>> booktv sat down with philip auerswald at george mason university to discuss his book, "the coming prosperity." professor auerswald was in attendance at the fall for the book festival held annually at the university. this is about half an hour. >> now joining us here at george mason university is professor philip auerswald, whose most recent book is "the coming prosperity: how entrepreneurs are transforming the global economy." here's the cover of the book. professor auerswald, what role does fairplay and economic development? >> guest: well, that's a great question and maybe i'll talk about what role does fear play in our conversation about development and our conversation presence? so when we talk about our

reality and share our ideas in the marketplace, we are competing with other ideas. we know three things about marketplace ideas. short-term sells better than long-term. fear sells better than hope. negative sells better than positive that is to say exaggerated flows better than moderated. to receive disproportionate number of short-term narratives of negative, exaggerated stories essentially. so short-term on the negative come exaggerated. that's what's talked about any ideas. we are creatures who grew up in the savanna or environments where we were always subject to threat. so we're looking at that thing is going to hurt us, but we are no longer in those environments. we are in a complex economy, that really relies on

organizations to provide basic necessities. so we have to update our thinking in a longer-term, focus on stories that represent trends and not exaggerate noise and we have to get away from here. so fear. a role in the development of human societies in the early stages is encoded in our dna. but to evolve to the complex modern environment we live in, we have to update the most basic aspects. so that's what your question speaks to. >> is a fearful venture capitalists? >> you know, the opposite of that, i may say well, venture capitalists has to be inherently optimistic because why would you invest in some thing where there's uncertain returns and so forth. telling a story about the coming prosperity is the story easily characterized. this is an optimist the beard i

really don't see it that way. from my standpoint, when i think of optimism, definition of an optimist to someone who systematically they, who doesn't get with the two distributions of outcomes is. and a pessimist is somebody who systematically early, right? they are there an hour in advance, so had to be sure. we know those people, too. so you don't want to be systematically wrong about the true distribution of things by underestimating the kind of bad or unexpected things that can happen for by overestimating. i think this is a narrative that looks the true trends. they have to be the same world. venture capitalists can't survive as an optimist. they can't survive as a pessimist either. venture capitalists have to look at the capabilities, the teams, with the market is, what demand is and put resources where they are needed to create the future.

and that's what i'm talking about. >> you say you're not necessarily not to miss, but the book is up to mistake, even though when the time of economic upheaval in the world. >> so again, it goes beyond the semantics. we are in a time of tremendous economic upheaval. i agree with that. but let's contextualize it in two ways. first of all, ours is the most dynamic and promising era in human history, bar none. why? because in our lifetime, the majority of the worlds population is joining the global economy. what does that mean? when japan industrialized that brought roughly 30 million people out of poverty. when china joined, so far that brought about 300 million people out of poverty. that's been a big story. chinese savings in the world financial markets for the part about shows the most recent

housing bubble because we had all this new bulk of the world. alan greenspan couldn't figure it out. he called this a conundrum. he went back to it when he wrote his book. as brilliant a man as alan greenspan, was unable to grasp the reality of our historical moment and it was in part due to that failure to systematic errors were made that led to the meltdown in housing markets, right? inadequate response of policy to what was really a change in financial markets due to growth elsewhere in the world. when the next 20 to 30 years, 3 billion people are joining the global economy. it's going to be a transformation 10 times from what we've seen from china's change coaches sometimes it happened in japan. now 3 billion people are suddenly given cognitive freedom, suddenly not thinking just moment to moment, day today

in a subsistence existence, better creators, collaborators, new contributors. yes, consumers as well, but human beings are not just consumers. they are producers and that is what this is about, all the possibilities created when that happens. i'm certainly not the only person telling a story. >> professor, who's one of the veteran to receive profiles, that she discussed in "the coming prosperity"? >> this kind of an inevitability to all that. i'm talking about how the increasing prosperity of reminding people, how it's a great dane. but the other piece of it is exactly which he fast. what role do people play it not? nothing happens in human society unless people make it happen. i use the word entrepreneurs, but i'm talking about creators of the future. there's all kinds of other people, artists who are creating the future. so when we think about those

stories that are a centerpiece of the book, it's a big part of what i wrote this book, to share the stories i've learned, people i've gotten to know in the eight years of editing a journal. so just one is a gentleman who was an optometrist in southern india and in the late 1970s he retired and does his retirement project, he was about 57 and he wanted to do something for his community. and so he decided he was going to try to address the problem is needless blindness due to cataracts. in the united states of the minor outpatient operation. you don't have people blind to the cataracts. and the rest of the world are super hundred million people blind due to cataracts. this is something that brought her view was known wanted to address. so he started the clinic and is

held and he had a sudden basden family members helped him and he got the thing the ground. anyway, come forward not just one or two or three great ideas, but hundreds of innovations. tenacity of an entire community, an entire global of people, one of the folks who contributed to the eradication of smallpox. cannot you put your name david greene. all these people work together to build the arvind iyer of hospital. to this day, the hospital has killed her than 3 million people of blindness. now come to you imagine the entire washington matcher area, about 3 million people. imagine all those people blind, now they can see. that's not an scare story story, right? it's not a good scare story and the worlds of people who circulate where i circulate. people travel from all of the world to go to that hospital to

train, to bring the same programs to their countries. it becomes a movement to end needless blindness. vicious one example. you might say that's a crazy story. that's got to be an exception. hundreds of stories like that. those are the stories that are transforming the global economy. not just the economy, the society building the future. >> so as to say in the next 20 years, 3 billion more people enter into the world of economic freedom. >> cognitive freedom, economic freedom. >> is at the wild wild west? how should it be managed? >> well, my core metaphor in describing the economy and the interaction of the economy and society is rain forest. and when we go to the rainforest, whether it's the pacific northwest or the amazon,

you have a sense of life all around you become like city's independent phase of life. a rain forest is a self-regulating when was the we put regulations incumbent government regulations, that's a part of self-regulation spirit of the self-regulating cells and career goals for ourselves, that self-regulation. their scarce resources, competitions like the rain forest. but the main thing that keeps the rain forest by brent is that you have the canopy coming in outcome and the u.s. economy would be good big firms coming ge, gm, wal-mart, all that. and then he got small business, but it's the small and growing. it's sickening that were small and can challenge the date and what happens in the big tree falls over. again, the amazing thing is new trees grow right out of the old

trees. that is a metaphor, but it's real. because i'm really something big in the economy, it's vital we know how to reconfigure resources and create some new out of it. so do we need control? we need feed back. we need the capabilities to repurpose. in this country, we need to build a robust platform for people to realize what they have inside of them. that's why people came to this country and that's why people here look for a better future that will be like the better future that their ancestors looked to when they came. so you know, i would say yes, you know, we need control, but we need controls. all kinds of interdependencies, all kinds of self regulations and ways of understanding what's happening, what's working, what's not and what gets us to the endpoint, which is

betterment of human lives. it's not gdp. if that income per capita. it's what kind of lives we live? we find purpose and meaning in the slides? >> professor auerswald, one of those trees to take your rain forest analogy, gm a couple years ago nearly the bankrupt, did go bankrupt, was bailed out by the federal government. should it have been bailed out or should it have been allowed to fall? >> you know, i'm just on the verge of slipping on that one. i'm just on the verge. >> here we did the same thing with chrysler. >> if you read my book, i talk quite a bit about gm. and you know, charles wilson is a guy who allegedly said was good for gm is good for america. actually never said that. i looked into it. i was going to use the quote because i got a character is the of corporatism in this type to think of a feeding the elites,

the incumbent industry. he didn't say that. in fact, he was a courageous guy. he cut defense budgets by 20% in the late 1950s and those defense cuts, budget cuts in the late 1950s or the number one reason we have silicon alley. a plot of radio engineers had moved out there. it's a beautiful part of the country. suddenly they didn't have jobs and those people said well, we want to stay here and they created eventually intel and all the rest of that, right? so we were in a very tenuous moment. at a financial crisis. there is a financial crisis that led to the crisis in ottawa industry. adding on top of that psychologically the failure of the big three automakers, tough. tough call. by the way, i don't know what anybody in the presidential election mentions this as a bush program. i have a chapter in my forward.

i'm not concerned about partisan politics. we need to get history right. start on one administration continue to the other. that's not what it's about either. but what happened if we we let it go? it would've been on the manufacturing access, all these contracts out the door. could a tesla have come in about three factories and scaled itself by a factor time? added those resources, what would've happened if we had the courage to do that? again, i am thinking that would've been a big risk, but it would have been exciting. and it might've been a great thing for american auto workers. >> we are talking with philip auerswald from a professor at george mason university. this is his most recent vote, "the coming prosperity: how entrepreneurs are transforming the global economy." you also serve as an adviser to the clinton global initiative. what do you advise on?

>> well, thank you for asking me that question. push aside the global initiative the last three days and i've been working with them for the last three years. the reason i'm thinking he was saved really appreciated that affiliation. they have a wonderful they are and they need advisors on the program, what sort of things to feature, what people will bring new ideas and challenge that audience to think about better in different ways to engage in the world. it's particularly relevant because in every participants back as they register, they receive a copy of "time" magazine in which president clinton had authored an essay titled the case for optimism. at the clinton global initiative this year, chelsea quite ready session called the case for optimism.

and again she was interviewed by charlie rose and that was the focal point of their conversation. so you know, i am totally synchronous with that message and with the click global initiatives focused on finding solutions to the world's greatest challenges. we have a lot of challenges, but we don't address those challenges by propagating exaggerated narratives of fear. we do it by finding the creative potential of all people working together to build a future we can all believe in. we solve those problems by focusing on the positives. >> a lot of big companies in america. i don't know if keeter is the right word, the cell to the federal government and develop policies good for selling to the federal government. the federal government is a big customer. is this a good trend? is this the way our economy should be structured? >> yeah, well, actually ties

directly to the question you just asked. it's good contextualization is one had people say the market airship, so he must be over there and on the other hand i'm saying i have this high regard for president clinton and i don't know if i talked about hillary clinton. it's as i was there and heard her speak. she gives a speech that she could take where the secretary of state title and a hillary clinton team. the speech he gave on development assistance was one of the most accurate, honest and even courageous speeches i've seen on the topic of international development. what did she say? she said a couple things no one ever says everyone knows to be true. number one of active beard she listed three, but it was the

third most significant. the program should be two or himself out of business. she said that. development assistance is not in the business itself propagation. there should be a timeline. when does it end? when do we stop? in haiti, pakistan, anywhere else in the world. timeline from zero. vitally important she said that. second thing she says directly back to your question had to do with corruption. she talked about corruption as an obstacle development, but she tied a line directly between corruption and poor countries and corruption in the united states inside the beltway contracts that are fed.correct she talked about through them. because through bottle in tie and were also part of the world. we're subject to the same kind of forces of incumbent economic interests capturing the political process, getting government contracts and affected the outcomes. we are also subject to that.

to see some of the first archer is a lot more than an ibook. so what you're saying is true in the deeply import. >> philip auerswald, you write about the current telecommunications revolution that were a living while we try to understand it vantage. help us. >> okay, so first of all we have to understand the difference between a mobile phone and a rich country and a mobile phone in most the world. so before the mobile phone, only two technologies had spread as widely as the mobile phone. note elegies ever spread as rapidly. the only other recent one was the transistor radio and arguably before that it was fire so we know what mobile telephony means and smartphones and all that, but what does it mean for the majority of the worlds

population? it's the communication highway. we dealt highways, communications highways into connecting people never connected before. in afghanistan attack about the story. you asked me about entrepreneurs who was responsible for creating the afghan cell phone can any. this is maybe the biggest story not invest in the last 10 years and we don't hear about it. why? because the fact that more afghans today have access to mobile telephony and know how to read or write, were a decade ago that would affect about 700 miles to make a phone call. but that's not a story. it is a story. it's a big story. for an ordinary afghan incentive and means a lot in terms of capabilities. but what is more exciting you think when you built the railroad, there's a lot of movies made. what happens when you build the

railroad? well, blamed on either side of the railroad, the land around the station gets valuable. you can provide services not that you could provide before. so it's the next generation, we start to build on the telecommunication highway. mobile health, mobile banking, a whole are brave services we can now deliver because we are connected using this frontier technology. that is such a powerful, powerful thing and that will have legs in the next 20 years, not to mention everything else that my friend peter talks about in this book, abundance, all the other new technologies. just mobile telephony creates so many possibilities. >> who was "the coming prosperity" written for? >> you know, it's written for the folks watching the show and it's written for the general audience in the united states, but globally it started in the u.s. and ending the u.s. i feel as though this story is particularly needed in the

united states. i don't believe that people in pakistan or china need to hear this because they see it. even pakistan has really struggled. there's so much potential. and if the next global opportunity. i'd be investing heavily in prepaid dividends before he shared with other people, but just on the cusp of what's happening, really exciting. so it's really the people in this country and it's for anybody who believes that this possibility in the future, but they wonder why it's not happening more quickly. >> so why are china, and yet, pakistan, why are they where they are economically if they are on cusp? what is going not right in those countries that's going right here in the united states? >> well, pakistan does not have the momentum of china and india, so they are in a different

category. >> again, the thing that constrains growth in every country and the simple, you know, which as you will go go to places like the world to and if i'm invited to share my thoughts with folks who work on policy issues that are missing thing in the united states government. i can boil down my policy recommendations to one thing, one message for a policy standpoint from this book. favorite, and class. economic incumbents. favor incumbents last. that pakistan had in the area of dramatic in the 1960s, pakistan was created today, right? but think about korea, samsung, but in the 1960s that was pakistan. people thought that was going to be a huge success. they are a back ally of ours. what happened in pakistan if you have this open space and you had a bunch of people rushing to take advantage of the

opportunity of would've a strange country, a lot of folks in the punjab came over, a very tumultuous time that created a lot of economic opportunity. the problem was there was no act ii. this families got control of the political apparatus. the people talk about instability in pakistan could analytic standpoint. there hasn't been enough instability. not political instability, turnover presidencies, but the actual economic structure has been dominated by the same small groups of people. same thing in egypt. pakistan and egypt are different stories. the military in both countries controls upwards of 40% of the economy directly on the rest of that, a small group of elite. so that is what holds development back, the lack of big trees fallen in getting the new. take us back to your gm questions. and you need to have the

capabilities of society to repurpose out of was released when something dies, when something old false, but there has not been enough of that in a place like pakistan or egypt. i think it gets to the point you're talking about. >> philip auerswald, what to teach at george mason? >> welcome to teach economics and social entrepreneurship. i've been in business school. i teach that a regular entrepreneurship. i'm a believer as a transformative source in society. but a transformative about thinking how to address public challenges in the notch gregorio manor, potentially envision new ventures company pathways to make the most of that. so there are a lot of folks in this book you might save oaks are familiar, i think of them as such rigorous, but that's what i focus on.

is a great teaching area. i love this environment. i've got colleagues at tyler cowen have a great on economics a lot of other colleagues in different disciplines. lily shall he really deserves a shadow. she is a global leader in documenting and researching, but also working practically on human trafficking. president obama said the clinton objective announcing a major new direction on this topic. many people work on this topic who have helped move it forward in the agenda, but luis is one of them and she really deserves a lot of credit. >> and we've been talking with philip auerswald, "the coming prosperity: how entrepreneurs are transforming the global economy" his most recent book. booktv on location at george mason university. >> i could've let it more, but within the confines of the book you can only do so much.

so we wanted diversity. but when the republicans, different parts of the country. to some extent we wanted to find agents. we knew on the basis you can't make generalizations that are 100% certain and we say as much in the book. the conclusions are hypotheses that other people might now run with. but in order to make even those kinds of hypotheses, we needed a fairly diverse group. >> we also included by men. you know, there's a white house project for the last couple election cycles and they had eight in 08, says several of the women the white house project identifies several years before the 2008 election, olympia snowe, kathleen sebelius were both in there. we wanted to also consider this

notion, barbara lee who had been yourself a years ago we did the last round six years ago, her foundation talked about women governors. we wanted to look at some of the women governors who had been through some of barbara lee's training as a service pipeline to the presidency. >> we also made the observation that when a male is selected to senator shipp, immediately he is cast as a future presidential hope old. for example, scott brown hadn't even been sworn in in massachusetts and the url scott brown.com -- scott brown 2012 was very purchased. with so many women have been in washington are so many years as legislatures and working on porting work and yet their names never bubbled to the top were curious, why not? >> how did you decide you wanted to write this book? i mean, all three of you studied similar topics, but how did the book actually come about by

>> your idea, ted. >> well, i guess it was my idea. i'd been a political nerd since i was, i don't know, my parents still remember my sister and i in 1960s staging the nixon kennedy debate with our staff animals. and during all of this years of nerd am, what i was fascinated anywhere the magazine issues that would come out way in advance of the presidential election, that would previewed the eight or 10 or 12 people who ought to be considered and that simply struck me after seeing so many of those issues in so many magazines that women were not making it. they were not been thought to be