Foreign Policy, China’s Economy, and Running for Office: Interview with David M. Rubenstein — Mitchell Dong
I had the opportunity to interview David M. Rubenstein on behalf of Harvard Business School. David is a co-founder and co-chairman of The Carlyle Group, one of the largest and most successful private investment firms in the world, as well as Chairman of boards spanning several industries, from the arts to healthcare, and Chairman of the Boards of Duke University. He is a philanthropist and original signer of the Giving Pledge, and he served as a deputy domestic policy advisor to President Jimmy Carter.
In this interview, David discussed philanthropy, foreign policy, cryptocurrency, and the economy. The following questions I asked are concerned with his views on politics and the global economy:
“Thinking about China’s political system, it seems that they’re able to “get stuff done” — a contrast to US gridlock. Do you think that the United States is losing its competitive advantage due to gridlock, versus China’s more direct political system?”
David responded, “The freedoms and liberties we have in the US are ones you can’t quite trade off just because another economic system might be more efficient. Although I don’t think any Americans would give up what we have for China’s system, there’s no doubt that it’s more centralized and effective. They are definitely able to operate more rapidly than our system of checks and balances.
“After years of enormous levels of poverty, Deng Xiaoping and his successors were able to take 600–700 million people out of poverty. China’s not going to continue growing at 10% each year, as it did for the last 30 years, but I expect it will continue to grow at a reasonable rate for quite some time.
David describes a key disadvantage the United States has in competing against China — a population of 1.4 billion is a far larger consumer market than ours. He continues, “However, I do think the United States has entrepreneurial and technological advantages that will continue making it the most influential economy of the world for years to come, as opposed to the largest economy.”
Looking to hear more about David’s views on China, I asked a follow-up question that gestures at global relations: “What do you think of China’s support for Russia’s foreign policy?”
David answers, “China has played footsie with Russia over the last few years, I think because it would like to play the ‘Russian card’ against the United States. Our country has done so in the past, too — when Richard Nixon visited China, he was, in effect, playing the so-called ‘Chinese card’ against the Soviet Union.
“Today, I would say that China is very uninterested in being seen as helping Russia too much — they’d like to do enough to show Putin that they’re sympathetic to him, but not so much that the United States will impose sanctions or otherwise hurt their economy. In my view, China’s unlikely to send any significant weapons or aid to Russia, but just enough to remain a Russian ally.”
To take a more personal look at these issues and highlight David’s personality and ambitions, I asked him, “You’ve often said that you would never run for political office and that you don’t give to political campaigns. Why won’t we see David Rubenstein going into politics?”
David joked, “As a young man, I worked in the White House for Jimmy Carter, helping get inflation to 15%. There’s been no demand for me to come back into public service ever since. When deflation became an issue, I told the Federal Reserve, ‘If you want to get inflation, bring me back in.’ They never actually did.”
He continues the bit, “I’m also too young for politics! I’m only 72 years old, and you have to be 75 or older to run for President of the United States. I’d need some more experience. To be serious, though –” he begins, “There are enough people more talented than me and better able to perform those jobs.
“On not giving to politicians — first, I’m the Chairman of the Kennedy Center, the Library of Congress board, and the National Gallery of Art. These organizations are funded by the federal government, and I think I’m more effective as their chair if I’m not seen as “left-wing” or “right-wing”. Further, I’d rather give my money to philanthropic purposes — there are plenty of people other than me who can and will fund politicians. Finally, I don’t want my donating to politicians to be seen as eliciting something improper, so I’d rather not associate with it altogether.”
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Mitchell Dong is a serial entrepreneur and savvy steward for investors. He is the CEO of Pythagoras Investment Management, a hedge fund that trades cryptocurrencies. Mitchell’s fund is the oldest and largest Bitcoin trading fund, and they manage it with an Ivy League academic team. Mitchell has managed hedge funds for 25 years and has been starting and selling businesses for half a century with half a dozen successful exits.
