Our wealth can become a powerful instrument for building such futures. The history of transformative firms such as DeepMind, SpaceX, and Nvidia suggests that backing extreme outliers in intelligence, drive, and technical vision is one of the most effective ways to spur progress. The same is true in philanthropy. The Ford and Rockefeller Foundations’ support for agricultural scientist Norman Borlaug’s development of high-yield, disease-resistant dwarf wheat varieties is credited with helping prevent mass starvation on an enormous scale.

Yet turning wealth into great futures requires a fundamentally different logic from the one that created the wealth in the first place. Our problem is not a shortage of capital, but a failure of institutional design.

America’s wealthy are offered an endless array of vehicles for growing wealth, and a much narrower set of socially approved philanthropic options. Between these poles lies an entire realm of underexplored possibilities; projects that are neither profit-maximizing nor traditional charity, but could meaningfully contribute to building a greater future.

Without a clear framework, wealth drifts. It sits in passive assets or gets divided between philanthropy and profit-seeking, neither of which sustains a long-term purpose of its own. Capital left to itself becomes inert, and the effects are visible. Americans are richer than ever, but our public spaces, art, and ambitions rarely reflect that abundance.

What is missing is not money, but a system that can hold a steady goal over time while allowing the means of pursuing it to evolve. To achieve this purpose, we propose the creation of “permanent games.” A permanent game is a durable system of capital, rules, incentives, and selection pressures designed to pursue a civilizational goal across generations by funding competition, not institutions. It preserves processes, standards, and evaluation mechanisms while also allowing individual organizations to be created, transformed, and destroyed. Instead of trying to ensure that any particular institution endures, the game itself is designed to protect the integrity of a project across time.

To understand why such a novel structure is required, we must first examine the limits of our current approach to philanthropy.

Our Foundations are Crumbling

The dominant philanthropic structure, the nonprofit foundation, has proven incapable of advancing ambitious civilizational goals. The so-called “Big Three”—the Ford Foundation, the Rockefeller Foundation, and the Carnegie Corporation—were once powerful institutions that shaped much of the postwar world. The U.S. government outsourced substantial intellectual, diplomatic, and even cultural work to them. Notably, the Ivy-educated WASPs who ran these foundations shared a coherent worldview: opposition to radical politics, faith in the power of experts to solve seemingly intractable social problems, and a commitment to an American-led democratic world order.

For a time, the system worked. The foundations played a key role in creating the entire field of molecular biology, eradicating hookworm in the American South, and developing the policy frameworks behind the Marshall Plan, which rebuilt Western Europe following World War II. However,  that system broke down during the crises of the 1970s. Vietnam, Watergate, stagflation, urban decay, and declining trust shattered the ideals of mid-century liberalism. At the same time, the 1969 Tax Reform Act fundamentally altered the operating environment for American philanthropy. It imposed mandatory annual payout requirements, sharply limited lobbying and political activity, created new disclosure rules, and empowered the IRS to supervise foundations with unprecedented scrutiny.

Together, these pressures made large foundations more bureaucratic, more cautious, and less willing to pursue the long-horizon experimental projects that had defined the previous era. Meanwhile, control of the great foundations shifted to people who shared neither their founders’ backgrounds nor their worldviews. No unified theory of progress replaced the old one. Today, some of America’s largest foundations operate according to forms of post-national progressivism that would have been unrecognizable, even repugnant, to their founders. The Ford Foundation, once a pillar of Cold War American internationalism, now funds grassroots activism that explicitly rejects American exceptionalism. The Rockefeller Foundation, which funded the Green Revolution, now prioritizes “equity” frameworks that would perplex John D. Rockefeller’s vision of scientific efficiency.

Modern foundations have a few structural problems. First, foundations often have vague mandates. This can result in a donor’s money ending up in the hands of people they profoundly disagree with. A foundation chartered to “improve education” or “promote human welfare” imposes no meaningful constraint on how future boards will interpret those aims. Vague mandates mean that there is no enforcement mechanism to keep foundations disciplined and focused.

There is also a talent problem. Foundation leadership is drawn from elites whose values often diverge from the founder’s, while succession mechanisms are typically weak, turning leadership selection into a popularity contest. The American sociologist Philip Selznick called this process “institutionalization”, a condition where the true purpose of the foundation shifts from its stated goal to institutional preservation. This effectively means that ideological drift is baked into the structure, because once an organization becomes an institution, its priority shifts from the founder’s mission to its own survival and legitimacy. Given enough time, deviation from the founder’s vision is an inevitable outcome, making the permanence of foundations itself a design flaw.

The deeper issue is that foundations attempt to preserve both capital and intent in a single structure, and over time, the former crowds out the latter. Bill Gates’s recent decision to spend down his foundation within twenty years, rather than let it outlive him, is best understood in this light. It reflects realism more than urgency. The only way to ensure his intentions are honored is to spend the money before he dies and the foundation inevitably becomes something else.

Ironically, this same logic animated Peter Thiel’s recent warning to Elon Musk that perpetual charitable vehicles often empower their founders’ ideological adversaries. When Musk was told that signing the Giving Pledge in 2012 would cause $1.4 billion of his wealth to go to Gates in the event of his passing, he responded, “What am I supposed to do, give it to my children?” To this Thiel replied, “You know, it would be much worse to give it to Bill Gates.”

If both institutions and heirs predictably drift from a founder’s values, then neither philanthropy nor inheritance offers a satisfying answer to the question: what is wealth for? Without an intentional worldview, a vision of how wealth might create a better world, and institutions capable of executing that vision, immense societal riches fail to translate into sustained human progress.

Gaming the System

To solve this problem, we return to the idea of the permanent game.

A permanent game has four core components: a fixed, measurable long-term objective; a gated pool of capital that cannot be permanently captured by any one organization; periodic competitive allocation across multiple approaches; and rotating evaluation by qualified experts.

Each permanent game is created to pursue a single, legible, long-horizon objective, defined narrowly enough to evaluate yet broadly enough to permit multiple approaches. For example, “Reduce the real cost of housing construction by 50%” or “Develop commercially viable fusion power.” 

The game controls a gated endowment—say, $500 million to $5 billion—invested for longevity. Its payout would be conditional rather than guaranteed, with allocations reviewed at fixed multi-year intervals. This distinguishes these games from foundations where capital is attached to institutions, venture funds where capital is attached to exits, and federal funding where capital is attached to political goals.

Permanent games would create a lightweight mechanism for spinning up multiple temporary organizations to pursue the same objective. Creating temporary organizations is the core idea behind Focused Research Organizations (FROs), and one reason why DARPA has remained surprisingly effective over time. 

At the outset, the game defines success in measurable terms. To make this concrete, consider a permanent game built around the de-extinction of animals, like the woolly mammoth. Let’s follow this game from its creation through a couple cycles of competition and evaluation.

The game funds five competing organizations, some nonprofit, some for-profit, some hybrid, each pursuing a distinct path. One focuses on editing elephant genomes to express mammoth traits. Another works on artificial gestation to get around the limits of elephant pregnancies. A third concentrates on computational genomics, trying to reconstruct traits in silico before moving to live animals. A fourth treats the problem as ecological, developing cold-adapted habitats and reintroduction models. A fifth combines everything in a single, vertically integrated effort.

In the first cycle, some of these approaches show early promise while others stall. The genome editing group may demonstrate partial trait expression but struggle with viability. The artificial gestation team may fail entirely. The ecological group may show that existing habitats cannot support the target species without further engineering. This is not failure so much as discovery; the purpose of the game is not to fund a winner immediately, but to surface information about which paths are viable.

Every five years, a council reviews the results. Some groups lose funding, others are wound down or recapitalized, and new teams are formed to try different approaches. The council itself turns over each cycle, drawing from a standing pool of qualified experts whose eligibility is defined in the founding charter in specific, field-relevant terms the council cannot revise. A smaller standing body of trustees, rotating on a longer cycle, holds sole authority to update those criteria as fields evolve. Individual evaluators serve fixed terms with mandatory cooling-off periods, so no single cohort can entrench its own standards of judgment. 

Yet even this structure has limits. Over a generation or more, the trustees become interpreters of a founding document rather than executors of a living intent, which is the same drift the permanent game was designed to prevent. For that reason, the charter should build in a constitutional moment at the twenty-five or fifty year mark, where an external body can review the game’s structure and, if necessary, dissolve it entirely. If the game itself begins to prioritize its own survival over its stated goal, it has become the thing it was designed to replace.

In the next cycle, new entrants incorporate what was learned. A new team might combine genome editing with advances in synthetic biology. Another might abandon mammoth traits entirely in favor of engineering cold-tolerant elephants directly. Over time, the composition of approaches shift, but the direction of the game does not.

Colossal Biosciences, founded in 2021, offers a ready-made test case. The company is already pursuing mammoth de-extinction with private capital, but its structure illustrates the problem permanent games are designed to solve. A single organization, accountable to investors who need an exit, pursues a timeline set by funding cycles rather than biology. 

A permanent game built around de-extinction would not replace Colossal, it would integrate it. Colossal could compete for game funding alongside university labs, nonprofit research groups, and rival startups, each evaluated based on scientific milestones rather than commercial ones. The founding consortium might include backers who have already invested in Colossal, alongside university endowments willing to lock capital on a twenty-year horizon. The goal would be written in specific biological terms: a viable cold-adapted proboscidean reproduced to second generation in a functioning habitat. Colossal might win or it might be overtaken by a team that doesn’t exist yet. Either outcome would mean the game is working.

The term “permanent game” invites an obvious question: what happens when the objective is achieved? Two designs are possible. In the first, the game includes a sunset clause. When the objective is demonstrably met, remaining capital is distributed as a final prize, the competing organizations are dissolved, and the game closes. Here, “permanent” describes the durability of the process rather than of any particular institution. The game runs only as long as the problem remains unsolved.

In the second design, the goal is written so that it can never be fully achieved, only advanced. Reducing the real cost of housing construction has no final state. You can always go further, addressing new material constraints and creating new methods of construction. Games of this kind resemble scientific disciplines more than engineering projects. Neither design is inherently superior; the preferable choice depends on whether the objective is a discrete threshold or a continuous frontier.

The permanent game design borrows elements from existing successful innovation systems, including prize competitions. For example, the 2004 DARPA Grand Challenge offered a $1 million prize for teams that could build a fully autonomous vehicle capable of navigating a 150-mile desert course in the Mojave. All entrants failed, but it sparked a wave of research into autonomous vehicles across the country. Stanford team leader Sebastian Thrun would later help launch Google’s self-driving-car effort, while other participants went on to lead Aurora, Uber ATG, and other autonomous-vehicle startups.

DAOs are perhaps the most structurally interesting precedent here. Their core insight is that governance rules can be encoded to outlast any individual participant, which is precisely the problem permanent games are trying to solve. In principle, DAO governance need not be tied to token holdings; voting power could be assigned based on credentials, past contributions, or other non-financial metrics. However in practice, these systems tend to collapse back toward financial weighting or static proxies for expertise. Credentials are hard to verify and quickly become outdated. Contribution-based systems reward activity more than judgment. More importantly, once encoded, these rules are difficult to revise without conflict or capture.

Let’s return to the de-extinction example and imagine a DAO used to allocate funding across competing teams. Voting power is assigned to credentialed biologists and engineers. Early on, this works. But as new techniques emerge, the relevant expertise shifts and the credentialing system begins to select for incumbents trained in older approaches. Updating the criteria requires approval from the existing voter base, which has little incentive to dilute its own authority. The system does not fail outright, but it hardens. Governance remains intact, but its judgments become less aligned with the frontier of the field. Permanent games require both durability and the capacity for judgment to evolve. DAOs reliably provide the former, but not the latter.

Until recently, a gated endowment model roughly described the governance of the MRC Laboratory of Molecular Biology (LMB) in Cambridge. The LMB has produced twelve Nobel Prizes over its 78-year history—an average of one every six years—with a yearly budget of around $50 million and only a few hundred employees. Every few years, a committee met to review the laboratory’s work and evaluate its scientific output. Groups that failed to produce were shut down, while those making breakthroughs received more resources. The LMB kept its governing structure deliberately small and technical. Scientists judged other scientists’ work, preventing the drift toward professional managers and grant administrators that bureaucratizes most research institutions.

Gated endowments impose something like market discipline, creating a genuine threat if the organization strays or becomes ineffective. Without the cushion of perpetual funding, failure has consequences. Resources run out and the institution winds down. That pressure sharpens priorities and keeps attention on results.

In the de-extinction game, a team that spends five years pursuing an unworkable approach does not persist indefinitely. It is shut down and capital returns to the game. At the same time, permanent games give organizations room to experiment and take risks, since they are judged on outcomes rather than forced to seek approval for every project or program.

Readers might argue that permanent games just sound like market competition with extra steps,  but the de-extinction example demonstrates the gap in market efficacy. No private investor would fund multiple parallel efforts over decades with no clear exit, especially when most of the benefits accrue to science and society rather than the firm itself. Permanent games supply the patient capital and tolerance for failure that neither venture capital nor traditional philanthropy provides.

There are still possible failure modes. The permanent game solves the problem of drift, not the issue of origin. Whoever sets the initial goal and selects the first council is making a values-based choice, and no procedural mechanism can push this decision into neutrality.

Permanent games could be captured by evaluators, misspecified in their goals, or stagnate if progress proves harder than expected. The advantage of this model is not perfection, but adaptability. By rotating decision-makers, forcing periodic evaluation, and dissolving failing organizations, they make it harder for any single error to persist indefinitely.

Cooperative Competition

Many principals possess the capital necessary to spark a project, but lack the time required to assume long-term responsibility. Worse, coordination between these actors is rare. Institutions need stability to become load-bearing, and ecosystems require interlocking structures to support long-term planning. This creates a collective action problem where no single principal can build a complete ecosystem alone, yet the trust and shared vision required for collective governance are in short supply. The principals most capable of funding such systems are often the least willing to cede the control required to make them work.

If permanent games are engines of competition, why call for cooperation? The answer lies in the difference between competing within a game versus playing by yourself. Friendly competition united around a common, clearly defined goal creates the necessary conditions for advancement and achievement. Without that shared definition there is no competition, only the pursuit of incommensurate futures.

The wealth to dramatically drive progress exists, and more is coming. A new class of economic elites will be created by the liquidity events of SpaceX, Anthropic, OpenAI, and others. The founders of Anthropic have already committed to donating at least 80% of their wealth, while the engineers and early backers of SpaceX have spent a decade trading immediate gains for a shared civilizational mission.

Permanent games correct a specific failure of contemporary philanthropy: they fix the goal, rotate the referees, eliminate the failing teams, and keep the capital in play. Permanent games are not just a new way to spend wealth. They are a way to convert private fortunes into systems that can pursue progress across generations. It is up to the holders of our great societal wealth, both large and small, to build them.

This article was featured in PALLADIUM 17: Universal Man. To receive your copy of the latest print edition, subscribe now.

On December 7, 1972, NASA astronauts landed on the Moon for the final time. The Apollo 17 crewmen spent several days exploring the Moon’s Taurus-Littrow valley on a lunar rover and collecting rock samples. As the crew prepared to return home, astronaut Jack Schmitt gave a short speech saying “We shall return, with peace and hope for all mankind.” Back on Earth, his words were largely ignored. Rather than show the astronauts’ final steps on the Moon, NBC chose to replay an old episode of the Tonight Show. The novelty of Moon missions had worn off and Americans had moved on. NASA’s budget, which peaked at nearly 5% of the federal budget in 1965, declined to a mere 0.98% of the budget by 1975. It sits at just 0.3% today.

Gerard O’Neill, a physicist at Princeton University who had previously applied for NASA’s Astronaut Corps, was dismayed at the growing apathy about space and the future that he was seeing in his students. To inspire them, he began a weekly freshman seminar in 1969 for a group of eight to ten students focused on large-scale engineering problems that could benefit a broad spectrum of humanity. The theme of his first seminar was “Is a planetary surface the right place for an expanding technological civilization?”

Over the course of the seminar, O’Neill and his students considered if, instead of colonizing Mars, we should build a megastructure that could serve as a space colony. Looking at the possible constraints of such a project from first principles, they began to realize they were solvable. This included an analysis of the economics, safety, simplicity, and ruggedness of every element of the megastructure’s conceptual design. While O’Neill initially regarded the class project as a kind of “joke,” the results of this analysis prompted him to take it much more seriously.

The design concept the group settled on became known as “O’Neill cylinders.” These were to be vast space stations dwarfing the small scientific outposts of the 1970s such as Skylab or the contemporary International Space Station, and featured a pair of 20-mile long cylinders with three land areas alternating with three vast windows, plus three mirrors that open and shut to create a day-night cycle. The cylinders rotate in opposite directions, enabling them to remain aimed toward the sun and generating a centrifugal force that simulates the effect of gravity.

Dreams of O’Neill Cylinders and space colonization faded away along with NASA’s budget. But fifty years later, the capabilities of SpaceX’s Starship rocket have created hope that space colonization is within our grasp. The currently active Block 2 variant of Starship can deliver up to 150 metric tons of payload to low Earth orbit per launch surpassing the capacities of the Saturn V rocket used by the Apollo missions. The planned Block 3 variant is estimated to be capable of payloads of up to 200 metric tons per launch.

The capacity to deliver thousands of metric tons of payload to low Earth orbit at a much lower cost has quietly made a manned Mars mission viable. In light of this, NASA’s plans to send humans to Mars in the next decade as part of its Mars Exploration Program, to determine if the planet can become a habitable world, are surprisingly credible.

Mars colonization is widely viewed as the logical end point for the first phase of space exploration. But we should again be asking if this is the right goal, and whether Gerard O’Neill’s vision represents a better path to colonizing space and a better driver of technological development.

A Thousand Strongholds of Mankind

The general concept behind O’Neill Cylinders dates back to a 1954 book titled People in Space—New Projects for Rockets and Space Travel by Hermann Oberth, one of the founding fathers of modern rocketry. The science fiction author and writer of the screenplay for Stanley Kubrick’s 1968 classic 2001: A Space Odyssey, Arthur C. Clarke, portrayed a similar concept constructed by an alien intelligence in his 1973 science fiction novel Rendezvous with Rama.

What made O’Neill different was that he provided scientific authority to the idea. He was an accomplished physicist who was on the short list for the Nobel Prize for his invention of the “particle storage ring,” a technique that allows particle beams to collide head-on in accelerators. Ultimately, other physicists would go on to win the Nobel Prize due to work enabled by his invention.

By lending his credibility to the O’Neill cylinder concept, he was sacrificing scientific authority, and he knew it would likely end any chance of his winning the Nobel Prize. But for a man who dreamed of exploring space himself, the concept was too technically sweet not to publish. In 1974, Gerard O’Neill published an article in Physics Today detailing the O’Neill cylinder concept, and followed up with the book The High Frontier: Human Colonies in Space in 1976. O’Neill began working with NASA to further his concept and briefed Congress on his plans in 1975.

The High Frontier depicted three space structures, dubbed “islands,” that were located at Lagrange points—areas of gravitational equilibrium where objects remain relatively stationary—in the Earth-Moon system. They would be constructed in sequence, with each stage advancing in complexity and ambition. The first two islands were rotating spherical shells that resembled large green valleys located around the equator of the sphere. The third island was two O’Neill Cylinders, which would be built using raw material from the Moon and near-Earth asteroids.

The material would be transported to the site using an electromagnetic catapult concept called a mass driver, a non-rocket method of space launch that is viable on astronomical bodies with no atmosphere, which in turn would necessitate powered flight overcoming drag. The in-space sourcing of materials was critical to success, because launching material from Earth would make the whole project prohibitively expensive. After the mining infrastructure and mass drivers were built on asteroids and the Moon, and the O’Neill Cylinder concept was proven, more and larger cylinders could be built at ever-decreasing costs.

There was a political element to Gerard O’Neill’s vision that was influenced by the Malthusian concerns reflected in the popular book The Population Bomb by Stanford professor Paul Ehrlich. The book depicted an overpopulated world riven by social catastrophes, military conflict, industrial pollution, extinction of entire ecosystems, and a perpetual energy crisis. In an interview alongside O’Neill, the famed science fiction author Isaac Asimov mused about achieving world peace by building “an Israel in space, a Palestine in space, a Northern Ireland in space.”

Unlike our slowly centralizing home planet, where land and sovereignty have long been parceled out, there could be a political and demographic exit for those seeking escape. The centralizing trend in politics is perhaps true for all planetary civilizations, as, for example, a Martian colony would naturally trend towards centralization due to both the resource demands as well as the need for a political body with planet-wide sovereignty necessary for the terraforming process. O’Neill Cylinders offer the promise of political experimentation and competing systems and ways of living. If residents are unhappy in one settlement, they could have the right to exit to another.

To further O’Neil’s vision, a NASA Summer Study exploring designs for space colonies was held at Stanford University in 1975. As part of the study, a similar concept to the O’Neill cylinder that could house up to 140,000 people was developed and became known as the Stanford Torus.

No one disputed that the fundamental conceptual elements of both designs were scientifically sound and could be built with sufficiently advanced technology. But the technological breakthroughs that would be required were far outside of humanity’s grasp—as was the cost. In 1976, O’Neill estimated a project to build an O’Neill Cylinder capable of housing one million people would cost $3 trillion, or $1.1 trillion more than the entire U.S. GDP at the time.

The Charismatic Yet Lethal Red Planet

That NASA would devote resources to studying space megastructures, and that Gerard O’Neill was asked to brief Congress on his concepts, illustrates a difference in acceptable levels of ambition between then and now. The same year the Apollo Program ended, President Nixon canceled a government initiative to build a supersonic commercial passenger jet and U.S. government spending on space exploration and scientific research and development as a percentage of GDP began what would turn out to be half a century of decline.

But despite this decline, the U.S. never gave up on the old idea of reaching Mars. The dream of reaching a new world was simply too interwoven with the political legitimacy of the U.S. itself—since the American people were the descendants of those who had ventured to and laid possession of a new world as a cornerstone of their nation’s sovereignty. The thought of astronauts planting the American flag on Mars and exploring another world was too compelling. It was inevitable that every president would attempt to borrow at least some of that political authority for themselves. From 1980 through today, Bill Clinton was the only president who did not direct NASA to work towards a manned Mars mission.

As soon as men invented modern rockets, they began dreaming of visiting the Red Planet. In a 1987 interview, Hermann Oberth recalled the Mars “furors” of 1907, 1909, and 1916, when Earth was very close to Mars and there was widespread speculation about potential life on Mars. This curiosity was shared by Wernher von Braun, who started his career as an apprentice to Oberth, and after designing the V-2 rocket for the German military in World War II, would go on become the chief architect of the Saturn V rocket that put men on the Moon. Like Oberth, von Braun attracted talented engineers to work on his projects by setting ambitious and technically interesting goals and presenting them either in technical papers or science fiction.

SpaceX founder Elon Musk today applies some of the same methods used by the German rocket scientists, and has produced videos and documentaries advocating Mars colonization and promoting the company itself. It is SpaceX’s focus on the goal of taking people to Mars that helps it attract elite engineering talent. It is these engineers who are willing to work exceptionally hard to help make humanity multiplanetary. Even though the majority of SpaceX’s revenue comes from defense contracts and Starlink services, the company couldn’t have recruited comparable talent if they had set such breadwinning as their ultimate goal. It is Musk’s grasp of how to use social technology to advance material technology that made Starship possible.

Musk doesn’t downplay the risks inherent in the mission, noting “a bunch of people will probably die” on Mars—just as colonists did when settling the New World. The Red Planet is an unremittingly hostile place for human life. Its thin atmosphere provides almost no shielding against cosmic radiation and is composed mainly of carbon dioxide, making the air unbreathable. Martian colonists would be exposed to radiation doses up to 700 times higher than Earth’s, which could cause severe damage to the central nervous system, cancer, cardiac disease, immune system weakening, and DNA damage resulting in mutations and genetic abnormalities.

Martian colonists would need to remain in pressurized suits, without which the fluids in their body would boil due to low atmospheric pressure. They would also have to deal with an extreme climate where temperatures fluctuate from up to 20 degrees Celsius during the day to negative 70 degrees Celsius at night. This thin atmosphere is also unfortunately thick enough to make non-rocket means of space launch like mass drivers impractical—putting a floor on how low launch costs from an industrial Martian civilization can go. The Earth-Luna system might yet have a permanent advantage there, in its atmosphere-free special economic zone.

Because Mars only has 38% of the Earth’s gravity, astronauts could suffer from vision problems, weakened bones, muscle atrophy, cardiovascular deconditioning, and a weakened immune system. While decades of study have provided us with an accurate medical model of microgravity, we do not yet have any long-term understanding of mere low gravity. Can a pregnancy be brought to term at less than half the Earth’s gravity? We simply don’t yet know.

Terraforming Mars to make it more hospitable to human life would likely take hundreds if not thousands of years. This might be a viable political project for a thriving Mars civilization, as that world’s manifest destiny. But there is yet no merely economic or politically expedient justification for such an effort and resource expenditure for us here on Earth. As with the Apollo Program, once the novelty wore off, sustaining spending at the necessary levels would be politically very difficult.

One of Musk’s stated reasons for Martian colonization is the existential risk posed to humanity by only being on one planet. A nuclear war or a planet-killing asteroid strike could wipe out human life forever. But this is as much an argument for spending money to prevent existential risks on Earth, such as investing in technology to enable planetary defense from asteroids. In addition to the romance of a new landmass to settle, part of the fixation on Mars is driven by what the science fiction author Isaac Asimov termed “planetary chauvinism.” We are simply used to living on a planet, so we assume that the only place humans can live on permanently must be another planet. But O’Neill Cylinders can provide all of the benefits of a planet too.

Escaping Planetary Limits

One of O’Neill’s students at Princeton in the 1980s was Jeff Bezos. Bezos was a former child prodigy who was obsessed with space from the age of five and gave his high school valedictorian speech on space colonization. Only six years after founding Amazon, Bezos started the space exploration company Blue Origin, and would later purchase a 400,000 acre ranch in Texas for rocket testing. Unlike SpaceX, whose founding mission was driven by Elon Musk’s aim to enable Mars colonization, Bezos’s goal was for Blue Origin to “build the necessary infrastructure for future generations to have an entrepreneurial explosion into space.”

In Washington, D.C. in 2019, Bezos delivered a presentation titled “For the Benefit of Earth” that illustrated his ultimate ambitions for Blue Origin. Bezos spoke of building multiple O’Neill Cylinders holding a million or more people. The interiors of the cylinders could resemble architecture on Earth or take on a more science fiction-infused appearance. The climate could be like a perfect day on Maui or any other climate its residents desired. Some cylinders would be vacation destinations and offer “zero-G gravity so you can go flying with your own wings.”

Residents of the cylinders could return to Earth for vacation and, if anything went wrong, people on Earth could quickly respond with help. This, in the early stages, represents an important advantage over planetary colonization, since if anything went wrong on a Martian colony, it would take six months for help to arrive. Any Martian colonists would be on a distant island in an environment that is doing everything it can to kill them.

In Bezos’s vision, much of Earth could be converted into a kind of giant national park with industrial production moved to space. Truthfully, it is perhaps at least as likely that Earth would become the densely populated and greatly desired Manhattan of the elites of the distant future, as it is to become something like a nature-conserving Yellowstone Park. After all, natural habitats can be recreated in orbit just as easily.

One of Bezos’s presentation slides was labeled “Our Choice: Stasis & Rationing or Dynamism & Growth.” In place of the Malthusian concerns of the 1970s, degrowth movements have emerged with renewed concerns about ecological devastation and resource exhaustion. The resources on Earth are not infinite and at some point in the far future we will have to move beyond this planet or live in a world filled with competition over a shrinking supply of everything needed to sustain civilization.

Elon Musk was quick to dismiss Bezos’s vision as mere fantasy, pointing out that building an O’Neill cylinder was like trying to build the “United States in the middle of the ocean.” Perhaps the decentralized dream really is too similar to seasteading concepts. The cost and difficulty of transporting massive amounts of mass from the Moon and asteroids to build colonies is beyond today’s economies.

Further Technological Progress Will Only Happen With Goals Worthy of It

We have not yet reached the technological peaks required to build space megastructures. But this is more of a reason to pursue such a project, as it would function as a replacement for war as an impetus for large-scale technological progress and unlock completely new technologies we would otherwise have never developed. It was World War II that enabled the development of radar, jet engines, programmable general-purpose digital computers, long-range guided missiles, the atomic bomb, and more, over a six-year period.

The developmental benefits carried over to the Cold War, with NASA itself a thinly-disguised military organization. When NASA was founded there was open speculation in Washington about satellites armed with nuclear missiles and military moon bases, with some influential figures believing “mastery of outer space meant mastery of the world.” Military and NASA spending in the 1960s created the industrial structure and financial strength needed to pursue ambitious commercial projects and advance nascent technology. By the mid-1960s, NASA was purchasing sixty percent of the integrated circuits produced in the United States, which led to the development of Silicon Valley.

The English novelist J. G. Ballard once compared the Boeing 747 airplane to the Parthenon, writing that each gave shape to “mathematics, aesthetics, and an entire geopolitical worldview.” The U.S. was able to achieve geopolitical dominance because it possessed technical capabilities no other nation possessed and were impossible to replicate. The Soviet Union bankrupted itself trying. In some ways, the U.S. is still living off the fumes of the technological advances made in the 1960s. A replacement of parts of the military-industrial complex with a space-industrial complex focused on building space structures could enable step change technological improvements across a wide range of areas.

In the half-century since O’Neil gave his estimate of $3 trillion as the cost for space habitat for one million people. While dollars buy less today than in 2025 due to inflation, some technologies have continued to advance and soundly beat inflation. For example it cost approximately $1,311 in 1976 dollars for Saturn V to bring a kilogram of mass into low Earth orbit, this works out to about $7,000 in today’s dollars. Starship is currently estimated to bring down costs as low as $150 per kilogram for single-use missions and perhaps as low as $25 per kilogram with high reusability. This means a key cost is perhaps two orders of magnitude cheaper than half a century ago!

Which other factors might have changed drastically? Without a funded and clear detailed technical study, we don’t yet know. In the political moment of a Musk and Trump alliance presenting such a study to congress seems less farfetched than last year. A current technical presentation on orbital habitats might prove to be the best stimulus bill that the legislative body ever considered since science fiction projects can only be built by a science fiction industrial base.

A selection of the technical advances that a structure on this scale would provide reason to develop could include self-replicating and autonomous construction and asteroid mining robots, extraordinarily strong and flexible materials, ultra-efficient water purification and recycling, hydroponics, and air filtration. Or maybe basic atomic manipulation to create materials and objects on demand, along with the ability to convert carbon to food and chemicals, as well as fusion power and space-based solar energy, among many other technologies. All of these technologies would transform life on Earth forever.

A program to develop O’Neill Cylinders or any other habitable megastructures in space is in reality a program to develop a post-scarcity society on Earth and extend human civilization throughout the universe. It would require a sequential approach starting with a Moon colony and asteroid mining before the construction of a pilot project. The first structures may be built on asteroids themselves, with near-Earth asteroids such as Bennu viewed as plausible construction sites.

Human history is filled with stories of exploration and discovery. Space is the final frontier. But perhaps we should be thinking of ourselves as engineers, rather than explorers. The goal shouldn’t be to settle a new planet like we once settled a new continent, but to build new artificial worlds of our own design.

The IDF has stated it has destroyed roughly 20% of the tunnels thus far, using a variety of methods. One of the primary tools the IDF is using is a sensor system codenamed Power Number, that was invented a little over a decade ago by three graduates of Talpiot, an elite IDF training program.

Talpiot has its roots in the aftermath of another devastating surprise attack on Israel, the Yom Kippur War in 1973 where the IDF was caught off guard and lost over a thousand tanks and 20% of its Air Force. The IDF’s leadership at the time realized that if the Israeli state were to survive in the future, they would have to out-think a numerically superior enemy. This would mean developing a level of technological supremacy that would negate the Arab states’ greater military mass. 

The IDF’s initial idea to meet this challenge was to create an institute modeled after Xerox PARC, the research and development group in Silicon Valley which was responsible for many revolutionary developments in computing, including the personal computer. But the Israelis soon realized they did not have the resources needed to fund such an institute. Instead of an institute filled with established researchers, the Israelis sought to find a small number of the smartest young people in their country and, during their peak in creativity, task them with developing weapons no other country possessed. This program became Talpiot.

This institutional design reflected the reality that while the Israelis did not have much money, what they did have was a population with many intellectually gifted young men who were mandated to serve in the IDF once they turned eighteen. Over time, the program came to serve a similar function in Israeli society as Ivy League universities serve in the U.S. Despite its many problems, the university system is here to stay. If anything, top universities are becoming more important as centers of power not just in the U.S., but also other developed countries and even in China. The Talpiot program shows what a supplement or partial replacement for universities as a means to forge a new national elite could look like.

Finding and Cultivating Talent For National Security

The first commander of Talpiot, Dan Sharon, a former IDF paratrooper, recruited his friend, Felix Dothan, who had just completed his PhD dissertation at Hebrew University on the topic of “the development of thinking and how one could improve his or her own thinking.” Dothan’s aim for Talpiot wasn’t merely to confer technical knowledge or select the most intelligent; it aspired to teach people how to think and learn fast.

Together they wrote a memo that describes what they were looking for from recruits: “We need applicants with a high IQ. We are looking at the top 5 percent when it comes to intelligence, creative ability, the ability to focus, stable and pleasant personalities.” Furthermore, applicants must have “dedication to their homeland and the strong will to survive in the unit.” They wanted the smartest men (and in later years women) they could find at the age when they still believed anything is possible. But they wanted more than raw intelligence which created a difficult selection problem.

Dothan and others began working on a selection process that would isolate candidates who fit their criteria. Talpiot launched in 1979 and was initially designed for a cohort of 25 people selected from a pool of up to 10,000 test takers that would complete a bachelor’s degree in physics and mathematics—computer science was added in 1983—from Hebrew University with four years of content stuffed into three years. With the help of academic consultants, Talpiot’s leaders designed psychometric tests that would assess candidates’ cognitive ability and creativity. The two hundred or so candidates that were shortlisted underwent a taxing interview where they were subjected to logical puzzles designed to test their creativity and critical thinking skills and asked to explain physical phenomena that went well beyond what they had studied at school.

A flaw in the selection process was quickly discovered; highly creative technical minds often do not have “stable and pleasant personalities” and members of the first classes of Talpiot were finding it difficult to be team players. Additional personality tests were implemented where prospective recruits were put through intense simulations to determine their leadership and teamwork capability as well as motivation and “moral value.” Once selected for the program, Talpiot students spent nearly all their time together, which fostered an intense bond.

The training was designed to push students to their limits. A favored technique was to identify the problem-solving strengths of students and play against them, forcing them to learn and think in different and original ways. As David Kutasov, a theoretical physicist at the University of Chicago and a Talpiot alumnus put it “A lot of kids these days, even at top American universities, are too conventional and not original. At Talpiot they beat it out of you and push you towards originality.” The intensity of the program results in a high attrition rate; nearly 25% of those originally selected fail to complete the program.

Talpiot is sponsored by the Israeli Air Force and the Israeli Administration for the Development of Weapons and the Technological Industry, or Maf’at. Maf’at serves as the central node in the Israeli R&D establishment, coordinating efforts across the IDF, its largest defense contractors, the Institute for Biological Research, and the Israeli Space Agency. Despite the Air Force connection, Talpiot students spend time embedded with units across the IDF in rotations designed to enable them to take the academic knowledge they are learning in the classroom and apply it to field exercises and real battle situations.

Talpiot officers build R&D job descriptions for their graduates to fill that are based on the highest priorities of every military branch. They then work on job placement throughout each student’s three-year undergraduate program with the goal of putting every graduate in the position where they can have the highest impact. Upon receiving their degree, students serve a six-year commitment with the Army, Navy, or Air Force, typically in an R&D capacity, although some have become fighter pilots or pursued other combat specialties.

Defense Projects Can Drive Economic Growth

Besides their coursework, each student was tasked with what is called “the Project,” which entailed coming up with an original idea that solves a defense problem, create a budget for it, and then produce it. Many of these student projects would ultimately be developed by the IDF; the famed Iron Dome missile defense system has its roots in an early mockup by a Talpiot student. 

From its inception, Talpiot’s leaders found they were in competition with recruiters from Unit 8200, Israel’s version of the U.S.’s National Security Agency, for the same candidates. The leaders of each program came together and reached a handshake agreement to work together to find the most promising young people and let each candidate decide between the two programs.

The joint talent search starts with monitoring potential recruits as early as elementary school and continues through after-school programs in junior high and high schools, such as the Nachshon Program, which is based off Talpiot pedagogic concepts and is designed to create a cadre of the best young technical minds in the country. Feeder schools, including a boarding school for gifted students, the Israeli Arts and Science Academy (IASA), have also been formed. Today, 7% of Talpiot’s current fifty-person class are IASA graduates and 25% of IASA graduates go on to earn PhDs in technical subjects.

Elite programs like Talpiot and Unit 8200 are reserved for Israeli citizens and their alumni have played an outsized role in advancing Israel’s economic and military power. Despite a total defense budget of only $23.6 billion—compared to the U.S.’s $130 billion annual budget for defense R&D alone—the IDF has consistently been able to develop novel weapons systems that achieved the original mandate of Talpiot to develop “totally new weapons that don’t exist among (other) nations.”

Often these systems and technologies are developed jointly by the U.S. and Israel. Aside from Iron Dome, which is produced by Israeli and U.S. defense contractors and largely funded by the U.S., a prime example is the computer virus Stuxnet, which ruined 20% of Iran’s nuclear centrifuges and caused a thousand of the Iranian military’s computers to physically degrade. The virus is widely believed to have been developed by the National Security Agency and Unit 8200.

Talpiot members have been credited by the Times of Israel with “having an impact on every weapon and communications system used by the IDF and every tool used by Israel’s intelligence community.” Several ex-Talpiot have received the Israeli Defense Prize, which is the country’s top defense prize and is awarded annually by the President of Israel to the individuals, units, or projects that were found to have significantly improved the security of the state.Talpiot alumni have been successful in the private sector as well, founding over one hundred companies worth over $50 billion. 

Perhaps the most prominent example is Check Point Software, which was founded by veterans of Talpiot and Unit 8200 and developed some of the first anti-virus and cybersecurity software for Internet-connected computers in 1993. Today, the company is Israel’s largest cybersecurity firm and the second-largest Israeli company overall in terms of market capitalization. Check Point sparked the growth of Israel’s cybersecurity industry, which in 2021 accounted for nearly 10% of the global market. Around 80% of Israel’s cybersecurity founders had experience in IDF intelligence per a 2018 study. Israel’s aerospace and defense industry has similarly prospered, with close to $13 billion in exports in 2022. Israel has developed a particular expertise in drone technology and electronic warfare, both of which stem from IDF research programs.

Combined, the aerospace, defense, and cybersecurity industries account for roughly 15% of Israel’s annual exports. A large portion of Israel’s economic strength stems from industries whose leadership and technical expertise are drawn from Unit 8200 and Talpiot alumni. Venture capital firms have been started by their alumni, including Glilot Capital Partners and Axon, whose strategy is to fund startups whose founding teams are fellow veterans of these programs.

These alumni are increasingly venturing beyond their traditional domains and have founded companies in markets as diverse as transportation, healthcare, construction, agriculture, media, and more. The startups they founded have helped turn Israel into a technological powerhouse. At one point in 2023, Israel, with a population of 9 million, was home to 89 unicorn startups valued at over $1 billion dollars. Israel is one of just a handful of small countries, alongside Estonia and Singapore, with more unicorn startups per capita than the United States. 

Talpiot alumni have also become some of the most renowned researchers in the world in fields ranging from theoretical physics to systems biology. Examples include Yoav Freund, who won the Godel Prize for his work in machine learning, and Elon Lindenstrauss, who received the Fields Medal—the “Nobel Prize of mathematics”—for his work in the area of dynamics. One former member received a technical Grammy for inventing an audio mixing technology. Unlike many other academically selective programs, they manage to avoid selecting for excessive conformity that impedes intellectual explorations. Avi Loeb, a Harvard astrophysicist and ex-Talpiot member is regarded as the world’s “leading alien hunter,” for his hypothesis that Oumuamua—the first interstellar object observed passing through our solar system—is artificial. 

Political Barriers to Solving the Selection Problem 

The success of Talpiot’s alumni is made more remarkable by their relatively small number; roughly 2000 people have graduated from the program in its lifetime, equivalent in size to the average annual freshman class at Harvard. The success of Talpiot has spurred the development of a similar program in South Korea which explicitly referenced Talpiot as an inspiration. While China has developed a similar program as well.

A U.S. program of this kind would require cooperation with a top university to play the role that Hebrew University provides to Talpiot. An undergraduate R&D program designed to develop novel weapons would not be a welcome addition to the campus at many U.S. schools, however. Harvard, Yale, Columbia, and other universities banned the Reserve Officer Training Corp from their campuses for forty years, only allowing it to return in 2011. Stanford’s business school recently blocked students from even forming a club related to defense technology.

Ironically, as Talpiot’s founders explicitly sought to emulate America’s Ivy League universities when they established the program, the U.S. was already moving away from this model. The process through which U.S. diplomats are selected is instructive as to why this is the case. For nearly a century, anyone wishing to become a U.S. diplomat has had to pass the Foreign Service Officer Test, which historically had a 20% pass rate. During the decades following World War II, the test took three and a half days and required a near-polymathic grasp of history, geography, foreign cultures, and politics. 

In 1989, a court decision found the test was discriminatory because men passed its mandatory general background section at roughly twice the rate of women. In response, the State Department made the exam much shorter and easier and, in 2022, it announced the exam will no longer be graded pass/fail, to enable it to hire low scorers who were members of underrepresented minority groups. Any attempt to implement a comparable talent development program in the U.S. would face the same disparate impact legal challenges and diversity and inclusion imperatives that transformed the Foreign Service Officer Test. These problems are particularly pronounced at America’s most elite universities, where students are selected using very different criteria.

In contrast, in Israeli society, the pinnacle of business and politics are dominated by veterans of elite IDF units such as Israeli Prime Minister Benjamin Netanyahu and his predecessor Naftali Bennett, who are veterans of Sayeret Matkal, the IDF version of Delta Force. Part of the reason the Israeli public has uncomplicated beliefs about the righteousness of its defense is that it is led by an elite with uncomplicated beliefs about the righteousness of its defense. And the first step to joining the Israeli elite is through programs like Talpiot.

Similar processes to the Talpiot Program used to be the standard model for the U.S. elite for decades. The same prestige-seeking motives that result in Harvard grads joining McKinsey today would once lead Ivy League graduates to try and become CIA officers. The pace of advancement opportunities within such institutions has slowed to the point they have limited appeal to today’s graduates. The current U.S. model is broken in that it largely fails to identify its most talented and ambitious young people and then it fails to offer those it does select a worthy path of achievement.

Selecting students based on patriotism and psychometric testing to determine capability, followed by rigorous training, would entail a profound change in U.S. ideology, but perhaps the most difficult part would be overcoming the aversion to giving such young talent not just funding to work with, but significant authority to implement and apply novel technical solutions to pressing problems. Programs like Israel’s Talpiot aren’t the only means of addressing such problems, but all means that might work will require changes to the selection and education of the country’s future elites that are no less profound. 

There were two major components to the Americans’ efforts: the Field Information Agency Technical (FIAT), which centered around agents capturing technical data from research sites across Germany, and Operation Overcast, which involved hunting down and capturing the most important members of the Nazi scientific establishment.

Operation Overcast’s targeting was guided by the so-called Osenberg List, a Gestapo document which, on Hitler’s orders, cataloged the most important scientists and engineers to the Nazi war effort. A copy of the document had been insufficiently flushed down a toilet at Bonn University and was captured by Allied intelligence.

A 28-year-old Stanford-educated mechanical engineer, Major Robert Staver, was placed in charge of Special Mission V-2 to capture intelligence about the rocket’s design. When he had been working in London before the assignment, a V-2 missile had nearly killed him when it exploded above the building he worked at. Staver led searches through underground weapons factories built into mountains and interviewed prisoners, including Walther Riedel, the Nazis’ top scientist in its rocket design bureau. Riedel talked to Staver for hours, detailing his obsession with outer space vehicles he dubbed “passenger rockets,” as well as “space mirrors which could be used for good and possibly evil.” Riedel told Staver he could provide the names of at least 40 other scientists who should be brought to America to complete this important work, noting that if the U.S. did not act the Soviets certainly would. 

Staver’s superiors became convinced through both his and others’ works that the true prize for the U.S. wasn’t technical drawings or even intact planes and rockets—it was the people who conceived of them. Operation Overcast became Operation Paperclip, which brought over 1,600 German scientists and engineers to work for the United States.

Among these scientists was the physicist and engineer Wernher von Braun, who was the central figure in the V-2 program. In 1960, von Braun and 120 Germans who came to the U.S. as part of Operation Paperclip were transferred to the newly-formed National Aeronautics and Space Administration (NASA), where they would develop the Saturn rockets that brought astronauts to the surface of the moon. Another 86 German researchers and test pilots were placed at an Army Air Force base in Ohio as part of Operation Lusty (i.e., LUftwaffe Secret TechnologY), where they helped the Americans exploit the secrets of German jet technology.

By then, the American company Lockheed had already built and flown a jet fighter plane, but the Germans helped to improve future jet aircraft designs, build supersonic wind tunnels to test experimental planes, and advanced America’s aeronautical engineering research and development by four or more years.

As for FIAT, which stuck to gathering German technical data, the intelligence proved of almost no value and the operation was considered a failure. The contrast between the outcomes of Operations FIAT and Paperclip tells us something about the nature of technical knowledge. There are huge chunks of technical knowledge that cannot be acquired by reading texts. And history has shown that it is only possible to access this knowledge through the humans who possess it.

How to See The Air

The Operation Paperclip emigres were the last of a wave of European technical elites who moved to the U.S., starting with the aerodynamics genius Theodore von Karman in 1929. Best known today for the Karman line, which separates Earth’s atmosphere from outer space, he became the director of the lavishly-funded Guggenheim Aeronautical Laboratory (GALCIT) at Caltech. There, he oversaw the design of a wind tunnel and recruited an influential group of researchers as faculty, including the physicist credited with building the first liquid-propulsion rocket, Robert Goddard. 

While lacking the technical sophistication of Germany, Los Angeles was an aerospace manufacturing hub with over 20 airframe and aircraft manufacturers in the surrounding area during the 1930s. The sector exploded over the course of the war, employing over two million people in the production of over 300,000 planes. American strategists began wondering what was possible if the country’s manufacturing capabilities were paired with an aerospace R&D function that could match or exceed the Germans.

In 1944, von Karman met with Hap Arnold, chief of the Army Air Force, for a series of talks held mainly during long rides in the general’s staff car at an air base outside of New York City. Arnold told von Karman the outcome of the war had already been decided. It had been won by airpower. 

He was now focused on the future; he asked von Karman to form a SAG, or scientific advisory group, and oversee the production of a series of reports that would look at every element of the future of aerospace. Entitled Toward New Horizons, it included analyses of the technology that would “secure us the conquest of the air over the entire globe.” 

This future would require leveraging the knowledge gained from the Germans, but at first the American military wasn’t sure what to do with von Braun and his crew. They spent their first five years in the U.S. at remote Army outposts in the deserts of West Texas and New Mexico. The Army code name for their work, which involved building and firing V-2 rockets, was Project Fireball. But absent a major new project to advance rocketry, the Germans took to calling their time Project Icebox. The Americans were keeping the Germans on ice until they could figure out their rocket ambitions.

While rocket research was stalling, jet aircraft research and development was of paramount importance to a newly independent U.S. Air Force. One organization stands out as the best of the companies who specialized in this work: Lockheed’s Advanced Development Projects group, better known by its nickname—Skunk Works. 

The history of Skunk Works can be traced back to 1943, when German fighter jets first appeared in the skies over Europe. A 33-year-old American engineer, Kelly Johnson, was tasked with building a jet fighter prototype in 180 days to match the new German fighter planes. He selected around 50 design engineers and shop mechanics and rented out a circus tent because space was limited at the Lockheed factory. The tent was set up next to a smelly plastics factory—hence the Skunk Works nickname. 

Johnson’s team delivered the plane, the P-80 Shooting Star, 37 days ahead of schedule. Lockheed would go on to manufacture nearly 9,000 of them after the war. The plane would prove itself in the Korean War during dogfights over “MiG Alley” in the skies above North Korea; the first all-jet dogfight in history ended with a U.S. pilot flying a P-80 downing a Soviet-made MiG-15.

The capabilities of Skunk Works were eye-opening to its government clients and the CIA in particular. The agency had an interest in aerial reconnaissance capabilities that would enable it to peer deep into the Soviet Union. The circumstances created the conditions for an entirely new type of organization designed by and for engineers with one abiding passion: building the fastest and highest-flying military aircraft ever built. 

Skunk Works developed a track record of delivering planes that were far ahead of their time on incredibly short deadlines. Its projects were frequently initiated at the presidential level and involved building planes for top-secret missions at the height of the Cold War. They were known as the “CIA’s unofficial toy-makers” as they built the experimental Air Force fighter planes that tipped the technological balance of power in favor of the United States. Some of Skunk Works’s most famous planes included the F-104 Starfighter, the first supersonic attack jet; the SR-71 Blackbird, which could fly more than three times the speed of sound; the U-2 Spy plane; and the F-117 Nighthawk, the first plane able to operate with stealth technology. 

The atmosphere at the Skunk Works facility was both intense and informal, with the men clustered together in a big barn-like room. Many had been working with machines their whole life. Ben Rich, who succeeded Johnson as head of Skunk Works, recounted that he built his first airplane, a Piper Cub, in his backyard when he was only 14 years old. 

It was an unusually tolerant workplace when it came to homemade projectiles. One engineer converted a piece of a jet’s tailpipe into a fourteen-inch blowgun and would occasionally fire clay pellets at the necks of others when they got on his nerves. Another engineer built a square cannon in his spare time to prove the concept could work, then accidentally launched the square shells he built for it through a neighbor’s house.

Those that remained at Skunk Works were a self-selecting group; you had to love the job because of what it demanded from you. Meeting a deadline for a project could mean working 14-hour days for seven days a week for months on end. And because many of these projects were classified, your work couldn’t be discussed at home.

There was no doubting who was in charge. Johnson was described as the “the toughest boss west of the Mississippi.” But even more remarkable to the engineers who reported to him was his uncanny engineering intuition. According to Ben Rich:

Nothing got by the boss. Nothing. And that was my sharpest impression of him, one that never changed over the years: I had never met anyone so expert at every aspect of airplane design and building. He was a great structures man, a great designer, a great aerodynamicist, a great weights man. He was so sharp and instinctive he took my breath away. I’d say to him, “Kelly, the shock wave coming off this spike will hit the tail.” He would nod. “Yeah, the temperature there will be six hundred degrees. I’d go back to my desk and spend two hours with a calculator and come up with a figure of 614 degrees. Truly amazing.

Johnson lived for designing airplanes, turning down the presidency of Lockheed on three occasions because it would mean giving up his duties at Skunk Works. And it was his singular attention to the craft of airplane design that enabled him to develop his preternatural intuition for decades. 

Just as important as Johnson’s ability to see the whole plane in his mind’s eye was his systematic approach to managing projects. As much as it was an R&D organization, Skunk Works was a system for building planes. Johnson drilled down the essence of this system to 14 rules. 

One of his strongest beliefs was that engineers should be located as close as possible to where their planes were being built. Engineers were expected to live their designs, spending up to a third of their time on the shop floor to see how their ideas were being translated into actual parts. Over time, many of these engineers would work on 20 or more plane designs, which would require them to solve virtually every problem in their sub-discipline and, in the words of Rich, become “walking aviation encyclopedias and living parts catalogs.”

Knowledge flowed up and down the design and production chain with everyone working within a few feet of one another. It was through this unique structure that Skunk Works developed the process knowledge that enabled it to rapidly make hundreds of iterative improvements to its plane designs.

Over the course of his career, Johnson would design over 40 planes, but his crowning achievement is the Blackbird, which was produced in only 20 months. It was unlike any plane that had ever been built before, because according to Johnson, “Everything had to be invented. Everything.” 

This invention was made necessary by the plane’s design requirements. The Blackbird had to fly up to 85,000 feet in the air at speeds in excess of 2,000 miles per hour for hours at a time, and it had to be nearly invisible to Soviet radar systems. These requirements presented some unique challenges, like the fact that it would have to maintain a speed that other planes of the era could only theoretically reach for a brief amount of time using after-burners. At this velocity, the temperature on the plane’s leading edges would exceed 1,000 degrees Fahrenheit, melting any conventional airframe.

The story of how the SR-71 was designed and built was classified, but in 1982 Popular Mechanics interviewed Johnson for an article about the plane’s development. The article portrays an organization going to extreme lengths to systematically solve a series of hard engineering challenges in short succession.

One of the hardest design problems involved the engine air inlet; it required using three shock waves to reduce Mach 3 air to subsonic levels before it entered the jet’s engines. To keep the shock wave where the engineers wanted required the inlet cone to move almost three feet and a computer-controlled hydraulic actuator that could withstand forces up to 31,000 pounds of pressure, among other challenges. With computer simulations unavailable, the Skunk Works team ran more than 250,000 pressure readings on a quarter-scale model of the plane to perfect this one design element.

To resolve the problem of high temperatures outside the plane, the Skunk Works team settled on using titanium and other exotic alloys. This required an exhaustive research program into the best methods for drilling and machining these alloys. The initial batches of titanium parts were extremely brittle, which resulted in Skunk Works instituting a complex quality control process that entailed tracing 10 million parts back to their first mill pour.

The Blackbird, then called the A-12, first flew over Area 51 in Nevada in 1962, and it remains the world’s fastest and highest-flying production aircraft. Flying the plane was an overwhelming experience for its pilots, unlike anything they had encountered before. One former Blackbird pilot, Air Force Colonel Jim Wadkins, later recalled that “At 85,000 feet and Mach 3, it was a religious experience. Nothing had me prepared to fly that fast…My God, even now, I get goose bumps remembering.” 

When thinking about achievements like the Blackbird there is a tendency to fixate on geniuses like Johnson, a man whose engineering intuition was so great he could “see the air,” in the words of his former boss. But it was the organization Johnson built, not one man, who made the Blackbird possible. Johnson built the perfect machine in Skunk Works to build the planes he loved. 

New Horizons, New Roadblocks

Johnson retired from Lockheed in 1975, a few years after Wernher von Braun retired from NASA. It was the end of an era. At the same time Skunk Works was producing planes that were one to two generations ahead of their time, the Air Force had built the first operational intercontinental ballistic missile (ICBM) in less than four years, and NASA’s Apollo Program had put men on the moon in less than a decade’s time. The future projected in Toward New Horizons seemed to be accelerating.

The short timelines of the projects obscured the fact that they were part of much longer research efforts. A direct line can be drawn from von Braun’s Aggregat series rocket development, which started in 1933, and the Minuteman ICBM and Saturn rockets built in the 1960s.. The Blackbird was based on an earlier prototype called the A-12 because it was the 12th plane designed as part of Skunk Work’s “Archangel” program. All these projects were the result of iterative design improvements and were made possible by the compounding knowledge of a relatively small group of men who worked together for decades.

But even if aerospace progress didn’t stop when this generation retired, it certainly seemed to slow. Projects have become more expensive, bureaucratic overhead has increased, and industrial capabilities have eroded since then. The cost of developing a fighter plane increased by a factor of 100 from the 1950s to the 1980s, which resulted in fewer new planes being built. In the 1950s, the American aerospace industry developed 49 planes; in the 1980s, that number had dropped to seven. Instead of working on 20 or more plane designs over the course of a career, an engineer who started his career in the post-Cold War era could be expected to work on one.

A few years after the Cold War was over, there would be only five “prime” aerospace and defense contractors left, and wide swathes of aerospace industry employees left the field completely. Instead of building multiple new planes, the Pentagon tried to save money by building one 5th generation fighter plane that could do it all. This plane became Lockheed Martin’s F-35, which began development in 1995. Nearly three decades later, it is still suffering from a long list of production issues. As of publication, the number of “open deficiency reports” on the fighter plane sits at over 800. 

The issues with the F-35’s production are well-known, but what is less recognized is that it is the most capable multi-role fighter plane ever built. The F-35 is more like a flying supercomputer than a traditional fighter and its ability to process sensor data and relay targeting information to other planes, combined with its stealth technology, enable it to function as a kind of invisible “quarterback” for an American air attack. The F-35 is not primarily designed for dogfighting, but in the Air Force’s annual Red Flag competition its pilots have had a 20 to 1 kill ratio.

The problem with the F-35 is the problem with the current American aerospace industry writ large. It has retained its research and development expertise while sacrificing its manufacturing excellence in a multi-decade deindustrialization process. The plane’s complex supply chain includes 1,800 companies stretched across 48 states and Puerto Rico. The spread-out structure of the supply chain, a stark contrast from Johnson’s philosophy of putting the engineering team in the same physical room as the production line, ensures political support for the F-35 program but exacerbates a series of supply chain and production issues. Due to these issues, Lockheed Martin delivered fewer than 50 percent of the planes it targeted to deliver in 2022.

The erosion of the U.S.’s aerospace manufacturing base that began in the 1990s is only set to worsen. The small manufacturers spread across the country that make up the supply chain of companies like SpaceX and Lockheed Martin are staffed by machinists who are near retirement age. This geographic dispersion causes major problems in the design phase of aerospace projects because the lead time to receive products is so lengthy that it makes it difficult to iterate designs. Instead, engineers have to take even more time to double-check and carefully simulate their designs before committing to the long wait for prototypes. The tight connection between engineering design and manufacturing seen at Skunk Works during the Blackbird era is gone. 

Aerospace is one of the deepest branches of humanity’s technological tree. It is a telling fact that more countries have produced a nuclear bomb than have mass-produced a jet engine. Recent history illustrates how hard it is to build these capabilities. China has provided an estimated $71 billion dollars in funding to the Commercial Aircraft Corporation of China to develop a competitor to Boeing and Airbus, and 15 years later it has barely begun to produce its first operational commercial airline even while its engines, avionics, and other core systems are imported. In Japan, Mitsubishi Heavy Industries spent 15 years and nearly $8 billion attempting to build Japan’s first passenger jet before killing the project in 2023, stating “We didn’t have engineers with such know-how, and it was rather [hard to find] any in Japan.”

The challenge lies in the fact that the process knowledge and specialized expertise of the companies within the aerospace supply chain are nearly impossible to organically replicate. The danger for the U.S. is what happens if this knowledge continues to be lost.

Startups are emerging that are focused on this problem. They use automation and new technology like metal 3D printing to speed up the design iteration and production process. For example, Hadrian is building highly-automated precision component factories and Relativity Space’s rockets are almost entirely 3D printed. These physical technologies are being combined with software that enables the rapid design and experimentation of new aircraft, even virtually “flight testing” the planes and modeling the assembly line used to build them.

It was digital capabilities such as this that enabled the Air Force to design, build, and fly a prototype of a 6th generation fighter plane in only one year, with the plane breaking performance records. It is widely believed that the group behind the plane’s design is Skunk Works, but as in the days of Kelly Johnson its work is shrouded in mystery. It remains to be seen whether these digital methods are a potential new peak of excellence in aerospace or a high-tech bandaid over the loss of hands-on capability.

Lockheed Martin occasionally provides hints of trailblazing projects. One tweet featured an image of the SR-71 Blackbird, noting it is “still the fastest acknowledged crewed air-breathing jet aircraft.” The word “acknowledged” was interpreted by many as confirmation of the existence of the long-rumored “Son of Blackbird,” which is reportedly designed to fly at hypersonic speeds above Mach 5.

The idea of a hypersonic plane dates back to Walter Dornberger and Krafft Ehricke, two German scientists who came to the U.S. as part of Operation Paperclip and proposed a plane concept called Silver Fish. Kelly Johnson’s Skunk Works team later worked on a hypersonic plane program called L-301 before it was canceled in 1977. If Skunk Works has succeeded in building a prototype of the SR-72, it has done so supported by decades of research and development that can be traced back to a decision to bring 1,600 Germans to work in the U.S. in the aftermath of World War II. It was the genius of these men that kicked off the golden age of aerospace, and it is the preservation of their tradition that has kept America at the forefront of air power. But like any tradition of excellence, if it is not maintained then its accomplishments will begin to seem like the stuff of legends—and nothing more.

This was not the first time a wealthy American accused of being a monopolist had sought to rehabilitate his public image through philanthropy. From Stanford University to Carnegie Hall, the names of the Gilded Age robber barons live on in the institutions they supported. 

Before the end of Microsoft’s 18-month trial, Gates would contribute $20.3 billion to his foundation. It was the most expensive charm offensive in U.S. history. It was also the beginning of a strategy that would result in the Bill & Melinda Gates Foundation becoming one of the most influential non-governmental organizations in the world and serving as the latest paragon of an important shift in the U.S.’s political economy.

The Philanthropic Influence Machine

Gates could look back to the example of the twentieth century’s great foundations. Most notable were the so-called Big Three: the Carnegie, Ford, and Rockefeller foundations. Their respective founders had created them to build social prestige and fend off a backlash in public opinion which put their wealth and businesses at risk. 

Carnegie, Ford, and Rockefeller were not ideological innovators. They broadly shared the reigning views of their generation of American elites: elitism, belief in Anglo-Saxon superiority, optimism about social engineering, and belief in the U.S.’s destiny as the world’s pre-eminent power. By putting their fortunes to the service of this consensus, they were able to make a deal: they would be rehabilitated and even elevated as some of the most prestigious benefactors of society. In exchange, they would provide a pot of money and build organizations that would carry out the social programs of the elite consensus without hindrance by the gridlocked checks and balances of formal government. In doing so, they created the new archetype of the public-spirited philanthropist and cast themselves into this prestigious role. 

The interlocking group of para-state foundations, media organizations, universities, and think tanks that they funded served as valuable institutional containers for elite influence networks. Their networks employed the credentialed experts that produced the ideology, institutions, and policies that created a unified American system in the twentieth century. When an idea became embedded within these networks and socialized amongst its members, it came to define political normalcy—the assumptions of the Washington consensus. The Big Three thus became central and influential to the changing structure of institutional power in America. Later institutions like the National Science Foundation, the National Institute of Health, and even the World Health Organization (WHO) were modeled on divisions of the Rockefeller Foundation.

These legacy institutions became blueprints for Gates as well. As early as 1994, Gates was seeking the advice of Vartan Gregorian, president of the Carnegie Corporation of New York. Many early Gates Foundation decisions—including focuses like global health and the U.S. education system, the professional background of its leadership, and its organizational structure—followed the examples set by the Big Three.

Despite years of interest in philanthropy, Gates’s decision to seriously develop his foundation ultimately coincided with an important change to the U.S. tax code: the return of private charitable foundations as a way of getting tax breaks. While foundations are legally required to donate five percent of their assets each year, investment income can result in an ever-increasing pile of wealth. This little-noticed change in tax policy sparked the beginning of a new philanthropic age. Nearly three-quarters of the world’s 260,000 philanthropic foundations were established over the last 25 years, roughly coinciding with the passage of the tax bill. These foundations have wide discretion on how they spend their money. 

From 2014 through 2019, the Gates Foundation earned around $28.5 billion in investment income while giving away $23.5 billion in grants over the same time span—a net profit. Despite giving away over $50 billion since his foundation’s inception, Gates’s personal fortune has grown from $39 billion in 1997 to around $107 billion today.

But the Gates Foundation remains in a class of its own in the foundation ecosystem, having greatly exceeded its predecessors in size and importance. Today, the Gates Foundation has more than double the endowment of the Big Three combined. Bill Gates himself has no peer in the world of philanthropic giving. In 2021, the $15 billion Gates donated amounted to 783 percent more than the second-largest donor in the U.S.

However, as much money as Gates has, his wealth still pales in comparison to the U.S. government, which spent $6.27 trillion in 2022. And unlike America’s billionaires, whose wealth is often illiquid and tied to the fluctuations of the stock market, the political elites who control this spending have few constraints. With this fact in mind, a primary emphasis of the Gates Foundation has become to organize and direct the spending of political elites both in the United States and abroad. Instead of merely giving away his own money as philanthropists in the past have done, Gates has uncovered a way to give away other people’s money.

In this way, the Gates Foundation takes on a role to not just contribute in its own right, but to provide a crucial organizing function for a much larger ecosystem of institutions. But whether by Gates’s own lack of interest in more independent causes, or the structural inability of such a foundation to pursue them, the role of the foundation is limited to effectively pursuing, rather than determining consensus priorities.

An example of this organizing approach is Gavi, a non-profit Bill Gates founded in 2000 that provides vaccines to poor countries. The Gates Foundation provided $4 billion in total to Gavi, including $750 million to get the group off the ground. Gates used this funding commitment to attract the involvement of many of the international institutions that were fostered by the Big Three, such as the World Bank and the WHO. With this backing in tow, Gavi was able to secure $16 billion in funding for the group from governments, including $2.2 billion from the U.S. Over the first 13 years of Gavi’s existence, it provided 440 million immunizations to the poor, which the WHO estimates prevented as many as six million deaths. The priority to provide global health and vaccination interventions was already well-established, but the Gates Foundation provided the crucial organization to achieve results.

The Gates Foundation took a similar approach when it helped start the Global Fund to Fight AIDS, Tuberculosis, and Malaria. The Fund raised $49 billion from governments, including $18 billion from the U.S., with the Gates Foundation pitching in less than $3 billion.

Gates can play this role as an organizing force in the global health system partly because he is the second-largest donor to the WHO, providing over 10 percent of the organization’s annual budget. This largesse has provided him with unprecedented influence over the WHO. Gates’s funding is tied to his Foundation’s agenda, allowing it to direct global health priorities. For example, polio eradication is by far the WHO’s best-funded program because Gates’s funding was earmarked for the cause.

By building an effective fundraising and organizing machine that is aligned with broader elite objectives, Gates has also raised his stature in the international community. One anonymous NGO representative stated that Gates “is treated like a head of state, not only at the WHO but also at the G20.” It is a reputation and strategy that reaches the halls of power in the U.S. as well. This position has allowed the Gates Foundation to play a coordinating role in major domestic political reforms, especially in education. 

The Gates Foundation has spent $8.6 billion over the past 20 years on education-related initiatives and has found the U.S. education system remarkably pliable to its ideas. While the $721 billion spent annually by the U.S. on K-12 education flows through a decentralized system, the Gates Foundation targets its more modest funding toward specific central goals. Its most prominent achievement in education was its backing of Common Core, a reform to harmonize educational standards across states. 

For a cost of around $200 million, the Gates Foundation cultivated support among groups as disparate as public teachers’ unions and the U.S. Chamber of Commerce. The result was a powerful bipartisan coalition of the kind that formal politicians would have had a much more difficult time creating, backed by a sense of “consensus” among experts and prestigious figures like Gates himself. Ultimately, numerous Gates Foundation staffers and associates went on to work in the Obama administration, which also supported the reforms. Less than two years after the Gates Foundation began its campaign, 45 states and the District of Columbia had adopted Common Core. 

The Gates Foundation’s success rested on the fact that educational reform had extensive ideological and political support in Washington. What these supporters lacked was an institutional structure with an activist staff dedicated to making a specific reform happen. By having the Gates Foundation fill this role, Gates himself earned prestige and political favor among powerful allies like the Obama White House while being able to determine some of the resulting content.

What this prestige and effective organization cloaked was the actual outcomes of Common Core itself. Implementation varied widely state by state, and the program faced opposition from parents due to its unfamiliar and confusing methods of teaching subjects like math and reading. Five states have since repealed Common Core, and the program’s impact on student results is increasingly seen as a failure.

This shows a key limitation of the foundation model, and of the entire ecosystem of elite consensus and influence networks that the model operates within. It is limited to organizing power on behalf of the relatively misguided consensus priorities formed by a combination of managerial class interests and what sounds good in the press. It does not have the ability to set those priorities according to a coherent overall strategy, nor to discipline its efforts to actually deliver strategically useful results. The strategic executive function that could redefine or go against consensus is entirely missing. This is what makes the power of Gates himself, or of any other oligarch, relatively harmless to the overall system; however, it also locks that system into a pattern of strategic dysfunction.

None of this impacted the prestige and position Gates had earned from his role in making the Common Core reforms happen. President Obama awarded Bill and Melinda Gates the Presidential Medal of Freedom, the highest civilian award in the United States, in 2016. The following year, the Gates Foundation returned the favor by donating $25 million towards the construction of President Obama’s presidential library. 

Engineering Consensus

Gates’s foundation has secured him incredible leverage when making deals with power brokers. It acts as a valuable fund and a way to mobilize personnel. But he has also developed a larger network of personal relationships that have given him power and influence far beyond the realm of philanthropy, furthering his position as a fixer, funder, and coordinator in the halls of power. This has allowed him to assist with top-level government decisions and to act as a legitimacy-granting figurehead for major initiatives like the COVID vaccine rollout.

When people think of buying influence, they generally think of wealthy people paying for lobbyists and giving money to politicians. Gates himself has been an avid political donor, giving millions of dollars to Democratic candidates for Congress. In 2019, he launched the Gates Policy Initiative, headed by a former senior Obama White House official.

But Gates’s largest political donations do not go to candidates themselves. For example, the Gates Foundation donated $456 million to Arabella Advisors, founded by Eric Kessler, a former Clinton White House official. Arabella is a “dark money” group—it spends money to influence elections, but the source of its money is not disclosed to the public. The group raised $1.6 billion in 2021 and spends its money on groups aligned with Democratic Party leadership. 

The goal of these kinds of donations is not just to influence elections, but also the appointments of cabinet heads and officials—those who ultimately determine policy. The U.S. political system has seen more power delegated to the executive branch each year, with the legislative branch increasingly becoming a junior partner. As a result, executive branch agencies can draft “model” regulations that federal agencies then implement—essentially, writing laws without formal legislation. Gates has placed himself in a valuable position: not only do his donations get people elected, but his foundation can even supply the officials on whom they rely to get policy through. Members of the Gates Foundation have become key members of the Department of Education. The head of the Department of Energy met with Gates within 24 hours of being confirmed by the Senate.

Major legislation decisions are now made behind closed doors by senior leadership, with rank-and-file legislators having limited ability to shape policy or add amendments. Under this system, it takes rare circumstances for legislators to gain real power. One such example is Senator Joe Manchin, the Chair of the Senate Energy Committee, who has been called the “most important swing vote” in the Senate. Manchin comes from a conservative Republican-dominated state and has been a check against the progressive wing of the Democratic Party in the gridlocked Senate. Not coincidentally, at least 50 billionaires have donated money to Joe Manchin over the past five years. He has been receptive to their concerns, including opposing a “billionaires tax” on extreme wealth.

Gates has developed a strong relationship with Manchin, starting at least three years ago when the prospect of the Biden administration taking power created the potential for a bill to subsidize clean energy investments, one of Gates’s long-standing goals. Gates became instrumental in winning the support of Manchin, who was concerned about his constituents losing their jobs in the coal industry. Gates suggested some of these workers could be retrained to build small modular nuclear reactors, such as the ones from TerraPower, a company Gates founded. Ultimately, the Inflation Reduction Act (IRA) was passed successfully at an associated cost of $355 billion, with Gates credited by the Democratic leadership as being instrumental to the effort. And shortly before Christmas, the Gates-backed company Form Energy announced a $760 million factory in Manchin’s home state of West Virginia.

The collaboration shows how the Gates Foundation serves as only part of a wider set of strategies employed by Gates to advance his position. An analysis by The Nation of 19,000 charitable grants made by the Gates Foundation over the past 20 years showed close to $2 billion in donations to private companies, including $250 million to companies in which the Gates Foundation holds stocks or corporate bonds. Many of these recipients were pharmaceutical and medical technology companies involved in global health initiatives, but media organizations were another major category of recipient. The Gates Foundation has given $319 million to media outlets over the past two decades, often paying for journalism related to public health, climate change, and education.

The beneficiaries of the Gates Foundation’s largesse have included some of the largest media organizations in the world, including the New York Times, NPR, The Financial Times, the BBC, and CNN. Gates also maintains a personal involvement in the media landscape. He is a regular at conferences organized by The New York Times, such as its lucrative DealBook conference. Gates has also developed friendships with influential Times names like opinion columnist Nick Kristoff; during Kristoff’s campaign to become governor of Oregon, Melinda Gates served as an influential fundraiser. The Sulzberger family, which publishes the Times, has collaborated on projects with Gates Foundation alumni, such as former CEO Patty Stonesifer.

The relationship between Gates and the Times is another form of gaining leverage. More than most U.S. news institutions, the Times makes top-down editorial decisions about how subjects are covered. For example, it has been claimed that editors at the Times decided that the technology industry could not be covered positively and that a more adversarial tone would be taken in its reporting of the industry. The paper has also become a virtual monopoly with more digital subscribers than the Wall Street Journal, Washington Post, and 250 other Gannett papers combined. Influence with the Times and its editors does not only buy Gates individual stories but an entire narrative about himself, his organization, and his priority causes.

Gates’s success in cultivating a wide array of media relationships also benefits his foundation. The Gates Foundation funds ostensibly independent bi-partisan research to reach its desired conclusions; the media organizations it also funds then cover the results of this research. In essence, the Gates Foundation is paying for the creation of bipartisan consensus around its own ideas. Such media operations furthered goals like the Common Core reforms. More broadly, they have served to shore up Gates’s personal image as a civic-minded philanthropist committed to goals that are universally acclaimed as public goods—an acclamation the Gates Foundation itself secures through its contacts and funding.

When viewing this web of relationships, the overall logic becomes clear: Gates attains prestige and influence in exchange for underwriting the activities of institutional power brokers using an extensive personal network and institutional funding relationships. Common Core and the Inflation Reduction Act were made possible by Gates’s ability to mobilize his foundation and network toward these goals. The trade has proved beneficial: in the roughly 15 years from the start of the Microsoft antitrust trial, Gates went from being perceived as a villain in the tech industry to topping lists of the most admired public figures in the world.

The Self-Replicating Elite

The Gates Foundation’s approach, and the approach of the Big Three, has created a template for others to follow. Billionaires like Mark Zuckerberg and Laurene Powell Jobs, Steve Jobs’s widow, have taken to forming limited liability corporations to give them more flexibility in making political donations and investing in businesses. But more than a template, the Gates Foundation also represents an important tendency in the U.S. governance landscape of decision-making and administrative power. It embodies a move away from the formal government and into an increasingly self-organized ecosystem of foundations, media, and prestige institutions.

These organizations are tightly interconnected, sharing not only donors and goals but even personnel as people move between jobs in the massive nonprofit industry. A simple search of Gates Foundation employees on LinkedIn brings up hundreds of graduates of Stanford, Berkeley, and Ivy League schools; its senior leadership is dominated by graduates of these schools as well. Elite consulting firms like Bain, McKinsey, and Boston Consulting Group appear on the resumes of Gates Foundation employees. 

The interconnectedness of these groups, and of the people who run and fund them, undergirds why Gates’s power does not actually translate into him decisively shaping American public ideology. The Gates Foundation effectively mirrors the beliefs and goals of the U.S. professional class overall—the same people who staff and run it. Gates’s prestige, and that of his organization, is based on his ability to deliver on particular goals within the overall system of power and ideology. In the 2000s, it focused on global development; today, its website displays a commitment to diversity, equity, and inclusion.

This process is not merely a passive one. An array of philanthropic advisors and consultants, stemming from the same classes of people, exists to direct where and how a donor commits their money. One member of the Gates Foundation’s board of directors is Tom Tierney, Bain’s former managing partner, as well as the founder of The Bridgespan Group. Spun out of Bain, The New York Times dubbed Bridgespan “The Consulting Firm that Billionaires Turn to When They Give Away Money.” 

Bridgespan is a pervasive presence among the largest nonprofit groups in the U.S. and is part of what some call the “consult-ification” of philanthropy. By all accounts, many of the largest donors have little idea what they are funding outside of general topics and rely on staffers and consultants to execute projects because they do not have the time or specialized knowledge required. This directly impacts what projects are even possible under the aegis of philanthropy. Only those projects that fit within the confines of what consulting firms view as “best practices” are approved. Newer philanthropic initiatives, like Eric Schmidt’s P150, explicitly target philanthropic advisors rather than donors, since they are the ones who decide the funding targets. When the actual donor does not make the decisions, it is easier to just work around them.

When funding targets are decided by advisors, it becomes even less likely that philanthropy reflects unique or contrarian ideas about the world or what problems are most important. Instead, they reflect the established ideological consensus. That consensus is itself not formed by any careful strategic research, but by a mess of class incentives, activism, political propaganda, and the news cycle. But from the Big Three to the Gates Foundation, the goal of philanthropy has always been prestige within the terms of this consensus, not acting independently from it. Any future strategic function would have to repurpose this ecosystem from the governance role it has grown into, not rely on the prior intent of its participants. 

This is also why initiatives like Gates’s Giving Pledge have been successful: if one is giving money for prestige purposes, it is always better to associate with big, favored names on socially prominent causes rather than go at it alone on underrated ones. It is not so much that members of these networks are told what to think—it’s just that they are there primarily for the prestige and fashionable causes, and they would never have joined or thrived in them if their priority was independent strategic thought. The Gates Foundation has built its success on embracing this structural reality because it aligns with the overall goals that Gates himself has worked toward for his whole life. 

A person’s fundamental dreams and priorities tend to be relatively fixed and most purely revealed when they are young. When Elon Musk was a teenager, he built model rockets, programmed video games, and devoured science fiction books. When Steve Jobs was a young man, he immersed himself in hobby electronics, dropped out of college to work as a video game designer at Atari, and went on a pilgrimage to India to explore Buddhism.

Microsoft co-founder Paul Allen gave a telling anecdote about the young Gates: when he was only 13 years old, he talked about wanting to run a Fortune 500 company. By the time Gates was 17, he had started his first company. Gates has always been interested in the prestige of power and in outsized success. He would achieve both through Microsoft and the Gates Foundation. But neither was built on his original ideas or ideology. Instead, managerial and tactical brilliance became the key to his success. Bill Gates may not have invented the system of foundations, but he has mastered it better than anyone else.

Sputnik’s success created an overwhelming sense of fear that permeated all levels of U.S. society. This included its scientific establishment. As John Wheeler, a theoretical physicist who popularized the term “black hole” would later tell an interviewer: “It is hard to reconstruct now the sense of doom when we were on the ground and Sputnik was up in the sky.”

Back on the ground, the event spurred a mobilization of American scientists unseen since the war. Six weeks after the launch of Sputnik, President Dwight Eisenhower revived the President’s Scientific Advisory Council (PSAC). It was a group of 16 scientists who reported directly to him, granting them an unprecedented amount of influence and power. Twelve weeks after Sputnik, the Department of Defense launched the Advanced Research Project Agency (ARPA), which was later responsible for the development of the internet. Fifteen months after Sputnik, the Office of the Director of Defense Research and Engineering (ODDRE) was launched to oversee all defense research. A 36-year-old physicist who worked on the Manhattan Project, Herb York, was named head of the Office of the ODDRE. There, he reported directly to the president and was given total authority over all defense research spending. 

It was the beginning of a war for technological supremacy. Everyone involved understood that in the nuclear age, the stakes were existential.

It was not the first time the U.S. government had mobilized the country’s leading scientists. World War II had come to be known as “the physicists’ war.” It was physicists who developed proximity bombs and the radar systems that rendered previously invisible enemy ships and planes visible, enabling them to be targeted and destroyed, and it was physicists who developed the atomic bombs that ended the war. The prestige conferred by their success during the war positioned physicists at the top of the scientific hierarchy. With the members of the Manhattan Project now aging, getting the smartest young physicists to work on military problems was of intense interest to York and the ODDRE.

Physicists saw the post-Sputnik era as an opportunity to do well for themselves. Many academic physicists more than doubled their salaries working on consulting projects for the DOD during the summer. A source of frustration to the physicists was that these consulting projects were awarded through defense contractors, who were making twice as much as the physicists themselves. A few physicists based at the University of California Berkeley decided to cut out the middleman and form a company they named Theoretical Physics Incorporated.

Word of the nascent company spread quickly. The U.S.’s elite physics community consisted of a small group of people who all went to the same small number of graduate programs and were faculty members at the same small number of universities. These ties were tightened during the war, when many of those physicists worked closely together on the Manhattan Project and at MIT’s Rad Lab.

Charles Townes, a Columbia University physics professor who would later win a Nobel Prize for his role in inventing the laser, was working for the Institute for Defense Analysis (IDA) at the time and reached out to York when he learned of the proposed company. York knew many of the physicists personally and immediately approved $250,000 of funding for the group. Townes met with the founders of the company in Los Alamos, where they were working on nuclear-rocket research. Appealing to their patriotism, he convinced them to make their project a department of IDA.

A short while later the group met in Washington D.C., where they fleshed out their new organization. They came up with a list of the top people they would like to work with and invited them to Washington for a presentation. Around 80 percent of the people invited joined the group; they were all friends of the founders, and they were all high-level physicists. Seven of the first members, or roughly one-third of its initial membership, would go on to win the Nobel Prize. Other members, such as Freeman Dyson, who published foundational work on quantum field theory, were some of the most renowned physicists to never receive the Nobel.

The newly formed group was dubbed “Project Sunrise” by ARPA, but the group’s members disliked the name. The wife of one of the founders proposed the name JASON, after the Greek mythological hero who led the Argonauts on a quest for the golden fleece. The name stuck and JASON was founded in December 1959, with its members being dubbed “Jasons.”

The Golden Age

The key to the JASON program was that it formalized a unique social fabric that already existed among elite U.S. physicists. The group was elitist, but it was also meritocratic. As a small, tight-knit community, many of the scientists who became involved in JASON had worked together before. It was a peer network that maintained strict standards for performance. With permission to select their own members, the Jasons were able to draw from those who they knew were able to meet the expectations of the group. 

This expectation superseded existing credentials; Freeman Dyson never earned a PhD, but he possessed an exceptionally creative mind. Dyson became known for his involvement with Project Orion, which aimed to develop a starship design that would be powered through a series of atomic bombs, as well as his Dyson Sphere concept, a hypothetical megastructure that completely envelops a star and captures its energy. 

Another Jason was Nick Christofilos, an engineer who developed particle accelerator concepts in his spare time when he wasn’t working at an elevator maintenance business in Greece. Christofilos wrote to physicists in the U.S. about his ideas, but was initially ignored. But he was later offered a job at an American research laboratory when physicists found that some of the ideas in his letters pre-dated recent advances in particle accelerator design. Dyson’s and Christofilios’s lack of formal qualifications would preclude an academic research career today, but the scientific community at the time was far more open-minded.

JASON was founded near the peak of what became known as the military-industrial complex. When President Eisenhower coined this term during his farewell address in 1961, military spending accounted for nine percent of the U.S. economy and 52 percent of the federal budget; 44 percent of the defense budget was being spent on weapons systems.

But the post-Sputnik era entailed a golden age for scientific funding as well. Federal money going into basic research tripled from 1960 to 1968, and research spending more than doubled overall. Meanwhile, the number of doctorates awarded in physics doubled. Again, meritocratic elitism dominated: over half of the funding went to 21 universities, and these universities awarded half of the doctorates.

With a seemingly unlimited budget, the U.S. military leadership had started getting some wild ideas. One general insisted a moon base would be required to gain the ultimate high ground. Project Iceworm proposed to build a network of mobile nuclear missile launchers under the Greenland ice sheet. The U.S. Air Force sought a nuclear-powered supersonic bomber under Project WS-125 that could take off from U.S. soil and drop hydrogen bombs anywhere in the world. There were many similar ideas and each military branch produced analyses showing that not only were the proposed weapons technically feasible, but they were also essential to winning a war against the Soviet Union.

Prior to joining the Jasons, some of its scientists had made radical political statements that could make them vulnerable to having their analysis discredited. Fortunately, JASON’s patrons were willing to take a risk and overlook political offenses in order to ensure that the right people were included in the group. Foreseeing the potential political trap, Townes proposed a group of senior scientific advisers, about 75 percent of whom were well-known conservative hawks. Among this group was Edward Teller, known as the “father of the hydrogen bomb.” This senior layer could act as a political shield of sorts in case opponents attempted to politically tarnish JASON members.

Every spring, the Jasons would meet in Washington D.C. to receive classified briefings about the most important problems facing the U.S. military, then decide for themselves what they wanted to study. JASON’s mandate was to prevent “technological surprise,” but no one at the Pentagon presumed to tell them how to do it.

In July, the group would reconvene for a six-week “study session,” initially alternating yearly between the east and west coasts. Members later recalled these as idyllic times for the Jasons, with the group becoming like an extended family. The Jasons rented homes near each other. Wives became friends, children grew up like cousins, and the community put on backyard plays at an annual Fourth of July party. But however idyllic their off hours, the physicists’ workday revolved around contemplating the end of the world. Questions concerning fighting and winning a nuclear war were paramount. The ideas the Jasons were studying approached the level of what had previously been science fiction. 

Some of the first JASON studies focused on ARPA’s Defender missile defense program. Their analysis furthered ideas involving the detection of incoming nuclear attacks through the infrared signature of missiles, applied newly-discovered astronomical techniques to distinguish between nuclear-armed missiles and decoys, and worked on the concept of shooting what were essentially directed lightning bolts through the atmosphere to destroy incoming nuclear missiles. 

The lightning bolt idea, known today as directed energy weapons, came from Christofilos, who was described by an ARPA historian as mesmerizing JASON physicists with the “kind of ideas that nobody else had.” Some of his other projects included a fusion machine called Astron, a high-altitude nuclear explosion test codenamed Operation Argus that was dubbed the “greatest scientific experiment ever conducted,” and explorations of a potential U.S. “space fleet.”

The Jasons’ analysis on the effects of nuclear explosions in the upper atmosphere, water, and underground, as well as methods of detecting these explosions, was credited with being critical to the U.S. government’s decision to sign the Limited Test Ban Treaty with the Soviet Union. Because of their analysis, the U.S. government felt confident it could verify treaty compliance; the treaty resulted in a large decline in the concentration of radioactive particles in the atmosphere.

The success of JASON over its first five years increased its influence within the U.S. military and spurred attempts by U.S. allies to copy the program. Britain tried for years to create a version of JASON, even enlisting the help of JASON’s leadership. But the effort failed: British physicists simply did not seem to desire involvement. Earlier attempts by British leaders like Winston Churchill to create a British MIT had run into the same problems. 

The difference was not ability, but culture. American physicists did not have a disdain for the applied sciences, unlike their European peers. They were comfortable working as advisors on military projects and were employed by institutions that were dependent on DOD funding. Over 20 percent of Caltech’s budget in 1964 came from the DOD, and it was only the 15th largest recipient of funding; MIT was first and received twelve times as much money. The U.S. military and scientific elite were enmeshed in a way that had no parallel in the rest of the world then or now.

Rolling Thunder

While the Jasons were achieving their early success, the U.S. was deepening its focus on the conflict in Vietnam. By 1964, the U.S. had stationed 23,000 military “advisors” there, up from what had roughly been 800 when JASON was first formed. These advisors faced an intractable insurgency that was logistically enabled by the centuries-old network of roads and footpaths the Americans dubbed the “Ho Chi Minh Trail.”

Sending American soldiers into the jungles of North Vietnam to fight and die in order to cut off this trail was a politically costly option. President Lyndon Johnson became convinced that technology had fundamentally altered air power and enabled the U.S. to unleash its military might in a more restricted, politically acceptable, and even humane fashion. Victory would have to come through the air. Like many great powers throughout history, the U.S. wanted to fight a war that suited its means rather than what would be required.

The question that dominated the debate in Washington was what amount of force would be required to bend the will of the North Vietnamese. Several influential voices in the U.S. administration thought that former President Eisenhower was correct in his belief that the threat of the use of nuclear weapons is what ultimately enabled a truce in the Korean War. Whispers that the U.S. should threaten the use of or actually deploy tactical nuclear weapons were heard throughout the Pentagon hierarchy. Military insiders were remarkably cavalier about the possibility. During one JASON party, a former Chairman of the Joint Chiefs of Staff with close ties to President Johnson remarked to Freeman Dyson that “it might be a good idea to throw in a nuke once in a while just to keep the other side guessing.” 

The situation was a test case for JASON. While critical of the proposals to use nuclear weapons, the group also could not be seen to compromise its political neutrality as an advisory group. Unprompted by the DOD, the Jasons decided to produce a study that, while deliberately limited to technical analysis, was directed at preventing the use of tactical nuclear weapons. Their report raised the prospect of the use of nuclear truck bombs against U.S. bases in South Vietnam and calculated that it would require thousands of nuclear bombs a year to make a barrier continuously radioactive enough that it would keep people from crossing it, among many other deliberately provocative claims. 

In the end, the government took a more limited course of action. In March 1965, President Johnson approved Operation Rolling Thunder, an air bombardment campaign designed to scare the North Vietnamese into negotiating by destroying their supply lines. 

But even this sparked opposition. A few days after the bombing began, the first antiwar protesters appeared outside the White House gates. With the operation underway, JASON was now along for the ride as the Vietnam War grew increasingly controversial.

Initially restricted in scope, bombing sorties quintupled by the summer of 1965 and tripled by 1966. JASON was tasked with studying the effects of the bombing, which it concluded in multiple studies was futile. The North Vietnamese were repairing the damage inflicted by the U.S. as fast as the Americans were destroying it. Nearly 100,000 North Vietnamese worked full-time repairing damage caused by the U.S. bombs and four to five times that amount worked part-time. 

The U.S. Secretary of Defense, Robert McNamara, who was nicknamed a “human IBM machine,” was deeply committed to the idea that decisions should be informed through rigorous statistical analysis and data. He became convinced that the Jasons were right and began telling journalists off the record that Operation Rolling Thunder was a failure. A man who had believed he could “scientifically solve” any problem had come to believe the Vietnam War was unsolvable without resorting to a grotesque amount of force that betrayed America’s ideals.

To block the Ho Chi Minh Trail, McNamara became interested in a physical barrier as an alternative to bombing. In response, the Jasons spent a summer in Santa Barbara researching historical barriers to see what worked and what didn’t. Many in the group alternated their time between surfing and a deep study of the trail based on painstaking reconnaissance done by Americans on the ground in Vietnam, prisoner transcripts, and thousands of historical documents, including some colonial French documents dating back to the 1890s. The Jasons concluded that a physical barrier would be pointless. Richard Garwin, a new Jason who was the author of the first hydrogen bomb design, picked the barrier concept apart by showing over 30 countermeasures the North Vietnamese could employ to defeat it. 

In place of a physical barrier, the Jasons proposed a virtual one. JASON’s plan entailed dropping noisemaker devices on the trails that, when triggered, would in turn trigger noise detectors placed in the trees beforehand. The noise detectors would send a signal to airplanes that would be circling overhead, which would then relay that signal to a central computer to determine the enemy’s position. Computer operators would determine if hostile forces set off the noisemakers and if so, airstrikes would be called in to destroy the target. The program would cost up to $1 billion dollars.

After reviewing the JASON study, McNamara helicoptered in to meet with the Jasons at a summer house in Cape Cod. After talking with the Jasons, McNamara approved the electronic barriers, overriding military opinions about the idea which ranged from skeptical to hostile. The approval pre-empted the timeline preferred by the Jasons themselves, who didn’t believe their proposed system was ready and said it required further study. These concerns were validated in Vietnam where the barrier was plagued by technical issues and limitations, like unreliable sensors and Air Force resistance to being told what to bomb by a computer operator.

With the electronic barrier floundering, McNamara wrote a memo to President Johnson directly lifting lines from a JASON report that made clear Operation Rolling Thunder was failing; the enemy was just waiting U.S. forces out. McNamara became more despondent as time went on, resigning in November 1967 after failing to stop the bombing campaign once again. 

Despite their military failure, the Jasons had navigated their advisory role remarkably well. By maintaining a disciplined role as technical advisors rather than political operators in their own right, their advice had been accepted even when it ran contrary to prevailing opinion. This contrasted with other attempts by scientists to influence government; the physicist Leo Szilard, for example, had been pushed aside repeatedly by politicians who saw him as a threat to their decision-making role. The Jasons, on the other hand, left decision-making to the politicians and were willing to integrate into a political structure in exchange for control over what mattered: their own epistemic discipline. The structure of JASON allowed them to do scientific research properly without getting compromised by political interests. In his farewell speech, McNamara drew on analysis provided to him by the Jasons that previous fall. 

The bombing continued until November 1968. The U.S. would ultimately drop 864,000 tons of bombs on North Vietnam—364,000 more tons than were dropped during the entirety of the Pacific Theatre campaign during the Second World War. The U.S. government later estimated that 30,000 civilians and 28,000 North Vietnamese military personnel had been killed or wounded. As a JASON report stated, the bombing had not broken the enemy’s will at all; it had “strengthened popular support of the regime by engendering patriotic and nationalistic enthusiasm.”

As for the sensors program, it would come back to assist U.S. forces in a future victory at Khe Sanh, a remote Marine Corps base on a mountain plateau near the Laotian border. In January 1968, the base came under siege by North Vietnamese forces. The base held 5,000 Marines and they were surrounded by 20,000 North Vietnamese troops. The only way in or out of the base was through the air amidst anti-aircraft fire. The situation was similar to a 1954 French military disaster where a French base, Dien Bien Phu, was overrun and the French ran out of weapons and supplies. There, around 11,000 French soldiers surrendered, of whom only 3,300 survived imprisonment. The Marines were facing a similar fate.

The U.S. military deployed its new sensor system to Khe Sanh to give the Marines a fighting chance. The Marines started launching artillery attacks and calling in air strikes, using sensor data to predict enemy assembly points. They began wearing portable monitors that beeped when sensors were triggered, enabling them to target enemy forces more rapidly. Instead of being overrun, the Marines inflicted heavy casualties on the North Vietnamese. A Marine officer at Khe Sanh later testified to Congress that without the use of sensors American casualties would have been twice as high. 

America’s military leadership dubbed the concept “the electronic battlefield.” Today, this targeting process is called the “kill chain,” and enabling U.S. forces to rapidly cycle through this chain is now central to U.S. military strategy. The future of the U.S. military has been described as creating a “giant, armed nervous system” that represents an endpoint to the first primitive systems employed in Vietnam.

As scientific advisors, the JASON group did their job well. They had voiced empirical objections to military plans, proposed solutions, and even criticized hasty misapplications of those solutions during the war. But ultimately, the U.S. discovered a timeless lesson of war: technical solutions cannot solve political problems.

The Decline and Future of JASON

The Jasons could not avoid the war’s controversy forever. With each escalation of the war, popular sentiment—particularly in the academic world—became more stridently anti-war. Anger that was first directed at the Johnson administration began to be directed at broader targets, including scientists who worked for the government. 

The Jasons were singled out by activists, and their activities throughout the war were publicized in both mainstream and underground publications. Members faced direct consequences for their affiliation. One Jason had his garage set on fire; another had “war criminal” painted on the street outside of his house. At Columbia University, 49 faculty members signed a petition demanding that Jasons resign from the program or resign from the university. Demonstrators appeared outside their homes calling them “baby killers,” and Jasons were silenced or ejected from conferences.

So far, JASON had managed to maintain its autonomy from political pressure when that pressure came from decision-makers within an established hierarchy. But when that pressure began to come from professional activists, coworkers or professional rivals, and mass harassment campaigns, members began to crack. Many Jasons started quietly quitting. The group dwindled, as it had added only a few new members since its initial formation. The group’s productivity suffered and it began to lose its vitality. 

In the early years of the program, the Jasons thought that both they and the U.S. as a country could work wonders. Many no longer thought that was the case. The social fabric that had enabled the group’s golden age had begun to fray. The U.S. government, in turn, suffered the degradation of one of its most important scientific advisory groups.

The post-Vietnam era also marked a decline in other elements of that social fabric. Congress criticized the National Science Foundation for limiting graduate fellowships to the top students. Instead of research money going to a handful of universities, it was now spread to non-elite schools as well. The PSAC, which continued to advise the president on scientific matters, was originally dominated by a group of Harvard and MIT professors that was dubbed the “River Charles crowd.” This group enjoyed easy access to senior military and political leaders. By the end of the Johnson administration, however, there was only one PSAC member from these elite schools. Members of the group were banned from eating at the White House dining hall.

These trends only accelerated: two of President Nixon’s three science advisors quit because they felt marginalized and useless. Upset when members of the PSAC publicly came out against a U.S. government initiative to build a supersonic commercial transport plane, Nixon disbanded the PSAC in 1972. At the time, a White House staffer was quoted as stating “Who in the hell do those science bastards think they are?” ARPA’s budget plummeted, and research spending declined overall; the golden age was over.

The result was that JASON had to begin looking for new members beyond the old formal and informal networks of scientists that had generated the group’s norms. It began adding new members who were not physicists and were working for other “sponsors” besides the DOD. The group became less cohesive and less elite as it became more diverse. Cliques began forming within the project as its demographics changed. When JASON started it was filled with young prodigies; now its members joked that the name stood for “Junior Achiever, Somewhat Older Now.” 

Through the 1980s, the group’s ability to balance and navigate its political relationships also suffered. Its next important role in the politics of the Cold War began when, to the surprise of his scientific advisors, President Ronald Reagan announced his Strategic Defense Initiative (SDI), an anti-nuclear missile defense system. The project became popularly known as Star Wars. The Jasons were vociferous in their opposition to Star Wars and presented the DOD with a torrent of negative criticism for years, to the dismay of the Pentagon.

In 1989, the Jasons were then asked to review an SDI program called Brilliant Pebbles, which entailed deploying a cloud of satellites that could ram themselves into enemy missiles in Kamikaze-style attacks. Pentagon officials declassified a summary of the JASON report stating that the group had “endorsed the concept” and announced that they intended to triple its budget to $55 billion.

But the group felt that the Pentagon had misrepresented its position. It made an overtly political move in response: contradicting the government in statements to the press. Members of JASON, including its chairman, told journalists that the Pentagon was overstating its support and that the concept would be leaky at best—countermeasures would be cheap and plentiful. The blunt comments enraged the Strategic Defense Initiative’s leadership. JASON’s chairman attempted to backtrack, but the damage was already done. The Brilliant Pebbles program was shut down in 1993. The group had managed to save its reputation from government overstep, but it had also burned trust with its political patrons as a result.

When the Cold War ended in 1991, the Jasons were left with a diminished reason for existence. The central scientific problems of the Cold War existed within the realm of physics. In the post-Cold War environment, questions of biology and information technology were of more importance and prestige. In the mid-1990s, JASON began to study biotechnology, including methods for detecting biological weapons. 

The shifting winds of political interests also threatened what remained of the original social fabric of the JASON program. Having already expanded to other parts of academia, the government was now pressuring the group to take on members from business as well. In 2002, DARPA finally ended its JASON contract after it refused to add three members from the tech industry with underwhelming academic credentials. 

JASON survived, but only by cultivating other government agencies as sponsors. While the original group’s work had been the result of a natural convergence between the existing scientific community and government goals, it now had to actively seek and meet demand in order to survive. The scientific working group had become a technical consultancy operation.

Despite this change in its incentives, JASON managed to maintain one vital trait of the group: a refusal to compromise its methods in the face of political pressure. In 2017, U.S. officials in Cuba began experiencing a wide range of strange medical symptoms, including pain and neurological injuries. The condition became known as Havana Syndrome, and in the following years around 200 U.S. officials in China, India, Europe, and elsewhere reported experiencing the same strange debilitating symptoms.

The origins of the syndrome were mysterious, but a CIA investigation pointed the blame at Russia. The National Academies of Science, Engineering, and Medicine (NASEM) eventually validated this assessment in a December 2020 report commissioned by the State Department that concluded microwave energy was the most likely cause of the syndrome. Russia had long experimented with microwave energy weapons and was viewed as the likely culprit.

JASON was tasked by the DOD with producing a classified report that included examining recordings of sounds that were made at the time of some of the attacks. A close analysis of the data came to the opinion that the most likely culprit of the reported noises was a biological source: Indies short-tailed crickets. Instead of a Russian superweapon, JASON believed CIA agents and State Department officials were experiencing a case of mass psychosis.

The conclusion was unwelcome news to the Pentagon; the Havana Syndrome was a useful data point to validate the threat posed by Russia when proposing budgets and U.S. defense strategy. The JASON report would ultimately be declassified in 2019, but not before its funding was cut by Michael Griffith, the Defense Department undersecretary for research and engineering, despite a directive from Congress to engage JASON on “methods to defeat existential and technologically-amplified threats to national security.”

Griffith had clashed repeatedly with JASON when he was the CTO of SDI in the 1980s. By cutting its budget he was eliminating the threat of a scientific narrative counter to his own filtering up to the president. In sharp contrast to the Eisenhower administration’s PSAC, Trump’s de facto science advisor was a 31-year-old former political science major. By controlling the narrative, Griffith could control what threats got prioritized, and what research and development programs got funded.

A cynical way to understand the event is that the NASEM understood the assignment and JASON didn’t. What the Pentagon wanted was an elite scientific body to lend its credibility to the view that Russia was behind the Havana Syndrome. 

Under these circumstances, it was simply not possible for the JASON project to operate properly. Its foundation had come with a simple understanding: Jasons would do scientific research and give honest answers to officials on questions of interest, while those officials would make the necessary decisions with the information they received. This required a degree of trust and even secrecy.

By the time of the Havana Syndrome affair, the deal was undone. JASON had been able to survive the loss of its original social fabric, but following the breakdown of this political relationship they lost important political patrons as well. For now, the organization continues to exist. JASON ultimately received a reprieve from the Department of Energy, but its future remains tenuous.

The U.S. has proven willing to spend—including the $52 billion dollar Chips and Science Act and a requested $130 billion in 2023 defense R&D—but enormous government spending does not substitute for a generative intellectual ecology. Research positions are now low-paid compared to modern alternatives. Credentialism is far stronger than it used to be, and recognition is harder to get. What made JASON possible was the convergence of two factors: a competent research community willing to strictly act as advisors, and political officials who wanted that advice to be truthful rather than convenient.

The ensuing shortages and rationing led Western nations, especially the U.S., to ramp up production. President Richard Nixon launched Project Independence, an initiative that called for the United States to achieve energy independence by developing alternative energy sources and building 1,000 nuclear power plants. The initiative failed as fears surrounding nuclear energy grew and renewable energy technology of the time proved inefficient. However, it led to the creation of the Department of Energy and funding of the research that was essential to the development of our modern renewable energy systems. Its fruits include electric vehicle batteries and the fracking technology that enabled the U.S. to beat OPEC, helping it reclaim its crown as the largest producer of oil and gas in the world. Today, the US accounts for 20 percent of global output and is a net exporter. Oil is a valuable weapon, but one that can backfire on those who use it.

The Ukraine War is resulting in the biggest shock to the global energy system since the 1973 crisis. Two changes are already evident: The first is that Russian gas is being replaced as quickly as possible with liquified natural gas (LNG), supplied primarily by the U.S., Australia, and Qatar. The second is an acceleration of the transition to clean energy, mainly wind and solar, as no Western country has reintroduced nuclear energy at scale.

These changes will permanently alter the map of our energy economy. But they suffer from one major limiting factor: the mineral inputs are increasingly expensive and increasingly unavailable. Solar and wind require a roughly tenfold increase in the tonnage of mineral inputs compared to a natural gas plant delivering the same amount of energy. Other parts of the electrification of our economy are similarly mineral-intensive; EVs require six times as many mineral inputs as a traditional car. 

The green energy transition is, in reality, an electrification transition. Electrification requires hardware, and hardware requires mines. Some of the minerals critical for electrification include copper, nickel, cobalt, lithium, rare earth elements (REE), graphite, and polysilicon. Of these, copper and lithium are the most important. Copper has been called the “metal of electrification” because it is needed in everything associated with the transition to clean energy and electric vehicles. Lithium has earned the nickname “white gold” because it is needed for the lithium-ion batteries that are used for the grid-stabilizing energy storage, and to power Tesla cars and iPhones.

Commodity materials account for up to 70 percent of the cost to produce an EV battery. In turn, nearly one-third of an EV’s total cost is the cost of its battery. The same holds true for solar modules, with 70 percent of their cost coming from minerals. Wind turbines are in a similar situation. The IEA estimates that achieving net zero emissions globally by 2040 would require six times the amount of mineral inputs we currently use, and that the annual critical mineral demand from clean energy technologies will reach more than $400 billion by 2050.

But the chances of meeting those targets at all look slim. An analysis by the energy consulting firm Wood Mackenzie found that if EVs accounted for two-thirds of new car purchases by 2030, it would require dozens of new mines that are the size of the world’s largest in each key category. These mines are not currently being planned. And per the IEA, it takes an average of 16 years from initial discovery to open a mine. That’s a supply gap that doesn’t look good for meeting the official targets.

There is no escaping the fact that extracting and refining natural resources is going to remain the basis on which all industrial societies must be built. And control over these resources means political power; as Henry Kissinger once said, “Control oil and you control nations.” To the degree that governments embrace electrification, minerals become the new oil.

This is a problem for the U.S. Unlike oil and gas, the U.S. is currently at a disadvantage in trying to control these resources. The U.S. started the lithium industry and ranks among the top five in known reserves, but only produces about one percent of the world’s output. More than 80 percent of the world’s lithium is mined in Australia, China, and Chile. China also controls more than half the world’s lithium processing and 75 percent of its lithium-ion battery factories per the IEA. With copper demand expected to double by 2035, the U.S. is projected to need to import 70 percent of its supply. This will compound the U.S.’s energy dependence problem—80 percent of its rare earth metals are already sourced from China, and nearly 100 percent of them are processed there.

And so on down the line: there are 35 minerals that have been identified by the Department of Defense as being critical to national security. Of these, the U.S. had a 100 percent import reliance for 14 minerals and an additional 14 had a greater than 50 percent import reliance in 2020.

China, meanwhile, is dominating the minerals world on all fronts: mining, refining, and production of advanced technologies. China accounts for 80 percent of the global supply chain of solar technology and is projected to grow this share to 95 percent by 2025.

China’s Grand Prize

Chinese control over the metals that are set to power our future did not happen by accident. Under China’s “Military-Civil Fusion” concept, all businesses must tolerate interference in a way that would be illegal in the West. This allows China to execute long-term strategic plans combining state resources and capabilities combined with ostensibly private businesses.

To get to this point, China relied on numerous middlemen to facilitate relationships between Chinese and foreign companies. One story from the oil business is a perfect example. Yang Quinlong, better known as “Crazy Yang,” was a businessman who founded the Zhuhai Zhenrong trading house in 1995. Yang was a heavy drinker with many personal quirks, including wearing a green army jacket everywhere he went. After greeting his guests with a powerful bear hug, lifting them off the ground, he would regale them with stories about his time in mental hospitals as a child. His eccentricities did not stop him from becoming a major player in the international oil trading business.

With the backing of military friends, Yang set out to formally import oil from Iran in defiance of U.S. sanctions. At one point Yang was importing one-sixth of the oil imported by China and was twice sanctioned by the White House. This was irrelevant to Yang because he had no assets in the U.S. and little need to use the its financial system. 

Yang’s risk appetite and the irrelevance of U.S. sanctions made him and his peers different from all the other players in the commodities market. Bribes have been common in the commodities trading industry since its inception. Glencore, the world’s largest minerals trader, recently settled with authorities in the U.S., U.K., and Brazil for $1.5 billion dollars over a bribery scandal. Glencore traders used coded language such as “chocolates” and “newspapers” in emails to refer to widespread bribes in countries like Brazil, Cameroon, Nigeria, and Venezuela. But the incentive for Glencore and its peers around the world to follow U.S. bribery laws is that access to the U.S. financial system is of paramount importance. The same isn’t true for many of its Chinese peers.

Chinese miners and commodity traders act as extensions of the Chinese state, and the state’s strategic control of critical minerals overrides any financial goals. China is willing to prop up unprofitable businesses, enable predatory pricing, and leverage state power for the benefit of its mining sector. This approach is designed to enable China’s broader grand strategy. 

The grand prize for China is control over the entire electrification supply chain, from mining minerals and refining them to building wind, solar, and battery technology. If China obtains a monopoly position in lithium-ion battery production, it would give it enormous leverage over the $2 trillion dollars-a-year automotive industry. A lack of batteries would mean an inability to produce EVs, which could mean bankruptcy for some of the largest companies in the world. 

In a world where China dominates the electrification supply chain, its control over the clean energy and automotive sectors serves as a useful political weapon. Nowhere in the world has felt the effects of China’s disciplined strategy more than Africa.

America’s Exit From the Frontier Markets

In 1960, President Eisenhower was on vacation at a seaside resort in Newport Rhode Island when he decided that Patrice Lumumba—the newly-elected prime minister of the then-Republic of the Congo—needed to be killed. Lumumba, a charismatic, national liberation-preaching former prisoner, was viewed as a potential African Fidel Castro, and the Congo seemed ripe for Soviet takeover. The CIA dispatched Sidney Gottlieb—the top scientist who had previously researched mind control and given LSD to hundreds of unsuspecting test subjects—to the Congo. He delivered a poison that could be injected into Lumumba’s toothpaste. The plan failed, but Lumumba would ultimately be shot and killed by a Belgian mercenary with a submachine gun on the last day of Eisenhower’s presidency.

The animating fear of the Americans was that the Soviet Union would gain control of the Congo’s minerals, which are both abundant and of extraordinary purity. Of particular importance was uranium; the Congo was almost the sole source of uranium for the U.S. nuclear program from the 1940s through much of the Korean War. The U.S. disguised uranium imports to make it appear as if they originated from Canada, and the U.S. Joint Chiefs of Staff made plans to seize parts of the Congo if needed.

The U.S. provided hundreds of millions of dollars in development aid to the country, and covertly gave millions to Joseph Mobutu, who was president of the country from 1965 to 1997. He was also a repeat guest at the White House; during one evening boat ride on the Potomac River with President Nixon, he agreed to provide a concession of cobalt and nickel to an American firm. 

U.S. miners maintained a leading position in the Congo long after the Soviet collapse. One of the most prominent firms was the Arizona-based Freeport-McMoRan, which owned Tenke Fungurume, a massive copper and cobalt mine. But the mine became an archetypal case of U.S. deals leading to a Chinese takeover of the Congo’s mineral wealth. In 2009, Freeport sold Tenke Fungurume to a Chinese state-backed group to fund its way out of the financial crisis. Freeport held on to another undeveloped site in the Congo that contained one of the largest potential sources of cobalt in the world before selling it to a Chinese group in 2016.

None of these deals made waves among regulators. While the Committee on Foreign Investment reviews investments made by foreign companies in the U.S. for national security risks, there is no oversight of transactions made by American companies in foreign countries, particularly free-market ones. As their liquidity and ambitions grew, Chinese firms systematically bought out other U.S. and European miners. Chinese firms now control most of the Congo’s copper and cobalt production. The DRC produces 70 percent of the world’s cobalt, a critical material for EV batteries, and China processes two-thirds of the world’s supply.

Conditions in the Chinese-controlled mines are brutal, with one Western mining executive who visited a mine comparing it to an internment camp. A video shared with a journalist for the New Yorker showed an armed Congolese guard beating a semi-naked, tied-up man lying in the mud. The man recording mostly speaks in Mandarin, but orders the guard to beat the worker in Kiswahili.

Chinese miners also purchase cobalt from the independent “artisanal” mines in the Congo which produce 20 percent of the country’s cobalt. These mines are known for their unsafe conditions and roughly 40,000 children work in them, many of whom have been trafficked due to their ability to crawl into narrow mining shafts. Death and injuries are common, as well as dangerous superstitions that have led to abuse, like the belief that sex with a virgin provides safety to miners.

On a more systemic level, the Chinese strategy of gaining control over Congolese minerals involves bribing the DRC’s power structure to privilege its interests. In 2007, China signed a $9 billion dollar deal with the DRC to secure mineral rights in exchange for infrastructure. In 2021, 3.5 million documents from the private commercial bank BGFI were leaked in an event called the “Congo Hold-up,” revealing that Chinese companies moved millions of dollars into former DRC President Joseph Kabilia and his family’s accounts during the negotiations period. The deal left the Chinese with a nearly 70 percent share in a Chinese-DRC mining joint venture, even though the Congolese provided all the mining assets and nearly a third of the start-up capital.

Beyond bribes, China has created a vast spying apparatus throughout Africa. Chinese firms have built at least 186 government buildings in Africa and at least 14 sensitive intra-governmental telecommunications networks. It has also donated computers and smartphones to at least 35 African countries, which is akin to the NSA sending a foreign government a shipment of laptops as a gift. 

The French newspaper Le Monde reported that servers installed by the Chinese company Huawei in the African Union headquarters were uploading daily content to servers based in China. An inspection of the building—which was built by a Chinese contractor—uncovered hidden listening devices throughout the building. Chinese construction companies have built or renovated at least 24 presidential offices or residences and dozens of other sensitive high-level government buildings. Western intelligence agencies believe the Chinese use their African spying apparatus to acquire information that provides an advantage in negotiating deals as well as embarrassing or politically harmful information that can be used as leverage against African countries’ leadership.

China has used the Congo as its template for securing mineral rights in other parts of Africa and elsewhere in what are known as “frontier markets.” A 2010 USGS study found that Afghanistan had at least $1 trillion in untapped mineral wealth, including some of the largest high-quality rare earth deposits in the world. As soon as the U.S. left Afghanistan, numerous Chinese mining firms were in Kabul negotiating for mining access. The long Afghanistan war arguably ultimately ended with a Chinese strategic victory.

One of the beneficiaries of U.S. military spending during the Afghanistan War was Blackwater, the notorious private security company. Its founder, Erik Prince, has reemerged as the CEO of Frontier Services Group, which is based in Hong Kong and partly owned by a Chinese state-run investment firm. Employing numerous former U.S. special operations forces personnel who fought in Afghanistan, it focuses on providing security for Chinese infrastructure projects abroad, including African mines. In a dark twist, the imperial spoils taken by China while the U.S. was engaged in futile wars are now being secured by some of the same Americans who fought in those wars.

How America Lost the Rare Earth Battle

While China has been systematically locking down the mineral supply around the world, the U.S. has proceeded to surrender some of its most important domestic production capacity. A fundamental problem is that, unlike during the Cold War, it has not developed a coherent state-level strategy that enables it to act in a systematic way to advance its interests like the Chinese. Instead, it falls back on the markets.

The most salient example of the U.S. surrendering its lead is with rare-earth elements (REE). REE aren’t rare, just difficult and costly to extract. They must be purified through a harsh process that involves numerous separation steps. Although abundant, REE are not often found in concentrated deposits. They have a range of unusual properties which make them a critical component in producing advanced technology. Perhaps most importantly, some REE have super-magnetic properties which are needed to create the permanent magnets required to manufacture everything from fighter planes to iPhones to wind turbines.

From 1952 to 1990, the only major source of REE worldwide was the Mountain Pass Mine, located in California’s Mojave Desert. This monopoly was broken by China, which also had high-quality REE deposits. Unlike the U.S., it also had low labor costs and nonexistent environmental regulations. The Chinese then used predatory pricing to flood the global market until its U.S. competitors could no longer compete. 

The last U.S. company making rare-earth super magnets was Magnequench, which was sold in 1995 to a consortium with ties to the Chinese government; a few years later it closed its U.S. operations and moved production to China. Slowly and methodically, the Chinese turned a U.S. monopoly into a Chinese monopoly with no U.S. government resistance. 

The Mountain Pass Mine was ultimately forced to shut down after its owner declared bankruptcy. It was bought out of bankruptcy by MP Materials, which was founded by a hedge fund manager in 2017. The mine now supplies 15 percent of the REE consumed globally each year and can meet all the U.S. military’s rare-earth requirements. However, the mine is partially owned by Chinese investors and ships its concentrate to China for refinement.

The U.S maintains a National Defense Stockpile of REE, but it mostly consists of unprocessed ore that would likewise require refining in China. In the event of a war with China, the U.S. could also find itself unable to make many of its own advanced weapon systems without access to Chinese REE refiners.

The Trump administration began to try and reverse course, with Trump signing an executive order directing the government to adopt a strategy for critical minerals. As a result, the Department of Defense has provided tens of millions of dollars in grants to bring processing capacity back to the U.S. This year, MP Materials began construction on a $750 million dollar magnet manufacturing facility in Fort Worth. The DOD is also investing $120 million dollars into a new plant for heavy earths separation, and is working on a complementary light rare-earths separation facility. These American upstarts and their peers are still dwarfed in size and scale by the Chinese, who control the global price for REE through export quotas. 

It’s a similar story for other minerals. Twenty years ago, the U.S. produced nearly a quarter of the world’s polysilicon, a key component of solar panels. In 2006, a Chinese firm signed a technology transfer agreement to obtain access to the Siemen process, the dominant technology used for producing polysilicon. By 2012, China had overtaken the U.S. lead with a 30 percent share, which has now grown to 76 percent. Today less than one percent of the world’s polysilicon is produced in the U.S., while China is projected to control more than 90 percent of the market. Over half the world’s polysilicon is produced in the Xinjiang region, and it’s suspected that many Uyghur “re-education” facilities involve work in polysilicon factories.

Polysilicon and other critical metals such as aluminum are formed through a highly energy-intensive process. Aluminum, which China is the largest producer of, requires so much energy to produce that commodity traders call it “congealed electricity.” China uses cheap coal power to supply the energy that is needed to produce these metals, which ultimately end up in nearly all major Western green energy infrastructure. Ultimately, it is Chinese coal power that makes our green energy transition possible.

Operation Dragonbridge

The outlines of a coordinated U.S. strategy are starting to appear. In June 2022, the U.S. formed the Minerals Security Partnership (MSP) as a kind of “NATO for minerals” along with Canada, Australia, the UK, France, Germany, Japan, and South Korea. Many of these countries lack much internal mining capacity, but there are some exceptions.

Australia, in particular, is a minerals superpower and the second-largest mining nation in the world. It possesses a wide array of minerals in large quantities, including copper, nickel, aluminum, REE, and uranium, and is by far the world’s largest producer of lithium. Canada is one of the largest minerals producers as well, with reserves of lithium, copper, nickel, graphite, aluminum, and manganese. It also has substantial REE potential reserves. Canada’s Northwest Territories, if made accessible, could provide a near-unlimited source of untapped mineral resources.

And then there is the U.S., which possesses up to $150 trillion worth of largely untapped mineral resources on federal lands alone. There are multiple reasons for this lack of relative development, but chief among them is it is the long and expensive process required to open a mine in the U.S. It takes seven to ten years on average, which is tied with Papua Guinea for the longest approval time among the top 25 mining countries due to a politicized regulatory process and ubiquitous litigation. This adds enormous costs and risks, and the potential prize must be extraordinary to make it worth it for mining companies. For example, Rio Tinto and BHP, the two largest mining companies in the world, have spent years and over $2 billion in capital attempting to open the Resolution Copper mine in Arizona without producing any copper. Given the costs, even U.S. miners have preferred to look overseas, where it is much easier and cheaper to develop assets.

A prime example of the challenges of opening a mine in the U.S. is the Thacker Pass Mine in Nevada, one of the largest lithium resources in the U.S. After years of development, the Trump administration pushed through permits for the project ahead of President Biden taking office. Opposing the mine has been a coalition of activists typical for mining projects: Native American tribes and environmental activists. The investment firm MSCI estimates that 97% of nickel, 89% of copper, 79% of lithium, and 68% of cobalt reserves in the United States are within 35 miles of Native American reservations.

China has sought to exploit this vulnerability in the U.S. system. Earlier this year, China launched an information operation known to researchers as Dragonbridge, which flooded social media platforms with posts raising environmental concerns about rare-earth mining and processing. In July 2022, the FBI issued warnings about Chinese influence operations aimed at tribal, business, and political leaders.

The tribe involved in the Thacker Pass dispute was the Paiute tribe. Tribal lore holds that the proposed $1.6 billion mining project is located where 31 members of its tribe were killed by U.S. cavalrymen. Joining the Paiute was the Deep Green Resistance, a self-described “radical environmental movement” that wants to “dismantle industrial civilization by any means necessary.” However, the alliance between the group fractured because Deep Green Resistance also opposes initiatives like transgender access to womens’ bathrooms. The perceived anti-trans stance of Deep Green Resistance was a step too far for the other activist groups, splintering the alliance. 

A U.S. federal judge ruled that the mine’s owner could begin excavation to determine if the land holds historical importance to the tribe, denying a request from environmental groups who claimed the project would negatively affect sage grouse, a non-endangered species, in the area. A decision on the final appeal to the lawsuit is anticipated for August 2022.

Thacker Pass isn’t the only potential critical minerals motherlode in the U.S. Lithium can potentially be extracted from the hot brine beneath the Salton Sea area of California. If fully developed, the area could supply up to 40 percent of the world’s lithium, turning California into the Saudi Arabia of lithium. However, the method for extracting this lithium is unproven at scale and California has already introduced a flat tax on lithium production, which has caused numerous interested producers to delay or kill planned projects. There are plenty of other examples: a 34-mile geological formation in Idaho that contains one of the largest cobalt deposits in the world; potential REE mining sites in Arizona, Texas, Wyoming, and Alaska; and so on.

Despite the difficulty in opening mines, the U.S. is still the third-largest mining nation in the world. Were the U.S. and Australia jointly committed to developing their natural resources sectors, an alliance like the MSP would be a powerhouse. Were the AUKUS countries—Australia, the UK, and the U.S.—jointly powered by their natural gas resources, exporting LNG, and undergirded by U.S. technological and economic strength, they would wield far more power than China alone.

With such a large-scale initiative far off in the future for now, companies are trying to engineer their way out of the upcoming minerals shortage. Tesla’s induction motor, for example, uses electromagnets instead of permanent magnets, which means they do not require REE. Tesla has also confirmed that nearly half of the vehicles sold in recent months use cobalt and nickel-free iron-phosphate batteries. The company is exploring manganese batteries which could potentially offer higher energy density than iron-phosphate batteries and lower prices than nickel-rich batteries.

Tesla has also sought to secure its own supply chain, signing multiple supply megadeals in Brazil and Indonesia, and has discussed mining and refining lithium directly. It has also signed deals to obtain cobalt and lithium from Chinese firms, increasing the potential leverage of China over Tesla—leverage which the Shanghai Gigafactory, for example, already provides.

J.B. Straubel, the cofounder of Tesla and its former chief technical officer, is pursuing another approach with his new startup, Redwood Materials. Redwood Materials recently committed to spending $3.5 billion developing a plant in Nevada where it plans to recover over 95 percent of the lithium, copper, nickel, and cobalt from EV batteries. The ability to recover minerals at a cost that is competitive with mining them presents an enormous economic opportunity. But for now, technical barriers persist.

There are limits to what can be done with recycling and engineering. Impacting materials demand in a net zero world would require more than small efficiency gains. Researchers estimate that a tenfold increase in the efficiency of solar and wind technology is needed to achieve a meaningful reduction on mineral requirements—a goal that doesn’t even seem theoretically possible.

These cumulative pressures have even brought nuclear power back into the game. In August 2022, the U.S. Nuclear Commission did something it hasn’t done in decades: certify the design of a completely new reactor. The design by Portland-based NuScale Power is for a small modular reactor. Up to 12 reactors can be placed on NuScale’s VOYGR plant design, generating 924 MWe of power, enough to power over 700,000 homes. A hypothetical project to repower the dozens of coal plants scheduled to be shut down over the next decade with SMR nuclear reactors would provide for a significant chunk of the nation’s power needs using clean energy. Unlike wind and solar, it would not require a massive expansion of the electrical grid because the plants are already connected. No such plan is under discussion.

Another option is building what are called Allam cycle natural gas plants. This novel U.S.-developed technology uses the oxidation of hydrocarbon fuels in a high-pressure transcritical CO2 working fluid. The recuperated cycle allows the capture of all CO2 emissions. A demonstration plant is operating in Texas, and multiple power plants in the 280–300 MWe class range are in the planning stage. This is enough capacity to power 250,000 homes and is perhaps the only option for producing clean energy without increasing the cost of power generation.

The Coming Mineral Conflict

As the world’s energy economies become more electrified and by extension more mineral intensive, minerals will become a major part of the U.S.-China contest for power. This contest will play out across multiple dimensions. For example, espionage or military questions inevitably play into mineral disputes. The Congo Hold-up leak operation required a sophisticated hack or insider source that suggests state-level involvement. 

The U.S. Joint Special Operations Command (JSOC) is likewise active in Africa, with forces seeing combat in at least 13 African countries over the last decade. Among JSOC forces is a little-known unit commonly referred to as “The Activity,” which specializes in planting electronic spying devices that link up to the NSA’s larger spying infrastructure. The CIA has always been active in Africa and has gone to great lengths to gain access to insider information throughout the global financial system. There is no hard evidence of U.S. intelligence involvement in the Congo Hold-up leak, but it is noteworthy how this information appeared over a decade later right when the U.S. was refocusing its attention on critical minerals. 

Regardless of who leaked the data, the result was a scandal in the Congo that resulted in a Congolese court giving the DRC direct control of one of the world’s largest sources of cobalt while allegations against the mine’s Chinese owners were investigated. 

Both covert and overt methods will be in play in the battle for the world’s minerals, just as they were for the world’s oil. But as energy sovereignty becomes more crucial to great power competition, drastic outcomes become possible. Project Independence wasn’t the only plan on the table during the 1973 oil crisis; the Pentagon discussed an airborne military operation to seize the oil fields throughout the Gulf Arab states and hold them for ten years or longer. Fortunately, it didn’t have to happen. But as the stakes of today’s mineral conflict keep rising, so do the dangers inherent to great power competition. Just as in 1973, only a philosophy of energy sovereignty can prevent escalation.

After four years of congestion and construction, and with the project a year behind schedule, Sepulveda was trying everyone’s patience. One of the people fed up with the project was Elon Musk. His daily commute to and from SpaceX’s headquarters was taking over an hour due to construction delays. He went to Twitter with his frustration and began openly speculating about buying tunnel boring machines (TBMs) to drill under Los Angeles, offering to pay for the cost of adding more workers to the project. When he investigated TBM technology he discovered that it hadn’t improved in decades—a snail moves 14 times faster than the best drill. A year after his initial tweet, Musk launched the Boring Company, a tunneling technology company devoted to building TBM that can “beat the snail.”

Starting a construction technology company is an unusual response to the frustration caused by infrastructure projects, but another one of his moves was more traditional. He donated $50,000 to a political pressure group to exert influence on the project and speed its construction. The carpool lane was finished in 2014.

Despite political and logistical obstacles, Kiewit, the construction firm overseeing the project, managed some aspects of the project well. The company oversaw a bridge demolition that was completed 17 hours ahead of schedule in an event that the national media had anticipated being a “Carmageddon,” due to its potential impact on L.A. traffic.

But this logistical competence masked underlying issues that had doomed the project from the start. When Kiewit first began digging at the site it discovered nine miles of utility lines that its client, Los Angeles Metro, didn’t know about. Disaster struck again when a novel vertical retaining wall design began buckling; it turned out that metal straps connecting the panels had broken and the wall had to be demolished. This resulted in a wave of lawsuits and project shutdowns. More lawsuits and pressure would come; a Bel Air landowner’s lawsuit forced the redesign of an on-ramp near the Getty Museum while a local group demanded the Mulholland Bridge be redesigned.

This required extensive, time-consuming negotiations that froze the project, with costly equipment and workers left idle. The relocation of utility lines and redesigned structures added enormous costs. Protecting just one undocumented drainage culvert on the project cost nearly $30 million. All these changes created what Kiewit would later describe in a lawsuit as a “bureaucratic quagmire,” with the firm having to double its personnel working on the project to 300 people, just to manage changes and pay for cost overruns.

The construction work itself required ramp and lane closures that were poorly announced by Metro, and its official detours were widely mocked as indecipherable “roads to nowhere” that left motorists lost and stranded. The result was a project that, instead of alleviating traffic, inflicted gridlock on motorists for half a decade.

The Federal Highway Authority’s investigation of Sepulveda found that seven of the 13 largest causes of the delays to the project were related to undiscovered utilities. Other Metro oversights include failure to obtain right of way access and mismanaging the design change process. After years of litigation, the L.A. Metro issued a nearly $300 million settlement to Kiewit, stating “frankly there were deficiencies” in how it managed the project.

Sepulveda was completed more than a year behind schedule for $1.6 billion dollars—55 percent over its initial budget. Because it was the result of a series of negotiated agreements with local groups, aesthetically it is an incoherent hodgepodge. In one section a pattern of birds was sand-blasted into the walls after a series of 20 meetings with nearby homeowners. In other sections, plain retaining walls stretching up to the height of a six-story building are in place.

The entire $160 million-per-mile road lane project, and the five years of gridlock it created, were justified by the promise of shaving one minute per mile off commute time for its users. The final indictment of the project was a Metro study that found that Sepulveda had actually made commute times longer.

Inflection Point

Sepulveda’s cost and schedule overrun aren’t even the worst of it. Just as unattainable as a shortened commute is the Californian dream of building a bullet train that could take you from Los Angeles to San Francisco in under three hours. In 2008, a year before the Sepulveda project began, the state tried to turn this dream into a reality after voters approved a 512-mile high-speed rail (HSR) project. Amid failing overseas wars and financial crises, at the time it could’ve become a symbol of renewal not just for California but the entire country. Instead, it came to exemplify a dysfunctional government that lacks the capacity to build.

At the time California began accelerating the development of its HSR system it only had 10 employees dedicated to overseeing what was the most expensive infrastructure project in U.S. history. It ended up 14 years (and counting) behind schedule and $44 billion over budget. Incredibly, the state has not laid a single mile of track and it still lacks 10 percent of the land parcels it needs to do so. Half of the project still hasn’t achieved the environmental clearance needed to begin construction. The dream of a Japanese-style bullet train crisscrossing the state is now all but dead due to political opposition, litigation, and a lack of funding.

Despite its failure, the HSR project inaugurated the U.S.’s megaproject era. Once a rare type of project, by 2018 megaprojects comprised 33 percent of the value of all U.S. construction project starts. An alarming number of these have spiraled out of control for many of the same reasons that killed the California bullet train. The decade that followed the financial crisis was a kind of inflection point in the industry; this was when construction projects became noticeably worse and when the long-term implications could no longer be ignored. One of the most cited studies of the U.S.’s declining ability to build reviewed 180 transit megaprojects across the country, revealing that today, U.S. projects take longer to complete and cost nearly 50 percent more on average than those in Europe and Canada.

Having joined Kiewit in 2010, I witnessed these changes first-hand. I have since moved on, but have remained in the broader industry, including working on what are called “strategic pursuits”—the process by which companies compete for megaprojects. This experience has provided insight into the mechanics of how these projects are awarded and why they so frequently fail.

I joined the industry at one of its lowest points in decades. The lifeblood of a construction company is its backlog—that is, contracts it has been awarded but has not yet started. When the backlog runs low contractors are said to be “hungry,” which can result in them accepting risks they normally wouldn’t. Following the financial crises everyone was hungry, and Kiewit was no exception. But it was soon awarded a project it would come to regret: the $1 billion Sepulveda Pass Freeway Expansion Project. By the time it was completed, Kiewit faced over half a billion in losses, which would be the worst project loss in the company’s 138-year history. 

But the failure of these projects has a value of its own. It’s representative of the industry writ-large, and of the causes behind the U.S.’s great infrastructure stall.

The Principal-Agent Problem

Kiewit is one of the largest construction firms in the world, and has made its reputation by building some of the biggest and most complex projects in modern U.S. history. Founded by two immigrant bricklayer brothers, its leadership passed down to one of the founder’s sons, Peter Kiewit, who grew up on its construction sites. Peter turned a small family business on the edge of ruin after the Great Depression into a construction superfirm. After completing $500 million in projects for the U.S. military over the course of the Second World War, often on seemingly impossible schedules, Kiewit was transformed by the long boom that followed the war. It built everything from large portions of the Interstate Highway system, massive classified military infrastructure, nuclear power plants, to Major League Baseball stadiums.

Today Kiewit is led by around 2,500 people who have been selected to join the ranks of the company’s employee-owners. To achieve this status requires working brutal hours for years and demonstrating exceptional commitment and competence. It has also led to the company being run somewhat like a cult. The founding myth of that cult is that it can deliver any project no matter the obstacles. 

But it has had multiple megaprojects end in disaster in the years following the financial crises. A company that built its identity around delivering the toughest projects is now regularly failing to do so, with recent Kiewit endeavors like Sepulveda showing us why America can’t build anymore. Construction projects are undertaken within a legal and regulatory system that presents persistent, costly obstacles, while projects are being overseen by agencies who lack the resources and in some cases even the expertise to manage them.

Sepulveda’s numerous lawsuits and stakeholder conflicts are an example of a phenomenon that can be traced back to the passage of the National Environmental Policy Act (NEPA) in 1969. NEPA mandates developers to provide environmental impact statements before they can obtain the permits necessary for construction on huge swathes of infrastructure. 

Shortly following the passage of NEPA, California’s then-governor Ronald Reagan signed the California Environmental Quality Act (CEQA) into law, which required additional environmental impact analysis. Unlike NEPA, it requires adopting all feasible measures to mitigate these impacts. Interest groups wield CEQA and NEPA like weapons. One study found that 85 percent of CEQA lawsuits were filed by groups with no history of environmental advocacy. The NIMBY attitude of these groups has crippled the ability of California to build anything. As California Governor Gavin Newsom succinctly put it, “NIMBYism is destroying the state.”

It is also destroying the U.S.’s ability to build nationally. The economist Eli Dourado reported in The New York Times that “per-mile spending on the Interstate System of Highways tripled between the 1960’s and 1980’s.” This directly correlates with the passage of NEPA. If anything, the problem has gotten worse over time. Projects receiving funding through the $837 billion stimulus plan passed by Congress in the aftermath of the financial crises were subject to over 192,000 NEPA reviews.

The NEPA/CEQA process incentivizes the public agencies to seek what is often termed a “bulletproof” environmental compliance document to head off future legal challenges. This takes time, with the average EIS taking 4.5 years to complete. Some have taken longer than a decade. A cottage industry of consultants is devoted to completing these documents, earning themselves millions in fees.

The NEPA consultants are just one of the numerous types of consultants that benefit from the way we build. Most infrastructure in the U.S. is built through a huge number of state and local agencies: for example, there are 51,000 community water systems alone in the U.S. This decentralized structure makes it much more difficult to develop the depth of expertise needed to manage the complexities posed by megaprojects. Often, the multiple public agencies that are involved with projects also have overlapping authorities, creating bureaucratic delays and slowing decision making. 

The expertise problem is compounded by the fact that agencies are often staffed with a workforce of people either just at the beginning of their careers or near the end of them. Those at the beginning tend to leave if they are ambitious, which leaves senior positions in the hands of agency lifers. Because of this dynamic, and the fact that it is not economically feasible to have the wide range of expertise needed in-house, public agencies employ engineering consulting firms. These firms fill a valuable niche. If you are building a complex project—say, a long-span bridge or a desalination plant—you want advice from someone who has designed and built dozens of them. The problem arises when you become too dependent on such advice. 

The High-Speed Rail project was undermined by such a failure. At its peak, the agency responsible for the project, the California High-Speed Rail Authority, had fewer than 30 permanent employees managing the $105 billion project. Instead of hiring staff, the Authority relied heavily on outside consultants. These consultants were well paid, with the primary consultant compensation for HSR at $427,000 per engineer, compared with the Authority’s in-house cost of $131,000 per engineer. This structure creates a principal-agent problem where they are incentivized to maximize their billable hours. As a California State Auditor assessment of the project noted, consultants “may not always have the state’s best interest as their primary motivation.”

This lack of in-house institutional expertise leads to bad decision-making. Bent Flyvbjerg, a professor at Oxford University who has written extensively about megaprojects summarized the problem when asked about California’s HSR project: “If you depend on consultants to know what you are doing then you are in real trouble…a good balance is where the owners are not outsourcing all the knowledge. A bad balance guarantees a bad outcome.”

The pitfalls of this lack of balance appeared before large parts of the project began. In 2014, Dragados, the contractor for a 63-mile section of the HSR, proposed radical design changes that they projected could save $300 million. The fact that Dragados’s bid was $500 million lower than its competitors and that it rested upon a design concept that had not been thoroughly vetted should have caused alarm. As a senior engineer who worked on the original environmental compliance document for HSR and reviewed the concepts told the Los Angeles Times, “it is mind-boggling they would entertain some of the things that Dragados proposed.” 

Dragados’s approach may have been driven by the fact it didn’t have the experience of its competitors; it had never built a rail project in the U.S. before and needed an edge to be selected. It was a measured risk because it knew there were ways to limit its financial exposure if its design ideas didn’t work. A Los Angeles Times investigation of the project in 2021 found Dragados had issued 273 change orders for additional payment and had completed less than 50 percent of its planned work four years after its section was supposed to be complete. Its design ideas had been almost completely abandoned as unworkable and Dragados’s section of the work was $800 million over budget.

The principal-agent problem arises with union construction labor as well. Skilled union workers, such as electricians and carpenters, make solid hourly wages, but their pay really explodes with overtime. A 2011 study by the Real Estate Board of New York found that some union crane operators made up to $500,000 a year in pay. Union contracts mandate unnecessary positions as well, to the benefit of its members. The same study found 50 workers in unnecessary positions such as relief crane operators on the World Trade Center Project, including 14 unproductive employees making $400,000 a year at the project.

Similar statistics can be found on other projects; an investigation into the costs of the East Side Access rail project in New York, which cost nearly $3.5 billion for each new mile of track, found that only 700 of the 900 workers being paid on the project were needed. A TBM, which is largely run automatically and typically staffed with under 10 people, ostensibly had 25 or 26 people working on it. Because you can’t drill without a TBM, and you can’t build a high-rise without a crane operator, these union workers have inordinate power.

A common retort to the claim that union labor drives up costs is that other countries, especially in Europe, have both high union participation and lower project costs. But it is widely recognized in the industry that unions increase project labor costs by 20 to 25 percent on average in the U.S.

The fundamental problem isn’t unions per se, but rather the way that unions operate within parts of the U.S. system. The Netherlands has strong unions, but the Port of Rotterdam has been automated to an extent that has proven impossible in the U.S. due to union resistance. As the president of the International Longshoremen’s Association, Harold Dagget, recently put it, his union will “fight tooth and nail” against further automation in the U.S. Any attempt at real construction innovation runs into similar barriers at every level of the system. There are too many layers of permission needed to innovate, including groups whose interests run counter to innovation.

Innovation in physical work ultimately means substituting or complementing labor through technology to improve productivity. If your pay depends on overtime, you want inefficiency. The average dockworker at the Port of Los Angeles makes over $100,000 a year, largely due to overtime. The majority of foremen and managers earn more than $200,000, and the mariners who guide ships in and out of the port average nearly $450,000. 

The result is that innovation is inhibited by both labor resistance and a decentralized government bureaucracy that has neither the incentives nor the capability of driving real change. Perhaps it should not be shocking that U.S. construction productivity has fallen by half since the 1960s according to research conducted by the consulting firm McKinsey.

The Future

These twin problems are only getting worse. President Biden has signed executive orders strengthening construction unions and increasing the stringency of NEPA requirements. Meanwhile, consulting firms are already promoting to investors the lucrative opportunities presented by the anticipated wave of retirements at public works agencies. Up to 41 percent of the construction industry’s workforce is nearing retirement age as well, and the construction industry has an estimated worker shortage of 650,000 people, partly because many who left the industry following the financial crises never returned.

Meanwhile, trillions of dollars are projected to be spent on the infrastructure needed to decarbonize our economy, address crisis-level drought in the western U.S., and replace aging bridges and highways. These trends all point to a future where we lack expertise and capacity at every level of the construction industry while regulatory costs only increase. 

The result is that the U.S. gets less and less every year for every dollar spent on construction. This means decline.

Should the U.S. ever commit to a developmentalist strategy, it will have plenty of examples to learn from. Between 1995 and 1999, the City of Madrid designed and built 39 new metro rail stations, laid 35 miles of rail—including 23.5 miles which required expensive tunneling—and completed all work at an average cost of $65 million per mile. It has subsequently completed multiple other phases of similar size with similar results.

How did Madrid accomplish this? It used simple modular designs for each station and did not use any new construction techniques, novel engineering designs, or train technology. When tunneling segments, instead of using one TBM as is typical, it deployed up to six at a time—a number previously unheard of. Most importantly, Madrid ran its construction crews 24 hours a day, seven days a week, and achieved consistent worker productivity gains. Reducing complexity and repeatedly building the same simplified design made iterative improvements possible.

This kind of solution isn’t as easily copied as it may appear. The reason Dragados’s bid was given credibility by the Authority is likely that it is a subsidiary of the company that built the Madrid project. It is one of many European construction giants that expanded into the U.S. market following the financial crises when their home markets contracted. 

By selling lower costs and a sophisticated approach that was proven to work in Europe these firms were awarded megaprojects across the U.S. Many of these projects have blown up in similarly spectacular fashion, such as Dragados’s HSR project. Meanwhile, U.S. firms have completed megaprojects in Europe and elsewhere at costs that would not be possible in places like New York or California. The problem isn’t that Kiewit or Dragados have forgotten how to build; it is that we have made it impossible for even the best builders to succeed in America.

However, not every building environment in the U.S. is the same. Roughly 40 percent of U.S. megaprojects are in New York, California, or Texas. While megaprojects run into issues everywhere, the Texas projects have a significantly better track record than either of its coastal peers.

Other states have learned from their example. Arizona explicitly studied lessons learned from Texas when building the largest public works project in its history, the $1.7 billion Loop 202 South Mountain Freeway Project. By using a non-standard project delivery approach, this project was completed in 2019 in fewer than 1,000 days, an estimated three years earlier than what would normally be expected. Early coordination between the contractor and engineer ensured that the design issues that appeared on Sepulveda or HSR were avoided, saving the project an estimated $100 million.

Texas and Arizona are both “merit shop” states, which in practice is synonymous with non-union. They also have a much less stringent regulatory environment. As a result, much of our industrial capacity is being built in these states. And these industrial projects are achieving remarkable productivity gains. Per the Bureau of Labor Statistics, productivity in industrial building construction went up 70 percent from the mid-2000s to 2015, even outpacing the productivity growth in manufacturing over the same time.

A prime example is Tesla’s recently completed Austin “Gigafactory,” a building three times the size of the Pentagon that was completed in 18 months. Like Madrid, Tesla relied on modular construction and other proven methods to increase productivity and speed. These strategies are widely employed on energy and industrial projects in the merit shop states, from semiconductor fabrication plants in Arizona to utility-scale solar projects in Texas. Renewable energy developers often work with the same engineering, procurement, and construction (EPC) companies on repeated projects, enabling iterative learning and productivity improvements on each subsequent project.

In the energy sector, these techniques are being employed on genuinely innovative projects. For example, the energy company Oxy is currently in preconstruction on a $1 billion direct air capture (DAC) plant in Texas. DAC plants remove carbon dioxide from the air and then convert it into concentrated carbon that can be sequestered or re-used. By using modular construction techniques, standardized design, and the same group of project participants, it plans to achieve economies of scale and drive down costs over time.

This approach requires Oxy to know it will likely lose money on the project. It is a $1 billion experiment that has no real parallel to public-sector infrastructure projects. That is because none of the public agencies can afford a costly project it knows will likely fail. Real physical innovation requires a trial-and-error approach and a tolerance for risk and loss. 

Historically, the only group in the U.S. capable of this approach has been the federal government. Through the Defense Advanced Research Projects Agency, it funded the research that led to the creation of many of the fundamental technologies of our modern economy, such as the semiconductor. This story is well known, but what is less recognized is that NASA and the Department of Defense were the primary buyers of semiconductors and other computer technology for years. The government funded the creation of the technology and the market, both of which are required for physical innovation.

There are promising technologies emerging that could fundamentally alter how we build. Examples range from quantum sensors which could eliminate the risk posed by unknown underground conditions, to 3D printers that can print everything from the concrete base of wind turbines to structural steel components. But there is no systematic attempt to further these new technologies, invent new ones, or deploy them at scale on real-world projects. 

Improving construction productivity requires institutions that can serve the role DARPA, NASA, and the DOD played in the technology industry while simultaneously creating a more permissionless environment for innovation. One approach is to create a state institution to serve this role. Another would be to expand the use of public-private partnerships (P3), the model used to deliver the South Mountain and Madrid projects. The P3 project delivery method has been proposed for multiple hyperloop projects in the U.S. and could enable the creation of public-sector equivalents of Oxy’s DAC project.

More recently, geopolitics has forced Germany to act as an example for accelerating the development of new infrastructure. Germany has experienced the same megaproject issues as the U.S. and for many of the same reasons. But facing the urgent necessity of replacing Russian gas, the German government is set to pass a law that will waive procedural requirements mandated by the E.U., including its version of NEPA, to accelerate the construction of liquified natural gas infrastructure. Sometimes the most innovative thing to do is to just cut through the red tape and build.

Like Germany, the U.S. regularly shows that its current stall is ultimately a political choice. In February 2017, heavy rain damaged the nation’s tallest dam, Oroville Dam, creating the risk of catastrophic and deadly flooding in the Sacramento valley. Over 180,000 people living downstream along the Feather River in Northern California were evacuated from their homes. As in the current German case, the risks posed by inaction necessitated a bypassing of the usual rules.

Within 10 days of the damage incident, Kiewit was awarded a contract. A little over two weeks later Kiewit’s team and equipment were fully mobilized at the site. After only 165 days Kiewit had brought the dam’s main spillway into working condition. It then completed a second phase where it built a 1.2 million square foot spillway—an area so large that 25 NFL regulation-sized fields could fit inside it. The combined project was completed in only 18 months. 

When the barriers to construction are removed, the U.S. can still build big things, even in California. Given the U.S.’s resources, excellence in building is a choice. But sticking with the status quo represents another type of choice; it is a decision to accept decline.

For Europe especially, the first and most urgent answer to this question is the necessity of independent military power. For the past several years, French President Emmanuel Macron has been a major advocate of European “strategic autonomy.” In the wake of the invasion, this has received a newfound sense of urgency and acceptance in Germany and elsewhere.

After years of budget cuts and depleted morale in its armed forces, Germany recently announced that it will spend $113 billion to modernize its military and permanently commit to spending 2% of its GDP on defense. Official statements make it clear Germany is embracing the concept of European strategic autonomy with this move.

Europe’s Military Deficit

A 2018 assessment of the German military by the German parliament’s military commissioner described its lack of military readiness as “dramatic.” Besides lacking fundamental modern military capabilities there is by all accounts massive institutional rot. The military commission’s findings included that there was an officer shortage of up to 21,000 men. Germany’s military lacks leadership and operational capability at virtually every level. 

The new military spending is meant to address this. But a dysfunctional military that receives an influx of expensive new hardware doesn’t suddenly become a highly-capable military. The result of the new spending could just be a dysfunctional military with expensive hardware. The German military may not have the capacity to absorb a massive one-time modernization effort and rapidly transform itself into a military power. 

German officials initially plan to buy a wide range of foreign-made systems, including buying 35 American-made F-35 fighter jets and Israel’s Heron drone. They also reaffirmed their intent to jointly build the Future Air Combat System (FCAS), a 6th-generation fighter plane, with France and Spain, and develop a strong European defense industry. But the project to build a new fighter, and whatever other high-tech weapons systems will be needed for strategic autonomy, depends critically on the capacity of Germany’s industrial base.

The Shanghai-based technology analyst Dan Wang has popularized the concept of process knowledge. It is the idea that technology is not just tools and schematics; it is the tacit knowledge needed to develop technology based on deep human experience. As he noted in a review of the book Taking Nazi Technology: Allied Exploitation of German Science After the Second War, the extensive Nazi technical data acquired by the U.S. Army in the aftermath of the Second World War proved basically useless to the Americans. It was the hard-won tacit knowledge of men like the German aerospace engineer Wernher von Braun that helped transform America’s rocket program and put men on the moon. 

This is relevant to a new generation of German engineers. The example of Germany’s F125-class naval frigate is instructive here. First conceived in 2005, the ship was finally delivered for sea trials after several delays in 2016. It failed the sea trials in 2018 and was deemed unfit for sea. The frigate’s builder eventually worked through the myriad of issues with the ship and finally delivered the last of four ships in its class in January 2022 with commissioning scheduled for mid-2023, 18 years after the project’s launch.

When interviewed about the failure of the ship’s sea trials by the Wall Street Journal, Christian Mölling, a defense expert with the German Council on Foreign Relations noted: “There’s a whole generation of German engineers who haven’t worked on a major defense project…It’s not that they lost this skill; they never learned it.” 

After decades of neglect, this lack of process knowledge is going to make rebuilding Germany’s defense industrial base very difficult. In contrast to Germany, the U.S. will spend $112 billion on military research and development (R&D) alone in 2022—roughly equivalent to Germany’s entire multi-year modernization fund. It will keep on doing so for the foreseeable future.

In contrast, the U.S.’s R&D budget is going towards the development of a panoply of systems that appear to fulfill the promises of 1980’s science fiction movies. A selection of projects under development includes hypersonic missiles, rocket cargo transportation, “Skyborg” drones, “Golden Horde” networked weapons, and the B-21 Raider stealth intercontinental strategic bomber. The U.S. has the resources and existing defense research and industrial base to operate on a completely different technological level. 

In the end, even if Germany’s modernization efforts are successful, they will not be sufficient for the EU to emerge as an independent military superpower. The vast gulf between the capabilities of individual EU nations and the U.S. is not going to close. There is also significant disagreement within Europe about whether the Russian threat should drive the EU to more military autonomy at all. The Eastern European nations who feel most threatened by Russia have historically been opposed to the concept of strategic autonomy because they feared it could weaken the U.S.’s commitment to NATO.

The Nordic countries have also long held a similar aversion to deepening a unified European defense structure. Sweden and Finland are internally debating becoming NATO members, not supporting any kind of independent European military alliance. The Ukraine war will only amplify these beliefs.

Any attempt to create a future EU defense architecture will necessarily have to be limited in scope and appear to be a complement to NATO, not a substitute for it, in order to gain acceptance. And if that is the case, what is the point? 

The biggest military change isn’t the prospect of a more militarily powerful and independent Europe, it is the tightening of the security relationship between the U.S. and its European and Asian allies. Since the war started, Japan and Australia have both sought to accelerate their military integration with the U.S. In Japan, its former Prime Minister even broke a long-standing taboo by proposing to host U.S. nuclear weapons. In Europe, every Eastern European nation in NATO has been seeking a permanent U.S. military presence. The war has hardened commitments now that the threats aren’t merely abstractions.

Europe Has Failed at Energy Independence

In response to the invasion, the U.S. and its European allies have imposed harsh trade sanctions on Russia. Between this and the inevitable long-term tension that will follow, Europe’s dependence on Russia for energy is called into question. 

A strategically independent Europe would need to phase out its dependency on importing Russian thermal energy sources (oil, gas, and coal) as well as develop a plan to make the EU more independent of global energy suppliers. But this is a herculean task. Europe has built almost no infrastructure to support alternative supplies. Roughly 45% of EU gas imports, and 40% of gas consumed came from Russia in 2021, according to the International Energy Agency.

An accelerated build-out of renewable energy resources won’t be enough for any European energy independence strategy. They can’t be built fast enough and at a large enough scale to replace thermal energy sources. Renewables like solar and wind also suffer from the intermittency problem—there needs to be a baseload power source when the wind isn’t blowing, and the sun isn’t shining.

The Europeans may regret their decision, with the exception of France, to move away from nuclear power as a baseload energy source and accelerate the closure of their nuclear plants. It takes between five to seven years to build a new nuclear plant, but having long abandoned the process knowledge needed to build these projects, even those schedules may be unachievable for Europeans. The first new nuclear reactor built in Europe in 15 years went online in Finland this month; the project started in 2005 and was delivered 13 years after it was initially scheduled to be completed. Nuclear is no longer an alternative in any time frame that would matter for Europe.

The primary near-term option to replace Russian gas is importing liquified natural gas (LNG) from the United States and Qatar. Germany has already started pursuing this strategy with Chancellor Scholz’s recent call for the fast-track development of two LNG import terminals.

The U.S. has the potential to be the Saudi Arabia of LNG. When LNG facilities currently under construction are completed later this year, the U.S. will have the greatest peak export capability in the world at 13.9 billion cubic feet per day (Bcf/d) per the U.S. Energy Information Agency. EQT, the U.S.’s largest natural gas producer, stated this month that the U.S. could produce up to 45 Bcf/d by 2030. For context, one billion cubic feet of LNG is roughly enough gas to meet the needs of five million U.S. homes for a day.

The sudden change in the economics of LNG has been dramatic. During the COVID-19 pandemic, the LNG market was hit with low prices and oversupply due to decreased demand. LNG complexes are both fantastically expensive—typical construction costs range from $25 billion to $30 billion—and fantastically complex to build. The drop in prices led to investors refusing to fund new projects on a speculative basis—they required project developers to have supply contracts in place which led to a virtual halt to construction. In the U.S. alone, there have been more than 20 stalled LNG export terminal projects until recently. 

The pivot to LNG in Europe is an exploding green light to LNG developers in the U.S., as well as the other two major producers, Qatar and Australia, both of which are close U.S. allies. Perhaps not coincidentally given recent events, Qatar was named a major non-NATO ally of the U.S. this February by President Biden. Qatar is another country for whom security threats are not an abstraction. In 2017, the country was blockaded by Saudi Arabia, Egypt, Bahrain, and the UAE and its relationship with its larger neighbors remains difficult. Qatar’s defense relationship with the U.S. is highly valued and it subsidizes the cost of hosting a large U.S. military presence in its country.

In the long run, the U.S.—both individually and through its close allies—will be central to any European strategy to replace Russian gas, which will enhance its strategic relationship with the countries of the EU. But for now, the energy and commodity markets have devolved into pure chaos.

The severe economic sanctions against Russia by the West are forcing much of the world to reconfigure its assumptions about trade dependence, especially in energy. Any illusions Russia had about its vast energy, metals, and crop resources shielding it from severe economic fallout after its invasion of Ukraine have vanished. Russia has found it isn’t enough to have the resources—you need multiple buyers competing for these resources in a competitive market, as well as the project funding, managerial expertise, and technology needed to execute complex multi-billion-dollar infrastructure projects. Russia lacks many of these enabling pieces and has been dependent on the West to supply them.

Russia has some resource extraction expertise, but it relies heavily on Western firms to design, build, and maintain its energy infrastructure. Losing access to the expertise of Western oilfield services, construction, and engineering firms like Schlumberger, Halliburton, and Baker Hughes, along with Western technology ranging from drive motors to process automation software is a significant blow. The technological underpinnings of Russia’s oil and gas industry are primarily supplied by the West, but it lacks the process knowledge needed to reproduce them domestically. China may be unwilling or unable to provide replacements anytime soon.

When you only have one buyer for your products your pricing power quickly evaporates. Russia is heading towards a future where it will be forced to accept whatever terms China offers. In the meantime, China is aggressively seeking energy independence of its own. Since the invasion of Ukraine was launched, China has announced plans to add an astonishing 455 gigawatts (GW) of solar and wind power in its northern desert regions. This follows earlier announcements of 97 GW of new solar and wind projects and a $440 billion build-out of at least 150 new nuclear reactors with around 147 GW of capacity. The combined capacity of these new projects is more than seven times the amount needed to power Mexico. China has no long-term interest in Russian gas but will take it at a discount for now.

The major fallout of this conflict for energy is that Europe will become dependent on the U.S. to buy energy, and Russia will become dependent on China to sell it. Strategic autonomy requires both access to energy and preferred access to an industrial base that can use it productively. Russia and Europe together might have been able to muster significant power, but U.S.-led sanctions are cutting Russia off of European industry, and Europe off from Russian resources. The war has undermined the secondary powers’ ability to maneuver, Europe and Russia. Instead of being able to play China and the U.S. off each other, they are being forced to pick sides and become much more dependent.

Why the Dollar Will Endure

On the surface, the weaponization of U.S.-affiliated financial infrastructure like SWIFT, the international payment service, creates an incentive for Russia and other countries to seek alternate infrastructure. This is already happening to some extent: China is building and promoting parallel structures to existing U.S.-led international institutions such as the Cross-Border Interbank Payment System (CIPS), China’s version of SWIFT. CIPS is being integrated with Russia’s own alternative System for Transfer of Financial Messages (SPFS).

It might seem then that this will inexorably lead to the end of the U.S. financial empire. But for the U.S. dollar itself to be replaced, there must be an alternative. The only two realistic alternatives, the euro and the renminbi, won’t work. Without an alternative, the entrenched U.S. dollar will remain a significant pillar of American power. And if anyone is going to wield this economic power, those countries who operate within the U.S.-alliance system would prefer it be the U.S.

The euro hasn’t emerged as a global reserve currency for multiple reasons, primarily related to member countries’ reluctance to make deep and costly economic and monetary reforms that would require them to give up part of their sovereignty. The European financial markets don’t have nearly the scale or liquidity of U.S. markets because they are divided by national lines. A project to replace national sovereign debts with a single EU government bond market that was fully backed by the European Central Bank would create a dollar alternative. But there is no realistic path for getting member nations to agree to reforms that are in many cases against their national interests and politically toxic for the nebulous benefit of being an additional reserve currency. 

This leaves the renminbi. Given the rise of China’s economy—it accounted for 17% of global GDP in 2020 versus 25% for the U.S.—it is important to ask why it hasn’t come closer already to replacing the dollar as the world reserve currency. After all, Chinese leaders have long complained about “dollar hegemony” and sought to replace its reserve currency status. And yet, according to SWIFT, the dollar accounted for nearly 40% of global payments in January versus the renminbi’s 3%.

There are two fundamental reasons that the renminbi hasn’t become a global reserve currency despite China’s economic growth: China has been unwilling to give up capital controls and few trust China to provide safety and liquidity of reserves. 

The reason China is unlikely to give up capital controls is that it fears that an outflow of capital could spark a market panic that results in further capital flight. For example, this was the most important factor in the 1997 Asian financial crisis. As Nobel Prize-winning economist Joseph Stilitz noted in Globalization and Its Discontents, a review of the history of financial crises:

[C]apital account liberalization was the single most important factor leading to the crisis. I have come to this conclusion not just by carefully looking at what happened in the [Asian] region, but by looking at what happened in the almost one hundred other economic crises of the last quarter-century…capital account liberalization represents risk without a reward.

Capital controls are ultimately about political control. Abandoning one of China’s primary levers of economic control presents political and social risks that are unacceptable to its rulers.

Even if China thought the risk of abandoning capital controls was worth it, countless private market participants would need to prefer the renminbi over the dollar. Because of network and political effects, a dominant currency tends to remain locked in long after it has been surpassed in economic weight. A prime example is the U.S. dollar itself. The U.S economy overtook the output of the entire British empire in 1916 but the dollar didn’t become the global reserve currency until after the Second World War, when U.S. power definitively surpassed British power.

Market participants would have to prefer the renminbi over the dollar out of pure self-interest. At least part of this calculation is the political risk of going against the U.S., and the perceived safety of its assets. 

China has long weaponized market access to gain a geopolitical advantage. This power has been used rather indiscriminately to punish or coerce foreigners on matters large and small. And unlike the West, China’s leadership much more explicitly dictates the actions of ostensibly private companies. It requires little imagination to believe that the Chinese government would weaponize its currency as well to achieve its political goals.

The risk of an eventual Chinese invasion of Taiwan is nonzero and it is basically guaranteed that China will fully leverage its economic power to force acceptance of such a move. But the last thing global market participants want is a bureaucrat in Beijing with his finger hovering over the delete key of their digital yuan holdings if their country is found to be too “unsupportive” of Beijing’s actions in the future. China would have to demonstrate a much longer track record of stability and a de-politicized business environment, and the U.S. would have to decline much further on these metrics, to change this calculation.

Ultimately the weaponization of the dollar against Russia won’t end the dollar era—it will extend it. The position of the dollar is primarily a risk for those countries that are outside of the U.S. alliance. The decision to weaponize the dollar was made collectively by the U.S. and its allies and does not represent much of a risk to those within the alliance, especially when compared to relying on the renminbi. The U.S.’s overall alliance system includes collective defense agreements with over 50 countries: this group accounts for the vast majority of non-Chinese global GDP. Those inside the U.S. alliance system have no reason to disarm or cut themselves out from this newly unleashed economic weapon only to hand the same means of economic coercion to China.

The World Order After Ukraine

One thing we can say with near certainty as a result of this invasion and its geopolitical ripple effects is that the powerful will become even more powerful. While the U.S. may find itself with strengthened security alliances and an important role in the E.U.’s energy transition, China seems set to be the real winner in this mess.

Russia may find that on its way to create a client state in Ukraine, it will become one itself. Instead of being one pole in a multipolar world, China could become the head of a continental order that stretches across the Eurasian landmass. Any lasting sanctions regime against Russia will leave China as virtually the sole buyer of the world’s second-largest source of minerals, many of which are critical to U.S. industrial capacity. China has already leveraged rare earth minerals access for political gain, and this represents yet another potential lever of control.

The economic damage inflicted on Russia due to its reliance on Western technology and financial infrastructure has been viewed by China with horror. China is already taking steps to ensure domestic control of the energy, food, and technological systems that underpin its economy, including the already mentioned CIPS expansion as an alternative to SWIFT. These initiatives will find new urgency in the aftermath of the invasion.

Instead of the commonly expected multipolarity, this war will lead to a bifurcation of the world into Chinese and U.S.-led spheres. The EU aspires to strategic autonomy, but it does not meet the preconditions necessary to achieve it. Strategic autonomy requires scale, key economic prerequisites, and a unified political identity and structure. The EU provides the illusion of scale but can’t cohere into a true power because its member nations have their own deeply-rooted identities and national interests. Any attempt to centralize power within the European Union to create the scale required for strategic autonomy will just result in more reactive Brexit-like moves. The individual member nations don’t want to integrate their militaries for example, even if it might be necessary to build a European superpower.

The problem of scale is evident in the EU’s call for European technological autonomy. The U.S.’s five largest technology companies alone spent $149 billion on R&D in 2021—more than the total R&D spending of any country in Europe. The EU can’t dictate that the technologies of the future are invented or built out in Europe. And if they can’t invent the future or acquire its process knowledge, they won’t be able to participate in it. 

The U.S. and China are unified markets that together comprised 42% of global GDP and 52% of global defense spending in 2021. Their ability to leverage hard military power and economic coercion is an insurmountable obstacle to the emergence of the other powers that would make a multipolar world order. With the potential long-term exception of India, no country has the size and strategic resources to compete individually, and current multinational institutions like the UN and the EU are built on soft foundations which cannot be transformed into hard power.

If world history continues to be driven by power and intimidation, where will that leave these weak multinational institutions? City-state-type entities like Qatar or Singapore may establish stable positions as bridges and traders within this world order, but they will not be sovereign within it nor become primary players. New alliance structures arguably built on firmer foundations, such as AUKUS, a trilateral security pact signed between Australia, the U.K., and the U.S. in 2021, may evolve into more consequential forces within the world order.[xx] 

For now, the Ukraine war is hastening the birth of a new world order, but it isn’t a multilateral one. The U.S. and China are establishing themselves as the two separate suns that all other nations orbit.

The basic truth about power in the world is that all states, organizations, and actors are not created equal. Power is so unequally distributed, and some actors are so much stronger than others, that the most powerful—those we call great powers—not only get their way most of the time but are, in fact, a categorically different kind of actor. The great powers can craft the fundamental rules of the international order that all other countries must follow.