>> next, booktv sat down with david rothkopf at the miami book fair international held on the campus of miami-dade college. he talks about his latest book, "power inc." and also responded viewer questions. >> host: on your screen now is the cover of david rothkopf's new book, "power inc.."

mr. rothkopf, a lot of people think that government and big business go hand in hand. >> they do go hand in hand but governments' playing field for power and so business introduces itself there to guide it in the directions it wants to go. but of course a lot of people in big business or in the financial community would prefer it if they went on in their way unimpeded by government, and toso that's another front in this particular power struggle. >> host: one of the points you make in "power inc." there are multinational corporations who make more money, control more money, than most of the governments on earth. >> yeah, big companies like wal-mart, you know, have more employees than some of the smaller countries in the world. but a company like exxon has revenues that are bigger than the gdp of all but probably 30 or 40 countries on earth and, therefore, it has resources that

allow it to set up offices in more countries than most countries have embassies. put more money towards influencing outcomes in political campaigns to a greater extent than almost any countries are able to do. so they have greater influence. >> host: is that a negative? >> guest: well, depends on your view. certainly companies of capable of acting in the public interest or promoting progress or economic growth, and that's positive. but companies tend to act their self-interest as well. they're actually obligated to enhance their shareholders' returns, and so very often that will mean they'll resist certain kinds of regulations, resist certain kinds of taxes, and resist certain kinds of policies that might be in the broader public interest and, therefore, there's a tension between the narrow self-interest of the few and the broader general

interests of everybody else. >> host: in your book you talk about evolution quite a bit, and in fact if i'm misquoting you, let me know. but national government are knee -door in neathrandel. >> at some point, human beings and dinosaurs and modern -- national governments are a form of organization that are inconsistent with the global ear remark whereas corporations helped shape the global era, are designed to operate globally and across borders and thrive in a place where the very nature of countries having borders restricts them from projecting their influence. >> host: do you see that changing? >> guest: well, it will change at a point in history where people realize they need

international institutions that are strong enough to regulate global climate or to regulate global financial markets or regulate global health risks in an effective right. right now we have international inconstitutions like the un, imf, world bank, but thaw were design to be weak to play second role to nations. i don't think that's sustainable because the interests of you or i are affected by the decisions. >> host: david rothkopf. here's the numbers to call in. >> host: mr. rothkopf, former manager director of kissinger

associates and current ceo of foreign policy. what is foreign policy? >> guest: the fp group is a group that publishes foreign policy magazine. the foreign policy web site, which is now much bigger than the magazine. almost three and a half million visitors a month to the web site and runs programs on international issues. >> host: mr. rothkopf, in "power inc." you have a chapter about a swedish goat. >> guest: i wanted to go back to the sore instory of the company, and of course, companies one form of oar existed since the beginning of time. the oldest corporation that is still in existence is a swedish company that started perhaps a thousand years ago when a goat wandered away from its owner and came back with red horns because it had drunk from a stream that was full of copper ore, and the owner came back and found the

stream and started digging for copper, and that became a copper company, and became a company called staracopaburg and that means great copper mountain, and now they're in the paper business but $20 billion a year in sales, it's bigger than a couple of dozen countries itself, and the fact it's existed so long, is so big and most people never heard of it, illustrated the ton i -- the phenomenon i wanted to get at it. >> host: 2008 can the fortunately collapse. what did that indicate? >> guest: financial markets had been extremely influential in getting government officials ofo pull back the regulatory saveguards that we need. they were able too pursue their own narrow interests but started

playing essentially roulette in the global casino in a way, that when there were big losses, we end up paying the price. >> host: mr. rothkopf, is the u.s. on the right path in your view when it comes to the mix of business and government? >> guest: i think the u.s. has a lot of work to be done in this area. you'd know from just the recent presidential campaign where we spent $6 billion, and that most of that money came in one way or another from companies or people who worked for powerful companies, and was part of a bargain that exists in our society between special interests donors and their political beneficiaries, that their special interests will get pursued. and it's the first big election since citizen is united, where the supreme court ruled that money was speech, and that we couldn't regulate money, and i found that to be a real

distortionary fact in u.s. life, and we're coming out of a period in which income inequality has grown more than ever in u.s. history. in which we have had gdp growth but job contraction, and social mobility is going down, and we have to ask ourselves, as companies gain influence, push government off their back in a regulatory base, grow in a free-wheeling way, and people are falling to the wayside, there is a connection? i think there is and we need to fix it because i think the octobertive of society is not have the richest country in the world in terms of gdp, which is an aggregate measure, but to have the highest quality of life for each and every person within that society. >> host: is the world capitalist? >> guest: the world is capitalist but the term capitalism means different things in different places. in the united states, for the

past couple of decades, we have been pushing a kind of capitalism where government stays out of the way. it's laissez-faire capitalism. but china is a communist country but it's also a capital country, just a different definition of capitalism, and singapore, where there's a strong collaboration between the government and the market, you have a different form of capitalism. places like brazil and india where there's a big social agenda, you have a different form. anyone europe, southern europe, northern europe, different forms, but in northern europe, the informed capitalism, where the government believes in strong social safety net, believes in paying for health care, believes in playing a role in determining what businesses grow or fail, and they're creating more jobs than we are. so we have to be careful when we, as we sometimes do in the

united states, get up on our high horse and say we understand capitalism. actually what's going on in the world is a competition between different versions, and if our version produces more inequality, produces less growth, it's -- is seen as less fair and others are seep as more fair and producing growth, who do you think is going to win that arguement? >> host: a lot of people say the northern european countries, norway, sweden, et cetera, is socialists. is socialism a term that is outdated? >> guest: i think it is. let's take an example. car companies going bankrupt during the last cycle. america, big capitalist country, doesn't have a social safety net. so if those companies were out of work it would be a social catastrophe so the company had to bail those companies it0. sweden had a car company that went bankrupt, saab, and because of the social safety net and restraining program, they let

saab go bankrupt and let the market take its course. which is more capitalist, the country with the safety net that can allow the market to do its thing or the country without one that couldn't afford to let the market do its thing. >> the title, "inc." is this a oh-too? >> i suppose you could read it that way. it's more of a cautionary tale. it's a story how the growth of the power of private actors has spent dramatically, not just in the past decade but over the past thousand years. it's a historical trend just like the evolution of democracy is a historical trend and globalization is a historical trend, and we need to understand it that way if wore going to counterbalance it with the interests of people at large. >> david rothkopf is our guest and the first call is from carmen in fort lauderdale, florida, carmen, good afternoon.

you're on booktv on c-span2. >> caller: yes. i was just like to ask mr. -- the author of "power inc." if he believes -- >> host: carman, please go ahead. okay, we're going to move on to don in austin, texas. don, good afternoon. please go ahead with your question or comment for david. >> caller: good afternoon, rothkopf. i'd like you to respond about the mf global bankruptcy and that was filed on a monday. the monday after the sunday night when it was found crystal clearly and everybody knew it, everybody was involved knew about it, that there was a loss of money, substantial losses of

money was determine sunday night. this is not a controversial statement. so monday, during the bankruptcy hearing with the judge who is a friend of the mf global attorney, because they had worked together, he heard the mf global attorney tell him there was no loss of money so this is not a big problem. number one, that's impossible for him to state if no accounting had been done. number two, everybody in the courtroom knew that was false, and who was in the courtroom but regulators, and the commodities futures trading commission and regulators from the national futures association, a industry involved organization that tries to keep the futures industry honest. please make your comment about

these outrage juice -- outrageous -- >> thank you, don. >> guest: my sense is that the specifics of the mf case aside some the congress is also overseeing an investigation of that case right now, and came out with findings this week that were pretty damaging for the management of mf. that's go back to the question you asked earlier about the crisis in 2007, twowcting 2009. we learn terms like too going to fail. we saw risks associatinged with things like derivative instruments and win then had a debate about it, and an effort at financial reform that didn't actually fix the problem. we have more too big to fail banks than we did before, and we actually have more derivatives and more at-risk investing happening today than we did before this crisis took place. so, whatever the specifics of this one case are and how it's

being managed, we have long way to go before we have a regulatory system that is up to mitigating the risk that, when things go wrong, it actually impacts the lives of average people far, far a. from wall street. >> oo david rothkopf, the awe their of power inc., and superclass. blsh ... book. my first book was on the history of the national security council and it stopped in the middle of the boy should ministration and a lot has gone on since then. i am looking at the state of national security post the second half of the bush administration particularly the obama years and whether we are getting any stronger or whether we are in a more precarious position than we have been before. >> host: mary in chris christie, texas, you are on booktv with

david rothkopf. >> caller: i find this conversation very interesting. i was wondering if you could comment on the reckoning that is to come a little bit. >> guest: one dimension of the reckoning that lies ahead is the competition between capitalism. right now in the united states coming out of a period where we have in the ascending power, we have been the ones who have sort of set the standard for all markets and governments should work together but clearly the asian economies are thriving and growing faster and their version of capitalism which is a much bigger role for government, which has government playing more of a straw role in picking winners and losers, determining who gets educator and how they get educated, those forms of

capitalism seem to be gaining the upper hand in the global debate and we have to recognize if we don't address the flaws in our own system like the flaws associated with any college or the inability to create jobs for the free rein given to big investors at the expense of everybody else we are going to lose our influence, the model is going to change and we're going to be at a disadvantage. >> host: what is china doing right? >> guest: they are growing fast. by 2030, china is the second-biggest economy in the world right now. we think of it as an exporting economy but their growth has been internal. by 23 which is not that long way although it sounds far away, they will be the world's largest consumer economy. they will be the ones setting the trend in terms of one car is like and what a washing machine is like and what and ipad is like. they are also building more cities than anybody else, going from 75 cities of 1 million

people to two 20 cities of 1 million people to almost 20 cities of ten million people and in doing that they will be building our highways and power plants of tomorrow and the czech writer has a lot of power in what these look like so they will be dictating what those things look like as well and as they create vast reserves of wealth and giving it to people who need to borrow it europeans who need to borrow it gain influence that way and when they go to latin america where they are the number one trading partner investor in brazil or africa where they are number one investor they get a lot of influence that way. is not just economic growth but economic leverage and economic power. they are growing as a soft power leader in the world and that is something we need to watch carefully because their interests do not always a line which hours. >> host: next call from maurice

in walton, ky. >> caller: hello. >> host: please go ahead. >> caller: i would like to ask mr. rothkopf to cite some examples of large corporations that government has a withdrawn regulations, governing those industries. when the obama administration is adding hundreds of regulations every month particularly with health care industry, the environmental situation, i don't see any coming off of anybody whether it is health care interests or industry in general. >> guest: there are a lot of regulations. lot of bad regulations and i am not suggesting all forms of regulation are good but i do think it is very clear that for

example some industries like big oil and gas companies have had benefits in terms of tax breaks, there has been an effort to push back up climate's regulation, whether it is a carbon tax or a movement toward global agreements on climate, there have been efforts to pursue certain kinds of regulatory approaches more beneficial and others such as promoting free trade agreements without intensively promoting the enforcement of trade and so forth. is not whether there's regulation or not or how many regulations there are but to the regulations favor and how they impact everybody else. >> host: david rothkopf is our guest. bob in marina, california is the next caller. >> it is an honor to talk to you. i met you and some years back at the conference in monterey,

california and i remember the educational challenges not only to reach the masses but also to educator the children of the superrich and that the blacks on route nadir at observation the only the superrich can save us. i would like to get an update on your take of the educational challenge we face by your analysis which i think is absolutely superb. you are really a beacon of light in the darkness for us all. >> host: >> guest: education is our biggest challenge, drive economic growth and we have an educational system that works on a model developed at the university of bologna in the year 800 where a guy stands in front of a rule of 800 and talk with them. and into every classroom using

video and the internet. we need to recognize and education assistance designed for an agrarian era and give kids the summer of doesn't make sense and an educational system designed for people having one career in their lives beginning when they turn 21 and extending 20 years after that doesn't work and people need lifelong education and we need to educate people for the skills that are required by the evolve and high value-added economy and that doesn't just mean skills like math and science although we are lagging behind 30 or 40 other countries in the world in that regard. it also means skills associated with creativity and innovation because our edge as a country comes in the area where we can use our creativity but we also protect creativity in a way that places like china and others don't. in a content driven world, software driven world, that combination of creative people, a system that promotes and

protect creativity is probably the real ace in the hole. >> host: let's take bob's comment and tie that to your previous book superclass. you have mentioned we are creating a class of people way up here and everyone else is being left behind in a sense. >> guest: the gap is growing between the ridges 1% and the rest of us. they have benefited more than anyone else in the course of the past week in years. most of the gains that have come with 90% of the gains that have come from the last expansion went to them. people at the bottom of society are more likely to stay there than ever before. we use that social mobility but if you're born in the bottom 54 likely to end up there. it is worse when you look at inner-city schools where about half of students who are minority background don't graduate from high school. if you don't graduate from high

school and the global economy you are out of the game. from the day you are 17 or 18 years old you will not be competitive. there are forces holding them down. our tax system, system of promoting certain kinds of industries, system of education that get people on the fast track, a leg up into the good jobs are actually forcing people apart. i think you saw that. wasn't just a anger that you saw in the occupy wall street movement. was also anger you saw in the tea party movement and it was anger that was directed at mitt romney who is seen not as a business guy which is how he wanted to be seen but as a wall street guy, as a financial guy, someone taking too much advantage. one of the take aways from the last election was a wall street that was really damaged by this president and has done a lousy job addressing people's

feelings, over the course of the past few years, i don't think that is the case. i really think we have a problem that is getting worse and more challenging and likely to provoke more, not fewer, uprisings of the tight you solid occupy or the tea party. >> host: you have had several careers including serving as undersecretary of commerce in the clinton administration, managing director of the kissinger associates and and a former businessman. is being capital type of operation a black rock type operation healthy for our economy? >> guest: it is essentials for the economy. it needs private equity, an innovator to go to somebody with capital and be able to applies at capital to they're big ideas and help from grow and help to create jobs. does that mean bane or black

rock need all the tax breaks to treat interest in the way they treat them, that we need to trade capital gains in the way we treat capital gains to give the mall and advantage? of course it doesn't. they can still get plenty rich and have plenty of incentives without having some much of the playing field tilted in their direction that the rest of society that needs these resources to build a school or highway or bridge or health care system don't get that. >> host: we are talking with david rothkopf about "power, inc.: the epic rivalry between big business and government" and the reckoning that lies ahead. jeff in santa fe, calif. you are on booktv. please go lead with your question. >> caller: earlier you talk about our international institutions are week that need to be made stronger to properly govern multinational corporations. given that nations around the world are in different phases

coupled with the greatest different culture, how would you go about stressing these institutions? it could take a long time for the national institutions. thank you. >> it will take a long period of time. in most countries are round world talking about strengthening international institutions is the third rail in politics. if you want to see a little sovereignty of ford and you are out of business. if we don't see sovereignty upward we don't preserve national sovereignty or national interests. the reason superstorm sandy cause such damage in the northeast of the united states was not exclusively related to environmental policies and actions taken in the united states of america. ..

and the course of civilization and the history of civilization and taking government from small tribes and villages to cities and states, to nationstates, is too broader and broader societal groupings, because our economy is extended across the borders and our travel is extended across the borders and the risks we face came from beyond those borders so it's only natural that over time, we will develop stronger global institutions because we face more shared problems with all of those people. i can add one last thing. remember the beginning of the united states of america. the economy of the southern northern states was very very different and evey today, the economy in montana im very different from the economy and lower manhattan. and we found a way to deal with that and to regulate it. the same is true in europe in the same is true in china and the same is true in india and brazil.

india. same is the same is true and brazil. this country deals with gaps between the rich and poor, agriculture, and earthen industrialize an evolving in much the same way that we're going to have to on the global stage for a the problem has been solved and can be solved. >> host: good afternoon, we have a caller from new york city. >> caller: hello, i'm so happy you're taking my call. my question is this fiscal cliff that we are approaching. if president obama allows it to happen, what kind of catastrophe are you talking about? i'm kind of concerned? so negatively will this affect the industry? how bad will it really be out there on wall street and main street? >> guest: well, let's say there are a bunch of people where the congress is