DANIEL DREZNER: (In progress) -- that could come down here and host this very, very intriguing conversation. The two people to my left need no introduction, but nevertheless, I'm obligated under CFR rules to introduce them anyway. In the middle is Moises Naim, who is a senior associate in international economics at the Carnegie Endowment for International Peace, the former managing -- the former editor of Foreign Policy magazine and the author of the book, which will be available outside for sale, entitled "The End of Power," with a longer subtitle that I honestly can't remember at this point.
To my far left is Fareed Zakaria. If this was the Oscars and I was Seth MacFarlane, I'd just walk offstage at this point -- (laughter) -- because he needs no introduction, but, you know, a well- known commentator, a contributing editor to Time and, of course, the host of "Fareed Zakaria GPS."
So I think we're going to start by -- since Moises has the book, Moises, if you could give us a sort of brief precis of what your argument is in "The End of Power" beyond the title.
MOISES NAIM: Thank you, Dan, and thank you all. Let me start by just thanking you all for taking time off your busy schedules. Thanks, Fareed, for being here and being such a good friend and to Dan. And I also wanted to especially thank Richard Haass, the president of the Council on Foreign Relations, for being such a generous, supportive friend over all these many years.
The book -- the thesis of the book is that something fundamental, a fundamental mutation of power is taking place these days. But we know that power is shifting and spreading. We know that power is shifting from east to west, to -- sorry, from west to east and to -- from north to south. And geographically, there's a big spread of shift. And there is also a social spreading. It's spreading from presidential palaces to public squares and the streets; it's spreading from large corporations, old, large, once-dominant corporations to recently arrived, small, agile startups. We recently saw how Kodak, once the dominant and almost the monopoly on photographic industry went down while an app called Instagram that was just created was sold for a billion dollars and is booming. So we see all of these things. So there's nothing new there.
What I claim it's new is that there is -- power is not just shifting and spreading; power is mutating and becoming more fragile. Power has become easier to acquire, harder, more difficult to use and faster to lose, easier to lose. It's becoming more fleeting. It's becoming less secure. And those that have power are seeing the barriers that protect them from the challenges -- from rivals becoming less protective. And that is not just happening with nation-states. It's happening in national politics and political parties. It's happening in business, in the military, in religion, in labor unions. And my thesis is that it's happening almost everywhere where there is organized human activities and undertakings.
I am aware that this is a very bold statement at a time in which we have seen -- we are living in times in which wealth is concentrating, in which there is all the anxiety, the justified anxiety, of the 99 percent and the 1 percent, and we still have around the world very powerful centers. Just think of Vladimir Putin or think of the Chinese state or even think of the president of the United States.
However, I will claim that each one of those very powerful power centers are now less powerful than they were before. Just compare -- just imagine if the current -- the incoming president -- we're going to have a new president of China appointed now this month, and compare his ability to do things with what Wen Jiabao had, the person that launched the massive opening and reforms in China. Just imagine if -- how much more constrained is the current president of China.
And if you think about just this week, just this few weeks, what happened: The sequester, of course, is a paramount example in Washington; then the Italian election -- and, of course, Italy was always an example of dysfunctional politics and very strange dynamics, but now they have got -- they have gone over the cliff and in a very -- to a very strange situation of gridlock, paralysis and almost a state that is incapable of making decisions; what's happening with the Vatican, and I can give you details about how that also is -- exemplifies some of the trends that I discuss in the book; in Brussels and the financial crisis in Europe and how it continues. And I would claim that a lot of what's happening in Europe is -- has to do with the fact that no one has the power to stop it, to actively intervene in it, not even Angela Merkel.
And I can explain that.
So I would not bore you with more examples, but there are plenty of those, and with statistics and evidence in the book, I was -- when I was writing the book, I was very aware that I was talking about a subject that has been very well discussed for centuries and that I was essentially a very challenging and a very bold counterintuitive assertion. So I made it my business to try to be very, very close to the data and be very dependent on what the data said, rather than opinions and anecdotes and statements.
So why is this all happening? The immediate reaction people have when one says that is the Internet and social media. And of course the Internet and social media are extremely important drivers of the -- what I say -- I call the decay of power. But I think those are tools, and tools need people and groups that use them, and those groups need motivation and direction and incentives. And those come from deeper changes that have less to do with the Internet.
And there are a variety of factors and forces at work that -- to simplify, I aggregated them in three major baskets, three major categories of forces, transformational forces. One I call the More Revolution, the second I call the Mobility Revolution, and the third I call the Mentality Revolution.
The More Revolution in this audience needs no explanation, is we are living in the age of more. We have more guns and more medicines, more material affluence, more countries, more political parties, more activists, more NGOs, more universities, more everything. Just counting, if you look at the numbers, they're quite staggering.
Of course it all starts with the fact that we have more people, but it continues with the fact that we also have a huge expansion -- we have had a huge expansion in the world economy in the last 20 years that has no precedent in human history. And we have an abundance of everything, and that means that it is harder to control and to exert power over more. It's -- Brzezinski, Zbigniew Brzezinski, has a now- famous quote in which he says it's now easier to kill a hundred million people than to govern a hundred million people. And he's right. Governing a hundred million people or more has become very, very difficult, as we see everywhere.
And the -- then that -- then not only we have more of everything but that more of everything moves and moves faster and moves in a much cheaper way. And mobility -- we have the mobility of everything, of goods and services and money and ideas and illnesses and the financial crisis and -- you name it, that it moves. And people are moving and are moving quite strongly, and the number of people that are moving around the world and live in countries other than their own has also increased.
And again, that also has consequences for power. It has political consequences. We just saw the consequences of the number of Hispanics in the United States in terms of their most recent election. And we can see foreigners acquiring power, "foreigners," quote- unquote, acquiring power in very different places and with great surprises. Recently a man born in Nigeria became the mayor -- was elected the mayor of a town outside Dublin. And you have all kinds of surprises as a result of this mobility of everything.
And of course the combination of all of that ends up affecting the mentality, our cognitive -- our worldview, our mindset, our expectations, the way we accept or do not accept rules, by whom and under which circumstances, and what does -- authority means anymore, what does it mean -- you do that because I say so. That phrase has lost a lot of power recently, and it is true for families and for children. Is it true for gender relations? One of the examples that I use in the book that I think was quite striking is that divorces among the elderly in India are soaring, and they are mostly initiated by women. And these were arranged marriages, arranged marriages, people who were married 30, 40 years ago, and the women are not taking it anymore and initiating divorces.
Something similar is happening in the Gulf countries. And you know what I mean: The change in attitudes, expectations, aspirations is also transforming the way people think and the way people behave and the way people relate with and to power.
So each one of these three revolutions is well-known. Together, they create the decay of power that I discuss in the book.
I think I spoke longer than I should have. There is -- there are two questions that I'm sure my two friends are going to raise. One is, so what? And other is, what to do with this? So --
DREZNER: So, Fareed, so what? (Laughter.) And what do we do -- no. You know, so Moises is describing a very sort of interesting transformation in the world. I guess my first question I would ask to you is, you know, beyond your just general impressions, does this match up with what you were arguing in "Post-American World"?
FAREED ZAKARIA: Look, Moises has written one of these books that is truly, you know, a landmark because it's thought-provoking, it deals with fundamental issues, it makes you think about the way the world works. So I have tremendous admiration for it. There are some pieces where it does dovetail quite nicely with the some of the things I was saying in "The Post-American World."
But let me -- just at the -- at the cost of putting our friendship at risk here -- (scattered laughter) -- let me ask whether it is a -- it is -- whether the picture you presented is exactly the way I see reality, whether there are some differences and nuances we can explore.
So you talk in your Washington Post article about Joschka Fischer saying that he walks into these palaces that European ministers are, you know, blessed to be able to govern out of. There are all these great kings' palaces. And he things about how little power he has compared with the extraordinary architecture. The architecture of power, in a sense, is far more imposing than the reality that modern governments have.
And I thought to myself, is that really true? Let's think about when these palaces were built. Many of them were built in the 16th, 17th century. Did these governments -- you know, well, you always tend to think that we're living in terribly degraded times and there were good old days when people really had power -- did those -- did those princes and kings have much power?
They barely governed the countries that they claimed to be governing. They had very little monopoly of force -- Weber's definition for a -- for a government. Most of them were constantly being opposed, challenged on grounds of legitimacy, on grounds of actual control, by everything from earls, dukes, you know, neighboring city-states or at a -- at a level of legitimacy -- you know, they were dealing with the church, which was constantly contesting them. I remember one-third of Europe was governed by the church. One-third of Europe's lands were governed by the church and exempt from state -- from state laws. So that was the reality of the state until very recently: In 1900 the share of GDP that the state took up was somewhat between 5 and 7 percent in most Western countries.
So now you look at it and say to yourself, these degraded times when these -- you know, these completely paralyzed, hapless politicians -- well, they preside over governments that control somewhere between 40 and 70 percent of the -- of the GDP of the country, which means that they have -- you know, I don't want to sound like Mitt Romney here, but they do have an extraordinary bounty of largess that they can provide. There is a vast panoply of regulations that governs every aspect of your lives, whether -- you know, in industry, in professions. All these make Washington and London and Paris the absolute centers of intellectual, political, cultural life because you have to go there. You need -- you know, small manipulations in the law have huge impacts on what you can -- what you can do in terms of your life, in terms of -- just about everything that you want to do.
So that's the one place where I wonder, you know, is it really true -- I mean, the American president is now seen as this hapless, paralyzed figure. But that was sort of part of the point, if you remember. You know, for most of American history, the president was not really supposed to be, you know, governing; he was supposed to be presiding, in a sense. He was supposed to make sure that the laws were faithfully executed. Congress was the absolute center of the action of government. And that was as it was -- as it was meant to be. The modern imperial presidency is a very recent innovation.
It's true that during wartime, presidents -- governments always do well during war, and the president does particularly well in wartime. So if you compare it to FDR's ability to deploy troops in World War II, Obama doesn't have that much power, though, you know, the drones give him kind of an extraordinary power in addition.
But other than that, think of FDR himself, with the courts invalidating most of the New Deal in the first two or three years. So that's, you know, one section I wonder about, which is government.
Business -- now, I grew up in a --
DREZNER: And I'm very skeptical of that now as well. To what extent could you see a reversal of the kinds of trends you're talking about?
The second question -- and you got at this with your comments, which is I kind of wonder whether what you're talking about is not the end of power but the end of authority, because in some ways the key about authority, the reason -- authority is the legitimate exercise of power. And because it's a legitimate exercise of power, it takes much less effort. That's what legitimacy allows you to do. It allows you to say, I think this is what we should do, and then you don't have to whip, you know, people either literally or figuratively to get what you want done. And I'm wondering if what's happened is not so much the end of power but rather the end of authority.
And then finally -- and this is something that I got from reading parts of your book -- and it -- only in the Council on Foreign Relations audience will we think that the end of power is a bad thing, you know -- (laughter) -- because that's what -- this is our bread and butter. It's worth pointing out -- and I think you hint at this in the book -- oh, no, businesses have to compete more with each other; oh, no, states can't occupy other states. You know, this is not necessarily a bad thing. The peak of the Weberian state, as you're talking about, was a world with Nazi Germany and the Soviet Union. I'd like to think that -- in some ways, I hope you're right, because it strikes me -- you know, could you talk a little bit about what the positive aspects of the kind of shift you're talking about are?
NAIM: Well, OK.
DREZNER: All in two minutes. No, I'm just kidding. (Laughter.)
NAIM: Let me start with the last one, because that's easy. There's a whole section in the book celebrating what's happening and explaining why it is bringing us more competition in politics and society and business and everything else but also recognizing that the challenge is ahead, and that has to do with your question, the very good question about extrapolating, which is the not-so-good part, the "glass is half empty" part of the story in which you do end up with gridlock.
And I don't care as much with the decline of power in individual companies in the private sector. I don't care if a specific bank is less powerful today. But I do care if the capacity of the world to take -- to tackle issues that are global in nature is being undermined by the inability of the countries to act together, which is a big implication of what's there. But -- and there is more about that. But your point, Dan, is very good in terms of there is a lot to celebrate as a result of this.
Let me deal with the three categories of objections that Fareed has, are very good and, I think, are very smart. The first one just illustrates how sensitive this whole argument is to the time period you pick. You know, he, of course, is right when he takes the -- that time span. But then I just can tell you, what about -- you know, the point is the state was always fragile, power was always feeble, fleeting, and these people that were governing were, in fact, heavily constrained and in danger all the time. That's your argument.
Well, true, but that also illustrates the ebbs and flows of power and in circumstances. Instead of picking that period, just think about the British Empire or think about the Roman Empire or think about the Soviet Union. You could not argue that in the peak of the Cold War, the Soviet Union and the Russian government -- the Soviet government was feeble and fragile. You know, certainly it had more -- it had huge concentrations of power. And the same you can say about the different period of history. So it depends on what is a time frame, and you can pick selectively different periods to illustrate the point.
So -- but that's a good -- the second category is about business and how business and the private sector is now more admired and influential and powerful than ever, and that's true. The private sector as a category -- private firms and private CEOs are more embattled than ever. And there are numbers about that.
There is a -- there's a fantastic study that I quote in the book that traced the permanence at the top of the -- of the ranks of a given company. A U.S. company in the top 20 percent in its industry 20 years ago -- I'm sorry, in 1980 -- had 1-in-10 chances of falling out of that tier in the next five years. So in 1980, you were a company, you were in the 20 percent of -- the top 20 percent of your industry. The probability that you would not be there five years hence was 20 percent. I'm sorry, was 10 percent. Twenty years later, that doubled and now has doubled again.
So the probability that a company at the top -- and, you know, not only the five companies that we know that are always at the top but, you know, just go to specific sectors. It is much more slippery at the top, and companies tend to be displaced by newcomers and by new competitors.
CEOs -- turnover among CEOs is booming. It -- you know, tenures -- CEOs' tenures in the 1990s was about 10, 15 years. Now, according to the statistics and the research, it's about five years. In Japan, which is a famous country for the stability and lifetime employment and, you know, once you get there there, you're never out, now they're firing CEOs like if they are Americans. (Laughter.) And the -- at the world level, there is a statistic -- in the 2,500 largest companies in the world -- had last year 14 -- the number is to be precise. The number is like this. Last year the number of CEOs that were fired -- they don't use that word, but in effect is that -- from the 2,500 largest companies in the world was 14 percent, which is larger than it had been.
So yes, the private sector is admired and Bill Gates is Britney Spears and Warren Buffett is a philosopher, but other than those examples, most CEOs stand a very -- a much higher chance of being fired. At the end of the financial crisis, there were a few bankers that came out on top. You know, a lot of banks went down and went under, and then there were a few bankers that were the masters of the universe, Jamie Dimon and Bob Diamond at Barclays and others. Well, Bob Diamond at Barclays is out of a job, and Jamie Dimon now is far more constrained because of all of the circumstances and scandals that surrounded JPMorgan Chase and others.
So is he not powerful? Of course he's -- continues to be extremely powerful. Is he more constrained than he was before? Yes, surely. And concerning the influence of Bill Gates and -- well, think about Andrew Carnegie. Think about J.P. Morgan. And when you compare their relative wealth adjusted for inflation, they were much wealthier than Bill Gates is now, or Warren Buffett. I think that statistic is right. I'm not sure about that, but I think it's right.
But in any way, you know, these were people -- J.P. Morgan and the others, you know, just got around a table and decided the fate of the United States. You cannot argue that that is happening now with the captains of industry in this country. They have to share the power, and they have to participate in a different kind of process.
And the third is about the media. Of course, the media continues to be a driving force. But just compare -- but again, I make the same example. The media as a category, yes. The media as individual entities, no. Compare the power of The New York Times or the Washington Post 10, 15, 20, 50 years ago to today. And compare -- if there is a sector that has seen its influence eroded by competition and by disruption in technology and ways of doing things, it's the media.
And I recognize the point about columnists, and I think you're right. But even there, that is picking a very small -- we -- our -- us, people like us, pay a lot of attention to columnists, and I think for good reasons, and good self-interested reasons, in my case and yours, and the stellar bloggers like Dan. But I don't know that columnists and column writing is the main force shaping attitudes in the world today. It is very important. I don't doubt it, and I hope it becomes more important, for all of our sake. But I don't know that that example is -- illustrates the broader trends in terms of political influence in society and societal change.
DREZNER: I want to open this up to the members, but I do want to give Fareed once chance --
NAIM: No, no, don't -- (laughter) -- it's not necessary -- (inaudible) -- (laughter) --
DREZNER: Power might be ending, but I am still the moderator here. (Laughter.) So I'm going to exercise just a little bit. And Fareed, you know, if you have one or two minutes worth of responses, then, and then I will go.
ZAKARIA: Sure. I think that this is really an illustration of the -- of the -- really a testament to Moises' book because he's getting at something very big, and it provokes you to think about it.
I would argue that part of what's going on here is twofold. One, you are judging the loss of power against a kind of unnatural high that took place, say, in the 1950s and '60s. The 20th century was the great centralizing century. It was a century of war, which empowered the state. It was a century of cartelization and monopolies, which empowered big businesses. It was even -- if you think of the technology of the 20th century, it was things like radio and television, which are sort of one to many, right? I -- that's why in a coup in Latin America, the first thing you do is you take control of the radio station, later the TV station.
Today, you know, you're moving off those highs, really in almost every field, right? The markets broke the back of the sort of central planning state.
The peace broke the back of the war state. Charles Tilly famously says, war made the state, and the state made war. And technologies are creating this many-to-many system, where, you know, if you had a coup today, what would be the point of getting ahold of the radio station? There are multiple -- you know, hundreds and thousands of ways to broadcast your message, to get your message out.
So when you compare these things against the backdrop of the 1950s and '60s, perhaps there does seem to be this diminution. But if you go back to before the -- you know, the 1920s or so, you see a world that actually seems very similar; and if you go back even further, a world in which the state had to compete for legitimacy, for resources -- you know, almost a medieval era in which there was this much greater disaggregation of power. You know, what you realize is historically maybe what we are witnessing is actually more the norm.
Now, it takes on very peculiar dimensions because of the world we're living in, and no one cycle is the same, but I do think that Moises is right that something over the last 20 years has created a new, you know, kind of a different kind of power.
And the point I was making about people like Bill Gates is actually that in all these fields, whether it's Tom Friedman or Bill Gates, it's that it's individuals who have figured out how to use power, not by manipulating a large institution, but by using their personal capital, talent, intelligence, network to do something. You know, that is, in a way, a new way to exercise power, and that Moises is himself a good example of it.
I would close just with one thought. The British Empire -- it's one of these thing you have to say because everything looks good in history, right? It all looks great, when you think about it. So the British Empire, if you look at the extraordinary monuments, the architecture of power that Fisher (sp) talks about, all of you have been to Delhi, know those unbelievable buildings that were built, right? These were built in -- completed in the late 1920s, early 1930s, and the idea was meant to be to convey that the British empire, like Rome, was here forever. Seventeen years later, because of one man, who was, you know, as Churchill called him, a half-naked fakir, Mohandas Gandhi, the British Empire had left, all those buildings were handed over to the Indians; so, so much for the great and eternal British Empire. (Laughter.)
DREZNER: With that, I am happy to go to the membership. Please raise your hands and wait for the microphone to come so everyone else can hear. I will go with former CFR presidents first, so --
QUESTIONER: Winston Lord, International Rescue Committee. I'd welcome comments from both of you. Does your thesis -- particularly your third M, mentality -- mean good news for democracy and human rights?
NAIM: Yes. And there is evidence about that. The World Values Survey, which has been tracking attitudes or opinions -- and behavior, in some cases -- there are other studies that also track behavior -- shows that in the last 20, 30 years, there is a huge movement in terms of more support for democracy, individual freedoms, gender equality. All the sorts of things that are associated with that category are moving in that direction.
ZAKARIA: That's Moises' book; let him take --
ZAKARIA: I've nothing to say.
DREZNER: Speaking of gender equality, the woman in the glasses right there.
QUESTIONER: Hilda Ochoa, Strategic Investment Group. I'm finding myself agreeing with the three of you, which is seldom the case.
DREZNER: Well, we're very smart. (Laughter.)
QUESTIONER: Yes. I think -- I think we agree with that.
I actually agreed with Fareed that the human experience is one of cycles and repetitiveness within different environments. I agree with Professor Drezner that the exercise of power always comes under the veil of authority, less so of responsibility, unfortunately. And I agree with Moises that, yes, that power is eroded by competitiveness in the world, and we are in an era of competitiveness.
The one paradigm that has really shifted in the world as we know it now is life expectancy. Never before in the world had people lived as long. And that increase in the life horizon of people has a huge impact on what we economists call the risk premium; meaning, how much risk are we willing to take and for what price at any one point in time?
So I would agree -- I definitely agree with Moises that people are willing to take more risk to challenge authority impulsively. And we're all very impulsive human beings. The neocortex tries to control that, but we respond to impulses of all kinds.
The fact is that today we can take a lot more risks for a lower price than was the case before, and that has made a huge impact on the extent to which people can exercise authority uncontested by competitiveness, because people will be daring to try.
So in that context, I do have a question, and it's the question of the brand. Sorry. It's the question of the brand, the power of the brand, because one of the surprising things to this day is how powerful brands are and what kind of a moat they build around you.
NAIM: In the book, there is a section about that, about brands, that essentially shows that 20 -- I won't remember the exact numbers, but two or three decades ago, the probability that a company would have an accident that would deeply manage -- deeply damage their reputation was something like 10 percent, and now it's 82 percent. So the probability that a company faces an accident that creates -- that erodes and hits and damages the brand is almost certain.
What your point, however, is is that -- and that -- there is a surprise there -- is how quickly recovers and how powerful brands -- some brands are very powerful, because they get hit, but they -- somehow they recover very quickly. We have seen that with Tiger Woods. We saw it with Toyota. We saw it with others that have had brand accidents.
DREZNER: You, sir. Yeah.
QUESTIONER: Thank you. George Schwab, National Committee on American Foreign Policy. To what extent is civil society able to encroach on the authority of the sovereign to decide on the question of war and peace?
NAIM: Well, we have seen very significant changes in that in terms of how now public opinion in democracies is having far more impact on the tolerance of the nation and the government for casualties. We have seen how, for example, the French hastily left Afghanistan recently after they suffered some casualties. We saw it with the Italians in Nasiriyah in Iraq. We saw it with the Spaniards. And we -- and, you know, in a much more complex and -- situation, we have seen it in the United States, the tolerance for casualties and that there is intersection with the media there. But certainly civil society, public opinion now weights in very significant ways in terms of the capacity of a democratic government to sustain a war. But I would welcome -- I think my two colleagues here know more about that than I do.
DREZNER: I'll push back a little bit. I mean, you could argue -- one of the arguments that was made about why the Iraq War was allowed to go as long as it was was because there wasn't a draft, because it was an all-volunteer force. Even though there was mounting opposition to the Iraq War --
NAIM: That's a good point.
DREZNER: -- there wasn't the same sort of true mass mobilization, because there weren't people scared that they were going to be sent to, you know, Fallujah, you know, if they got drafted.
NAIM: I think that's a very fair point.
DREZNER: Right here. I don't want to say the -- yes, yes. (Chuckles.)
QUESTIONER: Hi, my name is Elmira Bayrasli. I'm with the World Policy Institute. I'm just curious about the end of power. How are people -- are there people responding to it positively? Are there companies or countries or cities that are actually -- are adapting to this change in power?
NAIM: Well, it's sector-specific and country-specific. And I -- you know, one of the situations you can see is in government and politics. You can see all sorts of new groups appearing, which is both a very good thing and a very bad thing, because national politics, local politics are becoming more fragmented. But the reality is that throughout the world, the barriers to entry for political participation and for political activities are much lower, and people are taking advantage of that. And in many instances, that's very good news. In other instances, it's very bad news, because it's just creating a plethora of parties in which each one has enough power to veto the others and no one has power to govern.
DREZNER: Yeah, right there.
QUESTIONER: Hi, Vanessa Neumann and a compatriota of Dr. Naim's. Dr. Naim, two quick clarifications. One, you have said that what you -- your thesis is true for all organized human activity. What do you mean by "organized," especially when you're thinking about Facebook and Twitter and the Arab Spring and all of the hoopla that got?
And the other thing -- you talk about the changing of authority, and the underpinning legitimacy seems to be what you're implying. So legitimacy goes to whom, to the person who controls the narrative, shapes the narrative or what?
What is the new paradigm?
And I would like to respectfully disagree with Mr. Zakaria. Sorry, but how can you say that colonization has -- is now about winning hearts and minds when it wasn't, when nobody did that better than the Brits, really, right? The Brits were sort of join the club, God is an Englishman, and you'll play cricket forever after.
ZAKARIA: You were obviously never ruled by the British. (Laughter.)
QUESTIONER: No. That's right. (Chuckles.) That's right. We were ruled by Chavez instead.
ZAKARIA: I think here's the tipoff. When you'd -- when you'd go to an English club, as the Yacht Club in Bombay, which I would walk past many times, they still had a fraying sign that said, "Dogs and Indians not allowed." That was a metaphor for the British rule in India.
Courts, for example, were set up, independent British-style courts. There were just different courts for white people and different courts for Indians, and the rules of evidence and such were very different.
So as I say, it -- you know, there was a patina of those kinds of things, but there was the day-to-day reality that there was a caste system, and that tended to undermine some of the lofty rhetoric of liberalism. And this was one of the things that people like Gandhi and Nehru objected to very strongly.
NAIM: And what I referred to as organized human endeavors is institutions like labor unions and the church and political parties and governments, that sort of thing.
DREZNER: Just a quick follow-up, because one of the things she's talking about is networks, and I -- you know, do you think that networks are a new way in which people actually can exercise power? You know, one of the things about -- if you study networks, is that if you're a central node, you actually can exert tremendous influence. And I think one of the problems sometimes in international relations more generally is this assumption that when you say anything's a network, it implies you've drained power out of the equation, whereas there are instances in networks where in fact you can exercise tremendous power.
NAIM: Sure, and we have seen some of those, and al-Qaida is a good example.
And I make a big deal out of networks in the book, and I do spend time -- the only caution I have with networks is that that has become a term that is applied to everything, and there are networks that are absolutely -- they are networks but are absolutely relevant -- they sound and -- big and important and networked -- (chuckles) -- and then nothing happens.
We saw -- we saw that with the Occupy Wall Street movement. It was a very, very extended, imposing network that did nothing.
ZAKARIA: Dan, can you jump in here and talk a little bit about some of your research and particularly -- I mean, you've written a book that has the phrase "zombie" in the title. (Laughter.) Do you want to --
NAIM: And it's becoming -- back in fashion.
ZAKARIA: -- you know, do you want to explain? Because you actually have done some very interesting work on all the --
DREZNER: Well, I'm actually -- I mean, I'm working on a book now on global governance since 2008, and I'm making the very counterintuitive argument that actually the system worked pretty well post-2008, as -- particularly compared to the previous crisis we had, which would have been 1929. So this is actually -- I mean, this is a modest counter to your point, although you can argue that the reason it might have worked is that in fact no one actually had any power to alter the status quo, which thankfully was a status quo devoted in favor of an open global economy.
ZAKARIA: No, I would argue the single biggest reason why -- I mean, I think you're on to something very important --
ZAKARIA: -- the single biggest reason why we performed much better than 1929 was the concentrated power over national economies held by five people, the major central bankers.
DREZNER: That's true, yeah.
ZAKARIA: The power of modern central banks is just extraordinary. And the fact that at the end of the day, most people screwed up the economic policy, right, if you think in terms of what they should have done in the midst of a collapse in demand, but because you had the central banks so pushing on the accelerator --
ZAKARIA: -- it mitigated all --
DREZNER: Although it leads to the interesting question that because the monetary policy was actually so good, it allowed people to screw up their fiscal policy, and it leads to an interesting trade- off.
NAIM: So -- but compare the -- I agree with both of you that we saw a very good multilateral performance in the financial crisis, but then why is that not happening concerning climate change?
DREZNER: I -- my argument is, is because climate change is not a short-term problem, it's a medium- to long-term problem, and historically politicians really stink at dealing with those sorts of issues. It's not -- you know, why should they do something to solve a problem that will not actually manifest itself on their watch? And that's a truism of politics that's not unique to this century.
We should go back to the audience. The woman right here.
QUESTIONER: Kim Ghattas with the BBC. A question for all of you, actually. The end of power was a very stark happening in the Arab world, where we saw the end of power of dictators and the end of authority, as you described it. So it's the combination of both, the end of power and the end of authority. And I wonder whether you can expand a little bit on how you see the end of power play out in the Arab world and whether perhaps it leads to the empowerment of people who then, you know, have been feeling disenfranchized, and that's where the opportunity lies when it comes to the end of power, the end of absolute power concentrated in the hands of some.
DREZNER: Like how we all handed that off to each other? (Laughter.) I mean, I can give you an answer, but I'd -- you know --
NAIM: Very quickly, that is, for me, a very important example of transformations that have to do with far more -- deeper forces than the Internet. That has to do with expanding middle class that is not served by the governments.
It has to do with -- also, there is a recent study that just came out about climate change and the Arab Spring. You probably have heard about that. Essentially, the countries that were part of the Arab Spring are one -- some of the world's biggest consumers of wheat. And wheat -- and subsidized wheat, so it's almost an entitlement there. You know, you are entitled to cheap bread and cheap wheat products. And because of the changes in the cycles and the droughts and everything else in the five years prior, there was a decline, a strong decline in the -- in wheat production, in the harvest, that drove prices up and created an impact on that. And that was just one of the additional forces, together with the other forces at work there.
If you think about where it all started, in Tunisia, Tunisia is one of the most successful performers in North Africa in terms of economic growth and economic stability. It's one of the countries that had the most homogeneous populations in terms of ethnicity and race. It was -- you know, it was the most improbable place, of all of North Africa, where you would have expected this eruption of anti- government violence. And that is where it all started. And it had nothing to do with social media and the Internet. It had to do with very profound societal changes.
DREZNER: Just to be provocative, you could also argue, has much actually changed? I mean, you know --
QUESTIONER: It's a long process.
DREZNER: It's a long process, but in some ways, it reminds me now -- sort of the 1848 revolutions in Europe, which did have a brief flowering, and then suddenly all of these countries were essentially back to where they were within, you know, less than a year, which doesn't mean -- you're right, the long term, you might actually very well see change.
Right there in -- yeah.
QUESTIONER: I was just wondering --
DREZNER: Who are you?
QUESTIONER: Brian Lippey, Do Write Campaign. Just wondering what your thoughts are about the -- sort of the outliers, either outlier states such as Iran or Myanmar or North Korea that are built around either dynastic transfers of power or theocratic ones, and some of the nonstate actors, like al-Qaida, for example.
DREZNER: Or Dennis Rodman. (Laughter.) Go ahead.
QUESTIONER: That too.
ZAKARIA: You've written a book on this. You have to -- you -- the people are --
NAIM: But I would like to hear your opinions too, of course. (Laughter.) And the short answer is that I do believe that those are short-term -- that it's inevitable that places like Iran at some point will have to change the way they govern themselves. I think the same is going to happen in North Korea. I don't know when, but I think it's inevitable. I think China will democratize. And al-Qaida -- we already saw what's happening. I think al-Qaida has been diminished, of course, for a variety of reasons, in a very aggressive and effective campaign by the United States. But I do believe that those outliers -- it's just a matter of time before their power is eroded significantly. But I don't know that my colleagues agree.
DREZNER: Right here.
NAIM: I was trying to get you to say something.
DREZNER: You did fine. You -- (laughter) --
QUESTIONER: Hi. I'm Gary Rosen from The Wall Street Journal. I wonder if what we're looking at here is not the end of power but its dispersal, in this unprecedented way, to individuals. And we see in case after case that a state or a corporation or a media organization can't dismiss or ignore an individual the way it was once possible and that individuals, again, with widely varying capacities, are capable of moving the world in profound ways. And this can be from "Gangnam Style" and its being done by every kid on the planet to someone being mistreated by a local government in China being able to put their cause forward in a way that they haven't before and that power can still be exercised, but you have to be able to aggregate individuals. You have to be able to bring the people along with you in a way that was never necessary before.
NAIM: I think you're right. And I think Fareed also alluded to that, which is the shift to individuals and persons. I think it's right. My only -- the point I make in the book is that it is not enough, that there's more than that happening. Saying that power is dispersing and is moving from big institutions to the individuals and the individuals are now more empowered is true but is not enough. There is more going on. And that more is that it's not just going to individuals; it's going to new groups that are more capable of contesting and winning and -- over bigger, more established players.
And very often denial of victory is the central theme rather than the dominant presence that used to be the benchmark that -- you know, we can see with the pirates in the coast -- off the coast of Somalia. They are not -- you know, they are confronting the biggest armada, the most sophisticated, modern, advanced, technologically advanced fleet in history. And everyone is there, the Ukrainians and the Russians and the Chinese, and everybody is patrolling those waters to stop the -- these men in rickety boats with AK-47 from hijacking some of the biggest ships in the world. And they're not succeeding. You now, they're numbers are still there. So will these pirates defeat this big fleet? No. But they're denying -- the (word ?) there is denial of victory. And that is happening with the Taliban. You can say that that happened in some significant ways in a lot of the recent wars that we have seen.
DREZNER: I'm going to push back a little bit on that piracy thing because I actually -- there is evidence that, particularly in this last year, it actually has started to work. But the interesting -- this is -- you'll appreciate this, this buttresses your argument -- it's partially because of the multinational naval force. It's even more, though, because the private ships have finally decided, we have to put armed guards on those ships. And so as a result, it's sort of the exercise of private power against private power.
We have time for a few more questions. Yep.
QUESTIONER: (Off mic.) Following up on what you just said, isn't the restraints on power that are causing the pirates to continue -- 30, 40 years ago, could have gone in, bombed the hell out of them, and it would have been the end of it. But now the restraints on power are such that they're patrolling a huge shoreline, impossible to cover with even 20, 30, 40 destroyers.
ZAKARIA: I think that's self-evidently true. Ask yourself, could any nation do the kind of bombing that the United States did in Vietnam or in World War II now? It's inconceivable that you would -- that you would have that kind of -- and that would have been the solution in the past, I think, had you had the (firepower ?) -- we have cruise missiles. We have drones. We have -- if the pirates really were some -- you know, then I would apply this to drugs, I would apply this to immigration -- it is a sign of both the self- limiting aspect, the restraint -- which is partly one of the things you talk about, the shift in mentality that affects all this. And we could actually seal the -- people who say, you can't seal the border; that's not true. You could actually do something about drugs. You would be using extraordinary force and, you know, casualties would be absolutely extraordinary, but probably something that in the 18th or 19th century, people would have been quite comfortable with.
DREZNER: Can I ask you both a question, though, which is -- and I'm -- it's a dangerous metaphor, but I'm going to talk about rape statistics, which is that one of the observations is that as rapes -- you know, the reporting -- you know, you saw the incidences of rape going up; the debate was always, well, does this mean there are more rapes going on or simply that more people were reporting it? And so one of the things I kind of wonder is whether the sort of, you know, signs of power not working now, is that evidence that power is actually weakening, or is it simply that we can observe the failure of power now in a way that we couldn't even 50 years ago?
NAIM: My opinion, of course, would be that no, that it's not just a matter of observing more and having better information, and in my opinion -- well, the whole book is about that is happening.
ZAKARIA: It's a very interesting question. I think it -- clearly, whatever the answer is, and I don't know what it is, this fundamental point that Gary (sp) was alluding to which Moises writes about in the book -- the -- you know, this is Tocqueville's old point: The rising tide of democratization -- and I would call it individualization -- is clearly the sort of dominant theme of the last 40 or 50 years and how that affects everything so that even when you do exercise power, you have to take into account that reality and be aware that some guy with -- you know, today with a cellphone might be taking a video of something and that you -- and so the people who are most able to expertly deploy power are those who understand that world and can use it. I still tend to believe that those people have extraordinary power and -- you know, in their -- at their -- at their fingertips, and certainly some elements of government have those powers. But Moises is onto something very real when he talks about this shift and transformation.
DREZNER: With that, I apologize; I committed the unpardonable sin as the moderator of asking the last question, but I'm afraid we've run out of time. But if you can join me in thanking both Fareed and Moises for doing this. (Applause.)
NAIM: Thank you, Fareed. Thank you very much.
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