egardiio rhistory is one in which doctors and various stripes have always challenged, and which private wealth has always been seen as carrying a social mortgage and to which public action has always been subject to ccountil inrn anoteaw net fou hryt can learn how to keep faith with a promise that we still have an obligation to keep. and you all very much. [applause] ..

>> thank you very much. it is a pleasure to be back. we are glutton for punishment in the sense that we keep coming back here and you keep asking me to come back. i guess that is a goodfe ote fte liof the newspaper of the last two years, and you ask what is the undercurrent, what to oconhat and arest y, w c part of the world, and by that i mean, the wt, north america, europe, and japan, though not geographically part of he west, partf e sin w w

ii. this zone has been going through a rough patch. our economies have slowed. we are facing debt crises and we are not sur o g u . sys se up and they don't seem as swift footed as th were during the balance of the 20th century. if you pan out to other parts of depiorinsme e u d th opposite. they are enjoying unprecedented economic growth, they have new wind in their sais,y w,t wayo the fourth summit, they are beginning to organize

themselv, brazil, china, south africa -- th d't know exactly whatt wantr wd byw tdowaanat wiwich they continue to feel as if they are operating in the shadow of western power. and i don't thinkyou would be wrg y s tha is vi teugn we that seem to have a the wind in their sails, if you concluded there is something fundamentally going on. i think something fundamental is going on. what we are witnessing is one f those moments inhsori which the center of gravity is starting to move. the last time that happened was about 300 years ago. let's pick 10 is aiod

dates. we met at 21600 or 7000 an took a snapshot of the distribution of power in the world, we would see that it was probably ffus e rnsth [inaudible] each of those different zones had a different view aboutw to order emselves and how to de witli aowo waoadied cer osiner zones. but if then we took a snapshot in 1800, he would've noticed something very interesting happened, and that s that the one zone in the ,th o d h weadle ea t est. northern europe, northwestern europe, over the course of the 1700s and further or the

course of the 1800s srte to dominate the glo. pnul sngfo asia and the mesopotamian valley north and west to europe and then it spread across the atlantic to north ameica. for the last 200 years. that zone in rtnership with wester pe a t t hstory. it has enjoyed ideological dominance, material dominance, and it was able to send out its tentacles. by the end of the 19th entury, 90of e wowa er ro cy fr pe oniereawape in which one relatively small zone of the world was able to extend its dominance in its ontological primacy totherarts of the worl wh i'dike a i ht 2yuprodof western

hegemony is starting to end. it is not over yet. the west represents about 50% of global gdp. it used to be75%. has com dow sal bu w cnu c down. i'd like to argue tonight, and what i argue in the book is at this moment that we ae entering, tis nwsigf nd, oit a d e nel dominant. it won't bea europeanountry, a chinese country, this will be iqita prenin fwi ns hhameinto the past in which power is broadly diffused across different zones. imagine one earlier in the

1700s. but it didn't matter that each ofhose different imperial zones had its own approachto r,aue e maet wea r. wla self-contained and compartmentalized. thafer viou ernd hierarchy in dubious because they live their own lives but we don't live in a world in which different zones of power live their own lives. we live in a world in what beijing decideswattters fr wagtndtwsn cimas brasilia. wit ntf grabber --ther now.

gravity. that is because the west may globalization happen. i think that the challenge for toagawl ha atik globalize, interdependent, smashed together, no longer anchored in primacy. at is the oeioh ulkedis o tonight, and i'm going to put some flesh on the bones in the following way. first, i'm going to spend five or 10 minutes talking about how the west became the wst. i ntto r tgh or eiscai k quon before us is twofold. one is power shifting from the west to the riing west. i think the answer to that is

undeniably y. peop aue with thk that m yo win jtoh t case. where i think the real intellectual work needs to be done is on the question of order and ideogy. i think most people in the prlyres view. even though the west may lose its material primacy, the order, the order we have built common institutions we have put in place,ill ng outlast material dominance. that is because theser it is a universal approach. as china and brazil rises and indonesia rises, they are going to start looking more and more likeu. place in the order we have built, even though we are no longer a dominant and in a

material sense as we used to be. but i think to understand the thrses wedhey going oltot ha aih ask is who are we, how did we become us, and our emerging powers following that same task toipo qur itn -tegng is today. i don't think that's going to happen. i would sure be why don't is going to happen. how we aag a orld h er ps goto viabhooogn political, social and commercial life. my story starts in the early part of the modern era. what you might call the late middle ages wear mnri

nty,erope around 1300, 1400, 1500. that is when the stirrings of europe began. they were very visible. i wantomake themeha eu wblpe wad fragmented. europe's strength was in many respects, it's political weakness. what i mean by that? by the time you get to bot 12 1 yee t finghohr thchurch, the monarchy and nobility. the popes were fighting with the emperors, the abbots with the bishops, the emperors with the anat h et erta tbe political space in europe for some new acto. and that new actor was emerging

middle class but moved out from tobldsa on and theyies n begi began to sell things and buildings. europe was the only pla in the world that began to delveve int. what you begin to see that this class began to lie with itself.

it was a week of commercial cities from belgium and netherlands and poland and then linked together the bourgis and allow the psbc against the nobility and the monarchy in the church. i would argue that it was this emerges, t vanguard of change come in the middle class s lytheand this really went through two pages. one was the reformation in which it was the commercial class that really greeted enthusiastically prin alternative toer adhe catholicism. if we drew a map of europe behind us here, we would see that the commercial parts of europe generally were

protestant. parts eure's a caoli thheasca eln between commercialism and entrepreneurship and a desire to break out of the traditional mold. i think the second turn was pued out of politi or olhu t was the bargain that monarchs struck with the middle class to pay for the reformation. what was that bargain? that bargain was if you want our money for a newruc, tveth voice. thbourgeoisie got that voice that was the beginning. e glorious evolution. money from thebrgeoe poer moh se ae thstpli ahead

religiously and a sense of engaging pluralism, politically in the sense of embracing constitutionalism, rather than absolute rule. and that sets the age for the inusial volu, h velyleeu tllea toet t rest. it was its battleship. with the telegraph. with the submarine cables and quinine, which allowed europeans tho eraa r s beauly intothe colonized. that, i think, is the is the story. rise up in the quest for. the abity of the middle class to overturn absolute power, it is in many respects the story of how we became the ws. lesscd oi potica liberties and enjoying a level, a standard of living much better than the rest of the

wod. weats honestly a qick rtrsof rof ulppcuhe details with you in the q&a. but now let me switch to where we are today. that was two or 300 years ago. i think whe we are today, first of all, we are in a world mo which pow isbeginninto iai h west still represents 50% of global gdp. that is not going to last very long. by 2025 from the world bank predicts thawe will be ina uncltheol lr nt w rghly one third of global reserve. the dollar will be a third, the euro will be a third, and the chinese yan will be at third. by 2032, the main developing countries otdyrexpte e d today's g7

advanced industrialized countries. what i think in some ways is the most impressive pie of data, today in 2012tealav rn le ur the top five economies are still western. there is only one developing country that makes the cut, and that is china. ecy,y weno e o- anthat is the unit states. the rest of those countries in the top five pecking order will all be today what is the developing world. if you look at that ta. eittll in which the developing countries equaled the developed countries and not much more than 10 years, world in which china is expected to surpass the united ates by 2027 nd then

puiae y0 r 2050. it will be double the size of the united states in terms of the gdp. this is a world thats directly changing. that is why i would argue, as i said it at the outset, this is the beginning of a new glob swnga which the material hegemony enjoyed by the west is going to gradually slip away. i wouldadd it's probably going to slip away more quickly than you think. and that is becaueive in a teloasn history. in which global gdp, productivity is moving much more quickly than it did last time t noswt ow rlrks. at a the implications of the world in which the developing

countries have the dominant share of gdp in the dominan share of global rdct quonarosoues they modernize going t follow her path and therefore slipping to our harbor, or are they going to follow their own path and arrive at their own rsion of domestic and inteatiolre? inhtwel ve to sit down at the table and negotiate with them about how to govrn. let me share with you wh think it is the latter, and why i think what we will see is th 21st century emerges, is a world of muipe odetyt di hdvlo untries converge towards the western way. what are some of the key differences between the chinese models of development and the western? cl aas ornwinoina' id

vard opocal change. that is because the chinese faith, unlike the european is smt enough to open itsdoors tohe mide s.en me s eu gehearnd ghe h it back and beat it down and clamp down on it. that is why they ended u overturning those institutions. the chinese state is smarter than the holy roman state. the chinese state,bgnn 1ane lr ha , has essentially been co-opting the middle class ever since cina began to privatize the economy about 30 or 40 years whhamean tyo ch b inole-cass is doing the same thing that i'm an apostate. it is a middle class that is

essentially a dissenter of the status quo and aninvestor in statecpta beng middle-class society. but no, it's middl middle-class is not having the same political impact as the middle-class of europe andhe middle class of it bthatetdo atesht. w c cnu modernize and develop an urbanized, you might get a middle-class sizable enough to push for democracy. i actually think that will bue s ggo en loimomw w ditakhe transitions to work themselves out? britain became a constitutional monarchy in 1688. when did it become a democracy? 1884. geanyaa

tionony he 1 after the napoleonic wars. it became a liberal democracy after world war ii. in other words, these things take time. so the operative question in my mind is cha going to bes rld power? the answer is no. it will be a world power long before it is aiberal democracy. i wod also point out that the world that we live in today, beaswe did during the rise of the west, because we live in a globalized world in which huge amounts of capital and services and goods e sloshing through the global economy on a day calias its advantages. what are those advantages? mainly keeping a hand on the tiller. and i don't think it is accidental that china and other

countrie -- those tt have ntrol over their currencand capi otsste dsise ae aly written up a global financial crisis better than countries that are more open and more free. that confounds what we believe arstibeiz ndree --old at i don't think that that is actually proven to be the cse. russia, saudi arabia, united arab emirates, there are lots of other state capital economies iaonk that they have enormous staying power. do i think that vladimir putin is about to fall? do the protest in the street suggest that it is the endf what russia calls sovereign democracy? do not bet on tw ssi i t . maybe 25%.

how many of that middle-class is really in the middle-class? less than 10%. most of that middle-class our state apparatchs. most of them get paychecks from that. ruecse he is the sugar daddy. again, when? it's going ttake a long tme. ouakee gu ouese dabi it where you have very strong tribal structures and the money to disperse the middle-class that makes them investors in the status quo, not le qlyne tf polical dd east. you may be thinking well, this guy doesn't know what he's talking about becau the middle east is finally breaking america'way. reiront e western

version of how to organize society is winning out. i think there is truth to that arment. upfted by what has happened in the middle middle east over the last couple of years. there is no doubt a call for dignity and accountability, a i also think that the nature of modern 90 --e will see this as the modern era spring unfolds, and what we have cfted in the west, itill be ry different. we fctstchmodiz, out of politics. we became the west post-

reformation. in the middle east we will see the opposite. sp ie onterty it la g co b ti life. that is because there has never been a division between the muslim world. there has never even been a vocabu nar tht tee ed t th as never a split between the pope and emperor because the caliph was both. the selar leader and religious leader merged into one later. tofhia is a religion of faith only, and it was only when the pope and emperor were united with each other in alliance, that the religious authority had secular power. that's not true in the mlim

wh t waveen t abind ate he i v country in that part of the world that has held elections is that political islam is the winner. in ian, iraq,lbleia orit sit, every country where you have had some kind of participatory election, it is the it islamists who have generally one. i'm not sang there's anything wronwith that. 'aii evat witnessing in the middle east is the emergence of a region that is going to sort out trackthe modern development of e west, i think we need tohigain prexe ctrha gng oemdre industrialized, the middle class is growing by the day, and a

long one of secular politics has come to an end. that is, i think,a clea a inaesa ertimoves to the middle east, what we are going to get is a different kind of modernity than the brand of modernity that merged in the western world. finally, let me take a look elshereinanbl. anazreer democracies. they appear to be emerging as countries that may come, to some extent, be closer to us geopitically tanwo ergi bu hink here, too, it would be a mistake for us to assume that when we wake up in 2025 or 2030, that we can count n th sill and india in the world to side with usndtra

our harbor i think that the fact that number one, brazil and india are anved esnos less society -- but societies in which the vast majority of their populations are rural and urn -- it means that we are seeing a less populathan that is very diffent than t pic thws atnst amo tibo open markets than most western countries. it also makes them more uneasy to throw their lot in geopolitically with them. at iiarepo oihn i yol ilfon cyu se itu that suggests that their commitment to democracy means that they are aligning geopolitically with the

west. brazil and india but with the united states in the u.n. curi cou ls than5% he i .. the first this wt ou plg? sh wsp to of what

i'm calling this new global turn second, as jill lansing just in her introduction what kind of beuthemises and bargainsight atht t cnround that we can find between the world that is dominated by the west in a world in which the west will only be one version of maternity that competes with others in the marketple candians mehedier a ts t st of affairs in the united states and its main western partners . this global turned it i think is taking place has two sides to . one ist the right front of thales.n the others of having a tough time. i think that relationship is

structal. poza is of fundamental byproduct that wealth and jobs are shifting from here to t. ap macngour middle class's haved their incomes decline. the united states is today the most unequal country in the industrialized world. japan and unite states and more a ere,eors hee. it can happy accident of the u.s., europe, in japan are all experiencing the same phenomenon . why? glizn.se 2 billion plus low wage workers

and the developing world are not building widgets. our guys in ohio and michigan are very good widget builders but tre are not able touild dgs' aheap a dunystem, the production line has shifted from the atlantic rim to the pacific rim. we therefore going through a structur economic shift, and not just dip in the bin goten i toigure it out to be compounded and 201st century. it's precisely because the think we're seeing our socio-economi conditions changeave vo, saying do something, help me. my kids in going to have a lower stdard of living denied it we have government in the united

states and spainharena esnd because globalization makes it much harder for him to respond. the push a button, 700, 800 billion stimulus package rco iorffted b standard and poor's decisions or beijing than the above what the fed does theirst challenge fomericans euan seur o h cvehe1st century, how to play the game that the chinese and brazilians and turks and others to point. it tnk we need to be smarter and shriner and realize that anhi aesens usua do education, training.

it is, i think, impossible to compete if china is building a high-speed rail and bridges and aircraft and real network and all of those trastructur ur ial apa tas we need to have somebody in washington who is thinking about the long term and is due in long-range strategic economic planning. that's what the other guys in doing. unless we get in the game a t 'rngo tir th goese europeans. we can beompetitive. i know that we will abound from this month. i'm not someone who thinks the united states is in decline. bueehe rhtecesilie coury, d rhtittoet a out of the mess. then i think the west will be able to manage th transition. reizthe ofhi ande sul

mundanity that we have so successfully crafted over the last 200 years is our version of maternity. some may embrace it, some may not. but i think the keyule of thumb for et to sl io respect and be respectful of alternative versions when and ho to organize life. we should stand firm in defse of human rights. res tyrretandir . but around the world there are many countries that are not liberal democracies that are nonetheless responsible thpe outfovty,at hav brought re wng i ve te. i think that in a world in which power is diffusing asast as it

is we have no choice but to be more tolerant and more acceptant of countries that may now want to look likes bonl pred w wh ventesns. so on questions of legitimacy, questions of sovereignty, and questions of devolving regional responsibility, the key he is po ao t wnergg the back of the room and take their seats at our table. it is to recognize that they, like all emerging powers through story, will nt to change the world ins t a cualdis.ic that in no way diminishes who we are. it in no way diminishes our ability to stay who we are, but i think managing this pot to ins testayfeet.

eddo the world what a difference of two or 300 years ago, and that is number one accept pluralism, except that different people have different approaches. they towg otnt cli l se thing that we did that was magical was to accept the diffusion of power, to allow power to move out from monarchs toward people, the middle-class, tor css. hit t ndood t recognize that pluralism can do for the world what a difference, to recognize and accept that power is difsing around the world, and ted shape it and not resied th tgl tistnk happening or to pretend that it is happening but it doesn't matter because in the end

everyone wants to look like us. if we assume that are going to gein wrong. mo tde prast rldha i think will be reflected of the west's own values, i think we have a fighting chance of actually getting it right. thank you very much. >> i have to see that in no one's world there is someone thinking about these things so clearly. that being said, i justant to remind everybody that we only have one speaker. >> thank you for wonderful talk.

ow g20 even though sometimes it still reaches the. : of the g-7. that is happening. the problem is that necessary

move tor rre aor l ao makes those institutions more unyielding. and therefore i think we ed to have a double move, one that broadens the circle, opens the door, brings moreoices to t taha dferent rns heldnifre esesented, but at the same time fashion more at hard grouping and regional groupings that can actually do the hard work of governments. and so if i had to te a guess, i woulduess t m rtintuon t 0 2040 will be institutions that today and in the shadows to some extent, and their other regional ones

obviously projectns. beue iat we dly knows. upon current information. i also think it's quite sikg how quickly those predictions are being revised to speed up this transition, that is to say thucorelyting leie oyea. i don't think we will see streamline development in countries where talk about. i do think that there will be bumps onhe road for all. e ranseigh ndupne. they need to diversify. will it happen? i we're moving into a

world in which these different approaches to managing commerce are going to be out there and thinalrisiath each other been through, when countries are out there saying, whose battery going to follow? which model of development makes sense? rightowhensro a quti ule tnks t or grabs . especially if we don't guarantee weather, especially if we can to find a political system that produces it policies, do wioo china because it provides competent governments, even if chinese government is

illegitimate and immoral and repressive. at think that's one of the reasons that it is so imrtant abk. ee's to gtsuch we need to continue to provide a model to the world the says liberal democracies can function effectively and can produce growth that is broadly shared. st aee cntryht highly unequal and the middle-class this suffering, our ability to serve as a model for the 21st century i diminished . >> you have essentially at least in my he talked about the global rebalancing of power. more countries onhe security counci and pdu m

s cna, tnidta. is there a third element of rebalancing the need to be considered, global rebalancing of consumption? does that present a very difficult problem for the united ates, westereu,ap >> i think that the imbalances in consumption an investment are, to sextent, fueley th is are able to get away with living beyond our means because we live in a world in which there's a lot of flow of capital and other countries are willing to buy our debt and allow us to live beyond our means c aer have, i think, in some respects been too focused on

export-led growth, don't have enough domestic demand,nd that comes ultimately at eense exrt o gdsndhe to grow by selling goods abroad. i do think that one of the issues that can b addressed in a form like it g20 i eschmeionow and western powers come together is just this issue. how to get a global rebalancing, how to get more consumption in countries like china. auallin in testhe vemeorethal of the ronyon be because that increases the value, the purcsing power of the average chinese, and probably the greatest threat to chine stability is the inequality tt ovme td interest to

party members who own export companies. i think little by little you will see the chinese move toward and tt el u b we their currency, adti. he david, you have argued anolanfthy for multiculturalism lilie. my question has to do, where do ethics and morality fit and jack for example, how do we deal with slavery in other countries? cotrsreal tr population is behind a veil? how do we deal with other economies where people work six

days workweeks2 hours a whin >> i think it is a very good question. i think that is not an easy th isseel t awer. unee retain a strong moral component to its foreign policy and that the united states has been a moral compass need to find a happy medium. we need to find a happy medium between demonstrating, respect for, wlingness t work th couri e i w d't gorns.t o

while at the same time being an abashed and expressing our disapproval for violations of what we would considero be iththf aandards oehavior. orolt and somewhat more ready to work with regimewith him we have some discomfort, we will do much better at building coalitions against those regimes tt enat.fgr a vtimaghhau i think that that in some ways uld give us much more leverage and much more moral persuasion than where we are now rare we aliete the russi a nateot o rim m it harder for us to do will need to do. look what happened in syria. with the chinese and russians did in vetoing that resolution is inexcable, but i also think

we neeto fur out what t onin. a tent the united states during much of its history was somewhat more humble about its ability to shape othernt and evat bwa d whrghxale encouragement and inducements. at think of of the last few decades we have lost to some extent our sense of proportion and our ability to lim to worry that what was sugsted is we tend to believe that we could become a fixture of last resort and that we can go into countries very different culturally, very diffentay ic aur th is a bridge too far. it is a black hol for the

united states, and that's why i thk we need to find a happy medium. >> hi, george peck. perhaps related to the last question that was answered, as we talk about western interest it seems there are two aspects, one being the material sig, ionde ifnomic issuend we were to actually look at the values and strip them down if there might not be innocents that, perhaps, is in common with if not everybody, maybe some otr cuesthrconsens ofhese ig et il compatible with where we -- how we look at the world. the second part is and/or but are these material covers perhaps necessary to even properly voice as well use.

>> material power, influence among those necessary at tax rest of the will to maintain a proper boys? >> ameristar with the second part ofheueion of wor backwas. ine t cceua ffcewe myself and many other people who are writing about this issue is that they believe that then icevendpr of the last couple of hundred years is because of the ideas. they have universal appeal, liberal, transpant, and everybody's rules biee it's very typical to untangle ideas and our and that american ideals and values of

spread as widely as they have learned because of the people ane raarer.rt aecsehe as a consequence, as are power in a relative sense becomes less domint o ideas don't travel quite as far. athyhin rlich per i more diffuse in not calling to see our system, the western system universalize and outlast the anourial condition. vaes.ame that's why when i would do is drop down to find the shared values and knocked the man and work with other countries.

we as americans have discomfort with the gunman that is the crack if we do have recoro. there won't be the full monty. there will be all the values that we as americans would like egyptians are chinese are a fet e r sio a little bit we will come home with the deal. if we in our sights too high we may comen and he handed >> i'm just so glad that we have you thinking about this. >> thank you very much. [applause]

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