINIVASAN: Essentially, this post is about this guy Peter Zeihan, who writes interesting books. I think the thrust of what he’s saying is wrong, but I think the areas that he brings up for discussion are interesting. For years, he’s essentially been saying China’s going to collapse and the US can blockade the Straits of Malacca. The US has a blue-water navy and China doesn’t. China’s weak. China’s importing all of its energy. China’s fertility crash — its population is going to zero. And what’s going to happen is the US is going to withdraw from the sea lanes. The world is going to collapse into chaos and anarchy, but we are energy independent and we’re going to be at home and we don’t need to maintain the order of the sea lanes anymore because the Cold War is over.
Now, I do agree with some of this, which is to say that the US is going to retreat from the world, that the US did guard the sea lanes, and that these concepts are important. Where I disagree is that this pullback of America is voluntary. Why would America pull back if it didn’t have to pull back?
And so now this brings us to the American Empire. I just gave a review of the things leading into 1991 and then the period from 1991 to September 10th, 2001. And during this period in America, it was a vacation from history. It was Seinfeld and Friends. It was music and movies and sports.
Growing up in the ’90s, as I did in America, the least interesting thing in the world was politics. Nobody cared about politics. It was like talking about the bus schedule. It would be something where maybe there’s somebody who’s really interested in stamp collecting, butterflies — that kind of person would be interested in politics. Nobody else really cared. It did not matter to the average person. It was just literally music, movies, sports, recreation, entertainment, having fun, building a business in the ’90s with the dot-coms and so on.
And the biggest political issue was like Monica Lewinsky in 1998 or something like that. Do you know what that is? It’s a sex scandal with a US president.
GANESHPRASAD SRIDHARAN: Okay.
BALAJI SRINIVASAN: Okay.
GANESHPRASAD SRIDHARAN: Oh yeah.
The Natural State of the World Economy
BALAJI SRINIVASAN: It was simply not something where people cared that much. The main reason I say all this is American dominance of the level that Krauthammer wrote about in that essay, “The Unipolar Moment,” is actually extremely unusual in history and even unusual for America. It’s basically something which is a 1950 to 1991, arguably to 2001, kind of thing. It’s an interregnum where all these great civilizations — India, China, Russia, Iran, Germany, Japan — they’re not meant to be this weak. Especially China, especially India. They were not this weak.
If you go back and look at historical times, for most of human history, recorded history in the East, these were gigastates — megastates with millions and millions of people. Why could they support millions of people? Because they had huge complex economies. That’s why Marco Polo sought out China. That’s why Columbus risked his life to get to India. This is why there was rough military economic parity across the Eurasian continent, where the Huns and Mongols could invade Europe, why the Arabs could take Andalusia, why the Christians had to do the Crusades. It was actually a military conflict — it wasn’t just a total layup to conquer everything.
There’s a graph that, if you go to that post “Zeihan is Wrong, China is Strong,” actually shows that the world economy was based in Eurasia. China was under communism, India socialist, Japan was nuked — not nuked, but under communism. Eastern Europe was blown to smithereens by World War II. So only the US and Western Europe had any industrial base. That’s why the rest of the world was third world. It wasn’t like they were third world for all of history.
The Qing Dynasty actually was a really big thing in China for a long time. Other cultures were not just total barbarians on their hands and knees. This is the mentality that many Americans have, many Westerners have — that these third world countries were always third world countries and that the West just got ahead of everybody. That’s actually not the case. They kind of destroyed themselves with war and communism. And many of these things were imported from the West, by the way. Communism was not indigenous to China. Socialism was not indigenous to India. These were alien ideologies that were brought in — not what the historical operating system was of those various cultures.
The New World Order: BRICS vs. the West
BALAJI SRINIVASAN: And so now, if you take the top 4 economies by GDP PPP, China’s number 1, USA number 2, India number 3, Russia is actually number 4 by PPP — purchasing power parity. And that’s the World Bank’s numbers, not my numbers.
And so now the world economy has rocketed back out so that it’s no longer majority Western anymore. This is actually the natural state of things. However, from peak America, this feels like a huge decline.
So now this is the moment that we find ourselves at, where by a number of numerical metrics — if you look at the G7 versus BRICS, if you look at where manufacturing is happening — China in particular is number one in steel, number one in ships, number one in cars and electric cars, number one in concrete and nuclear plants and a million other categories.
But India, by the way, is a distant but real number two in many of these things. India is number two in concrete globally. India is number two in nuclear reactors under construction. You saw the new thorium thing? On many graphs, China’s here, but India is here. It’s a distant but real number two. India is going to flip the EU in electricity production. The EU has a smaller population, but still India is increasing in electricity production.
The Dollar as a Global Tax System
BALAJI SRINIVASAN: What that means is that the Westerner, or the American — especially the Americans — is experiencing two things at the same time. When their relative power is declining, they feel more economically strained, but they also are less able to coerce other groups which have now risen. So they’re feeling more powerless at home and more powerless abroad, which is causing them to flex whatever power they do have more and more and more aggressively.
See, if you’re at this totally dominant posture, you can afford to be generous because who cares? Give some foreign aid to these third world beggars. This is like the Mother Teresa kind of attitude, right? And in general, I know there are some people like Mother Teresa, but I always think that kind of thing looks at Indians as pawns, not peers — like a sympathy object.
For example, India did something a few years ago and Britain threatened to cut off foreign aid. I forget exactly what it was, but it threatened to do that. So clearly that was something where they’re like, “You owe us, we have control over you.” And India laughed at that time. They’re like, “Wow, that foreign aid is like one Series B round or something. We’ve grown up enough.” But it was still a colonial mindset where they thought of themselves as being that dominant. That wasn’t the case anymore.
To be clear, I have nothing against the British and so on and so forth. I’m just saying that one exception shows that there’s still a mentality that if the West flexes, it can dominate. Europe has mostly given that up now — they recognize they’re not doing that anymore, but that’s because they’ve had decades to adapt to it. America has not given that up yet, or it’s only finding out the limits of its power abroad at this point.
So you’re now coming back to the original thing you mentioned — the currency, the military, technology. Taking those in order, the American currency, the US dollar, is basically the way the US monetizes global empire. Millions of people are in countries that hold US treasuries, or that have their leaders actually educated in America. Just the Kennedy School of Government alone — if you look at the alumni, they’re heads of state in many countries. Imagine if your head of state had trained at Tsinghua in China. That would actually be exceptional. But for them to have trained at Harvard is considered a credential. That’s the scale and scope of the American government — that it would literally train your leaders.
Many countries, from South Africa to Iraq, had Americans write their constitution. From Japan to Germany. So American political influence, legal influence is absolutely global. The simplest is soft power. They just thought of it as good. They had learned economics, and they’d learned, for example, that holding a US Treasury — you know what it’s called? The “risk-free rate of return.”
GANESHPRASAD SRIDHARAN: Oh.
BALAJI SRINIVASAN: I mean, come on. Is it going to be risk-free? No, it’s absolutely not. In fact, if you held Treasuries for the last few years — especially if you bought Treasuries at low rates and then rates went up — you got completely destroyed.
GANESHPRASAD SRIDHARAN: Yeah.
BALAJI SRINIVASAN: You can see all these McDonald’s everywhere, all these Starbucks everywhere. That’s within the American economic zone. They’re holding US Treasuries, they’re transacting in the US dollar. And what the US does is it prints money. Every time — let’s say there’s $10 trillion outstanding and it prints a trillion — it’s now diluted down everybody silently by about 10%. And all of that is now money that the US government can spend.
GANESHPRASAD SRIDHARAN: Can you explain that with an example?
BALAJI SRINIVASAN: Sure. First, let’s understand why inflation is taxation. If a government wants to get money out of its people, it can pass a tax, which is visible, and then you have to wire money to them — you can see that. People grumble. Even a 1% tax, they’ll grumble. Or what it could do is just print 1% of the money supply. In your bank account, you didn’t see anything change. You’re going about your business every day. But it’s as if the government just counterfeited a bunch of bills and they just start spending them in the economy. And later what you find is prices have gone up by about 1%.
But it’s so subtle and so invisible that, as Milton Friedman put it, “Inflation is taxation without legislation.” If a state can print the money and you can’t see that they printed money — see, what you see in your bank is how many rupees you have, not the percentage of rupees you have of the total balance.
GANESHPRASAD SRIDHARAN: Yeah.
BALAJI SRINIVASAN: Now, dollar inflation is global taxation because the US government, when it prints, is diluting down not just the 330 million Americans, but every treasury holder globally and every holder of US-denominated assets. That means their effective tax base is billions of people — all the Europeans, Australians, Japanese, Koreans, many Indians, and so on and so forth, mainly the Gulf States.
And then you also have something else, which is the petrodollar. The US military, for many years — once it went off the gold standard — it used to be that you could redeem gold one for one for a dollar. What instead happened was oil. People sometimes call it “liquid gold” because of how important it is. Energy is upstream of everything.
For 50 years, the US military had a deal with Saudi Arabia and the Gulf states that the US military would defend them against any attack and guard the sea lanes. In return, oil had to be bought in dollars. And since you constantly need oil to do everything — not just to drive a car, but to drive a truck, to bring food to your store, to operate many kinds of machinery, for lubricants — oil is upstream of so much. This meant that every day you had to go and get more dollars. It was like another tax on the whole world. You have to buy dollars. You weren’t simply inflated — that was one tax. But you also had to spend on oil and you’d buy dollars that way, creating constant demand for dollars.
So this is a very powerful system because it seems architected on critical things.
Centralization Behind the Facade of Decentralization
GANESHPRASAD SRIDHARAN: This is centralization. I had some data and it says the complete opposite — because on the outside it looks like decentralization, but on the back end, the US practically owns everything. For example, in the SWIFT network, $10 trillion of transactions happen every day. 80% of oil is traded using US dollars. And even if you look at semiconductors, 3 companies actually dominate EDA, and all 3 companies are American. NVIDIA has 90% market share. And while ASML was trying to give its services to China, the US banned them from doing business with China because they had access to the CYMER light source, which was essential to build the ASML machine.
BALAJI SRINIVASAN: Yeah, but if you look at all these things on a trajectory, you will see US dominance in decline. Let’s take that ASML example. ASML already has relaxed some of these things — you can find that from either earlier this year or last year, number one. Number two, China itself is actually quickly going up the stack. They have, I think, two 7-nanometer fabs — the RedStack. Yes, that’s right.
But even with EDA, NVIDIA itself is saying — Jensen Huang has been pushing because he knows that if China is forced to make its own, they will make their own. Why? Because if you look at who’s in hardware — if you look at NVIDIA, TSMC, Intel, and AMD — all the CEOs happen to be of Chinese diaspora descent. And it’s only a fraction of the Chinese talent that’s there. You look at AI, a lot of the talent is there too. So if you challenge China to get good at quantum mechanics and semiconductors, yes, they can do it. It’s hard, but it’s not that hard for them.
GANESHPRASAD SRIDHARAN: It’s like forcing the Russians to make the nuclear bomb.
BALAJI SRINIVASAN: Well, right. Almost like that. It’s like making Italians compete in a pizza-making contest. You’re challenging the Chinese to a test of national greatness on quantum mechanics and semiconductors in order to also make a lot of money. That’s right down their wheelhouse. If instead it was like arguing in English — that’s not in their wheelhouse. That’s actually harder. The Chinese are great at many things, but that’s not their core competency. Indians are good at arguing in English — that’s a different thing.
So that’s one example, the ASML. I don’t think that’s going to hold up for very long. The entire American mentality was also about playing keepaway — “Oh hey, we’ve got something, we’re going to keep it away from you,” as opposed to “Let’s keep ascending and keep building more.” The entire thought was, “You’ll never be able to catch this, haha.”
GANESHPRASAD SRIDHARAN: So this is like operating out of insecurity.
BALAJI SRINIVASAN: Yes, exactly. It’s essentially saying, “We will try to hold this stuff back from you and try to freeze you in place,” which is a total underestimation of the other guy’s capacity.
China and the Internet: The Two Forces Disrupting American Dominance
So let’s take some of your other examples. SWIFT — well, obviously SWIFT has two huge competitors, which are A, cryptocurrency, and B, the Chinese yuan. Really, one macro framework is: after America, it’s China and the internet. Those are the two major forces. China is everything physical, the internet is everything digital. This is an oversimplification, but not by much. You could think of it as China inherits the military and the manufacturing, the internet inherits the media and the money.
If you look at the military — what’s the US military being disrupted by? The internet, which is drones, cyber, satellite photos, social media. The US military has lost control of the narrative. It’s no longer just saying, “They’re the bad guys, we’re the good guys, we’re blowing them up.” Everything they’re doing is getting scrutinized in real time on the internet. And China is providing — whether it’s drones, whether it’s hardware — support to the Russians, the Iranians, and so on and so forth. So the US currency is being disrupted by the internet and China. The US military is being disrupted by the internet and China.
The 250-Year Empire Cycle
GANESHPRASAD SRIDHARAN: I actually found a framework to put everything that you said in place. In 1976, a British general named John Glubb — G-L-U-B-B — published a book where he actually studied 11 empires. And there’s this strange coincidence where he mentions that every single one of these empires lasted more or less 250 years.
BALAJI SRINIVASAN: Yeah. And this is right on the dot. Yes.
GANESHPRASAD SRIDHARAN: America was founded in 1776. And in 2026 it’s been 250 years. He says that these empires go through 6 stages: pioneers, conquest, commerce, affluence, intellect, and finally decadence. And he also mentions that during the decadence phase, politics takes a back step, and sports stars and movie stars actually have a large influence over the population — which is currently happening in the US again. So is this happening?
BALAJI SRINIVASAN: I wouldn’t say politics has taken a back foot — certainly politics is in the foreground, everybody’s politically obsessed. But it’s absolutely true that sports — I mean, Trump is a reality TV show.
Bitcoin, Digital Gold, and the Decline of Western Dominance
GANESHPRASAD SRIDHARAN: But what have sports stars and actors got to do with the fall of an empire?
BALAJI SRINIVASAN: Because they are famous for entertainment rather than accomplishment.
GANESHPRASAD SRIDHARAN: Okay.
BALAJI SRINIVASAN: Right?
GANESHPRASAD SRIDHARAN: But isn’t that considered to be an accomplishment today?
BALAJI SRINIVASAN: It is, but there are different kinds of accomplishment. And simply being famous doesn’t mean that you’re good at managing scarce resources. What does it mean to be a politician or a head of state or a head of a company, head of a network? You’re allocating scarce resources — a very numerical thing, right? I have this many bushels of grain and this many barrels of oil. How do I sell this and buy that? Who do I hire? Who do I fire? What do we build? The allocation of scarce resources is very different than simply being good looking. Very different skills.
GANESHPRASAD SRIDHARAN: Yeah.
BALAJI SRINIVASAN: And so if you’re selecting the latter on the basis of the former — to be clear, I will say this — charisma does help in allocating resources because it’s easier to get people to do things. Part of it is a sales job. The reason that it happens at all, that some person who’s put in charge of a large number of resources can manage them, why are they even put in charge in the first place, is that they’re good at one part of it, which is the charisma part. They’re not good at the other part, which is the calculation part.
Elon is actually rare in that he’s pretty good at both. There are some who are really good at both, but it’s hard. It’s rare. I’d say among tech CEOs, they have to have both the charisma and the calculation because they have to be able to do the pitch, but they also have to get the code right.
The Role of Bitcoin as a Currency
GANESHPRASAD SRIDHARAN: So you mentioned Bitcoin and cryptocurrency. I’ve spoken to a lot of people about this thesis and I have some counterarguments. The fundamental job of a currency is to be stable, right? That’s what instills trust in a currency, isn’t it? If a currency keeps on fluctuating—
BALAJI SRINIVASAN: Well, there are at least 3 parts of a currency, arguably 4. Which are medium of exchange, store of value, unit of account, and system of control.
GANESHPRASAD SRIDHARAN: Okay — medium of exchange, store of value, unit of account, and system of control.
BALAJI SRINIVASAN: Medium of exchange just means I can easily send it to you. Store of value means that it’s valuable today and it’s valuable tomorrow and it’s valuable sometime from now. Unit of account means I can price things in it and they’re stable prices. And finally, system of control is Andreas’s thing, which is somebody can turn it off, turn it on, or what have you — or it’s independent of that.
GANESHPRASAD SRIDHARAN: So I read — and correct me if I’m wrong — that in Bitcoin there can only be 6 to 7 transactions per second. Is that correct?
BALAJI SRINIVASAN: So if everybody were blasting transactions on-chain, yes, you could only do on that order.
GANESHPRASAD SRIDHARAN: Bitcoin has dropped by 76% from 2021. That’s like a steep jump, isn’t it?
BALAJI SRINIVASAN: My view on what Bitcoin is going forward is it’s going to become — it has become — provable global institutional collateral.
GANESHPRASAD SRIDHARAN: Okay.
BALAJI SRINIVASAN: So that’s to say there’s a role for cash, gold, Bitcoin — which is digital gold — and then Zcash, which is digital cash.
GANESHPRASAD SRIDHARAN: But when it comes to Bitcoin, for example, Elon Musk once announced that Tesla will now collect payments through Bitcoin, right? Obviously the Bitcoin value shot up, and after that he said we won’t be taking Bitcoins anymore, and then the value went down, right? In fact, Tesla made more money by selling Bitcoin than they actually made by selling cars for one quarter.
So what it’s essentially telling me is that when it comes to a dollar, a billionaire cannot hack the price of a dollar unless the Feds decide to do it. But when it comes to Bitcoin, a billionaire can suddenly decide to instill trust because of his endorsement, change people’s behavior, instill trust, and then destroy that trust and make a billion dollars himself.
BALAJI SRINIVASAN: I don’t think that Elon did that in a negative way. What happens is Bitcoin payments are hard to handle. One person could do that for anything, right? Anybody can post about a stock or something like that and they can cause it to skyrocket if they’ve got a large following. Yeah, they can do that.
GANESHPRASAD SRIDHARAN: But they can’t do it for a dollar — not so easily.
BALAJI SRINIVASAN: Sure, but the Fed can do it, right? Actually with a dollar, it is true that it’s got a different failure mode. For example, if you’ve got a stable society and you can hold dollars and you can transact, why would you need gold? But if you’re in Venezuela and you held the local currency, that currency is destroyed. You wish you had some gold.
However, the dollar system is having these issues going down. For example, there are entire banks that just vanish and all your dollars in them vanish, right? That happened in 2023, and the Fed had to bail out the entire system. So that’s an example of the failure mode of a dollar — it’s worse because there’s risk without you thinking it has risk. All these people who hold Treasuries think it’s a risk-free rate of reward, but it’s not. It’s actually systemic risk.
So it’s worse to have something where the risk is a cliff drop at the end, as opposed to taking some downs and ups all the way through. California was considered the safest place ever to incorporate for a tech company. And now Zuck, Larry Page, Sergey Brin, Peter Thiel, Elon Musk have all left California. It’s no longer a safe place because they’re trying to take all your money. So these safe jurisdictions of Delaware and California have already shown that they’re no longer safe. You just have to extend that to the United States of America. That’s not going to be a safe jurisdiction.
Bitcoin as Digital Gold
GANESHPRASAD SRIDHARAN: Got it. So can you please help me understand how Bitcoin is associated with digital gold? Because I didn’t understand that part.
BALAJI SRINIVASAN: Sure. It’s just defined as such.
GANESHPRASAD SRIDHARAN: Okay, but how is it defined as such?
BALAJI SRINIVASAN: You want something that has gold-like properties but that’s digital. So first, gold has a close to finite supply. There’s only so much gold on the planet. It’s hard to mine more gold. Bitcoin has a provably finite supply, and mining more Bitcoin is also hard. It requires computational resources, just like gold mining requires a lot of energy and pickaxes and so on.
Number 2, gold can be verified. You can put it through a bunch of chemical tests and physical tests. Similarly, Bitcoin can be verified. You can put it through a bunch of mathematical tests and see whether it’s real or not.
So put those things together — it’s scarce, it’s mineable but with difficulty, it’s verifiable. And it’s also something that disciplines states by being this scarce asset that they can’t print.
GANESHPRASAD SRIDHARAN: So when do you think this will get normalized?
The Internet, China, and the Flanking of the Dollar
BALAJI SRINIVASAN: I think that the internet and China are both so large. Crypto is the internet’s currency. China and the internet are both actually flanking the dollar in a way that is happening but not visible to people.
For example, Stripe is already 1.6% of global GDP. And that’s an enormous figure. And they’re going to be doing a ton on stablecoins to move over to that. Is that the dollar? I would argue it’s much more crypto and the internet than it is the dollar. But you can argue it’s like a lifeline for the dollar.
I think unless you contextualize every American figure with the China and internet figures, or unless you put it on a time series where you can see — often, for example, people will show that the US is gaining on its allies, which basically means they just think of it as gaining on Europe and Japan. That’s just sort of draining resources from them, but it’s losing ground against Russia, China, actually Iran, and actually the internet.
What is America minus the internet? If you ask, is the internet American? Another question is, what is America minus the internet? Well, there are no data centers, there are no tech companies. You knock out the Magnificent Seven, you knock out AI, you knock out Elon, you knock out social media, you knock out almost everything that seems to be ahead. So the only spot of light — it’s not like American manufacturing is doing well. It’s not like the American streets are doing well. American cities aren’t in great shape. In fact, they’re in terrible shape, with the drug addiction and mentally ill people on the streets.
GANESHPRASAD SRIDHARAN: But Russia without internet is great because they have everything.
Miscalibration and the Rise of Non-Western Countries
BALAJI SRINIVASAN: Obviously it’s great, but it’s vastly improved over the ’90s. People get really mad when they see photos or videos of non-Western countries and always say, “Are you a spy? Why are you a Russian spy? You’re posting videos of Moscow,” or videos of China, or videos of Iran. But those places have improved a lot in the last 30 years.
I mentioned to one of my friends that one of the biggest issues is there have not been US media depictions of wealthy non-Western countries. There are like one or two exceptions you can argue. Japan is grandfathered in. You have Squid Game or whatever with Korea. You have Crazy Rich Asians, but those are the exceptions, not the rule. And plus Korea and Singapore are somewhat — very — Western-aligned. South Korea has a military base there.
Besides that though, the conceptualization is that everything else is the third world. They’re still stuck in an ’80s, ’90s mindset — in the same way the same movie stars who are on screen, it’s still Tom Cruise, it’s still Trump. It’s still this ’80s kind of rerun type thing. And with AI, they’ll keep rerunning them forever.
What that means is they are not calibrated. Just to see one video of what Tehran is on TikTok is a total recalibration. Have you ever seen Tehran on TikTok? Go and look at Tehran on TikTok pre-2022 so you know it’s not AI. You’ll say, “Wow, this is so much more modern.” People expect it to be — if you ask them to draw it on paper, they’ll say it’s like some guys in a cave. They think it’s Osama bin Laden. It’s not that at all. It’s a modern industrialized country.
So because of that, they’re totally miscalibrated. But why don’t they see these media depictions? Because Americans are doing poorly, or they feel they’re in decline. Seeing others do well when you’re doing poorly — it’ll get rejected at the box office. They’ll get mad about it. So they don’t want to see it. And when they see it, they get mad.
So over your lifetime, you’ve seen India improve a lot. I’d love to hear your view on this. In the ’80s and ’90s, when I went back to India, it was truly a third world country. Cows on the streets. Only one kind of car — an Ambassador — and you’d be lucky if it had air conditioning. That was an upper class kind of thing. You had really, really extreme poverty. People would be clawing at your window sometimes.
GANESHPRASAD SRIDHARAN: Yeah.
India’s Rise and the Indian Diaspora
BALAJI SRINIVASAN: It was just a very, very, very poor country, right? And even the most exceptional elite kind of thing, it was not very nice at all, right? And forget about internet or anything like that.
So what happened gradually and then suddenly is I came back and there was a long space of time. And what I realized is Indians in India, because it happens gradually, they often took it for granted, not completely, but somewhat for granted. Every day is better than the last in general. Sometimes it’s two steps forward, one step back, but it’s gradual, right?
And conversely, Americans who had never been back to India, or they wouldn’t even consider it “back” — they’d never been to India, or they’d been once and they’re like, “Ugh, this is horrible,” or whatever. They never come back, right?
So only when you took a time lapse did you appreciate it — you saw the highways getting built out and the airports are so modern. And now I’ve got 5G internet and wow, I can get a coffee and wow, I’ve got something that’s a lot like Uber and I’ve got something that’s a lot like delivery, and there’s tech companies here. And suddenly now you can live, I would say, a Western life.
I would rather, gun to my head, rather live in Bangalore than SF because it’s just like — by the way, it’s safer, right? There’s less crazy people. There’s no homeless crack addicts and meth addicts on the street, right? And the society broadly is on the rise, right?
Even given its difficulties, India today is in some ways — India and China today, in different ways, are more similar to 1950s America than America is, right? America is more similar to 1950s India or China, like on the verge of partition or civil war. But that spirit is something which you saw for the last 28 years. I don’t know — what is your view on that? Do you feel India has improved a lot over your lifetime?
GANESHPRASAD SRIDHARAN: So today, India is by far one of the best places to stay.
BALAJI SRINIVASAN: Yeah.
GANESHPRASAD SRIDHARAN: And when I’m in India, I keep complaining about traffic, but that’s the only thing that I have to complain about.
BALAJI SRINIVASAN: It’s not bad. Yeah, I prefer Bangalore to San Francisco, no question. Go ahead.
GANESHPRASAD SRIDHARAN: So today everything in India is better. Like food in India — you can get Italian food in India, you can get Mexican food in India. Yeah, you can get everything in India.
BALAJI SRINIVASAN: Yes.
GANESHPRASAD SRIDHARAN: In fact, if you look at Indian restaurants, they have so much culture. In fact, they can very well mimic Western culture in India better than the Western cafes.
BALAJI SRINIVASAN: Yes.
GANESHPRASAD SRIDHARAN: There’s so much hospitality which makes you feel like home. And when my American friends came back to India, they were just mind blown by Quick Commerce.
BALAJI SRINIVASAN: Yes.
GANESHPRASAD SRIDHARAN: That you could literally get anything in 10 minutes.
BALAJI SRINIVASAN: In some ways it’s actually better.
GANESHPRASAD SRIDHARAN: Yeah. They were just mind blown by it. They were like, “Dude, you can get a Diet Coke in 10 minutes?”
BALAJI SRINIVASAN: Yes.
GANESHPRASAD SRIDHARAN: I was like, “Yeah, you can get it in 10 minutes. Why is it surprising?”
BALAJI SRINIVASAN: Right, right.
GANESHPRASAD SRIDHARAN: And they were like, “Dude, we have to tip the Amazon delivery boy all the time, right, for literally doing his own job, right? So that’s frustrating.”
And if you look at Indian infrastructure, because it is in the process of being developed, it’s very painful for the urban citizens. But then it’s painful in a good way. It’s like feeling the soreness while going to the gym, right. You can feel it, which means something is being done. The pace at which we are moving is absolutely crazy, because when you look at the Bengaluru airport, it’s just mind-blowing.
BALAJI SRINIVASAN: It’s good.
GANESHPRASAD SRIDHARAN: It’s a work of art.
BALAJI SRINIVASAN: It’s a work of art, yes.
GANESHPRASAD SRIDHARAN: So the kind of—
BALAJI SRINIVASAN: People don’t believe me. I put these videos up there and they’re like, “That’s not real, that’s an exception.” And one thing is India is like California in reverse. You know why? In India, everything old is a shantytown, but everything new is an Apple Store. In California, everything old is some beautiful, mission-style building. But everything new is a homeless encampment.
GANESHPRASAD SRIDHARAN: The only risk we have is that because of the gap between the rich and the poor, I’m just scared that the billion people who are right now at the bottom of the pyramid may not prosper as much as the people at the top of the pyramid. And that’s usually the case everywhere.
But the second thing that I fear is that we are not investing a lot into our education and healthcare, which may then shake our foundations. And that is bad.
AI, Energy, and India’s Future
BALAJI SRINIVASAN: AI for education is going to be a big thing. I think Indians are going to be better at retraining for this new world, this internet-first world, because they don’t have the huge capital costs of all these American degrees, right? So the retraining will be way easier for this internet-first, AI-first world.
Similarly on healthcare, there’s going to be a revolution in biotech that is now being unlocked by the internet — not just the sequenced genome, not just all the folded proteins, but by GLP-1s and things of this nature. And I think Indian health is going to radically improve over the years to come, right?
My view is I’m moderately bullish on India and extremely bullish on Indians.
GANESHPRASAD SRIDHARAN: Can you explain?
BALAJI SRINIVASAN: Yeah, so China’s a state, but India is a network, right? So China — the Chinese diaspora does quite well, but the Chinese state does way better than that, right? Like, roughly speaking, you’d say the Chinese diaspora is like a 7, and the Chinese state is like a 10. It’s like just number 1 in all these different numbers.
GANESHPRASAD SRIDHARAN: In India, it’s the opposite.
BALAJI SRINIVASAN: In India, it’s the opposite, right? So the Indian state is doing phenomenally well. Maybe not everybody agrees with me on this, but I do think on balance, Prime Minister Modi is the greatest prime minister in Indian history. So many metrics up and to the right — you’ve seen GDP, the thorium reactor, all kinds of things, right. Net-net, the track record is really, really impressive — infrastructure build-out, all this kind of stuff.
And so even given that, let’s say India is a 7 on a 10 — certainly in terms of improvement level, it’s like number 1 GDP growth in the world and so forth. But the Indian diaspora is like a 10, right? It’s doing so, so, so well. Unmatched, really, right now.
The Iran War and the Shifting Global Defense Calculus
With this Iran war, what was suddenly revealed — and arguably with Ukraine, but certainly with this Iran war — every country that had a US military base, the Gulf Coast states learned the following things all at once.
First, those bases are now technologically obsolete. Recently, due to advances in electronics and targeting and AI and so on, what the Iranians have — they have missiles that can fire from 1,000 kilometers away and put through your window like a sniper shot from 1,000 kilometers away.
So the point being that these Iranian missiles have completely changed the defense calculus for everybody because: A, they can hit from afar. B, everything above ground is not safe. C, the American interceptors are too expensive and the Iranians can exhaust them. D, all American military bases have been blown up in the Middle East — this is what the New York Times actually confirmed, right?
So the Americans actually had to ship THAADs from South Korea on an emergency basis to the Middle East, because the Iranians did so much damage to such large swaths with GPS. They knew where the things were.
So anybody who has a US military base realizes that, “Oh man, they’re a pawn for the US military.” The US doesn’t care about them. They may mouth some slogans, but Americans care about the Gulf States about as much as they care about Ukraine, about as much as they care about Taiwan — which is to say they don’t care. They care about Ukraine as a weapon against Russia, the Gulf States as a weapon against Iran, and Taiwan as a weapon against China, right? And maybe South Korea and Japan as well against China and North Korea, right? And just like they fund Pakistan, unfortunately, against India, right?
Okay, so that’s a very cynical view, but it’s a true view, right? And so that means any country that has a US military base is suddenly realizing a bunch of things at the same time.
GANESHPRASAD SRIDHARAN: All of this happens. How is this going to affect the Indian economy and what’s our call to action?
India’s Strategic Path Forward
BALAJI SRINIVASAN: My view is what Indians are good at — our culture and history as Indians, Hindus, or what have you, obviously not all Indians are Hindu and so on and so forth — India should basically embrace the tradition of nonviolence, tolerance, diplomacy, win-win relationships. It should play to win and help others win. It should not be martially aggressive.
Yes, if Pakistan does something, if there’s some terrorist thing, absolutely self-defense. But notice how the Prime Minister wrapped up the war as quickly as possible, right? Did what was necessary to kind of show deterrence and wrapped it up as quickly as possible because war is bad for business, right? And then separately from that, he was able to sign trade deals from Canada to China, from Europe to Russia, right.
It should also be as independent as possible domestically. So the thorium thing is really big, right?
GANESHPRASAD SRIDHARAN: Can you tell me more about that, sir?
BALAJI SRINIVASAN: So this is something that the Prime Minister tweeted the other day. This is Homi Bhabha’s long-term plan. India has the world’s largest thorium reserves, and it’s got a breeder reactor now that actually can generate more fuel than it takes in. And I think only Russia is the other one that has this technology.
And it just means that the golden age of Indian nuclear development and cheap electricity is upstream of everything else. It’s just rolling out tons and tons and tons of nuclear reactors across India. And that means — forget brownouts, you’ve got AC for everything, right? You’ve got electric cars. Going very hard on this kind of stuff, becoming energy independent — that’s upstream of everything. That alone improves your standard of living because then you can power the robots, you can power the drones, power everything else, right?
At an individual level — internet, internet, internet. And also calibrate on China, right. Understand how far ahead China is. And there’s a lot that one can learn from, frankly, how China does manufacturing. India is now number 2 on smartphones, right? India’s number 2 on cement. India’s number 2 in nuclear reactors. India’s number 2 in a lot of things.
And you can learn from what China does well, recognizing that India will probably never catch China in the physical world. But if China plays the world’s best home game, Indians play a very strong away game — arguably the world’s best away game, just in terms of where this century, at least — I’m not saying last century, I don’t know about next century — but this century, that’s a complementary thing.
Closing Thoughts and Recommendations
GANESHPRASAD SRIDHARAN: That’s amazing. Thank you so much, sir. I had so many insights from this. I’m just finding it hard to comprehend at this point. But this was amazing, sir.
And I want to say this on camera as well — when I spoke to my friends about meeting Balaji sir, they told me that Balaji makes some absurd predictions. But the thing about Balaji is that most of what he’s saying will come true, and it most likely will. So thank you so much. I’m so happy that the kind of geopolitical case studies we’ve posted, they’re perfectly in line with whatever you’ve mentioned. So at least I’m happy that we’ve been posting—
BALAJI SRINIVASAN: Well, good stuff. Oh, one other thing I will say — two recommendations for Indians, okay? Non-obvious recommendations. First is, if you’re a member of the diaspora, get your OCI, okay? The second thing — I mentioned Zcash, but go to zodl.com and download that app. That’s like a Zcash digital wallet. And that I think is going to be pretty important because you want totally private cash as a complement to the total surveillance of AI. And last is come and visit NS.com, which is where you are now, Network School.
GANESHPRASAD SRIDHARAN: It’s amazing.
BALAJI SRINIVASAN: Right? And basically I think we built the Startup Society for not just Indians, but really the internet in general. And so you just come and visit and check it out.
GANESHPRASAD SRIDHARAN: And tell me about the craziness of your idea in comparison to going to Mars.
BALAJI SRINIVASAN: Oh yeah, sure, sure.
Building a New Country: The Network State Vision
GANESHPRASAD SRIDHARAN: By the way, Balaji Srinivasan is basically building a country. And I said, so that’s a crazy idea. And he said—
BALAJI SRINIVASAN: Yeah, what I said was, so Elon wants to go to Mars and Bryan Johnson wants to live forever and Sam Altman wants to create a machine superintelligence. And I just want to start a new country. And that’s the boring enterprise SaaS of crazy tech ideas.
And to be clear, by the way, not start a new country in Malaysia. Here we’re just doing — we’re doing here with Network School. Network School is to Network State as Chinatown is to China. So it’s like a scale model that just shows cool things and so on and so forth. There’s absolutely no ambitions of sovereignty whatsoever locally in Malaysia. Okay? We’re just a guest in Malaysia. We’re building stuff here and so on. We’re strengthening the local economy, all that stuff.
At some point, when we have enough people and capital, we may negotiate with some other government somewhere else in the world — a peninsula or a special economic zone or something along those lines, and we have a treaty and an MOU, and we might be able to go and do that. And we gradually work our way up in this way. But that’s a gradual long-term process.
GANESHPRASAD SRIDHARAN: That’s amazing, sir. That’s a crazy idea, but you know, crazy people change the world.
BALAJI SRINIVASAN: Maybe we’ll see if it happens. I think we’re on our way. I mean, if you think about how big internet companies and internet currencies are, yeah, they started in garages or white papers. Let’s see how big we can make internet communities.
GANESHPRASAD SRIDHARAN: That’s amazing, sir.
BALAJI SRINIVASAN: Thank you. Boom.
GANESHPRASAD SRIDHARAN: Okay, thank you so much, sir. Thank you so much. This was amazing.
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