Possibly the most intriguing piece I've written in the past 50 years is the text of a Keynote Address I delivered at the annual University of Pennsylvania Model United Nations Conference in 2013. It touches on U.N. reform, the crowded world, the wired world, and global capital flows. All as relevant today as they were then, if not more so.
You may read the Keynote Speech below or you may download a copy here:
University of Pennsylvania Model United Nations Conference XLVII
14 November 2013
Bonjour, Namaste, Selamat Sore.
Good evening to all of you and I regret that I cannot speak more of your languages.
I am really overwhelmed that you have chosen me to speak this evening. I believe my parents would be especially proud. My mother was an active member of the U.N. Association for many years and my father was a member of the United World Federalists. I was born in New York City, in the shadow of the U.N., and I consider myself to be a citizen of the world before being a citizen of the United States of America.
My remarks will touch on four themes that I hope will appeal to you and other young people everywhere: life in a crowded world, life in a wired world, life in a world awash in money, and making the United Nations more democratic.
Starting with this last theme, you know much more about the United Nations than I do, so I won’t say anything about its history or how it operates today.
I simply want to call your attention to a curious contradiction. While the U.N. Charter does not mention the word “democracy”, it is generally understood in the world today that the concept of democratic rule lies at the heart of the United Nations. In words found on the U.N. website: “Democracy is one of the universal and indivisible core values and principles of the United Nations”.
I don’t have to convince you that “democracy” is a fuzzy concept, meaning different things to different people, but I have always believed that the single most important element of democracy is that all men and women are equal, regardless of where they live, what language they speak, what religion they profess, etc. And this element in my mind translates into the practice in democratic countries of giving every person the same vote.
Of course I understand why the United Nations operates on the basis of one-state-one-vote, but isn’t this way of operating becoming increasingly anachronistic?
So what I would like you to think about is a United Nations in which each country’s vote is weighted by its population, in effect giving every child, woman, and man on the planet a piece of the action. Wouldn’t a United Nations operating in this fashion be more democratic? Might it also be more effective in addressing the global challenges that you and your children and your grandchildren will face in the coming years?
And here’s an interesting twist. Two weeks ago I heard Nancy Birdsall, president of the Center for Global Development, toss out the idea of weighting votes by longevity, so the votes of younger people would carry more weight than the votes of older people because they will be living longer.
A Brazilian economist, Arminio Fraga, has made an even more radical proposal: in national political elections, mothers should be allowed to cast the votes of their children.
If you find any of these ideas appealing, the next step is to start figuring out how to make them happen. I cannot imagine a group of 1200 people on this planet in a better position than you to do so. Revolutions are made by young people and it is possible that more than one revolution will be required for you to be able to live long lives in a peaceful world.
* * * *
Now let me say a few words about life in a crowded world.
When I was born in 1941, five weeks before the Japanese attack on Pearl Harbor, the population of the world was a bit more than 2 billion souls. Today it is two bits over 7 billion souls.
The latest U.N. projections, announced last June, put global population in 2050 at 9.6 billion. The increase from today, 2.4 billion, is equal to the population of China plus the United States plus Indonesia plus all 28
countries in the European Union. That’s a lot of mouths to feed, homes to build, and jobs to create.
So why is there very little discussion these days about population growth? Is it because we believe that technology will enable us to live in harmony in a more densely populated world, as it seems to have done since Malthus in 1798 raised the specter of overpopulation?
I would call your attention to a related change in my lifetime that has been given less attention: all of the empty and easily habitable spaces in the world have been filled. There is not one unclaimed square inch of land or sea on the planet. Vast areas previously untouched by man—especially in the tropics—are being cleared and replanted with oil palms and soya beans and a variety of industrial crops.
This suggests to me that the world is on the edge of a struggle for survival unlike any in the past. There are no more places that communities under siege can flee to, as the Pilgrims fled to North America. There are no more territories that can be colonized successfully.
Some experts believe urbanization is the answer to the problem of an increasingly crowded world. I am skeptical. What I see instead is urban youth unemployment that becomes more combustible year by year.
* * * *
Turning to life in the wired world . . .
What scientific/technological breakthrough in the past 50 years will have the biggest impact on your lives? Is it sequencing the human genome? Is it “fracking” to extract more oil and natural gas?
In my mind, the breakthroughs in information and communications technology stand out above all others—in particular the computer, the internet, and mobile phones . . . the wired world.
I see two looming dangers in the wired world, aggravated by living in an increasingly crowded world.
The first is mass mobilization. It is now possible to deliver a message that “goes viral”, prompting thousands if not millions of people to act.
One of the easiest predictions to make is that this will happen for the first time on a cross-border scale within the next ten years. Neither oceans nor mountains nor national borders will be capable of containing these actions, as they have in the past. When they happen, the actions could be more destructive than constructive.
The second danger is that the instantaneous communication of today’s world may have the effect of distancing younger generations from older generations. As declining fertility—births per woman—produces smaller age cohorts for younger people, and as democratic governance becomes more widespread, we may discover that older people are outvoting younger ones to shift public spending away from programs benefiting the young (like education) and toward programs benefiting the old (like health care). As a result, the young could become increasingly alienated from the old.
In any generational struggle, however, the young will several advantages. Energy is the most obvious. An equally important advantage will be their greater mastery of information and communications technology.
In short, in the increasingly wired world, “the good life” could be harder to attain for both young and old.
And here’s another technology thing to worry about. There might be bigger dangers lurking in the burgeoning field of biotechnology: unintended consequences that could have a devastating impact on the lives of your children and grandchildren. Do you know how close we are to being able to create living organisms online?
* * * *
Turning to life in a world awash in money . . .
I was born in a period of anti-globalization, when international conquest was the order of the day, not international cooperation.
The United Nations system was created as a reaction to the tragedies of World War II, as you all know well,. Another part of the post-war global
architecture was the Bretton Woods system, embodied in the International Monetary Fund and the World Bank and established to foster global economic cooperation.
The Bretton Woods system was a liberal system, but not with respect to capital movements. Capital controls were considered essential to maintaining fixed (but adjustable) exchange rates, which in turn were considered essential to liberalizing trade and payments for goods and services.
How different the world is today! Countries began removing capital controls in the 1970s, after the breakdown of the fixed exchange rate system, and now it is not too much of an exaggeration to say that we live in a world dominated by international capital flows, even driven by them. Driven to the point of forcing us to think seriously about whether we have let the trend go too far.
I have suggested that filling the earth with more than 7 billion people is incompatible with global peace and prosperity. I am now suggesting that trillions of dollars chasing yields in every nook and cranny of the world, motivated by asset managers more concerned about their bonuses than systemic risks or social benefits, is incompatible with global peace and prosperity.
I am not a Luddite. I believe that private capital should be allowed to flow across borders to activities where it obtains the highest financial returns. But not freely.
How many more crises do we have to suffer from before we take steps to stabilize private capital flows, to mitigate the herd behavior clearly associated with both inflows and outflows? I applaud the leaders in Europe who have had the courage and foresight to attempt to design a financial transactions tax that would be globally acceptable.
How many more crises before we insulate our financial regulators from regulatory capture by a financial industry that seems oblivious to the “too big to fail” threat?
For you and your brothers and sisters to sleep well at night, I believe that banking will have to become boring again, as it was before the deregulation
of the 1970s. Boring does not have to mean inefficient. It means finding alternatives to the mutual back scratching that is endemic in the boardrooms of international banks and their multinational client corporations.
* * * *
Looping back to taxes, here is something else to think about: “Paying taxes is glorious.”
We owe this phrase and the insight to Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy in Singapore.1 He was explicitly echoing the words of Deng Xiaoping who said at the beginning of China’s great reform era in the late 1970s: “getting rich is glorious”
Mahbubani was calling attention to the cultural aversion to paying taxes in most Asian countries and how this has the potential of preventing them from escaping the “middle income trap”.
I would expand the insight to the whole world. Nobody likes to pay taxes, right? And today we are witnessing revolts in the United States against a perception of high taxation (inaccurate, in fact) and in Europe against the highest rates of formal taxation in the world.
My best guess is that the countries fifty years from now that are most successful in achieving just and prosperous societies will be those able to extract the most taxes from their citizens—willingly. Or turning it around, those countries whose citizens are most willing to pay taxes to their government are going to have the most enviable standard of living.
So, one way for developing countries to leap frog the advanced countries is by building public sector institutions that their citizens are happy to fund with taxes because they are getting tangible benefits for a tolerable pain.
* * * *
Finally, as a teacher speaking to students, I feel compelled to offer you a reading list with four items:
Number One. The Oxford Martin Commission for Future Generations published a report last month with the title “Now for the Long Term”.2 The Commission was created out of a concern that the world today is not tackling with sufficient vigor the biggest global challenges of this century.
The Commission has grouped its recommendations in five areas. Area number 4 is “Invest in Younger Generations”. I would have made it area number 1.
Specifically, the Commission advocates tackling the “youth unemployment crisis” through “youth guarantee schemes” based on “a broader partnership of government agencies, employers, youth and student organizations, education and training providers, and young people themselves”.
What they have missed, I believe, is building a volunteer service component into these schemes that engenders a spirit of civic activism and contributes to solidarity across social classes.
Number Two. The New York Times published an op-ed by Parag Khanna last month. The headline was “The End of the Nation State?”3
Khanna keys off the latest report of the National Intelligence Council in the United States on the long-term implications of global trends. Several scenarios for 2030 were analyzed for the report, one of which is a “nonstate world”.
Khanna argues that we won’t have to wait until 2030 to find ourselves in a nonstate world. He finds evidence that we are there already. Specifically, he points to the special economic zones that have been created by many if not most countries. He calls these “para-states”.
He goes on to describe how national governments now seem to depend more on their largest cities than the cities depend on their national governments. He recalls a quip often made by Mayor Bloomberg of New York City: “I don’t listen to Washington much”, and he notes that Washington does listen to the mayor.
Khanna’s most radical thought is how this relates to the mess in the Middle East. He predicts that: “The Arab world will not be resurrected to its old glory until its map is redrawn to resemble a collection of autonomous oases linked by Silk Roads of commerce.”
Lots of food for thought here.
Number Three. My Brookings colleague William Antholis and his family recently spent five months in 20 provinces and states in China and India to observe how the balance of authority between the central governments of these countries and their sub-national administrations is shifting.4
What they found is compelling evidence consistent with Parag Khanna’s view of the eroding power of national governments. To paraphrase Antholis, “local leaders are increasingly running much of India and China, which are home to one third of all humanity, from the bottom up. That is affecting how both countries act in the world, which means that these countries need to be understood from the inside out.”
Think about this when you leave this exercise and return to your campuses and homes.
Number Four. If you need more evidence of this phenomenon, here it is.
Two other colleagues at Brookings—Bruce Katz and Jennifer Bradley—have just published a book with the title: The Metropolitan Revolution: How Cities and Metros are Fixing Our Broken Politics and Fragile Economy.5
Here’s how the book is summed up in a blurb: “In the face of federal gridlock, economic stagnation and fiscal turmoil, power in the United States is shifting away from Washington and toward our major cities and metropolitan areas. Across the nation, these communities, and their resolutely pragmatic leaders, are taking on the big issues that Washington won’t. They are reshaping our economy, and fixing our broken political system.”
* * * *
It sounds to me like the revolution has already started. If you don’t run and catch the train, you will miss the ride of your life!
Thank you for listening to me and Godspeed to all of you.
© Lex Rieffel
Nonresident Senior Fellow
The Brookings Institution
14 November 2013