# AI, Rare Earths, and Economic Statecraft with Michael Every & Craig Tindale | RR 22 Source: https://www.youtube.com/watch?v=GKzsjvRVkik Recap page: https://rapidrecap.app/video/GKzsjvRVkik Generated: 2026-03-04T13:33:17.655+00:00 --- ## Quick Overview The discussion concludes that Western nations face a severe challenge in securing critical materials like rare earths because market forces alone cannot compete with state capitalism, which allows geopolitical rivals to produce necessary inputs at a loss to achieve control, necessitating a strategic pivot towards economic statecraft and choosing sides in the US-China contest. **Key Points:** - Market forces will not solve critical materials supply issues because Western expectations for 20-30% returns conflict with rivals prepared to produce everything at a loss in perpetuity to achieve control. - China controls the choke points for rare earth metals and chemicals, producing 50% to 100% of supply, and controls off-takes even when mines are located in Western nations. - The concept of the 'golden screw' illustrates that lacking one critical material, like scandium or tellurium, breaks down the entire system, highlighting supply chain fragility. - Economic statecraft requires grappling with the uncomfortable reality that relying on free markets while rivals use state capitalism leads to losing control of upstream, midstream, and downstream choke points. - The US is pivoting aggressively towards economic statecraft, leveraging legacy military power to flip pressure points like Venezuela and Iran, signaling to China that resource supply lines may be threatened if the current game continues. - Europe is struggling to act cohesively due to vested interests and adherence to regulated markets, viewing the conflict as US vs. Europe rather than recognizing it as fundamentally US vs. China. - AI offers a potential benefit by providing exponentially finer granularity on the economic system's mechanics, forcing clarity on the material reality underpinning financial narratives, which may eventually drive necessary ideological change. **Context:** This conversation features global strategist Michael Every and private investor Craig Tindale discussing the intersection of critical materials, industrial capacity, and geopolitical power, framing these trends as indicators of systemic instability. Craig Tindale focuses on identifying choke points in critical metal markets based on Chinese industrial strategy and Western tech demand, while Michael Every analyzes the necessity of distinguishing between standard economic policy and economic statecraft in response to these material constraints. ## Detailed Analysis The core argument presented is that the current Western economic framework, reliant on free markets and expected investor returns (20-30%), is fundamentally incapable of addressing the challenge posed by state capitalism, where rivals produce materials at a loss to secure geopolitical control, especially concerning critical minerals where China holds near-total production dominance. Craig Tindale details how China controls both the production and off-takes for most rare earths and necessary chemicals, creating choke points, and highlights industrial failures in the West, like canceled refinery projects due to high capital costs and environmental compliance (e.g., managing arsenic fumes). Michael Every defines economic statecraft as questioning the purpose of GDP when facing an opponent employing state capitalism, noting that responding requires slaughtering sacred cows like free trade, ESG pricing, and existing budgetary rules, leading to panic among entrenched professionals. He observes that while the US is recognizing the need for state involvement, implementation is difficult, whereas Europe is paralyzed by internal contradictions, and China continues its winning formula. The geopolitical response from the US involves aggressive economic statecraft combined with leveraging legacy military power to influence neutral regions like Venezuela and Iran, essentially threatening control over raw material sources if China continues its coercive tactics. Both experts agree that nations must pick a side in the US-China dynamic, as secondary powers like Europe and Canada are misinterpreting the primary struggle. They also speculate that while AI offers a tool for unprecedented clarity on the material and biophysical realities underpinning the economy, the necessary ideological shift away from perpetual GDP growth is unlikely to occur without significant friction or crisis. ### Critical Materials & Market Failure - Market forces fail when pitted against state capitalism prepared to produce at a loss to achieve control - China controls 50-100% of many rare earth metals and chemicals - The 'golden screw' concept shows systemic failure from missing single components. ### Economic Statecraft vs. Policy - Statecraft requires grappling with the reality that rivals are not playing by free market rules - Responding necessitates changing sacred cows like ESG, free trade, and budgetary rules - The fundamental question becomes 'What is GDP for?' when facing geopolitical rivals. ### Geopolitical Alignments & US Strategy - The US now understands the issue but struggles with implementation due to vested interests - Europe is secondary, focused internally or on the US, missing the primary US vs. China struggle - The US strategy involves aggressive economic statecraft and using military leverage to secure resource pressure points like Iran and Venezuela. ### Challenges for Other Nations - Countries like India show extreme vulnerability, relying on China/Russia for defense metals with only 14-30 days of munitions supply - Countries must ultimately 'Pick a side' in the US vs. China dynamic - Canada and Australia risk undermining industrial economies by prioritizing anti-Trump posturing over material reality. ### Ideology and Ecological Crisis - The challenge of getting self-interested populations interested in long-term, uncertain ecological problems is immense - Climate models are complex and potentially worse than understood, according to scientists like James Hansen - The required Gestalt view integrating military, political, ecological, and material realities is blocked by professional specialization and vested interests.