The Primacy of WinningApr 8
palantir cto shyam sankar doesn't build high-performing engineering teams, he wins. here's how.
Shyam SankarSubscribe to The Industry
This article originally appeared on Shyam Sankar’s Substack.
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Today I want to talk about a different sort of production. Not munitions, but movies.
We know that countries have “industrial bases,” or networks of factories, warehouses, engineers, etc. involved in bending metal. We spend so much time thinking about the embarrassing state of America’s defense industrial base because that’s what backstops American security. The industrial base puts the “hard” in hard power.
Nations also have what could be called, for lack of a better term, “culture bases,” or networks that make art and culture. These networks may or may not be influenced or controlled by the government, but they nonetheless perform an important political function by spreading a nation’s ideas, influencing other people, and hopefully raking in cold hard cash along the way.
Governments around the world take a serious interest in art because they understand that, whatever else it is, art is useful. It can promote as well as subvert. It can cause revolutions of the mind, which can lead in short order to revolutions in the street. That’s why the Soviets and, yes, the CIA funded their own artists colonies during the Cold War.
For more mundane reasons, nearly all governments try to export their culture, both to make money and to build the “national brand.” That’s why places like Japan and Korea have promotion strategies for things like manga and k-pop, why European countries are so territorial about their terroir, and why countries compete every two years to host the Olympics, despite the fact that it costs a fortune.
America’s biggest “culture base” is obviously Hollywood. The big studios are struggling in the wake of COVID and the streaming revolution, but America is still a heavyweight at the global box office. In 2023, eight of the top 10 grossing films in the world were American (one, the Super Mario Bros. Movie, was a U.S.-Japan joint venture).
That’s power. Whenever people go to the theater to watch a movie, anywhere in the world, it’s likely an American movie. And the messages of those movies set the tone for how our country and its cause are perceived.
Case in point: I remember growing up as an immigrant kid at the end of the Cold War, watching movies like Red Dawn, Top Gun, Rocky IV, and The Hunt for Red October. These movies were the pump-up material of Peak America. They were awesome, and they instilled a healthy aversion to ushanka-wearing commies, for good measures.
I call this the American Cinematic Universe.
Movies in this universe were a soft power tool that helped lift the Iron Curtain and accelerate the collapse of the Soviet Union. They branded the Soviets in the eyes of the world as icy-eyed tyrants with designs to destabilize and take over the rest of the world for Communism. They were also a window into the American character: scrappy, swaggering, gun-slinging, and with a zeal for liberty. These depictions were obviously caricatures, but they spoke to fundamental truths about the two sides in the Cold War.
They also continue to inspire audiences to this day — and not just American audiences. When Russia invaded Ukraine in 2022, Ukrainian guerillas trained in the Hollywood way of war started tagging disabled Russian tanks with the Red Dawn rallying cry: “Wolverines!”
David Milius, the movie’s late director, was a genius and a patriot. Years ago, he explained better than I ever could why foreign and domestic audiences alike fell for these fundamentally American films: “The only thing [foreign audiences] like about us is that we used to be innocent butt-kickers,” he said. “It was a part of American society that was just pure energy.”
But my choice of example, Red Dawn, speaks to a problem. Those Ukrainian fighters were referencing a 40-year-old movie to rally the troops. It’s hard to think of more recent films that could do the same job.
I bring this up not just out of nostalgia but because we need the American Cinematic Universe today. America is in the middle of Cold War II against a communist enemy with more people, more money, and more military might than the Soviets ever had. The CCP is playing a more careful game than the Kremlin, but as the Uyghurs, Tibetans, and Taiwanese know, it’s no less tyrannical, even genocidal.
What is Hollywood doing to expose this new villain and inspire Americans? When was the last time you saw the CCP presented as a bad guy in a major motion picture, like the USSR? Cold War II is heating up, yet the American Cinematic Universe is AWOL. Worse than that, it’s compromised by Chinese influence.
As in other industries, the allure of the China market has been so great for so long that Hollywood studios have done a deal with the devil for a piece of the action. Beijing limits access to its market to strengthen its negotiating position. So, for example, the CCP has a quota on the number of foreign films that can screen in China; it ruthlessly culls and censors films for “subversive” material and perceived slights; it forces studios into co-production with Chinese counterparts to steal American technology and know-how; and it imposes capital controls that make it difficult to repatriate proceeds from the box office. If studios want in, they have to play ball with Beijing.
This toxic trading relationship leads to censorship and content decisions. A few of the most egregious examples:
Those are just the examples we know about. Hollywood also self-censors. What movies never got greenlit because studios knew they would jeopardize their relationship with Beijing? What scripts never got written because screenwriters knew they wouldn’t get past the censors? What truths have gone unspoken? It speaks volumes about the climate of fear Beijing has created that when then-Congressman (and current Palantirian) Mike Gallagher asked Hollywood studio heads if they would answer truthfully if asked “Is China committing genocide in Xinjiang?,” more than a few said they would hesitate.
Hollywood’s capture by a foreign adversary is discouraging, obviously, but we should take heart because it has happened before. Eventually Hollywood came around. It still can.
During the 1930s, it was Nazi Germany that bent Hollywood studios to its will. As the historians Thomas Doherty and Ben Urwand have documented, the Nazis used (eerily similar) coercive diplomacy and market-access restrictions to censor Hollywood films. Before the Nazis even came into power, they fomented a riot during the German premiere of All Quiet on the Western Front and forced Universal Pictures to censor the film — not just in Germany but all around the world.
The Nazi regime controlled market access to force U.S. studios to make increasingly humiliating concessions, from replacing Jewish employees in Germany with “racially acceptable management” to cutting Jewish-composed music from films and Jewish names from the credits. Hollywood’s collaboration was so abject that MGM gave advanced screenings to the Nazis’ representative in California, Georg Gyssling, so he could tell them what to cut. Due to restrictions imposed by Hollywood’s trade association, an explicitly anti-Nazi film wouldn’t be made until 1939, the year German tanks rolled into Poland.
The studios bristled at the Nazis’ demands, but caved to retain access to the German market. As Variety put it at the time, they had “too much coin tied up there and may be able to get some of it back by sticking.” The bitter irony is that the collaborators didn’t actually end up making money. Strict capital controls prevented the studios from repatriating profits. Eventually all American films were banned in Germany. The studios had sold their souls on the cheap. They only came around when war broke out and their investments had gone to zero.
Collaboration was a choice, a fact illustrated by the one studio that took the road less traveled. Warner Bros. pulled out of Germany entirely in 1933 after a brutal assault on its Jewish representative in Berlin. It spent the next decade as practically the only full-throated anti-Nazi studio in Hollywood. As Doherty writes, “No for-profit company did more than Warner Bros. to alert Americans to what Nazism was and where it would lead.”
WB married this anti-totalitarian message with a blitz of patriotic short films that celebrated great events from American history, from the Declaration of Independence to the Underground Railroad. As studio head Jack Warner said, “we aim to do our part in preserving the United States as is and in making Americans conscious of our heritage.” He framed it as a service, but patriotism turned out to be good for business, too. The short films were commercial successes. Warner Bros. made money — and kept its soul for the bargain.
If we’re going to reboot the American Cinematic Universe, then Hollywood — just like corporate America broadly — needs to learn the lessons from its past. In short: companies that collaborate with enemy regimes often end up discredited and empty-handed. Far smarter to get out while the getting is good — and to go long on America.
The writing is already on the wall for Hollywood in China. Beijing is squeezing out American films to promote domestic alternatives, including anti-American war movies. The number of U.S. films approved to screen in China peaked in 2018. Last year, not a single American film cracked the top 10 at the China box office. Studios shouldn’t expect a reprieve any time soon. The cold war is only heating up from here.
Breaking out of our cultural malaise will require the studios to wake up and choose America. But it will also require a new crop of artists who are disenchanted with the status quo and who can re-enchant audiences with new, well-told stories. Something like this happened in the ‘70s, when upstart filmmakers like John Milius, George Lucas, and Steven Spielberg burst onto the scene. The film industry had fallen into a cynical, downbeat rut in the era of Watergate and Vietnam Syndrome. The upstarts made it fun to go to the movies again. They brought back heroes, villains, and romance. They rekindled the flame of the American Cinematic Universe.
Then as now, we’re going to need new artists, new visionaries, and new ideas to persuade and inspire. I’ll have more to say on this in the future. For now, this is just a rallying cry to all the Wolverines who are still out there.
Cold War II is a culture war, too. We need to be ready for guerrilla war.
— Shyam Sankar
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