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b2530 International Strategic Relations and China’s National Security: World at the Crossroads
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Published by
World Scientific Publishing Co. Pte. Ltd.
5 Toh Tuck Link, Singapore 596224
USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601
UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE
Library of Congress Cataloging-in-Publication Data

Names: Lee, Charles (Charles Tsungnan), 1940– author. | Caldwell, Peter deH, author.
Title: The rule of three and the evolution of governance / Charles Tsungnan Lee, Peter deH Caldwell.
Description: New Jersey : World Scientific, [2021] | Includes
bibliographical references and index.
Identifiers: LCCN 2020051741 | ISBN 9789811228261 (hardcover) | ISBN
9789811228278 (ebook) | ISBN 9789811228285 (ebook other)
Subjects: LCSH: Government accountability--United States. | Government
accountability--China. | Human rights--United States. | Human
rights--China. | United States--Foreign economic relations--China. |
China--Foreign economic relations--United States.
Classification: LCC JF1525.A26 L44 2021 | DDC 320.951--dc23
LC record available at https://lccn.loc.gov/2020051741
British Library Cataloguing-in-Publication Data

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Copyright © 2021 by World Scientific Publishing Co. Pte. Ltd.

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Dedication
We dedicate this book to our families, parents, and ancestors for fulfilling
the purposes of some master designer to bring us all together into this one
place. We meet here now not by chance but by design. Authors and
readers alike, we are all learners, and now we set off together upon a
voyage of discovery through many years of time.
We also express gratitude to those great philosophers past and present,
the original learners to whom we owe so much.
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b2530 International Strategic Relations and China’s National Security: World at the Crossroads
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Biographical Summary
Dr. Charles Tsungnan Lee has had a lifelong

interest and successful career in global Information
Technology businesses. He has a proven track record
as a successful venture capitalist, and a 40-year rolo-
dex of cross-border business relationships. He
authored Cowboys and Dragons (2003) and, “The
Code that Changes China” (2012, 2014). He founded
and chaired the Department of Management of
Technology at Peking University (2006–2016). He
also served as a Visiting/Adjunct Professor at The
National University of Singapore, Zhejiang University, and The University
of Southern California (2002–2014). Dr. Lee was a frequent speaker to
many MBA/EMB programs focusing on Entrepreneurship.
Born in China (2/18/1940), raised in Taiwan, and educated in the
United States, Dr Lee has more than forty years of experience in the
Information Technology industry with operating expertise in venture
capital, product development, and marketing and general business

management on both sides of the Pacific. He possesses long and deep
experience working with young technology entrepreneurs to help them
optimize their companies’ growth. Dr. Lee became the first Asian
American Venture capitalist in 1977 and founded Abacus Ventures in
1985 with investors from both domestic U.S. and Far East sources.
In 1979, he became the second investor in Steve Job’s Apple Computer.
Dr. Lee attended National Taiwan University (BSCE, 1962) and the
University of Minnesota (MSCE, 1965, MSAE, 1967 and Ph.D., 1969 in
Applied Mathematics).
vii
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viii The Rule of Three and the Evolution of Governance
Peter deH Caldwell began a teaching and writing

career a bit late, after several decades in business—
including being a part of a team taking a high-tech
start-up public in the early 1980s. He then began
pursuing a long-term interest in Economic History,
taking a PhD degree (1994) in Economics at the
University of Connecticut that was quite inter

disciplinary with a special interest in Scottish his-
tory, political economy, and philosophy. He did

undergraduate studies in English Literature at
Dartmouth College and a MA at Tufts University—as well as an MBA at
the Amos Tuck School. During a twenty-year teaching career, he filled
assignments at Providence College and several other schools and authored
several business books. He and co-author Charles Lee earlier teamed up
in producing Cowboys and Dragons, a book on East-West cultural differ-
ences affecting business relations. The Rule of Three stands as their first
lengthy book together—once more merging their Chinese and American
knowledge and insights.
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Annotated Contents
Biographical Summary vii
Prologue: Queen Elizabeth and Her Three-Legged Stool xiii

Wherein we trace the Three-Legged Stool metaphor to the Faerie
Queene herself.
Introduction: 1979 1
Wherein we speak to the events that came in the most auspicious year
of 1979 and to the following dramatic changes in international rela-
tions, particularly between China and America.
Part One: Anno 30,000 BC to 1,500 AD: The Deep Past:

The Evolution of Human Governance and Humankind 15
Wherein we describe our process for discovering fundamental evolu-
tionary truths about how human communities discovered radical
new technologies and organized for technological advantages.
Chapter One: The Evolutionary Forms of Human Governance 19

Wherein we discover the outer, environmental factors—the hardware—
that drove institutional evolution from the tribal form, through empire
and the feudal state, finally to reach the nation-state, which leads us to
the first fundamental principle for good governance—boundaries.
ix
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x The Rule of Three and the Evolution of Governance
Chapter Two: Schools of Thought and Human Evolution 53

Wherein we discover the inner world—the software aspect—also driv-
ing institutional evolution, which leads us to the second fundamental
principle for good governance—founding myths.
Chapter Three: The Three-Legged Stool and the Quest for Harmony 83
Wherein we argue that the institutions necessary for achieving

harmony and prosperity—and even joy—all take the form of a series
of physical and metaphysical applications of the third fundamental

principle—the Three-Legged Stool.
Part One Conclusions: The Three Foundations for Comity 127

Wherein we condense our findings from the ancient world into three
principles for harmonious human governance from the past and into
our own time.
Part Two: Anno 1500 to 2019: Our Present Age: Cowboys

and Dragons: Applying the Deep Past to the Modern Era 131
Wherein we examine the institutional revolutions that mark our own
period in history, from the point of view of discoveries from out of
the deep past.
Chapter Four: Revolutions in Intercourse/New Schools of Thought 135

Wherein we trace the evolution of thinking, driven by the Printing
Revolution, regarding the three basic governance issues in the 17th-
and 18th-century Western world that led to the American experiment
and the creation of the American nation-state.
Chapter Five: The American Experiment 155

Wherein we trace the manner in which the American Experiment
employed the basic concept of the Three-Legged Stool to re-invent
the nation-state.
Chapter Six: 1979: The Great Inflection Point 193

Wherein we lay out the roots and developments to our present era’s
run-up to 1979, the Great Inflection Point—after which everything
changed for the six countries that we study.
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Annotated Contents xi
Part Two Conclusions: The Progeny of Information Intercourse 237

Wherein we take stock and summarize the effects the Printing
Revolution and the Intercourse Rule of Three have had upon modern
governance.
Part Three: Anno 2019 & Onwards: From Our Present Age
to the Age to Come 241

Wherein we develop a third way for nations to govern so as to find
peace and plenty in the future—all based upon the natural community
institution, the moral order underlying the cultures of all peoples, and
bridges between natural communities.
Chapter Seven: What Happens Next? 245

Wherein what has happened since the Cold War’s end, in both West
and East, gets examined. While the assimilation of people into
social orders yielding peace and plenty offer the last, best hope for
humankind, the extermination practices of strongman rulers may
very well dominate instead.
Chapter Eight: The Why for What Will Happen 257

Wherein we strip away the masks disguising the motives of powerful
rulers and leaders who have played out deception stories—both upon
their own people, and upon themselves—in order to self-justify their
psychotic practices. These practices will continue. The only question
is: How may such rulers be overcome in the future?
Chapter Nine: The How for Peace and Plenty 269

Wherein we discover the third way for ordering governance so as to
yield peace and plenty—the first two traditional ways for nations to
treat with one another being direct warfare against perceived enemies
and power-balancing schemes for keeping something of a lid on vio-
lence. How such a third way may look emerges from the traditional
tools of toleration, shaming, and shunning combined with the third
and last great technological revolution we identify in this book—the
modern Intercourse Revolution. We end with a consideration of the
harms wreaked upon most of the world’s people by corruption in
governance—truly a whore’s petition.
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xii The Rule of Three and the Evolution of Governance
Part Three Conclusions: Men are no Angels: The Existential

Rule of Three 289
Wherein we summarize our findings regarding what, why, and how
harmony, or peace and plenty, may yet evolve throughout the
world.
Epilogue: The Fable of the Beavers and the Otters 297

Wherein we see that these higher-order mammals mimic in their own
cultures the behaviors of some Chinese and American students, who

nevertheless get on wonderfully well.
Appendix A: 1066: The Great Invasion 299

Wherein we employ the story of how a peaceful evolution of gover-
nance according to the Rule of Three amongst the British Anglo-
Saxons got destroyed through the traditional exercise of feudal war,
enabled by another technological revolution, this time in warfare.
Appendix B: August 1914: Russians to the Rescue 311

Wherein we take a playful look at how the Printing Revolution
facilitated the virus-like spread of rumors within a great society.
Appendix C: Public Virtue, Private Vice 317

Wherein we dig into the causes and consequences of the bilking of
the p ublic fisc.
Bibliography: An Eclectic Choice in Readings 331
Index337
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Prologue
Queen Elizabeth and Her

Three-Legged Stool
He gave his Flesh, and Blood in Bread and Wine:

For if his Body he did then divide,
He must have eat himself before he died.
A Meditation How to Discern the Lord’s Body
in the Blessed Sacrament, Lady Elizabeth Tudor, 1688
A Faerie Tale
Once upon a time there was a young virgin queen named Elizabeth who
ruled in a very hilly land. She found her father’s old, four-legged throne
to be very tippy. No matter how on her land she placed it or leaned in it
while sitting on it, one leg was always up in the air, making it very hard
indeed for her to keep her composure—or for that matter her head, as
there were naughty lords in her kingdom who wanted to remove it. In fact,
she would choose never to marry, because she feared that she would then
have to take one side against another amongst the numerous rebellious
lords and peoples facing her. And then, she might very well lose her head
in fact.
So, she thought about having a special, two-legged throne made just
for her, and she consulted the Carpenter Royale. But he warned her that a
two-legged stool would be even worse, because it could tip over two ways
xiii
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xiv The Rule of Three and the Evolution of Governance
rather than only one. So, next she consulted the Court Geometer. “Pray
tell, Sire, how might I build me a throne that will not tip over?” She was,
in fact, very big on prayers generally. Being a very theoretical man, the
Court Geometer replied, “I know nothing about building thrones, your
Highness, but I can tell you that in a hilly, three-dimensional world like
the one in your kingdom, only a throne with three legs could be perfectly
stable. The legs would not even have to be equal in length, but there must
be three of them. In a flash of pure female intuition, she once more beck-
oned her Carpenter Royale to her and said: “Make me a three-legged

throne! That would make my throne completely non-tippy!”
“But your majesty, that would be so inelegant! I do not know how I
could make a three-legged stool look like a throne. In your kingdom, only
milkmaids sit upon three-legged stools.”
“Very well then,” quoth she. “I will rule my kingdom like a
milkmaid!”
And she did. And in all the following some 40 years of her reign, she
never tipped over, not even once.
This story, of course, is only a faerie tale. But, nevertheless, it has
some profound truth to it, as we shall now see.
The True Story Behind the Faerie Tale

The real Elizabeth Tudor ruled England for 45 years—from 1558 to 1603.
And in a certain sense, she did rule seated upon a three-legged stool.
Here’s the short version of the real story: It begins a generation back, as
most real stories do. Her father, Henry VIII, who ruled from 1509 to 1547,
had become enamored of the Protestant revolution initiated by a German
monk named Martin Luther in 1517. Henry fancied himself as something
of a theologian, and when the Pope in Rome refused him an annulment of
his first marriage, he found Luther’s own rebellion against Rome to be
quite a helpful guide for action. He simply took the Catholic Church in
England “private,” to borrow a current business phrase, and sold off the
nonproductive assets of that church. Of course, he then became the CEO
of the renamed Church of England. This move did not work out well for
either him or his kingdom.
Following the founder’s death, a total of three family members sat upon
Henry’s throne—two daughters and one son—not all at once, of course. As
appears so often within “blended families,” the resulting progeny grew up
within conflicting cultural surroundings. The first, Edward VI, was being
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Prologue: Queen Elizabeth and Her Three-Legged Stool xv
raised as one of those new Protestants when, as a sickly child, he died

shortly after his crowning as king. Mary Tudor succeeded him, and being
much older than he had been, and having been raised in the Catholic
Church, she proceeded to kill off those dreadful Protestants who had
influenced Henry and Edward. For this, she rightly earned the sobriquet
“Bloody Mary.”
The second daughter to become queen, of course, was the heroine of

our story here—Elizabeth Tudor. She, also, had been raised a Protestant—
and had in fact only narrowly escaped her older half-sister’s bloody rages.
So, as a precocious child grown into a highly intelligent young woman,
when she received the crown, she set out to avoid the pitfalls of the
Catholic–Protestant conflict raging in her kingdom. In order to do so, she
did indeed for many years sit upon a three-legged stool—metaphorically,
of course, not literally. The two political factions seeking to pull her to
their respective sides could be called the Traditionalists and the Reformers.
One demanded that she force the Church of England to follow Roman
Catholic practices—and eventually yield to the Pope. The other demanded
that she follow the Puritan faction that wanted to purge her Church of
everything Catholic—and even yield to England’s becoming a theocratic
state. What to do?
With a truly brilliant stroke of intuition, such as only very intelligent
women may do, she created a third, mediating position. That position
would come to be called, in the jargon of her era, right reason—thanks to
the Church of England’s only great theologian Richard Hooker. Today, we
would call this sort of reason common sense. So she, with biting wit,
simply threw out demands posed by each side when they seemed a bit
silly to her—and did seem so to most of her people. Thus, in her early
poem quoted above, she made the Catholic doctrine of transubstantiation
seem silly—but not something to outlaw—while carefully avoiding the
opposing Calvinist doctrine held by the Puritans. In short, the third leg of
her three-legged stool was common sense, which she exercised with
uncommon ability. Her genius was to chop up the extremes of the factions
facing her, while avoiding taking biased positions that would inflame one
side or the other.
One should note two basic matters here: One, the Good Queen’s
successors reverted to type and did take one side or the other—ultimately
engaging in a horrid civil war and then reaching a peace between the fac-
tions based on a totally new concept for the world: tolerance of all sides
that did not actually threaten the state. And two, these were not merely
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xvi The Rule of Three and the Evolution of Governance
“religious” squabbles, for religious beliefs then underlay the manner in

which government controlled the behavior of the people. Indeed, until
Henry’s takeover, the Roman Church in England had its own laws and
courts where wrongdoers were tried, and usually convicted. So, too, with
the Scottish Presbyterians whom the future King James royally hated.
Eventually, in the English-speaking world, social control would move
from exterior means to interior means: A culture of liberty and tolerance

would grow, and that culture would create individuals who controlled
themselves so that government goons would not have to. But this is get-
ting ahead of our story.
There is, of course, a Chinese version of the rule of three governing a
social order, but that is too big a subject to place in a simple prologue and
will be taken up later. So, here we will stick with the Virgin Queen and
her three-legged stool.
Principles we Know so Far

The Rule of Three. Dyads are inherently unstable; triads may prove the
opposite.
The Rule of Mediating Institutions. The Rule of Three works when one of
the three institutions functions as a mediator, a peacemaker between
fighting factions. For the West, tolerance evolved into such a mediating
institution. In the East, harmony filled that role.
Outer and inner space. Human discipline may get applied from either
without or within. It is far cheaper and more effective to use ordered
liberty than to use goon squads.
Peter deH Caldwell
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The Rule of Three and the Evolution of Governance Downloaded from www.worldscientific.

Library of Congress Cataloging-in-Publication Data

British Library Cataloguing-in-Publication Data

Copyright © 2021 by World Scientific Publishing Co. Pte. Ltd.

For any available supplementary material, please visit

Desk Editors: Aanand Jayaraman/Lixi Dong

Typeset by Stallion Press

b4057_FM.indd 5 03-02-2021 12:44:08

Dr. Charles Tsungnan Lee has had a lifelong

b4057_FM.indd 7 03-02-2021 12:44:33

viii The Rule of Three and the Evolution of Governance

Peter deH Caldwell began a teaching and writing

University of Connecticut that was quite inter­

tory, political economy, and philosophy. He did

b4057_FM.indd 8 03-02-2021 12:44:56

Biographical Summary vii

Prologue: Queen Elizabeth and Her Three-Legged Stool  xiii

Part One: Anno 30,000 BC to 1,500 AD: The Deep Past:

Chapter One: The Evolutionary Forms of Human Governance  19

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x The Rule of Three and the Evolution of Governance

Chapter Two: Schools of Thought and Human Evolution  53

Wherein we argue that the institutions necessary for achieving

of physical and metaphysical applications of the third fundamental

Part One Conclusions: The Three Foundations for Comity  127

Part Two: Anno 1500 to 2019: Our Present Age: Cowboys

Chapter Four: Revolutions in Intercourse/New Schools of Thought  135

Chapter Five: The American Experiment  155

Chapter Six: 1979: The Great Inflection Point  193

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Part Two Conclusions: The Progeny of Information Intercourse  237

to the Age to Come  241

Chapter Seven: What Happens Next?  245

Chapter Eight: The Why for What Will Happen  257

Chapter Nine: The How for Peace and Plenty  269

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xii The Rule of Three and the Evolution of Governance

Part Three Conclusions: Men are no Angels: The Existential

Epilogue: The Fable of the Beavers and the Otters  297

­cultures the behaviors of some Chinese and American students, who

Appendix A: 1066: The Great Invasion  299

Appendix B: August 1914: Russians to the Rescue  311

Appendix C: Public Virtue, Private Vice  317

Bibliography: An Eclectic Choice in Readings  331

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Queen Elizabeth and Her

He gave his Flesh, and Blood in Bread and Wine:

b4057_FM.indd 13 03-02-2021 12:44:56

xiv The Rule of Three and the Evolution of Governance

oned her Carpenter Royale to her and said: “Make me a three-legged

The True Story Behind the Faerie Tale

b4057_FM.indd 14 03-02-2021 12:44:56

Prologue: Queen Elizabeth and Her Three-Legged Stool xv

raised as one of those new Protestants when, as a sickly child, he died

The second daughter to become queen, of course, was the heroine of

b4057_FM.indd 15 03-02-2021 12:44:56

xvi The Rule of Three and the Evolution of Governance

“religious” squabbles, for religious beliefs then underlay the manner in

University of Connecticut that was quite inter

Biographical Summary vii

Prologue: Queen Elizabeth and Her Three-Legged Stool xiii

Chapter One: The Evolutionary Forms of Human Governance 19

Chapter Two: Schools of Thought and Human Evolution 53

Part One Conclusions: The Three Foundations for Comity 127

Chapter Four: Revolutions in Intercourse/New Schools of Thought 135

Chapter Five: The American Experiment 155

Chapter Six: 1979: The Great Inflection Point 193

Part Two Conclusions: The Progeny of Information Intercourse 237

to the Age to Come 241

Chapter Seven: What Happens Next? 245

Chapter Eight: The Why for What Will Happen 257

Chapter Nine: The How for Peace and Plenty 269

Epilogue: The Fable of the Beavers and the Otters 297

cultures the behaviors of some Chinese and American students, who

Appendix A: 1066: The Great Invasion 299

Appendix B: August 1914: Russians to the Rescue 311

Appendix C: Public Virtue, Private Vice 317

Bibliography: An Eclectic Choice in Readings 331