China’s Stock Market Collapse Explained

China’s 25-year-long evolving experiment
with capitalism has seen its per-person wealth grow by more than 2,000% since 1990. But this
summer, the frankenstein-like, hybrid economy that is China’s system turned on its creator,
forcing the government to take unprecedented action to prevent its collapse. Although the
current system of the world’s most populous country hangs in the balance, it’s nothing
new for modern China, which is used to forging ahead into the great unknown. This is an explanation of how it reached its
current tipping point. China’s economy boomed the fastest in the 2000’s when nationwide
GDP jumped by an average of more than 10 percent per year. As the rulers of the country, the Communist
Party saw its power cemented by this staggering pace. But just as fast as it took off, growth
has slowed. First, with the global recession of 2008 and, after a brief recovery, again
sliding steadily since 2010. In 2015, China’s growth may dip below 7%, which would be a
fantastic rate for a highly developed country like the U.S., but for China, it’s a huge
disappointment, and could spell big trouble for a Communist Party that needs to keep the
country’s economy on the development fast-track. After-all, China’s President Xi Jinping
has promised his people a “Chinese dream,” of increasing wealth, well being, and power. In the last couple years, in an attempt to
stimulate growth, Xi’s government relaxed restrictions on its domestic stock market,
opening it to many of its citizens for the first time. As the working class suddenly
gained the ability to use their savings to try and accumulate wealth much more quickly
than they were used to, the market was flooded with new accounts. There are now more than 90 million stock traders
in China, with nearly half joining in just the last year alone. This, and the elimination
of other regulations, caused an alarming surge in the percentage of Chinese stocks purchased
with borrowed money. And with a mind blowing 67% percent of investors
holding less than a high school education, there simply are not enough qualified analysts
able to correctly judge the strengths and weaknesses of companies listed on the exchange.
This tsunami of new, unchecked market activity caused two extremely dangerous things to happen:
The formation of a massive bubble, which sent the value of Chinese companies to highly inflated
levels. And, In the feverish competition to attract investors,
banks and other fund managers promised astronomical profits that were completely unrealistic.
The Chinese stock market has become a casino, with trades seen as bets, instead of what
they actually are: shares of ownership in a business. But what truly compounded this dangerous situation
was the Chinese government’s decision to use state-run media to cheerlead investment
in the surging market. It’s optimism grew so blind that the Communist Party began cleaning
up its own balance sheets by selling off state-owned, junk assets at drastically overvalued prices
back to its own people, who were ignorant of the actual risks of these investments. This kind of free-for-all, every-man-for-himself
approach caused the market to soar even higher, more than doubling in one year, and becoming
the second-most valuable market in the world. But storm-clouds were on the horizon, visible
to anyone capable of, and willing to, see the big picture. And in late June, that storm
came onshore. In a matter of days, the Shanghai index plunged from a high of 5,100 all the
way down to 3,700. More than $3 trillion was wiped out, and the nation was in shock. The government immediately hit the panic button,
banning company executives and any investor holding more than 5% of a company from selling
any shares; they enacted the nuclear option, suspending trading completely in companies
that together totaled more than 40% of the whole market; and they’ve been pumping hundreds
of billions of dollars back into the market in a desperate attempt to stop the free-fall. When the dust finally settles and the sell-off
is over, investor confidence will be so eroded, that the Chinese market could slide all the
way back to where it was before the boom began. If this happens, overall economic growth in
China would likely stay well below 7% for the foreseeable future. All of this lost credibility may not cause
the Communist Party’s immediate downfall, but the Party will have a significantly more
difficult time now convincing the Chinese people that it knows how to best guide them
to their economic dreamworld. Thanks for watching, like this video if you
enjoyed it and found it educational. For the daily conversation, I’m Bryce Plank. This
video was edited by Brendan Plank.

Anti-Capitalist Chronicles: Rate and Mass of Growth

This is David Harvey, and you’re listening
to the Anti-Capitalist Chronicles: a podcast that looks at capitalism through a Marxist
lens. This podcast is made possible by Democracy
At Work. The first time I taught Marx’s Capital was
back around 1970, and I taught it every year after that for many many years, but I haven’t
taught it for about the last five/six years. This year I’m back doing Volume I again, and
it’s always interesting to come back to that text because the circumstances in which I
was teaching it in 1970 are very different from the circumstances of 2019. For example, the last time, the last class
was really beginning on looking at the long chapter in Capital about machinery and modern
industry. And in it, Marx comments on how capital, for
many years, struggled to develop a technology, which was appropriate to its own development
on the basis of late feudal technologies, and particularl labor skills and organization
of cooperation and the like. And the preceding chapter talks about the
manufacturing system, which was in place from about 1650 onwards, up until the Industrial
Revolution that led to the creation of the factory system. So when I was teaching in 1970, we all went
through the manufacturing materials as if: “Well, that’s historical. Let’s get to the real stuff,” which is stuff
about the factory system, and then you get this fantastic account that Marx makes of
what happened with factory labor and how the factory system spread; and how the factory
system was not just one machine, it was about a system of machines: machines producing machines,
machine technology everywhere, generic forms of technology, like the steam engine, that
could be applied in all sorts of different areas. So Marx has this wonderful chapter about this
with a lot of materials, of course, called from the factory inspectors reports about
conditions of labor, which were accompanying the spread of this factory system, so it seemed
like the factory system was what was truly relevant. But this time through I was thinking to myself,
“a lot of young people these days probably wouldn’t know very much about what a factory
looks like– they probably wouldn’t know a factory laborer. They wouldn’t know a unionized factory laborer,”
which in the 1970’s most households would have had some contact with that sort of world
and some understanding of it. So in our part of the world, the factory system
has disappeared, and then you ask the question, “what has replaced it?” And what intrigued me this time was that a
lot of the things that were being said in the chapter on manufacturing actually resonated
as being rather similar to some of the things we are now looking at: precarious labor; the
cost of shifting of skills; the attempt by those who command skills to monopolize them
and to use them in some way to try to isolate for themselves a privileged position in a
workforce; a battle against that by capital, which tries always to proletarianize them
so that the monopoly skill disappears. So in this regard, I was thinking, “How strange?”
because there is an element in Marxist thinking which is teleological– that is, that it seems
to be postulated on the idea that there is a trajectory, and that trajectory is unfolding
inexorably, and we’re moving towards some point. So if you said, “Well, actually things are
moving backwards” then this would be very odd from a Marxist perspective. But I always had some problems with the way
in which Marx sets up that teleological angle. He’s not deeply committed to it, but it crops
up again and again in little ways because even in his time, it was pretty clear that
there were many aspects of society where the labor process was not of the factory sort;
that non-factory labor organization was often the basis for a factory-form of organization,
and that this even continued into what we would consider the “Fordist Period” of a factory
labor. For instance, the Japanese automobile industry:
very large corporations and factory labor at one level, but on the other hand, when
you looked at the supply of all the parts to the auto industry, it was all being done
in small workshops with skilled labor and the like. So I’d always thought that maybe Marx is not
quite right in suggesting that factory system would drive out these other forms of labor. And this was also the case when I started
to look at labor processes in Second Empire Paris. And instead of seeing the large factories
coming in (there were, of course, some that did come in), what you saw was a proliferation,
an increase in specific divisions of labor. For instance, around 1850, Paris had a sort
of significant artificial flower industry making artificial roses and artificial flowers
of all kinds, and by the time you get to about 1855, they’ve started to specialize in particular
flowers. So here you would find artificial roses, and
another place you would find artificial daisies, and another place you find other artificial
flowers. By the time we get to the 1860’s, you find,
actually, some of the workshop are specializing in petal production, some of them are specializing
in the flower production, some of them are specializing in the leaves. So, in fact, in Second Empire Paris, you don’t
see a move towards factory labor, but you see an increasing dispersal of the division
of labor across these many small enterprises, which were sort of becoming more decentralized
rather than centralized. So the industrial form has always been something
which is in motion, and capital is always, in a way, acted to say, “Well, OK; there are
different kinds of labor processes and different forms of organization. I’m going to go for the form which is most
appropriate and most amenable to the particular style of exploitation in which I am engaged.” And one of the reasons why you get this decentralization
of labor processes in the neoliberal period is because workers in the factories were organized
and unionized. And in order to avoid that, capital thought
they’d go to an alternative labor process, which could not be so easily organized. So all of this is going through my mind when
I’m teaching these two chapters on the machinery system and the factory system. And thinking about how capital moves from
kind of one structure of exploitation to another, and that if labor becomes very strongly empowered
(as it had in the 18th century) through the monopolization of certain skills, then capital
would try to break that power, and one of the ways to break it was through the factory
system, which, in effect, devalued labor power and de-skilled labor power. But by the time you get to 1970, exactly the
opposite problem was there. Labor was employed in the large factories
and was well-organized and was exercised in considerable power vis-a-vis capital. So the best in capital could do is to go for
another labor system that was decentralized, which couldn’t challenge capital in the same
way. And so what we’ve seen is a lot of dispersal
of industrial activity: horizontal forms of organization rather than hierarchical forms
of organization. And incidentally, I find it very interesting
that that is the predominant move that capital made, but it also turns out that this is the
dominant move that has occurred in Left organizing. The Left organizing wants to be decentralized,
and it wants to be horizontal, not hierarchical; and the way that, say, the “Fordist Labor
Process” was regulated through labor. Now, all of that points to a very interesting
way in which when you read Capital, ideas come to you about what’s going on; questions
get posed, and these questions are rather critical to look at today. And again, I’m going to use a little example
from a reading of Marx to illustrate this point. There’s an interesting feature of any economic
system. By and large, economists and policy makers
and politicians and financial press and the like are very concerned about the rate of
growth. And the rate of growth then becomes absolutely
critical for policymaking. But there’s another aspect to growth which
I think is significant and important but which is largely neglected, and that is the mass
of the growth that exists; how much growth has there been, and what are we going to do
with the mass that is produced? Now, this came up to me the other day because
I was reading my favorite financial journal, which is the Financial Times, and it reported
on a discussion of the Bank of England’s study of whether quantitative easing had contributed
to inequality. And this is something which I probably mentioned
before, but it was a very interesting study because what it showed was that, on average,
the bottom 10% of the population in Britain received about [..] £3,000 in aggregate over
the period 2007 to about 2010, whereas the very rich (the top 1%) received £325,000
over that period. Now, when you look at that, you would immediately
say (as I would say), “Well this shows how quantitative easing benefited the wealthy
[more] than it did the poor.” And, actually, this was a widespread claim,
and I even was surprised to find that the British Prime Minister Theresa May complained
that this was what had happened. The report, however, said: “No, that’s not
the case”. That when you look at the rate of change,
the £3,000 that the bottom 10% received was a greater proportionate increase than the
£325,000 pounds of the very rich which means that actually quantitative easing benefited
the poor more than it benefited the rich. And then the report went on to say, “You see? People […] don’t understand […] properly
how to read these things in a way which really tells us what is actually happening.” Now, my point here is that £3000 over six
years it’s less than £1 a week for the very poor. Now, that doesn’t exactly increase anybody’s
economic and political power, and it doesn’t do them much good. I mean, it’s a fairly trivial amount, actually. So even though it was proportionately greater,
the quantity was largely irrelevant to their lives, whereas for the top 10%, £325,000
is quite relevant, although they will probably (given the amount of money they’ve already
got stashed away) also consider it rather trivial, but it seems to me this a significant
contribution to the mass of the wealth that they control and the mass of the wealth that
they can use for political, economic, and other purposes to sustain their power. Now, what this means is that, in effect, a
low rate can produce a very large mass if there’s enough of it. In other words, put it this way: would you
rather have a 10% rate of return on $100 or a 5% rate of return on $10M? Now, clearly the 5% rate of return on $10M
is gonna outweigh, immensely, the rate. So we should be thinking more seriously about
the mass as a way in which inequality can be developed at the same time as it can appear
as if inequality is being reduced. Now, there are some areas in which this sort
of question becomes significant. For example, outside of the normal channels,
take something like the issue of global warming. While it’s clearly important that we intervene
in the rate of increase of carbon emissions, (and that is a very important political question)
there is another political question, which is, “What do we do about the mass of concentration
of greenhouse gases currently already in the atmosphere?” That, it seems to me, is the immediate severe
problem that we should be looking at and that looking simply at the rate of increase is
not going to help you with that. So there are situations in which the mass
becomes very much more significant. Now, I mention all of this because when you
go to the financial press and all the rest of it, you find very little discussion of
the mass and the quantity and the consequences of the mass. And interestingly, amongst Marxist economists
there’s also a fetishization of the rate and very little consideration in any detail of
the mass, and this comes out very much with a famous discussion that Marx had about the
falling rate of profit. Now, this is something that is proposed in
Volume III of Capital. It was something that became a very important
statement that really framed a lot of Marxist thinking about crisis formation, which is
that there is a tendency of the rate of profit to fall; that that tendency is actually embedded
within the capitalist dynamic because it’s about the application of labour saving innovations
in the labour process; and that application comes out of competition between individual
capitalist firms for what Marx called “relative surplus-value”– which really means a firm
with a superior technology is always in a position to sell at the social average while
it’s producing below the social average and, therefore, get an excess profit. And the competition for that excess profit
drives technological innovation. If I have a superior technology, I get the
extra profit, and you don’t. So what you do is you innovate, and trump
my superior technology by getting a super superior technology of your own, and then
I have to catch up to you. So part of the dynamism of capital is this
competition for a technological advantage, but the competition for technological advantage
is constantly economizing on labor and raising the productivity of labour. And by raising the productivity of labour,
you are, of course, reducing the value which is absolutely an aggregate available. So in a sense, that competition per “relative
surplus-value” produces a class consequence, which is that there’s less value and surplus
value to go around, and there is, therefore, this tendency for the rate of profit to fall–
that was the argument that is being made. Now, this argument is laid out in Volume III
of Capital, and the Volume III of Capital most of us use is the one that Engles edited,
and Engles edited in a certain way. And it’s important to do to acknowledge the
tremendous work that Engles did but of course he couldn’t do that tremendous work without
shaping some things which may or may not have been consistent with Marx’s intent. And that problem comes up in the text in the
following way: Marx wrote about this problem of the falling rate of profit in one long
chapter, which is really a notebook, and it’s not even shaped as a chapter; it’s just a
sort of a continuous argument about how to understand this phenomenon that he’s focusing
on. What he does is to lay out the following profit
argument that I just put forth, and he’s very pleased with himself that he’s done it, and
then what he does is that he starts to say, “Well, this is a starting point for us to
look at some more very general questions.” Engles divided this chapter into three component
parts: the first is called “The Falling Rate of Profit”, second is “Countervailing Influences”,
and the third is “Contradictions in the Law”, and Engles made it seem as if the law was
the central thing and everything else was modifications of the law in practice. So you come out of it thinking “The law is
really what it’s about”, but actually, when you’re reading the notebooks, it appears that
Marx has something else to say, and I’m just going to read you some of the comments that
come from these these notebooks because they are really fascinating to follow. In effect, far from being a countervailing
force, the increasing mass that is involved here is in fact part of a joint product. Marx puts it this way: that within the capitalist
mode of production, […] he says, “Despite the enormous decline in the general
rate of profit, the number of workers employed by capital, i.e., the absolute mass of labour
set in motion by it, hence the absolute mass of the surplus labor absorbed, hence the mass
of surplus value it produces, hence the absolute magnitude or mass of the profit produced by
it; that mass can, therefore, grow and progressively so, despite the progressive fall in the rate
of profit. This not only can, but must be the case, of
the basis for the capitalist mode of production.” So, far from being a countervailing force
as Engles entitled, this outcome is a joint product. “The same laws,” says Marx, “produce both
a growing absolute mass of profit, which the social capital appropriates and a falling
rate of profit.” And now, this poses Marx with a problem: “How
then should we present this double-edged law…” So it’s not a law– it’s a double-edged law.
“…of a decline in the rate of profit coupled with a simultaneous increase in the absolute
mass of profit arising from the same causes?” This is like the top 1% getting a lot more
in the way of value. So how are we going to present this? “The same reasons”, he said, “that produce
an absolute decline in surplus value and, hence, profit bring about a growth in the
mass of the surplus labor, surplus value, and, therefore, profit produced and appropriated
by the social capital. How”, he says, “can this be explained? What is it dependent on? On what conditions are involved in this apparent
contradiction?” So what Marx, himself, is saying is that we
have here a very central contradiction: that the rate of profit may be falling but the
mass of profit may be rising, and under those conditions that then tells us something very
critical about the nature of a capitalist mode of production. And you could actually turn this to reverse. A couple of weeks back, was a little article
again in the Financial Times in which it said, “There’s been a falling rate of growth in
China over the last six months or so, and there’s a great deal of nervousness in financial
markets. This is absolutely going to cause some real
serious global problems.” So if you [asked] “What [is] a potential source
of instability in the global capitalist system right now?”, many people would say, “Well,
China is a potential source of serious recession, maybe even depression”, but it seems the Chinese
have not been terribly concerned about it. And so somebody who’d been in China was asking
people, “Why are you not concerned about this?”, and the answer came back was very easy. It was this: that actually right now what
the Chinese were concerned about was labour absorption. They wanted to create 10 million jobs a year–
10 million. And that’s of course a lot compared to 300,000
in this country. We’re talking a lot of jobs to be created
in any one year, but the Chinese could could actually generate 10 million jobs on a much
lower rate of growth than was possible back in 1990, when they had a very high rate of
growth around 12% or more, but it was still very hard out of 12% to generate 10 million
jobs, but with the aim of 10 million jobs right now they could go for a 6% rate of growth
and have no trouble, and they could get 10 million jobs. And so as far as they were concerned as policymakers
they got the number of jobs they wanted because they now had a sufficient base where a lower
rate of growth could produce the 10 million jobs they needed. So they were not bothered, and, therefore,
they were not taking action to change the growth rate because they didn’t need to give
them their policy objectives. And here, too, we see a situation in which
you would expect the larger the economy the lower the growth rate would have to be, but
it’s fascinating to see Trump going around saying, “We’ve got to have 4% growth!”, and
he swore when he was on his way into power that, “Yeah we’ll soon have 4% growth”. Of course, we have low growth rates, but we
haven’t seen a great deal of disruption, and that says something about the fact that some
of the things which are required and needed society are being supplied with only a very
modest rate of growth. A high rate of growth would pose another kind
of problem. For example, if you doubled the output of
automobiles because of the productivity in the automotive industry… you’re going to
have twice the number of automobiles on the street. And if you did that globally, what would that
do to global warming? So in other words, we really have to take
very seriously the question of the mass. We can take it in a positive way as in the
Chinese case of absorbing labor or in the negative way, which would be contributing
to global warming because even though the growth rate is low, the growth rate is low
on an automobile industry that’s very large and that growth rate applies to the automobile
industry; that means a vast number of new cars on the road, which increases the mass
of carbon emissions, which… the mass becomes worse and worse! So we ought to be really very concerned about
the relationship between rates and masses, which is not generally considered in the in
the literature. When it is, as in the Bank of England case,
it turns out that, by and large, working on rates instead of working on masses, it’s very
convenient for the upper classes; that there was a class bias (in the way in which economists
and all the rest of it are approaching the world) in which, well, we are concerned about
the rate, and you can have a higher rate, and will tell you you’re better off but in
terms of the mass, it’s one cup of coffee a week, whereas I’m gonna get a good vacation
in the Bahamas. So this is the world, it seems to me, that
we need to to be very aware of. Thank you for joining me today. You’ve been listening to David Harvey’s Anti-Capitalist
Chronicles: a Democracy At Work production. A special thank you to the wonderful Patreon
community for supporting this project.

Yasheng Huang: Does democracy stifle economic growth?

My topic is economic growth in China and India. And the question I want to explore with you is whether or not democracy has helped or has hindered economic growth. You may say this is not fair, because I’m selecting two countries to make a case against democracy. Actually, exactly the opposite is what I’m going to do. I’m going to use these two countries to make an economic argument for democracy, rather than against democracy. The first question there is why China has grown so much faster than India. Over the last 30 years, in terms of the GDP growth rates, China has grown at twice the rate of India. In the last five years, the two countries have begun to converge somewhat in economic growth. But over the last 30 years, China undoubtedly has done much better than India. One simple answer is China has Shanghai and India has Mumbai. Look at the skyline of Shanghai. This is the Pudong area. The picture on India is the Dharavi slum of Mumbai in India. The idea there behind these two pictures is that the Chinese government can act above rule of law. It can plan for the long-term benefits of the country and in the process, evict millions of people — that’s just a small technical issue. Whereas in India, you cannot do that, because you have to listen to the public. You’re being constrained by the public’s opinion. Even Prime Minister Manmohan Singh agrees with that view. In an interview printed in the financial press of India, He said that he wants to make Mumbai another Shanghai. This is an Oxford-trained economist steeped in humanistic values, and yet he agrees with the high-pressure tactics of Shanghai. So let me call it the Shanghai model of economic growth, that emphasizes the following features for promoting economic development: infrastructures, airports, highways, bridges, things like that. And you need a strong government to do that, because you cannot respect private property rights. You cannot be constrained by the public’s opinion. You need also state ownership, especially of land assets, in order to build and roll out infrastructures very quickly. The implication of that model is that democracy is a hindrance for economic growth, rather than a facilitator of economic growth. Here’s the key question. Just how important are infrastructures for economic growth? This is a key issue. If you believe that infrastructures are very important for economic growth, then you would argue a strong government is necessary to promote growth. If you believe that infrastructures are not as important as many people believe, then you will put less emphasis on strong government. So to illustrate that question, let me give you two countries. And for the sake of brevity, I’ll call one country Country 1 and the other country Country 2. Country 1 has a systematic advantage over Country 2 in infrastructures. Country 1 has more telephones, and Country 1 has a longer system of railways. So if I were to ask you, “Which is China and which is India, and which country has grown faster?” if you believe in the infrastructure view, then you will say, “Country 1 must be China. They must have done better, in terms of economic growth. And Country 2 is possibly India.” Actually the country with more telephones is the Soviet Union, and the data referred to 1989. After the country reported very impressive statistics on telephones, the country collapsed. That’s not too good. The picture there is Khrushchev. I know that in 1989 he no longer ruled the Soviet Union, but that’s the best picture that I can find. (Laughter) Telephones, infrastructures do not guarantee you economic growth. Country 2, that has fewer telephones, is China. Since 1989, the country has performed at a double-digit rate every year for the last 20 years. If you know nothing about China and the Soviet Union other than the fact about their telephones, you would have made a poor prediction about their economic growth in the next two decades. Country 1, that has a longer system of railways, is actually India. And Country 2 is China. This is a very little known fact about the two countries. Yes, today China has a huge infrastructure advantage over India. But for many years, until the late 1990s, China had an infrastructure disadvantage vis-a-vis India. In developing countries, the most common mode of transportation is the railways, and the British built a lot of railways in India. India is the smaller of the two countries, and yet it had a longer system of railways until the late 1990s. So clearly, infrastructure doesn’t explain why China did better before the late 1990s, as compared with India. In fact, if you look at the evidence worldwide, the evidence is more supportive of the view that the infrastructure are actually the result of economic growth. The economy grows, government accumulates more resources, and the government can invest in infrastructure — rather than infrastructure being a cause for economic growth. And this is clearly the story of the Chinese economic growth. Let me look at this question more directly. Is democracy bad for economic growth? Now let’s turn to two countries, Country A and Country B. Country A, in 1990, had about $300 per capita GDP as compared with Country B, which had $460 in per capita GDP. By 2008, Country A has surpassed Country B with $700 per capita GDP as compared with $650 per capita GDP. Both countries are in Asia. If I were to ask you, “Which are the two Asian countries? And which one is a democracy?” you may argue, “Well, maybe Country A is China and Country B is India.” In fact, Country A is democratic India, and Country B is Pakistan — the country that has a long period of military rule. And it’s very common that we compare India with China. That’s because the two countries have about the same population size. But the more natural comparison is actually between India and Pakistan. Those two countries are geographically similar. They have a complicated, but shared common history. By that comparison, democracy looks very, very good in terms of economic growth. So why do economists fall in love with authoritarian governments? One reason is the East Asian Model. In East Asia, we have had successful economic growth stories such as Korea, Taiwan, Hong Kong and Singapore. Some of these economies were ruled by authoritarian governments in the 60s and 70s and 1980s. The problem with that view is like asking all the winners of lotteries, “Have you won the lottery?” And they all tell you, “Yes, we have won the lottery.” And then you draw the conclusion the odds of winning the lottery are 100 percent. The reason is you never go and bother to ask the losers who also purchased lottery tickets and didn’t end up winning the prize. For each of these successful authoritarian governments in East Asia, there’s a matched failure. Korea succeeded, North Korea didn’t. Taiwan succeeded, China under Mao Zedong didn’t. Burma didn’t succeed. The Philippines didn’t succeed. If you look at the statistical evidence worldwide, there’s really no support for the idea that authoritarian governments hold a systematic edge over democracies in terms of economic growth. So the East Asian model has this massive selection bias — it is known as selecting on a dependent variable, something we always tell our students to avoid. So exactly why did China grow so much faster? I will take you to the Cultural Revolution, when China went mad, and compare that country’s performance with India under Indira Gandhi. The question there is: Which country did better, China or India? China was during the Cultural Revolution. It turns out even during the Cultural Revolution, China out-perfomed India in terms of GDP growth by an average of about 2.2 percent every year in terms of per capita GDP. So that’s when China was mad. The whole country went mad. It must mean that the country had something so advantageous to itself in terms of economic growth to overcome the negative effects of the Cultural Revolution. The advantage the country had was human capital — nothing else but human capital. This is the world development index indicator data in the early 1990s. And this is the earliest data that I can find. The adult literacy rate in China is 77 percent as compared with 48 percent in India. The contrast in literacy rates is especially sharp between Chinese women and Indian women. I haven’t told you about the definition of literacy. In China, the definition of literacy is the ability to read and write 1,500 Chinese characters. In India, the definition of literacy, operating definition of literacy, is the ability, the grand ability, to write your own name in whatever language you happen to speak. The gap between the two countries in terms of literacy is much more substantial than the data here indicated. If you go to other sources of data such as Human Development Index, that data series, go back to the early 1970s, you see exactly the same contrast. China held a huge advantage in terms of human capital vis-a-vis India. Life expectancies: as early as 1965, China had a huge advantage in life expectancy. On average, as a Chinese in 1965, you lived 10 years more than an average Indian. So if you have a choice between being a Chinese and being an Indian, you would want to become a Chinese in order to live 10 years longer. If you made that decision in 1965, the down side of that is the next year we have the Cultural Revolution. So you have to always think carefully about these decisions. If you cannot chose your nationality, then you will want to become an Indian man. Because, as an Indian man, you have about two years of life expectancy advantage vis-a-vis Indian women. This is an extremely strange fact. It’s very rare among countries to have this kind of pattern. It shows the systematic discrimination and biases in the Indian society against women. The good news is, by 2006, India has closed the gap between men and women in terms of life expectancy. Today, Indian women have a sizable life expectancy edge over Indian men. So India is reverting to the normal. But India still has a lot of work to do in terms of gender equality. These are the two pictures taken of garment factories in Guangdong Province and garment factories in India. In China, it’s all women. 60 to 80 percent of the workforce in China is women in the coastal part of the country, whereas in India, it’s all men. Financial Times printed this picture of an Indian textile factory with the title, “India Poised to Overtake China in Textile.” By looking at these two pictures, I say no, it won’t overtake China for a while. If you look at other East Asian countries, women there play a hugely important role in terms of economic take-off — in terms of creating the manufacturing miracle associated with East Asia. India still has a long way to go to catch up with China. Then the issue is, what about the Chinese political system? You talk about human capital, you talk about education and public health. What about the political system? Isn’t it true that the one-party political system has facilitated economic growth in China? Actually, the answer is more nuanced and subtle than that. It depends on a distinction that you draw between statics of the political system and the dynamics of the political system. Statically, China is a one-party system, authoritarian — there’s no question about it. Dynamically, it has changed over time to become less authoritarian and more democratic. When you explain change — for example, economic growth; economic growth is about change — when you explain change, you use other things that have changed to explain change, rather than using the constant to explain change. Sometimes a fixed effect can explain change, but a fixed effect only explains changes in interaction with the things that change. In terms of the political changes, they have introduced village elections. They have increased the security of proprietors. And they have increased the security with long-term land leases. There are also financial reforms in rural China. There is also a rural entrepreneurial revolution in China. To me, the pace of political changes is too slow, too gradual. And my own view is the country is going to face some substantial challenges, because they have not moved further and faster on political reforms. But nevertheless, the system has moved in a more liberal direction, moved in a more democratic direction. You can apply exactly the same dynamic perspective on India. In fact, when India was growing at a Hindu rate of growth — about one percent, two percent a year — that was when India was least democratic. Indira Gandhi declared emergency rule in 1975. The Indian government owned and operated all the TV stations. A little-known fact about India in the 1990s is that the country not only has undertaken economic reforms, the country has also undertaken political reforms by introducing village self-rule, privatization of media and introducing freedom of information acts. So the dynamic perspective fits both with China and in India in terms of the direction. Why do many people believe that India is still a growth disaster? One reason is they are always comparing India with China. But China is a superstar in terms of economic growth. If you are a NBA player and you are always being compared to Michael Jordan, you’re going to look not so impressive. But that doesn’t mean that you’re a bad basketball player. Comparing with a superstar is the wrong benchmark. In fact, if you compare India with the average developing country, even before the more recent period of acceleration of Indian growth — now India is growing between eight and nine percent — even before this period, India was ranked fourth in terms of economic growth among emerging economies. This is a very impressive record indeed. Let’s think about the future: the dragon vis-a-vis the elephant. Which country has the growth momentum? China, I believe, still has some of the excellent raw fundamentals — mostly the social capital, the public health, the sense of egalitarianism that you don’t find in India. But I believe that India has the momentum. It has the improving fundamentals. The government has invested in basic education, has invested in basic health. I believe the government should do more, but nevertheless, the direction it is moving in is the right direction. India has the right institutional conditions for economic growth, whereas China is still struggling with political reforms. I believe that the political reforms are a must for China to maintain its growth. And it’s very important to have political reforms, to have widely shared benefits of economic growth. I don’t know whether that’s going to happen or not, but I’m an optimist. Hopefully, five years from now, I’m going to report to TEDGlobal that political reforms will happen in China. Thank you very much. (Applause)

Trading Against the Tide

>>Excellency , ladies and gent woman , this is one of the most unexpected sessions we
have and I do not want to pre-empt the
discussions. The reason I’m taking the
floor is to express some thanks first some
thanks 1st to you , secretary Ross , having come here at a very critical
moment , and I should also say and thank you for your
great friendship with the World Economic Forum
and personally since many, many years
and I also would like to thank
particularly the Minister of commerce
and industry and railways of India for the
cooperation we have established with
the government and after 35 years , usually it was a Confederation of
Indian industry World Economic Forum, but now we have the
two partners well established plus
very important , the government of India , and finally , I would also like to use the
opportunity to thank the President of the
Federation of Indian industries . I think a marriage that lasts for 35 years has become seldom in our world , but we could celebrate
the 35 years , and I think we will be
still able to celebrate the 50 years , the Golden Jubilee , in 15 years from now, so I leave it to you,
our most capable moderator. (Applause)>>Hello and welcome . For two countries seen
as natural strategic allies India and the
United States have recently been having a
torrid time in trying to resolve bilateral
trade disputes. The atmospherics and the
photo opportunity is fantastic but so far
that has not translated into surging trade between the world’s two
largest democracies. What is holding back
the US trade ties ? How can both benefit
from the churn in the dynamics of global trade? Will both countries ride
the trade wave as partners in arms or will Mitchell trust and suspicion mar what could
potentially be the greatest relationship
of the 21st-century? It makes the session at
the India economics Erik — summit so important
and reported and delighted to be joined by the
principal players in the joint trade ties between
our countries. — Mutual. I want to welcome one of
the sharpest economic voices in the Indian
government, the highly dynamic Indian Minister
of commerce and industry, the
blue-eyed boy . can we have a round
of applause for Prime Minister? Piyush Goyal . With us is the
principle of the US administration , tightening
the fields of private equity and
has restructured it as it is over 400 as it is over
$400 billion. — Assets. I’m delighted to welcome Wilbur L Ross. For a corporate
perspective on trade relations we are joined
by the founder and chairman of one of
the world’s largest telecommunication
companies who provides mobile and broadband
services to over 400 million people in Africa
and South Asia. Can we have a round
of applause for Rahul Kanwal ? To give us a macro view , we have the President
of the Confederation of Indian industry, and
the vice-chairman of Toyota . Last but not least,
for a view from the neighbourhood I would
like to introduce the first elected female
President of the Bangladesh Garment
Manufacturers and exporters Association of
fighting business leader who stormed a
male only club. She believes strongly
Bangladesh has arrived. Ladies and gentlemen,
welcome managing director of the (unknown
term) group. Piyush Goyal , let me start by asking
you the huge anticipation there was
in the buildup to (unknown term) and then-President Trump meeting with India’s prime minister that
there would at least be a limited trade deal that would be announced. Everyone is waiting
for that trading. What happened?>>Thank you, Prof, for
your kind words and a warm welcome to all the
honourable ministers, all the delegates from around
the world, our Indian participants
and I do hope the discussions during this
Forum will be a forerunner to much
more engagement between all of us. Thank you for your
opening remarks . Some of them were completely
unaligned with reality. (Laughter) Sum will make the
same mistake I did a few days ago and I was taken to task by the media for a recent gas , but this audience did
not know it . g affe. It could also be
something like a torrid love affair. I think the relations
between the Indian government and the United
States government at the leaders level,
at our level and at the people
to people level are better than
ever before . The leaders get along very
well personally , but also understand
each other and understand what
is good for the two countries, for the people of the
two countries and for the world as a whole. For both these countries, the oldest and largest
democracy in the world , I think trade is one aspect of a multi dimensional
relationship , but a very important aspect. Trade . it is not as if
you’re going and buying a hotel or sorting
a bankruptcy that secretary Ross
would have to do. Trade has to consider
the past, present , future, political dynamics,
local issues , long-term issues, bilateral and
multilateral commitments, so I think it is
a very complex story, and in that complexity
we are having an absolutely wonderful
engagement. The ministerial
level . all of us get along very well, we understand our
imperatives are mutual imperatives , America is a very
powerful, big economy, but also a very
sensitive country . India has an important
role to play in the geopolitics of
this region . It is the largest
democracy in the world, country which offers the full , important (inaudible) . at huge demand from people aspiring to
better quality of life and decisive leadership. All these elements are
important to address the destiny of the
world, and India is going to be an
important player in the world’s growth engine. Trade between the US
and India is robust. I heard you say you did
not find surging trade. I think imports from the
US to India are growing by nearly 30% and
exports from India to the US growing by
nearly 20% in the last year. If that is not surging
trade, I yet have to see something surging
better than that, but that is only the
forerunner of bigger and better things to happen. We are at a reasonable
trade level. Certainly our potential
has not been reached . Both (unknown term) , 70 Ross — secretary Ross . And the way our talks
are progressing I do not see any reason
why we cannot do that in the
years to come. You mentioned high
expectations in Houston and New York. For your information,
the first time I was able to meet and
further the talks and progress the
talks actively was only on the Monday following (inaudible), so I don’t
know where this speculation of an
announcement in Houston, some outcome or a
limited trade deal you would talk about, and on the Tuesday
it came out . To my mind, as concern
ministered — ministers, we also have
a responsibility to keep the media busy. We were keeping
our busy — ourselves busy in the best interests of
both countries>>We see the handshakes, the
back rubs and the Bonymaen , but we also see no trade deal. They were saying they
were willing to accommodate US interests. We don’t have a limited
trade deal let alone a free trade agreement. What are the key
roadblocks and how far are we from being able
to address those successfully?>>Thank you for
convening this group. It looks like a very apt
audience we have here and I hope we will not
disappoint you as to contend, but neither
government said there I think that was
just speculation. We think there is
no structural reason why there cannot be one pretty quickly. We each know the others issues, we have for a while. Pre-election, there were undoubtedly
some constraints on India to deal with
those matters. Now that the election has come and gone and the Prime Minister has a clear, strong position in the parliament,
it should be easier to take decisive action. There is also a lot of confusion . What is the US position about trade deficits? We feel our deficit is too high. We intend to both increase total trade and reduce our trade deficit. To us, there are
three components of trade deficit. One is what I would call inevitable components
for some countries. Namely if a country
does not have oil or natural gas of its own locale, it has to import it . It is not the fault
of the exporting country which one you have the
deficit with. That is not the kind
of trade deficit that particularly bothers us. Similarly, where there is a
true comparative advantage, there will
be trade deficit in some product
or another. We also view that as more or less a blameless trade deficit. It is the third kind , which are the ones that arise mainly
because of artificial barriers , protectionist barriers that countries have thrown up. That is the one we are concerned with and determined to reduce. We think we will make
progress there will stop . I wanted to clarify we have a focused effort
in terms of trade deficit reduction. We also believe that by focusing mainly bilaterally, we can achieve faster results for all countries
involved. We made a deal
with Canada and Mexico . A very complex and big trade deal. By far the biggest the United States
has ever made. That only took about
15 months to be negotiated. Trade deals often take it , 10, 12 years. They take so long
that the issues are not even the same at the end as they were at
the beginning. We made a deal
with Korea. We renegotiated that
trade agreement in a few months. We have a fairly
broad agreement with Japan that was also done within
a few months. For an administration that some parties think is somehow anti-trade or antitrade deals , look at the record. We have a better record on getting things
done under the Trump administration
than any other country, in terms
of big deals.>>You speak of the trade
deficit with India. I want to show
you a data set on the screen
in the corner. It compares the trade
deficit the United States has with India versus China. There is a growing sense
in India that the Trump administration is being
harsh and unfair by comparing us with
other developed countries. It is on the
screen now. You see how the trade deficit with China
keeps burgeoning, whereas the trade
deficit with India is fairly low. The point the Minister
made was important. It has come down
by $3 billion since President
Trump began. It is coming down,
whereas the trade deficit with China
is going up. Yet somehow, both
are being treated in the same way.>>We can add and
subtract two. We are aware of the differences between the trade deficits , as between the
two countries. That is not
a revelation. The trade deficit with China is the biggest
single one. If you look at
our aggregate trade deficit, there
are two major components. One is a product line that is called
automotive. The other is geographic,
that is called China. We must deal with
those two components in a very decisive way if we are going
to have meaningful overall reduction. That does not mean we should not
be dealing with unfair practices,
even if they result in smaller
trade deficits with other countries. In addition, we believe that
most of the things we are requesting, particularly of India,
which not only help the US . We think a lot of them would help India itself. India has a wonderful
opportunity right now to take advantage of trade dissension elsewhere. When I’m meeting
with Minister Goyal a bit later, we have prepared a chart of the areas where China is a big exporter and how that compares with what India
is exporting to us. What are the possible
solutions to changing that? I do not want
you to think we are just focusing on deficit. We are also focusing
on total trade . What the world needs is more total trade . This recent forecast that world trade will be down to 1.2% this year is a very bad omen. Normally global trade has been growing at a percentage point or so more than world GBP D P . If it is true it will
only grow at around 1% , that does not speak
well for world GDP. That is a separate
concern.>>The Trump administration is complaining about
unfair practices. India’s average data for larger
economies is amongst the highest in the world. They also complain
about how India regulation can change. This happened when Amazon complained about new e-commerce
policies. This is not the way
American companies can’t function. It is a good opportunity
between what is happening between China
and the United states for India to capitalise on, but they need
certainty in policy.>>I do not know
where you found the complaints about
unfair trade practices. I don’t think so. There are issues on
which we can have a difference of opinion. It is good to have an engagement to
discuss it. But to my mind,
India has been one of the most benign
countries in terms of opening up rapidly and inviting
international participation. There will all be
certain political imperatives which every country
will have to respect and every
company will have to protect. In that sense, there
will be issues we will continue to engage with. Everything cannot be
sorted out in a couple of meetings. These issues have
several dimensions. Particularly e-commerce, for example. After I became minister
of commerce, I had extensive discussions
with all the e-commerce companies. They are publicly
and collectively and individually
confirmed to me in the December guidelines . There has been no change in India’s stand as far as
e-commerce is concerned. I am happy to share with all of you here so
that there is clarity on this issue. India is very clear , considering our
domestic political compulsion , having about 120 to 130 million
people dependent on
small retail. It is about 50 to 60
million small retail shops throughout
the country providing employment and opportunities to 120 million people. Which means affecting the lives of nearly half
the population of the country. This small retail is a
very sensitive subject. My party which
is in government today, and most
of India, is clear that we cannot
let small retail die. Therefore, we
have restricted foreign direct
investment in the retail sector at 49%. E-commerce is expected to be an
agnostic platform. It is a trading platform . The platform which provides
opportunities to buyers and sellers in an agnostic fashion . It is not expected to become a platform for predatory pricing. It is not expected
to become a platform to use the muscle power
of large capital and low value
being available . And maybe offer
discounts which puts small retail
out of business. We are very clear
about it. If the loopholes that
were sought to be clarified in December , all the companies
have confirmed that they have
understood this. I have repeated this on
more than one occasion. Please do not go to smart chartered
accountants or lawyers who misguide you and help you stay within
the letter of the law . But often they do not
help you recognise the spirit of the law. I’m trying to explain
to everybody that the spirit
of Indian law is protecting small retail. Every country
in the world would like to protect
the livelihoods of their people. In that spirit,
we welcome all e-commerce companies
to India to work as an agnostic platform for trading. Do not become the
principal player directly or indirectly . Or through structured
formats . Do not look at structures
which can fall within the law
but in some sense break the spirit
of the law. That is the clear
position of the government and
will remain so. We have been clear
about it for decades , as far as the parties
concerned. The e-commerce companies have understood me clearly on this subject. We have had this
dialogue so many times. India is very clear. We do not change
rules midway . You mentioned something
about regulations ranging. I can point
out instances of worldwide regulations changing
much more often than India. We provide a very stable
and predictable regulatory system. Where there are
concerns, we try to have a dialogue. There will be occasions
where urgent measures are required,
which every country does. The US does it. If there is something
affecting US agriculture, they will
put an action to protect it. They will certainly
bring in regulation to stop that issue. In that spirit, we believe everybody has policy space. That has not affected
our discussions on negotiations. They are progressing
in the same spirit of understanding.>>Are the imperatives
of domestic politics now at loggerheads with
expectations of trade? For example, the government’s
efforts to ensure all medical devices
are well priced. America is not happy
about that because suppliers believe this
is unfair pricing. How to be reconcile the differences between what the government requires for
politics and what the Trump administration
is asking?>>We understand the
political sensitivity of the small details — retail people , also farmers and
other groups. In the US, conventional
retailers have had a hard time. But we have made
the policy decision it is more important to
get the most efficient form of retail commerce . Ultimately, that is probably
a combination of e-commerce and bricks and mortar commerce. It is a question of how rapidly things change. If 100 years from now , India still has as
many small retailers as now, it will
have held back the growth of the
country immensely. I think it is a question
of proportionality and timing and balancing. There is another factor. E-commerce tends to result
in lower cost of retail product to the consumer. Any country that
has relatively low consumer incomes, such as India,
that is the flipside . To the degree that there
is a structural issue which forces Indian
consumers to pay more . There is a penalty
being absorbed by the whole population, not just those employed
in retail. We think India needs to manage and will manage
the managing balancing act between
these competing activities. As was reported in the press yesterday, Amazon was spending one third of what it
did the year before in capex . It probably would have spent
more in India if it did not feel there
was a reduction in growth due to some
of those policies. There was also that cost to India. But at the end
of the day , the Indian government
has to decide how they will balance
those equations. We are making the
advocacy point of view . We will continue to do so. As the diplomats
say, we will have frank and mature
discussions. would be a trade deal
in five minutes. That was not us.>>Secretary Ross, predatory pricing will not be acceptable. If below the
manufacturing price, it does affect the
Indian retailer.>>That is what
negotiations are about.>>How do we reconcile this
in your view between what the Indian
government needs for its domestic constituency and
the excrement — the expectations in
the trade sector?>>This is better held in the conference room.>>The particular
leadership in every country are first
and foremost bound and beholden
to their own people and have to
take those positions respectively. Today we have in
the US President and the commerce
secretary to businessmen . Perhaps this has never
happened before. That is a good thing and
not so great thing for some countries because
they can see the mistakes made in the past where probably people
didn’t understand trade , and I would therefore direct secretary Ross’s
attention to China when in 2007 , whatever he touched
was made in China , and we were surprised
how the US has for a long period allowed a
manufacturing industry of that size and scale to
develop in China at the cost of decimating
the US trade base. This has been going on
for decades to the benefit of China. We could participate in the same process , but today we have
two business leaders in a critical part , their focus is on
China, taking it head-on, making amends
but it seems at the same time there may be
misdirection towards India. Look at India .
Facebook, Google, WhatsApp, Instagram, these are large companies today . Each is dominant
in India . So very large amount
of economic value to these economies and
your talking about hundreds of billions of
dollars of market capital (inaudible) rest in the
people of India hope in your business calculation
you will take note of that and when you fight
for those stents or Harley-Davidson’s or
other issues, they are much too immaterial for
the larger partnership the US and India
can enjoy. As the Prime
Minister said , the oldest and largest
democracies deserve a stronger strategic
partnership and I would urge when
you talk to the Indian political leadership this
is one country that has opened up absolutely and freely
for foreign investment in almost every sector. The duties are
mainly in line with the WTO duties, a place where
we welcome all foreign investment and governments have opened
up to fast without having reciprocity of taking some benefits
back from the other side. In closing I would
also say many are invested in the US. We have genuinely a very
warm welcome in the US for businesses. Your nation is rising. Dramatically, duties on good shape,
taxes are in good shape but you are also the
world power and you have some duties and of
— obligations, and we are nowhere
close to being a developing nation. We are an emerging market
in a developing nation and we need more
understanding from yourselves.. (Applause)>>I agree with
quite of the view of the points you made — a few. We do not blame China for the imbalance altogether . A lot of it, maybe
most of it , is due to incorrect
policies by prior American administrations, but the fact is we
are where we are and those policies are
no longer our policies, number one. Number two, our
issues with China are not just day-to-day trade . We have some very
serious structural issues with them
relating to technology transfer , relating to respect for
intellectual property , state-owned enterprise , and if we just focus on
trade we could have had a deal to .5 years ago, so it is a misconception
to say the issues are the same. They are not the same. There is a big,
complicated thing that requires structural
reform in China if we are to get to reasonable balance. The other thing . sure, there
is a trade-off , but Amazon and the other e-commerce
companies did not get to be
the world’s biggest by any evil mechanism. They got there because they are
extremely efficient , extremely effective
at what they do , and the question is for a country
like India, how do you balance those
economic benefit for your population
as a whole versus the let’s say special
interests of the retail segment or of domestic competitors? That is the balancing
act our discussions hopefully will
help define.>>Bangladesh has been
looking to leverage the rising trade
tensions between China and the United States by especially getting
a lot of the Apple manufacturers. Bangladesh has become
a source of envy in India and
even your ability to attract investment when it comes
to manufacturing . What is Bangladesh’s
secret sauce ?>>Bangladesh is
a development miracle, and economic
surprise and with our GDP growth,
we are growing . We are almost the
size of Wisconsin with a hundred and 65
million people down there, with many existential
challenges . The reforms and what is
happening in Bangladesh should be an example
for the world. We have been largely
overlooked. We have been growing
with America , and lately the US -China trade war
perception have s played an important
part but the latest 587 tariff
lines at the US imposed an extra
10% on 1 September, $25 million it involves
and out of the 12 million is from China
and the rest is from Bangladesh only,
4 million. We have now little more, India even less, so the country that has mostly
benefited is actually Vietnam, so Vietnam has
almost benefited up to 16.8% , so Bangladesh is hoping the businesses are really going to grow
but so far it has happened up to a
certain level. It is not galloping. It is just about .
I would not say flat but not up to
expectations. American imports . The top 30 products to China
exports the US , Bangladesh has an
overlap of around 16 products and in those
16 products, we are actually dipping,
but again , Vietnam is increasing
so there must be some magic in Vietnam . Unfortunately so. I think the trade
narrative also involves a lot around that Labour narrative . — Involves . Every time we say we are
the most sustainable and stable manufacturing hub of the world, we
go back to the same question of how labour
rights are doing in Bangladesh? There does not seem to be a substantial
shift there, whereas we have actually
done quite a lot , so we hope someday
pretty soon, we will be favourably looked upon
as we deserve , and we hope we will
see the light , and talking about India and Bangladesh at the same time , I think India, a fresh set of incentives
got declared , so manufacturers will get a 4% extra manufacturing incentive
and that will probably push growth from
India as well. I would like to say Bangladesh and India
can grow together. It need not be a competition. It could be
collaborative competition if we have trade connectivity and would support
we could grow faster . Maybe we can grow faster and appeal to the US to consider us as very collaborative and
competitive partners .>>All of us are delighted to see the way Bangladesh has grown and is . the spirit in which it has grown . Kudos to everyone in the
manufacturing sector in Bangladesh and the people
in government. President Trump is pushing
American companies to shift manufacturing
outside China. This is a once in a
generation opportunity for a fundamental
recasting of global supply chains. All of this is going to
countries like Vietnam and Bangladesh. Is there a concern that
India could miss out once again? What more would you like
to see the Indian government do?>>Let me take the
example of the automotive industry,
which is roughly 50% of manufacturing in India
and known the best. Luckily I think
over the last 20 years we have become
part of a global value and supply chain, and to a large extent
a lot about automotive components, exported , cars even exported, are competitive now . I think we are ready to
increase capacity more . We need the domestic
market increase as well as export. For us regional
cooperation is very important in the automotive
industry to be part of this global
supply chain. An example, one
of our products , sold all over the world
but components are made in various companies — countries in
Southeast Asia , this trade cooperation . We still do not
have very large economies of scale like in developed
countries so when we do these trade agreements,
we need some sunset clause. It need not be very long but it needs some sunset clause . not in all industries but some . That is the main issue . it is .7 , or 0.8 compared with
Southeast Asia. We are losing out
from factory in many areas and that
is where we need to focus a lot to get as competitive
on a global basis but Indian industry is ready
to take the challenge on being competitive. We are focused on
competition here and we would like to continue
to be focused on competition, not just for
government subsidies. She two>>Secretary Ross , (unknown term)
said to me the Trump administration
has a schizophrenic approach to relations
with India and one to work with India
on the strategic elements , but treats India
as a trade competitor. What the trouble
illustration once the benefit of the
strategic relationship while continuing
to treat India as an economic problem.>>I think we have shown we regard India as very important as a global partner. We believe we
make the best military products
in the whole world. That was a big thing and a deliberate thing. There is nothing more
sensitive than sharing your most advanced
military equipment with another country. I think that is very
much proof that we have great respect for India as a geopolitical
partner , as well as a
trading partner. I do think . people have mentioned
Vietnam a bit full stop Vietnam is a very good example
of a company that has picked out a couple
of specific segments and build big scale. Electronics . they got Korean
companies to invest. They built up skill and expertise . They are now extremely competitive . Footwear . same thing. They have done
a very good job. That is what I meant
before when I said I think part
of the thing that developing
countries should do is figure out which are
the particular segments where you can
do the best . Figure out what are
the impediments you have now. In the case of India, it
was mentioned logistics. Logistics are a
problem here. One of the things
China did much more rapidly
than India is deal with
transportation infrastructure. Logistics are a problem in India. They are a handicap. If you could solve the logistics and the scale issues, India could be much
more competitive. Those are things that do not hit US or anyone, but the
kinds of suggestions we are trying to make
to India as part of our discussion.>>You mentioned defence
and you say America is offering high-end
technology. Simultaneously, America
is threatening sanctions for purchasing a missile
defence system from Russia. Our foreign minister
said it is India’s sovereign right
to purchase weapons systems from whichever country
we want. And America’s
threatening sanctions for puncturing — purchasing from Russia.>>We understand India
has a historical relationship
with Russia. But there are issues of compatibility
with equipment. We are going through it
now with some of the NATO countries. It is a complicated
issue but one that needs to be sorted. Both from an American
and Indian point of view, there needs to be a more rational
approach.>>You mentioned that if policy and regulations do not change . But if you look at what
Amazon has invested in years gone by,
if there were actual continuity, companies and America would be
investing that much more. It sends a negative
impact .>>There was no policy
change midway . I will reiterate that. As far as Amazon is
concerned, to be several factors. They may have
over invested . I don’t know, I do
not run their business. It is up to them what
they decide to invest , where they see their
market going. Maybe now they recognise the cannot do some of
the things they were doing earlier. In the spirit of the
law that I have articulated. Though these investment
figures are from last year,
before I came in. But the important thing that may also
be looked at by the larger group and talked through
is the fact that while there may be
certain advantages of large retail
coming in and bringing down costs and to some extent a benefit to
some consumers , we have to also
recognise the fact that if the consumers are dependent on
livelihood from that small retail . If they do not have money in your pocket and they
do not have work, there will not be anything to
spend as consumers. We have to ensure that consumers continue
to have a basic income level and work
opportunities and income to spend . With India, it is one of the lowest inflation rates we have seen in the 72 years of independence. Our inflation in
the last five years has been lost
ever since 1947. We have come on from the
era of double-digit inflation and huge spikes
in inflation . In fact, it has
never crossed 4% in the last
five years. More often it
has been 2%, 2.5% , less than 2%. We have seen stability
in prices. We haven’t three words which
used to be a permanent feature of
India’s collections which did not have any
traction in 2019. One is corruption. Second is inflation. And the third is secularism. These used to be the hallmark of every
election in India. This election was one voted for on the back of
a corruption free administration . We are moving towards
making India the most honest nation
to do business. Second, we are looking to have
a more inclusive and united polity. Secularism was
not an issue in this election. Communities have left in — left in peace. Lastly, in terms
of inflation . In Hindi, there
is a phrase. It used to be
backbreaking inflation. It used to be a regular feature
of Indian elections. Backbreaking inflation is killing our
income levels and our ability to spend and have a
decent quality of life. Given the last
five years track record . and they mentioned
this in another context , that the prime minister has broken the back
of black baking — backbreaking inflation. Five years of ensuring the country does
not have to suffer stress due
to price inflation. We have a situation where the country is
growing in an organised manner. We have to take care of
every section of society . Alternate work
opportunities come up for these small retailers , it will have to be
balanced and calibrated will stop
allowing e-commerce to do some of the things they can do in
the Western developed world. For them to do that
in India, the more calibrated plan
will be required. Working opportunities for that large
section of population in alternate occupations will
have to be created. That is the roadmap that
we are working on.>>The United States
government is pressing India hard not to take 5G technology from China. That is one of the big trust areas. As a key player in this
segment, and from the Indian perspective, do
you believe that is an unfair bargain? Because the costs are
much cheaper from China than from European or
American companies. How do you view
this pressure?>>Are concerns
about Huawei have nothing to do with advancing the cause
of American telecom equipment. We do not have a direct competitor , so the notion that our views on wily wily — are a function of protectionism is incorrect. Are big competitors are people like Ericsson
and Nokia, not US. They may have involved
some sort of US European consortium, but anyone
who thinks we are doing this out of protectionism
does not know the facts. The reason we
are doing it as we think there are
genuine security issues . 5G is very different from 3G and 4G. 3G and 4G, you are able to separate peripheral parts from the
central part. 5G, that is
not possible. In 5G, if there is a back door, it is
going to infiltrate the whole system. The proportionality of risk we think is very
considerable. Secondly, while a — they are very
dependent on US technology. It is not that we have found
some magical thing they have found which is not
available elsewhere. I believe in a few
years, there will be a western alternative
that leapfrogs in technology. Since 5G is such a revolutionary
thing, it is going to take a while to roll out anyway. Our feeling is why jump into it ? In most technology , the first version
of a product is not as good as the second and third version. While we agree that
5G is important, we think there is a
genuine security risk. It is not just the risk on the front end. There are constant
upgrades , maintenance things. Every time there
is an introduction with the vendor,
there is the potential for
a security issue to develop. Our concern is based on our desire that our geopolitical
partner India does not inadvertently subjected itself
to untoward security risk. That is the nature of
our concern. At the end of
the day, India has to make its
own decision. But our concerns are security, not
protectionism.>>How real are these
security concerns?>>As he has rightly pointed
out, it is an advisory from the US. They have already
decided for America , banning these products possibly
for decades. They are relying mostly on Nokia and Ericsson. I note Samsung is coming into their
space as well. From our point of view,
I have tracked this industry for 25 years. I am not going
into whether IP was compromised. While we were away — become externally
good with their product . It is significantly superior to Ericsson
and Nokia . They have surprised me how fast they have been
able to take the technology to
another level. The power consumption
is a fraction of the Europeans. The footprint
is very small . There are very powerful features which you can use any variety of ways. Whether they compromised
some American IP s , I don’t know. China will become 100% free from any
American component within the next
few months. They have taken that on as their mission . They know the leverage the US has. India will have to
decide for themselves their relationship with
China in a larger context. India and China are
partners, they are neighbours, they have a huge population. India will take
this advice carefully, but the decision will be
taken politically by…>>What is your view
on that sanctions?>>My feel is they should
be in play. They should use
this as leverage. There are lots
of issues with China as well and India
should take advantage of that. I would rather have this leverage because
it is an important part. The benefit of
American pushback has been that technology has opened up . I’m sure they will do this for an
Indian company . One thing they have done is opened up the Chinese
technology .>>Minister, is that solution? They are now offering
a full transfer of technology. Would they give
it to you as well ?>>I will leave that
to the concerned minister. The team is very
competent, let them handle this issue. I have enough
on my plate!>>As we come to
the conclusion of this conversation, there is something I
have always wondered , secretary Ross. Are you a big Harley-Davidson fan? What is their obsession the Trump administration
has with Harley-Davidson’s . Do you write a lot of them? Why is it so big
and important?>>I’m not sure I
understood the question.>>India reduced tariffs. That has not been
good enough. Why is that one
particular kind of motorcycle such an
important part of the narrative when it comes
to India-US trade ?>>I don’t think we treat
India and fairly relative to anyone else. It is not right to say
the President is doing this that or the other
thing relative to India. The President has gone
out of his way to have a good relationship with
the Indian President. It is unprecedented in the
entire history of the US. Never has the US
sitting President had such a big public
event with a foreign leader from any country , period. If there is any doubt , that was a very
conscious and overheard act to send a very
clear message to both the Indian and
American community and most importantly
to the Indian community . this is a
qualitatively different relationship
from that that has previously
existed between the United States and India and all discussions are
conducted within that frame of reference, so that’s how that be very clear. — Let’s have that
be very clear.>>How long will we be and — how long will it be
until we have a limited trade deal and then
something more significant later?>>We should allow the
negotiating teams to work on them. Whenever there are trade
issues, all of us sit down in a very
comfortable and very, very open-minded way. We are able to resolve
these issues so it is more an issue of time , scheduling calls that will determine how
long it would take but I do not see any big issue
holding it back for any reason and I don’t think
just this announcement is holding back Indian
trade all relations, either geopolitical, either at the leaders
level or at a trade and services level. Nothing is significantly
impacted right now , but we want to actually
take a quantum leap in that, which is the direction
in which both countries and our negotiating
teams and we are working on . GERALD LEE: Thank you
for joining us at the economic summit. Thank you for
joining us. Thank you.

Economic Update: Working Class History and the 2020 Election

Welcome, friends, to another edition of Economic
Update, a weekly program devoted to the economic dimensions of our lives. I’m your host, Richard Wolff, and today’s
program takes into account the fact that Americans are beginning to look into the election — the
big one for president coming up next year, 2020. Because this election is becoming an issue
and will of course become more of an issue as the months roll on, I thought it would
be a good time to stop and take a look at the broader historical picture of American
politics right up to the present. So I call today’s program “American History
and the 2020 Election.” If you’re interested in this argument that
I’m going to be presenting during this program, I should also mention to you that an article-form
version was published in the digital magazine, Counterpunch, which you can find online at, dated June 3, 2019. Of course, when I’m talking about the American
working class, I don’t mean to suggest that everybody who’s in that working class, roughly
150 million Americans, our fellow citizens, agree on everything or act in the same way. There are important divisions of the working
class: men and women, whites and blacks, skilled and unskilled, more educated and less educated
workers. The regional character of the working class
in the South is different from that in the West, and so on. But there were things over the last 75 to
100 years that brought all working people together. And by “working people” I mean what the
government calls “non-supervisory employees,” the workers who do the work that makes this
country function, producing and distributing goods and services. There are roughly 150 million non-supervisory
workers employed in the US today, and they are important not only because they make everything
go around and produce the goods and services without which we couldn’t live but also
because they play a vital role within our current economic system, capitalism. Capitalism is an economic system in which
a relatively small minority of people — owners, CEOs, the people at the top of corporations,
boards of directors, and so on — have the majority of power, wealth, and income in society,
and such a system could not continue to function unless the mass of people, the vast majority,
the non-supervisory working class allowed it. Thus, for capitalism to survive, it has always
been necessary for those at the top to find allies in the working class, and the history
of this relationship is what we’re going to be sketching in what follows. Our story starts back in the 1930s at the
height of the the Great Depression. It starts there because capitalism crashed
big time in 1929. Suddenly, in this country, an economy that
had been booming along basically since the Civil War crumbled. During this period, America had grown richer
faster than even its old parent Britain could do, had grown richer as fast or faster than
the only other quickly growing national economy at the time, Germany’s, could do. America was a success story of exploding net
wealth — we killed off enough of the Native Americans in this country to allow an immense
expansion of the immigrants from Europe across this country. Such wealth created the great names of that
time: the Rockefellers, the Carnegies, and all of those people who got called by the
name that most others understood applied all too well: “robber barons.” Such people became extremely wealthy, and
they celebrated the system that made them so. They also convinced everyone else pretty well
that the wealth and the growth in this country were somehow their doing — not the work
of the mass of people but the result of the genius of the “captains of industry,”
the robber barons themselves. They did a pretty good job of convincing people
of this until, that is, the crash of 1929, when suddenly this great capitalist system
with all of these rich Rockefellers and so on at the helm fell apart. Between 1929 and 1933 there was a continuing
collapse, and by 1933 the unemployment rate in the United States had reached 25%. That means that one out of four people were
without a job. Every family had either a mama or a papa or
a cousin or an uncle without work and, therefore, all were affected. Whatever savings people had accumulated were
quickly used up, because there was no support for unemployed people. There was no unemployment compensation system
then, and thus people had nowhere to turn. The desperation of the times was captured
in novels like Of Mice and Men, Grapes of Wrath, or the other great works by Steinbeck,
Dreiser, and the other novelists of the time, which you might remember reading as a high
school or college student. In that collapse, the mass of the American
working class finally saw through the pretenses of capitalism. They saw that capitalism could deliver not
the goods but the really bads, and the American working class drew a conclusion. The conclusion was that the political party
that represented capitalism the most, the party supporting both capitalism and the wealth
of the rich capitalists, that is, the Republicans, were the people who were not working men and
women’s friends. Working people turned and placed their hopes
in new directions. Some of them decided to go with the Democratic
Party: at least it wasn’t the Republicans, and at least the Democrats showed some sympathy
for workers’ situation. Many workers decided to do something much
more dramatic. They joined labor unions in a way that Americans
had never done before. Indeed, the greatest wave of labor organization
in the history of the United States took place in the depths of the Depression of the 1930s. Millions of Americans who had never been in
a union before, whose parents had never had to do with unions before, decided that the
best way to get through the hard times of the terrible Depression was to unify with
other workers and work together to make something happen. Those who were even more upset by what was
happening to them and by the economic system they thought they could rely on joined either
the two main Socialist parties of the period or the Communist Party. These parties became very important in American
history at that time, and indeed a powerful coalition formed from them, an alliance between
the Communist Party, the Socialist parties, and the labor organizers under the heading
of the CIO, the Congress of Industrial Organizations. Members of this coalition went to the then
newly elected president of the United States, Franklin Roosevelt, a Democrat brought in
out of frustration with the Republicans, the latter of whom had been boasting most loudly
of the great achievements of capitalism. The members of this labor coalition went to
that new president, and they said, “We put you in office. You’re here to help us through this terrible
Depression. If you do, we will celebrate you, and if you
don’t, we will vote you out.” The Communists, the Socialists, and the other
organizers of unions together represented tens of millions of people. The president, Mr. Roosevelt, got the message. He went back to the rich people he came from,
the big leaders of business like himself, and he said, “I just had a meeting with
the Communists, Socialists, and the unionists, and they basically read me the riot act. I had better help those people, the mass of
Americans, through this Depression, or I’m out of here. And gentlemen,” he said looking at them
— there were very few ladies present in that room — “I advise you to go with me
in this effort because if you don’t, these people are very angry. They’re already talking — particularly
those Socialists and Communists — about a revolution here, you know, like the one
they had in Russia just a few years ago, back in 1917” (which wasn’t that long ago when
you’re talking in the early 1930s). So he finished this conversation, Mr. Roosevelt
did, and he said to the rich people with him, “The government has no money. With millions of people unemployed and businesses
falling apart, nobody’s taxes are being paid. The only way to help these people is to get
money, and the only people who have money are you, you corporate leaders, you wealthy
millionaires. So you’ve got to give me the money so I
can take care of the mass of people, and I urge you to do it because if you don’t,
there’s a good chance those people will remove whatever money you have, and you won’t
be in a position to give anybody anything anymore.” Half of those business tycoons gathered bought
Mr. Roosevelt’s argument, and they agreed to his proposition. Mr. Roosevelt then went and did something
unprecedented in the US, and what he did was to take money from the rich, taxing them very
highly and borrowing what he didn’t tax from them, basically telling them that they
had no other choice. He used this money first to create the Social
Security system, which suddenly offered a safety net for all American families. It was as if Mr. Roosevelt had said, “You’re
elderly, you’re 65 years of age and older, so I’m gonna give you a check, a government
Social Security check every month for the rest of your lives.” Second, Mr. Roosevelt created an unemployment
compensation system for the first time. If you lost your job through no fault of your
own, the government would give you a check every week for a year or two to help you through
until you found new employment. Third, he instituted a minimum wage. We never had that before in America, just
like we never had a Social Security system before or unemployment compensation. Suddenly, if you had a job, you couldn’t
be paid below a certain amount because it was indignant for you and indignant for society
to treat people this way — what an idea! Finally, with his massive government hiring
program, it was as if Roosevelt told the American people, “If the private capitalists of this
country can’t or won’t hire millions of Americans who only ask for a job, then I will,
as president.” And he did this. He hired roughly 15 million people between
1934 and 1941. The American working class could not believe
what they had accomplished through the alliance of the Communists, the Socialists, and the
unions. They had pressured a president to tax the
rich and the corporations in order to provide a vast program of help and support to working
men and women, the working class. And the working class made a commitment: this
is our guy, Mr. Roosevelt. And so they turned to his party, the Democratic
Party, and said, “This is the party of the working class, and we’re gonna support you.” How powerful was this support of the working
class? Well, let’s see: Mr. Roosevelt was president
four times. He was reelected three times, that is, by
overwhelming support of the American working class. The working class became the Democratic Party,
and the Democratic Party became it. It’s an extraordinary story, and it’s
when the politics of this country were shaped in a profound way. The role of the Democratic Party and of Roosevelt
was simple. Capitalism as a system, if left in the hands
of private enterprises, capitalists, and big corporations, can and will blow itself up
and produce catastrophes like the Great Depression. The only way to manage that, to prevent such
catastrophes from happening over and over again, is to bring the government in through
a massive intervention of an ongoing sort, like Social Security, unemployment compensation,
minimum wage legislation, and federal jobs, when the private sector can’t provide a
living wage to everybody who needs and wants one. What a commitment! And who’s to pay for it? Big business and the rich. That set the tone for what the Democratic
Party did, but it also set the tone for what the business community would do next. Confronted by a massive defeat, they had to
pay. They had to pay taxes like they had never
paid before to fund a program of helping the mass of people. They had been made out to be the problems
of our society, the “robber barons,” who cared only for profits and not for the well-being
of the American people. Capitalism had given itself a black eye, and
the Democratic Party pointed at it and said, “Never again!” The business community was horrified. Would they have to pay high taxes forever
in this system? Would they not be on top of it? Would they be held responsible forever? “No!” they said, and the rest of this
story relates how American politics were changed after Mr. Roosevelt was gone. We’ve come to the end of the first half
of this program, so having teased you a bit, before I take you to the next step, bringing
the story up to our current president, I want to remind you: please follow us on YouTube. On YouTube, simply search for “Democracy
at Work” to find this program and follow it. Supporting us that way is an enormous encouragement
in a very practical sense for us. Please also make use of our websites:
and Finally, there’s always a special thanks
due to our Patreon community, whose support and encouragement is crucial to every program
we produce. Stay with us, and we will be right back! Welcome back, friends, to the second half
of today’s Economic Update. We had taken our story of the American working
class’s history through the Great Depression and even to the end of World War 2. That was the crucial time because the Depression
was now over. The working class had embraced the Democratic
Party of Franklin Roosevelt, and vice versa. The war had put Americans back to work — half
of the unemployed took on a uniform, and the other half went to work producing the uniforms,
guns, ships, and all the rest. So 1945 marks the crucial end of the Depression,
the return of people to jobs, and the death of Mr. Roosevelt, and that was the opportunity
for action, that is, for the Republican Party to lead the way in pushing back against all
that had been accomplished in the 1930s, undoing what had been done: that thing called the
New Deal. Now the agenda was to undo the New Deal, and
the way the Republican Party and the business community, working very closely together,
did that was to destroy the New Deal coalition, that combination of Communists and Socialists,
on the one hand, and unions, on the other. The working class’s leadership congealed
in those groups: Communists, Socialists, and labor unions had to be destroyed so that the
Republicans could then find allies within the working class to pull over to their side. That way the Republican Party wouldn’t face
a largely united working class, as it had in the devastatingly successful run of the
Democrats under four presidencies of Mr. Roosevelt. So here’s how Republicans did this. First, they went after the Communists by claiming
that they were not leaders of the working class but rather evil agents of a foreign
power. That way they justified getting rid of them,
and the minute they finished that, they did the same to the Socialists and said that they
were the same as the Communists — they just spelled things in a different way. They taught Americans to be very frightened
of all of that, very hostile, and Russia became the great enemy. This was step one: break the working class
coalition. Step two: hobble the labor movement. This especially took place with the passing
of the Taft-Hartley Act of 1946, a law that stipulated that anything that a trade union
won at a workplace had to be given to everybody who worked there, whether or not they were
members of the union, whether or not they had gone out on strike when the union called
them to do that, and whether or not they paid dues to the union. This gave everybody an incentive to be a free
rider, that is, to get the benefits of labor struggles without being part of the union
movement. That marked the beginning of the downhill
run of the labor movement, which was eviscerated in this way. Third, businesses decided they could make
more money by going out of the country. They began that hemorrhaging of jobs out of
the country to cheap labor somewhere else, which the unions couldn’t fight because
they were fighting desperately to survive the onslaught of the government’s attack
on them. All of this worked. The long and the short of it is that this
worked. The New Deal coalition was broken up. Part of this effort also involved forcing
women back into the house, women, that is, who had been pulled into the labor force during
World War 2 when the men went off to fight. Women like Rosie the Riveter had become workers
everywhere in America. Now, after the war, the Republicans led the
charge: women must go back in the household. A woman, they claimed, wasn’t a hero if
she was doing the work that the men used to do and doing her part for the war effort. No, no, she became a person who ought to be
at home, who ought to be taking care of children. The whole Women’s Liberation movement was
born out of the attempt to push women back to a subordinate household role that was not
valued, and yet they were told that they had to do this. Simultaneously, black people, who had begun
to emerge from the Jim Crow segregation of the past into the modern American working
class alongside white people, were pushed back and made subordinate in various ways. White workers were told that they really were
different from black workers — the opposite of what the message of the 1930s had been
in many cases. The idea now among Republicans and their allies
was to build up the divisions within the working class to break them apart, to stop them from
being unified around the idea that capitalism was their problem and that the Democratic
Party would be the party that would save them from what capitalists would otherwise be prepared
to do to them again. This strategy worked in large part. The working class, the labor movement, fell
apart. Women and men started playing the old roles
again and not the new ones they had taken on during the war. Segregation and race hostilities were revved
up again where they had not survived so well before. And so the working class fractured, and the
Republicans were able to make real gains, to be the champion of white against black,
as well as the champion of the male worker on the job against women. You can see the situation that gave birth
to modern identity politics in this onslaught of the New Deal. What did the Democratic Party do? Did it go to its roots and say, “No, we’re
gonna be the united working-class”? No, it didn’t know how to fight this battle. The Democrats, too, were hobbled. They didn’t rely on their left wing because
it was tarred with the brush of “Communism” and “Socialism.” So they fell for that kind of splitting of
the labor coalition, and they themselves helped split it further. Indeed, a new generation of Democrats led
by people like Bill Clinton emerged, who said, “Okay, if we can’t hold on to the working
class, maybe we can gain power for the party by appealing to the capitalists. The party not of Franklin Roosevelt but the
party of the other side — the Republicans — split the working class and hurt us. We’ll split the capitalist class and pull
over a bunch of them to support us.” And what you have in recent decades is the
result: two political parties, both of whom are begging for money from the rich, the powerful,
and the capitalists, and each of them with a hand on part of the working class — the
Republicans more and more appealing exclusively to white, male workers, and the Democrats
more and more to female, non-white minorities. This is the modern picture of party affiliation
among the working class that we’re used to. But both parties are unwilling and unable
to challenge capitalism, because both depend on the same funders. They depend on the same support from the same
small part of society. The Democrats thus could not maintain their
oppositional position that they had developed in the 1930s. And the man who comes to power and puts it
all together — Ronald Reagan — he takes the crucial step to finish this job of decimating
the labor coalition. He begins his presidency by throwing the air-traffic
controllers out of their jobs, showing that he is gonna crunch down on what remains of
the labor movement and that he is gonna celebrate globalization. Of course he will help American companies
that want to go abroad! Of course he will help American companies
that want to use this new invention of the computer to get rid of millions of jobs, throwing
people into the chaos of unemployment and hunting for a new job! The power of the business community was rebuilt
as it was before the Great Depression, and the American working class split. Mr. Reagan gets enough of particularly white
male workers to pull away from the Democratic Party to get power. Mr. Clinton, who comes afterwards — he has
given up. He supports the same capitalists, he supports
globalization, he supports all of it. His only claim to the mass of the working
class is: “Look, you should vote for me, not those like Mr. Reagan, because I’ll
soften these developments. I mean, I’ll do the same stuff that he did,
but I won’t do it so harshly. I won’t do it so quickly. Yeah, you’ll lose your job to a computer,
but I’ll give you some help along the way so it won’t be as bad as those Republicans
will let it be.” The Democrats become Republican Light, and
that’s not a winning strategy, not at all. Because the white working class — the men,
and particularly the white men, who increasingly supported mostly the Republicans — helped
the Republican Party win. The Republicans appealed to them. But the white working class was getting frustrated,
as were women, blacks, and others across all this period. Whether it’s Reagan or it’s Clinton, whether
it’s the old Republicans or the Democrats, the underlying reality is that both of those
parties are letting capitalism do what it does: replace people with machines, move jobs
abroad, build up the profits of the few, and neglect the conditions of the mass of people. And people get angry. It takes a while, even decades, but across
the 1980s and 1990s and the first decade of this century, all of these processes are at
work until finally the working class is angry enough to say, “We don’t care whether
it’s the Reagan Republicans or the Clinton Democrats! This is all the same! We want something different!” There is a memory, an echo, a historical trace
of what the working class remembers, even if it was their parents who told them about
something different back in the 1930s. And they want something different. For a while in recent presidential campaigns
you began to see this, as each candidate for President said to the audience at the beginning
of the campaign, “I’m not like every other politician!” You might have thought to yourself, “Oh,
I wonder why they’re saying that they’re something new and different?” Because that’s what people wanted to hear! And then along comes a character, a narcissist,
a baby, a boaster, a bully, Mr. Trump, and he says, “I’m different from all the Republicans!” He looks it and acts it, and he speaks it. So he defeats all of the old Republicans inside
that party, and then he defeats the other side associated with Clinton in the other
party, and he becomes the president. Because the working class was so angry at
what had been done to them in the rollback of the New Deal by Republicans and Democrats
alike, with the only difference being the Democrats did things a little slower. They were so angry they wanted somebody different,
and since the only offer of something really different was Mr. Trump, well, they surprised
everybody by raising their collective middle finger. They voted for him, really hoping that he’d
make a change now — maybe. What’s to lose? as Mr. Trump himself said. So here we have it. We have the working class, which has been
crucial at every step of the way in this history — in coming forward, in retreating, in allowing
the destruction of its institutions that had formerly protected it. You know, in Europe none of this kind of thing
happened in the same way. Why? Because the working class did not suffer the
kind of crushing that happened here. They held on to their Socialist parties, they
held on to their Communist parties, and they held on to their unions, which is why you
couldn’t do in Italy or France or Germany or Scandinavia what the capitalists could
do here after the war. This is why these countries have universal
health insurance and subsidized colleges and all the things that Americans vaguely dream
of, which they have and they will not let go of. So the American working class is at a kind of cross roads, isn’t it? What’s it gonna do now? Is it gonna realize the unity of white and
black workers, of men and women, and on and on? Is it gonna pull that all together? And why should it? Because this tactic won large concessions
the last time in the 1930s, concessions that have been lost since then. No way is Mr. Trump gonna bring you any of
that back. He’s one of them, even if he acts the bully
and acts the crazy. He’s one of them. He’s part of the rollback of the New Deal. Regarding the Democratic Party in 2020: we’ll
have to face all of this even more so if Democrats go for someone like Mr. Biden. With him, the Democrats are saying to the
American working class, “We’ve learned nothing from this history. We’re gonna give you more of what you’ve
shown us you will reject, first when you voted for Reagan, and again when you voted for Trump.” Are Democrats going to choose another one
of those losers, or are they gonna go in a direction of unity — unity of the working
class across all these divisions — by choosing someone more like Mr. Sanders or others in
the primary. It doesn’t have to be Mr. Sanders, and it
doesn’t even have to be any of the declared people right now. It has to be a person representing something
new and different in terms of the recent history but something old that we’ve learned from
in terms of what the Democratic Party was in the 1930s. What it was, it can be again, but the question
is when, and how, and who will make that happen. And this election coming up in 2020 is a first
step in figuring out whether the Democratic Party can rise to this present situation. If it can’t, perhaps new and different parties
will have to emerge that do learn the lesson of the history of the American working class
and its relationship to politics, and therefore, can make a difference and surprise everybody
from the left the way that Mr. Trump’s victory surprised everyone from the right. I hope you found this interesting as a way
to think about the election coming up. That’s what this program was designed to
help you to do. Thank you very much for your attention, and
I look forward to speaking with you again next week.

A Green New Deal to unite Europe’s progressives | DiEM25

[Music] the intergovernmental panel on climate change space we have 12 years to limit climate catastrophe 12 years to cut most of our emissions in Europe there’s fortunately a broad agreement that a green transition would boost our economy but reluctant governments and our undemocratic establishment in Brussels favoring big business tax cuts letting the few hoard the profits while imposing austerity on the many creating job insecurity and Europe’s lowest investments of savings ratio since World War two we say there’s an alternative but it can only be realized if we stand together across the continent it’s time to listen to the people’s demands and create a new green investment plan in favour of workers and our environment we propose a green new deal for Europe its main objective to spend five hundred billion euros annually to fund the green transition we need and boost the economy of Europe’s working and middle classes and this is how we’ll fund it the European Investment Bank is going to issue bonds the bonds are bought by investors and the public the money is used to fund green development projects and the profits are distributed among bondholders the European Investment Bank issues bonds all the time but this time it will issue bonds to the tune of 500 billion euros every year for five years conducting the green transition and energy transport and agriculture and secure a massive increase of unionized jobs across the whole continent this is all possible within the existing EU framework and doesn’t need any new law or treaty to be created in fact after many weeks of climate strikes in Brussels the EU Commission President jean-claude Juncker promised that in coming years billions of the EU budget would go to fighting climate change that’s a start but not nearly enough we need a truly trans formative plan which secures workers rights and is paid by secure investment and the EU institutions that are supposed to work for us not by further taxation of the people that is why we in collaboration with the progressives across the continent have created the European Spring Europe’s first transnational party to run in upcoming EU Parliament elections and implement this program the European elections will happen between Thursday 23rd of May and Sunday 26th of May two European elections that you to find out your country’s procedures and dates we’re at a crucial moment in European history at the same time as faith in the EU is waning we see a rise in misanthropy xenophobia and toxic nationalism that is why we have come together despite our diverse political traditions green radical left liberal to work to make the EU a realm of shared prosperity peace and solidarity for all Europeans and to make sure our continent is taking its part to create the future we want for our world read the rest of our programme at European Spring net

Why nations should pursue “soft” power | Shashi Tharoor

As an Indian, and now as a politician and a government minister, I’ve become rather concerned about the hype we’re hearing about our own country, all this talk about India becoming a world leader, even the next superpower. In fact, the American publishers of my book, “The Elephant, The Tiger and the Cell Phone,” added a gratuitous subtitle saying, “India: The next 21st-century power.” And I just don’t think that’s what India’s all about, or should be all about. Indeed, what worries me is the entire notion of world leadership seems to me terribly archaic. It’s redolent of James Bond movies and Kipling ballads. After all, what constitutes a world leader? If it’s population, we’re on course to top the charts. We will overtake China by 2034. Is it military strength? Well, we have the world’s fourth largest army. Is it nuclear capacity? We know we have that. The Americans have even recognized it, in an agreement. Is it the economy? Well, we have now the fifth-largest economy in the world in purchasing power parity terms. And we continue to grow. When the rest of the world took a beating last year, we grew at 6.7 percent. But, somehow, none of that adds up to me, to what I think India really can aim to contribute in the world, in this part of the 21st century. And so I wondered, could what the future beckons for India to be all about be a combination of these things allied to something else, the power of example, the attraction of India’s culture, what, in other words, people like to call “soft power.” Soft power is a concept invented by a Harvard academic, Joseph Nye, a friend of mine. And, very simply, and I’m really cutting it short because of the time limits here, it’s essentially the ability of a country to attract others because of its culture, its political values, its foreign policies. And, you know, lots of countries do this. He was writing initially about the States, but we know the Alliance Francaise is all about French soft power, the British Council. The Beijing Olympics were an exercise in Chinese soft power. Americans have the Voice of America and the Fulbright scholarships. But, the fact is, in fact, that probably Hollywood and MTV and McDonalds have done more for American soft power around the world than any specifically government activity. So soft power is something that really emerges partly because of governments, but partly despite governments. And in the information era we all live in today, what we might call the TED age, I’d say that countries are increasingly being judged by a global public that’s been fed on an incessant diet of Internet news, of televised images, of cellphone videos, of email gossip. In other words, all sorts of communication devices are telling us the stories of countries, whether or not the countries concerned want people to hear those stories. Now, in this age, again, countries with access to multiple channels of communication and information have a particular advantage. And of course they have more influence, sometimes, about how they’re seen. India has more all-news TV channels than any country in the world, in fact in most of the countries in this part of the world put together. But, the fact still is that it’s not just that. In order to have soft power, you have to be connected. One might argue that India has become an astonishingly connected country. I think you’ve already heard the figures. We’ve been selling 15 million cellphones a month. Currently there are 509 million cellphones in Indian hands, in India. And that makes us larger than the U.S. as a telephone market. In fact, those 15 million cellphones are the most connections that any country, including the U.S. and China, has ever established in the history of telecommunications. But, what perhaps some of you don’t realize is how far we’ve come to get there. You know, when I grew up in India, telephones were a rarity. In fact, they were so rare that elected members of Parliament had the right to allocate 15 telephone lines as a favor to those they deemed worthy. If you were lucky enough to be a wealthy businessman or an influential journalist, or a doctor or something, you might have a telephone. But sometimes it just sat there. I went to high school in Calcutta. And we would look at this instrument sitting in the front foyer. But half the time we would pick it up with an expectant look on our faces, there would be no dial tone. If there was a dial tone and you dialed a number, the odds were two in three you wouldn’t get the number you were intending to reach. In fact the words “wrong number” were more popular than the word “Hello.” (Laughter) If you then wanted to connect to another city, let’s say from Calcutta you wanted to call Delhi, you’d have to book something called a trunk call, and then sit by the phone all day, waiting for it to come through. Or you could pay eight times the going rate for something called a lightning call. But, lightning struck rather slowly in our country in those days, so, it was like about a half an hour for a lightning call to come through. In fact, so woeful was our telephone service that a Member of Parliament stood up in 1984 and complained about this. And the Then-Communications Minister replied in a lordly manner that in a developing country communications are a luxury, not a right, that the government had no obligation to provide better service, and if the honorable Member wasn’t satisfied with his telephone, could he please return it, since there was an eight-year-long waiting list for telephones in India. Now, fast-forward to today and this is what you see: the 15 million cell phones a month. But what is most striking is who is carrying those cell phones. You know, if you visit friends in the suburbs of Delhi, on the side streets you will find a fellow with a cart that looks like it was designed in the 16th century, wielding a coal-fired steam iron that might have been invented in the 18th century. He’s called an isthri wala. But he’s carrying a 21st-century instrument. He’s carrying a cell phone because most incoming calls are free, and that’s how he gets orders from the neighborhood, to know where to collect clothes to get them ironed. The other day I was in Kerala, my home state, at the country farm of a friend, about 20 kilometers away from any place you’d consider urban. And it was a hot day and he said, “Hey, would you like some fresh coconut water?” And it’s the best thing and the most nutritious and refreshing thing you can drink on a hot day in the tropics, so I said sure. And he whipped out his cellphone, dialed the number, and a voice said, “I’m up here.” And right on top of the nearest coconut tree, with a hatchet in one hand and a cell phone in the other, was a local toddy tapper, who proceeded to bring down the coconuts for us to drink. Fishermen are going out to sea and carrying their cell phones. When they catch the fish they call all the market towns along the coast to find out where they get the best possible prices. Farmers now, who used to have to spend half a day of backbreaking labor to find out if the market town was open, if the market was on, whether the product they’d harvested could be sold, what price they’d fetch. They’d often send an eight year old boy all the way on this trudge to the market town to get that information and come back, then they’d load the cart. Today they’re saving half a day’s labor with a two minute phone call. So this empowerment of the underclass is the real result of India being connected. And that transformation is part of where India is heading today. But, of course that’s not the only thing about India that’s spreading. You’ve got Bollywood. My attitude to Bollywood is best summarized in the tale of the two goats at a Bollywood garbage dump — Mr. Shekhar Kapur, forgive me — and they’re chewing away on cans of celluloid discarded by a Bollywood studio. And the first goat, chewing away, says, “You know, this film is not bad.” And the second goat says, “No, the book was better.” (Laughter) I usually tend to think that the book is usually better, but, having said that, the fact is that Bollywood is now taking a certain aspect of Indian-ness and Indian culture around the globe, not just in the Indian diaspora in the U.S. and the U.K., but to the screens of Arabs and Africans, of Senegalese and Syrians. I’ve met a young man in New York whose illiterate mother in a village in Senegal takes a bus once a month to the capital city of Dakar, just to watch a Bollywood movie. She can’t understand the dialogue. She’s illiterate, so she can’t read the French subtitles. But these movies are made to be understood despite such handicaps, and she has a great time in the song and the dance and the action. She goes away with stars in her eyes about India, as a result. And this is happening more and more. Afghanistan, we know what a serious security problem Afghanistan is for so many of us in the world. India doesn’t have a military mission there. You know what was India’s biggest asset in Afghanistan in the last seven years? One simple fact: you couldn’t try to call an Afghan at 8:30 in the evening. Why? Because that was the moment when the Indian television soap opera, “Kyunki Saas Bhi Kabhi Bahu Thi,” dubbed into Dari, was telecast on Tolo T.V. And it was the most popular television show in Afghan history. Every Afghan family wanted to watch it. They had to suspend functions at 8:30. Weddings were reported to be interrupted so guests could cluster around the T.V. set, and then turn their attention back to the bride and groom. Crime went up at 8:30. I have read a Reuters dispatch — so this is not Indian propaganda, a British news agency — about how robbers in the town of Musarri Sharif* stripped a vehicle of its windshield wipers, its hubcaps, its sideview mirrors, any moving part they could find, at 8:30, because the watchmen were busy watching the T.V. rather than minding the store. And they scrawled on the windshield in a reference to the show’s heroine, “Tulsi Zindabad”: “Long live Tulsi.” (Laughter) That’s soft power. And that is what India is developing through the “E” part of TED: its own entertainment industry. The same is true, of course — we don’t have time for too many more examples — but it’s true of our music, of our dance, of our art, yoga, ayurveda, even Indian cuisine. I mean, the proliferation of Indian restaurants since I first went abroad as a student, in the mid ’70s, and what I see today, you can’t go to a mid-size town in Europe or North America and not find an Indian restaurant. It may not be a very good one. But, today in Britain, for example, Indian restaurants in Britain employ more people than the coal mining, ship building and iron and steel industries combined. So the empire can strike back. (Applause) But, with this increasing awareness of India, with you and with I, and so on, with tales like Afghanistan, comes something vital in the information era, the sense that in today’s world it’s not the side of the bigger army that wins, it’s the country that tells a better story that prevails. And India is, and must remain, in my view, the land of the better story. Stereotypes are changing. I mean, again, having gone to the U.S. as a student in the mid ’70s, I knew what the image of India was then, if there was an image at all. Today, people in Silicon Valley and elsewhere speak of the IITs, the Indian Institutes of Technology with the same reverence they used to accord to MIT. This can sometimes have unintended consequences. OK. I had a friend, a history major like me, who was accosted at Schiphol Airport in Amsterdam, by an anxiously perspiring European saying, “You’re Indian, you’re Indian! Can you help me fix my laptop?” (Laughter) We’ve gone from the image of India as land of fakirs lying on beds of nails, and snake charmers with the Indian rope trick, to the image of India as a land of mathematical geniuses, computer wizards, software gurus. But that too is transforming the Indian story around the world. But, there is something more substantive to that. The story rests on a fundamental platform of political pluralism. It’s a civilizational story to begin with. Because India has been an open society for millennia. India gave refuge to the Jews, fleeing the destruction of the first temple by the Babylonians, and said thereafter by the Romans. In fact, legend has is that when Doubting Thomas, the Apostle, Saint Thomas, landed on the shores of Kerala, my home state, somewhere around 52 A.D., he was welcomed on shore by a flute-playing Jewish girl. And to this day remains the only Jewish diaspora in the history of the Jewish people, which has never encountered a single incident of anti-semitism. (Applause) That’s the Indian story. Islam came peacefully to the south, slightly more differently complicated history in the north. But all of these religions have found a place and a welcome home in India. You know, we just celebrated, this year, our general elections, the biggest exercise in democratic franchise in human history. And the next one will be even bigger, because our voting population keeps growing by 20 million a year. But, the fact is that the last elections, five years ago, gave the world extraordinary phenomenon of an election being won by a woman political leader of Italian origin and Roman Catholic faith, Sonia Gandhi, who then made way for a Sikh, Mohan Singh, to be sworn in as Prime Minister by a Muslim, President Abdul Kalam, in a country 81 percent Hindu. (Applause) This is India, and of course it’s all the more striking because it was four years later that we all applauded the U.S., the oldest democracy in the modern world, more than 220 years of free and fair elections, which took till last year to elect a president or a vice president who wasn’t white, male or Christian. So, maybe — oh sorry, he is Christian, I beg your pardon — and he is male, but he isn’t white. All the others have been all those three. (Laughter) All his predecessors have been all those three, and that’s the point I was trying to make. (Laughter) But, the issue is that when I talked about that example, it’s not just about talking about India, it’s not propaganda. Because ultimately, that electoral outcome had nothing to do with the rest of the world. It was essentially India being itself. And ultimately, it seems to me, that always works better than propaganda. Governments aren’t very good at telling stories. But people see a society for what it is, and that, it seems to me, is what ultimately will make a difference in today’s information era, in today’s TED age. So India now is no longer the nationalism of ethnicity or language or religion, because we have every ethnicity known to mankind, practically, we’ve every religion know to mankind, with the possible exception of Shintoism, though that has some Hindu elements somewhere. We have 23 official languages that are recognized in our Constitution. And those of you who cashed your money here might be surprised to see how many scripts there are on the rupee note, spelling out the denominations. We’ve got all of that. We don’t even have geography uniting us, because the natural geography of the subcontinent framed by the mountains and the sea was hacked by the partition with Pakistan in 1947. In fact, you can’t even take the name of the country for granted, because the name “India” comes from the river Indus, which flows in Pakistan. But, the whole point is that India is the nationalism of an idea. It’s the idea of an ever-ever-land, emerging from an ancient civilization, united by a shared history, but sustained, above all, by pluralist democracy. That is a 21st-century story as well as an ancient one. And it’s the nationalism of an idea that essentially says you can endure differences of caste, creed, color, culture, cuisine, custom and costume, consonant, for that matter, and still rally around a consensus. And the consensus is of a very simple principle, that in a diverse plural democracy like India you don’t really have to agree on everything all the time, so long as you agree on the ground rules of how you will disagree. The great success story of India, a country that so many learned scholars and journalists assumed would disintegrate, in the ’50s and ’60s, is that it managed to maintain consensus on how to survive without consensus. Now, that is the India that is emerging into the 21st century. And I do want to make the point that if there is anything worth celebrating about India, it isn’t military muscle, economic power. All of that is necessary, but we still have huge amounts of problems to overcome. Somebody said we are super poor, and we are also super power. We can’t really be both of those. We have to overcome our poverty. We have to deal with the hardware of development, the ports, the roads, the airports, all the infrastructural things we need to do, and the software of development, the human capital, the need for the ordinary person in India to be able to have a couple of square meals a day, to be able to send his or her children to a decent school, and to aspire to work a job that will give them opportunities in their lives that can transform themselves. But, it’s all taking place, this great adventure of conquering those challenges, those real challenges which none of us can pretend don’t exist. But, it’s all taking place in an open society, in a rich and diverse and plural civilization, in one that is determined to liberate and fulfill the creative energies of its people. That’s why India belongs at TED, and that’s why TED belongs in India. Thank you very much. (Applause)

Michael Gove does not rule out ignoring legislation to stop no-deal Brexit

See what the legislation says, You’re asking me about
a pig in a poke and I will wait to see what
legislation the opposition may try to bring forward
but we know what – We’re in new constitutional times,
but for a government to say ‘we won’t abide by legislation’
is impossible, surely? Well, we will see what the
legislation says when it is put forward. For me, the most important
thing is to bear in mind, actually, you already have
legislation in place, which an overwhelming
majority of MPs voted for.

What global trade deals are really about (hint: it’s not trade) | Haley Edwards | TEDxMidAtlantic

Translator: Mirjana Čutura
Reviewer: Peter van de Ven Hello, everybody. I want you all to come away
from the next 10 minutes with a single counterintuitive idea, and that is that trade deals
aren’t really about trade, not in any conventional sense of the word. They’re not about tariffs,
they’re not about quotas, they’re not about GDP growth, they’re not even really about jobs. That’s how we tend to talk about it:
job loss and job gain, and that’s what’s in the news,
and that’s what’s at the DNC, but that’s not what they’re really about. Not really. And we’ll get to that, but for now, I want to start
at the very beginning. The modern era of free trade,
as we think of it today, started in about 1944, when all the great lights
of liberal economics got together in a little place called
Bretton Woods, New Hampshire. And at the time, the world
was in a pretty dark place. You know, all the people there
remembered World War I, they lived through the Depression, World War II was still raging
across the Atlantic, and at the top of everyone’s mind
at the time was world peace: how do we create an economy that fosters
and necessitates world peace? That was the entire idea. And they seized on this idea
of economic interdependence. The idea was that if nation states
were dependent on each other for their supply chains, then they couldn’t go to war
with each other. If Germany needed France for its coal
and France needed Germany for its steel, then they couldn’t go to war
with each other. So, that was the idea behind what became,
about four years later, the GATT, the General Agreement
on Tariffs and Trade. And this little document
created the world as we know it today. It created globalization,
it created outsourcing, it created multinational corporation
as we think of it. It’s hard to imagine a world in which there weren’t, you know,
McDonald’ses and global corporations and the sort of structure
that we have now. But the General Agreement
on Tariffs and Trade is what did it. We created this. And it brought on this period
of extraordinary disruption and convulsion and prosperity. From about 1948, when the GATT
was first signed, till late ’70s, the global GDP grew by about seven percent
per year – just explosive growth. And for a while,
people thought that wouldn’t end, that was just it –
we had cracked the code. But then it began to wane. And in the late ’70s and early ’80s, you had the great lights
of a new generation of liberal economics get together for a second time: a new Bretton Woods. Only this time, it was the Uruguay Round,
and it lasted for eight years. And the scenario there
was a little different. Instead of world peace
and economic interdependence, they were really motivated
by this idea of global efficiency: so basically, How do we continue
to boost the global economy as it has been boosted
over the last 30 years? What do we do? And the scenario was different. So, in the 1940s, there were just
really, really high tariffs and quotas and really protectionist policies
at all the borders. And so, lowering those
could have this profound influence, but by the ’80s, a lot
of those quotas were pretty low, a lot of those tariffs
were already pretty low. So, they began to think outside the box, and they seized on this idea
of non-tariff barriers. And now, this leads into the modern era
of trade I’m talking about now. Now, non-tariff barriers are the idea that it doesn’t really matter how low a tariff is
around a country’s border if, once a product gets inside, it has
to compete at an uneven playing field. So, once you have, you know,
Jim Bean, for example, it doesn’t matter if Japan
doesn’t have a tariff on liquor if, once it’s inside Japan, it has to compete on the same shelf
next to a Japanese liquor that’s subsidized
by the Japanese government. So, the idea now was, you know,
we just strip away all that other stuff and make the world’s economy
as efficient as possible. And that is the philosophy that governed
trade beginning in the 1990s. In 1995, we got rid of the GATT, and we replaced it with something
you’ve probably heard of: the World Trade Organization. And around that time, before and after, we had these extraordinarily,
enormously powerful trade agreements – the NAFTA, the CAFTA, and literally thousands
of bilateral investment treaties – all of which were governed
by the same philosophy: non-tarrif barriers. How do you get nation states
to sign on to this idea that their domestic industrial policies, their domestic laws,
their domestic regulations needed to align with this global
sense of efficiency? It’s the whole idea. And just take a moment,
and appreciate that because it’s totally different than anything that the granddaddies
of trade would have considered trade. In the late 19th century, you know, David Ricardo and Adam Smith and all these people
you learn about in textbooks, when they were talking about trade, they were not talking about someone’s
domestic policy on environmental law. They were not talking about, you know, how long a pharmaceutical
company’s data exclusivity should last. Should it last for 12 years
or 7 years or 5 years and under what circumstances? All of a sudden, that became
what we were talking about when we talked about trade. And that changed everything. So, to give you two examples, one of the biggest discussions about trade
that we’ve been having since the late ’90s involves – or fights, really –
involves the Europeans and the Americans. And the Americans want to export
their genetically modified beef to Europe, and the Europeans, for a variety
of cultural and social mores, don’t want that, don’t want GMO beef. And so, you have this fight because the Europeans say
that they’re allowed for local rule and national sovereignty and democratic nations reflecting
the preferences of their constituencies, they should be allowed
to have those rules. And the USA, that’s backed
by the WTO, says, “No, your domestic policies are not aligning
with the sense of global efficiency.” And that is actually a much
more interesting discussion to be having than, Is trade good or is trade bad? Suddenly, we’re discussing
national sovereignty, we’re discussing local rule, we’re discussing, What do we mean
by environmental regulations, and are we okay with them being trumped? Under what circumstances? So, here’s a second example,
and this happened this year in the US. In the US, it used to be or it is that if you wanted
to put your tuna on the shelf and say “dolphin-free tuna” on it, you had to use methods
that actually excluded dolphins. And the Mexican government
got wind of that and said, “You know, that’s not fair. That discriminates
against Mexican fishermen” because Mexican fishermen fish
in waters that are dolphin heavy, and they use methods
that don’t exclude dolphins. So, by having this law, we’re actually
discriminating against Mexican fishermen. And the WTO agreed. So, we have, you know,
these efficiency problems. How do we think about global efficiency? How do we promote the free movement
of as much goods and as much services across as many borders as possible while at the same time
preserving the laws and regulations that prize things that aren’t
about global efficiency, that are maybe about,
you know, racial equality or about protecting the environment or laws that prize public health issues, things like that? That gets us up to where we are today. You may have noticed that the conversation
that we’re having about trade on the national stage right now is very confused. (Laughter) We’ve got both of our
presidential candidates, who appear to be in favor of free trade but are against
the Trans-Pacific Partnership, that’s that massive trade deal that would connect the United States
and 11 other Pacific Rim countries. And then, you have other organization
like the AARP and the Sierra Club and Doctors Without Borders that are opposed to elements of it. And people are telling us,
“Oh, you’re either for free trade, or you’re against it, or you’re for globalization,
or you’re against it. What kind of the world
do you want to live in?” Well, we’re not talking about trade. We’re talking about rules. We’re talking about global rules,
global standards, and what kind of world we want that to be. And as soon as you
sort of change your mind and you realize that
that’s what we’re talking about, it all starts to make a lot more sense. So, I want to leave
you guys with that idea. We created the world that we live in now. Our forefathers got together
at Bretton Woods, and they created this global
economy that we have now, and we remade it
in the late ’80s and the ’90s with the World Trade Organization. The rules that we pass and that we embrace
are the rules of the game that we live in. So, let’s think about that,
let’s think about trade in that context. Let’s think about what rules
we want to embrace, what we want them to serve. You know, do we want global efficiency
to be the paradigm that we think of, or do we want it to be something else,
maybe like global prosperity? Global prosperity for normal people: for farmers and ranchers
and, you know, everyday Americans. It’s because the rules that we pass
are the rules of the game, and when we talk about trade,
we’re talking about rules. Thank you so much. (Applause)

“Our Green New Deal for Europe will tackle underemployment & involuntary migration” Part II | DiEM25

Nous avons identifié, comme principales
causes de la destruction de l’Europe et de son
démembrement, deux raisons. Premièrement un sous-emploi
subi. Des millions d’européens sans emplois, ou
qui, ne trouvant pas de plein temps, sont forcés de prendre un temps partiel. D’autres, qualifiés, avec un doctorat en
physique mais forcés d’être livreur pour une pizzeria. Deuxièmement, une émigration subie. Les migrations sont quelque chose de
magnifique. L’humanité s’est répandue sur la terre,
depuis sa naissance, je crois, en Afrique. Aucun pays, aucune frontière ne devrait
nous empêcher de migrer, si c’est là notre désir. Pourtant la tragédie des migrations forcées
est, que des populations, qui n’ont aucun intérêt à quitter
leur foyer, y sont forcées afin d’aller à Berlin,
Londres, au Canada, non pas pour le climat, ou la qualité de la nourriture,
mais car il n’existe pour eux aucun avenir dans
leur pays d’origine Comment pouvons nous stopper, le sous-
emploi et la migration forcée? Ces forces corrosives pour l’ensemble
de l’Europe. Nous avons besoin, selon nous, d’au moins
cinq réformes. 1 – Nous devons apprivoiser le secteur
financier, les banques, les banquiers et démocratiser l’argent ainsi
que le crédit. Nous devons créer un système de régulation
prévenant les banques toute toxicité. Il est absurde que les banques Allemandes
soient exposé à hauteur de six fois le PIB, soient six fois plus
grosse que le revenu national Allemand. Aucune banque d’Europe ne devrait être
exposée à plus de 20% du PIB national. Il devrait y avoir de très strictes
limitations aux paris et aux niveaux d’exposition
des banques. Il devrait y avoir un nouveau système
de paiement public digital, qui pourrait concurrencer celui du secteur
privée des banques. 2 – Nous devons créer un fond
d’investissement vert. Il est absurde qu’aujourd’hui en
Allemagne les taux d’intérêts soient proches de zéro et parfois même
négatifs alors que nous y observons le plus bas niveau
d’investissement dans l’histoire et le plus haut niveau d’épargne jamais
vu. Il suffit de dire cela pour comprendre
que nous sommes tous en danger. Si l’Allemagne, avec 0% de taux d’intérêt
et un excédent généralisé, a le niveau d’investissement le plus faible
depuis 1950, alors nous savons que cette Europe n’est simplement
plus viable. Nous avons donc besoin de créer une
alliance, un partenariat, entre les banques d’investissements comme KFW,
comme la banque Européenne d’investissement et les banques centrales,
afin de lier la capacité des banques ,à imprimer de la monnaie, à des
investissements dans les domaines dont nous avons plus besoin et de désinvestir,
ceux que l’on souhaite réduire, comme les
voiture diesel par exemple. Nous avons besoin de financer les
innovateurs et en même temps nous devons financer les supports de
notre société. Ces gens de bien qui font attention à leur
communauté, qui entretienne ces processus banals, qui
eux ne sont pas de la haute technologie innovante, mais
sont essentiels. Comme ceux qui nettoient les égouts, ceux qui
remplacent les lignes électriques Ceux qui s’occupent d’écoles et d’hôpitaux.
Nous avons donc besoin d’une garantie d’accès aux biens fondamen-
taux qui soit financer sérieusement. 4 – Avez-vous remarquez que de plus
en plus avec l’emploi du digital et de l’intelligence artificiel
le capital social est multiplié. Chaque fois que je vois quelqu’un
ici regarder son téléphone, chaque fois que vous regarder sur Google,
que vous cherchez, vous contribuez au capital de Google. Mais
Google ne partage pas ses revenus avec vous. Le capital est
désormais produit par la société, mais exploité par des
intérêts privés. Nous avons besoin d’un dividende
citoyen universel. Nous avons besoin qu’un part des actions
des entreprise soient détenues par l’État, afin que les
dividendes, ces revenus qu’ils produisent soient distribués à la société.
Si nous ne faisons pas cela, avec l’augmentation de l’automatisation,
nous allons voir progresser les inégalités, les instabilités et en fin
de comptes les entreprises aussi vont en souffrir. Enfin, nous avons besoin de mettre
un terme à la crise de l’Euro. Nous avons un chapitre entier sur comment
le faire dès demain matin. Nous n’avons pas besoin des changements
de traité proposés par Emmanuel macron, et auxquels Wolfgang Schauble et
Martin Schultz disent “Nein”. Nous pouvons reconfigurer,
recalibrer et redéployer les institutions existantes comme la banque
Européenne d’investissement, comme la banque centrale européenne,
comme le mécanisme de stabilité européen afin qu’elles
s’occupent, simultanément, de rendre des marges fiscales pour nos
gouvernements, d’une véritable union bancaire, de restructurer les dettes
publiques européennes, sans les réduire, d’un programme
d’investissement visant au redressement de la zone euro. Si vous lisez notre New Deal européen,
nous y proposons la création d’institution très importante, qui peuvent l’être sur les bases d’une
coopération approfondie, qui est déjà en partie dans la panoplie de l’Union
européenne. C’est dans le traité de Lisbonne. Créons
un fond de dépôt européen, un fond social pour l’Europe entière. Le financement de ce fond devrait venir des
profits de la banque centrale Européenne. Vous savez combien fait de profit chaque
année la BCE? Beaucoup. De tous ces achats d’action,
et de dettes privées. Grâce aux objectifs de moyen de paiement
intra-européen, grâce aux dividendes des entreprises, déjà
mentionnés, grâce aux parts des profits
monopolistiques des entreprises, faites à partir de droit de propriété
intellectuel, grâce à une taxe sur les successions européennes
et enfin par une taxe carbone. Ces revenus devront financer un fond
social commun pour l’ensemble de L’Europe Nous l’appelons le programme de sécurité
pan-européen, à partir duquel nous financerons les biens auxquelles je
faisais référence plus tôt et le dividende citoyen universel. Notre New
deal explique aussi ce qui doit être fait dès demain matin, à court terme. Par exemple, une méthode de
payement digital peut être implémentée en moins d’un mois. Le plan anti-pauvreté dont nous avons
besoin afin de solidifier l’Europe, peut être fonder demain à partir
des bénéfices de la BCE. La banque européenne
d’investissement, de KFW. L’alliance des banques centrales
européenne ne demande qu’une annonce pour se mettre en activité. Cela
peut être fait en un mois. À moyen terme, nous proposons un nouveau
régime de régulation des banques, un plan pour l’habitation et l’emploi
garanti, ainsi qu’un programme d’investissement à
pour la transition écologique, et à long terme, l’activation d’un dividende
universel citoyen. Une fois que nous aurons stabilisé l’Europe
et redonné de l’espoir, alors alors nous pourrons nous asseoir autour
de la table, en tant que citoyen européens afin de discuter de ce qui nous manque. Une constitution démocratique pour l’
Europe afin de remplacer l’ensemble des traités et qui
donnera aux européens une opportunité de se faire “peuple” et de
rendre au peuple la démocratie.