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  • I'm going to talk to you

  • about power in this 21st century.

  • And basically, what I'd like to tell you

  • is that power is changing,

  • and there are two types of changes

  • I want to discuss.

  • One is power transition,

  • which is change of power amongst states.

  • And there the simple version of the message

  • is it's moving from West to East.

  • The other is power diffusion,

  • the way power is moving

  • from all states West or East

  • to non-state actors.

  • Those two things

  • are the huge shifts of power

  • in our century.

  • And I want to tell you about them each separately

  • and then how they interact

  • and why, in the end, there may be some good news.

  • When we talk about power transition,

  • we often talk about the rise of Asia.

  • It really should be called

  • the recovery or return of Asia.

  • If we looked at the world

  • in 1800,

  • you'd find that more than half of the world's people

  • lived in Asia

  • and they made more than half the world's product.

  • Now fast forward to 1900:

  • half the world's people -- more than half -- still live in Asia,

  • but they're now making

  • only a fifth of the world's product.

  • What happened? The Industrial Revolution,

  • which meant that all of a sudden,

  • Europe and America

  • became the dominant center of the world.

  • What we're going to see in the 21st century

  • is Asia gradually returning

  • to being more than half of the world's population

  • and more than half of the world's product.

  • That's important and it's an important shift.

  • But let me tell you a little bit about

  • the other shift that I'm talking about,

  • which is power diffusion.

  • To understand power diffusion

  • put this in your mind:

  • computing and communications costs

  • have fallen a thousandfold

  • between 1970

  • and the beginning of this century.

  • Now that's a big abstract number.

  • But to make it more real,

  • if the price of an automobile

  • had fallen as rapidly

  • as the price of computing power,

  • you could buy a car today

  • for five dollars.

  • Now when the price of any technology

  • declines that dramatically,

  • the barriers to entry go down.

  • Anybody can play in the game.

  • So in 1970,

  • if you wanted to communicate

  • from Oxford to Johannesburg

  • to New Delhi

  • to Brasilia

  • and anywhere simultaneously,

  • you could do it.

  • The technology was there.

  • But to be able to do it,

  • you had to be very rich --

  • a government, a multinational corporation,

  • maybe the Catholic Church --

  • but you had to be pretty wealthy.

  • Now, anybody has that capacity,

  • which previously was restricted by price

  • just to a few actors.

  • If they have the price of entry into an Internet cafe --

  • the last time I looked, it was something like a pound an hour --

  • and if you have Skype, it's free.

  • So capabilities

  • that were once restricted

  • are now available to everyone.

  • And what that means

  • is not that the age of the State is over.

  • The State still matters.

  • But the stage is crowded.

  • The State's not alone. There are many, many actors.

  • Some of that's good:

  • Oxfam,

  • a great non-governmental actor.

  • Some of it's bad:

  • Al Qaeda, another non-governmental actor.

  • But think of what it does

  • to how we think in traditional terms and concepts.

  • We think in terms of war

  • and interstate war.

  • And you can think back to 1941

  • when the government of Japan

  • attacked the United States at Pearl Harbor.

  • It's worth noticing

  • that a non-state actor

  • attacking the United States in 2001

  • killed more Americans

  • than the government of Japan did in 1941.

  • You might think of that

  • as the privatization of war.

  • So we're seeing a great change

  • in terms of diffusion of power.

  • Now the problem is

  • that we're not thinking about it in very innovative ways.

  • So let me step back

  • and ask: what's power?

  • Power is simple the ability

  • to affect others

  • to get the outcomes you want,

  • and you can do it in three ways.

  • You can do it with threats

  • of coercion, "sticks,"

  • you can do it with payments,

  • "carrots,"

  • or you can do it by getting others

  • to want what you want.

  • And that ability to get others to want what you want,

  • to get the outcomes you want

  • without coercion or payment,

  • is what I call soft power.

  • And that soft power has been much neglected

  • and much misunderstood,

  • and yet it's tremendously important.

  • Indeed, if you can learn

  • to use more soft power,

  • you can save a lot

  • on carrots and sticks.

  • Traditionally, the way people thought about power

  • was primarily in terms of military power.

  • For example, the great Oxford historian

  • who taught here at this university, A.J.P. Taylor,

  • defined a great power

  • as a country able to prevail in war.

  • But we need a new narrative

  • if we're to understand power in the 21st century.

  • It's not just prevailing at war,

  • though war still persists.

  • It's not whose army wins;

  • it's also whose story wins.

  • And we have to think much more in terms of narratives

  • and whose narrative is going to be effective.

  • Now let me go back

  • to the question

  • of power transition

  • between states

  • and what's happening there.

  • the narratives that we use now

  • tend to be the rise and fall

  • of the great powers.

  • And the current narrative is all about

  • the rise of China

  • and the decline of the United States.

  • Indeed, with the 2008 financial crisis,

  • many people said this was

  • the beginning of the end of American power.

  • The tectonic plates

  • of world politics were shifting.

  • And president Medvedev of Russia, for example,

  • pronounced in 2008

  • this was the beginning of the end

  • of United States power.

  • But in fact,

  • this metaphor of decline

  • is often very misleading.

  • If you look at history, in recent history,

  • you'll see the cycles of belief

  • in American decline

  • come and go every 10 or 15 years or so.

  • In 1958,

  • after the Soviets put up Sputnik,

  • it was "That's the end of America."

  • In 1973, with the oil embargo

  • and the closing of the gold window,

  • that was the end of America.

  • In the 1980s,

  • as America went through a transition in the Reagan period,

  • between the rust belt economy of the midwest

  • to the Silicon Valley economy of California,

  • that was the end of America.

  • But in fact, what we've seen

  • is none of those were true.

  • Indeed, people were over-enthusiastic

  • in the early 2000s,

  • thinking America could do anything,

  • which led us into some disastrous

  • foreign policy adventures,

  • and now we're back to decline again.

  • The moral of this story

  • is all these narratives about rise and fall and decline

  • tell us a lot more about psychology

  • than they do about reality.

  • If we try to focus on the reality,

  • then what we need to focus on

  • is what's really happening

  • in terms of China and the United States.

  • Goldman Sachs has projected

  • that China, the Chinese economy,

  • will surpass that of the U.S.

  • by 2027.

  • So we've got, what,

  • 17 more years to go or so

  • before China's bigger.

  • Now someday,

  • with a billion point three people getting richer,

  • they are going to be bigger than the United States.

  • But be very careful about these projections

  • such as the Goldman Sachs projection

  • as though that gives you an accurate picture

  • of power transition in this century.

  • Let me mention three reasons why it's too simple.

  • First of all, it's a linear projection.

  • You know, everything says,

  • here's the growth rate of China, here's the growth rate of the U.S.,

  • here it goes -- straight line.

  • History is not linear.

  • There are often bumps along the road, accidents along the way.

  • The second thing is

  • that the Chinese economy

  • passes the U.S. economy in, let's say, 2030,

  • which it may it,

  • that will be a measure of total economic size,

  • but not of per capita income --

  • won't tell you about the composition of the economy.

  • China still has large areas

  • of underdevelopment

  • and per capita income is a better measure

  • of the sophistication of the economy.

  • And that the Chinese won't catch up or pass the Americans

  • until somewhere in the latter part,

  • after 2050, of this century.

  • The other point that's worth noticing

  • is how one-dimensional

  • this projection is.

  • You know, it looks at economic power

  • measured by GDP.

  • Doesn't tell you much about military power,

  • doesn't tell you very much about soft power.

  • It's all very one-dimensional.

  • And also, when we think about the rise of Asia,

  • or return of Asia

  • as I called it a little bit earlier,

  • it's worth remembering Asia's not one thing.

  • If you're sitting in Japan,

  • or in New Delhi,

  • or in Hanoi,

  • your view of the rise of China

  • is a little different than if you're sitting in Beijing.

  • Indeed, one of the advantages

  • that the Americans will have

  • in terms of power in Asia

  • is all those countries

  • want an American insurance policy

  • against the rise of China.

  • It's as though Mexico and Canada

  • were hostile neighbors to the United States,

  • which they're not.

  • So these simple projections

  • of the Goldman Sachs type