Engineering is Critical: Three Economic Blocs and the Character of Leadership

They say that 'the US innovates, China replicates, and Europe regulates.' This framing captures something real, but misses the deeper pattern. Each of the world's three major economic blocs exhibits a distinctive character—a dominant disposition shaped by professional culture, institutional history, and the backgrounds of those who lead. I use the terms Engineering, Regulation, and Investment to describe these characters. While efficient capital deployment is the primary goal for many business leaders, political leaders serve a different purpose: providing for the effective and safe achievement of public objectives through regulation and investment. Business may be used where efficiency can provide assurance of value. The argument that follows is that the democratic politician, properly understood, is an engineer who uses regulation and investment as tools to deliver a secure society—integrating the strengths of all three characters while remaining accountable to constituents rather than to business interests alone.

Three Characters of Governance

Engineering is the disposition to treat problems as technical challenges requiring mobilisation, construction, and systematic solutions. It asks: What can we build? How do we scale it? How do we assure quality and safety? The engineering character prioritises action and delivery while maintaining standards and assuring safety.

Regulation is the disposition to address problems through comprehensive legal frameworks, standards, and institutional structures. It asks: What rules should govern this? What rights must be protected? The regulation character prioritises order and protection.

Investment is the disposition to view problems through the lens of capital allocation, returns, and market mechanisms. It asks: What incentives can we create? What investments will generate returns? The investment character prioritises efficiency and growth.

These characters are not exclusive—every functioning system requires elements of all three. But each bloc has developed a dominant character, exhibited through the professional backgrounds of those who lead in both government and business. The following sections examine these leadership patterns and their consequences.

Why Leadership Character Matters

The character of a society's leadership determines life prospects for everyone within it. Government sets the framework within which society operates—the rules, rights, and protections that shape daily life. Business provides opportunity and employment—the means by which people build livelihoods and futures. Together, government and business leadership define what is possible.

This means a society's dominant character emerges from the combined influence of both spheres—and crucially, from the balance of power between them. Where business weighs more heavily on the scale, its character predominates regardless of who leads government. Where the state is stronger, government's character shapes society more directly. Understanding any society requires examining both spheres and their relative influence.

The United States: The Investment Character

The Balance of Power

American government has been shaped predominantly by lawyers. More than half of American presidents and vice presidents have been lawyers, as have the majority of Congress members since the founding.¹ This legal orientation creates a governance style focused on rights, contracts, litigation, and adversarial processes.

But American business leadership tells a different story. Fortune 100 CEOs are dominated by business, economics, and finance backgrounds, with engineering strong in technology and industrial sectors. Law appears more as a secondary credential than a primary pathway to corporate leadership.²

In the United States, business weighs more heavily on the scale than government.³ Private enterprise shapes work, consumption, media, and technology. Healthcare delivery, housing finance, higher education, and increasingly infrastructure are deeply commercialised. Campaign finance and lobbying reinforce corporate voice in policy. The result: despite lawyers dominating government, the investment character predominates because business sets the terms of daily life more directly than the state.

When confronted with challenges, the American instinct is to ask: What incentives can we create? What investments will generate returns? How can we structure deals? Problems become opportunities for capital allocation; solutions emerge from market competition.

Privacy as Premium Product

The investment character is visible in American data governance. The United States lacks a comprehensive federal privacy law.⁴ Instead, privacy protection operates through sector-specific regulations—HIPAA for health, GLBA for finance, COPPA for children—supplemented by state laws. Twenty states had enacted comprehensive privacy legislation by 2025.⁵

This fragmentation reflects the investment character's logic: rather than treating privacy as a fundamental right requiring comprehensive protection, American governance treats it as an externality—a cost that falls outside the narrow definition of legitimate business expenses. Data protection becomes a consumer good, available to those with resources to purchase VPNs, password managers, and data removal services. A fundamental right is transformed into a market stratified by income.

The surveillance capitalism model pioneered by American technology companies embodies this logic.⁶ Users receive 'free' services in exchange for data that fuels targeted advertising. On average, over 2,000 companies sent data about each Facebook user to the platform.⁷ Data brokers operate in what researchers describe as a 'policy vacuum.'⁸ Those who can afford premium tools achieve privacy; those who cannot become raw material for data extraction.

The European Union: The Regulation Character

The Balance of Power

In the European Union, the balance tilts toward the state. National governments and EU institutions collectively play a more active steering role: higher taxation, stronger social insurance, and more comprehensive regulation of labour markets, data, competition, and the environment.⁹ This gives public authorities more leverage over how business affects society.

EU political leadership—Commission, Parliament, Council, ECB—is dominated by law and public-law backgrounds.¹⁰ European business leadership leans toward business, economics, and technical degrees, with MBAs less dominant than in the US and a notable share of CEOs with engineering or law backgrounds.¹¹ But because the state weighs more heavily on the scale, the regulation character of government leadership shapes society more directly.

The regulation character emphasises ex ante rules rather than ex post litigation, harmonised standards rather than market-driven fragmentation, and comprehensive frameworks rather than sectoral patchworks. When confronted with challenges, the European instinct is to ask: What framework should govern this? What standards must apply? What rights require protection?

GDPR and the Regulatory Model

The General Data Protection Regulation exemplifies the regulation character. Effective since 2018, GDPR establishes comprehensive rights—access, rectification, erasure, portability—and applies to any entity processing personal data of EU residents, regardless of location.¹² Fines reach €20 million or 4% of global turnover.¹³ GDPR has become what observers call the 'global gold standard' for privacy regulation.¹⁴

The EU's digital governance now encompasses multiple interlocking regulations: the AI Act establishing risk-based requirements, the Digital Services Act governing platforms, the Digital Markets Act addressing competition, the Data Act regulating data sharing, and the Cyber Resilience Act for connected devices.¹⁵

This comprehensive approach carries risks. The European Commission's Digital Omnibus Package acknowledged 'regulatory fragmentation' and sought to streamline requirements.¹⁶ The package was framed as a 'competitiveness initiative'—recognition that the regulation character, taken to extremes, can impose costs that undermine the dynamism it seeks to govern, and that the EU must compete with growth rates generated by the investment-led United States despite not accepting the externalising of costs in that approach.

China: The Engineering Character

The Balance of Power

In China, the party-state clearly dominates. Business operates within political priorities, not alongside or above them.¹⁷ Large state-owned enterprises control strategic sectors. Even major private technology companies operate under close political oversight. The Party sets development plans and industrial policies; personnel controls and regulatory campaigns allow rapid shifts in business models to align with political priorities.

Both political and business leadership share the same character. The party-state apparatus has been dominated by those with engineering backgrounds, though recent cohorts have added economics and some legal training.¹⁸ Business leadership reflects similar patterns, with studies showing CEOs with STEM backgrounds drive digital transformation and innovation.¹⁹ Because both the commanding heights of politics and business share this technocratic pattern, the engineering character is reinforced from both directions.

When confronted with challenges, the Chinese instinct is to ask: What can we build? How do we mobilise resources? What infrastructure solves this?

The Mobilisation Paradox

The engineering character produces extraordinary capacity for mobilisation. China can identify a strategic priority—high-speed rail, solar manufacturing, semiconductor production—and marshal resources at unmatched scale and speed. The results are visible in infrastructure spanning continents and manufacturing capacity dominating global markets.

But the engineering character creates systematic blindness to efficient calibration. Several structural features combine to produce this pattern:

Interest rates do not fully reflect capital scarcity.²⁰ The financial system channels savings toward state-directed priorities at rates that do not reflect true opportunity costs, leading to systematic over-investment.

Local officials are rewarded for investment and output, not returns.²¹ The cadre evaluation system creates 'tournament' dynamics where officials compete to demonstrate growth—with little attention to whether investments generate adequate returns.

Firms with soft budget constraints do not exit when they should.²² State-owned enterprises facing losses receive continued support rather than market discipline, perpetuating overcapacity.

The consequences are visible across sectors. China produces approximately 80% of the world's solar panels—with capacity exceeding global demand by at least 100%.²³ Housing construction assumed continued urbanisation that demographic realities have overtaken—built at a scale mismatched with population trends.²⁴ China produces roughly 29% of global manufacturing output (2023)—nearly double the United States at 17%.²⁵ The engineering capability demonstrated is substantial. But the system struggles to answer what markets handle automatically: how much is enough?

Data Governance: The Engineering Solution

China's approach to data governance reflects the engineering character. The Social Credit System, widely misunderstood in Western commentary, is not the unified algorithmic dystopia of popular imagination. Research shows it to be 'lowly digitalized, highly fragmented, and primarily focused on businesses.' The imagined universal scoring system 'simply does not exist.'²⁶

Early municipal experiments with citizen scoring drew criticism within China for illegally restricting rights. By 2019, authorities clarified that scores could not penalise citizens.²⁷ Yet China's surveillance infrastructure is real—targeting specific populations: dissidents, ethnic minorities, activists. As analysts observe: 'Why would Beijing develop an all-encompassing system covering the entire population when they already have covert tools to suppress targeted groups?'²⁸ The engineering solution is targeted capability, not universal monitoring.

Digital Silk Road: Engineering Goes Global

China's engineering character extends beyond its borders through the Digital Silk Road, which has embedded Chinese technology into global infrastructure.²⁹ The 2017 National Intelligence Law requires Chinese companies to 'support, assist, and cooperate with state intelligence work.'³⁰ Investment in over 100 ports worldwide and deployment of logistics platforms represent the engineering approach to influence: build infrastructure, establish standards, embed in systems others depend upon.³¹

These initiatives are framed as development assistance and connectivity to help countries 'leapfrog' in digital infrastructure,³² but research suggests they frequently serve narrower interests. A study of Chinese ICT firms in North Africa found that 'while Huawei and ZTE have localized activities that can theoretically generate significant linkages, the two Chinese tech firms created no meaningful learning opportunities that contribute to technological upgrading'—instead 'locking local ICT actors into new forms of dependencies.'³³ Infrastructure is often built and operated by Chinese firms, creating what researchers examining Vietnam describe as '"stealth integration" into China's broader digital sphere of influence' through M&A transactions that proceed below government oversight thresholds.³⁴ The programmes also address China's domestic challenge of poorly calibrated production volumes by establishing export markets. From the perspective of Western observers and some recipient governments, the infrastructure raises concerns about intelligence-gathering—a concern heightened by the legal obligation of Chinese companies to cooperate with state intelligence.³⁵ However, as one analyst notes, 'we tend to, again, overly panic about some of this'—the strategic concerns, while real, should be assessed proportionately.³⁶

Three Characters Compared

The data governance vignettes show how each bloc approaches the same challenge differently:

The United States treats privacy as an externality, creating space for surveillance capitalism while protection becomes a premium product. The EU treats it as a rights problem, constructing comprehensive legal frameworks. China treats it as an engineering problem, building targeted surveillance capabilities.

Similar patterns appear in industrial policy. American governance reaches for investment incentives and tax credits. European governance has historically emphasised horizontal measures—creating favourable framework conditions rather than picking winners—though recent initiatives like the Net-Zero Industry Act and CHIPS Act signal a shift toward more activist intervention.³⁷ Chinese governance picks its battles strategically, then mobilises resources at scale for the priorities it selects.

The balance of power between government and business explains why these characters dominate. In America, business outweighs government, so the investment character of business leadership shapes society. In the EU, the state has more leverage, so the regulation character of government leadership asserts itself. In China, party-state and business leadership share the same engineering character, reinforcing it from both directions.

What Each Bloc Needs

China needs less engineering and more regulation—particularly control of personal data from governmental and business actors. The engineering character excels at mobilisation but struggles with calibration. Market signals, property rights, and genuine constraints on state data access would provide feedback mechanisms the system lacks.

The United States needs more engineering and less pure efficiency optimisation—more willingness to direct strategic industries through government action, and better control of personal data collected by businesses. The investment character has hollowed out industrial capacity and allowed private actors to accumulate surveillance capabilities rivalling states.

The European Union needs to balance regulation with greater capacity for execution. Rules alone do not build industries or deploy infrastructure. The challenge is not whether to maintain comprehensive frameworks—these protections are essential and non-negotiable—but how to pair them with the agility and mobilisation capacity that global competition requires. Innovation and growth must be actively supported within the framework, not despite it.

The Tragedy of Divergence

Each character carries limitations. The investment character creates inequality and fails to provide public goods markets cannot price. The regulation character imposes costs that may stifle innovation. The engineering character produces overcapacity and cannot identify when enough is enough until the crisis arrives.

The tragedy of current confrontation is that it pushes each system toward its worst tendencies. The United States doubles down on investment incentives while neglecting regulatory frameworks. The EU risks regulatory overreach undermining competitiveness. China treats criticism as validation of its engineering approach and accelerates production regardless of returns.

None has solved the fundamental challenge: providing guardrails against exploitation—whether by idealist states or by governments captured by business—while preserving dynamism and innovation. Each points to the others' failures while struggling with its own.

A Call to Action: The Politician as Engineer

Analysis alone changes nothing. What is needed is a fundamental reorientation of how democratic leaders understand their role.

The purpose of democratic political leadership is to resolve the conflicting approaches of the demos—unblocking contested issues so that action can be taken to assure the best quality result in the interest of citizen safety and security. This is fundamentally aligned with the engineering character: prioritising action while assuring quality and safety.

The principal tool is regulation—not as an end in itself, but as the means to set standards foundational to citizens' rights. Foundational technologies demand particular attention: financial systems, energy, transport, telecommunications, information technology, education, healthcare. These infrastructures require regulation because markets alone cannot guarantee universal access, quality, or safety. Some must be directly operated by government.

A well-regulated financial system is not a constraint on prosperity but a key asset. It channels capital toward critical infrastructure, supports constituents in crisis, and prevents systemic risks that can destroy decades of progress. The 2008 crisis demonstrated what happens when regulation fails; the pandemic demonstrated what public finance can accomplish when marshalled toward urgent need.

The politician, properly understood, is an engineer who uses regulation and investment as tools to deliver a secure society. This is not technocracy—rule by experts divorced from accountability. It is democratic leadership that takes seriously both the mandate to act and the responsibility to act well. The democratic politician is accountable to the constituents in whom sovereignty is vested, not to the businesses that operate within the jurisdiction. It means embracing the engineering imperative to build, deploying regulation to ensure what is built serves the common good, and directing investment toward purposes markets alone will not achieve.

Each bloc has grasped part of this truth. China understands the imperative to build. The EU understands the necessity of standards. The United States understands the power of capital. The challenge for democratic leaders is to integrate all three: to engineer solutions, regulate for quality and safety, and invest for the common good. That integration—not the triumph of any single character—is the standard to which every political leader should strive.

Endnotes