How to Govern Intelligently in the 21st Century - Nicholas Berggruen

How to Govern Intelligently in the 21st Century – Nicholas Berggruen

anyone who believes in indefinite growth on a physical finite planet is either mad or an economist we don't want to focus politics on a notion that involves the rejection of principles around which a large majority of our fellow citizens organized labor laws we are not as endlessly manipulable and its predictable as you would think the democracy has really hard and hard a time to accept reforms and to reform itself and we see can we borrow some ideas that exist in the East which tend to be more longer term in nature which are more community-oriented in theory more meritocratic but on the other hand much less accountable to citizens so we compare if you want east and west and we make a case for certain of the idea that exists in these very different systems we've got as the Institute we've got three different efforts a California reforms effort California being maybe the model of extreme democracy up to now to get anything major done in California you need to to go to citizens directly referendum so basically California has been almost governed through referendums over the last you know hundred years or so then we've we have a Europe group which focuses on again governance and structure our idea simply being that Europe is sort of like a half-built house we've got a center in some ways you have a currency but you don't have a fiscal or financing center you've got a administration Brussels that's quite removed from citizens around Europe so Europe is almost opposite case of California which we think not enough citizens involvement not enough democracy and then we've got a global project which focuses on on g20 the idea being that g20 today is sort of the forum where the the old powers and the new powers get together and work on or you know all these large issues but we feel is not necessarily that functional because it's it's it's a yearly meet with a roving presidency and we're all twenty members have two unanimous unanimously agree so we try to interact with eg 22 hopefully make some of the aspects of g20 more effective or even propose some reforms as to how their work thank you all governing systems today from China to the u.s. to Europe are experiencing disequilibrium because of the combined impact of globalization and rapid technological advance we are in the midst of a great transition from american-led globalization which we call globalization one point o to what we call globalization 2 point 0 due to the rise of the rest the emerging economies thanks to the convergence of patterns of growth in the spread of technology the emerging economies from China to Turkey to Brazil are leveling the playing field far from becoming a flat world however economic strength engenders cultural and political self-assertion witnessed the neo-confucian cast of China the neo Ottoman cast of Turkey the world's two fastest growing economies thus the new economic and technological convergence is taking place has also given birth to a new divergence globalization 2.0 is above all an interdependence of plural identities as diversity grows among cultures and nations it is also growing within societies because of the D massification of standardized industrial society into ever more plural niches identities digital tribes because of the decentralising impact of information technologies especially social media greater diversity along with cultural and political awakening is part and parcel of this transition underway from Tahrir Square in Egypt to the indignados in Spain the Tea Party the United States Catalonia even the villagers of Wakhan in China people everywhere are demanding a meaningful participation in the way their lives are governed this presents a double challenge to governance to accommodate the demand for participation power must be devolved downward toward the grassroots at the same time because of the interdependence I described greater consensus building institutional capacity such as associated with meritocratic type of governments such as Singapore to some extent China is required to capably manage the systemic links of interdependence and the greater complexity of diversity the failure to find an institutional response to this double challenge will result in a crisis of legitimacy for all governing systems either because of the failure to produce inclusive growth and employment or because of a democratic deficit that shuts out diverse voices will undermine effective consent so when we talk about intelligent governance we talk about devolve involved and decision division is its the operating system that we propose that will reconcile knowledgeable democracy and accountable meritocracy what we do then is engage in an exercise of political imagination by designing a template of howland how intelligent government governance might work institutionally then we review how in the various projects Nicholas described California Europe at the g20 level how these ideas might be implemented in a practical way how might they be other principles might be molded to practice since every operating system is at a different state of disequilibrium they have to move in different directions so for example as we will discuss in California or the United States you need more consensus building institutions with the power to create unity of purpose and long-term implementation of policies in China obviously you need much more democratic accountability transparent see in rule of law in Europe you have the European Commission which is a quasi meritocratic institution but as we all know here at lacks democratic legitimacy so this is not a one model fits all we'll be talking about states of disequilibrium across different governing systems all which have to recalibrate because of the global transition under way we focus on China and the US as the core systems of the global order not as literal alternatives but as a metaphor to help identify the trade-offs between the popular sovereignty of democracy and the long-term horizon and meritocratic qualities associated with Chinese governance China continues to adhere to the centuries-long attributes of its institutional civilization rooted in rule by expertise and experience of tested elites true to its no party Confucian roots China today operates under one party system in which consensus is reached through internal competition based on performance instead of external competition where different constituencies of the body politic are mobilized against each other once consensus is reached this enables a greater unity of purpose in the effective long-term implementation of policies the u.s. of course is the largest and most dynamic example of one-person one-vote democracy within the u.s. we focus on california since it carries the idea furthest through direct democracy of the initiative process which nicolas mentioned where voters can make laws and change the constitution directly as is often the case the extreme reveals the essence and california most exposes the problems of democracy taken to the extreme now of course there are other institutional arrangements of democracy the Westminster system here in Britain or the more consensus capacity that exists say for example in the Scandinavian countries but we focus on these two systems because they're really the pole systems the book ends of the world order and how they govern themselves will shape the future of the world order 35 years ago California Governor Jerry Brown he's governor again now as most people may know here and he was governor back in the 70s Governor Brown and I went to China 35 years ago in those days it was a backward country course just barely out of the Cultural Revolution people barely able to feed themselves everyone still rode bicycles in Beijing and Shanghai the Three Gorges Dam was just the ground was just being broke for three gorges dam and the Shenzhen and Pearl River Delta was now the factory the world was not more than a village everyone knows what has happened since then 400 million people had been lifted out of poverty high-speed rail connects mega cities with state-of-the-art Subway's underneath shanghai schools test the best globally and of course china is the second largest economy in the world in those same 35 years california the bellwether state that once dreamed of building a society as magnificent as its landscape has ended up with mountains of debt d+ schools spending more on prisons and education and an infrastructure that's so crumbling that china puts it to shame now of course china is a developing country the United States is advanced economy particularly California but we ask what could we learn from these two experiences over 35 years now despite China's well known problems corruption extensive corruption lack of rule of law freedom of expression it was clear to us at the modern meritocratic elements of its Mandarin a at the heart of its nominally communist system with his capacity to create unity of purpose and long-term institutional execution of policies had presided over the single most impressive alleviation of poverty in history it was equally clear that despite being the birthplace of Apple Google and Facebook California's public space had deteriorated because its democracy had become dysfunctional captured by short-term special interests political culture China's system is not self correcting without major reform as the ones I mentioned rule of law getting rid of corruption more democratic feedback and accountability more transparency the unconventional observation in our book is at democracy in the u.s. especially as it is practice is no more self-correcting than financial markets despite one-person one-vote elections without reforms that strengthen consensus building institutions with a long-term horizon insulated from the red politics and adversarial fights a special interest and short-term mentality of its voters in short China needs to lighten up the United States needs to tighten up now three reasons we argue why the self correction of democracy is a challenge first we no longer live in an industrial democracy but a consumer democracy in a democracy people get what they want in a consumer democracy they get what they want when they want it which is now we live now in a kind of diet coke culture where justice people want sweetness without calories they want consumption without savings infrastructure and education without taxes the same California voter that resists paying fifty dollars for a vehicle license fee to pay for police and fire will spend several hundred dollars in the latest iPhone technology the driving ethic consumer democracy invites populism that can't be paid for it is easy to see from this dynamic how self-interest of the immediate gratification of voters results in exuberant bubbles mountains of debt and fiscal crisis to go against the grain requires extraordinary leadership and comes at a high political price because good policy tends to be bad politics we were just with Gerhard schröder in Germany Gerhard schröder is agenda 2010 reforms are a good example of this problem as shorter himself says in frustration the result of structural reforms which he put in place on labor flexibility pensions welfare new investment in R&D can take a decade or more to reveal their impacts but elections take place immediately and reform measures are always unpopular so the German public removed him from office and now 12 years later after he introduced the measures Germany is the strongest and most competitive economy in Europe and in some ways in the world just as financial markets mispriced the bonds of Greece Italy in Spain over the past several years based on German economic strength so to democracy mispriced the value of Schroeder's reforms the last few weeks Obama President Obama sat down with some historians and they asked him what's the most frustrating thing that you faced being president the United days Obama says the inability to get people to think long term it's hard to make a case for solutions to problems when you're not going to feel either the problem or the solution but you have to go to the voter anyway now second reason deliberative institutions that enlarge the public view have withered and been overtaken by partisan rancor and the narrow short term horizon of the voting public the resulting gridlock and inability to find consensus has paralyzed governance we already see halting efforts to respond to this with meritocratic type of solutions in the US because of the fiscal gridlock which Obama faces now even after the election same thing as before last year when there was gridlock over the budget the US Congress set up a supercommittee because they couldn't get it they couldn't respond to they couldn't figure out a plan to cut the the long deficit the long-term deficit either by tax increasing tax revenues or cuts so they set up a supercommittee of the wise and the smartest guys in the Congress take them out of the political arena and say let's come to a solution well so far that has failed and I'm sure the US Congress have tried again now there's a growing recognition that when deliberative bodies in democracies wither the seeming rationality of short-term fixes and ballot at the ballot box can result in wholesale problems as I mentioned a rational exuberance mounting debts fiscal crisis in California we ended up with the unintended consequence of spending as I mentioned more on prisons and higher education after as a series of initiatives that on their own made a whole lot of sense cutting property taxes because they were too high for old old people living in their homes or getting tough on crime in California the uncover nobility problem is that as result of unliberated democracy through initiatives ballot box mandates by citizens have locked in spending and locked out revenues the prime example of this is was a initiative past several years ago called three strikes you're out if you commit three felonies even if the third felony is dealing gasoline from a gas station you're automatically sentenced to 25 years in prison so when the voter went into the ballot box this was a very rational thing we need get tough on crime and put those prisoners away on the other hand the same public didn't want to vote any more taxes to build prisons as a result this earlier this year the US supreme court ordered California to released 36,000 felons because of human rights violations in California prisons because of overcrowding this is not surprising we the poll was done a couple of weeks ago in California are leading up to this current election we just had yesterday over the tough budget choices and the first question was who should make the tough budget choices the gov the elected officials the governor and the legislature or the public only ten percent said the governor legislature that everyone eighty percent said the public then the next question was to the same public to the same people being polled what is the greatest source of revenue for the state and what's the greatest expenditure and the same people didn't know either answer either question the answer is K through 12 education in case you get polled k through 12 education on the one hand and income tax on the other hand francis fukuyama has argued that democracy in the US as well as in many other places has decayed into a veto cracy veto aqua see like democracy veto veto cracy but this he means the general will and long-term fiscal health of the system have been subverted by special interest lobbies and the short-term mentality of ideologically rigid or narrowly focused constituencies these organized groups from teachers unions to financial corporations have amassed the clout to veto whatever threatens our hold on government and its spoils witness the inability of president obama to make any major changes in financial regulation after the crash and 2008 these veto empowered organizations accrete to the system like barnacles and anchor it to the past the votes of the diaspora of unorganized citizens are thus steeply discounted if not meaningless a vote for democracy in this decayed system is in a sense a vote for the past because as a vote for the best at interest of the present that over the years have staked their claims on the system it is a system again almost guaranteed to generate debts and deficits while blocking any change to the status quo in conclusion we are not of course making the case that china is a better system or us a better system and China should adopt multi-party democracy in the West should become Confucian of course not what we are doing again is using these core systems at a meta as a metaphor to identify the trade-offs required for good governance in our view the best system of governance would be a balance between the long-term horizon knowledge-based and consensus forming attributes of meritocracy with accountability of popular sovereignty further we argue that this combination of knowledgeable democracy and the countable meritocracy is not far from the vision of the American Founding Fathers who design institutions to ward off both monarch and mob every system needs circuit breakers to correct disequilibrium financial markets need them the correct exuberant bubbles and imbalances meritocracy xand mandarin eights need accountability so two one-person one-vote democracies need non partisan deliberative institutions with a long-term horizon rooted in popular sovereignty and legitimated by popular sovereignty but insulated from direct electoral politics democracy by its nature generates contention dis consensus and diversity the challenge is to be able to govern it effectively thank you very much you

43 thoughts on “How to Govern Intelligently in the 21st Century – Nicholas Berggruen

  1. False premise. The question is not 'how can someone or some people rule over their fellow people the most intelligently?'. It is 'how can people co-operate to organise their society the most fairly and efficiently?'. The most intelligent way to govern is not at all. Power must be decentralised, democracy must be direct and plentiful.

  2. You know, most anarchists are against capitalism and 'survival of the fittest', 'everyone for themselves'. The 'libertarians' (word stolen from anarchists) enter and say that freedom means being ruled by a corporation.

  3. Equating California's current problems with California's direct democratic ballot is too simplistic. To the extent direct democracy is to blame, it's due in large portion to the poor American democratic culture which is intentionally distracted from statecraft, outside influences (e.g. the LDS Church's $200M PR campaign to back Prop 8), PR from lobbyists (such as the Hollywood lobby), etc. Add this to partisan gridlock in Sacramento and boom, you get a failed state. We must fix *all* of these.

  4. the public should be better educated on the subjects i dont see this shit on tv and the news barely conveys any important information any more

  5. "A vote for democracy in this decayed system is in a sense a vote for the past because it's a vote for the vested interest of the present that over the years have staked their claims on the system." Well said.

  6. This talk is more of academic in nature. By comparing California and China, the gives insights about the perils of democracy and emphasis the need for adopting meaningful meritocracy.

  7. Wait–is government's job to provide employment?

    about in minute 6, and also the American politicians, talk about creating jobs. But in a decentralized world, how can a hierarchical government do that?

  8. Western democracy: no politics; shed loads of government. Nations should have two governments, e.g. House of Lords to legislate 20 year policies, and the Commons to jerk their knees about.

  9. no Rockefeller were able to lower his price because he shipped it in tankers not barrels, we still measure oil in barrels but its shipped in tankers now. like i said intentions are irrelevant as you cannot prove it. society is just a conceptual label, unless you define it has a bunch of people then it doesn't exist. if corporations are not people then what is it? a deity like figure? corporations are people too, and I don't favor the rich or the poor, I favor individual favors 4anyone

  10. Of course Standard Oil lowered prices – since the market collapsed. His intentions were never disputed, and they were not driven by the good for the common people, they were driven by keeping his dominating position. Of course society exists – and not just in theory but in reality. And corporations are not people or should have more rights than people. Yes, I do put the middle class above other parts of society – unlike you who seem to favor the rich – so they can get richer and richer

  11. what do you mean? the fact that he lowered the price of oil tremendously is just a matter of a historical fact, his intentions are irrelevant because, well you can never proof someone's real intention. anti trust laws: what is fair is just a subjective judgement, everyone has their diff opinion on what is fair. regarding your last point – society does not exist as 1, what you are saying is just a group of people is more important than another group. personally I don't favor preferential policies

  12. if his intentions were irrelevant you then cannot say he did lower the oil prices, so the poor could see in the dark! That the poor had cheaper oil was just a by product of his underselling the competition. Well, of course anti trust law work – if they are smart. They don't restrict competition – they make it fairer and give a plain field for all. We need smart regulations, since this is part of defending liberties – maybe not the liberties of corporations but of the society as a whole….

  13. problems gets fixed through natural progression/human beings thinking and coming up with better ideas, not by simply passing laws and try to shape a perfect world.

  14. his intentions were irrelevant, the fact oil became cheaper and poor people could actually see in dark is enough. &if you study the anti-trust laws they do nothing to protect the consumers, it only restricts competition, but then it is just one of those "dumb regulation" you might agree with. regulations: that is mentality i was talking about – problem exists because lack of regulations/laws. for me that is the glass is half empty vision. For me the glass is always half full.

  15. Rockefeller was indeed one of the biggest philanthropists of his time – after he built up the biggest monopole in history which led to the anti-trust laws. He did NOT make the oil cheaper for the poor to enjoy it. He made it cheaper to break competition. A modern society is a much more complex society which then again require more complex laws and regulations – 100 years no one knew about lead in toys or about clean water – so this requires more regulations – not less – but smart regulations…

  16. Rockefeller did more for humanity than politicians can ever hope for – lowered the cost for oil, allowing poor people to be able to see at night etc. regarding solutions: that is what i meant, the idea that there are problems because lack of laws/legislation, an utopian-like world is possible by simply passing laws. regarding budgets: totally agree, and i believe it is the mentality of looking for "solutions" through laws/legislation/government that is root of these problems.

  17. classical liberalism in the last 100 years was conditions like under Carnegie, Rockefeller or Chase. I just called it solutions in order to give it a name to what you called "what worked". "Solutions" could be a law, an amendment, a regulation or simply values. I believe in good values, but if you look at the American Budget than you see that the by far biggest parts are defense and social security – and it of course was the Rep. who blew them up. Defense under Reagan – Medicare under Bush

  18. there was no "solution", only the progressive want "solution", what worked was classical liberalism, it is not a "solution", it merely says that the main role of the government is to protect life property and liberty. blame the lost of purchasing dollar on the Fed and Nixon, where he infamously said we are all keynesians now. also the top 1%, 10% and whatnot are not the same people over time, people move in and out of those income brackets.

  19. Since the times of Ronald Reagan, who led the US twice really close to WWIII, the American middle class is in decline, wages have lost purchasing power but 80% of the newly created wealth went to the top 3% – Should not the middle class be the part of the society which benefits most from how taxation and regulations are set up?

  20. It is not very smart to apply solutions which worked a century ago for today's and tomorrow's problems. Unless we accept the same working conditions, the same life expectancy and the same unstable society as America had 100 years ago. Given one thinks a 6 day week, slavery, a life expectancy of 38, social injustice are things which should not be part of a modern fair society. But it is good to see that the conservatives are NOT responsible for this mess! Yeah right, and gravity expires tomorrow

  21. nope it is the progressive's vision of a social Utopia, for almost a century USA have been replacing what has worked with what sounded good.

  22. your founding fathers did not create a government to redistribute wealth, they created one to protect life, property and liberty.

  23. No – it was not the kind of mentality which lead to a 16 trillion debt. It was cutting taxes for the rich, putting 3 wars on the credit card, creating several bubbles from which only the rich profited from and the society had to pay for (bailouts). This administration is STILL just paying for the deepest depression since the 30's. It is like I crash your car, give you the keys back and blame YOU for the high repair costs the next day!

  24. But a citizen needs information & time to think. If we have voters instead of citizens then you'll have wrong answers to the problems.
    Why don't you read about Athenian Democracy when there were citizens?
    It's time not to work so much for our own bellies. Working less, we have more time to think, more time to participate. Being a citizen is not easy but is mandatory for having a Democratic regime.

  25. Do you not see the idea of governance has earned it's inevitable approaching death.
    Has it not been sufficiently well displayed?
    It was never needed possible nor tenable prior to it's practice.
    Why must you desire it persist, be in need of? unaturally so?
    How dare you feign understanding of and make claim to being possessed of intelligence.

  26. Those people in Florida who waited 9 hours on a Sunday were doing it because that was the only day they appointed for absentee votes. It is usually spread across 3 weekends, but the Republican governor (or was it a mayor) was trying to suppress votes.

    People want to vote, but the process needs to be streamlined, not complicated (in this case to suppress votes).

  27. Germany has the lowest budget on education and lowest chance of social advancement in Europe! Germany more and more decays to become a second USA where people work 40-80h a week and still can't feed their family properly – but when you comitted the crime making this shitty laws for the rich, and don't have to suffer from them personally then you have to deem them good – I miss the old days – where a bloody revolution now then set those greedy irresponisble monsters straight…

  28. Ha, again a statement of a far from reality economist – German Agenda 2010 Reform failed the people – poverty rate is higher then ever, including child poverty; the rich get richer paying lowest tax rates since decades (10% of the people control 65% of all the country's finances – 60% of the people only control 1% of the the wealth!) – Schröder whored himself out to big industry like no german politician before – the common man had to pay for his ill fated plans an personal greedy ambitions.

  29. "And have the elderly starve?"
    What, you don't care about the elderly? Is your only method to help people who are truly needy to rob your neighbor at gunpoint?
    Spend your own money!
    I don't care how good you think your rationalization is, the ends do NOT justify the means.

  30. The government doesn't provide anything for free or need permission. At least all involvement with a company is voluntary. they don't send gunman to your house to ensure their demands are met.

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