get there, a process for washington can be engaged and the states can be engage. were elected leaders can step out of their shells and be proactive in the engagement of business, where they can reach out to ceos like myself and many of my colleagues who are more than ready to do it as you saw at the business council last week, governor rendell. and history will show whenever that happens, that, in fact, good things occur. i am reminded of president kennedy's call when he says we choose to go to the moon in this decade and do other things, he said not because they are easy, but because they are hard. the response of the call was extraordinary, but engaging business to that call, president kennedy unleashed innovation like the country had never seen in the modern era. from that, from the space program, from the r&d that the government supported at the time came innovations like solar panels, ultrasound scanners, surgical technology, medical

imaging, the computing age was born in that era. .. >> if we don't recognize them right now by refusing to get in the game, we will go subscale. we are choosing by not choosing to go beyond the tipping point. no choice is not an option. manufacturing in this country at 9% of the gdp will go subscale. it'll happen in your careers. in this next 10-15 years, it

will happen. and when it happens and when the hubs get created elsewhere whether it be china or india or elsewhere, this country will lose. it'll lose innovation, and it won't be overnight. it'll be an atrophy. believe me, 20 years from now when china becomes that largest economy in the world, when they have the competitive corporations around the world, global brands on a global scale, when they have the best intellectual property generation and own all the ip and own all the patents, when they have the ability to have the best human capital in the world, the best science-based universities in the world, then we as a country may have to settle for being the very best in services that we can be. and apart from, you know, hollywood and selling entertainment and the music industry and the occasional global nba game that they may be interested in, then our faith

will be to serve -- our fate will be to serve china and india. and maybe that's okay. i'm calling for it to be a national strategy to decide if it's okay. because, you see, at dow my business isn't to sell movies and to sell nba games. our business is to sell value. we want america to exceed -- succeed. we want america to make things. we want to open plants and factories in pennsylvania and michigan. we want to open r&d labs alongside them. we want to put business centers that are creative and designed to next generation technologies whether it be in alternative energy. we have a huge vested interest in this country. our company has been in the country, was born here in 1897 by a 21-year-old entrepreneur from ohio. this country is in our dna. we have enormous assets here, we have great people here. we have incredible partnerships.

we also love the country. and i'm not embarrassed to say that. we should feel passionate for the freedom model that encourages all of our nationalities to be the very best we can be. it's the liberation of the human spirit. what other country has done that in human history? this country deserves a better decision. than the one we're making by default. if we can capture that freedom and can imagination that we have and build out a national policy to create the next advanced manufacturing sector that i know this -- then i know this country will win. it has to happen. it can happen, and it has to happen, and we have to make the tough choices. i'm very engaged, as the governor said, with the members of congress, with the administration. ceos these days are spending an awful lot of time in this national conversation, especially those in the national manufacturing sector whether

you're from boeing, general electric or dow. and we're out there talking to our politicians to be their partners. i'm hopeful that the first steps that have been made, certainly this year and late last year, are the right steps. in all honesty, it's essential that we work together. but you have a role. you are critical to this. you are, in fact, the reason i'm speaking to an audience like this, the most important part of the decision. because, you see, it's not a policy discussion that ends up being the topic. it's a cultural one. it's a way of thinking. it's a wake-up call. it's a clarion call to young people, to highly-educated young people like you who have chosen to further yourselves, to think through where the world is going, to look around two corners, not one. to play three-dimensional chess. and, yes, to beat watson. i mean, to basically think

beyond your comfort zone. three decades ago this country was centralized around manufacturing and high technology. two decades ago it centralized itself around information technology and the internet, if you like. and in the last decade or two for reasons that i struggle with, and i promised you i'd return to this, we've centralized ourselves around young people like you just going to the world of financial services. that that's your main job. that, in fact, to supply capital, supply credit and take a cut off the top is a fantastic pursuit. i don't want to belittle any of it. i need capital, i need credit. i need it efficiently allocated to my sector. i need it whenever i need it. it has to be there. but who said that was a more important job than the job of creating value? what made that true? what happened? why is, suddenly, the middleman the only man?

what made the allocation of capital the ultimate service sector? well, at the risk of losing my banking, i've got to tell you i'm not sure. all i can tell you is if that's the only career you choose, god bless you. i think it's a noble job, and someones has to do it. someone has to do it. but you will serve others for the rest of your life. and that's fine. and, ultimately, you'll be serving the companies that are based in china from here. i'm on the board of citigroup and ibm. i already know what's going on. okay? the allocation of capital will ultimately be done by the owners of capital. who are the owners of capital? last time i checked on the trade deficit and the current account deficit and the fiscal deficit and the debt, ain't us. it's china.

so what's hong kong? what's shanghai? what's these new emerging financial centers in the far east? they will end up being the centers of gravity. this isn't the invasion of japan that we wrote about in the '80s. the japanese weren't big enough, didn't scale up enough and didn't try. they valued manufacturing and valued it so much that they built factories here in the united states to protect their factories back in japan. they kept r&d in japan. they had a national manufacturing strategy and, by the way, you know? it isn't the reason they're crippled. they can't come to terms with the domestic sector that has a high savings rate, doesn't consume very much and has overinflated real estate. sounds like california to me. so i wouldn't poke my finger at japan. i think japan's just stuck in their particular rut. the chinese, they know how to manage money. and they're coming. my point is, not to convince you

not to go to wall street, my point is to be the brazen entrepreneur and the courageous leader i know you to be. to test the edges of your comfort zone, to think through where value gets created and really work through whether you want to be in the middle of policy generation to take the country to this next level or whether you want to be serving that. to seriously consider as you do your course work here at wharton how value groups get created, how innovation occurs and the central piece of manufacturing to both of those things. i think if you thought about that and thought about the name of this hole and thought about a guy called jon huntsman sr. and thought about his start, he started working at dow. jon huntsman sr. started working at dow, and in our corporate culture back then he decided to take the clam shells mcdonald's used to have their hamburgers in and says i can do

that with egg cartons. he couldn't get agreement from the corporate leaders at the time -- wasn't me -- in midland, michigan, to try that out. so he went and did it on his own. he bought an old shell oil plant, and today he employs 11,000 people with a multiplier effect that i talked about earlier and runs a $12 billion corporation, he and his children. his son now runs it. i've got to tell you, what a great role model right here at wharton. so in conclusion i just want to say thank you for listening to me. i hope my words will cause you to at least think differently, to take a look at something from a different angle. i hope that you're part of what i said to help usher in a golden age of manufacturing. i will tell you it'll be the most passionate, fun thing you end up doing. i could tell you that you'll have a rewarding career no matter what you do, but a career that creates a sustainable

future solving world challenges at the heart of corporate responsibility for the modern era in the golden age of manufacturing sounds like a noble pursuit to me. thanks very much for listening to me, and i know jerry's going to turn over some questions. thanks very much. [applause] thank you. >> thank you. this was terrific. while we open it, now, to questions. but before we do it, i've got a question to you. how many of you would consider after what we just heard a career in advanced manufacturingsome can i see a show -- manufacturing? can i see a show of hands? one, two, three -- no, that's impressive. typically, wharton has 70% or so

consulting and finance. >> i know. >> that's incredible. thank you. the floor is yours, questions? >> okay. >> yes, please. a mic is coming. >> while that mic comes, there's a book outside for you guys if you have nothing to read in your coursework. [laughter] it's a very easy read, so it's available for you outside if you choose to leave early. go ahead. >> first of all -- >> you're on. >> first of all, thank you for coming here. and if i may say, we'd love to see you around our campus maybe teaching a manufacturing course. [laughter] >> there you go. [laughter] >> my question to you is, i guess it's two questions. first is regarding your comments about the future of manufacturing in the u.s. don't you think it's a bit too

late? i mean, most engineers are not even, like, most students in america, high school students don't aspire to become engineers, scientists and kind of our students are globally behind china, japan and other countries. and the second question is a bit more controversial, but, um, you do mention that you're seeing your presence abroad increase. and how do you respond to criticism that it's because you're able to cut corp.ers, cut costs at the risk of environmental disasters like the one in india that dow's kind of famous for? how do you respond to that criticism? and as a business leader in manufacturing, what is your view about the environment, and how do you create that in your dna and your company going forward? >> thank you. um, we're very proud of many

statistics. last year we won the robert w. campbell award for environmental health and safety. if anyone, has anyone heard of that award? has someone heard of the ballridge award in quality? okay, so if you study, if you had a course in manufacturing here, these would be terms that you'd know. the campbell award is given to the world's best corporation in environmental health and safety management. first chemical company ever to win it. today something -- one of the reasons i want an east coast presence is to reverse engineer something that's built in you. you think dupont's fantastic, and you don't know who dow is, and i'm going to change that. i'm going to make sure you know it. why? because we are the safest company, and we are by far safer than dupont even though dupont has the aura of that. they're a 200-year-old company. we're only 100 years old, so we have 100 years to catch up in terms of what the east coast thinks. that's one thing that was very important to us, to bring dow's

mantra out here. what is our mantra? we have three values: integrity, respect for people, protecting our planet. and we live it. everything we do, every business strategy that comes to us at the top has an environment, health and safety checkpoint. everything that gets approved is to the highest standard. we export the highest standards wherever they come from. sometimes they're from germany. sometimes they're there the unite. united states. doesn't matter. we invest in the sustainability with our 2015 sustainability goals. in the last ten years those goals were kyoto-compliant. the products we make save five times the amount of co2 compared to what we generate in making those products. we have invented a solar panel that makes solar available for the masses launched in july of this year, coming to a home depot near you. it takes away the panel, puts the photovoltaic into the shingle so when you repair or build a roof in a new home, it's

automatically solar generated. in fact, we've already invented the net zero home which is being built in five locations around the home. it's a home that generates power for an average family of four using appliances, doing the things you do in your home, and, of course, if you have a plug-in hybrid car, it's even better. when you're not using all this stuff, the stuff dose to the grid -- goes to the grid. we're proposing an incentive to convert homes so every home in america, okay, becomes a power generator. imagine that vision. how about this? the average home due to the lack of a national building standard in the last ten years in the united states has been built with a half mile of cracks in it. a half mile of cracks. we're hating the environment depending on which part of the country you're in. that's a lack of policies. okay. so the heart of your question, by the way, that was union carbide, dow had nothing to do

with it. we're a great corporate citizen, and india included. it's a national tragedy that we have been very much pushing the indian government to come up with a solution for it. they've accepted the $380 million from union carbide that has never been seen. so i would say go talk to india on that one. at dow we will always export the best of standards, and most of them come from the united states. so when you look at what we have to do in this country to reverse the point you make on manufacturing, it's not too late. that's the whole point of my talk in this book. it's not too late. k-12 is fairly broken at the public school level. 90% of chemistry teachers in america have never learned chemistry. think about it. when did you last -- did any of you study chemistry at school? put your hands up. keep your hands up if you loved it. yeah. actually bigger than i thought. maybe there's hope -- >> there is hope. >> we do recruit at wharton, by

the way. i think we're bringing in if two mbas this year from the school. >> and incidentally, we do have a program in operations. so we changed the name. we don't call it manufacturing anymore. >> ah, see, you learn fast. but, no, we really do believe the tipping point that i made is overcomeable, but it's going to need a national reaction start anything education. starting salary of a chemical engineer today is? >> [inaudible] >> 120. this' shortage. that's shortage. last time i checked that's a good market, guys. you know? demand's high, supply's short. where do you think engineers go? do you think they go to chemical companies? they go to all sorts of -- of course they go to finance, yes. [laughter] that's a whole other topic. there's still enough critical mass. i'm not worried that this is an

overnight point. but, you see, what i've done for the last six or seven years is make all these points, and they've gone nowhere. so, obviously, you'd think that maybe there's no discussion. but then you go to ceo land, and you talk to the boeings and the whirlpools, and they say exactly the same thing. why haven't we developed this? well, those guys in washington will never get there, and as soon as we get them there, they get elected out, and they're last. you see, that's the problem we have. we don't have tenure. ceos too. what's the average tenure of a ceo in america today? 3.2 years. i'm at seven. i've defied gravity. [laughter] i don't want to curse myself there. it's not easy to think long term and deliver short term, by the

way, guys. you will face that them ma in everything -- dilemma in everything you do. to deliver long term and deliver short term. yes. >> lloyd? it's on. >> yes. you mentioned the 17% disadvantage right off the get go with japan being -- >> next. >> is there any one single thing that, you know, you could -- [inaudible] that would make a substantial debt in that, or is it just -- >> there's five buckets. one of my other day jobs is i'm the vice chair at business round table, and the business round table is an aggregation of fortune 500 ceos in the u.s. and we deliver to the obama administration something called a road map for growth, happy to send the faculty a copy, which talks about the five buckets that it's pieces of each bucket.

now, if you go to a sector, there's one that influences one sector more than others. for my company it's energy, lack of an energy policy. i mean, the uncertainty of energy, i'll just give you my numbers to see how it impacts me. i consume 850,000 barrels of oil a day equivalent at dow. okay? so that's, like, a country. that in dollar terms depending on the price of oil, so let's take today's price of oil, i don't know whatever it is today, but with libya going on let's say $80 a barrel rg right? that, basically, means my input costs are around 20, $25 billion. if i guide that by four to make it -- divide that by four, that's $6 billion. $6 billion after tax mean earnings per share impact of a 10% variation, 6 billion so 600 million is roughly a dollar a share. my earnings per quarter are running around 80 centss a share. i have no predictability. i have no way to predict my

earnings. so i have this volatility going on. now, i'm not saying the u.s. can solve all markets, but how about a national strategy to replace imimportanted oil. wouldn't that be good? why haven't we developed this yet? why aren't we putting this together as sensible human beings? there's only five things we need to do. i already talked about one of them, building standards. do you know how much oil of imported policy goes into waste? okay? between buildings, cars, okay, and consumption of all sorts? i mean, we could take off half the imports if we adopted national standards on those three things. so why haven't they occurred? i wish the governor was here, he'd have a dependent on this. because sector -- comment on this. because sectors fight. lobby groups and, you know, congress people protecting this lobby. why are we taking ethanol from

corn? i tear my hair out on that one. [laughter] it is the most nonsensical use of carbohydrate that god gave -- i mean, god could not have done this to us, okay? is. [laughter] i don't know where your religion lies. so just that alone, national energy policy. but there's regulatory reform, tax -- don't get me started on taxes. our tax codes, which could fill this room, the loopholes in them. i better get to another question, or i'm going to go on on this one. >> yes, please. >> um, hi, mr. liveris. i'm representing the payne international association today. you mentioned many times that we are facing the threat coming from from china, and you emphasized that we need to really bring together the public sector and the private sector together to work on the fundamental growth of the country. and it's funny that you also

mentioned for one state -- [inaudible] can last nine months and another can last nine days. and my question for you is that what's the next step the country should take in order to make the states join the forces and effort together to help our private sector to catch up with the countries like china and other developing countries? thank you. >> it's a great question. and the governor didn't mention why i had him down at business council. the whole two days of meetings, actually it was called state of the states. and it's right at the heart of your question which is exactly the question you're asking, but we're asking our governors and next governors. we're saying why haven't we as a country gotten the states together? the because half the topic is actually in the states. you know, i may have answered federally and, yes, we need leadership out of the administration, out of the congressmen and women. but the states actually own half

of this. and so it takes courage. i don't know where your politics lie, but what's going on in many new jersey and wisconsin right now -- in new jersey and wisconsin right now is a fascinating development. it's beginning to address, you know, some of the things the more progressive states have already addressed like texas. if you asked me where would i go and invest preferentially now that the governor's gone, i'd go to texas every time. texas has figured out how to be business-friendly but not hurt the environment, to bring the best standards there, to cut down the procedures and the bureaucrats. let's face it, guys, when the public sector employee now earns more than the average private sector employee, you know you've gotten too much government. did you know that? that the average public sector employee makes more than the average private sector employee? so we've tilted. >> [inaudible] i'm not sure that's -- >> yes, it is. yeah. i've got it on a web site. there's a whole web site based

on this. average public sector, average private sector. >> [inaudible] >> [inaudible] >> yes, please. the mic is coming. >> [inaudible] talking about predictability as well as environmental sustainability, what do you think of the potential of deriving -- [inaudible] originally? from plant-based or algae-based resources? >> yes, so petroleum in the age of gas which created all these modern products that we're using is not yet on a decline. it's still, still -- it's acetoning. as alternatives of sort. but, unfortunately, chemistry fights you because the yields on converting carbohydrates because of that oxygen in there versus -- i'm getting probably too technical here, but straight chain carbons, the yields are

much different, so you have to go the other direction. you have to reverse engineer. of you have to, basically, say what am i solving for? and, really, the world of nanotechnology is going to be the world where we'll solve some of this. so we can get materials from metals, for example. the periodic table has how many elements in it? wrong class, right? 119. 118, excuse me. 118. we at dow use 119 because we say the human element is 119, that's why -- [laughter] sorry about that. that was a dow speak. 118 elements. but we truly, your question, we basically as a society use an abundance five or six of those elements, okay? and the consequence of that is we're very limited. so what we have to do as scientists is reverse engineer. some of the best hope for that is coming from another direction on your question to use plants as tact ris. factories, okay? not to take the carbohydrate and try to convert it to something,

but to actually engineer plants. now, that's got a whole policy front around it, so you've got red bio which is farm suit -- pharmaceuticals, green bio which is improving the plant in terms of pesticides, etc., and white bio is working on the output side. some of the early stuff that's coming out there, for example, healthy oils is more in the food chain. it's less on the materials side. it's difficult work because the yields are so difficult. so i think we're going to have to live the age of petroleum for a few more decades. until we work out an alternative. i think the best answer for us on the age of petroleum is to burn less of it. okay? i think that's where -- we'll go to the sun and wind and nuclear, hopefully, and when we have to burn hydrocarbons, burn gas. if we can do those four things and do the building standard thing and the efficiency, that

should take carbon emissions from the petroleum side, and that's the best hope. >> we have time for the last question. >> wow. um, hi. thank you so much for speaking. the only sector i haven't heard mentioned here is the third sector. philadelphia has a really thriving and successful not-for-profit education sector that has very profitably and successfully paired with business partners. philadelphia academy inc. comes to mind, a couple of the different science centers and the student success center that has partnered with the center here at the university of pennsylvania. what plans does dow have to partner with the third sector at pennsylvania, not just the first and second of government and business which you've already admitted has provided significant market failures in the realm of education? >> yeah. so legacy of roman hearts was already doing a lot of that. there are partnerships in the local communities. since we acquired them, we actually upped the ante on sustainable housing, so it's not

education-based, but it's a community-based program in south philly, for example, to help redesign roofs and preserve energy actually. i'm not familiar with anything on the education sector that's new that we've done since roman house was acquired. >> [inaudible] >> yep. we don't do large ngos. we do local schools. and so we're in 150 hometowns around the world, and we do local school districts. but i'll go follow up on that. i don't actually have a good answer for you on the ngo side. >> great. thank you, andrew, for joining us today. in addition to sending us your major assets, for coming here today and sharing your vision, your insight and primarily addressing a number of absolutely critical issues, and especially if you look in terms of the importance and potential of manufacturing, i love the term kind of the golden age of

manufacturing. um, and not only that you're suggesting it, but you're suggesting specific solutions how to get there. you also talk about the need to reinvent manufacturing to rethink manufacturing which, i think, is something that every one of us can take into account and think about. um, most importantly, what you're really suggesting here is the great role for individuals, every one of us here, in rethinking the challenge that you're suggesting for corporations and for the nation. i think the country central that you're suggesting is critical and, hopefully, people in washington are reading the book and are listening. raising the challenge that china suggests is a threat is very, very powerful. and especially when it's coming from someone who has major operation in china as well.

so we definitely have to develop a strategy both the national level and as corporations and as individuals how to deal with china. and i hope everyone here takes very seriously andrew's call and suggestion that everyone should visit china. and we do have, actually, study tours in china which you should take advantage of. most importantly, really, the fact that you really suggested here a way of challenging our mental -- [inaudible] this has been the core of what we are doing at sei center and primarily folking on how to you -- focusing on how do you challenge -- [inaudible] don't think about a or b, it is both. how do you achieve both of them? and in every area? so many thanks for joining us, enlightening us here. and your offer in addition to this, which you already offered us, is a role model of a

courageous leader who not only calls for change, but actually implements this. so thank you so much for joining us and stimulating us and enriching all of us. thank you. >> thank you. [applause] thank you, jerry. >> this afternoon watch three programs about the lives of three first ladies of the united states. at 2:15 eastern myra gutin details the life of the 41st first lady, barbara bush. and then at 3 barbara perry provides a glimpse into the life of jacqueline kennedy. at 4 p.m. eastern, a look at eleanor roosevelt by author maureen beasley. >> in about an hour, we're going to cover several thousand years of world history and touch every part of the planet. are you to roll? you ready to go on the journey? and this is a journey that as we touch all these places did

actually start from a family -- two family stories. and so if we could look at the world map, marina and i were in jerusalem in i reel visiting -- in israel visiting with my family. and i learned, i asked about the story of one of my aunts, a mysterious aunt of mine, a non-jewish woman who had married into our jewish family. and i wondered about her, what's the story about her? it turned out that her grandfather had been a serf in russia. did any of you remember what a serf is? hold on. you in the back row, could you hand this to him, and finish -- and -- >> um, i think it was a slave? >> a serf was very much like a slave. he was a person or a woman who

could be bought and sold with the land. so my aunt's grandfather was a serf, but he had invented a process for working with beet sugar that was so useful, he became so rich he bought his freedom. when we learned about that, we suddenly learned about a connection to marina's family. >> with so i had always known about my family's ekg to sugar -- connection to sugar because my great grand parents traveled from india across to guyana which is in south america, but it's considered part of the caribbean. and they came to cut, o work on -- to work on sugar plantations. so part of what fascinated us was what is this substance where someone in his family all the way in russia, a serf, and

someone in my family looking to get a better life over here in india and then over to the caribbean, what is this substance that could effect people from such different parts of the world? >> and before we traced that out, we want to ask you a question. how many of you think you might have sugar somewhere in your family background? so that's one, two, three -- oh, man. yes, yes. >> all right. let's -- what i'm going to do is i'm going to bring it out. i just want to hear from a couple of you where your family might have been from, okay? >> well, i think my family might have been in the caribbean. >> caribbean, okay. very good. >> absolutely. >> okay. >> i feel my family was either in the caribbean or in europe. >> okay. >> very good, both. >> okay. >> i think my family was either

in the caribbean or europe. >> okay. very good. anybody else here? >> actually, i know that my family was from the crib can, and that's where i get it from. >> get sugar. >> excellent. >> so if you have the caribbean in your background, you definitely have sugar in your background. but we believed that many more people have sugar in their background than they know. and we're about to take you, as i say, spinning around the world. and the subtitle of our book is "a story of magic, spice, slavery, freedom and science." and let's start out with magic. why might we relate sugar to magic? well, sugarcane, if we go back to the world map, originally was very first, you know, off at the edge on the far edge, we know that it was first grown in new guinea.

and it was, they grew sugarcane. have any of you seen sugarcane before? >> okay, good. >> have any of you ever tasted sugarcane? all right. all right. we know that, we do know that sugarcane was first grown in new guinea, and then it was brought up to india. and the reason we know that is there are prayers to the goddess durga where you would burn various offerings to the goddess. and one of the offerings that you burned was sugarcane. and we know that the original word in the ancient indian language of sanskrit for sugar was "that which brings sweetness to the people." but at a certain point the name for this substance changed. and the new name for it was

sharkara which means "gravel." can anybody guess why you might use a word that means gravel for sugarcane? or for sugar? this gentleman. >> um, you might use gravel because when you put it in your hand, it kind of like -- it came out like sand, and sand is like gravel. >> you're exactly right. originally, they had cane, but they had learned how to make cane into sugar. and this is one of the crucial things. sugar granules do not exist in nature. what exists in nature is the cane. we had to learn how to turn the cane into those little pieces of sugar. and we'll get to that, but before with we get to that -- before we get to that the question is, how did knowledge of sugarcane spread? how did people learn about this plant growing in new guinea,

this substance used in religion in india? be does anyone -- does anyone remember who might have brought knowledge of sugar across -- that back row there is great. i think the second guy there hasn't spoken yet. >> um, christopher columbus -- >> oh, no, you're ahead of us, buddy. you're ahead. we're way back. >> um, i think it's the, it spread because it went across the world, and i think china had it? >> yeah, but before china gets it there's someone who brings -- there's a woman here on the end, marina. >> um, i think it was, i think it was the slaves. >> that's later. any -- we're way back. we're in b.c., guys. we're way, way back. >> the australians? >> nope. no australians. >> ah. >> the greeks. >> yes. alexander the great. if any of you remember the

story, alexander the great is conquering across from greece. he's conquering across iran. he's conquering, he gets to the edge of india, and his troops say i won't go any further. i've gone as far as i'm going to go. but alexander is conquering, he has this hunger to know. alexander can never know enough. so he sends his friend in a boat saying, go explore india, find out stuff for me. and his friend comes back and talks about the reed that gives honey though there are no bees. now, why would you describe sugarcane as the reed that gives honey though there are no bees? >> because it was sweet? >> yes, and why else?

you'll get a chance. >> because the honey, bees usually produce the honey, and with sugarcane they didn't need the bees. >> right. because what they knew -- before people knew about sugarcane, how might they have sweetened their food? the what, what ways might people have used to sweeten their food? >> they would use mashed fruits and honey and sap from a maple tree? >> very good. you all may remember that in north america there were no bees, north and south america. they didn't have honey. so what they had is maple syrup, they had the agave cactus, and in the rest of the world they had honey. so we've had sugar used in magicaller ceremonies, we've had sugar, now, is spreading, people are starting to learn about it. >> but one thing we want to mention, when you say that they

used, let's say, honey or fruit is sugar or sweetness at time is not the way we think about it where you're going to have a chocolate bar or a cookie. it is just a taste. it is a spice. it is something you use in your meal to give it one of the flavors. >> you can watch this and other programs online at booktv.org. >> i'm going to ask you, the comanche and the story of quanah parker and indians in texas is just such a great story generally, it's one that we all grow up hearing, we see on movies, television, we read books about it. my sense is every book has an occasion, and so what was it for you to write this particular history at this particular time? >> um, it's a good question. about 12 years ago i read a wonderful book by walter prescott webb called "the great plains." and even though it was about the great plains, it was really

about texas mostly. and inside this book there was a chapter or even a subchapter about the comanches, and it put forth this premise that there was this enormous force sitting in the middle of the continent that determined how everything happened. and i'm a yankee. i'm going, what? wait a second. i mean, i might know a pequot or the odd algonquin, but i didn't know comanches at all. comanches that are something in john wayne movies was code for, uh-oh. [laughter] oh, we're in trouble now, that's a comanche arrow. so what happened was that's what set off my interest. and then i did all the normal things you would do if you're interested in comanches. beyond that, though, it was really about, i think, a yankee's love affair with the state of texas. when i was time bureau chief, i traveled all over the state, when i was a writer at texas monthly, i traveled all over the state. we all at texas monthly, we all

looked forward to getting assignments where you had to go to amarillo or lubbock. [laughter] i know that sounds strange, but it was true. [laughter] >> [inaudible] they love you equally. >> so it was a bit of just understanding that what the plains were and what a plains indian was. and to me it was all -- and i think a lot of that comes through the book, this kind of oh, wow, the yankee's learning some stuff about the idea. and i think that informs a lot of the book because none of this is normal to me. it was like, wow. >> up next on booktv, joseph new york, a former dean of the kennedy school of government at harvard university, talks about the changing nature of power in global affairs. this hourlong program was hosted by the center for new american security here in washington. >> let me tell you a couple of things about why i wrote this book and what i think it says to at least start the conversation.

the book summarizes work that i've been trying to do for 20 years or so about how do you understand power and america's position in the world. and it goes back to the book "bound to lead" which was published in 1990 which was a period when americans believed they were in decline. and in trying to answer why i didn't think the answer americans -- in trying to answer why i didn't think america was in decline, it was you do what you can to attract and persuade them besides coercing and paying them. and that, as they said, the term took off. but as we entered the 21st century, there was a bit of a reversion to more emphasis on hard power, thinking we could do more with coercion than we could.

and there is also a new dimension of what was going on in this power that was stimulated by the globalization and information revolution that wowr you're seeing. so trying to think about the work that i'd done in the past, i looked back 20 years, and i tried to look forward 20 years or so. what will power shifts look like in the 21st century? and, basically, i argue that globalization and information revolution are producing two big power shifts. one is a shift, if you want, from west to east. sometimes it's called the rise of asia. it should be more of the return of asia. i call that power transition the normal shift of power among states. it's also called the rise of the rest. we know a fair amount about that. the other is power diffusion which is the shift of power from

states, whether east or west, to non-state actors. that's a lot newer and a lot harder for us to wrap our minds around. and the chapter in the book that illustrates this is the chapter on cyber power. the idea that you can suddenly suddenly cross borders with electrons and do damage, and nobody knows whether you're a state or a non-state actor, that's really quite new, and we haven't thought through what that means. power, let me talk about each of those rather quickly, and then we'll have time to discuss what they mean in practice. um, power diffusion is a product of this extraordinary reduction in the costs of computing and communications. be you look at what happened to computing power in the last quarter of the 20th century, declined a thousandfold. the price of an automobile had declined as rapidly as the price

of computing, you could buy a car today for $5. anytime you have that dramatic reduction in the price of something, the barriers to entry go down. so now anybody can get into the game. in 1975 if you wanted to have instantaneous communications from washington to johannesburg to moscow and beijing, you could do it. but it was expensive, and you needed to be a government or a large corporation. today anybody has that capacity if they have the price of entry into an internet café. and there are more examples of what can give to illustrate this, but the important point is that not that governments are finished or that they're not the most important act to -- actorsn world politics. on the contrary, they are. but the stage is much more crowded. there are now many more participants on that stage than before. and information has, essentially, become so much more widespread that there are many more people able to play. egypt was a great example of this. if you look at the way we used

to think that you only had a choice between an autocrat and muslim extremist is the spectrum of participants in politics in the middle east, turns out there was a middle. information had filled in a middle. what's more, it had given them tools like twitter and facebook and so forth to coordinate. this is new. and as i said, when you talk about cyber, it's even more new in terms of our inability as yet to develop a full strategy in which we understand this. so power diffusion is one of the really big changes in the 21st century, and we're only beginning to wrap our minds around it. what it mean is we're going to have to have a much more subtle and sophisticated understanding of power and the strategies that that involves. classically, the mark of a great power as the great british historian taylor put it is the ability to prevail in war. now, the ability to prevail in

war is still important, but it's not just whose army wins, it's also whose story win. and that ability to mix those two, to have a military capacity but also a powerful narrative, is something that is very difficult to do. if you think only in hard power terms and don't think about soft power terms simultaneously, you're going to get your strategy wrong. you're going to have to think of how can you combine those two into smart power strategies? so next i think we're going to need a much more sophisticated understanding of power and the resources that put it, that create it in the 21st century than we have seen thus far. that's power diffusion, and i think we should come back to it in our conversation. let me say a couple word about power transition, the transition from states to other states. um, people talk about this as the rise of asia. it's really the return of asia.

in 1800 if you took a snapshot of the world, asia was more than half of the world's population and more than half the world's product. by 1900 it's still half the world' population, only 20% of the world's product. and what we're seeing now is what you might call return to normality. at some point in this century, asia will be half the world's population and half the world's product. it starts with japan in the late 20th century, goes on to korea, the so-called asian tigers, and now it's gone to china. but in the future it's going to move to india. this is a process which is important, ands it is affecting power. but it sometimes is summarized as the rise of china and the decline of the u.s. i think that's the wrong way to understand what's happening. first of all, i don't see the decline of the u.s. i had a piece in the "wall street journal" yesterday

arguing this, but it's -- there's a whole chapter in the book which gives you facts and figures as to why this is true. decline is a very misleading metaphor. it assumes that you know what the life span of a country is. we don't. life spans of country are not like life spans of individuals. if you take something like rome, you'll see that rome lasted in power three centuries after it reached the peak of it power, and when it finally collapsed, it didn't collapse before another state, but under internal decay and the onset of barbarians. so we have no idea what the trajectory of american power is. i think it has quite a long way to go still. the other problem with the term "decline "is it confuses two things; relative power and absolute, internal decay. in relative power other country will come closer to the united

states. this is the rise of the rest. of i don't see absolute decay in the u.s. now, people say how can you not see this? it's going on all around us. well, take a little look at history. we've looked a lot worse at other times in our history. americans go through cycles of believing we're in decline. after sputnik in the '50s, we thought we were finished. the russians were ten feet tall. after nixon closed the gold window and the arab oil embargo, we thought that was the end. in the 1980s when ronald reagan had huge budget deficits, there was a widespread belief in decline. that's when i wrote "bound to lead. "my friend, paul paul kennedy at yale, great historian, wrote a book called the rise and fall of the great powers and said we were going the way of phillip ii in spain. i broke down and said, no, but paul got all the royalties because people believed in this decline. [laughter] now we're going through another

bout of declinism which is set off by the 2008 recession. i suspect as the economy recovers we'll outgrow this one as well. but the point is that i don't see this proof of absolute decay. problems in the country, yes. lots of problems. there are a couple that particularly bother me, the deficits and secondary education. but if you look at the innovativeness of the american economy where the world economic forum ranks us at number four and the first three are small states, and china's around number 27, or if you look at new technologies like nanotechnology or biotechnology, or if you look at demographic factors like the fact that we'll keep our position demographically because we are a nation of immigration whereas the rest of the advanced world, in fact, is going to decline and even china's going to have a demographic problem in

another decade or so, i think all of these things are reasons why the american society's not in absolute decline. i particularly like the comment that was once told me when i was having lunch last year. he said, you know, the chinese have the great advantage, ec draw on a -- they can draw on a talent pool of 1.3 billion people, but the u.s. can draw on a talent pool of 7 billion, and what's more, we can recombine them in a way that the chinese can't was they're limited by ethnic -- because they're limited by chinese nationalism. he said as long as you keep open that way, he said he'll place his bet on the americans. so i don't see absolute decline. now, what about relative power? china is doing well, and i think you can see that it will continue likely to do well. goldman sachs has projected that

china will pass the american in overall economic size by 2027. might even be earlier than that. it stands to reason if one country has a population of 1.3 billion and is growing at 10% a year, sooner or later the smaller population of 300 some million will be an equal size economy. but the big mistake to go from equality and size of gdp to economic equality. essentially, they'll be equal in size but not in composition. and if you look at gdp per capita as a better measure of the composition of an economy, then the u.s. is going to stay way ahead. china probably won't equal the u.s. many in gdp per capita until somewhere around 2040 or well into the century. the other thing is that these projections about china being equal to the u.s. in the 2020s

are one-dimensional. they look at economic power. they ignore military power. hard to see china equaling the u.s. in military power for another 20 years or so. they also ignore soft power. and while china has made a major investment in soft power and hu jintao did, basically, tell the 17th party congress that china should invest in soft power, they are not going to be able to project soft power as effectively as the u.s. so long as they keep the authoritarian position they have. if you take the example of the beijing olympics or the shanghai expo, great confucius institutes, great -- but then you go up and lock up xiabao and fuss about the nobel prize ceremony, and you undercut all that power you've invested in.

so until china changes, i don't see it being able to come close to the americans in soft power either. now, you might say why worry about all of this, why fuss? is this just another way of saying we're number one and pretending we're the green bay packers or something? the answer to that is, no. power is not good or bad, per se. power, as i say in the book, is like calories and diet. too little of it, you die. too much of it, you get obese. and, basically, we have to think about power in terms of what are smart strategies? how do we use our power effectively? one of the reasons it matters is if you misjudge the relationships of power in the world, you can make big policy mistakes. you know, there's the famous quote that the pell to -- pell poe news yang war