good evening I'm Noel Lateef president of
the foreign policy Association and I'm
pleased to welcome you to the Centennial
lecture with dr. dambisa Moyo Dr. Moyo
as you all know is a celebrated public
intellectual international economists
and a best-selling author she currently
serves on the boards of many
multinational corporations including
Barclays Bank barrick gold Chevron
Corporation and Seagate Technology she
worked for many years at Goldman Sachs
and at the World Bank
dr. Moyo has written three New York
Times bestselling books winner takes all
China's race for resources and what it
means for the world how the west was
lost 50 years of economic folly and dead
aid why Aid is not working and how there
is a better way for Africa she's about
to release a new book entitled edge of
chaos why democracy is failing to
deliver economic growth and how to fix
it very important and how to fix it
dr. Moyo holds a bachelor's degree in
chemistry and an MBA both from American
University a master's in public
administration from the Kennedy School
of Government at Harvard University and
a doctorate and economics from Oxford
University her
topic this evening is democracy dead
ladies and gentlemen dr. dambisa Moyo
good evening and thank you very much for
that very kind introduction I really
appreciate it I'm delighted to be here
this evening and I should say that it's
often very odd to be sitting in an
audience when someone is introducing
because it sounds like you're attending
your own funeral but in any case I am
thrilled to be here and thank you so
much for the kind introduction and thank
you also to the foreign policy
Association for the opportunity to share
my views at this fascinating political
moment but it's more than fascinating of
course it's deeply consequential what
happens in the months and the years to
come will have a dramatic impact on the
course of history political economic and
social and so I would like to pose
perhaps what I think is the most
important question of our day is
democracy dying earlier this year I
attended a conference which was full of
economists technologists medical
researchers and policy experts where the
host conducted an informal kitchen sink
table top kind of survey on this very
question by a show of hands 85% of those
in attendance thought that the answer
was yes indicating a worry that
democracy is indeed dying upon
reflection there are at least four
reasons why democracy appears to be
under siege first there is ample
evidence that freedom a key pillar of
democratic efficacy is declining
according to Freedom House a nonprofit
that conducts research on democracy and
political freedom 2016 marked the 11th
Seck year that freedoms have declined
around the world meanwhile over the last
decade 109 countries have seen a net
decline in political rights have seen a
net increase and while there are far
more democracies today in the world than
ever before
Freedom House categorizes the vast
majority of democracies around seventy
percent of them as a liberal democracies
where citizens enjoy fewer freedoms and
in many cases where these citizens are
living in democracies that are
indistinguishable from authoritarian
States a second reason democracy appears
to be under siege is the faltering of
democratic institutions specifically in
the United States there is mounting
angst that the veracity of the three
branches of government the executive the
legislature and the judiciary are
deteriorating with respect to the
executive branch for example over the
past several presidential
administrations the power consolidated
in the hands of the commander of chief
has grown largely unchecked by the other
branches of government specifically the
last past three presidents in the United
States have all unilaterally enacted
sweeping executive orders circumventing
the legislative process and even waging
Wars all on their own authority
according to Lincoln Kaplan a senior
research scholar at Yale Law School I
quote whether from Bill Clinton's
executive initiatives in the face of the
Republican control of both houses george
w bush's war time assertions of
authority or other actions the power
concentrated in the white house has
expanded in every administration since
Franklin D Roosevelt
meanwhile the legislative branch has
become so crippled by gridlock and
partisanship that even when the
presidency and Congress are controlled
by the same party the system struggles
to pass urgent and critical policy
reforms a recent example of this is of
course the failure of the Trump
administration and the Republican
majority in Congress to pass health care
legislation but this trend extends back
for decades as evidenced by the six
shutdowns of the federal government from
1981 to today there is a worrying sense
that government shutdowns are happening
with increasing regularity an indication
of mounting political dysfunction
finally systemic imbalances in the
judicial branch have led many Americans
to believe that there are essentially
two criminal justice systems one for the
rich and white and another for poor
minorities who make up a wildly
disproportionate percentage of the
incarcerated population which today
stands at more than 2.3 million people
there is a deep concern that minority
populations do more time for the same
crime the distrust of the judicial
system especially by the poor and people
of color has eroded trust in government
itself making citizens cynical about the
fairness of the democratic process
thereby undermining its efficacy these
disturbing trends may help explain why
the Economist Intelligence Unit which
assesses condition of the conditions of
democracies around the world last year
downgraded the United States from a full
democracy to a flawed democracy in
addition to the empirical evidence on
freedom and the evidence of the decline
in the preeminence of democratic
institutions a third source of concern
about the sanctity of democracy is that
democratic values and principles are
being degraded by today's nor
just political culture and the flouting
of values by elected officials in the
nascent Trump administration alone the
failures of this smell test are legion
in just 10 short months president Trump
has fired the FBI director for seemingly
political reasons engaged in what many
view as an unabashed
nepotism and profiteering and has even
talked openly of pardoning himself and
his family members should they be
indicted by the special prosecutor
appointed to investigate the campaign's
alleged collusion with Russia meanwhile
the tone around the Fourth Estate the
media has also eroded there is a sense
that the news media is no longer the
font of objective information required
for the flourishing democracy media
consumption patterns have changed
markedly during the rise of social media
as audiences have become more fragmented
and the proliferation of fake news has
poisoned poisoned the Democratic well
rendering voters less able to make
quality decisions based on objective
information when taken together these
shifts have fundamentally changed the
way in which public officials are held
accountable to citizens of course it
must be noted that all of these numerous
and distressing concerns about the state
of democracy particularly in the United
States are strenuously countered by some
observers who believe that the claims
that the end of democracy is nigh are
premature they would for example point
out that the fact that the founding
fathers purposefully devised American
democracy to be combative but resilient
in the face of a multitude of political
stresses indeed one cannot deny that the
democratic system they created has
survived countless threats to its
stability for over 250 tumultuous years
from the American Civil War to the Great
Depression to two world wars and water
in this sense democracy is not a static
equilibrium but instead dynamic and
resilient also historically democracies
around the world have been resilient in
the face of direct and indirect
challenges from other political systems
such as Communists and dictatorial
regimes and furthermore the tone and the
tenor of the Trump administration is not
so anomalous when one considers other
even more rankest moments in American
political history as Kevin Baker noted
in the June 2017 article in The New
Republic there are many similarities
between Donald Trump and Andrew Jackson
who was the US president from 1829 to
1837
they both championed the white
working-class expressed disdain for the
elite and defied the courts and Congress
and it must be noted that political
violence is not so far off in the
rearview mirror of the United States
history in just the 1970s four students
were murdered by the Ohio National Guard
at Kent State University during a
nonviolent protest of the Vietnam War at
the very least one cannot yet rule out
the argument that contemporary threats
to democracy are merely circumstantial
and personality-driven vulnerabilities
as opposed to more dangerous structural
ones but here is where I pivot indeed
there is a fourth threat to democracy a
structural threat that I would like to
argue today the economic assault on the
American middle class and how its
decline could very well spell the demise
of the democratic system as we know it
today in the United States the vanguard
of democracy for more than two centuries
to do so let me first establish why a
sizeable middle class is vital for a
functioning democracy
then I will examine why and in what ways
the American middle-class is in peril
and how in this turn in turn in
dangerous democracy finally I will turn
to what it is that we can do to solve
this urgent existential crisis and what
could be at stake if we don't do
anything the veracity and the very
survival of democracy depends on a
strong prosperous middle class that is
able to hold its government accountable
according to research by NYU's Adam
svorski a country's per capita income
and the vitality of a democracy are
inextricably linked svorski
posits that in countries where the per
capita income is below $1,000 a year the
life expectancy for democracy is only
around 12 years in such instances it is
not unheard of for governments to be
overthrown in military code in military
crews when the per capita income in a
country is between 1,000 and 3,000
dollars per year democracy can survive
for 27 years
MSHA Dvorsky has shown that a democracy
will survive come hell or high water
when a nation's average per-capita
income is above $6,000 the link between
per capita income and Democratic
survival is that it's very core an
intuitive one here we're suggesting that
at the heart of democracy is an economic
contract between citizens who agree to
pay taxes on the one hand and the
government who in exchange for those
taxes safeguards the security and
welfare of the nation by providing
public goods such as education health
care infrastructure and national
security if the government fails to
uphold its side of this economic
contract taxpayers in the democratic
system have the right and the ability to
remove their elected of
show some office the majority can simply
vote them out and replace them with new
leaders indeed this was the organizing
principle of the American Revolution
captured by that great rallying cry at
the Boston Tea Party in 1773 no taxation
without representation in other words
the enforcement mechanism for the
Democratic contracts is the right and
ability of every citizen to cast a vote
it follows then that anything that
impinges upon that right undermines the
legitimacy of the contract and therefore
the democratic society itself in this
way an erosion of the middle class moves
us away from full majority full voting
and necessarily leads us to the voting
the erosion of democracy consider for
instance how participation rates of
voters is strongly correlated to income
levels according to the US Census Bureau
fewer than half fewer than 50% of
eligible adults with family incomes of
less than 20,000 voted in the 2012
presidential election whereas voter
participation among households with
incomes of more than $75,000 per annum
with 77% in the 2014 midterm elections
the think-tank demos reports that
sixty-eight point five percent of people
in households earning less than $30,000
per year did not vote I just repeat that
sixty-eight point five percent of people
in households earning less than $30,000
per year did not vote in fact and this
is crucial crucial point for the past 40
years poor voters have never turned out
at higher rates than wealthy voters for
a national election it is not difficult
to understand
troubling dynamic people struggling to
make ends meet are less likely to have
the time or resources to spend hours in
line waiting to cast a vote the poor and
disaffected might also reasonably feel
that there is no sense in participating
in the democratic process this of course
undermines the bedrock democratic
principle of one-person one-vote over
time inadvertently it also moves society
towards minority rule with mere
pluralities of citizens determining
public policy and the direction of the
nation of course wealthy citizens are
perhaps content to live in a pseudo or
non democratic society as long as they
are able to maintain their personal
wealth and policy and political
influence but the same cannot be said of
the vast collective of the middle-class
citizens for the middle-class democracy
is in essence an insurance policy the
premium or the amount that they pay for
that in poor insurance policy is that
they forfeit constraints of damat
democratic society are imposed on them
for example the rule of law taxation and
representative government the benefit of
this insurance policy is the possibility
for the advancement the possibility of
future generations to live better lives
indeed as long as the expected gains
from democracy are bigger than the
expected costs from democracy the
collective middle-class is content with
the democratic system if this equation
reverses however if the expected gains
from democracy by that I mean the
benefits of the prospects of long-term
improvements in living standards are
less than the expected costs the
constraints that we feel today
the middle class will defect
the democratic system in as much as the
equation has begun to turn this explains
the decline in political participation
rates and the worsening of attitudes in
the United States states towards
democratic institutions this ladies and
gentlemen is where politics and
economics intersect
wherever the middle class is
sufficiently weak that it cannot hold
politicians accountable those
politicians become dependent upon and
loyal to a wealthy elite minority as the
middle class deteriorates the wealthy
gain more and more political influence
while most everyone else finds it harder
to exercise their political power
economic deterioration therefore becomes
an impediment to democracy itself the
result is a vicious cycle that renders
the middle class increasingly powerless
and this gap in wealth and power can
have devastating ripple effects when a
disproportionate percentage of the
politicians votes and campaign
contributions come from the wealthy the
government becomes even more likely to
implement policies that benefit the
wealthy at the expense of the middle
class
this dynamic therefore becomes
entrenched and democracy with that being
said let us now consider the state of
the middle class in the United States
today it is true that today per capita
income in the United States stands at at
roughly 56 thousand dollars well above
the svorski threshold that I mentioned
earlier for the long-term survival of
democracy even when that threshold is
adjusted for inflation and yet the
American middle class is deteriorating
at a whirring pace adversely affecting
economic living standards as well as the
prospects for a viable American
democracy there is an unmistakable and
deeply disturbing progression to
divorce Keys threshold for Democratic
survival as evidenced in part by the
fact that many would-be voters in the
American population are vanishing
according to the Pew Research Center in
1971 61 percent of American families
were in the middle class while 25
percent were considered lower middle
class or poor and just fourteen percent
were considered upper-middle class or
wealthy by 2015 the middle class had
shrunk to just under 50 percent of the
US population meanwhile the share of the
population that is lower middle class or
poor had increased to 29 percent and the
share of upper middle class and wealthy
families had increased to 21 percent of
the population economic data paints a
clear picture of this hollowing out of
the middle class real wages for
middle-class jobs have been stagnating
or declining for the past 40 years
according to the US Department of
Agriculture in 2015 roughly one in eight
American households one in eight
American households experienced hunger
and a 2016 Federal Reserve report found
that nearly 50 percent of all Americans
would have to sell personal possessions
or go into debt in order to cover a four
hundred dollar surprise expense such as
any medical emergency the situation will
only worsen in coming years given the
pace of technological change a 2013
study by dr. Michael Osborne and dr.
Carl Frei from Oxford Martin School
predicts that as many as forty seven
percent of all jobs in the United States
could be lost to automation in the next
twenty years and of course the fact that
income inequality has widened over
the past several decades particularly in
the United States and social mobility
has declined it is also a manifestation
of the hollowing out of the middle class
specifically widening income inequality
has to pernicious effects that strike at
the heart of democracy first income
inequality creates political income
inequality effectively dividing society
into two classes of citizens one of the
most shocking indicators of income
inequality in America today is the fact
that the 20 richest people in the United
States control more wealth than the
bottom a hundred and fifty two million
people that's the bottom half of the US
population in 2016
for example 50% of all financial
contributions to political campaigns in
the United States came from just 158
families I just like to repeat that in
2016
50% of all financial contributions to
political campaigns in the United States
came from just 158 families and not only
do the rich control more wealth than
ever before it has also become easier
for them to use that wealth to influence
politics thanks to the Supreme Court's
landmark Citizens United decision
wealthy Americans can make unlimited
contributions to political action
committees far from one-person one-vote
this system effectively allows the
wealthy to buy political influence that
the middle class simply cannot afford
this magnifies the influence of the rich
on politics and public policy precisely
when the number of people in the United
States middle class is deteriorating
furthermore it dilutes their voting
power and undermines the core democratic
principle of majority rule to see the
effects of this outsized influence one
need only look at the eye
geological views of our elected
representatives in 2015 Michael barber
of Brigham Young University surveyed the
ideological views of US senators and
compared them to the views of two groups
so US senators versus voters and US
senators versus their donors
he found that Democratic senators had
views that were significantly to the
left of their voters while Republican
senators views seemed even further to
the right of their voters however the
views of both Republican and Democratic
senators lined up almost perfectly with
those of their donors a clear
demonstration of where the real
political power lies but there is also a
second more subtle effect of the
widening of income inequality as the gap
between rich and poor grows larger it
undermines the empathy needed to bind
together citizens from different walks
of life in a vibrant democratic society
for generations the notion of the
American dream has been the expression
of this empathy
despite one's class color or creed
Americans have been united in the belief
that every citizen has the ability to do
better and improve their lot in life
however as income inequality has widened
and as political inequality has widened
along with it this unifying dream is
dying there is now an understandable
sense that the rich gain unfairly
through a rigged system while the poor
prey on a grossly unsustainable welfare
state these two classes of citizens lack
empathy for each other which ferments
skepticism in democratic political life
and leads to polarization isolation and
even extremism it is quite alarming to
see this dynamic playing out in
contemporary politics
at the height of the 2016 presidential
campaign for instance the Pew Research
Center reported that views of the
opposing parties are now more negative
than at any other point in the last
quarter of a century against this
backdrop of mistrust extreme political
views fester and grow while politicians
themselves cater to an even smaller if
ever smallest slice of the electorate
and public policy no longer reflecting
the wills of the increasingly
politically powerless majority the end
point is potentially calamitous with
economic disintegration leading to
political social and cultural
disintegration in other words the
collapse of a functioning Democratic
Society
the rise of authoritarianism and
dictatorship and even god forbid civil
war
clearly economic prosperity is vital to
the survival of the democracy a strong
broad-based middle class is what holds
democratic governments accountable and
creates political and social cohesion
without it it's no surprise that
democratic society will decline the
bottom line is this the decline of the
middle class in the United States is a
political crisis masquerading as an
economic crisis the solutions to this
crisis therefore must also be political
of course democracy does not die
overnight it dies slowly as the middle
class atrophies and gaps in income and
political power widen to the point that
they rend society apart indeed the
process is so gradual that we hardly
notice it until we look back and take
stock of how much things have changed
25 years ago Francis Fukuyama published
his celebrated opus the end of history
and the last man in it he argued that
Western democracy was in the final form
of human government that all nations
would eventually adopt democratic
systems and that would mark the
and of our political evolution as a
species in the 1990s the Soviet Union
fell catalyzed by the momentum of
democracy and glasnost and perestroika
America was in the midst of an
unprecedented peacetime economic
expansion and around the world the
momentum toward democracy accelerated
indeed from World War two to the early
21st century the number of democracies
around the world skyrocketed from nine
in 1945
to 87 in 2009 today however things look
quite different as Joshua Cole and zyk
of the Council on Foreign Relations me
Council on Foreign Relations argued in
his 2013 book democracy in retreat the
middle class has embraced authorities 'm
authoritarianism and limits on civil
liberties in countries as disparate as
Venezuela Pakistan Taiwan Hungary and
the Czech Republic now exists meanwhile
some democracies have fallen to military
coos while others have been degraded by
internal political forces the result is
a net decline in the democratic
governance globally at the same time in
liberal societies and non representative
governments have demonstrated tremendous
political and economic stability from
China to Singapore to Fujimori's Peru
and Pinochet's Chile clearly democracy
is not inevitable it cannot and will not
survive on its own nor will embracing it
mark the end of our political evolution
as a species if the current economic and
political momentum proves anything it is
that safeguarding democracy requires
constant continual effort from all
citizens and all leaders democracy is
not something that you have it is
something that you do a labor of love
that has lit the world for centuries but
it is not guaranteed for the future the
future of a credible democracy in the
United State
depends on whether or not we can restore
the American middle-class repair the
breach between the government and its
people and renew that sacred Democratic
contract that has allowed this nation
and all of humanity to thrive what is
needed to save American democracy
however goes well beyond economics and
the typical economic toolkit of cutting
interest rates and boosting spending and
beyond just a viable route towards the
middle class what we are describing is a
political problem and economic solutions
are woefully inefficient indeed nothing
short of major political reform will
avert the calamity to be sure there is
no silver bullet that will shore up
democracy here and around the world but
the end goal of political reform is
clear we must aspire to democratic
societies in which all voters cast
ballots and in which they are armed with
objective knowledge in such an ideal of
democracy public policy will necessarily
reflect the will of the majority and
will economically benefit a broad base
of the public anything that moves us
toward greater participation and
objective knowledge strengthens the
middle class and anything that moves us
away from it
imperils the democratic project and
democracy's chance of standing the test
of time it would be hard for me to
understand the magnitude and importance
of this challenge but I would like to
end on a hopeful note the torch of
Liberty is indeed facing gale force
winds and yet perhaps it will not be so
easily extinguished Abraham Lincoln
proclaimed in his famous Gettysburg
speech during the height of the American
Civil War that government of the people
by the people for the people shall not
perish from the earth
indeed 154 years later it has not yet
perished with hard work and good fortune
perhaps it never will thank you
would you like to give your opinion and
why the middle class I mean the lower
economic bracket is not voting and not
participating I think during the Obama
elections that they did come out and
vote but I'd like to hear your opinion
yes so thank you for that question the
question is really about what I term to
be hope and expectation part of the
problem and I alluded to it in the
speech is that there are a lot of
elements of the American Dream
specifically issues around social
mobility and the ability for people to
work hard and actually improve their lot
that have deteriorated over the last
several decades people do not believe
that hard work and education actually
lead to better outcomes and there is
absolutely concern around the fact that
many of the challenges that the economy
is facing from debt to income inequality
productivity declines technology in the
job is underclass those types of issues
pension reform are well known but those
are all tend to be long-term problems
and yet the debate in the political
sphere tends to be very short term so
what we're facing is a schism or a split
between the long term economic problems
and the short term discourse that we
hear coming out of Washington and I
believe that people just feel that this
is a system that is fundamentally not
addressing the challenges and the
concerns of the population and they
don't really believe that they have
enough rope to be able to affect change
Ronald Reagan said government is the
problem and since then government has
been weakened and weakened to the point
that where we are today and we have
voter suppression we have gerrymandering
we have public policy that only
continues this trend so how do we change
that what specifically can we do to
redirect what's happening especially in
light of the fact that we are facing a
jobless society at least in the lower
classes lower know middle class so what
do we do so I I'm I know it's a bit
gauche to plug your own book but I was
but I will do that I have a new book
coming out called the edge of chaos
which would be out in the spring which
was mentioned in the introduction and in
that book I do specifically provide a
menu of options and what we can actually
do very simplistically though for
purposes here I have separated the
proposals into two camps they're part of
them the majority of them are for
politicians so what can we do to
actually improve political outcomes
based on what we can do to improve our
politicians and Representatives but the
other part of it is about what we can do
for individual the voter what can we do
to improve the Votan dilute it to the
fact that the need for objective
information in particular the third
piece which is a key pillar of the
discussion is about government but the
truth is that many government people in
government that's me the civil service
are would argue that they're hampered
from doing their jobs because of the
political environment so just to give
you some examples a lot of the things as
I mentioned a moment ago that we're
dealing with in the economic sphere are
long term problems and many public
policy makers who are in the civil
service can tell you and could come up
with solutions or what they think is the
right path to deal with the debt problem
in the United States for example or at
least come up with some ideas around how
to deal with productivity
some of the challenges around technology
that we discussed of course even the
Democratic excuse me the demographic
shifts that were encountering the
problem is a lot because a lot of those
things are long term having our
superimposing the government with a
short-term imperative which is what
politicians come with they're facing
elections every two years means that you
don't have the policies that actually
are long-term beneficial for society you
end up with policies that win elections
and really at the heart of my book is
really trying to get at ways to bridge
this gap between the short termism that
we see in myopia we see in in public
policy and these long term views of of
government it's there's there many
studies that I could cite I'm the
Millennium Challenge account research is
very good about the efficacy of
government and it may come as a surprise
to many people here the things that
actually enhance or make government more
efficient efficient have little to do
with democracy per se they have much
more to do with meritocracy in the
government issues around the ability for
the the government to not be in an
environment of corruption and and a lot
of other things that some of them may be
a bit obvious but I think that it's
certainly the ability for government to
be effective is is more and more about
how detached or independent they are
from the political process
and in the 2016 elections the Koch
brothers are repetitive steered about a
billion dollars into the elections this
because of citizens united which opened
the floodgates of political
contributions enabling the wealthy to
essentially dominate elections those
motivated by money Republicans are
putting more in now than I those
dominated by idealism the cokes versus
people like store and so on any comment
on this how important that is to me that
seems to be defeating democracy
so it's interesting well I was so the
the summary question is about citizens
united and the fact that specifically
the gentleman is referred to the Koch
brothers and sort of a lot of money
being funneled towards sort of political
the political process through the you
know basically the reduction of
limitations on how much money wealthy
person can contribute to the electoral
process I have to say that my read of
the situation it's not just on the right
hand side I don't think it's just
Republicans that are guilty of ever
trying to advance their political agenda
or the ideological views about the way
the US should run I think that also on
the left hand side very we know many
wealthy people who have been using their
you know deep pockets shall we say to
influence the political process in a
very legitimate way but I would say that
that to me undermines the long-term
economic growth prospects and I think it
also undermines democracy as I alluded
to here unfortunately it is as I
mentioned very legitimate it's in within
the bounds of the the Supreme Court
decision and III have to say as someone
who was born and raised outside of the
United States and and in that vein I
should say I I feel very much like
Alexis de Tocqueville kind of coming to
visit the United States and
trying to learn what's going on in the
political process I do think that it
seems to me that that's a weakness in
the democratic process because of many
of the things that I alluded to it
definitely creates a schism between the
haves and have-nots and who's able to
influence public policy I will say
though that there are people who will
say well if you look at the United
States public policy agenda pre Trump so
certainly in the last ten years before
president Trump's election a lot of the
decisions in terms of environmental
concerns in terms of much more what I
would say things like diversity a lot of
those public policy moves have actually
been much more on the left and you know
perhaps there's an own argument by many
people that perhaps the right wing money
has not been as successful as one might
think in terms of influencing public
policy but that is that is one of the
arguments so it may change but I think
over the last certainly over the last
ten years we've had we you know Baba
macare came in we've had you know
signing up to a lot of these treaties
and I think people would say well yes
there might be a lot of money going into
the public policy but still we have very
what I'd call very liberal views that
are being have been implemented but of
course we're in the middle of a new
regime and a lot of that's being
reversed
frankly over the past ten years barring
the current administration public policy
does not reflect that money has has
influenced politics a major decline is a
loss of manufacturing jobs particularly
in middle of America substitute and
change that and resuscitate those jobs
if you if I could give you that answer
I'd be in Tahiti so so the I think that
there are another number of things I
would say to maybe help think about the
issue not necessary to give you an
answer prepackaged to answer so at the
turn of the last century 1900 around
sixty percent of the American population
was involved in agriculture and today
that number is under two percent of the
American workforce and as many of you
know the United States workforce went
from agriculture to manufacturing to
services so today about over 80% of the
American workforce is involved in
services and around 18 percent in in
manufacturing the United States has
absolutely benefited from always emerges
to absorb absorb a large workforce and
you know increasingly it's not just
about low low educated workers or lowly
skilled workers increasingly the face of
technology will also impact higher
skilled workers that have more
routinized jobs so that is a challenge
that we do face one of the things I do
spend a lot of time in Silicon Valley
and one of the common refrains is just
because we don't know what's coming
doesn't mean that there isn't something
coming that will absorb this workforce
the in truth that is not the way public
policy operates we can't all put our
feet up and say well that's fantastic
something is going to pop up and
that's why there's such a source of deep
consternation because as I mentioned
over 80% of people in the service sector
working in the service sector and if we
do see the types of de munition of jobs
that we've seen in manufacturing or
indeed in agriculture we can we can
forecast or become deeply concerned
about what happens to that that work
force efforts to retool there's a
fantastic book that just came out called
Janesville which shows how complicated
is it is actually to retool a small-town
Society in your society you know a lot
of the emphasis on stem and and Sciences
which is what is required in order
really requires you to get into R&D and
and some of the sciences scientific
innovation areas I think is is a big ask
not because people are simply incapable
but I think that it does require a
massive invested in investment in
education and as many of you in this
room know on a per capita basis although
the United States is one of the leading
countries and in terms of dollar value
in terms of outcomes so if you look at
the OECD Pisa report for example in
terms of education outcomes the United
States lags behind not just many
developed countries but also many
developing countries and so I don't have
an answer that's neatly packaged I like
many economists I'm desperately
concerned about what the world might
look like not just the United States but
globally they're around a hundred
million young people between the ages of
18 and 25 who are out of work and it's
it's becoming you know in an autumn eyes
world world becoming much more
challenging particularly in emerging
markets were 60 to 70% of the
populations under the age of 20 so these
are acute issues I could give you many
examples I'll just leave you with one
other thought if you look at the
majority of the states in the United
States the majority of young men or
working working work force age men are
involved in trucking or some form of
vehicles of delivery trucks taxis etc
and the prospect of driverless vehicles
could
really impact on their opportunity of
job job prospects the question though is
how does Public Policy respond we hope
that public policy invests in retooling
and rescaling and thinks about new
opportunities for people but there is a
temptation for public policy for
overreach which I guess you might have
been alluding to and you know taking a
sort of a much more hardline regulatory
stance against these types of
innovations which I don't think is a
long-term solution John Maynard Keynes
the British economist in the 1930s
forecasted or predicted that by 2030
which is just a few years away from us
now we would be looking at a 15 hour
workweek so many people smile when I say
that but I think and then the he
obviously he also left us with the
question well what will people be doing
with the all that spare time and his
answer was hopefully you'll be
contemplating God and not trying to kill
each other sir you talked a bit about
the the gains and the I guess losses or
cost of of democracy could you just
expand on and perhaps define your terms
a little bit more in terms what you
about the costs that you view or what
you view as the cost of democracy
democracy sure so I mean I think that a
very simplistic way of putting it is
that if there weren't any constraints on
our behavior we could be living a sort
of Hobbesian life you know I might be
offended by somebody and rather than
settle it out in court with some kind of
a rule of law I could just you know go
out and and murder them god forbid and
there are many other aspects of those
costs so it's not just the rule of law
but it's also the fact that I accept to
pay taxes to the government the fact
that I believe in a judicial system that
is designed to be fair to judge you know
disagreements the fact that I in the the
legislature so it's about the fact that
that public policy does the right thing
from the majority I mean all of those
are essentially costs for an individual
because I could also take
view that you know this property of this
amount of land is mine because I'm
sitting on the piece of land but that's
not how we operate we all have accepted
that there are certain norms and rules
that we've agreed to abide by and those
that whole infrastructure political in
touch is incredibly delicate because if
people start to believe that actually
it's not a level playing field and some
people are getting unfair advantage
whether it's access to university places
access to jobs access to capital it's
those types of unfair standards that I
think undermine this this our ability or
our willingness to to pay these these
costs the costs of accepting of the rule
of law
accepting the taxation in such and so on
first of all thank you so much for your
comments are really quite illuminating
and think together an awful lot of
interesting information into a whole
concise presentation I'm interested in
your comment about objective knowledge
and how you see that as one of the one
of the answers to some of the Mercer's
malaise that's going on right now in our
fragmented media world how do you think
something like that could be achieved
and also how you see that would
necessarily affect participation in
voting so I'm great question I think
there's sort of two parts I think about
so one is in anything this lady here
mentioned this the idea of a civics
lesson so as a foreigner when you come
to this country if you are applying for
citizenship you have to take a test and
that's true for any foreigner going to
most you know most industrialized
countries and I think that there's a lot
it may seem pretty simplistic but I
think there's a lot of benefit to that
because there's a better understanding
of how the system works and I think that
there are there is scope for people to
understand not just how the system works
but really have a better understanding
of what's up for debate whether it's in
the area of health care or education or
infrastructure or any of the other
deeper public policy issues that that
we're dealing with how do we get to a
place of objective knowledge I don't
like to suggest this because I'm not
Klee a big fan of big government I think
that there are there is an important
debate to be had about efficiency of
government but I and I'm not necessarily
Pro small government just for the sake
of it but one of the things that has
worked somewhat in the European context
is to have a national media champion so
in the United Kingdom for example they
have the BBC it's not to say that this
has also not been vulnerable to some of
the the trends and challenges of the
social media and different new media
outlets but I think conceptually the
idea that as citizens we all pay a
certain amount to a national agency or
national outlet that is designed to
provide clear information without a
slant or perspective to it I think it's
conceptually a good idea I think it's
critically important because what you
want is a population to really
understand what the trade-offs are
between the the benefits that we might
accrue today so for example a tax cut
versus what that might mean for a
burgeoning debt you know a debt for
future generations of Americans and I
just don't think that the quality of
debate that we have in such a fragmented
media environment and helps that oh just
ask me to just finish up she asked sorry
beg your pardon she asked him how would
it affect the participation well I think
that it may not I think so there were
two bits to what I think the the
Democratic Nirvana if you will we want
everybody to vote but we want there also
to be what I call high quality voters so
I don't want people voting because they
think somebody's pantsuit is great I
mean we want people to vote because they
actually think that the policy suite of
policies is is is very good so I think
that the the issue of the media point is
much more about the about why people are
voting as opposed to the quantity of
voters and I think that there are a
number of proposals that I talked about
again my book around how to get more
people to actually vote
hi thank you very much for being here
and for having us my question I'm sorry
is a bit more global I'm from Egypt and
so you know our relations with America
are quite tight we're very big fans but
in terms of a dying economy would you
say that
so although America is not the number
one democracy in the world countries
like us look up to America because of
you know its foreign policies how it
relates to us and all that would you say
that the dying democracy in America is
also affecting socially politically and
economically all the countries that look
up to it as you know a model for a
democracy or a country with whom we have
so many relations that could help those
countries prosper yes so um it's a
fantastic question because the the the
the reason I focused largely on the US
examples is because it's critically
important that the u.s. get it right if
the u.s. gets it wrong there's so many
other countries around the world that
are on shaky ground it's very hard even
for myself and my little microcosm of
the world to travel around the world and
I've been very fortunate I've traveled
to over 80 countries to spend time with
businesspeople and public policy
academics and politicians and tried to
convince them that democracy and market
capitalism are still worth betting on
and that these tools or these ideologies
are the best you know and and should be
the ones that we should pursue and then
that really means that the US has to get
it right it absolutely has to get it
right and I was struck you know earlier
in the year by a comment around sort of
the the sort of fact that we've fallen
out of love with globalization and one
of the comments that was made I believe
it was Jack Ma the founder of Alibaba
China from China he made the point that
the United States has benefited
considerably from globalization it's
made a lot of money but unfortunately
the public policy decisions in this
country were to take that money and to
use it to fight wars if that money had
actually been redirected into the
heartland of the United States to retool
or to reinvest we might have a very
different attitude towards the idea of
of globalization that's a small example
to really sort of paint a broader
picture of why it's so important for us
to have higher quality debates about the
not just democracy in the context of the
United States but what it actually means
for human survival and for you know if
the future of the human condition and I
think that we should all care and we
should all defend democracy I won't
repeat wouldn't Winston Churchill's
point about it being the best we all
tend to have very very sort of critical
views about countries that are blatantly
non democratic North Korea we have
advice for North Korea we advice for
Cuba have advice for China but where is
the advice for democracies that is what
was really the motivation for not just
the speech but also for the book that
I've written and it's the the fate of
the world certainly in terms of the
political realm does absolutely depend
on that Alexis de Tocqueville observed
that America was stopped inherently
great it was brief because it was able
to correct its mistakes and Senate so
hopefully we still have time to do that
